Effects of Retirement Benefits on Organisational Performance in Kenya: A Case of Makueni County

Abstract

Employees form the human capital factor in all organizations and symbolizes all human abilities irrespective of the inherent or learnt qualities, whose worth could be improved by suitable development investments. Organizations therefore need to ensure that they offer compensation and welfare packages that increase employee motivation. The motivation of employees increases when their needs which leads to increased productivity and efficiency in delivery of service. Achieving optimal performance in public service remain a challenge in Kenya. The study sought to evaluate the effect of retirement benefits on the performance of Makueni County Public Service. The social exchange theory guided the study. Out of the 3679 employees, proportionate stratified random sampling was used to identify 376 respondents and a semi-structured questionnaire was used to collect the primary data. Descriptive research design was used while descriptive statistics, specifically the mean and the standard deviation was used to analyse the data while inferential statistics was done by use of a regression model. The regression analysis showed that 45.3% of the organizational performance is was explained by availability of retirement benefits. The study concludes that retirement benefits have a positive significance correlation on organizational performance and the availability of these benefits boosts employees’ satisfaction and consequently their performance and that of the organization in general. The study recommends that County Government of Makueni should ensure an equitable provision of retirement benefits; train staff on the available retirement benefits and provide staff with options to choose from. The study recommends that the human resource directorate should conduct sessions with employees to identify the gaps in the staff retirement benefits and action on the recommendations. Keywords: Retirement Benefits, Organizational Performance, County Government of Makueni