THE IMPACT OF COMPENSATION ON THE MORALE AND RETENTION OF NEW HIRES IN THE NIGERIAN BANKING SECTOR

Abstract

This study investigates the impact of compensation on the morale and retention of new hires in the Nigerian banking sector. Using a quantitative research design grounded in the positivist paradigm, data were collected via structured questionnaires from 170 purposively selected employees across First Bank, Guaranty Trust Bank, and Globus Bank. Descriptive statistics and simple linear regression were employed to analyze the data using SPSS. The findings revealed that higher compensation significantly enhances new hires’ morale, job satisfaction, productivity, and retention. A unit increase in compensation led to a 14% rise in morale, a 15% increase in job satisfaction and productivity, and a 25% increase in retention, all statistically significant at the 0.05 level. The study concludes that competitive and transparent compensation structures are essential for motivating and retaining early-stage employees. It recommends regular salary reviews, transparent pay policies, mentorship programmes, and long-term incentive plans to foster employee engagement and organizational stability.

About this paper

The research paper “The Impact of Compensation on the Morale and Retention of New Hires in the Nigerian Banking Sector” primarily contributes to the fields of human resource management and organizational behavior by providing empirical evidence that directly links compensation strategies to employee morale and retention rates among new hires in a specific, understudied context. It moves beyond general theories to show how factors like salary, benefits, and bonuses are not just monetary rewards but crucial tools for boosting a new employee’s spirit and loyalty. The study’s findings offer actionable insights for Nigerian banks, helping them to design more effective compensation packages that can reduce costly turnover and build a stable, motivated workforce from the ground up. By focusing on this specific demographic and industry, the paper fills a notable gap in existing literature, offering a practical framework for talent management in a competitive market.

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