The Effects of Remuneration on the Performance of Employees in the Private Sector
Chapter One
OBJECTIVES OF THE STUDY
It is one thing to be blessed with abundant human resources and another to manage these resources to achieve stated objectives. No organization can hope to move or improve positively without the effort of its workers and as such sound salaries or wages are a sine qua non for improved workers’ performance. They contributed in no small way towards improved performance in the organization.
Therefore, this study among other things is aimed at achieving the following objectives:
- To determine the relationship between salaries and wages and workers’ productivity in the Dangote group.
- To measure a day’s work: earnings are directly proportional to the time worked but rates are mostly applied to daily paid employees.
- To ascertain whether salaries and wages administration boosts the performance of the
- To identify how workers’ productivity, negative attitude to work during working hours, and low payment of remuneration affect performance in the Dangote group and to proffer suitable suggestions and solutions.
- Fringe benefit: this is an extra amount paid to employees to improve their working conditions, it is information about rent supplements, transport allowances, etc. It gives the employee desirable working conditions and it satisfies their needs.
CHAPTER TWO
LITERATURE REVIEW
Due to universal applicability of salaries and wages system in an organization, some literature exist even though it may vary in inform of structure and system of application.
THEORETICAL REVIEW
According to Dagget and Habu (2004:31) “Salary administration is the method and process that an organization uses for compensating their workers”. They argued that workers cannot obtain financial job satisfaction unless the organization achieved its goals Stoner and Freeman (2002:97) consider a new pay approach as an approach towards salary system that leads to the process of setting and achieving organization objectives. These scholars advance that linking pay to the labour market and variable pay to success of the organization, the managers can use the salary system to foster teamwork and other organizational goals. It is therefore necessary for the reward system not to make inflationary rate in the country into related business to be introduced by both private and public sectors of the Nigeria economy. Strong and Freeman observed further that every good compensation or salary policy is aimed at attracting, retaining and motivating high quality employees in an organization. It is also aimed at rewarding organization members for high performance and high productivity by making sure that compensation method are such that the organization can shoulder conformably.
As Obikeze and Anthony (2003:286) pointed out, salaries or wages are the reward that individuals receive from organization in exchange for their labour and that every organization has its distinct salary system. Choosing a successful salary system depends on considerations of salary levels, salary structure and individual pay determination. Lawal (2006:22) argues that there are some factors that affect salary and wages level in an organization. Some of these factors are:
- Influence of trade union
- Prevailing salaries and wages in the industries
- Government legislation
- The labour market
- Organization ability to pay
- Productivity
Lawal also argues that every orgnisation has its salary system. Choosing a successful salary and wages depend on the consideration of salary level, structure and individual pay determination and performance (Lawal 2006: 23).
According to Kamar (2005: 48) there are three typical ways in which organization can administrate its salaries and wages.
Ad hoc increase in salaries and wage are given erratically often at the demand of the employees rather than at the initiative of the company. In a small organization, it can produce an illogical and unfair salary structure which will cause discontents and jealousy. For obvious reasons, salaries and wages paid by this system are intended to be confidential. Incremental scales, in this system, long service and loyalty are encouraged by regular high trade. Salaries in the incremental system is non- confidential because all staff’s jobs are evaluated and graded. The salary and wages range appearing as most schemes permit a manager toward increment for exception merit or withhold an increment for unsatisfactory work or conduct but as a robe, the standard increment is given autocratically. It is customary for salaries and wages incremental system to be non-confidential.
Thus, unemployment can exist for only a short period of time and if unemployment does not exist, its due to the fact that workers are shiftless are lazy and would not work for the going wages or salaries rate. This work emphasis is placed on the supply of labour.
Gilelman (1968) “Investment theory of wages and salary” He proposed on investment of wages as a replacement for the marginal productivity (MPT). That as the marginal productivity theory focuses on the output of labour input, wages and salary are assumed to be a return on worker investment, then one would assume that the larger the investment, the higher the wages and salaries. In practice, however, this will not always be true (Ibid 1947).
CHAPTER THREE
RESEARCH METHODOLOGY
The aim of this chapter is to discuss the various methods that have been employed in this research work. The sample used method of collecting data, the various sources of data and method analyzing the data. The objective of this is to provide the authority base for the research.
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According to Ozongrou (1992:35), methodology draws the map chart upon which the research project is executed. Methodology permits a successful replication of the work by other researchers.
RESEARCH DESIGN
This is concerned with the various methods to be employed in the collection of data necessary for the computation and successful completion of the research study. The research method and design used in any research is substantially determined by the nature of the research problems and the purpose of the study. Since this research is a fact finding study, descriptive research method was selected in order to appraise the role of salaries and wages administration as a tool for improving employees’ performance in an organization. The descriptive approach is based on answers to certain relevant research questions.
In the process of achieving the objective, the questionnaire and oral interview research techniques were employed.
POPULATION OF THE STUDY
The public sector consists of very big institutional formulations and with several employees running into thousands. Ideally, the public service is the focus of the study, but for resources constraints and the fact that there is a specific case study area, this research is based specifically in Dangote group.
For clarity 150 staff were the population of the study in Dangote group.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
DISCUSSION OF FINDINGS
One of the most important steps in the research process is data analysis. This chapter seeks to present and analyse the data collected through the means of questionnaire and personal interview with a view to finding out answers to the research questions raised in the proposal. This chapter also seeks to test the ability of the hypotheses with questions to verify them. The accomplishing responses are evaluated in order to validate or reject the hypotheses. The researcher considers this order of presentation necessary for easy reading and understanding.
CHAPTER FIVE
SUMMARY OF FINDINGS, DISCUSSIONS, RECOMMENDATIONS, IMPLEMENTATIONS AND LIMITATIONS
SUMMARY OF FINDINGS
The purpose of this work is to examine renumeration as a tool for improving employees’ performance in an organization in Nigeria, A case study Dangote group.
In the course of this work, the objectives of the study raised research question on what salary and wages administration is all about. The study objective, questioned if the existence of salary and wags administration could lead to improvement of employee’s performance. The study was to ascertain whether the performance of employee’s is a product of salary and wages administration.
The study made an attempt to explore the role salary administration play in increasing productivity and performance in the development of public service. The study also investigated the contribution of salary administration with regard to increment, how the council handles salary and wages, how salary motivates workers on the enhancement of productivity and performance of economic growth in the Nigeria economy. This is because employees believe that the method of payment will also boost their purchasing power. The analysis of the data indicated that salary administration has positive role to play and has been playing in fostering economic and administrative development in Nigeria.
DISCUSSION
The finding that salary and wages administration enhance employees’ performance and productivity corroborated the views of Mohammed (2005) who observed that the functions of salaries and wages administration are to attract capable, competent and qualified employees into the organization and to motivate workers into greater and effective performance, and to ensure continued dedication, commitment and retention of workers in an organization.
The findings of this study are also in accord with that of Akintoye (2000) who asserted that money remained the most significant motivational strategy for achieving employees’ greater performance and improved productivity in organizations.
CONCLUSION
The importance of human resources to any organization be it private or public cannot be overemphasized. Organization objectives cannot be accomplished without taking care of the interest of employees who co-ordinate the activities of the organization. To achieve effectiveness and efficiency of workers and to reduce wastage at the work place, employers of labour must take care of the interest of their workers. However, it is generally assumed that salaries and wages administrators should be a model who should establish terms and conditions for employers which set standard for employers
to follow. The impact of salary administration on employees’ performances in this respect has not been encouraging in Nigeria. There has been a drastic reduction in the real salaries of workers both in private and pubic organizations which has not been possible for them to live on their grossly reduced salaries and wages. It is therefore inevitable that if such large reduction is real salaries and wages take place, they will service adverse effect on morale, productivity and the devoting which the employees give to their official duties.
It should also be noted that there will be strong pressure on them to take second job or engage in strong pressure to take other form of income generation which could have delicious effects on the provision of service to public. This will require that job objectives be produced so that there are some criteria against which to judge individual performance (output).
RECOMMENDATIONS
People are the most important of all the resources required for the attainment of organizational goal. As such, human resources have to be managed with the greatest care and skills in order to motivate staff and enhance productivity and performance of their organization. Boosting people’s morale is an extremely complex task, it involves provision of external rewards like pay rise and method of administration, promotions and praise compliments. It also involves the creation of conducive environment so that people can get self administered reward such as satisfaction from accomplishing of challenging task. However, among the method of boosting employer’s morales is salary administration.
In view of the above, the following recommendations are made:
- That the salary administration policy for public officers be implemented acrossboard so that all the level officers especially the junior cadre can have a sense of belonging. This will go a long way in improving their performance and hence lead to higher productivity
- That salary increment should be rewarded as at when due from the analysis, itshows that if workers remuneration increases, it will improve employee They should be no delay on the increment.
- Promotionpolicy in the public service especially in Dangote group be improved and should be done on merit as when due to deserving
- Theresearcher also advocates for good Adequate funding, constant auditing and accountability be strictly adhered to in handling salaries and wages matter in Dangote group.
- Staff training and development should be pursuing vigorously. Training shouldbe organized by pursuing vigorous fields to improve employee’s capabilities in the execution of their responsibilities and their
- There should be cordial relationship between the leader and the lead.There should be forum created where the top management officers interact and share ideas with their subordinates. This will give subordinate a sense of belonging and a psychological boost their morale which will enhance their productivity and their performance in an organization.
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