proposal empowerment

7/27/2019 PROPOSAL Empowerment

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Research Title:

“The impact of employee empowerment on service quality and customer satisfaction in service

organizations

(A Case study of Reliance Bank Ltd, UK)”



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Table of content

Contents Page No.

INTRODUCTION 03

1.1 BACKGROUND OF THE RESEARCH 03

1.2 PROBLEM DISCUSSION 03

1.3 PROBLEM STATEMENT 04

1.4 RESEARCH PURPOSE 04

1.5 OBJECTIVES OF THE RESEARCH 04

1.6 RESEARCH QUESTIONS 05

1.7 BACKGROUND OF THE CASE COMPANY O6

LITERATURE REVIEW 07

2.1 SERVICES AS A PRODUCT 07

2.2 TYPES OF SERVICES 07

2.3 RETAIL BANKING SERVICES 08

2.4 SERVICE QUALITY IN SERVICE ORGANIZATIONS 09

2.5 THE CUSTOMER PERCEIVED SERVICE QUALITY 09

2.6 CUSTOMER SATISFACTION 10

2.7 EMPLOYEE EMPOWERMENT IN SERVICE ORGANIZATIONS 112.8 THE DIMENSIONS OF EMPOWERMENT 12

2.9 THE ORGANIZATION LEVEL 12

2.10 IMPLICATIONS OF EMPLOYEE EMPOWERMENT IN SERVICE

ORGANIZATIONS

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2.11 CONCEPTUAL FRAMEWORK 14

CONCLUSION 15

REFERENCE 17-18



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Chapter 1

INTRODUCTION

1.1 BACKGROUND OF THE RESEARCH

Employee empowerment is now a very significant concern to institutions which produce services

due to the characteristics of delivery of service and mainly nature of intangible-dominant

services. In the service-oriented business organizations both customers and employees are

occupied concurrently in the service production. This study will explore how the empowerment

of the employee influences the service quality and thereby increase the customer satisfaction in

the context of Reliance Bank Limited.

Employees are the representatives of the organization as well as its products or services to the

customer. It is considered that customer and employee who are satisfied are vital worth for the

institutes. It is the responsibility of the organization to derive such strategy that ultimately result

in satisfaction from the customer or employee. Generally employees play a vital function to

determine whether a client get the knowledge or go away to the competitors for superior service.

This forces organizations to re-think their strategy (Baruch (1998). Today organizations can

compete more effectively by comparing themselves in the context of the service quality and

improve customer satisfaction (Zeithaml et al 2006).

1.2 Problem discussion

In the banking industry, the general offerings of all competitors are almost similar, though they

try to differentiate the offerings. Grönroos (2001) states that only a few number of retailing bank

can offer customers retailing services that satisfy them. Therefore, by offering customers high

level of quality services service providers try to differentiate themselves from their rivals.

According to Ashis K Sen (2008) a bank is unable to check its services quality and products lineto remove unacceptable ones before they are presented to the customer. Hence, Employees are

treated as the voice and face of the organization. Traditional training is inadequate to provide

quality giving necessary authority to the employees to construct decisions regarding customer

satisfaction is essential (Ashis K Sen2008). Regarding employee empowerment it is said that



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employees are the interface between the customers and the organization.

Figure: Employees as an interface in service. (Own)

1.3 Statement of Problem

How does empowerment of employee impact on service quality and customer satisfaction?

1.4 PURPOSE OF THE RESEARCH

Employees are the most important asset for any types of business. In case of service-oriented

business employees are the core intermediary to provide service to the customers. Here, the

research purpose is to examine the impact of the empowerment of the employee on the quality of

the service and service to the customer in service organizations in the context of the RelianceBank Limited.

1.5 RESEARCH OBJECTIVES

The aim of this research is to investigate how the empowerment of the employee influences the

service quality and thereby increase the customer satisfaction in the context of Reliance Bank

Limited. To achieve this aim following objectives are essential:

i.

To explore the impact of the empowerment of the employee on the quality of theservice and service to the customer in service organizations;

ii. To identify suitable employee empowerment process;

iii. To evaluate the service quality of the case company- Reliance Bank Limited; and



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iv. To evaluate satisfaction level of the customers of the Reliance Bank Limited.

1.6 RESEARCH QUESTIONS

To attain the objectives of this research the research has to answer the following questions:

i. How does the empowerment of the employee influence the quality of the service and the

customer satisfaction in the service oriented organizations?

ii. Which employee empowerment process is suitable for the service organizations?

iii. How does the service quality and the customer satisfaction associate with each other?



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1.7 BACKGROUND OF THE CASE COMPANY

Reliance Bank Limited was founded in 1890 by William Booth. Previously this bank was well-

known as The Salvation Army Bank Its Headquarter is in London, UK. Now, The Salvation

Army International Trustee Company owns 51% share of this bank and The Salvation Army

Trustee Company owns remaining 49% share. Basically, the Salvation Army and also a lot of

private customers, churches, charities, and businesses transact with this bank.

Reliance Bank emphasizes on the care of customer. They are committed to ethical banking and

no investment is made beyond the strict ethical boundaries. The Profits of this bank are used

finance evangelical and charitable work of The Salvation Army.

http://en.wikipedia.org/wiki/William_Booth

http://en.wikipedia.org/wiki/Salvation_Army

http://en.wikipedia.org/w/index.php?title=The_Salvation_Army_Trustee_Company&action=edit&redlink=1


http://en.wikipedia.org/wiki/Charitable_organization

http://en.wikipedia.org/wiki/Ethical_banking

http://en.wikipedia.org/wiki/File:RBL_logo.jpg

http://en.wikipedia.org/wiki/Ethical_banking

http://en.wikipedia.org/wiki/Charitable_organization



http://en.wikipedia.org/wiki/Salvation_Army

http://en.wikipedia.org/wiki/William_Booth



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Chapter 2

LITERATURE REVIEW

2.1 SERVICES AS A PRODUCT:

According to Looy et, al., (2003), “services can be defined as any activity that is offered by one

party to another party as well as it is fundamentally insubstantial in addition to it is not necessary

to consequence in the possession of whatever thing.” Zeithaml et al (2006) said that, “services

can be defined as the actions, processes, and performances.” From this definition a clue about

service can be found that is it is a process sooner than products. Looy et al (2003) provided the

definition of services of retail- banking sector as, “service is all the economic activities that are

insubstantial as well as it involves in a communication to be realized between organization and

customers. So service is a process that is involved with the employees as well as customers in

this case employees are the seller and they try to deliver the services to the customers.

2.2 CLASSIFICATIONS OF SERVICES:

According to Zeithaml et, al,. (2006), “main services can be divided into four category. These are

as follows:

1. Service industries and companies: normally the organizations that provide different services

naturally classified inside the sector of service as well as its main product is service.

2. Services which worked as services: as services a broad variety of insubstantial product are

offered to the customers’ value.

3. Customer service: Customer service is the service that is provided to the customers to

Support Company’s main products and services.

4. Derived service: normally the service which is derived is service that services value provides

to the customers and they receive customer services by using these services.

Under the service industries and companies the retail-banking sector can be classified these

companies main product is service.



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2.3 RETAIL BANKING SERVICES:

Normally the banking of retail is the part of banking sector activities where banking sector

maintain a direct transaction with the customers sooner than organizations or additional banks.

Account of savings and current accounts, mortgage system, individual loan, withdrawal cards

etc. are the services that are provided by this type of banking services.

Savings accounts: Normally retailed financial institutions maintain the savings accounts of the

customers. These organizations do not pay the interest in a straight line as the medium of money.

Checking account: Checking account means a transactional account. By using this account any

customers can withdraw money and pay money by the utilization of cheque..

A mortgage: A mortgage is retaining of the possessions to the lender as safety for an advance

loan. At the same time as a mortgage is not a debt, it is proof of arrears. The system of mortgage

is used as a security for giving the loan whichis provided by the lender to the receiver.

Personal loans: Personal loans are the loan that normally used as unsecured advances such as-

financial advances which need not security against the mortgage system.

A Debit card: Normally debit cards are plastic prepared cards that is used as a substitute system

of the payment against cash if anyone want to buy something. Sometimes these debit cards are

designed to operate through internet then there is no physical card.

A credit card: Normally the credit cards are always used as a payment system. It is also a plastic

card that is issued by the banks. Then the issuer can lend money to the consumers or users that

can be paid later.



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2.4 SERVICE QUALITY IN SERVICE ORGANIZATIONS:

According to Christian Grönroos, “it is necessary to get an acceptable outcome for the best

perveived quality where an outstanding service process provides a different and sustainable

spirited border.” Looy et al (2003) said that, “normally service quality is a form of attitude for

the long run as well as it evaluates the service process.” According to Sureshchander et al (2002),

“service quality is the degree of inconsistency between expectations of the customers about the

services as well as their perceptions about the performance of the services.”

There are some factors that affect the services. These are as follows:

1. Normally the attitude of customers consuming the services as well as the impression of

the buyer-seller communications that can positively or negatively affect a customer’s

behavior.

2. Customers’ service receiving ways influence his or her view of quality about the services.

On the basis of the customers service receiving quality of the services can be classified by two

ways. These are as follows:

Technical quality: Technical quality is the receiving of the customer and ways of receiving it as

well as the results of the system.

Practical or quality of process: it is ways of the services providing system and ways of the

service provider functioning.

• Quality of Outcome: It is created on the basis of the result of the services system.

• Communication quality: It is the superiority that is created on the basis of the processes

involved.

• Physical environment quality: normally this service quality is heavily depend on the

environment of the organization.

2.5 THE CUSTOMER PERCEIVED SERVICE QUALITY:

Normally customers owned insight about service that is relied on various elements causative to

the services started from the process to the last outcomes is called Customer perceived service

quality. According to Grönroos (2001), “what customers perceive is the quality”. All The

contributions to the processes as well as to the final outcome is considered by customer buying



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services. According to Looy et al (2003) as well as Zeithaml et al (2006), and G rönroos(2001), “

the customer perceived service quality is the subjective appraisal of the real service experiences,”

Sureshchander et al (2002) said that, “sometimes service firms have a problem envisioning and

considerate that aspects of the service what describe high quality to the consumers services as

well as at every levels, they are needed to be provided.”

According to Looy et al (2003), there are some measures of service quality. These are as follows:

• Tangibles: Tangibles is the appearance of physical facilities as well as the personal facilities.

There are some mechanisms as well as tools that are used to serve the service to the consumers.

• Reliability: Reliability means the steadiness performance of the service that breeds reliability

from any customers properly.

• Responsiveness: Responsiveness is the readiness on account of the service provider to help the

consumer and to give punctual service.

• Assurance: Assurance is the knowledge based ability as well as good manners of workers for

the consumers and their aptitude to motivate faith in addition to self-assurance in maintaining the

consumers.

• Empathy: It is a employee quality for taking mind of every employees as well as giving them

individual concentration.

According to Zeithaml et al (2006), “Normally customers receive services as the form of quality

of the services as well as it satisfied them if their expectations are fulfilled.”

2.6 CUSTOMER SATISFACTION:

Kotler et al (2006) says, “the buyer will be satisfied after getting the performance of the products

and services what they expected this is called customer satisfaction.”

Zeithaml et, al,. (2006) said that, “the service quality and the customer satisfaction can be used

one for another.” As well as there is really a difference. Satisfaction of a customer can be

defined by many ways on the basis of the needs and demands that start from feelings of

completion, satisfaction, enjoyment, pleasure, release etc. mainly the quality of service is one of

the factors which increase the satisfaction of the customers that is used as components or

measures of customer satisfaction.



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2.7 EMPLOYEE EMPOWERMENT IN SERVICE ORGANIZATIONS:

There is different definition of empowerment and different writers provide the definition from

their own perspectives. Normally employee empowerment can be defined as the independence of

the employees concerning service come across and there is a conventional delegating method

power to subordinates to by the boss. Looy et al (2003) says “empowerment is the process of

providing the autonomy to the regarding employees to allow them to handle problems in the

specific situation.” Herrenkohl et al, (1999) said that, “when employees being more proactive as

well as self-sufficient in helping the organizations to achieve the organizational goals then it are

called empowerment.”

Looy et al (2003) says, “There are essentially two approaches that a organization can choose to

apply. Such as- the conventional method of delegation and the empowerment approach.

a) The production line approach: It is the manufacturing method of providing services that is

modernized by generalization of tasks, obvious labor division, and replacement of necessary

equipment as well as systems for the employees.

b) Empowered approach: Empowered approach gives less importance on the systems nearby the

service employees who are given more carefulness and independence for their tasks.

According to the nature of the services these approaches can be used. These approaches have

impact on the service providing process, customer perceived service quality, the service quality,

customer approval, worker, and the client etc.

According to Grönroos (2001), “employee empowerment is a part of the inner marketing process

in an association when it is properly implemented then it can have a great impact on the job

satisfaction of the employees that improve the marketing system as well as improve customer -

employee relationship.”

2.8 THE DIMENSIONS OF EMPOWERMENT:

In different types of service literature Looy et al (2003) and Zeithaml et al (2006) said that,

“employee empowerment has many dimensions that start from the individual employee level to

the organizational level of the empowerment.”



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According to Looy et al (2003), “the most significant reason for empowerment at the individual

employee level is the faith that normally autonomy motivates employees as well as then they are

willing to take initiatives and like to take decisions sooner than being dictated to regarding their

jobs.”

Looy et al (2003) said that, there are five dimensions which drive the people to work. These are

as follows:

Meaning: Meaning is the degree to which an individual has experiences about task that is

personally significant.

Competence: Competence is the degree to which an individual feels confident about their

capabilities to do the certain task.

Self-determination: Self-determination is the degree which influences an individual to perform

the specific task.

Strategic autonomy: Strategic autonomy is the degree which influences an individual to make

the content of the job.

Impact: Impact is the degree which affects an individual to do their duties on the direct work

surroundings.

2.9 LEVEL OF THE ORGANIZATION:

According to Looy et al (2003) “if there are not necessary organizational supports then

employees cannot be empowered so stimulates actions like initiatives taking as well as

independent actions are necessary.” For Successful empowerment for the employees’

organizational conducive environment is necessary where these approach and performance can

be developed. He also said that “the organizations which are empowered can facilitate the

approaching down of information, knowledge, plunder, and authority.”



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2.10 EMPLOYEE EMPOWERMENT AND ITS IMPLICATIONS IN SERVICE

ORGANIZATIONS:

Many authors suggest that employee empowerment provides benefits for the employees as well

as customer satisfaction. Some benefits are listed by Grönroos (2001). These are as follows:

Earlier and more direct response to customer wants: experiences of the customers’ enthusiasm

help the employees at the unusual situation in comparison to the conventional mode of decision

making by the boss. It affects the perceived service quality.

i. Earlier and straighter response to dissatisfied customers in service revival:

Employees can help the supervisors to recover in the situation of service failure with no

intervention of the boss.

ii. Employees become satisfied with their jobs and look happier about them:

If employees think that they enjoy the job ownership then job absenteeism as well as it reduce

employee turnover rate.

iii. Employees will treat customers more passionately:

Empowerment motivates employees to behave passionately with the customers that have a

positive effect on the marketing issue.

iv. Employee empowerment can be a valuable source of new ideas:

If the organization provide environment to build the employee empowerment then they will try

to generate new ideas for the organization.

For the transformation of the traditional organization to employee empowered organization

organizations need to provide proper environment and should change the organizational vision. It

is said that there are both positive and negative effect of employee empowerment in the

organization.



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2.11 Conceptual framework

The proposed framework explains the employee empowerment concept that influences the

service organization.

Figure: Conceptual frame work (own source)



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CONCLUSION:

Employee empowerment is a very important concern to institutions which produce services due

to the characteristics of delivery of service and mainly nature of intangible-dominant services.

Empowerment is the process of providing the autonomy to the regarding employees to allow

them to handle problems in the specific situation. Employee empowerment has a great impact on

the job satisfaction of the employees that improve the marketing system as well as improve

customer-employees relationship. There is different definition of empowerment and different

writers provide the definition from their own perspectives. Normally employee empowerment

can be defined as the independence of the employees concerning service come across and there

is a conventional method of delegating power to subordinates to by the boss. This study will

explore how the empowerment of the employee influences the service quality and thereby

increase the customer satisfaction in the context of Reliance Bank Limited.

In the service-oriented business organizations customers as well as employees both are occupied

concurrently in the service creation. Service is all the economic activities that are insubstantial as

well as it involve in a communication to be realized between organization and customers. So

service is a process that is involved with the employees as well as customers in this case

employees are the seller and they try to deliver the services to the customers. It is necessary to

get an acceptable outcome for the best perceived quality where an outstanding service process

provides a different and sustainable spirited border. The quality of the service is the gap between

expectations of the customers about the services as well as their perceptions about the

performance of the services. Service quality depends on the performance of the employees.

Retail banking is the type of banking activities where banks maintain a direct transaction with

the customers sooner than organizations or additional banks. In the banking industry, the generalofferings of all competitors are almost similar, though they try to differentiate the offerings. A

bank is unable to check the acceptability of the service or products offered by the bank. Hence,

Employees are treated as the voice and face of the organization.



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For the role of the employees in the organizations that provide the services as well as the greater

value to the customers that the companies require to accept a system or approach that provide

satisfaction. In this case employee empowerment is helpful for the service organizations.



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Reference

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integrated approach (2nd edition), Great Britain: Pearson education limited.

2. Carol Yeh-Yun Lin, (2002). Empowerment in the Service industry: an empirical study in

Taiwan. Journal of Psychology, 136(5), 555-560.

3. Christian Grönroos, (2001) Service management and marketing: a customer relationship

management approach, (2nd edition), England: John Wiley and sons limited.

4. Colin Fisher. (2007). Researching and writing a dissertation: a guidebook for business

students (2nd edition), Pearson education limited.

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Studies: a practice guide. New York: Prentice-Hall.

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customer perceived service quality: a confirmatory factor analysis approach. Journal of

services marketing. 1(16) 9-34

7. Henry J. Coleman Jr. (1996). Why employee empowerment is not just a fad. Leadership

& Organization. 17(4)29 – 36.

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Empowerment in organizations. 5(4)202-212.

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Sage Publications, Thousand Oaks.

11. Phillip Kotler, Kevin Keller. (2006) Marketing management, (12th edition), Pearson

education: prentice hall.

12. Profile of the Reliance bank Ltd available atwww.reliancebankltd.com <cited on Oct. 18, 2011>

13. Saunders, M.; Lewis, P. & Thornhill A. (2001), Research Methods for Business Students,

Prentice Hall, Financial Times.

14. Saunders, M.; Lewis, P. & Thornhill, A. (2003), Research methods for business students,

Financial Times/Prentice Hall.

http://www.reliancebankltd.com/





15. Saunders, M, Lewis, P and Thornhill, a (2007), research methods for business students

(4th edition), new jersey: financial times/prentice hall.

16. Shilpa Bichitra, Bengali Journal Ashis K Sen. Former Managing Director Centurian Bank

Limited, available at

http://www.shilpabichitra.com/Shilpa2000/indart4.htm <cited on Oct. 18, 2011>

17. Valarie A. Zeithaml, Mary Jo Bitner, Dwanyne D.Gremler, (2006). Services marketing;

integrating customer focus across the firm, (4th edition), Singapore: Mc-Graw hill.

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