EFFECT OF HUMAN CAPITAL DEVELOPMENT ON ORGANIZATIONAL PERFORMANCE
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Increasing productivity in the public sector to match the levels of the private sector has been the call of the Civil
Services Commission in Nigeria. According to Michie & Oughton (2003), research suggests that closing the
productivity gap between the private and public sectors will require increased investment in research and
development, capital and people, improved education and training, and a modernised productive infrastructure. In a
bid to improving productivity, Michie & Oughton (2003) further suggest that there should be a continuous improvement
in management practice, corporate governance and organisational design. Michie, Conway & Sheenan (2003) also
point out that a major challenge for modern organisations is the urge for increasing productivity and achieving a
competitive advantage
Due to the high pace of change and economic instabilities in some markets, the organization of the workforce level
possesses a crucial role in many businesses today. This especially true in the manufacturing sector since the “human
component of production” is the most important and costly part of the supply chain The volatility of demand that is
prevailing in some sectors increases the importance of having a good human capital planning strategy.
Organizations are under increasing pressure to find ways to implement their strategies in a rapidly changing
business environment in which planning life-cycles tend shrink to reduce the time ‘to market’ intervals. At the same
time, organizations are putting more and more emphasis on aligning the organization and people in their attempt to
achieve business goals. Human capital development is usually seen as an essential feature of an ideal type model of
human resource management, even if it does not always appear to be a given high priority in practice
The issue of effective planning for people was brought up long before the advent of human resources management.
However, there has been little research evidence of its increased use or of its success. Hassan (2007), who argues
that the developing business environment forces organizations to plan effectively for their human resources, the rapid
changes in the business environment, also makes it increasingly difficult for organization.
1.2 STATEMENT OF THE PROBLEM
Human capital development in Nigeria has been hindered with different problems that prevent employee development
and growth and thus prevent overall growth to the productivity of an organization. Lack of careful human capital
planning over the years by management has been identified by several researchers as the bane of most
organizational failure for low productivity. Therefore this research thesis is to ensure that management have proper
personnel in place to help ensure that the organization attain maximum productivity possible and thereby reducing
wastage of resources. Recently, proper human capital development and employee career growth through adequate
training, motivation and management structure has been identified as a panacea to the low productivity witness by
the most organization. So this research work aim to carefully analyzed the effect of human capital development on the
productivity of the manufacturing industry especially the Nigeria Flour Mills and also to measure the effect/correlation
between training, motivation and career development on an organizational productivity cum level of contribution of employee.
1.3 OBJECTIVES OF THE STUDY
The broad objective of this research is to examine the effects of human capital development on employee productivity
in the manufacturing industry, a study of Nigeria Flour Mills Plc. The specific objectives for the study are;
- To examine the relationship between employee training & development and employee career growth.
- To evaluate the effect of employee orientation on employee satisfaction.
- 1.4 RESEARCH QUESTIONS
- Is there a significant relationship between employee training & development and employee career growth?
- Does employee orientation have any significant effect on employee satisfaction?
- 1.5 RESEARCH HYPOTHESES
- Hypothesis I
Ho: There is no significant relationship between employee training & development and employee career growth
Hi: There is a significant relationship between training & development and employee career growth
Hypothesis II
Ho: Employee orientation does not have any significant effect on employee satisfaction
H1: Employee orientation has a significant effect on employee satisfaction - 1.6 LIMITATION OF THE STUDY
- ‘To limit the scope of our research was of major concern for us in the beginning of our work in order to arrive at some
kind of starting point, on which we were able to build a realistic and feasible study. We have limited our study to
include long-term HRP, career development and planning, motivation and productivity. Our study will relies heavily on
empirical data, due to the specified timeframe and economic factors; it was not realistic to design our research to
include visits to other or Organizations except Nigerian Flour Mills. However, most empirical data will be collected
from staff of Nigerian Flour Mills who are career motivated and works in factory. - 1.7 SCOPE OF THE STUDY
- The study is aimed at studying the Effect of human capital development on productivity a case study of Nigerian Flour
Mills However, due to proximity and size of the case study, specifically, some department, in Nigerian Flour Mills
specifically Human Resource Department, production Department and some Management Staff member’s responses
were carefully analyzed through a well structured questionnaire. However, the research study is delimited with time,
geographical implications, finance and other phenomenon that affect scope of research report. - 1.8 SIGNIFICANCE OF THE STUDY
This study could be relevant to the performance and importance of human capital development in the manufacturing
industry. The study could also be relevant to other industry as it is an aid to enhance economic growth, planning and
development on manpower issues. There is the need now than ever to re-discover the weaknesses and the strengths
of employee in determining the level of motivating the employee may desire. The study will throw more light into the
practice, managerial procedure and control of the human capital development, It would assist management to create
a situation where the employee can grow likewise the organization can be satisfied with each other as both cannot
exist without the other. - 1.9 OPERATIONALIZATION OF VARIABLES
- This involves expressing the relationship between of human capital development and employee productivity in
mathematical form.
In specifying the models, the independent variable is human capital development while the dependent variable is
employee productivity.
EP = f (HCD)
Employee Productivity = f (Human Capital Development)………………………………. (1)
HCD = (Training & Development, Employee orientation)
EP = (Employee Satisfaction, Employee Career Growth)
EP = a + bi HCD……………………………………. (2)
Model 1:
ECG = a + bi TD
Model 2:
ES = a + bi EO
Where:
EP = Employee Productivity
HCD = Human Capital Development
ES = Employee Satisfaction
TD = Training & Development
EO = Employee orientation
ECG = Employee Career Growth
EFFECT OF HUMAN CAPITAL DEVELOPMENT ON ORGANIZATIONAL PERFORMANCE