| Abstract: | The aim of this study was to assess the relationship between financial compensation and the
turnover intention of employees in Awash Wine Share Company. Quantitative research approach
followed by correlation research design was utilized. Lottery method of probability sampling
technique was employed to select the respondents. A self-developed close-ended questionnaire,
with five points of Likert scale was administered for 150 respondents. Percentage, mean, standard
deviation, Person correlation and multiple regression were used as data analyses techniques. The
results revealed that the majority of the respondents were not sure about the presence of financial
compensation policy (Grand Mean = 2.87, SD = .814), and they seemed not to have good
impression toward the existing financial compensation policy as the grand mean value was slightly
below neutral (Grand Mean = 2.90, SD = .839). Moreover, there is significantly negative
correlation between financial compensation (base pay, overtime pay, allowance pay, commission
pay, merit pay, and bonus pay) and turnover intention of employees in Awash Share Company.
Furthermore, a stepwise multiple regression analyses found that the financial compensations can
influence the turnover intention to an extent of 26.7 % (R square, which is statistically significant
at p< .01). However, the regression coefficient value indicted that only two financial
compensations namely, bonus pay (18.2%) and commission pay (9.8%) explain significant
influence on the intention of employees to leave the case company. In conclusion, there exists
significantly negative correlation between financial compensation and turnover intention of
employees. Designing appropriate compensation policy which focuses on a variety of financial
compensation was a forwarded recommendation so as to reduce the turnover intention of
employees in the case company. |
