Association between rewards and employee performance: An empirical research on Omani banks

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Abstract

The current paper aims to explore the association between rewards and employee performance in the Oman banking sector. This study evaluates data of 500 bank employees across 18 listed banks in the Sultanate of Oman. A theoretical framework is discussed to assess the effects of rewards on employee performance. According to this literature review, it is proven that rewards influence employee performance. Güngör’s (2011) study shows that organizations develop reward strategies to motivate and increase employee performance. Salah (2016) proves that rewards have a strong influence on employee performance, and he further states that incentives encourage employees to work with purpose and increase organizational performance. The outcomes are examined using factor analysis, structural equation modeling, and multivariate analysis of variance. The results of this study provide critical insights into how companies can adopt effective reward management to sustain and compete in the dynamic business landscape and modulate performance management in Omani banks. Overall, a statistically significant association between the rewards system and employee performance in Oman’s listed banks is established in this study. The study further underscores the need to design and evolve employee-centric policies to get optimum performance. It also offers guideposts for managers and policy planners working in the Middle East countries’ banking sector to develop holistic policies to succeed in stiff, cut-throat competition and ensure participatory management for best performance. Herein, extrinsic and intrinsic rewards are studied concerning their impact on the performance matrix. A proper insightful reward management system may lead to optimum performance, better outcomes, and a robust financial plan.

Keywords: Extrinsic Rewards, Intrinsic Rewards, Employee Performance, Rewards Management, Omani Banks, Middle East, Banking Sector

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

Acknowledgements: This research has received financial support from the College of Banking and Financial Studies (Grant Number: 4001/2018-2019). The author wants to thank Dr. Anand for guiding in developing the internal research grant proposal. Special thanks go to Mr. Madhu, R-programming trainer, and Ms. Sujatha Nair for proofreading the work.

JEL Classification: M10, M12, M50, M52

Received: 09.11.2020
Accepted: 15.01.2021
Published online: 18.01.2021

How to cite this paper: Kolluru, M. (2021). Association between rewards and employee performance: An empirical research on Omani banks. Corporate Governance and Sustainability Review, 5(1), 15-21. https://doi.org/10.22495/cgsrv5i1p2