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A SURVEY OF THE EFFICIENT AND EFFECTIVE PERSONNEL MANAGEMENT IN SMALL AND MEDIUM SCALE INDUSTRIES

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Abstract

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CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

The rate of increase in population in the world is fast growing especially in developing

countries like Nigeria, that societal demands for essential goods and services are so

much on the increase that government owned companies and industries cannot meet

up with these demands. The government being aware of these pertinent problems

created a healthy environment in which some multi-nationals, the societal demands

for services and goods have been satisfied, but not completely.

Further, since human beings are insatiable and the satisfaction of a problem leads to

another, the society at large demanded for some other smaller commodities in which

the government owned and multi-national companies couldn’t meet up with the

demands because of either disturbance in their production schedules or the small

quantities demanded. The government therefore gave legal authority by way of edicts

to interested individuals to establish their own small-scale companies of their choice.

Not only that they were given legal authority, they were given loans by government to

set up financial institutions to monitor and supervise the operations of these small

scale industries.

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Agason Nigeria limited an example of such a small scale company established under

such edicts: it is purely a one man business which was established in 1990, but it

started production in 1994. It is a soap manufacturing company located in Owerri

industrial layout in Imo state and has a staff capacity of thirty, made up of three

supervisors graduates, and the rest of the staff are semi-skilled and unskilled workers.

Her products are Anchor quality bar soap, ladder bar soap, Anchor and ladder tablets.

The organizational structure is such that the owner does all the managerial functions

and every worker is expected to report to him before any actions are taken. But the

company has not really received the financial assistant from banks because of lack of

personnel and poor managerial capability of the owner. But it should be noted that

whatever may be the organizational goals or activities of any company, it can only be

achieved and implemented through effort and capabilities of people. Otherwise the

organizational structure must be manned and staff properly. Therefore it can clearly

be put that the appropriate management of human resources is an essential

responsibilities in all business regardless of size, in fact, the smaller the business, the

less important it is to select the right persons for the right job.

The question now become who then selects the right person and how did it start in

small scale organizations. Small scale organization has been with man, since the

creation of man. Man has produced controlled and sold his commodities before now,

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and it is on history that every organization started as a small scale. During the early

stages, man was regarded as an adjunct to machine which will be used fullest and

discarded when not productive. This theory is regarded as “factor of production

approach” or “commodity approach” and was founded by Taylor and his associates. It

is the scientific management principle, and they argued that if wages are tied to the

units produced, a worker will produce more units to get more money.

This approach gave rise to paternalistic management; which means management

should show a fatherly protection towards the employees. It was predominant during

the 1920s and replaced the commodity approach. The paternalistic benefits ranged

from loans and appointment of welfare officers whose duty was to improve the

welfare of employees.

During the 19th century, some group of persons tried to intervene in industrial affairs

to support the position of underprivileged factory workers at the mercy of greedy

employees. This process was known as social reformer and was greatly propounded by

Lord Shaftesbury and Robert Owen they stood outside the organization and work

place to criticize the behavior of employers and induce some changes. Personnel

manager were appointed and provided with the frame of reference for the appointees

to work within. It is important to that these companies under study were small scale

companies. The social reformer gave birth to the “Benevolence” which was the next

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stage of personnel management and was developed by Quaker Families of Cadbury

and Rowntree and the Lever brothers it appointed welfare officers who were given

specific responsibilities for improving the lot of employees. They provided goodies for

the employees because they partly desired them and they included childcare and

health screening the benevolence lead to the “human official” or “Benevolent

Approach “. At this stage, employing organization were taken a further step in

increasing their size, specialization was emerging in the management levels and it led

to the growth of personnel work , which is known as “staffing “. The human relations

school of thought influenced the human bureaucracy stage in the development of

personnel thinking, which was in many ways a reaction against scientific management.

The human relation approach appealed immediately to those who were concerned

about industrial conflict and the bad results from scientific management. The main

advocate was Elton mayo (1993). The central idea was to emphasize informal social

relationships and employee morale as contributions to organizational efficiency. It let

to the concern, collective opinion or negotiation stage where appointed as their

accredited representatives. Employee shifted towards bargaining with the

representatives on at least some matters. The personnel manager actively participated

in the bargaining since he had acquired bargaining expertise.

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The human relations view gave a number of benefits to employees; they were

paternalistic determined by management with more input from employees.

Management felt the need to maintain good relations with employees because it

believed this would lead to high performance. It thus, provided benefits not because

employees demanded or needed such benefits but because it wanted to buy over the

employees as a strategy for achieving its own objectives. It was popularized by the

Hawthorn studies, which demonstrated the effect of framework and co-operation on

performance.

The last stage is the manpower analyst, associated with the terms “management of

human resources”. There is also the use of manpower planning in which organizations

utilize and improve human resources. It assesses what manpower will be needed,

decides what manpower in an organization is likely to have in the future, and take

actions to ensure that supply meets demands.

This last stage is where the problems of personnel management lie in small scale

organizations; this research will look deeply into the functions and problems of

personnel management and ways of improving and combating them.

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FIG 1: ORGANISATIONAL STRUCTURE OF AGASON NIGERIA LIMITED

Manager /chief Executive Officer

Production/workers Maintenance

Production Supervisor

Marketing Supervisor

Marketing, Staff and Driver

Procurement Supervisor

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1.2 STATEMENT OF THE PROBLEM

Personnel management in small medium scale industries has been faced

with multi-dimensional problems. Personnel is one of our most complex

and challenging fields or endeavors, this is because it is this function that

integrates the interest of the organization-that of the employee and the

society at large. The success of an organization depends largely on the

activity of her personnel. And in the light of the foregoing, these questions

were found relevant to guild the present research effort:

I. What are the sources of recruitment in Agason Nigeria Limited?

II. What are the sources of human resources development in Agason

Nigeria Limited?

III. What are the basics for wages and salary administration in small scale

organizations?

IV. What are the motivational factors in Agason Nigeria Limited?

V. Is the owner aware of internal and external assessments within and

outside the organization?

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VI. Does lack of fund impede the implementation of personnel functions

in Agason Nigeria limited?

VII. What are personnel functions in small-scale organizations like Agason

Nigeria limited?

VIII. What are future prospects of personnel management in small scale

organizations like Agason Nigeria limited?1.3 OBJECTIVE OF THE STUDY

The search for solutions to the problems and prospects of personnel

management in small scale organizations has almost proved abortive. These

problems are multifarious and the purpose of this research is to reduce

these problems to the minimum and make small scale industries achieve or

attain the purpose of which they were set up. Therefore the specific

objectives of this research could be narrowed down as follows:

1) To determine whether or not human resources development affects

the organizational efficiency of Agason Nigeria Limited.

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2) To find out if motivation of workers helps in achieving the goals of

Agason Nigeria Limited.

3) To determine if wrong selection and recruitment of workers has a

negative effect on Agason Nigeria limited.1.4 HYPOTHESES

The following hypotheses have been derived from the statement of

problem and objectives of study as enumerated above.

1) H₁ human resources development affects the organizational efficiency

of Agason Nigeria limited.

2) Hâ‚‚ motivation of workers helps in achieving the goal of Agason Nigeria

limited.

3) H₃ wrong selection and recruitment of workers has a negative effect

on Agason Nigeria limited.

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1.5 SIGNIFICANCE OF THE STUDY

The importance on the roles small and medium scale industries play in any

country cannot be overstressed; these industries have therefore to be

manned and staffed rightly in order to achieve these sole aims. This

research could serve as a guideline for other researchers. Further, it is of

academic interest of knowing, if the staffing and selection policies and

productivity have a positive or negative correlation, and it will help in

evaluating, if the objectives have been achieved. Organizational managers

and policy formulator will gain a lot, if they are aware of these factors that

spur or inhabit their employees to or from performance.

Finally, it is the hope of the researcher that small and medium scale

organizations that do not have personnel managers should do so, because

the owner of these companies cannot be perfect in all areas.

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1.6 SCOPE OF THE STUDY

This research focuses on the personnel problems of Agason Nigeria limited

from 1994 to date. Since is a company based in Owerri, the researcher may

be constrained to use certain information internally. Of the three

supervisors and twenty staff were administered with questionnaire, also

thirty other workers from three other small scale organizations around the

industrial area were given questionnaires who have stayed up to five years

in each of these companies, which were used in this study.1.7 OPERATIONAL DEFINITION OF TERMS

Under the operational definition of terms, the terms are to be defined

operationally, that is, how they affect the study. The terms are listed below.

2. SMALL AND MEDIUM SCALE INDUSTRIES: The definition of small and

medium scale industries vary within a country. In Thailand different

agencies use different criteria to classify small and medium enterprises.

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A. The ministry of industry uses employment and equity figures to define

them as legally registered factories.

Small Scale enterprise Medium scale

enterprise

Employment Criteria >50 employees 50-200 employees

Equity Criteria >10 million baht 10-100million bahtMeanwhile, the bank of Thailand, the small industry finance co-operation

(SIFC) and the industrial finance co-operation of Thailand (IFCT) adopted

another definition based on net fixed assets.

Small –scale Medium -scale

Net Fixed asset >20 million baht NoneIn Nigeria, it has various definitions according to different set up. Firstly, the

small business enterprise are those whose total investment is limited to

amount not in the large scale category and therefore do not have

economics of scale on their own right.

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I. Low set up capital

II. Short gestation period

III. Small labour force

IV. Use of simple technology

B. The small business Act of 1953, defined small business as firms as one

which is independently owned, operated and not dominant is its field

of operation. The act says that business is one, which is owned,

managed controlled by one or two persons and has no defined

organizational structure, has a relatively small share of the market and

employees less than 50 people.

C. The National council on industry in 1996 defines small enterprises as

those in which the capital (working capital inclusive) falls within N

1million to N10million Naira with a marketed labour of between

11people. While medium enterprise is above N10 million Naira but

not Exceeding N150 million and with labour force of between 35 and

100 people.

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D. The central bank of Nigeria credit policy and loans as one whose total

cost excluding cost of land but including working capital is above N1

million but does not exceed N10 million.

E. The small scale industries division of federal ministries of industries

defines it as an enterprise having investment capital (including land,

building, machinery, and equipment and working capital of up to

N150,000 and employing not more than 50 people).

F. The Nigeria bank for commerce and industry (NBCI) for the purpose of

its revolving loan scheme to small scale industries defined small–scale

enterprise as those investigating more than N750,000 including

working capital but exceeding the cost of land.1.7 RECRUITMENT

Recruitment and selection are so are so interchangeably used in the

employment process. But Guion’s (1965) comment on recruitment portrays

an all embracing view. Recruitment also includes the simple device of

keeping the door to the employment office open so that application may

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walk in off the street. Fleishmann (1967) appear to be more forthright,

when he emphasizes that organization reach out for candidates through

“visit by company executives to college campuses”.

Ungreson (1970) says recruitment is a process, the capacities and

inclination of the candidate has to be matched against the demands and

requirements of the given job or career pattern.

There are two sources of recruitment; internal and external sources.

a) INTERNAL SOURCES: Here, the organization prepares a

comprehensive program of talents inventory and analysis to enable

the personnel department to establish the correct standing of

employees and stability for promotions and transfers. It is done within

the organization.

b) EXTERNAL SOURCES: Organization goes outside to recruit for position

whose conditions and specification cannot be met by existing

personnel, for expansion and for lower –entry jobs. The external

sources include words of mouth, advertisement, government

employing agencies, schools and colleges just to mention a few.

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1.7 SELECTION

According to Blum & Naylor (1968) selection, “involves picking for hire a

subset of workers from the total set (population) of workers available for

hire at any given moment of time”.

Anastasia (1965) defines personnel selection problem “as choosing from a

number of available applicants, a smaller number of available applicants, a

smaller number to be hired for hired for a given job”.1.7 HUMAN RESOURCE DEVELOPMENT

It is known also known as employee training. Training is a learning process

that involves the acquisition of skills by employees to enable them

increases their performance. It is one of the most vital aspects of personnel

management, because the success and failure of any organization is

depends on the caliber of the human element.

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There are many forms of human resources development; these include

orientation and induction, refresher course, management seminars,

conferences and workshops and the job-training.