A STUDY ON ORGANISATIONAL COMMITMENT WITH SPECIAL REFERENCE TO PUBLIC SECTOR COMMERCIAL BANKS IN ERODE DISTRICT

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1 A STUDY ON ORGANISATIONAL COMMITMENT WITH SPECIAL REFERENCE TO PUBLIC SECTOR COMMERCIAL BANKS IN ERODE DISTRICT Mrs.M.Mythily MBA.,M.Phil., PGDCA., Asst.Professor, Department of Business Administration, Dr.RANM Arts & Science College, Erode-9. Dr. V.Rajeswari MBA., M.Phil., PGDA., Ph.D., Asst.Professor, Department of Business Administration, Arignar Anna Government Arts College, Namakkal (Dt). ABSTRACT The purpose of this study was to study the organisational commitment and to investigate the influence of few dimensions of Organisational Commitment (Job Satisfaction, Awareness on objectives & policies, Job Involvement & Individual Organisational Goal integration) with in public sector commercial Banks in Erode District. The respondents opinion, feelings and emotions on various components of commitment in the banks were studied among different types of respondents based on the age, sex, marital status, educational qualification etc.., The result of the study revealed that job satisfaction, training & development, reward & recognition are positively associated with employees commitment. Introduction Love Your Job Not Your Organisation becomes Corporate Mantra. How to Love your job without loving your organisation? Is it possible to get involved in your job & ignore your Work place? But hard reality is you couldn t love your job alone and remains unattached to your work place for a long term. The term Organisational Commitment dictates the attachment of an individual towards his (or) her organisation. Many studies proved that organisational commitment decides many out comes such as job satisfaction, job involvement & reduces one s turnover intention. Besides the individual factor that leads to Commitment, we have to consider the organisational factors which wins the Commitment of the employees. The present study considers the most important dimensions of the organisational Commitment like Job Satisfaction, Individual _ organisational goal integration, Gratification of training needs by the organisation & the extend of job involvement. In India, the growing needs of the banking industry leads to the thrust for Quality rich Work force. Especially in case of public Sector Banks, the significance of human resource decides the economic development of the nation. A well Built Committed work force bring business sustainability in the competitive Environment. The present study aims to study the factors influencing the organisational commitment & the present commitment level in the banking industry. Objectives of the Study: 1) To study the Organisational Commitment in general and in particular to commercial banks. 2) To study the evolution of banking industry in India, 3) To ascertain the influence of various factors in deciding the commitment among the bank employees. 152

2 Methodology In the present study, an extensive use of both primary & secondary data was made. Sampling Design: For collecting primary data, field survey technique was employed. First hand information pertaining to the employees behaviour, satisfaction and commitment were collected from 250 Sample Respondent. Erode district Consists of 6 taluks. The respondents were chosen from all 6 taluks. The respondent were selected using the disproportionate stratified random sampling from Canara Bank, Indian Overseas bank, State Bank of India, Bank of India, Indian Bank & Corporation Bank. The questionnaires were used to collect data. Allen & Mayer (1993) Commitment Scale was used to find out the type of Commitment. Secondary Data: The primary data was supplemented by a split of secondary sources of data. The secondary data were collected from leading journals, house magazines of Commercial Banks, HRD Times, Journal of Bank Management, etc.., Frame Work of Analysis: The core of the Study being Organizational Commitment, the Study centres around job satisfaction, job involvement, turnover intention, organizational individual goal integration & their relationship to the related independent variable. The above were studied by means of simple statistical tools like percentage, average, ranges, standard deviation and two way table. Limitations: 1) The survey was conducted only in Erode district of Tamilnadu. Hence the result arrived from the study may (or) may not be applied to other areas. 2) Out of the total number of public sector employees only 250 respondents were selected. 3) Certain respondent had given information about their economic background from their memory wherever doubts arised that has been cross checked to avoid bias and bogus information. DEVELOPMENT OF BANKING IN INDIA PRE INDEPENDENCE ERA General Bank of India (Bank of Hindustan) Presidency Bank 1840 (established) Bank of Bombay 1840 (established) Bank of Madras 1895 Punjab National Bank Banks like Bank of India, The Central Bank of India, Bank of Baroda, People s Bank of India Failure of Indian Banks due to World war I Failure of Indian Banks due to inexperience of Indian Bankers in conducting banking in European Style Boom period for Indian banks during World war II 1947 Partition gave a jolt and created heap of problems for Indian banks Most of the joint stock banks were established under the provisions of the Indian Companies Act, 1913, amended in Keeping in view the public opinion in favour of a separate legislation and the complaints raised against and drawbacks pointed out in the existing legislation, the Government of India passed a Banking Companies Act, 1949 (later its name was changed to the Banking Regulation Act).The post-independence era had been noted for the addition of several new chapters and attainment of several milestones in the file of Indian banking. The wave of bank nationalization swept the country in the late sixties and on 19 July 1969, 14 leading joint stock banks were nationalized bringing 80 percent of the country s banking business 153

3 under public sector. Again on 15 April 1980, six major join stock banks were nationalized the public sector. Again on 15 April 1980, six major join stock banks were nationalized. The public sector banking establishment of regional rural banks, co-operative sector banks, land development banks, industrial development bank and an export-import bank added new dimensions to the banking industry. The Reserve bank of India was well coordinating the banking activities and regulating the currency and credit according to the economic and financial needs of the country. INDIAN BANKING SYSTEM: PHASES OF TRANISITION POST INDEPENDENCE ERA FOUNDATION PHASE In those initial days, the need of the hour was to re-organize and to consolidate the prevailing banking network keeping in view the requirements of the economy. The first step taken to that end was the enactment of the Banking companies Act, 1949 followed by rapid industrial finance. Role played by banks was instrumental behind industrialization with the impetus given to both heavy and small scale industries. Subsequently, after the adoption of social control, banks started taking steps in extending credit to agriculture and small borrowers. Finally on July 19, 1969, 14 banks were nationalized with a view to extending credit to all segments of the economy and also to mitigate regional imbalances. Thus the period of regulated growth from 1950 till bank nationalization witnessed a number of far-reaching changes in the banking system. Branches expanded by an annual growth of 1.6% during 1950s i.e to 1960 with a deposits and credit growth of 6.9% and 8.2% respectively. Again, during 1960 s (i.e. during 1960 to 1970), the annual growth of expansion of branches deposits and credit was significantly higher than that of the 1950 s. Net profit of the banks declined from Rs crores to Rs crores during 1960 to The population served per branch was as high as at the end of the foundation phase. RAPID EXPANSION PHASE ( ) The motto of bank nationalization was to make banking services reach the masses that can be attributed as the first banking revolution. Commercial banks acted as a vital instrument for this purpose by way of rapid branch expansion, deposits mobilization and credit creation. A series of measures had been taken since then. Introduction of Lead Bank Scheme and District Credit Plans, setting up of Regional Rural Banks in 1975 etc., were important for penetrating into the rural areas. Alongside, the agenda of geographical expansion in the form of branch expansion continued. During 1970 to 1980, the branch expansion was 12.0% per annum and during , it was around 8.8% per annum. Resources of the banking system grew significantly. Banks were deploying these funds both in credit and investments. During 1970 to 1980, net profit grew annually by 14.7% and during the annual growth was 11.7%. The second dose of nationalization of 6 more commercial banks on April 15, 1980 further widened the sphere of operation of the public sector banks. Being in the public sector, banks were to implement all the government sponsored programmes and change their attitudes in favour of social banking, which was given the highest priority. A number of policy interventions by the government of India, stipulations like the attainment of the Priority Sector Credit Ratio of 40%, rural Credit deposit ratio of 60% and weaker section credit ration of 25% of the total priority sector credit were stringently followed. CONSOLIDATION PHASE The period between 1985 to 1990 was a phase of consolidation, which marked a slowdown in branch expansion, and a special thrust on internal control and profitability through newer activities. During the period, expansion of bank branches came to a halt and increased merely from to showing a compound annual growth rate of 2.6%. The annual growth rate of deposits and credit during 1985 to 1990 was 17.7% and 14.6% respectively, whereas investment grew by 19.0%. Profit, which was the major thrust during the consolidation phase, grew significantly by an annual growth rate of 51.7% REFORMS PHASE Indian banking system has been subject to widespread structural reforms initiated since June This phase can be regarded Second banking revolution. Reform measures such as introduction of new accounting and prudential norms, liberalization measures etc., are heading towards a truly competitive and well-structured banking system resilient from an international perspective. These spurred the dynamics of Indian banking sector in all the fields. The annual growth of branch expansion during was 1.1%. The population served per branch was as at March-end Issues and challenges in banking industry: Banking has become a vital instrument in the economic development of the country. Until the nationalization of banks in 1969, the place of growth in the banking industry, both in terms of business and banking expansion was considerably low,after the nationalization of this sector, banking embarked up on development programmes. Banks are basically human organization. They employ large number of people in the society so as to fulfill their own organizational and national objectives. So, the principal task before banking management is the utilization of human resources to the optimum for better results in banking. Challenges in front of the banking industry are Technological innovations More formal education in banking Demands of the government 154

4 Trends in the employee role Changes in the values of work force Demand of employees and Change in the structure of employment Concept of commitment Employee commitment can be defined as the sense of belonging towards the organisation. Committed employees feel as a part of their organisation. Allen and Mayer conceptualisation of organisational commitment has resulted in 3 dimensions, namely Affective commitment related to emotional attachment of employees, Normative commitment related to feeling of obligation towards their organisation, Continuance commitment is related to the costs perceived by an employee for leaving the organisation. HR Practices & Commitment Various HR practices such as Training &development, Communication, Leadership, Rewards & Recognition, Industrial relations, Leadership style, Grievance handling, Participation, influences the commitment level of the employee. The following practices could make the employee feel committed Honest and fair dealing with its employees. Clarity in policies and values of an organisation Make an organisation as a place to live and work Creating a fine tradition of public service Proper handling of employee complaints Giving freedom to decide Creating awareness and reinforcing the values Acquiring core competence Make work area as a pleasant place Justice be the integral part of all practices Encourage the employees to strengthen their knowledge base Inculcate the relationship concept FACTORS INFLUENCING COMMITMENT GENDER AND LEVEL OF COMMITMENT S.No Gender No. of % Average Respondents Min Max S.D 1 Male Female Total It could be seen from the above table that the level of commitment perceived by the male employees of the commercial banks ranged between 30 and 80 with an average of The level of commitment perceived by female respondents ranged between 26 and 8o with an average of From the analysis it is concluded that the male respondents perceived the maximum level of commitment than the female respondents. With a view to find the degree of association between the sex of respondents and level of commitment, a two way table was prepared and the result is displayed in the table underneath. GENDER AND LEVEL OF COMMITMENT (TWO-WAY TABLE) S.No Gender Low Medium High Total 1 Male (73.6) (74.3) (73.2) 2 Female (26.4) (25.7) (26.8) Total It is highlighted from the above table that high level of commitment perceived (73.2%) among the male respondents and the same was the lowest (26.8%) among the female respondents. The medium level of commitment perceived by the respondents 155

5 is the highest (74.3%) among the male category and the same was the lowest (25.7%) among the female category of respondents. On the other hand, the low level of commitment perceived by the respondents was the highest (73.6%) among the male category of respondents and the same was the lowest (26.4%) among the female category of respondents. S.No Designation No. of % Average Respondents Min Max S.D 1 Clerk Spl.Ass Officer Senior Manager 5 Manager Total GENDER AND LEVEL OF COMMITMENT (CHI-SQURE TEST) Factor Calculated X 2 Value Table Value D.F Remarks Gender Not Significant It is learned from the above table that the calculate chi-square value is less that the table value and the result is not significant at 1% level or 5% level. Hence, the hypothesis, Sex of the respondents and the level of commitment are associated, does not hold good. From the analysis, it is concluded that there is no relationship between sex of the respondents and the level of commitment. DESIGNATION AND LEVEL OF COMMITMENT It could be seen from the above table that the Commitment levels of respondents of the clerk category in commercial bank range between 33 and 18 with an average The level of commitment perceived by respondents of the special assistant category ranged between 30 and 75 with an average of The level of Commitment perceived by the respondents of the officer category ranged between 44 and 80 with an average of On the other hand, the level of Commitment perceived by the respondents of manager ranged between 26 and 75 with an average of 8.4 and the level of Commitment perceived by the respondents of senior manager category ranged between 46 and 72 with an average of 59.1.From this analysis, it is found that the maximum level of commitment was the highest among the respondents of officer category. With a view to find the degree of association between the designation of respondents and their level of Commitment, a two way table was prepared and the same is exhibited below. DESIGNATION AND LEVEL OF COMMITMENT ON HRM(TWO WAY TABLE) S.No Designation Level of Commitment Total Low Medium High 1 Clerk (39.6) (34.3) (32.5) 2 Spl.Ass (28.30) (15.7) (18.9) 3 Officer (15.1) (32.9) (33.8) 4 Senior Manager (5.7) (8.6) (8.7) 5 Manager (11.3) (8.5) (7.1) Total Table indicates that the percentage of high level of commitment was the highest (33.8) among the officer category and 156

6 the same was the lowest (7.1%) among the manager category. The percentage of medium level of Commitment perceived on HRM practiced in banks was the highest (32.9%) among the officer category and the same was the lowest (8.5%) among the manager category. On the other hand, the low level of Commitment in Commercial banks was the highest (39.6%) among the clerk category and the same was the lowest (5.7%) among the senior manager category. In order to find the relationship between designation and the level of Commitment, a chi square test was applied to peruse the relationship and the results of the test are presented in the following table. (CHI-SQURE TEST) Factor Calculated X 2 Value Designation Table Value D.F Remarks It is witnessed from the table that the calculated chi square value is greater than the table value and the result of the test is significant at 5% level. Hence, the hypothesis the designation of the respondents and their level of commitment are associated holds good. From the analysis, it is concluded that there is a close relationship between designations of the respondents and the level of commitment in Commercial banks. LENGTH OF SERVICE AND LEVEL OF COMMITMENT S.No Length of No. of % Average Service Respondents Min Max S.D 1 <=20 years years >25 years Total It is noted from the above that the respondents having up to 20 years of experience perceived the level of commitment ranged between 26 and 77 with an average of the level of commitment perceived on HRM practices among the respondents with years of experience ranged between 33 and 80 with an average of on the other hand, the level of commitment perceived by the respondents having above 20 years experience in commercial banks between 30 and 75 with an average of With a view to find the degree of association between the experience of the respondents and their level of commitment in public sector banks, a two way table was prepared and the results are shown below in table no.6.17 LENGTH OF SERVICE AND LEVEL OF COMMITMENT (TWO WAY TABLE) Significant at 5% level S.No Length of Service 1 <=20 years years Level of Commitment Low Medium High 25 (47.2) 14 (26.4) 32 (46.1) 25 (35.5) 51 (39.9) 40 (31.6) Total >25 years 14 (26.4) 13 (18.4) 36 (28.5) 4 Total Table reveals that the percentage of high level of commitment in banks was the highest (39.9) among the respondents having above 25 years of experiences. The percentage of medium level of commitment in banks was the highest (46.1%) among the respondents having upto 20 years of experience and the same was the lowest (18.4%) among the respondents having above 25 years. On the other hand, the percentage of low level of commitment in banks was the highest (47.2%) among the respondents upto 20 years of experience and the same was the lowest (26.4%) among the respondents having years of experience and who had above 25 years of experience. 157

7 In order to find the relationship between experience of the respondents and the level of commitment a chi square test was used for this purpose and the results of the test are shown in the following Table No Factor Calculated X 2 Value LENGTH OF SERVICE AND LEVEL OF COMMITMENT (CHI-SQURE TEST) Table Value D.F Remarks Length of Service Not Significant Table indicates that the calculated chi-square value is greater than the table value and the result is not significant. Hence, the hypothesis that the experience of the respondents and their level of commitment associated does not hold good. From the analysis, it is found that there is no close relationship between the experience of the respondents and the commitment among the employees of the commercial banks under study. TYPE OF FAMILY AND COMMITMENT S.No Type of No. of % Average Family Respondents Min Max S.D 1 Nuclear Joint Total It is understood from the above table that the commitment observed in the banks by the respondents of nuclear family ranged between 30 and 80 with an average of This analysis shows that the maximum level of commitment was among the respondents of joint family system. With a view to find the degree of association between the respondents type of family respondents and their commitment a two-way table was prepared and it is presented below. TYPE OF FAMILY AND COMMITMENT (TWO-WAY TABLE) S.No 1 Nuclear Type of Family Level of Commitment Low Medium High 23 (43.4) 33 (46.8) 50 (39.5) Total Joint 30 (56.6) 37 (53.2) 77 (60.5) Total It could be seen from the above table that the percentage of high level commitment was the highest (60.5%) among the respondents of joint family system and the same was the lowest (39.5%) among the respondents of nuclear family model. The percentage of medium level of commitment was the highest (53.2%) among the respondents of joint family and the same was the lowest (46.8%) among the respondents of nuclear family. On the other hand, the percentage of low level of commitment was the highest (56.6%) among the respondents of joint family and the same was the lowest (43.4%) among the respondents of nuclear family. In order to find the relationship between respondents type of family and commitment a hypothesis was formulated and was tested with the help of Chi-square test and the result of the test is shown in the following table. TYPE OF FAMILY AND COMMITMENT (CHI-SQUARE TEST) Factor Calculated X 2 Value Table Value D.F Remarks Type of family Not Significant 158

8 It is clear from the above table that the calculated chi-square value and the result is not significant at 1% level and 5% level respectively. Hence the hypothesis The respondents family type and level of commitment are associated does not hold good. It is concluded from the above analysis that there is no relationship between the respondents family type and commitment. Findings 1. The overall organisational Commitment about Various Stages of their services was studied and found that most of them were having medium level of commitment at every stage of their services. 2. It s divulged from the analysis that old aged respondents had more committed than the young & middle aged Category of respondent. 3. It was found from the analysis made category respondents committed to the Organisation more than the female category. 4. The respondents of the officer category had committed more than the other designations. 5. The respondents having above 25 years of experience had attached more than the other categories. 6. The study confirms the positive relationship between job satisfaction, involvement and organisational commitment. Conclusion Belongingness of an employee towards his organisation may be decided by many factors. The employee who feels that he is a part of an organisation likes to give his best in terms of his efforts. A Service like Commercial banking in our country is an area of intensive manpower, the role of managing the human resource has a significant bearing on profitability, efficiency & overall effectiveness of the banks.again Commitment becomes a crucial ingredient for people in the service industries. A well Committed employee increase the profit potential of an industry and also wins the customer delight. Bibliography: (1) Alan Price, Human Resource Management in a Business Context,Second Edition: High Holborn House,London,2004. (2) Batra G.S and Dangwal R.C Banking and Development Finance, New Vistas Deep & Deep Publication Pvt. Ltd.,New Delhi. (3) David A. Decenzo and Stephen, P.Robbins, Fundamentals of Human Resource Management, Eighth Edition ; Replika Press Pvt. Ltd.,India (4) Gopalji and Suman Bhakri, Human Resource Development in India, Parwana Bhavan, New Delhi. 159