Employee empowerment practices

By

H. S. ABZAL BASHA Research Scholar

Under the Supervision ofDr. B. KRISHNA REDDY

ProfessorSri Krishnadevaraya Institute of Management

Sri Krishnadevaraya UniversityAnanthapuramu

Introduction Today’s increasing complex and volatile business-environment characterized by Liberalization, Privatization and Globalization. The global foray too ensures that managing would not be the same again. As we are in the 21st century, competitiveness in the universal market place gives the ultimate challenge to policy-makers, business leaders and entrepreneurs in any industry including banking. Challenges such as fluctuating environment, sophisticated technology, the need for quick decision-making and the importance of frequent changes have established the need among organizations to change their traditional management practices (i.e., Command and Control) into democratic structures that offer employees a greater autonomy, confidence and freedom to make decisions.

Statement of the ProblemThe astonishing development of the banking and financial services across the world has led to consider as one of the imperative contributor of the world’s GDP.

In the last two decades with rising Indian economy, a significant progress has taken place in Indian banking sector. In spite of development and opportunities in this sector, it also faces various HR issues which admit key challenge for the industry in India.

These include issues such as increasing employee turnover, stressful work environment and poor career development. In India there is an increasing demand and supply gap for professionals.

Despite the large number of students graduating every year, there is now an increasing scarcity of appropriate skills gained through the education system, which is low on quality and relevance.

Research Gap There are only a few studies carried out on

Employee Empowerment Practices in Banking Sector. But, there is no specific study on “Employee Empowerment Practices for Organizational Effectiveness”. Hence, in order to fill this gap, the present study is undertaken. It is an attempt to offer new insights in formulating HR strategies, especially in the areas of employee empowerment in banks. This study has been undertaken by selecting two major banks, i.e., State Bank of India (Public) and ICICI Bank (Private), located in Rayalaseema region of Andhra Pradesh.

Need and Significance of the StudyIndian banking sector emerged from strong global

financial turmoil and proved its mettle when the developed economies were shaking.

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. The need for Employee Empowerment gained great importance in service-oriented institutions like banks.

As employees in a service organization have frequent contacts with the customer, they usually serve as representatives for both the organization and their products and services to the customer at contact point.

Empowerment-Organizational Effectiveness

Autonomy

Communication

Training

Rewards

Organisational Culture

Development oriented

Behaviour

High Productivity

Quality work performance

Employee Efficiency

Work Motivation

Job Satisfaction

Empowerment Practices Organizational Effectiveness Employee Behaviour

Source: Developed by Researcher

Scope of the Study

Objectives of the Study

1. To study the impact of Employee Autonomy on Organisational Effectiveness in select banks.

2. To analyze the role of Communication on Organisational Effectiveness in select banks.

3. To examine the effect of Employee Training on Organisational Effectiveness in select banks.

4. To identify the role of Employee Rewards on Organisational Effectiveness in select banks.

5. To critically evaluate the affect of Organisational Culture on Organisational Effectiveness in select banks.

6. To suggest measures for sample organizations based on the study results.

Hypotheses H1: There is a significant difference between the two

banks regarding the role of Employee Autonomy that affect Organisational Effectiveness.

H2: There is a significant difference between the two banks regarding the communication system that affect Organisational Effectiveness.

H3: There is a significant difference between the two banks regarding the training and development practices that affect Organisational Effectiveness.

H4: There is a significant difference between the two banks regarding the reward management process that affect Organisational Effectiveness.

H5: There is a significant difference between the two banks regarding the Organisational culture that affect Organisational Effectiveness.

Research Design and MethodologyThe present study is an empirical research in nature.

The descriptive research procedure is also used for describing the current scenario in SBI and ICICI bank.Sources of Data

For the present study, the data have been gathered from both primary and secondary sources. The primary data have been collected by administering a Structured-Questionnaire from the employees of non-executive level (Clerical Cadre i.e., Assistant, Senior Assistant, Special Assistant and Senior Special Assistant) of select public and private sector banks. The secondary data have been gathered from internet, books, research articles, previous research reports, survey reports, newsletters, journals, magazines etc.,

Sample Size and DesignAs on March 2014, altogether there are total 1864

non-executive employees on the rolls working in 228 branches of SBI and ICICI bank in Rayalaseema Region. For the purpose of the present study all the branches of two banks and all non-executive employees were selected.

For collection of primary data a structured questionnaire was designed and mailed to all the non-executive employees. 721 questionnaires were received, it is unfortunate to state that only 397 received questionnaires were duly filled in all respects from respondents of both the banks. Hence, all these 397 (Table No: 3.2) non-executives were purposefully selected and their responses were the form basis for analysis, interpretation and empirical findings of the study.

Table-3.2Total Sample Size

Name of the Bank Employees Strength(No. of Non-Executives)

No. of Respondents(Primary Data)

State Bank of India. 1664 247

ICICI Bank 200 150

Total 1864 397

Source: Primary Data

Table-3.3Employee Empowerment Parameters

And Measurement Techniques Selected

S.No. Parameter No. of statements included

Techniques adopted for

measurement

A Dependent Variable

Organisational Effectiveness

B Independent Variable Scale developed

1 Autonomy 19 ,,

2 Communication 13 ,,

3 Training 15 ,,

4 Rewards 13 ,,

5 Organisational Culture 12 ,,

Source: Developed by Researcher

Statistical Tolls and Techniques

The present study is a qualitative analysis of the response and results based on observations. The gathered data is analyzed and interpreted by using Frequencies, Weighted Averages, Correlation Coefficient Analysis and Independent t-test with the help of Microsoft Office Excel software and Statistical Package for Social Sciences (SPSS-20 Version). Reliability test also used for ensuring validity of the primary data.

Limitations of the Study

1. This research study is limited to SBI and ICICI Bank in Rayalaseema region of Andhra Pradesh only.

2. The present study is confined for only non-executive level of the employees.

3. The results of the research cannot be generalized to other commercial banks or other category banks like; foreign, regional, urban and rural cooperatives.

4. The accuracy of given information may owe to change from time, workplace and individual factors.

Table- 4.1: Demographic Profile of SBI and ICICI Bank Employees

Demographic Aspects Bank Wise Respondents

SBI (%) ICICI Bank (%)

Age

20-25 years 3.7 22.0

26-30 years 39.0 68.0

31-35 years 28.9 10.0

36 years and above 28.3 22.0

Total 100 100

Educational Qualifications

Intermediate 2.7 0

Graduation 40.1 12.0

Post Graduation 33.2 78.0

Professional Degree 24.1 10.0

Total 100 100

Marital StatusMarried 81.3 34.0

Unmarried 18.7 66.0

Total 100 100

Job Experience

Less than 5 years 26.7 90.0

5-10 years 42.8 6.0

10-15 years 2.1 4.0

15 years and above 28.3 0

Total 100 100Source: Primary Data

Table- 4.21: Job Autonomy and its Results

S.No. STATEMENTSSBI

(MEANS)ICICI Bank(MEANS)

1 Do you have Job Autonomy in your Bank 2.22 2.72

2How many Decisions have you made Without Referring to Higher

Authorities 1.75 1.34

3 How often you Participate in Problem Solving 2.60 2.50

4 Is your bank effectively utilizing the Bank’s Staff Suggestion Scheme 2.40 2.64

5 Have you got any chance to Participate in Branch Strategy Preparations 2.26 1.92

6 Have you any Control over the Work Schedule 2.29 2.82

7Is Your Opinion is Asked before Changes are Made in the Way You

Work 2.56 2.68

8 Is your Superior tries to Solve Your Work Related Problems 2.72 2.74

9 Can you Promise the Customer on Behalf of Management 2.71 2.08


Table- 4.22: Correlation Coefficient B/W Job Autonomy-Employee Effectiveness

VariablesEmp. Effectiveness Job Autonomy

Employee

Effectiveness

Pearson Correlation 1 0.056**

Sig. (2-Tailed) 0.000

N 397 397

Job Autonomy

Pearson Correlation 0.056** 1


N 397 397

**. Correlation is significant at the 0.01 Level (2-Tailed).

Table- 4.23: Job Autonomy Differences B/W SBI and ICICI Bank

Group Statistics

Bank Name N Mean Std. Deviation Std. Error Mean

Job Autonomy Differences Between SBI and ICICI Bank

SBI 247 2.22 .93903 .06867

ICICI Bank 150 2.72 .66676 .05444

Source: Primary data

It is evident from table-4.5 and 4.16 and very clear that the majority of the SBI employees are in a position to take operational level decisions and provide assurance to their customers’ behalf of the management. But in ICICI bank, majority of the respondents still depends on their superiors

Table- 6.14: Employee Communication and its Outcomes

S.No. STATEMENTSSBI


1I am getting Prompt Information to make Quick and

Suitable Decisions 4.35 3.54

2I have Observed Boost-up in My Morale with Present

Communication 4.06 3.76

3If I have a Problem I can Speak Directly to My Superior

4.21 4.32

4I am able to give an Open Feedback on My Subordinates

and Superior 3.23 4.10

5Employee’s Weaknesses are communicating in a Smooth

Manner 3.80 3.74

6Hierarchy and Cross Culture are the Barriers in

Communication 2.99 3.34


Table- 6.15: Correlation Coefficient B/W Communication -Performance Quality

Variables Performance Quality Communication

Employee Performance Quality

Pearson Correlation 1

0.057**


N 397 397

EmployeeCommunication

Pearson Correlation

0.057** 1


N 397 397


Table- 6.16: Communication Differences B/W SBI and ICICI Bank

Group Statistics


Communication Differences Between SBI and ICICI Bank

SBI247 4.3529 .72106 .05273

ICICI Bank150 3.5400 .90212 .07366

It is evident from the table-6.1 and 6.4 and very clear that the SBI employees are getting more prompt information compared to ICICI bank, which improves employee morale.


Table- 5.16: Employees Training and its OutcomesS.No. STATEMENTS

SBI(MEANS)

ICICI Bank(MEANS)

1 How many Training Programmes have you Attended in Your Career3.37 1.56

2 I have observed Enrichment in My Decision-Making Skills due to Training

3.98 3.78

3 Training Programmes has Improved My Performance Quality4.36 4.08

4 Training increases My Confidence and helps to Tackle Conflict Situations 4.11 4.08

5 Training has Enhanced My Discipline and Motivate me to achieve Benchmarking 3.73 4.14

6 Bank provides Latest Training whenever New Technology Adopted3.32 3.86

7 My work Relation with Peers has become Healthy due to Training4.00 3.76


Table- 5.17: Correlation Coefficient B/W Employee Training - Productivity

Variables Productivity Training

Employee Productivity


0.018**


N 397 397

Employee Training



N 397 397


Table- 5.18: Employee Training Differences B/W SBI and ICICI Bank

Group Statistics

Bank Name N Mean Std.Deviation

Std. ErrorMean

Employee Training Differences Between SBI and ICICI Bank

SBI 247 4.3636 .62765 .04590

ICICI Bank 150 4.0800 .39323 .03211


It is evident from table-5.1 and 5.7 and very clear that the majority of the respondents in SBI are having more experience in terms of training, while the majority of the respondents in ICICI bank ahead in

participating latest training.

Table- 5.33: Employee Rewards and its Impact on Employee Performance

S.No. STATEMENTSSBI


1 I believe Our bank is Practicing a Fair and Equitable Reward System 3.56 3.98

2 I Feel Satisfy, when My work is Recognized in the form of Rewards 4.70 4.44

3 Reward has creates My Unique Identity in Organization- “big picture” 4.14 4.62

4 I got more Opportunities for Personal Growth due to Rewards 3.58 4.00

5 Monetary and Non monetary Rewards help me to improve Morale 3.86 3.96

6 Rewards increase My Responsibility towards Organizational Goals 3.53 4.20

7 I am satisfied with the Transparency, Quality and Quantity of My bank’s Reward system

3.24 3.74


Table- 5.34: Correlation Coefficient B/W Employee Rewards -Work Motivation

Variables Work Motivation Rewards

Work Motivation


0.031**


N 397 397

Employee Reward

Pearson Correlation

0.031** 1


N 397 397


Table- 5.35: Employee Reward Differences B/W SBI and ICICI Bank

Group Statistics


Employee Reward Differences Between SBI and ICICI Bank

SBI 247 3.2353 1.0717 .07837

ICICI Bank 150 3.7400 .65977 .05387

It is evident from the overall analysis of table-5.21 and 5.30 and very clear that the ICICI bank practicing better reward system compared to SBI.


Table- 6.31: Organisational Culture and its Results

S.No. STATEMENTSSBI


1I believe Ethics and Honesty is the only Policy of our

Bank’s Culture 4.55 3.72

2Customer Delight is our only Motive to Provide and

Improve New Services 4.22 4.22

3Conflicts are resolved through Discussions and Control

Interventions 2.89 2.86

4Decisions are made at the Prompt Facts and Information

without Bias 2.74 2.76

5Every Employee Ideas are Concerned while making

Important Decisions 3.17 4.02

6Our organizational Culture makes Employee to feel Pride

be a part 4.18 3.24

7I feel Positive and Fun workplace is the Sign of our

Organizational Culture 3.02 4.16


Table- 6.32: Correlation Coefficient B/W Organisational Culture – Employee Job Satisfaction

Variables Job Satisfaction Organisational Culture

Employee Job Satisfaction


0.034**


N 397 397

Organisational Culture


Sig. (2-Tailed)

0.000

N 397 397



Table- 6.33: Organisational Culture Differences B/W SBI and ICICI Bank

Group Statistics


Organisational Culture Differences Between SBI and ICICI Bank

SBI 247 4.0214 .65548 .04793

ICICI Bank 150 4.1600 .41901 .03421

It is evident from the overall analysis, especially from table-6.26 and 6.27 that the SBI gets succeed to establish a strong inner sensation in employees regarding their culture, but in reality ICICI bank is given more priority for employees’ ideas while making important decisions.


Suggestions Based on the findings arrived as above, the following

suggestions are offered to enhance employees’ effectiveness through job autonomy.

Both the banks should provide more job autonomy to reduce dependency, while making certain urgent decisions without referring to their higher authorities.

Guide and assist the employees to handle, participate and solve work-relate issues.

Exploit the staff suggestion scheme at a maximum mode in branch level. And, provide more opportunities to the employees to offer suggestions, ideas and participate in branch strategy preparations.

ICICI bank should guide and train their frontline employees to become effective in providing customer assurance.

Maximum utilize periodical job rotation techniques to make employees complete understanding the various management functions and improve personal efficiency.

Suggestions ICICI should revise their present communication channels in

order to provide prompt and constant information to their staff to make suitable effective decisions.

Provide swift new information on changes happen in and around the organization.

In SBI create an environment, where lower level employees can able to provide an open feedback about their superiors and subordinates.

Improve the present smoother approach of feedback on employees’ performance and offer a realistic response to generate factual performance of the employees.

ICICI Bank should try to reduce hierarchy and cross-cultural barriers among superior and subordinates and create a healthy environment in practice.

Suggestions

ICICI bank should redesign and adopt new training methods, which pertinent to support all the employees and to remove existing deficiencies in the employees and improve productivity.

SBI should provide successive latest training programmes to their employees on new technology adoption, which could exceed employee skills and make them ready to face imperceptible future challenges.

Make employees do not only attend the programmes, but fully participate in the training sessions to remove their inferiority and enhance their potentiality.

Create an environment, where every employee can share their experiences of training with others to remove employees’ negative feelings about training.

Suggestions

Create a clear picture about the bank’s present reward system in the minds of employees, because most of the existing employees have no idea.

As per study analysis try to appraise the employee's performance on behalf of their colleagues and bestow with tangible or monetary rewards at work place.

SBI should review their bank obsolete reward system and try to make essential modifications in association to offer fair and equitable contemporary rewards.

The suggestions given by the select employees during the study unveil that most of them opined to promote performance based individual rewards instead of group or branch rewards, because most of the time it leads to employee dissatisfaction.

SuggestionsMake employees be conscious of banks mission, vision,

objectives and their roles.Improve an environment where the employees can relay more

on discussions and interventions to deal with and resolve their conflicts in a right away.

Take reliable decisions on the basis of genuine facts and information without bias.

SBI should fabricate a healthy environment, where employees mutually can feel fun to work, be optimistic and be pride as part of their organizational culture.

Give preference to every employee’s idea while makes imperative decisions.

Conclusions

The present study confirms that there is a significant relationship among employee empowerment practices and organizational effectiveness. In current scenario both SBI and ICICI banks are practicing employee empowerment practices, but in prescribed areas each one of them are effective.

Here, ICICI bank is practicing better Autonomy practices, where SBI is ahead in practicing better Communication and Training. While in terms of Rewards and Organisational Culture ICICI bank is ahead comparing to SBI. Moreover, the overall research analysis shows that public banks are ahead in practicing better communication and training where private banks ahead in autonomy, rewards and organisational culture practices

Scope for Future Research The present study has been only concentrated to

assess the impact of employee empowerment practices on organizational effectiveness in the banking sector; especially select SBI and ICICI Bank located in Rayalaseema region. Further, there are chances to extend this to many other banks, i.e., co-operatives, regional and foreign banks in Andhra Pradesh, South India and India.

However, structural aspects are touched on the conceptual basis to notice the changes that have taken place after the implementation of empowerment practices. But, psychological aspects are remained untouched due to time constraint. For financial development and growth, banking sector needs to focus more on improving the quality standards of available human source. It is essential to take certain useful actions for improving organizational effectiveness by establishing effective participation, communication and culture among employees.

Thank You

Recruiting & HR

Employee empowerment practices