CASE OF NZOIA SUGAR COMPANY IN BUNGOMA COUNTY, KENYA

BY

BERNARD KISEMBE SIKUCHE

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND ECONOMICS

MOI UNIVERSITY

NOVEMBER, 2014

51

ii

This research project is my original work and it has not been submitted to any other institution for examination purposes

BERNARD KISEMBE SIKUCHE

SBE/MBA/002/013

Sign ………………….. Date…………………

Approval by supervisors

This Research project has been submitted for examination with our approval as University supervisor.

Prof. Michael Korir

Lecturer, Department of Management Science,

School of Business and Economics,

Moi University, Eldoret, Kenya

Sign………………………… Date…………………….

Dr. Vincent Ng’eno

Lecturer, Department of Agricultural Economics and Resource Management,

School of Business and Economics,

Moi University, Eldoret, Kenya

Sign………………………… Date…………………….

This work has been dedicated to my wife Veronica Nekoye, mum Grace Kisembe, son Fiddel Kisembe Sikuche and daughter Gloriah Bright Sikuche without whose emotional support I would not have made it. God bless them.

I am greatly indebted to my supervisors Prof. Michael Korir and Dr. Vincent Ng’eno for their guidance throughout the writing of this research project and without whom I could not have made it. I would also like to express my heartfelt gratitude to my course mates who helped me through discussions and to Moi University for giving me the chance to pursue this course.

The study aimed at investigating the effects of strategic planning on employee motivation at Nzoia Sugar Company. The study was guided by the following objectives: to determine the effect of organization structure on employee motivation at Nzoia Sugar Company, to establish the effect of resource allocation on employee motivation at Nzoia Sugar Company, to determine the effect of target setting on employee motivation at Nzoia Sugar Company and to determine the effect of monitoring and evaluation on employee motivation at Nzoia Sugar Company. The study adopted a case study design and targeted management groups of employees at Nzoia Sugar Company to form a total target population of 150 respondents. Census sampling approach was used. Data was collected using questionnaires because the data collected was primary. Data collected was coded and analyzed using SPSS version 16.0. The results of the study were presented using frequency tables the findings of the study indicate that Organizational structure affects the motivation of employee. The study concluded that Resource allocation affects the motivation of the employee since they can only perform their duties when they have all the resources they need to carry-out their tasks. It also concluded when an organization sets its goals out-rightly and informs the employees what they are working towards they give them a target to achieve. This is when further compounded by setting rewards for those who attain the set targets therefore motivating the employees to work towards them more vigorously. The study recommends organizations should engage in delegation an organization as a way of employee motivation they should also apply flexibility and bench marking as a way of employee motivation organizations should strive to use all avenues to motivate their employee since they are the lifeline of the organization.

DECLARATION ii DEDICATION i ACKNOWLEDGEMENT ii ABSTRACT iii TABLE OF CONTENTS iv LIST OF TABLES vii LIST OF FIGURES viii OPERATIONAL DEFINITION OF TERMS ix CHAPTER ONE 1 INTRODUCTION 1 1.0 Overview 1 1.1 Background of the study 1 1.2 Statement of the Problem 3 1.3 Objective of the Study 3 1.4 Study Hypotheses 4 1.5 Assumptions of the Study 4 1.6 Significance of the Study 4 1.7 Scope of the Study 5 CHAPTER TWO 6 LITERATURE REVIEW 6 2.0 Introduction 6 2.1 Concept of Strategic Planning 6 2.2 The Concept of Employee Motivation 7 2.3 Organization structure and employee motivation 8 2.4 Resource Allocation 10 2.5 Target Setting 11 2.6 Monitoring and Evaluation 13 2.7 Theoretical foundations of the study 15 2.7.2 Strategic planning Theory 15 2.7 Conceptual Framework 15 CHAPTER THREE 18 RESEARCH DESIGN AND METHODOLOGY 18 3.0 Introduction 18 3.1 Research Design 18 3.2 Target Population 18 3.3 Sampling Size and Sampling Procedure 19 3.4 Data collection instruments 19 3.4.1 Questionnaires 19 3.5 Reliability 20 3.6 Validity 20 3.7 Data Collection Procedures 20 3.8 Data Analysis and Presentation 20 3.9 Ethical Consideration 21 3.10 Limitations of the Study 22 CHAPTER FOUR 23 DATA PRESENTATION, ANALYSIS AND INTERPRATATION 23 4.1 Introduction 23 4.1.1 Response Rate 23 4.2 Demographic Characteristics 23 4.3 Organization Structure on Employee Motivation 24 4.3.1 Organizational Structure Measures 24 4.3.2 Relationship between Organizational Structure and Employee Motivation 25 4.4 Resource Allocation on Employee Motivation 26 4.4.1 Resource Allocation Measures 26 4.4.2 Relationship between Resource Allocation and Employee Motivation 27 4.5 Target Setting and Employee Motivation 27 4.5.1 Target Setting Measures 27 4.5.2 Relationship between Target Setting and Employee Motivation 28 4.6 Monitoring and Evaluation on Employee Motivation 29 4.6.1 Monitoring and Evaluation Measures 29 4.6.2 Relationship between Monitoring and Evaluation and Employee Motivation 30 4.7 The Effect of Strategic Planning on Employee Motivation (Regression Model) 30 CHAPTER FIVE 33 SUMMARY OF THE FINDINGS, CONCLUSION AND RECOMMENDATIONS 33 5.1 Summary of the Findings 33 5.2 Conclusion 33 5.3 Recommendations 34 5.4 Suggestions for further findings 35 REFERENCES 36 APPENDICES 38 APPENDIX I: QUESTIONNAIRE FOR THE EMPLOYEES 38

LIST OF TABLES

Employee Motivation: In this study refers to the psychological forces that determine the direction of a person's behavior in an organization, a person's level of effort and a person's level of persistence

Monitoring and evaluation: In this study this refers toM&E is a process that helps improving performance and achieving results. Its goal is to improve current and future management of outputs, outcomes and impact

Organizational Structure: In this study refers to explicit and implicit institutional rules and policies designed to provide a structure where various work roles and responsibilities are delegated, controlled and coordinated.

Resource allocation: in this study refers to a plan for using available resources, for example human resources, especially in the near term, to achieve goals for the future. It is the process of allocating scarce resources among the various projects or business units.

Strategic Planning: In this study strategic planning refers to an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.

Target setting: In this study refers to the goal setting involves establishing specific, measurable, achievable, realistic

This chapter presents the background to the study, statement of the problem, objectives of the study, research questions, significance of the study, limitations of the study and scope of the study

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy (Barry, 2007). Whether small or large, every business has to have employees. At one time, employees were considered just another input into the production of goods and services. For every single business, it is important to build a good foundation for employees to feel themselves as part of the team. The different categories of business ownerships that is; sole proprietorship, partnership, and corporations have different effects on how employees are motivated. Especially that is important in large business because that can improve in an instant one business’s chance to win in competition with another business(Barry, 2007).

Motivated employees are more productive and creative. To be effective, managers need to understand what motivate employees within the context of the role they perform and implement the strategic plans of the company. Of all many functions that managers have, motivation and communication with employees is one of the important and complex ones. In fact, factors that motivate employees change all the time and they depend on the strategic planning of a company. So, for managers that is really essential to make their employees to be motivated in order to achieve business goals (Barry, 2007).

Globally, many companies have incorporated strategic planning in to the business, the strategic planning has been fused with employee motivation to ensure that the company succeeds in carrying out their plans. Study done by Boulter (2005) concluded that once the organization finds good employees, it is essential to find ways to keep. Career advancement and awards program as incentives increase the odds of being able to retain people. These incentives are designed to reinforce desired behavior, such as quality work and a focus on the customer.  They help employees to deliver high-quality service and keep them motivated. The leader has to know the important distinction between actions that are retainers and those that are motivators. The primary purpose of a retainer is to keep a person on the job. The purpose of motivation is to increase performance. To increase performance, management needs to set goals and then to link the accomplishment of those goals with rewards of value. This has been seen in many multinational companies such McDonalds in USA and Techno mobile company in China. The study found out that money is a reward of value for many employees. There are as many employees who also have personal goals that have something to do with job performance and career development. Good supervision and motivation seek out personal goals and align them with the goals of the organization Boulter (2005).

Regionally, in Africa, many companies have been able to motivate their employees by implementing good strategic plans such as: Morale building and recognition, but there are times when it needs a special emphasis. Downsizing often leads to layoffs. Layoffs are negatives for those left behind. In the aftermath of a merger or downsizing, managers must involve their employees in the next steps, whatever they may be. Regular communication about what is going on becomes link strengtheners.  This has been seen in many companies in Africa especially in South Africa and Nigeria. Other strategic planning methods used to motivate employees by companies in Egypt is ensuring Job security, this is also very important for employees. They reach an age and a stage when they realize that they are no longer building a career, but are in a career and need to perform at top levels. These workers frequently place less emphasis on salary, assuming it is adequate, and more on certain intangibles, particularly those that give them some assurance they will be around for a few more years. Mature employees want opportunity for learning, growth, responsibility. For these employees, consider continuing education, secure pension plans, a sense of greater belonging, symbols of seniority such as an extra day off after three years or an extra week after ten. They also want independence, autonomy, and flexibility. It is interesting that employees who have a sense of ownership about their work not only reach higher levels of performance, but also look for constructive criticism. They want to do a good job and they want the leader to know it. Employees retain their work when they are comfortable in their workplace environment (Brayson, 2005).

Locally , in Kenya there are few studies that have been done on the effect of strategic planning. No research has been done on the Nzoia sugar company on how it uses strategic plan to motivate its employees which is the basis of this study.

There have been several Kenyan Government initiatives meant at improving delivery of services The enactment of the Employment Act (2007), Industrial Relations Act (2007), Occupational Safety & Health Act (2007) and NSSF Act (2013) are among the measures by Government of Kenya to ensure that both public sector and private sector organizations adequately provide industrial harmony and treat employees with equity so that they are motivated at work. The NSSF Act (2013) is designed to enhance social security to employees. This study investigates the impact of strategic planning on employee motivation. Strategic planning has become an important tool in managing organizational resources and mitigating against risks and other business threats.

The NSC strategic plan (2012/2013- 2016/2017) provides amongst other things, to produce skilled manpower, to develop and nurture talents by facilitating development of motivational and rewarding systems that retain a loyal staff base and guarantees higher performance with a view to enhancing productivity besides creating a harmonious working relationship. The company has had a low staff turnover and low innovation the researcher will therefore seek to establish reasons as to why the company seems to be lagging behind others despite the fact that it has experienced staff and government support.

The main purpose of the study was to establish the effect of strategic planning on employee motivation. A case of Nzoia Sugar Company in Bungoma County, Kenya

The study was guided by the following specific objectives:

To determine the effect of organization structure on employee motivation at Nzoia Sugar Company

To establish the effect of resource allocation on employee motivation at Nzoia Sugar Company

To determine the effect of target setting on employee motivation at Nzoia Sugar Company

The study tested the following hypothesis.

H01: There is no significant relationship between organization structure and employee motivation

H02: There is no significant relationship between resource allocation and employee motivation

H03: There is no significant relationship between target setting and employee motivation

H04: There is no significant relationship between monitoring and evaluation on employee motivation

For the purposes of this study the following assumptions were made to perform the necessary analysis and evaluation of the stated research problem. First the study assumed that the study population understood what strategic position was.

Second, it assumed that the respondents would answer the questions with openness, candor, and honesty with regards to the questionnaire.

The study will be of value to:

The management of Nzoia sugar company. This study will enable them to adjust and concentrate on strategies that improve the motivation of their employees. The findings of the study can also be replicated in other organizations that aim at improving the motivation level of their employees. Most importantly, this research further aims at offering some practical suggestions on the role of strategic planning.

The policy makers will obtain knowledge of the of the application of strategic planning and the study recommendation s will be able to give them idea on what to include in their policies.

The findings of this study can be compared with strategic planning in other sectors to draw conclusions on various ways an institution can respond to poor organizational performance and competitive forces in the environment. It will also benefit consultants who endeavor to provide assistance to successful running of organizations in developing and sustaining a competitive edge in their environment.

The scope of the study was to find out the effects of strategic planning on motivation of employees at Nzoia Sugar Company. The study was conducted among the employees of the company.

This chapter is concerned with the review of literature related to the study

Many scholars agree that a strategic plan needs to be simple, realistic and neither too ambitious nor insufficiently demanding. It should allow some degree of flexibility to fit with the changing environment. Mintzberg (2005) adds another perspective by highlighting the danger of planning in that it assumes the world will stop while managers wait to plan and implement strategies. This explains why a strategic plan should be made in a way that it is flexible to accommodate environmental changes.

According to Bryson, A is where you are, B is where you want to be and C is how you get there. The vision, mission, and goals of the organization help it move from A to B. Strategy formulation connects A to C and strategy implementation connects B to C. Bryson’s more complex planning process is a ten step strategy change cycle. These steps include: initiating and agreeing on a strategic planning process, identifying organizational mandates, clarifying organizational mission and values, assessing the external and internal environments to identify strengths, weaknesses, opportunities, and threats, identifying the strategic issues facing the organization, formulating strategies to manage issues, reviewing and adopting the strategies or strategic plan, establishing an effective organizational vision, developing an effective implementation process and reassessing the strategies and the strategic planning process. (p.32) Bryson (2005) cautions against the temptation organizations face to adopt planning processes written and he reminds readers that the strategy change cycle, like all planning processes is a general approach and it should be tailored to fit the specific situation of the organization in order to be most effective.

Fisher (2008) used an eight step process as a framework for their analysis of strategic planning by governments – an initial agreement or plan for planning; identification and clarification of mandates; mission formulation; external environmental assessment; internal environmental assessment; strategic issue identification; strategy development; and development of a description of the organization of the future” (p. 995). Hay (2010) identifies a simple outline for the strategy formulation process. According to this outline, the process begins with evaluating a range of strategic alternatives, then compares these alternatives against opportunities and threats of the environment and internal strengths and weaknesses of the organization, and culminates with the selection of a single strategy.

Another common theme in strategic planning is the role of employee in the planning process. Generally, employees are an important part of the process and critical to successfully implementing strategic management. Hines (2009) acknowledges that it is difficult to define the components of a successful strategic effort. The importance of employee in the strategic planning process is evident in the fact that three of the four critical functions specifically address their role in planning. Nutt and Back off (2008) states the importance of motivated employees to the planning process by writing, “And the employee factor looms large in strategy implementation, as well as in formulation and selection of strategies. They described strategic planning as an organizational task. They wrote, “Strategic planning is an organizational task and requires an integrated effort by all members of the organization including the employees for successful completion”. Young (2001) states that the “failure to involve employees in the planning process can reduce the chances for implementation. He goes on to acknowledge the relationship between employee motivation and strategic plan is of great importance that cannot be ignored.

An employee's performance typically is influenced by motivation, ability, and the work environment. Knowing how and why to motivate employees is an important managerial skill. Motivation is the set of forces that cause people to choose certain behaviors from among the many alternatives open to them. Motivation is important because of its significance as a determinant of performance and its intangible nature. Paris (2004) defines work motivation as the psychological processes that cause the arousal, direction, and persistence of voluntary actions that are goal directed.According Richardson, (2003) motivation is the desire within a person causing that person to act. People usually act for one reason: to reach a goal. Motivation is a goal-directed drive; complex and individualized, and managerial strategies and tactics must be broad based to address the motivation concerns of individuals. (pp. 72-73). Rewards and recognition can be powerful tools for employee motivation and performance improvement. According to Paris (2004) rewards are a powerful method for encouraging good job performance

Evolution of motivation can be traced from scientific management, through the human relations movement, to the human resource approach. The assumptions of scientific management concept were that work is inherently unpleasant for most people and the money they earn is more important to employees than is the nature of the job they are performing. Human relations school of thought emphasized the role of social processes in organizations and assumed that the need for belongingness and the need to feel useful are more important than money in motivating employees. Human resource approach assumes that people want to contribute to organizational effectiveness and are able to make genuine contributions (Sauders, 2008).

A line and staff organization consists of line managers and staff managers. Where line managers have authority throughout the organization and staff managers have authority only in their departments (Mintzberg, 2005).This structure is effective because it has line organization’s ability to make quick decision as well as direct communication and help of staff specialists. In this model, it is easy to improve employee motivation by assigning individuals with tasks that they will concentrate on or will be particularly good at. And employees who are successful at one time will have self confidence to deal with new project with renewed energy and excitement

A committee organization is a structure where authority and responsibility is in the hands of group of individuals. Committees are usually slow in making decisions, and decisions they make are often the compromise between conflicting interests. However, committees improve business planning and employees morale A matrix organization is the structure when employees from different parts of organization work together on particular projects. The matrix structure is popular because of its flexibility in adapting quickly changes in the environment and its capability of concentrating on main problems. It provides a good base for employee’s creativity and initiative, which makes all employees feel worthwhile and important. By allowing employees to show initiative often leads them into leadership positions that will allow them to grow and develop. And if the employees are highly motivated, that leads them to the effective ability of the self critique which can have huge impact on successful work productivity (Mintzberg, 2005).

A line organization is the oldest and simplest organization structure. It is a direct relationship of chief executive and subordinate. In this type of organizational structure, decisions are made quickly, due to manager’s authority over subordinate’s actions. This model is ineffective for middle sized and large firms, because manager is responsible for many activities and he can’t be an expert at all of them. Small organizations are perfect for this kind of organization structure. Managers in this model will be too busy with detail and paper work, so they will have less time left for other organizational moment like planning, motivating employees. Also employees will have too many tasks and they will feel confused about what their main tasks are, what their objectives are (Dew, 2007).

When a business or company has a strong, consistent organizational structure, employees feel secure in their jobs. If your organization has a history of hiring from within, promoting effective employees and longevity, this inspires current employees and allows them to relax their fears of job loss or mismanagement, and devote themselves to their position. In an article for AllBusiness.com, Peter Christensen notes Abraham Maslow's theories that all human behavior is ruled by each individual's satisfaction with the five levels of human needs. Second on this list is safety and security. It is safe to postulate that people who have confidence in their management structure will respond positively to their organization (Camillus, 2006).

When your business has a transparent organizational structure, you have a conduit to share corporate goals and plans with your employees. When you share these goals and align them with your employee's personal goals, you can move teams forward in a productive manner. Once your organization's management creates a new budget and business plan for the following year, share the pertinent details with middle level management and task them to create corresponding plans with their team members. Each employee's professional development goal should run parallel with the corporate goals. When business goals are met, employees should be notified so they can gauge their own progress against that of the company.

Effective corporate organizations have clear reporting lines. This means if an employee has an idea, challenge, issue or problem, he knows exactly who to talk to. When companies do not have a strong organizational structure, opportunities and complaints can both be lost. The best companies have strong communication channels built into their organizational structure. The result is employees who know they have both the opportunity to share ideas as well as the chance to discuss problems. This also creates a culture where management and employees are accountable for success and error. The more accountable your employees are, the more likely they are to work toward success (Ruocco and Proctor, 2004).

Funds should also be available to train the teams so that each can know the responsibilities and expectations (Jackson, 2005). Funds are critical in motivating employees, this mostly during data collection part of the strategic planning where the employees will require a lot of funds to ensure that they gather the correct data. This is because it may involve traveling, holding meetings, or publishing tools for communications such as pamphlets and fliers. Upon formulation, money is required for implementation. A plan should not be formulated if it cannot be implemented. Ruocco and Proctor (2004) is of the opinion that only the programs which yield highest returns should be funded after the key action areas have been identified. Availability of the funds will motivate employees that the plan will succeed thus they will put their efforts into it.

Employee’s know-how is useful in formulation of strategic plans and where an organization does not have qualified manpower it will be forced to outsource. According Ruocco and Proctor (2004) to in order for a strategic plan to succeed there is a need to allocate enough resources to train employees in the new plans. This is to equip the m to be able to carry out the plans effective. These employee training help them to know what strategic plan should contain. Streib (2006) is of the opinion that the firm must allocated resources to motivate the employees to be able to carry out their duties effectively to achieve the plans of the organization

According to Streib (2006) for the organization to be able to formulate strategies effectively it must have the necessary resources that is both human resource and capital resource, resources should be allocated in a way to motivate employees. In his study she found out that most firms have been successful in their strategic plans because they have had motivated employees, the research noted that there was sufficient allocation of resources that included tools and even trainings that enabled the employees perform well by adopting and implementing the strategic plans of the firm effectively and efficiently.

Sevier (2003) notes that a common problem experienced by companies in Africa in successfully implementing their strategic plans is because their employees are not motivated. They cite a case where a firm has not allocated all the required resources yet it expects its employees to motivated and implement the strategic plans fully. This leads to a mismatch between the employees with the strategies that can work well for the organization. This problem however may not be very acute in the most serious companies that are profit oriented who ensure that they allocate all the required resources to ensure that the strategic plan is effectively implemented.

Employers are required to treat their employees as internal customers who have the ability to give feedback on organizational progress. Camillus (2006) notes that some board of directors allocate resources to the top management to implement the strategic plans while forgetting the lower cadre employees who are the key to successful implementation of the strategic plans of the firm. The lower cadre employees may feel left out in formulation and hence they fail to implement the plan effectively.

According to Hay (2010), strategy implementation involves the sufficient allocation of resources to all the strategic departments of the organization. This motivates the employees in those departments to carry out the implementation of the plans efficiently. Also a study done by Dew (2007) concurred by finding that strategic allocation of resources is key to successful implementation through allocation sufficient resources to the employees to enabled the carry out their duties.

Henry Bryson (2005) stated that even the best formulated strategy in the world can fail if it is poorly implemented; hence the need for strategies to be effectively managed by allocating resources required for is success. The need for change needs to be understood and properly coordinated with the employees so as to know how to utilize the resources. This will provide employees with motivation and confidence to try out new ideas and innovations without fear of reprisals. The successful implementation of a strategy depends on how effectively the strategy has motivated the employees through allocation of resources to all the employees that would be involved in the implementation of such strategy.

A wealth of empirical evidence on motivation and target setting exists, first, although it seems reasonable to suppose that an individual’s levels of motivation will vary across domains depending on his or her specific interests on the strategic plans of the organization, there is some evidence that motivation in one domain may generalize to other domains. For example, Nutt and Backoff (2008) found that motivation of employees is directly related to the benefits they may get if the strategic plan succeeds. In general, research suggests that the target set by an organization can influence the motivation level of the employees. Some evidence also supports the presence of demotivation of employees in changes in strategic plans (Hines, 2009).

 Motivation of the employees is also related to achievement of the strategic plans. Research demonstrates a relatively consistent relationship between employee motivation and strategic planning. Intrinsically motivated employees have a tendency of ensuring that the strategic planning is effectively executed. Similarly. Indeed, Lange and Adler found that motivation contributes to the prediction of achievement over and above the effects of ability. Typically, researchers have used such findings to support the conclusion that motivation leads to achievement (Hines, 2009).

Researchers Oslen and Eadie (2003) did a comprehensive study on the effectiveness of goal setting to improved motivation of workers.  The study consisted of 72 participants averaging from 3 companies in United Kingdom. The study found out that, two of the companies which had highly motivated employees had well implemented the strategic plans as compared to the other company. The research further found out that the two companies had motivated the employees by incorporating the in the target setting process which enabled them give their input to the level best of which they can achieve the implementation to the required level.

Lane and Streeter's (2003) experiment definitely shed some light on the effectiveness of setting goals in individualized motivation study.  When it comes to strategic planning, it is obviously everyone's goal to make every aspect of strategic plans in their departments to work.  Since this is the desire for every firm, when a goal is given to an employee then it’s upon them to implement the plan and ensure that it doesn’t fail. The study concluded that if the employees need to make the plan to work, they will need to be more effective in terms of implementing the plan and this will depend on the level of motivation. This is where the effectiveness of the goal setting comes into play.  Lane and Streeter's experiment could have been performed better show how employee motivation affects the strategic planning of a company (Haines, 2000).

The experiment performed by Haines (2000) was one that was simple and effective.  Comparing results of a company before goals were implemented and after is an easy way to see if there is any improvement after goals are set and the level of motivation of the employees.  Goals give people something to compete and strive for so in the case of employees thus heightening their focus to accomplish these goals.  Once they do this, the implementation of the strategic plan will be effective.

In comparison to the study performed by Sanders (2008) companies are more effective in implementing their strategic plan and receiving the desired outcome, which is an improvement due motivation of the employees. Sanders’ experiment undoubtedly could have been articulated more efficiently by companies to get better improved results through motivating their employees. (Dew, 2007) created a much simpler approach when they devised their scheme to test the effectiveness of goal setting in improving the employee motivation in order to achieve the desired strategic planning goals of the companies. This is because they allowed the employees to choose their own goals, giving them freedom to choose what they wanted to see improve. This is a great motivation to employees as they are able to carry out the panning according to the way they want with the approval of the company management.

Development of the strategies, policies and operational planning procedures to translate strategy into action steps and then carrying out the required actions. Strategies then need to be monitored and evaluated to ensure ongoing improvement. This motivates the employees as they see the management is interested in what they are doing. Employee motivation is important for implementing strategy in terms of the creation of strategies. Stakeholders of organizations seek some sort of directive leadership from senior managers. The responsibility of the senior management team within an organization is to create a motivational environment for the employees so as to enable them implement the strategic plans of the company (Mintzberg, 2004).

According to Young (2001) assessment of employees performance is one of the strategic plans that are being used by companies to motivate its employees, in the study by Hines (2009) found out that If internal and external rewards are provided the individual with what he or she wants or values or considers appropriate or beneficial, the individual experiences satisfaction with the job. Job satisfaction can be viewed as the result of a positive appraisal of the job against one's value standards. Job satisfaction is not a result of the person alone nor of the job alone but of the person in relation to the job--that is, the job as appraised by the person. Thus, if the job is appraised as a fulfilling or facilitating the attainment of one's values, satisfaction is experienced; if the job is appraised as blocking or negating one's values, dissatisfaction is experienced.

In previous studies, it was found that job satisfaction affected organizational commitment that in turn affected the intent to stay. Researchers found that work experiences that lead to satisfaction (job scope or challenge, considerate supervision, compatible work groups) were associated with commitment. Commitment is defined as the acceptance of the goals and values of the organization; the willingness to exert effort on behalf of the organization; and a desire to stay with the organization. The study found out that monitoring has impacted on employee motivation. This aspect of strategic planning has enabled employees to be motivated to work so to avoid being caught off guard during unannounced monitoring (Paris, 2004).

Organizations use different motivation theories for motivating employees. According to Svenson and Rinderer (2009) Controlling has an impact in employee motivation, study show that controlling can shape the employees into a certain direction to ensure that they are in line with what the company needs. In firms in the USA, they have devised a controlling way the involves hygiene of the work environment and the employees. Hygiene factors such as pay and job security, before focusing on motivator factors which include interesting work and full appreciation of work done. On the other hand, in Adams' equity theory, management should begin by focusing on areas where there may be perceived inequities, such as pay and full appreciation of work done, before focusing on interesting work and job security. Another theory by Vroom's suggests that management should begin by focusing on rewarding, employee effort in achieving organizational goals and objectives.

On the other hand, a research by Brown (2001) on Understanding Employee Motivation, determined the ranked order of motivating factors. The top answers gap analysis. This factor are followed by job security, good working conditions, promotions and growth in the organization.  Feeling of being in on things, personal loyalty to employees, tactful discipline, and sympathetic help with personal problems ranked low on the results. Other methods of increasing employee motivation include assessment of employee performance and appraising them based on the evaluation of their performance (Hines, 2009).

The competitive strategy view and the resource-based view are the two major perspectives or determinants of strategic planning by firms (Streib, 2002). The performance of a company is rooted in the motivation of its employees

Theory on strategic planning emphasizes the role of strategic planning as the primary determinant of firm performance so that the unit of analysis is inevitably the company. Brown (2001) relaxes this condition, allowing firms to choose their strategic planning to motivate employees thus gaining sustainable rents, although individual firms cannot change industry structure. This change in the assumption allows the firm to be the unit of the analysis. Thus, the outside-in perspective represents a view where a firm performance is primarily determined by outside factors such as industry structure and firms can secure positions to exploit that structure (Hay, 2010). Companies formulate their strategic plans to ensure that they meet the goals they have set.

Strategic planning is thus the output of a complex understanding of the organizations goals and objectives and conditions that determine when to effectively accomplish them. The competitive strategy view maintains that resources are the results obtained from the implementation of strategic plans and/or purchase from the environment. Consequently, plans cannot achieve an independent status in relation to firm performance. The importance of strategic plans is understood only in conjunction with the capability of those resources to support the strategy pursued or the fitness of those resources for a particular industry structure. When resources fail to support a strategy or enhance a company’s fit for an industry, they are useless. While in the aforementioned competitive strategy view, industry structure determines sustainable firm performance, resource heterogeneity is the basis of firms’ competitive advantage in resource-based theory (Nutt and Backoff, 2008).

The study was conceptualized using the following conceptual framework. In the conceptual frame work, employee motivation is being affected by factors of strategic planning which includes organization structure, resource allocation, target setting and monitoring and evaluation.

Independent Dependents

Strategic Planning Employee Motivation

Resource allocation Target setting Monitoring and evaluation Organization structure Employee motivation

Organizational structure in this case refers to the reporting lines established by the institution with an aim of assessing how they could impact on employee motivation depending on whether they are flat or hierarchical.

Resource allocation as a concept of strategic planning refers to the scheduling of resources to specific activities to ensure that there is optimal utilization of resources while at the same time ensuring that employees are motivated

Target setting includes setting of targets for both the employees and the organization to ensure that this acts a motivating factor to employees so that they can work hard enough to motivate employees.

Monitoring and evaluation is the process of ensuring that activities are supervised through a control while providing the required feedback for the process to ensure that employees at all times know what is expected of them hence motivating them.

CHAPTER THREE

The chapter describes the proposed research design, the target population, sample and sampling procedure, data collection instruments, data collection procedures, reliability and validity of the research instruments and the techniques for data analysis.

The study was conducted through a case study research design. A case study is a way of organizing data and looking at the object to be studied as a whole. Case study was used because it is the best method available to social scientist and other educators interested in collecting original data for the purposes of describing a population which is too large to observe directly. The study was majorly concerned with finding the effects of strategic planning on employee motivation (Kothari, 2004)

The target population of this study were employees of Nzoia sugar company and they were stratified into four major stratus based on responsibility grade. The strata’s were: senior management, middle management, lower management and unionisable staff. Target population was composed of 150 employees in the organization.

Table 3.1: Target population

Source: human resource Nzoia Sugar Company

Sampling is defined as a process of selecting the number of subjects for a given study which represents a larger group from which the subjects were selected while a sample is a smaller number of subjects obtained from accessible and representative population (Mugenda and Mugenda, 2003).

A census approach was used, since the units of study are not too many, is concentrated in one place+ at the Nzoia sugar company and, therefore, accessible, and not prohibitive in terms of cost, time and other resources. Such a methodology enhances validity of the collected data by including certain information-rich cases for study. Thus the sampling frame consists of all the 150 respondents.

This refers to the tools to be used for collecting data and how these tools will be developed. The data collection instruments that were used to collect data from the selected respondents were questionnaires. Selection of this tool was guided by the nature of data to be collected, time available and objectives of the study.

The study employed use of primary data that was collected using questionnaire that were administered to the respondents. Questionnaire is effective because it is designed questions or items in word format were distributed to the respondents. This instrument collected a lot of information over a short period of time. The method was suitable when the information needed was easily described in writing and also if time is limited. In this study, the respondents were given enough time to complete the copies of the questionnaire before returning them for analysis. The questionnaire included both structured and semi-structured questions. This allowed the respondents to give their own views. The questionnaire was in two parts. The first part was the general background of the respondent and the last part was for the research questions. The questionnaire that was used was both open and close ended. This allowed the respondents to answer the questions asked and also to five their own opinion that were not captured in the questionnaire (Kothari, 2004).

The reliability of the instrument is the measure of degree to which a research instrument yields consistent results or data after repeated trials. For research instruments to be valid, the content selected included questionnaires which were relevant to the variable being investigated. In order to test reliability of the instruments to be used in the study, Cronbach's Alphamethod was used. Piloting was carried out at Barclays Bank to establish the reliability of the research instruments Paton (2000).

Table 3.2 Cronbach's Alpha test for Reliability

Source: Survey Data, (2014)

Validity refers to the accuracy and meaningfulness of inference which is based on the research results. It is a degree to which results obtained from the analysis of the data actually represents the phenomenon under study. The content validity of the instruments was determined by discussing the items in the instruments with the researcher’s colleagues and other people in the organization Paton (2000).

The researcher obtained a letter of introduction from the University, School of Business and Economics once the research proposal was approved.Once the permission was granted, the researcher arranged to visit the respondents and ask for permission from the Nzoia sugar company to carry out the research. When their participation was confirmed, a date was set and appointment booked with the organization authorities as well as the participants in the study. The participants were given time to respond to all the items in the questionnaires after which the questionnaires were collected for data analysis.

Data collected was organized, coded and entered directly into SPSS (Statistical Package for Social Sciences) version 16.0. This statistical tool helped the researcher perform summary statistics and graphical presentations of the results. The analysis employed the use of quantitative techniques including the descriptive statistics such as frequencies, percentages and means to analyze and summarize the data while in inferential statistics the Multiple Regression analysis was used. In its simplest form multiple regression analysis involves finding the best straight-line relationship to explain how the variation in an outcome (or dependent) variable, Y, depends on the variation in a predictor (or independent or explanatory) variable, X. Once the relationship is estimated, it is possible to use the equation:

Y = β0 +β1X1 + β2X2 + β3X 3 + β3X 4 + ε

Where:

X = The independent variables -

X1 – Organization structure

X2 _ Resource allocation

X 3 – Target setting

X4 – Monitoring and evaluation

Y = The dependent variable (Employee motivation)

β= Independent Variable Coefficients

ε = Error margin

Pedhazur (1982) stated the assumptions of regression analysis as follows:

X is measured without error. .

The population means of Y|X are on a straight line.

X is fixed, Y is random.

For each observed Y, the mean error is, over very many replications, zero.

Errors associated with any one observed Y are independent of errors associated with any other observed Y.

The error variance is constant across values of X.

The errors are independent of X.

Analysis was done using SPSS, a computerized statistical package by encoding responses from questionnaires and interview guides. Presentation of this information was done using tables.

Permission to conduct the research was sought from the respective firms. Respondents were encouraged to exercise the right to withdraw from the study if they so wished and no penalties were attached to such withdrawal. The researcher explained the importance of the study, in that it would provide essential information which would be used to strengthen customer relations through golf sponsorship.

Questionnaire numbers were used and no names of respondents were required. This was done to ensure anonymity and confidentiality of information and respondents. They were also verbally advised not to indicate their names or any other form of identity on the questionnaire. The results were therefore confidential with no possibility of names being detected.

The study was limited to the effects of strategic planning on motivation of employees within Nzoia Sugar Company in Bungoma County. The study also faced time limitation as the employees were busy during the time of the study therefore they did not have enough time to participate in the study.

.

The chapter seeks to present the data collected in the study, analyze and interpret the study findings. The chapter will employ the uses of tables and graphs in the presentation of the data.

The study had a response rate of 96.67%. A total of 150 questionnaires were issued to the employees of the company but only 145 were collected.

The study sought to determine the demographic information of the respondents. The findings are represented in the table 4.1

N=145

Source: Survey Data, (2014)

The study established that in terms of gender51.03% were male while 48.97% were female. This illustrates an even distribution and representation of the genders therefore implying that the study would be able to generate data that is not biased towards any gender and therefore whose findings can be generalized to another population.

The findings on the period of employment indicate that 9.66% had worked in the organization for a period between 0-5 years, 21.38% had worked between 6-10years, 24.14% between 11-20 years and 44.83% for over 21 years.

The findings on the Educational level indicate that 19.31% of the respondents had attained certificate level of education, 37.93% hade a diploma, 5.52% had attained a higher diploma, 24.83% had an undergraduate degree while 12.41% attained had attained a master’s degree. These findings indicate that the respondents had different educational qualifications making them a good target for the study since they represent varied educational backgrounds.

The findings on the Understanding of strategic planning indicate that 37.24% had a good understanding of strategic planning while 62.76% had a fair understanding of it. This therefore indicates that the group were well knowledgeable and understood the process therefore were in a good position to provide the information required.

The study sought to determine how organizational structure affects employee motivation. The findings are presented in the table 4.2.

The research findings indicated that the majority of the respondents, 81.1% (mean = 4.055) were of the opinion that Bureaucracy of organization structure affected employee motivation plus Team work during performance of task also affected the employee motivation. Research findings also indicated that 79.86% (mean = 3.993) were also of the opinion that Autonomy of work had an effect on employee motivation. The results are interpreted to mean the motivation of employees was generally affected by factors that curtail them in process of the conducting their duties.

Table 4.2 Organizational Structure on Employee Motivation

N=145

Source: Survey Data, (2014)

The researcher sought to establish the relationship between the organizational structure and the motivation of employees. The findings are presented in table 4.3

N=145

Source: Survey Data, (2014)

The results indicated a significant relationship between the organizational structure and employee motivation (p = 0.001). The relationship however was evaluated to be a weak relationship where the results of the study indicated a person correlation of 0.264. This indicated that organizational structure was important to an employee but it does not necessary assure that the employee will be motivated as a result.

The study sought to determine the effect that resource allocation has on employee motivation. The findings of the study are represented in the table 4.4

The research findings indicated that 84.96% (mean = 4.248) of the respondents were of the opinion that Availability of resource allocation had the most effect on employee motivation while 83.72% (mean = 4.186) of the respondents agreed that Condition of resource on employee motivation.

The findings of the study were interpreted to mean that in the allocation of resources, the availability of these resources that the employees need is the major thing that will affect the motivation of the employees since it will determine if they have the equipment to do their duties or not and how well they do they do their duties.

Table 4.4Resource allocation and Employee Motivation

N=145

Source: Survey Data, (2014)

The researcher sought to establish if there was any relationship between resource allocation and employee motivation. The findings are presented in table 4.5

N=145

Source: Survey Data, (2014)

The correlation results indicated that there was no significant relationship (0.075) between resource allocation and employee motivation. This meant that the resources have to be supported by other aspects in the organization in order to ensure that the resources in the organization become affect the motivation of the employees.

The study sought to establish the effect of target setting measures on employee motivation. The findings are presented in the table 4.6. The research findings indicated that 81.66% (mean = 4.083) of the respondents were of the opinion that Appraisal had the major effect on employee motivation s while 79.04% (mean -= 3.953) of the respondents noted that the Rewarding on employee motivation. The results were interpreted to mean the employees were motivated more by issues that touched on their performance and recognized it and rewarded their efforts. Employees felt more motivated when their individual efforts were recognized and rewarded.

N=145

Source: Survey Data, (2014)

The study investigated the relationship between the target setting and employee motivation. The findings are presented in the table 4.7

N=145

Source: Survey Data, (2014)

The correlation results indicated that there was a significant relationship (p = 0.000) between target setting and employee motivation. This was interpreted to mean that when an organization sets a target that employees are supposed to attain they are motivated to work hard to attain them so that they can get the benefits of attaining set goals The strength of the relationship however was partial with a person correlation value of 0.324.

The study sought to establish the effect of monitoring and evaluation on the motivation of employee who participated in the study. The results were as illustrated in table 4.8

The study results indicated that 80.56% (mean 4.028) were of the opinion that evaluation had the major effect on employee motivation while 79.86% (mean = 3.993) were Assessment on employee motivation

The results were interpreted to mean that employee were more motivated by monitoring and evaluating activities that looked at what they did since it meant that when their jobs were evaluated and assessed they stood a high chance of getting rewarded and since the organization became aware of what they do and therefore can easily evaluate their potential for promotions and salary increases.

N=145

Source: Survey Data, (2014)

The study sought to establish the relationship between monitoring and evaluation and employee motivation. The results were as illustrated in table 4.9

Table 4.9 Relationship between Monitoring and Evaluation and Employee Motivation

N=145

Source: Survey Data, (2014)

The correlation results indicated that there was a significant relationship (p = 0.000) between monitoring and evaluation and employee motivation. This was interpreted to mean that monitoring and evaluation of employees has a significant effect on their motivation.

The study adopted the regression model to examine how each of the identified strategic measures that is, organizational structure, resource allocation, target setting and monitoring and evaluation affects the motivation of employees. The results were illustrated in table 4.10 below.

N=145

Source: Survey Data, (2014)

The model summary indicated that about 26.3% of the data could be accounted for in the regression model (R = 0.516) while the regression model indicated that the regression model was significant to mean that the model had not been computed by chance. This made the results of the regression model credible and reliable to illustrate the regression model.

N=145

Source: Survey Data, (2014)

The results indicated that there was a significant relationship between the organizational structure strategies (p = 0.009) and the employee motivation. The findings also indicated a significant relationship (p = 0.01) between the resource allocation and the firms performance and a significant relationship between target setting (0.007) and the employee motivation. The results however indicated that there was no significant relationship (0.259) between monitoring and evaluation and the overall employee motivation.

In assessing the regression model for employee motivation as per the indicators in the study, the study evaluated the standardized coefficients of the study and illustrated the results as indicated in the table multiple linear model below.

Employee Motivation = 0.219 (target setting) + 0.214 (Organizational Structure) + 0.213 (Resource Allocation).

These results indicated that the target setting was very important on the motivation of the employee. This was interpreted to mean that organizational setting of target was very essential in motivating employee since they are motivated to work hard to attain the set target and therefore the general motivation to keep working since the achievement of set target is associated with rewards perhaps in terms of promotion, salary increment and bonuses.

The findings of the study were discussed and presented according to the hypothesis of the study. They are summarized as follows:The findings of the study rejected the hypothesis that stated that there was no significant relationship between organizational structure and employee motivation. The results indicated that there was a significant relationship (p = 0.009) between organizational structure and employee motivation.This could be attributed to the fact that organizational structure affects how things are run in the organization and therefore the working environment of the workers to work in.

The findings of the study rejected the hypothesis that stated that there was no significant relationship between resource allocation and employee motivation. The results indicated that there was a significant relationship (p = 0.001) between resource allocation and employee motivation. This could be attributed to the fact resources that an organization has affects how the employees are able to perform their task and therefore the resources allocations affects the motivation of the employees since it determine the performance of their duties and how comfortable they are performing those duties.

The findings of the study rejected the hypothesis that stated that there was no significant relationship between target setting and employee motivation. The results indicated that there was a significant relationship (p = 0.0017) between target setting and employee motivation. This could be attributed to the fact that employees feel motivated to achieve targets that are set by the organization since there could be rewards for the achievement of the targets that have been set. Therefore the employees are motivated by the benefits that come with the attainment of the set targets.

The research results accepted the null hypothesis one which stated that: There is no significant relationship between monitoring and evaluation and employee motivation. The results indicated that there was no significant relationship (p = 0.259) between monitoring and evaluation and employee motivation. This could be attributed to the fact that monitoring and evaluation does not necessarily motivate the employees in anyway.

Employee motivation is a very important component in an organization since it determines how an organization will perform. Therefore an organization must be well informed of the factors that affect the motivation of their employees.

Organizational structure evidently affects the motivation of employee. This is attributed to the fact that the structure determines the ease of employees in the organization how well they can perform their tasks and how responsible they feel for the tasks they are given. Depending on what structure an organization chooses to adapt, the organization is able to motivate or demotivate their employees. These is in agreement with Haines, (2000) study which noted that a lean organizational structure will likely to be more effective for any given organization in terms of productivity while long organizational structures are likely to lead to little output by employees due to the lack of quick efficient processes that are too rigid for performance of any task.

Resource allocation affects the motivation of the employee since they can only perform their duties when they have all the resources they need to carry-out their tasks. The resources they have and conditions of the resources determine how well their task can be handled hence their motivations. Organizations should therefore take the resource allocation processes and seriously since they affect how the organization performance. Dew (2007) study confirmed this when it concluded that an organization that is not keen on resource allocation is an unattractive venture which is not worth investing in because resource allocation is key in determining the outputs of a given process or activity in a system. Proper allocation of resources is essential in that it determines how effective processes run.

When an organization sets its goals right and informs the employees what they are working towards they give them a target to achieve. This is further compounded by setting rewards for those who attain the set targets therefore motivating the employees to work towards them more vigorously. This perspective has been evaluated and found to effectively work for the organization and its employees. These findings are supported by Camillus (2006) study that noted that all organizations need to put in place targets for employees that are one of the human resource strategies that will ensure that the organization is able to effectively attain its objectives.

Monitoring and evaluating in an organization appeared to have no significant relationship with employee motivation. This is due to the need to always measure the results against the expected outcome and adjusting any deviations resulting from the deviations. This is supported by Dew (2007) findings that noted that an organization needs to continuously track its progress in an effort to ensure that it is achieving its targets or detecting challenges in its processes early enough.

The study made the following recommendations in order for an organization to improve the motivation of its employees;

Flat organizational structures should be developed which will foster employee motivation. This will be possible because there will be more autonomy and delegation in the organization and consequently the employees will feel more entrusted with their jobs a concept that always fosters employee motivation. Lean organizational structures have been associated with employee performances.

Organizations should apply flexibility in resource allocation as a way of employee motivation. This can be utilized by an organization as resource allocation strategy to motivate employees in the organization. Flexibility in resource allocation will ensure that there are always adequate resources available before undertaking any given task by the organization and hence enhanced employee motivation.

Organizations should employ bench marking as a way of employee motivation. Organizations can utilize this as a target setting strategy to motivate the employees of the organization to perform better. Target setting makes employees have a sense of direction and be readyto work harder to meet their targets

Organizations should employ control as a monitoring and evaluation way of bringing about employ motivation. Control is a key requirement because it ensures that mistakes are corrected through a corrective mechanism and at the same time reduces errors in the system hence enhanced employee motivation.

The study makes the following suggestions for future researchers to perform a detailed investigation about the research areas to help shed more light on the issues.

Impact of organizational control on employee motivation

Impact of bench marking on employee motivation.

Effect of resource allocation flexibility on employee motivation

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APPENDICES

The response to this questionnaire and all information obtained from you will be held in strict confidence.

Please put a tick (√) in the box to the right response:

SECTION A

1. Gender

Male

Female

2 what is the size of your organization

Below 10,000,000 10,000,001-20,000,000

20,000,001-30,000,000 30,000,001-40,000,000

Over 40,000,001

3. How long have you worked at NSC?

0-5

6-10

11-20

Over 21

4. Please indicate your highest qualifications.

Certificate

Diploma

Higher diploma

Degree

Masters’ degree

5) Understanding of strategic planning and budgeting process.

Good

Fair

SECTION B:

INFORMATION ON ORGANISATION STRUCTURE

6. To what extent to you agree with the following statements on the effect of organizational structure and employee motivation?

(SA-Strongly Agreed, A-Agreed, N-Neutral, and D-Disagreed, SD-Strongly Disagree)

Statements	SD	D	N	A	SA
Bureaucracy of organization structure on employee motivation
Delegation an organization on employee motivation
Autonomy of work on employee motivation
Team work during performance of task on employee motivation
Span of control on employee motivation

RESOURCE ALLOCATION

7. To what extent to you agree with the following statements on the effect of resource allocation and employee motivation?

(SA-Strongly Agreed, A-Agreed, N-Neutral, and D-Disagreed, SD-Strongly Disagree)

TARGET SETTING

8. To what extent to you agree with the following statements on the effect of target setting on employee motivation?

(SA-Strongly Agreed, A-Agreed, N-Neutral, and D-Disagreed, SD-Strongly Disagree)

MONITORING AND EVALUATION

9) To what extent to you agree with the following statements on the effect of monitoring and evaluation on employee motivation?

(SA-Strongly Agreed, A-Agreed, N-Neutral, and D-Disagreed, SD-Strongly Disagree)

EMPLOYEE MOTIVATION

9) What are the indicators of employee motivation?