Changes in the pay structures and systems in the banking sector of Pakistan: Implications for a differentiated workforce and the employee psychological contract.

  • Asfia Obaid

Student thesis: Phd


AbstractThis thesis analyses the changes in pay structures and systems in the banking sector of Pakistan within a wider organisational setting of changes in multiple HR practices. It examines the outcome of these changes as perceived by different employee workgroups in the milieu of their new set of expectations. The existing literature on pay and its influence on the employee psychological contract is mostly limited to studies in the Anglo-Saxon countries. It fails to adequately highlight the ensuing conflicts of institutionalizing HRM practices which may be considered socially legitimate in western societies, in a South Asian country. While the importance of employee involvement in the design and implementation of pay practices is established in the literature there have been few studies which link the implications of its absence with employee perceptions. Moreover, the limited emphasis on the implications and consequences of applying a differentiated HR architecture within organisations fails to recognize the complex and at times conflicting relationship between different HR practices and the associated impact on multiple employee workgroups. To address these gaps in literature a qualitative case study approach was employed and interviews were conducted with 94 employees and HR managers in six domestic banks in Pakistan. The analysis reveals the policies of deregulation and privatization as the key driver for changes in the pay practice which include a partial shift from seniority to performance based pay systems, adoption of broadband pay structures and discontinuation of defined pension benefits. The other HR practices varied only slightly in design features and were applied inconsistently across the differentiated employee workgroups indicating more investment in some than others and resulting in pronounced conflicts between them. The results suggest that interrogation of outcomes of changes in bundles of HR practices, framed by an organisation's HR architecture requires a multi-level study which incorporates the perspectives of both the employers and the employees.
Date of Award31 Dec 2013
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorDamian Grimshaw (Supervisor) & Jill Rubery (Supervisor)


  • Compensation and benefits, HR bundles, HR architecture, Pakistan

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