compensation management and employee retention of

ArchivesofBusinessResearch–Vol.5,No.3

PublicationDate:March.25,2017DOI:10.14738/abr.53.2758

Chiekezie,O.M.,Emejulu,G.,&Nwanneka,A.(2017).CompensationManagementAndEmployeeRetentionOfSelectedCommercialBanksInAnambraState,Nigeria.ArchivesofBusinessResearch,5(3),115-127

115Copyright©SocietyforScienceandEducation,UnitedKingdom

CompensationManagementAndEmployeeRetentionOfSelectedCommercialBanksInAnambraState,Nigeria.

ObianujuMaryChiekezie

FacultyofManagementSciences,NnamdiAzikiweUniversity,Awka,Nigeria.

GeraldEmejulu


AniekweNwanneka


Abstract

This studywasnecessitateddue to rateof employee turnover,which is increasing in

Nigeria banking system; a situation whereby employee continuouslymove from one

banktoanotherinashortperiodoftime.Thispaperseekstoexaminetheinfluenceof

compensationmanagement on employee retention. It specifically set out to examine

the relationship between Salary and Employee satisfaction in selected Commercial

banks in Awka. The study employed descriptive research design. Primary source of

datawas themajor instrument used for this study. 60 copies of questionnairewere

administered to employees of selected commercial banks (First bank, Fidelity and

Sterlingbank);56wereretrievedandtheywerealluseful.Pearson’sProductMoment

Correlationwasused for the analyses. The findings revealed that there is a positive

weak relationship between salary and employee satisfaction. This shows that

employeeswerenotsatisfieddespitetheirseeminglyattractivesalary. Inviewofthe

finding, the study concluded that if management fail to formulate, administer and

implementagoodcompensationpolicies thatwouldallow themretain their talented

employee; theseemployeemight leave their job if they findabetteroffer elsewhere.

The researcher recommended among others that compensation structure should

include new and enticing ways tomotivate and retain employee with wide range of

benefitsotherthansalary.

Keywords: Compensation, Employee Retention, Salary, Employee Satisfaction, CommercialBanks,Nigeria

INTRODUCTION

Employees are the organisations key resource and the success or failure of organisationscentreontheabilityoftheemployerstoattract,retainandrewardappropriatelytalentedandcompetent employee. Employee’s willingness to stay on the job largely depends oncompensationpackagesoftheorganisation(Armstrong,2003).Inattempttoensureemployeeoptimal satisfaction and retention, organisations need to consider a variety of appropriatewaystorewardtheemployeetogetthedesiredresult(Falola,2014).Ithasbeenarguedthatthedegreetowhichemployeearesatisfiedwiththeirjobandtheirreadinesstoremaininanorganisationisafunctionofcompensationpackages(Osibanjo,2012).Organisations that have goals to achieve would require satisfied and happy staff in herworkforce.Importantlyisthefactthatforanybanktotakeoffandachieveitsstrategicgoalswouldstronglydependonhercapacitytoattract,retainandmaintaincompetentandsatisfiedstaffintoitsemployment(Oshagbemi,2000).


URL:http://dx.doi.org/10.14738/abr.53.2758. 116

OneofthefundamentaltasksinHumanResourcesManagementisCompensationManagement.It is a complex task that occurs periodically, demand accuracy and must not be delayed.CompensationManagement requires integrating employees’ processes and informationwithbusiness process and strategies to achieve optimal organisational goals and objectives. ThiscanbeattributedtothefactthatCompensationManagementisanessentialtoolto"integrateindividualeffortswithstrategicbusinessobjectivesbyencouragingemployeestodotherightthings with ever improving efficiency" (Horwitz, 2010). In other words, compensationmanagementisapowerfulmeansoffocusingattentionwithinanorganisation.Theysendclearmessages toall employeesof the,organisation informing themaboutexpectedattitudesandbehaviours(Smith,1992).Fortheworkers,wageprovidesthemeansofsatisfyingtheirwantsandneeds. Compensationpackagesentailssomebasicfeaturesthattendtomakeemployeesatisfy on their job amongst which include salaries, bonuses, incentives etc and these havesignificant impact on employee satisfaction (Idemobi, Onyeizugbe, and Akpunonu, 2011).Compensation Management and Employee Retention as Independent variable can beinfluencedbythesevariables.This study focus on the influence of Compensation Management on Employee Retention inBanking Industry. The study is deemed necessary because of the disturbing high rate ofemployee turnover in banking industries in Nigeria. Nigeria banks could be categorisedaccording to their assets value; the Large,Medium and Small size banks (Financial Results,2013).Firstbank,FidelitybankandSterlingbankrespectivelywereselectedtorepresenteachcategoryforthisstudy.FirstBankofNigeriaPLC(FirstBank)isNigeria’slargestfinancialservicesinstitutionbytotalassetsandgrossearnings.Withmorethan10millioncustomeraccounts,FirstBankhasover750branchesprovidingacomprehensiverangeofretailandcorporatefinancialservices.TheBank has been named “The Best Bank Brand in Nigeria” four times in a row – 2011, 2012,2013,2014–bythegloballyrenowned“TheBankerMagazine”oftheFinancialTimesGroup;and “Most Innovative Bank in Africa” in the EMEA Finance African Banking Awards 2014(www.firstbankinigeria.com/about-us)FidelityBankPlcbeganoperationsin1988asFidelityUnionMerchantBankLimited.By1990,ithaddistinguisheditselfasthefastestgrowingmerchantbankinthecountry.Itconvertedtoa commercial bank in 1999, following the issuance of a commercial banking license bythe Central Bank of Nigeria,thenationalbankingregulator.Thatsameyearthebankrebrandedto FidelityBankPlc.FidelityBankistodayrankedamongstthetop10intheNigerianbankingindustry,withpresenceinall the36StatesaswellasmajorcitiesandcommercialcentersofNigeria.(www.fidelitybankinigeriaplc.com/about-us)Sterling Bank Plc originally incorporated in 1960 as Nigeria Acceptances Limited (NAL).Consequent to the indigenizationdecreeof1972, theBankbecame fully governmentownedandwasmanagedinpartnershipwithGrindlaysBankLimited.InJanuary2006,aspartoftheconsolidationoftheNigerianbankingindustry,NALBankcompletedamergerwithfourotherNigerianBanksnamelyMagnumTrustBank,NBMBank,TrustBankofAfricaandIndo-NigeriaMerchant Bank (INMB) and adopted the Sterling Bank name. The merged entities weresuccessfully integrated and have operated as a consolidated group ever since.(www.sterlingbankinigeria.com)There had been a constantmobility of skilled andunskilled staff fromone bank to another.Theskilledpersonscriticallyhardlystayforlonginonebankbeforemovingtoanotherbank

ArchivesofBusinessResearch(ABR) Vol.5,Issue3,March-2017

Copyright©SocietyforScienceandEducation,UnitedKingdom 117

and this mobility has been tagged as “Brain Drain”. This will amount to high cost ofRecruitmentandTraining to thebankswhich in short runwill affect theproductivityof thebanks.Thisstudythereforeattempts toexaminethe influenceofcompensationmanagementonemployeeretention.

StatementoftheProblem

The rate atwhich employee turnover is increasing in banking sector in Anambra State andNigeriaGenerallyhasbecomea thingofconcernand it isobvious that thestep takenby themanagementshavenotsolvedthisproblem.TheevolvingtargetinbankingindustryinNigeriaevident from Merger and acquisition has called for good formulation, administration andimplementation of good compensation policies thatwould allow these banks to retain theirbesthands.Therehadbeenconstantmobilityofthesehighlyskilledemployeesfromonebanktoanotherandtheyhardlystayforlonginonebankbeforemovingtoanotherbank.In viewof theabove, oneof the reasons that informed this studyhas todowith theuniqueimportance of salary in relation to employee satisfaction amongbankers in bank industries.Thisaffectstheretentionofemployeeyetitisnotbeingaddressed.Thereisneedtherefore,tofind out and examine the relationship between salary and employee satisfaction amongbanker. This isnecessary to identifyhowbest to retain thesebankers (at least for a longerperiodoftime)topreventconstantmobility.

ObjectivesoftheStudy

Thebroadobjective is to examine the influenceofCompensationManagementonEmployeeRetention.Thespecificobjectiveis:i. To examine the significant relationship that exists between salary and employee

satisfaction.ii. TheCompensationManagementwasdecomposedasSalarywhileEmployeeSatisfaction

wasusedtodecomposeEmployeeRetentionResearchQuestions

Thefollowingresearchquestionwasformulatedtoaddresstheresearchobjective;i. Towhatextentdoessalaryinfluenceemployeesatisfaction?

ResearchHypothesis

H1:Thereisasignificantrelationshipbetweensalaryandemployeesatisfaction.

REVIEWOFRELATEDLITERATURE

ConceptualReview

EmployeeRetentionEmployee retention refers to policies and practices companies use to prevent valuableemployees from leaving their job. It involves taking measures to encourage employees toremainintheorganisationforthemaximumperiodoftime.Hiringknowledgeablepeopleforthejobisessentialforanemployer;butretentionisevenmoreimportantthanhiring.Previousresearch has identified several factors that have an influence on employee retention. A firstimportant indicator of employee retention is their organisational commitment (Curtis &Wright2001).Employeeswithahighorganisationalcommitmentarethosewhohaveastrongidentificationwiththeorganisation,valuethesenseofmembershipwithinit.Thiscommitmentisinfluencedby the organisation’s norms and practices, especially the organisational climate (Kaliprasad2006),andisnotjobspecific(Bashaw&Grant1994).JyothiandVenkatesh(2006)suggestthe



following aspects while attempting to retain employees: planning ahead, clarity in jobrequirements, identify a good source of recruitment, screening and interview, providechallengingwork,andfocusoncompensationandworkingconditions.Walker(2001)identifiedsevenfactorsthatcanenhanceemployeeretention:(i)compensationandappreciationoftheperformedwork,(ii)provisionofchallengingwork,(iii)chancestobepromoted and to learn, (iv) invitational atmosphere within the organisation, (v) positiverelationswith colleagues, (vi) a healthy balance between the professional and personal life,and (viii) good communications. Together, these suggest a set of workplace norms andpracticesthatmightbetakenasinvitingemployeeengagement.Hytter(2007)foundthatthepersonal premises of loyalty, trust, commitment, and identification and attachmentwith theorganisation have a direct influence on employee retention. She also demonstrated thatworkplace factors such as rewards, leadership style, career opportunities, the training anddevelopmentofskills,physicalworkingconditions,andthebalancebetweenprofessionalandpersonal life have an indirect influence (Hytter 2007). Newstrom (2009) states excessiveemployeeturnovercanhaveseveralnegativeeffectsonanorganisation.Theyinclude:

• Separationcosts(exitinterviewtime,separationpay,unemploymentandtaxincrease)• Training costs for few new employees (both orientation and skill development

instruction;bothformalandinformallearningexperiences)• Vacancy costs (temporary help or overtime pay; productivity loss and service

disruption)• Placementcosts(attracting,screening,andrelocatingnewhires)• Moraleeffects(lossoffriendship,concernsaboutpersonaljoblossduringdownsizing)

CompensationManagement

Compensation is a crucial instrument for the attraction and retentionof talented employeesthatarededicatedtotheirresponsibilitieswithinthefirm.Compensationmanagementaimstopromotetheachievementofbusinessgoalsthroughattracting,motivatingandretaininghardworking employees (Shieh 2008; Petera 2011). Compensation management is a crucialcomponent of the overallmanagement of an organisation. It refers to the process bywhichemployeesareremuneratedfortheirinputattheworkplace(Khan2011).Employeecompensationrefers toall thereturns thataccrue toemployeesarising fromtheiremployment (Dessler 2008; Van Der Merwe 2009; Nazim-ud-Din 2013). Compensationmanagementrequiresaccuracyandprecisionas,ifnotadequatelyandobjectivelydealtwith,itmayhamperorganisation’soperations. Compensation isnotonly in the formofmoney,butalso in non-cash form. Benefits, such as pension, life and health insurance, and retirementplans, and allowances that include company cars or subsidized transportation, represent asignificantpayelementinmanylargefirms.Inaddition,fortaxadvantagesandeconomiesofscale of purchasing that make it economically advantageous for the firm to provide thoseelement, thecompensationarealwaysviewedbenefitsasa tools forattractingandretainingdesiredemployees.Maslowbroughtintheneedhierarchyfortherightsoftheemployees.Hestatedthatemployeesdonotworkonlyformoneybutthereareotherneedstoowhichtheywant to satisfy from their job, i.e. social needs, psychological needs, safety needs, self-actualization,etc.(Octavious,2015)Researchers are of the view that firms that seek to improve employees’ productivity shouldlink remuneration and personal effort (Encinosa III, Gaynor, Rebitzer. 2007; Kaplan andNorton2007;BartlettandGhosal2013).Heneman(1992)arguesthatrewardsandbonusesfor



personal effort are themost visibleways of acknowledging an employee’s efforts.However,programsthatrewardeffortcannotbecomparedwithnewadministrativeproceduresbasedon uninterrupted progress, joint effort and support (Demming 1986; Snell and Dean 1994;LepakandSnell2002).Firmsarebeginningtogivegreaterrecognitionto individualpayandperformance not only to encourage increased productivity and efficiency, but also to retainhighlyvaluedtoachievethefirm’sobjectives(Kuvaas2006).LeeandBruvold(2003)note,thatthemoreencouragementemployeesreceive,thehighertheirlevelofcommitmenttothefirm.Gardner (2004) concurswith this point of view. Similarly, Lawler (2003) argues thatwhenremunerationislinkedtoeffort,bothindividualandorganisationalperformanceisenhanced.Lawler(2003)addedthattyingremunerationtoperformanceimprovesemployeemotivation,asworkersbecomemoreresults-oriented.Employeeswillmakemoreefforttoachieveresultswhentheyareawarethattheirremunerationpackageisdeterminedbytheircontributiontothefirm’sperformance(Lawler2003). TypesofCompensation

Therearevarious formsofcompensationandnearlyall these formsofcompensationcanbecategorisedintofourbroadtypes(Alsabri&Ramesh,2012).Thefourbroadtypesare:

(a) Wages and Salary: Wages are what is paid to employees who are not permanentlyemployedandtypicallypertainstohourlyratesofpay(themorehoursworked,thegreaterthepay),whilesalaryiswhatispaidtopeoplethatarepermanentlyemployedandthisisatafixedweekly,monthly,orannualrateofpay.

(b) Incentive Plans: This is an additional compensation which is above and beyond theemployeeswageorsalaryprovided.Itmaybelongtermorshortterminnature.

(c) Employee Benefit Programmes: Time off with pay, pension scheme, tuitionreimbursement, recreation activities, cafeteria services are all examples of employee benefitprogrammes.

(d)AdditionalPrivileges:Employeesinorganisationsmayhaveotherprivilegessuchastheusage of company vehicles/cars, clubmembership or travelling allowance. These privilegesmaybeasubstantialpartofcompensation,especiallyfortheexecutives.DeCenzoandRobbins(2007)andKhan(2011)exploredcompensation/rewardmanagementandtheysubmittedthatrewardsareofthreemajortypeswhichareasfollows:

• IntrinsicandExtrinsicRewards:Intrinsicrewardsareself-generatedrewardswhishareanchoredon self-contentment arising from the job itself and this often referred to asintangiblerewardssuchasbeingpartofateam,egoasaresultofachievingagoalandself-importance and satisfaction arising from one’s own work/effort. While extrinsicrewards are emoluments provided by the superiors such as salary increment, bonus,salescommissionetc.andthisisalsoreferredtoasthetangiblerewards.

• Financial and Non-financial Rewards: Financial rewards are the rewards received byemployeesinmonetaryformsandthisassiststheemployeestoboostthefinancialandsocialstatus.Butnon-financialrewardsismadeupofinexpensiverewardstoheightentheemployeesmoralelikelongserviceaward,bestemployeeoftheyearetc.

• Performance-basedandmembership-basedRewards:Firmsequallyofferrewardstoitsemployees based on their membership in that organisation or on the basis ofaccomplishinghighperformance.

Salary

Salary is ahugemotivator formanyemployees.Making the connectionbetweenmoneyandperformancemotivatesemployeestobemoreproductiveandtogotheextramile(Zingheim



andSchuster,2007).Salaryiswhatispaidtopeoplethatarepermanentlyemployedandthisisat a fixed weekly, monthly, or annual rate of pay.It is an agreed payment given at regularintervalsinexchangeforworkdone.Caringaboutemployeesonapersonallevelisimportantaswell. Those employeeswhodoworkwell to support the companymaynot receivemuchsalaryfortheireffortssoemployersthatchoosetounder-paytheiremployeeknowthattheseemployeeswillwork hard forminimal pay, and these employerswill pay them accordingly(ZingheimandSchuster,2007).Atthesametime,thesameemployerswillpaymoretootheremployeeswhoarenotwillingtoworkforminimalcompensation.Thissalarydisparityleadstodissatisfactionbecause eventually thehardworkerwill notice thatheor she is notbeingpaid fairly for the amount of work they are doing, and will begin searching for anothercompanythatwillappreciatehisorherlabour. EmployeeSatisfaction

Employee satisfaction is defined as the result of a psychological comparison process of theextenttowhichvariousaspectsoftheirpay(e.g.salaries,benefitsandincentives)measureuptowhattheydesire(Batol,1992).Thus,thelargerthegapbetweenwhatemployeeshaveandwhattheywantfromtheirjobs,thelesssatisfiedtheyare;(employeestendtobemostsatisfiedwith their jobs whenwhat they are expectingmatches withwhat they actually collect. Anemployee’overallsatisfactionisthecumulativeresultofcomparisonsthatshemakesbetweenwhat her job provides and what she desires in various areas. The fact that perceivedimportance makes such a big difference in how employees feel also has implications formanagement.Obisi,(2003),listedfactorsthatcontributetoemployeesatisfactionas;adequatesalary,good working conditions, job security, regular promotion, recognition, etc. TheoreticalFramework

ThisstudyisanchoredonEquitytheorypropoundedbyStaceyJ.Adams.Thetheorysuggeststhatemployeeperceptionsofwhattheycontributetotheorganisation,whattheygetinreturn,and how their return-contribution ratio compares to others inside and outside theorganisation,'determinehowfairtheyperceivetheiremploymentrelationshiptobe(Adams,1963). Perceptions of inequity are expected to cause employees to take actions to restoreequity.Accordingtothistheory,employeeswhoseethemselvesasbeingunder-rewardedwillexperience distress. The theory, primarily, focuses on ensuring that the distribution ofcompensationandbenefitsisfairtoallmembers.ThetheoryisdisposedtothepresentstudyinthesensethatPayinequalityaffectsemployeesatisfaction because pay is positively associated with the job satisfaction of the employees.Employees feel satisfied or dissatisfied with their pay – not so much by the total amountreceived,butbycomparingtheirbenefitswiththoseenjoyedbyothersinthesamefield.EmpiricalReview

Terera (2014), carried out research on impact of reward on job satisfaction and employeeretention among nurses in Easter Cape Province of South Africa. His study utilised aquantitative research design and 180 nurses were randomly selected; he observed thatemployee rewards lead to employee retention but however, they do not result in jobsatisfaction.Lauri, Morgan, Dave, and Michael (2014) conducted a study on the tenuous relationshipbetweensalaryandsatisfactioninUniversityofMichigan,UnitedStateofAmerica(USA).Thestudyrevisitedtheclassicnotionsofsatisfactionofemployeewithinorganisationusingonlinesurveytargetedtoasampleofworkingadultswhichconsistedof79participants,consistingof



60%male and 40% femalewith individual annual gross salary and household gross salary.Usinghierarchicalmultipleregressionanalysistotesttheirhypotheses,theirfindingpitsalaryinanegativerelationshiptobothjobandlifesatisfaction.Okpara (2004) carried out study on the impact of salary differential on managerial jobsatisfaction.ThestudywasonGendergapanditsimplicationformanagementeducationandpractice in Nigeria banking sector. A number of 340 bankmanagerswhoweremember ofCharteredInstituteofBankersofNigeria(CIBN)werechosenfortheinvestigation.Theresultshowthat therewasa significantgap insalarybetweenMaleand femalebankmanagerandthatfemalebankmanagerswerelesssatisfiedwiththeirsalarythantheirmalecounterparts.The study suggests that management break “the glass ceiling” by paying both sexescomparablesalariesforcomparableworkresponsibilities;thiswouldincreasesatisfactionandperformanceandalsohelptoretainthebestqualifiedemployee.MwakidimandObwogi(2015)examinedtheeffectofpayandworkenvironmentonemployeeretentioninHotelindustryinMombasa.Theirfindingsrevealedthatpayhadaweakinfluenceonemployeeretentionwhileworkenvironmenthasastrongestinfluence.Theyrecommendedthat employers in the industry need to re-evaluate the current weaknesses associatedwithpay.Adeoye andZiska (2014) carried out research on compensationmanagement and employeejobsatisfaction inNigeria’s InsuranceSector. 212respondentswereusedand thestatisticalanalysis revealed that compensation management and employee job satisfaction aresignificantlycorrelatedthoughweak.Mensah Ruby (2012) employed a survey method in finding out the impact of indirectcompensationonemployeeproductivityinCentralUniversityCollege(CUC)ofGhana. Therewere 280 responses for the survey. Questionnaire administration and condition of servicemanualofCUCwereusedtomeasuretherelationshipbetweenvariables.Thestudyuncoveredthat thoughmanagement implementssomeof the indirectcompensationavailable, thereareotherbenefitswhicharenotsatisfactorilyadministerandthishascontributedtoalackofzealtowardswork, which has affected the productivity negatively. The study recommends thatmanagement of CUC should provide the necessary attention that indirect compensationdeserves,asthiswillhelpboastthemoralofemployeewhichwillresultinhigherproductivity.Benita and Anghelache’s (2012) study on teachers’motivation and pay found no differencebetween male and female teachers in terms of overall payment. They posited that jobsatisfactionderivesfromadequateandcontinuouspaymentbyastrongdesireforachievementandaffiliation. Likewise,Azash(2012)studyon jobcharacteristicsasdeterminantsofworkmotivationandjobsatisfactionrevealedthatskills,taskidentity,tasksignificanceandfeedbackserveaseitherpositiveornegativepredictorsofemployeejobsatisfaction.Latif(2011)examinedjobsatisfactionamongpublicandprivatecollegeteachers,focusingonthe factors that contribute to job satisfactionanddissatisfaction. Findingsof the stugy showthatcollege teachers in thepublic sector reportedhigher levelsof jobsatisfaction than theirprivatesectorcounterparts.

SUMMARYOFLITERATURESREVIEWED

Many of the relevant Literature reviewed on Compensation Management and Employeeretention were carried out outside Nigeria like (Sharon, 2014 in Eastern Cape Province ofSouth Africa, Lauri et al, 2014 in USA,Mwakidim et al, 2015 inMombasa,Mensah, 2012 inGhana).ThoughAdeoyeetal,2014carriedouttheirstudyinNigeriabutinInsurancesector;Okpara,2004attemptedcarryingouthisstudyinbankingindustrybutnarrowedittogender



gap.Greatresultswereachievedinthosestudies,however,thisstudyintendstoascertaintheinfluence of salary on employee satisfaction in Nigeria banking industry with particularreferencetoselectedCommercialbanksinAwkametropolis.

METHODOLOGY

ResearchDesign

Thisstudyadoptedadescriptivesurveydesign.Thepurposeofthisdesignistocollect

detailedandfactualinformationthatdescribesanexistingphenomenon(Ezeani1998).

PopulationoftheStudyThepopulationofthisstudyismadeofemployeesofthethreeselectedcommercialbanksthatoperate in Awka -Anambra State (First Bank,Fidelity Bank and Sterling Bank). The totalpopulationwhowereeligibletoassistinfilling–outthequestionnaireisasfollows:

Source:Fieldsurvey,2015

SampleSize

Becauseofthesmallnessofthepopulation,theresearcheradoptedcomplete

enumeration.

SourcesofDataCollectionThe source of data for this study was primary source. The Primary data used wasquestionnaire. Thequestionnairewasstructuredandtherespondentswereplacedona fivepointlikertscale.Thescalerangesfrom(5)stronglyAgree(SA),Agree(A)(4)undecided(U)(3)Disagree(D)(2)StronglyDisagree(SD)(1).ValidityofInstrumentThequestionnairewasdesignedinsimple languagetoavoidambiguityofquestionsandwasstructured in line with the objectives of the study. The study adopted Content Validity tovalidatetheresearchinstrument.ReliabilityofInstrumentThiswasdoneusingTestRe-Testwith15copiesofquestionnaire.

S/N Pre-testresponses(x)Post-test

responses(y)

di

(x-y)di2

1 10 9 1 12 12 13 -1 13 15 12 3 94 13 13 0 05 14 15 -1 16 15 13 2 47 12 9 3 98 10 10 0 09 12 14 12 410 15 13 2 4 33

Source:FieldSurvey,2015

SN Banks TotalPopulation

1 FirstBank,AromaBranch,Awka 252 FidelityBankPLC,Expressway,Awka 153 SterlingBankPlc,ZiksAvenue,Awka 20 Total 60



Formula for the test re-test is 1 - 6∑di2.

n(n2 – 1)

1 - 6(33). 10(102 – 1)

1 - 198. 10(99)

1 - 198. 990 1 – 0.2

= 0.8 From the reliability test, a figure of 0.8 was obtained which show the instrument is highlyreliable. MethodofDataAnalysis

The data was analysed in line with the research question and hypothesis. The Pearson’sProductMomentCorrelationCoefficientwasusedtotestthehypothesisusingSPSSVersion20.

DATAANALYSIS

Outofthe56respondents,22employeeshadworkedwithinthebankingsectorforaperiodof1to3yearsrepresenting39.3%.36%foraperiodofbetween4and6years;while25%hadbeeninserviceforover6years.Itshowsthat52%oftherespondentshadworkedindifferentbanksbeforejoiningoneofthesebankswhile48%ofemployeesisworkingatthesamebankbutarewillingtoleaveiftheyfindabetterofferfromanotherbank.

HYPOTHESISTESTING

Ho:Thereisnosignificantrelationshipbetweenemployeessalaryandemployeesatisfaction.H1:Thereisasignificantrelationshipbetweenemployeessalaryandemployeesatisfaction.

Table1:DescriptiveStatistics

Mean Std.Deviation NSalary

Employeesatisfaction

4.1857

3.6429

0.88944

0.99325

56

56

Source:FieldsurveyandanalysisSPSS,2015

Where1 = nooftestdone6 = constant∑di2 = totalnoofdi2n = total no of questionnaire



Table2:Correlations

Salary employeesatisfaction

SalaryPearsonCorrelationSig.(2-tailed)N

156

0.3390.00456

Employee satisfaction PearsonCorrelationSig.(2-tailed)N

0.3390.00456

156

CorrelationisSignificantat0.01level(2-tail)Source:FieldsurveyandanalysisSPSSver.20,2015

The r value indicates that there exists a relationshipbetween the twovariables, but aweakrelationship. The calculated r value is 0.339with a significance of 0.004. This indicates thatthereissignificantcorrelationbetweenthevariables.Therefore,rejectwethenullhypothesisand state that there is aweakpositive relationship between employee salary and employeesatisfaction(ifthereisanincreaseinsalary,thensatisfactionwillalsoincreasebuttheincreasewillbeminor).

SUMMARYOFFINDING,CONCLUSIONANDRECOMMENDATIONS

SummaryofFinding

Aftertheanalysisofcollecteddata,itwasfoundthatthevalueofthePearsonProductMomentCorrelationisat0.34.Thisindicatesthatthereisapositiveweakrelationshipbetweensalaryandemployeesatisfaction. It furtherrevealedthatsalaryalonewithoutotherincentives likebonuses, job security, regular promotion, etc cannot make employee satisfied; employeesatisfactionincreasesassalaryincreasebutsluggishly. DiscussionofFinding

The study discovered that there is a weak relationship between salary and employeesatisfactioninselectedbanksinAnambra;Awkametropolispreciselybutpositive.ThisagreedwithwhatMwakidimiandObwogi(2015)observedthatpayhasaweakinfluenceonemployeeretentionwhileworkenvironmenthadastrongest influence. AlsoAdeoyeandZiska (2014)found aweak significant correlation between compensationmanagement and employee jobsatisfaction.Mensah (2012) also support thesewhen he observed that thoughmanagementimplements some of the compensation available, there are other benefits which are notsatisfactorily administered and this has contributed to lack of zeal towards work(dissatisfaction).

CONCLUSION

Inviewoftheabovefindings,thestudyconcludesthat,topreventemployeemobility;bankingindustryshouldformulate,administerandimplementagoodcompensationpoliciesthatwouldallowthemretaintheirtalentedemployee.Whenemployeesaresatisfied,theystaylongwiththeorganisation.Theincrementalgrowthinbankingindustryisslowandnotmanypeoplearewilling to wait long when other banks are offering better initial as well as incrementalpackages.ItthereforeimpliesthatFirstbank,FidelityandSterlingbanksshouldreviewtheircompensationpackagetoattract,retainandmotivatethetalentpool.



RECOMMENDATIONS

Inlinewiththisstudy,thefollowingrecommendationsweremade:v Thebankswhileframingtheircompensationpoliciesshouldnotonlytargetsalarybut

otherthingslikeworkenvironments.v The compensation structure should include new and enticing ways to retain and

motivateemployeeswithawiderangeofbenefitdesignedtoenhanceindividualeffort.Forinstance,banksmayusevariousmethodstosupporteducationofitsemployees.

v Commercialbanksshouldalsointroducegenerousbenefitslikepost-retirementmedicaltreatment,regularpromotion,jobsecurityetcasatoolforretainingtalent.

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