Perceived relationship between reward management practices and employee retention in insurance companies in Kenya

Abstract

Reward management practices and employee retention are important components of human resource management practices. People are rewarded financially for the job they are in and may receive additional rewards related to the level of their performance, competence or their service in the job. They can also receive non-financial rewards such as recognition, praise or the opportunity to develop and learn new skills. This research was primarily carried out to establish the relationship between reward management practices and employees retention in Insurance Companies in Kenya. Descriptive survey design was used to demonstrate the relationship between variables. Primary data was collected through the use of a structured questionnaire by use of a Likert Scale. Data was analyzed using descriptive statistics, which comprised of frequencies, percentages, mean and standard deviation. The components explored were recognition of employee contribution to the organization, cash bonuses offered, communication of the reward policy, career advancement opportunities, work life balance, skills development opportunity, autonomy with which employees carry out assignments, benefits offered in the organization, financial assistance, personal needs and entitlements, personal security, pension scheme offered, share ownership offered, allowances and other benefits. The findings of the study revealed that offering employees‟ performance based pay and recognizing their contribution to the insurance company greatly influenced their retention. Share ownership and pension scheme offered to employees in Insurance Companies in Kenya were found to have a moderate effect on employee retention while allowances and other benefits (company car, car loan, petrol, mileage) were found to have little effect on employee retention. However, from the findings other reward management practices components explored had a considerable effect on employee retention in Insurance Companies in Kenya. The study concluded that there is a significant relationship between reward management practices and employee retention in Insurance Companies in Kenya. The study recommended that Insurance Companies in Kenya need to improve on their reward management practices in their employee management strategies to enhance employee retention.