The Effect of Reward Management on Employee Performance: In Case of Ethiopian Electric Utility, South Region, Arbaminch District

Abstract

Human resources which are commonly seen as the most valuable assets of any organizations are a means for competitive advantage and play core roles to achieve organizational objectives. Reward management is one of the ways used by organizations for attracting and retaining suitable employees as well as facilitating them to improve their performance. Based on expectancy theory, employees expect a certain reward for their input in the organization and the influence this expectation has on employee performance, as depicted by the instrumentality theory, is heavily rely on the kind of reward management practices used by their organizations. Researches reveled that reward management practice has a direct relationship with employee performance; and it is more desirable in the service sectors like EEU. As the research conducted in the case company and the need assessment study done by the organizations head office, the reward management practiced did not motivated the employees. In addition the researcher observed that there were problems with employees to serve customers with the needed speed and with fairness and justice, which indicated the case organization faced performance problem. This study aimed to determine the effect of reward management on employee performance in Ethiopian Electric Power Utility, Arbaminch District. The study used descriptive survey research design. The targeted population were EEU Employees in Arbaminch District, and using stratified proportionate sampling method 63 respondents were selected from both office and field workers, and the respondents from each stratum were selected using simple random sampling method. The study used primary data which was collected using structured questionnaires & unstructured interview, and secondary data that was collected from the annual reports, manuals and policy documents of the organization. The collected data was sorted for validity and reliability, and then coded. Techniques such as tabulation, percentages and charts were employed, and data was quantitatively analyzed using mean and standard deviation followed by a correlation and regression analysis. The study results revealed that though the organization uses a RM practices to motivate its employees; it was not blended in line with the magnitude of their effect on employee performance. Finally, standing on study findings, recommendations were provided to the organization to adjust its reward policies in order to align the RM practices with their respective correlation that could optimize employee performance. Key words: Reward, Reward Management, Motivation, Employee Performance.