Influence of Performance Appraisal on Employee Retention at Equity Bank's Head Office in Nairobi, Kenya

Abstract

The study sought to evaluate the influence of performance appraisal on employee retention at Equity Bank's head office in Kenya. In this study, vroom expectancy theory, goal-setting theory and equity theory were adopted to underpin the relationship between study variables. A descriptive research type was adopted. The research was carried out at Equity Bank's head office in Nairobi. The target population was the 306 staff attached to Equity Bank's head office in Nairobi, Kenya. The study adopted a formula suggested by YaroYarmjne to determine the sample size comprising 173 employees. Questionnaires were adopted to collect primary data. The questionnaires were coded, and the data was entered into SPSS for further analysis. The study first did a descriptive statistics analysis using tools such as mean, standard deviation, frequency distribution and percentages where necessary. The study then carried out an inferential analysis comprising bivariate pairwise correlation and multivariate OLS regression. Based on regression analysis, target setting, performance measurement, appraisal feedback, and the utilization of appraisal reports had a significant influence on employee retention at Equity Bank. The study recommends that the management of Equity Bank improves performance appraisal by enhancing target setting, putting in place adequate tools for measuring performance level, improving its appraisal feedback loop and improving the utilization of appraisal reports to enhance employee retention.