Compensation practices for management staff in insurance Companies in Kenya.

Abstract

The major purposes of this study were to establish the compensation practices for management staff among the insurance companies in Kenya, and secondly to determine the factors that influence the compensation practices for management staff in insurance companies in Kenya. The research was a census survey. Primary data was collected using a semi -structured questionnaire, which was answered by the human resources managers of 26 insurance companies out of 44. Data was analyzed using descriptive statistics i.e. percentages and distribution tables under the procedures in version 10 of the statistical package of social sciences (SPSS) to obtain values for further analysis to establishing the magnitude and the nature of relationship among the various variables. One, reward was found to be a tool for motivating and increasing performance of management employees in the insurance companies, where the current compensation scheme offered to management is both fixed and variable and the future compensation scheme was a variable salary, which depends on one's performance or output. Secondly, the insurance companies determine the compensation rates for their management team as opposed to the legislation. Thirdly, the metrics used when rewarding management team's performance is the fiscal targets as opposed to cost reduction and productivity gains. Fourthly, the major objective the current compensation scheme is to motivate high- '.. potential management employees but the major constraint is cost control. The two major offers given to management to attract and retain good people were medical subsidies benefits and retirement benefits. Lastly, the major factors that are used in the determination of management compensation levels, the supply situation in relation to critical skills and the pay levels were the major factors under consideration, the power of organized labour and the influence of the business cycle, the level of education, seniority, experience and qualifications. It is also recommended that all managers and employees should be champions of an HRM based policies and philosophy in the company; a pay scheme based on past performance and management should be offered pay as an inducement for future performance.