The Relationship between Allocation of Equal Employee Benefits and Employee Job Satisfaction and Performance at the Kenya Pipeline Company, Kenya

By Mochama, Veronica K. | Journal of Emerging Trends in Economics and Management Sciences, April 2013 | Go to article overview

The Relationship between Allocation of Equal Employee Benefits and Employee Job Satisfaction and Performance at the Kenya Pipeline Company, Kenya


Mochama, Veronica K., Journal of Emerging Trends in Economics and Management Sciences


Abstract

The purpose of this paper is to examine the effects of awarding equal employee benefits on employees' level of job satisfaction. It also explores the link between equal employee benefits and job performance based on a study conducted at the Kenya Pipeline Company, Eldoret Branch in Kenya. The study employed the interpretive case study methodology and descriptive survey research to obtain in depth information from the respondents. The target population comprised 180 employees at KPC, Eldoret branch. Stratified random sampling was used to select 49 employees, and purposive sampling to sample 6 senior management staff. Data was collected using a questionnaire, document analysis and an interview schedules. Documents such as the company's journals and the strategic plan were analyzed so as to complement data obtained through the questionnaire and the interview schedule. Descriptive and inferential statistics were used to analyze the data. The study established that there is a positive correlation between equal employee benefits and level of job satisfaction among employee. There was also a significant correlation between equal employee benefits and increased efficiency as well as profitability. Conversely, there was no significant relationship between equal employee benefits and corporate image, employee retention, cost reduction and staff morale. From the findings, it is essential for the company to harmonize the benefits package so as to cushion itself and its employees against the harsh effects of inflation. Lastly, the company ought to review its benefits award structure so as to make it more competitive, equitable and transparent. The study contributes knowledge useful in streamlining employee rewards systems in a bid to attain competitive advantage, improved performance and good corporate image. The company will also attract and retain the best talent as a result of adopting best practices in employee benefits management, as the management will benefit from good relations with its employees and will save on costs associated with lockouts and strikes.

Keywords: equal employee benefits, job satisfaction, performance, kenya pipeline company.

INTRODUCTION

Research aimed at quantifying the links between employee satisfaction and customer satisfaction, productivity, and financial performance began in 1980 with Benjamin Schneider's survey of satisfaction levels of bank customers and employees (Robert, 2001). Studies by Frederick Reichheld's, The Loyalty Effect (1996) and Heskett et al.'s The Service Profit Chain (1997), have produced the first sets of hard data quantifying these links. Both studies have concluded that there are direct and quantifiable links between customer service variables (such as satisfaction and loyalty), employee variables (such as satisfaction, enthusiasm, loyalty, commitment, capability, and internal service quality), and financial results (Sweetman, 2002).

In 1997, Development Dimensions International (DDI) conducted focus groups, customer interviews, and surveys to determine drivers of an effective service environment. DDI found evidence of a circular relationship between employee satisfaction and retention, customer satisfaction, loyalty, and increase in company profitability. In addition, employee satisfaction was strongly related to employee commitment and loyalty, and both measures have proven relationships to retention and productivity (Koys, 2001). The study found that employees' perceptions of their capabilities, satisfaction, and length-of-service were correlated with customer satisfaction.

According to an Anonymous (2002), Gallup reports that highly satisfied groups of employees often exhibit above-average levels of the following characteristics: customer loyalty (56 percent), productivity (50 percent), employee retention (50 percent), safety records (50 percent) and profitability (33 percent).

A Watson Wyatt Worldwide study has found that the practice of maintaining a collegial, flexible workplace is associated with the second-largest increase in shareholder value (nine percent), suggesting that employee satisfaction is directly related to financial gain (Bruce & Ira, 2002). …

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