Organizational Culture fosters Employee Engagement:A study on Indian Banking Industry

Submitted to Lovely Professional University In partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION

Submitted by: Group No.-QH26 ROMITA AHUJA-RQ3702A15 LOVEPREET KAUR- RQ3701B30 DEEPIKA-RQ3701B31 SAMEER LAMBA -RQ3701B29

Supervisor: Mr. VANEET KASHAYAP ASSITANT PROFESSOR

DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA

CONTENTS

1 Introduction to organizational culture and employee engagement 1.1 CHARACTERISTICS OF HEALTHY ORGANISATIONAL CULTURE 1.2 Aspects of Employee Engagement 1.3 CATAGORIES OF EMPLOYEE ENGAGMENT 2 Review of literature 3 Need and Scope of the study 3.1 Research objective 4 Research Methodology 5 References

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CHAPTER 1 INTRODUCTION TO ORANIZATIONAL CULTURE AND EMPLOYEE ENGAGMENT 1 Introduction

Organizational culture is defined as A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration" that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems- Schein (wikipedia) Ravasi and Schultz (2006) state that organizational culture is a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behaviour for various situations. Employee engagement is the level of commitment and involvement an employee has toward their organization and its values. An engaged employee is aware of business context, and works with colleagues to improve performance within the job for the benefit of the organization. It is a positive attitude held by the employees towards the organization and its values.

Fig1 : employee engagment Engagement at work was conceptualized by Kahn, (1990) as the harnessing of organizational members selves to their work roles. In engagement, people employ and express themselves physically, cognitively, and emotionally during role performances. The second related construct to engagement in organizational behavior is the notion of flow advanced by Csikszentmihalyi (1975, 1990). Csikzentmihalyi (1975) defines flow as the holistic sensation that, people feel when they act with total involvement. Flow is the state in which there is little distinction between the self and environment. When individuals are in Flow State little conscious control is necessary for their actions.

1.1 CHARACTERISTICS OF HEALTHY ORGANISATIONAL CULTURE:

Organizations should strive for what is considered a healthy organizational culture in order to increase productivity, growth, efficiency and reduce employee turnover and other counterproductive behaviour. A variety of characteristics describe a healthy culture, including:
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 Acceptance and appreciation for diversity Regard for and fair treatment of each employee as well as respect for each employees contribution to the company Employee pride and enthusiasm for the organization and the work performed Equal opportunity for each employee to realize their full potential within the company Strong communication with all employees regarding policies and company issues Strong company leaders with a strong sense of direction and purpose Ability to compete in industry innovation and customer service, as well as price Lower than average turnover rates (perpetuated by a healthy culture) Investment in learning, training, and employee knowledge

Organization development is concerned with the analysis and diagnosis of the factor that determine organizational effectiveness, and the planning and delivery of programmes to increase that effectiveness. Organizations want to obtain the commitment of their employees. Management would like its employees to identify with the values, norms and artefacts of the organization, hence the need for organizational culture. Management needs to explain and imbibe its culture in its employees; this will enable the employee to get familiar with the organizational system. During this process of explanation, the employee learns about the organizational culture and decides whether he can cope with it or not. This means that each organization is a learning environment. It is the proper understanding of the organizational culture that the performance of the employee in the organization. To operate successfully across cultures, it is important to be able to recognize cultural differences and be adaptable (Deter, Schroeder, and Mauriel, 2000). Organisational culture finds expression through the thoughts, intentions, actions and interpretations of members of the organization (Hallett, 2003). There are many ways to visualize the concept of organizational culture. One popular conceptualization is the onion model. If you cut an onion in half and look at it, you will see many layers. An organizations culture can be visually represented in this way.

Fig 1.2: organizational cultutre Culture is one of the most precious things a company has, so they must work harder on it than anything else, says Herb. Various studies indicate that companies with strong cultures are more likely to be successful, but only under a particular set of conditions. The effect of organizational culture depends partly in its strength.

1.2 Aspects of Employee Engagement

Three basic aspects of employee engagement according to the global studies are: The employees and their own unique psychological make- up and experience The employers and their ability to create the conditions that promote employee engagement Interaction between employees at all levels.

1.4 CATAGORIES OF EMPLOYEE ENGAGMENT According to the Gallup the Consulting organization there are there are different types of people:1 Engaged--"Engaged" employees are builders. They want to know the desired expectations for their role so they can meet and exceed them. They're naturally curious about their company and
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their place in it. They perform at consistently high levels. They want to use their talents and strengths at work every day. They work with passion and they drive innovation and move their organization forward.

2 Not Engaged---Not-engaged employees tend to concentrate on tasks rather than the goals and outcomes they are expected to accomplish. They want to be told what to do just so they can do it and say they have finished. They focus on accomplishing tasks vs. achieving an outcome. Employees who are not-engaged tend to feel their contributions are being overlooked, and their potential is not being tapped. They often feel this way because they don't have productive relationships with their managers or with their coworkers.

3 Actively Disengaged-- The "actively disengaged" employees are the "cave dwellers." They're "Consistently against Virtually Everything." They're not just unhappy at work; they're busy acting out their unhappiness .They sow seeds of negativity at every opportunity. Every day, actively disengaged workers undermine what their engaged coworkers accomplish. As workers increasingly rely on each other to generate products and services, the problems and tensions that are fostered by actively disengaged workers can cause great damage to an organization's functioning.

CHAPTER 2 LITERATURE REVIEW 2 LITERATURE REVIEW

Member of staff stimulation is linked with rewards. Employees are positively motivated with positive rewards and negatively motivated with negative actions. (Victor, 1964). Human resources are the important variable for the sustainability and growth of any organization. The process starts the recruitment of good quality employees and selection of the precise people for the precise jobs. Employees engagement is directly related on the selection of right people for right jobs (Hunter & Schmidt, 1983).

When the employees are accepted in the decisions making process in dealing routine matters it has a successful impact on the organizations. If these actions and decisions are predisposed by their individual inner drives and enthusiasm it is assumed that employees are fully engaged and are working in positive direction (Iaffaldano& Muchinsky, 1985). Workers prefer to engage into different levels of commitments in reply to the income they accept from the respective organization. People show their engagement by way of devoting their more energy in shape of more time and effort. This is a way the employees are observed as fully engaged in the organizations work. (Kahn, 1990) Organizations in which employees were participative in decision making practices at higher levels have showed more employee engagement and their financial performance relative to their opponents organizations gradually increased. (Denison, 1990) When staff considers themselves indebted and they put more profound effort in their job as compare to payment as what they receive from their organization to bring themselves more indulged into their jobs. It means that if an organization provides necessary resources essential by employees to efficiently perform their jobs, they really performed well, and keep themselves engaged. But if an organization fails to do so, the result will be vice versa. . (Khan,1990) The engagement is the level of commitment and involvement focused work efforts, passion, enthusiasm and energy, an employee has towards the organization, results in high performance and superior business results. This level of commitment can be nurtured by an organization only if an organization can win the rational commitment and emotional commitments of their employees in ways that lead extraordinary efforts to compete today (Miller, 2002). Employee engagement is the combination of unique attributes contained by the employees in shape of developing emotional relations with the cerebral commitment to the organization. It is the amounts of optional endeavor demonstrated by employees in a particular profession (Frank et al 2004). When an organization anytime is unable to meet the requirements of the employees, the staff also in response withdraws its energies from the job engagement. They change their role with respect to their physical and emotional attachments(Frank, 2004).
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The degree to which employees are engaged is observed by the motivational level which the employees add to organizational achievement through their optional willingness with respect to effort, time, intelligence and accomplishment of organizational (Baumruk, 2004). When employees are open and without any organizational pressure render their service voluntarily in terms of extra time and put extra effort and energy into their job is called engagement. (Richman, 2006), It states that it is a approach for employees to pay back through their level of engagement to their organization. (Saks, 2006) Culture and trust both play distinctive roles in an organization. Organizational culture has a powerful effect on both performance and long-term effectiveness (Cameron and Quinn, 1999). The reviewed literature contains a plethora of information on the culture of organizations wherein the focus has been primarily on the basic values, beliefs, behavior, and practices that are present. Organizational trust is viewed as a multi-level phenomenon that is closely related to norms, values, and belief in the organizational culture (Shockley et al., 1999). The concept of culture in the organizational and management literature is derived from various anthropological and sociological sources. Organizational studies suggest that a culture can be created that will exhibit the creators values, priorities, and vision (Fairholm, 1994). Trust is globally viewed as a social expectation that has to do with peoples perception of the integrity/honesty, caring, and competence of an individual or system that is verified by experience. Trust is essential in developing mutually dependent relationships and is based upon repetitive actions that yield constant results (Fairholm,1994). Substantial influence can be placed on an organization by its culture, because the shared values and beliefs that are present within a culture represent important variables that guide behaviors (Sathe, 1983). Culture, therefore, has become an important element in understanding organizational processes.

The openness and honesty dimension is demonstrated bymeeting commitments and promises. This dimension is the most frequently cited dimension by people when asked what contributes toorganizational trust (Butler, 1991; Kouzes and Posner, 1987). The openness and honesty dimension involves the amount and accuracy of information that is shared and how sincerely and appropriately it is communicated (Shockley at el., 1999). Trust makes performance easier, since it forms the basis for greater openness between individuals and groups (Kouzes and Posner, 1993). Identification fosters commitment by shaping expectations about behaviors and intensions (McEvily, Perrone, and Zaheer, 2003) and leads to certain actions that will support the vision of an organization. Passion results from identification. Without identification there is no passion and very little, if any commitment. A higher level of identification results in a higher level of commitment, loyalty, and performance (Avolio, 1999). In high-trust environments, people are more willing to share information, admit to and learn from mistakes, and take on challenging tasks. In work environments where trust flourishes, the stage is set for improved morale and productivity (Reina and Reina, 1999).

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CHAPTER 3 NEED AND SCOPE 3 NEED AND SCOPE

The present study on organizational culture and employee engagement helps to get clear picture about the factors which affects the organizational culture and employee engagement. This in turn helps the management to formulate suitable policy to put the employees towards commitment. Hence, the performance level of the employees may also change. The factors that affects organizational culture and employee engagement may change with change in time because the needs of employees too change with change in time. So continuous monitoring and close observation of factors that affect the employees is necessary to maintain a competent work force. Only with a competent work force an organization can achieve its objective. Moreover, human resource is the most valuable asset to any organization. A further study with in dept analysis to know to what extent these factors affect the employees is required.

3.1Objective of the study

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 To study the factors affecting organisation culture and employee engagement To determine the relationship between corporate culture and employee engagement.

CHAPTER 4 Research Methodology 4 Research Methodology

1 Data collection The data is collected through the primary and secondary resources. 1.1Primary resources The data will collect from the structured questionnaire. 1.2Secondary resources The secondary data is collected from the company websites, magazines, journals and research papers. 2 Sample size No of sampling units selected from the population is called sample. Sample size is 100. 3 Sampling method Non-probability sampling techniques cannot be used to infer from the sample to the general population. Any generalizations obtained from a non-probability sample must be filtered through

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one's knowledge of the topic being studied. Performing non-probability sampling is considerably less expensive than doing probability sampling, but the results are of limited value. Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher. 5 Methods of Research The method used for this research is Exploratory research. Exploratory research often relies on secondary research such as reviewing available literature and/or data, or qualitative approaches such as informal discussions with consumers, employees, management or competitors, and more formal approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies. 6 Research Instrument Structured questionnaires will be used to determine the behavior.

7 Research hypothesis Ho: there is a positive relationship between organisation culture and employee engagement in banking industry H1: there is no positive relationship between organisation culture and employee engagement in banking industry.

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CHAPTER 5 References References

1 Reina, Dennis S., and Michelle L. Reina, Trust & Betrayal in the Workplace, BerrettKoehler Publishers, Inc. (1999) [viewed on10/10/2011] 2 Shockley-Zalabak, Pamela, Kathleen Ellis, and Ruggero Cesaria, Measuring Organizational Trust: Trust and Distrust Across Cultures, The Organizational Trust Index, IABC Research Foundation (1999). [viewed on 20/10/2011] 3 Fairholm, Gilbert W., Leadership and the Culture of Trust, Praeger Publishers (1994). 4 Flores, Fernando, and Robert C. Solomon. Creating Trust, Business Ethics Quarterly, 8:2 (April 1998); 205(28), Expanded Academic ASAP, Thomson Gale, University of Alabama in Huntsville (AVL) (26 Jan. 2007). [viewed on 15/10/2011] 5 Iaffaldano, M. T., & Muchinsky, P. M. (1985). Job satisfaction and job performance: A metaanalysis. Psychological Bulletin, 97(2), 251-273. [5/11/2011]
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6 Kahn, W.A. (1990) Psychological conditions of personal engagement and disengagement at work, Academy of Management Journal, Vol 33, pp692-724 [viewed on 8/11/2011] 7 Saks, A.M. (2006) Antecedents and consequences of employee engagement, Journal of Managerial Psychology, Vol 21, No 6, pp600-619[viewed on 6/11/2011]

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