EFFECTS OF WAGES AND SALARIES ON EMPLOYEE PRODUCTIVITY IN

ORGANISATIONS FOUND IN KASESE MUNICIPALITY,

KASESE DISTRICT UGANDA

A RESEARCH PROPOSAL SUBMITTED TO THE

SCHOOL OF BUSINESS
BUGEMA UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE BBA

COURSE:
BRES 201: BUSINESS RESEARCH 11

TO
DR. LUBOWA MARTIN

…………………………………………..

BY
MUHINDO CHRIS MOLLY

JANUARY, 2022
 TABLE OF CONTENTS
Page

CHAPTER 1........................................................................................................................3
INTRODUCTION...............................................................................................................3
Background of the Study.....................................................................................................3
Purpose of the Study............................................................................................................5
Specific objectives of the study...........................................................................................5
Research Questions..............................................................................................................5
Research Hypothesis............................................................................................................5
Significance of the Study.....................................................................................................6
Scope of Study.....................................................................................................................6
Conceptual Framework........................................................................................................7
Operational Definition of the Terms....................................................................................7
 CHAPTER 1

INTRODUCTION

Background of the Study

Globally, high wages help attract and retain highly skilled labour into

organization, since employees need to meet their individual needs. The workers

are motivated to increase output and performance. However, higher real wages enable

workers to afford higher levels of consumption, enjoy more leisure, and potentially invest

more in their health and education (Sule, 2015).

UK labour productivity rose steadily at an average rate of 2.2% per year prior to

2008, but has failed to return to its pre-crisis trend since then. Productivity matters. One

reason it matters is through its links to the real wage that is affordable to employers. As

productivity rises it takes fewer hours of work to produce the same amount of output.

This allows employers to increase wages (Eliphas, (2017).Higher real wages enable

workers to afford higher levels of consumption, enjoy more leisure, and potentially invest

more in their health and education.

In Asian countries, wages and salaries administration is part of the total

compensation packages of any organization (Public or Private Sector) Wages and salaries

are to attract, hold and motivate employee to put in their best. To ensure the cooperation

of employees on a continuing basis. To make sure the right type of employees are

attracted to the organization, to help employees maintain a reasonable standard of living.

It helps reduce employee turnover (Odunlami, 2014).

In African countries, incentive scheme involve paying an employee a bridge that

reflects his productivity on contribution to the organization. Minimum wages not

only help to reduce wage dispersion and to channel productivity gains into higher wages,

but they also can contribute to higher labour productivity – both at the enterprise level

and at the aggregate economy-wide level

In the private sector i.e. SONA Breweries Nigeria PLC review of wages and

salaries are done at regular interval through negotiation between the management and the

employee’s representatives. Also, salaries are promptly paid to employees. Again, the

payment of double increment and productivity bonus (Katunze, 2017).

In east Africa, if the total productivity of a country is very high, the tendency is

that wages and salaries will be high also. And it continues to be adjusted in accordance

with the trend of the productivity. During job evaluation, jobs are graded according to

relative amount of skills, effort, mental alertness, education, purpose (Zeffane, 2017).

In Uganda, pay is also a common practice in the private organizations and highly

motivates employees. It is well known in Kasese municipality that wages and salaries

administration determines, or influences productivity in any organization. An engineer in

a company is paid more than the technicians. There should be equal pay for equal work.

Statement of the Problem

Wages and salaries administration aspect, are the most vital things in achieving

productivity of the organization. This is the major problem facing most organizations in

Kasese municipality and it has consequently deprived them of achieving efficient and

effective wages and salaries administration (Agburu, 2012).This should be over

emphasized because it will help to improve employee productivity, the efficiency and

morals of organizations thereby leading to organization’s effectiveness. Therefore it is

with this basis that research is being carried out to find out the relationship between wage

and salaries on employee productivity in organizations found in Kasese Municipality.

Purpose of the Study

The main purpose of this study is to find out the relationship between wage and

salaries on employee productivity in organizations found in Kasese Municipality

Specific objectives of the study

1. To find out the level of wage and salaries in Kasese Municipality.

2. To find out the level of employee productivity in organizations found in

Kasese Municipality.

3. To find out the relationship between wage and salaries on employee

productivity in organizations found in Kasese Municipality.

Research Questions

1. What is the level of wage and salaries in Kasese Municipality?

2. What is the level of employee productivity in organizations found in Kasese

Municipality?

3. What is the relationship between wage and salaries on employee productivity in

organizations found in Kasese Municipality?

Research Hypothesis

There is no relationship between wages and salaries on employee productivity in

organizations found in Kasese Municipality.

 Significance of the Study

The significance of this study therefore, is that it explores ways in which

maximum productivity or efficiency through adequate, motivation of workers can be

assured within an organization, say a private organizations

Within all organizations the utilization of labour towards the accomplishment of

organizational goals is emphasized. Thus in bureaucratic organizations, the enhancement

of wages and salaries is vital to the employee’s effectiveness and efficiency.

The research project affords an opportunity of going into an in-depth knowledge

as to how the human and technical element can be managed towards improved or higher

wages and salaries.

The study is also significant in the sense that it suggest ways, if necessary on how

to enhances, improved wages and salaries.

The researchers expect the have more knowledge about wages and employee

productivity in organizations found in Kasese Municipality. This may help the researcher

know whether the wages or salaries acquired from different organizations have positive

effects on the employees of different organizations.

Scope of Study

The scope of the study is wages and employee productivity in organizations found

in Kasese Municipality. This research helps in development by providing measures and

contribution of wages and salaries such as motivation, efficiency and this will also leads

to employee productivity in organizations through employee turnover, efficiency and

customer satisfaction.
 The study will be carried out at Kasese municipality located in western Uganda

just 100km from Fort-Portal City. The study will cover the effects of wages and employee

productivity in organizations of the period ranging from January – May 2022

Conceptual Framework

The conceptual framework below is about the relationship between the

independent variables and dependent variables.

Independent Variable Dependent Variable

Effects of wages and salaries Employee productivity in

- Employee loyalty organizations
- Duration in the organization 1. Employee turnover
- Employee engagement 2. Efficiency
3. Customer satisfaction
Figure 1: shows the conceptual frame (Researcher, 2022)

The conceptual frame work above explain that when a person get a wage and

salary from an organization, the level of productivity increase which results into

development of the organization and improves the employee turnover, efficiency and

customer satisfaction.

Operational Definition of the Terms

Employee loyalty: Is an umbrella term for a set of emotions that make employees feel

attached to their current employer and less likely to see greener grass elsewhere.

Salary and Wages: In this study wages are hourly or daily payments for work done

during the working day. The main difference between salary and hourly wage is that

salaries are a fixed upon payment agreed to by both the employer and employee.
Employee: This is will refer to as a person who works in a company in return for

a wages and salaries.

Employee Productivity: In this study it will mean the rate at which works in a

company or country produces goods and the amount produced with how much

time work or money is needed to produce them.

Duration in the organization: In this study, this term will mean the length of time an

employee spends working for the organization from beginning to the end of the job

Employee engagement: In this study, it refers to the level of dedication an employee

worker feels toward their job and feels that their efforts make a difference

Employee turnover: In this study, this term will mean the act of replacing an employee

with a new employee as a result of termination, retirement, death, interagency transfers,

and resignations. 

Efficiency: In this study, this term will mean an act of increasing the output of an

organization using a specific amount of resources to achieve the same goals and

objectives of the organization

Customer satisfaction: In this study, it refers to the measurement that determines how

happy customers are with a company's products, services, and capabilities

 LITERATURE REVIEW

Introduction

This chapter contains literature review information on cash management practices

and financial growth of small scale businesses. The literature was retrieved from journals,

articles and internet sources. The information was aimed at helping the researchers

identify the study gaps.

Employee loyalty

Employee loyalty can be best described in terms of a process, where certain

attitudes give rise to certain behaviors (intended or actual). In the past, once hired

an employee believed it was a life time job and managers expected their

unstinted loyalty to the enterprise. Frederick, 2006 in his study he reported that loyalty,

for those who plan to stay with an employer at least two years, can be affected by several

factors, including benefits and pay, working environment, job satisfaction and

customers. Employee loyalty is critical for organizations as constant. (Guillon, 2014)

found that trust, loyalty and related norms may have a crucial economic role to play, it

does not follow that regulation should be used to foster their development.

Employee engagement

Robinson et al. (2014) define employee engagement as “a positive attitude held by

the employee towards the organization and its value. An engaged employee is aware of

business context, and works with colleagues to improve performance within the job for

the benefit of the organization. Research indicates that engagement is positively related to

customer satisfaction (Marson, 2015).Studies have found positive relationship

between employee engagement and organization performance outcomes: employee

retention, productivity, profitability, customer loyalty and safety (Cohen, 2017)

Duration in the organization

While additional working hours may reflect a worker’s work ethic or commitment

to the job, workplace, employer or labor force and the hope of attaining higher current or

future earnings, at some point, longer working hours inevitably begin to create risks and

time conflicts that interfere not only with the quality of non-work life, but also on-the-job

performance (Bluedorn,2018). In addition, when considered within a longer time horizon

and from a broader perspective, productivity and the firm’s labour costs may be affected

in many indirect ways. Flexible workplace practices significantly reduce the life-to-job

spillovers that impair productivity at the job or workplace. This holds even among hourly

employees, including those at the entry level (Golden, 2016).

Customer Satisfaction

Customer satisfaction is the key driver for any organization .According to Sao,

(2017), the most well-known perspective of consumer satisfaction in the scholarly world

is that consumer satisfaction is the judgment borne out of the examination of pre-buy

desires with post buy assessment of the product or service encountered. Many researchers

opine that customer satisfaction has positive impact and effect on the profitability and

growth in revenue generation of organizations. Customer-centered organizations follow a

model where customers are at the top. Therefore organizations should pursue superiority

in both customer satisfaction and productivity (Goshime, 2019).

Efficiency
 In simple terms, efficiency in an organization examines how to increase the output

an organization can achieve, using a specific amount of resources. The more output

delivered using those same resources, the more efficient the organization is.According to

Bain, 2018 improving organizational effectiveness through organizational efficiency has

numerous benefits. When they surveyed companies, they found those who had deployed

organizational efficiencies were: Four and a half times more likely to report improved

customer experience, Four times more likely to say their cost efforts enabled growth,

rather than hindered it .Efficiency makes a difference not only for the business, but also

for employee engagement. Organizations must therefore understand the various types of

efficiency so that appropriate methods, including those which influence employee

engagement ideas, can also be selected (Morrow, 2017)

Summary of Identified Gaps

From the above literature review it is clear that benefits from wages and salaries

represent a double edged sword. On one side, employers know that in order to attract,

retain and motivate employees with the necessary capabilities and in order to enhance

their productivity they must offer appropriate benefits which includes money paid

directly (such as wages and salaries) and money paid indirectly (such as benefits). But,

given the absence of empirical evidence on the relationship between employee wages and

salaries on employee productivity in organizations, it is clear that there is a research gap

and that further research needs to be carried out, in order to ascertain this relationship.
 CHAPTER THREE

METHODOLOGY

Introduction

This chapter presents the procedures and techniques to be used in this research. It

covers the locale of study, research design, sample size, sampling technique, data

collection methods, reliability, validity, data processing and statistical method of data

analysis.

Research Design

This study will be based on descriptive and correlation research designs. The

descriptive design will be used in describing the situation as it will be at the time of the

study in terms of the level of revenue management and service delivery that makes use of

the qualitative and quantitative approaches of data analysis.

The cross sectional research design shall assist in collecting data over a specified

period of time during the organizational productivity. The Correlational design will be

used to establish the relationship between wages and salaries on employee productivity in
organizations found in Kasese Municipality. This will assist the researchers to find data

which is rich, insightful and easy to understand.

Locale of the Study

The study will be carried out at Kasese municipality located in western Uganda

just 100km from Fort-Portal City and lies south of amidst Kasese District near Lake

George. Kasese district alone has 130 parishes and 751 villages. It shares boundaries with

Busongora south, Busongora North and central division on the western side. It also shares

boundaries with Bushenyi District on the eastern part. The reason why the researchers

have chosen to carry out the study in Kasese Municipality there is low employee

productivity in organizations.

Study Population

According of National Population Census (2014), Kasese Municipality has a total

population of 41.545 people distributed in areas which are central division, kilembe

Quoters, Busongora South, Busongora North, Bukonzo West and Bukonzo East.

Target Population

The study will target organization workers in central division Kasese municipality

between 25-50 years of age. The researcher has chosen the group because they have a

stack in revenue which means they get wages and salaries.

Sample Size

The study will be carried out in Kasese Municipality, Uganda, with selected

sample of 1520 and according to the formula of Yamane Taro (1970) of calculating the

sample size.

N= _N_____________
 1 + N (e) 2

Where; N = total Population [1520]

n= total sample

e=desired margin error [0.05]

1520
n = ___________________ 317

1 + 1520 (0.05)2

Sampling Procedure

The researcher will employ random sampling procedures because the number of

respondents will be huge and dwell in different Divisions.

Data sources

The study will employ both primary and secondary data sources in this study in

order to come up with the appropriate information to the topic under investigation.

Primary data is gathered by the researchers using a self-administered questionnaire for a

specific purpose while secondary data will be retrieved from existing records on wages

and salaries and productivity, reports, articles and business journals as it is an existing

data, gathered and reported for some other purpose than the problem being investigated.

Data Collection Methods

The researchers will use a self-administered questionnaire during data collection

which will be constructed with guidance of the research supervisor.

Research Instrument

The instrument will comprise of three sections: Section A will be comprised of

respondents’ personal information (bio-dada). Section B will contain objective questions

while Section C will have questions on respondents’ suggestions and recommendation.

The instrument will be formed on various scales. Questions on variables will have four

point Likert Scale as illustrated below

Table 1: Likert Scale and its interpretation

Questionnaire Scale Value Mean Range Interpretation
Strongly Agree 4 3.26-4.00 Very high
Agree 3 2.51-3.25 High
Disagree 2 1.75-2.50 Low
Strongly Disagree 1 1.00-1.74 Very low

Data Processing and Analysis

This will include data editing, coding, tabulation and formatting to create

meaning of the relationships studied by the researcher that is to say independent and

dependent variables. The researchers will analyze data using Statistical Packages for

Social Scientist (SPSS) to derive meaning of the study outcome. The objectives 1 and 2

will be analyzed using descriptive statistics that involve finding the mean and standard

deviation for the variables and objective 3 will be analyzed using correlational statistics

to establish the strength of the relationship between the variables and the coefficient of

determination to explain wages and salaries on employee productivity in organizations

found in Kasese Municipality which will be in form of frequencies and percentages.

Other information will be analyzed thematically.

Validity of the Instrument

Validity is the degree to which the results that are obtained from analysis

represent the phenomenon. To ensure the validity, the questionnaire will be designed in

consultation with the research supervisor who will be assisting in telling whether the

items in the questionnaire measure adequately the possible items necessary to meet the

objectives of the study and check the clarity and consistence of items in it. Content
Validity Index will be used to establish the validity of the instrument. The instrument

will be considered valid when the value of the CVI will be higher than 0.7 according to

Orodho (2009). This will be ensured by calculating the CVI using the formula below.

CVI = Total Number of Relevant Items

Total Number of Items

Reliability of the Instrument

Reliability refers to the degree of consistency and precision in which the

measuring instrument must demonstrate. Reliability of the instrument will be determined

by the relationship of the data obtained to the nature of the variables being studied. The

researchers will ensure consistency and precision of the research instrument by carrying

out a pretest of 20 questionnaires. The pre-test will be done at Muhokya parish because it

has characteristics such as demography, economic activities, weather, culture and

physical features as those of Muhokya parish. These copies will thereafter be coded and

entered in SPSS computer packages to test for reliability. Chronbach’s alpha scale

recommends a coefficient of 0.7 and above as an adequate measure of internal

consistence (Cooper and Schindler, 2006)

Data Collection Procedure

The researches will obtain an introductory letter from the Dean, School of

Business Bugema University, which they will present to the Kasese municipality leaders

to seek permission to carry out the study in the area. Once the permission is secured, the

researchers will field activity calendar and plan. Once this is done, the researchers will

start collecting data from 317 respondents.

Ethical Consideration
 This research is intended to have positive effect on society with no harm on any

one. Its establishment and revenue management and society, it is educational. The

questionnaire will not contain abusive language; the data that will be collected will be

strictly protected with extreme confidentiality for every one benefit especially the

respondents, in addition, an introductory letter will be got from the dean of school of

business of Bugema University that will help to identify the research to the respondents

hence avoiding cases of suspicion.

 REFERENCES

Anitha, J. (2014). Determinants of employee engagement and their impact on employee

performance. International journal of productivity and performance management.
Avinal, E. A. (2006). Revenue management in hotels. Journal of Foodservice Business
Research, 7(4), 51-57.
Baggio, R., & Klobas, J. (2011). Quantitative methods in tourism. A handbook. Bristol:
Channel View Publications.
Bibu, N. A., & Moniem, H. A. E. (2011). The relationships among employee satisfaction,
productivity, performance and customer satisfaction. Rev. Int. Comp.
Manag, 12(3), 470-477.
Bluedorn, A. C., (2018). Time and organizations. Journal of management, 14(2), 299-
320.
Chase, Nicole. 2007. Revenue management redefined. Hotels, February 1, 2007.
Cohen G., (2007). Employee Engagement: The secret of highly performing organizations.
Eliphas, R., (2017). The influence of performance appraisal practices on employee
productivity: A case of Muheza District, Tanzania. Issues in Business
Management and Economics, 5(4), 45-59.
Golden, L. (2012). The effects of working time on productivity and firm performance,
research synthesis paper. International Labor Organization (ILO) Conditions of
Work and Employment Series, (33).
Goshime,. (2019). Lean manufacturing as a vehicle for improving productivity and
customer satisfaction: A literature review on metals and engineering
industries. International Journal of Lean Six Sigma.
Guillon, O., & Cezanne, C. (2014). Employee loyalty and organizational performance: A
critical survey. Journal of Organizational Change Management.
Journal of Applied Human Capital Management, Vol 1 Number 2007
Katunze, M., (2017). Uganda warehousing receipt system: improving market
performance and productivity. African Development Review, 29(S2), 135-146.
Lee, J., (2017). In pursuit of service productivity and customer satisfaction: the role of
resources. European Journal of Marketing.
Marinova, D., (2008). Do frontline mechanisms matter? Impact of quality and
productivity orientations on unit revenue, efficiency, and customer
satisfaction. Journal of Marketing, 72(2), 28
Melcrum publishing. (2015). Employee engagement: How to build a high-performance
workforce. An independent Melcrum Research Report Executive Summary
Morrow, P., & McElroy, J. (2007). Efficiency as a mediator in turnover—organizational
performance relations. Human Relations, 60(6), 827-849.
Murali, S., Poddar, A., & Seema, A. (2017). Employee loyalty, organizational
performance & performance evaluation–a critical survey. IOSR Journal of
Business and Management, 19(8), 62-74.
Odunlami, I.B., (2014). Compensation Management and Employees Performance in the
Manufacturing Sector, A Case Study of a Reputable Organization in the Food and
Beverage Industry. International Journal of Managerial Studies and
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Transformations in Contemporary Society, 1(1), 45-53.
Sao, A., (2017). Quality, productivity and customer satisfaction in service operations: An
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Sule, O. E., (2015). Wages and salaries as a motivational tool for enhancing
organizational performance. a survey of selected Nigerian
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 APPENDICES

Appendix 1: Questionnaire

Dear Respondent,

My name is MUHINDO CHRIS MOLLY students of Bugema University,

pursuing Bachelor of Business Administration in Accounting conducting a study on
“EFFECTS OF WAGES AND SALARIES ON EMPLOYEE PRODUCTIVITY IN
ORGANISATIONS FOUND IN KASESE MUNICIPALITY, KASESE DISTRICT
UGANDA “We kindly request you to respond to this questionnaire and the information
provided will be handled with confidentiality, and the information collected is purely for
academic purpose.
Thank you very much for your cooperation.

SECTION A: Respondents Bio Data

Kindly provide the most appropriate response by writing in the space provided

against each attribute or by ticking in the corresponding box

1. Your gender Male ( ) Female ( )

2. Your age range 26-30 ( ) 31-35 ( ) 36-40 ( ) 45-50 ( ).

3. Education Level: Certificate ( ) Diploma ( ) Degree ( ) Masters ( )

SECTION B

(Research Objectives)

Please tick what best applies to you

Key: 4-Strongly Agree, 3- Agree, 2- Disagree, 1- Strongly Disagree

Effect of Wage and salaries 4 3 2 1

Employee loyalty
4. Corruption in Kasese municipality has resulted in low productivity
5. Inexperienced financial planners interfere with service delivery
channels.
6. Delayed salary for organization workers interferes with organization
management which affects service delivery.
Duration in organization
7. Limited sources of revenue affect period we stay in the organization
8. Late wages or salaries slows down the provision of social services
9. Limited salaries bring about sub-standard affect the period we remain
in the company
Employee engagement
10. Officials do not prioritize when involving employees
11. Greed among Kasese municipality organizations officials makes
them not to engage other employees.
12. The use unskilled personnel in leads to not engaging them in some
activities hence getting low wage/salary
Employee productivity in organizations
Employee turnover

13. The fencing of employees makes the employees remain in the

organization
14. Employees stopped living the organization because of good wages

15. The organization have done all that it can to reduce the rate of
turnover by salary increment
Efficiency
16. Our set goals have been achieved.
 17. Our revenue has increased
18. The work accomplished during the little period is done due to good
wages
Customer satisfaction
19. our customers are satisfied which means the products or service is
good
20. Our organization engage employees in every activity which leads to
customer satisfaction
21 Our service delivery is better than that of any other organization which
leads to customer satisfaction

SECTION C

22 Which other factors are affecting wages and salary?

………………………………………………………………………………………………

23 Suggest other ways of improving Employee productivity in organizations in Kasese

municipality

………………………………………………………………………………………………