The Nexus between Extrinsic Motivation and Employees’ Retention; Do Compensation Packages and Flexible Working Hours Matter?

Abstract

Purpose: This study aims to identify the motivating factors that can help banks succeed in a highly competitive environment, and to explain the relevance of effective motivational factors that banks can utilize to encourage and retain competent personnel. Design/methodology/approach: This study was quantitative. Primary data were obtained from the BLC Bank and Fransabank, both of which are located in Beqaa, Lebanon. A questionnaire was distributed to 97 employees of two commercial banks. Descriptive statistics and t-tests were used to assess the data and validate our research hypotheses. Findings: Bank employees at the two institutions did not differ significantly in their preferences for extrinsic motivations. In addition, employees agreed that this compensation package and flexibility in working hours were critical to keeping them engaged in their work and dedicated to the bank. Research limitations/implications: The study's findings relied entirely on extrinsic factors; they did not account for or even considered intrinsic motivation. Practical implications: Leaders in the banking sector would do well to pay attention to the remuneration packages supplied to employees and adapt the work schedule to retain staff members in an increasingly competitive job market. Social implications: If a bank provides extrinsic motivation, it may increase workers' sentiment regarding safety, security, and belonging. Thus, satisfied customers become brand ambassadors by sharing their positive experiences. Originality: This study adds to our understanding of the role of two extrinsic factors in boosting motivation and maintaining bank personnel (pay packages and flexible work). Our study also contributes to literature on leadership and motivation.