EXECUTIVE SUMMARY: The major objective of this research paper was to analyze relationship between Compensation Management and Employee Performance. For this research, primary data were used to obtain desired result. A structured questionnaire was prepared and distributed to the people working in Bank and Financial Institutions.
To fulfill the objectives of this research, eight hypothesis were developed based on the relationship between Employee Performance and Financial Compensation, Non-Financial Compensation, Leadership, Coaching, Empowerment, Participation, Organization Culture and Motivation. For the analysis of data, 150 respondents were taken. To determine the relationship among the variables and to test the research hypothesis, correlation, regression and ANOVA analysis method were used. 
Using Regression analysis the result revealed that Employee Performance has significant relationship with Financial Compensation, whereas, there is no significant relationship between Employee Performance and Non-Financial Compensation, Leadership, Coaching, Empowerment, Participation, Organization Culture and Motivation. Moreover, ANOVA test showed significant relationship between the Position and Employee Performance
The study suggested that Human Resources Manager of the BFIs should develop proper financial compensation system as it increases organizational productivity, decrease employee turnover, decrease chances of error, reduced absenteeism, punctual towards work, increase motivation.

ACKNOWLEDGEMENTS
The research entitled "Compensation and Employee performance in Bank and Financial Institutions (BFIs) of Nepal" has been prepared under the Graduate Research Project (GRP) as partial fulfillment of Master of Business Administration (MBAe) under the program, Faculty of Management, Pokhara University.
I extend my sincere gratitude to the GRP supervisor Mr. Dipendra Karki for his support, encouragement, motivation, and help throughout the dissertation work. I would also like to thank him for his valuable guidance and advice for completing this research project.