Factors Influencing Employee Commitment: A Case of Kengen

A Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The general objective of this study was to identify the factors that influence employee commitment at Kenya Electricity Generating Company (KenGen). The study was guided by three specific objectives: to determine the extent to which compensation influences employee commitment; to establish the extent to which career growth influences employee commitment and to determine the extent to which the work environment affects employee commitment at KenGen. For the research methodology, the study used the descriptive research design. The population of the study was 2,300 employees of KenGen. Stratified random sampling technique was used to determine the sample size for the study. A sample size of 96 employees was obtained from the population. A structured questionnaire was used to collect primary data. Once collected, the questionnaires were coded, entered and analyzed using Statistical Package for Social Sciences (SPSS) and MS Excel. The data was interpreted using descriptive statistics through frequencies, percentages and correlation analysis. The research findings were presented in form of tables and figures. On the compensation factors that influence employee commitment, majority of the respondents indicated that equitable compensation is vital for commitment. Most of the respondents agreed that compensation at KenGen is attractive. Majority of the respondents were of the opinion that they were recognized for their jobs and that the reward systems are effective. In addition, the respondents also agreed that the benefits and pension contribution rates were adequate. Pay, on the other hand, did not significantly influence employee commitment. The major findings on the career growth factors that influence employee commitment showed that majority of the respondents indicated that skills’ training plays a key role in commitment. Majority of the respondents further indicated that opportunities for career growth/job advancement enhanced their commitment to the organization. The study finding on work environment factors that influence employee commitment revealed that communication is critical in the enhancement of commitment. In addition, the respondents agreed that they were recognized for the work they do, are allowed to give input for decision making and are trusted and allowed some independence to carry out their work. The study concluded that compensation, career growth and work environment have a significant influence on employee commitment. With regards to compensation factors that influence employee commitment, the study concluded that there was a strong relationship between employee commitment and equitable compensation. It also concluded that pay has no significant influence on employee commitment. The conclusions from the factors on career growth were that skills training and job advancement had a strong positive relationship with employee commitment. On the work environment factors that influence employee commitment, communication was found to have a strong relationship with commitment. The recommendations from the research were that although KenGen has done well on the factors in the study, there is need for the organization to optimize provision of compensation and benefits by having employees decide on suitable and useful compensation and benefits while at the same time getting rid of those that are no longer relevant. On career growth, the organization should come up with a comprehensive career advancement program and equitable promotion procedures. Training should be aligned to employee career needs and goals while at the same time focus on interventions linked to organizational goals, acquisition of new skills and improvement of performance standards. Under work environment factors, communication was found to be vital and therefore KenGen should invest in communication channels/medium as well as embrace technological advancement relevant in today’s business environment