CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Employees join organizations in order to satisfy a plethora of needs; any contrary outcome brings dissatisfaction to them, and consequently lowers organization’s performance. In the world generally, and in Nigeria in particular, all the sectors of the economy are passing through economic strangulation. The above scenario is not only as a result of lack of managerial skills or employees incompetence, but also due to poor motivation in the form of poor salary (reward). As a result of the above, workers
express their disgust by way of withholding their output, and by producing many rejects; this Taylor called “Systematic Soldering”. Despite the long-standing difficulties of establishing an effective link between pay and performance, and a catalogue of attempts which have often generated organizational disorder, a review of personnel management literature over the last decade suggests that performance pay is again attracting considerable managerial and research interest. In the companies under study, different types of rewards have been put in place, but the most dynamic and arguably, the most topical reward policy of the companies is performance pay. A satisfactory reward system administration by employers and the consequent improvement in performance of employees is a fulfillment of the exchange of value. Unfortunately, a radical departure from this primary goal has become a peculiar and permanent feature in Nigerian organizations, to the extent that many business organizations persistently complain of low employee productivity, while at the same time overlook the displeasure of employees with poor reward.
Commenting on effective reward, Nwachukwu (2000), noted that
One of the challenges confronting human resource managers
is how to make pay fit the needs of the recipients, in an
attempt to overcome this problem, many organizations provide
different types of reward/incentives accordingly to suit different
employees at different levels in the organization.
1.2. Statement of the Problem
Organizations all over the world continually explore various ways by which they can reposition themselves so as to achieve business sustainability and economy of scale. In so doing, they adopt different strategies. An organization as a system is made up of five (5) essential factors (sub-systems) that combine to make production possible such as land, labour, capital, entrepreneur (management) and information; (Ottih, 1996, and Lawal, 1994).
However, management and (labour) human resources are the major coordinating factors that make other variables to work (function). Paradoxically, most managers
instead of proper lubrication of the labour force by way of good reward system prefer to take adequate care of the machines regularly, and also replace the old ones with the latest technology available, thereby relegating the most important factor human beings to the background.
The relegation of employees by employers has led employees to manifest their disgruntlement through the withholding of their productivity as is evident in poor quality products or services, production of many rejects and excessive labour turn-over; (Cappelli, 2000).
Reactions to the above problems had led organizations to understudy and put in place different reward systems. In spite of the different reward systems put in place by organizations to address the ugly trend, organizational productivity in Nigeria has remained
at the lowest ebb. It is the extent or otherwise that these reward systems have succeeded, or failed in addressing the issue of productivity that this study was set out to address.
1.3 Objectives of the Study
The general objective of this study is to determine the relationship between poorly structured reward system and performance in the oil industry in Nigeria using selected Oil Companies as the basis for evaluation.
Other Specific Objectives of the study included:
1. To identify the relationship between organizational reward policy and employees ability to perform.
2. To ascertain the effects of reward on labour turn-over
3. To examine different forms of reward systems put in place by Oil Companies with a view to determining their effects on the employees’ performance.
1.4. Research Questions
In order to effectively carry out this study, the following research questions were put forward, to serve as a guide in this study.
1. What are the relationship between organizational reward and employees ability to perform?
2. What are the relationship between reward and labour-turn over?
3. What are the different types of rewards adopted by Oil Servicing Companies
Hypotheses
The following hypotheses were put forward for testing:
H01: There is no significant relationship between organizational reward and
Employees’ ability to perform.
H1: There is a significant relationship between organizational reward and
Employees’ ability to perform.
H02: There is no significant relationship between reward and labour turn-over
H2: There is a significant relationship between reward and labour turn-over
H03: There is no significant relationship between forms of reward and employees’ performance.
H3: There is a significant relationship between forms of reward and employees’ performance.
1.6. Significance of the Study
This study is of immense benefit to different segments of the society. Both government and non-governmental organizations stand to benefit the findings of this study, as it will provide better understanding on how employees reward should be fixed.
Further, the findings of this study if applied by organizations, will serve as a guide to Human Resource Managers and Government Officials vested with the responsibility of fixing workers
salary and other packages, as this will lead to more appropriate reward that can attract and retain competent employees for organizations at all time.
Besides, the study is aimed at extending the frontiers of knowledge, as it will serve as a reference material for future students and human resources managers who may develop interest in studying the best way to improve employee’s performance
Finally, the adoption of the recommendations made by this study, will lead to improved labour, management relationship, which will consequently lead to reduced industrial conflict.
1.7. Scope and Limitation of the Study
This study covered some selected Oil servicing companies within Port Harcourt with staff strength of 206 personnel.
However, due to unavailability of secondary data, difficulty in obtaining
information from respondents and difficulty imposed by security, the researcher was restricted from seeing most of the target audience for the study.
Consequently, the effort of the researcher is concentrated on the following selected Oil Companies, in Port Harcourt: Addax Oil Company, Baker Hughes, Tecon Oil, and SGS Inspections.
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