The moderating effect of workplace contentment on social entrepreneurship and small and medium enterprise (SME) performance among agro-processing SMEs in western Kenya

Abstract

This study examined the moderating effect of workplace contentment on the relationship between social entrepreneurship practices and Small and Medium Enterprise (SME) performance among agro-processing enterprises in Bungoma, Kakamega, and Busia counties of Western Kenya. The study was anchored in stakeholder theory, social cognitive theory, and the job demands–resources model. A correlational survey design was adopted. The target population comprised 2,500 employees of registered agro-processing SMEs across three counties. A sample of 333 respondents was determined using a standard sample size formula, with stratified random sampling ensuring representation across counties and enterprise sizes. Structured questionnaires were administered with reliability confirmed (Cronbach's α = 0.83). Data were analyzed using descriptive statistics, Pearson correlation, and hierarchical regression analysis. Social entrepreneurship practices significantly predicted SME performance (β = 0.287, p < 0.01, R² = 0.082). Workplace contentment independently and more strongly predicted SME performance (β = 0.356, p < 0.001, R² = 0.127). Hierarchical regression confirmed that workplace contentment significantly moderated the social entrepreneurship–performance relationship (B = 0.156, p < 0.05, ΔR² = 0.042). The conditional effect of social entrepreneurship on performance increased from B = 0.156 at low contentment to B = 0.396 at high contentment, demonstrating a positive amplifying moderation. The full model explained 22.9% of SME performance variance. The study concludes that workplace contentment is both a significant direct predictor and a positive amplifying moderator of SME performance, with higher employee contentment more than doubling the performance returns from equivalent social entrepreneurship investments. A structural paradox was identified: Western Kenyan agro-processing SMEs invest substantially more in external social entrepreneurship practices than in internal employee-focused practices, despite the latter showing the strongest performance associations. Agro-processing SME managers should reposition employee welfare programs as core strategic investments, implement transparent compensation benchmarking, establish structured recognition programs, and create accessible career development pathways for front-line employees. County governments should treat social entrepreneurship capacity and employee well-being as interdependent policy domains and develop affordable employee benefit packages to address identified contentment deficiencies. National policymakers should integrate employee well-being indicators into the standard SME monitoring framework to enable longitudinal tracking. This study contributes the first quantitative test of workplace contentment as a moderator of the social entrepreneurship–performance relationship in agro-processing SMEs in Western Kenya, employing a hierarchical regression framework that extends existing moderation literature in African SME contexts.