Explaining the Causes of Employee Turnover in Iranian Knowledge-Based Organization and Providing solutions: An Examination of the Role of Compensation System

Abstract
The purpose of this study is to identify the reasons for employee’s turnover of Iranian knowledge companies in the field of compensation system and providing constructive strategies to reduce the rate of turnover. The methodology of the present study is mixed method. The statistical population of the study in qualitative and quantitative parts consisted of 220 knowledge workers in knowledge-based organizations of Sharif University of Technology who left their organizations. Sample size in the quantitative section consisted of 138 persons who were selected by random sampling. Sample size in the qualitative section consisted of 30 persons selected by snowball method. Data were collected through a questionnaire in the quantitative section and interviews in the qualitative section. Friedman and t-test were used to analyze the data in quantitative part and the thematic analysis was used in the qualitative part. The results show that all of eighteen components of compensation system were below average and they are main reasons for leaving knowledge workers. Proposed solutions presented in seven process, human, financial, cultural, technological, structural and legal-political themes. The results of this study can help improve compensation policies in order to maintain key forces in knowledge based organizations.
Introduction
One of the main concerns of managers and owners of knowledge-based companies in recent years are reducing the efficiency of personnel and increasing of voluntary creative, efficient and elit worker’s turnover (Nelson & McCann, 2010). Most studies on employee turnover have focused on the demographic and monetary and economic aspects of this phenomenon (Afkhami Thibalult et al., 2017), while one of the main causes of employee turnover is their dissatisfaction with the compensation system in organization (Nemati et al., 2014; Clark, 2013).
Employees' dissatisfaction with the compensation system will lead to a decrease in the efficiency of the organization and in the long time will lead to employees' turnover (Berger & Berger, 2015, p. 15). Accordingly, identifying all aspects and components of compensation that are effective in employee turnover can provide the basis for identifying and meeting the needs of knowledge workers and their growth and development, reducing the dissatisfaction of the forces and ultimately minimizing employee turnover rate. The purpose of the present study was to identify the components of compensation system affecting on staff turnover and to provide solutions to reduce the turnover rate of knowledge workers.
Case study
The statistical population of the study in the qualitative and quantitative part consisted of 220 employees of knowledge-based organizations of Sharif University of Technology who left their organizations.
Theoretical framework
Employee turnover is a common issue in domestic and foreign research. Leaving a job is a conscious and largely planned tendency to look for opportunities and career options in other organizations (Lambert et al, 2010). Despite the positive and negative views about quitting, the overwhelming aspect of the comments emphasizes on detrimental impact of knowledge-based worker’s turnover due to the difficulty of replacement and the likelihood of transferring capabilities to competing organizations (Stypinska & Turek, 2017). The results of the studies show that many of the components of employee turnover are related to the components of compensation system.
Different theories and models have been put forward during the formation of compensation system. The first models were called compensation of economic and financial services. Then human-economic models emerged and finally explained to improve the efficiency of total compensation models and consideration of total aspects of compensation, total compensation model introduced (Thibalult et al., 2017). Hay group model is one of the best models which used in this study.
Methodology
The research methodology is mixed method. Sample size in the quantitative section consisted of 138 persons who were selected by random sampling. Sample size in the qualitative section consisted of 30 persons selected by snowball method. Data gathering tool are questionnaire and interview. Data analysis was done in quantitative section using t-test and Friedman tests using SPSS software. Data analysis was done in the qualitative part of the study by thematic analysis and using open coding.
Discussion and Results
The results of the quantitative section of the present study show that all of the eighteen components related to the compensation system are below average and thus are among the reasons for leaving the staff of Iranian knowledge companies. Qualitative results, based on coding interviews, provide solutions to improve compensation policies and reduce employee turnover in seven areas of finance, technology, process, structural, cultural, legal-political and human.
Conclusion
The results indicate that through flexible work, effective communication, providing a framework for human resources development, needs assessment and training, knowledge management, clarifying organizational practices, paying attention to knowledge culture factors, paying attention to fair pay, organization, design and enrichment of knowledge jobs, talent management, standard performance management and improvement of recruitment structure in line with the nature of the knowledge organization can reduce the rate knowledge worker’s turnover and prevent not only leaving and low work rating of forces, but also improve satisfaction and ultimately productivity of organizations.