THE EFFECT OF REWARD PRACTICE ON EMPLOYEE PERFORMANCE THE CASE OF DASHEN BANK S.C.

Abstract

The purpose of this paper is to examine the effect of reward practices on employee performance in the case of Dashen Bank SC. The study considered six construct variables of reward practices such as, Payment, Benefit, Promotion, Recognition, Working condition and Supervision, to measure the employee performance of Dashen Bank SC. The researcher used quantitative research design. Among the various quantitative methods, the researcher used explanatory study, where emphasis is given on studying a situation or a problem in order to explain the relationship between variables. In this research 250 employees were selected based on statistical formula developed by Daniel (1999). The data collection instruments were adopted from Roberts, R.L. (2005) and Muchiri H. (2016), which consists of 32 (Thirty Two) items. Validity and Reliability test was conducted to check the consistency and dependability of the instruments and accordingly, all the components of reward practices considered under the present study were proven to be reliable, scoring an Alpha value greater than 0.70. The Pearson correlation analysis was conducted to determine the relationship between employee performance and Reward practice components. The finding shows that there is a significant positive association between reward practice and employee performance. The regressions result confirmed that, the linear combination of all the components of reward practices considered under the present study significantly contribute to the variance in employee performance. The ANOVA test result also confirmed that, the prediction powers of the reward practice components are found to be statistically significant. From the Beta coefficient result, the researcher obtained that, working condition is found to be the most important variable in predicting the dependent variable employee performance, followed by promotion, recognition, payment, benefit and supervision. Finally, the researcher concluded that in the case of Dashen Bank SC, components of reward practices, financial and non – financial rewards have a significant positive effect on employee performance. On top of that, a significant portion of employees considered the reward practices in Dashen Bank S.C. as less motivating, unfair, not competitive and attractive and hence employees seemed to be less responsibility, les loyalty and belongingness and less committed to the organization. It is recommended to review the banks current reward practice that are factor that affect employee performance.