EFFECT OF CONFLICT RESOLUTION STRATEGIES ON EMPLOYEE PERFORMANCE IN SELECTED COMMERICAL BANKS IN LAGOS STATE, NIGERIA

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:

  1. 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.

 

 

1.8         Significance of the Study

The study is significant in multiple dimensions.  To management of banks in Nigeria, the study through its findings will enlighten them on how to properly and constructively handle conflicts whenever they arise. It informs the banking sector on the causes of conflict and the appropriate resolution strategies to adopt to minimize incidences of conflicts for the betterment of employees and organizations.  Employees will equally benefit from the study because it shows how their intra and inter-relationships bring about conflict and the approach they can use to resolve conflicts.

 

The study informs the management of organizations in various industries on the most appropriate ways of handling conflict to promote organizational and industrial growth. Organizations will be educated on the set of conflict resolution techniques applicable to the industry they belong to. This study will provide an insight to managerial staff in the banking industry on the causes and tactical ways of resolving conflict. The study will enable them to create a pleasant work environment where management and employees can work in unity to achieve organizational objectives.

 

The study is beneficial to the government because conflict is not limited to the private sector, but more prevalent in the public sector. The findings of the study will be useful to the government in formulate effective strategies for resolving conflict in the public sector. The study also educates union leaders on how to use their position to ensure industrial harmony in private and public organizations.

 

Lastly, the study serves as a body of knowledge as regard conflict resolution and employee performance.  Students, academic and researchers intending to conduct research on the subject matter will find this study invaluable. The study equally contributes to empirical literature on the subject matter.

 

1.9     Definition of Operational Terms

Conflict: This refers to an open clash between two opposing groups. In organizational context, conflict refers to the disagreement in interests and goals between group of employees and management. Conflict can also occur among group of employees in an organization (Uju, 2010).

 

Conflict Resolution: This refers to the process of providing solutions to conflict whenever they arise. Conflict resolution is carried out through what is known as conflict resolution strategies. Common strategies of conflict resolution are but not limited to avoidance, accommodation, meditation, arbitration and negotiation (Thakore, 2013; Longe, 2015).

 

Employee:  This refers to a worker who is hired to perform a job. (Oxford English Dictionary).

 

Employee Performance: This refers to the extent to which an employee achieves certain defined outcomes at a specific period of time. Employee performance is measured using several indicators such as job competency, creativity, teamwork skill, interpersonal relations and time management skill (Dunlop, 2010).

 

Forcing Strategy: This strategy is also known as competition strategy. It involves the use of authority or power by one party to decide on the outcome of conflict regardless of the opinions of the other party (Ojo & Abolade, 2013).

 

Smoothing Strategy:  This strategy is also known as accommodation strategy. This strategy allows one party to satisfy the concerns and demands of other conflicting party while neglecting its own concern (Ojo & Abolade, 2013).

 

Avoidance Strategy: This is a strategy in which one party ignores or avoids the conflict and fails to take any action to resolve it. (Ojo & Abolade, 2013; Irene, 2014).

 

Confrontation Strategy: This strategy involves the use of protest, violence, vandalisation, struggle and demonstrations to resolve conflicts (Ojo & Abolade, 2013; Irene, 2014).

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