assessment of human resources management in a … ngozi esther.pdf · 7 this study is titled...
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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
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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:…………………..
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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
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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.
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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
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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:
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- 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.
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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
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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:
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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
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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:
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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.
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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).
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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
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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
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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.
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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
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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
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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
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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
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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)
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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.
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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.
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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
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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.
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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
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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.
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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.
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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).
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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
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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)
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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
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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
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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
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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
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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)
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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 =
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= 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:
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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.
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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
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= 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
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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.
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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)
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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
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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.
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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.
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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.
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Legge, F, (1999:112), Personnel Management. London: Cassel Ltd Lloyd, L.B. & Leslie, W.R. (1991:6), Human Resources Management, Third Edition Lupton, J.T. (1958) “Industrial Relation System.” New York, Hull Obikoya, J.O. (1996),Essentials Of Personnel Management Ijebu-Ode: Pius Debo
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