EMPLOYEE COMPENSATION PRACTICES AND JOB SATISFACTION IN THE COUNTY GOVERNMENT OF NAIROBI, KENYA

Gladys Kerubo Nyakundi, Dr. Wallace Atambo

Abstract


In today’s competitive landscape, effective human resource management has become In today’s competitive landscape, effective human resource management is essential for sustaining employee productivity and satisfaction, particularly within dynamic and service-driven sectors such as public administration. Although the Nairobi County Government has invested significantly in enhancing employee satisfaction since its inception, the impact of these efforts on job performance remains unclear. This study aimed to examine the effect of employee compensation practices on job satisfaction among staff in the Nairobi County Government. Specifically, it evaluated the influence of two key compensation components: performance-based compensation, and competitive salary structures. The study was grounded in the Resource-Based View (RBV) Theory and Equity Theory. A descriptive research design was adopted, targeting 16,321 staff across 11 departments within the County Government. Using Yamane’s (1967) formula, a sample size of 388 respondents was determined through stratified random sampling. Primary data was collected using structured questionnaires, and a pilot study was conducted with 39 participants to test the instrument's validity and reliability. Construct and content validity were assessed, while reliability was measured using Cronbach's Alpha Coefficient. Data was analyzed using SPSS Version 28 through both descriptive and inferential statistics. The findings revealed a strong and statistically significant positive correlation between competitive salary structure and job satisfaction (r = .813, p < .001), followed by performance-based compensation (r = .539, p < .001). Based on the results, it is recommended that the County Government adopt a structured salary increment policy aligned with inflation, job performance, and employee experience. Finally, the salary grading system should be communicated more clearly to ensure transparency and employee understanding of compensation decisions.

Key Words: Employee Compensation Practices, Job Satisfaction, Performance-Based Compensation, Competitive Salary Structures


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