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Abstract
Different authors argue that empowering employee using different facets of empowerments like information
sharing, trust, reward, training and autonomy have an impact on job satisfaction and service quality where as
other authors disagree with this idea .thus this study with the title of “The Impact of Employee Empowerment on
Job Satisfaction of Commercial Bank of Ethiopia, Dire Dawa Branch” has an objective of testing whether the
facets of empowerment have a relation with overall job satisfaction. Questionnaires were distributed to the entire
population of the bank. From the distributed questionnaires 71% were collected back and used for
interpretation.To analyze the data inferential statistics like Pearson correlation and multiple regressions were
employed.The researcher found that all facets of employee empowerment have contributed to employee job
satisfaction. Particularly training and reward have a significant contribution to job satisfaction.The researcher
recommend the bank to develop short term and long term training program as well as develop a reward system
that motivate its employees so as to increase their employee’s job satisfaction and to provide quality service to
its customers and become competent in the market.
Keywords: Employee empowerment, job satisfaction, service quality.
1. Introduction
Employees are one of the most vital aspects of an organization and therefore a good human resources
management policy can become a competitive advantage. This is especially true in case of service organization
as they depend heavily on their front line staff to provide high quality services to their customers (palmer, 2001,
p.76). Therefore, there is a need for manager to satisfy their employees as they in turn satisfy the most important
external stakeholder the customer
Therefore, managers must be in a position to understand and provide for the needs of their employees. Thus
an increase in job satisfaction will more than likely be the main factor employees will consider when
contemplating whether to stay in their jobs or move elsewhere (Robbins, 2005, P.84).
A satisfied customer and employees are of important value to the organization, it therefore, become the duty
of the management to put in peace a system that would ultimately satisfy employees. Since the employees have a
major role to play in determining whether a customer would enjoy the experience or turn to their competitors for
better solutions. Thus organizations re-think of their strategy, because companies today recognize that they can
compete more effectively by distinguishing themselves with respect to service quality and improved customer
satisfaction.
Now a day a banking service industry has grown considerably making it can intensive industry. Banks can
boost the competitiveness of their service quality by upgrading service quality and improving its reputations. As
indicated by (Heskett etal 1994, pp582-593) a customer will more likely be satisfied it employees are satisfied.
Due to this competitiveness, service firms are continuously in search of finding better ways to satisfy their
customers.
As previously mentioned, most managers and scholars emphasize that an organization’s most important tool
for gaining a competitive advantage is its people. In order for the firm to attain success those people have to be
involved and active (Lawler, 1996, P.97).
Employee empowerment in its basic form is a term used to describe how staff can make autonomous
decisions without consulting upper management. Example is given to employees that show the direction to solve
work related problems “on the spot” rather than consulting their immediate supervisors or upper management.
The concept of employee empowerment has also been associated with employee job satisfaction. Ugboro
and obeng (2000: Pp.247-273) found that in general, empowered employees exhibits higher levels of job
satisfaction in comparison with those who are not empowered. It has also been shown that empowered
employees feel better on their job and are more eager when it comes to serving customers. This in turn quickness
customer needs responses which in turn result in customer satisfaction (Bowen & Lawler, 1992: Pp.31-39).
Generally, empower employees self efficacy level increase as they are in a position to evaluate the best approach
to perform tasks.
Different authors argue that using employee empowerment techniques (methods) like trust, information
share, training, reward and autonomy have an impact on job satisfaction and service quality. But other authors
disagree with this idea.
Argyris (1998; p 62) states that regardless of all the "talk", the idea of empowerment has remained an
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ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)
Vol.9, No.11, 2018
illusion:
"....despite all the best efforts that have gone into fostering empowerment, it remains very much like the
emperor's clothes: we praise it loudly in public and ask ourselves privately why we can't see it...." (Argyris,
1998; p, 63).
Empowerment of service employees has also been met with a great deal of skepticism. Although most
organizations praise the concept of employee empowerment, the benefits, although well expressed in detail in
the media, have not been well documented (Quinn & Spreitzer, 1997;pp 37-49).
Others have stated that flexibility among employees in service firms may lead to loss of quality.
Edgett and Parkinson (1993;p,21) document that service heterogeneity creates difficulties in controlling the
output and its quality whereas Lee (1989;p,12) asserts that firms with a high heterogeneity of services
should standardize their services so as to maintain quality in service production.
Despite the above controversies among different authors, the performance record of the bank shows that the
customer’s weight line reduced significantly, this means the service quality of the banks improved from time to
time and the management believes that this improvement comes from employee’s job satisfaction which is the
ultimate result of employee empowerment.
Thus, the above controversy initiated the researcher to know whether job satisfaction is the result of
empowerment which is implemented by the bank.
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Vol.9, No.11, 2018
single item measurement. Wonous, Reichers and hudy (1997, pp: 247-252) argue that single item measures can
be acceptable measure of job satisfaction.
The independent variable of the study was employee empowerment. Employee empowerment was
measured by constructing question based on the facets of employee empowerment as put forward by (Bowen &
Lawler 1992, Pp31-39). These facts are level of information sharing, rewards, training, and trust and also
autonomy as outline by (Sims et.al. 1976, p. 200). In order to analyze the data obtained from the questionnaires
the statistical program SPSS 20 was used.
2.4.1. Statistical analysis
Statistical analysis was employed to examine the relationships among study variables and to test whether those
independent variables have a positive relationship on dependent variable.
In order to achieve the purpose, both descriptive statistics (mean and percentage) and inferential statistics
(like Pearson correlation and multiple regressions) were employed. Morgan et.al (2007, p.134) and (Argyrous
George, 2005 P: 189) state that multiple regression usually investigate the relationship between a dependent
variable and several independent variables. Multiple regressions explore relationships between one dependent
variable and a number of independent variable. Multiple regressions can be used not only to assess the
relationship between these variables but also which employee empowerment facets predicted the most likely
impact on job satisfaction. Thus, In order to carry out the regression analysis, multiple regressions were used.
The functional specification for multiple linear regression model deals where response Y is related to a set of
qualitative independent variables. The general lineal model has the following structure (Ott, 200l):
Y = B0 + Blxl + B2x2 +...........+ BĸXiĸ+ ξ
Then, the main relationships between dependent and independent variables can be seen below:
Y = β0 + βlxl + β2x2 + β3x3 + β4x4 + β5x5 + e
Where:
Y = is job satisfaction
β0 = is the Y intercept when x is zero
βl, β2, b3, β4 and β5 are regression weights attached to the variables;
Xl= autonomy; X2= training; X3=reward; X4 = information; X5 = trust; e= error term
On the other hand, Pearson correlation coefficient deals with analyzing patterns of relationships between
variables. Argyrous George (2005:p.170) state that the value of Pearson correlation tells us about the strength as
well as the direction of association among variables. Thus the correlation can be used to determine the level of
strength as well as the direction of association among study variables. By employing the above techniques, the
data become more manageable to interpret easily.
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Data concerning specialization of respondents shown that, more than 78% of the total respondents
specialized in accounting and banking. Specifically half of the total respondents 32or 50% were specialized in
accounting followed by 18 respondents or 28.125% specialized in banking. And finally 12 respondents 18.78%
qualified in management and the rest 2 respondent’s mention other.
As expected from the study, it is not unusual to find that most of the workers are specialized in accounting
and banking because of the nature of work
More than 87% of the total respondents are customer service officer and only 12.5% of the total
respondents have supervisory position.
In any service encounter, the larger portions of the workers are front line employees who provide service to
their customers.
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Vol.9, No.11, 2018
the true value of the population and therefore recommended the use of the adjusted R square value. Since the
population size of this study is small, adjusted R square value is used for interpretation.
In this study the adjusted R square value of the regression model is 0.928. This indicates that 92.8% of the
variance in overall job satisfaction is explained by the model. According to Morgan et.al (2007: p: 94) this is a
large effect.
In addition, the statistical significance of the result is also an important factor to consider when evaluating
the regression model. The ANOVAs table indicate that the combination of facets of empowerment variables to
predict job satisfaction from training, reward, information sharing, trust, and autonomy is statistically significant,
F (5, 58) = 72.076, p< 0.000 because as Morgan et.al (2007; p, 137) pointed out that if the significance value of
the F statistics is smaller than 0.05 then the combination of independent variables is good predictor of dependent
variables.
The coefficient table, in standard regression out put provides information about the effects of individual
predictor variables. Generally, coefficient and significance taste are two type of information in the coefficient
table. Coefficient indicates the increase in the value of the dependent variable for each unit increase in the
predictor value (Morgan et.al 2007; p, 138).
To determine the relative importance of the significant predictor, look at standard coefficients. Trust and
information contributes more to the model because the two variables have larger absolute standard coefficient.
From the beta coefficient, one can conclude that information and trust are most significantly predicting job
satisfaction followed by rewards when all five variables are included.
4. Discussion
The objective of this study was to examine the relation ship between overall job satisfaction and the facets of
empowerment. In addition the study also investigated the most significant predictors of job satisfaction with in
the commercial banks of Ethiopia, Dire Dawa branches.
The result of the study conclude that all facets of empowerment are significantly relate and correlate with
each other and are moving in the same direction as one variable moves.
Training, reward, information sharing, trust and autonomy have interrelations among themselves.
Employees were more satisfied with their current job. So as to keep up their job satisfaction, they must be
empowered by providing necessary support from the organization and the management.
The study was aligned and congruent with the study made by chaudron(1996). He stated that if training lead
to employees being given additional role and responsibilities with the view to empower them, then such
additional loads on the employees should be appropriately rewarded. If not, they may intern lead to decrease on
job satisfaction and a decline in performance.
The study show that trust also another important indicator of empowerment and congruent with the study
made by Mayer, Davis, and schoorman (1995). He identified that trust as a critical prerequisite before managers
empower employees.
This study also parallel to Rdolfphine(2000) findings that with out information sharing people can not take
on responsibility and its also very difficult to receive training with the absence of information .
In addition the result was in line with Zand(1972)findings. He found that information sharing support trust
and the resulting trust strengthen information sharing which result in an interrelation of trust and information
sharing.
The study also found that information sharing and trust are the most significant predictors of job satisfaction
followed by reward.
The study shows that there were a positive and significant influence between facets of employee
empowerment and job satisfaction.
The study also aligned and congruent with the study made by sandrta(2009) that the five facets of employee
empowerment was the bases for job satisfaction when they are empowered.
The study shows that to empower employees, there should be some sort of autonomy and freedom to
determine their job by their own. This study supported by the work of Brock (2003) which state that employees
relatively autonomous if they can make most of important decisions relevant to their job without requiring
permission from other people in the organization. The study also aligned with the finding made by Sems(1976)
that autonomy created first to enhance the degree of empowerment among service employees.
The finding show that empowerment result in employee job satisfaction which is congruent with the
finding of Rafiq Ahmed (2000) who stated that empowerment to service personnel will enhance job
satisfaction.
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Qualification of respondents
Specialization of respondents
Specialization Frequency percentage
Management 12 18.75
Accounting 32 50
Banking and insurance 18 28.125
Other 2 3.125
Total 64 100
Job title of respondents
Job title Frequency percentage
Customer service officer 56 87.5
Manager 8 12.5
Total 64 100
Correlations
Job
satisfaction trust autonomy information reward training
** * ** **
Job Pearson Correlation 1 .369 .305 .552 .796 .865**
satisfaction Sig. (2-tailed) .003 .014 .000 .000 .000
** * **
trust Pearson Correlation .369 1 .287 .431 .105 .357**
Sig. (2-tailed) .003 .021 .000 .408 .004
* * **
autonomy Pearson Correlation .305 .287 1 .322 .126 .506**
Sig. (2-tailed) .014 .021 .009 .322 .000
Information Pearson Correlation .552** .431** .322** 1 .586** .599**
sharing Sig. (2-tailed) .000 .000 .009 .000 .000
** **
reward Pearson Correlation .796 .105 .126 .586 1 .760**
Sig. (2-tailed) .000 .408 .322 .000 .000
** ** ** ** **
training Pearson Correlation .865 .357 .506 .599 .760 1
Sig. (2-tailed) .000 .004 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed). a. List wise N=64
Summery Model of regression
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
a
1 .928 .861 .849 .45453
a. Predictors: (Constant), reward , trust, autonomy, information, training
Table . ANOVA table
ANOVAs
Model Sum of Squares df Mean Square F Sig.
1 Regression 74.455 5 14.891 72.076 .000a
Residual 11.983 58 .207
Total 86.438 63
a. Predictors: (Constant) , reward, trust , autonomy , information , training
b. Dependent Variable: job satisfaction
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Vol.9, No.11, 2018
Table Coefficients
Coefficients
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -1.094 .693 -1.580 .119
trust .591 .114 .560 5.162 .000
autonomy -.197 .073 -.181 -2.677 .010
training .178 .110 .218 1.615 .112
information .459 .103 .567 4.449 .000
reward .147 .050 .262 2.942 .005
a. Dependent Variable: job satisfaction
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