The Effect Of Salaries And Wages On Worker’s Performance In Educational Sector

Project and Seminar Material for Industrial Relations and Personnel Management

The Effect Of Salaries And Wages On Worker’s Performance In Educational Sector


The study comprehensively delved on the effect of salaries and wages on workers performance in the education sector. The objective of the study is to examine whether increment in wages and salaries serves as motivator to retain worker in an organization and to examine whether inadequate pay to workers can lead to absenteeism, lateness and strikes etc. the survey research method was employed in this study, the questionnaire was the major instrument used to collect information from the respondents.

The chi-square test was used to analyze the collected information from the respondent at 5% level of significance. The result of the analysis revealed that inadequate salaries and wages may lead to brain in the education sector. The study also reveals that salaries and wages help employees to achieve organizational goals and objectives and it was recommended that the study educational sector should make sure that the compensation rewards given to the employees is in commensurate with the labour on service he / she rendered.

Chapter One


1.1 Background Of The Study

Salaries and wages are the main marketing tolls companies use to attract qualified employees, and it is one of the largest operating. Costs for large organizations. The long-term success of a firm perhaps its survival many depend on how well it can control employee cost and optimize employee efficiency.

For the owners of the company, wages and salaries represents a substantial part of the total costs of doing business. How well the company controls these costs and how much employee productivity. If obtains in return can have an important effect on the success of the enterprise.

The employee’s view of wages and salaries structure is generally different in important respects from that of the company. This is one of the key compensation problems in many enterprises. Even when the pay programme is sound, well administered, and effectively communicated, difficulties can arise if employee aspirations are out of phase with company objectives or if !he employee’s concept of a fair and equitable programme is different from that of the company.

To some extent, there are always some conflicts between employees aspiration and company need. For instance, employees always want more; but employers need to control wages costs or at least administer the pay programme within the restraints of their financial capacity. These criteria of course are not totally at odds. As cost of living rises and as pay levels in the labour market increase in an inflationary economic the company must increase its employee’s pay in order to attract and retain the number of people necessary to run the business. The conflict of view is one of degree; .an employee aspiration typically exceeds company needs for granting increases (Obikoya, 1996).

Anemployee’s definition of “fair” wages and salaries will depend upon their perception of their role and relative importance within the organization compared to other people for most people, the pay cheque or salary cheque represents their main source of income and is required to maintain a certain standard of living. Inflation and using expectations mean that employees will constantly seek to increase the amount they are paid. Also, most people see their payment arrangements as part of the reorganization of their contribution towards the success of the organization. This, trade union might argue that employees have a ‘right’ to a share of the wealth of the organization that they have helped to create in order to boast their mokeices.

The objectives of a compensation plan is to motivate employees to function at higher level of performance and to attract and keep employees in the company. If the plan is to accomplish these objectives, employee must perceive it as equitable. Thus, the inability of non-equitable or employee been under paid has a negative impact on the performance of employees. Employees compare their rewards with others who perform essentially the same kind of task, either in the company or in competitor forms. The primary basis of comparison is money (wages or salary). Equity is evaluated in terms of the effort put into a task and the rewards received for that efforts if the rewards are perceived as equitable, employees will likely stay and be productive. However, if they perceive their rewards are not favourable the employees will not be effective and efficiency in their output.

Hence, an employee who feels underpaid feels undervalued and is likely to react by withdrawing, or looking for another job. Absenteeism, carelessness and similar difficulties ma result. Therefore, there is need for a study of this nature, since pay being about motivation in order for organizations to make optimum use of their human resources to achieve their desire goals and objectives.

1.3 Objective Of The Study

The main objective of this study is to examine the effect of wages and salaries on workers performance in the educational sector. Thus, in order to achieve the above objective the following specific objectives shall be our guide:

  • To examine whether wages and salaries have a significant relationship with employee’s performance.
  • To examine what constitute ‘fair’ pay to workers.
  • To examine whether increment in wages and salaries serves as motivator to retain worker in an organization
  • To examine whether workers pay is commensurate with the effort of the workers.
  • To examine whether inadequate pay to workers can lead to absenteeism lateness and strikes etc

1.4 Research Questions

In order to achieve the above stated objectives, the research study attempts to provide answers to the following research questions.

  1. To what extent do salaries and wages impact workers performance?
  2. To what extent does increment in wages and salaries services as a motivator to retain workers in an organization.
  3. Does underpayment to workers leads to absenteeism, strike etc

1.5 Research Hypothesis

To provide answers to the research questions, the following hypotheses will be tested:

  1. Ho; Salaries and wages do not have impact on the performance of workers in the education sector.
    Hi; Salaries and wages have impact on the performance of workers in the education sector.
  2. Ho; Increment in wages and salaries do not serve as a motivator to retain workers in an organization.
    Hi; Increment in wages and salaries serve as a motivator to retain workers in an organization.
  3. Ho; Workers promotion does not bring about increase in productivity of an organization.
    Hi; Workers promotion brings about increase in productivity of an organization.

1.6 Significant Of The Study

This study provides a basis for closer scrutiny of the formulation and application of the different relevant aspects of wages and salaries structure in existence and in use. Answers could then be sought regarding contemporary applications of salaries and wages, its relative importance with respect to employee’s performance.

This study is fundamental to the manufacturing industries, public sectors, private companies and entrepreneurs who are looking for the way of retain and attract the best hands on their organization to achieve organizational goals. Also governments, organizations and individuals concerned with formulating compensation policies can benefits from this study. Finally, this research study is expected to stimulate research interests in other aspects of public sector in general, and human resource management in particular.

1.7 Scope Of The Study

The basic premise on which this study is based is that employee’s performance of the educational sector in Nigeria is dependent on effective and efficient wages and salaries administration. This study concentrates on the employees of Lagos State University, (Ojo Campus). Employees of this organization were sampled and data relating to salaries and wages structure were collected from them.

1.8 Limitation Of The Study

The level of accuracy of this study depends on the amount of data or information supplied by the respondents. Also, there can be some elements of bias in information supplied, which will hinder the generality of the findings of this study.

Finance and time are other constraints that rob this study of its perfection. This, undertaking a research study is an Herculean task that takes intellectual stamina to the limit.

1.9 Organization Of Study

This research study consists of five chapters.

  1. Chapter one centers, on introduction, objectives of the study, statement of problems, research questions, research hypotheses, significant of study, research methodology and scope of the study.
  2. Chapter two extensively reveals relevant literatures in the same thematic areas. Works of authors, researchers and writers related to the topic were reviewed.
  3. Chapter three, deals with the research methodology used in carrying out the research study.
  4. Chapter four focuses on data analysis and presentation various statistical tools adopted in this chapter.
  5. Chapter five draws conclusion on the whole subject matter. It covers summary, findings, recommendations and conclusion.

1.10 Definition Of Terms

The terms may be used or already applied in the research are as follows:


This is monetary worth given to employees in return for inconvenience, suffered in the pursuit of their job for which they are employed by the organization under study.


Optimum utilization of resources it is the achievement of an end sought to produce a desired effect.

Fringe benefits:

This are financial employment received by the employee apart from their salaries or wages.


This is monetary force or stimulus that will’ impel an employee to do something which in its absence he would not be interested.


it is an inner state that energizes activates, move and that directs or channels behaviour towards goals.

Objectives goals:

Objectives are the ends toward which organizations and individual activities are directed.


This is a social structure or system consisting of two or more persons who are interdependent and who work together in a coordinated manner to attain common goals.


This is achievement of efficient use of human physical and financial resources.

It is the measurement of production performance using expenditure of human efforts as a yardstick it implies relationship between input and output.


Are assets required by a firm for its operations towards goals achievement


This is monetary force or stimulus that will’ impel an employee to do something which in its absence he would not be interested.

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