European Journal of Business and Management www.iiste.

org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

Effects of Remuneration System on Organizational Performance

of Teachers Service Commission, Kenya
Hannah Wanjiru Muchai* Elizabeth Nambuswa Makokha Prof. Gregory Namusonge Prof.
School of Human Resource Development, Department of Entrepreneurship and Procurement.Jomo
Kenyatta University of Agriculture and Technology, P.O. Box 62000 - 00200, Nairobi Kenya

Abstract
Remuneration systems provided in an organization should aim at motivating, attracting and retaining employees
in an organization to enhance better performance, However in many public organizations in Kenya, remuneration
systems continues to be a major problem resulting to divined organizational performance. The general objective
of the study was to establish the effects of remuneration system on organizational performance in public
organizations with reference to Teachers Service Commission. The study specifically the effects of employees’
turnover on organizational performance in Teachers Service Commission. The study applied a descriptive research
design and the target population was 1,500 employees of Teachers Service Commission (TSC) headquarters in
Nairobi with a sample size of 316 respondents. The main data collection instruments were questionnaires and a
pilot study was carried out to test the reliability and validity of the questionnaires. Descriptive statistics data
analysis method was applied to analyze data aided by Statistical Package for Social Sciences (SPSS) to compute
responses frequencies, percentage mean and standard deviation results. Finally Multiple Linear Regression model
was employed to establish the significance of the independent variables on the dependent variable. The findings
were presented using tables. The study findings thus showed that employees employee’s turnover affected the
organizational performance. The study found out that employees that are highly contented with their work;
employees that are highly motivated; regular review of reward systems; employees commitment and conducive
working conditions affected organizational performance in the organization. The study drew conclusions that the
effects of remuneration system that affected organizational performance in public organizations included;
employee’s turnover. The study recommended that the organization management should review and increase the
employee’s remuneration and rewards and in addition provide more benefits to the employees. Good working
environment should also be provided and proper working conditions should be provided to all employees. The
organization management should offer competitive remuneration packages in order to encourage employees not
to leave the organization on basis of remuneration, employees work life balance should be well enhanced, exit
interviews should be frequently conducted in the organizations to determine the causes of turnover and to provide
direction on the nature of employee retention strategies that should be employed. The management should improve
on employee job tasks allocation in order to ensure that employees accomplish set targets on time and work
assignments should be effectively allocated.
Keywords: Employee Turnover, Remuneration, Performance

1.0 Introduction
Effective remuneration systems refer to the method used to reward or compensate employees for their work and
services rendered to an organization. Remuneration systems should provide basic attraction to employees to
perform job efficiently and effectively. Salaries affect the employees’ productivity and work performance. Thus
the amount and method of remuneration are very important for both management and employees (Armstrong,
2008).
Organizational performance comprises the actual output or results of an organization measured against its
intended outputs (goals and objectives). Organizational performance comprises of three specific areas of
organization outcomes: Financial performance i.e. profits, return on assets and return on investment, Product
market performance which is sales and market share, shareholder return which is total shareholder return,
economic value added. Thus, organizational performance is the most important measure to evaluate organization
goals, their actions, and environments (Armstrong, 2008 & 2009).
Globally, the two main types of employee remuneration systems applied in the organization are time rate and
piece rate systems. Under time rate system, remuneration is directly linked with the time spent or devoted by an
employee on the job. The employees are paid a fixed amount hourly, daily, weekly or monthly irrespective of their
output. It is a very simple method of remuneration which leads to minimum wastage of resources and minimal
chances of accidents. Time Rate method leads to quality output and is very beneficial to new employees as they
learn their work without any reduction in their salaries. This method encourages employees’ unity as employees
of a particular cadre that get equal salaries (Locke, 2008).
Piece rate method is a compensation system in which employees are paid on the basis of units or pieces
produced by an employee regardless of time taken. In this system emphasis is more on quantity output rather than
quality output. There is less supervision required under this method and hence per unit cost of production is low.

132
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

This system improves the morale of the employees as the salaries are directly related with their work efforts
(Furnham, 2009).
In many organizations worldwide, remuneration package consists of a range of payment methods and
accompanying benefits which can be used as motivators by modern companies and are all part of the human
resource management philosophy prevalent in many organizations. In UK, employees that work for modern
companies and other organizations receive a range of money based and other rewards ranging from discounts on
company products, to subsidized company pension schemes (Shields, 2007).
Many firms in the USA fail to measure the remuneration given to employees since compensation is a complex
and often confusing topic. Although compensation costs comprise, on average, 65% to 70% of total costs in the
US economy and are likewise substantial elsewhere, most managers are not sure of the likely consequences of
spending either more, or less on employees or of paying employees in different ways, however, good employees
remuneration systems significantly affects the performance of many organizations in USA (Armstrong, Brown
and Reilly, 2009).
Meyer (2009) posited that in Europe, organisations remunerates employees informs of basic pay or wages,
basic salary is a fixed periodical payment for non-manual employees usually expressed in annual terms, paid per
month with generally no additions for productivity. Wage refers to payment to manual workers, always calculated
on hourly or piece rates. Traditional pay systems were based on the three factors: the job, maintaining the level of
equality in standard pay among employees in the organization, and paying competitive salaries (Braton & Gold,
2009). Armstrong, (2008), while studying the data of Employee Relations Survey conducted in England, strong
evidence emerged that the use of performance related pay enhances performance outcomes, although this
relationship is influenced by the structure of workplace monitoring environments. In the UK public sector,
employees are paid low rate of salary compared to the private workers and this affects organisation performance
(Yankee Institute for Public Policy, YIPP 2015).
In Germany, effective remuneration systems have been found to contribute towards realisation of increased
organisational performance in many firms. Firms offering good basic pay and higher employees’ wages higher
than the market rate records increased rates of employees’ job satisfaction, have lower employees’ turnover rates,
have most productive employees and have good employees’ relations (Armsotron,2008). In Australia, Shields
(2007) study on employee’s remunerations noted that basic pay is an important part of total pay that is fixed and
mainly time-based, rather than performance-based. In New Zealand, basic pay is the largest fraction of the total
pay for non-executive employees; it also acts as a benchmark for other cash incentives such as profit sharing,
which is expressed as a percentage of basic pay. In competitive markets such in China and Japan, many
organizations pay above the market rates to retain their employees. In India, most employees use basic pay to
compare their job offers instead of using intrinsic rewards and other rewards not captured in the formal
organizational framework.
In Africa, employees’ remuneration has been ranked as major challenge affecting the performance of public
sector organisations. Most public sector organisations have been found to poorly remunerate employees and this
has impacted negatively on the level of employee’s job satisfaction, employee’s relations and productivity which
contributes to declined organisations performance especially in delivery of public services (Hedwiga, 2011). Lack
of effective remuneration systems leads to low basic pay and wages which leads to low employees productivity,
increased staff turnover rates and declined employees morale which negatively affects the overall performance of
many public sector organisations (Ologunde, Asaolu and Elumilad, 2011).
In Ghana, declined levels of employees productivity and high rate of employees turnover have been found to
be influenced by employees dissatisfaction with the employed remuneration systems, increased cases of industrial
strikes have been reported in public sector and this has affected delivery of public services (Hanif,2009). In Nigeria,
lack of effective employees remuneration systems have been blamed for the increased cases of industrial strikes
amongst the public workers in health, education and mining sectors, these have resulted to increases rates of
employees turnover due to job dissatisfaction and employees quest for better paying jobs in other countries
(Oshagbemi, 2010).
In Botswana, good remuneration systems in terms of better employee’s salaries and wages especially in health
and education sector have attracted most skilled immigrants in the country; this has also played a key role in the
performance of the country’s public sector organisations. In South Africa, most organizations employees’
remuneration systems are either basic pay or skilled based pay. Employees use basic pay to compare their job
offers instead of using intrinsic rewards and other rewards not captured in the formal organizational framework up
to including job security (Livingstone, 2009).
In East Africa, employee’s remuneration systems have been a major challenge affecting the performance of
public sector organisations. Findings from a study by Johnson (2010) revealed that majority of the employees in
public sector organisations in Uganda, Kenya and Tanzania were not satisfied with their salaries and this lowered
their work morale and productivity which in turn led to declined organisation performance. In Uganda and Kenya,
lack of many job opportunities and increased rate of educated and qualified workers leads to increased labour

133
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

supply and low labour demand which contributes to low salaries and wages.
In Kenya a significant portion of wage employment is in the public sector. One of the key issues of public
debate and attention in Kenya is the public-private sector wage differentials at a time when the public sector wage
bill has exceeded that of its competitors in the region. According to Kenya Institute for Public Policy Research
and Analysis (KIPPRA, 2003), wage differentials have severe implication on overall productivity in the public
sector and the capacity of the sector to implement policies and reforms. This has resulted in many resigning to join
private sector. Those who opt to work for the government do so most probably because there is security of tenure.
Despite the fact that the Kenyan government have made efforts towards achievements of various goals, the
performance of the workforce is still poor and this could be due to poor remuneration systems applied in the
organizations, whereby the organizations have failed to link the remuneration systems with the skills and abilities
that their employees posses and apply while carrying on their duties. This has demoralized employees leading to
poor performance in many government organizations (Onyancha, 2014). For the past years, the cost of living has
risen and there has been enormous pressure on employers to raise wages and salaries by the rate of inflation and
change the remuneration systems in place so that they can link the systems with employee performance. It is
important for the organization to consider the salary system as a mechanism by which an organization could attract,
motivate and retain its employees in order to enhance its productivity through employees’ performance (Onyancha,
2014).
In many Kenyan government organizations’, the employed remunerations systems remains a major challenge
towards enhancing organizations performance. It has been observed that, remunerations systems employed leads
to low level of employees’ job satisfaction which demotivates most of the staff leading to poor performance,
remuneration system that lead to increased staff turnover rates which affects retention of the most experienced and
skilled workforce, low productivity as a result of poor performance of the employees and poor employer employee
relation that result to industrial strikes (Bula, 2012).
Human capital being the most valuable asset of an organization, they are the ones that determine the success
or failure of organizations' programs and activities. To maintain a hardworking, result oriented workforce,
organizations should put in place remuneration systems that are meant to increase rate of employee retention in
order to reduce employees turnover rates, to enhance good relations between employer and employees, increase
employees productivity, employee job satisfaction to achieve organizational objectives (Livingstone, 2009).
Where remuneration systems are attractive, an organization tend to save cost on recruitment since the
retention rate is very low, employer employee relations is enhanced, employees are very committed with their
work and their productivity is maximized which enables an organization to achieve its objectives (Stuart, 2011).
Teachers Service Commission dates back in the 1950s when the first teachers union in Kenya was formed
which is the Kenya National Union of Teachers (KNUT) in 1957. Thereafter, there was a need for the
establishment of an umbrella body to manage the affairs of all teachers. By then, teachers were employed by;
missionaries, the Central Government which led to differences in remuneration and other terms and conditions of
service. In 1964, The Kenya Education Commission Report recommended the need for the creation of a competent,
respected and contented teaching force. The Teachers Service Commission was therefore established in July 1967
through an Act of Parliament to give teachers one employer and uniform terms and conditions of service. The TSC
mandate was registering, employing, promoting, disciplining and remuneration of teachers (TSC, 2016).
The Headquarters of the Teachers Service Commission in Kenya is situated in Upper Hill in Nairobi, along
Kilimanjaro road. The mandate and functions of the commission are provided Under Article 237(2) of the
Constitution, the Commission is mandated to; register trained teachers, recruit and employ registered teachers,
assign teachers employed by the commission services in any public school or institution, promote and transfer
teachers, exercise disciplinary measures over teachers, terminate employment of teachers, review the standards of
education and training of persons entering the teaching service, review the demand for and supply of teachers, and
advise the national government on matters relating to the teaching profession (TSC, 2016).
Vision: To be a transformative teaching service for quality education. Mission: To professionalize the
teaching service for quality education and development. Core values: Professionalism, Customer focus, Integrity,
Innovativeness, Team spirit. Since its formation in 1967, TSC membership had grown to more than 600,000
teachers in 2014. Of these, 293,000 are employed by the Teachers Service Commission while others are engaged
in private schools. The affairs of the teachers are managed by a secretariat which operates through specialized
departments and divisions. The secretariat has over 3000 staff members who work in the TSC major departments
which are; registration; finance; human resource; pension and teachers management departments (TSC, 2016).
Remuneration systems refer to the compensation systems used to reward employees for their work and
services in an organization. Human capital being the most valuable asset of an organization, they are the ones that
determine the success or failure of organizations' programs and activities in the organization (Armstrong, 2008).
Remuneration systems provided in an organization should aim at motivating, attracting and retaining employees
in an organization to enhance better performance, quality work that will lead to high productivity of the
organization. It is important that rewards systems should address the vision of both the company and the individual

134
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

employee. Organizations have put systems in place; however, with the ever changing environment and high
competition, organizations are not able to link the systems in place with employee skills and abilities they possess
and apply in their performance. As a result they are not satisfied in their jobs, leading to high labour turnover,
forcing organization to incur extra cost in recruitment, training and development leading to low productivity , poor
employee employer relations resulting to industrial strikes and unrests thus making organizations to incur extra
expenses and wasting time on court cases seeking for redress. Therefore, this study sought to establish the effects
of remuneration system on organizational performance in public organizations with special reference to Teachers
Service Commission. The specific objective of the study was to examine the effects of employees’ turnover on
organizational performance in Teachers Service Commission.

2.0 Effect of Employee turnover on organizational performance in Teachers Service Commission

Employee turnover or labour turnover refers to the rate at which employees’ leaves one organization to another. It
can be represented by a simple statistic (for example, a turnover rate of 80% usually indicates that 80% of the
employees left organization in a given period). Employees’ turnover is determined by rate of employee retention,
rate of recruitment, employees work life balance and employees work environment (Locke, 2008). Armstrong
(2008) revealed that there are many factors that contribute to labour turnover including employee age, tenure with
the organization, employees remuneration, overall job satisfaction, characteristics of the task, employee
perceptions of the work environment, better prospects(career move),more security, more opportunity to develop
skills, better working conditions, poor relationship with manager/team leader, poor relationship with colleagues,
bullying or harassment, personal e.g. pregnancy, illness, moving away from an area. Organizational performance
relates to how successfully an organized group of people with a particular purpose perform a function to achieve
great results measured in terms of the value delivered to customers. In this study organization performance will be
measured in terms of quality of work, successful achievement of the aimed organization goals and the level of
customer satisfaction (Mullins, 2010). According to a study by Boyens (2007), employees’ remuneration system
determines the rate of employees’ turnover in many organizations worldwide and when the turnover is high it
affects the organizational performance. A study by Johnson (2010) revealed that in UK, highly paid employees
were less likely to leave their jobs and low paid employees had higher chances of leaving their jobs in search of
better paying jobs.In a study conducted by Oshagbemi (2010) amongst United Kingdom academics, a statistically
significant relationship between pay and employees’ turnover and their level of job satisfaction was established.
However, a study conducted by Yo Liu & Norcio (2008) in the public sector in China failed to find any significant
relationship between pay, turnover and satisfaction. Similarly, results from a survey conducted by Hausknecht
(2009) amongst postdoctoral scientific researchers found pay and benefits to be weakly associated with employees’
turnover and organizational performance.
In his research into the factors influencing Labour turnover in Australia, Wright (2009) identified that the
first important indicator of Labour turnover is employees’ dissatisfaction with the organizational remuneration
system. Wright (2009) commented that employees who are not satisfied with the organization remuneration
systems are likely to leave the organization and this affects overall organizational performance when employees
turnover is not managed effectively.A study by Locke (2008) on employees remuneration and turnover rates in
USA firms revealed that employees remuneration systems was a key determinant of the high rate of employees
turnover rates in many USA firms and the rate of employees turnover was determined by the rate of retention;
rate of recruitment and number of years employees worked in the organization. Hanif (2009) in the study of
employees voluntarily leaving the organization in United States public and private sectors, mention factors that
make workers to suspend from organizations are poor remuneration systems.A study by Linda (2012) showed that
employees remuneration systems is one of the major factor that leads to increased rate of employees turnover in
many organizations in South Africa. Linda (2012) further argued that employees turnover is also influenced by
lack of employees work life balance, poor employees work environments. High employees’ turnover rates that
leads to a decline in organizational performance. In Singapore poor work environment is highly contributed to
employee turnover in regarding to controllable factors such as pay, nature of work, supervision, organizational
commitment, distributive justice, and procedural justice and this affected organizational performance Marti,(2009).
In Sri Lanka Sujeewa (2011) found that grievances related to employees remunerations are among of the causes
of employee turnover. High grievance rates allied with conflicting situation rather than cooperative labour relations
and hence associated with lower plant productivity and if not effectively resolved could lead to less productivity,
lower quality of work, products and customer services, distraction from corporate goals, low job morale, loss of
confidence and communication between employees, managers and supervisors, which can lead to increased
absenteeism and staff turnover.
In Ghana, a study by Okumu (2012) found out that employees turnover had a negative effect of the
performance of commercial banks. Ologunde, Asaolu and Elumilade (2011) in their research work on labour
turnover in commercial banks in southwestern Nigeria found that low morale, poor working conditions and low
wages led to high rate of staff turnover in many commercial banks. In South Africa employee turnover in the

135
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

banking sector has come under the spotlight in the last decade. Research findings show that the banking sector
worldwide is characterized by high employee turnover and skill shortages Metcalfe (2011).
A study by Ongori (2007) in Botswana observed that among the factors that influence employee turnover in
the organization is inadequate information including physically powerful communication systems on effective
performance, uncertain supervisors’ desires and peer employees, and consensus on job functions. These may be
termed as the basis of employees to suffer from less involved in jobs and careers and finally show a partiality to
leave the organization (Mrope, 2013). In Tanzania employees’ turnover is a threat to many organizations as it has
become a very serious issue for any organization due to its negative effects on operation and performance of
organizations (Muhammad, 2013). Poor management practices and policies on personnel matters and on
motivation that contribute to labour turnover in many organizations. Hedwiga (2011)
Labour turnover is influenced by a number of controllable and uncontrollable as well as demographic factors.
Kiunsi (2008) and Magalla (2011) exposes that controllable factors such as short contract, poor working condition,
poor recruitment procedure, lack of motivation, and poor or inadequate incentives and rewards are the reasons that
influence voluntary labour turnover in public organizations especially for employees living in rural areas.
Managerial controllable factors such as unequal treatment of workers, lack of promotion and growth, low wages
and salary, unclear compensation procedures, less recognition and lack of employees’ involvement in decision
making.
In Kenya, Bula (2012) in the study of labour turnover in the sugar industry in Kenya found that salary is a
major factor causing labour turnover followed by training, promotion, performance appraisal and work condition.
Other factors like recognition, job content, participation in decision making and leadership style were also
considered as immediate factors. It was also revealed that although lack of employee commitment and motivation
can be major causes of labour turnover, they are dependent on all the other factors causing labour turnover.

3.0 Method
The study adopted a descriptive research design. Target population of the study was obtained from Teachers
Service Commission headquarters offices situated in Upper hill Nairobi. The target population was a total of 1500
staff working inthe organizations departments notably; registration, finance, human resource, pension and teachers
management departments WITH A Ssample size of the population was thus 316 respondents. Questionnaires were
preferred. Piloting was done for validity and reliability of the data collection instrument. The use of semi
structured questionnaires facilitated gathering of both quantitative and qualitative data, consequently, editing
process detected errors and omissions, which were corrected where possible to certify that minimum data quality
standards have been achieved. Coding was done which was necessary for efficient analysis, through coding;
several replies may be reduced to a small number of classes which contain critical information required for analysis
Kothari (2004). Quantitative data was analyzed by computer using statistical package for Social Sciences (SPSS)
version 23 software. Regression analysis was applied to determine the statistical significances level of effect of
the independent variables on the dependent variable. Analysis Of Variance (ANOVA) was used to test the
significance of the overall regression model which determined the significant relationship between the research
variables Sekeran (2003).

4.0 Discussion
Results on effects of employees’ turnover on organizational performance in Teachers Service Commission, the
respondents were asked to indicate the level of agreeableness for employee reward the findings are present in the
table 4.1 below.
Table 4.1 Employee turnover
statements on employee turnover 1 2 3 4 5
% % % % % Total %
Employees rarely leave the organization 31.3 38.1 9.6 12.5 8.5 100
Employees work life balance is well enhanced 30.1 42.6 9.1 12.5 5.7 100
Exit interviews are frequently conducted in the organizations. 35.8 32.4 4 16.4 11.4 100
Organizational culture accommodates employee diversity. 43 33 5 19 0 100
recruitments of new employees are done regularly 34.6 38.1 3.4 16.5 7.4 100
KEY: Strongly disagree -1, Disagree -2, Neutral -3, Agree -4,Strongly agree -5
Source: Author (2018).
The respondents were asked whether employees rarely leave the organization, 38.1% and 31.1% of the
respondents strongly disagreed and agreed to the statement respectively while 12.5% of the respondents agreed
that Employees rarely leave the organization and the other 9.6 % were neutral and 8.5% strongly agreed about the
statement.

136
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

On the statement the employees work life balance is well enhanced 42.6 % of the respondents disagreed and
30.1% strongly disagreed about the statement.12.5% stated that the employees work life balance is well enhanced
while 9.1% strongly agreed while were 5.7% of the respondents were neutral.
On the statement the exit interviews are frequently conducted in the organizations. majority of the respondents,
35.8 % strongly disagreed, 32.4 % of the respondents disagreed while 16.4 % of the respondent agreed that exit
interviews are frequently conducted in the organizations. And the rest 11.4% strongly agreed and 4 % were neutral
about the statement.
The respondents were asked whether organizational culture accommodates employee diversity. 43 % of
strongly disagreed and 33 % of the respondents disagreed, while 19 % of the respondents agreed to the statement
and 5% were neutral. The results revealed that majority feels that the organizational culture does not accommodates
employee diversity.
Respondents were asked whether recruitments of new employees are done following the recruitment policy
and that favours those meeting the requirement in the organisation. 38.1 % of respondents strongly disagreed while
34.1 % of the respondents strongly disagreed that they are provide with compensation packages.16.5 % of the
respondents stated that they do agree that recruitments of new employees are done following the recruitment
policy and that favours those meeting the requirement in the organisation while 7.4 %strongly agreed and 3.4 %
of the respondent were neutral .The results thus showed that the recruitments of new employees are not done
following the recruitment policy and that favours those meeting the requirement in the organisation. This study
therefore indicated that the employee are not recognized and rewarded well by the organization and this may
increase level of dissatisfaction hence increase turnover rate in the organization.

4.3 Hypotheses Testing

Hypotheses testing were done in order to establish the relationship between each of the independent variable
employee’s turnover, and the dependent variable (organizational performance).
This study represents the analysis of the data and the results of the study are discussed. Hypothesis was tested
against correlation using Pearson co relational and through regression analysis.
4.3.1: Influence of Employee employees’ turnover on organizational performance
The correlation between employees’ turnover on organizational performance was calculated using Pearson’s
Correlation as shown in the table 4.2below:
Table 4.2: Correlation between employees’ turnover on organizational performance
Employees’ turnover Organizational performance
Employees’ Pearson Correlation 1 .384**
turnover Sig. (2-tailed) .000
N 300 300
**. Correlation is significant at the 0.01 level (2-tailed).
The correlation between employees’ turnover on organizational performance is 0.384. This means there is a
weak positive association between employees’ turnover on organizational performance.
4.3.2: The Relationship between employee turnover and organizational performance
Regression analysis was done to determine the relationship between employee’s turnover, and organizational
performance. The results are as presented on the table 4.3 below.
Table 4.3: Regression analysis
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .867a .752 .666 1.080
Predictors: (Constant), employees’ turnover
4.3.3 Dependent Variable: organizational performance
The coefficient of determination (Adjusted R2) indicates the strength of the variables selected. When we have low
R2, it can be inferred that these predictor variables do not influence the dependent variable. The coefficient of
determination (Adjusted R2) statistic of 0.666 indicates that the selected predictor variables (Employee employee
job satisfaction, employee’s turnover, employee’s productivity, and employee relations) account for 66.6 % of the
variation in the organizational performance. This means that the selected predictor variables are significant in
determination of the dependent variable (organizational performance). However, there are still other variables that
influence organizational performance that are not captured in this particular model that account for the remaining
33.4% in variation of the organizational performance.

137
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

Table 4.4: ANOVA

Model Sum of Squares df Mean Square F Sig.
Regression 207.623 4 51.541 19.245 .000a
Residual 550.807 172 3.202
Total 758.430 176
Predictors: (Constant), employees’ turnover
Dependent Variable: Organizational performance
The above ANOVA table assesses the overall significance of the model. The overall model is significant because
the significant value is 0.000 which is less than 0.05 at 95% confidence interval. We therefore fail to reject the
model generated for determining organizational performance using employee job satisfaction, employees’ turnover,
employees’ productivity, employee relations. It thus means that employee job satisfaction, employees’ turnover,
employee’s productivity, employee relations are critical in influencing organizational performance at Teacher
Service Commission. Hence, the model construct is validated.
Table 4.5: Regression Coefficients for the Variables using Organizational Performance
Unstandardized Standardized 95.0% Confidence Interval
Coefficients Coefficients for B
Model B Std. Error Beta T Sig. Lower Bound Upper Bound
(Constant) -.162 .044 - .000 -.162 .044
3.638
Employees’ .000 .016 .000 .021 .983 .000 .016
turnover
Dependent Variable: organizational performance
The model generated from the study is Employee turnover was found not to be significant as its Beta
Coefficient is 0.000 (p = 0.9333). Thus employee turnover have no effect on organizational performance. The
results agree with those from descriptive analysis which show that employee turnover have a weak positive
correlation with organizational performance.

4.4. Hypotheses Test Results

The hypothesis H02 stated; employee’s turnover does not have a significant effect on organizational performance
in TSC. The P-value for employee turnover is 0.983, hence we fail to reject the null hypothesis since the calculated
P-value is more than 0.05; therefore, we conclude that employee turnover is insignificant towards influencing
organizational performance. The B value of employee turnover is 0.000 that is it has insignificant influences on
organizational performance in TSC.

5.0 Conclusion and Recommendation

Organizational performance relates to how successfully an organized group of people with a particular purpose
perform a function to achieve great results measured in terms of the value delivered to customers. Results on
influence of reward on employee retention, the respondents were asked to indicate the level of agreeableness for
employee reward the findings indicated that majority of the respondents disagreed to the statement that employees
work life balance is well enhanced and exit interviews are not frequently conducted in the organizations. The
respondents felt that the organizational culture does not accommodate employee diversity and that the employee
are not recognized and rewarded well by the organization this increases level of dissatisfaction hence increase
turnover rate in the organization.
The hypothesis H02 stated; employees’ turnover does not have a significant effect on organizational
performance in TSC. The P-value for employee turnover is 0.983; hence fail to reject the null hypothesis since the
calculated P-value is more than 0.05.Therefore, employee turnover is insignificant towards influencing
organizational performance. The P-value of employee turnover is 0.00 that is it has insignificant influences on
organizational performance.
The study suggested the following recommendations as a measure of improving organizational performance
in Teachers service commission, Kenya. Conducive working environment should be provided and proper working
conditions should be provided to all employees. The organization management should offer competitive
remuneration packages in order to encourage employees not to leave the organization on basis of remuneration,
employees work life balance should be well enhanced, and exit interviews should be frequently conducted.
The management should also improve on organizational values and policies in order to implement
organizational culture that accommodates employee diversity. TSC management should adopt effective employees’
relations strategy through application of effective communication channel. The organization management should

138
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

implement effective organizational structure to ensure that there is effective communication and timely feedback,
effective conflict management procedures should be adopted to ensure that there is proper grievance and
disciplinary procedures and conflicts are resolved and managed effectively. Team management should be
employed to ensure that teamwork and team spirit is enhanced by all employees throughout the organization.

REFERENCES
Abassi SM, Hollman KW (2000). "Turnover: the real bottom line", Public Personnel Management, 2 (3):333-342.
Adams, P. (2007). The Race for Talent: Retaining and Engaging Workers in the 21st Century. Human Resource
Planning Journal, Vol. 27 (3) pp 12-46
Adams, S. (2008). Toward an understanding of inequity. Journal of Abnormal and, Social Psychology, 67 (5), 422-
436
Ajila, C and Abiola, A. (2004). Influence of Rewards on Workers Performance in an Organization, Journal of
Social Science, 8(1), pp.7-12.
Armstrong, M (2005). Armstrong’s Handbook of Management and Leadership: Approaches to HRM and L&D. Kogan
Page Limited Publishing. United States
Armstrong, M. (2008).Strategic Human Resource Management: A Guide to Action 4th ed.
Kogan Page Publishers
Astrauskaite, M. (2011). Employees Job Satisfaction and Productivity. Job Satisfaction Survey:
Ball,P. (2014). The role of perceived organizational support and supportive Human Resource Practices in the
Turnover Process. Journal of Management, Vol. 29 (99).
Belfield R and Marsden. D. (2003). Performance pay, monitoring environment and Establishment, International
Journal of Manpower, Volume 24, Number 4, 2003, pp. 452-471(20)
Boyens,R. (2007). Employee’s Remuneration Systems. Journal of Administrative Sciences, 15: pp 122-144.
Blumberg, (2011) Business research methods 3rdEuropean Edition .Mc Graw Hill.
Bryman, A.&Cramer (1997). Quantitative data analysis with SPSS for windows. Rutledge London
Brunetto and Farr-Wharton (2012) An Exploration of the Relationship Between Learning Organisations and the
Retention of Knowledge Workers.” The Learning Organization, Volume 14: 3: 204-221.
Bula,P. (2012). labour turnover in the sugar industry in Kenya. Journal of Management.Vol 22
Casio (2008). Expectancy Theory. Journal of Administrative Sciences, 17: pp 319-331.
Cooper, L. & Payne, R. (2008). Causes, coping and Consequences of retention at Work. New York Wiley,
Cooper, R.D, & Schindler, P. (2003) .Business Research Methods. (1st Edition). New York: Age International
Publishers
Cranny, L. (2008). Employees Performance in Organizations. Journal of Management, 16: pp
Curral,P. (2012) Employees Job satisfaction and Employees Productivity. Human Resource Journal: 22 (5) 112-
221.
Cummings, R. (2010). Labour Turnover and Employees Job Satisfaction. Human Resource journal 13 (9)
Daft RL, Marcic D 2010. Understanding Management.7 Edition. Scarborough:Nelson Education Ltd Dempsey.
(2003).Research Methods. (4th Edition). Pearson Publishers. New Jersey.
Eijgendaal, P. (2009). Effect of Remuneration Systems on Employees Turnover. Human Resource journal : 44 (6)
Fisher, R.A. (1925). Statistical Methods for Research Workers. Oliver and Boyd (Edinburgh). ISBN 0-05-002170-
2.
Frye,R. (2014). Effect of Remuneration Systems on Employees Performance. Human Resource journal : 12 (44)
Furnham, A. (2009). ‘Personality, motivation and job satisfaction: Great Britain: Pal Grave Macmillan Publishers
Ltd.
Gay, L.R.1981.Educational Research: Charle E.Mairil Publishing Company A.Bell & Howell Company
Collumbus,Toronto, London
Gennard, J. & Judge, G. (2002). Employer-employee relations. London: CIPD
Hanif,R. (2009). How to Keep Your Best Employees: Developing an Effective Retention Policy. Academy of
Management Executive, 15 (4) pp 96-107.
Hausknecht,A. (2009) HRM practices and organizational commitment: Test of a mediation model. Canadian
Journal of Administrative Sciences, 17: pp 319-331.
Hedwiga,A. (2011). Employees Relations and Motivation. Journal of Management, Vol. 12 (14).
Huseman,R., Hatfield,L., & Miles,H. (2007) Equity theory and Employees Job Satisfaction. International journal
of human resource: 11 (6)
Igalens,L., & Roussel,P. (2009). Employees Retention in Organizations. International journal of manpower: 24
(4)
Israel, Glenn D. 1992. Sampling the Evidence of Extension Program Impact. Program Evaluation and
Organizational Development, IFAS, University of Florida. PEOD-5. October.
Johnson,E. (2010). Career-focused employee transfer processes. Career Development International, 10(4), 293-

139
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

309.
Joppe,P. (2000) Research Design and Methodology. (2nd Edition). Pearson Publishers
Kariuki,P.(2012). Factors Affecting Employees’ Job Satisfaction. Human Resource journal : 12 (44)
Kenya Institute for Public Policy Research and Analysis (KIPPRA) Policy Paper No. 5 2013
Kinyanjui,P. (2012). Employees job satisfaction and employees performance. International journal of human
resource: 12 (13)
Kiunsi,R.(2008). Employees’ productivity and Employees job satisfaction. journal of human resource: 9 (5)
Kombo, D., & Tromp, D. (2006). Proposal and Thesis Writing; An Introduction. Nairobi: Pauline’s Publication
Africa.
Kornhanuser,T.&Sharp,A. (2009). Relationship between Employees Job Satisfaction and Performance.
International journal of human resource: 11 (6)
Kothari, C. (2004). Research Methodology: Methods and Techniques, 2ndEd. New Dehli: New Age International
(P) Ltd Publishers.
Kreitner, R., (2003). Human resources management. Toronto: Arizona State University: Houghton Mifflin
Company.
Lambert,A. (2007). Employees Productivity in Organizations. International journal of human resource: 11 (6)
Leaman,A, (2001) Dissatisfaction & office Productivity Journal of facilities Management, 13 (2), 3-19
Lim,Y. (2008). Effect of employees’ job satisfaction and Organization Performance. International Journal of
human resource: 13 (2)
Linda,O. (2012) Impact of employees remuneration systems on employees performance. International journal of
human resource: 12 (9)
Livingstone, D. (2009). Education and Jobs: Exploring the Gaps. Canada: University of Toronto.
Locke, E.A.,‘(2008).The Nature and Causes of Job Satisfaction. Journal of human resource:
Lu,Y. & Barriball,P. (2011). Employees Job Satisfaction. International journal of human resource: 10 (6)
Lu, H., While, A.E. & Barriball, K.L.,(2005).Job satisfaction among nurses: a literature review, International
Journal of Nursing Studies, 42, 2, pp. 211.
Luthans,P. (2012). Employees Performance Challenges. International journal of human resource: 12 (4)
Magalla,W. (2011). Factors affecting employees job satisfaction. International journal of human resource: 6 (5)
Marti, E.(2009). HR Practices and Leadership Styles as Predictors of Employee Attitude and Behaviour. European
Journal of Social Sciences, Vol. 14 November 2010.
Metcalfe, A. (2011). The relationship between employees‟ inter-organizational career orientation and their career
strategies. Career Development Journal. 11 (3): pp 243-264.
Meyer,R. (2009). HRM practices and organizational commitment: Test of a mediation model. Canadian Journal
of Administrative Sciences, 17: pp 319-331.
Mike, L. (2008). Employer – employee relations, Edinburgh Business School. Edinburgh: Heriot-Watt University.
Mrope,R. (2013). Factors discrimination functional and dysfunctional sales force turnover. Opportunity and
turnover behavior: A methodological or conceptual artifact. Journal Applied Psychology, 74(6): pp 846-854
Muli,P. (2010). Employees Job satisfaction and Performance. International journal of human resource: 11 (3)
Mullins L.J (2010). Organizational behavior and management, 7th ed. Prentice Hall UK.
Nanda,R.& Browne,P. (2007) examining employee performance indicators at the hiring stage in USA firms.
Journal of Administrative Sciences, 14: pp 19-31.
Nguyen A. (2013). Relative Pay and Job Satisfaction. Some New Evidence, MPRA Paper No 1382.
Nugent, A., 2009. Using voluntary benefits strategically can help employer’s goals of retaining employees and
controlling cost. Benefits Quarterly Reviews, 25(2): 7-10.
Okalo,L. (2012). Factors affecting employees job satisfaction. International journal of human resource: 12 (6)
Okpara,J. (2014). Employees’ motivation and organization performance, International journal of human resource:
14 (6)
Okumu,P. (2012). Job Satisfaction and Dissatisfaction among Teachers in Kenya. Kenya Journal of Education
Planning Economics and Management. Vol.3 (3) 114-123 (ISSN; 2074-5400
Ologunde,A., Asaolu,R.& Elumilad,E. (2011). Performance Appraisal Satisfaction and Employee Outcome:
Mediating and Moderating roles of work motivation. International Journal of Human Resource Management,
Vol. 17 (3).
Ongori, H. (2007). A review of the Literature on Employee Turnover. African Journal of Business Management,
Vol. 1 (3) pp 1-54.
Ongori, H. & Agolla J. (2009). Paradigm shift in managing career plateau in organization: The best Strategy to
minimize employee intention to quit. African Journal of Business Management, Vol.3 (6), pp. 268-271
Onyancha, N.W. (2014). Effect of Remuneration on Employees Performance in the Ministry of Internal Security:
A Case of Kisii County. International Journal of Human Resource Studies ISSN 2162-3058
Orodho, C.R. (2009). Elements of Education and Social Science Research Methods (2nd Edition).Kanezja

140
European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.11, 2018

Publishers
Oshagbemi (2010). Role of perceived organizational support and supportive Human Resource Practices in the
Turnover Process. Journal of Management, Vol. 29 (99).
Redmond, B. (2013). Lesson 5: Equity theory: Is what I get for my work fair compared to others? Work attitudes and
motivation. The Pennsylvania State University World Campus.
Schermerhorn (2007). Factors affecting employees’ productivity, International Journal of Business and
Management, 6, 5,
Schults D, Schults S 2002. Psychology Work Today. 8 Edition. New Jersey: Pearson Education Ltd.
Shields, J. (2007). Managing employee performance and reward concepts, practices, strategies. New York:
Cambridge University Press
Stephen,P. (2014). Employees’ relations and Performance. Journal of Management, Vol. 22 (19).
Stone, R. (2013). The roles of computer self-efficacy and outcome expectancy in influencing the Computer end-
user's organizational commitment. Journal of End User Computing, 15(1), 38-53.
Stuart, M. (2011). The National Skills Development Handbook 2010/11. South Africa: Rainbow
Uma Sekeran (2006). Research Methods for business 4th Edition. Hamitage publishing services.
Yen and McKinney, 2012).Employees Rewards and Performance. Journal of Management, Vol. 22 (12).
Yo Liu & Norcio (2008).Employees Relations and Performance. Journal of Management, Vol. 12 (13).
Young,P. (2007).Employees relations and communication process. Journal of Management, Vol. 12(19).
Wright. (2009). Factors discrimination functional and dysfunctional sales force turnover. Journal of Business &
Industrial Marketing, Vol. 15 (6) pp. 399-415
Zikmund, W. (2003). Business Research Methods. Texas, USA: Harcourt College Published

141