Abstract:
Organizational success and growth are heavily reliant on the performance of their personnel. As
a result, organizations aiming to optimize their personnel must first understand the factors that
drive employee performance. One such component is an organization's reward system, which is
critical in motivating people and improving their performance. The purpose of this study is to
investigate the effect of the reward system on employee performance at selected branches of the
Cooperative Bank of Oromia. An explanatory research design was used to achieve this goal. To
achieve the objective of the study, an explanatory research design was employed. The sample
consist of 99 employees from selected branches under Jimma district of Cooperative Bank of
Oromia, and a questionnaire was used to collect data regarding their perceptions of the reward
system and its impact on their performance. Descriptive analysis using frequency and
percentages was used to see variations in demographic factors. Moreover, statistical analysis
techniques, including correlation and regression analysis were utilized to analyze the collected
data and establish relationships between different reward system variables and employee
performance. The findings of this study indicated that base pay, benefits, recognition, working
condition, and career development have a positive and significant effect on employee
performance in Cooperative Bank of Oromia. The correlation analysis result supports the
regression result, and indicated that there is a significant and positive correlation between types
of reward and employee performance. Therefore, Cooperative Bank of Oromia should focus on
enhancing its reward system. This could involve ensuring competitive base pay, offering
attractive benefits, implementing recognition programs, improving working conditions, and
providing opportunities for career development to its employees. By doing so, the bank can
motivate its workforce and optimize their performance, leading to the success and growth of the
organization
