Effects of Employee Incentives on Employee Performance in Private Universities in Kenya

Abstract

Human resource management is the strategic approach to the management of an organizations most vital asset, the people who contribute to the achievement of the objectives of the organization. Employee incentives constitute some of the high performance work practices used by organizations to improve knowledge, skills, and abilities of current and potential employees, increase motivation and enhance retention of quality employees. Kabarak University has a number of employee incentives in place. However, there is scanty empirical study, to determine the influence of these incentives on employee performance. The study examined the relationship between specific employee incentives to employee performance in private Universities in Kenya. The study population was all the employees of Kabarak University, selected as respondents; thereby a census study was carried out .The study involved use of structured questionnaire to collect the data. Secondary data was extracted from the department of Human resource. The analysis of the collected data was done by use of Mann Whitney U test, factor analysis and Chi-square, and presented using descriptive statistics in frequency tables and charts. Financial and nonfinancial incentives are applied to a great extent to motivate the employees. Financial incentives that are perceived to have significant influence on employee motivation include: salary, insurance financing, retirement benefits, performance based rewards, holiday, overtime pay, and loan entitlement. Among the non-financial incentives with significant influence on performance were: creativity at work, organizational goals, challenging tasks, opportunity for personal development, autonomy and responsibility, teamwork, job security, professionally stimulating environment, opportunity to set performance goals, predictable work life, opportunity to lead, training and development and flexible policies. Recommendations include; the need for top management of organizations to design effective incentive schemes that comprise a mix of financial and non-financial incentives, with non-financial incentives being key, supplemented by financial incentives. The findings are vital for policy makers in human capital intensive organizations such as universities.