COMPENSATION AND NURSE RETENTION IN LEVEL 4 FAITH-BASED HOSPITALS IN NYANZA REGION, KENYA: THE MODERATING ROLE OF ORGANIZATIONAL CULTURE

Abstract

The objective of this study was to examine the influence of compensation – basic pay, benefits, and allowances - on nurse retention in Level 4 faith-based hospitals in Kenya’s Nyanza Region, with organizational culture as a moderating variable. Nurse turnover remains a global challenge, with nursing experiencing higher attrition rates than other healthcare professions. Guided by Maslow’s Hierarchy of Needs, the study conceptualized compensation as enhancing nurses’ retention by addressing fundamental and psychological needs.  An explanatory research design with a quantitative approach was employed. From a population of 442 nurses, 210 respondents were selected through stratified and simple random sampling. Data were collected using structured questionnaires and analyzed through PLS-SEM in SmartPLS 4.0. Results revealed a weak but significant positive correlation between compensation and nurse retention (rₛ = 0.268, p < 0.001). Compensation significantly predicted retention (β = 0.387, p = 0.000), explaining 14.5% of the variance. With organizational culture introduced, the path coefficient declined (β = 0.251, p = 0.000), and variance explained rose to 37.8%. However, the moderating effect was weak and non-significant; hierarchy culture showed a negative influence.  The study concluded that compensation positively influence retention regardless of the prevailing organizational culture. Hospital administrators should enhance salary structures, health insurance, and retirement benefits, to strengthen retention.