COMPENSATION AND EMPLOYEE RETENTION IN TRANSITIONAL ECONOMIES: A COMPARATIVE STUDY OF POLAND AND VIETNAM
COMPENSATION AND EMPLOYEE RETENTION IN TRANSITIONAL ECONOMIES: A COMPARATIVE STUDY OF POLAND AND VIETNAM

Summary/Abstract: Background: Compensation and employee retention are among the top concerns of human resource management; however, their construct and meaning are strongly influenced by national institutional contexts. While existing comparative HRM research has highlighted contextual differences, empirical evidence from transitional economies still remains limited. Research purpose: The aim of this paper is to explore how national institutional environments shape compensation practices and their role in employee retention in transitional economies by comparing organizations operating in Poland and Vietnam. Methods: Based on institutional theory and comparative HRM, the study employs a qualitative case study approach. Data were collected through semi-structured interviews and document analysis conducted in one company in Poland and another in Vietnam. Conclusions: The findings indicate that although both organizations consider employee retention as a strategic priority, their compensation practices differ significantly in structure, meaning, and function across institutional contexts. In Poland, compensation systems are highly formalized and performance-based, serving mainly as a baseline element within a broader retention strategy that emphasizes career development and work-life balance. Conversely, in Vietnam, compensation (particularly year-end bonuses) functions as an informally institutionalized practice that enhances income stability and reinforces organizational legitimacy, thus playing a more significant role in employee retention. These results suggest that employee perceptions of fairness and retention are shaped by deeply embedded institutional norms, rather than universal principles. By offering empirical evidence from the two under-researched transitional economies, this study contributes to the comparative HRM literature and highlights the importance of context-sensitive compensation strategies in international human resource management.

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