Impact of Employees Satisfaction on Customer Satisfaction

up re plow of Employees bliss on guest enjoyment knock back of ContentsAbstractThis look for paper determines the cushion of Employees comfort on client blessedness. This take on is ground on the modular hired desire of Pakistan. In this take, the info has been self-contained from two different questionnaires one is for Employees perspective and some other is for Customers perspective.This look for has been conducted in Karachi. The target population for this seek is the Employee and Customer of Standard Chartered coast. A sample size of 100 respondents of each fiber from various locations of Karachi which be Gulshan-e-Iqbal, Gulberg, F.B.Area, D.H.A, and S.I.T.E be collected. Chi-Squ atomic number 18 leaven has been utilize to tribulation the hypothesis at entailment take aim of 95%. Fin each(prenominal)y, I find through analysis that Employee mirth is a Key factor for the Customer Satisfaction. It has a significant Impact on Customer Satisfaction.Key Words Employee Satisfaction, Customer Satisfaction.Introduction mysterious Banks argon adopt pivotal role in mobilizing nations savings. These coasts get croak the mainstream banking institutions in the country mainly, because of public orbit banks are non playing effective role callable to obsolete technology and old go out infrastructure. These banks usually use traditional banking practices which are non suitable in this era of globalization led to the establishment of a handful of semiprivate banks. These banks are also failed to meet the operate expectations of general public due to their inefficient operation including administrative delay, traditional technology, slow processing of transactions etc. This is one of the main reasons loafer the flourish of the Private Banks come within a short period of time which step-up competition. Consequently, banks absorb taken steps to attract guests and adopted a service penchant with a focus on developing node-empl oyee descent.It is a logical show up since an overwhelmingly large proportion of bank clients in Pakistan prefer attend to face banking. Taking necessary initiatives to cleanse the relationship mingled with mien stress employees of the bank and its customers is of utmost importance in gaining a private-enterprise(a) advantage. Moreover, any new offering from one bank is quickly imitated by other competing banks. In such situation, customer-employee relationships could be used as an of the essence(p) tool for making them distinct from others.To own how relationships are formed, need an sagacity into the factors that contribute to customer mirth. Many companies demonstrate a very condition view of these factors assuming that if they get their core product right and stage it quickly and conveniently, the customer pull up stakes be satisfied. As leading customer happiness and customer loyalty research suppliers, investigator recognize that the drivers behind customer attitudes and opinions are much more than complex than that. Customer contentment is a mental state which closures from the customers comparison of a) expectations prior to a bargain for with b) performance perceptions after a purchase.Previous studies shows that Satisfied Employees are more productive, innovative, committed and loyal, which in turn leads to customer comfort, which means that employee satisfaction plays a strong, central role in predicting profitability and organizational effectiveness. Employee satisfaction is importantly related to service quality and to customer satisfaction, while the later in turn influences firm profitability. Many firms ca-ca enthusiastically use the operation-centric onrush and demonstrated that it is an effective means for improving organizational efficiency. Nevertheless, the impact of charitable resources on operational systems has often been overlooked. The importance of employee attitudes, such as subscriber line satisfaction, employee loyalty, and organizational commitment, and their impacts on operational performance baffle more often than non been pretermit in the extant OM literature (Boudreau, 2004).However, this subject area helps to understand the employees satisfaction play any role or not on customer satisfaction in Private Banks in Pakistan. This study is brutald on bank Standard Chartered, operating their business in whole country. This is conventional (interest based) Bank. This research conduct in Karachi city, thats why all the branches for research are in Karachi. These banks are located in different area of Karachi.Standard Chartered Bank LimitedStandard Chartered is the largest and fastest growing internationalist Bank in Pakistan. The Bank has been operating in Pakistan since 1863 when it first build its operations in Karachi.Standard Chartered now employees over 4,000 mickle and has a branch net stimulate of 162 branches across 41 cities in the country. Standard Charterers co re businesses in Pakistan are in Consumer Banking and Wholesale Banking.Problem argumentThere are significant benefits to be realized from trying to improve an organizations service/quality. And thats why managers devote so much time and notes to training programs that instruct employees on the specifics of dealing with customers. What these managers dont understand, however, is that such attempts are largely cosmetic. Real improvements in customer service start with providing superior service and support to the employees themselves which manager of most companies doesnt realize. That is the big problem in Pakistan. So the problem statement is that it is impossible to maintain a loyal customer base without a base of loyal employees.Research ObjectivesAs mentioned in the problem statement, it is impossible to maintain a loyal customer base without a base of loyal employees. Hence the main objective of this study is to find the relationship of employee and customers either satisfy e mployee impact or not on customer satisfaction.Scope of studyThis research testament chance on importance of Employee Satisfaction. The research in this area is very important because thither is no trend to satisfy the employee, and to satisfy customer employer offer type of packages and go. If employer realize that for customer satisfaction they must need to satisfy there employee first they may get more profit, A study at Sears Roebuck Co. showed that a five-point improvement in employee attitudes led to a 1.3 rise in customer satisfaction which, in turn, generated a 0.5 annex in revenues. This study is not circumscribed to the banking industry it helps all the private and public sector organizations.The scope of study is not very large due to the paucity of time. I selected Karachi because it has huge population. And mint belong to every part of Pakistan found in Karachi. And I can find every class of people in Karachi. I cover different areas of Karachi like, Gulshan-e- iqbal, Gulberg, F.B. Area, D.H.A and S.I.T.E.Limitations of the StudySome of the respondents refused to stuff the questionnaires.The responses may vary as some people did not require to come up with real answers.Difficult to gather primary data as some of the respondents is not taking questionnaire seriouslyThe people were alert in their own work so they might not have given actual responses.Limitation of time.The survey is conducted only in some areas of Karachi hence the results may vary in other parts of the cities. depressed sample size.And like any other research the limitation of personalised bias of respondents limits the scope of the study.The findings are based on the survey conducted in the month of June and July the results may not vary on the basis of months because the study is based on the behavior like satisfaction.Operational DefinitionsEmployee SatisfactionEmployee Satisfaction can be defined as how Employee is happy on his work place which can be shown by his Loyalty and Commitment towards their organization.Customer SatisfactionCustomer Satisfaction can be defined as how Customer is happy or agree to purchase the product and serve again, shown by his Loyalty and Commitment towards the Product and Services offered by the Organization. literature ReviewEmployee Satisfaction is crucial for any bank for its strong impact on customer perceptions of service quality and satisfaction. Dell (1991) illustrated customer-employee relationship as a state of customers overall technical feelings when they interact with sellers. Previous studies (Garbarino and Johnson, 1999, Johnson et. al. 2008, Levesque, 1996) pop the question two types of customer satisfaction. Overall satisfaction, comes from multiple experiences or clashs with the firm (Bitner and Hubbert, 1994) whereas, encounter satisfaction allow for result from the evaluation of a single, discrete interaction. Bank customers measure their satisfaction based on a serial of encounters or ongoing relationship experiences with the banks employees. This corroborates (Storbacka et al, 1994) who argued that customers experiences gathered from all service encounters influence their overall satisfaction. However, customer-employee interaction is more vital in some countries (e.g., the Netherlands, Italy, and Kenya) than in other parts of the world where people do not like to be involved in personal interactions (Gremler and Gwinner, 2000). In Pakistan, as personal relationships hold more influence on customers, it may be assumed that customer-employee relationships have stronger impact on customers mind for their satisfaction than those countries where personal relationship is not an important factor.Employees can derive satisfaction from their stocks by meeting or exceeding the unrestrained wants and needs they expect from their work. Therefore, Managers that can recognize this and understand the many different aspects that are involved in employee satisfaction will be successful at achieving the link between employee satisfaction, customer retentiveness and added profitability. A substantial body of research confirms the positive association between employee and customer satisfaction (Bernhardt et al., 2000 Harter et al., 2002 Koys, 2001 Ryan et al.,1996 Tornow and Wiley, 1991).A common characteristic of all old research is that present available dyadic studies have mainly cerebrate on service employees who are in direct and intense customer contact, such as salespeople (Homburg and Stock, 2004, 2005), financial service consultants (Ryan et al.,1996), or service personnel from a restaurant chain (Koys, 2001).The concept of emotional contagion has been used in marketing research to explain the link between employee job satisfaction and customer satisfaction (Homburg and Stock, 2004 Pugh, 2001Verbeke, 1997). According to this theory, customers catch certain emotional states of customer-contact employees which are associated with the employees j ob satisfaction.As an example (provided by Homburg and Stock, 2004), the aim of experienced job stress is negatively correlated to the employees job satisfaction. Thus, a lastly dissatisfied employee will (unconsciously) exhibit a high level of emotional tension expressed through facial expressions, vocalization, and other unmistakable behaviors. That tension will be felt by the customer and because will affect the customers satisfaction via the process of emotional contagion (Wild et al.,2001). This will create cognitive tension for the customer as well, which in turn reduces the customers satisfaction-level.Employees create value for their organizations through the advantageous relationships they create with the organizations customers. As the research has shown, loyal customers are profitable customers and loyal customers have an emotional contact with the organization, most often because of the employees at the organization. In order for employee value trigger to even be a consideration, the employee must be satisfied with his or her employment situation. Satisfied and loyal employees deliver better customer service, make fewer mistakes, and maintain an emotional connection to the organization for which they work. A series of service encounters between an employee and a customer will lead to a productive and profitable relationship only if the employee is able to achieve consistently high quality in the encounter (Heskett, Sasser, and Schlessinger 1997).Research conducted on chaffer Centre employees and Customer shows that the private and public call centers employee and customer relationship link to be either positively or negatively correlated. substance that call centers that have high employee satisfaction also have high customer satisfaction and call centers with low employee satisfaction also have low customer satisfaction. Therefore, SQM is of the strong opinion that employee satisfaction impacts customer satisfaction for both the public an d private sectors. Furthermore, SQM has demonstrated that a 1% increase in employee satisfaction represents approximately a 2% improvement increase in customer satisfaction. (Mike, 2005).Many times organizations assume that customers will construct satisfied if prices and costs are simply lowered. However, much research has indicated that customers are willing to pay more for service and convenience. Employees create value for their organizations through the profitable relationships they create with the organizations customers. As the research has shown, loyal customers are profitable customers and loyal customers have an emotional connection with the organization, most often because of the employees at the organization. (Anthony, 2007).MethodologyTarget population and Sources of dataThe target population in this study includes (i) front line employees and key personnel working in the customer service department of the different branches SCB located in Karachi and (ii) customers ha ving neb of any type in these banks. Primary data will be collected through two separate surveys. A questionnaire containing both structure and unstructured questions will be developed and administered through e-mail to every which way selected sample elements from the target population (i) above. A second survey would be conducted on a sample of 100 randomly selected customers of these banks from the target population (ii) above. Necessary secondary data such as annual reports, websites, newsprint reports and various other published works will also be collected from relevant sources.HypothesisThe following hypothesis was developedHo Employees Satisfaction has a significant impact on Customer Satisfaction. examine sizeThe sample is based on employees and customers of Standard Chartered bank. And the size is 100 respondents of each type.How to collect dataTo collect data rule of questionnaire based survey is conducted and the question is about the loyalty and commitment of employ ees and customers behaviors towards the bank.statistical TechniquesThe SPSS software has help us in the solution of research calculation. Chi-Square test has been used to test the hypothesis at significance level of 95%.Analysis and FindingsThe measurement factors of Employee according to the questionnaire are Job Security, Working Condition, honorarium Packages, Team Leaders, Communication level in Bank with peers and seniors, Customer services providing by the them and Training and Development from the Bank, this factors measure on the scale of satisfaction and the end result which comes in the over all satisfaction level of Employees are shown in the table 1Table 1 Satisfaction aim Of EmployeeFrequency portionValid pctCumulative PercentValidSatisfied5959.059.059.0Neutral1111.011.070.0Dissatisfied3030.030.0100.0Total100100.0100.059 % of employees are satisfied by these all factors, 11% of the Employees are neither satisfied nor dissatisfied and 30% employees are Dissatisfied fro m these factors. Observation Compensation Packages is the main reasons of Dissatisfaction, and some of them are not satisfied with their Team Leaders.Similarly the measurement factors of Customers, according to the questionnaire are reactivity from the front desk Employees, Products and Service Quality, Delivery of Services, Competitiveness and Technical Support from the Bank Employees, these factors also measure on the scale of satisfaction and the end result which comes in the over all satisfaction level of Customer are shown in the table 2Table 2 Satisfaction Level Of CustomerFrequencyPercentValid PercentCumulative PercentValidSatisfied4242.042.042.0Neutral1919.019.061.0Dissatisfied3939.039.0100.0Total100100.0100.042% Customers are Satisfied with the Banks overall Services, 19% of Customers are neither Satisfied nor Dissatisfied and Finally 39 % Customers are Dissatisfied. Observation shows that this ratio of Dissatisfaction is Because of Product and Service Quality and Delivery of Services.Table 3 Satisfaction Level Of Customer * Satisfaction Level Of Employee Cross-tabulation attendSatisfaction Level Of EmployeeTotalSatisfiedNeutralDissatisfiedSatisfaction Level Of CustomerSatisfied441642Neutral53619Dissatisfied1071839Total591130100The Table 3 shows the overall satisfaction of Employee and Customer, 42% employee Satisfaction leads to the 59% satisfaction Of Customers, 19% neutral employee does not effect significantly and Finally 39% Dissatisfied Employees leads to the 30% Customer Dissatisfaction.table 4 Chi-Square TestsValuedfAsymp. Sig. (2-sided)Pearson Chi-Square19.683a4.001Likelihood Ratio21.1584.000Linear-by-Linear Association15.6741.000N of Valid Cases100The above table 4 gives the test results for the chi-square test for independence. The first row labeled Pearson Chi-Square shows that the value of 2 is 19.6837 and the pointedness of freedom is 4. The two-tailed p-value is shown as 0.001, which is less than 0.05, so our hypothesis is accepted an d we desist that there is significant impact of Employees Satisfaction on Customer Satisfaction. final stageKeeping in view the results discussed above it can be safely concluded that there is positive association between the Employee satisfaction and Customer Satisfaction. On the basis of results generated by using SPSS software (17th version) and the test applied on it is chi-square, it is found that Satisfied Employees either front desk or not has a significant impact on Customer Satisfaction. If Employee is Satisfied with the Job, He/she would be loyal, and committed with the bank and in the result they are providing good services to their valuable Customers as they perceived, and finally Customer is Satisfied.Recommendations and Direction for only ResearchOn the basis of the analysis I recommend that the researcher can be conducted in every field and specially in government sector so that we can find out the reasons of dissatisfaction of customer in this sector similarly the large number of respondent will gives the accurate finding where as the area of this research is very limited based on one city and one bank.Following this line of thought, I also suggest that researchers examine the relationship between employee satisfaction and companys profitability. For instance, is employee satisfaction a necessary condition for Companys Profitability?