Asian Journal of Business and Management (ISSN: 2321 - 2802)

Volume 07– Issue 05, October 2019

The Influence of Staff Welfare on Employee Performance at

Public Service Commission in Kenya

Nickson Lumwagi Agusioma1,*, Simon Nyakwara2, Evans Mwiti3

2Doctor of Philosophy Degree in Human Resource Management

Mount Kenya University, Kenya
2Department
of Business Administration
Mount Kenya University, Kenya
3Department
of Business Administration
Mount Kenya University, Kenya
*Corresponding author’s email: nickagush [AT] hotmail.com

_________________________________________________________________________________________________
ABSTRACT---- Employees represents the human capital factor in all organizations and embodies all human abilities
regardless of the intrinsic or learnt qualities, whose worth could be improved by suitable development investments.
Thus, organizations needs to provide more attractive compensation and qualitative packages to enhance the motivation
of the people through incorporation of staff welfare practices. The objective of the study was to determine effect of staff
conflict resolution on employee performance at Public Service Commission in Kenya. The specific objectives were to
establish the influence of retirement benefits, allowances/benefits, compensation and medical insurance on
organization performance the Public Service Commission in Kenya. This research adopted descriptive survey research
design approach. The target population in this study comprised of human resource department, staff welfare/public
relations, and general management in the Public Service Commission in Kenya. The study sample size of 141
respondents were selected. The study selected the respondents using stratified proportionate random sampling
technique. Data was collected mainly by use of semi structured questionnaires. Correlation and regression analysis
were used to achieve the study objectives. The study found that staff welfare was positively and significantly affected
employee performance. Therefore an increase in these factors will result in increased accessibility to increased employee
performance. The study concludes that staff welfare is essential in creating a sense of recognition and satisfaction
among the employees which improves their productivity. It is therefore also concluded that unbiased and competitive
employee welfare framework should be established to evade poor employee turnover. The study recommends the
managers and human resource practitioners to highly prioritize staff welfare as a key strategic practice in the
organizations. Therefore, Human Resource Management is recommended to be undertaken as a tool for ensuring staff
welfare are well addressed. It will help them in understanding the issues that affect the employees and their productivity.

Keywords--- Retirement benefits, Allowances, Compensation, Medical Insurance, Staff Performance, Public Service
Commission in Kenya
_________________________________________________________________________________________________

1. INTRODUCTION
In today’s competitive environment, attracting and retaining skilled personnel depends upon the competitive and
compensation package the company offers. Everyday innovative, attractive compensation packages are luring the personnel
(Theuri, 2017). Employees represents the human capital factor in all organizations and embodies all human abilities
regardless of the intrinsic or learnt qualities, whose worth could be improved by suitable development investments
(Bernardin, 2010). Thus, organization needs to provide more attractive compensation and qualitative packages to enhance
the motivation of the people through incorporation of staff welfare practices.
According to Stone (2012), welfare services are a financial or other assistance offered to an employee or family by an
organization. Employee welfare is a comprehensive term that included various services, benefits and facilities offered to
them by employers. The welfare measure could either be in monetary or non-monetary. Some of the various welfare
services included; allowances, housing, transport, medical insurance, pension schemes, family leave and canteens, sick
days, child care programs, financial assistance, educational. Lack of effective reward systems for compensating the
employees work efforts negatively lowers the level of employees work morale and these impacts negatively on organization
productivity.

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 Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 07– Issue 05, October 2019

In practice, most developed economies such as USA, UK and Canada, over sixty-five percent of their public sector
organizations have succeeded in developing and maintaining organizational performance through strategic application of
various staff welfare practices (Cadalian, 2013). Similarly, in China Korea and Japan over fifty percent of their civil
servant’s exhibit HRM characteristics which greatly influences delivery of quality public services that impacts positively
on countries economic development. While studies on HRM situations in developing economies are limited, efforts for
generalization of empirical evidences from developed countries have been greatly cautioned (Collings, Demirbag, Mellahi,
& Tatoglu, 2013).
In Kenya, the government efforts are aimed at improving the show and the public service sector’s efficiency which was
initiated through Public Sector Reforms in 2007. The economic review completed by the G.O.K (2012) ascertained the
decreased contributions of the employment sector in Kenya to GDP growth besides creating wealth. Poor labour
productivity is a main contributor to the drop in the economy growth and progress of the country. It can be noted that forced
labour drops the productivity although the increased in levels of employment, as per the report by Omollo (2010). This
raises concern as pertains to the low performance levels in the public employment sector.
2. RESEARCH PROBLEM
Human Resource Management is aimed at producing a higher productivity in organizations (Bernardin, 2010). It is a
complete human resource plan that undertakes a critical part in ensuring that the organization succeeds in its planned targets
and goals. Specifically, employee welfare practices set act to increase the productive nature of the organization while
promoting the employees’ conditions (Gemba, 2017). This is because the employees tend to be well motivated when they
need and wants are well catered for which in turn boosts their productivity and high worker’s efficiency in all sectors.
While previous studies adduced evidence interested in the employment of staff welfare plans and their effect on
performance, achieving optimal performance at public service remain a challenge. There is thus an urgent need to evaluate,
review and redesign the human resource function so that there is clarity in its strategic intent and shaping in incorporating
staff welfare measures which necessitated this study.

3. RESEARCH OBJECTIVES
The objective of the study was to determine effect of staff conflict resolution on employee performance at Public Service
Commission in Kenya. The specific objectives were:
i. To establish the influence of retirement benefits on organization performance in the Public Service Commission
in Kenya.
ii. To assess the influence of allowances/benefits on organization performance the Public Service Commission in
Kenya.
iii. To determine the influence of compensation on organization performance in the Public Service Commission in
Kenya.
iv. To evaluate the influence of medical insurance on organization performance the Public Service Commission in
Kenya.
4. THEORETICAL FOUNDATION
4.1 Human Capital Theory
Human Capital Theory was first suggested by Becker, (1993) in explaining the utilization of human capital in economy
progression. It is associated with procuring human resource in various organizations and the maximal productivity
achievement. The recognition of the vital role played by the human capital in organizations has resulted in more firms
investing heavily in this resource. The theory holds that the current challenges brought about by globalization and
advancements in technology may be countered by the use of appropriate human capital in the organizations. As such, the
employees must not only be competent enough but also have the right mindset to perform their delegated duties (Hunjra,
2010).
The theory’s importance is that it enhances the importance of staff welfare practices to ensure efficient HRM practices. In
this regard, improved performance as well as service delivery in the public sector will be achieved by having the appropriate
staff welfare practices. The theory sensitizes that the management in the organizations to highly prioritize welfare of the
employees which will translate to improved performance. Hence proper staff welfare is paramount in attainment of
optimum performance in the Public Service Commission in Nairobi.
4.2 Functional Theory of Labour Welfare
The Functional Theory of Labor Welfare was proposed as way of understanding how efficiency and productivity of labour
may be enhanced by Manju, Mishra, (2007). The theory holds that preserving, securing and development of labour

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Volume 07– Issue 05, October 2019

productivity can be attained through welfare jobs. As such, increased output will be obtained from the employees if their
immediate family members are well catered for. This gives the employees a peace of mind for them to fully concentrate on
the tasks that have been delegated to them without any disturbances.
The theory is important as it assists in understanding the characteristics of the contemporary support for labour as reflected
as forced labour. Its proposition is that employee welfare is directly proportional to the employee performance. It works
well if they have same objective of better welfare both employer and employees. The theory is accepted when any labour
force since welfare services move perform. The study therefore seeks to evaluate the influence of employee good on
employees’ agreement in public sector in return performance achievement.
5. EMPIRICAL LITERATURE
Aldaibat, and Irtaimeh, (2012) evaluated the correlation on the beliefs of senior employees concerning training benefits
and the staffs’ organizational commitment as assessed by 3-component model of organizational commitment. They affirm
that training benefits that encompass both personal benefit and career benefit correlate significantly to organizational
commitment components of, affective, instrumental and normative. In respect to this it was established that involvement
in training assist employees interact, improve their productivity, personal growth as well as develop career wise, opening
new opportunities of following new careers.
Agus (2005) viewed that HR policies, leadership commitment, training and development and other aspects of talent are
critical issues, which are important aspects to provide employees with the necessary knowledge and skills to enable them
to cope with problem solving. However, training focused on broadening employees’ knowledge and skills can represent
opportunities for individual growth and development and result in advantageous outcomes such as more proficient team-
related skills and increased workforce flexibility.
According to Ngeno (2014), upgrading employees’ skills and knowledge, puts them in a better position to produce high-
quality products and services in the most costeffective way, they adapted to change and it increased their contribution to
their work through product or process innovation. Employees were prepared for increased responsibilities, saw value in
strategic training as it helped them progress in their careers and enhanced their capacity for continuous improvement.
According to Okumbe (2010), an organization that was genuinely interested in the welfare of its workers was concerned
about creating a positive work environment where individuals recognised that they were valued, it then boosted their
performance. Medical insurance coverage was one of the welfare services that enhanced employee performance. Due to
the high cost of hospitalization, surgical and maternity care, it had become necessary that employees be cushioned against
these costs putting in place Medical insurance. Employees with medical insurance were more likely to be satisfied with
their work and with the employer which then eventually translates into effective performance.
Mitchell (2011) did a study on medical services and found that reduction in absenteeism is highly related to good health.
Mitchell’s study revealed that due to the high cost of hospitalization, surgical and maternity care, it has been found
necessary that employees are cushioned against these costs by putting in place a Medical Insurance plan. This is an
important benefit that helps greatly to retain employees in an organization. Medical Cover includes general medical care,
optical care, drug abuse, alcoholism and mental illness. Employers who provide health insurance is valuable for a number
of reasons. Thus, employees with medical insurance are more likely to be satisfied their place of work.
6. CONCEPTUAL FRAMEWORK
The study independent variable was staff welfare measures namely Retirement benefits, Allowances/benefits,
Compensation and Medical insurance while the dependent variable was employee performance. The conceptual framework
is presented in Figure 1.

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 Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 07– Issue 05, October 2019

Independent Variables

Medical insurance
Dependent Variable

Organization Performance
Compensation
 Service delivery
 Internal Business
Allowances/benefits Processes
 Employee satisfaction
Retirement Benefits  Employee motivation

Figure 1: Conceptual Framework

7. RESEARCH METHODOLOGY
The research adopted descriptive survey research design. The target population comprised of the managers from human
resource department, staff welfare/public relations, and general management in the Public Service Commission in Kenya.
The study sampled a size of 141 respondents. The study selected the respondents using stratified proportionate random
sampling technique. Data collected was collected by use of semi structured questionnaires. Initial descriptive analysis was
performed using SPSS. Regression analysis was used to test the study objectives.
8. RESEARCH FINDINGS
Employee Medical Retirement
Performance Compensation Allowances/benefits insurance benefits
Pearson
Compensation Correlation .256** 1
Sig. (2-tailed) 0.003
N 134 134
Pearson
Allowances/benefits Correlation .176* .227** 1
Sig. (2-tailed) 0.042 0.008
N 134 134 134
Pearson
Medical insurance Correlation .276** .486** .248** 1 .340**
Sig. (2-tailed) 0.001 0 0.004 0.000
N 134 134 134 134 134
Pearson
Retirement benefits Correlation 0.116 .261** 0.035 .340** 1
Sig. (2-tailed) 0.182 0.002 0.688 0.000
N 134 134 134 134 134
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

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8.1 Correlation Analysis

Pearson's coefficient of correlation was used in determining the relationship between the study variables. Table 1 gives the
relationship between different sets of variables that was obtained.
Table 1 Correlation Analysis
The correlation results indicate that compensation had a Pearson correlation of 0.256 and a p-value of 0.003,
Allowances/benefits had Pearson correlation of 0.176 and a p-value of 0.042, medical insurance had Pearson correlation
of 0.276 and a p-value of 0.001 while retirement benefits had Pearson correlation of 0.116 and a p-value of 0.182. The
positive coefficient indicates a positive correlation between Retirement benefits, Allowances/benefits, Compensation,
Medical insurance and employee performance. Therefore an increase in these factors will result in increased accessibility
to increased employee performance. The p-value further indicated that all the variables except Retirement benefits had
significant relationships at 95% confidence level (p<0.05). Therefore, these factors of staff welfare significantly influenced
employee performance at Public Service Commission in Kenya.
8.2 Regression Analysis
Regression analysis was used to evaluate the contribution of each independent variable in explaining the dependent
variable. The model summary findings are presented in Table 2.
Table 2 Regression Analysis

Model Summary
Adjusted R
R R Square Square Std. Error of the Estimate
.323a 0.105 0.077 1.01983
ANOVA(b)
Mean
Sum of Squares Df Square F Sig.
Regression 15.679 4 3.92 3.769 .006a
Residual 134.166 129 1.04
Total 149.845 133
Coefficients(a)
Unstandardized Coefficients Standardized Coefficients
B Std. Error Beta t Sig.
(Constant) 2.049 0.387 5.298 0.000
Compensation 0.107 0.072 0.144 1.485 0.14
Allowances/benefits 0.097 0.085 0.099 1.143 0.255
Medical insurance 0.136 0.078 0.176 1.761 0.081
Retirement benefits 0.012 0.069 0.015 0.167 0.868
a. Predictors: (Constant), Retirement benefits, Allowances/benefits, Compensation, Medical insurance
b. Dependent Variable: Employee Performance
The regression results indicate that staff welfare has a significant positive influence on employee performance (R=0.323,
R2= 0.105, p<0.077). This meant staff welfare improves employee performance. The positive influence is brought about
by the employee’s concerns being addressed hence they are feel valued and appreciated. Kimuyu (2012) also did research
on the role of HRM practices in organizational commitment in manufacturing companies in Kenya. They found that the
use and effective of HRM practices in the public sector in Kenya improves service delivery. This relates to Bowen (2010)
did a study that found one of the major objectives of initiating staff welfare programs in organizations to be to improve the
living standards of employees.
9. CONCLUSION
The objective of the study was to determine effect of staff conflict resolution on employee performance at Public Service
Commission in Kenya. The specific objectives were to establish the influence of retirement benefits, allowances/benefits,
compensation and medical insurance on organization performance the Public Service Commission in Kenya.
The study concludes that staff welfare is essential in creating a sense of recognition and satisfaction among the employees
which improves their productivity. It is therefore concluded that unbiased and competitive employee welfare framework
should be established to evade poor employee turnover as supported by Collings et al. (2013). This is essential in ensuring
that all the employees grievances and demands are well catered for.

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10. RECOMMENDATIONS
The study findings and reviewed literature established that Staff Welfare has a positive and significant influence on the
performance at Public Service Commission. The study recommends the managers and human resource practitioners to
highly prioritize staff welfare as a key strategic practice in the organizations. Therefore, Human Resource Management is
recommended to be undertaken as a tool for ensuring staff welfare are well addressed. It will help them in understanding
the issues that affect the employees and their productivity. It is therefore crucial for organizations to adopt Human Resource
Management practices that boost the operations. This is by ensuring that all human resource personnel and administrative
managers at the organizations are trained on Human Resource Management skills whereas the HR department plays a
strategic role as in training and implementing diversity policies and practices.

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