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OKPALA, Anthony Ugoh

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  • Name: The Impact of Fringe Benefits on The Performance of Workers in The Hotel and Catering Industry A Study of Selected Hotels and Cathering Firms in Enugu Urban
  • Type: PDF and MS Word (DOC)
  • Size: [6.48 MB]
  • Length: [103] Pages

 

ABSTRACT

This study examines the impact of fringe benefits on the performance of
workers in the Hotel and Catering industry, with a view to establisl~ing its
importance to the workers and to the industry. This is intended to assert whether
or ncit ,poor fringe benefit schemes could be an impediment to the development of the
sub-sector.
The study is organized in five chapters each of which deals with some specific
aspects of the study.
The first chapter provide a framework for the study. It embodies what niay
be regarded as the proposal for the study and therefore provided the necessary
background information which helped to determine the structure of the study.
The second chapter deals with the review of related literature. It provides the
theoretical foundation upon which the intricacies of the subject-matter were closely
knitted.
Chapter three deals with the research metl~odologyw hich involve a systematic
description and analysis of the tools and methods utilized in the research study. It
also show the different statistical methods employed in the research analysis.
In the fourth chapter, the researcher “waded his feet’ into the stream of
research analysis1′. The research data collected in the field through the research tools
were presented and analyzed. Also, the hypothesis that guided data collection were
verified. A brief summary of the entire work is presented in the last chapter,
together with conclusion and recommendations.
The findings of the study reveals that fringe benefit is of great inlportance to
the workers in the industry, and to the industry. And also, that poor fringe benefit
schemes could serve as an impediment to the development of the sub-sector because
of its importance. The study made recommendatioi~s that will help to remedy the
situation, to engender a smooth and faster development of the Hotel and Catering
industry in Nigeria.

 

TABLE OF CONTENTS

Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
Dedication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Acknowledgment …………………………………. iv
Abstract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
List of Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
CHAPTER ONE
XNTRODUCTION
1.1 Background Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 The Statement of Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 The Purpose of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 The Objectives of the Study ………………………. 6
1.5 Research Problem Oriented Hypothesis . . . . . . . . . . . . . . . . . . . . 6
1.6 The Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.7 The Scope and Limitation of the Study . . . . . . . . . . . . . . . . . . . . 8
1.8 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C-R TWO
TBE: REVIEW OF RELATED Ll3XRATURE
2.1 The Nature and Scope of Fringe Benefits . . . . . . . . . . . . . . . . . . 10
2.2 Factors for Effective Fringe Benefits Plan ……………… 11
2.3 Developing and Administering the Benefit Program . . . . . . . . . . . . 15
2.4 Suggested Ways of Ensuring Appreciation and Good Return on Employee
Benefit Plans ……………………………… 16
vii
2.5 Why fringe Benefits Fail to Motivate Workers . . . . . . . . . . . . . . . 18
2.6 From a Different Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7 Reasons for Providing Fringe Benefits . . . . . . . . . . . . . . . . . . . . 22
2.8 Some Problems of Installing Fringe Benefits Plan8 . . . . . . . . . . . . 28
2.9 Some Major Types of Fringe Benefits . . . . . . . . . . . . . . . . . . . . 24
2.10 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
CFLWTERTaREE
RESEARCH METHODOLOGY
3.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Pilot Study ………………………………. 34
3.3 The Data and Research Technique …………………. 34
3.4 The Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.5 Description off the Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.6 SampIe Sue Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.7 Sampling Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.8 Statistical Technique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.9 Questionnaire Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.10 Questionnaire Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.11 Questionnaire Distribution and Organizational Status of Respondents 42
(xuPTER POUR
PRESENTATION,A NALYSIS AND .W.ER PIbETATION OF DATA
4.1 Demographic Characteristics of the Respondents . . . . . . . . . . . . . 47
4.2 Findings on Employees Attraction and Retention . . . . . . . . . . . . . 50
4.3 Findings on Employees Level of Commitment . . . . . . . . . . . . . . . 54
4.4 Findings on Absenteeism and Turnover . . . . . . . . . . . . . . . . . . . 57
viii
4.5 Findings on Employee Morale . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.6 Testing of Hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
CHAPTERJTCVE
SUMMARY RECOMMENDATION AND CONCLUSION
5.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.2 Recommendations …………………………… 79
5.3 ConcIusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5.4 Further Research Needs ……………………….. 81
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

 

CHAPTER ONE

1.1 BACKGROUND INFORMATION
The problem of manpower in the Hotel and Catering industry has continued
to attract the attention of the industry’s trade associations, professional bodies and
other interested parties because of the unique nature of the industry,
(Magurn,l977:vii). This uniqueiress lies in the fact that only a few other industries
have such close relations between staff and customer. Also only a few other
industries in the economy offer so much scope for giving satisfaction to others, and
for getting satisfaction from work. Yet, the problem of inability to attract, retain
and actuate personnel effectively and efficiently continue to stare the sub-sector in
the face, (Shuaibu, 1979; Pfedi, 1986:3).
In the light of the prevailing harsh econon~icc ondition of our time, prudent,
management of the organization resources has been calIed for, so as to ensure
greater productivity from each unit of resource input. Of all the resources available
to management for the purpose of ensuring survival and growth of the organization,
the human resources stands out as one of the most basic and critical, (Druker,
1955251). One only need to think of the fact that all other resources can become
productive only i ~ats sociation with the human resource, arid humans aIso turn out
to be the ultimate consumer of the goods and or services from various organizations
in the economy, (Image,1996:19). I11 recognition of this, il~anagelnenut sually devote
a lot of time and commit other resources towards attracting and retaining high
quality personnel for the organization and also in getting the best out of them. But,
the Hotel and Catering industry appears to be lagging behind in this regard,
especially in developing countries like Nigeria, (Onyia, 1986:3). Also, as Margun
(1977;vii) rightly noted.
“Our industry (Hotel and Catering) has frequently been critized in
study reports for treating man-management, as the cindcrella of
general niaiiage~neut and for devoting so little of its resources to
developing the skills of those entrusted with responsibly . . . after all
in n service industry, the people- resource nlust be seen as a prime
determinant in the success and profitability of even the sn~allest
unit.”
A number of workfhop/lectures have been organized in Nigeria to find a solution to this
problem which may be acting as a hinderance to the desired developnlent of the Hotel and Catering
sub-sector. In one such workshopllecture, it was opined that amoug other issues like poor salary
sctiemes, degenerate working conditions etc, poor fringe benefit schemes prevalent in the industry
may also be part of the reason for the inability of the hidustry to attract, retain, and actuate
personilel effectively and efficiently, (Ifedi, 1986:3)
Fringe benefits have been identified as one of the effective ways managemeut may adopt for
attracting, retaining and actuating personnel, especially for motivating them to higher
performance, (Flippo, 1980:291;Ejiofor, 1984:23). Therefore for any organization to
meet its aims of survival, profit and growth, there is the greater need to devote more
attention to the formulation off sound and good fringe benefits prograinme/policy for the
organization and as well, maintain a good working condition, attractive salary and a
congenial work atmosphere. The reason for, this is because majority of the workers are
somewhat mainly concerned with the ‘bread and butter” issue, moreso in today’s Nigeria
with the prevailing economic depression, and general ‘hardship’. One would see that
there is not much hope for the salaried worker, considering the rising inflation, which
was put at 8.5% (Abacha’s 1998 Budget of Transition), with its accompanying rise in
cost of living. Also, there has been a steady rise in unemployment level, thereby
3
increasing the number of ‘mouths’ to be fed and cater for in the families of these poor
workers. Most wage and salary earners now see their pay package as a sheer mockery
of the prevailing market condition. Hence, attractive fringe benefits will help to
ameliorate the rising needs of the workers.
Again, the meaning attached to the fringe benefit programmes in existence in
many organizations are multifarious, and this affects its success in achieving its goal to
both the employees and the organizations. Man is a very complex being, and managing
man to increase his productivity involves a number, of variables one of which is
identifying those factors which can incite or spur him to contribute maxin~ally to
organizational growth and development. Once these factors are identified and established,
they can then be manipulated in a way that will enable them actuate labour effectively
and efficiendy , for improved performance.
The need for the development of the Hotel and catering industry in Nigeria, has
been on the increase in recent times. This arose out of the greater need to diversify the
revenue base of the country, considering the persisting slide in the price of crude oil at
the International Oil Market, (The Guardian, Nov.25, 1998:4). The developnlent of the
Hotel and Catering sub-sector, therefore, becomes pertinent because it provides the
‘fertile’ ground for the growth and development of Tourism industry. Tourism is, the
fastest growing industry in the world today, and, considering the abundant tourisin
potential in the countly, it ‘has been accorded a “preferred sector” status in the national
economy, (Ugwu, 1998:42). But touisrn cannot grow or develop where there is not in
place a well established Hotel and Catering industry, (Adeoye, 1977: 11; Duru, 1998:46).
Also, as Nigeria continue to nurse the ambition of hosting the World Cup
tournament by the year 2006, the development of the Hotel and Catering industry in the
country would be a boost to this ambition. Nigeria would never have been allowed to
host the World Youth Soccer Championship tagged ‘Nigeria 99’ if there are no existing
Hotel; and Catering firms.
On the other hand, there has been a persistent call on Nigerian workers to
improve their performance, so as to contribute more to national development, (Ekundayo,
1988: 11; Agbetuyi, 1998:25). But, one would not expect much from a hungry worker,
and therefore studies such as the one undertaken hereby will help to direct the attention
of those at the helm of affairs to those salient factors that would need to be addressed
first before demand for better performance can be made of the workers.
1.2a. TKE STATEMENT OF PROBLEM
The Hotel and Catering industry, if well managed and developed has been known
to complemenl the tourism industry thereby enhancing revenue generation for the national
economy.
Meanwhile, it has been discovered that the Hotel and Catering industry in Nigeria
has not been bracing up to expectation for some reasons which boarder on inability to
attract, retain, and actuate personnel effectively and efficiently, (Adeoye, 1977: 11; Ifedi,
1986:3).
Lately, however, it has been noted amongst the hoteliers that though attracting,
retaining, and actuating personnel effectively plays a role here, the bulk of the problem
may centre on the dissatisfaction among the workers on the existing salary and fringe
benefit schemes as well as poor working conditions which leads to such vices as lateness
to work, absenteeism, and in extreme cases outright resignation. This leads to loss of
customer confidence and therefore revenue because, the employee might not even be
around to receive the customer as at when due.
Also, where the employee is on seat, the reception accorded a customer is usually
very cold and sometimes hostile. There have also been some reported theft cases. All
these continue to impede on the desired development of the sub-sector.
It is therefore the thrust of this research study to investigate an aspect of the
problem-poor fringe benefit schemes, with the aim of establishing its effect on the
performance of workers in the industry. And also, making useful suggestions that will
lead to improved fringe benefits administration in the Hotel and Catering industry, as
a way of engendering better performance among the workers, and consequently
enhancing the viability of the subsector.
1.2b. RESEARCH QUESTIONS
Focusing on the aspect of the problem as identified in the foregoing statement,
the questions that arise are:
i) what is the state of fringe benefit programmes in Hotel and Catering industry in
Nigeria?
ii) can the existing benefit schemes be helpful in attracting, retaining and actuating
personnel effectively and efficiently?
iii) can poor fringe benefit schemes act as an impediment to better performance by
workers in the industry?
1.2~. THl% SUB-PROBLEMS
To facilitate the investigation of the problem, certain sub-issues will be addressed.
These include.
i) Which fringe benefits are operational in the Hotel and Catering industry in
Nigeria?
ii) Are they helpful in attracting employees to the sub-sector?

Do they help to retain the services of the enlployees for a longtime in the
industry?
Do they affect the workers level of commitment?
What effect do they have on manpower turnover in the industry?
Do they affect the rate of absenteeism among the workers?
What effect do they have on the workers morale?
THE PURPOSE OF THIE STUDY
The purpose of the study is to assess the impact of fringe benefits on the
performance of workers in the Hotel and Catering industry, and to establish whether poor
fringe benefit schemes could be an impediment to better performance by the workers
thereby hindering the growth – and development of the sub-sector.
1.4 OBJECTIVES OF THE STUDY
This study will examine the impact of fringe benefits on the performance of
workers in the Hotel and Catering industry with a view to:

identifying the fringe benefits that are operational in the Hotel and Catering
industry in Nigeria;
establishing whether thes fringe benefits are helpful in attracting and retaining
employees in the industry;
establishing whether fringe benefits affect turnover, absenteeism, level of
commitment and morale of the workers negatively, thereby acting as an
impediment to better performance by the workers, and consequently inhibiting the
growth and development of the sub-sector.
RESEARCH PROBLEM-ORIENTED HYPOTHESIS
To guide the investigation of the issues raised in the problem definition (1.2a.
7
1.2b and 1.2c), it is hypothesized that;
Fringe benefits are helpful in attracting employees to the Hotel and Catering
industry.
Fringe benefits are helpful in retaining employees in the Hotel and Catering
industry.
There is a direct relationship between fringe benefit ‘packages’ and employees
level of commitment.
Absenteeism among the workers will tend to be inversely related to the firms
level of fringe benefits.
Manpower turnover in the Hotel and Catering industry will tend to be inversely
related to the firms level of fringe benefits.
Better fringe benefit ‘packages’ will have a positive impact on the workers
morale.
SIGNIFICANCE OF THE STUDY
The study is significant in the sense that it will assess the impact of fringe benefits
on the performance of workers in the Hotel and Catering industry as a way of
establishing the level of importance of fringe benefits to the workers, and to the
industry.
The study will also determine whether or not poor fringe benefits schemes
contribute to lateness, absenteeism, turnover, low morale and low level of commitment
among the workers. It will summarily conclude whether or not fringe benefits are
important in attracting, retaining and actuating personnel in the Hotel and Catering
industry.
All these will in a way point to what may need to be done to facilitate faster
growth and development of the subsector.
1.7. SCOPE AND LIMITATIONS OF THE STUDY
The study was intended to cover some of the major areas of development and
administration of fringe benefit schemes with some of its attendant problems. It has
singled out the problem of fringe benefit scheme form the other problems identified as
inhibiting the development of Hotel and Catering industry in Nigeria, for study so as to
ensure a thorough assessment of the situation. The entire work of the research will be
concentrated on employees of all cadre in selected Hotel and Catering firms in Enugu
Urban.
A major constraint on this research study was that of sourcing the relevant
materials, as some of the materials needed were not readily available.
Money was also a serious impediment. This was as a result of the numerous trips
that had to be embarked upon for the purpose of the work. The prevailing fuel scarcity
also contributed to the hike in transport fare. A lot of money was also spent on the typing
and binding of the work. This was particularly felt since the researcher was self
sponsored.
Another major limitation also was that of inability of the Hotel and Catering firms
to make available some useful; materials which they described as classified, and therefore
cannot be made available.
There was also the issue of time factor which enforced on the researcher a lot of
hard work to ensure that the research was completed within the stipulated time.
1.8. DEFINITION OF TERMS
Frinpe Benefits: These are additional benefits (Monetary or non-monetary) available to
the worker as a member of an organization apart frorn the normal salary or wages and
which adds to the total labour cost. It may be legally required like maternity leave
workers compensation, vacation etc. or voluntary, like recreational facilities, cafeteria
subsidies, christmas gift, profit sharing bonus etc,
Tourism: This refers to that sector of a nation’s economy which caters for its need for
recreation, relaxation, leisure and animation of life. It is also viewed as a temporary or
short term movement of people to destinations outside the places where they normally
live and work, as well as activities during their stay at these destinations. In its wider
sense, it encompasses movement for all purposes, including leisure, commerce cultural
exchanges, and relaxation.
.I
The Tourism phenomenon is a result of man’s inherent desire to change his
environment for purposes of psychological satisfaction, as we11 as business exploration.
Tourism is the fastest growing industry in the world today. It preaches to change the
world from the manufacturing dominated economy to service oriented sector.
Effectiveness: This refers to the achievement of pre determined goaIs.
Efficiency: This relates output to input, in assessing how we11 a given output was
achieved with minimum input.
Productivity: This refers to the contribution of a unit input to production output.
Morale: This is the sum total of the ‘attitudes’ of all workers of one group. If we
can discover the attitude of the individual, we can deduce from them the overall morale
of workers in the group. Though ‘attitude’ cannot be measured directly, a man’s attitude
may be revealed indirectly by his verbal declarations.
Hotel: A firm providing lodging and usually meals to the public on a commercial
basis.
Catering Firm: A firm providing light meals and fast-foods to the public on a
commercial basis.

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