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The effect of reward practices on employees’ motivation in banking industry: A comparative study of selected public and private commercial banks in south gondar zone, Ethiopia

The effect of reward practices on employees’ motivation in banking industry: A comparative study of selected public and private commercial banks in south gondar zone, Ethiopia
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The study was done based on primary and secondary data sources. A self-administered questionnaire was designed to collect relevant information from the selected 203 respondents. Among this 200 questionnaire were returned and analyzed. Multistage sampling method was used and employees are selected from each stratum with a systematic sampling technique. The collected data was analyzed by SPSS version 20 using descriptive statistics and multiple regressions.

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The effect of reward practices on employees’ motivation in banking industry: A comparative study of selected public and private commercial banks in south gondar zone, Ethiopia

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Nội dung Text: The effect of reward practices on employees’ motivation in banking industry: A comparative study of selected public and private commercial banks in south gondar zone, Ethiopia

Research Journal of Finance and Accounting www.iiste.org<br />
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)<br />
Vol.11, No.1, 2020<br />
<br />
<br />
The Effect of Reward Practices on Employees’ Motivation in<br />
Banking Industry: A Comparative Study of Selected Public and<br />
Private Commercial Banks in South Gondar Zone, Ethiopia<br />
Tilahun Lakew Alebel Woretaw<br />
Lecturer, Debre Tabor University, Debre Tabor, Ethiopia<br />
<br />
Bihon Tsega<br />
MBA Researcher, Debre Tabor University, Debre Tabor, Ethiopia<br />
<br />
Abstract<br />
Safe working environment is very important for any organization to create competitive employee in the world.<br />
The main objectives of this research was to assess the effect of reward practices on employees’ motivation in<br />
selected Public and Private Banks /Commercial Bank of Ethiopia, Bank of Abyssinia and Abay Bank/ in South<br />
Gondar Zone. After intensive review of prior literature, we have selected payment, benefit, promotion working<br />
condition, recognition, and training opportunities as dimensions of reward. The study was done based on primary<br />
and secondary data sources. A self-administered questionnaire was designed to collect relevant information from<br />
the selected 203 respondents. Among this 200 questionnaire were returned and analyzed. Multistage sampling<br />
method was used and employees are selected from each stratum with a systematic sampling technique. The<br />
collected data was analyzed by SPSS version 20 using descriptive statistics and multiple regressions. Quantitative<br />
research approach and Explanatory research design was employed to show the cause and effect of independent<br />
and dependent variables. Based on the result of multiple linear regression variables like recognition and training<br />
have positive and significance effect on employee’s motivation in Commercial bank of Ethiopia, and also payment<br />
and training variables have positive and significance effect on employee’s motivation in private banks. On the<br />
other side promotion and recognition have been found insignificant in CBE and in Private Banks respectively than<br />
other variables in the model. Since the relation between rewards and motivation exist, the management of<br />
commercial bank of Ethiopia and Private Banks shall be follow better rewarding techniques to increase the<br />
performance of employees as well as achieving organizational objectives.<br />
Keywords: Reward Practices, employee’s motivation, Commercial Banks, South Gondar Zone.<br />
DOI: 10.7176/RJFA/11-1-05<br />
Publication date: January 31st 2020<br />
<br />
Introduction<br />
According to Malik et al., (2011) reward system is a very important tool that all banks can use to sound employee’s<br />
motivation in different ways. In other words, banks give rewards to employees; and reward system seeks not only<br />
to attract new employees to join the bank but also to keep existing employees and also motivate them to perform<br />
at high level (Mohemmed, 2011). Basically, all types of rewards motivate employees to perform well by attracting<br />
with well designed compensation package by banks. Dewhurst et al., (2010) described that there are other means<br />
to reward employees and they do not just focus on financial compensation (rewards).<br />
Reward, of which can be in terms of monetary or non-monetary, is the key factor to attract or retain talents<br />
and to motivate employees to become good performers. Reward management in business organizations not only<br />
consists of financial rewards such as pay but they also consist of non-financial rewards such as employee<br />
recognition and employee training & development (Armstrong and Murlis, 2004).<br />
Employee motivation is a complex process (Armstrong, 2005) described that it depends on several factors.<br />
Like, individual needs and aspiration, expectation about the reward, equity and fairness (the felt fair principle) and<br />
other factor. Currently in Ethiopia there are 17 commercial banks, among these sixteen are private banks and one<br />
is public bank (CBE) (www.nbe.gov.et).<br />
Commercial Bank of Ethiopia, Bank of Abyssinia and Abay Bank are among those Banks which have a better<br />
number of branches in South Gondar Zone than others. These Banks like other financial institutions are struggling<br />
to earn as large market share as possible, by attracting and retaining motivated employees for providing excellent<br />
banking service to its customers (Mohamedi, 2013). Having good products alone is not enough to attract more<br />
customers to join and transact with the bank unless skilled and motivated human resource is available. The data<br />
that has been collected from both public and private commercial banks reflects the employee’s opinions towards<br />
reward practices; this provides important information for both sectors & banks incentive planners. Therefore, this<br />
study was tried to show the effect of rewards on employee’s motivation in selected public and private commercial<br />
banks.<br />
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Objective of the study<br />
General Objective<br />
The Main Objective of the Study was to assess the Effect of Rewards on Employees Motivation in CBE and<br />
selected Private Banks (BoA & Abay Bank).<br />
<br />
Specific Objectives<br />
1. To identify the perception of employees towards reward practices on employees’ motivation in CBE and private<br />
banks.<br />
2. To identify the effect of rewards on employee’s motivation in CBE and Private Banks.<br />
3. To examine similarity & difference between CBE and private banks based on motivational factors.<br />
Conceptual frame work<br />
<br />
<br />
<br />
<br />
RESEARCH METHODOLOGY<br />
This chapter presents the research methodology that was used to conduct this study thus, it focused on the following:<br />
research design, population and sampling techniques, data collection methods, research procedures, and data<br />
analysis methods.<br />
<br />
Description of the study area<br />
The study was conducted in South Gondar Zone, Which is found in Amhara Regional state, Ethiopia, by<br />
considering Public Commercial Bank (CBE) and private Banks of Bank of Abyssinia (BoA) and Abay Bank which<br />
have more number of branches & Employees than other banks in this zone. South Gondar Zone has 13 woredas<br />
such as Farta, Fogera, Estie, Simada, Tachgaint, Laygaint, Dera, Libokemkem, Ebnat, Andabet, Sediemuja,<br />
Gunabegemidir, Meketwa and 5 Towns Administration namely Debre Tabor (the town where zone administrator<br />
placed), Nefasmewucha, addiszemen, woreta and MekaneEyesus. There are 9 commercial banks (CBE and 8<br />
private banks) in this Zone. However the three (CBE, BoA and Abay) banks have more branches than others.<br />
Commercial bank of Ethiopia (CBE) is the leading bank in Ethiopia established in 1942; pioneer to introduce<br />
modern banking in the country. CBE has more than 1240 branches stretched across the country<br />
(www.combanketh.et).<br />
Bank of Abyssinia (BoA) which was established in 1996 and 338 branches in the country of Ethiopia<br />
(www.bankofabyssinia.com). Abay Bank was officially established on July 14, 2010, fulfilling all the necessary<br />
requirements of the National Bank of Ethiopia to set up a bank and started fully fledged banking operations on<br />
November 3, 2010 by registering 157.8 million Br in paid up capital, mobilized from 823 founding shareholders.<br />
(www.abaybank.com).<br />
<br />
Research Design<br />
The research designs for this study is explanatory research design to explain, understand and predict the cause and<br />
effect relationship between variables that is reward dimensions (independent variables) and employee’s motivation<br />
(dependent variable).<br />
<br />
Research Approach<br />
Quantitative research involves studies that make use of statistical analyses to obtain their findings. Key features<br />
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include formal and systematic measurement and the use of statistics (Marczyk et al., 2005). Therefore, for this<br />
research Quantitative research approach is used, because it used structural questionnaire data collection method<br />
and statically data analysis techniques.<br />
<br />
Target Population.<br />
According to 2018/19 annual report of the banks, there are 305 employees in CBE, 47 employees in BoA and 62<br />
employees from Abay Bank in south Gondar Zone. Therefore, the total population of the study was 414 and sample<br />
survey used to undertake the study.<br />
N<br />
n=<br />
1+ N *(e) 2<br />
Where; n = sample size N = Total population e = Error tolerance.<br />
The margin error for this study is 5%, and using this information, the sample size is equal to:<br />
414<br />
n= = 203<br />
1 + 414(0.05)2<br />
So from the target population of 414 employees the researcher selected 203 employees in 29 branches of three<br />
banks as sample to distribute the questionnaires. Since the number of branches in each Bank is not the same, the<br />
number of samples for each Bank is taken based on their proportion of number of branches.<br />
<br />
Sampling Techniques<br />
The researcher was used multistage sampling; First Convenience sampling was used to select the study area<br />
which was south Gondar zone. Because convenience sampling is th e most easily accessible members are chosen<br />
as subjects and it is quick, convenient and less expensive (Kothari).<br />
Secondly CBE, BoA and Abay bank were chosen purposively based on number of branches opened and the<br />
number of employees working at these branches. Thirdly un proportional stratified sampling was employed based<br />
on the number of branches that the banks have. According to the method which proposed by (Bowley, 1926),<br />
the sample size will be drawn from each Bank as follows Sample size from each bank= number of branches for<br />
each bank X Total sample size of total branches of the bank<br />
Sample size determination<br />
Bank Total Number of employees in each bank Number of branches in the Sample size<br />
Bank<br />
CBE 305 17 119<br />
BoA 47 5 35<br />
Abay bank 62 7 49<br />
Total 414 29 203<br />
Source: researcher’s own compilation of Survey data 2019<br />
Finally, systematic sampling (every nth element in the population is chosen staring from random point in the<br />
sampling frame) is used to select the sample respondents from each bank except out sourced employees.<br />
<br />
Sources of Data<br />
The researcher w a s used both primary and secondary data in its construction. Primary data were<br />
c o l l ec t e d by distributing structured questionnaire for the employees of CBE, BoA and Abay Bank. On the<br />
other hand the secondary data were collected from sources like prior researches, articles, books, interne<br />
and different manuals and documents of the bank. The researcher collected secondary data for complementing<br />
the data obtained from the primary source.<br />
<br />
Data Gathering Tools<br />
The main data collection instrument utilized in this study was questionnaire.<br />
According to Leary (2004), Questionnaire is usually inexpensive, easy to administer a large number of<br />
employees and less time consuming and normally gets more consistent and reliable results than other instruments.<br />
The questionnaires employed in this research contains Demographic characteristics of respondents and<br />
close-ended by which the respondents are asked to indicate their level of agreement using a five likert rating<br />
scale measurement where: Strongly disagree (SD) = 1; disagree (D) = 2; Neutral (N) =3, agree (A) = 4; and<br />
strongly agree (SA) = 5.<br />
<br />
Data Analysis and tools<br />
To fulfill the objective of the research, the data analysis was done. The data that were collected from the<br />
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primary survey are summarized, compiled, edited, and coded. Descriptive and inferential statistics were employed<br />
for the data analysis process by using computer software called Statistical Package for social science (SPSS)<br />
version 20.<br />
<br />
Model of the study<br />
The model employed was multiple linear regressions. Multiple linear regression analysis is used to explore the<br />
relationship between one dependant variable and a number of independent variables or predictors (Pallant,<br />
2005). Y= α + β1P + β2B + β3Pr+ β4W+ β5R+ β6T +Ui<br />
Where; Y = employee’s Motivation .<br />
α = the constant, or Y intercept<br />
βi = The coefficient of the independent variables<br />
P= Payment<br />
B= Benefit<br />
Pr= Promotion<br />
W=working condition<br />
R =Recognition<br />
T= Training<br />
i = the error term<br />
The regression analysis was performed based on data collected from employees of each bank. The<br />
researcher demonstrates the relationship between rewards on employee’s motivation and comparison of CBE and<br />
private banks (BoA and Abay Bank) .<br />
<br />
Reliability Test<br />
Reliability test is used to assess consistency in measurement items (Cerri, 2012).<br />
Cranach’s alpha is used to measure the internal consistency of the measurement items. Cranach’s alpha<br />
is a tool for assessing reliability scale which normally ranges between 0 and 1.Internal consistency reliability<br />
is a measure of consistency between different items of the same construct. If a multiple item construct<br />
measure is administered to respondents, the extent to which respondents rate those items in a similar manner<br />
is a reflection of internal consistency. According to George and Mallery (2003) a Cranach’s alpha coefficient<br />
greater than 0.9 implies excellent, greater than 0.8 is good, greater than 0.7 is acceptable, greater than 0.6 is<br />
questionable, greater than 0.5 is poor, and less than 0.5 is unacceptable.<br />
<br />
DATA PRESENTATION ANALYSIS AND INTERPRETATION<br />
This chapter presents a discussion of the final results and the process through which the Results are obtained.<br />
In addition to this, background information of respondents is presented. Finally, the statistical methods of<br />
analysis were discussed, which include a descriptive analysis, a correlation analysis, and a regression analysis.<br />
Response rate in each bank<br />
Bank Sample size Response Percentage<br />
CBE 119 116 97.5 %<br />
BoA 35 35 100 %<br />
Abay Bank 49 49 100%<br />
Total 203 200 98.5%<br />
Source: own Survey 2019<br />
As shown in the table above a total of 203(100%) questionnaires are distributed to systematically selected<br />
employees of CBE and private banks (BoA and Abay Bank) branches found in South Gondar Zone. Out of<br />
these, 3 questionnaires were discarded from the analysis because of incomplete completions of CBE employees.<br />
The rest 200 questionnaires (98.5%) are fully completed properly and used in the analysis. Accordingly, the<br />
analysis of this study was based on the number of questionnaires collected.<br />
<br />
Demographic Characteristics of Respondents<br />
The demographic information of respondent gathered for this study was gender, age, education level, years of<br />
service and Salary.<br />
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Gender Composition of Respondents in each bank<br />
Name of the Male Female Total<br />
bank Frequency % Frequency % Frequency %<br />
CBE 87 75 29 25 116 100<br />
BOA 26 74.3 9 25.7 35 100<br />
Abay Bank 30 61.2 19 38.8 49 100<br />
Total 143 71.5 57 28.5 200 100<br />
Source: own Survey 2019<br />
It presents the sex composition of the respondents. Of the total 200 respondents 143 (71.5%) are male and<br />
the remaining 57(28.5%) are female. Of the total 143 male respondents, 87 (75 %) are from Public Sector<br />
Bank/CBE/, 26 (74.3%) are from BoA and 30(61.2) are from Abay Bank. Whereas the female respondents<br />
are 29 (25%), 9(25.7) and 19(38.8%) are from CBE, BoA and Abay bank respectively. It also shows<br />
total gender of the respondent which is 71.5% are males and 28.5% are females, which indicate, the majority of<br />
the respondents are male.<br />
<br />
Age Composition of Respondents<br />
The study needed to know the age distribution of respondents to help categorize employees and assess whether<br />
ages of employees are taken into consideration in selection of employees in each banks.<br />
<br />
Age Distribution of Respondents<br />
Name of public and CBE BOA Abay Bank Total<br />
private bank Frequency % Frequency % Frequency % Frequency %<br />
Under 25 25 21.6 5 14.3 13 26.5 43 21.5<br />
25to35 89 76.7 22 62.9 26 53.1 137 67<br />
36 to 45 2 1.7 7 20 8 16.3 17 8.5<br />
Above 45 1 2.8 2 4.1 6 3<br />
Total 116 100 35 100 49 100 200 100<br />
Source: own Survey 2019<br />
As indicated from the above T ab le classification of respondents by age, 67% of the respondents fall under<br />
the categories of 25 up to 35. This shows that majority of the respondents are young applicants and most of<br />
whom are recent graduates.<br />
<br />
Educational Levels of Respondents<br />
Name of public CBE BOA Abay Bank Total<br />
and private bank Frequency % Frequency % Frequency % Frequency %<br />
Diploma 96 82.8 2 5.7 7 14.2 9 4.5<br />
Degree 20 17.2 31 88.6 38 77.6 165 82.5<br />
Masters 2 5.7 4 8.2 26 13<br />
Other<br />
Total 116 100 35 100 49 100 200 100<br />
Source: own Survey 2019<br />
The above table presents the education status of the respondents. About 96 percent of the respondents<br />
are having either a degree level education or more in both banks. In the case of’ CBE, out of the total respondents<br />
96 (82.8 %) are qualified with first degree education and 20 (17.2 %) have Maters degree. BoA 2(5.7%)<br />
respondents have diplomas, 31( 88.6%) have first degree and 2(5.7%) have masters Degree. in the case<br />
of Abay Bank 7 (14.2%) have diploma and the remaining 38(77.6) and 4(8.2) are degree and masters qualified<br />
respectively. The above data can serve as a preliminary indicator for the general training needs that each bank is<br />
supposed to provide to employees in the deferent levels of qualifications mentioned above.<br />
<br />
Work Experience of the Respondents<br />
Respondents were asked to indicate their work experience in their carrier. Accordingly the results are presented in<br />
the table below.<br />
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Name of public CBE BOA Abay Bank Total<br />
and private bank Frequency % Frequency % Frequency % Frequency %<br />
Below 3 years 10 8.6 9 25.7 14 28.6 33 16.5<br />
3-5 58 50 11 31.4 17 34.7 86 43<br />
6-10 43 37.1 15 42.9 18 36.7 76 38<br />
Above 10 5 4.3 5 2.5<br />
Total 116 100 35 100 49 100 200 100<br />
Source: own Survey 2019<br />
As can be seen in the above table the majority of respondents in all banks which is 43% have a work<br />
experience between 3 and 5, 16.5% have a work experience three and below years. Respondents which have<br />
work experience of 6-10 years are 38%. The remaining respondents (2.5%) have above 10 years work experience.<br />
In the case of CBE, the majority of respondents (58.6%) have a total of work experience in banks between<br />
1-5 years, and 37.1% of the respondents are having a total of work experience that ranges from 6 to 10. On the<br />
other hand, regarding work experience in banks of respondents of private banks BoA and Abay bank, 57.1% and<br />
63.3 % are respectively have a total work experience in banks that ranges from 1-5 years, and also BoA<br />
respondents of 42.9% and Abay bank respondents of 36.7% have experiences within a range of 6 to 10 years.<br />
Only CBE of 5(4.3%) respondents have a work experience of above 10 Years. From this we can conclude that<br />
most employees in banks are with less than five year experience.<br />
<br />
Gross Monthly Salary of Respondents<br />
Name of public CBE BOA Abay Bank Total<br />
and private bank Frequency % Frequency % Frequency % Frequency %<br />
2000-4000 10 8.6 10 5<br />
4001-6000 53 45.7 1 2.9 5 10.2 59 29.5<br />
6001-10000 32 27.6 12 34.3 25 51 69 34.5<br />
10001-15000 18 15.5 18 51.4 14 28.6 50 25<br />
15001-25000 3 2.6 3 8.6 5 10.2 11 5.5<br />
Above 25000 1 2.8 1 0.5<br />
Total 116 100 35 10 49 100 2 100<br />
surce: own Survey 2019<br />
From the above table we can observe that in CBE the majority of the respondents are earning 4001- 6000<br />
birr per month which accounts for 45.7% of the sample. The second largest respondents for CBE are between<br />
6001-10000 birr salary groups which is 27.6 % of the sample. The rest 8.6% of the respondent salary<br />
are 2000-4000 birr, 15.5% of respondents are between 10001-15000 birr monthly salary and only 3(2.6%) is<br />
earning a salary of 15001-25000 birr. On the other hand in the case of private bank, the majority of the<br />
respondents in BoA 51.4 are earning 10001- 15000 birr per month and in Abay bank 51% of respondents are<br />
between 6001-10000 birr monthly salary. This implies that the private banks respondents have better monthly<br />
salary than CBE. And also BoA pays better salary than Abay bank. From the figure 4.5 we can observe that<br />
the majority banks‟ respondents are earning 6001-10000 monthly salary which accounts 34.5%.<br />
<br />
Descriptive Analysis<br />
The arithmetic means and standard deviations of independent and dependent variables<br />
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Descriptive Statistics<br />
<br />
<br />
<br />
<br />
Descriptive statistics in the form of arithmetic means and standard deviations for the independent<br />
variables and dependent variable for the respondents are computed and presented in Table above with respect<br />
to the dimensions of reward practices assessed by the work motivation and satisfaction questionnaire.<br />
According to the data presented in t h e a b o v e T a b l e the mean scores for benefit (3.44), working<br />
condition (3.50), recognition (3.08) and Training (3.16) are above 3 in CBE. Since 3 is the mid-scale, it can<br />
be concluded that employees in CBE are satisfied by these variables. The mean score of payment and<br />
promotion variables are below 3 (2.18 and 2.38) respectively, indicating that employees in CBE do not see the<br />
chance for promotion as satisfying and demotivated for what they earned from the bank.<br />
In BoA, mean scores of payment and promotion are 3.80 and 2.85 respectively indicating that<br />
employees in BoA satisfied with the amount of financial compensation that they get from the bank however<br />
not enjoy with the chance for promotion to the higher managerial hierarchy since mean score of the former is<br />
greater and the latter is less than the mid-scale. On the other hand the mean score of benefit (3.25), working<br />
condition (4.34) and recognition (3.20), training (4.30) are above 3, it can be conclude employees of BoA<br />
are satisfied by these variables, and unsatisfied by training opportunity which is a mean score of (2.65).<br />
In the same way, the mean scores of payment (4.30), promotion (3.91), benefit (3.95), working<br />
condition (3.83), Recognition (4.04) and training (3.87) all are more than 3 and indicating that<br />
employees of Abay Bank satisfied with these variables. To this end, one can conclude that employees in CBE<br />
and BoA are not satisfied by the promotion practices of the bank. In addition to promotion employees in CBE<br />
have expressed their dissatisfaction in the amount of financial compensation they received from their employers.<br />
Meanwhile, employees in BoA have further expressed their dissatisfaction to the chance for being trained for<br />
better performance to the bank. The response of the respondents for that dependent variable of employee’s<br />
motivation shows somewhat above average. This implies that the employees of CBE, BoA and Abay banks are<br />
motivated.<br />
<br />
Ranking Order of rewards by respondents<br />
The Respondents perception on reward practices that influence employees‟ motivation, from 1st to 6th.<br />
Rank of rewards by respondents of CBE<br />
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Source: own Survey 2019<br />
The above Table shows that, out of total 116 respondents in CBE 31% of respondent’s choice rank number<br />
1 is Payment, 25% respondents‟ choice working condition as 2nd place, 19% respondents‟ choice promotion as<br />
3rd place. 16.4%, 5.2% and 3.4% of the respondents choice is benefit, training and recognition as 4th, 5th and 6th<br />
place respectively.<br />
Therefore as the perception of employees we can infer that, payment is the highest influential factor for<br />
employee’s motivation followed by working condition and promotion respectively in CBE, but<br />
according to respondents‟ choice of CBE, training and recognition have the least motivational factors<br />
respectively.<br />
Rank of rewards by respondents of BoA<br />
<br />
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<br />
<br />
Source: own Survey 2019<br />
The above Table shows that, out of total 35 respondents in BoA 37.1 % of respondents choice rank number<br />
1 is benefit, 31.4% respondents‟ choice payment as 2nd place, 14.3% respondent’s choice promotion and<br />
working condition equally as 3rd place. 2.9 % respondents choose recognition and no choice for training.<br />
Therefore we can infer that, benefit and payment are the highest influential factor, but training and<br />
recognition have the least motivational factors for employees of BoA.<br />
Rank of rewards by respondents of Abay Bank<br />
<br />
<br />
<br />
<br />
Source: own Survey 2019<br />
The above Table shows that, out of total 49 respondents in Abay bank 40.8 % of respondent’s choice<br />
rank number 1 is payment, 28.6% respondent’s choice Benefit as 2nd place, 12.2% respondents choice<br />
training as 3rd place. Therefore we can infer that, payment and benefit are the highest influential factor, but<br />
promotion and working condition have the least motivational factors for employees of Abay bank. Therefore from<br />
the above we can conclude that the perception of employees is different according to the organization environment<br />
and the reward practices in the organization.<br />
The rank of rewards in CBE, BoA and Abay Bank as a whole by respondents<br />
<br />
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56<br />
Research Journal of Finance and Accounting www.iiste.org<br />
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)<br />
Vol.11, No.1, 2020<br />
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Source: own Survey 2019<br />
From the above table it is possible to say that, out of total respondents (200) 33.5% of respondent choice<br />
rank number 1 is Payment, 23% respondent’s choice benefit and 18.5% respondents choice is working<br />
condition. About 14.5%, 6% and 4.5% respondent choice is promotion, training as 4th, 5th and 6th place respectively.<br />
Therefore we can infer that, payment is the highest influential factor for employee motivation followed by<br />
Benefit, working condition and promotion, respectively, but according to respondents‟ choice training<br />
and recognition have the least motivational factors respectively.<br />
<br />
Correlation<br />
Correlation analysis is applied to test the “interdependency” of the variables. It shows the direction and degree<br />
of the strength of the relationship among the variables. The Pearson’s Product Movement Correlation<br />
Coefficient (r) is computed to determine the relationships between explanatory variables and employee’s<br />
motivation. Correlation analysis is useful way of exploiting relation (association) among variables. The value<br />
of the coefficient (r) ranges from -1 up to +1. The value of coefficient of correlation (r) indicates both the strength<br />
and direction of the relationship. For values of r between +1 and 0 or between 0 and -1, different scholars<br />
have proposed different interpretation with slight difference. For this study decision rule given by Bartz<br />
(1999) id used to describe the strength of association among the variables as follows.<br />
Interpretation of r Value<br />
Value of r Description<br />
0.80 or higher Very high<br />
0.6 to 0.8 Strong<br />
0.4 to 0.6 Moderate<br />
0.2 to 0.4 Low<br />
0.2 or lower Very low<br />
Pearson Correlation Analysis for independent and dependent variables<br />
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<br />
57<br />
Research Journal of Finance and Accounting www.iiste.org<br />
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)<br />
Vol.11, No.1, 2020<br />
<br />
<br />
<br />
<br />
**. Correlation is significant at the 0.01 level (2-tailed).<br />
*. Correlation is significant at the 0.05 level (2-tailed).<br />
Source: own Survey 2019<br />
As can we see from the above table benefit relatedness to employees‟ motivation i.e. (r=0.190, p

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