CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND ON THE SUBJECT MATTER-NITEL

          The Nigeria Telecommunication Limited (NITEL) come into existence in January 1985 as a result of the merger between the former Nigeria External Telecommunication limited (NET) and the Telecommunication, sector of the former Post Telecommunication Department (P&T), by the Federal Government.   The reason for the merger as advised by the government were the compatibility of service equipment and the streamlining of activates in both NET & P & T it was envisaged that NITEL will definitely create harmonization and complimentarily of services which up till the merger, were handled by NET (Enternal and P & T (international).

          Unlike most government parastatals, NITEL was created to render its service at a profit.   The company is not only self-financing but serves as a source of revenue per government.   It would be recalled that with NET & P & T, the parent bodies, were solely owned by the federal government hence NITEL could be described as the “Bain child” of government.   The main objective of the company is other provision of telecommunication services both internally and internally through in a combination of communication satellites, submarine cable of microwave links and the high frequency radio network.   The telecommunication services provided by NITEL include the following (both internal and external)

1)                Telephone Service

2)                Telex service

3)                Telegram service

4)                Press recreation

5)                Presses international direct delivery service (100)

6)                Voice cast

7)                Zeased Grant

8)                Photo telegrams

9)                Ship shore service

10)           Television courage the satellite.

11)           High frequency radio service.

The above service are being rendered to the public by NITEL at us head offices in Lagos and at its branches all across the nation on a 24 hours daily basic.

The important of the above service cannot be overstated in the development of our country’s economy.   It is a know fact that communication is and essential and vital means of efficiency one not only desirable but inevitable if the nation must achieve of economic objective and maintains its proper place in the comity of nations.

NITEL in its strive of producing improved and efficient telecommunication service in segmented into five zones of operations, with the national headquarters in Lagos.   The zones are:

1)                Lagos

2)                South West

3)                South East

4)                North West

5)                North East

The zones are further divided into 23 territories, all across the 21 states of the federations including the Federal Capital Territory Abuja.

The company is structured into a division for proper and effective administration.   Each division is headed by a direction or general manager, as the case may be.   There are two deputy managing director who co-ordinate the division together for achieving the company’s objectives, the company as a whole is being headed by a managing director.   At the top of the organization hierarchy, the company has a beard of director comprising the chairman, the managing director, the two deputy managing directors and heads of division and zones, as well as the company secretary I Lager Adviser.   The organization is really a complex one and was a designed to case the achievement of the company objectives.

In the area of administration the company had formulated many new polities.   One of such polities includes the recently revised fringes benefit schemes. 

1.2     STATEMENT OF PROBLEM

Problem of administration of employee welfare Administration of employee welfare programme are fraught with complex problem’s some of these problems device from the installation of the welfare programmes, other purely from inherent bureaucratic procedures.

          A few of these problems are:

1)                Accounting problem.

2)                Telex service

3)                Telegram service

4)                Press recreation

5)                Press international direct service (100)

6)                Voice cast

7)                Leased telegrams

8)                Photo telegrams

9)                Ship shore service

10)           Television coverage via satellite

11)           High frequency video service

The above service are being rendered to the public by NITEL at its head office in Lagos and its branches all across the nation on a 24 hours daily basic.

The importance of the above service cannot be overstated in the development of our company’s economy.   It is a known fact communication in an essential and vital means of development in terms of peace and war.   Its effectiveness and efficiency are not only disabling, but inevitable of the nation must achieve its economic objective and materials its proper place in the country of nations.

NITEL in its strike of providing improved and efficient telecommunication services is segmented into five lines of operations with the national headquarters in Lagos.  The lines are: 

6)                Lagos

7)                South West

8)                South East

9)                North West

10)           North East

1.3     OBJECTIVE OF THE STUDY

1.       Accounting problem:

          The curse of accounting problem facing managers is the fact that very few companies maintain a break-down of the costs of these fringe benefits to reflect.

a)                 Cost per employee per year

b)                Percentage of payroll made up of fringe benefit costs.

c)                 Cost per employee per hour-actual productive hour worked.

In companies where any regular fringe account at all is attempt, it is likely to be a terms of total (naira) cost of fringe benefits and total schedule hours to work.

2.       Eligibility Problem:

          The issue of those who are eligible for fringe benefits; has a profound effect on the cost of the programmes.   The more liberal the eligibility rules the higher the cost.   For example, some companies do not allow their new employees to enjoy certain benefits until their precautionary period is over.   Sometimes, some companies do restrict the eligibility of employees for a particular benefit plant a specified categories or levels of employees.

3.       Employee financing:

          Should employee make any contribution to the expense of the firm’s benefits programmes? Most union and employees are strongly opposed to “contributory” programmes.   Since many employees feel that they have earned the benefits that they are being grated, they cannot understand why they should pay part of the cost any more from their own wages.

4.       Financial Problem:

          Many companies introduce some benefits plan when it is financially sound and tend to run into trouble when they can no longer support the plan financially.

          Management must therefore realize that when it introduces a benefit plan it premises some part of the firm’s economic resources.   Even where there are no legal obligation to do so, employee often feel that management has made a moral commitment to continue the programme, the management should face the problem of having to make through, realistic evaluation of its cost, both short-term and long-term.   But the management finds itself incapable of continuing a programme; it would bring the company’s plight before the union so that renegotiations would take place for trading of the programme.

5.       Other Problems:

          There are so many other problems such as difficulty in making accurate predictions of the cost of benefit programmes, as they have the tendency to grow more expensive over time; freezing the mobility of labour among rank and file workers; change in the national economy etc.

1.4     SIGNIFICANCE OF THE STUDY

1.                 Safety programmes and workman’s compensation most companies have some type of safety programmer to educate workers, such as posters, warning signs, safety talks, and other medial by which employees are given instructions in safe work methods and are urged to follow them; some companies also conduct safety education courses that are aimed at reducing the occurrence of accidents at work place is compensated the benefit are standardized so as to match any degree of accident.   Hence management seeks to avoid the necessity for court action.   These they do in compliance to workman’s compensation Act of 1958.

2.                 Health Insurance:     Accidents and industrial disease growing out of the job are compassable various forms of health and accident insurance are provided, some completely financed by the employer while other are shared with the employee.   The following type of insurance are provided by various firms.

a)                 Hospitalization

b)                Surgical expense

c)                 Vision care

d)                Dental care etc.

3.                 Medical Services: There is increasing interest among many large companies in provided medical services for their employee, other companies undertake the service of one or more clinics to render the medical service for their employees and their dependents.

1.5     SCOPE OF THE STUDY

1.       Old age and Retirement:

          A major source of worker concern about economic security is the possibility of dependency in old age.   Involuntary retirement, disability or death may create serious economic problems for employee or their dependents.   Current policy has developed public; union and individual firm programmes to meet these problems. Public programmes now provide both old age pensions and retirement programmes.

2.       Company retirement programmes:

          A formal company retirement programme can help to facilitate the various adjustments that may be required within that company and on the part of the employee when their retire.   Many companies offer their employee a huge sum of money, known as gratuity, on retirement. This is a sort of compensation to the employee for successful years spent with the organization in Nigeria.   The age of retirement range is from 55 years to 60 years or more depending on the company’s policy.

3.       Pension Plans

          Many companies undertake pension plans for their employee as a means of insuring them when on retirement.  Most of the plans are financed by employee contributions, but some are Jointly financed by the employer and the employee.   Benefits are administered by insurance firms or by trustees of non-insured plans.  Employees under the plans are paid a specified amount on monthly basis after retirement.  This is common in the public sector in Nigeria.

          The basis provision of the scheme involves payment of a specified amount to the employee after retirement on monthly basis from the contribution.   In some organization, it is paid in bulk to the employee on retirement.  Other provision includes death in service benefits, gratuity, etc. it is universal and covers all staff in respective of their status.

Nature and Scope

          Although the term ‘employee welfare’ in itself implied a voluntary provision on the part of the employer.   The administration of the state benefit scheme and certain legal requirement concerning other benefit and service purpose statutory obligation up on the employer. 

          In addition to such obligation, however, a large number of companies provide employee services for they used to be they bits and pieces of goodies that occasionally feel from the high table of paternalistic employers, hence they are know to be fringe (ie managerial) benefit of recent, the package has grown hydra headed in from and monstrous in relation size, and in apprehension that is beginning to be called the “hidden pay roll”.

          Manager and employers do not play dominant role in administering all benefit and sources and may not do little more than to comply with prescribed public regulations so, public policy play a lending role in explaining several important types of fringe provision. It has long emphasized the advancement of economic security and qualitative benefit such as public pensions, paid vacations, industrial, ill health and accident.

          Employee-union on the other hand has supported all of these public intentions and has in addition sought paid sick league, health and welfare programme increased payment to workers, etc the union have pursued those benefit with Nigeria for the best interest of their members.   Even through managers and employers may sometime appears as opposed to all fringes they have invested and advertised any of their own.   Those is in recognition of the fact that many benefit offers possibilities of implementing their polices to improve employee morale, to encourage order absenteeism, and to assist employee in identifying their personal goals and interest with those of the organization.   Hence, employees have come to regard fringe benefits as production which are charge along with other firms of remuneration.

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