Full Project – The effect of compensation on employees performance

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

It is often said that there is a direct correlation between compensation management and employee performance on the job. Compensation refers to the salary or wages and all other allowances and financial benefits payable to an employee either in cash or promotion in return for his or her services well done. This salary or wages and other allowances may include pay which an employee receives. The salary aspect of compensation is designed to encourage the employees for effect beyond normal performance expectation and benefits here are reward available to employee or group of employee as part of organizing membership (Agulanna and Madu 2003).

Personal/human resource managers are primarily interested on the impact that pay will have on individual employee performance and organization effectiveness. Employee compensation programmes are designed to attract quality job applicants to the organizations, motivate employees to perform to their full capabilities and allow the organization to return its best employees.

Compensation is the total reward received by an employee in exchange for services performed for an organization. It can include both direct pay (salary and wages) and indirect pay (benefits programs)

It is an agreement with the nation that better pay accord workers do better performance and be satisfied on the job at least to some reasonable extent that makes the researcher set on the research work.

Mathis and Jackson (1985) defined compensation management as all the rewards employees received as a result of their employment. It is not just salary but many include pay benefits incentives and non financial rewards.

1.1 PROFILE/HISTORICAL BACKGROUND OF UNITED BANK FOR AFRICA PLC (UBA)

United Bank for Africa Plc (UBA) is the product of the merger of Nigeria’s third (3rd) and fifth (5th) largest banks, namely the old UBA and the erstwhile Standard Trust Bank Plc limited (STB) respectively, and a subsequent acquisition of the erstwhile continental Trust Bank Limited (CTB).

The union emerged as the first successful corporate combination in the history of Nigerian banking.

UBA’s history dates back to 1948 when the British and French bank limited (“BFB”) commenced business in Nigeria

In 1990 following Nigeria’s independence from Britian, UBA emerged at a time of industry consolidation induced by regulation, the consolidated UBA was borne out of a desire to lead the domestic sector to a new area of global relevance by championing the creation of the Nigerian Consumer Finance market leading a private/public sector partnership at supporting the acceleration of Nigeria’s economic development, and growing the institution from a banking to a one-stop financial services institution while spreading its footprints across Africa to earn the reputation as the face of banking in the continent.

Today, United bank for Africa Plc is one of Africa leading financial institutions offering Universal Banking to more than 7 million customers across 750 branches in 19 African Countries. With presence in New York, London and Paris and assets in excess of $ 19 billion, UBA is your partner for banking services for Africans and African related business globally.

It give enough space for heading is generally recognized that job satisfaction performance of the employee is a factor that cannot be overlooked wherever the questions of employee commitment or performance arises though it may not lead to higher performance of the work force. It is necessary condition in developing a committed workforce high levels of job satisfaction do necessary guarantee high level of employee productivity. Conversely dissatisfied employee may on occasion, exhibit high levels of job performance.

It is probably safe to say that compensation specialist has tried thousands of different combinations of pay and employees benefits to motivate high levels of job performance in fact no two organization have exactly the same philosophy and methods for structuring their compensation packages in an attempt to induces extra effort from employers.

There is also a tendency that a satisfied worker would identify more with his job than a dissatisfied one. The scientific management school of Fredrick Taylor (1911) advocated the use of the incentive wage system as a means of stimulating workers to higher performance. In most organizations remuneration is used as motivating factors. The idea is that an employee who enjoys good compensation in terms of monetary or otherwise is likely to put in extra effort and therefore produce more monetary reward is assumed to lead to higher employee performance which in turn results to higher productivity.

It is an agreement with the nation that better pay accord workers do better performance and to be satisfied on the job at least to some reasonable extent that makes the researcher set on the research.

1.2 STATEMENT OF PROBLEM

The problem being addressed in this study is that lack of incentives decreases or hampers employee’s performance in an organization. The issues is that if employees are performing well in their duties, but lack incentives or if the organization did not take cognizance on their effort it will decrease their moral towards performance and so increase the rate of carefree attitude, absenteeism and so on and by so doing the organizations performance will be hampered (i.e the organization cannot achieve its set target).

1.3. OBJECTIVES OF STUDY

This research work is to find out the following

The extent to which employee performance is influenced by compensation.
To see if there is any relationship between performance, satisfaction and compensation.
To find out the effect of compensation on employee performance.

1.4 RESEARCH QUESTIONS

Is there any significance between compensation and performance of the employee in their duties?
Does organization use qualified and competent workforce due to poor compensation management?
Does compensation management have significant influence on the output of job.
Does monetary reward lead to higher productivity with job satisfaction and workers performance at the same time?

1.5 STATEMENT OF HYPOTHESIS

For the purpose of this research work, the hypothesis will be limited to test whether achieving corporate goal has relationship with workers compensation.

Ho: achieving corporate goal does not depend on how the employers satisfy its employee.

Ha: achieving corporate depends on how the employers satisfy its employee.

Ho: United bank for Africa plc (UBA) has not been meeting up with employee welfare since inception

Ha: United bank of Africa plc (UBA) has been meeting up with employee welfare since inception.

1.6 SIGNIFICANCE OF STUDY

This study will add more to knowledge. It is significant in the sense that it will provide solution and ways by which management staff could reinforce their workforce for better performance. It will be used as a management tool for staff encouragement. This it would be of immense help to the management of United bank for Africa Plc (UBA) in taking a productive stand on important issues to workers welfare that is (compensation) thereby helping to bring in mutual convergence of individual satisfaction. This work will also be of use to future researcher who may which to carry out further research on compensation.

1.7 SCOPE OF STUDY

United Bank for Africa Plc (UBA) is the most financial institutions in Nigeria with a workforce of million customers across 750 branches in 19 African countries. As a result of inaccessibility of the scattered branches, this study is Limited to staff of United bank for Africa Plc (UBA) that operates at the head office of the Bank in Lagos with a view that the response gathered will be used to generalized the view of other workforce. Financial and time constraints will prevent it, the researcher from acquiring more details or information from other branches.

1.8 LIMITATION OF THE STUDY

Despite the progress made in this study and its outstanding nature, the researcher encountered some problems in the course of this work which are as follows:

Financial constraint: Here, a lot of money was spent in the course of this work in the areas of transportation, phone calls, purchase of stationeries etc.
Cooperation: A t the course of this research work, the management and staff of these selected banks finds it difficult to cooperate with student in term of given out relevant information that are needed from them to complete the research work.
Time Constraint: This work required a lot of time but the combination of this research work and lectures reduced the time and also it is stressful.

1.9 DEFINITION OF TERMS

There words are defined, as they would be used in this study.

Compensation:- This refers to salary or wage and the all other rewards employees receives as a result of their employment “Mathis and Jackson (1985).
Performance:- It is the output of the work being undertaken by the employees which can be established, communicated by employees and used to determine pay.
Management:- This is re-realizing the goal and other objectives of an organization through employees. It has upper hand in arranging the environment and provides broad polices and guide lines, which people must operate.
Pay:- This is basic compensation or reward and incentives usually inform of a wage or salary.
Incentives:- There are reward designed to encourage and reimburse for effect beyond normal performance expectation.
Benefit:- These are rewards available to employee group of employee as park of organizational membership.

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Full Project – The effect of compensation on employees performance

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