Abstract:
A company's financial assets have always occupied central importance and banks are the part
of the financial institutions that look after that aspect. However, world's recent plunge into
financial crisis has raised this importance to critical level. Particularly, this has put direct effect
upon financial sector.
Compensation management deals with the ability to effectively compensate the employees to
work, and create a competitive advantage through highly motivated human resources.
Although, human resources are accepted to be organization's most important assets yet
organization's decision often depicts contradiction with this belief. Human resource should not
be neglected because they can bring competitive advantage to organization. Therefore, they
should be managed with equal importance with other functions of the business.
Employee participation, extensive employee training and performance, contingent incentive
compensation, are widely believed to improve the performance of organizations. Similarly, If
employees are compensated effectively they increase productivity of the organization.
The paper focused upon exploring different instruments and the factors of motivation which
they affect the banking sector of Pakistan. In order to achieve these objectives, interviews were
conducted at each level of employees of NBP.
The paper has concluded that Compensation Management has a profound direct positive
relationship with employee motivation level and intrinsic factors played important role in the
motivation process.
The paper recommends that banking sector shall apply progressive human resource strategy
and provide healthy compensation plans regarding benefits and intrinsic factors.
