Influence of Employee Compensation on Organisational Commitment in Public Enterprises

Abstract

Employees with strong organisational commitment are emotionally attached to the organisation and have a strong desire to contribute significantly towards organisational success. The compensation strategies are highly essential for improved performance, higher employee loyalty and increased customer satisfaction. The purpose of this study was to analyse the effects of employee compensation strategies on organisational commitment. The research hypothesis for the study was “Employee compensation ‘strategies’ has no significant effect on organisational commitment. The study employed a case study research design that was conducted at Moi Teaching and Referral Hospital (MTRH), Uasin-Gishu County, Kenya. The target population was three thousand two hundred (3200) respondents were targeted because that was the group highly affected by commitment and turnover issues in the organisation. A sample size of 340 was extracted from the target population and the sampling techniques used were stratified sampling for the departments working in and simple random sampling for the individual respondents. Multiple regression analyses were used to test the hypotheses. Based on the observed correlation results, employee compensation had β of 0.172 and p<0.01. The findings indicated that there was a significant positive correlation between employee compensation and their commitment for the null hypothesis. The study recommends that MTRH lays down proper structures for compensating their employees as compensation has a significant positive impact on organisational commitment. Key Words : Employee; Compensation; Organisational Commitment; Public enterprises.