A total compensation system provides pay that is sufficient to attract and retain key employees and keep them motivated to perform with the best of their competencies. Unless the total compensation program is perceived as internally fair and externally competitive, good employees are likely to leave (Jackson & Schuler, 2005).The purpose of this study therefore was to analyse the effects of employee compensation strategies on employee commitment. The research hypothesis for the study were; Ho1 employee compensation ‘strategies’ has no significant effect on employee commitment. The study employed a case study research design that was conducted at Moi Teaching and Referral Hospital. The target population was three thousand two hundred (3200) respondents were targeted because that was the group highly affected by commitment and turnover issues in the organisation. A sample size of 340 was extracted from the target population and the sampling techniques used were stratified sampling for the departments working in and simple random sampling for the individual respondents. Data was analyzed using Statistical Package for Social Sciences (Software). Multiple regression analyses were used to test the hypotheses. Exploratory factor analysis, specifically principal component analysis was conducted to reduce the variables to a manageable size. The cronbach’s alpha reliability obtained was 0.623. Regression analysis was performed to test the hypothesized relationships. Based on the observed correlation results, employee compensation (β = 0.172, p<0.01) was the strongest predictor of employee commitment). The findings indicated that there was a significant positive correlation between employee compensation and their commitment for Ho1, results indicate that there was a significant positive correlation between employee Compensation (r=0.194, p<0.01) and Empowerment (r=0.231, p<0.01). This implies that the perceived empowerment of employees by the hospital was likely to impact positively on their commitment to the hospital.
This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License