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
PORT HARCOURT.
ABSTRACT
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
PAGE
Title Page i
Declaration ii
Certification iii
Acknowledgment iv
Dedication v
Abstract vi
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
Bibliography
Questionnaires
CHAPTER ONE
INTRODUCTION
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:
Inadequate Finance
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.
Inadequate Time
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:
Manpower
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.
Manpower Planning
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.
Employee
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.
Recruitment
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.
Selection
Choosing
from a pool of (potential employees) applicants the most suitable/qualified
candidate for employment.
Recruitment/Selection Practices
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.
Training
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.
Employee Development
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.
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