IMPACT OF FRINGE BENEFITS ON EMPLOYEE PERFORMANCE

CHAPTER ONE

 INTRODUCTION

1.1            Background Of The Study

The genesis of the cement industry in Nigeria can be traced to the 1950s with the establishment of the first cement factory in Nigeria about 11956 at Nkalagu with an installed capacity of 489000 metric tons per annual. With the increasing demand for cement in the economy, there were growth of the construction industry coupled with the oil boon of the post war period which brought about improvements in the standard of living of the masses, there led to an increase in the demands for cement. To achieve Nigeria national objectives of self-reliance in the supply of industrial products and that of import substitute with this product locally, public and private sector organizations stepped up their operations geared towards increasing cement production. In view of ever-increasing demand, cement in the early phase of development in Nigeria primarily due to the growth of construction industry. A large quantity of cement was still being imported. The commissioning of about a (Nine) cement companies between 1956 and 978 was a deliberate effort by successive government to sustain the tempo of growth in the construction and building industry, as well as conserving hard earned foreign exchange expanded on massive cement Importation. It was against this background that the delta cement company limited Ughelli, was established to take advantage of the unsatisfied demand for cement. Between 1950-1962 the geological survey department of Nigeria conducted a geographical survey in the Aladja division of Delta province, they discovered two marble and limestone deposit in Ughelli area. These mineral deposits were estimated at 10.23 million tones. Detailed chemical analysis showed that the marble and limestone deposit, which extended to a depth of 606m, was suitable for the manufacturing of cement it appropriately blended with clay and literate.

Further survey shows that suitable clay and literate were equally around these locally. Attempts were not made by the western region to exports these mineral deposits but shortly after creation of mind-west region in 1964 the government became anxious to develop the region now delta state which sponsored the Ughelli cement company limited incorporated on 18th of June 1964 as a private limited liability company with an equity share capacity of 2.2 million. This share was increased to N20 million following the expansion of the capacity of 50,000 tons per annum to 950,000 tons per annum. The company factory is located at km 154 delta Eruemekowtiarun Road, Ughelli in Ughelli local government area Delta state, and has its requested office at No.6 reservation road press center building G.R.A Delta State. Delta Cement Company limited is owned in partner by three investors and the percentage stock holding of partners are as follows:

1. Delta State Government 7 8-9%

2. Edewor and Co- Limited 20%

3. Onanife Caro and co- 1.1%

The cement plan was installed ready for operation by 1966 but could not be commission, because of difficulty in getting electricity installed for the supply of power. As this become clear the state government directed the ministry of transport and work to assist in providing the factory its own power generators and this was made available which later set the commissioning in motion in 1969.

The Nigeria civil war perhaps made it impossible to employ the services of their required expatriate technical personnel to take on the management which further two years without operation.

Early 1970. Immediately after the civil war messes Jarpur Udyog an Indian firm was the factory management agent. The management agent commenced operation in March 1972.

 

1.2     Statement Of The Research Problem

Fringe benefits are non-pay benefit received by workers such as housing transportation, pensions, subsidized meals and discounts on company products. They are usually provided as a package of items. There benefits are extra income to the worker and often satisfy the needs and wants that were not satisfied by salaries or wages. This goes a long way in enhancing employee’s morale. Most benefits plans do not allow the workers to make choice of his or her preferred range of benefits. Generally benefits are offered on a take-it or- leave it basis with the exception of pension schemes, which is mandatory.

Fringe benefits were introduced by employers of labour on the sincere beliefs that employees where entitled to share in the prosperity of their organizations. It grew up as the result of the economic situation in the country. In a country where the government is unable to cater for the welfare of its people, some organizations assume some of the responsibilities which otherwise should have been the duty of the government which is the essence of this study.

 

 

 

1.3     Research Questions

The idea of the research work is therefore given prominence of the problem militating against the effective administration of fringe benefit programmed in manufacturing industries. In order to help to find solution to the foregoing problems the following request were asked.

1. Does fringe benefit enhance workers performance?

2. Does fringe benefit yield benefit to management?

3. Are fringe benefit properly implemented in organization?

1.4     Objective Of The Study

The propose of these studies is to:

  1. To highlight fringe benefit to workers
  2. To explain to management advantage inherent in fringe benefit
  3. To know if the application of fringe benefit have been put to optimum.
  4. To know the extent which fringe benefit has facilitate efficient employee’s services.

 

1.5     Statement of  Hypotheses

The following hypotheses are drowning in the study:

 (1)    The application of fringe benefit in Organizations Company is not of any benefit to employees and employer.

(2)     The relationship between employers and employees has been affected negatively by implementation of fringe benefit.

(3)     The application of fringe benefit in organization has created a bad relationship between workers and employers.

1.6   Scope of the Study

The impact of fringe benefit on work performance intend to cover all the departments in Delta cement company Ughelli how the management manages the work and its workers. It will cover their condition of services of the worker that enable management to give some incentive plans or scheme, or extent of use of incentive plan, determination of incentive trends to fringe benefit and why fringe benefits have expanded. For effective work the research has choose Delta cement company Ughelli as a case study and above all recommendations will be based on the findings of the study.

 

1.7     Significance of the Study

The findings of this research work is hoped to be of great benefit both theoretically and practically to management all organizations management and the society at large.

Therefore the importance of the study lies on the fact that:

  1. It will create awareness on the part of the management as well as the general public that fringe benefit factors are a general factor on attitude of employees to work.
  2. It will provide useful information and ideas to the leaders on effective way to lead.
  3. It is hoped that the result of this research work if implementation will connect some of the defects inherent in the system so that all will work for the achievement of organizational goals.
  4. It will provide useful ideas and information on the impact of fringe benefit on workers performance.

 

 

 

1.8     Limitations of the Study

In the process of carrying out this project work on the management of fringe benefit with delta cement company Ughelli as a case study, efforts were made to arrive at logical conclusions. But the work is subject to certain limitations.

In the first place, the study was done under time constraints it was a difficult task for me to combine both the class work and fieldwork. This has minimized the extent to which this research work would have been done to a more meaningful conclusion, since the case study restrict the work to Ughelli cement company Ughelli, it will not be a representative of all the manufacturing companies in Nigeria.

In the second place, there was a lot of financial limitations as a result of high cost of transport fair to Ughelli to collect data cost of material to bring this work to a good standard.

Finally, some officials refused to give out information’s saying that the disclosure of such information was to expose the company’s secret and that they may lose their job by disclosing these information most of the senior staff were always very busy with their work, there by postponing schedule tied interview appointments because of pressure of work. This lead to visiting the company several times to administered questionnaire and personal interview.

1.9     Operational Definitions of Terms

Incentives: These are inducement given to members of an organization for the purpose carrying out organizational objectives. Incentives can be measured by the amount of inducement which workers get from the organization and the extent to which such inducement enhance their performance, also it is used to describe wage payment plans which tie wages directly or indirectly to productivity.

Management: This is the process of planning organizing, directing, coordinating and controlling men and material for the purpose of optimum achievement of organizational objectives. In this study, management refers to the group of people that is the executive organ of the company responsible for the people optimum achievement of organizational objectives.

Moral: Moral is defined as the capacity or work group to work to pull
together persistently and consistently in pursuit of commonly define objectives and purposes. Morally will also be referred to as the trust or confidence which the individual has for himself it is in this ability to carry out organizational functions assigned to him and the reactions with which he will be able to meet future challenge in carrying out organizational goals.

Motivation: Motivation as the functions which precipitate an employee to action. Motivation as will be used in this study refers to those factors that arouse employees to action. It could be measured by identifying the various needs of individual workers and how such needs influence the behaviour of the workers the organization.

Fringe Benefit: Fringe benefits are substantial portion of the total labour cost in many companies. There are two main types of fringe benefits direct and indirect benefits may comprise profit sharing co-partnership sick pay and pension schemes payments are generally made in cash. Indirect benefits are aimed at improving moral and increasing the stability of employment.

Employee Incentive: This is a system of paying employee under the earnings of the individual are directly automatically and promptly related to his output by a predetermined formula relating his actual performance to a specific standard performance.

Performance: This is the result of the employee effort in achieving the organizational objective in other words; employee’s performance is in the aggregate result of the effort in achieving the goals of the organization. It can be measured by accessing the overall results of the organizational goals.

 Workers Productivity: Workers productivity is the measure of how well resources are brought together in the organization and utilized for accomplishing a set of result.

Organization: An organization is the co-ordination of the activities of a number of people for the achievement of common goals through division of labour and functions and also through the hierarchy of authority.
Reward: This is the benefit which the employee gets from his contribution towards the achievement of organizational goals.

Tangible Incentive: Tangible incentives are inducements that are material either monetary or non-monetary.

Promotion: This refers to the advancement of the individual employee from one grade to the other promotional method of an organization can be measured by the following criteria. The frequency in which people are promoted. The yard stick used in the promotion of people. The reaction of the workers to the organization method of promotion.

Value: This is the importance of a worker attaches to the different aspects of the welfare scheme in a scale of preference.

Immediate Needs: These are the needs that have to do with the immediate requirement of the workers.

Future Needs: These are the needs that have to do with the future requirement of workers.

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