Effect of Reward System on Employees Performance: the Mediating Role of Job Satisfaction
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Date
2020-01
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A.A.U
Abstract
Now a day’s firms are striving to achieve competitive advantage by using different strategic techniques. As a result of high competitive pressure, firms are making struggle to get competitive edge by utilizing workers talent, abilities and proficiency to formulate the accurate exploitation of employees’ works organization offer different benefits and reward schemes. Therefore, reward system played an important role for the success and implementation of philosophy of scientific management. The purpose of this paper was to examine the effect of reward systems on employee performance: a mediating role of job satisfaction in ethio telecom, Addis Ababa, Ethiopia. The research used Equity theory this theory is selected by the researcher because this theory was used to predict the effort, satisfaction, performance and retention of employees. Both primary and secondary data were used. Simple random sampling was used to solicit response from selected 357 respondents. A quantitative research design was adopted. This study used two sampling stages. The first on is to sample out the company’s (strata’s) from the organization and secondly a number of respondents within the selected divisions. Data were collected from the sample of 357 from four divisions in the company through standard questionnaire. Descriptive statistics, correlation, regression analysis and mediation analysis were used to analyze the data with the aid of SPSS version 20. And additionally Hayes process procedure model version 3.4 was used for computing and depicting the mediation analysis. The study finds that reward system has a mediating role on the relationship between predictors (Extrinsic and Intrinsic rewards) on employee performance. Results showed that, except Job promotion, all the other variables: payment, benefit, monetary bonus, empowerment and autonomy, appreciation and recognition were significant on the employee performance. Moreover, the finding indicated job satisfaction mediates the effect of reward system on employee performance. The study recommended that ethio telecom should handle employee performance with a great concern for their competitive advantage by balancing both reward system to satisfying the employees. The study area was limited to Addis Ababa districts in corporate level. Thus the results from this case might not be generalized to the effect of reward system on employee performance of other divisions and out of Addis Ababa districts.
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Thesis Submitted to፡
Addis Ababa University
For the Degree of: Master of Science in Management
Keywords
Employee performance, Job satisfaction, Reward system