dc.description.abstract | The study sought is to establish the effect of the cost cutting practices on service
quality in commercial banks. This study used a descriptive research design. The target
respondents included the operations managers from the head offices of each bank. In
addition, the study collected data from two customers from each bank. The study
made use of a survey questionnaire. Quantitative data collected was analyzed by the
use of descriptive statistics. The qualitative data from the open ended questions were
analyzed using content analysis. In addition, the study conducted a Chi square to test
the study hypotheses.
The study established that banks have implemented termination planning to reduce
training costs, laying off direct labour to reduce trade union and group costs and
laying off staff to reduce direct labour cost to a great extent. Employee pay reduction
practices implemented in the banks operations to cut cost to a great extent include
freeze or reduction in planned pay rise, pursuing employee benefits and allowances
cost reduction and pension cost-alignment initiative. The study deduced that process
automation, rolling out new and cheaper services and reviewing plan
options/developing contingency plans were implemented to a great extent.
The study concludes that the banks adopt more of the longer-term strategic cost
initiatives such as laying off staff, retirement, termination planning, pay reduction
practices, shrinking of product portfolio, outsourcing of cleaning and sanitary services
and security services, flexible work option and office restructuring. The study also
concludes that the cost cutting practices affect various facets of service quality such as
reliability, responsiveness, assurance, empathy and tangible attributes of services
provided. The study recommends that to ensure service quality provision is at
exceptional levels even with various cost cutting practices, it is essential to have
written policies and staff training on both procedural and personal aspects of service
delivery. The management should also establish policies such as part-time
employment, lactation breaks for nursing mothers, temporary employment, changing
hours of service and compressed work weeks using other companies such as those in
the telecommunication industry that have low effect on the service quality. | en |