EMPLOYEES PERCEPTION, PREFERENCE AND THEIR ROLE TOWARDS THE REWARD SYSTEM: THE CASE OF DASHEN BANK S.C

Abstract

Reward attracts and retains good employees. The purpose of this research was to assess the employees’ perception of the reward system at Dashen Bank S.C. who is working in Addis Ababa. The study used a mixed method design to investigate the employees’ perception of reward systems. A quantitative survey was used to collect data from 317 participants which 231 returned and a qualitative interview from 12 managers at Dashen Bank. A probability sampling method of stratified random sampling was to select employees from Dashen Bank S.C Addis Ababa. While purposive sampling method was considered to select the interview participation. Descriptive statistics, particularly tabular and graphical method of data presentation, were used to characterize the participants and summarize their reward perception ratings. Further, the ranking of reward types was done using Relative Importance Index (RII). The findings indicated that financial rewards, particularly indirect financial rewards are mostly recognized by employees. The most preferred or favoured reward type is topped by financial rewards loan, salary and medical coverage followed by non-financial rewards freedom and autonomy, increased responsibility, recognition, learning and career development opportunity, as well as work-life balance. Regarding the association of reward with effort or performance, participants have indicated that those that are most likely to follow effort are non-financial rewards such as freedom and autonomy, increased responsibility, recognition, learning and career development opportunity and work-life balance, followed by financial rewards bonus and salary. A review of the reward policy document also showed that only benefit administration that mainly focused on indirect financial rewards (benefits) is covered while the detail procedure included direct financial rewards (remuneration). Finally based of the findings of the study, it is recommended that Dashen Bank should revise its reward policy and procedure manual that can include elements of total reward or non-financial rewards. The revision of the reward policy and procedure document should also consider the introduction of ‘contingent’ or conditional types of reward.