CHAPTER ONE
INTRODUCTION
1.1
Background
of the Study
Employees join organizations in
order to satisfy a plethora of needs; any contrary outcome brings
dissatisfaction to them, and consequently lowers organization’s performance. In
the world generally, and in Nigeria in particular, all the sectors of the
economy are passing through economic strangulation. The above scenario is not
only as a result of lack of managerial skills or employees incompetence, but
also due to poor motivation in the form of poor salary (reward). As a result of
the above, workers
express their disgust by way of withholding their output,
and by producing many rejects; this Taylor called “Systematic Soldering”. Despite the long-standing
difficulties of establishing an effective link between pay and performance, and
a catalogue of attempts which have often generated organizational disorder, a
review of personnel management literature over the last decade suggests that
performance pay is again attracting considerable managerial and research interest. In the companies under study,
different types of rewards have been put in place, but the most dynamic and
arguably, the most topical reward policy of the companies is performance pay. A
satisfactory reward system administration by employers and the consequent
improvement in performance of employees is a fulfillment of the exchange of
value. Unfortunately, a radical
departure from this primary goal has become a peculiar and permanent feature in
Nigerian organizations, to the extent that many business organizations
persistently complain of low employee productivity, while at the same time
overlook the displeasure of employees with poor reward.
Commenting on effective reward,
Nwachukwu (2000), noted that
One of the challenges confronting human
resource managers
is how to make pay fit the needs of the
recipients, in an
attempt to overcome this problem, many
organizations provide
different types of reward/incentives
accordingly to suit different
employees at different levels in the
organization.
1.2. Statement of the Problem
Organizations all over the world
continually explore various ways by which they can reposition themselves so as
to achieve business sustainability and economy of scale. In so doing, they
adopt different strategies. An organization as a system is made up of five (5)
essential factors (sub-systems) that combine to make production possible such
as land, labour, capital, entrepreneur (management) and information; (Ottih,
1996, and Lawal, 1994).
However, management and (labour)
human resources are the major coordinating factors that make other variables to
work (function). Paradoxically, most managers
instead of proper lubrication of
the labour force by way of good reward system prefer to take adequate care of
the machines regularly, and also replace the old ones with the latest
technology available, thereby relegating the most important factor human beings
to the background.
The relegation of employees by
employers has led employees to manifest their disgruntlement through the
withholding of their productivity as is evident in poor quality products or
services, production of many rejects and excessive labour turn-over; (Cappelli,
2000).
Reactions to the above problems
had led organizations to understudy and put in place different reward systems. In spite of the different reward systems put
in place by organizations to address the ugly trend, organizational
productivity in Nigeria has remained
at the lowest ebb. It is the
extent or otherwise that these reward systems have succeeded, or failed in
addressing the issue of productivity that this study was set out to address.
1.3 Objectives of the Study
The general objective of this
study is to determine the relationship between poorly structured reward system
and performance in the oil industry in Nigeria using selected Oil Companies as
the basis for evaluation.
Other Specific Objectives of the
study included:
1.
To identify the relationship between organizational
reward policy and employees ability to perform.
2.
To ascertain the effects of reward on
labour turn-over
3.
To examine different forms of reward systems put in
place by Oil Companies with a view to determining their effects on the
employees’ performance.
1.4. Research Questions
In order to effectively carry out this study, the following
research questions were put forward, to serve as a guide in this study.
1. What
are the relationship between organizational reward and employees ability to
perform?
2.
What are the relationship between reward and labour-turn over?
3. What are the different types of rewards adopted by Oil
Servicing Companies
Hypotheses
The following hypotheses were put
forward for testing:
H01: There is no significant relationship between organizational
reward and
Employees’ ability to perform.
H1: There is a significant relationship between organizational
reward and
Employees’ ability to perform.
H02: There is no significant relationship between reward and labour
turn-over
H2: There is a significant
relationship between reward and labour turn-over
H03: There is no significant relationship between forms of reward
and employees’ performance.
H3: There is a significant relationship between forms of reward and
employees’ performance.
1.6. Significance of the Study
This study is of immense benefit to different segments of the
society. Both government and non-governmental organizations stand to benefit
the findings of this study, as it will
provide better understanding on how employees reward should be fixed.
Further, the findings of this
study if applied by organizations, will serve as a guide to Human Resource
Managers and Government Officials vested with the responsibility of fixing
workers salary and other packages, as this will lead to more appropriate reward
that can attract and retain competent employees for organizations at all time.
Besides, the study is aimed at
extending the frontiers of knowledge, as it will serve as a reference material
for future students and human resources managers who may develop interest in
studying the best way to improve employee’s performance
Finally, the adoption of the
recommendations made by this study, will lead to improved labour, management
relationship, which will consequently lead to reduced industrial conflict.
1.7. Scope and Limitation of the Study
This study covered some selected
Oil servicing companies within Port Harcourt with staff strength of 206
personnel.
However, due to unavailability of
secondary data, difficulty in obtaining
information from respondents and
difficulty imposed by security, the researcher
was restricted from seeing most of the target audience for the study.
Consequently, the effort of the
researcher is concentrated on the following selected Oil Companies, in Port
Harcourt: Addax Oil Company, Baker Hughes, Tecon Oil, and SGS Inspections.