AN ANALYSIS OF FACTORS INFLUENCING EMPLOYEE EMPOWERMENT

IN AN ORGANIZATION: A CASE STUDY OF BANKING SECTOR IN KENYA

Ms. Cornel A. Ragen

October 25, 2011

i

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study According to Sashkin, (1998) Employee empowerment or participative decision making

is neither a new or simple management concept. Employee participation is a complex

management tool that over 50 years of research has proven that, when applied properly,

can be effective in improving performance, productivity and job satisfaction.

Employee empowerment is a term used to express the ways in which non-managerial

staff can make autonomous decisions without consulting a boss/manager. These self-

willed decisions can be small or large depending upon the degree of power with which

the company wishes to invest employees. Employee empowerment can begin with

training and converting a whole company to an empowerment model. Conversely it may

merely mean giving employees the ability to make some decisions on their own. The

thinking behind employee empowerment is that it gives power to the individual and thus

makes for happier employees. By offering employees choice and participation on a more

responsible level, the employees are more invested in their company, and view

themselves as a representative of such. (Patterson, 1998)

For employee empowerment to work successfully, the management team must be truly

committed to allowing employees to make decisions. They may wish to define the scope

of decisions made. Building decision-making teams is often one of the models used in

employee empowerment, because it allows for managers and workers to contribute ideas

toward directing the company. (Christensen, 2010)

Autocratic managers, who are micromanagers, tend not to be able to utilize employee

empowerment. These types of managers tend to oversee all aspects of others’ work, and

usually will not give up control. A manager dedicated to employee empowerment must

be willing to give up control of some aspects of work production. When employees feel

as though they have choice and can make direct decisions, this does often lead to a

1

greater feeling of self-worth. In a model where power is closely tied to sense of self,

having some power is a valuable thing. An employee who does not feel constantly

watched and criticized is more likely to consider work as a positive environment, rather

than a negative one. (Christensen, 2010)

According to Armstrong (2005) one easy way to begin employee empowerment in the

workplace is to install a suggestion box, where workers can make suggestions without

fear of punishment or retribution. However, simply placing a suggestion box somewhere

is only the first step. Managers must then be willing to read and consider suggestions.

They might provide a forum where questions or suggestions receive a response, like a

weekly or monthly newsletter. In addition, managers can hold a once monthly meeting

open to employees where all suggestions are addressed. Some suggestions have to be

approved in order for employees to feel that they are having some impact on their

company. Failure to approve or implement any suggestions reinforces that all the power

belongs to the managers and not the workers. Employee empowerment of any form can

only work when managers are willing to be open to new ideas and strategies. If no such

willingness exists, employee empowerment is likely to be non-existent.

Bono and Heller (2005), notes that, 'empowerment' isn't just a matter of delegating job

authority to the job-holders. It means that 'everyone can take action to enhance his or her

work, either in personal or organisational terms'. Instead of the traditional bureaucracy,

with its emphasis on control, standardization and obedience, Brown-blessed

empowerment can only thrive in the liberated surround of innovation, flexibility,

commitment, zero defects and continuous improvement.

Employee involvement is creating an environment in which people have an impact on

decisions and actions that affect their jobs. Employee involvement is not the goal nor is it

a tool, as practiced in many organizations. Rather, it is a management and leadership

philosophy about how people are most enabled to contribute to continuous improvement

and the ongoing success of their work organization. How to involve employees in

decision making and continuous improvement activities is the strategic aspect of

2

involvement and can include such methods as suggestion systems, manufacturing cells,

work teams, continuous improvement meetings, Kaizen (continuous improvement)

events, corrective action processes, and periodic discussions with the supervisor. (Heizer

and Render 2005)

According to Armstrong, (2005) for any organization which has not been actively

cultivating employee empowerment, it may take considerable time and effort before

employees start to respond. Often the first efforts and communications are met with

employee derision and mockery. Those who are only interested in trying the latest

management fad will give up when met with this response.

Armstrong, (2005) states that a good rule of thumb for communications to employees is

to enumerate what management considers adequate and then multiple by a factor of

ten. When considering employee understanding and acceptance of decisions

considerations should be made on how long it takes for the management team to discuss

and then make a decision. Problems do arise when employees are not allowed several

multiples of time to think about the issue or developments and changes to occur.

For management wanting employee empowerment the evidence will not come across the

board with wide spread acceptance.  A small number will accept the invitation to become

more involved, say 3-5 per cent. The rest will be watching every move to see what

happens. Every communication, decision and action by management will be viewed as

either supporting a move to employee empowerment or not. Probably nothing

demonstrates the commitment or lack of commitment to employee empowerment more

than promotions and selection for leadership positions. Employees know those that

attempt to “shine up while dumping down”, (Patterson 1998).

3

1.1.1 Banking Sector in Kenya

According to the Banking Survey (2010) the Banking industry in Kenya is governed by

the Companies Act, the Banking Act, the Central Bank of Kenya Act and the various

prudential guidelines issued by the Central Bank of Kenya (CBK). The banking sector

was liberalised in 1995 and exchange controls lifted. The CBK, which falls under the

Minister for Finance docket, is responsible for formulating and implementing monetary

policy and fostering the liquidity, solvency and proper functioning of the financial

system. (Banking Survey, 2010)

As at December 2008 there were forty six banking and non bank institutions, fifteen

micro finance institutions and one hundred and nine foreign exchange bureaus. The banks

have come together under the Kenya Bankers Association (KBA), which serves as a

lobby for the banking sector’s interest’s .The KBA serves a forum to address issues

affecting members (Central Bank of Kenya, 2010).

Over the last few years, the Banking sector in Kenya has continued to growth in assets,

deposits, profitability and products offering. The growth has been mainly underpinned

by; an industry wide branch network expansion strategy both in Kenya and in the East

African community region. Automation of a large number of services and a move

towards emphasis on the complex customer needs rather than traditional ‘off-the-shelf’

banking products. Players in this sector have experienced increased competition over the

last few years resulting from increased innovations among the players and new entrants

into the market (Kinusi, 2010).

This study seeks to analyze on factors affecting employee empowerment in an

organization with a focus to the banking sector. Kwamboka (2009) notes that in Kenyan

coperate set ups i.e. in the Banking sector consequently, the reporting staff members wait

for the bestowing of empowerment, and the manager asks why people won't act in

empowered ways. This leads to a general unhappiness, mostly undeserved, with the

concept of empowerment in many organizations. Kwamboka (2009) Empowerment

should be thought as the process of an individual enabling himself to take action and

4

control work and decision making in autonomous ways. Empowerment comes from the

individual (Kwamboka, 2009). An organization has the responsibility to create a work

environment which helps foster the ability and desire of employees to act in empowered

ways. The work organization has the responsibility to remove barriers that limit the

ability of staff to act in empowered ways (Kwamboka, 2009).

1.2 Problem Statement Empowerments is the process of enabling or authorizing an individual to think, behave,

take action, and control work and decision making in autonomous ways. It is the state of

feeling self-empowered to take control of one's own destiny be it work oriented or at

personal life level (Patterson, 1998).

A research study on employee empowerment states employee empowerment is a two

sided coin. For employees to be empowered the management leadership must want and

believe that employee empowerment makes good business sense and employees must

act. However the study notes that some employers, mangers and those in leadership

positions feel threaten at some point as most of the empowerment process come as away

of delegating responsibilities or work (Kwamboka, 2009).

According to Kwamboka, (2009) communication is observed to be a barrier to employee

empowerment. The study states that for an organization to practice and foster employee

empowerment the management must trust and communicate with employees.  Employee

communication is one of the strongest signs of employee empowerment.  Honest and

repeated communication from elements of the strategic plan, key performance indicators,

financial performance, down to daily decision making.

Murithi (2009), states that employee empowerment becomes a problem when

organizational leadership fail to initiate or to take actions to encourage employee

empowerment it is then up to then left to employees to decided if they wish to take

advantage of the opportunity or not.  It is not unusual for only a small minority to accept

5

the challenge initially.  Also it is very likely that some fraction will never respond. It is

the large middle group that must be convinced to practice employee empowerment.

Kiruii, (2009) a study on the importance of creating a feeling of employee empowerment

within an organization, explains the flat organization model and provides a case study

analysis of a small firm who transitioned their employees from a hierarchical

organizational style to a flat organizational style. The paper discusses the application of

these changes within the organization. Though the transition to flat organization may

benefit most organization, it is still a transitional situation that requires special

understanding of employee empowerment as well as interactions. Smaller firms of coarse

will find this transition easier while larger firms may need to create quasi flat systems

that better serve multi-factorial production systems and require the system to work

together in a streamlines fashion, without one area of production causing unintended

problems for another. Employee empowerment is clearly one of the biggest reasons why

employees express happiness and comfort within a system, and the study was not clear on

the flat organizational model which is thought to be the right way to create such

empowerment, there is need for transition to be done effectively and communicated well

to all levels.

As private and public organizations seek to be part of the governments realization of

vision 2030 there is increasing emphasis placed on participative management mainly

because decisions are becoming more complex and managers will be required to integrate

the knowledge of specialists in different functional and technical areas. (Dipesh, 2010)

Moreover, those that are entering the workforce today have higher expectations of being

involved in management decisions. (Dipesh, 2010) With the pressure of worldwide

competition, organizations which wish to remain competitive must use the potential of all

their members. Management has the obligation to create the environment that fosters

employee empowerment, employees have the duty to accept the opportunity and

demonstrate they are willing and capable (Kwamboka 2009)

6

There is minimal research implications of employee empowerment for internal locus of

control, self efficiency and self esteem of individuals as this can help or hinder the

employee empowerment process. There is hardly empirical research that has been

conducted to analyse factors affecting employee empowerment in the banking sector in

Kenya. Hence the study sought to analyse the factors affecting employee empowerment

in Kenya banking sector.

1.3 Objectives of the Study

1.3.1 General Objective

The general objective was to carry out an analysis on factors affecting employee

empowerment in an organization with a focus on the banking sector in Kenya.

1.3.2 Specific Objectives

i. To investigate whether training influences employee empowerment in an

organization.

ii. To establish the extent to which reward influences employee empowerment in an

organization.

iii. To determine whether the organization structure influences employee

empowerment in an organization.

iv. To find out how organization culture influences employee empowerment in an

organization.

1.4 Research Questions

i. Does training influences employee empowerment in an organization?

ii. What is the extent to which reward influences employee empowerment in an

organization?

iii. Does organization structure influence employee empowerment in an organization?

iv. How does organization culture influence employee empowerment in an

organization?

7

1.5 Justification

This study was meant to carry out an analysis on factors affecting employee

empowerment in an organization with a focus on the banking sector in Kenya.

Banking sectors is considered to be a driving force to countries progressiveness and its

performance can be used to read the mood of an economy (Kinusi, 2010).

Organization management the study was considered important as it will contributes to

generation of knowledge and information for decision making that would improve

methods and practices in human recourse planning to ensure employee empowerment as

a role/function. The study provides data that can help the organization management to

enhance on the strategic and vision plans.

Government of Kenya The government of Kenya also stands a chance to benefit as being

the number one employer in the country through the Ministry of Public Service and its

state corporations. The data provided in the study is helpful in monitoring the

organization achievements toward the millennium development goals as well as visions

2030 objectives.

Other Researchers The information will also provide data to assist researchers,

development practitioners, academicians, policy makers, planners and programme

implementers to monitor and evaluate existing practices in human resource and whether

and how employee empowerment can be developed or addressed.

1.6 Scope of the Study

According to Central Bank of Kenya, (2010) bank licensing in the country as at March

2010 there were 44 licensed commercial banks and 1 mortgage finance company. The

study considered collecting data regionally within the banking outlets in Nairobi central

business district area. Focus groups were varied levels of positions within the banking

industry.

8

1.7 Definition of TermsEmployee

A person in the service of another under any contract of hire, express or implied, oral or

written, where the employer has the power or right to control and direct the employee in

the material details of how the work is to be performed (Arthur, 1995).

Empowerment

Empowerment refers to increasing the spiritual, political, social, or economic strength of

individuals and communities. It often involves the empowered developing confidence in

their own capacities (Arthur, 1995).

Organization

An organization is a social arrangement which pursues collective goals, controls its own

performance, and has a boundary separating it from its environment (Harrison, 2005).

Training and Development

Harrison (2005) states that in the field of human resource management, training and

development are fields concerned with organizational activity aimed at bettering the

performance of individuals and groups in organization settings.

Reward Management

The term reward management covers both the strategy and the practice of pay systems.

Traditionally, human resource or personnel sections have been concerned with levels and

schemes of payment whereas the process of paying employees - the payroll function - has

been the responsibility of finance departments.

Organisation Structure

Structure is a valuable tool in achieving coordination, as it specifies reporting

relationships (who reports to whom), delineates formal communication channels, and

describes how separate actions of individuals are linked together. (Nelson and

Pasternack, 2005)

9

Organisation Culture

Organizational culture describes the psychology, attitudes, experiences, beliefs and

values (personal and cultural values) of an organization. It is the specific collection of

values and norms that are shared by people and groups in an organization and that control

the way they interact with each other and with stakeholders outside the organization. (Hill

and Gareth, 2001)

10

CHAPTER TWO

LITERATURE REVIEW

2.1 IntroductionThis chapter highlights the relevant literature and other studies carried out in the area by

various institutions and personalities. It evaluates and correlates their findings which

could be useful for further study on the same topic; the study is triggered by the desire to

find out factors influencing employee empowerment in an organization.

2.2 Theoretical Literature

2.2.1 Expectancy Theory According to Vroom (1964) in a general approach expectancy theory is about the mental

processes regarding choice, or choosing. It explains the processes that an individual

undergoes to make choices. In organizational behaviour study, expectancy theory is a

motivation theory first proposed by Victors Vroom of the Yale School of Management.

Expectancy theory predicts that employees in an organization will be motivated when

they believe that: The reward they are receiving is adequate to offset the amount of work

being done. These predicted organizational rewards are valued by the employee in

question. This theory emphasizes the needs for organizations to relate rewards directly to

performance and to ensure that the rewards provided are those rewards deserved and

wanted by the recipients. This theory is used to indicate an approach to empowering the

employees.

Vroom (1964) defines motivation as a process governing choices among alternative

forms of voluntary activities, a process controlled by the individual. The individual

makes choices based on estimates of how well the expected results of a given behavior

are going to match up with or eventually lead to the desired results. Motivation is a

product of the individual’s expectancy that a certain effort will lead to the intended

performance, the instrumentality of this performance to achieving a certain result, and the

11

desirability of this result for the individual, known as valence. In this context a motivated

employee feel empowered on work performance.

Rao, (2000) states that in order to enhance the performance-outcome tie, managers should

use systems that tie rewards very closely to performance. Managers also need to ensure

that the rewards provided are deserved and wanted by the recipients. In order to improve

the effort-performance tie, managers should engage in training to improve their

capabilities and improve their belief that added effort will in fact lead to better

performance

Rao, (2000) states that Vroom's theory assumes that behavior results from conscious

choices among alternatives whose purpose it is to maximize pleasure and to minimize

pain. Vroom (1964) suggested that the relationship between people's behavior at work

and their goals was not as simple as was first imagined by other scientists. Vroom

realized that an employee's performance is based on individual factors such as

personality, skills, knowledge, experience and abilities.

Vroom introduces three variables within the expectancy theory which are valence (V),

expectancy (E) and instrumentality (I). The three elements are important behind choosing

one element over another because they are clearly defined: effort-performance

expectancy (E>P expectancy), performance-outcome expectancy (P>O expectancy).

E>P expectancy: Our assessment of the probability our efforts will lead to the required

performance level. P>O expectancy: Our assessment of the probability our successful

performance will lead to certain outcomes (Vroom, 1964)

Rao (2000) states that on Vroom’s model is based on three concepts: Valence - Strength

of an individual’s preference for a particular outcome. For the valence to be positive, the

person must prefer attaining the outcome to not attaining it. Instrumentality – Means of

the first level outcome in obtaining the desired second level outcome; the degree to which

a first level outcome will lead to the second level outcome. Expectancy - Probability or

strength of belief that a particular action will lead to a particular first level outcome.

12

2.2.2 Goal Theory Goal theory holds that goals are important regulators of human behavior and posits a

strong relationship between goal difficulty and performance, with harder goals resulting

in a greater effort than easier goals (Martin and Manning, 1995). Goal theory is normally

used to empower employee in a given task, it’s also used in motivating workers to

performance and productivity improvements. The theory examines goal-setting activities

from an individual perspective.

Ivancevich, (1998) says that goal setting is designed to improve an individual's ability to

set and achieve goals. Goals are the object of an action or what a person intends to

accomplish. Goal setting theory was proposed initially by Locke (1968) and was based on

the understanding of goal setting as a cognitive process of some practical utility. Locke's

(1968) view is that an individual's conscious goals and intentions are the primary

determinants of behavior. The theory places specific emphasis on the importance of

conscious goals in explaining motivated behavior.

Tetlock and Kim, (1987) states that depending on the type of goal given, one can go

about achieving it differently. A directional goal is one where individuals are motivated

to arrive at a particular conclusion. Thinking can be narrowed to selecting beliefs. The

lack of deliberation also tends to make one more optimistic about achieving the goal.

An accuracy goal is one where people are motivated and empowered to arrive at the most

accurate possible conclusion. These occur when the cost of being inaccurate is high.

People invest more effort in achieving accuracy goals, as any deviation costs, and a large

deviation may well more. Their deliberation also makes them realize that there is a real

chance that they will not achieve their goal. When we have an accuracy goal we do not

get to a 'good enough' point and stop thinking about it people tend to continue to search

for improvements. Both methods work by influencing our choice of beliefs and decision-

making rules (Tetlock and Kim, 1987).

Erez and Zidon, (1984) emphasized the need for acceptance of and commitment to goals.

They found that as long as they are agreed, demanding goals lead to better performance

13

than easy ones Erez, (1977) also emphasized the importance of feed back. As Robert,

Smith and Cooper (1992) point out goals inform individuals to achieve particular level of

performance, in order for them to direct and evaluate their actions, while performance

feedback allows the individual to track how well he or she has been doing in relation the

goal, so that, if necessary adjustments in effort direction or possibly task strategies can be

made.

Erez, (2002) notes that there are at least five ways to convince people that goal attainment

is worthwhile: These include (a) eliciting a public commitment to goals, (b)

communicating an inspiring vision, (c) using an empathy box analysis (Latham, 2001) to

understand and alter the perceived consequences of goal commitment, (d) providing

financial incentives for goal attainment, and (e) expressing confidence that the goal will

be achieved.

Under Jack Welch’s leadership, General Electric (GE) was well known for its

encouragement of “stretch goals” which challenge employees to achieve objectives that

they do not yet know how to reach (Kerr and Landauer, 2004). GE was also renowned for

the threatening policy of firing the bottom 10 percent of employees on annual

performance ratings. Given the high task complexity, stress, and work overload that

increasingly characterizes modern workplaces, Erez, (2002) investigated performance

differences depending on whether difficult tasks are framed as a challenge providing an

opportunity for self-growth, or as a threat regarding which effective strategies to deal

with it are not readily available. As hypothesized, challenge appraisals yielded

consistently better performance than threat appraisals. However, those who viewed the

task as a threat performed better when they had learning goals rather than performance

outcome goals. Finally, difficult performance goals induced high adaptation to change

when the work context was perceived as challenging, but poor adaptation and

performance when the work context was perceived as threatening.

Regardless of whether people adopt a difficult learning or performance goal, errors are

bound to occur during the process of goal pursuit.

14

From a psychological perspective, errors also provide important information that can

enable learning and potentially reduce or eliminate future errors.

Michael Frese and colleagues (Frese et al., 1991) thus developed the concept of error

management, whereby errors encountered during the learning process are construed as

opportunities to learn what does not work.

In summary, goals are generally best framed positively rather than negatively. Goals can

empower individuals at work when well practiced. Especially when goals are

challenging, it is important to help people to frame them as a challenge from which they

may learn, rather than a threat in which failure is foreseeable. It is prudent for managers

to emphasize that errors along the path to goal attainment are a natural part of the

learning process. This can reduce emotional distraction and promote the deep learning

employees need to effectively tackle novel challenges as they arise.

2.2.3 Equity Theory Equity Theory attempts to explain relational satisfaction in terms of perceptions of

fair/unfair distributions of resources within interpersonal relationships. Equity theory is

considered as one of the justice theories. It was first developed in 1963 by John Stacey

Adams, a workplace and behavioral psychologist, who asserted that employees seek to

maintain equity between the inputs that they bring to a job and the outcomes that they

receive from it against the perceived inputs and outcomes of others (Adams, 1965). The

belief is that people value fair treatment which causes them to be motivated to keep the

fairness maintained within the relationships of their co-workers and the organization. The

structure of equity in the workplace is based on the ratio of inputs to outcomes. Inputs are

the contributions made by the employee for the organization; this includes the work done

by the employees and the behavior brought by the employee as well as their skills and

other useful experiences the employee may contribute for the good of the company.

Equity theory proposes that individuals who perceive themselves as either under-

rewarded or over-rewarded will experience distress, and that this distress leads to efforts

to restore equity within the relationship. It focuses on determining whether the

15

distribution of resources is fair to both relational partners. Equity is measured by

comparing the ratios of contributions and benefits of each person within the relationship.

Partners do not have to receive equal benefits (such as receiving the same amount of love,

care, and financial security) or make equal contributions (such as investing the same

amount of effort, time, and financial resources), as long as the ratio between these

benefits and contributions is similar. Much like other prevalent theories of motivation,

such as Maslow’s hierarchy of needs, Equity Theory acknowledges that subtle and

variable individual factors affect each person’s assessment and perception of their

relationship with their relational partners (Guerrero et al., 2007).

According to Adams (1965), anger is induced by underpayment inequity and guilt is

induced with overpayment equity (Spector 2008). Payment whether hourly wage or

salary, is the main concern and therefore the cause of equity or inequity in most cases. In

any position, an employee wants to feel that their contributions and work performance are

being rewarded with their pay. If an employee feels underpaid then it will result in the

employee feeling hostile towards the organization and perhaps their co-workers, which

may result the employee not performing well at work anymore. It is the subtle variables

that also play an important role for the feeling of equity. Just the idea of recognition for

the job performance and the mere act of thanking the employee will cause a feeling of

satisfaction and therefore help the employee feel worthwhile and have more outcomes.

Spector, (2008) notes that an individual will consider that he is treated fairly if he

perceives the ratio of his inputs to his outcomes to be equivalent to those around him.

Thus, all else being equal, it would be acceptable for a more senior colleague to receive

higher compensation, since the value of his experience (an input) is higher. The way

people base their experience with satisfaction for their job is to make comparisons with

themselves to the people they work with. If an employee notices that another person is

getting more recognition and rewards for their contributions, even when both have done

the same amount and quality of work, it would persuade the employee to be dissatisfied.

This dissatisfaction would result in the employee feeling underappreciated and perhaps

worthless. This is in direct contrast with the idea of equity theory, the idea is to have the

16

rewards (outcomes) be directly related with the quality and quantity of the employees

contributions (inputs). If both employees were perhaps rewarded the same, it would help

the workforce realize that the organization is fair, observant, and appreciative.

Equity theory has been widely applied to business settings by Industrial Psychologists to

describe the relationship between an employee's motivation and his or her perception of

equitable or inequitable treatment. In a business setting, the relevant dyadic relationship

is that between employee and employer. As in marriage and other contractual dyadic

relationships, Equity Theory assumes that employees seek to maintain an equitable ratio

between the inputs they bring to the relationship and the outcomes they receive from it

(Adams, 1965). Equity Theory in business, however, introduces the concept of social

comparison, whereby employees evaluate their own input/output ratios based on their

comparison with the input/outcome ratios of other employees (Carrell and Dittrich,

1978).

Inputs in this context include the employee’s time, expertise, qualifications, experience,

intangible personal qualities such as drive and ambition, and interpersonal skills.

Outcomes include monetary compensation, perquisites, benefits, and flexible work

arrangements and empowerment. Employees who perceive inequity will seek to reduce it,

either by distorting inputs and/or outcomes in their own minds directly altering inputs

and/or outcomes, or leaving the organization (Carrell and Dittrich, 1978). Thus, the

theory has wide-reaching implications for employee morale, efficiency, productivity, and

turnover.

17

2.3 Conceptual Framework

A conceptual framework is used in research to outline possible courses of action or to

present a preferred approach to an idea or thought. Kakutani (2009) the conceptual

framework aims to update and refine the existing concepts to reflect the changes. It is a

theoretical structure of assumptions, principles, and rules that hold together the ideas

comprising a broad concept. The figure 2.1 below is the study’s conceptual framework.

Figure 2.1 Conceptual Framework

Independent Variable Dependent Variable

The frame work has been further explained below.

18

Training

EMPLOYEE EMPOWERMENT

Organisation Structure

Organisation Culture

Reward

2.3.1 Training According to Anthony (1999) training involves learning and teaching employees due to a

need for development of skills and knowledge. Training encompasses three main

activities: training, education, and development. It is noted that in most organizations,

they encompass three separate, although interrelated, activities: Training: This activity is

both focused upon, and evaluated against, the job that an individual currently holds.

Education: This activity focuses upon the jobs that an individual may potentially hold in

the future, and is evaluated against those jobs.

Harrison (2005) states that in the field of human resource management, training is a

field concerned with organizational activity aimed at bettering the performance of

individuals and groups in organization settings. It has been known by several names,

including employee development, human resource development, and learning and

development.

Employee Development was seen as too evocative of the master-slave relationship

between employer and employee for those who refer to their employees as partners or

associates to be comfortable with. Human Resource Development was rejected by

academics, who objected to the idea that people were resources an idea that they felt to be

demeaning to the individual. Chattered Institute of Personnel Development (CIPD)

settled upon Learning and Development, although that was itself not free from problems,

"learning" being an over general and ambiguous name. Moreover, the field is still widely

known by the other names (Harrison, 2005)

The stakeholders training are categorized into several classes. The sponsors of training

and development are senior managers. The clients of training and development are

business planners. Line managers are responsible for coaching, resources, and

performance. The participants are those who actually undergo the processes. The

facilitators are Human Resource Management staff. And the providers are specialists in

the field. Each of these groups has its own agenda and motivations, which sometimes

conflict with the agendas and motivations of the others.

19

It is the assumption of this study that employees are well empowered through training

and development. By so doing it is also assumed that it can help resolve labour turnover

as a result of lack of empowerment.

Arthur (1995) states that training an employee to get along well with authority and with

people who entertain diverse points of view is one of the best guarantees of long-term

success. Talent, knowledge, and skill alone won't compensate for a sour relationship with

a superior, peer, or customer.

2.3.2 Reward/Compensation

Reward is what employee gets in return for services rendered. According to Armstrong

and Tina (2005) one of the aims of broad brushed reward strategy is to use the approach

to the development of employment relationship and the work environment which will

enhance commitment and engagement so as to provide more engagement and

opportunities for people to be valued and recognized in an organization. The philosophy

of reward management recognises that it must be strategic in the sense that it addresses

longer-term issues relating to how people should be valued for what they do and what

they achieve. Reward strategies and the process that are required to implement them have

to flow from the business strategy (Armstrong and Tina, 2005).

Reward management adopts a ‘total reward’ approach which emphasises the importance

of considering all aspects of reward as a coherent whole which is integrated with other

Human Resource initiatives designed to achieve the motivation, commitment,

engagement and development of employees. An example is the introduction of

intergraded approach to reward management such as personal development and spelling

out career opportunities. Armstrong and Tina, (2005) notes that empowerment and staff

motivation should be accompanied with justified pay.

Amodt, (2007) observed that the basis for rewards systems are conditioning principles,

which state that employees will engage in behavior for which they are rewarded and

avoid behavior for which they are punished. Thus, if employees are rewarded for not

20

making errors, they are more likely to produce high quality work. If employees are

rewarded for the amount of work done, they will place less emphasis on quality and try to

increase the quantity. If employees are not rewarded or compensated for any behavior,

they will search for behaviors which will be rewarded. Unfortunately, these might include

absenteeism and carelessness which result in low performance. Rewards need to be

effective in encouraging employees to work towards the needs and the objectives.

Rewards need to be effective in encouraging employees to work towards the needs and

the objective of the organization. To be effective, remuneration systems need to be based

on a sound understanding of how people at work are motivated.

Research has shown that rewarding employees will often lead to increased motivation

and performance (Amodt, 2007). A successful incentives program will not only increase

profits, but also inspire staff loyalty and raise morale. The manner in which reward is

observed in any given organization stands to influence the manner to with the employees

are motivated in their work environment. Organizations are required to take continuous

stock of both the economic landscape and their workforce profile. They can and must

identify measures that are financially credible ones and can help them retain their talent

and emerge in an unpredictable future in the best-possible shape.

2.3.3 Organization Structure

According to Nelson and Pasternack, (2005) Organizational structure refers to how

individual and team work within an organization are coordinated to achieve

organizational goals and objectives. Nelson and Pasternack (2005) observe organization

structure to be a form of employee empowerment however the further state that it doesn’t

end at the organization structure since not all members of an organization are normally

reflected in the structure as individual work needs to be coordinated and managed to

lower levels. Structure is a valuable tool in achieving coordination, as it specifies

reporting relationships (who reports to whom), delineates formal communication

channels, and describes how separate actions of individuals are linked together.

21

Pasternack (2005) Organizations can function within a number of different structures,

each possessing distinct advantages and disadvantages. Although any structure that is not

properly managed will be plagued with issues, some organizational models are better

equipped for particular environments and tasks and this is where employee empowerment

comes in.

Organizations can be regarded as people management systems. They range from simple

hierarchies along traditional lines to complex networks dependent on computer systems

and telecommunications. Human resource managers can encourage organizations to

adopt strategies (for their structures) which foster both cost-effectiveness and employee

commitment. Organizational structures can be classified into a number of types,

including functional, divisional, matrix, federations and networks. (Bradt, 1998)

According to Gunneson, (1997) empowerment is portrayed in the structure by making the

structure functional and relates to the capacity of an organization to operate profitably

while adapting to given environment to meet the complex needs of a dynamic and

competitive environment. Traditional organisational structures are being tested by

demands for greater adaptability and flexibility. Highly bureaucratic or mechanistic

(Burns & Stalker, 1961) organisational structures are making way for more organic

structural approaches.

Drucker, (1999) indicates that throughout the many discussions on the merits of various

organisational structures it is also made clear that in reconfiguring an organisation to

enhance its performance, there is no one appropriate or ideal structure. Further, there is

agreement that many organisations have hybrid structures in which a several different

structures happily co-exist and as a result staff in such structure feel empowered as

demarcations are clearly cut.

22

2.3.4 Organization Culture

According to Khan, (2005) the success of any company depends in part on the match

between individuals and the culture of the organization. Organizational culture is the set

of operating principles that determine how people behave within the context of the

company. Underlying the observable behaviors of people are the beliefs, values, and

assumptions that dictate their actions.

Khan, (2005) further states that as culture is developed based on traditions, beliefs,

rituals, information and language (communication) to develop an organizational culture

of empowerment one need to understand how all these factors come about. The primary

issues are the development of a shared vision, full understanding by all involved of the

mission, setting of clear goals and the setting of clearly understood boundaries for

decision making, The outcome to be sought is an improved level of staff competency and

the competency development of course needs to be focused on satisfying both internal

and external customers. Any competency development program adopted needs to include

strong levels of support in the form of mentoring for development of operational skills,

organizational cultural support and the encouragement of risk-taking and empowering

staff in full capacities.

According to Burman and Evans, (2008) leadership and culture affect the level of

empowerment in an organisation rather than management and describe the difference to

be an influence to impact on the productivity level. When one wants to change an aspect

of the culture of an organization one has to keep in consideration that this is a long term

project. For companies with very strong and specific culture it is harder to empower any

how as there are set cultures to be followed.

23

2.4 Empirical LiteratureStrong wind of change have forced companies, which have been limited to local and

national markets with their limited environmental conditions, to move to big arenas of

Olympics where competition is at a global level. The competitors are numerous and

competition is quite tough under the conditions of these new competition areas. In this

arena there is no place for protectionism, doping and any irrational behaviour.

Under these conditions companies have to design and shape their organization structure,

management understanding, company competences and outputs according to new

competition conditions in order to compete. The conditions such as customers demand,

environmental pressure, quality standards etc. and their partnership, have caused

tendency to transform similar characteristic make-up of the companies under the same

market conditions (Ataman, 2003). Because of this tendency, the market shares and the

profit margins have been decreased by increasing the pressure on the sales price due to

increase of similar products in the same market and the priority given to similar products

with the minimum price (Kırım, 2005).

The Human Resource of company, different from components of others is of the type that

cannot be copied/imitated. For this reason, it has a strategic role to be effective to gain

differentiation competence of company and to differentiating. However, human resource

in company has to meet the requirements for this role in terms of qualifications and

power in order to take over such a role. Employee empowerment, which is one of the

concepts of new management, gaining from different knowledge, skill and talent of the

employees at the highest level, plays an important role in internal and external customer

satisfaction.

Employee empowerment, which came up in 1990s, is known as one of the new

management concepts (Hanold, 1997; 2002). However, when the relevant literature is

analyzed, this concept is understood to have a longer history than previously thought

(Nykodym et.al., 1994 Wilkinson, 1998). With its roots Human Rights Movement of

1950 and 1960s, empowerment has rather closely related to the various concepts and

techniques designed to democratize the work-place (Elmuti, 1997). As a matter of fact

24

empowerment was given place in the publications of Pre-1990 that discussed topics such

as work enrichment, participative management, employee motivation, total quality -

control, individual development, quality circles and strategic planning. Without any

doubt, perceptible increase in the number of articles related to employee empowerment

was seen after 1990s (Honold, 1997)

Empowerment is one of the most effective ways of enabling employees at all levels to

use their creative abilities to improve the performance of the organization they work for,

and the quality of their own working life. Employee empowerment is a kind of the risk

management process whereby a culture of empowerment is developed information in the

form of a shared vision, clear goals, boundaries for decision making, and the results of

efforts and their impact on the whole is shared competency in the form of training and

experience is developed; resources, or the competency to obtain them when needed to be

effective in their jobs, are provided; and support in the form of mentoring, cultural

support, and encouragement of risk-taking is provided (Chaturvedi, 2008).

A more operational-level and process-oriented definition of empowerment was offered by

Bowen and Lawler. They define empowerment “as sharing with front-line employees the

information about an organization’s performance, information about rewards based on the

organization’s performance, knowledge that enables employees to understand and

contribute to organizational performance, and giving employees the power to make

decisions that influence organizational direction and performance”(Ugbaro and Obeng,

2000).

An empowerment from top to bottom or from managers to employees means giving

power to employee at four dimensions that consists of authority, specialization, resource

and personality. Authority is the power dimension which makes up the essence of

empowerment or the body. The other power dimensions are the characteristic which uses

authoritative power effectively, supportively, easily and complementary. The authority

dimension of empowerment, the right to take decision related to the meaning, the

environment and content of the work done by employees; the specialization dimension,

25

the knowledge and skill of decision making/application; the resource dimension, being

the most important sharing of knowledge, the possibility of attaining and using resources

related to their work; the personality dimension, however, are the self-confidence to use

the authority and motivation (Kocel, 2003).

When the empowerment in the organization is seen from down to up or when seen from

the employee’s point of view, it is seen as something perceived by them or the

psychological dimension can be seen. Some of the main factors that determine the

empowerment perception are as follows: (meaning) finding the work done by the

employee as meaningful(important); (competence) to feel oneself as sufficient, (self-

determination) the possibility of making choice and (impact) the degree of effectiveness

perceived over certain results in the work process (Ugboro & Obeng, 2000).

A study by Nykodym, (1994), Kocel, (2003) the qualities of employees, who will be

empowered, are important organizational and managerial atmosphere are the principal

variables of empowerment. These include the employees not being desirous to

development, not having critical thinking skills, not being open to change, not having

high self-confidence and not being favourable to co-operation (Ceylan, 2002); the level

of feeling important, self-sufficient, and efficient and having authority at work. (Robbins

et al, 2002)

Whether the organization is flat and whether it has organic structure; performance

appraisal, feedback, rewarding (Born & Molleman 1996), human resources procuration,

protection training and communication system; the level of authority given to employee

by the work definition; The encouragement and motivation to decision making by

managers to their subordinates; creating a participation culture and creation of a sharing

vision; emphasizing flexibility and autonomy, sharing information, inspiring confidence

and the level of managers trust to their subordinates.(Mattews, 2003)

A case study by Paterson and Spangs (2006) aimed to find out what characterizes the

Brazilian company Semco and the Swedish company Freys hotels as private owned

26

democratic companies, and whether the mechanisms used to apply and carry on the

democratic process are sufficient or not to truly make the workplaces democratic. The

way this study is conducted, is by analyzing the definition of workplace democracy and

its managerial approaches. To be able to map and study the democratic process in the

companies, the authors chose to analyze the parts of the organization that sustain

democracy. These parts are structure, information/communication process, individuals

and decision-making.

The theories applied, are theoretical thoughts and definitions of the managerial

approaches (empowerment and participation) used to introduce democracy at the

workplace. In addition a political framework for analyzing democracy is used. Five

previous studies were also highlighted in the theory chapter, in order to reinforce the

authors’ choice of theories and give a broaden understanding of the subject studied in this

essay. For analysis, seven hypotheses characterizing a democratic company and the use

of workplace democracy were tested. The analysis was carried out using collected

primary and secondary data from books, articles, interviews and inquiries with employees

from Semco and Freys Hotels. Another interview was conducted with Professor Carl Von

Otter at the National Institute for Working Life, who explained the meaning of a

democratic corporation.

The results show that the hypotheses can be used to describe workplace democracy.

However, the managerial approaches are not sufficient to make a company democratic

since they can be used in order to restrain employee participation. Participation and

involvement should be the basic idea that comes with employment. Another conclusion

from the study is that the application and success of workplace democracy depends on the

national context (Paterson and Spangs 2006)

27

2.5 Research GapsThere are concerns in the gathered literature about the perceptions on employee

empowerment and other than the stated variable it can be noted that there is minimal

understanding of the term empowerment. The study also notes that significant lack of

knowledge with regards to employee empowerment, not only at the conceptual level, but

at the practice level too. The danger of practicing employee empowerment without an

adequate knowledge base is unsafe for organisations; it is confusing and counter-

productive, as organisations do not achieve what they set out to achieve.

This research is important and may be justified on several grounds.  Within the context of

intense competition particularly, managers and organisations are constantly seeking new

sources of competitive advantage.  What is required is a model whereby employees at the

front lines are allocated considerable autonomy and responsibility for decision-making

and problem-solving and management exists ‘not to direct and control or to supervise, but

rather to facilitate and enable.  In line with this argument, a number of authors report that

employee empowerment came to prominence as a management response to rapid

economic and technological change, and an increasingly complex and competitive

external environment. Increasing market competition and the need to comply with quality

standards and award criteria, have forced organisations to think of ways to meet these

demands. As indicated above, one of the ways many organisations choose to do this is to

empower their employees.  However, the problem is that organisations are introducing

employee empowerment without fully understanding what it means or what they are

committing themselves to. It is for these purposes that this study introduces variables

such as training and development, reward, organization culture and organisation

structure.

28

2.6 Conclusion The study reviewed three theories in relation to employee empowerment, these were

expectancy theory which is about the mental processes regarding choice, or choosing.

Goal theory which holds that goals are important regulators of human behavior and posits

a strong relationship between goal difficulty and performance, with harder goals resulting

in a greater effort than easier goals. Equity theory that attempts to explain relational

satisfaction in terms of perceptions of fair/unfair distributions of resources within

interpersonal relationships.

The literature discussed the variable under study where training and development

involves learning and teaching employees due to a need for development of skills and

knowledge. Reward is what employee gets in return for services rendered.

Organizational structure refers to how individual and team work within an organization

are coordinated to achieve organizational goals and objectives.

The literature also notes that organizational culture is the set of operating principles that

determine how people behave within the context of the company. Underlying the

observable behaviors of people are the beliefs, values, and assumptions that dictate their

actions.

According to the reviewed literature it can be noted that globalization, changing

competition, conditions and increasing of similar products cause narrowing of market

share of the companies and forces them to create new markets by product differentiation.

Since it can cause companies to gain differentiation capabilities, human resource has

transformed into the strategically competitive element of a company. Employee

empowerment causes to benefit from different knowledge, skills and capabilities of

human resource at maximum degree Therefore it plays an important role in customer and

employee satisfaction.

29

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 IntroductionThis section sought to address the research methodology employed in data collection. It

identified a research design; bring out the target population as well as a sampling

approach that was employed in the identifying the population used in the study.

3.1 Research Design

This study adopted a descriptive approach. According to William, (2006), descriptive

studies are more formalized and typically structured with clearly stated investigative

questions. Descriptive research was used to investigate the factors influencing employee

empowerment in an organisation. According to Mugenda and Mugenda (2003)

descriptive research determines and reports the way things are. It is restricted to fact

finding and may result in the formulation of important principles.

3.2 Population

The focus of this study was on the banking industry. This research was carried out within

Nairobi region where banking outlets in Nairobi central business district area were

considered for the study. According to Central Bank of Kenya, bank licensing in the

country as at March 2010 there were 44 licensed commercial banks. Focus group were

varied levels of positions within the banking industry such as the Management, Finance

Department, Administration, Human Resource and Operations Positions.

Of the observed population 36% were from the finance department, Operations Positions

28%, Management/Administrative 20% and human resource 16%. These results stated

the varied positions in the organisation.

3.3 Sampling Size and Sampling TechniquesBefore the start of data collection, pre-testing of the questionnaire was done to test the

reliability of the instruments and the validity of a study (Sekaran, 2003). The validity of

30

qualitative research as determining whether the research truly measures that, which it was

intended to measure or how truthful the research results are (Joppe, 2000). Cooper &

Schindler (2003), pilot study was thus conducted to detect weakness in design and

instrumentation and to provide proxy data for selection of a sample.

In order to test reliability of the instruments, internal consistency techniques were

employed using the Cronbach’s Alpha. Coefficient of 0.6 – 0.7 is a commonly accepted

rule of thumb that indicates acceptable reliability and 0.8 or higher indicates good

reliability (Mugenda, 2008).

3.4 Data collection instruments Main data collection instrument was structured questionnaires. This was because

questioning gave the respondents the required opportunity to answer the questions

willingly and with an open mind (Mugenda & Mungenda, 1999). Open questions were

prepared to give the respondents the liberty to discus their opinions where necessary. The

questionnaire avoided leading questions so as to provide flexibility of opinions.

The questionnaire was a likert scale in nature. William (2006), a likert scale commonly

used in questionnaire, and is the most widely used scale in survey research, such that the

term is often used interchangeably with rating scale even though the two are not

synonymous. When responding to a Likert questionnaire item, respondents specified their

level of agreement to a statement.

3.5 Data Collection ProceduresThe administration of the questionnaires was done by the “drop and pick” method that

allowed respondents ample time to complete the questionnaires. The respondents

approval to participate in the survey were sought before administering, the questionnaire.

A letter of identification introducing the researcher was obtained from the institution of

learning.

31

3.6 Reliability and Validity

Reliability is a measure of the degree to which a research instrument yields consistent

results or data after repeated trials. (Mugenda & Mungenda, 1999) Reliability in research

is influenced by random error. As` random error increases reliability decreases the

subjects, interviewers fatigue, interviewer bias etc (Mugenda & Mungenda, 1999).

Validity is the accuracy and meaning fullness of inferences which are based on the

research results. It is the degree to which results obtained from the analysis of data

actually represent the phenomena under study. (Mugenda & Mungenda, 1999) validity

therefore will have to do with how accurately the data obtained in the study represents the

variables of the study.

To determine the reliability and validity a pre test on the primary tools were conducted to

find out whether there are inadequacies such as luck of enough space to respond or any

ambiguous questions.

3.7 Data Processing and AnalysisThe data collected was coded and entered into a spreadsheet and analyzed using

quantitative techniques so as to gather as much information as possible regarding Internal

Promotion. This involved creating statistics namely percentages and frequencies. The

data was then presented using tables and charts. Descriptive statistics specifically

measures of central tendency (Percentages, and frequencies) was analyze using the aid of

Statistical Package for Social Science (SPSS 16.0 version), which was used in this study,

offers extensive data- handling capabilities and numerous statistical analysis routines that

can analyze small to very large amounts of data statistics (Obure, 2002).

Inferential statistics allow one to draw conclusions about the unknown parameters of a

population based on statistics which describes a sample from that population.

Measurement for each variable was done by having a simple regression for each variable.

This indicated the variance shared by the independent variable and the dependent

variable.

32

CHAPTER FOUR

DATA ANALYSIS, INTERPRETATION AND PRESENTATION

4.1 Introduction The study sought to establish factors affecting employee empowerment in an

organization with a focus on the banking sector in Kenya. This chapter contains the

findings of the study and discussion on findings. The findings answer the research

questions. Presentations have been made in a statistical form enumerated in tables.

4.2 Responses Rate The table 4.1 tabulates the response rate of the respondents that participated in the study.

The responses were that out of 70 respondents surveyed, 50 questionnaires were returned

fully filled. This made the respondents rate to be 71.4% representing the banking sector.

Mugenda and Mugenda (2003) argue that a response rate of over (70%) is very good for

descriptive research.

Table 4.1: Response Rate

Respondents Questionnaires Questionnaires Response rate

Administered filled and returned

Banks in Nairobi area 70 50 71.4%

33

4.3 Scale Reliability Results Table 4.2 Indicates that each item had an overall alpha above 0.7. Mugenda and

Mungenda (2003) recommend for 0.7 and above thresh hold. This value indicates strong

consistency among the three indicators.

Table 4.2 Scale Reliability ResultsItem Cronbach’s Alpha No. of Items

Training and Development .716 4

Reward/Compensation .703 4

Organisation Structure .728 4

Organisation Culture .733 4

4.4 Job title in the OrganizationIn the table 4.3 above on respondent’s job title in the organization 36% were from the

finance department, Operations Positions 28%, Management/Administrative 20% and

human resource 16%. These results stated the varied positions in the organisation. It can

be stated the major functions of the banking sectors were well represented in the study.

Table 4.3 Respondents Job title in the Organization

Job title in the Organization Percentage

Management/Administrative 26 %

Finance Department 36 %

Human Resource 16 %

Operations Positions 28 %

34

4.5 Level of education Response The sector under study is mainly comprised by University and Collage graduates as

indicated in the table 4.4 above where 48% were undergraduates, masters 32% and

doctorate degree holders were 20%. According to Boschken, (1994) a company’s ability

to capitalize on its employees’ ideas and know-how, and its commitment to training and

education, can enhance productivity and add value.

Table 4.4 Respondents Level of Education

Level of education Response Percentage

Doctorate Degree 20 %

Masters 32 %

Undergraduate 48 %

4.6 Respondents Length of work in the OrganizationThe table 4.5 above states that 40% of the respondents had served in the organisation for

a period of 2-3 years, 24% had served for a period of 1-2 years, those of over 3 years of

service were 20% and below 1 year were 16%. As Joskow (1997), showed, under these

circumstances the length of the contract will be related to the size of those possible

expropriations and consequently the magnitude of the specific investments. This implies

that majority of the employees had been in the organization for more than six years and

this shows that the organization is quite stable. The study was at a better position to get

true positions within the organisation as have services range varied in the organizations

studied.

35

Table 4.5 Respondents Length of work

Length of work Respondents Percentage

Below 1 Year 8 16%

1 – 2 Years 12 24%

2 - 3 Years 20 40%

Over 3 Years 10 20%

4.7 Level of familiarity with empowerment issues in the organizationThe table 4.6 sought to interpret the respondent’s level of familiarity with empowerment

issues in the organization and it was noted that 40% were very familiar, 36% were

familiar, 20% were fairly familiar and 8% were not familiar. With the familiarity level at

a high of 40% the study was able to come up with concrete results of the study. As

observed in the study the level of familiarity with empowerment issues in the

organization is seen to be known by many in the organisation considering most seek to be

empowered to enable them carry on with their work duties.

Table 4.6 Level of familiarity with empowerment issues in the organization

Response Percentage

Very Familiar 40%

Familiar 6%

Fairly Familiar 20%

Not Familiar 8%

36

4.8 Training influences employee empowermentThe table 4.7 state that 32% of the respondents were undecided stating that they were not

very sure whether training influences employee empowerment, 28% were in strong

agreement, 24% in agreement, 10% strongly disagreed while 6% disagreed. The results

varied considering some banks were more developed that others hence training matters

and how they are handled vary. Arthur (1995) states that training an employee to get

along well with authority and with people who entertain diverse points of view is one of

the best guarantees of long-term success.

Table 4.7 Training influences employee empowerment

Response Percentage

Strongly Disagree 10%

Disagree 6%

Neutral 32%

Agree 24%

Strongly Agree 28%

4.9 Training approach adopted by the organization influence employee empowermentTable 4.8 on response on whether training approach adopted by the organization

influence employee empowerment, finding show that 32% were undecided or neutral a

state of not being sure, 28% in strong agreement, 24% in agreement while 10% strongly

disagreed and 6% disagreed. The study notes that with the nature of response achieved

training and development approach adopted by the organization influence employee

empowerment in varied ways. It is the assumption of this study that employees are well

empowered through training and development. By so doing it is also assumed that it can

help resolve labour turnover as a result of lack of empowerment. Harrison, (2005)

Employee Development was seen as too evocative of the master-slave relationship

between employer and employee for those who refer to their employees as partners or

associates to be comfortable with. Human Resource Development was rejected by

37

academics, who objected to the idea that people were resources an idea that they felt to be

demeaning to the individual. Chattered Institute of Personnel Development (CIPD)

settled upon Learning and Development, although that was itself not free from problems,

"learning" being an over general and ambiguous name. Moreover, the field is still widely

known by the other names

Table 4.8 Response on whether training approach adopted by the organization influence employee empowerment

Response Percentage

Strongly Disagree 10%

Disagree 6%

Neutral 32%

Agree 24%

Strongly Agree 28%

4.10 The organizations current reward conditionTable 4.9 Summaries rating on the organizations current reward condition and it can be

noted that rewards in the observed organizations can be said to be fair considering the

nature of response in the below. Armstrong and Tina, (2005) notes that empowerment

and staff motivation should be accompanied with justified pay. The philosophy of reward

management recognises that it must be strategic in the sense that it addresses longer-term

issues relating to how people should be valued for what they do and what they achieve.

Reward strategies and the process that are required to implement them have to flow from

the business strategy (Armstrong and Tina, 2005).

38

Table 4.9 Rating on the organizations current reward conditionResponse Percentage

Good 40%

Fair 46%

Poor 32%

4.11 Reward influences employee empowerment in the organizationThe table 4.10 indicates the extent to which reward influences employee empowerment in

the organization were noted to be a very high extent by 64% of the respondents, high

extent 20% and 16% average extent. The study therefore notes that reward/compensation

is considered to be very important and determines how work in the organisation

employees performs its functions. Reward management adopts a ‘total reward’ approach

which emphasises the importance of considering all aspects of reward as a coherent

whole which is integrated with other Human Resource initiatives designed to achieve the

motivation, commitment, engagement and development of employees. An example is the

introduction of intergraded approach to reward management such as personal

development and spelling out career opportunities. Armstrong and Tina, (2005) notes that

empowerment and staff motivation should be accompanied with justified pay.

Table 4.10 Extent to which reward influences employee empowerment in the organization

Response Percentage

Very high extent 64%

High extent 20%

Average extent 16%

39

4.12 Reward that greatly influence employee empowerment Indicators on reward that greatly influence employee empowerment are noted as

incentives pay plan 36% wage surveys 32%, Job evaluation 20% and job analysis 12%.

The study notes that the observed organisation have different ways and means of

determining how reward is approached and the approaches adopted are of varied level

influence. Amodt, (2007) observed that the basis for rewards systems are conditioning

principles, which state that employees will engage in behavior for which they are

rewarded and avoid behavior for which they are punished. Thus, if employees are

rewarded for not making errors, they are more likely to produce high quality work. If

employees are rewarded for the amount of work done, they will place less emphasis on

quality and try to increase the quantity. If employees are not rewarded or compensated

for any behavior, they will search for behaviors which will be rewarded. Unfortunately,

these might include absenteeism and carelessness which result in low performance.

Rewards need to be effective in encouraging employees to work towards the needs and

the objectives. Rewards need to be effective in encouraging employees to work towards

the needs and the objective of the organization. To be effective, remuneration systems

need to be based on a sound understanding of how people at work are motivated.

Table 4.11 Indicators on reward that greatly influence employee empowerment

Response Percentage

Incentives pay plan 36 %

Wage surveys 32 %

Job evaluation 20 %

Job analysis 12 %

40

4.13 Analysis on Organization Structure The table 4.13 above indicates that organization structure influence employee

empowerment in the organization as noted by 36% in agreement and 20% who strongly

agreed.

It is noted that the organisation structure is a source of empowerment given that it

illustrates who answers to whom or who is entitled to what functions in the organisation.

Nelson and Pasternack (2005) observe organization structure to be a form of employee

empowerment however the further state that it doesn’t end at the organization structure

since not all members of an organization are normally reflected in the structure as

individual work needs to be coordinated and managed to lower levels.

Table 4.13 Organization structure influence employee empowerment in the organization

Response Percentage

Strongly Disagree 20 %

Disagree 10 %

Undecided or Neutral 14 %

Agree 36 %

Strongly Agree 20 %

41

4.14 Relevance of your organization structure to employee empowerment The table 4.14 above shows the relevance of the organization structure to employee

empowerment and it was noted by 36% to be moderate relevant, 30% very relevant, 18%

not relevant and 16% relevant. Some organizations associate there structures to

empowerment while others don’t. According to Gunneson, (1997) empowerment is

portrayed in the structure by making the structure functional and relates to the capacity of

an organization to operate profitably while adapting to given environment to meet the

complex needs of a dynamic and competitive environment.

Table 4.14 Relevance of your organization structure to employee empowerment

Response Percentage

Very Relevant 30 %

Moderate Relevant 36 %

Relevant 16 %

Not at all Relevant 18 %

4.15 Organization influence work coordination Of the observed respondents 40% were not sure whether their organizations influence

work coordination. The respondents were in support of there organizations despite of any

challenges that might be in existence. According to Gunneson, (1997) empowerment is

portrayed in the structure by making the structure functional and relates to the capacity of

an organization to operate profitably while adapting to given environment to meet the

complex needs of a dynamic and competitive environment. Traditional organisational

structures are being tested by demands for greater adaptability and flexibility. Highly

42

bureaucratic or mechanistic (Burns & Stalker, 1961) organisational structures are making

way for more organic structural approaches.

Table 4.15 Organization influence work coordination

Response Percentage

Disagree 8 %

Undecided 40 %

Agree 20 %

Strongly Agree 32 %

4.16 Analysis on Organization CultureThe table 4.16 above indicates that 46% of the respondents strongly agreed and 34%

agreed that organization culture influence employee empowerment. Culture in the

organisation is considered to be a way of excising authority and work in the organisation

hence it serves an influence to employee empowerment. According to Burman and

Evans, (2008) leadership and culture affect the level of empowerment in an organisation

rather than management and describe the difference to be an influence to impact on the

productivity level.

Table 4.16 Organization culture influence employee empowerment

Response Percentage

Disagree 10 %

Undecided 10 %

Agree 34 %

Strongly Agree 36 %

43

4.17 Rating on the organization culture The study notes that 46% termed the organisation culture to be fair, 40% good while 14%

poor. It can be interpreted that organisation culture its self allows for existence of

empowerment in the organisation. According to Burman and Evans, (2008) leadership

and culture affect the level of empowerment in an organisation rather than management

and describe the difference to be an influence to impact on the productivity level.

Table 4.17 Rating on the organization culture

Response Percentage

Good 40 %

Fair 46 %

Poor 14 %

4.18 Improved level of staff culture enhance employee empowerment Findings in the table 4.18 above can be interpreted to show that improved level of staff

culture enhance employee empowerment as noted by 56% in strong agreement and 40%

in agreement. Culture among employees in an organisation leads to a good working

relationship. Khan, (2005) further states that as culture is developed based on traditions,

beliefs, rituals, information and language (communication) to develop an organizational

culture of empowerment one need to understand how all these factors come about. The

primary issues are the development of a shared vision, full understanding by all involved

of the mission, setting of clear goals and the setting of clearly understood boundaries for

decision making, The outcome to be sought is an improved level of staff competency and

the competency development of course needs to be focused on satisfying both internal

and external customers. Any competency development program adopted needs to include

strong levels of support in the form of mentoring for development of operational skills,

organizational cultural support and the encouragement of risk-taking and empowering

staff in full capacities.

44

Table 4.18 Improved level of staff culture enhance employee empowerment

Response Percentage

Undecided 4 %

Agree 40 %

Strongly Agree 56 %

4.19 Organization cultureThe table 4.19 indicates the extents to which companies with very strong and specific

culture find it harder to empower any how as there are set cultures to be followed. It is

noted that 56% (very high extent), 24% (average extent) and 24% (average extent)

showing that set ways and practices of doing things in the organisation make it difficult

to practice empowerment. According to Burman and Evans, (2008) leadership and

culture affect the level of empowerment in an organisation rather than management and

describe the difference to be an influence to impact on the productivity level. When one

wants to change an aspect of the culture of an organization one has to keep in

consideration that this is a long term project. For companies with very strong and specific

culture it is harder to empower any how as there are set cultures to be followed.

Table 4.19 Organization culture

Response Percentage

Very high extent 56 %

High Extent 20 %

Average extent 24 %

45

4.20 Regression Analysis

A multiple regression analysis was conducted to determine the relative impact of training

and development, reward/compensation, organization structure and organization culture

on employee empowerment. The regression model was as shown below in table 4.14.

Y = β0+ β1x1 + β2x2 + β3x3 + β4x4 + ε

Y= Employee empowerment

X1= training and development

X2=reward/compensation

X3=organization structure

X4=organization culture

Regression analysis also produced correlation, coefficient of determination and analysis

of variance (ANOVA). Correlation sought to show the nature of relationship between

dependent and independent variables and coefficient of determination showed the

strength of the relationship (Karl, 2009). Analysis of variance was done to show whether

there is a significant mean difference between dependent and independent variables. The

ANOVA was conducted at 95% confidence level.

Model goodness of fit was used to establish the relationship between employee

empowerment and the factors that affects it such as training and development,

reward/compensation, organization structure and organization culture. The results

showed a correlation value (R) of 0.7989 which depicts that there is a strong linear

dependence of employee empowerment on training and development,

46

reward/compensation, organization structure and organization culture. Cohen (1988)

observed that a correlation coefficient of magnitude 0.3–0.5 shows a medium linear

dependence between two variables while 0.5 to 1.0 shows a strong linear dependence.

With an adjusted R-squared of 0.7045, shows that training and development,

reward/compensation, organization structure and organization culture explain 70.45

percent of the variations in employee empowerment while 29.55 percent is explained by

other factors not in the model. The Durbin Watson of 1.903 showed absence of serial

correlation which might have had a negative effect of the regression model. Verbeek

(2004) stated that a value of 2.0 for the Durbin-Watson statistic indicates that there is no

serial correlation.

Table 4.20: Model Goodness of FitR R Square Adjusted R

Square

Std. Error of the

Estimate

Durbin-

Watson

.7889 .6706 .7045 .8045 1.903

a. Predictors: (Constant), training and development, reward/compensation, organization Structure and organization culture

b. Dependent Variable: Employee empowerment

ANOVA statistics was conducted to determine the differences in the means of the

dependent and independent variables thus show whether a relationship exists between the

two. The P-value of 0.042 implies that employee empowerment has a significant joint

relationship with training and development, reward/compensation, organization structure

and organization culture which is significant at 95 percent level of significance. This also

depicted the significance of the regression analysis done at 95% confidence level. This is

47

a general technique that can be used to test the hypothesis that the means among two or

more groups are equal, under the assumption that the sampled populations are normally

distributed. Tabachnick and Fidell (2007) states that for hypothesis testing, if the p-value

exceed the predetermined alpha (p≤0.05) then the means of dependent and independent

valuables is equal signifying a relationship.

Table 4.21: Analysis of VarianceSum of

Squares

Df Mean

Square

F Sig.

Regression 4.18 6 1.394 3.135 .042a

Residual 20.50 40 .445

Total 14.44 32

From the data in the above table, there is a positive relationship between employee

empowerment and the Predictor variables which are training and development,

reward/compensation, organization structure and organization culture. The established

regression equation was:

Y = 4.176 + 0.713x1 +0.493x2 + 0.563x3 + 0.685x4

p=0.042

The regression results show that, when the training and development,

reward/compensation, organization structure and organization culture have zero values,

employee empowerment value would be 4.176. It is also established that a unit increase

in training, while holding other factors constant, would result in a 0.713 increase in

employee empowerment. This statistic had a t-value of 1.387 at 0.023 showing that the

statistic is significant at 95% confidence level.

48

Holding other factors constant, a unit increase in reward would cause an increase in

employee empowerment by 0.493. A t-value of 2.058 was established at 0.047 error

margin. This shows that the statistics was significant at 95% significance level.

A unit increase in organization structure would lead to a 0.563 increase in employee

empowerment. A t-value of 0.551 was established at 95% confidence level (p=0.045).

This variable has a lot of influence to employee empowerment within the banking sector.

A unit increase in organization culture would lead to a 0.685 increase in employee

empowerment. A t-value of 0.469 was established at 95% confidence level.

Table 4.22: Regression Coefficient ResultsUnstandardized Coefficients

Standardized Coefficients

T Sig.

B Std. Error Beta(Constant) 4.146 5.006 1.543 .132

Training 0.713 .720 .362 1.387 .023

Reward 0.493 .697 .338 2.058 .047

Organization

structure

Organization culture

0.563

0.685

.827

0.825

.091

0.432

.551

0.469

.045

0.052

a. Dependent Variable: Employee empowerment

49

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 IntroductionThis chapter gives a summary of the findings, conclusion and recommendations. The

research intention was to determine the factors affecting employee empowerment within

the banking sector and the following is a summary of findings.

5.2 Summary of Findings5.2.1 To investigate whether training influences employee empowerment in an

organization.

The study found out that a good number of the observed banks there employees were

very familiar with matters of employee empowerment as observed in the analysis where

by majority were very familiar.

It was not very clear on how presence or lack training and development influences

employee empowerment considering some of the observered banks were doing fine in

terms of performance hence it was noted that training prevailed in some organizations

while others were on departmental basis.

Training and development influences employee empowerment in an organization in the

sense that functions and duties in the bank do differ hence one departments training needs

can not apply to other departments hence measure of empowerment can not be aligned to

be the same.

5.22 To establish the extent to which reward influences employee empowerment in

an organization.

The extent to which reward or compensation influences employee empowerment in an

organization was observed to be at a very high extent by 64% of the respondents. The

50

study therefore notes that reward/compensation is considered to very important and

determines how work in the organisation is performed. It is also considered to accompany

and responsibility of task assigned in the observed organizations.

The study note that reward is a factor that can be considered to act as an influence to

employee empowerment but in situations where salaries are well harmonized then it’s not

a factor to be of great or major influence. Indicators on reward and compensation that

greatly influence employee empowerment are noted as incentives pay plan, wage

surveys, Job evaluation and job analysis.

5.23 To determine whether the organization structure influences employee

empowerment in an organization.

Organization structure influence employee empowerment in the organization. It was

noted that the organisation structure is a source of empowerment given that it illustrates

who answers to whom or who is entitled to what functions in the organisation. Some

organizations associate there structures to empowerment while others don’t. The

respondents were in support of there organizations despite of any challenges that might

be in existence.

The findings show that empowerment is portrayed in the structure of your organization

whoever varied opinions were noted considering many noted that the structure is a way of

reporting and not necessarily a means of empowerment.

5.2.4 To find out how organization culture influences employee empowerment in an organization.The findings in the study found that that organization culture influence employee

empowerment. Culture in the organisation is considered to be a way of excising authority

and work in the organisation hence it serves an influence to employee empowerment.

Organisation culture its self allows for existence of empowerment in the organisation.

Culture among employees in an organisation leads to a good working relationship. The

extents to which companies with very strong and specific culture find it harder to

51

empower any how as there are set cultures to be followed. It is noted that set ways and

practices of doing things in the organisation make it difficult to practice empowerment.

5.3 ConclusionsThe study concluded that both the employees and the employer are very familiar on

matters regarding empowerment. It was not very clear on how presence or lack training

and development influences employee empowerment considering some of the observered

banks were doing fine in terms of performance. Training and development influences

employee empowerment in the banking sector. The regression states that training and

development is of great impact to employee empowerment.

The study also conclude that extent to which reward or compensation influences

employee empowerment in an organization is at a very high extent and that

reward/compensation is considered to be very important and determines the level of

work willingness. The study concludes that reward/compensation is a factor that can be

considered to act as an influence to employee empowerment but in situations where

salaries are well harmonized then it’s not a factor to be of great or major influence. It is

therefore noted that reward/compensation is of average effect to employee empowerment.

The study concludes that organization structure influence employee empowerment within

the banking sector. Some organizations associate there structures to empowerment while

others don’t.

Finally it is concluded that organization culture influence employee empowerment.

Culture in the organisation is considered to be a way of excising authority and work in

the organisation hence it serves an influence to employee empowerment. Given an

individual organization perspective the level at which the variables affect employee

empowerment will be varied. For a successful employee empowerment observed variable

in the study must be considered by the respective organizations.

52

5.4 Recommendations The study recommends the following;

The findings from the study indicate that there are factors that have an influence on

ensuring employee empowerment are observed. The factors are considered to be an

influence to the stated or observed variables. Some of the factors put on recommendation

are such us;

Training should be observed at all levels of management in the organisation considering

the nature of department’s operational activities. Reward or compensation should be done

in a harmonized way to capture all the job categories in the organisation considering it is

a factor that influences employee empowerment.

The organizations should ensure that there work/role structures do not conflict with work

allocations in the organisation. Finally culture having been observed as a set of

performing work in the organisation, the banks should consider carrying out exchange

programmes or joint programmes that will uplift work relationship in the sector and come

up with cultures that are results/performance oriented.

5.5 Area for Further StudyThis work may serve as a basis for further studies in employee empowerment. Due to the

nature of banking and competition the study was limited in data availability hence the

same study can be adopted in a different organisation or sector set up. The study was

also limited to four variables organisation culture, organisation structure, training and

reward. More variables can be incorporated in the model.

53

Reference:Aamodt, M.G. (2007). Industrial organizational psychology: An applied Approach.5th

edition. Thomson Wadsworth.

Adams, J.S. (1965). “Inequity in social exchange”. Adv. Exp. Soc. Psychol. 62:335-343.

Carrell

Ader, H. J., Mellenbergh, G. J., & Hand, D. J. (2008). “Advising on research methods”:

A consultant's companion. Huizen, The Netherlands: Johannes van Kessel

Publishing.

Armstrong M and Stephen T (2005) “A hand book of Employee Reward Management

and Practice”, first edition, London. Kogan Page Limited

Arthur, D. (1995). "Training and Development". Managing Human Resources in Small &

Mid-Sized Companies. AMACOM Div American Mgmt Assn.

Ataman, G. (2003). “Human Resouse Management from an organisatiuons Perspective”

Yayılım dinamikleri. Oneri, 5(19), 13-19.

Born, L. & Molleman, E. (1996). “Empowerment and Rewards”: a Case Study.

Empowerment in Organizations, 4(3), 30 -33.

Bradt, R. (1998) Virtual Organizations: A Simple Taxonomy, Info think Business Journal The Academy of Management Review. 3; 2: 202-210.

Burns, T & Stalker, GM (1961), The management of innovation, Tavistock Publications,

London. Random House, publishers

Burman, R. & Evans, A.J. (2008) Target Zero: A Culture of safety, Defence Aviation

Safety Centre Journal.

54

Carrell M.R., & Dittrich, J.E. (1978). Equity Theory: The Recent Literature,

Methodological Considerations, and New Directions. The Academy of Management

Review. 3; 2: 202-210.

Ceylan, A. (2002). “Human Reseource Planning” Tuzla Bölgesindeki Ticari Bankalarda

Bir Araştırma. Öneri, 5(17), 113 -120.

Chaturvedi, V. (2008). “Employees Empowerment”. A key to intrinsic motivation,

Management Articles, Articles and Papaers by Faculty of Management Institutes,

2008, http://www.indianmba.com/Faculty_Column/FC781/fc781.html,

Christensen, T. E (2010), “Employee Empowerment”. Business Review Journal Wise

Geek

Dipesh S. P (2010) “Business Journal”, Family Bank, Nairobi Kenya

Druckr P. (1999). “The Coming of the new Organisation” Havard Business Review.

Elmuti, D. (1997). “Self-managed Word Teams Approach”: Creative Management Tool

or a fad. Management Decision, 35(3), 233- 239.

Guerrero,E. (2007). “Close Encounters: Communication in Relationships”, 2nd edition.

Sage Publications, Inc.

Gunneson, AO (1997), “Transitioning to agility: creating the 21st century enterprise”, Addison-Wesley, Reading, Mass.

Heizer J. & Render B. (2005) “Employee empowerment” Enlarging employee jobs. Plan-

Do-C heck - Act Walter Shewhart, a pioneer in quality management, - Snippet view

Honold, L. (1997). A Review of the Literature on Employee Empowerment.

Empowerment in Organizations, 5(4), 202- 212.

55

Ivancervich. J. (1998). Human Resource Management. Tata McGraw-Hill Publishing

Company Limited: London.

Joppe, M. (2000). The Research Process. Retrieved February 25, 1998, from,

http://www.ryerson.ca/~mjoppe/rp.htm

Kinusi M. N (2010) Banking Sector in Kenya, Institute of Management, Management

Journal, Nairobi

Koçel, T. (2003). “Labour Management”. İşletme Yöneticiliği. 9. Baskı. İstanbul: Beta

Yayınları.

Kakutani M. (2009) Conceptualization "The Era of Adapting Quickly", The New York Times

Khan R. (2005) “Productivity and Job Satisfaction” Personel Psychology Autumn.

Kırım, A. (2007), Emrinize Amade İnnovasyon Türleri. (http://www.fedtraining.com.tr)

Erişim tarihi: 31.07.2007

Kwamboka G. (2009) Challenges to Human Resource Planning, Unpublished Research,

University of Nairobi.

Locke, E. A. (1968). The relationship of intentions to level of performance. Journal of Applied Psychology, 50, 60–66.

Mattews, R.A..; Diaz, W.M. & Cole, S.G. (2003). The Organizational Empowerment

Scale. Personnel Review, 32(3), 297 -318.

Mugenda, A.G. (2008), Social Science Research. Nairobi. ARTS Press.

56

Mugenda O. & Mugenda. A (1999). Research Methods: Quantitative and Qualitative

Approaches. Acts Press, Nairobi; Kenya.

Nelson, G. L., & Pasternack, B. A. (2005). Results: Keep what’s good, fix what’s wrong,

and unlock great performance. New York: Crown Business.

Nykodym, N.; Simonetti, J.L.; Mielsen, W.R. & Welling, B. (1994). Employee

Empowerment. Empowerment in Organizations, 2(3), 45- 55.

Obure Ming’ala J. (2002), Data Analysis Using SPSS: M & O Data Expert Training and

Consultants., Nairobi , Kenya

Patterson, G.M., (1998). “Integrated manufacturing, empowerment, and company

performance”. Journal of Organizational Behavior, 25, 641-665.

Rao, P. (2000) “Personnel and Human Resource Management” Text and cases;

Himalaya Publishing House

Sashkin K.D., (1998). “Does empowerment translate into action”? An examination of

service recovery initiatives. Journal of Quality Management 3 (1), 133-149.

Sekaran U. (2003) “Research Methods for Business, A Skills Building Approach”, 2nd

Edition. J Wiley and Sons, Southern Illinois University at Carbondale

Spector, P.E. (2008). “Industrial and Organizational Behavior” 5th ed.. Wiley: Hoboken,

NJ.

Tetlock, A., & Kim G. P. (1987). “The effects of appraisal instrument, feedback and

goal-setting on worker satisfaction and commitment”. Journal of Organizational

Behavior, 10, 145– 153.

57

William M.K. (2006).”Basics of Qualitative Research: Grounded Theory Procedures and

Techniques”. Newbury Park, a Sage Publications Inc.

Rosemary Harrison (2005). “Learning and Development”. CIPD Publishing. pp. 5.

Ugboro, I.O., & Obeng, K. (2000). “Top Management Leadership, Employee

Empowerment, Job satisfaction, and Customer Satisfaction in TQM Organizations:

an empirical study. Journal of Quality Management, 5(2), 247- 272.

Wilkinson, A. (1998). Empowerment: Theory and Practice. Personnel Review, 27(1),

58