Authors: Soniya Rana, Ms. Shruti Rawat
Abstract: Compensation fairness is increasingly recognized as a critical determinant of employee retention in contemporary organizations. This research paper investigates the relationship between perceived compensation equity and employee retention rates across the corporate sector. Drawing upon secondary data from industry surveys, HR analytics reports, and peer-reviewed literature spanning 2020 to 2025, the study explores how equitable pay structures, transparent compensation policies, and competitive benefits packages influence an employee's decision to remain with or leave an organization. The findings suggest that organizations with structured pay equity frameworks report 28 percent lower voluntary turnover compared to industry peers. Theoretical foundations of equity theory, expectancy theory, and the total rewards model are applied to evaluate current compensation practices and their effectiveness in retaining talent. The paper further identifies key dimensions of compensation fairness — including internal equity, external competitiveness, and procedural transparency — as central pillars of sustainable retention strategies. Recommendations are provided for HR practitioners seeking to align compensation architecture with long-term workforce stability goals.
DOI: http://doi.org/10.5281/zenodo.20232066
