CHAPTER ONE

INTRODUCTION

1.1              BACKGROUND TO THE STUDY

    In every organization, large or small, private or public enterprises, human resources are always the pillar to the success of the organization. These human elements have their individual drives, desires, needs, wishes and other similar forces which they intend to satisfy when they are coming in to the organization. Satisfaction or non-satisfaction of these needs by the organization has an impact on the behavior or performance of the employee and eventually on productivity.

    The relationship between workers and their employer is transactional in nature. The employer requires the services of his employees, and on the other hand, employee’s, poses skills which are ever ready to put at the disposal of the employer in returned for some form of benefit or rewards. The compensation is usually in cash because there is attraction for production efforts. Salary is one of the motivational factors; the main reason why workers get involved in job is to earn a living which is salary or wage. Reasonable salary must be paid in time, that is, it must be paid as at when due and promptly, as well.

     Salary is the means through which employee satisfies his/her other needs and invariably, it determines his/her standard of living.

  According to Pappas and Flaherty (2006), Motivation from salaries exists among employees, however, some may be motivated through commission and others may be motivated with increased in fixed pay. If management is serious in influencing the behavior and motivational level of employees through salaries they should increase the salary enough so that it can be perceived as a raise in employee productivity, as Mitra, Gupter and Jenkins (1997) suggested.

   There may be several factors that motivated employees; salary increment is one of them as Brown, Cattel, Michele and Edwards (2008) conducted research on the quantity surveying profession in South Africa and found that salary increment, promotion prospects, personal satisfaction and recognition e.t.c are motivating factors for employees in that particular case. The amount of money a person receives monthly can be best predictor of his/her motivational level.

  In view of the above, this study will attempt to identify the effect of salary increment on employee motivation and turnover, in order to address problems arising from motivational approaches in organizational settings of Gombe local government area of Gombe state.

1.2              PROBLEM STATEMENT

The main consideration is workers satisfaction, several motivational factors can be adopted to achieve this, but salary increment has been given priority.

It is well known fact that workers attempt to increase their salaries and wages directly by negotiating through a trade union, whereby the trade unio threatens their employers to go on strike if they refuse to increase their salaries and fringe benefits.

 This economic impact of salary increase and fringe benefits on workers effects many workers both in the public and private sectors, and it can lead to increase in the rate of unemployment and thus, inflation.

1.3              OBJECTIVES OF THE STUDY

The main objective of this study is to assess the effect of salary increment on employee motivation and turnover on the performance of employees of Gombe local government, Gombe state.

    Thus, the specific objectives include:

a)      To examine how salary increment influence performance of workers in Gombe local government.

b)      To identify the relationships between salary increment and job satisfaction.

c)      To assess whether lack of salary increment has negative effect on the organization.

d)     To investigate the behavior of employees when/after the salary is increased.

1.4              RESEACH HYPOTHESIS

Ho 1: There is no significant relationship between salary increment and employee job satisfaction.

Ho 2: There is no correlation between salary increment and workers productivity.

Ho 3: Employees’ behavior does not change in proportion to increase in salary(s).

1.5              RESEARCH QUESTION

For this research to be successful, the following questions are essential:

I.       To what extent does salary increment affect employees’ performance?

II.    Does salary increment leads to job satisfaction?

III. Does lack of salary increment affect the organization negatively?

IV. Does employees’ behavior changes in proportion to salary increase?

1.6              SCOPE OF THE STUDY

  This project work is not directed at providing solutions at all problems that arise in corporation generally. Rather, it is narrowed   to the impact of salary increase and fringe benefits.

 This study has a wide scope, but the researcher will consider the motivating factor, especially the effect of salary increment on employees of Gombe local government area. The data to be obtained will be restricted to the proposed and current problems facing employees of Gombe local government area of Gombe state. Therefore, the study covers only Gombe local government area of Gombe state.

1.7              SIGNIFICANCE OF THE STUDY

      The outcome of this research will be significant to the government and private workers at all levels especially the Gombe state government in finding out a better way of increasing the salary of their employees so as to achieve desired goals and objectives.

           1.8        LIMITATION OF THE STUDY

                        This study was limited by internal and extraneous factors some of these factors are:

i.      Time factor: Time for this project is very short considering the volume of work at school.

ii.    Data limitation:  Data on this type of study is not easy to come by. Even to get feedback from respondents in questionnaire administered is very difficult. One has to constantly visit them and persuade them before responses could be obtained.

1.9         DEFINATION OF TERMS

SALARY: Is a fixed amount of money or compensation paid to an employee by an employer in return for work performed. It is also a fixed compensation periodically paid to a person for regular work or service.Dictionary.com.

MOTIVATION: Is the desire to achieve beyond expectations, being driven by internal rather than external factors, and to be involved in continuous striving for improvement (Torrinton, Hall, Taylor and Atkinson 2009).

COLLECTIVE BARGAINING: Is a process of negotiations between employers and employee(s) aimed at reaching agreement to regulate working conditions.

REMUNERATION: Is the compensation that one receives in exchange for the work or service performed. Typically this consists of monetary rewards.

ORGANIZATION: Is a social unit of people that is structured and managed to meet a need or to pursue collective goals.

INCENTIVES: Is something that motivates an individual to perform an action. It is added to the income that is already generated or expected.

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