Influence of Reward Strategy on Employee’s Performance in Public Hospitals in Nairobi County, Kenya

Abstract

In a globalized economy and in an intensely competitive business environment, organizations must ensure they have the most attractive and effective strategies to cope with the evolving trend. The purpose of reward strategy in an organization is to attract, retain and enhance employee performance which determines the overall organizational performance. Employees are always proud of being associated with a prosperous organization and thus contribute to exemplary performance. Demotivated employees on the other hand exhibit negative behavior towards work which can be costly for the organization. This is mainly attributed to poor reward strategies adopted by an organization in attracting and maintenance of employees. The research intended to determine the influence of reward strategy on employee performance in public Hospitals in Nairobi County, Kenya. The specific objectives of the study was to establish the influence of employee benefits strategy, staff performance appraisal strategy, employee promotion strategy and employee recognition strategy on employee performance in public hospitals in Nairobi County, Kenya. The study adopted equity theory, Maslow’s Hierarchy of needs theory and Herzberg Two-factor theory. Cross Sectional survey design was adopted. The researcher used a target population of 1601 from three public hospitals in Nairobi County, Kenya and a sample size of 310 respondents which was determined using Fishers formula. Participants were chosen by means of stratified simple random sampling. Collection of Data was done by using structured questionnaire and a pilot study was conducted to ascertain the reliability of the instrument. Reliability test revealed Cronbach’s Alpha was greater than 0.7 demonstrating the instrument was reliable. Data was carefully validated by ensuing face and content validity of the instrument and was analyzed by using a statistical tool of statistical package for social scientists (SPSS). Correlation and regression analysis was applied in testing the connection between independent and dependent variable. The regression results revealed a significant relationship between Employee benefits strategy and employee performance and employee recognition strategy and employee performance in public hospitals in Nairobi County; while staff performance appraisal strategy and employee promotion strategy had no substantial connection with employee performance in public hospitals in Nairobi County. On the basis of the results, the research concluded that employee benefits strategy and employee recognition strategy influenced employee performance to a great extent in public hospitals in Nairobi County, Kenya. Further, the research concluded that there was need for public hospitals in Nairobi County to address the issues noted in the study to ensure that there was realization of the desired goals. It was therefore recommended that public hospitals in Nairobi County, Kenya ought to improve on staff wellness programs, provide transport and conduct comprehensive inductions on newly recruited and promoted staff. It was also recommended that there should be regular salary increase to cope with the high standards of living, allow staff to participate in target setting and ensure timely recognition of employees to enhance motivation for better performance. The study further recommended that future research be conducted on similar or other variables not included in the study in public hospitals in other counties for purpose of generalizing the findings to all public hospitals in the country.