Analysis of Performance Management on Employee Motivation: A case of Kenya Electricity Generating Company Limited

Abstract

Organizational effectiveness depends on the alignment of individual, departmental and organizational strategic objectives. KenGen has made use of a performance management system based on a Balanced Scorecard approach in all its departments. The model that was used to take departmental key performance measures such as quality, speed, cost and morale into account was based on organizational objectives. Whether the process of performance management has been properly utilized and has facilitated management in achieving the company goals within all the departments remains an open question. This represents the main problem of this study: Is performance management at KenGen being properly deployed to lead to employee motivation in order to achieve the company goals and objectives? The main objective that guided this study was to establish the extent of relationship that performance management has on employee motivation at KenGen. While independent variable is performance management, the dependent variables of the study are remuneration, working conditions, and employee recognition. This study employed a descriptive survey design. The population of this study was all the employees of Kenya Electricity Generating Company and who have been with the company for a minimum period of one year. This was to ensure that they understand the company and have gone through a one year cycle of performance contract. This study used both stratified sampling and simple random sampling while the target sample size was 274 employees. A questionnaire was used to gather the required research information. Statistical Package for Social Sciences (SPSS) was used to produce frequencies, descriptive and inferential statistics which were used to derive conclusions and generalizations regarding the population. The study findings indicated that employees of KenGen valued performance management. The results revealed that performance management was a key determinant of remuneration (motivation). The correlation between performance management and remuneration was also found to be strong and positive. Results further revealed that that performance management influenced motivation through working conditions. The findings revealed that the employees were happy about the working conditions and the general working environment at KenGen. The study concluded that performance management was found to be statistically significant in influencing motivation through working conditions, performance management is a key driver to employee motivation at KenGen and remuneration was found to motivate employees at KenGen. It can therefore be concluded that despite the short and quick effect on motivation, working conditions could be used to direct the energies of employees towards the desired company targets, while the management of KenGen should regularly conduct salary reviews with an objective of ensuring equity and justice in pay with an overall objective of inducing motivation in employees.

Key Word: Performance management, Employee motivation at KenGen Company, Kenya