ABSTRACT

The study examined the effect of employee job stress on organizational performance of SUNU Assurances Nigeria Plc in Lagos state. The study employed the survey design and the purposive sampling technique to select 450 staff across management, senior and junior level. A well-constructed questionnaire, which was adjudged valid and reliable, was used for collection of data from the respondents. The data obtained through the administration of the questionnaires was analyzed using the Pearson correlation analysis.

The results showed that there is positive and significant relationship between Intense workload and productivity of SUNU Assurances Nigeria Plc in Lagos state (r=0.772; p<0.05). Also, a positive and significant relationship was found between Work-life balance and service delivery of SUNU Assurances Nigeria Plc in Lagos state (r=0.896; p<0.05). Furthermore, Job insecurity has significant effect on achievement of SUNU Assurances Nigeria Plc in Lagos state (r=0.772; p<0.05). The results were found to be consistent with empirical findings of past studies in literature.

It is therefore concluded that employee job stress has a significant effect on organizational performance in SUNU Assurances Nigeria Plc in Lagos state. The findings of the study sowed tat, SUNU Assurances Nigeria Plc should employ more employee so each employee giving helping and will be easier; SUNU Assurances Nigeria Plc should established department for complain in every branches; Bank employees should be adequately remunerated through attractive compensation packages in order to avoid job neglection in the firm; Management should lead by example. Management should adhere to laid down rules and regulations in the firm; SUNU Assurances Nigeria Plc should not allow employees do more tan the exact job description apportioned.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Stress is a universal element experienced by employees around the globe (Argyle & Henderson, 2015). Stress has become major problem for employer particularly in developing nations where the employer does not realize the impact of stress on employee performance (Ariani, 2013). It is important to recognize and address properly job stress because it badly affects the employee’s mental and physiological health (Aronsson, 2010). Stress at work is seen as one of the major psychosocial risks of work (Ashfaq, Mahmood & Ahmad, 2013). Work-related stress is one of the problems confronting employees. It is of great concern to employees, employers and psychologists, because of its high growing rate in ill- health, as a result of long working hours of some employees (Baizhan & Croome, 2017). Stress has continued to jeopardize the performance of organisations and reduce employee involvement and negatively affect individuals at corporate levels (Sayeed, 2015). The experience of work and stress is certainly not new for employees continue to experience stress as a result of poor environmental conditions, political uncertainty, poor working conditions and extreme levels of poverty (Sayeed, 2015).

Total African insurance premiums at south Africa declined from approximately US$ 72 billion in 2012 to US$ 61 billion in 2016. In US dollar terms, life and non-life markets in South Africa were among the hardest hit, with premium volumes declining by 24% and 23%, respectively. Non-life premium growth outside of South Africa was flat, while life insurance premiums have risen by about 26% since 2012. However, as several major African currencies, including the South African rand, have weakened substantially against the US dollar in the same period, it is worth examining the impact of currency devaluations on the market (International Association of Insurance Supervisors, 2017).

From 2012 to 2016, the South African rand lost about 45 % of its value against the US dollar. In original currency terms, the South African life insurance market grew by 36% over the same period while non-life premiums rose by about 44 %, which is in sharp contrast to the results in US dollar terms. In particular, global and regional reinsurers reporting in US dollars, Euros or Swiss francs were impacted by these translation effects. In 2016, African life premiums amounted to US$ 40.6 billion, approximately 1.6% of the global market and slightly lower than in 2015 (1.7%) (International Association of Insurance Supervisors, 2017).

South Africa is still by far the largest African life insurance market, accounting for 84% of Africa’s total life premiums in 2016. However, this share declined from 90% in 2011, indicating that other African countries are growing faster and catching up. Overall life insurance premium growth was flat in 2016. While in South Africa premium growth stagnated as well, a few markets, such as Kenya, Morocco, Uganda and Zimbabwe, experienced growth rates well in excess of 10%, Morocco even in excess of 30%, with savings-type policies being the main source of growth in Kenya and Morocco. Funeral covers, which are popular in many African countries, were one of the strongest growth drivers in Zimbabwe. Only very few markets, including Nigeria and Mozambique, recorded declining life insurance premiums in 2016 (International Association of Insurance Supervisors, 2017).

Ngeno (2017), further points out that employee in Nigeria have to contend with low salaries, lack of involvement in decision making, heavy workload, and few opportunities for promotion. Research conducted by Munali (2015) revealed that employees are reporting increased levels of stress which has led to poor health and consequently performance. Work place pressure is growing day by day, people face changing economic and business situations, changing customer expectations and changing expectations from their own role and position in the organization (Mohan, 2013). The role of insurance investments in promoting economic growth cannot be overemphasized. In the last few decades, Insurance industry is one of the key sectors of the Nigerian economy and plays a very vital role in the nation economies to develop sustainable means of improving national economic growth. The business of the insurance industry is such that it provides services in the form of security against general uncertainties which are likely to occur in everyday life, thereby resulting in liabilities that convert to a financial loss (Yinka & Akinlo, 2013). African insurance regulatory authorities play a very important role not only in protecting the insurance markets but also in controlling the outflow of foreign currencies. This task is becoming ever more important throughout the whole continent.

The financial sector in Nigeria according to NAICOM, 2017, consists of the two subsectors, financial institutions and insurance, which account for 89.07% and 10.93% of the sector respectively in real terms in Q4 2017. However, 2017 annual share stood at 86.82% and 13.18% compared to 86.25% and 13.75% in 2016 respectively. As a whole the sector grew at 1.25% in nominal terms (year on year), with the growth rate of Financial Institutions as 3.66% and –14.85% growth rate recorded for Insurance. The overall rate was lower than that in Q4 2016 by –18.49% points, and higher by 5.14 % points than the preceding quarter. Quarter on Quarter growth was 10.10%, while 2017 annual growth was 6.75% as against 10.21% recorded in 2016 (NAICOM, 2017).

The sector’s contribution to the overall nominal GDP was 3.16% in Q4 2017, lower which is than the 3.34% it represented a year previous, but higher from the contribution of 3.04% it made in the preceding quarter. 2017 annual contribution was recorded at 3.37% as against 3.54% recorded in 2016, a fall of –0.17% points. NAICOM (2017), again driven by the Financial Institutions activity, growth of the sector in real terms totaled 0.22%, lower by –2.46% points from the rate recorded in 2016 fourth quarter but up by 6.19% points from the rate recorded in the preceding quarter. Quarter on Quarter growth in real terms stood at 10.02%. Annual growth in 2017 was 1.26% from –4.54% recorded in 2016. The contribution of Finance and Insurance to real GDP totaled 2.84%, lower than the contribution of 2.89% recorded in the fourth quarter of 2016, but higher than 2.69% recorded in the preceding quarter. Annual contribution in 2017 was 3.00% higher than 2.98% recorded in 2016 (NAICOM, 2017).

The productivity of individuals may be reflected in employment rates, wage rates, stability of employment, job satisfaction or employability across jobs or industries. Productivity of enterprises, in addition to output per worker, may be measured in terms of market share and export performance. Rojas and Aramvareekel (2013) identified four major categories of factors that affect the levels of employee’s productivity. They include, management systems and plans such as scheduling, manpower capacities, such as how experienced and motivated is the manpower, what are the working conditions that employees are subjected to, as well as the external environment that the organisation operates. Intense workload may have negative impacts on employee’s productivity and their organization, the quality of employees in particular and the quality of their organisation in general. According to Azizi, Jamaludin, and Mazeni (2010), one of the causes of occupational stress among employees is the heavy workload. Employees who are under pressure perform below in terms of quality of work, dedication, motivation, creativity, commitment to tasks, skills and moral ethics. All these will affect a firm’s excellence, effectiveness and performance (Azman, 2016).

Service delivery is the practice of providing customers with a positive helpful experience when they enter a business, throughout the time they stay at the business, and even after the customer leaves, should they have additional questions or products to return (Thompson & Kolsky, 2014). Service delivery can be improved in any organisation through the integration of service supply chains which may lead to improved service delivery and productivity (Romano & Giannakins, 2015). Work life balance has always been a concern of those interested in the quality of working life and its relation to broader quality of life (Guest, 2012). The concept of work life balance has been abstracted from the job satisfaction level of an employee, which is an extrinsic factor of job satisfaction. It aimed to provide quality of life for an employee at the same time retaining the productivity levels of an employee at the work place. The balance work life score provides an organization with a productive and innovative employee (Greenhaus, 2013), whereas disparity in the work life balance tends to develop depressed and dissatisfied staff (Kofodimos, 2015). Workload will affect morale, organizational performance and the quality of one’s personal life (Bridges & Searle, 2016).

Employee achievement is the single most important aspect of organizational performance. And having one of the most important effect on organizational performance. Despite this fact, most companies have no clue what their employees really think. They operate in a state of ignorant bliss, believing that if their employees were anything less than 100-percent satisfied, organizational performance will be reduced. An employee’s sense of job security is related to whether or not they trust the leaders in the organization. Job security is defined as employees desire to be retained in their current job till their retirement. Human dignity is directly related to job security as it affects the ability of employees to satisfy the basic physiological and security needs (Salami, 2016). Lack of job security and job changes are source of pressures due to fear of skill redundancy and future job change. Undoubtedly uncertain job security and the fear of layoff is also an important source of psychological stress for some, especially during times of economic contraction (William, 2015).

Performance of an employee at his/her workplace is a point of concern for all the organizations irrespective of all the factors and conditions. Consequently, the employees are considered to be very important asset for their organizations. (Qureshi & Ramay, 2016) A good performance of the employees of an organization leads towards a good organizational performance thus ultimately making an organization more successful and effective and the vice versa (Armstrong, 2009). The problems arise for the organizations when employees start perceiving that their organizations are already performing at their level best and with great efficiency then, there is no need for further improvement in their organizations (Summers & Hyman, 2015). The study therefore seeks to examine the effect of employee job stress on organizational performance of a selected insurance firms with the focus on the study of Sunu Assurance Nigeria plc, lagos state.  

1.2 Statement of the Problem

The insurance industry is becoming increasingly important to economic stability and development of many nations as it helps to reduce the burden of risks of individuals and businesses (International Accounting Standards Board, 2017). Growth in insurance industry therefore remains one of the major indices for measuring the level of development of a nation’s wealth, plays very significant roles in the mobilization of investible resources of an economy and gives greater security to the fortunes of the common people among the whole society. However, in Nigeria today, there is a concern and public outcry over a number of challenges that seem to be plaguing the insurance industry. It is a common complaint that insurance companies in Nigeria are performing below expectation as compared to companies of other industries in Nigeria. There is also a public outcry that insurance companies in Nigeria do not settle claims promptly when due, and in most cases only with the intervention of the regulatory bodies (Kumba, 2013; Greene, 2011 and Hagel, Brown & Davison, 2015).

A major problem facing the insurance organization over the last few years is finding ways of retaining and achieving business excellence through the employees. Despite the effort of the insurance companies on mass recruitment exercise, the frequent turnover in insurance companies has been a major challenge faced by several management teams of insurance companies. The Nigerian insurance industry probably has not done very well in the area of motivating its large numbers of staff who are tendering resignation letters at frequent time intervals. This has a negative effect on the performance of insurance companies. The performance of the insurance sector falls from 7% in 2014 to 4.2 % in the second quarter of 2015 (NBS 2015). This is not good for the sector and the nation’s economy at large as it is negatively affecting the scorecard of the sector during benchmarking with some insurance industry in other countries and other sectors within the country.

According to NAICOM (National Insurance Commission), insurance business in Nigeria is not performing well. This business is suffering from cash flow problem, they struggle to settle their claims and lack investible funds. Because of its poor performance investors are chased away, no investor is ready to venture into an investment that will not be viable. Market statistics of a research carried out by Usman (2015) revealed that Nigeria insurance market covers less than five percent of the nation’s insurable population. Usman (2016) also carried out a research on Nigeria insurance market and found out that one of the reasons why this market is failing is as a result of their poor attitude to claims settlement. According to him, many insurance companies in Nigeria have multiple products and multiple branches than what they could cope with hence they are unable to meet up with their deliverables.

The emergence of universal banking in Nigeria which has expanded its scope of activities to include a good measure of insurance service delivery has been a major threat to the insurance companies in Nigeria. Almost every bank in Nigeria has an insurance company as one of its subsidiaries (Aghoghovbia, 2015). Insurance companies are battling to survive due to the harsh economic climate. This has led to the downsizing of the workforce and the emergence of contractual employment. A feeling of uncertainty about the continued existence of jobs and a sense of instability and insecurity has developed amongst employees within insurance companies, which has resulted in low job satisfaction and low job security confidence in the employees. This would most probably and consequently result to poor organisational performance. It is from the foregoing, that this study intends to find out the effect of employee job stress on performance outcomes of organisations in the insurance industry with the focus on Sunu Assurance, plc in Lagos state; Nigeria.

1.3 Objectives of the Study

The general objective of this study is to examine the effect of employee job stress on organizational performance of SUNU Assurances Nigeria Plc in Lagos state. In a bid to achieve that, the specific-objectives will be to:

(i)   determine the effect of intense workload on productivity of SUNU Assurances Nigeria Plc in Lagos state.

(ii) investigate the effect of work-life balance on service delivery of SUNU Assurances Nigeria Plc in Lagos state.

(iii)                 appraise the effect of job insecurity on achievement of SUNU Assurances Nigeria Plc in Lagos state.

1.4 Research Questions

The following questions were posed to guide the researcher’s investigation for this study:

(i)   What is the effect of intense workload on productivity of SUNU Assurances Nigeria Plc in Lagos state?

(ii) How does work-life balance affect service delivery of SUNU Assurances Nigeria Plc in Lagos state?

(iii)                 What is the effect of job insecurity on achievement of SUNU Assurances Nigeria Plc in Lagos state?

1.5 Hypotheses

In line with the objectives of this study and in search of answers to the various research questions above, the following hypotheses were postulated: 

Ho1: Intense workload has no significant effect on productivity of SUNU Assurances Nigeria Plc in Lagos state.

Ho2: Work-life balance has no significant effect on service delivery of SUNU Assurances Nigeria Plc in Lagos state.       

Ho3: Job insecurity has no significant effect on achievement of SUNU Assurances Nigeria Plc in Lagos state.

1.6 Operationalization of Variables

The variables for this study will be operationalized using the different statistical denotations and numerical values.

Y = f(X)

Y = Dependent Variable

X = Independent Variable

Where: Y = Organizational Performance (OPE)

              X = Employee Job Stress (EJS)

Y = (y1, y2, y3, y4)

Where:

y1 = Organizational Productivity (OPR)

y2 = Service Delivery (SD)

y3 = Organizational Achievement (OA)

X = (x1, x2, x3)

Where:

x1 = Intense Workload (IW)

x2 = Work-Life Balance (WLB)

x3 = Job Insecurity (JI)

Functional relationships and equations:

y1 = f (x1) ………………………………………….... f (i)

y1 = β0 + β1x1 + µ ………………………………….eq. (i)

y2 = f (x2) …………………………..………….……. f (ii)

y2 = β0 + β2x2 + µ ………………………………..…eq. (ii)

y3 = f (x3) ………………………………………..........f (iii)

y3 = β0 + β3x3 + µ ……………………………….…eq. (iii)

Where: α = the constant of the equation

          β = the coefficient of the independent variable

µ = the stochastic value/error term

1.7 Scope of the Study

The present study seeks to evaluate the effect of employee job stress on organizational performance. This study will be confined to SUNU Assurances Nigeria Plc in Lagos state. The target population of this study are top, middle and low level staff of SUNU Assurances Nigeria Plc in Lagos state. Stratified random sampling would be adopted in selecting the respondents of the sample size. A well-structured questionnaire would be used to obtain data for this study as well as secondary data would also be assessed. Statistical package for social sciences would be used to analyze the data so that the actual relationship between all major and sub-variables can be seen for proper hypothesis test to be carried out.

1.8 Significance of the Study

Researchers and Academicians: The findings of this research may be beneficial to researchers, academicians and insurance professionals as it adds to the existing body of knowledge in the field of insurance and acts as a spring board for further research in the same area and other related areas, in the financial sector. The findings of the research may act as a reference to middle level as well as senior level managers on key internal parameters to constantly observe when determining the financial health of general insurance companies in Nigeria and adequately address the problem of undesirable performance with the general insurance industry companies in Nigeria.

Policy Makers (Government and Insurance Regulators): This study may be useful to policy makers for example; executives of individual insurance companies in Nigeria may be able to use the findings to assist them in formulating policies to better financial growth and stability. National Insurance Commission (NIC) may borrow from the findings so as to come up with structures, and policies to assist the industry grow and enhance contribution to the Gross Domestic Product (GDP). The findings may also assist the insurance firms in Lagos state who currently are relying on the developed nations insurance experience and knowledge to grow their markets.

Insurance companies in Nigeria and Management: The findings of the research may act as a reference to middle level as well as senior level managers on key internal parameters to constantly observe when determining the financial health of general insurance companies in Nigeria and adequately address the problem of undesirable performance with the selected insurance companies in Lagos state for this study.

1.9 Operational Definition of Terms

Employee Job Stress: the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker.

Organizational Performance: A firm’s performance is measured by the firms’ profitability, market penetration into new markets as well as attractiveness of its products and service to the customers (Ireland, 2011).

Insurance: The process through which individuals known as insurers accept the financial risk of another individual insured for consideration in the form of premiums paid. Within any given economy, the insurance industry is an essential agent for sustainable economic growth and development (Haufler, 2013).

Organizational Productivity: the effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

Service Delivery: is a set of principles, standards, policies and constraints to be used to guide the designs, development, deployment, operation and retirement of services delivered by a service provider with a view to offering a consistent service experience to a specific user community or customer.

Organizational Achievement: the process or fact of achieving something.

Intense Workload: work overload occurs when job demands exceeds an individual’s ability to deal with them. That is the job demands exceed the time and resources available.

Work-Life Balance: the absence of unacceptable level of conflicts between work and non-work demands.

Job Insecurity: The reduction of employees due to financial savings, mergers and acquisitions, restructuring, changing work practices, and outsourcing positions frequently occurs as organizations seek to remain competitive.

1.10 Historical Background of the Study

SUNU Assurances Nigeria Plc was incorporated as Equity Assurance Nigeria on December 13, 1984 and was licensed to underwrite all classes of general business. The company is a corporate member of the West African Insurance Company Association (WAICA) and the Nigeria Insurers’ Association (NIA), the official umbrella of registered insurance companies in Nigeria, as well as The Africa Insurance Organization (AIO). SUNU Assurances Nigeria Plc is the parent company of SUNU Assurances Limited, a Ghanaian subsidiary that started operations in Ghana in 2008.

The company changed its name from Equity Assurance Plc to SUNU Assurances Nigeria Plc with due approval from the shareholders and its regulator, NAICOM.  The approval was dated 29th March, 2018 and a new license as issued by NAICOM.

The name change was necessitated as a result of SUNU Group’s (a foremost Pan-African Insurance Group), recent acquisition of majority stake in Equity Assurance Plc., With operations in 14 African countries and 23 office locations spanning West and Central Africa, SUNU Assurances Nigeria Plc., is positioned to leverage SUNU Group’s vast network of knowledge capital, financial strength and technical resources in our quest to differentiate our offerings and service standards in the Nigerian marketplace.

In addition to strengthening the company’s balance sheet, this strategic investment and name change also provides SUNU Assurances Nigeria Plc. with critical organizational capabilities & competencies which will be harnessed to create and deliver value to our esteemed brokers and clients.

This new name reflects its pan African presence as a full-fledged member of the SUNU Group. The company will continue to operate in its current structure, and our phone contacts remain unchanged. Other than the name change, there is no change in management and we will be providing tailored made products and better service on which SUNU Group has built its reputation across Africa.

1.11 Chapterization 

This chapter will introduce the problem and purpose of the study. It will cover several areas such as the background of the study where the context of the study is defined by providing key discussions of key theoretical approach and findings. The statement of the problem describes the need for research project in terms of the knowledge gap. The importance of the study which describes the value, accrued from conducting the research and the scope of study where the data will be collected from the analysis. Chapter two is about the literature review of the study, chapter three is the methodology use in the study, chapter four is the result and findings of the study, and chapter five is all about the discussions, conclusions, and recommendations of the study.

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