Extent of use of performance based pay in commercial banks in Kenya

Abstract

Performance based pay among commercial banks is relatively new and most of the banks have been advised to use it to reward high achievers.

The purpose of this study is to investigate the extent of use of performance based pay in commercial banks in Kenya. Existing literature shows that once implemented performance based pay helps to foster team work and contribute to overall improvement in productivity of staff.

The research design used in this study was a descriptive research design and the population consisted of 44 commercial banks. The respondents will be the Human resource managers in the banks. The data collection method used was a structured Questionnaire that was divided into three parts. The data was analyzed using tables.

The findings from the study showed that 50% of the banks started using the performance based pay after reorganizations in their systems and structures. All the commercial banks use one form of performance based payor another and whereas multinationals have standards set from their head office, the local banks decide which form of performance based pay suits their operations.