Effect Of Retrenchment On The Moral Of Workers And Productivity (A Case Study Of Federal Radio Corporation Of Nigeria)

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Effect Of Retrenchment On The Moral Of Workers And Productivity (A Case Study Of Federal Radio Corporation Of Nigeria)


Abstract


This research work is a study of Federal Radio Corporation of Nigeria. Survey research was used, which helped to standardize the research questions to the respondents. Specifically, the objective of the study was to assess the effect of retrenchment on the moral of workers and productivity using a case study of Federal Radio Corporation of Nigeria. The researcher made use of both primary and secondary data to achieve the comprehensiveness of the study. To determine the sample size of the study, the researcher used the Burley’s rule. The key findings of the study are that retrenchment is perceived differently with a negative perception as an organizational change and as well workers always try to resist it due to the uncertainly it comes with, it ridicule permanence of serve and create job insecurity and also dampened the morale of workers. Recommendations made include that a counseling section should be created as a structure to deal with psychological and emotional trauma of the retrenchment exercise, settlement of retrenched workers with all entitlement should be immediate to enable them found another means of livelihood and also the involvement of stakeholders (Labour Union) in decision-making.


Chapter One


Introduction

1.1 Background of the Study

A change in government can initiate and bring in political that might effect the economy and standard of living of any state or nation. This can lead to reorganization, reform and restructuring within the tiers of the government. It is not uncommon for job loss to result, and in some cases may create an avenue for the government to move forward and thrive. A range of factors may cause loss of employment from stringent politics, reform, and technological change to privatization, and to total displacement, retrenchment or disengagement.

No single concise definition or universally used terminology exist to categorize such job losses. Terms used can include; Retrenchment, Redundancy, disengagement, downsizing or lay-off. The term “retrenchment”, which covers a wide range of dismissal that do not relates to the conduct or capability of the workers and include;
Job losses arising from reduction in staffing requirements due to inefficiency gains or demand for the services
Job losses arising from downsizing in operation or restructuring of the workforce following for example, privatization.

Retrenchment is a government-initiated policy, ministry-wise to cut down the number of employees and subsequently, reduce costs incurred (Hansen and Twaddle, 2002:78). This policy is what the then Enugu State Governor in 1999 implemented in the Civil Service as a reform programs by disengaging more than 4,500 civil servants in the state, but it created problems as low salary pay, no motivation, no benefits ands allowances in time, poor management, nut instead the government sees it as dysfunctional and high number of inadequate personnel redundancy, poor public service attitude and massive bureaucratic red type.

In 1988, the then President and Commander-in-Chief of the Armed Forces of Nigeria, General Ibriahim Badomasi Babagida carried our some fundamental change in the Civil Service, which is the major structural Civil service Reform in the country. This Civil Service Reform had specific objectives, which included to improve the general services delivery to the government and public, improve financial viability in the short and medium term, strengthen capacity and reverse the progressive decline in public service efficiency and effectiveness (Vanguard, 1988:21). In motion to attain these objective, some organization set several strategies in motion, such as disengagement/retrenchment or downsizing. The main objection of this retrenchment was to reduce the size of the workers and thereby cut down the emolument costs. This supposes to be in anticipation to improve salaries and allowance, increasing motivation and morale of workers, and improve quality of work life and performance of workers.


1.2 Statement of the Problem

The persistent economic depression in the world which increasingly bewildering Nigeria for some years now has compelled citizens, industries, banks and other business contemporaries, big and small to take extensive far reaching measures in the struggle for survival by cutting costs. The Nigerian civil service (Federal, State and Unified Local Government Service) forms the machinery through which the government carries its basis objectives. In accordance with the Civil Service General Order (G.O.), rules and regulations (1978:17) guiding it in the pursuit of its goal and objective are basically applied to sustain continuity of existence, permanence, professionalism and impartiality. The Civil Service is one of the means through which Government in power tries to legitimate itself and command allegiance from the society. It is also a channel through which the Government fulfills its budget promises, policies and proposals to its citizens. Therefore the society sees the civil service as a continuous and indispensable machinery of Government and as such demands from it. As the society grows, so also the burden of Government and in turn the civil service but unfortunately, the successive retrenchment exercises in the country especially in the public service and banking industries poses economic and social threats. According to (Webster’s Ninth New Collegiate Dictionary, 2000;1001), retrenchment is the act of cutting down expenses, live more cheaply, to reduce amount of, curtail expenses in order to economize. It could also be seen as the act of terminating the services of workers; when the job ceases to exist; usually as a result of technological, political or economic changes.

Retrenchment, which is, a recent phenomenon in the Nigerian Civil Service started in 1970s by the Military Head of State as a result of recession after the civil war. According to (Adebayo, 1999:32), there was services in which, though the intention was laudable, the execution left much to be desired, the active servants were thrown out with the inactive ones, an unfortunate situation, many lost their jobs. This could be seen in an editorial, “Agony of Retrenchment” (Agbese, 2001:11), where some public servants were laid off.

Such exercise is carried out in Federal Radio Corporation of Nigeria where more than 4,500 workers were disengaged, in most of this instances of retrenchment, the major reasons given are:

  1. Low productivity
  2. Due year of services (retiring age of 60 and 35 years of service)
  3. Inefficiency
  4. Redundancy
  5. Gross Misconduct (fraud, disloyalty, dishonesty, etc)
  6. Corruption and embezzlement
  7. Poor health condition
  8. Over staffing and absenteeism
  9. Misappropriation
  10. Ethnicity and red tapism.

The objective of this research work is to find out if the above claimed reasons

for retrenchment of civil servants were the genuine and true reasons for the exercise or not, or a combination of them. The work will also be interested in finding out the effects of this exercise on the morale and perception of workers both the retrenchment and those retrained. It will also look into the alternatives in relation to this exercise.


1.3 Research Questions

In order to properly find out the effects of retrenchment on the morale of

Workers in Federal Radio Corporation of Nigeria the following questions help to guide the researcher in the quest:

  1. What are the effects of retrenchment on the morale of workers?
  2. What alternative action would have been taken preferred than retrenchment?
  3. What are the major reasons for the retrenchment exercise?
  4. What is the workers perception regarding retrenchment?
  5. Does retrenchment show feeling of job insecurity to employees?

1.4 Objectives of the Study

Retrenchment of workers is the major cog in the wheel of economic progress throughout the nation because it causes a rapid growth in the rate of unemployment. It reached a height during the Military era and now the politicians in their course for self-aggrandizement, selfish interest and to amass wealth. The specific objectives of this study are to:

  1. Assess the effects of retrenchment on morals of workers.
  2. Identifies alternative to retrenchment.
  3. To find out the reasons for retrenchment of workers.
  4. To ascertain ways retrenchment can be implemented.
  5. Identifies the advantages and disadvantages of retrenchment.

1.5 Research Hypothesis:

  1. Ho: Retrenchment does not show any feelings of job insecurity to employees.
    H1: Retrenchment shows feelings of job insecurity to employees.
  2. Ho: The workers have a negative perception regarding retrenchment.
    H1: The workers have a positive perception regarding retrenchment.

1.6 Significance of the Study

Government policies on retrenchment of workers are like a mad dog barking at the owner because of the increasing rate of unemployment in the country. The government is to provide for the citizens not the other way round. The motive and rationale behind this study is to create a solid bas for the Nigerian Labor Congress (NLC) to help fight unnecessary retrenchment of workers in recent times and for the government both Federal, State and Local governments to see the need for creating employment through recruitment than result in laying off workers and make like unbearable for the affected and their dependants. A good recruitment exercise enhances productivity and also reduced cost and labor turnover rate and employee dissatisfaction (Nwachukwu, 2002:38).

The findings and recommendations of this research work will help the government, Federal and Federal Radio Corporation of Nigeria Commission, banks, other agencies and authorities of the nation especially developing countries to see the effects on morale of workers. The study will b significant to the Society, the general public, human resources managers and business practitioners as it relates to management of work force, workers and their dependants. Academicians and students especially those in the field of Public and Human Resources Management will benefit from this study since it will serve as an additional source of information.


1.7 Scope of the Study

The scope of the study encompasses effects of retrenchment on the morale of workers on Federal Radio Corporation of Nigeria. The research will also apply descriptive analysis of findings and this will be based empirically on two sources, the primary sources of questionnaire and interview administration to workers while the secondary sources of data include, making use of the National, State and school libraries, internets, textbooks, magazines, newspapers, consulting official documents in offices/ministries’ libraries/archives and reference works.


1.8 Limitation of the Study

The limitation of this research work is constrained to Federal Radio Corporation of Nigeria. The major impediments that restricted the scope where text books, journals, magazines, and other relevant materials that would provide or aid the researcher with needed information which were not available. Others include finance, which is the major setback due to the present economic recession, time available to research for this work is very short and does not give room for thorough job and understanding of works toward the research especially those affected in 1999 and had been recalled to work by the new State Government, their felling is that it might be another measure to carry out another exercise, some workers attitude was appalling because they saw it as a waste of time and the findings cannot be implemented.


1.9 Definition of Terms Retrenchment

Retrenchment is a government initiated, ministry-wide exercise of cutting down the numbers of employees aimed at cost reduction. This cutback of the employees is determined by various reasons and is aimed, in the long run at improving the quality of services delivered. (Hansen and Twaddle, 2002:78).

Morale

This is the mental and emotional condition of an individual or group with regards to their functions or tasks at hand. Morale is a feeling, some what related to spirit de corps, enthusiasm … (Olewe, 2001:15).

Civil Service

It is being defined by the civil service handbook (1978:15) as a body or an organ of government, which enjoys continuity of existence.

Inefficiency

This is state of being wasteful, (of person) wasting time, energy etc in their work or duties, not producing adequate result.


1.10 Organization of the Study

This study is organized into five chapters. Chapter one included the background of the study, research problem, research objectives and questions as well as limitation of the study. Chapter two contains the literature review. Chapter three includes the methodology and study area. Chapter Four contains the results and discussion of key findings of the study. Chapter Five finally looks at the summary, conclusions, and recommendations based on the findings.


Chapter Five


Summary of Findings Conclusion and Recommendations

5.1 Summary of Findings

This chapter deals with the summary of findings, recommendations, and conclusion. The conclusion will be drawn based on the results of the analysis of survey carried out in chapter four, while the recommendations are made based on the findings. Questionnaires, observations and oral discussion/interview were used in the collection of data for this research work, based on the analysis made, the researcher gathered that this research wok was to establish public officers’ perceptions on retrenchment, the effects of the exercise on the morale of workers, factors on the individual and organizational performance and also the quality of work like in the Federal Radio Corporation of Nigeria. The result indicated that retrenchment had a higher negative effect and depends on the factors in question under consideration. The researcher found out that retrenchment was perceived differently by respondents, many view it in a negative perception and as an organizational change as well try to resist it due to the uncertainty it come with.

The fact that negative perceptions stem from the way retrenchment was designed and implemented is questionable as the worst phase of retrenchment of worker in 1999 by the then Enugu State Government, which based on biased governance and subjective criteria. Some of the senior public officers saw retrenchment a chance to victimize some employees. Other findings show that retrenchment was carried out by the government on the basis of inefficiency and misconduct on the part of workers and redundancy which in most cases were caused by government due to successions in governance.

The research also found out that most retrenchment exercises carried out are based on the incompetence of workers and their disloyalty to authorities and also some workers who have reached the compulsory retirement age of sixty (60) years and thirty-five (35) years of service, were among those affected in the retrenchment exercise. Another finding was that even when the exercise was carried out to increase productivity and cost reduction, it could not achieve its objectives rather productivity is found to be low. This was because the remaining workforce felt threatened and insecure, the Labour Union leaders intervened to no avail. The workers also alienated from their jobs because of the fear of being retrenched at any time, initiative and creativity were lost in the service because of the workers morale and their individual perception.

The research work also reveals that there is no policy for determining those to be retrenched and the procedures for the exercise, if need be, these procedures were unnecessary and not followed. Hence the productive workers were laid off with the inefficient and redundant workers, also ethnicity (the locality/zone from which one comes) takes a part. It also found that even when some organizations claim that they are retrenching workers in order to save cost and to enable them meet up with the payment of salaries, allowances and other contingencies, the workers are not paid as at when due, and promotion of workers not regular. There was evidence that the consequences of retrenchment are hardship and poor living standard, “it is an ill wind that blows no one any good”. The insomnia of the news of the intention of government to retrench workers could be better being experienced than imagine. Respondents on this issue maintained amongst other things that retrenchment has:

  1. Ridiculed permanence of service
  2. Dampened the morale of employed workforce and reduced work strength
  3. Retarded growth of service
  4. Led to the proliferation of all sorts of heinous crimes
  5. Made nonsense of the security of job and the tenure of service
  6. Workers have negative perception on their work and governance.

Other social and economic consequences in the retrenchment exercise carried out by the government, discovered in the research are:

  1. Reduction in economic activities and economic sabotage
  2. Fall in the standard of living
  3. Increase in social vices as bribery, robbery, kidnapping, fraud, etc
  4. Insecurity of service and consequent brain drain
  5. Loss of faith and trust in government as an employer of labour.

5.2 Conclusion

It was concluded from the findings that the majority of the respondents identified some factors that hindered their performance after retrenchment. These factors include: inadequate funding, low motivation and morale, work overload, job insecurity and poor training, etc. These factors seem to be real problems even after retrenchment exercise by government and suggested ways included paying a living wage, improving welfare, training of workers, motivation and morale boosting of workers, improved conditions of living and service, improving chances of promotion and capacity building, reduction of job insecurity, computerization and timely reshuffle. Some of these suggestions have already been identified by government and appear in the strategies government is using to improve the performance of civil servants but lack implementation.

Retrenchment had negative effects on many aspects of organizational performance and reduces the sensitivity of service to the public. This does not relate well with the overall goal of the Civil Service Reform Program, which is the provision quality service to the public and job security. Retrenchment has also been associated with marred team, participation in decision-making, quality leadership and supervision, lack of creative management and information management. Improved information management is among the vision of the Civil Service Reform but retrenchment had reduced the departmental performance.

On the other hand, majority of the respondents reported that retrenchment had major effect on the morale of workers, job design, training opportunities, feedback of performance, chance of promotion and selection procedure. This implies, in part, that retrenchment, as a strategy has not assisted in achieving some of the objective of the civil service and ridicule permanence of service. Regarding occupational perception and attitudes, the majority of respondents reported on change in motivation and morale of workers, job satisfaction and organizational commitment. Report shows that these attitudes are poor, which implies that, regarding this attitudes the situation in the civil service is still bad, inefficiency and ineffectiveness. It is hoped that if the recommendations of this study are implemented, positive changes in these attitude will result.

Furthermore, a majority reported dissatisfaction with current salary package and their inability to meet most of their financial needs. Government had already tackling these problems through phased increment of salaries depending on the recovery of the economy and the effect of inflation should be looked into and considered when determining salaries. The lack of living wage was always cited as a major issue in industrial strike. Another aspect of quality of work life assessed was job insecurity. A high percentage respondents reported job insecurity and was due to the fact that retrenchment was badly implemented. The rationale and criteria for retrenchment were not clear to workers and procedure not followed. Government decisions were largely subjective. This is true with respect to the number of retrenched civil servants without entitlement.

The rationale and criteria for retrenchment should be made clear right at the beginning. Senior officers should take caution not to use retrenchment as an opportunity to punish employees they think are uncooperative and disobedient. Rather they should be objective in applying the criteria for retrenchment. An attractive severance package will also serve as an attractor for those employees who want to separate with the organization voluntarily or involuntarily. The process of retrenchment should be made as transparent as possible. The above measures coupled with increased skills in performance evaluation should reduce the problem of job insecurity. Existence of these problems further shows that some of the strategies for retrenchment did not work as planned by the government. But some respondents reported that after retrenchment, participation in decision-making had increased, all stakeholders should encourage this welcome development because it cause the parties to be committed to decision taken.


5.3 Recommendation

Generally, it is in knowledge that the Civil Service, which is government bureaucracy, touches all aspects of human endeavor. In fact, it is the highest employer of labour in the country and the biggest provider of social services both at subsidized and reduced prices. Based on the study’s findings and conclusions, the researcher’s recommendations are:

  1. Since employees have negative perceptions about retrenchment of workers and is likely to have a serious impact on the early stage of implementation, senior officers in charge of the exercise should be sensitive to employees perception and work on them through seminars, and public relations, take to study the perceptions with the view of changing them.
  2. Normally, tactics in handling organizational change are important and Government should involve the stakeholders (Union Leaders) early in the process of change and giving information, participation in decision-making, which will ensure commitments to the process of change. The rationale and criteria of retrenchment should be explained early in the process through improved public relations. This is how organizational change should be managed.
  3. Government should see to the settlement of retrenched workers with their entitlements immediately to enable them look for other means of livelihood, retrenchment if not fairly done develops job insecurity and in some cases might lead to political, social or industrial unrest which may cause more damage and thus increasing cost of retrenchment.
  4. Retrenchment had seriously affected the performance of the service and hampered service delivery, in this cause government should put in place a code of conduct for ethics and integrity and also anti-corruption agencies to reduce corruption in the service, which includes low employees performance, non punctuality, employees irresponsibility, disloyalty, indiscipline, lack of accountability etc.
  5. A counseling section should be created as a structure to deal with the psychological and emotional issues that arise in the process of retrenchment including job insecurity. This structure can service the retrenches as well as providing general information about retrenchment. In addition, the public relation, function, as suggested above improved to explain the meaning of the retrenched workers.
  6. As an alternative instead of retrenching workers in large numbers, their increment and other allowance should be withheld to reduce cost and increase the subvention of the government, as it is the major reasons for the retrenchment
  7. A change in government should not affect the tenure of the incumber staff in the service because it affects the worker morale and perception towards their work and government
  8. On the other hand, an employees who is found to be inefficient due to ill health should be sent to an established medical board to determine how fit the employee can remain in the service, if found to be unfit, the usual notice and procedure should be applied before lay-off
  9. Government should make new policies that will in increase productivity in the service, functional and effective not to the detriment of the employees and lead to agitation

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