Compensation Practices and Firm Productivity in Multinational Tea Companies in Kericho County, Kenya
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Date
2022
Authors
Bon, Hillary Rugut
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Multinational organization face challenges in firm productivity in terms of quality, quantity of work, effectiveness and employee performance. The general aim of the study was to investigate the effect of compensation practices on productivity of multinational tea companies in Kericho County. The specific objectives were to; establish the influence of monetary pay, allowance, fringe benefits and incentives on the productivity of multinational tea companies in Kericho County. This study is significant to the organization in developing compensation policies as well as regulations. It would also provide insightful knowledge to the scholars and researchers. The study utilized human capital theory, equity theory and theory of performance and equity theory was the main theory. Multinational tea companies’ management would benefit from compensation solution to the cyclic trend of low production. Similarly, government and human resource practitioners would be able to develop appropriate compensation policies and regulation. Study used descriptive research design. It targeted 99 senior, middle and lower managers of James Finlays Kenya Limited, George Williamson Limited and Unilever Limited in Kericho County. A census of 99 managers was used as respondent. Data was obtained using questionnaires which was tested for reliability and validity. The data was analyzed using descriptive especially the mean and standard deviation. While inferential statistics was utilized to test significance. The analyzed data was presented in charts. Biographic data indicated that middle aged male was the highest employee in the multinational tea companies. Descriptive statistics findings revealed that wages and overtime was sufficient in improving productivity through increase in quantity of work. However, salaries were unfavorable in the organization affecting productivity. Money pay was found to have positive significant effect on firm productivity. The study found that the firm provided employees with commuter, house and medical allowances which assisted in improving work-life balance through creating conducive environment for high productivity. Allowances had positive significant effect on firm productivity. The firms had insurance cover, retirement benefit, maternity/ paternity as well as sick leave which assisted in improving employee welfare. However, the fringe benefit offered the lowest positive significant effect to firm productivity. Bonus, gain sharing and commission were among incentive given be the firm. According to the result there was significant effect of incentive on firm productivity. This was the second highest contribution for firm productivity. The study concluded that monetary pay, allowance, fringe benefit and incentive significantly affected on firm productivity. The study recommended that the firm should improve on salary packages though benchmarking in other firms. The study also suggest that other allowance should also be evaluated as well as fringe benefit. The study also suggest that other incentive should be explored based on employee performance which results in firm productivity.
Description
A Research Project Submitted to the School of Business in Partial Fulfilment of the Requirements for the Degree of Masters of Business Administration (Human Resource Management Option) of Kenyatta University, June, 2022
Keywords
Compensation Practices, Firm Productivity, Multinational, Tea Companies, Kericho County, Kenya