Employee Empowerment and Customer Satisfaction

Employee empowerment & customer satisfaction 2010
Mussarrat Bashir (Roll # 9112)
Employee empowerment
and customer satisfaction
Impact of employee empowerment on
customer satisfaction in banking sector of
Pakistan
Mussarrat Bashir
18/8/2010
A THESIS
Submitted to the Superior University, Lahore

As partial fulfillment of the Requirements
for
The Degree of
MASTER IN BUSINESS ADMINISTRATION

Submitted by: Mussarrat Bashir (Roll #9112)
Supervised by: Professor Nadeem Iqbal
Superior University Lahore Page 1

Abstract
The aim of this study is to better understanding of empowerment in the customer

service sector by the perspectives of employees working in different banks of
pakistan.empowerment can be described by giving power to frontline personnel to
meet the needs of the customers. in order to gain deep analyses into quantitative
method is used to analyze the data, for this purpose questionnaire is designed to test
a sample of 100 Pakistani banking staff. Empowered employees reported higher levels
of organizational trust, which in turn resulted in higher levels of customer satisfaction.
we found that there is low level of employee empowerment practices in Pakistan’s
banking institution of Pakistan. Inside of today’s unstable public and private sectors,
require management to seek out, evaluate and embrace, new planning, organizational
and operating techniques to remain on track in pursuit of their long-term goals.
Among the proposed theories, models and plans submitted in the past decade to the
managerial community for possible acceptance and implementation is the concept of
employee empowerment. In this thesis, employee empowerment is defined and then
95 recent articles related to this concept are summarized and examined for emerging
trends pertinent to arguments regarding the overall success of employee
empowerment as a practical benefit to organizations.

Acknowledgement
I would like to express my sincere thanks and appreciation to all those who have
assisted me with this research study. These include the people who kindly made
themselves available and shared their knowledge and experience when I am conducting
survey, and family members, friends and fellow students who have encouraged me
during this time.
Sincere thanks and appreciation also go to the staff at the superior university Lahore
library whose assistance, patience and helpfulness during 2009 and 2010 have been
invaluable. In addition, thanks to the people working at book shop who kindly gave my
document the final ‘once-over’ prior to submission.
And finally, a special word of thanks to my study leader, Professor Nadeem Iqbal
appreciates his support, guidance and honesty, which have enabled me to complete this
thesis.

Dedication
We are dedicating our work to our parents and respected teacher Professor Nadeem
Iqbal, who have played a vital role in our studies and have guided us at every step with
their precious ideas. No doubt this dedication is insufficient and we can never repay for
the role which they have played in our studies but we are sure that their work will prove
itself an asset in our life. Especially I dedicate this research thesis to the founder of
Pakistan and the leader of the nation QUAID-E-AZAM MUHAMMAD ALI JINNAH who
has struggled for this beautiful piece of Land for Muslims of subcontinent.
"The foundations of your State have been laid and it is now for you to build and build as quickly
and as well as you can" (Muhammad Ali Jinnah, 14 August, 1948)
"Gandhi died by the hands of an assassin; Jinnah died by his devotion to Pakistan".
(Lord Pethick Lawrence)

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. Significance of the study 18
3.1 Theoretically 18
3.2 Practically 19
3.3 Methodologically 19
4. Objectives and Hypothesis
4.1 Main research Questions 21

4.2 Hypotheses 21
5. Theoretical framework
5.1 Theoretical stances 22

5.2 Model 25
6. Structure of the Thesis
7. Literature review
7.1 Introduction 27
7.2 Literature flow diagram 27
7.3 Literature review 28
7.4 Conclusion 41
8. Methodology
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. Analysis and results
9.1 Introduction 50
9.2 Analyses 50
9.3 Discussion 52
9.4 Conclusion 70
10. Thesis conclusion
10.1 CONCLUSION/RECOMMENDATIONS
10.2 Introduction 72
10.3 Conclusion 72
10.4 Recommendation 73
11. REFERENCES
12. APPENDICES

List of Figures
Figure 1: The structure of the report (own diagram)

Figure 2: Service-profit chain(Gooroonos and Kotler)
Figure 3: literature flow diagram (own diagram)
Figure 4: bar graph
Figure 5: scatter plot

Acronyms
EE: ( employee empowerment)

CS :(customer satisfaction)
QPS: (quick problem solving)
WOM: (word of mouth)
IBP :(Institute of Bankers Pakistan)
CP:(competitiveapproach)

List of tables
Table 1: Descriptive statistics

Table 2: regression table
Table 3: correlations table

Abstract
The aim of this study is to better understanding of empowerment in the customer

service sector by the perspectives of employees working in different banks of
pakistan.empowerment can be described by giving power to frontline personnel to
meet the needs of the customers. in order to gain deep analyses into quantitative
method is used to analyze the data, for this purpose questionnaire is designed to test
a sample of 100 Pakistani banking staff. Empowered employees reported higher levels
of organizational trust, which in turn resulted in higher levels of customer satisfaction.
we found that there is low level of employee empowerment practices in Pakistan’s
banking institution of Pakistan. Inside of today’s unstable public and private sectors,
require management to seek out, evaluate and embrace, new planning, organizational
and operating techniques to remain on track in pursuit of their long-term goals.
Among the proposed theories, models and plans submitted in the past decade to the
employee empowerment. In this thesis, employee empowerment is defined and then
95 recent articles related to this concept are summarized and examined for emerging
trends pertinent to arguments regarding the overall success of employee
empowerment as a practical benefit to organizations.

Figure 1: The structure of the Report
Introduction
Literature review
Research method
Analyses and results
Final conclusion and
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.
(R Maxwell, 2005) Employees in a service organization and particularly, those who have
frequent contacts with the customer usually serve as representatives of both the
Organization and their products or services to the customer at contact point. The quality
of the service and the satisfaction the customer may derive will be an assessment of the
entire service experience. Employees who are empowered in an organization can either
portray a positive or negative picture to the customers.
(James, 2005)As we move ahead in today's fast paced business environment, it is

imperative for an organization to have a highly skilled, competent, satisfied work force.
In order to obtain such employees, an organization must offer education programs, let
employees be involved with decision-making and have adequate reward systems. This
new type of management style is called Employee Empowerment .To achieve this new
management technique, the organization, as a whole, must undergo an extensive
transformation process.
Empowering employees is a top-down change that must begin with management. The
purpose of this paper is to examine this process and make some recommendations for

how managers can approach and implement a sound employee empowerment
program. Empowerment involves the delegation of authority from management to
employees, on hierarchical forms of work organization and sharing of information
between and within different levels of the organization. . (Conger and Kanungoo,
1998)Empowerment also implies the freedom and ability to make decisions and
commitment, not just to suggest them or to be part of making them.
Empowerment is about power and enhancing. Important Perspectives A study of the

above views yield a few important perspectives
(i) any organization that wishes to empower its employees has to proceed in a
systematic structured manner. This requires an insight into the antecedents/pre-
requisites, which will facilitate empowerment efforts and sustain those in the long run.
(ii) Empowerment is a psychological state and hence it needs to be measured
periodically to assess the outcomes of empowering efforts.
(iii) While empowerment and participation do require almost the same ideology, yet
they cannot be considered synonymous. (Zeithaml, 2006) Antecedents of Employee
Empowerment While most researchers agree that organizations can play a very positive
role in empowering behavior, there is lack of consensus on how it can be actually done.
Prominent work has been limited to mere identification of conditions/organizational
practices/techniques that, if used, could lead to empowered employees.
Considering that, a satisfied customer and employee are of important value to the
organization; it therefore, becomes the duty of the management to put in place a
system that would ultimately generate either satisfaction, or dissatisfaction of their
employees as well as their customers.
Company
Internal marketing External marketing
“Enabling the promise” “Making the promise”
Employees Interactive marketing Customers
“Delivering the promise”

Figure 2: service – profit chain
Source: Kotler and Armstrong 2001
As shown in figure service marketing will need to consider internal marketing and
interactive marketing besides the external marketing. The interactive marketing heavily
depend on customer contact employee as explained earlier and the quality of customer
contact employee will in turn be depending on fair recruitment. This is also called
service- profit chain where internal employee satisfaction leads to customer satisfaction
This according to (Baruch, 1998), forces organizations to re-think their strategy” because
as he points out, companies today recognize that they can compete more effectively by
distinguishing themselves with respect to service quality and improved customer
satisfaction.
(Shevlin, 2004) If having satisfied customers was all it took to grow, banks would be in
heaven: Few bank customers are dissatisfied. But banks want customers with deep
relationships which few have. Satisfaction scores aren't good predictors of consumers'
future purchase intentions. Banks should stop relying solely on satisfaction as a success
metric and also measure customers' perceptions of its customer advocacy.
(Grönroos, 2001)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, “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. Employees are a crucial stakeholder group for almost every business. For
most businesses they are also a highly potent resource. Yet, while many businesses talk
the language of employee involvement, engagement or empowerment, few actually

practice it. (Goiter, 1995), Director of Tomorrow’s Company, says: “All too often the
rhetoric of employee empowerment masks the reality.”
(Hewitt, 2005) “Accounting for People”, the UK Trade and Industry Secretary, recently
announced that companies would be required to report annually on the quality of their
staff management and its impact on business performance. This will form part of the
Operating and Financial Review and is expected to force boards to view human resource
issues as strategic and central to business success.
(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.
According to (Looy, 2003) with reference to the specific nature of service delivery,”
empowerment becomes a very important issue to organizations producing services.” In
that, the customers and the employees are engaged simultaneously in the production of
the service.
(Grönroos, 2001)In order for the management to trust that the employees are
successful in dealing with their customers, the management has to give the employees
the authority and necessary support to succeed at it. He points out that employees’
need to be empowered to perform, but they also need the support of good
management, support systems, technology, and information. In matters concerning
financial commitments, investments and spending customers, not only need
reassurance that their finances are safe, but also that they are valued for committing
their stakes with a particular financial institution.
Customers of a bank rely on the services delivered to them by the bank whether they
are saving, depositing, taking loans, cashing cheques or buying funds, they count on the
employees responsible for handling issues relating to them, to deliver high service
quality in other to increase their satisfaction.
When service interactions are not properly controlled and handled, or not even handled
at all, the outcome is poor perception of service quality and customer dissatisfaction.

1.2 Purpose statement
The purpose of this survey based quantitative research is to determine and identify the
perception of employees about the employee empowerment in banking sector of
Pakistan. At what extent these organizations are practicing employee empowerment,
and how much this empowerment has impact on service quality and customer
satisfaction.
In matters concerning financial commitments, investments and spending customers, not

only need reassurance that their finances are safe, but also that they are valued for
committing their stakes with a particular financial institution. Customers of a bank rely
on the services delivered to them by the bank whether they are saving’ depositing,
taking loans, cashing cheques or buying funds, they count on the employees responsible
for handling issues relating to them, to deliver high service quality in other to increase
their satisfaction.
The authors hope to achieve this by collecting information regarding the bank, from
relevant personnel within the bank, and some of their customers, then constructing a
model based on the variables in the frame of reference of the paper, to verify whether
the findings matches or differs from the theory behind employee empowerment, service
quality and customer satisfaction.
This study will evaluate the usefulness and effectiveness of employee empowerment
and its impact on users and beneficiaries.
Employers can understand the causes of dissatisfied employees and how they will be
affected by that indirectly in service organizations

1.3 Significance of the study
 This research will provide a deep view to the implications of employee

empowerment to employees, government, employers, students and the general
public who have an interest in the study.
 The readers will be able to understand new relations between different variables
and conceptual understanding of these variables. They will read new concepts in
the context of banking sector e.g. organizational image, effectiveness and
efficiency and building trust.
 The conceptual model provides important information to managers that how

they can improve their employee trust and commitment towards the
organization as well as to their work through proper policies.
 This study will also educate the customers in deciding whether institution is
really fulfilling its responsibilities for serving the community or just showing off
to promote its business.
 The concepts which are elaborated in the study can be implemented practically
by understanding the need of quality services.
 This study has equal importance for managers of banks to move forward to
empowering employees for serving best to customers. Because the employees
are the important asset of the organization. Everything can be copied (strategies,
policies) but only employees cannot be copied.
 This research is targeted at the management of organizations within the banking

industry, and industries producing highly intangible-dominant services, as
suggestion regarding employee empowerment, which when practiced can
enhance customer satisfaction and create a good customer- perceived service
quality.
 This study will be significant in promoting good work place environment and for
motivation of it employees and customers. It will helpful for managers for

corporate strategies and effective HRM.when they will be able to better
understand the importance of empowering employees.
 Moreover this study will be helpful not only in banking institutions but all type of
service organizations. These institutes are assured of competitive advantage.
 This study will also provide recommendations on how to empower employees to

make customers happy and built their trust on the institute. It will also helpful in
understanding customer needs and what tactics can be used to satisfy customers
and give benefits to them.
 This study is useful for employers, employees, governments, and all type of
institutions how they can transform themselves and practice the things which
help employee to provide services and facilitate customer in a better way.
 Present study is in quantitative form because it shows a clear picture in

quantified terms (tables, figures and numeric etc). Findings are comprehensive
and general.
 This study serves in the banking sector whereas the past studies are done in
other fields of other sectors of services e.g. telecommunication, hospitals, hotels
etc.
 It is also significant in this way that past researches are conducted in the context
of only one bank and present study is working in multiple renowned banks of
Pakistan.
 This research is based on gender equality. Because Pakistan’s 53% population

consisted on females. This is the time when women are also playing their role in
all fields of life. There are large numbers of women working in banks.
 A large sample size is chosen for the survey whereas in the past studies small
sample sizes are selected for the survey so this study is also significant in this
way.
 This study provides the information about the banking sector of Pakistan
whereas the last researches and studies are in the context of Europe. Pakistan’s
financial institutions can get benefits by utilizing the findings of this study.


1.4 Objectives:
Main Objectives of this study is:
To determine the impact of employee empowerment on customer satisfaction in

banking sector of Pakistan
General objectives:
 To determine the impact of employee empowerment on effectiveness and

efficiency.
 To determine the impact of employee empowerment on service quality.
 To determine the impact of employee empowerment on organizational image.
 To identify the impact of employee empowerment and quick problem solving.
1.5 Research question

What is the impact of employee empowerment on customer satisfaction in banking
sector of Pakistan?
1.6 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.
Employee empowerment and effectiveness & efficiency
H0: Employee empowerment does not have significant impact on effectiveness

& efficiency.
H2: Employee empowerment has significant impact on effectiveness &
Efficiency.

Employee empowerment and service quality
H0: Employee empowerment does not have significant impact on service Quality.
H3: Employee empowerment has significant impact on service Quality.
Employee empowerment and trust building
H0: Employee empowerment does not have significant impact on trust building.
H4: Employee empowerment has significant impact on trust building.
Employee empowerment and quick problem solving
H0: Employee empowerment does not have significant impact on quick problem
Solving.
H5: Employee empowerment has significant impact on quick problem solving.

Theoretical framework
Here we would develop theories for our research based on our search for literature.
According to (Strauss, 1998) “Theory refers to a set of well-developed concepts related
through statements of relationship, which together constitute an integrated framework
that can be used to explain or predict phenomena”. The theories developed would serve
as the frame of reference for the paper. In this part, the most important theories linked
to this research will be presented. The authors then design the empirical study according
to the presented theory.
(1)Equity Theory and Employee Motivation
(2) Management giving power to people
Being a marketing approach dealing extensively with people, is selected by authors of
the thesis as a result of the prestudy.
1.7 Equity Theory and Employee Motivation
The advanced minded entrepreneur are focusing on the smooth functioning of the
business and also retaining quality staff, as a part of achieving their long term
organizational goals.
Today employee empowerment is an essential part for the success of any business,
especially in service sector. It involves the expressions and avenues through which the
non-managerial staff members are conditioned to be able to make certain important
company decisions, with the support and backing of a well planned empowerment
program. The self-willed decision making capacity is generated from the amount of the
power vested by the management within the employees, during the training provided.
Employee empowerment training actually culminates in the whole set-up becoming an
empowerment model. The guided ability to take some decisions empowers the
employees and also adds to the retaining module adopted by the company.
Employee empowerment can be supported by the management of the organizations by
providing virtual courses, special employee empowerment workshops, through books
and articles and even software packages. There are a myriad of dedicated magazines
that companies can subscribe to and convert effectively to employee driven decision-
making. The basic concept behind the employee empowerment program is to give
authority and command to the individual, which in turn gives the company happier

employees, who feel important! The delegated choice and participation and
subsequently responsibility makes the employees feel like first hand representatives of
the business.
Employee empowerment can only work if the management team believes in it. The
issuing of authority to the employees could be graded, but it needs to be a rippling
activity within the organization and consistent in nature. The entrepreneur or
management should be completely committed to allowing the employees to make
decisions and execute them, also taking responsibility. The management could pre-
determine and define the scope of decisions made and work towards effectively
building decision-making teams. This model used in employee empowerment is very
effective because it enables the staff to contribute toward efficient steering of the
company profits, in a way that benefits all.
When the managers are ready to empower their employees it means they are willing to
give up control in certain areas of work production. The system must have scope for
improvement of the strategy and flexibility within teams. The ability of the employees to
contribute to a choice and direct decisions, leads to an alleviated feeling of self-worth
and dedication. The sense of self and the retaining of some power is a deadly
combination that works wonders on the psyche of the employee. The elimination of the
hawk’s eye and the regular criticism creates a more positive environment.
The strategy of implementing a suggestion box, where the suggestions are made
without fear of retribution is a great management tool. However, it is important that the
managers read and consider the suggestions. The management could also attempt
establishing a monthly forum like a symposium or monthly newsletter. It is very
essential to ensure that the employee suggestions are addressed and discussed,
especially if the management sees potential. The points or rewarding system will give
you a competitive work force.
The employee empowerment program is designed to work only with the support of at
least some suggestions being approved for some impact on the company, failing which
the same empowerment program only re-confirms to the employees that the strategy is
a farce and real power continues to be exercised only by the managers. The empowered
work force moves front-stage and is matched by action. Once effective empowerment is
executed. The age old concept that the work force is more efficient using their brains
and not just their hands is proven true with the various case studies on employee
empowerment.
The concept of employee management is designed to act as a practical guide to
leadership in liberated organizations. The empowerment ripples on to the manager-
managed relationship and becomes deeply organizational in good time. Empowerment
does not only include delegating job authority, it also means job enhancement via

decision making. The traditional bureaucracy and the age old emphasis on control and
standardization are now things of the past. The new vistas involve innovation, flexibility
and commitment and consistent improvement.
Employee Empowerment:
1.8 Management giving power to the people
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 be committed to execute this empowerment
approach in their organization.
Management has to define the scope of the authority delegated to every individual.
Managers must be willing to give necessary authority to their employees, when
employees are allowed to take decisions, and have choice; they have the feeling of self-
worth. Managers have to check the successful implementation of the EE programme on
continuous basis.
A suggestion box should be kept in every department of the organization where the
suggestions are made without any fear. These suggestions must be addressed and
discussed. The employee, whose suggestion is excellent, must be rewarded. This
programme is successful only when the employees see its outcomes. Some suggestions
should be approved and executed. The old idea that only the senior members have the
right to hold power and control is gone. The new approach is continuous improvement,
creativity and innovation, flexibility and commitment to goals and to organization.

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.
Literature flow diagram
General
discussion
On topic
EE
EE &
&
effectivenes
effectivenes EE
EE && quality
quality EE
EE &quick
&quick EE
EE && trust
trust EE
EE &&
ss &
& service
service problem
problem building
building customer
customer
efficiency
efficiency solving
solving satisfaction
satisfaction
Summary
Figure: 3 Own diagram

Literature review
Inside of today’s unstable public and private sectors, external pressures from political,
environmental, social and technological sources require management to seek out,
evaluate and embrace, new planning, organizational and operating techniques to
remain on track in pursuit of their association’s mission and long-term goals. Among the
myriad of proposed theories, models and plans submitted in the past decade to the
employee empowerment. Within the spectrum of discussion on employee
empowerment, rhetoric inevitably mentions the relevant success or failure of
empowerment as a viable tool to upper management.
According to (Kirkman, 1989) empowerment of employees is continuously growing
today in Europe. Multinationals have a great concern on empowerment of employees.
Empowerment increase employee motivation and positive orientation towards his work
role and finally results in higher productivity.(Watson,2003)over the past few years,
traditional management has gone and new democratic approaches has takes its place.
Employee empowerment, which came up in 1990s, is known as one of the new
management concepts. (Hanold, 1997) However, when the relevant literature is analyzed,
this concept is understood to have a longer history than previously thought with its roots
Human Rights Movement of 1950 and 1960s, empowerment has rather closely related to
the various concepts and techniques designed to democratize the work-place.
(Elmuti, 1997). As a matter of fact empowerment was given place in the publications of
Pre-1990 that discussed topics such as work enrichment, participative management,
employee motivation, total quality -control, individual development, quality circles and
strategic planning. Without any doubt, perceptible increase in the number of articles
related to employee empowerment was seen after 1990s. (Honold, 1997) Giving power
and control to non-managerial staff. In these approaches human resource is not
managed through power but human resource in organization is managed through
facilitation and coordination. (Nykody, 1995) Managers must be committed to empower
their staff by doing some practical things. (Develop strategies; implement strategies,
assessment, and evaluation)
(Kotelni, kov, 1992) people are the most important asset of any organization, every
thing can be copied e.g. (technology, strategy, policies, and products) but only the
human mind, ideas can not be stolen. (Hubbard ,1979) a machine can perform equal to
fifty ordinary men but there is no machine which takes place of only one extraordinary
man.(conger , Kanungo ,1988) empower employee in a way that will enhance the
feelings of self efficacy in them. They will come with feeling of power and able to
accomplish their tasks and objectives. (Maxwell, 2005) the organization must have to

offer training programmes to obtain a highly skilled, competent and satisfied workforce.
Ensure employee participation in decision making and motivate them through adequate
reward system. (Tschohi, 1997) empowered employee has the power to take decision at
spot to solve customer problem. If the employee fails to satisfy customer immediately
the company go in lose in long term. Empowerment is an important mean to satisfy
customers. (Thomas, velthouse, 1990) Empowerment is not only limited to self efficacy,
it is much more complexed. Empowerment is an intrinsic task motivation that can be
divided into four dimensions (meaningfulness, competence, self determination, and
impact).
According to (cook, 1994) empowerment can be divided into three levels
(1) Employees involvement in decision making but the managers are responsible for
Implementation of these decisions.
(2) Managers are responsible for making strategic decisions but employee is also part
of it. The managers have to discuss these decisions with their employees.
(3) Employees are totally involved in decision making process.
(Tschohl, 2001) empowerment of an employee is the critical part of customer service. It

is a guaranteed investment because if you provide excellent services to your customers,
they will come back with more additional customers for you. But it is only possible when
you give freedom and authority to employee to satisfy customer as he want. The
employees are allowed to take decisions without moving toward supervisors and
managers. If employees are allowed to do work in this way then the organization have
empowered workforce otherwise not.
(Quinn, sprietzer, 1997) have found three consequences to empower individuals in any
organization.
Sense of fulfillment:
There should be sense of meaning and the employee has a feeling of experiencing full
freedom in taking any type of decision regarding providing services to customers.
Greater motivation:
Empowerment increase self motivation in employees and it results in complete
understanding of job responsibilities.
Higher commitment:
The employees which are empowered they enjoy a sense of ownership in organization
this benefited to the organization to have a committed workforce.
(Philemon, Elizabeth, 2004) to maintain a competitive advantage in banking sector,

emphasis has given to customer satisfaction. The people who interact with customers,

their behavior and attitude play an important role to influence customers in positive and
negative way. But they only do when employees are happy and empowered.
(Grazier, 1998) the people who are in customer service department they not only
provide services to customers but also facilitate them in decision making process. They
offer best suitable option to the customer. They also offer services which are convenient
in price. These decisions can be made only when employees have authority to take
decisions. But the traditional managers are not in the favor of empowering employees.
So the employees failed to provide excellent services to customers and ultimately which
results in dissatisfied customers. (Maxwell, 2005) it is the duty of top management to
empower employees. By doing this they will be successful in enhancing the total quality
of organizational goals as well as customer satisfaction. Managers are responsible to
create a climate in which quality of organizational goals, customer satisfaction, and
employee motivation can be enhanced.
(Tschohl, 1997) said that many managers think that giving authority to customers is
empowerment but actual empowerment is that employees have power to break rules
to take care of their customers. (Kauffman, 2006) generally, two tracks to grow your
business. One is to sell the product or services to the current customer again and again,
but the second way is to find new customers. If the current customers are satisfied he
will take new customers to you by using word of mouth (WOM) the words spread like
flu germ. One thing should be kept in mind that communication is a powerful tool to
satisfy customers because the effective communication creates opportunity for the
organization to gain more customers. John Nordstrom founder of national departmental
store chain said to his employees “listen customers carefully, provide the things they
demanding, encourage them to come again to your shop, and do everything within your
power to satisfy the customers. When the customer leave the store must be satisfied”.
(John.J, 1994) the organization which wants to fulfill the needs of their customers and
wish to make them happy, first they make efforts to focus on their employee needs. The
management has to encourage employees to take initiatives and discourage the
traditional chain of commanding which employees have no authority to take decisions.
(Saucy, 2000) according to her today’s business success is linked with giving freedom of
action to employees. It will helpful in successful business. The duty of managers is to
hire qualified employees and encourage them to work according to their own innovative
ideas. It will make the environment well and the employee will use his full energy to
achieve organizational goals.
(Fyfe, 2009) time management is also the part of employee empowerment every
employee has two lives,
(i) Work life
(ii) Home life.

It is the duty of the manager to give free hand to employees to manage their time
according to their own convenience. Because it is an important factor of employee
dissatisfaction and which finally results in customer dissatisfaction.
(Wright, 1998) the companies which are giving more attention to employee
empowerment have high employee retention rate, lower absenteeism. Because
employees perform 20% better than not empowered employees. It leads to satisfied
customers. If the heart and head of an employee are engaged to take one decision, they
will be highly motivated to achieve organizational goals.
(Heathfield, 1994) it is an old concept when you are empowering people, you do
something for others and bestowing something to others but it’s a wrong thinking you
are doing things for yourself and your organization.
Effectiveness & efficiency
(Conger, Kanangu, 1988) management researchers and practitioners have keen interest
in concept of empowerment and related management practices. This interest is due to
several reasons. First studies on leadership and managerial skills suggest that the
practice of empowering subordinate is a principal component of managerial and
organizational effectiveness. Second analyses of power and control within organization
reveals that the total productive form of organizational power and effectiveness grow
with superior sharing of power and control with subordinates. (Mayers, 1987)
employees are effective performers when they are empowered. Because it is the fact
that the employees who have authority to take decisions perform better. And utilize the
resources of the organization efficiently. Therefore most of the companies are striving
for employee empowerment to get maximum output by using minimum resources.
(Weaver ,John J 1994) training programmes are also the part of employee
empowerment because the programmes are main effective source for employee
developments. They enhance their creativity and innovation and also improve their
communication skills. (Coffey, 2009) the managers of the organizations will coach the
employees about appropriate resolution. The employee will feel courageous when the
managers have a direct conversation with employees. It will help the employee to better
coordinate with customers to satisfy them.
(Jackson, 1992) the person who can make decisions individually and collectively in a
team can solve customer’s problems effectively, utilize the resources efficiently. It will
helpful lowering the cost and increase the quality of the services and overall helpful in
customer satisfaction. Empowerment is one of the most effective ways of enabling
employees at all levels to use their creative abilities to improve the performance of the
organization they work for, and the quality of their own working life.
(Chaturvedi, 2008) Employee empowerment is a kind of the risk management process
whereby a culture of empowerment is developed information—in the form of a shared
vision, clear goals, boundaries for decision making, and the results of efforts and their
impact on the whole is shared competency in the form of training and experience is
developed; resources, or the competency to obtain them when needed to be effective
in their jobs, are provided; and support in the form of mentoring, cultural support, and
encouragement of risk-taking is provided.(Adams, 1990)For an organization to enjoy the
returns from employee empowerment the leadership must diligently work to create the
work environment where it is obvious to all that employee empowerment is desired,
wanted and cultivated. Management’s responsibility is to create the environment for
employee empowerment. (Meyers, 1987) When organizational leadership has started to
take actions to encourage employee empowerment it is then up to the employees to
decided if they wish to take advantage of the opportunity or not. It is not unusual for
only a small minority to accept the challenge initially. Also it is very likely that some
fraction will never respond. It is the large middle group that must be convinced to
practice employee empowerment and they will finally succeeded in performing well by
giving better output to their organization. (Blanchard, 2000) Empowerment is not giving
people power but letting that power out. People already have plenty of power in the
wealth of their knowledge and motivation to do their jobs magnificently. Empowerment
is a top-down value driven issue.
(Barry, Fox, 2007) (Spence, Nathan, 1986)Employee empowerment is a process that
benefits individuals, managers and the overall productivity of companies. Employees
become more involved, feel valued and stimulated to over deliver.
(Petter, 2002)Generally accepted components of employee empowerment include:
Power – the actual authority to follow through with ideas generated.
Decision Making – the inclusion and participation in decision-making groups,
meetings and activities.
Autonomy – the time, freedom and mobility to fully take part in the decision-
making process.
Initiative and Creativity – the ability to express one’s drive and motivation.
Knowledge and Skills – the resources, training and support required to bestow
sense of competence to the employee, a true feeling that they are fully prepared
and equipped to contribute in a beneficial manner.
Accountability – as in being held responsible for the results of track able goals and
achievements towards the organization’s mission.
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
Physical goods services
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
Source; Gronroos, 1990, p.28

(Gornoos, 1997) Services, being the fastest growing segment of the economy, provide
for additional challenges and opportunities. The traditional 4 P's were created to fit with
tangible goods. (Booms, Bittner, 1981) the ‘7’Ps extending the traditional 4 P's by three
additional ones applicable especially in service environments. The new P's are referred
to as Process, Physical Evidence or Presentation, and People. According to an interview
with (Deutsch, Kotler, 1990) refers to the 4 P’s (Product, Price, Place and Promotion) as
being universal. Concerning the service marketing field, some additional factors can be
introduced. In order to develop service quality: People, Presentation and Process are to
be considered also in financial service marketing According to (Looy, 2003) with
reference to the specific nature of service delivery, “empowerment becomes a very
important issue to organizations producing services.” In that, the customers and the
employees are engaged simultaneously in the production of the service. This
inseparability is what is considered by the organization in choosing how best to serve its
customers. The inability of the management to control the service encounter makes the
employees responsible for the quality of service delivered to the customers. In order for
the management to trust that the employees are successful in dealing with their
customers, the management has to give the employees the authority and necessary
support to succeed at it.
(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.
(Lashelay, 1995) points out that employees’ need to be empowered to perform, but
they also need the support of good management, support systems, technology, and
information. (Grönroos, 2001) employee empowerment in banking operations is largely
concerned with the improvement of customer service quality. Specifically, it is intended
that through empowerment employees will be more committed to successful service
encounters and will have the necessary discretion and autonomy to do whatever is
needed to “delight the customer”. Investigation of the various initiatives under the
name of empowerment reveals a variety of managerial meanings and motives for
empowering employees. Four different motives can be identified. These shape the
nature of the initiatives selected in an organization. These in turn are likely to generate
different levels of commitment, and allow different degrees of autonomy and discretion
among the empowered. Provides a framework for understanding managerial motives in

selecting different forms of empowerment. Suggests some contextual factors which are
likely to influence managerial perceptions, and finally considers the impact of initiatives
on the empowered.
Building trust
(Litienjie, Tekufon, Awomodu, 2008)Top management commitment and employees

empowerment are one of the most important and vital principle in total quality
management, because it was often assumed to have a strong relationship with
customer satisfaction. Top management commitment is creating an organizational
climate that empowers employees is very imperative.In matters concerning financial
commitments, investments and spending customers, not only need reassurance that
their finances are safe, but also that they are valued for committing their stakes with a
particular financial institution. Customers of a bank rely on the services delivered to
them by the bank whether they are saving, depositing, taking loans, cashing cheques or
buying funds, they count on the employees responsible for handling issues relating to
them, to deliver high service quality in other to increase their satisfaction.
(Laschinger,K.spence, 1983) In today's dramatically restructured banking work
environments, organizational trust is an increasingly important element in determining
employee performance and commitment to the organization. The authors used Kantar’s
model of workplace empowerment to examine the effects of organizational trust and
empowerment on two types of organizational commitment. A predictive, non
experimental design was used to test Kantar’s theory in a random sample of 412
Canadian banking staff. Empowered employees reported higher levels of organizational
trust, which in turn resulted in higher levels of affective commitment.
(Nyhan, 2000) has explored the feasibility of a trust-based organizational paradigm as a

new model for public sector management. The author proposed that participation in
decision making, feedback from and to employees, and empowerment of employees led
to increased interpersonal trust (between supervisor and employee) in a public
organization. These trust-building practices between supervisors and workers led to
increased productivity and strengthened organizational commitment. The analysis
demonstrates that the trust-based model is a viable paradigm for increasing
interpersonal trust, organizational commitment, and productivity in the public sector.
(Gomez, Rosen, 2001) the authors have examined the relationship between managerial
trust and employee empowerment. Hypotheses derived from leader-member exchange
(LMX) theory suggested that the quality of leader-member relations mediate the linkage

between managerial trust and employee empowerment. Whereas previous researches
have pointed to the influence of organizational and social structural variables on
empowerment, this research showed the importance of manager-employee
relationships on perceived empowerment.
(Laschinger, K.spence, 1983) However, empowerment did not predict continuance
commitment-that is, commitment to stay in the organization based on perceived lack of
other job opportunities. Because past research has linked affective commitment to
employee productivity, these results suggest that fostering environments that enhance
perceptions of empowerment and organizational trust will have positive effects on
organizational members and increase organizational effectiveness. (Artgib, 1988) when
you are in service or hostile work environment. You don't need many experiences like
this to have your trust in an employer, or employment in general, be severely
undermined. Managers have to create such an environment, where the communication
between management and the employees should be fantastic, and where the leaders
and managers worked together to guide the team to real and tangible success and the
feeling are more one of family than of human resource. In those places, the turnaround
in employees has been at a minimum, and people who have left for seasonal reasons
have fought to return. All of this experience has hammered one point: building
employee trust should be the first objective of the corporate and management staff. It is
higher than customer experience in making a company successful. The companies
where employee trust was highly valued are the ones to which are successful in gaining
loyal customers.
(Gib, 1998)So when it comes to management training, remember that success is built on
trust, and trust will do more to motivate and inspire productivity than threats. If you
want to see a turnaround in every aspect of your business, invest some time and effort
into building employee trust. (IOB, 2004)A recent report by the Institute of banking
(IOB) articulated the importance of a positive work environment for ensuring customers
safety in banks settings. Creating and sustaining trust throughout the organization is
identified as a critically important leader activity.
(Decker, Wheeler, Johnson, Parsons, 2001)Yet, after a decade of downsizing and

restructuring during which thousands of employees were let go, employees are
understandably distrustful of management. Moreover, they feel that management staff
does not respect them or their work.
(Laschinger, 2004) This lack of respect is manifested in several ways, including the
manner in which management communicates important organizational decisions and
the failure to address concerns expressed by employees about the implications of these

decisions.(Lawson, 2001)Build the trust of your employees from the Inside out: Four
Keys to built employee trust will also helpful in growing your business. According to
Lawson these four keys for successfully empowering an organization’s personnel:
Involve your employees in the decision-making process; involve your employees in the
planning process; offer praise freely; and provide continual training and support.
(Helling, 1993)Perceived lack of trust and respect in the work environment has
detrimental effects on both the organization and employees. Employees who are
distrustful are less likely to contribute to organizational goals and activities to the same
degree as those who experience high levels of trust in their organization. Management
will have to work hard to regain the trust of their employees if the profession is to
survive the impending shortage of qualified practitioners. Recruitment of newcomers to
the profession and retention of those currently in the system will depend on regaining
this lost trust. An important strategy for increasing recruitment and retention of
employees will be to create work environments that manifest justice, trust, and respect
and thereby facilitate professional practice. Kantar’s notion of creating conditions of
work effectiveness through the establishment of empowering work structures is a
logical basis for this strategy.
Quick problem solving

(Hausen, 1993) many business want to satisfy the customer totally satisfy by anticipating
their problems before their occurrence and solve them quickly when they occur. To
fulfill the customer’s needs, employee required some autonomy to solve customer
problems, and make them happy when they leave the store. They must need significant
autonomy to make changes according to requirement of the customer within limited
time and resources. (Tschohl, 1995) when the employees are allowed to fully satisfy
customers, it is a guarantee that the customers will come again and again .but when
customers come with some sort of problem to the store. It is the time for the employee
to gain customer life time value and loyalty for the organization but it is possible only
when employee can take decision without moving towards the supervisor and the
manager.
(Coffey, 2009) happy employees make the customers happy, even using their best
possible resources to satisfy customers. Sometimes employees solve the customer
problems with their own resources. Even the customers want something which they do
not have but they guide the customers to the right location and sometimes go with
them and it leaves a good impression in the mind of the customer. (Helling, 1993) every
organization of the world make mistakes in serving customers, no matter how excellent

their products and employees are efficient in making customers happy. For this purpose
many companies have make customers call centre to quickly solve customer problems.
(Ettore, 1997) making a mistake and then admitting it, is a good experience for an
employee and as well as for the customers. At first it felt panicking to employees to
apologize to customers. But on the other hand the customers who are doing business
with that company will feel that it is the best company of the world. According to
(Michelle, Kaminski 1988), empowerment is defined as a developmental process that
promotes an active approach to problem solving, increased political understanding and
an increased ability to exercise control in the environment. As people develop through
the stages of empowerment, they become more able to analyze issues in context and
apply their skills to successfully resolve them. Those in the earlier stages might succeed
at only relatively simple problems, while those in later stages are likely to be effective at
handling broader, more complex issues. When most people refer to employee
empowerment, they mean a great deal more than delegation. (Tschohl, 1992) definition
of empowerment is employees having an autonomous decision-making capability and
acting as partners in the business, all with an eye to the bottom line. While many
employees understand their contribution to the work at hand, how many know their
contribution to the bottom line?
Employee empowerment, as stated by (Kotler, 2003) includes the transfer of authority,
responsibility and the provision incentives to detect, care about and deal with customer
needs. (Peppered, 2000)As stated before, established two-way communication enables
the bank to improve by listening to customers. (Hans, Albinsson, 2004) describe that
employee in positions dealing with customer complaints have to be well trained in order
to be able to handle and act upon service problems. (Kotler, 2003) adds that leading
service companies utilize front line employees using measures such as training to gain
competitive advantage, by enabling workers to deal with problems or complaints
immediately and effectively. (McCall, 2004). Customer complaints have to be seen as an
inexpensive way for market research that stresses areas in need of improvement.
(Anonymous, 2005) To provide additional service to clients, Umpqua Bank created the
'ten-minute switch kit', which allows prospective customers to change to Umpqua in ten
minutes, right in the bank with employee assistance. (Kotler, 2003). Tackling evolving
service problems in the right manner prevents loosing customers, and may even
strengthen the relationship between the organization and its clients. In detecting service
problems, only five percent of customers complain to the company, most just switch the
provider. In order to prevent this loss of customers, proposes a complaint management
system. Encouraging customers to complain, by using different channels, as e.g. face to
face contact, e-mail, call center service, fax or traditional mail, empowers the

organization also to learn about weaknesses and provides an opportunity for
improvement.
Customer satisfaction:
(Spetz, Butler; 2008)In the past years the competition in the banking sector is increasing.
There is more choice for the customers and thereby the banks have to work harder to
attract customers. (Peter, Waterman, 1982) focused that good organizations align their
strategies and goals to the requirement s of their customers’ .One way is to care
employees and empower them. (George 1992)There exists an interaction between the
desired results and customer satisfaction, customer loyalty and customer retention.
They may go by other names such as patients, clients, buyers, etc. Without the
customer it is impossible for any business to sustain itself. Achieving the desired results
is frequently a result of customer actions. (Stravic, 1991) Any business without a focus
on customer satisfaction is at the mercy of the market. Without loyal customers
eventually a competitor will satisfy those desires and your customer retention rate will
decrease. Customer satisfaction may be a good predictor of compliance with care
regimens and, for family planning, continuation of method use. A growing body of
research has found that in both developed and developing countries, customers share
seven major concerns in judging quality of service. (Kols, 1998) These are:
1. Respect. Customers want to be treated with respect and friendliness. Customer
interpret courtesy, confidentiality, and privacy as signs that providers are treating
them as equals.
2. Understanding. Clients’ value individualized service and prefer providers who make
the effort to understand their particular situation and needs. They want Providers to
listen to them and to explain options in terms that they understand.
3. Complete and accurate information. Clients value information. They worry that
Service providers are not telling them all the facts, especially negative information
About contraceptive methods.
4. Technical competence. Customers can and do judge the technical competence of
the
services they receive, although they may not use the same criteria as providers and
they may not be technically accurate. Ultimately, clients judge technical competence
by whether their needs are met or their problems are resolved.
5. Access. Customers want ready access to services and supplies. A convenient location
and prompt services are important, but access also means that services are reliable,
affordable, and without other barriers.
6. Fairness. Clients want providers to offer thorough explanations and examinations to
everyone alike. They complain that providers offer preferential services to friends,
relatives, those from a higher social class or certain ethnic group, those with political
connections or those who offer bribes.
7. Results. Clients come for services for a specific purpose. They are dissatisfied when
told to come back another day or to go to a different facility, or when providers
dismiss their complaints as unimportant.
(Peabody, Bernhart, 1999) Customer' satisfaction is an important indicator of service
quality. Client satisfaction is difficult to assess, however, when many clients express
satisfaction regardless of technical quality. (Scott, Smith, 1994) Evidence on the
association between client exits interviews regarding provider skill and technical quality
evaluated from expert observation or an equivalent gold standard is mixed, but suggests
that there would be little correlation.
(Hoadley, 1999)Employed during employee empowerment actions would sometimes
produce unexpected results, which might hinder or promote progress towards the goals
set out initially to satisfy customers and to benefit the organization as well as
employees. Employees were not necessarily more productive, but perhaps quality
would rise as attention to defects increased. Or representatives would not answer more
customer service calls, but the calls they did respond to had higher perceived customer
satisfaction as a result. According to (Owens, Olsen, 1999) also the exact benefits an
organization hoped to reap from employee empowerment did not always propel the
organization any closer to its long term goals or mission. Herein a lack of adequate
planning had identified inappropriate parameters to affect with empowerment.
(Alibegovic, Hawkins, Parmer, 2009)Most managers and scholars emphasized that an
organization’s most important tool for gaining a competitive advantage is its people
and; in order for the firm to attain success employees must be involved and active and
in a result they will be succeeded in satisfying not only customers but building long term
relationships with them.

Summary
In today’s competitive work conditions, existence of a strong connection between the

continuation of existence of organization and the competences that provide the satisfaction
to the customers, between gaining this competence and modern management philosophy
and practices, this theory of employee empowerment (EE) seems to be getting more
obvious. This theory also provides a vital competence that companies should possess in
their competitive conditions. Employee empowerment is a philosophy and arrangement
that will help companies gain this vital competence.
The research has shown the organizations that are focusing on the quality of services
are achieving high level of customer satisfaction. But it is understood that the key to
achieve customer satisfaction is empowerment of employees .there is a positive and
significant relationship CS and employee empowerment. Employee empowerment is
directly related to satisfy customers which lead to profitability.
The employee who are empowered perform their job well, which leads to higher
productivity, employee loyalty, organizational effectiveness, and it in turns to satisfied
customers.
Giving value to employees and provide excellent services to customers are the two core
values to satisfy the customers.
It makes the connection between customer satisfaction and its integration with internal
processes and results. “Customer focus impacts and should integrate an organization’s
strategic directions, its work systems and work processes, and its business results”.
In regard to empowerment this is “aimed at enabling people to satisfy customer on first

contact, to improve processes and increase productivity, and to improve the
organization’s performance results. An empowered workforce requires information to
make appropriate decisions.”
Employees perform with their heart and head when they feel that they are not
employees they are the family of the organization and have the full authority and
command to take decisions for the betterment of the organization and for them. They
feel a sense of accomplishment. Because it is the fact that the employees who have
authority to take decisions perform better and generate maximum output with
minimum resources. Therefore most of the companies are striving for employee
empowerment to get maximum output by using minimum resources.
Employee empowerment in service based organizations is largely concerned with the
improvement of quality of services provided to the customers. Specifically, it is assumed
that through employee empowerment, the employees are more committed to

successful provision of services. Employees will have the necessary command and
autonomy to do whatever is needed to “Make happy the customer”.
The organization has to create open environment where communication between
employees and managers should be opened. Employees can share their problems and
concerns with their managers and where the leaders and managers worked together in
teams to guide the employees real. At those organizations, the turnover in employees is
low, and people who have left the organization for some personal problems are fighting
to come back. All of this focused on one point: building employee trust should be the
first objective of the organization.
Employees should be allowed to satisfy the customers, it is a guarantee that the
customers will come again and again .but when customers come with some sort of
problem to the store. It is the time for the employee to gain customer life time value
and loyalty for the organization but it is possible only when employee can take decision
without moving towards the supervisor and the manager.

CHAPTER # 3
METHODOLOGY

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:
3.2.1 Research approach

As defined by (yin, 2003) a collection of structured questions designed to elicit
information for a specific purpose. Questionnaires are commonly used in market
research and make use of two types of questions: multiple choice questions, which are
designed to produce a limited response, and open questions, which allow respondents
the opportunity to air their views freely.
According to (Benet, 2007) “an open ended questionnaire is used as a research strategy is
used in many situations to contribute to our knowledge of individual, group, organizational,
social, political, and related phenomena”. Questionnaires are one of several ways of doing
social science research; other ways include observations, surveys, and interviews of archival
information. He further argues that the first and most important strategy for differentiating
among the various research strategies is to identify the type of research question being
asked, and suggest that in general “how much, what and who” questions are likely to favor
the use of interviews and surveys.
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 an insight
of their perspective about their satisfaction with the bank’s services. This is in order for us to
compare partly their reflections about customer satisfaction and the practices of employee
empowerment in the bank. We handed out questionnaires to the employees of the bank, in

order to get their opinion about the issue of empowerment, and to what extent they feel it
is implemented in the bank.
We handed them the questionnaires and returned within the next few minutes to collect
the
responses. This was in order for us to give them enough time to think their answers through
before responding.
Information regarding the length of time the employee has been providing banking
services in general, and particularly satisfying the customers; full-time or part-time
status; hours worked per week; and volume of clients are captured by this
questionnaire. This survey also asks about any in-service rewards that the service
provider has received. This questionnaire also asks questions regarding the level of
services provided, for what services referrals are made, if at all, where referrals are
made, and reasons for choice of referral site.
This questionnaire captures detailed information regarding the services available and
the availability and/or stock-outs of particular essential supplies. Information regarding
whether the employee is a member of the(Institute of Bankers Pakistan) IBP network
and if so, the impact of membership on a variety of outcomes indicators—client volume,
client satisfaction, income, profits, service supply, quality of services, range of services
provided is also collected.
3.3 Research design

This research is designed to get data through both sources Primary and secondary
sources and through the responses to the questionnaires conducted. Also, through the
internet, published articles and questionnaire. Hypothesis testing is applied on the data
and summary of the testing is also provided. Descriptive analysis of the data and
frequency tables are also included in the thesis. The sampling procedure used is
convenient sampling and sample size is 100. The questionnaire’s are coded in SPSS and
findings are generated through SPSS .The thesis includes frequency tables, frequency
tabular, descriptive statistics, bar charts, graphs and report summaries.
The data to be used in this study comes from a survey that is conducted as part of a
cross-national evaluation of selected banks. The evaluation and the actual data
collection are done by visiting different banks of Pakistan. Data is collected between
June 2010 through the administration of a survey in which every variable is covering the
relevant questions which should be answered by the employees. The main variables are
employee empowerment and customer satisfaction and the mediating variables are
effectiveness and efficiency, service quality, quick problem solving, and trust building.
The primary purpose of this survey is to evaluate the performance of banks in providing
services to the customers. And come with solutions to improve the satisfaction level of

the customers by empowering the employees which are dealing with the customers and
increasing the use of contraception among individuals.
3.3.1 Primary Data

(Saunders, 2000). Data that is collected for the purpose of the study and that has not
been existent before. Methods of obtaining primary data, according to (Damon,
Holloway 2002), are questionnaire, interviews studies or observations.
Primary research is conducted amongst key decision makers across banking institutions
which are providing services to customers, to determine the current industry
attractiveness and to assess the present state and future of this industry as a whole. It is
felt that, for the purposes of this study, it is necessary to conduct complex, quantitative
research in the form of a structured and comprehensive research questionnaire. The
aim of the Study Project is thus to take a more investigative approach for better results.
The questionnaire is used as method of obtaining primary data and secondary data is
also used that is applicable to the research purpose. The questions may be adapted or
enhanced in their scope due to new insight gained during the data gathering process.
Moreover, the author is aware of some problems that can arise due to language
differences. The questions are written in simple and easy words. The questionnaires are
prepared in English, which is not the native language of the respondents but they can
speak and understand it well. The author has therefore explained questions in more
detail, if needed, and have asked for additional explanations, if the answers are not
clear. Another factor, the authors consider to have an influence on the thesis, is that the
respondents have to tell the reality which they are facing actually at work. They cannot
be expected to criticize the company they represent. Furthermore, the respondents
might even present information in a more positive way than it is the case in reality.
3.3.2 Secondary Data

(Saunders et al, 2000). Data that has already been collected for different purpose, which
can be used by researchers to re-analyze and draw, own conclusions. Both, raw data as
well as published summaries can be regarded as secondary data. Secondary data allows
researchers to access large amounts of data they might otherwise not be able to obtain,
due to limitations in time, budget or reach.
The secondary data, also referred to as frame of reference, in this research thesis
literature is about employee empowerment, especially in financial service and customer
relationship management.
The secondary data have been obtained by conducting an extensive literature review on
relevant and related topics to provide a thorough understanding of the global and local

banking industry trends, the strong levels of attractiveness of the past, and the recent
perceptions regarding the industry attractiveness as documented in journals and books.
Secondary data used in this study is obtained through the library of The Superior
University Lahore, journals and publications available through electronic libraries,
accessed through The Superior University Lahore. Additionally, the websites of banks,
providing e.g. annual reports with information concerning employee empowerment,
quality services and focus on customer satisfaction are used. Scientific journals, such as
'ABA Bank Marketing' provide up-to-date information on key areas of research.
The secondary data provides the basis for our research and it is therefore important to
have fundamental knowledge of employee empowerment and customer satisfaction
techniques. And the special characteristics of banks in order to successfully retrieve our
primary data and achieve our purpose.
3.4 Research site

The author has visited the different banks of Lahore situated at different localities for
fulfilling this research questionnaire.
3.5 Population
The quantitative research is conducted to find out the employee empowerment
practices of the banking institutions of Lahore towards increasing satisfaction level of
their customers. These banks are considered as committed to provide courteous
services to their customers and valuing their employees as well. So the employees of
different banks of Lahore are selected for this purpose.
3.5.1 Sampling Frame
The sampling frames is constituted on people from Lahore belonging to the upper,
middle and upper lower class and are currently working for different banks in Lahore.
3.5.2 Sampling Procedure
The sampling procedure used is convenient sampling and according to this sampling
technique all the people that roughly fit into my sampling frame and which belong to
the different banks under research are used to find out the most important variables
that effect the performance of the bank employees. The total sample size for this
original data collection is 100. Employees who are currently working for the banking
sector in Lahore. Total 100 questionnaires are distributed out of which I have received
100 filled questionnaires.

3.6 Verification of conclusions
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:
The stability of measures:

The ability of a measure to stay the same over the time is indicative of its stability and
low vulnerability to changes in the situation. The authors of the thesis expect the
measures to be stable until an important technological innovation, such as the Internet,
appears which is unlikely to happen. As a consequence, the writers of this thesis
consider the gathered measures as stable.
The internal consistency of measures:

An indication of homogeneity of the substance. The items should be capable of
independently measuring the same idea so that the respondents attach the same overall
sense to each of the things. In order to make sure that the respondent understands the
questions, the researcher of this paper explain, if necessary, the meaning of the
questions. Thus, the gathered measure is expected to be consistent. Providing stable
and consistent measures ensures therefore the reliability of the underlying study.

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.
4.2 Analyses and Discussions
4.2.1 Descriptive Analysis

Descriptive Analysis refers to how will collect data and represent it in a form that we
may be able to define the concrete proof of what we are trying to achieve through our
study while considering numerical value which are authentic and calculated with reliable
source of computation, in the following information through various mythological
concerns have been posted with their interpretation.
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
employee empowerment cp 100 2.00 5.00 4.0000 .84087
effectiveness and efficiency 100 1.00 5.00 4.0300 1.08670
service quality 100 1.00 5.00 3.7000 .90453
employee rewards 100 1.00 5.00 3.4300 1.29689
quick problem solving 100 1.00 5.00 3.6900 1.07021
customer satisfaction 100 1.00 5.00 4.5000 .84686
Valid N (list wise) 100
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 missing data on any variable. The table also shows the minimum and maximum
scores that any participant on that variable.

The whole table represents that questions description posted there are total 100
respondents while their range of position answers on the data collection method
(questionnaire) upon discussed question variable to variable differs among them
maximum value (5) represents last answering option choose by the respondents and
minimum value (1) represents most high end option chooses by an respondent in a
particular category further mean values represents the overall computed calculation of
the discussed data and standard deviation shows the possible variation among the
question discussed.
This table provides the mean or average score for each variable. Notice that all the
mean values are equal to or greater than moderate (i.e.3) which means there is a
significant and positive relationship between all the variables.
4.3 Frequency Table of all Nominal variables
A frequency table is a way of summarizing a set of data. It is a record of how often each
value (or set of values) of the variable in question occurs. It may be enhanced by the
addition of percentages that fall into each category. A frequency table is used to
summarize categorical, nominal, and ordinal data. It may also be used to summarize
continuous data once the data set has been divided up into sensible groups. When we
have more than one categorical variable in our data set, a frequency table is sometimes
called a contingency table because the figures found in the rows are contingent upon
(dependent upon) those found in the columns.
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.
Gender
Frequency Percent Valid Percent Cumulative Percent
Valid male 75 75.0 75.0 75.0
female 25 25.0 25.0 100.0
Total 100 100.0 100.0
Interpretation:

This question is asked just to know about the ratio of male and female participated in
the survey and according to the results the ratio is 75% male and 25% females. Showing
that the past trends are changing now and women are coming to work in the fields. Now
banks are hiring the employees on the bases of there abilities not on their genders.
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
Frequency Percent Valid Percent Cumulative 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 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.

3.4 Bar charts
A bar chart is a way of summarizing a set of categorical data. It is often used in
exploratory data analysis to illustrate the major features of the distribution of the data
in a convenient form. It displays the data using a number of rectangles, of the same
width, each of which represents a particular category. The length (and hence area) of
each rectangle is proportional to the number of cases in the category it represents, for
example, age group, religious affiliation. Bar charts are used to summarize nominal or
ordinal data. Bar charts can be displayed horizontally or vertically and they are usually
drawn with a gap between the bars (rectangles), whereas the bars of a histogram are
drawn immediately next to each other.
Interpretation:
The above graph is showing the responses of the respondents regarding gender. Most of
the participant’s lies in male category. This graph also presents that a large number of
women are living at home in Pakistan or working in other fields. Only 25% women are
working in the banking institutes whereas the ratio of men employed in banks of
Pakistan is 75%.

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.
3.5 Scatter plot

A scatter plot is a useful summary of a set of bivariate data (two variables), usually
drawn before working out a linear correlation coefficient or fitting a regression line. It
gives a good visual picture of the relationship between the two variables, and aids the
interpretation of the correlation coefficient or regression model. Each unit contributes
one point to the scatter plot, on which points are plotted but not joined. The resulting
pattern indicates the type and strength of the relationship between the two variables.

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:
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:
In the above diagram, it has been clear that the value of R Sq Quadratic is 0.101and
R Sq Linear 0.025
-------------------------------------------------------------------------------
Result 0.07< 0.05----------------> Linear.
Result 0.07 is greater than 0.05, it means there existing non linear correlation between
two variables. there is positive relationship between employee empowerment and quick
problem solving.

Interpretation:
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:
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:

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:
R Sq Linear 0.023
-------------------------------------------------------------------------------
Result 0 < 0.05----------------> Linear.
In the above diagram the result 0 is less than 0.05 that means there will be Liner
correlation existing between quick problem solving and customer satisfaction. There is
negative relationship between two variables.

Interpretation:
R Sq Linear 0.172
-------------------------------------------------------------------------------
Result 0.04 < 0.05----------------> Linear.
The above result shows 0.04 is less than 0.05 there will be a linear co-relation between
trust building and customer satisfaction. There is existing positive-weak correlation.
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.

Variables Entered/Removedb
Variables
Model Variables Entered Removed Method
1 employee
. Enter
empowerment cpa
a. All requested variables entered.
b. Dependent Variable: customer satisfaction
Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .128a .016 .006 .84421
a. Predictors: (Constant), employee empowerment cp
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
Model Sum of 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
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.986 .412 9.666 .000
employee empowerment cp .129 .101 .128 1.274 .206
a. Dependent Variable: customer satisfaction
Explanation:-
The table shows the relationship between employee empowerment and customer
satisfaction. Here Significance level is 0.206.which is 0.206 >0.05.SO in this case Null
Hypothesis (Ho) is accepted and Alternative Hypothesis (H1) is rejected. So, at the end
we can say that “There is no relationship between employee empowerment and
customer satisfaction.
Employee empowerment and effectiveness & efficiency
H0: Employee empowerment does not have significant impact on effectiveness

& efficiency.
H2: Employee empowerment has significant impact on effectiveness &
Efficiency.
Variables Entered/Removed
Variables
1 employee
. Enter
empowerment cpa
b. Dependent Variable: effectiveness and efficiency
Model Summary
Std. Error of the
1 .199a .040 .030 1.07039
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
1 Regression 4.629 1 4.629 4.040 .047a
Residual 112.281 98 1.146
Total 116.910 99
Coefficientsa
Standardized
1 (Constant) 3.001 .523 5.741 .000
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.
H3: Employee empowerment has significant impact on service Quality.
Variables
1 employee
. Enter
empowerment cpa
b. Dependent Variable: service quality

Model Summary
Std. Error of the
1 .279a .078 .068 .87307
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
1 Regression 6.300 1 6.300 8.265 .005a
Residual 74.700 98 .762
Total 81.000 99
Coefficientsa
Standardized
1 (Constant) 2.500 .426 5.863 .000
a. 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
H0: Employee empowerment does not have significant impact on trust building.
H4: Employee empowerment has significant impact on trust building.
Variables
1 employee
. Enter
empowerment cpa
b. Dependent Variable: employee trust building
Model Summary
Std. Error of the
a
1 .342 .117 .108 .96350
Interpretation
From the above Table we can watch the affect of employee empowerment on employee
trust building. 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 employee trust building. So, it is clear that from the values of Adjusted R Square
which is 0.108.So at the end we can say this that employee empowerment affect
employee trust building 0.108 times.
ANOVAb
1 Regression 12.014 1 12.014 12.942 .001a
Residual 90.976 98 .928
Total 102.990 99

Coefficientsa
Standardized
1 (Constant) 2.333 .471 4.957 .000
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
H0: Employee empowerment does not have significant impact on quick problem
Solving.
H5: Employee empowerment has significant impact on quick problem solving.
Variables
1 employee
. Enter
empowerment cpa
b. Dependent Variable: quick problem solving
Model Summary
Std. Error of the
1 .157a .025 .015 1.06229
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
Coefficientsa
Standardized
1 (Constant) 2.890 .519 5.570 .000
a. Dependent Variable: quick problem solving
Explanation:-
The table shows the relationship between employee empowerment and quick problem
solving. Here Significance level is 0.118.which is 0.118 >0.05.SO in this case Null
Hypothesis (Ho) is accepted and Alternative Hypothesis (H1) is rejected. So, at the end
we can say that “There is no relationship between employee empowerment and quick
problem solving.
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

rrelations
quick employee
employee effectiveness problem trust
empowerment cp and efficiency service quality solving building customer satisfaction
mployee empowerment cp Pearson Correlation 1 .199* .279** .157 .342** .128
Sig. (2-tailed) .047 .005 .118 .001 .206
N 100 100 100 100 100 100
* ** **
ectiveness and efficiency Pearson Correlation .199 1 .328 .173 .611 .423**
Sig. (2-tailed) .047 .001 .085 .000 .000
N 100 100 100 100 100 100
** ** ** **
rvice quality Pearson Correlation .279 .328 1 .633 .336 -.079
Sig. (2-tailed) .005 .001 .000 .001 .434
N 100 100 100 100 100 100
** *
ick problem solving Pearson Correlation .157 .173 .633 1 .228 -.150
Sig. (2-tailed) .118 .085 .000 .022 .135
N 100 100 100 100 100 100
** ** ** *
mployee trust building Pearson Correlation .342 .611 .336 .228 1 .415**
Sig. (2-tailed) .001 .000 .001 .022 .000
N 100 100 100 100 100 100
stomer satisfaction Pearson Correlation .128 .423** -.079 -.150 .415** 1
Sig. (2-tailed) .206 .000 .434 .135 .000
N 100 100 100 100 100 100
Correlation is significant at the 0.05 level (2-tailed).
. Correlation is significant at the 0.01 level (2-tailed).
This above Table is showing the correlation between independent and dependent
variables. Independent variable (employee empowerment) and dependent variables are
effectiveness and efficiency, service quality, quick problem solving, employee trust
building and customer satisfaction. Values are less than 0.05 or equal to 0.05; from the
graph it is clear that there is association between independent and dependent variables
Considering all values in the table it is argued that there seems not is negative
correlation between any of the variables. However this discussion and analyses valuable
insight to the managers in order to improve the quality of the services they provide to
the customers to satisfy them.
3.8 Conclusion

This study suggest that when employee empowerment is properly established and
implemented then organization will must grow because all the employees will be
satisfied. Employee empowerment affects a lot on the organizational activities regarding
its growth because if the people will be satisfied, then automatically they fulfill the
requirements of the organization as well as customers then cost will reduce and
organization must grow. All the study has prove the fact there is directly and indirectly
relationship is present between these variables and these variables affected by the on
the employee empowerment. The independent variable is employee empowerment
and dependent variables are all very important in the customer satisfaction because by
the missing of any one factor there is chance the whole employee empowerment
practices will be affected by these factors. There are no doubt others factors also affect
on the employee empowerment but these are main and require more attention.

CHAPTER # 5 OVERALL
CONCLUSION

Overall thesis conclusion

5.1 Introduction
In this chapter, the authors’ would present the conclusions and recommendations based
on the research, to affirm whether or not the purpose of the research has been fulfilled,
and how the findings deviates or resonates with the frame of reference of the paper, and
the conceptual framework used.
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 process, and individually respond to
customer needs in an excellent fashion. In addition, it enables employees to influence
customers’ perception which leads to their customers’ satisfaction.
The authors’ have arrived at a conclusion that employee empowerment impacts
positively on customer satisfaction.

5.3 Recommendation
Based on the research, the authors’ recommend that the banks, continue to promote
teamwork amongst the employees, so that every staff would work towards a common
vision to achieve the objectives of the bank.
The authors recommend that, the organization practices of banks regarding employee
empowerment, and their customer focused activities which are part of the main reasons
for higher rating in the banking sector as shown by the (BIP), should be continued in the
banks.

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Internet Sources
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http://www.siq.se/2007arsmottagare2.htm
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http://www.indianmba.com/Faculty_Column/FC781/fc781.html,
http://www.fedtraining.com.tr

Questionnaire

Impact of employee empowerment on customer satisfaction
Dear Participant,
This survey is aimed is for the research purpose. Its results will be used for analysis in
Master Thesis. It would not take more than 05 minutes to fill out this survey. It is
ensured that all the information provided in this survey will be kept confidential and
anonymous and will be used only to improve the quality of such events in future. Your
cooperation in this regard will be highly appreciated.
Thank you for your participation.
Name ___________ Designation___________
Gender___________
Organization
Age:
Less than 25 Years  25 – 35 Years.  35 – 45 Years.  45 Years
plus.
Disagree
Neutral
Agree
Strongly
Please select the response which best represents the
Strongly
level of agreement that your organization have with
following statements
agree
Disagree
1 You satisfied working in this bank.
Employee empowerment
2 You consider working elsewhere with better conditions.
3 Senior management is accessible for you as an employee.
4 This approach enables the Bank to compete with its competitors in

the Market.
5 You have a regulated routine at work or do you organize your job

to best Suits you.
Effectiveness & efficiency

6 The amount of work I am expected to do on my job is reasonable.
Str
A
N
St
Dis

eutral
gree
agree
agree rongly
Disagree ongly
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.
9 My department responds promptly to client requests, despite a

busy workload.
10 I have enough involvement in decisions that affect my work.
11 The customers have to wait long time before speaking to a

representative.
Quality service
12 You allowed making decisions regarding customer service.

13 My work group consistently provides courteous service even when
the client is unreasonable.
14 This empowering the employees contributes to quality service

delivery.
15 Bank provides excellent services to the customers.
16 Overall, you satisfied with the quality of the client service provided
by your department.
17 Your most recent customer service experience, did you contact the
Customers by using modern means (telephone, mail, personally) of
Interaction.
Quick problem solving

18 Employees of [DEPARTMENT] listen attentively to identify and
understand client concerns.
19 You ever had complaining customers, who feel they deserve

better.
20 Sufficient information is available on the internet to solve

customer’s problems.

21 The representative quickly identifies the problem.

Trust building
22 You rewarded for delivering excellent services besides your
monthly salary.
Disagree
Neutral
Agree
Strongly
Strongly
agree
Disagree
25 This is the job in which I feel a sense of accomplishment.
26 I have the support and authority to make the decisions necessary
for accomplishing assigned task.
Customer satisfaction
27 In your opinion, customer satisfaction is most important for any
baking institution.
28 Your organization has managers/staff dedicated to customer

satisfaction matters.
29 Your organization conduct surveys to evaluate customer
satisfaction.
30 Different means (questionnaire, interview, discussions) are used
to evaluate customer satisfaction.
31 Your organization initiated programs to improve customer

satisfaction within the past year.


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Employee empowerment & customer satisfaction 2010

Mussarrat Bashir (Roll # 9112)

Submitted to the Superior University, Lahore

MASTER IN BUSINESS ADMINISTRATION

Superior University Lahore Page 1

The aim of this study is to better understanding of empowerment in the customer

Superior University Lahore Page 2

Superior University Lahore Page 3

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3. Significance of the study 18

4. Objectives and Hypothesis

4.1 Main research Questions 21

5.1 Theoretical stances 22

6. Structure of the Thesis

Superior University Lahore Page 5

9. Analysis and results

10. Thesis conclusion

Superior University Lahore Page 6

Figure 1: The structure of the report (own diagram)

Superior University Lahore Page 7

EE: ( employee empowerment)

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Table 1: Descriptive statistics

Superior University Lahore Page 9

The aim of this study is to better understanding of empowerment in the customer

Superior University Lahore Page 10

Figure 1: The structure of the Report

Analyses and results

Final conclusion and

Superior University Lahore Page 11

Superior University Lahore Page 12

(James, 2005)As we move ahead in today's fast paced business environment, it is

Superior University Lahore Page 13

Empowerment is about power and enhancing. Important Perspectives A study of the

Internal marketing External marketing

“Enabling the promise” “Making the promise”

Employees Interactive marketing Customers

“Delivering the promise”

Superior University Lahore Page 14

Source: Kotler and Armstrong 2001

(Grönroos, 2001)In banking organizations, the general offering in a particular industry is

(K Sen., 2008)The nature of services as being intangible, heterogeneous, perishable,

Superior University Lahore Page 15

Superior University Lahore Page 16

1.2 Purpose statement

In matters concerning financial commitments, investments and spending customers, not

Superior University Lahore Page 17

1.3 Significance of the study

 This research will provide a deep view to the implications of employee

 The conceptual model provides important information to managers that how

 This research is targeted at the management of organizations within the banking

Superior University Lahore Page 18

 This study will also provide recommendations on how to empower employees to

 Present study is in quantitative form because it shows a clear picture in

 This research is based on gender equality. Because Pakistan’s 53% population

Superior University Lahore Page 19

Superior University Lahore Page 20

Main Objectives of this study is:

To determine the impact of employee empowerment on customer satisfaction in

 To determine the impact of employee empowerment on effectiveness and

 To determine the impact of employee empowerment on organizational image.

 To identify the impact of employee empowerment and quick problem solving.

1.5 Research question