Mediating Effect of Motivation on Employees Performance in Private Equity Firms, Kenya

Abstract

Organizations are always in pursuit of finding ways to enhance their performance. One of the ways is to enhance employee performance by incorporating job characteristics that contribute to employee motivation, satisfaction and commitment of the employees. The job characteristics necessary for better performance of employees are skill variety, task identity, task significance, autonomy and feedback. The purpose of this study was to determine the effect of job characteristics on the performance of employees among Private Equity Firms in Nairobi City County in Kenya. The specific objectives of the study were to determine the effect of skill variety, task identity, task significance, autonomy and feedback on employee performance among private equity firms in Nairobi City County, Kenya. The study also sought to determine the mediating effect of employee motivation on the relationship between job characteristics and the performance of employees among private equity firms. The theories used in the study were the Job Characteristics model, Herzberg’s two-factor theory and the Demand control model. The study adopted a descriptive research design and involved a census of all 210 employees in 25 different private equity firms in Nairobi City County, Kenya. Questionnaires were used for primary data collection. To ascertain the validity and reliability of the questionnaire, a pre-test was conducted on one of the private equity firms where the cut-off for Cronbach alpha was taken as a value of 0.7 and the aggregate alpha value in this study was 0.755. The quantitative data in the study was analysed using descriptive and inferential statistics. Descriptive analysis comprising the mean, frequency, percentage and standard deviation while inferential statistics was stepwise multiple regression. The Statistical Package for Social Sciences (SPSS) was used to conduct the analysis. 116 questionnaires out of the 210 distributed were used for analysis, which translates to 55% of the response rate which was adequate for the study. From the findings, variety of skills, task identity, autonomy and feedback were found to affect the performance of employees, while task significance did not significantly affect employee performance. The results also indicated partial mediation by the mediator on the independent variable. The study recommends that Job characteristics be considered in planning and evaluation of employees’ jobs and performance respectively. Increased freedom in decision making and job rotation were cited as some of the ways in which the Private Equity Firms could increase employees’ motivation, hence their performance.