A comparison of intrinsic and extrinsic compensation instruments: the case of National Bank Of Pakistan (NBP)

Abstract

The paper aims to compare the compensation instruments which are used as the factors of motivation in the banking sector of Pakistan. With a case study research design, structured interviews were conducted from the fifty ( 5 0 ) employees of NBP branches in district Attock. The responses of interview were scaled and scored according to standardized Likert technique, in such a way that scores for each response were added and then multiplied with total responses. After obtaining scores of the nine compensation factors, Pearson Product correlation was calculated to check the relationship between the compensation factors. The results show that the employees of National Bank of Pakistan were motivated both by the intrinsic as well extrinsic factors of compensation, in such way that extrinsic factors were more causing motivation. The paper has concluded that Compensation Management has a profound direct positive relationship with employee motivation level and intrinsic factors played important role in the motivation process. The paper recommends that public sector banks shall apply progressive human resource strategy and provide healthy compensation plans regarding benefits and intrinsic factors.