THE EFFECTS OF FRINGE BENEFIT ON EMPLOYEE PERFORMANCE: THE CASE OF ABYSSINIA BANK

Abstract

The main objective of this study was to examine the effect of fringe benefits on employee performance in Abyssinia bank central district. The Abyssinia central Adds Ababa district is selected purposely for its convenience and sample size of 85 employees out of 323 were selected using simple random sampling technique.the study used descriptive and inferential statistics. the findings from the correlation analysis showed that the dependent variable (employee performance ) was significantly related to independent variables namely, annual leave , below-market loan, maternity leave and overtime payment indicating that the level of employees; performance at the bank was positively correlated to employee performance. Moreover, regression analysis was also conducted to identify significant factors group among the fringe benefits factors group that affect the employee performance. The output from regression analysis showed that the fringe benefit factors group jointly affect the dependent variable (employee performance) implying that the better fringe benefits package, better the employee performance at the bank. furthermore the fringe benefits factors group explained 69.3 percent of the variations in employee performance indicating that fringe benefits factors group had a significant influence on employee performance. The results from regression analysis also showed among the independent variables, below market loan factor group is the most dominant and significant factor group affecting employee performance followed by annual leave and maternity leave. Therefore the study suggested that the bank administration should continue providing all kinds of fringe benefits to its employees and introduce some new forms of such benefits if required since the benefits positively affect employee performance.