Thesis On Emp Oyee Empowerment and Customer

Employee empowerment & customer satisfaction 2010
Mussarrat Bashir (Roll # 9112)
Employee
empowerment and
customer satisfaction
Impact of employee empowerment on
customer satisfaction in banking
sector of Pakistan
Mussarrat Bashir
18/8/2010
A THESIS
Submitted to the Superior University, Lahore

As partial fulfillment of the Requirements
for
The Degree of
MASTER IN BUSINESS ADMINISTRATION

Submitted by: Mussarrat Bashir (Roll #9112)
Supervised by: Professor Nadeem Iqbal
Superior University Lahore Page 1

Abstract
The aim of this study is to better understanding of empowerment in

the customer service sector by the perspectives of employees
working in different banks of pakistan.empowerment can be
described by giving power to frontline personnel to meet the needs
of the customers. in order to gain deep analyses into quantitative
method is used to analyze the data, for this purpose questionnaire
is designed to test a sample of 100 Pakistani banking staff.
Empowered employees reported higher levels of organizational
trust, which in turn resulted in higher levels of customer
satisfaction. we found that there is low level of employee
empowerment practices in Pakistan’s banking institution of
Pakistan. Inside of 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. Among the proposed
theories, models and plans submitted in the past decade to the
managerial community for possible acceptance and
implementation is the concept of employee empowerment. In this
thesis, employee empowerment is defined and then 95 recent
articles related to this concept are summarized and examined for
emerging trends pertinent to arguments regarding the overall
success of employee empowerment as a practical benefit to
organizations.

Acknowledgement
I would like to express my sincere thanks and appreciation to all those

who have assisted me with this research study. These include the
people who kindly made themselves available and shared their
knowledge and experience when I am conducting survey, and family
members, friends and fellow students who have encouraged me during
this time.
Sincere thanks and appreciation also go to the staff at the superior
university Lahore library whose assistance, patience and helpfulness
during 2009 and 2010 have been invaluable. In addition, thanks to the
people working at book shop who kindly gave my document the final
‘once-over’ prior to submission.
And finally, a special word of thanks to my study leader, Professor
Nadeem Iqbal appreciates his support, guidance and honesty, which
have enabled me to complete this thesis.

Dedication
We are dedicating our work to our parents and respected teacher

Professor Nadeem Iqbal, who have played a vital role in our studies
and have guided us at every step with their precious ideas. No doubt
this dedication is insufficient and we can never repay for the role which
they have played in our studies but we are sure that their work will
prove itself an asset in our life. Especially I dedicate this research
thesis to the founder of Pakistan and the leader of the nation QUAID-
E-AZAM MUHAMMAD ALI JINNAH who has struggled for this
beautiful piece of Land for Muslims of subcontinent.
"The foundations of your State have been laid and it is now for you to build
and build as quickly and as well as you can" (Muhammad Ali Jinnah, 14
August, 1948)

"Gandhi died by the hands of an assassin; Jinnah died by his devotion to Pakistan".
(Lord Pethick Lawrence)
Table of contents
1. INTRODUCTION
1.1 Background 13
1.2 Problem Formulation 14
1.3 Deficiencies 15
1. 4 significance 16
2. Purpose statement 17
3. Significance of the study 18
3.1 Theoretically 18
3.2 Practically 19
3.3 Methodologically 19
4. Objectives and Hypothesis
4.1 Main research Questions 21

4.2 Hypotheses 21
5. Theoretical framework
5.1 Theoretical stances 22

5.2 Model 25
6. Structure of the Thesis
7. Literature review
7.1 Introduction 27
7.2 Literature flow diagram 27
7.3 Literature review 28
7.4 Conclusion 41

8. Methodology
8.1 Introduction 43
8.2 Paradigm 44
8.3 Research approach 44
8.4 Research design 45
8.5 Research site 47
8.6 Sample 47
8.7 Strategy of inquiry 48
8.8 Method 48
8.9 Validity and Reliability 49
9. Analysis and results
9.1 Introduction 50
9.2 Analyses 50
9.3 Discussion 52
9.4 Conclusion 70
10. Thesis conclusion
10.1 CONCLUSION/RECOMMENDATIONS
10.2 Introduction 72
10.3 Conclusion 72
10.4 Recommendation 73
11. REFERENCES
12. APPENDICES

List of Figures
Figure 1: The structure of the report (own diagram)

Figure 2: Service-profit chain(Gooroonos and Kotler)
Figure 3: literature flow diagram (own diagram)
Figure 4: bar graph
Figure 5: scatter plot

Acronyms
EE: ( employee empowerment)

CS :(customer satisfaction)
QPS: (quick problem solving)
WOM: (word of mouth)
IBP :(Institute of Bankers Pakistan)
CP:(competitiveapproach)

List of tables
Table 1: Descriptive statistics

Table 2: regression table
Table 3: correlations table

Abstract
The aim of this study is to better understanding of empowerment in

the customer service sector by the perspectives of employees
working in different banks of pakistan.empowerment can be
described by giving power to frontline personnel to meet the needs
of the customers. in order to gain deep analyses into quantitative
method is used to analyze the data, for this purpose questionnaire
is designed to test a sample of 100 Pakistani banking staff.
Empowered employees reported higher levels of organizational
trust, which in turn resulted in higher levels of customer
satisfaction. we found that there is low level of employee
empowerment practices in Pakistan’s banking institution of
Pakistan. Inside of 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. Among the proposed
theories, models and plans submitted in the past decade to the
managerial community for possible acceptance and
implementation is the concept of employee empowerment. In this
thesis, employee empowerment is defined and then 95 recent
articles related to this concept are summarized and examined for
emerging trends pertinent to arguments regarding the overall
success of employee empowerment as a practical benefit to
organizations.

Figure 1: The structure of the Report
Introduction
Literature review
Research method
Analyses and results

Final conclusion and
Recommendations
Appendices

CHAPTER # 1
INTRODUCTION

Introduction
In the first part of this thesis, the authors will present the background
to the problem, which will then be specified in the second part.
Further, the delimitations of this study will be stated. After reading this
first part, the reader will have gained a better understanding of the
research subject which leads to purpose and related research
questions guiding this study
1.1 Background
Global markets have built a competitive environment in business. If the
organizations want to remain in the market, they must be inventive in
lowering costs and value to customers. So it is essential for an
organization to utilize the full potential of its people. But the
employees need power and control to make decisions to fulfill the
customer’s needs.
According to (Cook, 1992) studies shown that people work with full
energy when they feel happy, even they are ready to sacrifice for
organizations and give their blood to the company. But when they feel
valued and important. They show their involvement in the business.
(R Maxwell, 2005) Employees in a service organization and particularly,

those who have frequent contacts with the customer usually serve as
representatives of both the Organization and their products or services
to the customer at contact point. The quality of the service and the
satisfaction the customer may derive will be an assessment of the
entire service experience. Employees who are empowered in an
organization can either portray a positive or negative picture to the
customers.
(James, 2005)As we move ahead in today's fast paced business

environment, it is imperative for an organization to have a highly
skilled, competent, satisfied work force. In order to obtain such
employees, an organization must offer education programs, let
employees be involved with decision-making and have adequate
reward systems. This new type of management style is called
Employee Empowerment .To achieve this new management technique,

the organization, as a whole, must undergo an extensive
transformation process.
Empowering employees is a top-down change that must begin with

management. The purpose of this paper is to examine this process and
make some recommendations for how managers can approach and
implement a sound employee empowerment program. Empowerment
involves the delegation of authority from management to employees,
on hierarchical forms of work organization and sharing of information
between and within different levels of the organization. . (Conger and
Kanungoo, 1998)Empowerment also implies the freedom and ability to
make decisions and commitment, not just to suggest them or to be
part of making them.
Empowerment is about power and enhancing. Important Perspectives

A study of the above views yield a few important perspectives
(i) any organization that wishes to empower its employees has to
proceed in a systematic structured manner. This requires an insight
into the antecedents/pre-requisites, which will facilitate empowerment
efforts and sustain those in the long run.
(ii) Empowerment is a psychological state and hence it needs to be
measured periodically to assess the outcomes of empowering efforts.
(iii) While empowerment and participation do require almost the same
ideology, yet they cannot be considered synonymous. (Zeithaml, 2006)
Antecedents of Employee Empowerment While most researchers agree
that organizations can play a very positive role in empowering
behavior, there is lack of consensus on how it can be actually done.
Prominent work has been limited to mere identification of
conditions/organizational practices/techniques that, if used, could lead
to empowered employees.
Considering that, a satisfied customer and employee are of important

value to the organization; it therefore, becomes the duty of the
management to put in place a system that would ultimately generate
either satisfaction, or dissatisfaction of their employees as well as their
customers.
Company

Internal marketing External
marketing
“Enabling the promise” “Making the

promise”
Employees Interactive marketing Customers
“Delivering the promise”
Figure 2: service – profit chain
Source: Kotler and Armstrong 2001
As shown in figure service marketing will need to consider internal

marketing and interactive marketing besides the external marketing.
The interactive marketing heavily depend on customer contact
employee as explained earlier and the quality of customer contact
employee will in turn be depending on fair recruitment. This is also
called service- profit chain where internal employee satisfaction leads
to customer satisfaction
This according to (Baruch, 1998), forces organizations to re-think their

strategy” because as he points out, companies today recognize that
they can compete more effectively by distinguishing themselves with
respect to service quality and improved customer satisfaction.
(Shevlin, 2004) If having satisfied customers was all it took to grow,

banks would be in heaven: Few bank customers are dissatisfied. But
banks want customers with deep relationships which few have.
Satisfaction scores aren't good predictors of consumers' future
purchase intentions. Banks should stop relying solely on satisfaction as
a success metric and also measure customers' perceptions of its
customer advocacy.
(Grönroos, 2001)In banking organizations, the general offering in a

particular industry is averagely similar, even though they may engage
in different approaches to achieving a differentiation from the others,
to be able to gain more market share and customers in the industry,

“that almost any retailing bank can provide an individual with retailing
services, but not every bank manages to treat customers in a way that
they are pleased with.” Service providers therefore seek to
differentiate themselves from their rivals by offering customers higher
quality of services than their competitors’, which makes the basis of
their competition to be defined by their services.
(K Sen., 2008)The nature of services as being intangible,

heterogeneous, perishable, produced, and consumed at same time
makes it peculiar to deliver, and challenging to organizations to
achieve a differentiation from the others. Following therefore all the
qualities of service, and with respect to the banking sector, a bank
cannot inspect its services and products to weed out unsatisfactory
ones before they are presented to the customer. Employees are a
crucial stakeholder group for almost every business. For most
businesses they are also a highly potent resource. Yet, while many
businesses talk the language of employee involvement, engagement
or empowerment, few actually practice it. (Goiter, 1995), Director of
Tomorrow’s Company, says: “All too often the rhetoric of employee
empowerment masks the reality.”
(Hewitt, 2005) “Accounting for People”, the UK Trade and Industry

Secretary, recently announced that companies would be required to
report annually on the quality of their staff management and its impact
on business performance. This will form part of the Operating and
Financial Review and is expected to force boards to view human
resource issues as strategic and central to business success.
(Ashis, 2003) Employees therefore become the voice and face of the
organization, but it is not enough that they be trained to provide
quality service .This is one of the arguments for employee
empowerment since the employees act as an interface between the
customers and the organization.
According to (Looy, 2003) with reference to the specific nature of

service delivery,” empowerment becomes a very important issue to
organizations producing services.” In that, the customers and the
employees are engaged simultaneously in the production of the
service.

(Grönroos, 2001)In order for the management to trust that the
employees are successful in dealing with their customers, the
management has to give the employees the authority and necessary
support to succeed at it. He points out that employees’ need to be
empowered to perform, but they also need the support of good
management, support systems, technology, and information. In
matters concerning financial commitments, investments and spending
customers, not only need reassurance that their finances are safe, but
also that they are valued for committing their stakes with a particular
financial institution.
Customers of a bank rely on the services delivered to them by the

bank whether they are saving, depositing, taking loans, cashing
cheques or buying funds, they count on the employees responsible for
handling issues relating to them, to deliver high service quality in other
to increase their satisfaction.
When service interactions are not properly controlled and handled, or

not even handled at all, the outcome is poor perception of service
quality and customer dissatisfaction.
1.2 Purpose statement

The purpose of this survey based quantitative research is to determine
and identify the perception of employees about the employee
empowerment in banking sector of Pakistan. At what extent these
organizations are practicing employee empowerment, and how much
this empowerment has impact on service quality and customer
satisfaction.
In matters concerning financial commitments, investments and

spending customers, not only need reassurance that their finances are
safe, but also that they are valued for committing their stakes with a
particular financial institution. Customers of a bank rely on the services
delivered to them by the bank whether they are saving’ depositing,

taking loans, cashing cheques or buying funds, they count on the
employees responsible for handling issues relating to them, to deliver
high service quality in other to increase their satisfaction.
The authors hope to achieve this by collecting information regarding

the bank, from relevant personnel within the bank, and some of their
customers, then constructing a model based on the variables in the
frame of reference of the paper, to verify whether the findings matches
or differs from the theory behind employee empowerment, service
quality and customer satisfaction.
This study will evaluate the usefulness and effectiveness of employee

empowerment and its impact on users and beneficiaries.
Employers can understand the causes of dissatisfied employees and

how they will be affected by that indirectly in service organizations

1.3 Significance of the study
• This research will provide a deep view to the implications of

employee empowerment to employees, government, employers,
students and the general public who have an interest in the
study.
• The readers will be able to understand new relations between
different variables and conceptual understanding of these
variables. They will read new concepts in the context of banking
sector e.g. organizational image, effectiveness and efficiency
and building trust.
• The conceptual model provides important information to
managers that how they can improve their employee trust and
commitment towards the organization as well as to their work
through proper policies.
• This study will also educate the customers in deciding whether
institution is really fulfilling its responsibilities for serving the
community or just showing off to promote its business.
• The concepts which are elaborated in the study can be
implemented practically by understanding the need of quality
services.
• This study has equal importance for managers of banks to move
forward to empowering employees for serving best to customers.
Because the employees are the important asset of the
organization. Everything can be copied (strategies, policies) but
only employees cannot be copied.
• This research is targeted at the management of organizations
within the banking industry, and industries producing highly
intangible-dominant services, as suggestion regarding employee
empowerment, which when practiced can enhance customer
satisfaction and create a good customer- perceived service
quality.
• This study will be significant in promoting good work place
environment and for motivation of it employees and customers.
It will helpful for managers for corporate strategies and effective

HRM.when they will be able to better understand the importance
of empowering employees.
• Moreover this study will be helpful not only in banking
institutions but all type of service organizations. These institutes
are assured of competitive advantage.
• This study will also provide recommendations on how to
empower employees to make customers happy and built their
trust on the institute. It will also helpful in understanding
customer needs and what tactics can be used to satisfy
customers and give benefits to them.
• This study is useful for employers, employees, governments, and
all type of institutions how they can transform themselves and
practice the things which help employee to provide services and
facilitate customer in a better way.
• Present study is in quantitative form because it shows a clear
picture in quantified terms (tables, figures and numeric etc).
Findings are comprehensive and general.
• This study serves in the banking sector whereas the past studies
are done in other fields of other sectors of services e.g.
telecommunication, hospitals, hotels etc.
• It is also significant in this way that past researches are
conducted in the context of only one bank and present study is
working in multiple renowned banks of Pakistan.
• This research is based on gender equality. Because Pakistan’s
53% population consisted on females. This is the time when
women are also playing their role in all fields of life. There are
large numbers of women working in banks.
• A large sample size is chosen for the survey whereas in the past
studies small sample sizes are selected for the survey so this
study is also significant in this way.
• This study provides the information about the banking sector of
Pakistan whereas the last researches and studies are in the
context of Europe. Pakistan’s financial institutions can get
benefits by utilizing the findings of this study.


1.4 Objectives:
Main Objectives of this study is:
To determine the impact of employee empowerment on customer

satisfaction in banking sector of Pakistan
General objectives:
• To determine the impact of employee empowerment on

effectiveness and efficiency.
• To determine the impact of employee empowerment on service
quality.
• To determine the impact of employee empowerment on
organizational image.
• To identify the impact of employee empowerment and quick
problem solving.
1.5 Research question

What is the impact of employee empowerment on customer
satisfaction in banking sector of Pakistan?
1.6 Hypothesis
Employee empowerment and customer satisfaction
H0: Employee empowerment does not have significant impact on

customer
Satisfaction.
H1: Employee empowerment has significant impact on customer
satisfaction.
Employee empowerment and effectiveness & efficiency

effectiveness

& efficiency.
H2: Employee empowerment has significant impact on
effectiveness &
Efficiency.
Employee empowerment and service quality

service Quality.
H3: Employee empowerment has significant impact on service

Quality.
Employee empowerment and trust building

trust building.
H4: Employee empowerment has significant impact on trust

building.
Employee empowerment and quick problem solving

quick problem
Solving.
H5: Employee empowerment has significant impact on quick
problem solving.

Theoretical framework
Here we would develop theories for our research based on our search
for literature. According to (Strauss, 1998) “Theory refers to a set of
well-developed concepts related through statements of relationship,
which together constitute an integrated framework that can be used to
explain or predict phenomena”. The theories developed would serve as
the frame of reference for the paper. In this part, the most important
theories linked to this research will be presented. The authors then
design the empirical study according to the presented theory.
(1)Equity Theory and Employee Motivation
(2) Management giving power to people
Being a marketing approach dealing extensively with people, is
selected by authors of the thesis as a result of the prestudy.
1.7 Equity Theory and Employee Motivation
The advanced minded entrepreneur are focusing on the smooth

functioning of the business and also retaining quality staff, as a part of
achieving their long term organizational goals.
Today employee empowerment is an essential part for the success of
any business, especially in service sector. It involves the expressions
and avenues through which the non-managerial staff members are
conditioned to be able to make certain important company decisions,
with the support and backing of a well planned empowerment
program. The self-willed decision making capacity is generated from
the amount of the power vested by the management within the
employees, during the training provided. Employee empowerment
training actually culminates in the whole set-up becoming an
empowerment model. The guided ability to take some decisions
empowers the employees and also adds to the retaining module
adopted by the company.
Employee empowerment can be supported by the management of the
organizations by providing virtual courses, special employee
empowerment workshops, through books and articles and even
software packages. There are a myriad of dedicated magazines that

companies can subscribe to and convert effectively to employee driven
decision-making. The basic concept behind the employee
empowerment program is to give authority and command to the
individual, which in turn gives the company happier employees, who
feel important! The delegated choice and participation and
subsequently responsibility makes the employees feel like first hand
representatives of the business.
Employee empowerment can only work if the management team
believes in it. The issuing of authority to the employees could be
graded, but it needs to be a rippling activity within the organization
and consistent in nature. The entrepreneur or management should be
completely committed to allowing the employees to make decisions
and execute them, also taking responsibility. The management could
pre-determine and define the scope of decisions made and work
towards effectively building decision-making teams. This model used in
employee empowerment is very effective because it enables the staff
to contribute toward efficient steering of the company profits, in a way
that benefits all.
When the managers are ready to empower their employees it means
they are willing to give up control in certain areas of work production.
The system must have scope for improvement of the strategy and
flexibility within teams. The ability of the employees to contribute to a
choice and direct decisions, leads to an alleviated feeling of self-worth
and dedication. The sense of self and the retaining of some power is a
deadly combination that works wonders on the psyche of the
employee. The elimination of the hawk’s eye and the regular criticism
creates a more positive environment.
The strategy of implementing a suggestion box, where the suggestions
are made without fear of retribution is a great management tool.
However, it is important that the managers read and consider the
suggestions. The management could also attempt establishing a
monthly forum like a symposium or monthly newsletter. It is very
essential to ensure that the employee suggestions are addressed and
discussed, especially if the management sees potential. The points or
rewarding system will give you a competitive work force.
The employee empowerment program is designed to work only with
the support of at least some suggestions being approved for some
impact on the company, failing which the same empowerment
program only re-confirms to the employees that the strategy is a farce

and real power continues to be exercised only by the managers. The
empowered work force moves front-stage and is matched by action.
Once effective empowerment is executed. The age old concept that
the work force is more efficient using their brains and not just their
hands is proven true with the various case studies on employee
empowerment.
The concept of employee management is designed to act as a practical
guide to leadership in liberated organizations. The empowerment
ripples on to the manager-managed relationship and becomes deeply
organizational in good time. Empowerment does not only include
delegating job authority, it also means job enhancement via decision
making. The traditional bureaucracy and the age old emphasis on
control and standardization are now things of the past. The new vistas
involve innovation, flexibility and commitment and consistent
improvement.
Employee Empowerment:
1.8 Management giving power to the people
The people who are committed to run their business smoothly as well
as retain quality employees to achieve the long term goals of their
organizations. They are also focusing on empowering their employees.
These young managers are well aware of the needs of the future to
compete in the business world.
EE is necessary for running a successful business. The non-managerial
staff members should be allowed to take decisions to fulfill customer’s
needs. It is also called self-willed decision making. This characteristic
can be generated by giving training to employees and this training
could be helpful for employees to take better decisions on time.
This employee empowerment training can be provided through virtual
courses, workshops, seminars, articles and books. The main purpose
behind this EE progrramme is to make the employee aware about his
responsibilities and authority. And how he can create a balance
between his responsibilities and authority. The benefit of this EE
programme is that employee will be satisfied and which in turns retain
for a long time. But without the support of the senior management this
approach cannot work. It is a continuous process. The managers must

be committed to execute this empowerment approach in their
organization.
Management has to define the scope of the authority delegated to
every individual. Managers must be willing to give necessary authority
to their employees, when employees are allowed to take decisions, and
have choice; they have the feeling of self-worth. Managers have to
check the successful implementation of the EE programme on
continuous basis.
A suggestion box should be kept in every department of the
organization where the suggestions are made without any fear. These
suggestions must be addressed and discussed. The employee, whose
suggestion is excellent, must be rewarded. This programme is
successful only when the employees see its outcomes. Some
suggestions should be approved and executed. The old idea that only
the senior members have the right to hold power and control is gone.
The new approach is continuous improvement, creativity and
innovation, flexibility and commitment to goals and to organization.
Figure 3: Model

Effectiveness
& efficiency
Service quality
Employee Customer
empowerment satisfaction
Trust building
Quick problem
Solving

CHAPTER # 2
LITERATURE REVIEW

2.1 Introduction
This chapter will give an overview of the literature and models that are
related to the research problem .this chapter will introduce the
concepts of employee empowerment and customer satisfaction. This
chapter also presents different factors which are related to the
research.
Literature flow diagram
General
discussion
On topic
EE &
effectivenes EE &quick EE &
EE & quality EE & trust
s & problem customer
service building
efficiency solving satisfaction
Summary
Figure: 3 Own diagram

Literature review
Inside of today’s unstable public and private sectors, external
pressures from political, environmental, social and technological
sources require management to seek out, evaluate and embrace, new
planning, organizational and operating techniques to remain on track
in pursuit of their association’s mission and long-term goals. Among
the myriad of proposed theories, models and plans submitted in the
past decade to the managerial community for possible acceptance and
implementation is the concept of employee empowerment. Within the
spectrum of discussion on employee empowerment, rhetoric inevitably
mentions the relevant success or failure of empowerment as a viable
tool to upper management.
According to (Kirkman, 1989) empowerment of employees is
continuously growing today in Europe. Multinationals have a great
concern on empowerment of employees. Empowerment increase
employee motivation and positive orientation towards his work role
and finally results in higher productivity.(Watson,2003)over the past
few years, traditional management has gone and new democratic
approaches has takes its place. Employee empowerment, which came
up in 1990s, is known as one of the new management concepts. (Hanold,
1997) However, when the relevant literature is analyzed, this concept is
understood to have a longer history than previously thought with its roots
Human Rights Movement of 1950 and 1960s, empowerment has rather
closely related to the various concepts and techniques designed to
democratize the work-place.
(Elmuti, 1997). As a matter of fact empowerment was given place in
the publications of Pre-1990 that discussed topics such as work
enrichment, participative management, employee motivation, total
quality -control, individual development, quality circles and strategic
planning. Without any doubt, perceptible increase in the number of
articles related to employee empowerment was seen after 1990s.
(Honold, 1997) Giving power and control to non-managerial staff. In
these approaches human resource is not managed through power but
human resource in organization is managed through facilitation and
coordination. (Nykody, 1995) Managers must be committed to
empower their staff by doing some practical things. (Develop
strategies; implement strategies, assessment, and evaluation)
(Kotelni, kov, 1992) people are the most important asset of any
organization, every thing can be copied e.g. (technology, strategy,

policies, and products) but only the human mind, ideas can not be
stolen. (Hubbard ,1979) a machine can perform equal to fifty ordinary
men but there is no machine which takes place of only one
extraordinary man.(conger , Kanungo ,1988) empower employee in a
way that will enhance the feelings of self efficacy in them. They will
come with feeling of power and able to accomplish their tasks and
objectives. (Maxwell, 2005) the organization must have to offer
training programmes to obtain a highly skilled, competent and satisfied
workforce. Ensure employee participation in decision making and
motivate them through adequate reward system. (Tschohi, 1997)
empowered employee has the power to take decision at spot to solve
customer problem. If the employee fails to satisfy customer
immediately the company go in lose in long term. Empowerment is an
important mean to satisfy customers. (Thomas, velthouse, 1990)
Empowerment is not only limited to self efficacy, it is much more
complexed. Empowerment is an intrinsic task motivation that can be
divided into four dimensions (meaningfulness, competence, self
determination, and impact).
According to (cook, 1994) empowerment can be divided into three
levels
(1) Employees involvement in decision making but the managers
are responsible for
Implementation of these decisions.
(2) Managers are responsible for making strategic decisions but
employee is also part
of it. The managers have to discuss these decisions with their
employees.
(3) Employees are totally involved in decision making process.
(Tschohl, 2001) empowerment of an employee is the critical part of

customer service. It is a guaranteed investment because if you provide
excellent services to your customers, they will come back with more
additional customers for you. But it is only possible when you give
freedom and authority to employee to satisfy customer as he want.
The employees are allowed to take decisions without moving toward
supervisors and managers. If employees are allowed to do work in this
way then the organization have empowered workforce otherwise not.
(Quinn, sprietzer, 1997) have found three consequences to empower
individuals in any organization.

Sense of fulfillment:
There should be sense of meaning and the employee has a feeling
of experiencing full
freedom in taking any type of decision regarding providing services
to customers.
Greater motivation:
Empowerment increase self motivation in employees and it results
in complete
understanding of job responsibilities.
Higher commitment:
The employees which are empowered they enjoy a sense of
ownership in organization
this benefited to the organization to have a committed workforce.
(Philemon, Elizabeth, 2004) to maintain a competitive advantage in

banking sector, emphasis has given to customer satisfaction. The
people who interact with customers, their behavior and attitude play
an important role to influence customers in positive and negative way.
But they only do when employees are happy and empowered.
(Grazier, 1998) the people who are in customer service department
they not only provide services to customers but also facilitate them in
decision making process. They offer best suitable option to the
customer. They also offer services which are convenient in price. These
decisions can be made only when employees have authority to take
decisions. But the traditional managers are not in the favor of
empowering employees. So the employees failed to provide excellent
services to customers and ultimately which results in dissatisfied
customers. (Maxwell, 2005) it is the duty of top management to
empower employees. By doing this they will be successful in enhancing
the total quality of organizational goals as well as customer
satisfaction. Managers are responsible to create a climate in which
quality of organizational goals, customer satisfaction, and employee
motivation can be enhanced.
(Tschohl, 1997) said that many managers think that giving authority to
customers is empowerment but actual empowerment is that
employees have power to break rules to take care of their customers.
(Kauffman, 2006) generally, two tracks to grow your business. One is
to sell the product or services to the current customer again and again,
but the second way is to find new customers. If the current customers

are satisfied he will take new customers to you by using word of mouth
(WOM) the words spread like flu germ. One thing should be kept in
mind that communication is a powerful tool to satisfy customers
because the effective communication creates opportunity for the
organization to gain more customers. John Nordstrom founder of
national departmental store chain said to his employees “listen
customers carefully, provide the things they demanding, encourage
them to come again to your shop, and do everything within your power
to satisfy the customers. When the customer leave the store must be
satisfied”.
(John.J, 1994) the organization which wants to fulfill the needs of their
customers and wish to make them happy, first they make efforts to
focus on their employee needs. The management has to encourage
employees to take initiatives and discourage the traditional chain of
commanding which employees have no authority to take decisions.
(Saucy, 2000) according to her today’s business success is linked with
giving freedom of action to employees. It will helpful in successful
business. The duty of managers is to hire qualified employees and
encourage them to work according to their own innovative ideas. It will
make the environment well and the employee will use his full energy to
achieve organizational goals.
(Fyfe, 2009) time management is also the part of employee
empowerment every employee has two lives,
(i) Work life
(ii) Home life.
It is the duty of the manager to give free hand to employees to
manage their time according to their own convenience. Because it is
an important factor of employee dissatisfaction and which finally
results in customer dissatisfaction.
(Wright, 1998) the companies which are giving more attention to
employee empowerment have high employee retention rate, lower
absenteeism. Because employees perform 20% better than not
empowered employees. It leads to satisfied customers. If the heart and
head of an employee are engaged to take one decision, they will be
highly motivated to achieve organizational goals.
(Heathfield, 1994) it is an old concept when you are empowering
people, you do something for others and bestowing something to
others but it’s a wrong thinking you are doing things for yourself and
your organization.

Effectiveness & efficiency
(Conger, Kanangu, 1988) management researchers and practitioners
have keen interest in concept of empowerment and related
management practices. This interest is due to several reasons. First
studies on leadership and managerial skills suggest that the practice of
empowering subordinate is a principal component of managerial and
organizational effectiveness. Second analyses of power and control
within organization reveals that the total productive form of
organizational power and effectiveness grow with superior sharing of
power and control with subordinates. (Mayers, 1987) employees are
effective performers when they are empowered. Because it is the fact
that the employees who have authority to take decisions perform
better. And utilize the resources of the organization efficiently.
Therefore most of the companies are striving for employee
empowerment to get maximum output by using minimum resources.
(Weaver ,John J 1994) training programmes are also the part of
employee empowerment because the programmes are main effective
source for employee developments. They enhance their creativity and
innovation and also improve their communication skills. (Coffey, 2009)
the managers of the organizations will coach the employees about
appropriate resolution. The employee will feel courageous when the
managers have a direct conversation with employees. It will help the
employee to better coordinate with customers to satisfy them.
(Jackson, 1992) the person who can make decisions individually and
collectively in a team can solve customer’s problems effectively, utilize
the resources efficiently. It will helpful lowering the cost and increase
the quality of the services and overall helpful in customer satisfaction.
Empowerment is one of the most effective ways of enabling employees
at all levels to use their creative abilities to improve the performance
of the organization they work for, and the quality of their own working
life.
(Chaturvedi, 2008) Employee empowerment is a kind of the risk
management process whereby a culture of empowerment is developed
information—in the form of a shared vision, clear goals, boundaries for
decision making, and the results of efforts and their impact on the
whole is shared competency in the form of training and experience is
developed; resources, or the competency to obtain them when needed
to be effective in their jobs, are provided; and support in the form of
mentoring, cultural support, and encouragement of risk-taking is

provided.(Adams, 1990)For an organization to enjoy the returns from
employee empowerment the leadership must diligently work to create
the work environment where it is obvious to all that employee
empowerment is desired, wanted and cultivated. Management’s
responsibility is to create the environment for employee
empowerment. (Meyers, 1987) When organizational leadership has
started to take actions to encourage employee empowerment it is then
up to the employees to decided if they wish to take advantage of the
opportunity or not. It is not unusual for only a small minority to accept
the challenge initially. Also it is very likely that some fraction will
never respond. It is the large middle group that must be convinced to
practice employee empowerment and they will finally succeeded in
performing well by giving better output to their organization.
(Blanchard, 2000) Empowerment is not giving people power but letting
that power out. People already have plenty of power in the wealth of
their knowledge and motivation to do their jobs magnificently.
Empowerment is a top-down value driven issue.
(Barry, Fox, 2007) (Spence, Nathan, 1986)Employee empowerment is
a process that benefits individuals, managers and the overall
productivity of companies. Employees become more involved, feel
valued and stimulated to over deliver.
(Petter, 2002)Generally accepted components of employee
empowerment include:
Power – the actual authority to follow through with ideas
generated.
Decision Making – the inclusion and participation in decision-
making groups,
meetings and activities.
Autonomy – the time, freedom and mobility to fully take part in
the decision-
making process.
Initiative and Creativity – the ability to express one’s drive
and motivation.
Knowledge and Skills – the resources, training and support
required to bestow
sense of competence to the employee, a true feeling that they
are fully prepared
and equipped to contribute in a beneficial manner.

Accountability – as in being held responsible for the results of
track able goals and
achievements towards the organization’s mission.
Service quality
In banking organizations, the general offering in a particular industry is
averagely similar, even though they may engage in different
approaches to achieving a differentiation from the others, to be able to
gain more market share and customers in the industry. According to
(Gooronos, 2001), “that almost any retailing bank can provide an
individual with retailing services, but not every bank manages to treat
customers in a way that they are pleased with.” Service providers
therefore seek to differentiate themselves from their rivals by offering
customers higher quality of services than their competitors’, which
makes the basis of their competition to be defined by their services.
(K.Sen, 2008)The nature of services as being intangible,
heterogeneous, perishable, produced, and consumed at same time
makes it peculiar to deliver, and challenging to organizations to
achieve a differentiation from the others.
Following therefore all the qualities of service, and with respect to the
banking sector, a bank cannot inspect its services and products to
weed out unsatisfactory ones before they are presented to the
customer. (Lancaster, Reynolds, 2005)Employees therefore become
the voice and face of the organization, but it is not enough that they be
trained to provide quality service, that they know what to do and how
to do it. It is also essential that they have the requisite authority to
make decisions regarding customer satisfaction. This is one of the
arguments for employee empowerment since the employees act as an
interface between the customers and the organization.
Services are something different from goods and important to
consider. This is a bitter fact that contributes to the failure of service
marketing. These differences are defined by Gornoos that are defined
in the table below.
Difference between services and physical good
Physical goods services
Tangible Intangible

Homogeneous Heterogeneous
Production and distribution separated Production and distribution
and consumption
consumption simultaneous processes
A thing An activity process
Core value produced in factory Core value
produced in buyer seller
Interaction
Customer do not (normally) participate in Customers
participate in production
the production process
Can be kept in stock cannot be kept in
stock
Transfer of ownership No transfer of
ownership
Source; Gronroos, 1990, p.28
(Gornoos, 1997) Services, being the fastest growing segment of the

economy, provide for additional challenges and opportunities. The
traditional 4 P's were created to fit with tangible goods. (Booms,
Bittner, 1981) the ‘7’Ps extending the traditional 4 P's by three
additional ones applicable especially in service environments. The new
P's are referred to as Process, Physical Evidence or Presentation, and
People. According to an interview with (Deutsch, Kotler, 1990) refers to
the 4 P’s (Product, Price, Place and Promotion) as being universal.
Concerning the service marketing field, some additional factors can be
introduced. In order to develop service quality: People, Presentation
and Process are to be considered also in financial service marketing
According to (Looy, 2003) with reference to the specific nature of
service delivery, “empowerment becomes a very important issue to
organizations producing services.” In that, the customers and the
employees are engaged simultaneously in the production of the
service. This inseparability is what is considered by the organization in
choosing how best to serve its customers. The inability of the
management to control the service encounter makes the employees
responsible for the quality of service delivered to the customers. In

order for the management to trust that the employees are successful
in dealing with their customers, the management has to give the
employees the authority and necessary support to succeed at it.
(Ashes 2008) Employees therefore become the voice and face of the
organization, but it is not enough that they be trained to provide
quality service, that they know what to do and how to do it. It is also
essential that they have the requisite authority to make decisions
regarding customer satisfaction.
(Lashelay, 1995) points out that employees’ need to be empowered to

perform, but they also need the support of good management, support
systems, technology, and information. (Grönroos, 2001) employee
empowerment in banking operations is largely concerned with the
improvement of customer service quality. Specifically, it is intended
that through empowerment employees will be more committed to
successful service encounters and will have the necessary discretion
and autonomy to do whatever is needed to “delight the customer”.
Investigation of the various initiatives under the name of
empowerment reveals a variety of managerial meanings and motives
for empowering employees. Four different motives can be identified.
These shape the nature of the initiatives selected in an organization.
These in turn are likely to generate different levels of commitment,
and allow different degrees of autonomy and discretion among the
empowered. Provides a framework for understanding managerial
motives in selecting different forms of empowerment. Suggests some
contextual factors which are likely to influence managerial perceptions,
and finally considers the impact of initiatives on the empowered.
Building trust
(Litienjie, Tekufon, Awomodu, 2008)Top management commitment and

employees empowerment are one of the most important and vital
principle in total quality management, because it was often assumed
to have a strong relationship with customer satisfaction. Top
management commitment is creating an organizational climate that
empowers employees is very imperative.In matters concerning
financial commitments, investments and spending customers, not only
need reassurance that their finances are safe, but also that they are
valued for committing their stakes with a particular financial

institution. Customers of a bank rely on the services delivered to them
by the bank whether they are saving, depositing, taking loans, cashing
cheques or buying funds, they count on the employees responsible for
handling issues relating to them, to deliver high service quality in other
to increase their satisfaction.(Laschinger,K.spence, 1983) In today's
dramatically restructured banking work environments, organizational
trust is an increasingly important element in determining employee
performance and commitment to the organization. The authors used
Kantar’s model of workplace empowerment to examine the effects of
organizational trust and empowerment on two types of organizational
commitment. A predictive, non experimental design was used to test
Kantar’s theory in a random sample of 412 Canadian banking staff.
Empowered employees reported higher levels of organizational trust,
which in turn resulted in higher levels of affective commitment.
(Nyhan, 2000) has explored the feasibility of a trust-based

organizational paradigm as a new model for public sector
management. The author proposed that participation in decision
making, feedback from and to employees, and empowerment of
employees led to increased interpersonal trust (between supervisor
and employee) in a public organization. These trust-building practices
between supervisors and workers led to increased productivity and
strengthened organizational commitment. The analysis demonstrates
that the trust-based model is a viable paradigm for increasing
interpersonal trust, organizational commitment, and productivity in the
public sector.
(Gomez, Rosen, 2001) the authors have examined the relationship

between managerial trust and employee empowerment. Hypotheses
derived from leader-member exchange (LMX) theory suggested that
the quality of leader-member relations mediate the linkage between
managerial trust and employee empowerment. Whereas previous
researches have pointed to the influence of organizational and social
structural variables on empowerment, this research showed the
importance of manager-employee relationships on perceived
empowerment.
(Laschinger, K.spence, 1983) However, empowerment did not predict
continuance commitment-that is, commitment to stay in the
organization based on perceived lack of other job opportunities.

Because past research has linked affective commitment to employee
productivity, these results suggest that fostering environments that
enhance perceptions of empowerment and organizational trust will
have positive effects on organizational members and increase
organizational effectiveness. (Artgib, 1988) when you are in service or
hostile work environment. You don't need many experiences like this
to have your trust in an employer, or employment in general, be
severely undermined. Managers have to create such an environment,
where the communication between management and the employees
should be fantastic, and where the leaders and managers worked
together to guide the team to real and tangible success and the feeling
are more one of family than of human resource. In those places, the
turnaround in employees has been at a minimum, and people who
have left for seasonal reasons have fought to return. All of this
experience has hammered one point: building employee trust should
be the first objective of the corporate and management staff. It is
higher than customer experience in making a company successful. The
companies where employee trust was highly valued are the ones to
which are successful in gaining loyal customers.
(Gib, 1998)So when it comes to management training, remember that
success is built on trust, and trust will do more to motivate and inspire
productivity than threats. If you want to see a turnaround in every
aspect of your business, invest some time and effort into building
employee trust. (IOB, 2004)A recent report by the Institute of banking
(IOB) articulated the importance of a positive work environment for
ensuring customers safety in banks settings. Creating and sustaining
trust throughout the organization is identified as a critically important
leader activity.
(Decker, Wheeler, Johnson, Parsons, 2001)Yet, after a decade of

downsizing and restructuring during which thousands of employees
were let go, employees are understandably distrustful of management.
Moreover, they feel that management staff does not respect them or
their work.
(Laschinger, 2004) This lack of respect is manifested in several ways,

including the manner in which management communicates important
organizational decisions and the failure to address concerns expressed
by employees about the implications of these decisions.(Lawson,
2001)Build the trust of your employees from the Inside out: Four Keys

to built employee trust will also helpful in growing your business.
According to Lawson these four keys for successfully empowering an
organization’s personnel: Involve your employees in the decision-
making process; involve your employees in the planning process; offer
praise freely; and provide continual training and support.
(Helling, 1993)Perceived lack of trust and respect in the work

environment has detrimental effects on both the organization and
employees. Employees who are distrustful are less likely to contribute
to organizational goals and activities to the same degree as those who
experience high levels of trust in their organization. Management will
have to work hard to regain the trust of their employees if the
profession is to survive the impending shortage of qualified
practitioners. Recruitment of newcomers to the profession and
retention of those currently in the system will depend on regaining this
lost trust. An important strategy for increasing recruitment and
retention of employees will be to create work environments that
manifest justice, trust, and respect and thereby facilitate professional
practice. Kantar’s notion of creating conditions of work effectiveness
through the establishment of empowering work structures is a logical
basis for this strategy.
Quick problem solving

(Hausen, 1993) many business want to satisfy the customer totally
satisfy by anticipating their problems before their occurrence and solve
them quickly when they occur. To fulfill the customer’s needs,
employee required some autonomy to solve customer problems, and
make them happy when they leave the store. They must need
significant autonomy to make changes according to requirement of the
customer within limited time and resources. (Tschohl, 1995) when the
employees are allowed to fully satisfy customers, it is a guarantee that
the customers will come again and again .but when customers come
with some sort of problem to the store. It is the time for the employee
to gain customer life time value and loyalty for the organization but it
is possible only when employee can take decision without moving
towards the supervisor and the manager.
(Coffey, 2009) happy employees make the customers happy, even

using their best possible resources to satisfy customers. Sometimes
employees solve the customer problems with their own resources.

Even the customers want something which they do not have but they
guide the customers to the right location and sometimes go with them
and it leaves a good impression in the mind of the customer. (Helling,
1993) every organization of the world make mistakes in serving
customers, no matter how excellent their products and employees are
efficient in making customers happy. For this purpose many companies
have make customers call centre to quickly solve customer problems.
(Ettore, 1997) making a mistake and then admitting it, is a good
experience for an employee and as well as for the customers. At first it
felt panicking to employees to apologize to customers. But on the
other hand the customers who are doing business with that company
will feel that it is the best company of the world. According to
(Michelle, Kaminski 1988), empowerment is defined as a
developmental process that promotes an active approach to problem
solving, increased political understanding and an increased ability to
exercise control in the environment. As people develop through the
stages of empowerment, they become more able to analyze issues in
context and apply their skills to successfully resolve them. Those in the
earlier stages might succeed at only relatively simple problems, while
those in later stages are likely to be effective at handling broader,
more complex issues. When most people refer to employee
empowerment, they mean a great deal more than delegation.
(Tschohl, 1992) definition of empowerment is employees having an
autonomous decision-making capability and acting as partners in the
business, all with an eye to the bottom line. While many employees
understand their contribution to the work at hand, how many know
their contribution to the bottom line?
Employee empowerment, as stated by (Kotler, 2003) includes the
transfer of authority, responsibility and the provision incentives to
detect, care about and deal with customer needs. (Peppered, 2000)As
stated before, established two-way communication enables the bank to
improve by listening to customers. (Hans, Albinsson, 2004) describe
that employee in positions dealing with customer complaints have to
be well trained in order to be able to handle and act upon service
problems. (Kotler, 2003) adds that leading service companies utilize
front line employees using measures such as training to gain
competitive advantage, by enabling workers to deal with problems or
complaints immediately and effectively. (McCall, 2004). Customer
complaints have to be seen as an inexpensive way for market research

that stresses areas in need of improvement. (Anonymous, 2005) To
provide additional service to clients, Umpqua Bank created the 'ten-
minute switch kit', which allows prospective customers to change to
Umpqua in ten minutes, right in the bank with employee assistance.
(Kotler, 2003). Tackling evolving service problems in the right manner
prevents loosing customers, and may even strengthen the relationship
between the organization and its clients. In detecting service problems,
only five percent of customers complain to the company, most just
switch the provider. In order to prevent this loss of customers,
proposes a complaint management system. Encouraging customers to
complain, by using different channels, as e.g. face to face contact, e-
mail, call center service, fax or traditional mail, empowers the
organization also to learn about weaknesses and provides an
opportunity for improvement.
Customer satisfaction:
(Spetz, Butler; 2008)In the past years the competition in the banking
sector is increasing. There is more choice for the customers and
thereby the banks have to work harder to attract customers. (Peter,
Waterman, 1982) focused that good organizations align their strategies
and goals to the requirement s of their customers’ .One way is to care
employees and empower them. (George 1992)There exists an
interaction between the desired results and customer satisfaction,
customer loyalty and customer retention. They may go by other names
such as patients, clients, buyers, etc. Without the customer it is
impossible for any business to sustain itself. Achieving the desired
results is frequently a result of customer actions. (Stravic, 1991) Any
business without a focus on customer satisfaction is at the mercy of
the market. Without loyal customers eventually a competitor will
satisfy those desires and your customer retention rate will decrease.
Customer satisfaction may be a good predictor of compliance with care
regimens and, for family planning, continuation of method use. A
growing body of research has found that in both developed and
developing countries, customers share seven major concerns in
judging quality of service. (Kols, 1998) These are:
1. Respect. Customers want to be treated with respect and
friendliness. Customer
interpret courtesy, confidentiality, and privacy as signs that
providers are treating
them as equals.

2. Understanding. Clients’ value individualized service and prefer
providers who make
the effort to understand their particular situation and needs. They
want Providers to
listen to them and to explain options in terms that they
understand.
3. Complete and accurate information. Clients value information.
They worry that
Service providers are not telling them all the facts, especially
negative information
About contraceptive methods.
4. Technical competence. Customers can and do judge the
technical competence of the
services they receive, although they may not use the same criteria
as providers and
they may not be technically accurate. Ultimately, clients judge
technical competence
by whether their needs are met or their problems are resolved.
5. Access. Customers want ready access to services and supplies. A
convenient location
and prompt services are important, but access also means that
services are reliable,
affordable, and without other barriers.
6. Fairness. Clients want providers to offer thorough explanations
and examinations to
everyone alike. They complain that providers offer preferential
services to friends,
relatives, those from a higher social class or certain ethnic group,
those with political
connections or those who offer bribes.
7. Results. Clients come for services for a specific purpose. They are
dissatisfied when
told to come back another day or to go to a different facility, or
when providers
dismiss their complaints as unimportant.
(Peabody, Bernhart, 1999) Customer' satisfaction is an important
indicator of service quality. Client satisfaction is difficult to assess,
however, when many clients express satisfaction regardless of
technical quality. (Scott, Smith, 1994) Evidence on the association

between client exits interviews regarding provider skill and technical
quality evaluated from expert observation or an equivalent gold
standard is mixed, but suggests that there would be little correlation.
(Hoadley, 1999)Employed during employee empowerment actions
would sometimes produce unexpected results, which might hinder or
promote progress towards the goals set out initially to satisfy
customers and to benefit the organization as well as employees.
Employees were not necessarily more productive, but perhaps quality
would rise as attention to defects increased. Or representatives would
not answer more customer service calls, but the calls they did respond
to had higher perceived customer satisfaction as a result. According to
(Owens, Olsen, 1999) also the exact benefits an organization hoped to
reap from employee empowerment did not always propel the
organization any closer to its long term goals or mission. Herein a lack
of adequate planning had identified inappropriate parameters to affect
with empowerment.
(Alibegovic, Hawkins, Parmer, 2009)Most managers and scholars
emphasized that an organization’s most important tool for gaining a
competitive advantage is its people and; in order for the firm to attain
success employees must be involved and active and in a result they
will be succeeded in satisfying not only customers but building long
term relationships with them.

Summary
In today’s competitive work conditions, existence of a strong connection

between the continuation of existence of organization and the
competences that provide the satisfaction to the customers, between
gaining this competence and modern management philosophy and
practices, this theory of employee empowerment (EE) seems to be getting
more obvious. This theory also provides a vital competence that
companies should possess in their competitive conditions. Employee
empowerment is a philosophy and arrangement that will help companies
gain this vital competence.
The research has shown the organizations that are focusing on the
quality of services are achieving high level of customer satisfaction.
But it is understood that the key to achieve customer satisfaction is
empowerment of employees .there is a positive and significant
relationship CS and employee empowerment. Employee empowerment
is directly related to satisfy customers which lead to profitability.
The employee who are empowered perform their job well, which leads
to higher productivity, employee loyalty, organizational effectiveness,
and it in turns to satisfied customers.
Giving value to employees and provide excellent services to customers
are the two core values to satisfy the customers.
It makes the connection between customer satisfaction and its
integration with internal
processes and results. “Customer focus impacts and should integrate
an organization’s strategic directions, its work systems and work
processes, and its business results”.
In regard to empowerment this is “aimed at enabling people to satisfy

customer on first contact, to improve processes and increase
productivity, and to improve the organization’s performance results.
An empowered workforce requires information to make appropriate
decisions.”
Employees perform with their heart and head when they feel that they
are not employees they are the family of the organization and have the
full authority and command to take decisions for the betterment of the
organization and for them. They feel a sense of accomplishment.
Because it is the fact that the employees who have authority to take
decisions perform better and generate maximum output with minimum

resources. Therefore most of the companies are striving for employee
empowerment to get maximum output by using minimum resources.
Employee empowerment in service based organizations is largely
concerned with the improvement of quality of services provided to the
customers. Specifically, it is assumed that through employee
empowerment, the employees are more committed to successful
provision of services. Employees will have the necessary command and
autonomy to do whatever is needed to “Make happy the customer”.
The organization has to create open environment where
communication between employees and managers should be opened.
Employees can share their problems and concerns with their managers
and where the leaders and managers worked together in teams to
guide the employees real. At those organizations, the turnover in
employees is low, and people who have left the organization for some
personal problems are fighting to come back. All of this focused on one
point: building employee trust should be the first objective of the
organization.
Employees should be allowed to satisfy the customers, it is a
guarantee that the customers will come again and again .but when
customers come with some sort of problem to the store. It is the time
for the employee to gain customer life time value and loyalty for the
organization but it is possible only when employee can take decision
without moving towards the supervisor and the manager.

CHAPTER # 3
METHODOLOGY

Methodology
3.1 Introduction
In this chapter, the steps of the research will be illustrated. The choice
of topic and the aim of the research will be discussed. The choice of
the method used will also be justified. The design of the study and the
methods of data collection will be described. The criticism to the
method will be outlined, illustrating the advantages and shortcomings
of the preferred methods. The tests of the chosen methods concerning
validity, and reliability will be tested, in order to justify the approach
taken.
3.2 Study Design:
3.2.1 Research approach

As defined by (yin, 2003) a collection of structured questions designed
to elicit information for a specific purpose. Questionnaires are
commonly used in market research and make use of two types of
questions: multiple choice questions, which are designed to produce a
limited response, and open questions, which allow respondents the
opportunity to air their views freely.
According to (Benet, 2007) “an open ended questionnaire is used as a
research strategy is used in many situations to contribute to our
knowledge of individual, group, organizational, social, political, and
related phenomena”. Questionnaires are one of several ways of doing
social science research; other ways include observations, surveys, and
interviews of archival information. He further argues that the first and
most important strategy for differentiating among the various research
strategies is to identify the type of research question being asked, and
suggest that in general “how much, what and who” questions are likely to
favor the use of interviews and surveys.
3.2.2 Questionnaires:
As part of the primary data collection, we handed out questionnaire to
about 100 employees of the bank within five days at the same places in
Lahore and at various intervals as they came in and out of the Bank. This
also can be faulty as we could not meet a large number of people due to
time constraint and because they had to show up at their working places.
The aim of having the employees to participate in the exercise was to get

an insight of their perspective about their satisfaction with the bank’s
services. This is in order for us to compare partly their reflections about
customer satisfaction and the practices of employee empowerment in the
bank. We handed out questionnaires to the employees of the bank, in
order to get their opinion about the issue of empowerment, and to what
extent they feel it is implemented in the bank.
We handed them the questionnaires and returned within the next few
minutes to collect the
responses. This was in order for us to give them enough time to think
their answers through
before responding.
Information regarding the length of time the employee has been
providing banking services in general, and particularly satisfying the
customers; full-time or part-time status; hours worked per week; and
volume of clients are captured by this questionnaire. This survey also
asks about any in-service rewards that the service provider has
received. This questionnaire also asks questions regarding the level of
services provided, for what services referrals are made, if at all, where
referrals are made, and reasons for choice of referral site.
This questionnaire captures detailed information regarding the services
available and the availability and/or stock-outs of particular essential
supplies. Information regarding whether the employee is a member of
the(Institute of Bankers Pakistan) IBP network and if so, the impact of
membership on a variety of outcomes indicators—client volume, client
satisfaction, income, profits, service supply, quality of services, range
of services provided is also collected.
3.3 Research design

This research is designed to get data through both sources Primary
and secondary sources and through the responses to the
questionnaires conducted. Also, through the internet, published
articles and questionnaire. Hypothesis testing is applied on the data
and summary of the testing is also provided. Descriptive analysis of
the data and frequency tables are also included in the thesis. The
sampling procedure used is convenient sampling and sample size is
100. The questionnaire’s are coded in SPSS and findings are generated
through SPSS .The thesis includes frequency tables, frequency tabular,
descriptive statistics, bar charts, graphs and report summaries.
The data to be used in this study comes from a survey that is
conducted as part of a cross-national evaluation of selected banks. The

evaluation and the actual data collection are done by visiting different
banks of Pakistan. Data is collected between June 2010 through the
administration of a survey in which every variable is covering the
relevant questions which should be answered by the employees. The
main variables are employee empowerment and customer satisfaction
and the mediating variables are effectiveness and efficiency, service
quality, quick problem solving, and trust building.
The primary purpose of this survey is to evaluate the performance of
banks in providing services to the customers. And come with solutions
to improve the satisfaction level of the customers by empowering the
employees which are dealing with the customers and increasing the
use of contraception among individuals.
3.3.1 Primary Data

(Saunders, 2000). Data that is collected for the purpose of the study
and that has not been existent before. Methods of obtaining primary
data, according to (Damon, Holloway 2002), are questionnaire,
interviews studies or observations.
Primary research is conducted amongst key decision makers across
banking institutions which are providing services to customers, to
determine the current industry attractiveness and to assess the
present state and future of this industry as a whole. It is felt that, for
the purposes of this study, it is necessary to conduct complex,
quantitative research in the form of a structured and comprehensive
research questionnaire. The aim of the Study Project is thus to take a
more investigative approach for better results.
The questionnaire is used as method of obtaining primary data and
secondary data is also used that is applicable to the research purpose.
The questions may be adapted or enhanced in their scope due to new
insight gained during the data gathering process.
Moreover, the author is aware of some problems that can arise due to
language
differences. The questions are written in simple and easy words. The
questionnaires are prepared in English, which is not the native
language of the respondents but they can speak and understand it
well. The author has therefore explained questions in more detail, if
needed, and have asked for additional explanations, if the answers are
not clear. Another factor, the authors consider to have an influence on
the thesis, is that the respondents have to tell the reality which they

are facing actually at work. They cannot be expected to criticize the
company they represent. Furthermore, the respondents might even
present information in a more positive way than it is the case in reality.
3.3.2 Secondary Data

(Saunders et al, 2000). Data that has already been collected for
different purpose, which can be used by researchers to re-analyze and
draw, own conclusions. Both, raw data as well as published summaries
can be regarded as secondary data. Secondary data allows researchers
to access large amounts of data they might otherwise not be able to
obtain, due to limitations in time, budget or reach.
The secondary data, also referred to as frame of reference, in this
research thesis literature is about employee empowerment, especially
in financial service and customer relationship management.
The secondary data have been obtained by conducting an extensive
literature review on relevant and related topics to provide a thorough
understanding of the global and local banking industry trends, the
strong levels of attractiveness of the past, and the recent perceptions
regarding the industry attractiveness as documented in journals and
books.
Secondary data used in this study is obtained through the library of
The Superior University Lahore, journals and publications available
through electronic libraries, accessed through The Superior University
Lahore. Additionally, the websites of banks, providing e.g. annual
reports with information concerning employee empowerment, quality
services and focus on customer satisfaction are used. Scientific
journals, such as 'ABA Bank Marketing' provide up-to-date information
on key areas of research.
The secondary data provides the basis for our research and it is
therefore important to have fundamental knowledge of employee
empowerment and customer satisfaction techniques. And the special
characteristics of banks in order to successfully retrieve our primary
data and achieve our purpose.
3.4 Research site

The author has visited the different banks of Lahore situated at
different localities for fulfilling this research questionnaire.
3.5 Population

The quantitative research is conducted to find out the employee
empowerment practices of the banking institutions of Lahore towards
increasing satisfaction level of their customers. These banks are
considered as committed to provide courteous services to their
customers and valuing their employees as well. So the employees of
different banks of Lahore are selected for this purpose.
3.5.1 Sampling Frame
The sampling frames is constituted on people from Lahore belonging to
the upper, middle and upper lower class and are currently working for
different banks in Lahore.
3.5.2 Sampling Procedure
The sampling procedure used is convenient sampling and according to
this sampling technique all the people that roughly fit into my sampling
frame and which belong to the different banks under research are used
to find out the most important variables that effect the performance of
the bank employees. The total sample size for this original data
collection is 100. Employees who are currently working for the banking
sector in Lahore. Total 100 questionnaires are distributed out of which I
have received 100 filled questionnaires.

3.6 Verification of conclusions
3.6.1 Validity
According to (Kumar, 1999), the validity of a method is given when a
logical link is established between the questions and the objectives.
(Sharmmar, 1994) identifies three types of validity: the face and
content validity, the concurrent and predictive validity and the
construct validity.
To test the validity of the method of this thesis, the face and content
validity will
be applied. According to (Reishney, 2002), the face and content
validity is achieved when an instrument is valid in the sense that it
measures what it is supposed to.
This type of validity is easy to apply, but presents some problems.
Indeed the impression of logic is subjective. To reduce the subjectivity
of the logic, the authors of the thesis have first revised the
questionnaire many times after both external (with others business
administration students and the teacher) and internal discussions. The
writers also tested their questionnaire on external people.
3.6.1 Reliability
According to (Kumar, 1999), a research method is reliable not only if it
is consistent and stable, but also if it is predictable and accurate.
(Zikmund, 2000) The reliability is the “degree to which measures are
free from error and therefore yield consistent result. According to
(Sekaran, 2003), the reliability can be divided into main important
parts:
The stability of measures:

The ability of a measure to stay the same over the time is indicative of
its stability and low vulnerability to changes in the situation. The
authors of the thesis expect the measures to be stable until an
important technological innovation, such as the Internet, appears
which is unlikely to happen. As a consequence, the writers of this
thesis consider the gathered measures as stable.
The internal consistency of measures:

An indication of homogeneity of the substance. The items should be
capable of independently measuring the same idea so that the

respondents attach the same overall sense to each of the things. In
order to make sure that the respondent understands the questions, the
researcher of this paper explain, if necessary, the meaning of the
questions. Thus, the gathered measure is expected to be consistent.
Providing stable and consistent measures ensures therefore the
reliability of the underlying study.
CHAPTER # 4
ANALYSES &
RESULTS

4.1 Introduction
In this part, the authors will analyze and interpret the data which is got
through the methods mentioned above. A single case analysis will first
be used and structured according to each bank interviewed, further a
cross case analysis will be undertaken and structured according to the
model.
4.2 Analyses and Discussions
4.2.1 Descriptive Analysis

Descriptive Analysis refers to how will collect data and represent it in a
form that we may be able to define the concrete proof of what we are
trying to achieve through our study while considering numerical value
which are authentic and calculated with reliable source of computation,
in the following information through various mythological concerns
have been posted with their interpretation.
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
employee empowerment cp 100 2.00 5.00 4.0000 .84087
effectiveness and efficiency 100 1.00 5.00 4.0300 1.08670
service quality 100 1.00 5.00 3.7000 .90453
employee rewards 100 1.00 5.00 3.4300 1.29689
quick problem solving 100 1.00 5.00 3.6900 1.07021
customer satisfaction 100 1.00 5.00 4.5000 .84686
Valid N (list wise) 100
Interpretation
The mean and standard deviation values of all the variables are
presented in the table above .This output shows, for each of the 6
variables, the number (N) of participants with no missing data on that
variable. The Valid N, (list wise) is the number 100 who have no

missing data on any variable. The table also shows the minimum and
maximum scores that any participant on that variable.
The whole table represents that questions description posted there are
total 100 respondents while their range of position answers on the data
collection method (questionnaire) upon discussed question variable to
variable differs among them maximum value (5) represents last
answering option choose by the respondents and minimum value (1)
represents most high end option chooses by an respondent in a
particular category further mean values represents the overall
computed calculation of the discussed data and standard deviation
shows the possible variation among the question discussed.
This table provides the mean or average score for each variable.
Notice that all the mean values are equal to or greater than moderate
(i.e.3) which means there is a significant and positive relationship
between all the variables.
4.3 Frequency Table of all Nominal variables
A frequency table is a way of summarizing a set of data. It is a record

of how often each value (or set of values) of the variable in question
occurs. It may be enhanced by the addition of percentages that fall
into each category. A frequency table is used to summarize
categorical, nominal, and ordinal data. It may also be used to
summarize continuous data once the data set has been divided up into
sensible groups. When we have more than one categorical variable in
our data set, a frequency table is sometimes called a contingency table
because the figures found in the rows are contingent upon (dependent
upon) those found in the columns.
Statistics
gender
N Valid 100
Missing 0
Interpretation:
This table shows the missing values in the questionnaire and in the
present table there is no missing value, it means 100 participants
participated in the survey and answered all the statements mentioned
in the questionnaire.

Gender
Cumulative
Frequency Percent Valid Percent Percent
Valid male 75 75.0 75.0 75.0
female 25 25.0 25.0 100.0
Total 100 100.0 100.0
Interpretation:
This question is asked just to know about the ratio of male and female
participated in the survey and according to the results the ratio is 75%
male and 25% females. Showing that the past trends are changing now
and women are coming to work in the fields. Now banks are hiring the
employees on the bases of there abilities not on their genders.
Statistics
Age
N Valid 100
Missing 0
Interpretation:
The above table shows the missing values. The answering options
which are left blank by the respondent and in the present table there is
no missing value, it means 100 participants participated in the survey
and answered all the statements mentioned in the questionnaire.
age
Cumulative
Frequency Percent Valid Percent Percent
Valid less than 25 11 11.0 11.0 11.0
25 to 35 42 42.0 42.0 53.0
35 to 45 37 37.0 37.0 90.0
45 plus 10 10.0 10.0 100.0
Total 100 100.0 100.0
Interpretation:
The above question has been asked to know about the age of the
candidate to find out in what age category he belongs. The age also
reflects the experience of a person and his attitude towards the
practical life. The result showed that 11% of the people who are
working in different banks are less than 25. People who are in this age
bracket as it is normally anticipated that young blood is more
passionate towards the achievement of the goals. Similarly the results
showed that 42% people are employed who are between the age of
25-35 and usually People between the age bracket of 35- 45 are 37%
and 45% are those people who have experience and are on the higher
posts.
3.4 Bar charts

A bar chart is a way of summarizing a set of categorical data. It is
often used in exploratory data analysis to illustrate the major features
of the distribution of the data in a convenient form. It displays the data
using a number of rectangles, of the same width, each of which
represents a particular category. The length (and hence area) of each
rectangle is proportional to the number of cases in the category it
represents, for example, age group, religious affiliation. Bar charts are
used to summarize nominal or ordinal data. Bar charts can be
displayed horizontally or vertically and they are usually drawn with a
gap between the bars (rectangles), whereas the bars of a histogram
are drawn immediately next to each other.
Interpretation:

The above graph is showing the responses of the respondents
regarding gender. Most of the participant’s lies in male category. This
graph also presents that a large number of women are living at home
in Pakistan or working in other fields. Only 25% women are working in
the banking institutes whereas the ratio of men employed in banks of
Pakistan is 75%.
Interpretation:
The above bar graph is presenting the different age groups of
employees working in different banks of Pakistan. Approximately
people from all age groups are working which is an encouraging point.
The people belong from the age of 25-35 are above are high in
number. They are the people who are informed about market trends as
well as have practical knowledge. Whereas the ratio of young talent
recently coming from the educational institutes with passion and latest
knowledge are 11%.These are people who will have to command the
future of banking institutions of Pakistan. These include internees,
fresh graduate and post-graduates.
3.5 Scatter plot

A scatter plot is a useful summary of a set of bivariate data (two
variables), usually drawn before working out a linear correlation

coefficient or fitting a regression line. It gives a good visual picture of
the relationship between the two variables, and aids the interpretation
of the correlation coefficient or regression model. Each unit contributes
one point to the scatter plot, on which points are plotted but not
joined. The resulting pattern indicates the type and strength of the
relationship between the two variables.
Interpretation:
In the above diagram, it has been clear that the value of R Sq
Quadratic is 0.084 and value of R Sq Linear is 0.04. Now, the following
calculations are as under,
R Sq Quadratic 0.084
R Sq Linear 0.04
Result 0.04>
0.05----linear
0.04 is less than 0.05 there will be a linear co-relation between
employee empowerment and effectiveness and efficiency. There is
existing positive-weak correlation.

Interpretation:
R Sq Linear 0.078
-------------------------------------------------------------------------------
Result 0.05 =
0.05----------------> Linear.
Result 0.05
is equal to
0.05; it
means
there is a
moderate
relationship
between
two
variables.
Interpretation:

Quadratic is 0.101and value of R Sq Linear is 0.025. Now, the following
R Sq Linear 0.025
-------------------------------------------------------------------------------
Result 0.07<
0.05----------------> Linear.
Result 0.07 is greater than 0.05, it means there existing non linear
correlation between two variables. there is positive relationship
between employee empowerment and quick problem solving.
Interpretation:
R Sq Linear 0.117
-------------------------------------------------------------------------------
Result 0 < 0.05----------------
> Linear.
The above diagram presenting the result is less than 0.05 that means
there will be Liner correlation existing between employee
empowerment and trust building. there is positive relationship
between two variables.

Interpretation:
R Sq Linear 0.179
-------------------------------------------------------------------------------
Result 0.14 <
0.05----------------> Linear.
Result 0.14 is greater than 0.05, it means there is non linear
correlation and both variables are positively related with each other.

Interpretation:
R Sq Linear 0.006
-------------------------------------------------------------------------------
Result 0 < 0.05----------------
> Linear.
The above diagram presenting the result is less than 0.05 that means
there will be Liner correlation existing between service quality and
customer satisfaction. There is negative relationship between two
variables.

Interpretation:

R Sq Linear 0.023
-------------------------------------------------------------------------------
Result 0 < 0.05----------------
> Linear.
In the above diagram the result 0 is less than 0.05 that means there
will be Liner correlation existing between quick problem solving and
customer satisfaction. There is negative relationship between two
variables.

Interpretation:

R Sq Linear 0.172
-------------------------------------------------------------------------------
Result 0.04 <
0.05----------------> Linear.
The above result shows 0.04 is less than 0.05 there will be a linear co-
relation between trust building and customer satisfaction. There is
existing positive-weak correlation.
3.6 Regression
In this part of the chapter, we will define the relationship between the
dependent and independent variable.
Hypothesis
Employee empowerment and customer satisfaction
customer
Satisfaction.
H1: Employee empowerment has significant impact on customer
satisfaction.

Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 employee
empowerment . Enter
cpa
a. All requested variables entered.
b. Dependent Variable: customer satisfaction
Model Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate
1 .128a .016 .006 .84421
a. Predictors: (Constant), employee empowerment cp
Interpretation
From the above Table we can watch the affect of employee
empowerment on employee customer satisfaction. For this, we will
have to consider the value of adjusted R Square .The value of Adjusted
R square will tell us that how much employee empowerment affects on
customer satisfaction. So, it is clear that from the values of Adjusted R
Square which is 0.006.So at the end we can say this that employee
empowerment affect customer satisfaction 0.006 times.
ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 1.157 1 1.157 1.624 .206a
Residual 69.843 98 .713
Total 71.000 99
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3.986 .412 9.666 .000
employee empowerment
.129 .101 .128 1.274 .206
cp
a. Dependent Variable: customer satisfaction
Explanation:-

The table shows the relationship between employee empowerment
and customer satisfaction. Here Significance level is 0.206.which is
0.206 >0.05.SO in this case Null Hypothesis (Ho) is accepted and
Alternative Hypothesis (H1) is rejected. So, at the end we can say that
“There is no relationship between employee empowerment and
customer satisfaction.
Employee empowerment and effectiveness & efficiency

effectiveness
& efficiency.
H2: Employee empowerment has significant impact on
effectiveness &
Efficiency.
Variables Entered/Removed
Variables Variables
1 employee
empowerment . Enter
cpa
b. Dependent Variable: effectiveness and
efficiency
Model Summary
1 .199a .040 .030 1.07039
b. Dependent Variable: effectiveness and efficiency
Interpretation
empowerment on effectiveness and efficiency. For this, we will have to
consider the value of adjusted R Square .The value of Adjusted R
square will tell us that how much employee empowerment affects on
effectiveness and efficiency. So, it is clear that from the values of
Adjusted R Square which is 0.030.So at the end we can say this that
employee empowerment affect on effectiveness and efficiency of
employees 0.030 times

ANOVAs
Sum of
1 Regression 4.629 1 4.629 4.040 .047a
Residual 112.281 98 1.146
Total 116.910 99
b. Dependent Variable: effectiveness and efficiency
Coefficientsa
Standardized
1 (Constant) 3.001 .523 5.741 .000
.257 .128 .199 2.010 .047
cp
a. Dependent Variable: effectiveness and efficiency
Explanation:-
and effectiveness and efficiency. Here Significance level is 0.047.which
is 0.047<0.05.SO in this case Null Hypothesis (Ho) is rejected and
Alternative Hypothesis (H1) is accepted. So, at the end we can say that
“There is relationship between employee empowerment and
effectiveness and efficiency.
Employee empowerment and service quality
service Quality.
H3: Employee empowerment has significant impact on service

Quality.
Variables Variables
1 employee
empowerment . Enter
cpa

Variables Variables
1 employee
empowerment . Enter
cpa
b. Dependent Variable: service quality
Model Summary
1 .279a .078 .068 .87307
Interpretation
empowerment on service quality. For this, we will have to consider the
value of adjusted R Square .The value of Adjusted R square will tell us
that how much employee empowerment affects on service quality. So,
it is clear that from the values of Adjusted R Square which is 0.068.So
at the end we can say this that employee empowerment affect on
service quality 0.068 times.
ANOVAb
Sum of
1 Regression 6.300 1 6.300 8.265 .005a
Residual 74.700 98 .762
Total 81.000 99

Coefficientsa
Standardized
1 (Constant) 2.500 .426 5.863 .000
.300 .104 .279 2.875 .005
cp
a. Dependent Variable: service quality
Explanation:-
and service quality. Here Significance level is 0.005.which is
0.005<0.05.SO in this case Null Hypothesis (Ho) is rejected and
“There is relationship between employee empowerment and service
quality.
Employee empowerment and trust building

trust building.
H4: Employee empowerment has significant impact on trust

building.
Variables Variables
1 employee
empowerment . Enter
cpa
b. Dependent Variable: employee trust building
Model Summary
1 .342a .117 .108 .96350
Interpretation
empowerment on employee trust building. For this, we will have to

employee trust building. So, it is clear that from the values of Adjusted
R Square which is 0.108.So at the end we can say this that employee
empowerment affect employee trust building 0.108 times.
ANOVAb
Sum of
1 Regression 12.014 1 12.014 12.942 .001a
Residual 90.976 98 .928
Total 102.990 99
Coefficientsa
Standardized
1 (Constant) 2.333 .471 4.957 .000
.414 .115 .342 3.597 .001
cp
a. Dependent Variable: employee trust building
Explanation:-
and employee trust building. Here Significance level is 0.001.which is
0.001 < 0.05.SO in this case Null Hypothesis (Ho) is rejected and
“There is relationship between employee empowerment and quick
problem solving.
Employee empowerment and quick problem solving

quick problem
Solving.
H5: Employee empowerment has significant impact on quick
problem solving.

Variables Variables
1 employee
empowerment . Enter
cpa
b. Dependent Variable: quick problem solving
Model Summary
1 .157a .025 .015 1.06229
b. Dependent Variable: quick problem solving
Interpretation
empowerment on quick problem solving. For this, we will have to
quick problem solving. So, it is clear that from the values of Adjusted R
Square which is 0.015.So at the end we can say this that employee
empowerment affect quick problem solving 0.015 times.
ANOVAb
Model Sum of Squares df Mean Square F
1 Regression 2.800 1 2.800 2.481
Residual 110.590 98 1.128
Total 113.390 99
Coefficientsa
Standardized
1 (Constant) 2.890 .519 5.570 .000
.200 .127 .157 1.575 .118
cp
a. Dependent Variable: quick problem solving
Explanation:-

and quick problem solving. Here Significance level is 0.118.which is
0.118 >0.05.SO in this case Null Hypothesis (Ho) is accepted and
Alternative Hypothesis (H1) is rejected. So, at the end we can say that
“There is no relationship between employee empowerment and quick
problem solving.
3.7 Correlations
In this section the correlation between each of the variables are
computed and adressed.The results are presented in the table. for the
ease of analyses only correlation values more than 0.05 assumed to be
important for further analyses. In correlation we will go for Pearson
because for Pearson there should be two conditions which Are as
1. Relationship between variable should be Linear.
2. Data should be normally distributed.
Through correlation we can know this thing that there is association
between these variables

orrelations
employee effectivenes quick employee
empowerment s and service problem trust
cp efficiency quality solving building customer satisfaction
mployee empowerment Pearson
1 .199* .279** .157 .342** .128
Correlation
Sig. (2-tailed) .047 .005 .118 .001 .206
N 100 100 100 100 100 100
fectiveness and Pearson
.199* 1 .328** .173 .611** .423**
ficiency Correlation
Sig. (2-tailed) .047 .001 .085 .000 .000
N 100 100 100 100 100 100
rvice quality Pearson
.279** .328** 1 .633** .336** -.079
Correlation
Sig. (2-tailed) .005 .001 .000 .001 .434
N 100 100 100 100 100 100
uick problem solving Pearson
.157 .173 .633** 1 .228* -.150
Correlation
Sig. (2-tailed) .118 .085 .000 .022 .135
N 100 100 100 100 100 100
mployee trust building Pearson
.342** .611** .336** .228* 1 .415**
Correlation
Sig. (2-tailed) .001 .000 .001 .022 .000
N 100 100 100 100 100 100
stomer satisfaction Pearson
.128 .423** -.079 -.150 .415** 1
Correlation
Sig. (2-tailed) .206 .000 .434 .135 .000
N 100 100 100 100 100 100
Correlation is significant at the 0.05 level (2-tailed).
. Correlation is significant at the 0.01 level (2-tailed).
This above Table is showing the correlation between independent and

dependent variables. Independent variable (employee empowerment)
and dependent variables are effectiveness and efficiency, service
quality, quick problem solving, employee trust building and customer
satisfaction. Values are less than 0.05 or equal to 0.05; from the graph
it is clear that there is association between independent and
dependent variables
Considering all values in the table it is argued that there seems not is
negative correlation between any of the variables. However this
discussion and analyses valuable insight to the managers in order to
improve the quality of the services they provide to the customers to
satisfy them.

3.8 Conclusion
This study suggest that when employee empowerment is properly

established and implemented then organization will must grow
because all the employees will be satisfied. Employee empowerment
affects a lot on the organizational activities regarding its growth
because if the people will be satisfied, then automatically they fulfill
the requirements of the organization as well as customers then cost
will reduce and organization must grow. All the study has prove the
fact there is directly and indirectly relationship is present between
these variables and these variables affected by the on the employee
empowerment. The independent variable is employee empowerment
and dependent variables are all very important in the customer
satisfaction because by the missing of any one factor there is chance
the whole employee empowerment practices will be affected by these
factors. There are no doubt others factors also affect on the employee
empowerment but these are main and require more attention.

CHAPTER # 5
OVERALL
CONCLUSION

Overall thesis conclusion

5.1 Introduction
In this chapter, the authors’ would present the conclusions and

recommendations based on the research, to affirm whether or not the
purpose of the research has been fulfilled, and how the findings
deviates or resonates with the frame of reference of the paper, and the
conceptual framework used.
5.2 Conclusion
Empowerment is difficult to establish in an organization due to the
ambiguous feelings of Management and employees about the
implementation of the concept. Many organizations will have “top
down” management as well as empowerment initiatives, which must
be managed in because of their inconsistencies. The more that top
management wants an internal commitment from its employees, the
more it must involve employees in defining work objectives, specifying
how to achieve them and setting stretch targets.
The purpose of this research thesis is to determine the extent to which
the banking sector of Pakistan practice employee empowerment, and
how it impacts on customer satisfaction, has in the authors’ opinion
been fulfilled.
From the analysis the authors’ found out that empowerment motivates
the employees to greater service, and creates a greater sense of
accomplishment or satisfaction in their jobs; by reducing dependency,
irresponsibility and encouraging team work which overall leads to
achieving organizational goals and objectives.
The authors’ have also observed a relationship between employee
empowerment and customer satisfaction. The organizational structure
and the HRM practices empower the employees, who subsequently,
influence the service quality perception by customers positively, and
bring about customer satisfaction.
This free flow of information back and forth accounts for the
employees’ ability to take responsibility, and display confidence during
interactions with the customers.
In the authors’ opinion, the empowerment of employees enables the
employees to own the job, exert freedom while controlling the service

process, and individually respond to customer needs in an excellent
fashion. In addition, it enables employees to influence customers’
perception which leads to their customers’ satisfaction.
The authors’ have arrived at a conclusion that employee
empowerment impacts positively on customer satisfaction.
5.3 Recommendation
Based on the research, the authors’ recommend that the banks,
continue to promote teamwork amongst the employees, so that every
staff would work towards a common vision to achieve the objectives of
the bank.
The authors recommend that, the organization practices of banks
regarding employee empowerment, and their customer focused
activities which are part of the main reasons for higher rating in the
banking sector as shown by the (BIP), should be continued in the
banks.

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expanded Sourcebook, Sage Publications, Thousand Oaks.
Phillip Kotler, Kevin Keller, (2006) “Marketing management”, Pearson
education, prentice hall, 12th edition.
Robert K. Yin,(1994). “Case study research: Design and methods”,
United States of America: Sage publications, 2nd edition.
Robert K. Yin, (2003). “Case study research: Design and methods”,
United States of America, Sage publications, 3rd edition.
Journal Articles:
Carol Yeh-Yun Lin, (2002) “Empowerment in the Service industry”, an
empirical study in Taiwan, Journal of Psychology, 136(5), 555-560
G. S Sureshchander, Chandrasekharan R, N. Anantharaman, (2002)
“Determinants of customer perceived service quality, a confirmatory
factor analysis approach”. Journal of services marketing, 1(16) 9-34
Henry J. Coleman Jr,(1996). “Why employee empowerment is not just a
fad”, Leadership & Organization, 17(4)29–36.
Linda Honold, (1997), “A review of the literature on employee
empowerment, “Empowerment in organizations, 5(4)202-212.
Mark Durkin, Hardin Bennett, (1999). “Employee commitment in retail
banking, identifying and exploring hidden dangers”, International Journal
of bank marketing, Development Journal. 17(3)124-134.

Roy C. Herrenkohl, G. Thomas Judson, Judith A. Heffner, (1999).
“Defining and Measuring Employee Empowerment”, Journal of Applied
Behavioral Science,(35)373.
Yeshiva, Baruch, (2001) “Applying empowerment organizational model”,
Career Development International. 3(2) 82–87.
Articles:
Chu, K.F. (2003). “An Organizational Culture and the Empowerment for
Change in SMESs in the Hong Kong Manufacturing Industry”, Journal of
Materials Processing Technology, 139(1), 505 -509.
Elms, M.B. ; Strong, D.M. & Cook-off, O. (2005). Panoptic
Empowerment and Reflective Conformity in Enterprise Systems-Enabled
Organizations. Information and Organization.
Emote, D. (1997) “Self-managed Word Teams Approach: Creative
Management Tool or a fad” Management Decision, 35(3), 233- 239.
Ronald, L. (1997), “A Review of the Literature on Employee
Empowerment”, Empowerment in Organizations, 5(4), 202- 212.
Jowl, H.J., Kristiansen K., Dahlgaard, J.J. & Kanji, G.K. (1997).
“Empowerment and Organizational Structure”, Total Quality Management.
.
Karma, A, Farklı Olan Kazanır, Baskı İstanbul, Sistem Yayınları,
(2005), S. 6.
Kırım, A. (2007), “Ermines Amade İnnovasyon Türleri”,Erişim tarihi:
31.07.2007
King, A.S. & Gerhardt, B.J, (1997) “Empowerment the Workplace: A
Commitment Cohesion Exercise”, Empowerment in Organizations, 5(3),
139 -150.
Koçel, T. (2003). İşletme Yöneticiliği. 9. Baskı. İstanbul: Beta Yayınları.
Matthews, R.A..; Diaz, W.M. & Cole, S.G. (2003). The Organizational
Empowerment Scale. Personnel Review, 32(3), 297 -318.
Nicoya, N.; Simonton, J.L.; Mielsen, W.R. & Welling, B. (1994),
“Employee Empowerment, Empowerment in Organizations”, 2(3), 45- 55.
Pearson C.A.L & Chatterjee, S.R (1996), “Implementing Empowerment
Through Subunit Clusters: a Western Australian Case
Study”,Empowerment in Organizations, 4(3),16- 25.
Prybuto, V.R. & Kappelman, L.A. (1995), “Early Empowerment Creates
Productive Outcomes During an Organizational Transformation”, Work
Study, 44(7), 15-18.
Robbins, T.L.; Crino, M.D & Frendal, L.D. (2002), “An Integrative
Model of the Empowerment process”,Human Resource Management
Review, 12(3), 419- 443.

Smith, A.C. & Mouly, V.S. (1998)”Empowerment in New Zealand Firms,
Insights From two Cases”, Empowerment in Organizations, 5(4), 69- 80.
Ugboro, I.O. & Oberg, K. (2000). “Top Management Leadership,
Employee Empowerment, Job satisfaction, and Customer Satisfaction in
TQM Organizations, an empirical study”, Journal of Quality Management,
5(2), 247- 272.
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Review, 27(1), 40- 56
Internet Sources
http://www.lansforsakringar.se/privat/om_oss/in_english/Sidor/default.aspx
http://www.siq.se/Home.htm
http://www.siq.se/2007arsmottagare2.htm
http://www.shilpabichitra.com/Shilpa2000/indart4.htm
http://www.indianmba.com/Faculty_Column/FC781/fc781.html,
http://www.fedtraining.com.tr

Questionnaire

Impact of employee empowerment on
customer satisfaction
Dear Participant,
This survey is aimed is for the research purpose. Its results will be used
for analysis in Master Thesis. It would not take more than 05 minutes
to fill out this survey. It is ensured that all the information provided in
this survey will be kept confidential and anonymous and will be used
only to improve the quality of such events in future. Your cooperation
in this regard will be highly appreciated.
Thank you for your participation.
Name ___________ Designation___________
Gender___________
Organization
Age:
Less than 25  25 – 35 35 – 45  45
Years Years. Years. Years
plus.
Disagree
Please select the response which best
Strongly
Agree
Neutral
Strongly
represents the level of agreement that
your organization have with following
statements
agree
Disagree
1 You satisfied working in this bank.

Employee empowerment
2 You consider working elsewhere with better
conditions.
3 Senior management is accessible for you as an

employee.
4 This approach enables the Bank to compete with its

competitors in the Market.

5 You have a regulated routine at work or do you
organize your job to best Suits you.
Effectiveness & efficiency

6 The amount of work I am expected to do on my job is
reasonable.
Strongly
Agree
Disagree
Neutral
Strongly
statements
agree
Disagree
7 I am satisfied with the productivity and efficiency of
my department.
8 The Management believes that employee
performance is directly related to employee
Empowerment.
9 My department responds promptly to client requests,

despite a busy workload.
1 I have enough involvement in decisions that affect

0 my work.
1 The customers have to wait long time before

1 speaking to a representative.
Quality service
1 You allowed making decisions regarding customer

2 service.
1 My work group consistently provides courteous
3 service even when the client is unreasonable.
1 This empowering the employees contributes to

4 quality service delivery.
1 Bank provides excellent services to the customers.

5
1 Overall, you satisfied with the quality of the client
6 service provided by your department.
1 Your most recent customer service experience, did
7 you contact the Customers by using modern

means (telephone, mail, personally) of Interaction.
Quick problem solving

1 Employees of [DEPARTMENT] listen attentively to
8 identify and understand client concerns.
1 You ever had complaining customers, who feel they

9 deserve better.
2 Sufficient information is available on the internet to

0 solve customer’s problems.
2 The representative quickly identifies the problem.

1
Trust building
2 You rewarded for delivering excellent services
2 besides your monthly salary.
Agree
Disagree
Strongly
Neutral
Strongly
statements
agree
Disagree
2 This is the job in which I feel a sense of
5 accomplishment.
2 I have the support and authority to make the
6 decisions necessary for accomplishing assigned task.
Customer satisfaction
2 In your opinion, customer satisfaction is most
7 important for any baking institution.
2 Your organization has managers/staff dedicated to

8 customer satisfaction matters.
2 Your organization conduct surveys to evaluate
9 customer satisfaction.
3 Different means (questionnaire, interview,
0 discussions) are used to evaluate customer
satisfaction.

3 Your organization initiated programs to improve
1 customer satisfaction within the past year.

Thesis On Emp Oyee Empowerment and Customer

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Employee empowerment & customer satisfaction 2010

Mussarrat Bashir (Roll # 9112)

Submitted to the Superior University, Lahore

MASTER IN BUSINESS ADMINISTRATION

Superior University Lahore Page 1

The aim of this study is to better understanding of empowerment in

Superior University Lahore Page 2

I would like to express my sincere thanks and appreciation to all those

Superior University Lahore Page 3

We are dedicating our work to our parents and respected teacher

Superior University Lahore Page 4

(Lord Pethick Lawrence)

3. Significance of the study 18

4. Objectives and Hypothesis

4.1 Main research Questions 21

5.1 Theoretical stances 22

6. Structure of the Thesis

Superior University Lahore Page 5

9. Analysis and results

10. Thesis conclusion

Superior University Lahore Page 6

Figure 1: The structure of the report (own diagram)

Superior University Lahore Page 7

EE: ( employee empowerment)

Superior University Lahore Page 8

Table 1: Descriptive statistics

Superior University Lahore Page 9

The aim of this study is to better understanding of empowerment in

Superior University Lahore Page 10

Figure 1: The structure of the Report

Analyses and results

Superior University Lahore Page 11

Superior University Lahore Page 12

(R Maxwell, 2005) Employees in a service organization and particularly,

(James, 2005)As we move ahead in today's fast paced business

Superior University Lahore Page 13

Empowering employees is a top-down change that must begin with

Empowerment is about power and enhancing. Important Perspectives

Considering that, a satisfied customer and employee are of important

Superior University Lahore Page 14

“Enabling the promise” “Making the

Employees Interactive marketing Customers

“Delivering the promise”

Figure 2: service – profit chain

Source: Kotler and Armstrong 2001

As shown in figure service marketing will need to consider internal

This according to (Baruch, 1998), forces organizations to re-think their

(Shevlin, 2004) If having satisfied customers was all it took to grow,

(Grönroos, 2001)In banking organizations, the general offering in a

Superior University Lahore Page 15

(K Sen., 2008)The nature of services as being intangible,

(Hewitt, 2005) “Accounting for People”, the UK Trade and Industry

According to (Looy, 2003) with reference to the specific nature of

Superior University Lahore Page 16

Customers of a bank rely on the services delivered to them by the

When service interactions are not properly controlled and handled, or

1.2 Purpose statement

In matters concerning financial commitments, investments and

Superior University Lahore Page 17

The authors hope to achieve this by collecting information regarding

This study will evaluate the usefulness and effectiveness of employee

Employers can understand the causes of dissatisfied employees and