EFFECT OF CONFLICT RESOLUTION STRATEGIES ON EMPLOYEE PERFORMANCE
ABSTRACT
The study examined the effect of conflict resolution strategies on employee performance in selected commercial banks in Lagos State. The study sought to examine the impact of – forcing strategy on employee competency; smoothing strategy on employee creativity; avoiding strategy on employee service delivery and confronting strategy on employee productivity. The sample of the study comprised three commercial banks namely First Bank, Zenith Bank and Wema Bank. Primary data was used in the study. A structured questionnaire was used to collect necessary data from 42 randomly selected staff of the banks. The descriptive statistics and regression analysis were employed to analyze the data. Findings of the study indicated that forcing strategy had significant impact on employee competency (β=0.397; p<0.05); smoothing strategy had significant impact on employee creativity (β=0.278; p<0.05); avoiding strategy had significant impact on employee service delivery (β=0.248; p<0.05) and confronting strategy had significant impact on employee productivity ((β=0.593; p<0.05). The study maintained that conflict resolution strategies enhance employee performance on the premise that they are used constructively. The study suggests amongst others that, both management and employees must resolve to work together amicably by formulating potent strategies and sustaining acceptable policies as effective machinery for managing conflict on continuous basis in organizations.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Conflict is a regular feature in business organizations which arises from the discordance between the interests of the workers and management (Uju, 2010). Conflict is inevitable in workplace and also occurs among individual workers in an organization because their values, goals, interests and targets are not the same. Conflict occurs at both individual and collective levels, with personality, structural and other extraneous factors coming into play. Conflict in organization is inevitable in organizations regardless of sound management practices and policies put in place. The likelihood of occurrence of conflict is high in organizations with hierarchical structure where people with different opinions, ideas and philosophies interact. Conflict can be described as a situation where the interests and ideas of different employees are dissimilar and frustrate each other’s attempt to achieve organizational objectives (Longe, 2015). Conflict can equally be conceived as the breakdown of effective communication between employees and group in the organization. According to Thakore (2013), conflict is a common issue of life in any organization and would always occur as long as employees struggle for recognition, power, achievement and security. Thus, conflict does not tarnish the reputation of an organization per say, because it provides the opportunity to settle controversial issues for the betterment of the employees and organization. The responsibility of management is not to suppress or resolve conflict, since they will always occur, but to constructively manage them in order to stimulate employee performance and organizational performance. Conflict management is a key component of corporate management. Ojo and Abolade (2013) comments that the objective of conflict management is not to establish an appropriate ideal corporate situation since it is unfeasible given the differences of interests and goals between group of employees and management. However, conflict management tactically uses the available conflict resolution strategies to create an effective mechanism for conflict management in corporate organizations. Conflict has positive and negative effect on the performance of an organization and they way it is being managed influences organizational performance (Longe, 2015). Properly managed conflict enhances work performance while destructively managed conflict brings dislocation and disintegration of the entire group thereby resulting in inhibiting the performance of an organization. Effect conflict resolution strategies expose the weakness of the decisions of an organization. This however might prompt an organization to seek lasting solutions to address conflict. It is the responsibility of management to constructively address conflict in order to enhance employee as well as organizational performance, because the results of such action are good communication, cordial industrial relations, enhanced team building and increased productivity. Thus, every organization attempts to have a pleasant work environment in which the relationships among workers and that between workers and management are cordial and appreciated by both parties. The banking industry is a sector where conflict resolution ought to be given importance and must be effective given the industry’s susceptibility to huge financial losses whenever there is conflict. To this end, the study attempts to examine the effect of conflict resolution on the performance of employees in selected commercial banks in Nigeria.
1.2 Statement of Problem
Conflict is inevitable in organizations irrespective of any industry it operates. This is because individual employees have different interests, goals and targets they want to achieve, and also the interests of employees often times are not similar to the interests and goals of management. The strategies an organization such as First Bank of Nigeria Plc adopts for resolving conflicts determines their corporate performance as well as the performance of their staff. This therefore connotes that conflict has positive and negative effects on organizational performance. Constructively-handled conflicts brings peaceful coexistence among employees, creates industrial harmony between employees and management, fosters the performance of employees, improves the profitability and growth prospects of an organization, enhances the quality of organizational decisions, informs organizations on effective ways of handling future conflicts based on experience on prior conflict, reduces unhealthy rivalry between employees and management and ensures organizational resources are effectively used (Obasan, 2011; Uju, 2010; Korir, etal, 2015). On the other hand, destructively-handled or poorly-handled conflicts results in wastage of resources, deters employees to perform at their best, creates disharmony between staff and management and makes organizational objectives difficult to achieve. In addition, the effect of poorly-handled conflict with respect in deposit money banks is catastrophic. This is because poorly-handled conflicts can expose commercial banks to risk of huge financial losses. Furthermore, unresolved conflicts has the capacity to drastically reduce the profitability of commercial banks, tarnish their goodwill, lead to high employee turnover, scare existing and prospective customers and investors away, jeopardize customers’ and investors’ confidence reposed on them, can destroy their liquidity and insolvency and at the extreme, continually unresolved conflict can lead to financial distress. It is therefore imperative for top management of commercial banks to ensure that conflicts is constructively handled whenever they occur, in order to promote the performance of employees as well as the overall performance of organizations.
1.3 Objectives of the Study
The broad objective of the study is to examine the effect of conflict resolution strategies on employee performance in selected commercial banks in Lagos State. The specific objectives of the study are:
1. To examine the effect of forcing strategy on employee competency in selected commercial banks in Lagos State.
2. To assess the effect of smoothing strategy on employee creativity in selected commercial banks in Lagos State.
3. To investigate the effect of avoidance strategy on employee service delivery in selected commercial banks in Lagos State.
4. To explore the effect of confrontation strategy on employee productivity in selected commercial banks in Lagos State.
1.4 Research Questions
Based on the specific objectives, the following questions are of utmost importance to the study, they are:
To what extent does forcing strategy influence employee competency in selected commercial banks in Lagos State?
2. How does smoothing strategy influence employee creativity in selected commercial banks in Lagos State?
3. To what extent does avoidance strategy influence employee service delivery in selected commercial banks in Lagos State?
4. How does confrontation strategy influence employee productivity in selected commercial banks in Lagos State?
1.5 Research Hypotheses
In order to make valid conclusions, the following hypothesis is formulated to guide the study. The hypotheses are stated as follows:
1. H01: Forcing strategy has no significant effect on employee competency in selected commercial banks in Lagos State.
2. H02: Smoothing strategy has no significant effect on employee creativity in selected commercial banks in Lagos State.
3. H03: Avoidance strategy has no significant effect on employee service delivery in selected commercial banks in Lagos State.
4. H04: Confrontation strategy has no significant effect on employee productivity in selected commercial banks in Lagos State.
1.6 Operationalization of Variables
The main objective is to examine the effect of conflict resolution strategies on employee performance in selected commercial banks in Lagos State. The dependent variable is employee performance, which is measured by four variables namely employee competency, employee creativity, employee service delivery, employee competency. The independent variable is conflict resolution captured by forcing, smoothing, avoidance and confrontation strategies. Y= f (Y1, Y2, Y3, Y4,) Where: Y= Employee performance Y1= Employee competency Y2= Employee creativity Y3= Employee service delivery Y4= Employee productivity X= Conflict resolution. X= f (X1, X2, X3, X4) Where: X1= Forcing strategy X2= Smoothing strategy X3= Avoidance strategy X4= Confrontation strategy Thus we have, Y1=f (X1)……………………1.1 Y2=f(X2)……………………1.2 Y3= f(X3)……………………1.3 Y4= f(X4)……………………1.4 Converting these functional forms into a linear regression model it becomes, Y1= β0 + β1X1 + µ……………1.5 Y2= β0 + β1X2 + µ……………1.6 Y3= β0 + β1X3 + µ……………1.7 Y4= β0 + β1X4 + µ……………1.8 1.7 Scope of the Study The study focuses on the effect of conflict resolution strategies on employee performance in selected commercial banks in Lagos State. The study prioritized on three banks namely First Bank, Zenith Bank and Wema Bank. The population of the study comprised 454 employees. However, the sample of the study comprised 42 staff of selected banks.
EFFECT OF CONFLICT RESOLUTION STRATEGIES ON EMPLOYEE PERFORMANCE