Lucy Mumbi Njenga, Dr. Mary Kamaara


The hospitality industry plays a fundamental and vital role in the growth of the Kenyan economy. However, labor turnover in three to five star rated hotels has been significantly increasing over the years. The general objective of the study is to assess the effect of reward strategies on employee retention in the hospitality industry in Nairobi City County, Kenya. Specifically, the study sought to establish the influence of employee benefits on employee retention in the Hospitality Industry in Nairobi City County, Kenya, and to establish the influence of work environment on employee retention in the Hospitality Industry in Nairobi City County, Kenya. This study was anchored on Equity Theory, and Herzberg's Two Factor Theory. This study used descriptive research design. The population of interest for the study consisted of all (14) three star, four star (38) and five star hotels (16) in Nairobi County. The target population was therefore 408 management employees. The study’s sample size was reached at using Krejcie and Morgan sample size determination formula. The study used simple random sampling to select 197 respondents. This study also used questionnaire to collect data relevant to this study. Quantitative data collected was analyzed using descriptive statistical techniques which are frequencies, mean, standard deviation. Inferential statistics which include Pearson correlation and the Regression Analysis Model was used to test the relationship between study variables. The significance of the model was tested at 5% level of significance. Data was analysed using Statistical Package for Social Sciences (SPSS) software. The study results were presented through use of tables and figures. The study concludes that employee benefits have a positive and significant effect on employee retention in the Hospitality Industry in Nairobi City County, Kenya. The study also concludes that work environment has a positive and significant effect on employee retention in the Hospitality Industry in Nairobi City County, Kenya. This study recommends that the management of hotels in Nairobi County should review and potentially adjust their compensation structures to ensure they are competitive within the industry. This might involve conducting regular benchmarking studies to assess salary levels, bonuses, and other monetary rewards offered by competitors and adjusting compensation packages accordingly. In addition, the hospitality industry should enhance and expand their employee benefits offerings.

Key words: employee benefits, work environment, employee retention

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