DISCRETIONARY BENEFITS AND EMPLOYEE RETENTION IN STATE AGENCIES: A CASE OF REGULATORY STATE AGENCIES UNDER THE NATIONAL TREASURY, NAIROBI CITY COUNTY, KENYA

Abstract

Purpose: Retention of employees in Kenya’s state agencies has been cited as a big challenge that has continued to undermine effective and efficient service delivery to the public. Employee retention is key to these agencies and failure to retain employees significantly affects their operations thus having a great impact on their service delivery, sustainable development and contribution towards Vision 2030. This study explored the influence of discretionary benefits on employee retention in Kenya’s state regulatory Agencies operating under the National Treasury.

Design/ Methodology/Approach: The study adopted descriptive and cross-sectional research designs and 320 employees of the four regulatory state agencies under the National Treasury, Kenya, as of 30^th June 2017. Stratified proportionate simple random sampling was used in selecting a sample size of 175 with top, middle-level management and support staff used as strata. Quantitative and qualitative primary data was collected using self-administered semi-structured questionnaires. The study used both descriptive and inferential statistics to analyze the collected data.

Findings: The study found a positive and significant relationship between three independent variables namely health insurance, wellness programs, and work-life balance and the dependent variable which was employee retention. A pension plan was found to have an insignificant relationship with employee retention.

Contribution to policy and practice: The study concluded that that managers should craft strategies aimed at reducing attrition rates.

Originality/Value: The study extends the literature on strategic human resource management. It is the first study to be conducted on employee retention in state agencies.