Zeitschrift für Wirtschaft und Finanzen

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The Application and the Effect of Extrinsic and Intrinsic Rewarding Models on Employee Output of Commercial Banks in Puntland


Sawda Awil Ali and Luqman Yasin Gelle

The purpose of this study is to examine the application and the effect of extrinsic and intrinsic rewards on employee performance in commercial banks in Puntland. Amal Bank which is among the oldest in the state has been considered as the case for this study. The study adopted a regression research design to establish the effect of the variables in question. Both simple and purposive sampling techniques have been employed to have 28 participants from Amal Bank respond to the study tool which was semi-structured questionnaire. Data was analyzed using descriptive statistics and regression analysis to derive the conclusions of this study. Majority of the respondents have attained Bachelor’s and Master’s educational levels and have worked in the banking sector for more than 4 years. Of the two variables, extrinsic reward is the most significant predictor to performance of commercials banks explaining up to 48.7% change in the performance of employees while intrinsic rewards accounted for a change of up to 31.1%. The combination of the two in the rewarding of employees presented a value of 2.67. Based on the study findings, it is recommended that proper training, known rewarding strategies, and promotions be given to employees, irrespective of their gender and other social characteristics. The management should also create a culture of visibly recognizing high performing employees to encourage them and increase their morale as this will eventually motivate others to perform better. Furthermore, while employees may vary physically and mentally, the management should align their tasks with their edge of abilities, and respond to their needs individually.

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