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

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Employee empowerment & customer satisfaction

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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.

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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.

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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 QUAIDE-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)

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"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 1.2 Problem Formulation 1.3 Deficiencies 1. 4 significance 13 14 15 16 17 18 18 19 19

2. Purpose statement 3. Significance of the study
3.1 Theoretically 3.2 Practically 3.3 Methodologically

4. Objectives and Hypothesis
4.1 Main research Questions 4.2 Hypotheses 21 21

5. Theoretical framework
5.1 Theoretical stances 5.2 Model 22 25

6. Structure of the Thesis 7. Literature review
7.1 7.2 7.3 7.4 Introduction Literature flow diagram Literature review Conclusion 27 27 28 41

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8. Methodology
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 Introduction Paradigm Research approach Research design Research site Sample Strategy of inquiry Method Validity and Reliability 43 44 44 45 47 47 48 48 49

9. Analysis and results
9.1 Introduction 9.2 Analyses 9.3 Discussion 9.4 Conclusion 50 50 52 70

10. Thesis conclusion
10.1 CONCLUSION/RECOMMENDATIONS

10.2 Introduction 10.3 Conclusion 10.4 Recommendation

72 72 73

11. REFERENCES 12. APPENDICES

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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

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Acronyms

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

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List of tables Table 1: Table 2: Table 3:
Descriptive statistics regression table correlations table

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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.

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Figure 1: The structure of the Report

Introduction Literature review Research method

Analyses and results Final conclusion and Recommendations Appendices

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CHAPTER # 1 INTRODUCTION

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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, Superior University Lahore Page 13

Employee empowerment & customer satisfaction the organization, as transformation process. a whole, must

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Mussarrat Bashir (Roll # 9112) undergo an extensive

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

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Employee empowerment & customer satisfaction Internal marketing marketing
“Enabling the promise” promise”

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Mussarrat Bashir (Roll # 9112) External

“Making the

Employees

Interactive marketing
“Delivering the promise”

Customers

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, Superior University Lahore Page 15

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Mussarrat Bashir (Roll # 9112) “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.

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Mussarrat Bashir (Roll # 9112) (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, Superior University Lahore Page 17

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Mussarrat Bashir (Roll # 9112) 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

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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 Page 19

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Mussarrat Bashir (Roll # 9112) 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.

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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 satisfaction in banking sector of Pakistan? on customer

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 Superior University Lahore Page 22

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Mussarrat Bashir (Roll # 9112) & 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.

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Theoretical framework

Mussarrat Bashir (Roll # 9112)

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 Superior University Lahore Page 24

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 25

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 26

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Mussarrat Bashir (Roll # 9112) 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

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Effectiveness & efficiency

Employee empowerment

Service quality

Customer satisfaction

Trust building Quick problem Solving

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CHAPTER # 2 LITERATURE REVIEW

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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 & effectivenes s & efficiency

EE & quality service

EE &quick problem solving

EE & trust building

EE & customer satisfaction

Summary Figure: 3 Own diagram Page 30

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Literature review

Mussarrat Bashir (Roll # 9112)

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 managerial community for possible acceptance and implementation is the concept of 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, Superior University Lahore Page 31

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Mussarrat Bashir (Roll # 9112) 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. Superior University Lahore Page 32

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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 Superior University Lahore Page 33

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Mussarrat Bashir (Roll # 9112) 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. Superior University Lahore Page 34

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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 Superior University Lahore Page 35

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Mussarrat Bashir (Roll # 9112) 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 decisionmaking groups, meetings and activities. Autonomy – the time, freedom and mobility to fully take part in the decisionmaking 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.

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Mussarrat Bashir (Roll # 9112) 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
Tangible Superior University Lahore

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Mussarrat Bashir (Roll # 9112) Homogeneous Production and distribution separated and consumption simultaneous processes A thing Core value produced in factory produced in buyer seller Customer do not (normally) participate in participate in production the production process Can be kept in stock stock Transfer of ownership ownership Source; Gronroos, 1990, p.28 Heterogeneous Production and distribution consumption An activity process Core value Interaction Customers

cannot be kept in No transfer of

(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 Superior University Lahore Page 38

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 39

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Mussarrat Bashir (Roll # 9112) 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. Superior University Lahore Page 40

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 41

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Mussarrat Bashir (Roll # 9112) 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 decisionmaking 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. Superior University Lahore Page 42

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 43

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Mussarrat Bashir (Roll # 9112) that stresses areas in need of improvement. (Anonymous, 2005) To provide additional service to clients, Umpqua Bank created the 'tenminute 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, email, 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. Superior University Lahore Page 44

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 45

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Mussarrat Bashir (Roll # 9112) 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.

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Summary

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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 Superior University Lahore Page 47

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Mussarrat Bashir (Roll # 9112) 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.

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CHAPTER # 3 METHODOLOGY

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Methodology
3.1 Introduction

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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

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 51

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 52

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Mussarrat Bashir (Roll # 9112) 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
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Mussarrat Bashir (Roll # 9112) 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.

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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 Superior University Lahore Page 55

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Mussarrat Bashir (Roll # 9112) 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

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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 employee empowerment cp effectiveness and efficiency service quality employee rewards quick problem solving customer satisfaction Valid N (list wise) 100 100 100 100 100 100 100 Minimum 2.00 1.00 1.00 1.00 1.00 1.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 Mean 4.0000 4.0300 3.7000 3.4300 3.6900 4.5000 Std. Deviation .84087 1.08670 .90453 1.29689 1.07021 .84686

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

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Mussarrat Bashir (Roll # 9112) 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.

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Frequency Valid male female Total 75 25 100 Percent 75.0 25.0 100.0 Valid Percent 75.0 25.0 100.0 Cumulative Percent 75.0 100.0

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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 Missing 100 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 Valid less than 25 25 to 35 35 to 45 45 plus Total 11 42 37 10 100 Percent 11.0 42.0 37.0 10.0 100.0 Valid Percent 11.0 42.0 37.0 10.0 100.0 Cumulative Percent 11.0 53.0 90.0 100.0

Interpretation: The above question has been asked to know about the age of the candidate to find out in what age category he belongs. The age also reflects the experience of a person and his attitude towards the practical life. The result showed that 11% of the people who are working in different banks are less than 25. People who are in this age bracket as it is normally anticipated that young blood is more passionate towards the achievement of the goals. Similarly the results Superior University Lahore Page 59

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Mussarrat Bashir (Roll # 9112) showed that 42% people are employed who are between the age of 25-35 and usually People between the age bracket of 35- 45 are 37% and 45% are those people who have experience and are on the higher posts.

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:

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Mussarrat Bashir (Roll # 9112) 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 Superior University Lahore Page 61

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Mussarrat Bashir (Roll # 9112) 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.

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Interpretation: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.134 and value of R Sq Linear is 0.078. Now, the following calculations are as under, R Sq Quadratic 0.134 R Sq Linear 0.078 ------------------------------------------------------------------------------Result 0.05 = 0.05----------------> Linear. Result 0.05 is equal to 0.05; it means there is a moderate relationship between two variables.

Interpretation: Superior University Lahore Page 63

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Mussarrat Bashir (Roll # 9112) In the above diagram, it has been clear that the value of R Sq Quadratic is 0.101and value of R Sq Linear is 0.025. Now, the following calculations are as under, R Sq Quadratic 0.101 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: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.117 and value of R Sq Linear is 0.117. Now, the following calculations are as under, R Sq Quadratic 0.117 R Sq Linear 0.117 ------------------------------------------------------------------------------Result 0 < 0.05---------------> Linear. The above diagram presenting the result is less than 0.05 that means there will be Liner correlation existing between employee empowerment and trust building. there is positive relationship between two variables.

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Interpretation: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.327 and value of R Sq Linear is 0.179. Now, the following calculations are as under, R Sq Quadratic 0.327 R Sq Linear 0.179 ------------------------------------------------------------------------------Result 0.14 < 0.05----------------> Linear. Result 0.14 is greater than 0.05, it means there is non linear correlation and both variables are positively related with each other.

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Interpretation: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.006 and value of R Sq Linear is 0.006. Now, the following calculations are as under, R Sq Quadratic 0.006 R Sq Linear 0.006 ------------------------------------------------------------------------------Result 0 < 0.05---------------> Linear. The above diagram presenting the result is less than 0.05 that means there will be Liner correlation existing between service quality and customer satisfaction. There is negative relationship between two variables.

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Interpretation: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.023 and value of R Sq Linear is 0.023. Now, the following calculations are as under, R Sq Quadratic 0.023 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.

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Interpretation: In the above diagram, it has been clear that the value of R Sq Quadratic is 0.219 and value of R Sq Linear is 0.172. Now, the following calculations are as under, R Sq Quadratic 0.219 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 corelation 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. Superior University Lahore Page 68

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Variables Entered/Removedb Model 1 Variables Entered Variables Removed Method Enter

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employee empowerment . cpa

a. All requested variables entered. b. Dependent Variable: customer satisfaction

Model Summary Model 1 R .128a R Square .016 Adjusted Square .006 R Std. Error of the Estimate .84421

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: customer satisfaction

Interpretation From the above Table we can watch the affect of employee empowerment on employee customer satisfaction. For this, we will have to consider the value of adjusted R Square .The value of Adjusted R square will tell us that how much employee empowerment affects on customer satisfaction. So, it is clear that from the values of Adjusted R Square which is 0.006.So at the end we can say this that employee empowerment affect customer satisfaction 0.006 times.
ANOVAb Model 1 Regression Residual Total Sum Squares 1.157 69.843 71.000 of df 1 98 99 Mean Square 1.157 .713 F 1.624 Sig. .206a

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: customer satisfaction Coefficientsa Standardized Unstandardized Coefficients Coefficients Model 1 (Constant) B 3.986 employee empowerment .129 cp a. Dependent Variable: customer satisfaction Std. Error .412 .101 .128 Beta t 9.666 1.274 Sig. .000 .206

Explanation:Superior University Lahore Page 69

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Mussarrat Bashir (Roll # 9112) 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 Model 1 Variables Entered Variables Removed Method Enter

employee empowerment . cpa Variable:

a. All requested variables entered. b. Dependent efficiency Model Summary Model 1 R .199a R Square .040 Adjusted Square .030 R Std. Error of the Estimate 1.07039 effectiveness and

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: effectiveness and efficiency

Interpretation From the above Table we can watch the affect of employee empowerment on effectiveness and efficiency. For this, we will have to consider the value of adjusted R Square .The value of Adjusted R square will tell us that how much employee empowerment affects on effectiveness and efficiency. So, it is clear that from the values of Adjusted R Square which is 0.030.So at the end we can say this that employee empowerment affect on effectiveness and efficiency of employees 0.030 times Superior University Lahore Page 70

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ANOVAs Model 1 Regression Residual Total Sum Squares 4.629 112.281 116.910 of df 1 98 99 Mean Square 4.629 1.146 F 4.040 Sig. .047a

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: effectiveness and efficiency Coefficientsa Standardized Unstandardized Coefficients Coefficients Model 1 (Constant) B 3.001 employee empowerment .257 cp Std. Error .523 .128 .199 Beta t 5.741 2.010 Sig. .000 .047

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 Entered/Removedb Model 1 Variables Entered Variables Removed Method Enter

employee empowerment . cpa

a. All requested variables entered.

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Variables Entered/Removedb Model 1 Variables Entered Variables Removed Method

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employee empowerment . Enter cpa b. Dependent Variable: service quality

Model Summary Model 1 R .279a R Square .078 Adjusted Square .068 R Std. Error of the Estimate .87307

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: service quality

Interpretation From the above Table we can watch the affect of employee empowerment on service quality. For this, we will have to consider the value of adjusted R Square .The value of Adjusted R square will tell us that how much employee empowerment affects on service quality. So, it is clear that from the values of Adjusted R Square which is 0.068.So at the end we can say this that employee empowerment affect on service quality 0.068 times.

ANOVAb Model 1 Regression Residual Total Sum Squares 6.300 74.700 81.000 of df 1 98 99 Mean Square 6.300 .762 F 8.265 Sig. .005a

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: service quality

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Coefficientsa Standardized Unstandardized Coefficients Coefficients Model 1 (Constant) B 2.500 employee empowerment .300 cp a. Dependent Variable: service quality Std. Error .426 .104 .279 Beta t

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Sig. .000 .005

5.863 2.875

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 Entered/Removedb Model 1 Variables Entered Variables Removed Method Enter

employee empowerment . cpa

a. All requested variables entered. b. Dependent Variable: employee trust building

Model Summary Model 1 R .342a R Square .117 Adjusted Square .108 R Std. Error of the Estimate .96350

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: employee trust building

Interpretation From the above Table we can watch the affect of employee empowerment on employee trust building. For this, we will have to Superior University Lahore Page 73

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Mussarrat Bashir (Roll # 9112) 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 Model 1 Regression Residual Total Sum Squares 12.014 90.976 102.990 of df 1 98 99 Mean Square 12.014 .928 F 12.942 Sig. .001a

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: employee trust building Coefficientsa Standardized Unstandardized Coefficients Coefficients Model 1 (Constant) B 2.333 employee empowerment .414 cp a. Dependent Variable: employee trust building Std. Error .471 .115 .342 Beta t 4.957 3.597 Sig. .000 .001

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.

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Variables Entered/Removedb Model 1 Variables Entered Variables Removed Method Enter

employee empowerment . cpa

a. All requested variables entered. b. Dependent Variable: quick problem solving

Model Summary Model 1 R .157a R Square .025 Adjusted Square .015 R Std. Error of the Estimate 1.06229

a. Predictors: (Constant), employee empowerment cp b. Dependent Variable: quick problem solving

Interpretation From the above Table we can watch the affect of employee empowerment on quick problem solving. For this, we will have to consider the value of adjusted R Square .The value of Adjusted R square will tell us that how much employee empowerment affects on quick problem solving. So, it is clear that from the values of Adjusted R Square which is 0.015.So at the end we can say this that employee empowerment affect quick problem solving 0.015 times.
ANOVAb Model 1 Regression Residual Total Sum of Squares 2.800 110.590 113.390 df 1 98 99 Mean Square 2.800 1.128 F 2.481

a. Predictors: (Constant), employee empowerment cp Coefficientsa Standardized Unstandardized Coefficients Coefficients Model 1 (Constant) B 2.890 employee empowerment .200 cp a. Dependent Variable: quick problem solving Std. Error .519 .127 .157 Beta t 5.570 1.575 Sig. .000 .118

Explanation:Superior University Lahore Page 75

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Mussarrat Bashir (Roll # 9112) 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

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employee trust building customer satisfaction .342** .001 100 .611** .000 100 .336** .001 100 .228* .022 .128 .206 100 .423** .000 100 -.079 .434 100 -.150 .135 100 .415** .000 100 .415** .000 100 100 100 1

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employee effectivenes empowerment s and service cp efficiency quality 1 .199* .047 100 .199* .047 100 .279** .005 100 .157 .118 100 .342** .001 100 .128 .206 100 100 .328** .001 100 .173 .085 100 .611** .000 100 .423** .000 100 100 .633** .000 100 .336** .001 100 -.079 .434 100 100 .228* .022 100 -.150 .135 100 100 1 .279** .005 100 .328** .001 100 1 quick problem solving .157 .118 100 .173 .085 100 .633** .000 100 1

orrelations

mployee empowerment Pearson Correlation Sig. (2-tailed) N and Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N

fectiveness ficiency

rvice quality

uick problem solving

100 1

mployee trust building

stomer satisfaction

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. Superior University Lahore Page 77

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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.

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CHAPTER # 5 OVERALL CONCLUSION

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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 Superior University Lahore Page 80

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Mussarrat Bashir (Roll # 9112) 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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REFERENCES
Textbooks
Anselm Strauss, Juliet Corbin, (1998). “Basics of Qualitative Research: techniques and procedures for developing grounded theory 2nd edition”. Bart Van Looy, Paul Gemmel, Roland Van Dierdonck, (2003). “Services management; an integrated approach. Great Britain: Pearson education limited”. Christian Grönroos, John Wiley (2001) “Service management and marketing: a customer relationship management approach”. Colin Fisher, (2007). “Researching and writing a dissertation: a guidebook for business students”. Valarie A. Zeithaml, Mary Jo Bitner, Dwanyne D.Gremler, (2006). “Services marketing; integrating customer focus across the firm”, Singapore Mc-Graw hill, 4th edition. Ghauri, P.N., K.Grønhaug, I.Kristianslund, (1995). “Research Methods in Business Studies: a practice guide”, New York, Prentice-Hall. Miles, M.B., M.Huberman, (1994). “Qualitative Data Analysis: An expanded Sourcebook, Sage Publications, Thousand Oaks. Phillip Kotler, Kevin Keller, (2006) “Marketing management”, Pearson education, prentice hall, 12th edition. Robert K. Yin,(1994). “Case study research: Design and methods”, United States of America: Sage publications, 2nd edition. Robert K. Yin, (2003). “Case study research: Design and methods”, United States of America, Sage publications, 3rd edition.

Journal Articles:
Carol Yeh-Yun Lin, (2002) “Empowerment in the Service industry”, an empirical study in Taiwan, Journal of Psychology, 136(5), 555-560 G. S Sureshchander, Chandrasekharan R, N. Anantharaman, (2002) “Determinants of customer perceived service quality, a confirmatory factor analysis approach”. Journal of services marketing, 1(16) 9-34 Henry J. Coleman Jr,(1996). “Why employee empowerment is not just a fad”, Leadership & Organization, 17(4)29–36. Linda Honold, (1997), “A review of the literature on employee empowerment, “Empowerment in organizations, 5(4)202-212. Mark Durkin, Hardin Bennett, (1999). “Employee commitment in retail banking, identifying and exploring hidden dangers”, International Journal of bank marketing, Development Journal. 17(3)124-134.

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Employee empowerment & customer satisfaction

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Mussarrat Bashir (Roll # 9112) Roy C. Herrenkohl, G. Thomas Judson, Judith A. Heffner, (1999). “Defining and Measuring Employee Empowerment”, Journal of Applied Behavioral Science,(35)373. Yeshiva, Baruch, (2001) “Applying empowerment organizational model”, Career Development International. 3(2) 82–87.

Articles:
Chu, K.F. (2003). “An Organizational Culture and the Empowerment for Change in SMESs in the Hong Kong Manufacturing Industry”, Journal of Materials Processing Technology, 139(1), 505 -509. Elms, M.B. ; Strong, D.M. & Cook-off, O. (2005). Panoptic Empowerment and Reflective Conformity in Enterprise Systems-Enabled Organizations. Information and Organization. Emote, D. (1997) “Self-managed Word Teams Approach: Creative Management Tool or a fad” Management Decision, 35(3), 233- 239. Ronald, L. (1997), “A Review of the Literature on Employee Empowerment”, Empowerment in Organizations, 5(4), 202- 212. Jowl, H.J., Kristiansen K., Dahlgaard, J.J. & Kanji, G.K. (1997). “Empowerment and Organizational Structure”, Total Quality Management. . Karma, A, Farklı Olan Kazanır, Baskı İstanbul, Sistem Yayınları, (2005), S. 6. Kırım, A. (2007), “Ermines Amade İnnovasyon Türleri”,Erişim tarihi: 31.07.2007 King, A.S. & Gerhardt, B.J, (1997) “Empowerment the Workplace: A Commitment Cohesion Exercise”, Empowerment in Organizations, 5(3), 139 -150. Koçel, T. (2003). İşletme Yöneticiliği. 9. Baskı. İstanbul: Beta Yayınları. Matthews, R.A..; Diaz, W.M. & Cole, S.G. (2003). The Organizational Empowerment Scale. Personnel Review, 32(3), 297 -318. Nicoya, N.; Simonton, J.L.; Mielsen, W.R. & Welling, B. (1994), “Employee Empowerment, Empowerment in Organizations”, 2(3), 45- 55. Pearson C.A.L & Chatterjee, S.R (1996), “Implementing Empowerment Through Subunit Clusters: a Western Australian Case Study”,Empowerment in Organizations, 4(3),16- 25. Prybuto, V.R. & Kappelman, L.A. (1995), “Early Empowerment Creates Productive Outcomes During an Organizational Transformation”, Work Study, 44(7), 15-18. Robbins, T.L.; Crino, M.D & Frendal, L.D. (2002), “An Integrative Model of the Empowerment process”,Human Resource Management Review, 12(3), 419- 443.

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Employee empowerment & customer satisfaction

2010

Mussarrat Bashir (Roll # 9112) Smith, A.C. & Mouly, V.S. (1998)”Empowerment in New Zealand Firms, Insights From two Cases”, Empowerment in Organizations, 5(4), 69- 80. Ugboro, I.O. & Oberg, K. (2000). “Top Management Leadership, Employee Empowerment, Job satisfaction, and Customer Satisfaction in TQM Organizations, an empirical study”, Journal of Quality Management, 5(2), 247- 272. Wilkinson, A. (1998), “Empowerment: Theory and Practice”, Personnel Review, 27(1), 40- 56

Internet Sources
http://www.lansforsakringar.se/privat/om_oss/in_english/Sidor/default.aspx http://www.siq.se/Home.htm http://www.siq.se/2007arsmottagare2.htm http://www.shilpabichitra.com/Shilpa2000/indart4.htm http://www.indianmba.com/Faculty_Column/FC781/fc781.html, http://www.fedtraining.com.tr

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Employee empowerment & customer satisfaction

2010

Mussarrat Bashir (Roll # 9112)

Questionnaire

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Employee empowerment & customer satisfaction

2010
on

Impact of employee customer satisfaction
Dear Participant,

empowerment

Mussarrat Bashir (Roll # 9112)

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 ___________ Gender___________ Organization

Designation___________

Age: Less than Years

25

 25 – 35 Years.

35 – 45 Years.

 45 Years plus.
Disagree Agree Neutral Strongly Disagree

1 2 3 4

You satisfied working in this bank.

Employee empowerment
You consider conditions. working elsewhere with better

Senior management is accessible for you as an employee. This approach enables the Bank to compete with its competitors in the Market.

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agree

Please select the response which best represents the level of agreement that your organization have with following statements

Strongly

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Employee empowerment & customer satisfaction 5
You have a regulated routine at work or do you organize your job to best Suits you.

2010

Mussarrat Bashir (Roll # 9112)

Effectiveness & efficiency 6
The amount of work I am expected to do on my job is reasonable.

agree

7 8

I am satisfied with the productivity and efficiency of my department. The Management believes that employee performance is directly related to employee Empowerment. My department responds promptly to client requests, despite a busy workload. I have enough involvement in decisions that affect my work. The customers have to wait long time speaking to a representative. before

9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7

Quality service
You allowed making decisions regarding customer service. My work group consistently provides courteous service even when the client is unreasonable.

This empowering the employees contributes to quality service delivery.

Bank provides excellent services to the customers. Overall, you satisfied with the quality of the client service provided by your department. Your most recent customer service experience, did you contact the Customers by using modern

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Disagree

Please select the response which best represents the level of agreement that your organization have with following statements

Agree

Disagree

Strongly

Neutral

Strongly

Employee empowerment & customer satisfaction
means (telephone, mail, personally) of Interaction.

2010

Mussarrat Bashir (Roll # 9112) Quick problem solving 1 8 1 9
Employees of [DEPARTMENT] listen attentively to identify and understand client concerns. You ever had complaining customers, who feel they deserve better.

2 0 2 1 2 2

Sufficient information is available on the internet to solve customer’s problems.

The representative quickly identifies the problem.

Trust building
You rewarded for delivering excellent services besides your monthly salary.
Agree

agree

2 5 2 6 2 7 2 8 2 9 3 0

This is the job accomplishment.

in

which

I

feel

a

sense

of

I have the support and authority to make the decisions necessary for accomplishing assigned task.

Customer satisfaction
In your opinion, customer satisfaction important for any baking institution. is most

Your organization has managers/staff dedicated to customer satisfaction matters. Your organization conduct surveys to evaluate customer satisfaction. Different discussions) satisfaction. means (questionnaire, are used to evaluate interview, customer

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Disagree

Please select the response which best represents the level of agreement that your organization have with following statements

Disagree

Strongly

Neutral

Strongly

Employee empowerment & customer satisfaction 3 1
Your organization initiated programs to improve customer satisfaction within the past year.

2010

Mussarrat Bashir (Roll # 9112)

Superior University Lahore

Page 89

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