The Impact of Financial Rewards on Employee Performance in Organizations Case Study: Kampala Capital City Authority (Rubaga Division)

Abstract

This study focused on “the impact of financial rewards on employee performance in organizations”. The theoretical underpinnings of this study was premised on Adam Stacy’s Equity theory of motivation which states that employees expect fairness when being rewarded and Victor Vroom’s theory which states that individuals make choices based on their perceived expectancy that certain rewards will follow. The main objective of this study was to establish the impact of financial rewards on employee performance in organizations with K.C.C.A; as a case. While the specific objectives were to find out the impact of pension schemes on employee performance, the effect of allowances on financial rewards and to establish how salaries affect employee performance.

The study was based mainly on Primary data obtained from questionnaires, interviews and documentary reviews of the selected literature. The study employed both qualitative and quantitative techniques of data collection and data was analyzed using descriptive and relational statistics

The findings revealed that, the most commonly used types of financial rewards in organizations of Uganda were pension schemes, promotions, salaries and wages, allowances and overtime pay. It was also established that financial rewards affect the performance of employees by motivating them and increasing their productivity and efficiency.

Due to inconsistencies in the reward systems in the organizations, this study recommends that rewards be based on performance considerations after a fair and accurate evaluation of its effects on the beneficiary.

It is also recommended that Management be trained and sensitized about the value of financial reward systems and be made aware that pay motivates employees to perform to their best.

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