Mutiso, Joan Mbithe2024-09-302024-09-302024-03https://ir-library.ku.ac.ke/handle/123456789/28957A Thesis Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of the Degree of Master of Science in Hospitality Management, in Kenyatta University, March 2024 Supervisor: 1. Rahab Mugambi 2.Vincent MarangaEmployee turnover is a key challenge in the hospitality Industry today. Compensation plays an important role in determining employees’ job satisfaction. The study aims to determine different types of compensations in practice in Hotels under study and analysis the type which attracts retention of employees more. This study was guided by five objectives: To assess the influence of the direct financial compensation strategies on labour turnover intentions of employees in 3-5 star rated hotels in Nairobi City County, Kenya; To evaluate the influence of the indirect compensation (fridge benefits) strategies and Labour turnover intentions among employees in 3-5 star rated hotels in Nairobi city county, Kenya; To establish Non-Financial Compensation strategies that influence Labour turnover intentions among employees in 3-5 Star Rated Hotels in Nairobi City County, Kenya; To examine the influence of the compensation practices on Labour turnover intentions among employees in 3-5 in star rated hotels in Nairobi City County, Kenya; To determine the moderating effect of socio-demographic factors (Age, gender,Education,income) on the relationship between compensation strategies and labour turnover intentions in 3-5 star rated hotels in Nairobi City county, Kenya. The study was guided by the Herzberg’s two factor theory of motivation and Expectancy theory. Descriptive research designs was used. A semi-structured closed ended questionnaire was used to collect data. The target population comprised a total of 463 managerial and operative staff. A stratified random sampling technique was used and a sample of 210 respondents selected and questionnaires administered. The Human Resource Managers were purposively included in the sample and interviews were scheduled for them as key informants. Data obtained was analysed using chi square contingency test and odd ratio to evaluate the association of direct financial strategies, indirect financial strategies, non- financial strategies and compensation strategies. Content analysis technique was utilized to analyse qualitative data. The findings were; that majority of employees in the 3-5 star rated hotels were between the age of 31- 40 and had Diploma level of education. Although base pay and commissions were the most popular compensation alternatives with a P<0.05, they were not significantly related to employee turnover, whereas indirect and non-financial compensation were significantly associated with employee turnover with 42.2% indicating that they would likely leave. On hypothesis testing, the null hypothesis for objectives one to three were reported as statistically significant with a P-Value less than 0.05. This indicates that direct, indirect and non-financial compensation strategies influence employee turnover (P<0.05). Notably, compensation practice does not influence turnover (P>0.05). The study concludes that a mix of compensation strategies, salary packages and improved working environments should be enhanced to reduce Labour Turnover. The likelihood of exit is high in the 3-5 is high with a P<0.08 thus the study recommends that the Hotels under study apart from base pay and commissions, should also provide their employees with special employee retention packages such as retirement benefits, insurance cover, medical allowance, travel, meal and recognition allowances. In addition, periodic review of employee benefits based on the prevailing market dynamics. The study recommended that a comprehensive compensation package be provided to reduce labour turnover intensions.enThesis