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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
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Advances in Social Sciences Research Journal (ASSRJ) Vol.7, Issue 9, September-2020
financial services, such as the penetration of bank branches or point of sale (POS) devices in semi- urban and rural areas, or demand-side barriers that customers face to access financial institutions,
such as cost or information. In addition, it comprises usage which measure how clients use financial
services, such as the regularity and duration of the financial product/service over time (e.g. average
savings balances, number of transactions per account, number of electronic payments made).
Moreover, it touches on quality indicators by describing whether financial products and services
match clients’ needs, the range of options available (products and services) to customers. Financial
Literacy which is the extent to which outreach educational programmes are implemented by
financial institutions is also one of the indicators of Financial inclusion.
Staff incentives
An incentive is a thing that motivates or encourages someone to do something; it can be monetary
or non-monetary. It is a form of a reward either provided upfront or at the end of accomplishing a
task. Some of the staff incentives that may motivate employees of organisations to exert sufficient
effort in implementation of strategy are pay, oversight, growth opportunity, meaningfulness of
work, and job security. Since financial inclusion strategy is one such Strategy that should be
implemented if the positive outcomes of inclusive finance are to be realised, these incentives or
rewards may okay a role in increasing the chances of successful implementation of the strategy.
The context of this study was banks because they play a crucial role in expanding access to financial
servicers of the society. Financial inclusion has been found to be low particularly in the developing
world such as is the case in Africa and in Kenya in particular. As posited by theories of motivation,
human beings need to be motivated in order to engage in any activity. The motivation can be in
forms of rewards which should be linked to the expectations of those that are charged with the
responsibility to implement a strategy. Although incentives at organizational level are provided in
financial institutions, the relationship between these incentives and performance is scarcely
documented in empirical literature. Consequently, it was of interest to assess the types of staff
incentives that are provided by banks to their employees and how these incentives relate with the
effectiveness of the implementation of the financial inclusion strategy. Consistent with the purpose
of this study, an attempt was made to answer the following two research questions (RQs):
RQ1: Do financial institutions provide sufficient incentives to their staff involved in the implementation
of financial inclusion strategy by commercial banks in Kenya?
RQ2: What is the relationship between staff incentives and implementation of financial inclusion
strategy by commercial banks in Kenya?
THEORY AND HYPOTHESIS
This study drew from the Expectancy Theory of Motivation (Vroom, 1964) which deals with the
relationship between effort and expected outcome; and Hertzberg's two-factor theories which deals
with work and work place related factors that would enable staff to perform at the optimal levels.
These theories are closely linked to the study variables. While incentives given to staff (pay,
oversight, growth opportunities, meaningfulness of work and job security) are underpinned by
Herzberg Theory, performance (the implementation of financial inclusion strategy) is anchored by
the Expectancy theory which links rewards to performance. In this study, the rewards are the five
incentives while effectiveness of strategy implementation is performance.
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URL: http://dx.doi.org/10.14738/assrj.79.9169 755
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.
Further, Herzberg (1959) proposed the two-factor theory (also known as Herzberg's motivation- hygiene theory and dual-factor theory) which states that there are certain factors in the workplace
that cause job satisfaction, while a separate set of factors cause dissatisfaction. The hygiene factors
cannot be regarded as motivators. The motivational factors yield positive satisfaction. These factors
are inherent to work. These factors motivate the employees for a superior performance and are
called satisfiers. Employees find these factors intrinsically rewarding. The motivators symbolized
the psychological needs that were perceived as an additional benefit. Such factors include
performance related pay, supervision, recognition, inner sense of achievement, growth and
promotional opportunities, responsibility and meaningfulness of the work and job security.
On the other hand, Expectancy theory (or expectancy theory of motivation) posits that individual
will behave or act in a certain way because of what would be the expected result of that chosen
pattern of behaviour. In other words, the motivation to choose a certain behaviour is determined
by the desired outcome.
Drawing from Herzberg’s two factor theory of motivation and from the financial inclusion literature,
we hypothesised that staff incentives are related with implementation of financial inclusion
strategy, comprising access, usage, financial literacy and quality of financial services. In particular,
we hypothesised that the more prevalent the staff incentives, the more successful will be the
implementation of the financial inclusion strategy in commercial banks in Kenya. The incentives
were pay (salary and allowances), oversight (or supervision), growth opportunities,
meaningfulness of work and job security.
According to the World Bank Multi-country Demand-side Data Survey on financial inclusion (2014)
report, financial inclusion indicators can be used to help set national financial inclusion targets and
monitor progress in reaching them. As a result of this, when policymakers have reliable
performance indicators and survey mechanisms, they can diagnose the state of financial inclusion,
agree on targets, identify barriers, craft policies as well as monitor and measure policy impact. The
financial inclusion indicators can be grouped in four categories, namely access, usage, quality and
financial literacy as follows: -
1. Access indicators. These indicators reflect the depth of outreach of financial services, such
as the penetration of bank branches or point of sale (POS) devices in semi-urban and rural
areas, or demand-side barriers that customers face to access financial institutions, such as
cost or information.
2. Usage indicators. The second category is usage indicators which measure how clients use
financial services, such as the regularity and duration of the financial product/service over
time (e.g. average savings balances, number of transactions per account, number of
electronic payments made).
3. Quality measures. These indicators describe whether financial products and services match
clients’ needs, the range of options available (products and services) to customers.
4. Financial Literacy. This is a fourth indicator which is the extent to which outreach
educational programmes are implemented by financial institutions.
Consistent with theoretical and empirical literature on the five staff incentives and implementation
of financial inclusion strategy, we hypothesized that:
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Advances in Social Sciences Research Journal (ASSRJ) Vol.7, Issue 9, September-2020
1. H01: Commercial banks do not provide sufficient incentives to their staff involved in the
implementation of financial inclusion strategy in Kenya
2. H02: Strategic staff incentives (pay, oversight, growth opportunity, meaningfulness of work,
job security) have no significant relationship with implementation of financial inclusion
strategy in commercial in Kenya
METHODOLOGY
We conducted an exploratory descriptive survey of 42 permanent employees from commercial
banks using a structured questionnaire to collect data on five staff incentives and four proxies
(measures) of financial inclusion (access, usage, financial literacy, and quality of financial services).
Closed-ended questions were chosen because they have the following advantages: First, answers of
the questions are known in advance (Senaji, 2012) and this facilitates faster analysis, and secondly,
closed–ended questions have a better chance of being more reliable or consistent over time than
open-ended questions because respondents can select the answer that better explains their
response (Fink, 1995).
A five-point Likert type scale was used for data collection where the five possible responses were:
1=Very dissatisfied/ strongly disagree, 2=dissatisfied/disagree, 3=somewhat satisfied/agree,
4=satisfied/agree and 5=Very satisfied/ strongly agree. When performing data collection and
subsequent analysis it is important to first check whether the questionnaire is reliable (Field, 2005).
Cronbach’s alpha is a reliability coefficient that is used to evaluate whether the items on a test
instrument are consistent with one another in that they represent only one construct (Salkind,
2004).
Consequently, reliability test was carried out to determine the suitability of the questions in the
questionnaires. Since some parts of the instrument that was adopted were previously validated a
higher cut-off Cronbach alpha value of α = 0.7 or higher was be used (Nunnaly, 1978). All the
variables had a Cronbach of at least 0.7 and those that did not meet this threshold were adjusted by
deleting some of the item measured that had been included in the initial questionnaire.
RESULTS AND DISCUSSION
Questionnaires were distributed to all commercial banks and at least one response received from
each of the banks. Out of the 42 responses that were received, 32% were at management level while
68% were operation level staff.
Characteristics of respondents
The staff were asked to indicate whether they were aware of how their salaries and allowances; and
whether they had a financial including strategy. The results are presented in Table 1
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URL: http://dx.doi.org/10.14738/assrj.79.9169 757
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.
Table 1. Characteristics of respondents: name of organisation, staff level, job title/description, work
experience, gender and job description
Characteristic Frequency Percent Valid
Percent
Cumulative
Percent
Staff level
Management 14 33.3 33.3 33.3
Operational 28 66.7 66.7 100
Total 42 100 100
Work
experience
(years)
11 to 15 years 4 9.5 9.5 9.5
16 to 20 years 2 4.8 4.8 14.3
5 years or less 20 47.6 47.6 61.9
6 to 10 years 14 33.3 33.3 95.2
over 20 years 2 4.8 4.8 100
Total 42 100 100
Gender
Female 10 23.8 23.8 23.8
I identify as an Apache Attack
Helicopter 2 4.8 4.8 28.6
Male 28 66.7 66.7 95.2
Prefer not to say 2 4.8 4.8 100
Total 42 100 100
Job function description 2 4.8 4.8 4.8
Job function
description
Accounting 14 33.3 33.3 38.1
Bank insurance 2 4.8 4.8 42.9
Business Development, Operational
Risk, Customer Service 2 4.8 4.8 47.6
Customer Service Centre 2 4.8 4.8 52.4
Risk management 10 23.8 23.8 76.2
Sales 10 23.8 23.8 100
Total 42 100 100
The majority of the respondents from the surveyed commercial banks were in accounting (33.3 %)
followed by an equal number (23.8%) from risk management and sales. The lowest number of
respondents were from the bank insurance business development and customer service (4.8%). It
will also be noted that in terms of staff level, more respondents were from the operations (66.7%)
while mangers accounted for 33.3%. Those whose experience was between 5 years or less
accounted for 47.6 % whilst those who had 6 years to 10 years’ experience accounted for 33.3%. In
terms of gender, more male respondents (66.7%) participated in the study than females (23.8%).
Further, data was collected on whether the staff were aware of how salaries and allowances
determined in their bank were determined.
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Table 2. Awareness of pay, allowances and financial inclusion strategy
Frequency Percent Valid
Percent
Cumulative
Percent
I am aware of how my salary
is determined
No 6 14.3 14.3 14.3
Yes 36 85.7 85.7 100
Total 42 100 100
I am aware of how my
allowances are determined
No 10 23.8 23.8 23.8
Yes 32 76.2 76.2 100
Total 42 100 100
My institution has financial
inclusion strategy?
No 4 9.5 9.5 9.5
Yes 38 90.5 90.5 100
Total 42 100 100
If yes, what period does your
financial inclusion strategy
cover?
Long term 12 28.6 28.6 28.6
Medium term 24 57.1 57.1 85.7
Short term 6 14.3 14.3 100
Total 42 100 100
Table 3. What aspects/ programs/ projects covered by financial inclusion strategy
Frequency Percent Valid Percent Cumulative
Percent
Expanding access to
financial services
No 4 9.5 9.5 9.5
Yes 38 90.5 90.5 100
Total 42 100 100
Increasing the usage of
financial service
No 8 19 19 19
Yes 34 81 81 100
Total 42 100 100
Educating the citizens on
financial services
No 8 19 19 19
Yes 34 81 81 100
Total 42 100 100
Improving the quality of
financial services
No 2 4.8 4.8 4.8
Yes 40 95.2 95.2 100
Total 42 100 100
Status of staff incentives and financial inclusion
Data on the perception of incentives were analysed descriptively and the results are presented in
Table 4
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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.
Table 4. Status of staff Incentives and financial inclusion
Descriptive Statistics
N Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Std.
Error Statistic Std.
Error
Pay 42 3.39 0.86 -0.161 0.365 -0.728 0.717
Oversight 42 3.30 0.70 -0.261 0.365 -0.541 0.717
Growth 42 3.10 0.99 -0.634 0.365 -0.24 0.717
Meaningfulness 42 3.52 0.83 -0.861 0.365 0.137 0.717
Job security 42 3.62 0.91 -0.491 0.365 -0.263 0.717
Access 42 3.81 0.95 -0.973 0.365 0.656 0.717
Uptake 42 3.66 0.90 -0.15 0.365 -1.132 0.717
Financial literacy 42 3.15 0.53 0.651 0.365 -0.703 0.717
Quality of financial sev. 42 3.81 0.70 0.152 0.365 -0.682 0.717
Pricing of services 42 3.19 0.86 -0.867 0.365 0.132 0.717
Financial inclusion 42 3.52 0.55 0.33 0.365 -1.237 0.717
Valid N (listwise) 42
Pricing of services had not been decreasing over the period 2016 to 2018
Analytical model diagnostic tests
In order to determine the analytical approach to use on the data, both normality and
multicollinearity tests were performed on the data that was collected on the variables and the
results are presented in Table 4 and Table 5
Table 5. Normality tests
Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Financial inclusion 0.123 42 0.12 0.903 42 0.002
Pay 0.121 42 0.13 0.965 42 0.226
Oversight 0.146 42 0.02 0.945 42 0.045
Growth 0.153 42 0.01 0.911 42 0.003
Meaningfulness 0.179 42 0.00 0.92 42 0.006
Job security 0.165 42 0.01 0.951 42 0.071
a Lilliefors Significance Correction
Table 6. Collinearity statistics
Collinearity Statistics
Variable Tolerance VIF
Pay 0.791 1.264
Oversight 0.696 1.437
Growth 0.625 1.6
Meaningfulness 0.883 1.133
Job security 0.711 1.406
a Dependent Variable: Financial inclusion
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Relationship between Staff incentives and Financial Inclusion
The relationship between staff incentives and financial inclusion were assessed using correlation
analysis and the results are presented in Table 7. The staff incentives comprised pay, oversight,
opportunity for growth, meaningfulness of work and job security while those from financial
inclusion were access, uptake, financial literacy, quality and price of financial services.
Table 7. Correlation results
Correlations
1 2 3 4 5 6 7 8 9 10 11
Pay 1
Oversight .511** 1
0.001
Growth
opportunity .388* .638** 1
0.011 0.001
Meaning
fulness 0.208 .371* .656** 1
0.187 0.016 <0.001
Job security 0.11 .502** 0.301 .489** 1
0.489 <0.001 0.053 <0.001
Access to
services -0.173 -0.022 0.02 0.108 .318* 1
0.272 0.89 0.901 0.497 0.04
Uptake of
services -0.049 .408** .354* .314* .661** .728** 1
0.759 0.007 0.022 0.043 <0.001 <0.001
Financial
literacy -0.177 0.298 -0.047 -0.136 0.279 0.275 .477** 1
0.263 0.055 0.767 0.39 0.074 0.077 0.001
Quality of
financial
services
0.258 .394** -0.226 0.045 .645** 0.208 .354* .404** 1
0.098 0.01 0.149 0.778 <0.001 0.186 0.021 0.008
Pricing of
services -0.201 0.164 0.283 0.249 .437** 0.188 .417** 0.213 0.082 1
0.202 0.3 0.069 0.111 0.004 0.234 0.006 0.176 0.606
Financial
inclusion -0.108 .336* 0.146 0.204 .685** .753** .897** .617** .548** .580** 1
0.496 0.029 0.357 0.194 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001
42 42 42 42 42 42 42 42 42 42 42
** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
At 5% level of significance, the uptake of financial services was positively and significantly related
with Oversight (r = .408, p = 0.007), growth opportunity (r =.354, p = 0.022), meaningfulness of
work (r = .314, p < 0.043), and job security (r = .661, p < 0.001). It was also found that there was no
significant relationship between pay and any of the financial inclusion measures (access, uptake,
financial literacy programs, quality and pricing of services) at 5% significance level. However, there
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URL: http://dx.doi.org/10.14738/assrj.79.9169 761
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.
was a significant relationship at p <.1 between financial literacy and oversight (r = .298, p=.055 <
.1) and between financial literacy and job security (r = .279, p = .074 < .1).
There was also a significant positive relationship between access to financial services and job
security (r = .318, p = .04 < .05). Quality of financial services was positively and significantly (p < .05)
related with oversight (r = .394, p = .01) and job security (r = .645, p < .001).
Further, pay was negatively though insignificantly (p > .05) with all financial inclusion variables;
the relationship was, however significant (p < .1) with quality of service (r = .258, p = p = .098 < .1).
Lastly, the results of the correlation between staff incentives (pay, foresight, growth,
meaningfulness and job security) and the composite measure of financial inclusion comprising al
the measures of financial inclusion: access, uptake, financial literacy, quality of service and pricing
suggested that financial inclusion is only significantly related with oversight and job security
(Oversight: r = .336, p = .029 < .05; Job security: r = .685, p = < .001)
Another finding of this study based on the correlation results was that oversight was positively and
significantly (p < .05 for all correlations) related with growth, meaningfulness of work and job
security.
Job security had the strongest positive correlation with financial inclusion implying that the more
the employees felt secure, the more they would participate in activities that would promote
financial inclusion. The activities include providing education to customers, increasing access and
uptake of financial services and improving the quality of service provided to customers.
Association between Staff Incentives and Financial Inclusion
The model fit for the logistic regression showed that it was not a good fit (HL Chi-square = 17.738,
p = .028), as a result individual association between staff incentives and financial inclusion was
assessed and the results are presented in Table 8.
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Advances in Social Sciences Research Journal (ASSRJ) Vol.7, Issue 9, September-2020
Table 8. Association between staff incentives and financial inclusion
Chi-Square Tests
Value df
Asymp.
Sig. (2-
sided)
Exact Sig.
(2-sided)
Exact Sig.
(1-sided)
Point
Probability
Pay
Pearson Chi-Square .032a 1 0.857 1 0.553
Continuity Correctionb 0 1 1
Likelihood Ratio 0.032 1 0.857 1 0.553
Fisher's Exact Test 1 0.553
Linear-by-Linear
Association .032c 1 0.859 1 0.553 0.243
N of Valid Cases 42
Supervision
Pearson Chi-Square .303a 1 0.582 0.75 0.411
Continuity Correctionb 0.053 1 0.819
Likelihood Ratio 0.305 1 0.581 0.75 0.411
Fisher's Exact Test 0.75 0.411
Linear-by-Linear
Association .296c 1 0.587 0.75 0.411 0.219
N of Valid Cases 42
Growth
opportunity
Pearson Chi-Square .538a 1 0.463 0.531 0.339
Continuity Correctionb 0.17 1 0.68
Likelihood Ratio 0.537 1 0.464 0.531 0.339
Fisher's Exact Test 0.531 0.339
Linear-by-Linear
Association .526c 1 0.468 0.531 0.339 0.193
N of Valid Cases 42
Meaning
fulness
Pearson Chi-Square 1.167a 1 0.28 0.353 0.223
Continuity Correctionb 0.585 1 0.444
Likelihood Ratio 1.179 1 0.278 0.353 0.223
Fisher's Exact Test 0.353 0.223
Linear-by-Linear
Association 1.139c 1 0.286 0.353 0.223 0.142
N of Valid Cases 42
Job security
Pearson Chi-Square 9.726a 1 0.002 0.003 0.002
Continuity Correctionb 7.827 1 0.005
Likelihood Ratio 10.661 1 0.001 0.003 0.002
Fisher's Exact Test 0.003 0.002
Linear-by-Linear
Association 9.494c 1 0.002 0.003 0.002 0.002
N of Valid Cases 42
b Computed only for a 2x2 table
c The standardized statistic is 3.081.
The results (Table 8) which comprise chi-square statistics for the association between incentives
and financial inclusion strategy implementation suggests that all staff incentives were significantly
(p > .05 for pay, supervision, growth and meaningfulness of Wirk) associated with financial
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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.
inclusion at 5% significance level except job security (p = .002 < .05). The strongest association is
between pay and performance, followed by supervision, growth opportunity, and meaningfulness
of work being performed.
Influence of staff incentives on financial inclusion
Since some of the diagnostic tests on the variables suggested that the data on the variables (except
pay: K-S = 0.12, p = 0.13 > 0.05; S-W = 0.965, p = 0.226 > 0.05) was significantly different from a
normal distribution, linear regression analytical model assumptions were not fully satisfied leading
to the use of nonlinear regression analysis using the binary logit. To do this the composite financial
inclusion measure was computed and coded as binary (y*) as follows depending on whether
financial inclusion the composite mean, y was rated as satisfactory (y* = 1: y >3.5) or unsatisfactory
(y* = 0: y <= 3.5).
f∗ = £ 1, 0§ f > 3.5 (14q01§4ßqBCf)
0, Bqh©CTM01© ( ́214q01§4ßqBCf)
The results of the binary logistic regression analysis which relates the incentives and strategy
implementation are presented in Table 9a, b and c.
Table 9. Logistic regression results
Table 9a: Model Summary
Step -2 Log likelihood Cox & Snell R Square Nagelkerke R Square
1 26.302a 0.523 0.702
a Estimation terminated at iteration number 7 because parameter estimates changed by less
than .001.
Table 9b. Classification observations
Classification Tablea
Observed
Predicted
Financial inclusion_BIN Percentage Correct
Step
1
Financial inclusion_bin
0 1
0 20 4 83.3
1 4 14 77.8
Overall Percentage 81
a The cut value is .500
0=satisfactory, 1=unsatisfactory
Table 9c. Coefficients
Variables in the Equation
B S.E. Wald Df Sig. Exp(B)
Step 1a
Pay -0.635 0.258 6.069 1 0.014 0.53
Oversight 0.378 0.268 1.993 1 0.158 1.459
Growth opportunity -0.087 0.35 0.062 1 0.804 0.917
Meaningfulness -0.185 0.342 0.292 1 0.589 0.831
Job security 0.633 0.229 7.672 1 0.006 1.883
Constant -8.568 4.45 3.707 1 0.054 <0.001
a Variable(s) entered on step 1: Pay, Oversight, Growth opportunity, Meaningfulness, Job security
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The results in Table 9 suggest that pay significantly reduced the odds for successful implementation
of financial inclusion by half (β = -0.635, Wald = 6.069, p = .014 < .05; exp (B) = 0.53). However, job
security would increase the odds of financial inclusion twofold (β = 0.633, Wald = 7.672, p = .006 <
.05; exp (B) = 1.883). Supervision increased the odds of financial inclusion with a factor of 1.5 (exp
(B) = 1.459) which was not significant (p = .158 > .05)
It was also found that meaningfulness of work and oversight was neither associated with nor
predicted the odds for success successful implementation of financial inclusion strategy in banks.
This implies that either the two incentives were not sufficiently provided by the banks to a level that
would impact implementation of the financial inclusion strategy or they were not perceived as being
important by the bank employees.
Consequently, while the pay decreased the odds for successful implementation of financial inclusion
strategy by a factor of 2 (B = -0.635, p = 0.014, exp (B) = 0.53), job security increased the odds by
almost two fold (B = 0.633, p = 0.006, exp (B) = 1.883). It is concluded that the level of pay in the
banks has a negative effect on the implementation of financial inclusion strategy which job security
increases the probability of successful implementation of financial inclusion strategy in banks.
CONCLUSION AND RECOMMENDATION
From the logistic regression results (Table 9) two of the incentives pay and supervision (or
oversight) were significantly associated with success of implementation of financial inclusion
strategy. Further, pay and job security significantly affected the odds for financial inclusion strategy
implementation in banks.
Based on the results of this study, its concluded that staff incentives provided to bank employees
range from being unsatisfactory to moderately satisfactory and that financial inclusion strategy
implementation is also moderately satisfactory in the banks. Further, the pay negatively affects the
odds for successful implementation of financial inclusion strategy – it reduces the odds by 50% (exp
(B) = 0.53) while job security increased the odds for successful implementation of financial
inclusion strategy.
Based on the findings of the study, banks should consider and improve their pay because it was
found to negatively affect the odds for successful implementation of financial inclusion strategy.
Secondly, since job security was found to increase the odds for successful implementation of
financial inclusion strategy by a factor of two (exp (B) = 1.883), management of banks should strive
to ensure job security of the employees because if the employees find their jobs secure, they will be
more likely to implement the financial inclusion strategy hence improve the financial performance
of the banks. Further, these findings suggest that the staff incentives are provided to a low to
moderate extent which may not have been motivating the employees highly enough to significantly
affect strategy implementation as measured by the success of financial inclusion strategy
implementation. Consequently, the managers should improve on the incentives that were rated as
unsatisfactory or low by the employees.
References
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Marrakech, Morocco.
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URL: http://dx.doi.org/10.14738/assrj.79.9169 765
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