Effects of reward system on employee performance in Ethiopian airlines

Abstract

In today’s aviation industry motivated and well performer employees are mandatory to survive intense global competition. Realizing this, the main aim of this research is to identify the effect of reward system on employee’s performance in the case of Ethiopian airlines with the reward dimensions of base pay/salary, performance based bonus, benefits, recognition, work condition and career development. The study used qualitative and quantitative approach based on primary and secondary data sources. A self-administered questionnaire was designed to collect relevant information from a sample of 303 participants. Out of this 287 were collected from pilots and hostesses. The collected data was analyzed by SPSS version 20. Results from descriptive analysis showed that base pay/salary, career development and benefits were found most or strong determinate factor that able to affect employee’s performance as well as their motivation in Ethiopian airline. Results from inferential analysis particularly from Pearson’s Product Moment Correlation Coefficient showed that there is statistically significant relationship exist between all variables of rewards and employee performance. The strongly correlated variables were identified. Thus are base payment (r=.727**, p<0.05), benefit (r=.426*, p<0.01) and career development(r= .749**). From an open ended analysis the policy and procedure issues and management treatment were poor in implementation as well as treatment. Since the relation between reward, motivation and performance are interlinked in Ethiopian airline exist the management of Ethiopian airline should clearly state well-articulated reward policy by involving employees in the process of developing it in order to increase the employee’s motivations as well as performance to achieve its own goal