MATTU UNIVERSITY

BEDELLE CAMPUS SCHOOL OF COMMERCE

DEPARTMENT OF MARKETING MANAGMENT

ASSESSING THE ROLE OF INCENTIVES PROGRAM ON EMPLOYEE

MOTIVATION (THE CASE OF ETHIO TELECOM BEDELE DISTINCT)

A Sinior Essay Submitted to the Department of Marketing Management, Mattu

University,in partial fulfillment of Me Requirements for the Award of Bachelar
of Art(BA) Degree in Marketing Management

BY: Mihiret Asefa Rekiso ID NO: 5893/12

Advisori:Mr.Wondimu Geleti (MBA)

AUGUST, 2023
Bedele , Ethiopia
 ACKNOWLEDGEMENT

First and for most, thanks to the almighty GOD, for his help in the preparation of this paper and
successful completion of my education. I would like to thank the very kinds of my advisor
(WODIMU GELETI MBA) whose constructive persistence advice and suggestions helped me in
shaping the whole content and form of this paper. I also owe my debt of gratitude to my families
and human resource department staffs of Ethio telecom Bedele district.Finally, I wish to express my
sincere and deepest thanks to my friend students who gave me their advice and I would like to
thanks all my friends who initiated me to prepare this paper.
I
 Table of Contents.
List of Tables……………………………………………………………………………………………………………..……………….V
Acronomy ...................................................................................................................................................VI
Abstract……………………………………………………………………………………………………………………………………………..….VII
CHAPTER ONE .....................................................................................................1
1. Introduction ………………………………………………………………………………………………….………………………….…….1
1.1 Background of the study ........................................................................................................................1

1.2 Statement of the study ..........................................................................................................................2

1.3 Objective of the study ...........................................................................................................................3

1.3.1 General objective ................................................................................................................................3

1.3.2Specific objective .................................................................................................................................3

1.4 Research Questions ...............................................................................................................................4

1.5 Significance of the study .......................................................................................................................4

1.6 Scope of the study ................................................................................................................................4

1.7 Limitation of the study .........................................................................................................................5

1.8 Organization of the paper ......................................................................................................................5

CHAPTER TWO ..................................................................................................... 6

2 Literature Review ......................................................................................................................................6
2.1 What is Incentive ?................................................................................................................................6
2.2 Types of Incentive ..................................................................................................................................6
2.2.1Financial Incentives .............................................................................................................................7
2.2.1.1 Piece work ........................................................................................................................................7
2.2.1.2 Production Bonus ............................................................................................................................7
2.2.1.3 Commission Plans ...........................................................................................................................7
2.2.1.4 Merit Raise.......................................................................................................................................8

2.2.1.5 Professional pay compenction ........................................................................................................8

2.2.1.6 Profit sharing plans ..........................................................................................................................8


II
2.3 The advantages of financial incentives ..................................................................................................8

2.4 The disadvantages of financial incentives ..............................................................................................9

2.5 Non financial (moral )incentives ............................................................................................................9

2.5.1 Tangible Non monetary incentives ...................................................................................................10

2.5.2 Intangible Non monetary incentives.................................................................................................10

.
2.6 The Importance of incentives ..............................................................................................................15

2.7 Non Financial Compensation ............................................. .................................................................16

2.7.1 Employee value ................................................................................................................................16

2.7.2 Material incentives ...........................................................................................................................16

2.7.3 Emperical Literature ........................................................................................ .............................................16

CHAPTER THREE ..........................................................................................................................20

3.Research Methodology .......................................................................................................................20

3.1Description of the study area ................................................................................................................................20

3.2 Research Design ...................................................................................................................................................20

3.3 Target Population ............................................................................ ....................................................................20

3.4Types and sources of data collection ....................................................................................................................20

3.5 Method of data collections ......................................................... .......................................................................20

3.6 Sample size and sample Technical .......................................................................................................................21

3.7 Methods of data analysis and presentation ........................................................................................................21

CHAPTER FOUR ......................................................................................................22

4.Data Presentations and analysis .......................... ...................................................................................................22

CHAPTER FIVE ............................................................................................................................................................35

5.CONCLUSION AND RECOMMONDATION ................................................................................................................35

5.1 CONECLUSION......................................................................................................................................................35

III
5.2 RECOMMENDATION .....................................................................................................................................36

REFERENCE .................................................................................................................................................................38

APPENDIX 1................................................................................................................................................................40
APPENDIX 2.................................................................................................................................................................44

IV
 LIST OF TABLES

TABLE…………………………………………………………………………………...…PAGE
Table(4.1 )Sex structure…………………………………….......................................................22
Table( 4.2) Age category ………………………………….........................................……….…22
Table( 4.3) educational status……………………………………..............................................23
Table 4.4 year of service…………………………………………................................................23
Table (4.5) Employees attitude and payment system of the organization. …….................….…24
Table 4.6 benefit package ………………………………………………………………….…..25
Table 4.7 formal ways of motivating employees…………….............................………….…..25
Table (4.8) performance of employees determined by level of incentive…………..................26
Table (4.9) Salary scale and other benefit…………………………….....................................26
Table (4.10) positions based on performance……………………………..................................27
Table (4.11) terminal benefit……………………………………...............................................27
Table 4.12 career advancement………..…………………......…….......................................….28
Table ( 4.13) benefit and recognition………………………………........................................28
Table (4.14). Type and techniques…………………………………...........................................29
Table (4.15) response of respondents towards
future hope of staying on the organization………………….…..................................…30
Table (4.16) organizational payment………………………………...........................................28
Table (4.17) organizational bonuses……………………………............................................…28
Table (4.18) organizational financial incentives……………………..........................................29
Table (4.19) employee training………………………………................................................…30
Table. (4.20) organizational services providing…………………….....................................….30
Table (4.21) organizational customer contact………………………….................................….33

V
 Acronomy
KM Kilo Meter
SNNPR Southren Nations,Nationalities and Peoples Region
 ABSTRACT
The main purpose of this study was assessing “The role of incentive programs on employee
motivation” at Ethio telecom Bedele district.This assessment used for employees toward the
incentive programs of the Ethio telecom Bedeie district.and to identify the problem related to
incentive programs. Both primary and secondary data are collected, investigated and analyzed in
detail. The primary data is obtained from employees through questionnaires and human resource
manager through interview. The secondary data was collected from documents and written
materials. After collect relevant information through simple random sampling technique, the
researcher analyzed the respondents answer by using tables, percentages and numbers. Finally
based on the findings the researcher forwarded important conclusions and recommendations that
can help the organization to implement incentive program and to minimize the problem related to
incentive programs.
Key Words: Assessing the role of incentive program on employment motivation.
 VII

CHAPTER ONE

1. Introduction
1.1. Back Ground of the Study
Human beings are the only resource who can increase or decrease their own performance. They
increase their performance by exerting their efforts appropriately. If not their performance was
decrease the resource like material, monetary and machineries are inanimate and the input
relationship can be currently and previously calculated by the management and other concerned
body(Helen and Gerhert, 2004).
Employees performance depend on two factors the ability and the motivation. What he or she can
do is the ability of the work and what is willing to do depend on his or her motivation. The study of
the people behavior of the work had to do depend on his or her motivation. The study of the people
behavior of a work in generally referred to as the study of the action and attitude that people exhibit
within organization environment (Methane and Glinous, 2005).
The studying of the organizational behavior means understanding employees’ behavior and what
makes motivated. It is important to know ways in which their performance is improved. Managers
also concerned for employees’ productivity, motivation, quality of work farce and carrier
progression (Robbins, 2004).
Incentives are considered one of the most important factors that encourage workers to put forth
great efforts and work more efficiently. It is because incentives direct workers capabilities into more
efficiency in their work in an attempt to achieve the organization's goals (Gana and Bababe, 2011).
In addition, the absence of the suitable incentives may negatively affect the hardworking employee's
performance; it may also weaken their productivity at work which decreases the chances of
attaining the promising goals of the organization (Palmer, 2012
Incentive are the ways of reinforcing and encouraging employees to achieve personal and
organizational goals. Incentive plays a great role in motivating employees’ performance. Exchange
theory suggests that employees give time and their effort in exchange for performance and
management provides better working condition in exchange of employees effort (Robbins.2005).
Organization are said to be good when the people are employees are attracted and stay in
originations
 1
If it has to attract and maintain competent employees then it can win the competition. Hence the
firm must pay employees for what they performed or give opportunity to career prospects.
Manages should also understand the importance of incentives through gathering information from
the companies thus who exercise incentives as motivating factor. In order to accomplish
organizational objective successes fully organization should work towards incentive program such
as awarding and benefit packages in order to overcome the problems that the results due to
dissatisfaction of employees and poor performance (kinky and Kreinteg. 2006).

1.2. Statement of the Problem

Employee incentive programs go a long way towards insuring employee feel appreciated and
worthwhile, this alone can help with employees’ motivation across board, and the thing about these
programs is individualized. Incentive program increase motivation because they are not
encouraging productivity performance, but also show employees the company cares. Factors that
affect employee motivation include lack of promotion, lack of good incentive program, lack of good
incentive program piece rate, and unsuitable working environment. Inventive program is one of the
factors that affect employee motivation. Employees have their own individual goals. That means
they need to satisfy themselves through benefit that is given by company to perform well. When
they achieve their goals they strive for their organization goals or effectiveness .incentives play a
great role in organization shall be give deal of importance must able to understand and manage
incentive programs.
Therefore, this study attempts to closely examine and assess how the concept of employee
motivation is understood in the organizations. It also studies the current motivational instruments in
use and practiced by the organization.
 2

1.3. Objective of the study

1.3.1. General objective
The general objective of this study is assessing the role of incentives program on employee
motivation in case of Ethio Telecom in Bedele District
1.3.2. Specific Objective
Based on the general objective of the study the following specific objectives were developed:
 To identify the extent of incentives program of the employee performance towards
motivation.
 To assess employee attitude towards incentive program of organization.
 To as a certain the incentive approach implemented by organization.
 To describe the level of organization performance
3
1.4. Research Questions
Based on the above problem, the following Research Question will be answered:
1. To what extent incentive programs motivated the performance of employee?
2. What is the level of incentives provided to employees?
3. What is the level of organizational performance?
4. What is the attitude of employees about incentive program?

1.5. Significance of the Study

This study will be very important to create a smooth relation between management and
employees as well as efficient operation of the organization. The research is expected to help
human resource department to select and use the best motivation factor in the future. It will
provide experience and knowledge for the researcher in conducting studies in the future. It might
help as a road map for those who are interested in conducting research on the area.

1.6. Scope of the study

The study will be delimited at specific organization of Ethio Telecom Bedele district . This
research will be limited to assess the “role of incentive program on employee motivation”. Other
motivational factors will not be included. Similarly other Telecom organization will not be
considered for the comparison purpose beside incentive program other way of employees’
performance will not be issue. While conducting the study, the following constraints might be
faced by the researcher: Shortage of time for gathering all necessary data from the organization.
Job stress of employees might also be a problem causing them to be unable to explain their idea.

 Geographically: - the study was not be covered large areas because of different constraint
limiting it and the study was geographically limited to Ethio telecom Dedele Distinct .

 Methodology: - as the study is descriptive type, the researcher will use qualitative research
approach and address only the organizational goal achievement of the District .

 Time: - the study will also delimit by time constraint as it is investigated for academic
purpose.

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1.7. Limitation of the study
The researcher may face some problem in carrying out the research. Some of them are shortage
of time to conduct this research study will extensively financial constraint to pay the necessity
expenditure to conduct the research. Limited resource in accessibility to internet and in adequate
computer facility, lack of cooperation from respondents those who are concerned in giving
information with regard to the study will be under this consideration.

1.8. Organization of the paper

The paper of the study is organized in five chapters. The first chapter include introduction,
background of the study, background of the organization, statement of the problem, research
questions, objective of the study, significance of the study, scope of the study, and limitation of
the study. The second chapter has discuss about the review of related literatures about the subject
matter. The third chapter will focus on research methodologies. The fourth chapter focus on data
presentation, analysis, and interpretation. The fifth chapter devoted to the summary and
conclusion of the findings; and will forward recommendation.

5
 CHAPTER TWO

2. Literature Review

2.1 What Is an Incentive?

By definition, incentives are an external persuading factor that encourages the motive which
positively directs the individual into working harder, matching the required performance in the
institution, as to get the incentive. Incentives are also defined both as methods used by
institutions to encourage employees to work with high spirits and also as concrete and moral
methods of satisfying the individuals' moral and material desires.
Palmer (2012) defines incentives as the external temptations and encouraging factors that lead
the individual to work harder; they are given due to the individual's excellent performance since
he will work harder and produce more effectively when he feels satisfied in the institution. In
addition to this, incentives can also be defined as the consideration of the excellent performance,
assuming that the salary is enough to make the worker appreciate the value of the job that also
satisfies his basic needs in life (Palmer, 2012).
Incentives are the way of reinforcing and encouraging employees to achieve personal and
organizational goal (Dunham 1989). The term incentive refers to something that intends to ignite
one and or calls for greater effort to act in a given manner. (allen and kilmann,2001)

2.2 Types of Incentives

2.2.1 Financial Incentives
Financial incentives also defined by Jadallah, (1997) as all means of payment based on increase
and or improve productivity. Therefore the more the workers produce the more they earn. While
the fall in quantitative or qualitative production deprive the worker from earning partial or total
incentives.
Financial incentives aim to raise production efficiency and improve performance through
encouraging individual to behave in a desired away. Financial incentives are the most important
and influential factors to the individual's desire to work when such wages are appropriate and
capable of satisfying his needs. On the contrary, low payment that is not appropriate to his efforts
of work leads to the low efficiency of productivity (Al-Harthi, 1999).
6
2.2.1.1 Piece Work
Piece work is an incentive system that compensates the worker for each unit of output. Daily or
weekly pay is determined by multiplying the output in unit time the rate per unit.
Piece work is where an employee is paid solely on performance or productivity results. This
means that if targets were not meet you do not have to pay for work that has not been done,
which can improve the efficiency of your business. (Dunham, 1989)

2.2.1.2 Production Bonuses

Production bonuses are incentives paid to workers for exceeding output standard. They are used
to supplement base pay. Under one approach, the employees received a base pay then through
extra effort that result in output above the standard, they get supplemental bonus, usually figured
at given rate for each unit of production over the standard (Nel etal ,1993).

2.2.1.3 Commission Plans

Commission plans pay sales people for results and only for results. Under these plans sales
people have the greatest incentive and there is a tendency to attract high performing sales people
who see that effect clearly leads to rewards. Sales costs are low. It’s a plan that’s easy to
understand and complete. However it’s not without drawbacks. Sales people tend to focus on
making the sale and on high volume items and May neglect non selling duties like servicing
small accounts, cultivating dedicated customer, and pushing hard to –sell items. Wide variations
in income may occur, this can lead to feeling that the plan in inequitable. In addition, pay is often
excessive in boom time and low in recessions. Also keep in the mind that sales performance like
any performance is production of not just motivation, but of ability too.
If the person hasn’t the sale skill,then commissions want produce sales Gray,etal,(2004)

7
2.2.1.4 Merit Raises

Merit raises is any salary increase the firm awards to an employee’s based on his or her
individual performance. It is different from a bonus in that it usually becomes part of the
employee’s base salary. Where as a bonus is a one –time payment. Although the term merit pay
can apply to the incentives raises give to any employee’s exempt or non – exempt effect of factor
management and non-management. The term is more often used for white collar employees and
particularly professional office and clerical employees. Based on survey of 341 fortune 1000
companies merit increases for exempt employees averaged about 4.1% for the four years through
2000 and between 3.9% and 4.0% for nonexempt salaried and none exempt hourly workers
(William, 1999).

2.2.1.5 Professional Pay Compensation

Pay professional knowledge compensation system provides employees highs pay as an incentive
for each new spiller job they plan. Pay for knowledge evaluates the employees increase skills and
job mastered gives management greater staffing flexibility.(Angari, A 1999)

2.2.1.6 Profit Sharing Plans

Profit sharing plans are organizations wide program that distribute companion based on some
established formula designed around company’s profitability. These can be direct cash out lays
or particularly in the cash of top managers allocated as stock option. There are also different
profits sharing plan the firm places a predetermined portion of profit in each employees account
under at rusts supervision. There is a tax advantage here, since income taxes are differed, often
until the employee retires and the money is taxed at a lower rate (Gary, 2004).

2.3 The advantages of financial incentives

There is a rapid and immediate impact on the individual's efforts that motivate him in doing his
utmost of work, increase production, increase income and improve performance.
The individual gains several psychological and social benefits as a result of enhancing his
purchasing power to satisfy his needs of goods and services (Al-Jahni, 1998).

8
2.4 The disadvantages of financial incentives
The disadvantages of financial incentives could push the individual for hard work, often
affecting the workers' physical or mental condition in the future and affect his social and
humanitarian issues which do not take into consideration the individual's s age or his
circumstances.
Financial incentives could not be valid for a number of work activities that are not based on
quantity of production but rather on services such as business services, supervision, security, the
judiciary and scientific research (Angari, 1999).

Financial incentives alone are not sufficient unless assisted by other types of incentives. Their
effects are limited to satisfy the biological needs of individuals and have a little impact after it
reaches the limit of needs. Therefore individuals are not seeking to increase production for
additional financial gains, thus cannot be financially motivated to contribute in increasing
production except for a certain amount based on their efforts (Aldubekhi, 1991).

There is a direct relationship between increased production and the interest of the worker, so
financial incentives is an essential factor to the individual, in addition to stability and reassurance
and gives him the opportunity to explore their talents and expertise (Jadallah, 1997).

2.5 Non-Financial (moral) Incentives

Money is an important motivator of human being in terms of the need hierarchy it can help to
satisfy the “physiological “need of the human beings. This brings in to focus the important of
non –financial incentives aimed at satisfying the other needs in the hierarchy (Darer, 1988).
"A person has a moral incentive to behave in a particular way when he has been taught to believe
that it is the right or proper or admirable thing to do. If he behaves as others expect him to, he
may expect the approval or even the admiration of the other members of the collectivity and
enjoy an enhanced sense of acceptance or self-esteem. If he behaves improperly, he may expect
verbal expressions of condemnation, scorn, ridicule or even ostracism from the collectivity, and
he may experience unpleasant feelings of guilt, shame or self-condemnation" (Johnson, 2005).

Al-Harthi (1999) suggests that moral incentives are not less important than financial incentives.
So, financial incentives cannot be achieved unless accompanied by moral incentives.
9
The importance of moral incentives depends on the conditions of the Organization, thus, it can
choose between financial incentives that fit the organization's circumstances and moral
incentives that are necessary to satisfy the social needs of the individual.
Moral incentives are those related to work environment such as; supervision, leadership,
fellowship, the working conditions of light, heat, ventilation, noise, decorations and participation
in management (Hasan, 2002).

Al-Jahni (1998) defines moral incentive as a set of motives aimed at achieving emotional,
psychological and humanitarian needs for employees by treating them properly and eliminate the
causes of complains, reward and punishment rule , provide systemic and entertainment services
for employees, and raise spiritual enhancement

2.5.1 Tangible Non –Monetary Incentives

Jeffery and Shaffer‟s (2007) study on motivational properties of “tangible incentives” identify
four psychological processes that influence hoe employees perceive tangible non –monetary
incentives ,the peeresses can be classified in to two categories: first perceived value of the
reward that include valuable and separable, and second value of earning that include justifiability
and social reinforcement.

2.5.2 Intangible Non- Monetary Incentives

Intangible non – monetary incentives are the cluster of rewards that completes an organizations
total reward system. Incentives that fall under this category are either social related or job
related.

A) Incentives as Motivational Tool

Work place motivation strategies are commonly adapted by organization to improve profitability
by increasing motivation and productivity. Reducing absenteeism and torn over and to ration
talented and skilled employees typically motivation at techniques such as incentives rewards and
recognitions are often used to motivate employees.

10
The main difference between incentives and reward are that an incentive is defined as something
that triggers a particular action. Whereas rewards are gives following desired behavior to
increase the probability that behavior will be repeated or it is a gift that is given to the well
performed.
The classification of incentives provides a framework of the breakdown of organizational
rewards. Monetary incentives rater to financial rewards given to employees in terms of because
stock, options, paid insurance lave… etc. (Gary, 2004).

B) Money As Motivate
Martocchio (1998) proposes that culture determines and creates the context for money to
motivation individual’s indifferent countries. According to him, employees strive for high level
of performance if that better performance will result in greater pay. He has drowned up the
following list based on surveys conducted to determine what money means to people.
A reword for work will done,means to support one self and one‟s family status symbol-the more
you make, the more status you have in the organizational and in society. Payment for doing a job
never as much as deserved a triple the more you make the more you spent, so the more you
need.A symbol of professional achievement payment for doing the job regardless of how will the
job was done,a means of classifying people (as low –income ,middle ,or high Income), and
company’s obligations to employees.
From the above list it is obvious to conclude that the money represent different things to different
people. The question however is, does money motivate employees? In net et al. (2004), the
authors‟ postulates that the motivation is depend on employees perception toward money what
her it motivation them or not.
Although money could be seen as motivate, it is not the only or must powerful source of
motivation. Therefore organizational, deigns, especially compensation deigns that force
primarily on pay and that do not emphasis the rule of intrinsic rewards, fail to top a very
powerful source of motivation that can lead individuals to perform at extraordinary levels (net et
al , 2001).

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C) Payment as a Means of Motivation
Pay for performance system makes major contribution to performance through two main
mechanisms. First, they positively influence the motivation to perform. Second, they impact the
affrication and retention patterns of organization. (I.e. who jeans and who remains) there by
affecting the caliber of individuals available to perform. A number of different pay delivery
plants quality as pay for performance system, although they vary with respect to how closely
they tie pay to performance.

Pay for performance system delivery monitory reword at the individual, small group, and /or
divisional or organizational level. Evidence suggests that pay for performance at each of these
levels can positively impact performance. (Locke, et,al, 2008)

12
Individual Level Payment Of Motivation
At the individual level, are there major types of pay for performance system: Traditional
incentive system, variable pay configuration, and merit pay plans? Traditional incentive plans
include peace rate plans and sales commission. With peace rate incentive plans, an employee is
played a specificities rate for each unit produced or each service provided. A recent meta-
analysis involving mainly piece rate pay found support for the notion that financial incentive are
associated with higher performance in terms of quantity and also found on detrimental impact on
quality (gupta, et,al 1998) the other traditional incentives, the commission, is a sales incentive a
percentage of sales dollars, a percentage of gross profit margins or some dollar amount for each
unit sold.
The second major type of individual level pay for performance plan, variable pay, is performance
related compensation that does not permanently increase base pay and that must be relearned to
be received again. The traditional pay plans just discussion actually constitute forms of variable
pay, albeit from in which a great proportion of pay is typically tied to performance than is the
case with newer emerging forms of variable pays that have a greater contribution. A popular
current variable pay form is a lump sum bonus for archiving particular goals. Because base pay
tends to move up more slowly with variable pay plans, the amount of bonuses that can be earned
need to be substantial to make up from the fact that part of the pay is” at risk” (Schuster and zing
him, 1992) the risk is associated with the possibility that goals might not be meet and therefore,
the pay not earned.
Evidence suggests that variable pay plans, such as bonus, plan, are useful in besting
performance.
The third major type of individual level pay for performance plan merit pay, reward‟s individual
for past work behaviors and out comes by adding dollar aments to their base pay (Milikovich and
new man, 1990) merit pay.
Team Level Motivation Of Performance
In addition to pay for performance at the individual level, there is growing in pay performance
plant focused on small groups or teams. Small group pay plans provide monetary rewards based
on the measured performance of the group or team.

13
Small work group or terms are official militiaperson work units composed of individuals who
operate interdependently in the performance of tasks that affect other associated with the
organization (Guzzo and Dickson,1996, Hack man, 1987). One survey found that almost 70% of
fortune 1000 companies are using some type of work group or teams incentives (Lowler, et al,
1995) the impetuses for the greater attention to group levels reword in the incasing use of teams
in organization (Bartol and Hagmann, 1992).

 Organizational Level Effect Of Payment As Motivation

At the organization level, three pay systems that potentially like pay and performance are gain
sharing, profit - sharing and stock option. Gain sharing is a compensation plans in which an
organization shares with employees a portion of the added earning obtained through their
coactive increase in productivity (Henderson, 1997). Such plans usually involve a significant
portion of on organizations employees and possibly all. In large organizations‟ plans may apply
to plans, division, or other significant subsystem of the organizations. The second type of
organizations – level pay system and at performance is profit- sharing.
Such plans provide payment to employees based on the profitability of the business. Payments
can mode through current distribution plans, differed plans, or a combination of both although
most companies establish differed plans because of the associated tax advantage, According to
one estimate, more than 60 present of 1000 companies have profit –sharing plans (Lawler, et al,
1995).
Data supporting the performance effects of profit – sharing plans is somewhat unclear. Ameta-
analysis by Weitzman and kruse (1990) estimates an average positive productivity effect of 7.4
percent for profit sharing plans, but there study also consider gain sharing plans in this figure.
One possible weakness inherent in profit – sharing plans as a direct means of basting
performance is that it can be it as somewhat difficult to establish a clear connection between
individual actions and impact on profit.
The third type of organization level reward system is employee stock ownership one study of
fortune 1000 companies showed that 71 percent programs of some type.
The most rapidly growing approach is via stock options. Stock option gives employees the right
to purchase a specific amount of stock at a designed price over a specified time period to
executives, but recently more companies have been providing bread – based stock options plans
that extend to middle and sometimes lower level of the organizing (changes and Engle, 1998).
14
The basic rationale is that employees will be more concerned about the long-term success of the
organization if they can reap the benefit as reflected in the rising price of the organization stock.
Although there are not sufficient data available at this point to conclude that stock options
increase employee’s effort and there by positively organization performance, extending
ownership may have benefits in terms of positive equity perceptions.

 Overall Effect Of Payment

Aside from the impact of specific types of pay plans on performance at the level of the
organization to which they are directed, there is aloes evidence that the presences of pay for
performance system generally has influence on over all organizational performance. In this
regard, however, there is some debate regarding whether there are best practice that are
applicable to most organization or whether it is important to match pay system to particular
strategies (Monte Mayer, 1994, Youndt, Snell, Dean and Lepak, 1996).
D) Motivation through Empowerment.
Empowerment is motivation concept meaning to enable. To enable, in this case, implies creating
conditions for heightening motivation through the development of an individual sense of
personal power and meaning related a tasks. More specifically empowerment can be defend as
psychological stat where four cognitions of the individual act in concert to foster proactive,
positive, and self-confidence orientation towards one’s work.
For the individual, empowerment on a personal loves is experienced as both greater work
satisfaction and effectiveness inters of fulfilling work role expectation and in more innovates
behavior on the job (Spreitzer, 1995, Spreazer, kills, and Nasen 1994).
In terms of employees impact a performances motivation, it affects about the incitation and
perfecting of an individual task behavior. As such, there processes alone managers to set higher
performance goals for employees and to have these goal accepted. Empowerment processes also
allow managers to lessen the emotional impact of demoralizing organizational changes and to
mobilize organizational.
Most motivation theories motioned previously, propose that motivation is in an internally drive
to achieve a primary goal.
Employees exert high effort to accomplish goals that will make them feel good.

15
According to mol (1992), money does not motivate, but rather moves adperson to achieve a goal
in order to obtain the reword. Herzberg‟s hygiene motivation theory, states that extrinsic
rewards, such as pay, benefited working condition. Or company policies do not motivate they
merely ensure that performance is at acceptable level. Motivated people perform at levels that
are higher than the acceptable standard. Intrinsic rewords, such as responsibility, growth,
feedback or recognition and opportunities motivate employees to these high levels of
performance, more so than simply earning a good salary (Nel.et.at.2001)
Lowlier (1990) argues that if money as arrowed can cause dysfunctional be heavier, it influence
behavior, and also performance. According to him, the effect of money as a motivator largely
depends on the pay system applied in the organization. He further states that when pay system
are not designed well, they either do not motivate, or motivation the wring behavior. According
to hall‟s age theory, employees under the age of thirty tend to rank” good salary” as first an
order of what is important on job. This brings, in to focus that money, depending on an
employee‟s age, may be considered more important than other factors (Motta, 1995).
According to Net.et.at (2001).the critical factor that organization should bear in mind is from of
macaw‟s theory. These theories point to the fact that human being is motivation by extrinsic
rewards such as food, water, acceptance, and financial wellbeing. Members in the face of
difficult challenges, finally, experiences in team building organizations (bakhard.1969, Neilson
1986) suggest that employment techniques can play arousal role in group development,
maintenance, and task performance.
In the management literature, employment is commonly associated with a set of managerial
techniques or the act of sharing power with others. To best understand employment, it is
important to view nations of power and contract from psychological perspective- as motivational
and or expectancy belief status that are internal to individuals.
Individuals power need are met when they perceive that they have power or when they belief
they can adequately copy with event, situations, and or the people they confront. On the other
hand, individuals, power need are frustrated when they feel powerless or when they believe that
they are unable to cope with the task and social demands of their environment. Power in this
motivational sense refers to an intrinsic need for self –determination (Deci, 1975) or a belief in
personal self- efficacy Bandura, 1996). Under this conceptualization, power has its base with in
enactor‟s motivational dissipation.
16
Any managerial strategy or technique that strengthens this self-determination need or self-
efficacy belief of employees will make them feel more powerful. Conversely, any strategy that
weakens the self- determination need or self-efficacy belief of employees will increase their
feeling of powerlessness.

In general It can be concluded that positive moral incentives are any consequent raise of spirit for
the individuals, such as job enrichment, holidays, the appropriate post, participation in decision-
making, promotion, the nature of supervision, sense of belonging, stability, security, confidence
in the objectives of the Organization, systems proposals, listing in the panel of honor, social
harmony, literarily and moral distinguishing. Negative moral incentives are for negligent acts,
such as blame and shame.

2.6 The Importance of Incentives

The idea of incentives triggers much consideration especially from the beginning of looking for
qualified employees who are able to efficiently achieve the institution's goals; it is because
incentives play a major role in the employees' productivity. The importance of incentives
originates from the need for the employee to be recognized and appreciated for his or her efforts.
Actually, appreciating people for their efforts by giving them incentives is a very significant
factor in satisfying the internal desires of an individual. The individuals' own skills are not
enough to let them work with high productivity unless there is an incentive system that
encourages their internal motives and then leads very hardworking efforts (Locke and Braver,
2008).
A successful organization is the one which can efficiently exploit its employees' skills and
qualifications. Therefore, scholars have worked hard as to come up with a comprehensive
description of how to enhance the professionalism of the employees and how the administration
chooses active individuals, and also how to connect the institutions' goals to the personal
objectives of the individuals which will improve their performance. It is plausible to say that
successful organizations set an active incentive system capable of affecting the employees'
performance in a way that pushes them into working harder and maintaining the goals of the
institution. In addition, it is noticeable that motivating employees may help them to overcome a
lot of their obstacles at work (Palmer, 2012).
17
On the other hand, for the administrator to be incentivizing, he must try to create confidence and
an environment of tranquility, security and respect in an honest and actual manner. One must
know that appreciating or people's work and praising their achievements do not affect one's own
success, so one must do this directly to who deserves it or just in front of a group of people by
praising their accomplishment (Locke and Braver, 2008)

.2.7 Non financial compensation

Non financial compensation concentrates on the needs people have. These needs could be the
need for achievement, responsibility, influence and personal growth. Most of non-financial
compensation possibilities are intrinsic motivator. Intrinsic motivation arises from work itself
(Walton, R 1985) workers feel satisfied and get feeling of success from work and that way are
more motivated at work. Non financial compensation could also be for example flexible work
hour, long lunch time, interesting projects, support appreciation, and time of extra vacation days
or simply movie tickets, paid lunch or dinner. it is important for the employers to think carefully
about the non financial options they provide. Non financial compensation is seen as the best way
to motivate workers and increase job satisfaction.

2.7.1 Employee value

According to (Walton, R 1985) the amount of effort people willing to put in their work depends
up on the degree to which they feel there motivational needs will be satisfied. On the other hand,
individuals become de-motivated if they feel something on the organization prevent them from
attaining good outcomes.

2.7.2 Material incentives

Comparative studies have consequently demonstrated that public employees have different
motives from private ones. In particular, they are more inclined to disregard extrinsic elements
such as pay and monitory rewards and to value intrinsic job characteristics. Furthermore,
empirical studies indicated that increase intrinsic motivators may even reduce the positive
impacts of intrinsic factors on work motivation (Griffin, R.W. 2002)

18
2.7.3 Empirical Literature

The researcher has assessed different types of motivational theories so far. The sole advantage of
going through these theories and concepts is to develop a flexible and scientifically proved
motivational practice in use. But, knowing and understanding the motivational theories is one
thing while the application is another crucial issue worth considering. Hence, all managers are
faced with the question of how to select one applicable theory among these theories requires
close examination of the working conditions of the organizations and level of employee’s
motivation and set goals of organizations as these prevailing conditions differ from organizations
to organizations and employees to employees. Which theory is better and why? The answers for
these questions reveal the difficulties encountered by managers through the application of these
theories. It is evident that these theories are not all in competition with one another but many of
them are complementary as noted by (Robbins, S.P. 2009).

2.7.1 Financial Compensation

(Griffin, R.W. 2002) carried out online study of 1913 full time employees & asked people to
rank order 14 potential performance incentives in order of preference. These performance
incentives included common extrinsic regards such as cash bonus, gift cards, award points of
travel awards, as well as intrinsic regards such as having more freedom & autonomy at work,
being able to choose interesting protects, and being assigned to mentor other employees.
Surprisingly, cash bonus was listed as the most preferred incentive by three-out-of -four people
(74%) surveyed Nine-out-of-ten (89%) listed cash bonuses within their top three preferences.
However, the primary issues of the study investigated were whether cash bonuses really
influenced employee attitudes, as well as other business out comes.
The results showed that offering a cash bonus exclusively does it seems to make much impact
motivation, despite the fact that cash bonuses are nearly everyone’s preferred reward. While cash
bonuses are the most preferred reward for three –out-of-four, in among the top, the rewards for
nine –out-of-ten , those who only receive a cash bonus are just slightly more satisfied than those
who get no reward at all.
Furthermore, offering excessively cash bonus only seems to have very little impact on Company
performance, either in terms of increased customer service or increased profitability

19
 CHAPTER THREE

3. Research methodology
3.1. Description of the study area
The study woud be conducted in Bedele town. Buno Bedele is one of the Zones of the Oromia
Region in Ethiopia. Located in 431 km South West Ethiopia. Buno Bedele is bordered on
Southern Nations, Nationalities, and People Region. The town has a latitude and longitude of
8˚26’N 59.99’’N / 36˚20’59.99’’E38.417˚E and an elevation of 1776 meters above sea level.
Based on the figures from central statistical agency of Ethiopia published in 2007, Bedele has an
estimated total population of 829663 of whom 428832 are men and 400831are women.
(Wikipedia, 2023)

3.2. Research Design

The study woud use descriptive type of Research design because it describes characteristics from
data and simples to be collected. In addition to this, it woud describe quantitative information
and qualitative statements collected through interview and questions from both primary and
secondary sources of data. The survey type that is going to be used is cross sectional type of
survey.

3.3. Target population

The target population of the study woud be the employees of Ethio Telecom 15.

3.4. Types and sources of data collection

The researcher collect data from secondary sources of data. Secondary source of information
woud be recent study research papers, various Journals on role of incentive program on
employee motivation, some relevant handouts and course books, and the official website of Ethio
Telecom.

3.5. Methods of data collection

The data needed for this research woud be gathered by secondary. Secondary source of
information woud be recent study research papers, various Journals on role of incentive program
on employee motivation, some relevant handouts and course books, and the official website of
Ethio Telecom.

20
3.6. Sample size and sample Technique
In this study the researcher was used purposive sampling method. The researcher was selected an
appropriate size of respondents depending on the size of total population by using purposive and
judgmental sampling technique. The researcher chooses this sampling technique in order to select
respondents purposely to select out from the whole member. The researcher uses this method
believing that was obtain a representative sample by using a sound judgment, which was result in
saving time and money.
Alternatively, purposive sampling method may prove to be effective when only limited numbers of
people can serve as primary data sources due to the nature of research design and aims and
objectives. The rational to use purposive sampling method is that the number of employees in the
organization is small. Numbers of the total employees is 15 so they do not need the sample and take
all the populations the study was conducted on them.

3.7. Methods of data analysis and presentation

During the study, different types of raw data was collected. The intended outcome was obtained
by using descriptive analysis of data further processed and analyzed. The data was processed,
analyzed and interpreted by using percentage, frequency, tabulating, and lastly, the processed,
analyzed and interpreted data was lead to conclusion and recommendation of the study.

21
 CHAPTER FOUR

4. Data presentation and analysis

This chapter deals with the presentation and analysis of data to assessing the role of incentive
program on employee motivation in Ethio Telecom Bedele district The data were collected both
from the questionnaire which is distributed for employees and interviews for the human
resource manager of Ethio Telecom Bedele district. 15 questionnaires were distributed to
employees and the researcher collected 15 questionnaire study.
A. personal information of the respondent
Table 4.1 sex structure
Sex Number Percentage
Male 8 53.333
Female 7 46.667
Total 15 100
Source: questionnaire survey 2023 EC

The above table (4.1) shows that out of 15 respondent 8(53.3%) are male and 7(4 6.667%) are
female. According to the sample statistics, the gender aspect of workers of Ethio telecom at its
Bedele does district not show such a great disparity though male respondents exceed female by
1 i.e. 6.66 %.
Table 4.2 Age category

Age Number Percentage

Below 25 2 13.333
26-30 6 40
31-35 3 20
36-40 2 13.333
Above 40 2 13.333
Total 15 100
Source: questionnaire survey 2023
The above table (4.2) shows that from the total respondents; 2 (13.333%) were aged under 25, 6
40 %) were aged between 26-30, 3(20%); were aged between 31-35, 2(13.333%), were aged

22
 between 36-40 and only 2 which is 13.333% the total falls 40 years. As the above table
disclose, modal respondents fall between the age of 26 and 30. Young respondents below the
age of 25 constitute 13.333 % of the total sample. The above table also displays that 86.667%
of the total respondents falls above 18 and below the age of 40 which is considered as the
working labor force in Ethiopian case.

Table 4.3 educational status (qualification)

Qualification Number Percentage
th
Below 12 grade - -
Certificate - -
Diploma - -
BA/BSC 12 80
MA 3 20
PHD - -
Total 15 100

Source: questionnaire survey 2023

The above table (4.3); summarizes the educational level of respondents. And among which, 3.1
12(80%) completed Bachelors (BA/BSC) education level and the remaining 3 (20%) have
completed Masters (MA) degree. This shows that, among sample respondents, all of the
employees of Ethio telecom at its Bedele district; under investigation; are educated and
completed above BA degree.

Table 4.4 year of service

Year of service Number Percentage

1-5 8 53.333
6-10 2 13.333

11-15 3 20
Above 15 2 13.333
Total 15 100

Source: questionnaire survey 2023EC 23

 According to the above table (4.4) than half (8) of the respondents have served the company for
less than 5 years and these are frequent respondents (53.333%). The remaining 7(46.667%) of
the respondents are experienced and served Ethio telecom for more than 5 and above years.
This implies that the working culture of the company is relatively less prone to high employee
turnover and employees are also adoptive and consistent with the company.

B Analysis and interpretation of data related to benefit packages of the

organization.
Table (4.5) Employees attitude and payment system of the organization.

item ALTERNATIVES respondent

Number percentage
attitude good 11 73.333
towards the incentive bad 0 0
programs of the neutral 4 26.667
organization Total 15 100
item percentage
satisfied 7 46.667
what is your opinion
Dissatisfied 3 20
about payment system of
Very satisfied 1 6.667
the organization
neutral 4 26.667
Total 15 100

As Table (4.5) employees agrees to wards the incentive program on the organization Is 11
(73.33) 0(0) 4(26.667) are good, bad neutral, respectively.in this information implies the
majority of employees in Ethio Telecom Bedele district is good attitudes. Towards the
incentive program.
According to table (4.5) 7(46.667) of respondents agrees that the organization provides satisfied
payment system 3(20) are dissatisfied, 1(6.667) are very satisfied, 4(26.667) are neutral. This
implies that less than half of employees are satisfied.

24
Table 4.6 benefit package
Item Alternative Respondents
The benefit package of the Number Percentage
organization made you to Yes 8 53.333
Stay in the organization? No 7 46.667
Total 15 100
Source: questionnaire survey 2023

Concerning on the availability of benefit package means based on the above table (4.6)
8(53.33%) of the respondents were agreed on the benefit package which made them to stay in
the organization while some 7(46.667%) agreed that the company benefit package does not
made them to stay in the organization. This shows the Company provides benefit package in
order to retain the employees and also attract new employees and also to generate competent
employees.
Table 4.7 formal ways of motivating employees.
Item Alternative Respondents
formal ways of motivating Number Percentage
employees observed in your Yes 10 66.667
Organization No 5 33.333
Total 15 100
Source: questionnaire survey. 2023

As table (4.7) shows 10(66.667%) of the respondents are answered the organization have
formal ways of motivating employees and the remaining5 (33.33%) of the respondents are
answered the organization not provide formal ways of motivating employees. This information
indicates that more than half of the respondents get the formal ways of motivating employees in
Ethio telecom are good and the remaining 5(33.33%) of the respondents are not agreed this
idea. This shows motivating employees through formal ways in Ethio telecom is high.

25
 Table (4.8) performance of employees determined by level of incentive.

item alternative Respondent

Employees performance number percentage
determined by level of Yes 11 73.333
incentive

No 4 26.667
Total 15 100

Source questionnaire survey 2023

As table (4.8) shows 11(73.333) of the respondent are answered employees performance are
not determined by the level of incentive and 4(26.667) are determine by the level of incentive.
This information indicate that more than half of the employee’s respondent are not determined
by the level of incentive provided.
Table (4.9) Salary scale and other benefit
Item Alternatives Respondent
Salary scale and other Number Percentage
benefit motivated you to Very good 3 20
Stay in the organization. Good 3 20
Fair 5 33.33
Poor 2 13.33
Very poor 2 13.33
Total 15 100
Source: questionnaire survey 2023

As shown in the table above (4.8) 5 ( 33.33%) of respondents agrees that the organization salary
scale and other benefits are fair, 3(20%), 3(20%), 2( 13.33%) and 2(13.33%) of the
respondents agrees that the organization salary scale and other benefits are very good, good,
poor and very poor respectively. this shows 11( 73.33%) of the respondents are agreed that the

26
 organization salary scale and other benefits are enough to stay the organization and the
remaining respondents are not. This implies Ethio telecom provides enough salary scale and
other benefits to their employees.

Table (4.10) positions based on performance

Item Alternative Respondents

The organization provides you to Number Percentage
different position based on your Yes 8 53.33
Performance. No 7 46.667
Total 15 100
Source: questionnaire survey 2023
As table (4.10) shows 8(53.33%) of the respondents are answered the organization provide
different position to employees based on their performance and the remaining 7(46.667%) of
the respondents are answered the organization not provide different position to employees
based on their performance.

This information indicates more than half of the respondents are to get different positions based
on their performance or bases on their output what they contribute for the organization and the
remaining 7(46.667%) of the respondents are not.

Table (4.11) terminal benefit

Item Alternatives Respondent
The organization provided you Number Percentage
Terminal benefits when Yes 9 60
Compared With other No 6 40
organization Total 15 100

Source: questionnaire survey 2023

As show on the above table (4.11) 9(60%) of the respondents said that they agreed that Ethio
telecom provide terminal benefits when compared with other organization but 6(40%) of the
27
 respondents said no terminal benefit provided by the organizations. based on the above
information Ethio telecom terminal benefits program is more or less satisfactory when
compared with other organizations.
Employees performance has developed by using training and creating an opportunity to
improve their education level outside our country.

Table 4.12 career advancement

Item Alternatives Respondent
Management of the organization Number Percentage
is provided you clear path for Yes 7 46.667
your career advancement No 8 53.333
Total 15 100
Source: questionnaire survey 2023

As table) 4.12) shows, 7(44.667%) of the respondents are agreed on that the management of the
organization providing a clear path for their career advancement and the other 8 (53.333%) of
the respondents are agreed on that the management of the organization not providing a clear
path for their career advancement. Generally as the information indicates the management of
the organization provides a clear path for career advancement of the employees are not
satisfied. So that the management of the organization should provide a clear path for career
advancement in order to motivate and increase the performance of employees.

Table (4.13) benefit and recognition

Item Alternatives Respondents
Number Percentage
Your future hope of getting better Yes 5 33.333
benefit and recognition made you to No 10 66.667
stay in the organization Total 15 100

Source: questionnaire survey 2023

According to the above table (4.12) less than half 5( 33.333%) of the respondents agreed on that
better benefit and recognition provided by the Ethio telecom make employees to work hope fully
28
 and the remaining 10(66.667%) of the respondents disagreed on the above idea. This
information implies more than half of Ethio telecom employees are hopeless to get benefit and
recognition. So Ethio telecom must to give benefit and recognition to retain their employees.

Table (4.14). Type and techniques

Item Alternative Respondents
Number Percentage
The organization provides Never 3 20
both monitory and non- Sometime 8 53.333
monitory rewards Often 2 13.333
All of the time 2 13.333
Total 15 100
Source: questionnaire survey 2023

As shown in table (4.14) 8(53.333%) of respondents agrees that the organization sometimes
provide both monitory and non-monitory rewards, the other 2(20%), 2(13.333%) and
2(13.333%) responded never, often and all of the time respectively. this implies that majority of
respondents get both monitory and non-monitory rewards by the organization.
Ethio telecom use financial and non-financial rewards in order to motivate employees and
make them competent. In this response, financial term concerns about monitoring rewards
which given in terms of money and non-financial are incentives which deal with training and
development practice.
Table (4.15) response of respondents towards future hope of staying on the organization
Item Alternatives Respondent
Number Percentage
Future hope of staying Higher 9 60
in the organization Much higher 1 6.667
Much lower 3 20
Slightly lower 2 13.333
Total 15 100
Source: questionnaire survey 2023.

29
According to table (4.15), 9(60%) of respondents have high commitment to stay in the
organization, 1(6.667 %), 1(6.667%) and 3(20%)2 have much higher, much lower, and
slightly lower commitment to stay in the organization respectively. based on this information
employees Future hope of staying in Ethio telecom are more or less good.
Table (4.16) organizational payment
Item Alternatives Respondent
The organization Number Percentage
provides enough Very high 2 13.333
payment to meet the High 3 20
requirement of life Adequate 8 53.333
Low 1 6.667
Very low 1 6.667
Total 15 100
Source: questionnaire survey 2023
As shown in the table above (4.16) 8(53.333%) of respondents agrees that the organization
provides adequate payment, 2(13.333%), 3(20%), 1(6.667%) and 1(6.667%) of the respondents
agrees that the organization provides very high, high, low and very low payment respectively.
this shows 13(86.667%) of the respondents are agreed that the organization provides enough
payment to meet the requirement of life and the remaining are not. This shows Ethio telecom
provides enough payment to their employees.
Table (4.17) organizational bonuses
Item Alternatives Respondent
The organization Number Percentage
provides Bonuses for Very high 3 20
workers According to High 5 33.333
their consistent with their Adequate 2 13.333
Level of
performance. Low 3 20
.

Very low 2 13.333

Total 15 100
Source: questionnaire survey 2023
30
According to table (4.17), 5(33.333%) of respondents agrees that the organization provides high
bonuses, 3(20%), 2(13.333%), 3(20%) and 2(13.333%) of the respondents agrees that the
organization provides very high, adequate, low and very low bonuses respectively. this shows
10(66.667%) of the respondents are agreed that the organization provides enough bonuses for
workers and the remaining are not. This implies Ethio telecom provides enough bonuses to their
employees.
Table (4.18) organizational financial incentives

Item Alternatives Respondent

Num
The organization ber Percentage
provides financial Very high 2 13.333
incentives To employees High 3 20
when they work Adequate 6 40
Professionally. Low 3 20
Very low 1 6.667
Total 38 100
Source: questionnaire survey 2023

According to table (4.18), 6(40%) of respondents agrees that the organization provides adequate
financial incentives to employees, 2(13.333%), 3(20%) 3[20]
%) and 1(6.667%) of the respondents agrees that the organization provides very high, high, low
and very low financial incentives to their employees respectively. this shows 11(73.333%) of the
respondents are agreed that the organization provides financial incentives for employees and the
remaining are not. The above information implies Ethio telecom provides enough financial
incentives to their employees.

31
 Table (4.19) employee training
Item Alternatives Respondent
Employees are trained Number Percentage
Continuously Very high 3 20
High 2 13.333
Adequate 4 26.667
Low 5 33.333
Very low 1 6.667
Total 15 100
Source: questionnaire survey 2023

According to table (4.19), 5(33.333%) of respondents agrees that employees training in Ethio
telecom are low,3 (20%), 2(13.333%), 4(26.667%) and 1(6.667%) of the respondents agrees that
Ethio telecom trained employees very high, high, adequate and very low respectively. this shows
the majority of employees in Ethio telecom 9(60%) of the respondents are agreed that the
organization trained employees and the remaining are not. depend on the above information
Ethio telecom provides training to their employees.

Table. (4.20) organizational services providing

Item Alternatives Respondent
Providing services
achieved Number Percentage
Customer satisfaction. Very high 3 20
High 4 26.667
Adequate 6 40
Low 2 13.333
Very low 0 0
Total 15 100
Source: questionnaire survey 2023
According to table (3.20), 6(40%) of respondents agrees that the organization providing adequate
services, 3(20%), 4(26.667%), and 2(13.333%) of the respondents agrees that the organization
32
provides very high, high and low services respectively. this shows 13(86.667%) of the
respondents are agreed that the organization provides services and the remaining are not. This
information implies Ethio telecom provides enough services.

Table (4.21) organizational customer contact

Item Alternatives Respondent

The organization interested Number Percentage

in contacting the customer Very high 2 13.333
Constantly. High 6 40
Adequate 4 26.667
Low 2 13.333
Very low 1 6.667
Total 15 100
Source: questionnaire survey 2023

According to table (4.20), 6(40%) of respondents agreed Ethio telecom customer contact is
high, 2(13.333%), 4(26.667%), 2(13.333%) and 1(6.667%) of the respondents agrees that the
organization provides very high, adequate low and very low customer contact in Ethio telecom.
this shows (80%) of the respondents are agreed that the organization customer contact is good
and the remaining are not good. depend on the above information Ethio telecom customer
contact is high.

 How do you evaluate the general benefit package of the organization?

Based on the questionnaires survey information, most of the respondents are answered there is
significant benefit package program in Ethio telecom compared with other governmental
organization and some respondents are answered there is a benefit package program in Ethio
telecom but it is not satisfy and enough. So the researcher concludes Ethio telecom provides a
good benefit package program to their employees.

Both intrinsic and extrinsic incentives are found in Ethio telecom and over all incentive programs
of the organization are good but it should be improved for the future.
33
Incentive program play a great role in motivating employees and it foster their performance most
of employees which are worked in the company are intuited to work because as the manager said
employees are asset for one organization. So Ethio telecom provides different benefit program
which in their mind the manager of the Ethio telecom believe in incentive programs.

 What motivate you to increase your performance in the organization?

According to the respondent’s answer the following activities motivate and increase the
performance of employees in Ethio telecom head office;
 Monetary rewards program
 Training and development practice
 Bonus benefit program
 Good salary scale
 Peace full working condition
 Clear carrier growth
 Organizational culture
 The manager of human resource good working habit

The organization creates motivation for employees through training and financial rewards. The
training given for the employees motivates and enhances their performance to develop their
knowledge and talents. Mostly the new employees are trained. Ethio telecom also motivate their
employees by providing financial rewards, medical insurance, reward during holiday,
transportation coverage, overtime, fringes benefits. Through the above methods the organization
motivates and enhances the performance of their employees.

34
 CHAPTER FIVE

5. CONCLUSION AND RECOMMONDATIONS

5.1 CONECLUSION
Since the focus of this study was to assess the role of incentive program on employee‟s
motivation in Ethio-telecom yirgalem district and to give possible solutions for the identified
problems, based on the findings presented the analysis come up with the following conclusions.
 Ethio-Telecom has incentive program in order to motivate employees.
 Concerning the type of incentive method; the organization uses both financial
and non-financial Ethio-Telecom head office has incentive program in order to
motivate employees.
 Incentive which makes the employees to perform well. But some employees are
not satisfied by financial incentives which are provided by the organization.
 The benefit package of the organization; which made employees to stay in the
organization; is good but it is not for all employees.
 The organization provides employees with different positional growth based on
their performance. But it is not always.
 When compared to other organizations, Ethio-Telecom is good in providing
terminal benefits, but not necessarily for all employees.
 The Management of the organization providing clear path for career
advancement for employees is not satisfactory.
 Motivating employees through formal ways in Ethio-telecom is good, but some
employees are not well encouraged by such activity.
 Most of the time, Ethio-telecom provides enough salary scale and other fringe
benefits to their employees.

 More or less, Ethio-telecom gives different position to their employees based on

their performance or based on their output i.e. what they contribute for the
organization based on the principle of internal labor market.
 Majority employees are hopeless in getting better benefit, recognition and
position and get discourage them to stay in the organization.
35
  Ethio-telecom provides both monetary and non-monetary rewards to their
employees, but excludes some employees.
 Ethio-telecom provides enough salary scale payment to meet the requirement of
life to their employees.
 The organization followed bonus plus fringe benefit strategy for workers that is
based on consistent with their level of performance is high.
 Ethio telecom has high achieved customer satisfaction.
 The organization’s relation with its customer is high i.e. ethio-telecom frequently
discusses with its customers regarding service providing and customer delivery
system.

5.2 Recommendation

Based on the finding and conclusion drown, the following recommendations are made

 It is found that there is incentive programs, Ethio telecom would encourage and keep it
up its current practices on incentive programs.
 The organization should be continuously providing both monitory and non-monitory
incentive programs in order to generate competent employees.
 Ethio telecom should focus on those employees not satisfied by the benefit package
program of the organization, by asking them about the preferable benefit package to stay
in the organization.
 Ethio telecom should provide employees with different positions for those performing
well.
 Ethio telecom should increase the terminal benefits for their employees to be competent
organizations.
 Ethio telecom should provide clear path for employees for their career advancement.
 Ethio telecom develops both monitory and non-monitory rewards to their employees.
 Ethio telecom improves and keeps it up enough salary scale and other benefits to their
employees.



  The organization must to improve better benefit; recognition and position to their
employees and get encourage them to stay in the organization.
 Ethio-telecom provides enough salary scale payment to meet the requirement of life to
their employees and keep it up to the future.
 Bonus plus fringe benefit strategy for workers that are based on consistent with their
level of performance in the organization to all employees in the future.
 Ethio telecom service deliver must continuous in the future to achieved customer
satisfaction.

 Ethio-telecom frequently discusses with its customers to improve and increase customer
relationship in the future.

Some employees are not satisfied by the incentive programs of the organization, so Ethio
telecom should take measure adjustment on the incentive program. It is clear that satisfied
employees will be more effective and efficient towards the organizational goal. Therefore the
organization would strive to motive employees by using different incentive program.

37
 References
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Mc Grow Hill, New York.
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 Arun Monapp, (2004), 11 edition, personal management, New Delhi.
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 Rustoms Daver, (2005), 10 edition, personnal Management and Industrial relations,
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 Stepen P.Robbins,(2005), 5 edition, Management, New Delhi.
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behavior, By Mc Graw Hill, New York
 Al -Jahni, A, (1998), Evaluation of Incentive System in the General Directorate of
Passports from the Perspective of Workers, Case Study on Jeddah Passports Department,
Master Thesis, Naif Arab Academy for Security Sciences, Riyadh, Saudi Arabia.
 Al-Harthi, D. (1999), Raising the Efficiency of Workers and Relationship with Financial
and Moral Incentives, Case study on the Civil Defense Personnel in Riyadh, Master
Thesis, Naif Arab Academy for Security Sciences, Riyadh, Saudi Arabia.
 Jadallah, M. (1997), The Impact of Incentives in Raising the Efficiency of Workers
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Behavior, Brain Activation, and Individual Differences, Cogn, Affect, Behav,Neurosci,"
8(99). Palmer, W. (2012),"Incentive and Disincentive: Will They Affect Performance."
 Aldubekhi, I. (1991). Incentives and Rewards Assessment in the Saudi Customs as A
mean to Curb Smuggling, Riyadh: Institute of Public Administration.
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 Angari, A. (1999). Incentive systems and their role in raising the level of performance of
employees, case study. on workers in the Emirate of Riyadh Region, Master Thesis, Naif
Arab Academy for Security Sciences, Riyadh, Saudi Arabia.
 Hasan, R. (2002), Behavior of the Organizations, Alexandria, Aldar Aljamyiah.

 Johnson, P. M. (2005), a Glossary of Political Economy Terms. [Online]

Available:http://www.auburn.edu/~johnspm/gloss/incentive. (Jan 27, 2010).
 Lawzi, M. (1995), Individuals' Attitudes Working in Public Institution towards Job
Incentives, Derasat, Humanities Studies, Jordan.
 K.S. Allen and R.H. Kilmdnn, (April 2001) “The Role of the Reward System for a Total
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(in press). Jeffrey, S. A., & Shaffer, V. (2007). Compensation and Benefits Review, The
motivational properties of tangible incentives. 39(3), 44-44.
 Martocchio, J. J., & Harrison, D. A, (1993), to be there or not to be there? Questions,
theories, and methods in absence research. Research in Personnel and Human
Resource Management, 11: 259–329.
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 Milkovich, G.T. & Newman, J. (1990). 8 edition Compensation. BPI/lrwin: Homewood,
n... Guzzo, R. A., & Dickson, M. W. (1996). Teams in organization: Recent research on
performance and effectiveness. Annual Review of Psychology, 47, 307-338
 Bartol, K.M. & Hagmann, L.L. (1992) Team-based pay plans: A key to effective
teamwork. Compensation and Benefits Review, 24 (6), 24-49
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 Gray, (2004), 9 edition, leading managing and developing policies.
 Hackman J.R. (1987) the design of work teams, sterling C. Evans library, Texas a&M
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of the Incentives and Reward System in Enhancing Employee's Performance,
Jordan 39
 APPENDEX 1

Metu University

SCHOOL OF COMMERCE

Department of Marketing Managment

Questionnaire for employees

Dear Respondent, This questionnaire is designed to collect data for a research paper that is in
partial fulfillment of BA degree in Marketing Management at MU. The purpose of the research is
to study, the role of incentive program on employ motivation in case of Bedelle district. Please
see each question carefully and give the appropriate answer and write your statement on the
provided box and blank space.

General instruction

 You are not required to write your name.


 You are kindly asked to read carefully and respond to each question in the
questionnaire.
A) Personal information

1 Age Below 25

26-30 31-35 36-40 above 41

2, sex male female

3 education status

Below 12th certificate diploma

BA/BSC MA PHD
 40

4. Year of service in your current position

1-5 years 6-10 years 11-15 years above 15 years

B) Questionnaire related to benefit program and employee performance.

1. What is your attitude towards the incentive programs of the organization?

Good. Bad. Neutral

2, what is your opinion about the payment system of the organization?

Satisfied. Neutral

Very satisfied. Dissatisfied

3, Did the benefit package of the organization made you to stay in the organization?

Yes No

4 .Does Formal ways of motivation employees observed in your organization?

Yes No

5. Do you think that performance of employees determined by the level of incentive provided?

Yes No

6 how much salary scale and other benefit motivated you to stay in the organization?

Very poor poor fair good very good

7 does the organization provide you to different position based on your performance?

Yes No

8 did the organization provided you terminal benefit when compared with other organization

Yes No
 41

9 did management of the organization is provided you clear path for you career advancement?

Yes NO

10. Your future hopes of getting benefit and recognition made you to stay in the
organization?

Yes NO

11 the organization provides you both monitory and non-monetary rewards?

Never Sometime often All of the time

12 , your future hope staying in the organization is

Much lower slightly lower Higher Much higher

13, the organization provides enough payment to meet the requirements of life?

Very High High adequate low Very low

14, The organization provides bonuses for workers according to their consistent with their level

of performance?

Very High High adequate low very low

15, the organization provides financial incentives to employees when they work professionally?

Very High High adequate low very low

16, Employees are trained continuously.

Very High High adequate low verylow

17, providing services achieved customer satisfaction.

Very High High adequate low very low

 42

18 The organization interested in contacting the customer constantly?

Very High High adequate low very low

19, How do you evaluate the general benefit package of the organization?

______________________________________________________________________________
______________________________________________________________________________
_________________________________________

20, what motivate you to increase your performance in the organization?

______________________________________________________________________________
__________________________________________________________
 43

APPENDEX 2

Interview questions for the general managers.

1) How do you describe the incentive program of your organization?

2) Do you think incentive programs have contribution in motivating your employees?

3) What type of incentive program your organization provides to motivate and retain competent
employees to stay in your organization?

4) How can your organization create motivation for employees to increase their performance?
5) What mechanism do you use to develop your employees performance?

44