Relationship between non-monetary employee motivation And employee retention in the insurance sector: a case of Madison insurance company Kenya limited

Abstract

The insurance sector in Kenya is one of the contributors to the Kenyan Gross Domestic Product (GDP). As part of organizational growth the sector has to find a way of maintaining its most important capital, the human capital. According to a review done by Insurance Regulatory Authority in Kenya in 2014, the insurance sector is expected to increase its contribution to the G.D.P from the current 3.1% to 5%in the next five years. Madison Insurance Company Kenya Limited (MICK) is one of the players in this industry with a market share of 1.8% of the insurance industry. The employee turnover rate however has increased in the last two years from 22.2% to 35.3% in the years 2013 and 2014 respectively, despite a continuous review of remuneration. The main purpose of the study was to investigate the relationship between non-monetary motivation and employee retention in the Insurance Sector. The specific elements of the non-monetary factors that co-relate highly with employee retention is unknown. The objectives of the study are to establish the relationship between job security; employee career development; work environment; employee recognition and employee retention in MICK. The conceptualization views non-monetary motivation factors as the independent variables, while employee retention factors are the dependent variables and was guided by the Herzberg's Two Factor Theory. The study was conducted through exploratory research study design where the researcher sought to establish the perceptions of respondents on the non-monetary motivation factors. The study area was Madison Insurance Kenya. The target population was the 182 junior employees and supervisors of Madison Insurance and the sample size was 65 obtained through simple random sampling. The study used questionnaires administered by the researcher to collect data. Reliability of the instrument was measured using Cronbach's Alpha Coefficient registering a score of 0.78. Validity was tested with the help of a human resources expert. Factor analysis was used for data analysis. The study established that job security had insignificant relationship with retention as it had only one factor loading. Career development elements, promotion opportunity (r=.748) and addressing development needs(r=.706) two factor loadings. Work environment attributes, good work life balance (r=.835), relationship with supervisor (r=.875) and healthy/safe environment (r=.875) had three loadings. Employee recognition attributes, groups are recognized (r=.801); consistency/faimess(r=.783); recognition when doing a good job (r=.787) and employees recognize each other (r=.766) had the highest number of loadings. The results show that these elements are above (r=.7) with high number of factor loadings and so concludes are important in determining retention of employees. The study concludes that availability of these non-monetary forms will increase the chances of employees staying in an organization. The study is important because it will give the human resource department in MICK and the industry a clear picture on the specific non-monetary forms of motivation that can help in employee retention. To academics, it will underscore the extent to which these forms of motivation are perceived important and will also allow for further research on the appropriate model to measure perceptions with regard to motivation. It will add to the data in the insurance sector the importance of these forms