RIGHTSIZING AS A TECHNIQUE FOR ACHIEVING EFFICIENCY IN THE NIGERIAN PUBLIC SECTOR

ABSTRACT

Organizations,  be it in the public or private sector, strive to maintain the  right quality and quantity of staff to contribute optimally to its goals and  objectives. Consequently, one of the programmes developed by the Federal Government in its  on-going  reforms,  to  make  its  Institutions   work   more   efficiently  and effectively,   is   rightsizing.   The   underlying   philosophy   is   transformation. Unfortunately, the operating officers seem to be at difficulty in implementing this important   policy   reform   of   the   Federal   Government.   Consequently,   the organizations are either  overstaffed or understaffed. In either case, productivity suffers. As a result of these the study sought to find out the impact of the various rightsizing  techniques  (maintenance  of accurate personnel  records  and regular personnel audit, Human Resource Planning, employee training and development; employee retention strategies  such as performance  pay,  employee  training and career development, high level of  wage rate and organizations image, employer paid  medical  scheme,  employer  provided    or  employer  paid  housing,  retired benefits etc, etc and employee regular evaluation, on efficiency. The study was conducted   in  Enugu   and   three   public   sector   Institutions,   Federal   Radio Corporation  of  Nigeria,  Power   Holding  Company  of  Nigeria  Limited  and Nigerian Television Authority were used as case study. The survey design was used for the study. The population and sample size of the study were 1175 and

298 respectively.  The questionnaire  and interview methods were used to  elicit responses   from   the   respondents.   The   data   collecting   instruments   were appropriately  tested  to  ensure  Reliability  and  validity.  Five  Hypotheses  were developed and tested using chi-square (x2) analytical  techniques to find out the impact of the various rightsizing techniques mentioned above on efficiency. The study  revealed  that  rightsizing  techniques  indeed  have  significant  impact  on efficiency.  It is therefore  recommended  that public sector organizations should attach importance to effective management of its Human Resources through the application of appropriate rightsizing techniques to maintain optimum workforce and right caliber of staff at all times in order to enhance efficiency.

CHAPTER ONE

INTRODUCTION

1.1      Background of the Study

Rightsizing is the Human Resource Management  function of manpower planning and staffing. Institutions  are established  to accomplish specific goals. To achieve these goals, the human resource is one of the crucial factors, without which the goals are unattainable. The human resource is the engine room of ideas and  production.  It  is  the  human  resource  that  organizes,  plans,  controls  and directs  other  resources.  For  example,  while  other  factors  of  production  like technology,  financial  and material  resources  may be in abundant  supply,  they have to be coordinated by a human being, who because he has a will, personal desires and preferences, can direct them to accomplish desired objectives. Thus, the  need  to  maintain  the  right  quality  and  quantity  of  staff  with  the  right knowledge, techniques and skills, as well as the right frame of mind and attitude to contribute optimally to organizational goals and objectives. (African Training and  Research  Centre  in Administration  for  Development  Workshop,  October

2000).  According  to  Olowo  and  Ademolekun  (2005),  it  is  becoming  more essential to secure and manage competent human resource as the most valuable resource  of  any  organization  because  of  the  need  for  effective  and  efficient service delivery.

In the past few decades, all over the world, organizations and environment have  undergone  rapid  and  tremendous  changes  largely  due  to  globalization. Globalization has resulted in the huge advances in the area of technology. This has completely reshaped the landscape of formal organizations all over the world, the  less  sighted  organizations  operating  in  the  same  environment  lost  their fortunes and in some cases, were faced  with virtual extinction as a result of the inability to anticipate and adapt their operations to changes brought about by the latent  forces  of globalization  in  the  society (Onyeonoru,  2005).  Change  is a process that requires action and which ever way workers react to it, has implicit or explicit implications for realization or non realization of organizational goals and  objectives.  Nigerian  work  organizations  are  not  insulated  from  changes emanating from globalization forces. And since globalization presently appears irreversible, every organization in both public and private sectors must prepare its

workforce   adequately  to  cope  with  the  frequent   changes  associated   with globalization.

Consequently,   the  Federal  Government   has  since  2004,   commence various   reform   programmes   aimed   at  making   its  institutions   work  more efficiently  and  effectively.  One  of  such  programmes  adopted  in its  on-going reform, is rightsizing. The underlying philosophy is transformation.   The overall vision is a Nigerian public sector that works  efficiently and effectively for the people. Rightsizing may be defined as the process through which organizations determine and maintain a level of employment “right” for its requirements or the continuous  and pro-active  assessment  of mission-critical  work and its staffing requirements. It is an on-going planning process to determine the optimal number of employees in every area of the organization. Therefore, for an organization to realize its  goals and objectives, appropriate  rightsizing techniques such as, the maintenance  of accurate personnel records and regular personnel audit,  human resource  planning,  employee  training  and  development,  employee   retention strategies  and  employee  regular  evaluation  are  sine-qua-non  for  enhancing efficiency.

1.2      Statement of the Problem

The study became imperative when viewed against the backdrop of the observed inefficiency and monumental waste arising from huge personnel cost in the public sector institutions, largely due to poor human resource  management practices.   The  following  were  common   features:   Organizations   are  either understaffed   or   overstaffed;   overbloating   workforce   with   redundant   staff performing  overlapping  and  duplicating  functions;  reported  cases  of  ghost workers and staff with fake certificates symptomatic of poor personnel records and irregular or absence of personnel audit resulting in organizations inability to ascertain accurately at any point in time, the number of staff in its employment; employee recruitment and selection processes based on considerations other than merit; aging workforce  without proper succession plan; prevalence of unskilled workforce;   absence  of well tailored training and development  programmes  to improve the employees skill and build capacity; underfunded public institutions lacking the capacity to make optimal use of technological changes to modernize and adapt to global changes; lack of adequate incentives and appropriate reward

systems  to  create  job  satisfaction,  motivate  and  retain  skilled/  experienced employees;  ineffective  and  biased  employee  performance  appraisal  processes resulting in highly demotivated workforce and rapid employee turnover. (Bureau of Public Service Reforms Report, 2008).

The resultant effect is the glaring inefficiency in realizing the objectives for which  the organizations  were set-up  and  huge  personnel  costs which  the government constantly complains constitutes a major source of drain on its lean financial resources. Consequently,  the federal  government recently commenced various reform programmes aimed at returning the public sector organizations to the part of effectiveness and efficiency. One of the policies adopted in the reform programmes is  ‘Rightsizing’. Incidentally,  the operating officers seem to be at difficulty   in   implementing   this   important   policy   reform   of   the   federal government.    Consequently,    the   organizations    are   either   overstaffed    or understaffed. In either case, productivity suffers. The study therefore sought to find  out the various  techniques  the federal  government  has been  adopting  to rightsize its workforce and how effective they have been in achieving efficiency.

The study therefore seeks to find out the various measures adopted by the

Federal Government to rightsize its workforce and its impact on efficiency.  That is, maintenance of optimum result oriented workforce resulting in the reduction of huge personal costs, wastage as well as timely realization of set objectives.

1.3      Objectives of the Study

This study aims at assessing the impact of rightsizing on efficiency in the public sector organizations. The specific objectives are:

1]       To find out the impact of maintaining accurate personnel records and regular personnel audit as a rightsizing technique on efficiency in the public sector organizations.

2]       To  determine   the  impact  of  human  resource   planning   as   a rightsizing    technique    on   efficiency    in    the    public    sector organizations.

3]       To ascertain the impact of employee training and development as a rightsizing technique on efficiency.

4]       To  evaluate  the  impact  of  employee  retention  strategies  as  a rightsizing    technique    on   efficiency    in    the    public    sector organizations.

5]       To  determine  the  impact  of  regular  employee  evaluation  as  a rightsizing    technique    on   efficiency    in    the    public    sector organizations.

1.4      Research Questions

1.        Does the maintenance of accurate personnel records and  regular personnel  audit  as a  rightsizing  technique  have  any  impact  on efficiency of your organization?

2.        Does human resource planning as a rightsizing technique have any impact on efficiency of your organization?

3.        Does   employee   training   and   development   as   a   rightsizing technique have any impact on efficiency of your organization?

4.        Does employee retention strategy have any impact on efficiency of your organization?

5.        Does regular employee evaluation as a rightsizing technique have any impact on efficiency of your organization?

1.5      Research Hypotheses

The following  research hypotheses  are hereby formulated  to guide  the study.

H1:      The  maintenance   of  accurate  personnel   records  and   regular personnel audit as a rightsizing technique has a significant impact on efficiency of your organization.

H2:      Human  resource   planning   as  a  rightsizing   technique   has   a significant impact on efficiency of your organization.

H3:      Employee training and development as a rightsizing technique has a significant impact on efficiency of your organization.

H4:      Employee  retention  strategies  as  a  rightsizing  technique  has  a significant impact on efficiency of your organisation.

H5:      Regular  employee  evaluation  as  a  rightsizing  technique  has  a significant impact on efficiency of your organization.

1.6      Significance of the Study

The findings and recommendations of this study will be beneficial to so many stakeholders in the public sector.  The significance of the study can therefore be summarized as follows:

1.        The  Administrators  of  Ministries,  Departments  and   Agencies

(MDAs) and Parastatals will benefit from the study because it will enable them:

         Determine the optimal staff requirement and maintain proper personnel record to eliminate “ghost workers” syndrome.

         Persistently review their organizational structure to determine appropriate and manageable structure.

         Persistently   conduct   skills   gap   analysis   to   identify   the organization’s training needs, and

         Apply the  various rightsizing  techniques  to trim down  and streamline   their  workforce   to  enhance   performance  and conveniently adapt to changes occasioned by globalization.

2.        The Government  will benefit from the study because it will  be better   informed   on  the   maintenance   of   only   organizations, structures and personnel that are “right” and  actually needed for the efficient  execution  of its polices  and  implementation  of its programmes;   streamline   organizations   with   overlapping   and duplicating  functions  to  eliminate  redundancy  and  make  them productive;  maintain optimal and  vibrant workforce that are not only  qualified   but  skilled   to   minimize   waste   and   enhance efficiency..

3.        The employees will benefit from the study because it will enhance their skills through proper training and development; and deserved promotions and rewards through recognition of their performance and also benefit  from appropriate  retention  packages/perquisites provided by the organizations to encourage and retain them.

4.        The students  of public and business  administration  will  benefit from the study because it will enable them better understand the concept of rightsizing and the consequences of not doing so and

how  it  could  be  used  to  maintain  optimal  workforce  without necessarily having to downsize,  lay-off or retrench as  is widely practiced today.

5.        The  knowledge  generated  by  the  study  will  be  beneficial  to researchers because it will provide information or secondary data that will enrich their future research endeavours  in the  field of administration.   This will enable  them come out with  authentic positions on their findings.  Their recommendations will assist in the efficient administration of the public sector institutions.

6.        The general public will benefit from the study because efficiency in service delivery in the public sector translates into delivery of democracy dividends and improved infrastructures – uninterrupted power (electricity)  supply,,  improved  standard of education and healthcare  services,   maintenance  of  roads/bridges  and  timely payment of terminal benefits (Pensions and Gratuity), etc.

1.7      Scope of the Study

The study focuses on rightsizing as a technique for achieving efficiency in the public sector organizations. The concept of rightsizing and various rightsizing techniques (maintenance of accurate personnel records in regular personnel audit, human   resource   planning,   employee   training   and   development,   employee retention strategies and regular employee evaluation) and their respective impact on efficiency of the public sector organization shall be discussed.

The study is undertaking in Enugu, Enugu State and three public  sector organizations   namely   Power   Holding   Company   of  Nigeria   (PHCN)   now Electricity Company of Nigeria (ECN),  Federal Radio  Corporation  of Nigeria (FRCN) and Nigerian Television Authority (NTA) are used as population sample.

1.8      Limitation of the Study

The  study  did  not  go  without  any challenge.    The  major  limitations encountered in the course of carrying out the study were as follows:

1]  Existing Literature on Rightsizing is relatively scarce.  Consequently, the search for relevant materials needed  for the  research work was somehow difficult.

2]     Attitudes  of  the  Respondents:  Some  of  the  respondents  contacted were either afraid to volunteer information or  indifferent.  This was revealed  in  their  persistent  demand  for  the  full  identity  of  the researcher and actual purpose of the study.

1.9      Brief Historical Perspective of Nigeria

Nigeria is a geographical entity or expression located in West Africa.  It is bounded in the North by Chad and Niger Republics, on the East by the Cameroun Republic, West by Benin Republic and the South by the Atlantic Ocean.

It comprises of thirty-six states including the Federal Capital Territory – Abuja.  Apart from the states, the country is further divided into six geo-political zones for administrative convenience.   These are North-Eastern, North-Western, North-Central, South-South and the South-Eastern geo-political zones.

Nigeria is said to have a population of about 160 million people.   It  is made up of many ethnic groups with the Hausa, Ibo and Yoruba being the major group.  The predominant religion practiced in Nigeria are Christianity and Islam. Nigeria presently is under a democratic rule.

The area where the study is undertaken  is Enugu, Enugu State.  Enugu State is in the South-East geo-political zone.  The sampled organizations are all representative of public sector organizations and are all located in Enugu.

1.10     Historical Background of the Organizations under Study

          Power Holding Company of Nigeria PLC (PHCN)

The Power Holding Company of Nigeria (PHCN) formerly the National Electric Power Authority (NEPA) is an organization governing the use of electricity  in  Nigeria.    It  produces  and  distributes  power  through  its subsidiaries.

The history of electricity development in Nigeria dates back to the end of

the 19th  Century, when the first generating power plant was installed  in the city of Lagos precisely in 1898.  Between 1989 and 1950, electricity undertakings were scattered all over the towns.  Some of the undertakings were Federal Government bodies under Public Works Department, some by the  Native  Authorities  and  others  by the  Municipal  Authorities  –

Electricity  Corporation   of  Nigeria  (ECN).     By  1950,  the   colonial government passed ECN Ordinance No. 15 of 1950 to integrate electric power  development  in the country to  make  it  effective.  By 1970,  the Military    Government     appointed     a     Canadian     Consultant     firm “SHOWMENT LIMITED” to look into the technical details of the merger between  Niger  Dam  Authority  (NDA)  and  Electricity  Corporation  of Nigeria  (ECN).   The report  was submitted  and by Decree No. 24, the ECN  and  NDA  were  merged  to  become  the  National  Electric  Power

Authority (NEPA) with effect from 1st April, 1972.  The actual merger did

not  take  place  until  6th   January,  1973,  when  the  first  ever  General Manager  was appointed.   The statutory function of the  Authority is to develop and maintain efficient co-ordination and  economical system of electricity supply throughout the Federation.  From 1989, NEPA gained a new status – Quasi commercialization.  By this, NEPA was granted partial autonomy and by implication, it is to feed itself.

Its major source of power is through Hydro Plant located at Kainji Lake at Jebba in Niger State.  It has many thermal plants.  The supply is heavily regulated by the volume of water at the middle course of River Niger in Jebba.  Presently, the total generating capacity of the six (6) major power stations is about 5,000 mega atts.  This is grossly inadequate to meet the nation’s power needs.   Effort is being made to  pursue the completion of the various independent  Power  Plants  scattered  all over  the country to ensure adequate and reliable power supply to all parts of the country.

In 2005, the name was changed from NEPA to Power Holding Company of Nigeria (PHCN) and is headquartered in Transformer House, Maitama, Abuja, Nigeria.  As PHCN, it has eleven (11) major regional operational areas with many sub-zones under each operational  area.   Each Regional Area is headed by a Regional Manager, while each Zone is headed by a Zonal Manager.

For several  years,  despite consistent  perceived  cash investment  by  the Federal  Government,  power  outages  have  been  the  standard  for  the Nigerian populace and the bane of our industrial development.  Generally, the tariff has been criticized  as being too low compared  to  the cost of generating  power.    The  Federal  Government  of  Nigeria  increased  the

tariff with effect from 1st  July, 2012, to attract foreign investors into the electricity  sector.     The  sector  is  presently  undergoing  very  serious reforms.  The staff strength of the Corporation’s Enugu Office is 812.

          Federal Radio Corporation of Nigeria (FRCN)

Federal Radio Corporation  of Nigeria (FRCN) is the umbrella body of Radio broadcasting in Nigeria.   It was established  in 1931 by the  then Governor  of  Nigeria,  Donald  Cameron.    Between  1931  and  1948,  it operated in Lagos alone.  After the creation of the Regional Governments by Lord  John  Macpherson  in  1951,  the  agitation  for  the  creation  of Regional Corporation came on.  By Oliver Lyttleton Constitution of 1954, the  Regional  Premiers  each  established  its  regional  branch  of  Radio Nigeria   called   Nigerian   Broadcasting   Corporation   (NBC).     It  was commercialized   in  1987   and   changed   its  name   to  Federal   Radio Corporation  of  Nigeria  (FRCN).    It  has  branches  at  Enugu,  Kaduna, Ibadan and Lagos.  In 1991, it opened more branches under the regional coverage areas.   Recently in 2008, it opened new branches at Abakaliki, Port-Harcourt,   Kano,   Yola,   Maiduguri,   Damaturu,   Bauchi,   Sokoto, Katsina, Birnin Kebbi, Minna, Makurdi, Jalingo, Jos, Lokoja,  Umuahia, Imo, Awka,  Asaba, Oshogbo,  Ado-Ekiti,  Ilorin, Abeokuta,  Benin City, Uyo,  Yenagoa  and  Calabar.    Commercialization  of  the  broadcasting institution means that it is partly funded by the Federal Government and partly through internally generated revenue from its operations.

In 1995,  it  licensed  private  Radio  Broadcasting  which  is  given  lower frequency coverage in the Medium Wave Band.  Voice of Nigeria (VON) is the external arm of Federal Radio Corporation of Nigeria and reaches out to listeners externally for the entire country.

The  Federal  Radio  Corporation  of  Nigeria  is  headed  by  a  Director

General; while the various Zonal Offices are headed by Zonal Directors. The Enugu Office has a staff strength of two hundred and sixty one (261). It  has  the  statutory  function  of  creating  general  awareness  through broadcasting programmes.

          Nigerian Television Authority (NTA)

It was established in 1931 by Donald Cameron.   It was at the  inception highly restricted to Lagos Island then occupied by the colonial masters.  It was in 1954 that the Regional Premiers made effort to establish Regional Television Stations.  Even at that, only Western Region did that in 1957, which actually commenced operation in 1959.  Eastern Region followed in

1960 with the Northern Region in 1964.

In 1977, it nationalized  its services with branches in major cities: Aba, Sokoto, Kano, Maiduguri, Yola, Jos, Zaria, Abeokuta, Ilorin, Benin City, Port-Harcourt and Calabar.  With the creation of States, each State capital is  entitled  to  have  one  branch  of  NTA.    The  services  of  Nigerian Television Authority (NTA) are fully commercialized.

It is headed  by a Director  General,  while  the Zones  and  Stations  are headed by Zonal Directors and Managers respectively.  The staff strength of its Enugu Office is one hundred and two (102).

1.11     Definition of Relevant Terms

*          Rightsizing:

The process through which organizations determine and maintain a  level  of  employment  “right”  for     its  requirement,  or  the continuous and pro-active  assessment of  mission – critical work and its staffing requirements (Casio, 2003 and Champy, 1997).

*         Public Sector

The part of the economy of a country that is owned or directly controlled by the government (A. Adebayo, 2001).

*         Private Sector

The part of the economy of a country that is not under the direct control of the government (A. Adebayo, 2001).

*         Over staffing

A  situation  where  existing  workforce  in  an  organization  far exceeds   the   required   or   optimal   number   of   staff   for   the organization (Casio, 2003).

*         Redundancy

This is a state of being superfluous and unnecessary or a situation whereby  services  of  workers  are  no  longer   needed   for  any available job in an organization.  (Duru, E.J.C., Ikejiani-Clark, M. and Mbat D.O., 2001).

*         Efficiency

This refers to a situation of optimal productivity at minimal cost or achievement of maximum work with minimum input of energy or resources (A. Adebayo, 2001).

*         Effectiveness

This refers to the achievement of some policy goal if possible at minimum cost but without any doubt successfully.  Or the ability to  achieve  a  set  goal  irrespective  of  the  cost  involved.    (A. Adebayo, 2001).

*         Job Evaluation

This  is  concerned  with  personnel  performance  appraisal  (Etuk, E.J., 1991).

*         Job Specification

This refers to a situation were the qualifications, skill, experience or expertise needed to perform a job is stated and clearly specified (Etuk, E.J., 1991).

*         Recruitment

The  process   of  locating,   identifying,   and  attracting   capable applicants.

*         Selection

The process of screening job applicants to ensure that the  most appropriate candidates are hired.

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