THE IMPACT OF MANPOWER PLANNING ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA (A SURVEY OF A SELECTED SMALL AND MEDIUM IN PORT HARCOURT.
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THE IMPACT OF MANPOWER PLANNING ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA
(A SURVEY OF A SELECTED SMALL AND MEDIUM IN
This study examined the impact of manpower planning on the performance of small and medium scale enterprises in Nigeria. (A survey study of a selected small and medium enterprise in Port Harcourt). Data were collected from entrepreneurs/managers of some selected small and medium enterprises in Port Harcourt. The statistical tools used in analyzing the data collected were the simple percentage and frequency tables, and the spearman rank correlation. The result revealed that there is a significant relationship between manpower planning and the profitability of SMEs. A significant relationship was also found between revealed that significant relationship exists between manpower planning and the productivity level of SMEs. The data concluded therefore support our hypotheses, therefore, it was concluded that manpower planning enhance the performance of small and medium scale enterprises. Based on this, it is recommended that small and medium scale enterprises in Nigeria should practice effective manpower planning as it would enhance their performance.
TABLE OF CONTENTS
Title Page i
Table of Contents vii
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the problem 7
1.3 Purpose of the study 9
1.4 Significance of the study 10
1.5 Research question 11
1.6 research hypotheses 12
1.7 Scope of the study 12
1.8 Limitation of the study 14
1.9 Definition of terms 15
1.10 Organization of the study 18
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction 19
2.2 conceptual definition of SMEs and manpower 20
2.2.1 process and steps of manpower planning 23
2.2.2 strategic importance of manpower planning 25
2.2.3 procedure of manpower planning 26
2.2.4 factors affecting manpower planning 27
2.2.5 limitation of manpower planning 29
2.2.6 model of manpower planning 32
2.3 conceptual definition of performance 33
2.3.1 measures and determinants of organizational performance 34
2.3.2 factors affecting organizational performance 34
2.4 manpower planning and performance of SMEs 39
2.5 model of manpower planning and performance of SMEs 47
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 51
3.2 Research design 51
3.3 Population of the study 52
3.4 Sampling procedure 52
3.5 Sample size determination 53
3.6 Data collection method 53
3.7 Questionnaire design 54
3.8 Operational measures of variables 54
3.9 Data analysis techniques 55
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Introduction 57
4.2 questionnaire distribution and retrieval 57
4.3 Analysis of data 58
4.3.1 Analysis of research question 59
4.4 Testing of hypotheses 65
4.4.1 Testing of hypothesis one 66
4.4.2 Testing of hypothesis two 70
4.4.3 Testing of hypothesis three 75
CHAPTER FIVE: DISCUSSION, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction 80
5.2 Discussion 80
5.3 Conclusion 82
5.4 Recommendations 83
5.5 Suggestion for further study 84
1.1 BACKGROUND OF THE STUDY
Nigeria as a developing nation is presently experience high level of unemployment and poverty. These two economic problems facing the country have challenged many individuals to go into one form of business or the other. The business in which most of these individuals venture into takes the form small or medium scale enterprise. Small scale enterprise have been defined as those enterprises whose capital investment does not exceed N40million (excluding land but including working capital) with a labour size of between 11-35 workers. While medium scale enterprises are those enterprises whose total cost (including working capital but excluding cost of land) above n40 million but not exceeding N150 million, with a labour size of 100 staff- (CBN monetary policy circular No.25 of credit Guidelines, 2009).
Small and medium scale enterprises are regarded as catalysts for economic development in Nigeria. They contribute immensely to employment generation, increase per capital income, savings, stimulate indigenous entrepreneurship, enhance industrialization and contribute immensely to the GDP of the country (Nnanna, 2001:1). These important contributions of SMEs to economic development make the sector very important to the government and stakeholders. The success of these SMEs is very important to the government not only because of the large number of people offered employment but also due to the enhancement of industrialization and poverty reduction.
The entrepreneurs of the various SMEs in Nigeria have certain predetermined objectives which they intend to achieve. Some of these objectives include; increase profitability, new business opportunity, increase market share, productivity, growth in net assets and improved competitiveness (Dew Hurt and Burns, 2001:6).
However, for SMEs to improve their performance in such areas as profitability, increase sales, market share, breaking new grounds, increase productivity, growth and competitiveness, they must acquire adequate and qualified manpower in the organization. The process by which an enterprise ensures that it has the right number of people, the right kind of people at the right place, and at the right time doing the right kind of things which result in the accomplishment of organizational objectives is known as manpower planning (Keency and Anthony, 2001:19). It is the process of deciding in the present, future manpower needs in terms of quality, competence, number, training and development programme, and their remuneration as well as other welfare package that will motivate and maintain as may be required by the organization.
Manpower planning is highly necessary in all small and medium scale enterprises because it is required for recruitment, training and development, as well as motivational needs (Nwachukwu, 2000:134). Without it, it would be difficult to know the number of personnel required for recruitment, training and development as well as motivation to enhance better performance.
According to Nwachukwu (2000:135), manpower planning reduces excessive recruitment, training and development, transfer and thereby saves cost and time. The major changes in population, technological innovation and size and complexity of organizations have made informal methods of employment planning obsolete for all but very small and stable organizations (Bruce, 2003:102).
This situation is more crucial in Nigeria where there is scarcity of qualified manpower to fill existing positions. Manpower planning is very compelling to effectively and efficiently utilize whatever personnel that is available. It is mainly in this way the people (employees) in small and medium scale organization who need more training could be identified to upgrade their skills in order to assume more responsible positions. It also aids the entrepreneur to start very early to seek and find capable hands to replace those about to retire to cushion the effect of their departure from the establishment. Thus, an effective manpower planning in SMEs will enhance the performance and productivity in Nigeria.
Performance has been a relative concept defined in terms of some referent employing a complex set of time-based measurements of generating future results (Corvellec, 2005). Performance is important to us as people and organizations. In fact, most us believe that we can and will improve at what we do, and we expect others to improve overtime as well (Hellriege, 2004:227). People are the most valuable assets of an organization. Therefore the role of human resources is absolutely critical in raising performance of an organization ultimately, it is the performance of many individuals which culminates in the performance of an organization, or the achievement of goals in an organizational context (Armstrong & Baron, 2008:41).
However, performance cannot be left in anticipation that it will be develop naturally, despite the employee’s natural desire to perform and be rewarded for it. The desire needs to be accommodated, facilitated and cultivated. Obviously, individual performance is a product of ability multiplied by motivation (Guest 2003:236). Motivation reflects effort or energy which is dynamic and often fleeting characteristics that determine how vigorously capabilities will be employed in some activity. Both ability and motivation are necessary to some degree before successful job performance is obtainable.
SMEs can perform well or poorly due to external forces, such as interest rates and taxation. To remain competitive in the environment, SMEs need to get the out of their asserts, especially the human assets. It should be noted that SMEs continued existence is also threatened. Although these enterprises were given exclusive Franchises in certain industries, but majority of them have performed poorly over the years Helliegel, 2004:246). It is postulated that effective manpower planning will help to raise the performance of SMEs (Nwankwo and Richard, 2001:29).
It is mainly in this way that people (employees) who need more training could be identified to upgrade their skills in order to assume more responsible positions. It also aids the entrepreneurs to seek and find capable hands to replace those about to retire to cushion the effect of their departure from the establishment. Thus, effective manpower planning in SMEs will enhance their performance and profitability. It is against this background that this study seeks to examine the effect of manpower planning on the performance of SMEs in Nigeria using selected SMEs in Port Harcourt as a survey study.
1.2 STATEMENT OF THE PROBLEM
The performance of SMEs in Nigeria is very poor. It is estimated that SMEs perform poorly due to external forces, such as interest rate and taxation. Although the government has granted certain incentives, and tax holiday to encourage the growth of SMEs but their performance profitability is still low. Nwankwo and Richards (2001:27) noted that majority of the SMEs in Nigeria have performed poorly over the years. They further explained that these enterprises are threatened by their large rivals, Nwankwo and Richards (2001:29) added that SMEs will be continually threatened by their large rivals if they do not improve their organizational performance.
Several factors accounted for the poor performance of SMEs. One of such factors is lack of manpower planning. Most of the SMEs do not make adequate plans for manpower recruitment, training, and development and motivation. When qualified and competent employees arte retired, the firms run into the problem of manpower shortage and retrogressive production and poor quality product, customer dissatisfaction, and these affect the competitiveness and growth of the organization.
It is obvious that the poor performance of SMEs has adverse effect on the Nigeria economy and it is imperative that SME’s performance should be improved to revive the industrial sector of the economy. In recent times, performance of SMEs has become an issue that has received serious attention. There is a constant pressure on entrepreneurs to improve the performance of their firms so as to remain in business. As the performance of SMEs influence organizations, continued existence, it is therefore necessary to examine the contribution of manpower planning to the performance of SMEs in Nigeria.
1.3 PURPOSE OF THE STUDY
The purpose of this study is to examine the impact of manpower planning on the performance of small and medium scale enterprises in Nigeria using selected small and medium scale enterprises in Rivers State as a survey study.
The specific objectives of the study are as follows:
1. To find out if there is any relationship between planning for future manpower needs and profitability of SMEs.
2. To examine if there is any relationship between manpower planning and growth of SMEs.
3. To examine if there is any relationship between manpower planning and productivity of SMEs.
The above objectives are conceptualized in the model below:
Figure 1.1 Conceptual Frame Work of the Study
1.4 SIGNIFICANCE OF THE STUDY
This study is very significant in the sense that it would be useful to different categories of person and organizations. First the finding of the study will be relevant to small and medium scale enterprises in Nigeria especially those in the Port Harcourt as it will encourage them to practices effective manpower planning their organizations.
Also, the result of this study will be useful to entrepreneurs and managers or SMEs as it would broaden their knowledge on the effect of manpower planning on the performance of their organizations.
Finally, the study will be useful to students, authors, writers, etc who may wish to research further on this topic as it would serve as a good reference materials for their study.
1.5 RESEARCH QUESTIONS
In order to adequately address the objectives of the study, the following questions are raised:
1. Is there a relationship between manpower planning and profitability of small and medium scale enterprises?
2. To what extent does manpower planning enhance growth of small and medium scale enterprises?
3. Is there a relationship between manpower planning and productivity?
4. Is there a relationship between training and productivity?
5. To what extent does motivation enhance profitability?
1.6 RESEARCH HYPOTHESES
The following hypotheses are postulated and stated in their null form (H0):
H01: There is no significant relationship between manpower planning and profitability of small and medium scale enterprises.
H02: There is no significant relationship between manpower planning and growth of small and medium scale enterprises.
H03: There is o significant relationship between manpower planning and productivity of small and medium scale enterprises.
1.7 SCOPE OF THE STUDY
The scope of this study is limited to some selected small and medium scale enterprises in Rivers State. The respondents constituted of entrepreneurs and managers of the selected small and medium scale enterprises in Rivers State.
1.8 LIMITATIONS OF THE STUDY
The following factors were the limitations to this study:
The researcher was highly constrained by lack of adequate fund to finance the huge expenses associated with this study. As a result of this, the researcher was not able to visit all the oil companies in Nigeria.
Time inadequate is another limiting factor to this study. The time available to the researcher was too insufficient to extensively conduct this study.
Scope of the Study
The scope of the study also constitutes its own limitation. This study was conducted among some small and medium scale enterprises in Rivers State, hence some might doubt if the findings from this area studied can actually serve generalization purpose to all the small and medium scale enterprises in Nigeria.
Non-Challant Attitude of Respondents
Some of the respondents were reluctant in filling the administered questionnaire let alone attending the oral interview. This constituted a great limitation to this study.
1.9 DEFINITION OF TERMS
For the purpose of understanding, the following terms have been defined in the operational perspective as follows:
This refers to the human asset of an organization. It is the employees or workers who are hired by the company to perform certain task that can lead to the achievement of organizational goals.
The process by which an enterprise ensures that it has the right number of people, the right kind of people at the right place, and at the right time doing the right kind of things which result in the accomplishment of organizational objectives is known as manpower planning.
Human Resources Management
All activities involved in the effective utilization of people to achieve both the objectives of the organization and the satisfaction and development of the employees.
Human Resources Information System (HRTIS)
A computerized system that provides current data for the purpose of control and decision making.
A person who enters into a contract with another (the employer) to perform some work. The term employee is also used the same as worker, staff or personnel.
The process of discovering the potential of applicants for actual or anticipated organizational vacancies. It can also be looked at as a linking activity, bringing together those with jobs and those seeking jobs.
Choosing from a pool of (potential employees) applicants the most suitable/qualified candidate for employment.
The ways in which recruitment and selection (pooling together applicants and choosing from them) are carried out. These include the methods used and the policies/guidelines that influencing them.
The process of applying appropriate educational methodology to those situations in which improved performance can result from effective learning. It can also be defined as a systematic development of knowledge, skills and attitudes required by individuals to perform adequately a given task of job. It involves learning of various kinds and in various situations.
This refers to those processes directed towards equipping employees with the skills, knowledge and attitudes necessary to achieve corporate objectives both now and in the future.
Small Scale Enterprises
Those enterprise whose total cost (including working capital but excluding cost of land above N40 million but not exceeding N150million, with a labour size of 1000 staff (CBN monetary policy circular No.25 of credit Guidelines, 2009).
1.10 ORGANIZATION OF THE STUDY
This study is organized into five (5) chapters.
Chapter one is the introduction which comprised of the background of the study, statement of the problem, purpose of the study, research questions, research hypotheses, significance of the study, scope of the study, limitation of the study, definition of terms and organization of the study.
Chapter two is titled literature review; this chapter was devoted to review of some literature/work of previous scholars and writer related to this study.
Chapter three dealt with the research methodology and it was discussed under the research design, population, sample size and sampling procedure, data collection method, and questionnaire design, operational measures of variables and data analysis techniques.
Chapter four is concerned with the presentation and analysis of data, and
Chapter five dealt with the discussion of findings, conclusion and recommendations.