THE EFFECT OF REWARD SYSTEM ON CRATIVITY OF EMPLOYEE IN OROMIA CREDIT AND SAVING SHARE COMPANY: THE CASE OF EAST SHEWA ZONE BRANCHES.

Abstract

Reward system is an important tool that management uses to channel employee’s motivation in desired ways such as better functionality and further improve company performance. The overall purpose of this research was to investigate the effect of reward system on employee creativity in Oromia Credit and Saving Share Company (OCSSCO) the case of East Shewa Zone Branches. The study population comprised a total of 250 employees from various functions. Simple random sampling technique was used to draw a sample size of 144 respondents. The data collection instrument was open and closed ended questionnaire developed by the researcher along with the researcher was using Statistical Package for Social Scientists (SPSS) version 21 for data operation and analysis. The result of descriptive statistics indicated that practice level of both intrinsic & extrinsic rewards in OCSSCO is low. Furthermore, the outcome of Pearson correlation shows there is a significant and positive relationship between extrinsic reward, Intrinsic reward & employee creativity. Also, the results obtained from the regression analysis indicate almost 83.3% of employee creativity is explained by extrinsic & intrinsic rewards. Similarly, the result indicates intrinsic reward is more contributing factor to employee creativity than extrinsic reward. It concludes that in addressing employee creativity for accomplishment of organizational goal, it is important for the management to make effective use of both extrinsic and intrinsic reward system for their employees. What is more, the management needs to appraise reward practice of identical institutions & formulate essential fine-tuning.