EFFECT OF FINANCIAL AND NON-FINANCIAL REWARDS ON EMPLOYEE MOTIVATION: THE CASE OF DASHEN BANK S.C.

Abstract

The aim of this study was to examine the effect of financial and non-financial rewards with respect to overall levels of employee motivation in Dashen Bank. Employee complain about reward schemes not tailored according to their need and company’s reluctance to identify which reward variable motivate employee most are few of the problems observed during preliminary survey and drive the researcher to conduct this research in more detailed manner. This research is descriptive in nature. Qualitative as well as quantitative research design have been adopted in this paper to achieve the objectives of this study. Financial and non-financial rewards taken as independent variables and motivation as dependent variable for this study. Structured questionnaire was used to gauge the responses on a five level scale. Questionnaire was distributed to 366 sample respondents who work at different area banks in Addis Ababa. Non-probability sampling was employed to select area banks and in order to select sample respondents simple random sampling was used. Data was analyzed by using different statistical techniques like descriptive statistics techniques, and regression analysis by using SPSS. The study confirmed financial rewards are important for employee motivation in the case company but the importance of non -financial rewards cannot be discriminated. It is also found out that salary is most motivating factor and while retirement benefit is the least one from financial reward. Job security and career advancement are also found to be highly motivating non-financial factors. This research can be helpful for the banking sector specifically to Dashen Bank. They can design effective compensation package to motivate their competent employees.