CHAPTER ONE

INTRODUCTION

1.0 Background of the Study

Personnel management is defined as a strategic and coherent approach to the management of a small business‘s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives. The importance of personnel (human resources) in small and medium enterprises has received much attention in recent years. At a macro level, endogenous growth theories suggest that the accumulation of human capital constitutes the main engine of macro-economic growth (Mankiw et al., 1992). At a micro level, resource-based theory points to the human capital of employees as a major source for sustained competitive advantage for individual firms. Due to the increasing importance of personnel or human capital, which to a large extent is related to developments in information and communication technologies, current western economies are described as knowledge-based economies.

The increased importance of personnel or human capital is apparent at both the demand and the supply side of the labour market. However, an adequate supply of and demand for highly qualified labour is in itself not enough to guarantee economic progress; for each individual firm, supply of and demand for labour and human capital must be matched. Companies in the knowledge-based economy are challenged to meet their demands for highly trained employees in labour markets characterized by a shortage of qualified labour (Audretsch and Thurik, 2000). Human resources are becoming more important, and therefore also the management of these resources.

According to Heathfield (2011), Human Resource Management (HRM) is the function within a small business that focuses on recruitment of, management of, and providing direction for the people who work in the small business. Human Resource Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organizational development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Gale (1991) sees Human Resource Management (HRM) as a term used to describe formal systems devised for the management of people within a small business. These human resources responsibilities are generally divided into three major areas of management: staffing, employee compensation, and defining/designing work. Essentially, the purpose of (HRM) is to maximize the productivity of a small business by optimizing the effectiveness of its employees. This mandate is unlikely to change in any fundamental way, despite the ever-increasing pace of change in the business world. The basic mission of human resources will always be to acquire, develop, and retain talents; align the workforce with the small business; and be an excellent contributor to the small business. Those three challenges will never change.

Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective (HRM) enables employees to contribute effectively and productively to the overall small business direction and the accomplishment of the organization’s goals and objectives.

For small and medium enterprises to grow they need to efficiently and effectively manage their personnel or human resources, this will in turn contribute to their growth and development. When an enterprise is made up of quality personnel, it will have a positive impact on their productivity.

1.2 Statement of the Problem

Personnel management in small medium scale industries has been faced with multi-dimensional problems. Managers of small and medium enterprises do not take personnel management seriously and consequently this affects the productivity of employees as they are not properly trained and motivated to carry out their responsibilities effectively. There is the absence of a flexible and caring management style so that staff will be motivated, developed and managed in a way that they can give of their best to support departments‘ missions. In addition most departmental units in small and medium enterprises do not meet their business goals as a result of an ineffective approach in managing the personnel that work there. The lack of training also contributes to the ineffectiveness of the personnel of small and medium enterprises.

1.3 Objectives of the Study

1. To examine how effective and efficient personnel management affects the productivity of small and medium enterprises.
2. To find out how training of personnel of small and medium scale enterprises helps in achieving their goals.
3. To determine how wrong selection and recruitment of personnel affect small and medium enterprises.
4. To examine the management difficulties hindering effective and efficient personnel management in small and medium enterprises.

1.4 Research Questions

The following research questions were formulated based on the objectives of the study:

1. How does effective and efficient personnel management affect the productivity of small and medium enterprises?
2. In what ways can the training of personnel of small and medium enterprise help in achieving their goals?
3. How does wrong selection and recruitment of personnel affect small and medium enterprises?
4. What are the management difficulties hindering effective and efficient personnel management in small and medium enterprises?

1.5 Statement of Hypotheses

As a guide to achieve the objectives of the study, the following hypotheses were formulated:

1. Ho: Recruiting of qualified personnel, trained staff for boosting of productivity, motivated and committed employees for increasing the financial returns of an enterprise will not affect the productivity of an enterprise.

Ha: Recruiting of qualified personnel, trained staff for boosting of productivity, motivated and committed employees for increasing the financial returns of an enterprise will affect the productivity of an enterprise.

1. Ho: Enhancing the knowledge and skills of the employees, improving employees’ commitment to attaining organizational goals and optimizing the performance of employees are not the ways training of personnel of small and medium enterprise can help in achieving their goals.

Ha: Enhancing the knowledge and skills of the employees, improving employees’ commitment to attaining organizational goals and optimizing the performance of employees are the ways training of personnel of small and medium enterprise can help in achieving their goals.

1. Ho: Ineffective operations, dwindling performance, poor financial returns and slow growth are not the ways wrong selection and recruitment of personnel affect small and medium enterprises.

Ha: Ineffective operations, dwindling performance, poor financial returns and slow growth are the ways wrong selection and recruitment of personnel affect small and medium enterprises.

1. Ho: Absence of functional personnel department in most small and medium scale industries, the need to re-educate new graduates because of poor job performance, lack of support from the government in terms of human resources and development programs are not the management difficulties hindering effective and efficient personnel management in small and medium enterprises.

Ha: Absence of functional personnel department in most small and medium scale industries, the need to re-educate new graduates because of poor job performance, lack of support from the government in terms of human resources and development programs are the management difficulties hindering effective and efficient personnel management in small and medium enterprises.

1.6 Significance of the Study

This study is significant in the following ways:

1. It will reveal the impact of effective and efficient personnel management on small and medium enterprises.
2. The study will also reveal the need for effective and efficient personnel management in small and medium enterprises.
3. Organizational managers and policy formulator will gain a lot, if they will be aware of the factors that motivates or inhibit their employees to be productive.
4. Further, it is of academic interest of knowing, if the staffing and selection policies and productivity have a positive or negative correlation,
5. This research could serve as a guideline for other researchers.

1.7 Scope of the Study

This research work centers on a survey of the efficient and effective personnel management in small and medium scale enterprises (A case study of selected small and medium scale enterprises in Uyo).

1.8 Limitations of the Study

The study was limited by the following factors:

Financial Factor: Inadequate funds affected the way data were collected since the researcher had to travel long distances for the distribution of the research questionnaire forms.

Time Factor: This affected the reduction in the size of the sample used for the study because the researcher had less than two months to complete the study.

Material Factor: Shortage of relevant materials for literature review posed a great difficulty. The study was also limited to the information gathered from primary and secondary records.

1.9 Organization of the Study

In this research study, the researcher took a critical look at efficient and effective personnel management in small and medium scale enterprises (A case study of selected small and medium scale enterprises in Uyo). The research work was divided into five chapters.

Chapter one was on the background of the study, as well as statement of the problem, objectives of the study, research questions, statement of hypotheses, significance of the study scope and limitations of the study, organization of the study and definition of terms.

Chapter two reviewed the related literature on the subject matter and the contributions of different authors.

Chapter four takes care of the data presentation, analysis and interpretation, testing of hypotheses as well as discussion of findings.

Chapter five (5) encapsulates the summary, findings, conclusion and recommendations made by the researcher.

1.10 Definition of Terms

Personnel: Employees or office staff in an organization.

Management: The executives of an organization especially the senior executives

Employee Training: Employee Training is a learning process that involves the acquisition of skills by employees to enable them increase their performance.

Recruitment: The process or art of finding qualified candidates for a post in an organization.

Productivity: The rate at which goods or services are produced by a standard population of workers.

Effective: Having the power to produce a required effect or effects.

Efficient: Making good, thorough or careful use of resources, not consuming more than is needed.

Survey:  To investigate the opinions or experience of (a group of people) by asking them questions. It is also defined as a general view, examination or description of someone or something.