The Impact Of Compensation Management System On Employee Performance In The Banking Industry

The continuing labour crisis between management and workers over increase in employee pay among the Banking employees is challenging each Bank to use its employees more effectively to improve organizational performance.In the Banking industry,compensation has become a driving force behind individual for seeking employment in the industry.The destructive nature of the crisis in the management of labour as a result of rising pay in the Bank is challenging each Bank to use its employees more effectively to advance its organizational performance.Potential employees seeking to find jobs in the industry are however,driven by the high compensation they envisage to receive from the Bank.Therefore,the problem of salary management leads to labour crisis.Even though compensation management is not just about money,it also involves non-financial compensation,which provides internal or external motivation,that is,employee satisfaction.This paper,therefore,examines the important impact of the compensation management system on the performance of the Banking industry(research on the Banking industry at Lanzhou,China).There are two main purposes of this study.One is to determine if there is a significant relationship between compensation management system(financial and non-economic compensation)and employee performance,and the other is to determine the extent of impact.The purpose of this study is to understand whether employee performance depends on how satisfied they are with the job and whether the financial and non-economic compensation employees receive is equal to the time and effort they put into work.A research statistical questionnaire was used to collect information from 317 respondents from 13 Banks at defriend branches all across the research area.Descriptive survey and statistical analysis method by combining both qualitative and quantitative research methods were employed.In addition to this,a graphical demonstration was also conducted to further improve the analysis and understanding of respondents' responses.The study found that there is a significant positive correlation between employee performance and economic compensation.Through analysis,the performance of employees is related to their available financial compensation system.However,there is no significant correlation between employee productivity and employee satisfaction with pay.The study also found that 153 out of the 317 respondents were dissatisfied with the wages they received.It is,therefore,empirical and evidential from the survey analysis that employees in the Banking sector are not satisfied with the compensation management system provided to them by their employers(Banks).Notwithstanding,the performance of the employees and as well their productivity in the industry is still at the high side.It's conclusive,therefore,that the salary standards are not satisfactory.Based on this,this paper proposes the following recommendations,calling on management to take a more satisfactory approach to handling the compensation system of the workers for a natural satisfactory and effective performance of the employees;management should pay more attention to workers' salary adjustment;also the employers(the Banks)should establish appropriate communication channel between management and other staff so to advice the means of getting information on the needs of the employees in time.