MEDIATING EFFECT OF PERSONAL FACTORS POSITIVELY INFLUENCE THE RELATIONSHIP BETWEEN FINANCIAL MOTIVATION AND EMPLOYEE PERFORMANCE

Human resource management is critical to organizational success, yet Kenya Highlands University has experienced challenges such as poor staff performance and high turnover. This study examined the influence of financial and non-financial motivation on employee performance, with a focus on the mediating role of personal factors among university staff in Kericho, Kenya. The study was anchored on Herzberg’s Two-Factor Theory and Vroom’s Expectancy Theory. Adopting a positivist research philosophy, the study employed a correlational research design targeting all 80 university employees. Data were collected using structured questionnaires and analyzed with SPSS version 26 and SMART-PLS version 4.0, utilizing both descriptive statistics (mean and standard deviation) and inferential statistics. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to test direct and mediated relationships. The results revealed no significant direct relationship between financial or non-financial motivation and employee performance. However, personal factors—including intrinsic motivation, commitment, and proactivity—were positively related to performance. Notably, financial and non-financial motivation exhibited significant indirect effects on employee performance through personal factors, indicating a full mediating role. The study concludes that personal factors are critical in translating motivation into performance and recommends that the university consider employee personal attributes when designing financial and non-financial incentive programs. Prioritizing proactive, committed, and intrinsically motivated employees can enhance the effectiveness of motivational strategies and improve overall performance. Keywords: Financial Motivation, Non-Financial Motivation, Personal Factors, Employee Performance, Herzberg’s Two-Factor Theory, Expectancy Theory, PLS-SEM, Kenya Highlands University, Kericho.