EFFECT OF REWARD SYSTEM ON EMPLOYEE PERFORMANCE IN PUBLIC INSTITUTIONS IN RWANDA. A CASE OF RWANDA HOUSING AUTHORITY

Abstract

This study established the effect of reward system on employee performance in public institutions in Rwanda with reference to Rwanda Housing Authority. This study used correlation and explanatory research design to establish the effect of reward system on employee performance. The population of this study was 108 employees of RHA while the sample size is 85 respondents from RHA. The study used descriptive statistics and inferential statistics as method of data analysis. The findings revealed that reward system used by RHA affecting it employee performance in different ways in terms of compensation system with mean of 4.48; performance recognition used by RHA was at mean of 4.41, career development used by RHA was at mean of 4.45 and employee benefits used by RHA was at mean of 4.42. The findings revealed that employees perform their job duties and execute required tasks in RHA at a good level in term of quality services with mean=4.36, team work in RHA with mean=4.46, level of dependability with mean=4.27, tasks completion by employees of RHA with mean=4.29, creativity of employees of RHA with mean=4.44. The findings illustrated that there is constructive and important correlation connecting components of reward system (compensation at (r=.539 **, p=0.002<0.01); recognition scheme at (r=0.309 **, p=0.004<0.01); career development opportunity at (r=0.539 **, p=0.002<0.01); fringe benefits at (r=0.749 **, p=0.002<0.01) and employees’ performance in RHA. The results of regression analysis on the link between reward system and employee performance in RHA illustrated that compensation, recognition schemes, career development opportunity and employee benefits have positive and significant effect on employee performance in RHA ( β1= 0.341 ; β 2 = 0.168; β 3 = 0.388, and β 4 = 0.724 ) respectively. This showed that 1 per cent increase in compensation, performance recognition, career development opportunity and employee benefit will lead to 0.341, 0.168, 0.388 and 0.724 percent increase on employee performance in Rwanda Housing Authority. Basing on the findings the study concludes that reward system plays a positive role on employee performance of public institutions in Rwanda specifically in Rwandan Housing Authority during the period of 2015 to 2020. The study recommends that RHA executives should consider the numerous components associated with a perplexing and dynamic circumstance prior to settling on choices on remuneration frameworks that will impact the adequacy, effectiveness and eventually the manageability of the monetary establishments in the country . Keywords: Compensation, Recognition scheme, Career development, fringe benefits, employees’ performance, Rwanda Housing Authority . CITATION: Kampororo, D., Wafula, A., & Mwangi , F. (2021). Effect of reward system on employee performance in public institutions in Rwanda. A case of Rwanda Housing Authority. T he Strategic Journal of Business & Change Management, 8 (4), 498 – 513.

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