THE EFFECT OF REWARD MANAGEMENT SYSTEM ON THE PERFORMANCE OF EMPLOYEES THROUGH THE MEDIATING ROLE OF MOTIVATION: IN THE CASE OF ETHIO TELECOM

Abstract

The primary objective of this research was to investigate the effect of reward management system on employee performance with the mediating role of employee motivation in Ethio Telecom. Reward system comprises of both intrinsic and extrinsic components and plays an important role towards performance and achieving organizational goals. The study was done based on primary and secondary data sources. A self-administered questionnaire was designed to collect relevant information from the selected respondents. Both qualitative and quantitative research methods were applied. In order to select the respondents from the total population of 1639, simple random sampling method was applied. Accordingly data were gathered from 272 employees who have work experience more than one year samples to be taken in to the study. Survey data collected from respondents analyzed by SPSS version 23 using frequency, descriptive, correlation and regression analysis. The study adopted both explanatory and descriptive survey design. Descriptive research design was followed to describe what it is or what the situation looks like and correlation analysis also used to show the relation between dependent, independent and mediating variables. The results indicated that there is significant relationship between total reward and employee performance. Further, significant relationship also exists between total rewards, employee motivation and employee performance. The study further point out that intrinsic reward is significant contributor towards enhancing employee performance as compared to extrinsic rewards. And extrinsic reward is significant contributor towards enhancing employee motivation as compared to intrinsic rewards. The study concludes that in order to increase employee motivation and employee performance organizations should focus on both intrinsic and extrinsic rewards rather than focusing only on one of them.