ABSTRACT

This project was conducted as a part of the requirement for the award of higher national Diploma Certificate in Accountancy. The aim of the research work is to find out the effects of retirement on the morale of workers ie the still employed workforce. However, the research work is centered on the Institute of Management and Technology Enugu.

The work is divided into five chapters on which every detail is given for proper understanding of the entire work and the topic.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The Background of this study is on the Institute of Management and Technology, Enugu, Enugu state which is made up of students. Academic staff (lectures and non-academic staff. It is aimed at finding the effect on the morale of the still employed workforce, that is of the moral of the workers is still low or if they feel threatened and if they have become more productive. This research work was prompted by the way workers have been retrenched for the past years in institutes of higher learning. Human beings have often been accused of being lazy and having poor attitude to work as shown in McGregor’s assumption theory of X. In this theory, McGregor assumed that the average human being doesn’t like working and would want to avoid it if possible, as a result, he would have to be controlled, threatened with punishment before he can put in effort to achieve some organizational objectives. McGregor want on to say that a human being wished to be directed and controlled in his now ambition and above all he wants security. This research work would want to find out if the above claimed reasons for retrenchment of workers were the true reasons for these actions or is McGregor’s assumption (i.e laziness and poor attitude to work) were the real reasons or a combination of the two sets of behaviour led to the retrenchment of workers in the institute of Management and Technology, Enugu.

The premise of retrenchment is in part to reduce the number of workers employed by the organization. Retrenchment raises a number of other issues besides cost savings. Retrenchment in reality is hitting all levels of employees. One employee today is expected to produce what three employees once did, (Bentley, 1986).

Possible reasons for retrenchment in most business organizations include feeling overstaffed, non compliance and changing market place. Retrenchment is therefore a measure for them to survive. However, this corrective measure is a reactive piecemeal and crisis motivated. Some alternatives include induced retirements, separation with benefits, separation without benefits, induced pay-quit and retraining. Except for reduction of expenses for the business organization and consequently increase in profits and dividends for shareholders , retrenchment has an impact on the morale of those employees who remain after retrenchment as it causes a survivor syndrome due to lack of sufficient information,(Cascio, 1986).

A change in government can initiate and bring a polity that might affect the economy and standard of living of any federal 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, and also in the private sector. 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 Nigeria Governor in 1999 implemented in the Civil Service as a reform programs by disengaging more than 4,500 civil servants in the federal, 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 FEDERALMENT 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, Federal 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 Federal 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 Nigeria Civil Service where more than 4,500 workers were disengaged, in most of this instances of retrenchment, the major reasons given are:

i. Low productivity

ii. Due year of services (retiring age of 60 and 35 years of service)

iii. Inefficiency

iv. Redundancy

v. Gross Misconduct (fraud, disloyalty, dishonesty, etc)

vi. Corruption and embezzlement

vii. Poor health condition

viii. Over staffing and absenteeism

ix. Misappropriation

x. 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.