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ABSTRACT
This study examined and investigates the human capital development and employees performance in selected commercial bank in Port Harcourt. The research instruments used in collection of data for this study included the questionnaire containing structured questions personal interviews and personal observation. Equally secondary information were collected through textbooks, journals, magazines and newspapers etc. descriptive and inferential statistics were used to analyze the data to this study a sample of 313 staff from 3 selected commercial Banks in Port Harcourt was drawn for the study for which the sample element consisted of both junior and senior staff of the 3 selected commercial banks. According 133 copies of questionnaire were administered to the staff of the selected commercial banks in Port Harcourt of the 133 copies of questionnaire administered 120 (i.e. 90.20% response rate) copies were retrieved and were found useful for data analysis. The study found that these banks utilize various human capital development programmes.Majority of respondents agreed that the incidence of using human capital development scheme increases job performance and organizational productivity some of the problems encountered include: lack of response from respondents and time consuming professional and time taken in finding materials. Also revealed is the fact that human capital development has relationship with the bank’s productivity. The study therefore recommends that public organizations should encourage employers/employees to participate in the decision making relating to their development. Employees should be involved in the human capital development programmes of the organization.
TABLE OF CONTENT
TITLE PAGE …………………………………………………………………………………………i
ABSTRACT ii
DECLARATION iii
CERTIFICATION iv
DEDICATION v
ACKNOWLEDGEMENT vi
TABLE OF CONTENT vii
LIST OF TABLES ix
CHAPTER 1 1
INTRODUCTION 1
1.1 BACKGROUND OF STUDY 1
1.2 STATEMENT OF THE PROBLEM 3
1.3 OBJECTIVE OF THE STUDY 11
1.4 SIGNIFICANT OF THE STUDY 11
1.5 RESEARCH QUESTIONS 12
1.6 STATEMENT OF HYPOTHESIS 12
1.7 SCOPE OF THE STUDY 13
1.8 LIMITATION OF STUDY 13
1.9 DEFINITION OF TERMS 13
CHAPTER 2 15
2.0 LITERATURE REVIEW 15
2.1 CONCEPTUAL FRAMEWORK 18
2.2 THEORETICAL REVIEW 19
2.3 EMPERICAL REVIEW………………………………………………………………………20
CHAPTER 3 21
3.1 RESEARCH DESIGN 21
3.2 POPULATION OF THE STUDY 21
3.3 SAMPLE AND SAMPLING TECHNIQUES: 21
3.4 QUESTIONNAIRES DESIGN 22
3.5 SOURCES AND METHOD OF DATA COLLECTION 22
3.6 DATA ANALYTICAL METHOD 22
3.7 SAMPLE SIZE 23
3.8 RELIABILITY AND VALIDITY 24
CHAPTER 4 25
DATA PRESENTATION, ANALYSIS 25
4.1 DATA PRESENTATION 25
4.2 DATA ANALYSIS 29
4.3 TESTING OF HYPOTHESIS 34
4.4 DISCUSSION OF FINDINGS 39
CHAPTER 5 40
SUMMARY, CONCLUSION AND RECOMMENDATIONS 40
5.0 INTRODUCTION 40
5.1 SUMMARY 40
5.2 CONCLUSION 41
5.3 RECOMMENDATION 41
REFERENCES 43
APPENDIX 1 46
APPENDIX II 47
LIST OF TABLES
PAGES
TABLE 1: DISTRIBUTION OF RESPONSE BY THE THREE SELECTED 25
COMMERCIAL BANKS
TABLE 2: DISTRIBUTION BY GENDER 26
TABLE 3: DISTRIBUTION OF RESPONSE, BY YEARS OF SERVICE 27
TABLE 4: DISTRIBUTION OF RESPONDENT BY EDUCATIONAL 28
QUALIFICATION.
TABLE 5: DISTRIBUTION SHOWS THAT HUMAN CAPITAL 28
DEVELOPMENT LEADS TO EMPLOYEE’S PERFORMANCE
TABLE 6: TO WHAT EXTENT DOES PERSONAL DEVELOPMENT 29
INFLUENCE JOB SATISFACTION.
TABLE 7: IS THERE A SIGNIFICANT RELATIONSHIP BETWEEN 30
TRAINING AND GROUP PARTICIPATION.
TABLE 8: TO WHAT EXTENT DOES MANPOWER PLANNING 30
RELATES TO A PRODUCTIVITY.
TABLE 9: DOES WELFARE IMPROVE EMPLOYEE’S COMMITMENT 31
TABLE 10: TO WHAT EXTENT DOES TRAINING RELATES TO GROUP 32
PARTICIPATION
TABLE 11: DOES TRAINING INCREASE THE ORGANIZATIONAL 33
PRODUCTIVITY.
CONTINGENCY TABLE 34
DETERMINATION OF CORRELATION EFFICIENT 34
OF HYPOTHESIS HI
DETERMINATION OF CORRELATION COEFFICIENT 34
OF HYPOTHESIS H2.
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND OF STUDY
Human capital development is the key to the development process of any country. It is the process of determining and assuming that a country will have adequate number of qualified persons, available at the proper times. Developing countries including Nigeria have tried to accelerate the pace of their socio-economic development and modernization since the end of the Second World War and more specifically since attaining political independence. To achieve this objective, various policies including large-scale industrialization and rapid expansion of educational facilities have been initiated.
In Nigeria, successive governments have at one time or the other made policies not only to identify the key sectors of the economy but also to bring into focus the problems that will make the realization of the goals of economic development difficult. One of the major problems which a developing country continuously faces in its developmental process is that of manpower whether in terms of supply or in terms of utilization. It should be mentioned that an important aspect of manpower is its quality and not its size but more importantly, the educational and skill content of a country’s labour force. As a nation develops, the labour force tends to shift towards increasing the proportion of workers in skilled jobs and a decrease in the proportion of those in semi-skilled jobs.
The rapid expansion of formal education in Nigeria has led to proliferation of primary, secondary and tertiary institutions with a large out-put of semi-skilled graduates and complicating unemployment situation in the country. As the shortage of skilled and executive manpower continued unabated since the attainment of independence and its attendant constraints in the implementation of development programmes, this has contributed to inability of private organizations to achieve set goals.
Initially, the solution to human capital problem was sought in the use of expatriate personnel. But the increasing wave of nationalism and rapid development made it possibly unwise to continue depending on foreign manpower, Since it is better for a country to develop its own pool of indigenous skilled manpower, Nigeria has moved forward by establishing some human capital training and development institutions to compliment formal schools, replace expatriate personnel and increase the quantity and quality of the available talents. These institutions qualitatively groom the best asset of the nations “Human Capital” which has been defined by Fredrick Harbison (1973) as the energies, skills, talents and knowledge available in a country.
1.2 STATEMENT OF THE PROBLEM
The major concern of any employer is to make employees to contribute their very best to the attainment of the organizational objectives. Training is a vital part of any administration function and so it is important that it is carried out but most banking sector are still carrying out training of employees in an ad-hoc way (unplanned) which waste a considerable proportion of money without really identifying the need for such training. There is scarcity of trained banker and financial experts in the country, and this has become a challenge to the banking sector. This lack of professional and financial experts in the banks has led to the employment of half fit experts which needs further training to make them suitable for the banking jobs,. In order to enhance this process various institutions has been established with specific functions of promoting human capital development in the Nigerian economy. The structure of employment has undergone serious changes which make it inevitable to update obsolete skills and talents of the banks. Furthermore, as the old staff appears to have become obsolete in skills as a result of the rapid changes within the environment; it’s necessary to prepare employees for the new challenges introduced by the reforms. This is why human capital development programmes as well as retraining has to go together with the new equipment.
THE HISTORY OF DEVELOPMENT BANKS IN NIGERIA
The advent of British political and economic influence in Nigeria brought along a system of banking that was tailored to suit the commercial interest of Britain. The sole monetary authority was then the West African Currency Board, taking charge of British West African Colonies through regulations by the Bank of England. The political and economic awareness of Nigeria as well as increasing complexity of the Nigerian economy necessitated the need for an independent regulatory body. That is, a monetary regularity body within Nigeria, to regulate and supervise the banking system, this brought about the birth of the Central Bank of Nigerian 1959. The West African Currency Board therefore ceased to exercise monetary control over Nigeria. The Bank of England also lost its status as the Bank of issue of Nigeria.
The banking industry has been experiencing changes as well as expansion. Existing banks have been growing and new ones emerging. This is probably due to the general profitability of banking and its stability in relation to other sectors of the economy. Quality of banking services has also improved with relatively new and smaller banks becoming more efficient.
Two years after the Central Bank of Nigeria’s inauguration of the historic 13 point reform agenda, the Nigerian banking industry performed fairly well, recording some milestones in 2006. Capitalization was good with adequate support for business risk. Profitability also improved, reinforced by reasonable assets quality.
The industry balance sheet grew by 36% to N5.7 trillion from N4.2 trillion in 2005 while shareholders’ funds rose by 48% to N736 billion as at December 2006 from N497 billion in 2005. The industry’s revenue profile also increased to 201 billion from 186 billion, while profitability improved by 20.7% for 81.5 billion of N106 billion.
In summary, the banking sector recorded key milestones in 2006, dominating the financial service sector, and accounting for over 50% of non central bank assets. Aside being the most capitalized sector on the exchange, it also recorded the highest volume of transactions in the past years. However, the industry confronted with challenges, including intense competition, increasing spate of fraud and robbery, high cost of doing business due to weak infrastructure, and a dearth of qualified personnel’s to support the industry’s rapid expansion.
The implication of all these challenges and other changes and development within the banking industry is the human capital aspect of the industry which cannot be overlooked. More so, the economic development of any country (of which banking industry is part) is ultimately the result of human effort. It takes skilled human agents to discover and exploit banking industry’s potentials, to mobilize capital, to develop technology, to produce services and carry on trade indeed, if the banking industry is unable to develop its human capital in line with its other capabilities. It will have stippled growth. The industry needs to develop its human capital.
Human capital development in the banking industry should encompass many constituent and interrelated elements. It should include formal education, cover on-the-job training, work experience and individual self development Human capital in the banking industry has experienced growth and development which will have to be coordinated with the long-term growth. Investment in human capital could contribute significantly and directly in the overall growth and development of the banking industry.
Just like the society, the ability of the banking industry to survive and prosper depends first on it’s having institutions to provide its workforce with the values, knowledge and skills that will enable them meet the challenges they will encounter. An employer in the bank will not be able to recognize, much less meet the range of challenge he will encounter unless he has been trained. The implication of all these revolves around the test of competence, resourcefulness and creativity of workers in the bank. The individual employees’ resourcefulness and creative skill will help shape the course of Nigeria’s economic affairs. But these have to be developed.
Thehistory of human capital development in Nigeria could be traced to 1960 whine it was discovered that most of the top government and business positions were occupied by expatriates. For example, about 95% of the branch managers and even accountants of the two leading commercial banks in the 1960’s the standard Bank which is now the First Bank of Nigeria Plc. and Barclays Bank were expatriates. The departure of the whites after independence gave rise to a big vacuum of capable indigenous human capital. This prompted the Federal Government of Nigeria to set up a Manpower Board in 1962 following the Ashby Commission Recommendations. This had some positive results as it increased the number of Nigerians that entered the executive cadre.
It is in realization of the importance of highly skilled and productive workforce that the Federal Government of Nigeria established complimentary institutions of learning to further retrain and technically polish the graduates of formal academic institutions. The complimentary institutions include:
• The Centre for Management Development (CMD)
• Administrative Staff College of Nigeria (ASCON)
• Industrial Training Fund (ITF) which is more concerned with on-the-job or in-plant training.
• Federal Training Center (FTC)
So many professional bodies have also established training institutes which have turned out well trained manpower in various fields into the labour market for the benefit of many organizations. Such institutions include the institute of Chartered Accountants of Nigeria (ICAN), Chartered institute of Bankers in Nigeria (CIBN), Chartered institute of Personnel Management (CIPM). The aim and objectives of all these is to ensure the availability of adequate manpower needed to man various projects currently embarked upon and consequently pursue successfully the developmental aspirations of the nation.
The financial sector of any economy can be descried as the heartbeat of that economy and central to that sector is the banking industry. The performance of banks goes a long way in determining the intermediation process of the economy Ojo, (1994). This is why over the years; the Nigerian government has always placed a great emphasis on improving the effectiveness of this industry. In fact, the challenges posed by the depressed economy and the increased competition from other banks necessitated the needed for efficient human capital. With the business condition becoming more complex and the struggle for profitability becoming more keen, it has become inevitable for banks and of course First Bank of Nigeria PLC to acquire good human capital to run their affairs.
Human capital development and employee performance has been extensively discussed by different researcher. According to Wonlu (2016), the main objective of every business is to maximize profit, to this end, Daniel EsmemObefevebie (2012) connote that the twenty first century organization is face with the task of achieving the best possible result in product and service delivery and product maximization with available employee at their disposal. Both public and private sectors of our economy needs to be efficient in order to survive in the turbulent environment employees are meant to be great asset to any organization and as such should be given the required attention they need for effective performance ‘the highest recruiting industry in Nigeria is the banking sector, they recruit mostly first class graduate from the universities and professionals in IT and Finance one expect that there should be a proper motivation and an attractive welfare package for this human capitalwho spent the useful part of their lives working and maximizing shareholders values, however the reverse is the case. The issue of human capital development in the banking sector is all about investing and improving the skills, innovation and technical capability of workface to enhance productivity Worlu (2012).Therefore it is imperative that a well- articulated study be conducted on the human capital development and employee performance.
COMMERCIAL BANKS
Commercial banks in Nigeria dated to 1892 when the African Bank Corporation (ABC) opened a branch in Lagos, though it was short-lived and eventually replaced by Barclays Bank. Commercial banks constitute a key link in the transaction of money to and from the Central Bank of the economy. Commercial banks operate as a profit maximizing business organizations. They are subject of peculiar attributes, which makes their existence, structure and performance vital to the rest of the economy. They have the burden of safekeeping a significant proportion of the country’s total liquid wealth, and in the process of doing so; they are also responsible for providing a large proportion of the economy’s money supply (Oyejide and Soyede, 1986).
In the national economy, the most important activity of the commercial bank is the mobilization of capital. This is dual function involving not only the raising of funds or collection and pooling of small sums and bank deposits, but also the provision of credit to various sectors of the economy. The commercial banks are therefore seen to be the largest single group in the financial sector.
1.3 OBJECTIVE OF THE STUDY
This study seeks to examine the relationship between human capital development and employee performance in selected banks. The achievement of this target shall be guided by the following objectives.
1. To determine the extent to which human capital development leads to improvement of employee performance.
2. To identify the strategies that could be used to develop human capital for total commitment in an organization.
3. To identify the factors that can enhance employee’s commitment in Nigerian banking sector
4. To make suggestions for effective human capital development and employees performance/productivity in selected banks.
1.4 SIGNIFICANT OF THE STUDY
The study makes use of five selected banks which is a good representative of the banking sector in Port Harcourt. The work tends to give managers an insight into the relevance of human capital development which will help to improve the financial performance of their organization. The employee will also see the need for proper career development in terms of possessing more expertise and relevance skills to face challenges in their job. Future researchers will also find the data useful for future studies.
1.5 RESEARCH QUESTIONS
The purpose of the study as earlier indicated is to examine human capital developmentand employee performance in the banking sector in Nigeria particular reference to selected bank in Port-Harcourt.
In addressing the problem, the following questions have been raised.
1. Is there any relationship between human capital development and employed performance
2. Is there any relationship between training and group participation
3. Is there any relationship between man power and productivity
4. Is there any relationship between welfare and employee commitment
1.6 STATEMENT OF HYPOTHESIS
This research intends to test the following hypothesis.
1. There is no significance relationship between human capital development and employed performance.
2. There is no significance relationship between manpower and productivity
3. There is no significance relationship between welfare and employee
1.7 SCOPE OF THE STUDY
The scope of the study is examining the effectiveness of human capital development on employee performance in the banking sector reference to three selected commercial banks in Port Harcourt. This study covers the importance of human capital development in both employee and employer. To solve the problem of human capital development, the geographical scope of this study will be a survey of five selected commercial bank in Port Harcourt comprising of GTB, First bank and Access bank plc.
1.8 LIMITATION OF STUDY
1. Lack of adequate finance for a good research work
2. Longer time was taken in gathering data from textbooks and magazines.
3. Non publication of a comprehensive annual report by some of these banks will be a constraint to the study.
4. Unsupportive attitude of most respondent.
1.9 DEFINITION OF TERMS
HUMAN CAPITAL: According to Bontiset al (1999) as cited by Dapper Edwin M. and Nwege (2011) the term human capital presenting the human factor in the organization, combines intelligent skills, and exercise that gives the organization its distinctive character. According to Adam Smith, Human Capital is defined as skills dexterity (physical intellectual, psychological etc.) and judgment. Human capital is the knowledge, skills and abilities of individuals that create values.
DEVELOPMENT:Thisis considered as a gradual increase of something to become more advance and stronger. In this context the term development is a programme and activities undertaken by organizations that aimed at preparing and training individuals to acquire extra or more skills and capacities that can make them contribute their best in work place. It an important aspect of any growing organization, the continuous development of an employee or a staff of an organization gives that organization a more productive advantage.
EMPLOYEE PERFORMANCE:It is individual combine intelligence in terms of skills and competitive advantage to increase productivity in the organization. It can also be said to be an outcome that occurs as a result or function of individual working behaviour in an organization. Employee performance can be seen as the after effect of an employee’s development programme or training on his job.
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