THE IMPACT OF EMPLOYEES MOTIVATION STARTEGIES ON THE PROFITABILITY OF FINANCIAL INSTITUTIONS IN RWANDA CASE STUDY: BANK OF KIGALI Period 2019-2022

Abstract

The study regarding the contribution of employees’ motivation to the profitability of financial institutions more specifically the Bank of Kigali, for the period 2019 – 2022, has shown a positive relationship. The research purpose has been achieved through different objectives, which are knowing and analyzing the perception of bank of Kigali’s employees toward the bank, examining the profitability of bank, and determining the relationship between the employees view on the bank and the profitability of bank of Kigali. Primary data collected from Bank of Kigali employees shows that 47.8% of employees agrees that the employees motivation of BK is effective and sissifying, while 41.4% agrees that it needs improvement and 10.6% agrees that the employees motivation strategies of Bank of Kigali, is not effective. According to the specific answers explained by the employees and the numbers got, we detected a reasonable relationship between the two factors. Bank of Kigali y-o-y from 2019 – 2022 has shown the following numbers respectively: 36.6%, 3.0%, 35.0%, and 15.1%. This shows that even though the relationship is positive there is need of improvement in the employees’ motivation, as it will lead to increase in profit of the business as well. Bank of Kigali net income and y-o-y shows a positive financial health although it is not the case of Debt to equity ratio, as one of the profitability indicators From 2019-2022 the debt to equity ratios has been as follows respectively: 3.07, 3.28, 3.47, 3.55 this shows that exposure to financial risk because the ratio is greater that one. Bank of Kigali is doing is in good shape financially, but we consider the need of improvement as from the data above there is an irregularity in the income growth. ROA and ROE also proved the positivity and relationship between employee’s motivation strategies and profitability of financial institution in Rwanda. ROA of Bank of Kigali, in 2019 was 3.44%, 2.945% in 2020, 3.98% in 2021, and 3.22% in 2022. ROE of bank of the year 2019-2022 are the following respectively 16.8%, 14.8%, 18.19%, 18.7%. The research has shown a significant relationship, between the employees motivation strategies and the profitability of the Bank of the Bank of Kigali. As the salaries and bonus the Bank of Kigali provide to its employees decrease, the net income reduce as well, and when the salary and bonus increase, the net income increase at a higher rate.