THE EFFECTS OF REWARD SYSTEMS ON EMPLOYEE SATISFACTION: A CASE STUDY OF KENYA FORESTRY RESEARCH INSTITUTE (KEFRI)

Reward systems are categorized in various forms as pay or salary, recognition and appreciation, empowerment and autonomy, and fringe benefits. Rewards need to be competitive enough in relation to compensating workers for their labour. By integrating the theories of motivation, this study assessed the effect of reward systems on employee satisfaction at the Kenya Forestry Research Institute (KEFRI). This research was based on the assumption that application of reward systems influences the behaviour and attitude of employees at Research Institutions in general and for this case KEFRI. One of the major problems facing research institutions in Kenya is the inadequate or lack of application of the reward systems, which leads to employee dissatisfaction. Labour productivity is greatly enhanced through appropriate application of reward systems. This situation provides the basis to assess the existing reward systems employed at KEFRI as a means of improving employee satisfaction and hence labours productivity. This research was therefore undertaken with the following three objectives in mind (i) to identify the existing types of reward systems in KEFRI; (ii) to determine the effects of reward systems on employee satisfaction; and (iii) to identify the limitations of KEFRI reward systems in employee satisfaction. The study targeted a population of 554 employees drawn from three of KEFRI’s three Research Centres namely: KEFRI Headquarters, Muguga and Karura Regional Research Centres. The study sample was 111 employees across all cadres. A fully structured self-administered questionnaire and an interview guide were the standard data collection instruments for the respondents. The data was analyzed using descriptive and inferential statistics. In particular, frequencies, tabulation and chi-square were used as descriptive statistics. The study revealed that 84% of the respondents were aware of the existing types of reward systems while 16% were not aware, a factor mainly attributed to failure to read the KEFRI human resource manual, attend staff meetings and ignorance on the fact that awards seem to have improved significantly in the current year as compared with the last three years. It also revealed that through rewarding employees equitably, the organization’s performance has been enhanced and employee commitment to the organization is more assured. The study also revealed that the application of reward systems influences the level of satisfaction of employees at KEFRI.