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Now a days a lot of job opportunities in the banking sector of Pakistan. Every employee wants to get highly pay job. Employees are moving from one banking sector to other banking sector due to satisfaction level some employee get their satisfaction due to money/ Compensation packages or some employees get their satisfaction due to their interest e.g. top management level job, good status etc. so it is important need to research on this questions. So, the research questions are as under.
Q1: Has money/Compensation playing important role in job satisfaction of the employees who works in the banking sector of Pakistan?
Q2: Does money/compensation packages can buy the job satisfaction and how it affects the performance of the employee?
Q3: In banking sector of Pakistan employees are not working for money actually they are working for job satisfaction to get good reputation and good job status.
Pay and Job Satisfaction
Fixed pay is initial pay which an employee gets at the end of each month as per contract. According to (Gazioglu & Tanssel, 2006) if the employee gets the higher pay the satisfaction level of the employee will be the high. Furthermore (Santhapparaj & Alam, 2005) money is one of the major factor of motivation the relationship between the money and job satisfaction is positive.(Tang, Luna-Arocas, Sutarso, & Tang, 2004)For high-love-of-money professors (lecturers), the relationship between income and pay satisfaction was positive and significant, however, for low-love-of-money professors (lecturers), the relationship is not significant. Moreover (Stringer, Didham, & Paul, 2011) Intrinsic motivation was positively associated with pay and job satisfactions, whereas extrinsic motivation was negatively associated with job satisfaction, and not associated with pay satisfaction. The qualitative insights indicate that pay fairness is important, and those who perceived pay was not fair generally made comparisons with others or felt that pay did not reflect their effort. It is also found that the majority of employees perceived that goals were clear. Further (Tella & Ayeni.C.O, 2007) Job satisfaction represents several related attitudes which are most important characteristics of a job about which people have effective response. These are the work itself, pay, promotion opportunities, supervision and co-workers. According to (Clark, 1999) Conclude it is important measure of well-being, overall job satisfaction, is strongly positively correlated with the change in the worker's pay between waves, but is unrelated to the current level of pay and also presented of greater job satisfaction effects of pay rises for lower paid, less well-educated and younger workers. (Steijn, September 2012) Discuss in Dutch public sector there is a positively associated with task and pay satisfaction. (Moyes, May 2007)The satisfaction level will be greater when he receive higher pay. If the pay is higher the satisfaction level will be higher and higher and also pay brings different compensation packages which will motivate the employee. Fix pay is the amount which employees receive per month and additional benefits motivate the employee. According to (G. Gardner, Dyne, & Pierce, 2004) Most compensation managers implicitly assume (or perhaps hope) that high pay levels will maintain and enhance future performance. Given the importance of pay level and the large expense that pay represents to most organizations, understanding how and why pay level in¬‚uences the behaviour of employees in organizations is an important factor and motivation effects of pay level on employee performance. He concluded, pay level influenced employee performance through its effect on organization-based self-esteem indicates that organizations can increase the return-on-investment of their compensation dollars by reinforcing the connection between pay level and the employee's value to the organization. According to (Singh, 2010) study the relationship among pay satisfaction, job satisfaction and turnover intent using a multidimensional approach to pay satisfaction he concluded pay satisfaction affect turnover intent, job satisfaction may be a more crucial variable in terms of nurses turnover. (Malik, Nawab, Naeem, & Danish, June 2010) determine the impact of teachers' satisfaction with job dimensions on perceived organizational commitment in public sector universities of Pakistan. In addition, they explore to what extent these teachers are committed to their universities and satisfied with different dimensions to their job. The findings of the study indicated that the satisfaction with work-itself, quality of supervision and pay satisfaction had significant positive influence on organizational commitment of faculty members. They had high degree of organizational commitment and satisfaction with work-itself, supervision, salary, co-workers and opportunities for promotion.
Base pay is the money which an employee receives at the end of each month. This is the fixed amount of money which an employee receives. If the base pay of the employee is greater the satisfaction level of the employee will be greater and the same time the other compensation packages will be more. According to (Chiu, Luk, & vivienne, 2002) in Hong Kong, base salary, merit pay, year-end bonus, annual leave, mortgage loan, and profit sharing were the most important factors to retain and motivate employees.
(Laydon & Chevalier, May 2002) studied on job satisfaction and conclude that the direct wage effect on job satisfaction doubles. Several variables relating to job match quality also impact on job satisfaction. Graduates who get good degrees report higher levels of job satisfaction, as do graduates who spend a significant amount of time in job search. He shows that future wage expectations and career aspirations have a significant effect on job satisfaction and provide better fit than some ad-hoc measures of relative wage. (Khan, Nawaz, Aleem, & Hamed, Feb 2012) In Pakistan, the doctor's profession is considered gorgeous and dignified because it is directly related to the lives of human beings. In Pakistani society, there is a general inclination that in government hospitals, the patients are not properly treated by the doctors. He found out factors that influence level of job satisfaction among the workforce of autonomous medical institutions of Pakistan and its effects on performance. It is concluded from study that facets such as: pay, promotion, job safety and security, working conditions, job autonomy, relationship with co-workers, and relationship with supervisor and also nature of work; affect the job satisfaction and performance. (Ram & V. Prabhakar, 2010) in recent years, pay satisfaction has been increasingly studied in an international context, prompting its relevance in a modern developing country like Jordan he concluded all factor loadings for the four dimensions of pay satisfaction are relatively strong, with the highest for Pay-raise, followed by Benefits, Structure/Administration and then Pay-level potential
(Alina & Simmons, 2008) Study the relationship between human resource management (HRM) practices and workers overall job satisfaction and their satisfaction with pay after controlling for personal, job and firm characteristics, it is found that several HRM practices raise workers' overall job satisfaction and their satisfaction with pay. However, these effects are only significant for non-union members. Satisfaction with pay is higher where performance-related pay and seniority-based reward systems are in place. A pay structure that is perceived to be unequal is associated with a substantial reduction in both non-union members' overall job satisfaction and their satisfaction with pay. Although HRM practices can raise workers' job satisfaction, if workplace pay inequality widens as a consequence then non-union members may experience reduced job satisfaction. (Yen & McKinney, 1992)Employees are more satisfied with their pay raises, structure, and administration. Positive relationships between perceived job characteristics and compensation satisfaction were found for both public and private managers
Flexible Pay and Job Satisfaction
(L. Henaman, B, Greenberger, & Strasser, 1988) study the relationship between pay-for-performance perceptions and pay satisfaction. He results conclude the positive relationship between pay-for-performance perceptions and pay-raise satisfaction, pay-level satisfaction, and overall pay satisfaction even after the effects of salary level, salary increases, performance ratings, job tenure, job satisfaction, and promotions were controlled. (Hackman.J.R & Oldham, 1980) concluded higher the level of satisfaction higher the performance of the employee and low absentees
To achieve alignment of their compensation systems with high involvement, high commitment strategy, many organisations todays are thinking their compensation strategy. This need to align compensation with business and organisational strategies is driving forces for the implementation of the variable pay. According to (John G. Belcher, 1996) the driving force for the implementation of variable pay in American industry is the need to make portion of the employee's compensation contingent on the performance of the company. Furthermore (Tahir & Kaleem) recommendation to enhance the performance of employees in WAPDA is to launch an incentive plan to compensate the employees for their extra work load. It creates a sense of competition among employees which in the long run improves organizational performance and creates job satisfaction and motivates them.(Oshagbemi2000) concluded management can play vital role in employee job satisfaction by offering them variable pay. Increase in flexible pay of an employee or addition in pay except fix pay keep employee financially strong and more satisfied and they are more able to perform well. Management have considered in mind the flexible pay when the plan the compensation packages for the employees. Employees wants to earn maximum money from the job is in the form of flexible money if they find that opportunity at somewhere else he will avail that opportunity
(Sweins & Kalmi, 2008) Knowledge of the pay system has been identified as one of the key elements affecting the success of the reward system. Communication, performance feedback and membership length are related to profit-sharing knowledge, and how profit-sharing knowledge is related to profit-sharing satisfaction and organisational commitment. Better profit-sharing communication and higher membership length increase profit-sharing knowledge. The relationship from profit-sharing knowledge to commitment is mediated by profit-sharing satisfaction.
(Origo, 2009) Organisation pay strategy from a fixed wage to a flexible pay scheme on the performance of the treated organisation performance-related pay (PRP) may produce both incentive and sorting effects, making the incumbent workers more productive and attracting the most able workers. Furthermore, productivity gains may be shared with the workers through higher wages and heterogeneous effects may be expected by union density. (Turner, D'Art, & Daryl, 2002)The objects of profit sharing vary according to its proponents. It will lead to an improvement in organizational performance, employee behaviour and effect of profit sharing on profitability, productivity and employee turnover and absenteeism. There is a positive relationship between profit sharing and organizational performance.
Compensation and Job Satisfaction
(Igalens & Roussel, Jan 2000) examine how the elements of total compensation might influence work motivation and job satisfaction he studied separately in order to identify the differences of reaction between these two groups. Proposals were developed to predict the conditions of compensation efficiency on work motivation and job satisfaction in the cultural context of employment in France. The three principal conclusions of the study were under certain conditions, individualized compensation of exempt employees can be a factor of work motivation; flexible pay of non-exempt employees neither motivates nor increases job satisfaction; benefits of exempt and non-exempt employees neither motivate nor increase job satisfaction. (Ghazanfar, Chuanmin, Mahroof, & Bashir, 2011) study while applying the theoretical framework based on expectancy theory examined the relationship between satisfaction with compensation and work motivation. The dimensions i.e. fixed pay, flexible pay, and benefits were examined with regard to satisfaction with compensation.
The relationships between satisfaction with compensation and work motivation were analysed by using Chi Square and correlations. He concluded satisfaction with compensation can be factor of work motivation, flexible pay is not a motivating factor in the jobs which the employees were holding, and benefits do not have a significant impact on work motivation. (Lam & Zhang, 2003) Studied of new employees socialization have gained importance in the fast food industry in view of the demand for high quality service in this increasingly competitive business environment. New employees in the industry are unique in terms of job expectations. He investigates the unmet expectations of new employees, and the relationships between unmet expectations, job satisfaction and organizational commitment in the Hong Kong fast food industry and concluded that expectations are normally unmet, and job characteristics, training and development, and compensation and fairness are related to satisfaction and commitment.
(Dulebohn & Werling, june 2007) Compensation has largely reflected organizational characteristics and personnel practices that had an internal rather than an external focus. Consequently compensation focused on issues related to managing compensation in this type of structure that emphasized areas such as internal equity, job evaluation, and individual reactions to pay. Recent changes in the environment have resulted in a greater role of external factors, such as external labour markets, market pricing, and external competitiveness, on compensation practice. While practitioners today have more of an external focus in compensation system designs. (Savery, 1989) study the perceived influence of different items on the job satisfaction of nurses. It was discovered that intrinsic motivators were the major motivators for the respondents, with salary ranking tenth in a list of twelve items. Therefore the growing modern approach of designing compensation packages by considering the total job rather than some of the parts of the job such as the traditional areas of pay and working conditions. This means that the human resource manager has a more difficult problem in having to design a compensation package which the individual will find motivating rather than the traditional method of adjusting the pay or working conditions. It is suggested firstly, that a companywide survey be conducted periodically, at least once every two years, to measure the workforce's view of the motivators used by the organisation. Secondly, a conjoint analysis on the desired compensation packages of the members of the workforce could be carried out. (Suutari & Tornikoski, 2001)Expatriate compensation has been commonly said to be a very complex and challenging issue both for expatriates and for companies. As a result, dissatisfaction with compensation is reported to be very high among expatriates and conclude that the most difficult issues were found to be taxation, availability of information about local cost level/standard of living, currency rate risks, social security and pension issues, as well as spouse-related issues. He found the majority of the expatriates were satisfied or even very satisfied with their treatment. The major sources of satisfaction were the lower level of taxation, the higher total salary level and allowances (in particular the car allowance). Furthermore, in the majority of the cases the expatriates reported that the companies had clear compensation principles, that they had enough prior information to negotiate and thus the contract-making situation was not perceived to be very difficult. The reported redesign needs regarding existing compensation packages were found to vary a lot from case to case, but the most common issue was a too low total salary level. In conclusion, some advice is given to future expatriates and international companies.
Benefits and Job Satisfaction
(Gyu-chang, E Nancy, & Chris, 2008) highlights the role of flexible benefit systems (FBS) in enhancing employee satisfaction. While this is supported by some empirical evidence, most findings mainly pertain to the 1990s and North America and the private sector. Fewer studies have used other national settings or the public sector. Therefore this study used a large sample of employees in central government departments in South Korea to examine the impact of FBS on levels of employee (benefit and job) satisfaction at two points in time. This was pre- and post-FBS in the same departments and the control departments continuing without FBS. His findings suggest that the benefit satisfaction of employees increases with FBS and although job satisfaction was also positive, it was not statistically significant. The wider implications and relevance of our findings are also elucidated. (Islam & Gour) evaluate job satisfaction of bank officers in Bangladesh and focus on the relative importance of job satisfaction factors and their impacts on the overall job satisfaction of officers. He concluded that salary, benefits, efficiency in work, fringe supervision, and co-worker relation are the most important factors contributing to job satisfaction. Private bank officers have higher levels of job satisfaction than those from public sectors as they enjoy better facilities and supportive work environment. Work experience is found as the second most important factor affecting job satisfaction. Sex and age differences have relatively lower level of impact on it. The overall job satisfaction of the bank officers is at the positive level.
(Suutari & Tornikoski, 2001)The major sources of satisfaction were the lower level of taxation, the higher total salary level and allowances (in particular the car allowance)
(Luchak & Gellatly, 2002) examine the incentive effects of a final-earnings pension plan on employees' job satisfaction. Contrary to rational economic expectations, job satisfaction is found negatively related to expected accruals under the pension plan. Satisfaction was also lower among those who perceived a higher likelihood of being declared redundant, had better nonmarket alternatives, and who viewed conflictual approaches as most effective in resolving prior disputes at work. Conversely, employees who perceived greater support for employer-sponsored training, perceived such training to be effective, and believed cooperative approaches to dispute resolution worked best, were more satisfied.
(Ohashi, 2005) analyse, theoretically and empirically, the effects of pension benefits, family conditions and the personal characteristics of older individuals on their labour supply, wages, hours worked and job satisfaction, in the framework of the Nash bargaining condition whereby an older worker and a firm bargain over employment conditions such as wages, hours of work and job investment. It is stressed that as workers become older they tend to give greater priority to the number of hours worked, work environment and type of job than to wages, and try to improve these through job investment, even at the cost of lower wages.
Job Satisfaction and Performance
(Yousef2000) Study the potential mediating role of organizational commitment in the relationships of leadership behaviour with the work outcomes of job satisfaction and job performance in a non-western country where multiculturalism is a dominant feature of the workforce and also explores the moderating effects of national culture on the relationships of leadership behaviour with organizational commitment, job satisfaction and job performance in such a setting. He concluded (in support of many western studies) that those who perceive their superiors as adopting consultative or participative leadership behaviour are more committed to their organizations, more satisfied with their jobs, and their performance is high and also indicate that national culture moderates the relationship of leadership behaviour with job satisfaction. (Hanif & Kamal, 25th June 2009)Discuss the various factors of job satisfaction among different commercial bankers in Pakistan and highlight the findings by performing statistical techniques like regression and correlation to gauge level of significance for the factor. Pay has been considered as the major factor for job satisfaction however other related factors like promotion, recognition, job involvement and commitment are also taken into account. Job satisfaction is an attitude of an employee over a period of his job so the factors of satisfaction and dissatisfaction changes over the period. It is a relative term and is nowadays used as a key factor to gauge the performance of a particular employee and organization. Satisfied employees are more likely to be friendly and responsive which attracts customers. Dissatisfied employees can lead to customer dissatisfaction.