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THE IMPACT OF SALARY INCREASE AND FRINGE BENEFITS AMONG NIGERIAN WORKERS

Abstract

This project works was examined from all its ramification, what could be the possible effect of salary increase and fringe benefits among Nigerian workers. It is believed that when salaries and fringe benefits are increased, the aim is to alleviate the sufferings of workers in regards to increasing their purchasing power and meeting the high cost of living.  But, the consequence which will come quickly to mind is that many job will be lost and very little created. Employers will pay higher wages, but will do so at the cost of retraction in their labour force.  Those who have been desperate for job will sink further into desperation and more would join them through retrenchment.  In analyzing the affect on workers, the researchers carried out a research work at the Nigeria Railway Cooperation Enugu, where opinion of some workers are sampled.  By so doing, questionnaire and personal interview were used.  We equally examined the more dynamic aspect of wage and salary administration, showing the emergency of wage employment, salary structure, the responsibility for wage and salary and the method of fixed salaries and fringe benefits. The project also highlight the method for salary increase by workers and the probable side effects such as inflation, increase in price of commodities etc. Recommendations as to how the government could come to the aid of workers in minimizing the increase in prices of goods and services when salaries are increased are also discussed.

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

In any establishment either private or public, the impact of salary increase and fringe benefits cannot be over-emphasized.  To Nigeria Railway Corporation Enugu, satisfaction of the public and standard of living have been their major concern. The main objective has been the development and utilization of local raw material (coal) and mobilization of fund for the purpose of satisfaction of the Nigerians. In the bid to actualize this, the corporation finds it difficult and almost impossible to pay its workers the exact salary and pension at the appropriate time.  This as a result, leads to inefficiency since the workers are not motivated to carry out their functions effectively.  Facilities provided by the government are not being used and when it is used, they are not maintained properly, and the situation hinders development process.

The whole society is affected negatively by the poor performance of the railway corporation.  A business which involves bulky goods are slowed down because of the inadequate facilities used by the corporation in their operation.  This as a result may lead to scarcity of some important goods. The carriage of bulky goods by trailer is now move preferable than the use of train, since the railway corporation is inefficient.  Goods that are supposed to be carried by trains are now being carried by vehicles, which thereby creates obstruction in our roads. Presently, the corporation is not generating accurate revenue for the society, because the people who make use of the railway transportation are few. This discussion so far, means that the Railway Corporation is unable to achieve its objectives.

1.2   STATEMENT OF THE PROBLEM

It is well known fact that workers attempt to increase their salaries and wages directly by negotiating through a trade union, whereby the trade union threatens their employers to go on strike if they refuse to increase their salaries and fringe benefits. This economic impact of salary increase and fringe benefits on workers effects many workers both in the public and private sectors, and it can lead to increase in the rate of unemployment and thus, inflation.

1.3    PURPOSE OF THE STUDY

It is expected for any research work to provide answer to a particular problem.  In view of this, this project tends:

i. To examine the effect of salary increase and fringe benefits among Nigerian workers.

ii. To highlight the problems that are inherent in increasing the salaries of workers who work in the public sector.

iii. To identify and correct the environmental factor that affects the salary increase and fringe benefits of workers.

1.4   SIGNIFICANCE OF THE STUDY

This study is of great importance in the following ways:- By virtue of this study, it is needed most. Income and expenditure of an industrial sector would be determined, hence, the number of workers will also be accounted for.  This tells whether more workers are to be employed or deployed.

1.5   RESEARCH QUESTION

This study will attempt to answer various specific questions like:-

1. How you ever demanded for salary increase?

2. Have you enjoyed or been given any fringe benefit?

3. Has there ever been any trade dispute in the corporation?

4. Has the corporation recorded any demonstration work to rule strike action?

5. Was any damage done to the corporation?

1.6    RESEARCH HYPOTHESIS

Hypothesis One

Ho:    Fringe benefit are not helpful in attracting employees in an organization

H1: Fringe benefit are helpful in attracting employees in an organization

Hypothesis Two

H0: There is no direct relationship between fringe benefit package and employee level of commitment.

H2:There is direct relationship between fringe benefit package and employee level of commitment.

Hypothesis Three

H0: Records on workers demonstration action can not help to rule strike action off.

H0: Records on workers demonstration action can help to rule strike action off.

1.6   SCOPE OF THE STUDY

This project work is not directed at providing solutions at all problems that arise in corporation generally.  Rather, it is narrowed to the impact of salary increase and fringe benefits. 

1.8  Definition of Basic Terms

2.   Salary: Salary can be defined as a fixed payment at regular interval for service.  It is a payment made to workers for service rendered.

3. Wages: Wages are payment received from becomes obvious that man has to labour himself to the point of satisfaction in order to met up with the necessities of his life either in private or public sector as the case of railway corporation is concerned.

To buttress this statement, it is stated clearly in the theory of Douglas McGregor that “the expenditure of physical and mental effort in work is natural as play or rest”.  The average human being does not inherently dislike work.

i) This study will reveal how productivity can be effectively increased since an increase in salaries and fringe benefits of such production section will mentally increase the strength of workers, which enable them to work efficiently and effectively.

ii) To enable the researcher meet the requirement for the award of National Diploma in Business Administration and Management.

iii) With the aid of the study, an industrial sector either private or public, will know how and when the efficiency of their labour.

4. Fringe Benefits: Fringe benefits are payment other than wage or salary made to an employee such as pension, leave bonus insurance, etc.

5. Workers: A worker is a person who apply or contribute both physical and mental strength with the purpose of getting things done to achieve a particular objective in order to earn his living.

6. Public Sector: Public sectors are those infrastructural organizations fundamental to the natural economy, which the government decided to control in order to ensure a proper balance between social and commercial aims.  These organizations include: Nigeria Railway Corporation, Nigerian Post Authority, Nigerian Airways, National Electric Power Authority, etc.

7. Corporation: Corporation can be defined as an institution operating the service of an economic or social character on behalf of the government.

8. Corporation to manage and operate in accordance with the provision of this act, the railway undertaking transferred to the corporation by virtue of the provision of the Act.  These undertaking may include, any expansion or extension, construction of new railway and the provision of all reasonable facilities for carriage of passengers and goods.

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