Compensation management and employee motivation in commercial banks

Abstract

Motivation plays a vital role in assessing employee performance and the overall condition of an organization. It functions as an internal force that encourages employees to fulfill both individual and organizational goals. This research investigates how employee compensation affects motivation, following a positivist epistemological approach. The study adopts a descriptive and causal research design, applying statistical techniques such as ANOVA, T-tests, correlation, and regression analysis. Data was collected through questionnaires distributed to employees of commercial banks in the Kathmandu Valley to examine the relationship between compensation and motivation.

The findings reveal a strong relationship between employee motivation and compensation, where elements such as rewards, recognition, and compensation are crucial in driving motivation. Employees view fair evaluation and the equitable distribution of rewards as essential for encouraging effective performance. Although compensation alone appears to have an insignificant or even negatively significant effect on motivation, rewards and recognition positively influence it. Additionally, compensation levels differ considerably based on factors such as age, gender, job position, educational qualifications, monthly income, and work experience.

Key word: Employee Motivation, Employee compensation, Reward, Compensation, Recognition, Nepalese commercial bank