The most important resource of an organization is human resource. In an overall performance of an
organization, it is very important to retain an efficient and effective workforce. Motivated employees can add
value to an organization by successfully achieving its targets. The study therefore examined the effects of
human resource (HR) practices on the employees’ job satisfaction in Microfinance banks in Ilorin Metropolis.
The specific objectives are to: (i) examine the effect of compensation system on employees’ job satisfaction in
microfinance banks; (ii) determine the factors that influence performance appraisal in the microfinance
banking system. The following research questions were formulated to guide the study: (i) what is the effect of
compensation on employees’ job satisfaction in microfinance bank?(ii) what are the factors that influence
performance appraisal in Microfinance Banks?The study adopted a descriptive design, questionnaire was
used to elicit information from the employees of Twenty-one (21) microfinance banks in Ilorin metropolis.A
total of 245 employees of these microfinance banks were chosen as sample size using Yaro Yemane to
determine the sample size. Findings from the study revealed that; there is a strong significant relationship
between compensation and the employees’ job satisfaction in microfinance banks in Ilorin metropolis (R =
0.958, R2 =0.918, P < .05). Also, there is a strong significant relationship between performance appraisal and
employees’ job satisfaction in microfinancebanks in Ilorin metropolis (R = 0.955, R2 = 0.912, P< .05). The
study concluded that, there is a positive and direct relationship between compensation and employees’ job
satisfaction. This shows that employees of microfinance banks observe clear link between compensation for
their work and job satisfaction along with career progression. The implication therefore is that proper use of
all these human resources practices will bring about job satisfaction among employees which can also make
employee to continually contribute their best efficiently and effectively. The study therefore recommended
that Microfinance banks needs to focus a lot on the well-being of its most precious assets that is Human
resources. The study recommended that improved human resource practices should cut across all employees
in order to increase staff efficiency, which will in-turn enhance performance.