APPRAISING THE REWARD PROGRAMMES IN MANUFACTURING ORGANISATIONS IN EDO AND DELTA STATES OF NIGERIA
ABSTRACT
    This study appraised the various reward programmes in manufacturing organizations in Edo and Delta States of Nigeria. The study sought to evaluate whether the reward programmes in manufacturing organizations were adequate; examine whether reward programmes could be used to enhance employees’ performance; ascertain whether the activities of unions in the manufacturing organizations could facilitate the implementation of good reward programmes; and investigate whether properly designed work environments could enhance employees’ performance.
     The study adopted the cross-sectional survey research design. Research data were analyzed using descriptive and inferential statistics. Frequency tables, percentage analysis, means, standard deviations, mean difference, and standard error mean were the descriptive measures adopted. The t test for equality of means constituted the inferential statistic.
    The research empirically showed that: reward programmes in the manufacturing organizations in Edo/Delta States were adequate with t-test score of 0.032; reward programmes can be used in the enhancement of employees’ performance with t-test score of 0.000 ; the activities of unions in manufacturing organizations do not have significant impact in the facilitation of the implementation of reward programmes with t-test score of 0.672; and properly designed work environments do not have significant impact in the enhancement of employees’ performance with t-test score of 0.397. The study recommended that manufacturing organizations’ managers should administer rewards contingents upon performance, in order to cause increases in subordinates’ satisfaction.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1    Background of the Study
1.2    Statement of the Problem
1.3    Objectives of the Study
1.4    Hypotheses
1.5    Scope of the Study
1.6    Significance of the Study
1.7    Limitations of the Study
1.8    Definition of Conceptual Terms Used
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1    Introduction
2.2     Theoretical Framework
2.3    Conceptual Framework
2.3.1    Concept of Reward Programmes
2.3.2    Designing a Reward Programme
2.4     Reward Programmes Management
2.4.1    The Total Reward Process
2.4.2    Types of Organisational Rewards
2.4.2.1    Intrinsic Rewards
2.4.2.2    Extrinsic Rewards
2.4.2.3    Monetary Rewards
2.4.2.4    Non-Monetary Rewards
2.4.3    Reward Aims
2.4.4    Reward Criteria
2.5    Rewards Programme/Incentives in Nigeria
2.6      Summary of the Literature Review
CHAPTER THREE: RESEARCH METHODOLOGY
3.1    Introduction
3.2    Research Design
3.3    Sources of Data
3.4    Instrument of Data Collection
3.5    Population of the Study
3.6    Sampling Framework
3.6.1    Determination of the Sample Size
3.6.2    Sampling Technique
3.7    Validity of Instrument
3.8    Reliability of Instrument
3.9    Method of Data Analyses
CHAPTER FOUR: PRESENTATIONS AND ANALYSES OF DATA
4.1    Introduction
4.2    Presentations of Data
4.3    Test of Hypotheses
4.4    Discussion of Findings
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND
         RECOMMENDATIONS
5.1    Introduction
5.2    Summary of Findings
5.3    Conclusions
5.4    Recommendations
5.5    Contribution to Knowledge
5.6    Suggestions for Further Studies
     Bibliography
LIST OF TABLES
Table 3.1:  Proportion of Questionnaire Administration Based On the Population of Study and
      Sample Size
Table 4.1: Sex of Respondents
Table 4.2: Marital Status of Respondents
Table 4.3: Ages of Respondents
Table 4.4: Highest Educational Qualification of Respondents
Table 4.5: Organizational Status of Respondents
Table 4.6: Responses to Items in the Core Subject Matter
Table 4.7: Responses on Adequacy of Reward Programmes
Table 4.8: Responses on Reward Programmes Vs Employees’ Performance
Table 4.9: Responses on Union Activities Vs Implementation of Reward Programmes
Table 4.10: Responses on Properly Designed Work Environments Vs Employees’ Performance
Table 4.11: Test Results for Adequacy of Reward Programmes
Table 4.12: Test Results for Reward Programmes Vs Employees’ Performance
Table 4.13: Test Results for Activities of Unions Vs Implementation of Reward Programmes
Table 4.14: Test Results for Properly Designed Work Environments Vs Employees’  Performance
LIST OF APPENDICES
Appendix – A:        Questionnaire Introductory Letter
Appendix – B:        Questionnaire
Appendix – C:        Manufacturers Association of Nigeria (MAN) Edo/Delta Membership Data
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
In any developed economy, the importance of the manufacturing sector cannot be over emphasized. It is the fulcrum in which the other sectors stand. Unfortunately, in Nigeria, manufacturing sector is in distress, with industries closing down day by day due to the harsh operating environment. There are myriad of challenges responsible for this poor state of affairs. Amongst these challenges are unpredictable government policies, poor supply of basic raw materials, high interest rates on bank lending, policy inconsistencies, ineffective regulatory agencies, insufficient and ineffective infrastructural facilities, dumping of cheap products and low patronage (Okoye, 2005).
Also, the near total neglect of Agriculture has denied many manufacturing firms the primary source of raw materials. Little wonder that many firms now import their basic production inputs that have subjected them to prolonged unfavorable operating environments that they are no longer yielding commensurate return to their investors. The annual report of central bank of Nigeria (CBN, 2004) captures the state of manufacturing sector with the report that its contribution to the nation’s gross domestic product (GDP), was progressively on a decline; from 8.2% in 1990 to 4.7% in 2003 (Okoye, 2005). Similarly, Manufacturers Association of Nigeria (MAN) reported that industrial capacity utilization in 2003 was 48.8% for the first quarter, in 2005 which slides further downwards to 45.3% (Okoye, 2005; Nnadi, 2010). A survey conducted in 2004 by Manufacturers Association of Nigeria (MAN) revealed that out of about 2,500 Southeastern States members of Manufacturers Association of Nigeria, 30% has closed down, 60% are ailing, and only 10% are operating at sustainable level (Okoye, 2005).
Poor salary or remuneration package in both public and private sectors have made demand for locally manufactured goods to be chronically weak. Manufacturers in Nigeria are already in a helpless situation because of their uncompetitiveness  arising from the influx of imported cheap goods into the country, more worrisome is the near collapse of infrastructure, inadequate power supply, dilapidating road network, irregular and high cost of sourcing petroleum products, high telecommunication tariffs, and insecurity of life and property arising from incessant attacks by armed bandits as well as communal and sector clashes (Emoleke, 2007). From the forgoing, it is clear that Nigeria has a fragile and highly vulnerable manufacturing sector with a weak industrial base, which in its present state, cannot sustain expected growth and development. It is unfortunate that the manufacturing sector, which has potentials for wealth creation, employment generation and poverty eradication, is trapped in this web (Okonma, 2005).
However, Borodo (2006) maintains that the new leadership of Manufacturers Association of Nigeria (MAN) will do its utmost best to reposition manufacturers in Nigeria to accept change as a necessity in the face of stiff competition worldwide and adapt production and business processes to match the high tempo of development in the dynamic global business environment. Oshinowo (2007) asserts that the case is pathetic because they are the extreme of the spectrum. Manufacturing firms in the industry are affected by the policy framework in many ways which is not supportive and therefore they lack sustainability. Human resources management is very vital for effective and efficient performance of any organization. Workers in the organization would perform better if they are adequately compensated. Reward can act as a catalyst for improved performance and better productivity.
Adzape (2007) questions, what makes man so unique above all factors of production? Incidentally man constitutes two of four. Reward system is a vital aspect of any organization. It is a measure of the overall commitment and mission of an organization. A properly administered system of reward can provide incentive, quality workmanship and staff performance. Likewise, a poorly administered reward has an opposite effect and may even lead to high staff turnover. A good reward system is successful when the staff interpret its policies as even handed, consistent and relevant (Wilson, 2004). A reward takes into consideration the workers economic and social financial commitments. This over the years found to be one of the policies organizations can adopt to increase their workers performance and thereby increase organizational productivity.
Isamah (1991) opines with almost general acceptance that human factor, along with other factors of production, has an important role to play in productivity increase, so much attention has consequently been focused on the attitudes, feeling and options of industrial employees and on how these relate to their behavioral work, especially, on their performance on the job. Employees expect reasonable compensation and motivation, targeted at inducing hard work within given time frame and to avoid short falls in organizational objectives.
Brunt (1939) cited in Chukwu (2007) observes that, nature has placed mankind under the governance of two sovereign masters pain and pleasure. As human beings, we desire things and conditions that are pleasurable and avoid those that are painful. This is more applicable in organizations where individuals are offering their services in return for payment. Manufacturing organizations should look into this to know exactly what the workers want in return for payment. He maintained that employees exhibit pain when they offer themselves for the task they perform and are in pleasure when they receive what they expect as pay. As rational beings, they expect more pleasure than pain. When an employee is rewarded properly, he identifies with specific goal, and will be ready to increase his tempo and effort to achieve the goal and would also be totally committed.
However, Imaga (2001) remarks that performance appraisal will always exist, it is applied in order to efficiently allocate resources, reward and provide employees with feedback about their work, and maintain fair relationship with group. In his own contribution Mullins (2007) maintains that if your staff does something good, tell them kept it up, put it in writing, send them a memo-something they can keep, put in the company newsletter, add a note to their files, whatever, but make it widely known they did good, this is a quick and cheap method of praising and motivating your team and it lets every one know you are monitoring, praising, motivating. Thus, this study focuses on appraising the reward programmes in manufacturing organizations in Edo and Delta States region in Nigeria.
STATEMENT OF THE PROBLEM
Over the years, manufacturing sector has recorded sustained failure both in capacity utilization and effective delivery of goods and services. As a result, the manufacturing organizations had consistently lost the necessary revenue to further sustain production and adequately reward their workforce. This has further increased the number of poorly motivated workforce leading to increase poor revenue, poor capacity utilization, high labor turnover, poor staff retention etc. The manufacturing sector in Nigeria is characterized with problem of inadequacy of reward programmes and poor implementation of reward programmes. Some of the companies emphasize only pay programmes to the neglect of non-pay programmes. Some of them do not recognize the efforts made by the workers let alone praise them when they perform well. There is also the problem of the extent to which reward programmes would enhance performance. Moreover, performance is multi-faceted. Some companies emphasize some performance factors and neglect others. The performance factors include productivity, profitability, efficiency, effectiveness, leverage, activity, and employee morale (Taljaard, 2003). There is also the problem of dedication and non-commitment because of poorly administered reward. Research by Greene (1976) suggests that leader who administers rewards contingent upon performance cause increases in subordinates’ satisfaction.
Manufacturing sector poor performance in the recent time has made them contributed very low to Gross National Product (GNP). No wonder the World Bank in 2008 gave the contribution of manufacturing sector to the Gross National Product (GNP) as low as 4%, while that of service sector is as high as 25% (Nnadi, 2010). Some of the companies do not use participative management. Employees are not even involved in taking decisions on issues that concerns them. In most manufacturing organizations, the manager and union relationship are conflicting. Some employees depend on the influence of unions in making their organization evolve proper implementation of reward programmes (Isamah, 1991). There is also the problem of the relationship between the work environment and employee performance, some are controllable and some uncontrollable. Some of the manufacturing companies have not embraced the science of ergonomics (Anyanwu and Oaikhenan, 1995). Even in some of the companies, the work environment is not safe and there are a lot of hazards and sometimes workers get injured in the workplace. All these problems therefore, necessitate the needs for the appraisal of the reward programmes in manufacturing organizations in Nigeria.
In view of the above, the study seeks to provide answers to the following research questions:
Are the employees in the manufacturing organizations adequately rewarded?
Can the reward programmes be used to enhance employees’ performance?
Can the activities of unions in the manufacturing organizations facilitate implementation of good reward programmes?
Can properly designed work environments enhance employees’ performance?
1.3 OBJECTIVES OF THE STUDY
The aim of this study is to appraise the various reward programmes in manufacturing organizations in Edo and Delta States of Nigeria. Specifically, the study sought to:
evaluate whether the reward programmes in the manufacturing organizations are adequate;
examine whether reward programmes can be used to enhance employees’ performance;
ascertain whether the activities of unions in the manufacturing organizations can facilitate the implementation of good reward programmes; and
investigate whether properly designed work environments can enhance employees’ performance.
1.4    HYPOTHESES
The following research hypotheses, stated in alternative form, will be tested:
HA: Reward programmes in manufacturing organizations are adequate.
HA: Reward programmes can be used to enhance employees’ performance.
HA: Activities of unions facilitate implementation of reward programmes in manufacturing organizations.
HA: Properly designed work environments enhance employees’ performance.  
1.5    SCOPE OF THE STUDY
This study focuses on appraising the reward programmes in manufacturing companies in Edo and Delta States of Nigeria. The selected companies are as follows:
Seven-Up Bottling Company Ltd, Benin City.
Bendel Feed & Flour Mill Ltd, Ewu.
Delta Bamboo & Plastic Ltd, Asaba.
Eternit Ltd, Sapele.
Beta Glass Plc, Ughelli.
1.6    SIGNIFICANCE OF THE STUDY
This study will be very beneficial to the field of management knowledge. From this study, personnel managers of the manufacturing organizations will be acquainted with the type and methods of reward they should administer to their workforce. The staff of the organizations through the knowledge of this will measure whether the reward offered to them is commensurate to the contribution they made that affects the productivity of the organization. Students of personnel management will through this build their knowledge bank and embrace the significance of applying the right method of reward programmes to employee. In addition, the study will serve as a reference point to students and researchers in subsequent research on other related areas.
1.7    LIMITATIONS OF THE STUDY
Certain nexus of constraints must handicap every serious research work. This work piece cannot be an exception.
Some of the respondents could not volunteer adequate information to the questions that were presented to them. For reasons best known to them, most employees were known to be skeptical about the intentions of researchers and were thus often unwilling and very economical with answers to the questions. Consequently, some respondents suspected that full disclosure of relevant information may be prejudicial to their job security and thus decline to do so. However, by assuring the respondents that the results of this study will be used solely for the stated academic purpose, the researcher was able to sufficiently reduced the limitation that could have arise; and
Secondly, the items in the questionnaire required certain level of educational knowhow for the respondents to respond properly. Specifically, it is required that respondents have adequate theoretical knowledge of management. Anything short of this would have constrained respondents’ ability to provide the appropriate answers. However, the researcher was able to tackle this limitation by focusing on only senior and management staff of the organizations understudied. The reason was that these categories of employees were more acquainted with management theories and the concept of management.
1.8    DEFINITION OF CONCEPTUAL TERMS USED
Programme: French and Bell (1999) defines a programme as a planned course of action that is intended to help an organization achieve its goal. Usually, programmes are subjected to periodic review.
Performance: Koontz and Weihrich (2005) define performance as the extent to which an organization has achieved its objectives.
Production: Agbadudu (2003) defines production as the process of bringing forward, creating, manufacturing or providing services to people’s needs. The process usually starts with a set of inputs and after transformation or conversion, results to an output.    
Productivity: Herman (1987) defines productivity as output of goods and services per unit of input of resources used in a production process. Inputs as applied in the measurement of productivity are expression of the physical or naira amount of goods or services including labour, capital, material, fuel and energy.
Manufacturing: Yallop, Bernard, Bkair, Delbridge, Peter and Wilton (2005) define manufacturing as the making of goods or wares by manual labour or by machinery especially on a large scale. It covers a myriad of inputs, processes and products.
Rewards: Morris (2009) defines rewards to encompass the overall value proposition that the employer offers to the employee. It is a total package that includes compensation (comprising a base-pay, short-term incentives and long-term incentives), benefits (including health, retirement and work life benefits, which account for an increasing portion of the rewards package), and career (including training and development, lateral moves, stretch assignments and career incentives).
Expectancy: Vroom (1964) defines expectancy as the belief that a specific level of effort will lead to a particular level of performance.
Valence: It refers to an individual’s preference for a particular type of reward (Vroom, 1964).
Reward processes:  According to Armstrong (1999) reward processes are based  on  reward philosophies and strategies and contain arrangements in the shape of policies, guiding principles, practices, structures and procedures which are devised and managed to provide and maintain appropriate  types and levels of pay, benefit and other forms of reward.