The Potential and Impact of Perceived Internal Service...

The Potential and Impact of Perceived Internal Service Quality in Business Process of Pakistani

Banks and its Relations to Organizational Performance

By:

Muhammad Asif Khan

NATIONAL UNIVERSITY OF MODERN LANGUAGES, ISLAMABAD

June, 2009.

The Potential and Impact of Perceived Internal Service Quality in Business Process of Pakistani Banks and its Relations to

Organizational Performance

By:

Muhammad Asif Khan

MBA. (University of Arid Agriculture, Rawalpindi)

A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE DEGREE OF

DOCTOR OF PHILOSOPHY

IN HUMAN RESOURCE DEVELOPMENT

TO

FACULTY OF ADVANCED INTEGRATED STUDIES AND RESEARCH


June, 2009.

©Muhammad Asif Khan, 2009.

I


FACULTIY OF ADVANCED INTEGRATED STUDIES AND RESEARCH

DISSERTATION AND DEFENCE APPROVAL FORM

The undersigned certified that they have read the following thesis, examined the defence, are satisfied with the overall exam performance, and recommend the thesis to the faculty of Advance Integrated Studies & Research for acceptance: Thesis/Dissertation Title: The Potential and Impact of Perceived Internal Service Quality in Business Process of Pakistani Banks and its relations to Organizational Performance. Submitted by : Muhammad Asif Khan Registration # 208-Ph.D/HRD/2004(Jan). Name of the student

Doctor of Philosophy Name of the Degree Human Resource Development Name of Discipline __________________________ Prof. Dr. Kashif-ur-Rehman Signature of the Research supervisor Name of the Research Supervisor ___________________________ Prof. Dr. Shazra Munnawer Signature of the Dean (FAIS&R) Name of the Dean (FAIS&R) ___________________________ Brig ®. Dr. Aziz Ahmad Khan Signature of the Rector Name of the Rector ___________________________ Dated

II

CANDIDATE DECLARATON FORM I Muhammad Asif Khan .

Son of Muhammad Yaqoob .

Registration # 208-Ph.D/HRD/2004 (Jan)) .

Discipline Human Resource Development .

Candidate of Doctor of Philosophy (Ph.D) . at the National University

of Modern Languages, Islamabad, Pakistan do hereby declare that the dissertation : The

Potential and Impact of Perceived Internal Service Quality in Business Process of

Pakistani Banks and its Relations to Organizational Performance submitted by me in

partial fulfillment of the Ph.D Degree in the Discipline of Human Resource Development

is my original work, and it has not been submitted or published earlier. I also solemnly

declare that it shall not, in future, be submitted by me for obtaining any other degree from

this or any other university or institution.

I also understand that if an evidence of plagiarism is found in my dissertation at

any stage, even after the award of the Degree, the work may be cancelled and the Degree

revoked.

_________________________ Signature Muhammad Asif Khan Name of the Scholar Dated _________________________

III

ABSTRACT

During the last one and a half decades the financial and banking sector in Pakistan

has observed a substantial transformation from a sluggish government subjugated sector

to a more receptive and competitive one. Today, many financial services, especially the

Banks are organizing themselves to become customer centered. In the modern and

competitive era the internal services quality is getting more importance in all areas of

service industry like banking sector and it has received an ever-increasing interest among

the scholars and practitioners especially during the ongoing decade. The purpose of this

study was to establish a framework for the internal service quality considering the basic

dimensions of the human resources management and the impact of the organizational

performance.

The data were collected through a cross-sectional field study of the frontline

employees and management of both the public and the privatized commercial banks

located in Rawalpindi/Islamabad, Pakistan (N=450, the response rate was 88 %). A

particular banking sector was selected because of the perceived poor human resources

management climate and the high running amounts of deficiency in the organizational

performance.

The internal services quality in the banking sector is found to relate positively to

the organizational performance, with partial mediation by the employees’ selection,

training and development, rewards and recognition, work design and job definitions . The

regression analysis shows that two factors, namely the internal services quality and the

IV

employee job satisfaction contribute a great deal to the banks’ performance, but

unexpectedly, the employees’ retention and productivity did not contribute, however.

This study demonstrates the important effects of the internal services quality in

general and HRM in particular on the frontline employees and management in the banks.

The management of both the public and privatized banks should benefit themselves from

noting the links and the like service quality outcome for the organizational performance.

Key Words - Banks, Pakistan, Internal service quality, organizational performance. .

V

TABLE OF CONTENTS

S. No Title Page

i DISSERTATION AND DEFENCE APPROVAL FORM... I ii CANDIDATE DECLARATION FORM ………………..… II iii ABSTRACT………………………………………………... III iv TABLE OF CONTENTS…………………………………... V v LIST OF TABLES…………………………………………. X vi LIST OF FIGURES………………………………………… XIV vii LIST OF ABBRIVIATIONS………………………………. XV viii DEDICATION …………………………………………….. XVI ix ACKNOWLEDGEMENTS..………………………………. XVII CHAPTER 1: Introduction ……………………………………..………..

1.1 Background of the Study ……………………………….….. 1 1.2 Problem Identification ………………………… ………….. 9

1.2.1 Research Questions.………………………………………... 11 1.3 Significance of the Study ………………………………….. 12 1.4 Objective of the Study ……………………………………... 12 1.5 Scope of the Study …………………………………………. 13 1.6 1.7

ISQ Model With Pakistan’s Banking Need……… Definition of Terms ………………………………………...

14 16

1.8 Outline of the Thesis ……………………………………..... 17 CHAPTER 2: Literature Review and Research Model……………………. 18

2.1 Literature Review And Research Model …………………... 18 2.2 Internal Services Quality …………………………………... 23

2.2.1 Employee Selection ………………………………………... 41 2.2.2 Employee Training and Development ……………………... 45 2.2.3 Employee Rewards and Recognitions ……………………... 53 2.2.4 Work Design ………………………………………………. 57 2.2.5 Job Definition ……………………………………………… 61

2.3 Employee Job Satisfaction ………………………………… 62 2.4 Employee Retention ……………………………………….. 67 2.5 Employee Productivity …………………………………….. 71 2.6 Organizational Performance ……………………………….. 77 2.7 Research Model and Hypotheses…………………………... 150 2.8 2.9

Specific Gap found in the literature………………………... Research Model……………………………………………..

154 156

2.10 Research Hypotheses……………………………………….. 162

VI

TABLE OF CONTENTS

S. No Title Page

CHAPTER .3:

Research Design and Methodology ………………………...

163

3.1 Pilot Study …………………………………………………. 163 3.1.1 Reliability Statistics .……………………………………….. 164 3.1.2 Correlation Matrix …………………………………………. 165 3.1.3 Correlation of Matrix of Variables ….……………………... 165 3.1.4 Descriptive Statistics of Questionnaire Items……………… 166

3.2 Main Study ………………………………………………… 170 Purpose of the Study …………………………………….… 170

3.2.1 Sample ……………………………………………………... 171 3.2.2 Measurement ………………………………………………. 172

3.3 Procedures …………………………………………………. 175 3.3.1 Data Collection Procedure...……………………………….. 175 3.3.2 Observations ……………………………………………….. 175 3.3.3 Interviews ………………………………………………….. 175 3.3.4 Personality Administered Questionnaire …………………... 175

3.4 Data Analysis Procedure …………………………………... 176 3.5 Confidence Interval and Level of Significance ……………. 177 CHAPTER .4

Data Analysis, Results and Discussion …………………….

178

Sequential view of the chapter ………………………….…. 178

4.1 Demographics Profile………………………………………. 181

4.1.1 Frequency Distribution With Respect to Age……………… 181 4.1.2 Frequency Distribution With Respect to Gender…………... 183 4.1.3 Frequency Distribution With Respect to Educational Level.. 184 4.1.4 Frequency Distribution With Respect to Bank Type………. 186 4.1.5 Frequency Distribution With Respect to Work Experience... 187

4.2. Independent Sample T- Test of Internal Services Quality Facets………………………………………………………..

189

4.2.1 Independent Sample T- Test of Employees’ Selection With Respect To Gender ………….……………………………...

189

4.2.2 Independent Sample T- Test of Employees’ Training and Development With Respect To Gender ….………………...

191

4.2.3 Independent Sample T- Test of Employees’ Reward and Recognition With Respect To Gender ……………………..

193

4.2.4 Independent Sample T- Test of Work Design With Respect To Gender ………………………………………………….

195

4.2.5 Independent Sample T- Test of Job Definitions With Respect To Gender …………………………………………

197

VII

TABLE OF CONTENTS

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4.3 Analysis of Variance (ANOVA) …………………………... 199

4.3.1 (a) Analysis of Variance for (ANOVA) Employees’ Selection –Age Group ………………………………………………...

199

4.3.1 (b) Descriptive Statistics of Age Group ………………………. 199 4.3.2 (a) Analysis of Variance for (ANOVA) Employees’ Training –

Age Group …………………………………………………. 201

4.3.2 (b) Descriptive Statistics of Age Group ……………………… 201 4.3.3 (a) Analysis of Variance for (ANOVA) Employees’ Reward

and Recognitions –Age Group. ……………………………. 203

4.3.3 (b) Descriptive Statistics of Age Group ………………………. 203 4.3.4 (a) Analysis of Variance for (ANOVA) Work Design –Age

Group ………………………………………………………. 206

4.3.4 (b) Descriptive Statistics of Age Group ………………………. 206 4.3.5 (a) Analysis of Variance for (ANOVA) Job Definition–Age

Group. …………………………………………………….. 209

4.3.5 (b) Descriptive Statistics of Age Group ………………………. 209

4.4 Independent Sample T-Test of Internal Services quality with Educational Level. …………………………………..

211

4.4.1 Independent Sample T-test of Educational Level With Employees’ Selection ………………………………………

211

4.4.2 Independent Sample T-test Of Employee Training With Educational Level ………………………………………….

213

4.4.3 Independent Sample t-Test of Educational Level With Employee Reward and Recognition. ……………………….

215

4.4.4 Independent Sample t-Test of Educational Level With Work Design ………………………………………….……

217

4.4.5 Independent Sample t-Test of Educational Level With Job Definition …………………………………………….…….

219

4.5 Independent Sample T-Test of Internal Services Quality with Bank Type …………………………………………….

221

4.5.1 Independent Sample T-Test of Bank type with Employee Selection ……………………………………………………

221

4.5.2 Independent Sample T-Test of Bank Type With Employees’ Training ……………………………………….

223

4.5.3 Independent Sample T-Test of Bank Type With Employee Reward and Recognition …………………………………..

225

4.5.4 Independent Sample T-Test of Bank Type With Work Design ………………………………………………………

227

4.5.5 Independent Sample T-Test of Bank Type With Job Definition …………………………………………………..

229

VIII

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4.6 Analysis of Variance (ANOVA) …………………………... 231 4.6.1 (a) Analysis of Variance for (ANOVA) Employees’ Selection

– Work Experience Groups ………………………………... 231

4.6.1 (b) Descriptive Statistics of Work Experience Groups ………... 231 4.6.2 (a) Analysis of Variance for (ANOVA) Employees’ Training –

Work Experience Groups ………………………………….. 233

4.6.2 (b) Descriptive Statistics of Work Experience Groups ……….. 233 4.6.3 (a) Analysis of Variance for (ANOVA) Employees’ Reward

and Recognitions – Work Experience Groups …………….. 235

4.6.3 (b) Descriptive Statistics of Work Experience Groups ………. 235 4.6.4 (a) Analysis of Variance for (ANOVA) Work Design – Work

Experience Groups ………………………………………… 237

4.6.4 (b) Descriptive Statistics of Work Experience Groups……….. 237 4.6.5 (a) Analysis of Variance for (ANOVA) Job Definition– Work

Experience Groups ………………………………………… 239

4.6.5 (b) Descriptive Statistics of Work Experience Groups ………... 239 4.7. Regression Analyses ………………………………………. 241

4.7.1 Regression analysis of the Employees’ Job Satisfaction on the Internal Services Quality ……………………………….

241

4.8 Case Wise Regression Analyses …………………………... 243 4.8.1 Regression analysis of the Internal Services Quality on

Employees’ Job Satisfaction ………………………….…… 243

4.8.2 Regression Analysis of the Internal Services Quality on Employees’ Job Satisfaction ……………………………….

247


250


253

4.8.5 Regression Analysis Internal Services Quality on Employees’ Job Satisfaction ……………………………….

255

4.9 Case wise regression analyses of employee retention on employee job satisfaction ………………………………….

258

4.9.1 Regression Analysis of the Employees’ Job Satisfaction on the Employees’ Retention …………………………………

258

4.9.2 Regression Analyses of the Employees’ Job Satisfaction on the Employees’ Retention …………………………………

259

4.9.3 Regression Analysis of the Employees’ Job Satisfaction on the Employees’ Retention ………………………………….

261

4.9.4 Regression Analysis of the Employees’ Job Satisfaction on the Employees’ Retention ……………………………….…

265

4.9.5 Regression Analyses of the Employees’ Job Satisfaction on the Employees’ Retention ………………………………….

267

IX

TABLE OF CONTENTS

S. No Title Page

4.9.6 Regression Analysis of the Employees’ Job Satisfaction on the Employees’ Retention ………………………………….

269

4.10.

Case wise Regression Analyses of Employee Satisfaction on Employee Productivity …………………………………

272

4.10.1 Regression Analysis of the employees’ Job Satisfaction on the Employees’ Productivity ……………………………….

272

4.10.2 Regression Analysis of the Employees’ Job Satisfaction on the Employees’ Productivity ……………………………….

276

4.10.3 Regression Analysis of the employees’ Job Satisfaction on the Employees’ Productivity …………...…………………..

278


280


282

4.11 Multiple Regression Analysis ……………………………... 285

4.12 Testing of Hypothesis ……………………………………… 286 4.13. Correlation Analysis ………………………………………. 287

4.13.1 Correlation of Matrix of Variables ………………………… 287 4.14 Descriptive Statistics ………………………………………. 288 4.15 Regression Analysis ……………………………………….. 292 4.16 Regression Analyses of Organizational Performance on

ISQ, EJS, ER and EP ………………………………………. 293

4.17 Factor Analysis of Internal Service Quality ….……………. 295 4.17.1 Item wise Factor …………………………………………… 296 4.17.2 The KMO and the Bartlett’s test …………………………... 298 4.17.3 Total Variance Explained …………………………………. 299 4.17.4 Rotated Component Matrix ……………………………….. 301

4.18 Structural Equation Model (AMOS) ………………………. 303 4.18.1 Index of fit Model …………………………………………. 304 4.18.2 Hypotheses testing based on regression weights ………….. 304

CHAPTER 5 Main Findings ……………………………………………... 306

CHAPTER 6 Conclusion And Recommendations ……………………….. 313 6.1 6.2 6.3

Implications of Research …………………………………... Direction for Future Research…………………………........ Limitations……………………………………...................... References ………………………………………………….

323 323 324 325

Annexure- I ………………………………………………... 359 Annexure-II ………………………………………………. 365

X

LIST OF TABLES

Table No. Particular Page No

4.1.1 Frequency Distribution With Respect to Age ……………………………….. 181 4.1.2 Frequency Distribution With Respect to Gender ……………………………. 183

4.1.3 Frequency Distribution With Respect to Educational Level ………………... 184

4.1.4 Frequency Distribution With Respect to Bank Type ……………………….. 186

4.1.5 Frequency Distribution With Respect to Work Experience ………………… 187

4.2.1 Independent Sample T- Test of Employees’ Selection With Respect To

Gender ………………………………………………………………………..

189

4.2.2 Independent Sample T- Test of Employees’ Training and Development With

Respect To Gender …………………………………………………………...

191

4.2.3. Independent Sample T- Test of Employees’ Reward and Recognition With

Respect To Gender …………………………………………………………..

193

4.2.4. Independent Sample T- Test of Work Design With Respect To Gender ……. 195

4.2.5. Independent Sample T- Test of Job Definitions With Respect To Gender …. 197

4.3.1(a) Analysis of Variance for (ANOVA) Employees’ Selection –Age Group …... 199

4.3.1 (b) Descriptive Statistics of Age Group ………………………………………… 199

4.3.2 (a) Analysis of Variance for (ANOVA) Employees’ Training –Age Group …… 201

4.3.2 (b) Descriptive Statistics of Age Group ……………………………………….. 201

4.3.3(a) Analysis of Variance for (ANOVA) Employees’ Reward and Recognitions –

Age Group ……………………………………………………………….…..

203

4.3.3 (b) Descriptive Statistics of Age Group ………………………………….…….. 203

4.3.4(a) Analysis of Variance for (ANOVA) Work Design –Age Group ……………. 206

4.3.4 (b) Descriptive Statistics of Age Group ………………………………………… 206

XI

LIST OF TABLES


4.3.5(a) Analysis of Variance for (ANOVA) Job Definition–Age Group …………… 209

4.3.5(b) Descriptive Statistics of Age Group ………………………………………… 209

4.4.1 Independent Sample T-test of Educational Level With Employees’ Selection 211

4.4.2 Independent Sample T-test Of Employee Training With Educational Level .. 213

4.4.3 Independent Sample t-Test of Educational Level With Employee Reward

and Recognition. ……………………………………………………………..

215

4.4.4 Independent Sample t-Test of Educational Level With Work Design………. 217

4.4.5 Independent Sample t-Test of Educational Level With Job Definition……… 219

4.5.1 Independent Sample T-Test of Bank type with Employee Selection………... 221

4.5.2 Independent Sample T-Test of Bank Type With Employees’ Training. ……. 223

4.5.3 Independent Sample T-Test of Bank Type With Employee Reward and

Recognition …………………………………………………………………..

225

4.5.4 Independent Sample T-Test of Bank Type With Work Design……………... 227

4.5.5 Independent Sample T-Test of Bank Type With Job Definition. …………… 229

4.6.1 (a) Analysis of Variance for (ANOVA) Employees’ Selection – Work

Experience Groups …………………………………………………………...

231

4.6.1 (b) Descriptive Statistics of Work Experience Groups…………………………. 231

4.6.2 (a) Analysis of Variance for (ANOVA) Employees’ Training – Work

Experience Groups …………………………………………………………...

233

4.6.2(b) Descriptive Statistics of Work Experience Groups ….………………………. 233

4.6.3 (a) Analysis of Variance for (ANOVA) Employees’ Reward and Recognitions –

Work Experience Groups …………………………………………………….

235

4.6.3(b) Descriptive Statistics of Work Experience Groups…………………………. 235

4.6.4. (a) Analysis of Variance for (ANOVA) Work Design – Work Experience Groups ………………………………………………………………………..

237

4.6.4. (b) Descriptive Statistics of Work Experience Groups ………………..………… 237

XII

LIST OF TABLES


4.6.5. (a) Analysis of Variance for (ANOVA) Job Definition– Work Experience

Groups …………………………………………….………………………….

239

4.6.5. (b) Descriptive Statistics of Work Experience Groups …………….……………. 239

4.7.1 Regression analysis of the Employees’ Job Satisfaction on the Internal

Services Quality ……………………………………………………………..

241

4.8.1 Regression analysis of the Internal Services Quality on Employees’ Job

Satisfaction …………………………………………………………………..

243

4.8.2 Regression Analysis of the Internal Services Quality on Employees’ Job Satisfaction. 247

4.8.3 Regression Analysis of the Internal Services Quality on Employees’ Job

Satisfaction …………………………………………………………………...

250


Satisfaction …………………………………………………………………...

253

4.8.5 Regression Analysis Internal Services Quality on Employees’ Job

Satisfaction …………………………………………………………………..

255

4.9.1 Regression Analysis of the Employees’ Job Satisfaction on the Employees’

Retention ………………………………………………………………….…

258

4.9.2 Regression Analyses of the Employees’ Job Satisfaction on the Employees’

Retention ……………………………………………………………………..

259


Retention ……………………………………………………………………..

261


Retention ……………………………………………………………………..

265


Retention ……………………………………………………………………..

267


Retention ……………………………………………………………………..

269

4.10.1 Regression Analysis of the employees’ Job Satisfaction on the Employees’

Productivity …………………………………………………………………..

272

XIII

LIST OF TABLES



Productivity …………………………………………………………………..

276


Productivity …………………………………………………………………..

278

4.10.4. Regression Analysis of the Employees’ Job Satisfaction on the Employees’

Productivity …………………………………………………………………..

280


Productivity …………………………………………………………………..

282

4.11.1 Multiple Regression of Employee Productivity, Employee Retention on

Organizational Performance …………………………………………………

285

4.13.1 Correlations Matrix of Variables ……………………………………………. 287

4.14.1 Descriptive statistics of Variables …………………………………………… 288

4.16.1 Regression Analysis of Organizational performance on ISQ, EJS, ER and

EP …………………………………………………………………………….

293

4.17.1 Item Wise Factor Analyses of Internal Service Quality .…………………… 296

4.17.2 The KMO and the Bartlett’s Test ……………………………………………. 298

4.17.3 Total Variance Explained …………………………………………………… 299

4.17.4 Rotated Component matrix ………………………………………………….. 301

4.18.1 Index of fit of Model ………………………………………………………… 303

4.18.2 Hypotheses Testing based on regression weights …………………………… 303

XIV

LIST OF FIGURES

Figure No. Particular Page No

4.1.1 Frequency Distribution With Respect to Age ………………………………. 182

4.1.2 Frequency Distribution With Respect to Gender …………………………… 183

4.1.3 Frequency Distribution With Respect to Educational Level ……………….. 185

4.1.4 Frequency Distribution With Respect to Bank Type ……………………….. 186

4.1.5 Frequency Distribution With Respect to Wok Experience Groups ………… 188

4.18.1 The Result of Internal Service Quality Model (SEM) ……………………… 304

XV

LIST OF ABBRIVIATIONS

B2C Business to Customers

B2E Business to Employee

B2B Business to Business

ES Employee Selection

ET&D Employee Training and Development

ER&R Employee Reward and Recognition

EJS Employee Job Satisfaction

ER Employee Retention

EP Employee Productivity

HR Human Resource

HRM Human Resource Management

IBP The Institute of Bankers, Pakistan

ISQ Internal Services Quality

JD Job Definition

KMO Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

NIBAF National Institute of Banking and Finance

OP Organizational Performance

QWL Quality of Work Life

SD Standard Deviation

SEM Standard Error Mean

SPSS Statistical Package for Social Science

SMEs Small Medium Enterprises

TQM Total Quality Management

WD Work Design

XVI

DEDICATION

You dressed me when I was naked,

You cared for me lovingly when I ailed;

You picked all my tears and fears when I was afraid,

You taught me when I was stained.

A sign of God you are to me,

A symbol of hope you are to me.

My life is because of you,

Like all the other blessings,

The accomplishment of Ph.D. is also

Dedicated to you, …

MY LOVELY PARENTS.

XVII

ACKNOWLEDGEMENTS

It had always been beyond my expectation to accomplish Ph.D. It is only a

blessing of Almighty Allah and my Prophet Muhammad (peace be upon him) alongwith

the invoked blessings of the sincerest and most caring members of my family and dearest

friends who shared their time, ideas and moral support that not only contributed

significantly but helped me in various ways to successfully complete the research study.

I extend the foremost and the deepest tribute to my father and mother, brothers, sisters

and my dear wife and the dearest son whose prayers and sacrifices strengthened my

determination to complete this study.

Special thanks and honour are extended to my respected research supervisor,

Dr. Kashif-ur-Rehaman, Associate Professor, Iqra University, Islamabad, Pakistan. His

kind behaviour and intellectual support not only made it possible for me to uplift the

research work from the foundational stage to maturity. The research is highly indebted to

his kind guidance, encouragement and full cooperation alongwith informal environment

and above all in which I always discussed my research problem with him at ease. I

simply accept that I couldn’t accomplish the research work without the cooperation and

kind guidance of my supervisor Dr. Kashif-ur-Rehman.

I am thankful to the concerned faculty members at National University of Modern

Languages, Islamabad, Pakistan, for their kind guidance, cooperation and right directions.

I must assert that accomplishing this research work would never been possible without

the valuable and thought provoking instructions and encouragement of my respected

professor Brig (R) Aziz Ahmed Khan (Rector, NUML), Dr. Mrs. Shazra Munawar (Dean

AIS, NUML) Dr. Rasheed Ahmed Khan (Dean IT, NUML), Brig (R) Dr. Allah Bakhsh

(HOD Education Deptt, NUML) and Dr. Hamid Rafique Khattak, (Dean Management

Sciences, APCOM). I especially thank Dr. Rasheed Ahmed khan for his kind instructions

and sincere guidance that helped and directed me throughout my course work. I am very

grateful to honorable Dr. Mrs. Shazra Munawar for her kind cooperation on different

relevant issues.

XVIII

I am also greatful to Allama Iqbal Open University, AIR University and Higher

Education Commission for providing me access to their libraries and allowing me to get

the required books issued. I am really thankful to Dr. Zulkaif Ahmed (Ex- Director

Academics, Air University, Islamabad) and Dr. Muhammad Zahid (Ex Assistant

Regional Director, AIOU) for their kind support and assistance in technical issues faced

by me during research work. I personally thank Dr. Arshad Zaheer, (PAEC), Mr. Faisal

Siddiqui, (Assistant Professor, Air University), Mr. Shoaib Ather Qureshi, (AVP,

Member Directing Staff, NBP Staff College, Islamabad), and Ms. Somia Sohail

(Lecturer, FGCW, Islamabad) for their kind support and guidance to accomplish my

research work.

I thank my boss Mr. Arif Qureshi, VP, National Bank of Pakistan, who, inspite of

severe pressure of work, provided me an environment to carry out my research and made

my office timing flexible during my entire course work from Jan 2004 to Feb 2005. I am

also obliged to my bosses at NBP, Head Office, Karachi, Regional Office, Islamabad and

colleagues for their kind moral support at different levels of the research work, especially

Mr. Dr. Mirza Abrar Baig, SEVP, Group Chief, Head of HRM, Mr. Fazal-ur-Rehaman,

EVP, Divisional Head, PA&IW, and Mr. Muhammad Hanif, Divisional Head,

HRM&AG, Mr. Shahid Iqbal Qureshi, VP, Ex Regional HR Chief, and Mr. Javied Iqbal

Naz, Regional HR Chief Islamabad for granting me study leave thus enabling me to meet

deadlines during the research work. I am indebted to all the NBP Family members who

are directly or indirectly associated with me.

Muhammad Asif Khan

1

CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Industry plays a key role in the development of the economy, and now in

modern times it can be advanced by focusing on the constantly changing demands of

customers. Unfortunately, the public and privatized banks do not have enough

professional efforts to satisfy the internal customers which ultimately leads to a direct

loss of hidden assets of the banks and it should be addressed properly (State Bank of

Pakistan, 2005).

Today, the Pakistani banks are brazened out with speedily changing market

conditions indicated by high mixed rates and strong competitors. Under these

circumstances, the conventional management approaches that focus both on monetary

figures and centralized reasonable planning methods are considered to be inadequate

for effectively steering the organization in a dynamic environment. The recent

banking trends support practical approaches like intellectual capital of organizational

performance by focusing on the customers’ quality services. They combine both

financial and non-financial aspects and comprise such actions as not only observe but

also map and control the banks’ productivity (State Bank of Pakistan, 2006). The

successful measures needed to enhance the desired skills of employee’s alongwith the

favorable work environment are supported by the upgraded technologies (Zaidi,

2006).

2

The aim of the evolution of globalization have brought many changes in the

economic and business settings allover the world and almost all industries including

the banking and financial sector, one way or other, are affected by this trend. In turn,

the banking sector in Pakistan gradually is becoming more and more competitive. The

commercial banks in Pakistan, like in the developed countries are lying more

emphasis on providing facilities and services to their customers.

The financial and banking sectors in Pakistan have undergone significant

reforms since the government announced its policy to privatize the commercial banks.

It further stimulated the liberalization and financial sector deregulation In 1990s with

the view to employing the structural reforms plan and strengthening the financial

operations.

This started with the privatization of public commercial banks and orientation

of the new ones from the among private sector to establish a market-based banking

system (Akhtar, 2002). In the era of globalization the stipulation of effective and

quality services to business and the customers is becoming a key factor in the growth

and success of the banking sector in Pakistan day by day. Due to all these reforms, the

Pakistani banks are offering a wide range of services to accommodate the needs of the

touchy and ever-demanding customers.

The customer satisfaction which was the object of numerous discussions and

the recent trends indicates that the client still remains in the spotlight, especially in

quality services. The customer satisfaction is usually called the general measure of

3

performance of various characteristics of the product or service (Swan and Combs.

1976; Sampson and Showalter. 1999). Higher satisfaction increases customer’s

loyalty, positive word-of mouth, his retention that consequently leads to Profitability

(Szymanski and Henard, 2000).

Quality of service was defined as the total customer experience with the

organization while terms of relative superiority or inferiority (Johnston, 1995). It must

not only meet but also exceed the expectations of the customer and should include the

continuous process improvement (Walker and Cheung, 1998)

The quality of service is one of the most important decisions in the

organization while determining the appropriate level of the internal service quality in

respect of management of the human resources. When the customers are not satisfied

with the internal HR practices, they not only have to continue their service unlikely

but also to reduces their negative experience of service greatly for other reasons, in

some shares.

To retain the existing customers and get the new ones in the organization to

begin with vast resources to improve its service quality and providing high quality

service even some times is too expensive. Anderson, Fornell and Rust (1997), showed

that the relationship between the customer satisfaction which is a measure of service

quality and profitability of the firms will be negative in services. For managers, it is,

therefore, necessary to understand the implications of improving the quality of

services to the current and potential relationships with our clients.

4

All organizations especially in the banking sector, whose service improvement

is dependant on establishing long-term associations need concentrate on keeping the

customers loyal. The quality of service is a key factor to customer’s satisfaction

alongwith retention and devotion. It is further added that the stakeholders who are

satisfied in the short term more probably will remain satisfied in the long term in case

the banks are ready to spend on managing their associations with the clients and

maintaining the internal service quality (Binks and Martin, 1996).

Unlike the quality of goods’ which can be measured with some objectivity, the

services quality is abstract and elusive. In the absence of objective milestones, an

organization must rely on the consumer’s perception of services’ quality to identify

their strength and weakness with the view to designing the appropriate strategy.

A business must take into account its clients’ requirements and needs when it

widens its products and must continue its services. As the old saying goes, ‘The

customer is always right’ while interacting with the individual areas of quality service

particularly, the explanations that issue the majority are those of the patrons

(Gutheim, 2000).

The comments from the customers are the facts, no matter what competition

with or otherwise are the opinions of the company employees. It is not enough to ask

the customers as to what they think of an organization's products or service and then

return to company as common. If a company is serious about measuring the customer

and client’s expectations and is trying to find the ways to improve the customer’s

5

satisfaction, it must take seriously the feedback and use of the information tailored to

its potential and affects the collection and proper accountability.

A significant and substantial analysis has been devoted to providing the

quality service role in the overall business performance of the strategic business

services to the level of detail while the relationship between the internal service

quality and the profit was not considered an easy and simple task. In the article,

Heskett et al., (1994) the concept of service-profit-chain which includes consent to

this conceptual model in an effective way to meet the business requirements by

establishing the relationship between perceived internal service quality in the business

market and staff job satisfaction with perceived external service quality, is the

customer satisfaction and profitability.

The prospects of the service-profit chain narrates that the internal service

quality must help the management design a comprehensive approach executed

throughout the model of chain to supplier-customer, reflecting the fundamental

business strategy that offers such services as fully satisfy both inside and without it

(inside and outside) through customer satisfaction, their plain and peculiar mode.

The involvement and participation of the customers/clients in the service

stipulation practice and, mainly the relations between the client and employee of an

organization has a significant influence on the business. There is a vibrant continuing

process involved in the association between the organization/business and its clients

(Irons, 1997) as, the customers, employees, and the organization continuously

6

exercise a mutual power on one and other, they are not supposed to be considered as

lonely and single entity parts of the business service management process.

The competitive/rivalry progression and technological development in the

service delivery structure have resulted in a steady shift in the planned focus from

price to service quality in the banking industry. A continuous development in the

service quality is considered a precondition in the Banking/Financial Services

Industry at a time when it is experiencing an odd rate of change in the business,

products, and the delivery methods.

To add value to and to perk up the organizational effectiveness, the human

resource management activities need be brought in line with the changes mentioned

above, moving toward a stronger customer point of reference, the customer-driven

interaction, and the resulting organizational changes.

The achievement of a company is guided by the strategic direction of the

organization to its customers, competitors and internal customers (employees) and

significant relationship among these components. The foreign marketing is concerned

with the relationship between the company and its customers while the domestic one

refers to that one between the company and the customer. In other words the domestic

marketing refers to the relationship that exists between the company and its

employees through its internal policies and methods of interaction, including the

expectations, equaling the performance and compensation planning (Parasuraman,

Berry and Zeithaml, 1998).

7

In the modern management and business theory, the staff' satisfaction is

treated as the major factor of the internal service quality that leads to the external

customer satisfaction and productivity. Many researchers proved through their

theoretical and empirical studies and discussed in detail the impact of on the staff

satisfaction with company performance. In the quality control literature, it is claimed

that the happy employees are highly motivated having a good work ethic and they

work more effectively and efficiently (Eskildsen & Dahlgaard, 2000). They are also

dedicated to a continuous improvement and quality assurance. The satisfactions of the

employees have a direct impact on the quality that in turn determines the quality,

value and the customer’s satisfaction.

Zeithaml et al. (1990) argued that the quality of service suffers when the

employees are not willing are not able to provide a benefit to the required level of

motivation which implies that they have carried out the discretionary effort. This can

occur in the client based firms like the retail banks wherein the quality of service is

the quality of service to the contributors / Renders (Lewis, 1989) and all the practices

and actions of the customer to contact the staff are inseparable during their service

and, hence, cannot be managed and controlled by the management. That is why,

during the time of service encounters, it is the willingness of the employees, their

discretionary effort, the level of service they provide is to determined and committed

one to the customer satisfaction achieved (Zeithaml et al., 1990). The environment in

which the employees are happy and committed is one which is conducive to the

customer’s satisfaction (Sergeant and Frenkel, 2000).

8

Due to globalization, every organization and enlightened country striving for a

better future is seeking a quality that is based on the latest production concepts today.

The customer relationship management is no longer a foreign word now. It is best

understood as a never-ending process of continuous improvement of the relations

between customers and employees these days. It is high time that "we realize that the

prevention of defects is more effective than repair, inspection, and defects themselves.

In the third world countries in general and in Pakistan in particular, it is the realization

of this concept, a very weak area.

Despite all the excitement about the recent quality services, the old advice is

still the new one that the goal of the quality system is to help improve the quality.

Mere measuring the quality costs would not do. To improve the things that an

organization must re-engineer machines which originally divide into the categories of

quality of prevention, testing and failure is the real target.

The quality management plays an important role in the successful initiatives’

quality. Sometimes, there is a difference of opinion about the rating, but there is no

dispute about the importance of the quality of service. One to the growing importance

of the product quality and the increasing extent of services, it is important for

management to have some systematic modes of planning and quality service. This is

the ultimate goal of a quality management system service.

9

1.2 Problem Identification

The application of quality service has changed dramatically since 2005.

Traditionally, the quality services were used to track progress production, but within a

couple of years an alternate focus for quality has developed. When we apply

practically the internal service quality in organizations’ working atmosphere it adds to

the employee’s job satisfaction. The internal service quality can be measured by the

feelings that the internal customers have towards their jobs, colleagues, and the banks.

Today, many financial services, especially the banks are endeavouring to become

customer-centered. A key factor of the improved customer orientation is the

implementations of such tools as allow the development of better relations between

the banks and the customers (Hammer & Champy, 1993).

The management of the banking sector is under an ever increasing pressure to

reveal that their services are customer-focused and that to incessant performance

enhancement is on the given financial and resource constraints under which the

banking organizations must manage it. It is essential that the customer expectations

are understood and measured and, from the perspective of customers, the poor service

quality is identified. This information, then, assists a manager to identify the cost-

effective ways of covering the service quality gaps and to see as to which gaps need

the priority to focus on.

The banking industry in Pakistan has been infested with many problems that

have badly affected the loyalty of the customers. The customer loyalty and

satisfaction are critical to the conduct of business in the competitive marketplace and

business environment today, and the banks are no exception to it. The commercial

10

banks have, thus, embarked on different management strategies as resorts to promote

the customer’s loyalty and satisfaction. Today, there is high competition in the

banking sector in Pakistan for the customer patronage so that relationship marketing

becomes an imperative for gaining the customer’s satisfaction and retention for the

smooth business excellences.

The banking business has undergone numerous changes for the regulation of

this sector, customers’ stipulation for services, industrial changes and the access of the

new entrants from the outside businesses. Due to all this, an open and competitive

framework has developed wherein many financial entities are switching on to show

their concern for developing some defensive strategies with the view to avoiding the

indiscriminate loss of the customers.

In order to deliver an excellent quality of services to the customer and to strive

for the business excellence, the employee’s satisfaction, productivity and retention

within the organization is of much importance. And, all these can be achieved only if

the Top Level Management take an extra care while developing the internal services

quality bases starting right from selection and recruitment process to recognizing the

employees with their core expertise by setting up tremendous work design for the

them. But, unfortunately, in Pakistani Financial and Banking Sector, all these human

resource practices are too difficult due to which the employees are dissatisfied and

they are unable to deliver what is expected of them.

Today, the quality management is being applied in the service organizations

having the full range of quality services that include prevention, appraisal, internal

11

and external failure, etc. An analysis of the poor quality services provides a very

useful tool for improving the management and employees’ thinking about the

effective achievement of the organizational performance. Delivering a good service

quality is the employee’s productivity, as his productivity itself is dependant on his

satisfaction. This study is aimed at providing models to obtain the best services

through the employees with the view to developing an effective protocol for the future

guidance and use of. For this purpose, visits have been arranged to collect first hand

information of various processes in the earmarked banks. It will create awareness

among the management/employees and the outcomes of the research can be used for

continuous and effective development in the days to come.

1.2.1 Research Questions

1. What is the impact and potential of ISQ input in business process and its

relation to banks’ performance?

2. How the bank employees perceive the application of Internal Services Quality

in the business process with respect to their demographic profile?

3. To what extent does the perception of bank employees vary in terms of

internal service quality facets, employee satisfaction, their retention and

productivity with respect to their demographic?

4. What perceived relationship exists among the internal services quality,

employee’s satisfaction, his retention, productivity and organizational

performance with respect to the demographic profile of bank’ employees?

12

1.3 Significance of the Study

The Banking industry may become a leading one in Pakistan if we utilize our

human resource in a proper way in the context of feedback technology, information

sharing, products promotions and exercise extra care in employee’s selection, reward

and recognition as well as training which will not only improve his productivity but

also increase our clientele as compared to other multinational banks. It will also

provide employment and generate economic activities and ultimately add to the

organizational performance.

According to the survey of experts of quality, losses resulting from the poor

quality services and annual collective loss to the industries run almost in billions of

rupees. It is a heavy drain of national resources of which most of the managers are

ignorant. The logic to work on this topic is to increase the awareness of

management/workers about fair HR Practices and to curtail the losses to the national

exchequer. Therefore, the study has a great say towards its application in the public

and privatized sector banks.

1.4 Objective Of the Study

The aim of this research is to provide an insight into the organization to

identify the basic components of the internal customer satisfaction through the

provision of quality services by using Human Resources Processes including the

transformation one from an existing quality level to a higher one by applying the

selected model that will enhance the performance through human resource

management application for achieving a world class quality and global

competitiveness within the developing nation, like Pakistan. It indicates as to how the

13

internal service quality should be catered to curtail the cost and improve the

productivity as well as the business process.

The following are the main objectives of the proposed research work:-

1. To provide an insight into the process of improving the internal customer

satisfaction.

2. To ensure that the quality comes through professional insight by focusing on

the internal customer demand and jacked up Human Resource planning.

3. To analyze and propose the stake holder the perceived relationship that exists

among ISQ model , employee job satisfaction, his retention, productivity and

the organizational performance

1.5 Scope of the Study

The study bases on a survey of both public and privatized banks and, thus,

analyzes various aspects of the Internal Service Quality that essentially shapes and

magnifies the organizational performance. This study mainly focuses on Public and

privatized banks as to how to incorporate the Internal service Quality in the human

resource management with the organizational performance. This blended benefit of

incorporation of the ISQ in the human resource management is an intervention which

will help the performance indicators of the bank get them out of the conventional

designs of the service parameters to a modern, scientific, result-oriented, cost-cheaper

design, bringing thereby the organizational efficiency and cost effectiveness of the

organizations, if applied carefully.

However, this concept bases on the assumption that the Managers of the banks

who have spent a lot of time with the organization conversant with all the grays and

14

gaps, being the key informants, if they get consciously focused on the indicators

building the concept of the ISQ they can supplement the employees’ productivity,

retentions and growth coupled with the systematic self-emerging strength and

professional viability of the organization.

All the key indicators comprising employee selection, training and

development, reward & recognitions, work design and job definition, etc for their

being the aesthetic factor, letting other factors be constant, would prove that the

internal service quality can enhance the organization’s performance based on the

model of human capital.

1.6 ISQ Model with Relevance of Pakistan’s Banking Need

The banking industry in Pakistan has been characterized by many problems

that have affected badly the satisfaction of the customers due to the diversification of

structural changes and integration of new segmentation in the financial markets. The

external and internal customers’ loyalty and satisfaction are critical to the conduct of

business in the competitive marketplace and business environments, most of the

managers, both in general and public sector, are not fresh to meet the continuously

changing global environment, merely because of the conventional practices and

systems alongwith less creativity and lack of relevant knowledge. The facts of stifle

creativity and innovation by the human resource of any organization were pointed out

by (Zaheer, Mushtaq, & Ishaq, 2008). In Pakistan the HRM is an emerging concept,

but it is still waiting for a strategic placement in the banking sector under the

regulation of the State Bank of Pakistan to make it standardized practice-able duly

able to meet the professional requirement. As a result there are greater losses within

15

the banking industries. The bank management has to face the dual challenges while

promoting the financial diversification and consolidation for achieving the financial

objectives. However, on the other hand they are lacking the standardized policies to

streamline the HR practices from gross root level to the corporate management.

Hence, it requires an emergent attention (Leghari, 2003). The like situation was

highlighted by Gore (1993) also who identified that the main cause of the poor

performance was in the ‘bad system’ not the ‘bad employees’

The banking business has undergone certain changes for the regulation of the

sector, customers’ stipulation for services, industrial changes and the access of new

entrants from the outside business. The excellent quality services to the customer and

managements make every effort for the business excellence. They also realized that

the employee satisfaction and retention alongwith productivity is much important in

the current competitive regime. And they can achieve, if the corporate management of

the organization take extra care while designing the policies for their internal

customers considering the essence of internal services quality which starts from

recruitment process to retirement. Pakistani Financial and Banking Sector having

experience and skilled base employees are dissatisfied due to unacceptable HR

practices which are not really encouraging to deliver what is expected of them and as

result highlighted by Rahi (2005) that only in a one year more than 0.2 million

professionals left Pakistan due to lack of strategically implementations of HRD

policies at national level.

16

1.7 Definition of Terms

For clarity of understanding, the following terms need be defined:

1.7.1 The Internal Services Quality (ISQ)

The services quality is a broad term used both in the customer care assessment

and technological evaluations. Between these two services quality has to do with

measuring the occurrence of errors in a process that results in the formation of

questions for an end user.

1.7.2 The Internal Customers

The internal customers are indicated as the Employees of Banks who provide

front line services to the clients.

1.7.3 The External Customer

The External customers are the persons who purchase some goods or services.

They are to person’ who must face, usually on a regular basis, may be they are traders

or business maen..

1.7.4 Employee’s job satisfaction

Job satisfaction is an enjoyable or optimistic poignant state that is the result of

the evaluation of the job or experience.

1.7.5 Bank

It is an organization, typically a corporation, duly chartered by the Federal

Government. It handles most or all of the following business:-: It accepts the demand

17

deposits, the time deposits and pays interest on them; discounts notes, circulate loans

and invests in securities.

1.7.6 Employee

He is the participant from the first phase, he is the person who works for

others and spends his time in exchange for financial compensation, etc.

1.8 Outline of the Thesis

The thesis is divided into six chapters. The first chapter comprises introduction

which sets a background to the research and defines the terms. The second one

reviews the relevant Literature and Research Model whereas chapter III presents the

Research Methodology and Design. The Data Analysis is discussed and Verification

of Proposed Hypothesis is given in chapter IV while Main Findings of the study are

given in Chapter V. The Summary, Conclusion and Recommendations are presented

in chapter VI that’s followed by the References.

18

CHAPTER 2

LITERATURE REVIEW AND RESEARCH MODEL

2.1 Literature Review and Research Model

The globalization has to help the competitive pressure to reduce prices and

improve the quality of services by the professional financial institutions duly

expanded, especially the local banks. From this point of view, it ensures a compliance

with the internal services on human resource management according to the

requirements. Many researchers believe it the maximum in the development

organization from potential human resource and it is necessary to create a conducive

environment by applying the best HR practices. It is, therefore, high time to call the

employees to improve themselves in the center of the development process with the

sense of personal responsibility and hidden assets for effective organizational

performance. The conventional notions of quality, based in the manufacturing

industry in compliance with the defined standards of management have begun to be

replaced by the customer-oriented ideas. This requires a close observance of what the

customer needs and as to how their requirements could be met. Different service

levels and customer satisfaction ideas have been defined as the gap between apparent

and predictable, is assessed. Quality is watched as a comprehensive process to all

concerned right from the top management of the offspring having no focus on the

employee-customer interaction. Some new approaches, such as Quality Management

and continuous improvement programs have begun to be applied by numerous service

industries.

19

As service companies, especially banks, employees and customers in the first

place, there are radical changes in as to how we manage and measure success. The

internal customers are now strong enough to be valued and the outsourcing should

consider them making the basic business linkages. It is the customers who tell us the

perceived value of the results they receive in relation to total expenses, including

prices and costs for them in the procurement of services. A number of authors have

highlighted the importance of domestic support that includes the employee’s

retention, his satisfaction, productivity in the internal marketing as well as the internal

customers, not treated, and linked it with the quality of services and ultimately the

business processes and the organizational performance.

It is analyzed that the Human Resource Management (HRM) policies have a

profound impact on the organizational performance. The universalistic model of the

Human Resource Management was the centre the exploration. The results show a

strong support for the model. It demonstrates that the Human Resource Management

Strategies of staffing, their training, and jobs are the approved, incentives and

benefits, job sharing, and the security associated positively with the organizational

performance. The study not only contributes to human resource management theory

but also has important implications for the practice.

The satisfaction of employees is a direct influence on the process of service

quality and it is said that if the employee satisfaction is the focus point at an

organization in terms of his career planning, rewards and compensation for them is in

the retention of employees in those organizations in turn relatively higher than those

whose employees are not satisfied in any context.

20

The traditional measures of losses due to the fluctuation are to focus only on

the costs incurred for the recruitment, hiring and training to be replaced. In most

service jobs, the real cost of turnover for the loss of productivity and reduced

customer satisfaction. The value is created by satisfied, loyal and productive

employees. The satisfaction of the employees which in turn results in particular from

the support services of high quality and policy, that the employees should achieve the

outcomes for customers, and ultimately drives organizational performance to activate.

These chains also determine the factors that influence the quality of the

internal services. The inner quality of a work environment contributes to employee

satisfaction a great deal. The internal service quality is through the feelings that the

people have measured at their jobs, colleagues, and business partners. The

determinants of the internal quality services are an employee’s selection, his reward,

and recognition, his employee training, job design and definition.

The employees are often trained in the organizations for their better and

productive performance. The training is defined and categorized into two segments

viz-a-viz specific and general education. The general training provided to the

employees in the form of internships or training, while specific training and it is

meant to increase the productivity in an effective manner.

Learning is an integral part of development and can usually lack focus on

learning by the employees of the attitude that simply means the training for improving

the job performance. Harper (2004) focused on the training of the staff in relation to

21

communication skills as necessitate performance at their work satiation. The

customer-handling companies should train their staff with respect of their job

description for enhancing the communication skills. It helps them retain their

customers and expand their business. This training is linked with employee’s

performance and retention. In addition, the employees are unable to deliver

effectively and efficiently reach their full potential and higher productivity if it is not

achieved. In case, the employees are not trained a poorly educated workforce

eventually will lead to poor performance, horrible as well also in incorrect sequence.

The other factor in the quality of services is the task of defining the design and

can be linked. The design of jobs is approval in principle (or reorganization to reduce)

or to overcome the frustration and alienation of the employment of employees arising

from repetitive and mechanical. Through the design of work, organizations are

looking to a level of productivity by not increasing with monetary rewards such as

greater satisfaction with a sense of personal achievement, the greatest challenge, and

responsibility of their work requirements. Employment growth, enrichment, and their

rotation and simplification are the different techniques used in a design exercise jobs.

Gan and Kleiner (2005) defined the importance of the worth and

responsibilities of the employees, and mangers for critical decisions making. The

manager is able to get help in deciding whether the employee is the right person for

the promotion. The employee receives instructions from the job descriptions to whom

in the organization to report it and what are its basic responsibilities and also provide

information for performance appraisal process knows.

22

The investments on the potential Human Resources are valuable and the

managers are one to maximize their use considerably. These efforts have facilitated

the managers to explore and apply the new procedures and practices concerning the

employees. Such practices include Personnel Administration and Personnel

Management meant to transform the existing Human Resource Management.

To increase the return from investment on the human beings many

organizations have developed massive Human Resource Management departments.

These departments are responsible for the strategic and coherent approach as to how

to manage the most valuable resources of an organization; the people working there,

individually and collectively and to contribute to achieving the objectives of the

organization. These approaches base on various factors, such as leadership, working

with others and the dependence of Job and variation. These factors along-with their

use and meaning constantly are changing in relation to, work environment and

perceptions of the time frame. The need is the ability for a wider range of factors that

influence the employees' satisfaction and the identification of their relative importance

to the satisfaction.

Hereunder follow some notable references in detail in with regard to the

internal services, the quality of human resources practices and to their impact on the


23

2.2 Internal Service Quality

Garvin (1988) and Zemke (1989) examine the internal service quality from

different perspectives. They share a deep fundamental belief that organizations that

provide the quality of services to the external customers they must do so in the light of

the needs of their internal customers first.

Heskett et al. (1990) finds the perceived internal quality service in an

interdisciplinary environment, and this may be explained as to why it remains

relatively unexplored empirically. He finds us to why the primary elements of the

internal service quality duly being identified are not fundamental traditional and

functional in the disciplines of management. He concludes that the scientific and

popular writers are of the view that the internal quality of service are apt to work with

an interdisciplinary perspective.

Berry (1981), Grönroos (1990) and Gummesson (1990) state that if the

leadership/corporate management wants to engage by staff providing them within

outstanding level of customer service, they must be prepared to do a great job with its

employees.

Stershic (1990) holds the contribution of the organizational performance to be

very important in this context. She claims that as is obvious, it might seem to

recognize the employees as an important link for ensuring the service quality and the

customer satisfaction. She also explains that the grants and understanding in the

perspectives of employees are an important tool in managing the customer

24

satisfaction. This allows the internal marketing managers to understand the needs of

their employees, who could meet the needs of their clients.

Capon et al (1990) conducts meta-analysis and digs them out of different

studies that a positive relationship between the internal service quality and the

business success is there. It defines two additional key components of the internal

service quality: management's expectations and the service consistency.

Reichheld and Sasser (1990) state that the internal service quality and

profitability are associated with measures of the customer loyalty. They feel the

discrepancy between the expectation of service and satisfaction, as the employee-

oriented process. They believe that, the internal service quality and the performance

are inter linked.

Teas (1993) suggests that the result of the inconsistent perspectives of the

general perception of the quality of service can belong to most of the researchers in

contrast to the transaction-specific focus of most researchers. It defines the internal

service quality processes and as to what extent the quality of translated augmented

profits and the business process have been achieved.

Lehtinen and Lehtinen (1982) state that the service quality has been

established in the relationship between the internal customer and the items in the

service organization. They refer to three blocks, namely, quality, the physical quality,

and the material aspects of the service, the company's image or profile, and finally the

interactive quality of the interaction between the contact personnel and the customers

25

to them their origin concludes that the positive interactive quality and the effective

internal quality of service always interact.

Chang and Huang (2006) observe the correlation between the service quality

and the customer satisfaction. Along with the customer retention in the leisure

industry for the operator to give notice to improve their quality. Review the literature

in the specific field, they find the stress mainly on the investment decisions and

strategy development mechanism attractions and leisure activities based on the

relationship between the service quality, the customer satisfaction and the loyalty.

Basing the results on the analyses, some population statistics show partly statistically

a significant relationship among the service quality, the customer satisfaction and the

loyalty of the leisure industry while there also exist significant differences between

importance and satisfaction with service quality leisure industry to get the elevation.

Mukherjee and Pal (2003) present a theoretical framework for determining the

competence of the banking and the financial services taking into account the material

and human resources, internal service quality and the productivity. The investment in

quality development efforts and impact quality of care in economic output, they

intrigue researchers long ago. They find that the banks tending to alter as to how their

natural resources for economic efficiency of intermediation and intangible factors

unconsciously unnoticed provide quality service. Thus, the hypothetical grid is

proposed to optimize the use of resources, harmony, quality and performance of their

services, with the view to establishing a link among the marketing variables with

reference to the financial ratios.

26

For these measures out of service quality as the relationship develops they find

the potential for financial performance by improving the quality of service pragmatic.

They also find that the banks tending to provide a better service-oriented revolution,

resources for better performance a great service than mere supply.

Gronroos (1982) proposes that the perceived quality of a particular service is

the result of an evaluation process as the ruling makes the consumers distinguish

between the services they received and the perception of the benefits they expected.

Therefore, he concludes that the quality of service depends on two variables, the

expected service and the perceived service.

Parasuraman et. al (1985) argues for the customer to assess the overall quality

of service with the gap between the expected and perceived service. Zeithaml (1988)

defines the perceived service quality instead of customers from the global excellence

of the service. Bolton and Drew (1991) describe the service quality to be a form of

attitude which results from the comparison of expectations with performance.

Alden, Steenkamp and Batra (1999) points to the means despite the increasing

mergers and acquisitions. They state that the most important points to the appearance

of a global consumer culture is the horizontal section of the consumer groups with

similar standards, norms and practices between cultures and national boundaries. A

vast majority of the consumers worldwide are not members of that section until now.

All these measures must be taken into account for the cultural differences for

successful marketing efforts including the measurement of service quality and

satisfaction.

27

Larsson and Setterlind (1997) test the model of service quality with concepts

from other areas of research, such as psychological conditions at work for us to

understand better and provide a basis for quality control in primary purpose. It is, to

them, is to examine empirically the relationship between the psychological

environment and the internal service quality. They use the concepts and measure

properly received from the environment of psychological theory and the theory of

service quality properly.

Malhotra and Mukherjee (2003) empirically test the relationships in three

components of the organizational commitment to be effective. They are continuing

and normative with the service quality of the customer-contact employees. They

formulate the hypothesis in the areas of marketing and services of Human Resource

Management. They examine the critical question of as to how the three components of

organizational commitment influence the employee-perceived service quality, being

different in certain industries. Their results show that in the industries, both effective

commitment and continuance commitment have a significant positive impact on the

service quality.

Rafiq and Ahmed (2000) postulate that the consistent service quality is the

emerging concept of the internal marketing and it provides a solution to the problem.

The most important rules for the concept of internal marketing to intact all the

employees of the organization at all levels must be the customer- aware ones and

provoking while rendering their services. The quality of service undergoes a major

28

change if the employee is not willing or is not able to perform a service to the

required level.

Heskett, Sasser, and Schlesinger (1997) postulate that there being no need for

the trade-offs possessed by many of the managers to service quality and not being in

a meaningful productivity leads to the deliverance of a lower value of the service

visits. The use of quantifiable standards of conduct direct productivity efforts to tasks

and actions that just produces a high efficiency even if this increase in quality at the

expense of less scientific and measurable cost come in the third row.

Kamilia and Nantel (2000) conduct a study with valid and reliable scale to

measure the perceived service quality of the Bank with the view to developing

services. The questions are put by the customers in the retail banking. The scale of the

researchers is formed out of the banking service quality (BSQ) and it comprises

various items that turn six dimensions, namely, safety and efficacy, property, access,

price, service portfolio, and reliability.

Frost and Kumar (2000) develop a conceptual model INTSERVQUAL based

on the original model to the scale wherein the quality of service in the internal

marketing set up works to explore the building. The expectations and perceptions in

the eyes come as measures with excellent internal security. Two scales show a

sufficient strength that some measures support the war, employees (customer-contact

personnel) expectations of support services as well as their understanding of the

productivity of the employees. The results show that the weight should be used

29

successfully for the assessment of the gap between the front staff opinions and the

expectations.

Parasuraman et al. (1985) finds that the service quality evaluation between

what the customer opinions are to be proposed and as to what has been created in

reality. Grönroos (1982), Sasser et al. (1978) also supports the findings of

Parasuraman et al. that the service quality is the difference between the opinion and

the expectations of the customers.

Gronroos, (1982), Sasser et al. (1978) note that the main factor is expected to

determine the quality of services, word of the mouth communication, personal needs,

experiences and communication service for the user. The users can communicate with

one another, share tales about their relationships with other people. On the basis of

word of the mouth organizations intend to deliver a high quality services, retain

existing customers, and attract the new ones.

Athanassopoulos (1999) develop a model to compare the performance of the

combination of high quality services with high profit and test their model on the

earmarked banks. The empirical results of his study, major observations presented by

integrated multiple drivers of productivity in the benchmark study find higher

understanding than single-level analysis of the effectiveness of the benefit in the

services.

Yu and Huang (2006) examine the relationship among the service quality,

customer satisfaction, and the work place available to the staff for the improved

30

quality of services. They find that certain companies generally stress for the

investment decision mechanisms and strategies for the business development on the

basis of the relationship among the service quality and customer satisfaction to

enhance loyalty. From the analysis results they find some of the vital statistics

variables significant enough with a substantial connection with the service quality,

customer satisfaction, and loyalty to the businesses despite the significant differences

between importance and satisfaction with the service quality in the organization.

Apaolaza et al. (2006) proposes a conceptual framework and the consequences

of perceived service quality and customer satisfaction, trust in the organization and

the anticipated customer switching costs’ requirement. He finds that three different

areas of perceived service quality are identical: the technical quality of medical care;

the evaluation of service quality, and the high process quality functional service. The

model delegates the largest collection of the service quality duly tested shows a

significant impact only on the quality of service process satisfaction and ultimately

customer loyalty. Loyalty effects of more variables in the model are significant

Gronroos (1982) suggests that the perceived quality of the service is the result

of the evaluation process as consumers have made court of the services which they

expect with perceptions of services they received. Thus, he concludes that the quality

of service depends on the estimated services and the projected services.

Parasuraman et al. (1985) suggests that the evaluation of overall service

quality depends on the gap between the expected and predictable services. Zeithaml

(1988) defines the perceived service quality as the customers rating overall service

31

excellence. Bolton and Drew (1991) describe the service quality as a form of attitude

that falls out from the assessment of expectations with performance.

Alden, Steenkamp and Batra (1999) find that regardless of increasing co-

organization they point to emergence of global consumer culture, i.e., horizontal

section of the consumer groups with similar standards, norms and behaviors across

cultures and national borders. A vast majority of the consumers worldwide are not yet

members of this section so far. Thus, to cultural differences should be taken into

account in any prosperous business efforts including the evaluation of service quality

and satisfaction.

Edvardsson, Larsson and Setterlind (1997) integrate the concept of perceived

service quality from other research work in different fields, such as physical

installation work to help implement better and enable to create the basis for the

quality control services. The main purpose is to reveal the relationship between

psychological and physical environments and internal service quality. They use

concepts and measures derived from the hypothesis of psychosocial working

conditions and the quality of service hypotheses respectively.

Mukherjee and Pal (2003) present a theoretical basis for determining the

competence of the banking and the financial services including physical and human

resources, service quality and performance. The investment on the quality

development efforts to promote and influence the quality of services with monetary

results of the long intrigue researchers. They find that the banks usually focus on as to

how to change their material resources for the economic indicators, and they

32

involuntarily notice a mediation intangible factor of the service quality. Hypothetical

plan to streamline the consent of the resources, service quality and performance it is

suggested to connect the major marketing variables of the financial performance.

Sensor for return to service quality is developed as the ratio of possible improvement

and development of financial indicators to improve service quality in realistic targets.

They find that the banks provide a good service and open repair better resource

productivity through greater service as the standard.

Shahin (2002) concludes that the service organizations and the like ones as a

result of client-oriented approach have turned to management and executive-known

approaches to run the business. The author starts with the concept and idea of the

quality of services and creates a theoretical model of service quality gaps. The

SERVQUAL Model literate approach is considered and along with its role in the

analysis of difference examples. Conclusion of the study set out in detail that the

SERQUAL could lead to cover a significant shortcoming as services for the external

customers. He speculates that it could be extended to other serious gaps in service

quality, and therefore, it can be developed and expanded in order to have a practical

value for the internal customers, such as the employees and the service providers or

the interested parties.

Malhotra1 and Mukherjee (2003) empirically test the relationship the three

components of organizational commitment have effective, normative and persistence

relationships with quality customer contact employees. They formulate a hypothesis

in terms of marketing services which is to sell their services and internal marketing in

the form of human resources. They study the vital question of as to how the three

33

components of the organizational commitment influence the employee perceived

service quality in different ways in some areas. Their results show that, as an effective

preservation obligation and commitment it leaves a strong, positive impact on the

quality of service.

Rafiq and Ahmed (2000) find that the internal marketing has appeared as a

soloution to the problem of delivering consistently high quality service. The primary

concept of the internal marketing having been done it sparks a client with a list of

employees at all levels in the organization. The quality of service has undergone a

thorough change for the employees who are unwilling or unable to maintain the

required level.

Heskett, Sasser and Schlesinger (1997) suggest that, although there is no need

for any compromise, many managers have become obsessed with the quality of

service for its being present in significant productivity, resulting in lower cost of

services rendered. The use of the quantitative standards of behaviour is considered to

direct the efforts of the performance objectives and actions to high level of efficiency,

may be this increase comes at a price less than the scientific and measurable quality.

Kamilia and Nantel (2000) propose that the research conducted towards

establishing as a measureable perceived service quality of the banking services.

Queries were posed from the clients that belong to the retail banking services. Scum

forms as a researcher called the banking service quality (BSQ) which consists of

thirty one questions that turn six measurements. These six dimensions are confidant

performance; price; availability; portfolio services; material and the reliability.

34

Frost and Mukesh (2000) develop a conceptual model of INTSERVQUAL

basis original gap model to identify the extent to which the service is created as

played in the internal marketing create. Pending submission and weight come to sight,

as measures with excellent internal reliability. Two scales show sufficient strength

that separates the front steps of the worker’s (workers with clients) hope for the

supporting services as well as their understanding of the support worker productivity.

The results show that weight can be used successfully for the assessment of the gap

between the front staff opinion and their expectations.

Parasuraman et al. (1985) concluded that service quality was based on a

decision between what the external customer opinion shall be made and how it was

provided. Gronroos (1982), Sasser et al. (1978) also supported the findings of

Parasuraman et al. that quality customer service was non-compliance opinion and

expectations.

Zeithaml et al. (1990) show that the main factors that determined the expected

service quality are the mouth communication, personal needs, past experience and the

communication service provider to the user. People talked to one another and

exchange tales about their relationships with the other people. On the basis of word of

the mouth organizations were interested in good services in order to retain the existing

customers and fascinate new ones.

Zenios et. al, (1999) develops a strategic framework to enable the bench-

marking, bench-marking competent services in the bank branches. They include

35

models comparing the effectiveness of service profit chain director. They include

three models for analysis of coverage data to implement the structure in reality. They

are (I) the model of the operational efficiency (II), the efficiency and service quality

model (III), the profitability efficiency model. They manage to understand, analyze

simultaneously the planned processes together with the quality of services and

performance, not on the bench marking of these three aspects separately. They find

that there is a link between the operational efficiency and the profitability as well as

efficiency and service quality.

Sasser, Olsen and Wyckoff (1978) discuss three different aspects of service

the performance: the level of materials, facilities and personnel. The thing implied in

this tri-chotomy is thought the quality of service more than the result. It also includes

as to how the service is provided. This idea emerged in other studies on quality of

service as well.

Gronroos (1982) suggests that the two types of service quality exist, namely:

nominal as involved / engaged in the business-customer actually receives the service

and practical and functional qualities associated with the methods in which the service

is provided.

Lehtinen and Lehtinen's (1982) find that the basic principle is that the quality

services are produced in the interaction between the client and the service elements in

the organization. They use three quality dimensions: as a major included material

aspects of services (equipment or building), as company, which is attended by the

company's image or profile, and interactive quality emerging from the interaction

36

between the contact personnel and the customers as well as some clients and others.

They also differ between the quality associated with the process of service and the

quality resulting in service.

Schneider and Bowen (1993) examine the relationship between the climate

perceptions of staff service and the internal and external service quality. They argue

that the key to customer experience management services for the internal quality

control the experienced personnel in their organization are required. What type of

work experience they must have is to transfer the consumers. The results show an

their experiences as employees and the customers’ perceptions of quality of service

Nam et al. (2006) presents the empirical model for the existence of direct and

indirect effects that reach the rumor of service quality on new customer groups,

practice and retention. He finds a direct impact of the service quality on the retention

of employees and the termination behavior of the management. Further, he finds that

word of the mouth; almost one fifth of the business affects the customers because of

their entry behaviour. However, these indirect effects of the service quality work as a

double-edged sword, as it is asymmetrical. He finds that the effect of negative word of

the mouth is twice as high as the effect of rumors influenced optimistic, for the

customers through word of the mouth. He finds these effects controlling the

unobserved heterogeneity, market activity, distance to retail and demographics.

Vanniarajan and Anbazhagan (2007) find that the financial services are

intrinsically incapable of definition but are high on the familiarity and credibility of

character. encourage you to become, effectively, a service provider must be used only

37

once to the size of the customer to the service quality of the banks procedures to

assess the customer classification. She identifies the four dimensions: responsiveness,

reliability, safety and property, are made in the area of the customer assessment of

quality in the financial industry. Furthermore, the relationship between these factors

and overall service quality assessment of the bank is examined by the customer. The

significant distinguished service quality characteristics between the public sector,

private sector and cooperative banks are also observed. Their findings indicate that

the customer's comment about the service quality factors in the public sector banks is

less than those of the banks, credit unions in the private sector. The quality service

significantly manipulates the aspects to the whole attitude towards the private

business enjoying consistency and safety.

Wisner and Corney (2001)) present the main theoretical framework to

examine the service quality is (SERVQUAL) collapse. They define the service quality

as a global connection to rule the dominance of the service and link it as assessments

of the results and the process of the service.

Smith and Houston (1982) Parasuraman et al. (1988) examines the service

quality as the difference between the expectations of the customers as to what they

want and their perception of what they get. This concept and theoretical framework

suggests that it is a measurement scale called SERVQUAL service quality scale.

Boshoff and Mels (1995) argue that the contact-people are clearly aware of the

specific challenges that can proceed through the interaction with the customer and that

their perceptions of service delivery deserve more attention. Schneider and Bowen

38

(1985) find a high correlation between the customers’ and employees’ contact

perception of the service quality, in several studies. The main point of the model is the

internal customer awareness of the service quality that is sometimes easier to

measure.

Auty and Long (1999) argue what could cause misalignment between the

departments and organizational units loyalties to sub-optimal effort in the provision of

service to the internal customers. The customer contact employees who often leave on

a high level of internal service quality to provide an external service quality are

particularly exposed to these problems.

Heskett (1990) shows that while the importance of specific internal service

quality for individual components of organizations differ, the top service

organizations and businesses of excellent internal service quality in the eight

components hang on his research continuously to a high value to supply the

customers.

Mok and Yeung (2005) find a strong correlation between the efficiency and

motivation of the employees in an organization consisting of the use of incentives and

bonuses incentives and flexibility in the employment policies and working hours.

With respect to the external orientation behaviour of the organizations, they support

the findings of internal service quality and strong relationship with the organizational

performance.

39

Ioanna (2002) suggests that the product differentiation is impossible in a very

competitive environment, especially in the banking sector. Banks offer almost

identical products worldwide under the regulatory design of regulators. For instance,

there are usually only nominal changes of interest or a range of products available to

the customers. The interest rates have been established and introduced to the market.

The management of the bank in order to withdraw their business from the competition

by service quality is a compulsory element leaving an impact on the customer

satisfaction in the banking sector. In the banking sector, the quality of many variables’

concept that different types of comfort, reliability and service companies includes

critical one provided that the employees of these services are the devoted ones.

Reeves and Bednar (1994) illustrate that no common or broad definition of the

model of quality service exists. The ordinary definition conceived from the

conventional idea is that the quality of analysis as the observation of excellent

customer services quality is considered the customer’s feelings of the service

provided. The theory behind this definition is that the customer awareness of the

service excellence is to shape the service performance they experienced.

Bitner and Hubbert (1994) explaine the importance of quality. To them, the

quality is the consumer's overall impression of insufficiency of the organization and

the services. The researchers have tested the service quality of different organizations

by analyzing or comparing their service expectations with actual performance

(Groonroos, 1984; Lewis and Booms, 1983). The potential customer is of the view

that the provision of services is judged to be of standard or specification. (Zeithaml

40

and Bitner, 2003) and to satisfy the customers in an effective manner, it is necessary

to be familiar with the customer requirements and their feedback.

Meuter et al. (2005), Vargo and Lusch (2004)) develop a conceptual

framework for the innovation services in terms of customer satisfaction. They find

that the services have been produced jointly by the customer, i.e. a service innovation.

Depending on the type of service, an innovation may occur either completely or

responsibilities for the co-production may be between the company and the customer.

If the role is changing from the client in the co-production, their expectation of the

service is available as to how to change it. As for the customer satisfaction it has been

defined, that the service innovations should have an impact on the customer

satisfaction.

Kasper (1999) examines several alternative strategies for the achievements of

service quality and the value needed for the approximately implementation of a right

combination for quality service, services, people, business and technology and its

relations to the organization. Numerous factors have been recognized as a serious note

of harmony in labour productivity, especially the need for the constant interaction

between the employees and the external customers.

Heskett et al. (1997) present an evidence in support of what they call the

Service Profit Chain. Using the data of six companies they show that the companies

persuade to provide quality service to the loyal customers and employees. They argue

that the satisfied customers lead to satisfied employees and vice versa. They also find

that the companies whose customers are satisfied show an effective sales growth.

41

Hence, profit service chain has a key link in the working of a high-performance

system.

Boulding et al (1993) plans the model of service quality in line with the

customer types and their modernized observations of service quality and consistent

intentions. The apparent quality of service is a function of the current knowledge of

the service with current understanding of the past, potential dependent and modeled

the latest service transaction. Their model between prognostic and normative

perspectives postulates that these expectations and prospects have been the focus on a

Bayesian differentiation to be the updating of several consecutive service experiences.

2.2.1 Employee Selection

Berry and Parasuraman (1992) conclude the key objectives of the quality of

services to attract, develop, motivate and retain the qualified employees. A fascinating

concept is, as Heskett et al. (1994) argues the same and identical correspondence

among those issues that are addressed through the customer care.

Berry and Parasuraman (1992) note the most important link to internal

services. The quality of the hiring process is that some organizations try more

accurately these shortcomings. They devise principles and the base-line applications

depend on the request and the nature of work and employee productivity and

retention. They use these profiles for the recruitment of candidates. The desirability of

development, motivation, and retention of potential employees requires a clear vision

worth striving for. The employees need more touch inspiration to provide the

42

customer more than just the monetary advantages. The company needs watch as to

how the excellence of its staff affects the organization.

Berry (1994) states that a positive number of organizations that endeavor to

provide their employee’s reward, training and retraining on their petty mistakes. The

organizations have adopted the Human Resources skills and knowledge as practice

when they prefer research. To what the organization had acquired, is the ongoing

process. He adds that even if the employees are the trained ones or otherwise or

maybe they have actual type of training they needed or are otherwise.

Schneider and Bowen (1995) develop a conceptual framework for the

segmentation in the selection of customers coping with their resources. Customer

Identification which complied with the deadlines and with stable expectations enable

the organization to smooth out their conversion activities. Smooth transformations

and high productivity contribute to the competitive quality through lowering the cost.

Allow identification of the customer resources could call on an organization to define

a niche and develop customized products. An effective adaptation contributes to the

competitive quality as an organization could offer unrivalled benefits within a focused

market segment.

Valentine (2000) suggest that the geocentric staffing strategy requires of the

organization to recruit the best people in the world market for the key posts.

Recruitment achieves successes when the organizations understand the relationship

between person-job fit, person-organization fit and cultural differences, and recruits

accordingly.

43

Doty and Delery (1997) argue that there are countless combinations of the HR

practices which result in identical consequences in the organizational environment.

The most important human resource management techniques for a successful

organization are the environment model, communication, management, personnel

compensation, competence, training, career growth and creation of the team

development culture.

Ogilvie (1986) concludes that proper implementation of human resource

management practices is the real and tangible process towards development of the

commitments. Wimalasiri (1995) concludes that the impact of human resource

management system practices and encourages the commitment of the employees at

selection and placement, officer-staff development; staff awards, recognition and

retention of the employees. Alongwith a variety of human resource management

practices, it is shown that recognition and reward have a greater impact on the

relationship between the organizational commitment to specific methods like

evaluation activities, advertising policy, compensation and benefits, and emotional

ties.

Lado and Wilson (1994) suggest that to avoid any differences between the

individual and the organization. The management can achieve the required level of

performance in a complex process what staff could give to the organization like real

human resources and interpersonal contacts within the existing structures, and lower

costs for the training. Terpstra and Rozell (1993) add that the staffing process is

positively correlated with the organizational activities.

44

Knowles and Stewart (2000), Zhu and Dowling (2002) argued that the

organization targeted practically to potential employees' through hard skills and soft

behavioral skills. They revealed that the most common practice of HRM

professionals in the organizations to enhance the hard skills of potential employees as

compared to the interpersonal communication skills etc which is also must be

emphasized (Ahmad and Schroeder, 2002). While employees might be educated in

general terms and these methods is very help full for a shorter period of time whereas

the development of interpersonal communication skills, needed a relatively longer

period. The facts suggested effective communication, leadership, motivation,

analytical skills, organizational skills, and were one of the most important qualities

that, during the choice process requested.

Chneider and Schmitt (1986) postulated that the process to find the potential

employee in the organization and evaluated their assignment purely on merit

enhanced the motivation in the employees to achieve organizational goals in an

efficient manner. Recruitment and selection procedures were properly placed in a

professional way that the right person was chosen and to be developed for the right

job. Schneider & Bowen (1993) postulated that the recruiting and selecting the right

people and prepared them to effectively deliver their assigned work. Their

performance must be rewarded for the enhancmet of the productivity and it must

bring benefits for the organization. Schneider et al. (1994) proposed that the staff

recruited must be given detailed orientation of the different departments of the

organization and it would create a healthy environment for new assignees.

45

2.2.2 Employee Training and Development

Pfeffer (1994) finds that the employee involvement and empowerment, job

design including team-based production systems, diversified employee training and

performance contingent reward system are widely believed to improve the

performance of the organization.

Watson (1988) finds that a lot of successful employees’ training regarding

their job nature starts by educating the employees in human dealings and teaching

them technical skills and talents. As organizations attach an exclusive importance to

training, it is essential that there is a direct relationship between the internal and

external customers opinion of service excellence and that these plans are training

employees in the areas that are vital to the customer’s relation and satisfaction.

Kennedy and White (1997) find that the employees’ training programs within

the organization for the particular job are revealed to be significant in improving and

developing the level of service being rendered by an organization as the skills of

employees boost up with the particular training and ultimately it increases the

customer satisfaction and attachment with the business.

Becker (1964) argues that the employees’ professional training allowed them

to equip themselves with the new skills. In modern organizations, the employees with

innovative knowledge are the important resources of the organizations, and they are

mandatory to attain continually the new know how and skills to keep velocity with the

advancement of technologies. The training could endow the employees’ potentials of

46

accommodating the latest expertise and skills, and improve their capabilities. The

improvement involved the development of new ideas and thoughts, or ideas that could

be put into practice to solve some significant business problem (Mumford and

Gustafson, 1998).

Based (1997), Brophy (1998) and Martinsen (1993) All of them conclude that

different improvements emphasized different processes, also imposed different

requirements. In turn, through training, the employees could attain new know how

more quickly, and, thus could increase their improvement ability (Chi et al., 1989). In

addition, the employees who have wide and extensive skills and acquaintance may

develop more technological and scientific innovations (Mumford, 2000).

Schneider et al. (1994) sticks exclusively to the importance of executive

support of training, for the organizations that expect of their employees more offer the

quality customer service for the business process. The management has to make a

long-term commitment to training for the employees. They further suggest that The

management is under an obligation to support and maintain the employees’ training

programs. They also need mock-up the performance they expect from their employees

by the performance evaluation system of employees just to make sure if the

employees have become productive or still there is room for the further training.

Susan Meyer Goldstein (2003) finds that the employee development is an

important factor of the service strategy in customer summation called a high-contact

environment. The efficient service deliveries are the outcome of the quality of the

employees’ improvement and welfare including environment for work, training and

47

development, job design, and observation of the employees’ interests. The outcome

of the analysis points out that the service approach reflecting the magnitude of

employee development derives employees’ outcome, such as efficiency and

productivity, and the employees’ job satisfaction. The outcomes of employees due to

such activities are significantly correlated with the customer satisfaction and, thus,

with the business performance, but only some associations to the financial

performance are significant enough.

Delaney and Huselid (1996) categorize the human resource management

practices into the factors that improve the employees’ skills, motivate and inspire

them and also make arrangement design of the workplace. He, therefore, concludes

that at least the following four human resource management dimensions can be

acknowledged in his work: employees’ feedback, their training and development,

workplace design, and the pay system.

Jonathan (1996) derives a conceptual framework for the determinants of

training and the impacts of such training on the job turnover of both the private and

the public sectors’ workers. He finds that the provision of the organizational training

is positively associated with academics, capabilities, and former tenure at the job. The

results show only a slight proof that the organizational training minimizes the

turnover. There is a considerable evidence, though, that the training not financed and

supported by the management increases the job turn over. The results further indicate

that the employees’ training played a momentous and vital role for the placement of

right person for the right job.

48

Connors and Romberg (1991) study the employees’ involvement in a

qualitative programme. They find that the middle management and the first-line

supervisors controlling access to the quality circles and different teams and using

them to confer favour or exert discipline are of the vital importance. By restricting

access to the training the managers could use their higher levels of knowledge to

reinforce their power and status. The middle managers and the supervisors must focus

their efforts on the `highly visible' activities, such as producing complex and elaborate

charts rather than to facilitate the involvement of their subordinates.

Pfeffer (1994) proposes that the organizations trying to capture maximum

share from the market in the modern era of global business environment, they must

make appropriate investments in the human resources to select and engage such

employees as have better skills and capabilities than their competitors. He adds that

when the resource when become a source is called a competitive advantage, it must be

rare, valuable, unique and uninterchangeable. Thus, the fair HR practices in the

organizations can lead to comparative advantage by developing unique and valuable

human talent. He also holds that the human resource management practices, such as

employee’s conducive working environment, career development, growth-oriented

evaluation, and extensive training show a significant and positive relationship with the

organizational commitment which, in turn, give a significant business process and

financial results. These results of Pfeffer (1994) emphasize the role of human resource

development variables for strengthening the organizational commitment and suggest

that the human resource scholars and practitioners should further enhance the

commitment of policy-oriented organization towards development.

49

Anastasia and Budhwar, (2007) argue that the human resource management

personnel policies, training, promotion, benefits and allowances, employment

participation and health and safety are positively associated with the organizational

activities. Harel and Tzafrir (1999), Kalleberg and Moody (1994), McEvoy (1997) all

determine that the employee climate training for both development and improvement

of the staff productivity which improves their skills and abilities and also improve

their job satisfaction alongwith their commitment to the business process. Harel and

Tzafrir (1999) conclude that the career development and strengthening the

psychological contract motivates employees to have a continued commitment to the

organization.

Igbaria and Greenhaus (1992) find that income and opportunity for the career

growth is the positive association with the organizational commitment to employees.

They learn software experts and concluded that a key motivator for these employees

is the working conditions, financial aid career growth and development of officers’

training.

Osborne and Gaebler (1992) conclude that the engrave things merely work

superior if those are in the public organizations. The training programs have the

power to make numerous of their own decisions. Two assumptions are personified in

their suggestion, the public sector employees, if they have more prudence i.e., if they

are authorized, they would be as entrepreneurial as private sector employees were

believed to be. The second assumption is that giving more prudence to the employees,

regardless of sector, while continuing to monitor their performance, will make the

50

employees more productive by allowing the masses to generate better and more

efficient utilization of their working hours.

Kaufman (1992), Terpstra and Rozell, (1993), Bartel, (1994) argues that the

human resource management activities, such as training, participation of workers

compensation, business recruitment, personnel selection and internal labour market

have the positive relations associated with the company. They find that human

resource activities directly can affect the organization, training and quality (selection

and training), and indirectly through increased motivation (incentive system and the

domestic labor market). Generally it is, at least, of two ways through which the

training affect the results. First, training and skills related to tasks and staff

development, and second, increase staff satisfaction at their work.

Burke and Day (1986) note that the training affects the productivity of

managers positively. Bartel (1994) finds that the investment in the staff training

improves their performance. McEvoy, (1997) notes that learning affects the

organizational commitment, knowledge of the participants as well as the

organizational bases of self-esteem.

Ettington (1997) emphasize the need for effective group learning process.

Teams of people are vital, especially when one is performing a lot of skill, experience

and reasoning. The teamwork helps solve problems and improves the processes,

promotes creativity and originality.

51

Frese and Zapf (1988) study the stress and satisfaction of staff. They focus on

the organizational resources in terms of organizational changes. The resources include

the size of organizational changes, process work and the context / variable content.

The resources can be considered as the basic elements of work /organizations that

helps become a mediator or mitigate the effect of performance with respect to the

organizational changes on people. These resources have been the positive elements

and / or organizations that, according to the theory of balance (Carayon & Smith,

2000; Smith & Sainfort, 1989), can help offset or balance the negative elements. The

resources’ process changes include passive and active participation, quality education

and quality of project implementation process.

The employees of any organization are provided training mainly in two areas,

namely: personal development, such as the development of leadership skills,

communication skills, and work related training. Bowen & Schneider (1988) suggest

that in the service industry, most firms are used to educate their employees especially

in the field of human related issues to improve their skills for making good relations

with the customers. Schneider et al. (1994) proposes to manage trainings for the

employees to update their skills, thereby motivating them to achieve the

organizational goals.

Saraph et al. (1989) constructs approximately seventy eight points to analyze

the overall quality management practices which are further divided into eight major

factors for assessing the effectiveness of total quality management in an organization.

They name these critical factors: the role of departments of top management and

52

quality policy, the role of service quality, training, service design, supplier quality

management, management processes and the labor relations.

Ahire et al. (1996) develops a comprehensive twelve-points quality

management structure that has been marked as the supplier quality management;

performance of suppliers; customer orientation; use of statistical process control;

benchmarking; internal quality information usage; staff involvement; staff training;

the design quality management; empowerment staff quality, and commitment of the

top management.

Piore (1968) concludes that in the non-existence of a technological change, the

on-job employees’ training took place in the process of production. When a change

occurred, the training also takes place in the process of modernization. Analytically,

training, production, and innovations should be viewed as combined products of a

single business process. The relationship according to the findings, also suggest that

inequalities and discrimination among the employees are not likely to appear as the

job vacancies match by the workers’ unemployed but untrained to fill the vacant

posts.

Bac. (2000) concludes that employment associations are administered by

short-term partial conventions and normally engage on the job screening and

organization-specific training. They further conclude that a vibrant employment

affiliation with these features duly recognized as a prospective divergence between

the organization identical objectives to monitor and train the employees, when the

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training expertise is quite dynamic, the employer may have to sacrifice the

employees’ performance during the selection process.

Bishop and john (1990) postulate that the workers and firms also may share

the expenditure of the precise general training since the training may be poorly

signalled in the market, and, hence, raises the expected productivity with the current

employer more than in the rest of the market (since the current employer has an

advantage in assessing the productivity enhancing results of the training and the

quality of the match). Thus, while our model is formally developed in the context of

specific training, it is also applicable to the general training where information

concerning the effects of on-the-job training on the worker's productivity is

asymmetric across the employees.

The training may persuade the workplace performance direct by enhancing the

productivity per employee, or it is to be measured circuitously through its impact on

the pay and compensation according to the supposition that this is equivalent to the

marginal productivity of the employee.

2.2.3 Employee Rewards and Recognitions

Berry and Zeithaml (1998) find that the achievement of a business venture is

directed by the planned course of the organization towards its customers, the

competitors and the internal customers who are obviously the employees and the

relationship between these momentous components. The outside marketing addresses

the relationship between the organization and its clients. Interactive relationship refers

to the front-end employees of the organization and the business customers. The inside

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marketing or internal customers refers to the association of the organization with its

employees through its internal policies, Human Resource practices for the well being

of the employees and interaction methods including the expectation, matching

behavior and reward planning.

Hong et al. (1995) assumes that all the employees work in the hope of any

reward and benefit to one of them. He finds in his office that the applications and

benefits have a greater impact on the work of inspiration and, hence, the efficiency

and financial benefit programs offer the highest praise from both, managers and the

staff. There are no visible gap between the management and the employees in the

importance of employee benefit programs of various articles opposed to benefits

claims. Regarding the employees unmarried more than married ones, he finds that the

employee compensation and incentives leave a deeper impact on the performance.

The employees with different educational back ground perceived better position and

benefits and the results of the program have a greater impact on the performance of

the junior staff as well.

Hauser et al. (1988) postulates that the customer satisfaction encouragement

systems are gradually common in various organizations. They present clarifications as

to how and as to when the benefiting employees on customer satisfaction are

advantageous and present several proposals for improving the current business

processes. In their model they select only those employees who may have shorter time

horizons than the organization, such systems enable the organization to employ

customer response for observing perfectly as to how the employees assign endeavour

between the short and long terms.

55

They derive optimal reward systems for an equilibrium in which the

organization maximize their earnings, the employees maximize their effectiveness and

satisfaction, and the customers select purchase magnitudes based on primary status,

employees’ efforts and the cost. Their proper model demonstrates as to how the

confidence placed on customer satisfaction in an inducement system should depend

on the accuracy with which the client satisfaction is considered and the degree to

which the staff focus on the short term. They suggest recommendations for

improving the current practice include: previous customers, calculate present

customers, and prospective clients, products and services, measure satisfaction with

opponents, disaggregate contentment to reflect better the performance of employee

segments; and, when diverse customer section has diverse switching outlay or they

differed in the accuracy with which their contentment can be calculated, then measure

the segments discretely and allocate unlike weights in the incentive and inducement

plan.

Laffont and Tirole, (1996) suggest that bonuses are often used as a means to

motivate human resources to carry out better in order to achieve the organizational

objectives. They use the bonus per employee to symbolize the performance-related

inducement system in the organizations. They speculate a positive relationship

between bonus and incentives for employee and business efficiency. In other words,

the more bonuses lead to more efficiency and the organizations can achieve their

objectives in a productive way and vice versa.

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Lawler (1996) argues that a high level involvement is necessary for the fair

corporate practice, participative decision-making through the exchange of relevant

information requires for business and reward incentives that impacting to the

employees the right knowledge along with the required skills is essential to make

them informed regarding decisions that improves their individual work an created

staff high level of involvement in business process as a whole.

Mejia and Wellbourne (1995) develop a framework for studying the impact of

incentives/compensation on organizational performance and find that an improved

system of compensation may be a potential source of additional competitive

advantage. Schneider et al (1994) suggests that both physical and monetary incentives

should be paid to the employees by the corporate management in addition to their pay.

Thus, through the satisfaction of employees in all vehicles, making them satisfied can

be enhancing their innovation-oriented behaviour in relation to the clients.

Folger and Greenberg (1985) recommend equity in the distribution of justice

in the form of cash rewards, incentives and procedural fairness in promotions and

assignments to work in foreign countries for employees. Because of all these

discussions they conclude that the staff satisfaction and customer satisfaction are

closely interrelated. Zelterman (1988) contribute that the institutional attribute not

only affects the remuneration available to the employees but also the sequence and

identify potential future jobs. Marshal (1964) notes the considerable work shift by

workers of various industries due to non-payment of conducive and incentive plans.

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Lawler (2000) conclude that success or pleasure in connection with a team of

systems based on the award may be judged by the same criteria, the person or the

organization of the level of assignment. These criteria include the effectiveness of

linking compensation to the results of work and to minimize negative side effects, to

promote cooperation and obtain recognition of the employees and the management.

Locke and Latham (1984) suggest that the productivity is higher when

financial rewards are delivered to internal customers than when the same are delivered

to groups. More attention is paid to as to how the awards separate among the team

members. There are three general options: to award the same to all, to avoid the

exploitation of the workers, employee database with the number of employees

contribution for each basic attitude of the award or the amount of basic wages and

salaries.

Wolf and Zwick (2008) find that the employees’ involvement and financial

incentives and inducement are often honoured as an efficient way for increasing the

organizational productivity. They reveal that the employees’ job involvement lifts up

the organizational productivity, but monetary incentive scheme does not do so.

2.2.4 Work Design

James (2000), Mitchell (2002) and Beagrie (2003) find that for the employee

branding to transpire it has to be made a main business objective. These authors

believe that this starts with the senior management. The senior management has to

take the step for the recognized employees with core competencies, motivate and

encourage employee and design the best work place. They have to present a clear

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vision worth tracking with the career advancement which strengthens the big picture

to the employees.

Sulek et al (1995) examine the impact of a customer service involvement and

work designing on organizational performance. They carry out a longitudinal study

and examine the organization's accomplishment of a customer service intervention

which employs new service standards and customer comments system. They extract

that both the work place design and the customer service involvement have a

noteworthy impact with positive attitude on client satisfaction which, in turn,

ultimately affects sales and service performance. In addition, the customer service

intervention has a direct effect on the business process; however, there is no evidence

for a direct relationship between the work design and sales performance. The research

of Sulek et al (1995) provides a theoretical basis in helping the managements of the

organizations comprehend as to how to influence customer service for the improved

financial performance.

Arthur (1994), Guthrie,(2001), Vandenberg, Richardson, and Eastman (1999)

conclude that the sense of ownership and in-depth involvement work practices in

respect of a specific set of human resources that keenly focus on employee decision-

making authority, access to information, training and incentives is the key factor .

These methods have been studied for decades and they stand on the basis of their

potential to increase productivity and efficiency of the organization. Much of research

work shows that the combinations of these practices are directly dependent on

productivity and corporate financial performance.

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Miller and Droge (1986) postulate that the work design shapes the context of

work through traditional structural means and relationship of structure and human

agency.

Mueller (1980) identifies the need to consider the contextual factors when

implementing the job enrichment. An interesting and original point made in his papers

was that job enrichment (or job redesign in general) is perceived often as increasing

the job work load or job work pressure. The result may be the higher productivity

combines with lowered morale or no increase in morale, as the pleasure of increased

responsibility is offset by disliking the increased strain. Pointing out the potential

importance of the work load issue in job design is the main contribution.

Other valid but unoriginal points mentioned in the text pertain to the

contextual factors affecting the success of the job design projects, including the

existence of individual differences in the desire for and in response to the job

enrichment (not all workers want it); the advisability of using participation when

implementing the work design projects (most authors favour it, as much for moral as

for practical reasons); the need for upper management support; the problem of threats

to the self esteem of lower management inherent in any radical organizational change;

and the problem of pay adjustments after job redesigns.

Morrison et al. (2005) finds that the design of job has a high degree of control

over the participation of employees and it also offers opportunities for the

enhancement in career growth along-with the implementation of the employee skills.

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He adds that the design work and the alleged use of influence meditative skills to

work management, satisfaction is noted in the workplace.

Hackman et al. (1975) finds that the people in the professional job

developments certainly are more motivated and satisfied with their work.

Furthermore, Griffin (1989) examines one thousand count of thirty eight banks with

large investment company located outside the intervention design work, where

employees are perceived significant changes and these changes tend to distinguish

between overtime. In addition to this study, meta-analysis of characteristics models

(Fried and Ferris, 1987) find a broad support for the model and its impact on the

motivation, satisfaction and Love and Edwards (2005) also find that perceived work

demands that lead to control the labor and social support within the professional

design and performance efficiency of the organization.

No one is completely identified with the work, or puts in work to assess the

work entails and as to how to alleviate conditions. If people are included in their work

they spend much time and energy at work. He concludes that the employees

participating in the behaviour of the participation of closer cooperation with research

and working conditions. How an employee, working conditions is successful

experience and skills for work, they create a sense of compatibility and confidence in

their own competence. Because of these psychological feelings of success they can

even get more of their work in anticipation of great achievements and abilities.

Indeed, the work involved in the case of feeling a greater sense of competence and

expertise for further participation or work-ego investment has a leading role in this

work.

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Beer et al. (1984) find that competence, dedication, consistency and cost

effectiveness as the mediator variable. Becker et al. (1997), Becker and Huselid

(1998) proposed that the intermediate variables as staff skills, motivation, job

satisfaction and build link performance which in turn impact on profits and market

value and efficiency of enterprises. Boudreau (1998) finds an opportunity, opportunity

and motivation as mediating variables and functions of effective organizational

success. Ferris et al. (1998) proposes a model of social context, as defined in the

organizational climate, relationships with staff, and the behavior of the employees as

the intermediate factors.

Chadwick and Cappelli (1999) argues that the systems of HR practices may be

a higher performance through the development and use of key internal capabilities

that lead to sustainable competitive advantages that leads to performance.

.

2.2.5 Job Definition

Kleiner and Marie Gan (2005) argue that defining the job of the employee

helps the manger as well as the employee in decision making. The manger can get

help regarding the decision either the employee is the right person for promotion. The

employee gets guidance from the job description to know as to who in the

organization he would report to, what his basic responsibilities are and also provide

information for performance appraisal process.

Michalska (2005) state the definition of job depended on the person who

allocates the tasks within the organization. He additionally states that approach of the

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human resource manager will different to that of the direct supervisor who knew the

specifics of job. Therefore, it gives sense to say that special care is needed before

writing the job description for the employee. The job definition makes the

organizational structure clear and it also indicates the high organizational culture.

Wilkinson and Ackers (1992) point out certain terms such as employee

involvement` participation' and `industrial democracy' that have been used differently

by different writers, often with overlapping meanings. They suggest that the use of

this term `employees’ involvement' be limited to those practices `which are initiated

principally by management and are designed to the increase employees’ information

about the job and commitment to the organization.

2.3 Employees’ Job Satisfaction

Ferrin (2001) and Mooradian (2007) show that confidant and satisfied

employees have more positive attitude at work (employee satisfaction and

commitment), workplace practices (Knowledge Sharing, organizational citizenship

behavior and performance). Trust enables environment to promote cooperative

behavior, network-based appearances of the organization and resultant reductions in

conflicts, transaction costs, supports, hasty formulation of ad hoc groups and the

employment support effective responses to the dilemmas.

Matzler, Fuchs and Schubert (2004) state that the employees’ satisfaction

plays a vital role in the enhancement of productivity and customer satisfaction. To

understand better the driving forces staff satisfaction surveys, the authors use a model

of customer satisfaction and the employee’s satisfaction. The model earmarks three

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categories of factors that, in contrast to the effects on the structure of consumer

satisfaction, the main factors (being unsatisfactory), the lowest requirements

dissatisfaction if not fulfilled, but no fault will lead to customer satisfaction, if it

meets or may have been exceeded; Negative indicators for these elements are the

greater impact will be increased in overall satisfaction than positive results, the

excitement factor (satisfactory) are factors, customer satisfaction, if the application

does not cause dissatisfaction if not delivered. In other words, positive development in

these indications are the greater impact on overall satisfaction than inaction. The

anxiety factors surprise the customer and cause joy and Power (hybrid-factor), which

leads to satisfaction, if performance is high and dissatisfaction when performance is

low. In this case, the attribute performance, overall satisfaction the relationship is

linear and symmetrical.

Matzler and Renzl (2006) find that the staff satisfaction is considered one of

the main drivers for the internal service quality, customer satisfaction and

productivity. The subject of research is an important factor in the staff satisfaction. He

argues that the interpersonal trust (trust in management and trust of the colleagues)

has a strong impact on satisfaction and retention of employees, as a result.

Bailey (1993) Proposes a framework form employee satisfaction and their

contribution through employee productivity that, the participation of even a highly

skilled accomplished and motivated human resource would be limited if jobs are

structured and programmed in such a way that the staff who most likely know their

job better than other employees, do not have the chance to utilize their skills and

abilities to develop new and better means of performance on their job domain. Thus,

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the human resource practice can also influence the business performance through

stipulation of the organizational structures that holds up involvement among the

employees and allocates them to advance as to how their jobs are performed. The

multi -functional teams, job changing and quality circles all are examples of the such

structures.

Sergeant and Frenkel (2000) find the effects of supportive organizational

commitment. These variables in turn, show a significant effect on customer’s services,

and employee’s behavior. They explain as to how these variables are in terms of staff

abilities to provide best services and satisfy the customers. They find that to qualify in

the context of direct impacts on the employees, to satisfy the customers, some

variables are (other department support) more important than others (technology).

Some variables support, such as department have a direct effect of enabling the

employees to satisfy the customers, some have a mediated effect as the line manager

support, and a couple have reconciled to each other as a direct effect and technology.

The competence of the staff in order to satisfy the customers has been on a series of

generally supportive variables largely.

The idea that Davenport's measures spread in time and space and important

statement as it expands while working on one functional area. Indeed, the processes

most important works, such as processing orders and new product development

activities necessary to put into several functional areas. Those who stretch the borders

between the organizational units are called cross-functional processes.

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The interest in job design among students of the organizational behavior is

almost exclusively focused on the interactions between different task characteristics

and the employee satisfaction and motivation.

The employees’ satisfaction is the degree to which a company's employees

feel that their interests have been pleased continually by the administration. Schneider

& Bowen (1995) state that the employees of the organization with emotional orders in

the same manner as the business with customers, the organization has joined with

emotional contracts. Therefore, if the employee with the organization that they would

meet again the customer is happy and contributed effectively in the business.

Zeffane (2008) state that the satisfaction of the employees is an important

issue in the organizations and it can have drastic effects on the employees and

organizational performance. On a broad façade it is an essential part of the general

satisfaction among the working population. Low job satisfaction is considered one of

the main causes of turnover in the form of non-being, can take punctuality to have

been proposed. By comparison the more satisfied employees tend to be less distracted

and more committed. Therefore, they are to miss work less often and conduct more

mindful and expected behaviors. The main motive of the study is to resolve the

central paradox in the studies of the employee satisfaction and performance with

particular attention to possible differences between the genders.

Ostroff (1992) examines the relationship between the workers attitude and the

business performance. Ostroff finds that the aggregated employees’ attitude such as

job satisfaction and organizational commitment are concurrently related to the

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organizational performance which is extracted by numerous performance results, such

as the organization profitability and the employees turnover ratio. He carries out his

study across twelve organizational performance indices. When the unique

characteristics of the organization are statistically controlled for the employees’

satisfaction and other job-related approach continues to calculate many of the

organizational performance outcomes. The results are good for the employee job

satisfaction; thus, the organizations with more satisfied employees learn to be more

effective than the organizations with dissatisfied employees. He, thus, concludes that

the employees’ job satisfaction is a significant social process factor that promotes the

organizational performance and effectiveness also.

Schneider et al., (2003) reports the analysis of employee approach survey data

combined with the organizational level of analysis. He finds the relationship between

several facets of employees’ satisfaction and business finance that is a return on the

assets and market performance earnings per share. One of the more important findings

is associated with the overall job satisfaction and the performance criterion. The

results conclude that the fundamental directionality streams from the monetary and

market performance to the general job satisfaction. He argues that this concluding

result does not contradict the facts that there are some momentous associations

emerging from the overall employee job satisfaction. Yet, the reverse trend

relationships tend to be stronger in magnitude. Furthermore, the association between

satisfaction with pay and the performance gauge emerges as reciprocal in nature.

Arthur (1992) defines employee relations as commitment–maximizing

systems that enhance the employees’ participation and involvement in decision-

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making processes. Hammer and Stern (1986) examine that an increased employee

power and participation in the organization management leads to higher employee

satisfaction, and, thus, increased employee motivation, resulting in higher service

quality and employee performance.

Flynn and Saladin (2006) conclude that the Human Resource management

practices play a crucial role in customer’s satisfaction, business processes and the

organizational performance, as it is a tactical planning to excellence. He adds that the

employee's job satisfaction is another concern of the business excellence. He suggests

that the organizations should have to devise some strategy to focus on the internal

customers as much as to external ones. The relationship between employee and the

customer fulfilment performance has been confirmed by (Dahlgaard et al., 1998).

Eskildsen and Dahlgaard (2000) develop a basic model for the satisfaction of

the employees. Sincerely understood concept or the relationship between quality

management implementation and commitment of the staff, is also the subject of

investigations by the researchers. Brooks and Zeitz (1999) conduct a study on the

relationship between the organizational commitment and total quality management in

the hospitalization’s concerned staff.

2.4 Employees’ Retention

Reichheld (1993) emphasizes the importance of staff in his office and in which

he finds that it is the key to smooth business customer loyalty. The customer

contacted employees, not senior officials and the performance of services and

experience from the front line staff. He thinks that regular customers will increase the

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revenue and reduce costs (such as the need to win constantly new customers lower)

and, therefore, higher profits. It also means higher employees’ retention as a result of

complacency and satisfaction.

Ranaweera and Prabhu (2003) develop a model to observe the combined effect

of satisfaction trust and switching barriers on the customer retention. They argue that

this approach helps identify already deserted effects on the conservation and

maintenance of business processes. Contrary to some assertions contained in the

literature, they find that the impact of trust on the customer retention is weaker than

pleasure. However, it leads the relationship between trust and satisfaction to keep on

the important investigation, which is the maintenance of customer trust and a better

strategy, which lies as the satisfaction focus on the organized activities.

Quality Check Survey further provide that any such conclusions, even more

rewarding process of improving the quality of services provided may not be sufficient

to cope with the loss of confidence, with binding effect on the behavior and

expectations of the customers. They find that the transition barriers both significant

impact on the retention and understanding of the impact on the relationship between

the job satisfaction and the employees’ retention. Although this organization may be

dissatisfied even with the customers to save the high switching frequency perceive

barriers, he argues that the organizations should, ideally on a comprehensive strategy

to switching barriers, act as a supplement made for satisfaction.

Jones and Sasser (1995) find that satisfaction alone cannot provide a

continuous customer service and the satisfaction can be an important driver of trust

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and switching barriers can also tell on retention, both independently and in tandem. In

addition to the main effects of trust and switching barriers on the conservation they

are obvious, and in fact, supported by their rarely interactions.

Cronin et al. (2000) is designed to be a satisfied customer in order to evaluate

the emotions that reflect the level at which the client will be of value-added services

generated positive feelings. Guthrie (2001) argue that high involvement practices

increase staff retention and finally have a positive impact on organizational

effectiveness.

Gale and Wood (1994) explain as to how the customers make purchase

decisions between competing providers. The author claims that the customers buy on

the price they do not buy the products as usual. Interestingly, it is noticed that the

customers have learnt to think objectively about the costs in the form of preferred

attributes, characteristics and consequences of its use in situations using the product.

It is suitable for the banks to ensure close personal service to the clients who come

with big hopes. For customers who appreciate the convenience, most banks can offer

new products, such as electronic banking, with Button tone, account access and the

online banking.

The customer’s satisfaction is the subject of many discussions and the latest

trends suggest that the customer remains the focus, especially in services. Higher

satisfactions of the employees increases customer loyalty, positive word of the mouth,

customers loyalty and, hence, the profitability of the company (Szymanski and

Henard; 2001).

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Lawrence and Buttle (2005) develop a conceptual framework to analyze the

relationship between the customer retention and the outcomes in business process.

They examine the relationship between saving and a number of administrative

procedures and practices including the conservation planning, budgeting and

responsibility as well as the existence of documented complaints process. They find

that the differences in retention are correlated significantly with the presence of

recognized practice complaints.

Aspinall et al. (2001) consider the clarity and dimensions of the client

retention. They find that the conservation issues particularly in larger organizations

and those in the business-to-business markets are there, but relatively few

respondents, regardless of their served markets argue in favour of an agreed definition

of the customer retention.

Coyles and Gorkey’s (2002) find that it is important for the businesses to

focus on keeping the profitable customers, not all clients. They suggest that the

organizations need the segment customers who might be important for the

organization to focus on monitoring the overall cost down relocation customers than

customer retention. They note that many clients turn their behavior than defect, so the

previous normally account for bigger transformation in worth.

Coopers (2002) note that a poor management of client mix up is a main worth

demolisher and that the key to containment is predicted to turn away and erase the

rights of the clients. The rights of clients are those who make a significant

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contribution for achieving the organizational goals. The insinuation’s value available

to customers right and wrong to hold that the enterprises are asked to segment its

customers to maintain efforts in much the same way that management marks as

segmented to coincide with the efforts.

Manfred (2003) develop a model to measure the employees’ satisfaction and

perceptions of internal quality. He assumes the theory of the service-profit-chain to

demonstrate the association between the external customer satisfaction and economic

success and business performance .He suggests that the external service quality can be

achieved only after internal performance or by the satisfaction of internal services

.Moreover, he introduces the concept of an internal service indicator, and presents the

outcomes of study to assess the associations among the internal service quality, the

employees’ satisfaction and the employees’ retention.

2.5 Employee Productivity

Berry (1987) suggests that the organizations get loyalty by first being devoted

themselves. He links this deviation with the internal customer satisfaction, retention

and productivity. The service loyalty precedes the customer loyalty, and, therefore, it

is very important that the service organizations encourage their customers of their

commitment to a superior quality of service. The customer satisfaction is time-

oriented, and as a result it is unstable. The organizations have to struggle continuously

to grow and preserve their customer's and for this, the employee productivity is

important.

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Katzenbach and Smith (1993) emphasize the importance of teams in

supporting the employees’ satisfaction and the effectiveness of teams for

organizational performance noting that the teams provide a unique social dimension

that enhances the economic and administrative aspects of work which leads to the

employees’ productivity and ultimately the customers’ satisfactions.

Irene and Kaiser (2004) develop and estimat a model for the employees’

productivity and organizational decisions to restructure the workplaces that allocate

workplace redeployment to affect any boundless employees’ productivity. Their

general and flexible methodology allows them to take proper account of strategic

complementariness between the contributing factors and the workplace restructuring.

The results shows that transformation in human resource practices does not affect the

organizations' output elasticity significantly. They, therefore, apply the Kernel

density-estimation technique and demonstrate that for the organizations with

organizational change, the entire employee productivity distribution shifts extensively

out to the right if the workplace restructuring takes place, representing that the

workplace restructuring persuades an augmentation in the worker’s efficiency.

Brynjolfsson and Hitt (2000) identify the relationship between human capital

and workplace in an organization that, in turn, jointly improves productivity and cost

efficiency. He adds that certainly it is quite well known that the workplace

restructuring and reformation goes side by side with skill enhancement of labour force

in the sense that highly experienced employees and workplace restructuring and

reformation are considered accompaniments.

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Brayfield and Crockett (1955) point out that the level of job candidates may be

determined well by the level of employee job satisfaction. Furthermore, they state that

the role of employee job satisfaction can be an important factor in community

relations.

Stogdill (1959) emphasize the importance of job satisfaction as an independent

factor by theorizing, based on available evidence, that job satisfaction is related to

group integration or cohesiveness. In fact, he states that the survival of the group or

organization maybe dependant on the achievement of an optimum level of job

satisfaction. Productivity does not seem to be dependent on job satisfaction directly as

it has been shown by Brayfield and Crockett (1955).

Harter, Schmidt, and Hayes (2002) state that small but significant correlation

between a business unit's performance and profitability of the components made of

composite materials are employee commitment.

Guzzo, Jette and Katzell (1985) conduct meta-analysis of monetary incentives

and other motivational programs on productivity and physical output power. The

financial incentives, of course, have the greatest impact on all measures. For instance,

to pay four times is more effective than efforts to work more.

Judiesch (1994) conducts meta-analysis which shows that the individual

incentives to pay higher productivity by an average of forty three percent. The results

are even forty-eight percent in addition when the sample is a limited research in the

real organizations, while other measures have not been investigated. He added that no

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meta-analysis, the conclusions of other support measures introduced, come close to

this size of force.

Mobley (1982) Lawler and Jenkins (1992) find that one way in which the

system of compensation contributes to the effectiveness of the organization is to allow

the organization attracts more and more potential candidates and retains the key staff

for longer periods of time.

Delaney and Huselid (1996) argue that the system of compensation based on

best practices leads to Stogdill (1959) an emphasized and increased productivity in the

same manner that the system of income distribution and productivity contributes to

increased efficiency, through, among other things especially reducing absenteeism.

Pfeffer (1994) finds that the employee’s participation positively affects the

performance and increases the customer satisfaction and employee productivity. The

results also indicate that the profit-sharing plan is more effective even together with

the employees’ participation and involvement in professional organizations. Thus

employees’ participation system of enhanced staff motivation and their ability to

influence the quality and flow of work.

Ichniowski et al., (1997) observes the effect of innovative human resources

management systems for the service quality and productivity of the employees and

output line finishing of steel manufacturers and, therefore, sums over all its activities.

Due to employees sincere involvement the finishing lines that are the innovative

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human resource management systems improve the quality (and productivity)

significantly.

Crosby (1996) defines the quality as conformance to the requirements and

specifications which are after the needs of the client. He separates the different steps

to the zero-defect quality for improving the plan for the performance. The author

believes that the quality of service is the usual amount of standardization, reliability

and reliability at the minimum cost and in line with the market. He identifies many

principles of quality management to improve the productivity and efficiency of the

organization (Deming, 1986).

Brayfield and Crockett (1955) note that the relationship between the staff

satisfaction and productivity is not obvious. They find a high degree of satisfaction

with the high and low productivity as well as accompany the contrary low satisfaction

with accompanying high or low productivity (performance). Unlike other studies this

one has shown that the satisfied employees work in a close contact with the

organizations and individuals, such behavior pays. (Judge et al., 2001; Spector, 1997;

Ostroff, 1992). Satisfaction of employees’ is considered as dependent variable and it

varies on the quality of working conditions and other factors on the one hand.

(Oshagbemi, 1996). While the other hand, it can be assumed that among the

independent variables, many affect, such as irregular visits and work productivity

(Kinzl etc.., 2004). Despite the differences in the amount of research it still shows

most of the states that staff satisfaction has led to a certain employee behavior.

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Barrett and Connell (1998) find that the employees have job training for a

greater impact on the payment of employees and productivity as a joint training.

Mason et al. (1996) finds that both qualities which are either value added or product

quality have been improved, where the staff have been trained to assume the charge of

many production processes at once.

Cosh et al (1996) finds that the formation of a strong and significant effect on

the growth and employees’ career advancement, when it has begun regularly rather

than temporarily. He leads a study of the small organizations but it does not

generalize to large organizations.

Green’s (1997) despite it clear theoretical expectation that the improvement

will be the skill level of operational and guided by training to increase productivity for

a given amount of invested capital, currently there is a little convincing evidence

available to support such statements. However, it is recognized that certain forms of

training were probably cheaper as the external training for the skilled workers it

seems to have led to greater gains as internal training or paid to unskilled workers.

Appelbaum et al. (2000) find that the high-performance system works in a

company wherein it is easier for the non-executives to contribute in substantive

decisions. The high-performance work structures also require the promotion of fair

human resource practices that expands the capabilities of the employees and gives rise

to the employees to use their skills in the decisions.

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Khawaldeh and Chapman (2002) argue that the Total Quality Management is

a must to gain a decisive approach to maintain competitiveness and it is to develop a

means for monitoring the transactions on its efficiency and performance. Today,

especially in the service sector, Quality Management in totality is used as an

influential tool to enumerate the mode of conducting the business.

Philips et al., (1983) holds that the effective plan for the strategic management

of service quality and better quality has been confirmed to contribute larger market

share and return on investment and increase in productivity and the area of strategic

and organizational performance.

Judge et al., (2001) is of the view that a good working relationship also

contributes to the environment which increases the competition benefits enhanced by

the positive employees’ attitude, their engagement and the customer satisfaction. He

adds that an organization affected by the employees’ attitude, but influenced the job

satisfaction, the affected employees, productivity and performance at work is the

successful in it. Judge et al., (2001) postulates that the importance of job satisfaction

stems from the research concept that the happy workers are the more productive ones.

2.6 Organizational Performance

Carr (1990) points out that it is achieved only when the front employees are

treated in the same way as the customers. Therefore, it is the duty of executives,

managers and the support staff back will be required to help the front-line staff in

their mission to end-users and the customers who will not only build trust in the

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organization but also inspire the organizational performance and secondly employees

within the organization.

Groenroos (1981) concludes that the internal marketing creates for the

employees’ job satisfaction, relevant information to job losses in an internal

environment i.e. customer confidence and satisfaction of support among the

employees. It is noted that Human Resource management activities may be able to

affect the organizational performance, either directly or indirectly on human resource

management results and the obvious question that has arisen as to whether the Human

Resource Management activities (policies / practices) are important. Whether the

Human Resource Management has been associated with the organizational

performance.

Jones (2000) emphasizes the importance of the organizational learning and to

implement the performance as a process in which managers try to increase the human

capacity, to understand the organizational practices better. Relationship with the

management can improve the organizational decisions and the organizational

performance.

Batt (2002) argues that high performance work environment often has a

significant impact on the business performance in the customer service, such as high

level of safety practices of the participating staff members help develop the following:

specific business human capital, organization products, customers and business

processes, interact and communicate them effectively. The organizations that compete

in providing services commonly use approach, relationship management, in which

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they try to make long-term relationship with the customers by providing the quality

services. The relationship between the HR practices and business results is built to

improve the dissemination and use of HR practices correlate with the improvements

in the organizational work.

Berry et al. (1990) holds that the two interrelated but different aspects of

climate are defined in terms of customer satisfaction regarding the perceived internal

service quality. The first one is the supportive and rewarding environment for

providing quality services such as training, sufficient number of employees,

equipment is working properly, manage recognition and rewards. The second is a

strong climate for human resource management, which appears satisfaction or morale

of the employees.

The determinant of the human resources development environment represents

the top issues of integration and value for personnel and environment friendly work of

harmony, openness and freedom to experiment, confidence, team spirit, and the

attention to welfare. The quality orientation in terms of customer communication,

improve the product quality is measured and improved by monitoring and feedback

data collection for quality and feedback after the labor to make the sense of pride in

good quality. Developing the human resources practices include: human resources,

advanced evaluation and promotion, career planning and improvement planning

(analysis of the role of analysis and assessment of benefits), improvement (education

and training, performance management and development and other mechanisms of)

self-renewal system (role performance, organizational development and practical

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studies) and human resource development, (organizational values, recognition and

promotion, information and empowerment).

Numerous models of the Human Resources Development (HRD) have

identified a number of applications that are, if they follow, probably on human growth

by the company to add its competitive advantages (DeGeus, 1997; Currie, 1998;

McCracken and Wallace, 1997, Willis, 1997). These models are basically support that

investment is needed in human resources organizations and individuals for several

reasons in order to create and maintain this resource.

Prickett (1998) and Holbeche (1998) show that ninety percent of the

employers expect of the employees to help their development. They find that one third

of the sample individuals are with high potential, in case they do not escape their

skills. The organizations have a strong opinion on investing in the human resources

for the business excellence.

Singh (2003), conducts research in various organizations, large domestic

industries from automotive and mechanical engineering of iron and steel, financial

services, information technology, pharmaceutical, paper and electricity, etc. To him

the main objectives are to implement the HR practices in the organization and to

observe the degree of communication 'connection between HR practices and

efficiency.

Losey (1999) and Spangenberg et al. (1999) report that the organizations are

trying increasingly to refine through workplace the learning and development of

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human resources approaches for the development of skills for staff, quickly and

flexibly considering the business requirements. Holbeche (1998)) further concludes

that one third of their sample of high potential employees will leave the organization

if they can improve their skills as per requirement of the profession. The organizations

also consider that investing in human resources development is very important.

Barnes and Cumby (1995), Berry et al, (1985) argue that the search for the

improvement of the internal service quality to the effort to house an increasing

customer satisfaction can significantly contribute to the organizational performance.

Carr (1990) concludes in its study that the quality of service can be achieved

only when the front employees are treated in the same way as the customers.

Therefore, it is the job of managers and support staff to help the fallen front-line staff

in its mission to the end user and the customer.

Crompton et al. (1987) indicates that an internal action program is a

prerequisite for the successful external marketing. If the external clients have a better

service in the shape of intense internal marketing efforts they will receive more of

what you are selling or rendering.

Robinson (1993) is proposed that the existing HR thought that you could not,

manage humans, since it could manage things, so they have led people to believe that

it could manage the supply chain assumes that one thing if it really was, it was a

collection of individual people and processes. It needed to lead these people and

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integrate their activities on a common goal. The goal was to improve the sustainable

profitability of your entire supply chain by improving communication and teamwork.

Farkas and Tetric (1989), Lance (1991), and Mathieu (1991) all suggest that

the causation between commitment and satisfaction runs in both directions. Mathieu

(1991) and Lance (1991) both suggest that the relationship running from satisfaction

to commitment is much stronger than the relationship that runs in the other direction.

Vandermerwe , Gilbert ( 1989) and Marshall (1991), and Miller ( 1992) all

find that a market driven system that matches the internal services to the user’s needs

should result in competent internal services to the user’s need should result in

efficient internal exchange among the internal users of the organization (members

and departments). They link the concept of internal customers with the employees of

the organization adding that the winning companies that deliver services to the

internal customers with the same dedication in fact they do so to the external

customers.

Harris (2000) concludes that the experience the customer received is critical in

maintaining the constant relationship between the organization and the customers.

The relation binding the employee and the client is viewed as significant if not more

vital than the service being rendered (Parasuraman and Berry1992). The value of the

overall end product is directly associated with the overall quality service the

organization renders.

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Ensman (1993) states that organization has two types of clients, the internal

and the external ones. The external clients are those who ask for service whereas the

internal clients are the employees, the associates and the colleagues from other

sections in the organization. The quality specialist states that by providing these

internal clients with exclusive service will increase the employees’ productivity, his

efficiency and job satisfaction in the long run.

Parasuraman et al., (1985); Solomon et al., (1985); Crosby and Stephens

(1987), and Gronroos (1990) conclude that the service management literature has

highlighted frequently the consequence of the human element in the delivery of

superior service. The service constancy is a service, i.e. the organization’s dedication

to its clients that is commenced by the organization for the growth of a robust

association with the client.

Gerson (1998), Neumann and Giel (1995) acknowledge that the customer’s

satisfaction is directly associated with meeting and exceeding the customers' potential.

In turn the service provider must be conscious of what the specific customer needs.

The value of the information a company receives has to be pertinent and believable in

order to employ it for the change agents of the organization.

Kennedy and White (1997) conclude that considerations of the customer’s

expectations are important for a service organization to achieve its goal. To unearth as

to what the customers expect of an organization is a prerequisite for delivering the

better-quality service. Studies define the customer potential in many ways. One of the

most popular ways is to evaluate the customer’s prospect by using the rater technique.

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These methods classify the customer’s service expectations into five overall

dimensions: responsiveness, tangibles, reliability, empathy and assurance.

Berry and Parasuraman (1992) find that team work empowers the employees.

Several people working together as a team can present a comprehensive service. The

employees get assistance from discussion with one another regarding as to how they

can gratify the composite needs of the customer. An expert group of the colleagues

who help one another out and achieves together also can help offset the approach

associated with job dissatisfaction, given that the customer service can be considered

as severe, often frustrating, and somewhat of a "burnout" position.

Guimareas (1996) finds several factors in respect of work related settings. This

study includes characteristics, job involvement, satisfaction, satisfaction, career and

organizational commitment. The same author describes the job participation in the

sense of an individual ego to deal with the work, i.e. the extent to which the individual

identified psychologically with the job. Also, encouraging positive or emotional states

of their own work or career is led by positive assessments. In addition, it encourages a

sense of ownership of the organizational, a sense of attachment or loyalty of the

employees to the organization. Even after Landy et al., (1993) the attitude of the

employees shows that the job satisfaction and employee’s commitment to the

organization are interlinked.

Lincoln and Kalleberg (1990) find a stronger association between the lagged-

behind satisfaction and commitment than they find between the lagged-behind

commitment and satisfaction. From this, they suppose the direction of causation. The

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evidence presented in this group of studies is consistent with the ideas at the centre of

the job-design literature. Of particular note is the idea that creating satisfying jobs for

the employees will improve their commitment to the organization, thus reducing

employee turnover, in turn increased commitment may also improve customer

satisfaction, and generates repeat purchase behaviour.

Farkas and Tetric (1989), Lance (1991), Mathieu (1991) all suggest that the

causation between commitment and satisfaction runs in both directions. Mathieu

(1991) and Lance (1991) both suggest that the associations executed from satisfaction

to commitment are much stronger than the relationships running in the other way. The

relative size of the links between commitment and satisfaction reported by Mathieu

and Lance is actually very similar to the findings of Lincoln and Kalleberg (1990),

though the interpretation is quite different.

The control of total quality management practices are an important aspect of

successful participation of employees in the processes that leads to the development

of the organization. Using the total quality management practices can create your own

which encourages the employees to work together in companies, for the development

of personal responsibility, and increase the sense of achievement in the work tasks.

Guimareas Guimareas (1996), Luthans, (1995) Kanungo (1982) find that the

TQM is an important aspect of empowering employees to be more involved in their

work and participated in the total quality management decision-making operations.

The total quality management techniques lead to the maximum contribution to the

employees at all levels and the employees have a wide variety of tasks and it is

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considered that a large variety of people in the workplace feel more involved in their

work. High levels of greater participation enhance job satisfaction, career satisfaction

and organizational commitments, which in turn lead to the business process

excellence and organizational effectiveness.

Czaplewskim, Ferguson and Milliman (2001) find that the in-house marketing

is one of the main ways to get, create, promote and retain qualified personnel and

energetic employees who in turn offer a high quality services.

Beagrie (2003) argue that the internal marketing can motivate the employees

to change their behavior and thinking in order to achieve the organizational goals.

Many authors also refer to the concept that the internal marketing processes of

viewing employees as customers, providing a vital link in the implementation of any

marketing strategy to serve the organization better (Drummond and Ensor, 1999).

Mullich (2003) suggests that the human capital branding can acquire only

when the employees can see that their efforts are consistent with corporate goals of

the company. He claims that the people talk about the coordination of corporate,

departmental and staff purposes, but few actually do it.

Green, Subrata and Whitten (2007) argue that integration of the organizational

culture of customer service and its care is a very important principle, and with efforts

to the needs of clients through market point allows the organization to provide quality

services that meet specific customer needs.

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Gummesson (1993) finds that multiple perspectives approach consists of four

models of service associated with each one of the four clusters namely, customer,

contact personnel, support staff and management. He finds that all of these and

another one is that the owners should take it in account/note. All the five groups hold

different opinions, but everyone is relevant to the whole experience of the service life.

Berry and Parasuraman (1992) identify the main objectives of the internal

marketing as attracting, training, motivating and retaining qualified employees. The

intriguing approach offered by Heskett et al., (1994)), which offers that a one-to-one

association exists between the problems that must be addressed on the front customer

service to those who deserve a special interest in the practice area of employment.

Rayton (2006) finds the relationships between the employees’ satisfaction and

their commitment to the organization and claims that it still seems little different

between these two important employee relations. To be aware of these approaches is

important as they leave a serious impact on the business efficiency and these

approaches can be influenced by the human resource policies and practices.

Berry et al., (1990) points out that as the customers' sole judge of service is the

quality, the organization can build a strong position to service quality if they meet

regularly for potential customers.

Othman and Owen (2001) use the model to assess the importance of service

quality in the Islamic banking sector. He finds a positive relationship between the

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service quality, satisfaction and services offered the research proves the validity of his

model to assess the quality of services in Islamic banks.

Oliver (1980) finds that satisfaction is a function of the original standard,

working in the organization of some perceived discrepancy from the top point. To

understand better the original Bolton and Drew (1991) defined customer satisfaction

or dissatisfaction as a dissonance function arising from the discrepancies between the

expectations and the actual performance.

Anderson et al. (1994) present two determinants of customer satisfaction, two

broad classes of the user’s experience recognized in the literature (e.g., the cost of

specific knowhow and experience in combination If the agreement refers to the

experience, the customer’s satisfaction is defined as to what you address after the

specific assessment of purchase. In that case of so-called "expertise, the customer

satisfaction has endured as a result of its overall rating of the customer acquisition and

payment of overtime consumption experience.

Parasuraman et al. (1991) finds the effect of the four factors of the customer

expectations. They are word of the mouth (or reputation); personal needs; past

experiences, and external communications (including direct and indirect messages

passed from company to their clients as publicity, the company brochure, the behavior

of the employees and the cost of production in a service company.

Oliver (1980) assumes that the potential customer is under the influence (1)

product, (2), wherein the product or service is sold including the content of messages

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coming from the staff and community helpers, and (3) the individual characteristics

including persuasibility and distorted perception

Tse and Wilton (1988) present three ways to determine the expectations of the

clients: (1) performance is fair only when it is according to the normative standards of

quality based on the implied relationship between the human costs / investments and

the expected goal. In this case, expectations are likely to be affected by the price paid,

the efforts made and the experience of the product. (2) Perfect performance products

for optimal performance product perfect in consumer product scenario. This potential

can be based on previous experience with the product, the message received from

advertising or word of the mouth communication. (3) Expected product performance

is likely the performance of the product. These expectations affect the average

performance of the product and advertising.

Czaplewskim, Ferguson and Milliman (2001) find that the internal marketing

is an important way to obtain, develop, motivate and retain the qualified and energetic

employees who, in turn, provide a high quality service.

Drummond and Ensor (1999), and Beagrie (2003) find that the internal

marketing practice motivates to change their behavior and thinking for achieving the

organizational goals. They present a new concept that the internal marketing

progression views the employees as customers, providing an essential link in the

implementation of any marketing strategy to serve the customers better by an

organization

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James (2000), Mitchell (2002) and Beagrie (2003) argue that it often happens

that we introduce some new branding to achieve the key business objectives. The

authors are of the view that it must be switched on from the senior management. They

have to offer a clear vision and it should be followed by the same spirit which

strengthens the overall picture of the employees.

Kasper (1999) examines various methods for the service quality enhancement

and lays stress on the necessities of a right service, system, people, and technology.

Many characteristics are recognized for attention in the harmony of services, mainly

the need of incessant relations among the front line employees, the back line

employees and the external customers. He adds that delivery of the proposed service

to the clients reply on the extent of incorporation of values, standards and

performance of the employees in an organization.

Gemler and Bitner (1994); Schimt and Allscheid (1995) find that without

Integrating the service provision process across the whole organization we cannot

attain the strong customer oriented approach through the employees. The importance

of the value, service and analysis of intra organizational value stream is getting a

growing concentration in the banking sector. The banking industry has understood the

procedure of service delivery integration with the help of efficient intra organizational

communications.

Juran (1988) argues that the center must provide the product attributes such as

accuracy, knowledge, timeliness, completeness, kindness and courtesy. In addition, all

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documents and services should be free of bugs. Hayes (1992) stresses the need for the

internal comprising accessibility, efficiency, timeliness, completeness and

convenience. Albrecht (1993) finds that lead in the internal and supporting units is

successfully entering the required value for the internal customers.

Kuei (1999) describes through a model that the communications between the

internal organization and the process are duly planned. He has conducted research on

the proposed model. It is clear that the quality-oriented and professional environment

observes one of the most important factors to determine the internal organization of

service quality. The problem of reducing capacity to serve the clients’ best interests in

mind and to have the trust of clients with education also requires the inner quality of

service.

Huselid (1995) examines the relationship between the systems of high

performance work practices and the organizational performance. The results are based

on a sample survey of nearly a thousand organizations that point out that these

practices has statistically the significant effects on both the middle level employee's

results which ultimately leads to an improved quality of services and short and long

term measures based on the organizational performance. He adds that to support high

rates of labor practices has an impact on organizational performance.

Vandermerwe and Gilbert (1989) find the targeted customer system that is

responsible for the internal service users' needs. The result should coin the internal

relations between the various departments of the organization. Thriving system of the

internal customer service is one of the most important standards offered wherein all

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the components of the learned opinions of the senior and junior staff adds value to the

sequence of the most important customer for the treatment of major improvement in

the quality as well as the internal clients.

Bowen (1996) describe as to how the human resources can be positive to the

satisfaction of internal customers such as the line employees and the external

customers having an ultimate influence and impact on the organization's financial

performance and credit quality. He endows with the evidence that has been the

satisfaction of internal and external markets combined.

Vandermerwe and Gilbert (1989) argue in favor of the client-oriented systems

that serve as the internal services to their users. The outcome should be well-

organized for the internal interactions between different organizational members and

the business units. A successful internal customer service system is a central concept

for the Total Quality Management initiatives which bring home to all employees to

think of the colleagues and to the chain of value added as important customers.

Tsui and Milkovich (1987) identify four segments of the HR departments:-

line-management; professional employees; executives, and the employees on hourly

wages. These segments show differences in their expectations of service in the

Personnel Department. In these works, Tsui (1988 and 1990) also find differences in

various internal sections a significant impact on the effective human resources

departments. The fact may vary for different segments of the consumer's domestic

implications for the development of successful strategies for internal support customer

segmentation on priority.

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Albrecht and Zemke (1985) state that the service quality of those who are at

the forefront of contact have to make this in a position or breaking the customer

perception of quality. They are important elements in rendering the service process to

ensure the customer’s delight. He concludes his discussion with the results from the

service management model.

Schneider, (1980) believes that internal services significantly are concerned

with the internal customers’ good service and they are angry when institutional

constraints, political or neglect of their ability foils to obtain provide the quality

services. He points to several factors like the gap in the service quality of domestic

customers, the material, were reliability, customer service, trust and sympathy that are

to be determined.

Conrath and Migne (1990) reported that the second most important part of

customer satisfaction for the overall quality of service, is the game between the

expectations of the users of IT systems and the services. Rushinek and Rushinek

(1986) stated that the Commission has the expectations of the users for a strong

influence on the overall satisfaction.

Krishnan (2000) discusses a full Bayesian analysis of the data from the leading

financial services the customers have received. The research concludes that the

satisfaction with the products is a key driver of the overall customer satisfaction,

where the quality of customer service with regard to the financial statements and

services provided through various channels, such as information technology enables

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delivery organizations are extremely important to the entire determined satisfaction.

Though, it has been pointed out that their analysis of the impact of these aspects of the

services varies greatly about the customer segments for the management to take

decision easily about as to how to deliver the financial services to make better

influence for the customer’s satisfaction.

Heskett et al. (1997), find that the cost is for the preservation of existing

customers by improving the products and services that are perceived as important

significantly lower than the cost of food for the new customers.

Hua (1999) develops a model whereby it has been proposed to exchange ideas

between internal organizations and the analyzed processes they served through. It is

observed that the perceived quality-oriented culture is one of the most important

factors for the analysis and definition of the internal organization of the service

quality. Problem solving must keep the customer interests in mind, and instilling the

confidence to identify the customer as well as the variables for determining the

internal service quality.

Battisti et al., (2007) performs an assessment between the external and internal

image of the organizational structure. He specifies a worldwide skewed measure of

satisfaction. He performs a comparison between the customer’s and worker’s

satisfaction. He illustrates the results of a study which is conducted on two subject

samples (customers and employees).

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Thompson (1996) finds a critical ingredient for the development of employee

attitudes that contributed to the organizational success. The employees who believe

that their supervisors are helpful enough they tend to be more dedicated to their

organizations than those who do not perceive their managers as the supportive ones.

Johnston et al. (1990) and Church (1995) examine the behaviour of the

managers in an airline services organization and find that the results have

demonstrated the importance of building supportive relationships with the employees.

Walton and Dutton (1969) identify the enhancement of constructive

interdepartmental collaboration and the minimization of the conflict between

departments as a primary determinant of organizational success.

Neville (1996) argues that the existence of teamwork across the internal

boundaries of an organization is an important determinant of the service quality.

Porter et al. (1974) finds that job satisfaction and commitment are empirically

distinct concepts. He further suggests that the job satisfaction is associated with

aspects of the work environment and, therefore, will develop more quickly than

commitment which requires a global assessment of an employee’s relationship with

the organization.

Williams and Hazer (1986) argues that the dynamic nature and rapid onset of

satisfaction suggests that it is a cause of commitment, but they concede that this has

not been established conclusively

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Hayes (1997) suggests some quality dimensions which generalize across many

services organizations, but some pertain only to specific kind of services

organizations and it is necessary to know the quality dimensions to be capable to build

up measures to evaluate them. He explains two methods of recognizing the significant

quality magnitude of services: the quality dimension development method and the

critical incident method. The first method uses different sources of information, such

as attitude of the contributor .The other method is to get information from the clients.

He further finds that the process of recognizing client’s perspective started with

determining the client’s requirements.

Fey and Ingmar (2001) find that investment in human resource management

practices can greatly assist the organizations in improving productivity. In addition,

various human resources management techniques for staff job satisfaction are

significantly associated with the organizational activities. Only some degree of

support, however, is found in the assumed link between efforts to bring the human

resources management practice with the strategy of the organization and ancillary

works.

Most studies find in performance-based awards as one of the best human

resource practices ( Arthur, 1994; Delery and Doty, 1996; Huselid, 1995), and the

study Delery and Doty (1996) recognize performance-based compensation, as even

only strongest predictor of effective work.

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Based on the theory of expectancy by (Vroom, 1964), it can be identified that

if an organization offers awards and incentives to selected personnel in the

organization, this fellow is more likely to hold such a way that will encourage and

reward. However, it is important for the performance-based remuneration system to

consider and strengthen the human resource management practices.

Gerald and Michael (1989) examine the extent to which justice in the

workplace and job satisfaction predicts satisfaction over the staff and corporate

management. They find that the workplace fairness in terms of procedural systems

provides an equitable distribution system of complaining. They find that a number of

procedural systems and impartial judiciary that are provided grunt environment are

strong determinants of satisfaction of employees with a combination of work while

the belief in ethical job organizing is the strongest determinant of satisfaction with the

administration of the employee.

Lerner (2003) finds that restrictions and limitations in the work of staff, have

significantly negative consequences related to the employee’s productivity. The

employee’s evaluation of their job limitations extends significant alternatives for the

economic load of the health problems. Ganzach (1998) finds that the relationship

between their actions and staff job satisfaction is considered in which the actions has a

direct but negative impact on the staff job satisfaction, an indirect but positive effect

by the agency staff and the complexity of the interactive effect of the complexity of

the employees.

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Lawler (1981), Heneman and Schwab (1985) suggested that employee benefits

and incentives satisfaction function discrepancy between the two performances. The

first payment of staff perception regarding employee thinks he should get. It features

perceived contribution to the work, perceived work demands, and perceived inputs

and outcomes of referent others. The person may feel that he or she should receive

generous retirement from a long and continuous work, in possession for the

organization. The second concerns the perception of benefits and incentives in

January it seemed that he or she receives. It features real benefits derived benefits of

history and other alleged benefits assistant. For example, people may not know about

their health benefits, because one would not have to use them.

Katzell, Barrett and Parker (1961) show that the employee’s job satisfaction is

associated with the small town culture not the city culture. They find that job

satisfaction of the employees is likely to be lower in the divisions of the company as

characterized by the large business groups, trade unions and much of male workers,

high wages and a great city location. The correlation between these factors and

satisfaction in units is negative. Tested by Katzell, Barrett, and Parker indirectly the

hypothesis because as it shows that the job satisfaction is usually lower in sections

that one in the large work groups.

Krishnan (1999) studies the drivers of the customer satisfaction in financial

services, by analyzing the data collected from customers top financial institutions. His

approach allows him clearly to identify the missing data and the quantitative

measurement along-with the impact drivers of customer satisfaction throughout the

population. He found that satisfaction with regard to the products offered by the

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organizations of the main driving force, with reference to the overall customer

satisfaction. The quality customer service with respect to the financial reporting and

services delivered through various delivery channels, such as information technology

that contribute to the organization and traditional outlets are also important in

determining the overall satisfaction. However, his analysis shows that the impact of

these factors in services may differ substantially from corner to corner in certain

segments.

In order to promote his directorial work, he discusses as to how certain

technological characteristics for the structuring and financial services can be effective

for improving satisfaction in connection with the products and services.

Clemmer and Schneider (1996)) conclude that the customers evaluated

services are found in three aspects: results, benefits customers receive as a result of

this battle, order, organization policies and practices which lead to meetings and

interaction, quality of interpersonal treatment and communication during the

meetings.

Schuler and Harris (1992) argue that the organizations should consider

customers as partners for the sake of success. The Partnership perspective is a useful

conceptual framework for analyzing the clients' competitiveness and quality. Borys

and Jemison (1989), Ring and Ven (1992) suggest on the basis of work in strategic

alliances that, the client node probably bases on respect and trust that allows the

customers to provide guidance, ideas and technical assistance, customer choice and

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improved quality. As with other voluntary alliances, though, a trust based-cooperation

is complicated and vulnerable to exploitation in a positive manner.

Gersuny and Rosengren (1973) argue that the different roles of the client need

a new relationship of interdependence and more complex social networks that cross

the boundaries of traditional organizations. They identify four different roles for the

clients: (resources), (b) the employee (or co-producer), (c) the buyer, and (d) the

beneficiary (the user).

Fornell (1992) highlights several key benefits of high customer satisfaction

with the organization and describes as to and as to how when the customer

satisfaction is more, for him to choose to increase the loyalty of existing customers,

lower price flexibility, keep existing customers from aggressive and hard work

resulted in more low cost of future operations that will not only reduce the costs of

failure but also attract the customers cheaper cost and ultimately improve the

organization’s work. The organization’s loyalty, as hidden assets, should be reflected

in earnings of the organization with the view to guarantee the stability of future cash

flow.

Ryan, Schmitt and Johnson (1996) suggest that the average level of work /

organization, positive ideas about team stress and lack of finance companies are

associated with the higher market share, they reduce debt, crime, and the number of

credit losses.

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Koys (2001) conclude that the level of staff satisfaction / commitment of local

financial institutions especially banks is directly dependant on the profitability. He

also believes that the retail sides of financial institutions, strong ideas about climate

quality services are associated with the enhanced organizational financial

performance.

Allen and Grisaffe (2001) follow the idea of service and find the clue to made

a significant impact on the leadership circles, and it is, therefore, important for

professional and organizational psychologists to examine them critically. Until now

most research has considered the service profit chain of two-dimensional relations

between relevant variable.

Harter et al. (2002) finds that this event has an involvement of the employees

associated with customer satisfaction. Overall, it turns out that the successful

experience in the workplace is often associated with a favorable experience for the

customer.

Pugh (2001) suggests that the bank employees have shown positive emotions

to the external customers directly and effectively which is connected with a positive

impact on services meetings and evaluation of the service quality. When the

employees’ behavior in the business units is correlated, such processes can be

explained as the correlation between collective installation and customer satisfaction

according to the business unit analysis. However, other mechanisms are equally

possible. Dissatisfied employees are more likely to the other business units with lower

than average level of satisfaction and experience which may also reduce the level of

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customer satisfaction. (Gelade and Ivery, 2003) Gelade (2005) find that the function

of the external customer satisfaction as arbitrator between employee behavior/

performance relationship and the organization is considered a large sample of the

bank branches. They find certain protection effects that borders on the result of a

selected large sample size and its consequences seemes too small to be realistic in

values. He also argues that changing the wording profit chain model of service can

lead to various angles of more powerful study of the relationship between employee

attitudes and the organizational activities.

Nkomo (1987; 1986) examines the relationship between, as to how many

organizations have invested in human resources planning and their business results

and finds no correlation regarding investments in the HR planning with business

efficiency.

Yeung and Ulrich (1990), Ulrich, Brockbank, Yeung and Lake (1993), all

show that the application of the HR philosophy not only varies, but also becomes

strategic that the integration of HR practices and strategic alignment has a big impact

on the business efficiency. Rousseau (1998) suggests that the message on the

organization of related information can increase the psychological attachment of the

workers to their employers such as the employees who see themselves the key

members of the organization and can contribute to the organizational goals.

Yitzhak et al. (2007) concludes that the leading theories of job design have

neglected the incorporate and important context of time into their workplaces. They

demonstrate as to how the job design scientifically integrates in the perspective of

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time, with respect to the specific instance of profession/career dynamics which will

advance his consideration of job design. They discussed in detail the contribution of

time with respect to the career path developments and their effects on the employees’

reactions to enhance productivity while discharging their duties due to their

prospective job design.

Morgeson and Campion (2002; 2003) found that the positive relationship

between the favorable job attitudes and the characteristics of core job most notably

were the internal work motivations and job satisfaction. The general mechanism

assumed to explain these favorable attitudinal reactions to the core job characteristics

was the experience of stimulation resulting from carrying out complex, challenging

and engaging tasks.

Yitzhak et al. (2007) examined the impact of both subjective and objective

perspectives and they integrated into the career path development of the individual,

proceeded with the understanding of employee reactions to the job design. They

defined and discussed the employee’s reactions to their existing job characteristics

particularly with respect to the time elements as the relationship among the job over

the career spans. Afterwards, they discussed as to how the individual career dynamics

might influence the active efforts by the employees to craft more stimulating jobs.

Sacco and Schmitt (2005) find that the cultural diversity should lead to lower

efficiency of the organization. They speculate that the effect of diversity on

organizational turnover has a negative impact on the activities of the organization

while the cultural integration and cooperation, the necessary solutions to various work

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and the IT management's attention will distract the bottom line in favor of diversity

and productivity of more efforts. They find a limited support for the negative

relationship between income and racial diversity, but they can find no correlation

between age and gender diversity and abundance.

Chatman and Spataro (2005) examine the role of the organizational and

cultural values of the organizations with more emphasis on the common interests and

destiny as collectivism by the emphasis on individuality and identity as a person. The

collectivist organizations showed significant organizational members, a greater

interaction between groups and less conflict and better diversity increased, but this

does not apply to the more individualistic organizations. In addition, as the main

effect diversity, Richard (2000) finds the strategic orientation moderates the impact of

diversity on the financial performance. The racial diversity positively is implemented

in the organizations in terms of development strategies, as creativity and flexibility

are necessary, and connected with negative reduction in its strategy.

McEachern (1998) explaines the concept of offers of range of costs coming

from the literature and brand management in marketing and he specifically states that

the cost of employee potential for the unit of goal of branding is the creation and

maintenance of identity that the product is differentiated from the competition.

Richardson and Vandenberg (2005) state that the results of involvement in the

organization-level may qualify for a make study participation in workplace-level units

to consider appeals and business processes in which the amount of participating units

of the climate have occurred. They conceptually suggest that such processes to take

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leadership and motivating employees probably start right containing the paper, two

concepts of management and leadership perceptions in the model unit level

involvement. They also examined the indirect association of senior understanding of

the willingness of subordinates and on the benefits of the organizational practices to

facilitate the implementation, and direct association with the transformation of

leadership climate.

Lawler (1996) suggested that participation is to act where employees

throughout the organization and make decisions to have the information and

knowledge the society requires with the view to using their power effectively, for the

rewarded in return.

Lawler (1986) and MacDuffie (1995) argue all the four attributes necessary

for the high commitment viz-a-viz staff power, involvement, information, and

knowledge all are likely to make inappropriate decisions or doubts about their ability

to come to correct decisions if they can act independently. No performance-based

awards are unable to guarantee than their power to use them in the ways that benefit

the operation. Those who are performance-based awards are made to them but nobody

is more likely disappointed and unjustified because they could not rely on their

compensation. Information and knowledge without power because the workers do not

act in accordance with their experiences.

Mowday et al., (1982) defined the commitment construct as an additive

function made up of a strong belief in and acceptance of the organizational values and

goals, a willingness to exert considerable job efforts for their organization and desire

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to manage the organizational goal in an effective manner by showing an

organizational citizenship.

Eisenberger et al. (1986) provided evidence which suggested that the

employees form perceptions concerning the extent to which the organization valued

them as important contributors and cared about their welfare. These insights of

management were considered a close association for the employees and they

intrinsically believed to show their performance in a conscientious and matchless

innovation on behalf of the organization, but it was depends on the importance of the

contributor.

Marchington et al. (1992) points out that the terms, such as the employee’s

involvement, participation have been used differently by various writers often with

overlapping meanings. They suggest that the use of such terms like `employees’

involvement' ought to be limited to those practices which are initiated principally by

the management and are designed to increase the employees’ information about and

commitment to the organizational objectives.

Bradley and Hill (1987) carry out the study of a quality circle programme in

an organization. They identify an attitude-survey of participants, semi-structured

interviews with union officials along-with the managers and direct observation of the

quality circle operation. The researchers observe the managers habitually restricting

the scope of issues to minor aspects of working arrangements, or defecting attention

to the issues that do not reflect on the managers’ areas of competence.

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Brennan (1991) studies the quality circle (QC) programmes. She uses

interviews with facilitators, managers and the QC leaders and non-participant

observation of the QC meetings and the QC steering the group meetings. Although

noting that many a middle manager was supportive of quality circles, Brennen finds a

highly vocal' group of the middle managers putting inconsiderable effort into

`rubbishing' the value of quality circles to the peers and subordinates. These managers

are particularly opposed to the quality circles working on departmental problems

without their cooperation and they are sceptical that the circles can add value to any

problem which the managers have already considered.

Kohli and Jaworski (1990) suggest that the task orientation affords a number

of psychological and social benefits to the employees. Specifically, the task

orientation is argued to lead different human bodies with a single mind. They further

stress that all the individuals feel sense of citizenship for their organization when

performing their duties in different departments and team work which enables them to

achieve the organizational goal in a productive manner by satisfying the customers.

The effective completion of the objectives leads to the result such as employees’

sharing a feeling of worthwhile contribution, a sense of belongingness, and, it is

ultimately a commitment of leading employees to the organization.

Bailey et al. (2001) defines the concept of high investment of human resources

system that may affect the skills and behaviors, also enabling the employees to

achieve the objectives of the organization.

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Delery et al., (1996) defines a set of HR practices to improve the staff skills

and motivate them to achieve the competitive advantage and improve the

organizational efficiency. They study that the strategic human resource and their

research show that the institutions use high-investment human resource systems

positively related to some important results including the lower staff turnover,

increased organizational commitment and both operational as well as financial

performances.

David et al. (2007) examines two competing perspectives on the relative use

of high investment system within the main human resources and the support staff

within the organization. They compare the universal plan providing the exposure of

high human impact of basic staff resources which are always returned more than the

level of impact on the support staff, with a contingency perspective suggesting the

relative level of exposure for those employee groups who one contingent on strategy.

In addition, they consider the strategy and human resources applications as positively

associated with high levels of human resource investment system used in the

organization.

Cotton (1993) concluded that the work practices were part of a high set of

related human resource practices aimed at providing an opportunity for the decisions

regarding the conduct of their jobs.

Cotton (1993), Lawler (1992) and Vandenberg et al. (1999) postulate that the

employee’s participation has been suggested as an improved financial performance by

increasing the staff motivation itsr effectiveness and the quality of work processes.

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Indeed, efficiency in the process and increase motivation, extra effort shows to lead to

individual, team and work units. In fact, efficiencies in the work process as well as

increased motivation an extra effort have shown to lead to individual, team, and work-

unit’s performance.

Pfeffer and Sutton (2000) suggested that the managers and professionals were

in fact know the research results, but somehow they could not make them properly.

They argued that the research-practice gap was primarily a non-doing gap rather than

its being a knowing gap. They had also examined failures of implementation with

respect to a different reason and obviously there were many reasons their being due to

overwork, risk aversion and they might be political considerations, organizational

disinterest or non-involvement of the top management.

Lchniowski et al., (1997) considers the agreement term it being the

simultaneous internal and external correspondence between the external environment

the organization's business strategy and HR strategy which means that the business

strategies and human resource management policies interact according to the

organizational context.

Becker and Gerhart (1996) find that numerous studies have focused

exclusively on the HR practices and there was a strong association between the

workers and the precise practice of HR which is a coordinated human resources

management, but may be equally important to focus on the HRM policy.

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Herzberg, Mausner, Peterson, and Capwell (1957) forward the literature

analysis of sixteen studies and show that the wages take the sixth place in importance.

Ranking above the pay is the job security, interesting work, opportunity for

advancement, appreciation, company and the management.

Towers (2003) interviews more than 35000 employees in different

organizations and finds the mean to vary for the purpose of payment to the

employees. The competition system of wages is in the second place and suggest the

payment on the basis of individual work. The competition system of wages takes sixth

place in the retention and salary is the 10th one in terms of involvement (motivation)

of the employees.

Jenkins, Mitra, Gupta and Shaw (1998) advance the objective analysis of the

relationship about commitment, the quantity, quality and financial incentives. They

find in their studies, incentives and the number of products with high correlation of

0.32 bases, but find no reliable link between the product quality and promotion.

Beck, Wilson (2000) his organizational commitment to the subject of

continued interest is almost a decade old in terms of its influence on the

organizational effectiveness and individual work, and performance, and many

researchers across the sphere, enthusiastic enough to determine the organizational

commitment of the employee in different professions and delineate strategies to

develop it. They have been striving for the sense of civic life to support the

organization continues a tradition for the employees in different countries, regarding

their culture, traditions, religion in the country, particularly in the country that has

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educated employees in millions and its average life for man is the standard one.

Digitization, deregulation and globalization, in particular force the employer to set

new strategies and to maximize profits. [Kanter (1968), Kim, Price, Hall, Schneider

and Nygren, (1970), Sheldon (1971), Steers, Romzek (1989), Mueller and Watson

(1996)].

Many scientists studied in the organizational behavior and determined the

commitment to organizations in terms of character relations, loyalty to the employer

integrate individual and organizational goals of the organizations willingness to

implement significant efforts on behalf of the motivated employees.

Meyer and Allen (1991)) categorize the organizational commitment in the

following three aspects viz-a-viz effective, retentive and normative. They determine

the effective commitment where the employees will stay in the organization as they

want to continue the commitment to the second aspect where the employees remain

with the organization for they are needed, and the third aspect of legal obligations is

developed as the become the ones and normative remain relatively strong in the

organization as they feel to be so the significant commitment seems to be more

positively related to the job performance. The significant commitment can be a strong

belief of the stakeholder and the acceptant of the organizational goals, standards,

policies and is ready to strive for the achievements of the objectives, on behalf of the

organization, along-with the strong motivation to be an employee of the organization.

Singh (2000) finds that the results in certificated organization significantly are

correlated with the staff turnover.

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Mobley (1982) sophisticates the reward and compensation practice to be

facilitating the organization to keep the critical employees for longer periods of time.

The aforesaid context requires a compelling reason to practices, such as human

resource management practices that lead to the organizational commitment among the

employees that ultimately leads the fate of the organization and become a source to

achieve the uncommon objectives.

Pare, Tremblay, and Lalonde (2000) find that the human resource management

practices like performance management, competency building and empowerment

leave a noteworthy positive effect on commitment to the organization from among the

information technology professionals.

Agarwal and Ferratt (1999) advance concept of human resource practices.

They find that the work-life policies, training and procedural fairness, distributive

policies, recognition and empowerment, and information sharing are significant in

personnel management practices in the software industry. The range of results of

studies the scholars put on for classification of the key human resource management

programs in various industries, especially the service sector with the view to finding

the key methods for the attractive organizational commitment.

Henderson, (1989) suggests as to which deserved the pay plans associated

with adjusting the basic salary directly. Mejia and Balkin (1992) also one determined

to form only the theoretical ties between pay and costs of individual productivity even

when such links may not actually exist.

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Hills (1987) suggests that the employees should be compensated according to

and contributions. This provision clearly captures the feelings of most of the

employees to be paid in accordance with their expectations. He well knows that the

theory of human motivation and support is used for merit. These theories urge the

leaders to link mutually the important results of the desired behavior of the

employees.

Mejia and Balkin (1992) support the multiple points of view, the incentive

system based on merit pay, original dissatisfaction, frustration and the lost

productivity. The organizations seem to prefer the merit pay approach with other

alternatives, and the HR professionals respond to the definition of "favorable"

meaning thereby worthy of payment. These efforts should, in certain circumstances,

be the merit pay that may lead to a common motivation and increase productivity.

They believe that even in favorable conditions the merit pay is unlikely to gain these

results. Thus, the organizations may need explore several options for the merit pay.

Geus (1988) and Stata (1989) argued that in unstable conditions for quick

learning ability, your competitor may be the only sustainable competitor. Hedlund

(1994) suggests that innovations, organizational changes are more critical basis of

competitive advantage. Dynamic capabilities are likely to have seen all the major

corporate resources in the specific location. The organizational learning in the modern

era should have been, as a major source of competitive advantage and value creative

in the context of strategic management. Creating an organization actively it has to

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regulate the environmental change conducive and friendly atmosphere that not only

the processes needs to create the effective information and know how.

Nonaka et al. (1994) considered that an analysis of the organization in terms of

design and ability to process information is an important approach to the

interpretation of certain aspects of the organizational productivity. They argue that the

interaction with the environment as well as to create and disseminate information and

knowledge is more important when it comes to build an active and dynamic

understanding of the organization. Many other authors believe the fundamental aspect

of competitive training and to be the knowledge of achievements and productivity.

Management and business texts are the associated trainings for sustainable

management while the business texts often are the associated training for sustainable

comparative effectiveness, innovation and content in general for promoting

innovation proportional performance. This is one of the most important tasks of the

organizational psychology and the study of learning. The organizational learning is an

active process which defines education as source to power for the expansion of

resources and more organized activities.

Cross and Baird (2000) state that the organizational learning is a process

whose aim are expansion of the organization with new inventiveness (technological,

productive, or marketable) progress. It requires conversion of general knowledge so

as to allow the databases to share all our employees and to learn, what leads to the


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Mezias et al. (2001) investigates that uncoordinated actions, of an individuals

in an organization for some common knowledge structure that each case will result of

achievement of the common strategic objectives.

Williams (1992) finds that the change is a natural process in all sectors, driven

either by customers, competitors, suppliers or technology. The amendment allows an

organization to involve its employees in order to improve the continuous pressure for

the company, its products and services and to add to its customer accordingly.

Slater (1997) argued that the organizational learning is an idiosyncratic and

complex ability to imitate difficult to replicate. It resulted from the change and

evolution by the specific history of each organization. It is also added that investment

did not only improve learning efforts but also the experience and knowledge

accompanied throughout.

Miller (1992) supported the suitability of using political models to explain

private and public organizations respectively. Both kinds of organizations requisite,

among other uniqueness, the aggregation of contrasting preference into commanding

social choices, the centralized mechanism of encouragement, the formation of social

norms, and the need to resolve difference all of which were related to issues

neighboring the causes and consequences of prudence.

Porta et al., (1997) pointed out a strong relationship among organization size,

belief and carefulness. In different large size organizations the production was

commonly handled and the employees of different organizations must cooperate with

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many other stakeholder (including possibly the customers and as well as other

employees) whom they saw rarely. Certainly, the larger organizations’ employees had

a lesser interaction between the employee and the customer, in the deficiency of

belief, these shorter interaction led to non cooperatives which was not good in the

organizational point of view. Moreover, in the absence of trust, the concerned

management of the large organizations was likely to refer to rules to be distant from

the dealers which promoted uncertainty in the stakeholders.

It is important to distinguish a work organization from a workplace

organization. The work organization (job-level factors) refers to the individuals’ work

station, his job and its format and other individual-level factors. The workplace

organization (company-level factors) incorporated several components: the structure,

the climate, the culture, and the practices of the organization, the philosophy and state

of labour management relations as well as activities and the management of the OHS

including health and safety committees and as to how they function.

Lado and Wilson (1994), Von Glinow (1993) argued that reducing the value

of traditional sources of competitive success led to even more important human

resources in the stock of intangible resources with the possibility of continued

organizational success.

Huselid (1995), Becker and Gerhart (1996) argue that the human resource

systems for increased organizational performance designed maximum competence of

the organization, and contribute to its continuous competitive advantage. Maital

(1994) considers that the individuals who work for any organization, become the

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source and on the basis of the usage of other resources. Thus, the effective system of

human resources employees are, in fact, a strategic asset. Amit, Shoemaker (1993)

decides that they create a system of rare resources and capabilities that can not be

copied or replaced easily and that give the company from its competitors.

Holzer (1987) determines the complex system of selection tests for the

potential candidates as it reduces the level of uncertainty when an organization selects

the external candidates. Pfeffer (1994) suggest that rigorous recruitment and selection

system also gives those employees who are selected by a sense of elitism gives great

hopes for its performance and delivers message as to what the importance of people to

the organizations.

Cianni and Wnuck (1997) argue that the experience and solutions to the

problems work together as a team and it becomes more important than direct

experience with the problem of functional content.

Weick (1990) finds that the new work environment is characterized by

complex, non-linear dynamics in which the mutual dependence of structure and action

means that the structure and medium practices and results are interlinked. Action is

change, planned and unplanned, the impact of interdependent participants and creates

a structure. The organization work, whether products or service is achieved through

several stages or processes during which the value is added. In the value chain for

performance of the labor the process is a major component of the structure and

functioning as well as a key element in the work design.

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Davenport (1993) defined the process as to how the well planned, controlled

and considered measures intend to produce a specific output for a specific client or

market. The business process is a sequence of events with respect to location and start

time and end along-with clear inputs and outputs and structure to take action.

Huselid (1995) is widely considers the relationship between the base or High

Performance organizational methods and activities. The results determine that these

practices are statistically significant as they have an impact on the employees’

turnover and productivity, also corporate financial performance. He also believes that

the effects of the high performance organizations on implementation and results are

partly due to their relationship and communications with the competitive strategy.

Bailey (1993) suggested that the human resources are often the partially

employed workers who often performed below their maximum capacity and potential

and the organizational efforts to detect attempts of flexible employees and they could

offer returns over all costs. Bailey argued that human resource management practices

may affect such discretionary effort through the control of employee skills and

motivation and through the organizational mechanism which provided opportunities

for the employees to manage as to how their positions have been met.

The relevant research domain, a growing quantity of research-work or studies

found that the use of collection of basic human resource management (HRM)

application had a positive effect on the organizational performance and, hence, it

leads to a sound financial outcome. These packs of human resources management

practice generally included refined recruiting actions and selection processes,

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performance management systems linked to reward & recognitions plans, and

organizational structures that encouraged cooperation among the employees (Huselid,

1995).

Arthur (1994) found that by using human resources management systems that

highlighted the employee dedications were more resourceful than using the human

resources management systems which emphasized the cost. Likewise, MacDuffie

(1995) found that the use of human resource management policies emphasizing

commitment and motivation of employees by mean of human resource practices could

increase the organizational performance along-with productivity.

Olson and Dover (1979) finds that the customer’s expectations are pretrial

beliefs about a product or service. In the absence of any information, prior

expectations of service will be completely diffused. In reality, however, the customers

have many sources of information that lead to expectations about upcoming service

encounters with a particular company. These sources include prior exposure to the

service, word of the mouth, expert opinion, publicity and communications controlled

by the company as well as prior exposure to competitive services.

Gilbert and Vandermerwe (1989) finds that for better targeting of customers

one is responsible to understand the internal service users' needs. Results should be

competent in the interaction between different organizational units and the employees.

The key principle of a successful internal systems must be customer oriented with the

clear focus approach of total quality management initiatives in which all employees

are motivated by the sense of ownership concept to think all of the employees

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irrespective of their grades and designations to improve the organizational services

and make them an added value considering the importance of customer and

employees for the better treatment of services.

Berry (1981), George (1990) and Grönroos (1981) suggest that internal the

customer orientation is different from the idea of internal marketing in that the former

focus on as to how the employees of the organizations serve other employees while

the latter focus on as to how the company served the employees.

Several articles are considered on internal customer service in the context of

human resources in the organizations like; Mohr-Jackson (1991) who examine as to

how HR employees can be developed and maintained customer focused and such

marketing concept that was implemented on intra organizational basis.

Bowen (1996) explains as to how human resources role can address positively

the effect of both, line staff and their external customers. He concludes that the degree

of satisfaction in these inner and outer segments strongly has been inter linked. In

addition, Tsui and Milkovich (1987), Tsui (1988) calls upon the human resources

departments to take several district approach in coordinating the various front groups

of employees who are the internal clients of the human resources services. In Tsui’s

work, the term multiple-constituencies has been used the same way as the marketers

use the term market segments concept, in which the internal customers i.e. the

employees are also the external customers who are using their services.

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Bowen and Ostroff (2004) argue that for the human resource method to

connect with performance in preferred ways, it must be unclear and collective

perceptions of the atmosphere. Their task is the groundbreaking as one in their

streams of the role employee perceptions play in interpreted human resource practices

into the preferred organizational outcomes. It is possible for the employees to share

the atmosphere’s insight based on the human resource practices they experience. It

can be that various employees perceive that the creation of a safe atmosphere is

motivated by the management’s concern for the employee welfare, but the one

segment of the employees perceive it to be motivated by a desire to cut in costs linked

with mishaps on the workplace or to meet the requirement of the regulatory bodies.

Edwards, Collinson and Rees (1998) described three different methods of the

employees potential reactions’ total quality management implementations. Common

characteristic of these approaches is that they were based mainly on theoretical proven

practical. The first approach emphasizes the potential for positive impact on the

employees. This is the theoretical assumption Quality gurus such as Deming, Juran,

Crosby and Ishikawa, the only general comments on the impact of the staff (Thomas

and Tymon Jr, 1997). Total Quality Management should be to increase the

authorization, more responsibility for the every employee from top to bottom, and

thus to a higher organizational commitment and an increased job satisfaction.

Edwards et al. (1998) defined the quality management staff responses in six

case studies from which two wereof the Civil Service. In terms of attitude to quality

and perceived increase in negative results in these organizations were found. The truly

study was to examine themselves the first empirical longitudinal reactions of the

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employees to implement new public management in the state organizations. Research

is conducted on context-dependant model, as mentioned above, it was likely that the

members were working on the introduction of a new reaction of the government who

determined primarily the organizational principles and the implementation of the

content and context variables. Strain and satisfaction of the employees were

considered in this study as the employee responses to the organizational change. The

customer satisfaction was rated as an indicator of success of the organizational

support.

Rust and Zahorik (1993) explained that the financial impact of acquiring the

new customers, perhaps five times more expensive than maintaining the existing ones

the organization must consider and planed as to how to retain the existing one duly

satisfied.

Beckett et al. (2000) drew preliminary conclusions as to why to keep the loyal

customers, in addition to financial services although they had a less opportunity in

many constructive comments on the service. For instance, many consumers thought

the little differences between the financial services of any changes essentially mean

nothing thereby. Second, the consumers seemed to benefit from considerations or

laziness.

Leeds (1992) documented that about forty percent of the clients of banks

switched over to others as they thohght their services were not up to the required

standard. Leeds also claimed that nearly three quarters of the clients as a general

courtesy cast attention at the bank. The study also found that greater use of the

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Quality of Service / Sales and ethical rules (such as formal welcome) to be, increasing

the customer satisfaction.

Reichheld (1996) suggested that the dissatisfied customers may decide to

defect as they do not expect to do in order to get a better service elsewhere. In

addition, the satisfied customers are looking for some other service as they believed

that they will get better performance there. However, the customers retention in the

organization depends on a number of other factors. They treat a wide range of

products, more convenient, higher prices and the rising income.

Reidenbach (1995) argued that the customers were realizing more than a

viable component of customer satisfaction, as they contained not only the usual

services, most banks raised and the consideration of the price you pay to the client.

The consumer value is dynamic that must manage. The client was simply a reaction to

the offer in specific values of products/ a market (Reidenbach, 1995) proposed. By

this perspective, the banks should determine the value of a customer for the sake of

value added services to be determined.

Bitner (1990) and Yi (1990) stated that two factors might influenced the

customer satisfaction such as customer satisfaction were influenced by two factors:

experience and expectations of performance. Crosby et al. (1990) found that the

customers past experiences with the service provider also affect their choices to have

an ongoing relationship with the organization.

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Fornel (1992) found that the satisfied customers keep their consumption

patterns similar to the products or services. Thus, customer satisfaction is a key

benchmark for the quality and future earnings (Andreassen, 1994).

Oliver (1980) explained satisfaction and dissatisfaction were related to the

disagreement between the expectations of the customers. An affirmative rebuttal

accompanies the customers’ satisfaction and negative refusal led to his displeasure,

thus improving the organizational efficiency was aversely affected. He argued that

pleasure was said to have occurred if the product was after positive expectations,

better than expected.

Andreassen and Lindestad (1998) stated that the customer satisfaction is our

experience and an aggregated customers’ purchase and consumption counts. Peter and

Olson (1994) explained that the level of dissatisfaction has a theme, to be decided on

the degree of dissatisfaction and the level of consumers’ interest in the products,

services and solutions.

Saravanan and Rao (2006) identified the total quality service (TQS) was a

holistic approach which was integrated in various critical factors of Total Quality

Management and exercised in a productive way to achieve in the service organization

for customer satisfaction. The key dimension of quality management from the

perspective of the management was not fully put into service inn certain

organizations.

.

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Milakovich (1995) holds that the services organizations must work to achieve

customer satisfaction, as it has become the criterion for assessing the quality of

service. Schneider & Bowen (1995) note that the basic needs of the customer be

satisfied by a company that wants to survive in the long run.

Lainema and Hilmola (2006) propose that the service providing organizations

should review their personnel policies to understand the market needs and

requirements and the feedback from the organization can help the deficiencies to be

identified in their products, resulting in launching a new product to improve the

organizational performance. The administration when looking at the client can

approach his need especially taking into account as to what he needs and desires of

the development of a new products. Moreover, it can be done only if the management

is alive to its wants of the consumers and the staff is convinced with the customers.

The quality of service is the most important factor towards customers’

satisfaction and his retention. Companies especially the financial institutions and

banks need keep customers loyal and focused, , because their development depends

on the maintenance of services or establishment of long-term relationships. Those

customers who are satisfy for the short term are likely to remain the long-term

satisfied.

Flyyn et al. (1994) developed another document in which they identified seven

factors as the quality of Total Quality Management. They said that the company has

offices for support, quality information, business process management, product

development, personnel management, vendor participation and involvement of

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external customers. This document was developed in close similarity with the

previous instrument Saraph et al. (1989). In a later work, Flyyn et al. (1995)

measured the effects of total quality management practices on quality of work

performed.

Anderson et al. (1994) developed the theoretical foundations of quality

management practices by examining Deming's fourteen points. This reduces the

number of factors with 37-7 Delphi method visionary management, external and

internal environment and cooperation, friendly environment for learning, business

process management, improving on a continuous basis, employee performance and

customer satisfaction.

Black and Porter (1996) identified ten confirmed empirical critical factors of

total quality management;- the corporate culture quality, strategic quality

management, quality improvement measurement systems, people and customer

management, operational quality planning, external interface management, supplier

partnerships, teamwork structures, customer included satisfaction focus and improve

communication of information In addition to Black and Porter (1996), various authors

also assessed the validity of the Malcolm Baldrige Award criteria (Wilson and

Collier, 2000; Flynn and Saladin, 2001).

Hendricks and Singhal (2001) with a large set of data showed that during the

post effective sample total quality management was much better than performers of

different groups of coordinated management.

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Douglas and Judge (2001) used the perceptual indicators of financial

performance (in addition to experts view events). Their results showed that the level

of total quality management was very positive and straightforward as anticipated

financial performance of hospitals and industry experts evaluated its performance. It

was found that the overall level of total quality management philosophy was

introduced correlatedly strongly with perceptions of financial performance (Kaynak,

2003). When the company was registered, it seemed that the evidence is mixed. Some

Total Quality Management advocates argued that the total quality management may

not be consistent with financial performance for SMEs (Schmidt and Finnigan, 1992;

Powel, 1995; Strubering and Klaus, 1997), while others found significant results in

implementing the total quality management in SMEs (Ahire and Golhar, 1996,

Hendricks and Singhal, 2001). Hendricks and Singhal's (2001) Singhal analysis

revealed that smaller companies with a Total Quality Management usually were

advantageous as compared to the larger companies.

Adler (1991) found that the environmental wholesomeness defined as the

higher performance of multi-skills of staff job description, empowerment, the

importance of the task and feedback mechanism. Champoux (1991) suggested that the

organizations that need the capacity for growth between the core job characteristics

and the vital emotional states confine their attentions on affective response.

Arce (2002) found that the management practices to reward their employees

on the basis of external activities might affect the performance of internal activities.

The finding provided a foundation for the existence of synergies between different

activities. Loher et al. (1985) found the association between job satisfaction and job

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characteristics and also found that the relationship was stronger for employees in high

potency development need.

Renn and Vandenberg (1995) stated that the strongest support for the job

characteristic model was straight and the indirect impacts are allowed on the personal

work etc.

Sokoya (2000) noted that the level of job satisfaction is determined by a

combination of jobs, work, and personal characteristics. Rotating the jobs of the

manager has the advantage of different jobs, job diversity, in the subsequent increase

in staff performance and in turn benefits for the organization.

Boon (2006) stated that the customer, the organizational trust, communication,

participation and empowerment of employees are aligned positively correlated with

employees' representatives and tend to remain intact with the organization. It is also

noted that the organization with staff perceived confidence and practice Total Quality

Management and the tendency to improvements for the employees to remain intact

was significantly dominant. He also identified after analysis of the results that

validated based on simple linear regression, and supports to soft total quality

management tools that were reliable and valid.

Bowen and Ostroff (2004) argue that in view of the HR system that the desired

power integrates them in different ways to be defined clearly and fairly with the

climate of the shares of the exercise or the administration, the behavior, which expects

Mark supports, and rewards. Their efforts are revolutionary and they praised the role

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of employee perceptions and transform them with real HR practices that lead to the

preferred organizational results. They conclude that his staff is understanding the HR

practices thus lead to most important results. However, they focus them on the pre-

defined climate as their focus is not on employees’ insight into what HR practices in

relation to the attitudes that are expected to support and connote rewarded by

management. It is possible for to employees to share understanding of climate on the

basis of their experience with HR practices in the organization.

Farkas and Tetric (1989), Lance (1991) and Mathieu (1991) propose that all

the causalities between commitment and satisfaction are running in both directions.

Mathieu (1991) and Lance (1991) suggests that the relationship is successively

manageable by the employee on their job security or the organization's commitment

much stronger than the relationship gradually becomes clear in the other direction.

The relative size of the link between commitment and satisfaction reported by

Mathieu and Lance is actually very similar to the results of different Lincoln and

Kalleberg (1990) although the interpretation.

Curry et al. (1986), Dougherty et al. (1985) and Currivan (1999) suggested

that there may be no causal relationship between satisfaction and commitment which

in turn leads to improved performance of the organization in financial terms, and has,

thus, contributed in capturing market share and that the explanation for the presence

of such mixed results in the existing body of work can be explained by the existence

of a false relationship between commitment and satisfaction.

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Garden (1990) argues that the biggest competitive advantage of company in its

abilities the technical skills of its employees retained for career development. Even in

the absence of high salaries, the companies with adequate professional support to their

internal job satisfaction levels (Leavitt 1996), to improve, therefore, the managers

must begin to understand and became committed to the need for professional

development when they are making most productive use of their human resources.

Ethiraj et al. (2005) proposes that the improvement of customer-oriented

approach in a very specific aspect is most often the relationships with customers and it

is positive with the performance of the organization through the satisfaction of their

customers. The customer recognition and measurement requirements of the allied

activated understand the organization better. Keeping abreast of the needs of the

customers helps the organizations to evaluate the process and the services offered to

raise it in an effective way to customer satisfaction. It can be achieved by improving

to realizing as to what the customer's requirements are through connections with the

customers, and afterwards, by offering the efforts to achieve the desired service.

Lainema and Hilmola (2006) propose that the service sector organizations

need of their employees a better understanding of the customers’ needs and market

requirements and the new products for the growth in sales, market share and

ultimately launching organizational performance. It is also found during the research

that shows that the customers are prepared to meet the high price of products if the

organization accept the preference of customers in designing the quality and delivery

of goods to the respective segment with optimal solution or value-added services.

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Besides, it is done or achieved only if the organization sincerely to realizes as to what

the client wants of the market orientation.

Hofstede et al. (1990) proposes that the management should be committed to

focus keenly on the customer needs and their requirements to sustain in the market in

an efficient manner. The management and the employees of the organization must

need be strongly encouraged to focus on the customer requirements and

systematically assessed their needs and provide the highest internal service.

Hofstede et al., (1990) identifies the organizational culture dimension of

expediency with the idea of customer orientation as an important practice that can be

taken and treated as differentiated organizational cultures of the industry. They also

suggest that the departments are rational market-based approaches in the

organizations, but there are no focus on large emphasis on gathering customer needs

and thinking of practicality in line with the implication of Peters and Waterman

(1982).

Morley and Heraty (1998) also advocate that the organizations consider

seriously by increasing interest in innovative and multi-skilled personnel. Therefore,

the weighing to give the desired properties can be implemented differently by the type

of work. Also, to verify the importance of self-directed staff increases when the

individuals are expected to show their ability in relation to working conditions under

supervision to produce their own work and meeting deadlines instead of always

expected, as a mapping.

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Knowles and Stewart (2000) argue that the competitive factor is the selection

criteria for jobs and documented in their research show that the majority of

organizations do not maintain well-documented selection criteria. It is the documents

to be focused on for the organizations that does not have selection criteria but have to

rely on the interviewer retrieving information from memory in, without any reference

to documentation during the interviews.

Walter (1962) and Becker (1975) propose that may be the workers and

employers tend to share the costs of specific investments as a market mechanism for

reducing the risks of capital losses due to occupational divisions.

Huselid (1995) and MacDuffie (1995) argue that it makes sense to the systems

of HR practices focus instead of on individual methods to assess as to what the logic

is behind this statement that the firm's performance will be the better management

practices and their mutual support, which leads to a mutually reinforced result in the

form of employee contributions to the organizational performance.

Pfeffer (1994) postulates that the firms have recognized increasingly the

potential for their people to be a source of competitive advantage, as the private sector

organizations in the world are experiencing the tremendous growth. The organizations

need skilful, qualified and committed employees to continue the progress. The

dedicated employees perform the best of their skills, thus, prove to be more

productive than others

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The employees’ satisfaction is a mean to value creation as it increases

commitment and dedication. When the people feel satisfied they are likely to be more

loyal, creative and trustworthy. Unlike other resources they have feelings and

emotions that can be controlled and fulfilled. Moreover, if managed well, they have

the potential for the optimal allocation of other resources as well. Smart managers

and owners constantly strive to identify various ways and processes to increase their

productivity. For this they take a progressive and holistic approach to bring

complacency to their employees. Organizations all around the world are operating

within a rapidly changing and developing industrial context and with this HR

practices are not an exception. This requires of them to be flexible and adapt to the

current needs continually in a wise manner. In today's competitive business

environment, various organizations are wasting their huge investment considerations,

but they were not caring for the employee’s job satisfaction or making the employees

prioritization to be satisfied first at their work station level, it may lead to an

unpleasant experience of attracting new customers for even shorter periods of time.

Lawler (1986) argues that the beginning of employee’s intrinsically

motivation should be along-with fair performance procedures and rewards that

strengthen the desired management style which enables them to accomplish their

goals in an effective manner. He argues that failure to manage employees’

performance management systems with the goals of the level of employee

involvement will mean the corporate management practices are not only to involve

the employees but also to manage them effectively with new ways that would

compete with the systems to reinforce traditional management style conduct.

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The relationship between skill acquisition and job satisfaction is not an easy

task. There exists a clear difference between general and specific skills. The

acceptability of generalized skills may be raised to employee job satisfaction as it is

easier to move to other jobs where employee job satisfaction is higher. To

differentiate, the specific skills attached the worker to the organization and that may

reduce employee job satisfaction by creating a hurdle to exit to other organization as

the workers lose the desired level when they move. The management style leads to the

job analysis to link the education with the desired job functions and the level of

knowledge of employees’ skills with respect to the organizational requirements. It is

further evaluated thorough their studies that If the employees unsuited in terms of

skill and educational requirements to perform the organizational functions it is also

the strongest factor of lower job satisfaction.

Battu et al., (2000) finds that mostly a negative relationship occurs between

over-qualified and preference not given in promotion to the over qualified graduates

and they further identify that no evidence is seen by them to manage training

enhancement of the over qualified employees because the management considers that

they have already sufficient knowledge to mange their jobs efficiently and effectively.

The same authors find that over qualified graduates have statistically significant lesser

job satisfaction than those who are in adequate educational level jobs.

Green and Tsitsianis (2005) likewise find that different types of workers at

different levels have different employee job satisfaction and that is lower than over

graduate level. They further add that after achieving the educational attainment by

workers, the over educated employees are less satisfied as compared to adequately

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educated workers. They further stress even they are not offered the required training

with the perception that they are over educated and could mange the jobs easily.

Buchel (2002) finds during his research work no significant dissimilarity in employee

job-satisfaction between the over qualified and sufficiently educated employees.

Mumford (2004) identifies two segments for the human development with

respect to specific and general training categories. According to him the general

training means the internship or apprenticeship given to the employees while specific

training is reserved for the increasing productivity at work station level. Stassen and

Templer (2003) explain that training and development are an important factor of

retention of an employee and the accessibility of training is vital for retaining older

employees. Training, however, is considered different phenomenon by the researchers

than learning. Robotham (2004) states that learning is the integral part of development

and usually lack of focus on the learning may be due to employee's attitude who

simply meant the training is for improving the job performance.

Harper (2004) focuses on the training of employees regarding communication

skills. The customer dealing businesses should train their employees in the

communication skills. It helps them retain their customers and expand their business.

Employees are often trained in the organizations for a better performance.

Allen and Velden (2001) distinguish the relationship between education and

skill requirements and they further add that both have the weak relationship the most

importantly which they find a significant negative relationship between unmatched

skill and employees’ job satisfaction.

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Levin (1985) argues that the over-qualified employees may lead to reduce the

work effort, increased costs of production or services, and which leads to lower in

productivity. He also describes that it has a negative relationship with the

organizational performance to increase their revenue. Tsang et al., (1991) also finds

that the more qualified employee than the required level of education of jobs and

predominantly those employees with higher levels of education have lower job

satisfaction as the job which the are performing with the organization is not matching

with their educational level or the organizational management as not considering to

utilize the service of those particular employees to keep them intact as productive

members of the organization.

Shields and Ward (2001) investigated the determinants of job satisfaction for

employees and established the importance of job satisfaction in determining

employees’ intentions to quit their respective organization. They found that the

employees who reported overall dissatisfaction with their jobs had a sixty five per

cent higher probability of intending to quit than those reporting to be satisfied.

Borjas and Rosen (1980) postulated that supported the role of job switching in

earnings, Topel and Ward (1992) considered one third of pay as a result of job

mobility. Youn, McIntosh and Brown (1998) applied this to the employees from low

salary service sector business and they found that employee job satisfaction with short

term incentives and long term prediction were far more significant in determining the

overall employee job satisfaction than happiness with social relationships or work

concentration.

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Brown (1990) argued and empirically found that bigger organizations were

keener to implement the merit pay systems than the smaller organizations. Pay for

performance or merit pay systems weakly linked subjective merit ratings to yearly

increases in salary, not salary level itself.

Rynes et al. (2002) suggests that according to the point of view of various

managers who don’t believe in pay as to be important to employees’ behavior. The

systematic underestimation of salary importance by the managers and employees is a

dilemma that was intrinsic worth assessment.

Lee et al. (2004) theorizes that the employee would be with a larger number of

links to other colleagues motivated more than running those employees with fewer

connections. In addition, he suggests that the more the individuals are involved in a

social organization, the more likely they are to engage in contextual performance. The

embedded employees are probably larger social networks who have actually to

receive assistance in carrying out their jobs.

Barrick and Zimmerman (2005) show that two measures of trust and

confidence with himself and the confidence with the decisions, voluntary forecast,

avoidable turnover, because the employees will be persistent with higher confidence

in the pursuit of new work requirements or setting and adjustment will be less likely

to work for the fear of poor performance or ineffective adaptation to withdraw.

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Barrick and Zimmerman (2005) show that the applicants differ in their

attraction for the job or the organization even before they are recruited and these

differences are predictive of voluntary avoidable turnover. In particular they find that

two measures of the applicant the motivation to get to the order to terminate the

applicant's desire for the job and pre-hire intention are related to turnover. These

results show that one of the best predictors of voluntary turnover for the current

employees to leave i.e. intentionally can also predict when the sales will be assessed

before the employee is terminated. Motowidło et al. (1997) suggests that the

performance flow seamlessly that they treat him as a static event effort is faithful

representations of these behavioral systems which will destabilize continuously

creating.

Bartel (2004) states that the relationship between human resource management

and device performances has been concentrate in manufacturing. With a longitudinal

data collected through visits operations of a large bank, he extends his research to the

banking sector. As the managers of the branches have significant authority or

empowerment in managing their operations and employees in the management of

human resources recruitment vary over branches and over time. The site visits for

decision-making practices, concrete examples, the industry concerned is made

presentation. A study is conducted in response to the bank employee's conduct survey

to overlook that for the local workers and managers’ figure show a significant and

effective association/relationship between the bank performance and the internal

customer job satisfaction with the quality of the arrangement on the unit or the

branch, the incentives programs may enhance the dimension of a High-Performance

Work system.

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Black Box, in the banking industry certainly can be used for human resources

management philosophy, policy and practice, as shown by the administrative

manager. A large number of studies have documented the relationship between the

human resource management and the organizational performance particularly in the

manufacturing sectors.

Berger and Mester (1997) build a conceptual model for the commercial banks

to improve the impact of bank size, bank age organizational forms and management

features of the market, state and local restrictions on the amount of competition. They

find that the main difference in terms of effectiveness remains the same and they

explain these immeasurable factors, such as differences in the ability of managers and

they concluded that the sources of change in the bank efficiency is the black box.

Banker et al. (1996), Delery and Doty (1996) studied human resources

management and the organizational productivity. They focused on the manufacturing

sector, despite the fact that today most employees work in services. The services

products in three different important aspects, i.e., intangible, and they tend to create

and consumed simultaneously, and they are usually related to the consumers of their

products with delivery terms.

They concluded that with the simultaneous delivery and acceptance of

services, the employees and the customers closer together which in turn led to a high

contact environment of the organizations and their customers.

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Boon (2005) postulates that when the organizational trust, teamwork, culture,

and customers of the organization follow the, HR-focused practices and it is

optimistic with job satisfaction of the employees connected. It is also noted that where

the teamwork is perceived as the dominant total quality management practices,

improvements in job satisfaction levels are remarkable. Furthermore, the results of the

analysis of several weakening of the proposed model praise on the empirically

validated soft total quality management tools that are reliable and valid.

Oliver and Winer (1987) postulate that the client is to manage only one source

for future relations as the benefits offer from the banking sector, alongside the costs of

discontinuing the relationship is considered. She adds that the future relationship to be

similar as the belief in the fundamentals of the perception of customer expectation

considered the range value.

Hsin and Scinlair (2003) state that performance measurement be judged as a

key factor in the organizational learning and business strategic changes are identified

for implementation of Total Quality Management often requiring changes in the

corporate culture and management style and measurements can either prevent, or

assist. The analyses of the case study for measuring productivity in the Department of

Customer Equipment Services report in the organization, including the test of staff

representations on the effectiveness of existing approaches for measuring productivity

and the five stages of measurement. These steps are: Total Quality Management

strategy and providing the objective performance information received, process

control, measuring, and basic results involving the promotion and recognition

performance. Here the organizational learning and collaboration are involved. The

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study finds the staff’s overall positive attitude to the productivity dimension, but there

are some obvious problems the including total apparent excessive emphasis on the

financial performance and insufficient attention to the customer satisfaction, quality

and labor relations. There are obvious drawbacks of personal productivity

measurement and, consequently, the connection as a reward and recognition.

Jones and Sasser, (2001) concluded that in the context of the service-profit

chain model they considered that the customers must be delighted not just satisfied

otherwise they were ready for defection to rival companies. The authors dismissed the

word of the mouth in service sector that the business to customers (B2C) relationship

considered strong with any customer who described him or herself as satisfied.

Finally, Jones and Sasser clarified different ways to listen to external customers and

gauge their truthfulness.

Hall (1996) concluded that the organization irrespective of following quality

experts’ specific tools, procedures, methods to make their organization more

competitive advantage means that an organization must be functioning with the

customer-oriented approach. Unfortunately different types of quality management

programs and efforts to improve the competitiveness took a rather incomplete view of

potential customer participation in the process. Their article examined recognizable

roles that the stakeholder played in both the manufacturing and the service

organizations.

Schneider and Bowen (1995) found that the customer orientation meant the

organizational commitment to the customers such that the customers and the firms

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shared interdependence, values, and strategies over the long term. To do this, the

firms fostered the direct customer contact, collect information from the customers

about their needs and used the customer-supplied information to design and deliver

products and services.

Gersuny and Rosengren (1973) argue that diverse customer roles need new

bonds of interdependence and an increasingly complex social network that cross

traditional organization limits. They identify four distinct roles for customers:

(a) resource, (b) worker, (c) buyer, and (d) beneficiary.

Schuler and Harris (1992) conclude that the internal customers’ feedback

should be handled effectively to ensure in a consistently met organizational quality

requirements. Formal delivery schedules, logistics procedures, and agreed-upon terms

of behaviour can be negotiated and planned. If the customer’s provided information

is incomplete or inaccurate, or if he makes commitment of funds or time that he does

not meet, his inputs makes the quality more difficult to achieve. Well-suited resources

contribute to the quality by reducing rework and returns.

Bowen (1986) argues that if the organizations treat their employees as internal

customers in a manner of partial customers and make challenge for their mangers to

meet their needs in a courteous and high-quality manner, these employees will feel

free to meet the needs of the customers. Perhaps, if the customers are treated as

"partial employees" and provided with the direction, ability, and motivation to

contribute to production processes, they will feel free to participate more fully in

producing the quality outcomes.

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Successful managerial practices should have quantifiable propositions for the

employees’ attitude and the organizational performance. The suggestions for a

changed employee behavior and quality of work life (QWL) experiences cover a

broader range of workplace area. Numerous of these have been decorated in the

workplace writing, including reduced conflict with management, employee

citizenship, internal strife among the employees, and increased meaning and

satisfaction in work. They organize the discussion of these consequences into

outcomes fundamental to the organizational success also those fundamental to

worker’s dignity.

Miller and Rein (1969) demonstrate that the internal customers can participate

in the managerial decision making especially in personnel selection, performance

appraisal, development of policy by proper feed back, and the measurement of

accountability. Ulrich (1989) argues involving the customers in determining the

organizational policies and practices as a vehicle for mixing loyalty and commitment.

Morgan and Hunt (1994) argue that the producers and the potential customers

have strong associations that can have a profound effect on perceptions of worth.

Magrath and Hardy (1994) provide that the subjective evidence that acts as a link

between the stake holders such as customers and the firms create both improved

perceptions of quality and reduced costs. Finally, the relationship marketers have

argued that because perceptions of quality are subjective and changed over time as

needs, circumstances, and alternatives shift the relationship develop between a firm

and its customers that is essential for the competitive advantage.

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Whitener et al., (1998) conclude that the core strategy behind many modern

work practices is meant to explore an increased commitment and an increased

employee involvement to the organization and its goals. Achieving the organizational

litheness and responding efficiently to changing economic conditions rapidly depends

on the cooperation between the employees and the management beached in trust,

commitment, and participation.

When the job involvement, sense of competence and job satisfaction had three

attempts, the quality of work like index, the framework for the study to the causal

relationship between these variables length, the managers and researchers have

developed an idea like this, identified variables would be very important to handle and

manipulate in the work setting. The staff join the organizations into work with them

along-with their values. As, in connection with the work and the organizational

environment, they find themselves challenged and turned on by their work and

organizational factors based on their experiences, the individuals, then a couple of

choices about the extent to which they want on their jobs and invest in the work. This

is how the staff performs their jobs and working environment, as they can involve

only minimally in their jobs. It is a time gap between their interfaces with the work

environment and their ego involvement in their jobs.

Sekaran (1989) postulates that the job satisfaction of employees at work can

improve the quality of life of labor and dedication feeling of competence. The results

show as to what influence personal professional and organizational factors, it is the

climate, the ego investment or employment participation of people in their jobs, which

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in turn influences the intra psychic reward, sense of competence that they experienced

it directly and then the satisfaction of employees. Jauch and Sekaran (1978) examine

the satisfaction with the work that an index of effective responses of employees to the

work stoppage has a variable interest to the administrators and researchers alike for a

long time. In addition to the intrinsic desirability of employees at work, are satisfied,

the administrators are also in the labor market participation of workers. It increases

the target commitment deals and reduces turnover.

Oldham and Hackman (1975) state that satisfaction with the work that has

been studied extensively, a function of several variables especially the important

characteristics of the work itself is the organizational climate. The job characteristics

in many studies the job satisfaction has been found to affect the employees.

Rabinowitz and Hall (1977) state that a number of factors play their role in the

organizational climate, such as communication and participation in decision-making,

stress and its relation to satisfaction at work and study to be reliable forecast. During

the two-way communication through (Bateman, 1977; Price, 1972) and in the search

for solutions in the context of participation (Patchen, 1970; White and Ruh, 1973) it

has a positive effect on job the satisfaction, while the negative stress relations in the

sense that the higher pressure of employees is less satisfied with them (Bhagat,

experienced in 1982 , Lyon, 1971). In addition to certain moral values it is found that

job satisfaction depends on the intervention variable job involvement (Kanungo,

Misra and Dayal, 1975).

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Renzl, Matzler et al. (Try 2003) state that efforts to staff a high level of

productivity, promote entrepreneurship positive organizational settings such as job

satisfaction and organizational commitment are on the way. With the advent of

"knowledge economy", staff satisfaction, and retention have become the major issues.

Peter Drucker (1997) states that the main strength of the developed countries

is the educated workers as then knowledge works as the mobile resource, which is

kept in people's minds, and a headworker easily can take it with you. It is, therefore,

necessary to obtain and retain the highly qualified and efficient staff.

Some research on manager-subordinate relationship shows that trust is an

important predictor of the job satisfaction. Driscoll (1978) shows that the employees

involved work as decision-makers and they may increase their satisfaction at work.

Lagace (1991) finds that the mutual trust also plays the fundamental role between the

managers and the sellers as it increases job satisfaction of the subordinates.

Rich (1997) states that trust is directly influenced by the managers who meet

the staff at the workplace, and the presenters are responsible for many tasks, direct

influence subordinates, such as performance appraisal, promotion, adoption, throws,

area designation, training, deployment, and so on. Rich argues that the subordinates

are more satisfied with their work if he is honest and trustworthy. The competent

managers can be trusted. He confirmes this hypothesis study on various managers and

vendors. The study on trade alliances to develop and maintain relationships with

customers is trustworthy.

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Smith and Barclay (1997) show that the trust behavior affects the perceived

job performance and mutual satisfaction (such as the extent to which both partners are

defined relatively poor) and the mutual trust is perceived as direct and indirect effects

(through trust behavior) to meet. Pillai ET al. Tested (1999) define a comprehensive

model of the relationship between the transactional leadership and the

transformational one, distributive justice and procedural guarantees. The

organizational commitment and the organizational citizenship are quantitative in two

studies. Their results show that confidence in the leader intervenes the relationship

between the leader and the behavior of job satisfaction.

Flaherty and Pappas (2000) study the relationship between the sellers and the

managers and it has taken a strong impact on quality. Goris et al. (2003) presents the

results of the empirical research on two companies. He has reason to trust the

authorities and then influence on the predictors of performance and satisfaction etc.

Brashear et al., (2003) finds that interpersonal trust lies in the overall value

and respect in the subjects most closely related to one another. Their empirical

research, trust is associated with job satisfaction and the organizational commitment

both directly and indirectly.

The impact of such employee-relation programs has been examined as a

formal complaint resolution process, formal participation processes and employee-

attitude survey, and employee-suggestion systems. The employees have sought ways

to resolve conflicts or unfair treatment in workplaces through unions. However, since

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there has been a decline in unionization in workplaces due to enforcement of effective

human resource management applications, more private companies have turned their

efforts to developing employee relations programs, such as complaint resolution

processes, formal employee-participation programs, and routine employee-attitude

surveys to maintain and increase employees' satisfaction and the firm’s productivity.

Deming (1986) finds that the dedication on the part of employee has positive

relations to quality work as innermost to a successful total quality management

program. The remaining member’s commitment of the organization is crucial to

quality. Brooks and Zeitz (1999) suggest that employment in long term contributes to

quality at least two ways, it helps more effectiveness generate the kind of implied

knowledge of operations of the organization, and it further helps the organization to

gain advantage from investments in trainings to enhance the required knowledge and

skills. Some researchers mention the importance of long term employment

commitment from the employee although for others employment longevity is only

implicit.

Magretta and Stone (2002), Melnyk, Stewart and Swink (2004) assert that

performance measurement is the vital factor while transformation of mission strategy

into reality. They focus to define that all the operational activity or associated

performance describes the organizational strategy towards their mission and provides

a clear picture of organizational system for the management of the performance

elements. They add that the employee performance measurement describes a limited

range of performance management system and it enables the organization to represent

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the key elements and their ongoing strategy suitably. (Giffi, Roth, and Seal 1990;

Kaplan and Norton 1993, 1996, 2000; Khurana et al. 1998; Evans 2004).

The operational and financial indicators are used to compare organizations

with their competitors in the shape of benchmarking against the defined parameters to

evaluate the past performance and compare the level of their application which may

enhance the dealing of the dealers or stakeholder in a rational manner. The

fundamental objective of the benchmarking is to compare the best practices

implemented by the targeted organization with limited identified performance

parameters that provide an ample opportunity for corporate management to make

rational decision for the development of the organization. If they implement many

elements of performance measurement that may lead to uncertainty, employee

overloaded, personnel biased, uneven decisions and ultimately is not so good for the

organizational performance (Melnyk, Stewart, and Swink 2004).

Jackson (1991) examines as to how the fair practices of the HR professionals

along-with enabling environment may build up and maintain internal customer in a

right direction as devised by the top management such that the marketing perception

is implemented on an intra organizational basis. Likewise, Bowen (1996) explains as

to how the importance of organizational functions to achieve their objective and

especially HR can control positively the satisfaction of both its internal customers (the

employees) and external customers. They provide the proof that satisfaction levels in

these internal and external markets are associated with the organizational

performance.

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2.7 Research Model and Hypotheses

The original model that was developed by Heskett, Jones, Loveman, Sasser

Jr., and Schlesinger in 1994. In it they state that the service-profit chain ascertains

relationships among employee satisfaction, customer loyalty, customer retention,

productivity and the organizational profitability. In the modern economics of service,

the employees directly are responsible to interact or to have a contact with external

stakeholder and the internal customers must be the center focused of the management.

The modern management techniques consider the factors which are very important

for improving the profitability in the new paradigm of services that organization not

only invests in employees to enrich their knowledge, skills abilities through general

and specific ( organizational required and tailored) training programs, but also

provide them with necessary technical Customer Support Management. They must

reconsider their recruitment process, teaching methods and introduction of a fair

system of rewards for performance to improve the organizational growth in an

efficient and effective manner.

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Service-Profit Chain Model by Heskett, Jones, Loveman, Sasser, Jr.

ADOPTED CONCEPTUAL MODEL INTERNAL SERVICE QUALITY

Operation Strategy and Services Delivery System

Retention Repeat Business Referral

Service concept Results for customer

Service designed and

Delivered to meet the

Target customer’s needs

Work Place Design

Job Design

Employee Selection and Development

Employee Reward and Recognition

Tools For Serving Customers

Internal Services Quality

Employee Satisfaction

Employee Retention

Employee Productivity

External Service value

Customer Satisfaction

Customer loyalty

Revenue Growth

Profitability

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The service-profit chain model has been developed on the basis of different

analysis of successful organizations of services sector shows significant relationships

among employee satisfaction, customer loyalty productivity and profitability. The links in

the chain are like the customer loyalty dependant on the organizational profit and growth

and it is analyzed that satisfaction largely is subjective by the value of services provided

to the customers. The employees’ satisfaction not only creates value for the customers but

also leads to loyalty, productivity and in turn, the employees will enhance the


The individual contributions towards the service profit chain model to work are as

follow:- Jones and Sasser (2001) suggest that for the model to work, it is necessary that

your customers must be satisfied completely not just satisfied. They dismissed the

common faith that the organization-customer association is strong with any customer who

describes him or herself as "satisfied." They further explain as to how efforts meant to

create highly satisfied customers worth while are more than their expense.

Reichheld (2000) suggests that the customer and the employee both are two

critical links in the service-profit chain model. The organizations that wins employees'

and customers' loyalty activates a righteous cycle which results in customer loyalty

improved profitability, that enables the organization to better pay, attracted and retained

the best employees. These employees’ performance not only improves further the

productivity but also provides the best deliverable customer service and that ultimately

wins still higher profits and greater customer loyalty. Reichheld further explains that the

organization must identify and retain loyal customers with structure offerings that

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promoted loyalty by targeting and meeting the customers needs and recruit, and retain

loyal and to potential employees.

Leonard and Heskett (1991) suggest that the customer satisfaction and loyalty are

vital ingredients in the service-profit chain model, the core logic behind the model that

promising customers what they say they meant it. They describe with different exemplars

of service model and suggest various characteristics which support employees who are

directly concerned with the stakeholder and enable them to form a mechanism to do what

is best for their customers.

The customer is the prime factor for business traditionally, ‘the customer is

always right’, is a well-worn slogan. Moreover it is identified that overloaded, un-trained

and poorly equipped employees are totally unable to deliver quality services to their

customers and that may affect the organizational revenues and growth. The modern era

employees are getting the most importance due to the competitive environment and the

management must practice the equal effort to attract, motivate, and retain potential

employee as they effort to attract, motivate and retain customers. The greater shareholder

profits meant more capital is available to invest in the worker and so the circle continues.

It is also identified by the researchers that overloaded and less paid staff leads to

high sickness and absenteeism at work, and even the management provides a temporary

cover and that it also took time to understand the organization values culture and the

reality of the assignment and it may not be trained in all tasks or are not suited to less

experienced staff. The temporarily employed job is covering the existing load of the job

work but compromising the long term results.

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The under trained employees make different types of mistakes due to lack of the

know-how as to how to get it right first time which annoys the customers and increases

the workload as well as the wastage. In the aforesaid situation the employee's confidence

decreases and the stress level increases. Definitely, the right training not only builds the

confidence but also gives them product knowledge, enhances the skills and abilities to

handle their customers effectively and efficiently within or without the organization. If

the management pays below the market rate, they will attract the individual who needs to

be more trained to do that job in an effective manner otherwise the fantastic induction and

training program will lead to productive worker on long term basis. The employees have

to do their homework and find out the current rate for a similar job, and decide where

they want to ground their pay.

2.8 Specific Gap found in the literature

This study is unique in number of aspects as identifying gaps in existing research

and it may add value to literature as well:

Earlier studies are focused to service quality considering the marketing

requirements to cater the demand of the external customers and business management and

mostly researcher highlight or explore the quality service with different dimensions to

increase in organizational, revenue , growth, profit and customer satisfaction and its

consequences by (Skrinjar et al., 2007, Skrinjar et al., 2008).

155

The previous literature proves that the specific research in the context of banking

sector not yet be properly focused with the selected variables and dimensions to identify

the HR practices in a proper manner to improve the organizational performance and its

impact on employees as well by (McCormack, 1999).

Skrinjar et al., (2007), McCormack, (1999) recommend that the important aspect

of organizational performance must be examined in the business sector, specifically the

financial sector. This is the first study proposing an ISQ Model of HRM is practical and

unique in nature in Pakistan and not even a single researcher minds to highlight the

Perceived Internal service quality in terms of HRM with respect to targeted public and

privatized sector of Pakistani banks. Further more, this study highlights the importance of

this model for the regulator class to make a standardized framework for all the financial

institutions in Pakistan.

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2.9 RESEARCH MODEL (MODEL OF SERVICE)

Based on the model of Heskett et al., (1994) The researcher coined the Model of

Service to include the basic idea of service and has changed it by excluding some items,

such as the external variables external customer satisfaction and loyalty and their aspects

and designed to meet the direct chain through the development of the Internal service

quality that is perceived in terms of human resource management practices based on rates,

human resource management practices as determinants of perceived internal services and

thus the internal service quality is turned into the job security of the staff and satisfaction

and more directly the employees’ deductibles and employee productivity, transfer if the

Perceived Internal Services Quality

Employee Selection

Employee Rewards and Recognition

Employee Training

Work Design

Employee Satisfaction

Employee Retention

Job Definition

Employee Productivity


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employee receives from the organization, it will involve more production, which results

in the performance of the organization.

The sequences of association between the perceived internal service quality,

employees’ satisfaction with internal services and quality, even with the attribute of an

active employee selection, his reward, and recognition, staff’s special training to perform

the job effectively with the help of job definition and design. The employees’ satisfaction

is considered one of the most important drivers of quality, customer satisfaction, and

productivity.

The employees’ satisfaction always has been an important issue for the

organizations. The organizations need understand the great opportunity that lies before

them in order to prioritize high of this type of practice to increase job satisfaction. It is

commonly known that an unsatisfied employees is not more productive as compared to a

content employees and he is not creative and committed to come to the expectation of the

employer. Focusing on the employees’ satisfaction and its impact on their motivation and

productivity, researchers have conducted several studies on employee empowerment and

participation (Drucker 1954, 1974; Likert 1967; Spreitzer, Kizilos and Nason 1997, Ouchi

1981, Pascale and Athos 1981). The participatory style of leadership is a process in which

the employee participates in decision-making processes that are otherwise unequal

hierarchical (Locke and Schweiger 1979, Wagner 1994) involved. He is also obliged to a

continuous improvement and quality. The employee’s satisfaction, that is a direct

influence on the process of internal service quality perceived. It is said that when an

employee is happy in the organization in terms of second career, planning, rewards and

compensation in turn, retention etc he proves to be more productive. The research

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suggests that the employee’s satisfaction with the work environment is positively

correlated with the shareholder value.

Traditional measures of the losses arising from the fluctuations are considered

only the cost of recruiting, hiring, training, and exchange. In the services sector it is the

real cost of turnover for the loss of productivity and reduced customer satisfaction. The

employees are loyal and productive for the organization if they are happy and in return,

the job satisfaction of its incomparable results and organization it can be used at the

optimum level of performance to capture more market share and growth of the company.

Traditional measures of the losses incurred by the employee turnover, only the costs of

recruitment focus the adjustment and replacement. In most service jobs, the real cost of

turnover for the loss of productivity reduces the customer satisfaction. The value is

created by satisfied, loyal, productive employees. If the administration gives importance

to the employees’ satisfaction it in turn, results in quality services, but also very friendly

and management policies enable the employees to positive results that improve the


The chain also defines the facets of the perceived internal service quality and it

further leads to business environment that has the satisfaction of the employees. The

internal service quality is the feelings that employees are measured with at their jobs. The

determinants of the internal service quality are the employees’ selection, bonuses and

employee recognition, training, job design and its definition.

Recruitment is a systematic process of selection of such candidates who are

eligible and have the required qualifications for the job. Selection is the main and the

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first factor, which plays a key role as a survivor. Management should particularly be

careful when dialing new employees for the application of choice. Consideration should

be given to necessary individual skills (candidate for the organization to fit the scale on

which the employees are to harmonize the value and culture of the organization). By

selecting a suitable candidate for the right job, the quality of service automatically

enhances.

The second important determinant of the perceived quality of internal services is

the employees’ reward and recognition. The employee’s reward’s and recognition

includes a focus on the employee and peer recognition through the use of several

methods.

The third important factor that determines the perceived internal service quality is

to train and develop employee’s capabilities. Training is the process by which a worker

acquires skills for his job, and this is an important component of the successful business.

Staff training is often in the organization to improve the performance. Filipe et al. (2004)

are divided into special and general education categories. In term of general education the

employee are focused to improve the organizational required knowledge for their

products in the form of training or education, and special training is focused to improve

performance.

Stassen and Templer (2003) explain that education’ plays the main role for the

older employees with the organization of such training, the motivation of the employees

increases. But learning is a different phenomenon than that of the researchers. Robotham,

(2004) explains that learning is an integral part of development. Harper, (2004) focused

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on training of staff in relation to communication skills. The customer handling companies

should train their staff in communication skills. It helps develop them to retain their

customers and business.

Training plays a vital role in the employee’s performance, job satisfaction and

retention. In addition, if an employee is not adequately trained it is hardly possible to

utilize his potential fully leads to increase the organizational productivity. A poorly

educated workforce will eventually lead to poor performance and it will result in a

horrible mistake.

The fourth determinant of the perceived internal service quality is the work design

which has a greater influence on the organizational performance. The design work has a

significant and positive impact on the customer’s satisfaction which in turn significantly

hamper the organization’s work and goals of the organization, new service standards and

client systems.

Morrison et al. (2005) finds that the design has a high degree of control over the

participation of employees as it offers opportunities for the expanded growth and

implementation of employee skills. He adds that the work design and the intended use of

it has a meditative effect on the work management skills and satisfaction.

The fifth factor is perceived the internal service quality definition problem that

can be defined and linked in ways that work basically is the mechanism or motive for the

development proper work helps overcome frustration and enable the employee to

contribute more productive, blankets, and the performance of their duties.

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The basic insight of the management to increase the productivity level of the

employee is by offering different types of non monetary rewards that lead to greater

satisfaction by a sense of personal achievement and responsibility, Job simplification,

rotation, enlargement, and job enrichment are the various techniques used in a job

definition exercise.

Gan and Kleiner, (2005) argue that the role of job definition is very important in

business environment and it help the employee as well as for the manager in decision

making. The manger can get help regarding the decision whether the employee is the

right person for promotion. The employee gets guidance from the job description to know

as to whom in the organization he will report to, what his basic responsibilities are and it

also provides him adequate information about the performance appraisal process.

Bednarek-Michalska (2002) state that the definition of job depends on the person

who allocated the tasks within the organization. He additionally states that approach of

the human resource manager will be different than that of the direct supervisor who

knows the specifics of the job. Therefore, it gives sense to say that special care is needed

before writing the job description for the employee. The job definition make the

organizational structure clear and it also indicates the high organizational culture.

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2.10 RESEARCH HYPOTHESES

On the basis of relevant literature and model proposed above the following

hypotheses are formulated:-

Hypothesis 1

The internal services quality is positively associated with the organizational performance.

Hypothesis 2

The employee satisfaction is positively associated with the organizational performance.

Hypothesis 3

The employee retention is positively associated with the organizational performance,

Hypothesis 4

The employee productivity is positively associated with the organizational performance.

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CHAPTER 3

RESEARCH DESIGN AND METHODOLOGY

3.1 Pilot Study

Prior to embarking on conducting of surveys to measure the impact and potential

of internal service quality in business process of Pakistani banks and its relations to

organizational performance, the pilot study was conducted to understand the sample

populations as its implicated various public and privatized banks of Rawalpindi-

Islamabad and almost all the banks have their presence in these cities duly controlled by

their Regional Offices/ Area Offices. For the analysis of research work, the data has been

collected about the employees of public banks i.e. National Bank of Pakistan, First

Women Bank and privatized banks which included Muslim Commercial Bank Limited,

United Bank Limited, Allied Bank Limited and Habib Bank limited, operating

commercially in the aforesaid selected areas. Structured questionnaire was designed, 5

point Likert’s scale was used in questionnaire covering both extremity of strongly agree

and strongly disagree. Total sixty four questionnaires were distributed randomly to

selected bank’s employees out of total 52 questionnaires were collected back.

Consistency of the questionnaire was checked through reliability instrument as shown in

3.1. Pearson Product correlation was executed to check the formal association among

variables as shown in 3.2. Item wise descriptive statistics was executed supported by

reliability co-efficient and mean, standard deviations was checked of each item of

questionnaire.

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Table 3.1 .1

Reliability Statistics of the Instrument

Items Reliability Statistics

a) Internal Service Quality (in percentage)

i. Employee Selection .867

ii. Employee Training .817

iii. Employee Reward and Recognition .784

iv. Work Design .859

v. Job Definition .836

b) Employee Satisfaction .892

c) Employee Retention .912

d) Employee Productivity .871

e) Organizational Performance .924

The facets of the perceived internal service quality, i.e. employees’ selection

consisted of four questions in all. The statistical result proved that its alpha was .867

percent. The alpha of employees’ training, than rewards and recognitions, work design

and job definition were .817, .784, .859 and .836 respectively. The same was measured

for the employees’ satisfaction, their retention, their productivity and the organizational

performance and they were found to be .892, .912, .871 and .924 respectively.

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3.1.2 Correlation Matrix

Based on the questionnaire distributed among the employees, the Pearson product

correlation of six variables was tested leading to 52 observations. All the variables like

ISQ (Internal services quality), EJS ( Employees’ Job Satisfaction) ,ER ( Employees’

Retention) ,EP ( Employees’ Productivity) ,OP ( Organizational Performance). To test the

hypotheses, the researchers, usually preferred to suggest a correlation besides other

statistical tools. Similar technique was used to get help from the correlation. The

statistical results of the study proved that all the related variables were positively

associated with one another. The strongest correlation was found between the

organizational performance and the employees’ productivity which was reported to be

94%. Other related variables’ correlations were also found positive. Although it supported

the hypotheses but the other statistical tests were also needed to be used to give a clearer

picture. The same approach was adopted and all the variables were tested further for

regression.

Table 3.1.3. Correlations Matrix of Variables

ISQ EJS ER EP OP

ISQ 1

EJS .358** 1

ER .159* .306** 1

EP .215** .249** .078 1

OP .165** .302** .951** .055 1

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

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The instrumentation of this study consisted of a questionnaire besides other tools

of primary data collection. The validity measurement of the instrumentation was

necessary, therefore, the researcher intended to ensure the validity of the questionnaire

used for this study. Chrone bach alpha has been found for all the items of the variables

used in the questionnaire.

Table 3.1.4 Descriptive Statistics of Questionnaire Items

DESCRIPTIVE STATISTICS Mean SD

Internal Service Quality

Employee Selection (alpha =.867)

We select employees who can provide ideas to improve the business process and

the organizational performance.

3.89

.99

We use attitude /desire to work in a team as a criterion for employees’ selection. 3.63 .80

We use problem solving aptitude as a criterion for employees’ selection. 3.71 .89

We use work values and behavioral attitude as a criterion for employee selection. 3.66 .86

Training and Development (alpha =.784)

There are extensive training programs for its employees, regarding all aspects of

quality

4.03

1.12

Employees for each job normally go through training programs every year. 3.45 1.01

Training needs are identified through a formal performance appraisal

mechanism.

3.45

1.10

There are formal training programs to teach new employees the skills they need

to perform their jobs effectively.

3.98

0.98

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Reward and Recognition (alpha =.859)

Job performance is an important factor in determining the incentive

compensation and reward for the employees.

3.60

1.39

Compensation is decided on the basis of competence/ability of the employee. 3.01 1.10

Salary and other benefits are comparable to the market. 3.43 1.10

Employees know that their pay and benefit package are well above industry or

community norms for work of comparable values.

3.36

1.11

Work Design (alpha =.859)

The job requires me to utilize a variety of different skills in order to complete the

work

4.15

.57

The tools, procedures and materials used in the job are highly specialized in

terms of purpose

4.15

.61

The job involves interaction with the people who are not members of my bank 4.11 .54

Job Definition (alpha =.836)

The work performed on the job has a significant impact on the people outside the

bank

4.10

.50

The duties of every job are clearly defined 3.71 .79

Each job has an up-to-date job description 3.72 .72

The actual job duties are shaped more by the employees’ than by the formal job

description

3.79

.

84

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Employee Job Satisfaction (alpha =.892)

The job description for each job contains all the duties to be performed by

individual

4.00 .83

I am very proud to tell others that I work with this bank. 4.43 .79

I am willing to put in a great deal of effort beyond what is normally expected in

order to help the bank to be successful.

4.55

.66

I find that my own and the bank’s values are very similar. 3.63 .94

This bank really inspires the best in me in the way of job performance 3.97 1.00

I talk of this bank to my colleagues as a great bank to work with 4.12 .94

The employees of my bank want to have long term relationship with it. 4.34 .80

I participate in the bank’s development process. 4.11 .70

For me, this is the best of all the banks with which to work. 4.24 .77

Employee Retention (alpha =.912)

My bank treats its employees equally.

4.63

.62

My bank always lets me know what is going on that I do not usually find out

from my colleague.

4.03

.93

Management is really concerned with whether employees are happy at this bank. 3.73 .94

There are many opportunities of advancement at this bank. 3.48 .98

My bank recognizes its employees for the work they do. 3.20 1.13

There is pride and camaraderie in this bank. 3.52 .94

My bank puts in efforts to understand its employees’ needs. 3.73 1.03

At my bank, big changes are implemented professionally. 4.24 .82

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Employee Productivity (alpha =.871)

The employees take care of each one other. 3.68 .91

The team spirit prevails among all the employees. 3.59 .86

The employees work like a family. 3.96 .66

The employees have friendly relationship with one another. 3.96 .72

Team work is preferred over individual tasks. 3.53 .84

The employees view themselves as independent individuals who have to tolerate

others around them.

3.46

.86

The employees are ready to sacrifice for betterment of the bank 3.84 .85

The employees are highly committed. 4.06 .92

Organization’s Performance (alpha =.924)

My bank is enjoying good reputation in the industry 4.61 .67

My bank is enjoying a higher success rate in launching new products and

services.

4.03 .94

My bank is enjoying high customer loyalty. 3.75 .93

My bank is continuously experimenting with new ideas and approaches on work

performance.

3.53

.95

My bank’s system and procedure support innovation. 3.27 1.09

My bank provides product and services, which are considered of high quality. 3.55 .92

My bank’s top management /leadership provides sufficient career making

opportunities.

3.75

1.02

I am satisfied with the financial success of my bank. 4.24 .82

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3.2 MAIN STUDY

Purpose of the Study

During the previous one and a half decades the financial and banking sector in

Pakistan has observed a substantial transformation from a sluggish government

dominated sector to a more receptive and competitive one. The case of Pakistan’s banking

and financial sector is mentioned as a major triumph story on as to how reformation and

privatization can change a sector which can contribute considerably towards business

process and economic development. Since Pakistan has also opened its entrance for the

foreign commercial banks and a number of multinational banks are in a process of getting

hold of such smaller banks which have a superior branch networks. Similarly, some new

business groups and investors are buying out foreign banks’ business in Pakistan. All

these alterations in financial sectors of Pakistan are posturing main challenges and

competitions for the banks to make improvements and enable their operations remarkable

growth by delivering quality services and providing them with more facilities.

The banking and financial sector in Pakistan has been growing significantly

despite its social and economic problems. All the development in the services’ sector was

only because of potential human resource, but unfortunately the banking industry was not

considering the due importance of the optimum utilization of human resource for the

accomplishment of organizational objectives. All the schools of thought in the advanced

countries, as highlighted in the literature review, came to the conclusion that the proper

implementation of human resource functions will not only be able to lead the

organizations in a competitive era but also will make it more value-added.

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However, only a few studies were found which made an effort to determine the

relationship of some elements of internal service quality in the context of human

resources management practices and its relations to the organizational performance. We

examined internal services quality considering the most important elements of internal

human resources management and its impact on the organizational performance. This

study is initiated to accomplish this aim. The main objectives for conducting this research

are as follows:-

To provide an insight in to the process of improving the internal customer

satisfaction

To analyze the internal services quality in HRM for improving business process in

Pakistani banks.

To identify the proper application of human resources practices in the banking

industry.

To analyze the perceived relationship exists among ISQ, Employee Job

Satisfaction, Employee Retention, Employee productivity and organizational

performance.

3.2.1. Sample

This study was conducted in twin cities of Rawalpindi and Islamabad. Almost all

the major Pakistani banks have their branch offices in these cities duly controlled by their

Regional Offices / Area Offices. For the analysis of research work, the data has been

collected about the employees of public banks i.e. National Bank of Pakistan, First

Women Bank and privatized banks which included Muslim Commercial Bank Limited,

United Bank Limited, Allied Bank Limited and Habib Bank limited, operating

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commercially in the aforesaid selected areas. Random sampling techniques were adopted.

The sample was mainly categorized into six Banks which consist of 120 branches

including their controlling offices in the twin cities respectively. The data for the study

was collected from 450 employees of the above mentioned banks through a specifically

designed questionnaire covering various attributes that the employees recognized and

experienced /practiced as important in their choice of a bank, they were working with.

A total of 450 copies of the questionnaire were distributed to different bankers of

selected areas and 400 copies of the same were collected back. Thus, the response was

approximately 89%. The sample size of 400 respondents meet the minimum requirement

of different statistical tests like regression analysis, factor analysis, t-test and analysis of

various and ultimately of structural paths. This criterion is consistent with the early

research (Tatham, Anderson, Hair& Black, 1992).

3.3.2. Measurement

Data measurements were carried out through the questionnaire. A questionnaire

consisted of six parts. Measures of each part of the questionnaire described as follow:-

Demographic portion consisted of seven questions regarding gender, ages of employees,

educational level, types of banks, work experience with the organization departmental

information, and position held in the organization. The other parts measurement were as

follow:-

Internal services quality: The internal services quality was further categorized in

five components and each component comprised four questions. These questions were

based on literature review and they were used in different studies. 5 point likert - scale

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was used to analyse the questions (1=strongly disagree, 5 strongly agree). These were as

follows:-

Employees’ Selection: The respondents were asked to indicate their opinion

regarding recruitment process in accordance with attitude, aptitude, team work

and skills necessary to perform a job and their contribution in business process.

These four items were selected from Sohel and Schroeder (2000). The alpha

coefficient reported was α = .837

Employees’ Training and Development: the respondents were questioned

regarding training and development programs, regarding their job and

identification of training mechanisms and their results in terms of employees’ skill

and performance at their work stations. All these four questions were selected

from Singh (2004) and Qureshi (2006).The alpha coefficient reported was α =

.787

Employees’ Rewards and Recognition: The respondents were asked about

rewards and recognition system in the bank. The four items for the employees’

reward and recognition were from the collection of Singh (2004) and Qureshi

(2006). The alpha coefficient reported for these items was α = .747

Work Design: The respondents were asked regarding existing work design in the

banks. The four items selected for the work design were from (Morgeson and

Humphrey (2006). The alpha coefficient calculated for these items was α = .799

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Job Definition: The respondents were questioned regarding their views on job

definition of the employees. The four items selected for the job definition were

form Singh (2004) and Tahir (2006). The alpha co-efficient calculated for the job

definition was α = .726

Employees’ Satisfaction: Based on relevant literature, the employees of the banks were

asked about their job satisfaction. The items for this purpose were collected from Porter,

Crampton and smith (1976). The alpha co-efficient calculated for employees’ job

satisfaction was reported as α = .822

Employees’ Retention: To carry out the research work, the employees of the bank were

asked about their future planning and retention by their respective banks. The items for

employees’ retention were collected from Manage (2006). The alpha co-efficient for the

employes’ retention was reported as α = .812

Employee Productivity: It was investigated to measure the productivity of the

employees’ by asking from them the relevant questions. The items for the employees’

productivity were collected from. The alpha co-efficient for the employees’ retention was

reported as .771.

Organization’s Performance: One of the key items of this study was to know the

organization’s performance at large. The items for the organizational performance form

were collected from. The alpha co-efficient for the organizational performance was

reported as α = .824

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3.3. Procedures

3.3.1. Data Collection Procedure

The following data collection procedure was adopted in this research.

3.3.2 Observations:

Research requires data to be collected for further analysis. Beside other

modes of data collections, the researcher used the observational method. The

concerned banks were frequently visited. The performance of the employees was

critically observed. All the aspects linked with the study were endeavoured to be

measured during the observational data collection technique.

3.3.3 Interviews:

Face to face interviews with the employees of different banks were

conducted to collect the data and their HR practices that affected their

performance were discussed in detail. Personal meetings were managed and

organized with different bankers (management and front-line workers etc) with

the view to observing their business process and its relation to the organizational

performance or the way they worked and their office environments. The aim was

to analyze their responses and to bring to light the reasons behind. These provided

the base of observations to collect data.

3.3.4 Personally Administered Questionnaire:

A questionnaire to measure dependent variable (Organizational

Performance) and independent variables (Internal Service Quality, Employee Job

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Satisfaction, Employee Retention, and Employee Productivity) was structured and

made use of to collect the data.

3.4 Data Analysis Procedure:

After the data was collected from the employees selected for the study, it was

cleaned, coded and entered into the SPSS sheet for analysis. Dependent variable

(organizational performance) was transformed by taking weighted average of items

related to organizational performance likewise the items of Internal service quality facets

were transformed in same way by taking the weighted average of items related to each

dimensions of internal service quality such as employee selection, Training and

development, Reward and recognition , Job definition and work design. Transformation

of other variable like employees’ job satisfaction, employees’ retention, and employees’

productivity) were transformed in a same way using the SPSS. First of all data screening

techniques were applied to check out coded responses and outliers. In entire data only few

outliers were detected and it was deleted and then replaced the missing response by the

means of taking average of entire series. Normality of data was checked by mean of

different statistical tools like skewness, kurtosis and Q-Q plot and found to be

satisfactory. Reliability test was applied to the data to check the consistency of the

responses. The following statistical tools aided with computer (SPSS.17) were used in the

data analysis procedure.

The statistical tools used to analyse the data were mean, and standard deviations,

independent sample t-test, Factor Analyses, Correlation, Regression and ANOVA.

Normality of the data was checked by Q-Q plot. Normality assumptions of the data were

found satisfactory. Pearson’s product moment coefficient (Pearson’s correlation) was

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used to check the association among different variables under study. The regression

analysis was used to identify the significance of internal service quality, employees’ job

satisfaction, employee retention, and employee productivity to the organizational

performance.

To test the overall model of this study multiple regression analyses was employed.

Structural equations Path analyses were carried out by mean of AMOS to verify the

model and relationship among variables.

3.5 Confidence Interval and Level Of Significance

The confidence interval for the respective study had been 95 % with 5 % level of

significance. The significance of the variable was checked at 5 % level of significance.

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CHAPTER 4

DATA ANALYSIS, RESULTS, AND DISCUSSION

The aim of this chapter is to present the information obtained from the data

collection for the research study. This chapter includes the findings in respect of the

demographic information of the respondents, perceived the ISQ (Internal Services Quality

in terms of important human resource management elements like employees’ selection,

employees’ training and development, employees’ reward and recognition, work design

and job definition). Besides the facets of internal services quality, employees’ jobs

satisfaction, their retention, their productivity and ultimately the organizational

performance are also taken into consideration. Moreover, it is led to ask the bankers

regarding the job satisfaction, employees’ retention level in the banking industry of

Pakistan and further questions asked from them were about the employees’ productivity

and likewise the impact of all these variables on the organizational performance.

Sequential view of the chapter

The sample size consist 450 employees working in both the public and privatized

banks in Pakistan. Out of the targeted sample only 400 employees responded back. Thus

the 88.88 % of the respondents gave the information sought. While answering the

question regarding age, 71 respondents (17.8 %) reported their age under 30 whereas 65

(16.3 %) of the respondents reported their age between 30 to 39 age group 214(53.5%) of

the employees reported to be between 40 to 49 and only 11(8.1%) were above the age of

50. The main bracket of the age group was 53.5(5 %), which was 214 respondents, who

showed their age between 40 to 49 which depicted the experience and their response with

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respect to the study. It is much more important that this segment was working in the

targeted banks’ management/front-line employees and their tacit knowledge enriched

with the factual position and later on it would be confirmed in this chapter. The analysis

of this chapter contains six sections. Section 2 answers the 2nd and 3rd research questions

of the study where as section 3 and 4 deal with 4th research question.

Section 1 depicts the demographic information of the respondents by utilizing the

frequency distribution with respect to age, gender, educational level, bank type and work

experience which indicates clearly the perceptions of different bankers regarding the ISQ

modes.

Section 2 elaborates perceived internal service quality facets with respect to

demographic profile of the respondents, Independent sample t-test is used to check mean

difference of perceived ISQ facets with respect to demographic variables (gender,

educational level and bank type) with the determinants of internal service quality

(employee selection, their training and development, their rewards and recognition, work

design and job definition). However, ANOVA is employed to check the mean difference

within groups and between groups of demographic with the ISQ facets and other variable

in the research study.

Section 3 of the chapter describes the relationship computation between the

perceived internal services quality and employees’ job satisfaction by the means of

regression analysis. Moreover, casewise regression is computed to check the impact of

the internal services quality on the employees’ job satisfaction with respect to different

demographic information of the respondents.

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Section 4 describes the relationship computation among the employees’

satisfaction, employees’ retention and employees’ productivity by means of regression

analysis. In this section casewise regression is applied to check the perceived relationship

of the said variables with respect to the demographic variable.

In section 5 the significance of hypotheses is checked by mean of multiple

regression analyses of the organizational performance with internal services quality,

employees’ job satisfaction, their retention and productivity. Before executing the

regression analysis reliability statistics is used to check the internal consistency and

validity of the data of different variables as well as the items of the questionnaire, then

descriptive statistics is used to check the mean and standard deviation of the variables and

they have been linked with the correlation analysis.

In 6th section factor analysis is used for the data reduction purposes. The factor

analysis is the method which is used to decrease a large number of variables into less

number of factors. The factor analysis takes out maximum ordinary variances from all the

variables and put them into ordinary score. In the factor analysis communalities, KMO

and Barlett’s Test, total variance explained, Rotated component matrix is also used to

facilitate factor analysis.

Finally, the overall model and the hypotheses testing are described in section 7.

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Section 1

This section depicts the demographic information of the respondents by utilizing

the frequency distribution with respect to their age, gender, educational level, bank type

and the work experience which indicate clearly the perceptions of different bankers

regarding the ISQ modes.

4.1 Demographics profile

4.1.1 Frequency Distribution With Respect to Age

Table 4.1 Frequency Distribution With Respect to Age

The above table shows that out of total 400 respondents 71 (17.8%) are less than

30 years of age whereas 65(16.3%) of them fall in the age bracket of 30 to 39. The main

bracket of the age group is 53.5 %, 214 respondents are between the age group of 30 to 39

which depicts their experiences and also their response in respect of the research study.

The length of employees’ service is divided into four groups to differentiate

between practical approach towards the internal service quality and the organizational

performance in four segments of both the public and the privatized banks’ employees. It

Frequency Percent Valid Percent Cumulative

Percent

Under 30 71 17.8 17.8 17.8

30-39 65 16.3 16.3 34.0

40 – 49 214 53.5 53.5 87.5

Above 50 50 12.5 12.5 100.0

Total 400 100.0 100.0

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facilitates in evaluating approach of the employees of different banks with different age

segments.

Figure 4.1.1 Frequency Distribution With Respect to Age

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4.1.2 Frequency Distribution With Respect to Gender Table 4.1.2 Frequency Distribution With Respect to Gender

The above table shows that 328 (82%) respondents are male while 72 (18%) are

female of both the public and privatized banks in Rawalpindi- Islamabad, Pakistan.

The female segment of the sample is comparatively less participative in the

research work as per default as the females are authorized 10% shares of employment in

the public sector banks. Similarly, in the privatized banks the ratio of female employee is

also less according to the observations received.

Traditionally the female hesitate to undertake job in all sectors but hospital

industry and education. Consequently, the female participation in over all employments in

Pakistan is less. For the purpose of this research work, no separate data has been

evaluated except as mentioned above.

Figure 4.1.2 Frequency Distribution With Respect to Gender

Gender Frequency Percent Valid Percent Cumulative Percent

Male 328 82.0 82.0 82.0

Female 72 18.0 18.0 100.0

Total 400 100.0 100.0

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4.1.3 Frequency Distribution With Respect to Educational Level

Table 4.1.3 Frequency Distribution With Respect to Educational Level

The above table shows the educational level of the employees of both the public

and the privatized banks operating in Rawalpindi and Islamabad. It reveals that 132(33%)

respondents hold graduation degree whereas 268(67%) possess the masters degree.

In the banking sector the major workforce comprises educated employees.

However, the standard of education varies from bank to bank, on account of assigned

work. It becomes a point of interest to study the perceived internal service quality and its

relation to the organizational performance despite the various levels of education.

Hence, the employees of two groups only on the basis of education and there

perceptions towards the internal service quality are evaluated. It is found that the majority

of the employees are masters degree holders which shows their clear perceptions to

understand the importance of the internal service quality in the domain of human resource

management and its impact on the organizational performance and the graph below gives

a more clear view of the educational level of both the public and privatized banks.

Educational Level Frequency Percent Valid Percent Cumulative Percent

Graduate 132 33.0 33.0 33.0

Masters 268 67.0 67.0 100.0

Total 400 100.0 100.0

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Figure 4.1.3 Frequency Distribution With Respect to Educational Level

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4.1.4 - Frequency Distribution With Respect to Bank Type

Table No 4.1.4. Frequency Distribution With Respect to Bank Type

The above table shows the percentage of public and privatized banks’ employees’

participation in the research study, 286 (71.5%) respondents belong to the public sector

banks whereas 114 (28.5%) of them are from the privatized banks.

It is observed that a particular sector of the banks enjoys its reputation in

achieving of the organizational objectives which emanates the employees’ and other

stakeholders’ association with the public and privatized banks included in the study to see

the perception of the internal service quality in the domain of human resources

management and its relation to the organizational performance with respect to the

employees’ perceptions.

Figure 4.1.4 Frequency Distribution With Respect to Bank Type

Banks Frequency Percent Valid Percent Cumulative Percent

Public Banks 286 71.5 71.5 71.5

Privatized banks 114 28.5 28.5 100.0

Total 400 100.0 100.0

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4.1.5. Frequency Distribution With Respect to Wok Experience Groups

Table 4.1.5 - Frequency Distribution With Respect to Wok Experience Groups

Work

Experience Frequency Percent Valid Percent Cumulative Percent

6-10 85 21.3 21.3 21.3

11-15 48 12.0 12.0 33.3

16-21 72 18.0 18.0 51.3

Others 195 48.8 48.8 100.0

Total 400 100.0 100.0

The above table shows the participations of different brackets of work

experiences. 85(21.3%) of the respondents belong to the work experience of 6 to 10

years whereas 48 (12.0%) respondents belong to 11-15 years work experience and

72(18.00%) of the respondents are of the bracket 16-21. The most important participation

of different bankers is of 22 and above work experience.

It is envisaged that the employees’ performance and outcome have different

bearings with varying experience. It is found that major workforce consists of 22 and

above work experience in their respective banks. An effort has been made to evaluate the

internal service quality towards the organizational performance by employees of the bank

with different work experience and their level of understanding the importance of the ISQ

in the banks.

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Figure 4.1.5 Frequency Distribution With Respect to Wok Experience Groups

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Section 2

This section elaborates perceived internal service quality facets with respect to

demographic profile of the respondents, Independent sample t-test and ANOVA is used to

check mean difference of perceived ISQ facets with respect to demographic variables

(gender, Age, educational level Work Experience and bank type) with the determinants of

internal service quality (employee selection, their training and development, their rewards

and recognition, work design and job definition).

4.2. Independent Sample T- Test of Internal Services quality facets

with Respect to Gender.

Table 4.2.1 Independent Sample T- Test of Employees’ Selection With Respect to

Gender

Group N Mean SD T-Stat P- Value

Employees’

Selection

Male 328 3.8537 .69285 1.229 .220

Female 72 3.7361 .90372

Table 4.2.1 shows the mean values of both male and female respondents with

respect to the perceived employees’ selection variable, standard deviation, t- statistics and

p value.

It is assumed that there is no mean difference in both the groups’ perceptions. The

independent sample t-test applies on the basis of the assumption of equal variances and to

measure the difference between the selection climates of male and female employees of

different banks. The table further reveals that there is no significant difference in the

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perceptions of the males and the females with respect to the test variable i.e. employees’

selection (P>.05).

The table further reveals that the mean value of the male respondents is greater

than that of the female respondents (3.8537) which is closer to 4 “Agree”. It indicates that

the male employees give more importance to the employees’ selection as compared to the

female employees in the banking sector. However, if the mean values are compared the

male respondents are more towards the degree of agreement than the female with the

mean values (3.853) and (3.736) respectively.

They are almost the true predictors of our socioeconomic values prevailing in

Pakistan as the women before their marriage can manage the official timings easily, but

afterwards that it is hard for a few of them to meet the requirements of the long banking

hours as they have to manage their home as well and especially when they are managing

the higher responsibilities. One of the reasons of the significant difference between the

gender types of employees’ selection is that in our survey, the females have not shown as

much participation as the males.

In the modern era, the trend of management is observed through interviews in

various banks that have intention to hire the female employees instead of the male ones as

they perceive that the females are more service-oriented beings.

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Table 4.2.2. Independent Sample T- Test of Employees’ Training and Development

With Respect to Gender.

Group N Mean SD T- stat P- Value

Employees’

Training

Male 328 3.8811 .82091 2.900 .004

Female 72 3.5556 1.03310

Table 4.2.2. Reveals the mean values of both the male and female respondents

with respect to perceived employees’ training variable, standard deviation, t- statistics and

p value.

It is supposed that there is no mean difference in both the groups’ perceptions.

The independent sample t-test applies on the basis of the assumption of equal variances

and to measure the difference between the employees’ training and development practices

of both the male and female employees of different banks. The table further shows that

there is a significant difference in the perception of the males and the females with

respect to the test variable i.e. employees training and development (P<.05).

The table further shows that the mean value of the male respondents is greater

than that of the female respondents (3.881) which are closer to 4 “Agree”. It indicates that

the male employees perceive more training as compared to the female ones in the banking

sector. However, if we compare the mean values, the male respondents are more towards

the degree of agreement than the female ones with the mean values (3.881) and (3.556)

respectively.

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Training is linked to employees’ performance and retention, but the maximum

training organized by different banks at their Head Offices /Main Regional Offices

(Karachi & Lahore) and it is also the main constrains for the female employees of

Rawalpindi and Islamabad to attend frequently the scheduled trainings as compared to the

male employees because of the cultural issues and family commitments. It is a fact that

employees will not reach their full potential and higher levels of productivity unless they

are trained adequately. A scantily trained staff will finally lead to poor performance and

consequence in costly inaccuracy as well.

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Table 4.2.3. Independent Sample T- Test of Employees’ Reward and Recognition

With Respect to Gender

Variable Group N Mean SD T- stat P- Value

Employees’

Reward and

Recognition

Male 328 3.5030 .83501 -0.466 .641

Female 72 3.5556 .99136

Table 4.2.3 shows the mean values of both the male and female respondents with

respect to the perceived employees’ rewards and recognition variable, standard deviation,

t- statistics and p value.

The above table reveals the result of t-test which show that there is no significant

difference between the responses of both the groups (p>.05). The mean value of the

female and the male respondents is slightly different which is closer to 4 “Agree”.

However, if we compare the mean values to female respondents are more towards the

degree of agreement than the male ones with the mean values (3.503) and (3.555)

respectively. The results indicate that the female employees perceive reward and

recognition more than the male employees. The results, however, show that both the

males and the females are important to the bank on equal basis and the respondents

endorsed the practices practice by their respective banks while rewarding and recognizing

the benefit of their employees irrespective of considering the gender.

The table further reveals that there is no significant difference in the perception of

the male and the female with respect to the test variable i.e. employee rewards and

recognition (P>.05).

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The banking sector meets its own requirements of functional and operational point

of view as defined by the regulators and due to demanding and changing scenario of the

environment, it becomes more important for the banks to update each job’s requirements

considering their operational and functional ingredients which will enable the employees

to handle all the challenges at work station level efficiently and effectively. It is further

assumed during the research work through the respondents’ feedback that their

management in current competitive era is not able to compromise the basic and

demanding function of the HRM and that the rewards and recognition are based on the

performance results. But as for the public sector banks they still evaluate their employees’

performance on the traditional basis and it will effect not only the performance of the

potential employees but also it leads to de-motivate them and this trend is demanding

emergent need to implement the pay for performance in the public sector as successfully

implemented by the privatized banks. The privatized banks are getting more shares by

satisfying their employees and considering more on employments reward and recognition

on merit basis. It also plays a very important role to improve the employees intrinsically

for achieving the organizational objectives effectively.

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Table 4.2.4. Independent Sample T- Test of Work Design With Respect to Gender.

Variable Group N Mean SD T- stat P- Value

Work

Design

Male 328 4.1280 .49654 -0.971 .332

Female 72 4.1944 .64216


respect to perceived work design variable, standard deviation, t- statistics and p value.

It is understood that there is no mean difference in both the groups’ perceptions.

The independent sample t-test applies on the basis of the assumption of equal variances

and to measure the difference between employees’ work design of both male and female

employees of different banks. The mean value of the male respondents is greater than that

of the female respondents (4.128) which is closer to 4 “Agree”. It indicates that the male

employees perceive more importance to work design than to the female employees in the

banking sector.

The table further shows that there is no significant difference in the perception of

both the males and females with respect to the test variable i.e. work design (P>.05).

However, if we compare the mean values, the male respondents are less towards the

degree of agreement than the females with mean values (4.128) and (4.194) respectively.

The design of jobs has a critical impact on the organizations and the employees’

objectives. From the organization’s perspective, the way the tasks and the responsibilities

are grouped can affect productivity and the costs. Work that are not pleasing or are too

demanding may be hard to fill. Boring jobs may lead to a high employee turnover. For an

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employee, inspiration and contentment are exaggerated by the match between the job

features and individual requirements. Therefore, sympathetic design of jobs can help both

the organizations and its workers achieve their objectives.

The study further assumes that a bad work design is actually the cause of far more

performance problem than a manager and the employees realize to know the employees’

input. A good work design should contain an option for the employees to have various

activities according to personal needs, work habits, and the circumstances at the

workplace and gives the employees a sense of accomplishment, include training so that

the employees should know as to what tasks they are to perform and as to how to do them

properly, should provide good work, allows for an modification period for physically

challenging jobs, offers opinion to the human resources about their performance,

minimizes energy disbursement and force requirements.

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Table 4.2.5. Independent Sample T- Test of Job Definitions With Respect to Gender

Variable Group N Mean SD T-stat P- Value

Job

Definition

Male 328 3.8506 .55212 0.044 .965

Female 72 3.8472 .72500


respect to perceived job definition variable, standard deviation, t- statistics and p value.



measure the difference between the employees’ work design of both male and female

employees of different banks in Rawalpindi and Islamabad, Pakistan. The table further

reveals that there is no significant difference in the perception of the males and the

females with respect to the test variable i.e. job definition (P>.05).

The mean value of the male respondents is slightly greater than that of the female

respondents (3.8506) which is closer to 4 “Agree”. It indicates that the male employees

perceive more importance to job definition than female employees in the banking sector.

However, if we compare the mean values, the male respondents are more towards the

degree of agreement than the female with mean values (3.85) and (3.84) respectively.

The job description is prepared to explain the employees as to what their

duties/tasks are at the workplace. It also tells the employee as to where his duties end and

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where the duties of the other employee start in order to avoid any duty conflict and the

employees’ job duty related grievances.

The job description is an essential part of any job in any organized work

environment. Writing and compiling the job definition is another very important task of

human resource person in an organization. It is very important because it details about the

event, the ongoing activity covered by every employee in all departments of a particular

company expected. During the writing job definition for each item, then they should refer

such areas as skills, tasks, functions and general responsibilities undertaken by the staff of

this department

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4.3 Analysis of Variance (ANOVA)

4.3.1 (a) Analysis of Variance for (ANOVA) Employee Selection –Age Group

Employee Selection

Sum of Squares df Mean Square F Sig.

Between Groups 14.713 3 4.904 9.659 .000

Within Groups 201.064 396 .508

Total 215.778 399

4.3.1 (b) Descriptive Statistics of Age Group

Age Group N Mean Std. Deviation Std. Error

Under 30 71 3.5070 .82589 .09801

30-39 65 3.6615 .81542 .10114

40 - 49 214 3.9346 .68204 .04662

Above 50 50 4.0800 .48823 .06905

Total 400 3.8325 .73539 .03677

The above tables show the perceived difference with respect to the employees’

selection in terms of age groups of the respondents of both the public and privatized

banks’ employees. The employees fall in the different age categories.71 respondents of

the public and the privatized banks having age group of less than 30 years, 65 respondents

are between 30-39 years of age group, 214 respondents are in the bracket of age group

between 40-49 and 50 respondents are above 50 years of age group in their respective

banks. The ANOVA is computed with the assumption of equal variance. The model is

categorized into four age groups with the proposition that there is no significant mean

difference in the perceptions of the employees at the age groups with the significance

level of 0.05.

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The table 4.3.1 (b) reveals that the first age group under 30 has the mean value of

3.5070 with standard deviation of 0.82589 whereas the mean value of 3.6615 with

standard deviation is 0.81542 of 30-39 years of age group. Likewise age group of 40-49

has the mean value of 3.9346 and the standard deviation of 0.68204 and the last bracket

of age group above 50 years have the mean value 4.0800 with standard deviation

0.48823.

The table 4.3.1 (b) illustrates the mean variation standard deviation and standard

error of the age categories .The table further shows that the perceived employees’

selection mean increases as age of the employee increase. The age group above 50 is

more concerned to perceive clearly the employees’ selection process than the other age

groups of the employees.

The table 4.3.1 (a) depicts the analysis of variance for the employee Selection–

Age Group. The (F= 9.659) (P<0.05) indicate that the independent variable (age group)

explains better the variation in the dependent variable (employee selection). The table

further reveals that in all the age groups there is significant difference in employees’

perceptions regarding employees’ selection in the banks as the probability value is less

than 0.05.

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4.3.2 (a) Analysis of Variance for (ANOVA) Employee Training –Age Group

Employee Training


Between Groups 4.815 3 1.605 2.136 .095


Total 302.397 399

4.3.2 (b) Descriptive Statistics of the Age Group

Age Group

N Mean Std. Deviation Std. Error

Under 30 71 3.8169 .81609 .09685

30-39 65 3.6154 1.02610 .12727

40 - 49 214 3.8411 .89495 .06118

Above 50 50 4.0200 .51468 .07279

Total 400 3.8225 .87057 .04353

The above tables show the perceived difference with respect to training and

development terms of the age groups of the respondents of both the public and the

privatized banks’ employees. The employees’ fall in the different age categories. 71

respondents of the public and the privatized banks having age group of less than 30 years,

65 respondents are between 30-39 years of age group, 214 respondents are in the bracket

of age group between 40-49 and 50 respondents are above 50 years of age group in their

respective banks. The ANOVA is computed with the assumption of equal variance. The

model is categorized into four age groups with the proposition that there is no significant

mean difference in the perceptions of the employees at the age groups with the

significance level of 0.05.

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standard deviation is 1.02610 of 30-39 years of age group. Likewise the age group of 40-

49 has the mean value of 3.8411 and the standard deviation of 0.89495and the last bracket

of the age group above 50 years has the mean value 4.0200 with standard deviation

0.07279.

The table 4.3.2 (b) further reveals the mean variation standard deviation and

standard error of the age categories .The table further shows that perceived employee

training and development mean increase as the age of the employee increases . The age

group above 50 is, however, more concerned to perceive clearly the employee training

process as compared to other age groups of the employees.

Table 4.3.2 (a) depicts the analysis of variance for the Employees’ Training –Age

Group. The (F= 2.136, P>0.05) indicates that the independent variable (age group)

explains better the variation in the dependent variable (employees’ training). The table

further reveals that in all the age group perceptions significantly differ from one an other

regarding employees’ training in the banks as the probability value is greater than 0.05.

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4.3.3 (a) Analysis of Variance for (ANOVA) Employee Reward and

Recognitions –Age Group.

Employee Reward and Recognition


Between Groups 5.050 3 1.683 2.276 .079


Total 297.938 399



Under 30 71 3.5211 .93898 .11144

30-39 65 3.3385 1.01976 .12649

40 - 49 214 3.5047 .83215 .05688

Above 50 50 3.7600 .59109 .08359

Total 400 3.5125 .86412 .04321

The above tables show the perceived difference with respect to reward and

recognition in terms of age groups of the respondents of both the public and privatized

banks’ employees. The employees fall in different age categories. Seventy one

respondents of both the public and the privatized banks are having age group of less than

30 years, 65 respondents are between 30-39 years of age group, 214 respondents are in

the bracket of age group between 40-49 and 50 respondents are above 50 years of age

group in their respective banks. The ANOVA is computed with the assumption of equal

variance. The model is categorized into four age groups with the proposition that there is

no significant mean difference in the perceptions of the employees at the age groups with

the significance level of 0.05.

204


3.5211 with standard deviation of .93898 whereas the mean value of 3.3385 with standard

deviation is 1.01976 of 30-39 years of age group. Likewise the age group of 40-49 has the

mean value of 3.5047 and the standard deviation of .83215 and the last bracket of the age

group above 50 years has the mean value 3.7600 with standard deviation 0.59109.

The table 4.3.2 (b) further shows the mean variation standard deviation and

standard error of the age categories .The table further reveals that the perceived reward

and recognition mean increases as the age of the employee increases. The age group

above 50 is, however, more concerned to perceive clearly the reward and recognition

process than the other age groups of the employees.

Table 4.3.3 (a) depicts analysis of variance for the Employees’ Reward and

Recognition–Age Group. The F statistics (2.276) indicates that the independent variable

(age group) explains better the variation in the dependent variable (employees’ reward

and recognition). The table further reveals that in all the age groups there is no significant

difference in the employees’ perception regarding their reward and recognition in the

banks as the probability value is greater than 0.05.

The modern banking is facing different challenges and all of them are much more

important in respect of their nature and no bank is ready to compromise it, but all its

depends on the nature of its business requirements apart from the most important factor

i.e. to retain the performing employees with the organization on long term basis which is

too difficult for the management and especially its being an issue for the human resource

professional to keep them intact.

205

The banks devise different incentive plans to attract or keep intact the performing

employees and among them the most important factor to implement fair practices is to

evaluate their performance purely on merit and result basis. The competitive banks can

not afford to lose their performing employees in such a competitive era as today due to

their biased practices, so they have to devise incentive plans carefully considering all the

aspects or one of the best practices is to involve their employees to make criteria for

incentive plans for themselves, likewise introducing the concept of self directed teams.

206

4.3.4 (a) Analysis of Variance for (ANOVA) Work Design –Age Group.

Work Design


Between Groups .374 3 .125 .449 .718


Total 110.160 399



under 30 71 4.1268 .33507 .03977

30-39 65 4.1385 .63435 .07868

40 - 49 214 4.1262 .56333 .03851

above 50 50 4.2200 .41845 .05918

Total 400 4.1400 .52544 .02627

The above tables show the perceived difference with respect to work design in

terms of age groups of the respondents of both the public and the privatized banks’

employees. The employees fall in different age categories. 71 respondents of the public

and the privatized banks have age group of less than 30 years, 65 respondents are between

30-39 years of age group, 214 respondents are in the bracket of age group between 40-49

and 50 respondents are above 50 years of age group in their respective banks. The

ANOVA is computed with the assumption of equal variance. The model is categorized

into four age groups with the proposition that there is no significant mean difference in

the perception of employees at all the age groups with the significance level of 5%.




207

49 has the mean value of 4.1262 and the standard deviation 0.56333 and the last bracket

of age group above 50 years has the mean value 4.2200 with standard deviation 0.41845.


standard error of all the age categories .The table further shows that the perceived work

design mean increase as the ages of the employees increase. The age group above 50 is,

however, more concerned to perceive clearly the work design process as compared to

other age groups of the employees.

Table 4.3.4 (a) depicts analysis of variance for Work Design –Age Group. The

(F=.449) (P>.05) statistics indicates that the independent variable (age group) explains

better the variation in the dependent variable (work design). The table 4.3.4 (b) reveals

that all the age groups have almost closer mean value indicating agreeness .The table

4.3.4(a) further reveals that in all the age groups there is significant mean difference in

employees’ perceptions regarding work design in the banks as the probability value is

greater than 0.05.

A job that involves doing the same type of work can be boring. In contrast, a job

that involves a variety of skills may alleviate boredom and foster greater meaning in our

work. The greater skill variety has been found to be associated with greater perceived

meaningfulness of the work. The skill variety would involve using different talents and

skills in a job. It may foster greater meaning in the work as it allows one to express more

aspects of one’s personality in one’s work. It may also increase meaning as it reduces

boredom. it is one factor in the job characteristics model which influences the

experienced meaningfulness of the work.

208

The banks must consider the age groups and their requirements which designing

the work design and any neglecting on compromising the work design with respect to age

may lead to non productivity. To sum up a badly designed work is actually the cause of

far more performance problem then a manager and the employee realize that a good work

design should contain for the employees an option to various activities according to their

personal needs, work habits, and the circumstances at the workplace.

209

4.3.5 (a) Analysis of Variance for (ANOVA) Job Definition–Age Group.

Job Definition

Sum of Squares Df Mean Square F Sig.

Between Groups 2.094 3 .698 2.049 .107


Total 137.000 399



Under 30 71 3.9014 .67939 .08063

30-39 65 3.6923 .74840 .09283

40 – 49 214 3.8645 .52662 .03600

Above 50 50 3.9200 .39590 .05599

Total 400 3.8500 .58597 .02930

The above tables show the perceived difference with respect to work definition in

terms of age groups of the respondents of the public and the privatized banks’ employees.

The employees fall in different age categories. 71 respondents of the public and the

privatized banks have age group of less than 30 years, 65 respondents are between 30-39

years of age group, 214 respondents are in the bracket of age group between 40-49 and 50

respondents are above 50 years of age group in their respective banks. The ANOVA is

computed with the assumption of equal variance. The model is categorized into four age

groups with the proposition that there is no significant mean difference in the perception

of the employees at all the age groups with the significance level of 0.05.



210


49 has the mean value of 3.8645 and the standard deviation of 0.52662 and the last

bracket of the age group above 50 years has the mean value 3.9200 with standard

deviation 0.39590.


standard error of all the age categories. The table further shows that the perceived work

definition mean increases as the age of the bracket of the employees’ increases. The age

group above 50 and less than 30 are, however, more concerned to perceive clearly the

work design process than other age groups of the employees.

Table 4.3.5 (a) depicts the analysis of variance for Job Definition –Age Group.

The F statistics (2.049) indicates that the independent variable (age group) explains better

the variation in the dependent variable (job definition). The table 4.3.5 (b) reveals that all

the age groups have almost closer mean value indicating agreeness .The table 4.3.5 (a)

further reveals that in all the age groups there is significant difference in employees’

perception regarding job definition in the banks as the probability value is greater than

0.05.

211

4.4 Independent Sample T-Test of Internal Services Quality With

Educational Level.

4.4.1 Independent Sample T-test of Educational Level With Employees’ Selection

Variable Educ. Level N Mean SD

T-Stat P-Value

Employee

Selection

Graduates 132 3.7652 .69743 1.287 .1990

Masters 268 3.8657 .75243

Table 4.4.1 shows the mean values of Graduates and masters respondents with

respect to the perceived employee selection variable, standard deviation, t- stat and p

value.



measure the difference between the employees’ selection of Graduates and Masters

employees of different banks. The table further shows that there is no significant

difference in the perception of Graduates and Masters with respect to the test variable i.e

employees’ selection (P>.05).

The mean value of Masters respondents is greater than that of the Graduates

respondents (3.865) which is closer to 4 “Agree”. It indicates that the highly educated

employees perceive more importance to employees’ selection than the Graduates

employees in the banking sector. However, if we compare the mean values, the Masters

respondents are more towards the degree of agreement than the Graduates with mean

values (3.86) and (3.76) respectively.

212

The modern requirement of the banking industry today is to select such employee

as have the service oriented attitude, full potential of self directed / self motivated and

energetic to work and play his/her effective role as a team member of the branch /region/

head office to achieve his/her concerned role for the organizations. In this regard the

bankers were further asked to enrich us with their valuable input regarding their

observations of the employees with respect to their educational level and we found a

significance difference due to their education level, but exception is also their.

213

4.4.2 Independent Sample T-test Of Employee Training With Educational Level

Variable Educ. Level N Mean SD

T-stat P-Value

Employees’

Training

Graduates 132 3.6515 .91622 -2.78 .0060

Masters 268 3.9067 .83614

Table 4.4.2 shows the mean values of Graduates and Masters respondents with

respect to perceived employees’ training variable, standard deviation, t- statistic and p

value.



measure the difference between the employee training of Graduates and Masters

employees of different banks. The table further shows that there is significant difference

in the perception of the Graduates and Masters with respect to the test variable i.e.

employees’ training (P<.05).

The mean value of the Masters respondents is greater than that of the Graduates

respondents (3.906) which is closer to 4 “Agree”. It indicates that highly educated

employees perceive more importance to employees training than the Graduates

employees in the banking sector. However, if we compare the mean values, the Masters

respondents are more towards the degree of agreement than the Graduates with mean

values (3.90) and (3.65) respectively

214

The respondents of the banks were asked to provide with us their feedback by

answering regarding the employees’ training with educational level and its quality

aspects. We know that the external and internal environment keeps on changing very

quickly and it is utmost necessary for the employer to update the knowledge, skill and

ability of the employees, as in the modern competitive era it is also important to meet the

requirements of the regulators to avoid any penalty or any other factor that may lead to

any unforeseen situation. To meet such type of challenges the banks are involved to

provide extensive training programs focusing on the requirements and their understanding

level on the basis of educational level what they have attained to develop their employees

which will become only after the extensive training program regarding all aspect of their

functions of operations.

215

4.4.3 Independent Sample t-Test of Educational Level With Employee Reward and

Recognition.

Table 4.4.3 shows the mean values of the Graduate and the Masters respondents

with respect to the perceived employees’ reward and recognition variable, standard

deviation, t- statistic and p value.



measure the difference between the employees’ reward and recognition of both the

Graduates and the Masters employees of different banks. The table further shows that

there is no significant difference in the perception of the Graduates and Masters with

respect to the test variable i.e. employees’ reward and recognition (P>.05).

The mean value of the Masters respondents is less than that of the Graduates

respondents (3.651) which is closer to 4 “Agree”. It indicates that the highly educated

employees perceive comparatively less importance to the employees’ reward and

recognition than the Graduates employees in the banking sector. However, if we compare

the mean values, the Masters respondents are less towards the degree of agreement than

the Graduates with the mean values (3.651) and (3.44) respectively.

Variable Educational Level N Mean SD

T-stat P-Value

Employees’

Reward and

Recognition

Graduates 132 3.6515 .81947 2.270 .0240

Masters 268 3.4440 .87871

216

The modern banking today is facing different challenges and all them are much

more important in respect of their nature and no bank is ready to compromise it, but all it

depends on the nature of its business requirements apart from that the most important

factor is to retain the performing employees with the organization on long term basis

which is too difficult for the management and especially its being an issue for the HR

professional to keep intact them having the desired educational level, but exception is also

there, however, in the rare cases.

The banks devise different incentive plans to attract or keep intact their

performing employees and the most important factor is to implement fair practices to

evaluate their performance purely on the merit and result basis which they call the pay for

performance. The competitive banks can not afford to lose their performing employees in

such a competitive era today due to their biased practices so they have to make incentive

plans carefully considering all the aspects or one of the best practices is that they should

involve their employees in making criteria for incentive plans and give due preference to

different aspects including educational level while implementing the financial benefits.

217

4.4.4 Independent Sample t-Test of Educational Level With Work Design.

Variable Educa. Level N Mean SD

T-stat P-Value

Work Design Graduates 132 4.0379 .48497 -2.750 .006

Masters 268 4.1903 .53805

Table 4.4.4 shows the mean values of Graduates and Masters respondents with

respect to their perceived work design variable, standard deviation, t- statistic and p value.



measure the difference between work design of the Graduates and the Masters employees

of different banks. The table further shows that there is a significant difference in the

perceptions of the Graduates and the Masters with respect to the test variable i.e work

design (P<.05).

The mean value of the Masters respondents is greater than that of the Graduates

respondents (4.1903). It indicates that highly educated employees perceive more

importance to work design than the graduate employees in the banking sector. However,

if we compare the mean values of the Masters respondents are more towards the degree of

agreement than the Graduates with mean values (4.1903) and (4.0379) respectively.

The modern requirement of the banking industry today is to select such employee

as have the service oriented attitude, full potential of self directed / self motivated and

energetic to work and play his/her effective role as a team member of the branch /region/

head office to achieve his/her concerned role for the organizations. In this regard the

218

bankers were further asked to enrich us with their valuable input regarding their

observations of the employees with respect to their educational level and we found a

significance difference due to their education level, but exception is also there.

In order to get the job done in an effective manner in the banking sector, the

employees should be equipped fully with the required tools, customer-oriented

procedures used in the job and moreover it should be specialized in terms of purpose.

Balances and dynamic work, the tools and procedure are the major components of the

employees’ work design and the banks’ management must consider more importance on

educational level to get maximum outcome from each job. A good work design must

contains option to various activities according to the personal needs, work habits, and the

circumstances at the workplace.

219

4.4.5. Independent Sample t-Test of Educational Level With Job Definition.

Variable Educa. Level N Mean SD T-stat P-Value

Job Graduates 132 3.8864 .56146 0.871 .384

Definition Masters 268 3.8321 .59789

Table 4.4.3 shows the mean values of the Graduates and the Masters respondents

with respect to the perceived job definition variable, standard deviation, t- statistic and p

value.



measure the difference between the job definition of the Graduates and the Masters

employees of different banks. The table further shows that there is no significant

difference in the perception of the Graduates and the Masters with respect to the test

variable i.e. job definition (P>.05).

The mean value of the Masters respondents is slightly less than that of the

Graduates respondents (3.83) which is closer to 4 “Agree”. It indicates that the highly

educated employees perceive comparatively and slightly less importance to the

employees job definition than the graduates employees in the banking sector. However, if

we compare the mean values the Masters respondents are slightly less towards the degree

of agreement than the graduates with the mean values (3.83) and (3.88) respectively.

220

A very good and well-prepared job description is a valuable asset to the firm as it

saves cost in the long run for the bank. It included the desired educational level to

perform the required function for the organization in an effective manner. It further helps

the educated people understand the functionality in a cost effective manner instead of less

educated employee, but exception is still there and it will assist the HR person to know

exactly as to what to write in the ad to attract the experienced employees having the

desired educational level. Apart from the above, abilities and competencies of the

candidate are also put under consideration and they have a place in the JD while

compiling and preparing a job description, the HR person always has a tedious task to

update the JD for each position in all departments considering the job specification as

well.

221

4.5. Independent Sample T-Test of Internal Services Quality With Bank

Type

4.5.1. Independent Sample T-Test of Bank type with Employee Selection

Variable Bank type N Mean SD T-stat P-Value

Employees’

Selection

Public Banks 286 3.8322 .70573 -0.14 .989

Privatized Banks 114 3.8333 .80833

Table 4.5.1 shows the mean values of the public banks and the privatized banks’

respondents with respect to the perceived employee selection variable, standard deviation,

t- statistic and p value.

It is assumed that there is no mean difference in both the banks’ groups’

employees’ perceptions. The independent sample t-test applies on the basis of the

assumption of equal variances and to measure the difference between the selection

climate in the public and the privatized banks. The table further reveals that there is no

significant difference in the perceptions of the males and the females with respect to the

test variable i.e. employee selection (P>.05).

The mean value of the respondents from both the banks is almost equal (3.83)

which is closer to 4 “Agree”. It indicates that both the banks are given same importance

in the employee selection process in their respective banks. However, if we compare the

mean values of the public banks and the privatized banks the respondents are same

towards the degree of agreement with mean values (3.83) and (3.83) respectively.

222

Basically we conducted our study keeping in mind the public and the privatized

banks in Pakistan and their practices in terms of human resource management especially

by employees’ selection and their effects on their banks’ performance. We have selected

different parameters to judge their implementation of their practices through their

employees’ selection processes as per their own practices and staff services’ rules or staff

governing bodies’ rules. The selection processes of the public banks are entirely different

from those of the privatized banks. Both the practices are correct in their own domains

with advantages and disadvantages of processes, but both are focused on maximizing

their share from the market by utilizing the human resources.

223

4.5.2 Independent Sample T-Test of Bank Type with Employees’ Training.

Variable Bank Type N Mean SD T-stat

P-Value

Employees’

Training

Public Banks 286 3.8601 .825 1.371 .171

Privatized

Banks 114 3.7281 .971

Table 4.5.2 shows the mean values of the public banks and the privatized banks

respondents with respect to perceived employee training variable, standard deviation, t-

statistic and p value.



assumption of equal variances and to measure the difference between the employees’

training climates in the public and the privatized banks. The table further reveals that

there is no significant difference in the perceptions of the public and the privatized banks’

employees with respect to the test variable i.e. employees’ training (P>.05, 0.220).

The mean values of the public banks’ respondents are greater than those of the

privatized bank’s respondents (3.8601) which are closer to 4 “Agree”. It indicates that the

public banks are given comparatively more importance in employees’ training in their

banks than the privatized banks. However, if we compare the mean values, the public

banks respondents are more towards the degree of agreement than the privatized banks

with mean values (3.8601) and (3.7281) respectively.

224

In the modern era it is much more important for both the public and privatized

banks to focus on enhancing their employee’s knowledge, skills and abilities to cope with

the future challenges in a productive way. Both types of the banks are seriously

considering this issue to make more investment on their human resource and to enable

them become more competitive and present their knowledge and performance in front of

their competitors. However, some banks have different techniques to impart training

through seminars, workshops and for the purpose they have developed common platform

under the regulatory bodies to upgrade the professional competencies with their help in an

effective manner. The banks have their own staff colleges to develop their employees

where they are providing not only the up-to-date knowledge but also are making familiar

with the future challenges.

225

4.5.3 Independent Sample T-Test of Bank Type With Employee Reward and

Recognition

Variable Bank Type N Mean SD T-stat

P-Value

Employees’

Reward and

Recognition

Public Banks 286 3.46 .860 -1.874 .062

Privatized

Banks 114 3.64 .863

Table 4.5.3 shows the mean values of the public banks and the privatized banks

respondents with respect to the perceived employee reward and recognition variable,

standard deviation, t- statistic and p value.



assumption of equal variances and to measure the difference between the employee

reward and recognition climate in the public and the privatized banks. The table further

reveals that there is no significant difference in the perceptions of the public and the

privatized banks’ employee with respect to the test variable i.e. employees’ reward and

recognition (P>.05).

The mean values of the public banks’ respondents are greater than those of the

privatized bank’s respondents (3.8601) which are closer to 4 “Agree”. It indicates that the

public banks are given comparatively more importance in employees’ reward and

recognition in their banks than in the privatized banks. However, if we compare the mean

values, the public banks’ respondents are comparatively slightly less towards the degree

226

of agreement than the privatized banks’ with the mean values (3.46) and (3.64)

respectively.

In the modern banking era competition is increasing day by day and it’s hardly to

mange without the competitive human resource. Compensation is the most important

factor in the present era and it is the responsibility of the employer to lay down the

criteria on the basis of competency/ability to perform the job assigned by the

management. The recent era lauded the voice of pay for performance and

competency/ability to perform job efficiently and effectively is the most important

ingredient of the performance management. Different banks have different parameters to

determine the reward and recognition for their employees, no doubt they have different

ways to mange the aforesaid issue, but they have the same destinations (i.e. performance).

The public banks’ rules and regulations are devised by the single unit their Board of

Directors whereas the privatized banks have their approved empowerment documents

which guide them to determine the pay for the performance .We may add that the banks

that implement pay for performance on fair basis work miracles and the outcome in their

business is nothing but growth.

227

4.5.4 Independent Sample T-Test of Bank Type With Work Design.

Variable Bank Type N Mean SD T-Stat P-Value

Work

Design

Public Banks 286 4.1399 .524 -.008 .993

Privatized

Banks 114 4.1404 .530


respondents with respect to the perceived work design variable, standard deviation, t-


It is assumed that there is no mean difference in both the banks groups’


assumption of equal variances and to measure the difference between the work design


significant difference in the perceptions of the public and the privatized banks’ employees

with respect to the test variable i.e. work design (P>.05).

The mean value of the respondents from both the banks is approximately equal

(4.13) which is closer to 4 “Agree”. It indicates that both the banks are given same

importance to work design in their respective banks. However, if we compare the mean

values, the public banks’ respondents are comparatively and approximately equal towards

the degree of agreement than the privatized banks with mean values (4.13) and (4.14)

respectively.

228

The work design has a critical impact on the banks and motivates their employees

to accomplish their objectives in an effective way. Different banks have different ways to

analyze jobs of their banks and they have their own mechanism to implement them for the

betterment in the performance. The work design involves envisioning and defining

specification of work systems related to a particular job. It is an activity to make certain

that people and other possessions are effectively and efficiently utilized. The work design

is undertaken keeping in mind the job satisfaction and performance. This question was

asked particularly to see as to how many employees have interactions directly with the

customers and other organizations, which we can say the front line employees in the

banking business process.

All of them are concerned that the work design in a manner adapted to current

needs and requirements of supervisors should be established. From the perspective of the

bank, the way the roles and responsibilities are in groups, can affect the productivity and

costs. Jobs that are not satisfied or too demanding can be difficult to fill. Boring jobs lead

to high turnover. For an employee motivation and satisfaction of the match between the

job factors (content, skills and opportunities influence) and personal needs. Therefore, it

can help thoughtful design of jobs; both the organizations and their employees achieve

their goals.

229

4.5.5 Independent Sample T-Test of Bank Type With Job Definition.

Bank Type N Mean SD T-stat P-Value Job

Definition

Public Banks 286 3.8357 .60197 0.775 .439

Privatized

Banks 114 3.8860 .54462


respondents with respect to the perceived Job definition variable, standard deviation, t-




assumption of equal variances and to measure the difference between the job definition


significant difference in the perceptions of both the public and privatized banks’

employees with respect to the test variable i.e. the job definition (P>.05).

The mean value of the respondents from both the banks is approximately equal

(3.8) which is closer to 4 “Agree”. It indicates that both the banks are given same

importance to the job definition in their respective banks.

However, if we compare the mean values, the public banks’ respondents are

comparatively and approximately equal towards the degree of agreement than the

privatized banks with mean values (3.83) and (3.88) respectively.

230

In order to manage the employees effectively it is essential to devise certain

guidelines for their effective utilization in the banks with the help of job definition;

different banks have the formal job description according to their career development. Job

definition, though often overlooked by many banks, are valuable to both the employee

and the employer for countless of reasons. A job definition is a written statement that

describes the main objectives of the job, its essential and non-essential functions, job

qualifications, and other pertinent information relating to the job. The job definition

determines the specific tasks and essential functions that each employee is responsible to

complete. As such, the job definition helps define roles and relationships among the

employees and departments within a company, clarifying as to who is responsible and for

what. This helps eliminate wastage of time and ultimately promote the growth and

profitability. In addition, the job definition also helps the newly hired ones orient

themselves with the company, allowing for a smoother transition into their designated

roles.

231

4.6 Analysis of Variance (ANOVA)

4.6.1 (a) Analysis of Variance for (ANOVA) Employee Selection -Work Experience

Employee’s Sum of Squares df Mean Square F Sig.

Between Groups 7.385 3 2.462 4.678 .003


Total 215.777 399

4.6.1 (b) .Descriptive Statistics of Work Experience Group.

Work Experience Groups N Mean Std. Deviation Std. Error

6-10 85 3.7294 .79265 .08597

11-15 48 3.5417 .54415 .07854

16-21 72 3.8472 .64261 .07573

Others 195 3.9436 .76110 .05450

Total 400 3.8325 .73539 .03677

The above tables show the perceived difference with respect to employees’

selection in terms of work experience of the respondents of the public and the privatized

banks’ employees of Rawalpindi/Islamabad, Pakistan. The employees fall in the different

work experience groups: 85 respondents of the public and the privatized banks having

work experience of less than 10 years, 48 respondents are between 11-15 years of work

experience, 71 respondents are in the bracket of work experience between 16-21 and 195

respondents are above 22 years work experience in their respective banks. The ANOVA

is computed with the assumption of equal variance. The model is categorized into four

work experience groups with the proposition that there is no significant mean difference

in the perceptions of the employees of the work experience groups with the significance

level being 0.05.

232

The table 4.6.1 (b) reveals that the first work experience group between 6-10 has

the mean value of 3.7294 with standard deviation of 0.79265 whereas the mean value of

3.5417 with standard deviation is 0.54415 of 11-15 years of work experience group.

Likewise the work experience group of 16-21 has the mean value of 3.8472 and the

standard deviation of 0.64261 and the last bracket of the work experience group (others)

(>22 years) has the mean value 3.9436 with standard deviation 0.76110.


standard error of the work experience categories .The table further shows that the

perceived employee selection mean increases as work experience of the employees’

increase. The work experience group above 21 is more concerned to perceive clearly the

employee selection process than the other work experience groups.

Table 4.6.1 (a) depicts the analysis of variance for the employee selection -work

experience. The (F=4.678) (P<.05) statistics indicates that the independent variable (work

experience) explains better the variation in the dependent variable (employee selection).

The table further reveals that in all the work experience groups there is a significant

difference in the employee’s perceptions regarding the employees’ selection in the banks

as the probability value is less than 0.05.

233

4.6.2 (a). Analysis of Variance for the (ANOVA) Employee Training -Work Experience.


Between Groups 27.826 3 9.275 13.377 .000


Total 302.398 399

4.6.2 (b) Descriptive Statistics of Work Experience Groups.


6-10 85 3.5176 1.00726 .10925

11-15 48 3.3750 .93683 .13522

16-21 72 4.1389 1.06554 .12557

Others 195 3.9487 .58981 .04224

Total 400 3.8225 .87057 .04353

The above tables show the perceived difference with respect to the employees’

training and development in terms of work experience of the respondents of the public

and the privatized banks’ employees. The employees fall in different work experience

groups: 85 respondents of the public and the privatized banks have work experience of

less than 10 years, 48 respondents are between 11-15 years of work experience, 71

respondents are in the bracket of work experience between 16-21 and 195 respondents are

above 22 years work experience in their respective banks. The ANOVA is computed with

the assumption of equal variance. The output is categorized into four work experience

groups with the proposition that there is no significant difference in the perceptions of the

employees at the work experience group with the significance level being 0.05.

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3.3750 with standard deviation is .93683 of 11-15 years of work experience group.

Likewise, the work experience group of 16-21 has the mean value of 4.1389 and the

standard deviation of 1.06554 and the last bracket of work experience group (others) (>22

years) has the mean value 3.9487 with standard deviation being 0.58981.


standard error of the work experience groups. The table further shows that the perceived

employees’ training and development mean increases as the work experience of the

employees increases. The work experience groups above 16 years as more concerned to

perceive clearly the employee training process than other work experience groups.

Table 4.6.2 (a) depicts the analysis of variance for the employees training -work

experience. The F statistics (13.377) (P<.05) indicates that the independent variable (work

experience) explains better the variation in the dependent variable (employee training).

The table further reveals that in all the work experience groups there is a significant

difference in the employee’s perceptions regarding their trainings in the banks as the

probability value is less than 0.05.

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4.6.3(a) Analysis of Variance for (ANOVA) Employee Reward and Recognition - Work

Experience.

Employee Reward & Recognition


Between Groups 7.461 3 2.487 3.390 .018


Total 297.937 399

4.6.3 (b). Descriptive Statistics of Work Experience Groups.


6-10 85 3.3529 1.02011 .11065

11-15 48 3.4167 .91868 .13260

16-21 72 3.3889 .88103 .10383

Others 195 3.6513 .74712 .05350

Total 400 3.5125 .86412 .04321

The above tables show the perceived difference with respect to the reward and

recognitions in terms of work experience of the respondents of the public and the

privatized banks’ employees. The employees fall in the different work experience

groups. 85 respondents of the public and the privatized banks have work experience of

less than 10 years, 48 respondents are between 11-15 years of work experience, 71

respondents are in the bracket of work experience between 16-21 and 195 respondents are

above 22 years work experience in their respective banks. The ANOVA is computed with

the assumption of equal variance. The output is categorized into four work experience

groups with the proposition that there is a significant difference in the perceptions of the

employees of the work experience groups with the significance level being 5 %.

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standard deviation of 0.88103 and the last bracket of work experience group (others)



standard error of all the work experience categories .The table further shows that the

perceived employee reward and recognition mean increase as the work experience of the

employees increase. The work experience group above 21 year is more concerned to

perceive clearly the importance of employee reward and recognition in the banks than

other work experience groups.

Table 4.6.3 (a) depicts the analysis of variance for employee reward and

recognition -work experience. The F statistics (3.390) indicates that the independent

variable (work experience) explains better the variation in the dependent variable

(employee reward and recognition). The table further reveals that in all the work

experience groups there is a significant difference in the employee’s perceptions

regarding the employees’ reward and recognition in the banks as the probability value is

less than 0.05.

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4.6.4. (a) Analysis of Variance for (ANOVA) of Work Design -Work Experience.

4.6.4 (b) . Descriptive Statistics of Work Experience Groups.


6-10 85 4.0706 .70353 .07631

11-15 48 4.2500 .43759 .06316

16-21 72 4.0972 .41655 .04909

Others 195 4.1590 .48732 .03490

Total 400 4.1400 .52544 .02627

The above tables show the perceived difference with respect to the work design in

terms of the work experience of the respondents of the public and the privatized banks’

employees in Rawalpindi/Islamabad, Pakistan. The employees fall in the different work

experience groups: 85 respondents of the public and the privatized banks have work

experience of less than 10 years, 48 respondents are between 11-15 years of work

experience, 71 respondents are in the bracket of work experience between 16-21 and 195

respondents are above 22 years work experience in their respective banks. The ANOVA

is computed with the assumption of equal variance. The output is categorized into four

work experience groups with the proposition that there is a significant difference in the

perceptions of the employees of the work experience group with the significance level of

0.05 %.

Work Design Sum of Squares Df Mean Square F Sig.

Between Groups 1.192 3 .397 1.444 .229


Total 110.160 399

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standard deviation of 0.41655 and the last bracket of the work experience groups (others)



standard error of the work experience groups: The table further shows that the perceived

work design mean increases as work experience of the employees increase. The work

experience group above 21 year is more concerned to perceive clearly the importance of

the work design than to other work experience groups.

Table 4.6.4 (a) depicts the analysis of variance for the work design -work

experience. The F statistics (1.444) indicates that the independent variable (work

experience) explains better the variation in the dependent variable (work design). The

table further reveals that in all the work experience groups there is no significant

difference in employees’ perceptions regarding the work design in the pubic and the

privatized banks as the probability value is greater than 0.05.

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4.6.5 (a) Analysis of Variance for (ANOVA) of Job Definition - Work Experience.

Job Definition


Between Groups 1.060 3 .353 1.029 .380


Total 137.000 399

4.6.5 (b) . Descriptive Statistics of Work Experience Groups.

The above tables show the perceived difference with respect to the employees’ job

definition in terms of the work experience of the respondents of the public and the

privatized banks’ employees. The employees fall in the different work experience

groups. 85 respondents with the work experience bracket of less than 10 years, 48 with

the work experience bracket of 11-15, 71 respondents in the work experience bracket of

16-21 and 195 respondents in the work experience bracket of above 22. The ANOVA is

computed with the assumption of equal variance. The table 4.6.5 is categorized into four

work experience groups with the proposition that there is no significant difference in the

perceptions of the job definitions at the work experience group with the significance level

of 0.05 %.


6-10 85 3.8706 .72026 .07812

11-15 48 3.7292 .67602 .09758

16-21 72 3.9167 .52407 .06176

Others 195 3.8462 .51465 .03686

Total 400 3.8500 .58597 .02930

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standard deviation of 0.52407 and the last bracket of work experience group (others)



standard error of the work experience categories .The table further shows that the

perceived job definition mean increases as the work experience of the employees

increases. The work experience groups holding above 16 years are more live to the

importance of job definition in the banks than other work experience groups as the

employees who have worked for any bank for more than sixteen years are willing to work

with the same bank and they consider that the job definition should be placed properly by

the HRM department to utilize the employees more productively and effectively.

Table 4.6.5 (a) depicts the analysis of variance for the job definition -work

experience. The F statistics (1.029) indicates that the independent variable (work

experience) explains better the variation in the dependent variable (job definition). The

table further reveals that in all the work experience groups there is a significant difference

in the employees’ perceptions regarding the importance of job definition in the pubic and

the privatized banks as the probability value is greater than 0.05.

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Section 3

This section describes the relationship computation between perceived internal

services quality and employee job satisfaction by the means of regression and casewise

regression analysis to check the impact of internal services quality on employee job

satisfaction with respect to different demographics information of the respondents.

4.7. REGRESSION ANALYSIS

4.7.1 Regression analysis of the Employees’ Job Satisfaction on the Internal Services

Quality.

Dependent Variable Employees’ Job Satisfaction:

Variables β S.E.( β) t R2 F-stat Sig

Employees’ Job

Satisfaction

(Constant) 2.154 0.324 44.076 0.1 6.647 0.000

ISQ 0.557 (0.084) (6.639)

The table 4.7.1 shows the regression analysis for the employees’ job satisfaction

with the internal service quality executed with the proposition that the internal services

quality has no relationship with the employee job satisfaction.

The table further reveals that the regression model is significant (F,

44.076),(P<0.05) with R2 = 0.1 which depicts that the internal service quality accounts

10% variation in the employees’ job satisfaction. The table further illustrate that the

regression of the internal service quality has a positive effect on the employee job

satisfaction and this relationship is statistically significant as the probability value for this

model is less than level of significance which is 0.05 %. The analysis further shows that

242

the internal service quality is perceived as an important factor in the job satisfaction (t =

6.639).

The analysis shows that there is a positive relationship between the internal

service quality and the employees’ job satisfaction (β= 0.557) which reveals that the job

satisfaction level is sensitive to the internal service quality and brings/contributes 55%

change in the job satisfaction supported by the positive sign of the internal service quality

co-efficient.

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4.8. CASEWISE REGRESSION ANALYSIS

Casewise Regression Analyses Were Used in Order to Check the Significance of the

Independent Variables With Respect to Different Demographics on Dependent Variables

for the Research Work.

4.8.1 Regression analysis of the Internal Services Quality on Employees’ Job

Satisfaction with selection variable Age Group

Dependent Variable: Employees’ job Satisfaction, Selection Variable: Age Groups

Age Group Variables β S.E t R-Square F-Stat Sig.

< 30 Years

(Constant) 3.0 0.70 4.3 0.034 .000

ISQ 0.3 (0.18) (1.6) 2.41 0.125

30 -39

(Constant) 3.265 0.739 4.42 0.024 0.000

ISQ 0.245 (0.196) (1.25) 1.57 0.215

40-49

(Constant) 0.793 0.5313 1.49 0.181 0.137

ISQ 0.929 (0.1355) (6.86) 47 0.000

(Constant) 2.736 0.7001 3.91 0.076 0.0003

> 50 Years ISQ 0.37 (0.1859) (1.99) 3.96 0.0523

The above table 4.8.1 shows the regression analysis between the job satisfaction

and the internal service quality with respect to different age groups executed with the

proposition that the internal services quality has no relationship with the employees’ job

satisfaction at different age group i.e. less than 30 years, 30 - 39 years, 40 – 49 years and

above 50 years. The table further reveals that the regression model of the age group less

than 30 is significant (F, 2.41),(P<0.05) with R2 = 0.034 which depicts that the internal

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service quality accounts 3.4 % variation in the dependent variable i.e. employees’ job

satisfaction at the age group of less than 30 years.

The analysis further shows that there is a positive relationship between the internal

services quality and the employees job satisfaction (β= 0.3) which reveals that the job

satisfaction level is sensitive to the internal services quality at this age group and it

brings/contributes 30% change in the job . This relationship is statistically significant as

the probability value for this age group is less than the level of significance which is 0.05

%. The analysis further explains that the internal service quality is perceived as an

important factor in the job satisfaction (t = 1.6).

The table further shows the regression analysis between the employees’ job

satisfaction and the internal services quality at the age group of 30-39 years. The table

reveals that the regression model is significant (F, 1.57),(P<0.05) with R2 = 0.024 which

depicts that the internal service quality accounts 2.4 % variation in the employees’ job

satisfaction at the age group of 30-39 years. The analysis further reveals that there is a

positive relationship between the internal service quality and the employees’ job

satisfaction (β= 0.245) which shows that the job satisfaction level is sensitive to the

internal service quality at this age group and it brings/contributes 24% change in the job

satisfaction supported by the positive sign of the internal services quality co-efficient and

the relationship is statistically significant as the probability value for this age group is less

than the level of significance. The analysis further explains that the internal services

quality is perceived as an important factor in the job satisfaction (t = 4.42).

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The table further reveals regression analysis between the employees’ job

satisfaction and the internal services quality for the age group of 40-49 years. The table

reveals that the regression model is significant (F, 47),(P<0.05) with R2 = 18.1 which

depicts that the internal service quality accounts 18.1 % variation in the employees’ job

satisfaction at the age group of 40-49 years. The analysis further reveals that there is a

positive relationship between the internal service quality and the employees’ job

satisfaction (β= 0.929) which shows that the job satisfaction level is sensitive to the

internal service quality at this age group and it brings/contributes 92.9% change in the

job satisfaction supported by the positive sign of the internal service quality co-efficient

and the relationship is statistically significant as the probability value for this age group is

less than the level of significance. The analysis further explains that the internal service

quality is perceived as an important factor in the job satisfaction (t = 6.86).


satisfaction and the internal services quality at the age group of 50 and above. The table

reveals that the regression model is insignificant (F=3.96),(P>0.05) with R2 = 0.0767

which depicts that the internal service quality accounts 7.6 % variation in the employees’

job satisfaction at the age group of 50 and above. The analysis further depicts that there is

a positive relationship between the internal service quality and the employees’ job

satisfaction (β= 0.37) which shows that the employees’ job satisfaction level is sensitive

to the internal service quality at the age group of 50 and above and it contributes 37%

change in the job satisfaction supported by the positive sign of the internal service quality

co-efficient and the relationship is statistically not significant as the probability value for

this age group is greater than the level of significance i.e. 0.05 %. The analysis further

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explains that the internal service quality is perceived as an important factor in the job

satisfaction (t = 1.99).

In concluding remarks it is summarized that the table reveals R- square values of

all the age groups. It is evident from the analysis that the R square is equal to 0.034 of the

age group of less than 30 years is greater than the age group of 30-39 (0.024) which

depicts that according to employee with age group less than 30; the internal service

quality accounts 9.2 % variation in the employee job satisfaction whereas the age group

30-39 perceive 6 % variation while the age group above 50 years perceive 7.6 % variation

and the age group 40-49 perceive 18.1% of variation which is greater than those of all the

age groups. If the beta value is compared, it is clear from the analysis that all the

categories perceive positive impact of the internal service quality on the employees’ job

satisfaction (β =0.3), (β =0. 0.245), (β =0.929), (β =0.37).

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Satisfaction with selection variable Gender.

Dependent Variable: Employees’ job Satisfaction, Selection Variable: Gender

In the Table 4.8.2, the results of the regression analysis for the job satisfaction

with respect to the internal services quality with the selection variable gender have been

executed with the proposition that the “internal services quality has a significant

relationship with the employees’ job satisfaction for both the genders”. The group is

categorized into the males and females. The analysis shows that the model is significant

at (F, 37.662), (P<0.05) for the males category. The analysis further shows that the value

of R-Square is 0.103 mean that the internal services quality accounts 10.3 % of variation

in the dependent variable i.e. employees’ job satisfaction for the male category.

The analysis further reveals that the regression coefficient (β= 0.572) for the

internal services quality shows that the job satisfaction level is sensitive to the internal

services quality. The internal services quality brings/contributes 57.2% change in the job

satisfaction in the male employees supported by the positive sign of the internal services

quality co-efficient.

Gender Variables β S.E t- value R-Square F-Stat Sig

Male

(Constant) 2.121 .361 5.883 .000

ISQ 0.572 (.093) (6.134) 0.103 37.62 .000

Female

(Constant) 2.305 0.742 3.108 .003

ISQ 0.487 (0.193) (2.525) 0.083 6.376 0.04

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Further, to the check the statistical significant relationship between the internal

services quality and the employees’ job satisfaction in the male category, in the above

output the t- value for the internal services is 6.134 with a standard error of 0.093. The P

value of the model is 0.000 which does satisfy the proposition .Hence, it is concluded that

the internal services quality has a positive effect on the job satisfaction of the male

employees and the relationship is statistically significant as the probability value of the

internal services quality is less than the level of significance i.e. 0.05 %.

In order to check the regression analysis for the female category the results of the

regression analysis for the job satisfaction with respect to the internal services quality

with the selected variable gender are executed with the proposition that the “internal

services quality has a significant relationship with the employees’ job satisfaction for both

genders”. The group is categorized into the males and the females. The analysis shows

that the model is significant at (F, 6.376), (P<0.05) for the female employees. The

analysis further shows that the value of R-Square is 0.083 mean that the internal services

quality accounts 8.3 % of variation in the dependent variable i.e. the employees’ job

satisfaction for the female category.

Further, to the check the statistical significant relationship between the internal

services quality and the employees’ job satisfaction in the female category, the above

table shows the t- value for the internal services is 2.525 with standard error of 0.193. The

P value female category is 0.014 which does satisfy the hypothesis. Hence, it concludes

that the internal services quality has a positive effect on the job satisfaction of the female

employees.

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In concluding remarks for this regression output it has been observed that the

internal services quality for both the males and the females has a positive relationship

with the internal services quality and this relationship is statistically significant as it is

noted that the male employees perceive more of the internal services quality than the

female employees and hence, is more sensitive to the employee job satisfaction.

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Satisfaction with selection variable Educational Level.

Dependent Variable: Employees’ job Satisfaction, Selection Variable: Educational Level

The above table 4.8.3 shows the results of the regression analysis between the

employee job satisfaction and the internal services quality with respect to the educational

level of the respondents. The regression analysis are executed with the proposition that

the internal services quality has no relationship with the job satisfaction in both the

groups of the educational level. The group is categorized into educational level of the

masters and the graduates.

The table further reveals that the regression model of the graduate level employees

is insignificant at (F=2.057), (P>0.05) at the value of R-Square (0.016) which indicate

that the internal services quality accounts 1.6 % of variation in the employees’ job

satisfaction for the graduate employees’ category. The coefficient (β =0.213) for the

internal services quality is 0.213 which reveals that the job satisfaction level is sensitive

to the internal services quality. The internal services quality brings/contributes 21.3%

change in the job satisfaction in those employees who have the bachelor education. The t-

Educa.Level Variables β S.E t-

value R-Square F-Stat Sig Graduates (Constant) 3.471 .577 6.012 .016 2.057 .000

ISQ 0.213 (0.149) (1.434) .154

Masters

(Constant) 1.627 0.389 4.184 .150 47.543 .000

ISQ 0.696 (0.101) (6.895) .000

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value for the internal services is 1.434 with the standard error of 0.149. The P value of

the model is 0.154 which concludes that the employees who have the bachelor level

education fail to perceive the internal services quality.

The table further reveals that the regression model for the masters level employees

shows that the model is significant (F=2.057), (P<0.05) at the value of R-Square is 0.150

which reveals that the internal services quality accounts 15.0% of variation in the

employees job satisfaction for the masters employees’ category 0.696. The coefficient (β

=0.213) reveals that the job satisfaction level is sensitive to the internal services quality.

The internal services quality brings/contributes 69.6% change in the job satisfaction in the

employees who have the master’s education. Further, it is clear that this effect is

relatively more than on those employees who have the bachelor education. The t-value for

the internal services quality is 6.895 with standard error of 0.101. The P value for the

model is 0.000 which does support the hypothesis that the highly educated employees

perceive more of the internal services quality as the probability value for this group is less

than the level of significance.

The table further reveals R-Square values. It is evident from the analysis the R

square value is equal to (R=0.016) of the graduate level employees is less than that of the

masters level employees (R=0.15) which depicts that according to the masters level

educated employees, the internal services quality accounts 15.0 variation in the employee

job satisfaction. In concluding remarks it is clear from the analysis that both the

categories perceive a positive impact of the internal services quality on the employees’

job satisfaction (β = .0.213) (β =0.696). Although the beta coefficient of the masters level

educated employees is greater than that of the bachelor level employees but this effect is

252

statistically not significant. Moreover, it is noteworthy here that the masters level

educated employees perceive more of the internal services quality as compared to the

graduate employees as the beta parameter for the masters level employees is higher than

that of the graduate level employees.

253


Satisfaction with selection variable Bank Type.

Dependent Variable: Employees’ job Satisfaction, Selection Variable: Bank Type

Bank Type Variables Β S.E

t- value

R-Square F-Stat Sig

Public Banks (Constant) 2.279 .369 6.173 .095 29.953 .000

ISQ 0.524 0.096 5.473 .000

Private Banks

(Constant) 1.752 0.679 2.581 .113 14.285 .011

ISQ 0.661 0.175 3.780 .000

The above table 4.8.4 shows the regression analysis between the internal services

quality and the employees’ job satisfaction with respect to the bank categories. The

regression model is executed with the proposition that the internal services quality has no

relationship with the job satisfaction in both the types of the banks. The table further

illustrates that the regression model for both the banks’ categories is significant (P<0.05).

the regression analysis for the public bank employees shows that the model is significant

(F=29.953), (P<0.05) at the value of R-Square is .095 which indicates that the 9.5 % of

variation is accounts in the employees’ job satisfaction by the internal services quality for

the public category banks while the regression analysis shows that the model is

significant (F=14.85), (P<0.05) at the value of R-Square is 0.113,which indicates that

11.3 % of variation is accounts in the employees’ job satisfaction by the internal services

quality for the privatized banks’ category.

The tables further reveals R- Square values for both the banks’ categories. It is

evident from the analysis that the R square is equal to (0.113) of the privatized banks

254

which is greater than that of the public banks (0.095) which depicts that according to the

privatized banks’ employees the internal services quality account 11.3 % of variation in

the employees’ job satisfaction while the public banks perceive 9.5 % variation in the

employees’ job satisfaction. If the beta values are compared, the coefficient (β =0.524) for

the internal services quality is 0.524 which reveals that the job satisfaction level is

sensitive to the internal services quality in the public banks. The internal services quality

brings/contributes 52.4% change in the job satisfaction in such employees who belong to

the public sector banks supported by the positive sign of the internal services quality co-

efficient and the coefficient (β =0. 661) reveals that the job satisfaction level is sensitive

to the internal services quality. the internal services quality brings/contributes 66.1%

change in the job satisfaction in such employees who belong to the privatized sector

banks supported by the positive sign of the internal services quality co-efficient, and this

effect is relatively more than that on the public sector banks’ employees.

Further, the public banks give more importance to the employee job satisfaction

than the privatized banks as the t value of the public banks is greater than the privatized

banks’ (t =5.359) (t=2.641) respectively. Here, it is noteworthy that the privatized banks’

employees perceive more of the internal services quality than the public banks’

employees in terms of sensitivity of the beta factor.

255

4.8.5 Regression Analysis Internal Services Quality on Employees’ Job Satisfaction

with selection variable Work Experience.

Dependent Variable: Employees’ job Satisfaction, Selection Variable: Work Experience.

Work Experience Variables β S.E

t- value

R-Square F-Stat Sig

6-10 Years (Constant) 3.587 0.611 5.872 .011 .944 .000

ISQ 0.157 (0.162) (0.972) 0.334

11-15 years

(Constant) 2.111 0.940 2.247 .100 5.134 0.030

ISQ 0.556 (0.245) (2.266) 0.028

16-21 Years

(Constant) 1.817 0.705 2.576 .132 10.522 0.012

ISQ 0.585 (0.180) (3.244) 0.002

Above 21 Years

(Constant) 1.035 0.495 2.091 .198 47.533 0.038

ISQ 0.877 (0.127) (6.894) 0.000

The above table 4.8.5 shows the regression analysis between the internal services

quality and the employees’ job satisfaction with respect to the work experience. In the

above regression model the employees’ job satisfaction and the internal services quality

with respect to the work experience have been executed to check the proposition that the

internal services quality has no relationship with the job satisfaction at any work

experience group. The group is categorized into four work experience groups that are 6 -

10 years, 11 - 15 years, 16 –21 years and ultimately above 21 years.

The table reveals that the regression model is not significant (F, 0.994),(P>0.05)

with R2 = 0.011 which depicts that the internal services quality accounts 1.1 % variation

in the employees’ job satisfaction at the work experience group between 6 – 10 years.

256

The analysis further shows that there is a positive relationship between the internal

services quality and the employees’ job satisfaction (β= 0.157) reveals that the job

satisfaction level is sensitive to the internal services quality at this work experience group

and it brings/contributes 15.7% change in the job satisfaction supported by the positive

sign of the internal service quality co-efficient and this relationship is statistically not

significant. The analysis further explains that the internal services quality is perceived as

an important factor in the job satisfaction (t = 0.972).

The table further shows the regression model for the employees’ job satisfaction at

the work experience group of 11-15 years. The table reveals that the regression model is

significant (F, 5.134),(P<0.05) with R2 = 0.100 which depicts that the internal services

quality accounts 10 % variation in the employees’ job satisfaction at the work experience

group of 11-15 years. The analysis further reveals that there is a positive relationship

between the internal services quality and the employees’ job satisfaction (β= 0.556)

which indicates that the employees’ job satisfaction level is sensitive to the internal

services quality at this work experience group and it contributes 55.6% change in the job

satisfaction. The analysis further explains that the internal services quality perceives more

job satisfaction than the early work experience group (t = 2.266).

The table further reveals the regression model between the internal services

quality and the employees’ job satisfaction at the work experience group between16-21

years. It depicts that the regression model is significant (F, 10.522),(P<0.05) with

R2=.132 which shows that the internal services quality accounts 13.2 % variation in the

employees’ job satisfaction at the work experience group between 16-21 years. The

analysis further reveals that there is a positive relationship between the internal services

quality and the employees’ job satisfaction (β= 0.585) which shows that the job

257

satisfaction level is sensitive to the internal services quality at this work experience group

and it brings 58.5% change in the employees’ job satisfaction.

The table further explains the regression model between the employees’ job

satisfaction and the internal services quality executed at the age group of above 21 years.

The table reveals that the regression model is significant (F, 43.533),(P<0.05) with

R2=0.198 which depicts that the internal services quality accounts 19.8% variation in the

dependent variable i.e. the employees’ job satisfaction at the work experience group of

above 21 years. The analysis further depicts that there is a positive relationship between

the internal service quality and the employees’ job satisfaction (β= 0.877) which shows

that the job satisfaction level is sensitive to the internal services quality at this work

experience group and it contributes 87.7% change in the employees’ job satisfaction.

In concluding remarks it is summarized that the table reveals R- square values of

all the work experience groups. It is evident from the analysis that the R square is equal to

.011 of the work experience group of 6-10 years is less than the work experience group of

11-15 (0.100) which depicts that according to the employees with the work experience

group 11-15; the internal services quality accounts 10 % variation in the employees’ job

satisfaction whereas the work experience group 5-10 perceives 1% variation while the

work experience group 16-21 years perceives 13.2 % variation and the work experience

group above 21 years perceives 19.8 % of variation which is greater than that of all the

age groups which indicates that the above 21 years of work experience employees

perceive more of the internal services quality to account in the employees’ job

satisfaction. If the beta value is compared, it is clear from the analysis that all the

categories perceive positive impact of the internal services quality on the employees’ job

satisfaction (β =0.157), (β =0.556), (β =0.585), (β =0.877).

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Section 4

This section describes the relationship computation relationship among employee

satisfaction, employee retention and employee productivity by means of regression

analysis is applied to check the perceived relationship of the said variables with respect to

demographic variables.

4.9 CASEWISE REGRESSION ANALYSIS OF THE EMPLOYEES’ RETENTION

ON THE EMPLOYEES’ JOB SATISFACTION.


Retention with selection variable Employee Retention.

Dependent Variable: Employees’ Retention

Variable β S.E t- value R-Square F-Stat Sig (Constant) 2.660 0.213 12.503 .082 35.425 .000

EJS 0.292 (0.049) (5.952) .000

In the above table 4.9.1, the regression analysis of the employees’ retention with

the employees’ job satisfaction are executed with the proposition that the “employees’ job

satisfaction has no relationship with the employees’ retention”.


R2 = 0.082 which depicts that the employees’ job satisfaction accounts 8.2% variation in

the employees’ retention. The analysis further depicts that there is a positive relationship

between the employees’ retention and job satisfaction (β= 0.292) which shows that the

employees’ retention level is sensitive to the employees’ job satisfaction and their job

satisfaction contributes 29.2% change in the employees’ retention and the relationship is

statistically significant as the probability value for this work experience group is less than

the level of significance i.e. 0.05 %.

259

4.9.2 Regression Analyses of the Employees’ Job Satisfaction on the Employees’

Retention with selection variable Gender.

Dependent Variable: Employees’ Retention, Selection Variable: Gender.

Gender Variable β S.E t- value R-

Square F-Stat Sig

Male

(Constant) 2.691 .243 11.071 .077 27.094 .000

EJS .290 .056 5.205 .000

Female

(Constant) 2.659 .444 5.985 .085 6.524 .000

EJS .269 .105 2.554 .013

In the table 4.9.2, the results of the regression analysis for the employees’ job

satisfaction with respect to their retention with the selection variable gender are executed

with the proposition that the “employee retention has a no significant relationship with

the employees’ job satisfaction for both the genders”. The group is categorized into the

males and females. The analysis shows that the model is significant for both the males

and female categories at (F, 27.094), (P<0.05) and (F, 6.524), (P<0.05) respectively. The

analysis further shows that the value of R-Square is 0.077 means that the employees’ job

satisfaction accounts 7.7 % of variation in the dependent variable i.e. employees retention

for the male category and the value of R-Square is 0.085 shows that the employees job

satisfaction accounts 8.5 % of variation in the employees’ retention for the female

category. The table further reveals that the value of R square for the female employees is

greater than that of the male employees which depicts that according to the female

employees of the banks the employees’ job satisfaction accounts more in their retention

than that of the male employees.

260

The analysis further reveals that the regression coefficient (β=.290) for the

employees’ job satisfaction shows that employees’ retention level is sensitive to their job

satisfaction. The employees’ job satisfaction contributes 29% change in their retention in

the male employees supported by the positive sign of the employees’ job satisfaction co-

efficient. The above output the t- value for the employees’ job satisfaction is 5.2505 with

a standard error of 0.056. The P value of the model is 0.000 which reveals that the male

group has a significant relationship of employees’ Job satisfaction with the employee

retention. The analysis further reveals that regression coefficient (β=. 269) for the

employees’ job satisfaction for the female category indicates that the employees’

retention level is sensitive to the employees’ job satisfaction. The employees’ job

satisfaction brings/contributes 26.9% change in their retention in the female employees

supported by the positive sign of their job satisfaction co-efficient.

The table further shows the t- value for the employees’ job satisfaction is 2.554

with a standard error of 0.105. The P value of the female category is 0.013 which satisfies

the hypothesis. Hence, it concludes that the employees’ job satisfaction has a positive

effect on the employee retention of the female employees. In concluding remarks for this

regression output it has been observed that the employees’ job satisfaction for both the

males and the females has a positive relationship with their retention and this relationship

is statistically significant and it is also noted that the male employees perceive more of

the job satisfaction than the female employees.

261


Retention with selection variable Age Group.

Dependent Variable: Employees’ Retention, Selection Variable: Age Group

The above table 4.9.3 shows the regression analysis between the employees’

retention and their job satisfaction with respect to the age groups. The above regression

model between the employees’ job satisfaction and the internal services quality with

respect to the age groups is executed to check the proposition that the employees’

retention has no relationship with their job satisfaction at any age group. The group is

categorized into four age groups which are less than 30 years, 30-39 years, 40-49 years

and 50 years and above.

The table further shows the regression analysis between the employees’ retention

and employees’ job satisfaction which has been executed at the age group of less than 30

years. The table reveals that the regression model is significant (F, 7.689),(P<0.05) with

Age group Variable β S.E t-

value R-

Square F-Stat Sig < 30 Years (Constant) 2.384 .493 4.840 .100 7.689 .000

EJS 0.327 0.118 2.773 .007

30 – 39 Years

(Constant) 2.884 0.526 5.484 .052 3.432 .000

EJS 0.230 0.124 1.853 .069

40 – 49 Years

(Constant) 2.577 0.267 9.653 .112 29.538 .000

EJS 0.325 0.060 5.435 .000

>50 Years

(Constant) 4.039 .859 4.703 .001 .067 .000

EJS -0.053 0.206 -0.258 .798

262

(R2 = 0.10) which depicts that the employees’ job satisfaction accounts 10 % variation in

employees’ retention at the age group of less than 30 years. The analysis further shows

that there is a positive relationship between the employees’ job satisfaction and

employees’ retention (β= 0.327) which reveals that their retention level is sensitive to

their job satisfaction at this age group and it brings/contributes 32.7% change in their

retention and the relationship is statistically significant as the probability value for this

age group is less than the level of significance (0.05 %). The analysis further explains that

the employees’ job satisfaction is perceived as an important factor in employees’

retention (t = 2.773).

The table further shows regression analysis between the employees’ retention and

their job satisfaction at the age group of less than 30-39 years. The table reveals that the

regression model is insignificant (F, 3.432),(P>0.05) with R2 = 0.052 which depicts that

the employees’ job satisfaction accounts 5.2 % variation in the dependent variable i.e.

their retention at the age group between 30-39 year which is less than that of the early age

group of less than 30. The analysis further reveals that there is a positive relationship

between the employees’ job satisfaction and their retention (β= 0.230) which shows that

the employees’ retention level is sensitive to employees’ job satisfaction at this age group

and brings/contributes 23.0% change in their retention and this relationship is statistically

not significant as the probability value for this age group is greater than the level of

significance (0.05). The analysis further explains that the employees’ job satisfaction is

perceived as an important factor in employees’ retention (t = 1.853).


satisfaction and the employees’ retention at the age group of less than 40-49 years. The

263

table reveals that the regression model is significant (F, 29.538),(P<0.05) with R2 = 0.112

which depicts that the employees’ job satisfaction accounts 11.2 % variation in the

dependant variable i.e. employee retention at the age group between 40-49 years. The

analysis further reveals that there is a positive relationship between the employees’ job

satisfaction and their retention (β= 0.325) which shows that the employees’ retention

level is sensitive to employees’ job satisfaction at this age group and brings/contributes

32.5% change in the employees’ retention supported by the positive sign of the

employees’ job satisfaction co-efficient and this effect or relationship is statistically

significant as the probability value for this age group which is less than the level of

significance. The analysis further explains that the employees’ job satisfaction is

perceived as an important factor in employee retention (t = 5.435).

The table further reveals the regression analysis between the employees’ job

satisfaction and employees’ retention at the age group of 50 years and above. The table

reveals that the regression model is not significant (F, 0.67),(P>0.05) with R2 = 0.001

which depicts that the employees’ job satisfaction accounts 0.1 % variation in the

dependent variable i.e. employees’ retention at the age group of less than 50 years and

above. This is the lowest figure of in all these groups. The analysis further reveals that

there is a negative relationship between the employees’ job satisfaction and the

employees’ retention (β= -0.053) which shows that the employees’ retention level is

sensitive to their job satisfaction at this age group and it brings/contributes -5.3% change

in the employees’ retention supported by the negative sign of their job satisfaction co-

efficient and this effect or relationship is not statistically significant as the probability

value for this age group is greater than the level of significance.

264

In concluding remarks it is summarized that from the table it is clear that the

lowest value of R square is .001 for the age group of 50 and it accounts low variation in

the employees’ retention at this age group. Further it is concluded that to some extent the

employees’ job satisfaction is perceived by the employees as their age increases at the age

group of 50 and above though there is a negative relationship with employees’ job

satisfaction but this relationship is not statistically significant. The employees’ at the age

of 50 and above the retention level is negative with the employees’ job satisfaction.

265


Retention with selection variable Educational Level. Dependent Employees’ Retention, Selection Variable: Educational Level

The above table 4.9.4, shows the results of regression model between the

employees’ retention and the employees’ job satisfaction with respect to their educational

level with the proposition that their job satisfaction has no relationship with their

retention in both the groups of the educational level. The group is categorized into

educational level of the masters and the graduates.

The table further reveals that the regression analysis for the graduates level

employees is significant (F=7.116), (P<0.05) at the value of R-Square is 0.052 which

indicates that the 5.2 % of variation is accounts in employee retention by their job

satisfaction for the graduates employee category. The coefficient (β =0.202) for their job

satisfaction reveals that this level is sensitive to their job satisfaction. The employees’ job

satisfaction brings/contributes 20.2% change in the employees’ retention in those

employees who have the bachelor level education supported by the positive sign of

employees’ job satisfaction co-efficient. The regression output reveals that the t- value for

the employees’ job satisfaction is 2.677 with the standard error of 0.76. The P value of the

Educational Level β S.E t- value R-

Square F-Stat Sig

Bachelors

(Constant) 2.972 .328 9.065 .052 7.166 .000

EJS .202 .076 2.677 .008

Masters

(Constant) 2.555 .269 9.486 .093 27.422 .000

EJS .324 .062 5.237 .000

266

model is 0.008 which reveals that the proposition is likely to be rejected as the probability

value for this group is less than the level of significance.

In the above table the regression analysis for the masters level employees shows

that the model is significant (F=27.422), (P<0.05) at the value of R-Square is 0.093 which

indicates that 9.3% of variations is the employees’ retention by their job satisfaction for

the masters level employees’ category. The coefficient (β =0.324) which reveals that the

employees’ retention level is sensitive to their job satisfaction. The employees’ job

satisfaction contributes 32.4% changes in the employees’ retention, of those who have

masters level education supports by the positive sign of the employees’ job satisfaction

co-efficient, and this effect is relatively more than that of those employees who have the

bachelor level education. The table further reveals the t- value for employees’ job

satisfaction is 0.093 with a standard error of 0.062. The t- value for the masters level

education employees is greater than that of the graduate level ones.

In the concluding remarks, it is observed that the beta coefficient of the masters

level employees is greater than that of the bachelor level employees and the effect is

statistically significant. Moreover it is noteworthy here that the graduate level employees

perceive less of then job satisfaction than the masters level employees as the beta

parameter for the graduates level employee is higher than that of the masters level

employees.

267

4.9.5 Regression Analyses of the Employees’ Job Satisfaction on the Employees’ Retention

with selection variable Bank Type.

Dependent Variable: Employees’ Retention, Selection Variable: Bank Type

The above table 4.9.5 shows the regression analysis between the employees’ job

satisfaction and employees’ retention with respect to the bank type executed with the

proposition that the employees’ job satisfaction has no relationship with employees’

retention in both types of the banks. The group is categorized into the public banks and

the privatized banks.

The regression analysis for the public banks’ employees shows that the model is

significant (F=28.719), (P>0.05) at the value of R-Square is 0.092 which means that the

9.2 % of variation is accounts in their retention by their job satisfaction for the public

banks category. The coefficient (β =0.319) for the employees’ job satisfaction reveals that

the employees’ retention level is sensitive to their job satisfaction in the public banks. The

employees’ job satisfaction brings/contributes 31.9% change in their retention in such

employees who belong to the public sector banks supported by the positive sign of their

job satisfaction co-efficient. The above output shows the t- value for the internal service

is 5.359 with a standard error of 0.060. The P value of the model is 0.000 which reveals

Bank Type β S.E t-

value R-

Square F-Stat Sig

Public Bank

(Constant) 2.546 0.258 9.852 0.092 28.719 0.000

EJS 0.319 0.060 5.359 0.000

Privatized

Bank

(Constant) 2.928 .374 7.839 0.06 6.97 .000

EJS .226 .086 2.641 .009

268

that the employees belong to the public sector banks who perceive their job satisfaction

and, thus, retention and its relationship with their retention is statistically significant.

The table further shows the regression analysis for the employees who belong to

the privatized banks that the model is significant (F=6.97), (P<0.05) at the value of R-

Square is 0.06 which means that 6 % of the variation is accounts in the employees

retention by their job satisfaction for the privatized banks category. The coefficient (β

=0.226) reveals that the employees retention level is sensitive to their job satisfaction

which brings/contributes 22.6% change in their retention, in such employees who belong

to the privatized banks sector supported by the positive sign of their job satisfaction co-

efficient, and this effect is relatively more than that on the public sector banks’

employees. Further, the t- value for the internal services is 2.641 with a standard error of

0.086. The P value of the model is 0.009 which reveals that there is a positive relationship

between the employees’ retention and their job satisfaction for the privatized banks. The

results and the relationship are statistically significant. Here it is noteworthy that the

public banks’ employees perceive more of the job satisfaction than the privatized banks’

employees in term of sensitivity of the beta factor.

In concluding remarks, the public sector banks give more importance to the

employees’ retention than the privatized sector banks as the t value of the public sector

banks is greater than that of the privatized banks (t =5.359 ) ( t=2.641) respectively . It is

clear from the analysis that both the categories of the banks perceive positive impact of

the employee retention on the employees’ job satisfaction (β = .319) (β =0.226).

269


Retention with selection variable Work Experience.

Dependent Variable: Employees’ Retention, Selection Variable: Work Experience

6 -10 Years (Constant) 2.354 .410 5.742 .147 14.270 .000

EJS .366 .097 3.778 .000

11 - 15 Years

(Constant) 4.553 .605 7.526 .032 1.538 .000

EJS -.175 .141 -1.240 .221

16 -21 Years

(Constant) 3.495 .657 5.320 .004 .244 .000

EJS .079 .159 .494 .623

Above 21

Years

(Constant) 2.182 .305 7.143 .156 35.589 .000

EJS .406 .068 5.966 .000


retention and the employees’ job satisfaction with respect to the work experience groups

that are executed with the proposition that the employees’ retention has no relationship

with their job satisfaction at any age group. The group is categorized into four age groups

which are less than 30 years, 30-39 years, 40-49 years and 50 years and above.


R2 = 0.147 which depicts that the employees’ job satisfaction accounts 14.7 % variation

in their retention at the work experience group between 6 – 10 years. The analysis further

shows that there is a positive relationship with regard to the employees job satisfaction

and the employees’ retention (β= 0.366) which reveals that the employees’ retention level

Work Experience Variable

Β S.E

t- value

R-Square F-Stat Sig

270

is sensitive to their job satisfaction at this work experience group and it contributes 36.6%

change in the employees’ retention supported by the positive sign of their job satisfaction

co-efficient and this relationship is statistically significant. The analysis further explains

that the employees job satisfaction is perceived as an important factor in the employees’

retention (t = 3.778).

The table reveals that the regression model is insignificant (F, 1.538),(P>0.05)

with R2=0.032 which depicts that the employees’ job satisfaction accounts 10 % variation

in the employees’ retention at the work experience group of 11-15 years. The analysis

further reveals that there is a negative relationship between the employees’ job

satisfaction and their retention (β= -0.175) which shows that the employees’ retention

level is sensitive to their job satisfaction at this work experience group and it contributes -

17.5% change in their retention supported by the negative sign of their job satisfaction co-

efficient and the relationship is not statistically significant as the probability value for this

age group is greater than the level of significance i.e. 0.05 %.

The table further depicts that the regression model is not significant (F,

0.244),(P>0.05) with R2 = 0.004 which shows that the employees’ job satisfaction

accounts .4 % variation in the dependent variable i.e. employees’ retention at the work

experience group between 16-21 years. The analysis further reveals that there is a positive

relationship between the employees’ job satisfaction and their retention (β= 0.079) which

shows that their retention level is sensitive to their job satisfaction at this work experience

group and it brings/contributes 7.9% change in the employees’ retention supported by the

positive sign of the employees’ job satisfaction co-efficient and its effect or the

271

relationship is statistically not significant as the probability value for this age group is

greater than the level of significance.


R2 = 0.156 which shows that the employees’ job satisfaction accounts 15.6% variation in

the dependent variable i.e. employee retention at the work experience group of above 21

years. The analysis further depicts that there is positive relationship between the

employees’ job satisfaction and employees’ retention (β= 0.406) which shows that the

employees’ retention level is sensitive to their job satisfaction at this work experience

group and it brings/contributes 87.7% change in their retention supported by the positive

sign of their job satisfaction co-efficient and the relationship is statistically significant as

the probability value for this work experience group is less than the level of significance.

In concluding remarks it is summarized that to some extent the employees’

retention is perceived by them as their work experience increases at the work experience

of 16 years and above, however, less than 16 years of work experience shows a positive

relationship with their job satisfaction, but these relationships are not statistically

significant.

272

Section 5

In section five the significance of hypothesis is checked by mean of simple

regression analysis of organizational performance with internal service quality, employee

job satisfaction, employee retention, employee productivity. Before executing the

regression analysis reliability statistics is used to check the internal consistency and

validity of data of different variables as well as for items of the questionnaire, then

descriptive statistics is used to check the mean and standard deviation of the variables and

linked it with the correlation analysis.

4.10. Case wise Regression analysis of the Employees’ Productivity on the Employees’ Satisfaction. 4.10.1 Regression Analysis of the employees’ Job Satisfaction on the Employees’

Productivity with selection variable Age Group

Dependent Variable: Employees’ Productivity, Selection Variable: Age Group.

Age group Variables β S.E t-

value R-

Square F-Stat Sig < 30 Years (Constant) 3.039 .462 6.585 .000

EJS .154 .110 1.398 0.028 1.953 .167

30 - 39 Years

(Constant) 3.157 .479 6.588 .000

EJS .139 .113 1.229 0.023 1.511 .224

40 - 49 Years

(Constant) 2.931 .249 11.758 .000

EJS .252 .056 4.519 0.088 20.419 .000

>50 Years

(Constant) 4.657 .574 8.109 .000

EJS -.213 .138 -1.543 0.047 2.318 .129

273

The above table shows the regression analysis between the employees’ job

satisfaction and employees’ productivity executed with the proposition that the

employees’ job satisfaction has no relationship with their productivity at different age

group i.e. less than 30 years, 30 - 39 years, 40 – 49 years and above 50 years.

The above table reveals that the regression model is insignificant (F,

1.953),(P>0.05) with R2 = 0.028 which depicts that the employees’ job satisfaction

accounts 2.8 % variation in their productivity at the age group of less than 30 years. This

does not satisfy the hypothesis that the employees’ job satisfaction has a significant

relationship with their productivity at this age group. The analysis further shows that there

is a positive relationship between the employees’ job satisfaction and there productivity

(β= 0.154) which reveals that the employees’ productivity level is sensitive to their job

satisfaction at this age group and it contributes 15.4% change in the employees’

productivity supported by the positive sign of their job satisfaction co-efficient and the

relationship is statistically not significant as the probability value for this age group is

greater than the level of significance. The analysis further explains that the employees’

job satisfaction is perceived as an important factor in their productivity (t = 1.398).

The table further reveals that the regression model for the age group 30- 39 is

insignificant (F, 1.511),(P>0.05) with R2=0.023 which depicts that the employees’ job

satisfaction accounts 2.3 % variation in the dependent variable i.e. the employees’

productivity. The analysis further reveals that there is a positive relationship between the

employees’ job satisfaction and their productivity (β= 0.139) which shows that the

employees’ productivity level is sensitive to the employees’ job satisfaction at this age

group and it brings 13.9% changes in the employees’ productivity supported by the

274

positive sign of their job satisfaction co-efficient and the relationship is statistically not

significant as the probability value for this age group is greater than the level of

significance. The analysis further explains that the employees’ job satisfaction is

perceived as an important factor in the employees’ productivity (t = 1.229).


R2=0.088 which depicts that the employees’ job satisfaction accounts 8.8% variation in

the dependent variable i.e. the employees’ productivity at the age group between 40-49

years. The analysis further reveals that there is a positive relationship between the


employees’ productivity level is sensitive to their job satisfaction at this age group and it

brings/contributes 25.2% change in the employees’ productivity supported by the positive

sign of their job satisfaction co-efficient and the relationship is statistically significant as

the probability value for this age group is less than the level of significance.


with R2=0.047 which depicts that the employees’ job satisfaction accounts 4.7 %

variation in the dependent variable i.e. employees’ productivity at the age group of less

than 50 years and above. The analysis further reveals that there is a negative relationship

between the employees’ job satisfaction and their productivity (β=-0.213) shows that the

employees’ productivity level is sensitive to their job satisfaction at this age group and it

brings/contributes -21.3% change in their productivity supported by the negative sign of

their job satisfaction co-efficient and the relationship is statistically not significant as the

probability value for this age group is greater than the level of significance.

275

In the concluding remarks, it is summarized that from the table, it is clear that the

lowest value of R square is 0.023 for the age group 30-39 and it accounts low variation in

the employees’ productivity at this age group. The highest value of R square is 0.088 in

this model that accounts a high variation in the employees’ productivity at the age group

of 40-49. Further, it is concluded that to some extent the employees’ productivity is

perceived by the employees as their age increases at the age group of 50 and above

though there is a negative relationship with the employees’ job satisfaction but this

relationship is not statistically significant.

276


Productivity with selection variable Gender

Dependent Variable: Employees’ Productivity, Selection Variable: Gender

The above table 4.10.2 shows the regression analysis between the employees’ job

satisfaction and their productivity with respect to gender with the proposition that the

employees’ productivity has no significant relationship with their job satisfaction in both

the genders. The group is categorized into the males and the females.

The analysis shows that the model is significant at (F, 29.935), (P<0.05) for the

male category. The analysis further shows that the value of R-Square is 0.084 that means

that the employees’ job satisfaction accounts 8.4 % of variation in their productivity for

the male category. The analysis further reveals that the regression coefficient (β=.250) for

the employees’ job satisfaction shows that their productivity level is sensitive to their job

satisfaction. The employees’ job satisfaction contributes 25.0% change in their

productivity in the male employees supported by the positive sign of their job satisfaction

co-efficient. The output shows the t-value for the employees’ job satisfaction is 5.471

with a standard error of 0.046. The P value of the model is 0.000 which reveals that the

male group has a significant relationship of their job satisfaction with their productivity.

Gender Variables β S.E t-

value R-

Square F-Stat Sig

Male

(Constant) 2.885 .199 14.473 0.084 29.935 .000

EJS .250 .046 5.471 .000

Female

(Constant) 3.732 .486 7.684 0.001 0.08 .000

EJS -.032 .115 -.282 .779

277

The table further reveals the results of the regression analysis for the female

employees’ job satisfaction with respect to their productivity. The analysis shows that the

model is insignificant at (F, 0.08), (P>0.05) for the female category. The analysis further

shows that the value of R-Square is 0.001 which means that the employees’ job

satisfaction accounts 0.1% of variation in the dependent variable i.e. their productivity for

the female category. The analysis further reveals that the regression coefficient (β=-

0.032) for the employees’ job satisfaction indicates that their productivity level is

sensitive to their job satisfaction. The employees’ job satisfaction brings/contributes

-3.2% changes in their productivity in the female employees supported by the negative

sign of their job satisfaction co-efficient. The above table shows the t- value for the

employees’ job satisfaction is -2.82 with a standard error of 0.115. The P value of the

female category is 0.779 which does not satisfy the hypothesis.

In the concluding remarks for this regression output it has been observed that the

males have a positive relationship with their job satisfaction but this relationship is

statistically significant and their productivity of the female have a negative relationship.

However, it is noted that the male employees perceive more of the employees’ job

satisfaction than the female employees and, hence, they are more sensitive to their

productivity.

278


Productivity with selection variable Educational Level

Dependent Variable: Employees’ Productivity, Selection Variable: Educational Level.

Educational Level Variables β S.E

t- value

R-Square F-Stat Sig

Graduates

(Constant) 3.515 .297 11.849 0.014 1.865 .000

EJS .093 .068 1.366 .174

Master

(Constant) 2.817 .243 11.584 0.070 19.87 .000

EJS .249 .056 4.457 .000


productivity and their job satisfaction with respect to the educational level of the

respondents executed with the proposition that the employees’ job satisfaction has no

relationship with their productivity in both the groups of the educational level. The group

is categorized into the educational level of the masters and the graduates.

The table further shows that the regression analysis for the graduate level

employees shows that the model is not significant (F=1.865), (P>0.05) as the value of R-

Square is 0.014 which means that the 1.4 % of the variation is accounts in the dependent

variable i.e. the employees’ productivity by the independent variable i.e. the employees’

job satisfaction for the graduate level employees’ category. The coefficient (β =0.093)

for the employees’ job satisfaction reveals that their productivity level is sensitive to their

job satisfaction. The employees’ job satisfaction brings/contributes 9.3% change in their

productivity in those employees who have the bachelor level education supported by the

positive sign of their job satisfaction co-efficient. In the above output the t-value for the

employees’ job satisfaction is 1.366 with a standard error of 0.068. The P value of the

279

model is 0.174 which reveals that the proposition is likely to be rejected as the probability

value for this group is greater than the level of significance and hence the results are

statistically not significant and it concludes that the employees’ whose have the graduate

level education fail to perceive the employees’ job satisfaction.

Further, the regression analysis for the masters level employees shows that the

model is significant (F=19.87), (P<0.05) as the value of R-Square is 0.070 which means

that the 7.0 % of variation is accounts in the dependent variable i.e. the employees’

productivity by the independent variable i.e the employees’ job satisfaction for the

masters level of the educational category. The coefficient (β =0.249) reveals that the

employees’ productivity level is sensitive to their job satisfaction. The employees’ job

satisfaction brings/contributes 24.9% change in their productivity for those who have the

masters level educations supports by the positive sign of their job satisfaction co-efficient,

and this effect is relatively more than that on those employees who have the bachelor

level of education. The t- value for the employees’ job satisfaction is 4.457 with a

standard error of 0.056. The P value of the model is 0.000 which does support the

hypothesis that the highly educated employees perceive more of the employees’ job

satisfaction and thus their productivity as the probability value for this group is less than

the level of significance.

In concluding remarks, it is observed that though the beta coefficient of the

masters level educated employees is greater than that of the bachelor level educated

employees and this effect is statistically significant. Moreover, it is noteworthy here that

the graduate level educated employees perceive less of their job satisfaction and, thus,

less productive than the masters level educated employees as the beta parameter for the

masters level employee is higher than that of the graduate level employees.

280


Productivity with selection variable Bank Type

Dependent Variable: Employees’ Productivity, Selection Variable: Bank Type


productivity and their job satisfactions with respect to the bank types executed with the

proposition that the employees’ job satisfaction has no relationship with their productivity

in both types of the bank. The group is categorized into the public sector banks and the

privatized sector banks.

The regression analysis for the public banks’ employees shows that the model is

significant (F=17.007), (P<0.05) as the value of R-Square is .056 which means that the

5.6 % of variation is accounts in the dependent variable (employee productivity) by the

independent variable i.e. the employees job satisfaction for the public sector banks. The

coefficient (β =0.208) for the employees’ job satisfaction reveals that their productivity

level is sensitive to their job satisfaction regarding the public sector banks. The

employees job satisfaction brings/contributes 31.9% change in their productivity in such

employees who belong to the public sector banks supported by the positive sign of their

Bank Type Variables β S.E t-

value R-

Square F-Stat Sig

Public Banks

(Constant) 3.004 .219 13.742 0.056 17.007 .000

EJS .208 .050 4.124 .000

Privatized

Banks

(Constant) 3.014 .393 7.668 0.045 5.241 .000

EJS .206 .090 2.289 .024

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job satisfaction co-efficient. The above output shows the t- value for the employees’ job

satisfaction is 4.124 with a standard error of 0.050. The P value of the model is 0.000

which reveals that the employees who belong to the public sector banks perceive their job

satisfaction and relationship with their productivity which is statistically significant.

The table further shows that the regression model for those who employees belong

to the privatized banks is significant (F=5.241), (P<0.05) as the value of R-Square is

0.045 which means that 4.5% of the variation is accounts in the dependent variable

(employees’ productivity) by the independent variable i.e. the employees’ job satisfaction

for the privatized banks category. The coefficient (β=0.206) reveals that the employees’

productivity level is sensitive to their job satisfaction which brings/contributes 20.6%

change in their productivity in such employees who belong to the privatized sector of the

banks supported by the positive sign of their job satisfaction co-efficient, and this effect is

relatively more than that on the public sector banks employees. The t-value for the

employees’ job satisfaction is 2.289 with a standard error of 0.090. The P value of the

model is 0.024 which reveals that there is a positive relationship between the employees’

productivity and their job satisfaction for the privatized banks. The results and the

relationship are statistically significant. Here, it is noteworthy that the public banks’

employees perceive more of the job satisfaction than the privatized banks’ employees in

term of the sensitivity of the beta factor.

282


Productivity with selection variable Work Experience.

Dependent Variable: Employees’ Productivity, Selection Variable: Work Experience


productivity and their job satisfaction with respect to the work experience groups that

have been executed with the proposition that the employees’ productivity has no

relationship with their job satisfaction at any age group. The group is categorized into

four age groups which are less than 30 years, 30-39 years, 40-49 years and 50 years and

above.

The table further reveals that the regression model is insignificant (F,

0.695),(P>0.05) with R2=0.008 which depicts that the employees’ job satisfaction

accounts .08 % variation in the dependent variable i.e. the employees’ productivity at the

work experience group between 6 – 10 years. This does not satisfy the hypothesis that

Work Experience Variables β S.E

t- value

R-Square F-Stat Sig

6 -10 Years (Constant) 3.383 .407 8.312 .008 .695 .000

EJS .080 .096 .834 .407

11 - 15 Years

(Constant) 1.976 .535 3.691 .189 10.748 .001

EJS .410 .125 3.278 .002

16 -21 Years

(Constant) 4.231 .430 9.845 .009 .595 .000

EJS -.080 .104 -.771 .443

Above 21 Years

(Constant) 3.032 .285 10.646 .060 12.294 .000

EJS .223 .064 3.506 .001

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the employees’ job satisfaction has a significant relationship with their productivity at this

age group. The analysis further shows that there is a positive relationship between the

employees’ job satisfaction and their productivity (β= 0.080) which reveals that the

employees productivity level is sensitive to their job satisfaction at this work experience

group and it brings/contributes 8.0% change in the employees’ productivity supported by

the positive sign of their job satisfaction co-efficient and this relationship is statistically

not significant as the probability value for this age group is greater than the level of

significance.


with R2=0.008 which depicts that the employees’ job satisfaction accounts .8% variation

in the dependent variable i.e. the employees’ productivity at the work experience group of

11-15 years. The analysis further reveal that there is a positive relationship between the


employees’ productivity level is sensitive to their job satisfaction at this work experience

group and it brings/contributes 42.3% change in the employees’ productivity supported

by the positive sign of their job satisfaction co-efficient and the relationship is statistically

significant as the probability value for this age group is less than the level of significance.

The table depicts that the regression model is not significant (F, 0.595),(P>0.05)

with R2=0.009 which shows that the employees’ job satisfaction accounts .09 % variation

in the dependent variable i.e. the employees’ productivity at the work experience group

between 16-21 years. The analysis further reveals that there is a negative relationship

between the employees’ job satisfaction and their productivity (β= -0.080) which shows

that their productivity level is sensitive to their job satisfaction at this work experience

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group and it brings/contributes -8% change in the employees’ productivity supported by

the negative sign of their job satisfaction co-efficient and its effect or relationship is

statistically not significant as the probability value for this age group is greater than the

level of significance.


R2=0.060 which shows that the employees’ job satisfaction accounts 6% variation in the

dependent variable i.e. the employees’ productivity at the work experience group of

above 21 years. The analysis further depicts that there is a positive relationship between

the employees’ job satisfaction and their productivity (β= 0.223) which shows that the

employees’ productivity level is sensitive to their job satisfaction at this work experience

group and it brings/contributes 22.3% change in their productivity supported by the

positive sign of their job satisfaction co-efficient and the relationship is statistically

significant as the probability value for this work experience group is less than the level of

significance.

In the concluding remarks, it is summarized that to some extent the employees’

retention is perceived by the employees as their work experience increases at the work

experience of 16 years and above, however greater than 21 years of the work experience

shows a positive relationship with the employees job satisfaction, but these relationships

are not statistically significant.

285

Section 6

The section describes multiple regression analyses to check the significance of

over all model and analyses is also used for the data reduction purpose.

4.11 Multiple Regression Analysis

4.11.1 Multiple Regression of the Employees’ Productivity the Employees’ Retention

on the Organizational Performance.

Dependent variable: The Organizational Performance

The multiple regression has been applied in order to check the significance of the

employees’ retention and their productivity on the organizational performance with the

hypothesis that both the independent variables like the employees’ retention and their

productivity have a significant relationship with the organizational performance.

In the above table 4.11.1 the regression analysis shows that the individual effect of

both the independent variables is different from each other. The employees’ retention

depicts a positive relationship with the organizational performance whereas the

employees’ productivity has a negative effect on the organizational performance. The

table further reveals the regression analysis for the organizational performance which

Variables β S.E t-

value R-

Square

Adjusted R-

Square F-Stat Sig Constant .346 .141 2.46

Employee Retention .935 .024 39.03 0.855 0.854 762.652 .000

Employee Productivity -.018 .028 -.63

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shows that the value of R-Square is 0.855 and adjusted R- Square is 0.855 and the F-value

is 762.652. The results show that the model is significant at the 95% and the variables are

compared on the individual basis, the employees’ retention is a significant variable at

(p<.05). The regression coefficient for the employee retention is 0.935 which suggests

that the organizational performance is sensitive to the employees’ retention. The

employees’ retention brings/contributes 93% change in the organizational performance.

However, the overall model is insignificant on the basis of F- Stat. Therefore, it reveals

that on the individual basis, the employees’ retention has statistically a significant

relationship with the organizational performance, but when it is analysed for the

combined effect of the employees retention and their productivity with respect to the

organizational performance, both the independent variables have a insignificant

relationship with the organizational performance.

4.12 Testing of the Hypothesis

The concept that people are the organization’s key source of sustained competitive

advantage continues to be an overriding theme in the research literature and a lever for

the HR practitioners (Grattan, 2000; Pfeffer, 1994; Barney, 1995). It is not surprising,

therefore, that the link between the human resource management practices, the employees

and the organizational performance has attracted a considerable attention over the past

decades when the service companies especially the banks place their employees and the

customers first, radical shift occurs in the way they manage and measure their success.

The customers today are strongly value oriented and they should be considered as the

basic business line. The customers tell us that value means the results they receive in

relation to the total costs which includes both the price and other costs to the customers

incurred in acquiring the service. A number of writers have addressed the importance of

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the internal support which includes the employees’ satisfactions, their retention, their

productivity in term of the internal marketing and the internal customers, and then they

link it with the quality of service and ultimately link it to a business process and the


4.13 Correlation Analysis

It has been based on the sound reliability statistics of the variables already

discussed above. The mean value of each variable is calculated, i.e. internal services

quality, the employees’ satisfaction, their retention, their productivity and ultimately the

organizational performance. Based on the mean value of these variable bivariate Pearson

product correlation is executed in the statistical software. Below is detailed the correlation

matrix among the variables.

4.13.1 Correlations Matrix of Variables

ISQ EJS ER EP OP

ISQ 1

EJS .308** 1

ER .119* .286** 1

EP .175** .229** .073 1

OP .145** .282** .941** .053 1

*. Correlation is significant at the 0.05 level (2-tailed). ISQ = The Internal Service Quality EJS = The Employee Job Satisfaction ER= The Employees’ Retention EP = The Employees’ Productivity OP = The Organizational Performance.

288

In our study the organizational performance (OP) is the dependent variable while

the remaining of the variables are the independent ones. Based on the relevant literature

we formulated the hypotheses for the respective study. The segment-wise analysis and

verification of the hypotheses were carried out in the following way.

4.14. DESCRIPTIVE STATISTICS

4.14.1 Descriptive Statistics of the Variables

Descriptive Statistics

Variables Mean Std. Deviation

The Internal Service Quality 3.8 .39

The Employee Job Satisfaction 4.3 .65

The Employees’ Retention 3.9 .66

The Employees’ Productivity 3.9 .59

The Organizational Performance 3.9 .66

Hypothesis 1: The Internal Services Quality is Positively Associated With the

Organizational Performance.

Relations between the employee’s commitment and their satisfaction with their

jobs have been the subject of a huge amount of pragmatic research, and still there seems

little harmony about the fundamental associations between these two important employee

attitudes. Understanding these attitudes is important as they have important impacts on

the organizational performance, and these approaches can be influenced by the human

resource policies and practices. In the study from the above correlation matrix it reveals

that the internal services quality (ISQ) is positively associated with the organizational

performance (OP) i.e. .145 or 14.5 % with the mean 3.8 and standard deviation of 0.39

289

i.e. linked with the study of Rayton (2006). However, this correlation is positive, but the

significant relationship between the internal services quality and the organizational

performance may be checked through a regression analysis in the proceeding discussion.

Hypothesis 2: Employees’ Job Satisfaction is positively associated with the


The employees Job satisfaction is his/her sense of achievement and success at the

job. It is usually professed to be unswervingly linked to output as well as to individual

and the organizational well being. The employees’ job satisfaction implies doing a job

he/she benefit from doing it well and being satisfied for one's efforts. Employee Job

satisfaction further implies enthusiasm and happiness with his/her work. The job

satisfaction is the key ingredient that leads to the organizational success.

In the study the correlation among the employees’ job satisfaction (EJS) and the

organizational performance (OP) is positive and the correlation coefficient is 0.282 which

is 28.2% with the mean of 4.3 and standard deviation of 0.65

The findings regarding association between the employees’ job satisfaction and

the organizational performance is matched with Brayfield and Crockett (1955) in which

they indicated that the relationship between the employees’ job satisfaction and that the

performance was not self-evident. They found high satisfaction to accompany either high

or low productivity and conversely low satisfaction to accompany either a high or low

productivity (performance). In contrast, some other studies have shown that the

employees’ job satisfaction was strongly associated with the organizational performance

and the individual outcomes, such as absenteeism behaviors. These results are also

290

matched with the findings of Ostroff (1992) in which he investigated the relationship

between employees’ attitudes and organizational performance. Ostroff found that the

aggregated employees’ attitudes, such as job satisfaction and the organizational

commitment were concurrently related to the organizational performance as measured by

several performance outcomes, such as the organizational profitability and the

employees’ turnover rates. The magnitudes of the correlation between the employees’

satisfaction and performance ranged from .11 to .54 with a mean of .28. However, the

correlation between the employees’ job satisfaction (EJS) and the organizational

performance (OP), the intensity and significant relationship will be checked through the

regression analysis in the proceeding discussion.

Hypothesis: 3 The Employees’ Retention is Positively Associated With the


In a research stream, say a growing number of studies that the use of bundles of

complementary human resource management practices have a positive effect on

organizational performance has, thus it leads to solid financial results. These packs for

Human Resources Management in practice generally include sophisticated recruitment

and selection processes, appraisal systems, incentive plans and organizational structures

and the associated strategy for the retention of its employees, encouraging cooperation

among the employees

In the study the employees’ retention (ER) and the organizational performance

(OP) is positively associated with each other and there is a strong correlation which is

94.1 %, with the mean of 3.9 and standard deviation of 0.66. Furthermore, our results for

this hypothesis are matched with the results of Guthrie (2001). In which he examined that

291

high-involvement practices increase the employees’ retention and then ultimate positive

effect on the organizational performance.

Hypothesis 4: Employees’ Productivity is Positively Associated With the Organizational

Performance.

Creating a work environment in which the employees are productive is essential to

increase the profits for your organization. The principles of management that how exactly

to dictate the productivity of its employees focus, two major areas: personal motivation

and the infrastructure to maximize the work environment. Many experts have noted that

the workers produce at work, while not only because they paid for it will be more.

Finally, it is not expected that the staff constantly calculating the monetary value of

individual measures they will undertake. The workers do, for example, do not keep a

record of how much they earn each time they send an email to approve a document or to

complete a different task. It is simply not in human nature.

From the discussion and analysis, the study find many positive associations

between the employees’ productivity (EP) and the organizational performance (OP). The

correlation coefficient for this variable is .053 which is 5.3 % with the mean of 3.9 and

standard deviation of 0.59 magnifying a weak correlation. However, the significance will

be checked in the proceeding discussion with the help of regression analysis.

292

4.15. Regression Analysis – Estimating Over all Model

Regression analysis refers to specific techniques for modeling and analysis of

numerical data (ie the values of a dependent variable as a response variable) and one or

more independent variables (also known as explanatory variables or predictors). Model

where the dependent variable in the regression equation as a function of the independent

variables, the corresponding parameters ( "constants"), and an error term. The error term

is treated as a random variable and represents unexplained variation in the dependent

variable. The parameters are estimated by the best-fit type "of data. Are most frequently is

best evaluated using the method of least squares, but other criteria was used.In the study

we have used liner regression model by taking the organizational performance as a

dependent variable and the independent variables are the Internal Service Quality,

Employees’ Job Satisfaction, the Employees’ Retention and the Employees’ Productivity.

The rationale behind using the regression analysis in our study is to check the

significance of independent variables which have been discussed in the correlation

concept.

The level of significance for our study is 0.05 % and the confidence interval is

95%. By executing ordinary least square regression, we got the following output:-

It is noteworthy here that all the independent variable have positive a relation but

with the employees’ productivity with the negative sign of beta i.e. -0.26 while the

organizational performance and the employees’ productivity have a very weak correlation

as well i.e. 0.053 that is 5.3 %.

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4.16 Multiple Regression Analysis of ISQ, EJS, ER and EP on Organizational

Performance.

4.16.1 Multiple Regression Analysis of ISQ, EJS, ER and EP on


Dependent Variable: Organizational Performance

The multiple regression analysis is carried out to check the significance of the

ISQ, the EJS, the ER and the EP on the organizational performance. The individual effect

of each variable is as follow:-

The internal services quality has a positive association with the organizational

performance with the beta value .042 which reveals that the ISQ contributes 42 % to the

change in the organizational performance with the t value of 1.015 and standard error is

0.041 as the P value is greater than the level of significance and the relationship is

statistically insignificant.

Likewise, the employees’ job satisfaction has a insignificant relationship with the

organizational performance. The P value of the employees’ job satisfaction is 0.639

which is greater than the level of significance i.e .05.

Independent Variables β S.E t- value Sig.

R2

Adjusted R2

F- Value

Internal Services Quality .042 .041 1.015 .311

.925

0.85

0.000 Employees’ Job Satisfaction .012 .027 .430 .667

Employees’ Retention .932 .024 38.431 .000

Employees’ Productivity -.017 .028 -.610 .542

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The only variable which has the positive relationship with the organizational

performance is the employees’ retention and this association/relationship is statistically

significant as the level of significance is less than the value of P (P < 0.05 =0.000).

As for as the relationship between the employees’ productivity and the

organizational performance is concerned, in the analysis and the results there is a negative

relationship between the employees’ productivity and the organizational performance and

this relationship is statistically insignificant as the P value is greater than the level of

significance i.e. 0.05.

Another interesting finding is about the R squared and adjusted R Square, The

adjusted R square for the above model is 85 % which indicates that 85 % of the model is

explained by the independent variables and remaining 15% is explained by the external

factor which is not included in the model. It reveals the best fit of the regression model

adjusted for the multifarious and observations.

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4.17 Factor Analysis

The factor analysis is a method which is used to decrease a large number of

variables to less number of factors. The factor analysis takes out maximum ordinary

variance from all the variables and puts them into an ordinary score. As its being an

indicator of all the variables, we can use this score for further analysis. The factor

analysis is an element of general linear model and this technique also supposes several

assumptions: there is a linear relationship, there is no multi-collinearity, it includes

relevant variables into analysis, and there is true correlation between the variables and

factors etc. Several types of factor analysis methods are available, but the principle

component analysis is used most commonly.

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4.17.1 Item Wise Factor analyses of Internal Service Quality

COMMUNALITIES Initial Extraction

We select employee who can provide ideas to improve the business process and the organizational

performance 1.000 .680

We use attitude /desire to work in a team as a criterion in the employee selection 1.000 .730

We use problem solving aptitude as a criterion in the employee selection 1.000 .829

We use the work values and behavioral attitude as a criterion in the employee selection 1.000 .775

There are extensive training programs for the employees regarding all aspects of quality 1.000 .660

The employees on all jobs normally go through training programs every year 1.000 .638

The training needs are identified through a formal performance appraisal mechanism 1.000 .723

There are formal training programs to teach the new employees the skills they need perform their jobs 1.000 .635

The job performance is an important factor in determining the incentive compensation and reward of the

employees 1.000 .785

The compensation is decided on the basis of competence/ability of an employee 1.000 .695

The salary and other benefits are comparable to the market 1.000 .780

The employees know that their pay and benefit package are well above industry or community norms for the

work of comparable values. 1.000 .757

The tools, procedures and materials used at the job are highly specialized in terms of purpose 1.000 .722

The job requires of me to utilize a variety of different skills in order to complete the work 1.000 .506

The job involves interaction with the people that are not member of my bank 1.000 .761

The work performed at the job has a significant impact on the people outside the bank 1.000 .663

The duties of every job are clearly defined 1.000 .703

Each job has an up-to-date job description 1.000 .736

The actual job duties are shaped mostly by the employee him/herself than by the formal job description 1.000 .538

The job description for each job contains all the duties to be performed by an individual 1.000 .693

Extraction Method: Principal Component Analysis.

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Communality, has used the squared multiple correlation for the variable as the

dependent factors as predictors. The measures, which explains the commonality percent

of the variance in a given variables together all the elements and can be interpreted as the

reliability of the indicator. In The above table Dimension reduction is executed and the

above Communalities table is extracted. In the above table the highest communalities is

0.829 for the employees’ selection criteria of bank employees and the low commonalties

is of 0.506 which is for Work design for the employees’.

If an indicator variable has a low communality, the factor model is not good for

this indicator, and possibly it should be removed from the model. Low on the set of

variables are less correlated .While considering the factor Work Design as a determinant

of internal Services quality it is Low communalities

The data analyzed in this research is taken from first section of the questionnaire

that is internal service quality, which is classified into five facets these are the

Employees’ Selection, the Employees’ Training and Development, the Employees’

Reward and Recognition, the answers is used in the analyses .The scale of answer is from

1 = ‘Strongly Disagree to 5 = ‘Strongly Agree.

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4.17.2. The KMO and The Bartlett’s Test

The first output table is the KMO statistics which is shown in the above table. The

KMO statistics signify the ratio of the squared correlation between the variables to the

squared partial correlation between the variables. The value varies between 0 and 1.

The value of 0 indicates that the sum of the partial correlation is highly relative to the

sum of the correlations, representing dispersion in the model of correlation and in

such condition, the factor analysis is likely unsuitable. A value close to 1 indicates

that the patterns of correlations are relatively solid and, so, the factor analysis should

capitulate the distinct and reliable factors (Field, 2000). For the internal services

quality data the value is 0.697 which according to Kaiser –Meyer -Olkin is in the

good category.

4.17.3. Total Variance Explained

The above table is categorized into each factor which are linear components

before extraction, after extraction and after rotation. Before extraction there are 20

components that are all factors listed. From the initial Eigen values from the internal

services quality data factor 1 explains 17.72 % of total variance. It is normal to have

large amounts of variance by the first factor then much smaller in the next factor

likewise factor 2 explains only 15.467% of the variance.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.697

Bartlett's Test of Sphericity

Approx. Chi-Square 3404.936

Df 190

Sig. .000

299

Table No. 4.17.3.1 Total Variance Explained

Components Initial Eigen Values

Extraction Sums of Squared

Loadings Rotation Sums of Squared Loadings

Total

% Of

Variance

Cumulative

% Total

% of

Variance Cumulative % Total

% of

Variance Cumulative %

1 3.545 17.723 17.723 3.545 17.723 17.723 2.842 14.208 14.208

2 3.093 15.467 33.190 3.093 15.467 33.190 2.668 13.339 27.547

3 2.562 12.810 46.000 2.562 12.810 46.000 2.637 13.187 40.734

4 1.958 9.790 55.790 1.958 9.790 55.790 2.451 12.256 52.990

5 1.778 8.889 64.678 1.778 8.889 64.678 2.154 10.770 63.761

6 1.072 5.359 70.038 1.072 5.359 70.038 1.255 6.277 70.038

7 .868 4.341 74.379

8 .660 3.298 77.677

9 .648 3.241 80.918

10 .525 2.626 83.544

11 .506 2.528 86.072

12 .487 2.436 88.508

13 .392 1.958 90.466

14 .366 1.828 92.294

15 .348 1.739 94.033

16 .325 1.623 95.657

17 .291 1.456 97.113

18 .217 1.085 98.197

19 .182 .909 99.106

20 .179 .894 100.000

Extraction Method: Principal Component Analysis.

The Eigen values are also called characteristic roots. The intrinsic value for a

given factor measures the variance in all variables that is accounted for by this factor. The

ratio of equity value is the ratio of the importance of the explanatory factors in relation to

the variables. If a factor has a low intrinsic value, it makes little contribution to the

explanation of the differences in the variables, and perhaps more important factors to be

300

unnecessary, which is listed under the extraction Sum of Square invitation only factor

with eigen values greater than 1 are ignored, is the result of only 6 factors. In the last part

of the table of the eigen values of the factor will be displayed after the rotation. Rotational

axis of the factor has an effect that is optimized by a factor structure. The consequence for

these data is that the relative importance of the six factors is compensated. Before

rotation, factor 1 accounted 17.723 % of all the variances while other factors were much

smaller (15.47%, 12.81%, 9.76 %, 9.79% and 5.35). After rotation, the factor 1 accounts

for only 14.20 % of the variance, not a big difference from the others (13.33%; 13.18%;

12.52%, 8.41% 10.77, 6.21).

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4.17.4 Rotated Component Matrix

Rotated Component Matrix

Items 1 2 3 4 5 6

1 .639

2 .836

3 .893

4 .859

5 .789

6 .780

7 .797

8 .701

9 .866

10 .809

11 .719

12 .709

13 .836

14 .670

15 .858

16 .773

17 .820

18 .839

19 .718

20 .492 .602

Extraction Method: Principal Component Analysis. Rotation Method: Varimax With Kaiser Normalization.

Rotation Converged in 6 Iterations.

The latest addition of the factor analysis on the internal services, data quality is

rotated component matrix, which is a matrix of factor loading for each variable on each

factor. Some of the matrix cells in this table, as in the analysis is empty, was set up not to

less than 0.4 to suppress the display and cut number is called (Field, applied 2000) was

the one that the imposition of a particular point of 0 , 4 factors proposed loading for each

302

factor. Loading factor of 0.4 higher than that considered appropriate to be used for

interpretation.

From this rotated component matrix, it is found that 4 factors are highly

correlated, and most of the variables, only 1 factor and also other four factors are highly

correlated to factor 2, 3 and 4 while the rest of the factor of less correlated with the

factors these were related to the employees’ work designs and employees’ job definition.

The above table shows the mean score and the relative importance of each

variable that contributes towards the internal service quality in terms of the employees’

selection, Employees’ training, Employees’ reward and recognition, work design and job

definition between Pakistani public and privatized banks.

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Section 7

In section the research model is further tested through structural equation model

(AMOS).

4.18. Structural Equation Model

ES

ETD

ERR

WD

JD

ISQ EJS

ER EP

OP

.13

.14

.16

.20

.21

.56

.29 .21

.90 .00

.01

.54

e1

.76

e2

.74

e3

.28

e4

.34

e5

.06

e6

.38

e7

.40

e8

.33

e9

.08

e101

1

1

1

1

1

11

1

1

Figure 4.18.1 The result of ISQ model (SEM)

ES Employee Selection ETD Employees Training & Development ERR Employee Reward and Recognitions WD Work Design JD Job Definition ISQ Internal Service Quality EJS Employees Job Satisfaction ER Employees Retention EP Employees Productivity OP Organizational Performance

The above Figure 4.18.1 shows the relationship of among the variables and the structural

equation model help to measures the impact and potential of internal service quality in

business process and its relations to organizational performance. It further reveals the

importance and role of each variable for internal service quality and its effect on


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Table 4.18.1 Index of fit of the Model

Table 4.18.2 Hypotheses testing based on Regression weights

Variables Estimates S.E. Critical Ratio P-value Results

ISQ <--- ES .127 .017 7.404 0.000 Accepted ISQ <--- ETD .136 .014 9.407 0.000 Accepted ISQ <--- ERR .161 .015 11.064 0.000 Accepted ISQ <--- WD .203 .024 8.499 0.000 Accepted ISQ <--- JD .213 .021 9.941 0.000 Accepted EJS <--- ISQ .557 .085 6.541 0.000 Accepted ER <--- EJS .292 .049 5.950 0.000 Accepted EP <--- EJS .205 .046 4.451 0.000 Accepted EP <--- ER .007 .045 0.162 0.871 Rejected OP <--- ER .902 .022 41.422 0.000 Accepted OP <--- EP .000 .025 0.012 0.991 Rejected

The index of fit for our model is shown in table 4.18.1. Taking degrees of freedom

(34) into account, most index values approach the general standard of index fit. It evident

from the analysis that over all research model is significant (Chi= 293.61) (P<0.05).

The Result of above hypotheses test of the relationship between constructs

including internal service quality (Employee selection, training and development, reward

and recognition, work design and job definition), employee’s job satisfaction, employee’s

retention, employee’s productivity and organizational performance are shown in table

4.18.2. and figure 18.1.

Model Summary

Chi Square Degree of freedom P -value

293.461 34 0.000

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The above table 4.18.2 shows the Beta value is .127 between ES and ISQ and the

relationship is evident from the analysis that if there is one degree change in ES there

would be 12.7% change in ISQ. Whereas the relationship between ETD & ISQ, ERR &

ISQ, WD & ISQ and JD & ISQ shows the value of β= 0.136, 0.161, 0.203 and 0.213

respectively. The analysis highlights the relationships between ISQ and ERR, RTD,

WD, JD are statistically significant (P<.05) and all the variables are integrated in the

business process that have visible role in the organizational performance.

The Table further reveals the regression weighted β=0.213, 0.557, 0.292, 0.205

between ISQ& EJS, EJS &ER, EJS&EP respectively and the relationship is marked that

if there is one degree change in EJS, ERR, EPP there would be 21.7% change in ISQ,

55.7% change in EJS, 29.2% in ER and 20.5% change in EP and it is further indicated the

relationship is statistically significant. However the relationship between ER& EP and EP

& OP slightly low as compared to other variable with β=0.007, 0.000 and it shows the

relationship is insignificant (P>0.05) as it needed more improvement in the public and

privatized bans to properly utilize the human resources along with procedures to make

them more productive for their organizations.

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CHAPTER 5

MAIN FINDINGS

In the modern era, changes in the financial services industry, especially the

banking sector, have increased competition and led the banks to emphasize the

importance of internal service quality in terms of the human resource management as a

means of achieving competitive advantage. The banks have realized the need to adopt a

people-oriented approach, as compared to the profit-oriented one, for the purpose of

improving the internal customer needs. In this context, the organizational commitment of

the front-line employees is gaining importance in determining the quality of services

delivered to the organizational goals in an effective manner.

Examples from successful organizations demonstrate that they have gone a long

way to design effective human resource system. It includes effective manpower planning,

recruitment and selection process, realistic performance plans and development-oriented

performance appraisal, effective learning system providing ample learning opportunities

with the help of training, performance guidance, and other mechanisms such as effective

implementation of the internal service quality in its proper essence which ultimately leads

to the organizational performance. It also consists of such mechanisms as inculcate a

sense of pride in the work.

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The research work have carried out an intensive study considering the potential and

impact of the perceived internal services quality in business process of Pakistani banks

and its relationship to the organizational performance. The main findings of study are as

follows:-

The study finds that the gender-wise relationship between the internal service and

the employees’ job satisfaction are statistically insignificant; however, the male

employees’ perceive more internal service quality than the female employees. The

aforesaid finding is matched with the findings of Sekaran (1989).

The study concludes that the employees with graduate level education perceive

more internal service quality than those with master level education and among

this group the relationship is significant between the internal service quality and

the employees’ job satisfaction and findings matched with Hong et al. (1995).

The study evident that the employees of the privatized banks perceive more

internal service quality than those of public banks.

The study investigates that only among the initial work experience group, the

employees’ perceived the internal service quality and thus, the employees’ job

satisfaction while as the work experience increases the statistics of the model

shows that the employees perceived less internal service quality and, hence,

overall the proposition regarding the work experience and its relation with the

perceived ISQ is not supported by the model significantly.

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The study evident that both the public and privatized banks have significant

difference between the mean perceptions regarding the training culture and

employees’ rewards and recognition.

The study concludes that the work design for the employees’ productivity is up-to-

the-mark in terms of purpose, career advancement and employees’ satisfaction.

Findings further reveals that employee reward and recognition are significantly

related to employee job performance and the findings are matched with the

findings of Igbaria and Greenhaus (1992).

The study evident that the internal service quality is positively related to the

employees’ job satisfaction and this relationship is statistically significant.

The study investigates in the research work that the employees’ job satisfaction

and their retention have no significant relationship between them however, for

male group there is no significant relationship of employee job satisfaction with

employee retention.

The study evident that the employees’ job satisfaction has a positive effect on the

male employees’ retention but this effect is not statistically significant as the

probability value of the employees’ job satisfaction is less than our level of

significance.

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It is found that the employees' job satisfaction, for both male and female in their

respective banks, has a positive relationship with the employees’ retention but this

relationship is statistically not significant.

It is finds that the male employees perceive more job satisfaction than the female

employees and, hence, they are more sensitive to the employees’ retention. It is

further identified that the employees’ retention among the age group between 30-

39 has a significant mutual relationship whereas the employees’ retention among

the age group between 40 -49 has no significant relationship with the employees’

job satisfaction.

The study concludes that at the age group above 50 years, the employees’ job

satisfaction is related to employee retention negatively. However, the employees’

retention in the public sector banks it is relatively greater than in the privatized

sector banks.

The study evident that most of the employees are satisfied at their current jobs and

they intended to stay and remain committed to the organization. Moreover, it is

also found that most of the employees’ are found to be satisfied with the banks

environment as they provide them opportunity to show their performance.

The study investigates that most of the senior and experienced employees are

more committed than the newly appointed ones or than those who have less than

five years of job experience.

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The study finds that more employees want to be retained in their respective

organizations in the age bracket of 40 to onward as compared to age bracket of

below 39 years. However, it further reveals that the most satisfied employees of

different banks are placed at the age bracket of 40 – 49 as compared to all other

age brackets.

The study examines during the research work that in all the work experience

groups there was a significant difference in employee’s perceptions regarding

employees’ selection in the banks. Moreover it was revealed further that the

employees having more than 21 years work experience were more concerned to

perceive clearly employees’ selection process as compared to other work

experience groups.

The study finds that in all the work experience groups there is significant

difference in employee’s perceptions regarding trainings in the banks. However, it

is further identified that the work experience groups above 16 years are more

concerned to perceive clearly the employees’ training process as compared to

other work experience groups.

Findings reveals that in all the work experience groups there is a significant

difference in employee’s perceptions regarding employee reward and recognition

in the banks whereas, these above 21 year are more concerned to perceive clearly

the employees’ reward and recognition as compared to other work experience

groups of different banks.

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The study concludes that there is no significant mean difference in employees’

perceptions regarding the work design and the job definition among all age groups

in banks that indicates employees of all age group perceived job definition and

work design at there respective banks.

The study evident that the more qualified employees of the banks want to retain

their jobs than those who have formal qualification or are just graduates.

However, it is further depicted that those employees who have the work

experience more than 11 years are more satisfied than those with less work

experience.

The study investigates during the research that in the banking sector the

employees are involved in decision making processes as it was confirmed by

approximately 86% of the respondents from different banks. Almost 65%

employees of the sample responded that their banks provide products and services

which are considered to be of high quality.

In the study finds that the employees’ retention is significantly and strongly

correlated with the organizational performance. It is further found that the

employees’ productivity has negative relation with the organizational

performance. Further findings revealed that the employees’ job satisfaction has

positive correlation with the employees’ retention. Where as, the employees’

productivity and internal services quality is positively associated. It is also found

that the employees’ productivity is positively associated with the employees’ job

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satisfaction. Findings further revealed that the employees’ retention has positive

correlation with the employees’ productivity.

The study concludes that the employees’ job satisfaction and the internal services

quality are positively associated with each other where as the internal services

quality is significantly correlated with the organizational performance. Findings,

further reveals that the employees’ job satisfaction is significantly correlated with


The study concludes that the internal services quality (ISQ) is positively

associated with the organizational performance (OP) and the relationship is

statistically insignificant. Findings further reveal that the employee job

satisfaction (EJS) and the organizational performance (OP) have a positive

correlation but the relationship is insignificant. It is further found that the

employee retention (ER) and the organizational performance (OP) are positively

associated with each other and the relationship is statistically significant.

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CHAPTER 6

CONCLUSION AND RECOMMENDATIONS

The results of this study provide managerial professionalism to integrate systems

which should be designed and implemented to support the employees in high service

environments and show as to how influential these systems are in predicting the

employees’ outcomes including the internal service quality (employee selection,

employee rewards and recognitions, employee training and development, work design

and Job definition) and employees’ satisfaction, retention, productivity and organizational

performance. The employees’ results serve as a valuable predictor of customer

satisfaction as well. It is noteworthy that this study finds significant relationships among

ISQ, employees’ satisfaction, employees’ retention, employees’ productivity and the

organizational performance. The contributions of this study to the service design literature

include the illustration of the need for service strategies that embrace the internal service

quality in terms of HR as a means for driving the organizational performance.

A growing number of studies have found that the uses of bundles of complete

monetary human resource management practices have a positive effect on the

organizational performance and, hence, they lead to sound financial outcomes. These

packs of human resource management practice generally include sophisticated recruiting

procedures and selection processes, appraisal systems linked to incentive plans and

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organizational structures and strategy for employees’ retention that encourage

cooperation among the employees.

There is a great need for experimental research, the quality of service in the

internal units of banking services evaluated. This study was used as a contribution to the

further ISQ measurement by applying a service quality instrument in the rule for the

assessment of organizational performance. The results show that it is feasible and

effective, in fact, capture the characteristics of internal customer’s i.e. the employees of

the organization, by using a set of well-known quality dimensions. It is of paramount

importance to enhance all the dimensions since previous studies have suggested that

internal service quality is strongly linked with the external service quality. This study of

internal service quality is not only important but also is challenging in a competitive era

for the banking industry in the developing countries. Further efforts should improve to a

better understanding of concepts and evaluate the improved resources and contribute to

internal service quality through optimum utilization of human resource management

practices in its very essence. However, in the design of this study was an attempt to

reduce their limits. However, the external validity (general public) on the specific scope is

investigating how this study was limited in particular, is used on a maintenance service in

the chosen context. Since the type of service settings that could be investigated probably

indefinitely, future studies should take into account other factors, internal services as the

elements that is being investigated. For example, a perceived quality may play a greater

role in situations with higher staff-participation play, which is the necessary interactions

with the customer more. Giving importance to the concept of internal service quality in

operational management theory and practice, the issues of quality consideration justify

attention in further theoretical and pragmatic research.

315

The internal service quality practices in terms of human resource management are

positively correlated with employees’ selection, reward and recognitions, training and

development, wok design, job definition and work related attitudes, such as employees’

job satisfaction, career satisfaction in retention, employees’ productivity and

organizational performance. Fair human resource management practices encourage

employees’ participation, promote empowerment, recognize that the employees play an

important role in achieving the organizations’ objectives and treat the employees as

primary resources. The present study confirms that this results in enhanced job

performance mind set. To summarize, the present study demonstrates that ISQ, especially

focusing on the human resource management practices enhances the job involvement,

improves the level of job and career satisfaction and enhances the organizational

performance. The effect of perceived internal service quality practices in these respects is

of utmost importance. The organizations should be committed to ISQ practices and their

flourishing implementation for the sake of long lasting effects.

Overall, the results support the notion that the service quality in employees to

make purposeful for the HR practices in their banks and that these HR elements are

differentially associated with attitudes. As expected, the acknowledgment that HR

practices are motivated by the bank’s concern for enhancing internal service quality and

employees oriented policies was strongly associated with employees’ attitudes that

focused on reducing costs significantly as the employees were treated in terms of

qualitative manners. In turn, the employees’ job satisfaction and effected attitudes were

significantly associated with two dimensions of employees’ retention and their

productivity that was significantly related to the organizational performance. It has been

considered that these findings are important academically, methodologically and

practically.

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RECOMMENDATIONS

After a far-reaching and exclusive research, it becomes desirable to delimitate the

points of deficiency of the business processes under study and to point out the possible

steps as remedies to the imperfection of the structure/systems. These suggested steps are

denoted as “Recommendations”. Regarding the study, the following strategies are

recommended for further improvement:-

1. To deliver excellent internal service quality to the employees and strive for

business distinction, the employees’ satisfaction, their retention and productivity

within the organization is very important. And, all these can be achieved if the top

level management takes an extra care while developing the internal services

quality bases starting right from selection and recruitment process, recognizing the

employees with their core expertise and setting up tremendous work designs for

them. Hence, it is recommended that it should be conducive to enable the human

resource to deliver what is expected of them.

2. The success of banks depends on the HR practices, procedures, applications and

implementation towards their internal customers (employees’). I(t is known that

the relationship between the employees’ satisfaction is considered one of the most

important drivers of the perceived internal service quality and it is strongly

associated with the bank’s performance, but unfortunately this relationship in its

real essence is hardly taken notice of. Therefore, it is necessary for the banks’

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managements to satisfy the employees first to make them ultimately highly

motivated with the good work morale, so that they may work more effectively and

efficiently.

3. The unemployment rate is too high in Pakistan and this may factor heaps the

management of the banks to exploit the potential of the employees due to

maximum options of human resources that are available in the market. So, it is

need of the hour to create such type of environment which will be the employee-

oriented. During the research process it has been found that the relationship

between the organizational magnifications depended on the human resource of the

banks. Hence, the management is called upon to adopt sincere and parental

behaviour while dealing with the employees create in them a sense of ownership.

4. The findings also suggests that the employees’ commitment to their organizations

and satisfaction with their jobs both are interlinked. Comprehension of these

attitudes is very significant as they are directly linked to with the organizational

performance and these approaches can be influenced by fair human resource

policies and practices.

5. The findings in support of the hypothesis two suggest that the employees’ job

satisfaction is an indication of their sense of achievement and it is directly linked

with both the productivity as well as the organizations’ well being. It has been

proved also that it has a strong association with the organizational performance.

The banks’ managements should devise such ways as not only enhance the

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employees’ job satisfaction levels but also increase their enthusiasm and

happiness while on jobs for the organization’s success.

6. The findings, in light of hypothesis three suggest that the employees’ retention is

the most important factor of human resource management and it is necessary for

the management to retain the potential employees, but unfortunately the concept

of human resource management is yet an emerging concept in Pakistan and its

implementation in itself is a question mark. So, it is suggested that the HR

professionals should be certified to introduce initiatives to identify the retainable

employees for the organizational performance. As has been examined the high-

involvement practices increase the employees’ retention and it has ultimately a

positive effect on the organizational performance.

7. The findings while supporting hypothesis four suggests that creating a conducive

work environment helps the employees become more productive and more

profitable for the organization. It has been noted that the management should be

demanded of providing conducive environment alongwith all the required support

to enable the employees to utilize a maximum potential for the accomplishment of

the assignments. The more the employees are productive the more the

organization will prosper.

8. It is suggested that the managers concerned with the employees’ job satisfaction

ought to be wise enough to pay due attention to the components of the internal

service quality i.e the employees’ selection, their rewards and recognitions, their

training and development, work design, and job definitions. This reinforces the

belief that the non-economic needs’ satisfaction plays a highly important role in

the job satisfaction.

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9. On the basis of correlation analysis, the perceived ISQ and the employees’ job

satisfaction have a significant but positive relation with the organizational

performance. These aspects of job-related attitudes are, thus, enhanced as the ISQ

practices increase. It is recommended that the human resource development

departments should review and enhance the motivation, training, and retention of

energetic employees and that the employees should support the concept of the

ISQ. The employees’ selection and their rewards and recognition, their training

and development, work design and job definition all are the most important

human resource management practices in enhancing the employees’ job

satisfaction and the organizational performance. The greater the extent of internal

service quality, the greater the enhancement and effect on the organizational

performance. To the extent that the ISQ also involves senior management, it is

important that the senior management is highly committed to and engaged in the

HR practices.

10. In contrast to many other studies, it is found that the organization level incentive

schemes do not increase productivity. This surprising conclusion might be a result

of different estimation strategies and the poor quality of the HR practices. It is,

therefore, concluded that the use of a correlation analysis has dramatic effects on

the assessment of the employees’ involvement and financial incentive schemes.

Even if the coefficient of employees’ involvement is somewhat in a weak

position, we are of the view that in terms of size and significance, ignoring these

estimation biases may lead to the underestimated productivity effects. Hence, the

study argues that the analysis yields useful results which help understand the

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nature and impact of the innovative human resource practices instead of general

HR experiences.

11. The monetary benefit programmes are valued high by the employees. The

research study shows that the employees’ basic motivational factor leads to

enhancing the employees’ productivity. So, it is recommended that the Banks’

management should consider monetary benefit first alongwith the non monetary

ones which will leave an everlasting impact on the organizational performance.

12. There is a cognitive gap between the management and the employees’ on the

importance of employees’ productivity. The management should arrange the

awareness programmes for their employees to keep them become smart workers

instead of hard workers. The banks’ management should involve the employees

and show interest also in their well-being to bring the miraculous changes in their

way of performing the assigned jobs.

13. The employees of the privatized banks have greater benefit demands than their

counterparts in the public banks. It is proved and evaluated in the research that it

is the public bank who provide better benefit programmes than in the private

businesses. It is, therefore, recommended for the bank’s management that these

aspects should be given due consideration while deploying the HR practices in

their respective banks.

14. The organizational performance has an enduring association with the ISQ and it

has been established that if the application of the ISQ in business process is

implemented properly or integrated, its impact on the organization is positively

affected and vice versa. It is also recommend hereby that the importance of the

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ISQ must be focused on and all other factors of the model should be implemented

properly to get the maximum of the effects on the bank.

15. The recommendations may be informative for trying to unscramble some of the

inconsistent findings, specifically the qualitative findings about the benefits of

aligning ISQ in terms of HR and its operationalization in proper way to business

processes in which different bankers are asked to report on application of the ISQ.

Such a methodology also permits to examine the employees’ attributions

regarding the ISQ underlying the HR practices and its associations with

effectiveness of the organization’s performance. In addition to that, when

compared different banks within the like business industry and localities having

their own style of implemention the HR practices, the relationship between the

HR practices and the organizational performance may be stronger in an

organization where the ISQ is properly functioning and operationalised to achieve

the strategic goals.

16. The primary objective of focusing the ISQ in the set of HR practices it is to send

consistent mechanisms for the employees regarding the banks’ performance and

expectations of the employees’ behaviour, it may be more appropriate to explore

notions of the internal service quality fit from the employees’ perspective than to

rely on the HR representatives. It is recommended that in some cases, even if the

banks’ ISQ HR practices appear to be consistent on papers, they may not be

operationalised and experienced as such by the employees. From the employees’

perspective, the internally associated service quality in terms of the HR practices

would be substantiation by consistency in the human resource management

practices that employees receive routinely from the HR practitioners. So, it is

recommended for the management to implement properly the ISQ practically as it

322

is found that its impact on the organizational performance is significant in such a

competitive era when the banks cannot compromise on the HR functions.

17. It is recommended that like serious and sincere efforts should be made to improve

the productivity in the banks as it is too low. Improvement in productivity should

constitute an important parameter in the performance of the banks. Better work

organization, effective supervision and proper work distribution would, no doubt,

help improve the productivity. However, the enduring results can be obtained only

by motivating the employees and ensuring their participation in the banks’

function.

18. The banks must be careful enough while monitoring the employees’ performance.

The employees’ performance is the sole important indicator of quality of working

life in modern era where the competition is there in every aspect of jobs, again it

is also an indicator of the organizational success and can be an early warning

signal of problems and potential organizational failure. It is, therefore,

recommended that the banks’ management should devise a conducive work design

and properly defined jobs for their employees at all levels that will enable them to

perform in a productive way. It is also advisable for the management to find a

group of less skilled employees in poorly designed jobs that are mainly in the

charge of direct interactions with the customers of the banks. Special attention

should be paid to these employees. If necessary, in addition to routine training

programmes for all the employees, special training measures should be adopted

for the employees in need of re-skilling, that will enable them to cope with the

challenges in their respective fields of work.

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6.1 Implications of the Research

The proposed and tested Internal Service Quality Model itself is unique in nature in

Pakistan especially in terms of HRM practices considering it five basic facets such as

Employees’ recruitment, their Reward and Recognitions, their training and development,

Job definition and Work design with the mediating variables employees’ job satisfaction,

their retention and productivity and all of them have the greater impact on the

organizational performance. The study has practical implications for the regulators and

the banks’ management in particularly the HR professional to devise and regulate the

frame work on standard form to improve the HR practices in the banking sector in

Pakistan. The ISQ Model properly managed by the regulators, regularly reviewed by the

policy makers to give an ample opportunity to improve the organizational performance by

optimum utilization of their human resources in a current and challenging environment.

6.2 Direction for Future Research

These results support the idea that there are likely certain cross-level and emergent

business processes in the organizations through which the HR practices are associated

with the employee level responses to those HR practices which in turn emerge in the

conceptually meaningful ways at higher level of analysis to be linked with the overall

organizational performance. The suggestion is that it is not just the operationalization of

the qualitative ISQ in terms of the HR practices themselves but also the employees’

perceptions of those HR practices rather than that they are important for achieving the

organization’s cherished outcomes.

324

The scope of this model define under the required HR practices and describing

the organizational approach towards their employees by the implementation of business

to employee concept (B2E). However, the model may be enhanced further by the

researchers in order to make it more effective by adding external customer satisfaction

variable to determine the link of other areas of business considering the business to

customer (B2C) and business to business (B2B) approach to make it more

multidimensional and performance-oriented model for the organizations.

6.3 Limitations This study purely constructed on the cross sectional data, it encourages the future

researchers to incorporate these limitation in their research:

This study did not touch upon the external customers’ satisfaction in the model

testing due to an extensive focus on the internal customers and the organizations’

Internal Service Quality with respect to HRM.

This study has been carried out in Rawalpindi and Islamabad and future study

may be conducted in the other major cites in Pakistan.

The study is subject to certain limitations regarding the regression analysis to test

the proposed model in its structural forms, simple regression can not support all

the latent path in a single analysis. However, a far-reaching attempt has been

made to test the model in single instant by AMOS

The scope of this study is limited to Public and Privatized sector banks in Pakistan

and it may be extended to other private and multinational bank as well as to other

non financial sectors for checking the generalizability of the findings of this study.

325

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359

APPENDIX -I

Potential and Impact of Perceived Internal Service Quality in Business Process in Pakistani Banks & Its Relation to

Organizational Performance Dear Participant,

The undersigned is conducting a survey in partial fulfillment of the Ph.D. degree in Human Resource Development (HRD).

The research study is aimed at analyzing "Potential & Impact of Perceived Internal Service Quality in Business Process and its relation to Organizational Performance- a case of Pakistani Banks". The internal service quality in business process consists of interrelated activities to serve the internal customers (employees) in terms of hiring, training & development, reward and recognitions, work design and job definition and its ultimate relation with the organizational performance.

In this connection, your kindself is requested to fill the survey questionnaire as enclosed herewith and return to the source promptly. There is no right or wrong answer so that you are obliged to answer all questions as your opinion is the most important and timely.

You may rest assured that your response to the survey questionnaire will be kept anonymous and completely confidential to be used only for the academic purposes. Your kind cooperation is highly indebted. Truly Yours, (Muhammad Asif Khan) Ph.D. Scholar/Researcher National University of Modern Languages, Islamabad Ph. 03218565678 Email: [email protected]

360

The Potential and Impact of Perceived Internal Service Quality in Business Process in Pakistani Banks & Its Relation to


A. Demographic Information A.1 Gender 1. Male 2. Female A.2 Age 1. Under 30

2. 30-39

3. 40-49

4. Above 50

A.3 Educational Level

1. Graduate

2. Master 3. Doctorate

A.4 Types of Bank

Public Bank Privatized Bank

A.5 Work Experience With this Organization (Please Tick Your Experience group) 1 2 3 4 5 1-5 6-10 11-15 16-21 Above

A.6 Position Held in the Bank ___________________________ A.7 Department __________________________________________

361

B.1 Employees’ Selection

In my bank… SD D N A SA

B1a ...we select employee, who can provide ideas to improve business process and organizational performance.

1 2 3 4 5

B1b …we use attitude /desire to work in a team as a criterion in employees’ selection

1 2 3 4 5

B1c …we use problem solving aptitude as a criterion in employees’ selection

1 2 3 4 5

B1d ...we use work value and behavioral attitude as a criterion in employees’ selection

1 2 3 4 5

B.2. Employees’ Training

SECTION-I (B)

Internal Service Quality (ISQ)

This section measures ISQ in terms of employees’ selection, employees’ training & development, employees’ recognition & rewards work design and job definitions.

There are five scales of rating starting with 1= strongly disagree onto strongly agree =5. Kindly encircle only one scale according to your observations and experience.

5 = Strongly Agree (SA) 4 = Agree (A) 3 = Neither Agree Nor Disagree (N) 2 = Disagree (D) 1 = Strongly Disagree (SD)

In my bank…. SD D N A SA

B2a …there are extensive training programs for its employees regarding all aspects of quality.

1

2 3 4 5

B2b …employees on each job normally go through training programs every year

1

2 3 4 5

B2c …training needs are identified through a formal performance appraisal mechanism.

1

2 3 4 5

B2d …there are formal training programs to teach newly selected employees the skills they need to perform their jobs.

1

2 3 4 5

362

B.3. Employees’ Reward and Recognition

B.4. Work Design


B4a …the tools, procedures and materials used in the job are highly specialized in terms of purpose

1 2 3 4 5

B4b …the work performed on the job has a significant impact on people outside the bank.

1 2 3 4 5

B4c …the job involves interaction with the people that are not member of my bank.

1 2 3 4 5

B4d …the job require me to utilize a variety of different skills in order to complete the work

1 2 3 4 5

B.5. Job Definition In my bank… SD D N A SA

B5a …the duties of every job are clearly defined. 1 2 3 4 5

B5b …each job has an up-to-date job description. 1 2 3 4 5

B5c …the Job description for each job contains all the duties to be performed by individual.

1 2 3 4 5

B5d …the actual job duties are shaped more by the employees than by the formal job description.

1 2 3 4 5


B3a …job performance is an important factor in determining the incentive compensation and reward of employees.

1 2 3 4 5

B3b …compensation is decided on the basis of competence/ability of the employee.

1 2 3 4 5

B3c ...salary and other benefits are comparable to the market.

1 2 3 4 5

B3d ...employees know that their pay and benefit package is well above industry or community norms for work of comparable values.

1 2 3 4 5

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SECTION-II (C) (Employees Satisfaction)

5 = Strongly Agree (SA) 4 = Agree (A) 3 = Neither Agree Nor Disagree (N) 2 = Disagree (D) 1 = Strongly Disagree (SD)

SD D N A SA

C1 I am very proud to tell others that I work with this bank. 1 2 3 4 5

C2 I am willing to put in a great deal of effort beyond one normally expected in order to help the bank be successful.

1 2 3 4 5

C3 I find that my own and bank’s values are very similar. 1 2 3 4 5

C4 This bank really inspires the best in me in the way of job performance 1 2 3 4 5

C5 I talk of this bank to my colleagues as a great bank to work with 1 2 3 4 5

C6 Employees of my bank want to have long term relationship with it. 1 2 3 4 5

C7 I participate in the bank’s development process. 1 2 3 4 5

C8 For me, this is the best of all the banks which to work with. 1 2 3 4 5

SECTION-III (D) (Employee Retention)

SD D N A SA

D1 My bank treats its employees equally. 1 2 3 4 5

D2 My bank always let me know what is going on what I do not usually find out from my colleague.

1 2 3 4 5

D3 Management is really concerned with as to weather employees are happy at this bank.

1 2 3 4 5

D4 There are many opportunity of advancement at this bank. 1 2 3 4 5

D5 My bank recognizes its employees for work they do. 1 2 3 4 5

D6 There is pride and camaraderie in this bank. 1 2 3 4 5

D7 My bank makes efforts to understand its employee’s needs. 1 2 3 4 5

D8 At my bank, big changes are implemented professionally. 1 2 3 4 5

364

SECTION-IV (E) (Employees Productivity)

5 = Strongly Agree (SA) selection 4 = Agree (A) 3 = Neither Agree Nor Disagree (N) 2 = Disagree (D) 1 = Strongly Disagree (SD)


E1 ...employees take care of one an other. 1 2 3 4 5

E2 …team sprit prevails among all the employees 1 2 3 4 5

E3 …employees work like being a family 1 2 3 4 5

E4 …employees have friendly relationship with each other. 1 2 3 4 5

E5 …team work is preferred over individual tasks 1 2 3 4 5

E6 …employees view themselves as independent individual who have to tolerate others around them

1 2 3 4 5

E7 …employees are ready to scarify for betterment of bank 1 2 3 4 5

E8 …employees are highly committed 1 2 3 4 5

SECTION-V (F)

(Organizational Performance)

SD D N A SAF1 My bank is enjoying good reputation in industry 1 2 3 4 5

F2 My bank is enjoying higher success rate in lunching new product and services.

1 2 3 4 5

F3 My bank is enjoying high customer loyalty. 1 2 3 4 5

F4 My bank is continuously experimenting new ideas and approaches on work performance.

1 2 3 4 5

F5 My bank’s system and procedure support innovation. 1 2 3 4 5

F6 My bank provides product and services, which are considered of high quality.

1 2 3 4 5

F7 My Bank’s top management /leadership provides sufficient career making opportunities.

1 2 3 4 5

F8 I am satisfied with the financial success of my bank. 1 2 3 4 5

365

APPENDIX –II

CROSS TABULATION OF DIFFERNET VARIABLES

1. Cross Tabulation of Age With Job satisfaction

2. Cross Tabulation of Age With Employees’ Retention

Employee Retention

Total

DA NAD A SA

Age

Under 30 3 20 41 7 71

30 - 39 1 18 36 10 65

40-49 3 25 152 34 214

Above 50 4 11 25 10 50

Total 11 74 254 61 400

Employee Job Satisfaction

Total

DA NAD A SA

Age

Under 30

1

9

41

20

71

30 - 39 0 10 33 22 65

40-49 3 6 102 103 214

Above 50 0 6 32 12 50 Total 4 31 208 157 400

366

3. Cross Tabulation of Age With Employees’ Productivity

Employees Productivity

Total

DA NA A SA

Age

Under 30 2 23 42 4 71

30 - 39 0 23 36 6 65

40-49 3 16 163 32 214

Above 50 0 15 31 4 50

Total 5 77 272 46 400

4. Cross tabulation of Gender With Employees’ Job Satisfaction

Employees Job Satisfaction

Total

DA NAD A SA

Gender Male 3 21 171 133 328

Female 1 10 37 24 72

Total 4 31 208 157 400

367

5. Cross tabulation of Gender With Employees’ Retention

Employees Retention

Total

DA NAD A SA

Gender Male 8 58 207 55 328

Female 3 16 47 6 72

Total 11 74 254 61 400

6 .Cross Tabulation of Gender and Employees’ Productivity


Total

DA NAD A SA

Gender Male 0 55 230 43 328

Female 5 22 42 3 72

Total 5 77 272 46 400

368

7. Cross Tabulation of Educational Level With Employees’ Job Satisfaction

Employees Job

Satisfaction

Total

DA NAD A SA

Educational

Level

Graduate 0 9 73 50 132

Professional Qualification 0 1 3 0 4

Masters 4 21 132 107 264

Total 4 31 208 157 400

8. Cross Tabulation of Educational Level With Employees’ Retention

Employees Retention

Total

DA NAD A SA

Educational Level

Graduate 0 30 94 8 132

Professional Qualification

0 1 3 0 4

Masters 11 43 157 53 264

Total 11 74 254 61 400

369

9. Cross Tabulation of Educational Level with Employees’ Productivity

Employees’ Productivity

Total

DA NAD A SA

Educational Level Graduate 0 19 104 9 132

Professional Qualification 0 1 3 0 4

Masters 5 57 165 37 264

Total 5 77 272 46 400

10. Cross Tabulation of Work Experience With Employees’ Job Satisfaction

Employees Job Satisfaction

Total

DA NAD A SA

Work Experience

1-5 1 11 33 24 69

6-10 0 0 11 4 15

11-15 0 9 63 47 119

16-21 0 5 55 12 72

Others 3 6 46 70 125

Total 4 31 208 157 400

370

11. Cross Tabulation of Work Experience With Employees’ Retention

Employees Retention

Total

DA NAD A SA

Work Experience

1-5 1 14 45 9 69

6-10 0 6 5 4 15

11-15 1 19 92 7 119

16-21 3 13 50 6 72

Others 6 22 62 35 125

Total 11 74 254 61 400

12. Cross Tabulation of Work Experience With Employees’ Productivity


Total

DA NAD A SA

Work Experience

1-5 2 20 42 5 69

6-10 0 5 10 0 15

11-15 0 24 90 5 119

16-21 0 10 59 3 72

Others 3 18 71 33 125

Total 5 77 272 46 400

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