MIREGA, TITUS ADAMS ID: 623529 IBA 4950 SENIOR PROJECT FINAL REPORT LECTURER: DR. KAANE. S.

SUMMER, 2011

RESEARCH TOPIC: MOTIVATIONAL STRATEGIES ORGANIZATIONS CAN APPLY TO ENSURE STAFF RETENTION: A CASE STUDY OF SILENSEC KENYA.

1.0.INTRODUCTION Motivation, as defined by (Luthans, 2005), is a process that starts with a physiological or psychological deficiency or need that activates a behavior or a drive that is aimed at a goal or incentive. 1.1.Background Employee motivation has over the years remained a major concern to organizations, as it plays a significant part in employee productivity and retention. An understanding of human resource management through organizational behavior is therefore important in helping produce a highly motivated workforce. This is a case study of Silensec Kenya, an Information Security Service and Training Company located in Westlands, Nairobi. The Company was established in Kenya in 2009, in partnership with AITEC Africa, and currently has twenty-three employees, all working on permanent basis. Despite their lucrative salaries and wages, Silensec Kenya has experienced high employee turnover since it was founded. This research study was in response to Silensec Kenyas concern about this issue of staff retention, and intended to determine what factors have caused their high staff turnover rate and identify incentives and strategies they can adopt to ensure employee motivation and staff retention. According to (Morris, E. 2010), employees who leave a company are generally dissatisfied with some aspect of the company, including corporate culture, training, supervisor relations, work environment, pay and benefits, communications, feedback, leadership, supervision, corporate vision, career growth, or for any other reason.

1.2.Problem Statement Organizations face lots of problems in employee retention in these current times. Albeit hiring knowledgeable people for the job is essential for an employer, retention is considered even more important. A talented person does not usually run short of opportunities. If he or she is not satisfied by the job he or she is doing, he or she may switch over to a more suitable job. The former organization therefore ends up losing its best talents. Increasing globalization has made staff retention even more difficult, as employees are ready to shift jobs and relocate to any part of the world with better offers. Organizations should therefore figure out what they are doing wrong to let their best staff leave.
One of the best ways to assess the quality of an organization is to look at those who are leaving itIf a company can attract but not retain solid performers; its likely the company will be spending far too much on the wrong things. No company with high employee turnover is focused on doing the right things. (McKee, J., 2007)

Although high staff turnover rate has been the most alarming result of unmotivated employees at Silensec Kenya, there have been other problems such as complacency and declining morale which pose a threat to productivity. 1.3.The Purpose Of The Study The purpose of my research project was to identify what motivational strategies Silensec Kenya needed to apply to ensure staff retention and eventual increase in productivity. 1.3.1. Research Objectives 1.3.1.2. Specific Objectives My research objectives were: to identify the reward systems that can be used to ensure employee motivation in an organization to identify the monetary and non-monetary incentives that can be used to ensure motivation of employees and their impact in staff retention.
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1.4.Significance Of The Study To Silensec Kenya: Employee motivation is imperative in every organization and especially in the modern world, it is even becoming more important that managers pay attention to their employees motivational levels so as to prevent employee turnover. Silensec Kenya, being a company dealing with Information Technology, needed to find out and apply all staff motivational strategies to ensure that they keep their best staff as technological experts are ever increasingly on demand and it can become difficult trying to keep them. This research therefore provides Silensec with an insight to new ways they can apply to ensure they increase their staff retention and productivity. To Silensec Employees: Top management, finally finding out the best ways to motivate their employees, enable the employees to enjoy their work, sharing in the organizations vision, mission and common goals so as to increase productivity. They also gain a positive perspective, feeling part of the organization and build on their self-esteem and capabilities. To Academicians and Researchers: This research project has shed more light to the field of management, concerning employee motivation in organizations with a focus on a case study of a company in Kenya. Employee motivation in the business world has become a problem for many years as many researchers have tried to understand it, but most research has been done in the Western countries. In conducting a research on the same, but focusing on an organization in Kenya, I know that my work will be of benefit for future researchers and academicians. To the Researcher: As a student of IBA, concentrating in Management, this research provided me with an opportunity to gain experience through first-hand analysis of human relations based on management and organizational behavior and how management can be used to enhance motivation of employees. 1.5.Scope And Limitations Of The Study This research focused specifically on employee motivation and how it can be applied to achieve staff retention. It was based on the case study of Silensec Kenya and all primary data sources and information were limited to those obtained through questionnaires administered to Silensec
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Kenya employees, while secondary data was obtained from libraries, journals and research work done earlier by other academicians on the same topic. I limited my research only to Silensec Kenya because covering a wider range of scope could have been tedious and time consuming, and given the time frame it would have been difficult to complete the research in time. Employee motivational strategies and incentives are more often than not, similar in organizations of the same business sector, and therefore I believe that the findings I have obtained from Silensec Kenya reflect the nature of motivation in other Information Technology Businesses as well. 1.6.Definition Of Terms Extrinsic Rewards: are payoffs granted to the individual by other people, for example money, employee benefits, promotions, recognition, status symbols, and praise. (Kreitner, 2007). Intrinsic Rewards: are self-granted and internally experienced pay-offs. Among them being, a sense of accomplishment, self-esteem, and self-actualization. (Kreitner, 2007). Organizational Behavior: The understanding, prediction, and management of human behavior in organizations. (Luthans, 2005) Human Resource Management: Involves the acquisition, retention and development of human resources necessary for organizational success. (Kreitner, 2007) Job Satisfaction: (Luthans, 2005), citing Locke, defines Job Satisfaction as a pleasurable or positive emotional state resulting from the appraisal of ones job experience. 1.7.Chapter Summary This chapter introduces the research project topic, providing a brief background and the main purpose that drove the researcher to perform a research on the topic. It also outlines the research objectives, significance of the study, its scope and limitations and a list of definition of terms used in the research report.

2.0.LITERATURE REVIEW 2.1. Chapter Overview

This chapter is going to review various relevant literatures on motivation, concentrating on the different factors that have an impact on motivation. 2.2.Human Relations Movement Motivation practice and theory are difficult subjects touching on several disciplines. In spite of enormous research, basic as well as applied, the subject of motivation is not clearly understood and more often than not poorly practiced. To understand motivation one must therefore understand the human nature itself. Various theorists over the years have attempted to understand the human nature through different theories. According to (Kreitner, 2007), Abraham Maslow, in 1943 proposed that people are motivated by a predictable five-step hierarchy of needs: Physical needs-at the bottom of the hierarchy; Safety needs-next on the hierarchy; then Love needs; Esteem needs; and finally, selfactualization at the top of the hierarchy. Maslows theory teaches managers that a fulfilled need does not motivate an individual. Effective managers anticipate each employees personal need profile and provide opportunities to fulfill emerging needs. Because challenging and worthwhile jobs and meaningful recognition tend to enhance self-esteem, the esteem level presents managers with the greatest opportunity to motivate better performance. Another theorist, Frederick Herzberg, during the 1950s came up with a two-factor theory consisting of satisfiers and dissatisfiers. By insisting that satisfaction is not the opposite of dissatisfaction, Herzberg encouraged managers to think carefully about what actually motivates employees. According to him, the opposite of job satisfaction is not job dissatisfaction, but rather, no job satisfaction; and similarly, the opposite of job dissatisfaction is not job satisfaction, but no dissatisfaction, rather, the satisfaction-dissatisfaction continuum contains a zero midpoint at which both satisfaction and dissatisfaction are absent. An employee stuck on this midpoint, though not dissatisfied by pay and working conditions, is not particularly motivated to work hard because the job itself lacks challenge. To satisfy and motivate employees, an additional element
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is required: meaningful, interesting, and challenging work. Herzberg believed that money is a weak motivational tool because, at best, it can only eliminate dissatisfaction. (Kreitner, 2007). Another motivation theory, the expectancy theory, based on Victor H. Vrooms 1964 classic Work and Motivation, state that effort- performance- reward expectations determine whether motivation will be high or low. Although these expectations are in the mind of the employee, they can be influenced by the managerial action and organizational experience. Training, combined with challenging but realistic objectives, gives people reason to believe that they can get the job done if they put forth the necessary effort. Listening skills also enable managers to discover each individuals perceived performance-reward probabilities, as employees tend to work harder when they believe they have a good chance of getting personally meaningful rewards. (Kreitner, 2007). (Kinicki, 2006), talks about equity theory, which focuses on employee perceptions as to how fairly they think they are being treated compared to others. Developed by J. Stacy Adams, the theory is based on the idea that employees are motivated to see fairness in the rewards they expect for the task performance. Another theory is the goal-setting theory, developed by Edwin Locke and Gary Latham, which suggests that employees can be motivated by goals that are specific and challenging, but achievable. (Kinicki, 2006). Other motivational theories have come up through research after these classical ones explained above and they all digress from the earlier notion of money being a key motivator, therefore implying that there are many non-monetary incentives that managers can use to motivate their employees.

2.3.Reward Systems (Asanga, 2002), citing Number of pay grades in the hierarchy and ratio of executive to lower employee pay,(Ibid:175), states that the challenge of human resource manager is to design a reward system that takes advantage of the extrinsic and intrinsic motivational effects of rewards, satisfy norms of equity and complies with the appropriate laws and regulations . The extrinsic and intrinsic reward systems include the full range of financial and non-financial returns, direct and indirect compensation, benefits and recognitions. Reward systems also need to exhibit vertical and horizontal equity. (Wambari, 2009), citing (Lawler, 2003) emphasized on the same, stating further that the types of rewards and recognition that people receive are a major contributing factor to their level of satisfaction, since the more highly rewarded and recognized people are, the more satisfied they tend to be with their job and with their life, implying that satisfied employees are less likely to quit, change jobs, join unions, or be absent. 2.4.Factors Determining a Reward System Management should be careful on the type of reward system they employ in their strife to motivate their employees for better performance, since not all employees fancy the same kinds of rewards. (Asanga, 2002,) citing (Kotter et al, 1979), argues that the type of rewards that an individual or group of people consider attractive are affected by many factors including; cultural background, level of education, career aspiration, off-the-job lifestyle and work experiences. Effective research systems take this into account and attempt to offer different individuals and groups different reward possibilities. Pay may be stressed in some cases while in others, promotion possibilities, job security, challenging assignments or fringe benefits may be emphasized. A second group of related factors that may affect the amount of reward employees will perceive as fair include the general state of the economy, peoples perception of their performance on the job and rewards of employees in similar positions in other organizations. For a reward system to fit a

set of subunit tasks it must motivate the type of behavior that is necessary and it must do so at a cost reasonable in light with the importance of the task. This argument can be put in concurrence with the Maslows Hierarchy of needs and its notion that a fulfilled need does not motivate an individual. An understanding of each individual employees needs and wants is therefore very important. (Wambari, 2009), citing (Romano, 2003), accedes with the same as well, arguing that the best way of knowing how to meet the employees needs is by asking them how they want to be recognized and what are the elements that they value. 2.5.Monetary Incentives These are mainly elements of remuneration which involve employee benefits including cash pay, pension schemes, and insurance cover or sick-pay. (Armstrong & Murlis, 2004). (Asanga, 2002), has also identified other forms of monetary packages, other than these, such as travel allowance, leave allowance, education grant, and rental subsidy. An organization may likewise introduce fringe benefits instead of increasing basic salaries and wages, such as company cars, private health, or interest-free loans from the business. These benefits are often valued higher than wage increases and can be a cheaper route for the business to take. However, (Armstrong & Murlis, 2004), argue that fringe benefits should be reserved for those employee benefits which are not fundamentally catering for personal security and personal needs. Management must therefore first know what the employee considers a priority.

2.6.Non-monetary incentives (Kreitner, 2007) provides a number of ways through which an organization can motivate its employees which include: Job Design, Rewards; extrinsic and intrinsic, employee participation, and quality-of-work-life programs. Job designs include: job enrichment, which consists of building into a job such motivating factors as responsibility, achievement, recognition, stimulating work, and advancement; job enlargement, which consist of increasing the number of tasks in a job to increase variety and motivation; - (Kinicki, 2006), and Job rotation, which involves periodically moving people from one specialized job to another to prevent stagnation. (Kreitner, 2007). Employee participation on the other hand, as defined by (Kreitner, 2007), involves empowering the employees to assume greater control of the workplace, while quality-of-work-life programs involve providing employees with flex times which allow employees to choose their own arrival and departure times within specified limits, which improves the employee-supervisor relations, reduces absenteeism, and also provides a selective positive impact on job performance. However, despite all these incentives, (Mbugua, E, 2002), argues from her research findings on employee motivation, that although management may put in place certain tools of motivation, more emphasis is still required in order for the tools to be effective. These tools are such as: a participative appraisal system; a conducive working environment; encouragement of teamwork; and encouragement of participation in social activities outside the workplace. 2.7.Chapter Summary This chapter reviewed the relevant literature regarding employee motivation based on the specific research objectives highlighted in chapter one earlier. It also gives, from the findings of other earlier researchers, practical insights on management and how they respond to employees needs regarding motivation.

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3. METHODOLOGY 3.1. Chapter Overview

This chapter is going to outline the main methods that were used in the research. This includes the research design used, the population that the research was conducted on, the data collection methods used, the research procedures and data analysis method that was used to conduct the research. 3.2. Research Design

I applied the descriptive research design to conduct my project research. According to (Key, 1997), descriptive research is used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation. The methods involved range from the survey which describes the status quo, the correlation study which investigates the relationship between variables, to developmental studies which seek to determine changes over time. My research obtained information concerning the current status of employee turnover rates at Silensec Kenya, with respect to the current working environmental conditions and factors that affect the employees motivation levels. 3.3. Population

Silensec Kenya has twenty-three employees currently employed, all on permanent basis. I chose Silensec Kenya as my research study case, primarily because it is a non-governmental organization with less bureaucracy that would have hindered my access to the information that I needed, and secondly because it has a manageable number of staff to obtain information on, given the limited amount of time duration for the research. 3.4. Sampling Design

I conducted the research by focusing on the whole population, since it is only twenty-three people. I therefore, did not select only a sample from the population.
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3.5.

Data Collection Methods

I collected data for my research through administration of questionnaires to all the employees at Silensec Kenya, which were both semi-structured and close-ended. This is because questionnaires are cheaper, and through them I managed to protect the anonymity that the employees desired in responding to the questions. 3.6. Research Procedure

Each questionnaire was accompanied by an introductory statement, stating the main purpose of the study and requesting respondents for their consent to participate in the case study and assuring them that their responses would be treated with the utmost confidentiality and anonymity. I pre-tested the questionnaires first on three respondents to see whether whatever I asked was clearly understood and interpreted, so as to increase my chances of getting appropriate responses. 3.7. Data Analysis Methods

My research on this case generated quantitative data, and descriptive statistics were used to analyze the data, the results being summarized and presented in tables, graphs and charts. 3.8. Chapter Summary

This chapter mainly covered the research methodology used to conduct the research, giving reasons for the methods used and justifying them. The chapter also gives a brief description of the procedure used to conduct the research, and the data collection methods.

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4. RESULTS AND FINDINGS 4.1. Chapter Overview:

This chapter presents the findings of the data collected using the questionnaire distributed to the employees of Silensec Kenya. The questionnaire was developed to: i. ii. iii. Assess the general profile and characteristics of the respondents Identify the reward systems that Silensec Kenya uses, and which ones it doesnt. Identify the strategies employed by Silensec Kenya in applying these reward choices iv. Assess the employees job satisfaction with regard to the motivational incentives used. A total of twenty-three questionnaires were distributed, with twenty-one questionnaires returned. The returned questionnaires were analyzed and the results presented in tables, graphs and charts. 4.2.General Demographic Profile and Characteristics of the Respondents This section has presented the organizations respondents data, including gender, ages, level of education, marital status, duration worked and current job levels in the company. 4.2.1. Gender and Age of the respondents From the questionnaires received, about two thirds of the respondents were male, with only a third being female. As shown in the figure 4.1 below, the percentage of male respondents was 61.9 % as compared to that of female respondents at 38.1 %.

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Figure 4.1: The Gender of the Respondents.

On to the age factor, the figure 4.2 below indicates that the modal age of the respondents was 26-30 years, which represented 52.4 % of the respondents. Another age bracket was 20-25 years, making up 19.05 % of the respondents. Another 19.05 % also came from the bracket of 31-35 years while the minority age was 36-40 years which comprised of 9.5 % of the total respondents.

20-25 Yrs 26-30 Yrs 31-35 Yrs 36-40 Yrs

Figure 4.2: Age distribution of the Respondents.

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4.2.2. Marital Status The majority of the respondents were still single, comprising of 76.2 % while the married respondents comprised of 23.8 % of the total population of the respondents. There were however no respondents indicated under the widowed, divorced or other categories as shown in figure 4.3 below.

Figure 4.3: Marital Status

4.2.3. Level of Education The level of education that the respondents have attained, as indicated on the questionnaires received indicated that the majority of them were degree holders, comprising of 61.9 %, while those who had attained masters degrees were 14.3 %. Only one person, which makes 4.8 % of the respondents had a PhD while the rest, comprising of 19 % of the respondents, were split into half, with 9.5 % having gone through polytechnics while the other 9.5 % having reached form four level. These are all illustrated in the figure 4.4 below.

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High School College/Polytechnic University Degree Masters Degree PhD

Figure 4.4: Level of Education 4.2.4. Duration Worked at Silensec Kenya Silensec Kenya, as mentioned earlier, has been in existence in Kenya for only three years, since 2009, therefore the duration worked by employees has been categorized on monthly basis for under one year duration, and annual basis for longer stay. Table 4.1 below shows the distribution of the employees working length at the company, drawn from the questionnaires received. Duration Worked 0 6 months 6 12 months 1 2 years 2 3 years Total Table 4.1: Duration worked at Silensec Kenya Frequency 2 5 10 4 21 Percentage 9.52% 23.81% 47.63% 19.04% 100

4.2.5. Job level distribution at Silensec Kenya The job levels of the respondents, as indicated in figure 4.5 below show that the senior level management comprise of 14.29 %, while the majority employees, fall under the middle-level staff, making up 66.67 % of the total, while the junior staff form only 19.04 % of the total.
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Senior Level Management Middle Level Staff Junior Staff

Figure 4.5: Duration worked at Silensec Kenya 4.3.Reward Systems and Strategies The respondents were asked about what reward systems the organization already use to motivate their employees. These were divided into two: financial rewards and non-financial rewards systems. 4.3.1. Financial Reward Systems For the financial reward systems category, options were provided, ranging from salaries/wages, fringe benefits, incentives, to annual bonuses, where the respondents were expected to check on the boxes alongside each choice, with the option of checking more than one box where applicable. An option to indicate a reward system not among the choices was also provided for. Table 4.2 below shows the frequency distribution mean, and modal depiction of the responses received from the questionnaires.

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Financial Reward System Salary/Wages Fringe Benefits(cars, pension, medical care) Incentives(Profit Sharing, Stock Ownership) Annual Bonuses Any Other Total Respondents Table 4.2: Financial Reward Systems

Frequency 21 18 3 15 0 21

Percentage 100 % 85.71 % 14.29 % 71.43 % 0% 100 %

4.3.2. Non-Financial Reward Systems The non-financial reward systems that the respondents indicated to be in use at the organization ranged from training, work autonomy, paid leave, recognition awards, to promotions. The distribution of the respondents concurrence with the particular non-financial reward systems are given in the table 4.3 below. Non-Financial Reward System Training Work Autonomy Paid Leave(sick-off, maternity leave) Recognition Awards(Employee of the year, titles) Promotions Any Other Total Respondents Table 4.3: Non-financial Reward Systems Frequency 16 13 21 3 2 0 21 Percentage 76.19 % 61.90 % 100 % 14.29 % 9.52 % 0% 100 %

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4.3.3. Factors Influencing the Type of Reward Systems Used Main factors influencing the type of reward systems used by the organization were the type of job employee performs, and the organizations remuneration policy, although only 23.81 % of the employees felt that it was the remuneration policy of the organization that influenced the type of reward system used, with the other 76.19 % feeling that it was the job they performed that determined this. The responses of the employees are shown in table 4.4 below. Factor Influencing Reward System Type of Job Performed Employees Qualifications and Experience Labor Supply/Demand in the Market Organizations Remuneration Policy Total Frequency 16 0 0 5 21 Percentage 76.19 % 0% 0% 23.81 % 100 %

Table 4.4: Factors Influencing the Type of Reward Systems Used 4.3.4. Equality of Reward Systems The respondents were also asked whether the company considers equality of reward systems for all employees, in which the response was an 80.96 % agreeing, 9.52 % disagreeing and the other 9.52 % saying they did not know. Their responses are indicated in figure 4.6 below.

Agree Disagree Do not Know

Figure 4.6: Equality of Reward Systems

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4.3.5.

What areas the reward systems equality is applied

The respondents who agreed that the organization considered equality in the reward systems, were further asked of which areas the equality was drawn from, with all of them saying that the equality was considered in terms of equal pay for equal job, and equal working hours. These statistics are shown in figure 4.7 below.

Figure 4.7: Areas Reward System Equality is Applied 4.3.6. Satisfaction with the Present Reward System and Incentives Scheme.

The table 4.5 below, shows the degree of satisfaction that the respondents had with the financial and non-financial reward systems and incentives scheme that the organization used. Distribution Degree of Satisfaction Extremely satisfied Satisfied Neutral Not Satisfied Extremely Dissatisfied Total Frequency 1 15 2 3 0 21 Percentage 4.76 % 71.43 % 9.52 % 14.29 % 0 100 %

Table 4.5: Satisfaction with Present Reward Systems and Incentives scheme
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4.4.Contention Areas and Opinions This area deals with the areas of the organization that the respondents feel that there are problems and give their opinions on improvement. 4.4.1. Areas of reward systems in the organization that need to be addressed to enhance employee satisfaction and performance improvement. The respondents were asked about the major areas of the reward system scheme of the organization that they felt needed improvement. The table 4.6 below shows the distribution in frequency of what the respondents thought that needed improvements. Frequency Informing employees how their pay is computed More open communication about the benefits and pay More variety in benefits and incentives Total 12 7 2 21 Percentage 57.15 % 33.33 % 9.52 % 100 %

Table 4.6 Areas of reward systems in the organization that need to be addressed 4.4.2. Areas employees feel that the current reward schemes do not address The respondents were also asked whether there were any areas in the organizations reward scheme that needed to be addressed and the respondents were as illustrated in table 4.7 below. Responses Frequency Valid Yes No Total Missing Total System 16 2 17 3 21 Distribution Percentage 76.19 % 9.52 % 80.95 % 14.29 % 100 %

Table 4.7: Are there areas that the current reward system scheme does not address?
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For this question however, 14.29 % of the respondents did not respond to it, with the ones concurring being 76.19 percent. The ones who felt the reward scheme covered all areas were 9.52 %. The second part of the question asked the respondents to elaborate on which areas the reward scheme needed to address. For this second part, of the 16 respondents that said yes for the first part, only 14 of them elaborated on the specific areas that the reward scheme did not cover. Their responses however, revolved around three major areas as follows: i. Pension contribution, partly paid by the company, needed to be included as part of the incentives. ii. iii. Recognition awards system needed to be improved upon and clearly outlined. Promotions were rare and opportunities for improvement within the organizations ranks were very minimal. 4.4.3. Ratings for The Working Environment The respondents were asked to give their overall rating of their organizational working environment. 9.52 % of the respondents thought that their working environment was excellent, 71.43 % thought it was good, while 19.05% thought it was just questions responses are shown in table 4.8 below. Rating Scale Excellent Good Just Okay Bad Terrible Total Frequency 2 15 4 0 0 21 Percentage 9.52 % 71.43 % 19.05 % 0% 0% 100% okay. The data for this

Table 4.8: Ratings for the Working Environment

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4.4.4. Consideration for changing elsewhere

current job, given better job offer

The respondents were finally asked whether they would consider changing their current jobs, if they were to be offered a better paying job elsewhere. A 90.48 percent said yes, they would, while a 9.52 percent said no, they wouldnt. The responses are detailed in the table 4.9 below. Response Yes No Total Frequency 19 2 21 Percentage 90.48 % 9.52 % 100 %

Table 4.9: Consideration for changing current job

4.5.Chapter Summary This chapter looked at the findings of the study performed by use of questionnaires administered to Silensec Kenya employees. All the official job categories responded to the questionnaire and therefore the findings represent a complete view of all employee categories across the organization. Details of the discussions of the findings, conclusions, and recommendations are outlined in chapter five of the research paper.

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5.0. 5.1.

DISCUSSIONS, CONCLUSION & RECOMMENDATIONS Chapter Overview

This chapter represents the discussion, conclusion, and recommendations of the study. The chapter is divided into three main sections: the discussion section, which is structured in accordance with the research questions; the second section is the major conclusion drawn from the research findings; while the final section represents the recommendations for improvement and for further research. 5.2. Discussions

This section offers discussions drown from an analysis of the responses received from the questionnaires that were issued to the employees at Silensec Kenya. 5.2.1. Factors Influencing the Type of Reward Systems Used When the respondents were asked about the factors that influenced the type of reward systems used at the organization, 76.19 % said the type of job the employee performs, while 23.81 said the organization uses its remuneration policy. The employees qualification and experience, and labor supply/demand in the market, drew no percentage. The labor supply, and demand in the market for employees is very high, driven from the fact that only 19.04 % of the employees have been with the organization since it was started in Kenya. This means that the other 80.96 % have since left. If the organization does not consider the demand for labor in the market, then its employees are most likely to be lured away by other organizations offering better pay packages. 5.2.2. Equality of Reward Systems The respondents, who agreed that the organization considered equality in the reward systems, further asked of which areas the equality was drawn from, all of them said that the equality was considered in terms of equal pay for equal job, and equal working hours. (Kinicki, 2006), talks about equity theory, developed by J. Stacy Adams, which focuses on employee perceptions as to how fairly they think they are being treated compared to others. Employees are motivated to see fairness in the rewards they expect for the task performance.
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Even though a high percentage, of 80.96 % stated that the organization considered equality, it was only considered in terms of equal pay for equal job, and equal working hours. The benefits and incentives, being at 0 % each, mean that the organization does not provide benefits and incentives on an equal deserved ration to all employees, meaning that the same level of achievement, regardless of the department, do not draw the same benefits and rewards. This is very dangerous as it may not only demotivate the employees not rewarded as they deserve to be, but also affect the team work spirit within the organization. 5.2.3. Reward Expectations at Silensec Kenya The expectancy theory, based on Victor H. Vrooms 1964 classic Work and Motivation, state that effort- performance- reward expectations determine whether motivation will be high or low, as employees tend to work harder when they believe they have a good chance of getting personally meaningful rewards (Kreitner, 2007). The respondents, when asked about the areas of the reward systems that needed to be addressed, 57.15 % of them stated that the employees should be informed of how their pay is computed, while 33.33 % said that there should be more open communication about the benefits and pay. This statistic shows that the employees, are not fully aware of the reward expectations, as although they are guaranteed of their monthly pay, they are not quite sure of the other non-monetary incentives that are supposed to drive them to put more effort in performance, as Victor H. Vroom suggests. This makes the employees motivation levels low. 5.2.4. Job Dissatisfaction at Silensec Kenya Herzberg believed that money is a weak motivational tool because, at best, it can only eliminate dissatisfaction (Kreitner, 2007). When the respondents were asked whether they would leave their current jobs for a new one with a better pay package, a 90.48 % of them, which is a really high ratio, said yes. This shows that there is high dissatisfaction in the overall job that they are currently employed to do. Furthermore, a 14.29 %, which is quite a significant ratio, also affirmed that they were not satisfied with the present reward system and incentives scheme provided at the organization.

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5.2.5. Relationship between motivation and Staff Retention The respondents, asked to elaborate on the areas that the rewards scheme at the organization did not cover, they stated that: i. Pension contribution, partly paid by the company, needed to be included as part of the incentives. ii. iii. Recognition awards system needed to be improved upon and clearly outlined. Promotions were rare and opportunities for improvement within the organizations ranks were very minimal. The first and the third point mentioned above, is stressed by Maslows Hierarchy of needs. Pension contribution, is at the security needs level of the Maslows hierarchy. The employees feel that their future is not secure as the pension scheme provided by the company is not quite assuring. The third point, talking about promotion, is at the esteem needs level of the Maslows hierarchy, as the employee strives to climb up the corporate ladder. If there is little opportunity for this to happen at the current organization, the employee will get frustrated and chances of leaving the organization increase, if the issue is not addressed. The second point, talks about recognition awards system needing to be improved upon. This is partly covered under Victor H. Vrooms Work and Motivation theory, as has already been discussed in 5.2.2. above. Furthermore, as Brown, D. (2011) argues, motivated work forces are critical to a companys bottom line. By recognizing the employees dedication, commitment, and results, you boost their morale, increase their productivity, enthusiasm, and create powerful motivators. Recognition rewards can help create the right employee-management team environment, and if the employees are not provided with such rewards, they may lose interest in whatever work they perform in the organization, often asking themselves the question, Whats the point? This usually is followed by the employee looking for greener pastures elsewhere.

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5.3.

Conclusion

This research study concludes that, the motivational rewards scheme used in Silensec Kenya is effective but not highly effective, as it only addresses the basic needs of the employees, which are easily available in many other organizations as well. The company lacks the competitive advantage over its competitors for labor in the market, and therefore it is easier for the employees to leave the organization whenever a better offer comes knocking at their door. The study highlighted so many factors which if well addressed will help to motivate the employees and make them feel a sense of belonging to the company. The recognition rewards scheme, came up more than a few times in the questionnaire responses as an area that needed to be seriously addressed. The management of the organization should therefore try to find ways of ensuring that this issue is thoroughly looked at and solved, they need to even ask the employees for their opinions on how to handle it since currently it is not meeting the employees expectation standards.

5.4.

Recommendations

The recommendations section has been divided into two main parts, the recommendations for improvements for the organization, and recommendations for further researchers. 5.4.1. Recommendations for improvement Recommendations for improvement are provided with regard to the discussion sub-titles discussed above. 5.4.1.1. Factors Influencing the Type of Reward Systems Used

Drawn from the discussion on this area earlier, the organization needs to consider the supply and demand for labor in the market in determining their remunerations and reward policy. This in turn, will enable them to develop a competitive advantage in their organization to keep their best employees. The employees are the internal customers of the organization and their needs have to be satisfied as well, lest they leave for another company that pays more attention to meeting those needs.
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5.4.1.2.

Equality of Reward Systems

Silensec Kenya needs to consider equity and equality of rewards systems to all employees, since without the feeling of justice and fairness, the spirit of teamwork is put at risk as some employees would feel that others are treated more special than them. This can also lead to unhealthy competition among employees and lack of cooperation as some employees may conceal certain information from their colleagues in an attempt to make them commit mistakes and blunders due to jealousy and sometimes hate. 5.4.1.3. Reward Expectations at Silensec Kenya

Reward expectation, is perhaps the most pressing area of contention in the organization that needs addressing. Most of the employees feel that there is a lack of communication from management about how their benefits and rewards are computed, and awarded altogether. The communication channels in the organization need to be clearly outlined and a platform established where the employees are communicated to about every area of their job that needs clarification, especially in terms of rewards and benefits. 5.4.1.4. Job Dissatisfaction at Silensec Kenya

Silensec Kenya needs to do a thorough overall review of their job remuneration and reward policy, with cooperation with the employees, to find out the major areas that should be addressed and how they are to be addressed in order to meet the employees expectations. The job itself needs to be further improved upon through job design, which includes job enrichment, job enlargement, and job rotation to make the employees more motivated and empowered to work at the organization. 5.4.1.5. Relationship between motivation and Staff Retention

The pension award scheme needs to be reviewed and addressed accordingly to enable it meet the standards that the employees desire, since this provides them with a security for the future. The recognition awards also need to be increased, and well defined and employees made aware of them in order to drive their efforts towards work and improve their motivation levels. Finally, the organization also needs to provide opportunities for job promotions in the organization structure
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as a reward for employees hard work. This will make the employees more ambitious and determined to work hard since they will know that they improve their chances of climbing up the corporate ladder by doing so. 5.4.2. Recommendations for further research This research study on employee motivation helps to get a clear picture about the factors which motivates the employees and the extent to which they do motivate them, as it has since been deduced that certain motivational incentives are desired more than others by different employees. This helps the management to formulate suitable motivational strategies to apply in order to motivate their employees and ensure staff retention. However, the motivational levels of the employees often change. The factors that motivate the employees may change with changes in time since their needs change with time as well. Therefore continuous monitoring and close observation of factors that motivate the employees is necessary to maintain a competent work force as only with a competent work force can an organization achieve its objective.

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6.0.REFERENCES Accel Team Development. (2011). Motivation Theory. Retrieved May 29th, 2011 from http://www.accel-team.com/motivation/theory_01.html Armstrong, M. & Murlis, H. (2004). Reward Management. A handbook of remuneration strategy practice. 5th Edition. Kogan Page Limited. London: United Kingdom. Pg. 415. Asanga, L. F. (2002). Remuneration and Staff Turnover in International Organizations: The case of the United Nations Environmental Programme. United States International University. Nairobi, Kenya. Pg. 14-15. Brown, D. (2011). Recognition Rewards- Awards, Gifts, & Employee Motivation. Retrieved July 27th 2011 from http://www.recognitionrewards.com/ Key, P. J. (1997). Research Design in Occupational Education. Retrieved June 4th, 2011 from http://www.okstate.edu/ag/agedcm4h/academic/aged5980a/5980/newpage110.htm Kinicki, A. & Williams, B. K. (2006). Management. A practical Introduction. McGraw Hill Irwin. New York, USA. Pg. 394-395. Kreitner, R. (2007). Management. 10th Edition. Houghton Mifflin Company. New York: USA. Pg. 378-380, 384-390. Mbugua, E. (2002). A survey of employee motivation at HACO Industries. United States International University. Nairobi, Kenya. McKee, J. (2007). Staff Retention. Retrieved May 29th, 2011 from

http://www.techrepublic.com/blog/tech-manager/staff-retention-problems-look-in-the-mirror/381 Morris, E. (2010). Employee Retention Surveys. Retrieved May 29th, 2011 from http://www.labusinessjournal.org/article-7-employee-retention-surveys.html Wambari, N. A. (2009). Effect of non-financial incentives on employee motivation: A case study of Barclays Bank of Kenya Limited. United States International University. Nairobi, Kenya.
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7.0.APPENDICES 7.1.Appendix I: Questionnaire

QUESTIONNAIRE ON EMPLOYEE MOTIVATION

This study is a requirement for the partial fulfillment of International Business Administration (IBA) degree program at the United States International University-Africa, (USIU-A). The purpose of this study is to find out what motivational strategies organizations can apply to ensure staff retention. Any information obtained through this questionnaire will be treated with the utmost confidentiality and be used solely for the purpose of the research project. PART A: GENERAL INFORMATION Please answer all the questions by circling the appropriate description of yourself. 1. Gender a. Male b. Female 2. Age a. 20 years and below b. 21-30 years c. 31-40 years 3. Marital Status a. Single b. Married c. Widowed d. Divorced e. Other, . d. 41-50 years e. 51-60 years f. Over 60 years

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4. Level of education a. High School b. College/Polytechnic c. University Degree d. Masters Degree e. PhD f. Other, ..

5. For how long have you worked with Silensec Kenya? a. 0-6 months b. 6-12 months c. 1-2years d. 2-3 years 6. What is your current job level? a. Senior level management b. Middle level Staff c. Junior Employee PART B: REWARD SYSTEMS AND STRATEGIES Please check on the box alongside the choices. You can check more than one where applicable. 1. What type of financial rewards does your organization use? Salary/Wages Fringe Benefits( cars, pension, medical care) Incentives (Profit sharing, Stock Ownership) Annual bonuses Any other,

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2. What type of non-financial rewards does the organization provide? Training Work Autonomy Paid Leave (sick off, maternity leave) Recognition Awards(Employee of the year, titles) Promotions Any other,

3. Which factors influence the type of reward offered by the organization? The type of job employee performs Employees qualifications and experience Labor Supply/ Demand in the Market Organizations Remuneration Policy Any Other, .

4. Does the company consider equality of reward systems for all employees? i. Yes ii. No iii. I dont Know If yes, in what areas is this applied? i. Equal pay for equal job ii. Equal working hours iii. Equal benefits iv. Equal incentives v. Any other,

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5. Please indicate by checking on the box the degree to which you are satisfied with financial and non-financial reward system and incentives scheme offered at Silensec Kenya. Degree of Satisfaction with the Present Reward System and Incentives Scheme Extremely Satisfied 5 Very Satisfied 4 Satisfied Not Satisfied Extremely Dissatisfied 1

PART C: CONTENTION AREAS AND OPINIONS 1. Which areas of reward systems in your organization need to be addressed to enhance employee satisfaction and performance improvement? (Tick where appropriate). Informing employees how their pay is computed More open communication about the benefits and pay More variety in benefits and incentives Any other, .

2. Are there areas you feel that the current reward schemes do not address? a. Yes b. No If yes, please elaborate

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3. How would you rate your overall working environment? a. Excellent b. Good c. Just Okay d. Bad e. Terrible 4. Would you consider changing your current job if you were offered a better paying one? a. Yes b. No

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7.2.Appendix II: Frequency Tables Duration Worked 0 6 months 6 12 months 1 2 years 2 3 years Total Table 4.1: Duration worked at Silensec Kenya Financial Reward System Salary/Wages Fringe Benefits(cars, pension, medical care) Incentives(Profit Sharing, Stock Ownership) Annual Bonuses Any Other Total Respondents Table 4.2: Financial Reward Systems Non-Financial Reward System Training Work Autonomy Paid Leave(sick-off, maternity leave) Recognition Awards(Employee of the year, titles) Promotions Any Other Total Respondents Table 4.3: Non-financial Reward Systems
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Frequency 2 5 10 4 21

Percentage 9.52% 23.81% 47.63% 19.04% 100

Frequency 21 18 3 15 0 21

Percentage 100 % 85.71 % 14.29 % 71.43 % 0% 100 %

Frequency 16 13 21 3 2 0 21

Percentage 76.19 % 61.90 % 100 % 14.29 % 9.52 % 0% 100 %

Factor Influencing Reward System Type of Job Performed Employees Qualifications and Experience Labor Supply/Demand in the Market Organizations Remuneration Policy Total

Frequency 16 0 0 5 21

Percentage 76.19 % 0% 0% 23.81 % 100 %

Table 4.4: Factors Influencing the Type of Reward Systems Used

Distribution Degree of Satisfaction Extremely satisfied Satisfied Neutral Not Satisfied Extremely Dissatisfied Total Frequency 1 15 2 3 0 21 Percentage 4.76 % 71.43 % 9.52 % 14.29 % 0 100 %

Table 4.5: Satisfaction with Present Reward Systems and Incentives scheme

Frequency Informing employees how their pay is computed More open communication about the benefits and pay More variety in benefits and incentives Total 12 7 2 21

Percentage 57.15 % 33.33 % 9.52 % 100 %

Table 4.6 Areas of reward systems in the organization that need to be addressed

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Responses Frequency Valid Yes No Total Missing Total System 16 2 17 3 21

Distribution Percentage 76.19 % 9.52 % 80.95 % 14.29 % 100 %

Table 4.7: Are there areas that the current reward system scheme does not address?

Rating Scale Excellent Good Just Okay Bad Terrible Total

Frequency 2 15 4 0 0 21

Percentage 9.52 % 71.43 % 19.05 % 0% 0% 100%

Table 4.8: Ratings for the Working Environment

Response Yes No Total

Frequency 19 2 21

Percentage 90.48 % 9.52 % 100 %

Table 4.9: Consideration for changing current job

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7.3.Appendix III: Research Budget BUDGET 1. Proposal Development Printing and Stationery Transport(Fuel and Fare) Miscellaneous 2. Data Collection/ Fieldwork Printing and Stationery Transport (Fuel and Fare) 3. Data analysis and Report Writing Printing and Stationery Transport (Fuel and Fare) Miscellaneous COST (KSHS)

150.00 300.00 100.00 950.00 300.00 300.00 200.00 100.00

TOTAL COSTS

2400.00

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