THE EFFECTS OF INTERNAL ENVIRONMENT ON EMPLOYEE PERFORMANCE

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THE EFFECTS OF INTERNAL ENVIRONMENT ON EMPLOYEE PERFORMANCE: A CASE STUDY OF UNILEVER NIGERIA PLC, ABA

ABSTRACT

The importance of the working environment of any organization to a very large extent determines performance of employees in that organization which in turn determines the success of such organization. This study is intended to explore the effects of internal environment of job performance and the make-up of what constitutes an internal environment in the company used as a case study. There are various factors that determine an internal environment such as leadership styles, cash flow position, government legislature and motivation. The employees’ performance on the jobs is basically a function of two variables; one is the individual’s ability to perform the job, and secondly, the motivation that encourages or drives him to use this ability in the actual performance of the job. It is widely assumed that motivating persons who posses high ability will lead to greater increase in performance and productivity. There was a decline of staff turnover in the company under study, who left in search of better working environment in terms of better promotion. Policy, better remuneration and better working conditions. This has reduced the performance of some workers as well as their productivity and efficiency. This led to finding out if incentives such as bonuses are attractive enticement to workers and also to find out if salaries paid in the company under study are considered attractive when compared to other manufacturing companies. Both primary and secondary methods of data collection were used for this study. The population was determined, sample drawn and questionnaires designed for data collection. Data was collected, analyzed and interpreted. The study therefore recommends that, the work environment should be made conducive and improved in terms of nature of supervision, boss-employees relationship, and employee-employee relationship and most important in terms of motivation.

TABLE OF CONTENT
Title Page i
Approval Page ii
Certification iii
Dedication iv
Acknowledgment v
Abstract viii
Table of Contents ix

CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Brief History of Unilever Nigeria Plc 8
1.3 Statement of Problem
1.4 Objective of the Study
1.5 Significance of Study 11
1.6 Scope of the Study 12
1.7 Limitations of the Study 12
1.8 Research Questions 13
1.9 Research Hypothesis 14
1.10 Definition of Terms 15
References 17

CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 18
2.1 Historical Background 18
2.1.1 The notion and the Value of Work 19
2.2 Theoretical Framework 19
2.2.1 Why Do Men Work 19
2.2.2 What is Work Environment 21
2.2.3 Determinant of Work Environment 23
2.2.4 Leadership/Managing Style 23
2.2.5 Motivation and Productivity 25
2.2.6 Job Enlargement and Enrichment 34
2.2.7 The concept of Job Satisfaction 35
2.2.8 Operationalizing Job Satisfaction 36
2.2.9 Job Satisfaction and Employee’s Performance 37
2.3 Cashflow Position 39
2.4 Government Legislation/Policies 40
References 41

CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 42
3.1 Research Design 42
3.2 Identification of Population 42
3.3 Method and sources of Data 43
3.3.1 Primary Data 43
3.3.2 Secondary Data 43
3.4 Questionnaire Design 44
3.5 Questionnaire Assumptions 45
3.6 Data Analysis 45
3.7 Limitation of the Research Methodology 47
3.8 Restatement of Research Questions and
Research Hypothesis 48
References 49

CHAPTER FOUR: INTRODUCTION
4.1 Data Presentation 50
4.2 Analysis of Questionnaire 50
4.3 Test of Hypothesis 61

CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
5.1 Summary of Major Findings 72
5.2 Recommendations 76
5.3 Conclusion 77
Bibliography 80
Questionnaire 82

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY

Man wherever he is, be it at home, school or even the company he keeps is always influenced by his internal environment. The reason being that he is easily assimilated into the totality of his environment.

Generally, internal environment refers to one’s immediate surroundings including water, air, land in which one lives that influence one’s life. But for the purpose of this research, internal environment here shall be referred to as elements within the work environment, such as working environment, management style, inter- relationship amongst staff and motivational factors – incentives, salary increase and opportunity to develop oneself. These have effects on the overall performance of an employee.

An improved work environment will result in a reduction in a number of complaints and absenteeism and will bring an increase in productivity, Roelofson (2002).

Employee makes critical difference between success and failure. The effectiveness with which organizations manage, develop, motivate and engage the willing contribution of the employees will enable them to capitalize on their expertise most efficiently. There is a link between people management and business performance. According to Roelofson one of the fundamental human requirements is work environment that allows people to perform their work optimally under comfortable condition.

People are beginning to be conscious of the fact that to be happy and cheerful in one’s work place, some conditions must be present even with little pay. For example, not withstanding whatever is provided for a seamstress for her job, if there is no machine, all that is provided comes to naught. Again, when a librarian is provided for a noisy environment, he will not carry out his work effectively because the environment suitable for effective library function is quietness and orderliness. Similarly, an Accountant who deals with figures will be annoyed if he is sharing a calculator with four staff members. Also, the secretary is looked upon as human machine, trained with the responsibility of taking note of what others may regard as minor and making suggestions based on records available. To effectively carry out these and other functions, the secretary needs a ‘hightech’ office where some electronic machines will complement his/her human ability.

In an employment situation, the employee promises to live up to expectation. The employer expects nothing less. But the point is: has the employer provided a work environment that will facilitate the effective discharge of the employees’ assigned duties? Most employers keep complaining of poor returns from employee without taking out time to find out why the new employer has not performed beyond what the former one was able to do.

If an organization provides its employees with better work and most conducive working environment they can perform exceptionally well, and companies can capitalize on their enhanced productivity in the shape of cost reduction, which will ultimately contribute awards rich profits. The relationship between employee attitudes and company performance, as suggested by Patterson et’ al., (1997), is highly correlated. They suggested that managers of organizations who are eager to promote productivity and Profitability should pay close attention to the attitudes of their employees in order to make them more positive.

THE EFFECTS OF INTERNAL ENVIROMENT ON EMPLOYEE AND BUSINESS PERFORMANCE

The internal environment has the biggest effect on employee performance and productivity. As a result of that, businesses are taking a more strategic approach to environmental management to enhance their productivity through improving the performance level of the employees. Govindarajulu (2004)

It is evident in the research findings of Patterson et’al, (2004) that the more satisfied workers are with their internal environment the better the company is likely to perform in terms of subsequent profitability and productivity and vice versa.

Many managers and supervisors labour under the mistaken impression that the level of employee performance on the job is only proportional to the size of the employee’s pay packet. Although this may be true in a minority of cases. Numerous employee surveys have shown by and large this to be untrue. In fact, salary increases and bonuses for performance in many instances, have a very limited short-term effect. The extra money soon comes to be regarded not as an incentive but as an “entitlement”.

There are other factors that when combined provide a positive effect on employee performance and productivity. When these other factors are missing or diluted, the employee comes to work only for a paycheck. In this case, the employee is present at work in body only, leaving their mind outside the gate. Business Performance Pty Ltd (2006)

The key factors and how each can be utilized by supervisors and managers to boost performance are:

Goal- setting
Employees should be involved in setting meaningful goals and performance measures for their work. This can be done informally between the employee and their immediate supervisor or as part of an organization’s formal performance management process. Here each employee is actively engaged in the goal-setting process and takes ownership of the final agreed goal and measures.

Performance feedback
Employees should be regularly given feedback on how they are performing. This should consist of both positive feedback on what the employee is doing right as well as feedback on what requires improvement. The feedback needs to be as objective as possible and delivered with the appropriate interpersonal and conflict resulting skills. It can be a mix of both informal feedback delivered as part of a formal performance management cycle.

Role congruity
The role the employee is required to perform should consistent with their expectations on joining the organization and any subsequent training. The organization’s role expectations are typically reflected in formal documents’ such as job Description and Role specifications. These expectations should be consistent with tasks allocation to employees.
Incentives
What motivates employees in particular should be determined and also set up formal and informal structures for rewarding employees that behave in the way required.

Supervisor support
Supervisor should act as advocates for employees, gathering and distributing the resources needed by them in order for them to do a good job. Immediate supervisor and managers need to display the interpersonal skills required to engage employees and enhance their self-confidence. This includes providing positive encouragement for a job well done.

Resource availability
Adequate maternal resources need to be available to enable employees perform to the best of their ability. It will help them work easier and help minimize error rate and customer dissatisfaction by supplying job aids. These can include templates, guides, models and checklists.

1.2 A BRIEF HISTORY OF UNILEVER NIGERIA PLC
Unilever Nigeria Plc, formally known as Lever Brother Nigeria Plc is one of the oldest manufacturing outfits in Nigeria; the company was established in 1983 to manufacture soap using palm oil. Over the years the company diversified and expanded its operation to the production and market toilet soap, non soapy detergent, foods and personal products including tooth pastes, body cream, lotion and body care product.

The company through selected acquisition has strengthened its merger with Lipton Nigeria limited in 1985, Chesebrough product limited in 1988 and lately in 1995 with Unilever Nigeria Plc. In order to ensure sustenance in management, the company now has four manufacturing sites for its operation from the original site at Apapa, the premier and largest site, produced soap such as sunlight, personal products mainly tooth paste and range of vaseline, the second oldest site, Aba, it devoted to the product of the non-soapy detergent powders and bars. Here, the company makes such popular brands as Omo. The third and newest of the plant commissioned in 1993 is the ultra modern food factory in Agbara, where the company produces Royco, blue band among others and of course the fourth the Ogun site where such products as Elide, peers, etc, are produced.

The company is fully committed to backward integration and self sufficiency and has made considerable progress in its effort towards local sourcing and development of raw materials. The tea plantation on the manbilla, plateau under sources the company’s unrelenting drive for self sufficiency. The first crop of tea was harvested for test packing at the end of 1991 and a processing factory for the tea leaves has been completed on site. The company has also built a large palm kernel mill at its Aba factory to improve the supply of vegetable oil an essential raw material for soaps and edibles production. It is also making investment in oil palm plantation in order to improve its local sourcing. Unilever Nigeria plc range of quantity products are distributed and sold at uniform prices all over the country. The company struggles to lead in all its core markets of fast moving customer products and achieve strong profitable growth by being the best at identifying and meeting consumers needs.
1.3 STATEMENT OF PROBLEM
As has been suggested, the average business firms place more premiums on profit, especially in a capitalist economy as ours. Employers believe they can hire and fire at any time, as far as there is someone willing to do the job even at a lower pay with this unfortunate state of affairs, internal environment are not given proper attention.

This disturbing tread in Unilever Nigeria plc has coursed the company to lose its staff who leave in search of a better internal environment in terms of better promotion policy, better remuneration, good and better working conditions. On this note, this work attempts to find out the extent to which the internal environment such as works environment, motivation feeds like salary increase in Unilever Nigeria Plc has affected the job performance and productivity of its employees.

1.4 OBJECTIVE OF THE STUDY
The study is aimed at ascertaining whether there is a casual relationship between the conditions available in the manufacturing environment of Unilever Nigeria plc and the staff performance. The work will also investigate whether perceived promotional opportunities will make employees stay with the company and whether money is the main motivating factor. Furthermore, the following objectives will also be considered:
• To find out whether incentives such as bonus performance allowances, etc is an attractive inducement to workers.
• To find out whether salaries paid to the Unilever Nigeria Plc employees are considered attractive when compared to other manufacturing companies.
Finally, this work will seek to suggest to managers, supervisors, administrations and others who have workers under their control, a workable policy and strategy to providing a conducive zeal and enhance the job

1.5 SIGNIFICANCE OF THE STUDY
This study will explore the effect of internal environment on employee performance and the make-up of what constitutes a good internal environment in the company used as a case study. It is intended to be of interest to the top management in the manufacturing companies who would find the study very essential as a guide in structuring the internal environment and make it a better place, putting all the necessary facilities in place to enhance efficiency and also increase the level of job performance.

1.6 SCOPE OF THE STUDY
The study is not designed to cover the manufacturing companies in Nigeria but it is limited to Unilever Nigeria Plc, Aba office. Efforts have been specifically devoted to find out how the effect of internal environment affects the job performance of staff of Unilever Nigeria Plc for this purpose, the study covers both the junior and middle level management staff.

1.7 LIMITATION OF THE STUDY
This is limited to Unilever Nigeria Plc Aba office in Aba metropolis due to time and logistics constraints, which made extensive coverage of the manufacturing location impossible.

1.8 RESEARCH QUESTIONS
To further focus on this study, the following research questions are posed:
1. Are employees in Unilever Nigeria Plc likely to resign if salaries paid by the company are perceived to be behind salaries paid by manufacturing companies of equivalent rating?
2. Dose the work environment in Unilever Nigeria Plc encourage staff to put in longer hours in their jobs because they are adequately compensated in terms of better salaries, attractive housing allowances, transport allowances, etc?
3. Dose the work environment in Unilever Nigeria Plc provide opportunities for staff to grow and develop themselves intellectually.
4. Has the work environment in Unilever Nigeria Plc being such that employees are getting promotion as at when due?
5. Are there external training programmes organised by the company for staff to improve themselves and enhance the performance of their jobs?
1.9 RESEARCH HYPOTHESES
1. Null Hypothesis (Ho): the working environment of Unilever Nigeria Plc is a motivating factor.
Alternative Hypothesis (HA): The working environment of Unilever Nigeria Plc is not in any way a motivating factor.
2. (Ho): Motivation enhances productivity and performance
of employees in Unilever Nigeria Plc.
(HA): Motivation does not enhance productivity and
performance of employees in Unilever Nigeria Plc.
3. (Ho): Provision of a good working environment and
conditions of service lead to low rate of absenteeism and low rate of job changing amongst the staff of Unilever Nigeria Plc
(HA): Provision of a good working environment and
conditions of service does not have any effect on the rate of absenteeism and job change amongst the staff of Unilever Nigeria Plc.
4. (Ho): Increase in salary and bonuses increases
employees performance.
(HA): Increase in salary and bonuses do not increase employees performance.
5. (Ho): Abundant opportunities to grow and develop
oneself in the company motivate employees.
(HA): Abundant opportunities to grow and develop oneself does not motivate employees.

1.10 DEFINITION OF TERMS
In this research the under listed terms shall be deemed as having the following meanings respectively:
Environment: Surrounding conditions that influence development or growth.

Employee: Someone who works in an office or a person, who performs services for an employer under a contract of service.

Performance: This is the act of doing a piece of work which one is either ordered to do or promised to do. It could be as the result of an act, which is measured in quality or in quantity.

Productivity: The rate or efficiency of work especially in manufacturing production.

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