CHAPTER 1

INTRODUCTION
1.1 Background of the study

NMB Bank Limited Bank Nepal Limited is an ‘A’ class commercial bank licensed by Nepal
Rastra Bank and has branches all across the nation which provides entire commercial banking
services. NMB Bank Limited is the 20th commercial bank established under the Bank &
Financial Institution Act, 2063. The bank's corporate office is located at Babarmahal,
Kathmandu. Currently, the bank is operating with 110 branches, 4 extension counter, 100 ATM's
and the Bank has been providing branchless banking services in Rasuwa, Dolakha, Ramechap,
Morang, Kapilvastu, Siraha, Nawalparasi, Bhaktapur and Illam. The Bank intends to expand its
branchless banking facilities in other remote area in future as well and will gradually expand its
branch network to provide its service all over the country. With large numbers of promoters, the
bank has paid up capital of NPR 8000 Million. The bank's shares are publicly traded as an 'A'
category company in the Nepal Stock Exchange. The bank has been maintaining harmonious
correspondent relationships with various international banks from various countries to facilitate
trade, remittance and other cross border services. Through these correspondents the bank is able
to provide services in any major currencies in the world.

The main objective of the bank is to develop a customer oriented service culture with special
emphasis on customer care and service. To increase the market share by following disciplined
growth strategy. To leverage the technology platform and open scalable systems to achieve cost
effective operations, efficient MIS, improved delivery capability and high service standards. To
develop innovative products and services that attracts targeted customers and market segments.
To continue to develop products and services that reduces the cost of funds. To maintain a high
quality asset portfolio to achieve strong and sustainable returns and to continuously build
shareholders’ value. To explore new avenues for growth and profitability.
 The bank’s motto is to deliver full range of quality banking services to the doorstep of
customers through various delivery channels with effective and efficient use of human and
technical resources and maintain social responsibility and generate reasonable profit for the
shareholders. The bank’s mission is greater financial outreach for the people, fair play in the
financial market, and help in financial stability within the country, technology transfer and
higher customer satisfaction. Today, NMB Bank Limited is a well-known brand and it has
established itself as one of the leading and one of the successful commercial banks of Nepal.

In modern society the needs and requirements of the people are always increasing and changing.
When the people’s needs are not fulfilled, they become dissatisfied. Dissatisfied people are likely
to contribute very little for any purpose. The happier the people are within their job, the more
satisfied they are said to be. In any organization, employees can be thought of as internal
customers and there is a need to satisfy them if external customers are to be retained and
satisfied. In other words, successful organizations can maintain their advantage only by
satisfying the employees and then motivating towards continuous improvement. The focus of
this study is on employee satisfaction and how it may be enhanced. It focuses on the importance
of employee satisfaction factors and their impacts on the overall job satisfaction. This paper will
analyze the collected information about the satisfaction of the employees of NMB Bank and tries
to find out the factors affecting satisfaction and subsequently lays out some recommendations to
the bank.

1.2 Problem Statement

Human resource is one of the most important resources in any organization. Organization needs
to keep well trained and effective work force. The workplace is a second home for employees.
Satisfied employee is a productive employee. Dissatisfaction influences a job performance to a
greater extent. Every organization nowadays is giving high importance to keep their employees
with satisfaction by providing good facilities. This study will be directed towards identifying the
employee’s satisfaction towards NMB Bank Limited.

1.3 Objectives of the study:

The major objective of the study is to analyze whether the employees are satisfied with the
overall service of the bank or not. The specific objectives are as follows:

 To measure employee’s perception towards NMB Bank.

 To measure the level of employee satisfaction with respect to the company.
 To identify the factors which affect employee satisfaction regarding their job in the bank.
  To ascertain the impact of job satisfaction.
 To determine in which areas are the employees unsatisfied.

1.4 Theoretical framework:

Figure 1

Time

Salary Workload

Employee Satisfaction of
NMB Bank Limited

Bonus Promotion

Training
 Literature Review

Over the last 40 years, many studies have attempted to classify and find out the factors that affect
job satisfaction. Abdullah et al (2011) considered some factors such as promotion, employee
loyalty and acknowledgment of work which have an effect on employee satisfaction, but he
found wages as the main factor for job satisfaction. Additionally, Calisir (2010) maintained that
encouragement and salaries are the most important determinant of job satisfaction.

Ahmed and Ali (2009) emphasized that due to the fact that identification or reward has been
changed a lot, therefore, work motivation and satisfaction will be change parallelly, so the
greater focus on incentives and acknowledgment, the greater positive impact on the job
satisfaction level. In addition, Hunjra (2010) found positive and meaningful relationship between
employee satisfaction and management behavior such as group work, leadership and
independence positions. Moreover, Kamal and Hanif (2009), concluded that special strategies
and rules which are related to salaries, work environment, policy evolvement and the staff input,
may lead to employee commitment, satisfaction. Employee who is more satisfied is more likely
to be welcoming and observant. This manner attracts customers in compare to the employee not
satisfied with his job.
Smith (2008) considers job satisfaction as a pleasant and positive emotional state resulting from
the appraisal of career or employee’s experience. Smith (2009) thinks job satisfaction is
connected to how the working environment, meets the individual employee’s demands. Robbins
(2007) says "job satisfaction" is the differences between the number of rewards that an individual
will receive and a reward value that thinks he should get.

Abdulla et al., (2011) found the relationship between demographic (such as age, sex, educational
level, and also elements which are related to experience, like years of experience and level of the
job) and environmental factors (such as pay promotion and management) and job satisfaction.
They maintain that environmental factors as compared to demographic factors are better
predictors of job satisfaction. Ramman (2011) argues that there is statistically association
between nature of work and job satisfaction. He also found that there is no statistically
correlation between demographic factors and working environment.
Fredrick Herzberg’s two factor theory (also known as Motivator Hygiene Theory) attempts to
explain satisfaction and motivation in the workplace. This theory states that satisfaction and
dissatisfaction are driven by different factors motivation and hygiene factors, respectively
(Fredrick Herzberg, 1957). He found organizational environment factor is the most influential
factor for the job satisfaction. In need fulfillment theory it is argued that a person is satisfied
when he gets what he wants and he is dissatisfied when he does not get.

Et al (1997) indicated that younger employees who are less than 31 years old are less satisfied
with their job compared to other employees who are more than 31 years old. According to Mora
and Ferrer (2009), young men regarding the promotion and salary and security of their jobs had
higher level of satisfaction than women. on the other hand, survey by Kifle and kler (2007)
showed the opposite result which indicated that females were more satisfied than male regarding
their jobs. Moreover, the older bank employees, the higher level of job satisfaction and the
younger employees have the lower level of satisfaction (Jegan and Ganadhas, 2011) and (Slona
and Wardi, 2001). Another researches by Rice (1990), Clark (1996), Senar (2009), found no
significant differences among the degrees of job satisfaction of different groups of age. Warr
(1992), showed the U shaped relationship between age and job satisfaction.
 RESEARCH METHODOLOGY

3.1 Type of Research

This will be a quantitative and applied research. The data will be analyzed using various
statistical tools. Further it will be a descriptive research as it will attempt to describe the various
factors influencing the employee satisfaction of NMB Bank as well as expressing the result in
terms of numbers. For research purpose, researchers conducted a survey through questionnaires
which defined the method of data collection by primary data collection method.

3.2 Sources of Data

Both primary and secondary data were used. The primary data was collected through distribution
of questionnaire. The questionnaires follow structured method. For literature review, secondary
data sources were used.

3.3 Questionnaire Design

A list of questions was designed to gather responses from respondents to achieve desired
research objectives. Questionnaire was designed towards specific aspects of job satisfaction
which were the work itself, co-workers, salary and benefits, rewards and recognition,
communication, training and development, etc. The questionnaires were divided into three
different sections. First section contained demographic characteristics of employees’ like gender,
age, education. The second section contained questionnaires related various other factors that
play a significant role to shape up employee satisfaction level. And the last section contained
Likert scale questionnaires based on research objectives and hypothesis developed. The
questionnaire has been designed using classification questions, numerical questions, single
response questions, multiple response questions, yes/no questions, ranking questions and Likert
scale.

3.4 Sampling Design

The population size of research is almost 2000 employees of NMB Bank. However, the sample
size taken for this research is 85 people working in various departments of the company. The
population consists of various categories of people i.e. clerical staffs, officers, assistants,
managers, etc. The research will employ convenience sampling for data collection.

3.5 Data Management and Analysis

For data management, Quantitative software SPSS will be used to carry out effective tabulation,
analysis and interpretation of data with the use of tables and figures. Excel will also be used to
smoothen the process. Central tendency, frequency table, and chart will be used for descriptive
analysis whereas hypothesis testing, chi-square test, ANOVA tests and other testing will be done
for inferential analysis. Microsoft Excel will be used for generating various tables and charts and
Microsoft word will be used to interpret the outcomes.