THE IMPACT OF FRINGE BENEFITS ON THE PERFORMANCE OF WORKERS IN HOTEL AND CATERING INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

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 uniqueness 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; Ifedi, 1986:3).

In the light of the prevailing harsh economic condition of our time, prudent, management of the organization resources has been called 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 in association with the human resource, arid humans also turn out to be the ultimate consumer of the goods and or services from various organizations in the economy, (Image,1996:19). In recognition of this, management usually 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 Cinderella of general management 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 must be seen as a prime determinant in the success and profitability of even the smallest unit."

A number of workshop/lectures have been organized in Nigeria to find a solution to this problem which may be acting as a hindrance to the desired development of the Hotel and Catering sub-sector. In one such workshop/lecture, it was opined that among other issues like poor salary schemes, degenerate working conditions etc, poor fringe benefit schemes prevalent in the industry may also be part of the reason for the inability of the industry to attract, retain, and actuate personnel effectively and efficiently, (Ifedi, 1986:3)

Fringe benefits have been identified as one of the effective ways management 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 programme/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 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 maximally 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 efficiently, 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 development 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 tourism potential in the country, it 'has been accorded a "preferred sector" status in the national economy, (Ugwu, 1998:42). But touism 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.    STATEMENT OF THE PROBLEM

The Hotel and Catering industry, if well managed and developed has been known to complement 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:

  1. what is the state of fringe benefit programmes in Hotel and Catering industry in Nigeria?
  2. can the existing benefit schemes be helpful in attracting, retaining and actuating personnel effectively and efficiently?
  • can poor fringe benefit schemes act as an impediment to better performance by workers in the industry?

1.2c. THE SUB-PROBLEMS

To facilitate the investigation of the problem, certain sub-issues will be addressed. These include.

  1. Which fringe benefits are operational in the Hotel and Catering industry in Nigeria?
  2. Are they helpful in attracting employees to the sub-sector?
  • Do they help to retain the services of the employees for a longtime in the industry?
  1. Do they affect the workers level of commitment?
  2. What effect do they have on manpower turnover in the industry?
  3. Do they affect the rate of absenteeism among the workers?
  • What effect do they have on the workers morale?

1.3      THE PURPOSE OF THE 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:

  1. identifying the fringe benefits that are operational in the Hotel and Catering industry in Nigeria;
  2. establishing whether these 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.

1.5      RESEARCH PROBLEM-ORIENTED HYPOTHESIS

To guide the investigation of the issues raised in the problem definition (1.2a. 1.2b and 1.2c), it is hypothesized that;

  1. Fringe benefits are helpful in attracting employees to the Hotel and Catering industry.
  2. 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.
  1. Absenteeism among the workers will tend to be inversely related to the firms level of fringe benefits.
  2. Manpower turnover in the Hotel and Catering industry will tend to be inversely related to the firms level of fringe benefits.
  3. Better fringe benefit 'packages' will have a positive impact on the workers morale.

1.6      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

Fringe Benefits: These are additional benefits (Monetary or non-monetary) available to the worker as a member of an organization apart from 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.

The Tourism phenomenon is a result of man's inherent desire to change his environment for purposes of psychological satisfaction, as well 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 goals.

Efficiency: This relates output to input, in assessing how well 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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