Mediating Effect of Motivation on the Association between Employee Compensation and Employee Performance in Kenyan Chartered Public Universities

Abstract

Compensation is crucial to the employee-employer relationship, affecting satisfaction, turnover, absenteeism, commitment, and trust. Fairness in incentives distribution and supportive supervisors are key to motivating academic staff and enhancing performance. This study aimed to examine the effect of employee motivation on the relationship between compensation and performance in Kenyan chartered public universities. The study was based on Expectancy and Maslow Theory. The study adopted positivist research philosophy. It utilized a positivist research approach, adopting a descriptive cross-sectional design. A pilot study was carried out at one university to validate the data collection instrument. Reliability results indicated a Cronbach Alpha value of 0.920. 247 questionnaires were returned out of 382 administered, thus giving a response rate of 64.7%. Data on compensation, motivation, and performance were collected through a questionnaire. Descriptive and inferential statistics were employed for analysis. Results showed that motivation mediates the relationship between compensation and performance (R2=0.348, F=66.563, p<0.05), positively and significantly. The study concludes that the relationship between employee compensation and employee performance is mediated by positively and significantly by motivation. The study recommends that compensation programs should be well structured so as to promote fairness and also motivate employees