The Effect Of Internal Control System On Employee Performance: The Case Of Commercial Bank Of Ethiopia At Sheger City Sebeta Sub City

Abstract

The objective of this study was to investigate the effect of internal control on employee performance in case of CBE at sheger city Sebeta sub city. Data for this paper come from the cross-sectional survey collected from eleven CBE, Sheger city Sebeta sub city. 184 questionnaires were distributed, and 178 were collected using a five point Likert scale questionnaire. The researcher employed stratified sampling techniques to select the required number of participants from different unit of the study, and representative individual from each unit was selected by using simple random sampling techniques particularly lottery method because all individual employees in each bank branches under study have equal chance to be sampled. The collected data were analysed using mean, correlation and multiple regression analysis. The descriptive findings of the study shows that the CBE manager did not design risk controlling mechanism and also they did not pro-actively asses the likelihood of occurring risks in the study area. The monitoring activities, risk assessment, control activities, information & communication have a strong relation with employee performance.Multiple regression was used to identify the extent to which explanatory variables predict employee performance in the study area. The result substantiate that monitoring activities, risk assessment, control activities, information & communication were the main explanatory variables for the employee performance in the study context. The bank administrative bodies at a different level within the CBE in sheger city sebeta sub city are strongly recommended to design risk controlling mechanism and they also suggested to pro-actively asses the likelihood of occurring risks. Next, the management of CBE improve the integration and alignment of organizational and individual objectives to enhance implementation of internal control system in the bank; The management of CBE are strongly advised to improve the skill gap that exists between employees and managers of the bank for better internal control and employee performance in the bank; The management of CBE are politely advised to improve the complexity and clarity of management tools to enhance implementation of internal control and for better employee performance in the bank.Finally, the management of CBE ought to give primarily focus for monitoring activities so as to enhance the employee performance in the bank; followed by risk assessment, control activities, information & communication in the study area