PRACTICES AND CHALLENGES OF COMPENSATION SYSTEM AT BERHAN BANK S.C

Abstract

This study was undertaken to investigate the practices and challenges of compensation system in Berhan Bank s.c. The literature part of the study provides concepts of compensation and also determinants of compensation system. The researcher used descriptive research design which describes qualitatively the effect of compensation on employee’s job satisfaction. Information was gathered from a sample of 222 employees of Berhan Bank through Likert scale questioner method and unstructured interview. After the data was captured the analysis was done through descriptive statistics method which include frequency, mean and aggregate using table format .This study was done for some determinants and types of compensation, which is included in the questioner. Major findings of the study indicates that the bank pays less when compared to other similar banks , there is inequity between employee salary who have similar job positions, there is also inequity in adjustment and bonus allocation across branches ,the bank has no proper salary scale format and when compared to the labor market it pays less. According to the findings the study concluded that BrB employees are working in a state of dissatisfaction. Based on this, the study recommends that the organization should revise its compensation system to create satisfaction among its employees and hence value itself.