A Study on Compensation Management with Reference To Bank

Employees Working in Hyderabad

I. Vamshidhar Reddy
Medipally, Uppal,
Hyderabad-500098, India.

ABSTRACT: Key words:

The study aims to find out the impact of the Compensation Management, Banking employees,
Compensation on the employee productivity and the employee productivity.
employee perception and satisfaction levels towards
the Compensation. The study Compensation 1. INTRODUCTION:
management gives the brief information about the Compensation represents an exchange between the
employee Compensation in the organization and it employee and the organization. Each gives something
explains employee reward system and it determine the in return for something else. In the past, the
performance of employee on their work. The Rationale Compensation issue was often confidential and
for the study is to design the suitable Compensation governed by individual employer’s preference and
package for employees which is Cost Effective and at choice. However, in today’s competitive world,
the same time provides Job Motivation to Employees. Compensation issues are more transparent. Different
scholars in different countries have defined the world
The study is done at Hyderabad in banks. The Compensation from different perspectives. Globally,
sampling technique used was convenience sampling. almost every country views Compensation as a
The respondents were asked to fill the questionnaires measure of justice. Also, some countries (particularly
and thus the primary data is collected. Secondary data developed ones) consider Compensation as a means of
was collected from various sources like books, survey protection against potential job loss. Compensation
reports, web etc. The study is based on the hypotheses should be fair, irrespective of economic consideration.
that the employee production and retention are not Many scholars believe that Compensation is the
related to the Compensation in an organization. outcome of productivity. In India, right from Vedic
Age, the volume of work and the time required to
The data collected from the primary source and the perform the work were considered to decide
secondary sources was analyzed using appropriate Compensation [1]. The modern definition of
research tools like graphs, tables etc. From the study, it Compensation, however, considers both intrinsic and
was found that the employees are satisfied with the extrinsic components of Compensation. While
Compensation and the salary administration policy and extrinsic Compensation covers both monetary and
they feel that their Compensation is worth the value of non-monetary rewards, intrinsic Compensation covers
their position. And the employees agree that the both monetary and non-monetary rewards; intrinsic
Compensation policy in their organization helps Compensation reflects the employees’ mental
employees and their families achieve improved quality satisfaction with their job accomplishments.
of life and financial security.
Cite this article as: I.Vamshidhar Reddy, "A Study on
Compensation Management with Reference To Bank Employees
Working in Hyderabad", International Journal of Research in
Management Studies, Volume 2 Issue 11, 2017, Page 33-38.

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2. LITERATURE REVIEW: In those organizations that do not adopt a strategic
The role of human resource management in gaining approach, existing approaches often act as barriers to
competitive advantage has been discussed in the the implementation of strategy rather than as levers to
western literature since the early eighties. Schuler and support or facilitate it, they are at risk of reacting to
MacMillan (1984) discussed how companies can somebody's agenda. Failure to have a strategic
strategically utilize their infrastructure requirements to approach to HRM will directly impact on the
gain competitive advantage, particularly through their performance of the organization, however it is
human resources and human resource management measured. Critically, failure to take a strategic
practices. Although there are many ways by which approach will have implications for costs, efficiency,
companies can gain a competitive advantage, as productivity and quality. Rozhan bin Othman (1996),
MacMillan (1983) has suggested, one way often examined the relationship between strategy and HRM
overlooked is through their human resource practices in the Irish Food Industry. The main focus of
management practices. HRM practices enable the study was to examine the relationship between
companies to gain competitive advantage in two major competitive strategy and HRM practice. The study
ways: one is by helping themselves and the other is by utilized a sample from the Irish Food Industry. Firms
helping others. There appears to be a significant with more than 25 employees were selected for the
benefit from having HRM considerations represented study that gave a sample of 497 firms. A questionnaire
in strategy formulation stage rather than only in the addressing two key areas of HRM practice and
complementation stage. Schuler (1992), proposed the strategy was developed and marked to the personnel /
5-p model of strategic HRM which melded various HR human resource managers of all these firms. The
activities with strategic needs [2]. findings of the study did not support any of the
hypothesis forwarded [4].
These five P's (HR Philosophy, Policies, Programmes,
Practices and Processes) according to him can be This suggested that the impact of strategy on HRM
categorized into strategic on the basis as to whether practice is les pervasive, if it exists at all, than
they are systematically 3 linked to the strategic needs suggested in HRM literature. Instead, the evidence
of the business. One benefit of the 5-P model is that it showed that when controlled for employment size,
shows the interrelatedness of activities that are often none of the strategies associated with HRM practice
treated separately in the literature. This separate focus can be considered distinct. Other variable, specially the
perhaps necessary for research purposes tends to presence of a HRM department, appear to exert more
understand the complexity of how HR activities influence over the form of HRM practices of the
influence individual and group behaviour. Thus by organization. Othman, R and Ismail Z (1996)
using the 5-P model we may gain greater undertook an empirical examination of the relationship
understanding of this complex interaction. Roy Massey between HRM practice and strategy in the service and
(1994) explored the reasons as to why strategic HRM manufacturing sectors in Malaysia. The study was
is a critical issue facing NHS trusts in U.K. He based on the assumption that given the certain
identified the risk associated for not taking a strategic characteristics of the service firms, they should
approach. According to Roy organizations that do not develop a more strategic HRM practice than
adopt a strategic approach are easily recognized by a manufacturing firms. In the above study 545 firms
fragmented and ad-hoc approach to the development from the four industries representing the
and implementation of human resources activities [3]. manufacturing sector (electronics / electrical, textile,
food and plastic) were selected [8].

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A total of 367 firms from the two industries (Banking manipulation (Gerhardi and Nicolini, 2000; Ahl, 2006)
and Financial Services) representing the service sector [9]. This form of learning is sometimes discussed as
were selected, thus the total number of firms involved socialization, as a part of the process of becoming a
in the study were 912. The findings of the study did full member of an organization (Wenger, 1998) or a
not show much support that the HRM practices of sub-group. People learn very quickly what counts in
organizations are distinctly related to their strategy. the organization and adapt accordingly. Members of an
The difference between the manufacturing and service organization create, consciously or not, ideas,
firms perusing these strategies did not indicate that opinions, attitudes and actions together – for good and
service firms exhibited stronger fit between HRM for bad. Sometimes this can mean reproducing the
practice and strategy [5]. Denise S, and Christopher M status quo (Abrahamsson, 2006) and be in direct
(1997)7 , investigated how human resource strategies conflict with intentional and planned learning at the
are conceived, designed and implemented in workplace. Examples of negative aspects that are
organizations as perceived by the managers involved. learned are subordination, passivity and helplessness
The data for the study was collected through a or accepting a worse work environment than what is
questionnaire from 723 managers studying the Open appropriate or needed [6].
University MBA programme, Northampton. The study
conducted showed that most HR changes are 3. RESEARCH METHODOLOGY:
organization wide and are intended to enhance A pilot study was collected from among the 100
organizational performance and support the Banking employees working in Hyderabad using
achievement of primary business objective. There was charts, graphs and percentage analysis.
a clear board level involvement at initiation and
planning stages, the responsibility for implementations a) SCOPE OF THE STUDY:
was unclear. The study focuses on Compensation management of
the employees working in public and private banks in
It appears that organizations were not effective in Hyderabad. It gives the detail information on
managing strategic HR change and continued to make employee Compensation based on their performance
the same mistake, despite the availability of theories in and employee levels in Banks. The study focuses on
the literature. Although such a “glorifying” and the Compensation management strategies & to
sometimes simplistic approach to learning is probably evaluate the behavior & performance of employee on
necessary for implementing a learning organization, their work [7].
there are of course a number of criticisms (Fenwick,
2006). We group these critiques into the fourth b) OBJECTIVES OF THE STUDY:
approach, the “critical” approach. This approach often 1. To Study the impact of Compensation
highlights the other side of the coin by discussing, for management on performance level of banking
example, discourses, power aspects, unplanned and employees in Hyderabad.
unintentional learning at workplaces or even learning 2. To know the various types of Compensations
gaps. The hidden curriculum of workplace learning provided by the company.
includes the ongoing process of qualifying, selecting, 3. To identify the satisfaction level of employees of
adapting and shaping the attitudes of employees with their Compensation.
regard to organizational culture, workplace tasks and 4. To Study the problems related to Compensation
occupational health conditions: this is sometimes a faced by Banking employees and bring out
process that is on the verge of indoctrination and suitable measures to solve them

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 Data was collected from the employees working 4. The level of satisfaction with the Compensation
in any of the five banks such as SBI, ICICI, received
HDFC,AXIS and Karur Vyasa Bank form part of
100 Sample units randomly using well-structured
questionnaire and the results were analyzed using
charts and graphs.

4. DATA FINDINGS:
1. Compensation available in the organization
Figure 4

5. The level of satisfaction with the Compensation

policy in your organization.

Figure 1

2. Basis of providing Compensation to the

employees Figure 5

6. The Compensation package provided to the

employees working in Banks

Figure 2
Figure 6
3. Kind of Compensation do employees prefer
7. Compensation fit with the value of your position

Figure 3

Figure 7

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8. The wage policy able to retain employees respondents feel that cash is king in terms of
employee Compensation to a little extent.
6. 88% of the respondents agree that the salary
package fit with the value of position in the
organization.
7. 76% of the organizations conduct salary survey
and are conducted annually.
8. Above half of the respondents are unaware of the
market value of salaries compared with the present
Figure 8 salaries in the organization.
9. Only 18% of the organizations are unable to retain
9. The dependency of the employee productivity on the employees with the wage policy in the
the employee salary organization.
10. Almost all the employees feel that their
productivity depends upon the Compensation.

SUGGESTIONS:
1. Nearly half of the employees are not satisfied with
their Compensation which calls for an immediate
redesigning of the salary structure or hikes. The
salary administration policy should also be taken
Figure 9 proper care.
2. The management should not consider the salary as
DATA FINDINGS: the sole factor for getting the maximum output
1. 46% of the respondents are compensated with from the employees. Apart from Compensation,
direct Compensation and 26% of the respondents importance should also be given to the other issues
are compensated with indirect Compensation and like autonomy, authority, work environment,
the remaining are compensated with both. motivation etc.
2. The majority of the organizations are providing 3. The organization should also conduct salary
Compensation on the base pay, commissions, surveys regularly in order to have up to date
overtime pay, merit pay, profit sharing, stock information of the salaries in the market and
options, allowances and other benefits. should in par with the market so that the
3. Most of the respondents prefer financial employees do not get disappointed or intend to
Compensation followed by other types of switch to other companies.
Compensations. 4. The employees should be clearly communicated
4. Half of the respondents are satisfied with the and encouraged to participate in the Compensation
salary administration policy, salary and management programs.
Compensation which they receive from the 5. The Compensation policy and the salary
organization. administration should be revised regularly in order
5. 46 respondents feel that the cash is king in terms to keep the Compensation system effective.
of employee Compensation to a certain extent, 18
respondents feel to a great extent and 36

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