EFFECT OF REWARD MANAGEMENT ON EMPLOYEE’s MOTIVATION: THE CASE OF ETHIOPIA COMMODITY EXCHANGE

Abstract

Reward and motivation are relying upon in many countries to induce changes in organizations. One of the ways to heighten the motivation is through effective reward system. This study seeks to determine the role of reward system in promoting employee motivation in Ethiopia Commodity Exchange. The study is guided by the following research objectives: to assess the components of an effective reward and motivation system for Ethiopia Commodity Exchange. Data were collected through questionnaire prepared based on various scholars work. The validity of the instrument was checked and internal consistency of the instrument was measured using Cronbach Alpha and the result was 79%. Considering the manageability of number of employees in the Exchange, the researcher used census method to incorporate all of the employees by excluding those who are not served the exchange above one year. A total of 131 questionnaires were distributed to the respondents. Of the total distributed questionnaires, 119 usable questionnaires were returned which is about 90.8% response rate. The collected data was analyzed and represented by use of tables to tabulate the information gathered appropriately. Statistical Package for Social Sciences (SPSS) was used to analyze the data. With respect to the dimensions of employee motivation assed by the questionnaire, the result indicates that the mean values for the payment, benefit, promotion, working condition, recognition and leadership rated by respondents with their motivation level ranged from a low of 2.72 to a high of 3.84. The results also indicate that there is a statistically positive significant and direct existing relationship between reward and employees motivation. The study concluded that in order for the company to be successful, creation of motivated and energetic employees is mandatory and the analysis has shown significantly positive relationship between all dimensions of reward variables and employee motivation and it is also supported by the results of regression analysis. The study recommended that monetary compensation alone is insufficient to motivate employees. Other factors such as giving greater recognition, creating conducive work environment and establishment of better leadership system have the greatest impact on employee motivation. In addition to that, the reward should be given to employees when they meet large goals as well as smaller.