The Effect of Reward Practice on Organizational Commitment in the Save the Children International Ethiopia Country Office

Abstract

The purpose of this research was to examine the effect of Reward Practice on Organizational commitment in Save the Children Ethiopia Office. The research intended to look separately at the effect of both aspect of reward, financial and non-financial, on organizational commitment by taking employees on different positions and job grades in Head office located at Addis Ababa as target population. A Stratified random sampling technique was applied, to draw a sample size of 176. Both descriptive and inferential statistical techniques were used to analyze the data. Correlation analysis was conducted to see the relationship between reward and organizational commitment. The findings of the study highlighted the fact that financial rewards; Benefit has strong relationship with components of commitment except Affective commitment which it has no relationship. Whereas, Compensation has no relationship with affective commitment, but it has weak relationship with continuance and normative commitment. Non-financial reward i.e. learning has a large and strong positive relationship with components of commitment. Performance and development exhibited moderate but statistically significant positive association with affective and normative commitments respectively. Benefit, performance, learning &development exhibited strong& large relationship with overall Organizational commitments. The estimated result revealed that all of the explanatory variables have significant positive effect on the dependent variable organizational commitment. Learning has higher significant effect on organizational commitment in the case of the Save the Children International Ethiopia Country Office under study. Recognition has no significant effect on organizational commitment and compensation. It has been recommended, as a result, the Save the Children is expected review its financial reward packages both in terms of their fairness and transparent procedure so as to increase are turn of high level of organizational commitment through the investment made on these rewards. Moreover, Save the Children is advised to give priority and focus more on non-financial rewards to bring positive impact of commitment in the workplace.