Impact of HR Practices on Employee Satisfaction and Employee Loyalty: An Empirical Study of Government Owned Public Sector Banks of Pakistan

Employee satisfaction and loyalty is one of the most important challenges that banking sector is facing in current competitive market. A lot of studies have been conducted to determine predictors of employee satisfaction but these studies focused only on developed countries. Therefore, the main purpose of study is to find the relationship between three HR practices i.e. compensation, empowerment and appraisal system and employee satisfaction & loyalty in government owned public sector banks of Pakistan. For this purpose, data has been collected from the employees of govt. owned public banks. Statistical software SPSS 17 has been used for validity, reliability, correlation and regression analysis. Employee compensation is found to be most important factor for creating satisfaction among employee while employee empowerment is found to be significant factor for developing employee loyalty. Theoretical and managerial implications along with limitations for future research have also been discussed.