Employees motivation and selection of retirement options among civil service employees in Nairobi City County, Kenya

Abstract

Whereas the Kenyan pension industry has reported steady growth over time in terms of the assets under management, the uptake of retirement options in civil service employees in Kenya is low. Many working adults still prefer saving through other channels like banks, SACCOs and collective investments rather than pension schemes. This research investigated the influence of motivation on the selection of retirement preparation options among civil service employees in Nairobi County, Kenya. The study integrated Vroom's Expectancy Theory of Motivation and the Life-Cycle Hypothesis (LCH) Theory to examine how perceived future benefits, belief in reward systems, and the value of rewards impact retirement planning decisions. The primary objective was to investigate how these motivational factors influence employees' selection of various retirement preparation options. To achieve this, the study used structured questionnaires to collect primary quantitative data from a target sample of 384 civil service employees based in Nairobi County. The final sample was 294, representing a response rate of 76.5%. The data analysis employed a multiple regression model to examine the relationships between the motivational factors and the selection of different retirement options. The results indicated that perceived future benefits had a significant positive effect on the selection of retirement preparation option. Additionally, the findings from this study showed that belief in reward systems also had a significant positive effect on the selection of retirement preparation options. Lastly, the findings from this research indicated reward value had a significant positive effect on the selection of retirement preparation options. The findings from this study can help policymakers, such as the Retirement Benefits Authority (RBA), the Treasury, Union of Kenya Civil Servants (UKCS), and the Public Service Commission (PSC), formulate policies, procedures and regulations to increase the selection of retirement preparation options by employees in civil service, which should focus on improving perceived benefits of retirement preparation options, belief in reward systems, and the reward value of retirement preparation options. Based on the findings from this research, it is recommended for managers of government agencies to adopt practices to improve the perceived future benefits of retirement planning, belief in the retirement planning, and reward practices. These practices can help improve the selection of retirement preparation options.