THE INFLUENCE OF THE REWARD SYSTEM ON LOCAL GOVERNMENT PERFORMANCE: EVIDENCE FROM THE REPUBLIC OF SRPSKA

Abstract

As the main problem to consider in this research is the impact of the reward system based on the basic salary as the dominant form of material compensation on the success of local governments, this paper places the highest emphasis on the specifics of local government in the context of human resource management. The subject of empirical research in this paper were local governments in the Republic of Srpska, and the research was conducted in the period from 2015 to 2019. Appropriate statistical methods were used in the processing of the collected data, while the testing of the hypotheses set forth in this paper was performed with the help of correlation and regression analysis. By applying the above statistical methods, there was not sufficient evidence that was found on the impact of the existing reward system, which is based on the basic salary as the dominant form of material compensation on the success of local self-government. The paper offers a set of guidelines for modeling the reward system in local self-government, which respects the principles of merits and provides recommendations for eliminating the identified shortcomings of the existing reward system. The results of this research contribute to the further progress of the scientific field of human resource management in non-profit organizations, especially in the field of reward systems. Also, the results of this research have a pragmatic value, which is reflected in the practical benefits that local governements can have when creating a reward system.