With increased competition within the business environment, many businesses world-wide are struggling to survive through searching for mechanisms and ways to increase their creativity, innovativeness and competitiveness. This paper sought to examine the effect of employee involvement on the performance of classified hotels. It adopted a cross-sectional descriptive research design to determine the causal relationship between employee involvement and the performance of classified hotels in Nakuru County in Kenya. The study utilized Yamane’s formula to determine the sample size. Proportionate sampling technique was applied in generating the sample. A sample of 205 employees, out of the 420 targeted within the 12 classified hotels domiciled in the county, was used in obtaining the relevant data to this study. The data collected was primary data and it was obtained by use of questionnaires. Statistical Package for Social Sciences (SPSS) V2.0 was used in data analysis. The study determined that employee involvement impacted positively on performance of classified hotels in Nakuru County, β = .676, t= 10.903, p = .000. The results implied that a unit increase in the level of employee involvement in the hotels would lead to an increase in the performance of the hotels by 0.676 units.