PERSONNEL DIFFERENTIATION AND ORGANIZATION PERFORMANCE: AN EMPIRICAL ANALYSIS OF DEPOSIT TAKING MICRO-FINANCE INSTITUTIONS IN NAIROBI CITY COUNTY, KENYA
Josephine Waithira Mbugua - Masters of Business Administration, Kenyatta University, Kenya
Godfey Muigai Kinyua - School of Business, Kenyatta University, Kenya
ABSTRACT
The micro-finance sub sector occupies a strategic position in the socio-economic development of the country. External environment has presented challenges to the MFIs that threaten their performance to increase shareholder value. Studies have shown MFIs closing down due to bankruptcy. This has made MFIs to change their strategy in order to remain competitive and increase performance. This paper seeks to establish the effects of personnel differentiation strategy on performance of deposit taking micro-finance institutions in Nairobi City County, Kenya. Descriptive research design was employed with respondents drawn from 123 MFI’s that were obtained using stratified random sampling technique. Data analysis was done by the use of descriptive statistics and simple linear regression statistics. The study found that there was a strong and positive relationship between personnel differentiation and organizational performance. The study concluded that personnel differentiation significantly affects organizational performance. The management of MFIs need to enhance their staff training budget as the study proved personnel differentiation is key in improving organizational performance. The study found out that learning and development increases employee skills, level of professionalism and competence. Motivation and confidence is related to employee productivity and results to increased organizational performance.
