ABSTRACT

The banking industry in Kenya has developed a culture based on performance which form the
basis for rewards and compensations. Employers have become more aggressive about
restructuring work in ways that push for higher productivity supported by an array of
technologies and management practices. Specifically the study sought to determine the
relationship between financial reward, fringe benefits, recognition schemes and career
progression, moderated by organizational culture on employee performance. Operant
conditioning theory on financial rewards, the expectancy theory on fringe benefits, cognitive
evaluation theory on recognition schemes, self-efficacy theory on career progression, cognitive
consistency theory on organization culture were used to inform the study. The study adopted a
descriptive research design. Descriptive statistics were chosen since they utilized data collection
and analysis techniques that yield reports concerning the measures of central tendency, variation,
and correlation. The combination of its characteristic summary and correlation statistics, along
with its focus on specific types of research questions, methods, and outcomes necessitated the
choice of this design. The study adopted adopt a positivism philosophy. The target population
was employees working in the six selected Commercial Banks in Nairobi County composed of
both clerical and Management staff. Primary data was collected using structured questionnaires.
Quantitative data were analyzed using Statistical Packages for Social Sciences (SPSS). The study
conducted various tests including normality test, multi collinearity, stationarity,
heteroscedasticity and autocorrelation tests. Factor analysis was carried out among
corresponding questions to allow formation of factors with the highest Eigen values. The study
found out that there was a positive and significant relationship between financial reward and
employee performance, positive and significant relationship between fringe benefits and
employee performance. Lastly, there was a positive and significant relationship between career
progression and employee performance. The entire alternative hypotheses were not rejected.
Based on the findings, the study concluded that financial reward, fringe benefits, recognition
schemes and career progression have a positive and significant effect on employee performance.
The study recommended for management to consider the many factors involved in a complex
and dynamic situation before making decisions on reward systems that will influence the
effectiveness, efficiency and ultimately the sustainability of the financial institutions in the
country.