The Impact of Compensation System on Pay Satisfaction in the Banking Industry in Malaysia: A Proposed Framework

By Lok, Stanley Yap Peng; Ng, Lai Chuen et al. | Global Business and Management Research: An International Journal, April 2019 | Go to article overview

The Impact of Compensation System on Pay Satisfaction in the Banking Industry in Malaysia: A Proposed Framework


Lok, Stanley Yap Peng, Ng, Lai Chuen, Kumari, Perema, Hwa, Eng Poh, Global Business and Management Research: An International Journal


Introduction

There is much academic support for the view of employees as the most important asset for an organization in delivering good performance and high productivity. Sustainability and availability of the right employee at the right time and right place is essential to an organization's success. Employers in well maintained employees' relationship not only sustain competitive advantage but promote a positive organization culture through the retention of good employee at the workplace. Retention of good employees in an organization, is dependent on the role of compensation & benefits systems, as having a very strong significant effect on their work as well as pay satisfaction (Ghazanfar et al., 2011).

If employee are not satisfied or unhappy on their benefit and pay, they will not stay long in their workplace there is no incentive to do more or perform better to service the customer. Neither can he nor she provide the best service to the customers. Employees will feel motivated and stay longer with their employers who provide good compensations such like pay, wages, incentive, profit sharing, bonuses and also intrinsic rewards to their employee. Happy employee will always perform the best in an organization and stay longer in an organization.

In general, a satisfied employee will always provide the best services in an organization and always smile and happy when on the way going to work. Employees who working in banking industry especially customer service and tellers are the ambassadors of the bank. Their jobs are not only perform front line transactions with the customer but at the same time, they need to create a rewarding experience for their customers to capture their customer loyal with their service provided. This in turn can generate more profit to the bank from its various product offerings like deposit, loans, wealth products, credit card, personal loan and so on. Therefore, the compensation benefit is very important to the employee in banking industry, and the aim of this study is to investigate the impact of compensation system on pay satisfaction in the banking industry in Malaysia.

This research study is guided by four research objectives which are namely: to consider the impact of pay determinant on pay satisfaction in Banking Industry in Malaysia; to consider the impact of pay equity on pay satisfaction in Banking Industry in Malaysia; to consider the impact of pay structure on pay satisfaction in Banking Industry in Malaysia and to consider the impact of pay mix on pay satisfaction in Banking Industry in Malaysia.

Literature review

Overview of Banking Industry in Malaysia

In Malaysia, banking industry is one of the fast-growing industries among others. In banking industry includes financial institutions, non-banking financial intermediaries and also financial market. The banking industry can be clarified into commercial bank, retail banks, investment bank, finance companies, foreign bank representative office, discount house and offshore bank.

However, commercial bank is the largest group and also the main player in Malaysia banking industry. They are engaging the full range of services such like provider of liquidity, insurance, monitoring of services and also producer of information (Santos, 2000). A total 27 commercial banks are operating in Malaysia which included local and foreign banks. Besides commercial local banks, total 19 banks are providing the same level of services in Malaysia. In October 1998, the Banking and Financial Institution Act (BAFIA) has served a framework in order to supervision of the banking system in Malaysia.

Overview of an Organization's Compensation System

Nowadays, all the organizations are facing a lot of competitive pressures; they are looking to do more with less manpower but with better quality. Compensation is one of the human resource management function that dealing with all types of reward individuals in exchange for performing organizational tasks, with all the outcome of the employees who are attracted to work, satisfied and motivated to do a good job for employer (Armstrong, 2008). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Impact of Compensation System on Pay Satisfaction in the Banking Industry in Malaysia: A Proposed Framework
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.