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University of Nigeria Research Publications
OKPALA, Anthony Ugoh
Aut
hor
PG/MBA/97/19795
Title
The Impact of Fringe Benefits on The Performance of Workers in The Hotel and
Catering Industry A Study of Selected Hotels and Cathering Firms
in Enugu Urban
Facu
lty
Business Administration
Dep
artm
ent
Management
Dat
e
March, 1999
Sign
atur
e
THE IMPACT OF FRINGE BENEFTI3 ON THE PERFORMANCE OF
WORKERS IN THE HOTEL ANI) CATERING INJXJSTRY
(A CASE OF SELECTED HOTEL AND CATERING FIRMS IN ENUGU
OKPALA ANTHONY UGOH
PG/MBA/97/19795
DEPARTMENT OF MAN.AGEMENT
FACULTY OF BUSINESS ADMINISTRATION
UNn7ERSRY OF NIGERIA
ENUGU CAMPUS
TITLE
The Impact of Fringe Benefits on the Performance of
Workers in the Hotel and Catering Industry
(A Case of Selected Hotel and Catering Firms in Enugu Urban)
Okpala Anthony Ugoh PG/MBA/97/19795
Being a Research Work Submitted in Partial Fulfilment
of the Requirements for the Award of the Degree
of Masters of Business Administration
(MBA) in Management,
Department of Management
Faculty of Business Administration
University of Nigeria
Enugu Campus
Supervisor: Chief P.C. Uuamlta
March, 1999
Okpala, Authony Ugoh, A postgraduate student in the Department of Management
and with the Registration Number PGlMBAl97119795 has satisfactorily coinpleted
the requirements for course and research work for the degree of Master of Business
Administration in Management.
This project report is an embodiment of original work and.has not been subinitted
in part or in full for any other diploma or degree of this or any other University.
J.A. EZE HEAD OF DEPARTMENT
CHIEF P.C. UNAMKA SUPERVISOR
iii
DEDICATION
To Mummy and Daddy
Mr Emmanuel Okpala
&
Mrs Felicia Okpala
And
to my brothers, especially
Mr Godwin D. Okpala
&
Mr Kenneth E. Okpala (Agu)
both of GEWLNCO HOLDINGS WORLDWIDE
ACKNOWLEDGMENT
First and Foremost, I wish to humbly express my profound gratitude to the
most High and Most Gracious, the dispenser of all blessings for granting me the
courage and good health to push-on with this work despite all odds.
I greatly appreciate the invaluable contribution of my Supervisor Chief P.C
Unarnka, whose contribution guide and fundamental leads made this work a reality.
I remain indebted to the staff & Management of the selected Hotel and
Catering firms, especially those of Hotel Presidential, Royal Palace Hotel, Nike Lake
Resort Hotel e.t.c, whose enthusiasm at this work contributed in no small way in
making it a success.
I am equally indebted to the Staff of University of Nigeria Enugu Campus * Library, British Council Library, IMT Library, Enugu State and National Libraries
for guiding the identification of some of the materials needed for this work.
Finally, my sincere gratitude goes to my course mates, good friends and room
mates namely: Mickey Mokwugwo, Kalu Amah, Ndukwe, Felix Awa, Odilia
Anyaehie, Angela Onyiba, Charles Okoh, Hope Maduka e.t.c, who contributed in
one way or the other, in making this work a reality. To all and others who could not
be mentioned here for obvious reasons, I say thanks. This assistance not with
standing, the researcher accepts full responsibility for any error in this work.
Okpala Anthony Ugoh
v
ABSTRACT
This study examines the impact of fringe benefits on the performance of
workers in the Hotel and Catering industry, with a view to establisl~ing its
importance to the workers and to the industry. This is intended to assert whether
or ncit ,poor fringe benefit schemes could be an impediment to the development of the
sub-sector.
The study is organized in five chapters each of which deals with some specific
aspects of the study.
The first chapter provide a framework for the study. It embodies what niay
be regarded as the proposal for the study and therefore provided the necessary
background information which helped to determine the structure of the study.
The second chapter deals with the review of related literature. It provides the
theoretical foundation upon which the intricacies of the subject-matter were closely
knitted.
Chapter three deals with the research metl~odology which involve a systematic
description and analysis of the tools and methods utilized in the research study. It
also show the different statistical methods employed in the research analysis.
In the fourth chapter, the researcher "waded his feet' into the stream of
research analysis1'. The research data collected in the field through the research tools
were presented and analyzed. Also, the hypothesis that guided data collection were
verified. A brief summary of the entire work is presented in the last chapter,
together with conclusion and recommendations.
The findings of the study reveals that fringe benefit is of great inlportance to
the workers in the industry, and to the industry. And also, that poor fringe benefit
schemes could serve as an impediment to the development of the sub-sector because
of its importance. The study made recommendatioi~s that will help to remedy the
situation, to engender a smooth and faster development of the Hotel and Catering
industry in Nigeria.
vi
TABLE OF CON'IXNTS
Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certification 11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dedication iii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acknowledgment iv
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abstract. v
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
List of Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
CHAPTER ONE
XNTRODUCTION
1.1 Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 The Statement of Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 The Purpose of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 The Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Research Problem Oriented Hypothesis . . . . . . . . . . . . . . . . . . . . 6
. . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 The Significance of the Study 7
1.7 The Scope and Limitation of the Study . . . . . . . . . . . . . . . . . . . . 8
1.8 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C-R TWO
TBE: REVIEW OF RELATED Ll3XRATURE
2.1 The Nature and Scope of Fringe Benefits . . . . . . . . . . . . . . . . . . 10
2.2 Factors for Effective Fringe Benefits Plan . . . . . . . . . . . . . . . . . . 11
2.3 Developing and Administering the Benefit Program . . . . . . . . . . . . 15
2.4 Suggested Ways of Ensuring Appreciation and Good Return on Employee
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
vii
2.5 Why fringe Benefits Fail to Motivate Workers . . . . . . . . . . . . . . . 18
2.6 From a Different Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7 Reasons for Providing Fringe Benefits . . . . . . . . . . . . . . . . . . . . 22
2.8 Some Problems of Installing Fringe Benefits Plan8 . . . . . . . . . . . . 28
2.9 Some Major Types of Fringe Benefits . . . . . . . . . . . . . . . . . . . . 24
2.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
CFLWTERTaREE
RESEARCH METHODOLOGY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Research Design 33
3.2 Pilot Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
. . . . . . . . . . . . . . . . . . . . . . 3.3 The Data and Research Technique 34
3.4 The Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.5 Description off the Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 SampIe Sue Determination 38
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 Sampling Procedure 40
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 Statistical Technique 40
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 Questionnaire Design 41
. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10 Questionnaire Assumptions 42
3.11 Questionnaire Distribution and Organizational Status of Respondents 42
(xuPTER POUR
PRESENTATION, ANALYSIS AND .W .ERPIbETATION OF DATA
4.1 Demographic Characteristics of the Respondents . . . . . . . . . . . . . 47
. . . . . . . . . . . . . 4.2 Findings on Employees Attraction and Retention 50
. . . . . . . . . . . . . . . 4.3 Findings on Employees Level of Commitment 54
4.4 Findings on Absenteeism and Turnover . . . . . . . . . . . . . . . . . . . 57
viii
. . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Findings on Employee Morale 60
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 Testing of Hypothesis 64
CHAPTERJTCVE
SUMMARY RECOMMENDATION AND CONCLUSION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Summary 78
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Recommendations 79
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 ConcIusion 80
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Further Research Needs 81
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bibliography 82
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendices 85
LIST OF FIGURES
Figure 1: Maslows hierarchical classification of needs.
Figure 2: Diagrammatic representation of the sample.
LIST OF TABLFG
3.11a. Characteristics of the participating Hotel and Catering firms.
3.11b. Organization Status of Respondents
Educational Qualification
Age and Sex Distribution . ' Length of Service Distribution.
Marital Status Distribution
Response to the Rationale Behind Work.
What attract you to seek for employment in this Organization?
Would you leave for another organization with better fringe benefit schemes
if such an opportunity presents itself?
What do you consider as the most important aspect of your remuneration?
Are you satisfied with your organization friuge benefit schemes?
What level of commitment do you show to your work in the organization?
Do you think that improved fringe benefits programmes will increase your
level of commitment?
Have you ever been absent from work?
If the answer to (1) is 'Yes' how frequent is it?
If you are to leave your organization, which of the following would be the
major reason?
Would you have left the organization if the level of fringe benefits was very
low?
Do you feel satisfied working in you organization?
How do you perceive the fringe benefit schemes provided in your
organization?
xi
4 . 5 ~ What is your attitude to your organization and its goals?
4.5d Do you think that provision of fringe benefits in your organization affects
your job performance?
4.Se If the answer to '4' is Yes, how?
xii
LIST OF APPENDICES
9 Instrument A - Interview Guide
11) Instrument B - Questio~maire
111) Critical Value of Chi-square Distribution .
Iv) Calculation of Expected Frequency Values
v) Letter of Introduction from the Department of Management UNEC.
vx> Acknowledgment Letters from some of the Firms used in the Study
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND LNFORMATION
The problem of manpower in the Hotel and Catering industry has continued
to attract the attention of the industry's trade associations, professional bodies and
other interested parties because of the unique nature of the industry,
(Magurn,l977:vii). This uniqueiress lies in the fact that only a few other industries
have such close relations between staff and customer. Also only a few other
industries in the economy offer so much scope for giving satisfaction to others, and
for getting satisfaction from work. Yet, the problem of inability to attract, retain
and actuate personnel effectively and efficiently continue to stare the sub-sector in
the face, (Shuaibu, 1979; Pfedi, 1986:3).
In the light of the prevailing harsh econon~ic condition of our time, prudent,
management of the organization resources has been calIed for, so as to ensure
greater productivity from each unit of resource input. Of all the resources available
to management for the purpose of ensuring survival and growth of the organization,
the human resources stands out as one of the most basic and critical, (Druker,
1955251). One only need to think of the fact that all other resources can become
productive only i ~ t association with the human resource, arid humans aIso turn out
to be the ultimate consumer of the goods and or services from various organizations
in the economy, (Image,1996:19). I11 recognition of this, il~anagelnent usually devote
a lot of time and commit other resources towards attracting and retaining high
quality personnel for the organization and also in getting the best out of them. But,
the Hotel and Catering industry appears to be lagging behind in this regard,
especially in developing countries like Nigeria, (Onyia, 1986:3). Also, as Margun
(1977;vii) rightly noted.
"Our industry (Hotel and Catering) has frequently been critized in study reports for treating man-management, as the cindcrella of general niaiiage~neut and for devoting so little of its resources to developing the skills of those entrusted with responsibly . . . after all in n service industry, the people- resource nlust be seen as a prime determinant in the success and profitability of even the sn~allest unit."
A number of workfhop/lectures have been organized in Nigeria to find a solution to this
problem which may be acting as a hinderance to the desired developnlent of the Hotel and Catering
sub-sector. In one such workshopllecture, it was opined that amoug other issues like poor salary
sctiemes, degenerate working conditions etc, poor fringe benefit schemes prevalent in the industry
may also be part of the reason for the inability of the hidustry to attract, retain, and actuate
personilel effectively and efficiently, (Ifedi, 1986:3)
Fringe benefits have been identified as one of the effective ways managemeut may adopt for
attracting, retaining and actuating personnel, especially for motivating them to higher
performance, (Flippo, 1980:291;Ejiofor, 1984:23). Therefore for any organization to
meet its aims of survival, profit and growth, there is the greater need to devote more
attention to the formulation off sound and good fringe benefits prograinme/policy for the
organization and as well, maintain a good working condition, attractive salary and a
congenial work atmosphere. The reason for, this is because majority of the workers are
somewhat mainly concerned with the 'bread and butter" issue, moreso in today's Nigeria
with the prevailing economic depression, and general 'hardship'. One would see that
there is not much hope for the salaried worker, considering the rising inflation, which
was put at 8.5% (Abacha's 1998 Budget of Transition), with its accompanying rise in
cost of living. Also, there has been a steady rise in unemployment level, thereby
3
increasing the number of 'mouths' to be fed and cater for in the families of these poor
workers. Most wage and salary earners now see their pay package as a sheer mockery
of the prevailing market condition. Hence, attractive fringe benefits will help to
ameliorate the rising needs of the workers.
Again, the meaning attached to the fringe benefit programmes in existence in
many organizations are multifarious, and this affects its success in achieving its goal to
both the employees and the organizations. Man is a very complex being, and managing
man to increase his productivity involves a number, of variables one of which is
identifying those factors which can incite or spur him to contribute maxin~ally to
organizational growth and development. Once these factors are identified and established,
they can then be manipulated in a way that will enable them actuate labour effectively
and efficiendy , for improved performance.
The need for the development of the Hotel and catering industry in Nigeria, has
been on the increase in recent times. This arose out of the greater need to diversify the
revenue base of the country, considering the persisting slide in the price of crude oil at
the International Oil Market, (The Guardian, Nov.25, 1998:4). The developnlent of the
Hotel and Catering sub-sector, therefore, becomes pertinent because it provides the
'fertile' ground for the growth and development of Tourism industry. Tourism is, the
fastest growing industry in the world today, and, considering the abundant tourisin
potential in the countly, it 'has been accorded a "preferred sector" status in the national
economy, (Ugwu, 1998:42). But touisrn cannot grow or develop where there is not in
place a well established Hotel and Catering industry, (Adeoye, 1977: 11; Duru, 1998:46).
Also, as Nigeria continue to nurse the ambition of hosting the World Cup
tournament by the year 2006, the development of the Hotel and Catering industry in the
country would be a boost to this ambition. Nigeria would never have been allowed to
host the World Youth Soccer Championship tagged 'Nigeria 99' if there are no existing
Hotel; and Catering firms.
On the other hand, there has been a persistent call on Nigerian workers to
improve their performance, so as to contribute more to national development, (Ekundayo,
1988: 11; Agbetuyi, 1998:25). But, one would not expect much from a hungry worker,
and therefore studies such as the one undertaken hereby will help to direct the attention
of those at the helm of affairs to those salient factors that would need to be addressed
first before demand for better performance can be made of the workers.
1.2a. TKE STATEMENT OF PROBLEM
The Hotel and Catering industry, if well managed and developed has been known
to complemenl the tourism industry thereby enhancing revenue generation for the national
economy.
Meanwhile, it has been discovered that the Hotel and Catering industry in Nigeria
has not been bracing up to expectation for some reasons which boarder on inability to
attract, retain, and actuate personnel effectively and efficiently, (Adeoye, 1977: 11; Ifedi,
1986:3).
Lately, however, it has been noted amongst the hoteliers that though attracting,
retaining, and actuating personnel effectively plays a role here, the bulk of the problem
may centre on the dissatisfaction among the workers on the existing salary and fringe
benefit schemes as well as poor working conditions which leads to such vices as lateness
to work, absenteeism, and in extreme cases outright resignation. This leads to loss of
customer confidence and therefore revenue because, the employee might not even be
around to receive the customer as at when due.
Also, where the employee is on seat, the reception accorded a customer is usually
very cold and sometimes hostile. There have also been some reported theft cases. All
these continue to impede on the desired development of the sub-sector.
It is therefore the thrust of this research study to investigate an aspect of the
problem-poor fringe benefit schemes, with the aim of establishing its effect on the
performance of workers in the industry. And also, making useful suggestions that will
lead to improved fringe benefits administration in the Hotel and Catering industry, as
a way of engendering better performance among the workers, and consequently
enhancing the viability of the subsector.
1.2b. RESEARCH QUESTIONS
Focusing on the aspect of the problem as identified in the foregoing statement,
the questions that arise are:
i) what is the state of fringe benefit programmes in Hotel and Catering industry in
Nigeria?
ii) can the existing benefit schemes be helpful in attracting, retaining and actuating
personnel effectively and efficiently?
iii) can poor fringe benefit schemes act as an impediment to better performance by
workers in the industry?
1 . 2 ~ . THl% SUB-PROBLEMS
To facilitate the investigation of the problem, certain sub-issues will be addressed.
These include.
i) Which fringe benefits are operational in the Hotel and Catering industry in
Nigeria?
ii) Are they helpful in attracting employees to the sub-sector?
iii)
iv)
v)
vi)
vii)
1.3.
6
Do they help to retain the services of the enlployees for a longtime in the
industry?
Do they affect the workers level of commitment?
What effect do they have on manpower turnover in the industry?
Do they affect the rate of absenteeism among the workers?
What effect do they have on the workers morale?
THE PURPOSE OF THIE STUDY
The purpose of the study is to assess the impact of fringe benefits on the
performance of workers in the Hotel and Catering industry, and to establish whether poor
fringe benefit schemes could be an impediment to better performance by the workers
thereby hindering the growth - and development of the sub-sector.
1.4 OBJECTIVES OF THE STUDY
This study will examine the impact of fringe benefits on the performance of
workers in the Hotel and Catering industry with a view to:
i)
ii)
iii)
1.5.
identifying the fringe benefits that are operational in the Hotel and Catering
industry in Nigeria;
establishing whether thes fringe benefits are helpful in attracting and retaining
employees in the industry;
establishing whether fringe benefits affect turnover, absenteeism, level of
commitment and morale of the workers negatively, thereby acting as an
impediment to better performance by the workers, and consequently inhibiting the
growth and development of the sub-sector.
RESEARCH PROBLEM-ORIENTED HYPOTHESIS
To guide the investigation of the issues raised in the problem definition (1.2a.
7
1.2b and 1.2c), it is hypothesized that;
Fringe benefits are helpful in attracting employees to the Hotel and Catering
industry.
Fringe benefits are helpful in retaining employees in the Hotel and Catering
industry.
There is a direct relationship between fringe benefit 'packages' and employees
level of commitment.
Absenteeism among the workers will tend to be inversely related to the firms
level of fringe benefits.
Manpower turnover in the Hotel and Catering industry will tend to be inversely
related to the firms level of fringe benefits.
Better fringe benefit 'packages' will have a positive impact on the workers
morale.
SIGNIFICANCE OF THE STUDY
The study is significant in the sense that it will assess the impact of fringe benefits
on the performance of workers in the Hotel and Catering industry as a way of
establishing the level of importance of fringe benefits to the workers, and to the
industry.
The study will also determine whether or not poor fringe benefits schemes
contribute to lateness, absenteeism, turnover, low morale and low level of commitment
among the workers. It will summarily conclude whether or not fringe benefits are
important in attracting, retaining and actuating personnel in the Hotel and Catering
industry.
All these will in a way point to what may need to be done to facilitate faster
growth and development of the subsector.
1.7. SCOPE AND LIMITATIONS OF THE STUDY
The study was intended to cover some of the major areas of development and
administration of fringe benefit schemes with some of its attendant problems. It has
singled out the problem of fringe benefit scheme form the other problems identified as
inhibiting the development of Hotel and Catering industry in Nigeria, for study so as to
ensure a thorough assessment of the situation. The entire work of the research will be
concentrated on employees of all cadre in selected Hotel and Catering firms in Enugu
Urban.
A major constraint on this research study was that of sourcing the relevant
materials, as some of the materials needed were not readily available.
Money was also a serious impediment. This was as a result of the numerous trips
that had to be embarked upon for the purpose of the work. The prevailing fuel scarcity
also contributed to the hike in transport fare. A lot of money was also spent on the typing
and binding of the work. This was particularly felt since the researcher was self
sponsored.
Another major limitation also was that of inability of the Hotel and Catering firms
to make available some useful; materials which they described as classified, and therefore
cannot be made available.
There was also the issue of time factor which enforced on the researcher a lot of
hard work to ensure that the research was completed within the stipulated time.
1.8. DEFINITION OF TERMS
Frinpe Benefits: These are additional benefits (Monetary or non-monetary) available to
the worker as a member of an organization apart frorn the normal salary or wages and
which adds to the total labour cost. It may be legally required like maternity leave
workers compensation, vacation etc. or voluntary, like recreational facilities, cafeteria
subsidies, christmas gift, profit sharing bonus etc,
Tourism: This refers to that sector of a nation's economy which caters for its need for
recreation, relaxation, leisure and animation of life. It is also viewed as a temporary or
short term movement of people to destinations outside the places where they normally
live and work, as well as activities during their stay at these destinations. In its wider
sense, it encompasses movement for all purposes, including leisure, commerce cultural
exchanges, and relaxation. .I
The Tourism phenomenon is a result of man's inherent desire to change his
environment for purposes of psychological satisfaction, as we11 as business exploration.
Tourism is the fastest growing industry in the world today. It preaches to change the
world from the manufacturing dominated economy to service oriented sector.
Effectiveness: This refers to the achievement of pre determined goaIs.
Efficiency: This relates output to input, in assessing how we11 a given output was
achieved with minimum input.
Productivity: This refers to the contribution of a unit input to production output.
Morale: This is the sum total of the 'attitudes' of all workers of one group. If we
can discover the attitude of the individual, we can deduce from them the overall morale
of workers in the group. Though 'attitude' cannot be measured directly, a man's attitude
may be revealed indirectly by his verbal declarations.
Hotel: A firm providing lodging and usually meals to the public on a commercial
basis.
Catering Firm: A firm providing light meals and fast-foods to the public on a
commercial basis.
10
CHAPTER TWO
2.0 THE REVIEW OF RELATED LITERATURE
2.1 THE NATURE OF SCOPE OF FRINGE BENEFITS
The term fringe benefits has ben defined by various authors. Flippo
defined it as a11 expenditure designed to benefit employees over and above regular wages
and direct monetary incentives related to output, (Elippo, 1976:544). Armstrong and
Murlis have it def ied as 'the total package offered to employees over and above salary
which increases their well being at some cost to the employer. (Armstrong and Muriis,
1980 :140). In their own contribution French and Saward (1977:138), defined it as
something of value, apart from agreed reguIar monetary payments of salaries and wages,
given by an employer to an empIoyee. Yet, another definition is that given by Johnnasei~
and Page, (1975:151). They defined fringe benefits as the reward for employment in
addition to remuneration or payment of wages or salaries. Blomstrom, however, opined
that one of the probIems which always arises in discussing fringe benefits is that of
definition. He pointed out that when narrowly defined, it has been used to mean only
those benefits which appear in the employee's pay cheque. In its broader sense, he
described it as those employee benefits which appear as cost items in negotiated labour
agreements (Blomstrom, 1964: 11). But in it's broadest interpretation, it is defined as any
kind of employee benefits and includes such items as health and life insurance, retirement
benefits and other such items commonly contained in the labour contract as well as broad
category of employees services such as employee recreation and socia1 programme,
purchase of company products at reduced prices and medical services.
In the search for a suitable definition, certain characteristics of fringe benefits has
been described by Reid and Roberston, (1965: 19). These characteristics are:
11
i) They all cost the employer money.
ii) They all either add to the employee's pay or are of some service to him.
iii) They are available to all or most of the employees.
iv) Their cost rises or falls as the size of the work-force changes.
According to Ejiofor (1986: 102), benefits are almost encon~passing - "they span
a worker's life from the date of employment to life after death". But the question always
arises as to whether or not a company should provide any kind of benefit to its
employees. While some argue that liberal benefit plans raise morale, increase employees
loyalty and motivates employees other are of contrary opinion.
However, Wistert (1959:147), is of the view that fringe benefits are indeed here
to stay. He opined that it is beyond the power of the individual company or the industry
in general to consider retrogressing from the present accepted standard of benefit but it
is within the company's prerogative to ask itself the questions:
i) Do our employees really appreciate what we are doing for them? and,
ii) Are we getting as much out of fringe benefits programme as possible.
If the company cannot answer all the questions in the affirmative, "it may be
assumed that it's programme is little more than a give away programme", (Wistert,
1959).
As every company expects something in return for its fringe benefit programme
certain factors were drawn by some authors as to how a company can get the best out
of money spent on fringe benefits. These factors are considered below:
2.2 FACTORS FOR EFFECTIVE FRINGE BENEFIT PLAN
In the words of Blomstrom, one of the factors to be considered for an effective
fringe benefit plan is that, "it must be built on a base of satisfactory wages, hours and
working conditions", (Blornstrom, 1964). He seeins to share the same view with Jucius
when he (Jucius) said that service plans will do little or no good if a company's wages,
hours and working conditions are not considered satisfactory by the employees. They
are considered to be the foundation because employee benefit plan cannot support a
weak or unfair structure of wages, hours and working conditions.
The second factor as stated by Flippo is that it should never be established unless
there is a real need for it, (Flippo, 1982:295). In his contribution, Blomstroin (1964),
suggested that "it should never be viewed from the paternalistic view point of being good
to the employee". The question which should always be asked is: can the employee
furnish the service for himself as well or better than the company can provide it?
However, Flippo (1982) in his findings stated that in many cases, fringe benefits have
been installed, only to be met with employee outright resistance. This according to him
is because some managers believe they know what is best for their employees. He
therefore shared the same view with Blomstrom by stating that the provision of fringe
benefits should not be viewed from the moralistic angle. Rather the question the
company must ask itself is: Do the employees want the service?
The third factor for effective benefit plan is that as nearly as possible, plans
shouId be structured so that maximum number of employees are affected. But according
to Blonlstrom (19641, this does not mean that all employees must participate in all plans.
The fourth factor as stated by Flippo is that "the cost of the benefit should be
calculable and provision should be made for sound financing " , (Flippo, 1982). Sound
estimates must be made, and adequate provisions, for financing must be established
before conceding the service over the collective bargaining table or before embarking on
any such services, (Flippo, 1982).
Another factor for effective fringe benefit programme is an extensive and well-
13
planned communication programme. This factor is well stated by Flippo, (1 982), when
he said that if the firm is to receive values from providing employee services, it must
undertake an extensive and well-planned communication program. Ejiofor tended to
agree with Flippo when he stated the implication of low awareness of employee benefit
programmes. According to Ejiofor, "A worker cannot be motivated by a benefit he is
not aware of", (Ejiofor, 1986: 104).
Yet another factor is that in designing fringe benefit programmes, effort should
be made to create a more favourable image of the company in the eyes of the public.
To this end, Strauss and Sayles suggested the consideration of such programs as re-
creational, civic and social activities which impress the community with the value of the
firm, (Strauss and Sayles, 1960:719).
Finally, according to Blomstrom, fringe benefit plans should be operated in such
a way that employees take pride in them. He stated: "Pride in the plan helps in building
employee loyalty", (Blomstrom, 1964: 13).
But certain questions come up. What kind of benefit should an organization
adopt? And how should these benefit plans be administered to bring about the
effectiveness of the programme? These are two of the most important questions to be
asked when an organization undertakes an analysis of its benefit packages. According
to Coleman, survey of benefits offered by other organizations are necessary to determine
what the competitor is providing, (Coleman, 1979:361 - 363). Also, survey of
employees through questionnaire or interview can provide data on how the employees
feel about their existing benefits and what they might want changed. It is on this basis
that Coleman suggested ways of developing and administering the benefit prosram:
14
2.3 DEVELOPING AND ADMINISTERING THE BENEFIT PROGRAM
Coleman (1976), listed certain questions an organization must ask itself in
developing and administering its benefit plan. These questions include:
1. What do we have?
2. What do others offer?
3. What do en~ployees what?
4) What is the cost of the existing programme?
5 . What is the cost of the alternative to this program?
6 . What is the behaviour encouraged by the existing program elements?
7. What is the behaviour anticipated by the program change?
8. What is the cost and pay-off for change?
Yet, another question comes up: what should be the philosophy of the manager
in the realm of employee services? According to Flippo (1976:544), the basic guiding
principle should be that no employee benefit programme should be undertaken unless
there is some return to the organization that is at least equal to its cost.
However, one problem always arises on the effectiveness of benefit programmes,
and this problem is Iack of adequate information provided by companies to their
employees about the kind of fringe benefits available in the company. In Harrington
findings, "lack of knowledge of fringe benefit programmes in the companies are
astounding as they are numerous leading to poor understanding of the programme",
(Harrington, P970:604).
In a survey of over 36,000 employees in fifteen companies, Harrigton found that
more than 30% of those surveyed indicated that they did not understand the benefits
provided by their companies. According to him, in some companies, the number
indicating such lack of knowledge exceeded 60%. The importance of these response, he
pointed out, is that in nearly every case of poor understanding, the employee did not
appreciate the benefits, nor did he believe they compared well with benefits provided by
other companies. In other words knowledge and appreciation go hand-in-hand.
In his findings, Harrington continued, since so many employees do not appreciate
the benefits that are provided, management finds itself under pressure to add or revise
benefits faster than it should. This pressure can take many forms. In non-union
companies, the pressure is sometimes applied through an organization's attempt. Also,
in any company, he further stressed, pressure may be applied by increased turnover,
productivity declines or absenteeism.
Jewett (1976:18), also emphasized this problem when he said, "an area of
responsibility often neglected by management is the transfer of information from
managers to employees concerning job benefits". I-Ie went on to say that the provision
of fringe benefits is the area in which management while doing a good job of providing
them, in many cases does a poor job of informing their employees that they provide
them. Management is therefore faced with the issue of providing the employee adequate
knowledge of the type of fringe benefit in the company and the benefits he is eligible to
receive.
In his own contribution, Ejiofor (1986) said that usually, many employees are not
aware of the existence of fringe benefit programmes. According to him, the time many
employees become aware of the benefits in existence in their organization is the time it
is being threatened with withdrawal by management or when the employee might have
left the organization. He further stressed the implication by saying, "an employee cannot
be motivated by a benefit he is unaware of", (Ejiofor, 1986).
The question that poses itself now is what shou1d be done to insure full
appreciation and good return for the money spent on employee benefits?
2.4 SUGGESTED WAYS OF ENSURING APPRECIATION AND GOOD
RETURN ON EMPLOYEE BENEFIT PLANS
In pursuance of the aforementioned objective of ensuring full appreciation and
good return for the money spent on employee benefits, the company could embark on a
benefit awareness programme as a means of informing employees of what their company
is doing for their well-being.
In line with this, Harrington (1970:604) mentioned four ways through which
employees may come to appreciate employees benefit programmes.
Firstly, the company could provide an annual statement to each enlployee showing
the amount paid or provided for each benefit for the last year.
Secondly, the company could hold employee meetings once in a year to review
benefits or schedule them when revisions are made to both explain the new or changed
benefits and review the rest of the package.
Thirdly, running of contest by asking people to guess the percentage the company
is providing for the total benefit package and follow up periodically with other contests
designed to make employees think about the provisions of each benefit component could
be of great help. For example, according to Jewett (1976: 18), a contest could be run to
ask employees to guess the 'dollar' value of major medical claims in the last year or
guess the amount of the largest major medical claim. He further stressed that other
contest could ask for the total number of dependents covered by the company benefit,
vacation allowances, and so on.
Lastly, the company could train supervisors to be part of its sales force to 'sell'
employees on the vaIue provided through benefit programmes. But then, the company
17
should ensure that the supervisors, themselves are satisfied with their benefits before
being asked to convince the employees.
But in Jewett's view, no matter which methods are used to acquaint employees
with the benefits available to them, it should meet certain criteria (Jewett, 1976):
i) It should be appropriate to the employees involved.
ii) It should be honest and sincere. There should be no doubt in the employees mind
that his company is interested in him personally. Lastly, there should be a means
of communication used which permits the employees to obtain answers to
questions about his benefits.
He also suggested various media that a company could use to communicate with
employee about benefits provided, These media include the following: company
publication, booklets, notices on pay envelops, posters and bulletin boards. it is also his
belief that if employees had a part in the selection of some of the benefits which were
made available to them, knowledge of the various benefits received by them would be
increased. Although, he went on to say, that it could lead to a 'garbage' approach which
is highly suspected to abuse, the method has considerable merit when used with care.
And considering all the money companies spend on compensation over and above direct
wage payments, it would seem to be an intelligent approach, he pointed out, to permit
employees to have a voice in selecting some of those which appeal to them most.
In addition ta the suggested ways of ensuring appreciation and good return on
employee benefit plans by Harrington and Jewett, certain reasons why Fringe Benefits
fail to motivate employees and which have to be looked into for adequate return on the
money spent on the program were given:
18
2.5 WHY FRINGE BENEFITS FAIL TO MOTIVATE WORKERS
One of the reasons why fringe benefits fail to motivate employees according to
Ejiofor (1986: 105), is the wrong notion which colours management attitude to employee
welfare programme that worker should see fringe benefits as kind gestures from
employers which they should reciprocate., He pointed out that paternalistic assumption
ends in disillusionment. "Workers expect fringes as of right" (Ejiofor, 1986).
Peharps, Ejiofor went on to say, one of the most important reasons employee
welfare programmes do not elicit greater worker effort is that many do not discriminate.
There is no distinction between "hard working" employees and others in terms of benefit
provided. This, according to him destroys their motivation potential.
diagramm
Also emphasized is the fact that for any reward to motivate employees, it has to
be attractive to the prospective recipient. Different people value different things at
different stages of their lives and working careers. As a result of differences in valence,
while some employees are enthusiastic about some of the benefits, or even hostile to
some benefit programmes. Where the benefits are not desired by the workers,
expenditure on benefits will be like money thrown down the drain in terms of incentives
for greater performance.
On explanation for differences in value attached to certain benefit is one's position
in Maslow's need hierarchy, (Maslow, 1943: 370 - 396); fig. 1.
For instance, "a study leave programme means little to a fifty year old laborer,
gateman or cleaner; a long service award of a gold watch given to a retiring polygamous
machine operator with ten children is also 'a square peg in a round hold"', (Ejiofor,
1986).
According to Newman (1963: 190), many employees benefits programmes turn out
to be morale depressants rather than stimulants because they are not varied
proportionately within the organization. They are inequitably dispensed between senior
and junior staff.
Though, subordinates do not expect to bc treated like their bosses, a11 employees
are interested in what the boss gets. Dispensing of benefits de-motivates employees if
they perceive that the gap between what is given to them and what management gives to
itself is too wide. In the same vein, employees expect to be treated as well as their
counterparts is other organization. Thus, it is argued that benefit, which fall below those
received by employees counterparts in other organizations were demotivating.
In his own view, Ejiofor, (1986), agreed that benefits not properly administered
causes frustration. He pointed out that such rnis-management may arise out of
questionable integrity of the dispensing manager and some due to ineptitude, or bad
poIicies. He illustrated this point with employee training facilities. According to him
most employees expect to be promoted soon after training and get frustrated if they do
not get promoted while employees on their part may argue that promotion is based on
productivity, not on paper qualification. The net effect is that organizations that ignore
the employees expectations do so at their peril.
2.6 FROM A DIFlFERENT PERSPECTIVE
Fringe benefit can be looked at from another perspective. According to
Blomstrom (1964) most employers have found themselves facing a tight labour market.
Competent employees have been hard to get and in some cases even hard to keep. As
a result of facing the seller's market, many employer have turned to various competitive
devices such as pension plans and employee recreation programs. It was also pointed out
that in the competitive world of today, businessmen considered themselves to be
competing for labour on two separate fronts, that is wages on one hand and fringe
benefits on the other.
Also of importance is the fact that present economic situation has taught
employees to think in terms of real wages (the amount of goods and services an
employee can command in exchange for a given amount of work). For example, "the
Nigerian workers produce but cannot dictate the price of their labour", (Ekundayo,
1988: 11). Whenever there is any danger facing the economy, they are always called upon
to salvage it and necessary sacrifices are made by them. It was therefore agreed that the
upward review of workers fringe benefits is overdue. For instance, the Nigerian Labour
Congress (NLC) did provide a cost of living index which showed that the prices of
21
essential commodities in Nigeria had increased between 150% and 500% since the
enactmen1 of the National Minimum Wage Act of 1981. Though it now appears as if the
dawn of better days for the Nigerian worker is now here, with the recent minimum wage
increase from N800 - PF5,200 per month by the Abubakar administration. The new
increase is however still shrouded in controversy, and also, "inflation has eaten deep into
the fabric of the nation economy", so much so that the new increase may be more or Iess
or no effect, (Obadofin, 1998:5), Despite this, the Nigerian workers are being called
upon daily to increase their productivity. According to Ekundayo, (1988), this shouId
pose no problem. "Let those who play the piper dictate the tune". The employers of
labour should strive to make workers happy by increasing their lots and improving their
welfare.
Knowing the importance of fringe benefit progranmes in an organization, it is
believed that they have become an integral part of the business life and are here to stay.
Business-men need not be as concerned with the question of whether or not to provide
benefits as with the questions of what kind, how many and how much?
The answer to such questions seem to lie with the employees themselves and the
desire to increase their real wages. According to Blomstrom, if fringe benefit
programmes are to yield the fullest return, they must be of value to both the company
and employee, (Blosmtrom, 1964). The employee invariably equates money spent on
fringe benefits with his command of goods and services. He weighs the desirability of
increased money income against increased fringe benefits. If he feels that money spent
on benefit programmes increases his real wages, he will respond positively to the
expenditure. In other words, if the company can provide a desirable good or service for
the employees at lower cost than he can provide it for himself, there will be a positive
22
response. If however the employee feels that money spent on the benefit programmes
has not increased his real wage, his response would be negative. In that case, the
company will have to find a better use for the money.
2.7 REASONS FOR PROVIDING FRINGE BENEFITS
Regardless of the necessity of individuality, it is interesting to look at reasons
given for establishing fringe benefit programmes by companies.
In Blomstroms view, some companies think that they have a certain social
responsibility which can be fulfilled by providing fringe benefits to their employees,
(Blomstrom, 1964). They seem to feel that the lives of their employees are so closely
related to the company, that the firm must provide for old age problems and the like.
There appears to be an increasing awareness of the difficuIties encountered by workers
in our modern society in obtaining funds to satisfy their needs. Under certain conditions
in which employees cannot adequately provide for their own health and welfare, many
companies feel it is their duty to be concerned.
Also in recent times, management has observed that it is to their own advantage
to maintain a sound fringe benefit plan "as employees seek security as well as leisure,
and deprivations in either area may lead to paralyzing unrest that reflects itself in
decreased effectiveness", (Strauss and Sayles, 1971 :711 - 714). Paradoxically, as the
country becomes complex and sophisticated, the desire to eliminate risk and increase
personal security grows stronger. And the prevalence of fringe benefits reflects a strong
urge on the part of employees to eliminate insecurity from every conceivable source.
Many companies find the thought of unionization distasteful. Some companies
go to the extent of keeping the union out by providing more and better benefits than
unions have been able to secure. The reasoning being that benefits which are superior
to those obtained through negotiations will make unions less attractive to employees.
The tax position in which many companies find themselves also make if attractive
to provide various benefit programmes since most benefit and service programmes are
expense items and thus deductible before taxable income. Companies considered it an
advantage providing fringe benefits to their employees rather than using the same fund
for paying taxes.
Some companies are also of the view that generous fringe benefits help create a
more favourable image of the company in the eyes of the public, thus, making it easier
for management to recruit high calibre employees and to maintain amicable relationship
with the entire community. This led to the view that like fair wages and salaries,
adequate health, welfare programmes impress the community with value of the firm,
particulady as these programmes becomes more widely identified (Strauss and Sayles,
1971:70).
Also considered by companies is the fact that attractive fringe benefits tend to
"trap" employees into remaining with a particular firm in that they might want to
accumulate such benefits as sizeable pension, long vacations or extensive sick Ieave
benefits, (French, 1964509).
It is known that people who would have otherwise left their employment in civil
service are often complaining that they would not leave until it is possible for them to
get all their benefits. According to Nwachukwu, empioyee satisfaction correlates
negatively with high rate of labour turnover, tardiness, labour-management disputes and
high absenteeism rate, (Nwachukwu, 1984:272).
2.8 SOME PROBLEMS OF WSTALLING FRINGE BENEFIT PLANS
One of the problems of installing employee benefit plan is the financial problem
24
involved. Before entering into a programme, management is faced with the problem of
having to make thorough realistic evaluation of its cost, both short-term and long-term.
This is because even where there are no legal obligation to provide fringe benefits to
employees, employees often feel that management has made a moral conlmitinent to
continue the programme indefinitely, (Strauss and Sayles: 712). But where management
finds itself incapable of continuing a programme, it could bring the company's plight
before the union so that re-negotiations would take place for trading off the programme.
Furthermore, benefit services designed to build employee morale may have some
disastrous effects. For instance, experience has shown that many fringe benefit
programmes which provide such things as housing, food and the like often develop into
rich sources of workers grievances (Strauss and Sayles: 706). Such grievances could
arise when the company is faced with such problems as:
i) When is it 'fair' for the company to raise price of food in the company's
restaurant?
ii) How often should rice or beans be served in the canteen?
Problems may also arise when for one reason or the other, there is delay in
settlement of employees claim, such as claim for medical expenses, claiming of over-time
payment or premium leave allowances and any other allowances. The danger in such
delays is that it sometimes leads to bad feelings, complaints and union grievances and all
these could be regarded as threats to morale.
2.9 SOME MAJOR TYPES OF FRINGE BENEFITS
Fringe benefits are characterized by variety. This make it difficult to compile an
acceptable, single and exhaustive list of the benefits and services. According to Yoder,
(1972:655), "no simple and yet generally accepted classification of benefits and services
3) Extra Compensation for Time Worked
i) Overtime premium
ii) Shift premium
iii) Shift in pay
iv) Holiday premium
4) Payment for contribution towards Employee Security
i)
ii)
iii)
iv)
v)
v i)
vii)
viii)
iix)
Accident and disability insurance
Hospitalization insurance
Medical and surgical insurance
Unemployment compensation
supplements to unemployment-compensation
Workmen's compensation
Employee thrift plans
Employee stock purchase plans
Pensions
5) Enlployee Services
0 ii)
iii)
iv)
v)
v i)
vii)
viii)
ix)
Cafeteria
Athletic teams and recreational progrmmes
Housing
Stores
Educational scholarship and loans
Free meals
Special counselling services
Income tax
Legal aid
has achieved wide acceptance". Some current discussions distinguished those required
by law, for instance unemployment insurance or workmen's compensation, from those
provided on a voluntary or negotiated basis.
For the purpose of convenience and the limits of this study, a partial list of
commonly offered benefits and services would include:
1) Non Production awards and bonuses;
i) Suggestion awards
ii) Profit sharing
iii) Service bonus
iv) Christmas bonus
V) Safety awards.
2) Payments for Time not Worked
i) Holiday with pay
ii) Jury duty time
iii) Lunch periods
iv) Rest periods
v) Sick leave
vi) ReIigious holidays
vii) Vacation
viii) Severance Pay
ix) Voting time
x) Military service allowance
xi) Time spent on grievances and contract negotiations.
x) Retirement
xi) Transportation
xii) Parking facilities
Some of these benefit packages will now be explained further based on the
opinion of Macbeath and Rands (1976:327-349)
1) Holiday Transport and Accommodation
A number of companies run holiday or convalescent homes. However, a few individual
organizations go far beyond this stage to provide holiday accommodation for senior
executives, for example to the best salesmen.
2. Payment During Absence for Domestic Reasons
Some organizations define periods of time permitted for absence with pay for domestic
reasons.
This is primarily intended to cover such incidents as the funeral of an immediate
relatives, birth of a son or daughter, sudden sickness of an immediate dependent relative,
or some other personal emergency which necessitates time away from work. In practice,
Macbeath and Rands (1976) emphasized, most employers give time off choose to define
it with the result that it becomes a 'right' and ass such niay be rigidly taken up by some
employees.
3) Pension
There are few staff employees who do not enjoy the prospect of receiving a
pension when they retire. However, the many pension plans which individual companies
have developed, or purchased from specialist pension or life insurance companies vary
substantially both in cost to the company contributions from employees and benefit for
the employee.
28
4) Subsidized Meals
Whenever it is difficult for employees to return home for lunch, employers tend to make
some arrangement to ensue that their staff are adequately fed at mid-day at subsidized
price. On an industrial estate, or in a large factory, this normally takes the form of
providing canteen services, while in town or city centers, where the office
acconlmodation is very close to existing canteen or restaurant facilities, some form of
luncheon voucher may be issued.
5) Subsidized Purchase
Virtually all organization producing or selling any form of consumer product make some
concessions to their staff in the form of discount of purchase. The cost of this services
to the employer according to Macbeath and Rands is limited to the administrative cost
of the service. This is probably very small and is virtually certain to be more than offset
by profit on the sale, even after discount has been allowed.
6) Medical Benefits
Many companies arrange for senior members of staff to have regular medical
checks to ensure that all is well, and may extend this arrangement to other staff to save
the time which would be taken by those staff going to private practitioners if medical
facilities are not available in the company. As Mcbeath and Rands noted, most of these
items have a marginal cost which is more than offset by reductions in lost working time.
They contended that these facilities are widely appreciated by staff.
7) Car Subsidy
The award of a company car, with either limited or complete use is probably the
most substantial single benefit given, according to Mcbeath and Rands, (1976). The
pointed out in general, the larger companies tend to make rather limited use of this
29
expensive benefit and to restrict it to people of director or top management statue.
Smaller companies often readiIy make a car available to people who are at middle
maqagement level, and are less strict in controlling the use of the car outside normal
business hour. This may help to off-set the general more restricted career prospect in
a smaller firm.
8) Housing
There are many forms of housing assistance. In an industrial estate or in a town,
a company may have available a certain number of houses for rental through the housing
authority. In these circumstances, it can offer, as a recruitment incentive, subsidized
rental accommodation which may be of a high standard.
9) Overtime and Holiday Pays 'C .. Whenever the normal hours of work have been agreed upon or fixed, any hours worked
in excess by a worker is regarded as overtime and is paid for, But nothing prevents
employers and unions from bargaining contract terms that provide for premiums for
weekend works such as double time for sunday.
10) Leave of Absence
It is now common for employers to grant leave of absence with pay. In some
80% of employer-union agreement, provision is made for leaves, although specific rules
governing such leaves are not so frequentIy set out in detail. Some of these leaves
include:
i) Annual leave: employees are entitled to holiday with pay at least six working days
in a year after tweIve continuous months of service.
ii) Maternity leave: These are usually granted to women for a period of six weeks
following their confinement.
3 0
iii) Casual leave: These could be granted to any employees, for a few days on
compassionate grounds.
11) Call-in, Call-out and Call-back Pay
A "call in" occurs when the employee reports for work and for various reasons
there is no work to be done while a "call out" and a "call back" occur when an employee
is asked to report for work outside his regular hours. if an emergency requires a
company to call out an employee outside his regular hours, the customary practice is to
pay him at a higher rate (Yoder, 1958: 15 - 18)
12) Employee Counselling
One employee service which has traditionally been provided for employees who
are experiencing personal problems is employee counselling. These according to Naylor
and Torrington (1974:238) fall into three categories namely:
a) employees who are in financial difficulties
b) employees who are ignorant of how to deal with any other personal situation which
is confronting them, and who need and require advice.
Such problems in the opinion of Naylor and Torrington often not onIy worry
employers but may also affect the efficiency of the firm. If an employee has a problem
arising from any of the above source, his mind might not be at rest for the job which he
is being paid for. His working efficiency and the safety of both himself and his feIlow
employees may therefore be jeopardized.
13) Recreation Programmes
It is a general saying that "all work and no play makes Jack a dulI boy". This
has helped employers to know the importance or recreation facilities in their
organization. Generally, it is believed that workers attitudes improve when the routine
31
of every day living is broken occasionally. In addition, it is agreed that through the
contacts and relationship build up in recreational events, a more agreeable informal
atmosphere is promoted (Flippa, 1976550). The employee not only gets to know other
employees, but also gets in touch with the management in% climate unaffected by the
chain of command.
14) Group Insurance Programme
Group insurance programmes are frequentIy provided by companies for protection of
employees against such risks as loss of Iife and incidence of accidents and illness.
According to Flippo (1976) programmes of this nature are aimed at relieving the
employees of worry about security of his dependents and of financial strains to enable
him devote grater attention to the job of the company. GeneralIy, group insurance is
preferred by employers because group life premiums are considerably smaller than
insurance purchased by the individual.
2.10 Summary
With the increase in the growth of fringe benefits provided by companies coupled
with the fact that some of these benefits are not directed towards the specific needs of
employees due to its poor administration, "it is questionable whether our industrial
economy can stand more fringe increases as most of its costs are ultimately passed to the
consumer and, like direct wage increases contributes to spiralling inflations (Straws and
Sayles, 1971: 712).
Furthermore, some companies in their effort to provide employees fringe benefits
go to the extent that they smother the employees. By providing lavish fringe benefits, the
firm may foster a sense of over-dependence among some employees and a destructive
resentment against excessive paternalism among others.
32
Each company should therefore decide how much is enough and how much is "too
much".
The solution to this problem, therefore is to gear the provision of fringe benefit
towards satisfying the actual needs of the employee, provide adequate information about
the kind of benefits provided for the employee so that they can come to appreciate what
the company is doing for them and giving them the opportunity of choosing the ones that
satisfy their needs most rather than dictating, choosing or basing its provision on a
paternalistic assumptions which in general improve its administration. All these it is
believed wiIl bring the desired return expected on money spent on fringe benefits.
Also, as Strauss and Sayles puts it, if management is to ensure that it's benefit
programmes are working out in practice as originally planned, it must be subject to
constant review. Periodic surveys of employee opinion might disclose quite different
orders of preference among various fringe benefits and between "fringesUand direct pay
than management has been assuming.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 RESEARCH DESIGN
The principal method adopted for the study was the analytical survey method.
Steps were taken to obtain relevant data on the effect of fringe benefits on the
performance of workers in selected Hotel and Catering outfits in Enugu urban. The
selected hotel and catering firms are:-
i) Nike Lake Resort Hotel
i i) Hotel Presidential
iii) Modern Model Hotels (Modotels)
iv) Zodiac Hotels Ltd
v) The Genesis Restaurant
v i) ~uixote ls /~lacia Huest House
vii) Hotel cordial Ltd
viii) Royal Palace Hotel Ltd
ix) Raya Restaurant
X) Jook Hotel and Towers
The workers from these Hotel and catering firms were taken as the sample for
study from the population. The data collected during the study were analyzed with a
view to establishing how the performance of these workers are affected by the fringe
benefits schemes in their different organizations.
A test of the validity and reliability of the questionnaire instrument used for data
collection was one important objective of the pilot study carried out. On account of the
problems encountered and from other observations recorded during the study, the original
34
instrument has to be modified and remodelled. This especially affected the provision for
scoring the responses which was part of the original instrument design and rndel .
Measures were also taken to forestall response set by altering the order of the items in
the questionnaires.
Steps were taken to secure promises of cooperation from the management of the
selected Hotel and Catering f m s so that the fieldwork proper which was carried out
later went on smoothly. Both the administration of questionnaires and the conduct of
interviews took place in the respondents workplace within the first half of February 1999.
This ensured time consistency and uniformity of the environment of the study.
3.2 PILOT STUDY
The pilot study conducted was to get a demographic picture of the respondents
and to provide an opportunity to assess the adopted strategy and anticipate problems that
will IikeIy crop up in the course of the proper study. Instrument pretesting was done,
though on a minimal scale and results obtained were considered adequate for the purpose
of generating certain data required to cIarify research objectives, formulate hypotheses
and determine the sample size and other related issues.
3.3 THE DATA AND RESEARCH TECHNIQUE
Sippl and SippI (1973:628), defined data as a form employed to express all given
facts, parts, quantities and elements of a proposition in a given problem. Sanders
(1973:9) on the other hand defrned it as a general term used to denote any or all facts,
numbers, letters and symbols that refer to or describe an idea, subject, condition or other
functions such as name, address, telephone numbers etc. Although often considered to
be numeric value, data may also be defined to include non-numeric perception and
observations made by human beings and machines.
These
i)
ii)
35
Sources of Data
For the purpose of this research study, two main sources of data were identified.
are primary and secondary data sources.
Primary Data Source
Sources for the data referred to as primary include
Personal Interviews
Observations
iii) Questionnaires
GeneralIy, primary data are the original data gathered by the researcher solely for
the purpose of the project at hand, (Tull and Hawkins, 1990:81). As this implies,
primary data refers to the initial or primary collection of observed facts gathered by the
researcher for the purpose of his study. They are first hand facts collected by the
researcher, and the aim of this usually is to make the study as original as possible.
Great reliance was placed on the interview and questionnaire methods for the
purpose of obtaining the data for this study.
Secondary Data
These are data collected for some purpose other than helping to solve the problem
at hand (Tull and Hawkins, 1990; Boyd et.al, 1981: 137). it include information
gathered by some other person or organizations for their own use but which have been
utilized by the researcher for the purpose of his research. Experts are of the opinion that
secondary data should be given a high premium for the purpose of a research as they
argue that the methods employed for the acquisition of primary data often give rooms for
human biases which distort the facts of the situation under review (Bennett, 1991:85-
103).
However, the secondary data should have the following properties for them to be
reliable:
i) Availability
ii) Relevance
iii) Accuracy
iv) Sufficiency
The secondary data used for the purpose of this research have been classified
according to sources into:
Internal Sources, and
External Sources
The internal sources include:
organizations internal memos;
policy manuals;
operating manuals;
internal experts
monographs
periodicals
bulletins
internal miscellaneous records
The external sources include
directories
encyclopedias
books
external experts
government official gazettes and bulletins
annual reports
37
For sourcing the secondary data for this research work, much use was made of the
school library, British Council Library, National and State Libraries all located in Enugu.
3.4. THE POPULATION
For a study of this nature, the universe of interest would comprise the totality of
the Hotel and Catering workers in Nigeria. Unfortunately, accurate statistics on the
number of workers involve is not available. Because of the large number of subjects in
the population, the distribution was approximated to be normal.
3.5 DESCRIPTION OF THE SAMPLE
The entire work of this research were concentrated on employees of all cadre in
the selected Hotel and Catering firms.
The sample for the study were viewed from two perspective namely:
i) the managerial staffs, and
ii) the operatives
Those subjects which fall under the managerial staffs group con~prises the managers and
the senior staffs, while subjects in the operatives group consist of the junior staffs.
3.6 SAMPLE SIZE DETERMINATION
The distribution of the population was found to be approximately normal, and as . ,
Chisnal (1973: 108) noted, "where the popuIation is very large relative to the sample, the
finite population correction (FPC) approximate to unity " and was therefore ignored.
With a at 5 percent, the researcher adopted the sample percentage method
suggested by Cochram (1977:72-73) for calculating the sample size with the formula.
Where,
n = sample size
P = the percentage of units in the population that possess some attributes or fall into the same defined class.
Q = the percentage not possessing the given attribute.
From equation (i)
Therefore, n = 2 i E L
5
n therefore depend on some property of the population here represented by the
quantity P.
Due to non-availability of identical prior data from which to estimate P, one of
the questions that featured in the pilot study was specifically applied for the generation
of P. The particular question was:
"Which of the following types of fringe benefits do you desire most?"
a) Yolunting Benefits e.g. welfare plans, recreational facilities, cash benefits for
time not worked, cafeteria subsidies, educationd prbgrarnme, christmas gifts,
child care centres, medical coverage, long service awards [ ]
b) Legally required benefits e.g. vacations, employment insurance, workers
compensation, retirement gratuity, maternity leave, sick leave, company car etc
11 The findings revealed that only 2 percent of the 10 subjects sampled in the
managerial staffs group desire fringe benefits types - a, while 98 per cent desire fringe
benefits type-b.
Therefore with P value at 98 percent, n was estimated as follows:
n = 4P0 25 = P = 98
Q = 2 Therefore, n = 4 X 98(2)
25 = 32
The response pattern for the subjects in the workers category however showed a
marked contrast with only 10 percent desiring fringe benefit type-b and 90 percent
desiring type-a.
Therefore with P value at 10 percent, n was estimated as follows:
Therefore, n-" -= - 4 X lO(90)
rC - The sample size obtained by a' statistical method refers to the minimum number
of participants for the findings of the research to have statistical significance (AdIer,
1967: 159). However in view of the possibility of not getting response from some of the
subjects, the calculated sample size of 32 for subjects in the managerial staffs group was
increased slightly to 40, and that of subjects in the operatives group was increased to
150, This is to ensure adequate return at the initial contact, thereby reducing the need
for supplementary field activity which would normally follow drastic shortfalls in returns. ".
3.7 SAMPLING PROCEDURE
To ensure equitable representation of the respondents from the selected Hotel and
Catering firms a proportional stratified random sampling was employed. The
stratification plan was based on the nunlber of employees of different categories (Fig.11)
in the selected companies,
Appropriate quota for each sample unit was determined based on 40 respondents
from the managerial staffs group and 150 respondents from the operatives group who
were to participate in the study. Thus a total of 190 questionnaires were equitably
distributed to random sample of respondents in the managerial staffs and operatives
group.
3.8 STATISTICAL TECIINIQUE
The data generated from the field survey were interpreted using the percentage
technique. The chi-square method of hypothesis testing was used to verify the
hypothesis. The chi-square foimula is given as follows.
X2 = (Fo - FeI2 Fe
Where, Fo = observed frequency of an event
Fe = expected frequency of an event
The chi-square technique was suitable for the analysis because the number of
response expected can be readily quantified. Also, chi-square is a non-parametric
statistical method, and therefore ideally suitable for the analysis of nominal scale data
e.g. sex, perception etc. Its objective normally is to test for independence or absence
of independence among nominally grouped data. It was specifically used in this case to
find out if there is any significant relationship between:
i) employee attraction and retention
ii) manpower turnover and absenteeism;
iii) employee level of commitment;
iv) employee morale
and fringe benefits in the Hotel and Catering industry.
3.9 QUESTIONNAIRE DESIGN
One of the instrument used in this study is the close-dended structured
questionnaire which was divided into five sections. Questions in the first four sections
were designed to address aspects of the hypotheses, while the last section was on the
respondents profile. To allow for a good response from the respondents, multiple choice
type of questions were appiied on the questionnaire. This therefore allowed the use of
statistical methods in analyzing the data collected, which in turn aided the researcher in
testing the research hypotheses.
A questionnaire is usually influenced by three type of errors which are surrogate
information error, non-response error, and as Bennett (1991:85) noted, "even when
reasonable response rates (however defined are achieved . . . the resulting data may be
biased. However, great care were taken by the researcher to reduce these errors to the
barest minimum.
3.10 QUESTIONNAIRES ASSUMPTIONS
The researcher made the following assumptions concerning the questionnaire.
i) That the questionnaire *would elicit the needed idolmation
ii) That the respondents are willing and would be able to complete the questionnaire.
iii) That the respondents will understand the questions.
iv) That the questionnaire would be distributed to the right people capable of
providing the necessary data.
3.1 1 QUESTIONNAIRE DISTRIBUTION AND ORGANIZATIONAL STATUS
OF RESPONDENTS
Generally, the reaction of the subjects to the study was favorable. the operatives
in particular demonstrated tremendous zeal and curiosity in demanding and completing
the questionnaires. Out of the 40 questionnaires distributed to the subjects in the
managerial staffs category, 35 were returned, while in the operatives category 146 were
returned out of 150 distributed. These returns in terms of response rate amounted to
88 % and 97 % respectively.
These questionnaires were checked for possible mistakes and some of them were
found to be poorly completed that they could not be used for the purpose of the study.
At the end of the scrutiny exercise 34 and 140 questionnaires were deemed usable in the
managerial staffs and operatives category respectively. This represented 85 % and 93 %
of the administered questionnaires in each case.
Distribution of questionnaires to the participating firms was done on a quota basis
depending on the firms staff strength. Table 3.11a reveal the characteristics of the
participating firms in terms of staff strength, ownership status, and the number of
questionnaires assigned.
'
3) Modern Model Hotefs (Modotcls)
4) Zodiac Hotels Ltd
5) The Genesis Restaurant
6) QuixotelslPalcia Guest House
Table 3.IIa Characteristics of the Participating Hotels and Caterlng Firms
Private Owned 1 I 37
r
HotellCatering Firm
1) Nike Lake Resort Hotel
2) Hotel Presidential
11 Total 1 I SO4 I 190
Ownership Control
Stare G o v e r ~ ~ e n t Owned
State Government Owned
8) Royal Palace Hotel Ltd
9) Raya Restaurant
10) Jook Hotel & Towers
An examination of the table reveals that the two state government owned Hotels
participating in the study received a 'lion share' of the questionnaire in the two broad
categories of the subjects. A total of 77 questionnaires were distributed to workers in
these two Hotels. This represent more than 40% of the sample. The other ten
participating Hotel and Catering firms which are privately-owned shared the remaining
60%.
Staff Strength
L 10
95
n
Naof Questionnaires
43
40
62
I!
27
22
2
6
Table 3.IIb Organizational Status of Respondents
I Respondents I Usable Returns
1 Sample Number ( Rate(%)
Managers I 20
Total (Managerial Staffs) 1 40 1 35 I 88 1 34 I 8s
I I I I I 17 1 85 1 17 1 100
Senior Smffs 20
Table 3.IIb gives the respondents in tenns of their position in their organization.
An examination of the table reveals that of the subjects in the managerial staffs category
17 belong to the manager level, while 18 belong to the senior staff level. This represents
85% and 90% respectively in terms of response rate.
On the whole, there were 181 respondents, representing 95% of the sample, out
of 190 distributed questionnaires for the two broad categories. From the returns, 7 were
rejected leaving leaving a balance of 174 questionnaires representing 92% of the sample.
I I I I I 18
Operatives
90 I
I50
17
146 97
94
140 93
CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
The methodology used for generating data for this study was explained in chapter
three. The survey instrument used were questionnaires and interview. The data gathered
from the questionnaires were empirical in nature and wilI 'be used for testing the
hypotheses. The data from the interview instrument were directed mainly to address the
first issue in the study objectives which is the identification of the fringe benefits that are
operational in the hotel and catering industry in Nigeria. Though selected hotel and
caiering firms in Enugu urban were chosen as the sample for study, the findings were
assumed to be equally applicable in other similar firms in the sector since the sample size
was assumed to be an exact replica of the population or the universe which it was meant
to represent.
Some of the fringe benefits identified as operational in the hotel and catering
industry are:
9 iii)
v>
vii)
ix)
xi)
xiii)
xv)
Christmas bonu ii) Leave Allowance
Sick leave with pay iv) Car loan
Use of company car vi) Transport allowance
House loan viii) House rent allowance
Retirement pay x) Free rncals
Subsidized meal xii) Free medical services
Maternity Ieave xiv) Music with work
Shift premium
It was however discovered from the study that the extent to which these be~iefits
are available differs in the different firms studied. State government owned hotels have
most of these benefits in place more than the private owned hotels.
46
Most private owned hotels ignore some of these benefits, giving only those that
may be said to be legaIly required like maternity leave and use of company car. This in
one way or the other would be affecting the performance of their workers.
It was also discovered that majority of these hotel and catering firms do not
involve their employees in choosing the items to be included in the fringe benefit
packages. This may be affecting the success of the existing benefits in achieving its
goals both for the employer and the employees.
The information reported here were gathered from the administrative officers and
personnel mangers of the hotel and catering films involved in the study. The general
impression from the information gathered was that fringe benefits schemes as they exist
in the firms studied were in a very poor state, and therefore need to be improved upon
before any steady development of the industry can commence.
The data generated through the questionnaire instrument were presented and
interpreted using the percentage technique, and the chi-square method of hypotheses
testing was used to verify the hypotheses.
The findings in this section shall be presented for easy analytical purposes under
four sub-headings.
Firstly, we shall show the respondents views on the impact of fringe benefit on
the attraction and retention of employees in the hotel and catering industry.
Secondly, we shall examine the relationship between fringe benefits packages and
employees level of commitment.
Thirdly, we shall examine the relationship between fringe benefits and
absenteeisdturnover.
Lastly, we shall show the respondents view on the iinpact of better fringe benefits
packages on the workers nlorale,
47
The presentation of these findings will be preceded 'by an exami~iation of the
demographic and other features of the respondents.
4.1 Denlographic Characteristics of the Respondents
The responses to questions on the profile of the participants in section E of the
questionnaire have been tabulated.
Table 4. l a have categorized these returns on the basis of the organizational status
of the participants. An analysis of the Table shows that only 29.41 % of the respondents
in the managerial staffs category had university degree, which seems to support the fact
of the problem definition - inability of the hotel and catering industry to attract qualified
personnel.
Table 4. l a Eclucational Qualification
Operatives Grand Ratc Options
Junior Staff Rate P/o Total (%)
Less than WASC
WASCIGCE
Diploma
Prof. Cert
B.Sc1B.A
Masters
20.58% had WASCJGCE.
Total 17
hile
2
5
3
4
3
The inability of the hotel and catering industry to att~act qualified personnel is
even
About 26 76 and 18 % had Diploma and Professional certificates respectively, w 17
2
5
4
3
2
1
34
2
7
9
6
6
4
100
5.88
20.58
26.47
17.65
17.65
11.76
140 100 174 100
79
48
5
8
- -
reflected more in the operatives category, where more than half of the subjects (56.43 %)
do not have GCEJWASC. About 4% and 6% had diploma and professional certificates
respectively, while about 34% had WASC/GCE. None of the respondents in this
category had university degree.
Table 4.lb Age and Sex Distribution
Brackets
Respondenrs Below 20
Managers
11 Operatives 1 6 I 101 I
I Sex
Total 6 108 33 I
10 - 49 Above 49 Male Female
3 1 1s 2
Table 4.lb gives the age and sex distribution of the respondents. From the
analysis, it is evident that the male participants out number their female counterparts.
As many as 28 (82.35%) of the subjects in the managerial staff category were male,
while in the operatives category, 98 (70%) were male, the rest were female. Therefore
o d y a handful of females, 18% and 30% of the managerial staff and operatives category
respectively participated in the study.
Age-wise, majority of the respondents in the managerial staff category were aged
between 30 and 39 years. They represent 56% of the subjects in this group. They were
followed by those in the age bracket 40 - 49 years, and lastly by those above 49. These
represented about 9% and 3% of the respondents in this category respectively.
Among the operatives, those in the age bracket 20 - 29 years, topped the list with
101 subjects representing 72.14% of the respondents in this group. They were followed
by those in the age bracket 30 - 39,40 - 49, above 49 and below 20 years of age in that
order. These represented lo%, 8%, 6% and 4% of the respondents in this group
respectively.
The research was also interested in the participants length of service in the
participating firms. This findings are recorded in Table 4 . 1 ~ .
Table 4.lc Length of Service Distribution
Managerial Staff I I
11 ( Manager I Senior Staff 1 TotaI
11 19-19 Years 1 - 1 1 1 1
> 5 Years
Race 56 1 Junior Sraff I Ratc % 1 Total
1 I I 10
20 YearslAbove
Total
An Analysis of table 4. lc revealed that among the respondents in the managerial
staff group, 15(44.12%) have worked in their various firms for less than 5 years,
13(38.24%) for between 5 and 9 years, and 5(14.7%) for between 10 and 14 years, and
only 1 (3.00%) for between 15 and 19 years. None of the respondents in this category
have worked for more than 20 years.
Among the operatives, non have worked in their for more than 20 years.
3(2.15%) have worked for between 15 and 19 years, 10(7.14%) have worked for
between 10 and 14 years, and 64(45.71%) for between 5 and 9 years in their different
hotel and catering firms. 63 of the respondents in this category representing 45% of
them have worked in this finn for Iess than 5 years.
Considering the effect the prevailing harsh economic condition in the country may
5
17
15
17 34
50
be having on the workers perception of the fringe benefits available in their organization,
this study also got interested in the marital status of the respondents to find out the
proportion of them with families to cater for. These it is supposed will see their fringe
benefits packages as a further means of ameliorating their rising needs.
The findings are presented in Table 4. ld.
Table 4. ld Marital Status Distribution
Marital Status Managerial Staff
Rate % Total (%) I I
Operatives
100 I 174 1 100 1 rity of the respondents I
Manager
Single
Married
To ta 1 17
in both subjects category are married. Specifically, 3l(gl. 18%) of the respondents in
the managerial staff group are married, while 3 (8.82%) are not.
In the case of the subjects in the operatives category, 84 of them representing
60% are married while 56 representing 40% are single.
The respondents were therefore expected to have interest in the fringe benefits
available to them as members of their various organizations.
Having covered these preliminary grounds, we now focus our attention on the
four sub-headings under which the findings would be verified.
4.2 FINDINGS ON EMPLOYEES ATTRACTION AND FWTENTION
The first question in this section was intended to discover the rationale behind
work by the respondents. The particular question was, "Why do you work?" The
responses to the question are summarized in Table 4.2a.
the findings in Table 4. Id reveals that inaj
Senior Staff
1
16
17
Junior Staff
56
$4
140
I Total Rare %
3 8.82
3 1
34
91.18
100
Table 4.2a Response to the Rationale behind the Wbrk of the Respondents: "Why
do you Work?
From the response gathered, it was clear that majority of the respondents work
for money. This however is not surprising considering the countries level of
development, and standard of living. The findings also agree with Abraham Maslow's
need hieraracy (Fig.l), for majority of Nigerian are still struggling to meet the basic
physiological needs. And, under such a situation, monetary incentives can be used to
Response Options
To Avoid Idleness
For Recognition
For Money
To Forge Ahead in Life
To Contribute to National Development
Total
motivate the workers to higher performance.
As is shown in the table, 94.83% of the overall respondents (165) work for
money, 3 representing 1.72% work for recognition, and 5 representing 2.87% of the
respondents says they work to forge ahead in life. Only 1 of the respondents, in the
managerial category, indicated that he works to contribute to national developn~ent. This
in a way reflected the usual attitude to work among Nigerians, (Akpala, 1990: xxiv).
It would
Managerial Staff
Total
3
28
2
1
34
Manager
2
13
1
1
17
Senior Staff
1
15
1
17
- Rate %
3
82.35
5.88
2.95
100
Operatives
Junior Staff
137
3
140
Rate %
97.86
6.
2.14
100
Grand
Total
3
165
5
1
174
Rate
(%)
1.72
94.83
2.87
0.58
100
52
therefore be right to think that better fringe benefits packages (either in monetary or non-
monetary terms) will help to motivate these workers and enhance their performance.
The next question in this section was intended to find out what attracted the
employees to seek for employment in their various firms. The responses received are
summarized in Table 4.2b.
Table 4.2b. "What attracted you to seek for Employment in this Organization
Response Managerial S~aff Options
I
I I I Manager I Senior Staff I Total I Rate % I Junior Staff
Fringe Benefiu 4 4 8 23.52
Working 5 3 8 23.52 Conditions
I
The responses in Table 4 . 2 ~ shows that majority of the respondents were attracted
to their organization because of fringe benefits. The response rate here was 55.75% of
the subjects in the two categories. This is followed by Basic Salary with a response rate
of 28.74% and then the job itseIf with a response rate of 0.07%.
0.05 % of the respondents in the two categories indicated that they were attracted
to seek for employment in their organization because of d ~ e job itself, and 0.03%, in
order to avoid idleness.
The next question in this section was aimed at finding out whether fringe benefits
The Job ilself
To avoid Idleness
Total
2
3
17
I
14.71
14.71
100
3
2
17
5
5
34
20
18
140
14.29
12.86
100
25
23
174
14.37
13-22
100
53
is helping to retain employees in the hotel and catering industry. The responses obtained
are summarized in Table 4 . 2 ~ .
Table 4 . 2 ~ "Would you leave for another orgariizatiorl with better fringe benefits
schemes if such an opportunity presents itself"
Grand
Total
Response Options
Yes
No
I don't Know
Total
From the responses gathered, it is clear that fringe benefits actually k l p to retain
the employees in their various organization, as most of them will readily opt for another
firm with better fringe benefits schemes if such an opportunity presents itself.
From the table (4 .2~) 164 of the respondents in the two categories represeilting
94.25% indicated that they would better Ieave for another organization with belt fringes,
while 4 of them representing 2.30% indicated to the contrary. 3.45% of the overall
respondent could not say their opinion on the issue.
The last question in this action was to find out what the employees feel about the
remuneration packages offered them in their organizations. The responses are recorded
in Table 4.2d.
Managerial Stan
Total
30
3
1
34
Manager
16
1
17
Stnior Staff
14
2
1
17
Rate %
88.24
8.82
2.94
100
Operatives
Junior Sfafr
134
1
5
140
Rate %
95.71
0.71
3.58
100
Table 4.2d. "What do you consider as the most important aspect of your
remuneration? I'
11 Response Options
Basic Salary
Fringe Bcnefits
I don't Know
Total
Managerial Staff I I s Operatives
Junior Staff Manager Senior Staff
Gran d
Rate % Total
From the responses gathered, it was clear that majority of the respondents
Total
regarded fringe benefits highly. 11 1 of the overall respondents, representing 63.79% of
Rate %
the total subjects indicated it as the most important aspect of their enumeration. 57 of
the respondents representing 32.76% indicated basic salary while 3.45% of them couid
not say which of the two basic salary and fringe benefits is the most important aspect of
their remuneration. The findings here appear to be in line with the findings of Table
4 . 2 ~ and seems to confirm it.
4.3 Findings on Employee Level of Coinmitment
The first question in this action was aimed at finding out how the employees feel
about the fringe benefits schemes in their organization. The responses obtained are
recorded in 'Table 4.3a.
Table 4.3a "Are you Satisfied with your Organizations Fringe Benefit Schemes?"
Managerial Staff 1
1 No 1 1; 1 I don't Know
Total 17 17 34 100
Manager
3
Operatives
Junior StaIi Senior Staff
1
From the responses it can be seen that majority of the respondents were not
satisfied with the fringe benefits schemes of their firms, and this will likely affect their
performance. 156 of the respondents in the two categories representing 89.66% of the
subjects indicated that they were not satisfied with their firms fringe benefits schemes.
11 representing 6% indicated that they were satisfied, while 7 representing 4.02% could
not say their opinion on the issue.
The next question in the section seeks to find out the level of commitment shown
by the respondents to their work in the firms. The responses obtained are shown in table
4.3b.
Table 4.3b "What level of Commitment do you show to your work in the
Organization?"
11 Response I Managerial Staff
Total
4
I Operatives I
Rale %
11.76
I
Total Rate % I lunior ~ t a . I ale %
Grand
Total
The result of the responses reveal that majority of the respondents show only low
to average Ievel of commitment to their work. 102 of the respondents in the two
categories, representing 58.62% of the subjects show average Ievel of commitment, while
64 representing 36.78% of the subject show low level commitment. Only 8 of the
respondents in the two categories, representing 4.6% of the subjects show high level of
commitment to their work. This response distribution here may be attributed to the poor
fringe benefits schemes of these fms.
The last question in this section was aimed at confirming or disproving the
findings in Table 4.3b,. It seeks to find out how improved fringe benefits schemes will
affect the employees level of commitment. The response obtained are tabulated in Table
4 . 3 ~ .
Table 4 . 3 ~ "Do you think that Improved Fringe Benefits Progranimes will
increase your level of commitment?''
Response Options It-----
I can't say I I
I -
Managerial Staff Operatives e i
The result of the responses reveal that improving the fringe benefits schemes of
these firms will help to improve the employees level of commitment. An analysis of the
table shows that 153 of the respondents in both categories of subjects, indicated that
improved fringe benefit programmes will increase their level of commitment in their
organization. They represented 87.93 of the respondents. 13 representing 7.47% of the
respondents indicated that improving fringe benefits programmes will not affect hei r
level
of commitment, while 8 representing 4.60% could not say their opinion on the issue.
4.4 FINDINGS ON ABSENTEEISM AND TURNOWK
The first question in this section was aimed at finding out the rate of absenteeism
among the workers (respondents). The responses obtained are recorded in Table 4.4a.
An analysis of the responses obtained reveals that majority of the subjects have
been absent from work at one time of the other, as was.
Table 4.4a "Have you ever been absent from work?"
11 Response Options I Managrial Staff I I 0penlives I I Grand I R n k 11
Table 4.4b
Indicated by 132 of the respondents in both categories, represent 75.86% of the
subjects. 13.22% of the respondents indicated that they have never been absent from
work, while the same percentage of the respondents, 10.92%, indicated that they cannot
remember whether they have been absent from work or not.
The next question in the section was aimed at further verifying the extent of
absenteeism among the respondents. The response obtained are recorded in Table 4.4b)
Table 4.4b . "If the answer to (1) is 'Yes', how frequent is it?"
Response Options I Managerial
Often
Iusr on a Few Occas~on 1 Total
The response to the question of Table 4.4b shows that majority of the respondents
Staff
Snior Staff
3
17
who indicated 'yes' to the first question have only been absent on a few occasion.
95.83 % of such respondents indicated so. Therefore, the poor fringe benefit schemes of
Total
1 1
---
the firms may not necessarily be connected to the incidents of absenteeism among the
workers.
R a n %
6.25
The next question was intended to find out why the respondents may want to leave
their firms if they were to do so. The responses gathered are recorded in Table 4 . 4 ~ . I
Table 4 . 4 ~ . "If you are to leave your organization, which of the following would
Operatives
Junior Staff
12
be the major reason?"
II Manager Senior Staff Tohl Rate % I I I I
Rate %
3.57
Insufticienr Pay 4 6 10 29.41
lnsufficienr 5 4 9 26.47 Fringe Benefit
11 Advancement I
Grand
Total
3
11 Frustration 1 3
Rate
(%)
4.17
Operatives
Junior Staff
37
Rare %
Grand
Total
47
48
36
43
174
Rate
(%)
27.01
17.59
20.69
24.71
100
From the responses recorded in Table 4.4c, majority of the respondents gave
'insufficient fringe benefits' as the major reason why they would leave their organsition.
The response rate here was 27.59%. This is followed by 'insufficient pay with a rate
of 27.01%, 'frustration' with a rate of 24.71%, and finally, 'no prospect for
advancement' with a rate of 20.69%. It may be assumed from these results that fringe
benefits may be related to manpower turnover in the hotel and catering industry. This
is further supported by the responses to the next question which was aimed at finding out
if the respondents would have Ieft their organization if the level of fringe benefits was
very low. The responses gathered are recorded in Table 4.4d.
Table 4.4d "Would you have left the organization if the level of fringe benefits
was very low?"
Manageria! Staff I ~ p c n ~ i v r s I I
Yes I r i I 1 1 I 2 2 164.71 ( 1 2 2
Manager I Senior Sraff 1 Total I Rate % J ~ ~ n i o r Staff
From the responses, it is clear that fringe benefits have some relationship with
turnover. The nature of this relationship wit1 however be examined in the next segment
of this chapter.
144 of the respondents in the two categories indicated that they would have left
their organization if the existing fringe benefits level was very low. This represents
87.76% of the subjects. 14 of the respondents representing 8.04% of the subjects
indicated to the contrary, while 16 representing 9.20% could not say their opinion on the
No
I can't say
Total
2
4
17
I
5
If
3
9
34
8.82
26.47
100
11
7
140
issue.
4.5 FINDINGS ON EMPLOYEE MORALE
The first question in this section was to find out how the empIoyees feel working
in their various organizations. The responses to the question are summarized in Table
4.5a.
Table 4.5a: "Do you feel Satisfied Working in your Organization?"
Managerial Staff I 1 I Manager I Senior Sraff
Yes I 10 1 4
I don't Know 1 2 1 1
Total
Total
1 operatives 1 1 ~r imci
Rare % Junior Staff Rate % Total
The responses in Table 4.5a reveals that majority of the respondents do not feel
satisfied working in their organization. Almost half of the respondents (ie. 50%)
indicated this. 67 of the respondents representing 38.51% of the subjects indicated that
they are satisfied working in their firms, while 20 of the respondents representing
11.49% of the subjects could not say their opinion on the issue.
The next question in this section was aimed at finding out the respondents
perception of their organizations fringe benefit schemes. The responses are recorded in
Table 4.5b.
17 17
Table 4.5b: "How do you perceive the fringe benefits schemes provided in your
Organization?"
Response Options I
I] Satisfactory 1 3 1 2 1 5
Very Satisfactory
Manager
fus! Adequate
Unsatisfactory
Operatives . el Very Unsatisfactory
Total
From the responses in Table 4.5b, it could be seen that majority of the
respondents perceive their fringe benefits schemes as unsatisfactory. 115 of the
respondents representing 66.09% of the entire subject indicated this. 47 of the
respondents representing 27.01% of the subjects perceive their organizations fringe
benefits schemes as just adequate, while 12 of the respondents representing 6.60% of the
subjects perceive their organization's fringe benefits schemes as satisfactory. None of
the respondents perceive their organizations fringe benefit schemes as very satisfactory
or very unsatisfactory.
The results show that the empIoyees may not be impressed by the level of fringe
benefits schemes in the industry, and this will likely be affecting their level of
performance.
The next question posed at the respondents was aimed at finding out their attitude
towards their organization and its goals. The responses obtained are recorded in Table
4 . 5 ~
Senior Staff
4
10
Toral
- 17
4
I I
8
2 1
17 34
62
Table 4.5~. "What is your attitude to your organization and it's goals?"
Response Options Managerial Staff I I I Manager 1 Senior Staff
Favourablelnot very 3 7 strong
FavwrabIdSometim es Hostile
Total
From the responses recorded in Table 4.5c, majority of the respondents indicated
that their attitude to their organization was sometimes faveurabIe and sometimes hostile.
88 of the respondents representing 50.57% of the subjects indicated this. 52 of the
respondents representing 29.89% of the subjects indicated that their attitude towards their
firm and it's goals was favourable but not very strong. 26 representing 14.94% indicated
that their attitude towards their firm was hostile.
It is however felt that if the fringe benefits schemes of these organizations are
fantastic, majority of the respondents would have indicated favourable attitude towards
their organization and its goals. This perception is further strengthened by the responses
to the next question which was aimed at finding out whether provision of fringe benefits
affect the respondents (employees) performance. These responses are summarised in the
table 4.5d.
Table 4.5d "Do you think that improved fringe benefits schemes will affect your
job performance"?
Response Options
Yes
No
1 don't Know
From the responses recorded, it was obvious that improved fringe benefit schemes
will affect the job performance of the respondents. All the respondents representing
100% of the subjects indicated this. To find out the nature of this effect whether positive
or negative, the next question was posed at the respondents. The responses to the
Total
question are recorded in table 4.5e.
Table 4.5e. "If the answer to '4' is yes, how?
Managerial Staff
17
From the responses recorded, it was clear that improved fringe benefit schemes
will psoitively affect the job performance of the respondents as is indicated by 100% of
them.
Total
25
4
5
Manager
I1
3
3
-
Senior Slnff
14
1
2
17
Rate %
76.48
11.76
11.76
34 100
Response Options
Positively
Negatively
Total
Operatives
Junior Staff
128
9
3
-
Rate %
100.00
100
140
Rate %
91.43
6.43
2.14
100 I74 100
Total
34
34
Operatives
Junior Staff
140
140
Managerial Staff
Manager
17
17
Grand
Total
153
13
8
Rate %
100
100
Scnior Stalf
17
17
Rare
(%)
87.93
7.47
4.60
Grand
Total
174
174
64
4.6 TElFTING OF HYPOTHESES
In this segment of the chapter, attempt was made to test the hypotheses formulated
to guide data collection in the field. These research-problem-oriented hypotheses
(alternative hypotheses) were re-structured to statistically oriented-hypothesis (null
hypothesis) to enable the use of statistical technique in verifying them.
Chi-square technique was employed to verify the hypotheses.
The chi-square formula is given as:
X2 = (Fo - Fe)' Fe
Where, Fo = observed frequency Fe = expected frequency
Decision Rule
The criteria for accepting or rejecting the null hypotheses (H,) are:
Accept Ho if X2, S X2, ie X2 calculated 5 X2 tabulated
Reject H, if X2, 2 X2, ie X2 calculated 2 X2 tabulated
This means accept the null hypothesis if chi-square calculated is less than or equal
to expected chi-square and reject the null hypothesis if the chi-square calculated is greater
than or equal to expected chi-square. The level of significance (a) used was 5% or 0.05.
Hypothesis One
Null Hypothesis (H,): Fringe benefits are not helpful in attracting
employees to the Hotel and catering industry.
Alternative Hypothesis (H,): Fringe benefits are helpful in attracting employees
to the Hotel and Catering industry.
This hypothesis was tested using table 4.2b
Table 4.2b
i) Operatives
i) Managerial Staff
Response Options r==
r
Fringe Benefirs
The jab itself
1
To avoid idleness 117
Response Optims
Basic Salary
Fringe Benefits
Working Cordilion
TXe job itself
To avoid idleness
Toral
Observed Frequency (Fb) Expected Frequency (Fe} (Fo - Fe) (Fo -Fe)' l -T-
Expected Frequency {Fe)
9.77
18.95
1 .56
2.54
1.17
Observed Frequency (Fo)
I D
f 4
5
3
2
34
-
X2 calculated = 2.3 154
For calculations of the expected frequency values refer to Appendix iv, table 4.2b
Degree of freedom = (c - 1) =(5 - 1) (2 - 1)
Level of Significance (a) = 0.05
$Fo - Fe)
0.23
-4.95
3.44
0.46
0.83
(Fo -Fell
0.0329
24.5025
11.836
0.21 16
0.6889
(Fo - Fe)' Fe
0.0054
1.2930
7.5856
0.0833
0.5888
9.5561
Chi-square (X2) caIcu!ated: Managerial Staff= 9.5561 Operatives = 2.3154
Chi-square (X2) tabulated =
Acceptance Region
Total 11.8715 9.488
rejection region
X2 calculated > X2 tabulated (18.36) (9.488)
Decision: Reject the null hypothesis (H,)
Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2
tabulated. Otherwise do not reject, the null hypothesis which says that, "Fringe benefits
are not helpfit1 in attracting employees to the Hotel and Catering industry", was rejected
and the alternative hypothesis which says that "fringe benefits are helpful in attracting
employees to the Hotel and Catering industry was accepted based on the fact that:
X2 calculated > XZ tabulated
(18.36) (9.488)
Conclusion:
The research problem oriented hypothesis (H,) was accepted in favour of the
statistically oriented hypothesis (H,). Therefore the assertion that fringe benefits are
helpfuI in attracting employees to the Hotel and Catering industry is correct.
Hypothesis Two
Null Hypothesis (H,): Fringe benefits are not helpful in retaining
employees in the Hotel and catering industry.
Alternative Hypothesis (13,): Fringe benefits are helpfut in retaining employees
in the Hotel and Catering industry.
This hypothesis was tested using table 4 . 2 ~
Table 4 . 2 ~
i) Manageria! Staff
For calculations of the expected frequency values refer to Appendix iv, table 4.2b
I Response Options
Yes
No
1 don't know
Toral
i i) Operatives
Degree of freedom = (c - 1) =(3 - 1) (2 - 1) =2.1= 2
Level of Significance (a) = 0.05
X2 calculated = 6.4743
Observed Frequency (Fo)
30
3
1
34
+
X2 calculated = 1 .S684
Respnse Options
Yes
NO
I don't know
Toral
Expected Frequency (Fe)
32.03
0.78
1.17
Observed Frequency (Fo)
134
1
5
34
Expected Frequency (He)
131.95
3.22
4.83
(Fo - Fe)
-2.05
2.22
4 1 7
(Fo - Fe)
2.05
-2.22
0.17
(Fo -Fe)z
4.2025
4.9284
0.0289
(Fo - Fe)' Fe
0.0318
1.5306
0.0060
1.5684
(Fo -Fe)z
4.2025
4.9284
0.0289
(Fo - Fe)l Fe
0.1311
6.3 185
0.0247 - 6.4743
Chi-square (X2) calculated: Managerial Staff= 6.4743 Operatives = 1.5684
Total 8.0427
Chi-square (X2) tabulated = 5 .XU47
Acceptance Region
X2 calculated > X2 tabulated (7.28) (5.991)
Decision: Reject the null hypothesis (H,)
Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2
tabulated.
Otherwise do not reject, the null hypothesis which says that, "Fringe benefits are not
helpful in retaining employees in the Hotel and Catering industry", was rejected, and the
alternative hypothesis which says that "fringe benefits are helpful in retaining employees
in the Hotel and Catering industry was accepted based on the fact that:
X* calculated > X2 tabulated (7.28) (5.991)
Conclusion:
The research probIem oriented hypothesis (H,) was accepted in favour of the
statistically oriented hypothesis (H,). Therefore the assertion that fringe benefits are
helpful in retaining employees in the Hotel and Catering industry is correct.
Hypothesis Three
Null Hypothesis (H,): There is no direct relationship between fringe
benefit 'packages' and employees level of
committment . Alternative Hypothesis (H,): There is a direct relationship between fringe benefit
'packages' and employees level of cornmittment.
To test this hypothesis we used table 4 . 3 ~
Table 4 . 3 ~
Xz calculated = 9.2278 i) Operatives
i) Managerial Staff
Response Options
Yes
No
I don't know
Total
Observed Frequency (Fo)
25
4
5
34
Response Options
Yes
NO
I don't know
Toral
XZ calculated = 9.2278
Expected Frequency (Fe)
123.10
10.46
6.44
Obscned Frequency (Fo)
128
9
3
I 40
Expected Frequency (Pe)
29.9
2.54
1 S 6
(Fo - Fe)
4.9
- I .46
-3.44
(Fo - Fe)
-4.9
1.46
3.44
(Fo -Fe)'
24.01
2.1316
1 1.8336
(Fo -Fe)'
24.01
2.1316
11.8336
..- ~
(Fo - Fe)l Fe
0.1950
0.2038
1.8375
2.2363
(Fo - Fe)' Fe
0.8030
0.8392
7.5856
9.2278 - -
For calculations of the expected frequency values refer to Appendix iv, table 4 . 3 ~
Degree of freedom = (c - l )=(r - 1)
Level of Significance {a) = 0.05
Chi-square (X2) calculated: Manageria! Staff= 9.2278 Operatives = 2 -2363
Total 11.4641 Chi-square (X2) tabulated = 5.99147
Acceptance Region
rejection region
X2 = 5.991 a = 0.05 X2 calculated > X2 tabulated
Decision: Reject the null hypothesis (H,)
Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X2
tabulated,
Otherwise do not reject, the null hypothesis (H,) which says that, "There is no direct
relationship between fringe benefits 'packages' and employees level of committments",
was
7 1
rejected, and the alternative hypothesis which says that, "There is a direct relationship
between fringe benefits 'packages' and employees level of committment" was accepted,
based on the fact that:
X2 calculated > XZ tabulated
(10.59) (5.991)
Conclusion:
The research problem oriented hypothesis (H,) was accepted in favour of the
statistically oriented hypothesis (H,). Therefore, there is a direct relationship between
fringe benefits 'packages' and employees level of committment.
Hypothesis Four
Nu11 Hypothesis (HJ: Absenteeism among the workers will not tend to be
inversely related to the firms level of fringe
benefits.
Alternative Hypothesis (H,): Absenteeism among the workers will tend to be
inversely related to the firms level of fringe benefits.
Table 4.4a was used to test this hypothesis
Table 4.4a
i> Managerial Staff
Response Options
Yes
No
1 Can't Remember
Total X i calculated = 0.1955
Expected Frequency (Fe)
25.79
4.49
3.71
Observed Frequency (Fo)
26
5
3
34
(Fo - Fe)
0.21
0.5 1
-0.71
(Fo -Fe)'
0.0441
0.2601
0.5041
(Fo - Fe)I Fe
0.0017
0.0579
0.1359
U. 1953
For calculations of the expected frequency values refer to Appendix iv, table 4.4a
Degree of freedom = (c - 1) =(r - 1)
(3 - 1)(2 - 1) 2.1 = 2
ii) Operatives
Level of Significance (a) = 0.05
Chi-square (X2) calculated: Managerial Staff = 0.1955 Operatives 0.0475
Total 0.2430
Response Options
Yes
N O
I Can't Remember
Total
Chi-square (X2) tabulated = 5
X2 calculated = 0.0475
(Fo -Fe)'
0.0441
0.2601
0.5041
rejection region X2 = 5.991 cx = 0.05
(Fo - Fe)z Fe
0 . W 4
0.0141
0.0330
0.0475
Observed Frequency (Fo)
106
18
16
140
X2 calculated > X2 tabulated (5.06) (5.991)
Expected Frequency (Fe)
106.21
18.51
15.29
(Fo - Fc)
-0.21
-0.51
0.71
Decision: Reject the null hypothesis (H,)
Since the decision rule is to reject the null hypothesis (H,) if X2 calculated 2 X*
tabulated, Otherwise do not reject, the null hypothesis (H,) which says that,
"Absenteeism among the workers will not tend to be inversely related to the firms level
of fringe benefits" was not rejected, but accepted based on the fact that.
X2 calcuIated > X2 tabulated (5.06) (5.991)
Conclusion:
The statisticalty oriented hypothesis @I,) was accepted in favour of the research
problem oriented hypothesis. Therefore, absenteeism among the workers is not related
to the firms level of fringe benefits.
Hypothesis Five
Null Hypothesis (Ha: Manpower turnover in the Hotel and Catering industry wil[ not
tend to be inversely related to the firms level of fringe benefits.
Alternative Hypothesis (H,): Manpower turnover in the Hotel and Catering
industry will not tend to be inversely related to the firms level of fringe benefits.
Table 4.4d was used to test this hypothesis
Table 9.46
i) Managerial Staff
11 Response Opiona I Obwrved Preq~cricy (Fo) I ExP(cLI Frequency (K) I (FO - FI) I (Fo - P c ) ~ I (Fo - Fe).
Total 34 19.56
X2 calculted = 12.3730
ii) Operatives
X2 calculated = 3.0086 For calculations of the expected frequency values refer to Appendix iv, table 4.4a
Response Options
Yes
NO
I Can't Say
Total
Degree of freedom = (c - I)=@ - 1) (3 - 1)(2 - 1) 2.1 = 2
Level of Significance (a) = 0.05
Observed Frequency (Fo)
122
11
7
174
Chi-square (X2) calcu1ated: Managerial Staff= 12.3730 Operatives 3.0086
Total 15.3816 Chi-square (X2) tabulated = 5 .!I9147
Acceptance Region
Expected Frequency (Fe)
115.86
11.26
12.87
rejection region
(Fo - Fe)
6.14
-0.26
-5.87
(Fo -Fe)Z
37.6996
0.0676
34.4569
(Fo - Fe)2 Fe
0.3253
0.0060
2.6773
3.0086
X2 calculated > X2 tabulated (19.56) (5.991)
Decision: Reject the null hypothesis (H,)
Since the decision rule is to reject the null hypothesis if X2 calculated 2 X2
tabulated,
Otherwise do not reject, the null hypothesis (H,) which says that,
"Manpower turnover in the Hotel and catering industry will not tend to be inversely
related to the firms level of fringe benefits" was rejected, while the alternative hypothesis
(H,) which says that, "Manpower turnover in the Hotel and Catering industry will tend
to be inverseIy reIated to the firms level of fringe benefits", was accepted based on the
fact that
X2 calculated > X2 tabulated
(19.56) (5.991)
Conclusion:
The research problem oriented hypothesis (H,) was accepted in favour o f the
statistically oriented hypothesis (H,). Therefore, the assertion that manpower turnover
in the Hotel and Catering industry will tend to be inversely related to the firms level of
fringe benefits is correct.
Hypothesis Six
Null Hypothesis (H,): Better fringe benefits 'packages' do not have a positive impact on
the workers morale.
Alteruative Hypothesis (H,): Better fringe benefits 'packages' have a positive impact on
the workers morale. This hypothesis was tested using table 4.52
Table 4 . 9
0 Managerial I I I
Response Options I Observed Frequency I Expected Frequency (Fe) ( (Fo - Fe)
Favourable not very strong 10 10.16 -0.16 I I I
Favourable 4 5.08 -1.08
Favourable Hostile I 1s 1 17.20 1 -2.20
I I I
Hostile 5 1.56 3.44
Total
Degree of freedom = (c - l )=(r - 1)
il) Operatives
X1 ca
34
Respvnse Options
Favwrable
Favourable not very strong
Hostile
Favourable Hostile
Total
-
X2 calculated = 1 .!I623 For calculations of the expected frequency values refer to Appendix iv, table 4 . 5 ~
Observed Frequency (Fo)
22
42
3
73
140
Expected Frequency (Fe)
20.92
41.16
6.44
70.80
(Fo W)
1.08
0.16
-3.44
2.2
(Fo -Fey
1 .I664
0.0256
11.8336
4.84
4Fo - Fe)l Fe
0.0558
0.0006
1 .a375
0.0684
1.9623
Level of Significance (a) = 0.05
Chi-square (X2) calculated:
Acceptance Region
rejection region
X2 calculated > X2 tabulated (29.72) (7.815)
Decision: Reject the null hypothesis (H,)
Since the decision nhe is to reject the null hypothesis if X2 calculated 2 X2 tabulated,
Otherwise do not reject, the null hypothesis (H,) which says that, "Better fringe benefits
packages do not have a positive impact on the workers morale" was rejected, and the
ahernathe hypothesis which says that, "Better fringe benefits packages have a positive
impact on the workers morale", was accepted based on the fact that X2 calculated >
X2 tabulated
Conclusion:
The research problem oriented hypothesis (H,) was accepted in favour of the
statistically oriented hypothesis (H,). Therefore, better fringe benefit packages will have
a positive impact on $e morale of the workers in the Hotel and Catering industry.
CHAPTER FIVE
SUMMARY RECOMMENDATION AND CONCLUSION
Having presented and analysed the data collected, and as well tested the
hypothesis in the previous chapter. The researcher in this last chapter of the work gives
a summary of the study, make some recommendation and draws some concIusions.
5.1 SUMMARY
This research study was prompted by the need to investigate an aspect of the
problem identified as militating against better performarlce by workers in the Hotel and
Catering industry in Nigeria, with the aim of establishing and assessing the extent of the
problem. An interpretative analysis of the data collected during the study resulted in the
major findings which are summarked below.
Summary of Major Findings
Guided by the objectives of this study, the major findings of the study are
summarized as folIows:
1) The Hotel and Catering industry in Nigeria do not really parade a good range of
benefit schemes for their employees.
2) Even the existing fringe benefit schemes are in a very poor state as they are not
reviewed from time to time, and are in inost cases ignored and not made available
to the workers. This has resulted to inability of the industry to attract, retain and
actuate personnel effectively and efficiently (see table 4.2b, 4 2 , 4.26).
3) The study revealed that a high percentage of the workers are not satisfied with
their present fringe benefit packages, and this has been affecting their
commitment to work (see table 4.3a, 4.3b and 4 3 ) .
3)
4)
5 )
6 )
i)
ii)
iii)
5.3.
80
As a way of enhancing better performance among the workers, some aspects of
these benefits should be earmarked for workers who perform exceptionally well
during a period.
Government monitoring agency should be set up to determine what the legally
required benefits should be, and ensure that all firms in the sector do colnply in
implementing them.
Efforts should be made to communicate what these benefits are to the workers
and also engage them in the process of determining what and what should come
under the 'package'.
The following factors should also be taking into consideration in implementing the
fringe benefit schemes:
There should be a base of satisfactory wage or salary, hours and working
conditions.
There should be a need for whatever should come under the package for it to be
appreciated by the workers.
Adequate plans should be made for the financing of the programme.
Conclusion
This study has attempted to appraise the impact of fringe benefits on the
performance of workers in the Hotel and Catering industry. By so doing, it has been able
to establish that poor fringe benefit schemes could serve a an impediment to better
performance by the workers, and consequently be a hinderence to the growth and
development of the sub-sector.
It has investigated the issue of attraction, retention and actuation of personnel in
the Hotel and Catering industry through the use of fringe benefits. In addition, it has
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Ugwu C. "Tourism in National Development" Tourism Today 1998,PP. 42-45
Newspaper Articles Adeoye, J.P. "The Place of Hotel and Catering Industry in Tourism Development". New Nigeria. May 24, 1977. P. 11
Agbetuyi, S. "How to revive Nigerian Economy". Business Guardian. September 28, 1998, p.25
Ekundayo, C. "Review of Workers Fringe Benefit ". Daily Times February 23, 1988, P. 11
Ifedi, C. "Revamping the Hotel Industry". Dailv Times. January 7, 1986, P.3
Obadafin, E. "Minimum Wage, Frequent Tax Payment". Daily Times November 21, 1998, P.5
Onyia, M.U. "Why the neglect in Hotel and Tourism". Observer. June 29, 1986, P.3
Shu'aibu M.K. "Hotel and Catering Services in Nigerian Economy". New Nigeria . June 26, 1979, p.12.
APPENDIX I INSTRUMENT A
INTERVIEW GUIDE
What is the number of people employed in your organization?
Do you have a personnel department?
Do you offer fringe benefits to your employees?
How do you instal fringe benefits in your organization?
i) A committee made up of management only is set up. ii) Management and trade Union representative form a committee. iii) Employees opinions are sought individualIy to know their preference. iv) Others
Do; you communicate the type of benefits available to your employees?
Does your organization from time to time conduct research on the type of items to be include in employee fringe benefits?
What problem do you have in dealing with the employees concerning their fringe benefits?
Which of the following fringe benefits does your company offer? Christmas bonus Leave allowance pay sick Ieave with pay Car loan Transport allowance House loan House rent allowance Pension (retirement pay pay) Free meals Subsidized meal Free medical service Life insurance Suggestion bonus Education aids Musics with work Others, specify.
APPENDIX I1 INSTRUMENT B
QUESTIONNAIRE
Dear SirIMadam,
Department of Management ~ n i v e r s i t ~ of Nigeria Enugu Campus December, 1998.
I am an MBA Student of the Department of Management, University of Nigeria, Enugu Campus. I am conducting a research work on the Impact of fringe bellefits on the performance of workers in the Hotel and Catering industry.
I will be very grateful if you could spare your time to frankly and honestly provide answer to the questions that follow. It is purely an academic research exercise, and has nothing to do with government or other interests. I assure you that all information will be treated in strict confidence.
Thanks for your cooperation.
Your Faithfully, Okpala Anthony U. (Researcher) PGlMBA119795
Please tick '[I' or 'X' in the box provided against the answer considered to be the correct one.
Consider alternative answer before ticking, and tick as many as apply.
SECTION A Employee attraction and retention
1. Why do you work? (a) To avoid idleness [ I (b) For recognition [ ] (c) For money [: ] (d) To forge ahead in life [ ] (e) To contribute to national development [ I
2 . What attracted you to seek for employment in this organization? (a) Basic salary [ ] (b) Fringe benefits [ ] (c) Working condition [ ] (d) The job itself [ ] (e) To contribute to national development [ ]
3. Would you leave for another organization with better fringe benefits schemes if such an opportunity presents itself? (a) Yes [ I (b) No [ I (c) I don't know [ ]
4. What do you consider the most important aspect of your remuneration? (a) Basic salary [ ] (b) Fringe benefits [ ] (c) I don't know [ ]
SECTION B
Employee Level of Committment 1. Are you satisfied with your organization fringe benefits schemes?
(a) Yes r I (b) No r I (c) I don't know [ I
2 . What level of committment do you show to your work in the organization? (a) High [ I (b) Low t I (c) Average [ ]
3 . Do you think that improved fringe benefits schemes irt your organization will increase your level of committment? (a) Yes [ I (b) No [ I (c) I can't say [ ]
SECTION C Absenteeism and Turnover
1. Have you ever been absent from work? (a> Yes [ I Co) No r I (c) I can't remember [ ]
2. If the answer to (1) is Yes; how frequent is it? (a) Often [ ] (b) Very often [ ] (c) Just on a few, occasion [ ]
3. If you are to leave your organization, which of the following wwld be the major reason/ (a) Insufficient pay [ ] (b) Insufficient fringe benefits [ ] c) No prospect for advancement [ ] (d) Frustration [ ]
4 . Would you have left the organization if the Ievel of fringe benefits was very low? (a) Yes [ I (b) No [ I (c) I can't say [ ]
SECTION D Employee Morale
1. Do you feel satisfied working in your organization? (a) Yes I I (b) No [ I (c) I don't know [ I
2. How do you perceive the fringe benefits schemes provided in you organization? (a) Very satisfactory [ ] (b) Satisfactory [ ] (C) Just adequate [ ] (d) Unsatisfactory [ ] (e) Very unsatisfactory [ ]
3. What is your attitude to your organization and its goal? (a) I like the firm with my whole heart and would always like to help the firm achieve its goals [ ] (favourable) (b) My attitude to the firm is favourable but not very strong. [ ](fvourable/not very strong) (c) My attitude to the firm is hostile [ ](hostifc) (d) Sometimes my attitude is favourable, sometimes it is hostile [ ](favourable/hostile)
4. Do you think that improved fringe benefit schemes wilt effect your job performance? (a) Yes [ I Co) No [ I (c) I don't know [ ]
5) If the answer to '4' is yes, how? a) Positively 1 1 b) Negatively [ 1
SECTION E Respondent profile
1. Education qualification? (a) B- Sc. [ ] (b) Diploma [ ] (c) GCEtWASC [ ] (d) First school leaving certificate [ 1 (e) Others [ ]
2. Age bracket? (a) Under 20 [ ] (b) 20-29 Years [ ] (c) 30-29 Years [ ] (d) 40-49 Years [ ] (e) above 49 Years [ ]
3. Sex? Male f ] Female [ ]
4. Marital status? Married [ ] Single [ ]
5. To which of the following organizational cadre do you belong? (a) Manager [ ] (b) Senior staff [ ] (c) Junior staff [ ]
6. How long have you worked in your organization?
APPENDIX 111
CALCULATION OF EXPECTED FREQUENCY VALUES
Expected Frequency (Fe) - -
Table 4.2b
Cell - 1)
2)
3
4)
5)
Table 4 . 2 ~
Cell - 1)
2)
3)
Where, RT = CT = GT =
Managerial Staff
Managerial Staff
Row Total Column Total Grand Total - = 174
Operatives
Operatives
Table 4 . 3 ~ Managerial Staff Operatives
Cell - 1)
Table 4.4a Managerial Staff Operatives
Table 4.4d Managerial Staff Operatives