WOLKITE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

Senior Essay submitted to

RESEARCH PROPOSAL SUBMITED TO WOLKITE UNIVERSITY DEPARTEMENT

OF MARKETING MANAGEMENT FOR THE REQUIREMENT OF BACHELOR OF
ARTS (BA) DEGREE IN MARKETING MANAGEMENT

Prepared by: ID No

NIKU TSEGAYE SSR/0967/12

V
ADVISOR: MS MEAZA.G January,
2023

WOLKIT
E, ETHIOPIA

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 Acknowledgment

First of all I would like to thanks almighty God the most Gracious and most merciful for giving
me strength and talent in pursing this humble research and wish to express deep gratitude to my
advisor instructor Tesfaye S.(MA), who shared his experience and suggested desirable
informational and also I would like to thank the organization employees. And my entire friend
Eyob Tsegaye to helped me the research. Last but not the least; I would like to express my
heartfelt thanks to all my family members who supported me during my study in the university.

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 Abstract

The research deals about assessing the contribution of employee promotion policy for job
satisfaction in case of Commercial Bank of Ethiopia, Gubre Branch. The research focuses on
identifying and clarifying the contribution of employee promotion for job satisfaction. It will also
assess the implementation of promotion policy. The method used to collect data from employees
is census. The primary data was the main type of data used collected through the questionnaire
and interview in this research secondary data was collected by books and internets also used to
the study. To conduct this research all 52 employees of the organization are fully participated in
the study. The finding of the study includes that the bank has its own promotion policy, it gives
promotion to its employees within short period of time, the bank applies seniority and merit
system to promote its employees and there is a strong contribution of promotion for job
satisfaction.

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 Table of Contents

Title Page
Acknowledgement……………………………………………………………………I
Abstract………………………………………………………………………......……II
Table of content…………………………………………………………………….….III
List of table………………………………………………………………….…………V

Chapter One

Introduction ……………………………………………………………………....1
1.1 Background of the study …………………………………………………………..1
1.2 Background of the organization……………………………………………………2
1.3 Statement of the problem ………………………………………………………….4
1.4 Research questions ……………………………………………………………….5
1.5 Objective of the study …………………………………………………………5
1.5.1 General objective………………………………………………………………5
1.5.2 Specific objective………………………………………………………………5
1.6 Research methodology and design ……………………………………………5
6.1 .research design …………………………………………………………………...6
6.2. Population of the study ………………………………………...............................6
6.3. Data source ……………………………………………………………………….6
6.4. Data collection instrument ……………………………………………………….6
6.5. Data analysis tools ………………………………………………………………..6
1.7. scope/Delimitation of the study …………………………………………………..7
1.8. Limitation of the study ……………………………………………………………7
1.9. Significance of the study …………………………………………………………7
1.10. Organization of the study ……………………………………………………….7

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CHAPTER TWO
2. Literature review…………………………………………………………….…8
2.1 What is promotion………………………………………………….…………8
2.2 Purposes of promotion…………………………………………….……….....8
2.3 Objectives of promotion……………………………………………..……….9
2.4 Promotion policy…………………………………………………………….10
2.5 Promotion criteria……………………………………………………………11
2.6 Types of promotion policy…………………………………..……………….12
2.7 Considerable elements for promotion………………………….…………….13
2.8 What is job satisfaction…………………………………………….…….…..13
2.8.1 Determinants of job satisfaction…………………….………................14
2.8.2 Theories of job satisfaction…………………………………………….15
CHAPTER THREE
Data analysis and interpretation…………………………………………..………….16
3.1 Demographic characteristics……………………………………….………..16
3.2 Importance of promotion……………………………………………………19
3.3 Problem of implementing promotion policy……………………………...…20
3.4 Time of getting promotion……………………………………………….….21
5.5 Extent of employee to get promotion……………………………….………21
3.6 Expectation of employee to get promotion………………………………….22
3.7 Employee job satisfaction with current job……………………….…………23
3.8 The criteria to get promotion……………………………………..………….24
3.9 Employee opinion about lack of promotion practice………………………..25
3.10 Rating the promotion policy of the bank……………………………….....26
Analysis of interview………………………………………………………...27
CHAPTER FOUR
Summary, conclusion and recommendation………………………………………28
4.1 Summary ………………………………………………….………28
4.2 Conclusion…………………………………………………...……29
4.3 Recommendation…………………………………………….……30
Bibliography……………………………………………………………………………….
Appendix………………………………………………………………………………….

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 List of Table

Table 3.1. Demographic characteristics…………………………………………17

Table 3.2. Importance of promotion………………………………………….…19

Table 3.3 Problem of implementing promotion policy………………………….20

Table 3.4 Time span for getting promotion……………………………………..21

Table 3.5 Extent of employee interest to get promotion………………………..21

Table 3.6 Expectation of employee to get promotion…………………………..22

Table 3.7 Employee job satisfaction with current job………………………….23

Table 3.8 The criteria to get promotion………………………………………...24

Table 3.9 Employee opinions about lack of promotion practice……………….25

Table 3.10 Rating the promotion practice of the bank…………………………26

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 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

It is no longer news that job satisfaction anchors employee performance. One of the most
important goals of an organization is to maximize employee performance in order to accomplish
those goals (Butler & Rose 2011). In doing this, the organization needs not only highly
motivated but also satisfied and psychologically balanced employees to increase performance
and productivity in the organization. Employee satisfaction, performance and retention have
always been very important issues in employee management literature and among human
resource management practitioners especially in developing countries like Nigeria.

According to Scott and Clothier “A promotion is the transfer of an employee to a job which pays
more money or one that carries some preferred status”. According to Pigors and Charles “
Promotion is advancement of an employee to a better job - better in terms of greater
responsibility, prestige or status, greater skill and especially increased rate of pay or salary.

Promotion systems affect almost all aspects of organizational lives. This is particularly evident
from studies of human resource management (HRM) (Fuller and Huber, 1998) and internal labor
markets (Baker and Holmstrom, 1995; Barron and Loewenstein, 1985), to name a few. Given the
importance of promotion systems in organizations, it is surprising that few studies have
attempted to examine the role of various environmental organizational and job factors on the
effectiveness of promotion systems (Allen, 1997; Ferris et al., 1992).
Promotions appear to be the most important form of pay for performance in most organizations,
especially in hierarchical, white-collar firms. They are the primary means by which workers can
increase their long-run compensation (McCue 1992; Lazear 1992). They are usually given to the
best performers (Medoff & Abraham 1980, 1981; Gibbs 1993). Therefore, promotions should
generate substantial motivation in many settings. Moreover, there often does not seem to be
strong pay for performance within jobs, which only increases the apparent importance of
promotions for organizational incentives (Hedström 1987).

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It follows that in order to analyze the systems firms use to motivate employees, it is essential to
fully understand the incentive effects of promotions. Promotions have generated a great deal of
theoretical interest, especially in the context of tournament models (Lazear & Rosen 1981).
However, this literature is still incomplete and somewhat stylized, making it difficult to link the
theories to empirical work. This paper fills in some of the gaps, answering some remaining
theoretical questions and making the theory more amenable to empirical testing. The efficiency
viewpoint is consistent with contingency theory that argues that one best practice does not fit all.
Organizations must continually adapt their practices to environmental realities to improve
performance (Lawrence and Lorsch, 1967). Contingency theory goes beyond the economist’s
quest for understanding in seeking to provide normative guidance for managers on how to adjust
organizational parameters to cope with changing environmental conditions.

1.2 BACKGROUND OF THE ORGANIZATION

Commercial bank of Ethiopia is

 The leading bank in Ethiopia, established in 1942.

 Pioneer to introduce modern banking to the country.
 It has more than 980 branches stretched across the country.
 The leading African bank with assets of 311 billion birr as on September 30 th 2015.
 Plays a catalytic role in the economic progress and development of the country.
 The first bank in Ethiopia to introduce ATM service for local users.
 Currently commercial bank of Ethiopia has more than 11million account holders and
the number of mobile and internet banking users also reached more than 460,000 as of
September 30 th'2015. Active ATM card holders reached close to a million.

Vision

To become a world-class commercial bank by the year 2025.

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 Mission

We are committed to best realize stake holder’s needs through enhanced financial intermediation
globally and supporting national development priorities, by deploying highly motivated, skilled
and disciplined employees as well as stage of the art technology we strongly believe that wining
the public confidence is the basis of our success.

Values

1. Corporate citizenship
 We value the importance of our role in national development endeavor and step-up for
commitment.
 We abide by the law of Ethiopia and other countries in which we do business.
 We care about society’s welfare and the environment.

2. Customer satisfaction
 We strive to excel in our business and satisfy our customers.

3. Quality service
 We are committed to offer quality service to our customers' and aspire to be branded with
quality in the mind of our customers and the general public.

4. Innovation
 We encourage new ideas that can improve customers' experience and the banks
performance.

5. Team work
 We recognize the importance of teamwork for our success.
 We respect diversity of viewpoints.

6. Integrity
 We are committed to the highest ideal of honor and integrity.

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7. Employees
 We recognize our employees as valuable organizational resources.

8. Public confidence
 We understand that the sustainability of our business depends on our ability to maintain
and build up the public's confidence.

1.3 STATEMENT OF THE PROBLEM

The research of pasco et at /2002 identifies that deficiency of acknowledgement and external
honor on employee’s work is important for system moral excellence because in acknowledge on
a good job extending “encouragement honor” is chiefly predict in rules and principals by
supervisors. Employee job satisfaction diminishes due to deficiency in recognition and
rewarding.

According to the research of Belete Tiyte in june,2014 some of the causes that the researcher
experienced are long work days, starting from Monday up to Saturday, does not share employees
idea for judgments, unwanted over time which is paid or unpaid or without interest of the
employee and without regular time more on Saturday and Sunday, inability (failure) to achieve
goals with available time resources because of interruption to other work given additionally,
difficulty in taking vacation time.

The researcher observes and experiences some situation, today, employees has less interest in
extra hours, attendance and punctuality, knowing hat how to motivate will help to eliminate or
reduce the performance problems. In order to achieve the organization goal organization should
promotional activity. Like bonuses, allowance and training to their employee’s effective
promotion policy there are satisfied.

Therefore, this study would like to investigate assessing the contribution of employee promotion
policy for job satisfaction in commercial bank of Ethiopia, Kombolcha branch.

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1.4 RESEARCH QUESTION

The following questions are what this study attempts to address in relation to the research topic.

 What are the challenges of implementing promotion policy?

 Does employee promotion has any benefit?
 What are the bases for employee promotion in the case organization?
 Does employee promotion has any contribution for job satisfaction?

1.5. OBJECTIVE OF THE STUDY

1.5.1. GENERAL OBJECTIVES

The overall objective of the study was assessing the contribution of employee promotion policy
for job satisfaction.

1.52. SPECIFIC OBJECTIVES

Specifically the research intends to:

 To identify the problems faced when implementing promotion policy.

 To identity the benefits of employee promotion.
 To describe the bases for employee promotion in the organization.
 To identify whether employee promotion has contribution for job satisfaction or not.

1.7 SCOPE /DELIMITATION OF THE STUDY

It is too much difficult to cover study the whole of commercial bank of Ethiopia. This study
would be delimited to commercial bank of Ethiopian, on main branch, located in Gubre town.

1.8 SIGNIFICANCE OF THE STUDY

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The major significance of this study was to provide valuable information about the contribution
of employee promotion policy for job satisfaction.

 The study would reveal the contribution of employee promotion policy for job
satisfaction.
 It could help the case organization to make necessary adjustments.
 It may also serve as a basis for further research to be conducted with regard to the
topic.

1.9 LIMITATION OF THE STUDY

It is obvious that, every researcher face some degree of limitation while conducting certain
investigation. The major causes of limitation are.

 Unwillingness of the respondent to give appropriate answer to questions provided.

 Lack of computer and internet access.

1.10 ORGANIZATION OF THE STUDY

 The paper would be organized in four chapters. The first chapter deals with the
introduction and general view of the research as background of the study,
statement of the problem, objectives, scope and limitation of the study. The
second chapter presents literature review which is useful and related to the study.
The third chapter presents the analysis and interpretation part based on the
collected data. Chapter four deals with summary, conclusion and recommendation
part of the research.

CHAPTER TWO

2 LITERATURE REVIEW

2.1WHAT IS PROMOTION?

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Promotion is a process of advancing employees to higher position keeping in view their
capabilities, job requirements and personality needs (Agarwal, 1982).

Promotion is the upward reassignment of an individual in an organization’s hierarchy,

accompanied by increased responsibility enhanced status, and usually with increased income,
though not always so. (Monappa, 1999).

2.1PURPOSES OF PROMOTION

A promotion policy signifies management's commitment to recognize and reward excellent

performance. It motivates employees to aspire for advancement opportunities within the
organization. It also contributes to employee satisfaction. (Agarwal, 1982).

The following are the purposes of promotion:

1. Promotion is an extremely useful morale creating device.

2. Is useful in conserving proved skill, training and ambition.
3. May be means to reduce discontent and unrest
4. Furnishes an effective incentive to initiate, enterprise and ambition.
5. May be helpful in attracting suitable and competent workers.
6. Promotional plans suggest logical training for advancement.
7. To encourage feeling of contentment and a sense of belongingness towards the organization
(Kumar, 2000).

8. To utilize the employee skill, knowledge at the appropriate level in the organizational
hierarchy resulting in organizational effectiveness and employee satisfaction.

9. To develop competitive spirit and inculcate the zeal in the employees to

acquire the skill, knowledge etc, required by higher level jobs.

10. To develop competent internal source of employees ready to take up jobs at higher levels
in the changing environment.

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11. To promote employee self-development and make them await their turn of promotions. It
reduces labor turnover.

12. To promote a feeling of content with the existing conditions of the company and a sense of
belongingness.

13. To promote interest in training, development program and in team development areas.

14. To build loyalty and boost morale.

15. To reward committed and loyal employees (McGraw-Hill, 2003).

2.3 OBJECTIVES OF PROMOTION

The following are the objectives of promotion:

1. It is recognition of a job well done by an employee.

2. It is a device to retain and reward an employee for his/her years of service to the
organization.
3. It is to increase individual and organizational effectiveness.
4. It is to promote a sense of job satisfaction in the employee.
5. It is to build loyalty, morale, and sense of belongingness in the employee.
6. It is to impress upon others that opportunities are open to them also in the organization, if
they perform well (monappa ,1999).

2.4 PROMOTION POLICY

Promotion policy is a set of rules and guidelines set by the organization that lines how employees
are interact with potential possession within the organization.

A sound promotion policy must satisfy the following criteria:

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 a.It should enjoy consistency, i.e. it will apply irrespective of the person concerned.
Consistency demands that the policy should be so correlated to career planning that there
should not be sudden.
b. It should be fair and impartial i.e., the management should be able to remove all
suspicion of arbitrariness, improvisation to suit particular individuals’ nepotism, etc.
c.Promotion should be a planned activity, i.e. the management should make a correct
assessment of the requirements or opportunities of promotion with the organization so
that there is no phenomenon of ‘bunching’ i.e. no over estimation or under estimation
(Kumar, 2000).

The promotion policy should involve six elements as follows:

1. Promotion policy statement, which should consider whether vacancies primarily to be filled
up from within the organization by recruitment from outside. Is any preferential treatment to
be given to direct recruits? Usually internal promotion is preferred over external recruitment
and increase is given at the time of promotion, otherwise promotion is meaningless (Kumar,
2000).
2. Establish a plan of jobs, i.e. decide on what basis promotion are to be given, whether a
performance appraisal, or on the base of confidential records, or job and post bid system
(Ibid).
3. Trace transfer routes, i.e., having some type of formal and systematic promotion channels.
Ladders giving paths of advancement, promotional charts, opportunity charts of fortune
sheets clearly distinguish each job and by lines and arrows, connect various jobs.
4. Prepare employees for advancement, through the provision of some training either on the job
in professional/technical institution, or through job rotation, multiple management, under
study and conferences.
5. Communicate the policy
6. Detailed personnel and service records are kept reedy on the basis of which promotion may
be made (Kumar, 2000).

2.5 PROMOTION CRITERIA

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Management may face a difficult task of deciding who to promote, since there are more
candidates then openings. The choice is usually revolves around evaluation of relative merit,
ability and length of service. The extent to which promotion should be based on seniority is
almost always an area of dispute between unions and management.

In current practice, seniority has become major consideration in promotion and is many transfers.
Seniority means length of service (Kumar, 2000).

a. Pros and cons of the seniority system

Seniority system is based on the length of service of an employee organization. Seniority system
put premium on length of service and job experience; those who were first in should have first
choice; relatively new compeer should get fewer benefits, and accept more of the hardship of
working (Monappa, 1999).

Seniority is a factor which can be measured quantitatively. It is easily explained and understood
and therefore, escapes changes of favoritism and discrimination. Seniority is considered to
contribute to the employee’s ability on the assumption that the longer a person does a job, the
more he learns about it. This experience gives him greater knowledge of the organization and job
related to this own, hence he is more suitable for promotion. However, this assumption also has
the revenue effect that after certain time span learning diminishes a phenomenon on referred to
as: “trained in capacity” (Monappa 1999).

b. Pros and cons of merit system

Merit is taken to mean an individual’s efficiency and capacity as judged from past performance.
The strong arguments in favor of using merit or ability as criterion for promotion is that it
enhance organizational efficiency, and maximizes utilization of talents, since only deserving
employees are promoted after a thorough assessment of their abilities for the next job of higher
responsibility and status (monappa, 1999).

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However, using merit as the base for promotion is subject to criticism. The lack of reliability in
determining merit criteria objectively is the main obstacle to its becoming the sole base for
promotion. It is difficult to be sure that at a time of promotion of an employee of his success or
failure in the past. This is an uncertainty, a risk that has to be taken (Ibid)

2.6 TYPES OF PROMOTION POLICY

There are five types of promotion policies these are:

I. Originated promotional policy

Originated promotional polices are those policies created by top management of the company.
This does not mean that such policies are initiated only at top management (Kumar, 2000).

II.Implied promotional policy

Implied promotional polices are polices which have not been formulated by competent
authority and have also formal sanction behind them (Ibid).
III. Promotional policy by fiat

Promotion by fiat is the policy announced by top management or owner in arbitrary manner and
which may be changed as often as he likes (Kumar, 2000).

IV. Promotion in case of behavior

Too many self_ centered people are not prepared to cop in way that ensure fair and normal
treatment of others. Many fail to anticipate how often peoples are injured by one persons or firms
decision.

V. Temporary promotion

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Temporary promotion occurs when an employee is appointed to provide short term cover to
carry out the full duties of vacant position in a higher grade (Ibid).

2.7 CONSIDERABLE ELEMENTS FOR PROMOTION

 Ability to do many task
 Behavior with subordinates
 Attendances
 Demonstrated ability to improve quality, productivity
 Consistency in quality of work
 Willingness to accept task
 Ability to finish task on time.
 Honesty (www.citenr.com/quidenceformulating promotion policy).

2.8WHAT IS JOB SATISFACTION?

In fact there is no simple definition because job satisfaction means different things to different
people. Job satisfaction varies according to what a person seeks in a job, how he/she ranks the
items sought in order of priority, and how well the job permits the person to achieve the various
personnel goals. In general “job satisfaction is the collection of feelings and beliefs that people
have about their current jobs” (ivancivich, 1998).

2.8.1 DETERMINANTS OF JOB SATISFACTION

What causes different workers to be satisfied or dissatisfied with their jobs? Four factors affect
the level of job satisfaction a person experience personality, values, the work situation, and
social influence (George, 1999).

PERSONALITY

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Personality, the enduring ways a person has of feeling, thinking, and behaving, is the first
determinant of how people think and feel about their jobs or job set of action. An individual’s
personality influences the extent to which thoughts and feeling about a job are positive or
negative. A person who is high on the big five trait of extraversion, for instance, is likely to have
a higher level of job satisfaction than a person who is low on this trait (Ibid).

VALUES

Values have an impact on level of job satisfaction because they reflect workers, conviction about
the outcomes that work should lead to and how one should behave at work. A person with strong
intrinsic work values is more likely than a person with weak intrinsic work values to be satisfied
with a job that is interesting and personally meaning full (George 1999).

THE WORK SITUATION

Perhaps the most important source of job satisfaction is the work situation itself. The tasks a
person performers (for example, how interesting or boring they are), the people a job holder
interact with/customer, subordinates, supervisors, the surrounding in which a person workers
(noise level, crowdedness, temperature, and the way the organization treat to which pay and
benefits are genres or fear. Any aspect of job and employing organization is part of the work
situation and can affect job satisfaction (Ibid).

2.8.2 THEORIES OF JOB SATISFACTION

Theories or models of job satisfaction are numerous each of them takes in to account one or
more of the four main determinants of job satisfaction (personality, values, the work situation,
and social influence) and specifies in more detail exactly what causes one worker to be satisfied
with a job and another worker to be dissatisfied. Here, we discuss four of the most influential

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theories: the facet model, Herzberg’s motivator-hygiene theory, the discrepancy model and the
steady state theory (Ibid).

A. THE FACET MODEL OF JOB SATISFACTION

The facet model of job satisfaction focuses primarily on work situation factors by breaking a job
in to its component elements, or job facets, and looking at how satisfied workers are with each
facet. Many of the job factors that the researcher have investigated. A worker’s over all job
satisfaction is determined by summing his or her satisfaction with each facet of the job. Workers
can take in to account numerous aspects f their jobs when thinking about their levels of job
satisfaction.

The facet model is useful because it forces mangers to recognize that jobs affect workers in
multiple wars (George, 1999).

B. HERZBERG’S MOTIVATOR HYGIENE THEORY OF JOB SATISFACTION

Rashid and archer state one of the earliest theories of job satisfaction, Frederick Herzberg’s
motivator hygiene theory, focus on the effects of certain types of job facets on job satisfaction.
Herzberg’s theory proposes that every worker has two set of needs or requirements, motivator
needs and hygiene needs. Motivator needs are associated with the actual work itself and how
challenging it is. Job facets such as interesting work, autonomy on the job and responsibility
satisfy motivator needs. Hygiene needs are associated with the physical and psychological
context in which the work is performed (Ibid).

C. THE DISCREPANCY MODEL OF JOB SATISFACTION

The discrepancy model of job satisfaction is based on a simple idea: to determine how satisfied
there are with their jobs, workers compare their jobs to some “ideal job”. This “ideal job” could
be what one thinks the job should be like, what one expected the job to be like, what one went
from a job, or what one’s former job was like. According to discrepancy model of job

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satisfaction, when worker’s expectation about their “ideal job” are high and when these
expectation are not meet, workers will be dissatisfied (George 1999 ).

D. THE STEADY -STATE THEORY OF JOB SATISFACTION

The steady- state theory suggests that each worker has a typically or characteristic level of job
satisfaction, called the steady state or equilibrium level. Different situational factors or events at
work may move a worker temporarily form this steady state, but the worker will return
eventually to his or her equilibrium level. For example, receiving a promotion and raise may
temporarily boost workers level of job satisfaction, but it eventually will return to the
equilibrium level. The finding that job satisfaction tends to be somewhat stable over time
supports the steady- state view. The influence of personality on job satisfaction also consistent
with the steady-state approach (Ibid).

CHAPTER THREE

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