EMPLOYEE COMPENSATION STRATEGIES AND LABOUR TURNOVER IN STAR RATED HOTELS IN NAIROBI CITY COUNTY-KENYA
Purpose of the Study: The main purpose of the study was to establish the relationship between employee compensation and employee turnover in star rated hotels in Nairobi County in Kenya.
Statement of the Problem: Many studies have found a negative relationship of financial compensation on employee turnover intensions. This impacted negatively in business sustainability due to high costs of training new employees, replacement and separation. By the compensation strategies in the star rated hotels in Nairobi City County, Kenya this study has provided empirical significant data on the role of compensation strategy’s play in determining the Turnover of employees in star rated hotels in Nairobi City County, Kenya.
Methodology: The study applied a multi-stage strategy where the population was divided in to a number of groups from which the sample was drawn from. Descriptive statistics data analysis method was applied to analyse quantitative data using SPSS version 25 and quantitative method. Completed questionnaire was verified, coded and summarized using frequencies, table and bar chart. Chi-squire was applied to establish relationships between employee compensation and employee turnover.
Result: The findings were; that majority of employees in the star rated hotels were between the age of 31- 40 and had Diploma level of education. Although base pay and commissions were the most popular compensation alternatives, they were not significantly related to employee turnover, whereas indirect and non-financial compensation were significantly associated with employee turnover with 42.2% indicating that they would likely leave.
Conclusion: The results of this study indicate that compensation has an influence on employee intention to leave. This means that good compensation can improve employee motivation and make them stay. From this study it can be argued that if employees in the Star rated hotels in Nairobi County, Kenya are compensated well they will be encouraged, confident and will have positive feelings towards their job and this would make them stay.
Recommendation: The study recommends that the Hotels under study apart from base pay and commissions should also provide their employees with special employee retention packages such as retirement benefits, insurance cover, medical allowance, travel, and meal and recognition allowances. In addition, periodic review of employee benefits based on the prevailing market dynamics.
Keywords: Employee, Compensation, strategies, Labour, Turnover, Star rated, Hotel
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