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Employee empowerment practices

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Employee empowerment practices

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Employee empowerment practices

  1. 1. By  H. S. ABZAL BASHA Research Scholar Under the Supervision of Dr. B. KRISHNA REDDY Professor Sri Krishnadevaraya Institute of Management Sri Krishnadevaraya University Ananthapuramu
  2. 2. 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.
  3. 3. Statement of the Problem The  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. 
  4. 4. 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. 
  5. 5. Need and Significance of the Study Indian 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.
  6. 6. 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 EffectivenessEmployee Behaviour Source: Developed by Researcher Scope of the Study
  7. 7. 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.
  8. 8. 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.
  9. 9. Research Design and Methodology The 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.,
  10. 10. Sample Size and Design As 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.       
  11. 11. Table-3.2 Total 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
  12. 12. Table-3.3 Employee 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
  13. 13. 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.
  14. 14. 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.
  15. 15. 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 Status Married 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
  16. 16. Table- 4.21: Job Autonomy and its Results S.No. STATEMENTS SBI (MEANS) ICICI Bank (MEANS) 1 Do you have Job Autonomy in your Bank 2.22 2.72 2 How 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 7 Is 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 Source: Primary Data
  17. 17. Table- 4.22: Correlation Coefficient B/W Job Autonomy- Employee Effectiveness Variables Emp. 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 Sig. (2-Tailed) 0.000 N 397 397 **. Correlation is significant at the 0.01 Level (2- Tailed).
  18. 18. 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
  19. 19. Table- 6.14: Employee Communication and its Outcomes S.No. STATEMENTS SBI (MEANS) ICICI Bank (MEANS) 1 I am getting Prompt Information to make Quick and Suitable Decisions 4.35 3.54 2 I have Observed Boost-up in My Morale with Present Communication 4.06 3.76 3 If I have a Problem I can Speak Directly to My Superior 4.21 4.32 4 I am able to give an Open Feedback on My Subordinates and Superior 3.23 4.10 5 Employee’s Weaknesses are communicating in a Smooth Manner 3.80 3.74 6 Hierarchy and Cross Culture are the Barriers in Communication 2.99 3.34 Source: Primary Data
  20. 20. Table- 6.15: Correlation Coefficient B/W Communication -Performance Quality Variables Performance Quality Communication Employee Performance Quality Pearson Correlation 1 0.057** Sig. (2-Tailed) 0.000 N 397 397 Employee Communication Pearson Correlation 0.057** 1 Sig. (2-Tailed) 0.000 N 397 397 **. Correlation is significant at the 0.01 Level (2-Tailed).
  21. 21. Table- 6.16: Communication Differences B/W SBI and ICICI Bank Group Statistics Bank Name N Mean Std. Deviation Std. Error Mean Communication Differences Between SBI and ICICI Bank SBI 247 4.3529 .72106 .05273 ICICI Bank 150 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. Source: Primary data
  22. 22. Table- 5.16: Employees Training and its Outcomes S.No. STATEMENTS SBI (MEANS) ICICI Bank (MEANS) 1 How many Training Programmes have you Attended in Your Career 3.37 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 Quality 4.36 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 Adopted 3.32 3.86 7 My work Relation with Peers has become Healthy due to Training 4.00 3.76 Source: Primary data
  23. 23. Table- 5.17: Correlation Coefficient B/W Employee Training - Productivity Variables Productivity Training Employee Productivity Pearson Correlation 1 0.018** Sig. (2-Tailed) 0.000 N 397 397 Employee Training Pearson Correlation 0.018** 1 Sig. (2-Tailed) 0.000 N 397 397 **. Correlation is significant at the 0.01 Level (2- Tailed).
  24. 24. Table- 5.18: Employee Training Differences B/W SBI and ICICI Bank Group Statistics Bank Name N Mean Std. Deviation Std. Error Mean Employee Training Differences Between SBI and ICICI Bank SBI 247 4.3636 .62765 .04590 ICICI Bank 150 4.0800 .39323 .03211 Source: Primary data 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.
  25. 25. Table- 5.33: Employee Rewards and its Impact on Employee Performance S.No. STATEMENTS SBI (MEANS) ICICI Bank (MEANS) 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 Source: Primary data
  26. 26. Table- 5.34: Correlation Coefficient B/W Employee Rewards -Work Motivation Variables Work Motivation Rewards Work Motivation Pearson Correlation 1 0.031** Sig. (2-Tailed) 0.000 N 397 397 Employee Reward Pearson Correlation 0.031** 1 Sig. (2-Tailed) 0.000 N 397 397 **. Correlation is significant at the 0.05 Level (2-Tailed).
  27. 27. Table- 5.35: Employee Reward Differences B/W SBI and ICICI Bank Group Statistics Bank Name N Mean Std. Deviation Std. Error Mean 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. Source: Primary data
  28. 28. Table- 6.31: Organisational Culture and its Results S.No. STATEMENTS SBI (MEANS) ICICI Bank (MEANS) 1 I believe Ethics and Honesty is the only Policy of our Bank’s Culture 4.55 3.72 2 Customer Delight is our only Motive to Provide and Improve New Services 4.22 4.22 3 Conflicts are resolved through Discussions and Control Interventions 2.89 2.86 4 Decisions are made at the Prompt Facts and Information without Bias 2.74 2.76 5 Every Employee Ideas are Concerned while making Important Decisions 3.17 4.02 6 Our organizational Culture makes Employee to feel Pride be a part 4.18 3.24 7 I feel Positive and Fun workplace is the Sign of our Organizational Culture 3.02 4.16 Source: Primary Data
  29. 29. Table- 6.32: Correlation Coefficient B/W Organisational Culture – Employee Job Satisfaction Variables Job Satisfaction Organisational Culture Employee Job Satisfaction Pearson Correlation 1 0.034** Sig. (2-Tailed) 0.000 N 397 397 Organisational Culture Pearson Correlation 0.034** 1 Sig. (2-Tailed) 0.000 N 397 397 **. Correlation is significant at the 0.01 Level (2-Tailed). Source: Primary Data
  30. 30. Table- 6.33: Organisational Culture Differences B/W SBI and ICICI Bank Group Statistics Bank Name N Mean Std. Deviation Std. Error Mean 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. Source: Primary data
  31. 31. 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.
  32. 32. 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.
  33. 33. 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.
  34. 34. 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.
  35. 35. Suggestions Make 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.
  36. 36. 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
  37. 37. 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.
  38. 38. Thank You

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