University of Nigeria Research Publications

OKPALA, Anthony Ugoh

Aut

hor

PG/MBA/97/19795

Title

The Impact of Fringe Benefits on The Performance of Workers in The Hotel and

Catering Industry A Study of Selected Hotels and Cathering Firms

in Enugu Urban

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e

March, 1999

Sign

atur

e

THE IMPACT OF FRINGE BENEFTI3 ON THE PERFORMANCE OF

WORKERS IN THE HOTEL ANI) CATERING INJXJSTRY

(A CASE OF SELECTED HOTEL AND CATERING FIRMS IN ENUGU

OKPALA ANTHONY UGOH

PG/MBA/97/19795

DEPARTMENT OF MAN.AGEMENT

FACULTY OF BUSINESS ADMINISTRATION

UNn7ERSRY OF NIGERIA

ENUGU CAMPUS

TITLE

The Impact of Fringe Benefits on the Performance of

Workers in the Hotel and Catering Industry

(A Case of Selected Hotel and Catering Firms in Enugu Urban)

Okpala Anthony Ugoh PG/MBA/97/19795

Being a Research Work Submitted in Partial Fulfilment

of the Requirements for the Award of the Degree

of Masters of Business Administration

(MBA) in Management,

Department of Management

Faculty of Business Administration

University of Nigeria

Enugu Campus

Supervisor: Chief P.C. Uuamlta

March, 1999

Okpala, Authony Ugoh, A postgraduate student in the Department of Management

and with the Registration Number PGlMBAl97119795 has satisfactorily coinpleted

the requirements for course and research work for the degree of Master of Business

Administration in Management.

This project report is an embodiment of original work and.has not been subinitted

in part or in full for any other diploma or degree of this or any other University.

J.A. EZE HEAD OF DEPARTMENT

CHIEF P.C. UNAMKA SUPERVISOR

iii

DEDICATION

To Mummy and Daddy

Mr Emmanuel Okpala

&

Mrs Felicia Okpala

And

to my brothers, especially

Mr Godwin D. Okpala

&

Mr Kenneth E. Okpala (Agu)

both of GEWLNCO HOLDINGS WORLDWIDE

ACKNOWLEDGMENT

First and Foremost, I wish to humbly express my profound gratitude to the

most High and Most Gracious, the dispenser of all blessings for granting me the

courage and good health to push-on with this work despite all odds.

I greatly appreciate the invaluable contribution of my Supervisor Chief P.C

Unarnka, whose contribution guide and fundamental leads made this work a reality.

I remain indebted to the staff & Management of the selected Hotel and

Catering firms, especially those of Hotel Presidential, Royal Palace Hotel, Nike Lake

Resort Hotel e.t.c, whose enthusiasm at this work contributed in no small way in

making it a success.

I am equally indebted to the Staff of University of Nigeria Enugu Campus * Library, British Council Library, IMT Library, Enugu State and National Libraries

for guiding the identification of some of the materials needed for this work.

Finally, my sincere gratitude goes to my course mates, good friends and room

mates namely: Mickey Mokwugwo, Kalu Amah, Ndukwe, Felix Awa, Odilia

Anyaehie, Angela Onyiba, Charles Okoh, Hope Maduka e.t.c, who contributed in

one way or the other, in making this work a reality. To all and others who could not

be mentioned here for obvious reasons, I say thanks. This assistance not with

standing, the researcher accepts full responsibility for any error in this work.

Okpala Anthony Ugoh

v

ABSTRACT

This study examines the impact of fringe benefits on the performance of

workers in the Hotel and Catering industry, with a view to establisl~ing its

importance to the workers and to the industry. This is intended to assert whether

or ncit ,poor fringe benefit schemes could be an impediment to the development of the

sub-sector.

The study is organized in five chapters each of which deals with some specific

aspects of the study.

The first chapter provide a framework for the study. It embodies what niay

be regarded as the proposal for the study and therefore provided the necessary

background information which helped to determine the structure of the study.

The second chapter deals with the review of related literature. It provides the

theoretical foundation upon which the intricacies of the subject-matter were closely

knitted.

Chapter three deals with the research metl~odology which involve a systematic

description and analysis of the tools and methods utilized in the research study. It

also show the different statistical methods employed in the research analysis.

In the fourth chapter, the researcher "waded his feet' into the stream of

research analysis1'. The research data collected in the field through the research tools

were presented and analyzed. Also, the hypothesis that guided data collection were

verified. A brief summary of the entire work is presented in the last chapter,

together with conclusion and recommendations.

The findings of the study reveals that fringe benefit is of great inlportance to

the workers in the industry, and to the industry. And also, that poor fringe benefit

schemes could serve as an impediment to the development of the sub-sector because

of its importance. The study made recommendatioi~s that will help to remedy the

situation, to engender a smooth and faster development of the Hotel and Catering

industry in Nigeria.

vi

TABLE OF CON'IXNTS

Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certification 11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dedication iii

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acknowledgment iv

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abstract. v

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

List of Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii

CHAPTER ONE

XNTRODUCTION

1.1 Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 The Statement of Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.3 The Purpose of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1.4 The Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1.5 Research Problem Oriented Hypothesis . . . . . . . . . . . . . . . . . . . . 6

. . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 The Significance of the Study 7

1.7 The Scope and Limitation of the Study . . . . . . . . . . . . . . . . . . . . 8

1.8 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

C-R TWO

TBE: REVIEW OF RELATED Ll3XRATURE

2.1 The Nature and Scope of Fringe Benefits . . . . . . . . . . . . . . . . . . 10

2.2 Factors for Effective Fringe Benefits Plan . . . . . . . . . . . . . . . . . . 11

2.3 Developing and Administering the Benefit Program . . . . . . . . . . . . 15

2.4 Suggested Ways of Ensuring Appreciation and Good Return on Employee

Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

vii

2.5 Why fringe Benefits Fail to Motivate Workers . . . . . . . . . . . . . . . 18

2.6 From a Different Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . 20

2.7 Reasons for Providing Fringe Benefits . . . . . . . . . . . . . . . . . . . . 22

2.8 Some Problems of Installing Fringe Benefits Plan8 . . . . . . . . . . . . 28

2.9 Some Major Types of Fringe Benefits . . . . . . . . . . . . . . . . . . . . 24

2.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

CFLWTERTaREE

RESEARCH METHODOLOGY

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Research Design 33

3.2 Pilot Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

. . . . . . . . . . . . . . . . . . . . . . 3.3 The Data and Research Technique 34

3.4 The Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

3.5 Description off the Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 SampIe Sue Determination 38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 Sampling Procedure 40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 Statistical Technique 40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 Questionnaire Design 41

. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10 Questionnaire Assumptions 42

3.11 Questionnaire Distribution and Organizational Status of Respondents 42

(xuPTER POUR

PRESENTATION, ANALYSIS AND .W .ERPIbETATION OF DATA

4.1 Demographic Characteristics of the Respondents . . . . . . . . . . . . . 47

. . . . . . . . . . . . . 4.2 Findings on Employees Attraction and Retention 50

. . . . . . . . . . . . . . . 4.3 Findings on Employees Level of Commitment 54

4.4 Findings on Absenteeism and Turnover . . . . . . . . . . . . . . . . . . . 57

viii

. . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Findings on Employee Morale 60

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 Testing of Hypothesis 64

CHAPTERJTCVE

SUMMARY RECOMMENDATION AND CONCLUSION

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Summary 78

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Recommendations 79

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 ConcIusion 80

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Further Research Needs 81

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography 82

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendices 85

LIST OF FIGURES

Figure 1: Maslows hierarchical classification of needs.

Figure 2: Diagrammatic representation of the sample.

LIST OF TABLFG

3.11a. Characteristics of the participating Hotel and Catering firms.

3.11b. Organization Status of Respondents

Educational Qualification

Age and Sex Distribution . ' Length of Service Distribution.

Marital Status Distribution

Response to the Rationale Behind Work.

What attract you to seek for employment in this Organization?

Would you leave for another organization with better fringe benefit schemes

if such an opportunity presents itself?

What do you consider as the most important aspect of your remuneration?

Are you satisfied with your organization friuge benefit schemes?

What level of commitment do you show to your work in the organization?

Do you think that improved fringe benefits programmes will increase your

level of commitment?

Have you ever been absent from work?

If the answer to (1) is 'Yes' how frequent is it?

If you are to leave your organization, which of the following would be the

major reason?

Would you have left the organization if the level of fringe benefits was very

low?

Do you feel satisfied working in you organization?

How do you perceive the fringe benefit schemes provided in your

organization?

xi

4 . 5 ~ What is your attitude to your organization and its goals?

4.5d Do you think that provision of fringe benefits in your organization affects

your job performance?

4.Se If the answer to '4' is Yes, how?

xii

LIST OF APPENDICES

9 Instrument A - Interview Guide

11) Instrument B - Questio~maire

111) Critical Value of Chi-square Distribution .

Iv) Calculation of Expected Frequency Values

v) Letter of Introduction from the Department of Management UNEC.

vx> Acknowledgment Letters from some of the Firms used in the Study

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND LNFORMATION

The problem of manpower in the Hotel and Catering industry has continued

to attract the attention of the industry's trade associations, professional bodies and

other interested parties because of the unique nature of the industry,

(Magurn,l977:vii). This uniqueiress lies in the fact that only a few other industries

have such close relations between staff and customer. Also only a few other

industries in the economy offer so much scope for giving satisfaction to others, and

for getting satisfaction from work. Yet, the problem of inability to attract, retain

and actuate personnel effectively and efficiently continue to stare the sub-sector in

the face, (Shuaibu, 1979; Pfedi, 1986:3).

In the light of the prevailing harsh econon~ic condition of our time, prudent,

management of the organization resources has been calIed for, so as to ensure

greater productivity from each unit of resource input. Of all the resources available

to management for the purpose of ensuring survival and growth of the organization,

the human resources stands out as one of the most basic and critical, (Druker,

1955251). One only need to think of the fact that all other resources can become

productive only i ~ t association with the human resource, arid humans aIso turn out

to be the ultimate consumer of the goods and or services from various organizations

in the economy, (Image,1996:19). I11 recognition of this, il~anagelnent usually devote

a lot of time and commit other resources towards attracting and retaining high

quality personnel for the organization and also in getting the best out of them. But,

the Hotel and Catering industry appears to be lagging behind in this regard,

especially in developing countries like Nigeria, (Onyia, 1986:3). Also, as Margun

(1977;vii) rightly noted.

"Our industry (Hotel and Catering) has frequently been critized in study reports for treating man-management, as the cindcrella of general niaiiage~neut and for devoting so little of its resources to developing the skills of those entrusted with responsibly . . . after all in n service industry, the people- resource nlust be seen as a prime determinant in the success and profitability of even the sn~allest unit."

A number of workfhop/lectures have been organized in Nigeria to find a solution to this

problem which may be acting as a hinderance to the desired developnlent of the Hotel and Catering

sub-sector. In one such workshopllecture, it was opined that amoug other issues like poor salary

sctiemes, degenerate working conditions etc, poor fringe benefit schemes prevalent in the industry

may also be part of the reason for the inability of the hidustry to attract, retain, and actuate

personilel effectively and efficiently, (Ifedi, 1986:3)

Fringe benefits have been identified as one of the effective ways managemeut may adopt for

attracting, retaining and actuating personnel, especially for motivating them to higher

performance, (Flippo, 1980:291;Ejiofor, 1984:23). Therefore for any organization to

meet its aims of survival, profit and growth, there is the greater need to devote more

attention to the formulation off sound and good fringe benefits prograinme/policy for the

organization and as well, maintain a good working condition, attractive salary and a

congenial work atmosphere. The reason for, this is because majority of the workers are

somewhat mainly concerned with the 'bread and butter" issue, moreso in today's Nigeria

with the prevailing economic depression, and general 'hardship'. One would see that

there is not much hope for the salaried worker, considering the rising inflation, which

was put at 8.5% (Abacha's 1998 Budget of Transition), with its accompanying rise in

cost of living. Also, there has been a steady rise in unemployment level, thereby

3

increasing the number of 'mouths' to be fed and cater for in the families of these poor

workers. Most wage and salary earners now see their pay package as a sheer mockery

of the prevailing market condition. Hence, attractive fringe benefits will help to

ameliorate the rising needs of the workers.

Again, the meaning attached to the fringe benefit programmes in existence in

many organizations are multifarious, and this affects its success in achieving its goal to

both the employees and the organizations. Man is a very complex being, and managing

man to increase his productivity involves a number, of variables one of which is

identifying those factors which can incite or spur him to contribute maxin~ally to

organizational growth and development. Once these factors are identified and established,

they can then be manipulated in a way that will enable them actuate labour effectively

and efficiendy , for improved performance.

The need for the development of the Hotel and catering industry in Nigeria, has

been on the increase in recent times. This arose out of the greater need to diversify the

revenue base of the country, considering the persisting slide in the price of crude oil at

the International Oil Market, (The Guardian, Nov.25, 1998:4). The developnlent of the

Hotel and Catering sub-sector, therefore, becomes pertinent because it provides the

'fertile' ground for the growth and development of Tourism industry. Tourism is, the

fastest growing industry in the world today, and, considering the abundant tourisin

potential in the countly, it 'has been accorded a "preferred sector" status in the national

economy, (Ugwu, 1998:42). But touisrn cannot grow or develop where there is not in

place a well established Hotel and Catering industry, (Adeoye, 1977: 11; Duru, 1998:46).

Also, as Nigeria continue to nurse the ambition of hosting the World Cup

tournament by the year 2006, the development of the Hotel and Catering industry in the

country would be a boost to this ambition. Nigeria would never have been allowed to

host the World Youth Soccer Championship tagged 'Nigeria 99' if there are no existing

Hotel; and Catering firms.

On the other hand, there has been a persistent call on Nigerian workers to

improve their performance, so as to contribute more to national development, (Ekundayo,

1988: 11; Agbetuyi, 1998:25). But, one would not expect much from a hungry worker,

and therefore studies such as the one undertaken hereby will help to direct the attention

of those at the helm of affairs to those salient factors that would need to be addressed

first before demand for better performance can be made of the workers.

1.2a. TKE STATEMENT OF PROBLEM

The Hotel and Catering industry, if well managed and developed has been known

to complemenl the tourism industry thereby enhancing revenue generation for the national

economy.

Meanwhile, it has been discovered that the Hotel and Catering industry in Nigeria

has not been bracing up to expectation for some reasons which boarder on inability to

attract, retain, and actuate personnel effectively and efficiently, (Adeoye, 1977: 11; Ifedi,

1986:3).

Lately, however, it has been noted amongst the hoteliers that though attracting,

retaining, and actuating personnel effectively plays a role here, the bulk of the problem

may centre on the dissatisfaction among the workers on the existing salary and fringe

benefit schemes as well as poor working conditions which leads to such vices as lateness

to work, absenteeism, and in extreme cases outright resignation. This leads to loss of

customer confidence and therefore revenue because, the employee might not even be

around to receive the customer as at when due.

Also, where the employee is on seat, the reception accorded a customer is usually

very cold and sometimes hostile. There have also been some reported theft cases. All

these continue to impede on the desired development of the sub-sector.

It is therefore the thrust of this research study to investigate an aspect of the

problem-poor fringe benefit schemes, with the aim of establishing its effect on the

performance of workers in the industry. And also, making useful suggestions that will

lead to improved fringe benefits administration in the Hotel and Catering industry, as

a way of engendering better performance among the workers, and consequently

enhancing the viability of the subsector.

1.2b. RESEARCH QUESTIONS

Focusing on the aspect of the problem as identified in the foregoing statement,

the questions that arise are:

i) what is the state of fringe benefit programmes in Hotel and Catering industry in

Nigeria?

ii) can the existing benefit schemes be helpful in attracting, retaining and actuating

personnel effectively and efficiently?

iii) can poor fringe benefit schemes act as an impediment to better performance by

workers in the industry?

1 . 2 ~ . THl% SUB-PROBLEMS

To facilitate the investigation of the problem, certain sub-issues will be addressed.

These include.

i) Which fringe benefits are operational in the Hotel and Catering industry in

Nigeria?

ii) Are they helpful in attracting employees to the sub-sector?

iii)

iv)

v)

vi)

vii)

1.3.

6

Do they help to retain the services of the enlployees for a longtime in the

industry?

Do they affect the workers level of commitment?

What effect do they have on manpower turnover in the industry?

Do they affect the rate of absenteeism among the workers?

What effect do they have on the workers morale?

THE PURPOSE OF THIE STUDY

The purpose of the study is to assess the impact of fringe benefits on the

performance of workers in the Hotel and Catering industry, and to establish whether poor

fringe benefit schemes could be an impediment to better performance by the workers

thereby hindering the growth - and development of the sub-sector.

1.4 OBJECTIVES OF THE STUDY

This study will examine the impact of fringe benefits on the performance of

workers in the Hotel and Catering industry with a view to:

i)

ii)

iii)

1.5.

identifying the fringe benefits that are operational in the Hotel and Catering

industry in Nigeria;

establishing whether thes fringe benefits are helpful in attracting and retaining

employees in the industry;

establishing whether fringe benefits affect turnover, absenteeism, level of

commitment and morale of the workers negatively, thereby acting as an

impediment to better performance by the workers, and consequently inhibiting the

growth and development of the sub-sector.

RESEARCH PROBLEM-ORIENTED HYPOTHESIS

To guide the investigation of the issues raised in the problem definition (1.2a.

7

1.2b and 1.2c), it is hypothesized that;

Fringe benefits are helpful in attracting employees to the Hotel and Catering

industry.

Fringe benefits are helpful in retaining employees in the Hotel and Catering

industry.

There is a direct relationship between fringe benefit 'packages' and employees

level of commitment.

Absenteeism among the workers will tend to be inversely related to the firms

level of fringe benefits.

Manpower turnover in the Hotel and Catering industry will tend to be inversely

related to the firms level of fringe benefits.

Better fringe benefit 'packages' will have a positive impact on the workers

morale.

SIGNIFICANCE OF THE STUDY

The study is significant in the sense that it will assess the impact of fringe benefits

on the performance of workers in the Hotel and Catering industry as a way of

establishing the level of importance of fringe benefits to the workers, and to the

industry.

The study will also determine whether or not poor fringe benefits schemes

contribute to lateness, absenteeism, turnover, low morale and low level of commitment

among the workers. It will summarily conclude whether or not fringe benefits are

important in attracting, retaining and actuating personnel in the Hotel and Catering

industry.

All these will in a way point to what may need to be done to facilitate faster

growth and development of the subsector.

1.7. SCOPE AND LIMITATIONS OF THE STUDY

The study was intended to cover some of the major areas of development and

administration of fringe benefit schemes with some of its attendant problems. It has

singled out the problem of fringe benefit scheme form the other problems identified as

inhibiting the development of Hotel and Catering industry in Nigeria, for study so as to

ensure a thorough assessment of the situation. The entire work of the research will be

concentrated on employees of all cadre in selected Hotel and Catering firms in Enugu

Urban.

A major constraint on this research study was that of sourcing the relevant

materials, as some of the materials needed were not readily available.

Money was also a serious impediment. This was as a result of the numerous trips

that had to be embarked upon for the purpose of the work. The prevailing fuel scarcity

also contributed to the hike in transport fare. A lot of money was also spent on the typing

and binding of the work. This was particularly felt since the researcher was self

sponsored.

Another major limitation also was that of inability of the Hotel and Catering firms

to make available some useful; materials which they described as classified, and therefore

cannot be made available.

There was also the issue of time factor which enforced on the researcher a lot of

hard work to ensure that the research was completed within the stipulated time.

1.8. DEFINITION OF TERMS

Frinpe Benefits: These are additional benefits (Monetary or non-monetary) available to

the worker as a member of an organization apart frorn the normal salary or wages and

which adds to the total labour cost. It may be legally required like maternity leave

workers compensation, vacation etc. or voluntary, like recreational facilities, cafeteria

subsidies, christmas gift, profit sharing bonus etc,

Tourism: This refers to that sector of a nation's economy which caters for its need for

recreation, relaxation, leisure and animation of life. It is also viewed as a temporary or

short term movement of people to destinations outside the places where they normally

live and work, as well as activities during their stay at these destinations. In its wider

sense, it encompasses movement for all purposes, including leisure, commerce cultural

exchanges, and relaxation. .I

The Tourism phenomenon is a result of man's inherent desire to change his

environment for purposes of psychological satisfaction, as we11 as business exploration.

Tourism is the fastest growing industry in the world today. It preaches to change the

world from the manufacturing dominated economy to service oriented sector.

Effectiveness: This refers to the achievement of pre determined goaIs.

Efficiency: This relates output to input, in assessing how we11 a given output was

achieved with minimum input.

Productivity: This refers to the contribution of a unit input to production output.

Morale: This is the sum total of the 'attitudes' of all workers of one group. If we

can discover the attitude of the individual, we can deduce from them the overall morale

of workers in the group. Though 'attitude' cannot be measured directly, a man's attitude

may be revealed indirectly by his verbal declarations.

Hotel: A firm providing lodging and usually meals to the public on a commercial

basis.

Catering Firm: A firm providing light meals and fast-foods to the public on a

commercial basis.

10

CHAPTER TWO

2.0 THE REVIEW OF RELATED LITERATURE

2.1 THE NATURE OF SCOPE OF FRINGE BENEFITS

The term fringe benefits has ben defined by various authors. Flippo

defined it as a11 expenditure designed to benefit employees over and above regular wages

and direct monetary incentives related to output, (Elippo, 1976:544). Armstrong and

Murlis have it def ied as 'the total package offered to employees over and above salary

which increases their well being at some cost to the employer. (Armstrong and Muriis,

1980 :140). In their own contribution French and Saward (1977:138), defined it as

something of value, apart from agreed reguIar monetary payments of salaries and wages,

given by an employer to an empIoyee. Yet, another definition is that given by Johnnasei~

and Page, (1975:151). They defined fringe benefits as the reward for employment in

addition to remuneration or payment of wages or salaries. Blomstrom, however, opined

that one of the probIems which always arises in discussing fringe benefits is that of

definition. He pointed out that when narrowly defined, it has been used to mean only

those benefits which appear in the employee's pay cheque. In its broader sense, he

described it as those employee benefits which appear as cost items in negotiated labour

agreements (Blomstrom, 1964: 11). But in it's broadest interpretation, it is defined as any

kind of employee benefits and includes such items as health and life insurance, retirement

benefits and other such items commonly contained in the labour contract as well as broad

category of employees services such as employee recreation and socia1 programme,

purchase of company products at reduced prices and medical services.

In the search for a suitable definition, certain characteristics of fringe benefits has

been described by Reid and Roberston, (1965: 19). These characteristics are:

11

i) They all cost the employer money.

ii) They all either add to the employee's pay or are of some service to him.

iii) They are available to all or most of the employees.

iv) Their cost rises or falls as the size of the work-force changes.

According to Ejiofor (1986: 102), benefits are almost encon~passing - "they span

a worker's life from the date of employment to life after death". But the question always

arises as to whether or not a company should provide any kind of benefit to its

employees. While some argue that liberal benefit plans raise morale, increase employees

loyalty and motivates employees other are of contrary opinion.

However, Wistert (1959:147), is of the view that fringe benefits are indeed here

to stay. He opined that it is beyond the power of the individual company or the industry

in general to consider retrogressing from the present accepted standard of benefit but it

is within the company's prerogative to ask itself the questions:

i) Do our employees really appreciate what we are doing for them? and,

ii) Are we getting as much out of fringe benefits programme as possible.

If the company cannot answer all the questions in the affirmative, "it may be

assumed that it's programme is little more than a give away programme", (Wistert,

1959).

As every company expects something in return for its fringe benefit programme

certain factors were drawn by some authors as to how a company can get the best out

of money spent on fringe benefits. These factors are considered below:

2.2 FACTORS FOR EFFECTIVE FRINGE BENEFIT PLAN

In the words of Blomstrom, one of the factors to be considered for an effective

fringe benefit plan is that, "it must be built on a base of satisfactory wages, hours and

working conditions", (Blornstrom, 1964). He seeins to share the same view with Jucius

when he (Jucius) said that service plans will do little or no good if a company's wages,

hours and working conditions are not considered satisfactory by the employees. They

are considered to be the foundation because employee benefit plan cannot support a

weak or unfair structure of wages, hours and working conditions.

The second factor as stated by Flippo is that it should never be established unless

there is a real need for it, (Flippo, 1982:295). In his contribution, Blomstroin (1964),

suggested that "it should never be viewed from the paternalistic view point of being good

to the employee". The question which should always be asked is: can the employee

furnish the service for himself as well or better than the company can provide it?

However, Flippo (1982) in his findings stated that in many cases, fringe benefits have

been installed, only to be met with employee outright resistance. This according to him

is because some managers believe they know what is best for their employees. He

therefore shared the same view with Blomstrom by stating that the provision of fringe

benefits should not be viewed from the moralistic angle. Rather the question the

company must ask itself is: Do the employees want the service?

The third factor for effective benefit plan is that as nearly as possible, plans

shouId be structured so that maximum number of employees are affected. But according

to Blonlstrom (19641, this does not mean that all employees must participate in all plans.

The fourth factor as stated by Flippo is that "the cost of the benefit should be

calculable and provision should be made for sound financing " , (Flippo, 1982). Sound

estimates must be made, and adequate provisions, for financing must be established

before conceding the service over the collective bargaining table or before embarking on

any such services, (Flippo, 1982).

Another factor for effective fringe benefit programme is an extensive and well-

13

planned communication programme. This factor is well stated by Flippo, (1 982), when

he said that if the firm is to receive values from providing employee services, it must

undertake an extensive and well-planned communication program. Ejiofor tended to

agree with Flippo when he stated the implication of low awareness of employee benefit

programmes. According to Ejiofor, "A worker cannot be motivated by a benefit he is

not aware of", (Ejiofor, 1986: 104).

Yet another factor is that in designing fringe benefit programmes, effort should

be made to create a more favourable image of the company in the eyes of the public.

To this end, Strauss and Sayles suggested the consideration of such programs as re-

creational, civic and social activities which impress the community with the value of the

firm, (Strauss and Sayles, 1960:719).

Finally, according to Blomstrom, fringe benefit plans should be operated in such

a way that employees take pride in them. He stated: "Pride in the plan helps in building

employee loyalty", (Blomstrom, 1964: 13).

But certain questions come up. What kind of benefit should an organization

adopt? And how should these benefit plans be administered to bring about the

effectiveness of the programme? These are two of the most important questions to be

asked when an organization undertakes an analysis of its benefit packages. According

to Coleman, survey of benefits offered by other organizations are necessary to determine

what the competitor is providing, (Coleman, 1979:361 - 363). Also, survey of

employees through questionnaire or interview can provide data on how the employees

feel about their existing benefits and what they might want changed. It is on this basis

that Coleman suggested ways of developing and administering the benefit prosram:

14

2.3 DEVELOPING AND ADMINISTERING THE BENEFIT PROGRAM

Coleman (1976), listed certain questions an organization must ask itself in

developing and administering its benefit plan. These questions include:

1. What do we have?

2. What do others offer?

3. What do en~ployees what?

4) What is the cost of the existing programme?

5 . What is the cost of the alternative to this program?

6 . What is the behaviour encouraged by the existing program elements?

7. What is the behaviour anticipated by the program change?

8. What is the cost and pay-off for change?

Yet, another question comes up: what should be the philosophy of the manager

in the realm of employee services? According to Flippo (1976:544), the basic guiding

principle should be that no employee benefit programme should be undertaken unless

there is some return to the organization that is at least equal to its cost.

However, one problem always arises on the effectiveness of benefit programmes,

and this problem is Iack of adequate information provided by companies to their

employees about the kind of fringe benefits available in the company. In Harrington

findings, "lack of knowledge of fringe benefit programmes in the companies are

astounding as they are numerous leading to poor understanding of the programme",

(Harrington, P970:604).

In a survey of over 36,000 employees in fifteen companies, Harrigton found that

more than 30% of those surveyed indicated that they did not understand the benefits

provided by their companies. According to him, in some companies, the number

indicating such lack of knowledge exceeded 60%. The importance of these response, he

pointed out, is that in nearly every case of poor understanding, the employee did not

appreciate the benefits, nor did he believe they compared well with benefits provided by

other companies. In other words knowledge and appreciation go hand-in-hand.

In his findings, Harrington continued, since so many employees do not appreciate

the benefits that are provided, management finds itself under pressure to add or revise

benefits faster than it should. This pressure can take many forms. In non-union

companies, the pressure is sometimes applied through an organization's attempt. Also,

in any company, he further stressed, pressure may be applied by increased turnover,

productivity declines or absenteeism.

Jewett (1976:18), also emphasized this problem when he said, "an area of

responsibility often neglected by management is the transfer of information from

managers to employees concerning job benefits". I-Ie went on to say that the provision

of fringe benefits is the area in which management while doing a good job of providing

them, in many cases does a poor job of informing their employees that they provide

them. Management is therefore faced with the issue of providing the employee adequate

knowledge of the type of fringe benefit in the company and the benefits he is eligible to

receive.

In his own contribution, Ejiofor (1986) said that usually, many employees are not

aware of the existence of fringe benefit programmes. According to him, the time many

employees become aware of the benefits in existence in their organization is the time it

is being threatened with withdrawal by management or when the employee might have

left the organization. He further stressed the implication by saying, "an employee cannot

be motivated by a benefit he is unaware of", (Ejiofor, 1986).

The question that poses itself now is what shou1d be done to insure full

appreciation and good return for the money spent on employee benefits?

2.4 SUGGESTED WAYS OF ENSURING APPRECIATION AND GOOD

RETURN ON EMPLOYEE BENEFIT PLANS

In pursuance of the aforementioned objective of ensuring full appreciation and

good return for the money spent on employee benefits, the company could embark on a

benefit awareness programme as a means of informing employees of what their company

is doing for their well-being.

In line with this, Harrington (1970:604) mentioned four ways through which

employees may come to appreciate employees benefit programmes.

Firstly, the company could provide an annual statement to each enlployee showing

the amount paid or provided for each benefit for the last year.

Secondly, the company could hold employee meetings once in a year to review

benefits or schedule them when revisions are made to both explain the new or changed

benefits and review the rest of the package.

Thirdly, running of contest by asking people to guess the percentage the company

is providing for the total benefit package and follow up periodically with other contests

designed to make employees think about the provisions of each benefit component could

be of great help. For example, according to Jewett (1976: 18), a contest could be run to

ask employees to guess the 'dollar' value of major medical claims in the last year or

guess the amount of the largest major medical claim. He further stressed that other

contest could ask for the total number of dependents covered by the company benefit,

vacation allowances, and so on.

Lastly, the company could train supervisors to be part of its sales force to 'sell'

employees on the vaIue provided through benefit programmes. But then, the company

17

should ensure that the supervisors, themselves are satisfied with their benefits before

being asked to convince the employees.

But in Jewett's view, no matter which methods are used to acquaint employees

with the benefits available to them, it should meet certain criteria (Jewett, 1976):

i) It should be appropriate to the employees involved.

ii) It should be honest and sincere. There should be no doubt in the employees mind

that his company is interested in him personally. Lastly, there should be a means

of communication used which permits the employees to obtain answers to

questions about his benefits.

He also suggested various media that a company could use to communicate with

employee about benefits provided, These media include the following: company

publication, booklets, notices on pay envelops, posters and bulletin boards. it is also his

belief that if employees had a part in the selection of some of the benefits which were

made available to them, knowledge of the various benefits received by them would be

increased. Although, he went on to say, that it could lead to a 'garbage' approach which

is highly suspected to abuse, the method has considerable merit when used with care.

And considering all the money companies spend on compensation over and above direct

wage payments, it would seem to be an intelligent approach, he pointed out, to permit

employees to have a voice in selecting some of those which appeal to them most.

In addition ta the suggested ways of ensuring appreciation and good return on

employee benefit plans by Harrington and Jewett, certain reasons why Fringe Benefits

fail to motivate employees and which have to be looked into for adequate return on the

money spent on the program were given:

18

2.5 WHY FRINGE BENEFITS FAIL TO MOTIVATE WORKERS

One of the reasons why fringe benefits fail to motivate employees according to

Ejiofor (1986: 105), is the wrong notion which colours management attitude to employee

welfare programme that worker should see fringe benefits as kind gestures from

employers which they should reciprocate., He pointed out that paternalistic assumption

ends in disillusionment. "Workers expect fringes as of right" (Ejiofor, 1986).

Peharps, Ejiofor went on to say, one of the most important reasons employee

welfare programmes do not elicit greater worker effort is that many do not discriminate.

There is no distinction between "hard working" employees and others in terms of benefit

provided. This, according to him destroys their motivation potential.

diagramm

Also emphasized is the fact that for any reward to motivate employees, it has to

be attractive to the prospective recipient. Different people value different things at

different stages of their lives and working careers. As a result of differences in valence,

while some employees are enthusiastic about some of the benefits, or even hostile to

some benefit programmes. Where the benefits are not desired by the workers,

expenditure on benefits will be like money thrown down the drain in terms of incentives

for greater performance.

On explanation for differences in value attached to certain benefit is one's position

in Maslow's need hierarchy, (Maslow, 1943: 370 - 396); fig. 1.

For instance, "a study leave programme means little to a fifty year old laborer,

gateman or cleaner; a long service award of a gold watch given to a retiring polygamous

machine operator with ten children is also 'a square peg in a round hold"', (Ejiofor,

1986).

According to Newman (1963: 190), many employees benefits programmes turn out

to be morale depressants rather than stimulants because they are not varied

proportionately within the organization. They are inequitably dispensed between senior

and junior staff.

Though, subordinates do not expect to bc treated like their bosses, a11 employees

are interested in what the boss gets. Dispensing of benefits de-motivates employees if

they perceive that the gap between what is given to them and what management gives to

itself is too wide. In the same vein, employees expect to be treated as well as their

counterparts is other organization. Thus, it is argued that benefit, which fall below those

received by employees counterparts in other organizations were demotivating.

In his own view, Ejiofor, (1986), agreed that benefits not properly administered

causes frustration. He pointed out that such rnis-management may arise out of

questionable integrity of the dispensing manager and some due to ineptitude, or bad

poIicies. He illustrated this point with employee training facilities. According to him

most employees expect to be promoted soon after training and get frustrated if they do

not get promoted while employees on their part may argue that promotion is based on

productivity, not on paper qualification. The net effect is that organizations that ignore

the employees expectations do so at their peril.

2.6 FROM A DIFlFERENT PERSPECTIVE

Fringe benefit can be looked at from another perspective. According to

Blomstrom (1964) most employers have found themselves facing a tight labour market.

Competent employees have been hard to get and in some cases even hard to keep. As

a result of facing the seller's market, many employer have turned to various competitive

devices such as pension plans and employee recreation programs. It was also pointed out

that in the competitive world of today, businessmen considered themselves to be

competing for labour on two separate fronts, that is wages on one hand and fringe

benefits on the other.

Also of importance is the fact that present economic situation has taught

employees to think in terms of real wages (the amount of goods and services an

employee can command in exchange for a given amount of work). For example, "the

Nigerian workers produce but cannot dictate the price of their labour", (Ekundayo,

1988: 11). Whenever there is any danger facing the economy, they are always called upon

to salvage it and necessary sacrifices are made by them. It was therefore agreed that the

upward review of workers fringe benefits is overdue. For instance, the Nigerian Labour

Congress (NLC) did provide a cost of living index which showed that the prices of

21

essential commodities in Nigeria had increased between 150% and 500% since the

enactmen1 of the National Minimum Wage Act of 1981. Though it now appears as if the

dawn of better days for the Nigerian worker is now here, with the recent minimum wage

increase from N800 - PF5,200 per month by the Abubakar administration. The new

increase is however still shrouded in controversy, and also, "inflation has eaten deep into

the fabric of the nation economy", so much so that the new increase may be more or Iess

or no effect, (Obadofin, 1998:5), Despite this, the Nigerian workers are being called

upon daily to increase their productivity. According to Ekundayo, (1988), this shouId

pose no problem. "Let those who play the piper dictate the tune". The employers of

labour should strive to make workers happy by increasing their lots and improving their

welfare.

Knowing the importance of fringe benefit progranmes in an organization, it is

believed that they have become an integral part of the business life and are here to stay.

Business-men need not be as concerned with the question of whether or not to provide

benefits as with the questions of what kind, how many and how much?

The answer to such questions seem to lie with the employees themselves and the

desire to increase their real wages. According to Blomstrom, if fringe benefit

programmes are to yield the fullest return, they must be of value to both the company

and employee, (Blosmtrom, 1964). The employee invariably equates money spent on

fringe benefits with his command of goods and services. He weighs the desirability of

increased money income against increased fringe benefits. If he feels that money spent

on benefit programmes increases his real wages, he will respond positively to the

expenditure. In other words, if the company can provide a desirable good or service for

the employees at lower cost than he can provide it for himself, there will be a positive

22

response. If however the employee feels that money spent on the benefit programmes

has not increased his real wage, his response would be negative. In that case, the

company will have to find a better use for the money.

2.7 REASONS FOR PROVIDING FRINGE BENEFITS

Regardless of the necessity of individuality, it is interesting to look at reasons

given for establishing fringe benefit programmes by companies.

In Blomstroms view, some companies think that they have a certain social

responsibility which can be fulfilled by providing fringe benefits to their employees,

(Blomstrom, 1964). They seem to feel that the lives of their employees are so closely

related to the company, that the firm must provide for old age problems and the like.

There appears to be an increasing awareness of the difficuIties encountered by workers

in our modern society in obtaining funds to satisfy their needs. Under certain conditions

in which employees cannot adequately provide for their own health and welfare, many

companies feel it is their duty to be concerned.

Also in recent times, management has observed that it is to their own advantage

to maintain a sound fringe benefit plan "as employees seek security as well as leisure,

and deprivations in either area may lead to paralyzing unrest that reflects itself in

decreased effectiveness", (Strauss and Sayles, 1971 :711 - 714). Paradoxically, as the

country becomes complex and sophisticated, the desire to eliminate risk and increase

personal security grows stronger. And the prevalence of fringe benefits reflects a strong

urge on the part of employees to eliminate insecurity from every conceivable source.

Many companies find the thought of unionization distasteful. Some companies

go to the extent of keeping the union out by providing more and better benefits than

unions have been able to secure. The reasoning being that benefits which are superior

to those obtained through negotiations will make unions less attractive to employees.

The tax position in which many companies find themselves also make if attractive

to provide various benefit programmes since most benefit and service programmes are

expense items and thus deductible before taxable income. Companies considered it an

advantage providing fringe benefits to their employees rather than using the same fund

for paying taxes.

Some companies are also of the view that generous fringe benefits help create a

more favourable image of the company in the eyes of the public, thus, making it easier

for management to recruit high calibre employees and to maintain amicable relationship

with the entire community. This led to the view that like fair wages and salaries,

adequate health, welfare programmes impress the community with value of the firm,

particulady as these programmes becomes more widely identified (Strauss and Sayles,

1971:70).

Also considered by companies is the fact that attractive fringe benefits tend to

"trap" employees into remaining with a particular firm in that they might want to

accumulate such benefits as sizeable pension, long vacations or extensive sick Ieave

benefits, (French, 1964509).

It is known that people who would have otherwise left their employment in civil

service are often complaining that they would not leave until it is possible for them to

get all their benefits. According to Nwachukwu, empioyee satisfaction correlates

negatively with high rate of labour turnover, tardiness, labour-management disputes and

high absenteeism rate, (Nwachukwu, 1984:272).

2.8 SOME PROBLEMS OF WSTALLING FRINGE BENEFIT PLANS

One of the problems of installing employee benefit plan is the financial problem

24

involved. Before entering into a programme, management is faced with the problem of

having to make thorough realistic evaluation of its cost, both short-term and long-term.

This is because even where there are no legal obligation to provide fringe benefits to

employees, employees often feel that management has made a moral conlmitinent to

continue the programme indefinitely, (Strauss and Sayles: 712). But where management

finds itself incapable of continuing a programme, it could bring the company's plight

before the union so that re-negotiations would take place for trading off the programme.

Furthermore, benefit services designed to build employee morale may have some

disastrous effects. For instance, experience has shown that many fringe benefit

programmes which provide such things as housing, food and the like often develop into

rich sources of workers grievances (Strauss and Sayles: 706). Such grievances could

arise when the company is faced with such problems as:

i) When is it 'fair' for the company to raise price of food in the company's

restaurant?

ii) How often should rice or beans be served in the canteen?

Problems may also arise when for one reason or the other, there is delay in

settlement of employees claim, such as claim for medical expenses, claiming of over-time

payment or premium leave allowances and any other allowances. The danger in such

delays is that it sometimes leads to bad feelings, complaints and union grievances and all

these could be regarded as threats to morale.

2.9 SOME MAJOR TYPES OF FRINGE BENEFITS

Fringe benefits are characterized by variety. This make it difficult to compile an

acceptable, single and exhaustive list of the benefits and services. According to Yoder,

(1972:655), "no simple and yet generally accepted classification of benefits and services

3) Extra Compensation for Time Worked

i) Overtime premium

ii) Shift premium

iii) Shift in pay

iv) Holiday premium

4) Payment for contribution towards Employee Security

i)

ii)

iii)

iv)

v)

v i)

vii)

viii)

iix)

Accident and disability insurance

Hospitalization insurance

Medical and surgical insurance

Unemployment compensation

supplements to unemployment-compensation

Workmen's compensation

Employee thrift plans

Employee stock purchase plans

Pensions

5) Enlployee Services

0 ii)

iii)

iv)

v)

v i)

vii)

viii)

ix)

Cafeteria

Athletic teams and recreational progrmmes

Housing

Stores

Educational scholarship and loans

Free meals

Special counselling services

Income tax

Legal aid

has achieved wide acceptance". Some current discussions distinguished those required

by law, for instance unemployment insurance or workmen's compensation, from those

provided on a voluntary or negotiated basis.

For the purpose of convenience and the limits of this study, a partial list of

commonly offered benefits and services would include:

1) Non Production awards and bonuses;

i) Suggestion awards

ii) Profit sharing

iii) Service bonus

iv) Christmas bonus

V) Safety awards.

2) Payments for Time not Worked

i) Holiday with pay

ii) Jury duty time

iii) Lunch periods

iv) Rest periods

v) Sick leave

vi) ReIigious holidays

vii) Vacation

viii) Severance Pay

ix) Voting time

x) Military service allowance

xi) Time spent on grievances and contract negotiations.

x) Retirement

xi) Transportation

xii) Parking facilities

Some of these benefit packages will now be explained further based on the

opinion of Macbeath and Rands (1976:327-349)

1) Holiday Transport and Accommodation

A number of companies run holiday or convalescent homes. However, a few individual

organizations go far beyond this stage to provide holiday accommodation for senior

executives, for example to the best salesmen.

2. Payment During Absence for Domestic Reasons

Some organizations define periods of time permitted for absence with pay for domestic

reasons.

This is primarily intended to cover such incidents as the funeral of an immediate

relatives, birth of a son or daughter, sudden sickness of an immediate dependent relative,

or some other personal emergency which necessitates time away from work. In practice,

Macbeath and Rands (1976) emphasized, most employers give time off choose to define

it with the result that it becomes a 'right' and ass such niay be rigidly taken up by some

employees.

3) Pension

There are few staff employees who do not enjoy the prospect of receiving a

pension when they retire. However, the many pension plans which individual companies

have developed, or purchased from specialist pension or life insurance companies vary

substantially both in cost to the company contributions from employees and benefit for

the employee.

28

4) Subsidized Meals

Whenever it is difficult for employees to return home for lunch, employers tend to make

some arrangement to ensue that their staff are adequately fed at mid-day at subsidized

price. On an industrial estate, or in a large factory, this normally takes the form of

providing canteen services, while in town or city centers, where the office

acconlmodation is very close to existing canteen or restaurant facilities, some form of

luncheon voucher may be issued.

5) Subsidized Purchase

Virtually all organization producing or selling any form of consumer product make some

concessions to their staff in the form of discount of purchase. The cost of this services

to the employer according to Macbeath and Rands is limited to the administrative cost

of the service. This is probably very small and is virtually certain to be more than offset

by profit on the sale, even after discount has been allowed.

6) Medical Benefits

Many companies arrange for senior members of staff to have regular medical

checks to ensure that all is well, and may extend this arrangement to other staff to save

the time which would be taken by those staff going to private practitioners if medical

facilities are not available in the company. As Mcbeath and Rands noted, most of these

items have a marginal cost which is more than offset by reductions in lost working time.

They contended that these facilities are widely appreciated by staff.

7) Car Subsidy

The award of a company car, with either limited or complete use is probably the

most substantial single benefit given, according to Mcbeath and Rands, (1976). The

pointed out in general, the larger companies tend to make rather limited use of this

29

expensive benefit and to restrict it to people of director or top management statue.

Smaller companies often readiIy make a car available to people who are at middle

maqagement level, and are less strict in controlling the use of the car outside normal

business hour. This may help to off-set the general more restricted career prospect in

a smaller firm.

8) Housing

There are many forms of housing assistance. In an industrial estate or in a town,

a company may have available a certain number of houses for rental through the housing

authority. In these circumstances, it can offer, as a recruitment incentive, subsidized

rental accommodation which may be of a high standard.

9) Overtime and Holiday Pays 'C .. Whenever the normal hours of work have been agreed upon or fixed, any hours worked

in excess by a worker is regarded as overtime and is paid for, But nothing prevents

employers and unions from bargaining contract terms that provide for premiums for

weekend works such as double time for sunday.

10) Leave of Absence

It is now common for employers to grant leave of absence with pay. In some

80% of employer-union agreement, provision is made for leaves, although specific rules

governing such leaves are not so frequentIy set out in detail. Some of these leaves

include:

i) Annual leave: employees are entitled to holiday with pay at least six working days

in a year after tweIve continuous months of service.

ii) Maternity leave: These are usually granted to women for a period of six weeks

following their confinement.

3 0

iii) Casual leave: These could be granted to any employees, for a few days on

compassionate grounds.

11) Call-in, Call-out and Call-back Pay

A "call in" occurs when the employee reports for work and for various reasons

there is no work to be done while a "call out" and a "call back" occur when an employee

is asked to report for work outside his regular hours. if an emergency requires a

company to call out an employee outside his regular hours, the customary practice is to

pay him at a higher rate (Yoder, 1958: 15 - 18)

12) Employee Counselling

One employee service which has traditionally been provided for employees who

are experiencing personal problems is employee counselling. These according to Naylor

and Torrington (1974:238) fall into three categories namely:

a) employees who are in financial difficulties

b) employees who are ignorant of how to deal with any other personal situation which

is confronting them, and who need and require advice.

Such problems in the opinion of Naylor and Torrington often not onIy worry

employers but may also affect the efficiency of the firm. If an employee has a problem

arising from any of the above source, his mind might not be at rest for the job which he

is being paid for. His working efficiency and the safety of both himself and his feIlow

employees may therefore be jeopardized.

13) Recreation Programmes

It is a general saying that "all work and no play makes Jack a dulI boy". This

has helped employers to know the importance or recreation facilities in their

organization. Generally, it is believed that workers attitudes improve when the routine

31

of every day living is broken occasionally. In addition, it is agreed that through the

contacts and relationship build up in recreational events, a more agreeable informal

atmosphere is promoted (Flippa, 1976550). The employee not only gets to know other

employees, but also gets in touch with the management in% climate unaffected by the

chain of command.

14) Group Insurance Programme

Group insurance programmes are frequentIy provided by companies for protection of

employees against such risks as loss of Iife and incidence of accidents and illness.

According to Flippo (1976) programmes of this nature are aimed at relieving the

employees of worry about security of his dependents and of financial strains to enable

him devote grater attention to the job of the company. GeneralIy, group insurance is

preferred by employers because group life premiums are considerably smaller than

insurance purchased by the individual.

2.10 Summary

With the increase in the growth of fringe benefits provided by companies coupled

with the fact that some of these benefits are not directed towards the specific needs of

employees due to its poor administration, "it is questionable whether our industrial

economy can stand more fringe increases as most of its costs are ultimately passed to the

consumer and, like direct wage increases contributes to spiralling inflations (Straws and

Sayles, 1971: 712).

Furthermore, some companies in their effort to provide employees fringe benefits

go to the extent that they smother the employees. By providing lavish fringe benefits, the

firm may foster a sense of over-dependence among some employees and a destructive

resentment against excessive paternalism among others.

32

Each company should therefore decide how much is enough and how much is "too

much".

The solution to this problem, therefore is to gear the provision of fringe benefit

towards satisfying the actual needs of the employee, provide adequate information about

the kind of benefits provided for the employee so that they can come to appreciate what

the company is doing for them and giving them the opportunity of choosing the ones that

satisfy their needs most rather than dictating, choosing or basing its provision on a

paternalistic assumptions which in general improve its administration. All these it is

believed wiIl bring the desired return expected on money spent on fringe benefits.

Also, as Strauss and Sayles puts it, if management is to ensure that it's benefit

programmes are working out in practice as originally planned, it must be subject to

constant review. Periodic surveys of employee opinion might disclose quite different

orders of preference among various fringe benefits and between "fringesUand direct pay

than management has been assuming.

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

The principal method adopted for the study was the analytical survey method.

Steps were taken to obtain relevant data on the effect of fringe benefits on the

performance of workers in selected Hotel and Catering outfits in Enugu urban. The

selected hotel and catering firms are:-

i) Nike Lake Resort Hotel

i i) Hotel Presidential

iii) Modern Model Hotels (Modotels)

iv) Zodiac Hotels Ltd

v) The Genesis Restaurant

v i) ~uixote ls /~lacia Huest House

vii) Hotel cordial Ltd

viii) Royal Palace Hotel Ltd

ix) Raya Restaurant

X) Jook Hotel and Towers

The workers from these Hotel and catering firms were taken as the sample for

study from the population. The data collected during the study were analyzed with a

view to establishing how the performance of these workers are affected by the fringe

benefits schemes in their different organizations.

A test of the validity and reliability of the questionnaire instrument used for data

collection was one important objective of the pilot study carried out. On account of the

problems encountered and from other observations recorded during the study, the original

34

instrument has to be modified and remodelled. This especially affected the provision for

scoring the responses which was part of the original instrument design and rndel .

Measures were also taken to forestall response set by altering the order of the items in

the questionnaires.

Steps were taken to secure promises of cooperation from the management of the

selected Hotel and Catering f m s so that the fieldwork proper which was carried out

later went on smoothly. Both the administration of questionnaires and the conduct of

interviews took place in the respondents workplace within the first half of February 1999.

This ensured time consistency and uniformity of the environment of the study.

3.2 PILOT STUDY

The pilot study conducted was to get a demographic picture of the respondents

and to provide an opportunity to assess the adopted strategy and anticipate problems that

will IikeIy crop up in the course of the proper study. Instrument pretesting was done,

though on a minimal scale and results obtained were considered adequate for the purpose

of generating certain data required to cIarify research objectives, formulate hypotheses

and determine the sample size and other related issues.

3.3 THE DATA AND RESEARCH TECHNIQUE

Sippl and SippI (1973:628), defined data as a form employed to express all given

facts, parts, quantities and elements of a proposition in a given problem. Sanders

(1973:9) on the other hand defrned it as a general term used to denote any or all facts,

numbers, letters and symbols that refer to or describe an idea, subject, condition or other

functions such as name, address, telephone numbers etc. Although often considered to

be numeric value, data may also be defined to include non-numeric perception and

observations made by human beings and machines.

These

i)

ii)

35

Sources of Data

For the purpose of this research study, two main sources of data were identified.

are primary and secondary data sources.

Primary Data Source

Sources for the data referred to as primary include

Personal Interviews

Observations

iii) Questionnaires

GeneralIy, primary data are the original data gathered by the researcher solely for

the purpose of the project at hand, (Tull and Hawkins, 1990:81). As this implies,

primary data refers to the initial or primary collection of observed facts gathered by the

researcher for the purpose of his study. They are first hand facts collected by the

researcher, and the aim of this usually is to make the study as original as possible.

Great reliance was placed on the interview and questionnaire methods for the

purpose of obtaining the data for this study.

Secondary Data

These are data collected for some purpose other than helping to solve the problem

at hand (Tull and Hawkins, 1990; Boyd et.al, 1981: 137). it include information

gathered by some other person or organizations for their own use but which have been

utilized by the researcher for the purpose of his research. Experts are of the opinion that

secondary data should be given a high premium for the purpose of a research as they

argue that the methods employed for the acquisition of primary data often give rooms for

human biases which distort the facts of the situation under review (Bennett, 1991:85-

103).

However, the secondary data should have the following properties for them to be

reliable:

i) Availability

ii) Relevance

iii) Accuracy

iv) Sufficiency

The secondary data used for the purpose of this research have been classified

according to sources into:

Internal Sources, and

External Sources

The internal sources include:

organizations internal memos;

policy manuals;

operating manuals;

internal experts

monographs

periodicals

bulletins

internal miscellaneous records

The external sources include

directories

encyclopedias

books

external experts

government official gazettes and bulletins

annual reports

37

For sourcing the secondary data for this research work, much use was made of the

school library, British Council Library, National and State Libraries all located in Enugu.

3.4. THE POPULATION

For a study of this nature, the universe of interest would comprise the totality of

the Hotel and Catering workers in Nigeria. Unfortunately, accurate statistics on the

number of workers involve is not available. Because of the large number of subjects in

the population, the distribution was approximated to be normal.

3.5 DESCRIPTION OF THE SAMPLE

The entire work of this research were concentrated on employees of all cadre in

the selected Hotel and Catering firms.

The sample for the study were viewed from two perspective namely:

i) the managerial staffs, and

ii) the operatives

Those subjects which fall under the managerial staffs group con~prises the managers and

the senior staffs, while subjects in the operatives group consist of the junior staffs.

3.6 SAMPLE SIZE DETERMINATION

The distribution of the population was found to be approximately normal, and as . ,

Chisnal (1973: 108) noted, "where the popuIation is very large relative to the sample, the

finite population correction (FPC) approximate to unity " and was therefore ignored.

With a at 5 percent, the researcher adopted the sample percentage method

suggested by Cochram (1977:72-73) for calculating the sample size with the formula.

Where,

n = sample size

P = the percentage of units in the population that possess some attributes or fall into the same defined class.

Q = the percentage not possessing the given attribute.

From equation (i)

Therefore, n = 2 i E L

5

n therefore depend on some property of the population here represented by the

quantity P.

Due to non-availability of identical prior data from which to estimate P, one of

the questions that featured in the pilot study was specifically applied for the generation

of P. The particular question was:

"Which of the following types of fringe benefits do you desire most?"

a) Yolunting Benefits e.g. welfare plans, recreational facilities, cash benefits for

time not worked, cafeteria subsidies, educationd prbgrarnme, christmas gifts,

child care centres, medical coverage, long service awards [ ]

b) Legally required benefits e.g. vacations, employment insurance, workers

compensation, retirement gratuity, maternity leave, sick leave, company car etc

11 The findings revealed that only 2 percent of the 10 subjects sampled in the

managerial staffs group desire fringe benefits types - a, while 98 per cent desire fringe

benefits type-b.

Therefore with P value at 98 percent, n was estimated as follows:

n = 4P0 25 = P = 98

Q = 2 Therefore, n = 4 X 98(2)

25 = 32

The response pattern for the subjects in the workers category however showed a

marked contrast with only 10 percent desiring fringe benefit type-b and 90 percent

desiring type-a.

Therefore with P value at 10 percent, n was estimated as follows:

Therefore, n-" -= - 4 X lO(90)

rC - The sample size obtained by a' statistical method refers to the minimum number

of participants for the findings of the research to have statistical significance (AdIer,

1967: 159). However in view of the possibility of not getting response from some of the

subjects, the calculated sample size of 32 for subjects in the managerial staffs group was

increased slightly to 40, and that of subjects in the operatives group was increased to

150, This is to ensure adequate return at the initial contact, thereby reducing the need

for supplementary field activity which would normally follow drastic shortfalls in returns. ".

3.7 SAMPLING PROCEDURE

To ensure equitable representation of the respondents from the selected Hotel and

Catering firms a proportional stratified random sampling was employed. The

stratification plan was based on the nunlber of employees of different categories (Fig.11)

in the selected companies,

Appropriate quota for each sample unit was determined based on 40 respondents

from the managerial staffs group and 150 respondents from the operatives group who

were to participate in the study. Thus a total of 190 questionnaires were equitably

distributed to random sample of respondents in the managerial staffs and operatives

group.

3.8 STATISTICAL TECIINIQUE

The data generated from the field survey were interpreted using the percentage

technique. The chi-square method of hypothesis testing was used to verify the

hypothesis. The chi-square foimula is given as follows.

X2 = (Fo - FeI2 Fe

Where, Fo = observed frequency of an event

Fe = expected frequency of an event

The chi-square technique was suitable for the analysis because the number of

response expected can be readily quantified. Also, chi-square is a non-parametric

statistical method, and therefore ideally suitable for the analysis of nominal scale data

e.g. sex, perception etc. Its objective normally is to test for independence or absence

of independence among nominally grouped data. It was specifically used in this case to

find out if there is any significant relationship between:

i) employee attraction and retention

ii) manpower turnover and absenteeism;

iii) employee level of commitment;

iv) employee morale

and fringe benefits in the Hotel and Catering industry.

3.9 QUESTIONNAIRE DESIGN

One of the instrument used in this study is the close-dended structured

questionnaire which was divided into five sections. Questions in the first four sections

were designed to address aspects of the hypotheses, while the last section was on the

respondents profile. To allow for a good response from the respondents, multiple choice

type of questions were appiied on the questionnaire. This therefore allowed the use of

statistical methods in analyzing the data collected, which in turn aided the researcher in

testing the research hypotheses.

A questionnaire is usually influenced by three type of errors which are surrogate

information error, non-response error, and as Bennett (1991:85) noted, "even when

reasonable response rates (however defined are achieved . . . the resulting data may be

biased. However, great care were taken by the researcher to reduce these errors to the

barest minimum.

3.10 QUESTIONNAIRES ASSUMPTIONS

The researcher made the following assumptions concerning the questionnaire.

i) That the questionnaire *would elicit the needed idolmation

ii) That the respondents are willing and would be able to complete the questionnaire.

iii) That the respondents will understand the questions.

iv) That the questionnaire would be distributed to the right people capable of

providing the necessary data.

3.1 1 QUESTIONNAIRE DISTRIBUTION AND ORGANIZATIONAL STATUS

OF RESPONDENTS

Generally, the reaction of the subjects to the study was favorable. the operatives

in particular demonstrated tremendous zeal and curiosity in demanding and completing

the questionnaires. Out of the 40 questionnaires distributed to the subjects in the

managerial staffs category, 35 were returned, while in the operatives category 146 were

returned out of 150 distributed. These returns in terms of response rate amounted to

88 % and 97 % respectively.

These questionnaires were checked for possible mistakes and some of them were

found to be poorly completed that they could not be used for the purpose of the study.

At the end of the scrutiny exercise 34 and 140 questionnaires were deemed usable in the

managerial staffs and operatives category respectively. This represented 85 % and 93 %

of the administered questionnaires in each case.

Distribution of questionnaires to the participating firms was done on a quota basis

depending on the firms staff strength. Table 3.11a reveal the characteristics of the

participating firms in terms of staff strength, ownership status, and the number of

questionnaires assigned.

'

3) Modern Model Hotefs (Modotcls)

4) Zodiac Hotels Ltd

5) The Genesis Restaurant

6) QuixotelslPalcia Guest House

Table 3.IIa Characteristics of the Participating Hotels and Caterlng Firms

Private Owned 1 I 37

r

HotellCatering Firm

1) Nike Lake Resort Hotel

2) Hotel Presidential

11 Total 1 I SO4 I 190

Ownership Control

Stare G o v e r ~ ~ e n t Owned

State Government Owned

8) Royal Palace Hotel Ltd

9) Raya Restaurant

10) Jook Hotel & Towers

An examination of the table reveals that the two state government owned Hotels

participating in the study received a 'lion share' of the questionnaire in the two broad

categories of the subjects. A total of 77 questionnaires were distributed to workers in

these two Hotels. This represent more than 40% of the sample. The other ten

participating Hotel and Catering firms which are privately-owned shared the remaining

60%.

Staff Strength

L 10

95

n

Naof Questionnaires

43

40

62

I!

27

22

2

6

Table 3.IIb Organizational Status of Respondents

I Respondents I Usable Returns

1 Sample Number ( Rate(%)

Managers I 20

Total (Managerial Staffs) 1 40 1 35 I 88 1 34 I 8s

I I I I I 17 1 85 1 17 1 100

Senior Smffs 20

Table 3.IIb gives the respondents in tenns of their position in their organization.

An examination of the table reveals that of the subjects in the managerial staffs category

17 belong to the manager level, while 18 belong to the senior staff level. This represents

85% and 90% respectively in terms of response rate.

On the whole, there were 181 respondents, representing 95% of the sample, out

of 190 distributed questionnaires for the two broad categories. From the returns, 7 were

rejected leaving leaving a balance of 174 questionnaires representing 92% of the sample.

I I I I I 18

Operatives

90 I

I50

17

146 97

94

140 93

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

The methodology used for generating data for this study was explained in chapter

three. The survey instrument used were questionnaires and interview. The data gathered

from the questionnaires were empirical in nature and wilI 'be used for testing the

hypotheses. The data from the interview instrument were directed mainly to address the

first issue in the study objectives which is the identification of the fringe benefits that are

operational in the hotel and catering industry in Nigeria. Though selected hotel and

caiering firms in Enugu urban were chosen as the sample for study, the findings were

assumed to be equally applicable in other similar firms in the sector since the sample size

was assumed to be an exact replica of the population or the universe which it was meant

to represent.

Some of the fringe benefits identified as operational in the hotel and catering

industry are:

9 iii)

v>

vii)

ix)

xi)

xiii)

xv)

Christmas bonu ii) Leave Allowance

Sick leave with pay iv) Car loan

Use of company car vi) Transport allowance

House loan viii) House rent allowance

Retirement pay x) Free rncals

Subsidized meal xii) Free medical services

Maternity Ieave xiv) Music with work

Shift premium

It was however discovered from the study that the extent to which these be~iefits

are available differs in the different firms studied. State government owned hotels have

most of these benefits in place more than the private owned hotels.

46

Most private owned hotels ignore some of these benefits, giving only those that

may be said to be legaIly required like maternity leave and use of company car. This in

one way or the other would be affecting the performance of their workers.

It was also discovered that majority of these hotel and catering firms do not

involve their employees in choosing the items to be included in the fringe benefit

packages. This may be affecting the success of the existing benefits in achieving its

goals both for the employer and the employees.

The information reported here were gathered from the administrative officers and

personnel mangers of the hotel and catering films involved in the study. The general

impression from the information gathered was that fringe benefits schemes as they exist

in the firms studied were in a very poor state, and therefore need to be improved upon

before any steady development of the industry can commence.

The data generated through the questionnaire instrument were presented and

interpreted using the percentage technique, and the chi-square method of hypotheses

testing was used to verify the hypotheses.

The findings in this section shall be presented for easy analytical purposes under

four sub-headings.

Firstly, we shall show the respondents views on the impact of fringe benefit on

the attraction and retention of employees in the hotel and catering industry.

Secondly, we shall examine the relationship between fringe benefits packages and

employees level of commitment.

Thirdly, we shall examine the relationship between fringe benefits and

absenteeisdturnover.

Lastly, we shall show the respondents view on the iinpact of better fringe benefits

packages on the workers nlorale,

47

The presentation of these findings will be preceded 'by an exami~iation of the

demographic and other features of the respondents.

4.1 Denlographic Characteristics of the Respondents

The responses to questions on the profile of the participants in section E of the

questionnaire have been tabulated.

Table 4. l a have categorized these returns on the basis of the organizational status

of the participants. An analysis of the Table shows that only 29.41 % of the respondents

in the managerial staffs category had university degree, which seems to support the fact

of the problem definition - inability of the hotel and catering industry to attract qualified

personnel.

Table 4. l a Eclucational Qualification

Operatives Grand Ratc Options

Junior Staff Rate P/o Total (%)

Less than WASC

WASCIGCE

Diploma

Prof. Cert

B.Sc1B.A

Masters

20.58% had WASCJGCE.

Total 17

hile

2

5

3

4

3

The inability of the hotel and catering industry to att~act qualified personnel is

even

About 26 76 and 18 % had Diploma and Professional certificates respectively, w 17

2

5

4

3

2

1

34

2

7

9

6

6

4

100

5.88

20.58

26.47

17.65

17.65

11.76

140 100 174 100

79

48

5

8

- -

reflected more in the operatives category, where more than half of the subjects (56.43 %)

do not have GCEJWASC. About 4% and 6% had diploma and professional certificates

respectively, while about 34% had WASC/GCE. None of the respondents in this

category had university degree.

Table 4.lb Age and Sex Distribution

Brackets

Respondenrs Below 20

Managers

11 Operatives 1 6 I 101 I

I Sex

Total 6 108 33 I

10 - 49 Above 49 Male Female

3 1 1s 2

Table 4.lb gives the age and sex distribution of the respondents. From the

analysis, it is evident that the male participants out number their female counterparts.

As many as 28 (82.35%) of the subjects in the managerial staff category were male,

while in the operatives category, 98 (70%) were male, the rest were female. Therefore

o d y a handful of females, 18% and 30% of the managerial staff and operatives category

respectively participated in the study.

Age-wise, majority of the respondents in the managerial staff category were aged

between 30 and 39 years. They represent 56% of the subjects in this group. They were

followed by those in the age bracket 40 - 49 years, and lastly by those above 49. These

represented about 9% and 3% of the respondents in this category respectively.

Among the operatives, those in the age bracket 20 - 29 years, topped the list with

101 subjects representing 72.14% of the respondents in this group. They were followed

by those in the age bracket 30 - 39,40 - 49, above 49 and below 20 years of age in that

order. These represented lo%, 8%, 6% and 4% of the respondents in this group

respectively.

The research was also interested in the participants length of service in the

participating firms. This findings are recorded in Table 4 . 1 ~ .

Table 4.lc Length of Service Distribution

Managerial Staff I I

11 ( Manager I Senior Staff 1 TotaI

11 19-19 Years 1 - 1 1 1 1

> 5 Years

Race 56 1 Junior Sraff I Ratc % 1 Total

1 I I 10

20 YearslAbove

Total

An Analysis of table 4. lc revealed that among the respondents in the managerial

staff group, 15(44.12%) have worked in their various firms for less than 5 years,

13(38.24%) for between 5 and 9 years, and 5(14.7%) for between 10 and 14 years, and

only 1 (3.00%) for between 15 and 19 years. None of the respondents in this category

have worked for more than 20 years.

Among the operatives, non have worked in their for more than 20 years.

3(2.15%) have worked for between 15 and 19 years, 10(7.14%) have worked for

between 10 and 14 years, and 64(45.71%) for between 5 and 9 years in their different

hotel and catering firms. 63 of the respondents in this category representing 45% of

them have worked in this finn for Iess than 5 years.

Considering the effect the prevailing harsh economic condition in the country may

5

17

15

17 34

50

be having on the workers perception of the fringe benefits available in their organization,

this study also got interested in the marital status of the respondents to find out the

proportion of them with families to cater for. These it is supposed will see their fringe

benefits packages as a further means of ameliorating their rising needs.

The findings are presented in Table 4. ld.

Table 4. ld Marital Status Distribution

Marital Status Managerial Staff

Rate % Total (%) I I

Operatives

100 I 174 1 100 1 rity of the respondents I

Manager

Single

Married

To ta 1 17

in both subjects category are married. Specifically, 3l(gl. 18%) of the respondents in

the managerial staff group are married, while 3 (8.82%) are not.

In the case of the subjects in the operatives category, 84 of them representing

60% are married while 56 representing 40% are single.

The respondents were therefore expected to have interest in the fringe benefits

available to them as members of their various organizations.

Having covered these preliminary grounds, we now focus our attention on the

four sub-headings under which the findings would be verified.

4.2 FINDINGS ON EMPLOYEES ATTRACTION AND FWTENTION

The first question in this section was intended to discover the rationale behind

work by the respondents. The particular question was, "Why do you work?" The

responses to the question are summarized in Table 4.2a.

the findings in Table 4. Id reveals that inaj

Senior Staff

1

16

17

Junior Staff

56

$4

140

I Total Rare %

3 8.82

3 1

34

91.18

100

Table 4.2a Response to the Rationale behind the Wbrk of the Respondents: "Why

do you Work?

From the response gathered, it was clear that majority of the respondents work

for money. This however is not surprising considering the countries level of

development, and standard of living. The findings also agree with Abraham Maslow's

need hieraracy (Fig.l), for majority of Nigerian are still struggling to meet the basic

physiological needs. And, under such a situation, monetary incentives can be used to

Response Options

To Avoid Idleness

For Recognition

For Money

To Forge Ahead in Life

To Contribute to National Development

Total

motivate the workers to higher performance.

As is shown in the table, 94.83% of the overall respondents (165) work for

money, 3 representing 1.72% work for recognition, and 5 representing 2.87% of the

respondents says they work to forge ahead in life. Only 1 of the respondents, in the

managerial category, indicated that he works to contribute to national developn~ent. This

in a way reflected the usual attitude to work among Nigerians, (Akpala, 1990: xxiv).

It would

Managerial Staff

Total

3

28

2

1

34

Manager

2

13

1

1

17

Senior Staff

1

15

1

17

- Rate %

3

82.35

5.88

2.95

100

Operatives

Junior Staff

137

3

140

Rate %

97.86

6.

2.14

100

Grand

Total

3

165

5

1

174

Rate

(%)

1.72

94.83

2.87

0.58

100

52

therefore be right to think that better fringe benefits packages (either in monetary or non-

monetary terms) will help to motivate these workers and enhance their performance.

The next question in this section was intended to find out what attracted the

employees to seek for employment in their various firms. The responses received are

summarized in Table 4.2b.

Table 4.2b. "What attracted you to seek for Employment in this Organization

Response Managerial S~aff Options

I

I I I Manager I Senior Staff I Total I Rate % I Junior Staff

Fringe Benefiu 4 4 8 23.52

Working 5 3 8 23.52 Conditions

I

The responses in Table 4 . 2 ~ shows that majority of the respondents were attracted

to their organization because of fringe benefits. The response rate here was 55.75% of

the subjects in the two categories. This is followed by Basic Salary with a response rate

of 28.74% and then the job itseIf with a response rate of 0.07%.

0.05 % of the respondents in the two categories indicated that they were attracted

to seek for employment in their organization because of d ~ e job itself, and 0.03%, in

order to avoid idleness.

The next question in this section was aimed at finding out whether fringe benefits

The Job ilself

To avoid Idleness

Total

2

3

17

I

14.71

14.71

100

3

2

17

5

5

34

20

18

140

14.29

12.86

100

25

23

174

14.37

13-22

100

53

is helping to retain employees in the hotel and catering industry. The responses obtained

are summarized in Table 4 . 2 ~ .

Table 4 . 2 ~ "Would you leave for another orgariizatiorl with better fringe benefits

schemes if such an opportunity presents itself"

Grand

Total

Response Options

Yes

No

I don't Know

Total

From the responses gathered, it is clear that fringe benefits actually k l p to retain

the employees in their various organization, as most of them will readily opt for another

firm with better fringe benefits schemes if such an opportunity presents itself.

From the table (4 .2~) 164 of the respondents in the two categories represeilting

94.25% indicated that they would better Ieave for another organization with belt fringes,

while 4 of them representing 2.30% indicated to the contrary. 3.45% of the overall

respondent could not say their opinion on the issue.

The last question in this action was to find out what the employees feel about the

remuneration packages offered them in their organizations. The responses are recorded

in Table 4.2d.

Managerial Stan

Total

30

3

1

34

Manager

16

1

17

Stnior Staff

14

2

1

17

Rate %

88.24

8.82

2.94

100

Operatives

Junior Sfafr

134

1

5

140

Rate %

95.71

0.71

3.58

100

Table 4.2d. "What do you consider as the most important aspect of your

remuneration? I'

11 Response Options

Basic Salary

Fringe Bcnefits

I don't Know

Total

Managerial Staff I I s Operatives

Junior Staff Manager Senior Staff

Gran d

Rate % Total

From the responses gathered, it was clear that majority of the respondents

Total

regarded fringe benefits highly. 11 1 of the overall respondents, representing 63.79% of

Rate %

the total subjects indicated it as the most important aspect of their enumeration. 57 of

the respondents representing 32.76% indicated basic salary while 3.45% of them couid

not say which of the two basic salary and fringe benefits is the most important aspect of

their remuneration. The findings here appear to be in line with the findings of Table

4 . 2 ~ and seems to confirm it.

4.3 Findings on Employee Level of Coinmitment

The first question in this action was aimed at finding out how the employees feel

about the fringe benefits schemes in their organization. The responses obtained are

recorded in 'Table 4.3a.

Table 4.3a "Are you Satisfied with your Organizations Fringe Benefit Schemes?"

Managerial Staff 1

1 No 1 1; 1 I don't Know

Total 17 17 34 100

Manager

3

Operatives

Junior StaIi Senior Staff

1

From the responses it can be seen that majority of the respondents were not

satisfied with the fringe benefits schemes of their firms, and this will likely affect their

performance. 156 of the respondents in the two categories representing 89.66% of the

subjects indicated that they were not satisfied with their firms fringe benefits schemes.

11 representing 6% indicated that they were satisfied, while 7 representing 4.02% could

not say their opinion on the issue.

The next question in the section seeks to find out the level of commitment shown

by the respondents to their work in the firms. The responses obtained are shown in table

4.3b.

Table 4.3b "What level of Commitment do you show to your work in the

Organization?"

11 Response I Managerial Staff

Total

4

I Operatives I

Rale %

11.76

I

Total Rate % I lunior ~ t a . I ale %

Grand

Total

The result of the responses reveal that majority of the respondents show only low

to average Ievel of commitment to their work. 102 of the respondents in the two

categories, representing 58.62% of the subjects show average Ievel of commitment, while

64 representing 36.78% of the subject show low level commitment. Only 8 of the

respondents in the two categories, representing 4.6% of the subjects show high level of

commitment to their work. This response distribution here may be attributed to the poor

fringe benefits schemes of these fms.

The last question in this section was aimed at confirming or disproving the

findings in Table 4.3b,. It seeks to find out how improved fringe benefits schemes will

affect the employees level of commitment. The response obtained are tabulated in Table

4 . 3 ~ .

Table 4 . 3 ~ "Do you think that Improved Fringe Benefits Progranimes will

increase your level of commitment?''

Response Options It-----

I can't say I I

I -

Managerial Staff Operatives e i

The result of the responses reveal that improving the fringe benefits schemes of

these firms will help to improve the employees level of commitment. An analysis of the

table shows that 153 of the respondents in both categories of subjects, indicated that

improved fringe benefit programmes will increase their level of commitment in their

organization. They represented 87.93 of the respondents. 13 representing 7.47% of the

respondents indicated that improving fringe benefits programmes will not affect hei r

level

of commitment, while 8 representing 4.60% could not say their opinion on the issue.

4.4 FINDINGS ON ABSENTEEISM AND TURNOWK

The first question in this section was aimed at finding out the rate of absenteeism

among the workers (respondents). The responses obtained are recorded in Table 4.4a.

An analysis of the responses obtained reveals that majority of the subjects have

been absent from work at one time of the other, as was.

Table 4.4a "Have you ever been absent from work?"

11 Response Options I Managrial Staff I I 0penlives I I Grand I R n k 11

Table 4.4b

Indicated by 132 of the respondents in both categories, represent 75.86% of the

subjects. 13.22% of the respondents indicated that they have never been absent from

work, while the same percentage of the respondents, 10.92%, indicated that they cannot

remember whether they have been absent from work or not.

The next question in the section was aimed at further verifying the extent of

absenteeism among the respondents. The response obtained are recorded in Table 4.4b)

Table 4.4b . "If the answer to (1) is 'Yes', how frequent is it?"

Response Options I Managerial

Often

Iusr on a Few Occas~on 1 Total

The response to the question of Table 4.4b shows that majority of the respondents

Staff

Snior Staff

3

17

who indicated 'yes' to the first question have only been absent on a few occasion.

95.83 % of such respondents indicated so. Therefore, the poor fringe benefit schemes of

Total

1 1

---

the firms may not necessarily be connected to the incidents of absenteeism among the

workers.

R a n %

6.25

The next question was intended to find out why the respondents may want to leave

their firms if they were to do so. The responses gathered are recorded in Table 4 . 4 ~ . I

Table 4 . 4 ~ . "If you are to leave your organization, which of the following would

Operatives

Junior Staff

12

be the major reason?"

II Manager Senior Staff Tohl Rate % I I I I

Rate %

3.57

Insufticienr Pay 4 6 10 29.41

lnsufficienr 5 4 9 26.47 Fringe Benefit

11 Advancement I

Grand

Total

3

11 Frustration 1 3

Rate

(%)

4.17

Operatives

Junior Staff

37

Rare %

Grand

Total

47

48

36

43

174

Rate

(%)

27.01

17.59

20.69

24.71

100

From the responses recorded in Table 4.4c, majority of the respondents gave

'insufficient fringe benefits' as the major reason why they would leave their organsition.

The response rate here was 27.59%. This is followed by 'insufficient pay with a rate

of 27.01%, 'frustration' with a rate of 24.71%, and finally, 'no prospect for

advancement' with a rate of 20.69%. It may be assumed from these results that fringe

benefits may be related to manpower turnover in the hotel and catering industry. This

is further supported by the responses to the next question which was aimed at finding out

if the respondents would have Ieft their organization if the level of fringe benefits was

very low. The responses gathered are recorded in Table 4.4d.

Table 4.4d "Would you have left the organization if the level of fringe benefits

was very low?"

Manageria! Staff I ~ p c n ~ i v r s I I

Yes I r i I 1 1 I 2 2 164.71 ( 1 2 2

Manager I Senior Sraff 1 Total I Rate % J ~ ~ n i o r Staff

From the responses, it is clear that fringe benefits have some relationship with

turnover. The nature of this relationship wit1 however be examined in the next segment

of this chapter.

144 of the respondents in the two categories indicated that they would have left

their organization if the existing fringe benefits level was very low. This represents

87.76% of the subjects. 14 of the respondents representing 8.04% of the subjects

indicated to the contrary, while 16 representing 9.20% could not say their opinion on the

No

I can't say

Total

2

4

17

I

5

If

3

9

34

8.82

26.47

100

11

7

140

issue.

4.5 FINDINGS ON EMPLOYEE MORALE

The first question in this section was to find out how the empIoyees feel working

in their various organizations. The responses to the question are summarized in Table

4.5a.

Table 4.5a: "Do you feel Satisfied Working in your Organization?"

Managerial Staff I 1 I Manager I Senior Sraff

Yes I 10 1 4

I don't Know 1 2 1 1

Total

Total

1 operatives 1 1 ~r imci

Rare % Junior Staff Rate % Total

The responses in Table 4.5a reveals that majority of the respondents do not feel

satisfied working in their organization. Almost half of the respondents (ie. 50%)

indicated this. 67 of the respondents representing 38.51% of the subjects indicated that

they are satisfied working in their firms, while 20 of the respondents representing

11.49% of the subjects could not say their opinion on the issue.

The next question in this section was aimed at finding out the respondents

perception of their organizations fringe benefit schemes. The responses are recorded in

Table 4.5b.

17 17

Table 4.5b: "How do you perceive the fringe benefits schemes provided in your

Organization?"

Response Options I

I] Satisfactory 1 3 1 2 1 5

Very Satisfactory

Manager

fus! Adequate

Unsatisfactory

Operatives . el Very Unsatisfactory

Total

From the responses in Table 4.5b, it could be seen that majority of the

respondents perceive their fringe benefits schemes as unsatisfactory. 115 of the

respondents representing 66.09% of the entire subject indicated this. 47 of the

respondents representing 27.01% of the subjects perceive their organizations fringe

benefits schemes as just adequate, while 12 of the respondents representing 6.60% of the

subjects perceive their organization's fringe benefits schemes as satisfactory. None of

the respondents perceive their organizations fringe benefit schemes as very satisfactory

or very unsatisfactory.

The results show that the empIoyees may not be impressed by the level of fringe

benefits schemes in the industry, and this will likely be affecting their level of

performance.

The next question posed at the respondents was aimed at finding out their attitude

towards their organization and its goals. The responses obtained are recorded in Table

4 . 5 ~

Senior Staff

4

10

Toral

- 17

4

I I

8

2 1

17 34

62

Table 4.5~. "What is your attitude to your organization and it's goals?"

Response Options Managerial Staff I I I Manager 1 Senior Staff

Favourablelnot very 3 7 strong

FavwrabIdSometim es Hostile

Total

From the responses recorded in Table 4.5c, majority of the respondents indicated

that their attitude to their organization was sometimes faveurabIe and sometimes hostile.

88 of the respondents representing 50.57% of the subjects indicated this. 52 of the

respondents representing 29.89% of the subjects indicated that their attitude towards their

firm and it's goals was favourable but not very strong. 26 representing 14.94% indicated

that their attitude towards their firm was hostile.

It is however felt that if the fringe benefits schemes of these organizations are

fantastic, majority of the respondents would have indicated favourable attitude towards

their organization and its goals. This perception is further strengthened by the responses

to the next question which was aimed at finding out whether provision of fringe benefits

affect the respondents (employees) performance. These responses are summarised in the

table 4.5d.

Table 4.5d "Do you think that improved fringe benefits schemes will affect your

job performance"?

Response Options

Yes

No

1 don't Know

From the responses recorded, it was obvious that improved fringe benefit schemes

will affect the job performance of the respondents. All the respondents representing

100% of the subjects indicated this. To find out the nature of this effect whether positive

or negative, the next question was posed at the respondents. The responses to the

Total

question are recorded in table 4.5e.

Table 4.5e. "If the answer to '4' is yes, how?

Managerial Staff

17

From the responses recorded, it was clear that improved fringe benefit schemes

will psoitively affect the job performance of the respondents as is indicated by 100% of

them.

Total

25

4

5

Manager

I1

3

3

-

Senior Slnff

14

1

2

17

Rate %

76.48

11.76

11.76

34 100

Response Options

Positively

Negatively

Total

Operatives

Junior Staff

128

9

3

-

Rate %

100.00

100

140

Rate %

91.43

6.43

2.14

100 I74 100

Total

34

34

Operatives

Junior Staff

140

140

Managerial Staff

Manager

17

17

Grand

Total

153

13

8

Rate %

100

100

Scnior Stalf

17

17

Rare

(%)

87.93

7.47

4.60

Grand

Total

174

174

64

4.6 TElFTING OF HYPOTHESES

In this segment of the chapter, attempt was made to test the hypotheses formulated

to guide data collection in the field. These research-problem-oriented hypotheses

(alternative hypotheses) were re-structured to statistically oriented-hypothesis (null

hypothesis) to enable the use of statistical technique in verifying them.

Chi-square technique was employed to verify the hypotheses.

The chi-square formula is given as:

X2 = (Fo - Fe)' Fe

Where, Fo = observed frequency Fe = expected frequency

Decision Rule

The criteria for accepting or rejecting the null hypotheses (H,) are:

Accept Ho if X2, S X2, ie X2 calculated 5 X2 tabulated

Reject H, if X2, 2 X2, ie X2 calculated 2 X2 tabulated

This means accept the null hypothesis if chi-square calculated is less than or equal

to expected chi-square and reject the null hypothesis if the chi-square calculated is greater

than or equal to expected chi-square. The level of significance (a) used was 5% or 0.05.

Hypothesis One

Null Hypothesis (H,): Fringe benefits are not helpful in attracting

employees to the Hotel and catering industry.

Alternative Hypothesis (H,): Fringe benefits are helpful in attracting employees

to the Hotel and Catering industry.

This hypothesis was tested using table 4.2b

Table 4.2b

i) Operatives

i) Managerial Staff

Response Options r==

r

Fringe Benefirs

The jab itself

1

To avoid idleness 117

Response Optims

Basic Salary

Fringe Benefits

Working Cordilion

TXe job itself

To avoid idleness

Toral

Observed Frequency (Fb) Expected Frequency (Fe} (Fo - Fe) (Fo -Fe)' l -T-

Expected Frequency {Fe)

9.77

18.95

1 .56

2.54

1.17

Observed Frequency (Fo)

I D

f 4

5

3

2

34

-

X2 calculated = 2.3 154

For calculations of the expected frequency values refer to Appendix iv, table 4.2b

Degree of freedom = (c - 1) =(5 - 1) (2 - 1)

Level of Significance (a) = 0.05

$Fo - Fe)

0.23

-4.95

3.44

0.46

0.83

(Fo -Fell

0.0329

24.5025

11.836

0.21 16

0.6889

(Fo - Fe)' Fe

0.0054

1.2930

7.5856

0.0833

0.5888

9.5561

Chi-square (X2) caIcu!ated: Managerial Staff= 9.5561 Operatives = 2.3154

Chi-square (X2) tabulated =

Acceptance Region

Total 11.8715 9.488

rejection region

X2 calculated > X2 tabulated (18.36) (9.488)

Decision: Reject the null hypothesis (H,)

Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2

tabulated. Otherwise do not reject, the null hypothesis which says that, "Fringe benefits

are not helpfit1 in attracting employees to the Hotel and Catering industry", was rejected

and the alternative hypothesis which says that "fringe benefits are helpful in attracting

employees to the Hotel and Catering industry was accepted based on the fact that:

X2 calculated > XZ tabulated

(18.36) (9.488)

Conclusion:

The research problem oriented hypothesis (H,) was accepted in favour of the

statistically oriented hypothesis (H,). Therefore the assertion that fringe benefits are

helpfuI in attracting employees to the Hotel and Catering industry is correct.

Hypothesis Two

Null Hypothesis (H,): Fringe benefits are not helpful in retaining

employees in the Hotel and catering industry.

Alternative Hypothesis (13,): Fringe benefits are helpfut in retaining employees

in the Hotel and Catering industry.

This hypothesis was tested using table 4 . 2 ~

Table 4 . 2 ~

i) Manageria! Staff

For calculations of the expected frequency values refer to Appendix iv, table 4.2b

I Response Options

Yes

No

1 don't know

Toral

i i) Operatives

Degree of freedom = (c - 1) =(3 - 1) (2 - 1) =2.1= 2

Level of Significance (a) = 0.05

X2 calculated = 6.4743

Observed Frequency (Fo)

30

3

1

34

+

X2 calculated = 1 .S684

Respnse Options

Yes

NO

I don't know

Toral

Expected Frequency (Fe)

32.03

0.78

1.17

Observed Frequency (Fo)

134

1

5

34

Expected Frequency (He)

131.95

3.22

4.83

(Fo - Fe)

-2.05

2.22

4 1 7

(Fo - Fe)

2.05

-2.22

0.17

(Fo -Fe)z

4.2025

4.9284

0.0289

(Fo - Fe)' Fe

0.0318

1.5306

0.0060

1.5684

(Fo -Fe)z

4.2025

4.9284

0.0289

(Fo - Fe)l Fe

0.1311

6.3 185

0.0247 - 6.4743

Chi-square (X2) calculated: Managerial Staff= 6.4743 Operatives = 1.5684

Total 8.0427

Chi-square (X2) tabulated = 5 .XU47

Acceptance Region

X2 calculated > X2 tabulated (7.28) (5.991)

Decision: Reject the null hypothesis (H,)

Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2

tabulated.

Otherwise do not reject, the null hypothesis which says that, "Fringe benefits are not

helpful in retaining employees in the Hotel and Catering industry", was rejected, and the

alternative hypothesis which says that "fringe benefits are helpful in retaining employees

in the Hotel and Catering industry was accepted based on the fact that:

X* calculated > X2 tabulated (7.28) (5.991)

Conclusion:

The research probIem oriented hypothesis (H,) was accepted in favour of the

statistically oriented hypothesis (H,). Therefore the assertion that fringe benefits are

helpful in retaining employees in the Hotel and Catering industry is correct.

Hypothesis Three

Null Hypothesis (H,): There is no direct relationship between fringe

benefit 'packages' and employees level of

committment . Alternative Hypothesis (H,): There is a direct relationship between fringe benefit

'packages' and employees level of cornmittment.

To test this hypothesis we used table 4 . 3 ~

Table 4 . 3 ~

Xz calculated = 9.2278 i) Operatives

i) Managerial Staff

Response Options

Yes

No

I don't know

Total

Observed Frequency (Fo)

25

4

5

34

Response Options

Yes

NO

I don't know

Toral

XZ calculated = 9.2278

Expected Frequency (Fe)

123.10

10.46

6.44

Obscned Frequency (Fo)

128

9

3

I 40

Expected Frequency (Pe)

29.9

2.54

1 S 6

(Fo - Fe)

4.9

- I .46

-3.44

(Fo - Fe)

-4.9

1.46

3.44

(Fo -Fe)'

24.01

2.1316

1 1.8336

(Fo -Fe)'

24.01

2.1316

11.8336

..- ~

(Fo - Fe)l Fe

0.1950

0.2038

1.8375

2.2363

(Fo - Fe)' Fe

0.8030

0.8392

7.5856

9.2278 - -

For calculations of the expected frequency values refer to Appendix iv, table 4 . 3 ~

Degree of freedom = (c - l )=(r - 1)

Level of Significance {a) = 0.05

Chi-square (X2) calculated: Manageria! Staff= 9.2278 Operatives = 2 -2363

Total 11.4641 Chi-square (X2) tabulated = 5.99147

Acceptance Region

rejection region

X2 = 5.991 a = 0.05 X2 calculated > X2 tabulated

Decision: Reject the null hypothesis (H,)

Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2

tabulated,

Otherwise do not reject, the null hypothesis (H,) which says that, "There is no direct

relationship between fringe benefits 'packages' and employees level of committments",

was

7 1

rejected, and the alternative hypothesis which says that, "There is a direct relationship

between fringe benefits 'packages' and employees level of committment" was accepted,

based on the fact that:

X2 calculated > XZ tabulated

(10.59) (5.991)

Conclusion:

The research problem oriented hypothesis (H,) was accepted in favour of the

statistically oriented hypothesis (H,). Therefore, there is a direct relationship between

fringe benefits 'packages' and employees level of committment.

Hypothesis Four

Nu11 Hypothesis (HJ: Absenteeism among the workers will not tend to be

inversely related to the firms level of fringe

benefits.

Alternative Hypothesis (H,): Absenteeism among the workers will tend to be

inversely related to the firms level of fringe benefits.

Table 4.4a was used to test this hypothesis

Table 4.4a

i> Managerial Staff

Response Options

Yes

No

1 Can't Remember

Total X i calculated = 0.1955

Expected Frequency (Fe)

25.79

4.49

3.71

Observed Frequency (Fo)

26

5

3

34

(Fo - Fe)

0.21

0.5 1

-0.71

(Fo -Fe)'

0.0441

0.2601

0.5041

(Fo - Fe)I Fe

0.0017

0.0579

0.1359

U. 1953

For calculations of the expected frequency values refer to Appendix iv, table 4.4a

Degree of freedom = (c - 1) =(r - 1)

(3 - 1)(2 - 1) 2.1 = 2

ii) Operatives

Level of Significance (a) = 0.05

Chi-square (X2) calculated: Managerial Staff = 0.1955 Operatives 0.0475

Total 0.2430

Response Options

Yes

N O

I Can't Remember

Total

Chi-square (X2) tabulated = 5

X2 calculated = 0.0475

(Fo -Fe)'

0.0441

0.2601

0.5041

rejection region X2 = 5.991 cx = 0.05

(Fo - Fe)z Fe

0 . W 4

0.0141

0.0330

0.0475

Observed Frequency (Fo)

106

18

16

140

X2 calculated > X2 tabulated (5.06) (5.991)

Expected Frequency (Fe)

106.21

18.51

15.29

(Fo - Fc)

-0.21

-0.51

0.71

Decision: Reject the null hypothesis (H,)

Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X*

tabulated, Otherwise do not reject, the null hypothesis (H,) which says that,

"Absenteeism among the workers will not tend to be inversely related to the firms level

of fringe benefits" was not rejected, but accepted based on the fact that.

X2 calcuIated > X2 tabulated (5.06) (5.991)

Conclusion:

The statisticalty oriented hypothesis @I,) was accepted in favour of the research

problem oriented hypothesis. Therefore, absenteeism among the workers is not related

to the firms level of fringe benefits.

Hypothesis Five

Null Hypothesis (Ha: Manpower turnover in the Hotel and Catering industry wil[ not

tend to be inversely related to the firms level of fringe benefits.

Alternative Hypothesis (H,): Manpower turnover in the Hotel and Catering

industry will not tend to be inversely related to the firms level of fringe benefits.

Table 4.4d was used to test this hypothesis

Table 9.46

i) Managerial Staff

11 Response Opiona I Obwrved Preq~cricy (Fo) I ExP(cLI Frequency (K) I (FO - FI) I (Fo - P c ) ~ I (Fo - Fe).

Total 34 19.56

X2 calculted = 12.3730

ii) Operatives

X2 calculated = 3.0086 For calculations of the expected frequency values refer to Appendix iv, table 4.4a

Response Options

Yes

NO

I Can't Say

Total

Degree of freedom = (c - I)=@ - 1) (3 - 1)(2 - 1) 2.1 = 2

Level of Significance (a) = 0.05

Observed Frequency (Fo)

122

11

7

174

Chi-square (X2) calcu1ated: Managerial Staff= 12.3730 Operatives 3.0086

Total 15.3816 Chi-square (X2) tabulated = 5 .!I9147

Acceptance Region

Expected Frequency (Fe)

115.86

11.26

12.87

rejection region

(Fo - Fe)

6.14

-0.26

-5.87

(Fo -Fe)Z

37.6996

0.0676

34.4569

(Fo - Fe)2 Fe

0.3253

0.0060

2.6773

3.0086

X2 calculated > X2 tabulated (19.56) (5.991)

Decision: Reject the null hypothesis (H,)

Since the decision rule is to reject the null hypothesis if X2 calculated 2 X2

tabulated,

Otherwise do not reject, the null hypothesis (H,) which says that,

"Manpower turnover in the Hotel and catering industry will not tend to be inversely

related to the firms level of fringe benefits" was rejected, while the alternative hypothesis

(H,) which says that, "Manpower turnover in the Hotel and Catering industry will tend

to be inverseIy reIated to the firms level of fringe benefits", was accepted based on the

fact that

X2 calculated > X2 tabulated

(19.56) (5.991)

Conclusion:

The research problem oriented hypothesis (H,) was accepted in favour o f the

statistically oriented hypothesis (H,). Therefore, the assertion that manpower turnover

in the Hotel and Catering industry will tend to be inversely related to the firms level of

fringe benefits is correct.

Hypothesis Six

Null Hypothesis (H,): Better fringe benefits 'packages' do not have a positive impact on

the workers morale.

Alteruative Hypothesis (H,): Better fringe benefits 'packages' have a positive impact on

the workers morale. This hypothesis was tested using table 4.52

Table 4 . 9

0 Managerial I I I

Response Options I Observed Frequency I Expected Frequency (Fe) ( (Fo - Fe)

Favourable not very strong 10 10.16 -0.16 I I I

Favourable 4 5.08 -1.08

Favourable Hostile I 1s 1 17.20 1 -2.20

I I I

Hostile 5 1.56 3.44

Total

Degree of freedom = (c - l )=(r - 1)

il) Operatives

X1 ca

34

Respvnse Options

Favwrable

Favourable not very strong

Hostile

Favourable Hostile

Total

-

X2 calculated = 1 .!I623 For calculations of the expected frequency values refer to Appendix iv, table 4 . 5 ~

Observed Frequency (Fo)

22

42

3

73

140

Expected Frequency (Fe)

20.92

41.16

6.44

70.80

(Fo W)

1.08

0.16

-3.44

2.2

(Fo -Fey

1 .I664

0.0256

11.8336

4.84

4Fo - Fe)l Fe

0.0558

0.0006

1 .a375

0.0684

1.9623

Level of Significance (a) = 0.05

Chi-square (X2) calculated:

Acceptance Region

rejection region

X2 calculated > X2 tabulated (29.72) (7.815)

Decision: Reject the null hypothesis (H,)

Since the decision nhe is to reject the null hypothesis if X2 calculated 2 X2 tabulated,

Otherwise do not reject, the null hypothesis (H,) which says that, "Better fringe benefits

packages do not have a positive impact on the workers morale" was rejected, and the

ahernathe hypothesis which says that, "Better fringe benefits packages have a positive

impact on the workers morale", was accepted based on the fact that X2 calculated >

X2 tabulated

Conclusion:

The research problem oriented hypothesis (H,) was accepted in favour of the

statistically oriented hypothesis (H,). Therefore, better fringe benefit packages will have

a positive impact on $e morale of the workers in the Hotel and Catering industry.

CHAPTER FIVE

SUMMARY RECOMMENDATION AND CONCLUSION

Having presented and analysed the data collected, and as well tested the

hypothesis in the previous chapter. The researcher in this last chapter of the work gives

a summary of the study, make some recommendation and draws some concIusions.

5.1 SUMMARY

This research study was prompted by the need to investigate an aspect of the

problem identified as militating against better performarlce by workers in the Hotel and

Catering industry in Nigeria, with the aim of establishing and assessing the extent of the

problem. An interpretative analysis of the data collected during the study resulted in the

major findings which are summarked below.

Summary of Major Findings

Guided by the objectives of this study, the major findings of the study are

summarized as folIows:

1) The Hotel and Catering industry in Nigeria do not really parade a good range of

benefit schemes for their employees.

2) Even the existing fringe benefit schemes are in a very poor state as they are not

reviewed from time to time, and are in inost cases ignored and not made available

to the workers. This has resulted to inability of the industry to attract, retain and

actuate personnel effectively and efficiently (see table 4.2b, 4 2 , 4.26).

3) The study revealed that a high percentage of the workers are not satisfied with

their present fringe benefit packages, and this has been affecting their

commitment to work (see table 4.3a, 4.3b and 4 3 ) .

3)

4)

5 )

6 )

i)

ii)

iii)

5.3.

80

As a way of enhancing better performance among the workers, some aspects of

these benefits should be earmarked for workers who perform exceptionally well

during a period.

Government monitoring agency should be set up to determine what the legally

required benefits should be, and ensure that all firms in the sector do colnply in

implementing them.

Efforts should be made to communicate what these benefits are to the workers

and also engage them in the process of determining what and what should come

under the 'package'.

The following factors should also be taking into consideration in implementing the

fringe benefit schemes:

There should be a base of satisfactory wage or salary, hours and working

conditions.

There should be a need for whatever should come under the package for it to be

appreciated by the workers.

Adequate plans should be made for the financing of the programme.

Conclusion

This study has attempted to appraise the impact of fringe benefits on the

performance of workers in the Hotel and Catering industry. By so doing, it has been able

to establish that poor fringe benefit schemes could serve a an impediment to better

performance by the workers, and consequently be a hinderence to the growth and

development of the sub-sector.

It has investigated the issue of attraction, retention and actuation of personnel in

the Hotel and Catering industry through the use of fringe benefits. In addition, it has

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Newspaper Articles Adeoye, J.P. "The Place of Hotel and Catering Industry in Tourism Development". New Nigeria. May 24, 1977. P. 11

Agbetuyi, S. "How to revive Nigerian Economy". Business Guardian. September 28, 1998, p.25

Ekundayo, C. "Review of Workers Fringe Benefit ". Daily Times February 23, 1988, P. 11

Ifedi, C. "Revamping the Hotel Industry". Dailv Times. January 7, 1986, P.3

Obadafin, E. "Minimum Wage, Frequent Tax Payment". Daily Times November 21, 1998, P.5

Onyia, M.U. "Why the neglect in Hotel and Tourism". Observer. June 29, 1986, P.3

Shu'aibu M.K. "Hotel and Catering Services in Nigerian Economy". New Nigeria . June 26, 1979, p.12.

APPENDIX I INSTRUMENT A

INTERVIEW GUIDE

What is the number of people employed in your organization?

Do you have a personnel department?

Do you offer fringe benefits to your employees?

How do you instal fringe benefits in your organization?

i) A committee made up of management only is set up. ii) Management and trade Union representative form a committee. iii) Employees opinions are sought individualIy to know their preference. iv) Others

Do; you communicate the type of benefits available to your employees?

Does your organization from time to time conduct research on the type of items to be include in employee fringe benefits?

What problem do you have in dealing with the employees concerning their fringe benefits?

Which of the following fringe benefits does your company offer? Christmas bonus Leave allowance pay sick Ieave with pay Car loan Transport allowance House loan House rent allowance Pension (retirement pay pay) Free meals Subsidized meal Free medical service Life insurance Suggestion bonus Education aids Musics with work Others, specify.

APPENDIX I1 INSTRUMENT B

QUESTIONNAIRE

Dear SirIMadam,

Department of Management ~ n i v e r s i t ~ of Nigeria Enugu Campus December, 1998.

I am an MBA Student of the Department of Management, University of Nigeria, Enugu Campus. I am conducting a research work on the Impact of fringe bellefits on the performance of workers in the Hotel and Catering industry.

I will be very grateful if you could spare your time to frankly and honestly provide answer to the questions that follow. It is purely an academic research exercise, and has nothing to do with government or other interests. I assure you that all information will be treated in strict confidence.

Thanks for your cooperation.

Your Faithfully, Okpala Anthony U. (Researcher) PGlMBA119795

Please tick '[I' or 'X' in the box provided against the answer considered to be the correct one.

Consider alternative answer before ticking, and tick as many as apply.

SECTION A Employee attraction and retention

1. Why do you work? (a) To avoid idleness [ I (b) For recognition [ ] (c) For money [: ] (d) To forge ahead in life [ ] (e) To contribute to national development [ I

2 . What attracted you to seek for employment in this organization? (a) Basic salary [ ] (b) Fringe benefits [ ] (c) Working condition [ ] (d) The job itself [ ] (e) To contribute to national development [ ]

3. Would you leave for another organization with better fringe benefits schemes if such an opportunity presents itself? (a) Yes [ I (b) No [ I (c) I don't know [ ]

4. What do you consider the most important aspect of your remuneration? (a) Basic salary [ ] (b) Fringe benefits [ ] (c) I don't know [ ]

SECTION B

Employee Level of Committment 1. Are you satisfied with your organization fringe benefits schemes?

(a) Yes r I (b) No r I (c) I don't know [ I

2 . What level of committment do you show to your work in the organization? (a) High [ I (b) Low t I (c) Average [ ]

3 . Do you think that improved fringe benefits schemes irt your organization will increase your level of committment? (a) Yes [ I (b) No [ I (c) I can't say [ ]

SECTION C Absenteeism and Turnover

1. Have you ever been absent from work? (a> Yes [ I Co) No r I (c) I can't remember [ ]

2. If the answer to (1) is Yes; how frequent is it? (a) Often [ ] (b) Very often [ ] (c) Just on a few, occasion [ ]

3. If you are to leave your organization, which of the following wwld be the major reason/ (a) Insufficient pay [ ] (b) Insufficient fringe benefits [ ] c) No prospect for advancement [ ] (d) Frustration [ ]

4 . Would you have left the organization if the Ievel of fringe benefits was very low? (a) Yes [ I (b) No [ I (c) I can't say [ ]

SECTION D Employee Morale

1. Do you feel satisfied working in your organization? (a) Yes I I (b) No [ I (c) I don't know [ I

2. How do you perceive the fringe benefits schemes provided in you organization? (a) Very satisfactory [ ] (b) Satisfactory [ ] (C) Just adequate [ ] (d) Unsatisfactory [ ] (e) Very unsatisfactory [ ]

3. What is your attitude to your organization and its goal? (a) I like the firm with my whole heart and would always like to help the firm achieve its goals [ ] (favourable) (b) My attitude to the firm is favourable but not very strong. [ ](fvourable/not very strong) (c) My attitude to the firm is hostile [ ](hostifc) (d) Sometimes my attitude is favourable, sometimes it is hostile [ ](favourable/hostile)

4. Do you think that improved fringe benefit schemes wilt effect your job performance? (a) Yes [ I Co) No [ I (c) I don't know [ ]

5) If the answer to '4' is yes, how? a) Positively 1 1 b) Negatively [ 1

SECTION E Respondent profile

1. Education qualification? (a) B- Sc. [ ] (b) Diploma [ ] (c) GCEtWASC [ ] (d) First school leaving certificate [ 1 (e) Others [ ]

2. Age bracket? (a) Under 20 [ ] (b) 20-29 Years [ ] (c) 30-29 Years [ ] (d) 40-49 Years [ ] (e) above 49 Years [ ]

3. Sex? Male f ] Female [ ]

4. Marital status? Married [ ] Single [ ]

5. To which of the following organizational cadre do you belong? (a) Manager [ ] (b) Senior staff [ ] (c) Junior staff [ ]

6. How long have you worked in your organization?

APPENDIX 111

CALCULATION OF EXPECTED FREQUENCY VALUES

Expected Frequency (Fe) - -

Table 4.2b

Cell - 1)

2)

3

4)

5)

Table 4 . 2 ~

Cell - 1)

2)

3)

Where, RT = CT = GT =

Managerial Staff

Managerial Staff

Row Total Column Total Grand Total - = 174

Operatives

Operatives

Table 4 . 3 ~ Managerial Staff Operatives

Cell - 1)

Table 4.4a Managerial Staff Operatives

Table 4.4d Managerial Staff Operatives

Table 4.5~ Managerial Staff

Cell Operatives