THE MODERATING EFFECT OF CORPORATE GOVERNANCE ON THE RELATIONSHIP BETWEEN EMPLOYEES SEPARATION PERFORMANCE OF SELECTED PARASTATALS IN KENYA
Keywords:
Corporate Governance, Performance, ParastatalsAbstract
Purpose: Most organizations effect employee separation programme with an aim of improving productivity and performance, increase competitiveness, decrease costs and improve quality. However, a number of separation processes in several Parastatals have negated this position. Some unexpected undesirable results have attracted both theoretical and practical experts’ attention to the output of separation and the main questions involved in managing separation. The aim of this study was to probe employee separation effects on the performance of the selected Parastatals in Kenya. The study sought to determine the moderating effect of corporate governance on the relationship between employee separation and performance of the selected Parastatals in Kenya.
Methodology: The study analyzed six Parastatals in Kenya. Qualitative data was collected using questionnaires from 96 employees of the affected Parastatals. Regression analysis and independent t-test was used to analyze the data. A questionnaire was used to collect data from ninety six employees sampled through stratified random sampling. Linear regression and independent t-test were used to test the relationship between the independent and dependent variable.
Results: The study found evidence of positive association between corporate restructuring after separation with performance. From the findings the benefits of separation as envisioned in the structural adjustment programme are yet to be met by the affected Parastatals. Majority of Parastatals employed a mix of voluntary and involuntary methods of separation, the study finds no evidence of relationship between method of separation and organization performance.
Unique Contribution to Theory, Practice and Policy: The study recommends that employers manage the separation strategy in such a way that it minimizes disadvantages, whereas employee separation may be desirable in instances where employees underperform or whose skills are not matched with the organization’s mandate or goals, managers should limit the turnover rate of employees and ensure key employees are retained in the organization. Further the new employers should undergo a thorough vetting to ensure organizations tap best talent that can be retained in the long run in the organization.
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