1.1 BACKGROUND TO THE STUDY
In response to the invitation by the Nigerian government to participate in a seminar and research discussing issues around building effective government, this study share its experience in the recent and ongoing civil service reforms of the federal government on monetization policy. However, the study focuses on the review of the policy and its effects on workers motivation using First bank of Nigeria Plc (FBN) as a case study. Monetization in the context simply means converting into cash the fringe benefits being enjoyed by civil servants as part of their remuneration package and conditions of service.
It should be pointed out that during the colonial era, government had in place various arrangements for administering the various parts of the territory, at the beginning just about all the senior and the policy making positions were occupied by the British expatriates while Nigerians were largely restricted by junior posts and menial jobs. According to Daudu (2004) during the colonial period, the conditions of service and remuneration package would be tailored to suit the living style of these itinerant expatriates. Residential quarters were provided, furnished and maintained by the government. Utility bills for these quarters, including electricity, water and telephone services were also picked up by the government at minimal cost to the officers. Also, in a similar manner, government facilitated procurement of vehicles by theses officers at generous rates that could be conveniently deducted from their salaries.
In addition, domestic servants were hired for them at government expenses while their medical bills as well as those of their spouse and children were also defrayed from public purse. All these made it easy for these expatriate staff top move from one colony to another with minimal stress in service.
Gradually, as Nigerians acquired more political powers and move towards self-governance and independence, conditions for entry into the senior service increasingly became relaxed and more Nigerians found themselves in positions of authority through which process they were able to benefit from those condition of service by the British officials. The critical examinations of the issue would have at least revealed that in Britain itself, where the expatriates came from, government was not providing residential quarters and cars for civil servants nor was it hiring domestic servants and paying utility bills for them.
Adebayo (2003) argues that the long and short of monetization policy was that the Nigerian civil servants adopted the life style of their colonial predecessors in office and exploited this pitfall in the system to their maximum advantage. Not so long this loophole started manifesting to both the federal government and the civil servants. Government discovered that it was one thing to bear all these responsibilities for a thousand employees, which was the size of the service in the beginning. Another fact is doing the same for 187,876 staff members in the present state of the country.
In addition, Adebayo (2003) identifies another adverse effect of this adopted policy of the colonial masters on Nigerian officers is that an average civil servants especially at the lowest level retired from service without a house or own accommodation or car and this created a situation under which retirement encouraged steps both irregular and regular to delay the arrival of the day of retirement. When the inevitable eventually happened and he left the service, the problem set in and in many cases resulted to mental problem and shorter life expectancy.
Furthermore, since the huge cost of running the public sector had for long been of concern to government, it as not a surprise that this area would feature prominently in the reform efforts. Several previous administrations had employed various reform programmes to redress the situation. Theses efforts however, succeeded only in some key government parastatals such as the Central Bank of Nigeria and the Nigeria National Petroleum Cooperation where fringe benefits have been monetized.
In the light of this however, president Olusegun Obasanjo through a government circular issued on 27th June 2003, under the title “Monetization of Fringe Benefits in the Federal Service” formally introduced its monetization policy into the paragraph of the circular as is direct enough and clearly states government’s intention thus:
“Over the years, the cost of governance has continues to escalate. The burden of providing basic amenities for public officers has contributed significantly to the continuous increase in government recruitment expenditure, leaving behind very little for capital development for more efficient allocation of resources and equity in the provision of amenities for public officers, Government has approved the monetization of fringe benefits of public officers. The fringe include: residential, accommodation, furniture, utility, domestic secants, motor vehicles which were hither to provided for entitled officers at huge cost of Government” (Ibrahim Talba 2003).
In the implementation of this programme Government has set up two implementation committees, one for the civil service under the chairmanship of head of the civil service of the federal and another implementations committee for other arms of the public sector under the leadership headed by the secretary to the federal government of the federal and ach of the committees draws members from relevant arms of government and appropriate agencies.
In view of the foregoing, this study examines the implementation procedures of the monetization policy and its effect on the motivation of Federal Civil Servants. It should be said that the concept of monetization has gained worldwide acceptance due to its attendant benefit to the people and government. Even in Nigeria, some organizations such as the Central Bank of Nigeria (CBN), Nigerian Telecommunication Limited (NITEL), Federal Mortgage Bank of Nigeria (FMBN), the Nigeria National Petroleum Corporation (NNPC), First bank of Nigeria Plc (FBN) and most private sectors /organizations have adopted it with positive results (Ikapaahindi 2003).
In the course of this however, efforts will be made to evaluate the impact of monetization policy measures adopted by the Nigerian government to eradicate or reduce the cost of government’s spending and its significance on the beneficiaries with special emphasis on Obasanjo Administration. Also, the study evaluates the monetization policy, in terms of principles, objectives and goals as well as the effectiveness of these policy instruments, the achievements and impact on workers’ motivation.
1.2 STATEMENT OF PROBLEM
In the history of reforms, studies have shown that the implementation of new social policy faced several difficulties, and the results have often been uneven. First, weak administrative structures and the lack of appropriate social policy instrument have constrained the implementation of cost-effective of such programmes. Furthermore, because of a lack of data, it has sometimes been difficult to asses social policy effectiveness in reaching its intended beneficiaries. In some countries, political support for establishing and reforming social policy has at times been insufficient, so that social policy continue to have unintended beneficiaries. Finally, the weakening of the revenue base has dried up sources of financing for social benefits in some transition countries (Chu and Gupta, 1996).
The above statement seems accurately descriptive of the situation surrounding the implementation of monetization policy in Nigeria today. For instance, the current monetization policy is prepared with uncertainty phrases like “It is believed… it is hoped…” in short, long on wishful thinking and short on deep analysis. What is expected that government should do is the following: before announcing this policy, it should provide a clear ECONOMIC ANALYSIS of the financial benefits that the policy will have for the country, on a short term and on a long-term basis, not just wishful thinking.
Also, Dike (2003) argues there are some adverse consequences of monetization on both employer (i.e. Government) and the employees. Salient of such adverse consequences are the following:
Inflation: with monetization, there is going to be more cash available to the public office holders. With some multiplier effect, the possibilities of cash stimulated inflation may not be ruled out but this may only happen if the monetization is extended to all categories of public employees at the same time, which is not practically possible.
Human cost: what happen to the thousand of drivers, security guards and other persons who will loose their jobs as a result of monetization? Even though Government is considering measures to mitigate their plight, the fact remains that there is a high human cost to monetization.
Availability of funds is another problems, to implement the project the government needs amounts, which have variously been estimated and at the same time operate the 2003 budget. What is the financial implication on the budget in the next two, three year? Can the system be sustained? Granting that funds are available, what is the impact of injecting that volume of money on inflation, on the exchange rate?
1.3 AIMS AND OBJECTIVES OF THE STUDY
Monetization policy instruments have had a great influence on the workers’ performance over the years either positively or negatively. The objectives of this study therefore, shall be:
a. To highlight some associated consideration of the monetization policy’s capacity to generate greater economic stability via its effects on employment, productivity and the living standard of recipients.
b. To examine the prospects and challenges of the monetization policy implementation in Nigeria.
c. To evaluate the antecedents of remuneration in the Nigeria civil service.
d. To examine the extent by which monetization policy motivates workers in the study area. Critically analyse and examine the effects of the policy on the economy growth and efficiency of the public officers.
1.4 BASIC ASSUMPTION
A nation state comes into existence for the fulfillment of life and continues for the sake of good life. Human beings as we all know basically are the main constituents of a nation. Hence, it is therefore, necessary for every nation to maximally utilize the human potentials within its territory, for its own benefit and for humanity. The present and the past governments have shown commitment in the provision of basic facilities and infrastructure as well as the upliftment of the standard of living of the average Nigerian. Therefore, the basic assumption of this study is to evaluate monetization policy and its effects on workers motivation for services efficiency and productivity.
1.5 SIGNIFICANCE OF THE RESEARCH
A careful study of this research project will make the reader appreciate the various government strategic plans and polices implemented to stabilize government’s expenditure. This study will also examine the implications of monetization policy on motivation and job productivity. The significance and justification for this study rests on its potential benefits to employers, employees and the state who are mostly concerned about the level of motivating workers for effective productivity in Nigeria.
Therefore, understanding the peculiar features and problems associated with monetization policy will hopefully help the beneficiaries to adjust and change their present evaluation of working conditions in Nigerian enterprises. An evaluation of the effects of monetization on motivation and job productivity will place managers, employers, employees and policy planners in a better position to device appropriate ways to take any perceived negative consequences of the work environment.
The findings of this study will hopefully demonstrate the socio-economic implications of employees’ productivity as it relates to economic growth and development. This could make government embark on new programmes or implement existing policies in order to ensure an optimum worker’s productivity in the country. This study will also serve as a good source of data for future researchers in this field of study.
1.6 RESEARCH QUESTIONS
In the course of this research work attempt will be made to provide answers to the following questions.
i. What are the socio-economic benefits of monetization policy on short terms and long terms basis?
ii. Can this policy motivate workers to improve on their performance?
iii. Is a change in government influence monetization policy positively?
iv. What is the financial implication of monetization on the budget?
v. Is government made a clear Economic Analysis of the financial benefits of the policy before implementation?
vi. What are the significant effects of job opportunity under the said monetization policy?
vii. How can the monetization policy enhance efficiency of services in First bank of Nigeria Plc?
1.7 RESEARCH HYPOTHESES
The study will be geared towards testing the following hypotheses.
i. That there is a significant relationship between monetization of fringe benefits and efficiency of public enterprises.
ii. That there is a positive relationship between monetization and security of job in the public sector.
iii. That political instability cannot negatively influence the proper implementation of monetization policy in Nigeria.
1.8 SCOPE AND LIMITATION OF STUDY
This study is limited to First bank of Nigeria Plc, Apapa-Lagos, Lagos State and this is because a comprehensive analysis of the study in all public organizations in Nigeria could not be feasible due to time and financial constraints. This study is also limited to monetization policy and its effect on motivation of workers in the study area. To be more specific, the researcher is interested in looking at implementation strategies, the objectives, principle and the goals of the policy on the beneficiaries. Also, the study will review the prospects and challenges of the programme in the study area.
1.9 DEFINITION OF TERMS
COMPENSATION: This has been defined as both financial and non-financial rewards provided to induce workers to contribute more to the development of an organization. Compensation can be of three divisions; basic wages, incentives and benefits.
EMPLOYMENT: These are also known as workers personnel in an organization. They are defined as persons who are employed especially as manual or industrial labour for wage. They are the one working in a particular field or industry.
FRINGE BENEFITS: These could be referred to as remunerations given to public officers to enhance effectiveness and efficiency of their services in the public sector. In another words, fringe benefits are rewards available to employee or group of workers as part of organizational membership. These includes free medical treatment or hospitalization, vocation or leave pay, call back pay, off pay, rest period pay, lunch period pay.
GOVERNMENT PARASTATALS: These could be referred to as federal government own establishment or the institutions that are been run by the federal government such as: (a). Central Bank of Nigeria (CBN), (b).National Electric Power Authority (NEPA), (c). National Electric Power Authority (NEPA)
INCENTIVE: These are rewards designed to encourage and reimburse employee for effort beyond normal performance expectation. It include bonus, commission, profit sharing plans, piece of work, stock option cost reduction, suggestion plan, production, etc. (Bankole, 2000).
MONETIZATION: This could be defined as conversion to allowance the money spend on the residential accommodation transport facilities, medical services and utilities such as electricity, mater and telephone, to be paid to public officers, in the federal government parastatals.
MORALE: This is the state of mind and willingness to work which in turn affects the individuals and organizational objectives. Morale can be positive or negative, high or low as the case may be.
MOTIVATION: This refers to the inner energy, which spins an individual towards performance of an action. Motivation involves needs, drives and motives as guiding posts.
PRODUCTIVITY: This is the certainty of being able to change, that which exists. It is the certainty of being able to do better to day than yesterday. It is also the will to improve on the present situation no matter how good it may look. It is ratio between input and output, the ratio indicates the value added by and organizations.
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