Effect of Employee Empowerment on Performance of Insurance Companies in Kenya

Abstract

Employee empowerment is based on the perception that it is possible to enhance organizational performance through the available workforce provided they are vested with due authority, freedom, information, skills and incentives by the company. The study aimed at assessing the effect of employee empowerment on performance of insurance companies in Kenya. A descriptive cross sectional research design was used. The population comprised all the 55 licensed insurance companies in Kenya. Collection of first hand data was done aided by a questionnaire. Data was analyzed using multiple regression analysis. The results of regression analysis indicated a strong positive relationship between empowerment practices and organization performance (R=0.803). The beta coefficient for job autonomy was positive but insignificant (β=0.028, t=2.12, p>0.05), effective reward system was observed to have a positive and significant effect on organization performance (β=0.412, t=2.591, p<0.05), the beta coefficient for effective communication was positive but insignificant (β=0.118, t=1.166, p>0.05) while that of employee involvement was positive and significant (β=0.456, t=4.149, p<0.05). The study recommends that Insurance companies should adopt empowerment practices that can enhance their performance. The identified beneficial practices include: effective reward systems, employee involvement, job autonomy and effective communication. The outcomes would act as a point of reference to managers in insurance firms on the need to embrace employee empowerment practices that have valuable effect in achieving high performance