Examining the Role of Reward Systems on Job Satisfaction and Employee Retention: Evidence of Islamic Banks of Sukkur City

Abstract

This examines the Role of the Rewards System on Job Satisfaction and Employee Retention: Evidence of Islamic Banks of Sukkur City. Grounded in Herzberg’s Two-Factor Theory and Social Exchange Theory, the research explores how rewards shape employee behaviour and motivation. A quantitative methodology is adopted, with responses collected from 216 employees across various Islamic banking institutions. Statistical techniques, including correlation, regression, and ANOVA, are applied to assess the relationships among the variables.

The findings reveal that the reward system has a significant and positive impact on both job satisfaction and employee retention. While its influence on employee retention is strong, the effect on job satisfaction is moderate but meaningful. This suggests that a well-designed reward system not only encourages employees to stay but also plays a vital role in enhancing their satisfaction at work. The study concludes that improving the reward structure is crucial for reducing turnover and fostering a motivated workforce. It recommends that Islamic banks implement transparent, fair, and comprehensive reward programs alongside initiatives focused on improving job satisfaction. These findings contribute to the literature by offering sector-specific insights and providing practical guidance for HR professionals and policymakers aiming to boost workforce stability in Islamic financial institutions.