The main goal for any business has always been to increase profit margins. In the past the companies focused only on the number of productions and other technical issues, whereas other aspects, such as human recourses management, were not valued as of high important. These days, business environment has changed dramatically. It is believed that organisational behaviour is one of the main areas for potential improvement in order to run a sustainable business (Robbins et al 2011, p.8). This case study will examine the internal management strategies of Westpac group (Westpac), one of the four main banks in Australia. It shows how Westpac uses organisational behaviour principles to increase job satisfaction to motivate its employees. It will also explain how the company supports its employees in conflict situations and analyse the leadership styles of the bank’s Chief Executive Officer (CEO), Gail Kelly. Studies have shown that using the appropriate organisational behavioural techniques can promote a motivated, satisfied and conflict free work force, but how does Westpac motivate its staff and how satisfied are its employees in their job roles?
Job satisfaction and motivation
Westpac being a large, well established company is well aware of how finding, retaining and motivating its employees can be crucial for a successful business to prosper (Westpac 2006). The company is faced with motivating employees and, in turn, generating high job satisfaction throughout all levels of the organisation (Root 2014). It can also be deduced that if employees feel job satisfaction then this, consecutively, will filter through to create a positive experience for Westpac’s customers as well. However, in order to generate a motivated workforce, Westpac must offer its employees benefits, rewards and recognition, which are a few of the key causes of job satisfaction (Robbins et al 2013, p.59-74). These motivators come in many different forms and are sometimes, specific to an employee’s needs. When motivating a person with a benefit or reward, Westpac must understand that each individual person will value a reward differently (Root 2014). For example, an employee with a young family may value paid parental leave, or a shorter working day, over a promotion or a pay increase.
Westpac shows that they understand that not all employees are the same and have differing needs by ranking first in 2013 in the annual benchmarking survey ‘Work/Life Initiatives’ for their flexible work options, offering 12 weeks paid parental leave, access to child care as well as offering flexible working hours (‘Westpac leads in satisfaction poll’ 2013). However, for another employee, a valued reward may take the shape of opportunity to move up in the company. If an employee is promoted to a role they have been striving to obtain then that promotion is a means of recognising their hard work and determination and makes the employee more motivated in their job and the company, thus generating job satisfaction (Robbins et al 2013, p.59-74), while benefiting the company too. There are many ways that Westpac generates motivation and in turn job satisfaction, however, one of these is through job enrichment (Darling 1997).
This is the practice of enhancing an employee’s individual jobs and increasing responsibility which, in turn makes the job more stimulating and rewarding for the employee, by giving them more control over their work and how they perform it, promoting increased job satisfaction (Robbins et al 2013, p. 171-190). By giving employees more responsibility and control of the work they are doing increased job satisfaction, as a lack of control or stimulation is often a cause of stress and boredom, which causes a decrease in motivation.
It is hard to dispute that the correct employee motivation creates job satisfaction, and in turn customer satisfaction. In 2013, Westpac surveyed its employees and 70% said they were committed to their job, moreover, in the same year Westpac came out on top of the four main banks for customer satisfaction (Bennet 2014). Westpac places great emphasis on the prevention and resolution of potential conflicts between its employees. It can also be said that by creating a more comfortable workplace for employees this will in turn contribute to the efficiency of the company’s performance as a whole.
It is difficult to imagine any workplace to be completely conflict free. First of all, workplace brings together people with different values, personality traits and people of different ages. Moreover, when there is increased pressure on employees to meet targets, complete tasks faster often with a lack of resources, tensions can arise and the work environment becomes progressively more stressful for the employees. This means that co-workers always need to seek an appropriate way to interact with each other at work. However, it is also an issue for managers as they are responsible for comfortable communication and conflict resolution between workers. According to Robbins et al (2012 p.450), there are three main causes or sources of conflict: communication, structural factors (such as size of a group and specialisation) and personal variables (including personality, emotions and values). Examining the conflict management system of Westpac, it is fair to conclude, that the company is more focused on the prevention of conflicts that may arise from personal variables.
As an example, the company pays great attention to the rights of employees to an equal employment opportunity. Indeed, today the recruitment practices of many companies indirectly discriminate potential employees because of their race, gender, age, sexual orientation or ethnic background. One of the main strategies of Westpac is to create a balanced work environment, free of harassment and discrimination. According to Westpac (People policies 2014), the handling claims about the events of discrimination applies to all employees, customers and partners working for the company. Westpac takes all reasonable steps to prevent potential conflicts caused by such events from occurring in the workplace. The company requires all employees to undertake special discrimination/harassment trainings and requires them to be familiarised with the current discrimination and harassment policies and procedures.
Two other types of personality-based conflict in the workplace are emotional-based and values-based. The ability to balance emotions and reasons, understand the interests of each other as well as the ability to maintain good communication and stay reliable can help to prevent and manage a conflict (‘Managing Conflict’ 2007, pp. 46-47). In order to maintain a comfortable work environment for the employees Westpac has created the Employee Assistance Program, which provides employees with confidential counselling on a range of issues, such as family bereavements, lack of job satisfaction, outcomes of target oriented management, stress and trauma management. Another foundation, Critical Incident Management Program, helps employees after traumatic events: personal threats in the workplace, the death of work colleagues and threats from different external events. Why is it important for the company to pay so much attention to such type of conflict? As Robbins et al (2012, p.448) state, relationship conflicts are dysfunctional.
It means that they have a negative impact on the work efficiency. This point of view was shared by Karim (2009, p.289), who argues that stress on the job causes lower productivity and poor performance in the organisation. As an example, managing traumatic incidents can significantly reduce employee’s absences after the event (‘Prompt trauma management can reduce employee absence’ 2007). The company aims to encourage staff members to report any wrongdoing in order to help managers to adequately manage risk and cultural issues. Examples of wrongdoing can be a breach of Westpac’s Policies and Codes, improper behaviour and safety issues.
As a part of conflict management, the company has established the ‘Concern Reporting’ system (Westpac 2013). It includes an online and telephone service, which allows anonymous communication, which connects employees to trained specialists from an independent organisation. However, if the conflict has already occurred, Westpac has a number of processes to highlight issues between employees and their managers with further investigation with senior managers if the issue is not resolved. It is important to realise that the relationships between employees are very susceptible to the leadership style set in the group.
Leadership plays an important role to maximise efficiency and to achieve organisational goals. Effective leaders have an ability to motivate and inspire employees and contribute to the great success of the company (Keskes 2014). Gail Kelly emphases the importance of setting a clear direction for an organisation and articulate all employees and other stakeholders (‘Leadership advice from the CEO of Westpac, Gail Kelly’ 2014). This style of leadership has been successful to achieve the company’s goals and visions. This achievement brought her as a charismatic leader and her charisma helps her to all employees commit to the firm and generate higher financial performance (Davidson et all 2009, pp. 386-387). Now she is ranked the 11th most powerful woman in the world and is Australian’s highest paid businesswomen. According to Goleman et all (2002), leaderships are divided by six types, namely visionary, coaching, affiliative, democratic, pacesetting and commanding.Each type of the leadership can be used apart, depending on situations.
Companies spend a great deal of money on new processes and efficiencies to increase one per cent of bottom-line profitability, but thirty per cent of the company’s bottom-line profitability is responsible by leadership style. Therefore, it is very important to use leadership styles to respond to different situations effectively. These days, dramatic changes can be seen across the financial services. Australian banks have competed for the biggest share of the home loans market. However, this competition has shifted to getting customers’ deposits. When the company pursue a new direction, visionary leadership style is the most appropriate. The objective of this style is to move people towards a new set of shared targets with clear explanation. Many companies end up with failure to changes due to slow response or when employees are not sure about the direction of the firm. One of the great successes of Westpac is that Gail Kelly uses this style effectively (‘Leadership Styles’ 2011).
Another style of leadership that is inherent to Gail Kelly is affinitive style. Affinitive style of leadership is also seen to achieve high employee satisfaction (Brook, K 2003). Westpac put the value on the importance of teamwork and the diversity of employees regardless of age, race and ability (People policies 2014). The company helps the employees’ to solve personal problems and encourages them to be more cohesive in order to create a comfortable work environment. This style of leadership is useful to enhance team harmony, increases the morale and the improvement of communication in employees, that is essential in current volatile situation in financial industry. However, affinitive leadership would be dangerous to use by itself since its emphasis’s on group work and it might promote poor performance or no future growth. For this reason, the need to combine different styles of leadership, that the company does successfully, is essential to reach the goals of the business (Robbins et al 2011, p 357).
Organisational behaviour is more than just the principles of how people can work in the group together. It is a complex study that shows how the right interaction of employees can benefit the business’s effectiveness. The analysis of Westpac Group has revealed that the company endeavours to increase job satisfaction of the employees by rewarding each person correspondingly. Thus, in order, has a beneficial effect on the production effectiveness, causing positive feelings among customers.
The company appreciates the diversity among its employees and successfully manages the conflicts caused by personal problems as well as conflicts in relationships with others. The Westpac’s system of conflict management helps to prevent a potential decline in job performance and creates a comfortable work environment. The case study has also revealed that the company benefitted from the efficient use of different styles of leadership. The ability to quickly respond to the volatility in a finance sector by changing leadership styles helps Gail Kelly to lead the business successfully, enhancing team involvement and overall contribution.
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