INTERNATIONAL JOURNAL OF BASIC AND APPLIED SCIENCE

Insan Akademika Publications

P-ISSN: 2301-4458 E-ISSN: 2301-8038 Vol. 01, No. 02 Oct 2012

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Recent Trends in Wage and Salary Administration in Nigeria: A Synopsis on Theoretical and Empirical Challenges
John I. Agburu
Department of Business Management, Benue State University, Makurdi, Nigeria johnagburu@live.com

Key words
Wage, Salary, Productivity, Equity, Fairness.

Abstract
Wage and salary administration in Nigeria has been a subject of immense controversy, if unresolved, in the context of Nigeria politico-administrative setup for several decades now. The topic itself is as complex as it is slippery in terms of definition and unique features. Among other things, the subject of wage and salary administration in this country has been a controversial one. The attempt has been to resolve such issues as what should the basic pay, the issues of labour cost, productivity, cost of living, and the question of compensation. This paper takes a critical perspective on the generic forces at work in recent times that relate to wage policies, strategies and schemes aimed at creating a conducive atmosphere for the workers (both in the private and public sectors) in Nigeria to perform. The main objective of the paper is to determine the key forces affecting wage and salary administration in Nigeria. Among the most recent experiences analyzed are those of the 2007 Federal Government Civil Service pay package and the current university pay system. The researcher adopted a simple crosssectional survey method. Data collected were subjected to critical analysis using mostly non-parametric methods. The main findings include the fact that there has been (1) unwarranted lags between labour (employee) pay and productivity (2) huge income differentials between the various levels of government where the employees buy from the same market. The main recommendations embrace the urgent need to strategize along schemes that attract high labour productivity, equity and fairness in rewarding workers
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1.

Introduction

According to Nwachukwu (2000) and Ogunbameru (2000) wage and salary administration refers to the development, implementation and on-going maintenance of a base pay system. The central objective or purpose of wage and salary administration is to provide pay that is both competitive and equitable (Atchison, 2003). In relation to Nigeria, wage and salary administration activities refer to all those processes, strategies, plans and schemes that give rise to pay policies. Such policies set the overall direction of pay within the organizations or establishment, public or private as the case may be. The actual development of a base pay system follows the determination of pay policies. For the purpose of clear direction, this paper embraces a number of critical and related issues as that impinge on the all-important question of wage and salary administration in Nigeria. Here, the focus is on relevant suggestions aimed at mitigating the difficulties encountered in handling the issues of wages and salaries in this country (Nigeria).
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2.
2.1

Literature Riview
Wage Administration: Fundamentals

As Nwachukwu (2000), and Atchison, (2003) have aptly observed wages and salaries constitute a significant part of the overall cost of operations, observing that in some organizations wages and salaries constitute over 50% of the operating costs. Companies or establishments that lack of ability to pay wages and salaries regularly are in danger of disintegration. Poor wages are a constant source of frustration and can result in declines in productivity. Wages should not only be adequate but they must also show some element of equity, this is particularly true from the point of the employees. Anything short of a fair and equitable wage or reward can quickly attract the wrath of employees in an economy such as Nigeria. For many Nigerian employees, wages or salaries are highly critical issues. They are decisive because without them in sufficient quantities, life becomes extremely precarious for the worker and members of his/her family. As direct financial rewards, wages and salaries are the most emphasized by the employees, thus they sort of take a centre stage in the scheme of things as far as rewards for work is concerned. For many a Nigerian employee, wage or salary is the main thing. It is thus against this background that the need for a dynamic, intelligent and foresightful wage and salary administration cannot be overemphasized, particularly for an emerging economy like Nigeria in the era of globalization. Institutions or companies that seek to attract and retain highly productive and efficient employees cannot shy away from facing the challenges posed by the need to pay wages adequately in a competitive environment.

2.2

Characteristics of Good Salary or Wages

Nwachukwu (2000), and Ngu, (2005) have identified the key features or characteristics of good salary or wages as follows: (1) The wage rates that prevail in the local market and in the industry. The main purpose here is that it will ensure that the company remains competitive. (2) The internal alignment of wages to ensure equity. (3) Recognizing for individual Performance. Although two individual workers may have identical qualification and/or experience, one may earn higher than the other due to his superior performance. (4) Taking care of Individual Incentives. That is, incentives that: (a) are easy to administer; (b) whose results reflect the efforts of the individual; (c) make the computation of reward easy; (d) equate reward with the effort expected; and (e) leave the factors necessary for the attainment of the objects in the control of the employees.

2.3

Possible Impacts or Effects of Wage Incentive Plan

The essence of a wage incentive plan is to relate productivity to reward. Thus, employees who manifest outstanding performance receive extra pay. Usually, wage incentive in terms of extra pay is a cash payment made every week or month. It is paid to those employees who exceed their quota of the output. Typically, incentive plans used by organizations include piece-rate, profit-sharing, premium plans, stock option plans, to mention but a few. At this juncture, it may be asked: what does the term or concept wage and salary administration imply?

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2.4

Wage Structure Determinants

Douty (1980) and Ferris (1985) have identified the main wages and salaries structure determinants as those of (1) economic value or market value of an item which is the price it brings in due to the interactions of the forces of demand and supply (2) job worth, whose analysis tends to rely more heavily on perceptions of organization members of the relative value of the job (3) training: with requirements of jobs in terms of length, difficulty and who provides it. It relates to human-capital analysis and development (4) employee tastes and preferences. They are also economic factors. Worker expectations of future earnings strongly influence occupational choice and thus labour supplies. The problem however is that the labour market is not a perfect one. (5) Unions: Industrial unionism has also been shown by economic analysis to affect wage structures. Large organizations where employees are represented by industrial unions tend to have a highly differentiated wage structures (Ferris, 1985). Apart from the above, other determinants of wage structure embrace (Ngu, 2005): (a) Discrimination the trends nowadays is to shift away from wage differentials based on sex or race. (b) Industrial Relations Factors. Both industrial relations scholars and labour economists are involved. The industrial relations scholars base their views mostly on non-economic forces while the labour economists emphasize on such criteria as productivity, efficiency and general performance of the employee. (c) Social Determinants: On such things as equity, status, and the preservation of customary relations. According to Atchison (2003) numerous forces operate as wage determinants. Roughly, these might be classified as: (1) economic (2) institutional (3) equity considerations. Several scholars (Nwachukwu, 2000; Ogunbameru, 2004; Agbonifoh et al, 2005) in their studies have emphasized the need to place premium on productivity in wage and salary determination. A frequent trend in the administration of wages and salaries globally and in Nigeria in recent times is the need to recognize the cost living as a critical factor. The cost of living makes workers and unions to pressure employers (private and public) to increase pay.

2.5

Assumptions on Wage and Salary Administration.

David Belcher in Nwachukwu (2000) has advised that prior to embarking on policy regarding wages and salaries, the organization should bear in mind the following 17 assumptions: (1) Pay is an incentive job performance. (2) Pay in the form of money has more incentive value than pay in the form benefits. (3) Employee satisfaction with pay is evidence of its incentive value. (4) Consistent treatment of employees in the matter of pay is a prerequisite to obtaining incentive value from pay. (5) Incentive value is lost when employees are ores paid. (6) Employees react negatively to pay inequalities. (7) Pay inequalities are similarly defined by all types and levels of employees. (8) Employees regard internal pay inequalities as more serious than external inequalities. (9) Employees react only to gross external inequalities. (10) Employees comparisons of pay are made first in terms of jobs, and second in terms of performance on jobs. (11) Employees compare their pay with that of people in similar jobs. (12) Employees comparisons of pay are uninfluenced by levels of aspiration and pay history. (13) Managers make pay comparisons that are essentially similar to those of rank-and-file employees. (14) Professional employees make external rather than internal comparisons. (15) Employees accept the concept of hierarchy of jobs and pay. (16) Employees determinants of the job hierarchy are similar to managements determinants.
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(17) Employees agree with management on what they are paid for and weigh the factors.

2.6

Job Evaluation: An Integral Element in Wage and Salary Administration

According to Mullins (1999) job evaluation is the process of systematically determining the relative worth of jobs to create a job structure for the organization. The evaluation is based on a combination of job content, skill required, value to the organization, organizational culture and the external market. As Nwachukwu (2002), and Ngu, (2005) have stressed, job evaluation is the procedure to determine the worth of a job vis--vis others. The four essential features of job evaluation according to Ogunbameru, (2004) are: (1) Impersonality. It must be impersonal; it is the job, not the person that is the subject of analysis. (2) Simplicity. To reduce dissatisfaction arising from feelings of unfairness in the grading and salary scales attached to the job, it is important that whatever system employed must be simple enough for employees to understand. (3) Flexibility. It should be flexible enough so that jobs can go up and down depending on the changes in the content of the job. (4) Verifiability. The results obtained for the exercise should be verifiable and capable of being validated and upheld by another expert.

2.7

Compensation: Definition

The term compensation simply refers to the wages paid directly for time worked as well as more indirect benefits that employees receive as part of their job or employment relationship with an organization (Otobo, 1987). Wages or salaries paid are typically payments made in cashable (naira) form that reflect work done and related remunerations such as base pay or bonuses such as paid workers during the end of the year (e.g. New Year packages and the like). Benefits are forms of compensation beyond wages, for time worked including various: (1) protection plans e.g. health insurance or life insurance; (2) services; (3) pay for time not worked e.g. vacations or sick leave; (4) income supplements such as stock ownership plans.

2.8

Difficulties Workman Compensation

As Flippo (1980) and Nwachukwu (2000) have observed, workmen compensation is one of the most difficult functions of personnel administration. Properly perceived, it is not only one of the most complicated functions but also one of the most crucial to both employers and employees. Workmen compensation is a highly important factor or force to employers given that it tends to constitute the greatest single cost of organizational transactions. This is particularly the case in the recent Nigeria experience. Take the public sector in Nigeria, especially the Local Government. Here, most of the revenues collected are used for the payment of wages and salaries of their staff. The issue of compensation is a frequent phenomenon also in the Nigeria private sector. Here, the organization is constantly faced with the problem of striking a balance between revenue and production costs. At times costs are extremely high, making it difficult for the companies to make ends meet. Going by the trends in Nigeria, to the employees, compensation must be seen to be not only adequate but also equitable. Equitable compensation entails comparisons and competitions both internally and externally. Both internal and external comparisons and competitions can be both vertical and horizontal, thus making the compensation system for each organization very problematic and cumbersome.

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2.9

Reasons for Frequent Agitations for Increase in Wages and Salaries

According to Scheifer (1979) the main reason for asking for more wages and salaries by the employees is to help keep up with inflation. Inflation, defined as the general and persistent rise in the aggregate level, affects workers adversely in a developing nation such as Nigeria today.

2.10

Trends in the Role of Unions: ASUU, NLU, etc.

The recent trends in wages and salaries administration have been clearly necessitated by the roles of the various trade unions in the country (Nigeria), specifically, the Nigerian Labour Congress (NLC), the Academic Staff Union of Universities (ASUU), the Senior Staff Association of Nigeria Universities, and a host of others. Previously, and at several times, they went on strike to press home their demands for better conditions of the institutions as well as improved working conditions generally. The most recent ASUU strike took over four months before it was suspended. And as part of the administration of wages and salaries, they has emerged a new salary structure and compensation scheme for the nations universities.

2.11

Trends in the Nigerian Workers Demands

Until recently, there has been a generalization that all the Trade Unions or Workers demands in this country have been directed at increase in wages, salaries and fringe benefits. Thus the workers or unions were criticized for their myopic tendency in the sense that they ignored, according to the critics, other issues such as the desire for autonomy or greater participation in major decision-making processes (Ngu, 2005). Significantly, recent trends have indicated that the workers or unions have manifested a paradigm shift in this respect. Since 1995 there have been tremendous changes in terms of the pattern and/or character of the union demands or agitation in Nigeria. For instance, the Academic Staff Union of Universities (ASUU) declared an industrial action to force the government to improve the leaving conditions of students in the universities in addition to the demands for better condition of service.

2.12

Trends in Salary Structure: Nigerian Universities

Based on the most agreement between the Federal Government of Nigeria and the Academic Staff Union of Nigeria (ASUU) in a document to this effect dated October 2009, it has been agreed that there shall be a separate salary structure for University Academic Staff to be known as Consolidated University Academic Salary Structure II (CONUASS II). The CONUASS II consists of three components thus: (1) The Consolidated Salary Structure for Academic Staff (CONUASS) approved by the Federal Government of Nigeria (FGN) effective 1st January 2007. (2) Consolidated Peculiar University Academic Allowances (CONPUAA) exclusively for university teaching staff and derived from allowances not adequately reflected or not consolidated in CONUASS. (3) Rent as approved by the FGN effective 1st January 2007. Perhaps one of the most interesting features of the current trends in the wage and salary administration as pertains essentially to the university system can be seen to reside in the realization by the Re-negotiation Committee that Nigerian University Academic represent the crucial mass of scholars in the society (AFGNASUU 2009:10), with the potential for transforming it. In the light of this, the Committee felt that academic deserve unique conditions of service which will motivate them like the intellectuals in other parts of the world to attain greater efficiency and effectiveness in service delivery with regard to teaching, research and community and thereby stem the brain drain (AFGN-ASUU, 2009:10). The new university salary structure indicates that the basic pay has increased by 50%.

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2.13

Trends in Academic Allowances

With the most recent development, it has been agreed that the entitled academic staff shall be paid a number of allowances. These allowances include those of Postgraduate Supervision; Teaching Practice/ Industrial Supervision/ Field Trip Allowances; Honoraria for External/Internal Examiner (Postgraduate Thesis); Honoraria for External Moderation of Undergraduate and Postgraduate Examinations; and Postgraduate Study Grant. Apart from the foregoing other allowances include those for External Assessment of Readers or Professors; Call Duty/Clinical Hazard Responsibility Allowance and Excess Workload Allowance.

Non-Salary Benefits Apart from the above basic pay structure, the trends indicate some non-salary conditions of service. Specifically, the following fringe benefits are approved and be subject to further improvement over time. These include: (1) Vehicle Loan/ Car Refurbishing Loan. Among other things, the loan is repayable over 4 years period with a 2% charge as administrative cost. (2) Housing Loan. A loan that is equivalent to at least 8 times the staff annual salary. (3) Research Leave. An academic staff is entitled to a research leave of 26 working days per annual. (4) Sabbatical Leave. (5) Annual Leave. (6) Sick Leave. (7) Maternity Leave. (8) Injury Pension. (9) Staff Schools. (10) Provision of Office Accommodation and Facilities.

2.14

Distinguishing Trends or Patterns in Wages and Salaries: The Civil Service, Federal and State

In a bid to enhance the performance of the workers in both the public service and civil service in Nigeria, the following salaries and allowances have been approved. They include: (1) Basic Salary (2) Housing Allowance (3) Transport Allowance (4) Meal (5) Utility (6) Responsibility (7) Entertainment (8) LTG (9) Furniture. This structural transformation in wages and other remunerations affect workers or staff in all salary grade levels, 01 to 17. One future of the current trends resides in the narrowing of the wage differentials, compared with the past trends. The trends in the housing meal, utility and other benefits or allowances are particularly illuminating and revealing in the sense that the disparities between e.g. grade levels 15 17 are relatively minimal.

2.15

Discrepancies Between Federal and State Service Pay and Allowances.

Although most of the variables in terms of pay and allowances enjoy common nomenclatures for both the Federal Civil Service and State Civil Service, there are marked differences in the monetary values attached to them. For instance, the transport allowance in the Federal structure varies from grade level to grade level, whereas it is, using Benue State as a case, grouped between sets of grade levels e.g. staff on grade levels 01 to 06 are entitled to N800.00 per month, those on grade levels 07 to 10 get N1,369.00 per month and so on to grade levels 15 to 17 that get N3,004.00 per month. Similarly, the pattern is generally identical with meal and utility allowances. Consequently, the civil servant at the State level is worse off in this respect.

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The intra-civil service pays and allowances comparisons show a lot of discrepancies too. Take for example, a Federal Civil Servant on grade level 03 step 1 and compare his remunerations with the one on say, grade level 16 step 1, the formers rent is 50% (N2,669.68) while the latters is 75% (N24,923.16). The story can be said to be the same if one pries into other grade levels in the analysis. An unhealthy trend? Whatever the explanations might be to justify the discrepancies in allowances such rationalizations can hardly be said to be empirically realistic taking cognizance that all the workers or staff buy from the same market. In effect, the question of equity has not quite authentically addressed by the wage and salary administration in Nigeria in recent times. This is by no means to say that improvement have not been made in terms of wage and salary administration in this country. The differentials of economic distances in the allowances and other benefits stand in need urgent restructuring in order to address the socio-economic issues, equity and fairness in income distributions with a focus on the public sector in particular.

2.16

Question of Money Illusion

Some critics (Agbonifoh et al, 2006) have asserted that the trends in the wages and salaries administration in Nigeria are unwarranted going by the current socio-economic development of the nation. They assert that most of the beneficiaries of the rises in wages and salaries are suffering from money illusion i.e. the beneficiaries fail to see that the value of what wages and salaries they earn dwindle quickly. In other words, there is a decrease in the value of increased earnings to workers.

2.17

Social Forces and Explanations

The recent trends in the Nigerian wages and salaries administration portray one prominent features i.e. that to those involved in pay decisions (the unions, government, employer, and so on) social forces seem to be more apparent than economic ones. The agitations for higher wages fail to focus on labour productivity or returns to scale.

2.18

Trends in Compensation Systems: A Critique

A major current trend in compensation can be seen in terms of a paradigm shift from base pay to emphasis on incentives. As far as the situation in Nigerian civil and public sectors is concerned, the shift has become a critical development. It appears that the trends are completely reversible in the sense that these benefits are only flexible in an upward direction. One of the most conspicuous attributes of the current wages and salaries administration trends resides in monetization. It is gaining a great ground in the Nigerian system. But then, what is monetization? It simply implies the quantification in monetary terms (in terms of naira?) of all those benefits that the government and other organizations used to provide for their employees (or staff) as part of conditions of service (Arora, 2008). Unequivocally, the monetization scheme or strategy has become a rewarding policy and apparatus in the interest of the employees. As a device for rewarding performance in monetary terms, most of the staff or employees and unions are most likely to be attracted to it. Under it, the items being partially or fully monetized include meal subsidy, utility allowance, medical allowance, domestic servant, furniture allowance, transport, residential accommodation allowance, duty tour allowance, leave grant, fueling allowance, motor vehicle allowance and so on. The whole mantra smacks of the biblical adage that money answers all things i.e. that money is a critical or decisive factor in exchange and other transactions. With adequate monetization, workers hope to make ends meet with little ado, even in the throes of inflationary pressures. But then, the problem is there: how can an optimum or best monetization be attained? As the trends seem to indicate, the days when optimality will be attained with respect to monetization of
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benefits are pretty not in the offing, especially in the contemporary Nigerian system. Herein lies what might be perceived as the paradox of monetization.

3.

Methodology

In a bid to attract an optimal level of degree of reliability and consistency in research, a simple empirical cross-sectional study is applied. The main instruments for eliciting of the relevant data are the structured questionnaire and oral interview. The researcher administered a total of fifty-five questionnaires distributed among three broad categories (that is, Federal Government employees, State Government employees and University staff). The sampling technique applied was essentially a deliberate one for the purpose of analytical simplicity and representativeness. Details can be seen below in terms of data presentation and analysis.

4.

Result and Discussion

Subjects Notion Regarding the Relationship Between Pay and Labour Productivity
Degree of Response SA 1 1 1 3 A 0 1 2 3 N 1 1 2 4 D 4 3 8 15 SD 4 6 5 15 T 10 12 18 40

Table 1

Statement There has been a close relationship between pay and labour (employee) productivity in the economy.

Category Federal Civil Servants State Government Civil Servants University Staff Total

The general opinion as shown in Table 1, is that there has been a lack of close relationship between pay and labour productivity in the area studied. In fact, 30 out of 40 respondents (or 75%) feel that pay and labour productivity have not moved pari pasu in this area. The subjects feel that pay has not been moving upwards as did output or productivity.

Table 2

Opinion Concerning the Cost of Living and the Reward (Compensation)

Degree of Response SA 1 1 1 3 A 1 0 1 2 N 0 1 1 2 D 2 3 5 10 SD 6 7 10 23 T 10 12 18 40

Statement There has been an optimal relationship between employee compensation and the trends in the cost of living in this economy.

Category Federal Civil Servants State Government Civil Servants University Staff Total

Going by the data of Table 2, it is quite obvious that the majority of the respondents are of the view that the relationship between employee compensation and the cost of living has been far from being optimal. Thirtythree (33) out of 40 respondents (representing 83%) feel that optimality has been gross lacking between the two variables under reference. For most of the respondents, compensation has failed to take into consideration the rising trends in the cost of living.

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Table 3

Respondents Perception of the Basic Pay Whether has been Adequate

Degree of Response SA 0 1 1 2 A 1 1 2 4 N 1 2 2 5 D 3 1 2 6 SD 5 7 11 23 T 10 12 18 40

Statement

Category Federal Civil Servants

The basic pay has been adequate so far in Nigerian system.

State Government Civil Servants University Staff Total

Most of the respondents, as shown in Table 3, feel that the basic pay has been grossly insufficient. A total of 29 out of 40 (or 73%) are of the view that the basic pay has been inadequate to meet the basic needs of the workers or employees in the organizations studied. Only 15% feel differently. Basic pay if insufficient can produce a negative effect in the sense that the employees will be demotivated eventually.

Table 4

Subjects Opinion that Wages and Salaries take the Centre Stage in Matters of Worker Compensation in Nigeria
Degree of Response SA 8 10 12 30 A 2 1 3 6 N 0 1 1 2 D 0 0 1 1 SD 0 0 1 1 T 10 12 18 40

Statement As direct financial rewards wages and salaries are the most emphasized by the employees.

Category Federal Civil Servants State Government Civil Servants University Staff

Total

As the data in Table 4, show 36 respondents out of 40 (or 90%) believe that direct financial rewards such as wages and salaries should feature most prominently when it comes to staff remuneration in the present day world. This is not to imply that other forms of rewards (praises, verbal commendations and the like) are not critical.

Table 5

Subjects Perception Regarding the Need for Competitive Wages and Salaries of Employees in the Globalization Era
Degree of Response SA 7 7 10 24 A 2 4 6 12 N 0 0 2 2 D 0 1 0 1 SD 1 0 0 1 T 10 12 18 40

Statement The need for a dynamic intelligent, foresightful competitive wages and salaries administration cannot be overemphasized in the globalization era.

Category Federal Civil Servants State Government Civil Servants University Staff Total

The data of Table 5, indicate overwhelming need for dynamic and foresightful competitive remunerations in Nigeria in the globalization era. Out of respondents, 36 (or 90%) feel this way. Companies that aspire to

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succeed in the globalization era seem to have no choice but to attract and retain employees via competitive wages and salaries.

Table 6

Views Pertaining to the Labour Cost in the Contemporary Nigerian System

Degree of Response SA 7 6 10 23 A 2 3 4 9 N 1 1 1 3 D 0 1 2 3 SD 0 1 1 2 T 10 12 18 40

Statement

Category Federal Civil Servants

The cost of labour is very low in the present day Nigerian system.

State Government Civil Servants University Staff Total

From the data of Table 6, it is very clear that to the majority of the respondents, labour cost has been very low or minimal in Nigerian organizations. The reason for this might be traceable to the fact that the supply of labour outweighs the demand for labour. Unemployment of human resources has been observed to be a commonplace phenomenon over the year.

Table 7

Respondents Perception of the Role of Labour Unions as well as the Influence of ASUU in Nigeria
Degree of Response SA 6 7 10 23 A 3 3 4 10 N 0 1 1 2 D 1 0 1 2 SD 0 1 2 3 T 10 12 18 40

Statement Both the Labour Congress and ASUU have played liable roles in wage and salary administration in Nigeria over the years.

Category Federal Civil Servants State Government Civil Servants University Staff

Total

According to the data of Table 7, the overwhelming proportions of the subjects are of the view that both the Labour Unions and ASUU play crucial roles in the issue of wage and salary administration in Nigeria. In fact, 83% of the respondents feel that without the influence of these trade unions, the character of wage and salary administration would be adversely different much to the chagrin of the workers in general.

Table 8

Respondents Feeling Regarding the most Critical Factors to Consider in Wages and Salaries Administration in Nigeria. Variables Employee Productivity Cost of Living Global Competitiveness Ability to Pay Equity and Fairness Total Number of Responses 8 12 7 5 8 40 Percentage (%) 20 30 18 12 20 100

No 1 2 3 4 5

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As the data of Table 8, show most of the respondents are of the view that the cost of living should be the over-riding variable in wages and salaries administration. The table show that out of a total of 40 respondents, 12 (or 30%) felt that emphasis should be on the cost of living facing the employees. Next in ranks are employee productivity and equity (and fairness), whatever that implies, which are pegged at 20% each. The ability to pay is the least factor to contemplate, perhaps because there is an inherent notion that institutions or employers have adequate ability to reward the workers.

5.

Conclusion

The study discovered that there has been a gross lack of close relationship between pay (or compensation in general) and employee productivity. Consistently, productivity has tended to lag behind pay, be it at the federal or state government levels. The research found that the cost of living has been rising astronomically relative to wages and salaries paid the workers as the aggregate. The study was found that workers were dissatisfied with their net earnings or pay. Furthermore, employees preferred direct financial rewards to non-financial rewards. The study found that there were overt absence of concrete policies and strategies aimed at attracting optimal employee performance in the establishments. Last, by no means least, it was found that the cost of living occupied the centre stage when it comes to the ranking of variables impinging on wages and salaries administration in Nigeria, though such other factors as employee productivity, equity and fairness, global competitiveness have their influences in this respect. In order to meaningfully improve on the current trends in salary and wages administration in Nigeria, the following actions should be carried out: (1) Establishing right strategies which should be optimal, timely and lucid in nature. (2) Periodic review of the plans, program and implementation of the existing schemes or policies to enhance labour output or productivity. (3) Periodic interactive sessions with the unions (i.e. government and union to meet regularly to monitor wages and salaries trends). (4) Let wage differentials be narrowed among different grade levels. (5) Flexibility. It allows new methods or techniques of rewarding workers to take place. (6) Participative Pay System. Though at its embryonic or rudimentary stage, the system in Nigeria is fairly participative. This is particular true compared with the military regimes era. A participative pay system involves employees in the design and implementation of the package. (7) Taking cognizance of inflation trends. (8) A pay system can be designed by staff members of the organizations human resource department, a committee of managers in the organization, an outside consultant, the employees or a combination of these resources (Ogunbameru, 2004). (9) What is crucial is the need for all hands to be on deck in wage and salary administration. (10) Team work rather than a loner work stands to be more rewarding and less troublesome.

References
AFGN-ASUU. (2009). Being Agreement Between the Federal Government of Nigeria and the Academic Staff Union of Universities. Agbonifoh, B.A., A. B. Agbadudu, and F. I. O. Iyayi. (2005). Management, a Nigerian Perspective. Malthouse Press Ltd, Lagos. Akpeiyi, E. O. (1996). Total Quality Management A Tool for Organizational Excellence, in Management in Nigeria. January March, 1996. Atchison, T.J. (2003). Wage and Salary Administration, in Personnel Administrator January, 2003.
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