THE IMPACT OF REMUNERATION ON WORKERS PERFORMANCE AMONG NIGERIAN WORKERS

(A CASE STUDY OF NIGERIAN NATIONAL PETROLEUM CORPORATION, ELEME REFINERY)

CHAPTER ONE

INTRODUCTION

1.0 INTRODUCTION

The national labour congress made an observation that is still valid. The board observes that “there is no single factor in the whole field of labour relations that does more to break down morale, create individual dissatisfaction, encourage absenteeism, decrease labour turnover, and hamper production than obviously, unjust inequalities in the group within same plant” wage and salary differentials are mark of social status in almost every organization. If they do not correspond to the relative significance of jobs, as employees view them, the employee’s sense of justice is outraged hence “ cognitive dissonance” according psychologists would be the order of the day. Ezeali and Esiagu (2009:112). According to Edward E. Lawler 111,(2008) ,the more important pay or remuneration is, the more power it has to motivate behaviour. Increasing the importance of pay will therefore increase it’s power to motivate. An underpaid staff is les creative and will be of great waste than assets to the employer”. It has been observed that many instance of industrial unrest and strike actions witnessed in Nigeria and many other parts of the world today are due to the perceived inequity in remuneration of workers.

The Nigerian national petroleum corporation, NNPC, was established on April 1, 1977, under the statutory instrument decree No. 33 of same year by a merger of Nigerian national oil corporation, NNOC, with its operational functions and the Federal ministry of mines and power with its regulatory responsibilities.the decree established NNPC, a public organization that would, on behalf of government,adequately manage all government interests in the Nigerian oil industry. The formation was an offshoot of different development in the country’s oil industry. The evolution of the corporation, no doubt was after the first commercial oil find was made in 1956 by shell in Olobiri in present day Bayelsa state.

This was after about half a century of exploration activities in the south western Nigerian where the explorers made numerous bitumen seepage finds. The success of shell in Niger Delta attracted other companies. Since then, the Nigerian oil industry has gone through rapid expansion not withstanding the disruptive effects of the civil war between 1967 and 1970 and of course, the recent community problems which have grounded several operations. Between 1978 and 1989, NNPC constructed refineries in Warri, Kaduna and Port- Harcourt and took over the 35,000 barrels shell Refinery established in Port- Harcourt in 1965. in addition, the corporation constructed several kilometers of pipeline, pump stations and depots for distribution of petroleum products throughout the country and pioneered exploration activities in the Chad basin around Maiduguri. NNPC employs over 16,000 people nation wide and 700 in port-Harcourt refinery Eleme.

1.1 BACKGROUND OF THE STUDY

Remuneration is an important instrument that can insert into the workers, the strong effect to bring out their best in order to attain organizational objectives using Nigeria national petroleum corporation as a case study. Remuneration is concerned with the wage and salary administration for various jobs within particular organization in other words remuneration as a form of compensation is the rewards that individuals receive from organizations in exchange for their labour.

(Obikezie and Obi, 2004)To the employer, the most important obligation he owes his employees is their remuneration. Though, there are some non- financial rewards like praise, recognition and self esteem which workers equally value, the most essential compensation is financial compensation which can either be direct or indirect.

Direct compensation is the financial payment made at the time work is performed examples of direct compensation are; wages, salaries, over time pay, commission and bonuses. Wages are usually distinguished from salaries and refer to direct compensation received by a worker paid according to hourly rates. A worker paid on monthly, semi- monthly or weekly basic received a salary. Workers receiving a salary receiver their pay according to the specific number of hour they work. Beside, wages and salaries workers are also remunerated for their efforts by certain benefits, such benefits are paid during vacation days and holdings.

Indirect compensation are; health care, insurance and pensions.

Before remuneration can make an employee to work very well, it must have to be interms of the effort the job needs in other words a motivating remuneration is the one that is equitable to workers contribution towards the achievement of NNPC port- Harcourt objective.

Therefore, a fair remuneration programme is one that is responsive to this managerial and economic objective and ensures acquisition and maintenance of a regular adequate supply of labour for workers not to feel cheated for a remuneration scheme to satisfy or favour these workers, it must embrace the following:

u  Periodic review of organization’s wages and salary structure to be in tune with the change nature of the environment.

u  Control of differential rate of pay and evaluation of individual and group performance for equitable compensation, through such schemes as incentive payments, merit rating group bonus, overtime payment etc.

The term “workers performance” is very wide it is wide in the sense that it involves diverse aspects of administration and management, such aspect as office environment, office communication, and motivation etc.

Office environment as factor of workers performance affect the performance of workers. Workers today are more educated than before, they are likely to raise questions about their environment of work, since management is in itself a dynamic process; it has to support and address itself to the provision of good environment of work for workers to increased productivity.

Some of the internal conditions suitable for office environment include:-

v  CLEANLINESS: If the office environment is clean it will encourage good health of workers and extension of life and conditions of equipment

v   AVOIDANCE OF OVER CROWING: This permits free movement of both workers and materials as well as enhances effective operational process.

v  TEMPERATURE: Workers and certain machines are successful in cool or air conditioner offices than in hot and noisy areas.

v  VENTILATION: Good ventilation is relevant and necessary for effective office work adequate number of windows that can allow enough into the office is preferred.

v  SANITARY CONVENIENCE: Workers at work need toilets, wash hand basins, water towel, soap etc. for their convenience.

v  LIGHT: The offices should be adequately bright to assist workers especially during clouding periods and peak periods when they have to stay for into the evening.

v  OFFICE PREMISES: Consideration should be given to banks, post offices, restaurants, markets, customers etc.

If all the above conditions is well provided for the workers, definitely their performance will be improved by a certain percentage. Besides the condition of offices the organization should also be responsible in provision of the residential apartment of workers because unhealthy or poor residence Scan make workers to be unhealthy. Likewise a worker can only be able to put up his or her best when healthy.

Therefore, management should care for their workers residential environment.

Communication is also an important tool that is needed by workers for effective and efficient performance of their job in an organization. It is an inevitable tool that links employers and employees in an organization and it is the foundation upon which organization and administration must be build.

Motivation is another tool for workers performance. Motivation affects workers much that is why some workers perform better than other in an organization, as a result of that individuals are motivated by different factors. Based on the above, management should have at their finger tips that they have diverse and unpredictable groups of workers to motivate. This diversity may result in different behavioural patterns which in most cases relate to needs and goals. Some of the factors of motivation are training and development, salaries and wages, benefits, welfare services, understanding between workers and management staff. Workers will prefer to work in an organization where the above motivating factors are well appropriated, because a happy worker is an efficient worker. Therefore, there is no doubt that a motivated workers performance will be improved.

Just as a motivated workers is expected to perform his work properly, if the need or condition of a worker is left unsatisfied, the highly deficient need can lead to frustration,  conflict and stress includes:

1.     DEFENSIVE BEHAVIOUR: This type of behaviour can occur when one trips to project one’s image, absenteeism or withdrawal is part of defensive behaviour.

2.     AGGRESSION: This type of violent action is directed towards an organization by a worker in an improper work performance.

3.     RATIONALIZATION: This is a situation where by a worker explains failure in a manner that is acceptable to other because his/her need is left unsatisfied.

Just as equitable remunerations make workers to be effective and efficient in the same manner, inequitable remunerations and poor workers performance make workers to be ineffective and inefficient as a result of the uninterested attitudes they might put up.

1.2 STATEMENT OF THE PROBLEM

A statement of the problem is what could be referred to as the crux of the matter. It is obvious that if workers lacks workers performance and better or equitable remuneration it will hinder effectiveness and efficiency in the work environment or organization. Since Nigerian national petroleum corporation is concerned in this research work, some problems are identified by the researcher as the resultant of poor performance. These problems are inequitable remuneration and poor workers performance which leads to social ills, ineffective and inefficient in the organization.

To that effect, organization experience failure, inefficient and low output level when employees show case their annoyance by defensive behaviour, aggressive and rationalization.

Therefore, this study attempts to state that the following factors are responsible for poor workers performance in Nigerian national petroleum corporation in port- Harcourt.

1. POOR REMUNERATION: The package of the Nigeria national petroleum corporation is very poor, compare to nature and risks they are exposed to in cause of performing their tasks or duties

2. Lack of internal condition: This has to do with; temperature, ventilation, sanitary convenience cleanliness and light etc. if these factors are not available it will affect workers performance.

3. POOR FRINGE BENEFITS: Certain bonuses and welfare services are not called for.

1.3 OBJECTIVE OF THE STUDY

Objectives is to critically examine the list of available conditions of workers and better or equitable remuneration, their practicability and execution, as well as their importance towards improving the performance of their workers.

Hence, the basic objectives includes;

1. To determine if there is an effect of wages on employee performance.

2. To examine the degree at which incentives affects job satisfaction.

3. To ascertain the level at which indirect rewards affects workers rate of turnover in business organization.

4. To determine if there is any correlation between workers performance and the provision of adequate forms of remuneration.

1.4 RESEARCH QUESTION

1.  Does wages and salaries have any effect on employee performance?

2. What is the degree at which incentives affects job satisfaction?

3. To what level do indirect rewards affects workers rate of turnover?

4. Is there any correlation between workers performance and the availability of adequate forms of remuneration?

1.5 RESEARCH HYPOTHESIS

H0: There is no significant relationship between workers performance and the availability of adequate forms of remuneration.

1.6 SIGNIFICANCE OF THE STUDY

Empirically, the research will serve as a blue print for organizational personnel

who are experiencing decline in productivity as a result of workers performance and the method to prevent future occurrences. It will be of great help at any organizational level and to those who are responsible for the management of a work place-the executives, managers, supervisors, public administrators, government officials and other human resource managers  It will serve as a resource material in business schools, management programmes, training sessions, development seminars and conferences on how best to motivate workers and improve productivity.

1.7 SCOPE THE STUDY

This study covers the case of remuneration and workers performance in Nigerian National Petroleum Corporation, Eleme Refinery.

1.8 LIMITATION OF STUDY

Financial constraint – Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint – The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

However in the midst above mentioned limitation the researcher devotedly ensured that the purpose of the study was actualized.

1.8 DEFINITION OF TERMS

REMUNERATION

Remuneration is the pay or other financial compensation provided in exchange for an employee's services performed. A number of complementary benefits in addition to pay are increasingly popular remuneration mechanisms.

EMPLOYEE PERFORMANCE

Employee performance is defined as how an employee fulfills their job duties and executes their required tasks. It refers to the effectiveness, quality, and efficiency of their output. Performance also contributes to our assessment of how valuable an employee is to the organization.