Past studies endorsed that there is a quite number of factors have been considered as the influencing factors of employee performance in an organization. Some of these are selection, training and development, performance appraisal, promotion, job design, security, and satisfaction, compensation system, employee commitment, personality, emotional intelligence, organizational citizenship behavior among others. While several studies considered investigating the influence of human resource management practices on employee performance in different context such as America, Africa and Europe, but very little attention have given in South-Asian countries like Bangladesh.  Hence, this manuscript attempted to investigate the impact of compensation system on employee performance using quantitative analysis. To do so, survey was conducted as well as perceptions of 200 employees working in telecommunication service providers in Bangladesh were obtained to analyze the relationships. The data is analyzed and hypotheses were tested by using IBM-SPSS-AMOS package 25.0. The study found that employee engagement partially mediates the relationship between compensation system and employee performance by the data of this study. This research indorsed that there is a candid need to implement better compensation system by the entrepreneurs which will ensure better employee performance in line with consistent growth of firms as well as Bangladeshi GDP.

No abstract