MANPOWER DEVELOPMENT AND UTILIZATION IN NIGERIAN BANKS A STUDY OF FEDERAL MORTGAGE BANK OF NIGERIA (FMBN) 2004-2014

ABSTRACT

Globally, there has been a growing recognition of the indispensable role of human capital formation in the attainment of organizational and societal goals. Manpower development and utilization in the Nigerian banking sector is not only a challenge which has been facing the industry but has also contributed substantially in the bank failures in the past. In the same vein, it is an established fact that human resource is an indispensable aspect of public administration and governance. Training and development of banks employees has been abandoned in pursuit of profit objective that somersaults as a result of quality of employees in the banks. This problem of human resources is compounded by the fact that while there is a lot of unemployment, there are many vacancies that remain unfilled because the available manpower do not match the requirements of the job. Hence, the need for empirical study to examine manpower development and utilization in the Federal Mortgage Bank of Nigeria (FMBN) has  become imperative.  Hence,  the  study investigated  Manpower  Development  and  Utilization in Nigerian Banks using Federal Mortgage Bank of Nigeria (FMBN). A survey research design was adopted and data was collected through both primary and secondary sources. The population of this study is made up of 785 staff of the Federal Mortgage Bank of Nigeria who is working in the 39 branches of the bank in Nigeria in various departments. A Purposeful sampling technique was used to select the bank in the study. The size of a sample was determined by a multiplicity of factors which include amongst others, the amount of dispersion of the elements of the population. Questionnaires were  properly  structured  and  face  validity  achieved  by  the  researchers  and  employers  for  the instruments used for data collection to ensure they were valid. Test-retest method of reliability was applied and a reliability index of 0.73 was obtained indicating a high degree of consistency. A sample of 236 was obtained from the population of 785 employees. Simple frequency and chi-square were used in the data analysis with the aid of SPSS 17.0. The results of both the descriptive and inferential statistics indicate that objectives were met. Hypotheses were tested using the Friedman chi-square test. The study found that the manpower development and utilization programmes of the FMBN meets its expectation of productivity just as it was established in the result thatthe training need of FMBN is conditioned by the training of personnel in the Bank. The study concludes that human capital development is a must for every organization. The study therefore recommends that organization in order to improve their performance; capabilities, skills and knowledge as well as culture of work ethics, attitude and behaviour that enhance efficiency and effectiveness in production should be given proper attention.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Human resource is an indispensable aspect of public administration and governance. Globally, there has been a growing recognition of the indispensable role of human capital formation in the attainment of organizational and societal goals. Ndiomu (1992: 34) defines human resources as comprising “of men and women, young and old who engage in the production of goods and services and who are the greatest assets of the organization”. There is no doubt the fact that no meaningful national development can be divorced from the quality of a country’s manpower.  Thus, trained and skilled manpower of any nation or organization are her or its greatest wealth and asset for delivering on the nation’s or organizational policies and programmes. This view, indeed, represents a total departure from the earlier notion that tended to equate successes of organizations with their material resources  endowments  or   capital  profiles,  which  was  typical  of  classical economists such as Adam Smith and Alfred Marshall. As Harbison (1973:6) aptly observes:

“Human resources – not capital or income or material resources – constitute the ultimate basis for the wealth of nations. Capital and natural resources are passive factors of production. Human beings are the active agents who accumulate capital, exploit natural resources; build social, economic and political organization and carry forward national development”.

Corroborating the above point of view, Ezeani (2002: 2) argues that “the ability of any organization to achieve its goals depends to a large extent on the caliber of organization and motivation of its human resources”.

With man assuming the centre stage in the overall production chains, the new thinking and concern have, therefore, become that of how best to harness his productive capabilities to the gains of the organization and society in which he found himself. Thus the principles of human resources or personnel administration or management are of primary importance to most organizations today.  It borders on devising the most efficient and effective means of achieving competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personnel techniques (Storey,

1995).

With her over 160 million population, Nigeria is obviously endowed richly with enormous natural resources and human capital necessary for driving development. Ironically, however, past failures of policies and programmes in the country were attributed to her human resources problem – the country’s civil and public services, as many argue, are thronged by individuals with disarticulated values, perverse orientation to work and over bloated workforce lacking in the requisite skills, competence and ethical backbone that conduce functional flexibility, commitment and productivity, especially in the present age of Information and Communication Technologies (ICTs) revolutions.

The case of the manpower available in the private sector, particularly the banks is pathetic. The banking sector reforms introduced by the Central Bank of Nigeria (CBN) since July 2004 have witnessed a successful implementation of the major programme of the reforms such as twenty five billion naira re-capitalization for universal banks and later to consolidation involving mergers and acquisitions. The programme has given birth to less than 25 newly consolidated and expectedly, stronger banks too.  It has also left a casualty of more than fourteen (14) banks.  In essence, former banks have transformed to less than 25 through a tail blazing re- capitalization, consolidation, merger and acquisition processes. Having seen the

need for mega banks in a growing economy like Nigeria, some banks are now constantly negotiating for deals, formulating, implementing policies and programmes that will see them bigger and stronger. While some banks rely on the stock market to raise more capital, others engage in promotions, trainings and development of personnel as well as negotiations for merger or acquisition deals. Expectedly, many banks engage in one form of right sizing /downsizing or the other. The employers of these banks also engage in training and retraining of their

staff to meet the challenges of the sector in the 21st  century.  Considering that the

banking sector was the second highest employer of labour in Nigeria prior to the

2004 reforms, the retrenchment in the sector increased the poverty rate in Nigeria. In fact, “over 70 percent of Nigerians live in abject poverty” (NPC, 2005:29-30). Meanwhile, the 2004 reforms of banks in Nigeria were at the instance of Professor Soludo’s assessment of the banking industry. Its central objective was to evolve the most suitable mode of managing Nigerian banks through the available personnel structure whose skills are to be regularly improved upon and developed through identified manpower development schemes (Egonmwan & Ibodje, 1998).

As majority of Nigerians are faced with externalities of privation and underdevelopment, primacy ought to be given to the economic policies and programmes as well as bank personnel in order to achieve the goals of banks. Notably,  the  society  and  social  environment  of  statecraft  is  dynamic.  The dynamism reflects in all facets of organization and administration. The dynamism also demand constant training of staff on different areas including programmes and project  designing  and  monitoring;  general administrative principles;  and  most importantly on the general application of modern technology such as computer software in administration (e-administration).

Many elements combine to make good administration. These elements include leadership, organization, finance, morale, methods and procedure, but greater than

any of these is manpower (Bhagwan & Bhushan, 2006). In the same vein, Finer argues that usually, well thought-out and scientific principles break down because the human capital is not competent to execute the work.  In fact, according to him, no activity of public/private administration can be performed today without personnel. Under the impact of science and technology, the activities of most organizations have multiplied so much so that at every step, the people come into contact with the personnel who are the ‘sovereign factor in public administration (Bhagwan & Bhushan, 2005).

It is discernable from the above fact that efficiency and effectiveness in administration, be it at the individual, group, organizational or governmental level, are functions of the quality of human capital that design and run policies and programmes. The banking sector in Nigeria is  of particular importance in the developmental programme of the nation. It is a fact today that most Nigerians use the institution as humble middlemen in making payment.

The success of any bank in providing this service depends largely on the wherewithal, especially human resources available at the bank. Worthy of note too, is the evolutionary trend in present day administration of banks which has resulted in the introduction of information communication technologies. Against this background, the common expectation is that bank staffs should be ICT complaint and be acculturated, through training to the new method of doing things as well as be offered the opportunity to apply learned skills and knowledge required of his job. However, most bank staff in the country is not receptive to change and thus still stick to the old and traditional ways of doing things at the expense of modern technology. Thus, according to Udo-Aka (1992), the problem of human resources in Nigeria is compounded by the fact that while there is a lot of unemployment, there are many vacancies that remain unfilled because the available manpower do

not match the requirements of the available vacancies, a situation which he said has made the subject of manpower development an ever-imperative one.

Experience have shown that most employees of banks have undergone one form of training or the other but are yet to apply it to day to day job. The consequence of the above is that most employees of banks are redundant as a result of the nature of training adopted and improper utilization of employees.

1.2Statement of the Problem

Nigeria is obviously endowed richly with enormous natural resources and human capital necessary for driving development. Ironically, failures of policies and programmes in the country were attributed to her human resources problems in the country’s civil and public services. Many argue that civil and public services are thronged by individuals with disarticulated values, perverse orientation to work and over bloated workforce lacking in the requisite skills, competence and ethical backbone that conduce functional flexibility, commitment and productivity, especially in the present age of Information and Communication Technologies (ICTs)  revolutions. In  particular, Nigerian banks  face  problems  of  manpower development and utilization. No doubt, the failure of banks leadership in Nigeria to chart a  clear course  for  human resources development by way of  training of personnel and the abject non-utilization of trained staff as a result of personal predilection of the helmsmen and other overbearing influences as exemplified in the politicization of trainees selection processes have today led to the abandonment of banks traditional responsibilities. The success of any bank in providing this service depends largely on the wherewithal of the human resources available in the bank. Most banks staffs in the country are not receptive to change and thus, still stick to the archaic and outdated ways of doing things at the expense of modern technology. The case of the manpower development and utilization in the banks is

very pathetic. Training and development of banks employees has been abandoned in pursuit of profit objective that somersaults as a result of quality of employees in the banks. This problem of human resources is compounded by the fact that while there is a lot of unemployment, there are many vacancies that remain unfilled because the available manpower do not match the requirements of the job. Hence, the need for empirical study to examine manpower development and utilization in the  Federal Mortgage Bank of Nigeria (FMBN) has become imperative.   The chosen time frame covered by the study is 2004-2014 and justified by the fact that it represented a moment of intense reforms in the banking industry. It will be disastrous to assume that the much touted gains of reforms through consolidations, mergers  and  acquisitions are  sufficient to  safeguard  the  nation especially the stakeholders against future failures. Thus, this research is primarily concerned with exploring how manpower development and utilization in the Nigerian Banks can save the industry.

1.3The Objectives of the Study

This study has both broad and specific objectives. Broadly, this study enquires into the  manpower  development and  utilization of  the  Federal Mortgage  Bank  of Nigeria (FMBN). The specific objectives include:

i. To determine the importance of manpower development to the FMBN.

ii.  To  determine  the  extent  to  which  manpower  development programmes  of

FMBN is based on the training needs of the Bank

iii. To ascertain the extent to which the bureaucratic politics and patronage system influence trainees’ selection for manpower development programmes in FMBN.

1.4Research Questions

This study seeks to find answers to the following questions:

i. Of what importance is manpower development to the FMBN?

ii. To what extent are the manpower development programmes of FMBN based on the training needs of the Bank?

iii.  To  what  extent  does  bureaucratic politics  and  patronage system  influence trainees’ selection for manpower development programmes in FMBN?

1.5 Hypotheses of the Study

In this study, three hypotheses were formulated in line with the objectives of the study and research questions. They are:

i. Ha: Manpower development is not important to FMBN.

ii.  Ha:  Manpower development programmes  of  FMBN  are  not  based  on  the training needs of the Bank.

iii.  Ha:  The  extent  to  which  the  bureaucratic  politics  and  patronage  system influence trainees’ selection for manpower development programmes in FMBN is not significant.

1.6Scope of the Study

This study tends identify whether FMBN place emphasis on manpower development and how much the bank utilizes potentials of staff. This study focuses on the 37(Thirty-seven) State offices of Federal Mortgage Bank of Nigeria. The bank has one branch in every State of the Federation including a branch in the Federal Capital Territory except Lagos where the bank has two State offices. The study will cover the period between 2004- 2014.

1.7Significance of the Study

This study has both theoretical and practical significance. Theoretically, this study is significant in many important respects. First, it covers an important period in the Country’s bank history – a period of “intense reforms”. The period 2004-2014 is particularly significant for a study of this nature because it marks a turning point in the banking sector in the country. For FMBN, the time scope of this work is particularly significant for the singular fact that it covers both the period during which the bank acquired more banks and became bigger. Second, it also permits a comparison of the manpower development and utilization programmes of past and present reforms.

Third, the study has the ability to trigger off further scholarly research in the field of human capital development and utilization. Whereas volumes of literature exist on human resources development generally, no known attempt has been made to inquire into the manpower development and utilization profiles of the FMBN. This is one of the gaps this study seeks to bridge.

Practically, this study will provide the stakeholders in FMBN the much-desired framework for deeper understanding of the underlining intrigues that characterize manpower development and utilizations as well as help the bank directors to make appropriate manpower policies necessary for meeting the developmental needs of the management, staffs and customers.

1.8 Limitations of the Study

The research encountered certain limitations/constraints in the course of the work. Such limitations/constraints include the under listed:

i.        Dearth of research materials especially empirical works

ii.       Negative attitude of respondents from the staff of the bank and their management.

iii.      Inaccurate records/statistics of the bank under study. iv.      Inadequate finance for more elaborate studies.

v.       Power interruptions during research report writing and typing.

However, the researcher overcame all these by carefully studying and analyzing each situation and applying best possible solution and thus, completing the work successfully.

1.9Definition of Terms

i. Manpower: The manpower of any organization is the employees or staff in the organization. They are the individuals, both men and women, who work in an organization for the attainment of its objectives.   Hence the manpower of the FMBN is the workers in the bank.  The term manpower is used synonymously with human resources, human capital, personnel, staff, employees and workers in this work.

ii. Manpower Development:    This  is  the  sum  total  of  activities  designed  to improve the know-how, skill, values, attitudes, behaviour and competences of the manpower of any organization.  Manpower development, staff training and human resources development mean the same thing in this study.

iii. Manpower Utilization: Also referred to in this work as human resources utilization and personnel utilization, this defines the sum total of decisions and actions geared towards effective use of the manpower of an organization for the attainment of organizational goals.   Manpower utilization therefore, is  closely linked with the concept of manpower development, which precedes it.

iv. Training and Development: They are any learning activity directed towards the acquisition of special knowledge and skills and improvement of the attitude and behaviour of employees in order that they may perform their duties much more effectively than ever before.  In the intendment of this research work, training and

development mean the same thing.  In fact, a definition of training that meets the theoretical requirements of this study is one proffered by McGehee and Thayer (1961).  They define training as “the formal procedure, which an organization uses to facilitate employees’ learning so that their resultant behaviour contributes to the attainment of the organization as well as individual’s goals and objectives”.

v. Training Needs: This is used to designate the relationship between what a worker knows and what he or she is expected to know to perform better on his or her assigned duties.   Cole (2002, p. 339) definition of training need suits the context  of  this  study.    According to  him,  “Training  need  is  any  shortfall in employee performance or potential performance which can be remedied by appropriate training.”

vi. Productivity: Productivity, in this work, defines the output of a worker.   A productive worker is one who understands the rudiments of his job and meets the organization’s target.  Productivity is measured through performance appraisal and is judged against various variables such as skills and competences of employees, their motivation and job fulfillment.

1.10 Profile of the Selected Organisation

The Federal Mortgage Bank of Nigeria (FMBN) was established in 1959, known then as the Nigeria Building Society (NBS), a joint venture of Commonwealth Development Cooperation and the Federal and Eastern Governments of Nigeria. Following the introduction of the indigenization Policy, the Federal government, by Indigenization Act of 1973, undertook 100% ownership acquisition of the NBS and consequently renamed it  Federal Mortgage Bank of Nigeria(FMBN). The operates as an effective vehicle for the mobilization of long term funds, lending volumes and expansion of mortgage lending services to all segments of the Nigerian population. The FMBN started the management and administration of the

contributory savings scheme known as the National Housing Fund (NHF) established by Act 3 of 1992. The NHF is a pool that mobilizes long-term funds from Nigerian workers, banks insurance companies and the Federal Government to advance  loans  at  soft  interest  rates  to  its  contributors.  In  1994,  the  Federal Mortgage Bank of Nigeria, with the promulgation of the FMBN Act 82 (1993) and the  Mortgage Institutions Act 53  (1989) was  accorded the  status of the  apex mortgage institution and thus ceded its retail function to an autonomous company, Federal Mortgage Finance Limited (FMFL) which was carved out of the FMBN, itself fully owned by the Federal Government of Nigeria. Under the reform of the housing sector based on the FGs 2002/2006 National Policy on Housing and Urban Development, the FMBN was restructured into a Federal Government-Sponsored Enterprise (FGSE) with more focus on secondary mortgage and capital market functions. .  It plays the critical role of developing a  robust  mortgage finance system for the country. To meet its mandate, the FMBN has shifted operational emphasis to expand its functions from only social housing on-lending under the NHF to include commercial on lending for housing, commercial mortgages refinancing, mortgage purchasing and warehousing and Mortgage-Backed Securitisation. Under this mandate it finances mortgages created by primary mortgage institutions (PMI) under the National Housing Fund Scheme and also gives estate development loans (EDL) to real estate developers. The banks overall mandate is to promote the delivery of affordable and modern houses to Nigerians.

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