Compensation Programs And Employee Performance In Agricultural Development Corporation In Kenya

ABSTRACT

Organizations face complicated tasks in harnessing current abilities, talent and expertise and achieving the highest outcomes. Where there is a mobile workforce and where executives have to manage various projects with partners, the complexity is also magnified. Human resource managers also need to tackle the need for a fresh generation of employees to enter the sector today. In this case, compensation programs play an important role in those organizations that wish to reach their objectives and their goals. However, understanding the inter-linkages between compensation programs and employees performance has become very vital for attracting, motivating and retaining good employees. Agricultural Development Corporation has encountered employees’ performance challenges such as failure to meet targets and high labour turnover which is being informed by the fact that it has not been able to achieve its desired results. This study aimed at investigating the influence of compensation programs on employee performance in Agricultural Development Corporation. The study’s specific objectives were to examine the influence of incentives, performance related pay, financial programs and non-financial programs on employee performance. The study was guided by Expectancy Theory and Two Factor Theory. The study adopted a descriptive research design. The study target population was Agricultural Development Corporation and the unit of observation was 65 respondents comprising of 5 HRM managers and 60 support staff from HRM department. A census of 65 respondents was carried out. This study used questionnaire as a data collection tool to all the respondents. Descriptive statistical analysis such as mean and standard deviation were used to analyse quantitative and presented in terms of tables, frequencies, graphs and charts. Multiple regression analysis was used to determine the extent to which variables relates to each other. Content analysis technique was used to analyse qualitative data obtained from the open ended questions from the questionnaires. The study determined that incentives, performance related pay, financial programs and non-financial programs had a positive and significant relationship on employee performance. The study concludes that incentive plans motivate workers for higher efficiency and productivity. It can improve the work-flow and work methods. When employees are dedicated, supervision costs can be reduced which reduces employee turnover, absenteeism and lost time. Performance related pay motivate employees and align their effort more closely with the aims of the organization. Managers can use a defined framework for setting goals. Financial program inspire employee loyalty and increase productivity among employees. The financial incentive is ranked top in motivating employees because money enables employees to fulfill not only their basic needs, but also their need of belongings and need of power. Non-financial motivation is seriously essential for workers. Among other things, it puts employees into action that their managers care about their feelings. The study recommends that employees in the various departments should have the same type of incentive system to avoid discrimination. Organizations should motivate staff by offering small tokens of appreciation and acknowledgement, enhanced job security, new opportunities for promotions, better performance appraisals, development and use of new skills and competencies. Organization needs to make the employee understand the criteria for receiving the incentives and how the amount is determined. Organization should ensure proper implementation of effective training opportunities for all employees to better their skills, there is the need for the organization to adapt fair and equal recognition criteria for the motivation of its employees which will result to higher productivity.