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THE EFFECT OF ENHANCED SALARY IMAGES STRUCTURE ON EMPLOYEES PERFORMANCE

ABSTRACT

The focus of this study is to take a critical look at "how improved remuneration increment can affect performance input or productivity" with particular reference to various cadre of staff of Lagos State University, Ojo Campus. The literature review of the definition, what constitute a salary wage remunerator allowances, fringe benefit as well as the similarities and differences, if there are any, in this terms was embarked upon. Also, examined are the history and system of remuneration impact of remuneration increase on workers psycho-socio-economic wellbeing, as well as workers values. In an attempt to critically examine, investigate and substantiate the effect of salary/wage Increase on performance five hypotheses were postulated. Questionnaires were designed and tested using chi-square. The five hypotheses tested were upheld, as they all lend credence to the fact that enhanced remuneration has a positive significance bearing on productivity. Based on the findings recommendations were made and suggestions proffered.

CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

Human existence is logically based on work. Existence relates to satisfaction of different types of materials arid bodily needs or wants. Thus, the ultimate aim of working is to an individual needs, which implies that benefits, monetary reward and physical environment of work are essential to the wall being of workers. They also form parts of the attributes used in assessing how successful or unsuccessful an individual is, because the society appraises him in line with his life style and achievement. Work is an essential part of human existence, we all live to work, either for or as a source of living. Every worker gets either a salary or wages depending on his/her type of condition on employment. Wages and salary are often discussed in loose sense, as they are used interchangeably. But the International Labour Organization (ILO) (1995) defined the term wage as remuneration paid by the employer for service of hourly, daily, weekly and forth nightly employees". On the other hand, Rao and Rao (1995) defined salary "as the remuneration paid to the clerical, and managerial personnel employed a monthly or annual basis".

From the above, one could see that the basic difference between wages and salaries (if any) is the kind and duration or employment. However, the distinction between salary and wage does not seem to be valid in these modern days of scientific human resource approach to management where all employees are treated as human resources. Hence these two terms i.e. (salary and wages) are capable of being mutually substituted for one another. Coupled with this the introduction of various types of fringe benefits (e.g. Lagos State University gives to its workers the following allowances, Transport, Rent, Responsibility, Meal, Entertainment, Utility, Journal, Research, Examination Supervision, Learned Society, Hazard Teaching/Industrial Supervision call duly. leave allowance etc.) has made it necessary to use "remuneration and compensation to describe the total benefit accruing to an employee for his service and the actual cost of such service to his employer. Therefore, for the purpose of this study, wages and salary, or remuneration shall be used interchangeably and would be taken to mean the same thing.

One of the important duties of modern managers is to get things done through people. They have to bring employees into contact with the organization in such a way that the objectives of both groups are achieved. He must be interested in the people, the work and the achievement of assigned objectives. To be effective, he must balance his concern for people and work. In other words, he must know how to utilize human as well as non-human resources while translating goals into action. It is in managing human assets that the manager's capabilities are tested fully because, human resources are heterogeneous. The Lagos State University consist of many different individuals each of whom has a unique personality, a combination of different emotional responses to different stimuli and different values, attitude, motives, mode of thought, in which has a consideration bearing in determining what he contributes toward the success of an organization. If he is motivated, he will work for an organisation more effectively and efficiently.

Rao and Rao (1995) asserted that the development and administration of sound wage and salary policies are not only important but also complex managerial functions. The complexities stem from the fact that on the one hand, a majority of union management problems and disputes relate to the question of wage payment and on the other, remuneration is often one of the largest components of cost of production. Thus it influences the survival and growth of an organisation to the greatest extent. (Rao and Rao, 1995). The early Need theories like Applewhite (1965) and Alderfer (1969) were of the opinion that an increase in pay cannot satisfy all man's need. Hence, no increase in pay will motivate the individual to work for psychological returns which are not forth coming with monetary reward. And that salary decision made that provides one person or group of people with more pay eliminates the possibility of some person or group getting extra money. This property of existence needs frequently means that a person's or group's satisfaction beyond a bare minimum depends upon the comparison of what others get in the same situation. (Applewhite,1965 and Alderfer, 1969).

It is also generally accepted that wages must bear some relationship to productivity, since any divergence of the two variable can cause either inflation of unemployment. But the most interesting development in wage determination has been productivity standard (job performance). The simple correlation is based on the fact that employee's satisfaction will result in an increase in productivity or job performance and contribution to the organization. Ironically, the concept of determining or measuring the level individual input or performance in an organization has always been puzzling and very difficult to determine in more cases, unless standards and quantifiable criteria are established. Level of commitment or loyalty to an organization can also have effect on job performance. It is a known fact that commitment cannot be divorced completely from workers satisfaction. Ames (1982) in relating level of commitment to teaching was of the view that teachers can range from low to high in their commitment to excellence, depending on degree of motivation. This argument can be generalized to all work and workers' satisfaction. (Ames, 1982).

Ejiogu (1985) while analyzing job satisfaction and performance as it relates to teaching after due examination of "satisfaction causes performance" and "performance causes satisfaction" propositions, contended that measures of performance or productivity are very difficult, mostly because of the extended period of the return on investment in education and the problem in isolating the individual teacher's contribution towards children's education. (Ejiogu,1985).

1.2     STATEMENT OF THE PROBLEM

Remuneration policies in Nigeria are generally governed by the prevailing social, economic and political decisions. The earliest evidence of the development income recommended the establishment of National Wages Advisory Council to observe, co-­ordinate and advice on all aspects of the national wage policy. A landmark was reached concerning income policy when the Second National Development Plan (1970-71), argued that the absence of an income policy can negate other development efforts and lead to social frustrations.

The main problematic issues being addressed in this study centres on the continued decrease in the level of motivation and productivity in most Nigerian organizations both private and sector/organizations. Thus, the recent development in the economy have called for these major objectives of salary/wages package to be filed as one in preference to the other or could the work atmosphere be smooth in the absence of one. Therefore for any organisation to meet its aim, profit, growth and survive there is a greater need to devote more attention to the 'formulation of salary/wages administration policy of the organization and its impact on employee motivation towards productivity. The essence of this is that majority of the employees are somewhat concerned with bread and butter issues and the likes of this. However, meanings attached to the salary/wages administration policy in an organization are multifarious and this affect its success in achieving its goal to both the organization and the employee, this can largely be held responsible for the low performance or ineffectiveness of most salary/wages policies in many organizations.

Therefore, because of the complex nature of salary/wages administration, this research work will seek to find out the impact of salary/wages administration on employees: motivation. It is also aim at correcting the type of salary/wages administration mode available or operational in Insurance Industry and effectiveness of such compensation in keeping employees devoted to company's goals. Above all, this study will enable us to see what would be done to make the organisation's salary/wages administration plan to stimulate employees to be more committed and perform effectively for the achievement of the organizational goals. All these problems could be attributed to the fact that the appropriate policy planners are not well aware of the problems or they might have been misinformed. As this study suggests recommendations as solutions to remedy some of the problems highlighted in this section. Workers generally need material (monetary) incentives to perform and produce well, especially when they perceive that increased performance will result in increased benefits. Based on this fact, this research work will investigate the socio-economic and psychological effects of enhanced salary structure on job performance of staff of Lagos State University, Ojo.

1.3     OBJECTIVES OF THE STUDY

The main objective of this study is to investigate the perceived effect of enhanced salary structure on job performance of the staff of Lagos State University. Other specific objectives include:

1. To investigate both academic and non-academic staffs perceived impact of enhanced salary structure on their socio-economic status.

2. To investigate the extent to which the enhance salary structure has affected staff in-put and level of commitment to job performance.

3. To determine how enhanced salary structure in relation to job in-put and level of commitment to work affect staff productivity.

4. To analyze how salary structure can cause conflict between government and staff.

5.To examine how monetization acts as effective tools towards salary stabilization.

1.4     RESEARCH QUESTIONS

1. What are the effects of effects of enhanced salary structure on job performance?

2. How do the University staff perceive enhanced salary structure in relation to their socio-economic status?

3. To what extent has enhanced salary structure affected staff input and level of commitment to job performance?

4. Can effective salary structure cause conflict between government and staff?

5. Can concept of monetization acts as effective tools towards salary stabilization?

1.5    RESEARCH HYPOTHESES

1. Ho: There is no significant indicator that enhanced salary structure is a motivator of job performance.

H1: There is significant indicator that enhanced salary structure is a motivator of job performance.

2. Ho: There is no significant relationship between staff perceived effects of enhanced salary structure and socio-economic status.

H1: There is significant relationship between staff perceived effects of enhanced salary structure and socio-economic status.

3. Ho: There is no significant relationship between staff perceived effects of enhanced salary structure on input and level of commitment to job performance.

H1: There is significant relationship between staff perceived effects of enhanced salary structure on input and level of commitment to job performance.

4. Ho: There is no correlation between salary structure and conflict between government and staff.

H1: There is correlation between salary structure and conflict between government and staff.

5. Ho: There is no significant relationship between the concept of monetization acts as effective tools towards salary stabilization.

H1: There is significant relation between the concept of monetization and salary stabilization.

1.6  SCOPE AND LIMITATIONS OF STUDY

The study is limited to Lagos State University, Ojo, where the researcher have easy interpersonal relationship with both academic and non-academic staff and easy access to records (salary schedules) of staff.

Although, to greater extent, the study can be generalized to other universities, inspite of differences in geographical location, since they all operated similar salary structure. Also, the time delimitation of these studies will be between 2004 to 2009 i.e. 5 years.

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