Human Resource Costs and Corporate Financial Performance of Listed Deposit Money Banks in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2024.v2i2.93.56-70Keywords:
Human Resource Costs, Director’s Remuneration Cost, Salary and Wages Cost, Pension and Gratuity Cost, Financial PerformanceAbstract
This study investigates the relationship between human resource costs and the corporate financial performance of listed deposit money banks in Nigeria. The specific objectives of the study were to determine whether the director’s remuneration cost, salary & wage cost, and pension and gratuity cost have any effect on the earnings per share of listed deposit money banks in Nigeria. An ex-post facto research design was adopted, and the study used secondary data from the annual reports and statements of account of selected banks listed on the Nigerian Exchange Group for the period 2018–2022. Judgmental sampling techniques were employed to investigate the relationship existing between the variables. The study showed that director's remuneration cost has no significant positive effect on earnings per share of listed deposit money banks in Nigeria, salaries and wages cost have a significant negative effect on earnings per share of listed deposit money banks in Nigeria, and pension and gratuity cost have no significant effect on earnings per share of listed deposit money banks in Nigeria. Generally, this study concludes that there is no significant positive relationship between human resource costs and the corporate financial performance of listed deposit money banks in Nigeria. The study therefore recommends that management should not recruit more staff and should consider retaining only efficient staff. This implies that deposit money banks should downsize their staff and focus on training and re-training the most efficient members of staff.
References
Abdullahi N. A., Adejola P. A & Lambe I. (2020). Impact of human resource accounting on investment decision in Nigeria. Bingham University Journal of Accounting and Business, 2(1), 1- 19.
Adegbayibi, A. T., Akinyemi, O. M., & Adepiti, W. A. (2024). Human Resource Cost and Earnings per Share of Listed Manufacturing Firms in Nigeria. African Banking and Finance Review Journal, 11(11), 1–15.
Abraham, E. O., Odobi, O. D., & Enwuchola,, R. O. (2022). Effect of human resources accounting on the performance of listed deposit money bank in Nigeria. Journal of Accounting and Financial Management, 8(4), 80-132
Adebawojo, O. A. (2017). Organizational performance and growth: The mediating role of human asset accounting in Nigeria banking industry. IOSR Journal of Humanities and Social Science, 22(1), 24-29.
Agbada, A. O., & Osuji, C. C. (2018). The efficacy of liquidity management and banking performance in Nigeria. International Review of Management and Business Research, 2(1), 12-24.
Agburu, J. I. (2012). Recent trends in wage and salary administration in Nigeria: A synopsis on theoretical and empirical challenges. International Journal of Basic and Applied Science, 1(2), 257- 268.
Akintoye, I. R. (2012). The relevance of human resource accounting to effective financial reporting. International Journal of Business Management and Economic Research, 3(4), 566-572.
Alao, M., Oyegoke, K. S., Olalere, M., & Ogundajo, G. O. (2023). Human resource accounting and organizational performance of deposit money banks listed in Nigeria. International Journal of Management Studies and Social Science Research, 5(1), 204-216.
Albertazzi, U., & Gambacorta, L. (2016). Bank profitability and business cycle. Journal of financial stability, 5(4), 393-409.
Amahalu, N. N., Abiahu, M. F. C., Chinyere, O. J. & Christian. O. E. (2016). Effect of human resource accounting on the financial performance of quoted deposit money banks in Nigeria. Journal of Management Sciences, 2(3), 44-53.
Arowele, M.A (2018). Impact of human capital accounting on the financial performance of deposit money banks in Nigeria. Bingham International Journal of accounting and finance. 2 (1) 347-357.
Avazzadehfath, F., & Raiashekar, H. (2020). Decision-making based on human resource accounting information and its evaluation method. Asian Journal of Finance & Accounting, 3(1), 14-19.
Ayegba, O., James, I., & Odoh, L. (2013). Evaluation of pension administration in Nigeria. British Journal of Arts and Social Sciences, 5(2), 97-108.
Bahrami, F., Ahmadkhane, M., & Shafiee-Rodposhty, M. (2018). Relationship between human resource accounting in management decision and behavior of employees in company stock based on structural equation modeling. Research Journal of Finance and Accounting, 6(9), 12-23.
Bassey, B. E., & Tapang, A. T. (2019). Capitalized human resources cost and its influence on corporate productivity: A study of selected companies in Nigeria. International Journal of Financial Research, 3(2), 48-56.
Bassey, E. & Arzizeh, T. (2012). Capitalized human resources cost and its influence on corporate productivity: A study of selected companies in Nigeria. International Journal of Financial Research, 3(2), 48-59.
Beida, P. O. (2024). Effect of human resources accounting cost information on investment decisions of listed assurance companies in Nigeria. International Journal of Research and Scientific Innovation, XI (II), 65-83.
Cascio, W., & Boudreau, J. (2011). Investing in People; Financial Impact of Human Resource Initiatives (2nd ed.). Upper Saddle River, New Jersey.
Edom, G.O., Inah, E.U., & Adanma, E. (2015). The impact of human resource accounting on the profitability of a firm. Empirical evidence from Assess Bank of Nigeria. European Journal of Accounting, Auditing and Finance Research, 3(7),72-76.
Egbadju, L. (2024). Corporate Governance and Accounting Conservatism of Quoted Non-Financial Firms in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 2(1), 1–15.
Emmanuel O. O., Chukwuma B. A., & Umunnakwe, I. A. (2021). Effect of employee, motivation on financial performance of insurance companies in emerging economic in Nigeria. International Journal of Economics, 1(2), 23-34.
Hadzima, J. (2005). How much does an employee cost? Boston British Journal, 1(2), 21-32.
Hanran, L., & Wenshu, W. (2014). Impact of intangible assets on the profitability of Hong Kong-listed information technology companies. Macro-think Institute of Business and Economic Research, 4(2), 98-113.
Ifurueze, M. S., Odesa, J. O., & Ifurueze, P. C. (2014). Impact of aggregated cost of human resources on profitability: An empirical study. Journal of Business & Management, 3(2), 30-43.
Ifurueze, S., Odesa, O., & Ifurueze, P. (2014) Impact of Aggregated cost of human resources on profitability. Journal of Business & Management, 3(2), 30-43.
Jacob, J., & Farouq, S. (2021). A review of human resource accounting and organizational performance. International Journal of Economics and Finance, 5(8), 74–83.
Kankpang, A. K., Ogar-abang, J. O., Oko J. O., & Animpuye, C. (2024). Human resource cost and profitability of oil and gas companies in Nigeria. Nigerian Journal of Management Sciences, 25(1), 107-113.
Korolo, E. O. (2023). Corporate Governance Attributes and Financial Performance of Listed Industrial Goods Companies in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 1(3), 40–51.
Korolo, E. O., & Korolo, A. S. (2023). Corporate Sustainability Reporting and Financial Performance of Deposit Money Banks in Nigeria. FUDMA Journal of Accounting and Finance Research [FUJAFR], 1(3), 75–86.
Mahmoud, A. N., Samih, O. S., & Abdallah, A. k. (2014). The role of human resource costing in assisting investors to appraise the human assets of a business enterprise. International Journal of Economics, Finance and Management Sciences, 2(2), 117-122.
Manukaji, I. J., Osisioma B.C., & Okoye, P. V.C. (2019). Effect of human resource development on the performance of quoted companies in Nigeria. Journal of Accounting and Financial Management, 5(3), 55-64.
Mbah, P., Aga, C., & Onyia, E. (2018). Effect of human capital development in organizational performance in manufacturing industries in South-East Nigeria. International Journal of Academic Research in Economic and Management Sciences, 7(3), 61-77.
Najia, R. D. (2008). Aspects of strategic human resources management and their role in developing competitive advantage. [Middle East University for Graduate Studies].
Ogenyi, M.A., & Oladele, K.O. (2015). Human resource accounting in Nigeria: An analysis of challenges. Research Journal of Finance and Accounting, 6(22), 15-20.
Okpako, P. O., Atube, E. N., & Olufawoye, O. H. (2019). Human resource accounting and firm performance. Global Journal of Commerce and Management Perspective, 3(4), 232-237.
Ogunbiyi-Davies, B.A., Alao, M.E., Aremu, P.O., & Olalere, M. D. (2023) Human resources accounting and financial performance of some food and beverages in Nigeria. Open Access Library Journal, 10, 1-17.
Oladipo, J. A., & Fashagba, M. O. (2012). Evaluation of compliance with the stipulations of the contributory pension scheme: A case study of quasi-government institutions in Nigeria. An International Multidisciplinary Journal, Ethiopia, 6(4), 59-75.
Olayinka, A. (2011). Determinants of capital structure: Evidence from Nigerian panel data. African Economic Business Review, 9(1), 12-27.
Olowolaju, P., & Oluwasesin, O. (2016). Effect of human capital expenditure on the profitability of quoted manufacturing companies in Nigeria. Asian Journal of Finance and Accounting, 8(2), 155-170.
Omodero, C. O., Alpheaus, O. E., & Ihendinihu, J. U. (2016). Human resource costs and financial performance: evidence from selected listed firms in Nigeria. International Journal of Interdisciplinary Research Methods, 3(4), 25-33.
Omodero, C., Alpheaus, O., & Ihendinihu, J. (2016). Human resource cost and financial performance: Evidence from selected listed firms in Nigeria. International Journal of Interdisciplinary Research Methods, 3(4), 14-27.
Onipe A. Y (2019). Intellectual capital management and financial competitiveness of listed oil and gas firms in Nigeria. ESUT Journal of Management Science, 12(1), 86-96.
Onyekwelu U. L., Chukwuani V. N., & Onyeka V. N. (2018). Effect of liquidity on the financial performance of deposit money banks in Nigeria. Journal of Economics and Sustainable Development, 9(4), 12-25.
Ovedje, H., & Iserien, E. G. (2021). An overview of human resource accounting and financial performance of selected manufacturing firms in Nigeria. Innovative Journal of Art and Social Sciences. 3(3), 106-124
Oyedokun, G. E., & Saidu, B. (2018). Impact of intellectual capital on the financial performance of listed Nigerian oil marketing companies. Information and Knowledge Management, 8(9), 13-27.
Oyetola, O., & Olalere, M. D. (2024). The effect of amortizing the value of human resource cost on the financial performance of Nigeria banks. Asian Journal of Economics, Business and Accounting 24 (6), 120-34.
Rao, T.V. (2018). Human resource development: concept and background, human resources development: experiences, interventions, and strategies. New Delhi: Sage Publications
Raza, A., Farhan, M., & Akran, M. (2019). A composition of financial performance in the investment banking sector. International Journal of Business and Social Sciences, 2(9), 72-81.
Stulz, R. (2012). Managerial discretion and optimal financing policies, Journal of Financial Economics, 2(6), 3-27.
Surbhi, S. (2015). Differences between Salaries and Wages.
Ugwuanyi, U. B., & Onyekwelu, U. L. (2018). Relevance of intellectual capital on firms’ revenue and market valuation of quoted information & communication technology (ICT) industry in Nigeria. IOSR Journal of Economics and Finance, 3(9), 1-19.
Yusuf, B. (2014). Assessment of administrative constraints of contributory pension policy in Nigeria: A study of Kano state pension fund trustees. [B.Sc. Project, Ahmadu Bello University, Zaria].
Downloads
Published
Issue
Section
License
Copyright (c) 2024 FUDMA Journal of Accounting and Finance Research [FUJAFR]
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The FUDMA Journal of Accounting and Finance Research (FUJAFR) operates a copyright policy that ensures a balance between author rights and wide dissemination of scholarly work.
1. Author Copyright Retention
Authors retain full copyright of their published work without restriction. Submission to FUJAFR does not transfer ownership of copyright to the journal.
2. License to Publish
By submitting a manuscript and upon acceptance, authors grant FUJAFR:
- The right to publish, reproduce, and distribute the article
- The right to identify itself as the original publisher of the work
This grant is non-exclusive, meaning authors are free to reuse their work in other contexts, provided proper acknowledgment of the original publication in FUJAFR is made.
3. Licensing of Published Content
All articles are published under the:
Creative Commons Attribution-NonCommercial License (CC BY-NC 4.0)
Under this license:
- Users may share and adapt the work for non-commercial purposes only
- Proper attribution to the author(s) and the journal is required
- Any commercial use requires explicit permission from the copyright holder
4. Author Reuse Rights
Authors are permitted to:
- Archive their published articles in institutional repositories or personal websites
- Share their work for educational and research purposes
- Reuse portions of their work in future publications (e.g., books or other articles), provided proper citation of the original publication is included
5. Third-Party Content
Authors are responsible for obtaining permission to use any third-party copyrighted material (e.g., images, tables, datasets) included in their manuscripts. Proper acknowledgment must be provided where required.
6. Attribution Requirement
All users of FUJAFR content must provide appropriate credit, including:
- Author name(s)
- Article title
- Journal name (FUJAFR)
- Year of publication
