1

ASSESSMENT OF HUMAN RESOURCES MANAGEMENT

IN A PRIVATE SECTOR ORGANIZATION (A STUDY OF

FIDELITY BANK PLC)

ONWUZURUIKE, NGOZI ESTHER

PG/MBA/09/54330

A PROJECT REPORT SUBMITTED IN PARTIAL

FULFILLMENT FOR THE AWARD OF MASTERS DEGREE IN

BUSINESS ADMINISTRATION, (MBA) IN MANAGEMENT

2

JULY, 2011

CERTIFICATION

This work embodied in this project report is original and has been submitted

in part or full for any other diploma or degree of this or any other university.

……………………………………………………..

ONWUZURUIKE, NGOZI, ESTHER

This is to certify that Onwuzuruike, Ngozi a post graduate student in the

department of Management and with registration Number

PG/MBA/09/54330 has satisfactorily completed the requirement for project

research in partial fulfillment of the requirements for the award of Master of

Business Administration (MBA) in Management.

…………………………… ………………………….

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(Head of Department) (Supervisor)

Date:………………….. Date:…………………..

4

DEDICATION

This project is dedicated to the one who love me with an everlasting love,

Jesus Christ the son of the living God.

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ACKNOWLEDGMENT

I thank the Almighty Father immensely for increasing His Mercy on me and

graciously granting me His blessings and singular opportunity to carry out

this research project. To God alone be the Glory as He is my strength, my

shield and the lifter up of my head.

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A lot of gratitude to Mr. C.O. Chukwu my supervisor who supervised the

project to the end. I am grateful to him for his critical reviews of the work at

the different stages.

I wish to thank my very Ven.-Harold Onwuselogu for the cooperation,

confidence and encouragement given to me during the course of preparing

this project and throughout my MBA programme.

I am equally grateful to my parents for their support throughout my MBA

programme.

I specially want to express my profound gratitude to the family of Sir & Lady

Ben Abanif for their support throughout this programme.

I am also grateful to these people without whom I would not have reached

this height in my MBA programme, Miss Ugbonma Nnaji and Mr. Godwin.

I am also indebted to my friend Basil Eboh for all the help rendered towards

the accomplishment of this research project.

i. Onwuzuruike Ngozi E. ii. Department of Management

iii. UNEC iv. July 2011

ABSTRACT

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This study is titled “Assessment Of Human Resources Management In Private Sector Organization (A

Study Of Fidelity Bank Plc). Human resources management is the major force that powers other

resources towards the achievement of an organization in terms of profitability, policies and set goals.

Human resources management was defined as having the right numbers and types of employees who

must be managed in such a way that they will be able to achieve their personal and organizational

objectives simultaneously. Human Resources management was assessed through profitability and cost

reduction. Functional areas of human resources management include personnel planning, recruitment

and selection; education, training and development; compensation; health and safety; employee and

labour relations; and personnel research. The tools 0f analyses in this study were multiple regression

and the analysis of variance (ANOVA). The study tested the hypothesis that profitability is not

dependent on human resources and admin cost of an organization; and the hypothesis that personnel

cost is not directly attributable to level of productivity of an organization. The results showed that cost

of human resources varies directly with profitability (performance) whereas, the change in

administrative overheads do not affect profitability or performance. It was recommended that Fidelity

Bank Plc should consistently groom her human resources department for high level performance. Cut

cost on administrative overhead, cut down on taxation by devising tax avoidance; synergy of the

different departments for better performance; and pursuing of policies of best practice in the banking

industry.

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PREFACE

The concept of Human Resources Management is a very interesting one

judging by the value it always add to the overall or total output of every

organization. The performance of management is measured by the level of

efficiency and effectiveness that an organization has succeeded in recording

in a particular year(s).

This study therefore has been chosen in order to assess Human Resources

management in a private organization.

Human Resources Management has attracted scholars and researchers in

private and public organizations, as a means of trying to understand the

relationship between performance and cost.

Human Resources Management is intended to proffer solutions to

challenges of the modern manager i.e. how to engage the right manpower,

remunerate, train, secure the work environment, as well as manage

industrial relations.

This study will appeal to all those with interest in finding solutions to

challenges of human resources.

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TABLE OF CONTENTS

Cover page - - - - - - -

Title page - - - - - - - i

Dedication - - - - - - - ii

Certification - - - - - - - iii

Acknowledgement - - - - - - iv

Abstract - - - - - - - - v

Preface - - - - - - - - vi

Table of contents - - - - - - - vii

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List of tables - - - - - - - x

CHAPTER ONE

INTRODUCTION

1.1 Background of the study - - - - - 1

1.2 Statement of the problem - - - - - 5

1.3 Objectives of the study - - - - - 6

1.4 Hypotheses of the study - - - - - 6

1.5 Significance of the study - - - - - 7

1.6 Scope of the study - - - - - - 8

1.7 Limitations of the study - - - - - 8

References - - - - - - 10

CHAPTER TWO

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REVIEW OF RELATED LITERATURE

2.1 What is Human Resources Management? - - 11

2.2 Objectives of Human Resources Management - 15

2.3 Functional areas of Human Resource Management- 17

2.4 Personnel cost minimization through Effective

Scheduling in a developing country.

The Nigerian experience- - - - - 21

2.5 Goals/Importance of Human Resource

Management- - - - - - - 22

2.6 The roles of Human Resource Department in an

Organization - - - - - - 25

2.7 Overview and definitions of Human Resource

Management - - - - - - 31

2.8 Other views about Human Resource Management - 34

References - - - - - - - 39

CHAPTER THREE

RESEARCH METHODOLOGY

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3.1 Introduction - - - - - - - 40

3.2 Research design - - - - - - 40

3.3 Sources of data - - - - - - 41

3.4 Method of data collection - - - - - 41

3.5 Method of data analysis - - - - - 41

3.6 Tests of hypotheses - - - - - 43

References - - - - - - - 45

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.1 Presentation of data - - - - - - 46

4.2 Analysis of data - - - - - - 47

4.2.1 Test of hypothesis (1) - - - - - 52

4.2.2 Test of hypothesis (2) - - - - - 55

References - - - - - - - 59

CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION

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5.1 Summary - - - - - - - 60

5.2 Recommendation - - - - - - 62

5.3 Conclusion - - - - - - - 63

Bibliography - - - - - - 64

LISTS OF TABLE

Table 4.1: Administration overheads, remuneration and profitability

of Fidelity Bank Plc (2005-2009).

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Table 4.2: Multiple Regression analysis table

Table 4.3: ANOVA of profitability of profitability, personnel, and overhead

costs.

Table 4.4: ANOVA of profitability, personnel and overhead costs (summary)

Table 4.5: ANOVA of Gross earnings, profitability, remunerations and

administrative cost.

Table 4.6: ANOVA of Gross Earnings, profitability, remuneration and admin

cost (summary)

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Human resources are recognized as the most important resources

required for the production of goods and services, as well as the key to

rapid socio-economic development and efficient service delivery. In his

view Barney, (1995:50), explained that human resource include all the

experience, skill, judgment, abilities, knowledge, contact, risk taking and

wisdom of individual and associates within an organization. Without an

adequate skilled and well motivated workforce operating with a sound

human resource management programme, there will not be development.

Any organization that underrates the critical role and under plays the

importance of people or human resource in goal achievement can neither

be effective nor efficient.

The realization of the value of human resource in any organization has

in recent time led to a more human focus approach in managing

organization. Thus, human resource management has gained prominence

in business management. Human resource management is a modern term

for what has been traditionally referred to as personnel management. A

strong tendency to adopt the term „human resource management‟ as a

substitute for „personnel management‟ has developed and grown stronger

(Ikeagwu, 1998). Human resource management embraces those activities

designed to provide for and coordinate a human resource of an

organization. It involves management decision and practices that directly

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affect or influence the people who work in the organization (Ogbuaja,

2002).

The burden of human resource rests squarely with line and functional

managers who as departmental heads, design and utilize the element of

human resource process in their departments and units. Indeed every

manager should be acquainted with human resource management process

and procedures should not only cooperate maximally with the director of

human resource, as a specialist but also apply relevant element and

procedure of the process, and must be effective at various levels of the

organization. This is the only way the workforce can be effectively

engaged for the achievement of the organizational goals (Eze 2002). They

are particularly keen to employing individuals who can operate flexibly

and adapt to different tasks as opposed to keeping rigidly defined job

demarcations.

Human resource is the manpower existing in an organization. It is a

vital factor of production and it is also referred to as labour in the language

of the economists. The other factors of production can only be useful only

when the human resource organizes them for the purpose of realizing the

set goals of the organization.

Human resources are vital to the generation of all goods and services.

Just as money and raw materials are resources, so are people or human

resources of an enterprise. Other factors of production like land and capital

require human resources to convert them to consumable goods and

services for the good of human beings and for the survival of the firm.

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Many organizations, both public and private firms in Nigeria and

elsewhere in the world find it very challenging to deal with the issue of

human resources management. It is vital to the extent that it has become a

subject of debate, seminars and academic or academic researches. It is vast

in scope and somehow, there is variety in type of resources one can find in

every organization. The different requirements of each organization also

require different approaches to the way that human resources management

should be handled due to their peculiarities. For instance, the need for

industrial harmony, specialization of jobs, promotion and recruitment of

staff, training and manpower development, remuneration and staff

discipline or motivation are important matters that the human resources

manger have to grapple with in an organization.

Another vital thing one is faced with is the fact that the work force is

always ageing, coupled with the constant invention of new technologies

that threaten human resources. Management is always challenged by the

methods suitable for replacement of the ageing workforce and how to cut

costs in the human resource department.

The quality of output of goods and services which an organization turns

out is correlated with the quality of human resources that is in that firm. A

well organized human resources management will not only turn out high

quality output, it will also lead to effective and efficient utilization of

other factors of production thereby cutting cost (minimization of cost) and

raising profitability.

Referring to this issue, Glueck (1982) reported that labour costs range

from approximately 25 to 30 percent of total operating expenses in some

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process industries such as chemical or petroleum plants, and from 75 to 85

percent of operating expenses in labour intensive operations. Such as

public school system” adding that they significantly influence

productivity. In his view, “people operate machines, design the new

products and services, make the decisions to borrow and spend financial

resources, market the products and deliver the services. People even

decide the objectives of the organization”. Obikoya (1996) in his opinion

said that management of human resources is therefore a very important

business function. An organization must have the right numbers and types

of employees who must be managed in such a way that they will be able to

achieve their personal and organizational objectives simultaneously”.

While taking significant notice of human resource in the production

process, it is still a debate as to whether the cost of labour is fixed or

variable. Some people in management argue that the cost of human

resources does not change with every level of activity and as such it is

fixed. Others believe that cost of human resources do vary along the line

of production process due to varying degrees of output requirement. It is,

therefore, imperative to look at the contribution of labour as partly fixed

and party variable, in order to rest the argument between the two opposite

schools of thought.

The human element involved in this study as it pertains to management

of personnel as a factor of production, makes it quite distinct and separate

from the rest of them. Human beings can not be subjected to laboratory

conditions to be controlled by managers. They are guided by their senses

and they are rational in their thinking. Human beings have emotions and

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they react to various situations, moods and conditions. These things also

affect their psychology and general performance in their work

environments. Managers, faced with all these circumstances and

complexities of the human element, are constantly challenged to find

solutions to the question of how to improve on performance in the entire

organization. For example, human beings fall sick, go on holidays, grow

old, demand higher wages and better conditions of services, make

mistakes, they die, flout orders, full of negative behaviours and

unpredictable in their attitude. All these challenges can always have

drawback on the set objectives and goals of the organization if they are not

properly managed by the human resource managers.

1.2 STATEMENT OF THE PROBLEM

This study seeks to know the effectiveness of human resources

management practices which are, placement, training, performance in

terms of output or profitability in a private sector organization with

Fidelity Bank Plc as its focus. The second problem is how to assess

management correctly based on empirical evidence about performance,

especially in a private sector business. To assess management correctly,

one needs a lot of determination and empirical evidence about

performance. How do we do this and in a private sector business for that

matter? The problems are glaring.

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1.3 OBJECTIVES OF THE STUDY

The following objectives are to be pursued in this study:-

(i) To assess human resources management as it affects productivity or

performance in Fidelity Bank Plc;

(ii) To examine the challenges faced by human resource managers in

this private sector business;

(iii) To proffer solutions to the challenges of human resources

management in Fidelity Bank Plc; and

(iv) To establish the relationship between human resources cost,

administrative cost and profit after tax of Fidelity Bank Plc.

1.4 HYPOTHESES OF THE STUDY

The following hypotheses will be carried out during this study:

(1) HO: Profitability in business is not dependent on human resources and

administrative cost of the organization.

H1: Profitability in business is dependent on human resources and

admin cost of the organization.

(2) HO: Human resources cost is not directly attributable to level of

productivity of an organization.

H1: Human resources cost is directly attributable to level of

productivity of an organization.

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1.5 SIGNIFICANCE OF THE STUDY

This study is significant for the various benefits it will provide in the

following ways:-

(1) It will help managers understand the challenges faced by private

sectors;

(2) The relationship between cost, profitability, and performance of

management will be established;

(3) It will help carry out a good assessment of productivity.

(4) It will provide a background to future researchers in a similar

endeavour.

(5) It will provide answers to some questions surrounding the human

resources factors in the production process, as the most important.

(6) The private sector is thereby given necessary focus as a major

contributor to national DGP, and its also an expression of government‟s

effort to encourage private entrepreneurship in Nigeria.

(7) The tests of hypotheses will provide empirical evidence that is

necessary for clarification of facts as to the claims over the dependency

of such variables as profitability and output, on level or quality of

human resources, and manpower development.

1.6 SCOPE OF THE STUDY

This work covers the private sector business only. This study has been

carried out in Nigeria, with particular reference to a private company

called fidelity Bank Plc.

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The study also has also explored to explore the concept of cost,

profitability, efficiency and their relationship to human resources

management in the private sector business. By this clarification, therefore,

all other areas not mentioned are hereby excluded.

1.7 LIMITATIONS OF THE STUDY

The following are some the limitations of this study:-

1. The dearth of adequate and dependable data on profitability,

manpower and cost is a limitation. Statistically, our private

enterprises lack culture of accurate record keeping, and more

importantly, they show no interest in the release of information for

academic exercise of this nature. This bureaucracy is responsible for

inadequate materials to be used for analysis of this kind.

2. It is difficult to measure performance as some of the variables

referred to in this study are not fully acceptable to all and sundry.

The methods or procedure used have their shortcomings or

drawback that can equally affect acceptability or credibility of the

exercise.

3. The data in use are secondary in nature and as such, they are subject

to the limitations associated with the use of secondary data.

4. There are time and financial limitations. It is important to note that

time and financial resources are not always enough, this study not

being an exception.

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REFERENCES Barney, J.B. (1975), looking inside for competitive Academy of Management

Executive Ikeagwu, E. (1998), Personnel/human Resources management, Unec: Department

of management. Eze, F.C. (2002), Human resources Management in Nigeria: the key component

Enugu: Mekannand Publications.

Glueck, Willliam F. (1982), Personnel, Diagnostic Approach, 3rd edition. Texas: Business Publication Inc.

Obikoya, J.O. (1996), Essentials of personnel Management. Ijebu-Ode: Pius Debo

(Nig) Press.

Oyesiku, O.K. and Omitigun, O. (1999), Statistic for social and management Sciences. 2nd Edition Lagos: Higher Education Books, Publishers (HEBP.)

Ugbuaja, C.O. (2002), Human Resources Management Lagos: Ilupeju Press

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 WHAT IS HUMAN RESOURCE MANAGEMENT?

It was Susan M. Heatfield that said, that “Human Resources

management (HRM) is the function within an organization that focuses on

recruitment of management of and providing direction for the people who

work in the organization. Human resource management can also be

performed by line managers” accordingly, human resource management is

the organizational function that deals with issues related to people such as

compensation, hiring, performance management, organization development

safety, wellness, benefits, employee motivation, communication,

administration, and training.

Human resource management is also a strategic and comprehensive

approach to managing people and the workplace culture and environment.

Effective HRM enables employees to contribute effectively and productivity

to the overall company direction and the accomplishment of the

organization‟s goals and objectives.

Susan also added that Human Resource Management is moving away

from traditional personnel administration and transactional role, which are

increasingly outsourced. Human Resource management is now expected to

add value to the strategic utilization of employees and that employee

programmes impact the business in measurable ways. The new role of human

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resources management involves strategic direction and human resource

metrics and measurements to demonstrate value.

Obikoya (1996), wrote that “business organizations can be viewed as

collection of people and activities separated by functions that share a

common mission. Among the functions in organizations are marketing,

production, finance and personnel” among other things, he said that “the

personnel function represent the applied component of the field of human

resource management. It is usually identified as a staff function, much as

production planning or quality control are viewed as staff functions to

manufacturing”.

The term human resources refers tooth to the employees who work for

a specific firm, and to the part of the firm that hires employees. The

personnel function, as part of the general management process, is concerned

with the development, implementation and evaluation of organizational

policies and practices bearing on the employment relationship.

Rowland et al (1982), noted that while the focus of general

management is on the management of the organization‟s many resources, the

specific focus of human resource function is on management of its human

resources.

Ubeku (1972), examined personnel management from two

perspectives. First, as a function or responsibility of every manager or

supervisor who has people under him, all of whom are working towards the

achievement of desired goals. Secondly, as a function in an organization

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which is performed by a particular department, the human resource

department.

Obikoya (1996) quoting Glueck, said that “human resource

management is the function of all enterprises which provide for effective use

of human resources to achieve both the objectives of the enterprises and the

employees”., Glueck referred to human resource management as that part of

management which deals with utilization, motivation and protection of

workers, adding that these three functions are not separate and self-contained,

rather, they are inter-dependent as the benefits from one division rubs on the

other.

In his view, Peter, M.O. (1983) said that “human resource management

means dealing with employees” he emphasized two aspects, namely, human

resource management which permeates right through the function of

management, and the work of the human resource department. In effect,

human resource management, according to him, is that part of management

concerned with their relationships with an enterprise. “No matter how small a

business enterprise is, the human resource function must be performed, even

though, there might not be a separate human resource department to perform

the function. Regardless of the type of institution, human resource (human

resources) management exists to harmonize the workers with the

organization‟s objectives”.

Human resources are clearly the most important assets of any

organization and a resource which needs to be managed. People are

individuals who bring their own perceptions, attributes, feelings towards the

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organization‟s system and styles of management, their duties and

responsibilities and the conditions under which they are working. Whatever

the nature of the work of the organization, a manager achieves results through

the performance of other people. Recognition of the needs and wants of staff

and of the nature of their grievances is a positive step in monitoring them to

perform well. The efficiency of staff, their commitment to the aims of the

organization, the skills and attitudes they bring to bear on the quality of

service offered are fostered by good human relationship and effective human

resources management policy and practice. The effective management of

people is influenced by the philosophy of top management and the attributes

which they bring to bear on relationship with staff, and the problems which

affect them (Laurie, 2004)

Barney (1995) explained that human resource includes all the

experience, skills, judgment, abilities, knowledge, contacts, risk taking and

wisdom of individuals and associated within an organization. Without an

adequate skilled and well motivated work force operating within a sound

human resources management programme, development is not possible. A

manager or an employee, whether in the private or public sector, which

underrates the critical role and underplays the importance of people in goal

achievement can neither be effective nor efficient. Dieke, (2002) human

resources can be described as the pool of human capital under an

organization‟s control in a direct employment relationship. Human resources

are important source of sustained competitive advantage in the international

hospitability industry Onah (2003) views human resources as the financial,

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technological and other resources that are managed in organizations. The

quality of human resources in hospitability industry will allow enterprise to

gain a competitive edge and deliver added value with their services, because

hospitability industry is a high-touch, high tech, high involvement industry

where it is the people who make the difference.

Though human resources have been part of business and organizations

since the first days of agriculture, the modern concept of human resources

began in reaction to the efficiency focus of Taylorism in the early 1900s.

By 1920, psychologists and employment experts started the human relations

movement, which viewed workers in terms of their psychology and fit with

companies, rather than as interchangeable parts. This movement grew

throughout the middle of the 20th century, placing emphasis on how

leadership, cohesion and loyalty played important roles in organizational

success. Although this view was increasingly challenged by more

quantitatively rigorous and less “soft” management techniques in the 1960s

and beyond, human resources development had gained a permanent role

within organizations, agencies and nations, increasingly as not only an

academic discipline, but as a central theme in development policy.

2.2 OBJECTIVE OF HUMAN RESOURCE MANAGEMENT

The institute of human resource management (London) has the

objectives of human resource management ad follows:-

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“To bring together and develop into an effective organization, the

men and women who make up an enterprise and, having regard for

the well-being of the individual and of working groups, to enable

them to make their best contribution to its success”.

The opinions of Rosenblatt, Bonnigton and Needles (1977), the human

resource overall objective-infact, its reason for existence is to contribute to

the achievement of organizational and employee effectiveness” They added

that the human resource objective could be accomplished by addressing

society‟s expectations, meeting enterprises‟ objectives and satisfying

employees‟ needs”. The performance of this function is what makes the

difference between successful and unsuccessful enterprises. Successful

human resource management is future oriented, action oriented, and shows

concern for the individual employee.

In line with this opinion, it was explained that future orientation is

concerned with helping an enterprise achieve its objectives not only for the

present but also in future.

This is done by providing the number of competent and well motivated

employees for effective and efficient performance of the various programme

of training and development instituted by firms to improve future employee

performance on the job.

It was also explained that „individual orientation‟ ensures that

individual worker is treated as a unique person from the others, and that

programmes are designed to meet the special needs and expectation of each

30

employee. It calls for a dynamic human resource development and utilization

policy on the part of the organization.

This opinion also had it that „action orientation‟ involves the right of

employees to participate in company management decision making.

Employees are involved through collective bargaining, participation in

committee systems and as members of employees‟ representation groups

among others.

2.3 FUNCTIONAL AREAS OF HUMAN RESOURCE OR HUMAN

RESOURCE MANAGEMENT

Making their own contributions Graham (1974) and Mondy Noe (1982),

explained that the sound human resource management functions comprise six

components namely:-

- Personnel planning, recruitment and selection

- Education, training and development

- Compensation

- Health and safety

- Employee and labour relations, and

- Personnel research.

In their explanations, Graham and Noe said that an organization should

determine in advance, how many workers and what kinds of skills are needed

to accomplish the firms‟ objectives. This analysis of future personnel

requirements is what they referred to as personnel planning. Recruitment they

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said, involves encouraging individuals with the needed skills to make

applications for employment with the firm. To them, selection is the process

of identifying those recruited individual who will best be able to assist the

firm in achieving organization goals. These tasks-personnel planning,

recruitment and selection-must be careful co-ordinated if a firm is to satisfy

work force requirement.

On education, training and development, they explained that “that are

activities which are designed to improve human performance on the job that

the employee is presently doing or being hired to do. Education is human

resource development activities which are designed to improve the overall

competence of the employees in specified direction and beyond job now held.

On the other hand, training is required by workers who do not know how to

do their work to meet standards of performance. Training is needed because

people, jobs and organizations are always changing. Carrier development is

concerned with preparing the employees so that they can move with the

organization as it develops, changes and grows.

Training and development (T&D) programmes are designed to assist

individual groups and the entire organization to become more effective.

Graham and Neo therefore suggested that “Training and development should

begin at the time individuals join the firm and continue throughout their

careers. Large T&D programme are referred to as organizational

development (OD). The purpose of OD is to assist people in performing more

productivity. A management technique that is closely associated with T&D is

performance appraisal. Through performance appraisal, employees are

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evaluated to determine how well they are performing their assigned tasks.

Any deficiencies identified can often be overcome through effective training

and development programmes.

Concerning compensation, Graham and Noe said that “workers must be

compensated or whatever work they do in the organization”. Among other

things, they believe that employees must be provided with adequate and

equitable rewards for their contributions to organizational goals.

Compensation includes all rewards individuals receive as a result of their

employment. As such, it is more than monetary income. The reward may be

one or a combination of employees salary or wages, fringe benefits and non-

monetary rewards.

Business firms in Nigeria are required by law to recognize unions and

bargain with them in good faith, and this relationship has become an accepted

way of life for many employers. Formal and informal communication and

consultation exist both through the representatives of employers and

employees at all levels through the enterprises. But, it has been discovered

that there persists considerable antagonism between the industrial relations

actors and other participants. Manufacturing companies have discovered that

there are often difficult problems to solve when dealing with the union. When

workers walk-of the job, the firms products cannot be manufactured. On the

other hand, agreeing to all the unions‟ demands may mean that the firm‟s

products cannot be competitively priced. It requires a skilled negotiator to

solve these problems.

33

Obikoya (1996), noted that “when a labour union is present, the

personnel activities is often referred to as industrial relations. The department

typically serves as a coordinator between union and management”. He added

that “many workers in Nigeria are not union members. However, non-union

organizations are often knowledgeable about the union goals and activities.

They benefit from all rewards accruing to employees in the same industry for

which the unionized employees have fought and successfully negotiated.

On the other hand, health refers to the employees freedom from illness

and is concerned with their general physical and mental well-being. Safety

involves protecting employees from injuries due to work-related accident.

This is important because employees who enjoy good health and work in a

safe environment are more likely to be efficient.

In their remarks on personnel research Graham and Noe agreed that

“the personnel managers‟ research laboratory is the work environment.

Research needs permeate every human resources management function.

Mondy and Fetris (1976) noted that research may be conducted to determine

the type of workers who will prove to be most successful in the firm.

It was Dan Cordtz (1972), who once said that research may be

increasingly important to all forms of organizations in the future.

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2.4 PERSONNEL COST MINIMIZATION THROUGH EFFECTIVE

SCHEDULING IN A DEVELOPMENT COUNTRY: THE NIGERIAN

EXPENDITURE.

S.A. Oke, U.V. Ukwuegbu, O.G. Akanbi & O. Oke contributed

immensely to this topic in their paper presentations. According to these men,

“the growing business competiveness worldwide places great challenges on

organizations to improve company:- customer relationship, quality, and

welfare schemes for staff. In Nigeria, the generator servicing industry, which

consists of firms that provide alternative sources of firms that provide

alternative sources of power through generator plants and supporting

services, is large and continuously strives to provide competitive services.

Generator servicing organization in contemporary times require effective and

timely allocation of staff and resources to demanding companies who may

sometimes require around the clock techniques assistance.

In that paper, they suggested that “globally, there is a growing business

competitiveness. This phenomenon has placed great challenges on

organizations for improving company-customer relationship, sustainability,

staff welfare schemes, quality flexibility, variety, responsiveness to

customers, and reducing costs. Among other things, they quoted Hold Swort

(2003) “as saying indeed, many businessmen have responded to these issues

by introducing management philosophies that are impacting the way industry

will meet these challenges and the needs of future customers” they also

referred to Holleran, Bredahi and Zaibet (1999) as having noted that the

competitiveness in companies depends upon their ability to adopt production

35

processes, which meet quality requirements. Also proper scheduling of staff

could aid in meeting these challenges through personnel cost minimization,

particularly in developing counties and in the advanced Human resource

management countries that are experiencing different systems:.

This paper having identified that the “further development of business,

needs new and greater requirements in structure and quality of working

staff”, calls for researcher into personnel optimization. It also added that

“Nigeria, personnel cost monitoring is extremely important, particularly in

situations where the dwindling organizational fortune of organizations has

become a challenge to organizational survival. With the enormous power

outage experienced in Nigeria, the generator servicing business is profitable,

and attracts sizeable investments from business. However, rising wages and

strong competition in the generator industry has motivated investors to

closely monitor company activities and ensure that personnel cost is

minimized. For example, during budget implementation, many managers

readily remove training cost, which is believed to brewing about a non-

immediate benefit to the organization. Thus, managers seek to optimally

allocate the human and non-human resources in organizations so as to

minimize idleness through proper scheduling.

2.5 GOALS/IMPORTANT OF HUMAN OF RESOURCES

MANAGEMENT

The three general goals or purposes traditionally associated with human

resources management, according to Ivan Cevich (1972) are:

36

- Attracting applicants;

- Retaining desirable employees and

- Motivating employees

Increasingly, another goal is being added: retraining employees.

The increased strategic importance of human resources management

means that human resources specialists must show that they contribute to the

goals and missions of the firm. The actions, language, and performance of the

human resource management function must be measured, precisely

communicated, and evaluated. The new strategic positioning of human

resource management means that accountability must be taken seriously.

The era of accountability for human resource management has resulted

from concerns about productivity, from widespread downsizing and

redesigning of organizations, from the need to effective manage and

increasingly diverse workforce, and from the need to effectively use all the

resources of an organization to complete in an increasingly complex and

competitive world.

The human resource management function is much more integrated and

strategically involved. The importance of recruiting, selection, developing,

rewarding, compensating, and motivating the workforce is recognized by

managers in every unit and functional area of an institution. Human resources

management and every other function must work together to achieve the level

of organizational effectiveness required to compete locally and

internationally.

37

Some of the importance may include the following:

1. Helping the organization reach its goals.

2. Employing the skills and abilities of the workforce efficiently.

3. Providing the organization with well-trained and well-motivated

employees.

4. Increasing to the fullest the employee‟s job satisfaction and self-

actualization.

5. Developing and maintaining a quality of work life that makes

employment min the organization desirable.

6. Communicating human resource management policies to all

employees.

7. Helping to maintain ethical policies and socially responsible

behavviour.

8. Managing change to the mutual advantage of individuals, groups, the

enterprise and the public.

Ivancevich (*1998*) added the followings as the importance of human

resource management to an organization:

- Productivity

- Legal compliance;

- Gaining competitive advantage and

- Workforce flexibility

The increased attention paid to how a firm manages its human resources is

attributed to the recognition that effectively managing human resources has a

38

positive impact in the firm‟s overall direction and, ultimately, its bottom-line.

The term bottomline says Ivan Cevich (op cit) refers to the organization‟s

survival, growth, profitability, competitiveness, and flexibility in adapting to

changing conditions. Positively affecting the bottomline is a key way in

which human resource management departments can gain recognition and

respect in organizations. In general, human resource management

departments influence the bottomline through improving productivity,

improving quality of work life, increasing the firm‟s legal compliance,

gaining competitive advantage, and assuring workforce flexibility the more

specific goals of managing human resources.

2.6 THE ROLES OF HUMAN RESOURCES DEPARTMENT IN AN

ORGANIZATION:

Human resources departments in effective firms in highly competitive

environment today play many roles in an organization. The more roles they

play, the more likely they will be effective in improving the organization‟s

productivity, enhancing the quality of work life in the organization,

complying with all the necessary laws and regulations related to managing

human resources effectively, gaining competitive advantage, and enhancing

workforce flexibility.

Heinemann et al (1983), wrote that “Human resources management is

aimed at influencing the effectiveness of employees in an organization.

Human resource department activities seek to match the ability and

motivation of employees with the requirements and rewards of the jobs”. The

human resources department role have been identified by Heinemann as:

39

1. The policy formulator role: This has to do with providing information

and advice in respect of policies.

2. The provider and delegator role:- This is concerned with the human

resource department providing effective and efficient service to line

managers.

3. The auditor role- They see this role in terms of the effective

implementation of policies- human resource should ensure that policies

are implemented fairly and consistently; and

4. The innovation role- This role has to do with the effective utilization

of up-to-date and current techniques in finding solutions to personnel

problems-these techniques should be related to the problems facing a

company at any particular point in time.

Chruden and Sherman (1980), see the role of the human resource practice

as giving assistance to supervisors and managers in carrying out their

personnel responsibilities in accordance with established policies and

procedures; they see him as coordinating human resources functions to make

certain they are formed consistently.

French (1974), on the other hand, views human resources management as

not only consisting of this, but also as a “major system of all organizations

and as the recruitment, selection, development, utilization of and

accommodation of human resources by organization”.

In his own contribution towards the role of human resources management,

Herzberg (1968) identified three general philosophies of the function as

propounded by many researchers. The first is centered around organizational

40

theory, the second on industrial engineering and the third on Behavioural

science. Herzberg saw the three as a triangle. The industrial engineers believe

that man is “mechanically-oriented and economically motivated”. In this

perspective, the human resource manger‟s function is to restructure the job

and design the remuneration package in such a way as to make the “human

machine” put in his best, that is increase efficiency.

The behavioral scientist, on the other hand, is mainly interested in human

actions both as an individual and as a member of a group in the organization.

This school stresses the importance of the role of groups (groups dynamics)

and the organization as principally that of human relations experts. They

believe that with the proper execution of this function, the organization will

not only be a place to work but will also be more efficient and effective.

Among this later group, we can identify Zelst (1952), Scashore (1954),

Dunnettee et al (1963). They all talked about the importance of cohesiveness

and group pressure in productivity. Further, Fleischmann and Harrors (1962)

found that there are “significant relationship between the leader behaviour of

foreign and the labour grievance and employee turnover in their work

places/groups.

In to the view of Ivan Cevich (1972), the more roles the human resources

department plays, the more likely they will be effective in improving the

organization‟s productivity, enhancing the quality of work life in an

organization…therefore, he opined that the followings are core roles of the

human resources department:

41

1. Linking Human relation to the business role:

Traditionally, many human resource department had a relatively limited

involvement in the total organization‟s affairs and goals. Consequently,

they were concerned with the short-term operational and managerial,

perhaps day-to-day human resource needs. With the growing

importance of human resource management to the success of firms,

human resource managers and their departments are getting more

involved in the organization. They are getting to know the needs of the

business-where it is going, where it should be going and are helping it

to get there. As a consequence, they and their departments are playing

many more roles: linking human resource to the business role is one of

the newest and more important of these roles. There is, however,

increased involvement in the longer-term strategic directions of the

organization. They are also really operating at three organizational

levels: strategic, managerial and operational levels. Kathryn Connors,

Vice president of human resource at Laz Claiborne, confirmed this

view: “Human resources are part of the strategic planning process. Its

part of policy development, line extension planning and the merger and

acquisition processes. Little is done in the company that does not

involve us in the planning, policy or finalization of any deal”. This

process of linking human resource to the broader longer-term and

strategic needs of firms is the essence of the newer human resource

activity called- strategic human resource management.

42

2. Enabler role:

In reality, human resource programmes succeed because line managers

make them succeed. The human resource department‟s bread and butter

job therefore, is to enable managers to make things happen. Thus, in the

more traditional human resource activities such as selecting,

interviewing, training, evaluating, reviewing, counseling, promoting

and firing, the human resource manager is basically providing a service

to line managers. To fulfill these responsibilities, the human resource

department most be accessible or it will lose touch with the line

managers‟ needs. The human resource staff should be as close as

possible to the people. A trend in this role of being accessible and of

providing services and products to others (customers) is called

customerisation.

3. Monitoring role:

Although the human resource department may delegate much of the

implementation of human resource activities to line managers, it is still

responsible for seeing that activities are implemented fairly and

consistently. This is especially true today because of fair employment

legislation. In organizations with several locations and several divisions

or units, tension often exists between the need to decentralize and the

need for centralizing the experts necessary to comply with complex

organizations. A major trend in this role of monitoring and coordinating

development is the use of computer technology and human resources

information system (HRIS).

43

4. Innovator Role:

Important and ever-expanding roles for the human resource department

include providing up-to-date application of current techniques and

developing and exploring innovative approaches to human problems

and concerns. Benchmarking certainly helps in this innovator role.

Today, organizations are asking their human resource departments for

innovative approaches and solutions on how to improve productivity

and the quality of work life while complying with the law in an

environment of high uncertainty, energy conservation, and intense

international competition. The human resource department can

demonstrate its contribution to the organization in many ways. These

contributions can be grouped into two categories-doing the right thing

and doing things right.

(i) Doing things right:-

This means that the human resource department does the right things

as efficiently as possible. Of course, the organization wants to hire

the best people, but they want to do it at the least cost per hire

possible. The human resource department wants to facilitate the

work of the line managers, but they want to do it in a way that

maximizes the benefit and minimizes the cost.

(ii) Doing the right thing:

This means that the human resource department does things that

are needed by the organization to be successful. In essence,

assessors ask if the department is helping the organization be more

44

successful in areas such as competitiveness, profitability,

adaptability and strategy implementation, etc.

5. Adapter Role:

It is increasingly necessary that organizations adapt to new technologies,

structures, processes, culture, and procedures to meet the demands of stiffer

competition. Organizations look to the human resource department for the

competition. Organizations look to the human resource department for the

skills to facilitate organizational change and to maintain organizational

flexibility and adaptability. One consequence of this adapter role is the need

to be more future-oriented

A trend in this role is for the human resource department to become a role

model of change and adaptability. Conclusively speaking, therefore, for the

human resources department to perform all these roles effectively, it needs to

have a leader who is knowledgeable in the human resource activities.

However, how effective the human resource department is in playing these

roles depends upon the following:

How effectively the roles for the human resource leader are played;

How the human resource department is organized; and

How well the department is staffed.

2.7 OVERVIEW AND DEFINITIONS OF HUMAN RESOURCES

MANAGEMENT

Of all the factors that constitute the internal environment of enterprises,

human beings are the most difficult to manage. Unlike materials, money and

45

time, human beings have the faculties for reasoning and the ability to respond

to various types of stimuli which they may consider intolerable.

Human resource management refers to the concepts, theories, policies,

programmes and other activities that are concerned with the acquisition and

utilization of men towards the achievement of organizational goals. It is also

viewed as the strategic and coherent way of managing the organization‟s

most valued assets, the people working there, who individually and

collectively contribute to the achievement of the objectives of the

organization.

However, it has also been said to involve all management decisions and

practices that directly affect or influence the people working in or for an

organization. It takes place in all organizations irrespective of the size, age or

purpose.

Human resources management is a practical management. It aims to

manage human resources, as it must in companies with a maximum of

effectiveness and a minimum of administrative red-tapism. It desires to

obtain a maximum of work (productivity) and to achieve a minimum of cost

per unit in order to reach the greatest number of jobs. Human resources

management is not content with principles of first thoughts; it tries to achieve

the greatest satisfaction of human (employee) needs and steady progress for

all improved procedures of planning, organizing, operating, supervision and

controls, all based on facts and careful thinking. It aims to use techniques of

work, which represent the best knowledge of our times and combine men,

facilities and methods for best results in all activities.

46

Cuming (1975), stated that human resources management is concerned

with retraining the best possible staff for an organization and having got

them, looking after them, so that they will want to stay and give off their best

to their jobs.

Further, Ubeku (1975) sees human resources management as a control

function exercised by all managers in an organization and/or by a particular

department often designated the personnel management. Specifically, human

resources management addresses itself to obtaining, retraining and motivating

people (employees) in the workplace, making for an accommodation,

organizational climate, fitting appropriate individuals, determining criteria for

evaluation performance, planning and forecasting manpower needs of the

organization, development appropriate policies on all personnel functions,

making appropriate remunerations for all categories of jobs in the

organization, making for the health safety and moral guidance of employees

through training and development policies and programmes in order to make

for better qualified employees, opening up avenues of communication

between management and employees, and so on. It should be noted that the

above represent only a few of the functions carried out by the human

resources management in any organization. This management also plays

advisory, service and functional guidance roles to any organization.

Thus, one can say that as a provider of services and, to extent, functional

guidance, the human resource specialist is an administrator. In his advisory

and functional guidance, he is a “problem-solver:. Legg (1978), Lupton

(1974) and some others see this later role as his main role. Furthermore, in

47

book titled-“human resources management”, Herbert G. Heinemann III et al

talked about “support activities” and “functional activities”. The former

refers to these activities that indirectly influence the human resource

functions in an organization such as personnel planning, while the later refers

to direct activities such as external staffing. This brings us to the issue of the

scope or the main area of operations of human resources management. They

are as follows:

- manpower planning;

- recruitment;

- selection and placement;

- compensation administration

- training and development;

- compliance with government legislations;

- general employment services;

Application of modern human resources techniques and industrial relations.

2.8 OTHER VIEWS ABOUT HUMAN RESOURCE MANAGEMENT

It is evident from reviewing the literature that the meaning and

theoretical significance of human resources management is contested. Human

resources management emphasized the calculative quantitative and strategic

management aspects of managing aspects of managing the work force in a

rational way. Human resources management integrates human resource into

strategic management, it seeks behavioural commitment to organizational

goals, with a focus on the individual and the emphasis is on a full and

48

positive utilization of human resources. Management can be viewed as an

approach to managing the work force (Bratton, (1999).

Ugbaja (2002) contributed saying that human resources management

involves all management decisions and practices that directly affect or

influence people who work in the organization. Such decisions include

deciding to hire and fire, to train and develop as well as to compensate,

motivate and attract more employees. He further states that human resources

management entails management relying less on hierarchy instruction and

command but becoming more participative and open. Its objective is to

promote co-operative relations between management and employees. Thus,

human resources management requires a package of measures including to

employee involvement, relating pay to performance, care with selection.

Training and fair treatment of employee.

Robert, (1994), defined human resources management as that part of

the process of management that is concerned with the maintenance of human

relationships and ensuring the physical well being of employees so that they

give the maximum contribution to efficient working. It is obviously closely

related to the management process as a whole and each functional manager

and supervisor must apply the principles effectively. It is essential that every

manager and supervisor be aware of the principles of human resources

management and a close link with the human resources department should be

maintained. Human resource manager have to advise the managing director

on the formulation of policy and see that procedure to carry it out are

effected. The problem of overall organization and manpower planning, then

49

the operations necessary to implement the plan, that is, recruitment and

selection, training and development, wage and salary administration all these

are to be considered. Other aspects of human resources management include

industrial relations and the law of employment, welfare and safety, and other

employee services.

Human resources management is a modern term for what has

traditionally been referred to as personnel management though much wider in

scope. The human resources model uses certain policies for the practice of

management. They are:

The manager‟s basic task is to make use of the untapped human resources.

He must create an environment in which all members may contribute to

the limits of their ability.

He must encourage full participation of important matters, continually

broadening subordinated self direction and control. The human

resources manager is an extension of the traditional type manager.

Though the modern human resources management has a lot of

improvement over the olden human relations (Ogbo & Adibe, 2006)

A move to combine human resource management and personnel

management into one has been made. This follows the views by some authors

that human resources management is somewhat different from the traditional

personnel management on the grounds that personnel management appears to

be more clearly oriented and much narrow than human resource management.

Personnel management is work force centered. It undertakes to recruit, select,

train and place employees on jobs, arranges for them to be paid, explains to

50

employees the expectations of management and justifies the actions of

management on issues. Where such management actions are likely to produce

unwelcome employee response, it seeks to modify and make them

acceptable.

The analysis of the distinction between human resources management and

personnel management is provided by Eze, (2003) who states that there is

very little that difference in fact between the two. the implication of the

foregoing is that human resources management in Nigeria calls for skills in

the management of change. The human resource manager is required to be a

specialist with adequate training, knowledge and experience so as to be able

to provide top management, functional and line managers in the work

organization with good practice guide to human resources in the short run as

well as in the long run ands to maintain a climate in which changes in the

advantage of the organization, can be achieved. The personnel administrator

or yester-years operating basically a reactive and negative role of dealing ad

hoc with personnel problems and keeping records has given way to the

present day human resources manager concerned with the whole field of

personnel and industrial relations.

Legge, (1999) in his view added that there is very little difference between

the two, but that there are some differences that are important. First, the

human resources management concentrates more on what is done to

managers rather than on what is done by managers to other employees.

Secondly, that there is a more proactive role for the managers. Thirdly, there

is top management responsibility for managing culture. But as Nwatu (2000)

51

observes, human resources management assumes a different position and

tackles organizational problems from another direction. It is concerned

mainly with management needs for human resources that will be provided

and deployed, that places emphasis on demand rather than supply. It takes on

such activities as planning, monitoring and control rather than mediation.

Human resources management is resourced centered.

Finally, Donnel (1991) defines human resources management as the

process of accomplishing organizational objectives by acquiring, retaining,

terminating, developing and properly using the human resource in an

organization. The acquisition involves recruiting, screening, selecting and

placing personnel on the jobs.

52

REFERENCES Barney, J.B. (1995), looking inside for Competitive Academy of Management

Executive. Dieke, P.U.C. (2001), Human resources In Tourism development. African

Perspective. Laurie, J.B. (2004), Management and organizational behavior (seventh edition):

Prentice hall. Obikoya, J.O. (1996), Essentials of Personnel Management, Ijebu-Ode: Pius Debo

(Nig) Press. Oke, S.A., Ukuegbu, U.V., Akanbi, O.G. and Oke, O.O., “Personnel cost

minimization through effective scheduling in a Developing country. The Nigerian experience” Downloaded from GIGO on the 27/05/2011.

Onah, F.O. (2003), Human Resources Management (Fulladu Publishing Company)

Rosenblath, Bonington, and Needla (1977), “What is Personnel Management in Modern Business.” New Jersey: Houghton Mifflin.

Peter, M.O. (1975), Handbook of business organization. Ibadan: Gbabeks

Associate Nig Publishers. Rowland, Kendrith and Feris, Gerald R. (1982), “Personnel Management in

modern Business,” New jersey Houghton Mifflin Susan M. Heathfield, “What is Human Resource Management?”(Downloaded

from About.com Guide) on the 27th of May, 2011.

Ubeku, A.K. (1975), Personnel Management in Nigeria. Benin-City: Ethiope Publishing Corporation.

53

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

It is important to choose the right instruments or tools for analysis in a

study of this nature. The raw data itself do not convey much meaning until

the right analysis using correct analytical tools and interpretation have been

given to it. Based on this perception, this chapter is devoted to defining the

source of data, research design, method of data collection, and method of data

analysis.

Data is either primary or secondary and it is this difference that makes

it imperative to apply different methods for analysis. The quality of the

results obtained depend very much on the type and quality of data.

For proper analysis, it is important to minimize the errors associated with

gathering of data and the choice of relevant tools. For the analysis to be

understood, there must be correct interpretation of the result as well.

Research methodology is therefore, a very important phase in the work

of every researcher, and is aimed at giving foundation and true meaning to

analysis and interpretation.

3.2 RESEARCH DESIGN

This research has been designed along the line of cross-sectional survey

design with a descriptive approach, concerned with the observation of

independent and non-manipulative variables all at once. This study takes a

54

look at variables that will enable us assess the human resources management

in this private sector called fidelity bank plc. To do this, performance would

be measured through profitability against the human resources of the firm in

the period under study (i.e. 2005-2009). Other variables are cost concept and

efficiency, and their relationship to human resources performance

(profitability) in this private sector organization.

The design is an “ex-post facto” research design as it makes use of data

that have already taken place.

3.3 SOURCE OF DATA

The source of data is along the line of research design. The data in use

have been gathered from the annual report and accounts of fidelity bank plc.

They are secondary data.

3.4 METHOD OF DATA COLLECTION

The data in use have been collected through administrative process, i.e.

extraction from existing records of the organization. This is related to the

nature of data in use.

3.5 METHOD OF DATA ANALYSIS

The method of data analysis in this study is multiple regression. It is a

statistics that measures the effect of two or more independent variables on the

dependent variable.

55

The multiple regression model attempts to expose the relative and

combined importance of the independent variables to the dependent variable.

The model in a mathematical form is given as:

Y = a + b, x, + b2 X2 +………. bn Xn + e

Where Y is the dependent variable

A is the constant/intercept

b1, b2, bn are the partial regression

Coefficients

X1, X2, Xn are the independent variables

e is the error term or residual.

Since this study takes a look at profitability, cost of personnel and other

variable costs, this model is very suitable.

The basic assumptions are:

(i) Measurement error: There should be no measurement error in X and

Y variables.

(ii) Normality:- The X and Y variables must be normally distributed. In

case they are not normally distributed, you can find the log or the

square of these variables to bring it to normality.

(iii) Linearity:- That the regression of Y and X is linear. If the data is not

linear, we could either use a non-linear model to solve a problem or

56

we try to transform the data by taking the square root or log or

power series.

(iv) Randomness:- The X and Y variables must be collected randomly. If

the data is collected systematically there is no statistical method that

solve it.

(v) Homoscedacity:- That the spread about the mean or variance of Y,

should be equal for the two variables. If there is heteroscdacity i.e.

the variance of Y is not equal for the two variables, we take the log

of the data to normalize it.

(vi) Spatial or serial auto correlation:- That the observation of the

dependent variable Y is statistically independent. If this assumption

is violated, there are two consequences.

1. The estimator of the regression coefficient becomes grossly

inefficient (2) the variance estimate becomes downwardly biased,

leading to an inflated value of the F (ratio), R (residual) and B

(regression).

(vii) Multi-collinearity:

(viii) Same number of cases and variables i.e. the number of variables

must be less than number of cases.

3.5.1 TEST OF HYPOTHESES

The following hypotheses will be tested in this study.

57

Hypotheses (1)

H0: Profitability in business is not dependent on human resources and

admin cost of an organization.

H1: Profitability in business is dependent on human resources and admin

cost of an organization. The test statistics used is ANOVA i.e. analysis

of variance.

Hypotheses (2)

H0: Personnel cost is not directly attributable to level of productivity of an

organization.

H1: Personnel cost is directly attributable to level of productivity of an

organization. The test statistics used is ANOVA i.e. analysis of

variance.

Decision rule

Accept H0 if Fcal < Ftab, otherwise reject.

58

REFERENCE

Onwumere, J.U.J. (2009), Business and Economic Research methods. 2nd Edition. Enugu Vougasen Limited.

Oyesiku, O.K. and Omitigun, O. (1999), Statistic for social and management

Sciences. 2nd Edition Lagos: Higher Education Books, Publishers (HEBP).

59

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

This chapter is devoted to execution of all the tools of analysis with a view

to drawing relevant conclusion and necessary recommendations. In view of this,

the first part deals with presentation of data while the second part deals with

analysis. It is only when analysis has been done that it would convey meaning to

the user.

4.1. PRESENTATION OF DATA

Table 4.1: Administration Overheads, Remuneration and Profitability OF

Fidelity Bank Plc, 2005-2009

year Gross earnings

N‟000

Profit after tax

N‟000

Remuneration

N‟000

Administrative

Overheads N‟000

2005 6,158,659 1,236,790 719,929 159,210

2006 11,572,151 3,162,347 1,840,785 407,083

2007 23,629,679 4,160,007 2,421,518 535,510

2008 40,474,491 12,986,570 7,559,415 1,671,736

2009 70,596,902 2,296,799 14,017,986 9,915,168

Source: Annual Report and Account of Fidelity Bank Plc Nigeria, 2009

60

4.2. ANALYSIS OF DATA

The multiple regression analysis mode was specified earlier as the tool for analysis,

in this study. In line with this, the equation is expressed as

Y = a + b1 X1 + b2 X2 ……………………………………. (1)

Where y= dependent variable (profit after tax)

X1 is remuneration of personnel

X2 is the cost of administration

b1 is the rate of change in X1, and

b2 is the rate of change in X2

Multiply thro equ.1 by , we obtain

Y = na + b1 X1 + b2 X2…………………………… (2)

Multiply thro equ.1 by X1. We have obtain:

X1y = a X1 + b1 X12 + + b2 X1 X2

2……………….. (3)

Multiply thro equ.1 by X2, we have:

X2Y = a X2 + b1, X1X2 + b2 X22…………… (4)

61

Table 4.2: multiple regression analysis table

Y X1 X12 X2 X2

2 X1X2 X1Y X2Y

1.2 0.7 0.49 0.2 0.04 0.14 0.84 0.24

3.2 1.8 3.24 0.4 0.16 0.72 5.76 1.28

4.2 2.4 5.76 0.5 0.25 1.20 10.0 2.10

12.9 7.6 57.76 1.7 2.89 12.92 98.04 21.93

2.3 14.0 196.0 9.9 98.01 138.60 32.20 22.77

23.8 26.5 263.25 12.7 101.35 153.58 146.84 48.32

Substituting into the equations above, we have:

5a + 26.5b1 + 12.7b2 + = 23.8

26.5a + 263.25b1 + 153.58b2 = 146.84

12.7a + 153.58b1 + 101.35b2 = 48.32

Using matrix inversion method:

5 26.5 12.7 a11 a12 a13

26.5 263.23 153.58 is in the form a21 a22 a22

12.7 153.58 101.35 a31 a32 a33

Matrix of co-factor

a11 (+1) 263.25 153.58

153.58 101.35 = (263.25 x 101.35) – (153.58)2 = 3093.57

62

a12 (-1) 26.5 153.58

12.7 101.35 = (26.5 x 101.35) – (12.7 x 153.58) = - 735.31

a13(+1) 26.5 263.25

12.7 153.58 = (26.5 x 153.58) – (12.7 x 263.25) = 726.60

a21(-1) 26.5 12.7

153.58 101.35 = (26.5 x 101.35) – (153.58 x 12.7) = -735.31

a22(+1) 5 12.7

12.7 101.35 = (5 x 101.35) – (12.7)2 = 345.46

a23(-1) 5 26.5

12.7 153.58 = (5 x 153.58) – (26.7 x 26.5) = -431.35

a31(+1) 26.5 12.7

263.25 153.58 = (26.5 x 153.58) – (263.25 x 12.7) = 726.60

63

a32 (-1) 5 12.7

26.5 153.58 = (5 x 153.58) – (26.5 x 12.7) = -431.35

a33(+1) 5 26.5

26.5 263.25 = (5 x 263.25) (26.5)2 = 614

Re-arranging, we have

3093.57 739.31 726.60

-735.31 345.46 -431.35

726.60 -431.35 614

A-1 = A

1

/A/

/A / = 5[(263.25 x 101.35) – (153.58)2] – 26.5 [(26.5 x 101.35) – (26.5 x 153.58)]

+ 12.7 [(26.5 x 155.58) – (12.7 x 201.02)]

= 15, 467.86 – 19, 485.72 + 19, 264.88

= 15, 247.02

64

A-1 = 3,093.56 -735.31 726.60

-735.31 345.46 -431-35

726.60 -431.35 614

15, 247.02

= 0.20 -0.05 0.05

-0.05 0.02 -0.03

0.05 -0.03 0.04

A-1 X a = 0.20 -0.05 0.05 23.8

b1 -0.05 0.02 -0.03 146.84

b2 0.05 -0.03 0.04 48.32

a = (0.20 x 23.8) + (-0.05 x 146.84) + (0.05 x 48.32) = - 0.17

b1= (-0.05 x 23.8) + (0.02 x 146.84) + (-0.03 x 48.32) = 0.30

b2 = (0.05 x 23.8) + (-0.03 x 146.84) + (0.04 x 48.32) = -1. 28

Therefore Y= -0.17 + 0.30 X1 -1.28X2

65

Interpretation:

The analysis of the values revealed that there is a positive slope or rate of

change in the cost of human resources. This is an indication that cost of human

resources varies, though insignificantly, as profitability varies.

Alternatively, the rate of change of administrative overheads is negative,

showing that there is a significant negative, partial variation between profitability

and administrative cost i.e. profitability does not depends on administrative cost.

There is affixed negative value of -0.17, which affects the estimation of

profits in the multiple regression equation also. This means that profits would

reduce by that value each year.

However, it should be noted that insignificant variations in all these values

from other methods, may be as a result of approximations that this method has

been subjected to.

4.2.1. Test of hypothesis (1)

Hypothesis:

Ho: Profitability in business is not dependent on human resources and

administrative cost of the organization

H1: profitability in business is dependent on human resources and administrative

cost of the organization.

Test statistics: ANOVA expressed as

mean sum of square (between)

F-ratio = Mean sum of square (within)

66

MSS(B)

MSS (W)

Table 4.3: Analysis of variables

X1 X12 X2 X2

2 X3 X

23

1.2 1.44 0.7 0.49 0.2 0.04

3.2 10.24 1.8 3.24 0.4 0.16

4.2 17.64 2.4 5.76 0.5 1.25

12.9 166.41 7.6 57.76 1.7 2.89

2.3 5.29 14.0 196.0 9.9 98.01

23.8 201.02 26.5 263.25 12.7 101.35

Note: X1 = Profit After Tax

X2 = Remuneration

X3 = Administrative overhead

n1 = 5, n2 = 5, n3 = 5

X1 = 4.76, X2 = 5.3, X3 = 2.54

Overall observation, N = 15

Therefore, X = ∑X1 + ∑X2 + ∑X3

N

F =

67

= 23.8 + 26.5 + 12.7

15

= 4.2

∑ ∑ Xij2 = 201.02 + 263.25 + 101.35 = 565.62

i j

Total sum of square (TSS) is

∑∑ (X - X)2 = ∑∑ X ij

2 – NX

2

= 565.62 – 15 (4.2)2

= 301.02

Between sum of square (BSS) is:

∑nj (Xj - X)2 = ∑nj Xj

2 – NX

2

= [5(4.76)2 + 5(5.3)

2 + 5(2.54)

2] – 15 (4.2)

2

= 285.99 – 264.60

= 21.39

Within sum of square (WSS) is:

WSS = TSS – BSS

= 301.02 – 21-39

=279.63

Degree of freedom for BSS is:

68

df = V1 = K-1 = 3-1 -2

Degree of freedom for WSS is:

df = V2 = N-k = 15-3 = 12

Table 4.4 ABOYA of profitability, personnel and overhead costs

Source Sum of Square Degree of

Freedom (df)

Mean Sum of

Square

F – ratio

Between 21.39 2 10.7 0.46

Within 279.63 12 23.30

Total 301.02 14

Fcal = 0.46

F2,12 (0.05) = 3.89 (from F-table)

Decision: since Fcal < Ftab, we accept H0 and conclude that profitability in business

is not dependent on human resources and administrative cost of the organization.

Test of hypothesis (2)

Hypothesis

H0 : Human resources Cost is not directly attributable to level of productivity

of an organization.

69

H1 : Human resources cost is directly attributable to level of productivity of an

organization.

Test Statistic: ANOVA expressed as

F-ratio = MSS (B)

MSS (N)

Table 4.5: ANOVA of Gross Earnings, profitability. Remunerations, and

Administrative Cost

X1 X12 X2 X2

2 X3 X3

2 X4 X4

2

6.1 37.21 1.2 1.44 0.7 o.49 0.2 0.04

11.5 132.25 3.2 10.24 1.8 3.24 0.4 0.16

23.6 556.96 4.2 17.64 2.4 5.76 0.5 0.25

40.4 108.16 12.9 166.41 7.6 57.76 1.7 2.89

70.6 498.36 2.3 5.29 14.0 196.0 9.9 98.01

152.20 1, 332.94 23.8 201.02 26.5 263.25 12.7 101.84

n1 = 5, n2 = 5, n3 = 5, n4 = 5

X1 = 30.4, X2 = 4.76, X3 = 5.3, X4 = 20.27

N = 20

X = ∑X1 + ∑X2 + ∑X3 + ∑X4

N

70

= 152.20 + 23.8 + 26.5 + 12.7

20

= 215.20

20

= 10.76

∑∑X2

ij = 1, 332.94 + 201.02 + 263.35 + 101.35

= 1, 898.56

Total sum of squares (TSS) is:

∑∑ (X-X)2 =∑∑ Xij

2 – NX

2

= 1,898.56 – 20 (10.76)2

= - 4 16.99

Between sum of square (BSS)

∑nj (Xj-X)2 = ∑njX

2 – NX

2

= [5(30.4)2 + 5(4.76)

2 + 5 (5.3)

2 + 5 (20-27)

2]

= - 20 (10.76)2

= 6, 928.90 – 2,315.55

= 4,613.35

Therefore within sum of square is:

WSS = TSS-BSS = -416.99 – 4,613.35 = -5030.34

71

Degree of freedom for BSS is:

df = V1 = K-1 = 4-1 = 3

Degree of freedom for WSS is:

df = V2 = N-K = 20-4 = 16

Table 4.6: ANOVA of Gross Earnings, Profitability, Remuneration and

Administrative Cost (summary)

Source Sum of Square Degree of

Freedom (df)

Mean Sum of

Square

F – ratio

Between 4613.35 3 1557.78 -4.89

Within -5030.34 16 314.40

Total -416.99 19

/F/ = 4.89

F3, 19(0.05) = 3.13 (from table)

Decision: since Fcal > Ftab, we reject H0 and conclude that personnel cost is directly

attributable to level of productivity of an organization.

72

REFERENCES Fidelity Bank Plc (2009), Annual Report and Accounts (2009) Laurie, J. Mullins (2004). Management and Organization Behavior

(Seventh edition): Prentice Hall. Legge, F (1999), Personnel Management London: Cassel Ltd. Nwatu, R. (2000). Human capital Investment. Lagos: Cassel ltd Ogbu, A and Adibe. T. (2006), The concept of industrial Management in Nigeria

First Edition. Enugu: De-verge Agencies Ltd. Onah. F.O (2003), Human Resources Management (Falladu Publishing Company) Robert, C.A. (1994), Modern Business Administration (sixth edition)

London: Pitman publishing Ugbuja, C.O. (2002), Human Resources Management (Ilupeju Press, Lagos)

73

CHAPTER FIVE

SUMMARY, RECOMMENDATION AND CONCLUSION

5.1 SUMMARY

This study has been able to explore the subject matter issue namely,

assessment of human resources management. The stated objectives were

to assess human resources management as it affects performance, to

examine the challenges faced by human resources managers in the private

sector business, to proffer solutions to these challenges, and to establish

the relationship between human resources, cost profitability and the

performance of this private business known as fidelity bank plc.

The performance of management has been measured in terms of

profitability, cost of human resources, cost of administrative overhead and

the profit after tax indices. Management is only considered or seen as

performing well if it is efficient and effective in cutting cost and taxes, and

raising the level of profitability of the organization.

In line with the objectives of this study, hypotheses were formulated to

determine whether profitability depends on human resources and

administrative cost of the organization or not, and whether human

resources cost is directly attributable to level of productivity of an

organization or not.

It is important to reflect on the benefits derivable from this study,

namely, that it would help managers understand some of the challenges

faced by private sector, the relationship between cost, profitability and

performance of management; keep to carry out a good assessment of

productivity; provide a foundation to future researchers in a similar

74

endeavour; provide answers to question as to why human resources is

considered as the important factor in the production process, focus on

private sector as a contributor to GDP in Nigeria; and clarification of

empirical evidence as to the dependency of profitability on level of human

resources existing in an organization.

This study had some limitations in form of lack of adequate and

dependable data, difficulty in measuring performance due to different

methods, shortcoming of secondary data, and time and financial

constraints.

The views of several writes and scholars on the subject matter were

presented and they were quite convincing, to the extent that the definitions

and explanations would not need to be contested. There were up-to-date

examples on the concept of human resources and its components.

The multiple regression analysis was employed in this study while

ANOVA i.e. analysis of variance was used for tests of hypotheses.

The analysis revealed that cost of human resources varies positively

with profitability i.e. human resources cost increase with increasing level

of profitability, whereas, the change in administrative overheads is

negative. Therefore, profitability or performance depends on the level of

human resources while administration costs does not profit after tax was

equal. Included.

The hypotheses also confirmed that the results of the analysis were

true.

75

5.2 RECOMMENDATIONS

The following recommendations are made in line with the result of my

analysis, viz:

1) Fidelity Bank should consistently groom her human resources

department to maintain high level of performance. This is imperative

because of the high dependency of profitability on human resources.

The costlier is to remunerate, maintain and train the workforce, the

higher the quality and result expected of human resources.

2) Fidelity Bank should cut cost on administrative overhead as it does not

add value to management performance. It has a negative effect on

profitability and the level of efficiency and effectiveness of

management.

3) Management of fidelity Bank should employ the services of experts

that would help in cutting down taxation. Tax avoidance is legal and it

is a means of raising the profits of an organization.

4) Since human resource management does not exist in isolation, they

should synergize with other departments/units on matters that could

enhance overall performance of Fidelity Bank Plc.

5) Fidelity Bank Plc should equally pursue policies on performance best

practices in the banking industry obtainable as of now, in order to catch

up with current developments in this sector.

76

5.3 CONCLUSION

Human resources management is a veritable tool that drives

performance of any organization. It should be taken seriously.

The results of the analysis have shown that human resources

management performance brings about the much expected profitability of the

organization.

The results of this study have given rise to a number of

recommendations. It is expected that these recommendations would be

understood and taken seriously by the authourity concerned and taken

seriously by the authourity concerned in order to improve performance, and

by extension, this could form the basis for future researches in this sector.

77

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