UGANDA COLLEGE OF COMMERCE, TORORO

THE IMPACT OF FINANCIAL PLANNING ON EMPLOYEE

PERFORMANCE IN AN ORGANIZATION

CASE STUDY: BUKWO TOWN COUNCIL

CHELANGAT GIDEON

UBB058/2018/B/D/A/049

A RESEARCH REPORT SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENT FOR THE AWARD OF A DIPLOMA IN

BUSINESS STUDIES OF UGANDA BUSINESS AND

TECHNICAL EXAMINATION BOARD

(UBTEB)

DECEMBER, 2020
 DECLARATION

I CHELANGAT GIDEON declare to the best of my knowledge, that the report is my original

work effort and sacrifice. It has not been presented to any higher institution of learning for the

award of a degree, diploma, certificate or any other academic qualification

Signature: …………………………………….

CHELANGAT GIDEON

(Student)

Date: ………………………………………..

ii
 APPROVAL

This is to certify that this research report by CHELANGAT GIDEON under the topic, “the

impact of financial planning on employee performance in an organization a case study of Bukwo

Town Council has been under my supervision and is now ready for submission to Uganda

Business and Technical Examination Board (UBETEB) with my approval.

Signature: ……………………………………

Mr. MUSUNGU JAMES

(Supervisor)

Date: ……………………………………

iii
 DEDICATION

I dedicate this research report to my beloved parents Mr. Tiyoy Benison and Mrs. Judith Tiyoy

who have been so supportive throughout my research activity and guiding me to fulfill my goals.

Thank you so much for your courageous words and your prayers taught me to live a blessed life.

iv
 ACKNOWLEDGEMENT

I extend a vote of thanks to a number of people who unreservedly contributed towards the

accomplishment of this research work.

I would also like to acknowledge the assistance and role played by the following personalities to

the successful completion of this study. I cannot say exactly how grateful I am to my supervisor

Mr. Musungu James for his guidance in this study was beyond measure. Thank you for providing

with professional advice, encouragement and your time to my success.

In the same way I would like to thank the management of Bukwo Town Council for providing

me with all information I needed for this research work through answering all the questionnaires

honestly, surly without their input, the study would have not been completed.

I appreciate my parents Mr. Tiyoy and Mrs. Judith Tiyoy for sacrificing the little they had in

thick and thin and invested in my education not forgetting my brother Chebet Thomas, Chebet

and sister Chebet Ann for the courage and support when studying. I also appreciate my friends

Kiprop Victor, Mutai Joshua, Kaye Joel for guiding and encouraging when doing my research

study.

Thank you for looking after me and enabling me to acquire a lifelong investment.

TABLE OF CONTENT

v
DECLARATION.............................................................................................................................ii
APPROVAL...................................................................................................................................iii
DEDICATION................................................................................................................................iv
ACKNOWLEDGEMENT...............................................................................................................v
TABLE OF CONTENT..................................................................................................................vi
LIST OF TABLES..........................................................................................................................ix
LIST OF ABBREVIATIONS/ACRONYMS..................................................................................x
ABSTRACT...................................................................................................................................xi
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.0 Introduction................................................................................................................................1
1.1 Background of the study............................................................................................................1
1.2 Statement of the Problem...........................................................................................................3
1.3 Purpose of the study...................................................................................................................3
1.4 Objectives of the study..............................................................................................................3
1.5 Research Questions....................................................................................................................3
1.6 Scope of the study......................................................................................................................3
1.6.1 Geographical scope.................................................................................................................3
1.6.2 Time Scope.............................................................................................................................4
1.6.3 Subject scope..........................................................................................................................4
1.7 Significance of the Study...........................................................................................................4
CHAPTER TWO.............................................................................................................................5
LITERATURE REVIEW................................................................................................................5
2.0 Introduction................................................................................................................................5
2.1 Elements of financial planning in organizations.......................................................................5
2.1.1 Effects of Financial Planning..................................................................................................6
2.2 Measures of Employee Performance.........................................................................................7
2.3 The Role of Financial Planning on Employee Performance...................................................10
2.4 Conclusion...............................................................................................................................11
CHAPTER THREE.......................................................................................................................12
METHODOLOGY........................................................................................................................12

vi
3.0 Introduction..............................................................................................................................12
3.1 Research design.......................................................................................................................12
3.2 Study population......................................................................................................................12
3.3 Sample size..............................................................................................................................13
3.4 Sample design..........................................................................................................................13
3.5 Data sources.............................................................................................................................13
3.5.1 Primary data source..............................................................................................................13
3.5.2 Secondary data sources.........................................................................................................14
3.6 Data collection instruments.....................................................................................................14
3.6.1 Questionnaire........................................................................................................................14
3.6.2 Documentary method............................................................................................................14
3.6.3 Interview method..................................................................................................................15
3.7 Data collection procedure........................................................................................................15
3.8 Data analysis............................................................................................................................15
CHAPTER FOUR.........................................................................................................................17
DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF THE FINDINGS........17
4.0 Introduction..............................................................................................................................17
4.1 Characteristics of respondents.................................................................................................17
4.2 Financial Planning...................................................................................................................20
4.4 Examining the impact of financial planning on employee performance of Bukwo Town
Council...........................................................................................................................................24
CHAPTER FIVE...........................................................................................................................26
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS OF THE STUDY
.......................................................................................................................................................26
5.0 Introduction..............................................................................................................................26
5.1 Summary of the findings.........................................................................................................26
5.1.1 Summary of findings on financial planning.........................................................................26
5.1.2 Summary of findings on employee performance..................................................................26
5.1.3 Relationship on the role of financial planning on employee performance...........................26
5.2 Conclusion...............................................................................................................................27
5.3 Recommendations....................................................................................................................27

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5.4 Limitations of the study...........................................................................................................28
5.5 Areas of further study..............................................................................................................28
REFERENCES..............................................................................................................................29
Appendix A: Questionnaire...........................................................................................................30
Appendix B: Time Frame..............................................................................................................34
Appendix C: Research Budget.......................................................................................................35

LIST OF TABLES

viii
Table 4.1.1: Showed age distribution of respondents by age........................................................17
Table 4.1.2: Showed gender of respondents..................................................................................18
Table 4.1.3: Showed the marital status of the respondents............................................................18
Table 4.1.4: Showing the academic qualification of the respondents...........................................19
Table 4.1.5: Showed how long the respondents had worked in the organization.........................19

Table 4.2.1: Showed the current level of financial planning.........................................................20

Table 4.2.2: showed response on whether Bukwo Town Council measures its financial planning
.......................................................................................................................................................20
Table 4.2.3: showed whether liquidity is used as a measure of financial planning in the firm.....21
Table 4.2.4: Showed response on profitability as a measure of financial planning......................21
Table 4.2.5: Showed response on repayment capacity a measure of financial planning...............22
Table 4.2.6: Showed response on financial efficiency as a measure of financial planning in the
firm................................................................................................................................................22
Table 4.2.7: Showed whether capacity to assure risk is a measure of financial planning.............23
Table 4.2. 8: Showed response on solvency as a measure of financial planning..........................23

Table 4.3.1: Showed response on the level of agreement regarding the impact of financial
planning on the employee of Bukwo Town Council.....................................................................24

Table 4.4.1: Karl Pearson’s product moment correlation co-efficient..........................................25

LIST OF ABBREVIATIONS/ACRONYMS

UBTEB……………………………..Uganda Business and Technical Examination Board

ix
UCCT………………………………Uganda College of Commerce, Tororo

BTC…………………………….…..Bukwo Town Council

ABSTRACT

The research topic was on the impact of financial planning on employee performance of Bukwo

Town Council. The report was guided by the following objectives; to determine the elements of

x
financial planning in organizations, to establish the measures of employee performance in

organizations and to investigate the role of financial planning on the employee performance

The researcher used cross sectional survey in the collection of the relevant data to be included in

this study. This was a convenient method for the topic “the impact of financial planning and

employee performance. The research population was 65 which covered the managers, employees

and on the staff of the accounting department of Bukwo Town Council – Uganda. Due to

inadequate resources, the researcher shall limit the study to 55 respondents. Data was analyzed

using Karl Pearson’s product moment of correlations coefficient and interpreted using ratios and

percentages. According to Robert et al (1990), the formulation of analysis (Karl Pearson’s

coefficient of correlation), is as follows;

r= n (∑xy) - [(∑x)(∑y)]
√ [(n∑x2-(∑x) 2) (n∑y2-(∑y) 2)]
Where; x = independent variable
y = dependent variable
n= number of pairs of observation / findings
r = Correlation coefficient
From the information, it can be observed that there is a moderate positive relationship between

financial planning and employee performance of Bukwo Town Council with a correlation

coefficient of 0.625. The firm needs to institutes an internal audit to appraise and check the

strength of financial planning within. This is so because financial planning is prone to fraud by

dishonest managers especially when dealing with physical cash.

xi
 CHAPTER ONE

INTRODUCTION

1.0 Introduction

In this chapter the researcher presented the background of the Study, statement of the problem,

objectives of the study, research questions, scope of the study, significance of the study and

definition of operating terms used.

1.1 Background of the study

Financial performance is a process which is concerned with deciding who shall do the work

(Donald, Thomas and Rebecca, 2001), generally, financial performance involves establishment

of organizational objectives and policies. Identification of alternative courses of action and

programs and selecting the best course of action and programmes.

Financial performance helps to anticipate problems and information needs; helps to identify

solutions without trial and error learning; manage resource supply and demand, identify when to

focus effort and attention in different area, facilitating the identification of appropriate

sequences; helps to make peoples expectation of the timing of activities more concrete

(Willougby and Julig, 2001). Financial performance helps to turn broad goals into action steps

and helps to create timetable. For how long tasks should take, to transfer founder is vision to

those acting on it, to correct deviation from objectives (Kenneth, 2010).

Performance is the competency of an organization to transform the resources within the firm in

an efficient and effective manner to achieve organizational goals (Daft, 1997). Organizational

goals vary depending on the purpose for which they are established. Business organizations have

profit, growth and survival as the main goals. According to Dyer and Reeves (1995) definition,

1
financial performance consists of financial outcomes (return on invested capital or return on

assets and stock value of shareholder returns).

Drago (1990), argued that the common financial indicators include; sales growth, return on

investment (ROI), Return on sales, Return on Equity (ROE) and earn per share. However, the

popular ratios that measure organizational performance can be summarized as profitability and

growth; Return on Asset (ROA), return on investment (ROI), Return on Equity (ROE), Return

on Sales (ROS), Revenue Growth, Market shares, Stock Price, Sales Growth, Liability and

Operational Efficiency. In another research by Thomas and Ramaswamy (1996) return on

average assets (ROA) and returns on Equity (ROE) were used as financial measures in the

banking industry.

Accounting to Dyer and Reeve (1995), out come measurements included productivity, quality

and service. Instead of productivity indicators, Delany and Huselid (1996) chose perceptual

measures of the financial performance such as product quality, customer satisfaction and new

product development.

Small and Medium Scale Enterprise are facing more challenges times, thus government

executives are tasked with more strategic responsibilities of financial planning in the face

increasing costs of offering services and filing tax revenues thus increasing the difficulty and

importance of financial planning (Denhardt and Denhard , 2006),. Meanwhile changing budget

promotes at all government levels measures the realignment of funding for small and medium

Scale enterprises programs. When organizations are in the business of utilizing other people’s

money to provide for the community well being, public administrators have a responsibility to

best utilize the scarce resources available in serving the unending needs of society, scarcity in

service necessitates proper financial planning for public organizations (Finkler, 2005).

2
1.2 Statement of the Problem

Bukwo Town Council in order to enhance the practice of financial performance introduced

results-oriented budgeting systems in its attempt to finance ‘output’ instead of input and process.

The aim was not only to control expenditure but to link resources allocation (Budget) to

performance and to improve efficiency including the use of resources (Fiola. 20017). However, it

has failed to place premium on the aspect of financial performance and this has led to overruns

on budgets, non achievement of set objectives and eventually poor financial performance hence

continued dependence on the external sources for even their current expenditure.

1.3 Purpose of the study

The purpose of the study was to investigate the impact of financial planning on employee

performance of organizations.

1.4 Objectives of the study

i To determine the elements of financial planning in organizations

ii To establish the measures of employee performance in organizations
iii To investigate the role of financial planning on the employee performance

1.5 Research Questions

i What are the elements of financial planning?

ii What are the measures of employee performance in organizations?
iii What is the role of financial planning on the employee performance?

1.6 Scope of the study

1.6.1 Geographical scope

The study was carried out at Bukwo Town Council, Bukwo District, Uganda

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1.6.2 Time Scope

The study covered the period ranging from 2015 – 2018. This period was selected because it

enabled the research to understand the trend of relationship between the variables under study.

1.6.3 Subject scope

The researcher carried out investigations form management staff, heads of departments, selected

employees and clients

1.7 Significance of the Study

The study helped the research to gain in data collection and research writing

The findings of the study evoked product manufactures to further realize the impact of financial

planning on employee of Bukwo Town Council

It was significant as it was used by as appoint of reference by researcher as they confront

different problems in their research process

The study added on the volume of literature kept in the library of Uganda Colege of Commerce –

Tororo

The research was useful to Bukwo Town Council since the research collects more detailed

information about the impact of financial planning

The study helped the researcher to attain a Diploma in Business Studies (UDBS) since it is one

of the Requirements for the award to Uganda Business and Technical Examination Board

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 CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

In this chapter the research presents related materials from different studies carried out in the

past and in different areas and also described the theories examined in the study about financial

planning and employee performance of organizations

2.1 Elements of financial planning in organizations

Financial planning is an integral part of overall management. It is concerned with the duties of

financial managers in the business firms. The term financial decision making, harmonizing

individual motives and enterprises goals, thus financial planning is mainly concerned with

effective funds management in the business, financial planning is one of the important parts of

overall management, which is directly related with various functional departments like

personnel, marketing and production and covers a wide area with multi dimensional approaches.

Is we accept that consumers make “investment mistakes”, the next challenges is to apply theory

to financial planning in order to change consumer behavior current research attempts to apply

theories from various fields to model the impact of financial planning. It often makes parallels

between financial and other behaviors, such as health or risk taking behaviors for instance a

growing body of literature looks at the process of changing financial practices within the context

of the Trans theoretical model of change (Lown. 2007; Stocky and Seilling, 204).

Trans theoretical model of change provide insight into low practitioners might help individuals

change their financial practices. However, their applicability is limited by differences between

the field form which they originate and the field of personal finance. It included, the theories

5
need to be modified to incorporate eternal factors (e.g., Exogenous financial Shocks, Limited

access to financial service and Changes in life Circumstance) that may prevent individuals from

being able to change particular financial practices. Can we say the same for financial practices;

what some would consider positive financial behavior has been deemed harmful to financial

health by others (Kotilikoff, 2006).

2.1.1 Effects of Financial Planning

To access the effect of financial planning in motivating behavior change, researchers have

focused on defining and quantifying financial success. Their efforts have been tied to program

evaluation research, which models and measures the impact of financial planning on consumer

behavior (Lyons, 2005; Lyons et al, 2006). It is vital for researchers to know whether financial

planning indeed changes consumer’s financial practices of course, reality lacks the controls or a

laboratory. Many other factors influences financial planning, which impair researcher ability to

isolates the impact of financial planning even vigorous studied that use control groups and

longitudinal analysis have struggled with this issues. At best most researchers are able to show

“anticipated” or “Planned” changes in financial behavior (Lyons 2005, Lyons et al, 2006) while

there is some evidence to show that planned financial behavior (Muske and Winter, 2004), more

studies are needed to help develop a reliable predictor of actual behavior change perhaps some to

a credit scoring model.

Effective procurement and efficient use of finance leads to proper utilization of the finance by

the business concern (Yase and Amir, 1996), hence it is the essential part of the management,

and hence, the financial manger must determine the basic objectives of the financial

management. Financial management has been observed to bring about profit maximization as

well as wealth maximization in the firms. Among Bukwo Town Council, financial management

6
is not warrant practiced due to manager and lack of financial management skills by the business

owners (Masure & Smit, 2000) managerial experience and financial management, seems vital in

determining the success or failure of the firms.

2.2 Measures of Employee Performance

Most managers aim at business analyzing the activities of Bukwo Town Council form a financial

stand point and provide useful information needed to make good management decision. By

themselves, the financial measures discussed don’t provide answers; they need to be reviewed in

relations to each other and to other firm and non-firm activities, (Holmes and Kent, 1991). It is

not possible to control or predict all of the factors that influence the final outcome of any firm

decision. Nor is it possible to have available all of the information that would be ideal. But

decision making can be improved through using available information and through effective

financial planning and analysis Crane (2010) claims that the recommended measures for

financial analysis are grouped in to five broad categories; Liquidity, Solvency, Profitability,

repayment capacity and financial efficiency. Bukwo Town Council measures their performance

basing on the following aspects;

Liquidity

Liquidity measures the ability of the business to meet the financial obligations as they come due,

without disrupting the normal, on-going operations of the business. Liquidity can be analysis

both structurally ad operationally. Structural liquidity refers to balance sheet measures of the

relationship between assets and liabilities and operational liquidity refers to cash law measures.

A frequent cost of liquidity problems occurs when debt assets are converted into cash. Two

recommended measures of liquidity are the current ratio and working capital. The current ratio

measures the relationship between total current assets and total current liabilities and is a relative

7
measure rather, than an absolute monetary measure. The higher, the ratio, and the more liquid the

business considered to be. Working capital is a measure of the among of funds available to

purchase inputs and inventory items after the sale of current assets is absolute monetary units;

therefore determining adequate working capital is relational to the size of the business operation.

Solvency

Solvency measures the amount borrowed capital used by the business relative to the amount of

owners equity capital invested in the business in other words, solvency measures, provide an

indication of the business ability to repay all indebtedness it all the assets were sold. Solvency

measures also provide an indication of the business ability to withstand risks by providing

information about business ability to continue operating after major financial adversity. Unlike

liquidity, solvency is concerned with long term as well as short term assets and liabilities.

Solvency measures evaluate what will happen if all assets were paid. As with working capital,

adequacy of equity depends on business, making comparisons difficult without using ratios for

Bukwo Town Council.

Profitability

Profitability measures extend to which a business generates a profit from the factors of

production, labour, management and capital. Profitability analysis focuses on the relationship

between revenues and expenses and on the level of profits relative to the size of investment in

the business. Four useful measures of business profitability are the rate of return on asset (ROA),

the rate of return on equity (ROE), operating profits margin and net income. The ROA measures

the return to all assets and is often used as an overall index profitability, and the higher the value,

the more profitability the business, the ROE measures the rate of return on the owners equity

employed in business
8
Financial efficiency

Financial efficiency measures the degree of efficiency in using labour, management and capital.

Efficiency analysis deals with relationships between inputs and outputs, because inputs can be

measured in both physical and financial terms, a large number of efficiency measure in addition

to financial measures are usually possible. Five measures of financial efficiency are the asset,

turnover ratio, operating expense ratio, depreciation expense ratio, interest expense ratio and net

income from operations ratio.

Available Capital and Capacity to attract capital

Firms need available capital and capacity to attract capital in order to operate, to enter into new

ventures or to expand the firm. A property prepared balance sheet report the amount of cash and

other liquid assets available to meet cash needs. However most firms have access to more cash

than what they currently possess or release. Nearly all firm businesses can borrow additional

cash and the capacity to borrow (Often call a credit reserve) is an asset – simply, ability to attract

investors is an asset that deserves to be recognized. The capacity to acquire additional cash

allows the firm business to undertake new or expanded activities.

Capacity to assume risk

The opportunity for any business to earn a profit requires assuming some risk. Although not

described as a business asset, the ability and willingness to assume risk is critical. Types of risk

business’s encounter include production, marketing, financial, legal and human resource. A firm

will likely defer in its capacity to assume each type of risk is to describe it as a chain with five

links. The first link is not earnings as a person of value of the firm production, which shows the

firms capacity to absorb losses resulting from reduction in yields or price. The second link is the

9
working capital of the firm’s business. This indicated the business has sufficient cash flow (un-

current assets) to cover operating looses that occurs in the first link. The third link is the current

debt repayment capacity which shows the firm’s ability to rely on carry over operating loan to

finance operating losses. The fourth link is owner’s equity which is the last link collateral which

is the legal right to the owner’s equity (Crane, 2010).

2.3 The Role of Financial Planning on Employee Performance

The external and internal factors provide managers with the foundation to create a budget which

works in tandem with financing from investors or banks. Many small businesses need some

external financing for growing operations because small business may not have strong financial

history financial planning and budgeting helps investors or banks thoroughly reviews the

business.

While organizations that do not generate a return on assets in excess of their cost of capital are in

danger of financial failure, (Hossler, 2000; Langabeer, 1998) numerous areas of financial

performance often used to monitor of financial performance is return on invested capital (ROI-

Operating marginal / Invested capital) also identified by Hatch (1999), which is acquired through

the financial planning process. Beith and Goldreich (2000) reported in their survey of 104 “Blue

Chip” hospitals that those with credit ratings of hospital rating or better that the primary

determinants of AA status continue to be balance sheet strength and positive earnings. Crossman

(2000) indicates that credit ratings depend on an overall ability to pay creditors, which has

critical implications for program financial planning efforts. A company can monitor its progress

against its budgets for example, on a quarterly basis, providing it with a potent control

mechanism. Frequent checks enable mangers to spot early in the process whether some expenses

are getting out of controls in a particular geographical region, budgets should not be set in stone

10
and need to be flexible to reacts to special item, ranging from a spike in borrowing costs to non-

recurring expenses to a change in regulation that might cut off a revenue stream, management

any need to update budgets and financial plans regularly to account for unanticipated events.

2.4 Conclusion

Several studies have been reviewed which studied financial planning such as (Levin, 2001;

Tibergien and Palaveev, 2001; Peatey, 2007; Veresa, 2003; Scholp, 2004; Leyes, 2006). There is

review on the effects of the review on the indicators for measuring financial performance.

However, this study has not addressed the effects of financial performance on Bukwo Town

Council to the best. Thus gap in knowledge exists in literature on the relationship between

financial planning and employee performance of Bukwo Town Council.

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 CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter contains research design, population of the study, sample size, sample techniques,

sample frame, area of the study, and sources of data, research procedure, research instruments,

and data analysis

3.1 Research design

The researcher used cross sectional survey in the collection of the relevant data to be included in

this study. This was a convenient method for the topic “the impact of financial planning and

employee performance.

Oso & Onen (2005), noted that cross section method is convenient because it is able to make the

researcher understand the population form a part of it. A description approach will also be

adopted to facilitate complementary understanding of views opinions and perceptions of

interviewed respondents.

3.2 Study population

The research population was 65 which covered the managers, employees and on the staff of the

accounting department of Bukwo Town Council – Uganda. The above population may be chosen

because they are expected to have enough and efficient knowledge about accountability

department in Bukwo Tow Council. They were required to provide required data for the research

study.

12
3.3 Sample size

Due to inadequate resources, the researcher shall limit the study to 55 respondents. It can be

illustrated as shown below;

Table 1: Showing the response rate of the respondents

Respondents No. of sample Percentage %

Management staff 10 18
Department leads 10 18
Employees 20 36
Clients / customers 15 28
Total 55 100
Source: Primary data

3.4 Sample design

Stratified sampling design was used to select the managers, policy makers and opinion leaders.

Simple random sampling deign was used to select customer because it gives then equal

opportunity of being selected from the total population.

3.5 Data sources

The researcher used both primary and secondary data sources to obtain data required information

relating to the topic of study.

3.5.1 Primary data source

This is a data source that requires the researcher to go to the actual field and obtain the relevant

data for the research study from the respondents. It was chosen because it provides first hand

information, it normally free from bias, oral accounts data is obtained.

13
3.5.2 Secondary data sources

This is where the researcher obtained information by reviewing the publication of the different

authors. It is also called test research and the data obtained relates to the topic uder study. It was

acquired from text books, magazines, journals, newspapers, and internet among others. This

source is preferred because it is reasonably cheap, faster o be used and convenient to the

researcher.

3.6 Data collection instruments

In this process of collecting data required for the study, the researcher will have to use some

instruments and apply relevant methods of data collection which will include,

3.6.1 Questionnaire

The questionnaires were both open and close ended designed in appropriate likert scales to solicit

the opinions of the respondents. Some sections of the questionnaires were open ended likert scale

was preferred because they provide standardized set of responses option that preset varying

degree of agreement. The researcher set questions keeping in mind several issues. These

included specifying information needed, writing questions with appropriate responses format by

use of familiar languages to all subjects and pre-testing questionnaires. This method gave

respondents humble time to do enough reliable and valid information needed by the researcher as

noted by (Ghosh, 2000).

3.6.2 Documentary method

The researcher got information through documentary analysis. He/she used library books,

newspapers, manual, verbal expressions, on radios, relevant authorities and television

14
announcements, existing researcher various authors to get the required data for the study. Also as

a source of literature review to the researcher.

3.6.3 Interview method

This was face to face conversation between the respondents and the researcher. This method was

used as it gives immediate response to questions passed thus a fst method of data collections.

The researcher got a chance of asking questions to management regarding the background of

Bukwo Town Council Financial planning problems and other problems particularly in

accounting department.

3.7 Data collection procedure

The researcher obtained an introductory letter from the college registrar’s office which was

presented to Bukwo Town Council seeking for permission to carry research in the organizations.

The research designed relevant data collections instruments to use like observations,

questionnaires and documentary and interview methods. Through the questionnaires, the

researcher direct questions to the financial manager, management general and working staff of

Bukwo Town Council. This helped the researcher to collect literature write up a proposal

according to the background information from the study approval to be submitted to Uganda

Business and Technical Examination Board (UBTEB) for examination purpose

3.8 Data analysis

Data was analyzed using Karl Pearsons product moment of correlations coefficient and

interpreted using ratios and percentages. According to Robert et al (1990), the formulation of

analysis (Karl Pearson’s coefficient of correlation), is as follows;

15
r= n (∑xy) - [(∑x)(∑y)]
√ [(n∑x2-(∑x) 2) (n∑y2-(∑y) 2)]

Where; x = independent variable

y = dependent variable

n= number of pairs of observation / findings

r = Correlation coefficient

The data collected was analyzed using simple frequency tables that enabled the researcher to

draws meaningful conclusion as thereby made recommendations to the study.

16
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF THE FINDINGS

4.0 Introduction

This chapter brings out the findings of the researcher when carrying out this research. The study

was under the topic of “the impact of financial planning on the employee performance of Bukwo

Town Council”.

4.1 Characteristics of respondents

The respondents bio data was looked at inform of age distribution, level of education, gender,

marital status and the period them, and have stayed in the organization.

4.1.1 Age distribution of respondents

In order to determine the age group that had accepted to take part in the study, the respondents

were asked to states their age.

Table 4.1.1: Showed age distribution of respondents by age

Age (years) Frequency Percentage Cumulative frequency

Below 18 0 0 0
19 – 25 10 18 18
26 – 40 13 24 42
Above 41 years 32 58 100
Total 55 100
Source: Primary data

From the table above, no respondents was below 18 years, 10 were between 19-25 years, 13

respondents were between 26-40 years while 32 were above 41 years and thus taking the highest

percentage of 58%. This meant that data was mostly obtained from respondents who had enough

knowledge about the variable under study.

17
4.1.2 Findings on the gender of respondents
Table 4.1.2: Showed gender of respondents

Gender Frequency Percentage % Cumulative frequency

Female 30 55 55
Male 25 45 100
Total 55 100
Source; Primary data

From the table above, majority of the respondents were female represented by 55% and males

only constituted 45%. This indicated that both males and females were covered in the study.

4.1.3 Findings on the marital status of the respondents.

Table 4.1.3: Showed the marital status of the respondents

Status Frequency Percentage % Cumulative frequency

Married 37 67 67
Single 18 33 100
Total 55 100
Source; primary data

From the table above, 67% of the respondents were married while 33% were single. Therefore, it

is evident from the table that majority of the respondents were married hence being responsible

and thus being the right respondents to participate in the study.

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4.1.4 Findings on the academic qualification of the respondents.
Table 4.1.4: Showing the academic qualification of the respondents

Qualification Frequency Percentage % Cumulative frequency

Masters 5 9 9
Degree 25 45 54
Diploma 15 27 81
Certificate 10 18 100
Total 55 100
Sources; Primary data

From the above, majority of the respondents (45%) were degree holders, 27% were diploma

holders, 18% were certificate holders while 9% were masters holders. This implied that the

organization employees were mostly degree graduates. These made data more reliable because it

was obtained from learned respondents who had enough knowledge about the respondents under

study.

4.1.5 Findings on how the respondents had worked for the organization
Table 4.1.5: Showed how long the respondents had worked in the organization

Period Frequency Percentage % Cumulative frequency

Less than 1 year 5 9 9
2-5 years 20 37 46
Above 5 years 30 54 100
Total 55 100
Sources; Primary data

From the table 4.1.5, 09% of the respondents had worked for less than 1 year, 37% of the

respondents had worked 2-5 years and 54% have worked for 5 years above. This implied that

most of data was collected from respondents who had stayed from so long in the business and

19
this had enough knowledge about the topic under study. This made the study findings more

realistic and reliable.

4.2 Financial Planning

4.2.1 Findings on the indicators of financial planning of the organization

Table 4.2.1: Showed the current level of financial planning

Responses Frequency Percentage % Cumulative frequency

High 30 55 55
Moderate 15 27 82
Low 10 18 100
Total 55 100
Sources; primary data

Basing on the results from table 4.2.1, it indicated that the current financial planning of Bukwo

Town Council is high. This is because 55% of the respondents said its high, 27% said its

moderated and only 18% said that it is low.

4.2.2 Findings on whether Bukwo Town Council measures its financial planning
Table 4.2.2: showed response on whether Bukwo Town Council measures its financial
planning

Responses Frequency Percentage % Cumulative frequency

Yes 35 64 64
No 15 27 91
Not sure 5 9 100
Total 55 100
Sources; primary data

Results from table 4.2.2 indicated that the firm measures its financial planning. This is based on

the results that 64% of the respondents said yes, 27% said no and 9% were not sure.

20
4.2.3 Findings on liquidity as a measure of financial planning

Table 4.2.3: showed whether liquidity is used as a measure of financial planning in the firm

Responses Frequency Percentage % Cumulative frequency

Strongly agree 40 73 73
Agree 10 18 91
Not sure 5 9 100
Disagree 0 0 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

From table 4.2.3, liquidity is used as a measure of financial planning in the firm simply because

91% of the respondents agreed, 9% were not sure and none disagreed.

4.2.4 Findings on Profitability as a measure of financial planning

Table 4.2.4: Showed response on profitability as a measure of financial planning

Responses Frequency Percentage % Cumulative frequency

Strongly agree 35 64 64
Agree 15 27 9
Not sure 5 9 100
Disagree 0 0 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

Table 4.2.4 clearly indicated that profitability is a measure of financial planning in the firms.

This is due to the response, 91% agreed and only 9% were not sure and none disagreed that it s

used as a measure of financial planning.

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4.2.5 Findings on repayment capacity as a measure of financial planning
Table 4.2.5: Showed response on repayment capacity a measure of financial planning

Responses Frequency Percentage % Cumulative frequency

Strongly agree 50 90 90
Agree 5 10 100
Not sure 0 0 100
Disagree 0 0 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

It is evident from table 4.2.5 that repayment capacity is used as a measure of financial planning

in the firm. This is because 100% of the respondents. There was no any disagreement as far as

this measure is concerned.

4.2.6 Findings on financial efficiency as a measure of financial planning

Table 4.2.6: Showed response on financial efficiency as a measure of financial planning in

the firm

Responses Frequency Percentage % Cumulative frequency

Strongly agree 35 64 64
Agree 15 27 91
Not sure 3 5 96
Disagree 2 4 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

From table 4.2.6, financial efficiency is used as a measure of financial planning. This was backed

up by the response that 91% agreed and only 4% disagreed.

22
4.2.7 Findings on capacity to assure risk as a measure of financial planning

Table 4.2.7: Showed whether capacity to assure risk is a measure of financial planning

Responses Frequency Percentage % Cumulative frequency

Strongly agree 30 55 55
Agree 15 27 82
Not sure 10 18 100
Disagree 0 0 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

It is evident from 4.2.7 that capacity to risk is used a measure of financial planning in the firm.

This is because 82% of the respondents agreed, 18% were not sure and none disagreed.

4.2.8 Findings on solvency as a measure of financial planning

Table 4.2. 8: Showed response on solvency as a measure of financial planning

Responses Frequency Percentage % Cumulative frequency

Strongly agree 30 55 55
Agree 15 27 82
Not sure 5 9 91
Disagree 5 9 100
Strongly disagree 0 0 100
Total 55 100
Source; Primary data

From table 4.2.8, it is concluded that solvency is a measure of financial planning of the firm

because 82% of the respondents agreed, 9% were not sure, only 9% disagreed that is a measure

of financial planning.

23
4.3 Findings on the level of agreement regarding the impact of financial planning on
employee performance in Bukwo Town Council

Table 4.3.1: Showed response on the level of agreement regarding the impact of financial
planning on the employee of Bukwo Town Council

Responses Frequency Percentage % Cumulative frequency

Strongly agree 25 45 45
Agree 20 37 82
Not sure 5 9 91
Disagree 3 5 96
Strongly disagree 2 4 100
Total 55 100
Source; Primary data

From table 4.3.1, it showed that there is an impact of financial planning on employees since 45%

of the respondents strongly agreed 37% agreed that there is an impact of financial planning on

employee, 9% were not sure, 5% disagreed and 4% strongly disagreed. This implied that

majority of the respondents agreed to the statement by 82%.

4.4 Examining the impact of financial planning on employee performance of Bukwo Town
Council

The examination of the impact of financial planning on employee performance of Bukow Town

Council was performed using Karl Pearson’s product moment of correlation coefficient which

was performed to establish the relationship between financial planning and employee

performance of Bukwo Town Council.

The correlation co-efficiency was from table 8 about whether financial planning leads to

effective management of funds as a measure of performance (x) and table 18 about a financial

efficiency an indicator of financial performance (y).

24
There were ranging from strongly agree, (SA), Agree (A), Disagree (D), strongly disagree (SD)

and not sure (NS)

Table 4.4.1: Karl Pearson’s product moment correlation co-efficient

Details Freq. (x) Freq. (y) xy x² y²

Strongly agree 30 35 1050 900 1225
Agree 15 15 225 225 225
Disagree 6 3 18 36 9
Strongly Disagree 4 2 8 16 4
Not sure 0 0 0 0 0
Total (∑) 55 55 1301 1177 1463
Source: Primary data

r= n (∑x y)-[(∑x) (∑y)]

√ [(n∑x2-(∑x) 2) (n∑y2-(∑y) 2)]

r = 5[1301]-[55x55]
√[5x1177-55²]x[5x1463-55²]

r = 6506-3025
√(5885 -1177)(7315-1463)

r = 3480
√(4708)(6052)

r = 0.652

From the information, it can be observed that there is a moderate positive relationship between

financial planning and employee performance of Bukwo Town Council with a correlation

coefficient of 0.625.

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 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS OF THE

STUDY

5.0 Introduction

This chapter presented the discussion of findings as analyzed in accordance to the objectives

about financial planning and employee performance of Bukwo Town Council and the conclusion

relating to the findings, recommendation and areas of further study.

5.1 Summary of the findings

5.1.1 Summary of findings on financial planning

Findings showed that 64% of the respondents accepted that the organization carries out financial

planning. The findings also showed that 55% of the respondents agreed that financial planning

leads to effective management of funds in Bukwo Town Council

5.1.2 Summary of findings on employee performance

64% of the respondents agreed that financial efficiency is used as a measure of performance in

the firm, 75% agreed that financial planning affects performance of the firm.

5.1.3 Relationship on the role of financial planning on employee performance

Results showed that 75% of the respondents said that financial planning affects performance and

45% of the respondents strongly agreed that truly financial planning has an impact on the

performance of financial institutions.

The findings also reverted that there is a moderate positive relationship between financial

planning and performance of Bukwo Town Council.

26
5.2 Conclusion

In reference to the research objectives set, the researcher concluded that financial planning plays

a positive role on the Bukwo Town Council. Organizations that already carryout financial

planning do enjoy the benefits like effective management of funds, change in consumers

financial practice, proper utilization of the finance, bringing the future closer and also prevents

fraud in the organization

In the final analysis based on the research findings suggest that there is a relationship between

financial planning and performance in Bukwo Town Council. This is based on the fact that

financial planning has improved on the level of performance at Bukwo Town Council.

5.3 Recommendations

Basing on the findings of the study, the researcher made the following recommendation

New and existing employees should be sensitized and trained for example through sensitization

companies and the media about financial planning and the benefits since this will lead to high

performance levels in the firm. This is because during the study, a certain percentage of

respondents disagree, and others strongly disagreed that financial planning is of great importance

to the organization. This could have resulted out of ignorance caused by poor sensitization

The firm needs to institutes an internal audit to appraise and check the strength of financial

planning within. This is so because financial planning is prone to fraud by dishonest managers

especially when dealing with physical cash.

Therefore without audit reviews, there may arise cases of teaming and lading fraud that may go

unnoticed. It is therefore importance that external audit controls come in once in a while to check

on financial planning in the firm.

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5.4 Limitations of the study

The researcher faced the following hardships while carrying out the study:

The study needed a lot of time and yet the researcher had a lot of work to do other than research

work and this was solved by supplying them to the respondents.

The researcher was also limited by the work load of the respondents as they could allocate

limited time for answering the interview, questionnaire. The researcher therefore solved this by

setting concise and precise questionnaire where they were to just tick the correct answer. For

example “strongly agree”.

Lack of transparency by some respondents where some of them feared to disclose most

important information about financial secrets and this was overcame by promising them that

their information was to be handled with utmost confidentiality.

Financial costs also limited the research study. This included transport cost, feeding, stationery,

and other necessary expenses needed in the study, but the researcher managed this by requesting

for money from the parents and friends.

5.5 Areas of further study

The study covered the impact of financial planning on employee performance of Bukwo Town

Council. However, some areas were not covered and hence being recommended for future

research and these include the following

 The impact of financial planning on the profitability of business firms

 The impact of financial planning on the liquidity of organizations

28
 REFERENCES

Arnold, G (2003). Corporate Financial Management. New Jersey Prentice Hall

Balduino, W.F (2000), Risk is in (on-line) Available http://dnb.com 22/10/07

Binks, M.R and Ennew, C,T (1992), “Information asymmetries and the provision of finance to
small firms” international small business Journal 11, No, 1 pp 35-46

Deakins, D, Hussain, G (1999) “Risk assessment with asymmetric information, international

Journal of bank Marking, Vol. 112, PP 24-31

Edward, B (1993), credit management 6th edition Cambridge University London Britain

Edward, P and Tunbull (1994), finance for small and medium sized enterprises. Information and
the income gearing challenge

Eppy, I (2005), Perceived information Asymmetry, Bank lending approaches, Bank credit

Accessibility by Bukwo Town Council in Uganda (Unpublished thesis), Makerere University

Fah, L Shaffer, S (2004): Efficiency versus risks in large domestics us banks: Managerial.
Finance Vol, 30, pp 1-19

Gapenski, L.C and Daves, P. R (1991), intermediate financial management. Florida; the Dryden
press central banks of Kenya

Gitman. D. J (1997). Principles of management finance 8th ed

Grover, P (2002). Managing credit is your credit policy profitable: available http://www-
creditguru.com (22/10/07/)

GTZ (2000), a tool kit for micro finance institutions; international journal of marketing Vol. 12
No. 6 pp. 39

Mcken (1995), “maximizing the outreach of microfinance programs and operations assessment
response No. 10 USAID, Washington, D.C. 50

29
Appendix A: Questionnaire

QUESTIONNAIRE

Dear Sir/Madam

I am Chelengat Gideon a student of Uganda College of commerce, Tororo conducting a study on

the impact of financial planning on employee performance in Bukwo Town Council. You are

request to space some of your valuable time to answer be used question. The information that

will be collected will be sued for academic purposes and will be treated with utmost

confidentiality

Instructions

Please provide a tick on the appropriate answer of your choice and fill in the spaces provided in
needed.

SECTION A:

BIO DATA

1. Gender

a) Male b) Female

2. Age group

a) Below 18 b) 19 - 25 c) 26-40 d) above 40 years

3. Marital status

a) Single b) Married c) Widowed

4. Level of education

a) Certificate b) Diploma

b) Degree and above d) None of the above

30
 5. Period of stay in the area

a) Less than 1 year

b) 2-5 years

c) Above 5 years

SECTION B:

IMPORTANCE OF FINANCIAL PLANNING

The following abbreviation will be strongly agree (SA), agree (A), not sure (NS), disagree and
strongly disagree (SD)

Response Strongly Agree Not Disagree Strongly

agree sure disagree

Helps in effective management o funds

Changes consumers financial practices

Leads to proper utilization of the finance

Helps in bringing the future close

Prevents fraud in organizations

31
SECTION C:

Measures of financial performance

Does Bukwo Town Council measures its financial performance

Yes No Not sure

Indicate your level of agreement on the following factors that help in measuring the financial
performance on an entity

Factors Strongly Agree Not Disagree Strongly

agree sure disagree

Liquidity

Solvency

Profitability

Repayment capacity

Financial efficiency

Available capital and capacity to attract

capital

Capacity to assume risk

32
SECTION D:

RELATIONSHIP BETWEEN FINANCIAL PLANNING ON EMPLOYEE

PERFORMANCE

Does financial planning have an effect on employee performance in Bukwo Town Council –

Uganda

Yes No Not sure

Indicate your level of agreement regarding the impact on financial planning on employee
performance in Bukwo Town Council

Relationship Strongly Agree Not Disagree Strongly

agree agree disagree

Financial performance helps in creating

financial budgets

Financial performance helps in monitoring

and indicating financial capacity

Financial performance provides investors

and creditors with forward looking

guidance

Thanks for your cooperation

33
Appendix B: Time Frame

TIMES FRAME

TIME PERIOD ACTIVITY

September 2019 Identification of research problem.

October 2019 Formulation of the research topic and approval

by the academic supervisor.

November – December 2019 Writing of chapter one, two and three

January – February 2020 Writing and distribution of questionnaires in

the case study.

March - October 2020 Covid-19 Lock down

October 2020 Collection of questionnaires from case study

October – November 2020 Writing chapter four and five

November 2020 Approval of the research report by the

supervisor.

December 2020 Submission of the final research report to

UBTEB.

34
Appendix C: Research Budget

RESEARCH BUDGET

ITEMS COSTS

Supervisor 130,000

Transport 50,000

Airtime 10,000

Stationary 50,000

Typing and printing 60,000

Binding 30,000

Total 330,000

35