Employee behavior is the most pivotal point of many research studies because it is closely connected with the issue of organization performance. The purpose of this study was to testify the variable that affects employee behavior, which in turn culminates into organizational productivity; special emphasis was placed on the investigation of the role of performance based pay as a moderating variable in enhancing the performance of individual and organizational productivity. The study focus was to determine the change in the organizational productivity (if any) when the performance based pay has been introduced in these selected organizations. Based on the nature of research, this study fits in descriptive and correlative research design, followed survey strategy and deductive approach, where the study intends to examine the relationship of variables and its effect. The study used quantitative data, which was collected through questionnaires using five likert scales, which was measured in terms of numerics and statistics. Total employees working in these organizations are 1821, including 355 management and 1466 other employees, 962 close ended questionnaires were distributed in selected firms for response and 855 responded. Regression Analysis was performed to check the effect of “X” on “Y”, “M” on “Y” and XM on Y for moderation. In Life Insurance Firms and private sector banks, the study find significant effect of employee behavior on organizational productivity, significant effect of performance based pay on the organizational productivity and moderation of performance based pay between employee behavior and organizational productivity. Further the research found a significant effect of employee behavior on organizational productivity, significant effect of performance based pay on the organizational productivity and no moderation of performance based pay between employees’ behavior and organizational productivity in case of Public Sector Banks. The study was conducted in the Peshawar market only, the findings of the study should not be generalized on other firms in the other parts of the country. This study will help the bankers and insurance firms to best understand the phenomena and enhance productivity, while introducing performance based pay in their organizations. The study discussed the future implications on the gap identified for researchers to conduct study in future. The study contributes to the field of knowledge, by addressing the issue of performance based pay and its effects on employee workplace behavior and organizational productivity. Second this study also contributes by evaluating the effect of PBP as moderating variable on EWB and OP.