Abstract
The research examines
the strategies for solving problems of human capital management in small scale
business in Nigeria. Using some selected small scale businesses in Edo State as
a case study. Deliberate shift emphasis to small-scale enterprise, which were
seen to have large potential for domestic linkages for rapid sustainable
industrial development, ensuring self-reliance industrialization with ability
to rely largely on local raw materials. The objective, therefore is to
investigate into the strategies for solving of human capital management in
small-scale business. The instrument used for data collection is structured
questionnaire which were administered to the employees, and owner of 10
small-scale businesses in Edo State. It was discovered that workers recruited are locally based and this may
not make it possible to hire the best candidate. On the basis of these problems, it was
recommended among others that a
specialized personnel department should be established by the firm, for
coordinating personnel policies in the organization.
TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract v
Table of Contents vi
Chapter One: Introduction 1
1.1 Background
to the Study 1
1.2 Statement
of Problem 6
1.3 Research
Questions 7
1.4 Objective
of the Study 7
1.5 Statement
of Hypothesis (es) 8
1.6 Significance of the Study 9
1.7 Scope
of the Study 10
1.8 Limitations
of the Study 11
1.9 Definition
of Terms 12
Chapter Two: Review of Literature Review 14
2.1 Introduction
14
2.1.1 Human
Capital Management 15
2.2 Human
Capital or Personnel Policies 18
2.3 Determination
of Human Capital Function 19
2.4 Function
of Human Capital Management 22
2.5 Problems of Human Capital Management 23
2.6 Strategies
for Solving Problems 29
Chapter Three: Research Method and Design 34
3.1 Introduction
34
3.2 Research
Design 34
3.3 Description
of Population of the Study 34
3.4 Sample
Size 34
3.5 Sampling
Techniques 35
3.6 Sources of Data Collection 35
3.7 Method
of Data Presentation 35
3.8 Method
of Data Analysis 35
Chapter Four: Data Presentation, Analysis and
Interpretation 37
4.1 Introduction
37
4.2 Presentation
of Data 37
4.3 Data
Analysis 37
4.4 Hypothesis
Testing 43
Chapter Five: Summary of Findings, Conclusion and
Recommendations 47
5.1 Introduction
47
5.2 Summary
of Findings 47
5.3 Conclusion
48
5.4 Recommendations
49
References 51
Appendix A 53
Appendix B 54
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
An individual in an establishment may lose his
motivation if his effort is not properly rewarded. This necessarily calls for a
qualified professional personnel manager in an establishment. Organizations can
hardly progress without personnel manager to manage their activities. Thus
human capital management has become very important in business; the human
capital management function is one that is most other relegated. This comes
from the fact that the small- scale business is often more interested in
obtaining equipment for production turning out of good quality consumers for
much desired income then how to manage its employees for greater productivity,
because of the few number of employees on the rule, the personal nature of
their employment relationship and the assumption that the owner manage is
naturally endowed with the qualities to manage successfully few employees, the
job of personnel is taken for granted.
On the other hand, a closer examination would
reveal that an efficient and important as good quality product. To this end,
the efficient management of the small number of employees at the disposal of
small business is of paramount importance.
The employee of a small business constitutes an
effective public relation medium for the organization. A satisfied, well
treated work force will reflect loyalty and enthusiasm in their dealing with
consumers and by so doing that offer them as a major asset to the business. In
addition the materials, equipment machines and other things used in business
are available to all small scale business at equal prices but the only
distinctive characteristic among small business is the good employees relation
which; cannot be copies equipped with specialized aids, the small business must
rely more heavily on its personnel alone if it is to survive the competition of
the market pace.
In Nigeria, the small-scale business experienced
a lot of human capital management problems, ranging from the paternalistic
relationship in the selection of the work force a reward system that is based
on other criteria than productivity to the fact that employees can be fired
without due regards to lay down disciplinary procedures. A poor staff selection
process would lead to inefficiency in production and eventual failure.
Government intervention in the industrial system
to transfer ownership and management to the state started from colonial times.
Rail and air transport serviced; power generated and distribution and other
public utilities have generally been developed and managed by the government.
The government has thus, through this process provided basic infrastructure,
which enable private enterprises to continue. It was natural that this pattern
continued when the country got independence in 1960. The government made
several efforts to industrialize the country by the establishment of capital —
intensive largely urban-based thereby encouraging rural urban drift. Efforts
were made in the 80’s to reverse this situation in 1986 was the government
deliberate shift of emphasis to small-scale enterprises.
The policy of indigenization is essentially aimed
at transferring the control of economic power from foreign hands to indigenous
hands. Although indigenization transfer could be the state as the cooperation
body representing the citizens to individual citizens or to both in joint
ownership and control emphasis has really been on indigenous private enterprise
which are generally seen to have large potentials for domestic linkages for
rapid sustainable industrial development ensuring a self-reliant industrialization
with ability to rely largely on local raw materials, harnessed to boost
employment mainly in the rural areas (Aiyderbuse, 2010).
But small scale businesses in Nigeria have
compelling reason especially human capital management problem etc that has made
accomplishing great height success inclusive (Anao, 2009).
There is therefore, a greater need in the 90’s
for the issue to be strategically and logistically discussed and tackled,
training both the old and new entrepreneur becomes a suggested attempt to
tackle the problem of human capital management from the root no business can
exist without human resources and for these human resource to be efficient to
maximize their productivity they must be well selected, trained, motivated and
disciplined (Imiavan, 1996).
The small scale entrepreneur has to be a good
manager since he cannot afford specialists to look after the multiple business
decision of small scales finance purchasing. This calls a jack of all trades
and master of none syndrome. However, though a well rounded managerial experience
is essential for better performance, the new (trainee) entrepreneur emerging from
the rank of employees and a fresh graduate usually as familiarities or
experienced in only area.
Either sales finance, purchasing, over all
managerial understanding is therefore developed true training programs. The
goal is to enable participant to look at any enterprises in totality and
introduces them to element of management process of planning, organizing,
staffing, motivating, coordinating and controlling (Imiavan, 1996).
1.2 Statement
of Problem
Researching on problems in small scale businesses
have faced much divergent approaches principally because, since the publication
of industrial policy of Nigeria in 1988 by the federal Ministries of
Industries, a lot of interest have been shown on the small scale business
enterprises by various organization ranging from Bank Manager, Development
Associations, Institute of Higher learning and lately the organized product
sector spear headed by the Niger Association of Small Industrialist (NASSI).
These various interests have led to a conflict of opinions even on basic as the
definition of what a small scale business.
This is also a feeling in some quarters that
study on small scale business does really have in much; relevance to the economy
and like the name implies “small scale” it means no big time foreign exchange
could be earned from it. But it must be noted that most industrialized nations
of the world started by encouraging small scale business. However, having seen
all these, this study will attempt to clarify most of these issues while not
leasing its focus of identifying the strategies for solving the small scale
business human capital problem.
1.3 Research
Questions
In
relation to the objective of the study, the following research questions are
addressed:
i. Is the absence of personnel department in
small scale business a major problem of human capital management?
ii. Is the use of friends and relatives in
small scale business a major handicap for effective staff recruitment in human
capital department?
iii. Does the inability of small sale to perform
the perceived function of the human capital management a major cause for future
problems?
1.4 Objective
of the study
The broad objective of this study is to examine
how the problems of human capital management in small scale business in Nigeria
can be solved. However, the specific objective of this study re to:
i. Determine if the absence of personnel department
in small scale business a major problem of human capital management.
ii. Ascertain if the use of friends and
relatives in small scale business a major handicap for effective staff
recruitment in human capital department.
iii. Determine if the inability of small sale to
perform the perceived function of the human capital management a major cause
for future problems.
1.5 Statement
of Hypothesis
The following hypotheses are hereby formulated in
null and alternative forms;
Hypothesis
One
HO: Absence of personnel department in small scale
business is not the major problem of human capital management.
HI: Absence of personnel department in small scale
business is the major problem of human capital management.
Hypothesis
Two
HO: The use of friends and relatives in small scale
business is not a major handicap for effective staff recruitment in human
capital department.
HI: The use of friends and relatives in small scale
business is a major handicap for effective staff recruitment in human capital
department.
Hypothesis Three
HO: The inability of the small scale to perform the
perceived function of the human capital management in their areas is not a
major cause of human capital management problem.
HI: The inability of the small scale to perform the perceived function of
the human capital management in their areas is a major cause of human capital
management problem.
1.6 Significance
of the study
The impact of this study on individual,
government and entrepreneur cannot be over emphasized in the economy, taking in
to consideration, the rate of human capital management in small scale business
over the years.
Organization:
It will serve as a guide to
organizations who provide or interned to provide training and retraining
programmes for the employee and how to carry out such schemes which will be
geared towards organization effectiveness.
The economy: This study will be of great relevance to the overall economy, as it
will help provide solutions to the problem of human capital management in small
scale business thus building confidence in the business environment.
Government and policy makers: The result of this study will therefore be of
immense help to the policy makers, government, individuals and investors.
1.7 Scope
of the Study
This research work deals specifically with the
strategies for solving human capital management problems in selected small
scale business organization in Edo State. The research work will focus on the
sample group and attempt to investigate the causes of human capital problems. A
time frame of 5 years was used which covers 2010 to 2014. A sample size of 45
was used for effective result.
1.8 Limitations
of the Study
The researcher in the course of the research work
encountered a number of problems, which militated against the study. The
problems were:
a. Attitude of the respondents: In the course of carrying out this research one
problem encountered by the researcher was the altitude of the respondents, some
of the respondents was suspicious of the researcher’s intention therefore were
reluctant and sometimes unwilling to supply information.
b. Financial Constraints: Finance has been a major constraint in carrying
out research project. Information gathering entails a lot of movement from one
place to the other and the cost of transportation is quite high, cost of
stationeries sky rocketed in Nigeria market and this posed major problems to
the research effort.
c. The problem of non return of questionnaires
by the respondents: Some of the
respondent refused to return the questionnaires that were distributed to them
by the researcher, in fact 11.11% of the respondents did not return the
questionnaires distributed to them by the researcher. This refused the sample
of workers finally included in the study.
1.9 Definition
of Terms
Strategy: Strategy Is the various scheme methods and maneuvers which management
hopes to move the organization from its present position to arrive at its
target goal by the end of a specific period
Management: Management is a social process entailing responsibility for the
effective and economic planning and regulation of the operation of an
enterprise in fulfillment of a given purpose or tasks. A manager is someone who
is responsible for the work of other. This simply means that he has
responsibility for ensuring that the conformity with the concerned. An owner of
a small-scale business may also be the manager or may employ a professional
manager
Human Capital Management: Involves the effective utilization, development
and motivation of people at work to achieve objectives of the organization, the
satisfaction and development of the individual employee.
Vertical Communication: This communication line is otherwise called line
management. The line runs from top to bottom that is from management or top officer’s
information flows down the rungs of the ladder to the officer the system also
gives room for feedback. Horizontal Communication: This occurs when
information diffuses across the breath of an organization among people of
comparable status.
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