Reward System and Labor Productivity

By

Victor E. Dike

CEO, Center for Social Justice and Human Development (CSJHD),

Sacramento, California

 

Any person who has been following the issues surrounding labor-management relations in Nigeria would agree that the real problem facing Nigerian workers is that they are unmotivated and under-appreciated. Relatively speaking, reward system in Nigeria is among the poorest in the world. The workers are not paid living wages; they are used and often discarded without effective retirement program and social security benefit to see them through their unproductive years. It is common in Nigeria for workers to go for months without getting their basic salaries. (This is not to mention the non-payment of retirement benefits -not even to retired military officers). But the politicians with unlimited access to the nation’s purse have fantastic employment and severance benefits.

 

There are many problems in Nigeria, but that which involves non-payment or late payment of workers (and retirement benefits) for months is difficult to understand. If one may ask, how does an organization (a nation) with unappreciated workforce expect the workers to be productive? Are they expected to produce good quality products and services with antiquated machines? Does a society expect a hungry worker or citizen to be happy, honest and law-abiding? Without getting paid, how would a worker take care of his or her family obligations? This is where petty corruption comes in! Lack of adequate reward for honest effort and good skill is one of the reasons for the increasing level of corrupt activities in the society. Thus, poor labor-management relations and reward system in the society, among other things, have negatively impacted workers morale, productivity, and the health of the entire economy.

 

Having identified the problems facing an average worker in Nigeria, how could the employers of labor in the society improve their productivity? Efforts in this direction must include appropriate employee motivation, which ‘is the art of stimulating someone to action by creating a safe environment…’ (Donadio, March 1992). This will involve good policies to spur economic growth, education of the youth and increase in knowledge (investment in human development). In addition, good payment system and retirement benefits, technological innovation, access to valuable information, increase in competition among firms, rehabilitation of dilapidated infrastructures and provision social amenities, are among the important areas that deserve serious attention in the society.

 

Employee training is important because one of the most efficient and effective methods of improving workers productivity in simply to train them in the skills they need to perform their job duties. Nigeria should motivate its labor force, because it cannot effectively compete in the emerging global economy with angry and hungry workers. Towards this end, Greene, April 1991, notes that ‘the only enduring competitive advantage [in this global economy] is a high-quality, well-motivated workforce willing to work together as a team to increase productivity.’

 

Taking proper interest in people is another way to improve workers productivity. It has been noted that the more or better you know an employee - knowing the needs and aspirations - the better you would be able to know how to motivate and get the most out of that particular individual. It is proper to mention that good employee motivation causes a worker to abandon his or her own goals and interest to achieve the goals of the organization. Thus, since workers are not paid well and when due, it is obvious that the employers of labor in Nigeria have not been having proper interest in their employees. However, managers in the society should desist from playing gods, and become more sensitive to the needs of their subordinates. Many of them are known to be toying with the lives of their workers by withholding their salaries for months; this attitude can only de-motivate an employee and lower his or her productivity.

 

Nevertheless, motivation programs in any organization would only work if the workers have confidence in management, as having trust in management that they would do the right thing could boost employees’ morale and productivity. For this, the employers of labor in the society should learn to implement any employment benefits packages agreed upon in labor-management negotiations for mutual benefits of the workers and the society. Without this labor disputes are bound to disrupt social activities in the society.

 

For instance, the apparent non-implementation of agreements between the Federal Government and ASUU has caused the lingering strike actions in the nation’s university system. And the Nigeria Labour Congress (NLC) has been bargaining with the Federal Government over their demand for a 25% wage/salary increase for workers. The Chief Olusegun Obasanjo administration agreed recently to give Federal workers a-12.5% salary increases -excluding employees in the private sector, state and local government (Vanguard, May 2, 2003). While the proposed salary increase is good news, without controlling the rate of inflation in the society, their purchasing power (gains from the 12.5% increase) would soon be eaten up with skyrocketing inflation.

 

However, a well-managed retirement benefit for workers could go a long way to boosting the morale and productivity of the workers in Nigeria, because many of them get bogged down worrying about their fate after retirement (ignoring or forgetting to give proper attention to their job duties). Knowing that they that would not get their benefits after retirement, some the workers would be tempted to get into corrupt practices in other to save towards retirement. Therefore, the establishments of social security system and unemployment compensation benefits are appropriate motivational employment packages that could boost workers morale and productivity. ‘Labor productivity is the amount of output produced by a worker with one hour of labor input’

 

It is appropriate to underscore the effects of non-payment of workers and remarkable benefits a society derives from increased labor productivity. If workers were not paid they would not have the resources to purchase the goods and services produced in an economy. This overtime would result in economic gridlock and the resultant sociopolitical and economic problems. However, economic growth and increase in productivity, ceteris paribus, would enable everyone in a society to enjoy higher standards of living.

 

Human beings are known to be goal oriented; and once a goal is set behavior aimed toward the goal persists until the goal is achieved. However, more often than not, a Nigerian worker works all his or her adult life without coming close to achieving ones life goals. The sad situation is worse today where an average worker cannot afford to meet his or her family’s basic needs, such as food, clothing, water, decent shelter, and health care. Yet, the society expects them to be honest, productive and law-abiding. It should be emphasized that a healthy worker, all things being equal, is a more (or highly) productive worker. Thus, lack of basic needs tend to impact negatively on workers morale and productivity.

 

As mentioned earlier, the workers who produce the goods and services the society needs are not being treated fairly. Apparently due to lack of funds the Federal Government has failed or refused to adequately fund the nation’s Universities and maintain the roads. But the corrupt politicians in the society are being showered with rosy employment and severance packages. For instance, the ThisDay (May 4, 2003) reported that the politicians who failed in their bid for re-election (and those who refused to re-contest) would walk home with huge severance packages, notwithstanding the mouth-watering furniture allowances they received at the beginning of their term. The Newspaper notes that the Senate President and Speaker of the House of Representatives are expected to receive a severance pay of N5, 953,623 each, while the each Senator and member of the House would receive N2, 431,680 and N2, 382,255 respectively. Unfortunately, this is happening at a time when an average Nigerian work is owned many months of back pay, and the universities have been on a prolonged strike action for lack of the necessary funds to operate. Is this not a misplacement of priority? This, in the opinion of this writer, is the worst Nigerian character!

 

In advanced industrial and highly competitive economies, workers are the main tools for economic growth and social progress. Their demands are seriously and readily attended to, because without a dedicated workforce an organization (a nation) crumbles. As we have seen, this has been the problem with Nigeria where labor strike actions are rampant. Thus, more often than not, workers would not get the employers of labor (the government in most cases) to pay them or attend to their job-related problems without prolong strike actions. And this has always had devastating effects on the economy.

 

However, for fair treatment of workers, employers of labor in the society should include Cost of Living Adjustment (COLA) in every employee benefits agreements. With this workers would get automatic yearly salary adjustment equal to the rise in the Cost of Living of an area in which an organization is located. The salaries of workers, among other things, should be determined by the prevailing economic conditions of a locality, instead of the usual flat salary scale structure common in Government establishments. For instance, a Federal (State) civil servant that works in Lagos or Abuja would be paid more than one that works in a rural community, say Umuaka in Imo State. If I should be permitted to digress a little here: the Federal Government should not decide for State Governments (beyond setting up a National Minimum Wage). Therefore, the exclusion of State, Local and Private sector workers from the recent proposed 12.5% increase in the salaries of Federal workers (Vanguard, May 2, 2003) is a step in the right direction. It is gratifying to note that Chief Olusegun Obasanjo did not repeat his previous mistake of setting set up the salaries of State and Local government workers. It is the administrative duty of State Governments to determine what each they can afford to pay their workers (putting into consideration their revenue base and cost of living in the area).

 

To crown the good policy, the Federal Government should speed up the privatization process, so that the Federal Government would desist from determining the costs of public utilities (and fuel prices) in the society. Market forces should be allowed to regulate prices; with that, the prices of commodities would vary according to the economic conditions of a locality. More importantly, the society should endeavor to create appropriate value system in which honesty and good skills are appreciated and adequately rewarded. This could reduce the increasing ‘brain-drain’ and encourage the youth to seek training in needed-skill areas, as good skills would boost the morale and productivity of workers. Nigeria can move forward only if persistent and determined efforts are made by the leadership to tackle the many and glaring deficiencies in the system.

 

Finally, as the nation is preparing to swear in a new National Assembly, sincere efforts should be made to discard all policies that have not worked well for the society. This is because as Bob Crandel is reported to have said, ‘if you always do what you always did, you will always get what you always got.’ For that, if Nigeria wants to survive as a viable democratic nation, it must ‘understand and apply what works now.’ This writer strongly feels that the nation has abundance human and material resources to motivate the workers for improved productivity. But, if not, why not?

May 2003