Application of Maslow’s Hierarchy of needs theory to a leading commercial bank in Sri Lanka.
In the current context, banks find ways to be on the top of their game in the industry while the competition within the industry is immense. As banks are services providing institutions that are highly customer-centric. Banking products are identical to each other in comparison to the industry and gives almost the same benefit for its customers. Competitive advantage lies in the hands of individuals who provide service where it’s unique to an extent to one person to another. This is where the “culture” of the institution comes in to play.
A good organization culture improves job satisfaction of its employees and especially avoids the types of imprudently risky practices that triggered the financial crisis. Further, building a great culture also has the potential to widen profit margins and improve sales. Building a better culture can be frustrating. But banks have a tool at their disposal for improving the health of their organization is the concept of making their employees happier. (American Banker, 2018)
In consideration of Maslow’s Hierarchy of Needs, Abraham Maslow's psychological theory of what motivates humans. The theory dictates that, once a person's basic psychological and safety needs are met, he or she will develop a need to belong, then get respect and then ultimately realize his or her full potential. That last stage has the potential to affect a bank's bottom line. For example, while senior managers are responsible for ensuring that a bank's process for opening current accounts is efficient utilizing up-to-date technology – a bank employee will likely get involved at some point in the process.
If Banks focus on helping employees feel engaged and a part of something important, the results can be significant. People who feel they belong are generally happier. When people are happier, they are more likely to do their jobs with enthusiasm and to spread that positive feeling to others, including customers. Happy people are also less likely to leave for another job. Generally, the longer employees stay at their jobs, the more they improve.
By critical observation of the culture in one of the leading commercial banks in Sri Lanka. it is evident that the practices within its culture, more seem to value its “People “ in the organization. This culture has been thriving in the organization from even before the time where employees were considered as a resource in most organizations on the island. The culture relates its employees as a “Family” where employees feel a sense of belongingness towards its institution. The bank's “vision” and “mission” statement highlights its “people” in the face of their corporate image as follows.
VISION – “To be the acknowledged leader and chosen partner in providing financial solutions through inspired people”.
MISSION – “Combining an entrepreneurial spirit with empowered people and leading-edge technology to constantly exceed stakeholder expectations”. (Hnb, 2018)
This certainly inspires its employees to be motivated in a way of passion, belongingness, and culture employee engagement towards their institution. In a perspective of Maslow’s hierarchy of needs theory, it is observed that institution has almost ticked all aspects of the theory to motivate its employees in order to reach its objectives and goals. This is enriched with both monetary and non-monetary perks for their employees. For example, the bank provides special loan schemes to its employees at low-interest rates, such as Housing and repair loans, furniture loans, wedding loans, funeral loans, pilgrimage loans, educational loans, consumer loans, motor vehicle and repair loans, bicycle loans in order to uplift their employees and their family’s living standards. This satisfies the employee’s basic needs, wellbeing, security, love and affection from their family’s and shelter and safety needs, which ticks the lower levels of the hierarchy of needs.
Further, in general, the employees receive their monthly salaries which align with the industrial benchmarks, and allowances which are considered as monetary such as cost of living allowances, medical reimbursements, traveling/food/lodging reimbursements, fuel allowances, gas allowances, spectacle, and hearing aide reimbursements, surgical and hospitalization reimbursements, Entertainment and holiday allowances, annual bonuses, servant and drivers allowances, risk allowances, telephone bill reimbursements, which varies between individuals rank and position in the bank.
The institution rewards with monetary and non-monetary rewards for the achievement of various targets and goals, such as part financing of staff annual trips, foreign tours. And even the institution rewards the highest ranked corporate personnel with luxury vehicles such as Mercedes Benz’s and BMW which is borne by the bank for their esteem needs.
Furthermore, the management of the institution shares its strategic plans with their employees and regular emails by the CEO and birthday wishes on each and everyone's birthday directly from the office of the CEO and human recourses division where the individuals develop sensation of belongingness and special.
The bank maintains a culture where employees' opinions, innovations, ideas are been appreciated and accepted via a communication avenue called “Spark”. This is where the employee posts their ideas to the attention of the management which is an online tool. Further, the bank has implemented a confidential reporting system named as “whistleblowing” where any employee can report or bring to the notice of the management if there is any unethical or fraudulent activity is been practiced among the banks network where the banks safety and/or the employees safety is at a risk, to a dedicated director of the board by a telephone call while informants identification is not disclosed. This part of its culture makes sure the individual’s safety needs. The working environment of the employees is maintained with considerable health and safety standard’s considering agronomical aspects.
Therefore it is evident that the subject commercial bank in Sri Lanka clearly maintains an organizational culture where its employees are motivated and satisfied to a greater extent. Whereas the banking institution claims to be one of the leading banks on the island and been awarded many esteem rewards from reputed bodies and sustains in the industry by its competitive advantages where “people” are being involved.
References
American Banker (2018) what banks can learn from Maslow’s hierarchy of needs,[online] Available from https://www.americanbanker.com/opinion/what-banks-can-learn-from-maslows-hierarchy-of-needs [Accessed 30 September 2018].
Hatton National Bank PLC (2018) corporate web site,[online] Available from https://www.hnb.net/about-the-bank/our-profile [Accessed 30 September 2018].
Hi Chaminda, You have well communicated application of Maslow's theory to the commercial banking sector . However Maslow’s research explained what would drive and motivate individuals, applying the model to organizations yields a powerful framework for business prioritization. Why? Today’s next gen C-level executives face an onslaught of business priorities that must address the organization’s basic needs from regulatory compliance to higher level needs that include the management of the brand. The business hierarchy of needs uses an analogous framework to Maslow’s (Jerome , 2013)
ReplyDeleteThank you for your views and yes indeed the subject theory emphasizes on basic human needs in a psychological point of view. And taken as a reference most firms are motivating their employees based on the theory for better performance and productivity. Motivational skills could not only be relevant the human resources department but also it is more vital for the low supervisory grades whereas has the direct access to the lower levels of staff who directly interact with its customers (Armstrong 2006).
DeleteGood job Chaminda,Human resources management are considered to be very important in organizations, theories about how to motivate people to perform more efficiently and effectively are discussed extensively in research areas. One of the basic theories is Maslow’s Hierarchy of needs. Therefore you have selected the best topic to describe Employee motivation by linking it to one of the leading bank in the country .
ReplyDeleteAccording to Greenberg & Baron(2003)the idea implies the dual role of the theory first to organizations and second to employees on the basis that both the organization and the employees must decide on the performance of their organization, and that when employees put in their best in the service of the organization, the culture and human resource practice should also ensure that the employees’ level of needs are reflected in the values the organization holds with high esteem.
Thank you for your comments, yes indeed motivation of employees on any organization is vital for its performance and sustainability in the industry. And Maslow’s hierarchy of needs theory is one of the most well-spoken theories that simplifies need of basis human being (Jerome, 2013). And this is where tools such as both extrinsic and intrinsic motivators come in to play. And it is vital as you emphasize to motivate their staff to sustain in its industry. (Kian and Yusoff, 2015).
DeleteHi Chaminda you have clearly identified the importance of satisfying employee needs for the better commitment towards Maslow (1943) initially stated that individuals must satisfy lower level deficit needs before progressing on to meet higher level growth needs. However, he later clarified that satisfaction of a needs is not an “all-or-none” phenomenon, admitting that his earlier statements may have given “the false impression that a need must be satisfied 100 percent before the next need emerges” (1987, p. 69).
ReplyDeleteThank you for your comments and totally agree with your point of view .it is a basic understanding that no single theory can be applied to all situations, especially dealing with human beings who are different and unique to one another and further to make every employee in an organization satisfied to 100% is not realistic. Maslow’s theory is a general understanding needs of a basic human being in the study of human behavior in a psychological aspect in the 1950s, as time passes by, needs of human beings become more complex and varied due to factors such as globalization .however many have apply this theory just for the purpose of understanding basic needs of a human being for motivation in a general context. How you effectively do it in an organization is defined by how successfully implemented their strategies on human resource management are to identify each and every ones needs in particular which is more a theory than practice.(Jerome 2013).
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