CHAPTER ONE

1.0 INTRODUCTION

This chapter comprises of the background of the research study,

statement of problem, the purpose of the study, objectives of the

research study, research questions, subject scope, and

significance of the study and structure of the report.

1.1Background

The Kenya ports authority has its roots in the early 1970s. It

was established in 1978 through the Act of parliament of Kenya.

The Port of Mombasa lies on a coralline island linked by

causeway, ferry, and bridge to Kenya’s mainland. In a bay off the

Indian Ocean, the Port of Mombasa is a contemporary deep-water

port and a market for Kenya’s agricultural products, much of

which is exported along with products from Uganda and Tanzania.

According to Kennedy Muema Logistics Manager (2009) the port of

Mombasa is the second largest port in Africa in terms of tonnage

and containers handled after the port of South Africa- Durban.

The Kenya Ports Authority is responsible for managing and

operating the Port of Mombasa. In an excellent strategic location

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on Kenya’s central coast about half way between the Port of

Durban in South Africa and the major Middle East ports, KPA is a

gateway to East and Central African countries. It has been the

hub for international trade in the East African region since it

was developed under British rule in the late 19th Century.

Total cargo traffic through the port averages 14 million tons per

year. After Durban, Mombasa is the best connected port in the

East African region with 17 shipping lines having direct calling

connectivity to over 80 ports. The port of Mombasa is a regional

hub, serving 8 countries, Kenya, Uganda, Rwanda, Burundi, Eastern

DRC, Northern Tanzania, Southern Sudan, and Somalia

Dig 1.0 Countries served by KPA

2

Source: Ministry of transport and trade

The port of Mombasa is a highway to most imports and exports from

various countries and to various destinations respectively. This

is the place where the demands of customers, importers and

exporters are met. It is the place where the expectations of some

governments and various businesses are met.

Over a period of time, the management of KPA has tried injecting

a lot of resources to improve employee performance thus promoting

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organizational performance. This has been achieved through the

various incentive schemes that have been put in place both

monetary and non-monetary incentives

Employee incentive schemes are key components in an organization

intended to act as a tool

to win employee loyalty. For this reason, most business

organizations have it at the back of their mind that employee

incentives are vital elements for their survival in the business.

Employees are the most valuable assets in any organization.  A

successful and highly productive business can be achieved by

engaging them in improving their performance.

 All employees are not equal in their working and they have

different modes of working like some have highest capability

regardless of the incentive but others may have occasional jump-

start. If they are handled effectively, the result can be greater

productivity and increased employee morale.

The motivation of the employees in most cases is ignored in

small companies because of the employers’ constant pressure to

increase productivity, profitability and revenue growth and it

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often overshadows the importance of how an unengaged workforce

can negatively affect performance.

There are a number of factors which may be affecting the

employees’ performance. Each employee may have different effect

from different things at workplace. Their attitude and behavior

can play a vital role in their performance. This project will

identify the root of employee incentives and how it relates to

low productivity so that strategies can be established to improve

employee performance.

Halsey, Blanchard and Johnson (2002), state that organisational

performance is a product of many factors and these include

organizational structure, knowledge, non- human resources,

strategic positioning and processes which are all integrated so

as to attain employee performance.

According to Glacier (2004), incentives act as catalysts for

improved employee performance by as nearly as twice as they would

do without them. This affects organizational performance

significantly. A Monetary incentive is a high level of motivator

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(Stoner, 2002). He noted that money is an integral part of every

man’s life and it is a primary means to satisfy psychological

needs such as food, shelter and clothing thus winning the human

mind. According to Armstrong (2003) financial incentives include

Taylor’s differential pay schemes, profit sharing plans and stock

options and over time premium while non- financial incentives

given to employees by organizations are recognition, career

advancement opportunities and promotion.

Therefore like any other organization KPA must learn how to

satisfy the needs of various clients. This can be achieved

through its performance level. Performance can be measured in

various ways but in this case, performance is how effective and

efficient the employees can be in delivering their services to

the organization. For this case it is the average time taken to

offload and load cargo from the ships within the scheduled 24

hours by the port authority.

Amidst unstinting efforts put forth by the management of KPA in

order to stimulate the employees, the company has not been able

to achieve its goal of stimulating the employees to its fullness.

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In fact, the cost of incentives provided to improve on the

employee productivity and employee loyalty and other related

costs have been increasing by 8% for the past three years without

fully achieving the managerial goal but instead, continuously

impacting on the profitability of the company. ‘‘The employees

register low commitment and turnover, low levels of service

delivery and failure to meet company targets’’ said the M.D Mr.

Gichiri Ndua. KPA has put various employee incentive schemes

which are believed to have a positive effect on the performance

of the employees and employees prefer their pay to be measured

against their performance because they believe that incentives

influence their performance. This scenario has greatly caused

labor tensions in KPA and this remains a point of debate on the

relationship between employee incentives and employee performance

1.2 Statement of the problem.

Researchers on employee management and organizational performance

recognize incentives as an important element for the survival and

performance level of any business organization. Organizations

irrespective of their nature and size commit reasonable amount of

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resources in improving employee performance with the objective

of retaining their employees. When one gives the employees what

they expect, he is assured of retaining them and improving their

performance. Contrary to this, the level of employee performance

is not satisfactory in some organizations; it remains a puzzle to

be resolved. Therefore this has necessitated the researcher to

establish the relationship between employee incentives and

employee performance using the case of Kenya Ports Authority

(Mombasa)

1.3 Purpose of the research study.

The research study seeks to establish the relationship between

employee incentives and employee performance in Kenya Ports

Authority.

1.4 Research objectives.

To investigate the various components of employee incentives

in Kenya Ports Authority

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To establish the factors influencing employee performance in

Kenya Ports Authority

To establish the relationship between employee incentives

and employee performance in

To come up with strategies to improve employee performance

1.5Research questions

i) What are the various components of employee incentives in

Kenya Ports Authority?

ii) What are the factors that influence employee performance in

Kenya Ports Authority?

iii) What is the relationship between employee incentives and

employee performance in Kenya Ports Authority?

iv) What are the recommendations that can lead to increased level

of employee performance in Kenya Ports Authority?

1.6 Scope of the research study.

1.6.1Conceptual framework

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This study covered employee incentives in order to attain

accurate, reliable and timely information on employee performance

in Kenya Ports Authority.

1.6.2Geographical scope

The area of study included the Kenya ports authority Kilindini

Harbor in Mombasa Kenya which lies in the Coast Province of the

Indian Ocean.

1.7 Significance of the research study.

The research study shall equip the researcher with knowledge and

analytical skills about the field of study.

The study shall help the organization to formulate policies and

strategies relating to establishment and administration of

employee incentives.

The study can help identify whether there is any influence of

incentives on employee performance hence enable the organization

to react accordingly to improve the performance of the

organization.

1.8 Structure of the Report

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Chapter one of the report contains the introduction to the study,

background, statement of the problem, purpose of the study,

objectives of the study, research questions, subject scope and

significance of the study.

Chapter two contains the concept of employee performance,

components of employee performance, factors that influence

employee performance, and performance factors for employees.

Chapter three covers the study methodology. It describes the

research design adopted by the researcher, data type and sources,

data collection, analysis and presentation methods.

Chapter four presents interpretation and discussion of key issues

about the variables studied as found from the literature review.

Chapter five contains the summary of findings, conclusions and

recommendations made by the researcher.

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CHAPTER TWO

LITERATURE REVIEW

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2.0Introduction

This chapter examines some of the relevant literature on employee

incentives, factors that enhance employee performance and factors

influencing employee performance in Kenya Ports Authority. The

first part contains definitions of the key terms used in the

study and the different types of employee incentives,

2.1The Employee Incentive Schemes.

Newstrom and Davis (2002), defined incentives as extra payments

provided to employees for extra performance in addition to the

regular pay.

Incentives are designed to motivate human resources by rewarding

the person over and above the time rated remuneration for

improvement in the targeted results and commitment (Saleemi,

1999).

According to Cole (2002), incentives are payments linked to

achievement of the set targets goals which are designed to

stimulate people to achieve the targeted goals and objectives of

the organization in terms of output.

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Kreitner (2000), Incentives include materials and psychological

pay offs to employees for work done. These pay offs are likely to

have great influence on the level of performance amongst

employees towards the achievement of organizational goals and

will also determine how long employees are willing to work for a

particular organization.

Employee incentive schemes consist of a number of interrelated

processes and activities which are combined to ensure that

incentives are managed effectively to the benefit of the

organisation and the people working within an organisation

(Armstrong 2009).

In broad terms Armstrong (2003) classified employee incentives as

financial and non- financial. The financial employee incentives

are rewarded strictly in monetary form whereas the non- financial

rewards come in any other form other than money. Armstrong

categorized financial incentives as Taylor’s differential pay

schemes, profit sharing plans, stock option and overtime premium

and the non- financial incentives given to employees by

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organization are recognition, career advancement opportunities,

promotion, status and praise.

Sheffsin S. (2003), states that in economics and sociology, an

incentive is any factor (financial or non- financial) that

enables or motivates a particular course of action. It is an

expectation that encourages people to behave in a certain way.

Since human beings are purposeful creatures, the study of

incentive structures is central to the study of all economic

activity (both in terms of individual decision making and in

terms of cooperation and competition within a larger

institutional structure.

Employee incentives are one technique by which employers carry

out their end of the employment contract and compensating

employees for their efforts.

In its most generic form, the incentive payment is any

compensation that has been designed to recognize some specific

accomplishment on the employee's part. In general, it is hoped

that the prospect of the incentive payment will inspire the

desired employee performance. While the terminology may be

15

suspect, it usefully conveys a key concept in the examination of

employee incentives

2.2.1 Classification of Incentives

Incentives can be classified according to the different ways in

which they motivate agents to take a particular course of action.

One common and useful taxonomy divides incentives into three

broad classes but the most common is remuneration incentive Plan,

(2008)

Remuneration incentives (financial incentives)- are said to exist

where an agent can expect some form of material reward-

especially money in exchange for acting in a particular way.

Moral incentives- are said to exist where a particular choice is

widely regarded as the right thing to do or referred to as

admirable. Failure to act in a certain particular manner is

regarded as indecent.

2.2.2Types of Incentives

Armstrong and other authors have discussed incentives in various

ways as elaborated below.

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Straight line rate system.

A worker is paid straight for the number of pieces of his output

or what he produces per day. In this plan, quality may be

affected (Coutler, 1999).

Straight piece rate

A worker is paid straight for output set by management even if a

worker produces less than the target level output; he is given a

wage in direct proportion to the number of pieces he produces at

the straight piece rate (Cascio, 1999).

Halsey premium plan.

Halsey premium Plan takes into account the total time saved by

the employee, and is a useful method for computing the incentive,

when accurate performance standards have not been established.

The value of time saved by the employee is computed and the

earning is shared by the employee and the organization.

Halsey premium plan. W=Rt* (p/100) (S-T) R.

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Where W= wage of workers, R= wage rate, T= actual time taken to

complete the job,

P= percentage of profit shared with workers, S= standard time

allowed. Output standards are based upon previous production

records or previous performance available. Here the management

also shares a percentage of bonuses from employees (Davis 2002).

A strong incentive is one that accomplishes the stated goals. If

the goal is to maximize production, then a strong incentive will

be one that encourages workers to produce well at full capacity.

A weak incentive is any incentive below the expected level of

performance (Scarpello, 2001).

Non- financial incentives .

Recognition-This method appreciates employees work and can be

illustrated through “employee of the year award”- Uganda Clays

received the best employer of the year 2008 award on 1st March,

2009 for providing its employees with childcare centre and

medical services at work place (Daily Monitor, 2nd March 2009).

It is also a form of feedback and hence a motivation to the

employees if used by managers (Keith and Davis, 2002).

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Jacobson (2004), supported promotion as a non- monetary incentive

which builds confidence of employees as it encourages them to

continue working hard and it directly affects performance of the

organization. Promotion is emphasized by Coutler (1999), who

stated that when jobs are enriched or enlarged, employee

knowledge, skills and attitude are put to maximum use as they

feel satisfied.

Newstrom and Davis (2002), suggested that profit sharing plans

are used by organizations with the aim to induce employees and

thereby improve output by engaging employees in collective

efforts to boost productivity and organizational profits which

will then be shared between workers of the company and the

company.

Armstrong (2003) supported Taylor’s differential payment schemes

because it motivates employees in various organizations whereby

employees get more pay as they speed up the rate at which they

work and henceforth cause increased levels of quantity produced

with the targeted time.

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Bongok JB (1999) stated that bonus plans can also be used to

facilitate organizational performance through employees. A bonus

scheme is a plan that provides a system of wage payment that

offers an inducement in form of output and commitment. From this

point of view, the piece of wage rate system may be said to be

the most effective in organizations.

Schuler R. (2002) observed that incentive pay plans are of two

types, individual incentive programs and group incentive plans.

He said that individual incentive programs are the most tried and

true forms of the pay system. Incentive plans can be best

classified according to the level at which they are applied.

Individual Incentive Plan

Aswathppa (2002) mentioned that each person’s output is measured

and subsequent rewards are based on output. These individual

incentive plans differ in terms of the method of rate

determination. Individual incentive plan also vary in regard to

the constancy with which pay is a function of production level.

It includes the following:-

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(a)Piece work plan- Piecework is a system of labor in

which payment is based on the actual number of pieces

produced rather than hours worked, regardless of how long it

takes.

(b)Straight piecework plan; the straight piecework plan

guarantees employees a standard pay rate for each unit of

production.

(c) Differential piece rate plan-In this case more than

one rate of pay for the same job is used.

(d) Standard hour plan- Standard hour plan is a piece work

plan, except that standards are denominated in time per unit

output rather than money per unit of output.

(e) Suggestion systems- rewards employees for money saving

or money producing ideas and is used extensively.

Team based Incentives

Team based incentives fall between individual incentive and whole

organizational plans such as gain sharing. Team based incentives

are not perfect because some members do not always pull their own

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weight. Cole (2000) also added that under company incentive

schemes, a bonus is paid to all employees on the basis of

productivity achieved within the business as a whole.

Mathis & Jackson (2008) broadly discussed the incentive system

guidelines when establishing and maintaining such systems. These

include;

Reward, it is important to link the incentives to

performance.

Recognize individual differences

Recognize organizational factors and continue to monitor

to reflect current technological and organizational

conditions.

2.4Factors influencing employee performance.

2.4.1Managerial Standards

Managerial standards can be a factor in motivating or de-

motivating employees, according to technology employment resource

(Tech Republic employment resource 2010). Tech republic

elaborated that managerial standards should be in line with the

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job duties outlined in the job description outlined by human

resources. Therefore the background of the employee, including

their educational history, should also be outlined in a job

description. Managers should keep their expectations in line with

the duties assigned to the employee. If the managers are

expecting more from an employee than what they were hired for, or

than what their background has prepared them for, this can

diminish employee performance because they can manage what they

were not trained.

2.4.2 Tools and Equipment

Rebeca Mazin (2010) pointed out that just as a driver needs a

vehicle in operating condition; employees must have the tools and

equipment necessary for their specific jobs. This includes

physical tools, supplies, software and information. Outdated

equipment or none at all, has a detrimental effect on the bottom

line of performance.

2.4.3Technical Training

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Employees can bring skills to a position but there are likely to

be internal, company- or industry-specific activities that will

require additional training. If a process requires a new software

package it is unrealistic to expect employees to just figure it

out; they should receive adequate training Rebeca Mazin (2010 )

2.4.4 Monitoring and enquiry

The level of monitoring employees in terms of evaluation and

giving them feedbacks on their performance encourages them.

Employees can be monitored through assessments periodically and

evaluating their performance systematically (Sammons et al,

2005). Halsey & Blanchard (2002) viewed that an effective process

lets followers know on regular basis how well they are doing the

job. It is unrealistic to expect employees to improve when they

do not know how well or poorly they are performing.

2.4.5 Working environment

Summons et al (2005), were of the view that an orderly conducive

working atmosphere and attractive working conditions would

directly impact the performance positively. Employees will be

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proud of the conditions prevailing and therefore with tranquility

they will perform their duties therefore encourages for orderly

and secure working environment for employees.

2.4.6 Employee commitment

The level of employee commitment will depend on their motivation.

The term motivation is an inducement of the desired behavior

within subordinates with a view of channeling their efforts and

activities to achieve organizational objectives (Balunywa, 2003).

Employee motivation will be influenced by the incentives given to

them. According to Glacier (2004), incentives act as a catalyst

for improved performance.

2.5 Employee incentives and employee performance.

Human capital is the most valuable resource in any organization.

The employees and staff that run a company or organization have

the power of its success or failure, so keeping them motivated is

imperative to the livelihood of the business. Employee incentive

programs are also effective ways to keep the company running

smoothly and maintain its members’ productivity. Employee

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incentive programs are small steps that bring an excellent return

to the company's investment.

Employee incentives programs activate or induce goal-oriented

behavior such as job performance. The classical reinforcement

theory that focuses on the relationship between a target behavior

(such as work performance) and its consequences (such as pay)

forms the basis of incentive pay to motivate employees. This

theory premises a positive link between incentive pay and

employee motivation under the assumption that since wages or

salary is what ultimately brings people to work, increased wages

as incentive pay would lead to increased employee productivity .

(Tech republic 2010)

2.6 Employee Performance factors.

One of the toughest challenges faced by nearly all managers at

some point in their career is managing poor performers. Failure

to manage poor employee performance can result in big problems

for managers as it reduces their own credibility and can derail

their careers. Poor performance has impacts on team morale,

manager credibility and, ultimately, on the success of the

26

company. The following are some of the ways an organization can

improve its employees’ performance.

2.6.1 Performance management and review.

Set targets should be managed well for them to be achieved. It

is necessary for the individual to sit down with their line

managers or regular basis and review what has been achieved and

what has not been achieved. It should not only include the review

of performance on the job but should also assess the progress

against their professional standards that have been identified.

Output from this will not only contribute to short-term goal

setting and individual development plans, but also improve on the

employee performance and longer term processes such as career

development and even succession planning for the organization.

Elaine (2008)

2.6.2The working environment.

The first thing to remember is that employee performance does not

occur in a vacuum. We have to take a systems perspective and look

not only at the employees, but also at the environments in which

they are expected to perform. It has been said that if we put

good performers in bad systems, the systems will win every time.

We know that behavior in any facet of our lives is a function not

only of the person, but also of the environment—more

27

specifically, of the interaction of the person and the

environment. Behaviors at work, then, are a function of the

interaction of the employees (with their person factors) and the

work environment (all the organizational systems factors). And it

is behaviors that lead to performance. Elaine (2008)

Depending on whose perspective you choose to believe, as many as

two-thirds to four-fifths of the causes of employee performance

problems are attributable to the work environment, not the

employees. If this is true—in fact if it is only partially true—

then one answer to the above question clearly is, "Fix the

systems in which the employees work!" (David Ripley 2002)

2.6.3 Training and learning opportunities.

According to Armstrong (2009) training, computer based and on the

job training is also a considerable way of getting positive

performance improvements if they are getting it in a very

professional way. It will also give a view of finding the

importance of the said training and its effects on the

performance of the employees in playing profitable role in any

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organisation. Do not allow the employee to feel as if there is

nothing more for them to learn in their current position.

The organization should provide inter-departmental career

development plans that include certifications, seminars and or

workshops intended to provide both career and personal growth.

This is an action that also helps to increase employee’s

performance.

2.6.4 Information sharing.

The organization should involve employees in what is going on

within the organizations as well telling them how their jobs

contribute to the big picture of the organization. When you keep

the employees informed they tend to feel a greater sense of

worth. The management should keep the communication hopeful and

truthful, it should not be afraid to share bad news, instead be

more strategic about how to deliver it. For example if there are

no opportunities for advancement, then it should use words like;

currently, in the future, new technologies, job rotation; words

that give hope. Be sure to follow through when opportunities

become available. (Rebecca Mazin 2010)29

2.6.5 Guiding Principles

Organizations should emphasize on the organization’s vision,

mission, and values statements. This information tells the

management the kind of fundamental practices that are important.

Examine instructions on "how" employees should do things as well

as "what" they should do. The management should also consider

rules, regulations, and policies thus using information on

compliance information to support the importance of certain types

of employee performance.

2.6.6 Employee Appreciation

According to Newstrom and Davis (2002) appreciation is a

constructive attitude that cannot be forced onto a person;

instead morale comes from a positive work environment and

gratified contribution. People who consistently present their

best competence deserve recognition for the role they play in the

success of the company. Without this acknowledgment, an employee

can feel ignored or feel taken for granted. As a result, he may

begin to be inefficient. Employees who do not receive feedback

on the execution of their efforts may lack confidence in what

they are doing.

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According to Armstrong (2009), financial compensation for a job

well done is always a swift motivator for employee performance.

An annual review may offer the opportunity to note the

achievements of employees and determine whether or not their

skills are being used to best benefit the company.

Conclusion

Incentive schemes have proved to be of positive impact to

employees and therefore any organization is encouraged to give

any of the various types of incentives for organizational

effectiveness and performance improvement among employees. There

are many factors that affect the employee performance in Kenya

ports authority according to the literature from different

scholars.

The research covered the various components and types of

incentives offered to the employees, the factors affecting their

performance including the working environment, monitoring of

31

employees through evaluation and feedbacks given, employee

commitment, managerial standards tools and equipment and

technical training.

Further study was made on the strategies available to improve

the employee performance in Kenya ports authority which includes

performance management, providing good working environment,

training and learning opportunities, and information sharing and

employee appreciation.

Summary.

Chapter two discusses the literature from various scholars. The

concept of employee incentives, components of employee

incentives, classification of incentives and factors influencing

employee performance. This chapter also entails recommendations

or strategies that can be implemented to achieve better employee

performance which is discussed as performance factors.

The relationship between the variables has also been dealt with

in this chapter.

The next chapter (chapter three) forms the basis on which data

was collected and analyzed. It also describes the research design

that was employed .Chapter three explains the data collection

32

techniques and the types of data collection methods used by the

researcher. It further provides the challenges that the

researcher encountered and how he managed to resolve them.

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CHAPTER THREE.

RESEARCH METHODOLOGY

3.0 Introduction

This chapter deals with how data was collected and analyzed. It

provides the description of the research design employed, the

survey population, sampling, data collection and analysis; and

problems encountered during the study.

3.1 Research Design

The study was a qualitative and quantitative research involving

primary and secondary data. A combination of descriptive, cross-

sectional and analytical research design based on results from

the questionnaire and interviews were used.

3.1.1 Survey population

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The study covered the human resource management with reference to

the employee incentives in Kenya Ports Authority from 1998-2011

covering the conventional cargo department and the container

terminal staff members.

3.1.2 Sample Design and sample size.

The sample size included 60 respondents from the conventional

cargo terminal and the container terminal. In order to avoid

gender imbalance 35 respondents were males (58%) whereas 25 were

females (42%). The samples were further divided into pensionable

workers-40 questionnaires and 20 casual workers

3.1.3 Data Collection Instruments

Self administered questionnaires were used where the respondents

were required to fill the questionnaire with the help of the

researcher in case of explanations. These were more convenient,

time saving, reliable, provided more information and allowed the

respondent to give a free expression of their view than direct

observation that could create suspicion among the subjects. Both

35

closed and open ended questions were used because of their

advantages. The questionnaire had four sections; personal

information, employee incentives and four factors affecting

employee performance and the strategies to improve the employee

performance. Upon delivery of the questionnaires to the

respondents, appointed dates for collection were given by the

respondents which were likely 1-4 days.

The researcher used both primary and secondary data to collect

the information. The primary sources were questionnaires and

observation methods where 54 respondents were able to fill the

questionnaires. The secondary data consisted of literature that

was from journals, handbooks and organization’s records got from

Kenya Ports Authority Research reports and text books from MUBS

library were used as sources of data.

3.1.4 Measurement of Variables.

The questionnaire was developed containing at least 5 scales

measuring strongly agree, agree, not sure disagree and strongly

disagree. Scale items followed a Linkert scoring formats ranging

1- 5, with 1 indicating strongly agree, 2 indicating agree, 3

36

indicating not sure,4 indicating disagree and 5 indicating

strongly disagree . There were also independent answers given and

the most correct was to be ticked.

3.1.4 Data Processing and Analysis.

Data was collected, edited and analyzed for accuracy and clarity

in order to establish the relationship between incentives and

employee performance. The researcher was based on the

recommendations of the study on subsequent information gaps in

line to the establishment of a relationship between the two

variables.

The data collected from targeted population was edited to

identify errors in the questionnaire and how the errors could be

eliminated whenever possible. It was done by checking the

completeness, accuracy, uniformity and comprehensibility of data.

3.1.5Hypothesis

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According to information and data, the key hypothesis stands as

follows: If the level of employee performance in Kenya Ports

Authority is low, then the contributory factors may include:

Lack of employee commitment, poor working environment, lack of

regular monitoring and enquiry and poor managerial standards.

Poor managerial standards, poor working environment, irregular

monitoring and enquiry stand to be the independent variables

(they affect employee performance) whereas the level of employee

performance in KPA is the dependent variable. Therefore, the

hypothesis is: Increased level of employee performance depends on

Good managerial standards, Good working environment, and Regular

monitoring and Employee commitment. Thus

ep={ms,ec,we,rm}=employee performance, ep=employee performance,

ms=managerial standards, ec= employee commitment, we=working

environment and rm=regular monitoring.

The hypothesis can be summarized in the conceptual frame work

below.

Dig1.2 showing conceptual framework-variable relationship.

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Independent variables Dependent

variable

Monitoring

Commitment

Management

Environment

3.0 Limitations and Solutions.

Time constraint.

The researcher found problems in time management. There was

insufficient time between researching and studies especially

since it was examination period. The solution was to make a

personal time table to balance both studies and research.

Low response rate.

This was because some respondents had other commitments and did

not have time to fill the questionnaires. The researcher’s target

had been 60 but response was obtained from only 54. The

39

Employeeperformance

researcher had to extend the dates of collection to 6 instead of

the agreed 4.

Financial constraints.

The researcher encountered financial constraints especially in

getting funds for surfing, printing, stationary, transport and

accommodation despite which the researcher made use of the

available funds obtained from relatives, friends and his dear

parents to carry out the study.

Outdated data.

The secondary data was not current literature and were also

limited copies of latest editions of textbooks, scholarly

journals and research reports in the library.

Limited Experience

The researcher faced problems in conducting this research since

it was the first time and therefore experienced a lot of

40

confusion. The supervisor was of much help in guiding throughout

the research thus enabled the researcher to articulate issues

concerning the research.

CHAPTER FOUR

INTERPRETATION AND DISCUSSION OF FINDINGS.

4.0 Introduction

41

This chapter considers the views of different respondents on the

subject matter of employee incentives and their relationship with

employee performance with reference to Kenya Ports Authority.

4.1 Personal Data of the Respondents.

Table i: Respondent’s ages.

Ages Frequency Percentage

18-25 8 14.8

26-33 17 31.5

34-41 12 22.2

42-49 9 17

50-57 8 14.8

58 and above 0 0.0

Total 54 100

From the above table, the age groups 18-25 and 50-57 have similar

percentages of 14.8% showing that Kenya Ports Authority is

prepared for those employees who are soon to retire by having the

same percentage of new recruits. This is to ensure continuity of

42

the company and long term survival. It also shows most employees

are between age groups of 26 to 49.

Table ii: Gender proportions

Gender Frequency Percentage

Male 33 61

Female 21 39

Total 54 100

Source-primary data

From the above table, 61% of the employees are male whereas the

females are 39%. This shows that there is gender imbalance.

Diagram 3: Pie chart presentation.

43

61

39

Gender percentages

malefemale

Table iii: Respondent’s working experience

Number of years Frequency Percentage

1-4 24 44.4

5-8 24 44.4

9-12 6 11.1

13 and above 0 0.0

Total 54 100

44

The table above reveals that 44.4% of the employees have 1-4

working years in this company; this could be one of the reasons

for the current poor performance. 11.1% of the workers have 9-12

years of working experience compared to the 444.4% of 5-8 years

of experience; it shows that in between the two classes there are

a lot of transfers or retrenchment of these employees, which also

may have contributed to the poor performance.

Table iv: Education levels of employees.

Levels Frequency Percentage

Certificate 15 27.8

Diploma 19 35.2

Degree 8 14.8

Master 12 22.2

Total 54 100

Source-primary data

The table shows that most of the employees (35.2%) have a diploma

education level and 22.2% of them have masters’ degree. This

shows that they are competent in terms of knowledge, skills and

45

attitude; this should therefore enhance the performance of Kenya

Ports Authority.

Diagram 4: Graphical illustration;

CertificateDiploma

DegreeMasters

05

10152025303540

Frequency

Table V: Company incentives

Frequency Percentage

Agree 54 100

Not sure 0 00

Disagree 0 00

Total 54 100

46

It shows that Kenya Ports Authority offers incentives fully to

its employees. This reveals that the administration understands

the importance of incentives as it influences performance

directly.

4.2Employee incentives.

Table vi: Categories of incentive scheme.

Types Frequency Percentage

Financial 31 57.4

Non- financial 23 42.6

Both 0 0

Total 54 100

Only 57.4% of the employees were able to identify with financial

incentives but 42.6% were able to identify with non- financial

incentives. The reason is because the rewards they receive as

salary is very little compared to their living standards and they

don’t feel the extra pay as beneficial to them.

47

Diagram 5 Categories of incentive schemes.

financialnon-financial

both

0

10

20

30

40

50

60

FrequencyPercentage

Presentation of types of non- financial incentives.

Recognition- 22/54*100%= 40.7%

Promotion- 32/54*100%=59.3%

48

Status- 0/54*100%=0

Many employees in Kenya Ports Authority were able to identify

with promotion by 59.3%, this is practical when employees are

given the responsibility of being a departmental superintendent

from the rank of a supervisor. This is only when the employee’s

performance goes beyond the standard set by the management.

Employees are also identified with recognition as a non-

financial incentive by 407%, showing that the administration is

able to interact with the employees and appreciate their effort.

Truthfully, status is not part of non- financial incentives

because it’s the government that responsible for allocating the

top offices that is the managing directors and the chairpersons.

The company has therefore been able to encourage their employees

to perform well there duties despite their low salaries.

Table vii: Government incentives.

Government incentive Frequency Percentage

Strongly Agree 0 0

Agree 8 14.8

49

Not Sure 26 48.14

Disagree 20 37.03

Strongly Disagree 0 0

Total 54 100

From the above table, 42.6% of the employees were not sure about

the government incentives they receive because of the meager

salaries they always receive. More so, they have a very small

percentage on the total income that they receive.

48% of the employees are in total disagreement about any

government incentive scheme because the government has always

denied there salary increment requests.

Dig 6 Government incentives.

50

14.8

48.14

37.03

AgreeNot sureDisagree

Source-Primary data

4.3Factors influencing Performance.

Table viii Factors influencing employee performance.

Factors that influence

employee performance

directly

Strong

ly

Agree

(%)

Agree

(%)

Not

Sure

(%)

Disagr

ee

(%)

Strongly Disagree

(%)

Total

(%)

1. The managerial

standards

56 38 6 0.0 0.0 100

2. The employee

commitment and

77 23 0.0 0.0 0.0 100

51

attitude due to

incentives

3. Monitoring and

enquiry of

employees by

supervisors

21 23 6 42 0.0 100

4. The working

environment.

76 19 0.0 5 0.0 100

5. The tools and

equipment provided

67 25 4 2 0.0 100

6. The level of

provision of

learning and

training resources

45 38 8 9 0.o 100

7. Employee’s

condition in terms

of health and

working readiness

67 33 0.0 0.0 0.0 100

8. Leadership style

directly influence

54 48 2 0.0 0.0 100

52

relations between

employees and

managers which

affects their

response

9. Self- perceptions

of the employee

directly affect

their performance.

45 55 0.0 0.0 0.0100

10. The level of

coordination and

communication

affects level of

employee

performance.

46 33 12 9 0.0 100

Source-primary data

From the previous table 8, we realize that there are other

factors that influence the performance of employees apart from

53

incentives. This gives an explanation of why the performance is

good in KPA despite the salaries and incentives given to the

employees. These factors include:

The type of the managerial standards, the employee’s commitment

and attitude, the level of provision of learning and training

resources, employee condition in terms of health and working

readiness, monitoring and enquiry by supervisors, tools and

equipment provided and level of coordination and communication.

4.4 Respondent’s opinions.

The respondents were able to give the following opinions on the

possible strategies to improve employee performance.

The management can reward best performers. This will boost

their morale hence improving on their performance.

Companies can organize seminars and workshops for employees

to enhance their performance through gaining knew skill thus

improving their competences.

54

Regular monitoring and closely looking at employee’s

commitment will enhance performance since employees will be

in a position of reviewing their previous performances.

The managers and supervisors should be role models

thorough the display of descent and participative leadership

style.

The management should have proper coordination and

communication within the organization.

During the recruitment process, the organization should

employ more skilled staff.

Companies should increase employee incentives to boost

their morale.

Improve on the spirit teamwork.

The government should invest on human capital by organizing

training schedules to employees who would like to upgrade

their skills.

The management should provide protective gears like helmets

and improving the working environment.

55

Employees to be given study leaves in order to be able to

improve their competence in terms of knowledge, skills and

attitude especially for the certificate holders

Summary.

Chapter four discusses the findings, gives the

interpretation of the findings on employee incentives,

factors that affect employee performance and opinions from

respondents on strategies that can motivate employees to

increase on their productivity.

The next chapter looks at the summary of findings,

conclusion and recommendations as well as areas of further

research.

56

CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS.

5.0 Introduction

This chapter contains summary of the main findings of the study

discussed in the preceeding chapter, gives conclusions as well as

recommendations based on the findings.

5.1 Summary

The age of the respondents shows that most of them are not close

to the standard retirement age of 55 years put by the

organization. Another observation is that there is a gender

imbalance which will be blamed on the selection process. The

number of men exceeds that of females.

The majority of K.P.A employees have eligible skills to perform

their task. This is evident from their educational levels. The

staff included a majority number of diploma holders and twenty of

the respondents are degree holders, therefore the administration

should be able to involve them in the decision making process and

recognise their contributions and this will boost their morale.

57

Employees should also be given work study leaves where they will

be able to improve their competences. This mainly applies to

those with certificate level who will need further training to

handle technical responsibilities.

Incentives are given to employees both financial and non-

financial which shows that the administration has identified

incentives as a catalyst to better employee performance. The

availability of promotion opportunities is also an encouragement

to the staff. Recognition is also important because it makes an

employee to have self esteem. Employees identify themselves with

the organisation and personalise the vision and the company

motto.

Apart from incentive scheme as a factor that affects employee

performance, the researcher was able to get other factors like:

The managerial standards, employee commitment, technical

training, tools and equipment and the working environment.

The employees were also able to contribute on what can be done to

improve their performance.

58

o The company can organize seminars and workshops for

employees to enhance their performance through gaining

new skills thus improving their competences.

o Regular monitoring and closely looking at employee’s

commitment will enhance performance since employees

will be in a position of reviewing their previous

performances.

o The managers and supervisors should be role models

thorough the display of descent and participative

leadership style.

o The management should have proper coordination and

communication within the organization.

o During the recruitment process, the organization should

employ more skilled staff.

o Companies should increase employee incentives to boost

their morale.

o Improve on the spirit teamwork.

o The government should invest on human capital by

organizing training schedules to employees who would

like to upgrade their skills.

59

o The management should provide protective gears like

helmets and improving the working environment.

o Employees to be given study leaves in order to be able

to improve their competence in terms of knowledge,

skills and attitude especially for the certificate

holders.

5.3Recommendation

The researcher suggested the following recommendation:

The administration should adopt best fit practices that emphasize

the importance of competitive incentives schemes financial and

non- financial.

To be effective, these schemes must be tailored to meet the needs

of the employees thus satisfying their interests.

5.4 Suggested Areas of Further Study.

The researcher suggests that an extensive investigation to be

conducted specifically on the impact of mandated incentive

schemes on employee performance.

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It should be of concern to the researchers to find out whether

these guaranteed elements of remuneration indeed stimulate

employee effort to improve the performance of employee and meet

company goals.

Another area of interest for researchers should be finding out

the impact of incentive schemes on employee satisfaction within

an organisation.

The researchers will also investigate on government efforts to

implement suggested strategies to improve employee performance.

References

Armstrong M (2003) Human Resource Practice, 2nd edition.

Armstrong Michael 2007 “Handbook of Employee Reward 2nd edition Kogan

page London, Using individual reward and recognition

strategies to drive organizational success, Leadership and

organizational development.

61

Balunywa J.W (2003), Handbook of Business Management 4th

Edition, the business publishing group.

Cole , A.G (2002), Personnel Management.

David, R.(2002) Improving employee performance: moving beyond

traditional HRM.

Elaine F (2008), High commitment performance management.

John G. F (2008) How to Run Successful Employee Incentive

Schemes Kogan page London

Masi, D. A., Jacobson, J. M., & McCune, K. J. (2004, November).

Managers and human resource professionals’ opinions regarding

employee assistance and work/life programs.

Michael A (2009) “Handbook of Human Management,” 11th edition, Hall

Newstrom J. W (2002), “Making Work Fun, an important role for managers,” SAM

Advanced Management Journal, Vol 67 No 1, pp-21

Newstrom, J.W and Keith, D. (2002), “Organizational Behaviour; Human

Behaviour at work 9th edition.

Rebecca M (2010), www. businessweek.com

62

Robert L.M &John H. J(2008) Human Resource Management: Essential

Perspectives

Robert L.M & John H.J (2007) Human Resource Management.

Robert, K. (2010) Organizational Behaviour, Improving Job Performance with

Goals, Feedback, Rewards, and Positive Reinforcement 9th edition MCGRRAW

HILL.

Schuler,B.J (2007), Small steps, Big Reward, Quality improvement through

pilot groups.

Tech republic (2010), Five tips for managing employees.

www.techrepublic.com

John G. F (2009) Leadership & Organization Development Journal

vo 30 iss no 07 Emerald Group Publishing Limited

63

MAKERERE UNIVERSITY BUSINESS SCHOOL

QUESTIONAIRE

Dear Respondent,

I am a student at MAKERERE UNIVERSITY BUSINESS SCHOOL carrying out a research study on Employee incentives and employee performance. Your answers to the followingquestions will be very helpful in this study and will be highly appreciated. The information given will be used purely for academic purpose and will be treated with utmost confidentiality. Thanks for your cooperation.

SECTION A

Background of information

Please provide the following about yourself by the appropriate box.

1.What is your gender? Male Female

2. What is your age group? 18-25 26-33 34-4142-49 50-57

Others specify………64

3. What is your highest level of education achieved?

O -Level A - Level Certificate Diploma Degree

Masters PHD

4. What is your position held in the organization? Manager support staffOthers specify……………………….

5. What is your work experience?

1-4 years 5-8 years 9-12years 13 and above

Others specify…………………

SECTION B

The questions below seek your opinions about this organization. Please tick the most appropriate answer using a scale of 1-5 where

1-strongly Agree 2-Agree 3- Not sure 4-Disagree 5-Strongly disagree

PART I: Classification of employee incentives

This section investigates the various components that entail employee incentives.

1 2 3 4 5

1. Employee incentives are available in the organization.

2. The organization makes use of

65

financial incentives.3. The organization provides non-

financial incentives.4 The organization pays good and timely

incentives.

5 The organization regularly reviews theincentive system

PART II: FACTORS INFLUENCING EMPLOYEE PERFORMANCE

This section investigates the factors that influence employee performance.

1 2 3 4 5

1.The organization regularly monitors andawards best performer.

2. The organization provides learning andtraining to improve employee skills

3. The organization provides protective gears and good working environment for employees.

4 The organization provides the right andadequate tools and equipment

5 The organization provides relevant managerial styles

PART III: RELATIONSHIP BETWEEN EMPLOYEE INCENTIVES AND EMPLOYEE PERFORMANCE

66

This section shows the relationship between employee incentives and employee performance.

1 2 3 4 5

1.

The incentives offered stimulate employee performance.

2.

The organization rewards best performers.

PART IV: STRATEGIES TO IMPROVE EMPLOYEE PERFORMANCE.

Please use the spaces provided to give your own opinions.

List the strategies you would recommend K.P.A to use soas to improve the performance of employees.

i …………………………………………………………………………………….

ii .……………………………………………………………………………………

iii .…………………………………………………………………………………...

iv. …………………………………………………………………………………...

v. ……………………………………………………………………………………

iv. …………………………………………………………………………………..

Thank you for your cooperation.

67

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