The economy
of any country
depends on three
key regions; agricultural
sector, industrial sector,
and service sector (Farwin and Uthayakumar,
2018). Among their vital role is played by the service sector for the success
of economic advancement. It evidenced that the banking sector
contributes to the
massive extent to
the financial development
of the country
directly and indirectly. Generally,
banks are highly
known for a
heavy workload, long
working hours and least motivated employees.
Baumruk (2004)
contends that every
organization wants to
gain competitive advantage and
employee engagement is the best tool for achieving it. In fact, employee engagement is considered to
be the most powerful factor to measure a company’s vigor
and orientation towards
superior performance. Employee engagement has a monumental effect in the context
of ensuring that employees are committed to the achievement of bank’s
objectives. Human capital is the primary asset in achieving competitive advantage in any sector.
Engaged employees support the
organization to attain its mission, execute its strategy, and generate
significant business results. Employee engagement can be enhanced by different
HR practices comprising job design, recruitment, selection, compensation,
training, and performance management (Vance, 2006).
Figure
1.0 Impact of Employee Engagement on Objectives of the Bank
Source: UKEssays
(2018)
Absence
management, credible leadership, job security and career satisfaction, communication,
motivation and workload could be identified as significant areas that impact on
the objectives of the banks. Failure to design explicit policies and due to
stress being placed on staff can result in disengaged employees.
Figure 2.0: Levels of Employee Engagement
and their Behaviors
Source : Gallup (2006)
Gallup (2006), proposed that employees could be divided into
three types with regard to their level of engagement, Engaged, Not-Engaged and Actively Disengaged, with the later being of
most concern to the employer brand as a result of sharing their discontent with
their co-worker and the wider world. Managers want to improve
employee engagement on grounds that it leads to superior performance, reduces staff
turnover and improves
the well-being of employees (Macey & Schneider, 2008;
Hakanen et al., 2008). Engaged employees
value, enjoy and have pride in their work and are more willing to help each
other and the organization succeed.
LePine, Erez, & Johnson (2002) argue that engaged employees take
additional responsibility, invest more effort in their jobs, share information with
other employees and remain with the organization than employees who are less
engaged.
In a
survey conducted by Netsurvey to analyze responses from 200,000 employees
across 40 companies in 60 countries, several troubling trends were found,
including engagement scores decline with employee tenure, meaning that
employees with the deepest knowledge of the company typically are the least
engaged (Kaufman et. al. 2014).
Managing human resources
is very challenging as compared to managing any other resources and for its
effective management, banks require strong and effective HRM system. Having the sense of belongingness to the bank, is one
of the fundamental factors to improve the employee engagement towards the
implementation of strategic goals of the bank. It is not only the
responsibility of human capital managers to ensure the utilization of all their
skills to facilitate employee engagement. Superiors and coworkers must work
hand in hand to achieve the same. It is
important for HR managers to better understand and implement the practices and
policies which are effective predictors and promoters of employee motivation,
employee retention and employee productivity, organizational processes, values
of the organization, management, challenges in employee role, employee
work/life balance, information, compensation, workplace environment and their
products and services (Glen 2006).
Employee
engagement was greatly influenced by performance management, personal
development and growth, workplace recreation and remuneration package. However, among
the determinants, remuneration is the highest contributor of employee
engagement with workplace recreation having the least influence.
Low engagement and job satisfaction can contribute to multiple organizational
problems and have been associated with increased levels of turnover and
absenteeism, adding potential costs to the organization in terms of low
performance and decreased productivity. It is important for bank management to
be aware of the needs and make up of their workforce, as well as the impact of
environmental factors, when developing their programmes and policies that have
implications on engagement (Mokaya et
al., 2014).
Safety of customer deposits, offer customers interest on deposits whilst helping to
protect money against money losing value due to inflation, lending money to
firms, customers and homebuyers, offering financial advice and related financial services,
such as insurance are the main purposes of banks. All these purposes lead to
the ultimate objectives of the banks’ i.e. profit maximization at the
organizational level and contribution to the financial and monetary stability
of the economy at large. Further research shows that employee engagement has an
effect on a company's bottom line and is sturdily linked to business performance
(Saks, 2017).
In essence, from the given
literature in this context, it can be said, that there is a direct correlation
between employee engagement and objectives of any organizations, irrespective
of the industry the organization operates in. Banking organizations being a
service provider which is run by employees in the forefront to backend office
staff contributes immensely in the achievement of the bank’s objectives mainly
by satisfying customers’ banking needs, thus having engaged employees can be
considered as a key in achieving bank objectives in the long run.
References
Gallup, 2006. Gallup study: “engaged employees inspire company innovation: national survey finds that passionate workers are most likely to drive organizations forward”, The Gallup Management Journal. [Online]. Available at: http://gmj.gallup.com/content/24880/Gallup‐Study‐Engaged‐Employees‐Inspire‐Company.aspx [Accessed on 30th November 2020]
Kumari, K.W.S.N. and Jayasinghe,
G.J.M.S.R. and Sampath, J.K.H., Employee Motivation Factors in Banking Sector:
A Study on Qualitative and Quantitative Analysis, 2020. Journal of Social and
Political Sciences, Vol.3 No.1 (2020).
Mokaya, S.O., 2014. “Determinants of Employee
Engagement in the Banking Industry in Kenya; Case of Cooperative Bank”, Journal
of Human Resources Management and Labor Studies, Vol. 2, No. 2, pp. 187-200. [Online]. Available at: http://jhrmls.com/journals/jhrmls/Vol_2_No_2_June_2014/12.pdf [Accessed on 30th November 2020]
Robinson, D, Perryman, S & Heyday, S
2004, ‘Drivers of Employee Engagement’, report 408, Institute for Employment
Studies. [Online]. Available at: <https://www.employment-studies.co.uk/system/files/resources/files/408.pdf> [Accessed on 30th November 2020]
Saks,
Alan. 2017. Translating Employee Engagement Research into Practice.
Organizational Dynamics. Pp 46.
Smith, GR & Markwick, C., 2009. ‘Employee
Engagement: A review of current thinking’, report 469, Institute for Employment
Studies. [Online]. Available at: <https://www.employment-studies.co.uk/resource/employee-engagement-review-current-thinking> [Accessed on 30th November 2020].
UKEssays. November 2018. Impact of Employee
Engagement in Banking Strategic Success. [online]. Available from:
https://www.ukessays.com/essays/banking/impact-of-employee-engagement-in-banking-strategic-success.php?vref=1
[Accessed 5 December 2020].
Vance, R. J., 2006. Employee engagement and
commitment; A guide to understanding, measuring and increasing engagement in
your organization.
Adding to your introduction that When employee engaged, they arise for their organization because employee feel that they are a part of it. Additionally discover options to issues and create concepts to enhance the productiveness of the group(Allen, 2014).
ReplyDeleteHi Isuru , Yes engaged employees lead to productivity in the workplace, and this generates higher customer satisfaction and positive rises in sales and also profit in the organizations. Confidence and communication among both employees and organizations are also essential. This unification between the enterprise and the employee is a necessity as both are able to best in performance (Sarangi & Nayak, 2016).
DeleteInteresting reading and adding more to your blog. Wickham(2020) explained that, there are basically 10 benefits of Employee Engagement and they directly impact to organization.
ReplyDelete(a) Increased employee safety
(b) Better employee health
(c) Happier employees
(d) Greater employee satisfaction
(e) Better home life
(f) Lower absenteeism
(g) Higher retention
(h) Greater employee loyalty
(i) Better customer service
(j) Better quality
Future more Caplan,(2013) noted that, Employee engagement increases productivity, creates a better and productive work environment, and minimize employee turnover. Engaged employees need good communication with next top level , work that has purpose for them and motivates them, and a safe working place.
Yes Madura, Abassi and Hollman (2000), stressed that the managers must recognize that employees as major contributor to the efficient achievement of the organization’s success. Furthermore, highly motivated and performing individuals are the crucial factors of the organizational productivity. Therefore, there is need to develop a thorough understanding of the employee turnover from the perspective of causes, effect and strategies to minimize turnover.
DeleteBrunswick group (Metts, 2020) mentioned that companies need to develop employee engagement and communication plans to keep morale high and help their people stay connected with each other.
DeleteThe proper and systemized Talent management system leads to the business in a successful and prosperous manner and help the business to gain the competitive advantage in the market. Becker (2009) confirmed with its studies that without managing the human capital no organization can become the driving force in the market and for effectively managing the human capital different policies and practices are introduced in order to facilitate the employees so that the operations of the business will run smoothly. Reward management system positively effect the job satisfaction level of the employees because in the corporate sector especially in the banking sector the prime motive of the employees is to earn a respectable income. (Kabanoff, 1994) also confirmed with its studies that reward in terms of money is the most accelerated force that increases the performance of the employees.
ReplyDeleteTalent Management is a continuous process that plans Talent needs, builds an image to attract the very best and ensures that the new hires become immediately productive. The main goal of the Talent Management process is to increase overall workforce productivity by improved attraction, retention and utilizing the Talent (Kubendran & Vijayakumar 2016).
DeleteThere are differences among attitude, behavior and outcomes, in terms of engagement. As employee might perform with pride and commitment (attitude); exhibit three positive behaviors’, namely Say (employees speak positively about the organization to others inside and out), Stay (employees display an intense desire to be a member of the organization) and Strive (employees exert extra effort and engage in behaviors that contribute to business success (Dajani,2015)
ReplyDeleteHi Asanka, engaged employees are said to be dedicated, productive, enthusiastic, accountable and at the same time result focused (Allen 2014). Further, the Aon Hewitt’s employee engagement model (2012) has drawn attention to the three behavioral traits of an engaged employee, as you have correctly mentioned above.
DeleteAdding more to you post, employee engagement has emerged as one of the greatest challenges in today’s workplace. With complexities and stringent regulations in many organizations, employee engagement will continue to challenge organizations in the future (Mishra et al., 2014). This aspect challenges management because engagement is a critical element in maintaining the organization’s vitality, survival, and profitability (Albercht et al., 2015; Breevaart et al., 2013; Farndale & Murrer, 2015). Organizations that have highly engaged employees have greater profits than those that do not (Society for Human Resource Management [SHRM], 2014). Organizations with highly engaged employees experience increased customer satisfaction, profits, and employee productivity (Ahmetoglu et al., 2015).
ReplyDeleteYes Malithra, organizations focused on employee satisfaction as a standalone requirement of employees rather than promoting the relationship employees have with the organization, and with time, attention had drifted apart from employee satisfaction to commitment (Chandel 2018). Without any doubt, a company aiming to be successful in today’s market essentially need to retain and attract dedicated and competent workforce. Employee engagement is one key driver in achieving aforesaid task. Engaged employees have a sense of energetic and effective connection with their work activities and see themselves as able to deal well with the demands of their job (Schaufeli & Bakker, 2004)
DeleteHi Malithra, It is Pertinent to mention that, after the financial crisis 2008, for companies with engaged workforce, EPS ( Earning Per Share) has been a strong differentiator as companies with engaged employee base had seemed to be recovering from the drop in EPS at an increasing rate when compared with the peers, which further evident the correlation between employee engagement and organization’s success (Sorenson, 2013).
ReplyDeleteEngaged employee consistently demonstrates three general behaviors which improve organizational performance:
ReplyDelete1 - Say-the employee advocates for the organization to co-workers, and refers potential employees and customers.
2 - Stay-the employee has an intense desire to be a member of the organization despite opportunities to work elsewhere.
3 - Strive-the employee exerts extra time, effort and initiative to contribute to the success of the business ( Baumruk and Gorman, 2006).
Hi Kanishka, The Aon Hewitt engagement model describes engagement as a construct of six items: brand leadership, performance, company practices, basics and work with three observable facets: say, stay, strive. Employees are fully engaged if they show all aspects of these three facets so they are the outcomes of engagement. “Say” refers to speaking positively to colleagues and customers about the company. “Stay” describes the desire of the employee to be part of the company and belonging to it. “Strive” translates into motivation and extra effort that the employee is willing to put into his job ( Hinzmann & Sacha, 2019).
DeleteThere are several positive impacts of employee engagement. It encourages hard work and keeps success stories alive, develop a strong performance management system which holds managers and employees accountable for the behaviour they bring to the workplace, place focus on top-performing employees to reduce their turnover and maintain or increase business performance (Markos & Sridevi, 2010).
ReplyDeleteYes Dilini, Abassi and Hollman (2000) stressed that the managers must recognize that employees as major contributor to the efficient achievement of the organization’s success. Furthermore, highly motivated and performing individuals are the crucial factors of the organizational productivity. Therefore, there is need to develop a thorough understanding of the employee turnover from the perspective of causes, effect and strategies to minimize turnover.
DeleteOrganizations, including banks, use motivation in the attainment of these desired business outcomes and key factors such as extrinsic motivators described as salary, bonus and commission directly impacts an individual while intrinsic factors like working conditions, employee engagement and job security also plays a major role (Wijesundera,2018).
ReplyDeleteCompensation can powerfully influence employee engagement and commitment. Some compensation components encourage commitment to employers, while others motivate engagement in the job. It is possible to stimulate one and not the other, though it’s generally better to foster both. Incentive pay, also known as pay-for-performance, can directly influence employees’ productivity (and thus their engagement) as well as their commitment to the organization ( Vance,2006).
DeleteEmployee Engagement, the degree of an employee is emotionally bonded to his organization and passionate about thework. Organizations believe that engagement is a dominant source of competitive advantage. Results from research organizations and corporate results have demonstrated there may be a strong link between engagement, employee performance and business outcomes. The key drivers of employee engagement identified include communication, opportunities for employees to feed their views upwards and thinking that their managers are committed to the organization. Markoset al. (2010)
ReplyDelete