Perceived Drivers of Wage Inequality in Federal Government MDAs in Ibadan Metropolis, Oyo State

Abstract

Abstract

The study explored perceived drivers of wage inequalities in Federal Government MDAs in Ibadan metropolis. Federal Ministry of Finance (FMoF), Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Federal Inland Revenue Service (FIRS) were purposively selected in Ibadan, being their zonal headquarters.  Guided by equity theory, this research explored the experiences of employees with the use of a cross-sectional mixed methods approach combining questionnaire administration with qualitative interviews in the selected MDAs (Ministry of Finance, Nigerian Upstream Petroleum Regulatory Commission and Federal Inland Revenue Service). They were selected because of differences in institutional structure and remuneration practices. However, a total of 439 questionnaires were administered to employees across the selected MDAs, of which 398 valid questionnaires were retrieved and analysed, with response rate of 90.7%. Quantitative data were analysed using descriptive statistics while qualitative information obtained was content analysed. The finding revealed that selective promotion policies constituted the highest perceived driver of wage inequality (96.8%), followed by priority given to wage award (95.8%) and negotiation power of labour unions (95.4%). Other major drivers included autonomy to determine wages and salaries (83.8%), unequal budgetary allocation (84.5%), lack of uniformity in the operating labour policy (73.2%) and revenue generating capacity (68.3%). The qualitative findings corroborated these results, indicating that wage inequality was shaped by differences in institutional salary structures, financial and budgetary capacity and autonomy to determine remuneration This study contributed to knowledge of the complex interplay between wage inequality and employees’ characteristics. The results highlighted the need for the federal government to make policies that promote equitable wage policy and structure across all sectors to enhance equity among its employees.