Chapter Overview
This chapter embodies the research framework, hypothesis testing, methods of data collection, instrumentation, population and sampling criteria, and data analysis and research procedure. The chapter depicts a pictorial diagram of the research framework and shows the interface between the predictor variables (independent), explanatory variables (dependent) and the demographic dimensions. There are five main questions for the research, which enquire on the motivational and de-motivating factors influencing employer contribution to the levy. Each question is tested by a null hypothesis.
The chapter provides an account of the data collection process for both the pilot study and the field study. The sample for both the pilot study and field study distributed amongst the participating population are laid out in tabular form. This is followed by an explanation of the instruments used in the research, which are mainly the questionnaires, the validity and reliability testing process and the tools used for each process.
Research Framework
The research framework was developed to feature the research questions and hypotheses.
The motivational and de-motivating factors influencing employer contribution to the levy (Figure 3.1.) were used as the predictor (independent) variables for this study. These factors were identified as critical elements influencing employer contribution to a levy system in previous studies (Ziderman, 2001).
The explanatory (dependent) variable for the research explained employer contribution to levy and was measured using four dimensions: business voluntary contribution; business anticipation in fulfilling their obligations; business has no corporate social responsibility and all inclusive contribution to the levy. Since the questionnaire was developed by the researcher, a reliability of the dimensions was tested for consistency. Data collected for the dimensions in this variable were tested against the demographic dimensions and the independent variables. As
outlined earlier, the objective of the research was to assess the motivational and de-motivating factors (independent variables) influencing employer contribution to the levy (dependent variable).
Pilot study
The sample population for the pilot study was classified into four main economic sectors namely: Private, Public, Donors and Training Institutions. The private sector category was further divided into five sub-sectors (tourism, manufacturing, construction, services and others).
The rationale behind this structure was to get an in-depth assessment of willingness to contribute to the levy between and within the different sectors and sub-sectors (private) of the economy relative to the independent variables.
However, due to the low response rate in the pilot study (23%), the research framework was revised to reflect the available data. The Services sector accounted for half of the overall data collected, thus the need to modify the demographics dimensions to only two sectors: Services and Others. The Others sector in this modification included the construction industry, manufacturing, tourism, donor agencies and government.
Field study
As a result of the low response rate encountered during the pilot study, the researcher had to modify the research framework to overcome those challenges. Several factors were found to be responsible for the low response rate but most significant was the use of the MSI database.
Majority of businesses that participated in the pilot study had not contributed to the levy and were not aware of the existence of the levy and the related issues. It was therefore necessary to select a sample population with only businesses that had contributed to the levy. A list of all levy contributors within the last three (3) years was acquired from the Gambia Revenue Authority (GRA), the levy fund collectors.
As highlighted earlier, previous studies showed that there are motivational and de-motivating factors responsible for employer contribution to a levy system. In developing the research framework, twelve (12) motivational factors and five (5) de-motivating were adopted
from the work of Ziderman (2001). The researcher also identified eight (8) demographic dimensions characterising businesses in the Gambia (Figure 3.1.).
The rationale behind this approach was to evaluate the motivational, de-motivating and employer contribution factors based on the demographic dimensions of the study. This was followed by analysis of the motivational and de-motivating factors influence on employer contribution to the levy.
Figure 3.1. Research framework
Research Variables and Dimensions
In order to assess the motivational and de-motivating factors influencing employer contribution to the levy, two dimensions were developed for each of the variables and were rated from strongly disagree to strongly agree on a 5-point Likert Scale. Table 3.1. and Table 3.2.
provides a detailed description of the motivational and de-motivating variables and their dimensions. The four dimensions measuring employer contribution to the levy are also provided in Table 3.3 below.
Table 3.1. List of motivational factors variables and dimensions
No. Predictor Variable Predictor variable dimensions (factors)
1 Easy access to the skills training fund will give more encouragement to your business to contribute to the levy.
1 Perceived benefits from
levy 2 Subsidizing your staff training needs through the skills training and development fund will encourage your business to contribute to the levy.
3 A national skills training system that provides adequate supply of properly trained workers for industry will encourage your business to contribute to the levy.
2 Confidence in training
system 4 A national skills training system that caters for both the formal and informal sector will encourage your business to contribute to the levy.
5 An open decision making process for the allocation and use of levy funds will encourage your business to contribute to the levy.
3 Accountability and Transparency of levy system
6 A feedback on fund allocation that is well documented and understood by all stakeholders will encourage your business to contribute to the levy. encourage your business to contribute to the levy.
9 A levy that also covers public institutions will encourage your business to contribute to the levy.
5 Unrestricted levy
coverage 10 A levy that also covers NGO’s will encourage your business to contribute to the levy.
(table continues)
Table 3.1. (continued)
No. Predictor Variable Predictor variable dimensions (factors)
11 Levy exemption policy based on successful implementation of your businesses’ annual staff training program will be preferred by your business.
6 Levy exemption policy
12 Your business prefers to contribute to the levy than conducting annual staff training programs.
13 A tight levy collection process which does not allow employers to evade contribution will encourage your business to contribute to the levy.
7 Levy collection regime
14 Because a lot of businesses can evade contribution to the levy, your business does not want to contribute to the levy.
15 If the levy is put in closed accounts and is only accessible for training use, this will encourage your business to contribute to the levy.
8 Security of levy proceeds
16 Part of the levy is accessible to government for use in other activities different from skills training; this discourages your business to contribute to the levy.
17 A majority voting right for employers’ representatives in the management board of the National Training Authority will encourage your business to contribute to the levy.
9 Stakeholder
representation 18 A majority voting right for employers’ representatives in the skills training fund will encourage your business to contribute to the levy.
19 Greater decision making autonomy by employers on levy budgetary allocations at NTA board management level will encourage your business to contribute to the levy.
10 Fund management
autonomy 20 Employers’ ability to control skills training budget at NTA management board level will encourage your business to contribute to the levy.
21 The levy system ensures a secure and sustainable means of funding for skills development and will encourage your business to contribute to the levy.
11 Security and stability of
funds 22 The levy system ensures stability for skills training and development and will encourage your businesses’ to contribute to the levy.
23 A training levy charged on employers payroll bill is fairer than a levy charged on business annual turnover and will encourage your business to contribute to the levy.
12 Levy charged on payroll
24 A levy charged at 2% of employer’s total payroll bill will encourage your business to contribute to the levy.
Table 3.2. List of de-motivating factors variables and dimensions
No. Predictor Variable Predictor variable dimensions (factors)
1 The levy contribution has been imposed on your business as a way to ensure that you contribute to national skills training.
1 Levy Act perceived
imposition 2 The levy contribution is purely to the interest of government and not your business.
3 If your business were consulted the levy would not have been charged on annual turnover.
2 Perceived high levy rate
4 The levy rate charged at 0.25% of annual turnover is too high for your business to afford.
5 The levy is purely another form of tax for your business to finance skills development.
3 Perceived tax burden by
employers 6 Your business is already overburdened with tax payment;
bringing in another tax payment only adds more burdens to your business.
7 The introduction of the Education Levy in 2007 came at a time when there was an economic slowdown for your business.
4 Untimely introduction of
levy 8 The Education Levy was introduced in 2007 when your business environment was reasonably good.
9 A levy charged on annual turnover is unrealistic and unjustified; there is no correlation between training and your business turnover.
5 Levy taxed on annual
turnover 10 The levy charged on annual turnover will only lead your business to bankruptcy when profit margins are low.
Research Hypotheses
Although employer contribution to the National Education and Technical Training Levy is mandatory, there could be situations where employers might avoid payment or pay less than required if loopholes are present in the system. Therefore, to ensure optimal contribution to the levy, it is crucial that employers are in full support of the levy system and thus pay willingly the amounts due without forceful enforcement. To assess employer contribution to the levy, it is vital to develop hypotheses that will help test factors influencing employer contribution. From the research framework, five (5) different hypotheses are developed ready to test factors influencing employer contribution to the levy.
Hypothesis 1:
H1: There are no significant differences on motivational factors based on the demographic factors.
H1-1: Motivational factors have no significant difference based on registration status of business.
H1-2: Motivational factors have no significant difference based on economic sector of business.
H1-3: Motivational factors have no significant difference based on position in business.
H1-4: Motivational factors have no significant difference based on gender.
H : Motivational factors have no significant difference based on sector body membership.
Table 3.3. List of employer contribution dimensions
No. Dependent Variable Dimensions
1 Your business will voluntarily contribute to levy even if payment was not made compulsory.
2 Your business never anticipated in fulfilling its obligations to contribute to the levy when payments are due.
3 Your business does not have any corporate social responsibility to the citizenry and therefore should not pay for national skills training and development
4 Government, employers and NGO's should all contribute to the financing of national skills training and development.
H1-6: Motivational factors have no significant difference based on years of sector body membership.
H1-7: Motivational factors have no significant difference based on number of employees.
H1-8: Motivational factors have no significant difference based on years of operation.
Hypothesis 2:
H2 There are no significant differences on de-motivating factors based on the demographic factors.
H2-1: De-motivating factors have no significant difference based on registration status of business.
H2-2: De-motivating factors have no significant difference based on economic sector of business.
H2-3: De-motivating factors have no significant difference based on position in business.
H2-4: De-motivating factors have no significant difference on gender.
H2-5: De-motivating factors have no significant difference on sector body membership.
H2-6: De-motivating factors have no significant difference on years of sector body membership.
H2-7: De-motivating factors have no significant difference on number of employees.
H2-8: De-motivating factors have no significant difference on years of operation.
Hypothesis 3:
H3: There are no significant differences on employer contribution dimensions based on the demographic factors.
H3-1: Employer contribution dimensions have no significant difference based on registration status of business.
H3-2: Employer contribution dimensions have no significant difference based on economic sector of business.
H3-3: Employer contribution dimensions have no significant difference based on position in business.
H3-4: Employer contribution dimensions have no significant difference on gender.
H3-5: Employer contribution dimensions have no significant difference on sector body membership.
H3-6: Employer contribution dimensions have no significant difference on years of sector body membership.
H3-7: Employer contribution dimensions have no significant difference on number of employees.
H3-8: Employer contribution dimensions have no significant difference on years of operation.
Hypothesis 4:
H4: Motivational factors do not influence employer contribution to the levy
H4-1: Motivational factors do not influence business voluntary contribution to the levy.
H4-2: Motivational factors do not influence business anticipation in fulfilling their obligations to levy contribution.
H4-3: Motivational factors do not influence businesses with no corporate social responsibility to their citizenry.
H4-4: Motivational factors do not influence an all inclusive contribution to the financing of skills training.
Hypothesis 5:
H5: De-motivating factors do not influence employer contribution to the levy
H5-1: De-motivating factors do not influence business voluntary contribution to the levy.
H5-2: De-motivating factors do not influence business anticipation in fulfilling their obligations.
H5-3: De-motivating factors do not influence businesses with no corporate social responsibility to their citizenry.
H5-4: De-motivating factors do not influence an all inclusive contribution to the financing of skills training.
Methods of Data Collection
Pilot study
The categorization of the sample population by sector (Table 3.4.) below was intended to provide a better understanding of employers’ motives in contributing to the levy across sectors of the Gambian economy. The data collection strategy was in response to the sample population categorization. This was thought to provide an opportunity to evaluate the factors that are most
pre-dominant in each sector. The sub-sectors within the private sector were designed to provide a deeper understanding of the economic sector as they are the sole contributors to the levy.
Table 3.4. Distribution of the sample population by sector
Private sector Sample
Population Tourism Manuf. Const. Service Others
Public
Large companies are likely to contribute larger proportions to the levy due to their large turnover and are likely to form majority of the non-responses due to company size. Table 3.5.
was designed to cater for this foreseeable problem. As outlined, large businesses formed the majority proportion (75%) of the sample size in the case of the private sector. It was anticipated that this would potentially increase the responses of the larger businesses.
Table 3.5. Stratification and allocation of sample population for the Private Sector
Private sector Survey
Type
Tourism Manuf. Const. Service Others
Total
As stated earlier, there was need to review and revise the method of data collection for the field study in order to improve the low response rate (23%) encountered during the pilot study.
The field study therefore included only private sector businesses that contributed to the levy between 2007 and 2009. The other consideration for the selection of the sample population was primarily proximity; those businesses within the Banjul and Kombo St. Mary regions. Instead of focusing centrally on business economic sector as in the pilot study, the field study included several more demographic dimensions for the research framework.
To increase the response rate, it was decided that the questionnaires be administered in the form of structured close-ended interviews by surveyors recruited by the NTA, who supported the study. However, during the process it was realized that majority of the respondents preferred to answer the questionnaires by themselves and later submitted to or collected by the surveyors. At the end of the data collection process, there were 62 completed questionnaires, which represented a response rate of 49%.
Instrumentation
Pilot Study
The pilot data was collected using a self-administered closed structured questionnaire. A two-man team recruited by the National Training Authority (NTA) in the Gambia administered the questionnaire. The team were supervised by the Head of the Research Unit at the NTA. The questionnaires were hand delivered to the participants and were accompanied with a covering letter stating the purpose, confidentiality and agreed collection dates. The team made several follow-ups including telephone calls and personal visits.
Field study
The data collection went through the same process as in the pilot study. Copy of the research questionnaire and covering letter are provided in Appendix A and B respectively. Some of the questionnaires were administered by the surveyor in the form of a structured close-ended interview for those respondents who accepted that mode of data collection.
The questionnaire has a 5-point Likert Scale anchored by ‘1= strongly disagree’ to ‘5=
strongly agree’. The questionnaire has four (4) main parts namely:
Part A (8 dimensions), dealt with the demographic data of the respondents. This section recorded the registration status of the business, the economic sector, the respondent’s position in the business, the respondents’ gender, the number of employees working for the business, the age of the business, business membership to sector body and years of membership in sector body.
Part B (12 variables) looked at motivational factors (positive independent variables) that could influence employers to positively contribute to the NETTL. The twenty-four (24) dimensions enquired for the twelve (12) independent variables. Two (2) questions were developed for each independent variable to test the respondents’ motives for each specific variable.
Part C (5 variables) dealt with the de-motivating factors (negative independent variables) that could influence employers reluctance to contribute into the levy. Some of the questions included levy imposition, levy as another form of taxation, lack of employer consultation and buy-in during levy policy enactment, levy charged on turnover rather than the payroll levy which is the norm in SSA. Two (2) dimensions were developed for each de-motivating variable to test the respondents’ motives for each specific variable.
Part D (4 dimensions) of the questionnaire assessed the dependent variables and enquired about business voluntary contribution; business anticipation in fulfilling their obligations;
business has no corporate social responsibility and all inclusive contribution to the levy. The dimensions developed in this section were designed to measure the explanatory variable on the framework.
Validity testing
Content validity is precisely the extent to which the questionnaire items provide adequate coverage of the investigative questions and hypotheses. The researcher tested content validity through consultation with a prominent Labour Market Specialist in The Netherlands (Mr. Hans Bekkers) to validate the item contents. The Specialist worked for the EU in the Gambia and numerous other assignments in the TVET sector over the last decade. The Specialist conducted item by item assessment of the questions and provided suggestions and/or comments for consideration.
Reliability testing
As the survey items were developed by the researcher, a reliability test was conducted following the pilot study. The Statistical Package for Social Science (SPSS) PC 16.0 version was used. The researcher used Cronbach’s α (alpha) value to test internal consistency (scale reliability coefficient) for both the independent and dependent variables.
Table 3.6. Reliability statistics for motivational factors (independent variables) Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items N of Items
.920 .924 24
Using Cronbach’s α (alpha) for Part B of the independent variables (motivational factors) the survey items internal consistency (scale reliability coefficient) is 0.920. This value is considered high to permit the use of this section of the questionnaire.
Table 3. 7. Reliability statistics for de-motivating factors (independent variables)
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items N of Items
.822 .827 10
Using Cronbach’s α (alpha) for Part C of the independent variables (de-motivating factors) the survey items internal consistency (scale reliability coefficient) is 0.822. This value is considered high to permit the use of this section of the questionnaire.
Using Cronbach’s α (alpha) for Part C of the independent variables (de-motivating factors) the survey items internal consistency (scale reliability coefficient) is 0.822. This value is considered high to permit the use of this section of the questionnaire.