Influence of Performance Management and Compensation Practices on Employee Retention in Research Institutes in Kenya

Abstract

This study sought to establish the influence of employee performance management and compensation on employee retention and the moderating effect of management style on employee retention in research institutes in Kenya. This study was informed by the dynamic and competitive environment in which research institutes in Kenya operate, the fact that talent and technical skills are in short supply and the difficulty in retaining valued employees. Data was collected from 236 employees in specific categories identified in 5 public research institutes in Kenya formed under the Science, Technology and Innovation Act (repealed), 2013 using self-administered questionnaires. Data was analyzed using using Predictive Analytics Software (PASW) version 23 formerly Statistical package for social sciences (SPSS) to generate descriptive and inferential statistics. The study found that performance management and compensation have a significant positive influence on employee retention and management style had a significant moderating effect on the relationship between the selected HRM practices in research institutes in Kenya at p≤.05 level of significance. The study recommends active participation of relevant actors and provision of prompt feedback as regards to performance management and the need to undertake periodic salary review, ensuring external equity of salaries and provision of competitive benefit packages in research institutes in Kenya.

Keywords: Performance management, compensation, Management style and employee retention.