Human Resource Management Project Topics

Employee Benefits and Its Effect on Organization Productivity (Case Study on FCMB Bank Port Harcourt)

Employee Benefits and Its Effect on Organization Productivity (Case Study on FCMB Bank Port Harcourt)

Employee Benefits and Its Effect on Organization Productivity (Case Study on FCMB Bank Port Harcourt)


Objectcives of the study

The main objective of the study is to examine employee benefits and its effect on organization productivity in FCMB, Port Harcourt. Specific objectives of the study include the followings:-

  1. To examine the relationship between monetary benefits and employees’ productivity in an organization.
  2. To examine the relationship between non-monetary benefit and employees’ productivity in an organization.
  3. To determine if there is a relationship between employee benefit and employee motivation.
  4. To determine if there is a relationship between employee benefit and job satisfaction among the staff of FCMB, Port Harcourt.




This chapter reviewed concept and studies related to this study. This is done under the following sub-heading; conceptual clarification, theoretical framework, and empirical review.

Conceptual clarification

Employee Benefits

According to Simons (2005), employee benefits (also called fringe benefits, perquisites, or perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries. In instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a ‘salary packaging’ or ‘salary exchange’ arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Examples of these benefits include: housing (employer-provided or employer-paid), group insurance (health, dental, life etc.), disability income protection, retirement benefits, day care, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits. The purpose of employee benefits is to increase the economic security of staff members, and in doing so, improve worker retention across the organization.

These are programs an employer uses to supplement the cash compensation that employees receive, to protect the employee and his or her family from financial risks. Benefits constitute an important part of the remuneration package. They are an addition to other forms of cash payment like wages and salaries that are intended to improve the quality of work life for employees and increase their cooperation and productivity (Amah et al, 2013). Employee benefits is defined as any form of compensation provided by the organization other than wages or salaries that are paid for in whole or in part by the employer. Employee benefits are essential for the development of corporate industrial relations. Examples include retirement plans, child care, elder care, hospitalization programs, social security, vacation and paid holidays (Christoph, 1996). The purpose of employee benefits is to increase the economic security of staff members, and in doing so, improve worker retention across the organization.

Employee benefits represent virtually any form of compensation other than direct wages and paid for in whole or in part by the employer, even if provided by a third party (Marsh and Kleiner, 1998). Benefits vary and serve different social and economic needs. Several benefits are required by law. Some of the benefits include employer contributions to Social Security, Medicare, unemployment insurance and worker’s compensation insurance (Marsh and Kleiner, 1998). Mondy and Noe (2002) agree that, 9% from the amount of the benefits are legally required by the law. Benefits that are to be given to the employees as provided for by law are for the security of the employees in their future life when they are no longer in the employment.




Research design

The survey research design method was used in this study. It involves using a self-designed questionnaire in collecting data from the respondents. This method was chosen in order to make reference to phenomena as they exist in real life and it is relatively economically in terms of time and resources.

Population of the study

Oyesiku (2015) described the population of any work as the entire group of people, events or things of interest that the researcher wishes to investigate. It therefore follows that unless the total population is explicitly defined before the actual work, it is difficult, if not impossible, to evaluate the adequacy of the selected sample. Consequently, the population of this study comprised of the staff of all FCMB branch in Port Harcourt. The researcher estimated 4,000 staff for this study.



Introduction to data analysis

Data parse do not convey significant meaning or information unless they are subjected to statistical application or other forms of quantitative or qualitative treatment, which result in synthesizing of information.

Thus, this chapter attempts to present the primary data gathered for this study through questionnaires administered to both the academic and the administrative staff of FCMB, Port Harcourt.

Also included in this chapter is the computation; analysis and interpretation of data and the testing of hypotheses using simple frequencies, percentages, chi-square and other common statistical tools.



Summary of the study

This study focused on the effect of employee benefits on organization productivity using different proxies to measure the main variables. The study commenced with a background to the study which focused on a highlight of the prevailing issues in the Nigerian manufacturing sector with special emphasis on how these issues have necessitated the study at hand. With these issues identified, the study then proposed the needed objectives, research questions and hypotheses. In realizing the aforementioned aims, the study was structured into five chapters. The first chapter deals with the background of the study, identified appropriate problems related to the study, outlined the objectives of the study, formulated appropriate research questions, hypothesis and examined the rationale for the hypothesis. The chapter also highlighted the scope and significance of the study and gave operational definition of terms and variables used in the study.

The literature review focused on an in-depth review of various materials and resources in the area of employee benefits and organization productivity. This research was limited to employees from FCMB, Port Harcourt. The study assesses the current employee benefits adopted in each of the organization and examine its impact on the employee organizational outcomes. The data for this study was analysed using percentages and frequencies, while chi-square regression was used to test the hypotheses.

Discussion of findings

Logically, it could be concluded that employee benefits will have an effect on organization productivity in FCMB, Port Harcourt. This logic is also affirmed by the literatures reviewed in this study that shows reward have an effect on organization productivity which also conforms to the findings of this study. The findings of this study is consistent with the findings of Mullins (2005), it stated that employee benefits have become a prominent means with which organizations have been able to enhance their employees’ performance towards achieving organizational goals. Wang (2004) agreed that in many organization rewards play many roles in sustaining and creating commitment among employees for good performance.  Armstrong (2009) claims it is better to separate performance management and pay, “decoupling” both, so as to make a distinction between developmental potential and the impact of your performance on incremental pay rises. He describes the difficulty in paying for performance where it needs to be measurable on different levels, thus evidence based and this evidence needs to be seen to be fair and transparent and not conducted behind closed doors.

Messahand Kamencu (2011) agreed that rewards and bonuses have a positive effect on organization productivity. Stumpf, et al., (2013) focused on two intrinsic rewards – meaningfulness and choice. They argue that these are essential to organization productivity and satisfaction and also retaining employees in times of organizational uncertainty and change. Similarly, in their study of the effect of cash bonuses on organization productivity in the Kenya Power and Lighting Company Ltd, Njanja, Maina, Kibet & Njagi (2013) found that although the majority of staff surveyed had a perception that cash bonuses motivate performance, the study concluded that these cash bonuses had no effect on organization productivity. Those who had received a bonus and those who had not, perceived it to affect their performance the same; hence it did not have a significant effect on performance.

Furthermore, Druker and  White (1997) showed that pay related performance systems may yield results among professional and senior managers in that industry. It suggests that pay related performance systems model could be developed in the context of improving performance in a project team, and around a competency or skill based pay system.

Bart, Bratsberg, Haegeland & Raaum (2008), in their wide ranging study on who pays for performance and based on Norwegian establishment surveys from 1997 to 2003, found that the success or failure of performance is related pay. They found out that performance related pay is more widespread in bigger organizations and less common in more unionised organizations. Day, Holladay, Johnson & Barron. (2014) discuss how using a pay-for-performance model in a western organization can have positive results on performance. By focusing not just on the pay, but also on the individual’s specific needs for this pay, it found that not only can you achieve positive performance outcomes, but it helps the organization to respond better to employee expectations. Markova and Ford (2011) in their focused on employees in over 30 large companies and through a scaling system rated by supervisors, and found that neither monetary nor non-monetary rewards had any direct effect on performance. However, they did have an effect on motivation and the more motivated the employees were, the more time they spent on job tasks and therefore positively affect performance in the long term.

(Azzone & Palermo, 2011) found serious flaws in the reward structure where no link could be found between performance appraisal and rewards. In this case performance was found to suffer adversely, and it was recommended to use existing reliable performance measures to overcome this especially when the organization is going through change.

Kominis & Emmanuel (2005) in their comprehensive study on exploring the reward preferences of 225 middle level managers. Their findings suggest that: different reward preferences for managers at different stages of their career, expecting managers in the early career stage to exhibit a greater proclivity for intrinsic rewards, managers in the middle stage a preference for extrinsic rewards, and managers in the late career stage to generally place less importance on both kinds of rewards. These findings also suggested that although intrinsic rewards can be highly valued by employees, for some managers a combination of extrinsic and intrinsic rewards can have a positive effect on performance and motivation.


This study examined the effect of employee benefit management in organizational productivity with specific reference to FCMB, Port Harcourt in Rivers State. This study result has covered the objectives that was stated earlier in chapter one. First objective is to examine the relationship between monetary benefits (basic pay, merit/cost of living and productivity bonus) and employee productivity among academic and administrative staff in FCMB, Port Harcourt.

The second objective is to examine the relationship between non-monetary benefits (recognition, learning opportunity, challenging work and career advancement) and employee benefits among academic and administrative staff in FCMB, Port Harcourt.

The third and fourth objectives are to determine if there is a relationship between employee benefit and employee’s motivation and to examine if there is a relationship between employee benefit and job satisfaction of staff in FCMB respectively.

The results in this study shows that both monetary and non-monetary benefits have significance effects to the staff/employee productivity. Furthermore, that there is a positive relationship between employee benefit and employees motivation and also between employee benefits and job satisfaction of employee. These results had been shown in data analysis such as in Chi-square test of hypothesis.


Monetary benefit and non-monetary benefit give a significance effect to the employees’ productivity in organizations. In this study, only seven variables were employed to examine the role of employee benefit management on organizational productivity. There are other variables that are not included in this study but these other variables may be able to give a better effect to the employee productivity in organizations. It is recommended for further or future research to include these other variables especially for the variable that are not included in this study.

In this study, the researcher only focuses on the employee productivity in organizations. Therefore, other effects and relationship should be explored such as turnover, motivation employee satisfaction and others. These factors might also influence employee’s behaviour in the organizations.

Furthermore, a more comprehensive study can be extended to all private and public tertiary educational institutions to ensure that better generalizable findings can be achieved.

Employees should be trained according to the present content of the environment.

Management must be careful in the following factors to increase the employee motivation of the employees by redesigning employee benefit.


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