EFFECT OF PERFORMANCE INDICATORS ON ORGANISATIONAL GROWTH IN NIGERIA (A STUDY OF ENUGU NORTH LOCAL GOVERNMENT AREA IN ENUGU STATE)
ABSTRACT
This research work examined-“Effect of performance indicators on organizational growth in Nigeria, with Enugu North Local Government Area as a case study. The objectives of the study include to find out the right performance indicators for the local government area, investigate the extent to which performance indicators have led to organizational growth, examine the challenges facing local governments in identifying the right performance indicators and proffer solutions to the challenges facing local governments in identifying the right performance indicators. The research method adopted was the survey research method. The major instrument of data collection was the questionnaire. The sources of data were the primary and secondary sources of data. The population of the study was 511, while the sample size of 225 was arrived at using Taro Yamane’s formular. The hypotheses were tested using the chi-square distribution formular. The data collected were presented in tables, using frequencies and percentages and analyzed using inferential statistics. The findings include that performance indicators have not led to organizational growth to a significant extent. The researcher concludes that although the right performance indicators may be used, the effect on the growth of local government may  not be significant. The recommendations include that organizations should always try to apply the right performance indicators and the workers of local governments should be motivated for the right performance indicators to yield results.
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    Research Questions                            
1.5    Research Hypotheses                                               
1.6    Significance of the Study                    
1.7    Scope of the Study                        
1.8    Limitations of the Study                    
1.9    Operational Definition of Terms                     
References                                    
CHAPTER TWO  
REVIEW OF RELATED LITERATURE
2.1    Conceptual Framework of the Study                    
2.1.1    Concept of Performance Indicators (PI)             
2.1.1  Features Of Performance Indicators                
2.1.2    Types of Performance Indicators                
2.1.3    What Makes A Performance Indicator Effective        
2.1.4    Performance Indicator as a Key Decision-Making
Tool                                        
2.1.5    Concept of Organizational Growth                 
2.1.6    Challenges Of Performance Indicators            
2.1.7 Impact of Performance Indicators On
Organizational Growth                        
2.1.8    Extent to which performance indicators leads
to organizational growth.                        
2.1.9    Identifying indicators of organization            
2.2    Theoretical Framework of the Study                
2.2.1 Expectancy Theory                            
2.2.2 Goal Setting Theory                            
2.3     Historical background of Enugu North Local
government area                             
2.4    Empirical Review                            
2.5    Summary Of Literature Review                     
References                                    
CHAPTER THREE
RESEARCH METHODOLOGY
3.1    Research Design                             
3.2    Area of the Study                            
3.3    Sources of Data                            
3.3.1 Primary Source of Data                        
3.3.2 Secondary Source of Data                    
3.4    Population of the Study                        
3.5     Determination of Sample Size                    
3.6    Sampling Procedure                            
3.7    sample distribution                             
3.8    Method of Data Collection/Instrumentation        
3.9    Validity of the instrument                        
3.10 Reliability of the Instrument                    
3.11     Techniques of Data Analysis                     
References                                    
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND Discussion of Findings  
4.1    Data presentation and analysis                 
4.2    Testing of Hypotheses                        
4.3    Discussion of findings                        
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1    Summary of Findings                        
5.2    Conclusion                                
5.3    Recommendations                             
5.4    Contribution to knowledge                    
5.5    Suggestion for further research                
Bibliography                                    
Appendix                                         
Questionnaire                                     
CHAPTER ONE
INTRODUCTION
1.1    Background of the Study
Before interest in the performance of the local government developed in Nigerian in the 1990’s, there were no parameters to measure and monitor the success of the system.  The local governments were seen as a free for all. There was lack of interest in assessing and measuring the revenue generation, grassroot development, payment of workers salaries, establishment of health centers, publics schools, etc. Infact there was nothing that was put in place to evaluate the performance of the local government.  These and more prompted the need to study the effect of performance indicators on organizational growth.
    In the words of Turina (2012:72) a performance indicator is a type of performance measurement that evaluates the success of an organization or of a particular activity in which it engages. However, indicators always exert an impact on the actions and decisions of organizations, despite their initial aim. Whether indicators are simply used to monitor a specific process or explicit introduced to enhance its performance, they act as conceptual technologies, embedding normative assumptions and influencing the behaviour of organizations.  (Noble, 2011:44)
    Crowe (2009:106) opines that in order to measure an  organization’s performance with performance indicators, the organization has to establish clear goals that reflect various areas of the organization, identify the expected result, identify the progress that has occurred so far, determine  the change that has occurred within each area of review and establish the frequency of reviewing these indicators.  To Roberts (2012:66), the issue of the impact of performance indicators on organization is complex and difficult to quantify.  It is strictly dependent on the internal (eg cultural values, size and resources) and external (eg socio-economic) organizational contexts.
    There are some organizations in Nigeria that have been accused of performing below average and no meaningful attempt has been made to measure the performance of these organizations.  The local government is one of the them (William 2010:44).  As the third tier of government, the local government is saddled with the responsibility of bringing development to the grassroot.  They are expected to provide some facilities, like health centres , public schools , maintenance of road, etc, but unfortunately the activities of the local government in Nigeria, calls for concern.  In the words of Ojo (2009:30), the local governments have been accused of mismanaging fund, corruption and their activities seem to go unchecked. Many local governments in Nigeria have not carried out or executed any meaningful project in the last five to ten years.
    Recently, the Enugu State Government tried to assess the performance of all the local governments in the state.  They came up with the result that some performed below average while some performed above average.  More people were inquisitive to know how their performance was measured because even the local governments that were adjudged to perform above average were guilty of not paying workers’ salaries regularly and have not embarked on any meaningful project in the grassroots.  It is based on this backdrop that the research has decided to find out the effect of performance indicators on organization growth, with Enugu North local government area, as a case study.
1.2    Statement of the Problem
If the right performance indicators for a particular organization are not identified, it will lead to a decline in organizational growth.  Moreover, performance indicators differ from organization to organization and even from department to department.  Performance indicators rely upon a good understanding of what is importance to the organization or department. what is important to an organization in the Brewery industry is not likely to be important to a local government area.What is important to the finance department will really differ from the sales department.
    Finally, when the right performance indicators are not identified and applied, it will lead to dysfunctional behaviour, such as absenteeism, late coming and lackadaisical or non- challant attitude among the workers of the organization.
1.3    Objectives of the study
The general objective of the study is to examine the effect of performance indicators on organizational growth. However, the specific objectives are to:
1.     Find out the right performance indicators for the local government area.
2.    Investigate the extent to which performance indicators have led to organizational growth.
3.    Examine the challenges facing local governments in identifying the right performance indicators.
4.    Proffer solutions to the challenges facing local governments in identifying the right performance indicators.
1.4    Research Questions
Based on the objectives of the study, the following research questions were raised.
1.    What are the right performance indicators for the local government areas?
2.    To what extent have performance indicators led to organizational growth?
3.    What are the challenges facing local governments in identifying the right performance indicators?
4.    What are the solutions to the challenges facing local government in identifying the right performance indicators?
1.5 Research Hypotheses
Based on the research questions, the following hypotheses were formulated
Hypothesis One
H0:      There are no right performance indicators for the local government area.
Hi:      There are right performance indicators for the local government area.
Hypothesis Two
H0:  Performance indicators have not led to organizational growth to a significant extent.
Hi:      Performance indicators have led to organizational growth to a significant extent.
Hypothesis Three
H0:    There are no challenges facing the local governments in identifying the right performance.
Hi:    There are challenges facing the local governments in identifying the right performance.
Hypothesis Four
H0:    There is no solution to the challenges facing local governments in identifying the right performance indicators.
Hi:    There are solutions to the challenges facing local governments in identifying the right performance indicators.
1.6     Significance of the Study
So many people will benefit from this study. Among them are the local government, the researcher, the universities, and the general public.
    The local government will benefit from this study because they will understand the various performance indicators needed to measure the performance of the local government.  The researcher will benefit from this study as it a partial requirement for the award of Bachelor of Science (B.sc) in Business Administration. The Universities will benefit as the research work increases their data bank.  The general public will benefit as the study will help in job creation and therefore reduce crime rate in the society.
1.7    Scope of the Study
This research covered the effect of performance indicators on organizational growth.  The geographical coverage of the study is Enugu North local government headquarters at Old Park, adjacent first Bank Nigeria plc.  The research work was conducted between 2015- 2016.
1.8    Limitations of the Study
The researcher encountered some impediments in the course of carrying out this research work.  Among them were finance, time and uncooperative attitude of respondents.
•    Finance: The researcher spend some money on transportation and in browsing and printing out relevant materials, related to the research.
•    Time:  The researcher use part of the time for lectures and assignments to carry out this research, this made the researcher to miss some lectures.
•    uncooperative Attitude of Respondents:  The respondents of Enugu North local government area were reluctant with giving out information, but when they confirmed that the research was purely for academic purpose they gave out useful information necessary for the research work.
1.9    Definition of Terms
The following terms were defined to help clarify the work.
-    Performance Indicators:   This is a type of performance measurement, which is used to evaluate the success of an organization or of a particular activity in which it engages.
-    Organizational Growth:  This can be defined as an increase in the net profit, revenue etc of an organization.
-    Effect:  This can be defined as either a positive or negative impact of something on another.
REFERENCES
Crowe, P. (2009), The Key Performance Indicators in the Manufacturing Sector? International Journals of Business and Management 3(5); 106
Noble, F. (2011), Identifying Indicators of an ailing organization. New York; Prentice – Hall
Roberts, D. (2012), Business Environment and Enterprises Performance: Problems and Prospects. Journals of Sustainable Development. 9(12); 66
Ojo, W. (2009), Key Performance Indicators in Manufacturing business in Nigeria: Journals of Management Science. 3(7);30.
Turina, A., (2012), Impact of Performance Indicators on Organizations. Journals of Management Sciences. 7(5); 72
Williams, L. (2010), False Economy. Lagos; Penguin Publishers