Impact of employee

engagement practices on
customer service in Banking
Submitted By- Anjali Goyal
 Introduction
• In both business and practice, customer management has become the
most discussed problems category. Due to the specifics of attracting
new customers and retaining existing customers in service industries
like banks, managing customers are central drivers of company value.
• When investigating categories of consumer goods such as natural
goods (e.g. forest, agriculture), industrial goods (e.g. shoes, cars,
machines) and services (e.g. banking services, restaurant and
management consultancies) emerged as the most important category
during the second half of the of the twentieth century. Managing
customers has become a major discipline in service industries
especially banking.
LEVELS OF CUSTOMER
RELATIONSHIP:
1. The Basic Level- In the basic level, the service provider provides the service without any further contract
with the customer being served

2. The Reactive Level: The service person offers the services and encourages the customer to call back
whenever he or she has any inconveniences arising

3. The Accountability level: The service provider calls the customer shortly after the transaction is made. The
service provider then solicits from the customer improvement suggestions and any specific disappointments.
This information helps the banking organization in question to continuously improve its service offering.
There are two forms of accountability level and these are:
• a. The proactive level: The service provider and other colleagues in the organization contact the customer
on a regular basis with suggestion about improvements made or about other creative suggestions for future
events.
• b. The partnership level: The service provider and the customer work together to effect customer savings.
Partnership sourcing implies that patronizes of service work more closely to their providers to ensure that
all aspects of the deal suit the need of both parties not just for that deal but those expected in future
Definition of Service
• Service is an intangible experience of performance that the customer
receive along the tangible side of the product purchased. For example
in the banking industry, service is performed for the customers by
employees such as cashier (teller) pays cheques or a banker issuing a
statement and account balances. Here emphasis is placed on the
customer. Service offers the most opportunity to differentiate one
product from another.
Examples of services include:

- Banks and non- banks financial institutions services

- Real Estate
- Legal, educational and social service
- Hotels and lodging places
- Communication
- Retail trade
- Transportation and public utilities
- Auto repairs service and parking
Factors that influence customer retention:

- High quality services to encourage repeat visits

- Customers need to feel valued to be loyal, and excellent customer

service can only create this

- Take a long-term marketing decision for example, continuous

improvement or innovation to keep ahead of customer needs

- Frequent customer contact to establish customer profiles in order to

ensure accurate customer targeting of services and information
 Objectives of the study
- To identify measures by which customer relations could be improved
upon toward retaining loyal customers of banking establishments.
- To examine the nature of customer service practices of Banks
- To ascertain the causes of customer dissatisfaction in the banking
industry.
- To examine how the cordial or adverse relationship of management
and internal customers (employees) promotes or hinders customer
relationship.
- To assist managements of other banking organizations to take
favorable decision towards improving their customer relationships
programes
 REVIEW PAPER
S.no Name of the paper/thesis Author Objectives of study Methodology Conclusion
1. Employee engagement and Sadia Cheema, Asia 1)To show the immotional Personal Interview, Likert scale It built a positive impact on customer,
visionary leadership:Impact on Akram,Farheen Javed commitement between the for analysis this study indicates that when an
customer satisfaction (2015) employee and the customers employee is more engaged with the
2)Vision guiding customers and help them for their daily
work it leads to more satisfaction among
the customers whivh build a relationship
between the customers and the
employees
2. The impact of effective George K. Amoako, (1) determine if CRM has an Descriptive survey, The research was conducted as a result
customer relationship Emmanuel Arthur, impact on customer loyalty Questionnaires of dis covering the satisfaction rate and
management (CRM) on Christiana Bandoh (2) determine if the practice retention rates of these industries. The
repurchase(2012) and Rachel Kafui of effective CRM in focus of the study was to determine
Katah organisations leads to a long ifeffective CRM has an impact on
or short term financial customer loyalty, a long or short term
impact financial impact on the organization,
(3) find out the extent or whether managing customer
degree to which effective relationship effectively builds customer
CRM leads to customer trust in the organization and if the
satisfaction customer value benefits in making
(4) assess if the services another purchase.
provided by the hotel meets
the needs and wants of
customers.
3. A Conceptual Model of ParasuramA.Zeitham To increase the customer Descriptive survey, The view that high quality service gives
Service Quality and its l. V.A. and Berry, value of perception Questionnaires credibility to the field sales force and
Implications for Future L.L. To boost the morale and advertising, stimulates favourable
Research(1985) loyalty of employees and word-of-mouth communications,
customers enhances customers’ perception of
value, and boosts the morale and
loyalty of employees and customers
alike.

4. Towards a Successful CRM RIYAD EID 1.To identify the critical Exploratory factor analysis, pre- The financial services industry as
Implementation in Banks: An success factors for CRM testing were conducted, entering a new era where personal
Integrated Model (2007) implementation. questionnaire attention is decreasing because the
2.To develop and clarify a institutions are using technology to
conceptual model integrating replace human contact in many
CRM constructs, and its application areas. Over the last few
consequences on decades, technical evolution has highly
effectiveness and success of affected the banking industry
customer relationships. .
3.To specify and test
hypothesised relationships
derived from the conceptual
framework

5 Customer Satisfaction Mr. Munish Kumar, to find the customer Descriptive survey, Every bank is trying to retain and
trends in Banking Dr. Sandhir Sharma satisfaction trends in Questionnaires maintain their valuable customers at
Industry(2016) banking industry with any cost. Banks are adopting different
extensive literature review softwares and technological aspects to
make their customers satisfied. Here the
question arises that “how they make
their customer satisfied”
6 A STUDY ON Dr.P. Anbuoli 1. To review the 1. In a competitive environment,
CUSTOMER literature on the concept the Banks should adopt suitable
RELATIONSHIP and use of CRM in marketing skills rather than
MANAGEMENT IN banking sector depending on the trading skills.
BANKS(2013) 2. To analyze the Hence, new services should be
perception of customer constantly introduced to ensure the
on CRM as a tool of growth of the Banks and to be
banking sector in competitive in the market and to
retention of customers keep up the enthusiasm of the
in general employees and customers etc. 2.
3. To offer pertinent Implement a Customer Centric
suggestions based on Process in Banks. 3. Employee
the findings of the Relationship Management first
study. before Customer Relationship
Management
7. Impact of customer Saeed Awadh This study is to carry Questionaire, This study aims to provide a useful
relationship management Bin-Nashwan, out a systematic review Random sampling, contribution to industries or
(CRM) on customer Haslinda Hassan on the impact of CRM ANNOVA practitioners to understand the
satisfaction and on customer satisfaction importance of CRM on customer
loyalty(2012) and customer loyalty. satisfaction and customer loyalty.
The review also provides them with
insights on what drives CRM
which later assists them in
formulating their CRM processes.
Businesses need to look at the
measures of the CRM that have
a significant impact on customer
satisfaction and customer loyalty
8. Relationship Marketing and Mudasir (A)Trust has directly and Regression, correlation The vast body of literature on
Customer Loyalty: Husnain,Muhamma positively impacts on relationship marketing is often
Evidence from Banking d Waheed Akhtar customer loyalty. suggesting that it is a solution in all
Sector (2017) (B)Commitment has conditions for customers where such
directly and positively a relationship strategy is looking
impacts customer loyalty suitable. This study has confirmed
(C)Communication has that measurement of the
positive and significant “underpinnings” of RM can forecast
impact on customer customer loyalty. For that reason,
loyalty. academicians and practitioners
(D) Conflict handling trying to care for loyal customers
positively affects on should pay concentration on
customer loyalty. problems regarding to trust,
commitment, communication and
conflict handling.

9. Understanding the Effect of Peter C. Verhoef 1) to understand the effect Survey,t-test, sampling 1) satisfaction and payment equity are
based on one’s current experiences with
Customer Relationship of CRPs and RMIs on the focal supplier. These experiences do
Management Efforts on customer retention and not necessarily transfer to other products
Customer Retention and customer share or services of that supplier: New events
Customer Share development. may occur during the relationship that
could change these perceptions 2) in a
Development(2003) 2) To examine whether competitive environment, firms attempt to
different variables of maximize customer share. Although
CRPs and RMIs influence customers may be satisfied with the focal
firm’s offering, they may be equally
customer retention and satisfied with competing offerings from
customer share other suppliers. This again limits the
development explanatory power of satisfaction and
payment equity.
10. A Study on the K. Anantha 1. To understand the descriptive study, Employee Engagement though
Challenges of Employee Gowda, challenges of Employee Secondary data is recognised to be at three levels
Engagement in the Siddegowda Y. S. Engagement collected, questionnaire namely Engaged, Actively
Manufacturing Industries 2. To understand the Engaged and Disengaged, the
findings of this study shows that
in Mysore & Bangalore expectations of the disengaged employees are rare
cities of Karnataka(2018) employees for active organised by the top executives.
engagement Employees are also satisfied with
3. To understand the the compensations given to
factors influencing them. Employer is not expecting
disengagement the employees to work beyond
what is given, nor thinking in a
subtle way whether Employee
Engagement is really import for
them. They are satisfied with the
output given by the employees.
There is no special efforts made
by the management to
understand in depth the concept
of Employee Engagement and its
presence among the employees.
This is a matter of concern. The
capacity building of the HR
personnel and top executives to
be motivated and educated
properly by the Employer.
11. To explore strategies Interviews,Questionire The first recommendation is
Effective Employee Schrita Osborne that some communication organizations
Engagement in the communication business would benefit from focusing
Workplace(2017) leaders use to engage more on (a) rewards and
their employees to recognition, (b) empowering
increase profits employees, and (c) building a
bond between leaders and
employees as strategic
objectives. employee citizenship
The second recommendation is
utilizing management’s
capability to leverage employee
engagement strategies in an
organization.
The third recommendation is that
communication business leaders
could benefit from considering
the study findings that contribute
to improved business practices
and positive social change.
The fourth recommendation is
organizational leaders could use
the results to create leadership
strategies that could raise
employee engagement and job
performance
12. A study of employee Robert Knight Measure the level of Qualitative and quantitative
Organisations have become aware
engagement at Topaz‟s engagement at the Topaz research, Survey, in-depth
that it is no longer their patents,
South Dublin Region Energy stations in the questionnaire machinery or location that give them
Service Stations(2011) South Dublin region the edge over their competitors.
How to get employees With the surge in 78 technological
engaged in their work? advancements tangible elements can
be imitated faster than ever. It has
been recognised that it is the people
component and resulting
contribution which adds value to the
organisation and give a competitive
edge to many organisations
13. Effective Employee Mohamad S. to explore strategies that Questionaire, 1.communication organizations
Engagement in the Hammoud some communication Random sampling, ANNOVA would benefit from focusing more
Workplace 2017 business leaders use to on (a) rewards and recognition, (b)
engage their employees to empowering employees
2.utilizing management’s capability
increase profits to leverage employee engagement
strategies in an organization. The
application of effective employee
engagement strategies may assist
business leaders in successfully
engaging employees and sustaining
profitability.
3.communication business leaders
could benefit from considering the
study findings that contribute to
improved business practices and
positive social change.
14. The research shows that that employee
A Review Paper on Factors Arti Chandani , Mita To find out the factors that Questionaire, correlation engagement in turn results in decline in
Affecting Employee Engagement Mehta, Akanksha Mall affect the levels of engagement employees’ turnover intentions and
(2016) and Vashwee Khokhar of an employee in an increase in innovative work related
behaviour Engaging employees is a long
organisation.
term task and cannot be accomplished by
one training program, no matter how good
its quality is. Organisations can improve
engagement by opportunity thinking,
enhancing employee decision making, and
commitment

15. This paper contributes to employee

Employee Engagement: A Asst.Prof.Dr. Alaa To synthesize the recent Empirical research, Correlation engagement literature as more tractable
Review of the Recent Empirical Amin Hassan Omar empirical research on employee recent empirical research for future
Literature(2016) engagement research This review highlighted much of
the known scholarly literature on
to explore the recent empirical
employee engagement .and provide
research on employee preliminary information needed to begin
engagement from 2010- 2014 theoretical or framework development
and to encourage more rigorous research
on the concept of employee engagement.
We believe that significant research
opportunities exist with employee
engagement and we provide researchers
and practitioners with guidance for
extending research in this important area.
16. Employee Engagement Anoop Kumar, To examine the current Results of the survey shows
amidst COVID Dr. Shikha pandemic situation with primary data that organisations who have
-19 pandemic: A Challenge Kapoor respect to business perspective collected through a successfully created digital
or of Indian organisations and its questionnaire survey and IT platforms to connect
Opportunity for Indian employees. their employees are enjoying
Organisations To identify various more employee
(2020) available definitions, engagement. Simultaneously,
historical perspectives and organisations are facing
current scenario of employee challenges not only related to
engagement. physical outputs of their
To study the effect of services or production, but
pandemic on current also emotional well being of
engagement status, role of their human resources
emotional well being and use
of digital platforms with
respect to employee job
engagement with the help of
questionnaire survey.
To propose some
suggestions by data analysis
and reviewing the
relationship between
employee
engagement with its above
factors in current pandemic
scenario.
Research Gaps
• As I find many papers on employee engagement and customer
relationship but I didn’t find very less research papers on impact of
employee engagement on customer services
• If I get some papers on impact of employee engagement on customer
services but it is not on the banking industry
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