An investigation into compensation scheme as a retention strategy at Kumasi Metropolitan Assembly.

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Human resource is one of the most important assets of every company and government institutions are not exception. Highly competent employees are migrating from public organizations to private companies for better paid jobs. Given the significance of motivation in the public sector, the issue becomes what motivates public employees to exert more effort in their jobs and for employers to retain them. This analysis is necessary to understand to what extent compensation may be successful as a motivational tool when applied in public sector organizations in Ghana. The present study is therefore aimed at identifying and establishing the correct retention strategy for the public service using Kumasi Metropolitan Assembly (KMA) as a case study. The general objective of this study is to determine how compensation scheme could be used as a retention strategy at KMA. One hundred and fifty of both management and other staff of KMA were used as the population for the study. The study relied on both primary and secondary data. Data were analysed qualitatively and quantitatively using Statistical Package for Social Sciences(SPSS) and Microsoft Excel. The study revealed that, the following compensation schemes are being used at KMA: bonuses, travelling allowance, fuel allowance, overtime allowance, risk allowance, salaries/wages. It was also noted that the compensation scheme that can best retain workers on their job is the financial rewards type which consist of base salary and other financial rewards. Notable among all the schemes, 40 workers representing (27.6%) said wages/salaries is the scheme that has best retained them. 125(86.2%) of KMA 4 workers were not satisfied with their current compensation scheme and that 130(89.7%) of respondents have the intention to leave. The study has revealed that financial rewards constitute the mostimportant retention strategy. Therefore the study recommends that effort should be put in place to maintain this motivational factor in order to retain staff of KMA.
A thesis submitted to the Department of Managerial Science, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION (HRM OPTION). 2012