Thesis:

Influence of reward strategies on employee performance in Deposit taking saccos in Bomet county, Kenya

In an increasingly competitive and evolving work environment, organizations are under growing pressure to find innovative ways to boost employee productivity and enhance overall performance. Among the most effective tools for achieving this is a well-structured reward system. Reward strategies, central to Human Resource Management (HRM) play a pivotal role in shaping employee motivation, engagement, and job performance. This study sought to examine the influence of reward strategies on employee performance in Deposit Taking (DT) Savings and Credit Cooperative Societies (SACCOs) in Bomet County, Kenya. The main objective of the study was to investigate how different reward components impact employee performance. Specifically, the study aimed to: Establish the influence of pay rise on employee performance, Determine the influence of bonus schemes on employee performance, and Assess the influence of employee recognition on performance. The research was underpinned by three theoretical frameworks: Expectancy Theory, which emphasizes the relationship between effort, performance, and rewards; Equity Theory, which focuses on fairness in reward distribution; and Herzberg’s Two-Factor Theory, which distinguishes between motivators and hygiene factors in the workplace. A cross-sectional research design was employed to collect data from the target population at a single point in time. The population comprised employees from various levels (senior, middle, and junior) within DT SACCOs operating in Bomet County. A stratified random sampling method was used to select 56 participants, representing 40% of the total workforce. Primary data was gathered using a structured questionnaire consisting of both closed and open-ended questions. The instrument was tested for reliability and validity to ensure the credibility and consistency of results. The data were analyzed and respondent opinions summarized using descriptive statistics, including means, standard deviations, frequencies, and percentages. In addition, Multiple regression analysis was conducted to test the relationships between the independent variables (pay rise, bonus, recognition) and the dependent variable (employee performance). The results revealed that all three reward strategies had a statistically significant and positive influence on employee performance. Pay rise and bonus schemes were particularly the strongest predictors, while recognition, though slightly influential, still played an important role in enhancing motivation and job satisfaction. The findings underscore the need for organizations, particularly SACCOs, to adopt reward strategies that are fair, performance-based, and transparent. This study adds to the existing literature by offering context-specific evidence on the relationship between reward strategies and employee performance within Kenya's SACCO sector. It also offers practical implications for HR practitioners and policy makers, suggesting that effective reward strategies should be integrated into overall performance management frameworks to maximize employee output and support institutional growth. The findings will help guide the development of more strategic compensation policies aimed at increasing motivation, reducing turnover and improving organizational effectiveness.