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Abstract
The study examined effective remuneration strategies and employee performance of manufacturing firms in Port Harcourt. In this study, the survey design was employed. The population of this study constitutes all manufacturing firms in Port Harcourt. The population of the study was unknown. The sample size of this study is judgmental sample of 80 respondents which comprise of both the senior and junior staffs of Berger Paints, Emmppek Autos Limited, and Hidoz Group Limited, in Port Harcourt, Rivers State. In this study both the primary and secondary data were used. A self-designed questionnaire on effective remuneration strategies and employee performance was used and administered for the collection of data from the respondents. The data collected were processed electronically using Statistical Packages for Social Sciences (SPSS Version 22). The statistical test used in the testing of the hypotheses was Pearson Product Moment Correlation Coefficient. The study found a significant relationship between salary, benefits, recognition and employee performance of manufacturing organizations in Port Harcourt. Based on the findings of the study, we recommended that company should continue providing security benefits to all employees their position not withstanding as it will positively influence employee productivity and raise overall performance in the manufacturing sector and the study also recommends that the company should continue providing health protection benefits to its employees since it will help them create a sense of loyalty and encourage their productivity in the company. The study further recommend that the company should review the current retirement package since a good retirement package will attract and retain employees in the company and also improve their productivity which will translate to optimum performance.
Table of Contents
Title Page i
Cover Page ii
Abstract iii
Declaration iv
Certification v
Dedication vi
Table of Contents viii
List of Tables x
List of Figures xi
CHAPTER 1 1
INTRODUCTION 1
1.1 Background of Study 1
1.2 Problem Statement 3
1.3 Objectives of the Study 4
1.4 Research Questions 5
1.5 Statement of Hypotheses 5
1.6 Significance of the Study 5
1.7 Scope/Limitation of the Study 6
1.8 Definition of Terms 7
CHAPTER 2 8
LITERATURE REVIEW 8
2.1 Conceptual Framework 8
2.1.1 Concept of Effective Remuneration 8
2.1.2 Dimensions of Effective Remuneration 9
2.1.3 Concept of Employee Performance 11
2.1.4 Measures of Employee Performance 14
2.1.5 Effective Remuneration Strategies and Employee Performance 15
2.2 Theoretical Framework 16
2.2.1 Herzberg’s Two Factor Theory 16
2.2.2 The Total Reward Model 17
2.3 Empirical Review 17
CHAPTER 3 20
RESEARCH METHODOLOGY 20
3.1 Research Design: 20
3.2 Population of the Study 20
3.3 Sampling Techniques Used 20
3.4 Sample Size 20
3.5 Sources of Data 21
3.5.1 Primary Source (s) of Data 21
3.5.2 Secondary Sources of Data 21
3.6 Research Instrument for Data Collection 21
3.7 Validity and Reliability of Instrument 22
3.8 Techniques for Data Analysis/Test of hypotheses 22
CHAPTER 4 23
DATA PRESENTATION ANALYSIS AND INTERPRETATION 23
4.1 Questionnaire Distribution and Retrieval 23
4.2 Data Analysis and Presentation 24
4.3 Hypotheses Testing 27
4.5 Discussion of Findings: 29
CHAPTER 5 32
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 32
5.1 Summary 32
5.2 Conclusions 32
5.3 Recommendations 33
References 35
Appendix I 38
Appendix II 39
Questionnaire 39
List of Tables
Table 4.1: Questionnaire Administration and Retrieval 23
Table 4.2: Age of respondents 24
Table 4.3: Sex of Respondents 24
Table 4.4: Academic Qualification of respondents 25
Table 4.5: Incentives and Employee performance 25
Table 4.6: Rewards and Employee performance 26
Table 4.7: Indirect Compensation and Employee performance 27
List of Figures
Fig. 2.1: A Conceptual framework showing relationship between Effective Remuneration System and Employee performance 8
CHAPTER 1
INTRODUCTION
1.1 Background of Study
Employee job performance is derived from the word job performance that means real work produced an employee within a specific time period. Performance is a comparison between the work of the real compared to the standard set by the company (Dessler, 2000). Performance is the quantity and quality of produced or services rendered by a person in doing the job (Luthan, 2005). Performance is the work of behavior (Armstrong, 1999). Performance is the relationship between work and behavior.
A good performance by employee is necessary for the organization, since an organization’s successis dependent upon the employee’s creativity, innovation and commitment (Ramlall, 2008). Even though employee performance and employee job performance seems to be related, performance is in some cases measured as the number and value of goods produced. However, in general, productivity tends to be associated with production-oriented terms (e.g. profit and turnover) while employee performance is linked to efficiency or perception-oriented terms (e.g. supervisory ratings and goal accomplishments. Organizations need good employees and appropriate structure that will enhance their performance. According to Kostiuk et al (1999) most organizations performance is measured by supervisory ratings, supervisory ratings quality, and quantity, dependability and job knowledge and goal accomplishments even though they are highly subjective. This study however will however adopt the variables of employee’s performance to include; supervisor’s ratings, quality, quantity, effectiveness, efficiency, dependability, job knowledge and goal accomplishments.
Employee job performance is derived from the word job performance that means real work produced an employee within a specific time period. Performance is a comparison between the works of the real compared to the standard set by the company. Performance is the quantity and quality of produce or services rendered by a person in doing the job. Performance is the work of behavior. Performance is the relationship between work and behavior.
The idea of remuneration goes back to 2150 BC when Sunierian social orders have actualized the main laws to repay workers for real bodily injuries. With time, the idea has bit by bit gained its contemporary significance, and has transformed into a conceivable and successful instrument of remunerating laborers and shielding businesses from harm suits. Remuneration is regarded as the Rewards the workers receive which can come in form wages, rewards, and pay for the worker’s to increase the productivity (Holt, 1993). Pay is very necessary for lifestyles because employee gets rewards from the employer for the work he did. In human resources management, the essential obligation is remuneration management. Remuneration is a complex task that takes place intermittently. There is need for employee integration, tactics and information with organization’s process and strategies in order to achieve organisational desires and goals. Truly, remuneration management is a serious device to “incorporate individual efforts with strategic firm’s goals through inspiring employees to do the right things with ever attractive efficiency. Remuneration send clean messages to all workers of the organisation notifying them about anticipated attitudes and behaviors (Schell and Solomon, 2007). Davis et al (2003) noticed that the idea of “remuneration” was changing as per the changing states of work. Remuneration is genuinely viewed as the most antiquated type of social protection. Industrialization and the development of the new types of work required adjusting the fundamental compensatory arrangements to the need of the working society “Simply defined, workers’ remuneration recompenses, offers something to a worker who performs work for another, for services rendered for injuries (Hood, Hardy Lewis, 2004). Verifiably, even the antiquated social orders practiced different sets of rules which later took for the type of remuneration. It is believed that remuneration is the “glue” which ties the workers and the employer jointly in a firm, this is additionally classified as an agreement or a legal document that mutually binds both the worker and employer that spells out precisely the amount ought to be paid to the worker and component of the remuneration package. Although, Maslow’s Hierarchy Theory discusses remuneration as the center to bring down step of the pyramid and the other elements like job contentment and fulfilment being at the top, for most of the employees, getting the exact remuneration is by its self an encouraging factor. Accordingly, businesses need to evaluate worker’s commitment in a suitable way if they want the employee to bring out their best. In every organisation, the provision of monetary reward in exchange for work performance forms the basis of remuneration and how this is managed using process, procedures, and frameworks form the basis of remuneration management. (Reeve, 2004). Subsequently, in light of the above background, this study intends to find out the role of remuneration in increasing employee performance and retention with particular reference to Nigerian bottling companies.
1.2 Problem Statement
The study and comprehension of human conduct has sit for a strong challenge to both the researchers and professionals. They have been keen on discovering the reasons for human behaviour. The behavioural scientists need to discover why individuals behave the manner in which they do. Scientific management school of thought accept that many individual are spurred mainly by financial rewards and lay emphasis on the part of remuneration and other monetary rewards for increase in performance. Behavioural method guarantee conducive environment and increases financial benefit were not adequate sparks for growing productivity. There is an ongoing argument among researchers if man is completely a “Social man” or an “Economic man” (Chandan, 2005). Reward levels is exceptional amongst most vital components recruiters think about while choosing their employees and the total amount of remuneration gotten by the workers with respect to different chances they may have, has an effect on retention. Pay significantly affects workers attitude, performance and efficiency in organizations. Retention of capable workers are becoming a headache in some firms. Diverse procedures might be designed to do a similar thing like enhancing the working condition, good employee-management relationship, attracting remuneration framework, promotion opportunities; and so on. Despite its being one of the most basic factor for which an individual join an organisation less attention has been given to examining organisational members’ evaluations of various remuneration and Rewards packages. A need exists to analyze the employees’ perceptions of the remuneration and benefit policy of their organisation and how workers differ in their perceptions. Considering the perspective of scientific management, the problem of the study was what will be the view of workers towards the remuneration and benefit package in their organisation.
1.3 Objectives of the Study
The broad aim of this research is to assess the role of remuneration in increasing employee productivity, specifically the objectives include:
1. To determine if there is an effect of wages on employee performance of manufacturing firms in Rivers State.
2. To examine the degree at which incentives affects employee performance of manufacturing firms in Rivers State.
3. To ascertain the level at which indirect rewards affects employee performance of manufacturing firms in Rivers State.
1.4 Research Questions
Below are the research questions:
1. Is there any correlation between wages and employee performance of manufacturing firms in Rivers State?
2. At what degree can effective incentives affects employee performance of manufacturing firms in Rivers State?
3. At what level can indirect remuneration affects employee performance of manufacturing firms in Rivers State?
1.5 Statement of Hypotheses
To answer the research questions above the following hypotheses were formulated in a null form.
H01: There is no correlation between wages and employee performance of manufacturing firms in Rivers State.
H02: Effective incentives cannot affect employee performance of manufacturing firms in Rivers State.
H03: Indirect reward cannot affect the rate of employee performance of manufacturing firms in Rivers State.
1.6 Significance of the Study
The importance of the choice of compensation strategies to manufacturing firms especially in the mid of contemporary competitive and global business world cannot be over emphasized. More so, that some studies have submitted that no relationship exist between effective remuneration strategies and employee performance. The study exposes the determinants of compensation strategies that may lead to better performance. The findings from this study will be useful to business managers/executives, academics and research students working on related subject matter and expand the frontiers of knowledge in this area. Results of this study may also have important public policy implication considering the extensive studies in this area. The reason being that effective remuneration strategies is a general issue that cut across both private and public sphere. Thus, it is hoped that this empirically conducted study will fill the gap identified in the literature which necessitate this study.
1.7 Scope/Limitation of the Study
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study involves an investigation to examine the relationship betweeneffective remuneration strategies and employee performance of manufacturing firms in Port Harcourt. The dependent variable is employee performance; measured by Productivity, Efficiency and Effectiveness, while independent variable is effective remuneration strategiesmeasured by Incentives, Wages, Incentives and Indirect reward.
Geographical Scope:This study is delimited to Port Harcourt with reference to selected manufacturing organizations which includes Berger Paints, 70, Ordinance Road, Trans-Amadi Industrial Layout, Port Harcourt, Rivers State, Emmppek Autos Limited, 3 Harmony Close, Off Omachi, Rumuodomaya Port Harcourt, Rivers State Nigeria and Hidoz Group Limited, Plot 41A, Birabi Street, G.R.A, Phase 1, Port Harcourt, Rivers State Nigeria.
Unit of Analysis: The unit of analysis in this research involves both senior and Junior staff of the selected manufacturing firms at the time of the study.
In course of carrying out this research, the researcher met with a lot of constraints. Among these constraints were: The time frame which this research was expected to be completed which was too short.
Secondly, the cost in carrying out this research work acted as a barrier and the researcher was not financially buoyant to cope with all the cost
Finally, assembling the relevant materials needed for this work was a problem. It was difficult due to the fact that some of the respondents were not willing to give us the required coorperation.
1.8 Definition of Terms
Customer Retention: Itrefers to the ability of a company or product to retain its customers over some specified period.
Market Share: It isthe portion of a market controlled by a particular company or product.
Sales Growth: It is the amount by which the average sales volume of a company’s products or services has grown, typically from year to year.
Incentives: It is a fixed periodical payment for non-manual employees usually expressed in annual terms, paid per month with generally no additions for productivity.
Benefit: It is an indirect financial and non-financial payment employees receive for continuing their employment with the company.
Indirect Compensation: It is an intrinsic reward is defined as ratification, confirmation or an acknowledgment that something done by another person in one’s name and one’s authority.