Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Employee
empowerment and
customer satisfaction
Impact of employee empowerment on
customer satisfaction in banking
sector of Pakistan
Mussarrat Bashir
18/8/2010
A THESIS
The Degree of
Abstract
Acknowledgement
Dedication
Table of contents
1. INTRODUCTION
1.1 Background 13
1.2 Problem Formulation 14
1.3 Deficiencies 15
1. 4 significance 16
2. Purpose statement 17
3.1 Theoretically 18
3.2 Practically 19
3.3 Methodologically 19
5. Theoretical framework
7. Literature review
7.1 Introduction 27
7.2 Literature flow diagram 27
7.3 Literature review 28
7.4 Conclusion 41
8.1 Introduction 43
8.2 Paradigm 44
8.3 Research approach 44
8.4 Research design 45
8.5 Research site 47
8.6 Sample 47
8.7 Strategy of inquiry 48
8.8 Method 48
8.9 Validity and Reliability 49
9.1 Introduction 50
9.2 Analyses 50
9.3 Discussion 52
9.4 Conclusion 70
10.1 CONCLUSION/RECOMMENDATIONS
10.2 Introduction 72
10.3 Conclusion 72
10.4 Recommendation 73
11. REFERENCES
12. APPENDICES
List of Figures
Acronyms
List of tables
Abstract
Introduction
Literature review
Research method
Recommendations
Appendices
CHAPTER # 1
INTRODUCTION
Introduction
In the first part of this thesis, the authors will present the background
to the problem, which will then be specified in the second part.
Further, the delimitations of this study will be stated. After reading this
first part, the reader will have gained a better understanding of the
research subject which leads to purpose and related research
questions guiding this study
1.1 Background
Global markets have built a competitive environment in business. If the
organizations want to remain in the market, they must be inventive in
lowering costs and value to customers. So it is essential for an
organization to utilize the full potential of its people. But the
employees need power and control to make decisions to fulfill the
customer’s needs.
According to (Cook, 1992) studies shown that people work with full
energy when they feel happy, even they are ready to sacrifice for
organizations and give their blood to the company. But when they feel
valued and important. They show their involvement in the business.
Company
(Ashis, 2003) Employees therefore become the voice and face of the
organization, but it is not enough that they be trained to provide
quality service .This is one of the arguments for employee
empowerment since the employees act as an interface between the
customers and the organization.
1.4 Objectives:
General objectives:
1.6 Hypothesis
Employee empowerment and customer satisfaction
Employee Empowerment:
The people who are committed to run their business smoothly as well
as retain quality employees to achieve the long term goals of their
organizations. They are also focusing on empowering their employees.
These young managers are well aware of the needs of the future to
compete in the business world.
EE is necessary for running a successful business. The non-managerial
staff members should be allowed to take decisions to fulfill customer’s
needs. It is also called self-willed decision making. This characteristic
can be generated by giving training to employees and this training
could be helpful for employees to take better decisions on time.
This employee empowerment training can be provided through virtual
courses, workshops, seminars, articles and books. The main purpose
behind this EE progrramme is to make the employee aware about his
responsibilities and authority. And how he can create a balance
between his responsibilities and authority. The benefit of this EE
programme is that employee will be satisfied and which in turns retain
for a long time. But without the support of the senior management this
approach cannot work. It is a continuous process. The managers must
Figure 3: Model
Effectiveness
& efficiency
Service quality
Employee Customer
empowerment satisfaction
Trust building
Quick problem
Solving
CHAPTER # 2
LITERATURE REVIEW
2.1 Introduction
This chapter will give an overview of the literature and models that are
related to the research problem .this chapter will introduce the
concepts of employee empowerment and customer satisfaction. This
chapter also presents different factors which are related to the
research.
General
discussion
On topic
EE &
effectivenes EE &quick EE &
EE & quality EE & trust
s & problem customer
service building
efficiency solving satisfaction
Summary
Service quality
In banking organizations, the general offering in a particular industry is
averagely similar, even though they may engage in different
approaches to achieving a differentiation from the others, to be able to
gain more market share and customers in the industry. According to
(Gooronos, 2001), “that almost any retailing bank can provide an
individual with retailing services, but not every bank manages to treat
customers in a way that they are pleased with.” Service providers
therefore seek to differentiate themselves from their rivals by offering
customers higher quality of services than their competitors’, which
makes the basis of their competition to be defined by their services.
(K.Sen, 2008)The nature of services as being intangible,
heterogeneous, perishable, produced, and consumed at same time
makes it peculiar to deliver, and challenging to organizations to
achieve a differentiation from the others.
Following therefore all the qualities of service, and with respect to the
banking sector, a bank cannot inspect its services and products to
weed out unsatisfactory ones before they are presented to the
customer. (Lancaster, Reynolds, 2005)Employees therefore become
the voice and face of the organization, but it is not enough that they be
trained to provide quality service, that they know what to do and how
to do it. It is also essential that they have the requisite authority to
make decisions regarding customer satisfaction. This is one of the
arguments for employee empowerment since the employees act as an
interface between the customers and the organization.
Services are something different from goods and important to
consider. This is a bitter fact that contributes to the failure of service
marketing. These differences are defined by Gornoos that are defined
in the table below.
Difference between services and physical good
Tangible Intangible
Homogeneous Heterogeneous
Production and distribution separated Production and distribution
and consumption
consumption simultaneous processes
A thing An activity process
Core value produced in factory Core value
produced in buyer seller
Interaction
Customer do not (normally) participate in Customers
participate in production
the production process
Can be kept in stock cannot be kept in
stock
Transfer of ownership No transfer of
ownership
(Ashes 2008) Employees therefore become the voice and face of the
organization, but it is not enough that they be trained to provide
quality service, that they know what to do and how to do it. It is also
essential that they have the requisite authority to make decisions
regarding customer satisfaction.
Building trust
CHAPTER # 3
METHODOLOGY
3.1 Introduction
In this chapter, the steps of the research will be illustrated. The choice
of topic and the aim of the research will be discussed. The choice of
the method used will also be justified. The design of the study and the
methods of data collection will be described. The criticism to the
method will be outlined, illustrating the advantages and shortcomings
of the preferred methods. The tests of the chosen methods concerning
validity, and reliability will be tested, in order to justify the approach
taken.
3.2 Study Design:
3.2.2 Questionnaires:
As part of the primary data collection, we handed out questionnaire to
about 100 employees of the bank within five days at the same places in
Lahore and at various intervals as they came in and out of the Bank. This
also can be faulty as we could not meet a large number of people due to
time constraint and because they had to show up at their working places.
The aim of having the employees to participate in the exercise was to get
3.6.1 Validity
According to (Kumar, 1999), the validity of a method is given when a
logical link is established between the questions and the objectives.
(Sharmmar, 1994) identifies three types of validity: the face and
content validity, the concurrent and predictive validity and the
construct validity.
To test the validity of the method of this thesis, the face and content
validity will
be applied. According to (Reishney, 2002), the face and content
validity is achieved when an instrument is valid in the sense that it
measures what it is supposed to.
This type of validity is easy to apply, but presents some problems.
Indeed the impression of logic is subjective. To reduce the subjectivity
of the logic, the authors of the thesis have first revised the
questionnaire many times after both external (with others business
administration students and the teacher) and internal discussions. The
writers also tested their questionnaire on external people.
3.6.1 Reliability
According to (Kumar, 1999), a research method is reliable not only if it
is consistent and stable, but also if it is predictable and accurate.
(Zikmund, 2000) The reliability is the “degree to which measures are
free from error and therefore yield consistent result. According to
(Sekaran, 2003), the reliability can be divided into main important
parts:
CHAPTER # 4
ANALYSES &
RESULTS
4.1 Introduction
In this part, the authors will analyze and interpret the data which is got
through the methods mentioned above. A single case analysis will first
be used and structured according to each bank interviewed, further a
cross case analysis will be undertaken and structured according to the
model.
Descriptive Statistics
Interpretation
The mean and standard deviation values of all the variables are
presented in the table above .This output shows, for each of the 6
variables, the number (N) of participants with no missing data on that
variable. The Valid N, (list wise) is the number 100 who have no
Statistics
gender
N Valid 100
Missing 0
Interpretation:
This table shows the missing values in the questionnaire and in the
present table there is no missing value, it means 100 participants
participated in the survey and answered all the statements mentioned
in the questionnaire.
Statistics
Age
N Valid 100
Missing 0
Interpretation:
The above table shows the missing values. The answering options
which are left blank by the respondent and in the present table there is
no missing value, it means 100 participants participated in the survey
and answered all the statements mentioned in the questionnaire.
age
Cumulative
Frequency Percent Valid Percent Percent
Valid less than 25 11 11.0 11.0 11.0
25 to 35 42 42.0 42.0 53.0
35 to 45 37 37.0 37.0 90.0
45 plus 10 10.0 10.0 100.0
Total 100 100.0 100.0
Interpretation:
The above question has been asked to know about the age of the
candidate to find out in what age category he belongs. The age also
reflects the experience of a person and his attitude towards the
practical life. The result showed that 11% of the people who are
working in different banks are less than 25. People who are in this age
bracket as it is normally anticipated that young blood is more
passionate towards the achievement of the goals. Similarly the results
Superior University Lahore Page 59
Employee empowerment & customer satisfaction 2010
Mussarrat Bashir (Roll # 9112)
showed that 42% people are employed who are between the age of
25-35 and usually People between the age bracket of 35- 45 are 37%
and 45% are those people who have experience and are on the higher
posts.
Interpretation:
Interpretation:
The above bar graph is presenting the different age groups of
employees working in different banks of Pakistan. Approximately
people from all age groups are working which is an encouraging point.
The people belong from the age of 25-35 are above are high in
number. They are the people who are informed about market trends as
well as have practical knowledge. Whereas the ratio of young talent
recently coming from the educational institutes with passion and latest
knowledge are 11%.These are people who will have to command the
future of banking institutions of Pakistan. These include internees,
fresh graduate and post-graduates.
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.084 and value of R Sq Linear is 0.04. Now, the following
calculations are as under,
R Sq Quadratic 0.084
R Sq Linear 0.04
Result 0.04>
0.05----linear
0.04 is less than 0.05 there will be a linear co-relation between
employee empowerment and effectiveness and efficiency. There is
existing positive-weak correlation.
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.134 and value of R Sq Linear is 0.078. Now, the following
calculations are as under,
R Sq Quadratic 0.134
R Sq Linear 0.078
-------------------------------------------------------------------------------
Result 0.05 =
0.05----------------> Linear.
Result 0.05
is equal to
0.05; it
means
there is a
moderate
relationship
between
two
variables.
Interpretation:
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.117 and value of R Sq Linear is 0.117. Now, the following
calculations are as under,
R Sq Quadratic 0.117
R Sq Linear 0.117
-------------------------------------------------------------------------------
Result 0 < 0.05----------------
> Linear.
The above diagram presenting the result is less than 0.05 that means
there will be Liner correlation existing between employee
empowerment and trust building. there is positive relationship
between two variables.
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.327 and value of R Sq Linear is 0.179. Now, the following
calculations are as under,
R Sq Quadratic 0.327
R Sq Linear 0.179
-------------------------------------------------------------------------------
Result 0.14 <
0.05----------------> Linear.
Result 0.14 is greater than 0.05, it means there is non linear
correlation and both variables are positively related with each other.
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.006 and value of R Sq Linear is 0.006. Now, the following
calculations are as under,
R Sq Quadratic 0.006
R Sq Linear 0.006
-------------------------------------------------------------------------------
Result 0 < 0.05----------------
> Linear.
The above diagram presenting the result is less than 0.05 that means
there will be Liner correlation existing between service quality and
customer satisfaction. There is negative relationship between two
variables.
Interpretation:
Interpretation:
3.6 Regression
In this part of the chapter, we will define the relationship between the
dependent and independent variable.
Hypothesis
Employee empowerment and customer satisfaction
H0: Employee empowerment does not have significant impact on
customer
Satisfaction.
H1: Employee empowerment has significant impact on customer
satisfaction.
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .128a .016 .006 .84421
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: customer satisfaction
Interpretation
From the above Table we can watch the affect of employee
empowerment on employee customer satisfaction. For this, we will
have to consider the value of adjusted R Square .The value of Adjusted
R square will tell us that how much employee empowerment affects on
customer satisfaction. So, it is clear that from the values of Adjusted R
Square which is 0.006.So at the end we can say this that employee
empowerment affect customer satisfaction 0.006 times.
ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 1.157 1 1.157 1.624 .206a
Residual 69.843 98 .713
Total 71.000 99
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: customer satisfaction
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.986 .412 9.666 .000
employee empowerment
.129 .101 .128 1.274 .206
cp
a. Dependent Variable: customer satisfaction
Explanation:-
Variables Entered/Removed
Variables Variables
Model Entered Removed Method
1 employee
empowerment . Enter
cpa
a. All requested variables entered.
b. Dependent Variable: effectiveness and
efficiency
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .199a .040 .030 1.07039
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: effectiveness and efficiency
Interpretation
From the above Table we can watch the affect of employee
empowerment on effectiveness and efficiency. For this, we will have to
consider the value of adjusted R Square .The value of Adjusted R
square will tell us that how much employee empowerment affects on
effectiveness and efficiency. So, it is clear that from the values of
Adjusted R Square which is 0.030.So at the end we can say this that
employee empowerment affect on effectiveness and efficiency of
employees 0.030 times
ANOVAs
Sum of
Model Squares df Mean Square F Sig.
1 Regression 4.629 1 4.629 4.040 .047a
Residual 112.281 98 1.146
Total 116.910 99
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: effectiveness and efficiency
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.001 .523 5.741 .000
employee empowerment
.257 .128 .199 2.010 .047
cp
a. Dependent Variable: effectiveness and efficiency
Explanation:-
The table shows the relationship between employee empowerment
and effectiveness and efficiency. Here Significance level is 0.047.which
is 0.047<0.05.SO in this case Null Hypothesis (Ho) is rejected and
Alternative Hypothesis (H1) is accepted. So, at the end we can say that
“There is relationship between employee empowerment and
effectiveness and efficiency.
Employee empowerment and service quality
H0: Employee empowerment does not have significant impact on
service Quality.
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 employee
empowerment . Enter
cpa
a. All requested variables entered.
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .279a .078 .068 .87307
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: service quality
Interpretation
From the above Table we can watch the affect of employee
empowerment on service quality. For this, we will have to consider the
value of adjusted R Square .The value of Adjusted R square will tell us
that how much employee empowerment affects on service quality. So,
it is clear that from the values of Adjusted R Square which is 0.068.So
at the end we can say this that employee empowerment affect on
service quality 0.068 times.
ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 6.300 1 6.300 8.265 .005a
Residual 74.700 98 .762
Total 81.000 99
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: service quality
Explanation:-
The table shows the relationship between employee empowerment
and service quality. Here Significance level is 0.005.which is
0.005<0.05.SO in this case Null Hypothesis (Ho) is rejected and
Alternative Hypothesis (H1) is accepted. So, at the end we can say that
“There is relationship between employee empowerment and service
quality.
Employee empowerment and trust building
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 employee
empowerment . Enter
cpa
a. All requested variables entered.
b. Dependent Variable: employee trust building
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .342a .117 .108 .96350
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: employee trust building
Interpretation
From the above Table we can watch the affect of employee
empowerment on employee trust building. For this, we will have to
ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 12.014 1 12.014 12.942 .001a
Residual 90.976 98 .928
Total 102.990 99
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: employee trust building
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.333 .471 4.957 .000
employee empowerment
.414 .115 .342 3.597 .001
cp
a. Dependent Variable: employee trust building
Explanation:-
The table shows the relationship between employee empowerment
and employee trust building. Here Significance level is 0.001.which is
0.001 < 0.05.SO in this case Null Hypothesis (Ho) is rejected and
Alternative Hypothesis (H1) is accepted. So, at the end we can say that
“There is relationship between employee empowerment and quick
problem solving.
Employee empowerment and quick problem solving
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 employee
empowerment . Enter
cpa
a. All requested variables entered.
b. Dependent Variable: quick problem solving
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .157a .025 .015 1.06229
a. Predictors: (Constant), employee empowerment cp
b. Dependent Variable: quick problem solving
Interpretation
From the above Table we can watch the affect of employee
empowerment on quick problem solving. For this, we will have to
consider the value of adjusted R Square .The value of Adjusted R
square will tell us that how much employee empowerment affects on
quick problem solving. So, it is clear that from the values of Adjusted R
Square which is 0.015.So at the end we can say this that employee
empowerment affect quick problem solving 0.015 times.
ANOVAb
Model Sum of Squares df Mean Square F
1 Regression 2.800 1 2.800 2.481
Residual 110.590 98 1.128
Total 113.390 99
a. Predictors: (Constant), employee empowerment cp
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.890 .519 5.570 .000
employee empowerment
.200 .127 .157 1.575 .118
cp
a. Dependent Variable: quick problem solving
Explanation:-
3.7 Correlations
In this section the correlation between each of the variables are
computed and adressed.The results are presented in the table. for the
ease of analyses only correlation values more than 0.05 assumed to be
important for further analyses. In correlation we will go for Pearson
because for Pearson there should be two conditions which Are as
1. Relationship between variable should be Linear.
2. Data should be normally distributed.
Through correlation we can know this thing that there is association
between these variables
3.8 Conclusion
CHAPTER # 5
OVERALL
CONCLUSION
5.2 Conclusion
Empowerment is difficult to establish in an organization due to the
ambiguous feelings of Management and employees about the
implementation of the concept. Many organizations will have “top
down” management as well as empowerment initiatives, which must
be managed in because of their inconsistencies. The more that top
management wants an internal commitment from its employees, the
more it must involve employees in defining work objectives, specifying
how to achieve them and setting stretch targets.
The purpose of this research thesis is to determine the extent to which
the banking sector of Pakistan practice employee empowerment, and
how it impacts on customer satisfaction, has in the authors’ opinion
been fulfilled.
From the analysis the authors’ found out that empowerment motivates
the employees to greater service, and creates a greater sense of
accomplishment or satisfaction in their jobs; by reducing dependency,
irresponsibility and encouraging team work which overall leads to
achieving organizational goals and objectives.
The authors’ have also observed a relationship between employee
empowerment and customer satisfaction. The organizational structure
and the HRM practices empower the employees, who subsequently,
influence the service quality perception by customers positively, and
bring about customer satisfaction.
This free flow of information back and forth accounts for the
employees’ ability to take responsibility, and display confidence during
interactions with the customers.
In the authors’ opinion, the empowerment of employees enables the
employees to own the job, exert freedom while controlling the service
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http://www.lansforsakringar.se/privat/om_oss/in_english/Sidor/default.aspx
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http://www.siq.se/2007arsmottagare2.htm
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http://www.fedtraining.com.tr
Questionnaire
Age:
Less than 25 25 – 35 35 – 45 45
Years Years. Years. Years
plus.
Disagree
Please select the response which best
Strongly
Agree
Neutral
Strongly
represents the level of agreement that
your organization have with following
statements
agree
Disagree
Strongly
Agree
Disagree
Neutral
Strongly
represents the level of agreement that
your organization have with following
statements
agree
Disagree
7 I am satisfied with the productivity and efficiency of
my department.
8 The Management believes that employee
performance is directly related to employee
Empowerment.
Agree
Disagree
Please select the response which best
Strongly
Neutral
Strongly
represents the level of agreement that
your organization have with following
statements
agree
Disagree
2 This is the job in which I feel a sense of
5 accomplishment.
2 I have the support and authority to make the
6 decisions necessary for accomplishing assigned task.
Customer satisfaction
2 In your opinion, customer satisfaction is most
7 important for any baking institution.