A quantitative analysis of the relationship between empowerment practices and service quality outcomes

Australian banks have focused their attention on service quality as a strategic tool for increasing organizational effectiveness and gaining a competitive advantage. Many forms of organizational change have been prescribed by researchers and practitioners alike, involving such techniques as redesign, restructuring, re-engineering and total quality management (TQM). The underpinning concept in all of these change programmes is empowerment of workers (Conger Forrester, 2000). The literature, however, shows very little research that tests the relationship between empowerment practices and service quality. This paper reports on a cross- sectional study based on a survey instrument developed for quantitative data collection. Based on a stratified sample selected from a target population consisting of three major banks. The study achieved a response rate of 40%. Quantitative analysis based on multivariate analysis techniques indicates that empowerment practices when simultaneously implemented, have a favourable effect on employee well being, productivity, performance and service quality. Based on the results of the study we conclude that a holistic approach must be taken to implement empowerment practices into banks in order to maximize service quality improvements. The results of this study show that empowering the workforce is a powerful strategy that substantially improves service quality in the banks studied. It is important that management understand the need to implement empowerment practices in a holistic and planned manner where practices are successful in promoting employee autonomy.