Impact of Organizational Citizenship Behavior on Employee Performance in Hibret Bank: The Case Study of Addis Ababa City Branches

ABSTRACT

The main purpose of the study was to investigate the impact of organizational citizenship behavior on employees’ performance and the major focus of the study was to see the effects of the five dimensions of OCB namely altruism, conscientiousness, civic virtue, sportsmanship and courtesy on employees’ performance in HB, Addis Ababa City Ten Branches. To achieve the above research objective, the researcher employed quantitative research approach and cross-sectional research design and the target population comprised of 384 employees of HB Ten Branches, the researcher determined the sample size of 234 respondents of the study using random sampling particularly the lottery method. For the purpose of the study, primary data collected through standardized questionnaires. For analyzing the collected data, the researcher used descriptive statistics to assess the status of OCB and employees’ performance; Pearson correlation to see the relationship between OCB and employees’ performance, and regression analysis to examine the effect of OCB on employees’ performance. Moreover, based on the multiple regression results, each hypothesis tested and the result shows all the above five dimensions of HB had a significant positive effect on employees’ performance in HB, Addis Ababa City Ten Branches. To sum up, for the improvement of their employees’ performance, it is advisable for managers or management to consider the encouragement and promotion of all the five dimensions of OCB in HB, Addis Ababa City Ten Branches.

CHAPTER ONE

INTRODUCTION

This chapter deals with background of the study, statement of the problem, Basic research questions, objectives of the study, operational definitions, significance of the study, and scope of the study.

1.1 Background of the Study

In the contemporary world, organizations are forced to get a competitive benefit over its competitors and are expecting from its employees to go beyond their job requirement in assisting the organization achieving its goals (Podsakoff, et al. 2000). Organizational citizenship behavior is defined as individual behavior that is discretionary, not explicitly or directly recognized by a formal reward system, and which ultimately promotes the efficient and effective performance of an organization (Bolino, et al. 2002). Organizational citizenship behavior (OCB) refers to individuals’ behaviors that are not an element of an individual job requirement and include acts like helping other, taking supplementary responsibilities, putting extra hours, protecting the organization and openly communicating about important issues of the organization (Organ, et al. 2006).

Organizational citizenship behavior (OCB) has been a subject of emphasis by researchers due to rising evidence of OCB’s impact on organizational and individual performance and OCB has the potential to rising organization efficiency by increasing employee task performance and productivity (Podsakoff, et al. 2000). According to Organ, et al. (2006), when experienced employees voluntarily help new employees learn the supports it enables the employees to turn out to be productive employees faster, thus improving the efficiency of the teamwork.

Moreover, Poncheri, (2006) defined OCB as encouraging behavior that has a positive effect on organizational performance. Todd, (2003) in his study identified that OCB helps to inspire the employees to exercise their maximum knowledge, skill, and abilities in the workplace. OCB is closely related to an organizational initiative to achieve organizational goals effectively and efficiently (Daniels, et al. 2006). The views of Koys, (2001) stress OCB as a positive impact on the profitability of an organization but not on the satisfaction of the customer. However, Shapiro, et al. (2004) defined employee behavior as based on organizational behavior, if an organization shows positive attitude then employees act in response according to that behavior.

Organ, (1988) explains OCB as a distinct behavior, which is not directly acknowledged by the formal reward system but in the average supports the organizational performance and identified the five dimensions of OCB namely altruism, conscientiousness, civic virtue, sportsmanship, and courtesy. According to Organ, et al., (2006), when employees are altruist, they voluntarily help new employees and enables them to become productive enough, thus improving the efficiency of the teamwork; when employees are conscientious they tend to sustain a consistently high level of effort, hence reducing variability in a work team’s performance. According to Podsakoff, et al. (2000), civic virtue improves the quality of performance and helps in decreasing the client complaints. Organ, (1988) defined sportsmanship as the behavior of genially accepting the irritations that are an inevitable part of nearly every organizational setting and demonstrated that good sportsmanship enhances the performance of the individual. A courteous employee protects managers from falling into crisis management by avoiding creating problems for co-workers (Podsakoff, and MacKenzie, 1989). Moreover, Podsakoff, et al. (2000), has demonstrated that altruism, conscientiousness, civic virtue, sportsmanship, and courtesy are significantly related to performance evaluations and correspondingly, positive affectivity. In general, researchers all over the world are still enriching the area of organizational citizenship behavior which helps organizations to raise their effectiveness (Shapiro, et al. 2004).

In Africa particularly in Kenya Chelagat, et al. (2015), conducted a research on effect of organizational citizenship behavior on employee performance in banking sector to investigate the effect of two dimensions of organizational citizenship behavior such as altruism and courtesy on employee performance and as the research finding demonstrates that altruism and courtesy have a positive significant effect employee performance.

In our country Ethiopia, Demis, (2018), conducted a research to investigate the relationship between leadership style particularly transformational and transactional leadership with OCB the case of North West area of Amhara Regional State of Ethiopia electric power corporation and as the findings of this study shows that the relationship between the above two leadership styles andOCB was found to be weak, but statistically significant. On the above the same case area, Demis, and Ritu, (2015), also conducted the research to investigate OCB in relation to social capital through incorporated the five dimensions of OCB such as altruism, civic virtue, conscientiousness, courtesy and sportsmanship in their research design and as the findings of this study reveals that except sportsmanship the other four dimensions such as altruism, civic virtue, conscientiousness, and courtesy shows significant relationship with social capital. Moreover, related with the current study, Desta, (2018), conducted a research regarding to organizational citizenship behavior and employee performance assessment in Dire Dawa university to see the effect of the three dimensions of OCB such as altruism, civic virtue, and conscientiousness on employee performance and as the result of the study indicates that altruism, civic virtue, and conscientiousness have a significant positive effect on employee performance.

1.2 Background of the Organization

Hibret Bank (HB) S. Co is one of private banks established in Ethiopia. HB was incorporated as a Share Company on 10 September 1998 in accordance with the Commercial Code of Ethiopia of 1960 and the Licensing and Supervision of Banking Business Proclamation No. 84/1994. The Bank obtained a banking service license from the National Bank of Ethiopia and is registered with the Trade, Industry and Tourism Bureau of the Addis Ababa City Administration.

Over the years, the bank built itself into a progressive and modern banking institution, endowed with a strong financial structure and strong management, as well as a large and ever-increasing customers and correspondent base. HB provides a full-fledged commercial banking service in all its branch outlets to customers with its networked 405 branches. HB’s priority in the coming years is to strengthen its capital base, maximizing return on equity and benefit from the latest technology in order to keep abreast with the latest developments in the local and international financial services industry. (https://WWW.hibretbank.com.et)

1.3 Statement of the Problem

1.4 Objectives of the Study

1.4.1 General Objective of the Study

• The general objective of this study is to investigate the impact of organizational citizenship behavior on employee performance in Hibret Bank in Addis Ababa city Branches.

1.4.2 Specific Objectives of the Study

Based on the general objective, the study was conducted with the aim of realizing the following specific objectives.

1. To examine the impact of altruism on employees’ performance in Hibret Bank in Addis Ababa city Branches.
2. To examine the impact of conscientiousness on employees’ performance in Hibret Bank in Addis Ababa city Branches.
3. To examine the impact of civic virtue on employees’ performance in Hibret Bank in Addis Ababa city Branches.
4. To examine the impact of sportsmanship on employees’ performance in Hibret Bank in Addis Ababa city Branches.
5. To examine the impact of courtesy on employees’ performance in Hibret Bank in Addis Ababa city Branches.