Kenya's banking industry is growing and expanding every day with the entry of new firms. Currently, the industry has more than 43 license commercial and a good number of SACCO that re offering banking services. This number of banks indicates clearly the intense competition that is in Kenya's banking industry. This competition calls for firms within the industry to ensure they position themselves competitively.
To meet customer expectations, the banks need to have permanent and stable employees who have a deep understanding of what the customers they serve needs. However, there is the high rate of employee turnover in some banks that may see some of these banks struggle to keep up with the competition. This case study, therefore, seeks to address this problem by examining what a top bank in Kenya is doing to ensure a longer stay of employees so that other banks can benchmark from them.
Relevance of the case
The case is relevant in that at it can help banks that are struggling with a problem of high rate of employees' turnover solve this problem. Moreover, the case can be used by human resource managers in enhancing motivational factors within their organization.
Profile of Standard Chartered Bank of Kenya
Below are some of the facts about the bank:
- The bank is foreign owned with only 26% local shareholding
- The bank has been in existence in Kenya for more than 100 years having been established in 1911
- It has 33 branches countrywide, has 1693 employees, and it is the fourth largest bank in terms of market share as indicated by Business Daily Africa
The bank has also received the following recognitions:
- - It was the first bank to receive ISO 9008 certification in Kenya
- - Best Bank, Customer Satisfaction, Think Business Awards- 2015
- - ICPSK Champions of Governance Award -2014
- - Best Foreign Bank in Kenya-EMEA Awards- 2014
- - Best Consumer Internet Bank in Kenya-Global Finance Magazine -2013
- - Best Foreign Exchange Bank in Kenya-2013
Overall Winner Corporate Governance Excellence in Financial Reporting Awards 2013
Indeed, such kind of achievement cannot be attained without well motivated, committed, and dedicated workforce. Also, this kind of outstanding performance cannot be realized if employees get employed and leave within the shortest time possible.
Organization Behavior Questions and Practices Addressed by the Case
- Factors that motivate workers at the bank
- The type of leadership available in the bank, supervisor's behavior towards employees and the effect the latter has on employee motivation
- How effective is communication in the bank and if communication has any impact on employee motivation
Methods of Data Collection
Data was gathered from both primary and secondary sources. Primary data was obtained through the administration of questionnaires and direct interviews with some employees and interns of the firm. The sample chosen centered on junior and senior employees of the company. For secondary source, website was the only source that was used.
Findings/Issues being discussed
Factors that motivate employees at the bank
Data collected indicated that various factors motivate employees in the bank. The factors are stated in the order of their importance, from the factors viewed as most important to the least ones.
- Salary and other fringe benefits
- Job security
- Training and development opportunities
- Respect and fair treatment received from superiors
- Possibility of future promotional opportunities
- Relationship with co-workers and guidance from supervisors
- Type of leadership present in the bank and supervisor's behavior
It emerged that in the bank, employees are given a chance to take part in decision-making on matters affecting them as well the fact that management takes time to listen to employees ideas. Employees are also given a chance to take part in assignments beyond the core of their which motivate them as this give them a chance to gain new skills. Employees also cited the presence of working environment full of trust and openness. However, employees noted that some supervisors use the authoritarian type of supervision. This kind of supervision according to employees, was the main demotivating factor.
How management and supervisors communicate with employees
Employees indicated that there existed efficient and effective communication from the management. This efficiency in communication enabled the employees understand the nature of their assignment. Well understood assignment made employees tackle their assignment in the right way, resulting in a positive feedback that is obviously a motivator.
Monetary benefits motivate most employees. This fact is clear since employees cited salary and other fringe benefits as their main motivating factor. This fact is in agreement with the theory of Scientific Management that noted that employees are economical beings who are motivated by money. Due to this tendency by employees to value money most, employers should consider using money related benefits as a motivating and retention factor of employees. Besides, factors like job security, training and development opportunities, respect and fair treatment, and possibility of promotional opportunities indicate that Abraham Maslow's Theory of Hierarchy Needs applies in Kenya's labor market. Therefore, employers should not only cater for employees' monetary needs, but also self-esteem and self-actualization needs by providing opportunities for career growth within their organization.
Management of these days should employ democratic leadership style since this type of style seems to attract the current generation of employees. Employees of this era do not stomach autocratic type of supervision, and if that is the case, they are ready to leave. Therefore, supervisors should create room for sharing responsibility with junior employees and refrain from being too much authoritative.
Every organization should ensure there is efficient and effective communication in the organization. Effective communication is needed as it will ensure employees know what is expected of them and how best to execute the assigned task, something that motivate them
From the above findings, it is clear that employees motivation and better performance of banks is positively correlated. Therefore, banks and other financial institutions experiencing a high rate of labor turnover should strive to motivate their employees. The motivation of employees will require such banks to introduce competitive pay schemes as well as creating a working environment that support career growth.