A Survey of administration of employee compensation schemes among Commercial Banks in Kenya

Abstract

Banks are constantly faced with the challenge of acquiring and maintaining the most competent employees available in the labour market in order to achieve its goals and hence gain competitive advantage within the banking industry. To achieve this, the banks have to attract and sustain credilble empioyees and this can only be attained by having an adequate compensation package. The study reported here is a survey of administration of employee compensation schemes among commercial banks in Kenya. The study explored the ways in which banks administer their compensation schemes. It also sought to find out the factors which influences the bank in choosing the type of scheme. Questionnaires were issued to representatives of the human resources manager in the 43 banks. The data collected was coded and tabulated to indicate the means of the responses concerning the weights given to the factors which influence the choice of administration scheme. An analysis of the data indicated that the dominant factors include: cost of scheme, number of employees, size of the bank and technology. The study also revealed that one way of getting the staff to stay longer and work harder is by making them 'part owners'. This can be achieved by involving them in 'compensation' decision making and by having articulated profit sharing techniques.