COMPENSATION SYSTEM IN NIGERIAN CONSTRUCTION INDUSTRY … ANULIKA S..… · COMPENSATION SYSTEM IN NIGERIAN CONSTRUCTION INDUSTRY (A STUDY OF ARAB CONTRACTORS NIGERIA LIMITED ENUGU

COMPENSATION SYSTEM IN NIGERIAN CONSTRUCTION

INDUSTRY (A STUDY OF ARAB CONTRACTORS NIGERIA

LIMITED ENUGU STATE)

By

OKORONKWO ANULIKA S.

REG. NO: PG/MBA/09/54161

DEPARTMENT OF MANAGEMENT

FACULTY OF BUSINESS ADMINISTRATON

UNIVERSITY OF NIGERIA ENUGU.

AUGUST, 2011

ii

COMPENSATION IN NIGERIAN CONSTRUCTION INDUSTRY

(A STUDY OF ARAB CONTRACTORS NIGERIA LIMITED

ENUGU STATE)

By

OKORONKWO ANULIKA S.

REG. NO: PG/MBA/09/54161

BEING A RESEARCH PROJECT SUBMITTED TO THE

DEPARTMENT OF MANAGMENET IN PARTIAL FULFILMENT OF

THE REQUIREMENT FOR THE AWARD OF MASTERS OF

BUSINESS ADMINISTRATION DEGREE.

FACULTY OF BUSINESS ADMINISTRATON

DEPARTMENT OF MANAGEMENT

UNIVERSITY OF NIGERIA ENUGU.

AUGUST, 2011

iii

CERTIFICATION

This is to certify that Okoronkwo Anulika, S. with registration number

PG/MBA/09/54161 actually carried out this research work

………………………… ………… ……… …..

OKORONKWO ANULIKA .S. DATE

……………………….. ………… ……… ….

PROF. EWURUM. U.J.F. DATE

(PROJECT SUPERVISOR)

……………………….. ………… ……… …..

PROF. EWURUM. U.J.F. DATE

HEAD OF DEPARTMENT

iv

DEDICATION

This research work is specially and specially dedicated to God

Almighty for his love, infinite mercies, protection throughout my

career in this institution.

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ACKNOWLEDGEMENT

The research is profoundly and immensely grateful to her Project

Supervisor Prof. Ewurum U.J.F. for finding time to supervise and

guide her at every state of this research work.

Special thanks go to Head of Management Department Prof

Ewurum. U.J.F. for his fatherly advice and words of encouragement.

My appreciation goes to my precious mother, Mrs Okonkwo

Mary for her motherly love, inspiration and moral support.

Also to my siblings for their v arious contributions both morally,

financially and prayers. My appreciation goes to Mr Nelson Ilo for

encouraging me into pursuing this progamme. Special thanks to my

friend Ony iye for accommodating me in her house each time I came

down from Abakiliki to Enugu for my lectures.

Also to my friends within and outside the school for their

prayers.

I cannot end this credit line without appreciating the help I got

from Mr Ejima so far.

And to all the lecturers in my department for the quality education

they imparted to us.

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ABSTRACT

This research work assessed Compensation System in the Nigerian

Construction Industry with specific reference to Arab Contractors Nigeria Limited

in Enugu State. The research work tried to examine the compensation system

applied on the Nigerian Construction Industry and to formulate remedies as to

how to enhance its effectiveness and efficiency in its administration. To achieve

the above research objective, three research hypotheses have been advanced to

include that equitable compensation does not result in high productivity and

achievement of organizational goal; organization that are practicing total

compensation for their employees are not likely to succeed and that construction

companies having 50% - 60% of their workforce does not need to engage in

total compensation for their workers. The study uses the survey research

method. The population of the study constitutes the staff of Arab Contractors.

The sample for the study was selected by using simple random sampling

procedure. The findings of the study include the followings; that equitable

compensation result in high productivity and achievement of organizational goal;

that organization that are practicing total compensation for their employees are

likely to succeed and that construction companies having 50 – 60% of their

workers need to engage in total compensation for their workers. Based on the

above findings, the following conclusions and recommendations are hereby

made. It was concluded that any organization that fails to recognize the essence

of adequate compensation and its impact on both employees and employers is

doing a lot of disservice to itself. For a business to progress, all the stakeholders

in the business must be happy in order to contribute their respective quotas. It

was recommended that construction firms should encourage indirect

compensation system. This is a long-term plan, which benefits both the

employees and the employers. Organization that implement this in other parts of

the world gain in the long run and our country should not be an exception.

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TABLE OF CONTENTS

Title page … … … … … … … .. i

Approval page … … … … … … … ii

Dedication … … … … … … .. …. iii

Acknowledgement … … … … … … iv

Abstract … … … … … … … … vi

Table of contents … … … … … … … vii

Chapter one: Introduction … … … … 1

1.1 Background of the study … … … … 1

1.2 Statement of the problems … … … … 8

1.3 Objectives of the study … … … … … 10

1.4 Scope of the study … … … … … 11

1.5 Research hypotheses … … … … … 12

1.6 Significance of the study … … … … 13

1.7 Limitations of the study … … … … 14

1.8 Definition of terms … … … … … 15

Chapter Two: Literature Review 17

2.1 Introduction … … … … … … 17

2.2 Definition of Compensation … … … … 18

2.3 Motivation and job satisfaction … … … 26

2.4 National Minimum wage … … … … 40

2.5 Wages and salary Administration … … … 41

2.6 Meta goals of compensation and Reward System 46

2.7 Compensation Strategies … … .. … 49

2.8 Importance of Total Compensation … … 51

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Chapter Three: Research Design and Methodology 54

3.1 Research Design … … … … … … 54

3.2 Area of the study … … … … … … 54

3.3 Population of the study … … … … … 55

3.4 Sample and Sampling Procedures … … … 55

3.5 Instrument of data Collection … … … 56

3.6 Validity of Research Instrument … … … 57

3.7 Reliability of test instrument … … … … 58

3.8 Method of data collection … … … … 58

3.9 Method of data Analysis … … … … 59

Chapter Four: Presentation, Interpretation and

Analysis of Data 60

4.1 Data Presentation … … … … … 60

4.2 Data Analysis … … … … .. …. 61

4.3 Hypotheses Testing … … … … … 79

Chapter Five: Summary of Finding, Conclusion,

Recommendations and Suggestion 89

5.1 Summary of findings … … … … 89

5.2 Conclusion … … … … … … … 90

5.3 Recommendations … … … … … 92

5.4 Suggestion for further studies. … … … 94

Bibliography 96

Appendices 98

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CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Although all manages are intimately involved in solving

problems in their areas and are held responsible for problems arising

from their areas, it is generally agreed that for consistency, efficiency

and equity, a central unit stands a better chance of providing,

supporting personnel services and guidelines for carry ing out

management personnel functions. These unit is called personnel

department, human resource department, employee relations

department and in some unionized organizations it is called industrial

relations department (Ugwudioha, 2003:1).

In any organization, it is therefore, the personnel department

that ensures that the organization provides adequate compensation

and good working conditions, which will enable the employees to

contribute highly to the organizational growth. The major functions of

personnel department of any organization includes the following:

i. Employment, placement and personnel planning

ii. Compensation and benefits

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iii. Training and development

iv. Health, safety and security

v. Employee and labour relations

vi. Personnel research (Ugwudioha, 2003:1).

In dealing with personnel issues, personnel managers make use

of personnel manual. Personnel manual contains a brief description

of personnel policies. It is in form of a handbook describing every

section of the policy guidelines in relation to personnel issues. It

serves as a reference book in respect of personnel issues.

Compensation is one of the major issues involved in personnel

administration. Some of use who are professional manages have

identified personnel administration as one of the major tasks facing

the management of any organization. This is because human

resources management takes a different dimension and approach

from the management of material resources. Human beings can

think, move and respond to stimuli while material resources cannot.

This makes it imperative for management of most successful

organizations to incorporate in their policies adequate compensation

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and motivation for their employees in order to achieve their

organizational objectives.

If human beings are not well compensated and motivated, they

will not contribute effectively to the management and control of

materials and other resources for attainm ent of organizational goals.

Well compensated/ motivated employees contribute highly to he

organizational growth and creation of wealth for the organization and

is shareholders. Most successful organizations engage in total

compensation for its employees for attainment of their organizational

goals.

Total compensation involves the assessment of employee

contributions to the organization in order to distribute fairly and

equitably, direct and indirect rewards in exchange for the employee s

performance. Total compensation is made up of extrinsic and intrinsic

rewards. Extrinsic reward is made up of direct and indirect rewards

while intrinsic is related to job status and security (Dunn and Rachel,

1995:265).

xii

This research work deals extensively with compensation system

in Nigerian Construction firm with specific reference to Arab

Contractors Nigeria Limited, Enugu State.

Arab Contractors Engineering Limited is a multinational

organization and one of he construction giants in Nigeria. The

company is rated number three in construction industry in Nigeria.

The company s major line of business is construction and civil

engineering works, with main emphasis on road construction. It s

major clients are the World Bank, African Development Bank, Federal

Ministry and State Ministry of Works and Housing.

It has branch offices in many parts of the country.

Organizations that pay attention to equitable distribution of rewards

draw their roots from Mayo s management theory, which is the

beginning of human relations movement.

Eltaon Mayos theory of human relations. Courtland L. Brovee,

John v. Thilli, Marian Burk Wood and George P. Dovel (1993:53);

International ed.) sated that the controversy that trailed Howothrone

studies prompted Mayo to search for a better understanding of

human relations in organizations. Mayo was concerned that social

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order has come unglived by the move from agrarian, family -oriented

society to a more chaotic, technological oriented industrial society.

He believed that management was more focused o n satisfying

material and economic needs than unfulfilling the human needs of

individuals who work for the organizations. To restore meaning to

work and to help employees feel more socially satisfied he believed

that organization needed to consider individuals and heir interaction

in the work place. The human relations movement that evolved from

this thinking is the school of management thought that sees

employees behaviour as responsive to the interpersonal processes

within the work unit.

Mayo s theory directs our attention to the following:

i. That management should not focus emphasis on only economic

and material needs, but should also lay emphasis on fulfilling

human needs for individuals working in the organization.

ii. That organization should consider individuals and their

interactions in a work place.

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iii. That the world has developed from agrarian society to an

industrial, technological and now “an information age” with a

more dynamic way o handling human and material resources.

The human relations movement that evolved from this thinking

is a school of management thought that sees employees behav iours

as being responsive to the interpersonal process within the work unit.

To apply the human relations theories, however, managers would

have to act more collaborately and would need good social skill as

well as technical skill. Organizations that engages in total

compensation tend to benefits the following:

a) To attract potential job applicants in conjunction with

recruitment and selection efforts; the total compensation

programme can help to ensure that pay is sufficient to attract

the right people, at the right time and for the right job.

b) To retain good employees: Unless the total compensation

programme is perceived as internally equitable and externally

competitive, good employees (those the organization want to

retain) are likely to leave.

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c) The motivate employees: While non-monetary awards may

influence an employee s motivation; performance – based pay

has been shown to be the most effective motivator. Still,

because of individual differences and preferences, organizations

must determine the correct blend of monetary and non-

monetary rewards.

d) To administer pay within legal regulations because several legal

regulations are relevant to total compensation, organizations

must be aware of them and avoid violating them in their pay

programmes.

Arab Contractors O.A.U Nigeria Limited was established in 1991

with the objective of contributing to the great developmental efforts

taking place in Nigeria. Within a short period of ten years; we have

the privilege of successfully completing several projects and giving

employment to over 300 Nigerians. Dams, Bridges, Culverts and

Protection, irrigation and Hydraulic structures such as Weirs, Builders,

Spillways, Ducts and Channels, schools, Hospitals, Buildings.

xvi

1.2 Statement of the Problem

Personnel administration is very pivotal to the growth and

wealth creation of any organization. Personnel administration is said

to be good if it can compensate and motivate its employees to enable

them to put in their best performances in the organization. Some of

the problems associated with total compensation include the

following:

a) Negotiation and bargaining period of total compensation

system is difficult. This is so because, some portions of total

compensation are not backed up by laws/legislation but by

negotiation and bargaining processes. Sometimes, the

employer proves very difficult to negotiate with. While the

employee wants the highest and the best package, the

employer would like to minimize cost as much as possible for

profit maximization.

b) Bad and depressed economic condition in Nigeria makes it

difficult to fully implement a total compensation system. The

employers usually cite prior economic condition as their

excuses. On the other hand, the employee who knows his

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worth usually cite his contributions to the growth of the

organization as his reason for the demand for a better

condition.

c) Most employees of labour in Nigeria disregard labour laws and

edicts. Sometimes, this situation leaves the dejected employees

with no other condition than to accept what is offered to them,

otherwise they will face unemployment consequences. There

were some cases where employees were fired for not accepting

paltry compensation.

d) In Nigeria, especially expatriate firms, there are significances

difference between the wages of expatriate staff and the wages

of Nigerian staff. Sometimes, an expatriate staff having the

same qualification and experience with Nigerian staff may be

paid $4,000 (N550,000.00)/month while a Nigerian staff may

be paid N300 (N430,000.00) month. This situation causes

dissatisfaction between the expatriate staff and Nigerian staff

and sometimes causes industrial unrests.

e) Workers in construction industry are casual workers and thus

cannot receive a total compensation package. They are not full

xviii

employees and therefore cannot receive full entitlements.

Efforts by Nigerian labour congress and construction workers

union to regularize the conditions of all the casual workers who

have spent up 90 days in any organization have proved

abortive. This group of workers is up to 50% - 60% of

construction workers in Nigeria.

f) Fear of losing one s job makes it impossible for him to demand

for an improvement in his working conditions. Some workers

may know their rights but they cannot demand for them for

fear of losing their jobs.

g) Each time government increases public service wages, private

sectors are usually told to go and negotiate with their

employers. This negotiation is difficult, as employers will always

come out victorious most of the time.

1.3 Objectives of the Study

The broad/major objective of this research work is to examine

compensation system in the Nigeria construction industry with

reference to Arab Contractors Nigeria Limited in Enugu. Other specific

objectives are as follows:

xix

i. To examine whether equitable compensation results in high

productivity and achievement of organizational goal.

ii. To examine whether organization that are practicing total

compensation for their employees are more likely to succeed.

iii. To find out whether construction companies having 50% - 60%

of their workers need to engage in total compensation for their

workers.

iv. To make recommendations based on the findings of this study

on how best to apply the system in Nigerian construction

industries.

1.4 Scope of the Study

The work covers compensation system in Nigerian construction

firms with specific reference to Arab Contractors Engineering Limited,

Enugu. It X-rays the issues involved in compensation system in the

firm with a view to providing a framework for future solutions. The

work lays emphasis on the following areas.

i. Compensation system in Nigerian construction firm.

ii. The forces acting for and against such a system.

iii. Different ways of implementing such a system

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iv. Legal issues involved in this dispensation.

v. Issues involved in wages/salary administration

vi. The scope covers direct and indirect compensation in private

organizations.

1.5 Research Hypotheses

In order to facilitate date collection so as to arrive at

conclusion, the following hypotheses should be used as a guide to

the study.

Hypothesis I

Ho: Organization that are practicing total compensation for their

employees are not likely to succeed.

Hi: Organization that are practicing total compensation for their

employees are likely to succeed.

Hypothesis I

Ho: Construction companies having 50% - 60% of their workers

does not need to engage in total compensation for their

workers.

H2: Construction companies having 50% - 60% of their workers

need to engage in total compensation for their workers.

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Hypothesis III

Ho: Equitable compensation does not result in high productivity and

achievement of organizational goals.

H3: Equitable compensation result in high productivity and

achievement of organizational goals.

1. 6 Significance of the Study

The significance of this study will include the followings:

The study will be of great significance to various stakeholders

including government, the case study establishment, employees,

labour unions and the general publics on how to improve the

compensation system in the Nigeria Construction industry.

The study will hopefully create awareness by exposing the

construction industries in Nigeria especially Arab Contractor Nigeria

Limited in Enugu metropolis to the dangers of not compensating their

employees well. It will equally highlight the benefits they stand to

enjoy when total compensation plan is recognized as an important

pre-requisite for successful compensation of their employees. Such

exposure will help the Arab Contractors take a prompt action that will

yield positive results.

xxii

Also, investigating the issue could provide additional insights

and perhaps evidence on the compensation system in the Nigerian

construction firms. This will surely enrich the management literature

on this issue.

Additionally, the results of this study would provide

management of construction firms better insights on how to improve

in their compensation system.

The study will serve as a springboard for present and future

researchers who intends to carry on similar research work on

compensation system in other sectors in Nigeria.

1.7 Limitations of the Study

During this research work a lot of constraints and limitations

were encountered. Some of constraints were usual constraints

encountered during the course of such academic exercise while some

were unusual and boring.

Collection of primary data for this study was a major constraint,

as the researcher has to be on the field personally in all the data

collection processes. The company s branches are scattered all over

xxiii

the country and to make a comprehensive investigation all the sites

were visited.

Financial constraints also posed a major problem/limitation

during the investigation. The researcher have wanted to carry on the

same type of investigation in a similar firm within the same industry

but for financial constraints.

Time is another limitation encountered during the course of the

study. Time constraint have forced the researcher to concentrate on

compensation system instead of spreading the study to the entire

personal administration.

Sometimes, secondary data collected ware not reliable, hence

they were rejected. A lot of time was spent on the selection and

examination of secondary data for the study.

1.8 Definitions of Terms

Compensation - This is the money and benefits that

organizations give employees in exchange for work.

Wages - These refers to direct compensation received

by an employee based on hourly or piece-rate.

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Salaries - They are pay regardless of specific hours

worked, which can be received weekly or monthly.

Total compensation - This is the process of assessing the

employees contributions to the organization fairly

and equitably direct and indirect rewards in

exchange for his performance.

Intrinsic reward - This is known as non-monetary reward.

Extreme reward - This is also known as monetary reward,

involves direct and indirect compensation.

Motivation - This is the energizing force that induces or

compels and motivate behaviour.

Job satisfaction - This can be defined as a pleasurable or the

appraisal of ones job or job experience.

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CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Compensation (reward system) is a vital subsystem in

personnel administration. Employees are employed in an organization

to expend their times, efforts, energies and expertise in order to

contribute to the attainment of organizational goal. These employees

expect adequate compensation and rewards for their contributions.

The compensation and reward system will therefore enable the

employees to satisfy their personal needs, which include economic

needs, psychological needs, social needs and growth needs.

In view of their above, the review of literature review will focus

on the following areas; definition of compensation, compensation

system in Nigeria Construction firm; the forces acting for and against

such a system; different ways of implanting such a system; legal

issues involved in this dispensation; issues involved in wages/salary

administration, the direct and indirect compensation in private

organization.

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2.2 Definition of Compensation

Many management scientists give different definitions of

compensation according too their understanding of the system. Dunn

and Rachel (197: 42), defined compensation “as a reward for services

rendered by people at the work place”.

According to Stanl (1995:265), “Compensation is the monetary

payment such as wages, salaries, emoluments and bonuses (Current

and deferred) used to reward employ ees”. This definition attaches

only importance to monetary aspect of compensation. It does not

take into consideration the intrinsic reward system, which is a long-

term measures of rewarding and compensating good employees.

Cascio (1987:199) considers compensation rewards as “including

direct financial payments and indirect payments in form of fringe

benefits”. A critical look at this definition can observe that it is not all

encompassing. Cassio s use of the term “fringe benefits” can be

called to question because compensation (reward) system goes

beyond ordinary financial rewards and fringe benefits.

Later Cascio (1995: 18), Mondy et al (1988:24) and Mathis and

Jackson came up with a more acceptable definition of compensation.

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They described compensation as all rewards (direct financial

payments plus indirect payments/benefits play incentives individuals

receive in an organization plus non-compensation rewards), all those

aspects of the pleasant work environment that serve to enhance their

sense of respect and esteem by others.

Hale and Goodale (1986:24) opined that compensation is the

money and benefits that organizations give employees in exchange

for work. Compensation is more explicitly defined as any form of

payment or reward in exchange for work provided for their

employees.

Schuler (1975:42) said that total compensation is the activity

by which organization evaluate the contributions of employees in

order to distribute fairly direct and indirect, monetary and non -

monetary rewards within the organization s ability to pay and within

what is allowed by legal regulations.

Financial payment made at or near the time the work is

performed is called indirect compensation. These include wages,

salaries, overtime, commissions and bonuses etc. Wages, salaries,

overtime, commissions and bonuses etc. Wages refer to direct

xxviii

compensation received by an employee based on hourly or piece

rate, while salaries are pay regardless of specific hours worked,

which can be received weekly or monthly. Indirect compensation

comes in form of insurance, pension, health care, children, golden

parachute, game and awards, golden handcuffs, paid absences, paid

vacations, working conditions, self-realization, vesting, wellness

program, etc.

Ofili (2003: 68) opined that total compensation is the process

of assessing the employee s contributions to the organization fairly

and equitably direct and indirect rewards in exchange for his

performance. Total compensation helps the organization to retain

good employees, enhance competitiveness, growth, survival and

profitability of the organization concerned. This is because human

beings in the organization are responsible for control and

management of materials and other resources for attainment of

organizational objectives. If human beings in the organization are

poorly treated, they will not put in their best performance and this

will consequently affect the overall performance of the organization.

Organizations that fail to embrace total compensation package

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usually experience high rate of labour turnover, and also find it

difficult to face the dynamic and competitive business environment

(Ugwudioha, 2004:68).

Total compensation is classified into two main headings such as

intrinsic reward and extrinsic reward.

An intrinsic reward is simply known as non-monetary reward,

intrinsic reward is made up of the following:

a) Job security

b) Status symbol

c) Social rewards

d) Task/self reward.

An extrinsic reward, which is also known as monetary reward,

involves direct and indirect compensation. Direct compensation

system is subdivided into base wage pay system and performance

based pay system. The base-pay system involves shift pay system

and premium pay system.

Another form of extrinsic reward system is the p erformance

based pay system. This is the equitable form of payment based on

xxx

the performance and contributions of the employees and reward

according to each employee s contribution.

Performance based pay system include the following reward

system;

a) Stock options: The employees are given the option of acquiring

stock and shares in the organization as recognition for his

contributions in the organization.

b) Performance bonus: This type of bonus is given only to workers

who have contributed to the growth of the firm within a given

period. It encourages them to work harder. Most firms in this

technological /information age are using performance bonus to

encourage the workers to put in their best for the organization.

Employers of labour prefer this method to a mere traditional

way of granting annual merit increment. The bonus pay helps

both the employer and the employee in the following ways:

i. It helps the hard worker to improve his living condition while it

also helps the employer to increase the productivity.

ii. It maximizes the relationship between the pay (earnings) and

performance (output).

xxxi

Direct compensation can also come in form of merit pay plan.

Merit pay plan is more commonly used because it is easy to

administer and easy to set up. A guideline is usually set up for

administration of merit pay plan. Incentive pay plan is another form

of direct compensation used in the industries and firm s. This is made

up of individual incentive plan and group incentive plan. This is the

most popular incentive plan method because each person s output is

measured and subsequent reward is given according to the

contribution of the individual concerned. This type of plan is more

common in factories than offices.

The second group of extrinsic reward system is the indirect

compensation. This include public protection programme, paid leaves

and miscellaneous benefits. Some laws and edicts provide for indirect

compensations in public and private sectors but in practice it is

observed that both public and private sectors do not implement this

system fully. In a developing society like Nigeria where employers

exploit the employees, most of these edicts are not implemented.

They hide under the guise of economic depression.

xxxii

The concepts of motivation and compensation are most

discussed and most researched in management science. Renowned

management scientists all over the world have carried out different

researches aimed at discovering the most acceptable compensation

systems in different organizations. The works of some eminent

management scientists are briefly reviewed below:

The Hawthorne Studies:

This research was carried out by three prominent management

scientists like Eiton Mayo, Roethlisberger, F.J. and William J. Dickson.

The Austraisanborn Elton Mayo (1880-1949) – studied the

relationship between people who worked together and was involved

in series of experiments that helped in shaping the development of

behavioural management.

Mayo conducted this experiment which he was in the factory of

Wharton School. The experiment was conducted at a Pennsylvanian

textile mill and found that employees morale and productivity could

be improved by introducing rest periods. The Hawthorne studies

were started in 1924 by the National Academy of Sciences in an

attempt to learn whether changes in illumination had any impact on

xxxiii

employees productivity. The result showed that productivity was

higher when there was illumination.

They also conducted other studies form 1927 – 1937 in which

pay system supervision and other elements were manipulated. At this

point the researchers found once again that productivity has

increased without physical factors like length; timing of rest periods,

length of workday, but with the company provided lunch and

beverages. This experiment revealed that employees, if treated in a

special way would improve heir performance, precisely because of

the special attention. This theory is known as Hawthorne effect.

The Human Relations Movement

The Hawthorne studies moved some steps further by

developing another theory called human relation movement. Mayo

was concerned that the social order had come unglued by the move

from agrarian, family oriented society to a more chaotic,

technologically oriented, industrial society. Mayo and his team

believed that organizations were more focused in satisfying material

and economic needs than on fulfilling the human needs of individuals

who work for the organizations. To restore meaning to work and to

xxxiv

help employees feel more socially satisfied, the theory believed that

organizations needed to consider individuals and their interactio ns at

the workplace.

The human relations movement that evolved from this thinking

is the school of management thought, which sees employees

behaviour as responsible to the interpersonal processes within he

work unit.

Other theories that contribute to human relations development

include Abraham Maslow and Douglass Macgregor.

2.5 Motivation and Job Satisfaction:

Motivation and job satisfaction are very important issues in

management of human and material resources. The two concepts are

very complex to define and sometimes they are interchangeably used

to mean that a motiv ated worker is a satisfied worker (Peretomode

1992:48).

Motivation

The word motivation is derived from Latin word „Movere

meaning to move. According to Ile (1999:245) motivation is a

general term used to refer to the entire class of drives, desires,

xxxv

needs, wishes and similar forces. It refers to the drive and effort to

satisfy a want or goal. In other words, motivation refers to a drive

towards an outcome.

Nwachukwu (1988:181) is of the opinion that motivation is that

energizing force that induces or compels and maintains behaviour.

He maintained that human behaviour is motivated, and it is goal

directed. Vroom (1964:6) defined motivation as a process governing

choices among alternative forms of voluntary activity. Therefore, a

crucial characteristic of motivated behaviour is that it is a goal

directed choice.

Motivation in contemporary psychology according to Ikeagwu

91984:100) encompasses three main problems namely drive, goal

direction or propose, pleasure and pain or nature of a reinforcer.

But motivation according to Dunnette (1976:64) is a label for

9i) the choice to initiate effort; the choice to persist in expending

effort over a period of time to achieve a given performance objec tive.

From this definition, motiv ation has to do with a set of variable,

relationships that explain the direction, amplitude and persistence of

an individual behaviour.

xxxvi

Mathis and Jacksons (1982:12) put it thus “it is an emotion or

desire (needs) wants, drives and other semantically similar words as

9move), operating on a person and causing the person to act.

Motivation according to this definition is much more concerned with

the „whys rather than „hours , the whats and wants of human

behaviour. It attempts to account for the drives inside an individual

rather than describing the individual s actions or behav iour.

Job Satisfaction

Job satisfaction has also been defined by various authors and

management scientists in different ways, which were directed

towards feelings (good and bad) which one has about the work and

the environment that causes one to say that he is satisfied or

dissatisfied with his job.

Middlemist and Hitt (1981:18), Hopock (1985:52) described it

as a pleasurable or the appraisal or ones job or job experience.

Locke 91976) opined that it is an appraisal that must have

taken into consideration, the work content and a combination of

psychological embraces all factors that will make a job satisfactory or

unsatisfactory.

xxxvii

Theories of Motivation and Job Satisfaction

The three main theories on motivation and job satisfaction are

the content theory, the process theory and the integrative theory.

These theories help managers to understand why employees behave

the way they do in the organization.

A) The Content Theories

These theories were developed by Abraham Manslow,

McCelland and Herzbeg but for the purpose of this study, only

Manslow and Herzberg theories are to be discussed briefly here.

i) Manslow’s need Hierarchy Theory:

Bovee, Thill and Wood (1993:53) pointed out that Abraham

Manslow (a clinical psychologist) propounded the needs hierarchy

theory of motivation in organizations. Manslow s theory viewed

motivation as a dynamic force, which activates the individual.

Manslow hypothesized th at in every human being there is hierarchy

of needs.

Clatt et al (1985:14) opined that motivation is simply the drive

to reduce a tension caused by and unsatisfied need.

xxxviii

Donnelly et al (1984:310) saw motivation as a deficiency of

something within the indiv idual and it provides the spark that begins

the chain of events leading to behaviour.

Manslow argued that human beings are not only complex

animals but also have a number of needs affecting their behaviours

in life. These are classified into hierarchy of importance and arranged

into five ascending orders as follows:

a) Physiological needs

Basic physiological needs of hunger, thirst, shelter, sex,

clothing, temperature, etc. Management can positively influence

these needs by providing fair and adequate compensation such as

salaries and wages and working conditions and other incentives that

will enable the employees to put in their best.

b) Safety and Security needs

These needs include physical security, protection against

physical harm, danger, accident, threat pain and illness, economic

disaster or deprivation psychological security and the unexpected.

These needs are taken care of by the management by prov iding safe

xxxix

working conditions, security, fringe benefits, retirement

benefits/pension, medical, insurance etc.

c) Social needs

These needs involve needs for satisfying social relationship with

others, needs to feel needed, need for affection and love, need for

interaction and acceptance in relation with other people.

Management can fulfill these needs by permitting employees to

partake in social interactions, membership groups and encouraging

participation among employees.

d) Esteem or Ego needs

These are the needs for self-respect, recognition, importance

self worth within and outside the work place. Management can fulfill

these needs by providing greater responsibilities, light job titles and

by recognizing and publishing good performance.

xl

Figure 1: Abraham Manslow’s Hierarchy of needs

Self

Actualizations Fifth Level needs

Esteem needs Fourth Level

Belonging or Social Third Level

need

Security or Safety Second Level

needs

Physiological or First Level Survival needs

Source: Akinwale E.J. – Human Resources Management “an

overview” (1999:159) Concept Publications.

The above pyramid shows Abraham Manslow s hierarchy of

needs. This demonstrated different categories of needs required to

move somebody s motivation in a workplace. When these need are

satisfied, the employee will be motivated and be able to put in his

best performance.

xli

Critics of the theory have argued that it is not true that issues

below the pyramid need attainment before moving up to he next step

in the hierarchy.

ii) Herberg’s dual factor theory;

Herberg s dual factor theory propounded the factor theory of

motivation and job satisfaction. He argued based on his research

works that there are two separate categories of factors in the work

place (those that are related to job satisfaction and those that are

related to job dissatisfaction). Those that relate to job satisfaction are

called the motivators or the satisfiers. He pointed out that when

motivators are present in the work situation, they lead to strong

motivation, satisfaction and good performance but do not cause

dissatisfaction when they are absent. At work, the absence of no

satisfiers can cause no satisfaction.

The motivational factors include:

a) Achievement

b) Recognition

c) Advancement promotion

d) The work itself

xlii

e) The possibility of professional growth

f) Responsibility

The second category of the factors is referred to as the hygiene

factors, the dissatisfiers, the maintenance factors or the extrinsic

factors. These factors are related to job context.

Herzberg maintained that if these extrinsic factors are present

at work place, employees would not be necessarily motivated or

satisfied. They will simply not be dissatisfied either, when the

maintenance factors are not forthcoming, dissatisfaction occurs and

the opposite of satisfaction is no satisfaction. Herzberg identified the

following ten hygiene factors:

a) Company policy and administration

b) Technical supervision

c) Interpersonal relations with supervision

d) Interpersonal relation with peers

e) Salary/wages

f) Job security

g) Personal life

h) Working conditions

xliii

i) Status

k) Interpersonal relations with subordinate.

Herzberg dual factor theory has important application in human

resource management. It shows that to motivate employees,

managers should focus on the motivators and at the same time try to

maintain the hygiene factors at appropriate level so as to prevent

dissatisfaction.

Middlemist and Hitt (1980:48) suggested that managers who

want to motiv ate employees should try to provide a job that has

potentials for achievement and responsibility by manipulating the job

content factors and those of the job context. The process theories

focus on explaining how indiv idual behaviour is energized, directed

and stopped.

The integrative approach attempts to synthesize ideas of other

theories of motivation and job satisfaction.

Nmadu (1998:170) in her book titled Human Resources

Management described motivation as the willingness to exert high

level of efforts towards organizational goals, conditioned by the effort

ability to satisfy some individual needs”, while general motivation is

xliv

concerned with effort towards any goal, the researcher narrows the

focus to organizational goals in order to reflect his singular interest in

work related behaviour.

Figure 2: Motivation Process

Unsatisfied Reduction Satisfied needs Tension Drives Search of tension Behaviour needs

Source: Robbins, S.P. Organizational Behabiour (1991: 192)

Prentice-Hall, New Jersey

2.3.1 Wage Theories

The wage theories fall under compensation theories. Dunn and

Rachel (1971) described wage theories as generalizations that

attempts to explain the entire range of questions about the

relationship between a man, his work and the reward he receives for

the work”.

They explained wage theories using the concept of labour

supply and demand, long and short run, micro and macro economic

analysis. The m ajor wage theories include the following:

a. The subsistence theory of wages

b. The wage fund theory of wages

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c. The marginal productivity theory of wages

d. The bargaining theory of wages

e. The investment theory of wages.

i. The Subsistence theory of wages

The theory of subsistence wages was developed by Malthus

and Richardo. The theory pointed out that wages will remain in

subsistence level in the long run but in a short-run it will rise and fall

continually. The authors further pointed out that in good-times, the

wages of the population will rise and in bad times it will fall. When it

rises labourers will purchase more food. More food will consequently

result in more children, and more food will result in fewer people

dying of multination and diseases. At bad times, there will be more

poor which will result in malnutrition and starvation. This theory is

focused on hovering of wages at subsistence level and the

consequences of he hovering on the populace. Some management

scientists argued that the theory is wrong and this resulted in the

development of other theories.

xlvi

ii. Wage-Fund theory of Wages

John Staurt (1891) developed this theory in his work titled

“Principles of Political economy”. The wage -fund theory came after

the subsistence theory. The theory goes in this way – wages cannot

rise but by an increase of aggregate funds employed in hiring

labourers, or a diminution in the number of competitors for hire, nor

fall, except either by a diminution of funds devoted to pay ing labour,

or an increase in the labourers to be paid. Wages then depends on

the proportion between the number of labouring population and the

capital or other funds devoted to the purchase of labour.

Dunn and Rachel (1971:35) explained that the theory assumes

that there is always a fixed fund. The wage level is therefore the ratio

of this fund to the number of labourers.

This is explained as follows:

Wage level per worker = wage as fixed fund in the short-run

Number of labourer

If for instance the fixed fund is N100.00 and the number of

labourers is 20 the wage level is therefore

xlvii

10000 = N5,000

20

iii) Marginal Productivity theory of wages:

This is the most perfected and most logically constructed

theory of wages, which explains the short and long term wage

determination. Dunn and Rachel explained that the marginal

productivity of wages holds that the labourers cause surplus of labour

themselves by simply asking too much for their services. They

explained that unemployment can only exist for a short while, and if

the unemployment does exist, it is only because the workers are

shiftless on their demands and would not work for the existing wage

rate.

iv) The Bargaining theory of wages:

The proponent of this theory held that short-run wages have

always been determined to some extent by collective bargaining.

At the early state, bargaining was by individuals but later

collective bargaining started with industrial revolution.

Collective bargaining theory emphasizes on the short -run and deals

with specific situation.

xlviii

v) Investment theory of Wages

Giteman (1968) proposes an investment of wages to replace

the marginal productivity theory (MPT). Whereas the marginal

productiv ity theory is focused on output of the labour. Giteman s

theory is focused on labour input (another side of the same coin).

The theory states that if wages are assumed to be a return on

workers investment, then logically, one would assume that the larger

the investment, the higher the wages.

2.4 National Minimum Wage

According to Uv ieghara (1999:404) the Nigeria Labour

Congress put a charter of demands in 1980, which included the fixing

of a national minimum wage. This led to the enactment of the

National Minimum Wage Act, in 1981. The Act lays down a national

minimum wage. Every employer must pay a wage not less than a

national minimum wage of N5,500 per month to every employee

under the national minimum wage is void and has no effect

whatsoever. The employer must pay the wage clear of all deductions

except those required by law or deductions in resp ect of

contributions to approved by he Minuter. If the employer fails to do

xlix

so he is quilly of an offence and on conviction liable to a fine not

exceeding N100 and in the of a continuing offence to a fine not

exceeding N10 for each day during which the offence continues. On

convictions for an offence the court may make an order that the

convicted employer must pay in addition to any fine, such sum as

appears to the court to be due to the employee on account of wages,

the wages being calculated on the basis of the national minimum

wages. However, this power of the court is not in derogation of the

right of the employee himself to recover wages due to him by any

other proceedings in a court of competent jurisdiction.

The duty to pay the national minimum wage does not apply to

an employer in an establishment in which less than fifty employees

are employed or in which employees are employed on part-time basis

or at which employees are paid on commission or piece-rate basis.

2.5 Wages and Salary administration

Akinwale (1999:26) described wages and salary as “the

outcome of symbiotic relationship that exist between the employer

and the employees”. He further explained that employers provide

work for the employees just as the employees contributions enable

l

the organization and the nation to produce goods and services for

the ultimate benefits of mankind. When goods are provided and

services rendered, economic benefits also come to play.

Wages and salaries are very important to the employees

because they are very important to the employees because they are

the most significant rewards that will enable them to have good living

standards. Wages and salary administration is used as a motivational

strategy. From the author s viewpoint, wages and salaries are not

charitable grants by the organization but a significant aspect of

workers right in he productive process. Payment of wages and

salaries must be made promptly for the job done to avoid a situation

where employers of labour make super-profits for growth and

development of their firms, while the workers are left to languish in

poverty and penury (subjecting the workers to suffer economically,

physically and mentally for no fault of theirs).

2.5.1 Wages and Salary Structures in Nigeria

Wages and salary structures in Nigeria takes the following

forms:

li

i) Incremental Salary Scale

In this process, salaries are laid down for various groups but

provision is made for increments, which technically should be related

to merit (employee s performance during the year). For generality of

Nigerian workers, this system has come to say. These increments are

related to the years of service on a particular grade, which is simply

called “service increments”. More prominence are attention have

been given to this scheme since the elongated salary scale of 1988.

ii) Salary Grade Structure

A good salary must take account of individual efforts. Salary

changes should be related to merit of employees (those who

contribute more should benefit more); Depending on the organization

structure, the numbers of good grade of jobs in the firm are

computed the overlaying scales are decided on (which will not stay

too long) and than a scale is arrived at.

iii) Individual rate change:

This is a very sophisticated type of wage rating, which is based

on job evaluation. Only firms with qualified compensation officers are

able to operate this system. It require jobs to have been prev iously

lii

evaluated and analyzed and surveys of other jobs made with their

pay. A mid point salary is then set with adequate spread based on

the analysis and evaluations made.

iv) Employees on the maximum:

This is a situation where employees reach their maximum

without prospects of promotion or further promotions. Especially for

the elder people. It is a problem to keep such groups, moveable up.

The most common motivation for this group is to give them

continued good service bonus (CGSB) ( set of increment granted

workers outside their normal scale, with an interval period spaced in).

2.5.2 Problems associated with Salary and Wages:

Akinwale opined that the problems associated with wages and

salaries include the following:

i) Job evaluation

This is the most valuable way of fixing wages because it

determines payment in relation to input and output for overall

significant of corporate objective.

liii

ii) Government Order:

One of the keys that have been used to open doors in Western

nations is the development of citizens. When citizens are catered for,

they contribute to nation building process. Social economic strength

of nations were attained through proper attention to the needs of the

citizenry, especially in the financial realm. In order to accomplish the

economic survival of citizens, governments enact rules and

regulations guiding minimum wage that must be obeyed by

organizations. This gives the bench mark below which employers of

labour must not fail.

iii) Ability to pay:

Organizations ability to pay determines greater the wages

structure of the firm. It should be noted that not all organizations

maintain the same pay structure.

iv) Living Standard:

This cost of living in any particular nation greatly affects the

cost of labour. For instance, the cost of living in Untied Kingdom is

higher than the cost of living in Nigeria. This accounts for the

difference in the pay structure in the two countries.

liv

iv) Collective Bargaining:

Wages structure is affected by collective bargaining process,

this mostly occurs in unionized firms.

2.6 Metagoals of Compensation and Reward System

According to Cascio (1995:14) Metagoals are broad, open-

ended ideals that help to shape the effective planning and

administration of compensation and reward systems. These ideas are

very important for effective implementation and monitoring of the

system.

Patten (1977:20) identified eight of some metagoals which had

been succulently put by Cascio (1995:399) as follows:

i) Adequacy

This pointed out that there is a „floor and a ceiling to adequacy

of competition. For instance, federal regulation on wages provides

the floor while management pay policy provides the ceiling or by the

power of the union during the collective bargaining process ( in case

of a unionized firm).

lv

ii) Equity

Equity refers to fair days work for fair days pay. There are

many theories and legislations concerning equitable payment for

work. Every individual tries as much as possible to obtain equitable

payment for his contribution to the organization in which he works.

iii) Security and Estate Building

Security of life, against unemployment, sickness retirement,

diseases and industrial accident is vital to the well-being of the

employees. Security of investment, estate and assets of the firm is

also vital to the organization.

iv) Acceptability

Metagoals suggests that organization should attract and retain

competent and loyal employees if the compensation and reward

system are acceptable to the employees concerned. Total

compensation system that is carefully designed, systematically

developed and clearly explained to the employees is likely to be

acceptable to both parties.

lvi

v) Cost Control

This suggests that there should be careful control of payroll

costs. This can be achieved through reduction of unnecessary

expenses and avoidance of over-generous pension and other benefits

that can render the organization bankrupt. Efficiency of operation is

also a better way of reducing unnecessary cost.

vi) Balance

This refers to efficient combination of direct and indirect

compensation of financial and non-financial reward. If compensation

planning and implementation must proceed every month, balance

must be restored.

vii) Incentives

Effective compensation and reward systems should provide the

type of reward that are capable of retaining the employees and

making them contribute their best to the organization.

viii) Pay and Effort Bargain

Employees exchange their efforts and contributions for pay and

reward systems. Bargaining for pay is struck collectively or

individually before arriving at the acceptable point.

lvii

2.7 Compensation Strategies

Ferris and Buckley (1995:54) defined compensation strategy

“as the repertoire of pay choices available to management, which

may under some conditions have an impact on organizational

performance and the effective use of human resources”. Ferns and

Buckley identified some key dichotomies in the system which include

the following:

i) Job vs Skills

Job based pay is used in traditional pay system where the firm

assumes that job values can be determined and their value reflect on

their contribution to the organization. Skill-based pay is used in

nontraditional settings where the firm attaches importance to sk ills

rather than the job value. Few companies particularly in developing

countries attach importance to skill based pay system.

ii) Performance vs. Seniority

This evaluation depends largely on the organizational goals as

well as the firms ability to measure performance effectively. If the

organization is able to measure performance effectively the

employees will perceive the system as being effective and this will

lviii

consequently result in desired behaviour. Pearce (1987) and

Formbrum (1982) argued that most firms want to pay for

performance but because of their inability to measure performance

they ultimately pay for seniority.

iii) Bonus vs. Deferred Compensation:

Saller 91973:42), Carol (1987:14) and Kerr (1982:1 2) theorized

that frequent bonuses and merit pay bases lay emphasis on short-

term performance while deferred compensation is aimed at long-term

perspective.

iv) Intrinsic vs. Extrinsic Rewards

Lewter (1983:2) stated that a firm can obtain a competitive

edge if it combines a good package hat is made up of intrinsic and

extrinsic rewards system. This good combination gives the employees

equitable compensation system, which in turn results in high

motivation for employees.

v) Fixed pay vs. group incentives

Carrol (1987:52) argued that individual performances should be

used as the basis for pay because it can be a powerful motiv ator.

Lawler argued that management s ability to measure performance

lix

accurately often results in rewards being incongruent. If the

employees do not perceive the link between rewards and

performance, the motivational effects disappear.

vi) Individual vs. Incentives

Higer risks are associated with opportunities for longer income.

Mature firms trying to maintain their market shares tend to offer

more job security, which also translates into higher compensation.

(Salschieder, 1982:50). The firms that are aggressively tending to

maintain their market shares pay higher incentives and higher base

pay.

2.8 Importance of Total Compensation

Randall and Luber (1990:266) titled personnel and Human

Resource Management pointed out that organizations that engage in

total compensation system derive the following benefits.

i) Attraction of potential applicants

This is because the applicants will like to work where the

compensation package is adequate.

lx

ii) Retaining good employees

Good employees tend to remain with an organization that

practices a total compensation system. This results in low labour

turnover.

iii) Gaining Competitive edge

Any organization that engages in total compensation usually

gains competitive edge over others. This helps in attainment of

organizational objective and wealth creation for the firm.

iv) Motivation

It is a motivating factor. It motivates the employee and makes

him feel that he is a part of the organization. This motivation

enhances performance and productivity.

v) To administer pay within the legal system

Because several legal regulations are directed towards total

compensation, an organization that engages in total compensation is

regarded as good corporate citizen.

lxi

vi) It facilitates organizational strategic objective

Some organizations use total compensation as their

management strategic objective. This enables them to have

competent employees that will pilot the affairs of the organization.

vii) To Define organizational structure

Some organizations engage in total compensation as a way of

defining and reinforcing their organizational structure and status

hierarchy.

viii) To dominate market shares

It is a known fact that human beings within an organization

make the organization what it is. In this direction, some organizations

use total compensation package to attract the best people. This will

consequently enhance the organization s performance and overall

objective.

lxii

CHAPTER THREE

3.0 RESEARCH DESIGN AND METHODOLOGY

The term methodology is a system of explicit rules and

procedures in which research is based and against which claims of

knowledge are evaluated (Ojo, 2003:22). Therefore this section

focused on the research techniques adopted and used for this study.

3.1 Research Design

After considering the problem and objectives of the study,

descriptive design was chosen, because it would provide answers to

questions such as who what, where, when, why and how as they are

related to compensation system in the Nigeria construction industry

with specific reference to Arab Contractors Engineering Limited

Enugu. Typically, answers to these questions are found in secondary

source of data or by conducting surveys.

3.2 Area of the Study

The area or location of the study is Arab Contractors

Engineering Limited.

lxiii

3.3 Population of the Study

This study population comprises of employees of Arab

Contractors Engineering Limited, Enugu. A total of 800 employees

were drawn from the construction firm.

3.4 Sample and Sampling Procedure

Given the total population of the study as 800 workers, the

researcher adopted the Bourley s rule by Yamane (1972:723) for

finite population. The formula is stated below as follows:

n = N

1 + Ne 2

Where n = the required sample size

N = total population (given)

e = error margin

l = Constant

:. n = N

2 1 + Ne

n = 800

2 1 + 800 (0.05)

lxiv

n = 800

1 + 800 (0.0025)

n = 800

1 + 0.2

n = 800

1.2 = 667 workers

The subjects were selected through a simple random sampling

technique. This was to ensure equal opportunity participation of

members in the population and to prevent unnecessary bias during

the selection process.

3.5 Instrument of Data Collection

The researcher employed the use of structured questionnaire

and oral interview which she administered on the selected

respondents. The questionnaire was designed in such a way to obtain

relevant information from the respondents. The questions in the

questionnaire were framed and revolves around three research

hypotheses that were formulated for this study. More importantly,

the questionnaires were cautiously prepared to ensure that

lxv

respondents are not misunderstood. The questionnaire comprised

two segments. The first segment „A looked at personal rate of

respondents ranging from gender, age, educational qualification,

income level, management level, length of service, while section „B

took care of respondents perception on compensation sy stem in the

Nigeria construction firms especially in Arab Contractors Engineering

Limited, Enugu. This information was got using five ratings ranging

from strongly agree, agree, strongly disagree, disagree to undecided.

3.6 Validity of Research Instrument (Questionnaire)

Validity ensures that the instrument measures what it has

intended or designed to measure. The instrument used in this

research work is specifically structured questionnaire.

To ensure validity, the draft of the research instrument was

presented to experts in the field of research who made amendments

and necessary corrections pertinent to the research work. The

instrument was then presented to the supervisor for final correction.

lxvi

3.7 Reliability of Test Instru ment

To test the reliability of the data collection instrument, a pilot

study which entails administration of instrument exercised among

small portion was conducted to pretest study schedule. The essence

of this was to realize or get the same result if it s practiced over and

over under the same condition which may be validated in the course

of the study. The research instrument was pre-tested on 16 officials

among the Arab Contractors Engineering Limited workers choosing

four from each management cadre.

3.8 Method of Data Collection

Data for this study were collected through primary and

secondary sources.

Primary sources – Here, the researcher employed oral interview

and structured questionnaires using research hypotheses as the main

focus.

In the secondary sources – the researcher made use of

information collected from secondary sources of data like textbooks,

management journals, company s publications, internet materials and

other relevant materials. This was done to help support the findings.

lxvii

3.9 Method of Data Analysis

Data for this study were collected and analyzed based on

simple percentages. Subsequently, the hypotheses formulated were

tested with the ……. and of chi-square non-parametric technique

which is an estimation of hypotheses testing normally used when

comparing the obscured with the expected distribution.

The chi-square is preferred as it shows how the hypotheses

conform to the results of the questionnaire. Also, it is representation

of the finding of the research.

Chi-square distribution adopted is chi-square test of goodness

of fit test with formula below:

2 2 X = (O – E)

E

Where = Summation notation

O = Observed frequency

E = Expected frequency

EVC = Row total x column total

Grand Total

lxviii

CHAPTER FOUR

PRESENTATION, INTERPRETATIOIN AND ANALYSIS OF DATA

4.1 Data Presentation

This chapter of the study was based on data presentation,

distribution and analysis of data. For the purpose of this research

work, a total of (667) six hundred and sixty -seven questionnaire were

distributed to staff/employees of Arab Contractors, in Enugu State.

The table below shows the number of questionnaires collected

and various research questions addressed by the researcher. The

questions in the questionnaires will be analyzed by the sue of

percentages and tables.

Table 4.1: Distribution of Respondents b y Response Rate

Options Respondent Percentages (%)

Returned-questionnaires 480 72

Un-returned questionnaires 187 28

Total 667 100%

Source: Field Survey, 2012

lxix

Out of 667 questionnaires distributed to respondents, only 480

copies were returned indicating a response rate of 72%, while 187

copies of questionnaires were not returned, indicating a response

rate of 28%.

4.2: Demographic Characteristics

Table 4.2: Distribution of respondents by sex

Sex Respondent Percentages (%)

Male 360 75

Female 120 25

Total 480 100%


From the above table 4.2, it was found that 75% respondents

are male workers, while 25% are female workers.

lxx

Table 4.3: Distribution of Respondents based on Marital

Status.

Marital Status Respondent Percentages (%)

Married 200 41.7

Single 150 31.3

Divorced 130 27.1

Total 480 100%


From the above table 4.3, it was found that 41.77 respondents

are married, 31.3% are single, while 27.1% are divorced.

Table 4.4: Distribution of respondents based on educational

qualification

Qualification Respondent Percentages (%)

FSLC 80 16.7

WASC/GCE 160 33.3

OND/NCE 80 16.7

HND/BSC 100 21

MSC/MBA 40 8.2

Others 20 4.2

Total 480 100%


lxxi

From the above table 4.4, it was found that 16.7% respondents

have FSLC, 33.3% have WASC/GCE. 16.7% have OND/NCE. 21%

have HND/BSC. 8.3% and 4.2% have MSC/MBA and other related

qualifications respectively.

Table 4.5: Distribution of respond ents based on Age:

Age Respondent Percentages (%)

18 – 30 years 200 33.3

31 – 45 years 150 50

46 – above 80 16.7

Total 480 100%


From the above table 4.5, it was found that 33.3% respondents

are less than 30 years, 50% are less than 45 years, while 16.7% are

above 46 years.

lxxii

Table 4.6: Distribution of Respondents based on Length of

Service


Less than 5 years 60 12.5

Less than 10 years 180 37.5

More than 11 years 240 50

Total 480 100%


From the above table 4.6, it was found that 12.5% respondent

have spent less than 5 years with the firm, 37.5% said they ve spent

less than 10 years while 50% have spent more than 11 years.

4.1.3 Presentation according to Key Research Qu estions

Table 4.7 Distribution of Respon dents as to whether their

firm have a compensation system


Yes 24 50

No 100 21

I don t know 80 16.7

None of the above 60 12.5

Total 480 100%


lxxiii

Summing up all the responses in the above table 4.7, it was

found that 50% said yes, 21% said no, 16.7% and 12.5%

respondents said I don t know and none of the above respectively.

From the above analysis, it can be deduced that the construction firm

has a compensation system as was reported by majority of the

respondents.

Table 4.8: Distribution of Respondents as to whether their

organization sand them for management training


Yes 240 50

No 110 30

I don t know 80 16.7


Total 480 100%


With a view to ascertaining whether organization send their

employees for management training in the above table 4.8,

respondent v iews were further enquired. It was found that 50% of

respondents said yes that they are been sent for management

lxxiv

training by their organization, 30% said no to the above question,

16.7% answered I don t know, while 10.4% said none of the above.

Analyzing the above, there seems to be divergent among

respondents views, with respondents views ranging from yes to none

of the above. This can be interpreted to mean that organization send

their employees for management training.

Table 4.9: Relationship Between the Management and the

Workers


Good 140 29.2

Very good 240 50

Bad 40 8.3

Very bad 60 12.5

Total 480 100%


While 29.2% respondents in table 4.9 above, said good, 50%

of respondents said that the relationship between the management

and the workers is very good, 8.3% said their relationship is bad,

while 12.5% respondents said very bad. Analyzing the above the

lxxv

emergent data indicate that the relationship between the

management and the workers is very good, as was reported by the

majority of the respondents.

Table 4.10: The Rating of the motivation System in the

Construction Firm


Good 120 25

Very good 300 62.5

Bad 20 4.2

Very bad 40 8.3

Total 480 100%


With a view to ascertaining how respondents rated the

motivation system in the construction firm in the above table 4.10,

respondents views were further enquired. It was found that 25% of

respondents indicated good, 62.5% indicated very good, 4.2%

indicated bad, while 8.3% of respondents answered very bad. The

emergent data from the above analysis, indicates a divergent of

opinions among the respondents, with respondents views ranging

lxxvi

from good to very good. This can be interpreted to mean that the

motivation system of the firm, has been rated very good as was

reported by a greater percentage of respondents.

Table 4.11: Distribution of Respondents based on Types of

compensation system used by the Arab Contractors.


Total Compensation 50 10.4

Performance based pay 180 37.5

Direct Compensation 70 14.6

Indirect Compensation 180 37.5

Total 480 100%


Summing up all responses in the above table 4.11, it was found

that 10.4% of respondents indicate total compensation sy stem,

37.5% indicate performance based pay, 14.6% indicate direct

compensation system, 37.5% of respondents indicate indirect

compensation system. From the above analysis, it can be inferred

that the two prevalent compensation system used by Arab

Contractors are the performance based pay and the indirect

lxxvii

compensation system as was reported by a greater percentage of

respondents.

Table 4.12: Distribution of respondent on the

compensation system in the construction industry


Average 60 12.5

Above average 100 20.8

Below average 280 58.3


Total 480 100%


While 12.5% respondents indicated average in the above table

4.12, 20.8% indicated above average, 58.3% indicated below

average, while 8.3% indicated none of the above. From the above

analysis, it can be deduced that the compensation system in Nigeria

is generally below average or very low and this also accounted for

general poverty level in the country. This calls for a review of the

compensation system in the construction firms and in all other

industries in Nigeria generally.

lxxviii

Table 4.13: Typ0es of Compensation system that is more

common in the industry.


Total compensation 70 15

Indirect compensation 240 50

Direct compensation 140 29.2

No compensation 30 6.3

Total 480 100%


With a view to ascertaining the type(s) of compensation system

that is more common in the industry in the above table 4.13,

respondents views were further sought for. It was found that 15% of

respondents indicated total compensation, 50% indicated indirect

compensation, 29.2% indicated direct compensation, while 6.3% said

not compensation. Analyzing the above analysis, it can be inferred

that indirect compensation system is more common in the industry as

was reported by a greater majority of respondents.

lxxix

Table 4.14: The type of compensation system employees

in the industry prefer


Direct compensation 100 21.

Indirect compensation 140 29.2

Total compensation 240 50

No compensation - -

Total 480 100%


Summing up all responses in the above table 4.14, it was found

that 21% of respondents indicated direct compensation, 29.2%

indicated indirect compensation, 50% indicated total compensation,

while no respondents said none of the above mentioned

compensation is preferred in the industry, from the above analysis,

the total compensation system is preferred by employees in the

industry, as was reported by the majority of the respondents.

lxxx

Table 4.15: The level of labour turnover in the industry


High 50 10.4

Very high 30 6.25

Low 100 21

Very low 300 62.5

Total 480 100%


While 10.4% of respondents indicated high, 6.25% indicated

very high, 21% indicated very high, while 62.5% indicated low. The

emerged data shows a divergent of opinion among respondents, with

respondents views ranging from high to very low indicating for a

scope for improvement the level of labour turnover compensation in

the industry.

lxxxi

Table 4.16: Causes of labour turnover in the industry


Lack of compensation 300 62.5

Lack of indirect compensation 100 21

Lack of direct compensation 60 12.5

No compensation 20 4.2

Total 480 100%


While 62.5% of respondents indicated lack of total

compensation as one of the causes of labour turnover in the industry,

21% indicated lack of indirect compensation, 12.5% said lack of

direct compensation, while 4.2% indicated no compensation account

for labour turnover in the industry. Inferring from the above analysis,

it can be deduced that lack of total compensation accounts mostly as

the prime cause of labour turnover the industry; as was reported by

majority of the respondents.

lxxxii

Table 4.17: Lack of motivation by Construction employees.


Yes 380 79

No 100 21

Total 480 100%


From the above table 4.17, it was found out 79% of

respondents indicated yes to the above question, while 21%

indicated no. From the above analysis, it can be concluded that

employees in the construction company lack motivation as was

reported by majority of respondents.

Table 4.18: Th e most common components of workers

salary structure


Base pay, housing 240 50

allowances, transport, bonus

and overtime

Social security, golden 40 8.3

handcuff, golden parachute

Share, debentures, Medicare 120 25

Wellness programmes and 80 17

insurance

Total 480 100%


lxxxiii

With a view to ascertaining the most common components of

workers salary structure in the above table 4.18, respondents views

were further enquired. It was found that 50% respondents indicated

base pay. Insuring and transport allowance, bonus and overtime as

the most common components of workers salary structure, 8.3%

indicated social security, golden handcuff, golden parachute, shares,

debentures, medicare; goes respondent that occupies 25%, while

17% indicated wellness programmes, and insurance. The emergent

data shows that majority of respondents indicated base pay, housing

and transport allowances, bonus and overtime as the most common

components of workers salary structure.

Table 4.19: Compensation package mostly implemented by

the firm


Overtime and bonus 200 42

Pension scheme 200 42

Life insurance 80 16

None of the above - -

Total 480 100%


lxxxiv

From the above table 4.19, it was found that 42% and 42%

indicated overtime, bonus and pension scheme respectively. 16% of

respondents indicated life insurance. Analyzing the above data, it can

be deduced that overtime, bonus and pension scheme were the

compensation packages mostly implemented by the firm, as was


Table 4.20: Whether equitable compensation system result

in high productivity and achievement organizational goal


Agree 120 25

Strongly agree 240 50

Disagree 40 8.3

Strongly disagree 80 16

Total 480 100%


With regards to ascertaining whether equitable compensation

system result in high productivity and achievement of organizational

goal in the above table 4.20, respondents views were sought for. It

was found that 25% respondents indicated agree; 50% respondents,

lxxxv

strongly agree, 8.3% disagree, while 16% strongly disagree. The

emergent data shows that equitable compensation system result in

high productivity and achievement of organizational goal, as was


Table 4.21: Whether organization that are practicing total

compensation for their employees seem more likely to

succeed


Agree 100 21

Strongly agree 300 62.5

Disagree 30 6.25

Strongly disagree 50 10.4

Total 480 100%


Summing up all responses from the above table 4.21, it was

found that 21% respondents agree with the above assertion, 62.5%

strongly agree, 6.25% disagree, while 10.4% strongly disagree to the

above question. From the above analysis, it can be deduced that

organization that are practicing total compensation for their

lxxxvi

employees seem more likely to succeed as was reported by a greater

majority of respondents.

Table 4.22: Construction companies that have 50% - 60%

of their workers, need to engage in total compensation for

their workers.


Yes 300 62.5

No 100 21

I dong know 60 12.5


Total 480 100%


From the above table 4.22, it was found that 62.5% of

respondents said yes to the above question, 21% said no, 12.5%

said they don t know, while no response indicated none of the above.

From the above analysis, it can be inferred that construction

companies that have 50% - 60% of their workers need to engage in

total compensation for their workers, as was reported by majority of

the respondents.

lxxxvii

4.2 TESTING OF HYPOTHESES

Based on the above collected data, the following hypotheses

can be tested using the chi-square statistical tool. But before testing

the following hypotheses, the null hypothesis should be stated first,

followed by the alternative hypothesis.

Hypothesis One

Table 4.20: Response to respondents as to whether equitable

compensation system result in high productiv ity and achievement of

organization goal.


Agree 120 25


Disagree 40 8.3


Total 480 100%

Step I: Ho: Equitable Compensation system do not result in

high productivity and achievement of organizational

goal.

lxxxviii

Hi: Equitable compensation result in high productivity

and achievement of organizational goal.

Step II The statistical tool used is given as

n

X 2 = (O – E) 2

J = 1

E

Step III: The level of Significance is given as

X 2 = 5% or 0.05

Step IV: The degree of freedom is given as r – 1) ( k – 1)

i.e d.f. where 9r – 1) ( k – 1) column or rows.

:. (r – 1) (k – 1) = 4 – 1 = 3

2 2 Step V: The critical value of X is given as X = 7.815

This value can be determined from the chi-square (X 2 ) table

using both the degree of freedom and level of significance.

Step VI: Computation of the test statistic using the above table


Agree 120 25


Disagree 40 8.3


Total 480 100%

lxxxix

Where O = Observed frequency


:. E = 480 = 120

4

n

:. X 2 = (O – E) 2

J = 1

E

2 2 2 2 = (120 – 120) + (240 – 120) + (40 – 120) + (80 – 12)

120 120 120 120

= (0) 2 + (120) 2 + (80) 2 + (40) 2

120 120 120 120

= 0 + 1440000 + 64000 + 16000

120 120 120

0 + 120 + 53.3 + 13.3 = 187

2 Step VII; Comparing the test statistic with the critical value of X ,

2 we have X = 187 > 7.815

xc

2 Step VIII: Decision: Since the calculated value of X is

2 greater than the critical value of X , we reject the null hypothesis and

accept the alternative hypothesis. We therefore, conclude that

Equitable compensation result in high productivity achievement of

organizational goal.

Hypothesis Two

Table 4.21: Response rate of respondents as to whether

organization that are practicing total compensation for their

employees seem more likely to succeed.


Agree 100 21

Strongly agree 300 62.5

Disagree 30 6.25

Strongly disagree 50 10.4

Total 480 100%


Step I: Ho: Organizational that are practicing total

compensation for their employees are not likely to

succeed

xci

H2: Organizational that are practicing total

compensation for their employees are likely to

succeed


n

X 2 = (O – E) 2

J = 1

E


X 2 = 5% or 0.05


i.e d.f. where 9r – 1) ( k – 1) column or row.

:. (r – 1) (k – 1) = 4 – 1 = 3

Step V: The critical value of X 2 is given as X 2 = 7.815

This value can be determined from the chi-square (X 2 ) table

using both the level of significance and degree of freedom.

Step VI; Computation of the test statistics using the above table

Alternative Response O E

Agree 100 120


Disagree 30 120


Total 480 100%

xcii



:. E = 480 = 120

4

n 2 2 :. X = (O – E)

J = 1

E

= (120 – 120) 2 + (300 – 120) 2 + (30 – 120) 2 + (50 – 12) 2

120 120 120 120

2 2 2 2 = (20) + (180) + (90) + (70)

120 120 120 120

= 400 + 324000 + 81000 + 4900

120 120 120 120

3.3 + 270 + 68 + 41 = 382.3

X 2 = 382.3

Step VII: Comparing the test statistic with the critical value of X 2

we have, X 2 = 382.3 ? 7.815

xciii

2 Step VIII: Decision: Since the calculated value of X is

2 greater than the critical value of X , we reject the null

hypothesis and accept the alternativ e hypothesis. We

therefore, conclude that organizations that are practicing

total compensation for their employees are likely to

succeed.

Hypothesis Three

Table 4.22: Response rate of Respondents as to whether

construction companies that have 50 – 60% of their

workers, need to engage in total compensation for their

workers.


Yes 300 62.5

No 100 21

I dong know 60 12.5


Total 480 100%

xciv

Step I; Ho: Construction companies having 50 – 60% of their

workers does not need to engage total

compensation for their workers.

H3: Construction companies having 50 – 60% of their

workers need to engage in total compensation for

their workers.


n 2 2 X = (O – E)

J = 1

E


2 X = 5% or 0.05


i.e d.f. where (r – 1) ( k – 1) column or row.

:. (r – 1) (k – 1) = 4 – 1 = 3

2 2 Step V: The critical value of X is given as X = 7.815

xcv

Step VI; Computation of the test statistics using the above table

Alternative Response O E

Yes 300 120

No 100 120

I don t know 60 120

None of the above 20 120

Total 480 480%



:. E = 480 = 120

4

n

:. X 2 = (O – E) 2

J = 1

E

2 2 2 2 = (100 – 120) + (100 – 120) + (60 – 120) + (20 – 12)

120 120 120 120

= (180) 2 + (20) 2 + (60) 2 + (100) 2

120 120 120 120

xcvi

= 324000 + 4000 + 3600 + 100000

120 120 120 120

270 + 3.3 + 30 + 8.3 = 317

X 2 = 317

2 Step VII: Comparing the test statistic with the critical value of X .

2 we have X = 317 > 7.817

Step VIII: Decision: Since the calculated value of X 2 is

2 greater than the critical value of X , we reject the null hypothesis and

accept the alternative hypothesis. We therefore, conclude that

construction companies having 50% - 60% of their workers need to

engage in total compensation for their workers.

xcvii

CHAPTER FIVE

DISCUSSION OF REUSLT, IMPLICATION OF RESEARCH

FINDINGS, CONCLUSION, RECOMMENDATIONS AND

SUGGESTION FOR FURTHER STUDIES

5.1 Discussion of Result/Findings

Based on analysed data, the findings in this study include the

followings:

i. Equitable Compensation results in high productivity and

achievement of organizational goal. High productivity and

achievement of organizational goal is dependent on equitable

compensation of employee. Employees need to be adequately

compensated in other to motivate them aspire higher goals

towards achieving organizational objectives.

ii. That organization that are practicing total compensation for

their employees are likely to succeed. For an organization to

succeed, they need to engage in total compensation so as to

enhance her employee and organizational productivity.

iii. That construction companies having 50% - 60% of their

workers need to engage in total compensation for their

xcviii

workers. Organization workforce that is more than 60% should

engage in total compensation for their workers. This will assist

them towards achieving their organizational goals.

Based on the above research outcome, the following conclusion

and recommendations can be made by the researcher with regard to

compensation system in the Nigerian construction companies.

5.2 Implication of Research Findings

The implications of the above research findings on the part of

management of construction firm that engages in total compensation

for their employees will lead to higher productivity and achievement

of organizational.

Another implication of the above research findings is that, it will

aid management in employee motivation. Because when employers

are adequately compensated, it will serve as a motivational tool for

enhancing employees productivity in an organization.

5.3 Conclusion

The focal issue in personnel administration is the effective

management of human resources in order to attain organizational

goal; it is a known fact to every professional manager that human

xcix

beings in the organization control materials and other resources to

achieve organizational goals.

Any organization that neglects the vital roles of compensation

on the lives of its employees is doing so on its peril. Human beings

within an organization can make or mar the progress of any

organization. Hence, it is imperative that organizations should pay

adequate attention to the human elements within organizations so as

to maintain smooth operations and growth. Organizations that are

proactive incorporate employees growth objective into the overall

objective of the organization. The organizations reap the benefits of

this long-term measure in a long run.

Adequate compensation and reward system benefits both the

employees and the employers in the following ways:

i) The organization that engages in total compensation attracts

potential applicants.

ii) Good compensation system helps to retain good employees.

iii) It motivates the employees

iv) It helps the firm to gain competitive edge over others.

c

v) High motivation helps to give the employees sense of

belonging.

vi) Some organizations engage in total compensation in order to

define organizational structure.

vii) Total compensation helps the organization to get the best

employees which consequently helps the organization to

dominate market share.

viii) It helps to facilitate organizational strategy.

Any organization that fails to recognize the essence of

adequate compensation and its impact or both employees and

employers is doing a lot of disservice to itself. For a business to

progress, all the stakeholders in the business must be happy in order

to contribute their respective quotas.

5.4 Recommendations

The field survey was through and tasking. Based on the major

research work, the following recommendations and suggestions are

made in order to improve the compensation system in Nigerian

constriction firms. The recommendations, if adopted will help to

improve the compensation system in construction industry and other

ci

industries in Nigeria and other developing countries of the world.

Some of the recommendations include the following:

i) Construction firms should encourage indirect compensation

system. This is a long-term plan, which benefits both the

employees and the employers. Organizations that implement

this in other parts of the world gain in the long run and our

country should not be an exception.

ii) Performance based pay system should be continued but should

be complemented with indirect compensation system.

Researchers have shown that one type of pay system can

hardly satisfy employees in this dynamic business world.

iii) Social security and golden handcuff should be encouraged as

this helps to retain good and experience employees. This is a

long-term plan that both the employees and the employers

benefit from in the long-run.

iv) Employers should engage in wages and reward system that is

not just salvation wages for the employees. This helps in

motivating the employees and gives them some sense of

belonging.

cii

v) To avoid high labour turnover, employees pay and welfare

packages should be improved. A motivated worker is a happy

worker and a happy worker puts in his best for the

organization.

vi) Total compensation has mutual benefits to both the employees

and the employers. Both are happy with the organization

because both are beneficiaries of the system.

v) Adequate compensation and attention should be given to

human beings who manage materials and other resources in

the organization. Failure to do this will cause some problems

for the organization.

5.5 Suggestion for Further Studies

The research work was very interesting but very tasking since

total compensation system is a new dimension in developing

countries, particularly in Nigeria, there is a need for further

researchers on the topic to explore more about this system.

Management scientists and researchers who are interested in

discovering more about the compensation system in Nigeria

ciii

construction industry should investigate further into the following

areas.

i. Causes of non-implementation of total compensation system in

Nigerian construction industry.

ii. Collective bargaining structures in Nigerian private sector.

iii. Why direct compensation is more prevalent in construction

industry.

iv. Ways of strengthening indirect compensation system in

Nigerian construction industry.

v. Social security system in Nigeria.

civ

BIBLIOGRAPHY

Akinwale, E.J.A. (1999). Human Resources Management: An

Overview of Concept Publication Limited, Lagos.

Brovee, Thill, Word A. and Dovel. T. (1993). International

Management. McGraw-hill Inc. New York.

Cascio, A.T. (1985): Job Characteristics as Satisfiers and Dissatisfiers”

Journal of Applied Psychology XLVII.

Donnelly T.M. and Benson s. (1984). Hand book of Industrial and

Organizational Psychology Ed: Chicago: Rank McNally College

Publishers.

Dunn A.C. and Rachels, T.S. (1995). Human Resources Management.

An Overview of Concept. Lagos: Joel Publication Limited.

Ferris T.M. and Buckley, M.P. (1995).

http://www.stc/ements.edu/grad/gradofil.htm

Ile N.N. (1999). Management and Organization Theory and Practice.

Enugu: Vougasen Ltd.

National Industrial Joint Council Handbook for Junior Staff in

Construction Industry in Nigeria (October edition 2001: 2 – 20).

National Industrial Joint Council Handbook for Senior Staff in

Construction Industry in Nigeria (July edition, 1999. 4 – 14).

Nmadu, T.M. (1998). Human Resources Management. Tojegan

Associates; Jos.

Nwachukwu, G.C. (1988). Management Theory and Practice. Onitsha

– Nigerian: Africana – FEP Publishers.

cv

Peretomade S.T. (1992). Personnel and Human Resources

th Management, 4 Ed. West Publishing Company, Boulevard.

Poole, M. and Warner, M. (2000). International Encyclopedia of

Business and Management. The handbook of Human Resources

Management T.J. International Ltd., England.

Porter L.W. Lawler E.E. (1967). “The Effect of Performances on Job

Satisfaction” Industrial Relations, 7 th October.

Schuler, P.C. and Huber, L.V. (1990). Personnel and Human

Resources Management, 4 th ed. West Publishing company

Boulevard.

Stahi P.M. (1995). Human Behabour: An Inventory of Scientific

Findings, New York, Harwards Brale and Javanich inc.

Ugwudioha, D.A. (2004). Compensation System in the Nigerian

Construction Industry.

Uvieghara, E.E. (1999). Human Resources Management, Jojegam

Associates, Jos.

Vroom, H. (1964). Work and Motivation. New York John Wiley and

Sons Inc.

cvi

RESEARCH QUESTIONNAIRE

Department of Business Administration

School of Business Studies

Institute of Management & Technology

(IMT), En ugu

20/09/2011

Dear Respondent,

QUESTIONNAIRE ON THE COMPENSATION SYSTEM IN

NIGERIA CONSTRUCTION INDUSTRY (A STUDY OF ARAB

CONRACTORS ENGINEERING LTD ENUGU)

I am a final year HND II student with the above department

presently conducting a research work on the above research topic. It

is in partial fulfillment of the requirement for the award of Higher

National Diploma HND in Business administration.

I will be glad if you would assist in filling the attached

questionnaire to enable me carry out this study successfully.

I promise to treat your responses with ulter confidentiality and

used your responses for this purpose.

Thanks for your cooperation.

Yours sincerely,

Ezeh Jennifer U.

cvii

INSTRUCTION: Some of the questions contain response

alternatives. You are expected to tick against any alternative of your

choice.

SECTION ‘A’ BIO- DATA

1. What is your sex? (a) Male ( )

(b) Female ( )

2. What is your status? (a) Married ( )

(b) Single ( )

(c) Divorced ( ).

3. What is your age? (a) Below 18 years ( )

(b) 19 – 30 years ( )

(c) 31 – 45 years ( )

(d) 46 – above ( )

4. What is your qualifications?

(a) FSLC ( )

(b) WASC/GCE ( )

(c) OND/NCE ( )

(d) HND/B.Sc ( )

(e) Others ( )

cviii

5. What is your income level per annum?

(a) High ( )

(b) Average ( )

(c) Low ( ).

6. Length of service? (a) 0 – 5 years ( )

(b) 6 – 10 years ( )

(c) 11 – above ( ).

SECTION ‘B’

GENERAL RESEARCH QUESTIONS

7. Do you have a compensation plan in your establishment?

(a) Agree ( ) (b) Strongly agree ( )

(c) Disagree ( ) (d) Strongly disagree ( )

8. Does your establishment compensate her workers?



9. Is your company s compensation system adequate?

(a) Adequate ( ) (b) Very adequate ( )

(c) Not adequate ( ).

cix

10. How would you assess the compensation system in your

establishment?

(a) Good ( )

(b) Excellent ( )

(c) Very good ( )

(d) Poor ( ).

(e) Very poor ( ).

11. Are you satisfied with your country s compensation system?

(a) Satisfied ( )

(b) Very satisfied ( )

(c) Not satisfied ( )

(d) Undecided ( ).

12. Have your right to claim your rightful compensation been

encroached on before?



13. Does your organization send employees for managerial

training?

(a) Yes ( ) (b) No ( )

cx

(c) I don t know ( )

(d) None of the above ( ).

14. How is the relationship between the management and the

workers?

(a) Good ( )

(b) Very good ( )

(c ) Bad ( )

(d) Very bad ( ).

15. Hw would you rate the motivation system in this organization?

(a) Good ( )

(b) Very good ( )

(c ) Bad ( )

(d) Very bad ( ).

16. What type of compensation system is used in your

establishment?

(a) Total compensation ( )

(b) Performance based pay ( )

(c ) Direct compensation ( )

(d) Indirect compensation ( ).

cxi

17. How is the compensation system in the construction industry?

(a) Average ( )

(b) Above average ( )

© Below average ( )


18. What type of compensation system is more common in the

industry?

(a) Total compensation ( )

(b) Indirect compensation ( )

(c) Direct compensation ( )

(d) No compensation ( ).

19. What type of compensation system do employees in the

industry prefer?

(a) Direct compensation ( )

(b) Indirect compensation ( )

(c) Total compensation ( )


20. What is the level of labour turnover in the industry?

(a) High ( )

cxii

(b) Very high ( )

(c) Low ( )

(d) Very low ( ).

21. What are the causes of labour turnover in the industry?

(a) Lack of total compensation ( )

(b) Lack of indirect compensation ( )

(c) Lack of direct compensation ( )

(d) No compensation ( ).

22. Do construction employees lack motiv ation?

(a) Yes ( )

(b) No ( )

(c) Not applicable.

23. What are the most common components of worker s salary

structure?

(a) Base pay, housing allowance, transport allowances, bonus

and overtime ( )

(b) Social security; golden handcuff, golden parachute ( )

(c) Shares, debentures, medicares ( )

(d) Wellness programmes and insurance ( )

cxiii

24. What are the compensation packages mostly implemented by

the firm?

(a) Overtime and bonus ( )

(b) Pension scheme ( )

(c) Life insurance ( ).


25. Equitable compensation system result in high productiv ity and

achievement of organizational goal?



26. Do organization that are practicing total compensation for their

employees seem more likely to succeed?



27. Do construction companies have 50 – 60% of their workers

need, to engage in total compensation for their workers?

(a) Yes ( )

(b) No ( )

(c) I don t know ( )

cxiv

(d) None of the above ( )

28. Are there difficulties involved in implementing the system in

Nigeria?

(a) Yes ( )

(b) No ( ).

Documents

COMPENSATION SYSTEM IN NIGERIAN CONSTRUCTION INDUSTRY … ANULIKA S..… · COMPENSATION SYSTEM IN NIGERIAN CONSTRUCTION INDUSTRY (A STUDY OF ARAB CONTRACTORS NIGERIA LIMITED ENUGU