The Relationship between Rewards System and Employee Engagement: A Case Study of Commercial Bank of Ethiopia – Credit Management

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Addis Ababa University


Rewards system and employee engagement is the hot issues for today’s management. Employee’s motivation has been in discussion for years, different compensation plans and strategies were adopted over years to make employees more productive. Recently, the introduction of employee engagement as a new construct to business, management, and human resource management fields make it an imperative to adopt in organizational settings. Many studies made indirect link between reward system and employee engagement. Moreover, reward elements expressed in terms of Intrinsic and Extrinsic are often considered a useful tool for employee engagement. But very few studies investigated the direct relationship between the two. This study tried to investigate the relationship between Rewards system and employee engagement. Moreover, the study also examined the impact of intrinsic and extrinsic rewards on employee engagement. In order to fulfill the research purpose, quantitative study was adopted. Questionnaires were designed using 5 point likert scale. 110 questionnaires were collected from employees of Commercial Bank of Ethiopia – Credit Management staffs. Subsequent to this SPSS was used to perform the required test of descriptive statistics, reliability analysis, bivariate correlation, ANOVA test and multiple regression analysis. The results of SPSS revealed that strong agreement of respondents to positive relationship between intrinsic rewards and employee engagement, and extrinsic rewards and employee engagement. Four intrinsic elements namely interesting work, job appreciation, Job satisfaction v | and stress, and four extrinsic elements namely job security, attractive Salary, promotion & growth and recognition were considered crucial by respondents for engagement. Finally, from the findings it is concluded that there is positive relationship between intrinsic rewards and employee engagement, and extrinsic rewards and employee engagement. Furthermore, it is also resulted that intrinsic rewards has strong positive impact on employee engagement than extrinsic rewards among credit management staffs. In addition to this, it is also concluded that the relationship and impact of intrinsic rewards was stronger on employee engagement as compared to extrinsic rewards. The study will enrich the current literature of rewards system and employee engagement. On practical level this study will not only help practitioners and consultants but also bank management will also be equipped with useful information regarding reward system and employee engagement in organizational settings.



Human Resource