The effect of compensation and organizational commitment on employee satisfaction and retention

ABSTRACT: Employee retention is a process when employees are motivated to stay in the organization for along period of time. Employee retention refers to a variety of strategies and practices, which allow employees toadhere to the organization for a long time. The purpose of this study was to determine the effect ofcompensation and organizational commitment on job satisfaction and employee retention at PT. BPR GianyarPartasedana. This research was conducted at PT. BPR Gianyar Partasedana, Bali, Indonesia. By involving 45respondents with saturated sample collection techniques. The data collection used a questionnaire, while thedata analysis technique used descriptive statistical analysis, path analysis and single test. The results of thisstudy found that compensation has a positive and significant effect on employee retention, organizationalcommitment has a positive and significant effect on employee retention, job satisfaction has a positive andsignificant effect on employee retention, compensation has a positive and significant effect on job satisfaction,organizational commitment has a positive and significant effect on employee retention. job satisfaction, jobsatisfaction mediates the effect of compensation on employee retention and job satisfaction mediates the effectof organizational commitment on employee retention. The implication of this research is that all variables,namely compensation and organizational commitment, have a positive and significant effect on job satisfactionand employee retention. In this way, the BPR management is expected to be able to manage and retain goodquality employees for the long-term health of the company.

Keywords: compensation, organizational commitment, job satisfaction, employee retention.