An assessment of compensation and reward policies on employee performance in public sector: a case study of kitui county government

Abstract

The current financial crisis Kenya is experiencing has made the reward and compensation system, with focus on bonuses and viable remuneration, a highly debated topic in media. Most of the government expenditure is used in paying employees than development projects in the county governments in Kenya. Every company has some form of compensation and reward system that is considered to influence employee performance. Hence this study assessed the influence of compensation and reward policies on employee performance in public sector: a case study of Kitui county government. The study was guided by the following research objectives: - To identify the factors that determine compensation and reward policies in an organization, to ascertain the effect of compensation on employee performance, to ascertain whether there is significant relationship between compensation policies and employee performance, to find out whether workers always participate in designing compensation and reward policies and to identify ways of improving the various compensation and reward policies to enhance employee performance. The study applied a case descriptive research design; as such it is an intensive description and holistic analysis of County Government of Kitui as a single entity. The study used a case study design since the study is a single independent in depth in order to gain insight into the larger cases and it also describes and explains rather than predicting the primary purpose of case study is to determine smaller samples in depth analysis. A sample of 50 respondents was selected and 34 responded. The researcher used stratified sampling technique to select employees from various departments included in the sample. The researcher used structured questionnaires, the questionnaires contained closed ended questions. Researcher administered questionnaires to the departmental managers and other staff of County Government Kitui Headquarters. The data collected was processed, analysed and presented with the use of charts, graphs, percentages, ratios and the relationship between the variables was established and tested. Even though the county is doing quite well in their compensation and reward packages they did not communicate this to the employees. Employees were having variety of packages without realizing it was a means of rewarding their contribution to the organization. As a result they felt always left-out and wanted more (some of which they were already enjoying without their specific knowledge).