The Effect of Organisation Structures and Compensation Policies on Employee Performance in Public Service Institutions in Kenya, a Case of the Water Sector Trust Fund

Abstract

Public service institutions have often been handicapped by inappropriate organisational structures featuring excessive levels of bureaucracy and characterised by formalisation, specialisation, impersonality and hierarchy. Many public sector organisations do not provide competitive compensation levels for their employees owing to pay structures that do not factor into consideration prevailing market valuations of certain jobs. The study's objectives were to determine the influence of organisational structures, and compensation policies on employee performance in public service institutions in Kenya, A case of the Water Sector Trust Fund. The study adopted coordination theory and the expectancy theory of motivation. This study applied a descriptive research design. It focused on a target population of 150 staff of WSTF in their office premises in Nairobi County. A questionnaire was used for data collection due to the benefit of inclusion of more extensive enquiries. It then used SPSS as a platform for conducting the descriptive data analysis, correlation analysis and regression analysis. The results were then presented through the use of a mixture of graphs and tables. The study findings were that; WSTF has incorporated an organisational structure that has enhanced employee performance as evidenced by the adoption of a hierarchical structure where each manager oversees a smaller group of employees; and making decentralisation more effective through the adaptation to specific circumstances and objectives through a public sector restructuring exercise. However, more needs to be done to reduce the level of bureaucracy and the centralisation of top level decision making, as well as ensuring clarity in the management structures so as to remove blurred lines of authority and responsibility. The organisation has institutionalised compensation policies that have led to improved employee performance. WSTF has ensured the integration of communication content control in an effort to improve its communication. However, it has failed to enhance the competencies of their staff in essential skills such as communication despite having a bloated workforce. The performance of employees has been assured through positive reinforcements and fair treatment; greater job involvement of employees by adopting high performance work systems; and engaging in improved processes, procedures and techniques of innovation. However, it has been hampered by poor remuneration, delayed payment of salaries, stagnation in one position or job group for long.