Abstract:
This study is aimed to investigate the effect of compensation on employee motivation of
administrative staffs in Jimma University. The study adopted both descriptive and explanatory
research design and a quantitative research approach. The Stratified random sampling
technique was used. Both primary and secondary data sources were used. The number of total
populations of target identified was 4067 and sample size taken was 350 with 85% rate of
response. The data was analyzed using SPSS Version 25. Both descriptive and inferential
analysis were under taken. The research finds out that financial and non-financial compensation
have much importance to motivate employees. There is positive and statistically significant
relationship between financial and non-financial compensation and employee motivation.
Empowerment has insignificant correlation with employee motivation. Salary, bonus/incentive,
infringe benefits, recognition and appreciation and promotion have positive significant effect on
employee motivation in administrative staff of Jimma University. While working condition and
empowerment have insignificant impact on employee motivation of administrative staff in Jimma
University Based on the above findings a researcher concluded that financial and non-financial
compensation practiced Jimma University to motivate employees of administrative staff is
somewhat satisfactory. From the findings of the study a researcher recommended that as
compensation must be valuable to the employees and should be based on realistic and reliable
standards, the Jimma University management should consider that both financial and non financial compensation are important for employee motivation and also give emphasis for both
types of compensation to improve employees’ motivation to the highest level.
