International Journal of Commerce and Management Research

International Journal of Commerce and Management Research

ISSN: 2455-1627, Impact Factor: RJIF 5.22
www.managejournal.com
Volume 2; Issue 10; October 2016; Page No. 42-51

Influence of reward systems on employee retention in faith based health organizations in Kenya: a
case of Mukumu Hospital, Kenya
Mark Okinyi Oyoo, Nicholas Kadaga Mwandihi, Douglas Musiega
Jomo Kenyatta University of Agriculture and Technology, P.O BOX 1014, Kakamega, Kenya

Abstract
The objective of the study is to investigate the influence of reward systems on retention of employees in faith based health
organizations in Kenya. The reward system aspects that influence employee retention include; intrinsic reward, extrinsic reward
and career development. To achieve this primary data was collected through the use questionnaires. Simple random sampling
technique was used to select a sample of 113 from a population of 160 respondents out of which 105 questionnaires were returned.
Internal consistency was tested using Cronbach’s alpha and all the variables indicated reliable values. Data collected was then
analyzed using both descriptive and inferential statistics. Correlation design was adopted to explain the causal relationship between
reward systems and employee retention. The study found out that there was a strong and positive correlation between employee
retention and intrinsic rewards, which was statistically significant. There was also a strong and positive correlation between the
Employees’ retention and extrinsic rewards which was an indication that extrinsic rewards has positive influence on employee
retention. Career development also positively influenced the retention of faith based health organization employees in Kenya. The
respondents indicated that both intrinsic, extrinsic as well as career development are important components of employee retention.
The study concluded that majority of the respondents indicated that both intrinsic, extrinsic as well as career development are
important components of employee retention. This study recommends that the reward system exercised by the faith based health
organizations in Kenya should be easily understood by the workers so that they can easily calculate personal cost benefits for various
levels of effort they put. Reward packages must be valuable to the employees and should be based on realistic and reliable standards.

Keywords: Influence, reward systems, faith based health, organizations, Kenya

1. Introduction this is likely to provide a greater attraction and retention to a

This chapter will highlight the background of the study, the greater number of employees. Reward is a critical motivator
statement of the problem, objective of the study, significance, towards an employee’s choice to remain in an organization.
scope and limitation of the study. Rewards have been shown to motivate performance when
certain conditions exist, Blinder (1990) [3]. Individuals are best
1.1. Background to the Study motivated and become retained when they believe that their
Since the adoption in 2000 of the Millennium Development behaviors will lead to certain outcomes that are attractive and
Goals (MDGs) to improve health outcomes in developing that performance at a desired level is possible. Vroom suggests
countries, several initiatives and reports have focused on the that individuals will choose behaviors they believe will result
critical role played by human resources for health (WHO in the achievement of specific outcomes they value. In deciding
2000). For many organizations employee retention is a how much effort to put in work behaviors, individuals are
strategic intention. Retention of critical skills is a prerequisite likely to consider three things; valence, instrumentality and
to the success of an organization in the medium to long term. expectancy. All these factors are referred to as VIE and are
Acquisition of key skills and talent therefore forms an considered to influence motivation and retention in a combined
important aspect of organization success and provides a key manner. According to Ryan and Pointon (2005) [17] managers
competitive advantage. Organizations develop various reward should attempt to assure their employees that increased effort
strategies and practices to ensure that critical human capital will lead to higher performance which will lead to valued
resources are not only attracted but also retained and fully rewards. This study looked at the relationship between reward
exploited for the benefit of the organization. systems employed by faith based health organizations and
Reward is one of the most important components of an employee retention.
organizations retention strategy. Armstrong (2009) [1] states
that rewarding people is concerned with design, 1.2. Statement of the Problem
implementation and maintenance of reward systems that are According to (Ashhra, 2009) report, health care organizations
geared to the improvement of organizational, team and are facing significant retention challenges. Fifty-two percent
individual performance. It includes both financial and non- have difficulty caused by turnover of critical-skill employees
financial rewards. It is imperative therefore that every while 40 percent are adversely affected by difficulties
organization develops and install reward strategies that recruiting and staffing physician positions. In 2013, Kenyan
motivate staff to remain in the organization. Organizations doctors went on a nationwide strike over better pay, and
should adopt the all-encompassing approach of total reward, as working conditions, converging in the capital and leaving

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many patients being unattended to. The Ministry of Health, 2. Literature Review
staffing trends 2005-2009 indicated that the rate of medical 2.1. Introduction
personnel that have existed during the same period stands at: Retaining talented employees is one of the critical issues facing
doctors 972, clinical officers 356, nurses 1,964, nursing officer organizations today because of shortage of skilled workers,
461, and medical lab technologists were 185 with private and economic growth and high employee turnover. The
especially faith based hospitals worst hit (KNBS, 2010). The employment relationship is undergoing fundamental
high turnover has been associated with salary delays, poor challenges that have implications in attracting, motivation and
working conditions, lack of training and development retaining talented employees and talent shortage has resulted
opportunities occasioned by the emergence of new machines to fierce competition. This chapter provides an overview of
(KNUN, 2013). The records of Mukumu Hospital indicate that related literature and also looks at related past studies in this
between 2013 and 2014 a total 30 employees have left their area and the gaps inherent in organizations in terms of reward
jobs to other organizations. These records went on to reveal systems.
that a high number of the recruits never stayed for more than
four months. As a result, the hospital has been heavily relying 2.2. Theoretical Framework
on professionals from Public hospitals who are contracted on The researcher focused on four theories. The resource based
locum and only visit the hospital during their off days. This has view (RBV) posits that human and organizational resources
led to high costs in service delivery and inability to offer certain more than physical, technical or financial resources, can
services especially those that are required by patients when the provide a firm with sustained competitive advantage because
contracted professionals are engaged elsewhere. This study they are particularly difficult to emulate. How a firm’s system
therefore sort to find out the relationship between reward among its other attributes, enable it to achieve competitive
systems and employee retention in faith based health advantage is the central idea of resource based view. The
organizations in the County Government of Kakamega. exchange theory views employment relationship as consisting
of social or economic exchanges. Economic exchange
1.3. Objective of the Study relationships involve the exchange of economic benefits in
The objective of this study was to determine the influence of return for employees’ efforts and are often dependent on
reward systems on employee retention in faith based health formal contracts which are legally enforceable. On the other
organizations in Kenya. hand, social exchanges are ‘voluntary actions’ which may be
initiated by an organization’s treatment of its employees, with
1.4. Significance of the Study the expectation that the employees will be obligated to
This study will therefore be valuable to the management of reciprocate the good deeds of the organization (Gould &
faith based health organizations in identify factors which are Davies, 2005). The exchange approach view of organizational
important in developing committed employees, retaining and engagement posits that individuals attach themselves to their
motivating them in order to improve turnover and their organizations in return for certain rewards from the
performance. The study will also make a contribution to organizations. According to this view, employees enter the
adjustment of reward policies and structures in faith based organization with specific skills, desires and goals, and expect
health organizations. Academicians will benefit from this study to find an environment where they can use their skills, satisfy
as reference for thoughts and ideas on similar studies and their desires and achieve their goals. Adams Equity theory
research in future. This study will also add to the knowledge asserted that employees seek to maintain equity between the
available for research. The study will also be useful to other inputs that they bring to a job and the outcomes that they
organizations that may be facing similar challenges to those receive from it against the perceived inputs and outputs of
being analyzed. Such organizations may base policy others. Adams (1965) as cited by Ng’ethe et al. (2012) uses the
adjustment and change on the findings of this study. It is equity theory to explain employee retention. The theory is
envisaged that the findings, conclusions and recommendations founded on people’s perception of fairness or equity which is
of this study will provide useful information to the Ministry of usually subjective. The theory posits that employees seek to
Health and help policy makers and planners to ensure that maintain equity between the input that they bring into the job
health organizations have enhanced output through integration such as education, time, commitment, and effort and the
of the reward management practices in their operations. outcome they receive. For instance, an individual’s motivation
level is determined by how he/she perceives equity, fairness
1.5. Scope of the Study and justice practiced by management (Nzure, 2007). The
This study was carried out in Mukumu Hospital within the year implication is that the higher the degree of employees
2015. It focused on doctors, nurses, clinical officers, perceiving fairness, the more they are motivated to perform and
pharmacists, and laboratory technicians/technologists. The also their levels of commitment increases hence they are likely
study targeted staff working in the hospital to give their remain there for long. The social cognitive career theory was
responses for the study. The study specifically sought to conceptualized as a derivative of Bandura’s general social
analyse the relationship between reward systems and employee cognitive theory in which the intersection of intrinsic and
retention. It also looked into identifying and recommending extrinsic factors influences psychosocial learning. This theory
further possible actions points that the hospitals might be able has been termed as the most promising career theory that may
to use to improve employee retention. prove satisfactory in retention and career development. Lent
and Brown (2006) expanded the scope of social cognitive
career theory, offering a new and related social – cognitive
model designed to explain the ways in which previously
identified inputs such as self-efficacy and outcome
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expectations, along with person and contextual variables are hand was measured using parameters of salary, bonus, and
related to job satisfaction. promotion. The study sought to understand how these
independent variables determine the level of employee
2.3. Conceptual Framework retention which was the dependent variable. Employee
In this study, the independent variables were; intrinsic rewards, retention was measured using parameters of the length of time
extrinsic rewards and career development. Intrinsic rewards the employee had worked in the organization and their
was measured using parameters of responsibility, intention to quit the organization. See figure 2.1
achievements and recognition. Extrinsic rewards on the other

Fig 1: Conceptual Framework Independent Variable Dependent Variable

2.4. Reward Systems and embedded in the organization’s culture, productive

Nelson and Peter (2005) stated “You get what you reward”. employees remain (Shechtman, 2008).
According to them, a reward system is the world’s greatest A reward system puts together employees’ natural self-
management principal. If the organization rewards a certain interests with the organization’s objectives and provides three
kind of employee behavior good or bad, that is what the types of management control benefits, informational,
company will get more of (Svensson, 2001). Every existing motivational and personnel related. Rewards should catch the
company has some form of reward system, whether it is employees’ attention and at the same time it works as a
outspoken or not, it exists (Jaghult, 2005). People correspond reminder for the person in charge of what results should be
positively to praise, and praise in the right moment creates completed in different working areas. Organizations use
loyalty and affinity. There exists a variety of purposes of a reward systems to emphasize on which parameters their
reward system. One very common is to motivate employees to employees should exert the extra effort on by including them
perform better, but also for keeping the employees. For a in their reward program (Svensson, 2001). Rewards are also
reward system to be ideally motivational, the reward should used to motivate. People sometimes need an incentive to
satisfy a number of criteria; have value, be large enough to perform tasks well and work hard. Organizations also give
have impact, be understandable, be timely, the effect should be rewards for many other different reasons e.g. to improve
durable and finally the rewards should be cost efficient recruitment and retention by offering a compensation package
(Merchant, 2007). that is competitive on the market (Merchant, 2007).
Sutherland (2004) demonstrates that reward is the basic According to CIPD, (2002) [6], the value of rewards lies in
element which indicates how much employees gain by acknowledging that pay is not set in isolation and reward
dedicating their time and effort towards the achievements of systems work best when they fit closely in the overall context
company objectives; therefore employers have the of work and other Human Resource Management practices. A
responsibility to designing an attractive reward package to well designed incentive program rewards measurable changes
attract and retain valuable employees. Shoaib et al. (2009), also in behavior that contribute to clearly defined goals Wilson
attest that it is important for employers to know the value (2003). According to Schuster and Zingheim (1992) reward
employees place in their reward systems and to formulate Systems are critical parts of any organization's design. How
strategies that address equitable and adequate reward for their well they fit with the rest of the systems in an organization has
employees. When appropriate reward strategies are understood
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an important impact on how effective the organization is and Extrinsic rewards are used to show that the company is serious
on the quality of life that people experience in the organization. about valuing team contributions to quality. The monetary
rewards consist of a cash bonus allocated to each team member.
2.4.1. Intrinsic Reward The team bonus would be given separately from the salary. On
Intrinsic rewards are those that exist in the job itself. Examples the other hand, team rewards must be used in ways that avoid
are achievement, variety, challenge, autonomy, and destroying employees’ intrinsic motivation to do their job. The
responsibility. They also include status, recognition, praise need for continuous improvement requires employees to be
from superiors and co-workers, personal satisfaction, and innovators; devising novel solutions that improve a work
feelings of self-esteem (Mahaney and Lederer 2006). Intrinsic process or that delight the customer. The use of extrinsic
rewards increase feelings of self-esteem and accomplishment rewards that are tightly linked to team performance may teach
and are derived from the content of the task itself and include team members to become money hungry and undermine their
such factors as interesting and challenging work, self-direction intrinsic interest in the work itself. A study in Australia by
and responsibility, variety, creativity, opportunities to use Cowin (2002) [7] indicated that nurses were dissatisfied with
one’s skills and abilities, and sufficient feedback regarding the their payment as their additional nursing qualifications were
effectiveness of one’s efforts (Mottaz 1985). Employees are not considered. Reportedly there was also no pay incentive for
thought to be motivated to work hard to produce quality results experience or for knowledge. Although some experienced
when they have pride in their work, they believe their efforts nurses were happy about their salaries, improving nurses’
are important to the success of the team, and their jobs are fun, salaries appeared to be a necessity to retain large numbers of
challenging, and rewarding (Mahaney and Lederer 2006). nurses within the professionally active ranks in Australia.
Most people have a need for high evaluation of themselves and
feel that what they do should be recognized by others 2.4.3. Career Development
concerned (Prasad, 2001) [18]. Recognition means The emergence of new career has highlighted the need for
acknowledgment with a show of appreciation. When such employees to be concerned with career development and
appreciation is given to the work performed by employees, employability. In this knowledge economy, developing
they feel motivated to perform work at a similar or higher level competencies forms an essential part of organizational
(Prasad, 2001) [18]. Cascio (1998) [5], indicate that rewarding a competencies. One of the key factors of the retention of skilled
behavior with recognition immediately following that behavior employees is the provision of training and development
is likely to encourage its repetition. opportunities (Chitalu, 2011). Most organizations may use
In a study in Pakistan, Khowaja (2005) found that most career management programmes to assist their employees to
participants indicated that there was a lack of appreciation for properly plan their careers because it is believed that generally,
good performance by managers. If managers were supportive, employees react positively to career development and
respect and recognize other health workers’ achievements, this advancement opportunities (Khan, 2010). According to Lewa
could boost their morale and lead to higher levels of job (2010), Kimani and Waithaka, (2014), talent management is
satisfaction and retention. Employees are happy if the important as emphasizes on growth from within and
organization shows interest in them and if their contributions development as key elements of business strategy, maintaining
are recognized. Praising individuals could be done in different career paths, coaching, clear competencies, mentoring and
ways like a note of praise to them, giving a bonus or having a demanding quantifiable results. Today’s employees are more
formal recognition program like “employee of the month and career conscious than ever. They are demanding more in terms
customer care awards. Alexander (2003) found that the longer of personal growth and development. Developing high
nurses worked on one particular unit, the greater the likelihood potential individuals presents one of the means by which
that they would be dissatisfied with their job and experience organizations can face its competitive pressures. The fact that
psychological distress. high-potential employees are career-minded is important for
organizations to create an employee value proposition that
2.4.2. Extrinsic Rewards supports career development. According to many career
Extrinsic rewards, on the other hand, are external to the job authors, organizational career management supports the
itself. They comprise such elements as pay, fringe benefits, job development of employee commitment (Sturges et al., 2002).
security, promotions, private office space, and the social When organizational career management practices meet
climate. Other examples include competitive salaries, pay employees pre-joining expectations, retention, commitment,
raises, merit bonuses, and such indirect forms of payment as satisfaction and other positive outcomes are enhanced (Sturges
compensatory time off (Mottaz 1985, Mahaney and Lederer et al., 2000). According to (Lubitsch & Smith, 2007) [14], the
2006). Firms are able to improve worker productivity by shift away from a psychological contract that provided job
paying workers a wage premium a wage that is above the wage security and a mutual employment relationship, towards one
paid by other firms for comparable labor. A wage premium where individuals have to maintain their’ employability’
may enhance productivity by improving nutrition, boosting through managing their own development and career
morale, encouraging greater commitment to firm goals, progression has undoubtedly shifted the balance of power
reducing quits and the disruption caused by turnover, attracting towards talented professionals. Organizations that fail to allow
higher quality workers and inspiring workers to put forth employees to meet their individual needs will be losing valued
greater effort (Goldsmith, Veum and Darity 2000). As a result, employees. Career development is an approach of an
people are attracted to well-paying jobs, and as such extend organization ensuring that people with the qualifications and
extra effort to perform the activities that bring them more pay, experience are available when needed (Kleiner, 2001). Using
and become agitated if their pay is threatened or decreased career development approach employers can coach the
(Stajkovic and Luthans 2001). employee in his individual career planning, and by realizing
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the plans of employees can plan the allocation of human rather than an outcome. Organizations strategists develop
resources. Thus, the career development is perceived like joint employee retention as a strategy with focus of gaining
effort between the individual employee and the organization. competitive advantage that is aligned to the overall
Vos and Megarck (2009), indicated that career development organizations strategy. There are various high performance
plan for employees play a vital role in the retention of environments that share a serious devotion to results after
employees. Providing career development opportunities employees are retained. This calls for examining approaches
restrict employees from leaving the organization and increases that can be used to retain critical employees. Nurturing from
loyalty. entry level, a new hire and then to high performing and
The world of work has also undergone changes in both the committed employees requires organization to understand
nature of work and the emergence of new forms of work, which requirements of positive work environment.
result from innovation, the development of new knowledge, According to Holland et al. (2007) [10], Human Capital, gives
increased competition and other factors (Brown,et al. 2003; competitive edge due to its uniqueness. As such, it is one of the
Sennett, 2006). Social developments such as continuing resources that work as a pillar for an organization. Focus has
globalization, technological innovation and growing global therefore shifted to the employees of the organizations.
competition place pressure on organizations to emphasize their Employees play an important role in organizations, they are the
need to maintain their competitive edge at least in part through greatest resource an organization can have and it is through
maintaining their skills. This need makes it important for an their involvement that the organization can become
organization to evolve through a continuous learning and competitive. (Sempane, Rieger & Roodt, 2002) [20]. In today’s
development. There is also a shift from commodity based business environment, employees tend to be less committed to
economy to knowledge –based economy in which an increased their organizations. An employer cannot guarantee the stability
proportion of organizational assets are intangible. Although and longevity of career paths or the security of employees’
salary and benefits play a role in recruiting and retaining jobs. The old contract of employee loyalty in exchange of job
employees, people are also looking for opportunities to learn, security and fair work has broken down (Overman, 1998). The
the challenge of new responsibilities and the prospect of trend these days seems to be geared towards having a “career
personal and professional growth (Wagner, 2000). Satisfying portfolio” (Handy, 1995). It is important to note that employees
these intrinsic needs helps build trust, morale, loyalty and today, realize that they have to take the initiative in job
overall satisfaction in employees, (Nunn, 2000). resiliency, developing skills and flexibility needed to respond
There has been a shift from job security and lifelong to shifting employer requirements (Beck, 2001) [2]. Loyalty to
employability to lifelong learning and talent management one’s professional growth has replaced organizational loyalty
(Brown et al., 2003; Sennet, 2006). It is therefore important to (Levin, 1995) [13]. According to Hays and Kearney (2001) [9],
give employees opportunities to develop and learn (Arnold employees recognize that the traditional psychological contract
2005; Bernsen et al., 2009; Herman, 2005) such that employees that existed between employer and employee is now dissolved.
maintain their capabilities as effective employees, resist
redundancy are retained by their organization. 3. Research methodology
3.1. Introduction
2.5. Employee Retention This chapter discusses the methodological approach for the
Long-term health and success of any organization depends study and it comprises the research design, population
upon the retention of key employees. To a great extent sampling, data collection, data analysis and presentation.
customer satisfaction, organizational performance in terms of
increased sales, satisfied colleagues and reporting staff, 3.2. Research Design
effective succession planning etc., is dependent upon the The study was designed as a descriptive case study. The
ability to retain the best employees in any organization. researcher preferred the method because of its ability to
According to Denton (2000) [8], employees who are happy and describe a situation and its minimum bias in the collection of
satisfied with their jobs are more dedicated towards their work data. Wanjau and Wanarigi, (2012) [23] holds that descriptive
and always put their effort to improve their organizational design involves large numbers of persons, and describes
customer’s satisfaction. Employee retention is a process in population characteristics by the selection of unbiased sample.
which the employees are encouraged to remain with the It involves using questionnaires and sometimes interview tests,
organization for the maximum period of time or until the and generalizing the results of the sample to the population
completion of the project. Zineldin, (2000) has viewed from which it is drawn. Descriptive design is the most
retention as an obligation to continue to do business or frequently used method of collecting information about
exchange with a particular company on an ongoing basis. peoples’ attitudes, opinions, and habits on social issues and
According to Stauss et al., (2001) [21] employee retention refers such studies usually do not involve hypothesis testing.
to customer liking, identification, commitment, trust, readiness
to recommend, and repurchase intentions, with the first four 3.3. Population
being emotional-cognitive retention constructs, and the last The study population included all permanent health
two being behavioral intentions. Managing and retaining professional staff working in faith based health organizations
promising employees is an important fundamental mean of in Kenya. The target population was 160 workers at Mukumu
achieving competitive advantage among organizations Hospital.
(Walker 2001) [22].
Parkinson (1990) defines employee retention as the efforts by 3.4. Sampling Frame
which employers attempt to retain employees in their The sampling frame for the study was the list of permanent
workforce. In this sense employee retention becomes a strategy health professional employees obtained from the hospital
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Administrator’s and human resource office at Mukumu 3.9. Data Processing and Analysis
Hospital. Data collected was analyzed qualitatively and quantitatively
using the statistical product for scientific studies (SPSS).
3.5. Sampling Technique Before starting the analysis process, the researcher processed
The respondents were selected using simple random sampling the data by editing, categorizing and coding it appropriately.
techniques. The area of study, Mukumu Hospital was After processing the researcher then fed the data into the
purposively selected. The target population composed of computer via the SPSS programme. As a data analysis tool the
doctors, nurses, clinical officers, laboratory technicians and SPSS offers extensive data handling capabilities and numerous
pharmacists who were selected using stratified random statistical analysis routines that can analyze small to very large
sampling technique for categorization. data statistics (Araoye, 2004). The SPSS programme helped in
generation of frequency tables which provided frequencies and
3.6. Sample Size percentages used in qualitative analysis. The SPSS also helped
Sample size is a vital feature of any empirical study in which in quantitative analysis that gave the Pearson correlation
the goal is to make inferences about a population. To obtain the coefficient which aided in the identification of the level of
sample size the following formula was used. significance in the relationship between the variables under
S = X2NP (1− P) ÷ d2 (N −1) + X2P (1− P). (Krejcie and study. This statistics were important in interpretation,
Morgan, 2012) discussions, conclusions and recommendations made
Where:
S = required sample size. 4. Research findings and discussions
X2 = the table value of chi-square for 1 degree of freedom at 4.1. Introduction
the desired confidence level (1.96x1.96 = 3.841). This chapter describes the methods applied in order to achieve
N = the population size. the study objectives. The data analysis was carried in line with
P = the population proportion (assumed to be .50 since this the study objectives from which the patterns were investigated,
would provide the maximum sample size). interpretations done and conclusions drawn. The main
d = the degree of accuracy expressed as a proportion (.05). objective of the study was to establish the influence of reward
This gave a sample size of 113 respondents. This have systems on employee retention in faith based health
sufficiently surpassed the minimum threshold sample size organizations in Kenya. Specifically the study sought to
recommended by Gay (2005) that a sample size of the target examine the effect of intrinsic rewards on retention of
population is regarded as adequate for small population (N ≤ employees in faith based health organizations in Kenya, to
1000). determine the influence of extrinsic rewards on retention of
employees in faith based health organizations in Kenya and to
3.7. Data Collection Procedure determine the effect of career development on retention of
The source of data was primary as this study was an original employees of faith based health organizations in Kenya.
study. As indicated earlier a close-ended questionnaire for staff
was used as the main instrument to collect data. Personal 4.2. Demographic Characteristics
interviews were conducted with hospital administrator. Before Out of the 105 respondents that formed the study sample had
administering the instruments the researcher was given different demographic representations. Fourty (38.1%) were
permission from the Director, JKUAT, Kakamega CBD. He male while 65(69.1%) were female. In terms of education,
sought permission from the hospital administrator. The 17(16.1%) of the respondents had certificate qualification, 53
administrator introduced him to departmental heads who then (50.5%) had Diplomas, 34(32.4%) had bachelor’s degrees,
introduced him to respondents that participated in the study. 1(1%) masters. The pictorial presentation depicted that
The researcher established a working relationship with the majority 50.5% of the respondents had attained bachelors level
respondents who accepted to participate in the study. The of education, followed by those who had bachelors, certificates
appropriate time for administration was negotiated between the and masters respectively. This implies that the organization
researcher and the respondents. The questionnaire distribution had a homogenous pool of staff though skewed towards
was facilitated by the assistance a head of department who also diploma holders. Twenty five (23.8%) were aged 20-25 years,
assisted in the collection process. The whole of this exercise 42(40%) were aged 26-30 years, 18(17.2%) aged 31-35 years,
was done for a period of two months as some of the 12(11.4%) were aged between 36-40 years while 8 (7.6%)
respondents were too busy due to workload constraints. were aged between 41-45 years.

3.8. Research Instruments 4.2.1. Intrinsic Rewards

The main research instrument for the study was a questionnaire Respondents were asked to indicate the extent to which they
for hospital staff. The questionnaire was close-ended to ease agreed with statements in relation to intrinsic rewards in the
analyze of data (Petrick, 2009). It consisted of ten statements organization. The mean and standard deviation were used to
for each of the four variables of totaling to thirty fourty (40) summarise the study findings in table 4.1. Most employees
statements. The statements were rated using a five point Likert were not satisfied with the intrinsic rewards of their
scale with each aspect rated from 1(strongly disagree) to organizations. Most items had low rating, which include, the
5(strongly agree) that is (1- Strongly Disagree; 2- Disagree; 3- organization’s intrinsic rewards promote commitment
neutral/undecided; 4- Agree; 5- Strongly Agree). In this study (Mean=2.39, SD= 1.00), my achievements give me the zeal to
emphasis was given to primary data. stay in this organization (Mean=2.43, SD= 0.95), the
responsibilities I am given are fitting my qualifications
(Mean=2.46, SD= 1.07) and my efforts are acknowledged in
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this organization (Mean=2.34, SD= 1.05), I am proud of my satisfied with the organization’s reward policy (Mean=2.33,
work in this organization (Mean=2.40, SD= 1.11), I am SD= 0.95).

Table 2: Means and Standard Deviations for the Indicators of Intrinsic Rewards
Item N Mean SD
Intrinsic Reward
I understand the intrinsic rewards the organization offers 105 3.17 1.08
The organization’s intrinsic rewards promotes commitment 105 2.39 1.00
The organization’s reward system recognizes superior performance 105 3.22 1.01
My achievements give me the zeal to stay in this organization 105 2.43 0.95
My achievements are recognized acknowledged 105 3.17 1.08
The responsibilities I have motivate me to remain in this organization 105 3.22 1.01
The responsibilities I am given are fitting my qualifications 105 2.46 1.06
My efforts are acknowledged in this organization 105 2.34 1.05
I am proud of my work in this organization 105 2.40 1.11
I am satisfied with the organization reward policy. 105 2.93 0.95

The rest of the respondents were neutral on the intrinsic 4.2.2. Extrinsic Rewards
rewards of the organization which include, I understand the Ten (10) items were used to measure extrinsic rewards among
intrinsic rewards the organization offers (Mean=3.17, SD= the respondents. Respondents were requested to rate the items
1.08), my achievements are recognized and acknowledged on a five point likert-type scale ranging from 1 “strongly
(Mean=3.17, SD= 1.08), the organization’s reward system disagree” to 5 “strongly agree”.
recognizes superior performance (Mean=3.17, SD= 1.08), the The table 4.2 shows how respondents rated various items of
responsibilities I have motivate me to remain in this intrinsic rewards. The respondents disagreed with all the items
organization (Mean=3.22, SD= 1.08). From the analysis on this scale which included, I am satisfied with my pay
therefore it can be concluded that employees at the faith based (Mean=2.41, SD=1.15), I am satisfied with the working
health organizations in Kenya are not satisfied with intrinsic condition (Mean=2.33, SD=1.19), Benefits provided by the
rewards offered in the organization. organization are satisfying (Mean=2.42, SD=1.11), I am
The findings of this study are in line with the findings of other satisfied with the bonuses I get in my job (Mean=2.20,
scholars. According to Honig Haftel and Martin (1993), SD=1.22), My organization’s pay is benchmarked to the
intrinsic rewards increase feelings of self-esteem and market (Mean=2.36, SD=1.10), My organization’s pay is
accomplishment which makes employees remain in an competitive (Mean=2.7., SD=1.11), The promotion systems of
organization. They are derived from the content of the task the organization are fair (Mean=2.24, SD=1.05), I am satisfied
itself and include such factors as interesting and challenging with the allowance I get at organization’s based on my grade
work, self-direction and responsibility, variety, creativity, (Mean=2.20, SD=1.11), My pay and grade is commensurate
opportunities to use one’s skills and abilities, and sufficient with the my colleagues in the same job get (Mean=2.39,
feedback regarding the effectiveness of one’s efforts (Mottaz SD=1.05), I am paid for any overtime I work (Mean=2.46,
1985). Employees are thought to be motivated to work hard to SD=1.07). On the basis of this study results, most respondents
produce quality results when they have pride in their work, do not enjoy the extrinsic rewards offered by the organization.
they believe their efforts are important to the success of the Extrinsic rewards are used to show that the company is serious
team, and their jobs are fun, challenging, and rewarding about valuing team contributions to quality.
(Mahaney and Lederer 2006). According to the exchange These results are in tandem with a study in Australia by Cowin
theory perspective, employees exchange their identification, (2002) [7] which indicated that nurses were dissatisfied with
loyalty and attachment to the organization, in return for their payment as their additional nursing qualifications were
incentives from the organization. This implies that an not considered. Reportedly there was also no pay incentive for
individual’s decision to become and remain a member of an experience or for knowledge. Although some experienced
organization, is determined by their perception of the fairness nurses were happy about their salaries, improving nurses’
of the balance of organizational inducements and the employee salaries appeared to be a necessity to retain large numbers of
contribution nurses within the professionally active ranks in Australia.

Table 2: Means and Standard Deviations for the Indicators of Extrinsic Rewards
Item N Mean SD
I am satisfied with my pay 105 2.41 1.15
I am satisfied with the working condition 105 2.33 1.19
Benefits provided by the organization are satisfying 105 2.42 1.11
I am satisfied with the bonuses I get in my job 105 2.02 1.22
My organization’s pay is benchmarked to the market 105 2.36 1.10
My organization’s pay is competitive 105 2.20 1.11
The promotion systems of the organization are fair 105 2.24 1.05
I am satisfied with the allowance I get at organization’s based on my grade 105 2.20 1.11
My pay and grade is commensurate with the my colleagues in the same job get 105 2.39 1.05
I am paid for any overtime I work 105 2.46 1.07

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International Journal of Commerce and Management Research

4.2.3. Career Development (Mean=2.16, SD=1.10), there is job rotation in the organization
Most respondents disagreed with the statements. As illustrated (Mean=2.41, SD=1.05), the organization has a well-defined
in table 4.3 they responded as; I am offered opportunities to succession plan (Mean=2.34, SD=1.05), I am encouraged to
grow and develop (Mean=2.02, SD=1.05), I get leadership upgrade my skills (Mean=2.44, SD=1.02), I am given leaves
training on my job (Mean=2.31, SD=1.10), there is a when I request to go for studies (Mean=2.49, SD=1.05), the
mentorship program for juniours (Mean=2.23, SD=1.11), I get organization recognizes and awards skill upgrades
secondments to attend outside trainings (Mean=2.03, SD= (Mean=2.46, SD=1.07).
1.22), I am given other assignments outside the organization

Table 3: Means and Standard Deviations for the Indicators of Career Development
Item N Mean SD
I am offered opportunities to grow and develop 105 2.01 1.05
I get leadership training on my job 105 2.31 1.10
There is a mentorship program for juniours 105 2.23 1.11
I get secondments to attend outside trainings 105 2.03 1.22
I am given other assignments outside the organization 105 2.16 1.10
There is job rotation in the organization 105 2.41 1.11
The organization has a well-defined succession plan 105 2.34 1.05
I am encouraged to upgrade my skills 105 2.44 1.02
I am given leaves when I request to go for studies 105 2.49 1.05
The organization recognizes and awards skill upgrades 105 2.46 1.07

The analysis above indicates that employees agreed that they respondents’ intentions to quit based on factors that may
are not offered opportunities to grow and develop, they don’t prompt their quitting. Respondents were asked to indicate their
get leadership training on my job there is no mentorship levels of agreement with pertinent questions posed to establish
program for juniours, they don’t get secondments to attend their intention to quit, which has a significant impact on
outside trainings, they are not given other assignments outside whether employees will stay or leave. They were requested to
the organization there is no job rotation in the organization, the rate items on a five point likert scale ranging from 1 “strongly
organization doesn’t have a well-defined succession plan, the disagree” to 5 “strongly agree”. The table 4.4 shows how
employees are not encouraged to upgrade their skills, they are respondents rated various items. When respondents were asked
not given leaves when they request to go for studies and that whether their unwillingness to put in a great deal of effort
the organization does not recognize and award skill upgrades. beyond what is normally expected would prompt them to quit,
One of the key factors of the retention of skilled employees is most respondents agreed (Mean=4.43, SD=0.89). Similarly,
the provision of training and development opportunities when respondents were asked if their lack of pride in the
(Chitalu, 2011). As such most organizations use career organization would make them quit, the mean score was high
management programmes to assist their employees to properly (Mean=4.22, SD=1.01). Other items were rated as follows; I
plan their careers because it is believed that generally, have many options and I am considering leaving this
employees react positively to career development and organization (Mean=4.10, SD=1.10), I don’t feel very happy to
advancement opportunities (Khan, 2010). According to Lewa spend the rest of my career with this organization It would be
(2010), Kimani and Waithaka, (2014), talent management is very hard for me to leave my organization right now
important as it emphasizes on growth and development from (Mean=4.02, SD=1.11),
within as key elements of business strategy, maintaining career The organization does not value my contribution (Mean=4.50,
paths, coaching, clear competencies, mentoring and SD=0.72), the salary is not directly proportional to the hard
demanding quantifiable results which in turn results into work I put (Mean=4.10, SD=0.99), rewards are not applied to
employee motivation and retention. the organizational strategic goals and objectives (Mean=4.4,
SD=1.21), reward systems are not participative and transparent
4.3. Employee Retention (Mean=4.4, SD=0.79), proper supervision is not maintained by
In order to establish the perceived influence of reward system the line managers to ascertain my inputs (Mean=4.6,
on employee retention, it is important to find out the SD=1.03), it is not difficult for me to leave the organization
employees’ intention to quit. This section analyses the right now (Mean=4.15, SD=1.07).

Table 4: Means and Standard Deviations for the Indicators of Intention to Quit
The reason why I intend to leave this organization is because; N Mean SD

I am not willing to put in a great deal of effort 105 4.43 0.89

I am not proud of this organization 105 4.22 1.01
I have many options and I am considering leaving this organization. 105 4.10 1.10
I don’t feel very happy to spend the rest of my career with this organization. 105 4.02 1.11
The organization does not value my contribution 105 4.50 0.72
The salary is not directly proportional to the hard work I put 105 4.10 0.99
Rewards are not applied to the organizational strategic goals and objectives 105 4.40 1.21
Reward systems are not participative and transparent 105 4.40 0.79

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International Journal of Commerce and Management Research

Proper supervision is not maintained by the line managers to ascertain my inputs 105 4.60 1.03
It is not hard for me to leave the organization right now 105 4.15 1.07

The analysis above indicates that employees agreed that they from their ratings on of intrinsic reward items. There was also
are not likely to stay in the organization. According to Denton a strong and positive correlation between employee retention
(2000) [8], employees who are happy and satisfied with their and intrinsic rewards, which was statistically significant (r =
jobs are more dedicated towards their work and always put .689, p-value<0.01)
their effort to improve their organizational customer’s On the extrinsic rewards the results indicated that most
satisfaction. Managing and retaining promising employees is respondents do not enjoy the extrinsic rewards offered by the
an important fundamental mean of achieving competitive organization through the ratings with the highest mean being
advantage among organizations (Walker 2001) [22]. 2.70. The correlation results indicated that there was a strong
It is important to note that employees today, realize that they and positive correlation between the Employees’ retention and
have to take the initiative in job resiliency, developing skills extrinsic rewards which was statistically significant, (r = .684,
and flexibility needed to respond to shifting employer p-value<0.01), an indication that extrinsic rewards has positive
requirements (Beck, 2001) [2]. influence on employee retention. These results concur with
findings of a study in Australia by Cowin (2002) [7] which
4.4. Correlation Analysis indicated that nurses were dissatisfied with their payment as
The study sought to establish whether there were significant their additional nursing qualifications were not considered.
associations between reward systems and employee retention. All responses to the items of career development were rated
In this study, Pearson correlation was used to explore low with the highest mean scored being 2.49. This is an
relationships between the variables, specifically to assess both indication that the organization under study never considered
the direction (positive or negative) and strength of the career development as strategy to retain workers. The
relationship between the variables. The results of the relationship between the Employees’ retention and career
correlation are shown it table 4.5 development was also positive, moderate and statistically
significant (r = .444, p-value<0.01). This indicates that career
Table 5: Pearson Product-Moment Correlation between Employee development positively influences the retention of faith based
Retention (dependent variable) and Reward Systems health organization employees in Kenya.
Scale 1 2 3 4
1. Employee Retention 1 .689** .684** .444** 5.3. Conclusion
2. Intrinsic rewards 1 .689** .574** Based on the findings, the factors identified as, intrinsic
3. Extrinsic rewards 1 .675** rewards, extrinsic rewards and career development influence
4. Career development 1 employee retention in faith based health organizations. It is
**. Correlation is significant at the 0.01 level (2-tailed). important for management to develop a reward system that
addresses employee job satisfaction and retention factors. This
Results of correlation analysis between employees retention in means that management should be able to create a total reward
faith based health organizations and Reward Systems (intrinsic structure that includes more than just compensation. The study
rewards, extrinsic rewards, and career development) are shown concluded that majority of the respondents indicated that both
in table 4.10 above. There was a strong and positive correlation intrinsic, extrinsic as well as career development are important
between employee retention (dependent variable) and intrinsic components of employee retention. It is also important to
rewards, which was statistically significant (r = .689, p- monitor the reward systems in place and improving the
value<0.01) as shown above. This is an indication that better organizational culture in order to retain high potential
intrinsic rewards, influence the retention of these employees. employees.
Similarly, there was a strong and positive correlation between
the Employees’ retention (dependent variable) and extrinsic 5.4. Recommendations
rewards which was statistically significant, (r = .684, p- From the findings the study recommends that the reward
value<0.01), an indication that extrinsic rewards has positive system exercised in the faith based health organizations in
influence on employee retention. The relationship between the Kenya should be easily understood by the workers so that they
Employees’ retention (dependent variable) and career can easily calculate personal cost benefits for various levels of
development was also positive, moderate and statistically effort put by them. The human resource department should
significant(r = .444, p-value<0.01). This indicates that career consider developing clear policies and rules concerning how
development positively influence the retention of faith based employees will be paid and the rules for attaining the standards
health organization employees in Kenya. and rewards should be clear to both employees. Reward
packages must be valuable to the employees and should be
5. Summary, conclusions and recommendations based on realistic and reliable standards.
5.1. Introduction Future research may emphasize on other alternative measures
This chapter provides a summary of the study, conclusions and to increase employee retention such as open-ended interviews
recommendations drawn from the study. It concludes with the with employees who have resigned from the organization. This
areas recommended for further studies. sactual factors that cause turnover in their organizations. Thus,
5.2. Summary of Findings they can formulate effective retention strategies based on the
The results revealed that intrinsic rewards increased the actual factors of employee turnover in the organization.
chances of employee retention and indicated that the
organization’s intrinsic rewards are not encouraging. This is
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International Journal of Commerce and Management Research

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