Chapter one

1. Introduction
1.1. Backgroud of the study
Compensation can be defined as the set of factors that cause people to behave in certain ways
(Schwartz, 2006). Compensation is derived from the term motive which is a reason for doing
something (Amstrong, 2008), the reason can either be internal (intrinsic) or external (extrinsic)
factors (Herzberg et al, 1957). Compensation can be described as goal-oriented behavior
(Amstrong, 2008). Drafke (2002) defines motivation as simply an incentive to act.

Compensation is among the key concerns of organizations in the modern business environment,
as it has been identified to be critical in achieving business goals and objectives. This means
giving close attention to how individuals can best be motivated to achieve objectives set for them
(Amstrong, 2008). Amstrong (2008) continues to say that Compensation can be through
incentives, rewards, and positions all aimed at ensuring that the individuals deliver results in
accordance with expectation of management.

Compensation determines how a person will exert his or her effort. It represents the effort will be
exerted (DeNisi and Griffins, 2008). Because of motivation's role in understand and to structure
the work environment to encourage productive behaviors and discourage those that are
unproductive. (Jex and Britts, 2008)

Compensation is important in team-based environments as well as where employees work

independently. Motivation involves aligning employee goals and values with the organization’s
mission and vision in order to create and maintain high levels of performance (Campbell, 2007).
Campbell (2007) adds that as the marketplace becomes increasingly competitive, it is evident
that firms must especially appreciate the role of employees towards establishing a competitive
edge and that individuals motivated are top performers who consistently provide high quality
results; maintain high levels of productivity and overcome challenges and obstacles.

On the other hand, according to Amstrong (2008) de-motivated employees exhibit signs of low
morale, this can have destructive implications in the organization. Amstrong (2008) continues to
say that among the more significant warning signals of de-motivated employees are high rates of
absenteeism, tardiness, high levels of employee turnover, sabotage, low pride in their work,
wastage, low job satisfaction, endless grievances, indiscipline and lack of team spirit
(Armstrong, 2008). In order to curb these and other problems that can escalate into more serious
crises in the organization, de- Compensation should be detected early and necessary actions
taken, these may include counseling of de-motivated employees, clearly explaining their roles,
responsibilities and rewards and ensuring their expectations match those of the organization.

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Key factors that determine employee Compensation are satisfaction, recognition, appreciation,
inspiration and compensation (Bowen, 2000). Organizations that recognize the importance of
motivating employees often implement strategies that consistently motivate their employees to
achieve the organizations objectives. Such strategies for improving Compensation include
compensation, employee participation, feedback and work environment which ensure that
employees’ needs and requirements are met (Bowen, 2000). Clegg and Birch (2002) argues that
the thought of incentive is in itself motivational, in fact most motivation comes from anticipation
than the delivery of the incentive itself.

Compensation is one of the key drivers of motivation because humans are naturally inclined to
perform better when they perceive that they will get sufficient payment or returns from their
efforts. While people exert effort for different reasons, today’s competitive economic
environment coupled with the consumer society has made compensation arguably the most
important motivation factor. Most people are motivated by money at least for their basic needs
and wants.

Compensation in any form is the most obvious extrinsic reward; it provides the carrot that most
people want. (Amstrong, 2008).DeNisi and Griffins (2008) defines compensation as the set of
rewards that organizations provide to individuals in return for their willingness to perform
various jobs and tasks within the organization.
Dashen Bank consists of Chloride Exide (K) Ltd, Chloride Exide (T) Ltd, Battery Masters (U)
Ltd and Chloride Exide (R) Ltd. The company was first introduced to Kenya in 1963 as part of
Chloride group PLC in the UK to retail and distribute Chloride Exide Batteries. It has since
become the largest battery and solar systems distributor with 17 branches spread across Kenya
and three other fully fledged sister companies in Tanzania, Uganda and Rwanda. The company
has its head offices located in the Industrial Area of Nairobi at Exsan House off Enterprise road;
it has depots in other major towns in Kenya.

1.2 Background of the organization.

Dashen Bank was established as per the intent of the new policy and the Ethiopian investment
code. It came into existence on September 20, 1995 according to the commercial code of
Ethiopia, 1960, and the licensing and supervision of Banking Business proclamation number
84/1994.

The founding members were 11 businessmen and professionals that agreed to combine their
financial resources and expertise to form this new private bank.

The Motive behind Its Name, “Dashen Bank”

Obviously, “RasDashen” is the highest mountain in Ethiopia. Beyond its length, it is also the
habitat of rare wild animals; Walia Ibex, Chelada Baboon, and the Hammergeyer-the beautiful
bone breaker eagle. These unique features of the mountain coincided with the interests of the
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founding members of the bank prompted them to adopt this great name and epitomize their
aspiration. Rightly, reaching the top of the banking business in dynamic and competitive
business environment symbolized the highest peak, while the efficient and unique services the
bank caters for the public through state- of-the-art computer technology and carefully selected
and trained man-power equated with the rare wild animals. Today, indeed, reliability, efficiency
and modernity is the hallmark and the Bank’s distinguished features which make them
synonymous with Dashen Bank as much as the rare animals are synonymous with RasDashen
Mountain.

The Business Purpose of the Bank

The business purpose of the bank as enshrined in its basic documents is to render commercial
banking activities both at domestic and international levels.

Mission of Dashen Bank

“Provide efficient and customer oriented domestic and international banking services,
overcoming the continuous challenges for excellence through the application of appropriate
technology”.

Vision of the Bank

“In as much as mount Dashen excels all other mountains in Ethiopia, Dashen Bank will continue
to prove unparalleled in banking service”.Source:www.dashenbanksc.com

The Legal and Policy Environment

Before analyzing the performance of Dashen Bank, it is important to review the legal framework
and the policy environment under which the bank is operating. A properly designed legal and
policy environment will provide a safe environment for the bank to perform well and in turn
determine its performance. Therefore, this section explains how government policies influence
the selected bank and its competence in the banking industry.

Banks are not expected to perform well if they are not properly regulated. The importance of
financial sector regulation is emphasized based on the assumption that markets are not best
dynamic regulators and the likelihood of market failures.

If there is inadequate bank regulation, banks may be inclined to lend to borrowers with
potentially high yielding investment projects (in search for higher return) that are more risky.
This in turn will increase the risk of default on bank loans and eventually may lead to financial
instability and bank failures. The desire of regulatory agencies to prevent bank failures had led
them to specify minimum requirement for the bank equity capital and restrict the amount of risky
asset that the bank can hold. In accordance to the above argument, the Ethiopian case will be
presented next.

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 The Legal framework
The National Bank in Ethiopia is the regulatory agency that provides licenses, supervise, and
regulate banks and other financial institutions. “Monetary and Banking Proclamation No.
83/1994”, defines the powers and responsibilities of the bank.In addition to defining NBEs duties
and responsibilities, the proclamation specifies the capital and reserve requirements, and the
needed financial statements. Proclamation No. 84/1994, on the other hand, outlines the
requirements and procedures for undertaking a banking business in Ethiopia.

In line with the above proclamations, the National Bank of Ethiopia set the following financial
obligations and limitations.

A) Maintenance of the Required Capital

In accordance with Directive No. SBB/24/99 of Article 13(1) and 36 of Proclamation No.
84/1994, the minimum paid up capital of any bank should be birr 75 million, which shall be fully
paid in cash or maintain minimum total capital levels not less than 8% of risk weighted assets. If
a bank fails to comply with the capital requirements specified above, the National Bank of
Ethiopia may prohibit such bank from engaging in any additional business until the deficiency on
capital is corrected; require such bank to merge with another bank; close such bank; or take away
other measures it considers fit. And these directives were enforced as of the first day of June,
1999.
B) Maintenance of Legal Reserve
Article 41 of the Monetary and Banking Proclamation No. 83 1994, and Article 13(4) of the
Licensing and Supervision of Banking Business Proclamation No. 84 1994, require every bank to
transfer annually 25% of its annual net profit to its Legal Reserve Account until such account
equals its capital.

When the legal reserve account equals the capital of the bank, the amount to be transferred to the
legal reserve account shall be 10%of the annual profit. These Directives were enforced as of 21 st
day of August 1995.

C) Maintenance of Adequate Liquidity

Article 16 of Proclamation No. 84/1994 imposes a liquidity requirement on banks to maintain
liquid assets amounting to not less than 15% of their total current liabilities to avoid critical asset
or liability mismatches.
For the purpose of this article, liquid assets shall include: cash, deposits with the National Bank
and other local and foreign banks having acceptance by the National Bank, other assets readily
convertible into cash expressed and payable in Birr or foreign currency having acceptance by the
National Bank, and such other assets as the National Bank may from time to time declare to be
liquid assets.

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D) Maintenance of adequate reserve balance
Article8; 2.1 of Directives No. SBB/45/2008 states that, any bank operating in Ethiopia shall at
all times maintain in its reserve account 15% of all birr, and foreign currency deposit liabilities
held in the form of demand (current ) deposits, saving deposits and time deposits.
Deficiencies in reserve balance are subject to a penalty and the penalty shall be assessed at a rate
twice the current average rate of interest on loans and advances charged by banks, computed on
the amount of the deficiency in reserve and multiplied by the number of days over which the
reserve account remained deficient. The National Bank may waive the penalty stated here in
above grounds it considers acceptable.
E) Elimination on Accommodation
Article 41 of the Monetary and Banking proclamation No. 83/1994 and article 71(1) of the
Licensing and Supervision of Banking Business Proclamation No. 84/1994 state that no bank
shall, directly or indirectly, except with the written approval of the bank, grant or permit
unsecured loans, advances or credit facilities of an aggregated amount in excess of birr 30,000
(thirty thousand Birr) to its directors, whether severally or jointly with any person. This
limitation was enforced as of September 1st 1995.

F) Limitation on Investment of Banks

These directives are issued by the National Bank of Ethiopia pursuant to the authority vested in it
by article 41 of the Monetary and Banking Proclamation No. 83/1994 and by article 36 of the
Licensing and Supervision of Banking Business Proclamation No. 84/1994.
1) No bank shall engage in insurance business but mat hold up to 20% in an insurance company
and up to a total of 10% of the bank’s equity capital in such business.
2) Banks are prohibited from engaging directly in non-banking businesses such as agriculture,
industry and commerce.
3) A bank may hold shares in a non-banking business only up to 20% of the company’s share
capital and total holdings in such business shall not exceed 10% of the bank’s networth.
4) A bank’s equity participation in another bank shall be subject to prior authorization
byNational Bank of Ethiopia.
5) No bank shall commit more than 20% of its net worth in real estate acquisition and
development other than for own business premises without prior approval of the National
Bank of Ethiopia.
6) A bank may not invest more than 10% of its net worth in other securities.
7) The aggregate sum of all investments at any time (excluding investment in government
securities) may not exceed 50% of the bank’s net worth, without prior approval by
theNational Bank of Ethiopia.
8) Dealing in securities shall be done by banks only through a limited liability subsidiary
company where in the holdings of the bank shall not exceed 10% of its equity capital.These
Directives were enforced as of April 8, 1996.

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 1.3 Statement of the problem
While compensation is arguably one of the key drivers of motivation and one of the most studied
areas, doubts have been cast by Herzberg et al. (1957) and Amstrong (2008) on the effectiveness
of compensation. They argued that, while lack of it causes dissatisfaction, its provision does not
result in lasting motivation. The effects of compensation on motivation vary from organization to
organization.
Most people are motivated by money at least for their basic needs and wants (DeNisi and
Griffins, 2008). Employee motivation through compensation can be in several forms including
salary raises, performance bonuses, commissions, profit sharing and other extra benefits such as
vacations, cars and other tangible items that are used as rewards (Campbell, 2007). These
compensation systems can be categorized as direct financial payment and indirect financial
payments (Dessler, 2004).
Nelson and Spitzer (2003) states that in today’s work environment, there is more change and
uncertainty, there is increased need for empowered employees, there is decline in traditional
incentives, there is rise of nontraditional incentives and there is increased use of variable
compensation. Studies have also shown that compensation programs and the methods of
administration affect employee motivation (Bowen, 2000). Many researchers have focused on
satisfaction, recognition, appreciation and work environment as employee motivators in different
organizations (Kosgei, 2011). However none has studied employee compensation at Dashen
Bank share Company.
It is not clear what methods were used to determine employee compensation, what direct and
indirect financial programs were offered at Dashen Bank share Company and their effects on
employee motivation and lastly the non-financial benefits offered and their effect on employee
motivation. This study sought to address this gap by enquiring on the effect of compensation on
employee motivation at Dashen Bank share Company.

1.4 Objectives of the study

1.4.1.General objectives
The general objective of this study was to enquire on the effect of compensation on employee
motivation at Dashen Bank share Company.

1.4.2.Specific objectives
It is to establish the methods used to determine employee’s compensation at Dashen Bank share
Company.

It is to establish the extent to which the direct financial payments affect employee’s motivation at
Dashen Bank share Company.

It is to establish the extent to which benefits affect employee’s motivation at Dashen Bank share
Company.

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 1.5 Research questions

To this end the proposal will attempt to address the following basic questions:
The following questions are what the research seeks to find answers to:
i. What is the importance of compensation management on employee performance at
Dashen Bank share Company?
ii. What compensation packages are available at Dashen Bank share Company?
iii. What are the problems associated with compensation management at Dashen Bank
share Company?
iv. What other forms of compensation can be employed and how can compensation be
better managed to influence employee performance at Dashen Bank share Company?

1.6 Scope of the study

This study would intend to address different issues regarding the effect of compensation
employee productivity on Dashen Bank Hawassa branch. The study would be taken specifically
in Dashen bank institution as a way for practical considerations.
1.7. Significance of the study: what are the benefits of this study?
Having studied Dashen Bank share Company, an entity in the financing industry and a market
leader in distribution of the automotive batteries and renewable energy solutions, the study is
important to a number of stake holders as follows:-
1.7.1 To the researcher

Currently the banking industry is operating under a very highly dynamic environment,
characterized by high competition and fast technological changes. The study will be of
importance to other researchers in future who may be interested in studying motivation under
these very high dynamic conditions and also the “dot com” generation.

1.7.2To the organization in question (the case study)

The study will assist the overall management team in the company as it will show the trade off
point between compensation and employee motivation. This is particularly important to the
departmental heads that will need to the knowledge on how to motivate their staff to achieve the
set objectives effectively and efficiently. Specifically to the Human Resources Manager, the
study will help highlight any areas of concern and strength. This will help in attracting and
retaining the staff.

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 1.7.3To the country at large

Dashen Bank share Companyorganization specializing in giving financial service country wide.
The study will be important for the Governments of Ethiopia to understand what motivates the
staff and hence contributes to the company growth. It would be important for the government
policy makers to know of areas in which they can provide the company with further incentive,
for such a worthy course of growing the reliance for engaging world trade organization (WTO)
as well as for encouraging foreign direct investment.

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 Chapter Two
2 Review of Literatures

This chapter will review the critical literature of current knowledge including substantive
findings, theoretical and methodological contributions to the area of employee’s compensation
and the effect on employee’s motivation. The proposal will address three research objectives
namely; to establish the methods used to determine employee’s compensation, to establish the
extent to which direct financial payments affect employee’s motivation and finally to establish
the extent to which benefits affect employee’s motivation.
This Proposal project will examined the Effect of compensation schemes by examining previous
studies and literature on the issue and by conducting a study on employees at Dashen Bank S.C.

2.1 Methods Used to Determine Employee’s Compensation

According to Gomez et al. (2012), employee’s compensation is the single most important cost in
most firms, in some manufacturing organizations it accounts for 60% of the total cost. However,
this is even higher in some service organizations and this means that the effectiveness with
which compensation is allocated can make a significant difference in gaining or losing the
competitive edge. The same is echoed by Dessler (2008) who says that developing a good
employee compensation plan is important for any organization and its employees. He continues
to say that improperly developed compensation plan may result to a wage rate that is too high
hence unnecessary expenses; while paying less may guarantee inferior employee quality and
high employee turnover. At the same time internally inequitable wage rates reduce employee
morale and cause endless complains from the employees.
The most important aspect of any compensation plan is the relationship that exists between
performance and reward (nelson and spitzer, 2003). for that reason, administration of
compensation in any organization involves designing a cost effective pay structure that will
attract, motivate and retain competitive employees (decenzo et al, 2007). amstrong (2008) also
notes that one of the aims of reward management is to motivate people and obtain their
commitment and engagement.

According to Dessler (2008) there are several factors that affect the design of any compensation
plan, these include, legal considerations, union influences, company policies and competitive
strategic objective and lastly internal and external equity. To fully understand how any
organizations determine its employee compensation plan one need to look at how employee

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compensation plans are categorized, the factors used to determine the compensation plans and
the process of developing the compensation plans.

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 2.1.1CategorizationofEmployee’sCompensation.
According to Dessler (2008) there are two broad ways of categorizing compensation, namely;
Job-based approach and Skill-based approach. The Job-based approach is the most traditional
and widely used type of compensation plan. According to Gomez et al. (2012) the plan assumes
that jobs are very well defined and titled, for example a cashier, a matron or a chef. The works in
these jobs is done by people who are paid to perform them well. In this plan since all jobs are not
equally important to the firm, the labour market puts greater value on some jobs than on others
with the most important jobs paying the most. DeNisi and Griffin (2008) refers to this as pay-for-
knowledge, which they describe as compensating employees for learning specific information.
Milkovich et al. (2013) defines job-based approach, as paying an individual for the jobs they are
assigned irrespective of skills they possess.
This offers employees a more predictable method of pay, making it easier to
budget and plan for raises each year. The approach rewards employees who stay with the
employer for a long time and there is less room for unfairness within job titles since pay is
structured by the job. This reduces the potential for discriminatory pay practices. On the other
had Job-based pay offers little room for upward pay mobility for employees who have no desire
for promotion; there is little incentive to gain new skills, some people also get frustrated when
they perform at a higher level and see colleagues get similar pay. In some organizations, senior
employees struggle for motivation because they are at the high end of the pay schedule and can
go no further regardless of performance. This system also contributes to sometimes controversial
office politics because employees feel the only way to get ahead is to work their way up the
corporate ladder.
Skill-based approach on the other hand rewards those employees who learn new skills and
acquire new knowledge. Ambitious, self-motivated employees typically prefer this approach
because it gives them a reason to focus on career development. It also provides a mechanism to
reward employees who want to perform at a higher level. When companies pay for knowledge
and skill development, they contribute to a systemic rising of the bar for performance across all
jobs. On the negative side of the approach, the competitiveness within job ranks may cause
conflict among colleagues and co-workers. Colleagues may feel slighted or bitter toward one
another especially where one makes more money performing similar tasks. One may also feel
underpaid and undervalued if they are not paid the same as someone doing the same job at a
competing company. The approach may also cost the individual and organization more in terms
of time and cost additional training to develop skills in the bid to make more money.

2.1.2 Factors Determining a CompensationPlan

Whether an organization uses job-based or skill-based compensation plan, the main aim of the
plan is to enable the organization achieve its strategic objectives (Gomez et al, 2012) and attract,
motivate and retain competent employees (Decenzo et al, 2007). It is for these reasons that the
plan is developed to fit the organizations unique characteristic and environment (Gomez et al,
2012).

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 2.1.3 Factors Determining a Compensation
Whether an organization uses job-based or skill-based compensation plan, the main aim of the
plan is to enable the organization achieve its strategic objectives (Gomez et al, 2012) and attract,
motivate and retain competent employees (Decenzo et al, 2007). It is for these reasons that the
plan is developed to fit the organizations unique characteristic and environment (Gomez et al,
2012).
2.1.4 Compensation Plan Determination Process
Determining a well-balanced employee’s compensation plan comprises of five steps namely,
salary survey, job evaluation, grouping similar jobs into pay grades, pricing each pay grade and
fine-tuning pay rates (Amstrong, 2008). Salary survey is the conducting a survey of what other
employers are offering for comparable jobs, this helps ensure there is external equity (Dessler,
2008). This is also called benchmarking and is the process of identifying the rates of pay in the
labour market for comparable jobs to inform decisions on level of pay within the organization
(Amstrong, 2008). A good salary survey provides specific wage rates for specific jobs and a
salary survey can be done formally (written questionnaire) or informally by use of telephone,
internet check or newspaper adverts. Salary surveys published by consulting firms, professional
associations or government agents can also help.Job evaluation is a systematic process of
defining the relative worth or size of jobs within an organization in order to establish internal
relativities and provide the basis for designing an equitable grade structure, grading jobs and
managing job and pay relativities (Amstrong, 2008). The process involves comparing, the effort
required, responsibility, and skills and this helps ensure there is internal equity. The process
eventually results to a wage or salary hierarchy as the jobs that require greater qualifications,
more responsibilities and more complex jobs are paid more highly than jobs with lesser
requirements (Dessler, 2008). Job evaluation does not determine the level of pay directly and it is
based on the analysis of jobs or roles, which leads to the production of job descriptions or role
profiles (Amstrong, 2008).
Job-grouping entails grouping similar jobs into pay grades; it is the process of turning job
evaluation results to pay grades. A pay grades comprises of jobs of approximately equal
difficulty or importance as established by job evaluation (Dessler, 2008). Pricing each grade is
also referred to as the process of forming a wage curve. A wage curve shows the relationship
between the value of a job and the wage paid for the job (Dessler, 2008). Fine-tuning pay rates,
this involves developing pay ranges and correcting out-of-lines rates (Dessler, 2008). Pay range
is a series of steps or levels within a pay grade, usually based upon years of service.

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 Chapter Three
3 Research methodology
3.1. Research approach

This chapter discusses the methodology of the study, it describe the data type, data source, the
population and sample size, sampling techniques the instruments and the process of data
collection and finally the chapter concludes by describing the statistical procedures used to
analyze the data so as to achieve the objective of the study.

3.2. Data type and data Source

Data for this study would have been collected using primary as well as secondary sources. The
primary data would be taken through a questionnaire to employee and also includes interview
with human resource manager. The secondary data would have been taken from employee
performance, annul reports, manager recommendations and books which are relevant to the
subject matter.

3.3. Population and Sample size

3.3.1. Sample size

Table 3.2: Sample Population Percentage Sample size
size Category
Employees staff 25 60% 15
Human Resource Department 4 25% 1
Branch Manager 1 100% 1
Total 29 30% 17

3.3.2. Sampling technique

Sampling design/technique as a definite plan for obtaining a sample from the sampling frame. A
stratified sampling technique was used.
The study of the sampling method would be applied in survey of data is purposive sampling it is
a type of non-random sampling which conforms to certain criteria. It is a lower cost method of
sampling.
Methodology
3.4. Organization of the paper

The Research would be organized after this research prepared organize of my paper in five
chapters, the first chapter will be introduction Research Methodology the second chapter
Literatures Review, the third chapter would be Research Methodology, the fourth chapter Data
Analysis and presentation, the fifth chapter Conclusion and related recommendation.

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3.5. Time table

In order to manage the overall research process it needs time budget. The table given bellow
shows that the time that will be taken from topic selection to final presentation.

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3.6. Budget

In No Activity Feb. Mar. Apr. May

1 Titleproposal selection x
2 Literature survey x x
3 Proposal formulation x x

4 Proposal development x x

5 First draft Proposal submission x

6 Data collection x
7 Data collection review X
8 Data analysis X
9 Data interpretation and report x
10 Submission of final research X
11 Presentation X
order to undertake the research process effectively and efficient, it is necessary to prepare cost
budget. The table given below shows the cost that is expected will be incurred in the research
process.

No Activity/Item Measurement Quantity Duration Unit cost Total cost

. description unit in day
1. secretary
-
- 15 25 375 Br
2. Photo copy 15 3 45Br
3. Paper - 150 150
4. Pen 3x50 1.50 225 Br
5. pencil 2 100 200 Br
6. Ruler 4 5 20 Br

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7. Miscellaneous 2 2.5 5 Br
expenses
8. Padding tools 1 10 10 Br
9. CD 450Br
10. Internet and print 1480 Br
11. Personal cost

12. Transportation cost

Total

Table 3.5 response on employee evaluation for internal recruitment.

No Item Respondents
Number % age
12 Do you believe that the evaluation made to recruit from
internal is directly job related?
Yes 37 74%
No 13 26%

Total 50 100%

From the above table 4.5 out of 50 total respondents, 74% (37) are said yes and the rest 26% (13)
are said no that means the evaluation method that that the organization used to recruit from
internal is directly job related. There force such evaluation method to recruit from internal of the
organization enhance their performance.

Table 3.6 Recruitment opportunity of the organization

No Item Respondents

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 Number % age
13 Do you believe that the recruitment process of an
organization have equal chance for both sex?
Yes 33 66%
No 17 34%
Total 50 100%

From table 4.6 above out of 50 total respondents 66% (33) and 34% (17) are said yes and no
respectively. Since the majority of respondents said yes. It shows that the organizational
recruitment process have equal chance for both sex that means male and female.

Table 3.7 treatment made for disable applicants

No Item Respondents

Number % age
14 Does the organization give special treatment for disable
applicants? 20 40%
Yes 30 60%
No

Total 50 100%

From table 4.7 above in relation the treatments made for disable applicants, out of 50 total
respondents, 40% (20) and 60% (30) are said yes and no respectively that means the EEPCO
organization gives nothing special advantages or treatments for disable applicants. From this
data, the researcher can understand that EEPCO organization made nothing equal employment
opportunity for disable applicants.

Table 3.8 the rate how the organization focus on source of recruitment.

No Item Respondents
Number % age
15 How much the organization focus on internal recruitment?
Very high 11 22%
High 13 26%
Medium 26 52%
Low -- --
Very low -- --

Total 50 100%

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16 How much the organization focus on external recruitment?
Very high 4 8%
High 2 4%
Medium 26 52%
Low 15 30%
Very low 3 6%

Total 50 100%

On the above table 4.8 out of 50 total respondents, 52% (26) are said medium and the rest are
said very high 22% (11), high 26% (13), there is no respondents who said low and very low
respectively. On the other hand from the same table 4.8 out of 50 total respondents, 52% (26)
said medium and the rest are said very high 8% (4), high 4% (2) low 30% (15) and very low 6%
(3) respectively. Thus shows the rate how the organization focus on external recruitment is
medium.

Table 3.9 responses on factors affecting external recruitment.

No Item Respondents
Number % age

17 Do you think that external recruitment has problem for

the organization?
Yes 29 58%
No 21 42%

Total 50 100%

18 If you say “yes” Q 17, which problem can be occurring?

A. Its cost ness 8 27.5%
B. It needs long time training 11 38%
C. It affects exist employee’s 4 13.8%
D. All are occurring 6 20.7%

Total 29 100%

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From the data on the table 4.9, out of 50 total respondents, 58% (29) are said yes and 42% (21)
are said no which means the external recruitment have some problems or affect the
organizational performance activities. From the same table 4.9 out of 29 total respondents, 38 %
(11) are said that external recruitment needs long training and the rest are said it is costly 27.5 %
(8), it create immoral for senior employees 13.8% (4) and all are occurring 20.7% (6)
respectively. These show us the most problem of external recruitment is that it needs long
training.

C/ organizational employee selection activities

Table 4.10 factors affecting employee selection process.

No Item Respondents
Number % age
19 Which is/are factors affecting employee selection process?
A. legal consideration 7 14%
B. speed of decision making 6 12%
C. organizational hierarchy 9 18%
D. pool of applicants 15 30%
E. all factors are affecting 13 26%

Total 50 100%

From the above table 4.10 out of 50 total respondents, 30% (15) are said pool of applicants and
the rest are said legal consideration 14% (7), speed of decision making 12% (6), organizational
hierarchy 18% (9), and all factors 26% (13) respectively. From these data we can understand
that the most factor that affect the organizations selection process is pool or largeness of
applicants.

Table 3.11 employee selection criteria.

No Item Respondents
Number % age

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 Which is/are employee selection criteria’s that the
20 organization uses more?
A. formal education 8 16%
B. experience 10 20%
C. personal characteristics 4 8%
D. physical characteristics 6 12%
E. It uses all criteria 22 44%

Total 50 100%

From table 4.11 above, out of 50 total respondents 44% (22) are said all of criteria’s and the rest
are said formal education 16% (8), experience 20% (10), personal characteristics 8% (4), and
physical characteristics 12% (6) respectively. Since the majority of respondents are said all
criteria are we can say that the organization uses all criteria’s stated above for the purpose of
employee selection.

Table 3.12 Employees selection activities /process

No Item Respondents
Number % age
21 Do you believe that the selection process have equal chance
for both sex?
Yes 24 48%
No 26 52%

Total 50 100%

From the data depicted on the above table 4.12 out of 50 total respondents, 48 %( 24) and 52 %
( 26) are said yes and no respectively. Which means that the majority of respondents said no that
means there is no equal chance for both sex or male and female applicants, because the manager
or the concerned body gives priority for females, friends and their relatives. Therefore the
researcher can understand that such selection process is forbidden for the organizational
performance.

Table 3.13 treatments made for new applicants

No Item Respondents
Number % age

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22 Does the organization give good treatment for new
applicants?
Yes 39 78%
No 11 22%
Total 50 100%

From table 4.13 out of 50 total respondents 78% (39) are said yes and the rest 22% (11) are said
no which means the organization gives good treatment for all new applicants as the majority of
respondents response. From this data the researcher can conclude that it is achieving its
performance at good position.

Table 3.14 the rate how the organization focus on employee selection criteria’s

No Item Respondents
Number % age
23 How much the organization focus applicants experience?
Very high 2 4%
High 13 26%
Medium 31 62%
Low 4 8%
Very low - -

Total 50 100%

24 How much the organization focus on applicant’s formal

education?
Very high 7
High 24
Medium 17
Low 2
Very low -
Total 50 100%

As we see from the above table 4.14 out of 50 total respondents, 62% (31) are said medium and
the rest are said very high 4%(2) , high 26% (13), low 8% (4), and there is no respondent who
said very low respectively. Since the majority of respondents are said medium, from these we
can conclude that the rate how the organizations focus on the applicant’s experience is medium.

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From the same table 4.14, out of 50 total respondents, 14% (7) are said very high,48% (24) are
said high, 34% (17) are said medium, and 4% (2) are said low and there is no respondent who
said very low that means the majority of the respondents are said that the rate how the
organization focus on applicant’s formal education is high and the researcher conclude that the
organization gives high attention for applicant’s formal education during selection process.

Table 3.15 applicants back ground investigation selection criteria’s

No Item Respondents
Number % age
25 How much the organization focus on applicants background
investigation
Very high 6 12%
High 11 22%
Medium 20 40%
Low 6 12%
Very low 7 14%

Total 50 100%

As we see from the table 4.15 above responses on the applicants’ background investigation, out
of 50 total respondents, 40% (20) are said medium and the rest are said very high 12% (6), high
22% (11), low 12% (6) and very low 14% (7) respectively. Therefore, since the majority of the
respondents said medium the researcher can conclude that the rate how the organization focus on
applicants background investigation is medium.

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