the effects of wage incentives and
TRANSCRIPT
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ODOH, FELIX ADIMORA
PG/MSc/09/51683
THE EFFECTS OF WAGE INCENTIVES AND FRINGS BENEFITS ON THE
PRODUCTIVITY OF NIGERIA WORKERS: A STUDY OF ENUGU STATE
LOCAL GOVERNMENT SERVICE
COMMISSION. (1999-2007).
Education
A THESIS SUBMITTED TO THE DEPARTMENT OF PUBLIC ADMINISTRATION
AND LOCAL GOVERNMENT, UNIVERSITY OF NIGERIA NSUKKA CAMPUS
Webmaster’s Name
Digitally Signed by Webmaster‟s Name
DN : CN = Webmaster‟s name O= University of Nigeria, Nsukka
OU = Innovation Centre
2011
2
THE EFFECTS OF WAGE INCENTIVES AND
FRINGS BENEFITS ON THE PRODUCTIVITY
OF NIGERIA WORKERS: A STUDY OF ENUGU
STATE LOCAL GOVERNMENT SERVICE
COMMISSION. (1999-2007).
BY
ODOH, FELIX ADIMORA
PG/MSc/09/51683
DEPARTMENT OF PUBLIC ADMINISTRATION
AND LOCAL GOVERNMENT,
UNIVERSITY OF NIGERIA, NSUKKA.
JULY, 2011
3
TITLE PAGE
THE EFFECT OF WAGE INCENTIVITES AND FRINGE BENEFITS ON
THE PRODUCTIVITY OF NIGERIAN WORKERS: A STUDY OF ENUGU
STATE LOCAL GOVERNMENT SERVICE COMMISSION. (1999-2007).
BY
ODOH FELIX ADIMORA
REG. NO. PG/MSC/09/51683
A PROJECT SUBMITTED TO THE DEPARTMENT OF PUBLIC
ADMINISTRATION AND LOCAL GOVERNMENT, UNIVERSITY OF
NIGERIA, NSUKKA.
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE
AWARD OF MASTERS OF SCIENCE (M.Sc) DEGREE IN PUBLIC
ADMINISTRATION WITH SPECIALISATION IN HUMAN RESOURCES
MANAGEMENT.
JULY, 2011.
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APPROVAL/CERTIFICATION PAGE
This is to certify that Odoh Felix Adimora, a post graduate student of Public
Administration and Local Government, University of Nigeria, Nsukka with Reg.
No. PG/M.Sc/09/51683 has satisfactorily completed the requirements for the award
of Master of Science Degree (M.Sc) in Public Administration. (Human Resources
Management).
--------------------------------- -----------------------------------
Dr. B.A. Amujiri Prof. F.O. Onah
Supervisor Head of Department
--------------------------------- ------------------------------------
Prof. E.O. Ezeani External Examiner
Dean of Faculty
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DEDICATION
This work is dedicated to my God and Personal Saviour, Jesus Christ for his
protection and inspiration throughout the period of this programme. Also to my
beloved wife for her encouragement and support.
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ACKNOWLEDGMENT
With sincere appreciation and gratitude, I acknowledge the contribution of
many people towards the successful completion of this project.
First and foremost, I am grateful to my ever ready supervisor, Dr. B.A. Amujiri
for his guidance and commitment. It was indeed his close supervision and direction
that immensely contributed to the successful completion of this work.
The same quantum of gratitude is extended to my lecturers in the Department of
Public Administration and Local Government, my Head of Department, Prof. Fab.
O. Onah. Prof. F.C Okoli, Prof.R.C. Onah, Prof. C.Ogonu, Dr. (Mrs.) M.A. Obi, Dr.
(Mrs.) Uche Agu and a host of others for their invaluable knowledge and
encouragement.
My warm gratitude also goes to my wife, Mrs. Ebere Adimora and my
children- Chika, Chdozie, Chinenye, Chimaobi and Arinze for their support and
understanding.
Finally, to my colleagues in the M.Sc class who made the learning
environment conducive and accommodating.
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ABSTRACT
This work examined the effects of wage incentives and other fringe benefits on the
productivity of Nigerian Workers. (A study of Enugu State Local Government
Service Commission, from 1999-2007). It has been observed that with proper
motivation through adequate wage system and fringe benefits in organization,
Nigerian workers‟ moral will be boosted for higher productivity.
The methodology adopted in this study is empirical approach. Data for the research
were generated from both primary and secondary source. Primary sources included
questionnaire and personal interview. In the area of secondary sources, documented
materials used include text books, journals, conference and seminar papers,
newspapers, the internet and other non-classified documents.
The major findings of this study was that irregular and inadequate wages/salaries,
low level of fringe benefits and lack of collective bargaining process brought about
low productivity of workers of Enugu State Local Government Service
Commission.
The research also found out that financial as well as non-financial reward,
promotion and conversion are strategic in the promotion of productivity in
organizations.
On the basis of the findings, the following recommendations were made; salaries
and allowances should be very regular, free education at all levels, especially
workers children, buying own houses and cars through mortgage system-partnership
with government and other financial institutions, sustainable welfare scheme and
insurance policy for workers, reward for efficiency and hard work and timely
promotion and conversion of workers.
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TABLE OF CONTENTS.
Title Page …………………………………………………………………….i
Approval/Certificate …………………………………………………………ii
Dedication ……………………………………………………………………iii
Acknowledgment …………………………………………………………….iv
Abstract ………………………………………………………………………v
Table of Contents ……………………………………………………………vi
CHAPTER 1: INTRODUCTION
1.1 Background to the Study ……………………………………………..….1
1.2 Statement of the Problem ………………………………………….…….5
1.3 Objectives of the Study ……………………………………………….…7
1.4 Significance of the Study ………………………………………………..8
1.5 Scope and Limitations of the Study ……………………………………...9
CHAPTER 2: LITERATURE REVIEW AND METHODOLOGY.
2.1 Literature Review …………………………………………………….…12
2.1.1 Concept of Wages and Salaries …………………………………….…12
2.1.2 Concept of Fringe Benefits ……………………………………….…..17
2.1.3 Wage Determination and Collective Bargaining ……………………..22
2.1.4 Principles of Motivation and Productivity ……………………………28
2.1.5 Gap in Knowledge …………………………………………………….35
2.2 Hypotheses …………………………………………………………….36
2.3 Operationalisation of Key Concepts ……………………………….…...36
2.4 Methodology …………………………………………………………....39
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2.4.1 Type of Study …………………………………………………………39
2.4.2 Data Gathering Instruments ……………………………………….....40
2.4.3 Validation of Instruments …………………………………………....40
2.4.4 Reliability of Instruments ………………………………………….....41
2.4.4 Population of the Study …………………………………………… ..41
2.4.5 Sample of the Study ………………………………………………....41
2.4.6 Method of Data Analysis…………………………………………….42
2.5.Theoretical Framework ……………………………………………….42
CHAPTER3:BACKGROUND INFORMATION ON THE AREA OF STUDY
3.1 Background Study on Enugu State Local Government Service
Commission
………………………………………………………………………….....47
3.2 Organogram/Structure of the Commission …………………………...53
3.3 Functions of the Commission ………………………………………...54
3.4 Funding …………………………………………………………… ...56
3.5 Fringe Benefits in the Commission ………………………………….56
3.6 Salary Structure of the Commission ……………………………… .57
3.7 Achievements of the Commission ………………………………… .58
3.8 Major Setbacks of the Commission …………………………………61
3.9 Tenureship/Memebers of the Commission …………………………..61
CHAPTER 4: DATA PRESENTATION, ANALYSIS AND FINDINGS.
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4.1 Data Presentation …………………………………………………….63
4.2 Data Analysis ………………………………………………………...67
4.3 Discussions and Findings …………………………………………....91
CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS.
5.1 Summary …………………………………………………………....97
5.2 Conclusion …………………………………………………………..98
5.3 Recommendations …………………………………………………..100
Bibliography ……………………………………………………...103
Questionnaire ……………………………………………………..108
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The exponents of scientific management Taylor (1911), and his followers –
maintained that the basic motive of man at work was economic. Money was seen as
a principal motivation instrument. While the motivating power of money and
material rewards could not be ignored, emphasis later shifted from economic man to
social man. (Ezeani. 2005:135). This was the outcome of the Hawthorne experiment
conducted by Elton Mayo at the Western Electric Company. The experiment drew
attention to the effects of group membership and interaction on production, attitude
and job satisfaction. The study gave rise to human relations movement which
maintained that man does not just work for money, that other personal and
interpersonal considerations, such as personal worth, recognition, friendship, social
pressures from group members and status are powerful in determining production
and level of job satisfaction. (Osuji,1985:91). In other words, it has become
increasingly clear that beyond economic needs, man has some social-psychological
needs that should be stratified in order to elicit behaviour towards increased
productivity.
While the traditional theories of management as exemplified by the Scientific
Management Movement, stress the motivating power of money and material
rewards, the classical theories take note of the latter, but, lay greater emphasis on
satisfying the psychological needs of the workers.
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Wage incentives and fringe benefits are motivational factors. According to
Croft, (1996:46), motivation can be defined as “impulses that stem from within a
person and lead him to act in ways that will satisfy those impulses” In other words,
the concept, motivation, implies that there is some driving force within individuals,
which drives to attempt to achieve a goal or objective, in order to satisfy their need
or needs. (Croft, 1996:46). Therefore to say that managers motivate their employees
is to say that they do those things which they hope will satisfy those drives and
desires and induce the subordinates to act in a desired manner. (Koontz et al,
1983:632).
Alugbuo (1981:13) asserts that people work to get reward for their efforts.
The exchange of labour for financial rewards is the heart of pay process. People do
not put forward their best unless they get reward for their work, based on what the
current social and economic climate dictates as fair.
Ubeku (1975:301) stated that, the payment of good salaries and wages is
fundamental to the increase in the prerequisite for effective performance. In order to
motivate people to put maximum efforts, it is essential that their various needs,
especially as it concerns their wages and other fringe benefits, be satisfied as far
as practicable. In Nigeria, the salary structure falls bellow the level to maintain
efficiency of workers. The salary structure is not in line with the economic realities.
According to Papola (1970:79): “a just minimum wage to maintain not only the life
but the health and the vigour of the working people is a law of necessity and knows
no other law”.
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The single most important obligation owed by an employer to an employee is
to pay his or her wages. Typically, wages, salaries and other related costs (pensions,
etc) make up about 60 percent of the total costs of running a major business.
Employers, therefore have more than a passing interest in this aspect of their
operations. There are other important influences on these activity-trade unions
negotiating a higher price for labour, competitors seeking to attract the best staff and
the state seeking to impose minimum standards of working conditions for all
employees (Cole, 2005:30).
A benefit is an additional compensation given to employees as a reward for
organization membership. Because of fringe benefits cost to employers, it is
important to indicate the scope and the overall costs associated with providing such
benefits to employees. According to Zolthistsch et al (1970:136), it‟s all financial
and non-financial payments to employees that are over and above the agreed upon
basic salary rate due to the employee for the minimum result expected on the job.
Armstrong etal (1970:36) also said that “fringe benefits when combined with the
basic pay of an individual forms that total remuneration which is the entire package
of pay and benefits received by each employee, their value to an individual in more
accurate basis for comparison with outside market rates than straight salary”.
According to Sunken (2008:20) “Motivation and productivity are twin
concepts in organizational development. First, motivation works as the means
toward attaining productivity as an end, secondly, motivation is the best cause to
reach productivity as favourable effects and lastly, motivation is the stimulus to
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trigger productivity as a response”. People need motivation just as pieces of
equipment need fuel and operators. This is highly demanded to ensure that they are
always at their optimum working condition. In turn, this will absolutely lead to
optimum productivity. (Sunken, 2008:20).
The necessity for managers and administrators to motivate their employees
cannot be over-emphasized. There is no doubt that the ability of any organized
enterprise and, indeed any group, to achieve its goals depends to a large extent on
the motivation of its employees. Indeed no manager or administrator can succeed in
achieving optimal productivity for his or her enterprise without knowing what
motivates the people. (Ezeani 2005:136). As Koontz et al (1983:631) pointed out,
all those who are responsible for the management of any organization most build
into the entire system factors that will induce people to contribute as effectively and
efficiently as possible. A manager does this by building into every possible aspect
of the organizational climate those things which will cause people to act in desired
ways”. According to Onah (2008:279), employee motivation represents one of the
largest competitive reserves and a key element for increasing competitive advantage
of any organization. Motivation is a central force and a strong factor in employee
performance equation. It is a set of force that leads people to act in particular ways.
Motivation represents the forces within a person that affect his or her direction,
intensity, and persistence of voluntary behaviour. (Moorhead and Griffin, 1995:78).
According to Pinder, (1984), direction refers to the fact that motivation is goal-
oriented, not random. People are motivated to arrive to work on time, finish a
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project a few hours early, or aim for many other targets. Intensity is the amount of
efforts allocated to the goal. For example two employees may be motivated to finish
their job a few hours early (direction), but only one of them puts forth enough effort
(intensity) to achieve this goal. Motivation also involves varying levels of
persistence, which is continuing the efforts for certain amount of time. Moorhead
and Griffin (1995) further assert that the starting point in a motivational process is a
need. Motivated behaviour usually begins when an individual experiences a
deficiency in one or more important needs.
When a worker believes that equity does not prevail; he is bound to withhold a
measure of his productivity in order to restore equity. To encourage higher
productivity, it is essential that a system of reward be designed that attempts to
relate hard-work to reward.
1.2 STATEMENT OF THE PROBLEM.
Currently, the poor performance, lack of dedication and commitment of workers
have been a matter of concern and debate among government officials, private
organization and the general public. How to improve the productivity of employees
has been the topic of many seminars, symposia and conferences. The reasons for
this trend, as well as appropriate avenue for the apportionment of blame, have
formed the basis for the controversy. Many reforms in the public service such as
work ethics, transparency, dedication and commitment to duties are some of the
ways of trying to improve productivity of workers in the country.
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According to Nwachukwu, (1988:29) Nigerian people have always come with
the impression that generally, Nigerian workers are lazy, sleepy, reluctant to act,
unconcerned and deceitful in their approach. These workers are said to lack the
zeal, the briskness and the momentum of hardworking people and generally, they
dislike hearing anybody talk about efficiency, dedication, competence,
determination and productivity, of which characterize people in a
production oriented society. In production oriented societies, the employers do
every thing humanly possible to retain their workforce and also recruit high quality
staff. The employers strive to boost the morals of their employees with a view to
eliciting positive attitude towards work, while the workers respond by fashioning
ways of making their organizations successful. In Nigeria, there is inadequate
stimulus to attract such responses, so the workers are still performing below
average, moral still down and efficiency still nil.
The problem of this study therefore, focuses on the low productivity in Enugu
State Local Government Service Commission, in the face of irregular and
inadequate salaries and other fringe benefits, between 1999 and 2007. The
problem can best be described with some pertinent questions.
1. Does the issue of irregular salaries/wages persists in Enugu State local
government service commission?
2. Does the issue of inadequate salaries/wage persists in Enugu State local
government service commission?
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3. Are the levels of fringe benefits in Enugu state local government service
commission affect the moral of workers?
4. What can be done to enhance workers productivity in the commission?
5. Are the salaries and other fringe benefits determined by collective bargaining;
the trade union and the management in the commission?
6. What type of incentives and fringe benefits (financial/non-financial) boost the
morale of workers of Enugu state local government service commission?
1.3 OBJECTIVES OF THE STUDY
The broad objective of the study is to find out the effects of wage incentives
and fringe benefits on the productivity of Nigerian workers: a study of Enugu state
local government service commission (1999-2007).
The specific objectives are:
1. Identify why the issue of irregular salaries/wages persists in organizations
especially in Enugu state local government service commission.
2. Identify why the issue of inadequate salaries/wages persists in
organizations especially in Enugu state local government service
commission.
3. Find out if the level of fringe benefits paid to workers in the commission
affect the morale of workers.
4. To find out the type of incentives that motivates the workers in the
commission and also the relationship between these incentives and
worker‟s productivity.
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5. Find out whether wages and other fringe benefits are determined by
collective bargaining.
6. To find out the whether financial or non-financial incentives boost the
morale of the workers.
1.3 SIGNIFICANCE OF THE STUDY
Productivity improvement is significant because it has a bearing on the standard
of living, the wages the employees can earn and the profit the organization can
make. Productivity affects costs, prices, output, employments, and investments and
thus plays a part in business fluctuation and in the rise and decline of industries.
Understanding the effects of wage incentives and fringe benefits on productivity in
the context of any organization helps in improving its efficiency and effectiveness.
Therefore in order to achieve high productivity, those who are instrumental to the
high level of productivity must be taken care of, their needs and welfare should be
paid adequately and promptly. The employees should have their own share of the
productivity dividends. Many researches have been conducted on the above subject
matter on both private and public organizations but none has focused on Enugu state
local government service commission. This study however, seeks to fill that
vacuum, especially considering the fact that even though there are basic
organizational principles, their applicability vary from one organization to another.
This work is expected to make some meaningful impact when applied to job
situations in Enugu state local government service commission and many other
organizations having similar problems. The research will equally discuss the means
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through which wage incentives and fringe benefits can be used as practical
measures to improve productivity. It will serve as a practical operating guide for
those who wish to introduce productivity improvement techniques through incentive
systems in their organizations.
Empirically, the research will serve as a blue print for organizational personnel
who are experiencing decline in productivity and the method to prevent future
occurrences. It will be of great help at any organizational level and to those who are
responsible for the management of a work place-the executives, managers,
supervisors, public administrators, government officials and other human resource
managers.
Finally, it will serve as a theoretical base and also add to the existing body of
knowledge on the effects of wage incentives and fringe benefits on productivity. It
will serve as a resource material in business schools, management programmes,
training sessions, development seminars and conferences on how best to motivate
workers and improve productivity.
1.5 SCOPE AND LIMITATIONS OF THE STUDY
The research work will analyze the activities of Enugu state local government
service commission in relation to wage incentives and fringe benefits given to the
workers of the commission. It has not been possible to generalize all the operational
areas of the activities of the commission but to limit the boundary of the study to the
policies regarding wage incentives and fringe benefits as it affects the seventeen
local government areas of Enugu state.
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The study will therefore concentrate on the effects of wage incentives and
other fringe benefits on the productivity of workers of Enugu state local government
service commission between 1999 and 2007.
This work has some limiting factors; there is no standard library in the
commission to source information on the establishment, policies and overall
programmes and activities of the commission. Secondly, there is no database from
where other vital information about the commission can be assessed. Some
difficulties were also encountered since we are using survey research whose
information is dependent on opinions, attitudes, values and preferences of the
people. The possibilities of biased answers may not be completely ruled out because
the respondents could be apprehensive that their responses could negatively affect
their job security.
Further more, the resentment by some public officers who are also
apprehensive in making vital information available to the researcher on the excuse
that information has been classified as “secret”.
These limitations were surmounted by visiting some local government
headquarters where I was able to collect useful information and document on the
administration, functions, and achievements, regulatory and supervisory roles of the
local government service commission in Enugu state. I also collected a letter from
the head of department, public administration and local government, University of
Nigeria, Nsukka, ensuring the commission that my research is merely an academic
exercise and the information collected will be treated with utmost secrecy.
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CHAPTER TWO
LITERATURE REVIEW AND METHODOLOGY.
2.1 LITERATURE REVIEW.
2.1.1 Concept of wages and salaries
2.1.2 Concept of fringe benefits
2.1.3 Wage determination and collective bargaining
2.1.4 Principles of motivation and productivity
2.1.5 Gap in knowledge
2.1.1 CONCEPT OF WAGES AND SALARIES
According to Shubin (1980:63), wages are the total earning a worker receives
for the performance of services within a period of time. That they are equal to the
product of an hourly rate, times the number of pieces plus houses, premiums and
fringe benefits. Thus a rate of pay may be based on time output or guaranteed
hourly rate plus a bonus ordinarily based on the amount of extra work put beyond
the standard required. Rosenberg (1978:214) also defined “wage as a stated sum per
price, hour, day or any other unit or period”.
Kiebel, (1983:50), was of the opinion that low productivity seen in the
country was as a result of poor wage administration. Workers are paid without
considering their needs which include feeding, housing, clothing and other higher
needs. Because of the poor wages they earn they are forced to eat low
quality food which tend to reduce their productivity level. Moreover, he asserted
that workers are not happy on their jobs after the end of each month. Employers, he
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further stated, tend to credit jobs done well by employees without providing workers
with good working conditions and incentives. These reduce the productivity level of
workers and consequently decreased the Gross National Product.
Alugbuo (1980:6) also wrote that, wage and incentive that workers receive
from his organization is significant to him or her in three major ways: economic,
psychological growth and motivation. The economic importance of wage and
incentives is most obvious because it serves as a way of obtaining the necessities
and luxuries people need and want. Many workers do not have sources of income
besides their pay; therefore employment in organization is the way to obtain the
material necessities of life which can be expected for such items as food, rent,
clothes and countless other good and services.
Beach (1980:69) in his writing believes that, wages are important for what
they symbolize. For some wages symbolize security, for other it represents success.
Increase in reward may permit one to join many clubs and associations. If the boss
or organization grants one a sizeable pay increase, this will show the subordinates
that the boss likes him and approves of his performance. He sees
the change in compensation as recognition of efforts, and he may drive a sense of
achievement from his work. On the other hand, the absence of adequate incentives
may cause discouragement, dissatisfaction and low morale at work.
According to Ejimofor (1982:31), Herzberg has postulated that if the people
are paid a wage they perceive as fair, paying them more will not increase
productivity. Unfortunately, the acquisition of more wealth is a form of self
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actualization for most Nigerian workers and many others allover the world. For
those people money can be used to satisfy the basic psychological and security
needs. It can also help nto satisfy some of the egoistic needs, as it has become a
status symbol indicating a culmination of other successes in life.
Nwachukwu (1988:190) believes that there are many bases for motivation,
job security, emotional security, respect, social acceptance, power, achievement and
son on. He contends that money was erroneously viewed as prime motivator in the
past; money was downgraded as a motivator but did not eliminate it. At times
financial incentives are more important to individuals. At other times financial
incentives occupy the spotlight. For example, a young man who is raising a family
and who just entered industry, the need for money to pay off home mortgage, for the
material of his family, and later for education of his children, may be very pressing.
Yet, at other times in his life, the goal of recognition and status achievement may be
most important. The value of financial reward is determined by what people have
learnt to associate it with.
When pay is tied as a yardstick for performance, money is an important
motivator. When it is not so tied, it does not motivate and satisfaction is low,
turnover and absenteeism high. Thus, a fair wage and salary policy and consistent
internal wage and salary relationships are vital to the achievement of individual and
group effort in any organization.
In our culture, the role of money as a primary motivator has not been
systematically documented. Writing on the importance of money as incentive in
25
Nigerian context, Anikpo (1980:15), argues that the Nigerian worker is so
intimidated and mesmerized by the money hegemony that his primary needs
become money and what money can buy. Okpara (1982:39) observed that no
amount of money can be too much for a Nigerian worker. Thus our system is based
on the values and the behavioural pattern of developed market economies and
anchored in the industrial base of the countries. This is apparent in our consumption
patterns which do not reflect the needs and absolute poverty of our developing
economy. Under the condition of very scarce resources, the emulation of the socio-
cultural system and especially the consumption pattern of the rich development
countries mean first of all that provision for basic food
stuffs, health services, clothing, housing, drinking water, education and
transportation system and the like are neglected. (Okpara, 1982:30).
Okpara further stated that, the provision of these basic amenities would
reduce the emphasis on financial incentives and not money as a motivator. He
observed that most of our civil servants are seen buying with their salary, things that
has no provision for, example water allowance, that it was only recently that
provision for transport allowance was made. Hitherto, transport to and from work
was paid from the workers yearly income or salary.
Onwumere (1982:31) posit that money is a reducer of anxiety, since the
extended family commitments of many people make them anxious about their
financial involvement and obligations. The implication is that, if financial reward
of the worker increase, their performance will improve, because this increase will
26
take care of their needs. Looking at the country today, and its level of development,
one would conclude that Nigerian people including the management and the work
force are still in the first level of human need hierarchy, struggling to satisfy the
basic needs-shelter, food, safety etc. since money is the quikest means of satisfying
these needs, almost every Nigerian today is ruled by a rapacious and inordinate
quest for money at all cost.(Eze,1982:5). The employers should recognize these
needs and increase the financial incentives to workers, in order to improve their
performance.
Schultz (1978:285) is for the opinion that, at the executive level, there is
evidence that salary may be more than at lower working levels. That even though a
higher salary at the executive level may not mean much difference in take-home pay
(because of higher taxes), most executives seems motivated to gain the extra
material possessions it will buy, but because it signifies accomplishment and
achievement in ones work.
Ocho (1982:16) stated that organization theories developed in Europe and
American to explain organization behaviour in Europe-American cultures can never
substitute for concepts for understanding of our organizational behaviour and
attitudes. Nigerian scholars believes that Nigerian workers respond to monetary
incentives more than other physiological and higher order needs as prescribed by
the orthodox western theories.
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2.1.2 CONCEPT OF FRINGE BENEFITS
The origin of fringe benefits in industries dates back to the 19th
century, the
time of Robert Owen (1800-1825). Owen improved the working conditions in his
factory, provided meals for employees in his factory and build houses for them. Few
fringe benefits which are very common today started in the 25 years of that century.
In 1886, the waiting house cooperation was the first to grant paid vacation to its
workers. (Zolthitsch, 1970:243).
According to Zolthitsch, after the 19th century, the rate at which the new
benefits were granted increased. In 1908, the workmen‟s compensation law for
federal government employee in American enacted. In 1911, Wisconsin enacted the
first state workmen‟s compensation law that was ruled to be constitutional by the
courts. Some companies offered pension and sick benefits to their employees as
many employers recognized that their employees should have desirable place to
work as well as some degree of job security and therefore provide various type of
fringe benefits on a more or less informed basis.
Benefits and services represent a tangible gain to employees in form of
monetary or non-monetary rewards. Over the years, diverse fringe benefits have
been introduced without the management realizing their cost of the organization‟s
finance. It is on this issue of cost that Ubeku categorically stated that every manager
should know that once a benefit has been given to an employee, it would be difficult
to remove it even if an offer of purchase of those fringe benefits is made. Ubeku
noted that fringe benefits have grown in the country today as a result of the
28
economic situation, while others have grown up either as a result of pressure from
the unions or from sheer initiation. Hence, Nzelibe (1991:27) in relation to the study
confirmed that Nigerian government offer many types of benefits which are
competitive and imitative in nature. She listed some Flippo‟s most frequently cited
advantage of offering employees sservices which include effective recruitment,
improved morale and loyalty, good public relations etc.
Employee remuneration is not just about pay, i.e wages and salaries. It is also
concerned with non-pay benefit, and sometimes as fringe benefits-in-kind. These
non-pay benefits are usually known as employee benefits, and sometimes as fringe
benefits or perks. Benefits are usually provided as a package of items, for example
pensions, subsidized meals, discounts on company products and the like. Such
benefits vary in importance to the individual. An older employee will value a
pension scheme much higher than young employee. Subsidized meals appeal more
to some employees than others who perhaps prefer luncheon vouchers. All
employees would probably welcome the opportunity of having a company car
(Core, 2005:38)
Fringe benefits have been accepted to have an important place in boosting
workers effectiveness and therefore are of value to the employer. Fringe benefit
stem from the theory of motivation. Motivation has been defined by many scholars
of management, for instance, Duncan (1978:74), defined it as concerned with how
behaviour is activated, maintained, directed and stopped. From managerial
perspective, we can rightly say that motivation relates to any conscious attempt on
29
the part of a person or group to influence the direction and rate of behaviour towards
the accomplishment of organizational goals. Glupeck, (1980:234), stated that
motivation explains why some people work hard and are well paid while others
perform poorly. He came with three critical factors that effect individual motivation
and they are: (i) individual needs, (ii) the nature of the job, (iii) the work
environment.
According to Beach (1972:213) employee benefits and services may be
classified into four; each category is in turn divided into principal kinds of benefits
and services commonly found in work organization. They are as follows:
(a) Employee security ( financial protection against risk).
1. Legally required employer contributions: old age, supervisor, disability, and
health insurance, unemployment insurance, workers compensation, state disability,
railroad unemployment.
2. Pensions
3. Life Insurance
4. Hospitalization
5. Medical and Surgical
6. Paid sick leave
7. Supplemental unemployment
8. Accident Insurance
9. Contribution to saving plans.
(b) Pay for time not worked
30
1. Holiday pay
2. Vacation pay
3. Paid leave for personal business
4. Military service
5. Voting time pay
(c) Social and recreational programmes such as parties, pennies, athletics facilities,
clubs and dances were financed wholly or partly by the employer.
2. Special aids and services such as saving plans, credit unions, loan funds, and
scholarship for employees and families, company purchasing service, medical
sickness for minor sickness, subsidy for food service, discount on purchase of
company, discount on purchase of company products, employee newspaper etc.
(d) Bonuses and Awards (not related directly to employee output).
1. Profit sharing bonus
2. Christmas bonus
3.Anniversary Awards
Many people believe that increasing fringe benefits, or benefits that are not
mandated, established loyalty and boosts production among employees. Some argue
that these beliefs are incorrect, but many others support them. It would be difficult
to examine the effects of all possible fringe, but looking at a few can give employers
a sense of how employee productivity might be increased by offering fringe
benefits.
31
Some countries offer free healthcare, but in other countries, people need to
buy insurance. Offering health insurances is a fringe benefit, and the quality of it
could be directly tied to employee productivity. In general, sick employees are not
productive employees, and any insurance offered to workers should be affordable
and offer reasonable amounts of coverage. Coverage should extend to family, as
worker productivity may also be affected if family members get ill. When
employees have affordable healthcare for themselves or family when needed,
workers productivity can increase due to better physical health and as a result of
company loyalty for receiving this benefit.
Another health-related fringe tied to greater employee productivity is access
to health club membership or to onsite workout facilities. This and other wellness
benefits can have a positive effect. There can be direct correlation between physical
health and ability to work harder. Access to health
clubs, nutritionist, weight loss programs and the like may all lead to healthier
employees with more energy to work.
Certainly, employee productivity can increase with fringe benefits that are
profit oriented. Sharing shares of stock or part of the profit in a company
communicates to employees that the company rises or fall by their efforts. This is
not always the case, as profits gained can be relatively small. Other benefits that
might prove more motivating are employee incentive programmes, set up so that
each employee has opportunity to earn incentive, like extra vacation days, gift
certificates, bonuses etc, if they boost personal productivity.
32
Some fringe benefits are only available to executive employees, which may
motivate these employees to work harder but may also alienate lower level
employees of a company. Things like access to vacation condos, use of private jets
or company credit cards are generally attractive to executives. If no benefits of this
kind, or even scaled down benefits are offered to others, it can foment discord.
Companies should make sure to offer benefits at all levels, instead of just at the top,
to keep employee productivity highest.
As great as fringe benefit may be when it comes to increasing employee
productivity, they aren‟t too helpful under bad working conditions. Employees
deserve basic rights, like being treated with respect by supervisors and being
paid fairly for their work. All the benefits in the world may not make up for
consistently poor management skills or under-market pay. (Posti 2005:11)
2.1.3 WAGE DETERMINATION AND COLLECTIVE BARGAINING
Collective bargaining is the machinery for discussion and negotiation,
whether formal or informal, between employers and workers representatives, aimed
at reaching mutual agreement or understanding on general employment relationship
between the employees and the workers. The conclusion of an agreement is not a
necessary determinant of collective bargaining. Thus, the labour act of 1974 defines
it as “the process of arriving at, or attempting to arrive at, a collective agreement.
The aims are to accommodate, reconcile, and oftentimes compromise the conflicting
interests of parties. Collective bargaining is therefore a cushion to this conflict of
33
interest and while it does not remove conflict, it facilitates its resolution, to enable
the two sides to work together harmoniously.
Collective bargaining is standard setting machinery, which constitutes an
important source of regulating governing wages, salaries and other employment
conditions mutually agreed between labour and management and in conformity with
public policy. In several work situations, collective bargaining has become, so to
speak, the guiding principle of labour relations. It is a method through which the
wage rates and other employment conditions are determined. It also
establishes a set of rules guiding relations between the parties during the life of
collective agreement, as well as providing for an orderly method of settling
grievances that are bound to occur from time to time. (Dunlop, 1949:29-34).
These three basic functions of the collective bargaining process are the
foundation of industrial democracy. Other methods of employment regulation, such
as paternalism, employer unilateral regulation or wage commission, can hardly be
conceived as laying the basis for industrial democracy. As Hodgson (1973:7)
stated, “Infact, when we look at my substitute for collective bargaining, we are apt
to come against insuperable problems. It may well be that we must conclude that we
must conclude that collective bargaining may be like democracy itself”. As
Damachi (1986:17) has argued, in the Nigerian case, collective bargaining is the
only viable form of worker participation in decision making in the foreseeable
future. It subsists, therefore, as a government-subscribe to, but only if all sides-
labour, management and government – subscribe to, and believe in democratic
34
principles in the workplace as an extension of political democracy in the larger
society.
According to Yesufu (1962:33-38), the earlier evidence of joint negotiation or
consultation in the country was in 1937 when the colonial government established
the provincial wage committees throughout the country. The function of these
committees was to undertake periodic wage reviews for
daily paid employees in the public service. Until 1942, the committee was
composed exclusively of government officials and wage determination was
therefore unilateral. However, perhaps because of growing agitation and
dissatisfaction among workers, the committees were expanded to include worker‟s
representative. This could be regarded as the beginning of collective bargaining in
Nigeria, although the provincial wage committee was advisory in nature. Moreover,
they were used as political instruments of the contending political parties of the
period.
However, following the general strike of 1945 and the growing
disenchantment of trade unions, it became clear that the provincial wage committees
were grossly inadequate in meeting the aspirations of workers. Specifically, the
committees were for use by daily paid workers who represented only a small portion
of the total workforce in the public service. In the case of established staff, there
was no specific machinery for biparthe wage determination. For these reasons, the
whitely council system, which had been in use in the United Kingdom, was
introduced in Nigeria in 1948. The recommendations for its introduction were
35
contained in two reports by Mr. T.M. Cowan, of the British ministry of labour and
National service. (Fashoyin, 2005:105).
Basically, there were the councils catering for senior, junior and industrial
(technical) employees respectively. Each council functioned as a negotiating as well
as dispute-setting machinery in the public service. Whitelyism was structurally
different from the traditional bargaining machinery in that it was an-all embracing
machinery covering federal, state and sometimes local government employees.
The whitey system failed in many government establishments after barely a
year of existence. There were several reasons for this. First, instead of serving as
bargaining machinery, they were used as consultative bodies. Second, there were
problems of representation on sides, indecision, red-tapism and lack of government
support. Third, they were rendered useless because decisions on wages and
conditions of employment were generally made by semi-political wage
commissions, particularly for public employees. In view of the failure of the whitely
system, the Udoji commission of 1974 undertook a restructure of the machinery and
recommended three National Public Service Negotiating Councils which were to
concern themselves with the matters relating to wages, arbitration and centralization
of the machinery for negotiation. (Public Service Review Commission: 1981 and
many others that came afterwards).
In the private sector, collective bargaining developed later. By 1947, for
example, the department of labour reported that efforts are being made to establish
in every trade and industry a reliable means of constant contact between employers
36
and the trade unions …. As progress is made in the amalgamation of unions into
trade and industrial groups, it is hoped the establishment of a Joint Negotiating
Machinery, on the lines of those adopted in more advanced countries, will be found
in Nigeria before long.
Over the years, collective bargaining has acquired greater significance in the
private sector in response to several internal and external forces. Internal forces
derive from the tendency of management to foist unilateral decisions on workers
and have increased the awareness among workers of the benefits of collective action
for improving their working conditions. External forces derive mainly from public
policy which enhances the organizational capabilities of both sides to engage in
bargaining. As a result of these, a phenomenal increase has been witnessed since the
late 1970s. (Fashoyin, 1982:26-27). Imoisili (1984:374) showed that between 1979
and 1981, the various industrial unions and employer‟s associations concluded no
fewer that 17 multi-employer collective agreements.
According to Pigors and Myers (1984:357), if the general level of wages and
salaries in the organization is too low in relation to other comparable firms,
management will find it difficult to attract qualified employees. This is especially
true of those in short supply, such as technical, professional and managerial
personnel.
Recruitment is not the only phase of personnel programmes in which wage
and salaries are important. A good promotion policy requires that earnings on each
job be related to the worth of the job, so that promotions will bring an increase in
37
pay as well as in status. Furthermore, establishment of these sound internal wage
and salary relationships is necessary to avoid the dissatisfactions that would other
wise develop over inequities between similar jobs. Finally method of wage payment
and particularly the manner in which a wage plan is handed also affect the ability of
management to get effective results with people on those types of jobs. These are all
interrelated parts of a personnel policy system. (Pigors and Mters. 1984:356-357).
Pigors and Myers also affirmed that the wages and salaries in some
organization, e.g the federal government, are established by law and the civil
service regulations. But other organizations, including profit making, as well as
non-profit organizations, may have more flexibility in deciding what level of wages
and salaries they can pay. The decision even for the federal government is affected
by (1) the quality of the employees the organization needs for effective operation,
(2) the competition of other organization for employees of
this quality, and (3) the ability of the organization to pay levels of wages and
salaries that will attract and hold the people it needs. This last point influenced by
the financial condition of the firm or organization, including budget limitations on
governmental and non-profit organizations. Government, through minimum wage
laws, places a lower limit on wage levels that can legally be paid.
Changes in the level of wages and salaries are influenced by some of the
same external forces, e.g. what other firms and organization are doing to meet
competition in the job market, or ability of the organization to pay for the changes
in order to maintain the same quality of recruits. Other factors are also important,
38
since employee satisfaction and dissatisfaction with existing levels are importantly
affected by wage and salary changes made by comparable organizations or in
comparable jobs and occupations and changes in the level in the economy are also
affected by the pressure of labour organizations through collective bargaining and
by the tightness or looseness of the labour market generally, and for particular
occupational groups. The spread of collective bargaining has accentuated these
external comparisons. And as we know, non-union firms look over their shoulders
to see what unions are getting through collective bargaining in comparable firms,
organizations, occupations and localities. (Shultz, 1951).
2.1.4 PRINCIPLES OF MOTIVATION AND PRODUCTIVITY
In an attempt to answer the question on motivation, Giliner & Deci (1977),
said that people do things in an attempt to satisfy their needs or to make themselves
feel better. They believe that feeling of competence, self determination and control
of oneself by way of doing a challenging work which requires resourcefulness and
creativity are inherent in man. In effect, the crave for achievement, power and self-
actualization gives man a sense of pride and so man always strives to be successful.
Motivation as a concept has a role to play in improving employee
performance through job satisfaction; in other words, motivation involves the art of
creation and maintenance of enabling environment for the performance of
individuals working together as a group towards accomplishing stated and common
objectives. This implies that human motives are based on needs which could be
39
primary (food, shelter & clothing) or secondary (self-esteem, status etc) it is for this
reason that managers are expected to know what motivates people (Obayi, 1998).
Koontz & Weirch (1980) noted that motivation is a general term applying to the
entire class of desires, needs and wishes. It was discovered that motivation
depends more on internal or psychological incentives than on fear or regards. In
other words, motivation is a process of creating organizational conditions that will
cause employee to strive for greater performance. Aligning his thought with the
foregoing, Carter (1992) opined that motivation is the practical art of applying
incentives and arousing for the purpose of causing an individual to perform in a
desired way.
To Ifechukwu (1977) in Obayi (1987). Motivation is the driving force that
stimulated an individual to action. (Hoy and Miskel. 1987) viewing motivation from
the same perspectives tagged it the complex forces, drives, needs, tension states or
other mechanisms that start and maintain voluntary activity directed toward the
achievement of personal goals. It is against this background that, motivation and
higher productivity was not necessarily achieved by position, financial incentives or
improved physical condition, but that management should among other things seek
the views of workers on matters that concern them and the organization. This
implies that the management‟s task should not only be to manipulate employee to
accept management‟s authority, but to set up condition that will enable the
employees to meet their own goals while meeting the organization goals. Simply
put, Elton‟‟s contention is that there should be fusion of goals and objectives;
40
management should diffuse the objectives/goals of the employees into that of the
organization and propel the employees towards attaining both in a common core. As
noted earlier, human needs stand out prominently in the field of workers motivation.
Another renowned writer on motivation, Fredrick Herzeberg found out from a
survey carried out on 200 accountants that employees tend to explain satisfying
experiences in term of factors that were intrinsic to the content of the job itself,
these factors, Herzeberg called motivators and these include achievement,
recognition, advancement, etc. in the same vein, Okpala (1990) in Asogwa (1994),
believe that the greatest and most efficient production occurs when management:
1) Gives the worker a definite task to perform in a definite time and in a definite
manner.
2) Selects the right worker for a particular task and trains him for that.
3) Motivate the workers to a higher level of performance by incentive methods of
payment.
The link between motivation and satisfaction indicates that motivation gives
job satisfaction and so leads to increased productivity. It is very glaring that
whenever there is higher productivity, workers efforts were recognized by the
management in terms of promotion and compensation. In other words, if a worker
sees productivity as a yardstick to the achievement of his goals, he must be a higher
producer and vice-versa.
There are basically two ways to motivate a person. One is through material
satisfaction, by providing tangible rewards. Another is through non-material
41
satisfaction by providing intangible rewards. A balanced mix of motivational tools
is significant to serve its purpose. That is to satisfy the ideal that motivation increase
productivity.
We have Extrinsic and Intrinsic motivation: Extrinsic motivation is
commonly practiced by most organization to boost performance. It involves the
provision of an attractive compensation and benefits package. This includes salary,
health, personal insurance, and bonuses. There are also performance credits given in
the form of a quarterly bonus, performance bonuses, gift checks, paid vacation, etc.
Intrinsic motivation is simple and practical. It is an advisable practice to bring
out the best in every employee. It can be through providing effective system for
promotion, training and development, and recognition. The act of praising
employees for a job well done is one way to do so. These are priceless tools to
motivate them because are more motivated if what they are doing interest them.
This is much more beneficial if the tasks delegated to the employee coincide with
his interests.
Work motivation refers to the forces within a person that effect his or her
direction, intensity, persistence of voluntary behaviour in the workplace. Companies
need to rethink their motivational practice because of an increasingly diverse
workforce, turbulent change in employment relationship and flatter organizational
structure that requires less reliance on direct supervision to control employee
behaviour.
42
Content motivation theories of motivation described the processes through
which needs are translated into behaviour. Reinforcement theory explains behaviour
changed by suggesting that behaviours with positive consequences tends not to be
repeated.
According to Maslow‟s needs hierarchy, the lowest needs are initially most
important, but higher needs become more important as the lower ones are satisfied.
Alder‟s ERG theory is a content motivation theory that groups human needs into a
hierarchy of three broad categories: existence, relatedness, and growth. Herzberg‟s
motivator-hygiene theory suggests that people are only motivated by characteristics
of the work itself. McClelland studied need for achievement, need for power,and
need for affilliation.these needs are learned rather than instinctive, and more than
one need may motivate a person at the same time.
Expectancy theory states that work effort is determined by the perception that
effort will result in a particular level of performance (E-P expectancy), the
perception that a specific behaviour or performance level will lead to specific
outcome (P-O expectancy), and the valence that the person feels for those outcomes.
The E-P expectancy increase by improving the employee‟s abilityand
confidence to perform the job. The P-O expectancy increase by measuring
performance accurately, distributing higher rewards to better performers,and
showing employees that rewards are performance based. Outcome valences increase
by finding out what employees want and using these resources as rewards.
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Equity theory explains how people develop perceptions of fairness in the
distribution and exchange of resources. The model includes four elements:
outcome/input ratio, comparison order, equity evaluation, and consequences of
inequity. The theory also explains what people are motivated to do when they feel
inequitably treated.
Motivation of employees becomes very essential when it is realized that
although people work in an organized enterprise or participate in all kinds of groups
in order to achieve some desired goals that they cannot attain as individuals, this
does not imply that they will necessary put in maximum efforts to ensure that these
goals are accomplished. Barnard (1938:84) rightly observes:
If all those who may be considered potential
contributors to an organization are arranged in
order of willingness to serve it, the scale gradually
descends from possible intense willingness through
neutral or zero willingness to intense willingness
or opposition or hatred. The preponderance of
persons in a modern society always lies on the
negative side with reference to any existing or
potential organization.
This startling observation points to the need for managers and administrators
to create and maintain an environment that will elicit maximum productivity from
employees.
44
It is worthy of note that effective motivation depends on organizational
climate. According to Koontz et al (1983:654), “What people are willing to strive
for is also dulled or sharpened by the organizational climate in which they operate.
At times, a climate may repress motives; at other it may arouse them”. This point
was clearly illustrated by the research of Litwin and Stringer (1968) who on the
basis of McClelland‟s (1961) need for achievement, need-for-affiliation, and need-
for-power as major types of motivation, found that the strength of these motives was
affected by organizational climate.
Equally important, is the recognition of the fact that motivation must be based
on situations. Again, Koontz et al (1983:657) maintain that “what a manager does to
induce individual efforts towards the accomplishment of enterprise objectives must
clearly take into accountthe differences between individuals, groups, times and
organization climate.”
Goal-setting is the process of motivating employees and clarifying their role
perceptions by establishing benchmarks against which growth needs are fulfilled.
Goals are more effectives when they are specific, results oriented, challenging,
accepted by the employee, and accompanied by meaningful feedback. Participative
goal setting is important in some situations. Goal setting is usually less effective
when tied to financial rewards and when applied to new or complex tasks.
In summary, managers especially human resources in every organization,
must respond to the motivation of individuals or employees, if they are to create an
environment in which employees will perform optimally.
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2.1.5 GAP IN KNOWLEDGE.
The literature reviewed is on the effects of wage incentives and fringe
benefits on the productivity of workers in organizations. We have observed the
relationships which exist between the various opinions of different authors on the
subject matter. The relationships emphasized the need for employers to strive to
provide adequate conditions of service to their employees in terms of providing both
their physiological and psychological needs. These will definitely motivate the
workers to put more efforts for the success of the organizations. The cumulative
opinions of the authors indicate that wage incentives and fringe benefits have
positive effects in boosting of morale of workers in organizations.
Despite the above efforts and attempts so far shown in the literature review on
the effects of wage incentives and fringe benefits on the productivity of workers in
organizations, none has in-depth study on the effects of wage incentives and fringe
benefits on the productivity of workers of Enugu State local government service
commission. This work will complement the contemporary works of some authors
who have undertaken similar studies on the principles and practice of motivation.
This study will make some meaningful impact when applied to job situations
in Enugu state local government service commission and many other similar
organization having similar problems. The research will equally serve as a blue
print through which wage incentives and other fringe benefits can be used as a
practical guide for those who wish to introduce productivity improvement
techniques through incentive systems in their organizations.
46
2.2 HYPOTHESES.
1. Irregular payment of wages/salaries in Enugu state local government service
commission hinders the productivity of workers of the commission.
2. Inadequate wages/salaries in Enugu state local government commission hinders
the productivity of workers of the commission.
3. The present level of fringe benefits in Enugu state local government service
commission affects the morale of workers negatively.
4. The absence of collective bargaining process in Enugu state local government
service commission tends to perpetuate meager and irregular payment of workers‟
salaries.
2.3 OPERATIONALIZATION OF KEY CONCEPTS
For the purpose of this research, some key concepts was operationalized for
better understanding of the work.
(i)LOCAL GOVERNMENT: Local government is a system of local
administration under communities that is organized to maintain law and order,
provide some limited range of social amentias, and encourage cooperation and
participation of inhabitants towards the improvement of their conditions of living. It
provides the community with the formal organizational framework which enables
them to conduct their affairs effectively for the general good.
(ii)PRODUCTIVITY: Productivity is the achievement of desire output coupled
with a utilization of resource (man, money, material and machine).
47
(iii)WAGES: Wages are the total earrings a worker receives for the performance of
services within a period of time. They are equal to the product of an hourly rate,
times the number of pieces plus houses, premiums and fringe benefits. Wages
means any economic compensation paid by the employer under some contract to his
workers for the services rendered by them.
(iv)SALARY: Salary refers to the weekly or monthly rates to clerical,
administrative and professional employees. Salary is mostly determined by mutual
agreement between the individual and the employer. They are sometimes
determined or fixed by the government.
(v)INCENTIVE: An incentive scheme is a plan or programs to motivate
individuals or group performance. An incentive programme is most frequently built
on monetary, but may also include a variety of non-monetary reward or prizes.
(vi)FRINGE BENEFITS: all financial and non-financial payments to employees
that are over and above the agreed upon basic salary rate due to the employee for the
minimum results expected on the job. A benefit is an additional compensation given
to employees as a reward for organizational membership. These are wide of variety
of items which organizations typically pay to their workers.
(vii)COLLECTIVE BARGAINING: It is a method through which the wage rates
and other employment conditions are determined. It also establishes a set of rules
guiding relations between the parties during the life of collective agreement, as well
as providing for an orderly method of settling grievances that are bound to occur
from time to time.
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(viii)MOTIVATION: It is a set of forces that lead people to act in particular ways.
Motivation represents the forces within a person that affect his or her direction,
intensity, and persistence of voluntary behaviour.
(ix)EMPLOYEES: By employees, we mean workers of Enugu state local
government service commission. These include both staff and line workers of the
commission.
(x)MEAGRE: This means deficient in amount or quality. It implies that in the
commission, workers wages/salaries are deficient in amount. It is not adequate
enough to meet up their immediate needs.
(xi)IREGULAR PAYMENTS: Salaries and allowances of workers are said to be
irregular when they not paid at the end of every month as stipulated by law. Salaries
that are consistently paid at the end of every month is regarded as regular, while it
is regarded as irregular when it is once in two, three or even four months.
(xii)INADEGUATE SALARIES/WAGES: Salaries/wage is said to be inadequate
when it fails to meet the basic necessities of life-food, shelter, clothing, etc and also
not in tune with the economic realities of the time.
(xiii)MORALE: This emotional or mental condition with respect to cheerfulness,
confidence, zeal etc. Emotional and mental conditions of employees needed be
boosted if high productivity is to be achieved. Employers are usually faced with the
challenges of boosting workers morale. Unhappy, disinterested employees can lead
to poor productivity.
49
(xiv)FINANCIAL INCENTIVES: These are incentives paid to workers as money
or physical cash. This is usually added to the basic salary at the end of the month as
a total emolument for the month.
(xv)NON-FINANCIAL INCENTIVES: These are usually given to workers in
kind or in materials like radio, television, motorcycles, cars, health facilities, free
education to their children and wards.
2.4 METHODOLOGY.
Methodology refers to the framework of activity or operations of
research. Research is obviously an activity centered endeavor. It requires not just
the mere writing of sound theoretical ad methodological insights but also the
practical efforts of designing instruments, collecting data, and analyzing the data so
collected. Seen purely in term of methods of study, it denotes the range of
approaches used in research to gather the appropriate data to be used for the purpose
of inference and interpretation on which to anchor explanations and predictions.
2.4.1 TYPE OF STUDY
This study is a survey research. According to Ali (1996:84) survey is a descriptive
study which seeks to document and describe what exists or the present status of
existence or absence of what is being investigated. Typical survey develops a profile
on what is and why is it so; they do not relate one variable to another.
50
2.4.2 DATA GATHERING INSTRUMENTS.
The study will use primary and secondary data. Primary data are field
data. All data collected for a specific purpose by the research from the field are
known as filed data. The most important methods of collecting primary data are
questionnaires; observation and interview. Terms are carefully defined and used, so
that as far as humanly possible, misunderstanding is avoided.
Secondary data were collected at University of Nigeria library, Public
Administration and Local Government (PALG) Department library, Enugu state
local government commission‟s publication and through other journals, periodicals,
textbooks, article, conference papers, newspapers, as well as published and
unpublished materials.
2.4.3 VALIDATION OF INSTRUMENTS
Validity is usually defined by such question as: does the test measure
what it is supposed to measure? (Osuala, 2005:162). According to Goode and Heart,
1952:73, a measuring instrument or scale possess validity when it actually measures
what it claims to measure. It is the degree to which a research instrument serves the
purpose for which it was constructed or indeed the extent to which the conclusion
drawn from an experiment is true. A well designed measuring instrument like
questionnaires is able to measure what it is designed to measure if it was properly
designed, but if faulty, it may measure something different from that which it was
designed to measure.
51
In order to be sure of the validity of our questionnaire, the researcher
used judgment validity. This was done by administering questionnaires to ten
senior officers of the personnel department. The researcher again interviewed
another six senior staff of accounts department, using the same questions and the
same results were obtained. The questionnaire was then properly designed to
measure actually what it is supposed to measure.
2.4.4 RELABILITY OF THE INSTRUMENTS
A reliable measure is one that is consistent, and because if gives a stable
measure of a variable, a reliable measure is precise. It also refers to the ability of a
result to be constant over time when applied to the same sample. In this study, the
test re-test technique was used by the researcher to establish the reliability of the
instrument to produce the same sample. The researcher established this by serving
his research instrument (questionnaires) to a sample within his population of study.
2.2.5 POPULATION OF THE STUDY
The population of the study area, Enugu state local government service
commission, is ninety-two (92) workers; comprising the political appointees, senior
and junior staff of the establishment.
2.4.6 SAMPLE OF THE STUDY
The will be no need for sampling. This is because the population is small;
therefore the researcher used the whole population for the study.
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2.4.7 METHOD OF DATA ANALYSIS
Research data on their own convey little or no meaning unless they are
analyzed and described. Analysis of data therefore means the treatment of data so
that they become summarized or reduced to a point they can be meaningfully
interpreted. The data generated from primary and secondary data
were complied and analyzed. Facts derived from the related literature were used in
testing the tenability of the research hypotheses.
The quantitative data produced from the survey was reduced to simple
statistical technique like frequency and percentages as analytical instrument. This
was adopted to make for the clarity and simplicity of the presentation.
2.5 THEORTICAL FRAMEWORK
Theories are essential tools for scientific inquiry, analysis, and reliable
understanding of how social and natural systems operate. Theories are also useful
set of theoretically related concepts for explaining the occurrence of any
phenomenon. So they are useful tools in research in that they facilitate the
understanding of the relations that exist between variables.
As stated in the in the background of the study, wage incentives and
fringe benefits are motivating factors and they share similar principles of
motivation. So the researcher used expectancy theory propounded by Victor Vroom
to analyze the work. Expectancy Theory suggests that people are motivated by two
things: (1) How much they want something and (2) How likely they think they are
53
to get it (Vroom, 1964). In other words assuming they have choices; people will
make the choice that promises them the greatest reward if they think they can get it.
The Three Elements of Motivation: Expectancy, Instrumentality and
Valence. What determines how willing you ( or an employee) are to work hard to
tasks important to the success of the organisation? The answwer, says Vroom, is:
you will do what you can do when you want to.
Your motivation, according the expectancy, involves relationship
between your effort, your performance and the desirability of the outcomes ( such
as pay or recognition) of your performance. These relationships, which are shown in
the accompanying drawing, are affected by the three elements of expectancy,
instrumentality, and valence.
Expectancy: The major elements.
Effort
I exert an
Effort…
Performance
… a particular
Level of task
Performance
…. In order to
Achieve …
Outcomes
… certain
Outcomes
(e.g. pay or
recognition)
… So that
I can
Realize…
Expectancy
“Will I be able to
perform at the
Desired level on a
task?”
Instrumentality
“What outcome
Will I receive if I
Perform at this
Level?”
Valence
“How Much do I
Want the
Outcome?”
54
1. Expectancy: “ Will I be able to perform up to the desired level on a task?
Expectancy is the belief that a particular level of effort will lead to a particular level
of performance. This is called the effort-to-performance expectancy.
2. Instrumentality: “What outcomes will I receive if I perform at this level.
Instrumentality is the expectation that successful performance of the task will lead
to the outcome desired. This is called the performance to reward expectancy.
3. Valence: “How much do I want the outcome?” Valence is value, the importance a
worker assigns to the possible outcome or reward.
Example: if you assign a lot of importance or a high value to a prospective bonus or
pay raise, then your valence is said to be high.
For your motivation to be high, you must be high in all three elements expectancy,
instrumentality, and valence. If any element is low, you will not be motivated. Your
effort-to-performance expectancy might be low, for instance, because you doubt
making an effort will make a difference or your valence might be low because you
don‟t think the bonus or raise given is high enough to justify working evenings and
weekends. (Onah) 2008:292).
Using expectancy theory to motivate employees: The principal problem with
expectancy theory is that it is complex. Even so, the underlying logic is
understandable. When attempting to motivate employees, managers should ask the
following questions:
55
1.What rewards do your employees value? As a manager, you need to get to know
your employees ad determine what rewards (outcomes) they value, such as pay
increase raises or recognition.
2.What are the job objectives and the performance level you desire?
You need to clearly define the performance objectives and determines what
performance level or behaviour you want so that you can tell your employees what
they need to do to attain the rewards.
3.Are the rewards linked to performance? You want to reward high performance, of
course. If high-performing employees aren‟t rewarded, they may leave or slow
down and affect the performance of other employees. Thus, employees must be
aware that X level of performance within Y period of time will result in Z kinds of
rewards.
4.Do employees believe you will deliver the right rewards for the right
performance? Your credibility is on line here. Your employees must believe that
you have the power, the ability, and the will to give them the rewards you promise
for the performance you are requesting.
According to Abbah (1997:56), the key to expectancy theory is therefore
understanding an individual goals, and the linkage between effort and
performance, between performance and reward, and finally between reward and
the individual goals satisfaction. Similarly, the expectancy theory
emphasizes payoffs or rewards. As a result we have to believe that the reward the
organization is offering with what the employees want.
56
In applying the theory in this work, we acknowledged the effects of wage
incentives and fringe benefits in boosting workers morale. This theory of reward
applies to workers of Enugu state local government service commission.
Expectancy theory states that work effort is determined by the perception that effort
will result in a particular behaviour or performance (E-P expectancy), the
perception that a particular behaviour or performance level will lead to specific
outcomes (P-O expectancy) and the valences that the person feels for those
outcomes. The E-P expectancy increases by improving the employees‟ ability and
confidence to perform the job. The P-O expectancy increases by measuring
performances accurately, distributing higher rewards to better performance, and
showing employees that rewards are performance based. Outcome valences
increase by finding out what employees want and using these resources as rewards.
If the management of Enugu state local government service commission is able to
match performance by increasing the wage incentives and other fringe benefits to
their workers, productivity will be on the increase. What constitute a need to
somebody is that which has not been satisfied and that‟s what motivates him to be
more productive. Satisfaction outcomes will determine their level of efforts, not the
objective outcomes themselves. From the interview conducted in the commission,
wage incentives and other fringe benefits are not adequate enough to match their
expected rewards and that‟s account for the low productivity among the workers of
the commission.
57
CHAPTER THREE
BACKGROUND INFORMATION ON THE AREA OF STUDY.
3.1 BACKGROUND INFORMATION ON ENUGU STATE LOCAL
GOVERNMENT SERVICE COMMISSION.
The genesis of local government service commission started with the
1976 local government reforms which were aimed at making the local
government in the country uniform, autonomous and the third tier of
government. According to Adeyemo (2005:79) local government autonomy is
perceived as local government or grassroots democracy. This grassroots
democracy is primarily aimed at giving the vast majority of the people the
fullest opportunity to participate in determining their own destiny. Local
government service commission replaced the state ministry of local
government which is empowered to supervise the operations of local
commission. Even before the British colonial rule in Nigeria, there was local
self government which took varying forms of local government
administration reflecting the culture, policies and environment of the people.
The British in 1954 did not alter drastically, the pre-colonial arrangement but
evolved a new idea of local government administration through the use of
representative institutions.
According to Ayoade (1992:12), the origin of modern Nigeria local
government is deeply embedded in the colonial period. The British
58
aadministration introduced the indirect rule system-governlng through
indigenous institutions and authorities. In places where there were no natural
rulers, the British invented one to fill the gap. For example in parts of eastern
provinces of Nigeria which had no tradition of natural rulers, the British
delegated authority to warrant chiefs who were agents of colonial
administration and therefore, were not regarded as anything by the colonial
people.
However, indirect rule system notwithstanding, the British colonial rule
did not impose much uniformity in local administration. Wraith (1972:30)
points out that … the doctrine of direct rule was itself a denial of uniformity,
since none existed in the indigenous authorities”. The dispatch in 1947 to
colonial governors by then secretary of state for the colonies, Mr.Creech
Jones, marked the real beginning of the system of modern local government
in Nigeria. According to the dispatch, the encouragement of local political
interest and the building up of a system of efficient and democratic local
government is a cardinal feature of British policy in Africa. Thus, in 1951 the
eastern region adopted legislation which whittled down the powers of the
traditional rulers by opting for elected local councils. The western region
followed suit in 1952, while Northern Nigerian continued in a different part.
For the first time, Nigerians had the opportunity to have a say in the running
of their own local affairs. Also, the inception of democratic local government
59
system in Nigeria whittled the powers of the traditional rulers while elevating
the technocrats.
However, despite the emergency of democratic or representative
government in Nigeria since the 1947 dispatch, local government did not
enjoy substantial autonomy; it was effectively subordinated to the central
government. This was the situation when military took over the reigns of
power in January, 1966, and shortly, after the civil war which lasted from
1967-1970.
Both the military intervention in Nigerian politics and the civil war are
two factors that influenced the pattern and system of local government in Nigeria.
For instance during the civil war, local government lost whatever measure of
autonomy that they had enjoyed. They were tied closely to the central
administration to ensure a proper and speedy prosecution of war. Administrators
were appointed to local governments from the central government to manager their
affairs (Onah, 1995:47). Shortly after the civil war, many changes occurred in the
local government system in Nigeria. Many factors accounted for these changes.
First was the division of Nigeria into twelve states with the resultant creation of
new governments in each new state. The second factor is that the civil war had
created an immense socio-political dislocation which necessitated a post-war
reconstruction. As a result, local governments were also reformed in order to equip
them for the reconstruction of the economy and the society.
60
In recent times, the federal government changed its posture and
championed the course of local government autonomy. In the forward of the 1976
local government reforms, it was remarked that the state governments have
continued to encroach on what could have been the exclusive preserve of the local
government. With this reform, the federal government granted the local government
the power of grassroots governance, thus local government became the third tier of
government in the country. Undoubtedly, there has been improvement in the degree
of autonomy granted the local government since 1976, with more functions giving
to it. To strengthen the philosophy of the government, it went further to guarantee
the statutory nature of local government by embodying it in the 1999 constitution.
Section 7 (1) of the said constitution stated “the system of democratically elected
local government councils is under this constitution guaranteed”. The civilian
administration between 1979 and 83 seriously bastardize the so called autonomy.
It should be noted that successive military regimes have tried to give
local government its rightful position through the revitalization and restructuring
of local government system sought to review some of the problems hampering the
pperformance of the local governments. A 20-man committee headed by Ibrahim
Dasuki was appointed. The committee in its report (1986:16) recognised
that the problems of the local governments were more operational than structural.
The federal governments in line with the committee‟s recommendations approved
a multi-purpose single tier structure of local government system. The „board‟ was
redesigned as „commission‟ and made an autonomous body not subservient to the
61
department of local government as recommended by the report. The aborted 1989
constitution, section 195(d) further guarranteed the existence of the local
government service commission by providing for, its composition and powers.
The composition is still being in use. It stated that the commission should:
a. Comprise of mature and experienced people with proven integrity, with a
chairman and not more than four members who shall in the opinion of the
Governor, be a person of no unquestionable integrity and sound political
judgment.
b. Members of the commission shall remain in office for a period of five years
effective from the date of appointment provided he remains of good health
and conduct.
c. In exercising its powers to make appointments or to exercise disciplinary
control over persons, the commission shall not be subject to any direction or
control of any other authority.
Certain other measures of autonomy started coming the way of local
governments. The Babangida administration since 1985 made conscious efforts
to strengthen local system by enhancing its autonomy. In January, 1988 was the
scrapping of state ministries of local government throughout the country. This
was to remove the political control and bureaucratic redtapism created by the
ministries in the developmental performance of local government councils.
Apart from the above steps, there was the local government election in
December, 1987. It was an attempt to restore democracy to the grassroots since
62
the last election to the local councils in 1978, whose life expired in December
1979. Other efforts geared towards local government autonomy were the
approved scheme of service for local government employees, following the
recommendation of Oyedipo committee report of March, 1988.
To enhance financial autonomy and regular sources of revenue, there
was the direct disbursement of funds to local governments, preventing the hijacking
the funds of the local governments, substantial amount of money was
made annually as grants to training institutions such as Obafemi Awolowo
University, lle-lfe, Ahmadu Bello University Zaria and the University of Nigeria
Nsukka for the purpose of training middle and upper level manpower for local
governments. Series of seminars and workshops were organized by the federal
government and the institutions to improve the performance of local government
officials.
In view of the importance of local governments, as the bedrock of
democracy, there was a creation of 148 local governments in 1989 and 140 in
1991 and now totaling 774. These efforts were to bring the government much
nearer to the grassroots.
The application of 1988 civil service reforms in the local government
service was another measure of enhancing the status of the local government as
the third tier of government. The measure was to professionalize the service of
local government and to strengthen accountability through the use of audit alarm
system and the creation of the Auditor General for the local government.
63
3.2 ORGANOGRAM/STRUCTURE OF THE COMMISSION
64
The commission is being administered by five members who are usually
on appointment positions. The five members are the Chairman, Commissioner I,
commissioner II, Commissioner III, and Commissioner IV. There is however, a
permanent secretary who is working directly under the chairman just like other
commissioners, and is a career civil servant. The information officer and the
Internal Auditor take instructions directly from the chairman. The chairman and
the permanent secretary oversee and supervise the activities and operations of the
local governments at Enugu-West senatorial district, commissioner I and II
oversee and supervise the activities of local governments at Enugu-East
senatorial district and commissioners III and IV oversee and supervise the
activities of local government at Enugu-North senatorial district.
The commission has five departments, each being headed by a Deputy
Director. The departments are Manpower Development and Training, Planning
Research and Statistics, Finance and Supply and Personal Management department.
The staff strengthen is ninety-six, employed directly by the commission and some
drawn from various local governments in the state. It is pertinent to point out that
the commission has the powers to transfer any staff from the local governments to
the commission and vice-versa.
3.3 FUNCTIONS OF THE COMMISSION.
1. Appointment, postings, promotions and discipline of the local government unified
Staff on GL 07 and above.
65
2. The commission is to set up uniform guidelines for appointments, postings,
promotions and discipline of the staff on officers from Gl 01-06,
the commission delegates its powers to the local government councils as they relate
to appointments, postings, promotions and discipline.
However, the local government councils are requested to seek approval
from the commission.
3. To monitor the activities of every local government area on appointments,
promotions, and discipline of the employee of the local government areas to ensure
strict adherence to uniformed guideline.
4. The commission serves as the appellate body for every petition emanating from
the local government in respect of appointments, promotions and discipline. This is
to say that the commission‟s decision on the above stands on each employee though
whoever feels dissatisfied can appeal to the executive governor of the Enugu State.
5. To compile and maintain a comprehensive and up-to-date seniority lists and
nominal rolls for the local government service commission employees.
6. Production and submission of Annual Report to all relevant bodies i.e. office of
the Governor, Chairman of the Local Government Council and the Enugu State
House of Assembly.
7. Maintaining a monthly gazette and newsletter for local government that conveys
staff movements, new appointments, and confirmation of appointments, promotion
and retirement/dismissal.
66
8.Overseeing the activities of the pension board through the chairman who is the
chairman of the pension board.
9.The transfer of service of the unified local government service commission to or
from other service commissions is a responsibility of the commission
10.To keep the 1% training fund from the local government for the training of the
employees of the unified system.
3.4 FUNDING:-
Two major sources of fund are available to the commission
These include:
(a) 1% training fund deducted from the statutory allocation of local governments.
(b) Monthly overhead cost allocation made to the commission by the State
Government.
The training fund is usually applied to the training programmes organized by the
commission. These include Seminars/Workshops and In-Service Training
Programmes in various institutions of higher learning.
The monthly overhead cost allocation made by the State Government is used for the
routine operation of the commission. The State Government in addition
to the monthly overhead cost allocation made to the commission pays salaries of
staff of the commission.
3.5 FRINGE BENEFITS IN THE COMMISSION
1. Meal Subsidy is paid to all categories of staff.
2. Transport allowance is paid to all categories of staff.
67
3. Rent subsidy is paid to all categories of staff.
4. Leave allowance is determined by 10% of annual basic salary and paid to all
categories of staff.
5. Transfer allowances are paid to all categories of staff newly on transfer.
6. Training allowances are paid to all categories of staff that are opportune to be
selected for workshops, conferences and other training programmmes.
7. Pension and Gratuity are paid to retired staff of the commission.
8. In-service training; on application, successful ones are granted study leave with
pay to study in the Universities and other Institutions of higher learning. They are
equally paid study allowances.
9. Official cars; assigned mostly officers on political appointment like the Chairman
and members (commissioners) of the commission. The permanent secretary is also
assigned a vehicle.
10. Motorcycle loan; interested staff usually apply for such loan. 10 percent are
deducted from their monthly salary for the repayment of the loan.
Other fringe benefit such as car loan, Housing loan, Health Insurance
Scheme, Furniture allowance etc are not available in the commission.
3.6 SALARY/WAGE STRUCTURE
68
3.7 ACHIEVEMENTS OF THE COMMISSION.
In its effort towards boosting staff morale and promoting productivity so as to
achieve the set objectives for which it was instituted, the commission between 1999
and 2007 undertook some schedule visits to all the Local Government Councils in
the State. It had in the process made on the spot assessment regarding the
performance of the Local Government career officers at their various areas of
rural/primary assignments.
The Commission accordingly used its decision taking organ which was
the regular meeting of the commission held every Wednesday to solve staff matters
aimed at enhancing efficiency, discipline and dedication to duty.
The Commission in order to ensure that staff matters are handled
justifiably evolved a strategy of holding meetings with the local government key
functionaries every second Tuesday of a month. This regular meeting referred to as
the monthly statutory meeting of the commission. The Heads of Personnel
Management and Treasurers attended meetings at the Commission every month.
a.Promotion and Advances: During the year under review, the Commission was
very much concerned that all deserving staff got their promotion or advancements
but it was Lady Agbo that released the promotion on 19th March, 2002. in all, eight
hundred and eleven (811) were promoted to the next ranks, while two hundred
and forty-two (242) were converted and advanced. Those converted were those who
applied and followed the underlying guidelines and met the requirements.
69
Promotion and advancements took place every two, three and four years
respectively depending on their grade levels and additional qualifications.
a. Transfer of Service/Confirmation of Appointment:
A number of requests were received for their transfer of services/secondments to
or from the commission to other establishments. After due considerations, twelve
(12) states transfer were approved on their merit. Again no transfer of service
was effected but sixteen (16) staff was seconded out.
b. Discipline Cases
There were a few cases of discipline which were treated and disposed of
resulting in the suspension and dismissal of officers from within the unified
services on various grounds during the period under review. However, two cases
later reviewed saw the recall of two officers in Nkanu West and Nkanu East
respectively. A number of suspended officers were later recalled.
c. Payment of Gratuities/Pensions/Retirement:
The issues of gratuities, pension and retirement are handled by the Local
Government Staff Pension Board, in complement with the Local Government
Service Commission.
The present Enugu State Local Government Staff Pension Board has its roots in the
former Anambra State Local Government Staff Pension Board established under
the Anambra State of Nigeria Law No. 18 of 1982 titled “Found for Local
Government Pension Scheme Law (Amendment) Edict 1988”.
70
All approvals for payment as they affect retirement and death benefits as
well as expenditure vital for the administration of the pension scheme was made by
the pensions board. The Board sat regularly and the Law provided a minimum of
four sittings. Though the computations and apportionments of benefits are worked
out by the Pension Board, only the Local Government shares were paid. The
Federal and State Government shares were paid by the State‟s Accountant General
Office (State Treasury). Files of retires certified by the Auditor General for Local
Government were for those with Local Government appointment only. Any file
with State or Federal appointment was sent to establishment and the State Auditor
General before it was returned to the Pension Board for the payment of the Local
Government shares. Local Government Pensioners receive their monthly pentions
at the local of their choices. Certified disabled pensioners who so apply were paid
the balance of their entitlement as permitted by section of the pension decree 109 of
1979.
e. Development and training
In other to achieve our set objectives and enhance manpower development, the
commission had to pursue with vigour its training programmes for year 2000 to
2007. The commission approved the following courses for members of staff in the
following areas:
a. Ordinary Diploma in Local Government Administration/Account (1st and 2
nd
year)
b. Junior Community Health Extension Workers
71
c. Senior health Officers
d. Environmental Health Officers
e. Community health Officers
Despite the numerous achievements recorded during the year under review, it is
pertinent to note that the commission successfully hosted the conference of all
Local Governments in the Federation at Nike Lake Resort Hotels, Enugu.
3.8 MAJOR SETBACKS OF THE COMMISION:
The major problem that faced the commission was that of transportation.
The workers did not have utility vehicles for assignment which came in the form of
supervision, promotion interviews and recruitment exercise in the various Local
Government Headquarters. Again, Facilities for internal communications were
lacked and as members of staff were always moving up and down to drop or pick
information. The Public Relations Unit did not have a vehicle. This is unusual.
Finally the monthly subvention given as overhead did not meet their numerous
statutory responsibilities. This needed to be reviewed upward.
3.9 TENURESHIP/MEMBERS OF THE COMMISION.
The tenureship of the members of the commission is four years. The commission
was reconstituted by the Governor of the state, Dr Chimaroke Nnamani on 26th
January, 2000 and had a chairman and four members which included Chief Hon.
Nwobodo Ogbu (late) as chairman, Chief James Ugwu, Commissioner I, Barrister
Mrs. Anthonia Ugbene, Commissioner II, Comrade Okezie Nwanjoku,
Commissioner III, and Barrister Fabian Ogbuabo as Commissioner IV, Mr.
72
Uwaezuoke Nwaebem who was also appointed in 1999 by his Excellency,
Chimaroke Nnamani, was the secretary of the commission. At the death of the
chairman, the commission was dissolved and reconstituted in April, 2001 by the
Governor, Dr. Chimaroke Nnamani. The new chairman was Ezeudo Abel
Nwobodo, Chief James Ugwu, Commissioner I, comrade Okezie Nwanjoku,
Commissioner II, Barrister Mrs. Anthonia Ugbene, commissioner III, and Barrister
G.C. Agbo as commissioner IV. Mr. Uwaezuoke Mwaebiem was the secretary. It
may be necessary to state that with the departure of Ezeudo Abel Nwobodo to
another commission, lady Beatrice Agbo was appointed the new chairman on 6th
December, 2001 and other serving members were sworn in with her.
During the second term of the Governor, the commission was reconstituted in
2003 with Lady Beatrice U Agbo still the chairman, Hon. Mrs C. Chukwuanyim as
commissioner I, Hon. Mr. Eugene Odo as commissioner II, Hon. Mrs. Anthonia
Ughene as commissioner III, Hon. Chief G.C. Agbo as commissioner IV. Mr Anaya
Godwin was appointed the permanent secretary of the commission. Before the end
of their tenure, Mrs Iloelunachi replaced Mr. Anaya as the permanent secretary. The
tenure of these members expired in 2007 with the expiration of the second tenure of
the Governor, His Excellency, Dr. Chimaroke Nnamani.
73
CHAPTER 4: DATA PRESENTATION. ANALYSIS AND FINDINGS;
4.1 DATA PRESENTATION:
This chapter presents the analysis and tests of the hypotheses, followed by the
questions used to verify them. The responses were evaluated to validate or reject the
hypotheses. The background information or the personal profiles of the respondents
like his department, age, educational qualification, number of years in service and
salary grade level were used to kick start the analysis. This information is relevant
as the perception of the work environment is always influenced by these factors.
However, ninety (90) questionnaires were distributed to the staff of Enugu
State Local Government Service Commission. From the above number, eighty five
questions were retuned thus giving responses of 94.4% for the study. For the
purpose of this analysis the researcher converted the 85 questionnaires to 100%. So
the 85 questionnaires will be regarded as 100% in all the data presentation. The
respondent‟s profile is shown in the tables below.
TABLE 4.1.1 DAPARTMENT OF THE RESPONENTS.
Departments Number (F) Percentage(%)
Manpower Department
and training
Planning research and
statistic
Finance and Supply
Personnel management
Total
18
14
22
31
85
21.2
16.5
25.9
36.5
100
74
Source: Researcher’s Field Work/ Survey Report, 2011.
The above table shows that 18 respondents which represent 21.2% were attached to
manpower development and training department, 14 respondents that represents
16.5% are of planning, research and statistics, 22 respondents which represent
25.9% are from finance and supply department and 31 respondents which represent
36.5% are from personnel management department.
TABLE 4.1.2 AGES OF RESPONDENTS
Age group Number(F) Percentage (%)
21-30 years
31-40 years
41-50 years
51-50 years
61 years and above
Total
14
29
23
15
4
85
16.5
34.1
27.1
17.6
4.7
100
Source: Researcher’s Field Work Survey Report, 2011.
The above indicates that 14 respondent (16.5%) are between the ages of 21-30
years, 29 respondents (34.1%) are between the ages of 31-40 years, 23 respondent
(27.1%) are between the ages of 41-50 years. 15 respondents (17.6%) are between
the ages of 51-60 years 4 respondents (4.7%) are 61 years and above.
75
TABLE 4.1.3 MARITAL STATUS
Marital status Number (F) Percentage%
Married
Not Married
Total
72
13
85
84.7
15.3
100
Source: Researcher’s Field Work/Survey, 2011.
The table above shows that out of 85 respondents representing 100%, 72
respondents representing 84.7% are married. While 13 respondents representing
15.3% are not yet married. From the interview conducted, it was discovered that
most of the married workers have an average of three (3) to five (5) children and
other dependent relations to take care of. The implication of this is that the workers
need enhanced and regular salaries/ wages to meet up with their family needs.
TABLE 4.1.4 EDUCATIONL QUALIFICATIONS
Educational
qualifications
Number (F) Percentage%
FSLC
WASC/GCE
OND/NCE
HND/B.SC
MPA/MSC and Above
Total
6
38
23
13
5
85
7.1
44.8
27.1
15.3
5.9
100
Source: Researcher’s Field Work/Survey Report, 2011.
76
The above shows that out of 85 respondent which represents 100%, 6 respondents
(7.1%) obtained first school leaving certificate, 38 respondent (44.8%) obtained
West African School Certificate or General Certificate on Education, 23
respondents (27.1%) obtained Ordinary national Diploma or Nigeria Certificate on
Education, 13 respondents (15.3%) obtained Higher National Diploma or Bachelor
of Science Degree and 5 respondents (5.9%) obtained Masters in Public
Administration or Master of Science Degree.
TABLE 4.1.5 NUMBERS OF YEARS IN SERVICE
No of years Number (F) Percentage (%)
0-10 years
11-20
21-30
31 years and above
Total
8
41
32
4
85
9.4
48.2
37.7
4.7
100
Source: Researcher’s Field Work/Survey Report, 2011.
From the table above, 8 respondents which represent 9.4% have worked in the
commission for 0-10 years, 32 respondents which represent 37.7% have served the
commission for 21-30 years, and 4 respondents which represent 4.7% have served
commission for 30 years and above.
77
TABLE 4.1.6 SALARY LEVEL
Salary grade level Number (F) Percentage(%)
01-06
07-10
12-14
15-17
Total
24
38
17
6
85
28.2
44.7
20.0
7.0
100
Source: Researcher’s Field Work/ Survey, 2011.
Out of 85 respondent (100%) 24 (28.2%) are in grade level 01-6, 38 respondents
(44.7%) are in grade level 07-10, 17 respondents (20%) are in grade level 12-14 and
6 respondents (7.1%) are in grade level 15-17.
4.2 DATA ANALYSIS
The researcher attempts to find out the effects of wage incentives and fringe benefits
on the productivity of Nigerian workers: a study of Enugu State Local Government
Service Commission. Frequencies and percentages were employed using licket five
point scale viz:-strongly agree, agree, strongly disagree and undecided.
4.2.1 TEST OF HYPOTHESIS 1
“Irregular payment of wages/salaries in Enugu Stat local government service
commission hinders productivity of workers of the commission” Questions 1-3 were
used in testing hypotheses.
78
QUESTION 1
Salaries/wages of Enugu State local government service commission between 1999
and 2007 were regular.
Table 4.2.1. Shows the frequency distribution of respondents from the above
statement.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly Disagreed
Disagreed
Undecided
Total
4
6
45
30
-
85
4.7
7.1
53.0
35.3
-
100
Source: Researcher’s Field Work/Survey Report, 2011.
From the above table, 4 respondents which represent 4.7% strongly agreed that
salaries/wages paid to workers of Enugu State local government service commission
were regular, 6 respondents representing 7.1% agreed that salaries/wages of the
commission were regular. 45 respondents representing 52% strongly disagreed that
the salaries wages of the workers of Enugu State local government service
commission were regular. 30 respondents representing 35.3% disagreed that their
salaries/wages were regular. None was undecided.
The responses from the respondents indicate that 88% of the staff disagreed
that salaries/wages of the workers were regular.
79
The researcher‟s observation agreed with the result of the majority of the
respondents who disagreed that their salaries/wages were regular. Within the period
under review, workers salaries/wages were not regular at work and they look for
other alternatives to survive.
In this case they lack the commitment, the zeal and their morale is low. This
is because they are not sure that they will get reward for their work at the end of the
month.
This confirms what Alugbuo (1981:13) asserted, that people work to get
reward for their efforts. The exchange of labour for financial reward is the heart of
pay process. People do not put forward their best, unless they get reward for their
work.
Therefore the management of Enugu State local government service
commission should ensure that their workers are paid regularly to improve the
productivity of workers.
80
QUESTIONS 2
More than 12 months arrears of salaries/wages were being owned to workers
between 1999-2007.
Table 4.2.2 below shows the frequency distribution from the above statement.
Category of response Frequency Percentage (%)
Strongly Agreed
Agreed
Strongly Disagreed
Disagreed
Undecided
Total
57
20
2
3
3
85
67.1
23.6
2.4
3.6
3.6
100
Source: Researcher’s Field Work/Survey Report, 2011.
The table above indicates that 57 respondents representing 67.1% strongly
agreed that the workers were being owed more than 12 months arrears of
salaries/wages. 20 respondents representing 23.6% agreed that the workers were
being owned more than 12 months arrears. 2 respondents representing 2.4%
strongly disagreed, while 3 respondents representing 3.6% disagreed that he
workers were being owned more that 12 months arrears of salaries/wages. 3
respondents were undecided on the matter. This table confirms that workers were
being owed more than 12 months arrears of salaries and other allowances. From the
interview conducted, the workers were categorical that they were being owed more
than14 months arrears of salaries and allowances between 1999 and 2007.
81
QUESTION 3
Workers were prompt and committed to their duties.
Table 4.2.3 shows the frequency distribution from the above statement.
Category of response Frequency Percentage%
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
7
5
38
29
6
85
8.2
5.9
44.8
34.1
7.1
100
Source: Researcher’s Field Work/Survey 2011.
The above table revealed that 7 respondents representing 8.2% strongly
agreed that workers were prompt and committed to their duties. 5 respondents
representing 5.9% agreed that the workers of the commission were prompt and
committed to their duties. 38 respondents representing 44.8% strongly disagreed
that the worker of the commission were prompt and committed to their duties. 29
respondents representing 34.1% disagreed that the workers were prompt and
committed to their duties. However 6 respondents representing 7.1% were
undecided on the issue. The interview conducted on the management staff confirms
the result of the table. They affirmed that they didn‟t have any morale justification
to punish anybody who was not regular and prompt because they are not sure they
82
were going to be paid at the end of the month. So the issue of commitment to their
duties did not arise because they looked for other ways to make ends meet.
4.2.4 TESTING OF HYPOTHESIS 11
“Inadequate payment of wags/salaries in Enugu State local government
service commission hinders the productivity of workers of the commission”
QUESTION 4-7 were used in testing hypothesis 11.
The salary structure of Enugu State local government service commission is
attractive.
Table 4.2.4 shows the frequency distribution of responses from the above
statement.
Category of response Frequency Percentage%
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
8
7
42
23
5
85
9.4
8.2
49.4
27.1
5.9
100
Source: Researcher’s Field Work/Survey 2011.
From the table above, it was discovered that 8 respondents representing 9.4%
strongly agreed that the worker‟s salary structure is attractive. 7 respondents
representing 8.2% agreed that the salary is attractive. 42 respondents representing
49.4% strongly disagreed that the salary structure of Enugu State local government
83
service commission is attractive, while 23 respondents representing27.1S disagreed
that the salary structure is attractive. 5 respondent representing 5.9% were
undecided on the issue.
Majority of the workers confirmed that the salary of the workers is not
attractive. During the interview on the issue they compared their salary to that of
other organizations like the federal civil service, salaries and allowances in other
states and other private enterprises. This confirms what (Adams,1965) said, that
Equity theory focuses on employee perception of how fairly they think they are
being treated compared to others. Most of them affirmed that they are here because
they don‟t have opportunity of getting better jobs.
Question 5
The salaries/wages being paid were adequate.
Table 4.2.5 below shows the frequency distribution of responses from the above
statement.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
7
10
48
25
2
85
8.2
11.8
56.5
29.4
2.4
100
Source: Researcher’s Field Work/Survey 2011.
84
The above table indicates that 7 respondents representing 8.2% strongly
agreed that the salaries/wages being paid to workers between 1999 and 2007 were
adequate. 10 respondents representing 11.8% agreed that workers salaries/wages
were adequate. 48 respondents representing 56.5% strongly disagreed with the
above statement that the salaries/wages of Enugu State local government service
commission were adequate. 25 respondent representing 29.4% also disagreed that
their salaries/wages were adequate. 2 respondent representing 2.4% were undecided.
The table clearly shows that their salaries/wages are inadequate. This was
confirmed from the salary chart given to me by the accounts department. Their
salaries were being computed based on a basic salary of N5, 175.
QUESTION 6
The salaries/wages of Enugu State local government service commission
reflected the economic realties of the time.
Table 4.2.6 below shows the frequency distribution of response from the above
statement
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
5
7
32
30
11
85
6
8.2
37.5
35.2
13
100
Source: Researcher’s Field Work/Survey 2011.
85
From the table, 5 respondents representing 6% strongly agreed that workers
salaries/wages reflected the economic realties of the time, 7 respondents
representing 8.2% agreed workers salaries/wages reflected the economic realities of
the time. 32 respondents representing 37.5% strongly disagreed that salaries/wages
of Enugu State local government service commission reflected the economic
realities of the time.30 respondents representing 35.2% also disagreed that their
salaries/wages reflected the economic realities of the time. 11 respondents
representing 13% were undecided.
The above confirms the opinion of Kiebel, (1983:50) that low productivity
seen in the country is as a result of poor wage administration. Workers are paid
without considering their needs which included feeding. housing, clothing and other
higher needs.
86
QUESTION 7
The salary structure of the commission is the same with that of other
Government establishment of the state.
Table 4.2.7 show the frequencies distribution of the respondents from the
above question.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
31
20
9
10
15
85
36.5
23.5
10.6
11.8
17.7
100
Source: Researchers Field Work/Survey, 2011.
The table above shows that 31 respondents representing 36.5% strongly
agreed that their salary structure is the same with that of other Government
establishment of Enugu State. 20 respondents representing 23.5% also disagreed
that their salary structure is the same with other Government establishment of
Enugu State. 9 respondent representing 10.62 strongly disagreed that their salary
structure is the same with that of other Government establishment. 10 respondents
representing 11.8% also disagreed while 15 respondents representing 17.7% were
undecided on the matter.
87
More of the respondents attested to the fact that their salary structure was the
same with other state government establishments. This was confirmed when the
researcher visited five ministries in Enugu State when the salary chart were
compared, they were exactly the same with that the local government service
commission.
4.2.8 TESTING OF HYPOTHESIS 111
The present level of fringe benefit in Enugu State local government service
commission affects the morale of the workers.
Question 8-14 were used in testing hypothesis 111
QUESTION 8
Insurance health welfare scheme, furniture allowance, housing loan, car loan etc
were given as fringe benefit to the workers.
Table 4.2.8 below shows the frequency distribution of response from the above
statement.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
5
3
42
21
7
85
5.9
3.5
49.4
24.7
8.2
100
Source: Researcher’s Field Works/Survey 2011.
88
The table above reveals that 5 respondent representing 5.9% strongly agreed
that the above fringe benefit were given to workers of the commission. 3
respondents representing 3.5% also agreed that the above fringe benefit were given
to workers of the commission. 42 respondents representing 49.4% strongly
disagreed that the above mentioned fringe benefits were given to the workers of the
commission. 21 respondents representing 24.7% also disagreed that the above listed
fringe benefits were given to workers of the commission while 7 respondents
representing 8.2% were undecided on the benefit given to the workers.
When the researcher interviewed the Director of Personnel Management, he
stated clearly that such fringe benefits never exited in the commission to the best of
his knowledge. During the period under review, what every worker was hoping and
praying for was how to get the monthly salaries which usually come once in three
months. Some times it is paid in the bank and withdrawn after a few days. So if you
rush to the bank for your salary, they will inform you that there is no money in your
account that the state chief Executive (Governor) has directed that the money be
returned to the treasury.
Question 9
Annually, some percentage of workers were granted motorcycle loan, in-service
training in academic institutions with pay.
89
Table 4.2.9. Shows frequency distribution of respondents from the above
statement.
Category of response Frequency Percentage(%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
29
33
10
13
-
85
34.1
39
11.8
15.3
-
100
Source: Researcher’s Field Works/Survey 2011.
From the table above, the results shows that 29 respondent representing 34.1%
strongly agreed that some percentage of workers were granted motorcycle loan, in-
service training in academic institutions with pay. 33 respondents representing 39%
agreed the above fringe benefit were granted to workers of the commission. 10
respondents representing 11.8% strongly disagreed. 13 respondents representing
15.3% disagreed that motorcycle loan and in-service training were granted to the
workers, while no respondent was undecided.
Majority of the respondents agreed that motorcycle loans and in-service
training were granted to some percentage of workers of the commission. But from
the interview conducted, it was discovered that it was not regular and that about
10% of the workers got the loan throughout the seventeen local government areas of
90
the state. Those that got the loan later regretted it because of the deductions made
from their meagre salaries every month. Most of the workers used it for Okada
business to enable them cope with their family responsibilities. Those on in-service
training could not get the usual stipends given to them as stipulated by law of the
local government system and even the number granted such in-service training
reduced drastically.
Question 10
The fringe benefits given to workers were satisfactory.
Table 4.2.10 below shows the frequency distribution of responses from the
workers.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
9
11
27
38
-
85
11
13
32
45
-
100
Source: Researcher’s Field Works/Survey 2011.
The above table indicates that 9 respondents representing 11% strongly agreed that
the fringe benefit given to workers of the commission were satisfactory. 11
respondents representing 13% agreed that the fringe benefit to workers were
satisfactory. 27 respondents representing 32% strongly disagreed that the fringe
91
benefit were satisfactory. 38 respondents representing 45% disagreed that the fringe
benefit given were satisfactory while no respondent was undecided.
The interview conducted revealed that the fringe benefit given to workers
were not satisfactory. According to them, no fringe benefits existed except meal
subsidy and other allowances that were paid with the basic salaries.
Question 11.
Granting addition fringe benefits to the workers will boost their morale and lead to
improved productivity.
Table 4.2.11 below shows the frequency distribution of the response of the
workers.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
24
47
5
7
2
85
28.2
55.2
5.9
8.2
2.4
100
Source: Researcher’s Field Works/Survey 2011.
The table above reveals that 24 respondents representing 25.2% strongly agreed that
granting additional fringe benefits will boost the morale of workers and lead to
improved productivity. 47 respondents representing 55.2% strongly agreed that
granting fringe benefits to workers will boost their morale and lead to improved
92
productivity. 5 respondents representing 5.9% strongly disagreed while 7
respondent representing 8.2% disagreed. 2 respondent representing 2.4% were
undecided on the statement.
Majority of the respondents opined that if adequate fringe benefits are given
to workers their morale will be boosted. This confirms what we stated in the
literature of this work that fringe benefits have been accepted to have an important
place in boosting workers effectiveness and therefore are of value to the employee.
Fringe benefits stem from the theory of motivation, and according to Duncan
(1978:74) it is concerned when behaviour is activated, maintained, directed and
stopped. From the managerial point of view, motivation relates to any conscious
attempt on the part of a person or group to influence the direction and the rate of
behaviour towards the accomplishment of organizational goals.
Question 12 Promotion/conversion makes you put more effort on you duties.
Table 4.2.12 below shows the frequency distribution of response
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
43
37
2
3
-
85
51
44
2.4
4
-
100
Source: Researcher’s Field Works/Survey 2011.
93
The table above shows that 43 respondents representing 51% agreed that promotion
and conversion make workers of the commission put more efforts on their duties. 37
respondents representing 44% agreed that promotion and conversion make the
workers put more efforts on their duties. 2 respondents representing 2.4& disagreed,
while 3 respondents representing 4% disagreed, none of the respondent was
undecided.
The table above reveals that promotion and conversion make the workers put
more efforts and commitment to their duties. Further interview on the issue
confirms the above statement and went further to state that promotion and
conversion increases their salaries, gives psychological upliftment and increases
their sense of belonging.
Question 13
You were promoted as at when due.
Table 4.2.113 below shows the frequency distribution of the response.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
9
33
21
13
9
85
11
39
25
15.3
11
100
Source: Researcher’s Field Works/Survey, 2011.
94
The table above shows that 9 respondents representing 11% strongly agreed that the
workers were promoted as at when due. 33 respondents representing 39% agreed
that they were being promoted as at when due. 21 respondent representing 25%
strongly disagreed while 13 respondents representing 15.3% disagreed. However, 9
respondents representing 11% were undecided,
The result of the analysis shows that majority of the respondents accepted that
the workers were promoted as at when due. The interview conducted on some
management staff did not actually support the result of the responses. According to
them, most of the workers, especially the junior cadre got only one or two
promotions during the period under review, as against four, while few senior staff
got only one as against two depending on their grade level. The most unfortunate
thing is that most of the promotions hardly attracted any immediate financial effect.
Further more, most of the workers do not the criteria for promotion.
95
Question 14.
Financial incentives motivate workers more than non-financial incentives
Table 4.2.14 shows the frequency distribution of the response
Category of response Frequency Percentage(%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
21
39
9
13
3
85
25
46
11
15.3
4
100
Source: Researcher’s Field Works/Survey 2011.
From the above table, it was discovered that 21 respondents representing 25%
strongly agreed that financial incentives motivate workers than non-financial
incentives.39 respondents representing 46% agreed that financial incentives
motivate workers more than non-financial incentives. 9 respondent representing
11% strongly disagreed while 13 respondents representing 15.3% disagreed. 3
respondent representing 4% were undecided.
Further inquiries confirmed the responses from the workers. Most of the junior staff
preferred any benefit being monetized.
96
Question15.
Non-Financial incentives motivate the workers more than financial incentives.
Table 4.2.15 below shows the frequency distribution of the responses
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
8
15
31
36
5
85
9.4
18
36.4
42.3
5.9
100
Source: Researcher’s Field Works/Survey 2011.
The table above shows that 18 respondents representing 9.4% strongly agreed that
non-financial incentives motivate the workers more than financial incentives. 15
respondents representing 18% agreed that non-financial incentives motivate the
workers than financial incentives. 31 respondents representing 36.4% strongly
disagreed, while 36 respondents representing 42.3% disagreed. 5 respondent
representing 5.9% were undecided on the issue.
Most of the senior staff, especially those at the management level and those
on political appointment preferred non-financial benefit such a official cars,
equipping their office properly etc, these and likes make them more fulfilled and
committed to their duties.
97
4.2.16 TESTING OF HYPOTHESIS IV
The absence of collective bargaining process in Enugu State Local Government
commission tends to perpetuate meager and irregular payment workers salaries.
Question 16-18 were used in testing hypothesis IV
Question16
All the workers of the commission are members of National Union of Local
Government Employees (NULGE).
Table 4/2/16 below shows the frequency distribution of the respondents.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
52
28
1
4
-
85
61.2
33
1.2
4.7
-
100
Source: Researcher’s Field Works/Survey 2011.
The table above indicates that 52 respondent representing 61.2% strongly agreed
that all the workers of the commission are members of NULGE. 28 respondents
representing 33% agreed that all the workers are members. 1 respondent
representing 1.2% strongly disagreed that all the workers are members while 4
98
respondents representing 4.7% disagreed. None was undecided on the membership
of the union.
From the membership records and the interview conducted, all the workers
are members of the union except those on political appointment ie the
commissioners/members.
Question 17
Salaries, allowances and other fringe benefit were determined by the state
Government.
Table 4.2.17 below shows the frequency distribution of the respondents.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
38
36
5
3
3
85
45
42.3
5.9
3.5
3.5
100
Source: Researcher’s Field Works/Survey 2011.
From the table above, the responses show that 38 respondents representing 45%
agreed that salaries, allowances and other fringe benefits in the commission were
determined by the state Government. 36 respondents representing 42.3% agreed that
the salaries, allowances and other fringe benefits were determined by the
government. 5 respondents representing 5.9% strongly disagreed that salaries,
99
allowances and other fringe benefit were determined by the state government while
3 respondent representing 3.5% disagreed, 3 respondent representing 3.5%
undecided.
The above analysis confirms what Pigor and Myers, (1984) affirmed, the wages and
salaries in some organization, especially the federal government are established by
law and the civil service regulations.
Question 18.
Salaries, allowances and their fringe benefit were determined by collective
bargaining by the commission and NULGE.
Table 4.2.18 below shows the frequency distribution of responses from the
workers.
Category of response Frequency Percentage (%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
8
13
29
25
10
85
9.4
15.2
34.1
29.4
11.8
100
Source: Researcher’s Field Works/Survey 2011.
The table above indicates that 8 respondents representing 9.4% strongly agreed that
salaries, allowances and other fringe benefits were determined by collective
100
bargaining. 13 respondents representing 15.2% agreed that salaries, allowances and
other fringe benefits were determined by collective bargaining. 29 respondents
representing 34.1% strongly disagreed, while 25 respondents representing 29.4%
disagreed. 10 respondents representing 11.8% were undecided on the issue.
The management and the members of the commission made it categorically
clear that workers salaries, allowances and other benefits are determined by the state
government in line with the Enugu State Civil Service Commission.
Question 19
Irregular and inadequate salaries persist in the commission because of lack of
collective bargaining.
Table 4.2.19 below shows the frequency distribution of response.
Category of response Frequency Percentage(%)
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Undecided
Total
27
33
9
11
5
85
32
39
11
13
5.9
100
Source: Researcher’s Field Works/Survey 2011.
The above table shows that 27 respondents representing 32% strongly agreed that
irregular and meager salaries persist in the commission because of lack of collective
bargaining. 33 respondents representing 39% agreed that irregular and meager
101
salaries persist in the commission because of lack of collection bargaining. 9
respondents representing 11% strongly disagreed that irregular and meager salaries
persist because of lack of collective bargaining. While 11 respondents representing
13% disagreed, 5 respondent representing 5.9% were undecided.
Records from accounts department revealed that meagre and irregular
payment of salaries/wages persisted throughout the period under review. The salary
structure was not enhanced and the salaries were not coming at the end of every
month. There was no legislation as to what the minimum wage should be in the
country, so every state government determined the salary structure of her
employees.
4.3 DISCUSSION AND FINDINGS
Any given research looks forward to obtaining some results. The expectation
of a given set of result leads to the proposition of some specific hypotheses which
are eventually tested for the purpose of obtaining one result or the other. The finding
bellow are based on the fact gathered through interview, primary and secondary
data. The major findings of this study were generated from the efforts to answer the
research questions as well as testing the hypotheses.
In chapter two of this research four hypotheses were posited, all aimed at
finding out the effect of wage incentives and fringe benefits on the productivity of
workers of Enugu State local government service commission.
The first hypothesis of this study is hooked to whether irregular payment of
wage/salaries hinders the productivity of workers of Enugu state local government
102
service commission. It assumed that there is a positive relationship between
irregular payment of wages/salaries and low productivity of workers of the
commission. Three questions were posed in the questionnaire for the purpose of
testing the hypotheses. Aspects covered in the questions include how regular the
workers salaries/wages were between 1999 and 2007, how many months arrears of
salaries they were being awed and whether the workers were prompt and committed
to their duties.
All the questions posed on the irregular payment of wages/salaries were
analyzed one after the other. It was discovered that in terms of whether their
wages/salaries were regular, 53% and 35.3% respectively were of the opinion that
workers wages/salaries were irregular. The analysis also revealed that 67.1% and
23.6% of the respondents agreed that workers were being owed more than twelve
months (12) arrears of salaries. Further more, 44.8% and 34.1% agreed that the
workers were not prompt and committed to their duties because of irregular
payment of wages/salaries. Interviews conducted further revealed that the workers
were being owed exactly fourteen months arrears. Workers just breeze in to the
office and leave to scout for alternative source of survival as they were not sure that
they will be paid at the end of the month.
It can therefore be said that from all empirical evidences from the analysis of
the response of the respondents, the hypothesis is up-held.
The second hypothesis of the study was based on whether the inadequate
wage/salaries paid to the workers of the commission hinders the productivity of the
103
workers, four questions , 4-7 were used in testing the hypothesis. Aspects covered in
the question include how attractive their salary structure was, whether their salaries
are adequate, whether it reflected the economic realities of the time and whether
their salary structure is the same with other state government‟s establishment.
In answering the questions, a total of 76.5% affirmed that their salary
structure is not attractive. Also a total of 86% of the response indicates that the
workers wages/salaries were inadequate. The analysis equally revealed that 72.7%
of the respondents did not accept that the workers wages/salaries reflected the
economic realities of the time. A total of 60% of the whole respondents agreed that
the salary structure is the same with other state government establishments.
From the analysis done, the empirical evidence shows that the hypothesis
which stated that inadequate payment of wages/salaries in Enugu state local
government service commission hinders the productivity of workers of the
commission is up-held. Further interviews that revealed the inadequacy of workers
salaries show that workers salaries were computed based on the minimum wage of
N 5,175. The total take home pay of a level 10 step 5 officer was N 32,265.07. From
this meagre salary, he pays his rent, transportation, school fees for the children,
food, clothing and other basic necessities of life. So the workers usually abscond
from work to search for alternative source of income.
The third hypothesis was tested based on the assumption that the level of
fringe benefits in Enugu state local government service commission affects the
morale of the workers. Questions 8 to 15 were used to test the above hypothesis.
104
Areas covered by the question include whether insurance, health welfare scheme,
furniture allowances, housing loan, car loan etc were given as fringe benefits to
workers, the granting of motorcycle loan and in-service training in higher academic
institutions with pay, whether the fringe benefit given were satisfactory, will
granting of additional fringe boost their morale, the effects of promotion, and
aspects of financial and non-financial incentives.
The result of the analysis shows that a total of 74.1% of the total respondents
indicated that insurance, health welfare scheme, furniture allowance, housing loan.
car loan etc were not given as fringe benefit to the workers. However a total of 73%
agreed that workers were given motorcycle loan and granted in-service training in
higher institution of learning with pay. A total of 77% affirmed that the fringe
benefits given were not satisfactory. Also a total of 83.4% agreed that granting
additional fringe benefits will boost the morale of the workers. 71% of the
respondents agreed that promotion/conversion will make workers put more efforts
on their duties. High caliber officers prefer non-financial incentives, while the
medium and the lower strata prefer financial incentives. According to them, the
financial incentives that motivate them are the one given outside their salaries. From
the above analysis, it is evident that the levels of fringe benefits do not boost the
morale of the workers. Therefore, the hypothesis which stated that the level of
fringe benefits in Enugu state local government service commission affects the
morale of the workers in up-held.
105
Majority opinions show that the level of fringe benefits is low and unsatisfactory.
The interview conducted even revealed further that motorcycle loan granted is not
regular and that even after the in-service training promotion/conversion is not
always assured. So the level of fringe benefits is not adequate to boost their morale
thereby leads to low productivity of the workers of the commission.
The fourth hypothesis was tested based on the assumption that the absence of
collective bargaining process in Enugu state local government commission tends to
perpetuate meagre and irregular payment of workers salaries. Questions 16-19 were
used in testing the hypothesis. Aspects covered by the question as were membership
of the workers union (NULGE), who determines their salaries/wages and other
fringe benefits the state government or by collective bargaining between the union
and the commission.
From the analysis it was indicated that 94.2% of all the workers are members
of National Union of Local Government Employees. A total of 87.3% agreed that
their salaries and other fringe benefits were determined by the state government and
also a total 73.5% of the responses indicated that workers salaries and other fringe
benefits were not determined by collective bargaining. The results of the analysis
have authenticated this hypothesis which stated that the absence of collective
bargaining perpetuates meagre and irregular payment of workers salaries. Interviews
conducted on the top management of the commission further confirmed the result of
the analysis by stating that salary issues and fringe benefits are determined by the
government and its agencies. They pointed out however, that the union can
106
negotiate and even go on strike to press down their demand for better conditions of
service. But that will only be meaningful if the national body or the state chapter of
the union conducts the negotiation, otherwise the labour union in the commission
cannot all alone negotiate or go on strike for better condition of service. It was
further found out that some categories of workers especially those on political
appointments are usually not members of the union.
107
CHAPTERM 5: SUMMARY, CONCLUSION AND RECOMMENDATION.
5.1 SUMMARY
This study examined the effects of wages incentives and fringe benefits on
the productivity of Nigeria workers, a study of Enugu State local government
service commission from 1999 to 2007. It is noted that the ability of an organization
to achieve its goals of high productivity depend to a large extent on human
resources as well as how effectively they managed workers. The workers should be
adequately motivated for enhanced productivity. It was highlighted that the poor
performance, lack of dedication and commitment of workers have been a matter of
concern and debate among government officials, private organizations and the
general public. How to improve the productivity of employees has been the topic of
many seminars, symposia and conferences. The reasons for the trend, as well as,
appropriate avenue for apportionment of blame, have formed the controversy.
The pertinent questions of the study were also highlighted. The objectives the
study intended to achieve were clearly stated, while the significance of study the
scope and limitations of the study concluded the first chapter.
In the second chapter, the literature was extensively reviewed in many aspects
such as concept of wages and salaries, concept of fringe benefits, wage
determination and collective bargaining and principle of motivation. The gap in
knowledge came under this chapter, as well as hypotheses and operationalization of
key concepts. Methodology for the study was also X-rayed which include types of
study, data gathering instruments, validity and reliability instruments, populations of
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the study, sample of the study and method of data used were, primary and secondary
data. Victor Vroom‟s (1964) Expectancy theory was used for the theoretical frame
work.
Chapter three of the study dealt with the background information on the study
area, functions of the commission, the organogram, funding, and fringe benefits in
the commission, salary structure, achievements, major setbacks and tenureship of
members of the commission.
Data from the field, their presentation, analyses and testing of the research
hypotheses were the major contents of chapter four. Findings from the analysis
concluded this chapter.
Chapter five is the last chapter of the study and dealt with the summary,
conclusions and recommendations.
The findings revealed that there was low productivity of workers of the
commission occasioned by irregular and inadequate wages/salaries, low level of
fringe benefits and absence of collective bargaining process.
5.2 CONCLUSION.
This study aimed at investigating the effects of wage incentives and fringe
benefits on the productivity of workers of Enugu State local government service
commission with a view to finding out whether their wages/salaries were adequate,
regular and whether the level of fringe benefits in the commission boost workers
morals for high productivity or not and whether workers salaries/wages were
determined by collective bargaining.
109
As we earlier stated, the payment of good salaries and wages is fundamental to the
increase in the productivity of employee. Therefore a suitable payment system is a
prerequisite for effective performance. In other to motivate people to put maximum
efforts, it is essential that there various needs, especially as it concerns
wages/salaries and other fringe benefits; be satisfied as far as practicable. In Nigeria,
the salary structure falls below the level to maintain efficiency. It is not in line with
the economic realities. According to Papola (1970) “a just minimum wage to
maintain not only the life but the health and the vigour of the working people is a
law of necessity and knows no other law”
The work does not in any way assume that it has found out all the factors
responsible for low productivity of Nigerian workers. In the same vein, it cannot be
said that the problems of low productivity of Nigerian workers would come to an
end if the identified effects were redressed.
It is our belief that an attempt has been made to investigate the problems of
low productivity among Nigerian workers. If the findings of this research succeed in
making human resources managers and the government to look more seriously on
issues that enhance productivity, the study would have achieved its basic objectives.
There is no doubt that there might have been issues in the study that were not
adequately addressed or equally important issues that were not raised. These lapses
or gaps probably might have been included in the scope and limitations of the study.
110
5.3 RECOMMENDATIONS.
The necessity for managers and administrators to motivate their employers
through wage/salary incentives and other fringe benefit cannot be over-emphasized.
There is no doubt that the ability of any organized enterprise and, indeed any group,
to achieve its goals depends to a large extent on the motivation if its employers.
Indeed no management or government can succeed in achieving optimal
productivity without knowing what the people want. This study has revealed that the
low productivity of workers in Enugu State local government service commission
was as a result of lack of regular salaries/wages, inadequate salaries/wages, low
level of fringe benefits and absence of collective bargaining process in the
commission.
In the light of the above, the under listed recommendation are being made to
improve the productivity of Nigerian workers in general and that of the workers of
Enugu State local government service commission in particular.
1. There should be periodic upward review of worker‟s wages/salaries and other
fringe benefits through collective bargaining process. The economic realities
of the time should be considered during the process.
2. The issue of paying regular salaries to workers should be considered as a
priority by the government. A worker depends on his/her monthly salary for
the upkeep of his family. So of it doesn‟t come at the end of the month, they
are devastated. So there should be strong and effective legislation on this
matter.
111
3. Free education at all level should be given to all Nigerians especially the
children and youths, just as it exists in many western countries. This will
reduce the financial burden on parents who are also the workers in the
country.
4. Government should make it possible for Nigerian workers to buy houses, cars
and other necessities of life on mortgage bases. This could be done in
partnership with the government and other financial institutions. Any credible
workers should be guaranteed by government, methods of payment
established and spread over years, depending on the workers status and year
of retirement.
5. There should be a sustainable welfare scheme for all the categories of
workers. It should not be assumed that ones salaries have been paid to
workers, any other thing concerning the workers welfare has been taken care
of. The management should not ignore issues like emergency assistance in
cases of loss of direct relation, natural disaster, job security etc. Other issues
that should be taken care of include insurance, health welfare scheme
furniture allowances etc.
6. There should also be a way of rewarding efficiency at work so that other
members of the staff may start to envy those rewarded and through that may
change for better. There should be gifts in form of physical things or official
commendations for any member of the staff found to be the best among his
colleagues within a given period of time.
112
7. Promotion and conversion has also been identified as another motivational
factor. Workers should be promoted as at when due. A returnee member of
staff who came back from training and has acquired additional qualifications
should be posted to the relevant department. And acting appointment given
pending the availability of vacancy for him. Adequate promotion
opportunities should be provided to all cadres who undergo various training.
Stagnation should be avoided.
These recommendations made cannot be said to be exhaustive, but it is
believed that if they are implemented, it will help to boost the morale of the
workers and lead to high productivity of workers in the country.
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QUESTIONAIRE.
Department of Public Administration
And Local Government.
University of Nigeria, Nsukka.
22nd
September, 2011.
Dear Sir/Madam,
This research is on the Effects of Wage Incentives and fringe benefits
ob the Productivity of Workers of Enugu State Local Government Service
Commission.
The research is purely an academic exercise in partial fulfillment for
the ward of Master of Science (M.Sc) degree of University of Nigeria
Nsukka.
Please Supply answer honestly without bias as all the responses will be
treated in strict confidence and utilized solely for the purpose of the research.
Thanks you
Yours faithfully,
Odoh, Felix. A.
119
SECTION A
TICK WHERE APPROPRIATE IN THE BOXES PROVIDED
1. In what department are you: a. manpower Development and Training
b. Planning, Research and Statistics c. Finance and supply d.
Personnel Management
2. How many years are you: a. 21- 30 b. 31- 40 c. 41- 50 d.
51-60 e. 61 and above
3. Are you married a. Yes b. No
4. Educational Qualifications a. FSLC b. SSCE c. OND d. NCE
e. HND f. DEGREE
5. How many years have you served in this commission? a. 0-10 years b. 11-
20 years c. 21 – 30 years d. 31- 35 years
6. What is your salary grade level: a. 01- 6 b. 07 – 10 c. 12 -14 d.
15 – 17
( )
120
SECTION B
TICK WHERE APPROPRIATE IN THE BOXES PROVIDED
S/
N
Questions Strongly
Agree
Agree Strongly
Disagree
Disagree Uncer
tain
1 Salaries/wages of Enugu State local
government service commission
between 1999 and 2007 were
regular
2 More than 12 months arrears of
salaries were being owned to
workers between 1997 and 2007
3 Workers were prompt and
committed to their duties
4 The Salary structure of Enugu state
local government service
commission is attractive
5 The Salaries/wages being paid were
adequate
6 The Salaries of the commission
reflected the economic realities of
the time
( )
121
7 The salary structure of the
commission was the same with that
of other government establishment
in the state
8 Insurance, health welfare scheme,
furniture allowance, housing loan,
car loan etc were given as fringe
benefits to workers
9 Annually, some percentage of
workers were granted motorcycle
loan, in-service training to academic
institutions with pay
10 The fringe benefit paid to workers
were satisfactory
11 Granting additional fringe benefits
to workers will boost their morale
and lead to improved productivity
12 Promoting you makes you put more
efforts on your duties
13 You were promoted as at when due
14 Financial incentives motivate
122
workers more than non-financial
incentives
15 Non-financial incentives motivate
workers than financial incentives
16 All the workers of the commission
are members of National Union of
Local Government Employees
(NULDE)
17 Salaries, allowances and other
fringe benefits were determined by
the state government
18 Salaries, allowances and other
fringe benefits were determined by
collective bargaining ie the
commission and NULGE
19 Irregular and meager salaries persist
in the commission because of lack
of collective bargaining.
123