The Effect of Reward System On Employee Creativity

Abstract

Reward System plays a vital role in enhancing employee creativity. The main objective of the study was to investigate the effect of reward system on employee creativity in Oromia Credit and Saving Share Company (OCSSCO) case of Bale zone branches. Simple random sampling techniques was used to select a sample of 158 respondents from target population of 260.Data was collected using open & close ended questionnaire. The general objective of this study was effect of reward system on employee creativity in Oromia Credit and Saving Share Company case of Bale Zone Branches and in order to answer the research questions, the researcher used a software SPSS 21 version for data operation and analysis. The result of descriptive statistics indicated that practice level of both intrinsic & extrinsic rewards in OCSSCO is low. In addition, the results of Pearson correlation shows there is a significant and positive relationship between extrinsic reward, Intrinsic reward & employee creativity. Moreover, the result of regression analysis indicates almost 76.3% of employee creativity is explained by extrinsic & intrinsic rewards. Similarly, the result indicates intrinsic reward is more contributing factor to employee creativity than extrinsic reward. Therefore, the researcher concluded that in addressing employee creativity and for accomplishment of organizational goal, it is important for the management to make effective use of both extrinsic& intrinsic reward system for their employees. In addition, the management needs to assess reward practice of similar institutions & make necessary adjustments.