Employee Engagement and Performance of Microfinance Institutions in Kenya A Case of Bimas Kenya Limited
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Date
2022
Authors
Utuku, Esther Faith Wanjue
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Employers have over time began recognizing and appreciating the role of employees as business drivers in organisations. Most organisations, especially in Kenya, have not yet been able to determine the levels of employee engagement and have not used employee engagement as a strategy for driving organisational improvements. Previous empirical studies have showed that when employees are engaged, their performance tends to be better due to the fact that they are more proactive, motivated and portray more prosocial behavior. That higher levels of employee engagement are associated with lower employee turn-over, increased return on assets’, fewer cases of absenteeism, high employee income rates, increased performance and increased sales. However, the concept of employee engagement has not been fully embraced within the African region mostly in Kenya. Likewise, previous scholars that have reviewed employee engagement, did not relate it to the performance of employees within the financial sector specifically the microfinance industry. To bridge this gap, this study’s main aim was to explore the connection existing between engagement of employees and performance of microfinance institutions in Kenya with BIMAS Kenya Limited as a case. To achieve this objective, the study was guided by the following specific objectives; To determine the effect of Commitment on performance; To investigate the effect of Empowerment on performance; To determine the effect of retention on performance and; To examine the moderating effect of industrial regulations on the relationship between employee engagement and performance at BIMAS Kenya Limited. The Three component model of engagement, the Universalistic theory and the Herzberg two factor theory were used to support the study objectives. The respondents were 48 employees in management who were Top level managers, Operations managers and Branch managers. A census was carried out because the population of the study was relatively small. Primary data collection was done using structured questionnaires that comprised both open and closed ended questions. A pilot study was employed to help in identifying problems that could be encountered by the respondents. Content validity was used and testing of instrument reliability was done using the Cronbach Alpha with a threshold of 0.7. Face content validity was employed to check for accuracy of responses and construct validity was conducted through correlation and factor analyses to check on discriminant validity of the measure. Descriptive analyses was analyzed using frequencies and percentages, means and standard deviations. While inferential statistics was analyzed using multiple linear regression using 0.05 level of significance. Adjusted R2 was used to measure the amount of variation in the dependent variable that was attributed to changes in the independent variables. SPSS version 24 software aided in data analysis. The analyzed quantitative data findings was presented by the use of frequency tables, bar charts and pie charts. The response rate was 100% with all the questionnaires received back. The results indicated that commitment, empowerment , retention and industrial regulations have a significant effect on performance in BIMAS Kenya Limited at 79.2%.The data findings analyzed showed that cordial working relationship between employers, employees and the regulator is essential for employees to be fully engaged as well as in the achievement of organisational performance. That it was essential for organisations to exercise fairness and equity when dealing with employees especially in matters relating to employee relations, compensation and career growth to enhance their commitment. That organisations should consider the aspect of empowering employees as being very significant and managers should offer support and let their employees know what is expected of them. Giving them autonomy so that they can make better work related decisions. Retention of employees was seen to form an important component for any organisation to achieve its goals. Industry regulations was seen to contribute to fairness and equity in the industry enhancing the engagement of employees and in turn contributing to better performance. On regression, the model summary ascertained that the model was good and can be utilized for the purposes of estimation. The F critical at 5% level of significance was 3.123. Since F calculated is greater than the F critical (value = 25.185), this shows that the overall model was significant. This study recommends that managers should ensure all their employees have everything they require to perform their duties, be treated equally and adopt the use of different strategies to ensure that the output of employees is utilized to the maximum. Further studies should also be conducted on employee engagement because it is a relatively new concept, with a keen focus on commitment so that employees and the organisation understand what it is like to be committed, on empowerment so as to understand how an employee is empowered and on industrial regulations so that all organisation and businesses are better able to manage and understand their regulation across different industries
Description
A Research Project Submitted to the School of Business in Partial Fulfilment of the Requirement for the Award of Degree Master in Business Administration (Human Resource Management) of Kenyatta University, May 2022
Keywords
Employee Engagement, Performance, Microfinance Institutions, Kenya, Bimas Kenya Limited