updating multiple columns using case statement in sql server

You'll have to swap the syntax around. The case statement will be applied for every value you want to update...

UPDATE table SET
    pay1 = CASE WHEN @columnname IN('name1') THEN pay1 * 100 ELSE pay1 END,
    pay2 = CASE WHEN @columnname IN('name1', 'name2') THEN pay2 * 20 ELSE pay2 END,
    pay3 = CASE WHEN @columnname IN('name1', 'name2', 'name3') THEN pay3 * 100 ELSE pay3 END

It looks like you actually want is a if statement....

IF @columnname = 'name1'
    UPDATE table SET pay1 = pay1 * 100, pay2=pay2*20, pay3=pay3* 100

ELSE IF @ColumnName = 'name2'
    UPDATE table SET pay2 = pay2 * 20, pay3 = pay3 * 100

ELSE IF @ColumnName = 'name3'
    UPDATE table SET pay3 = pay3 * 100

Hope that helps