Employee Capital and Customer Satisfaction in Selected Nigerian Deposit Money Banks

Abstract

The relevance of employee capital in promoting customer satisfaction has been highlighted in some extant studies. In this research we explored employee capital and its effects on customer satisfaction in the banking sector. Our objectives were to examine how components of employee capital such as employee knowledge, employee skills and employee capabilities influenced customer satisfaction. Corresponding research questions and hypotheses were developed and tested. The study employed a cross-sectional research design executed through a survey. A structured questionnaire was used to elicit responses from employees of five deposit money banks in Benin City, Southern Nigeria. The banks were chosen from the deposit money banks approved for operations by the Central Bank of Nigeria. Three predictor variables - employee knowledge, employee skills and employee capabilities combined with customer satisfaction as a predicted variable - were examined. The instrument was a modified 28 item structured questionnaire made up of Likert type scale statements. The validity of the instrument was assured using face and content validation techniques. The reliability was ascertained using Cronbach alpha test which yielded values well above the acceptable threshold for both the dependent and independent variables. The study population were employees across the different branches of the deposit money banks. A sample size of 600 was adopted for this study. Of the 600 copies of the instrument administered, a total of 444 were properly filled and usable, indicating a 72% response rate. The test of hypotheses was done using regression analysis. The findings show that all the components of employee capital influenced customer satisfaction. Specifically, the findings show that employee skills (t = 6.432, p =.000, beta = 0.430); employee capabilities (t = 5.224, p =.001, beta = 0.383); and employee knowledge (t = 3.344, p =.001, beta = 0.321) were all statistically significant predictors with employee skills demonstrating the largest effect on customer satisfaction. The paper recommends that bank management should increase their efforts in developing their employee capital to enhance customer satisfaction.

Keywords: employee capital, employee knowledge, employee skills, employee capabilities, customer satisfaction.