FRINGE BENEFITS AND EMPLOYEES PRODUCTIVITY IN PUBLIC SECTOR

ABSTRACT

Fringe benefits focus on maintaining the quality of life for employees and providing a level of protection and financial security for workers and for their family members some common examples are; retirement or pension plans, medical insurance, education reimbursement and time off.  Like base pay plans, the major objective for most organizational fringe compensation programs is to attract, retain and motivate qualified, competent employees. Numerous surveys and experiences of HR professionals reveal that the tangible rewards that people receive for working come in the form of pay, incentives and benefits and one key to retention is to have competitive compensation practices. Employers on the other hand would be striving to cut costs so as to post impressive profit at the end of the accounting period.  It is clear that there is a research gap in this area of study and that further research needs to be carried out, in order to find out whether fringe benefits really do have any effect on the productivity of employees in the public sector, Kenya. The main purpose of this research project is to find out fringe benefits effects on employee productivity in the public sector, Nairobi County. This study adopted descriptive survey design which is concerned with determining the frequency with which something occurs or the relationship between variables. This study was carried out at the State Department of Water, where the total population is 189. The researcher targeted 30% of the entire population which stands at 58 employees. A simple random sampling of the targeted population was employed. The researcher used questionnaires to collect the data and also consulted secondary sources and literature for comparison.  After the collection of the data it was edited to identify inconsistencies and establish uniformity and then compiled to facilitate entry of the responses into the computer. The quantitative data was analyzed using a statistical package for social sciences (SPSS) and excel spreadsheets.  Presentation of the quantitative findings was done in form of tables and percentages to enable easy interpretation by the readers accompanied by the requisite explanations and narrations. From the study it was established that security benefits such as meal, transport and house allowances contributed positively to employee productivity, that health of the workforce is inextricably linked to the productivity of the workforce and the health of the nation‟s economy, that retirement benefits strongly influenced workers‟ behavior, giving younger workers a compelling reason to continue working for their employer and encouraging older workers to retire on a timely basis and finally that, recognizing and rewarding employees for a job well done enhances employee productivity.  Since all pvalues for all variables were found to be less than 0.05 it can be statistically concluded from the study that fringe benefits have a significant influence on employee productivity in the public sector. From the study it can be recommended that; the government should continue providing security benefits to all civil servants, as they positively influence employee productivity and raise overall performance in the public sector, it should continue providing health protection benefits to its employees since this will help them create a sense of loyalty and encourage their productivity, it should review the current retirement package since a good retirement package will attract and retain employees in the public sector and also improve their productivity and finally that public organizations need to improvise employee recognition programs for jobs well done as this will motivate employees thus enhancing their productivity in the public sector.