Abstract:
The general objective of the study was to determine the level of compensation on employee
motivation at kolfe keranio sub city administration office. This study was guided by three
research objectives namely: to establish the methods used to determine employee’s
compensation at kolfe keranio sub city administration office, to establish the extent to which
direct financial motivation affect employee’s motivation at kolfe keranio sub city
administration office, and to establish the extent to which benefits affect employee’s
motivation at kolfe keranio sub city administration office. The study used descriptive and
explanatory research design. A sample of 244 respondents was selected out of 914 total
populations using stratified sampling technique. A structured questionnaire was used to
collect data from the respondents. The data was analyzed using the Statistical Package for
Social Sciences (SPSS) It was interpreted in using means, standard deviation, percentage,
frequency, tables, figures, correlations, and ANOVA. The study found that many of the
respondents were not very familiar with the methods used to determine employee
compensation. In particular they were not well-known with the compensation plan used in
the organization. The respondents however, agreed that their jobs were not well defined.
With regard, to the extent to which financial payments affect employee’s motivation, the
respondents were impressively aware of all entitlements both basic and other conditional
payments. The level of motivation was relatively low and the respondents felt that their
motivation levels would be raised if their basic pay were to be increased. The response on
compensation for employee motivation was negatively high. There were however, a small
percentage of respondents who were either not sure, how the financial payments received
affected their motivation. In relation to the effect of benefits on employee’s motivation, the
study showed that there was a low level of awareness of benefits entitled to the respondents.
Thus, the study recommends the organization that a proper system of compensation plan has
to be developed. The organization, further, suggested ensuring that key information on staff
and compensation is deliberately communicated to them. This helps to improve the level of
