Role of Employee Engagement in Work Outcomes: A Comparative Study on Public Vis-à-Vis Private Banks

Richa Aishwarya Jogi¹, Dr. A.K. Srivastava²*

¹Research Scholar, Dr. C.V. Raman University, Kargi Road, Kota, Bilaspur

²Professor and Director, Institute of Management, Pt. Rravishankar Shukla University, Raipur

*Corresponding Author E-mail: ashish_1k@rediffmail.com

ABSTRACT:

The banking sector has been emphasising the focus on Employee Engagement concerns as the competition has emerged with entry of private banks in the industry in terms of services, returns, facilities, working hours, technology etc. during the recent few years. The environmental change has not only been caused a change in the consumer behaviour but also the employee behaviour as well. While Employee Engagement is determined by individual and organisational factors, it determines the work outcomes.

The paper aims at conducting a study on the outcomes of Employee Engagement at the banks of public sector in comparison to private sector. The study is expected to contribute to the human resource policy makers of bank organisations so that the work outcomes of the employees’ effort may be enhanced.

KEYWORDS: Employee Engagement, Job Satisfaction, Organisational Commitment, Organisation Citizenship Behaviour, Banking Sector.

INTRODUCTION:

Employee engagement is rightly viewed as a key aspect of productivity. It makes sense that the enthusiasm and interest that fully engaged employees bring to their work each day would be directly tied to both - more unified workplace culture and the extra efforts, better ideas and innovations that make organizations thrive. Many organizations have limited their hiring in recent years due to a slow economic recovery and uncertain economic conditions, making employee engagement even more important as staff try to do more with less. With this in mind, understanding the cultural, management and other factors that influence employee engagement has become a central part of HR’s strategic role.

The importance of employee engagement is clear when looking at the differences in performance between work teams with high and low levels of employee engagement. Gallup (2013) finds that employee engagement program is powerful evidence of the impact of employee engagement on the bottom line. The State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders report finds that “engaged workers are the lifeblood of their organizations.” This is more evident in the case of banking industry.

Indian banking system has emerged as a vibrant sector in the Indian economy. Strong regulatory mechanism, inherent strength in the economy, and progressive policy framework which supports, nurtures, and helps in growing the financial institutions. There has been amazing growth in profits in our banking industry over the last two decades. The banking sector index has grown at a compounded annual rate of 51% since the year 2001 (Anjum and Tiwari, 2012).

By 2013 the Indian Banking Industry employed 1,175,149 employees and had a total of 109,811 branches in India and 171 branches abroad and manages an aggregate deposit of 67504.54 billion (US$1.1 trillion or €840 billion) and bank credit of 52604.59 billion (US$830 billion or €650 billion). The net profit of the banks operating in India was 1027.51 billion (US$16 billion or €13 billion) against a turnover of 9148.59 billion (US$140 billion or €110 billion) for the financial year 2012-13 (Reserve Bank of India).

The banking sector in India is on a growing trend. It has vastly benefitted from the surge in disposable income of individuals in the country. There has also been a noticeable upsurge in transactions through ATMs, and also internet and mobile banking. Consequently, the different banks, via public, private and foreign banks have invested considerably to increase their banking network and thus, their customer reach. The banking industry in India has the potential to become the fifth largest banking industry in the world by 2020 and third largest by 2025 according to a KPMGCII report. Over the next decade, the banking sector is projected to create up to two million new jobs, driven by the efforts of the RBI and the Government of India to integrate financial services into rural areas. Also, the traditional way of operations will slowly give way to modern technology.

Chhattisgarh Banking and Finance plays a significant role in the overall progress of the economy of the state. Banking sector of the sate involves a wide gamut of operational transactions such as cash withdraw and deposit various types of loans, acceptance and encashment of cheques, among many others. The government of Chhattisgarh has its own department of finance which deals with a number of nonbanking activities too. From regular appraisal of receipt and expenditure to declaration of state budget, the finance department of Chhattisgarh also looks into the pension related issues of the people of the state. Another important service provided by the department is the issue of circulars regarding various amendments and new improvements in the financial sector of the state. This helps in keeping the concerned sectors updated about the latest happenings in the banking industry (Chhattisgarh Economy).

This brief industry scenario suggests that there is enormous prospect in banking industry and so there is an urgent need to work upon important concern like Employee Engagement.

LITERATURE REVIEW:

Employee engagement is the level to which employees feel motivated and involved in their workplace. Job responsibilities, work relationships and growth opportunities are among primary internal factors affecting engagement. External factors include competing career opportunities, along with family and social obligations (Kokemuller, 2010).

Employee Engagement is the extent to which employees put discretionary effort into their work, in the form of extra time, brain power and energy. The cognitive aspect of employee engagement concerns employees' beliefs about the organization, its leaders and working conditions. The emotional aspect concern show employees feel about each of those three factors and whether they have positive or negative attitudes toward the organization and its leaders. The physical aspect of employee engagement concerns the physical energies exerted by individuals to accomplish their roles. Thus, engagement means to be psychologically as well as physically present when occupying and performing an organizational role (Kahn, 1990). Engaged employees are those who are totally absorbed in their work, working longer and harder, taking on additional assignments and all focused on the needs of the organisation (Ruyle, Eichingerand De Meuse, 2009).

Employee engagement is a relatively new concept in the academic community but has been heavily promoted by consulting companies (Wefaldand Downey 2009). Scholars and practitioners in the HRM field tend to agree that the fundamental concept of engagement may help explain behaviour at work, but they present different definitions of it.

Much research had noted that there is a need for clarification and communication of organizational goals and objectives among all employees. Supporting this view, CIPD (2006) survey reported that the two most significant driver of employee engagement are having opportunities to have their voice held and feeling well informed about what is going on in the organization. Communication also encompasses that employee receives feedback about their performance.

Wellins and Concelman (2005) noted that organizations can enhance engagement in their workforce by creating a learning culture and creating individual development plans for every employee. Many studies had shown that most employees want to keep their jobs inventive and interesting by acquiring new knowledge and skills and applying new approaches in their daily work life.

Working in a lean organization with highly talented and co-operative co-employees has been conceptualized as an essential requirement for high level of employee engagement. If the entire organization works together by helping each other learn new approach and better ways of accomplishing task, a higher productivity is expected.

There is some practical research reporting the relation between employee engagement and work outcomes. According to Saks (2006) engagement had shown to be negatively associated to employee intentions to quit while positively related to organizational commitment. Harter et al., (2002) further defined employee engagement as “the individual’s involvement and satisfaction as well as enthusiasm for work”. Employee engagement is therefore the level of satisfaction, commitment and involvement an employee has towards his or her organization and its values.

RESEARCH QUESTION:

Do the variables Job Satisfaction, Organisational Commitment and Organisation Citizenship Behaviour are found different in public and private sector banks?

Hypothesis:

H₁: Employee Job Satisfaction at public sector banks is significantly different from that in private sector banks;

H₂: Employee Organisational Commitment at public sector banks is significantly different from that in private sector banks; and

H₃: Employee Organisational Citizenship Behaviour at public sector banks is significantly different from that in private sector banks.

FRAMEWORK OF THE STUDY:

Conceptual Framework

The study has been conducted on causal comparative model. The Work Outcomes of Employee Engagement have been taken to be Employee Job Satisfaction, Employee Organisational Commitment and Employee Organisation Citizenship Behaviour.

Test 1: Test of Normality

Table 1
Tests of Normality
	Kolmogorov-Smirnov			Shapiro-Wilk
	Statistic	df	Sig.	Statistic	df	Sig.
X₁	0.198	290	0.000	0.902	290	0.000
X₂	0.234	290	0.000	0.854	290	0.000
X₃	0.187	290	0.000	0.899	290	0.000
a. Lilliefors Significance Correction

Interpretation: There is a significant difference between Public and Private Bank employees’ Organisation Citizenship Behaviour between Public Sector and Private Sector Banks.

INTERPRETATION AND DISCUSSION:

The analysis has been conducted through Non-Parametric Test using Mann Whitney Test as the data is not normally distributed (Table 1) and the model is causal comparative. The significance values of X₁, X₂ and X₃ are less than 0.05 (Table 2, Table 3 and Table 4). Hence all the three research hypotheses H₁, H₂ and H₃ are accepted at 5% level of significance.

This finding supports the assumption of the research that Employee Job Satisfaction at public sector banks is significantly different from that in private sector banks. The finding also supports the assumption of the research that Employee Organisational Commitment at public sector banks is significantly different from that in private sector banks. Furthermore, the finding also supports the assumption of the research that Employee Organisational Citizenship Behaviour at public sector banks is significantly different from that in private sector banks.

This implies that the Employee Engagement determines three important Work Outcomes Employee Job Satisfaction, Employee Organisational Commitment and Employee Organisation Citizenship Behaviour which are found different in Public and Private Sector Banks. While Employee Job Satisfaction and Employee Organisation Citizenship Behaviour are better in Private Sector Banks (Mean Rankof Private Sector Bank 166.91, 174.51and Public Sector Bank 125.52, 118.42 (Table 2 and Table 4)), Employee Organisational Commitment is better in Public Sector Banks (Mean Rank of Public Sector Bank 204.62 and Private Sector Bank 82.15 (Table 3)).

CONCLUSION:

The study has been conducted on selected public and private sector banks in central Chhattisgarh. Three important Work Outcomes Employee Job Satisfaction, Employee Organisational Commitment and Employee Organisation Citizenship Behaviour which are found different in Public and Private Sector Banks. Employee Job Satisfaction and Employee Organisation Citizenship Behaviour are better in Private Sector Banks than in Public Sector Banks. The HR policy makers of Public Sector Banks are advised to improve these two dimensions which affect the employee performances, retention and other outcomes in the future. On the other hand the HR Policy Makers of Public Sector Banks are advised to look forth for Employee organisational Commitment. Since these work outcomes are determined by Employee Engagement, a suitable policy should be developed for Employee Engagement.

REFERENCES:

1. Anjum, Dr. Bimal and Tiwari, Rajesh, ‘Role of Private Sector Banks for Financial Inclusion’, ZENITH, International Journal of Multidisciplinary Research Vol.2 Issue 1, January 2012, ISSN 2231 5780, pp 270.

2. Chhattisgarh Economy, accessed from ‘http://www.mapsofindia.com/chhattisgarh/economy’

3. CIPD (Chartered Institute of Personnel and Development), 2006, ‘Reflections on Employee Engagement: Change Agenda’ London.

4. Gallup. (2013). State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders. Retrieved from http://www.gallup. com/strategicconsulting/163007/state-american-workplace.aspx.

5. Harter, J.K., F.L. Schmidt and T.L. Hayes, (2002) ‘Business-Unit-Level Relationship between Employee Satisfaction, Employee Engagement and Business Outcomes: A Meta-Analysis. J. Applied Psychol., 87: 268-279.

6. Kahn, W.A (1990). Psycological conditions of personal engagement and disengagement at work. The Academy of Management Journal, 33(4), 692-724.

7. Kokemuller, Neil ‘Internal and External Factors Affecting Employee Engagement, Demand Media, 2010.

8. Reserve Bank of India, "Statistical Tables Related to Banks in India" accessed from ‘http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/0STR191113FL.pdf’.

9. Ruyle, K. E., Eichinger, R. W., and De Meuse, K. P. (2009). FYI for talent engagement: Drivers of best practice for managers and business leaders. Minneapolis, MN: Korn/Ferry International.

10. Saks, A.M., 2006. Antecedents and consequences of employee engagement. J. Managerial Psychol., 21: 600-619.

11. Wefald, A. J. and Downey, R. G. 2009. Job engagement in organizations: fad, fashion, or folderol? Journal of Organizational Behavior, 30(1), 141-145.

12. Wellins, R. and Concelman, J. (2005) ‘Creating a Culture for Engagement’, Workforce Performance Solutions, 141 – 143.

Received on 28.02.2015 Modified on 15.04.2015

Asian J. Management; 6(2): April-June, 2015 page 135-140

DOI: 10.5958/2321-5763.2015.00020.7

Research Plan		Sample Plan
Research Design	Causal Comparative	Sampling Design	Stratified Random Sampling
Instrument	Structured Questionnaire	Sample Size	300
Scale	7 – Points Likert’s Scale	Location	Central Chhattisgarh
Data Source	Primary

Table 2 (X₁)
Ranks
Model 1	Bank Type	N	Mean Rank	Sum of Ranks
X₁₁-X₂₁	Public Bank	150	125.52	18827.50
	Private Bank	140	166.91	23367.50
	Total	290
Test Statistics
Mann-Whitney U				7502.500
Z				-4.375
Sig. (2-tailed)				0.000

Table 3 (X₂)
Ranks
Model 2	Bank Type	N	Mean Rank		Sum of Ranks
X₁₂-X₂₂	Public Bank	150	204.62		30693.50
	Private Bank	140	82.15		11501.50
	Total	290
Test Statistics
Mann-Whitney U				1631.500
Z				-12.900
Sig. (2-tailed)				0.000

Table 4
Ranks (X₃)
Model 3	Bank Type	N	Mean Rank	Sum of Ranks
X₁₃-X₂₃	Public Bank	150	118.42	17763.50
	Private Bank	140	174.51	24431.50
	Total	290
Test Statistics
Mann-Whitney U			6438.500
Z			-5.898
Sig. (2-tailed)			0.000