The Effect of the Current Inflation on Employee Performance; the Case of Civil Service Workers in Nigeria
CHAPTER ONE
Objectives of the Study
The broad objective of this study is to determine effect of inflation on civil servants performance in Nigeria. Specifically, the study strives:
- To evaluate the adverse effect of inflation on employee performance in organisation.
- To identify the vital role of civil servants performance in organisational performance
- To suggest possible financial strategies to engage in employee performance in the midst economic
CHAPTER TWO
LITERATURE REVIEW
CONCEPTUAL REVIEW
The concept of inflation
According to Balami (2006), inflation is a situation of a rising general price level of broad spectrum of goods and services over a long period of time. It is measured as the rate of increase in the general price level over a specific period of time. To the neo-classical and their followers at the University of Chicago, inflation is fundamentally a monetary phenomenon. In the words of Friedman, „„inflation is always and everywhere a monetary phenomenon and can be produced only by a more rapid increase in the quantity of money than output.” According Hicks, „„inflation is a continuous rise in general price level.” Dernberg and McDougall (1976) are more explicit when they wrote that „„the term inflation usually refers to a continuing rise in prices as measured by an index such as the consumer price index (CPI) or by implicit price deflator for gross national product.” Keynes and his followers emphasise the increase in aggregate demand as the source of demand-pull inflation.Inflation can be conceptualized as persistence raise in the general price level of broad spectrum of goods and services over a long period as a result of cost-push. To the monetarists inflation is defined as too much money chasing too few goods. Inflation can be measured using the CPI formula below
CPI = Pt + 1 -Pt/ Pt X 100 ——————————————————— (2.5)
Where Pt + 1 is current year price, Ptprevious year price or base year price.
In Nigeria, inflation is derived from the consumer price index (CPI). The national Bureau of Statistics (NBS), formerly known as the Federal Office of Statistics (FOS), is responsible for the computation of this index and reports it in its monthly publication, the „Statistical News‟. Officially, the CPI is called the „Composite Consumer Price Index‟ since it combines the rural and urban CPIs. The percentage contribution of items in the CPI basket of goods are thus: Core (All items less farm produce) 40.95%, Core (All items less farm produce and energy) 33.59%, Food 63.76%, Food and Non-alcoholic Beverages 64.41%, Alcoholic Beverages, Tobacco and Kola 2.06%, Clothing and Footwear 3.21%, Housing Water, Electricity, Gas and other Fuel 18.10%, Furnishing and Household equipment maintenance 3.82%, Health 1.36%, Transport and Communication 4.35%, Recreation and culture 0.89%, Education 0.21%, Restaurant and Hotels 1.29%, and miscellaneous goods and services 0.30%. (Source: CBN Occasional paper No. 32, 2007).
CHAPTER THREE
METHODOLOGY
Ex-post facto research design was adopted. The choice is predicated on the account that the independent variable(s) have already occurred and the study starts with the observation of the dependent variable(s). Thus, the study considered the independent variable in retrospect to their possible effect on the dependent variable(s).
The area of this study is Nigeria; it considered the effects of inflation on civil aervants performance in Nigeria with emphasis in the Civil service between 1999 and 2020. The Civil service examined include, Chams Plc, CWG (CAOMPUTER Warehouse Group), Courteville Business Solutions Plc, African Prudential Plc, Airtel Nigeria Plc. The choice of the area and period was necessitated by the grey nature of both the country and period as no such study has been conducted in the country with emphasis on the research variables. Use was made of secondary data to be extracted from the National Bureau of Statistics (NBS) reports and Central Bank of Nigeria (CBN) bulletins.
CHAPTER FOUR
RESULTS AND DISCUSSION
Using model 1 descriptive statistical analysis between the dependent and independent variables was conducted showing some indicators. For instance, the mean which implies the average value of the series was determined by dividing the total value of the series by the number of observations. The average percentage of civil aervants performance proxy by aggregate cost of human development (AGCHUD) across the selected Civil service within the period under review (2012-2020) stood at 10%. This indicates that the volume of civil aervants performance among the Civil service is low. Civil aervants performance proxy by aggregate cost of human development has minimum and maximum values of 0.085500 and 0.125900 respectively.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
Conclusion
In conclusion, this study has contributed to the understanding of the relationship between inflation and civil servants’ performance, focusing on the Nigerian Civil Service. Through the use of quantitative data and hypothesis testing, the study found that the level of inflation (ANIFLR) has an insignificant impact on the aggregate cost of human development (LAGCHUD) in the Nigerian Civil Service. However, it was observed that the aggregate cost of human development (LAGCHUD) has a significant impact on the organization’s return on assets (OROA) in the Nigerian Civil Service. This suggests that while inflation may not directly affect human development costs, investing in Civil servants development can positively influence organizational performance in terms of return on assets.
The findings of this study underscore the interconnectedness of inflation, civil servants’ performance, and organizational outcomes in Nigeria. It highlights the importance of addressing inflationary pressures to enhance the performance of the Nigerian Civil Service. Furthermore, it emphasizes the significance of investing in Civil servants development as a means to improve organizational performance.
Recommendations
Reduction of Inflation
Given the statistically negative and insignificant effect of inflation on the aggregate cost of human development, it is recommended that the Nigerian Civil Service and the Nigerian government take proactive measures to reduce inflation. This may involve implementing monetary and fiscal policies aimed at stabilizing prices and curbing inflationary pressures. By reducing inflation, the performance of the Nigerian Civil Service can be enhanced, leading to improved organizational outcomes.
Investment in Civil servants development
To sustain the positive influence of civil servants’ performance on organizational performance (return on assets) in the Nigerian Civil Service, it is essential to prioritize long-term training and general Civil servants development initiatives. This may include providing continuous training programs, skill development workshops, and opportunities for career advancement. By investing in the development of its workforce, the Nigerian Civil Service can cultivate a skilled and motivated workforce capable of driving organizational success.
Addressing inflationary pressures and investing in Civil servants development are critical steps towards enhancing the performance of the Nigerian Civil Service. These recommendations, if implemented effectively, can contribute to improving organizational outcomes and ultimately fostering socio-economic development in Nigeria.
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