Abstract:
The main purpose of this study was to examine the effect of compensation and reward system on
employee performance in the case of commercial bank of Ethiopia Jimma district. In an attempt
to achieve this end the study is explored both primary and secondary sources of data. With
employing non- probability of purposive sampling, data was collected by administering
questionnaire and exploring documents. The collect data information was analyzed using
quantitative and qualitative method of data analysis. The researcher takes a sample for 353 from
employee of the bank. Data was collect using structured questionnaires and was analyzed using
Statistical Package for Social Sciences (SPSS) version 20.0 for windows. The data was analyzed
using Statistical tools such as mean, standard deviation, correlation, and regression models. The
findings of this study indicated that there was a significant relationship between compensation
and reward system with employee performance. The study also indicated both financial and non financial compensation and rewards have a significant relationship with employee performance.
The non-financial compensation and rewards were found to be a more motivational than the
financial rewards in Commercial Bank of Ethiopia in Jimma district. It was also found out that
total rewards of CBE in Jimma district had an impact on employee performance. As a result,
creating competitive and effective compensation and rewards should be industrial to stimulate
employees’ performance.
