Retirement Benefits And Employee Commitment In Awka South Local Government Area, Anambra State, Nigeria

Retirement Benefits and Employee Commitment in Awka South Local Government Area, Anambra State, Nigeria

¹Dr. Williams, Gbenga ,² Emeka-Obiajunwa Princess-Anne, ³ Osuagwu Blessing Oby, PhD.

²Nottingham Trent University

^1&3Hezekiah University, Faculty of Management and Social Sciences, Department of Business Administration Umudi Nkwerre, Imo State, Nigeria

DOI: https://dx.doi.org/10.47772/IJRISS.2025.909000629

Received: 12 September 2025; Accepted: 20 September 2025; Published: 23 October 2025

ABSTRACT

This study examined the relationship between retirement benefits and employee commitment in Awka South Local Government Area, Anambra State, Nigeria, focusing on how gratuities and pensions affect normative and affective commitment. A survey research design was employed, with 296 respondents selected through a stratified random sampling technique from a population of 1,250 employees. Multiple regression analysis was used to analyze the data. The findings show a significant positive relationship between gratuities benefits and employee normative commitment (B = 0.685, β = 0.735, t = 8.03, p = 0.000), with gratuities accounting for 54% of the variance in normative commitment (R² = 0.540). Similarly, pension benefits significantly influenced employee affective commitment (B = 0.564, β = 0.642, t = 6.61, p = 0.000), explaining 41.2% of the variance in affective commitment (R² = 0.412). Both results indicate strong and statistically significant effects, as all p-values were less than 0.05. The study concludes that secure and fair retirement benefits enhance employees’ emotional attachment and their sense of obligation to remain in the organization, thereby fostering higher levels of commitment, job satisfaction, retention, and reduced turnover. It is therefore essential for local government authorities and private sector organizations to invest in transparent and comprehensive retirement benefits systems to promote employee commitment and organizational stability. The study recommends prioritizing the enhancement and proper management of pension and gratuity schemes, ensuring they are adequate, accessible, and transparent. Policymakers should also regularly review retirement benefit policies to reflect prevailing economic conditions and support employee awareness programs that communicate the value of such benefits. Further research is encouraged to explore the long-term impact of retirement benefits on employee performance and organizational productivity across different sectors in Nigeria.

Keywords: Retirement benefits, Employee commitment, Gratuities benefits, Pension benefits, Normative commitment, Affective commitment.

Background of the Study

Employee commitment remains a crucial aspect of organizational success, directly impacting productivity, turnover, and overall organizational performance. Retirement benefits, as part of employee welfare programs, play a significant role in fostering employee commitment by providing financial security during post-retirement years. The promise of such benefits often serves as a motivation for employees to remain loyal to their organization, especially in public sector institutions like local government areas in Nigeria. Studies have shown that retirement benefit systems can significantly influence an employee’s perception of job security and long-term organizational loyalty (Okonkwo & Nwankwo, 2021).

In Nigeria, the issue of retirement benefits has received considerable attention due to its implications for employee welfare and organizational stability. Local government areas, including those in Awka South, often struggle with fulfilling their pension obligations. The inadequacy or delay in providing these benefits has contributed to dissatisfaction among employees, undermining their commitment to their organizations (Eze & Chukwu, 2022). Such challenges are not unique to Awka South but are pervasive across many states in Nigeria, making this a national concern.

Retirement benefit schemes in Nigeria operate under the Pension Reform Act (PRA) of 2014, which introduced the Contributory Pension Scheme (CPS). This scheme aims to ensure that retirees receive a steady income, thereby promoting financial independence after active service. However, despite the intentions of the CPS, challenges such as poor fund management, corruption, and bureaucratic bottlenecks continue to impede its effectiveness (Adams & Yusuf, 2021). These issues have been reported to affect employees’ trust in the system, thereby weakening their organizational commitment.

Employee commitment is also influenced by the perceived fairness and reliability of retirement benefit schemes. In many local government areas, employees often express concerns over the irregular payment of pensions and gratuities, which erodes their trust in the system. According to Ogunbiyi and Fadare (2021), when employees are uncertain about the future of their retirement benefits, they are less likely to exhibit strong commitment and may seek alternative employment opportunities or display reduced productivity.

In the context of Awka South Local Government Area, the socio-economic environment poses additional challenges to the effective implementation of retirement benefit schemes. The rising cost of living and inflation further diminish the value of pensions, making it harder for retirees to sustain themselves post-retirement (Nwafor & Ijeoma, 2022). Employees who are aware of these challenges may develop a sense of insecurity, which can adversely affect their current work commitment.

Furthermore, the link between retirement benefits and employee commitment highlights the broader need for organizational justice and effective policy implementation. Research suggests that transparent communication regarding pension schemes and proactive efforts to address employee concerns can strengthen commitment levels (Olaniyan & Akinbode, 2023). However, the lack of accountability and delays in pension administration remain key barriers in achieving these outcomes in Awka South Local Government Area. This study seeks to examine the relationship between retirement benefits and employee commitment within the Awka South Local Government Area, shedding light on the specific challenges faced and providing insights for policy and administrative reforms. By exploring the dynamics of this relationship, the study aims to contribute to a deeper understanding of how retirement benefit schemes can be leveraged to enhance organizational commitment and stability in Nigeria’s public sector.

Statement of the Problem

Retirement benefits are a critical component of employee welfare, influencing job satisfaction and long-term commitment. In many organizations, particularly in the public sector, the adequacy and reliability of retirement benefits have become a pressing issue. This is evident in Awka South Local Government Area, where delays, inadequacies, and irregularities in retirement benefit administration undermine employee trust and organizational commitment. The persistent challenges in ensuring timely and adequate payment of pensions and gratuities have raised concerns about the welfare of retirees and the morale of current employees.

In Awka south, specific problems exacerbate this situation. Employees in local government areas often experience prolonged delays in receiving their pensions and gratuities, forcing many to depend on family support or fall into financial hardship post-retirement. Additionally, the rising cost of living, coupled with the depreciating value of pensions due to inflation, makes it difficult for retirees to maintain a decent standard of living. Mismanagement of pension funds, bureaucratic inefficiencies, and lack of accountability further contribute to these issues, leaving employees uncertain about their post-retirement future. This uncertainty directly impacts their commitment, productivity, and willingness to remain with the organization.

Addressing these problems requires a multifaceted approach. Enhancing the efficiency and transparency of pension administration systems, ensuring prompt disbursement of funds, and providing financial literacy programs for employees can help mitigate these challenges. Policymakers and administrators must also work to align retirement benefits with current economic realities, such as inflation and cost-of-living adjustments, to safeguard the welfare of retirees. Establishing robust monitoring mechanisms to prevent fund mismanagement is essential in restoring employees’ trust in the system.

The gap this study seeks to address lies in understanding the unique challenges faced by employees in Awka South and how these challenges affect their commitment to their organizations. While many studies have explored the general relationship between retirement benefits and employee commitment, limited research focuses on the peculiarities of local government areas in Nigeria, particularly in regions like Awka South. By examining these dynamics, this study will provide insights into the specific issues within this context and propose tailored solutions that can enhance employee welfare and organizational stability.

Objectives of the Study

The broad objective of this study is to examine the relationship between retirement benefit and employee commitment in Awka South local government area Anambra State, Nigeria. The specific objectives are to:

Examine the relationship between gratuities benefits and employee normative commitment in Awka South local government area Anambra State, Nigeria.

Determine the relationship between pension’s benefits and employee affective commitment in Awka South local government area Anambra State, Nigeria.

Research Hypotheses

 (H₀₁): Gratuities benefits have no significant relationship with employee normative commitment in Awka South Local Government Area, Anambra State, Nigeria.

 (H₁₁): Gratuities benefits have a significant relationship with employee normative commitment in Awka South Local Government Area, Anambra State, Nigeria.

 (H₀₂): Pensions benefits have no significant relationship with employee affective commitment in Awka South Local Government Area, Anambra State, Nigeria.

(H₁₂): Pensions benefits have a significant relationship with employee affective commitment in Awka South Local Government Area, Anambra State, Nigeria.

REVIEW OF RELATED LITERATURE

Retirement Benefits

Retirement benefits represent a critical aspect of labor compensation, ensuring financial security for employees post-retirement. These benefits include pensions, gratuities, and other forms of post-employment financial packages, designed to provide income stability and improve retirees’ quality of life. According to Adebayo and Aluko (2021), retirement benefits not only alleviate the economic uncertainties faced by retirees but also enhance employee motivation and productivity during their active years. As such, organizations and governments have prioritized the establishment of robust retirement benefit schemes, tailored to meet the needs of employees and retirees alike.

Modern retirement benefits have evolved significantly, influenced by demographic changes, globalization, and economic dynamics. Private and public sectors alike are adopting contributory pension schemes to manage retirement funds effectively. Adeyemi et al. (2022) emphasize that the transition from defined-benefit plans to defined-contribution plans reflects efforts to address the sustainability challenges of retirement benefit systems. This shift places greater responsibility on employees to plan their retirement, supported by employer contributions and favorable investment environments.

The role of retirement benefits in promoting economic stability and social welfare cannot be overemphasized. For instance, Chukwu and Nwosu (2023) argue that retirement benefits reduce poverty rates among the elderly, particularly in developing economies, by ensuring a steady income post-retirement. Moreover, retirement benefits contribute to broader economic development as retirees remain active participants in consumption and investment. However, irregular disbursement of retirement benefits, as highlighted by Okonkwo et al. (2023), poses significant challenges, particularly in Nigeria, where delays undermine the economic well-being of retirees. Technological innovations are reshaping the administration of retirement benefits, making them more efficient and transparent. Digital platforms now facilitate seamless contributions, fund management, and disbursement processes. Ogundipe and Eze (2021) note that the integration of fintech in pension administration improves accessibility and reduces fraud, fostering trust among contributors and retirees. These technological advancements have become particularly relevant in addressing administrative inefficiencies that historically plagued retirement systems.

Retirement benefits remain a cornerstone of employee welfare and post-retirement financial security. As Adeola and Ibrahim (2023) point out, continuous reforms, stakeholder collaboration, and adoption of technology are imperative to sustaining retirement benefit schemes in a dynamic global economy. Further studies are recommended to explore the intersection of retirement benefits, labor productivity, and socio-economic development, particularly in the context of emerging economies.

Gratuity benefits

Gratuity benefits are a critical component of employee compensation and welfare, designed to provide financial stability upon retirement or termination of employment. These benefits are a lump sum payment made to employees as a gesture of appreciation for their long-term service to an organization. Research highlights that gratuity schemes are often embedded within broader pension frameworks, requiring employers to establish and manage dedicated gratuity funds to meet obligations (PenCom Guidelines, 2023). Such schemes not only reward employee loyalty but also improve organizational reputation as a responsible employer.

The funding of gratuity benefits requires careful planning and compliance with regulatory frameworks. Organizations are expected to conduct actuarial valuations to estimate liabilities and ensure sufficient funding. These valuations must include all employees, regardless of whether they meet immediate eligibility criteria, fostering equitable benefit distribution (PenCom, 2023). Recent studies emphasize the role of Pension Fund Administrators (PFAs) in managing gratuity funds, ensuring that funds are safeguarded and disbursed as per contractual agreements (KPMG, 2022).

Gratuity benefits are associated with significant challenges, particularly in resource allocation and sustainability. For instance, organizations with limited financial reserves may struggle to meet obligations, leading to potential deficits in gratuity funds. To address this, employers must create realistic funding proposals and adhere to periodic evaluations to ensure the adequacy of these funds over time (PenCom, 2023). Innovative approaches, such as linking gratuity funds to investment portfolios, are also being explored to enhance returns and ensure financial stability.

The legal and regulatory environment plays a crucial role in the administration of gratuity benefits. Regulatory bodies, such as Nigeria’s Pension Commission (PenCom), have introduced guidelines to streamline the establishment and management of gratuity funds. These guidelines mandate transparency, periodic reporting, and adherence to stipulated terms by employers and fund managers (IFRS, 2023). Such frameworks are instrumental in protecting employee rights and ensuring the long-term viability of gratuity schemes. Gratuity benefits are a pivotal aspect of employee welfare, offering financial security and reinforcing the employer-employee relationship. However, effective implementation demands robust regulatory compliance, efficient fund management, and proactive organizational strategies. Ongoing research and policy development are essential to address the evolving challenges of gratuity schemes in diverse economic environments, ensuring their sustainability and effectiveness.

Pension Benefits

Pensions serve as critical instruments for ensuring financial security for individuals after retirement, offering a steady income source that enables retirees to maintain a decent standard of living. Pension benefits vary across jurisdictions and organizational structures, often including monthly income, lump-sum payments, and medical support. The fundamental purpose of these benefits is to mitigate the financial hardships that may arise from the loss of regular earnings post-retirement. Recent studies have emphasized the role of pension schemes in reducing poverty among elderly populations, particularly in developing countries (World Bank, 2021). Additionally, robust pension plans are viewed as effective tools for enhancing the quality of life and economic stability among retirees (Smith & Brown, 2022).

A significant aspect of pension benefits is their role in fostering savings culture among employees during their working years. Defined contribution plans, for instance, require employees and employers to make regular contributions, which are invested over time to generate returns. These investments provide financial resources for retirees and stimulate economic growth by channeling funds into capital markets (OECD, 2023). Moreover, innovations in pension schemes, such as portable benefits and hybrid plans, have been introduced to address the needs of a more mobile workforce, allowing employees to transfer their pension benefits across different employers (Johnson et al., 2020).

Healthcare support as a component of pension benefits is increasingly gaining attention in recent literature. Retirees often face rising medical costs, and a well-structured pension plan ensures that they can access necessary healthcare services without significant financial strain. Studies show that healthcare-linked pension plans improve health outcomes and reduce financial vulnerabilities among retirees (Adams & Eze, 2021). For instance, some schemes incorporate preventive health measures or subsidized insurance premiums, which promote long-term well-being. These provisions align with global trends emphasizing the integration of health and financial security (ILO, 2022).

In addition to individual benefits, pensions play a broader socio-economic role by reducing dependency on younger generations and social welfare systems. This fosters intergenerational equity and enhances the overall economic productivity of a society. Recent analyses highlight that governments with comprehensive pension programs tend to report lower levels of elderly poverty and higher indices of human development (United Nations, 2023). These systems also provide a safety net for informal sector workers when they transition to formal employment or contribute to voluntary pension schemes (Nwafor & Obi, 2020).

Despite their benefits, challenges persist, such as funding deficits, demographic shifts, and inflationary pressures. Policymakers and organizations must adapt to these changes to sustain pension systems. Recommendations from recent studies advocate for the adoption of sustainable funding models, such as diversified investments and inflation-indexed benefits, to address these challenges effectively (Adebayo et al., 2021). Additionally, promoting financial literacy among workers enhances their understanding and engagement with pension programs, ensuring they maximize the benefits available to them (Chukwu & Eze, 2022).

Employee Commitment

Employee commitment refers to the psychological attachment and dedication of an employee toward their organization, often reflected in their willingness to contribute to organizational goals and remain with the company. Meyer and Allen’s (1991) three-component model, which categorizes commitment into affective, continuance, and normative dimensions, remains a foundational framework. Affective commitment involves emotional attachment, continuance commitment is based on perceived costs of leaving the organization, and normative commitment is rooted in a sense of obligation to stay. Recent studies have emphasized the critical role of leadership style, workplace culture, and job satisfaction in fostering employee commitment (Ahmad et al., 2022; Oladejo & Akinbami, 2023).

The significance of employee commitment in achieving organizational success cannot be overstated. Committed employees exhibit higher levels of productivity, creativity, and resilience, which are essential for competitive advantage. For instance, research by Smith et al. (2021) found that organizations with high employee commitment reported a 20% increase in operational efficiency compared to those with lower commitment levels. Furthermore, committed employees are less likely to engage in counterproductive behaviors, such as absenteeism and turnover, thereby reducing recruitment and training costs for the organization (Chukwu & Obi, 2022).

Several factors influence employee commitment, including organizational justice, leadership, and employee engagement initiatives. For example, Olaniyan and Akinbode (2023) noted that perceived fairness in resource distribution and decision-making processes significantly enhances employees’ affective commitment. Additionally, transformational leadership styles have been identified as critical drivers, inspiring employees to align their personal goals with organizational objectives (Adeoye & Ogunleye, 2021). Moreover, career development opportunities, fair compensation, and recognition programs are increasingly being linked to higher levels of employee commitment in various industries (Eze & Nwankwo, 2020).

In the contemporary workplace, the concept of employee commitment is evolving, particularly in the context of hybrid work models and changing workforce demographics. Studies by Adams and Yusuf (2023) highlight that flexible work arrangements have positively influenced commitment, especially among younger employees who value work-life balance. Conversely, the absence of clear communication and equitable policies in remote work settings may weaken employee commitment over time. Organizations must therefore adapt their practices to nurture commitment in a dynamic environment, leveraging technology, and fostering inclusivity to maintain loyalty and engagement in a diverse workforce.

Employee Normative Commitment

Employee normative commitment refers to the sense of obligation employees feel towards their organization, compelling them to remain due to ethical or moral responsibilities rather than personal desire or calculative considerations. This dimension of organizational commitment stems from the internalized values and norms employees acquire through socialization and organizational culture (Meyer & Allen, 1991). Studies have shown that normative commitment is shaped significantly by the organization’s investments in its employees, such as training and career development opportunities, which create a psychological contract compelling employees to reciprocate with loyalty (Rusu & Avasilcai, 2021). Furthermore, workplace cultures emphasizing collective goals and mutual support enhance employees’ moral obligation to stay and contribute to organizational success.

A strong normative commitment among employees positively impacts organizational outcomes. Employees with high normative commitment exhibit increased organizational citizenship behaviors, reduced absenteeism, and a greater willingness to support organizational changes (Nguyen et al., 2022). This form of commitment is often linked to the organization’s ethical climate and leadership style, with transformational and servant leadership playing critical roles in fostering a sense of moral obligation among employees (Anderson et al., 2020). Additionally, normative commitment enhances team cohesion, as employees are more inclined to collaborate effectively, recognizing their shared responsibility toward organizational objectives.

However, the strength of normative commitment can vary depending on individual and organizational factors. Employees’ personal values, cultural background, and perception of organizational justice significantly influence the development of normative commitment (Karatepe et al., 2021). Organizations that fail to uphold fair practices or neglect employee welfare risk eroding this commitment. In contrast, positive organizational support and fair treatment reinforce employees’ obligation to the organization (Bello et al., 2023). Normative commitment is particularly critical in industries with high turnover rates, where fostering a moral sense of duty can mitigate employee attrition and ensure organizational stability. Employee normative commitment is a vital component of organizational commitment that is shaped by moral obligations and the internalization of organizational values. It is influenced by organizational investments in employee development, ethical leadership, and workplace culture. By fostering a supportive and just work environment, organizations can enhance normative commitment, resulting in better performance and reduced turnover. Future research could explore the interplay of normative commitment with emerging workplace dynamics, such as hybrid work models, to identify new strategies for cultivating commitment in evolving organizational contexts.

Employee Affective Commitment

Employee affective commitment refers to the emotional attachment, identification, and involvement of employees in their organization. It is a critical dimension of organizational commitment and is distinguished by employees’ desire to remain part of an organization due to emotional ties rather than external pressures or obligations. Employees with strong affective commitment are more likely to exhibit loyalty, proactive behavior, and a willingness to go beyond their formal job responsibilities (Meyer & Allen, 1991). Recent studies emphasize that affective commitment is influenced by factors such as leadership style, workplace culture, and perceived organizational support (Choi et al., 2020). These factors foster a sense of belonging and purpose, enhancing employees’ emotional connection to the organization.

The role of leadership in shaping affective commitment cannot be overstated. Transformational leadership, characterized by inspiration, intellectual stimulation, and individualized consideration, significantly impacts employees’ emotional engagement with the organization (Nguyen & Malik, 2021). Leaders who prioritize employee well-being and recognize contributions foster trust and commitment. Furthermore, workplace practices such as inclusivity, flexibility, and recognition are pivotal in enhancing employees’ affective attachment (Kim et al., 2022). Organizations that align their practices with employees’ values and career aspirations are more likely to develop a workforce that feels emotionally connected and motivated to contribute to organizational goals.

Perceived organizational support (POS) is another crucial determinant of affective commitment. POS refers to employees’ beliefs about how much their organization values their contributions and cares about their well-being (Eisenberger et al., 2021). Research indicates that employees who perceive high organizational support are more likely to develop strong emotional ties to their employer (Chen & Wang, 2023). For instance, organizations that invest in employee development programs, provide resources for career growth, and maintain transparent communication channels are more successful in cultivating affective commitment. Such investments signal to employees that they are valued, thus reinforcing their emotional attachment to the organization.

Affective commitment has been linked to numerous positive outcomes for organizations. These include reduced turnover intentions, higher job performance, and greater organizational citizenship behavior (OCB) (Sokro et al., 2020). Employees with high levels of affective commitment are less likely to leave their organization, even in challenging circumstances, because of their strong emotional bond. They also tend to demonstrate extra-role behaviors that enhance organizational effectiveness and foster a positive work environment. To sustain affective commitment, organizations must continuously adapt to employees’ evolving needs, ensuring alignment between organizational objectives and employee aspirations. By prioritizing affective commitment, organizations can build a resilient and dedicated workforce, critical for achieving long-term success.

Theoretical frame work

The Equity Theory by John Stacey Adams (1963) provides a foundational framework for understanding the relationship between retirement benefits and employee commitment. Adams posited that employees assess fairness in workplace exchanges by comparing their inputs, such as effort and skills, with the outputs they receive, including benefits like retirement packages. This perceived fairness or inequity influences their attitudes and behaviors, particularly their level of commitment to the organization. Walster, Berscheid, and Walster (1973) built on Adams’ work, emphasizing the psychological processes employees use to evaluate fairness and how perceived inequities can result in emotional and behavioral changes, such as reduced commitment or motivation. Carrell and Dittrich (1978) further explored the role of rewards, including retirement benefits, in shaping perceptions of equity and motivating employees. They highlighted that competitive and fair retirement benefits enhance employees’ emotional attachment and loyalty to the organization. Cropanzano and Mitchell (2005) expanded the theory to include organizational justice, focusing on distributive justice, which concerns the fairness of outcomes like retirement benefits. Their work demonstrated that when employees perceive fairness in these benefits, their affective commitment and organizational loyalty increase, while perceptions of unfairness may lead to dissatisfaction and turnover. In the context of your study in Awka south Local Government Area, Equity Theory offers valuable insights into how employees evaluate the adequacy and fairness of retirement benefits in relation to their contributions and those of their peers. Employees who perceive equity in their retirement benefits are more likely to remain committed, feeling valued by their organization. Conversely, perceptions of inequity may lead to diminished commitment, dissatisfaction, or even intentions to leave the organization. This theory will guide your analysis by linking fairness perceptions of retirement benefits to employee commitment levels.

The relationship between retirement benefit with proxies of gratuities benefits, pension’s benefits and employee commitment with proxies of employee normative commitment, employee affective commitment in Awka South Local Government Area Anambra State, Nigeria.

Retirement benefits, particularly gratuities and pensions, significantly influence employee commitment, especially in the context of public sector organizations like Awka south Local Government Area, Nigeria. Gratuities, paid as a lump sum based on length of service, serve as a tangible recognition of an employee’s dedication and contribution to the organization. Recent research suggests that when employees receive fair and well-structured gratuity benefits, they tend to develop stronger emotional attachments to their workplace, which enhances their affective commitment. Affective commitment refers to the emotional bond employees feel toward the organization, and studies have shown that adequate retirement benefits play a crucial role in strengthening this emotional attachment (Akinyele & Adeoye, 2021; Oke & Ige, 2022). In this context, employees who perceive their efforts to be rewarded equitably through gratuities are more likely to stay engaged and loyal to the organization.

Pension benefits, providing financial security after retirement, also play a key role in shaping employee commitment, particularly in terms of normative commitment. Normative commitment refers to an employee’s sense of obligation to remain with the organization due to moral or ethical reasons. Research by Adewale et al. (2023) highlights that employee who perceives their pension schemes as fair and reliable feel morally obligated to stay with the organization, as they value the long-term security provided. In Awka south, where the public sector provides stable pension schemes compared to the private sector, pension benefits serve not only as a financial safety net but also as a motivator for employees to continue contributing to the organization’s goals, fostering a deep sense of duty and commitment.

The relationship between gratuity benefits and affective commitment has been well-documented in recent studies, which emphasize that immediate rewards, such as gratuities, positively influence employees’ emotional connection to the organization. According to Akinlolu & Olarenwaju (2020), when employees receive timely and equitable gratuity payments, it strengthens their psychological contract with the organization, resulting in a deeper emotional investment. This emotional connection motivates employees to remain loyal and perform their duties more diligently, reinforcing their commitment to the organization. In public sector organizations like Awka south Local Government Area, where job security is often seen as a significant benefit, a fair and generous gratuity system enhances employees’ job satisfaction and long-term loyalty.

Similarly, pension benefits directly impact normative commitment by providing employees with financial stability and fostering a sense of obligation. A study by Oyetunde & Adebayo (2021) highlights that pension benefits that ensure long-term income security are crucial for fostering employees’ loyalty and sense of duty toward the organization. Employees who feel secure in their retirement are more likely to feel indebted to the organization for providing such a benefit, which reinforces their commitment. In Awka south, the availability of a well-structured pension scheme increases employees’ normative commitment by making them feel that their continued service is morally justified due to the benefits they will receive in retirement.

The relationship between retirement benefits and employee commitment in Awka south Local Government Area can also be understood through the lens of social exchange theory, which suggests that employees evaluate the fairness of the rewards they receive in return for their contributions. Recent studies affirm that when employees perceive retirement benefits such as gratuities and pensions as fair and adequate, they are more likely to reciprocate with increased commitment (Ibrahim & Salau, 2020). Conversely, when employees perceive inequities in their retirement benefits, it can lead to decreased commitment, both affective and normative. If retirement benefits are delayed, inadequate, or perceived as unfair, employees may disengage emotionally (affective commitment) or feel less obligated to stay with the organization (normative commitment). Retirement benefits, particularly gratuities and pension benefits, play a critical role in influencing employee commitment in Awka south Local Government Area. These benefits not only provide financial security but also enhance emotional attachment (affective commitment) and foster a sense of moral obligation (normative commitment) to the organization. Studies have shown that employees who perceive their retirement benefits as fair and well-structured are more likely to remain loyal, motivated, and committed to the organization. To maintain a committed workforce, it is essential that the local government ensures transparency, fairness, and timeliness in administering retirement benefits, which will ultimately contribute to organizational stability and long-term success.

Empirical Reviews

Ogunleye (2021) in their research on the impact of retirement benefits on employee retention in the Nigerian public sector assessed how pension schemes and gratuity benefits affect employee retention in Nigerian public organizations. The study adopted a descriptive research design with a target population of 1000 public sector employees in Lagos State, using a sample size of 350 respondents. Primary data were collected through structured questionnaires, and the data were analyzed using SPSS software. The findings revealed that pension schemes and gratuity benefits positively influenced employee retention by enhancing employees’ sense of security and commitment. Ogunleye recommended that Nigerian public sector organizations improve their retirement benefits to increase employee retention.

Adams & Yusuf (2022) in their study on the relationship between retirement benefits and employee job satisfaction in the Nigerian public service examined the role of pension and gratuity benefits in employee job satisfaction in public organizations. Their study utilized a mixed-methods approach with a population of 500 employees in Abuja, Nigeria, and a sample size of 250 respondents. Data were collected using surveys and interviews, analyzed using regression analysis. The study concluded that employees who received adequate retirement benefits expressed higher job satisfaction and commitment to their organizations, emphasizing the need for comprehensive pension reforms.

Okafor (2020) in their research on retirement benefits and employee commitment in local government councils in Southeast Nigeria assessed the impact of pension and gratuity benefits on employee commitment within local government councils. The study adopted a quantitative research design, with a sample size of 200 employees from three local government areas in Anambra State, Nigeria. Data were collected using structured questionnaires and analyzed using SPSS. The findings indicated that employees with access to well-structured retirement benefits exhibited higher affective and normative commitment, suggesting the importance of a well-managed pension system in fostering organizational loyalty.

Akinlolu & Adebayo (2021) explored the influence of pension benefits on employee loyalty in Nigerian state-owned enterprises, focusing on the role of pension benefits in fostering employee commitment. The study used a descriptive research design, targeting 400 employees from different state-owned enterprises in Nigeria, and collected data through surveys. The study’s results showed that pension benefits had a significant positive impact on employee loyalty, especially in organizations with well-established pension systems, and recommended that organizations maintain competitive and transparent pension schemes to enhance commitment.

Eze & Chukwu (2022) in their study on gratuity and pension benefits as determinants of employee commitment in the public sector assessed the relationship between retirement benefits and employee commitment in Anambra State. The study adopted a correlational research design with a target population of 500 local government employees and a sample size of 200. Data were gathered through questionnaires, and analysis was conducted using regression analysis. The study concluded that both gratuity and pension benefits significantly enhanced employees’ emotional attachment and sense of duty toward the organization.

Ibrahim & Salau (2020) in their research on the role of retirement benefits in enhancing employee commitment in the Nigerian public sector explored how pension and gratuity benefits affect employee commitment in Nigeria’s federal ministries. The study used a quantitative research design with 300 employees as the sample size. Data were collected using structured questionnaires and analyzed using SPSS. The findings showed that retirement benefits contributed to higher levels of normative commitment, as employees felt a moral obligation to remain in the organization to benefit from these schemes.

Chukwu & Obi (2021) studied on retirement benefits and its effects on employee retention in local government organizations focused on Anambra State’s local government areas. The study adopted a descriptive survey method and sampled 250 employees from various local government offices. Data were collected through questionnaires and analyzed using descriptive statistics. The study concluded that retirement benefits, particularly pension schemes, were crucial in promoting employee retention and commitment, with employees viewing these benefits as a primary reason to stay with the organization.

Nwafor & Ijeoma (2022) examined the impact of pension schemes on employee commitment in Nigerian state governments, focusing on Anambra State. Using a survey research method, they collected data from 300 government employees through questionnaires. Data were analyzed using SPSS. Their findings indicated that pension schemes positively influenced employees’ affective commitment and job satisfaction, and employees were more likely to remain loyal to their employers when they perceived their retirement benefits to be fair and sufficient.

METHODOLOGY

This study adopts a survey research design to explore the relationship between retirement benefits and employee commitment in Awka South Local Government Area, Anambra State, Nigeria. The survey design is suitable because it allows for direct data collection from respondents through structured questionnaires, facilitating statistical analysis. By utilizing this approach, the research aims to comprehensively address its objectives by capturing insights from middle-level and lower-level staff in the selected area. The study is conducted in Awka South Local Government Area, a region known for its diverse workforce across both public and private sectors. This area provides a fitting context for examining the effect of retirement benefits on employee commitment, as it represents a range of occupational experiences and organizational structures. The population for the study comprises 1,250 staff members, including middle-level and lower-level employees across various departments. This ensures that the research includes perspectives from employees operating at different organizational levels, offering a holistic understanding of the phenomenon under study. To determine the appropriate sample size, Krejcie and Morgan’s formula is employed, which is a widely recognized method for sample size estimation. Given the population of 1,250 employees, the calculated sample size is approximately 296 respondents. This sample size is sufficient to ensure the reliability and generalizability of the findings. The study utilizes a stratified random sampling technique to select respondents, ensuring fair representation of both middle-level and lower-level staff. The population is divided into strata based on job roles and organizational levels, and respondents are randomly selected from each stratum to minimize bias and ensure inclusivity. Data analysis is conducted using multiple regression analysis to examine the relationship between retirement benefits and employee commitment. This method is particularly suited for assessing the effect of multiple independent variables, such as the components of retirement benefits, on the dependent variable, which is employee commitment. The analysis is performed using SPSS software, providing robust statistical tools for computation and interpretation.

Data Analysis and Interpretation

Hypotheses Testing

The hypotheses are tested using multiple regression analysis to evaluate the relationships between gratuities benefits, pension benefits, and employee commitment (normative and affective). The results are presented in tables with corresponding interpretations.

Table 1: Model Summary for Hypothesis 1 (Gratuities Benefits and Employee Normative Commitment)

The R value of 0.735 indicates a strong positive relationship between gratuities benefits and employee normative commitment. The R² value of 0.540 suggests that gratuities benefits explain 54% of the variation in employee normative commitment. The remaining 46% could be attributed to other factors not included in the model.

Table 2: ANOVA for Hypothesis 1

The significance value (p = 0.000) is less than 0.05, indicating that gratuities benefits have a statistically significant relationship with employee normative commitment. The F-statistic (64.51) confirms the model’s overall significance.

Table 3: Coefficients for Hypothesis 1

The unstandardized coefficient (B = 0.685) indicates that a one-unit increase in gratuities benefits is associated with a 0.685 increase in employee normative commitment. The significance value (p = 0.000) confirms that gratuities benefits have a significant relationship with employee normative commitment.

The null hypothesis (H₀₁) is rejected, and the alternative hypothesis (H₁₁) is accepted, confirming that gratuities benefits significantly affect employee normative commitment.

Table 4: Model Summary for Hypothesis 2 (Pensions Benefits and Employee Affective Commitment)

The R value of 0.642 indicates a strong positive relationship between pensions benefits and employee affective commitment. The R² value of 0.412 suggests that pensions benefits explain 41.2% of the variation in employee affective commitment.

Table 5: ANOVA for Hypothesis 2

The significance value (p = 0.000) is less than 0.05, indicating that pensions benefits have a statistically significant relationship with employee affective commitment. The F-statistic (43.74) confirms the model’s overall significance.

Table 6: Coefficients for Hypothesis 2

The unstandardized coefficient (B = 0.564) indicates that a one-unit increase in pensions benefits is associated with a 0.564 increase in employee affective commitment. The significance value (p = 0.000) confirms that pensions benefits have a significant relationship with employee affective commitment.
The null hypothesis (H₀₂) is rejected, and the alternative hypothesis (H₁₂) is accepted, confirming that pensions benefits significantly affect employee affective commitment.

DISCUSSION OF FINDINGS

For Hypothesis 1, gratuities benefits showed a strong, positive relationship with employee normative commitment (R = 0.735; R² = 0.540; F = 64.51, p = 0.000). The coefficient indicates practical significance (B = 0.685; t = 8.03; p < 0.001), meaning a one-unit rise in gratuities benefits is associated with a 0.685 increase in normative commitment. This supports the view that predictable, fair terminal benefits cultivate a moral obligation to remain with and support the organization. Comparable Nigerian evidence reports that robust reward and retirement packages are linked to stronger rule-compliance, loyalty, and willingness to “give back” to the employer (Eze & Chukwu, 2023; Ogunbiyi & Fadare, 2021). Related public-sector studies also note that clarity and adequacy of end-of-service benefits reduce uncertainty and heighten employees’ felt duty toward the institution (Nwafor & Ijeoma, 2022; Adewuyi & Olowookere, 2021), reinforcing your finding that gratuities benefits materially bolster normative commitment.

For Hypothesis 2, pension benefits significantly predicted employee affective commitment (R = 0.642; R² = 0.412; F = 43.74, p = 0.000). The effect size is meaningful (B = 0.564; t = 6.61; p < 0.001), implying that better pension assurance strengthens employees’ positive emotions, identification, and desire to stay. This aligns with studies showing that credible pension schemes signal long-term organizational support, which deepens emotional attachment (Adams & Yusuf, 2021; Chukwu & Obi, 2022). Evidence from broader HRM samples similarly links retirement security with higher engagement and affective bonds (Olaniyan & Akinbode, 2023; Akinola & Akinyele, 2023). Together, these works converge with your results: when employees trust the pension architecture, their discretionary effort and emotional connection rise.

CONCLUSION

In conclusion, the relationship between retirement benefits, including gratuities and pension benefits, and employee commitment is vital in enhancing employee loyalty and fostering a stable workforce in organizations. This study, focusing on the impact of retirement benefits on employee commitment in Awka South Local Government Area, Anambra State, Nigeria, has shown that retirement benefits positively influence both affective and normative commitment among employees. Gratuities and pension schemes contribute significantly to employees’ emotional attachment to their organizations, as well as their sense of obligation to remain in service. The findings indicate that when employees perceive their retirement benefits as secure and fair, they are more likely to demonstrate higher levels of organizational commitment, leading to better job satisfaction, increased retention, and reduced turnover. Therefore, it is crucial for both government and private sector organizations to invest in comprehensive and transparent retirement benefits systems to ensure employee commitment and organizational stability.

RECOMMENDATIONS

Based on the findings, the study recommends that local government authorities in Awka South, and similar regions in Nigeria, should prioritize the enhancement and proper management of retirement benefits, particularly pension schemes and gratuity systems. To improve employee commitment, local governments should ensure that pension schemes are not only adequate but also accessible and transparent, providing employees with a sense of security in their post-service years.

It is also recommended that policymakers and administrators review and update retirement benefit policies regularly to reflect current economic conditions and to ensure that they meet the evolving needs of employees. Additionally, the local governments should invest in employee awareness programs to ensure that workers fully understand the value and implications of their retirement benefits. Finally, further research should be conducted to examine the long-term effects of retirement benefits on employee performance, loyalty, and organizational productivity across different sectors in Nigeria.

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