Intellectual Capital as an Antecedent to Employee Performance in Commercial Banks in Eldoret Town, Kenya.

Abstract

The purpose of this study was to establish intellectual capital as an antecedent to employee performance among commercial banks in Eldoret town. The specific objectives of the study include: human capital, relational capital, knowledge capital and structural capital on employee performance. The study targeted a total of 315 staff from the commercial banks in Eldoret town, Kenya. The study used simple random sampling in which sample size calculation was utilized to calculate a sample size of 210 respondents. The research instrument used was a 5 point likert scale questionnaire and in data collection, questionnaires were used as instruments. To determine the reliability of the instruments the cronbach’s coefficient alpha was used to test the reliability. The study used descriptive and inferential analysis techniques to analyze data and a computer package Statistical Package for Social Sciences (SPSS) version 17.0 was used. The study presented the findings in form of tables, multiple regression analysis and correlation. The findings showed that human capital had significantly positive effect on employee performance (?₁ = 0.317, p< 0.05). The study also indicated that knowledge capital had significant effect on employee performance (?₂ = 0.331, p<0.05). Similarly, rational intellectual capital (?₃ = 0.111, p<0.05) and structural intellectual capital (?₄ = 0.194, p<0.05) had significantly positive effect on employee performance. Therefore, employees should be encouraged to share ideas and learn from each other since this will enhance performance. Management support should be enhanced and resources should be allocated to knowledge management. Also, firms should disseminate and distribute knowledge through the firm levels and have systems which allow easy access to information and procedures that support innovation which lead to improvement in employee performance.

Key Words: Intellectual Capital, Employee Performance, Human Capital, Knowledge Capital, Rational Capital and Structural Capital