Satisfied Employees for Successful Banking Business

The banking sector plays an increasingly important role in the economy of a country. It is considered as a catalyst for the development of economy. Efficient and stable financial sector is prerequisite for sustainable economic development. Without efficient and stable financial sector economic development is nothing more than day dreaming.

Banks create credit, by nature they are profit oriented organizations; thus customer satisfaction is the most dominating issue for the success and survival of the banks. In today’s global competitive environment maintaining standard customer satisfaction level is really a tough job. Due to difficulty in product differentiation the task becomes more challenging for the service industry like banking. After the transformational growth of banking sector in Nepal since the establishment of JVs. Situation of throat cut competition is in the market place, which has pressurized the bank management doing something to maintain the satisfaction level of customers’. Till date there are altogether 195 banks and financial organizations including 29 commercial banks in operation. It’s a big number for a narrow market of us. Business opportunities are less; most of the lending is on unproductive sectors like real estate and other consumer typed products. At one side banks are operating in highly competitive environment and at other; consumers are becoming highly demanding. Sharp pace of globalization, education level as well as proximity in international issues has increased the awareness level of the customers. Consumers are well informed about their rights. In this situation maintaining customer’s satisfaction level is not so easy to accomplish.

Customers of modern time seek increasingly higher level of service quality as well as respect and value. For other service companies too (not only for banks), staying competitive in the new market environment means not only offering products at reasonable prices but also tailoring these products to meet individual customers’ needs. Some Banks have moved quickly to take advantage of this market shift. For success they constantly increased the service quality. High quality service increases the rate of customer retention, helps to attract new customers, increase productivity, expands the market share, reduces operating cost as well as increases employee morale. For the higher level of service quality, these banks have trained and empowered employees directly involved in service delivery to undertake a broad range of tasks. They have given priority minimizing employee turnover on the theory that; employees with long tenure better understand both a firm’s customers and its internal work processes and so are better able to meet individual client’s needs. But most have been slow to redesign work practices. They continue to rely on an “industrial model” of service delivery. They have organized work so as to tolerate low skills and short employment tenures and continue to concentrate on cutting costs rather than adding value.

By thinking mainly about pricing, most bank management has invested minimally in their employees. They have not taken training and development as a strong tool for maintaining skilled manpower which in turn establish a cool customer relation enhancing the customer satisfaction level. Though the current monetary policy has suggested investing minimum 3% of employee expenses compulsorily in training and development of the employees. Downward pressure on wages, minimal training expenditures, and heavy use of short time workers (interns/trainees) have reduced personnel costs and maintained management’s flexibility to cut the work-force when demand slackens. But this will have chances to hamper the service quality with different dimensions in long run.

Firms’ failure to compete on quality, have focused on managerial decision making. Unwarranted faith in the powers of information technology, a commitment to scientific management, and historical antipathies between management and employees are all said to have discouraged management from designing their competitive strategies around high-skill and high-quality organizations. In this view, reorienting business strategies to take advantage of customers’ new quality consciousness is assumed to be primarily a function of changing managerial attitudes. Once bank management understands the importance of customization to their competitive success, they will simply rewrite their human resource policies and practices which will benefit the entire industry. This will help sustainable development of banks in Nepal. For this the bank management should have the motto – Satisfied employees leads to satisfied customers.

Satisfied employees help to produce satisfied customers. Satisfied employees are likely to assist customers with a more pleasant demeanor and a higher level of customer service. This creates a more satisfying customer experience, increases customer loyalty, and ultimately drives increased profitability. Conversely, low employee satisfaction and overall low employee morale can negatively affect bank’s operations greatly, causing dissatisfied customers and hurt profitability. Any service business, including bank business, needs to focus efforts on frontline service staff – those employees that have direct, daily contact with customers. The connection between front-line employees and customers should be at the center of management attention. Management needs to take into consideration the additional factors that yield profitability at every level in the organization, including: investment in good, quality workers; technology that supports front-line employees; concrete recruiting and training practices; and compensation linked to employee performance.

When we provide employees with the tools and skills they need, employee satisfaction rises as does the ability to service customers better. Employee satisfaction raises employee productivity, and higher productivity means greater service and value to your customers. This value leads to increased customer satisfaction and loyalty, which promotes profitability and success in continuous manner.

There is a growing number of organizations that place employees and customers at the forefront of the business. These organizations understand that satisfied employees are more likely to go the extra mile to service a customer. If employees feel appreciated and valued, they will likely be more pleasant and show a greater willingness to assist each customer and ensure each customer interaction is handled in accordance with the high standards set forth by the organization.For strengthening the employees’ satisfaction the banks should modify its HR policy considering employee satisfaction rather management’s ease. There should be higher chances to grow together with win-win situation, both management and employees. Management can use these three strategies to broaden employee’s chances to grow without quitting their jobs this will help maintaining employee satisfaction level. In turn organization will be benefitted from lesser employee’s turnover.

Competence-Based Career Ladders

The management should broaden front-line employees’ responsibilities and improve their opportunities and incentives for learning skills. Banks with a transaction-oriented strategy have assumed low skills and high turnover as a given and sought to build service strategies around narrow jobs filled by interchangeable employees.

Modularized Training for High-Skill Positions

The management should create modularized training for high-skill positions. If the problem for lowerlevel bank employees has been too little training and career development, the reverse has been the case for graduate training programs, which often require heavy up-front investment and lengthy, unproductive classroom time. In an environment with high levels of poaching, this type of training program is generally not cost effective because new recruits become easy prey for competitors.

Priority on Internal Promotion

A third strong strategy will be shift toward more internal promotion. As a natural response to the difficulties they have experienced retaining their own trainees, most banks have relied heavily on external recruiting for highskill positions, an imperfect solution. Existing employees see their chances for upward mobility blocked and look to the outside labor market for opportunities.

Conclusion

Satisfied employees lead to satisfied customers. The management should change its HR policy considering the customer’s satisfactions rather ease of it. Satisfied employees are the most valuable jewels in every organization. They are essential elements of survival and success of business. For increasing employee’s satisfaction level the management can do lots of things beside mentioned above. The management should care its employee’s quality of life at work, should avoid micro-management, recognize and praise good work; positively challenge employees etc. are some examples of them. This will increase employee’s productivity as well as competency of them. Studies have shown happy employee’s take 66% less sick leave and are good for team work.

References

B. Pine, D. Peppers, and M. Rogers, “Do You Want to Keep Your Customers Forever?,” Harvard Business Review, volume 73, March–April 1995, pp. 103– 114.

N. Venkatraman, “IT-Embedded Business Transformation: From Automation to Business Scope Redefinition,” Sloan Management Review, volume 35, Winter 1994, pp. 76–77.

Journals of Brent Keltner and David Finegold

Other sites and numerous books