The Effects of Centrally Managed Wages and Salaries on the Performance of Employees’ of Tamale...

AFRICA DEVELOPMENT AND RESOURCES RESEARCH INSTITUTE (ADRRI) JOURNAL

ADRRI JOURNAL (www.adrri.org)

pISSN: 2343-6662 ISSN-L: 2343-6662 VOL. 10, No.10 (2), July, 2014



pISSN: 2343-6662 ISSN-L: 2343-6662 VOL. 10, No.10(2), July, 2014

The Effects of Centrally Managed Wages and Salaries on the Performance of

Employees’ of Tamale Teaching Hospital.

Adjimani N. Tetteh Kofi1 Abdul-Razak Abubakari2* and Leslie Nii Otu Vanderpuije3

1Tamale Teaching Hospital, - Northern Region, Ghana. Email: [email protected]

2Tamale Polytechnic, Northern Region, Ghana. Email: [email protected]

3Ghana Health Service, Tamale – Northern Region, Ghana. Email: [email protected]

2*Correspondence: [email protected]

Received: 1st July, 2014 Revised: 29th July, 2014 Published Online: 30th July, 2014

URL: http://www.journals.adrri.org/

[Cite as: Kofi, A. N. T., Abubakari, A. A. and Vanderpuije, L. N.O. (2014). The Effects of Centrally

Managed Wages and Salaries on the Performance of Employees’ of Tamale Teaching Hospital. Africa

Development and Resources Research Institute Journal, Ghana: Vol. 10, No. 10(2).]

Abstract

The objective of this study was to evaluate the effects of centrally managed wages and salaries on

the performance of employees of the health sector. The study used Tamale Teaching hospital as a

case study. The research design adopted for this study was a descriptive cross-sectional study.

Likert type questionnaire was developed based on the objectives of the study and administered

to staff of Tamale Teaching Hospital. A convenient sampling method was used to select

respondents. It was found that centrally managed wages and salaries influenced the productivity

of employees. Generally, a significant number of respondents agreed that centrally managed

wages and salaries influence the productivity of staff. Most respondents were of the view that

decentralization of wages and salaries administration can be done but not completely and be

linked to the central system and further suggested that ICT can be helpful to link the

decentralized organisation to the centralized system. The study also recommended that the

capacity of the various Departments and Budget Management Centres need to be built to enable

them have some level of control to ensure that processing of wages and salaries can be

expedited. To ensure performance is maximized, there is the need to also understand other

factors that influence the employees’ performance apart from management of wages and salaries

centrally. This way, effectiveness is brought in to all public sector management.

Key word: wages, salaries, centrally, management, performance




1

INTRODUCTION

In the wake of the severe economic crises of recent years, many developing countries

have begun to confront the difficult task of making their public sectors more productive.

The need to reform public pay and employment policies has come to be seen as an

important element in meeting this challenge (Nunberg, 1989).According to Dorotinsky

and Manning (2009) appropriate public sector remuneration policies are key for

performance. They can motivate staff - to a limited extent by rewarding performance

but more generally by eliminating inequities and avoiding frequent and sudden

changes in pay. They can also assist in retaining competent staff – one of the most

critical drivers of public sector performance.

Salary administration is centralized and has not been linked with actual performance of

workers. At the end of the month, workers all over the country on the same grade

receive the same salary irrespective of their geographical location, workload, and

number of days they actually worked.

In the health sector, the level of health care provision one finds himself has nothing to

do with the salary the health personnel receive. A Medical Officer in a Teaching

Hospital receives the same amount of salary that a Medical Officer in District Hospital

receives. These issues are perceived by the employees at the various levels of care as

disincentive and hence affecting the redistribution of the “critical staff” such as Medical

Officers, Pharmacists Nurses, etc. to those at higher levels of care. This concern calls for

a research into the centrally managed wages and salaries and how it affects the

performance of health workers.

Wages and salaries management is the bane of several corporate bodies, especially

public sector entities. The worrying concern is the poor appraisal of performance as a

basis for rewarding employees commensurately. In all public sector departments and

agencies, wages and salaries of employees are centrally processed. There is usually a

time lag between the public sector agencies’ staff management appraisal information

and the delivery of salaries and wages to workers at the central level. This lag has

serious implications on: public sector wage bill; the attitudes of employees towards

work; performance of employees on the job; related disciplinary measures that need to

be enforced; as well as the motivation to work.

With the Public sector wage bill almost 61% of total revenue mobilised in 2012, it calls

for concern on the need to evaluate centrally managed wages and salaries and its effects

on employees’ performance at the public sector level. It is against this backdrop that this

research is conducted to assess the effects of centrally managed wages and salaries on

employees’ performance at the Tamale Teaching Hospital.

The study sought to achieve the general objective of assessing the effects of centrally

managed wages and salaries on the performance of employees of Tamale Teaching




1

Hospital (TTH). To realise the general objective, the following specific objectives were

studied

i. To assess staff perception of centrally managed wages and salaries at TTH.

ii. To determine the effects of centrally managed wages and salaries on the

performance of staff of TTH

To realise the research objectives above, the following research questions are studied

i. What is TTH staffs’ perception of centrally managed wages and salaries?

ii. What are the effects of centrally managed wages and salaries on staff

performance at TTH?

Findings from this study are expected to help the entire Ministry of Health and the fair

wages and salaries commission ensure that public service pay is linked to productivity

and operationalised to provide the needed stimulus for enhanced performance and

service delivery. The results will stimulate thought provoking debate as to whether

centralized management of wages and salaries are adequately enhancing performance

of employees. The findings will also help the Tamale Teaching hospital to develop local

policies and programmes that address the challenges identified by the study. Training

programmes will also be organized based on the findings of this research to equip

Managers of Tamale Teaching Hospital with the requisite knowledge and skills institute

measures at their various directorate and BMC levels to improve the employee

performance. The results of this study will inform further research into centralized

managed wages and salaries,

This study focused on the effects that a centralized pay management system has on the

performance of employees. The study covered the challenges that are associated with

performance of employees of Tamale Teaching Hospital. The study was limited to the

staff of Tamale Teaching Hospital because the researcher works at the Tamale Teaching

Hospital and in addition, Tamale Teaching Hospital is one of the major Teaching

Hospitals in the country and its undergoing a lot of restructuring including building of

human resource base which involves employing more people whose wages and salaries

has to be processed in Accra and improvement in the infrastructure of the Hospital. The

study also explored possibilities of enhancing employees’ remuneration management to

ensure improvement in the performance of the employees.

LITERATURE REVIEW

Employee reward is all of the monetary, non-monetary and psychological payments

that an organisation provides to its employee in exchange for the work they perform.

The overall aim of employee reward, according to Armstrong (2006), is to support the

attainment of the organisation’s strategic and short-term objectives by helping to ensure

that it has the skilled, competent, committed and well - motivated workforce. An aspect

of reward can be a fixed salary or wage that constitutes the rate for a job. It may be

varied according to the grade of the job or, for manual workers, the level of skill




2

required. Wages and Salaries are influenced by internal and external relativities. The

internal relativities may be measured by some form of job evaluation. External

relativities are assessed by tracking market rates. Alternatively, levels of pay may be

agreed through collective bargaining with trade unions or by reaching individual

agreements.

Rising wage inequality has been the major empirical trend in labour economics in recent

decades (OECD, 2008, 2011). The strong increase in wage dispersion in the US and the

UK since the 1980s has affected the entire distribution (Katz &Autor, 1999; Autor et al.,

2008).In contrast, wage inequality in West Germany began to rise first at the top of the

distribution in the 1980s, and has only started to grow at the bottom since the 1990s

(Fitzenberger, 1999; Dustmann et al., 2009; Antonczyk et al., 2009). Recently, the growth

in wage dispersion has been dramatic with an increase of more than 10 log percentage

points at the 90-10-differential from 2001 to 2006 (see Antonczyk et al., 2010).Growing

wage inequality has been found to affect the top as well as the bottom of the wage

distribution which makes it an important component in the debate on poverty and the

low wage sector (ibid.).

Parallel to the trend of growing wage inequality, the incidence of pay for performance

has increased in many countries (Booth & Frank, 1999; Lemieux et al., 2009;

Pannenberg&Spiess, 2009). Still, Brown and Heywood (2002) conclude that there is no

general trend towards more performance pay. Nevertheless, the end of the last century

has been a time for large experiments (ibid.), which makes it interesting to study the

growing use of performance pay schemes. Why should the incidence increase at all?

Generally, there is a growing heterogeneity of firms which goes hand in hand with a

growing need for flexibility on the firm level (Card et al., 2012). This trend could for

example be driven by trade globalization or skill-biased technological change (SBTC).

Moreover SBTC, which changes the relative demand for skilled labor, translates into

changed relative returns to skills (Katz & Murphy, 1992; Juhn et al., 1993; Katz &Autor,

1999).

Lemieux et al. (2009) argued that pay for performance could serve as the channel by

which changed returns to skills are converted into actual wage changes and therefore be

growing (Heywood & Parent, 2009). It is costly and not always easy to monitor

individual work performance. The shirking model suggests that when the possibilities

of monitoring workers job performance are poor, firms may pay wages above the

market clearing level in order to elicit adequate effort from their workers. Wages above

the workers` opportunity cost create incentives for better job performance since

substandard performance may lead to loss of the wage premium. The private sector is

subject to product competition. The result of firms` production activity is easily

measured by the size of profits, and therefore the willingness to pay incentive wages is

high. If higher wages increase profit through productivity and it is easy to measure this

increase, the profit- maximizing firm will pay higher wages. The public sector on the

other hand is not usually subjected to productive competition. The activity result is

often impossible to measure in terms of profit and the results are usually evaluated




3

politically. This makes the output measure of public sector rather ambiguous.

Employers in the public sector have difficulty in identifying an eventual productivity

increase due to higher wages.

The rigidity of a centrally managed civil service, including the inflexibility in pay

structures, is a concern the world over (Kolehmainen-Aitken, 2004). The nature and

extent of a country's reform process dictates, however, whether decentralization is

accompanied by any attempt to change health workers' incorporation in the civil

service. Decentralization of powers over the health system thus may or may not be

accompanied by a corresponding decentralization of human resource management

responsibilities. Certainly, this results in maintaining incompetent staff leading

lowering of productivity standards that affect patient care.

Performance and staff motivation

Job performance is defined as the total expected value to the organization of the discrete

behavioural episodes that an individual carries out over a standard period of time.

(Motowidlo, Borman, &Schmit, 1997). According to Economic Research Institute (2003)

performance has to do with what the employee accomplishes and what actions or

behaviours go into creating the accomplishment. From this, performance criteria may

fall into three categories: inputs, activities and outcomes. Dyer and Reeves (1995) noted

that since employee performance is a function of both ability and motivation, it makes

sense to have practices aimed at enhancing both. Martinez and Martineau (2002)

pointed out that effective performance management is rare in public services in

developing countries, because its prerequisites (such as a living wage for health

workers, and the availability to them of drugs, equipment and transport) are often

missing. Marsden and French (1998), revealed that performance management combines

the processes of goal-setting, appraisal, and pay incentives for all their staff

individually.

The goals of performance management are: to improve the quality of management,

especially the process of goal setting; to motivate staff and release their full potential; to

help them focus on what is really important in their jobs; to achieve a higher level of job

satisfaction and recognition; and to lead to further improvement in the Revenues

performance. According to The Manager Vol. 10, the concept of using performance-

based payment to improve the impact of health services and the performance of the

institution providing the services is still new in many countries. No single model for

performance-based payment exists. The payment system must be designed and

implemented with consideration of the goals, capacities, and constraints of health

service providers.

Effect of Centrally Managed Wages and Salaries on Employee Performance

In many developing countries, decentralization has confused supervision responsibility,

diminished technical supervision capacity, and reduced the number of supervision

visits (Saide& Stewart 2001; Campos-Outcalt, Kewa, Thomason 1995). Part of this

confusion is the result of some health programs being decentralized, while others

remain central responsibilities. Even when all programs are decentralized, old program




4

allegiances of staff create tension and potential conflict between the supervisees and the

new local health manager.

Decentralization brings considerable new skill needs, particularly in management

competencies. Local managers' capacity to respond to these and other performance gaps

through training is, however, restricted. They lack funds to pay for such training, and

often have little or no capacity to plan and implement in-service training programs at

the local level Solter (1999).There is evidence that in a number of countries,

decentralization has compromised the ready availability of drugs, supplies and

transport that are essential for good staff performance and productivity (Newbrander,

Aitken, &Kolehmainen-Aitken,1991; Bach,2001). This has been the result of more

complex procurement systems and funding cuts to local health budgets.

Staff motivation has been affected through rapid change, and the perception of health

workers that their compensation levels and working conditions have been negatively

affected by decentralization. Bach (2001) emphasizes that managers have paid

insufficient attention to addressing such issues as working hours, working conditions

and career structures that can have a significant long-term effect on staff performance

and morale.

Akintoye (2000) asserts that money remains the most significant motivational strategy.

As far back as 1911, Frederick Taylor and his scientific management associates

described money as the most important factor in motivating the industrial workers to

achieve greater productivity. Taylor advocated the establishment of incentive wage

systems as a means of stimulating workers to higher performance, commitment, and

eventually satisfaction. Money possesses significant motivating power in as much as it

symbolizes intangible goals like security, power, prestige, and a feeling of

accomplishment and success. Katz, in Sinclair, et al. (2005) demonstrates the

motivational power of money through the process of job choice. He explains that money

has the power to attract, retain, and motivate individuals towards higher performance.

For instance, if a librarian or information professional has another job offer which has

identical job characteristics with his current job, but greater financial reward, that

worker would in all probability be motivated to accept the new job offer.

Banjoko (1996) states that many managers use money to reward or punish workers. This

is done through the process of rewarding employees for higher productivity by

instilling fear of loss of job (e.g., premature retirement due to poor performance). The

desire to be promoted and earn enhanced pay may also motivate employees. It is

imperative therefore, that role of money as a motivator, will lose its efficacy if it is

managed centrally.




5

METHODOLOGY

This study assessed the effects of centrally managed wages and salaries on the

performance of employees of Tamale Teaching Hospital. This chapter therefore outlines

that methodological procedures employed in achieving the objective of the study.

The research design adopted for this study was descriptive cross-sectional.The choice of

this method was to help describe the effects of wages and salaries on performance of

staff of TTH. The cross-sectional procedure was preferred to enable the researcher to

determine the effect during a particular point in time. It also involved the collection of

information through structured questionnaires. This enabled the researcher to assess the

respondents view on how their performance is influenced by centrally managed wages

and salaries. All respondents completed the survey individually and confidentially – no

names also appeared on any of the questionnaire so as to encourage the respondents to

be at ease to fill the questionnaire accurately. Secondary data on the Hospitals

performance was also collected and analysed to evaluate the effects of centrally

managed wages and salaries on employees` performance in the Tamale Teaching

Hospital

This study was carried out in Tamale Teaching Hospital. The Tamale Teaching Hospital

is located in a catchment area which has a population of approximately 4.2million.

TTH is one of Ghana`s four teaching hospitals with the mandate to provide advanced

clinical services to the northern regions including part of northern Brong Ahafo. TTH is

the major referral Centre for the three northern regions and the upper parts of Brong

Ahafo region, about half the land mass of Ghana. It also provides teaching facilities to

the University for Development Studies, (UDS), and other undergraduate and

postgraduate medical professionals as well as undertakes research into health issues for

the purpose of improving the conditions of peoples’ health. It has the following

mandates: Provide comprehensive and advance tertiary healthcare; Medical education

at undergraduate and post graduate levels; and Health research.

The vision of the hospital is to be the centre of excellent for quality tertiary health care,

medical education and research. TTH has a mission to provide quality and affordable

tertiary health care; delivered by well- trained, highly motivated and customer- friendly

professional health staff. This vision and mission can be effectively realised if wages and

salaries issues of staff are well managed among other factors.

The Target population chosen for this study was the employees of Tamale Teaching

Hospital.

In order to select a representative sample for the study, a convenient sampling method

was used to select the respondents. This was used because of the complex nature of the

Hospital system and also due to the fact that staff run shifts and there is the need to

cover all the shifts and also all the health professionals that are working in the Hospital.




6

In all a total of 150 staff were selected from both the senior and junior categories from all

the major departments of the Hospital. The sample size of 150 was chosen intuitively.

Despite the employee population of the Tamale Teaching Hospital which stood at 1,700

(TTH Annual report, 2012), the researchers intuitively resorted to sampling 150

employees which were carefully chosen to reflect the composition of the various

practice groups within the hospital. This was done considering the limited time

allocated for the study, and also, for an academic study of this nature, the researcher is

convinced that a sample size of 150 has the potential to reflect the needed information

or response for the study.

Questionnaires were developed for staff of the Hospital to enable the researcher to

solicit information on how the centrally managed wages and salary influence

performance of employees and the challenges it posed to Managers of the Hospital.

Generally, Likert scale type of questions was used to assess employees’ perception on

the effects of centrally managed wages and salaries on the employees’ performance in

TTH.

In effect, Quantitative data with respect to the specific objectives were collected using a

self-administered questionnaires.

Pre-Testing

The study designed an instrument for data collection which was pre-tested at the

Tamale West Hospital to ascertain the feasibility of the instrument to obtain the needed

data before administering it at the Tamale Teaching Hospital. The essence however was

to ascertain any unforeseen challenges that could have been associated with the design

and administration of the instrument. The pretesting unfolded data collection

challenges such as: the unavailability some of the respondents (for instance, blood

organisers, Physiotherapist amongst others); difficulty of retrieving administered

questionnaires; apathy on the part of the respondents; and other technical errors in the

design of the questionnaire.

Data Processing and Analysis

Questionnaires collected from the field were coded and entered in the statistical

package for social sciences (SPSS) software (version 16). Data cleaning was done to

ensure data quality before analysis was done. The Data was summarized using

descriptive statistics, in the form of frequency tables and charts.

Ethical Issues

In order to collect a reliable data, an introduction letter was sent to the Chief Executive

Officer of the Hospital for approval to conduct the Research in the Tamale Teaching

Hospital. An introduction letter was issued by the Research Unit of the Hospital

introducing the Researcher to all the relevant Departments. A verbal consent was also

sought from the staff selected for the study.




7

RESULTS AND DISCUSSIONS

The findings of the study were intended to address the objectives set in the chapter one

of this research work. Primary data was collected through questionnaire administered

to staff of Tamale Teaching Hospital.

Sex Distribution of Respondents

Table 1 revealed that out of the 150 respondents, 55.3% were males and 39.3% were

females whilst 5.3% did not specify their sex. It can be held that, there was male

dominance among the respondents of the study, that is to say, there were more male

staffs than female staffs in the Tamale Teaching Hospital.

Table 1: Sex of Respondents

Sex Frequency Percentage

Male 83 55.3

Female 59 39.3

Non Response 8 5.3

Total 150 100.0

Source: Field Data, October 2013

Educational background of Respondents

Table 2 summarized the educational background of the respondents. Out of the 150

respondents, 4% respondents had second degree, 38% had first degree and 36.7% had

Diploma/Higher National Diploma. Also, 6% had A-level or Diploma in Business

Studies and O level/SSSCE. Furthermore, 4% had a Middle School Leaving Certificate

/Basic Education Certificate Examination.

This means that, majority of the respondents had a first degree or Higher national

diploma in their various fields of study.

Table 2: Educational Level of Respondents

Educational level Frequency Percent

2nd Degree 6 4

1st Degree 57 38

Diploma/HND 55 36.7

A level/DBS 9 6

O level/SSSCE 9 6

MSLC/BECE 6 4

Non Response 8 5.3

Total 150 100





8

Distribution of Job Category of Respondents

Table 3 indicates that majority of the respondents (i.e. 26.7%) were Nurses, followed by

Accounts staff who constituted 10.7% of the total respondents. Health Services

Administrators and Administrative Managers represented 10% of the respondents.

However, 12.7% of respondents did not specify their job categories. Despite the small

size of the sample studied, these findings represents the proportions of the various

practice groups in the hospital. It revealed, that the largest employee population of the

hospital is the Nursing practice, followed by the Accounting and Finance related unit

and then the Administrators in that order.

Table 3: Job Category of Respondents

Job category of respondents Frequency Percentage

Nurse 40 26.7

Auditor/Finance/Accountant/Accounts Officer 16 10.7

HSA/Administrative Manager 15 10.0

Executive Officer 13 8.7

Estate/Artisans/Equipment Managers 8 5.3

Supply Officer/Store Keeper 8 5.3

HIO/Records Officer 6 4.0

Physiotherapist 5 3.3

BMS 4 2.7

Blood Organizer 3 2.0

Pharmacist 3 2.0

Research Officer/Health Planner 3 2.0

Medical Officer 2 1.3

Radiographer 2 1.3

Administrative Assistants/Stenographer 1 0.7

Health Assistant 1 0.7

HRM 1 0.7

Non Response 19 12.7

Total 150 100.0


Distribution of Respondents

Fig 1 revealed that, out of the 150 respondents, the mean was 29.9 years with standard

deviation of 6.20 and skewness of 1.88. The mode and the median were each 29 years.

The Minimum age of the respondents was 22 years whilst the maximum age was 56

years. There was however a 4.7% non-response from respondents who could not give

their ages.




9

0

5

10

15

20

25

30

35

40

45

17.2 20 22.8 25.6 28.4 31.2 34 36.8 39.6 42.4 45.2 48 50.8 53.6 56.4 59.2 62

Fre

qu

en

cy

Age of Respondents

LSL 20.00 USL 58.00 Mean 29.99 Median 29.00

Mode 29.00 n 143

Skewness 1.88

Stdev 6.20

Min 22.00

Max 56.00

Figure 1: Age Distribution of Respondents


Respondents’ Length of Work Experience with TTH

Regarding how long respondents were employed in TTH, Fig 2 revealed the mean

number of years was 3.1 years with a standard deviation of 4.5 and positively skewed

with a coefficient of 4.7. The median year and modal year respondents have been

employed were 2 years and less than a year respectively.




10

0

5

10

15

20

25

30

35

40

1. 3. 5. 7. 9. 11. 13. 15. 17. 19. 21. 23. 25. 27. 29. 31. 33. 35. 37.

Fre

qu

en

cy

# of years employeed in TTH

Distribution of number of years employed

Mean 3. Median 2.0 Mode 0.0

n 131

Skewnes 4.7

Stdev 4.5

Min 0.0

Max 36.

Figure 2: Respondents’ Length of Work Experience with TTH


Staff Perception on Centrally Managed Wages and Salaries

Most respondents, (66.7%) disagreed that centrally managed wages and salaries make

employees to be late to work whilst 22.7% agreed that because wages and salaries are

centrally managed, it makes employees to be late to work and 10.6% were neutral about

the statement. Concerning absenteeism, only 20.7% agreed that centrally managed

wages and salaries caused employees to absent themselves from work whilst 71.3%

disagreed that frequent absenteeism to work is as a result of wages and salaries being

managed centrally.

This result revealed that lateness and absenteeism influencing performance does not

really come as a result of the fact that the wages and salaries were centrally managed.

Nel et al. (2001) linked performance to absenteeism by giving meaning to the levels of

motivation as: the minimum level–doing less than is required; expected level–doing just

what is required; and maximum level – doing more than is required. When a person is

functioning at the first level or the third level as denoted above, this may be a cause for

absenteeism. Motivation when not properly managed could cause employees to act in




11

an unacceptable behaviour. The performance management system when not

implemented or not properly managed could be a great cause for high absenteeism rate.

Therefore the perception that central management of wages and salaries may result in

low performance of staff may not be true. As explained by Nel et al (2001), other factors

may motivate staff to perform. In like manner, 19.3% agreed that centrally managed

wages and salaries make employees not to complete all the assigned tasks before they

close from work whilst 64.6% disagreed to the statement that centrally managed wages

and salaries makes employees not to complete all the assigned tasks before they close

from work whilst 10.7% were neutral.

This result supports task completion literatures (Garland and Colon, 1993; Boehne and

Paese, 2000; Humphrey, Moon, Conlon, Hofmann, 2004) which shows that people have

the tendency to complete a task even if it is economically unwise to do so. Garland and

Colon (1993) and Boehne and Paese (2000) found that this tendency is strongest when

90% of the task is completed compared to 10% or 50% completion of a task. Meij (2004)

found an effect of task completion on cognitive lockup. People tend to complete a task

when they are almost finished (high task completion) even when a more urgent task is

triggered. This therefore implied that whether wages and salaries are decentralized to

the Tamale Teaching Hospital or centrally managed, employees of Tamale Teaching

Hospital may complete task given to them before they close.

On attitudes that help to improve productivity, 17.3% of the respondents agreed that

centrally managed wages and salaries causes employees not to show good attitude at

work but 67.3% disagreed and 8% were neutral. It therefore behoves that where wages

and salaries are managed does not really bother staff of Tamale Teaching hospital.

Respondents were of the view that central management of wages and salary actually

does not affect their work attitude. Sonnentag (2002) supports this result when he

revealed that, perceptions of inequity and unfairness often bear (among others) upon

the relationship between effort and compensation, and are thus affecting people’s work

attitudes, degree of satisfaction, commitment, organization citizenship, and the like.

These in turn may lead to (negative) performance effects. Performance effects are also

likely as an individual tries to restore equity or fairness, for instance, through increasing

or decreasing the effort spent in the task. Violations of the perceived contributions—

inducements contract (or, in terms of Rousseau, 1989: the psychological contract) do not

necessarily imply an impairment of the organization’s effectiveness (Rousseau &Ho,

2000).

Furthermore, 17.3% agreed that centrally managed wages and salaries do not make

employees to be honest with their employer and co-workers whilst 72.7% disagreed and

8.7% were neutral.

Again, 23.3% of the respondents agreed that since wages and salaries are centrally

managed, it encourages staff not to contribute to the correction/solving of what they see

as wrong at work or in their departments but 68% disagreed and 8.7% were neutral.

Also, with regards to reporting dishonest behaviour at the work place, 25.3% agreed

that centrally managed wages and salaries encourages staff not to report any dishonest




12

behaviour they witness from staff and clients but 61.3% disagreed whilst 10.7% were

neutral. Concerning the acceptance of extra work from their supervisors, 25.4% of the

respondents agreed that since wages and salaries are centrally managed, it encourages

staff not to accept extra work from their supervisors but 64.7% disagreed whilst 9.3%

were neutral.

Concerning doing the job well, 17.4% of the respondents agreed that since wages and

salaries are managed centrally, it encourages staff not to do the jobs well to the extent

that managers have to do it themselves or give it to others to do whilst 72% disagreed

and 8% neutral. In addition, 68.7% of the respondents disagreed that when wages and

salaries are centrally managed it encourages staff not to show real desire to work whilst

22% agreed and 8% were neutral. Also, 73.4% disagreed that centrally managed wages

and salaries contributes to staff not treating colleagues/Clients with respect whilst 18%

agreed to the statement and 8% were neutral. On the issue of staff not showing any

extra effort to improve performance or efficiencies on the job, 57.4% of the respondents

disagreed whilst 29.3% agreed and 12.7% were neutral.

Overall, regarding the perception of workers concerning centrally managed wages and

salaries affecting their productivity, Fig. 3 revealed that, 21.9% agreed variedly that

centrally managed wages and salaries influence the productivity of staff whilst 67.4%

variedly (slightly, moderately and strongly) disagreed that centrally managed wages

and salaries influence the productivity of employees whilst 9.1% were neutral as to

whether centrally managed wages and salaries affects the productivity of Employees in

Tamale Teaching Hospital.

As indicated by Saks (2006), organizations that wish to improve levels of employee

engagement can focus on increasing and strengthening employees’ perceptions of

support they receive from the organization. Many organizations seem to have forgotten

that perception begins at the onset of the employee-employer relationship with the

application process. The saying “you never get a second chance to make a first

impression” is extremely fitting. These first impressions serve as a reference point to the

employee in many ways. A fair application process should be the first touch-point for

each and every employee.

Additionally, an increasingly important level of perception for an organization to

monitor is the employees’ perception of diversity within the organization. This is true

for all employees regardless of their majority or minority status. While the composition

of an organization can affect an employees’ level of commitment, it is an employees’

“perception of fit” in terms of demographics and culture within their immediate

workgroup that affects the level of employee engagement.

In all 1.7% of the respondents did not respond to the questions used to assess the

perception of staff regarding the centrally managed wages and salaries and

productivity.




13

Table 4: Perception of Staff on Centrally Managed Wages and Salaries and its Effects on Staff Performance

Perception of staff of centrally managed

wages and Salaries on productivity

Moderately

Agree

Moderately

Disagree

Neutral Non-

Responses

Slightly

Agree

Slightly

Disagree

Strongly

Agree

Strongly

Disagree

To be late to work 7 (4.7%) 16 (10.7%) 16 (10.7%) 0 (0%) 17

(11.3%)

23 (15.3%) 10 (6.7%) 61 (40.7)

To frequently absent themselves from

work 12 (8.0%) 20 (13.3%) 9 (6%) 3 (2%) 13 (8.7%) 16 (10.7%) 6 (4%) 71 (47.3%)

Not to complete all the assigned tasks

before they close from work 14 (9.3%) 23 (15.3%) 16 (10.7%) 8 (5.3%) 11 (7.3%) 24 (16.0%) 4 (2.7%) 50 (33.3%)

Not to show good attitude at work 13 (8.7%) 24 (16.0%) 12 (8.0%) 4 (2.7%) 12(8%) 15 (10%) 8 (5.3%) 62 (41.3%)

Not to be honest with employer or co-

workers 6 (4%) 26 (17.3%) 13 (8.7%) 2 (1.3%) 14 (9.3%) 22 (14.7%) 6(4%) 61(40.7%)

Not to contribute to the correction/solving

of what they see as wrong at work or in

the Department

14 (9.3%) 15 (10%) 13 (8.7%) 0 (0%) 13 (8.7%) 23 (15.3%) 8 (5.3%) 64 (42.7%)

Not to report any dishonest behaviour

they witness from staff and clients 11 (7.3%) 24 (16.0%) 16 (10.7%) 4 (2.7%) 13 (8.7%) 14 (9.3%) 14 (9.3%) 54 (36%)

Not to accept extra work from their

supervisors

10

(6.7%)

19 (12.7%) 14 (9.3%) 1 (0.7%) 15 (10%) 20 (13.3%) 13 (8.7%) 58 (38.7%)

Not to do the jobs well to the extent that

the manager have to do it himself/herself

or give it to others to do

9 (6.0%) 25 (16.7%) 12 (8%) 4 (2.7%) 13 (8.7%) 20 (13.3%) 4 (2.7%) 63 (42%)

Not to show real desire to work 15 (10.0%) 27 (18%) 12 (8%) 2 (1.3%) 11 (7.3%) 18 (12%) 7 (4.7%) 58(38.7%)

Not treat staff/clients with respect 9 (6.0%) 18 (12.0%) 12 (8%) 1 (0.7%) 10(6.7%) 19(12.7%) 8 (5.3%) 73 (48.7%)

Not to show any extra effort to improve

performance or efficiencies on the job 11 (7.3%) 16 (10.7%) 19 (12.7%) 1 (0.7%) 14 (9.3%) 16 (10.7%) 19 (12.7%) 54 (36%)





14

6.7

4.0

2.7

5.3

4.0

5.3

9.3

8.7

2.7

4.7

5.3

12.7

5.9

4.7

8.0

9.3

8.7

4.0

9.3

7.3

6.7

6.0

10.0

6.0

7.3

7.3

11.3

8.7

7.3

8.0

9.3

8.7

8.7

10.0

8.7

7.3

6.7

9.3

8.7

10.7

6.0

10.7

8.0

8.7

8.7

10.7

9.3

8.0

8.0

8.0

12.7

9.1

15.3

10.7

16.0

10.0

14.7

15.3

9.3

13.3

13.3

12.0

12.7

10.7

12.8

10.7

13.3

15.3

16.0

17.3

10.0

16.0

12.7

16.7

18.0

12.0

10.7

14.1

40.7

47.3

33.3

41.3

40.7

42.7

36.0

38.7

42.0

38.7

48.7

36.0

40.5

0.0

2.0

5.3

2.7

1.3

0.0

2.7

0.7

2.7

1.3

0.7

0.7

1.7

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

To be late to work

To frequently absent themselves from work

Not to complete all the assigned tasks before they close from work

Not to show good attitude at work

Not to be honest with employer or coworkers

Not to contribute to the correction/solving of what they see as wrong at work…

Not to report any dishonest behaviour they witness from staff and clients

Not to acccept extra work from their supervisors

Not to do the jobs well to the extent that the manager have to do it…

Not to show real desire to work

Not treat staff/cliets with respect

Not to show any extra effort to improve performance or efficiencies on the job

Overall

Perception of Staff on effect of centrally managed Wages & Salaries on Productivity

Strongly Agree Moderately Agree Slightly Agree Neutral Slightly Disagree Moderately Disagree Strongly Disagree Non Response

Figure 3: Staff Perception on Centrally Managed Wages and Salaries and its Effects on Staff Performance

Source: Field Data, October, 2013




15

Effects of Centrally Managed Wages and Salaries on Staff Performance

Fig 4 revealed the level of agreement of respondents on the effect of centrally managed

wages and salaries on the performance of staff of TTH. On looking for extra work

elsewhere, 43.3% of the respondents disagreed that centrally managed wages and

salaries encourages staff to look for extra work elsewhere to do to supplement what

they currently earn whilst 40% agreed that because wages and salaries are managed

centrally, it encourages them to look elsewhere to supplement what they earn from their

regular employment and also 14.7 of the respondents were neutral.

This result may be linked to other studies such as William (1992), Wisniewski and

Kleine (1983) who revealed that many teachers hold multiple jobs to supplement

salaries and maintain a desired standard of living. Some teachers, however, enjoy

holding multiple jobs and might seek them out irrespective of financial needs or

incentives. According to Wisniewski and Kleine (1983) each calendar year, 59% of their

teachers received remuneration for second jobs located either inside or outside the

school setting. However, these studies did not reveal if the seeking of the extra work to

was due to the fact that wages and salaries are managed centrally or decentralized.

Furthermore, 40.7% disagreed that people they have the same qualification with but

working in different department/unit earns better than they do whilst 49.9% agreed that

due to central management of wages and salaries, their colleagues that they have the

same qualification with but working in different departments earn more than they do

whilst 7.3% were neutral. Again, 35.4% disagreed that because wages and salaries are

managed centrally it motivates them to work to achieve the objectives of their

organization but 48.1% agreed that centrally managed wages and salaries motivates

them to work to achieve the objectives of their organization whiles 16.7% were neutral.

Also, 52% of the respondents disagreed that centrally managed wages and salaries

makes staff to be unproductive since at the end of the month, their salaries or wages

will be paid whilst 34% agreed that centrally managed wages and salaries makes staff to

be unproductive since at the end of the month they may eventually receive their

salaries.

Overall, 42.8% of the respondents disagreed that centrally managed wages and salaries

influence their productivity or their performance whilst 43% agreed that centralization

of the management of wages and salaries has some effect on the productivity or

performance of staff whilst 12.8% were neutral about the assertion that centrally

managed wages and salaries affect the performance of staff.




16

20.0

22.7

12.7

24.0

19.8

11.3

7.3

8.7

15.3

10.7

12.0

10.7

14.0

12.7

12.3

14.7

7.3

16.7

12.7

12.8

14.0

15.3

16.7

8.7

13.7

7.3

17.3

8.7

10.0

10.8

18.7

17.3

22.7

15.3

18.5

2.0

2.0

0.0

1.3

1.3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Encourages you to look for extra workelsewhere to supplement what you earn

Makes people you have the same qualificationwith earn better than you do due to the fact…

Motivates you to work to achieve theobjectives of your Organization

Makes staff to be unproductive since at theend of the month, their salaries or wages…

Overall

Strongly Disagree Moderately Disagree Slightly Disagree Neutral

Slightly Agree Moderately Agree Strongly Agree Non Response

Figure 4: Effects of Centrally Managed Wages and Salaries on Staff Performance


Summary Major Findings

The study examined the effects of centrally managed wages and salaries on the

performance of staff of Tamale Teaching Hospital and key findings are presented in this

section. The following were the findings from the data analysis.

Staff Perception of Centrally Managed Wages and Salaries at TTH

The research revealed that 21.9% of respondents were of the opinion that centrally

managed wages and salaries affected their productivity. However 67.4% variedly

(slightly, moderately and strongly) disagreed that centrally managed wages and salaries

influenced their productivity. 9.1% were found to be neutral.

It was realised that 32.4% of the respondents agreed that centrally managed wages and

salaries resulted in managers and staff of TTH facing challenges of managerial

supervision for high performance. 54.9% however disagreed that centrally managed

wages and salaries resulted in challenges with managerial supervision for high

performance and 12.2% remained neutral.

From the study, it was it was found that 64.6% of the respondents disagreed that central

management of wages and salaries make staff not to complete all assigned task whilst

19.3% agreed. The research clearly show that 67.3% disagree that central management of

wages and salaries is responsible for attitude towards work whilst 17.3% agreed.

It was found that, 72.7% disagreed that central management of wages and salaries is the

cause of dishonesty among staff whilst 27.3% agreed that the central management of

wages and salaries is the result of staff dishonesty. Furthermore, 61.3% also disagreed

that due to the central management of wages and salaries, staff do not report dishonest




17

behaviour they witness but 25.3% agreed that they report these behaviours despite the

fact that wages and salaries are managed centrally.

Effects of Centrally Managed Wages and Salaries on Staff Performance at TTH

It is noted that 43.3% disagreed that central management of wages and salaries

encourages staff to look elsewhere and 40% agreed that it makes staff look elsewhere to

supplement their salary.

The research revealed that 40.7% disagree that the central management of wages and

salaries is the reason why people with same qualification but working in different

departments earn better wages or salaries than others whilst 49.9% agreed. It is also

realised that 48.1% of the respondents agreed that centrally managed wages and salaries

motivate to work and achieve the objectives of the organisation whilst 35.4% disagreed.

The research points out that 52% of the respondents disagreed that central management

of wages and salaries make staff to be unproductive since at the end of the month, the

wages and salaries are paid them but 34% agreed that central management of the wages

and salaries results in staff being unproductive.

Means of Enhancing the Administration of Wages and Salaries at TTH

Towards enhancing the management of employee wages and salaries in the Tamale

Teaching Hospital, the study found that, employees’ wages and salaries should be

decentralized to the directorate levels to reduce staff complaints. Further that, the

hospital has the capacity to process its employees’ salaries and wages and should be

given such authority.

CONCLUSIONS

Central management of wages and salaries, to some extent, influences performance of

organisations but majority of the respondents hold the perception that central

management of wages and salaries are not the major influencing factors of the

performance of Tamale Teaching Hospital. However, delay in the processing of salaries

may be due to the central management of wages and salaries. This affects productivity

of staff of TTH.

To adequately and promptly deal with processing, decentralization of wages and

salaries management will reduce the complaints by staff regarding the delay of wages

and salaries. Decentralization of wages and salaries administration can be done but not

completely and be linked to the central system and that a vital ICT link can be helpful to

aligning decentralized organisations to the centralized system. This will allow for

effective and efficient coordination of wages and salaries processing and management

in TTH.

RECOMMENDATIONS

The following recommendations were made based on the findings and conclusions.




18

Capacity of the various Departments and Budget Management Centres need to be built

to enable them have some level of control to ensure that processing of wages and

salaries can be expedited. This can be done by enhancing the management information

system of the various units of the TTH and linking them to the headquarters where

wages and salaries are finally approved for payment. This can be coupled with training

of the staff to be able to man the data base for effective wage and salary processing.

There is the need for further research to actually explore the real factors that influence

performance of the staff of TTH. This will help to establish the extent of contribution of

all factors including central management of wages and salaries is making to

performance of the Hospital. This will be a means of identifying wage related factors

and others that will be worked to ensure that all employees of TTH work to spur it to

realise its corporate mission.

There is the need to institute proper management enhancement systems at TTH. The

systems must ensure that members of staff at all levels achieve their performance

targets before they are rewarded. To do this effectively, it is recommended that a

computerized system of data collection can be introduced by the Controller and

Accountant General Department to monthly collect data on performance of employees

before payment of the next salary is paid. The success of this will hinge on a well-

resourced management information systems infrastructure and a cutting edge staff that

are imbued with best practices in terms of wages and salaries administration. This also

requires profound attitude change of employees and their supervisors.

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