EVALUATING THE EFFECTS OF TOTAL REWARD ON JOB SATISFACTION AMONG BANK EMPLOYEES IN NAKURU MUNICIPALITY, KENYA

Abstract

Kenyan banking sector has experienced rapid growth in profits, deposits and revenues in the recent years and this has triggered a lot of competition among banks. In response, banks have developed new strategies to weather down the competition and thrive in business, the major one being rewarding of employees. This strategy has been hampered by economic pressure on banks to cut down on cost and particularly labour costs while maintaining employee job satisfaction and retention in order to remain competitive in the business environment. Various banks have therefore opted for various favourable reward strategies in order to enhance job satisfaction and retention of its employees. This research sought to evaluate the rewards used in banks and the influence they have on job satisfaction of employees. In order to achieve this objective, the researcher carried out a survey to gather opinions of employees working in the banking sector within Nakuru Municipality on total reward. The researcher collected data through selfadministered questionnaires from a sample of 108, obtained through stratified random sampling technique. The results were analyzed in terms of descriptive statistics (mode) followed by inferential statistics (correlation, regression) on the variables, and presented in tables, pie charts and graphs. The outcome of the study shows that there is a significant relationship between job satisfaction of employees in the banking sector and benefits, and learning and development. Correlation between rewards and absenteeism, lateness, turnover intention is significant and negative whilst relationship with job performance is positive. Biographical factors were found to significantly influence the preference of rewards and thus difference in job satisfaction among different groups of employees in the banking sector. The study concludes that rewards can motivate, energize and direct behavior, attract and retain qualified, high performance workers and, can greatly influence an organization’s success especially if perceived to be of value. Payment is an important element in job satisfaction, employees expect an all round and well balanced package comprising of both financial and non-financial rewards. Equality of needs and expectations should not be assumed for all categories of employees as well as individuals. The study recommends that organizations should assess the needs of employees and identify weaknesses in the present reward system in order to formulate an effective reward strategy that bears the greatest value to the organization and employees alike. Biographical factors, intrinsic value, extrinsic and internal and external relativities, inflation and market movement, business performance and trade union proposals should be factored in the design of reward strategies. The study recommends further research on subjects including effects of one’s maladjustment to the workplace, personal attributes emotions, and work ethics on job satisfaction; inter-bank difference between the most successful banks and those which are less successful in terms of reward strategies.