PROBLEMS OF HUMAN CAPITAL MANAGEMENT IN SMALL SCALE BUSINESS ENTERPRISES (A STUDY OF SELECTED SMALL SCALE BUSINESSES IN EDO STATE)

ABSTRACT

The research as to investigate the problems of human capital management in small scale business in Edo State in Nigeria. A study of selected small scale businesses in Edo State. The instrument used for the data collection is structured questionnaire which were administered to the employees and owner of 10 small-scale businesses in Edo State. The sampling techniques was convenient sampling in which ten small scale businesses were selected and in which the sample size are 45. hypothesis were tested based on percentage analysis. It was discussed that small scale business do not have personnel department and that friends and relatives are used as staff which negates effective recruitment of staff. On the basis of these problems, it is recommended among others, the setting up of a specialized human capital development in the small scale business, a multi-source recruitment strategies should also be used by small scale business and that there should be delegation of authority in the small-scale business.

1.1 BACKGROUND TO THE STUDY
An individual in an organization may lose his motivation if his effort is not properly rewarded. This necessarily calls for a qualified professional personnel manager in an organization. Organizations can hardly progress without personnel manager to manage their activities. Thus human capital management function is one that is most other relegated. This comes from the fact that the small-scale business is often more interested in obtaining equipment for production turning out of good quality consumers for much desired income then how to manage its employees for greater productivity, because of the few number of employees on the rule, the personal nature of their employment relationship and the assumption that the owner manage is naturally endowed with the qualities to manage successfully few employees, the job of personnel is taken for granted. On the other hand, closer examination would reveal that an efficient and important as good quality product. To this end, the efficient management of small number of employees at the disposal of small business is of paramount importance.

The employment of a small business constitutes an effective public relations medium for the organization. A satisfied, well treated work force will reflect loyalty and enthusiasm in their dealing with consumers and by so doing that offer them as a major asset to the business. In addition the materials, equipment machines and other things used in business are available to all small scale business at equal prices but the only distinctive characteristic among small business is the good employees relation which; cannot be copies equipped with specialized aids, the small business must rely more heavily on its personnel alone if it is to survive the competition of the market place.

In Nigeria, the small-scale business experienced a lot of human capital management problems, ranging from the paternalistic relationship in the selection of the work force a reward system that is based on other criteria than productivity on the fact that employees can be fired without due regards to lay down disciplinary procedures. A poor staff selection process would lead to inefficiency in production and eventual failure.
Government intervention in the industrial system to transfer ownership and management to the state started from colonial times. Rail and air transport serviced; power generated and distribution and other public utilities have generally been developed and managed by the government. The government has thus, through this process provided basic infrastructure, which enable private enterprises to continue. It was natural that this pattern continued when the country got independence in 1960. the government made several efforts to industrialize the country by the establishment of capital-intensive largely urban-based thereby encouraging rural urban drift. Efforts were made in the 80’s to reverse this situation in 1986 was the government deliberate shift to emphasis to small scale enterprises.