EMPLOYEES SATISFACTION IN COMMERCIAL BANKS OF NEPAL

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1 EMPLOYEES SATISFACTION IN COMMERCIAL BANKS OF NEPAL Dr. Jitendra Prasad Upadhyay Associate Professor, Nepal Commerce Campus T. U, Nepal ABSTRAT Background - Employee satisfaction is the terminology used to describe whether employees are happy and contented and fulfilling their desires and needs at work. Employee satisfaction can be measured in two ways: indirectly, by watching trends in employee turnover; and directly, by asking employees about their level of satisfaction via surveys, interviews, and focus groups. Purpose The purpose of this is to examine the level of employee satisfaction in the commercial banks Methodology Used Descriptive and empirical research designs have been used for the study. Primary data have been collected through the questionnaires using judgmental sampling from the commercial banks of Nepal. Questionnaires have been developed in five scales and mean, standard deviation and coefficient of variation have been used as tools. Cronbach s alpha test has been done to test the reliability of the data. Findings All the commercial banks have been able to satisfy their employees. Key words: Employee Satisfaction Paper Type: Research I. INTRODUCTION Any place where individuals from different backgrounds, religions, communities come together on a common platform to work towards a pre-defined goal is called an organization. An individual who works in the organization for wages or a salary is called an employee. The employees are the true assets of an organization. They are the ones who contribute effectively towards the successful functioning of an organization. They strive hard to deliver their level best and achieve the assigned targets within the stipulated time frame. Every organization has a set of principles and policies mandatory for all the employees to follow. The objective of every business organization and their owners is profitability. Profitability is directly depends on employees' performance, i.e. good performance is a signed of company s success and poor performance is a signed of failure of company. For the development of an innovative and high-quality products and services, employee performance plays an integral role in achieving organization goals (Sheng and Yu-Che, 2008). Employee satisfaction is the terminology used to describe whether employees are happy and contented and fulfilling their desires and needs at work. Many measures purport that employee satisfaction is a factor in employee motivation, employee goal achievement, and positive employee morale in the workplace. Factors contributing to employee satisfaction include treating employees with respect, providing regular employee recognition, empowering employees, offering above industry-average benefits and compensation, providing employee perks and company activities, and positive management within a success framework of goals, measurements, and expectations (Soonhee, 2009). 75 P a g e

2 Employee satisfaction can be measured in two ways: indirectly, by watching trends in employee turnover; and directly, by asking employees about their level of satisfaction via surveys, interviews, and focus groups. In indirect measurement, management watches the trends in employees leaving the organization, and assumes that satisfaction levels are adequate when turnover levels are at or below industry norms. They may also drill down to watch for specific departments or functions with higher-than-average or higher-than-usual turnover, and implement direct measurement actions in those areas to determine causes for the increase in separations. Direct measurement methods involve asking employees about their level of satisfaction. For example, an anonymous survey could be mailed or ed to all employees asking for their level of satisfaction with different aspects of their jobs. Interviews and focus groups might also be conducted, in which staffs are questioned in person. 1.1 Importance of Employees Satisfaction Employee satisfaction is very important for the organization. It is of utmost importance for employees to remain happy and also deliver their level best. Satisfied employees are the ones who are extremely loyal towards their organization and stick to it even in the worst scenario. a. The first importance of employee satisfaction is that individuals hardly think of leaving their current jobs. Employee satisfaction in a way is essential for employee retention. Organizations need to retain deserving and talented employees for long term growth and guaranteed success. b..employee satisfaction is essential to ensure higher revenues for the organization c. Satisfied employees tend to adjust more and handle pressure with ease as compared to frustrated II. COMMERCIAL BANKS A bank can be defined as the financial intermediary between depositors and entrepreneurs. The intermediation takes place when banks accept deposit from general public, corporate bodies and private organizations and deploy that deposit for profitable purposes in the forms of loans and advances. A bank is also a financial service institution that generates its earnings primarily by means of intermediations. A bank or banker is a dealer in debts, his own and other people s (Shekhar & Shekhar, 2000). According, to Nepal Commercial Bank Act 2031 B.S. A commercial bank refers to such type of bank which deals in money exchange, accepting deposits and advancing loans and other commercial transactions other than some special functions performed by specified bank such as co-operative, agriculture and industrial bank. There are altogether twenty eight commercial banks in Nepal out of which only three commercial banks RBB, NBL and ADBN are government owned banks. III. OBJECTIVES OF THE STUDY The main objectives of this study are: To determine the employee satisfaction levels of the banks. To determine in which areas are the employees unsatisfied. To understand how unsatisfied employees can be made satisfied. 76 P a g e

3 IV. METHODOLOGY USED This study has followed both descriptive and empirical approach of research. A questionnaire survey has been conducted for getting the answer of research questions. The questionnaire survey includes 24 questions. Questionnaires were distributed to 24 top, middle and lower level managers of various departments of each bank. In order to increase the reliability and number of responses, personal visits to each and every respondent were made to distribute and collect the questionnaire. Primary data have been analyzed using different statistical tools, like means, standard deviation; and coefficient of variance. Five scale Likert Scale has been used for analysis. There are total of twenty eight listed commercial banks in Nepal, which constitutes the population of the study. For this study, only five commercial banks, i.e. Rastriya Banijya Bank (RBB), Nepal Bank Limited (NBL), Agriculture Development Bank Nepal (ADBN), Standard Chartered Bank (SCB) and Nabil Bank Limited (Nabil) have been selected as sample banks. Selection of sample is based on convenience basis and focused should be given to government owned and private banks. Cronbach s Alpha test has been done to test the reliability of data. Each and every variable have been tested and it was found that every variable reliability test was above 79%. 4.1 Respondent s Profile In this section, characteristics of respondents have been presented first gender wise and then after designation wise. a) Gender Wise Respondents Name of the Banks Male (No.) % Female (No.) % Total % Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabil Bank Limited Total Majority of respondents were males i.e. 70%. But female respondents were also satisfactory in number i.e. 36 out of 120. Highest number of male respondents was in NBL and females were in SCB i.e. 19 and 10 in number out of 24 respectively. Similarly lowest number of males respondents were in SCB and female were in NBL i.e. is 14 and 5 in number out of 24 respectively. The reason behind low number of female respondents is that all banks have high number of male respondents. b) Designations Wise Respondents Name of the Banks Lower % Middle Level % Upper Level % Total Level Rastriya Banijya Bank Nepal Bank Limited Agricultur Development Bank P a g e

4 Standard Chartered Bank Nabil Bank Limited Total Majority of respondents were found in middle level 55 out of 120 i.e %. Minority respondents fall in the category of lower level which was 31 out of 120 i.e %. Respondents in category of upper level were 34 i.e %. V. ANALYSIS AND FINDINGS OF EMPLOYEES SATISFACTION 5.1 Motivations (M) How much bank is committed in fulfilling the employee s needs? This question is very important for every bank to motivate their employees for achieving its goals and objectives. Motivation results from a. understanding needs and expectations of employees (NE), b. job securities i.e. salary, benefits and safety etc. of employees (JS), c. avoiding nepotism, favoritism and partiality in dealing with employees in the banks (NF) and d. providing adequate organization resources to the employees for carryout responsibilities (OR). In this regard four questions were asked to the employees. Name of the Banks NE JS NF OR Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Motivation (M) value has ranged from 3.2 to RBB, SCB and Nabil seem to have been able to much satisfy their employees as their values tend to All the commercial banks have been understood the needs and expectations of employees. They have been trying to secure their jobs, avoiding partiality and providing enough resources to the employees. The overall performance of all the selected banks in terms of motivation is satisfactory. In all the banks, the value of standard deviation has been below 1 and coefficient of variation has been 3.85% to 9.06%. This clearly indicates the representative nature of the mean calculated. 5.2 Leadership (L) How much the employees are happy with the leadership of the banks is another important issue. Quality of leadership is reflected in terms of a. employee s satisfaction with the leadership style (LS), b. leader s clear visions about the future of banks (CV), c. positive changes made by the leaders (PC) and d. praise and appreciation from the leaders (PA). To assess these aspects of leadership, four questions were asked to the employees. 78 P a g e

5 Name of the Banks LS CV PC PA Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Leadership (L) value has ranged between 3.30 and All the commercial banks have been successful in developing & implementing the leadership that are much satisfactory to the employees as their values has been more than 3. Leadership style, their visions and positive attitudes about the future of banks of all the leaders have been appreciable as its value has been more than 3 in all the banks. The overall leadership performance of all the sample banks has been satisfactory. In all the cases, the value of standard deviation has been below 1 and coefficient of variation has been 6.12% to 7.74%. This clearly indicates the mean is dependable. 5.3 Decision Making (DM) Decision-making is an integral part of modern management. Every manager takes hundreds of decisions for achieving organizational and managerial objectives and goals. Decision making process is continuous and indispensable component of managing any organization or business activities. Decision making involves participation of every employee in decision making process (PDM), b. consulting with the employees by the seniors in decisions concerning you (CE) c. autonomy given to branches and departments by the management for taking decisions (ABD) and d. attentions given by the boss to the ideas and suggestions of the employees (IS). In this regard, four questions were asked to the employees. Name of the Banks PDM CE ABD IS Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Decision Making (DM) value has ranged between 3.23 and All the commercial banks have been satisfactory in decision making process of the banks as its value has been more than 3. Every bank has been participated, consulted and given autonomy to the employees for decision making process. Besides they pay attention to the ideas and suggestions of the employees for taking decisions. The overall performance in terms of decision making in all the banks has been satisfactory. The differences among this variable among the banks are very much insignificant as indicated by the very low CV ranged from 6.51% to 10.59%. 79 P a g e

6 5.4 Career Development (CD) Employees join organizations for their future career development. They calculate their future career success in the organization and assess the organization s skill enhancing endeavors contributing to their promotion. Career development focuses on a. employee s consciousness about their future career (FC), b. employee s satisfaction on training and skill enhancing programs provide by the banks (TS), c. promotional potential in the bank (PP) and d. bank cares about its employees (CE). In this regard, four questions were asked to the employees. Name of the Banks FC TS PP CE Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Career Development (CD) value has ranged between 3.45 and All the commercial banks have seem to perform much better in terms of career development as their value has been more than 3. All the commercial banks cares and conscious about the future of its employees. They provide opportunity for skill enhancing programs to every employee. The overall performance of all the sample banks has been satisfactory. In all the banks, the value of standard deviation has been below 1 and coefficient of variation has been 11.85% to 13.04%. This clearly indicates the representative nature of the mean calculated. 5.5 Communication (C) Clear and timely communication among the employees regarding organizational goals, strategies, policies, rules, authority, responsibility, and performance feedback is another component leading to employee satisfaction. Communication includes a. communicating objectives, rules, policies and strategies to the employee (COP), b. assigning authority, responsibility and accountability by the bank (ARA), c. evaluating and feedback of the performance of the employees (EF) and d. clearly communicating by the management about the expectation of the employees (EE). To assess the degree of effective communication, four questions were asked to the employees. Name of the Banks COP ARA EF EE Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Communication (C) value has ranged from 3.28 to Employees of all the commercial banks have been satisfied by the communication system in the banks as its value has been more than 3. The management of all 80 P a g e

7 the banks has been clearly communicated its objectives, rules, policies and strategies to the employees. They have been assigning authority and responsibility to every employee. Besides, the management evaluated the performances of each employee and provided feedback to the employees. The overall communication system of all the banks has been satisfactory. In all the cases, the value of standard deviation has been below 1 and coefficient of variation has been 2.55% to 4.37%. This clearly indicates the mean is dependable. 5.6 Work Environment (WE) Employees satisfaction depends mostly upon the overall work environment created by the management of the bank. Work environment includes, a. quality of work life (QWL), b. on the job facilities and socialization in the bank (SJ), c. friendly and cooperative environment in the bank (FCE) and d. grievance handling system of the bank (GH). Four questions were asked to the employees. Name of the Banks QWL SJ FCE GH Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited Work Environment (WE) value has ranged between 3.20 and All the commercial banks have put their best effort in terms of creating a satisfying work environment as its value has been more than 3. All the banks maintained quality of work life and create friendly & cooperative environment in the banks. Besides, all the banks developed appropriate grievance handling system. The overall situation of work environment has been satisfactory in all the commercial banks. The difference in their performance is marginal as indicated by the much lower CV ranged from 3.77% to 4.38%. 5.7 Overall Employee Satisfaction of the Banks So far, different sub components of employees satisfaction have been analyzed. In this section, an attempt has been made to assess the overall employees satisfaction keeping in mind all the components. Name of the Banks M L DM CD C WE Total Mean S. D. C. V. Rastriya Banijya Bank Nepal Bank Limited Agriculture Development Bank Standard Chartered Bank Nabli Bank Limited P a g e

8 The overall Employee Satisfaction (ES) value has ranged between 3.29 and All the commercial banks seem to have satisfied employees as their values have been more than 3. The overall performance of all the banks in terms of employee satisfaction has been satisfactory. There seems to be more similarity among the banks as the values of CV have been very low ranged from 1.74% to 3.32%. VI. CONCLUSIONS Employee satisfaction is the terminology used to describe whether employees are happy and contented and fulfilling their desires and needs at work. It can be measured two ways: indirectly, by watching trends in employee turnover; and directly, by asking employees about their level of satisfaction. From the research it is found that most of the employees in all the commercial banks wanted to continue their job. Those who wanted to leave the banks are very few and they are leaving the banks due to opportunities to go abroad and some of them have better job opportunities in other organizations. Similarly, it was found that most of the lower level staffs in government banks are satisfied with the facilities given to them compared to private banks, but the higher level staffs in the private bank are much satisfied compared to government banks.to sum up, it can be concluded that employees of all the banks have been satisfy the services and facilities provided by banks. The performance of all the banks in terms of employees satisfaction is sound. REFERENCES [1] Clark, A. E. (1997): Job satisfaction and gender: why are women so happy at work? LabourEconomics, 4, [2] Kaifeng, Y, and Kassekert, A. (2010) Linking Management Reform with Employee Job satisfaction: Evidence from Federal Agencies. Journal of Public Administration research and theory: Vol 20 Issue 2, p [3] Rucci, A. J., Kirn, S. P. and Quinn, R. T. (1998): The employee-customer-profit chain at sears. Harvard Business Review, [4] Soonhee, K. (2009). IT employee job satisfaction in the Public Sector, International Journal of Public Administration, Vol 32 Issue 12, p , 38 p. [5] Slack, F. J., Orife, J. N. and Anderson, F. P. (2010). Effect of commitment to corporate vision an employee satisfaction with in organization: An empirical study in US, International Journal of Management, Vol. 27 Issue 3 p , 16 p. [6] David, F. R. (2005). Strategic Management: Concept and Cases. New Delhi: Pearson Prentice Hall. [7] Hill, C. W. L., Jones, G. R. (2004). Strategic Management: An Integrated Approach. New Delhi: Biztantra: An Imprint of Dreamtech. [8] Jauch, L. and Glueck, W. F. (1988). Business Policy and Strategic Management. Fifth Edition. Singapore: McCraw-Hill, International Edition. [9] Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy, 7 th Edition. Delhi: Pearson Education Limited [10] Kazmi, A. (2001). Business Policy. Eighteenth Reprint. New Delhi: Tata McCgraw Hill Publishing Company Limited. 82 P a g e

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