Perspective of private and federal banks in Thailand: Factors that can create

employee’s trust and loyalty

Dr. Tiwa S. ParkChairperson of International Business Management

Thai-Nichi Institute of Technology (TNI)

Background

Recently, many organizations are hiring foreigners to work along with Thai employees who are training to be ready to receive AEC in coming years. We cannot deny that employees are the human resource of an organization who are assets of the firms which can be affected to the organization’s performance.

Not only to maintain the relationship with them, but also to create employee trust and loyalty in order to build the satisfaction of their work are essential for employers to do in this day.

There are many factors, such as leadership styles, management policies, money, compensation, social security, welfare, bonus, position, recognition, have important aspects to keep employees to work for long period of time with the companies.

Background

Factors that employees concern most are those they can fulfill their needs and wants, we called Motivator factors or intrinsic (about recognition, responsibility, achievement, advancement, the work itself, and the possibility of growth). In the other word, focusing on the feeling of the employee and motivate them to work and have job satisfaction in their works.

On the other hand, Hygiene factors or extrinsic composed of job, salary, security, status, company procedures, working condition, quality of technical supervision, and co-worker relations affect the employee’s job dissatisfaction. Improving motivators will directly increase the level of job satisfaction (Sritapann, 2002) . Therefore, as employers, we must be aware of what employees are concerning during working with the organization too. These aspects can be applied to all businesses and countries.

Background

In job’s satisfaction there are many factors consist of skill variety, task variety, task significance, autonomy and feedback. Job satisfaction comes from good and correct motivation factor that the organization selects for their employee and match with an individual need and wants.

Creating employee job satisfaction is the beginning of convincing them to trust and loyal with the company so that they will produce work effectiveness. Therefore, in order to understand the nature of the employees and find the best factors that can motivate them to work and build trust and loyalty toward the organization, the researcher set research hypotheses as followed;

HypothesesHypothesis 1: Tranformational leadership style is

more likely to build trust more than other styles.

Hypothesis 2: Tranformational leadership style is more likely to build loyalty more than other styles.

Hypothesis 3: Employee who has high job satisfaction is more likely to have high trust and loyalty than who do not.

Hypothesis 4: Economic and compensation factors are more likely to increase job satisfaction than others.

Hypothesis 5: Employee who value intrinsic factors is more likely to increase job satisfaction more than who value extrinsic factors.

Hypothesis 6: Management and policies factors are more likely to increase job satisfaction than others.

Hypothesis 7: Employees who have more working year are more likely to increase job satisfaction than who has less working year.

Hypothesis 8: Employee who gets high salary is more likely to increase job satisfaction than others.

Methodology

Both quantitative and qualitative methods have used in this study; conducting in-depth interview with two human resource managers in banking business as well as using the survey to conduct both banks’ employees along with the open-end questions to get deeper information from employees.

Results:

After receiving the surveys back(400 surveys for both banks), there are 158 participants in each bank, so total is 316 respondents

Only 150/316 that answering in open-end questions.

Results: Hypothesis 1Transformational leadership style is more likely to build trust to employees more than other style.

The results have shown the significant result at .000 which means confirm the hypothesis that transformational leadership style is more likely to build trust to employees more than other styles.

In order to answer the hypothesis one, the answer from in-depth interview with both managers, the employees are preferred the leader that flexible and can inspire the employees to work.

The good leader should be understanding the employees and also can adapt him or herself to suit with the current situation, they said that every employees have good part but they also have their own condition, so to be the good leader they need to understand the employee’s condition and try to find the good point from the employee and then inspire them to achieve the goal.

Moreover, the researcher can get some necessary information from the open-end question that the employees from both banks that employees prefer the leader that can inspire and flexible and also understand the follower thus all of these factors can motivate employee to have trust toward the organization.

Results: Hypothesis 2The transformational leadership style is more likely to build loyalty to employee more than

other style. The results indicate the significant result at .000 which confirms the hypothesis two that transformational leadership style is more likely to build loyalty to employees more than other styles.

In order to support the hypothesis, the answer from an in-depth interview with both managers support that the good leadership can make employee satisfies and then it can lead to build employee’s loyalty later. The employees would feel good and satisfy when they feel that they have understanding from the leader and also leader who can cheer them up and inspire them to work thus, the kind of transformational leadership style can build loyalty to the employee more than others leadership styles.

Moreover, the researcher also gets some of the information to support this hypothesis from an open-end question. Generally, the employees answer that the good leader is one of the best factor that can create trust and loyalty among employee and from Hypothesis 1 that the employee tend to like leader that flexible, who understand and can inspire them. All of these are transformational leadership style so the researcher can assume that transformational leadership style is more likely to build loyalty among employees more than other leadership style.

Results: Hypothesis 3 Employee who has high job satisfaction is more likely to have high trust and loyalty than who do

not.

The result has shown that there is significant at .000 level to support hypothesis three that employees who have high job satisfaction is more likely to have high trust and loyalty than who do not.

Moreover, the researcher gets some interesting information from the in-depth interview saying that the employees when they feel trust and loyalty toward the organization they would feel happy and willing to work, it means that they will have high job satisfaction compare with employees who do not have trust and loyalty toward the organization, they would feel that work is work and have no commitment to the organization, so if the obstacle happen they could feel like “Ok, I’ll leave the organization and find the new job and actually, I’m quite not satisfy with my current job that’s why I’m ready to leave the organization and find the better one” thus the researcher can assume that employees who have high trust and loyalty tend to have high job satisfaction more than who do not.

Results: Hypothesis 4Economic and compensation factors are more likely to increase job satisfaction. From the findings

have shown that the hypothesis four is confirmed with the theory that economic and compensation factors are more likely to increase job satisfaction.

Moreover, from an in-depth interview with the human resource managers who said that the economic compensation such as salary, and welfare can increase employee’s satisfaction and the employee will feel very happy with the economic compensation because they will feel that they work hard and they can get the compensation worthy to their work and also the managers also said that many people want to work in banking business because banking business is the business that give the employee good economic compensation compare with other businesses.

From open-end questions most of the employees answer that the economic and compensation can increase their job satisfaction because if the banks give them the good compensation they would feel happy and willing to work but if the employee work hard but the economic compensation that they get are less than they should get or they expect they would feel unsatisfied and they would be looking for a new organization to work.

Results: Hypothesis 5Employee who has intrinsic factors is more likely to increase job satisfaction. The result is not

confirmed the theory.

From an in-depth interview both of the human resource managers answer that employees are more value in extrinsic factors more than intrinsic factors because the managers said that income is the most important factor that employee care and think about, so if the banks can give employees high salary and good welfare employees would feel very happy and willing to work hard to the organization but if the banks provide the employee good intrinsic factors but not enough extrinsic factors such as salary and welfare the employee would be ready to leave the organization and find the better company.

Also, from open-end questions most of the employees mention about salary, leadership styles, welfare and vacation leave all of these are considered as extrinsic factors so the researcher can assume that extrinsic factors are more important than intrinsic factors in order to increase job satisfaction.

Results: Hypothesis 6

Management and policy factors are more likely to increase job satisfaction. The finding confirmed the hypothesis six.

Furthermore, from an in-depth interview the researcher can find that if the banks have the management and policy that can go together with what employees want to achieve in their career goal, it can increase job satisfaction.

Generally, the management and policy are more concern about the culture and how leaders lead the organization and work style so if the management and policy of the organization suit with the employees, it can increase job satisfaction but it also the employees can work efficiency and effectiveness.

Results: Hypothesis 7The employees that have more work years are more likely to increase job satisfaction. The

statistic results confirmed the hypothesis seven.

As well as from an in-depth interview the researcher can found out that the more employees work the more they will have job satisfaction is true but it depends on the factors that concern with this also.

Basically, the human resource managers said that “It’s no matter how many years the employees work but it depends on whether they success in their job or not”

for example if the employee work for 20 years and they were promote to be the manager and have high salary and also many respect from co-worker so the employee will have high job satisfaction but if they work for 20 years but still have low salary and were not promote so they may not feel happy with the organization.

Results: Hypothesis 8The income factor is more likely to increase job satisfaction. The result is confirmed the theory.

From an in-depth interview the researcher found that the more income employees can get the more job satisfaction that will be increased. Generally, from the previous hypothesis the researcher found that extrinsic factors are more important than intrinsic factors because the employees are value extrinsic factors such as salary, welfare and vacation leave more thus, the researcher can conclude that income is one of the most important factors that can consider as the factor that can create employee’s job satisfaction.

In addition, from open-end questions the researcher can find that most of the employees answer is the “income” which is the most important factors that can create job satisfaction for them.

Conclusion & Implication

The researcher believes that in order to create employees’ trust and loyalty, the organization need to know the motivation factors that make employees satisfy with their work because when the employees are satisfied, it will be developed trust and loyalty, and they will be with the organization for long period of time, the firms do not need to spend a lot of money for training new employees.

Most of the results are confirmed the assumptions except hypothesis 5 which is “Employee who value intrinsic factors is more likely to increase job satisfaction more than who value extrinsic factors.” Because the result showed that employees tend to think opposite with the hypothesis, they value extrinsic factors more than intrinsic. This result is very interesting for the researcher because from the past researches have got different results saying that employees tend to value intrinsic factors more such as achievement, recognition, responsibility, advancement or work itself.

Conclusion & Implication

Thus, for the future recommendation, if other research interest in this topic and want to find the most effective factors that create employees’ job satisfaction and build trust and loyalty among diversity members in the company, should mainly focus on extrinsic factors including salary, job security, working conditions, company and administrative policies, quality of technical supervision and co-worker relations.

Conclusion & ImplicationTo sum up other hypotheses:

1.Both private and federal banks’ results are the same that Job satisfaction is the first concept that build employees’ trust and loyalty.

2.Both banks conclude the same that transformational leadership style is the best style that employees prefer in order to work happily.

3.Both banks state that economic and compensation factors, management and organization’s policies are also affect employees’ job satisfaction, especially the employees who have working long period of time.

4.In addition, employees who have more working years tend to satisfy with their job than who have less working years due to the welfare provided from the banks.

5.And lastly, salary is the most effective factor that employees consider to create employees’ trust and loyalty because they work to exchange for something important for their lives.

Conclusion & ImplicationThus, if the banks can provide them enough money, they tend to believe in the banks

more and loyal to the banks as well.

Even though, the researcher got a good result to support the hypotheses and some interesting point, researcher also found the points for future improvement in order to get deeper information and to play with people inside feeling or psychology, the researcher should be more careful about the questions and to be more detail.

Last but not least, the result can help public relations practitioner to be more consider on employees’ job satisfaction and come up with the best activities and policies that match with company style as well as employees satisfaction.

Finally, the results have helped the organization to be aware and concern more on need and want of employees especially to be ready to the diversity employees from AEC members. The participants are Thai, if the company has different nationalities, will the results would be the same as Thai respondents?

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