Abstract:
Purpose
This study aims to explain the relationship compensation and employee performance. This study
investigates the predictor-criterion relationship by targeting employees from the banking industry
of Karachi, Pakistan.
Methodology & Design
Banking sector employees have served as the research population for this study. Using a purposive
sampling technique of non-probability method, this study has collected primary data from the
banking sector employees of Karachi, Pakistan. The survey data is based on responses collected
from 370 employees. This study has tested the hypothesized relationships by running multiple
linear regression analysis.
Findings
The overall compensation has positive impact on employee’s performance. Salary and rewards which
is part of direct compensation have positive relation with employee’s performance.
Indirect compensation and recognition also affects employee’s performance. Recognition have
positive relation with employee’s performance.
Limitations
Firstly, limited generalizability ofthe findings as the sample subject was Karachi based only,
hence, findings cannot be generalized to other regions ofthe country. Secondly, the present study
deals with the banks of Karachi, Pakistan only, therefore it is not conceivable to predict the
scenarios ofother industries by applying the findings ofthe present study. In the end, this study
has only focused on current employees only.
Recommendations
The compensation program must be fair so the employees got motivated and perform high. If the
salary of an employee is less than fill this space through indirect compensation, and recognition.
