Effect Of Compensation On Employee Job Satisfaction In Private Hospitals In Nairobi City County, Kenya

Abstract

The issue of healthcare workers striking has been the order of the day for many years in Kenya. Employees in private hospitals have raised complaints on financial and non-financial compensation. Interestingly, compensation demanded by healthcare workers are not only financial, but also non-financial incentives, such as on the job training to boost their efficiency and productivity. Despite the demands raised by employees in private hospitals, the same has not been effectively articulated. Thus, this study was designed to establish the effect of compensation practices on job satisfaction in private hospitals in Nairobi County. The specific objectives of the study were to: ascertain the effect of direct compensation, find out the effect of indirect compensation on employee’s job satisfaction, establish the effect of non-financial compensation on employee’s job satisfaction, and investigate the effect of competency-based pay compensation on employee’s job satisfaction. The study applied the theory of behavioral reinforcement, equity theory and agency theory to draw theoretical constructs that underlined the variables of the study. A descriptive survey research design was applied in this study. The target population comprised 566 private hospitals in Nairobi City County, where one Human Resource Officer from each hospital was targeted, which totaled 566 Human resource personnel as the target of population. The sample selection was done through Krejcie and Morgan table which yielded a sample size of 226 respondents. Purposive sampling was adopted to select the sample size. Structured questionnaires were applied in data collection since the study solicited quantitative data. Descriptive (mean, frequency and standard deviation) and inferential (correlation and linear regression) statistics were generated using SPSS version 24. Analysis of the collected revealed that all the predictor variables (competence-based pay, direct compensation, non-financial compensation, indirect compensation) were positively and significantly associated with employee job satisfaction in private hospitals (p<.05). This study recommends the need for organizations to offer competitive salaries and remuneration that is consistent with the qualifications of the employees. The study recommends the need for organizations to meet the financial needs of their employees in timely manner offer trainings and educational opportunities to the employees as way to upscale their job satisfaction.