CHAPTER TWO: LITERATURE REVIEW
2.3.1 Factors Affecting Compensation
2.3.2 Types of Compensation
2.3.3 Role of Compensation to Employee
2.3.4 Objectives of Compensation
2 .3.6 Roles of Incentive
2.3.7 Training and Development
2.3.8 Difference Between Training and Development
2.5.1 Entrepreneurship Perspective
2.5.2 Entrepreneurial Process
2.5.3 Entrepreneurial Management
2.5.4 Who is an Entrepreneur
2.5.5 Characteristics of Entrepreneur
2.5.6 Conceptual Frame Work
2.5.7 Theoretical Frame Work
2.5.8 Empirical Frame Work
2.5.8 Historical Frame Work
CHAPTER THREE: RESEARCH METHODOLOGY
3.2 Research Method
3.3 Research Design
3.4 Study Population
3.5 Research Sample Frame
3.6 Data Source and Data Collection Procedure
3.7 Research Instruments
3.10 Validity Test of Research Instrument
3.11 Reliability of Test of Research Instrument
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.2 Data Analysis
4.3 Testing of Hypothesis
SUMMARY, CONCLUSION AND RECOMMENDATION
5.2 Summary of Chapters
5.3.1 Theoretical Findings
5.3.2 Empirical Findings
5.5 Conclusion and Policy Implications
5.7 Contribution to Knowledge
In Nigeria entrepreneurship, (small business enterprise) accounts for
substantial part of the total industrial employment, production, and
value-added in Nigerian business concerns. Okongwu (2001) explained that
small business enterprises generate the industrial wealth of Nigeria in
addition to being a major agent in the economic, technological, social
and political growth and development of Nigeria, not minding the
presence of multinational and other large firms in Nigeria such as
Shell, Mobil, NNPC, NITEL, NPA, NPHC, Lever Brothers, Nestle Foods and
Through small business entrepreneurship, jobs are created not just
for the entrepreneurs themselves but also for other people in the
Nigerian economy. The aftermath of creation of jobs is reduction in
dependence on government to provide everybody with jobs, reduce
government expenditure, improve standard of living of Nigerians, reduce
social ills in the society, create balanced budget for the economy and
invariable leads to higher Gross Domestic Product (GDP).
Entrepreneurs, through efficient and effective entrepreneurship
practices and strategies contribute substantially towards economic
development by producing and introducing new goods, services and ideas
into the market or through new production methods or technologies.
Entrepreneurial business organization or individuals are propellers of
contemporary world economies. The conceptualization, development,
production and commercialization of new goods and services and ideas can
revitalize ancient industries or create entirely new ones.
Entrepreneurial business companies and individuals are the change agents
that accelerate modern societies forward and engender beneficial
innovations via continuous improvement, creative destruction of old
offerings and process and creative transformation of systems and
cultures (Kropp and Zolin 2005). :
Therefore, for Nigeria to be reckoned with in the community of
nations economically, there is the important and urgent need to
encourage entrepreneurship in small business enterprise in the country.
It should be a managerial and governmental policy to note always that
entrepreneurship is needed in the Nigerian economy to create jobs,
reduce unemployment rate, crime rates, government's expenditure,
poverty, social unrest, create wealth, raise productivity level of the
economy, provide certain services conveniently and raise the standard of
living of Nigeria. For the Nigerian economy to be strong and stable in
the relevant sectors, there is the need to emphasize and practice
entrepreneurship in small business enterprises through the enactment of
relevant policies, efficient and effective management practices, and
provision of the enabling environment in Nigeria.
Success or productivity of entrepreneurship is closely related to
employee and employee remuneration. The ability to remunerate employee
is generally considered an essential management tool in achieving
entrepreneurial productivity. Adequate employee remuneration motivate
employee towards putting in their best which in turn leads to increased
Employee remuneration is defined as, "the reward or compensation
given to the employees for their work performances. It is a method of
promoting morale, increasing motivation and foster team cohesion. there
two main types of employee remuneration namely Piece Rate method and
Time Rate method. the former is compensation based on unit productivity,
while the latter is the time an employee spends on a job, such as
finishing a project before a deadline.
1.2 STATEMENT OF PROBLEMS
Employees in most private organizations in Nigeria are not well
remunerated in the work place and this has been brought about low
Management seems to ignore the factors that create conducive
environment for compensation such as good working environment,
appropriate and adequate remuneration, promotion, training and manpower
Research has shown that in private sectors, little or no attention is
paid on employee remuneration and motivation. More emphasis is placed
on more productivity and increased productivity.
In today's competitive world, management needs to continuously
emulate practices that will attract and retain a highly qualified and
skilled workforce. Dissatisfied employees may be forced to work due to
unemployment or insecurity, but this is not in the interests of the
long-term success of the organization. Inadequate employee remuneration
brings about dissatisfaction which in turn brings about low
entrepreneurial productivity. Dissatisfaction may be expressed in other
forms like internal conflicts, poor interpersonal relations, low trust,
stress leading to workplace conflict, and violence. It is generally
recognized that employees currently in the work force are more concerned
than their predecessors with the quality of their working life and with
the associated psychological reward. It is doubtful however, whether
many of them would continue working if it were not for remuneration.
This further brings to lime light the relevance of remuneration in an
1.3. OBJECTIVE OF STUDY
The most visible reward for work is monetary. Not surprising
therefore, that employees place great emphasis on matters relating to
their remuneration. The main objective of the research study is to
identify the impact of employee compensation on entrepreneurial
Other objective of the study include the follow:
i. To highlight the need for adequate remuneration especially in the private sector.
ii. To enumerate the effect of inadequate remuneration on entrepreneurial productivity
iii. To examine the correlation between remuneration and employee performance.
iv. To evaluate the problems inhibiting the performance of
employees and acknowledge them in terms of improving employee
remuneration and training/development.
v. To address the increasing issue of job dissatisfaction which
account for major reasons for low entrepreneurial productivity.
vi. To highlight the need for employee promotion in relation to entrepreneurial productivity .
vii To bring to bare, the causes of high labour turnover and seek ways to address it.
viii. To highlight the role of compensation in attracting and retaining right caliber of employee.
ix. To further emphasize on the need for employee utmost participation in achievement of organizational goal.
1.4 RESEARCH QUESTION
To address the research problem empirically, it is necessary to build
a conceptual and prepositional foundation that will help to appreciate
the relative importance and possible inter-relationship between
employees’ compensation and entrepreneurial productivity.
Below are some of the research questions of the study.
i. To what extent does employee remuneration affect entrepreneurial productivity?
ii. Does employee training and development have any impact on entrepreneurial productivity?
iii. Does staff incentive have any impact on entrepreneurial productivity?
iv. To what extent does promotion affect employee performance?
1.5 RESEARCH HYPOTHESIS
To provide systematic answers to the research questions. Attempt will
be made to explore the relationship among variables highlighted in the
The following hypothesis will be tested:
H1: Employee remuneration does not affect entrepreneurial productivity.
H2: Employee training and development do not have any impact on entrepreneurial productivity.
H3: Staff Incentive does not have any impact on entrepreneurial productivity.
H4: Promotion does not affect employee performance.
1.6 SIGNIFICANCE OF THE STUDY
The study will be of immense importance to many sectors such as
students, employees and management especially human resources managers
who will adopt the findings of this research for better compensation
scheme for their workers. The research, when completed, will create a
corrective measures which if put into use will enhance further
efficiency. Finally, it is hoped that this research will be of
tremendous help as well as a source of reference for further research.
1.7 SCOPE AND LIMITATION OF STUDY
This study covers the extent to which employees remuneration affect
or improve entrepreneurial productivity. Employee remuneration however,
is not the only factor that influences entrepreneurial productivity but,
due to financial and time constraints, this study shall be limited to
the impact of employees' compensation on
entrepreneurial productivity; the scope and area of coverage will
however, be limited to Flying Eagle Shipping Limited, a private firm
engaged in international logistics with head office located at Surulere,
Operationalization simply put is the difference or disparity between
the independent and the dependent variable of a research work. The
independent variable as the name implies is the main variable used in
the research and can be manipulated by the researcher. The dependent
variable is dependent on the independent variable and also manipulated
by the independent variable. This research work tries to highlight the
impact of the independent variables on the dependent variable.
For the purpose of this research work, the independent variable are expressed below
Y = f(X}
Where Y = Dependent Variable
X = Independent Variable
f = Function
i.e EP = f(EC)
EP = Entrepreneurial Productivity
EC = Employee Compensation
EP consist of the following
Y = EP = (Y1. y2, y3, y4 ……………..Yn)
Y1 = Increased Performance
Y2 = Increased Output
Y3 = Increased Profitability
Y4 = Increased Market Share
X = EC = (X1,X2,X3,X4…………………………Xn)
EC consist of the following
X1 = Remuneration
X2 = Incentive
X3 = Training and Development
X4 = Promotion
This research study only covers the analysis between the variable of
productivity construct (increased performance, increased output,
increased profitability and increased market share) and the variable of
employee compensation construct (remuneration, promotion, training and
development and incentive).
1.9 PROFILE OF FLYING EAGLE SHIPPING LIMITED
FLYING EAGLE SHIPPING LIMITED is an International Freight Forwarder,
Relocation, Removal and Storage Company designed to render highly
professional and personalized service in the areas of International
Freight Forwarding, Clearing of Consignment from the Sea and Air Ports
with services covering International Freight Forwarding, International
Removal & Relocation of household goods and general cargo, Custom
Clearance, Door to Door Services, Local and International Removal,
Haulage, Warehousing and Project Handling. Flying Eagle Shipping Limited
has its Head Office located at 2 Okanlawon Ajayi Street, Surulere,
Lagos and Branch Offices at Abuja, Port Harcourt, Calabar, Warri. Also
have full fledged offices in Abidjan, Mali and Ghana. The company is
custom licensed and incorporated in 2001 under the Company and Allied
Matters Decree of 1990.
Flying Eagle Shipping Limited provides international moving services
of the highest quality. She has a team of efficient professionals who
guarantee sound international Move. Removal services are carried out in
the most professional way by a team of highly trained and well-equipped
1.10 SCOPE OF SERVICES RENDERED BY FLYING EAGLES SHIPPING LIMITED
- Customs Clearance at all Nigerian Air & Sea Ports viz.
Lagos - Apapa & Tin Can Island Ports, Lagos; Port Harcourt - Area 1
& Onne (FOT & FLT); Calabar Port; Lagos - Murtala Mohammed
International Airport, Lagos; FCT, Abuja - Nnamdi Azikwe International
Airport, Abuja; Port Harcourt - Port Harcourt International Airport,
Omagwa; and Kano - Aminu Kano International Airport, Kano.
- Export Processing and Forwarding of Commercial Cargoes and
Personal Effects to Worldwide destinations through at all Nigerian Air
and Sea Ports listed above
- Repairs and Return of Equipment, Machinery and Tools to and
from over 700 worldwide destinations in partnership with Flying Eagles
- Door to door and door to port handling of inbound I outbound
commercial cargoes and personal effects from over 700 worldwide
destinations. Our constant and frequent usage of various trade routes in
the world accounts for our strength, stability and ability. This has
qualified us for discount facilities from major Airlines.
With effective use of high level information equipments and a team of
top-of-the-line professionals, we lift cargo from any part of the world
and deliver to customers door step (irrespective of volume).
- Local and International removals and relocation of Household Goods & Personal Effects.
- Industrial relocation including dismantling, removal,
transportation and reinstallation of Machinery and office structure.
- Handling of diplomatic cargoes on door to door and door to port basis.
- Heavy Duty Haulage and Transportation within Nigeria.
1.11 DEFINITION OF TERMS
This is defined as multiplicative function of motivation and ability.
It is an overall measure of the ability to produce a good or service.
More specifically, productivity, is the measure of how specified
resources are managed to accomplish timely objectives as stated in terms
of quantity and quality.
This refers to an inner drive that compels and moves an individual to act or behave in a certain way I manner.
Tannehill (1970) defined motivation as an influence, a force that gives
rise to behavior. He went further to say that motivation is something
that makes people to move in a given direction, not with a threat or
force but some promise of reward.
- ORGANIZA TIONAL EFFECTIVENESS
According to the Merriam Webster Dictionary, organizational
effectiveness can be defined as an organization that produces a desired
effect. Likewise, organizational efficiency can be described as an
organization that is productive without waste. The desired effect will
depend on the goals of the organization. In a nut shell, it refers to
the extent to which output is in line with organizational objectives.
This is defined as the art, science or
process of combining and utilizing the physical resources and human
resources of the organization to achieve the organizational objective.
Extra payment made to workers in order
to motivate them into higher performance and productivity. Monetary
Incentives: These are incentives granted in the form of financial
rewards, which include bonus, pension scheme, leave allowance etc.
Mc Gowan (1999), Entrepreneurship can be
seen as a process which involves the effort of an individual or
individuals in identifying variable business opportunities in an
environment and obtaining and managing the resources needed to exploit
those opportunities. Drucker (1985), considers entrepreneurship as
innovative process of converting an idea into market place reality by
exploiting opportunities, He notes that entrepreneurship is
practice-behaviour. McClelland (1961), entrepreneurship is "a dynamic
process created and managed by an individual, the entrepreneur, who
strives to exploit economic innovation to create new value in the market
toward achieving a particular need."