HUMAN CAPITAL DEVELOPMENT AND ORGANIZATIONAL PERFORMANCE OF MANUFACTURING FIRMS IN PORT HARCOURT

HUMAN CAPITAL DEVELOPMENT AND ORGANIZATIONAL PERFORMANCE OF MANUFACTURING FIRMS IN PORT HARCOURT

This research proposal is aimed at examining the relationship between human capital development and organizational performance of manufacturing firms in Port Harcourt, Rivers State, Nigeria.

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CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

In the modern-day business environment, an organization faces a high level of competition. As such organizations must strive to get things right through appropriate strategies in managing their available resources. Manufacturing firms are thus implementing human capital development in their operations so as to ensure that their employees always perform their tasks right the first time and that their customers’ expectations are always met or exceeded after consumption of the firm’s products or services.

In the current global market, companies are composed of competitors, regardless of industry. To develop a competitive advantage, it is important that firms truly leverage the workforce as a competitive weapon.

Organizational performance rests on the efficient and effective performance of the workforce that makes up the organization. The efficient and effective performance of the workforce, in turn, rest on the richness of the knowledge, skills, and abilities possessed by the workforce. Capacity building and development in most organizations is a continuous act/exercise. The inexorable march of time and the ceaseless glamour for social change combine to make adaptability and continuing preparation of the workforce as inevitable as the initial acquisition of knowledge and skills. This cannot happen if employees’ capacity building and development do not occur in an enterprise. In other to maximize the productivity and efficiency of the organization, every executive, manager or supervisor in a public or private organization has the responsibility and indeed the bounding duty to ensure the development of their employees who have requisite knowledge and expertise (Dada, 2004)

A strategy for improving workforce productivity to drive higher value for the firms has become an important focus. Amah (2006) asserted that “change in the environment has resulted in skills becoming obsolete so that competent employees don’t remain competent forever”. Skills, knowledge, and abilities deteriorate and can become obsolete if not nurtured (Robbins, 2001). It is all about recruiting, supporting and investing in people (labour) engaged in organizations using a variety of means which includes education, training, coaching, mentoring, internship in order for organizations to perform effectively and efficiently. (Obasi, 2007). In order to achieve their goals, organizations deliberately employ various techniques to increase and improve the potentials of their workforce. It is in the light of the above that most firms in the western world like telecommunication giant ‘Verizon communications Inc.’ now view human capital development as a strategic investment rather than a mere budgeted cost and reserves a good percentage of their annual budget for employees training and development.

Customer satisfaction refers to the favourability of the individual’s subjective evaluation of the various outcomes and experiences associated with using or consuming a product. Recently, the main purpose of the researches on customer satisfaction has changed the spotlight and gives significant valid to other different areas that are important as compared with other issues. For example, the service quality has its impact and significant predictor of the financial strength of the organization (Duncan & Elliot, 2004; Duncan & Elliot, 2002; Yasin, 2004; Wiele, 2002; Yeung, 2002; Rust et al., 1995; Greising et al, 1994).

Sales volume is the number of units sold within a reporting period. This figure monitored by investors to see if a business is expanding or contracting. Within a business, sales volume may be monitored at the level of the product, product line, customer, subsidiary, or sleeps region. This information may be used to alter the investments targeted at any of these areas. A business may also monitor its break-even sales volume, which is the number of units it must sell in order to earn a profit of zero. The concept is useful when sales are contracting, so that management can determine when it should implement cost reductions. This can be a difficult concept to employ when there are many different products, and especially when each product has a different contribution margin.

In response to the changes, most firms have embraced the notion of human capital as a good competitive advantage that will enhance higher performance. Human capital development becomes a part of an overall effort to achieve cost-effective and firm performance. Hence, firms need to understand human capital that would enhance employee satisfaction and improve performance. Although there is a broad assumption that human capital has positive effects on firms’ performance, the notion of performance for human capital remains largely untested. Hence, this work attempts to look into the connection between human capital and organizational performance of manufacturing firms in rivers state.

1.2. Statement of the Problem

The problem of this study centers on the need to expand or grow the skills of the human capital of an organization as a competitive strategy in achieving sustainable development of a business organization in the face of competition. As a matter of fact, the extent of success achievable by any organization be it profit or non-profit oriented depends on the ability of its human resources to utilize other resources (factors of production) such as capital, equipment, and land for the achievement of organization objectives. Investment in intellectual capital (human capital) therefore must not be treated merely as an expense in the profit and loss account of an organization but rather as a capital expenditure which repays with huge gains or profit over time.

However, this concept seems to be a new one in Rivers State since not all organizations have recognized the important role of human capital development in organizational performance and development. Even for those in the educational sector that seem to understand the value of investing in people, many of them still give poor attention (if any) to human capital development. This is what made this study very necessary to sensitize business operators (organizations) about the need to give adequate attention to and make sufficient financial provisions for human capital development towards improved organizational performance and growth of manufacturing firms in rivers state.

Fig 1.1 Conceptual Framework (AVAILABLE IN MATERIAL)

Source: The dimensions of human capital development were adopted from (Preko, 2014); while measures of organizational performance were adopted from (Ukoha & Nwuche, 2017)

1.3 Aim/Objectives of the Study

Generally, the work aims to examine the relationship between human capital development and organizational performance.  In a more specific sense, the objectives of the study is to:

1. Examine the relationship between self‑directed learning and sales volume of manufacturing firms in Port Harcourt.
2. Identify the relationship between self‑directed learning and customer satisfaction of manufacturing firms in Port Harcourt.
3. Ascertain the relationship between training and sales volume manufacturing firms in Port Harcourt.
4. Determine the relationship between training and customer satisfaction of manufacturing firms in Port Harcourt.
5. Evaluate the relationship between mentoring and sales volume of manufacturing firms in Port Harcourt.
6. Examine the relationship between mentoring and customer satisfaction of manufacturing firms in Port Harcourt.

1.4 Research Design

This study addresses issues relating to the following pertinent questions emerging within the domain of study problems. However, the research questions are itemized as:

1. What is the relationship between self­­‑directed learning and sales volume of manufacturing firms in Port Harcourt?
2. What is the relationship between self‑directed learning and customer satisfaction of manufacturing firms in Port Harcourt?
3. What is the relationship between training and sales volume manufacturing firms in Port Harcourt.
4. What is the relationship between training and customer satisfaction of manufacturing firms in Port Harcourt?
5. What is the relationship between mentoring and sales volume of manufacturing firms in Port Harcourt?
6. What is the relationship between mentoring and customer satisfaction of manufacturing firms in Port Harcourt?

1.5 Research Hypotheses

To proffer useful answers to the research questions and realize the study objectives, the following hypotheses are stated in their null form, such as:

Ho₁: There is no significant relationship between self‑directed learning and the sales volume of manufacturing firms in Port Harcourt.

Ho₂: There is no significant relationship between self‑directed learning and customer satisfaction of manufacturing firms in Port Harcourt.

Ho₃: There is no significant relationship between training and sales volume of manufacturing firms in Port Harcourt.

Ho₄: There is no significant relationship between training and customer satisfaction of manufacturing firms in Port Harcourt.

Ho₅: There is no significant relationship between mentoring and sales volume of manufacturing firms in Port Harcourt.

Ho₆: There is no significant relationship between mentoring and customer satisfaction of manufacturing firms in Port Harcourt.

1.6 Significance of the Study

The findings from this study will help the manufacturing firms in designing work processes that ensure organizational performance. More so, the study will help the organization with developing processes for improving human capital development such as training, mentoring, etc.

This study will also help managers and administrators of co-operating business as a guide in implementing human capital development program to encourage organizational performance. By doing so, an employee will put in their intellectual contribution towards the achievement of organizational objectives.

Management will utilize the concept of human capital development to formulate strategies on determining challenges and goals towards organizational performance; hence identify the areas where improvement can be done.

It will be useful to human resource analysts as it evaluates an aspect of employee personal development which bears strong relevance on organizational performance.

Researchers: this study will contribute immensely to the existing stock of knowledge and by so doing provide a dependable base for the takeoff of further research in this field of study by other student researcher’s academics.

1.7 Scope of the Study

This study investigated the relationship between human capital development and organizational performance.

Geographical Scope: this study is restricted to selected manufacturing firms in Port Harcourt, Rivers State.

Content Scope: this study will be restricted to the literature on human capital development and its dimensions and organizational performance and its measures.

Unit of Analysis: considering the nature of the topic, the unit of analysis will be at the macro level, in order words, the unit of analysis will be the organizational level.

1.8 Limitation of the Study

In as much as lots of commitment and zeal were employed in conducting an intensive thorough study, certain impediments were encountered. Some of the limitations were:

Firstly, there is a dearth of literature and research on organizational performance, particularly in the Nigerian context as most of the available literature by the foreigners on foreign organizations whose setting in no way depicts what is obtained in Nigerian manufacturing firms, especially in Port Harcourt.

The reluctance of respondents: Information flow could be tainted, suspicion and sometimes fear of victimization by top management personnel; the unwillingness of employees to divulge strategic information due to confidentiality.

Scope of the study: Another limitation in this research is the scope of the study. The research was conducted in selected manufacturing firms in Port Harcourt making it difficult to generalize the findings to other firms across the country and beyond.

Sample Size: When the sample size of the research is small, it posts a limitation to the research because of few sample size which does not represent the major of the manufacturing firms adopting human capital development; there is a need for further studies on human capital development and organizational effectiveness.

1.9 Definition of Terms

Customer Satisfaction: Refers to the favorability of the individual’s subjective evaluation of the various outcomes and experiences associated with using or consuming a product.

Sales Volume: Is the quantity or number of goods sold or services sold in the normal operations of a company in a specified period.

Mentoring: a professional relationship in which an experienced person assists another in developing specific skills and knowledge that will enhance the less-experienced persons professional and personal growth

Organizational Performance: organizational performance comprises the actual output or results of an organization as measured against its intended output.

Training: the action of teaching a person a particular skill or type of behavior

Self‑directed learning: Is a personal decision of what and how to learn with the help of proper guidance from the teacher or instructor.

1.10 Organization of the study

This section describes the content of chapters and sections.

Chapter one consists of the introduction, background of the study, problem statement, objective of the study, research questions, significance of the study, methodology, and organization of the study. Chapter reviews literature with more highlights on works done related to the topic.

Chapter three looks at the methodological framework of the study. The chapter discusses the types and sources of data, sampling techniques, population size and procedures for collection and analysis of data.

Chapter four entails the analysis of data and generated results from the analysis.

Chapter five talks about the findings of the research study and draw a conclusion. Answers to specific objectives of the research are discussed in these chapters and recommendations are made based on the findings and analysis of data obtained from the field.