The purpose of this research was to examine the effects of reward management practice on employee retention in the case of Ethiopian Management Institute. The study has looked at both extrinsic (salary, benefit, promotion) and intrinsic (working condition, recognition, empowerment, personal growth and career advancement) type of rewards on employee retention. The study has applied explanatory research design and mixed research approach which has included questionnaire and interview. The questionnaire was distributed to 142 permanent employees of Ethiopian management institute using simple random sampling method out of the total population of 290.primary data were collected using five point Likert-scale questionnaires 130 responses were properly filled and returned. Document of the organization such as annual performance report and labor agreement have been reviewed as a secondary source of data. The data was analyzed using both descriptive and inferential statistics to explore the various variables of the study. The researcher was able to do this using the SPSS version 20.0 software. The correlation finding shows that positive relations between reward management practice and employee retention. the regression coefficient beta revealed that the independent variable Salary, Benefit, Working condition and Employee empowerment have statistically significant positive effect on employee retention. The study conclusion and recommendation that independent variables direct effect on employee retention. Therefore, the institution to retain skilled and experienced employees should improve payment of salary and benefits for alignment of their value, implement employee empowerment and to create a convenient working condition