IMPACT OF TRAINING ON EMPLOYEE PERFORMANCE IN COMMERCIAL BANKS

ABSTRACT

This research work was conducted to determine the impact of training on employee’s performance  in commercial  banks. Specifically the study  determines the nature of relationship between training and organizational growth; evaluates the extent to which training  resulted  to  employee   satisfaction;   examines  the  effect  of  training  on employee   self  confidence   and   evaluates   the   effect   of  training   on  employee performance. The data used for the research were elicited from primary and secondary sources via the administration of structured questionnaire and interview. Data analysis was done using percentages and mean scores while Pearson Correlation Coefficient was used to test the four hypotheses formulated for the study. Findings from the study showed  that training  has a significant  relationship  with organizational  growth,  the extent to which training resulted to employee satisfaction is significant and the effect of training on employee performance is significant. The research also found out that the  effect  of  training  on  employee  self  confidence  is  not  significant.  The  study concludes  that  training  is  important  to  the  success  of  any organisation,  adequate training of employees gives the organisation an advantage in a competitive business environment.  Failure to invest in training is  a loss of .human capital base, market share  and  weakened  capacity  to  handle  emerging  market  dynamics.  The  study recommends that to boost and sustain  employee satisfaction,  banks should commit more resources to train those who have not been trained and those who have not been sufficiently trained. Management should enrich the content of training initiatives so as to improve the morale of employees in commercial banks.

CHAPTER ONE INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Right from the beginning of Nigeria’s nationhood in 1960, it was clear that the rate of national development  and technological  advancement  evolved  not so much  on the availability of means and resources but on the articulation and effective utilization of Nigeria’s vast human and material resources, Hacket (1979:41) highlights this when he observes that awareness of the necessity for training and development in Nigeria is low as reflected  in productivity  in Nigerian  organizations.  In order to get the best from employee, it is important for his employer to develop, train and retrain him to acquire and improve his skills, which enhances his productivity..

Training of employee has become a major pre-occupation in modern organizational objective of growth.   To achieve this basic objective of growth and profitability,  it means  that  management  as well  as employees  must  improve their  input into  the organization. This is because the performance of an organization is a function of the collective performance of employees. Garavan, Costine and Herathy (1995:47) opine that there are many critical factors which organizations must consider as they face the future. This alone implies that the success of an organization depends on who works to achieve the organization’s objective, that is, the presence of qualified manpower.

The internal and external environments of any organization are dynamic. They change as time changes. For instance, changes have resulted from advancement  in science and technology, intensified pattern of competition, quest for competitive advantages brought  about  by closer  customer  relationship,  devolved  decision  making,  quality improvement of products and services to mention just a few. This dynamic nature of

organization’s environment triggered the thought of improvement in the performance of  employees,  in  order  to  outweigh  competitors  by providing  quality  goods  and services. In an attempt to remedy this basic quest for improved job performance, the issue of getting qualified staff as well as retain high calibre employees and develop a more  flexible  adaptable  skill  base  to  cope  with  the  volatile  market  is  therefore important. Armer (1970:30)  emphasizes  that over time, people become uneducated and therefore  incompetent to perform  at a level they once  performed  adequately. Training  enhances  this,  as  they  are  organizational  efforts  aimed  at  helping  an employee  acquire  basic skills required  for efficient  execution  of the functions  for which they are hired.

One would add that training is a set of activities, whereby, practitioners, managers or would  be  managers  are  assisted  in  improving  their  individual  competence  and performance  as well as the  organization’s  environment  with  the ultimate  goal of raising the standard of organizational performance. It therefore follows, that employee training  and  development  are  at  the  heart  of  employee  utilization,  productivity, commitment, motivation and growth. An organization may have employees that are determined   with   appropriate   equipment   a   managerial   support,   yet   employee performance falls below expected standards. The missing factor in many cases is lack of  adequate  skills  and  knowledge,  which  are  acquired  through  training,  Ubeku (1995:10) sees  human resource management  as a control function exercised by all managers in  an organization and/or by a particular department  often designated  as personnel or human resources. It is therefore, important that the need for training be identified  and provided  for. It is an indispensable  part of management  function  in terms of operational  efficiency  and effectiveness.  This is because  an  organization

which puts great emphasis on employee training is directly planning for its survival and steady growth.

1.2       STATEMENT OF THE PROBLEM

The issues of employee training were not taken seriously by many organizations This is because of the failure to acknowledge the fact that the business environment has become very dynamic and only those organizations with the right manpower to meet the modern technological and informational need in the business times can succeed in the globalized business world.

Training is paramount to the success of any modern organization, for organization to compete effectively it must train its manpower  to meet with the  requirements for sustainability.  However,  organisation  that  do  not  train  or  embark  on  inadequate training   encounter   certain   problems,   these   include    low   performance,   poor coordination, increase labuor turnover, inadequate manpower low capital base, loss of market  share,  and  the  inability  to  cope   favorably  with  the  technological  and informational demands of the business environment.

What  organizations  could  do  to  handle  these  problems  is to  engage  on  effective training of employees. Thus, a study on training becomes necessary.

1.3       OBJECTIVES OF THE STUDY

The objectives of the study are as follows:

1.        To determine the nature of relationship  between training and  organisational growth.

2.        To evaluate the extent to which training results to employee job satisfaction.

3.        To examine the effect of training on employee self confidence.

4.        To evaluate the effect of training on employee performance.

1.4       RESEARCH QUESTIONS

The research questions for this study are clearly stated as follows:

1.        What is the nature of relationship between training and organizational growth?

2.        To what extent has training resulted to employee job satisfaction?

3.        What is the effect of training on employees self confidence?

4.        What is the effect of training on employee performance?

1.5       RESEARCH HYPOTHESES

The hypotheses for this study are stated as follows:

1         Ho: There  is no significant  relationship  between training and  organizational growth

H1:  There  is  a significant  relationship  between  training  and  organizational growth.

2          Ho:  The  extent  to  which  training  resulted  to  employee  satisfaction  is  not significant.

H1:  The  extent  to  which   training  resulted   to  employee   satisfaction   is significant.

3         Ho:  Training does not increase employees self confidence.

H1: Training increases employees self confidence.

4         Ho:   Employee training does not increase productivity.

H1: Employee training increases productivity.

1.6       SCOPE OF THE STUDY

The  scope  of  this  study  is  restricted  to  the  impact  of    training  on  employees’ performance  in  the  commercial  banking  industry.  Geographically,  the  study was conducted at three major banks in Delta State they are the UBA, First Bank of Nigeria Plc and Intercontinental Bank of Nigeria Plc.

1.7       SIGNIFICANCE OF THE STUDY

The result of this study will serve as a yardstick to measure the successes of training in the commercial banks. The study will prepare the managers of banks with the right information for training.

The study will correct the misconceptions by most people that investment in training is a waste of organization scarce resources that could be utilized for other things.

The study will also serve as reference materials for future studies.

1.8       LIMITATIONS OF THE STUDY

           Financial  Constraint:  A study of this magnitude  requires a huge some  of money to source and analyse data. Due to financial constraint the researcher could not cover all the commercial banks in delta state.

           Time Constraint:   A study of this nature would  normally require  years  to complete. That much needed time was not there but the work has to be carried out within a stipulated period of time.

           Attitude of respondents: Few of the respondents were reluctant to give vital information since they were not certain of the implication of doing so. :

1.9     DEFINITIONS OF KEY TERMS

In the course of the study, the following terms were used.

1.        Training: A systematic acquisition of knowledge, skills and attitude required by an individual to perform a task adequately.

2.        EMLOYEE Performance: An increase in employee’s productivity, being able to meet a set objective effectively and efficiently.

3.        Goal: This means objects of one’s effort. It can also mean one’s target

4.        Job: A piece of work either to be done or completed.

1.10     PROFILE OF THE ORGANIZATIONS UNDER STUDY

1.10.1 United Bank for Africa Plc

The United  Bank for Africa Plc has its antecedents  rooted in its predecessor,  the British and French Bank Limited. The British and French Bank itself metamorphosed from (BNPCI) Paris, Banque Nationale Poule Commerce and Industries, established in 1932.

In May 1949, the British and French Bank began operation in Nigeria, at 117 Broad Street,  Lagos.  On  February  23,  1961,  the  United  Bank  for  Africa  limited  was incorporated to take over the assets and liabilities of the British and French Bank. The official opening of the bank for business under the new  name  was on October, 3,

1961. Its registered office was at 127 – 129 Broad Street, Lagos and Mr. F. Delajugie was its first General Manager with the establishment of UBA, it became the first bank among the international banks operating in Nigeria at the time to be registered under the Nigerian law, its paid-up capital was over four million naira.

Today’s United Bank for Africa Plc is the product of the merger of Nigeria’s third

(3rd) and fifth (5th) largest banks namely the old UBA and the erstwhile Standard Trust

Bank  Plc  (STB)  respectively,   and  a  subsequent   acquisition   of  the   erstwhile Continental Trust Bank Limited (CTB).   The union emerged as the  first successful corporate combination in the history of Nigerian Banking Industry.

Their history dates back to the founding of the old UBA in 1961, and the erstwhile STB and CTB both in 1990.  Although today’s UBA emerged at a time of industry consolidation induced by regulation, the consolidated UBA was borne out of a desire to lead  the domestic sector to a new era of global  relevance  by championing  the creation of the Nigeria’s consumer finance market, leading a private and public sector partnership  at supporting the acceleration  of  Nigeria’s economic development,  and growing the institution from a banking to  a one stop financial services institution, while  spreading  its foot prints across  Africa to earn the reputation as the  face of banking in the continent.

Today, the consolidated UBA is the largest financial services institution West African with total assets in excess of one trillion, six hundred million naira  (over USD 14 billion) and operating out of 7 economics in the West Central and East African Sub- Region.  Nigeria, Ghana, Uganda, Cameroon, Cote d’ivoir, Liberia and Sierra Leone. It has over seven hundred (700) retail distribution  centres across Nigeria, its main operational  base,  16  branches  in  Ghana,  5  branches  in  Uganda  and  Cameroon. Outsides Africa, it also has presence in New York, Cayman Island, London and Paris.

UBA provides employment  directly or indirectly to 13,000 employees who  fondly refers to themselves at UBA Lions and Lionesses.  The Bank’s “best-place-to-work- initiative”   has  created   a  harmonious   work  environment   through  which  young graduates  have  grown  and  transformed   into   accomplished   and  well  motivated professionals.  Their (UBA) employees are, without doubt, the strongest assets of the

bank as they constitute the driving force of all the group’s business and values.   In fact, both customers and competitors alike agree that there is something  positively unique about the UBA individual.

Their  strategy starts from the point and method  of recruitment  which  emphasizes merit and a strong fit with our shared values, to the point of training and development and retraining to imbibe the value of operating norms.  All of this combines with the highly   competitive   environment   to   transform   ordinary  graduates   of   different institutions in Nigeria and overlaps to accomplished and well motivated professionals of the finest blend, with burning desire for self-actualization.

1.10.2 First Bank of Nigeria Plc

First Bank of Nigeria is a Nigerian bank and financial services firm.  First Bank traces its ancestry back to the first major financial institution founded in Nigeria; hence the name.   The current chairman  is Dr. Ayoola Oba Otudeko, OFR.   The  bank is the largest retail lender in the nation, while most banks gather funds from consumers and loan it out to large corporations and multinationals,  First Bank  has created a small market for some of its retail clients.

At the end of August 2006, the bank had assets totaling 650 billion naira or $5 billion dollars.   The bank was also the most highly capitalized stock on the Nigerian Stock Exchange,  and had about 10 billion outstanding  shares.   It has  a  subsidiary in the United Kingdom, FBN Bank (UK), which has a branch in Paris.  The bank also has representative offices in South Africa and China.

The company was named the best bank in Nigeria by Global finance magazine  in

September  2006.    The  firm’s  auditors  are  Akintola  Williams  Deloitte  &  Touche

(Chartered  Accountants)  and KPMG Audit (Chartered  Accountants).  The firm  has solid short and long term ratings from Fitch and the Global Credit Rating Company partly due to its low exposure to non-performing loans.  The firm’s compliance with financial laws has also strengthened with the Economic Financial Crimes Commission giving it a strong rating.

The Bank traces its history back to 1894 and the Bank of British West Africa. The bank originally  served  the British  shipping and trading  agencies  in  Nigeria.    The founder, Alfred Lewis Jones, was a shipping magnate who originally had a monopoly on importing silver currency into West Africa through his Elder Dempster shipping company.  According to its founder, without a bank, economies were reduced to using barter and a wide variety of mediums of exchange, leading to unsound practices.  A bank  could  provide  a  secure  home  for  deposits  and  also  a  uniform  medium  of exchange.    The  bank  primarily  financed  foreign  trade,  but  did  little  lending  to indigenous Nigerians, who had little to offer as collateral for loans.

In 1957, Bank of British West Africa changed  its name of Bank of West  Africa (BWA).  After Nigeria’s independence in 1960, the bank began to extend more credit to indigenous Nigerians.  At the same time, citizens began to trust British banks since there was an ‘independent’ financial control mechanism and  more citizens began to patronize the new Bank of West Africa.

In 1965, Standard Bank of South Africa acquired Bank of West Africa and changed its acquisition’s name to Standard Bank of West Africa.  In 1969, Standard Bank of West Africa incorporated its Nigerian operations under the name Standard Bank of Nigeria.   In 1971, Standard Bank of Nigeria listed its shares on the Nigerian Stock Exchange and placed 13% of its share capital with Nigerian investors.  After the end

of the  Nigerian  civil war,  Nigeria’s  military  government  sought  to  increase  local control  of the  retail-banking  sector.    In  response,  now  Standard  Chartered  Bank reduced its stake in Standard Bank Nigeria to 38%.  Once it had lost majority control, Standard Chartered wished to signal that it was no longer responsible for the bank and the bank changed its name to First Bank of Nigeria in 1979.

In  1982  First  Bank  opened  a branch  in  London,  that  in  2002  it  converted  to  a subsidiary, FBN Bank (UK). Its most recent international expansion was the opening in 2004 of a representative office in Johannesburg, South Africa.  In 2005 it acquired MBC International Bank Ltd. and FBN (Merchant Bankers) Ltd. Paribas and a group of Nigerian investors had founded MBC in 1982 as a merchant bank; it had become a commercial bank in 2002.

In June 2009, Stephen Olabisi Onasanya  was appointed  Group Managing  Director (CEO), replacing Sanusi Lamido Sanusi, who had been appointed  governor of the Central Bank of Nigeria.

1.10.3 Access Bank of Nigeria Plc

In 1989  Access  Bank became  one of the  largest  banks  in Nigeria  by assets  and capitalization.  The  bank  commenced  operations  in  February  1989  and  provides universal banking services to multinationals, large domestic corporate SMEs.

In 2005 the bank executed a merger with three other banks; equity Bank of Nigeria Plc,  Global  Bank Plc and  Gateway Bank Plc.   It was  the  first time  in  Nigeria’s banking history that four banks had merged.   The bank has recorded  an impressive financial performance for the year ending February 2006 with operating income for the period stood at $239 million.

Access Bank Plc in 2009 was one of the few banks that survived the incidence  of going underground and has been operating effectively and efficiently till-date.

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