Nexus between Reward System, Employee Commitment and Organizational Performance Empirical Evidence from Selected Ethiopian Universities

Abstract

This study aimed to investigate the relationship between reward systems, employee commitment, and organizational performance in Ethiopian higher educational institutions. Both quantitative and qualitative methods were used, and an explanatory research design was employed. Three universities were selected from Ethiopian universities located in south directional using a random selection technique, and a total of 376 respondents were included in the sample. Confirmatory factor analysis and path analysis were conducted using structural equation models. The study's findings indicated that the reward system has a significant and positive impact on organizational performance in Ethiopian higher educational institutions. Additionally, the results of the mediating analysis revealed that employee commitment plays a partial mediating role between the reward system and organizational performance. Based on these findings, the study recommends that organizational leaders should focus on designing effective reward systems and practices to ensure employee commitment. It is expected that these results will provide valuable insights to managers regarding the importance of an effective reward system in improving employee commitment.