ABSTRACT

This study investigated the influence of compensation structures on employee retention in food service operations in Umuahia metropolis. It adopted a survey research design. The study was carried out in Umuahia, the capital city of Abia State, Nigeria, where food service businesses are rapidly expanding. Five specific objectives, corresponding research questions, and hypotheses were formulated to guide the study. The population comprised all employees working in food service establishments within Umuahia metropolis, estimated at about 9,500 employees. It was a finite population. The sample size was determined using the Taro Yamane (1967) formula, which gave 370 respondents. The sampling technique employed was the accessibility (convenience) sampling technique. The instrument for data collection was a structured questionnaire. To ensure effective distribution and retrieval, the researcher engaged three research assistants, and the instrument was administered and retrieved on the spot to maximize the response rate. Data collected were analyzed using descriptive statistics (frequency counts and percentages) for research questions, while Chi-square statistical tool was used to test the hypotheses at 0.05 level of significance. The findings revealed that hourly wages, salary-based compensation, tips, bonuses, and equity-based compensation significantly influence employee retention in food service operations. Employees showed higher commitment and job satisfaction when compensation structures were fair, competitive, and transparent. The study concluded that compensation is a key determinant of employee retention in the food service industry, and that poor pay systems contribute to high turnover rates. The study recommended that food service employers in Umuahia should adopt fair and structured compensation policies, introduce performance-based incentives, provide health and retirement benefits, and create opportunities for training and career advancement to reduce turnover and enhance workforce stability.