This dissertation is a collection of theoretical works discussing the relationship between various human resource policies and employee retention. I build my models on a turnover mechanism motivated by workers'private information about their feeling toward their current employer. Worker' use this private information s when deciding whether to continue working for that institution. This turnover mechanism provides interesting insights into various employment and compensation practices. This dissertation discusses the interactions of turnover with pay systems, promotion and …rm sponsored training. The …rst chapter I discuss the role of formal pay systems within …rms. The role of rigid bureaucratic wage rules within organizations has been a puzzle for some time. This paper provides an explanation for the use of these formal pay systems using two intuitive yet somewhat novel labor market assumptions. First, turnover is induced through wages and private worker non pecuniary taste shocks. Second, wage o¤ers by current employers are a signal of worker ability. In this model, such asymmetry induces even higher turnover compared to full information over worker ability. This increased turnover reduces the expected welfare of the worker. I show how formal pay systems such as pay scales and budgets can mitigate this problem and reduce ine¢ cient turnover. I also provide testable predictions in order to distinguish the wage signaling model from the symmetric information model. In the second chapter, I build an in…nite-horizon turnover model to address the relationship between turnover, promotion and wages. Firms are deeply concerned with the costs of employee turnover. However, traditional labor economic theory is ill equipped to justify this concern. I explain how …rms capture rent from its continual relationships with an employee. Consistent with empirical studies, I …nd that an employee' turnover rate will decrease once promoted. This paper also s generates new empirical predictions as well as other well established wage and employee turnover dynamics. In the third chapter, I examine the role of employee bonding contracts on turnover e¢ ciency. Turnover is generated by realizations of a private taste shock observed by the worker after a period of work with the employee. These shocks allow the …rm to exercise a type of monopsonostic power over their current employees creating ine¢ ciently high turnover in equilibrium. I show that if done correctly, employee bonding contracts such as pension or minimum employment terms can reduce this ine¢ ciency. The bond must be written so that the manager setting the wage does not directly bene…t from the worker quitting. This separation of the wage setter and the bond holder is necessary to generate the required e¢ ciency improvements. A competitive labor market ensures that these e¢ ciency gains are ultimately realized by the worker. Workers prefer …rms that use devices to reduce turnover ine¢ ciencies. I compare the results of this model to empirical work on pensions and tuition reimbursement plans.