THE RELATIONSHIP BETWEEN EMPLOYEE COMPENSATION AND LABOUR TURNOVER:
A CASE STUDY OF FOUR SELECTED NIGERIAN UNIVERSITIES
The concept of job satisfaction belongs to the subject matter of motivation in management studies which has been the focus of many empirical studies over the years. This project is yet another study on the subject.
In this study, the researcher compares job satisfaction resulting from employee compensation and its impact on high labour turnover among private and public universities in Edo state. Nigeria, the objective of the study is to find out if there is any significant difference in the level of job satisfaction enjoyed by the two groups of workers in the survey.
In the process, four sets of hypothesis were formulated and questionnaires administered to two hundred staffs, a background study by way of literature view was done and the quantum of data collected were all analysed and use in testing the hypothesis.
The finding indicates the high labour turnover experience in private universities results from poor leadership style. The researcher recommends that management adopt personnel oriented participative leadership style.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Statement of Study
Objective of study
Scope of Delimitation of the study
Assumption of the Study
The Research Hypothesis
Significance of the study
Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.0 Review of the related literature
2.1 Theoretical framework
2.2 Concept and definition of job stratification
2.3 Need Satisfaction as aspect of job
2.4 Leadership and job satisfaction
2.5 Work value and job
2.6 Equity theory and job satisfaction
2.7 Job satisfaction and job
CHAPTER THREE: RESEARCH METHODOLOGY
Research design and methodology
Instrument used for data collection
Administration of instrument
Procedures for data analysis
Limitation of the Study
4.0 Data analysis and presentation
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMEDATIONS
5.2 Summary of Research Findings
Appendices CHAPTER ONE
The History of labour have been characterized by constant agitation for increased remuneration. Especially, in the 20th century where employee in manufacturing industry compared their pay with those in sports and entertainment.
Tiger woods puffs his way to over 16 million dollar a year, Arnold Schwarzenegger flexes his way to over 30 million dollar a year and Oprah Winfrey talk her way to over 100 million a year. Countless other top performance in sport, movies and entertainment have long walked away with hefty paychecks Nickel et al. (2002) In Nigeria, the advert of money bag politics has worsened the issue of remuneration. Politician earned millions of naira as official salary. , whereas a professor who studied, do research and worked hard to impart knowledge gets peanuts. They intellectuals in the field of academic reasoned, if the politician can earn much why should they earn less.
Companies don’t just compete for costumers they also compete for employee Nickel et al (2002). Compensation is one of the main marketing tools companies use to attract qualified employees. Yet it is one of the largest operating cost for many organization. The long term success of the firm perhaps even its survival may depend on how well it can control employee cost and optimize their efficiency.
The future of the universities in training intellectual depends on the caliber of staff is able to attract and retain Osagie(2009) When the required staff has been recruited, all attempts should be made to keep them. The various ways are: motivation, remunerating staff through payment of inducement allowance, and given them opportunities for staff development programme.
For example Igbinedion University at inception paid higher salaries and wages which was similar to the public universities. Subsequent salary increase and in particular the monetized salary structures on public universities have set the public universities higher than the private university, which has serious implications for recruitment (Osagie, 2009).
This had led to lack of job satisfaction, in turn resulting high labour turnover. According to Cole as cited in Osagie (2009), the conditions of service in Nigerian Universities are identical. There is temptation for applicant to drift. The teaching staff has continued to seek placement in public universities at the earliest opportunity rather than to new ones.
Cambel and Klein (2000) see a strong link between job satisfaction, interest, remuneration and social recognition among various professional.
Where these are lacking you have high labour turnover – In IRS (Employee Development Bulleted November, 2000) as cited in Armstrong (2003), the point was made that the rate of labour turnover provide a graphic illustration of the turbulence within an organization. High rate of attrition can destabilize a business and demotivate those who attempt to maintain level of service and output against a background of vacant posts, inexperience staff and general discontent. Obviously recruitment, induction and training cost all rise with an increase in labour turnover.
There is need for soft human resource planning which is based on the belief that people are an organization most important resource (Armstrong 2003). Benson in Idahosa University spend N470,943,881 as remuneration out of the income of N 854,339,940 in 2009, N 368,283, 382 out of N 827, 033, 620 in 2010, and N 492, 845, 665 out of N 865,455 730, in 2011, An average of over 50%. (Benson Idahosa University, annual financial statement (2009 to 2011).
According to Armstrong (2003) “turnover may be a feature of negative job attitude, low job satisfaction combine inability to secure employment elsewhere i.e. the state of labour market. On the other hand, turnover is a normal part of organization functioning and while excessive high turnover may be dysfunctional, a certain level of turnover is to be expected and can be beneficial to an organization”.
In today’s unstable market place retaining your most seasoned and talented employees help ensure your organizations strength. It’s more important than ever to put strategies in place to avoid the overarching cost of employee turnover causes, and keep skilled, these results in motivation. (Maclean 2000)
The universities plays major role in capacity development. All over the world investment in University education is a critical component of national development effort. Nation today depends increasingly on knowledge ideas and skills which are produced in Universities.
The issue of Employee Remuneration has become very important more that ever before in the Nigerian Industrial environment. This is because we are operating a depressed economy which has devastated the will of the Nigerian worker. There is high cost of living; the average market price has skyrocketed, house rents are as astronomically very high, transportation is not easily available and when obtained the fares are prohibitive. With the high cost of living eroding the worker’s purchasing power, motivation to work and industrial morale have sagged and there is need to look seriously at those factors that motivate a worker to higher productivity.
According to Amana (1992), motivation in the work place depends very much on the action, inaction, and misactsion of the leadership… (The) good leader integrated the goals, wants and drives of the people with those of the organization and so gets both realized concurrently.
The present study focuses on the universities. The academic knowledge is the hob around which the Nigerian economy rotates. We believe that if job satisfaction is emphasized the motivation and consequent industrial morale will give rise to improved job performance and efficiency of the workers. The organizational effectiveness achieved will spill over to other sectors of the economy and impact on the recovery of our presently battered economy. Following the above awareness, therefore, a topical issue among lecturers and human resources managers now is the relationship between employee remuneration, job satisfaction and labour turnover in the Nigeria universities. Some people believed that the public universities, offer their workers greater job satisfaction. Poor remuneration is responsible for high labour turnover. In private universities considerable stress has been placed on levels of pay, conditions of work, job content, managerial leadership. Social relations and other job satisfaction variables.
There are other critics who believe that there are other dimension to the concept that high labour turnover are not related to pay. They talk of intrinsic rewards that come from the job itself, namely the status of the job, its challenges and the job security offered by the government own universities as well.
It is against the above background that this researcher decide to investigate empirically if there is any significant relationship between the level of employee remuneration enjoyed by workers in both public and private universities. In other words, the focus is on the universities. To this end, therefore, the study is divided into five chapters. Chapter One focuses on the statement of the problem which necessitated the need for the study, the objectives of the study, the scope and delimitation of the study, the assumptions, the research hypotheses and the significance of the study.
1.2. STATEMENT OF THE RESEARCH PROBLEM
The problems created by high labour turnover, are many and varied but basically because dissatisfied worker is an inefficient worker spends time brooding and grumbling instead of applying the time to his or her work. A collection of such dissatisfied and disgruntled workers obviously results into organizational ineffectiveness. The vision of the organization translated into objectives and specific goals are not achieved within the given time frame, and corporate mission is unaccomplished
All employers of labour want to maximize their returns.
In the case of the universities, this means good return on investment resulting from high standards maintain by the universities. As stated in the introduction, we want to narrow the problem to the universities. Not much attention has been given to the problem of job satisfaction in this area as a research output.
If workers are satisfied with their jobs, there will be no industrial conflicts and no adverse effects to the organization. This is why the concept of job satisfaction is very critical.
THE RESEARCH QUESTIONS
In the light of the above problem, the research questions are:
Do poor remuneration lead to high labour turnover?
Do poor incentive scheme lead to lack of job satisfaction?
Can job content variable affect the level of job satisfaction?
Can poor leadership style lead to lack of job satisfaction?
1.3 OBJECTIVE OR PURPOSE OF THE STUDY
This research objective therefore includes the following includes:
To find ourif there is a relationship between remuneration and high labour turnover.
To find out if the poor incentive scheme lead to lack of job satisfaction.
To find out if poor leadership lead to lack of job satisfaction.
To find out if there is significant different in the effect of job content variable among both private and public universities.
1.4 SCOPE AND DELIMITATION OF THE STUDY
The study is limited to four universities in Edo State namely, University of Benin, Benin City, Edo State University, Ekpoma, both federal and state owned university respectively and Igbinedion University, Okada, and Benson Idahosa University, Benin City. This two are privately owned universities.
The idea of limiting this study to these universities is due to financial constraints and the short time available for the study. A much larger area of investigation will involve more expenses in terms of transportation and the cost of hiring field workers. Also one might not be able to complete the data analysis within the time limit and produce the report.
The survey is further limited to a sample of 200 workers, 50 for each universities and the scope is limited to finding out if there is a significant difference in the levels of job satisfaction enjoyed by workers in the publicly owned universitites and their counterparts in the privately owned. It is basically a comparative study. It is not in inept analysis of variance which will require a more rigorous application of statistical methods not favoured by time limit. As reported by Larry Doll (1973) in Mullins (2007) the concept of job satisfaction is multi-dimensional. The scope therefore is also very wide. The number of studies on the subject which runs into thousand is proof of the magnitude (Gruenberg, (1976) in Jones (2006).
1.6 ASSUMPTIONS OF THE STUDY
The study assumes that there is a relationship between the levels of employee remuneration and job satisfaction in Nigerian University. The relationship is assumed to be causal or functional such that changes in the level of job satisfaction exhibited by the workers.
The researcher, however, also assumes that not enough attention is given to the effect of remuneration on the level of job satisfaction enjoyed by lecturers.
The University workers like other employees are assumed to have a component attitude toward each of the various aspects of jobs such as pay, working environment, job content, promotion opportunity and so on. i.e the job satisfaction variables. The workers are also assumed to have a composite attitude about the job as a whole. That is they have generalized attitudes towards their jobs based on valuation of different aspects of the job. The feeling is general; not based on the characteristic or the other.
THE RESEARCH HYPOTHESIS
HO: There is no significant relationship between the level of employee remuneration and labour turnover.
HO: There is no significant relationship between incentive scheme and labour turnover
HO: There is no significant relationship between leadership style and job satisfaction.
HO: There is no significant relationship between job content variable and the level of job satisfaction.
1.8 SIGNIFICANCE OF THE STUDY
This study has both academic and social significance. Academically the study will arouse interest in further research in the area.
Students and University lecturers may want to replicate the study in order to asses its validity. Analysis of variance can also bring out more variables for further investigation. Funds may be made available for further research so that the issue of private Universities and commercialization can be re-addressed. The subject can be looked at in its proper perspective for rational optimization of the benefits. This project should therefore be looked upon as a base line study which would stimulate more complex studies thereafter. Employee Remuneration is a multi-dimensional concept. There is a need for researchers to look at its various variables and relate them to job performance. The study by this researcher will also help to increase the number of available literature in the field.
DEFINITION OF TERMS
Labour Turnover: the rate of which an employer gains and loses employees
Job Satisfaction: this is the extent to which the individual need are satisfied and the extent to which the individual perceives that satisfaction are steaming from the total job
Public University: University owned by either the state or federal government
Private University : University owned by individual or mission
Fringe Benefit: Benefit such as sick leave pay, vacation pay, pension plans and health plans that represent additional compensation to employees
Recruitment: The set of activities used to obtain a sufficient number of the right people at the right time it purpose to select does who best meet the need of the organization.
Operating Cost: The cost of running the day to day activities in an organization that is expensed.
Soft Core Human Resource Planning: This is concerned with ensuring the ability of people with the right type of attitude and motivation, who are committed to the organization and engaged in their work and behave according.
Armstrong (2003). Human Resource Management
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Aqullion. Etal (2003). Fundamental of operational
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Campbell D.P & KLEIN KL (2010). Job Satisfaction and
vocational interest. The vocational guardians quarterly. 24(2), pp. 125-151.
Gruneberg M. M., (1976). Job Satisfaction: A Reader, in
Mullins (2007). management of organization behavior. London, Prentice hall
Haralambos, (2009) p. 270, Sociology, Themes and
Perspectives, New York: Wiley and Sons Publishers.
Larry Doll, (1973). A multi-dimensional study of Job
Satisfaction and Performance. In Mullins (2007) management of organization behavior. London, Prentice hall.
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