1.1 Background of the Study
Employee welfare is defined as all efforts geared to making life worth living for employees with their origin either in some statute formed by the state or in some local custom or in collective agreement, employers own initiative as per S. Shiny Nair (human resource articles on www.articlebase.com). Derek & Laura H. (1998) state that there are two primary welfare areas which are of benefit to individuals i.e. physical (health, safety, paid holidays, reduced working hours etc.), Emotional to include improved mental health through provision of counselling services, improved communication and general human relations at the workplace. Fox (1966) id of the view that welfare encompasses not only the earlier concern with workers physical working conditions (sanitation, canteens, hours of work, rest pauses, etc) but also the human relations aspect to achieve job satisfaction.
The 2007 Labour Laws of Kenya and the Employment Act Part V provides for employees to be provided with annual, maternity, sick and paternity leaves by the employer; housing at employer`s expense or pay house allowance for employee to seek reasonable accommodation; sufficient supply of water; hours of work; and medical attention for all employees working in Kenyan organizations.
The modern concept of employee welfare entails all activities done by employers geared towards providing staff with certain facilities in addition to the wages and salaries that they receive (Torjman, 2013).
These amenities are essential for the wellness of the organization due to their ability to affect the overall productivity of the employees. Measures to improve employee welfare have great capacity to increase organizational productivity, motivate employees, promote healthy organizational relations, maintain peace in organizational and reduce labour turnover.
The basic features of labour welfare benefits includes various facilities, services and amenities provided to improve intellectual, cultural and material conditions of living. The basic features of labour welfare benefits includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status. Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency to bring about the development of the whole personality of the workers to make a better workforce.
The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labour force for the organization. The purpose of providing these facilities is to make their work-life better in addition to raising the employees` standards of living. Welfare measures are importance for providing better physical and mental health leading to a healthy work environment.
Facilities such as housing schemes, medical benefits, educational and recreational facilities for workers and their families helps in raising their standards of living. This makes the workers’ pay more attention to work leading to increased productivity and so employers get a stable participative workforce, which helps maintain industrial peace; and finally helps reduce the social evils prevalent among the employees like substance abuse through welfare policies (industrialrelations.naukribhub.com/employee-welfare).
Employee welfare programs motivate employees to deliver high-quality work. Poor welfare is detrimental to the delivery of the needed quality and may negatively affect overall performance. According to Finger (2013) employee welfare is about certain additional facilities such as housing, transformation, medical, recreational, cultural, libraries, gyms and health clubs that an organization provides to its staff. The organization offers welfare programs to improve job satisfaction, increase employee engagement and commitment and, in turn, increase productivity. This also may help in higher employee retention rate. This improves loyalty to the organization.
According to McGuire and McDonnel (2008) employee welfare makes employees self-confident and stimulates thought processes that motivate them to higher productivity. Employees get to work in a stimulating environment with challenging task and responsibilities. Torjman (2013) argues that welfare facilities such are those that provide recreation improve workers’ happiness making them more productive. Happy employees will have a positive attitude towards work for the benefit of the benefit of the organization. Employee welfare facilitates worker motivation and increases the effectiveness and creativity in addressing organizational challenges. This improves performance of responsibilities and, eventually the profitability of the organization (Mathew 2011).
Staff welfare demonstrates care for employees at the work place (Cowling and Mailer, 2012). The premise for welfare is that quality of welfare directly and naturally influences worker performance because they always compare themselves to their counterparts in other organizations. Organizations should, therefore, remember that for employee welfare can enable them to achieve their objectives.
An employer who is genuinely interested in the welfare of an employee creates a positive work environment for such an employee (Friedlander, 2006). An employee is keenly interested in the policies and procedures that relate to welfare issues such as bullying, harassment, and discrimination. The employee is also interested in the organization’s commitment to equal opportunity for all regardless of gender, race, disability, age, etc.
Performance is an attribute of the employee that may result from effective welfare policies. According to Dessler (2008) is about achievement of the objectives of the organization. Determination of the performance of the employees is a function of performance management in an organization. In an organization, performance management consolidates goal setting, performance appraisal, and development into a unit to ensure that employee’s performance is in line with the goals of the organization.
While employee performance is individual, it must be relevant to the organization. Highly performing individuals assist in ensuring the organization achieves its goals (Dessler, 2011). Rashid and Rashid (2011) posit that extensive studies have been conducted to assess the physical and mental well-being of the employee. Employee welfare is a concern for many researchers and important for organizational performance.
Zeinabadi (2010) stated that job satisfaction and organizational commitment are sources of organizational performance. In a study by Zeinabadi (2010) purpose was to provide empirical evidence showing the relationship between welfare and the job satisfaction levels of staff in private universities. The study aimed at determining whether welfare is a reliable predictor of employee performance. The study established that for the academic staff to perform, they needed diligence and commitment. The study established that the welfare of the staff had significant contribution to their performance.
In a local, Kenyan study, Wainaina (2011) sought to determine the relationship between wellness programs and employee job satisfaction at Capital Group Limited. In the study, it was concluded that welfare programs motivated employees and made them satisfied at work. In a study by Masinde (2011) the aim was to analyse how social welfare facilities affected employee motivation in Pan African Papermills and Mumias Sugar Company. In both companies, welfare facilities provided are strong motivation and helped retain employees while boosting their productivity. Kuria (2012) studied the effects of employee welfare programs on job satisfaction of employees within the flower industry in Kenya and established that employee welfare programs promote job satisfaction of employees in organizations within the flower industry in Kenya.
Private Universities currently suffer considerable human capital flight despite improving in profitability for the past five years (PWC, 2013). The survey report released on business daily noted increased competition for high-end clients, qualified, trained and experienced staff to implement strategies. However, a mismatch (PWC, 2013) in compensation and disparity in disposable income rewards, bonuses, and allowances for employees is unrepresentative with the rate of expansion and opening of campus reported.
1.2 Statement of the Problem
Welfare programs are essential to all employees. They improve the comfort and work life of employees by focusing on monitoring of working conditions, infrastructure for health insurance, accidental and unemployment benefits for workers and their families, education for children and post-retirement benefits (Munyoki, 2010). An organization that puts keen interest in the welfare of its employees reaps big by motivating them into higher performance.
Private universities in Kenya are experiencing increased flight of their staff. The productivity of the remaining staff is low (PWC, 2013). The welfare of the staff is not well taken care of. According to Ernst and Young (2014), lack of welfare benefits de-motivates and can lead to a high rate of employee turnover, low productivity and may affect the overall efficiency and performance of the organization.
Few known studies, if any, have examined how employee welfare programs affect employee performance with focus on non-academic staff in private universities. Masinde (2011) conducted a comparative analysis of the effects of social welfare facilities on employee motivation in Pan African Paper mills and Mumias Sugar Company. The study established that facilities provided are a strong motivational element that has helped retain employees in the job for a long time and boosting their productivity. (Kuria 2012) studied the effects of employee welfare programs on job satisfaction of employees within the flower industry in Kenya the researcher established the effects of employee welfare programs on job satisfaction of employees in organizations within the flower industry in Kenya. None of the studies addressed the relationship that exists between welfare programs and employee performance among non-teaching staff in private universities in Kenya. This study seeks to fill in this research gap.
1.3 Objective of the Study
1.3.1 General Objective
To establish the relationship between welfare programs and employee performance of non-teaching staff in private institutions of higher learning
1.3.2 Specific Objectives
i. To determine the influence of compensation on employee performance among non-teaching staff in private universities in Nairobi County
ii. To establish ways in which safety and health in the workplace influences employee performance among non-teaching staff in private universities in Nairobi County
iii. To determine the influence of pension and retirement schemes on employee performance among non-teaching staff in private universities in Nairobi County
iv. To determine the extent to which financial intervention measures influences employee performance among non-teaching staff in private universities in Nairobi County
v. To find out how career growth avenues enhance employee performance among non-teaching staff in private universities in Nairobi County
1.4 Research Hypothesis
H1: There is significant relationship between compensation and employee performance in private universities in Nairobi County.
H1: There is significant relationship between safety and health in the workplace and employee performance in private universities in Nairobi County.
H1: There is significant relationship between pension schemes and employee performance in private universities in Nairobi County.
H1: There is significant relationship between financial intervention measure and employee performance in private universities in Nairobi County.
H1: There is significant relationship between career growth avenues and employee performance in private universities in Nairobi County.
1.5 Significance of the Study
1.5.1 Private University Management
The study is first important to private universities management. They would be able to know the effects of employee welfare programs on employee satisfaction and to identify various forms of employee benefits applicable to individual employees in order to promote their performance. This would reduce the employee turnover and hence improve the organization’s image.
1.5.2 Policy Makers at Commission of University Education
The Commission of University Education (CUE) of Kenya that provides the supervisory and regulatory roles to University Education would be interested in the trend analysis especially on intrinsic and extrinsic motivational factors across the private universities and hence provide insights for improvements.
1.5.3 Human Resource Managers and Administrators
The study would be of great interest to the Human Resource Managers and Administrators. It would provide insights on staff welfare programs and how they contribute to the performance of the non-academic staff in Private Universities to ensure employees are always satisfied with their jobs. Job satisfaction is a common issue in developing countries and so is lifestyle. The content of this study would assist HR practitioners with the necessary information to champion lifestyle change in pursuit of individual overall life satisfaction.
This study will also be beneficial to students who will be interested in conducting further research in the area of staff welfare programs and their benefits because this study finding will be available at the universities for reference.
1.6 Scope of the study
This study investigated how welfare programs affect performance of non-teaching staff in private universities in Nairobi County. The study was conducted in five private universities in Nairobi County that have been in operation for more than ten years. A sample of 96 non-teaching staff was be selected from a population of 308. The study was undertaken between January to March 2017.
1.7 Limitation of the study
In conducting this study several limitations were encountered. First, the private universities under study were a bit adamant in allowing for data collection. Secondly, there was also restriction on the cadre of non-teaching staff that would be used in the study which in turn reduced the population.
1.8 Operational Definition of Terms
This is the unscheduled staff’s absence from work place (Eisenberg & Power, 2008).
This is the monetary and non-monetary payment given to an employee after either completing a task or after completing a given period of time at work. The payment may be made up of basic pay, house allowance, medical allowance and commuter allowance (Sullivan, 2010).
This is the level of contentment of an employee has with regard to his or her job (Cascio, 2009).
How fast or slowly employees leave their profession and are replaced by others (Allende, Colquhoun & Kelley, 2011)
This is any of a variety of programs put in place by an employer to ensure employees are comfortable at the place of work (Fiore, 2009).
This chapter reviews the literature on the topic to determine the influence of welfare programs on employee performance in Nairobi County. This chapter includes theoretical review of the literature, empirical reviews, conceptual framework and operational framework.
2.1 Theoretical Foundation of the Study
The study is guided by three theories. These are the functional theory of labour welfare, Social exchange theory, and Expectancy theory. The theories are discussed below.
2.1.1 Functional Theory of labor welfare
This is a theory that relates welfare and efficiency of a worker. According to the theory, an employee whole welfare needs are satisfied by the available facilities and benefits will be more efficient and more productive. The theory uses welfare as the predictor of a worker’s efficiency and productivity (Mishra and Bhagat, 2010). The theory does not suggest causality but holds that there is a strong positive correlation between labor welfare facilities and their efficiency. When an employer promotes the welfare of workers, workers pay back through higher productivity.
Welfare means treating fare and doing well. Welfare is very comprehensive in nature and refers to the physical, mental, cultural, moral and emotional well-being of an individual (Aswathappa, 2003). It is also well defined by the Hopkins (1955) as “Welfare is fundamentally an attitude of mind on the part of management, influencing the method in which management activities are undertaken. Employers concerned with introducing or extending welfare programmes now or in the future must be concerned, not only with the past and current experience, but with developing trends”. The theory of labour welfare is influenced by the concepts of democracy and welfare state. Democracy is not only about forming a government; it is more of way of life based on certain values with fundamental equal rights and benefits for all. The function of welfare services in practice brings different reflections of prevailing cultural and social conditions.
As defined by the Encyclopedia of Social Sciences Vol. XV (1935) labor welfare is basically “voluntary efforts of the employers, to establish within the existing industrial system, working and sometimes living and cultural conditions for the employees, beyond what is required by law, the customs of the industry and the conditions of the market”
Concept of Labour welfare referred to as improvement of working and living condition of workers and well-being undertaken by employers, trade unions, and government and non-governmental agencies. Royal Commission on Labour in year 1931 defined labour welfare as “It must be elastic, bearing a somewhat different interpretation from one country to another, according to the different social customs, the degree for industrialization and educational level of the workers”.
Employers can increase the efficiency of its employees if they introduce welfare programs that take good care of the workforce. However, for there to be a beneficial relationship between the employer and the employee regarding welfare, the needs of the employee and the goals of the employer must be in harmony.
The organization needs to implement labor welfare services inside as well as outside the organization. The implementation must spread the policy of welfare across the width and the hierarchy of the organization for it to be effective. Otherwise spreading it with discrimination is counter-productive (Mishra and Bhagat, 2010).
This theory is adopted to guide the study because it suggests the expected relationship between welfare and the performance of the labour force. The suggestion is that welfare has a positive and strong correlation with performance of employees. The theory stresses the role the obligation/need of the employer in managing the welfare of employees.
2.1.2 Social Exchange Theory
The social exchange theory explains the behavior of employees with regard to the treatment they get from the employer. It is the behavior of individuals in different social set ups such as work places. It shows the drive to entre into relationships among individuals and offers the benefits of driving forces in many relationships. According to this theory, individuals must always discover the benefits that come with relationships before indulging in them. According to Greenberg and Scott (1996), the social exchange theory focuses on reciprocity in employee-employer relations. The central aspect of this theory is the norm of reciprocity.
The theory suggests that a strong social exchange between the employer and the employee helps maintain a positive working relationship and elicits positive sentiments that enable improved employee productivity. The relationship that the employer and the employee choose to maintain is the one that determines costs and benefits. Human beings are self-centered and may not be interested in equality. As a result, relationships that are most beneficial for the least effort are most valued and are the ones that will last longer.
According to the Social Exchange theory, employees exhibit positive or negative behavior as a response to the treatment that is offered by their employers. Miller (2005), a critic of the social exchange theory argues that the expectancy theory defines human interactions in purely rational terms. It also reduces human interaction to a materialistic engagement. He further contends that the theory assumes openness. Openness in relationships was valued in the 1970s when freedom and openness were valued. However, there are times when openness is detrimental to an interaction.
The social exchange theory is important to this study since basing on its rational nature employees will maintain a working relationship with the employer depending on the benefits they get from the relationship. If the policies that the employer will respond to mechanisms the employer puts in place according to the value they attach to the policies. The result is that welfare will vary as the material benefits employees get from the employer in terms of welfare.
2.1.3 Expectancy Theory
Expectancy theory is based on the work of Victor Vroom in 1964. Expectancy theory is premised on valence-instrumentality-expectancy relationship. Valence is the strength of an employee`s preference for a particular reward. Thus, salary increases, promotion, peer acceptance, recognition by supervisors or any other reward might have more or less value to individual employees. Unlike expectancy and instrumentality, valences can be either positive or negative.
If an employee has a strong preference for attaining a reward, valence is positive. At the extreme, valence is negative. If an employee is indifferent to a reward, valence is 0. The total range is from -1 to +1. Theoretically, a reward has a valence because it is related to an employee1s needs. Valence, then, provides a link to the need theories of motivation (Alderfer, Herzberg, Maslow and McClelland). Instrumentality is the faith that a thing will lead to a valued result.
It is an individual`s estimate of the probability that a given level of achieved task performance will lead to various work outcomes. As with expectancy, instrumentality ranges from 0 – 1. For example, if an employee sees that a good performance rating will always result in a salary increase, the instrumentality has a value of 1. If there is no perceived relationship between a good performance rating and a salary increase, then the instrumentality is 0.
Expectancy is the belief that a given effort will lead to the valued outcome. It is a persons estimate of the probability that job-related effort will result in a given level of performance. Expectancy is based on probabilities and ranges from 0 – 1. If an employee sees no chance that effort will lead to the desired performance level, the expectancy is 0. On the other hand, if the employee is completely certain that the task will be completed, the expectancy has a value of 1.
Generally, employee estimates of expectancy lie somewhere between these two extremes. An individual’s behavior is determined by preferences given a variety of expected outcomes and the strength of the faith that the outcome will be realized. The theory suggests that employers should reward employees according to performance and that the rewards should be valued by the employees (Armstrong, 2006) as illustrated by the figure below. Such a policy of reward motivates employees to continue performing exceptionally.
Performance refers to the achievement of set objectives according to predetermined standards of accuracy, completeness, cost, and speed. When measuring employee performance, one focuses on four areas. These areas are quality, quantity, dependability, and knowledgeability (Mazin, 2010).
The expectancy theory of Victor Vroom belongs to the category of process theories since, as Klitzner and Anderson (1977) state, motivation is seen as a multiplication of three factors. This theory integrates many of the elements of the needs, equity and reinforcement theories (Gordon et al., 1990, p. 450). ‘Expectancy theory holds that people are motivated to behave in ways that produce desired combinations of expected outcomes’ (Kreitner and Kinicki, 1998, p. 227).
Vroom’s Expectancy Theory tries to explain the motivated behavior as goal oriented. He argues that people tend to act in a hedonistic way (Vroom, 1964) preferring the actions that will bring the highest subjective utility. Essentially, the expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual (Robbins, 1993).
To achieve objectives within set standards of efficiency and effectiveness the employee must expect some valuable benefit to the organization and to himself/herself. While efficiency and effectiveness are components of performance, competitiveness, productivity and training enable improvement in performance (Tessema and Soeters, 2006).
Expectancy theory has some important implications for motivating employees. The model provides guidelines for enhancing employee motivation by altering the individual`s effort-to-performance expectancy, performance-to-reward expectancy and reward valences. Mitchell (2001), in the criticism of the expectancy theory argues that theory is not easily testable since it is too comprehensive making it hard to test all its aspects.
Victor Vroom`s expectancy theory differs from the content theories of Maslow, Alderfer, Herzberg, and McClelland in that Vrooms’ expectancy theory does not provide specific suggestions on what motivates organization members. Instead, Vroom`s theory provides a process of cognitive variables that reflects individuals differences in work motivation. In t his model, employees do not act simply because of strong internal drives, unmet needs or the application of rewards. Instead, they are rational people whose beliefs, perceptions and probability estimates influence their behaviour.
From a management standpoint, the expectancy theory has some important implications for motivating employees. It identifies several important things that can be done to motivate employees by altering the person`s effort-to-performance expectancy, performance-to-reward expectancy and reward valences.
2.2 Empirical Review
Many researchers debate that there exists slight relationship between employee performance and employee welfare benefits and services. Onitiri (1983) opines that poor living standards, poor health, lack of education, poor housing facilities, poor transportation to and from work, poor working conditions etc. reduce worker’s productivity which in turn reduces the capacity of the society to improve working conditions. Welfare measures relate to certain additional activities which are provided by an organization like housing facilities, transport facilities, medical facilities, leisure and cultural facilities, reading room, fitness center and health club in hope of winning the satisfaction index of an employee.
Millea (2002) reports empirical evidence about the bi-directional relationship between employee`s benefits and productivity, in particular considering the nature of the benefits setting process in different countries. The empirical evidence of a more in-depth study for Germany (Millea, 2006) can be interpreted in the light of efficiency wages ie explaining productivity as resulting from particular wage levels for given characteristics of the labour market eg the total level of unemployment. Leaders should try to increase the belief that good performance will result in valued rewards. Ways of doing so include: measure job performance accurately; describe clearly the rewards that will result from successful performance; describe how the employee`s rewards were based on past performance; provide examples of other employees whose good performance has resulted in higher rewards. In essence, leaders should link directly the specific performance they desire to the rewards desired by employees. It is important for employees to see clearly the reward process at work. Concrete acts must accompany statements of intent.
Mathis and Jackson (2006) express that performance is basically what is done or not by the employee. The elements of employee performance as usual cover the quality of result, accuracy of time, attendance, and cooperate ability. Levinson in Marwansyah (2010) describes performance as someone merit in doing his responsibility/job. Performance reflects how well employee fulfills the conditions of work.
Gibson (2000)writes that there are three factors that have effects to performance, those are Individual factor: ability, skill, family background, job experience, social level and demography; Psychological factor: perception, role, attitude, personality, motivation, and job satisfaction; Organizational factor: organization chart, work design, leadership, rewards system. Vroom (1964) shows that performance is the level of how far the success of someone in finishing his work, usually called as “level of performance”. Someone who has high level of performance is called a productive person or high performance person.
On the contrary, someone who cannot reach standard is called an unproductive person or low performance person. Gomes (2003) tells that there are some indicators that become measurement in the performance appraisal of employee performance, those are quantity of work, quality of work, job knowledge, creativeness, cooperation, dependability, initiative, and personal qualities
A suggestion by (McGuire and McDonnel 2008) states that welfare facilities help in improving an employee’s intellectual level as well as their self-confidence. Torjman (2004) established that welfare amenities and recreation translates to healthy individuals in addition to encasing among their cheerfulness and emotional quotient. Kirsch (2009) opined that welfare facilities should be as flexible as possible and continuous improvement need to be done. Pinder and Mathew (2011) advocated that employee welfare measures serve as oxygen for motivation of the workers and increasing the effectiveness of the workforce.
Traditionally employee welfare services were destined to decrease employee absence and time off due to illness. However, currently they have taken a wider scope and they include almost all aspects that relate to an employee’s wellness and personal growth in the work place (Manzini and Gwandure, 2011). Logically, the provision of welfare schemes is to create an efficient, healthy, loyal and satisfied labor force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living.
Priti (2009) argues that the role of welfare activities is to promote economic development by increasing efficiency and productivity with the underlying principle being making workers give their loyal services ungrudgingly in genuine spirit of co-operation and the general well-being of the employee.
Despite this, Mwiti (2007) points out that naturally welfare services may not directly relate to an employee’s job but the presence or absence of the services is notable through employee performance, attitude, high or low labour turnover. The workforce provides essential service to the public in Kenya and thus their labour welfare activities need to address the same.
Manzini and Gwandure (2011)argues that welfare services can be used to secure the labour force by providing proper human conditions of work and living through minimizing the hazardous effect on the life of the workers and their family members. Welfare services may be provided by supplementing the income of the workers by providing services such as housing, medical assistance, canteens, and recreation facilities (Mishra and Manju (2007). Further, welfare facilities help in raising employees’ standards of living.
The success of employee welfare activities depend on the approach which has been taken to account in providing employee welfare and the policy should be guided by idealistic morale and human value. Such services include the provision of medical facilities, sanitary and the accommodation of workers employed, amenities and industrial social security measures, training and education facilities and counseling services (Harika, 2010).
Morwabe (2009) argues that work environment should comprise of issues such as the working hours, employment policy, workers’ health and welfare, workplace design and the general conduct of workers at the workplace. Employee welfare activities in both developed and developing society have an impact not only on the workforce but also on the facets of human resources (Manju and Mishra, 2007).
These services may be provided by the government, trade unions and non-governmental agencies (Ankita, 2010). Armstrong and Baron (2000) base the ethos of performance on the assumption that if the performance levels of individuals can be raised somehow, better organizational performance will follow as a direct result. In his book, The Human Equation, Pfeffer (1998) describes how companies achieve profitability by putting people first. Numerous business practices have been put forth that suggest management practices can affect performance in positive ways.
These include training, performance management, and rewards and incentive systems (Deng, Menguc, and Benson, 2003). Productivity tends to be associated with production-oriented terms (profit and turnover) and performance is linked to efficiency or perception-oriented terms (e.g. supervisory ratings and goal accomplishments). Employees must be able to deliver good results and have a high productivity. Employee performance is based on individual factors: personality, skills, knowledge, experience, and abilities. The employee goes beyond the individual factors to include external factors such as reward and motivation, work environment, technology among others.
Mazin (2010) lists four different performance dimensions on which employees are measured: quality, quantity, dependability and job knowledge. Park, Mitsuhashi, Fey, and Bjorkman (2003) stated that employee’s performance is measured against the performance standards set by the organization. Performance is the achievement of specified task measured against predetermined or identified standards of accuracy, completeness, cost, and speed. Desired performance can only be achieved efficiently and effectively, if employee gets a sense of mutual gain of organization as well as of himself, with the attainment of that defined target or goal.
Efficiency and effectiveness are ingredients of performance apart from competitiveness and productivity and training is a way of increasing individual’s performance (Tessema and Soeters, 2006). In every organization, there are some expectations from the employees with respect to their performance. Functioning and presentation of employees is also termed as employee performance. This means that effective administration and presentation of employees’ tasks which reflect the quality desired by the organization can also be termed as performance (Benedicta and Appiah, 2010). Tessema and Soeters (2006) categorized employee performance into task and contextual or citizenship performance behaviors.
Task performance includes behaviors which an employee performs to accomplish tasks given to him by his supervisor or behaviors associated with core technical activities of the organization. Whereas, contextual or citizenship performance includes behaviors which establish the organizational social and psychological context and help employees to perform their core technical or task activities (Huczynski and Buchanan, 2007).
Wainaina (2011) studied the relationship between wellness programs and employee job satisfaction at capital group limited, he established that the programs boosted employees’ satisfaction levels. Masinde (2011) studied Comparative analysis on the effects of social welfare facilities on employee motivation in Pan African Paper mills and Mumias Sugar Company, the study established that facilities provided are a strong motivational element that has helped retain employees in the job for a long time and boosting their productivity. (Kuria 2012) studied the effects of employee welfare programs on job satisfaction of employees within the flower industry in Kenya and established the effects of employee welfare programs on job satisfaction of employees in organizations within the flower industry in Kenya.
2.3 Conceptual framework
A conceptual framework is a summarized graphic presentation of the relationships between concepts or variables in a study (Onen and Oso, 2009). As shown in Figure 2.1 below, the study has five independent variables and one dependent variable, the dependent variable is, Compensation programs, Career growth, Pension and Retirement programs, Financial interventions and Safety and Health programs. The dependent variable is Employee Performance.
Independent variables Dependent Variable
Fig. 2.1 Conceptual Framework
2.3.1: Compensation programs
Compensation refers to the wage and non-wage benefits granted to the employee. These non-wages are usually provided to the employee as an additional benefit over and above the basic requirement (Sullivan, 2010). Okumbe (2010) states that transport benefits ease movement among employees leading to job satisfaction and better job performance. The benefits include; paid annual leave, childcare programs, sick leaves, relocation benefits, commuter allowances, training scholarships and other financial benefits that are not work related.
Dessler (2003) says that compensation means all remunerations received by workers or arise from their job. Mondy (2008) interprets compensation as the total of all accepted rewards received by employee as a change of services that have been given to organization.
According to Schuller, Jackson, and Werner (2011), total compensation is appreciation of money and the other thing which are given to a worker. Schuller et al., (2011) use total compensation term interpreted as activity where organization assess worker contribution to be commuted with monetary reward and non-monetary pursuant based on organization’s ability and legal rule.
According to Schuller et al., (2011), in principle compensation can be divided into intrinsic compensation and extrinsic compensation. Intrinsic compensation is compensation accepted by employees for themselves. Extrinsic compensation covers direct compensation, indirect compensation, and non-monetary compensation. Direct compensation includes basic salary, allowance, and incentive. Indirect compensations are social security, insurance, and allowance for retirement, leave, and vacation. While non-monetary compensation covers security guarantee, good job environment, self-development, career flexibility, acknowledgement, and praise.
A well-designed compensation framework needs to be developed and grown within the unique environment of the organization (Wilson, 2003). This measures changes in behaviour that contribute to clearly defined goals. The challenges in determining such programs lie in what mix of rewards will contribute to behaviour necessary to spur performance.
Increasing payroll costs in the global market have led managers to search for ways to increase productivity by linking compensation to employees` performance (Brown, Armstrong, 2000). A number of studies indicate that if pay is pegged to performance, the employee produce a higher quality and quantity of work (Lawler, 2000). Rewards bridge the gap between organizational objectives and individual expectations as well as aspirations. To be effective, an organizations total compensation system should provide four things.
These should be sufficient enough to fulfil basic needs, equity with external references, equity with internal references as well as treatment of each member of the organization according to their individual needs (Milkovich and Newman, 2005). Ahmed & Ali (2008) carried out a study on “The impact of reward and recognition programs on employee motivation and satisfaction” and established that the more the reward and recognition programs, the more the motivation and satisfaction of employees.
2.3.2: Safety and Health Programs
Occupational Health and Act (2007), requires all organizations to adhere to reasonable practice of safety, health, and welfare of their employees. Organizations are equally required to ensure a proactive safety management system is in place within their organizations. Safety and welfare training is also recommended in managing organizational safety.
When employees are sufficiently informed and empowered, an organization claim to health and welfare measures. Occupational Health and Act (2007), is structured to help organization institutionalize safety protocols not only in the legal context but in a manner that secures and guarantees care and protection as a welfare to employees. According to Allender, Colquhoun, and Kelley (2011), a healthy workplace improves job satisfaction. Health programs include safety and health management, wellness programs, disability insurance and medical insurance. Badakale (2012) also conducted a study that sought to determine the effects of occupational health and safety policies on employee performance in Larfage (WAPCO) PLC, Ewekoro, Ogun State in Nigeria. His study found the amount of time wasted during accident and cost that is ignorantly spent on health care is higher than the cost spent on planning and providing a safe working environment and a good safety policy. The study concluded that occupational health and safety should be given a serious attention on the shop-floor bearing it in mind that it is a right for the employees and required by law.
Musyoka (2014) studied the relationship between health and safety programmes and performance of manufacturing firms in Mombasa County, Kenya. The study found out that many of the firms had taken some health and safety measures and that they had shown positive effect on work performance. Among the four factors that were being investigated, health and safety measures, social welfare programmes, accident prevention programmes and occupational health programmes.
The four factors had a positive and significant correlation with employee performance. Therefore, the implementation of health and safety programmes at the work place has a positive impact on employees’ performance. The study concluded that health and safety measures at work place have a positive and significant correlation to work performance therefore 24each and every company should practice or implement the health and safety programmes at their work place if they are to improve performance.
Jelimo (2013) did a study on the effects of occupational health and safety practices on employee productivity. The study found out that there are occupational health and safety practice that have positive relationship with productivity of employees and include; fire prevention and protection, lighting and ventilation, personal protective equipment’s and good housekeeping, while chairs/tables and facilities for sitting, first aid kit and medical facility and drinking water and sanitary facilities had negative relationship. The study concluded that when an organization fully implements occupational health and safety practices improves employees’ productivity.
It was also realized that absence of Occupational Health and Safety practices could easily result in absenteeism, high employee turnover, increased medical bill and insurance claim, injuries and frequent accidents. The study recommended continuous improvements of occupational health and safety practices as it greatly influences employee satisfaction, commitment, performance and productivity.
Workers just like any other resources
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