Employee Perceptions of Reward Systems in Public Institutions: Evidence from the Republic of North Macedonia

Abstract

It has always been an issue in the human resource management selecting the right rewards for the employees especially in the public institutions. Many public institutions are unable to identify the types of rewards which are best used to foster employees’ work satisfaction. The study aims are to evaluate how reward systems in public institutions influence employee perception and to analyze their impact on job satisfaction, quality of work, and employee retention in the public sector of North Macedonia. Data were collected via self-administered questionnaire of 153 employees in public institutions in North Macedonia. Reliability and validity of the measurement instrument are confirmed through Cronbach’s alpha (0.777) and factor analysis. Descriptive statistics, correlation analysis, and regression analysis are applied to test the proposed hypotheses. The results indicate that the re-ward system has a positive but weak effect on job satisfaction (β = 0.142, p = 0.079), quality of work (β = 0.146, p = 0.071), and employee retention (β = 0.144, p = 0.075), with none of the effects reaching statistical significance. Additional hierarchical regression analysis suggests that demographic characteristics partially influence these relationships, while the contribution of re-ward systems remains limited. The findings imply that reward systems in public institutions play a secondary role in shaping employee outcomes, while other factors such as job security, intrinsic motivation, and institutional stability may be more influential. The study contributes to the limited empirical literature on public sector reward systems in North Macedonia and offers practical insights for policymakers and managers seeking to improve human resource management practices.