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Advances in Social Sciences Research Journal – Vol.7, No.9
Publication Date: September 25, 2020
DOI:10.14738/assrj.79.9169.
Mkandawire, N. C., Senaji, T. A., & Kirimi, E. K. (2020). Exploration Of Staff Incentives And Strategy Implementation In Commercial
Banks In Kenya. Advances in Social Sciences Research Journal, 7(9) 752-765.
Exploration Of Staff Incentives And Strategy Implementation In
Commercial Banks In Kenya
Nathan Chizotera Mkandawire
Thomas Anyanje Senaji
Eunice Karegi Kirimi
ABSTRACT
Though elegant strategies are formulated by organisations, their
successful implementation continues to be elusive. Empirical literature
suggests that failure of strategy at implementation state is due to factors
such as management competence, leadership and resources. However,
little attention has been directed to the relationship between incentives,
specifically staff incentives such as pay, oversight, meaningfulness of
work, employee growth as well as job security and strategy
implementation. In this this exploratory study, we examined the
perception of staff incentives and their relationship with
implementation of financial inclusion strategy in commercial banks in
Kenya using a quantitative survey of 42 respondents drawn from
commercial banks in Kenya. Financial inclusion strategies are defined
as roadmaps of agreed actions at the national or regional level, which
stakeholders chart and pursue to accomplish financial inclusion
objectives. The study’s target population was operational managers
selected from each bank randomly. We found that staff incentives
provided to bank employees ranged from being unsatisfactory to
moderately satisfactory and that financial inclusion strategy
implementation was also moderately successful in the banks. It was also
found that oversight and job security had a linear relationship with
financial inclusion strategy implementation (oversight: r = 0.336, p =
0.029; job security: r = 0.685, p < 0.001). Further, the pay negatively
affected the probability for successful implementation of financial
inclusion strategy – it reduces the likelihood by 50% (exp (B) = 0.53)
while job security increased the chances for successful implementation
of financial inclusion strategy by a factor of 2 (exp (B) =1.883). In
conclusion, based on these preliminary findings banks should consider
and improve their pay because it was found to negatively affect the
likelihood of successful implementation of financial inclusion strategy.
Secondly, since job security was found to increase the probability of
successful implementation of financial inclusion strategy management
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URL: http://dx.doi.org/10.14738/assrj.79.9169 753
Mkandawire, N. C., Senaji, T. A., & Kirimi, E. K. (2020). Exploration Of Staff Incentives And Strategy Implementation In Commercial Banks In Kenya. Advances in
Social Sciences Research Journal, 7(9) 752-765.
of banks should strive to ensure job security to enable them implement
the financial inclusion strategy hence improve the financial
performance of the banks. Consequently, the managers should improve
on the incentives that were rated as unsatisfactory or low by the
employees.
Key words: staff incentives, financial inclusion strategy, commercial banks,
Kenya.
INTRODUCTION
This study was concerned with financial inclusion strategy implementation within the wider
context of strategy implementation which is a crucial phase of strategic management process of all
organisations. According to Jeremiash Barasa Kabayi (2019), Strategic implementation is a process
that puts plans and strategies into action to reach desired goals. The strategic plan itself is a written
document that details the steps and processes needed to reach plan goals, and includes feedback
and progress reports to ensure that the plan is on track. Furthermore, Maria (2003) asserts that
Strategic management, formulation of the strategy and its implementation are important tools of
the company for its future development and for maintaining competitiveness. Therefore, achieving
defined strategy in an important and effective factor for an organization’s future success.
Strategy implementation
According to literature, almost 70% of the strategies formulated do not successfully get
implemented for various reasons. Despite the fact that strategic direction is crafted by senior
management, its implementation depends on the acceptance and agreement of all employees in the
organisation. To this end, some of the problems that restrain the fruitful implementation of strategy
include, but not limited to, lack of or insufficient support by the staff, incorrect alignment of
resources, impracticable time frames, too large gaps between the current situation and the desired
condition, predisposition by staff members to favour the status quo, lack of or insufficient
monitoring, and a situation where the formulated strategy does not engage and appeal to the staff.
The aforementioned reasons for failure to implementation strategy have received substantial
empirical investigation. Nonetheless, empirical literature is scarce on incentives to staff who are
engaged in strategy implementation and how performance is influenced by these incentives.
Financial inclusion
According to Central Bank of Morocco (2017) Financial inclusion is the ability to access to financial
services. In particular, it is important because it can contribute to sustaining economic welfare and
to reducing poverty. It also supports economic, monetary and financial stability, by making saving
and investment decisions more efficient, enhancing the transmission of monetary policy and
facilitating the functioning of the economy. Inclusive financial systems provide individuals and firms
with greater access to resources to meet their financial needs, such as saving for retirement,
investing in education, capitalizing on business opportunities, and confronting shocks. Indeed, half
of the world’s adult population lacks a bank account.
Many of the world’s poor would benefit from financial services but cannot access them due to
market failures or inadequate public policies (Global Financial Development Report, 2014).
Financial inclusion comprises access to financial services which reflect the depth of outreach of