| Abstract: | This research investigates the impact of performance based bonus systems on employee job
satisfaction at Ethiopian Industry Inputs Development Enterprise (EIIDE). Guided by four
specific objectives, the research assessed employees’ awareness and perceptions of fairness in
the bonus system, its influence on motivation, its effect on retention and commitment, and its
overall contribution to job satisfaction. A quantitative design was employed using structured
questionnaires distributed to 209 employees selected through stratified sampling, and the data
were analyzed using descriptive statistics, correlation, and multiple linear regression. The
findings revealed high awareness of the bonus system but low satisfaction with bonus amounts
and fairness. Motivation and retention were only moderately influenced, while job satisfaction
was more strongly associated with intrinsic factors. Regression results showed that awareness
and fairness and retention significantly affected job satisfaction, while motivation was not
statistically significant. Demographic analysis indicated that gender and education level
significantly influenced job satisfaction, whereas age and length of service did not. The study
concludes that performance-based bonuses affect satisfaction mainly when perceived as fair and
aligned with organizational commitment, and recommends improving clarity, equity, and regular
evaluation of the system. |
