CHAPTER ONE
1.1. Background to the Study
In this present 21st century, organization is seen as the most crucial point of administration. This is because without organization there can be no administration, and without human resources (employees) no organization can exist, since human (employees) are considered to be the most important assets in every organization. Therefore, it is very important for organizations to consider several ways to get employees motivated to perform their task willingly and enthusiastically, and be satisfied with their jobs. This brings us to the topic on wages and salaries as a motivational tool for enhancing organizational productivity using Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State.
Globally, Freeman (2016) noted that organizational productivity exists almost in all countries across the world which includes both the developed and developing countries. This is because of the increased productivity and performance and economic growth. Thus, it is widely recognized that wages and salaries have to bear some relationship to productivity. Mathias and John (2015) claimed that organizational productivity is determined by the output, quantity and quality of work done. The more an organization is productive, the better the organization competitive advantage. Corroborating the above, Stoner (2014) stated that for organizations to achieve productive, there is the need for them to motivate its employees. According to Stoner (2014), motivation is an individual mental attributes, which consists of factors that can motivate and demotivate the behaviour of an individual. The productivity of individuals, which in turn affects the performance of a company, is a very important parameter to watch as it measures a company’s competitive power. It is an indicator of a firm’s profit margin, a measure of the firm’s survival in business, a yardstick for remuneration of employees, and a means of involvement of hard work.
In Europe, it was affirmed by Bernardin (2014) that the importance of motivational factors cannot be underestimated by an organisation in increasing the productivity levels of employees most particularly when trying to attain competitive advantage. Bernardin (2014) claimed that there are various motivational factors which could enhance employee job performance such as pay rise, promotion, and positive working environment. Cumming (2016) posited that the explanation of employees’ performance needs to acknowledge the motivation and human resources. Development is a global concern and interest to diverse organizations and irrespective of the nature of the job environment, motivation is regarded as the ingredient used in revitalizing any deficiency in employee working behaviour. This is because it will deal with what can encourage employees to perform at their best.
In Africa, it was suggested by Stephen (2014) that organization managers must judiciously, moderately and constantly use rewards and punishments. Besides, he maintained that organization or management that do not take cognizance of reward system will likely de-motivate employees and thus leads to a drop in organizational productivity and overall performance. Therefore, it is important for reward system to be enshrined in the organizational culture both private and public sectors. Lawal (2016) further maintained that every good compensation or salary policy in an organization should be aimed at attracting, retaining and motivating high quality employees that will work towards achieving organizational productivity.
In Nigeria, organization can be said to be holistic, which consists of individuals, capital and material resources with the primary objective of achieving organizational goals and objectives (Sule & Ugoji, 2016). In an ideal world, every organization seeks to achieve its set goals and objectives. Though, salary is one among all the basic needs of an individual. This is because one main challenge confronting a graduate or job candidate in Nigeria is on how to get a good job with a good pay so that he or she can earn a good living (Sule, 2015). According to Obikeze and Anthony (2017) many organizations in Nigeria are confronted with the challenge of the best approach to motivate its employees towards job performance. This is because each employee has different need and thus, various factors motivate employees differently. As such, there is no one best way of motivating employees, since employees are not in any way same in their needs (Obasa, 2015). Critics from Agbonifoh, Agbadudu and Iyayi (2018) claimed that wages and salaries in Nigeria are unwarranted going by the present socio-economic development in the country. The authors asserted that majority of employees who are beneficial to increase in wages and salaries are suffering from “money illusion”. This implies that, employees see the value of the wages and salaries they earn decline hurriedly. In other words, there is a drop in the value of increased earnings to employees.
Okeke (2017) defined motivation as a goal directed and therefore cannot be outside the goals of any organization whether public, private, or nonprofit. Motivation is one of the greatest challenges facing managers across the world due to the fact that it influences the performance of employees and thus the degree to which organisations are able to achieve their objectives and justify their existence (Agburu, 2017). Salaries or wages among the factors of motivation and they are the reward that individuals receive from organization in exchange for their labour and that every organization has its distinct salary system. Essien (2016) claimed that wages and salary are used interchangeably. According to Essien (2016), salary was defined as a fixed annual amount, paid monthly to a person or employee, while wages refers to weekly payments (usually made in cash) that fluctuates in value through overtime, bonuses, and piecework rates. Salaries are determined individually; wages through management/union collective bargaining. If employees’ needs are met and satisfied, it brings about an increase in productivity. Therefore, irrespective of the organization size, management must incorporate motivation into the work environment so as to spur, encourage and influence employees.
Thus, from the ongoing, it is on this note that this study will examine wages and salaries as a motivational tool for enhancing organizational productivity in selected private firms, using Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State.
1.2. Statement of the Problems
Employee motivation has been extensively considered to be a crucial tool for increasing the productivity of an organization however the problem lies in identifying the very factor to put in use due to the fact that the society is very dynamic, and business environment has turned out to be more sophisticated due to technological advancement.
The problem of many organizations in Nigeria occurs from the problem of making available a high income for its employees and this has grave effect on performance. The issue of low income paid to employees has virtually led into a strong argument and counter argument on the part of government, labour and employees union. Employees through their labour unions have always asked for improved conditions of services and can go to any length to press home their demands (Okeke, Nwele & Achilike, 2017). In addition, a lot of organizations have experienced employee high turnover due to a low income paid to their employees, and this has affected the productivity and overall performance of such organizations, where talented and competent employees have left for a well paid job.
Past studies have showed that low performance and inefficiency has characterized many organizations in Nigeria (Mbogu, 2010); and findings from other studies have equally revealed that the low performance and inefficiency associated with organizations in Nigeria could be removed if they are provided with some financial incentives (Tongo, 2011). The study of Perry (2017) found that respondents perceived increase in wages as a form of confidence that management places on them, and therefore were motivated to improve on their performance. Iyida (2017) found that increase wage improves the productivity of employees. The study of Onyango (2015) showed a positive correlation between employee benefits and organization performance. Wasiu and Adebajo (2014) found a significant relationship between employee’s performance and salary package, employee job allowances and performance and in-service training and employee’s performance.
In contrast, Perry, Mesch and Paarlberg (2012) revealed that individual financial incentives are ineffective in the traditional public sector settings. Odoh (2011) found that irregular and inadequate wages/salaries, low level of fringe benefits and lack of collective bargaining process brought about low productivity of employees. In addition, Agburu (2017) found an unwarranted lags between labour (employee) pay and productivity. However, the various empirical findings showed mixed findings and a number of the studies have methodological issues as most of them used nonparametric method in analyzing their data which is most often deep-rooted with errors. Therefore, the study will fill the identified gap by examining wages and salaries as a motivational tool for enhancing organizational productivity in selected private firms, using Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State, and would use a more robust method in analyzing the data.
1.3. Objectives of the Study
The primary objective is to examine wages and salaries as a motivational tool for enhancing organizational productivity in selected private firms, using Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State. In order to achieve the primary objective, the following specific objectives are:
- To assess the relationship between wages and salaries on employees productivity in Frigo Glass Industries Nigeria Limited.
- To determine whether wages and salaries enhances employees performance in Frigo Glass Industries Nigeria Limited
1.4. Research Questions
The following research questions are poised for the study.
- What is the relationship between wages and salaries on employees’ productivity in Frigo Glass Industries Nigeria Limited?
- How does wages and salaries enhances employees performance in Frigo Glass Industries Nigeria Limited?
1.5. Research Hypotheses
The research hypotheses for this study are formulated in their null form.
- Ho1: Wages and salaries has no significant relationship on employees productivity in Frigo Glass Industries Nigeria Limited.
- Ho2: Wages and salaries does not enhance employees performance in Frigo Glass Industries Nigeria Limited
1.6. Operationalization of the Variables
The dependent variable is organizational productivity, represented by Employee Productivity (EP), Employee Performance (EPM), and Employee Job Satisfaction (EJS). On the other hand, Wages and Salaries, being the independent variable is a dummy variable.
Where Y= Dependent variable
X= Independent variable
α˳ = Constant
ꞵ1 ꞵ3 = Coefficient of independent variable
µᵢ = Stochastic value or error terms
Y= f(X)
X= Wages and Salaries
X = f(x)
Y= Organizational Productivity
Y= f(y1, y2, y3)
y1 = Employee Productivity (EP)
y2 = Employee Performance (EPM)
y3 = Employee Job Satisfaction (EJS)
The four specific objectives are operationally expressed as:
To assess the relationship between wages and salaries on employees productivity in Frigo Glass Industries Nigeria Limited
Y1 = f (x) ………………………………………. equation 1
Y1 = b0 + b1x + u ……………………………… regression 1
To determine whether wages and salaries enhances employees performance in Frigo Glass Industries Nigeria Limited
Y2 = f (x) ……………………………………….. equation 2
Y2 = b0 + b1x + u ………………………………. regression 2
To examine the extent to which minimum wage affect employee job satisfaction in Frigo Glass Industries Nigeria Limited
Y3 = f (x) ………………………………………… equation 3
Y3 = b0 + b1x + u ……………………………….. regression 3
1.7. Scope of the Study
The study is limited to wages and salaries as a motivational tool for enhancing organizational productivity in selected private firms, using Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State. The unit of analysis of the study is the employees of Frigo Glass Industries Nigeria Limited at Junior, Middle, Senior, and Management level positions. The simple random sampling technique will be adopted to administer the questionnaire in order to ensure that both male and female employees have equal chance of being selected for the study, while data will be gathered using the questionnaire and analyzed using the regression and ANOVA analysis. The geographical location for this study is Frigo Glass Industries Nigeria Limited, Sagamu, Ogun State.
1.8. Significance of the Study
This study will be important to the management of Frigo Glass Industries Nigeria Limited as it will offer ways through which the management can review their existing motivation packages with the aim of enhancing employees’ performance.
This study is important to the industry in that, it will increase and expand the industry level of knowledge on the present motivation packages in the Nigerian banking industry, and offer them with vast understanding and knowledge on deciding a minimum salary for banking employees.
The study is important to the government since they have the capacity to formulate policy and guidelines that will be of positive interest to employees. Thus, the government can formulate policy that will enhance employee minimum wages and salaries.
The findings of this study will be of benefit to University authorities as it will provide them with information that will be useful to motivate its employees both academic and non-academic staff. In addition, findings will be o benefits to students and other researchers who will want to carry out future research in relation to the study.
1.9. Definition of Operational Terms
Wages: refers to the total earning a worker receives for the performance of services within a period of time
Salary: refers to the weekly or monthly rates to clerical, administrative and professional employees.
Reward: refers to when an employee is offered reward packages such as bonuses, salary increment, etc in order to enhance his or her job performance.
Employee Job Satisfaction: is the difference between the inputs made by employee and the outputs receive from the job
Productivity: refers to the output per unit of Labour input, it is the balance between all factors of production that will give the greatest output for the smallest effort.
Motivation: refers to an inner drive that energizes activities compels and moves an individual to act or behave positively on a certain manner.
Performance: is defined as the ability to achieve result or given objectives
