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CHAPTER NO.1: INTRODUCTION

1.1 Motive for Selecting Topic

Privatization has been perceived by various researchers to be a means of

reducing the role o f the government from direct provision o f services and encourage

private sector participation and competition. Much o f the mainstream writing on

privatization has been concerned with the effects of regulation and pricing regimes on

the utilities by their respective governments and although an interest in efficiency and

effectiveness has been central to this approach, l it tle detailed attention has been

given to public employees and their attitudes towards privatization, which may l ie

behind any developments in efficiency and improvements in service delivery. A study

o f public employees’ attitudes broadens the scope of investigation o f privatization.

Almost all developing countries including Pakistan have launched ambitious

privatization programs with view to improve efficiency of the state-owned enterprises,

convert the enterprises from state based economy to market based economy. Despite theextent of privatization worldwide, little attention has yet been paid in policy and the

academic literature to its impact on labor (Oestmann, 1996). The focus of most studies is

efficiency and profitability of the privatized business and, to lesser extent, the quality of

the services it delivers (Hodge, 1996).

A universal concern in this process the effect privatization has on labor. Major

researchers, politicians and observers fear that privatization will cause major job losses

because the new owners/managers will reduce the workforce for improvement of

efficiency. On another side before divesting government cuts the work force to prepare

for privatization. The opponents of privatization in developing countries are labor unions

and enterprise work force, like labor unions of WAPDA and PTCL in Pakistan. They are

most vocal and organized opponents and trying to delay or block the reform.

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1.2 Privatization & Labor Market

Governments have traditionally feared the impact of privatization on employment.

In some countries, the concern about massive layoffs has led governments to side-step

privatization and tinker, without much success, with public enterprise reform.

Increasingly, however, governments realize the futility of public enterprise reform and

the opportunity costs of delaying privatization (in terms of unrealized gains from

privatization to society as a whole). Governments that have taken employment concerns

seriously have devised labor strategies, and have been able to mitigate the adverse

consequences of privatization.

The impact of privatization on employment is multifaceted and complex. The

evidence is not clear on whether privatization has had a positive or negative effect. First,

privatization has had a different impact on labor made redundant as a result of

privatization, on labor retained within the privatized enterprise, and on labor markets.

Second, the impact of privatization on employment can be measured both quantitatively

(number of workers made unemployed, number of new jobs created, etc.) and

qualitatively (working conditions, working hours, unionization, etc.), and the two

indicators need–indeed, rarely– move in tandem. Third, the impact of privatization on

employment has depended primarily on the company’s initial labor conditions, which in

many SOEs are: overstaffing, higher wages than comparable jobs in the private sector–

especially if the SOE does not face a hard budget constraint, generous non-wage benefits,

rigid labor contracts or collective bargaining agreements, and high job security. Fourth,

the welfare impact has varied depending on the measures that governments have taken,

namely on whether they have put in place social safety nets. Fifth, the impact has varied

depending on the privatization method. Sixth, the impact of privatization on employment

will vary from industry to industry and depending on the macroeconomic conditions.

Finally, the population growth rate of the country will also effect on employment rate of

the country. So, the complexity of the relationship between privatization and employment

is such that there is no standard answer. (Sunita Kikeri, 1998)

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It is frequently observed that employment is reduced with privatization (either in

preparation for, or after) and the accompanying restructuring due to the overstaffing that

typically exists in many SOEs. Three large-scale studies, however, have documented

significant increases in employment. Galal et al. (1994) find that workers had a net

welfare gain in ten out of twelve cases they examined, and that even laid-off workers

were not worse off because of the social safety programs put in place (compensation

packages, discounted shares, etc.) Boubakri and Cosset (1998) calculate an employment

increase of no less than 10% in 57% of the privatized cases examined. On the other

hand, examples of significant job losses abound. In Argentina, the privatization of the

railway enterprise, which began in 1990, involved the loss of nearly 80,000 jobs in less

than five years. But prior to privatization, the company was losing $ 800 million a year

and receiving $ 1.3 billion a year in subsidies and the company moved less than 10% of

the total traffic. In 1995, the subsidy had dropped to $ 250 million a year, productivity

had increased ten times, and urban commuter rail rider-ship increased by 45%. In

Mexico, half in the four years before privatization in 218 SOEs reduced the number of

white and blue-collar employees.

Employment implications of privatization are important issues that need to be

addressed. The issue of employment can be looked at from both static and dynamic

perspectives. From a static point of view, what happens to employment in the privatized

unit is relevant. The dynamic aspect of employment is linked to the stated objective of

increasing productivity. In the longer run, increased productivity and higher growth of the

economy may create conditions for enhanced growth of employment. The economic

environment and future growth potential of the economy, especially the private sector,

needs to be examined in this context and the long-term employment implications need to

be analyzed? (Joshi,Gopal, ILO, SAAT. New Dalhi)

The main reason of privatizing government enterprises in developing countries

was to improve efficiency and decrease operating cost. The main cause of higher

operating cost was political appointment, employing too many peoples more than

requirement of enterprises. State owned enterprises were free and protected from

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competition. Peoples were appointed with higher wages and benefits that were higher

than their private sector counterparts. These decisions led to low productivity and higher

operating cost of state owned enterprises, in turn have contributed to inefficiency and

financial losses. To attain the objectives of privatization (improvement in efficiency and

decreasing operating cost) it was necessary to restructure the work force before

privatization by government and after privatization by private owner. This restructuring

will lead to reduction in labor force. At the same, it is believed that workers will gain

from privatization, because of new investments that will create opportunities of new jobs

and better terms and conditions of services.

1.3 Problem Statement

The impact of privatization on employment is multifaceted and complex. The

evidence is not clear on whether privatization has had a positive or negative effect; but it

is sure that it has straight impact on the workforce of organization. In my research, main

focus is to study organization mode of privatization and post-privatization impact on

employees of organization i.e. job security, organization HR policies, promotion

appraisals factors etc.

To reach this purpose the following research questions are stated:

RQ1: Whether Post-privatization impacts favor the workforce of organization or not?

RQ2: How does organization manage the necessary concerns of workforce?

RQ3: How employee's efficiency can be affected by the Privatization?

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1.4 Objective of the Study

1.4.1 Understanding the Organizational Privatization

To counter-act the long term effects of Privatization, managers need to understand

how organizations slip into "down cycles". An organizational down cycle can be

characterized as a long-term process where the organization becomes progressively more

depressed, insular, protective and confused. The important thing to note is that this

process occurs slowly, sometimes imperceptibly, and that if the process is allowed to

continue unchecked, it gets worse.

The down cycling organization loses its positive momentum and enthusiasm. A

vicious circle is formed. It snowballs. Bad feelings and depression become the norm

rather than occasional, until, in extreme cases, the organization becomes unable to move

effectively, and the work climate can become intolerable for everyone. Because the

process tends to be gradual, managers tend to assume that the problems that occur early

in the down cycling will solve themselves without attention. It is easy to assume that

staff will "get over" the effects of Privatization over time.

This may be the fatal mistake, because if the process is left unmanaged, there is a

good chance that staff will become more demoralized. One final point on the down cycle

is in order. When an organization is close to the bottom of a down cycle, it is extremely

difficult to turn the organization around. This is because levels of trust, hope and

enthusiasm are so low that staff will have little faith in the effectiveness of any approach

that promises to be helpful.

Hypothesis

H0 = Employee job security does not have any impact on organizational

effectiveness of HBL.

H1 = Employee job security have impact on organizational effectiveness of

HBL.

H2= Employee Satisfaction effects on performance of HBL.

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H3= Effects of Privatization, layoffs etc. effects on employee loyalty.

1.5 Significance of Study

The financial services sector is one of the more obvious, and for the moment

visible, sectors undergoing dramatic structural changes in the light of a further

internationalization of the economy. In view of this, it is probably a good business

decision to engage in strategic mergers and other forms of alliances. It seems to be the

case, however, that those who make these decisions behave primarily as investors of

large capital and not as employers.

This has serious consequences for the impact on employment in a sector that has

already been placing increased emphasis on autoimmunization. Given the seemingly

irreversible characteristic of the current trend in the financial sector, unions are limited to

pleading for acceptable forms of "Privatization" and the introduction of flexibility. It

seems to be the case that while many analysts are focusing on the vast amounts of capital

being merged and the gigantic profits for investors, little attention is being paid to the

possible impact on those earning a modest living as employees in the financial services

sector.

The significance of study, I think with my thesis interpret in the followings ways

to whom it may concerns.

1. Mergers in banking cause serious concerns about employment

2. Social consequences and employment effects

3. Role of the unions

4. The present and future employment in financial services5. Human Resources & HBL Limited

6. The effect of Privatization on organization-employee relationship

the significance of study may help in this regard would be in the followings, One of

the most telling comments is often put forth by employees a year or two after

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Privatization, and it goes like this: "Sometimes I think that the ones who were laid off

are the lucky ones". They usually go on to describe a workplace where employees feel:

A lack of executive commitment to their functions.

Confusion about the priorities of their organization.

Increased workloads.

Confusion about their mandate.

A sense of being betrayed by executives and managers.

A profound sense of distrust.

A sense of futility with respect to long-term planning.

Undervalued and unappreciated.

In operational terms, this translates into a number of problems.

the organization moves towards less risk-taking and innovation

destructive conflict tends to increase

internal competition for resources increases

Individual staff members devote less effort to working together and more

attention to doing things that will protect themselves.

general listlessness and lethargy

decreases service levels and increased public hostility

It is easy to understand these effects when they occur close to the time when

down-sizing occurs, and remaining staff "grieve" the loss of friends and colleagues. But,

these effects are now being seen as long as one or two years after the Privatization

period. There are indeed long term effects of Privatization that need to be addressed.

1.6 Delimitations

As a background of my research topic “Privatization and its impact on workforce

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of employees of HBL ” generally represent all those issues which influence privatization

adoption in Pakistani banking sector, but according to limited time an attempt was made

to narrow down the research. The study would focus only on the “Employees Satisfaction

& Privatization Environment”. I believe the result of this research can be generalized to

all other issues designed for corporate customer especially big Corporate Sector.

Limitation beholds the following features.

The impact of privatization of the bank on Employees satisfaction from the time

of privatization which can’t be measured accurately due to having psychological

nature.

The Branches belongs to Punjab province only.

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CHAPTER NO.2: LITERATURE REVIEW

2.1 Literature on Privatization

Organizational privatization, or simply ‘privatization’, is a feature of many

organizations in the industrialized world. As a goal-oriented restructuring strategy,

privatization endeavors to increase an organization’s overall performance. However, the

consequences of privatization have proven to be persistently negative. Indeed,

organizations embarking upon privatization have largely failed to accomplish their stated

and desired objectives. Moreover, the execution of privatization is not confined to

economic and organizational consequences, but profoundly affects the entire workforce.

The first of two, aims to review the relevant body of literature and attempts to clarify

many of the mysteries and misconceptions associated with privatization paying particular

attention to aspects concerned with definitions and meaning, scope and implementation

strategies.

2.2 Employee & Privatization

Employee privatization is a nightmare feared by most of the employees working

in the corporate world. A privatization strategy reduces the scale (size) and scope of a

business to improve its financial performance.

In management parlance, the term privatization refers to pruning (including

layoffs and retrenchments) of the size of workforce for a variety of reasons:

Obsolescence of skills consequent upon up gradation of technology,

Shift in the organizational requirements;

Outsourcing;

Modernizing,

Restructuring or even reducing the activities of industrial units; and

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by a careful consideration of the consequences of such a drastic action. (Christopher, M.,

Payne. Ballantyne, D.(1991).

2.3 Morale

Morale, also known as esprit de corps, is an intangible term used for the capacity

of people to maintain belief in an institution or a goal, or even in oneself and others.

According to Alexander H. Leighton, "morale is the capacity of a group of people to pull

together persistently and consistently in pursuit of a common purpose". (Coyles,S.

Gokey,T. (2005).

2.3.1 Morale in the workplace

Workplace events play a large part in changing employee morale, such as heavy

layoffs, the cancellation of overtime, cancelling benefits programs, and the lack of union

representation. Other events can also influence workplace morale, such as sick building

syndrome, low wages, and employees being mistreated.

Factors influencing morale within the workplace include:

Job security, Management style, Staff feeling that their contribution is valued bytheir employer, Realistic opportunities for merit-based promotion. The perceived social

or economic value of the work being done by the organization as a whole. The perceived

status of the work being done by the organization as a whole. Team composition, The

work culture. (Coyles,S. Gokey,T. (2005).

2.3.2 How Privatization Affects Employees’ Morale

Every year companies spend millions in recruitment due to employee turnover.

Turnover and its associated costs are a burden that used to be just the cost of doing

business. But more and more companies are investing time and effort in making better

hiring decisions and doing more to keep the employees they do hire. Employee retention

is now a buzz word in today’s business world.

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Over two-thirds (70%) of HR managers state that employee retention is a primary

business concern. HR managers currently find employee retention a business challenge,

long-term demographic changes, such as the retiring Baby Boomer population have the

potential to aggravate this issue. All companies, regardless of size, are struggling with

how to keep employees from leaving for more money or better opportunities. Studies

consistently show that even though employees may say they are leaving for more money,

when those same employees are asked several months later why they really left, the

money factor is about 5th or 6th on the list. (Dawes. J. (1999).

The first few reasons include lack of recognition, disagreement with the culture or

direction of the company, poor treatment by their boss, lack of excitement about their

growth prospects, and poor relationships with co-workers. How much? When you add the

costs of finding an employee, training the new employee, lost productivity and filling in

for the employee who leaves, the cost can easily equal 150% of the base salary of the

person who left. So, if you are paying someone $50,000, the cost to replace that person

will be approximately $75,000. This money comes out of your hard-earned profits.

2.4 Conceptual Approach To Employee Privatization

2.4.1 “Reflective Restructuring”

According to Theo Blackwell of The Work Foundation, in 1980s and 1990s many

companies resorted to privatization their human resources in order to cope with economic

pressures. But what most of these companies do not realize is that privatization does not

always lead to savings in reality or increase in the market worth of the company. On the

contrary, the privatization companies may be employees anti-people. It usually leads to

repetitive privatization and results in the loss of employee morale and loyalty and thereby

affects overall productivity levels. However, they can adopt alternative approaches to

cope with economic uncertainties. Wayne Cascio, (1991) had proposed a new strategy

termed as "reflective restructuring", which enables companies to offer a range of smarter

options to employees. The article explains the significance of this new concept and

provides examples of companies in the US and UK which have adopted the strategy. It

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also explains that while companies in the US are at a greater liberty to downsize, the UK

business environment is not amenable to such measures. (Wang, Foxall,G., (2005).

Kalyan Chakravarti in the article, "Privatization and Outsourcing: An Indian

Perspective", explains the economic situation of India since Independence (post-1947)

and in the aftermath of the economic liberalization (post-1991). Against this backdrop,

the author analyses the performance of the Indian Public Sector Undertakings (PSUs). He

outlines the causes that resulted in surplus manpower among PSUs. However, after India

opened up its economy, most PSUs were compelled to streamline their operations to

increase their efficiency. One of the major steps taken to achieve this goal was to shed the

excess staff on their payrolls through the "golden handshake," by floating Voluntary

Retirement Schemes (VRS) and Compulsory Retirement Scheme (CRS). The other major step was to outsource non-core activities and focus on their core competencies. The

article provides a snapshot of the Indian experience of privatization and also discusses the

social implications of these drastic measures. Kalyan Chakravarti. (1997).

The article explains that privatization may prove to be a risky strategy that may

not always bring about much improvement in terms of the productivity or revenues to the

organizations. Hence, to cope with changing requirements of staff, companies should

consider a number of different alternatives to privatization.

2.4.2 Implementation Of Employee Privatization

Sumati Reddy of the ICFAI University, Hyderabad, India outlines ways in which

employers can implement a well-considered privatization program. If privatization is

inevitable, organizations must pay due attention to the rationale for privatization,

involvement of employees in designing the program, formulation of a fair and equitable

policy, Equal Employment Opportunity (EEO) guidelines, legal counsel, etc. The article

also suggests the use of objective data to formulate the privatization plan. In conclusion,

it points to a few indicators to assess the effectiveness of a privatization program.

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Carlton Becker of ORC enumerates a number of lessons from the collective

experience of layoffs by companies across the globe. These lessons largely pertain to the

need to remain lean and mean in a fast-changing global business environment, rightsizing

the right way, considering scientific alternatives to privatization, paying attention to the

after-effects of privatization, and being aware of the legal implications of privatization.

The author points out those mass layoffs should be viewed as a change process to be

implemented by adopting a systems approach. It explains the strategic role of HR

executives during the whole process, especially during the initial stages of rightsizing. It

further explains the step-by-step guidelines that HR executives can adopt in the

privatization process. The article shares the experiences of a few companies such as

MacMillan Bloedel, Canada, DaimlerChrysler AG's US unit Motorola, Hallmark Cards,

and Lucent Technologies. (Carlton Becker. (2003).

Ann E Feyerherm of Graziado School of Business and Management, Pepperdine

University, CA, USA, also provides guidelines based on the first-hand experience of a

manager involved in a privatization effort in a company in South California. Although,

her team of management consultants explored several alternatives to avoid privatization,

they had to face the inevitable reality of the privatization spectra. Since the axe had to

fall, the best approach adopted was to downsize with dignity and to ensure that those who

were let to go were equipped with new skills to enhance their career prospects. Also, the

author describes specific measures undertaken to achieve these twin goals and

enumerates the lessons learnt through these difficult times. (Ann E Feyerherm. (2005).

2.4.3 Coping With Privatization

Neela Radhika of the ICFAI University, Hyderabad, India, describes a new

phenomenon observed in the aftermath of privatization - Pink Slip Parties. It describes

how Pink Slip Parties came into practice and the reason for using the term `Pink Slip'.

The article elucidates the special features of these parties with respect to attendees, the

kind of music played during these parties, the color of wristbands or badges, message

boards, and activities. Pink Slip Parties offer a number of benefits to both job seekers,

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who had lost jobs on account of privatization, as well as the recruiters. The effectiveness

of these parties is analyzed vis-à-vis the nature of support gained by laid-off workers in

restarting their careers. The article also points to new developments in this area, such as

Layoff Lounges.

Mika Kivimäki and Jane E Ferrie. (2000) reports the results of a study conducted

to investigate the effect of the psychosocial work environment on employee health. This

study was conducted among 1,110 municipal staff in Raisio, Finland, between 1990 and

1995. It encompasses the period prior to privatization, during privatization, and when

privatization had slowed down. The privatization exercise was a reactive one, conducted

through retirement and hiring freezes, and letting go the temporary employees. Some of

the significant findings of the study are: privatization results in changes in work, socialrelationships, and health-related behaviors that lead to increase in certificated sickness

due to increases in physical demands, job insecurity, and reduction in job control;

sickness absence increases twofold in a major privatization as compared with sickness

absence during a minor privatization; privatization was associated with negative changes

in work, impaired support from spouse, increased prevalence of smoking, and sickness

absence. It has been found that this study was unique in the area of employee

privatization and employee health as it studied a natural experiment, which is rarely

feasible.

Jonathan Kelley. (2002) explains that the significance of privatization depends on

its long-term impact on workers. It presents a model to study the probability of re-

employment among workers shed by privatization firms as compared with those

departing from stable or growing firms. This model can also be used to examine the

impact of privatization on the duration of jobless spells, continuity or change in

occupation, on earnings, and on job satisfaction among workers who obtain employment.

The model combines three factors: re-employment by age, gender, and education.

Carl Van Horn and Laurie M Harrington of Rutgers Group of Companies. (2005)

offers glimpses of the consequences of involuntary job loss for workers and their

employers. It describes the evident patterns of worker dislocation: it affects both blue-

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collar and white-collar employees, workers of all races, ages, education levels,

occupations and industries; and it happens at very short notice (usually one week or less,

and many do not receive any advance warning). The report describes the impact of job

loss on individuals and their families, the most significant being emotional distress and

financial hardship. It delineates the differences in approaches by small and large firms.

Large firms offer more assistance and better severance pay as compared with smaller

firms. It also provides guidelines for employers, employees and policymakers to deal

with the consequences of job dislocation. The experience of privatization employees

during the last few years points to the need for employees to be prepared for a job loss at

any point of time in their career. This report also includes examples of effective practices

of a few companies to bring succor to the displaced workers.

2.5 Privatization and Employee Attitude

In today's competitive market, many companies have found that staying in

business means privatization. However, this everyday event in the business world is a

unique (hopefully) event for you and your employees.

2.5.1 Why Is this Important?

Privatization has become a common occurrence in today's business world.

Because of this, and many other factors, many employers and employees no longer

believe in the concept of lifetime employment. As a result, employers often

underestimate the need to provide support to employees, both those who are being

released and the 'survivors.' Many employers feel that the only support they can provide

is expensive outplacement services.

The decision to downsize is made for strategic and financial reasons. The

expectation is that the expense reduction will lead to a positive impact on the bottom line

and will ultimately be reflected in improved profitability and productivity. However,

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many organizations neglect to factor in the psychological impact of privatization on those

who remain. In fact, if privatization is handled improperly, the problems it was designed

to correct may be intensified due to the impact on the loyalty and attitudes of the

survivors.

2.5.2 Effects on Work Effort

In an attempt to determine the impact of privatization, the effects of job insecurity

and economic need to work on employee attitudes was examined by Brockner and his

colleagues in 1992. In this study, Brockner decided to use work effort as a measure of job

attitudes. The study found that high job insecurity coupled with high need to work,

resulted in increased work effort following a layoff. High job insecurity, coupled with

low need to work resulted in no change in the level of work effort. (Brockner, 1992).

This seems to indicate that when there are high levels of job insecurity, as would

be expected during privatization; employees with a high need to work will increase their

work effort, while those with a low need to work will have no change in work effort.

While this result is interesting, of more interest was the finding that variables moderated

this observed relationship. Specifically, Brockner found that the remaining employees'

perception of the fairness of the lay-off process and their attachment to the lay-off victims

colored their views. This issue of fairness has been found to be related to a number of

other work-related variables and has its roots in theories of organizational justice.

(Brockner, 1992).

2.5.3 The Justice Theory

Theories of organizational justice propose that people attend to the processes used

to determine outcomes as well as to the end result in determining "fairness." For example,

as Brockner's study reported, the remaining employees considered the way in which their

co-workers were treated during the privatization process as well as the outcome (i.e.,

losing their jobs). From this perspective, layoff survivors can be expected to exhibit the

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most negative reactions when they identify with the layoff victims, and feel the victims

have not been well compensated.

"When survivors perceived that those laid off had been dismissed with little or no

compensation, they reacted more negatively (from an organizational perspective) to the

extent that they felt some prior sense of psychological kinship with the laid-off parties."

(Brockner et al., 1987).

What Brockner's study would indicate is that employees are affected by more than

just the fact of layoffs. They are affected by how the layoffs are managed and by what is

done for the individuals in those positions. Brockner found that negative attitudinal

changes were reflected in survivors' reduced work performance and lowered commitment

to the organization. Conversely, the study showed that employee commitment can

actually increase during a layoff process when the company shows some commitment to

displaced workers.

The post-layoff setting provides organizations with a rather unique...situation in

which to express their commitment to employees; that is, if organizations show

commitment to their dismissed workers (through caretaking activities of providing

severance pay and outplacement counseling,)—even as they are in the process of becoming uncommitted to them by laying them off--the more committed to the

organization are survivors apt to be". Brockner's study indicates organizations can

proactively affect surviving employees' attitudes during periods of privatization. The next

section describes some steps that can be taken to minimize the negative effects of

privatization. (Brockner et al., 1987)

2.5.4 Strategies for Maintaining Positive Employee Attitudes

According to survey results from a study on employee loyalty conducted by

Industry Week, there are eight factors affecting employee loyalty. They are, in

descending order: equity, security, good management, integrity, empowerment, good

communications, benefits and personal support (McKenna, 1991).

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Privatization is a stressful time for employees, and is a time in which they will

question each of the eight factors mentioned in the above quote. By communicating with

employees, making them feel part of the organization, and working to restore loyalty, it is

possible to avoid some of the most dangerous pitfalls of privatization.

2.5.5 Communicate

During privatization, the losses due to decreased employee loyalty, morale and

lost productivity are compounded by the complexity of the layoff process. For example,

the rumor mill that develops, or intensifies, during the preliminary planning stages results

in employees spending significant amounts of time gossiping and worrying about what

may happen. Unfortunately, many managers in the position of being "in the know" areguided by a policy in which they are to avoid talking about rumors with employees.

While this policy may seem appropriate, the associated costs, in terms of lost

productivity and employee loyalty, may be significant. Communication will help to curb

the worry and re-direct employee energies to the job at hand (Fisher, 1988). "If you don't

know something, or you do know but SEC rules or other legal constraints have

momentarily sealed your lips, come out and say that. Silence is the worst policy" (Fisher,

1988). The most preferred method of communication is personal appearances from upper

management; however, any communication at all will be helpful. (Fisher, 1988).

Ensure that communications cover the following topics:

2.5.6 Make Valuable Employees Part of a Progressive Organization

To stay or not to stay? That is the question some remaining employees ask in the

aftermath of their company's privatization process—particularly those who have other

employment opportunities outside the company. When these employees see some top

managers leave voluntarily, they may question the long-term prospects for the company

and consider an immediate job change. This is something to watch out for, as the people

who leave under these circumstances are generally those with valuable skills and training.

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A former West Coast bank manager who left when he saw his manager leave

made this comment for an article in Fortune: "If you let people get the idea that the

company is not just cutting back but is sinking into mediocrity, morale really goes to

hell" (Fisher, 1988). This quotation highlights the importance of managing perceptions

with "positive press" and communication from upper management. Discuss the

privatization as a step towards a more efficient and profitable business with an attractive

future.

2.5.7 Rebuild Loyalty

Long after privatization is completed; continue communicating with employees to

re-build security and trust. Do not allow management to assume remaining employees are

merely grateful to still have jobs. Employees need to feel they are valued, that they have a

place in the company, and that management believes that they are an important part of the

success of the organization. To emphasize this point, talk about where the company is

headed, and describe any plans for growth and prosperity. (Trafimow, 2000)

2.6 Employee Morale In Privatization

2.6.1 Why Morale Matters

Of course employees will feel unsettled during privatization. However, just

accepting loss of morale as an inevitable consequence may undermine the very

productivity gains intended by the change. So employers should seek to minimize the

unwanted impact of privatization. They also need to recognize the extent to which the

manner of managing such change affects how employees feel about the change and their

future relationship with the company.

Privatization can threaten employees’ sense of well being in several ways. They

may see the company as having behaved unjustly or unfairly. They obviously feel less

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secure. They may also lose the belief that their contribution to the business will be

rewarded in future. These responses may easily threaten business performance.

Survivors of privatization can become unduly risk averse and narrowly focused, and

therefore less creative and open to change. (Christopher, M., Payne, A.F.T. Ballantyne,

D. 1991)

But ‘morale’ is not a simple concept. It consists of many facets and may be

manifest in many outcomes. These outcomes include:

whether employees stay with the organization

whether they achieve organizational or personal goals

whether they are able to adopt new working practices and learn new skills

how they respond to customers

It is a useful start to identify specific outcomes of morale which the organization

wishes to address. The organizations involved in the study suggested three common

strands to a strategy for influencing morale. They were the ability to:

anticipate likely employee response

identify interventions to impact morale

Monitor and evaluate morale and the impact of actions taken.

2.6.2 Anticipating Employee Response

A number of ‘risk factors’ were identified as indicating circumstances in which

privatization was most likely to hit morale. They included:

failure to convince the workforce that job reductions were necessary

apparent lack of clarity or unfairness in deciding on individual redundancies

lack of care over redundant staff

lack of alternative career development options if promotion becomes unlikely

21



changes which leave survivors unclear of what is expected of them, or how

they will acquire the new skills they may need

Managers who are unwilling or unable to provide adequate time and support

to individuals.

Anticipating impact also means understanding that individuals in different job

groups or career stages may respond differently to privatization. Although it is often

difficult to address interventions to particular workforce groups, they can sometimes be

tailored with varying needs in mind.

2.6.3 Interventions To Build Morale

It is difficult to target interventions with any precision to influence morale.

However, the participating organizations identified several broad kinds of action which

they saw as particularly relevant. Communicating with employees during privatization is

vital. Conveying the reasons for such a painful change is central. Employees need to

understand the business reason for reducing headcount, and how the change will be

managed. Breaks in communication are seen as sinister, and lead to rumors. Attempts to

deny the reality of the painful aspects of the change are seen as insensitive. So

communication has to be honest in dealing with the negative feelings of employees. It is

important to communicate throughout the period of change, not just at the beginning.

Giving direct support to the ‘survivors’ as well as the ‘victims’ of privatization

leads to other types of intervention. They may address such areas as Stress Management

and Careers Counseling. Organization Development initiatives may be used to try and

improve the effectiveness of the emergent organization. They may include work to

rebuild relationships between and within groups and departments, often through team

building activities. Enhanced access to training and work experience may be needed to

help staff adjust to new job demands.

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Performance Management often needs attention to ensure that staff feels that the

new demands are realistic in terms of the reduced staff resource. They also need to be

clear what is expected of them in the new organization. Reward strategies may also need

realigning, but there is a lack of clarity at present about the link between alternative

reward strategies and morale.

The employee’s relationship with their line manager may have a significant effect

on how well they cope with privatization. For line managers to support staff effectively at

a time of difficult change, they in turn have to feel as though they know how to handle

queries and problems. It can help for managers to share their concerns with their peers

and discuss how to deal with staff issues. Some companies use regular forums for

managers to do this throughout the change period, and avoid them feeling isolated.

(Clarke, M. and Payne, A.F.T. 1993)

2.6.4 Monitoring And Evaluation

Evaluating the success of attempts to influence morale during privatization is not

easy. There is a natural tendency not to want to ask people how they are feeling when you

expect negative responses. Also we know relatively little about cause and effect in the

area of morale. Ownership of the issue may be difficult to establish — senior

management itself often being in a state of flux during periods of privatization.

Many managers believe — or like to believe — that the general level of staff

morale is outside their control. There are indeed many limitations to controlling morale

including the variation in individual response, the impact on individuals of what they see

happening to other employees, and the variation in response over time. Separating the

impact of different interventions can be difficult, and privatization is seldom the only

organizational change going on. In spite of the difficulties of evaluating the impact of

specific responses on morale, organizations are using a range of measures to monitor

some of the outcomes of morale. For example, staff turnover, absence from work and

performance indicators (e.g. customer service) is often monitored numerically.

‘Softer’ measures of attitudes and perceptions of employees are obtained through

the increasing use of employee attitude surveys. These can be used both to identify

23



variations in response within the workforce, and track changing perceptions over time.

Managers need to understand how employees are feeling in their part of the organization

as well as in aggregate. Upward feedback is another way of collecting information on

employee morale and response to initiatives. It can also be used as a starting point for

improving relationships within teams in the wake of privatization. (Jackson, B.B. 1985).

2.7 Organizational Climate, Privatization & Employees

2.7.1 Organizational Climate

Litwin and Stringer define organizational climate as 'a set of measurable

properties of the work environment, perceived directly or indirectly by people who live

and work in this environment and assumed to influence their motivation and behaviour'.

Traditionally, organizational climate alms to capture a snapshot of an organization at

one point in time. Organizational climate research has had a long and active history,

with much of its foundation drawn from psychology. Because of space constraints and

the availability of excellent articles which review the extensive history of the

organizational climate literature, we will only briefly review the organizational climate

literature here.

Organizational climate is largely based on Lewinian field theory, which is a

result of Lewin's work on experimentally-created social climate, this work was

advanced by several early key studies including Litwin and Stringer and Tagiuri and

Litwin. Litwin and Stringer investigated how organizational climate affects individual

motivation. They also suggested that organizational climate was comprised of nine

dimensions: structure, responsibility, reward, risk, warmth, support, standards, conflict,

and identity. Taguiri and Litwin's book was comprised of a series of essays that treated

climate in ways ranging from a subjective interpretation of organizational

characteristics to an objective set of organizational characteristics. Other early studies

were aimed at identifying the dimensions comprising organizational climate. After the

1960s and early 1970s, the focus of the organizational climate field became more

24



clearly defined. More recently, organizational climate researchers have begun to

consider how organizational climates develop. Three schools of thought have

developed: the subjectivist, objectivist, and internationalist perspectives. (Litwin,

Stringer, Tagiuri, 1980)

Probably the most troubling issue that the organizational climate literature

continues to face is defining the appropriate dimensions that comprise organizational

climate. Organizational climate is a fairly general term which refers to a class of

dimensions which can be critiqued for being too diverse . In addition, the

multidimensional nature of organizational climate makes it more difficult to define

sharp borders. Organizational climate scholars have responded by making empirical and

theoretical arguments to distinguish organizational climate from various other const

ructs, such as structure and individual satisfaction. While these and other efforts have

been helpful, some fuzziness around the borders and differentiation of the

organizational climate construct still remains.

Research on organizational climate has continued more recently, including

Joyce and Slocum's study of person and organizational fit, Joyce and Slocum's

investigation of the extent to which organization members agree about their

organizational climate, Glick's discussion of the difficulties of measuring organizationalclimate, Denison's investigation of the relationship between organizational climate and

performance, and Koyes and DeCotis's work on measuring organizational climate. Even

more recently, Denison has investigated the difference between organizational culture

and organizational climate, and Griffin and Mathieu have looked at how perceptions of

organizational climate vary with the hierarchical level in an organization. Anderson and

West contributed to the literature by exploring the link between organizational climate

and innovation. (Joyce, Slocum, 2004)

2.7.2 Measuring Organizational Climate

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At its most basic level, organizational climate refers to employee perceptions of

their work environment. Generally, these perceptions are descriptively based rather than

value based. For example, the phrase, "I have more work to do than I can possibly finish"

is a description of a person’s workload, while the phrase "I like my job" is a positive

evaluation of one’s job. Thus, organizational climate is more than simply a summary of

employee likes and dislikes.

The assessment of organizational climate typically occurs via an off-the-shelf or

customized survey containing questions about the work environment. Although

administration procedures used when conducting a survey can vary, ideally employees

are asked to report to a designated work site at a scheduled time to complete the survey,

and employee participation is voluntary.

2.7.3 Selecting a Survey

Once a decision is made to conduct an organizational survey, it can be difficult to

identify the "right" survey to use. Although not a comprehensive list, the following

factors may be helpful in reducing the number of survey choices:

Determine the scope of information included in the survey. As might be imagined,

there are a large number of organizational climate areas that exist. Recent research has

identified more than 460 different types of work environment characteristics that have

been measured. Many of these characteristics can be classified into the following major

areas: job, role, leader, organization and work group. In many companies there are

particular areas where employee feedback would be useful. For example, a company

concerned about the impact of recent managerial privatization may want to ensure that

leadership/supervisory components are included in the survey.

Make sure the number of climate areas included is kept to a manageable level.

Not only will including too many areas on the survey increase the time and effort needed

to administer the survey, but it also can make the interpretation process more difficult. On

a related issue, many users of organizational surveys find it useful to add a few

customized items to the survey. Although adding items does not always add to the

26



scientific value of a survey, it can go a long way in generating support from the

company’s management team. (Ranaweera, C. Prabhu., 2003)

It can be extremely helpful to choose a survey that offers some flexibility in its

administration capabilities. For example, some companies may require the ability to

administer the assessment using a paper-and-pencil format, while others may prefer an

intranet format. Factors such as employee demographics can be important, also. Some

companies may require both an English and Spanish version of the survey to

accommodate all of their employees.

Finally, identify some general pieces of information you would like to see in a

report once the survey responses have been analyzed. For example, some companies may

have an interest in only reviewing the average levels of item responses within the

company, while others may want to see how the company scored compared to other

companies throughout the nation.

In addition, some companies may want to have results broken down department-

by-department or item-by-item while others may want one set of analyses based on the

entire set of employee responses. In any event, the publisher/director of an organizational

survey should assist a company in selecting an instrument that will meet their specific

reporting needs.

2.7.4 Benefits

Companies that conduct organizational climate surveys may experience one or

more of the following benefits:

Employee involvement- By administering an organizational survey, employees are

given an opportunity to be involved in the company at a different level than is

typically defined in their job descriptions. Research has shown that employees who

are more involved in the company also may be more satisfied with their job, miss

fewer days of work, stay with a company longer, and perform better on the job.

27



Positive work outcomes- In the last 30 years, a significant amount of evidence has

been accumulated documenting the importance of the work environment in relation to

organizational performance. In general, research has shown that factors in the work

environment are related to outcomes such as employee motivation, job satisfaction,

intentions to quit, job performance and even organizational productivity. In addition,

an emerging area of research has indicated that organizational climate can influence

customer perceptions of the quality of goods or services delivered by a company.

Communication forum- In many companies it can be very difficult to communicate

with the majority of employees. Recent trends such as organizational restructuring

and/or merging of companies has resulted in "flat" organizational responsibility

charts, which increases the number of employees for which each manager isaccountable. As a result, some managers only have limited amounts of time to talk to

employees about day-to-day activities. Conversations regarding an employee’s work

environment can fall to the wayside, and in some instances, never take place.

Organizational surveys that occur on a scheduled basis (e.g., annually, biannually,

etc.) can be a more efficient way for managers to gather important information.

Industry comparisons- Organizations often look to other companies when

determining organizational policies and procedures. It is quite common for companies

to "explore the market" or conduct benchmark studies when considering issues such

as new product development, salary or employee benefit policies, marketing

strategies, etc. A common question is "How do we compare to others?" One

advantage of conducting an organizational survey is that it can provide an opportunity

to compare the company’s work environment to that of other companies. Many

surveys offer a national normative database that can be used to facilitate comparisons

across a variety of conditions and industries.

Proactive management- Administering organizational climate surveys allows

managers to be much more proactive in managing their employees and work

environments. When used on a scheduled basis, organizational surveys can help

pinpoint problem areas within the work environment before they grow into a crisis

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needing immediate attention. Problems that require a reactive posture interrupt the

normal workflow, and typically cause delays in providing products or services to

customers.

2.8 Privatization & Employee Engagement

2.8.1 Employees Engagement

In today’s technologically advanced World, employees are aware of what services

should they deliver for a particular return from their employer. On the other side

employer has no choice but to satisfy his employees by identifying and fulfilling his

wants, the employer has to use the motivation theories as these provide a good idea of

how and in what way they will get motivated and satisfied. The above logic applies to

every industry whether it is politics, economics, technology or society. For instance, in a

society the same person who is an employee plays a role of a member of the family. His

duties are to control his children so that they do not get into a bad company and they

should concentrate on their studies. Now the same question comes How to motivate them

to study? Here the employee acts as an employer and the children act as his employees.

What Do Workers Want?

"Supervisors generally ranked good wages, job security, promotion and good,

working conditions as the things workers want from their jobs. While workers felt they

want most is full appreciation for work done, felling "in" on things, and sympathetic

understandings of personal problems -all incentives that seem to be related to affiliation

and recognition motives. It’s not only good money but there is lot of other needs, which

an employee wants to fulfill for being satisfied and committed towards the job.

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Employee engagement goes beyond the employees’ intent to leave. It includes the

employees’ commitment to the organization and motivation to contribute to the

organization’s success. By creating a workforce that is passionately involved with the

company, the organization can create a sustainable competitive advantage for itself. This

article throws light on the issues to be addressed by the organizations for creating an

engaged workforce. The evidence of a significant relationship between employee

engagement and financial performance is undeniable. Talking about the engagement and

commitment of an employee to an organization, most companies are of the opinion that

they do have a few, but they still want more. Why? It is merely because these companies

have come to the realization that their organization’s long-term success relies on

employee performance, which is directly impacted by the level of employee engagement

and commitment to an organization. Well, some organizations think that simply making

people happy and paying them handsome pay packets is the solution. But it is not so.

These are things which an organization need to consider to attract and retain the

most qualified individuals, however, when it comes to engaging employees in their work,

there are definitely some more issues that need to be worked out. Engagement requires

engaging not only the employees’ minds but their hearts as well and this is something

that the organizations can neither force not buy in order to succeed in the marketplace.

What is employee engagement?

An engaged employee is a person who is fully involved in and is enthusiastic

about, his or her work. Such employees are attracted to, and inspired, committed and

fascinated by their work. In a recent research by Hewitt Associates, it was found that

engaged employees are not only intellectually committed to the organization but are also

emotionally attached to it, as is measured by three primary behaviors: Say, stay and

strive.

The age old business dictum goes that “satisfied employees create satisfied

customers” by constantly striving for the best, contributing to the bottom line of the

30



company success by their motivation and enhanced performance. It is believed that an

engaged employee always acts positively in the interest of the company and takes

unconcealed pride in the success and prosperity of his employer.

Does Engagement Really Make a Difference?

According to the former GE Chairman and CEO, Jack Welch, a company’s health

is determined through it’s energized workforce who not only realize the mission of the

organization and have an understanding of how to achieve it, help the organization win inthe long run. Engaged employees care about the future of the company and are willing to

study entitled, The War for talent, reported that a shortage of skilled employees was an

emerging trend and it was more so due to the fact that the organizations fail in their

attempts to create a workforce that is not only cognitively vigilant but also emotionally

connected to the organization.

Research has proven that wholly engaged employees tend to be more self-

motivated, reliable, and have higher levels of organizational loyalty. They are capable of

delivering sustained affecting the key results areas such as employee turnover, sales,

innovation and customer satisfaction, engaged employees in customer facing roles are

more likely to treat customer is ways that positively influence customer satisfaction and

are more than twice as likely to be company advocates. They share information with

colleagues and pass on ideas that speak up for the organization. Engaged employees are

much more likely to feel secure and stable in their position and are in fact the

ambassadors for the company, singing its praises to everyone, and taking the best foot

forward to deliver and over-deliver for customers and the colleagues alike.

How to measure employee engagement?

31



To determine the level of employee engagement, the organizations should make

use of a comprehensive employee feedback and to improve levels of productivity and

commitment by identifying the root causes of workplace attitudes. They also help in

developing an understanding of the extent to which employees are passionate about their

work and emotionally committed to their company and to their co-workers.

There are several standardized tests, toolkits and instruments available which can

help determine the level of employee engagement in an organization. survey of the

Gallup Organization Identifies strong feelings of employee engagement in four key areas

– customer satisfaction / loyalty, profitability, productivity and employee turnover. The

questionnaire has been administered to a multitude of companies across the world.

Results from the survey show a strong correlation between high scores and superior job

performance and many organizations have found it to be a definitive measure of the

engagement level of their employees. Standard Chartered, for example, introduced annual

survey to measure improvement in the engagement of teams. The results are used to

develop action plan and continually monitor the follow-through of the teams. This focus

has seen a continuous rise in both the number of engaged teams and extent to which the

employees are engaged at Standard Chartered.

Many organization use employee satisfaction survey to identify the root causes of

job issues and create solutions for improvements with due consideration given to the

viewpoints of employees. Certain employee opinion surveys are also in practice that

offers accurate identification of employee behaviors, feelings, and thoughts for improved

organizational development. The other ways used to measure the employee engagement

levels is through tracking changes in the attrition rate and growth in productivity and

business. The data collected from these surveys can furnish information that can help the

management in the following ways:

Identifying cost-saving opportunities

Improving productivity

Reducing turnover

Curbing absenteeism

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Strengthening supervisor

Evaluating customer – service issues

Assessing training needs

Streamlining communication

Benchmarking the organization’s progress in relation to the industry

The surveys must also be integrated with the culture survey s and since the culture

varies within the organization, the companies must aim at measuring the engagement at

work group level. The organization also needs to keep in mind that it is not just about the

surveys; whatever follows is of great importance. After evaluating the results from these

surveys it is imperative for the management to work out the problem areas and take an

appropriate action. Many a times it so happens that the good news is communicated

expeditiously to all concerned but the key challenges tend to be avoided. This makes the

employees feeling unheard, thus leading to resentment and this poses a significant threat

to engagement levels within the organization.

2.9 Privatization -- The Long Term Effects

Originally written about privatization within the public sector, the points in this

article are no less applicable to any organization that is forced to undergo privatization.

Interestingly enough, almost all surveys and research examining the long term effects of

privatization indicate that companies that downsized ended up disappointed in the results.

Layoffs may serve a short term need, but create huge longer term issues. Few government

departments or branches have escaped the necessity of privatization. The last three or

four years have brought almost constant cuts in staffing, and some departments have been

"hit" several times. When managers are faced with privatization, they tend to focus on the

immediate and practical needs that emerge at the time when staff are being let go. After

all, employees need to be selected and notified, one of the most difficult tasks for any

manager. Jobs responsibilities need to be shuffled, and generally the period where

33



privatization is occurring is very busy and emotionally taxing. (Salant,P., Dillman

D.A.,1994)

Unfortunately, there is a tendency for managers to focus on those that are leavingrather than those that remain. This also holds true for central training and consulting

agencies who are asked to support the laid off employees with career development help,

counseling, and other supports. There is no question that laid off employees deserve and

need these kinds of supports and services. Unfortunately, there is a tendency to forget that

after the laid-off workers are gone, the "survivors" must soldier on, and the manager must

deal with the long-term effects on the remaining organization. We are now seeing the

effects of privatization on those that remain. One of the most telling comments is often

put forth by employees a year or two after privatization, and it goes like this: "Sometimes

I think that the ones who were laid off are the lucky ones". They usually go on to describe

a workplace where employees feel:

Proactive management activities are always required when privatization occurs.

Managers must realize that they "can pay now or pay later", and that delaying

actions designed to revitalize the organization will result in a huge cost down the

road. Managers should consider that the period immediately after privatization is

critical. Action or inaction during this period will determine whether the

organization moves into a depressed down cycle, or makes the commitment to

move forward. Privatization time should also be a time when the organization's

mandate and vision are revisited. It should be a time when the manager dedicates

him/herself to the long-term health of the organization by clarifying, supporting

and building trust. Above all, this is the time where the manager's prime

responsibility is to communicate, both with staff, and with executives. One focus

of communication should be clarifying mandate, vision, priorities andcommitment levels.

Proactive long-term approaches should also be applied by any central agencies

charged with "helping" privatization organizations. Support should be offered to

those that are displaced, but, in the long term, help offered to "survivors" will be

much more important in determining organizational health. As a manager, ask, or

34



demand that these services be made available by central agencies, or procure them

from private vendors, if the central agency won't do the job.

If you are in the unfortunate position of managing an organization that is "down

cycling", you need to be aware of two things. First, it will get worse if neglected.

Second, interventions to turn the cycle around must be considered as long-term

projects. One shot consulting or training isn't going to do much, and it may be

damaging. Remember that your organization may have been moving downward for

a year or two, and that it is going to take a substantial period of time to reverse the

process. Positive change will require a consistent effort on your part, and may

require consulting help over a period as long as a year. Your work success hint!

Did you know that a high percentage of conflict at work and at home is a result of

ineffective use of language? It's true. The best part is that you can learn to alter

your communication and language so that what you say is perceived as more

cooperative, and less confrontational. The result, Less conflict incidents and less

severe conflicts. (Voss, G.B., A. Parasuraman, and D. Grewal, 1998)

2.9.1 Model of Planned Organizational Privatization

Change can be managed. By observing external trends, patterns and needs,

managers use planned change to help the organization to adapt to external problems and

opportunities. When organizations are caught flat footed, failing to anticipate or respond

to new needs, management is at fault.

Four events make up the change sequence:

Internal and external forces for change exist

Organization managers monitor these forces and become aware of a need for

change; and

The perceived need triggers the initiation for change, which

Is then implemented.

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Forces For Privatization

Forces for organizational change exist both in the external environment and within the

organization.

Environmental Forces

External forces originate in all environmental sectors, including customers, competitors,

technology, economic forces, and the international arena.

Internal Forces

Internal forces for change arise from internal activities and decisions. If top managers

select a goal of rapid company growth, internal actions will have to be changed to meet

that growth.

2.9.2 Steps For Effective Organizational Change

The four steps for organizational change process are as follows:

Assess the need for Privatization

Initiate Privatization

Implement Privatization

Evaluate the Privatization

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Figure 2.1: Steps for Organizational Changes, Source: (Triandis, H.C., 1971)

Assessing the need for the Privatization

The external and internal forces translate into a perceived need for change within

the organization. Managers sense a need for change when there is a performance gap —a

disparity between existing and desired performance levels. The performance gap may

occur because current procedures are not up to standard or because a new idea or technology could improve current performance.

Managers in every company must be alert to problems and opportunities, because

the perceived need for change is what sets the stage for subsequent action that creates a

new product or technology. Big problems are easy to spot. Sensitive monitoring systems

are needed to detect gradual changes that can fool managers into thinking their company

Assess the need

Recognize thatthere is a problem

Identify thesource of the

problem

Initiate

Privatization

Decide whatorganizationsideal future

state would be

Implement

Privatization

Introduce thechange

37

Evaluate the

Privatization

Compare prechange

performancewith postchange

performance



is doing changes slowly, because managers may fail to trigger an organizational response.

Initiating Privatization

After the need for change is perceived, the next part of the change process is

initiating change, a truly critical aspect of change management. This is where the ideas

are developed.

Search

Search is the process of learning about current developments inside or outside the

organization that can be used to meet the perceived need for change. Search typically

uncovers existing knowledge that can be applied or adopted within the organization.

Manager’s talk to friends and colleagues, read professional reports, or hire consultants to

learn about ideas used elsewhere.

Creativity

Creativity is the development of novel solutions to the perceived problems.Creative individuals develop idea that can be adopted by the organization.

Each of us has the capacity to be creative. Creative people are often known for

originality, open-mindedness, curiosity, a focused approach to problem solving,

persistence, a relaxed and playful attitude, and receptive to new ideas.

Creativity can be designed into organizations. Companies or departments within

companies can be organized to be creative and initiate changes.

Idea Champions And New-Venture Teams

If creative conditions are successful, new ideas will be generated that must be

carried forward for acceptance and implementation. This is where idea champions come

38



in. The formal definition of the idea champion is a person who sees the need for and

champions productive change within the organization. Personal energy and effort are

required to successfully promote a new idea. Often a new idea is rejected by the

management. Champions are passionately committed to a new product or idea despite

rejection by others.

Implementing Privatization

Creative culture, idea champions and new-venture teams are ways to facilitate the

initiation of new ideas. The other step to be managed in the change process is

implementation. A new, idea will not benefit the organization until it is in place and

being fully utilized. One frustration for managers is that employees often seem to resist

change for no apparent reason. To effectively manage the implementation process,

managers should be aware of the reason for employee resistance and be prepared to use.

Techniques for obtaining employee cooperation are:

Resistance To Privatization

Idea champion often discover that other employees are unenthusiastic about their

new idea. Members of a new-venture group may be surprised when managers in the

regular organization do not support or approve their innovations. Several reasons for

employee resistance are:

Self-Interest

Employees typically resist a change they believe will take away something of

value. A proposed change in job design, structure, or technology may lead to a perceived loss of power, prestige, pay, or many company benefits. The fear of

personal loss is perhaps the biggest obstacle to organizational change.

Lack Of Understanding And Trust

Employees often do not understand the intended purpose of a change or distrust

the intentions behind it. If the previous working relationships with an idea

39



champion have been negative, resistance may occur.

Uncertainty

Uncertainty is the lack of information about future events. It represents a fear of

the unknown. Uncertainty is especially threatening for employees who have a low

tolerance for a change and fear the novel and unusual.

Different Assessment And Goals

Another reason for resistance to change is that people who will be affected by

innovation may asses the situation differently from an idea champion or new-

venture group. Managers in different departments pursue different goals and an

innovation may detract from performance and goal achievement for some

departments. The reasons for resistance are legitimate in the eyes of employees

affected by the changes. The best procedure for managers is not to ignore

resistance but to diagnose the reasons and design strategies to gain acceptance by

users. The strategies for overcoming resistance to change typically involve two

approaches: the analysis of resistance through the force field technique and the

use of selective implementation tactics to overcome resistance.

Force Field Analysis

It’s the process of determining which forces drive and which resist a proposed

change. To implement a change, management should analyze the change forces. By

selectively removing forces that restrain change, the driving forces will be strong enough

to enable implementation. As restraining forces are reduced or removed, behavior will

shift to incorporate the desired changes.

Implementation Tactics

The other approach to managing implementation is to adopt specific tactics to

overcome employee resistance. The following five tactics have proven successful:

40



Communication and Education. Communication and education are used when

solid information about the change is needed by users and others who may resist

implementation. Education is especially important when the change involves new

technical knowledge or users are unfamiliar with the idea.

Participation. Participation involves users and potential resisters in designing the

change. This approach is time consuming, but it pays off because users

understand and become committed to the change.

Negotiation. Negotiation is more formal means of achieving cooperation.

Negotiation uses formal bargaining to win acceptance and approval of a desired

change.

Coercion. Coercion means that managers use formal power to force employees to

change. Resisters are told to accept the change or lose rewards or even their jobs.

Coercion is necessary in crisis situation when a rapid response is urgent.

Top Management Support . The visible support of top management also helps

overcome resistance to change. Top management support symbolizes to all

employees that the change is important for the organization.

Evaluating The Privatization

The last step in the change process is to evaluate how successful the change effort

has been in improving organizational performance. Using measures such as changes in

market share, profits, or the ability of manages to meet their goals, managers compare

how well an organization is performing after the change with how well it was performing

before. Managers also can use benchmarking, comparing their performance on specific

dimensions with the performance of high-performing organizations to decide how

successful the change effort has been.

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2.9.3 Types of Planned Privatization

Now that we have explored how the initiation and implementation of change can

be carried out, let us look at the different types of change that take place in organizations.

The types of organization changes are strategy, technology, products, structure, and

culture/ people. Organizations may innovate in one or more areas, depending on internal

and external forces or change. In the rapidly changing toy industry, a manufacturer has to

introduce new products frequently. In a mature, competitive industry, production

technology changes are adopted to improve efficiency.

Figure 2.2: Types of Planned Privatizations, Source: (R.E. Cacioppo, J.T. 1997)

In the diagram, the arrows connecting the types of change show that a change in

one part may affect other parts of the organization: a new product may require changes in

technology, and a new technology may require new people skills or a new structure.

Technological Privatization

A technology Privatization is related to the organization’s production process—

how the organization does its work. Technology changes are designed to make the

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production of a product or service more efficient.

How can managers encourage technology privatization?

The general rule is that technology change is bottom up. The bottom-up approach

means that ideas initiated at lower organization levels and channeled upward for

approval. Lower level technical experts act as idea champions—they invent and

champion technological changes. Employees at lower levels understand the technology

and have the expertise needed to propose changes.

Managers can facilitate the bottom-up approach by designing creative

departments. A loose, flexible, decentralized structure provides employees with the

freedom and opportunity to initiate continuous improvements. A rigid, centralized,

standardized structure stifles technology innovation. Anything managers do to involve

the grass roots of the organization—the people who are experts in their parts of the

production process—will increase technology change. (R.E. Cacioppo, J.T. 1997)

New-artifact Privatization

A product privatization is a change in the organization’s product or service

output. New-product innovations have major implications for an organization, because

they often are an outcome of a new strategy and may define a new market. The

introduction of a new product is difficult, because it not only involves a new technology

but also must meet customers’ needs. Companies that develop new products usually have

the following characteristics:

People in marketing have a good understanding of customer needs

Technical specialists are aware of recent technological developments and make

effective use of new technology

Members from key departments—research, manufacturing, marketing—cooperate

in the development of new product.

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These findings mean that the ideas for new products typically originate at the

lower levels of the organization just as they do for technology changes. One approach to

new product innovation is called the horizontal linkage model. In this model people from

research, manufacturing and marketing departments meet frequently in teams and task

forces to share ideas and solve problems. Research people inform marketing of new

technical developments to learn whether they will be good to customers. Marketing

people pass customer complaints to research to use in the design of new products.

Manufacturing informs other departments whether a product idea can be manufactured

within costs limits. This teamwork required for the horizontal linkage model is a major

component of using rapid innovation to beat the competition with speed.

Structural Privatization

A structural privatization is a change in the way in which the organization is

designed and managed. Structural changes involve the hierarchy of authority, goals,

structural characteristics, administrative procedures, and management systems. Almost

any change in how the organization is managed falls under the category of structural

change.

Successful structural change is accomplished through a top-down approach,

which is distinct from technology change (bottom up) and new products (horizontal).

Structural change is top down because the expertise for administrative improvements

originates at the middle and upper levels of the organization. The champions for

structural change are middle and top managers. Lower-level technical specialists have

little interest or expertise in administrative procedures. If organization structure causes

negative consequences for lower-level employees, complaints and dissatisfaction alert

managers to a problem. Employee dissatisfaction is an internal force for change. The

need for change is perceived by higher managers, who then take the initiative to propose

and implement it. (R.E. Cacioppo, J.T. (1997).

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The top-down process does not mean that coercion is the best implementation

tactic. Implementation tactics include education, participation, and negotiation with

employees. Top-down change means that initiation of the idea occurs at upper levels and

is implemented downward. It does not mean that lower-level employees are not educated

about the change or allowed to participate in it.

Culture/People Privatization

A culture/people privatization refers to a change in employees’ values, norms,

attitudes, beliefs, and behavior. Changes in culture and people pertain to how employees

think; these are changes are in mindset rather than technology, structure, or products.

People change pertains to just a few employees, such as when a handful of middle

managers is sent to a training course to improve their leadership skills. Training is the

most frequently used tool for changing the organization’s mindset. A company may offer

training programs to large blocks of employees on subjects such as teamwork, listening

skills, quality circles, and participative management. (R.E. Cacioppo, J.T. (1997)

“Top 10” list of guiding principles for privatization management, some of steps that the

company can take:

1. Address the “human side” systematically

2. Start at the top

3. Involve every layer

4. Make the formal case

5. Create ownership

6. Communicate the message

7. Assess the cultural landscape

8. Address culture explicitly

9. Prepare for the unexpected

10. Speak to the individual

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1. Address the “human side” systematically. Any significant transformation creates

“people issues.” New leaders will be asked to step up, jobs will be changed, new skills

and capabilities must be developed, and employees will be uncertain and resistant.

Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results

at risk. A formal approach for managing change — beginning with the leadership team

and then engaging key stakeholders and leaders — should be developed early, and

adapted often as change moves through the organization. This demands as much data

collection and analysis, planning, and implementation discipline as does a redesign of

strategy, systems, or processes. The change-management approach should be fully

integrated into program design and decision making, both informing and enabling

strategic direction. It should be based on a realistic assessment of the organization’s

history, readiness, and capacity to change.

2. Start at the top. Because change is inherently unsettling for people at all levels of an

organization, when it is on the horizon, all eyes will turn to the CEO and the leadership

team for strength, support, and direction (govt. in case of PTCL). The leaders themselves

must embrace the new approaches first, both to challenge and to motivate the rest of the

institution. They must speak with one voice and model the desired behaviors. The

executive team also needs to understand that, although its public face may be one of

unity, it, too, is composed of individuals who are going through stressful times and need

to be supported. Executive teams that work well together are best positioned for success.

They are aligned and committed to the direction of change, understand the culture and

behaviors the changes intend to introduce, and can model those changes themselves.

3. Involve every layer. As transformation programs progress from defining strategy and

setting targets to design and implementation, they affect different levels of the

organization. Change efforts must include plans for identifying leaders throughout the

company and pushing responsibility for design and implementation down, so that change

“cascades” through the organization. At each layer of the organization, the leaders who

are identified and trained must be aligned to the company’s vision, equipped to execute

their specific mission, and motivated to make change happen.

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4. Make the formal case. Individuals are inherently rational and will question to what

extent change is needed, whether the company is headed in the right direction, and

whether they want to commit personally to making change happen. They will look to the

leadership for answers. The articulation of a formal case for change and the creation of a

written vision statement are invaluable opportunities to create or compel leadership-team

alignment.

Three steps should be followed in developing the case: First, confront reality and

articulate a convincing need for change. Second, demonstrate faith that the company has

a viable future and the leadership to get there. Finally, provide a road map to guide

behavior and decision making. Leaders must then customize this message for various

internal audiences, describing the pending change in terms that matter to the individuals.

5. Create ownership. Leaders of large change programs must over perform during the

transformation and be the zealots who create a critical mass among the work force in

favor of change. This requires more than mere buy-in or passive agreement that the

direction of change is acceptable. It demands ownership by leaders willing to accept

responsibility for making change happen in all of the areas they influence or control.

Ownership is often best created by involving people in identifying problems and crafting

solutions. It is reinforced by incentives and rewards. These can be tangible (for example,

financial compensation) or psychological (for example, camaraderie and a sense of

shared destiny).

6. Communicate the message. Too often, change leaders make the mistake of believing

that others understand the issues, feel the need to change, and see the new direction as

clearly as they do. The best change programs reinforce core messages through regular,

timely advice that is both inspirational and practicable. Communications flow in from the

bottom and out from the top, and are targeted to provide employees the right information

at the right time and to solicit their input and feedback. Often this will require over

communication through multiple, redundant channels.

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7. Assess the cultural landscape. Successful change programs pick up speed and

intensity as they cascade down, making it critically important that leaders understand and

account for culture and behaviors at each level of the organization. Companies often

make the mistake of assessing culture either too late or not at all. Thorough cultural

diagnostics can assess organizational readiness to change, bring major problems to the

surface, identify conflicts, and define factors that can recognize and influence sources of

leadership and resistance. These diagnostics identify the core values, beliefs, behaviors,

and perceptions that must be taken into account for successful change to occur. They

serve as the common baseline for designing essential change elements, such as the new

corporate vision, and building the infrastructure and programs needed to drive change.

8. Address culture explicitly. Once the culture is understood, it should be addressed asthoroughly as any other area in a change program. Leaders should be explicit about the

culture and underlying behaviors that will best support the new way of doing business,

and find opportunities to model and reward those behaviors. This requires developing a

baseline, defining an explicit end-state or desired culture, and devising detailed plans to

make the transition.

Company culture is an amalgam of shared history, explicit values and beliefs, and

common attitudes and behaviors. Change programs can involve creating a culture (in new

companies or those built through multiple acquisitions), combining cultures (in mergers

or acquisitions of large companies), or reinforcing cultures (in, say, long-established

consumer goods or manufacturing companies).

9. Prepare for the unexpected. No change program goes completely according to plan.

People react in unexpected ways; areas of anticipated resistance fall away; and the

external environment shifts. Effectively managing change requires continual

reassessment of its impact and the organization’s willingness and ability to adopt the next

wave of transformation. Fed by real data from the field and supported by information and

solid decision-making processes, change leaders can then make the adjustments

necessary to maintain momentum and drive results.

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10. Speak to the individual. Change is both an institutional journey and a very personal

one. People spend many hours each week at work; many think of their colleagues as a

second family. Individuals (or teams of individuals) need to know how their work will

change, what is expected of them during and after the change program, how they will be

measured, and what success or failure will mean for them and those around them. Team

leaders should be as honest and explicit as possible. People will react to what they see

and hear around them, and need to be involved in the change process. Highly visible

rewards, such as promotion, recognition, and bonuses, should be provided as dramatic

reinforcement for embracing change. Sanction or removal of people standing in the way

of change will reinforce the institution’s commitment.

Most leaders contemplating change know that people matter. It is all too tempting,however, to dwell on the plans and processes, which don’t talk back and don’t respond

emotionally, rather than face up to the more difficult and more critical human issues. But

mastering the “soft” side of change management needn’t be a mystery. (R.E. Cacioppo,

J.T. (1997).

2.10 Privatization in HBL & Conflict Management.

Major Type of Conflict In HBL

Most of the major conflicts in HBL belong to the category of policy driven

conflicts. After privatization of HBL, it had a major change in its structure and policies.

This change was necessary to overcome key problems associated with the structure of the

public owed company such as:

Over Staffing

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HBL before privatization had more than 31000 employees, management and non-

management, they aimed to reduce this number to 27000 employees with the help of its

new policies.

Political Pressure

Before privatization HBL was highly influenced by the governmental policies as it was

the largest financial institute under government control. The economic policies of the

country were also affecting the bank’s policies. The problem occurred mainly because of

the unstable political situation in Pakistan which was causing the huge fluctuations in

governmental policies resulting in the inconsistency of HBL’s policies which led to the

inefficient results. The motive of privatization was to make HBL as independent as

possible.

The Conflict

Drastic transformation from public owned to private company gave origin to resistance

from the employees as a sudden change in structure was unacceptable to them as they

were used to work with previously defined policies and system. It was hard for the

employees to accept the new policies and overall system, they resisted as they felt that

new policies were not employee friendly and this clash of interest ultimately resulted in

conflicts.

Example: HBL’s re-entrenchment program was one of the bones of contention between

the employees and the management. HBL’s aim was to create space for more non

operational non clerical, technology savvy staff to generate more effectiveness they

aimed to remove the permanent clerical staff and get them on contractual basis. This

sudden change generated the feeling of uncertainty and disrespect among the employees

and resulted in a huge retaliation. HBL however provided them with compensation,

packages and even provided them new jobs in other organizations but despite these

efforts to gain the satisfaction of employees failed to gratify employees and there are still

few cases in litigation.

Other issue

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In 2002: HBL employees perceived that it is their right that their child / children get

employed at HBL but HBL followed merit based system and they were interested in

hiring skilled employees to satisfy the company’s as well as stake holders’ expectations.

2.10.1 Dispute Resolution Process

Negotiation:

The Senior Vice President of Human Resource Management and Head of

disciplinary department, Mr. Amin-ul-Huda Khan undertake the negotiation process. The

representatives of the affected department approach Mr. Amin- ul – Huda and put

forward their point of view that usually is against the management. Mr. Amin uses his

experience and expertise to minimize the conflict and to achieve the BATNA (Best

Alternative To a Negotiated Agreement). He makes the employees agree to most of his

demands if not all he drags the employee to agree on two or three points at least by

making employees compromise on most of the issues. His preference remains that

management by any means should not compromise and if incase he fails to do this he

moves to the next phase that is of mediation.

Mediation:

Despite trying hard, when the negotiation process fails HBL goes for the

mediation process, where the role of an effective, neutral mediator comes in who acts as a

communication bridge between the management and the employees. Usually the

mediator is in HBL is a trusted manager popular amongst both employees and managers

HBL’s mediation process can be broadly divided into the following three stages:

Stage 1: Introduction and establishment of credibility:

During the first stage, the mediator plays a passive role. The main task is to gain the trust

and acceptance of the conflicting parties, so that they begin to believe that he/she will be

capable of assisting them fairly as a person on whom they can rely at all times for this

purpose HBL chooses a mediator with the mutual consent of employees and the

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management. Mediator in HBL is usually an internal, neutral person trusted by both

management and employee. He leaves most of the talking to the disputing parties, but

listens attentively and asks probing questions to pinpoint the causes of the dispute,

obstacles to a possible settlement and to identify the issues in order of priority. Once

credibility is achieved and sufficient background knowledge gained, the mediator may

begin to persuade the parties to resume negotiations, possibly with a fresh perspective.

Stage 2: Steering the negotiation process:

In the second stage, the mediator intervenes more actively in steering the negotiations.

He/she may offer advice to the parties, attempt to establish the actual resistance point of

each party and to discover areas in which compromises could be reached. The mediator

encourages parties to put forward proposals and counter-proposals and (when a solution

appears feasible) will begin to urge or even pressurize the participants towards

acceptance of a settlement.

Stage 3: Movement towards a final settlement:

In the final settlement the mediator decides to finish the matter quickly, he/she uses bi-

lateral discussions with individuals or groups and during the final stages may actually

suggest or draft proposals for consideration. In the event of a final settlement being

reached, the mediator assists the parties in the drafting of their agreement, ensuring that

both sides are satisfied with the wording, terms and conditions of the agreement.

Arbitration:

When even mediation fails to work for HBL it goes for arbitration. The delay in

court cases has always been a source of concern to HBL as this impacts the enforceability

of contracts. As most of the conflicts are policy driven HBL’s utmost priority is to

enforce those policies on employees at any cost and without compromising when all the

methods fail to achieve this purpose, HBL goes for arbitration with the consent of

employees and make them realize that it was important for the benefit of organization.

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Arbitration is used in HBL because arbitration awards are generally easier to enforce than

court judgments.

Litigation:

HBL has lawyers who take care of its legal formalities. HBL believes that even if

the conflict gets failed to resolve and the employees file a lawsuit against them the

management is least bothered about it because it believes that employees don not have

enough resources to fight in the court where as HBL pays a fee of about 400000 Rs to

their designated lawyers who are expert in dragging the time of the hearing and making

employees willingly take the case back. According to Mr. Amin ul Huda they still have

cases in litigation and none of them yet got resolved or turned out in the favor of

employees.

2.10.2 Problems In Dispute Resolution Process At Habib Bank Ltd

Having a conflict is not anything uncommon in an organization being a system

comprising of many parts and subsystems that are all interlinked and interconnected. In a

multinational like Habib Bank ltd, the enormous level of activity giving rise to one or the

other major or minor conflicts in forms of either functional or counterproductive cannot be ignored. However, since functional conflicts do not need any treatment with a

resolution process they are the destructive ones that actually demand such a process and

above all effective management of that very process too.

Habib bank is an organization comprising of various branches and networks thus

conflict at each level is unpredictable and hard to surface without proper management

intervention. But while analyzing their dispute resolution system, various bottlenecks and

hindrances were found that actually make initially the application of such a process and

then the effective result of it to spread and bring benefit for the organization in the future.

There are a variety of problems that were explored while analyzing the dispute resolution

process at HBL.

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Failing To Minimize The Overall Level Of Conflict

Firstly, the resolution process although aimed at minimizing the overall level of

conflict but it was not fulfilling its purpose and was not able to minimize the overall level

of conflict giving rise to other more severe conflicts. Therefore, it can be said that the

resolution process did not completely satisfy the interests of all the parties and when at

one hand it managed to satisfy one stakeholder, left dissatisfactory results for others or

the organization itself. Example at the time when organization made a decision to go for

privatization, their major concern was to make redundant lower level staff i.e. drivers,

peons etc to hire a better, more skilled personnel at the same rate so that they can offer

more to the organization since the lower level staff was being hired at a rate far above the

market rate increasing costs for the organization.

Lack Of Pre And Post Dispute Analysis:

HBL lacks a pre and post dispute resolution analysis this means that there is no

analysis or interpretation of where the organization wanted to be and where it actually is

after implementation of the process of resolution and there were no proper guidelines

giving directions to take about the conflict resolution process. Hence, this resulted in

failure in having effective resolution process and there was no proper comparison or

evaluation of whether the organization has achieved its desired state can be done giving a

rather blur picture to both employees and management and leaving them confused about

whether implementing such a process is cost and time worthy in the future since they do

not know the pros and cons of this system.

For example, when HBL decided to downsize and make certain employees quit,

they were not completely sure of whether doing so is likely to give them the desired

outcomes rather they were just hitting the ball blindfolded and simply hoped to achieve

what they want .furthermore, when HBL went towards retrenchment, and successfully

but with great difficulty achieved it, managers did not do any proper formal analysis with

the top executives of what were the difficulties they faced and how to make sure they do

54



not reappear in the future when they take such a crucial action. Also, there was no

evaluation of results the conflict appearing from retrenchment brought to them.

Moreover, no analysis of how to implement safety measures to avoid facing the same

conflict again was done.

Resolution Process Caused Even More Conflicts

Apart from this, the resolution process instead of satisfying all the affected parties

at the end brought more dissatisfaction and complaints at its end making managers feel

the loss of time HBL have invested while engaging in resolving conflicts when at the end

it brought no fruitful results for either the employees or HBL.

Failed To Foster Long Term Relationship

As the process did not manage to satisfy all or most of the parties and caused

more conflicts in return, it became a basis for more personal conflicts among individuals

which adversely affected the work relationships and the organization’s productivity as a

result. Therefore, the process did not promise to foster effective long term relationships

among colleagues giving rise to feelings of hatred and emotional disparity amongemployees in the same department or between an employee and manager.

Example, in the case of HBL’s formal dress code policy, the manager pointed out

an individual in front of his junior colleagues making him feel insulted and hating the

manager for doing so, causing him to feel demoralized to perform any task given by the

manager with eagerness and finding ways to back bite and bad mouth the manager with

other employees.

Difficulty In Challenging Management

The dispute resolution at HBL does not assure management that employees can

safely and effectively challenge management. This is because such an act is not possible

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with employees who do not have enough resources or power to raise a voice making

them insecure of their own jobs. moreover employees have a great degree of fear in their

minds of authoritative management situation which does not aim at collaboratively

discussing issues and then implementing an offer or demand rather just order employees

in shape of surprises or written messages .Therefore, employees do not have a say in their

own organization and this fear and lack of understanding with HBL’s management leave

most of the conflicts un surfaced and unresolved portraying a fake picture of happy and

content employees towards management.

Lack Of Employee Empowerment

Because employee empowerment was lacking, the employees do not feel the need

to contribute towards the organization benefit and just work for the sake of securing their

jobs, positions and dignity among others since raising a voice means openly exposing

themselves to chances of being dismissed or transferred.

Lack Of Effective Communication

Lack of Effective communication is another problem that makes disputeresolution at HBL inappropriate and unsatisfactory. A classic example was seen at two

events.

Firstly, due to lack of communication in HBL among departments regarding the

code of ethics and specifically organizational culture, most managers of HBL Sukkur

branch, were being seen to wear shalwar kurta and having tea while sitting on the floor

giving rise to an immediate clash of opinion between the directors and those managers.

Therefore, no or miscommunication left un-uniformity among the different branches of

the same bank.

Secondly, on the occasion of employee redundancy due to privatization,

employees got mixed messages of them being departed from their organization in the

form of rumors and ‘grapevine’. Hence, this resulted in lack of trust in management for

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the employees who were being affected and also for those who were not making them

feel the next to become the culprit of management sudden decisions and surprises. Such

distorted communication channels lead to employees giving different meanings to the

same picture since every organization comprise of diverse mental filters causing more

conflicts at personal level between employees .

Inflexiblity Of Application

Similarly to the problems above, inflexibility of application and allocation of

rewards, application and policies was another factor of disturbance in the process.

Employees do not know what HBL’s management expects of them at certain events and

therefore most of the employee’s only aim to work at moderate performance levels since

management’s criteria of reward is unpredictable like the management itself. Therefore,

people do not want to work hard and get no return rather they find it better to work

consistently at a medium pace and not being rewarded which would at least not

demoralize them at the end.

Poor Application Of Resolution Procedures

Moreover, poor application of resolution procedure, that is in areas only where

management feels it is important is another problem. HBL’s managers just believe what

they see and see what they believe and start resolving and working on it by simply

forcing employees to follow what it dictates without welcoming any feedback, opinions

or suggestions from employees being the other half that makes up the organization.

Example, during the union negotiation sessions, the union representations are

forced to agree on management’s choices and issues through a sound mediator whose

popular and in good books of all employees and someone who the employees look up to

so that management can get the other party convinced at its point on emotional grounds

and can satisfy its demands at the cost of leaving its workforce feel dissatisfied and

simply being won on emotional rather than professional grounds.

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2.10.3 Privatization Impact On Dispute Resolution Processes Of HBL

While resolving conflict HBL did not balance competing interest of both the

organization and the employees and the senior managers specifically were not

collaborating with the employees to present the best opportunity to meld them in ways

that are mutually beneficial for both the system and the employees. They were not willing

to contribute their information, expertise and energy in order to give benefit to each other

while resolving conflict due to which many problems arises in dispute resolution

processes of HBL. The management did not allow employee participants to get involved

in the process of implementation of policy and due to which employees did not gain a

better understanding that why management were implementing this policy, what was the

goal of the organization and what will be the future outcomes after implementing this

policy. While resolving conflict management does not allow employees to challenge

conventional wisdom and management’s mental models by participating in dialogue and

employees were not able to convey their view of what really goes on in the workplace

and what issues are real and not real.

When the dispute resolution process persisted, management did not effectively

communicate the result to all employees due to which they were unable to understand theextent or level of reduction in conflict. Moreover, while resolving conflict at HBL, their

management did not conduct employee surveys that request written input on the issues

being considered in the dispute resolution process and did not give emphasis to employee

focus groups that facilitate discussion of the issues being considered and did not invite

oral feedback from employees about their perception in the whole dispute resolution

process.

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2.10.4 Disputes In Communication of Lower & Upper Management of HBL

The workforce and the nature of work have changed dramatically in HBL over the

years, and they continue to change with the increasing speed more specifically in banking

sector but HBL did not keep their employees well informed about the new policies. The

management of HBL did not address the changing need of employees in their policies

due to which further conflict arises. The managers and policy administrator did not

continually implement, administer and reexamine and change all of an organization’s

policies by keeping in mind the changing needs of employees with the passage of time

and with the ups and downs in the economy but rather than that they just focus on the

company’s interest and the growth of the organization and did not update policies at the

exact time when it was actually needed. The policies did not intend to ensure workplace

effectiveness, justice, fairness and peace among the employees at HBL because the

management did not update policies when needed.

2.10.5 Mis-Communication & Privatization Enforcement Of HBL

In the dispute resolution process of HBL management just focuses on forces for

change and did not focus on balancing the forces for stability as well. When themanagement did not focus on balancing both the forces, it takes too much time to resolve

conflict because the forces for stability are at one side and they continuously make effort

not to adopt changes at HBL whereas HBL wants to achieve its target by mainly focusing

on forces for change and they surprise employees while announcing the policy and did

not give acceptance time to employees. In resolving conflict, the drive to change did not

exceed the target’s resistance and did not create a disequilibrium that unfreezes the status

quo. While resolving conflict, the resistance which is the action of the targets to maintain

the status quo further increases.

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2.10.6 Employees Misunderstand The Facts

When management resolves conflict, due to miscommunication in the dispute

resolution process employee misunderstand the facts and further resistance arises when

employee have incorrect perceptions and misunderstandings about whether a change is

good or bad for them. The employees have different information that management has.

Because of a closed style, poor communication and negligence in the dispute resolution

processes, management did not involve employees in the decision process or did not

share with them all the information behind a planned change due to which further

misunderstanding arises in the dispute resolution system of HBL. And when employees

did not have a clear picture about what was going on in the organization they were more

likely to assume the worst and resist. When sometimes management shared a little bit

information about the change, employees also did not believe what they hear because of a

lack of trust in the management of HBL.

2.10.7 The Management Of HBL Conduct & Appropriate Discharge Discussion:

They did not conduct such discussion in which the employee is advised of his

discharge is the single event most likely to occur in order reduce the cost and for the long

term growth for the organization. In the dispute resolution process, the person holding the

discussion was not fully trained and the meeting was not be carefully planned often

scripted and rehearsed because the senior manager did not fully aware about the facts and

reasons behind the conflict. They did not use person to person discussion when advising

individuals of a dismissal for privatization instead they use a hybrid of both phone call

and other impersonal communication. While resolving conflict, the senior manager did

not directly get to the point and present the bad news and they did not stated the reason

for the termination in a few short sentences and did not tell the person that he has been

terminated due to which the expectation level of employees further increases.

The management cop out and make the discharge seem unjustified in an effort to

avoid hard feelings. The management of HBL also did not listen to what the employees

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has to say and answer their questions honestly and concisely. The management while

resolving conflict did not explain initially all severance details about how long the

employees will be paid, how insurance will be handled , references, outplacement

services and other information of importance the employee being discharged. They did

not even explain the exit procedures such as when and how the employee should vacate

the workplace.

2.10.8 No Job Security for The Employees

In the past, employment at HBL was typically seen as long term relationship

between HBL competing in expanding markets and hourly wage workers or salaried

managers. But today’s employment relationship at HBL is very different. Increased

participation of young workers and fresh graduates, the prevalence of part-time or

temporary workers, increased risk of permanent job loss, and other similar factors have

changed the basic employment contract and introduced continuing uncertainty into the

employment relationship for the remaining employees after retrenchment as well due to

which problems arises in the dispute resolution system and the main problem is that while

minimizing conflict, another issue of job security for the temporary and for the remaining

employees arises as well.

2.10.9 No Proper Counseling Or Discussion Platform

Management of HBL did not ensure that the dismissal discussion itself was

private means that it was not conducted behind closed doors but also handled so that

employees in general do not know it was taking place. The management did not carefully

consider that what information was to be shared with the remaining employees, who have

a legitimate interest in what has happened. Employees did not believe that the dispute

resolution processes will foster fair resolution of the process and fulfill their rights.

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2.10.10Lack of Disciplined, Balanced Discharge Decision:

Employees felt that supervisors and managers forgot about their feelings and they

thought only about the interest of the organization while resolving conflict. Other

managers fail to take needed action because of the potential cost and disruption to the

organization. While resolving conflict, delaying appropriate discharge allows bad

behavior to spread to others, impacting the broader organization performance. The

management did not thoughtfully balance the potential pros and cons of dismissing

employees while resolving conflict. In the dispute resolution process, the management

did not ensure that affected employees have an opportunity to present their case, with

help from an employee union representative if requested. Initially the management did

not clearly articulate a defensible reason for all dismissals. The management did not

provide for a pre decision review by higher levels of management, a peer committee,

external lawyers, or other knowledgeable individuals.

2.10.11No Proper Policy:

There was no formal ADR policy statement at HBL that establishes the rules for

resolving disputes, provides due processes, and fosters a full understanding of the disputeresolution options available to the organization’s employees and because of this further

problem arises in the dispute resolution system. There was no fair and impartial

investigation of disputes.

2.10.12Recommendations and Suggestions For Improving And Refining The

Dispute Resolution Process At HBL

It is time that the organizations such as HBL realize that conflict cannot be

resolved by firing the coach or trading a player. Conflict is inevitable. If it is handled

well, it can lead to constructive dialogue, needed change and ultimately resolution. If it is

handled poorly or left unresolved, it can disrupt relationships, affect on the job

performance and lead to costly and time-consuming litigation. A dispute resolution

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system preserves relationships, provides durable resolution of disputes, preserves

confidentiality, avoids litigation, and maintains management’s control over the process.

Large businesses are finally embracing Dispute Resolution Systems in the workplace and

are finding that a majority of conflicts are being resolved.

Following are some of the suggestions, recommendations for managements of the

organizations like HBL as to how to design and implement an effective dispute resolution

system in the workplace, minimizing problems in resolving conflicts:

A Dispute Resolution System Should Involve Everyone:

A dispute resolution system has to involve everyone. Management employees,

owners, CEOs and Presidents cannot be exempt from participating in the system. It is not

a system designed by a consultant for the non exempt employees. In a small organization,

all employees, owners and managers interact with one another on a daily basis. The

organization becomes instantly dysfunctional if an employee(s) refuses to communicate

with other employees. It is a must that all employees communicate with each other.

A System That Resolves All Conflicts

Organization that employs employees has advantages and disadvantages:

everyone knows everyone else, including all about their personal lives. This can create

conflict in the workplace, if HBL has an employee always complaining to a co-employee

about her couch potato husband, her unruly teenager or her desk chair that is hurting her

back. These complaints cannot be ignored and must be addressed. Many large

organization views a dispute resolution system as only addressing filed actionable claims

such as sexual harassment, discrimination, workers’ compensation or wage and hour

violations. However, a dispute resolution system addresses all conflicts in the workplace,

whether they are actionable claims, other workplace disputes or personal employee

complaints. For the co-worker who has to listen to the personal complaints of a co-

worker, this can create an intolerable working environment. For the employee who has

many personal issues, this must affect her work performance. Many personal complaints

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or workplace disputes are usually a precursor to a claim that is actionable. Addressing

those conflicts will make happy employees and decrease the actionable disputes. This

does not mean that the employer becomes a therapist. However, it does require an

employer to address employee morale and personal complaints that maybe disrupting not

only to the complaining employee’s work performance, but that of the co-employee

The Identification Of The Natural Emergence Of A Person Who Handles All

Conflicts

Organizations are fortunate because usually an employee emerges who has the skills

and talents to handle disputes. This person is liked by the employees and the employees

confide in this person, because the person listens, keeps all complaints confidential, is fair

minded and knows who to approach to resolve complaints. This person becomes an

ombudsman. The person is trusted by both management and non-management and is not

necessarily a human resource professional.

Organizations do not have to spend time and monetary resources to locate or

develop the person who will become the champion of resolving conflicts and becomes a

natural emergence. Through this natural emergence of the person who handles disputes in

a small organization, this person must insure confidentiality, be a good listener, fair minded, and know who to approach or who should handle a dispute in order to get the

dispute resolved. And the management at HBL should take keen interest and identify who

this person is and how he can affect the conflicts and the environment and how to with

tackle him.

Look To External Sources When Needed-Assures Neutrality

Organizations sometimes try their best to resolve disputes internally, but some

employees see the internal methods as an employer dominated system with no chance of

a fair resolution. HBL should embrace external features. And they should recognize that

proceeding to binding arbitration is costly. As a result that before any formal claim is

filed; they must offer the employee the use of external mediation, by an independent

mediator. HBL’s management must offer a list of mediators and the employee chooses

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the mediator, after the employee has had an opportunity to speak with the mediators

regarding their credentials or bias in favor of the employer. Providing the use of external

mediators that are not associated with the organizations assures more neutrality. It has

been seen and believed that a system that utilizes both internal and external features,

demonstrates to the employees that the employer values the employees by spending time

and money to have a dispute resolved by a neutral party.

Eliminate the Misconception That It Takes Large Monetary Resources To

Implement A System

Many organizations complain that they do not have the resources to implement a

dispute resolution system. It does not take monetary resources to resolve conflicts.

Resolution of disputes involves an employer’s willingness to address conflicts, to listen,

and to take steps to resolve them. Conflicts have to be addressed and there is an employee

who has the natural attributes to handle employee conflicts as mentioned above.

Management should tap in on those resources and before knowing it, management at

HBL will easily develop a workplace dispute resolution system, without expending large

sums of money.

An Ongoing Process-Updating Policy with Changing Trends

Management at HBL should update the policy regularly with the changing times

and needs. A workplace dispute resolution system is similar to a house, it can stay

standing for 50 or 60 years, but during those years it needs to be remodeled with updated

parts in order to replace those components that have worn out or retired. A workplace

dispute resolution system is an ongoing process that is ever changing and requires

continual assessment. The framework may stay the same, but a change in management or

new disputes may arise that will require different methods to address those disputes. If

the workplace dispute resolution system evolves from the ground up, there is more

likelihood that the framework will remain but the methods used in resolving disputes may

change. It is a continuing metamorphosis.

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Elimination Of Bureaucratic Attitude And Encouraging Friendly Environment

When HBL was a public entity, the bureaucratic attitude of management was

okay, but as soon as it is privatized, the expectations, needs, interests of people have

changed so there is a need to change and implement such a friendly and different

environment that everyone feels comfortable and satisfied.

Satisfying Both the Parties Ina Conflict

Finding a way to satisfy both parties in a conflict will ultimately be good for the

company. Management should take such steps that when resolving a conflict none of the

party remains unsatisfied, i.e. none of them feels that their interests and needs are not

considered or fulfilled and ensure them satisfying both sets of concerns.

Effective Pre And Post Dispute Resolution Process

HBL needs a pre and post dispute resolution analysis so that there is a proper

analysis or interpretation of where the organization wants to be and where it actually is

after implementation of the process of resolution and also there are proper guidelines

giving directions to take about the conflict resolution process. Hence, it should be

unproblematic to realize that whether the organization have achieved its desired

objectives and state or not.

Ethical Management

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There needs to an ethical management and also management ethics, so that

employees learn the same from the management.

Surface and Solve Conflict As Soon As Possible

Resolving conflicts creates more conflicts. If the management has firstly or

previously attempted to address and fulfill the needs and interest of its employees, the

counterproductive conflict would not have reached to this level or new conflicts wouldn’t

have rise.

Learning from Conflicts

In HBL, they lack effective resolution process, they should see if their dispute

resolution process is effective or not in resolving conflicts, and also they should see that

the same thing and conflicts does not repeat and rise again, i.e. they should learn from the

conflicts.

Management Should Be Flexible

Management should create such an attitude and should be flexible enough, that

employees come to them openly and freely with their problems. And management should

create an environment for employees so that they feel that their interest and needs will be

considered and valued.

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Use of Collaborative Power

In order to build trust, openness and respect among management and employees,

management should use collaborative power rather than coercive power.

Accurate Information Without Manipulation

Management should take the initiative to provide the same and standard information

to its employees regarding the change and implementation or any other important step, as

it will help then in keeping all of them in the same page. And also this is how there is no

miscommunication and misinterpretation of messages.

Dispute Resolution Process In Black And White

The management should announce or should have dispute resolution process in

black in white and should have a designated department for it. Management should

spread or announce a common message among all of its employees in order to ensure

uniformity all over the departments and branches. This can be in the form a code of ethics

and a code of conduct for all of its employees all over the country. And they should also

mention DRP in the policy in detail so that everyone in organization has clear cut idea

that what will be the processes, what will be the technicalities if a conflict rises.

Management should know the advantages and disadvantages of dispute resolution

process.

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DRP Fostering Long-Term Relationships

The dispute resolution process should foster a healthy and long-term relationship

between employees, colleagues and management, in order to ensure work relationships

and increased organization’s productivity. That will definitely eliminate feelings or

hatred, dissatisfaction not only among employees but also managers, management and

employees.

Allotment Of Empowerment To The Employees

Management should provide a certain degree of empowerment to its employees, so

that they also have power, resources and they feel secure and safe and do not feel

insecure for their jobs. Also management should change attitude as employee’s fear of

the management’s bureaucratic attitude, which leads to failing collaborative meetings.

Proper Flexibility of Application, Allocating Rewards And Encouraging Employees

There should be flexibility of application, policies and proper allocation of reward

system. And also management should mention that what level of performance they

expect from the employees and at which level they will be appreciated and will be

provided with rewards, this will definitely help the management to encourage them and

so everyone then will be willing to work hard and work according to the interests of the

organization.

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Feedback From The Parties Involved

Management should welcome some kind of feedback, suggestions and opinions

from the employees, so that they get to know what are the major and repeated problems

involved in the conflict and what DRP should be followed and what modifications should

be made in the process. This will also lead to increased employee trust on the

management. HBL could:

Ask what alternate behavior could have been used.

Ask them to put themselves in HBL’s shoes to understand how HBL was affected

by their behavior.

Focus on the positive by reminding them of past examples when their fair

behavior resulted in good partnership resolution.

Tips for management during Negotiation or DRP

Management of HBL should be objective: support both sides, even if privately

they prefer one point of view.

Management should be supportive: use caring language. Provide a non-

threatening learning environment, where people will feel safe to open up.

Management should not be judgmental: actively discourage judgments as to

who was right and who was wrong. Do not ask "Why did you?" Ask "What

happened?" And "How did you feel?".

Encourage suggestions from the Parties. Resist advising. If suggestions are

really needed, offer as options not directives.

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Win/Win: work towards wins for both Parties. Turn opponents into problem

solving partners.

Get agreement from both Parties about a basic willingness to solve the problem.

Let each Party say what the problem is for them. Check back that each Party has

actually understood the position of the other Party.

Guide conversations towards a joint problem-solving approach and away

from personal attack.

Encourage Parties to look for answers where everybody gets what they need.

Reframe negative statements into a neutral description of a legitimate present

concern.

2.11 Rationalization Of Human Resource in HBL.

2.11.1 Major conflict at HBL: Overstaffing

Major conflict that arose was of overstaffing. HBL was then very much concerned

not to supply too many employees. Overstaffing can create problem in ways that a work

of 1 person is done by many people, also resources and other possessions are spent on

them, which is a waste, so privatization was needed at HBL. Overstaffing can become the

reason of de-motivation, ultimately affecting the core objective of the organization that is

maximum profitability as it increases cost. (Example of other government owned

institution is PIA)

2.11.2 Feedback Cycle: Different Inputs.

Arbitration:

Arbitration did not exist with this particular name at HBL but do work with this

unorganized way. The appointment of an independent person to act as an adjudicator (or

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judge) in a dispute, to decide on the terms of a settlement. Both parties in a conflict have

to agree about who the arbitrator should be, and that the decision of the arbitrator will be

binding on them all. Arbitration differs from mediation and negotiation in that it does not

promote the continuation of collective bargaining: the arbitrator listens to and

investigates the demands and counter-demands and takes over the role of decision-maker.

People or organizations can agree on having either a single arbitrator or a panel of

arbitrators whom they respect and whose decision they will accept as final, in order to

resolve the conflict. Arbitrator is a legal person and his decision will be followed by both

employees and management.

CBL Negotiations:

If arbitration fails, HBL goes for negotiations:

Official negotiations are also done at HBL, when things get out of control or are

not solved through arbitration. Depending upon the situation and time, the way the

negotiations are to be conducted differs. The skills of negotiations depend and differ

widely from one situation to the other. Negotiation process takes one month at HBL. It is

at times beneficial in the organizations in order to resolve conflicts.

Types of Conflicts at HBL:

Pay raise issues mostly create conflicts, when bonuses, rewards are not

given at proper time and in proper amount. These kinds of problems

also rise because of the inflation

KESC employees (around 7000 employees) argued for their right, but government did

not support them. i.e. a difference of interests and rights or "Disputes of right"and "disputes of interest"

These all issues occur in transactional activities. Such as in systems, policies,

procedures and climates at HBL. Transformational are like major conflict emerges, and

cultural values are involved here which creates conflicts.

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Privatization:

In 1997: 29000 employees were working at HBL they were downsized to 13000;

the case is in litigation now. In organization they have complex and heterogeneous

structure. In these cases HBL has no issues or problems because a certain amount goes to

the company’s lawyer every month, and he handles the case. But the people involved or

individuals seek difficulties because lawyer’s fees are expensive and they can’t afford

these fees for too long.

Re-entrenchment:

In 2007: Conflict because of re-entrenchment occurred that was attempted to be

minimized by offering various packages and incentives for the employees. Means people

were given incentives and other facilities or other job opportunities and were asked to

leave jobs from HBL.

Employees’ expectations from management:

In 2002: HBL employees perceived that it is their right that their child / children

get employed at HBL but HBL followed merit based system and they were interested in

hiring skilled employees to satisfy the company’s as well as stake holders expectations.

And that’s the right choice, because if they started hiring on sources HBL will be biased

at hiring employees, instead the best way is to hire on merit, who are more capable

candidates.

MCB and UBL transformed but they overcome their conflicts less than HBL,

HBL is growing transformational 10% more than them because they re-entrenched the

employees very peacefully gave incentives and bonuses.

Reason for entrenchment:

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Driver’s salary exceeded Rs.20000. This is wrong because an MBA now a day’s

hardly gets a job of Rs. 10000, and a driver was given Rs.20000, which is a big

difference. So it was decided after privatization that the driver’s salary will be included

in each executive’s salary, and now it’s his choice to hire a driver or not, and that driver’s

salary is around Rs.7000.

Competing Internationally:

One of the reasons for HBL was also that HBL competes internationally that is

why it has to hire skillfully appropriate workforce and for that they need to create space

to accommodate them. HBL manages conflicts better than other companies.

Outsourcing of Employees:

Employees such as peons, guards, and drivers were outsourced from another

company. This is because in order to avoid conflicts in a way that nor there will be a

similar staff nor there will be groups, and there will be least probability of conflicts

arising.

Management’s Role in resolving conflicts:

Management at HBL is involved and is a key role player in surfacing, handling

and resolving conflicts at HBL at group, individual and organizational levels. This also

gives rise to and also encourages a collaborative stage, where everyone at management

level is involved in resolving conflicts and also parties involved are asked for feedbacks

and suggestions.

Mediation after negotiation:

Mediation takes place after negotiation, if employees resist accepting new terms

and sticking to two or three points. This takes place when employees and groups are not

at all ready to accept the decisions of the management and they call for strikes, threats

etc.

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The Mediator:

Then mediator talks or deals with him on the basis of his talent, personality and

skills. Mediator in HBL is a well known and popular among both employees and

management and he/ she is the person who knows well the goal of organization that as

the competition increases has to be reduced by covering extra cost, expenses as it hinders

the growth of organization that is the penetrating disease. Mediation drag the employee to

agree on further two or three points but still in the employee do not agree on even one

point arbitration takes place.

Employees hired at temporary work basis:

At HBL there are no permanent operational employees hired instead they all are

hired on a temporary basis contracts.

Role of Work Councils:

Personality conflict chewing pan, talking loud on cell phone, Negative attitude of

employees are monitored by these councils. Most of the time employees did this on

purpose to give an impression that they are more powerful than the management. These

conflicts at HBL have also rise, such as not following the dress coat, negative attitude or

any practice against the terms mentioned in the code of conduct. Accountability or check

the dress code and other matters at regular intervals is necessary in any organization.

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2.12 Theoretical Framework

2.13 Summary

Change is inevitable in organizations. The trend today is toward the learning

organization, which embraces continuous learning and change. Managers should think of

change as having four elements—the forces for change, the perceived need for change,

the initiation of change, and the implementation of change. Forces for change can

originate either within or outside the firm, and managers are responsible for monitoring

events that may require a planned organizational response. Techniques for initiating

changes include designing the organization for creativity, encouraging change agents, and

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Privatiza

tion

Impacts

Privatiza

tion

Impacts

OrganizationEfficiency

Adoption of Privatization

Policies & Issues Related

With Privatization

Working Communication

of Employees

Employees’ Loyalty &

Efficiency

Independent VariablesDependent Variable



establishing new-venture teams. The final step is implementation. Force field analysis is

one technique for diagnosing restraining forces, which often can be removed. Managers

also should draw on the implementation tactics of communication, participation,

negotiation, coercion, or top management support.

Also discussed are specific types of changes. Technology changes are

accomplished through a bottom-up approach that utilizes experts close to the technology.

Successful new-product introduction requires horizontal linkage among marketing,

research and development, manufacturing, and perhaps other departments. Structural

changes tend to be initiated in a top-down fashion, because upper managers are the

administrative experts and champion these ideas for approval and implementation.

Culture/people change pertains to the skills, behaviors, and attitudes of employees.

Organizational development is an important approach to changes in people’s mind-set

and corporate culture. The OD process entails three steps—unfreezing (diagnosis of the

problem), the actual change (intervention), and refreezing (reinforcement of new attitudes

and behaviors).

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CHAPTER NO.3: RESEARCH METHADOLOGY

3.1 Introduction Of Research Methodology

This chapter focuses on the research design and methodology procedures used in

this study. The chapter begins with a discussion of the quantitative and qualitative

research design and methodology; this is followed by a full description of the mixed

methodologies (triangulation) approach used in this study. Data analysis by means of uni-variate, bivariate and multivariate analysis used for the treatment of data in this

study is discussed in detail. Included are details of the population selected for the study,

a description of respondents, sampling procedures, the variables investigated,

quantitative and qualitative instrumentation used, data collection methods and the

treatment and analyses of data.

3.2 Overview Of Research Methodology

To satisfy the information needs of any study or research project, an appropriate

methodology has to be selected and suitable tools for data collection (and analysis) has

to be chosen (Mouton, 2001). Primarily there are two distinct approaches that inform

the gathering of data in any research project, namely the qualitative approach and the

quantitative approach. Qualitative and quantitative methodologies in the social sciences

are governed by specific paradigms.

3.2.1 Qualitative Approach

The qualitative approach is grounded in the interpretive social sciences

paradigm. Qualitative forms of investigation tend to be based on recognition of the

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importance of the subjective, experiential `life world' of human beings. Such reflection

is the province of phenomenology reports (Babbie, 1995; Blanche & Durrheim, 1999).

Gilbert (1993) notes that qualitative methodologies provide avenues that can lead to the

discovery of these deeper levels of meaning. Easterby Smith et al. (1991) describe the

task of the qualitative methodologist as to capture what people say and do as a product

of how they interpret the complexity of their world, and to understand events from the

viewpoints of the participants. In the domain of privatization specifically, Jennings

(2001) notes that the qualitative methodology gathers information as text based units,

which represent the social reality, context and attributes of the phenomenon under study.

The methodology is inductive in nature.

3.2.2 Quantitative Approach

A quantitative research approach is grounded in the positivist social sciences

paradigm, which primarily reflects the scientific method of the natural sciences

(Creswell, 1994; Jennings, 2001). This paradigm adopts a deductive approach to the

research process. In the privatization context it thus commences with theories,

hypotheses or research questions about a particular privatization phenomenon, gathers

data from the real world setting and then analyses the data statistically to support or reject the hypotheses (Veal, 1997; Blanche & Durrheim, 1999; Welman & Kruger,

2001). Researchers who adopt a more deductive approach use theory to guide the

design of the study and the interpretation of the results (Neuman, 1994). The overall

objective is to test or verify a theory, rather than to develop one. Thus the theory offers a

conceptual framework for the entire study, serving also as an organising model for the

research questions or hypotheses and for the entire data collection procedure (Veal,

1997; Blanche & Durrheim, 1999; Welman & Kruger, 2001). A quantitative

methodology abstracts data from the participants into statistical representations rather

than textual pictures of the phenomenon. The entire research process is objectively

constructed and the findings are usually representative of the population being studied.

The main strengths of the quantitative approach lie in precision and control. Control is

achieved through the sampling and design, and precise and reliable quantitative

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measurement. A further strength is that experimentation leads to statements about

causation, since the systematic manipulation of one variable can be shown to have a

direct causal effect on another when other variables have been eliminated or controlled

(Babbie, 1995; Blanche & Durrheim, 1999). Furthermore, hypotheses are tested through

a deductive approach, and the use of quantitative data permits statistical analysis

(Welman & Kruger, 2001). The method thus provides answers which have a much firmer

basis than a lay person's common sense, intuition or opinion.

One of the limitations of quantitative research reported by critics is that many

researchers are concerned that the scientific quantitative approach denigrates human

individuality and the ability to think (Walle, 1996; Massey, 2003). Gilbert (1993)

argues that its mechanistic ethos tends to exclude notions of freedom, choice and moral

responsibility. Quantification can become an end in itself rather than a human endeavor

seeking to explore the human condition. It fails to take account of people's unique

ability to interpret their experiences, construct their own meanings and act on these

(Gilbert, 1993; Massey, 2003). It is worth noting, however, that a scientific approach

cannot in fact be totally objective, since subjectivity is involved in the very choice of a

problem as worthy of investigation and in the interpretation of the results.

3.3 Aim Of Research Design & Methodology

This investigation was concerned generally to see how privatization come into the

everyday lives of different people who are linked with banking service, and how in turn

these people engage with these offerings: the way they are appropriated, including

adoption, learning and struggling, but also other strategies for non-adoption, or arms

length appropriation. Particular issues include the influence of knowledge, use and

resource on privatization appropriation within and between domains of the life-space,

addressing both opportunities for crossover and reinforcement of boundaries. More

broadly it asked how the appropriation of technologies, such as the PC, the mobile phone

and the Internet is proceeding now that certain technical elements and skills have left the

domain of the early adopter. The study started from three motivations:

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1. To study everyday use and context of privatization and role of bank in its broad

rather than narrow definition, covering the whole of the life space. This sought to

overcome the limitations of previous research that focuses rather exclusively on

the home, or work, or clubs only, and generally neglects crossovers, (except when

work comes in to the home in the case of tele-work). It is also sought to explore

how the computer and some other technologies cross over between domains, and

the supposed convergence of television, computer and telecommunications

technologies.

2. A ‘person centered’ approach to HBL, rather than an ‘artifact centered’ approach.

With so many concerns and aspects being developed, rather than follow the

uptake of a specific selected behavior, which may fail, or succeed, this studylooks at what is actually appropriated or engaged with by the respondents in

different circumstances during a period of intense grooming change of banks.

3. A socio-economical approach to appropriation, based on three levels. Rather than

being artifact or system centered, the study recognizes the socio-cultural nature of

innovation in the ‘information society’. It seeks to understand: The biographies

and appropriation of things or artifacts themselves.

a) The biography and appropriation and reinvention of proposed uses,

programmers and visions that accompany artifacts. In an age of

multiple competing service providers, the class of service is another

key level of analysis. Reinvention of services and changes in attitude

often occurs ahead of technical innovation, but nevertheless can be

seen as part of the innovation process.

b) A third level is that of issues on the macro scale, but affect individuals

and communities – issues such as privacy, reliance on banking

services, the effect on the news media, on national identity, the idea of

progress through technology etc. This includes “tales of banking

utopianism” (Kling and S., 1988) and dystopian.

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3.4 Designing The Field Work

This research design builds on research done into use of technology and media in

the home in the various other spaces using a qualitative research method. This discussion

of the methodology attempts to present some of the specific tools and experiences used to

inform the design of the research and the development of an interpretation.

3.4.1 Studying the Process of Adoption and Domestication

Some studies of privatization are aimed at building up the role of bank in a banking system at a particular time in a generally unwavering situation. Others

investigate the process of domestication from the moment a privatization is adopted. The

processes leading up to adoption are generally investigated in hindsight. Diffusion studies

tend to look in hindsight at the diffusion of an innovation though a community, following

one particular technology. Adoption studies, even those concentrating on word-of-mouth

and personal influence, do not look closely at the actual process of interactions in details,

and seldom use qualitative research methods.

In my research wanted to look at natural setting over a period of time, to try and

see what natural encounters there were with privatization, why and how these occurred,

and how people engaged not only with privatization, but with ideas about them too and

wanted to see how people linked innovations into their existing cultural and banking

world, how different privatization types and strategies were interpreted, and how they

were appropriated. I wanted to uncover this process and seek to understand in the context

of the everyday activities, relationships, background and events of the respondent. In

particular, I wanted to see how processes within the social network played a role in the

way people encountered and coped with innovations. I developed a method of research,

many elements of which I was reinforced by observations from number of researchers

from different disciplines. Rogers (Rogers and Shoemaker, 1971) suggests that diffusion

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research needs to be much more process-oriented than is general. It should be

qualitative, and follow sequences of events over time, to try and get closer to

understanding the actually adoption process. He also suggests that instead of focusing

on single innovations, we should see them as part of clusters, with adoption of one

linked to others, especially when boundaries between privatization are not very clear.

These clusters or complexes need to be investigated in an evolutionary sequence. He

suggests we have to look for how these links are made by potential adopters, and not

rely on the classification of experts. In particular, he suggest not falling for the empty

vessel fallacy , assuming that potential adopters do already have the knowledge and

skills (“indigenous knowledge systems”) to evaluate and use innovations relevant to

their lives. In fact this is the approach of sociology of privatization and of consumption –

to understand how interpretations of an innovation are arrived at in the culture in which

it emerges or is introduced.

Developing research out of the consumer research paradigm, Mick and Fournier

(Mick and Fournier, 1995) criticize the lack of research that focuses on the on the

context of consumption, the pre- and post-adoption aspects of consumption and the role

of symbolic. They developed a methodology using phenomenological questionnaires to

give insight into emotional responses, as well as rational explanations given in

retrospective questionnaire. In particular, they recommend multi-method approaches

used in longitudinal inquiries in natural settings (Mick and Fournier, 1998). Moores,

who did several details studies of the domestication of banking system approaches

towards privatization, suggest that future research should look to a range of privatization,

not just depend upon the bank’s of banking system, and look outside the home as well as

inside (Moores, 1996). Some have started to do this sort of research, such as Frissen and

Punie (1998), who study the role of privatization in the lives of busy employees and their

fast financial needs.

Haddon, who has conducted much research in this field, makes a number of

suggestions about the type of research that needs to be done to understand how people

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are appropriating the Internet instead facing direct to frontline (Haddon and Hartman,

1997). These include what the phenomenon symbolizes to different people, including

concerns that may make them wary; how they first encounter the Internet, what support

they have and any problems they face; how it is perceived and maybe used in relation to

other technologies and media; and where it can possibly fit into the time structures of

employees and individuals. (Haddon. Hartman, 1997).

3.4.2 Gaining Access

One problem is to gain access to respondents, and the problems of being able to

study them, and gain some familiarity with their world, or share their ‘reality’. Socialscience methodologies propose many different ways in which this can be achieved, and

guidance on the extent to which involvement in a respondent’s life world is necessary to

for particular descriptive or analytic ends. Practical problems include getting people to

speak to the researcher at all, then getting them to be open, co-operative, and sincere in

discussing the aspects of their lives that interest the researcher. More fundamental for

research methodology is the reliance on the personal descriptions of the respondents,

who may either intentionally conceal or mislead the researcher, or unintentionally

mislead them. In studying someone’s life world, it is unlikely that the respondent will be

able to comprehensively and thoroughly describe not only their opinions and thoughts,

but the details of everyday activities and relationships, and the context in which they

conduct them, especially in the space of a relatively short questionnaire.

Participant observation is a method that tries to surmount these obstacles, but at

the expense of huge effort by the researcher, and can only be carried out in a situationwhere the researcher can actually live or work within a small group over an extended

period of time. Since I intended to look at a number of groups, and across the social

network of one particular member, this type of methodology is impossible. What is

more, gaining access to the work place or social clubs may be possible, but living in

private homes is very difficult. Only a few researchers have tried this (for example,

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James Lull in order to examine media use (Lull, 1990)). I wanted to study the way

people encountered privatization over a period of months or even years, when in fact

key events may only occur very infrequently, so this did not make much sense. Other

research methods used in privatization studies include asking the participants to keep

diaries. This again is does not get any closer if especially if salient events occur very

infrequently and outside the period of research interaction.

I wanted to questionnaire not only users of privatization for whom the

privatization had a direct personal relevance, but also non-users for whom it did not. I

expected that during the process of research many of the respondents would be likely to

encounter and form opinions on Privatization and have some engagement with the

process of innovation and diffusion, however unwillingly. I had to find a method that

would enable me to gain access to people who did not have any interest in the subject

of research and who would be difficult to contact or engage with though a research

method based on current users. Especially for these people I had to develop a number of

tactics to bring out the discussion of privatization, and to build an understanding of

each person’s life-world and the way that they encountered and engaged with

privatization innovations.

3.5 Initial Concept of Research Method

Instead of selecting a range of established social groups, say a workplace, a

club, a nuclear family, a group of friends, HBL branches, I decided from the outset to use

an Informer approach, taking as my point of entry an individual who would to some

extent participate in the research as a co-researcher, and provide entry into their social

‘world’. Blumer suggest that the researcher “seek participants in the sphere of life whoare who are acute observers and who are well informed”(Blumer, 1969, p.41).

The research design then involved mapping the various other people that these

respondents engaged with (both in relation to specific uses of privatization and more

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generally) in different domains of their life sphere. I would then conduct questionnaires

with those they work with, their family, their friends, and ask them to report on their

experiences of traditional and new media and communication technologies. The

Informant, and the others they identified, would not be selected on the basis that they

personally use or buy any particular technology – given the symmetry principle that

non-use is just as interesting as use.

The crucial point is that it is the Informant’s social network and individuals within

it that are being studied, not only the key Informants themselves. Whilst the selection of

the initial informants would obviously have an important influence over research

outcomes, any such shaping by the researcher would then be diffused as the

questionnaires moved out to the networks identified by the Informants. Although such

an approach does not eliminate the bias inherent in selection of respondents this kind of

snowballing method does open up the range of people who filled questionnaire.

The involvement of the Informant was conceived as being important for practical

and theoretical reasons as well - an informant will have to be engaged as a co-researcher

who will provide access for the researcher to their social groups. I did not presume thatthe Informant’s position would be un-problematic, but anticipated that there would be

many difficulties with their relationship to the research, and their role in forming the

opinions of their groups. In fact the informant role as a point of passage between social

groups is very important - however they are unlikely to be unique points of passage in

real life. By questionnaire a number of people who shared similar experiences and knew

each other, or knew a common contact this method would also enable me to compare the

experience and interpretations the respondents had of particular events, shared spaces,

relationships and each other. This would make the study satisfy some of the basic

demands of an ethnographic study.

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The aim was to conduct this study on a longitudinal basis – with the idea of

repeating the fieldwork after maybe 1 year, by which time I expected that there would be

appreciable changes in the discourses and use of technology in society in general and in

the groups being studied. Questionnaires were conducted on a semi-structured basis with

the help of a schedule of questions and issues. I also explored the use of other devices to

prompt responses in a less structured way. Having carried out a ‘dummy run’ with these

research instruments on friends and fellow students, I then undertook an initial ‘pilot

study’ with the first group of questionnaires. Since I was attempting an experimental and

rather unstructured research design, which potentially threw up further problems, for

example in data analysis, the pilot study provided an important opportunity for assessing

and refining the research design.

3.5.1 Designing the Questionnaires

I was not trying to trace the network of influences, but rather study a group of

people who interact at home, work and in other social situations, and compare their

different approaches and study how they influence each others, and how the influence

of third parties is passed on and 'negotiated' in the group and specially the employees of

HBL for complete network analysis for this, but in putting together the sample, an

informants ego (personal) network is to be the basis for selection.

I had to design a questionnaire guide that would investigate the individual’s

background, their everyday activities, major and minor events in their lives and their

relationships with others. This would include information on activities that are currently

the target of the development of privatization, such as workplace activities, shopping,

banking, media, entertainment, communications and information use. I mapped out the

range of areas of life that I might have come up in the following Table. I would then

focus on the knowledge and use of privatization and how they were engaging with

them. Since I was investigating the adoption process, I also tried to find out how they

went about adopting new products, covering information seeking, advice taking, buying,

learning etc, for what ever product. This included the importance of different personal

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relationships in making decisions, finding out information, and forming opinions,

compared with reliance on ‘public sources’ such as shops and media. I also asked about

broader issues to do with the development of technology and its impact on society,

attitudes towards change, and if they had knowledge of in policy issues involved in the

‘information society’.The questionnaire was flexible enough to range over issues that the

respondents brought up. The main topics covered are in the table.

Background, life themes and history Information, Media and Communication

Education background

Family background

Relationship with Banks

Resources

Information use and attitude

Media use

Work communication

Friends and family communication

Privatization use and knowledge

Privatization adoption

Privatization attitudes

Engagement with privatization

Knowledge about privatizations

Knowledge of implementation of privatization

in government and industryPolicy issues on privatization.

3.5.2 Methods of Data Collection Used In The Study

3.5.2.1 Primary research methods for data collection

A Likert scale questionnaire survey was the main instrument providing

quantitative data, and was designed around opinion statements as a means of

exploring respondents' perceptions of a wide range of socio-cultural impacts.

Questionnaire bank branches surveys using the Likert scale have been used

widely by researchers measuring perceptions of the impacts of privatization

on employees (Allen et al., 1988; Ap, 1992; Ap & Crompton, 1993; Getz,

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1994; Lankford, 1994; McCool & Martin, 1994).

Semi-structured personal interviews were conducted, providing qualitative

insights and illuminations.

Participant observation was conducted by the researcher's going on HBL

tours.

3.5.2.2 Secondary research methods for data collection

Secondary research is research based on secondary resources that already exist

(Veal, 1997; Jennings, 2001). Secondary research methods in the current study included

Habib bank brochures, leaflets, photographs, videos, newspaper and magazine articles,

government publications, conference proceedings, reports, academic journals, books,

diaries, and visitor record books, unpublished manuscripts, statistics and the World-

Wide Web (Internet).

3.5.3 Description Of The Main Measurement Instrument Used In The Study: The

Likert Method

Employees perceptions for role of employees relationship officer’s role have been

well documented, and in privatization impact studies, the development of a privatization

impact assessment scale has received considerable attention (Allen et al., 1988; Ap,

1992; Ap & Bankmpton, 1993; Getz, 1994; Lankford, 1994; McCool & Martin, 1994).

A standard scale could provide researchers and privatization planners with a tool for

measuring employees perceptions of privatization in different HBL branches and on

different occasions, thus providing a basis for adequate comparative analysis. The

development of a scale of this kind responds to the call for the establishment of

standardized instrumentation for use in privatization research. Likert in 1932 proposed a

method of attitude measurement (Likert, 1967); the same method remains in use today,

and is appropriate to the current context, since Likert scale questionnaire surveys have

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been widely used for measuring perceptions and attitudes of the host community towards

socio -cultural impacts (Ap & Bankmpton, 1993; Lankford, 1994; McCool & Martin,

1994).

A Likert scale instrument was therefore developed for the purposes of this study

to assess employees' perceptions of the socio-cultural impacts of HBL privatization. The

research variables were measured on a 5-point Likert-type scale, with a score of 1

representing `strongly disagree' and a score of 5 representing `strongly agree'. The scale

was designed to elicit respondents' opinions on a range of issues relating to the socio

-cultural impacts of HBL privatization. In such scales no judges are used to rank the scale

statements: it is assumed that all subjects will perceive `strongly agree' as expressing

greater favor towards the attitude statements than `moderately agree' and `strongly

disagree' (Likert, 1967; Lankford 1994).

Some of the item statements should be expressed positively and some negatively

to encourage respondents not to respond automatically, but to think about every item.

Ideally there should be roughly equal numbers of positively and negatively worded

items (Lankford, 1994). Individual items can be, and normally are, analyzed by

counting how many respondents gave a particular response to the item. A subject's

score is tabulated by assigning a numerical value to each of the answers, ranging from 1

for the alternative at one end of the scale to 5 for the alternative at the other, and then

calculating the sum of the numerical values of the answers to all questions (Jennings,

2001). However, the principal objective, which is not uncontroversial, is to arrive at an

overall score for all the items combined together.

3.5.3.1 Advantages of the Likert method

Likert (1967), Lankford (1994) and Veal (1997) list the advantages of the Likert

method as including:

the fact that the method is based entirely on empirical data regarding subjects'

responses rather than the subjective opinions of judges;

the fact that this method produces more homogeneous scales and increases the

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probability of a unitary attitude being measured; as a result, validity (construct and

concurrent) and reliability are reasonably high; and

Greater ease of preparation.

3.5.3.2 Pool of items (impact variables) derived from the literature and fieldwork

The following scales were developed using impact variables derived from the

literature; these were then used to formulate statements specific to HBL privatization in

Lahore.

3.6 Profile of Respondents

According to Krippendorf (2001) opinions about and expectations of privatization

can be very different, depending on which population or occupational groups are

considered. This needs to be taken into account when the sample is chosen.

For both quantitative and qualitative data collection methodologies, the sample was

selected from the following categories:

Type 1: Employees who are in constant and direct contact with HBL; because they

depend on HBL as their business priorities and would perhaps be unemployed without it,

they welcome visitors i.e. researchers.

Type 2: HBL employees who have no direct relationship with bank but work for bank.

The rationale behind selecting different categories of respondents was to allow key

comparisons to be made.

3.7 Sampling Design and Sampling Methods Used In the Study

The main purpose of sampling is to achieve representativeness; the sample should

be assembled in such a way as to be representative of the population from which it is

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taken (Gilbert, 1993; Jennings, 2001). To achieve this, the sampling units are randomly

selected. This is the commonest approach to sampling, but it is by no means the only one,

nor is representativeness - in a numerical sense - the only aim of sampling procedures.

3.7.1 Population and sampling frame

Jennings (2001:136) defines population as "all the study subjects (clients, visitors,

hosts, family, friends, employees, managers) or study units (product attractions, product

features, bank behavior) that are the focus of the research project". In this study the target

population consists of Lahore employees living around the 14 main hubs or visiting

points in Lahore. The 14 hubs are Gulberg, Model Town, the Mall, Chouburji, Old &

New Campus, Punjab University, Bank Square, Liberty Market, Lake Road, Anarkali,

Iqbal Town, WAPDA Town, Yateem Khana, Samanabad and Mozang. These are the

destinations to which Employees living in and around these hubs are divided into those

who enacted with branches and their privatization, and branches those who are not

directly involved in privatization.

3.7.2 Sample size

A sample of 200 employees living around the 14 main hubs of Lahore was

selected for the quantitative part of the study. A combination of systematic and

stratified random sampling approaches was used for sample selection.

3.7.3 Sampling technique followed for quantitative research design

According to Central Statistics Pakistan (2003), the 1998 Census revealed thatthe population of the areas in which the 14 hubs are located numbers 31,52,054.

However, the researcher observes that the actual population size could well be far

lower, since there is considerable difficulty attached to conducting population counts in

informal settlements. The population of Lahore is estimated at between 6 million and

6.4 million people. Employee’s linkage with HBL is also enormous due to its branch

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network around Lahore city, 0.2 million employees are attached with HBL only in

Lahore.

A study sample of 200 employees was therefore drawn from the resident

employees population of the 14 main hubs listed above. The first step involved

stratified random sampling; accordingly the population of Lahore was first subdivided

into subgroups. Systematic sampling was then applied through the selection of every

third employees at each of the hubs. A decision on the number to sample at each hub or

visiting point was based on the following formula:

(Visiting points) = 14 = k

N = 200 employees

N/k = 200/14=14.29

14.29x14=200

Therefore it was necessary to interview at least 25 employees at each hub or

visiting point, of which 12 employees enacted with privatization and 13 employees

were not dependent on privatization. This was essential in order to obtain truerepresentativeness and to allow for comparisons to be made. Every third employees

were targeted at each hub to arrive at the bank branches.

3.8 Data Collection Procedure (Fieldwork) In the Study

In order to gather information on employees' perceptions of the socio -cultural

impacts of HBL privatization, 200 employees surveys (constituting the basis of thequantitative component of the study) together with personal interviews and participant

observation (constituting the qualitative component of the study) were carried out in

the Lahore region (14 hubs) over an eight-week period. Two fieldworkers, who knew

the study area very well, were employed on a part-time basis and trained by the

researcher in both approaching the respondents to elicit their participation and

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monitoring the completion of questionnaires. The purpose of the training was to make

sure the fieldworkers understood the importance of their role in the research project and

what they could expect in the field. They were taught the skills required for

approaching the respondents and were familiarized with the various sections of the

questionnaire. This training was both relevant and necessary, as it was the

fieldworkers' first experience of such a situation.

The researcher assumed a supervisory role in monitoring the fieldworkers

daily. This helped to ensure that only respondents who were targeted participated. The

survey team, together with the researcher, visited the 14 privatization hubs in Lahore

and identified those respondents to be interviewed. The survey team then distributed

one questionnaire to each of the selected employees. The unstructured personal

interviews were conducted by the researcher.

3.9 Analysis of Data

I delivered questionnaires to 200 people in 4 groups, with two sets of

questionnaires, with each to fill lasting between one day and two days. Computer-aids

were used to assist the management and analysis of the mass of questionnaire

transcripts. The first job was to try and extract from this material quotes corresponding

to all the issues I had raised, and look for new ideas and issues arising directly from the

respondents words. The NUDIST package proved extremely helpful with its powerful

facilities for cross-referencing excerpts. Crucial to this is the elaboration of a set of

reference terms. I developed a rough set of terms in analyzing initial questionnaires

from the first group – and subsequently refined these in the light of a larger number of responses. The aim was to balance on the one hand openness to a wide range of

responses, and on the other the need to group these experiences. This enabled a

simultaneous investigation of the data from the ‘bottom up’, i.e. from the questionnaires

themselves, and from the ‘top down’, engagement based on themes derived from

existing theory and research questions. The categories generated and classified are listed

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in the Appendix. They proved very helpful in analysis, building up important dimensions

of the experience of privatization. However, as we see in the detailed empirical chapters,

it was necessary to generate further more detailed schema for analyzing particular

aspects and processes in privatization adoption (and non-adoption). The use of

computer-tools allowed considerable flexibility in this respect. These nodes were then

linked further together in a number of emerging themes relevant to the network,

technology, technology problems and attitudes, non-adoption, adoption, knowledge,

communication and information use. Searches of the marked texts enabled groups of

quotes reflecting different issues to be bought together quickly. However there was still a

need to structure this in a simpler and straighter forward way in order to actually write

the stories and compare and contrast experiences.

3.10 BEAN (Background, Events, Activities and Network) Test

For Relativity And Validity

To structure the resultant data a framework was needed that would focus on

particular dimensions of everyday life relevant to understanding the way that people

encounter front line privatization service of banks, think about them, adopt and use them.

The approach I chose was to look at the data from four angles: Background or personal

history, Events, Activities and the social Network or BEAN to make an easily

memorable acronym. This gives a way to assemble the contextual information, and to

highlight crossovers and boundaries in the consumption, use and domestication process.

It also gives framework for then moving to analysis based on domestication,

appropriation, adoption, diffusion, and consumption models.

These dimensions are obviously not independent: activities are related to the

network, and changes in activities and relationships. Many events could be argued to be

particular types of activities that people take part in.

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Background or Personal History: The respondents all have a history of experiences,

of use and adoption of privatization that influence their activities and attitudes the study.

The personal history goes beyond this to broader history of relationships, education, andother activities. This dimension includes reflections on the life course of the individual

or group. It looks at the possibility of personal innovativeness.

Events: There are three types of events that influence the adoption and appropriation of

innovations: life course events, cyclical events, and one off social events or

privatization experiences. These events may be periods of considerable length (such as

particular project at work, or the learning period for a new innovation).

Activities: these describe the spheres of everyday life in which the respondent takes part,

such as work, school, family life, community life, and the activities they engage in

within those spheres. The use and attitude to information, privatization and

communication is examined within the context of these activities. These include work

tasks, domestic tasks, leisure activities, media use etc. Activities will reflect, but not be

actually linked to the stages of the respondents’ life course. Changes in activities are

linked to events.

Network: the personal network describes the relationships of the respondent, with whom

they share spaces, ideas, decisions, experiences etc. The network is not fixed, but

evolves over time.

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CHAPTER NO.4: DATA ANALYSIS

4 Data Analysis & Interpretations

The empirical data collected have a lot of problems in analysis, its viability,

handing, missing scenarios and its outliners are aspects that relates with its

interpretations. My data is mainly constituted on the questionnaires and interview’s

answers. I selected the most valid data through inferential & descriptive statistics

methods.

Data Analysis

Gender

Frequency Percentage (%)

Male 143 71.5

Female 57 28.5

Total 200 100.0

Result shows that out of 200 respondents 143(71.5%) were male while 57(28.5%) were

females.

Profession


Government employee 30 15.0

Businessman 135 67.5

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Private company employee 35 17.5

Total 200 100.0

Above table shows that out of 200 respondents 30(15.0%) were government employees,

135(67.5%) were businessmen and 35(17.5%) were working in the private companies.

Salary


Rs.10000-20000 38 19.0

Rs.21000-30000 28 14.0

Rs.31000-40000 59 29.5

Rs.41000-50000 20 10.0

Above Rs.50000 55 27.5

Total 200 100.0

It is depicted from table that 38(19.0%) respondents were earning between Rs.10000-

20000, 28(14.0%) between Rs.21000-30000, 59(29.5%) between Rs.31000-40000,

20(10.0) between 41000-50000 and 55(27.5%) were earning more than Rs.50000 per

month.

Bank Preference


Askari Bank 4 2.0

Allied Bank 2 1.0

United Bank 1 0.5

MCB Bank 4 2.0

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National Bank 2 1.0

HBL 165 82.5

Bank Alfalah 6 3.0

ABN AMRO Bank 9 4.5

Standard Chartered Bank 5 2.5

HSBC 2 1.0

Total 200 100.0

Out of 200 respondents 4(2.0%) preferred Askari bank for deposits, 2(1.0%) preferred

Allied Bank, 1(0.5%) preferred United Bank, 4(2.0%) preferred MCB Bank, 2(1.0%)

preferred National Bank, 165(82.5%) preferred Habib Bank Limited, 6(3.0%) preferred

Bank Alfalah, 9(45%) preferred ABN AMRO Bank, 5(2.5%) preferred Standard

Chartered and 2(1.0%) preferred HSBC for deposits.

HBL & Satisfaction


Yes 135 67.5

No 65 32.5

Total 200 100.0

Result shows that out of 200 respondents 135(67.5%) were satisfied with the services

provided by Habib Bank Limited and 65(32.5%) did not satisfy.

Necessity of Privatization


Yes 170 85.0

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No 30 15.0

Total 200 100.0

Out of 200 respondents 170(85.0%) said that there should be customer relation officer in

the bank while 30(15.0%) said no.

Behavior of Privatization & Satisfaction


Yes 155 77.5

No 45 22.5

Total 200 100.0

Above table shows that out of 200 respondents 155(77.5%) were satisfied with the

behavior of Customer Relation Officers and 45(22.5%) were not satisfied.

Behavior of Privatization & impact on the business of the bank


Yes 195 97.5

No 5 2.5

Total 200 100.0

Result shows that 195(97.5%) respondents said that behaviour of customer relation

officers impacts on the business of the bank while only 5(2.5%) replied in negative.

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Good salary package enhances the performance of the Privatization


Yes 170 85.0

No 30 15.0

Total 200 100.0

It is depicted from above table that out of 200 respondents 170(85.0%) said that good

salary package enhances the performance of the customer relation officers while

30(15.0%) said no.

Privatization activities can enhance the customer satisfaction and loyalty


Yes 173 86.5

No 27 13.5

Total 200 100.0

Result shows that 173(86.5%) respondents were agreed that customer relation officersactivities can enhance the customer satisfaction and loyalty while 27(13.5%) were not

agreed with it.

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Data Analysis & Interpretations

This is a study of relationship of various variables. So after the data collection a

correlation analysis was performed using the acquired data, to ascertain if relationship

between the variables exist or not. Stepwise regression analysis was also performed to

determine the degree of the correlation among the variables. For doing the data analysis

SPSS 12 was used, because it is a very systematic computer program that can deal with a

large amount of data and can give out accurate results.

4.1 General Information

In the questionnaire, we asked for some general information from the customers.

The result shows that the most active customers are the ones between 20 and 35 and are

university graduated. Also the results show that most of them have official

occupations. This could be because of their education.

4.1.1 Research Questions

From these general aims, a number of specific research questions and issues

emerged and were further refined in the course of developing the research design. The

main questions are summarized below:

RQ1: Whether Post-privatization impacts favor the workforce of organization or not?

RQ2: How does organization manage the necessary concerns of workforce?

RQ3: How employee's efficiency can be affected by the Privatization?

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These questions throw light on the greater issue of whether we can question an

individualistic consumption and ownership model. In these questions issues of personal,

social, functional and technical ‘context’ is be central. The Social Shaping of banking

perspective suggests a social constructivist perspective on one hand – the way that

privatization, uses, concepts and roles are constructed in context and in ‘use’, but on the

other hand stresses the influence of the characteristics of the privatization, and in this

case information and communications, in shaping the meanings and context. While the

meanings of privatization may be shaped by the broader social and cultural context, and

discourse, the technology itself has a powerful reverse effect.

I wanted to take a critical stance, not looking for stereotypes but trying to see

from ‘bottom up’ observation how and why there may be different approaches to

privatization between people, based not only on demographics, but also on a range of

other influencing factors. Do changes in roles, education and expectations alongside

changes in privatization challenge our stereotypes of women and men, or the old and the

young? In order to tackle this sort of issue I needed to study a number of different milieu,

with a range of people of various ages, occupations, resources, attitudes to technology

etc, in order to get a range of different examples to compare and contrast. However the

number of people I could questionnaire would be limited by my time and the type of

research method I chose.

4.2 Analysis of Variables & Interpretations

4.2.1 Reliability of Data

Table 4.1

Reliability coefficients and descriptive statistics

Variables Number of

Items

Alpha

Values

Mean Std.

Deviation

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Adoption of Privatization 6 0.439 3.20 0.53

Policies Issues On Privatization5 0.741 3.70 0.70

Work Communication4 0.813 3.90 0.66

Employee Loyalty 10 0.835 3.70 0.63

n = 200Table 4.1 gives a structured view of the alpha values, means and standard

deviations of the variables under study in this research. The questions in the questionnaire

to approach the variables have been obtained from various articles. The alpha values,

means and standard deviations have been calculated by SPSS 12 through input of research

data. The survey was done with a questionnaire having a 5 point scale as the response

format. The means have been calculated by taking the average of all the answers of the

questions in each variable.

The calculated mean for adoption of privatization is 3.20 with a standard

deviation of 0.53. This shows that on an average employee thinks negatively about

adoption of privatization as the value is slightly above 3 which is a point that

shows the indifference of employee’s opinions.

The mean for policy issues on privatization is 3.70 and has a standard deviation of

0.70. So it can be interpreted that people generally have negative perceptions

about privatization of bank.

Work Communication has a mean of 3.90 and a standard deviation of 0.66. This

shows that people have a fairly negative perception about work in-out communication

between top and front desk management.

The mean value for employee loyalty is 3.70 with a standard deviation of 0.63.

This shows that the general loyalty of employee to the bank is high because they want

work there because of external factors i.e. unemployment ratio in country.

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4.2.2 Correlation Analysis

Table 4.2

Correlation matrix of the study variables

Variable Adoption of

Privatization

Policies

Issues On

Privatization

Work

Communication Employee

Loyalty

Adoption of Privatization - 0.380** 0.265** 0.369**

Policies Issues OnPrivatization

-0.569** 0.369**

Work Communication - 0.560**

Employee Loyalty -

**p< 0.01 (2 tailed)

The table 4.2 is a result of a correlation analysis that has been done on all the data

that has been collected through the survey. This analysis is done to show the existing

relation among the study variables (Adoption of Privatization, Policies Issues On

Privatization, Work Communication and Employee Loyalty). A bivariate two tailed

correlation analysis was done by running the data on SPSS 12.

The table 4.2 clearly shows that each of the figures have the symbol ‘**’ next to

them indicating that each of the variables are significantly correlated with each other at a

significance level of p<0.01. Consumer promotion is significantly correlated with Policies

Issues On Privatization (r = 0.38, p< 0.01), Work Communication (r = 0.27, at p< 0.01)

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and Employee Loyalty (r = 0.37, p< 0.01). Policies Issues On Privatization are correlated

with product Work Communication (r = 0.57, p< 0.01) and Employee Loyalty (r = 0.37,

p< 0.01) in addition to being correlated to Adoption of Privatization as mentioned

before. Work Communication were correlated with Employee Loyalty (r = 0.56, p< 0.01)

in addition to being adoption of privatization and policy issues on privatization.

According to our first conceptual framework model 1 (figure 4.1) the correlation

of Adoption of Privatization and Policies Issues On Privatization with Work

Communication (r = 0.27, at p< 0.01; r = 0.57, p< 0.01) is what we need to look into.

According to model 2 (figure 4.2) the correlation of Adoption of Privatization, price

Policies Issues On Privatization and Work Communication with Employee Loyalty (r =

0.37, p< 0.01; r = 0.37, p< 0.01; r = 0.56, p< 0.01) is what we need to investigate. This

shows that the established correlation among Adoption of Privatization and Policies

Issues On Privatization is of most importance to our current study here.

4.2.3 Regression analysis

Step wise regression analysis were also done in order to examine the correlation

more closely and to figure out the degree to which the independent variables can have an

effect on the dependant ones.

Regression Analysis for Model 1:

Table 4.3:

Stepwise Regression on Work Communication

Variable B SE B β R Square R

Step 1 0.3 14

Policies Issues OnPrivatization

0.539 0.077 0.560** -

**p< 0.001

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The table 4.3 above shows that quality perception is significantly related with

Policies Issues On Privatization at p<0.001. The predictor variable Policies Issues On

Privatization explains 32% of the variance of Work Communication.

Regression Analysis For Model 2:

Table 4.4

Stepwise regression on Employee Loyalty

Variable B SE B β R Square R

Step 1 0.3 14

Work Communication 0.539 0.077 0.560** -

Step2

0.366 0.052

Work Communication0.470 0.078 0.497**

Adoption of Privatization

0.282 0.098 0.238*

**p< 0.001, *p< 0.01

Table 4.4 shows that employee loyalty is significantly associated with work

communication (p< 0.00 1) and adoption of privatization (p<0.01). The two predictor

variable explains 37% of the variance in employee loyalty. That is work communication

and adoption of privatization that explain 31% and 6 % respectively.

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CHAPTER NO.5: CONCLUSION

5.1 Purpose Conclusion

Habib Bank Limited (HBL) is considered first commercial bank of Pakistan. HBL

has grown its branch network and become the largest private sector bank with over 1450

branches across the country and a customer base exceeding five million relationships.

Study was conducted to know the impact of customer relation officer activities on

the performance of bank and for this purpose Habib Bank Limited was selected. HBL is

very conscious about its employees and very much importance is given by bank to their

valuable satisfaction. Bank also follows employee's crisis management because role of

employee's crisis management in banking sector is most important and it enhances the

business and performance of the bank.

Employee's crisis management helps to acquire strong and satisfied workforce

and maximizes the business of the bank. Through close relationship with employee, bank

obtains more deposits and efficiency.

5.2 Implications & Findings

The present report indicates that the following features:-

1. Better job opportunities in outer market & pay are the main reasons for increasing

attrition rate.

2. The employees do not feel valued by their employer.

3. The working environment in the company also make them to leave their job.

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4. Performance Appraisals are not given at regular intervals so that the Employee

feel motivated for its work.

5. The work schedule is very much inflexible & Stressful

However an effective retention policy could be followed to make the employees

stay in the company starting form recruitment and selection of employees, providing an

effective pay packages and compensation, outlining an efficient career development path

for employees and most importantly catering to their emotional, mental and family needs.

Also practices should be followed to bring the ex-employees back in the company.

5.3 Recommendations

The majority of research on the response of employees to privatization has

centered on layoff victims; few studies have focused on the people who survived the

layoff. But, these tips will assist you with the emotional aspects of coping with the loss of

your coworkers.

1) Recognize that your emotions are legitimate and that time passing is necessary

for the intensity of your current emotional response to die down. In organizations

where managers recognize and acknowledge this emotional component in a

privatization, employees return to productivity much sooner.

2) Recognize that you may need to experience each of the stages of loss described

in Kubler-Ross’s groundbreaking studies about grief.

3) Seek access to your supervisor; assuming your supervisor is readily available

and perceived by you as concerned about employees, and honest, reliable and

competent, your time with your supervisor should help you feel reassured.

4) Attempt to recreate the daily patterns you experienced prior to the layoffs.

While much time in an office is invested by employees in talking about the

situation after layoffs, the sooner you can recreate your prior patterns, the better

for your mental health.

5) Treat yourself with kindness. Now is the time to eat a portion of your favorite

comfort food. Got chocolate? Share with coworkers. Bring in a casserole or

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cookies that coworkers can share. Small gestures mean a lot in the post layoffs

workplace.

6) Talk out your feelings with coworkers who are likely experiencing loss just as

you are. You can comfort one another. Your significant others outside of your

workplace make good sounding boards, too.

7) Pay attention to the needs of the coworkers who were laid off. These are your

friends and they are experiencing serious issues with self-worth and loss, too. So

many people tie up so much of their identity and self esteem in what they do for a

living that a layoff is a major blow to their sense of themselves, their competence

and self worth. You do them a kindness, and you will feel better, too, if you

continue your weekly lunch date with your laid off coworker. Let your laid off

former coworker vent and listen to see how you can lend support. Sometimes,

active listening is all they need.

8) You will feel as if you have a proactive mission and purpose when you connect

your laid off coworkers to your connections on Facebook, LinkedIn, and the

other online social networks. Anything you can do to help them expand their

networks and effectively job search will be valued by your friends.

9) Communication is critical following a layoff. But, remember that the middle

managers who would generally communicate are also experiencing loss and

concern about their own jobs. (Often managers are the first to be laid off.) If you

are not receiving the communication you need from your manager, seek it out by

asking questions and spending time with him or her. Go after what you need;

don’t wait for communication to flow downwards.

10) Hopefully, your organization has recognized the importance of valuing the

remaining employees. But, if the opportunities for reward, recognition and

valuing seem slim, volunteer to head up an employee morale committee. The

committee can do much to bring fun and motivation back into the workplace

following layoffs. Think ice cream socials, popcorn machines, and potluck

lunches; the activities don’t need to be expensive.

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http://jobsearch.about.com/

http://jobsearch.about.com/



Documents

7 Final Projectii