Motivational Compensation - A Factor In Staff Turnover In Retail Organizations

The most important factor in any organization is its employees. Due to rapid changes in global business, employees are facing increasingly complex requirements. If misunderstandings and indifference towards the importance and impact of motivation prevail in an organization, this will inevitably create tension in the work environment; employees will become unmotivated, and therefore less efficient. All this will lead to lower quality of products and services, reducing the organization profitability, but also to undesirable staff turnover. Within retail trade especially high staff turnover is recorded, and the growth trend can only increase costs for retail organizations. Employers must become aware of the positive correlation between employee satisfaction and profitability in retailing, where it is important to match well-organized business with adequate financial support for employees. This paper explains motivational compensation that reflects financial (direct and indirect) and non-financial motives for work, with special emphasis on its influence on staff turnover within retail organizations. We also want to investigate the presence and level of motivational compensation within retail organizations in Eastern Croatia as compared to other activities. Furthermore, we will look into the extent of staff turnover in retailing, as well as its main reasons.