EFFECT OF TALENT MANAGEMENT ON EMPLOYEES RETENTION IN KENYA’S STATE CORPORATIONS ALICE WAITHIEGENI KIBUI DOCTOR OF PHILOSOPHY (Human Resource Management) JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY 2015 Effect of talent management on employees retention in kenya’s state corporations Alice Waithiegeni Kibui A thesis submitted in partial fulfilment for the degree of doctor of philosophy in human resource management in the Jomo Kenyatta University of Agriculture and technology 2015 DECLARATION This thesis is my original work and has not been presented for a degree in any other university Signature:____________________________Date:______________________ Alice Waithiegeni Kibui This thesis has been submitted for examination with our approval as University Supervisors Signature:______________________ Date_____________________ DR. Hazel Gachunga JKUAT,Kenya Signature:_________________________ Date:_________________ Professor.G.S Namusonge JKUAT,Kenya ii DEDICATION This thesis is dedicated to my family; my dear husband Kibui, my children Matu, Joan and Lyan for their encouragement and continuous support throughout my studies. To my mother for her tireless dedication and prayers to ensure I get educated. I love you all and may God bless you. iii ACKNOWLEDGEMENT To God be the glory for the far He has brought me.I most sincerely thank the University supervisors, Dr. Hazel Gachunga and Prof.G.S, Namusonge for their patience, continuous support, encouragement and endless commitment in providing the guidance and assistance throughout the development of this thesis. My appreciation also goes to Prof. Kihoro for his resourcefulness, not forgetting my classmates at the University, more specifically Dr. Waiganjo and Dr. Wekesa for their input and constant encouragement to move on in spite of the many challenges. I thank the management of the state corporations that allowed me to collect data and all who provided the data I needed. To my family, you have been a great encouragement in this journey .To my dear husband Kibui, who stood by me, encouraged me and believed in me against all odds to accomplish my dream, God bless you. To my children, Matu, Waithira and Muthoni.May this achievement help you to realize that you can get to any limits with determination. To you all who made the completion of this work possible, may God bless you in a mighty way. iv TABLE OF CONTENTS DECLARATION .......................................................................................................... ii DEDICATION ............................................................................................................. iii ACKNOWLEDGEMENT .......................................................................................... iv TABLE OF CONTENTS ............................................................................................. v LIST OF TABLES ....................................................................................................... ix LIST OF FIGURES ..................................................................................................... xi LISTOFAPPENDICES………………………………………………………….xiv ABBREVIATIONS .................................................................................................... xii DEFINITION OF TERMS ....................................................................................... xiv ABSTRACT ............................................................................................................ xvi CHAPTER ONE ........................................................................................................... 1 INTRODUCTION ........................................................................................................ 1 1.1 Background of the study ........................................................................................... 1 1.2 Statement of the Problem ......................................................................................... 6 1.3 Objectives of the Study ............................................................................................ 8 1.3.1 General Objective .................................................................................................. 8 1.3.2 Specific Objectives ................................................................................................ 8 1.4 Research Questions .................................................................................................. 8 1.5 Research Hypotheses ................................................................................................ 9 1.6 Significance of the Study ....................................................................................... 10 1.7 Scope of the Study .................................................................................................. 11 1.8 Limitations of the Study ......................................................................................... 12 v CHAPTER TWO ........................................................................................................ 13 LITERATURE REVIEW .......................................................................................... 13 2.1 Introduction ............................................................................................................ 13 2.2 Theoretical Framework .......................................................................................... 13 2.3 Conceptual Framework .......................................................................................... 21 2.4 Review of related theoretical literature .................................................................. 22 2.4.1 Effects of Talent Management on Employee Retention in Kenya ...................... 22 2.4.2 Competency Mapping ......................................................................................... 23 2.4.3 Employee Engagement ........................................................................................ 28 2.4.4 Performance Management .................................................................................. 31 2.4.5 Employee Career Development .......................................................................... 34 2.4.6 Employee Retention ............................................................................................ 37 2.4.7 Age as a Moderating Variable ............................................................................. 38 2.5 Empirical Review ................................................................................................. 39 2.6 Critique of the Existing Literature .......................................................................... 43 2.7 Research Gaps ...................................................................................................... 44 CHAPTER THREE ................................................................................................... 54 RESEARCH METHODOLOGY .............................................................................. 54 3.1 Introduction ............................................................................................................ 54 3.3 Target Population ................................................................................................... 55 3.4 Sampling Frame ..................................................................................................... 55 3.5 Sample size and Sampling technique .................................................................. 55 3.5.1 Sampling Techniques ........................................................................................ 57 3.6 Data Collection methods ........................................................................................ 57 3.6.1 Primary Data ........................................................................................................ 57 vi 3.7 Data Collection Procedures .................................................................................. 58 3.8 Pilot Testing ......................................................................................................... 58 3.8.1 Validity ............................................................................................................. 59 3.8.2 Reliability ............................................................................................................ 59 3.9 Data Processing and Analysis ............................................................................... 60 3.9.3 Statistical Model ................................................................................................. 60 3.9.4 Variable defination and Measurement .............................................................. 61 CHAPTER FOUR ...................................................................................................... 65 RESEARCH FINDINGS AND DISCUSSIONS ...................................................... 65 4.1 Introduction ............................................................................................................ 65 4.2 Response Rate ....................................................................................................... 65 4.3 Descriptive Results for Personal and Contextual Information ............................... 66 4.4 Reliability and Validity Analysis ........................................................................... 73 4.4.1 Reliability Analysis for competences Mapping ................................................. 73 4.4.2 Reliabilty Analysis for Employee Engagement .................................................. 75 4.4.3 Reliability Analysis for Performance Management ............................................ 76 4.4.4 Reliability Analysis for Career Development ..................................................... 78 4. 5 Descriptive Analysis for Independent and Dependent Variables .......................... 80 4.5.2 Factors influencing employee retention .............................................................. 80 4.5 2.1 Competencies Mapping on Employee Retention in State Corporations in Kenya ........................................................................................................ 80 4.5.3 Employee Engagement and Employee Retention ............................................... 87 4.5.4 Performance Management and Employee Retention .......................................... 90 4.5.5 Career Development and Employee Retention ................................................... 95 4.6 Inferential Statistics ................................................................................................ 98 vii 4.6.1 Correlation Matrix ............................................................................................... 99 4.6.2 Regression Analysis .......................................................................................... 101 4.8 Discussion of Key Findings ............................................................................... 117 CHAPTER FIVE ...................................................................................................... 125 SUMMARY, CONCLUSION AND RECOMMENDATIONS ............................ 125 5.0 Introduction ......................................................................................................... 125 5.1 Summary ........................................................................................................... 125 5.3 Conclusion ........................................................................................................... 130 5.4 Recommendations ................................................................................................ 132 5.4. Areas for Further Research .................................................................................. 134 REFERENCES ......................................................................................................... 135 APPENDICES .......................................................................................................... 139 viii LIST OF TABLES Table 3.1 Operationalization of Variables ............................................................ 64 Table 4.1 Response Rate...................................................................................... 66 Table 4.2 Objective of Talent Management Policy ............................................. 73 Table 4.4 Reliabilty Analysis for Employee Engagement .................................... 75 Table 4.5 Reliability Analysis for Performance Management ............................ 77 Table 4.6 Reliability Analysis for Career Development ...................................... 78 Table 4.7 KMO and Bartlett's Test ...................................................................... 79 Table 4.8 Organization Emphasizes importance of Different Competencies....... 81 Table 4.9 Tasks are distributed based on specific competencies .......................... 82 Table 4.10 Competencies/Skill Mapping and Talent Retention ............................ 82 Table 4.11 Tasks are distributed based on specific competencies .......................... 84 Table 4.12 Employee Engagement and Talent Retention ...................................... 88 Table 4.13 Performance Management and Employee Retention .......................... 92 Table 4.14 Career Development and Employee Retention ................................... 96 Table 4.15 Correlation Analysis ........................................................................... 100 Table 4.16 Mapping Skills and Employee Retention ANOVA ............................ 102 Table 4.17 Competences Mapping and Employee Retention Model Summary ... 103 Table 4.18 Mapping Skills and Employee Retention Regression Coefficients ... 104 Table 4.19 Employee Engagement and Employee Retention ANOVA ............... 105 Table 4.20 Employee Engagement and Employee Retention Model Summary . 106 Table 4.2 Employement Engagement and Employee Retention Regression Coefficient .......................................................................................... 108 Table 4.22 Performance Management and Employee Retention ANOVA ......... 109 ix