A survey of the extent to which firms listed in the Nairobi stock exchange link reward to performance

Abstract

This project examines the extent to which firms listed in the Nairobi Stock Exchange have linked performance to rewards. Performance is the record of outcomes achieved while rewards refer to all forms of pay going to employees arising out of their employment. The concept of linking rewards to performance has grown out of the realization that a more continuous and integrated approach is needed to manage and reward performance, and it provides a framework in which managers can support their teams rather than dictate to them. This study employs a descriptive design method, with the population of the study being companies listed in the Nairobi Stock Exchange. The sampling design employed included the stratified sampling technique. The study used primary data, collected through a questionnaire. The questionnaire aimed at collecting information on whether there had been any linkage between the performance of employees and/or work units and rewards. The findings of the result suggest that most firms do conduct performance appraisals, and that there is a linkage between performance and rewards. 42% of organizations said that performance appraisals helped in decision making in relation to compensation.