ASSESSMENT OF REWARD SYSTEM ON EMPLOYEES PERFORMANCE: IN THE CASE OF ETHIOPIAN ELECTRIC UTILITY HEAD OFFICE

Abstract

This study examines the impact of reward management on employee motivation at the Ethiopian Electric Utility (EEU). Using a validated questionnaire with a Cronbach Alpha of 0.79, data were collected from 91 employees (87.5% response rate) through a census method, excluding those with less than one year of service. Findings indicate that nonfinancial rewards (r = .749, p < 0.01) have a stronger positive effect on motivation than financial rewards (r = .445, p < 0.01). Regression analysis shows that promotion, recognition, and work conditions contribute more significantly to motivation than payment and benefits. Many employees perceive the current reward system as unfair and demotivating. The study recommends a balanced reward strategy that combines transparent financial incentives with strong non-financial motivators—such as recognition, leadership support, and improved work conditions—rooted in equity and organizational justice principles to enhance motivation, engagement, and organizational performance.