Factors afecting frontline employy performance in vietnam retail banking sector

InternationalSchoolofBusiness ---NGUYENHUUMINHPHUONG FACTORSAFFECTINGFRONTLINEEMPL OYEEPERFORMANCEINVIETNAMRETA ILBANKINGSECTOR SUPERVISOR:Dr... Idid notexperienceanyproblemsinadjusting

InternationalSchoolofBusiness

-NGUYENHUUMINHPHUONG FACTORSAFFECTINGFRONTLINEEMPL OYEEPERFORMANCEINVIETNAMRETA

ILBANKINGSECTOR

SUPERVISOR:Dr VoThiNgocThuy

HoChiMinhCity–Year2014

TABLEOFCONTENTS

ABSTRACT 4

CHAPTER1:INTRODUCTION 5

1.1 RESEARCHBACKGROUND 5

1.2 RESEARCHOBJECTIVES 7

1.3 RESEARCHMETHODOLOGYANDRESEARCHSCOPE 7

1.4 STRUCTUREDOFREASEARCH 8

CHAPTER2:LITERATUREREVIEWANDHYPOTHESES 10

2.1 FRONTLINEEMPLOYEEPERFORMANCE 10

2.2 PERSONALITYTRAITS 12

2.2.1 INTRINSICMOTIVATION 14

2.2.2.TRAITSCOMPETITIVENESS 15

2.2.3SELF-EFFICACY 16

2.3 HUMANRESOURCEPRACTICES 17 2.3.1 EMPLOYEE INVOLVEMENT 17

2.3.2 SERVICETRAINING 18

2.4 SERVICECLIMATE 19

2.5 THECONCEPTMODEL 21

CHAPTER3:RESEARCHMETHODOLOGY 22

3.1 SAMPLE 22

3.2 MEASUREMENTSCALE 23

CHAPTER4:DATAANALYSIS 30

4.1 DATARESULTS 30

4.2 CRONBACH’SALPHACOEFFICIENTOFREABILITYTEST 31

4.3 EXPLORATORYFACTORANALYSIS(EFA) 33

4.4 MULTIPLEREGRESSIONANALYSIS 36

4.5 DISCUSSIONOFDATARESULTS 38

CHAPTER5:CONCLUSIONS,IMPLICATIONS,LIMITATIONSANDFURTHERRESEA RCHES 42

5.1 CONCLUSIONS 42

5.2 IMPLICATIONS 42

5.3 LIMITATIONSANDFURTHERRESEARCHES 44

APPENDIX 50

Thiss t u d y empiricale x a m i n e d q u a l i t y o f f r o n t l i n e employeeperformancet o s a t i s f y customersintheVietnam retailbanking.Basedonthemodelof multilevelinvestigationoffactorsinfluencingemployeeserviceperformanceandcustomeroutcomesbyLiaoandChuang(2004),thisstudyidentifiedthreefactorsthatinfluencingdirecttofrontlineperformanceasf o l l o w e d: p e r s o n a l i t y c h a r a c t e r i s t i c s , h u m a n r e s o u r c e practicesandserviceclimate.A q u a l i t y

m e t h o d s u r v e y b a s e d o n a s a m p l e o f 2 0 0 peopleworkingi n banksandu s i n g bankingserviceinHC M City totestthe conceptmodelwasgiven.The resultofthisresearchs h o w s t h e p

o s i t i v e i n f l u e n c e o f serviceclimateo f b a n k i n g

environmentandself-e f f i c a c y offrontlinenvironmentandself-eenvironmentandself-employenvironmentandself-eenvironmentandself-esandthenvironmentandself-enenvironmentandself-egativenvironmentandself-eimpactofenvironmentandself-employenvironmentandself-eenvironmentandself-einvolvenvironmentandself-emenvironmentandself-entenvironmentandself-elenvironmentandself-emenvironmentandself-enttot

h e i r performance.T h e f i n d i n g o f t h i s studyc o u l d suggests o m e practicalimplicationsf o rmangerstoimprovetheiremployees’performanceaswellascompetitiveadvantageinVietnamretailbankingsector

1.1 RESEARCHBACKGROUND

Developmentofretailbankingsegmentis becomingapotentialbusinessandpromisest o b r i n g m o r e profitf o r banksi n t h e c o n t e x t ofdifficult

d o m e s t i c andforeignfinancialmarket.Intermso f s l o w d o w n creditgrowthi n recentyears,i

n v e s t m e n t i n developinga m o d e l ofmodernretailbankingaimtodivertrevenuefromservicesinstead offocusingonprofitfromcreditwhichisatraditionalbankingmodel.Whenswitchedtoretailfields,banksw i l l havebiggermarketandhaveanabilitytoreducerisksinbusiness.Vietnammarketwitha p o p u l a t i o n o f nearly90millionpeopleandgrowinglevelo f i n c o m e i s consideredasa p o t e n t i a l retailmarketo f commercialbanks.Inaddition,S M E s (smallandmediumenterprises)alsot e n d t o developande x p a n d t h e s c a l e o f business;h e n c e t h i s marketw i l l flourishi n t h e futured u e t o growtho f i n c o m e a n d allk i n d s o f businesses.Retailb a n k i n g couldbeunderstoodthatistheprovisionofbankingservicestoprivateindividualsandSMEsthroughanetworkofbankorcustomerscouldaccessdirectlythroughmeansoftechnology,electronics,internetandtelecommunications.Servicesofferedincludesavingandtransactionaccounts,mortgages,personalloans,debitcards,creditcardsandonlinebanking

From2008tonow,thefoundationofretailbankingmodelhasbeenbeguntoappear.T h e firstiscardservicesandconsumptionloans(debitandcreditcards)aremorecommontocustomers.UntilApril2012,thenumberofcardscirculatingis44.6million cards(upto12t i m e s compare

dt o endo f 2 0 0 6 ) Inaddition,m o r e 1 3 , 7 0 0 ATMsand8 3 , 0 0 0 P O S wereinstalledandalmost32,000POSisconnected(fromIDG-InternationalDataGroupandBIU-

BusinessIntelligenceUnit).Thenextisthecontinuedgrowthofonlinebanking.Accordingtot h e StateBanko f Vietnam,w h i l e therewereonly4 banksw h i c h w e r e deployingo n l i n e

bankingservicesi n 2 0 0 4 , t h i s n u m b e r wasincreasingt o 2 5 banksi n 2 0 0 8 andc o n t i n u a l l y risingto40banksinthequarter3/2012withthemainserviceistoprovideinformation,billpaymentsandt r a n s f e r periodicc a s h i n t h e s y s t e m A n d finally,t h e associatedfinancialproducts(bankingservicesinconjunctionwithinsurance,securities,gold)arebeingdeployedm o r e andmore.Anexampleofthistypeofproductsisthe"bancassurance"(sellinginsurancethroughbanks)thatmakestherevenuesforbanks,developcustomermarketandcreatemorediverse

utilitiestoattractdeposits,insurancepremiumsandpaymentsviaATMcards

Theexpansionofthebankingmarketleadtocompetitionsinretailbankingisinevitable.Banksareconstantlyimprovingthequalityofservicethatnotonlyeffectivebutalsoimprovethebusinessposition andbrandforthebankstopursue retailbankingmodel, cultivateclientsandb u i l d closerelationshipsbetweenbankandcustomers.Bankstend tohavep r e s t i g e clientsi

n t h e servicecommitmentt o eliminatet h e r i s k s ont h e patht o w a r d s sustainableretailbanking.Accordingtoasurveyof18,000retailcustomersin35countriesbyCapgeminiGroup-

a n internationalinformation techno logy group,t h e rateo f customersw h o intendt o change

Somepreviousstudiesproved

thatfrontlineemployeeperformancesignificantlyinfluencetheq u a l i t y ofserviceoperations,since theseemployeespresentthe faceandt h e voiceof th ei r organizationstocustomers(HarlineandFerrell,1996;Schneider,Wheeler andCox,1992).A l l customersneedi s relatedness,assurance,e m p a t h y andr e l i a b i l i t y f r o m employeesand

serviceq u a l i t y ( B r a d y a n d C r o n i n , 2 0 0 1 ) Consequently,t o i m p r o v e s e r v i c e quality,b a n k needfrontlineemployeeswhohavegoodperformancetoattractcustomersusingtheirserviceandhighknowledgeandexperiencet o consultappreciateservices/

products,introducen e w servicesandsolvecustomerproblems.Therefore,frontlineemployeeperformanceenhancementis becomingaconcernedsubject ofmanagersandeconomists

ofVietnameseandtranslateintoVietnamese.Anin-depthinterviewwascarriedoutwithfirsttenpeopleforreferenceanda m e n d m e n t T h e questionnairew o u l d b e testedi n t h e p i l o t s t u d y w i t h 5 0 responses.Theaimofthepilotstudyischeckingcertainissuesbeforeundertakinglarge-

scalestudy.Afterthat,thecompleted

questionnairewasdistributedthroughtwoways:1facetofaceinterviewand2

-o n l i n e s u r v e y -o n G-o-ogled r i v e sentt -o s-ocialnetw-orksandbankingwebsites

ThesamplehasbeenchosentoconductinHoChiMinhCity-abiggestandcrowdedc i t y w i t h a p o p u l a t i o n o f n e a r l y 8 m i l l i o n s T h e totalobservationsm u s t b e atleast2 0 0 frontlineemployeesand200customers

Chapter2:LiteraturereviewandHypotheses

Inthischapter,thepreviousrelatedresearchesareconductedtoproveandsupplementf o r hypotheses.T h e a u t h o r p r o v i d e s literaturea n d recognizedresulto f l a s t researchesi n differentfieldsandover th e worldthat connectingtofrontlineemployeeperformance.The authoralsofiguresoutevidencesofpositiveimpactofthreemainfactorsonfrontlineemployeeperformance:p e

r s o n a l i t y characteristics,h u m a n r e s o u r c e practicesandorganizationclimate.Onthatbasic,hypothesesandconceptmodelareestablishedandtestedi n Vietnamretailbanking

Chapter3:ResearchMethodology

Thisn e x t chapterdescribest h e m e t h o d t h a t researchappliesandt h e p r o c e s s e s t h a t authorconductt h e su r v e y such as:i d e n t i f y i n g targetp o p u l a t i o n s , c h o o s i n g samplingtechnique,datacollectionprocedureandmeasurementscaleforitems.Thechapterdividedint o

t w o parts:SampleandMeasurementScale

Chapter4:DataAnalysis

Chapter4reportstheresultsofthesurvey.Basedonthesurveydata,theauthortestsitems,hypothesesandconceptm o d e l , t h e chapterpresentsi n detailt h e s t e p s t h a t analysedatabasesuchas:Cronbach’sAlphaCoefficientofReliabilityTest,ExploratoryFactorAnalysisandMultipleRegressionAnalysis

Chapter5:Conclusions,Implications,LimitationsandFurther Research

Thefinalchapterp r e s e n t t h e conclusionsunifyresearchresultsandd i s c u s s i o n andelaborateontheirsignificancetothesis.Thentheauthorgivessomepracticalimplicationinrealworkingenvironment.LimitationsandFurtherresearcharealsogivento completethesis

i e s caneitherc r e a t e a salef o r t h e banko r l o s e a customer.Mostofbanksspendmoretimeandenergytryingtofindnewcustomersthantheyspendretainingthecustomerstheyhave.Andeveryinteractionbetweenfrontlineemployeesandt h e i r customersh a s a directi m p a c t o n thepublics’o p i n i o n o f t h e bankd u e t o t h e s e employeesa r e t h e p r i m a r y connectionbetweent h

e banksandcustomers.S o m e customerswanttoreferandfindoutinformationabouttheservicesofretailbanking;thefirstthingtheyhavet o d o i s t o m e e t t h e frontl i n e s t a f f s f o r a d v i c e s T h i

s i s a d e c i s i v e s t e p w h e n bankcustomerswanttoapproachandpersuadecustomerstouseitsservicescausedbythegreatfirstimpressionthrought h e performanceo ft he customerservicere pr

e se nt at iv es Agreeingw i t h t h i s p o i n t o f v i e w , ChaseandTansik( 1 9 8 3 ) arguedt h a

t greaterf r o n t l i n e employeeknowledgeandskillsareneededwherecustomersandemployeeshavehighlevelofcommunicationbecauseunpredictablesituationscreatesaneedforemployeeswhocanmake

continuousandm u l t i p l e

non-programmedd e c i s i o n s d u r i n g t h e servicee n c o u n t e r Ins o m e cases,frontlineemployeesmayobserveallservicedeliveryprocesstocontributethetestinganddevelopmentofnewservice.Hence,SchneiderandBowen(1984)arguedthatfrontlineemployeesareavaluablesourceofnewserviceideasandareevenmoreusefulinhelpingtodetermine waysto implementanewservicetogetafavorablecustomerresponse

Thepreviousstudiesh a v e beenu n d e r t a k e n t o e x p l o r e factorsaffectingemployeeperformanceinhighcontactservicesthatmeanstypicallyinvolveactivitiesinwhichneitherservicep r o v i d e r s n o r c u s t o m e r s absentfromt h e transactionandh a v e a closeanddirectinteractionforaprolongedperiod(Chase,1981).SchlesingerandHeskett(1991)identifiedt w o criticalelementsthatdefineaservicestrategyforhighcontactserviceorganizationsareh u m a n resourcesandservicedeliverysystems.Moredetails,humanresourceselementi n c l u d e tangiblecharacteristic(experience,education),trainingandintangibles(personalcharacteristicso f workforce).Serviced el iv er y systemsi n c l u d e processesandinfrastructureusedtodelivertheservice.Besidesthat,HarlineandFerrell(1996)summarizedthoseprecedingresearchesa nd showedthat attitudeandbehaviorofemployeescanpositive ly orn e g a t i v e l y affectcustomer’sperceptionstoserviceencounterandtheirjudgmentstoservicequality.Theybelievedthatserviceproviderswholackexperienceandtendtobeinconflictw i t h othersarelikelyarelikelytoexhibitdecreasedjobsatisfactionandperformancewhichleadstoadecreaseincustomers’perceivedservicequality.Onthecontrary,contactemployeesarebetterabletosatisfycustomerswhenemployeeshavesomecontrolsovertheserviceencounterlike:self-

efficacy,j o b satisfaction,adaptability.A recentstudybyGoldstein(2003)indicatedthreedimension

so f services t r a t e g y i n a highcontactserviceenvironmentwhichmirrorthoseaddressedbySchlesingerandHeskett(1991):Worksystems( t h e workandjobdesignsthatorganizationsestablishfortheiremployees),Staffeducation,

unitfinancialperformanceatthestorelevelofanalysisandlinkedemployees’personalitiestotheirserviceperformance.Theyalsoindicatedamultilevelframeworkinwhichemployeeserviceperformancewasexaminedasaj o i n t functionofemployeeindividualcharacteristicsandserviceenvironmentcharacteristics.Previousresearchesj u s t focusedo n eithero r g a n i z a t i o n -

levelo r individual-levelanalysis.T h i s isa firststudy

thatcombinedstore-level(or

macro)approachandindividual-level(or micro)approachtomeasure employeeserviceperformance However,thelimitationof thiss t u d y i s t h a t t h e s a m p l e s o f s u r v e y w e r e examinedo n a singleo c c u p a t i o nfromt h e sameorganizationin 25restaurantsin U.SMidwest.Forthisreason,thestudypresentedherebasedo n a researcho f Liaoa n d C h u a n g ( 2 0 0 4 ) andf i n d

o u t factorst h a t effectingt o frontl i n e serviceemployeesin retailingbanking

2.2 PERSONALITYTRAITS

Therea r e manyp r e v i o u s researchesdemonstratedp e r s o n a l i t y t r a i t s o f i n d i

v i d u a l s influencingt h e i r o w n w o r k i n g performancei n differentf i e l d s o f works u c h asrestaurants,h o t e l s , banksandhospitals.Toimprovethistheory,CostaandMcCrae(1994)hadcreateda

modelcalledB i g F i v e m o d e l T h i s m o d e l measuresdifferentt r a i t s o f h u m a n leadt o t h e i

r behaviorsw i t h o u t overlappingandi s usedasanobservationalt o o l basedo n f i v e factors:agreeableness,conscientiousness,extroversion,neuroticism,andopenness Inadditionto,a similarideaofLiaoandChuang(2004)andBarrickandMount(1993)isthatfourofthesef i v e factors(conscientiousness,neuroticism,extraversionandagreeableness)wereassociatedw i t h performancei n allj o b s andexpectedt o b e p a r t i c u l a r l y relevantwhenperformanceinvolvedinteractionsw i t h o t h e r people,asi t doesi n a servicec o n t e x t Exceptf o r neuroticism,threeremaining

characteristicsh a v e a p o s i t i v e effecttoperformanceo f employeeinhighcontactservice.Consci

entiousness isdefinedasagoodtraitofapeopleoremployeesi n workinge n v i r o n m e n t w h o i

Anotheraspectt o b e consideredbyYavas,KaratepeandBabakus( 2 0 0 9 ) i s betterinsightstobeshiftthefocusfrombasicpersonalitytraitsofbigfivemodeltospecifictraitswhicharerelevantforfrontlineservicejobsingeneral.Theseareintrinsicmotivation,traitscompetitivenessandself-

efficacy.Thesethreetraitsaremeasuredbyitemsthatareassociatedwithfrontlineemployeeswhousuallyworkunderstressfulcondition andrequirek e e p i n g asmilingfacetointeractwithcustomers.Asaresult,theyfoundasusceptiblelink

e x t e n t o f employeeinexcitedaboutworka c t i v i t i e s andt h a t i s motivatedtoengageinitforthesakeoftheactivity itselfandnoteveryoneisintrinsically motivatedforanyparticulartask.Clearly,intrinsicmotivationisgoodfortheimprovementofworkcreativity,workq u a l i t y andj o bperformancewhenpeopleh a v e internaldesirest o performaparticulartaskthatgivesthemmorepleasure,developsaparticular skill,orsatisfiestheirself-esteem.Morespecifically,duetointrinsicmotivation,frontlineemployeesi n bankinghavemorecreativityandstrongdesiretoperformtheirbestabilityandexpecttoreceivegoodevaluationsfromtheirsupervisorsandcustomers.Theyarelikelytoconfrontad i f f i c u l t y o r currentp r o b

l e m andl e a r n h o w t o s o l v e i t bythemselves.Therefore,i n t r i n s i c motivatedemployeesareinterestedinexplorenewpathwaysandtotakegreaterrisks(Amabile,Goldfarb,andBrackfield,1990).Thatisthereasonwhyoneofthemostimportantconcernsforserviceenterprisesiseffectiveimprovementthefront-

lineemployees’intrinsicm o t i v a t i o n Sinceintrinsicmotivationreflectsthetendencytoexperiencepositivepersonalitytraits,weexpectthat:

Hypothesis1 a : Therei s apositiverelationshipbetweenI n t r i n s i c m o t i v a t i o n a n d frontlineser

h i s activitiesands i t u a t i o n s t h a t i n v o l v e interpersonalcompetition(Kohn1992).Thisdefinitionisconsistent withSpenceandHelmreich’s(1983)conceptaboutoneofpersonalitytraits.SpenceandHelmreichnotesthatpersoninhighcompetitivenessenjoyininterpersonalcompetitionandhavestrongdesiretow i n andb e bettert h a n others.K o h n (1992)a l s o demonstratest h a

t t h o s e w h o areh i g h l y competitivealwayskeepm o n i t o r t h e i r performancet o m a k e s u r e

t h a t t h e y ares u r p a s s i n g t h e i r peers.T h e y arecommitted bythemselvesandseta goalt o outperformothers,hence,t a k e anextraeffortinpreparationandexecution.Forhighlycompetitivefrontlineemployeesi n bankingindustry,t h e inherentd e s i r e t o b e a professionals t a f f andt h e importancetheyattachtoexceedingtheperformanceofothersmotivatethemtosethighertargetofrevenueandfasterpromotion,exertahigheffortlevel,andactmeaningfully intheexpectationtha

tt h e chosenbehaviors willleadto winningperformance.Then,

hiscapabilitiestoorganizeandtoexecuterequiredactionprocesstoachievegivenattainments(Bandura,1977).Agreewiththisconcept,StajkovicandLuthans(1998)statest h a t a h i g h self-

efficacyi n d i v i d u a l couldmobilizet h e motivation,cognitiveresourcesandcoursesofactionneededtosuccessfullyexecuteaspecifictaskwithinagivenc o n t e x t Moreover,Bandura(1977)alsoemphasizedthedifferentbetweentheconcept”self-efficacy”and“ s e l f -

confident”( ano v e r a l l o r generalfeelingo f competence)and“ s e l f

-

esteem”(anestimateofone’svalueanddegreeofself-appreciation).Self-efficacyplaysanimportantroleinchangingandaffectinganindividual’sbehavior.G is t andMitchell(1992)determinesthatself-

efficacyisanimportantmotivational construct.Itinfluencesindividual choices,goals,e m o t i

o n a l reactions,effort,c o p i n g andpersistence.Anyindividualwhohast h e abilitytoshowcommitmenttohiscareeralwaysisfoundtomakeanattempttoimproveh i s skillsandmotivatehimselft o performwell.Self-

efficacyalsochangesasa resulto f learningexperienceandfeedback.Incontrast,employeesw h o d o

u b t t h e i r capabilitieswilld r i v e themtoshyawayfromdifficulttasks T h e y easily giveu

p ands l o w torecover their confidencef o l l o w i n g f a i l u r e W h e n f r o n t lineemployeesd o

n ’ t judget h e m s e l v e s ablet o d o t h e i r jobwell,theymaynottrytodoit,andnottoputthemselveswillingintothesituationswhichtheyt h i n k theyw i l l fail.Peoplei n p o o r s e l l -

e f f i c a c y areafraido f newthingsandchallengesthentheyneitherrecommendnewproducts,servicesandsolutions tocustomers.Naturally,thisleadstoapassivemannersandattitudeofemployeesinworkingenvironment.Therefore,weproposethat:

Hypothesis1c:ThereisapositiverelationshipbetweenSelf-efficacyandfrontlineserviceperformance.

2.3 HUMANRESOURCEPRACTICES

Humanresourcesmanagementi s t h e importantvariablef o r t h e s u s t a i n a b i l i t y andgrowthofanyorganization.AccordingtoStorey(1995),HumanResourcePracticesinvolvest o pmanagementandl i n e managementi n p r a c t i c i n g t h e principlesw h i c h i m p r o v e s t a f

f s ' c a p a b i l i t y andcommittedt o endoww i t h a c o m p e t i t i v e advantage.Inpolicieso f

h u m a n resourcemanagement,employeesareconsideredasvaluableresourceandalltheemployeeso f th e organizationh a v e t h e rightt o m a k e t h e i r o w n decisionsprofitableo n t h e l o n g termbasis

AstheHumanresourcepracticesarebeengivenmoreimportanceandimplemented,thereise x t

e n t fordirectinvolvementofemployeesthroughschemesofemployeeengagement.Whent h e employeesareacceptedinthedecisionsmaking

processindealingroutinemattersithasasuccessfulimpactontheorganizations.Iftheseactionsanddecisionsarepredisposedbytheirindividualinnerdrivesandenthusiasmit

isassumedthatemployeesarefullyengagedandareworkingi n

p o s i t i v e d i r e c t i o n (IaffaldanoandMuchinsky,1985).FollowedbyLiaoandChuang(2004),thereviewoftheliteratureonhumanresourcepracticesindicatedemployeeinvolvementandemployeetrainingasthemostrelevantforemployeeperformanceinservicesettings

2.3.1 EmployeeInvolvement

OneofthedeterminantsthatLiaoandChuang(2004)mentionedinemployeeinvolvementisparticipativedecision-

makingoptionofemployeeintheorganization’sdecisions.Therearemanypreviousresearchexaminedthisrelationshipanditsconsequences.Denison(1990)r e p o r t e d t h a t organizations,i n whichemployeescouldb e participatedi n decision-

makingpracticesathigherl e v e l s , h a v e showedm o r e employeeengagementand

theircompetitionincompanywillbegradually increased.Cascioetal.

(1997)promulgatedt h a t employeecouldinvolvesi n

decision-m a k i n g t e n d e n c y v o l u n t a r y engagew i t h organization.Edecision-mployeesrefertocontributetheirideasthattheyd e t e c t e d whileservingcustomersandfeedbacksfromcustomerstoimproveproductsorservicesofcompany.Empatheticfrontlineemployeeinvolvementindevelopmentandi m

p l e m e n t a t i o n mayhelppreventp r o d u c t i v i t y ande f f i c i e n c y improvementgoalso f t h e firmfromoverwhelmingthe objectiveo f m e e t i n g c u s t o m e r needsi n t h e n e w service.M o r e o

v e r , S c h n e i d e r andBowen(1984)contendt h a t f r o n t l i n e employeei n v o l v e m e n t i n newserviced e v e l o p m e n t improvest h e technicalqualityofthenewservice,improvestheserviceclimateandemployeemoraleint h e serviceestablishment, andpositively affectscustomersatisfaction.Therefore,employeeinvolvementhasadirectaffecttoemployee performance:

Hypothesis2a:Thereisapositiverelationshipbetweenemployeeinvolvementandfrontlineservic

eperformance

2.3.2 ServiceTraining

SwansonandHolton(2001)definedtrainingisasystematicprocessofattemptingtodevelopemployees’knowledge,skillsandabilities thatarecriticalforsuccessfuljobperformance.Foremployeesengagementtraininghasusuallybeenestablishedbymanagementtodevelopaparticularrangeofbrainthinking,developingskills,logicalreasoningandproblemsolving.Trainingi s essentialf o r futurep o s i t i o n aswellaspresentp o s i t i o n ofemployeesto acquirefastchangingtechnologies,systembasedthinking andont i m e logicald e c i s i o n m a k i n g a b i l i t i e

s

Front-lineserviceemployeesm i g h t receiveinitialtrainingonhowtheorganizationexpectsthemtoservecustomers,handlecustomers’complaintsandlearna b o u t bank’sproductsandservices.M o r e and

m o r e researcheswere

givent o p r o v e t h a t employeet r a i n i n g hasa p o s i t i v e effectt o employeep e r f o r m a n c eandcustomersatisfaction.Saks(1996)showedthatt h e amounto f trainingprovidedi s s i g n i f i

c a n t l y relatedt o j o b satisfaction,asw e l l ast o j o b performance,commitment,anda b i l i

t y tocope.SchneiderandBowen(1985)showedthatformaltrainingfornewemployees,generals e

r v i c e t r a i n i n g ( J o h n s o n , 1 9 9 6 ) andgainingk n o w l e d g e aboutanorganization’senvironmentandaboutservice( S c h n e i d e r eta l , 1 9 8 0 ) werehelpfuli n achievingq u a l i t y serviceandcustomersatisfaction.Therefore,

Hypothesis2 b : Therei s a positiverelationshipbetweenemployeet r a i n i n g a n d f r o n t l i n e s

erviceperformance

2.4 SERVICECLIMATE

Organizationclimaterefers to asetofmeasurablepropertiesoftheworkenvironmentt h a t affectingd i r e c t l y ori n d i r e c t l y to p e o p l e w h o l i v e andworki n

t h i s environment.Thatm a y i n f l u e n c e t o t h e i r m o t i v a t i o n andbehaviori n working(LitwinandStringer,1968).Ifc o m p a n y cannotbring acreativityandinnovation intheir workingenvironmentthatmeanst h e y f a i l t o establisha motivatedorganizationclimate.Thatw i l l reduceseffectivenesso f employeeperformanceandprofito f c om pa ny A s Ismail(2003)sa id that successfulorganizationshaveth e a b i l i t y top r o v i d e ab on di ng betweenc r e a t i v i t y andi n n o v

a t i o n w i t h t h e i r climateandmanagementprocesses.Moreover,MartinsandTerblanche(2003)f

o u n d t h a t leaders’support,opencommunication,andprovidingfacilitiesencourageemployeestocomeu pw i t h n e w i d e a s Havea samep o i n t , E n s o n , PirrieandBand( 2 0 0 6 ) demonstratedt h a t workgroups u p p o r t s , organizationalencouragement,andlacko f organizationalimpediments,freedom,andsufficientresourcesarepositivelycorrelatedwithcreativityamongorganizationalmembers

However,servicec l i m a t e i s a differentd e f i n i t i o n i n c o n t e x t o f customerservice.ServiceclimatewasdefinedbySchneideretal(1985)asemployees’sharedperceptionsoft h epolicies,practices,andproceduresthatarerewarded,supported,andexpectedconcerningcustomerservices.W o r k i n g i n motivatedorganizationenvironment,employeesunderstandwhichopportunitiesi n t h e i r futurep r o m o t i o n a r e l i k e l y t o s h o w t h e i r b e s t performancet o customersandreadyto deal withanyawkwardsituation.Thus,

Hypothesis3:Thereisapositiverelationshipbetweenserviceclimateandfrontlineserviceperfo

rmance

Fig.1Conceptualmodel

tt h e p os i t i o n s suchasteller,customerservicere la ti on sh ip , creditofficer.Twogrouprespondentsa r e s e p a r a t e t o survey:G r o u p 1 includespeoplew h o workingi n banksenvironmentasa c u

s t o m e r servicer e p r e s e n t a t i v e (frontlinee m p l o y e e s ) , group2 includespeoplew h o studyingandworkingi n H C M C i t y andu s i n g r e t a i l bankingservices(customers).Thequestionnairesystemalsowasdividedintotwostreams:oneforemployees(questionnaireofpersonality,H

R practicesandserviceclimate)anda n o t h e r f o r customers(questionnaireofemployeeperformance).Thereasonofthisdivisionis gatheringobjectiveinformationfromeachsubjects u r v e y andt h a t obtainedparameterscanevaluatefrontlineemployee’sperformanceobjectively

Beforegoingtocollectpilot

surveyandmainsurvey,theauthorhaveadeepintervieww i t h f i v e frontlineemployeesw h o h a v

e a n experiencei n s e r v i n g customersf o r o v e r t h r e e years.T h e aimo f t h e s e interviewsi s investigatei f t h e y couldu n d e r s t a n d allt h e scaleandcollectmoreideasfromexperiencedemployees,thenselectscalesthatadaptablewith

Vietnamesethinkingandcultures.Afterthat,thepilot testing ofquestionnairewithfirst50sampleswillbeinvestigatedtoprepareforadjustmentsandrevisionsbeforethemainsurvey.T h e resultshowsthatallrespondentscouldunderstandthequestionsandpilotdatacouldbeanalyzed.T h

EmployeeInvolvement.The5-itemscaleofHaynesetal.

(1999)wasusedtoestimatet h e influencet h a t employeeshaveo v e r decisionsatworki n h e a l t h service.T h i s s t u d y appliesHaynes’scaletovaluethelevelofemployeeevolvementintheirbank.Thereis5 - pointLikertforemployeestoratefrom1-“notatall” to5-“agreatdeal”

ServiceTraining.WeborrowedDINESERV-atoolformeasuringrestaurantserviceq u a l i t y o f S t e v e n s , K n u t s o n andPatton(1995)tomeasurei n retailbanking.T h e r e are1 3 itemsscalestovalueservicetrainingforemployeesbutonly10itemscouldbesuitableforbankings e c t o r Twor e m a i n i n g itemsare:k e e p i n g restroomt

h o r o u g h l y cleanandp r o v i d e pointLikertscale:1-notatall,and3-toagreatextent

Thiss t u d y t e s t e d allc o m p o n e n t s i n t h e c o n c e p t u a l m o d e l w i t h anunited5 p o i n t Likertscale,anchoringfrom1-“stronglydisagree”to5-“stronglyagree”.Thetablebelowshowsthefulllist of thesecomponents:

2 IfeelagreatsenseofpersonalsatisfactionwhenIdomyjobwell.

3 WhenIperformmyj o b well,itcontributestomypersonalgrowthanddevelopment

4 Myj o b i n c r e a s e s myfeelingofselfesteem

3 Ifeelthatwinningisimportantin bothworkandgames

2 Idid notexperienceanyproblemsinadjustingtoworkin this bank

3 IfeelthatIamoverqualifiedforthe jobIamdoing

4 IhaveallthetechnicalknowledgeIneedtodealwithmyjob, allIneednow

ispracticalexperience

5 Ifeelconfidentthatmyskills andabilitiesequalorexceedthoseofmycolleagues

6 Mypastexperiencesandaccomplishmentsincreasemyconfidencet h a t Iwillperformsuccessfullyin thisbank

7 Icouldhavehandled amorechallengingj o b thanthe one Iamdoing

8 Professionallyspeaking,myjob exactlysatisfiesmyexpectationsofmyself.(reversecoded)

EmployeeInvol

vement

Haynesetal.(1999)

1 Icouldinfluence whatgoeson in theworkarea asawhole

2 Managerasksformyopinionsbeforemaking decisions affectingmywork

3 Ihavethe opportunitytocontributetomeetingson newworkdevelopments

4 Iamallowedto participate indecisionst h a t affectme

ServiceTraining Stevens,

KnutsonandPatton(1995)

1 Employeesin thisbankreceivecontinuedtrainingto providegoodservice

2 Employeesin this bankreceiveextensivecustomerservicetrainingbeforetheycomeintocontactwith customers

3 Employeesofthisbankreceivetrainingonhow to servecustomersbetter

4 Employeesin this bankreceivetrainingo n h o w

2 Rateeffortstomeasureandtracktheq u a l

i t y of theworkandserviceinyourbank

3 Ratetherecognitionandrewardsemployeesreceiveforthe deliveryofsuperior workandservice

4 Ratetheoverallqualityofserviceprovidedbyyourbank.

5 Ratetheleadershipshownbymanagementinyourbank

insupportingt h e servicequalityeffort

6 Ratetheeffectivenessofyourfirms'communicationseffortstoemployeesandcustomers

7 Ratethetools,technology,andotherresourcesprovidedtoemployeestos u p p o r t

t h e d e l i v e r y of superiorqualityworkandservice

EmployeePerforma

ncePerceived

BoruckiandBurke(1999)

1 Beingfriendlyandhelpful tocustomers

2 Approaching customersquickly

3 Askinggoodquestionsand listeningtofind

outwhatacustomerwants

4 Beingableto help customerswhenneeded

5 Pointingout andrelating itemfeaturesto acustomer’sneeds

6 Suggestingitemscustomersmightlike butd i d n o t thinkof

Ingeneral,t h i s c h a p t e r hasf u l l y introducedt h e m e t h o d o l o g y ofr e s e a r c h andp r o c

e s s o f s u r v e y data.Concurrently,theauthoralsoclearlymentionaboutthesourceofmeasurementscaleo f items.Collecteddatawasanalysedbyt h e SPSS2 1 alongw i t h t h e s u p p o r t o fMicrosoftExcel

CurrentPosition Teller

CustomerServiceRelationshipCreditofficer

Others

12544310

Nameofbank ACB

SacombankM

B bankTechcombankForeignbanksOthers

88302319337

62.52215.50

ofdataanalysis

4.1DATARESULTS

Thesampleincluded200 respondentsfromemployeeswhoa r e workingin foreignbanksandcommercialbanksinVietnamand200feedbacksfromcustomerswhoareservedbyfrontlineemployeesinthesebanks.Afterthesurvey,thefigurewasstatisticinthetablebelow:

Percent

441511.59.516.53.5