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ABSTRACT
The study has examined the relationship between personnel outsourcing and organizational effectiveness in selected manufacturing firms in Rivers State. The survey research design was adopted. The population of the study was made to be one hundred and eighty (180) staff drawn from the above selected firms under study. The Taro Yemens formula was used to determine the sample size of 124. The instrument used for data collected is the interview and questionnaire. Self-designed questionnaires on personnel outsourcing and organizational effectiveness was used and administered for the collection of data from the respondents Indorama Petrochemicals, Mobil Nig Ltd and Total PLC in Rivers State, Rivers State. The method used to analyze the data was simple descriptive method stated in tables and expressed in percentage. The study revealed that there is a relationship between Recruiting Process, compensation/salary and reward strategies in Outsourcing and organizational effectiveness. Based on the finding of the study, we recommend that multinational firms in Rivers State should conduct Training/Development for new employees to enhance organizational effectiveness, multinational firms should improve on their Recruiting Process Outsourcing and organizational effectiveness and multinational firms should make plan for Compensation/Salary and salary scheme for their employee’s organizational effectiveness.
TABLE OF CONTENTS
Cover page i
Declaration iii
Certification iv
Dedication v
Acknowledgement vi
Abstract vii
Table of Contents viii
CHAPTER 1 1
INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of Problems 3
1.3 Objectives of the Study 4
1.4 Research Questions 4
1.5 Significance of the Study 5
1.6 Scope of the Study 5
1.8 Definition of Terms 5
CHAPTER 2 7
LITERATURE REVIEW 7
2.1 Conceptual Framework 7
2.1.1 Concept of Personnel Outsourcing 7
2.1.2 Dimensions of Personnel Outsourcing 12
2.1.3 Concept of Organizational Effectiveness 14
2.2 Human Resources Outsourcing and Organizational Effectiveness 16
2.3 Theoretical Framework 17
CHAPTER 3 23
RESEARCH METHODOLOGY 23
3.1 Research Design 23
3.2 Population of the Study 24
3.3 Sample and Sampling Techniques 25
3.4 Questionnaire Design 26
3.5 Source and Method of Data Collection 26
3.6 Validity of Study Instrument 27
3.7 Data Analytical Techniques 27
CHAPTER 4 27
DATA PRESENTATION AND ANALYSIS 27
4.1 Data collection and presentation 28
4.2 Data analysis 28
4.4 Discussion of findings 32
CHAPTER 5 34
SUMMARY, CONCLUSION AND RECOMMENDATIONS 34
5.1 Summary 34
5.2 Conclusion 34
5.3 Recommendations 35
References 36
Appendix I 40
Appendix Ii 41
CHAPTER 1
INTRODUCTION
1.1 Background of the Study
Organizational effectiveness is defined in many ways depending on the organizations goals and objectives in today’s market and also is dependent on the industry (Hardesty, 2003). In today’s market, organizational effectiveness is dependent on seven to ten attributes/characteristics. The above authority stated ten characteristics that those highly effective organizations exhibit. They are, clarity of the organization’s mission, the power of leadership vision, adherence to shared values throughout the organization, cohesive, balanced team of leaders, clear and measurable goals and objectives, mechanisms for external feedback and input, a desire to learn continuously, pursuit of excellence, competent planning and decision-making processes, periodic celebrations of nobility of the work and collective accomplishments. Fitz-Enz (1997) concluded that there are eight practices of highly effective organizations. Barney (1991) also affirmed that for a resource to have that potential, it must satisfy four conditions: be valuable, rare, imperfectly imitable and non-substitutable. The resources that satisfy the conditions for being sources of competitive advantage are superior assets and capabilities and distinctive core competences (day & Wensley, 1988; Prahalad & Hamel, 1990). Distinctive core capabilities are those processes that involve a combination of physical and human resources and which are later responsible for the organization’s tacit and explicit knowledge. (Espino- Rodriguez & pardon-Robaina, 2005).
The debate on personnel outsourcing is polarized. Personnel outsourcing is seen as an opportunity for the human resources function by some while to others, it is as a human resource threat. The first view suggests that personnel outsourcing is an instrument creating time for human resources to become a strategic partner. the second view considers personnel outsourcing as a cost- cutting instrument gradually reducing human resources staff. (Delmotte, Sels, 2008).
Outsourcing has been defined as work done for a company by people other than the company’s full-time employees. In the modern setting, outsourcing turns out to be highly complex and organizations use outsourcing vendors for a variety of reasons. According to analysts, companies usually cite cost reduction as the most crucial reason for human resources outsourcing. As companies were discussing how to cut costs in the face of an economic downturn, many look at outsourcing for some of their human resources processes. As the managing director of capita human resources solutions, Wayne story, rightly puts it, “human resources outsourcing is on every human resources director’s list of things to do. It has to be driven by the business case though the right partner at the right time, for the right reasons.” However, some analysts argue that by outsourcing major human resources activities, the number of human resources jobs is decreasing, others feel that on the contrary by outsourcing these kinds of repetitive and administrative jobs, higher-level human resources professionals get the time they need to tackle strategic workforce challenges. With more and more companies looking to rationalize employees on their payroll, manpower outsourcing is slowly becoming the new buzz in India. And the trend seems to have hit not just big multinational companies but the public sector and government undertakings as well, though on a very low key yet in the latter.
Human resources services are among the key elements in the enlarging outsourcing game. Recognizing the fact that senior management needs to get out of mundane day-to-day processing work and focus instead on strategic planning, core competencies, customer satisfaction and decision making, a number of large companies, across globe have begun opting for outsourcing of their human resources services. Some of the functions most commonly handed over to outside providers include payroll, benefits administration, background checks, drug testing, recruiting and training. Even small companies that might not get noticed much in big studies of outsourcing trends, turn to outside services to help with such chores. From the foregoing therefore the study is intended to examine the relationship between personnel outsourcing and organizational effectiveness of some selected manufacturing Firms in Rivers State.
1.2 Statement of Problems
The debate on human resource outsourcing is polarized. The first view suggests that human resources outsourcing is an instrument creating time for human resources to become a strategic partner. The second view considers human resources outsourcing as a cost- cutting instrument gradually reducing human resources staff. (Delmotte, Sels, 2008). Beside these, there are other striking scholarly views relating to employee outsourcing which have been creating a wide range of concerns such as; poor Training and Development, weak Recruiting Process, Inadequate reward strategies in the organization.
On the other hand, employee outsourcing can also be seen as a tool cutting cost as as previously stated, absorb employee-work related pressures and to achieved increased return on investment. However, argument remains that most scholars and organizations appeared not to see the premium attached to the adoption of this loudable concept. Some criticize it for bringing in low experience staff in to the organizations work steam; some see it as an avenue through which organizational performance dwindles. It is against this background that this study is designed to examine the relationship between personnel outsourcing and organizational effectiveness in selected manufacturing firms in Rivers State.
1.3 Objectives of the Study
The main objective of the study is to examine the relationship between personnel outsourcing and organizational effectiveness of some selected manufacturing Firms in Rivers State. The specific objectives are as follows:
i. To examine the relationship between staff training and organizational effectiveness of some selected manufacturing Firms in Rivers State.
ii. To examine the relationship between recruiting/selection outsourcing and organizational effectiveness of some selected manufacturing Firms in Rivers State.
iii. To examine the relationship between payroll and compensation management and organizational effectiveness of some selected manufacturing Firms in Rivers State.
1.4 Research Questions
The following research questions are designed to help the researcher, achieve the objective of the study.
i. Is there any relationship between staff training and organizational effectiveness of some selected manufacturing Firms in Rivers State?
ii. Is there any relationship between recruiting/selection outsourcing and organizational effectiveness of some selected manufacturing Firms in Rivers State?
iii. Is there relationship between payroll and compensation management and organizational effectiveness of some selected manufacturing Firms in Rivers State?
1.5 Significance of the Study
This study is significant in the following ways;
Firstly, it will assist the organization to continually plan for the good of their employee’s and also make use of skilled manpower for the good of the organization.
Others who will benefit from this study include managers, business organizations, higher institutions and the society in general.
1.6 Scope of the Study
The study covers personnel outsourcing and organizational effectiveness. The study limits scope to some selected multinational firms in Rivers State which include Indoroma Petrochemicals, Mobil and Total in Rivers State.
1.7 Limitation of the Study
The major limitation of the study is the short time frame the research is designed to last, coupled with the tight academic time table, which prevented a very comprehensive study. The fund available to the researcher was also limitation and therefore the study was limited to a small portion of the survey population.
Another limitation is the difficulties, encountered by the researcher in obtaining all needed information and materials from the right source and compilation of data for the project.
1.8 Definition of Terms
Outsourcing: Obtain (goods or a service) by contract from an outside supplier.
Personnel outsourcing: Personnel outsourcing (HRO) occurs when a business instructs an external supplier to take responsibility (and risk) for HR functions and perform these tasks for the business.
Organizational effectiveness: The degree to which something is successful in producing a desired result; success.
Organization: An organized group of people with a particular purpose, such as a business or government department.
Personnel: People employed in an organization or engaged in an organized undertaking such as military service.