Assessment of Compensation Management Practice (in case of Commercial

Bank of Ethiopia Logia Branch)

Tinnssaaee

A senior Essay Submitted to the Department of Management in Partial

Fulfillment for the Requirement of Bachelor of Art (Degree in Management)

Prepared by: Senait Yasabu

Advisor name Misgana Abadi (MA- HRM)

Samara University

Collage of Business and Economics

Department of Management

May, 2016

Samara, Afar
 II

Table of Contents

Content Page
Acknowledgement.......................................................................................................................................4
Abstract.......................................................................................................................................................5
CHAPTER ONE..........................................................................................................................................6
INTRODUCTION.......................................................................................................................................6
1.1BACK GROUND OF THE STUYD......................................................................................................6
1.2 Statement of the problem.......................................................................................................................6
1.3 Research question..................................................................................................................................7
1.4 Objective of the study............................................................................................................................7
1.4.1 General objective............................................................................................................................7
1.4.2 Specific objective...........................................................................................................................7
1.5 Scope of the study.................................................................................................................................7
1.6 Significance of the study.......................................................................................................................7
1.7 Organization of the paper....................................................................................................................8
CHAPTER TWO.........................................................................................................................................9
2 Review of related literature......................................................................................................................9
2.1 Definition of compensation...................................................................................................................9
2.2 Objective of compensation....................................................................................................................9
2.3.1 Financial compensation..................................................................................................................9
2.3.2 Non- financial compensation........................................................................................................10
2.4 Who makes compensation decision.....................................................................................................10
2.5 Importance of compensation................................................................................................................10
2.5.1 Importance of employee compensation to an organization...........................................................11
2.5.2 Importance of compensation to employee.....................................................................................11
2.6 Compensation decision........................................................................................................................11
2.7 Pay determination procedures..............................................................................................................12
2.7 Incentive compensation.......................................................................................................................12
2.8 Equity consideration............................................................................................................................13
2.9 Factors affecting compensation...........................................................................................................13
2.10 performance appraisal........................................................................................................................14
CHAPETR THREE...................................................................................................................................15
3 Research Methodology...........................................................................................................................15
3.1The research design..............................................................................................................................15
3.2 data types and source........................................................................................................................15
3.3 population of the study........................................................................................................................15
3.5 Method of data collection....................................................................................................................15
3.6 Method of data analysis.......................................................................................................................16
CHAPTR FOUR........................................................................................................................................17
4 DATA ANAYSIS PRESNTITIO AND INTERPRETION.....................................................................17
4.1Repondents characteristics....................................................................................................................17
4.1.1Types of compensation practice in the bank..................................................................................19
4.1.2 Types of compensation.................................................................................................................19
4.1.3 Rate your organization of the equity.................................................................................................20
4.1.4 Financial benefits of bank.............................................................................................................20
4.1.5 Compensation practice of organization.........................................................................................21
4.1.6 The reward system of organization...............................................................................................21
4.1.7 Basis reward system.....................................................................................................................22
4.1.8 The reward system........................................................................................................................22
4.1.9 Problem of compensation.............................................................................................................23
4.1.10 Viability of salary to the benefits in the bank..............................................................................23
CHAPETR FIVE.......................................................................................................................................25
5. Conclusion and recommendations.........................................................................................................26
5.1 conclusions..........................................................................................................................................26
5.2 Recommendation.................................................................................................................................26
Bibliography..............................................................................................................................................27
APPENDIX I.............................................................................................................................................28
 List of Tables

4.1Repondents characteristics....................................................................................................................17
4.1.1Types of compensation practice in the bank......................................................................................19
4.1.2 Types of compensation.....................................................................................................................19
4.1.3 Rate your organization of the equity.................................................................................................20
4.1.4 Financial benefits of bank.................................................................................................................20
4.1.5 Compensation practice of organization.............................................................................................21
4.1.6 The reward system of organization...................................................................................................21
4.1.7 Basis reward system.........................................................................................................................22
4.1.8 The reward system............................................................................................................................22
4.1.9 Problem of compensation.................................................................................................................23
4.1.10 Viability of salary to the benefits in the bank.................................................................................23
 Acknowledgement
First of all I would like to thank my god and next I would like to thank my senior assay adviser
Misgana (MA-HRM) for her construction comments, suggestions and his guidance for the
success of this study. Secondly I would like to thank my family for their financial up to moral
support of accomplishment of my education .Finally I would like to thanks commercial bank in
logy branch employee and manager who assisted me by giving violable information and data
with devoting their time to help me for the success of this study.
Abstract
The research was assessing the compensation management practice in the case of commercial
bank of Ethiopia logy branch to identify the problem related to compensation management
practice more over to provide suggested solution for identified problems. The general objective
formulated assessing compensation management practice in the case of commercial bank of
Ethiopia logy branch. The research design that was used employee in this study was descriptive
research design. The study was used both primary and secondary data. Primary data was
collected through questionnaire to the employees and interview with in the manager .Secondary
data was collected from written materials document, manual books and other references of the
organization. The target population of study was 16 employees. The research used census
technique there for used to collected data all employee respondents. After data has been
collected, presented in the form table and percentage data analysis would takes places by using
descriptive of analysis. Finally the research would be forward conclusion and recommended
about population variable that independent variable compensation and dependant variable
employee management practice that may help the organization to fix the problems.
 CHAPTER ONE

INTRODUCTION

1.1BACK GROUND OF THE STUYD

Compensation is what employees received in exchange for their contribution. In the fact it is a
broader concept and it is more than just pay check or in cash in the package of compensation
various types of monetary and non- monetary reward exist organization benefit it form the
compensation management in attracting motivating and rerating and attractive work force
(christen m Hogan 2008).

Compensation daily with every type of reward individual received in exchange for performing
organizational task. It is one of the major method used retaining employees and motivate them
effective performance (None Hollan beckgerhad 2001).

Compensation is human resource management function that deal with every type reward
individual receives in exchange for performing organization task. Organization compensation
those employees through wage and salaries, bonus and any benefit such as health insurance ,
vacation time, pension programs this activities is important to increases the performance of
employee (Dessergary 1994) .

Since the business is existing in competitive environment and the cost nature of compensation.
Its miss management may lead to the death of the whole organization managing compensation is
not such easy task it require professional also technically knowledgeable and sensitive to
employee needs (Wallce F luisr Gomez 1979) .

1.2 Statement of the problem

Compensation is human resources management function deals with every type of reward
individual receives in exchanges for performing organization task. Organization compensation
those employee through wage, salaries and bonus and any benefit such as health insurance,
vacation time and position program this activates is important to increases the performance of
employees (Dessrgary(1994)

As well administrated compensation practice in an organization result in reducing turnover rate

and increasing job stratification. There are a number of problem in the bank due to not satisfying
compensation employee want to generate and earn the problem such as employee turnover,
dishonesty to their customer lack of attraction and lack of respect to customer due to
unsatisfactory nature of money gained form compensation absence of participation and
compunction from employee said un fair and discriminatory practice salary plan which does not
re cognize in the rest of employee. But the main gap commercial bank of logia branch lack of
enough prevision research study was primary gap that effect the successfulness of the
organization the research was motivated in order to practice conducted those about maintained
problem.

1.3 Research question

1 Is the compensation management practice of the organization policy?

2 What is the reaction of employees of the reward system organization?

3 What are the hinder the practice compensation management?

1.4 Objective of the study

1.4.1 General objective
The general objective of the study was assessing compensation management practice in
commercial bank of Ethiopia in logy branch.

1.4.2 Specific objective

1 To assess existing compensation practice policy of the organization?

2 To assess employees reaction to the reward system?

3 To identify hinders the implementation of well administrated compensation managements

practice?

1.5 Scope of the study

The study delimited geographically, conceptual and theatrical. Geographical study not target to
study all bank in the East Ethiopia due to time and money consternate no obtain relevant
information it is difficult to conducted the study all over the country this was focus only on logy
commercial bank which located Afar region logy town.

Conceptual˸ the study was focus on assessing the compensation management practice in
commercial bank of Ethiopia logy branch.

Theoretical˸ Compensation is one most important function in the personal management that is
used by an enterprise to attract and retain employees needed to get work done.
 1.6 Significance of the study
This study has its own contribution and usefulness to the following group. It was use as reference
for future studies in related areas. In addition to that it benefits the research by gaining skill to do
further study for the policy maker it can be tool to check existing problem and task corrective
measure.

1.7 Organization of the paper

This study was organized in five chapters. The first chapter presents the introductory part that
contains in back ground of the study, objective of the stud y, scope limitation of the stud,
significance of the study. The second chapter present related literature review. The third chapter
present methodology part it includes source and type of data, research design population of the
study census sampling technique and sample size method of data analysis. The fourth chapter
present data analysis and present in the technique and the last chapter present conclusion and
recommendation.
CHAPTER TWO

2 Review of related literature

2.1 Definition of compensation

Compensation management is vital segment of over compensation management and strategy.

Compensation management is concept where employee’s compensation a wage and salaries

employees administered in systematic and scientific way. This concept includes compilation and
implementation of rational polices related to wage, salaries and another allied benefits of
employee compensation (Ginarayandppd 200p 139).

The expressed as compensation administrations the concept and principle applied to a particular
organization. The ultimate objective of compensation a administration are efficient maintenance
of productive work force suitable the law and regulation (Richrdic Bachelor 2000).

Into day business work such as effort is enhanced by improving the quality of work life of
employee through various methods (Hjhno Bernarding 2001 p 213).

Compensation includes payment such as bonus, profit sharing over time, recognition reward,
checks and sale commotion (Gary desler and Bivvarkkey 2011 p398),

2.2 Objective of compensation

The main objectives of compensation are

 To acquire qualified personal

 To retain experienced employee
 To control cost
 To ensure equity

2.3 Types of compensation

2.3.1 Financial compensation
There are several types of financial compensation given to employee health and welfare benefit
rembursementand employee services are one category of financial compensation that is very high
priority for many workers. This includes medical and dental insurance pension plan disabilities
program and other type of financial compensation as pay for time not worker.

Financial compensation is typically divided in two parts

1 Direct compensation

Direct compensation is used to describe as the cash received in the form of basic salary overtime
pay, bonus, salary and commission.
2 Indirect compensation

Indirect compensation refers to the general categories of employee benefit program (Hjohn
Berardin and Wayne f Casio 2006 p 220).

Indirect compensation is also to component legally required program social security worker
compensation discretionary program medical coverage paid time off.

2.3.2 Non- financial compensation

There are also different types of non-financial compensation that are offered by employee like
permitting flexible work schedule another non- financial compensation is holding company
function for employee could be holiday part promoting verbal price and positive feedback
education reimbursement.

2.4 Who makes compensation decision

more is known about who makes compensation decision than some other factors. But those
simple matter. Decision on how much to pay what system to use what benefit to offers to
management decisions that determine the total amount of the firm get to be earmarked for pay to
be used (Example time scale vs. incentive pay, incentive especially at the top the organization).
As the firm grows in size compensation specialist at the general managers and job incumbent
may also have input large organization in now involving more individual in determining pay.
Today top manager and compensation specialist jointly establish over all financial and operating
goals and for different then each level of management establishes its own plan of support
corporate compensation objective. The new system rest of performance appraisal directly linked
to overall strategic goals for the firm most employees benefits are issues open to committee
bargaining are (Redwivedi 2001 p .233).

2.5 Importance of compensation

Compensation is important to personal manager for many reasons of all personal problems
paying employee is perhaps.
2.5.1 Importance of employee compensation to an organization
 To attract capable employees to the organization
To motivate the employee towards the superior of performance level
To retain their service for extended period of time
 To increase the organization salary and profit

A well designed compensation and benefits plan to attract, motivate and retain talent in an
organization.

 Job satisfaction ˸ your employees would be happy with their jobs and would be loved to
work for you if they get fair rewards.
 Low absenteeism ˸ a well designed and fair reward result a reduced absenteeism in the
employee.
 Low turnover ˸ a well designed and fair reward result for low or zero turn over

2.5.2 Importance of compensation to employee

 It is the primary and often the only source of income.
 It is fair reward for the work employees perform and the benefit its they provide for the
-employee.
 It determined the employee’s social status.
 Income level is often as a measure of personal worthy.

2.6 Compensation decision

- Employees working on similar jobs in other organization (A)
- Pay for a particular position is set relative to three groups
- Employees working on different jobs within the organization (B)
- Employee working on the same jobs within organization(C).
The decision to examine pay relative to grope A that is the pay level is called pay level
decision. The objective of the pay level decision is to keep the organization competitive
in the labor work s. The major tool used in this decision is the pay survey. The pay
structure involves setting a value on each job within the organization relatively to all
other jobs. This uses and approach C is called job evaluation. The decision involving pay
relative to group C is called individual pay decision. In the pay level decision the pay
level is decided to managers which compare the pay of people working inside the
origination with those outside it.

2.7 Pay determination procedures

Like any management activates compensation management is not without its sequential
 interdependent processes. They directly focus toward determination of individual pay.
The following relate to the major process that is pertinent to it.
 Job analysis˸ through job analysis information is collected about job top produce
job description on and specification.

 Job evolution ˸ it refers to determine the relative worth of job by using

information created in the job analysis in the form of description and
specification. The most common method is point factor comparison job
classification and the job ranking.

 Job classification ˸ which merely put job in descending order of important without
making non use of quantative measurement such as point and score while the
quantative system point factor compation are incorporated such system use
qualitative measuring by bracing each job in to comports .
Ranking this is simples and ordered method of job evolution in which case one whole is
compare to other it is very subjective mostly applied in small organization.

2.7 Incentive compensation

A part from the base system that we have determined in the previous section there are
other form of payment which collectively called incentives such as compensation plan
which relate pay with productivity incentive can be paid on individual basis, group
basis and organization wide performance .

Individual and group incentive plan

Individual incentive plan pay off for individual performance as explained by Wallace and
pay individual incentive payment take three basic forms piece rate, commission and
production bonus.

2.8 Equity consideration

Equity or fairness is basic issue which is address and by a well design compensation
system.
The general ethics of compensation is based on three pay off equity criteria internal, external and
individual (Wallace F 1999).

Internal equity˸ is fairness criterion that requires employees to introduction

Per rate for job with their that match to it refer the worth the job has an employee.

External equity ˸ is fairness criterions on that reviser enforce or employee pay rate that match to
rate existing internal market Wallace F and David Balkan 2004 p. 329).
Individual equity ˸ fairness criteria that demand employee to rate the individual working on the
same job according to variation individual merit

2.9 Factors affecting compensation

The type of compensation program implementation are strongly affecting by several internal l and l
externals factors compensation programmed be fixable some of the important factors are (Henderson R
2000).

1 Supply and demand in the labor market

The greater the demand for the skill needs to higher compensation.

2 Management‘s ability to pay

Is one of consideration that cannot be ignored when compost compensation policy is design prosperous
organization has to pay on more to employee that the less prosperous.

3 Technological advancement
can make significant change it the job content over period of time when this happens the compensation
for performing that should adjust.

4 Government restriction

It have role increasing profound impact on compensation the various type of rule regulate regarding
compensation have significant impact on the formulation the compensation have recently mode cost of
living adjustment such the living the standard of employees according to excising economic condition.

2.10 performance appraisal

Performance appraisal is the judgment of the individual employee performance by supervisory it usually
done in anticipation of dreaming an on annually salary increases research use of appraisal data may be
important that to compensation on who want to see what aspect on performance resin to merit how over it
is the effect an personal decision that is at primary concern to the compensation.
Communication and participation

Participation and communication play a significant role in the administration of compensation.

Communication is factor that should not be overlooks without which of effective and efficient
compensation structure is hard to perceive according to pay and Wallace open communication is essential
for any compensation plan leave it intended impact on employee

Organizational policy and collective

Agreement on compensation policy must be formulated before un successful compensation system can be
developed and implemented. These policies are strongly policy must clear with the following issue.

 Minimum and maximum level of pay

 The general relationship among level of pay
 Division of the total compensation expenditure

The payment policy and practice

As a profitable and competitive organization like commercial bank of Ethiopia its compensation structure
must be a benchmark for all industries.
CHAPETR THREE

3 Research Methodology

3.1The research design

The research used descriptive types of research design to describe the characteristics of the
population. It describes the compensation management practice in commercial bank of Ethiopia
in logy branch. In order to assess and describe events the data was analyzed through quantative
and qualitative way of data analysis. Because it is necessary to deal the problem and recommend
the solution for described problem by using statistical tools.

3.2 data types and source

In this research the data was used to quantitative and qualitative data. The research was applied
both primary and secondary data. Primary data was gathered from employees though
questionnaires and from the manager by interview. Secondary source of data was collected form
relevant books documents and other references.

3.3 population of the study

The target population of the study of 16 employees an one manager in the commercial bank of
Ethiopia in logy branch.

3.4 Sampling technique and sample size

The research used census technique. The reason behind this is that employees are small in
number enable to acquire reliable, accurate and detailed information from each employee. There
for the census technique 16 employee and one manager. Because of the populations small
number.

3.5 Method of data collection

Those primary data was collected through open ended and close ended questionnaire and
interview from the manager.

The reason that the research was used questionnaire method of data collected to save time easy to
collect the data. Secondary data was collected through reading of books written material
documents.
 3.6 Method of data analysis
after gathered data it was processed which involves, classifying and tabulation the data check
and adjust for omission and errors the completeness of data is ensure. Then the data are sorted as
it facilitates subsequent processing and analysis of data .In order to reduce a large volume of data
in to homogenous to got meaningful relationship among the variable that affect compensation
schemes.
 CHAPTR FOUR

4 DATA ANAYSIS PRESNTITIO AND INTERPRETION

This part deals with presentation, analysis and discussion of collected data. Data collected from
respondents are organized, presented and analyzed. In this part for the purpose of this study the
research has distributed 16 of questionnaires for concerned unit of census population from this
all questionnaires are returned properly.

4.1Repondents characteristics
No Item Number Percentage%

1 Sex

Male 14 87.5

Female 2 12.5

Total 16 100

2 Age

18-25 9 56.3

26-33 6 37.5

34-41 1 6.2

<41 0 0

Total 16 100

3 Marital status

Married 3 18.8

Single 13 81.2

Divorced 0 0

Total 16 100
 4 Education level

Certificate 0 0

Diploma 0 0

BA degree 16 100

MSC 0 0

Total 16 100

5 Work experience

1 year 4 25

2-4 year 12 75

5-10 year 0 0

<11year 0 0

Total 16 100

Source, questionnaire, 2016

According to table 4.1, 12(87.5%) of the respondents are male and 2 (12.5%) of the respondent
wear female. This indicates that the majority of the respondents are male in the organization.
This indicates that male have document in the office work.

In term of age as shown in table 4.1 most employees are found between the age intervals 18-25
which account 9(56.3%) of the respondents and there is no employee where age is above 41years
in the organization from 26-33 year there are 6 employees which account (37.5%) for the above
table the research can understand most of the organization works are in productive age.

From above table 4.1 of item 3 shows that the marital %status of the employee are 3 (18.8%), 13
(81.2 %), 0 (0%) for married, single and divorced respectively. This implies that majority of the
employee s are single.
From educational level has been expressed both in term of number and percentage form there is
no certificate gradates Diploma and MSC employee’s only degree holder which account 16
(100%). This indicates that the organization is only degree holders.

In term of work experience as shows in the table information that the research got from
employee those respondent( 25%) served 1 year and employee s whose service years range from
two up to four years wear( 75%) and those employees five up to ten and more than eleven year
no work experience. According to the information it indicates that the organizations are not
much experienced.

4.1.1Types of compensation practice in the bank

No Item Number percentage%

1 What kind of compensation exists in your bank?

Direct compensation 8 50

Both direct and in direct compensation 8 50

Total 16 100

Source questionnaire 2016

Above table shows that 8 respondents answered direct compensation 8 of the respondents replied
both direct and in direct compensation. There for the table shows that both direct and in direct
compensation.

4.1.2 Types of compensation

No Item Number percentage%

2 Based on the above question number 1 for which did

your bank give priority?

Direct compensation 11 68.8

Both direct and in direct compensation 5 31.2

 Total 16 100

Source questionnaire 2016

Above table shows that almost all the respondents of the view that bank was giving priority for
direct compensation and ignoring in direct compensation

4.1.3 Rate your organization of the equity

No Item Number Percentage %

3 What do you think about your organization

compared to other organization pay policy?

Very high 3 18.8

High 4 25

Moderate 7 43.7

LOW 0 0

Very low 2 12.5

Total 16 100

Source questionnaire 2016

From the above table it is clear that 2(12.5%) of the respondents were a negative attitude towards
the equity and 7(43.7%) of the respondents are natural and only 7(43.8%)of the respondents are
re-satisfied.

4.1.4 Financial benefits of bank

No Item Number Percentage %

4 Have you received any direct financial benefit?

Yes 12 75

No 4 25

Total 16 100
 5 If you say yes for question number 4 which types?

Bonus 3 18.7

Vacation 2 12.5

Sick life time 10 62.5

Pension 1 6.3

Total 16 100

Sources questionnaires 2016

In the above table 12 (75%) of respondents replied yes and the remaining 4(25%) of respondent
answer on. So it indicated many respondent received direct financial compensation.

On the same table question number 4 implies that 3(18.7%)of the respondents are Bonus,
vacation, sick life time and pension received from bank sick life types of direct financial
compensation

4.1.5 Compensation practice of organization

No Item Number Percentage%

6 How do you see the compensation practice of the

organization in you perception?

Very good 3 18.8

Good 10 62.5

Fair 0 0

Poor 1 6.2

Very poor 2 12.5

Total 16 100

Source questionnaire 2016

In the above table 3(18.7%) of respondent are not satisfied with the compensation practice of the
organization your perception those fair, poor and very poor.3918.8%) of the respondents are
 telling that it is very good only 10(62.5%) of the respondent are satisfied with the compensation
practice of the reward system your organization.

4.1.6 The reward system of organization

No Item Number Percentage%

7 The reward system in the organization is highly

with employee?

Strong agree 0 0

Agree 5 31.2

Neutral 3 18.8

Disagree 8 0

Total 16 100

Source questionnaire 2016

From the above table it is clear that only 5(31.2%) of the respondents are having a positive
attitude towards the reward system of the organization. 3(18.8%) are neutral and a majority of
respondents 8(50%) of the respondent are not satisfied with the reward system of the
organization.

4.1.7 Basis reward system

No Item Number Percentage%

8 Do you receive reward in your organization?

Yes 13 81.3

No 3 18.7

Total 16 100

No Item Number Percentage %

If you answer for question number 8 is yes what type of

reward you have been received?
 Bonus 12 75

Commission 4 25

Profit sharing 0 0

Total 16 100

Source questionnaire 2016

From the above table it is clear that 13(81.3%) of the respondents are yes 3(18.7%) of the
respondents no .It indicate this receive reward in your organization more respondent yes. This
table indicate reward your received of employee more bonus that 12(75%) of the respondent.

From the above table clear that 12(75%) of the respondents are bonus and 4925%) of the
respondent commission and the other on respondent. It indicates this type reward is more bonus.

4.1.8 The reward system

No Item Number Percentage%

10 Is the reward that you received at pay with your

effort?

Yes 16 100

No 0 0

Total 16 100

Source questionnaires 2016

The above table shows that 16(100%) of the respondent replied yes and (0%) of respondents
wear answer no. There for from this data the research understands that respondents are satisfied
that reward you received at pay with your effort.

4.1.9 Problem of compensation

No Item Number Percentage%
 11 Is there any hindrance of compensation the employee
properly?

Yes 3 18.8

No 13 81.2

Total 16 100

Source questionnaire 2016

Form the above table it is evident that 3(18.8%) respondents yes the reason the employees are
not better service and discrimination of the customer. 13(81.2%0resopndets is not the respondent
were of view that there is on hindrance to compensation employees properly. This indicate more
respondent no hindrance compensation employees properly.

4.1.10 Viability of salary to the benefits in the bank

No Item Number Percentage%

12 Is your salary viable with the benefits provided the

bank?

Yes 10 62.5

No 6 37.5

Total 16 100

Source questionnaire 2016

The above table shows that 10(62.5%) of respondent were of the view that salary is viable with
the benefits provided by the bank where as 6(37.5%) respondent said no. This indicates your
salary benefits more provided in the bank.

Open ended question

13. What is the base for the reward that you received from your organization?
On the effort to achieving of your organization objective based on work experience and practices
one year of the performance successful of expectation organizational bonus around of the end of
year .

14. What are the possible issues that your organization must consider to compensation employee
properly?

Employee performance and customer satification and it increase employee work experience in
order to achieve organization goal and sustain ability.

Interview results

The interview was conducted with the manager of bank asking the following question.

1 Do you make compensation in your organization?

Yes we make financial compensation this means direct and in direct compensation. Direct compensation
is vacation, bonus, salary and commission and indirect compensation is general categories of employee
benefit program.

2 When do you make compensation for your employee?

As we know our organization of profit making institution. So that to compute the private banks and to be
affricative and efficiently deliver the service quality we made compensation in four time in a year which
means our organization gives a target plan for the whole branches.

3 What types of compensation of you make for your employee?

Make there are so many type of compensation among housing, desert fuel and annual bonus promotion
compensation this means housing, desert fuel and annual bonus are direct compensation and promotion
and employee benefit program is indirect compensation.
CHAPETR FIVE

5. Conclusion and recommendation

5.1 conclusions

The major emphasis of study was assessing the compensation management practice of
commercial bank of Ethiopia logy branch from the analysis and interpretation the following
conclusions were made.
The majority of employees (87.5% 0 found in the organization are males. Almost males account
about 7time of female employees in the organization. This indicates those male are dominant
employees of the organization.
The age of most employees at the range between 18-25 ages. As it is known this age is called
productive age. There for employees have the capacity to give better and fast services to the
customers of the organization.
Regarding the educational level of employees most of them are first degree holders.
Nearly (75.4%) of the employees have work experiences of 2-4 years only which shows that
employees are relatively experienced. The management has a great opportunity to would them by
motivating them through various training and developmental program.
Equal 950%) of the employees were getting both direct and indirect compensation.
Nearly 935.7%) of the respondents said that the banks compensation was moderate as compared
to the other and reputed firms operating in the country (25%) told it was high.
(62.5%) of the respondent said that the compensation package of the bank was good, by (18.8%)
Side it was very good and (12.5%) were of the view that it was very poor.
5.2 Recommendation
Under this a different recommendation that was requiring further investigation would be for
warded. This is done based on the findings of the study.
As it possible to understand from findings the number of employee of male employees are
greater than the number of females almost 7 times.
There for it would be better to increase the number of female who work in the organization there
by female play a great role in creating a better service giving organization.
The bank must take initiative encourage females to join the organization and solve the gender
problem existing in the country.
The bank should try to include more number of employees at different levels while providing
indirect and direct compensation.
Bank must be improving its compensation package to be at acceptability ways of employee.
Bank must bring effective compensations system and improve the reward system by
implementing employee work experiences and effectiveness.
The bank must try to base the reward system individual contribution and increasing the
productivity.

Bibliography
- Bijvvarkke, (2011), Human Resource Management 12 edition˸ in south India.
- David B Balkan and Robert L cardy, (2005), Manage Human Resource personal Education ˸
New Delhi.

- H Johan Bernading,(2001), Human resource management 3 edition ˸America New York.

- None H Hollenbeck Gerhard, (2001), Human Resource management ˸San Francisco.

- Walla Fand Luisr Gomez, (1979) Human resource managing 4 edition ˸ Americas.

- Wayne F Casco, (2003) Managing Human resource 6 edition ˸ Americas.

- Vsprao, (2010), Human resource Management excel book 3 edition ˸ Africa new aehi.

APPENDIX I
Samara University
College of business and economics
 Department of management
Dear respondents

Questionnaire prepared to employee of commercial bank of Ethiopia in logy branch.

The main purpose of this questionnaire is collect data for the research entitled by the title
assessing compensation management practice. So as employee of commercial bank of Ethiopia
staff of the bank your kindly invited and requested. To give the answer for the questionnaires
freely and honestly.

General instruction \

1 Read the questions carefully and analysis before you given the answer.
2 Respond the questions.
3The multiple choices you can chose given the answer.

4. Put(x) in the box for multiple choices.

PART ONE PERSONAL INFORMATION

1 Sex Male female

2 Age 18-25 26-33 34-41 <41

3 Martial status Married Single divorced

4 Educational back ground

Diploma BA degree certificate MSC and above

5 Work experience 1 year 2-4 year 5-10 1 above 41

PART TOW
1 what kind of compensation exists in your bank?

Direct compensation both

indirect compensation I f any other specify

2 Based on answer for question number 1 for which did your give priority?

Direct compensation in direct compensation

Both If any specify

3 What do you think about organization compared to other organization pay policy?

Very high high moderate

Low Very low

4 Have you every receive any direct financial compensation? Yes No

5 If you say yes for question number 4 which types?

Bonus Vacation Sick life time

pension

6 How do you see the c compensation practice of the organization in your perception?

Very good good poor Very poor

7 The reward system in the organization is highly reactive with employee?

Strong agree agree

Disagree Neutral

8 Do you receive reward in your organization?

Yes No

9 What is the base for the reward that you received for your organization?

Specify……………………………………………………………………………………………
………………………………………

10 If you answer for question number 9 is yes what type of reward you have been received?

Bonus commission

Profited sharing if any other

11 Is reward you receive satisfaction regard to your effort you put in the job?

Yes No

If you say No why? …………………………………………………….

12 What the possible issues that your organization must consider to compensation employee
properly?

Specify……………………………………………………………………………………………
………………………………………………………………

13 Is there any hinder to compensate employee properly?

Yes No

14 If your answer for question number 14 yes what types of factor those affect you? Specify

15 Do you have any benefit provided by the same other your salary?

Yes No

APPENDIX II
Samara University
College of business and economics
Department of management
Interview questions for bank manager

1 Do you make compensation in your organization?

2 When do you make compensation for your employee?

3 What type of compensation you make for employee?