THE EFFECT OF COMPENSATION AND BENEFIT ADMINISTRATION PRACTICE ON EMPOYEES PERORMANCE (THE CASE OF COOPERATIVE BANK OF OROMIA)

Abstract

The main purpose of this research paper was to assess the effect of compensation and benefit administration practice on employee performance in the case of cooperative Bank of Oromia. Employees should always be aware of the relationship between their level of performance and how they are rewarded for that performance. The main reason why studied this research was most of researchers’ magnified extrinsic motivation that has been high motivational factors as compare as intrinsic motivation. Due to the study had to be out shine the perceptible value of intrinsic motivation factors in the bank parallel to extrinsic motivation. And also salary increment and incentives are not in the base of individual relative performance, as a result of this turnover and absenteeism rate was high. Data were analyzed using descriptive and casual statistics with in stratified random sampling method to allow for appropriate conclusion and recommendations according to the findings from the questionnaire and interviews. The questionnaire was subsequently sorted, categorized and finally tabulated through Statistical Package for Social Sciences (SPSS).The analysis part of thesis examined the perception of employees towards the different aspects of reward systems that affect performance and attempt to establish which type of compensation and benefit administration practice systems are more beneficial to the bank. The findings of the study revealed no sufficient financial compensation and salary increment and different incentives are not provide based on individual performance. But non- financial compensation is relatively more available and the bank is relatively more effective in providing intrinsic prizes or reward than extrinsic. Based on the study findings, the researcher recommended the way forward in improving the compensation and benefit administration practices and better to improve the working environment of the bank.