Effectiveness of Extrinsic Reward Management System on Employee Performance: A Case of Office of the Controller and Auditor General Zanzibar

Abstract

This study examines the effectiveness of extrinsic rewards (bonuses, recognition awards and promotions) on employee performance in a case study of the Office of the Controller and Auditor General of Zanzibar (OCAGZ). The study uses primary data collected at the OCAGZ using a standard questionnaire distributed to employees in their respective departments accordingly. Linear regression analysis was applied to analyze data and fulfil the requirements of the research objectives which enabled to answer the respective research questions. The findings reveal that, promotion and bonus both have positive and statistically significant impact on employee’s performance. This means that the frequency of promotions and bonuses increases, so too does the organization's performance. However, the recognition award, has a positive but not statistically significant impact to the employee’s performance. Simply is to say that the coefficient for recognition is not statistical significantly different from zero, indicating it is not a significant predictor of performance. Therefore, the overall model suggests that both promotion and bonus significantly contribute to explaining variations in performance, with promotion having the largest effect. Recognition, however, does not appear to be a significant factor in this model. This suggests that OCAGZ should prioritize this aspect of extrinsic rewards when designing or revising Employee Incentive Programs.