📖 ABSTRACT/OVERVIEW
This research investigates the effect of employee compensation on staff retention at AIICO Insurance Plc, a leading Nigerian insurer headquartered in Lagos, South West Nigeria. The insurance industry in Nigeria has experienced persistent talent attrition, particularly among mid-level professionals who frequently transition to competitor firms or alternative financial services sectors. Drawing on Lawler's Compensation Model, the study frames compensation as a multi-dimensional construct encompassing base salary, performance bonuses, health benefits, and non-monetary rewards. A survey design is employed, with 130 employees selected through simple random sampling across AIICO's Lagos operational units. Primary data are collected via structured questionnaires, and regression analysis is used to determine the effect size of compensation variables on retention intentions. Findings indicate that competitive base pay and health benefit packages are the most decisive compensation components in employees' decisions to remain with the organisation. Notably, non-monetary recognition mechanisms, including employee-of-the-month awards and public commendations, are found to significantly complement monetary compensation in sustaining retention. The study further finds that salary benchmarking against industry competitors is infrequently practiced, leading to recurring pay equity concerns. Recommendations include annual compensation reviews, structured benefits benchmarking, and the formalisation of non-monetary reward schemes. This study contributes to Nigerian HRM literature on talent management within the financial services sub-sector. Keywords: Compensation, Staff Retention, Insurance Industry, AIICO, Employee Benefits.
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