THE EFFECT OF REWARD MANAGEMENT PRACTICES ON EMPLOYEE’S JOB PERFORMANCE: THE CASE OF ETHIOPIAN ELECTRIC POWER, WEST ADDIS ABABA DISTRICT

Abstract

This study aimed to determine the effects of the reward system on employee's performance in Ethiopian Electric Utility (EEU) West Addis Ababa District customer service centers. This research is descriptive and explanatory in nature. Questionnaire was distributed to 229 sample respondents who work at EEU West Addis Ababa District customer service centers. The sample respondents were selected from the eight customer service centers and the respondents from each group (stratum) was selected using simple random sampling method, and proportional to their population share. Data were analyzed using statistical techniques like descriptive statistics techniques, and regression analysis with the help of SPSS. This study confirmed that the monetary and non-monetary reward practices are important for employee performance in the case organization. The study findings revealed that there is a significant and positive relationship between three monetary reward practices (salary, bonus and allowance) and employee performance, and two non-monetary reward practices (promotion and recognition) and employee performance. This implies that reward practices improve employees’ performance and hence organizational performance. Therefore the study recommended that the EEU should put more emphasis, considerations and formulates clear policies and plans on monetary rewards (salary, bonus and allowance) and non-monetary rewards (promotion and recognition) from which it can result in greater employee performance and further employee productivity and commitment