INFLUENCE OF EMPLOYEE ENGAGEMENT ON PERFORMANCE AT KENYA

REVENUE AUTHORITY

JUDY WAMAITHA CHEGE

RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF

ENTREPRENEURSHIP, TECHNOLOGY, LEADERSHIP AND MANAGEMENT IN
THE SCHOOL OF ENTREPRENEURSHIP, PROCUREMENT AND MANAGEMENT
IN THE COLLEGE OF HUMAN RESOURCE DEVELOPMENT IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF
SCIENCE IN HUMAN RESOURCE MANAGEMENT DEGREE OF JOMO KENYATTA
UNIVERSITY OF AGRICULTURE AND TECHNOLOGY

JANUARY, 2018
 DECLARATION
This research project is my original work and has not been submitted for award of degree in any
university.

Signature…………………………………………. Date………………………………………

Judy Wamaitha Chege

HD213-2109/2014

This research project has been submitted for examination with my approval as university
supervisor.

Signature…………………………………………. Date………………………………………

Dr. Alice Simiyu

JKUAT, Kenya

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 DEDICATION
This research project is dedicated to my father, Geoffrey Chege and my mother Lillian Chege, my
siblings, Grace and Sarah for their support and encouragement.

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 ACKNOWLEDGEMENT
Foremost, I would like to thank my lecturers who have taught me since first year and equipped me
with knowledge that has helped me greatly in the development of this topic and also the whole
project. I would also like to thank my supervisor, Dr. Alice Simiyu, for her guidance and great
support throughout the writing of this project. I appreciate my classmates also who were of great
help in their own way. I would also like to thank the management of Kenya Revenue Authority for
allowing me to conduct my research.

I would also like to thank my parents Geoffrey and Lillian Chege who have tirelessly paid my
school fees and provided a lot of emotional support. I appreciate my siblings too for their concern
about the progress of this project. Above all, I would like to thank God for life, sustenance and
strength throughout this period.

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 TABLE OF CONTENTS
DECLARATION........................................................................................................................... ii
DEDICATION.............................................................................................................................. iii
ACKNOWLEDGEMENT ........................................................................................................... iv
LIST OF FIGURES .................................................................................................................... vii
LIST OF TABLES ..................................................................................................................... viii
LIST OF APPENDICES ............................................................................................................. ix
LIST OF ABBREVIATIONS AND ACRONYMS .................................................................... x
DEFINITION OF TERMS.......................................................................................................... xi
ABSTRACT ................................................................................................................................. xii
CHAPTER ONE ........................................................................................................................... 1
INTRODUCTION......................................................................................................................... 1
1.1 Background to the study ....................................................................................................... 1
1.2 Statement of the Problem ..................................................................................................... 5
1.3 Objectives of the Study ......................................................................................................... 7
1.3.1 General objectives of the Study ..................................................................................... 7
1.3.2 Specific objectives of the study ..................................................................................... 7
1.4 Research questions ................................................................................................................ 7
1.5 Significance of the study....................................................................................................... 7
1.6 Scope of the study ................................................................................................................. 8
1.7. Limitations of the study……………………………………………………………………8

CHAPTER TWO ............................................................................................................................ 9

LITERATURE REVIEW ............................................................................................................... 9
2.1. Introduction .......................................................................................................................... 9
2.2. Theoretical framework ......................................................................................................... 9
2.2.1. Social exchange theory ................................................................................................. 9
2.2.2. Herzberg’s two factor theory ...................................................................................... 11
2.3. Conceptual framework ....................................................................................................... 13
2.4. Empirical literature review ................................................................................................ 16
2.5. Critique of existing literature review ................................................................................. 18
2.6. Research gap ...................................................................................................................... 19
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 2.7. Summary ............................................................................................................................ 19
CHAPTER THREE ...................................................................................................................... 20
RESEARCH METHODOLOGY.................................................................................................. 20
3.1. Introduction ........................................................................................................................ 20
3.2. Research design ................................................................................................................. 20
3.3. Target population ............................................................................................................... 20
3.4. Sampling technique and sample size ................................................................................. 20
3.5. Data collection instruments................................................................................................ 21
3.6. Data collection procedure .................................................................................................. 21
3.7. Pilot study .......................................................................................................................... 22
3.8. Data analysis and presentation ........................................................................................... 23
CHAPTER
FOUR………………………………………………………………………………..24

FINDINGS AND DISCUSSION……………………………………………………………….24

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

REFERENCES ............................................................................................................................ 38
LETTER OF INTRODUCTION…………………………………………………………………

QUESTIONNAIRE .......................................................................Error! Bookmark not defined.

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 LIST OF FIGURES
Figure 2.1 Conceptual framework…………………………………………………………13

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 LIST OF TABLES
Table 3.1. Fall’s Rule of Thumb…………………………………………………………………21

Table 4.1. Gender of the respondents…………………………………………………………….24

Table 4.2. Age of the respondents………………………………………………………………..25

Table 4.3 Departments of the respondents………………………………………………………..26

Table 4.4. Work positions of the respondents…………………………………………………….27

Table 4.5. Work experience of the respondents…………………………………………………..28

Table 4.6. Academic qualifications of respondents………………………………………………28

Table 4.7. Influence of communication in KRA…………………………………………………29

Table 4.8. Influence of forms of recognition in KRA……………………………………………30

Table 4.9. Influence of organizational values in KRA……………………………………………31

Table 4.10. Performance of KRA………………………………………………………………...32

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 LIST OF APPENDICES
Appendix I Letter of Introduction……………………………………………………………40

Appendix II Questionnaire……………………………………………………………………41

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 LIST OF ABBREVIATIONS AND ACRONYMS
CSS- Corporate Support Services

DTD- Domestic Taxes Department

KRA- Kenya Revenue Authority

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 DEFINITION OF TERMS
Employee engagement - According to Schmidt (1993), employee engagement refers to an
employee’s involvement with, commitment to and satisfaction with work. This involves a
heightened emotional connection that an employee feels for the organization that he or she works
for. This heightened connection influences the employee to exert greater discretionary effort to his
or her work.

Workplace communication – It is defined as the process of exchanging information, whether

verbal on non-verbal with the organization (Deluliis & David, 2016). It further involves the
transmitting of information between one person or group or another person or group within an
organization.

Employee recognition – It is defined as the acknowledgement of an individual or team’s behavior,

effort and accomplishments that support the organizational goals and values (Nelson & Bob,
1994). This is an effort that is towards making sure that employees know that their hard work is
valued.

Organizational values – According to Rokeach (1973), an organizational value is a belief that a

specific mode of conduct is preferable to an opposite or contrary “mode of conduct”.
Organizational values represent a framework for how organizations do things and direct the
process of organizational development and growth. They further relate to how organizations deal
with their beliefs about people and work. Values include teamwork, honesty, excellence,
commitment, service, personal development among others.

Organizational performance -According to Lebans and Euske (2011), organizational

performance is defined as a set of financial and non-financial indicators which offer information
on the degree of achievement of objectives and results.

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 ABSTRACT
Employee engagement is becoming a popular term in organizations today. It is becoming
increasingly to enhance the commitment, involvement and participation of employees in the
organization in order to improve performance of any organization in the present day society.
Effectively engaging employees means ensuring the emotional commitment of the employees to
the organization. This study sought to investigate the influence of employee engagement on the
performance of Kenya Revenue Authority. It also sought to determine the influence of
communication on performance at KRA, to determine the influence of recognition on the
performance of KRA and to determine the influence of organizational values on the performance
of KRA. This study adopted a case study design where employees’ views and opinions were
analyzed in order to determine the influence of employee engagement on performance of KRA.
The Authority has about 1200 employees at the Headquarters. A sample of 60 respondents were
selected using stratified random sampling. The data collection instrument that was used was a
questionnaire. The data collected using the questionnaires was analyzed by making use of
frequencies and percentages. Findings were presented using tables and figures.

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 CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Employee engagement is defined as the emotional commitment that an employee has to the
organization and also to its goals (Kruse, 2012). According to Schmidt (1993), employee
engagement is referred to as an employee’s involvement with, commitment to and satisfaction with
work. It has also been referred to as the heightened emotional connection that an employee feels
for his or her organization, which influences him or her to exert greater discretionary effort to his
or her work. Some of the aspects of employee engagement include communication, recognition
and organizational values. Workplace communication is defined as the process of exchanging
information, whether verbal or non-verbal within the organization (Deluliis& David, 2016).
Recognition is the timely formal or informal acknowledgement of a an individual or team
behavior, workplace effort or a business result that supports organizational goals and values and
that has clearly been beyond normal expectations (Nelson & Bob, 1994)

Employee engagement is a relatively new concept that is a property of the relationship between
the organization and its employees. It is a concept that emerged in the 1990s as a concept of
management theory. In those times it was closely associated with employee commitment or
employee involvement. However, recent studies have considered employee engagement as a
concept on its own with several elements or drivers that contribute to its success. These elements
include involvement, commitment, communication, recognition, career advancement
opportunities among others.

Employee engagement is a concept that is becoming increasingly used in the workplace today. The
need to engage workers at a deeper level is becoming necessary in this age where most employees
seem to hate their work and are always looking forward to the end of their shifts. Employers are
looking for ways to engage employees by even looking into the kind of environment that is likely
to engage them and seeking employees’ opinion on the same. Heatherfield in her study on the role
of the employer in employee engagement states four important things that an employer who is
committed to engagement should pay attention to. These include measuring the performance of

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employees and holding them accountable, providing communication that is necessary in aligning
employees’ actions to the overall business goals, providing employee development necessary for
success and finally making a commitment to continuously engage employees.

Employee engagement today has taken a focus on people as an important resource in any
organization that is striving for success. This is because organizations have realized that people
are one of the resources that can bring about sustained competitive advantage. Better products,
services, technologies, cost structures are all elements that can contribute to superior performance
for any organization. However they can all be replicated. For instance another company can be
able to adopt better technology or better products which can enable it to beat competitors. In as
much as this strategy would work to the company’s advantage for a given time, it cannot be
sustained. This necessitates the need for a workforce that can enable the given organization to
continuously remain better than its competitors.

According to Aon Hewitt’s 2012 Trends in Global Engagement Survey, global engagement levels
were at 58% in 2011, up two percentage points from 56%in 2010. Asia Pacific scored 58%, Europe
52%, Latin America 71 % and North America 64%. This survey covered more than 9.7 million
employees in 3100 organizations across Asia Pacific, Europe, Latin America and North America.

Africa has not been left behind as far as employee engagement is concerned. A recently published
survey by Emergence Growth in partnership with Aon Hewitt showed that employee engagement
inSub-Saharan Africa scored higher than other regions of the world. This survey that was
conducted in 2013 revealed that seventy two percent of the employees in the Sub-Saharan Africa
are considered engaged. The study considered over 300 000 employees from seventy five different
organizations as participants. The key drivers of employee engagement that were considered in
this survey were work processes, employee benefits, career opportunities, company culture, quality
of work life and relationships with managers and peers.

This study by Aon Hewitt in Africa also revealed the significance of engagement improvements
being applied in consultation with employees and also the need to be relevant to the unique needs
of the organization’s diverse workforce. Organizations in Africa are realizing that it is difficult to
engage employees without consulting them or even making an attempt to look into their need for

2
engagement. Hence organizations should not adopt a “template type, one-size-fits-all approaches”
since employee engagement is not a rigid process but it is rather flexible.

A new development concerning employee engagement in Africa is the increased access to reliable
engagement data. It is no longer like in previous times when employee engagement was a relatively
new term in the continent and was considered as a practice of the developed continents. This
increase in access to data has resulted in the empowerment of HR practitioners to play a strategic
role in identifying those interventions that support the attraction and retention of key talent in their
organizations. The practitioners are looking further into working with leadership or management
in crafting employee value propositions that add value with an emphasis of customization of
appropriate solutions that connect with and enable employees who are at different life stages and
have different needs.

Organizations in most parts of Africa are currently experiencing staff turnover due to the global
economic crisis. This crisis has also contributed to limit career advancement opportunities for
certain industries. At the same time, scarce skills and top performing employees have continued
to be in demand. This has made engagement of employees to be very critical to a company’s
sustainability. This is because if this top performing employee with specialized skills is not
adequately engaged, he or she is likely to move to another organization that promises to fulfill the
specific needs of the employee involved. Organizations are continuously realizing that issues that
revolve around transparency, trust, ethical business practices, teamwork, recognition and rewards
and career development are equally important as competitive pay and benefits in order to
encourage attraction and retention of key skills.

The demand for highly skilled individuals has not only increased in Africa but also in the whole
world. The shortage of highly skilled individuals with experience has been described as a global
phenomenon. This has made many both in the continent and in the whole globe to resort to head
hunting of key staff. Over the years there has been a tremendous increase in high value employees
applying for positions both locally and abroad. It is not surprising to find an organization in Africa
with a breed of highly qualified employees from all over the world. This has awakened proactive
employers to begin identifying unique ways of creating an attractive value proposition for their
staff in order to curb the exit of these highly skilled workers.

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It is important to note that employees who know their value and the contribution they are making
to the organization are less likely to continue to stay in an organization that reduces its benefits
haphazardly, has low salary increases or limited career development opportunities. Employees are
increasingly expecting more value from their employers. When they fail to get the value they
expect, they are moving on to greener pastures.

In Kenya, employee engagement has become a popular term. It is also responding to the same
issues of employee turnover, economic crisis, and demand of highly skilled employees among
other issues that pertain to employee engagement in the whole of Africa. Big organizations that
have large HR departments have resorted in setting up a unit that is meant to deal with employee
engagement matters only. For instance Kenya Revenue Authority recently introduced an
Employee Engagement unit under its HR department. This clearly shows the increased demand
for highly engaged employees since most organizations have realized it is the only way to achieve
sustained competitive advantage. It has also been considered as a powerful tool to measure a
company’s vigor and orientation towards superior performance.

Many organizations in Kenya have been able to improve on the quality of their services to
customers as most of them have adopted customer focused approaches. However, the challenge of
creating motivated and engaged employees who can drive the organizations still stands. Employees
have been seen to be critical to goal achievement hence managers have to consider employee
engagement since it is related to quality of service and performance of work. In order to create an
environment that is foe employee engagement and satisfaction, it is very important to know which
factors affect employee engagement most (Heartfiled, 2012). Hence organizations are endeavoring
to spend time, money and energy on programs, processes and factors that will have a positive
impact on employee engagement.

Kenya Revenue Authority is Kenya’s revenue collection authority which was established by an
Act of Parliament on July 1st Cap. 469 for the purpose of enhancing the mobilization of government
revenue while at the same time providing effective tax administration and sustainability in revenue
collection. The Authority’s Board and Management has since its inception spent time and
resources setting up systems, procedures and adopting new strategies that are aimed at enhancing
the operational efficiency of the Authority’s processes.

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The organization performs three main functions which include assessing, collecting and
accounting for all revenues in accordance with the written laws and the specified provisions of the
written laws. Secondly, the authority advises on matters relating to the administration of, and
collection of revenue under the written laws or the specified provisions of the written laws. Lastly,
it performs other functions in relation to revenue as the Minister may direct. Kenya Revenue
Authority is located at Times Tower building. This building serves as the headquarters. It also has
regional offices in the Rift Valley, Central region, and Eastern Region, Western and Northern
regions. It also has offices at the border points around the country so as to facilitate the collection
of revenue throughout the country.

Kenya Revenue Authority is headed by a Commissioner General and a Board of Directors. There
are commissioners who head the various divisions. They are deputized by Deputy Commissioners
who head the departments. They are then followed by Chief Managers, managers, assistant
manager, supervisors and support staff. The Authority consists of about five thousand employees
who work at the headquarters, at the regional offices and at the border points.

1.2 Statement of the Problem

Performance measures exclusively used financial performance but over time have drifted to non-
financial measures as a means of accommodating the multi-dimensionality of performance
(Namada, Aosa, Awino&Wainaina, 2014). Edward (2011) advocated for the idea of making use
of different performance measures to cater for this multi-dimensionality of performance because
one type is an inadequate measure. Hence when organizational performance is going well, it is
likely to be characterized by increased quantity and quality of services, efficient use of
organizational resources, increased responsiveness through customer and employee satisfaction
and democratic outcomes expressed through increased accountability and participation (Boyne,
2002). It is true to say that poor organizational performance results to low output, lack of
efficiency, low customer and employee satisfaction and low accountability and participation.

Organization communication is very instrumental in facilitating engaged employees. According to

a study conducted by Wyatt (2007-08), there is a strong correlation between effective employee
communication and superior organization performance. In a study that seeks to explore the
management of psychological contract, Guest & Conway (2002) report that their results justify
stressing the importance of communication that is directly related to daily work, accuracy of
5
instructions given or quality of feedback about an employee’s work. Communication at KRA is
also contributing to the disengagement of employees. The Authority has about five thousand
employees around the country and the challenge of maintaining effective communication even to
the employee at Malaba is looming. This challenge has contributed to low engagement levels as
engagement goes hand in hand with communication.

Employee recognition is becoming a powerful avenue that is being used for exerting positive
change in the workplace including engagement. One study suggests that 41% of the variation in
employee engagement can be attributed to the strength of recognition an employee receives. It is
believed that that if programs in the work place are made more strategic and leveraging on peer-
peer recognition is done, with the support of top management, companies can be able to optimize
on the return of investment on the programs. Recognition at KRA is done through awards,
commendation letters or praise. However these methods of recognition are not very popular with
all the employees.

Organizational values have been known to have a direct impact on performance. Many
organizations today have organizational statements that are meant to communicate the values to
the employees. However, in KRA values are beautifully mounted on the walls but they have not
all been translated to the behavior of employees. Therefore, there is a great need to “practice” what
you preach” as far as organizational values are concerned (Rich, LePine & Crawford, 2010). KRA
has adopted a popular slogan for its values that is very easy to remember. It is referred to as
“KUWA TECH”. This is to drive employees to be Trustworthy, Ethical, Helpful and Competent.
The Authority has greatly improved in terms of being helpful to their clients where Tax services
have been taken closer to the customers through Itax and also customer care centers. However,
much is yet to be done particularly pertaining to ethics as the Authority deals with numerous
disciplinary cases especially those to do with compromised officers. The values that the
organization believes in have not all been embraced by the employees.

Kenya Revenue Authority which is the organization under study has an engagement level that is
between 15-20%. This clearly shows that it is performing below average as far as engagement is
concerned. Most of the employees are not emotionally committed to the organization. The
management of KRA has realized the need for engagement in the organization and has established
an Employee Engagement Unit under the Human Resource Division in a bid to enhance
6
engagement levels in the organization. As of then no extensive study had been conducted on the
specific influence of communication, recognition and organizational values on the performance of
Kenya Revenue Authority. Hence this study sought to fill this knowledge gap with the guidance
of the following research questions, what is the influence of communication, recognition and
organizational values as aspects of employee engagement on the performance of Kenya Revenue
Authority.

1.3 Objectives of the Study

1.3.1 General objectives of the Study

The general objective of the study was to examine the influence of employee engagement on
performance of Kenya Revenue Authority.

1.3.2 Specific objectives of the study

1. To determine the influence of communication on the performance of Kenya Revenue
Authority
2. To assess the influence of recognition on the performance of Kenya Revenue Authority
3. To examine the influence of organizational values on the performance of Kenya Revenue
Authority

1.4 Research questions

1. What is the influence of communication on the performance of Kenya Revenue Authority?
2. What is the influence of recognition on the performance of Kenya Revenue Authority?
3. What is the influence of organizational values on the performance of Kenya Revenue
Authority?

1.5 Significance of the study

The findings of this study will be beneficial to the management of KRA in the following ways.
First, the findings on communication will help to improve internal communication in a way that
can effectively ensure an increase in the employee engagement levels. Secondly, the findings on
recognition will help the Authority to develop effective recognition methods that will help to
enhance the emotional commitment of its employees. Thirdly, it will assist the management in
developing organizational values that will create a strong organization culture that is critical for
employee engagement. Consequently, all these findings will help to improve the overall
performance of the organization.
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They findings of the study will help the government as a policy maker to draw policies on
employee engagement.

The findings will also be useful to other researchers who can use them to build their literature
review or replicate the study in other organizations.

1.6 Scope of the study

The study was conducted in Kenya Revenue Authority Headquarters in Nairobi. The study targeted
the employees who work in the Headquarters at Times Tower, Nairobi.

1.7 Limitations of the Study

Obtaining approval for conducting research at the Kenya Revenue Authority took quite some time.
I ensured I maintained contact with the staff there in order to get the progress report and even went
there in person to do a follow up. The study was also limited to the fact that its credibility was
dependent on the responses given by the respondents. This meant trusting that the respondents
were being genuine and open in the giving of their responses.

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 CHAPTER TWO

LITERATURE REVIEW

2.1. Introduction
This chapter presents a theoretical framework, conceptual framework, empirical literature review,
critique of existing literature, research gap and it ends with a summary.

2.2. Theoretical framework

The theoretical framework is a structure that can support a theory of a research study. It introduces
and describes the theory which explains why the research problem exists. A theoretical framework
comprises of concepts, their definitions and the existing theory or theories that are used for the
particular study (Toracco, 2011). He continues to say that theories are formulated to explain,
predict and phenomena and in many cases, to challenge and extend existing knowledge while at
the same time being within the limits of the critical bounding assumption. Therefore, the researcher
in this study will review some of the theories that are relevant to this study.

2.2.1. Social exchange theory

This is one of the most influential paradigms for understanding workplace behavior whose roots
can be traced back to the 1920s (Malinowski, 1922). This theory bridges disciplines such as
anthropology, social psychology and sociology (Blau, 1964). There are many different views of
social exchange but theorists have a common agreement that social exchange involves a series of
interactions that generate obligation (Emerson 1976). These interactions within the social
exchange theory are seen as interdependent and contingent on the actions of another person (Blau
1964). He also emphasizes that the independent transactions have the potential to create high
quality relationships. According to Molm, Peterson & Takahashi (1999), the value of this theory
has been felt in many diverse areas which include social power, networks, organizational justice,
psychological contracts, and leadership among many others.

This theory suggests that the relationship between the employer and the employee is one based on
reciprocity. Employees who feel that they are treated well by the employer respond by exerting
discretionary effort on behalf of the employer in form of increased levels of engagement.
According to (Saks 2006), engagement is one of the ways that employees use to “repay” the
organization. This clearly brings out the concept of reciprocity between the employer and the

9
employee whereby the employees will choose to engage themselves in varying degrees and in
response to the resources that they receive from the organization. The kind of reciprocation of
employees can be seen in the extent, to which they are involved in their work roles and also the
degree of devotion of their cognitive, emotional and physical resources to the organization (Kahn,
1990).

The social exchange theory continues to say that one of its basic tenens is that relationships evolve
over time to become loyal, trusting and mutual commitments. In order for this to happen, there
should be rules of exchange which are adopted by the participants in the exchange relation who in
this case include the employees and the management. Some of the rules that have been suggested
include the rule of reciprocity and the rule of negotiated rules.

The rule of reciprocity is one of the best known rules of exchange. According to Gouldner (1960),
reciprocity is seen to be of three distinct types which include reciprocity as interdependent
exchanges, reciprocity as a folk belief and as a moral norm. Reciprocity as independent exchanges
is referred to as a combination of the effort of all parties involved (Homans, 1961). This means
that interdependence differs from independence which is based on one’s solo effort and
dependence whose outcomes are based on another’s effort. Hence, interdependence is a mutual
and complementary arrangement which makes it a key characteristic of the Social exchange
theory.

This aspect of interdependence in reciprocity is essential in employee engagement. This is because

for communication to be effective in the organization, it ought to involve all the parties involve
which means that feedback from all parties is also very essential in effective engagement of
employees. The interdependence also ought to be seen in the commitment to the organizational
values of the organization. This means that the organizational values should be acceptable to the
employees as a result of a mutual and a complementary arrangement. Consequently, both the
employees and the management should be committed to them. Lastly, recognition of the
employees should also be a function of interdependence whereby the forms of recognition used
should be acceptable and relevant to the employees in order for effective engagement to be
attained.

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The second aspect of reciprocity is reciprocity as a folk belief which involves the cultural
expectation that people get what they deserve (Gouldner, 1960). This mainly applies to recognition
in the organization whereby it is believed that the employees should be recognized according to
the measures that they have achieved. This means that unfair recognition is determined and
employees are adequately recognized according to the effort and results that they have delivered.
According to Trip (1996), this folk belief also helps to discourage destructive behavior since
people believe that people get what they deserve. This means that wrong actions are “rewarded”
by punishment which can play a key role in ensuring that employees adhere to organizational
values and are reluctant in doing what is contrary to them. According to Molm, Takahashi and
Peterson (2000), reciprocity tends to produce better work relationships than negotiations and
enables individuals to be more trusting and committed to one another.

The rule of negotiated rules in the exchange theory involves negotiating rules in the hope of
reaching a beneficial arrangement (Cook, Emerson & Gillmore 1983). Here the duties and
obligations exchanged by the parties are detailed and understood by the parties. Negotiated rules
are applicable in negotiating on channels and modes of communication, modes of recognition and
commitment to organizational values.

These negotiated rules can be applied in communication whereby the management and the
employees can engage in discussions in order to come up with effective communication channels
that are beneficial to both parties and contribute to overall achievement of organizational goals.
The duties of management should be outlined and so should the obligations of the employees in
order to enhance communication. These negotiated rules can also be applied in recognition where
the employees express what they consider important to them in terms of recognition and also what
the management values in recognition. These discussions are useful in establishing effective forms
of recognition that help to increase employee morale and improve performance. Organizational
values should also be part of the negotiation in order to ensure commitment of the employees to
the values. This commitment can only be enhanced if the employees are involved in the discussions
and duties and obligations of both parties are specified.

2.2.2. Herzberg’s two factor theory

This theory of motivation was published by Herzberg in 1959. This was after he conducted a study
that consisted of interview with 203 accountants who were chosen because of their growing
11
importance in the business world. Herzberg used the critical incident method and he asked subjects
to relate times when they felt exceptionally good or exceptionally bad about their present or
previous jobs (Mullins, 2012). They were also asked to give reasons and a description of events
giving rise to that feeling. The responses that were obtained were relatively consistent and they
showed that there were two different sets of factors that affect motivation and work and they led
to Herzberg’s two factor theory of motivation and job satisfaction.

According to Herzberg the two sets of factors that influence job satisfaction are hygiene factors
and motivators or growth factors. Hygiene factors are those that if absent in the job cause
dissatisfaction. They are the factors which are related to the job context and are concerned with
the job environment and extrinsic to the job itself. According to Mullins (2012), hygiene factors
serve to prevent dissatisfaction. On the other hand motivators or growth factors are those if present
serve to motivate the individual to increased effort and performance. The strength of these growth
factors cause feelings of satisfaction or no satisfaction, but do not cause feelings of dissatisfaction.

Hygiene factors have roughly been related to Maslow’s lower level needs while motivators are
roughly linked to Maslow’s higher level needs (Herzberg et al 1959). Maslow’s lower level needs
include physiological and safety needs and hygiene factors are those that are necessary to avoid
unpleasantness at work and to avoid unfair treatment at work. Hygiene factors include supervision,
interpersonal relations, salaries, company policy, and administration among others. Motivators on
the other hand include factors such as achievement, recognition, work itself, responsibility and
advancement. The satisfaction of hygiene needs helps to prevent dissatisfaction and poor
performance but only the satisfaction of the motivators or growth factors is able to lead to the
improved productivity sought by employers.

Recognition is hence a motivator or a growth factor that is crucial in improving performance or

productivity. According to Ryan and Deci (2000), recognition plays an intrinsic and extrinsic
motivation role because it initiates the will to spend compensatory effort and at the same time
satisfies the basic human need for autonomy and relatedness. Communication and feedback on the
other hand is also a hygiene factor whose absence leads to unpleasantness at work. It is a factor
that should be looked into in order to achieve improved productivity as it increases job competence
and social support that satisfies autonomy and relatedness. Organizational values are also hygiene
factors that should be aligned to employee values in order to ensure a favorable work environment.
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2.3. Conceptual framework
This conceptual framework explains the relationship between the independent variable and the
dependent variable. In this study, the independent variable is employee engagement which is
operationalized by communication, recognition and organizational values. The dependent variable
is operationalized by customer satisfaction, revenue collection and employee satisfaction.

Figure 2.1. Conceptual Framework

Communication

 Horizontal
Performance
 Vertical
 Customer
Recognition
Satisfaction
 Awards  Revenue
 Praises collection
 Employee
Organizational values satisfaction

 Core values
 Vision and
mission

Independent variables Dependent variable

2.3.1. Communication
According to Deluliis and David (2016), communication is the process of exchanging information
from one person to another whether verbal or non-verbal. According to Haiemann (2011),
communication is viewed as the imparting of ideas and making oneself to be understood by others.
This means that information is passed on between individuals and or organizations and making
use of previously agreed signs. Communication occurs in many levels such as intra-individual,
inter-individual, intra-group, inter-group levels of communication among others. Effective
communication then becomes the process by which the sender of the message receives feedback
from the receiver in intended (Peter, 2015). It begins from the sender to its decoding by the
receiver. It is then said to be ineffective when the receiver of the message did not decode the
13
intended of the speaker. It is through feedback that information achieves its desired results.
According to Berrels (2010), effective communication only takes place when the person to whom
it is intended, the receiver, understands the intended meaning and responds or reacts accordingly.

Communication at the workplace takes place in various forms which include writing, reading,
listening or even moving any part of the body. According to Shannon and Weaver (1949), the
communication process consists of seven distinct steps. These include; the message, encoding,
transmitting, receiving, decoding, understanding and feedback. This communication process is
also seen in organizations where these distinct steps are applied in the upward, downward and
horizontal communication that takes place in the organization. Horizontal communication links
related tasks, work units and divisions in the organization and helps to increase task specialization
and diversity in organization structure. Downward communication provides information from
higher levels to lower levels and follows the chain of command while upward communication
serves as a control system for the organization.

2.3.2. Recognition
According to Nelson and Bob (1994), employee recognition is defined as the acknowledgement of
an individual or team’s behavior, effort and accomplishments that support the organizational goals
and values. It is the open acknowledgement and expressed appreciation for an employee’s
contribution to the organization. Employee recognition is an important source of employee
motivation that is used in the workplace that focuses on the esteem needs of an employee. This is
drawn from the Maslow’s hierarchy of needs that recognizes the need for employees to meet
esteem needs. These esteem needs are also referred to as ego needs which involve the desire for
confidence, strength, freedom, independence and achievement. The esteem of others usually
involves reputation, prestige, recognition, attention or appreciation. According to Mullins (2010),
recognition is related to intrinsic motivation which in turn relates to psychological rewards.

There are two aspects of employee recognition which involve first identifying the opportunity to
praise someone which is followed by the actual action of acknowledgement or praise for the work
done. This acknowledgement is taking various forms in the organizations today in both formal and
informal ways. Some of the forms of recognition used include; a sincere thank you for a job well
done, a personal note, recognition of an employee in the company’s newsletter, staff parties that
recognize employee achievements, creation of a recognition bulletin board among others.
14
2.3.3. Organizational values
According to Kenny (2014), every organization has its own value system just like every human
community has its own value system which establishes a relationship between individual values
and those of the organization. The creation of organizational values is seen as a process of
following the philosophy of the company that is embedded in the culture of the organization
(Pfeiffer, Goodstein & Nolan 1985). Hence, organizational values evolve from aspects of
organization culture such as the code of conduct, the vision and mission, communication styles
and decision making styles within the organization. According to Pavlin and Svetlik (2014),
organization values that are affirmed by the management are a good foundation that helps to inspire
employees towards creative energy that pushes the organization forward towards desired goals.

Organizational values should be agreed upon on a broader circle within the organization (Simmerly
1987). This means that the values should not be created by the top management only but that the
creation process should also involve other levels in the organization. According to Lesnik (2006),
there are more advantages of a broader consensus on organizational values as it incorporates the
values of the members of the organization for an agreement to be reached on the common values
of the organization. It is important for the values to be communicated to the employees as they
have a direct impact on the performance of tasks and the lack of communication can be a source
of conflict between the employees and management. Examples of organizational values include
teamwork, honesty, commitment, excellence, recognition, customer service and personal
development among others.

2.3.4. Performance
According to Lebans and Euske (2011), organizational performance is defined as a set of financial
and non-financial indicators which offer information on the degree of achievement of objectives
and results. This means that performance relates to how successfully an organization with a
particular purpose performs its function or functions. High organizational performance is a result
of all parts of the organization working together to achieve great results. In this case the
communication in the workplace, the forms of recognition and the organizational values should all
be highly effective in order for high performance to be realized. The organizational values should
support the achievement of the strategic objectives for effective engagement of all the employees.
Secondly, the reward structures should also reinforce the culture and support the organizational

15
goals. Thirdly the communication at the workplace should follow clear and reliable channels and
should involve feedback in order to ensure that it enhances overall organizational performance.

Revenue generation is a key measure of performance. Kenya Revenue Authority mainly deals with
revenue collection as the source of its income. Each financial year the Authority defines targets
for the revenue it should collect. This means that the revenue it collects is a key measure of how
KRA performs. Secondly the measure of customer satisfaction is very important for the Authority.
In as much as it is a revenue collecting body, it has strived to streamline its operations in order to
improve on the satisfaction of the customers. This has been done through bringing services closer
to the customer, holding customer service weeks and responding to customer complaints among
other numerous ways. Thirdly, the Authority considers the satisfaction of its employees very
crucial to its overall performance. This is ensured through effective recognition, communication
and increased commitment to organization values.

2.4. Empirical literature review

2.4.1. Recognition and performance

According to Nelson (2005), recognition for a job well done is the top motivator of employee
performance. According to a natural field experiment in Germany conducted by Bradler, Dur and
Neckerman on behalf of the German Research Institute on the casual effect of recognition on
performance proved that recognition of employees causes a statistically and economically
significant increase in performance. This has been echoed by another study by Bersins&
Associates, a human resources firm in 2012 that suggested that organizations that excelled at
employee recognition are on average 12 times more likely to generate better performance in
comparison to their peers. It further revealed that organizations where recognition occurs,
employee engagement, productivity and customer service was about 14% better than in companies
that did not recognize employees well.

Another study by Grant and Gino (2010) revealed that a manager’s verbal expression of gratitude
affects employees’ effort and strong positive effects. This study sought to explain the impact of
gratitude expressions on pro-social behavior. Hence this study showed that gratitude is an
important element of recognition and it goes a long way in improving performance. According to
Azmat, Ghazala and Iriberi (2010) there is a great significance in the performance feedback
16
information that is provided on the people involved. This study was conducted in a natural field
experiment in a school in London with an aim of establishing the importance of providing feedback
information to employees.

2.4.2. Communication and performance

According to a study done by Watson Watt’s communication survey in the United States in 2009,
organizations that communicated effectively had a 47% higher return to shareholders over a five
year period. This study further revealed the link between communication and three levers of
performance which included courage, innovation and discipline. Courage referred to telling things
as they are, innovation referred to communication of a creative culture and discipline referred to
accountability. This study emphasized the need for the management to cover these three
dimensions for high performance to be achieved. Another study that was conducted on Singapore
airlines in 2007 sought to establish the role of internal communication and training on the Airline.
Interestingly, this study that used self-reported surveys demonstrated the effectiveness of training
but was not able to link high performance with the internal communication in the Airlines (Chong
2007).

Here in Africa a study conducted on the role of effective communication on the performance of
NnamdiAzikiwe University, Akwa in 2015 revealed that effective communication should be
highly recommended to every organization in other sectors of the economy (Chidibiere, Nwankwo
&Okwonkwo 2015). It further stated that any management of both parastatals and private
companies that desires success and efficiency of its workforce should be highly conscious of
implementing effective communication programs to their employees for better performance. It
emphasized practical and not theoretical communication programs for improved performance.
According to Bery, Otieno, Waiganjo and Njeri (2015), in a study that explored the effect of
employee communication on organizational performance in Kenya’s horticultural sector,
communication is a major determinant of performance. The study found that communication
facilitates exchange of information and opinion within the organization and that it helps in
improving operational efficiency and consequently organizational performance.

2.4.3. Organizational values and performance

According to a study by the Interdisciplinary Journal of Contemporary Research in Business in
2012, organizational culture has a direct impact on the performance of employees that can cause
17
productivity and enhance its performance (Gallagher, 2008). According to this study there is a
strong correlation between culture and performance improvement. Another study in the Telkom
Sector in the United States indicated that all the dimensions of culture had an influence on
organizational performance.

In Africa a study was conducted on the influence of organizational values on the performance of
Covenant University in Nigeria in 2015 (Motilewa et al 2015). This study found that the
university’s core values provided a platform for its processes to achieve the desired goal and
change. The fact that the core values were embedded in the university has been linked to its good
performance and being ranked as one of the best universities in Nigeria and West Africa. In Kenya
a study conducted in East African Breweries Limited on the effect of organizational culture on
performance also revealed that there is a relationship between organizational culture and
performance (Thuku, Abiero&Juma, 2016). It was further revealed that a market culture was the
most crucial of the organizational values as the organization exists solely to do business and make
profits with a few attentions to the employees.

2.5. Critique of existing literature review

The existing literature shown above indicates that there is a relationship between communication,
recognition and organizational values on performance. However there exist certain differences.
For example the study conducted on Singapore Airlines revealed that communication did not have
a direct impact on performance. However, a study that was conducted in the Kenya’s horticultural
sector revealed that there was a direct impact of communication on performance. Secondly the
study carried out by Watson in 2009 emphasized that workplace communication ought to cut
across three levers of performance which include courage, innovation and discipline while the rest
of the studies on communication did not reveal this.

The study done in East African Breweries Limited emphasized the importance of a market culture
which is an indicator that profit-making organizations consider profits as very crucial to their
performance. This means that even their core values are directed towards profit making and there’s
no major emphasis on employees. However this is in contrary to the study in Covenant University
that attributed improved performance to the embedding of organizational values on the employees.
The difference can be seen in the culture of the two organizations, one being a purely profit making

18
organization and the other being a University that is more concerned with the impartment of
knowledge on its customers and long term success through its students.

2.6. Research gap

There seems to be a research gap on the impact of employee engagement on the performance of
Kenya Revenue Authority while making use of sub variables such as communication, recognition
and organizational values.

2.7. Summary
This literature review has relied on the Social Exchange Theory and also the Herzberg’s Two
Factor Theory. The Social Exchange theory suggests that the relationship between the employer
and the employer is one that is based on reciprocity. This means that employees tend to reciprocate
the actions of the employer. Herzberg’s two factor theory on the other hand suggests that there are
two sets of factors that influence motivation of employees and they are hygiene factors and growth
or motivators. The conceptual framework in this study seeks to establish the relationship between
communication, organizational values and recognition on performance. Various studies have been
done both locally and globally in attempt to establish the inter-relationship between the above sub-
variables and the performance of the organization. This study will seek to investigate the influence
of employee engagement at Kenya Revenue Authority which is a study that has not been conducted
before.

19
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1. Introduction
This chapter presents the research design, the target population, sampling frame, sampling
technique and sample size, data collection instruments, data collection procedure and data analysis.

3.2. Research design

According to Kothari (2004), a research design refers to the advance planning of the methods to
be adopted for collecting the relevant data and the techniques to be used in their analysis. He
further describes a research design as a design that seeks to portray accurately the characteristics
of a particular individual, situation or a group. This research used a case study design which is a
design that seeks to describe a unit in details in context holistically. This design was appropriate
for this research as focused on the relationship between employee engagement and performance
of Kenya Revenue Authority. The research further looked into the influence of workplace
communication, employee recognition and organizational values on overall performance of the
Authority.

3.3. Target population

According to Saunders et al (2009), population refers to the total collection of elements on which
the researcher wants to make inferences. The population in this case was the employees of Kenya
Revenue Authority who work at the Headquarters in Nairobi. The Authority has about 1200
employees who are of different gender and work in different departments.

3.4. Sampling technique and sample size

According to Cooper (2001), sampling is the process of selecting a number of individuals for a
study in such a way that the individual represents a large group from which they are selected. The
sample size selected should be selected by the extent to which it represents the whole population.
The researcher analyzes the findings from the sample and uses them to generalize the findings
from the target population.

Gay (1987) suggests 10% of large populations and 20% of small populations as minimums. Fall
(1984) suggests that as as a rule of “thumb”, sampling can be done as indicated in the Table 3.1.

20
 Size of Population Sampling percent
0-100 100%
101-1000 10%
1001-5000 5%
5001-10000 3%
10000 + 1%
Table 3.1. Fall’s Rule of Thumb

This study used a sample size of 60 respondents. This is in consideration of the 1200 employees
who work in the Authority’s headquarters. Five percent of the total population, with reference to
Fall’s thumb rule would result to 60 respondents.

According to Cooper and Schindler (2001), sampling technique involves the division of population
into smaller groups called strata. Sampling techniques involve the methods that are used to draw
respondents or samples that participate in research. This study used stratified random sampling
where the target population was divided into small segments or strata. In this research, the
segments were the various departments in the organization. The number of respondents selected
in each department was equal.

3.5. Data collection instruments

According to Kothari (2004), data collection instrument are devices that are used to collect data.
The instrument that was used in this study is questionnaire. A questionnaire is a document
consisting of a number of questions printed or typed in a definite order on a form or set of forms.
It is a tool that is used to address specific sub-variables of the study. The questionnaire included
structured questions and matrix questions.

3.6. Data collection procedure

The researcher obtained a letter of introduction from the University which was used to seek
permission to administer questionnaires at KRA. After permission was granted, the sixty
questionnaires were sent via email to the employees selected for the study in the organization while
others were physically distributed. The questionnaires were accompanied by the approval letter. A
follow up was made after one week to confirm that the questionnaires had been fully completed
21
and mailed back promptly. These questionnaires were used to collect primary data after which
document analysis was used to collect secondary data from existing records for dependent variable
indicators. The dependent variable indicators include customer satisfaction, revenue generation
and employee satisfaction.

3.7. Pilot study

According to Mugenda and Mugenda (2003), a sample of 1-10% of the total sample size is
adequate for the pilot study. The researcher administered the questionnaire to six respondents
which is 10% of the sample size. The feedback obtained was used to improve the questionnaire
for use in the main study. The pilot study was useful as it helped to minimize errors in the
questionnaire. However, a pilot study cannot help to eliminate all systematic errors or unexpected
problems but can only reduce the possibility of a type one or type two error.
3.7.1Validity
This is the degree to which a study accurately reflects or the specific concept that the researcher
is attempting to measure (Mugenda and Mugenda, 1999). It is the degree to which results
obtained from the analysis of data actually represent the phenomenon being studied. Validity of
the results can either be internal or external. Internal validity refers to the accuracy of the results
obtained while external validity refers to the analysis of the findings with regard to whether they
can be generalized (Ghauri and Gronhaug, 2005).
In this study validity was taken into consideration. Since the questionnaire was constructed by
the researcher, it was designed on the basis of the researcher’s needs in relation to the study topic
and was advantageous in that it measured exactly what the researcher intended to measure. The
researcher therefore did not need to depend on other researchers for information on problem
areas and relevance of the items included in the questionnaire.
3.7.2 Reliability
Reliability refers to the degree of consistency and precision or accuracy that a measuring
instrument demonstrates. It also means the extent to which an experiment, test, or any measuring
procedure yields the same result on repeated trials (Mugenda, 1999). According to Ghauri and
Gronhaug, (2005), reliability refers to the stability of the measure that is used to study the
relationships between variables. The questionnaire was designed taking into consideration the
issues related to the problem and goals of the study and theories on the subject. It is therefore
believed that the responses and results from this study were reliable.
22
3.8. Data analysis and presentation
Data processing will be done through sorting questionnaires, editing, coding, scoring,
classification and tabulation. In this study, frequencies and percentages were generated in order to
describe the findings and show the relationship between and among variables. The findings were
presented using tables for easier interpretation.

23
 CHAPTER FOUR
FINDINGS AND DISCUSSION
4.1. Introduction
This chapter presents the research findings made on the data collected and analyzed based on the
specific objectives of the study which include the influence of communication on the performance
of Kenya Revenue Authority; the influence of recognition on the performance of Kenya Revenue
Authority and the influence of organizational values on the performance of Kenya Revenue
Authority.

4.2. Response rate

A total of 60 questionnaires were administered from which 45 questionnaires were completely
filled in and returned. This resulted to a response rate of 75% which is adequate according to
Mugenda and Mugenda (2003). Based on this assertion the response rate was considered to be
good and data analysis could hence be carried out.

4.3. Demographic characteristics of the respondents

This part of the research required the respondents to indicate their gender, age, department,
position in the organization, level of academic qualification and the duration that they have
worked in the organization. These findings are represented in the sections below.

4.3.1. Gender of the respondents

The study sought to find the gender of the respondents. The findings are presented in the Table
4.1. This study showed that 54% of the respondents were male while 46% were female. This is
an indication that there are slightly more male respondents than female respondents. This shows
that KRA is an equal opportunity employer.

24
Table 4.1: Gender of the Respondents

Gender Frequency Percentage (%)

Male 24 54%

Female 21 46%

Total 45 100%

4.3.2. Age of the respondents

The study sought to find out the age of the respondents. The findings are shown in Table 4.2. The
results show that 25% of the employees are between 20-30 years, 35% of the employees are
between 31-40 years, 25% of the employees are between 41-50 years and 15% of the employees
are of age 51 years and above. This is a distribution of the employees across all age brackets and
this enables them to make diverse contributions to the organizations.
Table 4.2: Age of the Respondents

Age Frequency Percentage (%)

20 – 30 years 11 25%

31 – 40 years 16 35%

41 – 50 years 11 25%

51 years and above 7 15%

Total 45 100%

25
4.3.3. Departments of the respondents
The study sought to find out the departments that the respondents work in. These findings are
illustrated in Table 4.3. Kenya Revenue Authority has ten departments that work together to
achieve the goals of the organization. From the results shown, 4.4% of the respondents were drawn
from the Office of the CG, 11.36% were drawn from Customs and Border Control, 15.55% from
Domestic Taxes, 2.22% from Investigations and Enforcement, 8.89% from Legal and Border
Control, 6.67% from SIRM, 6.67% from Intelligence Operations, 22.22% from Corporate Support
Services, 13.33% from Marketing and Communication, and 8.89% from KESRA. This shows that
the largest number of responses was drawn from the Corporate Support Services Department
which is the one of the core functions of the organization. This is one of the largest departments
with seven sub-divisions which include Information and Communication Technology Division,
Human Resource Division, Procurement and Supplies Division, Administration and Logistics
Division, Regional Offices Division and Security Division.

Table 4.3: Department of the Respondents

Department Frequency Percentage (%)

Office of the CG 2 4.44%

Customs and Border Control 5 11.36%
Domestic Taxes 7 15.55%
Investigation and Enforcement 1 2.22 %
Legal and Border Control 4 8.89%
Strategy and Risk (SIRM) 3 6.67%
Intelligence Operations 3 6.67%
Corporate Support Services 10 22.22%
Marketing and Communication 6 13.33%
KESRA 4 8.89%
Total 45 100%

26
4.3.4. Work positions of the respondents
The study sought to find out the work positions of the respondents and the findings are illustrated
in the table 4.4. From the responses, 15.55 respondents were from the top management, 40% were
from the middle level, 26.67% from the lower level and 17.78% from the Support staff.

Table 4.4. Work positions

Category of Management Frequency Percentage (%)

Top level 7 15.55%

Middle level 18 40%

Lower level 12 26.67%

Support staff 8 17.78%

Total 45 100%

4.3.5. Work experience of the respondents

This part of the study sought to find out the duration for which the respondents have worked at the
Authority. The findings are illustrated in Table 4.5. The responses showed that 24.44% of the
respondents have worked for the organization for a period of between 1-5 years, 20% of the
respondents had worked for 6-9 years, and 33.33% had worked for a period of between 11-15 years
while 22.23 respondents had worked for a period of 16 years and above. It can be observed that
most employees have worked for the organization for 11- 15 years and 16 years and above. This
shows that the organization has a high employee retention level. This could mean that the
organization has made significant steps in enhancing employee engagement in the organization
which means that employees are more committed to the organization.

27
Table 4.5: Work Experience of the Respondents

Work Experience Frequency Percentage (%)

1 – 5 years 11 24.44%

6 – 10 years 9 20%

11 – 15 years 15 33.33%

16 years and above 10 22.23%

Total 45 100%

4.3.6. Academic qualifications of respondents

The study sought to find the academic qualifications of the respondents and the findings are
illustrated in Table 4.6. 4.44% of the respondents hold high school certificates, 11.11% hold
college certificates, 17.78% hold diplomas, and 44.45% hold bachelor degrees while 22.22% hold
post graduate degrees. Most employees irrespective of their cadre seem to hold bachelor’s degrees
which shows that the organization has highly qualified staff.

28
Table 4.6: Academic qualification

Academic qualification Frequency Percentage (%)

High school Certificate 2 4.44%

College certificate 5 11.11%

Diploma 8 17.78%

Degree 20 44.45%

Post graduate 10 22.22%

Total 45 100%

4.4. Influence of communication on organizational performance

This study sought to find out to what extent communication influences the performance of KRA.
The study specifically considered attributes of communication such as vertical and horizontal
communication. Respondents were asked to state the various communication methods in the
organization and whether or not they were satisfied with these methods. 61% of the respondents
were satisfied with the communication processes while 39% were dissatisfied as shown in Table
4.7. The main methods of communication outlined by the respondents included emails sent through
a communication software known as Lotus, memos and in some cases text messages.

29
Table 4.7: Types of Communication

Response Frequency Percentage (%)

Satisfied 27 61%

Not satisfied 18 39%

Total 45 100%

These findings show that the methods of communication in use in the organization are preferred
by 61% of the employees while 39% feel that there is more that can be done for communication
to be satisfactory amongst a greater majority of the employees. It is also clear that communication
is a vital element of organization performance. According to Quirke (2005), building of effective
communication networks is very important in raising the standards of performance. This brings
about the idea of organizations establishing effective channels of communication both horizontal
and vertical in order to enhance performance.
From the responses provided, there is a clear indication that communication in the organization is
less of face-face interactions as a result of the embracing technology and using emails as the main
communication tool. It can be deduced that this communication tools may not be auguring well
with the 39% who are dissatisfied and seem to feel that face to face interactions should complement
emails and memo. This means that face to face communication between management and
employees should not be completely disregarded or replaced. It is therefore important to have open
communication channels that enhance timely and objective feedback and efficient flow of circulars
memos and emails

4.5. Influence of recognition on organizational performance

This study sought to find out the extent to which recognition influences performance of the
Authority. It specifically considered attributes of recognition that employees are given such as
awards at the end of year staff party, management’s acknowledgement of individual employee
effort, appreciation letters and the extent to which recognition meets individual needs of
30
employees. From the analyzed responses, 11.11% of the respondents strongly agreed that the forms
of the recognition used in the organization influence overall organizational performance while
40% of them agreed and 26.67% of the respondents were neutral. 13.33% of the respondents
disagreed and 8.89% strongly disagreed which constitutes 22.22% of the total respondents.
Table 4.8. Forms of recognition
Response Frequency Percentage (%)

Strongly agree 5 11.11%

Agree 18 40%

Neutral 12 26.67%

Disagree 6 13.33%

Strongly disagree 4 8.89%

Total 45 100%

These findings show that 51.11% of the respondents feel that recognition and the techniques used
is satisfactory. Recognition is vital in the success of the organization and when employees feel that
they are being recognized for their contribution of delivering results which in turn increases their
sense of usefulness, effort-reward balance, effectiveness and value to the organization (Siegrist
1996). This means that for performance to be improved, there is need to streamline recognition to
the individual needs of the employees. This in order to ensure that efforts are made to effectively
recognize the efforts of the 26.67% that feel neutral and the 22.22% that are dissatisfied in order
to enhance performance.

4.6. Influence of organizational values on organizational performance

The study sought to investigate the influence of the values that the organization has put in place
on the overall performance of the organization. This section considered attributes such as
management’s commitment to the values, whether the management is consistent in its treatment
of the employees in line with the values, employees’ knowledge of the values, the extent to which

31
the values have been communicated, whether the employees take pride in the values, whether they
are reminded of the values and finally the extent to which the values contribute to the Authority’s
performance. From the responses provided, 31.11% of the respondents strongly agreed that
organizational values influence performance, 46.67% agreed, 11.11% were neutral while 6.67%
disagreed and 4.44% strongly disagreed as shown in Table 4.9.
Table 4.9. Influence of organizational values
Response Frequency Percentage (%)

Strongly agree 14 31.11%

Agree 21 46.67%

Neutral 5 11.11%

Disagree 3 6.67%

Strongly disagree 2 4.44%

Total 45 100%

Values are an important element of organization culture which is very instrumental in

organizational success. According to Kotter (2012), organization culture has the ability to increase
job satisfaction and awareness about problem solving and organizational performance. Having 35
of the respondents which is 77.78% agreeing on the influence of the values of KRA to their
performance is a clear indication that the organization is headed in the right direction since
employees seem to be embracing the values and the management not only communicates the
values but also is keen on treating employees in a manner consistent with the values.

4.7. Performance of Kenya Revenue Authority

This study sought to determine the performance of the Authority and it focused on attributes such
as tax payer satisfaction with services offered to them, the promptness in responding to taxpayers’
complaints, the compliments employees receive from taxpayers, whether the Authority collects
maximum revenue, whether employees are happy with the hours of work and finally whether
employees are happy with the work conditions. From the responses 80% of the respondents

32
expressed satisfaction with the performance of the organization while 20 % of the respondents
expressed dissatisfaction in terms of revenue collection as shown in Table 4.10.
Table 4.10. Performance of Kenya Revenue Authority

Indicator Frequency Percentage

Satisfied Dissatisfied Satisfied Dissatisfied
Employee Satisfaction 29 16 64.44% 35.56%

Revenue collection 36 9 80% 20%

Customer satisfaction 33 12 73.33% 26.67%

Kenya Revenue Authority main core activity is collecting of revenue and this is why it was
established as the main revenue collection Authority in Kenya. This is why the revenue it collects
in every financial year is a key indicator of its success. 80% of the respondents felt that the
organization is collecting maximum revenue while 20% felt that more effort needs to be put to tap
into online revenue collection, employing more people in the Domestic Taxes Department and
applying stricter penalties on revenue defaulters.
Employee satisfaction was also used as an indicator of performance and 64.44% of the respondents
expressed satisfaction while 35.56% expressed dissatisfaction. Employee satisfaction considered
two aspects which include whether the employees are satisfied with the working conditions and
the hours of work. The 35.56% of the respondents suggested flexi-hours especially for young
mothers, improved work spaces to accommodate all employees, provision of adequate working
equipment and policies for work life balance in order to improve morale.
Customer satisfaction was the other indicator that was considered. The chief customer of the
Authority is the taxpayer and consequently the taxpayer satisfaction is a key indicator of the
Authority’s overall performance. According to the responses provided 73.33% of the respondents
expressed satisfaction which is a lower index compared to the 83.3% which was as a result of a
recent survey. This could be attributed to the large number of respondents being from the CSS
department and not the DTD that deals directly with the respondents. However, the improved

33
customer satisfaction rate over the years can be attributed to regional offices and online responses
to clients that has helped to address as many complaints as possible.
Employee satisfaction, customer satisfaction and revenue generation that were used as indicators
in these study show that they are vital for the performance of any organization. According to a
study by Simiyu (2012), which was conducted on performance contract as a tool for improving
performance in local authorities in Kenya, it concluded that performance contracting had enhanced
performance of local authorities in the areas of customer satisfaction, employee satisfaction and
revenue generation. It further showed that customer satisfaction, employee satisfaction and
revenue generation were growing over the years as performance contracts continued to be
administered annually and monitored through quarterly.

34
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1. Introduction
This chapter presents a summary of the research findings, the conclusions and recommendations
are drawn from specific objectives.
5.2. Summary
5.2.1. Influence of communication on organizational performance
Respondents stated the main channels of communication in use in the Authority as memos, emails
sent through Lotus software and text messages in case of urgent communication. According to the
study 61% of the population expressed satisfaction with the communication channels used in the
organization while 39% of the respondents expressed dissatisfaction. A number of employees
stated that they preferred face to face interaction with seniors and in some cases one on one reviews
in order for performance to be enhanced.
5.2.2. Influence of recognition on organizational performance
From the findings 11.11% of the respondents strongly agreed that the forms of the recognition
used in the organization influence overall organizational performance while 40% of them agreed
and 26.67% of the respondents were neutral. 13.33% of the respondents disagreed and 8.89%
strongly disagreed on the influence of forms of recognition in use in the organization and their
impact on performance.
5.2.3. Influence of organizational values on organizational performance
From the responses analyzed on the influence of organizational values on the performance of
Kenya Revenue Authority, 31.11% of the respondents strongly agreed that organizational values
influence performance, 46.67% agreed, 11.11% were neutral while 6.67% disagreed and 4.44%
strongly disagreed. The influence of these values was rated based on indicators such as
management’s commitment to the values, management’s communication of values, role of values
in improving performance, employees’ knowledge of core values and whether employees are
proud of the organizational values.
5.2.4. Performance of Kenya Revenue Authority
The indicators of performance that were considered in this study were revenue collection,
employee satisfaction and customer satisfaction. 64.44% of the respondents stated that they were
feeling satisfied while 35.56% of the respondents expressed dissatisfaction with the working
35
conditions and the hours of work in the organization. 80% of the respondents were satisfied with
revenue collection in the organization while 20% felt that the organization has more to do in order
to maximize on collection of revenue. On the third index of customer satisfaction, 73.33% of the
respondents stated that customers are satisfied with the services rendered by staff in the
organization while 26.67% were dissatisfied with customer satisfaction in the organization.

5.3. Conclusions
The study concludes that there is a significant influence of employee engagement on organizational
performance. This is in consideration of the three indicators used to measure employee
engagement at Kenya Revenue Authority which include communication, recognition and
organizational values. Majority of the employees agree that communication influences their
performance in the organization. They also agree that recognition influences their performance
and others acknowledged the influence of organizational values on performance However, some
were neutral when it came to answering the question on the influence of organizational values on
performance while others were also neutral when it came to responding to the question on the
influence of recognition on performance.

5.4. Recommendations
From the findings obtained in this study some employees were dissatisfied with how
communication is carried out in the organization, others disagreed with the forms of recognition
in the organization while others disagreed on the influence of organizational values on their
performance as per the indicators that were provided. It is also important to note that some were
neutral when asked on the influence of recognition on their performance while others were neutral
when asked about the influence of organizational values on their performance. In addition, others
were dissatisfied with employee satisfaction levels, some were dissatisfied with revenue collection
and others were dissatisfied with customer satisfaction levels.
These dissatisfaction levels show that there is still more to be done in order to make improvements
and increase performance. The Authority therefore ought to improve face to face communication
and tele-conferencing as was expressed by a number of respondents. Recognition can also be
improved by enhancing individual employee recognition as opposed to collective recognition.
Respondents also suggested regular, objective and equal opportunities for change in group as some
36
felt that they were in a job group for too long despite qualifying for the next job group. Hence the
organization needs to build in a consistent framework for recognition and specifically one that
provides equal opportunity to every employee. Thirdly, the organization needs to ensure that the
organizational values are being upheld by every employee as it is still grappling with high in
disciplinary cases especially in the Custom and Domestic Taxes Departments. Every effort should
be made to enhance their commitment and eventually engagement for performance to be improved.
Finally the organization should look into flexi-hours for the young mothers or even consider in-
house daycare in order to enhance their commitment and improve performance. Tele-commuting
can also be considered as this technological age can allow some employees to work from home
and this can go a long way in reducing congestion at the office, cutting on some allowances and
improving performance among employees who do not need to be at the office in order to perform.

5.5. Areas of further research

Researchers should do a further study on the influence of employee engagement on the
performance of KRA using correlation and regression analysis. Since this research was limited to
KRA, further research should also be conducted on the influence of employee engagement on the
performance of government organizations. Further research can also be conducted on private firms
and non-governmental organizations in order to make comparison and also contrast findings. This
study was also limited to recognition, communication and organizational values and their influence
on performance. Other factors can be identified and their influence on organizational performance
studied

37
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APPENDICES

APPENDIX ONE: LETTER OF INTRODUCTION

13th October, 2017

To Respondent,

Dear Sir/Madam,
RE: Effect of Employee Engagement on the Performance of Kenya Revenue Authority
I am a 4th year student at Jomo Kenyatta University of Agriculture and Technology pursuing a
Bachelor of Science Degree in Human Resource Management. I am undertaking a research project
as part of my fourth year coursework on the influence of employee engagement on the performance
41
of KRA. You have been selected as one of the respondents in the study. I am hereby requesting
you to spare sometime to fill in the attached questionnaire. The information provided in the
questionnaire will be kept confidential and used for academic purposes only. A copy of the final
research will be availed to you upon request.
Thank you in advance for your co-operation.
Yours faithfully,

Judy Wamaitha Chege

APPENDIX TWO: QUESTIONNAIRE

I am Judy Wamaitha Chege, a fourth year student at Jomo Kenyatta University of Agriculture
and Technology undertaking a Bachelor of Science degree in Human Resource Management. I
am undertaking a research at Kenya Revenue Authority on the Influence of Employee
Engagement on the Performance of the Authority. This research is part of my fourth year
coursework. The responses provided will be used for academic purposes only and will be treated
with utmost confidence. Kindly provide the responses.
Section A: Bio-data
Please tick appropriately.
What is your gender? Male Female

What is your age bracket? 20-30 31-40 41-50 50 and above

42
Which department do you work in? ..................................................................................................

What is your position in the organization?

........................................................................................

For how long have you worked at KRA?

0-5 years 6-10 years 11-15 years above 16 years

What are your academic qualifications?

Secondary level Certificate Diploma Degree Post-graduate

SECTION B

1. Does the top management communicate with the employees in this organization? (Tick one)
Yes No
If yes, what media is used? ………………………………………………………………....

If no, why? ............................................................................................................................

2. Are you satisfied with the type of communication in the organization? (Tick one)
Yes No
If yes, what are you satisfied with?
.............................................................................................

………………………………………………………………………………………………………
……………………………………………………………….....
If no, what are you dissatisfied with?
………………………………………………………....

43
………………………………………………………………………………………………………
…………………………………………………
3. Do you think that communication can improve in the organization? (Tick one)
Yes No
4. Suggest any improvements you would like to be done in order to better communication in
this organization………………………………………………………………………………...
......................................................................................................................................................
5. Indicate your opinion on employee recognition by management based on the rating scale
provided below.
(1) Strongly agree (2) Agree (3) Neutral (4) Disagree (5) Strongly disagree

Statement 1 2 3 4 5
Management acknowledges employees’
outstanding efforts
Recognition is linked to the needs of
individual employees
Appreciation letters are effective in
recognition of employee efforts
Awards given to employees during the
annual staff party are significant in
employee recognition
Management allows peer to peer recognition
in the organization
Recognition given to employees improves
individual performance at KRA

6. Indicate what you would want to be improved to make you feel appreciated in the
organization……………………………………………………………………………………

44
 …………………………………………………………………………………………………
…………………………………………………………………………………………………
7. Do you have values at KRA? (Tick one)
Yes No
If yes, indicate some of
them………………………………………………................................

…………………………………………………………………………………...........................

………………………………………………………………………………………………………
…………………………………………………………………….

8. Indicate your opinion on the values used in the organization based on the rating scale
provided below.
(1) Strongly agree (2) Agree (3) Neutral (4) Disagree (5) Strongly disagree
Statement 1 2 3 4 5
Management is committed to the core values
of the Authority
The management treats employees in line
with the core values of the Authority
Employees are well aware of the Authority’s
core values
The core values have been communicated to
all employees
The employees of the Authority are proud of
the values of the organization and are careful
to uphold them
The management constantly reminds
employees of the importance of the core
values in the organization

45
 The KRA core values help in improving
employee performance

9. Taxpayers being the main customers of KRA, do you believe that they are happy with the
services provided by the Authority? (Tick one)
Yes No
10. The Authority responds promptly to complaints brought forward by the taxpayer. (Tick one)

Yes No
11. Tax payers are happy with the way their complaints are addressed by KRA officers. (Tick
one)
Yes No

12. KRA receives compliments from tax payers regarding service delivery. (Tick one)
Yes No

13. The Authority collects maximum revenue from the taxpayers. (Tick one)
Yes No

14. Suggest ways of revenue collection improvement.

……………………………………………..
…………………………………………………………………………………………………..
.…………….................................................................................................................................
.
15. The employees at KRA are happy with the hours of work. (Tick one)
Yes No

If no, indicate
reasons…………………………………………………………………………....

………………………………………………………………........................................................

46
………………………………………………………………………………………………………
…………………………………………………………………….
16. The employees are at KRA are happy with the working conditions. (Tick one)
Yes No
If no, indicate reasons …………………………………………………………………………

………………………………………………………………………………………………….

Thank you for taking time to fill this questionnaire

47