Organisational learning disabilities, service climate and organisational identification in public sector banks in India

Abstract

Due to the nature of origin and ownership, Public Sector Banks (PSBs) have been slow to respond to demand for changes in service orientation and in their human resources (HR) practices. The current challenges faced by PSBs directly emanate from Organisational Learning Disabilities which manifest in poor customer orientation, low employee productivity, defective manpower planning (e.g. impending large scale retirements in a short span), difficulty in retaining new people, outdated employee performance appraisal system, high operating costs, lag between technology adoption and preparedness for its use, and underdeveloped marketing skills. These inefficiencies get introduced in the banking sector and ultimately in our economy. The government and the RBI have expressed concerns in clear terms about to manpower planning and high operating expenses. High net interest margins reflect inefficiency of the banking sector. This inefficiency is subsidised through high borrowing costs and low deposit rates. PSBs must transform themselves into learning organisations where the learning is generative and not adaptive in order to deliver value to the customers and contribute to the economy by exploiting the full potential of their human capital. Apart from improving profitability from operations PSBs are likely to face challenges of the changing customer and government expectations. Another serious factor PSBs must not overlook is certainty of opening Indian banking to foreign banks through subsidiary route and to domestic industrial houses to set up banks. Organisational Learning may be considered an important antecedent to Service Climate. This study establishes the strength of relationship between Organisational Learning Disabilities, Service Climate and Organisational Identification in PSBs. The hypotheses tested are: H1: Greater the Organisational Learning Disabilities, weaker is the Service Climate. H2: Better the Service Climate, stronger is Organisational Identification. H3: Stronger the Organisational Learning Disabilities and weaker the Service Climate, weaker is the Organisational Identification. A survey was conducted amongst officers and clerks belonging to six PSBs in Bangalore, Pune and Nasik cities. 517 responses were analysed. Results show that Organisational Learning Disabilities variables have strong significant relationship with Service Climate variables. In particular, Homogeneity has very strong significant relationship with all four variables of Service Climate. Paralysis variable does not have significant relationship with variables other than Customer Orientation. The Customer Orientation and Managerial Practices variables of Service Climate have significant relationship with Ambivalent Identification, Neutral Identification and Disidentification but no relationship with Positive Identification. Global Service Climate and Customer Feedback variables do not have any relationship with any Organisational Identification variable. When Organisational Learning Disabilities and Service Climate variables are independent variables and Organisational Identification variables are dependent, Simple Mindedness, Paralysis, Superstitious Learning and Managerial Practices have significant relationship with Ambivalent Identification, Neutral Identification and Disidentification but no relationship with Positive Identification. However, Customer Orientation variable alone has strong significant relationship with Positive Identification. Category wise analysis reveals noticeable differences between perceptions of clerks and officers as well as between direct officers and promotee officers. This is a remarkable finding from business perspective.