Factors Affecting Implementation of Performance-Based Reward Strategies in Kenyan Public Sector: A Case of Capital Markets Authority

Abstract

This study explored the factors affecting implementation of performance-based reward strategies in the Kenyan Public Sector a case of Capital Markets Authority. The study was guided by three research objectives including, to determine whether organisational culture, external factors and employee participation affects implementation of performance-based reward strategies in the Public Sector in Kenya. This study used a descriptive research design and target population included 71 employees at the Capital Markets Authority of Kenya. This study used stratified random sampling method to draw a sample of 60 respondents from the target population. The primary data was collected through questionnaires. This study analysed data through inferential and descriptive statistics. Descriptive statistics was used to get the mean values and standard deviation and inferential statistics involved correlation analysis and regression analysis to evaluate the relationship between the dependent variable and independent variable. The findings of the study were presented in figures and tables. Results on the effect of culture on implementation of performance-based reward strategy, showed that, performance-based pay system required employees to keep track of their performance. The performance-based pay system required employees to be competent. Finding on effect of external factors on the implementation of performance-based reward strategy showed that employees had a proper medical care and cover. It was also shown that the organisation had a well-structured work safety measure. Results on the effects of employee participation on implementation of performance-based reward strategy showed that, appropriate information on the implementation of performance-based pay strategy was shared to employees to enhance its implementation. Findings also showed that organisational management offered guidance to the subordinate in the implementation of the performance-based pay strategies. According to the correlational analysis, the implementation of performance based reward strategy had only a statistical significant relationship with employee participation, r= 784, p<.001. In addition, external factors had a significant relationship with organisational culture, r= 387, p<.005. The regression analysis revealed that employee participation, organisational culture and external factors accounted for 63.6% of implementation performance-based reward strategy. According the ANOVA results, F=14.539, p<.000, this shows that the model was significant in predicting implementation performance-based reward strategy. This study concludes that having a positive organisational culture can help employee attain their job targets established in performance-based reward strategy. A positive culture motivates and encourage employees to put their best effort at work. External factors have a negative effect on the implementation of performance-based reward strategy in organisations. Some of the external factors that affect performance-based reward strategy implementation in a positive way include, the awareness of employees. Employee participation has a positive relationship with performance-based reward strategy implementation. In the implementation of the performance-based pay strategies the organisational management offer guidance to the subordinate to enhance implementation. This study recommends that organisations should develop a positive culture in the organisation, one that foster employee cooperation in order to win their support in the implementation of performance based reward strategy. The organisational culture should create an enabling environment for employees to work towards attaining their performance target set in the performance based reward system. The organisational should be aware of the negative factors that hinder the implementation of performance based reward strategy. Political factors should be minimised, the organisation should ensure minimal interference of people outside the organisation that may incite the employees against the performance based reward system. This study recommends that employee should be involved in not only the implementation of the performance based pay strategy, but also in its planning and design.