CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Organizations
have realized that the performance of their workers plays a vital role in
determining the success of the organization (Zheng et al, 2010, Ajila and
Awonusi, 2004). As such, it is important for employers and managers alike to
know how to get the best of their workers. One of the determinants of workers performance
has been linked with employee’s commitment (Ali, 2010, Dex and Smith, 2001).
Akintayo (2010)
and Sigye (2010) noted that one of the reasons why commitment has attracted
research attention is that commitment is used to maintain competitive advantage
and achieve superior performance. Committed employees who are highly motivated
do contribute their time and energy to the pursuit of organizational goals and
are increasingly acknowledged to be the primary asset available to an
organization (Hunjra, 2010). Furthermore, an employee who shares a commitment
to the organization and the collective well beings are more suitable to
generate this social capital that facilitates organizational learning.
It is therefore
important for companies to know the aspects that play important role or have
big impact on boosting the commitment of their employees. Several factors had
been identified in the literature as determinants of employee’s commitment. The
finding of Ponnu and Chuah (2010) suggests that employee’s commitment with an
organization could be significantly increased by enhancing organizational
fairness, particularly procedural justice which would consequently reduce
employee’s intention to leave. Ali et al (2010) found that there is positive
relationship between corporate social responsibility and employee commitment as
well as between employee commitment and organizational performance. They
therefore concluded that organization can improve their performance through
employee’s commitment by engaging in social activities since such activities
include the welfare of employees and their families.
It is against
this background that this study examines the relationship between employees job
commitment and organization performance, using Unilever Nigeria plc as a point
of reference.
1.2 Statement
of Problem
Employers are
sometimes baffled when their highly rated employees put up poor performance and
others resign and leave. Management fail to understand why some employees are
not committed to the organization even though they have proactively implemented
fair compensation policies and human resource (HR) practices to motivate and
retain them. It can be costly if employees are not committed on their jobs, and
if they lack the motivation to exercise their full potentials. The main focus
of this study is to examine the relationship between employee’s commitment and organization
performance.
1.3 Objectives
of the Study
The broad
objective of this study is to examine the relationship between employee’s
commitment and organizational performance in Nestle Nigeria Plc.
The specific
objectives of the study are as follows:
i.
To
investigate the effects of employee’s commitment on organizational performance.
ii.
To
examine the relationship between employee’s commitment and labour turnover.
iii.
To
examine the impact of fair compensation management on employee’s commitment.
iv.
To
offer recommendation on how best employees commitment can be boosted to enhance
organization performance.
1.4 Research Questions
This
study shall attempt to answer the following research questions:
i.
Does
employee’s commitment enhance organizational performance?
ii.
What is
the relationship between employee’s commitment and labour turnover?
iii.
Does
fair compensation management policy guarantee high performance or commitment
from the employees?
1.5 Research
Hypotheses
The research
hypotheses to be tested during the course of study
1.
H0:
Employee’s commitment does not enhance organizational performance.
2.
H0:
Lack of fair compensation management policies cannot lead to low commitment.
3.
H0:
There is no relationship between employee’s commitment and labour turnover of
an organization.
1.6 Significance
of the Study
This study has
direct implication for today’s industrial world for the strategic role of the
managers as agents to change the organizations with the increasing competitive
nature of the business world, employers and managers are posed to strive to
improve their performance. An important element in the organization that
determines its performance is its labour force.
The extent to
which committed employees affect organizational performance cannot be over
emphasized. Labour turnover rate is skyrocketing and employees are moving from
one organization to another in rapid succession taking with them the entire
original learning. To curtail this huge loss of human capital, it is necessary
for an organization to know which work increases employee’s attachment to the
organization and the motivation to work for the organization. This study is of
significance to management executives in their quest to enhance workers’ commitment
in their organizations.
The study will
also assist students and other researchers in the effort to investigate similar
challenges in the future.
1.7 Scope
of the Study
The
scope of this study covers the relationship between employee’s job commitment
and organization performance using NESTLE Nigeria Plc, Agbara as point of
reference.
1.8 Definition
of Terms
The following are
the definitions of key terms used in the study;
Commitment: It refers to the individual’s psychological attachment
to the organization.
Employee’s Commitment: The degree to which employees are bound
emotionally or intellectually to the organization.
Employee’s turnover: It is the rate at which an employer gains and
loses employees.
Organizational performance: It comprises the actual output or results of
an organization as measured against its intended outputs (or goals and
objectives).