By: Mitalo, Ruth Atidah, Dr. Florence Muindi, Prof. Peter K’Obonyo, Prof. G. P. Pokhariyal
Compensation is essential to the functioning of the relationship between the employee and employer and very close to the heart of both the employer and the employee. This research investigates the effect of employee motivation and employee performance. When employees believe that they are not paid equitably they will be dissatisfied with work which can lead to voluntary employee turn-over, regular absence from work, non-commitment to the organization and low-trust employee relations. Lack of clear criteria and unfairness in distributing incentives to academic staff and supportive supervisors could influence staff performance. The main objective of this study was to determine the effect of compensation on employee performance in Kenyan chartered public universities. The study was based on expectancy theory and equity theory. The study adopted positivist research philosophy. A descriptive cross-sectional design was adopted to enable the researcher discover the relationship between different variables. The study targeted academic staff in 23 Kenyan chartered public universities. Multistage sampling technique was used to identify respondents from Kenyan Chartered Public Universities. The number of Faculties/Schools/Institutes sampled was 43 out of 246. A sample size of 370 academic staff was selected from a population of 2011 using easy sample size calculator. Data was collected on employee compensation, supervisor support and employee performance using a questionnaire. 247 questionnaires were returned out of 370 administered, thus a response rate of 69%. Quantitative technique was used to analyze data. The study found that employee compensation had a weak positive significant effect on employee performance (R2=0.203, p<0.05). Financial compensation had a very weak positive significant influence on employee performance (R2=0.171, F= 50.632, p<0.05) and non-financial compensation also had weak positive but significant influence on employee performance (R2=0. 0.14, F= 39.803, p<0.05). The study concluded that employee compensation was crucial in improving employee performance. The study recommended that chartered universities to implement compensation programs capable of improving employee performance.
Key Words: Employee Compensation, Financial Compensation, Non-financial Compensation, Employee Performance, Academic Staff, Chartered Public Universities
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About the Authors:
- Mitalo Ruth Atidah- Correspondent Author, School of Business, University of Nairobi, P.O. Box 30197-00100 Nairobi, Email:firstname.lastname@example.org
- Dr. Florence Muindi- Senior Lecturer, Department of Business Administration, University of Nairobi, Kenya
- Prof. Peter K’Obonyo- Professor, Department of Business Administration, University of Nairobi, Kenya
- Prof. G. P. Pokhariyal- Professor, Department of Mathematics, University of Nairobi, Kenya