Influence of Compensation Practices on Performance of Employees in the Saving and Credit Institutions in Nairobi City County
Abstract
Saving and Credit Cooperative societies (SACCOs) are adopting human resources
practices such as compensation that are more attractive to employees of microfinance
institutions. The business of credit institutions is unique in aspects such as group lending
and therefore the loss of one employee through poaching or suitable replacement for
effective on portfolio management. Sacco‟s institutions are facing competition in the
market and this influence hiring competent employees. Despite adoption of human
resource practices by SACCOs, so little but scanty study had been done focusing on
compensation practices of performance on employee in SACCOs. The objective of the
study was to determine influence of compensation practices on employee in regulated
SACCO sector in Nairobi City County. The research done was descriptive research
design in nature. The population targeted was comprised 33 SASRA SACCOs in Nairobi
City County. The information collected was through questionnaires which could both
quantitative and qualitative information data. The research revealed that regulated
SACCOs had adopted various employee compensation programs such as direct
remuneration and indirect payment for services rendered by the employee through
commission, allowances and bonus, insurances schemes for health, dental, life, disability
and vision and retirement benefits. It was found that compensation programs
implemented by SACCOs focus on influencing employee performance as agreed.it was
concluded that regulated SACCOs had adopted variable compensation pay program in
rewarding of employees to improve performance. The study concluded that regulated
SACCOs adopted equity-based compensation programs such as salary variation which
influence long-term employee‟s productivity. The study concluded that regulated
SACCOs adopted competency based pay which the productivity of the SACCO to a very
great extent. The study concluded that adopted compensation practices which were
matching with financial payment in improving productivity. The study concluded that
regulated SACCOs implemented incentive pay compensation programs such as
allowances, eliminate pay inequalities, pay employees on leave motivating employees
paying overtime, paying compression as optimal on strict efficiency grounds influencing
employee motivation
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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