The Effect of Reward System on Employee‘s Performance: A Study on Selected Branches of Cooperative Bank of Oromia

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