EFFECT OF REWARDING SYSTEM ON EMPLOYEE PERFORMANCE: THE CASE OF HABESHA BREWERY, ETHIOPIA

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. This study examined the impact of reward systems on employee performance in Habesha Brewery. The study has used descriptive and explanatory research designs which incorporated both quantitative and qualitative approaches. The study surveyed 237 employees from Habesha Brewery by using self-administered questionnaire. Only 190 employees properly filled and returned the questionnaire and as result, this study attained 80 % of response rate. Accordingly, the study found that the proper implementation of rewarding system was limited by mishandling of fair promotion and transfer techniques but rewarding system is strongly implemented by providing well designed physical work area, brewery based rules and procedures, and creating learning brewery environment. In addition, the study found that there exist moderate positive relationship between recognition and praise, pay and bonus, training & development and work environment and employee performance. Further, recognition, pay and bonus, training and work environment affects employee performance in brewery industry. This study revealed that there is a significant motivational factors difference among the employees in the brewery industry by demographic variable such as gender and work environment, education level by using independent T test. Finally, the study concluded that reward management has positive effect on the performance of employees in the study organization. Hence, this study suggests the need to work on management succession that involves hiring new executives, promotions, and transfers as well as it may enhance its manufacturing competency that entails ensuring that staff possesses the appropriate skills and knowledge to perform the service.