Organizational Restructuring and Employee Performance in Parastatals: A Case Study of Kenya Revenue Authority

Abstract

Restructuring of organizations has continued to be the order of management life and a shared phenomenon globally as a large number of firms across the globe are reorganizing their functions, restructuring employees, streamlining their operations so as to spur organisational performance. This study investigated the effect of organisational restructuring on employee performance in parastatals: a case study of Kenya Revenue Authority. Specifically, it sought to; determine the effect of departmental restructuring on employee performance at Kenya Revenue Authority, assess the effect of operation restructuring on employee performance at Kenya Revenue Authority, evaluate the effect of employee downsizing on employee performance at Kenya Revenue Authority and finally establish the effect of job restructuring on employee performance at Kenya Revenue Authority. So as to understand the theoretical perspective of the study, configurational theory and Resource Based Theory were applied. The study adopted a descriptive design. The study also targeted a population of 2139 workers in different departments at Kenya Revenue Authority headquarters. The sampling technique applied in this study was systematic random sampling. Pilot test was conducted where validity and reliability of the data collection instrument was done. The sample size for this study was 100. Primary data was collected from the sampled population. In analyzing the data, inferential statistics was used where a multiple regression model was applied to determine the relative importance of each of the variables with employee performance in Kenya Revenue Authority. Results show departmental restructuring (X1) with (β1=0.525) which indicates its enormous contribution to employee performance followed by employee downsizing (X3) with (β3=0.397), job restructuring (X4) with (β4=0.301) and last is operations restructuring (X2) with (β2=0.107). The study concluded that there is a positive relationship between the four key components of organisational restructuring namely; departmental restructuring, operations restructuring, employee downsizing and job restructuring with employee performance. Thus Organizational restricting affects employee performance at KRA. The study recommended that the management of organisations in Kenya should put in place effective and efficient departmental restructuring strategies as it leads to improved employee performance. Departmental restructuring allows organizations to be well organized and align departmental strategies to the right employees which in turn enables it to attain its strategic objectives. Secondly, the study recommends organisations to pay attention to operations restructuring programs that have been mentioned in this study which can allow for restructuring activities that can be well accommodated. It is important to implement operation restructuring that will reduce wastage of resource as the organization strives to attain its strategic goals enable by effectively utilizing its human and asset resources. Thirdly, the study recommends management of organizations to be strategic in implementing employee downsizing. It is crucial that this process is done at the right time and the right area of operations as it should enable the remaining employees to continue to work with autonomy and not fear for their work or have excess workload. Lastly, the study recommends management of organizations to ensure job restricting is a consultative process with employees since they are the ones needed to implement this process