Impact of Employee Welfare Services

 Impact of Employee Welfare Services, study of  Emenite Co. Ltd Emene Enugu

Literature Review


Wefarism is the social policies character tic of a welfare state which scientist principles have been put into effect with the purpose of ensuring the welfare of all who live in it.

Some organization in Nigeria about 9193 because conscious of proving their employees with welfare facilities.  This led to spring up in 1916 the first pioneering welfare workers association became central association of welfare workers in Nigeria.

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The aims of the association were to close the yamnining gap provision of amenities which declined during the world – wide economic of depression.  This also led to the employment of casual workers so that they can be hired and tired at will without bearing any responsibilities other than that required by law.

In 1919, employees split away to form than own organization.  This was the industrial welfare society which changed name to industrial society in 1965.  according to Maurice W. cunning (1980:4) the aim was to exchange ideas and information about welfare policies and techniques that have been broadened to cover the whole field of personnel.


The ministry of labour now the federal ministry of labour also contributed very immensely to the development of a personnel management in Nigeria by improving the relationship between.  The trade unions and the employees.  With the advice given by this ministry they full employing   specialist on labour who would achieve them on labour issues with this, one would know that the contribution of the ministry of labour led to the peaceful atmosphere that employers to the unions and the employers to be acceasible.  When the federal ministry government restructured the Nigeria labour congress on 4th December, 1975, there was a threat that it would take over the ministry, but it stood as separable entity.


The Nigerian labour relation system is modeled after that of Britain which is based on agreement.  The concept of agreement means that employees and employer without force should determine the relationship between them through free collective bargaining and agreement.  Therefore, the role of government was limited to that of settling the basic guidelines for relations between workers, their representative and employers.

Labour relations is concerned with labour problems in their ramifications.  It encompassed the study of the rules governing salary administration together with ways in which these rules are made.  Interpreted and administered.  It seeks to establish relations and interactions between employers and employees so as to attain and maintain productivity efficiency in the organization.  These are laudable achievement of labour relations and are made possible through the collective bargaining and agreement machinery.

Agreement on welfare services takes place when group of workers enter into negotiation either by themselves or through the union as a bargaining unit with an employer or group of employers with the objective of reaching agreement on condition of employment and salary administration for the group of workers concerned.  The agreement which is thus the product of the process is termed “or collective agreement”, which normally covers a great deal of variety of matters such as rates of wages, hour of work, holiday, sick pay, over time conditions, redundancy procedure for settling grievements.


          It is true that paid employment to a new development in Nigeria.  This is because the economic life of Nigerians did not call for grade unionism before the advent of colonial rule.  Traditional society operated on a communal basis.  Nigeria was then a subsistent economy and African custom demanded that people should serve their parents, family and village heads and community at large freely without demanding anything in return.

Wogu Ananaba (1982:1) suggested that wage employment started with, the incursion of the early European explorers who needed guides and carnets for their exploits and would therefore not hesitate to engage any person offering his service(s).

In his history of Nigeria A. C. Burns, former Chief Secretary to the Nigerian Government reported tht before he died, Miengo park engaged two guides, Amadi and Isaac.  Amadi was reported to have been paid off at yaurl.

Unconsciously, welfare services has been in existence before the advent of the European in Nigeria.  The welfare services programme is not alien to our culture.  Traditionally, our chief or well – to – do people are known to have had generous compensation packages for their subjects or labourers who offered them continuous and dedicated service.  The compensation package does not only include the amount charged for a job or the fruit of their labour in the form of yanms and normal days entertainment but other welfare services such as parcel of land to acculturate for himself, help in difficulties, and even free farm implements.

At times, the employee, if under a chief, is given free accommodation in the chief’s palace and such services make the employee happy and always willing to bring out his best whenever called upon to do something.

The welfare services in Nigeria started in earnest in the early nineteen century with the coming into extended of the southern civil service union in 1912.  This came as a result of the coming together of civil service workers to ask for fair wages from their employers who were then under the
British colonial masters.

According to Akintunde Emiola (1979:159) the understood of welfare services to workers brought about the general strike in 1939 by Railway workers to demand for improvement in the cost of living allowance for workers referred to as “COLA”.  This strike made government to take a more active interest in labour issue and welfare service which led to the creation of the department of labour in 1942.


The united kingdom department of employment (1918) defined a trade union thus “all organization of employment, including that of salaried and professional workers as well as those of manual wage earners which are known to include among their functions that of negotiating with employers with the object of regulating the conditions of employment and benefits therein.

The trade union movement aim at improving the living standard of its members.  This implies that trade unions always strive to improve the economic benefits of employment which in other words is welfare services.


The terms Employee Welfare Services has been defined by different authors depending on the subject matter.

Eeith and Gubellin (1978) defined it as “the welfare services provided for the worker by the employer in addition to the wages paid”.

According to Michael Armatrong and Helen Murtus (1980:40) describes Employees welfare services as items in the total offered to employees over and about salary, which increase their wealth or well-being at some cost to the employer.  He stressed that it is important to recognize however, that many welfare services are interdependent and that an effective welfare service policy generally depends on careful realization of the pattern and balance of benefit entitlement or welfare services throughout the organization. Many benefits are inextricable linked with status and where welfare services are linked by employee category the boundary can often be source of discontent.  In many instances this will have to be minimized as far as possible and accepted, but sometimes action has to be taken because the level of dissatisfaction becomes intolerable.

Tackle et al (1058) see it as a wide variety of services provided by companies for employees and in some cases for members of employees family.  Jucious (1977) looked at it as “the delayed forms of compensation paid in events of prescribed occurrences or contingencies which proved employee with services or returns they otherwise would have financed themselves”.

Ubeku (1982:143) define it as extra income additional effort working condition that requires no additional effort.  Naylon and Torrington (1974) view it as a voluntary provision on the part of the employee.  It should be noted that not all provisions are voluntary.  The researcher in her own view define welfare services as a variety of plans provided by employers for the improvement of good health, comfortable living and working conditions of their employees.  Welfare services exist in different forms with various names.  Some refer to them as personal services, employee services plan and welfare programme.  Often they are referred to as fringe benefits.

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According to Akpalu (1991) this include pension and insurance, medical plans and health services, company housing, scorings and locus facilities.

Flippo (1970) grouped employee welfare services into for categories, thus:-

  1. Payment for time not worked.
  2. Hazard protection.
  3. Employee services.
  4. Legally required payments.

Such category was also put forward by Yoder el al (1962) as:-

  1. Extra payment for time not worked.
  2. Payment for employee security.
  • No production awards and bonuses.
  1. Payment for employee services.

In the above category non is the best.  What management does is to select the best way of improving the working conditions of their employees for maximums productions.

Many of these employee welfare provisions are negotiated by management and union.  It can also be obligatory by law to provide such benefits.  Examples of benefits that can be negotiated are normal work hour, premium for second and third shifts, paid holidays and rest periods, overtire and holiday pay, call-in-call-out and cell back pay.  These are benefits for added leisure and income.

In business establishments or even government owned organization, the nature of staff determines the seriousness of staff.  Okonkwo (1988) has this to say “nature of all allowances given to staff of and establishment determines the success or otherwise of the establishment”.  In business establishment there is always a fixed number of working hours.  Any other hour worked in excess of the agreed or fixed hours called overtime.  A situations arises where a worker put in extra hour for the good of organization which is called overtime.  If the overtime is not properly taken care of by the management of the organization, the staff will be discouraged and that is why they said that any organization that do not pay for overtime to their workers even if it is one hour only cannot get their staff to work for them during the holidays.  This is very clear because the staff of any organization that pays extra hours work even on Sundays.

However, there is a side effect to the overtime issue.  According to Akpala (1991) “some workers do play during the fixed working hours knowing fully well that they must be paid and wait for their overtime which is paid according to the number of hour worked for”.

Working in the nights and shifts are not as attractive to employees as the normal days work on which basic salary is paid.  So employees are less likely to agree on the job wisthout extra remuneration paid as incentives unless it is mandatory that those who do not consent to such are arrangement might lose their job.  And even at that such an establishment fids it very difficult to keep workers unless the basic salary is attractive because the most important thing to any worker is how much he collects at the end of the pay period.

Employees are entitled to a holiday with pay after twelve month of continued services.  According to Knowles (1955) “majority of office workers receive a two week pay vacation annually in different organization:.  Yoder et al (1962) asserts that “most common current pattern grants three weeks annual holiday.  Four weeks is becoming the rule for staff paid over N4,000 a year and a growing proportion of senior executives received five weeks.

Some establishment especially government owned companies pay very little to their staff as their annual leave entitlement and that is why people often resign from government ministries to look for greener pasture at private establishment.

Some companies pay their female staff during their maternity leave and give them six weeks before delivery and eight weeks after delivery.  But there are some establishments that do not give their female staff enough rest for their maternity leave and will not pay them any thing.  This type of attitude discourage women from working in such establishments.

It has been observed that the environment where employees live has a considerable effect upon their performance at work.  Consequently, Flippo (1971) asserted that “many managers are now concerned with assisting the employees to find a suitable home particularly when they are new  in a particular area”.

Employees will work with greater concentration when they are assured of proper housing.  According to Armstrong (1974) “housing assistance and allowance of various kinds are becoming one of the more frequently used and appreciated fringe benefits, long term credit has been made available to employee at favourable rules”.  A situation where the above housing benefits are given to employees to increase their output, and that is why most establishment provide/build staff quarters for their workers often located close to their work place.

Many firms do however make available their own products to their employees discount products.  This provides returns in morale and stimulates the employee to use the products they manufactures.  The following are some of the discount services which employees can enjoy from their employers.

  1. Assistance in buying personal supplies.
  2. Help in buying products made or sold by the company through their own purchasing department.

Canteen service is another welfare services provided for workers nowadays some companies have been forced to provide such facilities because they are located away from the central community services.  This will help in checking truancies from employees because some employee will above break period if canteen a are not located very near to the company.  In some company’s, the actual operations of this facilities is conditioned by the company or leased to an outside caterer who is required to prepare balanced diet for workers at lower prices while in some companies free food as served to workers or meal coupons are given to companies are lower, absenteeism, improved employees wealth, increased employee moral and efficiency and decreased number of accidents”.

It is often said that health is wealth and a heathy body makes a healthy mind.  So in recognition of this, employers have developed more interest in the provision of health and welfare scheme for their employees.

Within the medical facilities provided by companies include what is called industrial medicine.  The industrial medicine, according to Akpala (1989), is intended to supplement regular practices and not to compete with it.  He were further to say that the programme of industrial medicine include “regular physical examination, health education prompt are of the injured sanitary inspection, elimination of health hazards, stenches of fatigue, provision of visiting hours, services to employees away from work because of illness etc.

According to Knowles (1955) “the difficulty of obtaining adequate medicine a reasonable rate through regular channels however, has led in recent year to expansion of industrial medicine to give the employees more free Medicare.  Some firms have gone so far as to external free medical services to families of employees”.  With the increasing emphasis upon exercise as regard the avenue to better health, some large companies are providing exercise facilities and medical personnel to assists in planning and monitoring individual exercise programmes since leave is also granted when necessary because it is always difficult to control.

Often employees recognize the importance of long and dedicated services to the organization.  In view of this, they establish the company’s old age and retirement plan to carter for the employees who are no longer in active services.  One of such benefit is pension or retirement benefit.  This pension programme is always based on the fact that most employees are unable to save enough to provide for their support when they retire.  Any company that does not have such plan exposes the employees to the risk of doing everything possible in order to provide for their old age.

According to P.K Ghost (1986) he said that policies with regard to wages and salary administration and policy in supplementary benefits are vital components of personnel policy because it is mainly on the basis of satisfactory compensation schemes that a company is able to attract and retrain capable personnel.  A satisfactory policy, frame is invariable conductive to high moral and minimum frictions among individuals and group of employees.

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All welfare services may not necessary be monetary, ordinary words of encouragement and a good sign of appreciation could boost the moral of employees.

Welfare services is also defined by Richard Greenhill (1980) as “those forms of basic pay, salaries and wages”.  To warrant the term benefit, the expenditure of the company on the particular item must produce a quantifiable value for the individual employee.  The value may be effective immediately, for example, the provision of a company car, or it may be deferred or contingent as on the case of providing for a pension and giving insurance cover.  In this context of a total remuneration policy, the welfare may also be held to include certain terms and conditions of employment which have not traditionally been regarded as remuneration, for example annual holiday and medical checks.


There are of course those who advocate that a basic pay structure should not require addition in the form of various welfare or benefits to make it viable.  Be this as it may, it cannot be overlooked that most companies do compensate/reward their employees with remuneration in other forms in addition to basic salary or wages.  If the pay comprise ceases to establish the levels of pay in other companies the company may find that it pays very high salaries and wages but is unable to recruit and retain employees because its benefits programme is non existent.

Richard Greenhill (1980) noted and made it clear that welfare services is important for both the organization and the employee as it will help the employee to keep moving in life and make high production and to the organization as it will still retain most of its high and efficient staffs and for its continuity.


To know the type of welfare services to be taken the employees needs and objectives has to be noted.  According to Richard Greenhill, (1980) he opined that “if the company is to operate a cost effective remuneration policy, account has to be taken of the real or perceive needs and objectives of the employees”.  Most companies through their director, believe that they know the attitudes of employees to existing remuneration policies and the way in which employee will react to changes or development in those policies.  Experience suggests however that senior management may have fundamental misconception of the employees needs and also, perhaps surprisingly, senior management may not have assessed sufficient accurately it own needs and objective.  To establish the needs and attitudes of employees it any one level or all levels, the company will have to take appropriate actions to ascertain the effectiveness of its current policies.  Only afterwards should it embark upon introducing new benefits or changing existing benefits.


According to Richard Greenhill (1980:69) on communication as essential for employees high productivity said that communication with employees is of paramount importance unless employees understand what the company’s policies are our job relating to the overall remuneration policy, the prospects for achieving a motivated labour force will be greatly diminished.  However, it is not only the need of the company (management) to communicate to employees but the need for employees to communicate upward which cannot be ignored.


          According to Michael Armstrong and Helen Murtis (1980:14) enumerated some of the welfare services as follows:-

  1. Pension Scheme:- Pension are generally regarded as the most important employee welfare services they are essentially deferred pay because they are financed from contribution which build up rights to a guaranteed income for the employee or his dependents on retirement or death.  Companies should aim to provide the best pension arrangement they can afford because:-
    • There is a moral obligation to provide a reasonable level of security for employees specially these with long service .
    • A good pension scheme demonstrates that the company has the long-term interest of employees at heart.
    • A good scheme helps attract and retail high quality staff.


  1. Medical Insurance:- The principal reason for providing this benefit is that it enable employees to receive necessary medical treatment at a time convenient to themselves and the company.  Lengthening national health service waiting lists for non – emergency surgery in source parts of the country have filled employees demand for medical insurance and contributed to its growth into a major benefit provision.
  2. Personal Accident and Travel Insurance:- Claims against these polices are relatively are and their cost is normally low.  The decision to provide this benefit will depend on the nature of the ensures and the content of which employees are expected to travel and therefore, regard additional financial protection.  Cover is normally given on a twenty four hour basis for personal accidents and for all forms of business travel.  The welfare provided is normally multiple of salary usually between three to five times.  This benefits is essentially service cover provided in the pension scheme and may be necessary inducement to staff required to travel extensively and to take personal risks in the cause of business development.
  3. Permanent Disability Cover:- Unless this is catered for under the pension scheme, a separate insurance policy can be used to provide for the tragedies of long term or terminal illness.  This form of group cover aims to take over once the provisions of the sick pay scheme have been exhausted and provide an income until death or until pension benefit take over at retirement age.
  4. Sick Pay:- apart from very small organizations and those with discretionary, ad hoc arrangement a formal sick pay scheme is now normally taken for granted.  Entitlement still very by employee category but most organizations accept that financial security through periods of unavoidable illness is a basic employee need.  Improvements in the sick pay have been common in recent years, partly because they have been encouraged under various phases of income policy, and partly because, with proper safeguards on the control of absenteeism, they are not as expensive to implement as is often imagined.
  5. Additional Redundancy Provision:- The employment protection (consolidated) Act1978 provide for a baseline to protect longer-serving employees against the worst effects of redundancy.  Many unions have sought to negotiate individual company improvement on redundancy rights, areas where they have frequently been successful among more profitable employers.
  6. Service Contract:- Service agreements or contracts providing protection in addition to the legal minimum are, arguable, a welfare service.  But they have significant status connotations and their use is both expected and fairly widespread among directors, senior managers and some specialist staff.  In volatile environment or where there is a risk of take over or mergers, they can provide vital personal and financial security.


  1. Holiday:- People are generally thought to work more effectively if they are able to take at least one reasonable holiday a year.  For this reason holiday entitlement have been lengthening and a minimum of four weeks a year has become the norm.  entitlement of five weeks a year is common, with the fifth week often accrued at the rate of one day per year of service.  Recent union pressure on the extension of annual leave means that 25 working day is increasingly a basic provision.  In the fact of these longer entitlement, it is becoming rarer for directors to leave allowances different from those of the rest of the staff.
  2. Maternity and Paternity Leave:- employment protection Act provided for basic maternity leave and pay entitlement.  This greatly improves the position of working mothers.
  3. Compassionate and Other Short-Term Leave:- Most companies expect to grant a short term leave to employees facing facility bereavements or some other domestic crisis.  The need for a formal policy will depend mainly on the company’s size, but whether the policy is formal or informal the benefit value lies in employees being aware that applications for compassionate leave will be death with swiftly, fairly and sympathetic.


  1. Loan Scheme:- Formal loan scheme are common in the financial sector but comparatively rare elsewhere.  Provided that company can afford to  tie up financial resources in this way loan scheme are an attractive welfare.  Access to company loan facilities allows staff to obtain fiancé which can be difficult in negotiate and certainly more expensive from other sources, despite the tax liability incurred on the benefit.
  2. Removal and Relocation Expenses:- Like house purchase assistance, this benefit is mainly confined to newly recruited staff and those moved at company request.  The guiding principle in policy development in this are is that the individual should not be out of pocket as a result of living to move, and that there should be a limited degree of compensation for the disturbance involved.
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Other welfare services are:-   Company cars, car allowances, mileage allowances, car loan, subsidized meals, sports and facilities, day nurseries for employees children etc.


The creation of employers’ association in the 1950  was as a result of the increasing threats posed by the humanization of workers.  Little trade unions, employers “Associations protect and promote the interest of their members by acting as a pressure group.  However, legally, employers’ association are trade unions as contained in the trade union ordinance of 1938 and all such subsequent decrees.  Employers, associations, properly requisite, can declare trade disputes and lock-out employees.

According to Otobo, D (1982:98) he said that the growth of economic activities in Nigeria and in particular the shift by many employers to industrialization by the middle of 1950, helped greatly in the development of employers association.  He further said that records shows that in 1954, their were eight employers.  Association in the country, six were in the building and construction industries and they were primarily interested in regulating trade practices and in providing friendly services rather than in the conduct of collective relations with workers.

Furthermore, the birth of Nigerian employers’ consultative association (NECA) in February 1957, introduced a new, but important dimension to the role of employers’ association in industrial relations in the country.  This is because, it provides a national forum for all employers to participate in the formulation of national labour policy.  It also enhance employers participation in labour matters internationally.

NECA is a federation of employers as well as employers association and is concerned with industrial relations in industry and commerce.  The trade union decree has extended legal rights to employers’ associations interested in collective relations with workers.  Therefore, such organizations with workers have all rights and obligations that are provided for every trade union in the country.  For example, such association an declare a trace dispute and lock out their employees under the provision of trade disputes decree 1976.  in this respect,  they have every right and access to the mediation and conciliation services of the federal ministry of employment, labour and productivity as well as those of the industrial Arbitration panel (AIP) and the industrial court.  Perhaps the most important aspect of their legal position is that they can negotiate an wages and conditions of service and sign an agreement on behalf of their members.


The use of wage commission in the determination of wages was inherited from the British Colonial administration.  Wage earning employment was virtually unknown before the coming of the European.  What existed was cooperated labour system under which members were paid back in service rather than the money.

With the advent of the Europeans, the state of the economy was moieties in the nineteenth century.   In the last twenty-five years, the government has consistently interfered with the process of collective bargaining even though it continued to declare in theory, its support for and acceptance of the principle of collective bargaining.  Whenever commissions were used in determination of wages, we always have the incidence of labour unrest in all sectors of the economy.

However, the reasons for government participation in wage determination is not far fetched.  The unique role of the government as the largest single employer of labour, the guardian of social conscience and the provider of social amenities, places her in a    peculiar situation to mediate in industrial conflict.  This is to attain and maintain peace and harmony in industrial for the economic and social development of the country.

Another reason for government’s participation in industrial relations is to ensure acceptable standards, fair play and justice in industrial conflict.  It is the order to achieve these that various laws have been enacted by various governments in Nigerian.  Apart from lequislatio measures, the government has been involved in industrial relations in some other ways.  Amoy specific measures are appointments of fact – finding tribunals or commission such as the education of workers and employers control of prices and income movements and the like.

Finally, the impact of the role of government in industrial relations are often diffuse.  Government measure often follow a deterioration in industrial relation.  This has been the pattern in relation to the appointment of salary and wage review commissions, as well as the promulgation of certain decrees.  Some of such decrees includes the ones which prescribed death penalty for striking petrol tankers and that which excluded employees of the Central Bank and Nigeria Security and Mining Company from membership of trade unions.  Others are those which banned eleven trade union leaders in 1978 and imposed drastic sanctions against striking workers, their leaders and the trade union concerned in 1984 and recently, the banning and unmanning of the Academic staff union of universities (ASUU), for embanking on industries strike action.


The genesis of organization occurs when two or more people come together with the aim of achieving a common goal.  The word “organization” has two common meanings.  The first is functional group and the second one is the process of organizing.

  1. Functional Group:- When two people decided to establish a business venture and
  2. Process of Organizing:- How the work is arranged of the organization so that they will achieve their aims.

Roqers and Roers (1976:6) defined an organization as “A stable system of individuals who work together to achieve through a hierarchy of ranks and division of labour, common goals”.  This definition explains that when people come together to work for common goal they constitute themselves into levels of authority that is into hierarchies.  They also divide the work according to area of specialization so that as they work together the goals of the groups may be attained.  So the term organization refers to a group of individuals working in a mutually dependent relationship towards a common goal or goals.  An organization is structured in such a way that it has links of authority which are set up to enable workers in it to chat information and ideas through specific channels.  Every organization therefore can be seen as an information system in which messages are imported, sorted analyzed, disseminated with view to achieving specific pre-determined results.

 Impact of Employee Welfare Services, case study of Emenite Co. Ltd Emene Enugu


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