The purpose of the study was to determine the effects of extrinsic motivation on employee performance in medium class hotels in Kisumu city, Kenya. The specific objectives of the study were to examine the effects of working conditions, incentives and interpersonal relations on employee performance. The study adopted survey research design. The target population was the employees in medium class hotels. Simple random sampling and stratified sampling were used. Questionnaires were the research instruments used. Descriptive and inferential statistics (Pearson product moment and multiple regression) were used to analyze data. Results revealed that there is no single set of extrinsic motivation that leads to effective performance and, therefore, combinations of extrinsic motivation are required to ensure effective performance. It may also be concluded that improved extrinsic motivation significantly (P=0.05) improves employee performance at work especially in medium class hotels. This implies that managers should increase extrinsic motivation to increase employee performance. Keywords : Extrinsic Motivation, Employee Performance, Medium Class Hotels
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