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Recent Trends in Wage and Salary Administration in Nigeria:

A Synopsis on Theoretical and Empirical Challenges

John I. Agburu

Department of Business Management, Benue State University,

Makurdi, Nigeria

[email protected]

Key words Abstract

Wage,

Salary,

Productivity,

Equity,

Fairness.

Wage and salary administration in Nigeria has been a subject of immense

controversy, if unresolved, in the context of Nigeria politico-administrative setup

for several decades now. The topic itself is as complex as it is slippery in terms of

definition and unique features. Among other things, the subject of wage and

salary administration in this country has been a controversial one. The attempt

has been to resolve such issues as what should be the basic pay, the issues of

labour cost, productivity, cost of living, and the question of compensation. This

paper takes a critical perspective on the generic forces at work in recent times

that relate to wage policies, strategies and schemes aimed at creating a conducive

atmosphere for the workers (both in the private and public sectors) in Nigeria to

perform. The main objective of the paper is to determine the key forces affecting

wage and salary administration in Nigeria. Among the most recent experiences

analyzed are those of the 2007 Federal Government Civil Service pay package

and the current university pay system. The researcher adopted a simple cross-

sectional survey method. Data collected were subjected to critical analysis using

mostly non-parametric methods. The main findings include the fact that there has

been (1) unwarranted lags between labour (employee) pay and productivity (2)

huge income differentials between the various levels of government where the

employees buy from the same market. The main recommendations embrace the

urgent need to strategize along schemes that attract high labour productivity,

equity and fairness in rewarding workers

© 2012 Insan Akademika All Rights Reserved

1. Introduction

According to Nwachukwu (2000) and Ogunbameru (2000) “wage and salary administration” refers to the

development, implementation and on-going maintenance of a base pay system. The central objective or

purpose of wage and salary administration is to provide pay that is both competitive and equitable (Atchison,

2003).

In relation to Nigeria, wage and salary administration activities refer to all those processes, strategies, plans

and schemes that give rise to pay policies. Such policies set the overall direction of pay within the

organizations or establishment, public or private as the case may be. The actual development of a base pay

system follows the determination of pay policies. For the purpose of clear direction, this paper embraces a

number of critical and related issues as that impinge on the all-important question of wage and salary

administration in Nigeria. Here, the focus is on relevant suggestions aimed at mitigating the difficulties

encountered in handling the issues of wages and salaries in this country (Nigeria).

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Agburu International Journal of Basic and Applied Science,

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2. Literature Riview

2.1 Wage Administration: Fundamentals

As Nwachukwu (2000), and Atchison, (2003) have aptly observed wages and salaries constitute a significant

part of the overall cost of operations, observing that in some organizations wages and salaries constitute over

50% of the operating costs. Companies or establishments that lack of ability to pay wages and salaries

regularly are in danger of disintegration. Poor wages are a constant source of frustration and can result in

declines in productivity.

Wages should not only be adequate but they must also show some element of equity, this is particularly true

from the point of the employees. Anything short of a fair and equitable wage or reward can quickly attract

the wrath of employees in an economy such as Nigeria. For many Nigerian employees, wages or salaries are

highly critical issues. They are decisive because without them in sufficient quantities, life becomes

extremely precarious for the worker and members of his/her family. As direct financial rewards, wages and

salaries are the most emphasized by the employees, thus they sort of take a centre stage in the scheme of

things as far as rewards for work is concerned. For many a Nigerian employee, wage or salary is the main

thing. It is thus against this background that the need for a dynamic, intelligent and foresightful wage and

salary administration cannot be overemphasized, particularly for an emerging economy like Nigeria in the

era of globalization.

Institutions or companies that seek to attract and retain highly productive and efficient employees cannot shy

away from facing the challenges posed by the need to pay wages adequately in a competitive environment.

2.2 Characteristics of Good Salary or Wages

Nwachukwu (2000), and Ngu, (2005) have identified the key features or characteristics of good salary or

wages as follows:

(1) The wage rates that prevail in the local market and in the industry. The main purpose here is that it

will ensure that the company remains competitive.

(2) The internal alignment of wages to ensure equity.

(3) Recognizing for individual Performance. Although two individual workers may have identical

qualification and/or experience, one may earn higher than the other due to his superior performance.

(4) Taking care of Individual Incentives. That is, incentives that:

(a) are easy to administer;

(b) whose results reflect the efforts of the individual;

(c) make the computation of reward easy;

(d) equate reward with the effort expected; and

(e) leave the factors necessary for the attainment of the objects in the control of the employees.

2.3 Possible Impacts or Effects of Wage Incentive Plan

The essence of a wage incentive plan is to relate productivity to reward. Thus, employees who manifest

outstanding performance receive extra pay. Usually, wage incentive in terms of extra pay is a cash payment

made every week or month. It is paid to those employees who exceed their quota of the output. Typically,

incentive plans used by organizations include piece-rate, profit-sharing, premium plans, stock option plans,

to mention but a few. At this juncture, it may be asked: what does the term or concept “wage and salary

administration” imply?

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246 Insan Akademika Publications

2.4 Wage Structure Determinants

Douty (1980) and Ferris (1985) have identified the main wages and salaries structure determinants as those

of (1) economic value or market value of an item which is the price it brings in due to the interactions of the

forces of demand and supply (2) job worth, whose analysis tends to rely more heavily on perceptions of

organization members of the relative value of the job (3) training: with requirements of jobs in terms of

length, difficulty and who provides it. It relates to human-capital analysis and development (4) employee

tastes and preferences. They are also economic factors. Worker expectations of future earnings strongly

influence occupational choice and thus labour supplies. The problem however is that the labour market is

not a perfect one. (5) Unions: Industrial unionism has also been shown by economic analysis to affect wage

structures. Large organizations where employees are represented by industrial unions tend to have a highly

differentiated wage structures (Ferris, 1985).

Apart from the above, other determinants of wage structure embrace (Ngu, 2005):

(a) Discrimination – the trends nowadays is to shift away from wage differentials based on sex or race.

(b) Industrial Relations Factors. Both industrial relations scholars and labour economists are involved.

The industrial relations scholars base their views mostly on non-economic forces while the labour

economists emphasize on such criteria as productivity, efficiency and general performance of the

employee.

(c) Social Determinants: On such things as equity, status, and the preservation of customary relations.

According to Atchison (2003) numerous forces operate as wage determinants. Roughly, these might

be classified as:

(1) economic

(2) institutional

(3) equity considerations.

Several scholars (Nwachukwu, 2000; Ogunbameru, 2004; Agbonifoh et al, 2005) in their studies have

emphasized the need to place premium on productivity in wage and salary determination.

A frequent trend in the administration of wages and salaries globally and in Nigeria in recent times is the

need to recognize the cost living as a critical factor. The cost of living makes workers and unions to pressure

employers (private and public) to increase pay.

2.5 Assumptions on Wage and Salary Administration.

David Belcher in Nwachukwu (2000) has advised that prior to embarking on policy regarding wages and

salaries, the organization should bear in mind the following 17 assumptions:

(1) Pay is an incentive job performance.

(2) Pay in the form of money has more incentive value than pay in the form benefits.

(3) Employee satisfaction with pay is evidence of its incentive value.

(4) Consistent treatment of employees in the matter of pay is a prerequisite to obtaining incentive value

from pay.

(5) Incentive value is lost when employees are ores paid.

(6) Employees react negatively to pay inequalities.

(7) Pay inequalities are similarly defined by all types and levels of employees.

(8) Employees regard internal pay inequalities as more serious than external inequalities.

(9) Employees react only to gross external inequalities.

(10) Employees comparisons of pay are made first in terms of jobs, and second in terms of performance on

jobs.

(11) Employees compare their pay with that of people in similar jobs.

(12) Employees comparisons of pay are uninfluenced by levels of aspiration and pay history.

(13) Managers make pay comparisons that are essentially similar to those of rank-and-file employees.

(14) Professional employees make external rather than internal comparisons.

(15) Employees accept the concept of hierarchy of jobs and pay.

(16) Employees’ determinants of the job hierarchy are similar to managements’ determinants.


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(17) Employees agree with management on what they are paid for and weigh the factors.

2.6 Job Evaluation: An Integral Element in Wage and Salary Administration

According to Mullins (1999) job evaluation is the process of systematically determining the relative worth of

jobs to create a job structure for the organization. The evaluation is based on a combination of job content,

skill required, value to the organization, organizational culture and the external market.

As Nwachukwu (2002), and Ngu, (2005) have stressed, job evaluation is the procedure to determine the

worth of a job vis-à-vis others. The four essential features of job evaluation according to Ogunbameru,

(2004) are:

(1) Impersonality. It must be impersonal; it is the job, not the person that is the subject of analysis.

(2) Simplicity. To reduce dissatisfaction arising from feelings of unfairness in the grading and salary

scales attached to the job, it is important that whatever system employed must be simple enough for

employees to understand.

(3) Flexibility. It should be flexible enough so that jobs can go up and down depending on the changes in

the content of the job.

(4) Verifiability. The results obtained for the exercise should be verifiable and capable of being validated

and upheld by another expert.

2.7 Compensation: Definition

The term “compensation” simply refers to the wages paid directly for time worked as well as more indirect

benefits that employees receive as part of their job or employment relationship with an organization (Otobo,

1987). Wages or salaries paid are typically payments made in cashable (naira) form that reflect work done

and related remunerations such as base pay or bonuses such as paid workers during the end of the year (e.g.

New Year packages and the like).

Benefits are forms of compensation beyond wages, for time worked including various:

(1) protection plans e.g. health insurance or life insurance;

(2) services;

(3) pay for time not worked e.g. vacations or sick leave;

(4) income supplements such as stock ownership plans.

2.8 Difficulties Workman Compensation

As Flippo (1980) and Nwachukwu (2000) have observed, workmen compensation is one of the most difficult

functions of personnel administration. Properly perceived, it is not only one of the most complicated

functions but also one of the most crucial to both employers and employees.

Workmen compensation is a highly important factor or force to employers given that it tends to constitute the

greatest single cost of organizational transactions. This is particularly the case in the recent Nigeria

experience. Take the public sector in Nigeria, especially the Local Government. Here, most of the revenues

collected are used for the payment of wages and salaries of their staff. The issue of compensation is a

frequent phenomenon also in the Nigeria private sector. Here, the organization is constantly faced with the

problem of striking a balance between revenue and production costs. At times costs are extremely high,

making it difficult for the companies to make ends meet.

Going by the trends in Nigeria, to the employees, compensation must be seen to be not only adequate but

also equitable. Equitable compensation entails comparisons and competitions both internally and externally.

Both internal and external comparisons and competitions can be both vertical and horizontal, thus making

the compensation system for each organization very problematic and cumbersome.


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2.9 Reasons for Frequent Agitations for Increase in Wages and Salaries

According to Scheifer (1979) the main reason for asking for more wages and salaries by the employees is to

help keep up with inflation. Inflation, defined as the general and persistent rise in the aggregate level, affects

workers adversely in a developing nation such as Nigeria today.

2.10 Trends in the Role of Unions: ASUU, NLU, etc.

The recent trends in wages and salaries administration have been clearly necessitated by the roles of the

various trade unions in the country (Nigeria), specifically, the Nigerian Labour Congress (NLC), the

Academic Staff Union of Universities (ASUU), the Senior Staff Association of Nigeria Universities, and a

host of others. Previously, and at several times, they went on strike to press home their demands for better

conditions of the institutions as well as improved working conditions generally.

The most recent ASUU strike took over four months before it was suspended. And as part of the

administration of wages and salaries, they has emerged a new salary structure and compensation scheme for

the nation’s universities.

2.11 Trends in the Nigerian Worker’s Demands

Until recently, there has been a generalization that all the Trade Unions or Workers’ demands in this country

have been directed at increase in wages, salaries and fringe benefits. Thus the workers or unions were

criticized for their myopic tendency in the sense that they ignored, according to the critics, other issues such

as the desire for autonomy or greater participation in major decision-making processes (Ngu, 2005).

Significantly, recent trends have indicated that the workers or unions have manifested a paradigm shift in this

respect. Since 1995 there have been tremendous changes in terms of the pattern and/or character of the union

demands or agitation in Nigeria. For instance, the Academic Staff Union of Universities (ASUU) declared

an industrial action to force the government to improve the leaving conditions of students in the universities

in addition to the demands for better condition of service.

2.12 Trends in Salary Structure: Nigerian Universities

Based on the most agreement between the Federal Government of Nigeria and the Academic Staff Union of

Nigeria (ASUU) in a document to this effect dated October 2009, it has been agreed that there shall be a

separate salary structure for University Academic Staff to be known as Consolidated University Academic

Salary Structure II (CONUASS II). The CONUASS II consists of three components thus:

(1) The Consolidated Salary Structure for Academic Staff (CONUASS) approved by the Federal

Government of Nigeria (FGN) effective 1st January 2007.

(2) Consolidated Peculiar University Academic Allowances (CONPUAA) exclusively for university

teaching staff and derived from allowances not adequately reflected or not consolidated in CONUASS.

(3) Rent as approved by the FGN effective 1st January 2007.

Perhaps one of the most interesting features of the current trends in the wage and salary administration as

pertains essentially to the university system can be seen to reside in the realization by the Re-negotiation

Committee that Nigerian University Academic represent the crucial mass of scholars in the society (AFGN-

ASUU 2009:10), “with the potential for transforming it”. In the light of this, the Committee felt that

academic deserve unique conditions of service which will motivate them like the intellectuals in other parts

of the world to attain greater efficiency and effectiveness in service delivery with regard to teaching, research

and community and thereby stem the “brain drain” (AFGN-ASUU, 2009:10). The new university salary

structure indicates that the basic pay has increased by 50%.


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2.13 Trends in Academic Allowances

With the most recent development, it has been agreed that the entitled academic staff shall be paid a number

of allowances. These allowances include those of Postgraduate Supervision; Teaching Practice/ Industrial

Supervision/ Field Trip Allowances; Honoraria for External/Internal Examiner (Postgraduate Thesis);

Honoraria for External Moderation of Undergraduate and Postgraduate Examinations; and Postgraduate

Study Grant.

Apart from the foregoing other allowances include those for External Assessment of Readers or Professors;

Call Duty/Clinical Hazard Responsibility Allowance and Excess Workload Allowance.

Non-Salary Benefits

Apart from the above basic pay structure, the trends indicate some non-salary conditions of service.

Specifically, the following fringe benefits are approved and be subject to further improvement over time.

These include:

(1) Vehicle Loan/ Car Refurbishing Loan. Among other things, the loan is repayable over 4 years

period with a 2% charge as administrative cost.

(2) Housing Loan. A loan that is equivalent to at least 8 times the staff annual salary.

(3) Research Leave. An academic staff is entitled to a research leave of 26 working days per annual.

(4) Sabbatical Leave.

(5) Annual Leave.

(6) Sick Leave.

(7) Maternity Leave.

(8) Injury Pension.

(9) Staff Schools.

(10) Provision of Office Accommodation and Facilities.

2.14 Distinguishing Trends or Patterns in Wages and Salaries: The Civil Service, Federal and State

In a bid to enhance the performance of the workers in both the public service and civil service in Nigeria, the

following salaries and allowances have been approved. They include: (1) Basic Salary (2) Housing

Allowance (3) Transport Allowance (4) Meal (5) Utility (6) Responsibility (7) Entertainment (8) LTG (9)

Furniture.

This structural transformation in wages and other remunerations affect workers or staff in all salary grade

levels, 01 to 17. One future of the current trends resides in the narrowing of the wage differentials,

compared with the past trends. The trends in the housing meal, utility and other benefits or allowances are

particularly illuminating and revealing in the sense that the disparities between e.g. grade levels 15 – 17 are

relatively minimal.

2.15 Discrepancies Between Federal and State Service Pay and Allowances.

Although most of the variables in terms of pay and allowances enjoy common nomenclatures for both the

Federal Civil Service and State Civil Service, there are marked differences in the monetary values attached to

them. For instance, the transport allowance in the Federal structure varies from grade level to grade level,

whereas it is, using Benue State as a case, “grouped” between sets of grade levels e.g. staff on grade levels

01 to 06 are entitled to N800.00 per month, those on grade levels 07 to 10 get N1,369.00 per month and so

on to grade levels 15 to 17 that get N3,004.00 per month. Similarly, the pattern is generally identical with

meal and utility allowances. Consequently, the civil servant at the State level is worse off in this respect.


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The intra-civil service pays and allowances comparisons show a lot of discrepancies too. Take for example,

a Federal Civil Servant on grade level 03 step 1 and compare his remunerations with the one on say, grade

level 16 step 1, the formers’ rent is 50% (N2,669.68) while the latter’s is 75% (N24,923.16). The story can

be said to be the same if one pries into other grade levels in the analysis. An unhealthy trend? Whatever the

explanations might be to justify the discrepancies in allowances such rationalizations can hardly be said to be

empirically realistic taking cognizance that all the workers or staff buy from the same market. In effect, the

question of equity has not quite authentically addressed by the wage and salary administration in Nigeria in

recent times. This is by no means to say that improvement have not been made in terms of wage and salary

administration in this country.

The differentials of “economic distances” in the allowances and other benefits stand in need urgent

restructuring in order to address the socio-economic issues, equity and fairness in income distributions with a

focus on the public sector in particular.

2.16 Question of Money Illusion

Some critics (Agbonifoh et al, 2006) have asserted that the trends in the wages and salaries administration in

Nigeria are unwarranted going by the current socio-economic development of the nation. They assert that

most of the beneficiaries of the rises in wages and salaries are suffering from “money illusion” i.e. the

beneficiaries fail to see that the value of what wages and salaries they earn dwindle quickly. In other words,

there is a decrease in the value of increased earnings to workers.

2.17 Social Forces and Explanations

The recent trends in the Nigerian wages and salaries administration portray one prominent features i.e. that to

those involved in pay decisions (the unions, government, employer, and so on) social forces seem to be more

apparent than economic ones. The agitations for higher wages fail to focus on labour productivity or returns

to scale.

2.18 Trends in Compensation Systems: A Critique

A major current trend in compensation can be seen in terms of a paradigm shift from base pay to emphasis

on incentives. As far as the situation in Nigerian civil and public sectors is concerned, the shift has become a

critical development. It appears that the trends are completely reversible in the sense that these benefits are

only flexible in an upward direction.

One of the most conspicuous attributes of the current wages and salaries administration trends resides in

“monetization”. It is gaining a great ground in the Nigerian system. But then, what is “monetization”? It

simply implies the quantification in monetary terms (in terms of naira?) of all those benefits that the

government and other organizations used to provide for their employees (or staff) as part of conditions of

service (Arora, 2008).

Unequivocally, the monetization scheme or strategy has become a rewarding policy and apparatus in the

interest of the employees. As a device for rewarding performance in monetary terms, most of the staff or

employees and unions are most likely to be attracted to it. Under it, the items being partially or fully

monetized include meal subsidy, utility allowance, medical allowance, domestic servant, furniture

allowance, transport, residential accommodation allowance, duty tour allowance, leave grant, fueling

allowance, motor vehicle allowance and so on. The whole “mantra” smacks of the biblical adage that

“money answers all things” i.e. that money is a critical or decisive factor in exchange and other transactions.

With adequate monetization, workers hope to make ends meet with little ado, even in the throes of

inflationary pressures. But then, the problem is there: how can an optimum or best monetization be attained?

As the trends seem to indicate, the days when optimality will be attained with respect to monetization of


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benefits are pretty not in the offing, especially in the contemporary Nigerian system. Herein lies what might

be perceived as the paradox of monetization.

3. Methodology

In a bid to attract an optimal level of degree of reliability and consistency in research, a simple empirical

cross-sectional study is applied. The main instruments for eliciting of the relevant data are the structured

questionnaire and oral interview. The researcher administered a total of fifty-five questionnaires distributed

among three broad categories (that is, Federal Government employees, State Government employees and

University staff).

The sampling technique applied was essentially a deliberate one for the purpose of analytical simplicity and

representativeness. Details can be seen below in terms of data presentation and analysis.

4. Result and Discussion

Table 1 Subjects Notion Regarding the Relationship Between Pay and Labour Productivity

Statement Category Degree of Response

SA A N D SD T

There has been a close relationship

between pay and labour (employee)

productivity in the economy.

Federal Civil Servants 1 0 1 4 4 10

State Government Civil Servants 1 1 1 3 6 12

University Staff 1 2 2 8 5 18

Total 3 3 4 15 15 40

The general opinion as shown in Table 1, is that there has been a lack of close relationship between pay and

labour productivity in the area studied. In fact, 30 out of 40 respondents (or 75%) feel that pay and labour

productivity have not moved pari pasu in this area. The subjects feel that pay has not been moving upwards

as did output or productivity.

Table 2 Opinion Concerning the Cost of Living and the Reward (Compensation)


SA A N D SD T

There has been an optimal

relationship between employee

compensation and the trends in the

cost of living in this economy.




Total 3 2 2 10 23 40

Going by the data of Table 2, it is quite obvious that the majority of the respondents are of the view that the

relationship between employee compensation and the cost of living has been far from being optimal. Thirty-

three (33) out of 40 respondents (representing 83%) feel that optimality has been gross lacking between the

two variables under reference. For most of the respondents, compensation has failed to take into

consideration the rising trends in the cost of living.


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Table 3 Respondents Perception of the Basic Pay Whether has been Adequate


SA A N D SD T

The basic pay has been adequate so

far in Nigerian system.




Total 2 4 5 6 23 40

Most of the respondents, as shown in Table 3, feel that the basic pay has been grossly insufficient. A total of

29 out of 40 (or 73%) are of the view that the basic pay has been inadequate to meet the basic needs of the

workers or employees in the organizations studied. Only 15% feel differently. Basic pay if insufficient can

produce a negative effect in the sense that the employees will be demotivated eventually.

Table 4 Subjects Opinion that Wages and Salaries take the Centre Stage in Matters of Worker

Compensation in Nigeria


SA A N D SD T

As direct financial rewards wages

and salaries are the most emphasized

by the employees.




Total 30 6 2 1 1 40

As the data in Table 4, show 36 respondents out of 40 (or 90%) believe that direct financial rewards such as

wages and salaries should feature most prominently when it comes to staff remuneration in the present day

world. This is not to imply that other forms of rewards (praises, verbal commendations and the like) are not

critical.

Table 5 Subjects Perception Regarding the Need for Competitive Wages and Salaries of Employees in the

Globalization Era


SA A N D SD T

The need for a dynamic intelligent,

foresightful competitive wages and

salaries administration cannot be

overemphasized in the globalization

era.




Total 24 12 2 1 1 40

The data of Table 5, indicate overwhelming need for dynamic and foresightful competitive remunerations in

Nigeria in the globalization era. Out of respondents, 36 (or 90%) feel this way. Companies that aspire to


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succeed in the globalization era seem to have no choice but to attract and retain employees via competitive

wages and salaries.

Table 6 Views Pertaining to the Labour Cost in the Contemporary Nigerian System


SA A N D SD T

The cost of labour is very low in the

present day Nigerian system.




Total 23 9 3 3 2 40

From the data of Table 6, it is very clear that to the majority of the respondents, labour cost has been very

low or minimal in Nigerian organizations. The reason for this might be traceable to the fact that the supply

of labour outweighs the demand for labour. Unemployment of human resources has been observed to be a

commonplace phenomenon over the year.

Table 7 Respondent’s Perception of the Role of Labour Unions as well as the Influence of ASUU in

Nigeria


SA A N D SD T

Both the Labour Congress and ASUU

have played liable roles in wage and

salary administration in Nigeria over

the years.




Total 23 10 2 2 3 40

According to the data of Table 7, the overwhelming proportions of the subjects are of the view that both the

Labour Unions and ASUU play crucial roles in the issue of wage and salary administration in Nigeria. In

fact, 83% of the respondents feel that without the influence of these trade unions, the character of wage and

salary administration would be adversely different much to the chagrin of the workers in general.

Table 8 Respondent’s Feeling Regarding the most Critical Factors to Consider in Wages and Salaries

Administration in Nigeria.

No Variables Number of Responses Percentage (%)

1 Employee Productivity 8 20

2 Cost of Living 12 30

3 Global Competitiveness 7 18

4 Ability to Pay 5 12

5 Equity and Fairness 8 20

Total 40 100


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As the data of Table 8, show most of the respondents are of the view that the cost of living should be the

over-riding variable in wages and salaries administration. The table show that out of a total of 40

respondents, 12 (or 30%) felt that emphasis should be on the cost of living facing the employees. Next in

ranks are employee productivity and equity (and fairness), whatever that implies, which are pegged at 20%

each. The ability to pay is the least factor to contemplate, perhaps because there is an inherent notion that

institutions or employers have adequate ability to reward the workers.

5. Conclusion

The study discovered that there has been a gross lack of close relationship between pay (or compensation in

general) and employee productivity. Consistently, productivity has tended to lag behind pay, be it at the

federal or state government levels.

The research found that the cost of living has been rising astronomically relative to wages and salaries paid

the workers as the aggregate. The study was found that workers were dissatisfied with their net earnings or

pay. Furthermore, employees preferred direct financial rewards to non-financial rewards.

The study found that there were overt absence of concrete policies and strategies aimed at attracting optimal

employee performance in the establishments. Last, by no means least, it was found that the cost of living

occupied the centre stage when it comes to the ranking of variables impinging on wages and salaries

administration in Nigeria, though such other factors as employee productivity, equity and fairness, global

competitiveness have their influences in this respect.

In order to meaningfully improve on the current trends in salary and wages administration in Nigeria, the

following actions should be carried out:

(1) Establishing right strategies which should be optimal, timely and lucid in nature.

(2) Periodic review of the plans, program and implementation of the existing schemes or policies to

enhance labour output or productivity.

(3) Periodic interactive sessions with the unions (i.e. government and union to meet regularly to monitor

wages and salaries trends).

(4) Let wage differentials be “narrowed” among different grade levels.

(5) Flexibility. It allows new methods or techniques of rewarding workers to take place.

(6) Participative Pay System. Though at its embryonic or rudimentary stage, the system in Nigeria is

fairly participative. This is particular true compared with the military regimes era. A participative pay

system involves employees in the design and implementation of the package.

(7) Taking cognizance of inflation trends.

(8) A pay system can be designed by staff members of the organization’s human resource department, a

committee of managers in the organization, an outside consultant, the employees or a combination of

these resources (Ogunbameru, 2004).

(9) What is crucial is the need for all hands to be on deck in wage and salary administration.

(10) Team work rather than a “loner” work stands to be more rewarding and less troublesome.

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Malthouse Press Ltd, Lagos.

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