THE RELATIONSHIP BETWEEN SELECTED COMPENSATION FACTORS AFFECTING EMPLOYEE RETENTION IN THE OIL AND GAS INDUSTRY
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UNIVERSITI MALAYSIA SARAWAK
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Industries globally face challenges in attracting and retaining talent due to economic shifts and rapid technological change. In the oil and gas industry, employee retention remains a major concern. To stay competitive, companies are redesigning compensation strategies to support employee retention effort. This study aims to analyse the relationship between selected compensation factors which is salary, performance-based bonus, HR policies, and training and development and their effect on employee retention in the oil and gas sector. This study reinforces Herzberg’s Two-Factor Theory and the Total Rewards Model by WorldatWork, which together provide a framework for understanding how both monetary and non-monetary compensation influence employee retention. A quantitative method was employed using a structured questionnaire distributed to employees in one oil and gas organization located in Miri, Sarawak. A total of 80 responses were analysed using Spearman’s Rank Correlation and Multiple Regression to identify the strength and direction of the relationships, as well as the most dominant factor. The findings revealed that all compensation factors have a positive relationship with employee retention, with HR policies identified as the most dominant factor. Based on these findings, the researcher recommends that organizations should focus not only on monetary compensation but also on non-monetary strategies to improve employee retention effectively.