JETIR1808226

© 2018 JETIR August 2018, Volume 5, Issue 8 www.jetir.
org (ISSN-2349-5162)
The Effect of Reward Management on Employee

Motivation
(The Case study of Commercial Bank of Ethiopia, Harar
City)
*T.Ashokkumara, Senait Moges Tegegn b, , Hunde Kebede b
a
Department of Mechanical Engineering, Institute of Technology, Haramya University, P.O Box 138, Dire Dawa, Ethiopia.
b
Department of Business and Leadership, Leadstar University College, Addis Ababa, Ethiopia
Abstract: Organizations result is highly dependent on employees work motivation. This is; therefore, the purpose of the study is to
investigate how well implementation of the current reward management system of commercial Bank of Ethiopia (CBE) generates
employees’ motivation in general. This study was focused on six dimensions of employee motivational factors (payment, benefit,
Recognition, working condition, promotion and leadership/supervision) in CBE Harar City six branches. The total population of the
study was cover 162 long term experienced with customers from this 85 samples size were taken because of saving cost and time. The
data was processed the data (both primary and secondary) manually. The processing stage was involved editing, classification, coding,
transcription and tabulation. In the analysis of data, descriptive analysis was employed to determine the currently reward system
employed in commercial banks. It was based on the relationship of rewards and the performance commercial banks. The use of computer
employed SPSS (Statistical Package for Social Scientist) was used for this purpose. After being analysed was
presented inform of tables, graphs and bar chart. The author had thrown the questionnaire comprising 30 different statements on the six
titles salary and benefits, work environment, relationship with immediate supervisor, promotion, recognition and extra efforts with CBE
Harar branches. The results of the study imply that there are six major factors that have unsatisfied by the CBE employees. Those are
impartial of immediate supervisor, salary, salary comparison with other organization, staff loan system, promotion system and special
recognition by team management. Remaining twenty-four factors were satisfied by the respondents.
Key words: Reward Management, Commercial Bank of Ethiopia, Motivation, Recognition
1. INTRODUCTION
Organizations result is highly dependent on employees work motivation. This is; therefore, the purpose of the study is to investigate how
well implementation of the current reward management system of commercial Bank Ethiopia generates employees‟ motivation in general.
Reward has been defined in various ways by different scholars. According to Jeffery Gold (2010) reward refers to all forms of financial
returns and tangible services and benefits employees receive as part of an employment relationship. According to Armstrong and Hellion
(2016) reward policies provide guidelines for the implementation of reward strategies and design and management of reward process. They
will be influenced strongly by the guiding principles and reward philosophy of the organization. The reward policies will be concerned with
the level of rewards, the relative importance attached to market rates and equity, attraction and retention of employees, the match between
rewards and business performance, total reward policy, the need to communicate reward policies to employees and transparency. D. White
and David A.,B., (1986), stresses on the role and purpose of the reward system by stated as “in most situations, it is better to use rewards not
as a bribe for doing what the leader wants, but rather to reinforce desirable behaviour after it has already occurred”. G.Mujtaba,B. (2016)
have showed, the existence of an increasingly demand on corporations to develop reward programs that are motivating employees to work
harder and faster. These programs usually educate and encourage associates to become more productive, efficient and valuable individuals in
the company. However, due to the pressures related to performance and incentives or in effective implementation procedures, in some cases,
these programs can encourage unethical behaviours. Thus, firms need to have appropriate pay systems that encourage and reward employees
to always stay focused on their efforts in an efficient manner and to always do the right thing. At the meantime, managers and entrepreneurs
should be moving toward greater alignment between performance management and company strategies, values, and quality measures. Thus,
reward should be linked with goal setting, employee development, competency measures, and team performance. The researchers also noted
that, an effective reward system could have the power that affects the morale and productivity of each individual. According to Armstrong &
Stephens (2015) total reward can be used as a means of influencing behaviour, enhancing employment relationship, flexibility to meet
individual needs and winning the war for talent. Companies that want to foster high performance work system will reward employees based
on their performance. Hence, the reward is utilized as a means of influencing behaviour. These are types of rewards given in the form of
monetary pay that may be given directly or indirectly to employees. The direct form of payment incorporates base pay/ salary, merit pay/cost
of living adjustments, incentives, bonuses, etc that are directly given to employees (Milkovich et al, 2016). On the other hand, indirect form
of payments is provided in the form of employee benefits such as pensions, holidays, and varied fringe benefits such as medical cost
coverage, cafeteria benefit, etc. They are also known as transactional rewards. Base pay is the core payment made by the employer for work
performed and usually tends to reflect the organizational value of either the work that the employee undertakes or the value of skill and
competency who is undertaking the work. It is directly related to time and the rate is calculated in terms of number of hours, week or month
that the employee performed the task given (Richard Thorpe and Gill Homan, 2000). Contingent/merit pay are given as increments to the
base pay in recognition to the past work behaviour of an employee. The pay adjustment may also be done based on changes in what other
employers are paying for the same work, change in the overall cost of living, or change in experience or skill. Merit pay programs evaluate
past performance of individual and then decide on the size of the increase (Milkovich et al, 2016). According to the expectancy theory,
which is discussed under section below, individual needs and wants vary. Therefore, reward management requires proper composition
between financial and non-financial rewards. As stated in Chapman and Kelliher (2017) the owners of organization usually want to ascertain
JETIR1808226 Journal of Emerging Technologies and Innovative Research (JETIR) www.jetir.org 544
© 2018 JETIR August 2018, Volume 5, Issue 8 www.jetir.org (ISSN-2349-5162)
that employees direct their work effort in line with the owners‟ best interests. Torrington, Hall, and Taylor (2009) suggest the following four
points as important part of conventional wisdom in designing reward system. The first one is younger employees are more interested in high
direct earnings at the expense of indirect benefits, such as pensions, which will be of more interest to older employees. Second, incentive, or
performance-related payment arrangements are likely to interest employees who either see a reliable prospect of enhancing earnings through
the ability to control their own activities, or see the incentive scheme as an opportunity to wrest control of their personal activities away from
management by regulating their earnings. Third, women with children are less interested in payment arrangements that depend on overtime
than men often are. And the fourth is overtime is used by many employees to produce an acceptable level of purchasing power particularly
among the lower-paid. In fact, there is no conventional wisdom. Preferences differ according to the value, norms, background, economic
status etc of individuals. Despite this fact, Bowen (2016) argues that rewards for entry level employees, usually youngsters, need be more
cash based whereas employees with longer service or higher in the compensation scheme may be influenced by cash equivalent or non-cash
rewards such as education, extra-time off and the like. All of the above points suggest that there should be both financial and non-financial
rewards so as to reward employees according to their needs and values. Job performance may be taken as a function of the capacity to
perform, the opportunity to perform, and the willingness to perform. No combination of capacity and opportunity will result in high
performance in the absence of some level of motivation or willingness to perform. (Nelson, 2016). The three basic motivating needs of
McClelland that are associated with learning concepts are: the needs for achievement, the need for affiliation, and the need for power. The
main subject of McClelland‟s theory is that these needs are learned through coping with one‟s environment. Since needs are learned,
behaviour which is rewarded tends to recur at a higher frequency. As a result of the learning process, individuals develop unique
configurations of needs that affect their behaviour and performance (Agarwal, 1982). Expectancy: It refers to the individual‟s belief
regarding the probability that a particular behavior will be followed by a particular outcome. Managers, can use the concepts and principles
of expectancy theory to improve performance. It is important to acquire an understanding of the outcomes preferred by employees. Managers
should listen, talk and observe employee responses towards the rewards given by the organization such as compensation, incentives,
promotions, praise, gift certificates, and time off. Because needs and goals regularly change, employees need today is probably different
tomorrow. (Poter et.al 2016). Therefore, organizations result is highly dependent on employees work motivation. This is; therefore, the
purpose of the study is to investigate how well implementation of the current reward management system of commercial Bank of Ethiopia
(CBE) generates employees‟ motivation in general.
2. EXPERIMENTAL STUDY
This part presents the methodology that was used to carry out this study it includes the research design, population studies and sampling
strategy, the data collection process, the instruments used for gathering data, and how data were analysed and presented.
2.1 Research Design
This research was conduct to assess reward and employee motivation practice of CBE and recommend the best reward tool that is preferred
by Commercial Bank of Ethiopia. To accomplish the specified objectives cross sectional based data solicitation was used. Consequently, data
required for the purpose of the study was gather from different sources.
2.2 Research framework
After careful study of literatures review, the conceptual model formulated to illustrate relationship between employee motivation and reward
program. In this study, employees‟ motivation was taken as dependent variable while financial and non-financial rewards were taken as
independent variables. Within financial reward variables: payment and benefits variables included. While in the non-financial reward tools:
recognition, working condition, promotion and leadership/supervision included.
2.3 Population of the Study
The population for this study was taken from Commercial Bank of Ethiopia. Since the Bank has manageable number of employees, all who
served the organization for more than a year included in the data collection process. According to Jan. 2017 Commercial Bank of Ethiopia
Human Resource data, the total numbers of employees is 162 and strata i.e. Manager, CSM, SCSO,CSO and Others. It is to be believed that
employees who work in an organization for less than one year will not have a full picture to measure the reward package of that given
organization. Even literatures support that to fully understand and evaluate a given organization, employee‟s needs to have more than a year
experience. They also added that to clearly adapt with the environment, a minimum of six month is a must. Hence, considering this and other
related facts, the research didn‟t encompass staffs who served the organization less than a year and the total numbers of respondents were 85,
only those who served the organization for more than a year.
2.4 Sampling Design
For selecting the sampling units – regarding questionnaire respondents – the researcher was used census frame. According to the data
gained from the exchange, respondents were diversified in terms of educational qualification, job‟s variety and other parameters. The
perception of job satisfaction issue like reward practice was expected to be varied accordingly. Thus, the researcher classifies the
respondents while making analysis to clearly identify the major reward and motivation factors of employees based on demographic factors
that are domestic exchange customer service officer, manager, international or foreign exchange and so on. This study was used a
simplified formula provided by Yamane (1967) to determine the required sample size at 95% confidence level and with 0.075% level of
precision. The total population of the study was cover 162 long term experienced with customers from this 85 samples size was taken
because of saving cost and time.
Formula
N 162
n= n= ___________ (1)
1  Ne 2 1  162 ( 0 . 075 ) 2
The calculated value of sample size (n) = 85
Where n = sample size,
 N = Population size
 e = Level of precision
 The selected population and sample numbers at various levels are listed in table 1. The sample sizes of each level employment were
calculated by formula 1.
Table 1 Target Population and Sample
Category Commercial Banks in Harar City Total Sample

Harar Jenala Shenkor Abadir Aboker Jegol Population Number
Manager 1 1 1 1 1 1 6 3
CSM 5 2 2 2 2 2 15 8
SCSO 3 3 3 3 3 3 18 9
CSO 44 10 8 4 12 15 93 49
Others 10 4 3 2 5 6 30 16
Tota l 63 20 17 12 23 27 162 85
2.5 Data Collection Methods
2.5.1 Primary Data
Primary data refers to the data that are original and not yet published which are always called fresh data that one collects directly from the
field. Primary data was collected using the following methods and tools. A questionnaire is a research instrument consisting of a series of
questions and other prompts for the purpose of gathering information from respondents (Foddy, 1994). Questionnaire was used because it
manages to collect information from a large
number of people in a short period of time and in a relatively cost effective way. This
tool gives room and freedom of expression to the respondents that they expecting to
get more information to capture important themes of the study on the impact of
rewards on organization performance. The questionnaire was used to collect data
from CBE employees, to get the impact of rewards on organization
performance. The study questionnaire was divided into two parts. Part I consist of demographic questions; Part II questions on salary and
benefits, work environment, relationship with immediate supervisor, promotion, recognition, extra effort. A Likert Scale of five levels
(strongly disagree, disagree, neutral, agree and strongly agree) was adopted. An interview is a conversation between two or more people
where questions are
asked by interviewer to elicit facts or statements from the interviewee (Seidman,1998). This method gives the researcher the freedom to
probe the interview to elaborate or to follow a new line of inquiry introduced by what the interviewee is
saying. These interviews allowed the researcher to clarify ambiguous answers and
when appropriate, seek follow-up information. It was easily enable the researcher to
capture important themes on the impact of rewards on organization performance.
This method was applied to collect data from key informant such as management
officers and human resource officers, as allowed to express their views and feeling
on the impact of rewards both financial and non-financial rewards to organization
performance. Then the relationship between rewards and organization performance
was deeply discussed. It was applied in this research as it gives more room to
respondents to explain concerning the impact of rewards in organization performance.
2.5.2 Secondary Data
Secondary data on the other hand refers to data that have been collected that can be
published or unpublished but are already exists. It was clearly collected through
the following method. It is the analysis of different documents to get information related to important themes from various materials in
libraries and online source. From this method, the researcher was reviewed different documents related to rewards on
organization performance.
2.6 Data Analysis
The data was processed the data (both primary and secondary) manually. The
processing stage was involved editing, classification, coding, transcription and
tabulation. In the analysis of data, descriptive analysis was employed to determine
the currently reward system employed in commercial bank. The use of computer employed SPSS (Statistical Package for Social Scientist)
was used for this purpose. After being analysed was presented inform of tables, graphs and bar chart. That was clearly indicated with
important variables from the major study themes related to the impact of rewards on
organization performance.
2.7 Research Ethics

The researcher was obtained the consent of the organization for the study. Employees who have completed the questionnaire was informed
about the purpose of data collection, analysis and the covenant to maintain privacy of their responses. Participants were informed about the
purpose of the study and their privacy and dignity also maintained. Confidential information of the bank was not disclosing and the collected
data were used for the purposes of the study only. Regarding published and unpublished materials used in the literature review and
throughout all part of the study, all citations from copy right holder was made properly.
3. RESULTS AND DISCUSSION

This research studies whether or not a reward system helps generate employee motivation in CBE at Harar City. More specifically it aims to
reveal what reward system would be best suited for the CBE in question and how to increase employee motivation and satisfaction. The
sample size of this study was limited to 85 due to the fact that the author wanted to focus only on the branches in Harar city. The 85
individuals answered the questionnaire which gives a response rate of 100 %. The main findings through the questionnaire of this study will
be discussed in this chapter.
3.1 Demographic Data
This study‟s demographic data focused on the respondents‟ gender, age, educational qualification, work experience and job title of CBE
branches in Harar city. The findings are represented in the following tables and graphs.
Gender of Respondents
The details of gender are given in Table 2 and graphically represented in Figure 1. The % of Female and Male respondent were 35.3 % and
64.7 % respectively. The participation of Male respondents are more than Female respondents.
Table 2: Gender of respondents
Gender Frequency Percent Cumulative

Percent
Female 30 35.3 35.3
Male 55 64.7 100.0

Total 85 100.0
Figuer 1: Gender of respondent
Classification of age of the respondents
Table 3: Age of respondents
Age Frequency Percent Cumulative Percent
21-25 20 23.5 23.5

26-35 58 68.2 91.8
36-45 7 8.2 100.0
Total 85 100.0
The age of the respondents were classified between 21 and 25, 26 and 35 and 36 and 45, which are listed in Table 3 and graphically
represented in Figure 2. The % of the age between 21 and 25 was 23.5%, between 26 and 35 was 68.2% and between 36 and 45 was 8.2%.
The majarity of the respondents were below 35 years, ie 91.8%.
Figuer 2: Age of respondent
Education Qualifaction of respondent
Table 4: Education Qualification of respondents

Education Frequency Percent Cumulative
Qualification Percent
BA Degree 83 97.6 97.6
MBA 2 2.4 100.0
Total 85 100.0
The educational qualifications of the respondents are given in Table 4 graphically illustrated in Figure 3. Among the respondents 97.5%
were B A degree and 2.4% only the M B A degree.
Figuer 3: Education Qualifaction of Respondent
Work Experience of respondents

Work experience are grouped between 1 and 3 years, 4 and 6 years, 7 and 9 years and above 9 years are listed in Table 5 and graphically
represented in Figure 4 which were 43.5%, 31.8 %, 12,9%, 11.8 % respectively.
Table 5 : Work Experience of respondents

Work Experience Frequency Percent Cumulative
in year Percent
1-3 37 43.5 43.5
4-6 27 31.8 75.3
7-9 11 12.9 88.2
>9 10 11.8 100.0
Total 85 100.0
Figuer 4: Work Experience of respondent
Job Title of respondents

The % of the classification of job titles are given in Table 6 and graphically described in Figure 5. The % of Manager respondents were 3.5
%, Customer Service Manager were 9.4%, Senior Customer Service Officer (SCSO) were 10.6 %, Customer Service Officer (CSO) were
57.6% and other respondents were 18.8%
Table 6: Job Title of respondents

Job Title Frequency Percent Cumulative
Percent
Manager 3 3.5 3.5
Customer Service Manager (CSM) 8 9.4 12.9
Senior Customer Service Officer
9 10.6 23.5
(SCSO)
Customer Service Officer (CSO) 49 57.6 81.2
Others 16 18.8 100.0
Total 85 100.0
Figure 5: Job Title of respondents
3.2 Level of Satisfaction of Salary and Benefits
This part of the questionnaire measured the level of satisfaction of salary and benefits which comprises of four questions. The respondents
were chosen on a scale from one to five, how much a specific benefit motivated them. The results are shown in the tables below.
I am satisfied with my salary
Table 7 shows that 30.6 % of respondents were strongly disagreed with salary
given by their banks, 34.1 % were disagreed,27.1 % were normally agreed, 7.1% were agreed and 1.2%were strongly agreed. These results
revealed that the majority (64.7%) of respondents were not satisfied with the salary being given by the commercial bank of Ethiopia.
Table 7 I am satisfied with my salary
Level of Number % of Cumulative

satisfaction Respondent Respondent %
Strongly 26 30.6 30.6
Disagree
Disagree 29 34.1 64.7
Normal 23 27.1 91.8
Agree 6 7.1 98.8
Strongly 1 1.2 100.0

Agree
Total 85 100.0
Table 8 indicates that 28.2 % of respondents werestrongly disagreed with salary

given by their banks, 48.2 % were disagreed, 15.3 % were normally agreed, 7.1% were agreed and 1.2%were strongly agreed. These results
revealed that the majority (76.5%) of respondents were not satisfied with the salary being given by the commercial bank of Ethiopia
comparatively with similar organization.
Table 8 The bank pays competitive salary compared with similar
organizations

Strongly 24 28.2 28.2
Disagree
Disagree 41 48.2 76.5
Normal 13 15.3 91.8

Agree 6 7.1 98.8
Agree
Total 85 100.0
The staff loan system is sufficient
Table 9 specifies that 28.2 % of respondents were strongly disagreed with salary
given by their banks, 45.9 % were disagreed, 15.3 % were normally agreed, 7.1 % were agreed and 3.5%were strongly agreed. These results
revealed that the majority (74.1 %) of respondents were not satisfied with the staff loan system presently in the commercial bank of Ethiopia.
Table 9 The staff loan system is sufficient
Number % of
Level of satisfaction Respondent Respondent Cumulative %
Strongly Disagree 24 28.2 28.2
Disagree 39 45.9 74.1
Normal 13 15.3 89.4

Agree 6 7.1 96.5
Strongly Agree 3 3.5 100.0
Total 85 100.0
Training given to me by the bank is helped me to carry out my job effectively.
Table 10 designates that 7.1 % of respondents were strongly disagreed with salary
given by their banks, 16.5 % were disagreed, 29.4 % were normally agreed, 36.5 % were agreed and 10.6 %were strongly agreed. These
results revealed that the majority (76.5 %) of respondents were satisfied with the training being given by the commercial bank of Ethiopia.
Table 10 Training given to me by the bank is helped me to carry out my job

effectively
Level of Number % of
satisfaction Respondent Respondent Cumulative %
Strongly 6 7.1 7.1
Disagree
Disagree 14 16.5 23.5
Normal 25 29.4 52.9

Agree 31 36.5 89.4
Total 85 100.0
3.3 Work Environment

This part of the questionnaire measured the condition of work environment in the CBE, Harar branches and brought out the level of
satisfaction of the respondents by using four questions. The respondents were chosen on a scale from one to five, how much this
environment motivated them. The results are brought in the tables below.
Adequate office equipment’s are available to discharge my duties.
Table 11 points out that 12.9 % of respondents were strongly disagreed with salary
given by their banks, 24.7 % were disagreed, 37.6 % were normally agreed, 23.5 % were agreed and 1.2%were strongly agreed. These
results revealed that the majority (62.4 %) of respondents were satisfied with the adequate office equipment`s availability in the
commercial bank of Ethiopia
Table 11 Adequate office equipment`s available to discharge my

duties

Strongly 11 12.9 12.9
Disagree
Disagree 21 24.7 37.6
Normal 32 37.6 75.3
Agree 20 23.5 98.8

Agree
Total 85 100.0
I have smooth relationship with co-workers.
Table 12 signposts that 1.2 % of respondents were strongly disagreed with salary
given by their banks, 3.5 % were disagreed, 30.6 % were normally agreed, 41.2 % were agreed and 1.2%were strongly agreed. These results
revealed that the majority (95.3 %) of respondents were satisfied the smooth relationship with co-workers in the commercial bank of
Ethiopia.
Table 12 I have smooth relationship with co-workers

Strongly 1 1.2 1.2
Disagree
Disagree 3 3.5 4.7
Normal 26 30.6 35.3
Agree 35 41.2 76.5
Strongly 20 23.5 100.0
Agree
Total 85 100.0
There is sufficient space in my work place.
Table 13 exhibits that 11.8 % of respondents were strongly disagreed with salary
given by their banks, 12.9 % were disagreed, 38.8 % were normally agreed, 31.8% were agreed and 4.7 %were strongly agreed. These
results revealed that the majority (75.3 %) of respondents were satisfied with the sufficient space in their work place in the commercial bank
of Ethiopia.
Table 13 There is sufficient space in my work place

satisfaction Respondent Respondent Percent
Strongly 10 11.8 11.8
Disagree
Disagree 11 12.9 24.7
Normal 33 38.8 63.5
Agree 27 31.8 95.3
Total 85 100.0
I have access to the things I need to do my job well.
given by their banks, 17.6 % were disagreed, 36.5 % were normally agreed, 32.9 % were agreed and 7.1 %were strongly agreed. T hese
results revealed that the majority (76.5 %) of respondents were satisfied with the freedom „access to the things need to do the job well„ in
the commercial bank of Ethiopia.
Table 14 I have access to the things I need to do my job well

Strongly 5 5.9 5.9
Disagree
Disagree 15 17.6 23.5
Normal 31 36.5 60.0

Agree 28 32.9 92.9
Total 85 100.0
3.4 Relationship with Immediate Supervisor

This part of the questionnaire measured the relationship of the respondent with their immediate supervisor was calibrated by six questions.
Here also the respondents were chosen on a scale from one to five, how the relationship between the respondent and supervisor gives
benefits to the CBE, Harar branches. The results are enlightened in the tables below.
My immediate supervisor is willing to solve problems.
Table 15 reveals that 2.4 % of respondents were strongly disagreed with salary
results revealed that the majority (81.2 %) of respondents were satisfied with willingness of immediate supervisor to solve problems in the
commercial bank of Ethiopia.
Table 15 My immediate supervisor is willing to solve problems

Strongly 2 2.4 2.4
Disagree
Disagree 14 16.5 18.8
Normal 28 32.9 51.8
Agree 30 35.3 87.1
Strongly 11 12.9 100.0
Agree
Total 85 100.0
I have a good working relation with my immediate supervisor
Table 16 indicates that 2.4 % of respondents were strongly disagreed with salary
given by their banks, 4.7 % were disagreed, 40 % were normally agreed, 34.1% were agree and 18.8 %were strongly agreed. These results
revealed that the majority (92.9%) of respondents were satisfied with good working relation with their immediate supervisor in the
Table 16 I have a good working relation with my immediate
supervisor

Strongly 2 2.4 2.4
Disagree
Disagree 4 4.7 7.1
Normal 34 40.0 47.1
Agree 29 34.1 81.2
Strongly 16 18.8 100.0
Agree
Total 85 100.0
My immediate supervisor recognizes my contribution
given by their banks, 8.2 % were disagreed, 40 % were normally agreed, 37.6 % were agreed and 10.6%were strongly agreed. These results
revealed that the majority (88.2%) of respondents were satisfied with the statement of immediate supervisor recognizes their contribution in
Table 17 My immediate supervisor recognizes my contribution

Strongly 3 3.5 3.5
Disagree
Disagree 7 8.2 11.8
Normal 34 40.0 51.8
Agree 32 37.6 89.4
Strongly 9 10.6 100.0
Agree
Total 85 100.0
Immediate supervisor is impartial
results revealed that the majority (80 %) of respondents were not satisfied with the impartial behaviour of immediate supervisor in the
commercial bank of Ethiopia
Table 18 Immediate supervisor is impartial

Level of Number
satisfaction Respondent % of Respondent Cumulative %
Strongly 6 7.1 7.1
Disagree
Disagree 11 12.9 20.0
Normal 37 43.5 63.5
Agree 22 25.9 89.4
Strongly 9 10.6 100.0
Agree
Total 85 100.0
My immediate supervisor gives me sufficient guidance and useful feedback in relation to my job.
given by their banks, 7.1 % were disagreed, 40 % were normally agreed, 35.3 % were agreed and 11.8 %were strongly agreed. These results
revealed that the majority (87.1%) of respondents were satisfied with immediate supervisor gives them sufficient guidance and useful
feedback in relation to their job in the commercial bank of Ethiopia.
Table 19 My immediate supervisor gives me sufficient guidance and useful

feedback in relation to my job
Level of Number
Strongly 5 5.9 5.9
Disagree
Disagree 6 7.1 12.9
Normal 34 40.0 52.9
Agree 30 35.3 88.2
Strongly 10 11.8 100.0
Agree
Total 85 100.0
My manager is a great role model for employees.
Table 20 directs that 9.4 % of respondents were strongly disagreed with salary
given by their banks, 9.4 % were disagreed, 27.1 % were normally agreed 36.5 % were agreed and 17.6 %were strongly agreed. These
results revealed that the majority (81.2%) of respondents were satisfied with the statement of their manager is a great role model for the
employees in the commercial bank of Ethiopia.
Table 20 My manager is a great role model for employees

Level of Number
Strongly 8 9.4 9.4
Disagree
Disagree 8 9.4 18.8
Normal 23 27.1 45.9
Agree 31 36.5 82.4
Strongly 15 17.6 100.0
Agree
Total 85 100.0
3.5 Promotion
This part of the questionnaire measured the level of satisfaction of the promotion provided by the CBE was studied by using five questions.
The respondents were chosen on a scale from one to five, how much the promotions attracted by the respondents. The results are given in
the tables below.
I am satisfied with promotion system
given by their banks, 31.8% were disagreed, 23.5 % were normally agreed, 16.5 % were agreed and 5.9 %were strongly agreed. These
results revealed that the majority (54.1 %) of respondents were not satisfied with the existing promotion system in the commercial bank of
Ethiopia
Table 21 I am satisfied with promotion system

Strongly 19 22.4 22.4
Disagree
Disagree 27 31.8 54.1
Normal 20 23.5 77.6
Agree 14 16.5 94.1
Total 85 100.0
There is job promotion opportunity in the bank
results revealed that the majority (81.2%) of respondents were satisfied with the job promotion opportunity in the commercial bank of
Ethiopia
Table 22 There is job promotion opportunity in the bank

Strongly 5 5.9 5.9
Disagree
Disagree 11 12.9 18.8
Normal 30 35.3 54.1
Agree 35 41.2 95.3
Total 85 100.0
Promotion is based on individual’s performance and ability.

results revealed that the majority (54.1 %) of respondents were satisfied with the statement „Promotion is based on individual’s
performance and ability’ in the commercial bank of Ethiopia.
Table 23 Promotion is based on individual’s performance and ability

Strongly 14 16.5 16.5
Disagree
Disagree 25 29.4 45.9
Normal 20 23.5 69.4
Agree 19 22.4 91.8
Total 85 100.0
I receive vacancy post announcements timely for applying higher post.
given by their banks, 10.6 % were disagreed, 40 % were normally agreed,31.8 % were agreed and 10.6 %were strongly agreed. These results
revealed that the majority (82.4 %) of respondents were satisfied with the vacancy post announcements timely for applying higher pos by
Table 24 I receive vacancy post announcements timely for applying

higher post
Level of % of
satisfaction Frequency Respondent Cumulative %
Strongly 6 7.1 7.1
Disagree
Disagree 9 10.6 17.6
Normal 34 40.0 57.6
Agree 27 31.8 89.4
Strongly 9 10.6 100.0
Agree
Total 85 100.0
The selection of employee for promotion have made transparently
given by their banks, 27.1 % were disagreed, 30.6 % were normally agreed,15.3 % were agreed and 5.9 %were strongly agreed. These
results revealed that the majority (51.8 %) of respondents were satisfied with the statement of „selection of employee for promotion have
made transparently in the commercial bank of Ethiopia
Table 25 The selection of employee for promotion have made transparently

Strongly 18 21.2 21.2
Disagree
Disagree 23 27.1 48.2
Normal 26 30.6 78.8
Agree 13 15.3 94.1
Agree
Total 85 100.0
3.6 Recognition
This part of the questionnaire measured how the CBE recognizes the employee‟s innovative ideas, individual accomplishments,
contributions and achievements by the aid of seven questions. The respondents were chosen on a scale from one to five. The results are
illustrated in the tables below.
My innovative ideas have been accepted and implemented by my managers/supervisors
results revealed that the majority (70.6 %) of respondents were satisfied with the statement of „innovative ideas have been accepted and
implemented by their manager/supervisors’ in the commercial bank of Ethiopia
Table 26 My innovative ideas have been accepted and implemented

by my manager/supervisors

Disagree
Disagree 16 18.8 29.4
Normal 37 43.5 72.9
Agree 16 18.8 91.8
Agree
Total 85 100.0
I am receiving recognition for my individual accomplishments

given by their banks, 17.6 % were disagreed, 44.3 % were normally agreed, 20 % were agreed and 8.2%were strongly agreed. These results
revealed that the majority (72.9 %) of respondents were satisfied with the recognition received for their individual accomplishment in the
Table 27 I am receiving recognition for my individual

accomplishment

Strongly 8 9.4 9.4
Disagree
Disagree 15 17.6 27.1
Normal 38 44.7 71.8
Agree 17 20.0 91.8

Agree
Total 85 100.0
I am receiving formal recognition for my contributions/achievements
given by their banks, 22.4 % were disagreed, 32.9 % were normally agreed, 23.5% were agreed and5.9 %were strongly agreed. These results
revealed that the majority (62.4%) of respondents were satisfied for receiving formal recognition for their contribution by the commercial
bank of Ethiopia
Table 28 I am receiving formal recognition for my contribution

Strongly 13 15.3 15.3
Disagree
Disagree 19 22.4 37.6
Normal 28 32.9 70.6
Agree 20 23.5 94.1
Agree
Total 85 100.0
I am receiving informal recognition for my contributions /achievements
Table 29 designates that 11.8 % of respondents were strongly disagreed with salary
given by their banks, 20 % were disagreed, 40 % were normally agreed, 22.4 % were agreed, 5.9 % were strongly agreed. These results
revealed that the majority (68.2%) of respondents were satisfied for receiving informal recognition for their contribution/achievements
by the Commercial Bank of Ethiopia.
Table 29 I am receiving informal recognition for my

contribution/achievements

Strongly 10 11.8 11.8
Disagree
Disagree 17 20.0 31.8
Normal 34 40.0 71.8
Agree 19 22.4 94.1
Agree
Total 85 100.0
I am rewarded with special recognition by team management at team meetings
Table 30 describes that 21.2 % of respondents were strongly disagreed with salary
results revealed that the majority (51.8 %) of respondents were not satisfied on rewarded with special recognition by team management
at team meetings in the Commercial Bank of Ethiopia.
Table 30 I am rewarded with special recognition by team management at

team meetings
Strongly 18 21.2 21.2
Disagree
Disagree 26 30.6 51.8
Normal 25 29.4 81.2
Agree 11 12.9 94.1
Agree
Total 85 100.0
Is CBE formal recognition events increase the motivation value of a recognition program?
results revealed that the majority (69.9%) of respondents were given the satisfied answer for the question „Is CBE formal recognition
events increase the motivation value of a recognition program?’ in the commercial bank of Ethiopia
Table 31 Is CBE formal recognition events increase the motivation value of

a recognition program
satisfaction Respondent Respondent Cumulative %t
Strongly 13 15.3 15.3
Disagree
Disagree 16 18.8 34.1
Normal 30 35.3 69.4
Agree 21 24.7 94.1
Agree
Total 85 100.0
Informal recognition is equal importance as formal recognition events?
results revealed that the majority (52.9%) of respondents were satisfied weather the Informal recognition is equal importance as formal
recognition events by the commercial bank of Ethiopia.
Table 32 Informal recognition is equal importance as formal recognition

events
Strongly 12 14.1 14.1
Disagree
Disagree 28 32.9 47.1
Normal 25 29.4 76.5
Agree 16 18.8 95.3
Agree
Total 85 100.0
3.7 Extra Effort
This part of the questionnaire studied the level of the extra efforts put by the respondents to the development of the CBE by the help of four
questions. The respondents were chosen on a scale from one to five and exhibit their views. The results are listed in the tables below.
I feel inspired on my job
given by their banks, 12.9 % were disagreed, 32.9 % were normally agreed, 28.2 % were agreed and 20 %were strongly agreed. These
results revealed that the majority (81.2%) of respondents were satisfied and inspired on their job in the commercial bank of Ethiopia
Table 33 I feel inspired on my job

Strongly 5 5.9 5.9
Disagree
Disagree 11 12.9 18.8
Normal 28 32.9 51.8
Agree 24 28.2 80.0
Strongly 17 20.0 100.0
Agree
Total 85 100.0
I feel happy when I am working intensely
results revealed that the majority (84.7%) of respondents were satisfied and felt happy when they working intensely in the commercial
bank of Ethiopia
Table 34 I feel happy when i am working intensely

Strongly 6 7.1 7.1
Disagree
Disagree 7 8.2 15.3
Normal 30 35.3 50.6
Agree 26 30.6 81.2
Strongly 16 18.8 100.0
Agree
Total 85 100.0
I have courage to do tasks effectively
given by their banks, 9.4 % were disagreed, 28.2 % were normally agreed, 37.1% were agreed and 18.8 %were strongly agreed. These
results revealed that the majority (84.7%) of respondents were satisfied with the courage to do the tasks effectively in the commercial bank
of Ethiopia.
Table 35 I have courage to do tasks effectively

Strongly 5 5.9 5.9
Disagree
Disagree 8 9.4 15.3
Normal 24 28.2 43.5
Agree 32 37.6 81.2
Strongly 16 18.8 100.0
Agree
Total 85 100.0
I recommend others to join the Bank
Table36 shows that 10.6 % of respondents were strongly disagreed with salary
results revealed that the majority (82.4%) of respondents were sated their willingness to recommend others to join in the commercial bank
of Ethiopia
Table 36 I recommend others to join the bank

Disagree
Disagree 6 7.1 17.6
Normal 27 31.8 49.4
Agree 27 31.8 81.2
Strongly 16 18.8 100.0
Agree
Total 85 100.0
3.8 Findings of unsatisfied factors

In this study revealed six unsatisfied factors by the respondents in CBE which unsatisfied % are ranked and listed in order in table 37. 80%
of the respondent stated that they were unsatisfied with the statement „Immediate supervisor is impartial‟. 76 % of the respondents were not
satisfied their salary given by CBE with compared to other similar organization. The CBE employees were unsatisfied with the staff loan
system which is74.1%. 64.7% of the respondents were unsatisfied with the salary disbursed by CBE. 54.1% of respondents were unsatisfied
with the promotion system followed by the CBE. The statement „I am rewarded with special recognition by team management at team
meetings‟ was unsatisfied and it was rated by the un satisfaction level of 51.8 % . The ranking of questionnaire helpful to compare items to
each other in order of performance. In this section, an average ranking is calculated for each question rating, allowing to quickly evaluate the
most preferred satisfactory and unsatisfactory choice.
Table 37 Unsatisfied factors in order

Sl.No Factors % Unsatisfied Rank
1. Immediate supervisor is impartial 80 1
2. The Bank pays competitive salary compared with 76.5 2

similar organizations.
3. The staff loan system is sufficient 74.1 3
4. I am satisfied with my salary. 64.7 4
5. I am satisfied with promotion system 54.1 5
6. I am rewarded with special recognition by team 51.8 6
management at team meetings
3.9 Findings of Satisfactory factors

In this study identified twenty-four satisfied factors by the respondents in CBE which are ranked and listed in Table 38.
Table 38 Satisfied factors in order

SI.NO Factors % of Satisfied Rank
1 I have smooth relationship with co-workers 95.30% 1
2 I have a good working relation with my immediate 92.90% 2

supervisor
3 My immediate supervisor gives me sufficient 87.10% 3
guidance and useful feedback in relation to my job.
4 I feel happy when I am working intensely 84.70% 4.5
5 I have a courage to do tasks effectively 84.70% 4.5
6 I receive vacancy post announcements timely for 82.40% 6.5

applying higher post.
7 I recommend others to join the Bank 82.40% 6.5
8 My immediate supervisor recognizes my contribution 82.20% 8
9 My immediate supervisor is willing to solve 81.20% 10.5

problems
10 My manager is a great role model for employees 81.20% 10.5
11 There is job promotion opportunity in the bank 81.20% 10.5
12 I feel inspired on my job 81.20% 10.5
13 I have access to the things I need to do my job well. 76.50% 13.5
14 Training given to me by the bank is helped me to 76.50% 13.5

carry out my job effectively.
15 There is sufficient space in my work place. 75.30% 15
16 I am receiving recognition for my individual 72.90% 16

accomplishments
17 My innovative ideas have been accepted and 70.10% 17
implemented by my managers/supervisors
18 Is CBE formal recognition events increase the 69.90% 18

motivation value of a recognition program?
19 I am receiving informal recognition for my 68.20% 19
contributions /achievements
20 Adequate office equipment‟s are available to 62.40% 20.5
discharge my duties.
21 I am receiving formal recognition for my 62.40% 20.5
contributions/achievements
22 Promotion is based on individual‟s performance and 54.10% 22
ability.
23 Informal recognition is equal importance as formal 52.90% 23
recognition events?
24 The selection of employee for promotion have made 51.80% 24
transparently
4.CONCLUSIONS
The author had thrown the questionnaire comprising 30 different statements on the six titles salary and benefits, work environment,
relationship with immediate supervisor, promotion, recognition and Extra efforts with CBE Harar branches. The results of the study imply
that there are six major factors that have unsatisfied by the CBE employees. Those are impartial of immediate supervisor, salary, salary
comparison with other organization, staff loan system, promotion system and special recognition by team management. Remaining twenty-
four factors were satisfied by the respondents. The author made also the suggestion of paying out a percentage of the profit sharing according
to individual performance in order to better match the work effort of each individual. In order to keep the employees satisfied and interested
with their work tasks the author suggested
This study uncovered some areas of concern that require attention of various stakeholders in the commercial banks. Next are
recommendations to address those concerns. The author suggests that the CBE to impart special training to supervisor level to understand the
value of the smooth relationship with the subordinates. The research also revealed that the present salary level offered to employees of
commercial banks is very low and employees are not satisfied. This has led to low workers‟ motivation and employee turnover
The HRM department in conjunction with senior management and Trade unions
should revise the current salary scale in line with prevailing economic environment
and set an appropriate and competitive salary scale. Furthermore, suggest that the CBE has to be modified the staff loan system and
promotion system which are to be more benefitted to the CBE staff members. The CBE management has to frequently arranges the team
management meeting in order to recognize the achiever in the CBE. It will be motivating the staff members to work towards the
development and the great success of CBE. Demographic data indicates that only 2.4 % of master degree holders are working in the CBE,
when recruiting the staff CBE has to consider master degree holders. It will be strengthen the CBE furthermore.
This research examined the effort of reward systems on works enactment in commercial banks of Ethiopia. There is need for conducting
same study in cities and town in Ethiopia on variety of situations before generalization. Study was fundamentally quantitative and there is a
need of doing qualitative study to uncover the real reasons for low motivation in the banks and regulate proper reward systems in banking
sector. There is prerequisite also to observe the
importance employee‟s press on intrinsic and extrinsic rewards amongst bank employees.
REFERENCES
[1] Jeffery Gold (2016): Human Resource Management, Mahwah, New Jersy, 07430.
[2] Armstrong, M and Hellion M. (2016): Hand Book of Human Resource Management Practice (10thEd.). United Kingdom: Kogan Page
Limited.
[3] Armstrong, M. and Holien M. (2016): Reward Management, A hand book of Remuneration strategy and practice, Kogan Page Limited.
[4] Donald D white and David A B. (2017) Organizational Behavior; understanding andManaging people at work, London: Allemande
Bacon, INC.
[5] Mujtaba G, B.e. (2016). An Equitable Total Reward Approach to pay for performanceManagement. Journal of Management Policy and
Practice, vol.11(4).
[6] Armstrong, M., & Stephens, T. (2015)A Hand Book of Employee Reward Management and Practice. United Kingdom: Cogan Page
Limited
[7] Milkovich G.T, Newman J. M., and Ratnam C S V., 2016, Compensation, 9th edition, Tata McGraw Hill Education Private Limited
[8] Richard Thorpe and Gill Homan, 2000, Strategic Reward Systems, Pearson Educational Limited
[9] Chapman, J &Kelleher C. (2017)Influences on Reward Mix Determination: Reward Consultants' Perspectives. Employee Relations,
Volume 2 No. 33, 121-139
[10] Torrington, D., Hall, L., & Taylor, S. (2009), Human Resource Management, 7thedn. Pearson Education Limited.
[11] Bowen, R. B. (2015). Recognizing and Rewarding Employees, NewYork: McGraw-Hill Churchill,
[12] Nelson, L. (1996). Organizational Behavior Realities and Challenges, 2nd Ed
[13] Agarwal, R.D. (1982), Organization and Management, New Delhi, Tata McGraw-Hill Publishing Company Ltd
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[15] Foddy, W. H. (1994). Constructing Questions for Interviews and Questionnaires:
Theory and Practice in Social Research (New ed.). Cambridge, UK:
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© 2018 JETIR August 2018, Volume 5, Issue 8 www.jetir.

The Effect of Reward Management on Employee

Key words: Reward Management, Commercial Bank of Ethiopia, Motivation, Recognition

Category Commercial Banks in Harar City Total Sample

2.5 Data Collection Methods

2.5.1 Primary Data

2.5.2 Secondary Data

2.6 Data Analysis

2.7 Research Ethics

3. RESULTS AND DISCUSSION

Table 2: Gender of respondents

Gender Frequency Percent Cumulative

Female 30 35.3 35.3

Male 55 64.7 100.0

Figuer 1: Gender of respondent

Classification of age of the respondents

Table 3: Age of respondents

Age Frequency Percent Cumulative Percent

21-25 20 23.5 23.5

Figuer 2: Age of respondent

Education Qualifaction of respondent

Table 4: Education Qualification of respondents

Figuer 3: Education Qualifaction of Respondent

Work Experience of respondents

Table 5 : Work Experience of respondents

Figuer 4: Work Experience of respondent

Job Title of respondents

Table 6: Job Title of respondents

Figure 5: Job Title of respondents

3.2 Level of Satisfaction of Salary and Benefits

I am satisfied with my salary

Table 7 I am satisfied with my salary

Level of Number % of Cumulative

Strongly 1 1.2 100.0

Table 8 indicates that 28.2 % of respondents werestrongly disagreed with salary

Level of Number % of Cumulative

Disagree 41 48.2 76.5

Normal 13 15.3 91.8

The staff loan system is sufficient

Table 9 The staff loan system is sufficient

Disagree 39 45.9 74.1

Normal 13 15.3 89.4

Training given to me by the bank is helped me to carry out my job effectively.

Table 10 Training given to me by the bank is helped me to carry out my job

Disagree 14 16.5 23.5

Normal 25 29.4 52.9

3.3 Work Environment

Table 11 Adequate office equipment`s available to discharge my

Level of Number % of Cumulative

Agree 20 23.5 98.8

I have smooth relationship with co-workers.

Level of Number % of Cumulative

There is sufficient space in my work place.

Table 13 There is sufficient space in my work place

I have access to the things I need to do my job well.

Table 14 I have access to the things I need to do my job well

Normal 31 36.5 60.0

3.4 Relationship with Immediate Supervisor

Level of Number % of Cumulative

I have a good working relation with my immediate supervisor