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A reward system on organizational performance is typically a set of incentives that are offered to employees in order to encourage them to achieve certain goals or objectives. The specific nature of the rewards will vary depending on the organization, but they could include things like bonuses, raises, or even paid time off. Some possible rewards for state-owned corporation employees could include bonuses, salary increases, and promotions. Given the changes and efforts to redesign Kenya's state-owned enterprises, many still perform poorly. Kenya's state-owned commercial enterprises have lagged behind their private sector rivals. The purpose of this research was to determine the influence of reward system on performance of commercial State Corporations in Kenya. The study used a positivism research philosophy. The research study used descriptive research designs. The target respondents were three Managers from any department (Finance, HR, administration or marketing) within the commercial state corporation. Therefore, the target population was 165 respondents from 55 commercial state firms in Kenya. The study adopted a census all the 55 commercial state corporations. The study collected both primary and secondary data and utilized both qualitative and quantitative data. Statistical Package for Social Scientists (SPSS) was used to help in data analysis. Simple linear regression model, and multiple linear regression model were used to assess the relationship between the study variables. The findings indicated strong positive correlation coefficient between reward system and performance was R = 0.759. The coefficient of determination R2 = 0.576 shows that 57.6 percent of the variation in performance is accounted for by the changes in reward system, leaving 42.4 percent unexplained. Analysis of variance (F = 9.808, P-value = 0.003<0.05) established that the model is overall significant. Findings further indicated that reward system was individually statistically significant (β = 0.669, P-value = 0.003<0.05). The study revealed a strong positive correlation coefficient between reward system and performance of commercial state corporations in Kenya. The study therefore concluded that the reward systems have strong effect on individual’s entrepreneurial behavior in the state firms. The study also recommended that, manager’s rewards should be employed upon the unit of their work performance.
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