In Kenya, devolution now allows county governments the space to design innovative models that suit the terrain of their unique health sector needs, sufficient scope to determine their health system priorities and the authority to make autonomous decisions on subsector resource allocation, expenditure and employee management. Major human resource functions including employee hiring and firing, nature of tenure, defining the compensation package; management transfers, promotions, and sanctions; skills mix and training have been decentralized. The general objective of this study was to establish the influence of devolved human resource functions on employee performance in the health sector in Kenya. The study adopted descriptive research design in collecting data from the respondents. The target population of this study was 600 employees of Mbagathi District Hospital from which a sample of 180 employees was taken. This study collected primary data from the respondents through questionnaires. A stratified sampling technique was carried out by involving all the targeted respondents and primary data was collected through the use of questionnaires. The secondary data was obtained from published documents such as journals, periodicals, magazines and reports to supplement the primary data. Both qualitative and quantitative data analysis methods were used. A pilot study was conducted for the data collection instrument. The data was analyzed with help of SPSS version 21 and Excel. The study adopted correlation and multiple regression analysis at 5% level of significance to determine strength and direction of the relationship of the variables under study. The analysis showed that reward had the strongest positive (Pearson correlation coefficient =.852) influence on employee performance in the health sector. In addition, recruitment process, training and work environment are positively to performance in the health sector with Pearson correlation coefficient of .679, .545 and 639 with p-values of .001, 004, .010 and .008 respectively. The study established that reward was the most significant factor. The study recommends for similar studies to be undertaken in other hospitals in Kenya for generalization of the findings of this study. The study concluded that good reward systems, recruitment process, training and work environment affects the performance of the employees positively. The study therefore recommends that to improve employee performance, the management of the health institutions should make sure that all the employees undergo training exercises, that the employees should be rewarded and be given other benefits such as health insurance, sick leave, annual leave, maternity leave to motivate employees.

Key Words: Human Resource Functions, Employee Performance, Health Sector

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