Effect of Compensation Strategies on Employee Performance: A Case Study of Mombasa Cement Limited

Abstract

The aim of the study was to establish the effect of compensation strategies on employee performance: a case study of Mombasa Cement Limited. The study utilized three research objectives. The first being to determine the effect of salary on the performance of employees, secondly, to find out the effect of benefits on the performance of employees and to establish the effect of recognition on the performance of employees. The study used survey research method. The population of this study was all employees of Mombasa Cement Limited based at the headquarters, Athi River, who totaled to 153. A stratified sampling technique was used to select respondents. This research study used questionnaires as the primary research instrument for the collection of data from the selected respondents. Quantitative data collected was analyzed, presented and interpreted using descriptive statistics. Statistical Package for Social Sciences (SPSS) version 20 was used to analyze quantitative data into descriptive statistics such as means, standard deviation, frequencies and percentages. For advanced analysis, the study used Pearson correlation method which evaluated the linear relationship between two continuous variables in the study. The study found that reasonable salary, benefits in form of bonuses and allowances and recognition through certification or verbally promoted employee performance. In conclusion a very high disagreeing response on regular pay within the organization implies that employees were well aware of this and that it was actually happening. The study concluded that the basic pay provided by the company motivated employees. The study also concluded that employment benefits such as allowances, incentives and bonuses have a positive effect on employee performance at MCL. The study finally concluded that employees in the company considers recognition as means of appreciation and believes that provision of certification awards generally motivates them to perform better. The study recommends that the Human Resources Manager should develop systems that will ensure that there is a proper salary plan entailing proper job evaluation processes and pay structures in the organization as this could motivate employees to perform. The study further recommend that the company should review the current retirement package, allowances, bonuses and other incentives in order to help attract and retain employees in the company and also improve their productivity which could then translates to optimum performance. Finally, the study recommends that MCL needs to improvise employee recognition programs for jobs well done. This can be done by awarding certification to performing employees, verbally recognizing them and also recognizing them through promotion; this will motivate employees thus could enhance their productivity in the company