1 Effects of Rewards on Employee Performance in the Ugandan Banking Sector Case Study: Diamond Trust Bank, Uganda

Abstract

This research examined the effect of rewards in the performance of the employees in the Ugandan banking sector. The case study was Diamond Trust Bank which was used as a guiding example to what takes place in most of the banks of Uganda. Focus was concentrated on generally both the intrinsic and extrinsic rewards. Intrinsic rewards could be; feelings of satisfaction that employees obtain directly from their activities, responsibilities, challenges and feedback characteristics of the job. Extrinsic rewards on the other hand could comprise of things like; bonuses, salary increments, overtime payments, paid vacations, fringe benefits, working conditions and promotions. The role of these rewards in the performance of the employees was also reviewed that is to say; are the employees motivated to perform or work better or are they merely de-motivated by the rewards, that they have to end up performing below their expected or set targets? Rewarding is a process through which employees get motivated to do more in their jobs for better performance, other than that, organizations and managers should revise their rewarding system. Administering of written questionnaires, focused group discussions and observation methods were used for collection of data from the field. It was found that majority of the employees are strongly motivated by extrinsic rewards such as promotions, salary increments, bonus payments and fringe benefits such as health insurance allowances, meals and refreshment allowances and transport allowances. Banks should therefore always consider the rewarding of employees as a very critical and vital subject. The employees’ performance not only affects the organization but Uganda as a whole for all Ugandan banks’ contributions towards Bank of Uganda are of great importance because they act as intermediaries between the public and Bank of Uganda.

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