How Employees ’ Loyalty Programs Impact Organizational Performance within Jordanian Banks ?

This study aimed at examining the factors that influence and impact employees’ performance levels within Jordanian Banks. This study is based on quantitative research to test the research hypotheses and reveal the important factors that impact loyalty programs. A convenient sample of 377 employees was selected to represent the population which includes all employees working in the banking sector in Jordan. Based on previous studies and literature, a framework was developed to test the loyalty factors against organization performance. Loyalty factors involve employees’ satisfaction, financial rewards, motivation, performance appraisal, employees’ training and development, employees’ empowerment, internal communication, and work environment. Organizational performance indicators include sales, market share, profit, demand, decision making efficiency, and customers’ satisfaction level. Results of the study revealed that only six factors have significant relationships between loyalty levels and employees' performance. These include financial rewards, employees’ satisfaction, motivation, performance appraisal, internal communication, and employees’ training and development. Financial rewards that involve salaries, bonuses, and commission are the most important factor.


Background
Due to globalization and dynamics competitive markets, many organizations are actively seeking to make additional value to their customers and improve quality of their services (Devie, 2011).On the banking sector, the work environment became more complex, competitive and unstable after the world financial crises, which force banks to protect their competitive positions by delivering high quality services focused on earning customers loyalty (Ghoneim & Eltabie, 2014).Based on human factor importance, since it plays a main role in defining organizational success and providing premium services, factors affecting employees' performance rapidly become an active research area within the last two decades (Matzler & Renzl, 2007).
Continuously a new approaches arias such as internal customers, internal marketing and reward management system, which concentrate on developing and motivating employees in order to enhance their satisfaction, loyalty, and performance, that would be reflected in services quality, customer's loyalty, organization finical performance and competitive advantage respectively (Naseem, 2011;Arekar, 2012).This argument is also supported by the social exchange theory that shows how employees' performance increase when organization invest on them (Chi, 2009;Cropanzano & Mitchell, cited in Güngör, 2011;Naseem, 2011;Arekar, 2012;Ghoneim, 2014).
Employees are considered the core value for success in most financial institutions around the world (Elsamen & Alshurideh, 2012).How they feel about the work they are doing and the rewards received from that work directly impact an organization's performance and, ultimately, its stability.For example, if an organization's employees are highly trained and motivated, they will do whatever is necessary to achieve the goals of the organization as well as to keep track of industry performance to address any potential challenges.In this research, the factors impact employees' performance within Jordanian banks will be examined based on previous studies and literature.

Research Problem
The reason behind the focus on this research is the limited understanding of factors affecting organizational performance within Jordanian banks from employees' perspectives in Jordan.In addition, there are only few researches conducted on this field in Jordan.Accordingly efforts are conducted to enhance organizational performance by improving employees' loyalty.

Research Objectives
The main purpose of this research is to examine the influence and effect of employees' loyalty programs on organizational performance within Jordanian banks.In addition, this research aims to: 1) Explore the current employees' loyalty programs that exist within Jordanian banks.
2) Provide a set of suggestions and recommendations that may help Jordanian banks to enhance organizational performance levels.

Background
Around the world, many studies have been conducted to determine the factors affecting organizational performance on several types of organizations.Accordingly, previous studies are reviewed in various levels in order to determine factors affecting organizational performance from employees perceptive.
In service industry, such as banks, customer satisfaction considered as a critical key to success (Lam et al., 2001, cited in Chi & Gursoy, 2009).Several studies indicated that there is a positive relationship between customer satisfaction and employee performance, which is reflected directly on the overall performance of the organization (Harter et al., 2002;Chi & Gursoy, 2009;Naseem et al., 2011).Therefore, factors affecting employees' performance rapidly become an active research area within the last two decades (Matzler & Renzl, 2007).
The service-profit chain, suggest that providing appropriate work environment is likely lead to satisfied employees, which expected to be more loyal, productive and able to provide services with excellence to customers.Accordingly, customer satisfaction and loyalty expected to be increased and reflected on the organization profitability and financial performance directly (Heskett et al., 2003).In order to determine the factors that affect organizational performance, a comprehensive literature review conducted that include researches carried out on global and local levels as demonstrated in the following sections.

Factors Affecting Organizational Performance on Global Level
Chi and Gursoy (2009) conducted empirical examination about the relationships between customer satisfaction and financial performance, employee satisfaction and financial performance, customer satisfaction and employee satisfaction, and employee satisfaction and financial performance.They collected data from 2023 employees, 3346 customers, and 250 managers of three and four star hotels.Analysis indicated that customer satisfaction significantly influence the organization financial performance.Where no direct impact found by employee satisfaction on financial performance, an indirect relationship observed mediated by customer satisfaction.
On Malaysia, Mohamad et al., (2009) investigated performance appraisal, training, information technology, and incentives impact on manufacturing companies' performance, by conducting a survey including eighty five firms.
Researchers found that training and information technology are the most important factors that influence work performance.Katou and Budhwar (2009) conducted a research in Greek manufacturing sector to explore the relationship between human resources management policies (HRM) and organizational performance using a survey distributed to 178 companies.It was found that HRM policy dimensions (including resourcing and development, compensation and incentives, and involvement and job design) positively affect organizational performance, moderated by business strategies (cost, quality, innovation), motivation, managerial style, and organizational culture.Güngor (2011) investigated the relationship between reward management system and employees' performance in 12 global banks by conducting a quantitative study that include 116 banks' employees located in Istanbul.It was found that financial rewards and motivation has a positive impact on banks employees' performance.Naseem (2011) develop a framework to explore relationship between employee satisfaction and customer satisfaction that impact organizational success.It was found that there is indirect relation between organizational success and employees' performance.Also it was found that working condition, incentives, salary, and training are factors affect employee's satisfaction significantly.
On a research conducted by Deshpande et al., (2012) in the hospitality sector, a positive relationship found between employees' satisfaction and their performance.Knowing that employees' satisfaction measured by using understanding of mission and vision, financial benefits, work environment, role clarity, employee welfare, and job stress levels as indictors.By conducting a survey includes 105 employees; it was found that financial benefits and work stresses affect performance level significantly.
Vosloban (2012) conducted a research to explore factors affect employee's performance and how it influence company's growth.A survey was conducted with thirteen managers from different companies in Bucharest.It was found that employees' satisfaction have a positive effect on companies' growth mediated by employee performance.Also it was found that job role communication, job role understanding, and continuous improvement programs reflected on employee performance positively.
Ghoneim and El-Tabie (2014) investigated the relationships between internal marketing, customer loyalty and business performance in commercial banks in Egypt.A questionnaire was used for both customers and managers.
Eleven internal marketing practices were studied, including; Inter-functional coordination, customer orientation, marketing-like approach, empowerment, management commitment to service quality, employee motivation, employee training and development, vision awareness, strategic reward, senior leadership, and internal communication.It was found that all internal marketing practices have significant effect on bank performance through effecting customers' loyalty.

Factors Affecting Organizational Performance in Jordan
Banking in Jordan considered as one of the key sectors that support the Jordanian economy as it contributes 11.6% Aburoub; Hersh and Aladwan (2011) investigated the relationship between internal marketing and service quality to customers' satisfaction in Jordan commercial banks through conducting two surveys with banks' employees and customers.The study revealed that culture, human resources development, marketing data publishing, motives and rewards system are the main factors that affect employees' performance.Hashem and Al-nsour (2012) conducted a study to explore the impact of internal marketing on internal service quality within Jordanian banks.The study revealed that employees' involvement in decision making; employees' satisfaction, affording additional advantages, and job security are the main factors that affect service quality and employees' performance.
In 2013 a research conducted by Al-hawary et al., investigated internal marketing practices impact on employees' job satisfaction within Jordanian commercial banks.It was found that training and development have the highest impact on employees' satisfaction followed by motivation and empowerment respectively.Nusair (2013) on his research about climate for innovation effect on job performance in commercial banks in Jordan found that leadership, team work climate, organizational culture have significant effect on employees' job performance.
Based on the literature review and previous studies, factors expected to have significant influence in organizational performance are; Employee satisfaction, Financial rewards, Motivation, Performance appraisal, Employee training and development, Employee empowerment, Internal communication, and Work environment, which all can be defined as loyalty programs components.These factors will be examined against organizational performance within Jordanian banks.Indicators for organizational performance are discussed in the following section.

Organizational Performance Indicators
According to Richard et al. (2009) organizational performance is an analysis that comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives), and it can be measured by using three main outcomes; financial performance (profits, return on assets, return on investment, etc.); product market performance (sales, market share, etc.); and shareholder return (total shareholder return, economic value added, etc.).Organizational performance can also be defined as getting better results from the whole organization or teams or individuals within it, by understanding and managing performance within an agreed framework of planned goals, standards and competence requirements (Armstrong, 2000cited in Kagari et al, 2010).Chi and Gursoy (2009) on their research about relationship between employees' satisfaction, customers' satisfaction, and financial performance, profitability, return on investment, and net profit had been used as indicators to measure financial performance for the institutions.On a guide to key performance indicators published by Price Water House Coopers (PWC) on 2007, it was stated that the main KPIs that can be used on banking sector are; Customer retention, Customer penetration, Asset quality, and Loan loss, and quality of serving customers.
Organizational performance can also be determined by measuring financial indicators such as productivity, profitability, turnover, demand, market share, sales, and customers' satisfaction (Nickell, 1995;Estrin & Rosevear, 1999cited in Mohamad et al., 2009).Ghoneim and El-tabie (2014) used return on assets, return on equity and net interest margin as organizational performance indicators in their research about internal marketing adoption effect on the performance of the commercial banks in Egypt.
Accordingly and based on the literature, the researchers identified six indicators for the dependent variable (organizational performance) that include sales, market share, profit, demand, decision making efficiency, and customers' satisfaction level.Based on the literature review of the independent and dependent variables, a research framework and hypotheses are developed to examine employees' loyalty programs impact on organizational performance within Jordanian banks as explained in the following section.

Research Framework and Hypotheses
After screening previous researches conducted globally, regionally and locally about factors affecting organizational performance, a research framework is developed.This framework contains factors that are expected to affect and influence employees' performance.The framework consists of eight loyalty factors which considered the independent variables, as illustrated in figure 1 shown below.These factors include Employee satisfaction, Financial rewards, Motivation, Performance appraisal, Employee training and development, Employee empowerment, Internal communication, and Work environment.These independent factors will be used to explain organizational performance.Organizational performance is measured by six indicators that include sales, market share, profit, demand, decision making efficiency, and customers' satisfaction which is considered to be the dependent variable as shown in figure 1 below.
Figure 1.The research framework Table 1 below summarizes the factors and hypotheses that are developed based on the literature.These hypotheses will be examined using SPSS to determine the effect of the loyalty factors against organizational performance. Table1

Methodology
There are three methods for researchers to choose from; quantitative, qualitative or a mix of both.In quantitative research a numerical and measurable data are collected and analyzed statically to investigate the research problem, where descriptive and non-measurable data used on the qualitative researches cannot be subjected to numerical analysis (Bryman & Bell, 2007;Crowther & Lancaster, 2008;Kothari, 2009;Sekaran & bougie, 2010;Hennink, et al., 2011).Because quantitative approach is considered more objective and scientific than qualitative research, researchers decided to use it as the main approach to explore the factors that affect employees' performance at Jordanian banks by testing the research hypotheses (Crowther & Lancaster, 2008;Kothari, 2009;Hennink, et al., 2011).
Questionnaire is considered the main data collection tool used in quantitative researches (Sekaran & bougie, 2010;Bryman & Bell, 2007).Questionnaire is a research tool consists of group of questions used to collect information from respondents and designed for statistical analysis, and it can be administered in written or online forms.Questionnaire is considered one of the most effective tools used to gather written responses on attitudes and beliefs with minimum cost and effort (Fowler, 2002;Sekaran & bougie, 2010).Therefore, questionnaire is chosen by researchers as the main data collection tool.
The research population includes all employees working in the banking sector in Jordan.The total number of these employees approximately equals to 17340 in 2011 (Association of Banks in Jordan, 2013).As the probability sampling can be more accurate by weighting sampled units based on probability of selection, the researchers choose it as sampling methodology and use the stratified random sampling to represent all groups (Fowler, 2002;Bryman & Bell, 2007;Sekaran & bougie, 2010).Referring to krejcie and morgan sample size table (1970) the research sample size is calculated to be 377 from the research population distributed equally to the population.The questionnaire is distributed using different method till the target sample reached.SPSS is used as the main mathematical technique to test the research hypotheses.

Introduction
The research hypotheses that have been formulated from the literature will be tested and the results will determine the most important factors that affect and influence employees' performance in Jordanian banks.In addition, the results of the analysis will be used to refine the original research model.Multiple linear regression analysis has become the most important statistical tool for analyzing and investigating relationships among variables.Multiple linear regressions is a family of statistical techniques that can be used to explore and analyze the separate and joint influences of two or more independent variables or predictors on a dependent variable.Multiple linear regressions are used to test the research hypotheses as explained next.

Results of the Hypotheses Testing
A stepwise multiple linear regression is applied to find out the factors that affect employees' performance at Jordanian banks.The results of the stepwise regressions for the eight independent variables that make up the original model identified six variables that have significant effect on employees' performance with p-values < 0.05 as summarized in Table 2   Evaluating the importance of each independent variable on employees' performance can be examined by the coefficient table (standardized coefficients) obtained from the analysis shown in Table 4 below.The coefficient table above shows that the highest beta coefficient is 0.320 which is for financial rewards.This means that this variable makes the strongest contribution to organizational performance.The second beta coefficient is 0.227 which is for employees satisfaction followed by performance appraisal with 0.214, training and development comes with 0.180, motivation comes with 0.153, and finally comes the internal communication with 0.108 beta coefficient.
The model summary in Table 5 below includes the value of the R 2 that show how much the variance in the dependent variable (Organizational performance) is explained by the six independent variables.Table 5 shows that the value of the R 2 is 0.88.This means that the six independent variables together explain 88% of the dependent variable of organizational performance.Consequently, from the eight hypotheses tested from the original model, only six hypotheses were found to be supported as summarized in table 6 below.

Interpretation of the Results and Key Findings
The interpretation of the research results and the major key findings of the quantitative analysis will be explained in this section.The main goal of conducting the quantitative analysis was to answer the research questions on the basis of statistical tests.The main question in this research is to find out how employees' loyalty programs impact organizational performance within Jordanian banks?The findings of the research were compared with those of previous literature as explained in the following sections.

Employee Satisfaction
Employees satisfaction describes whether employees are stable and pleased and fulfilling their desires and needs at work.H1, which examined the relationship between employees' satisfaction and the performance level in banks suggest that it has a positive impact on the performance and is supported by the regression analysis test applied to the original model.Studies conducted in Jordan by Hashem and Al-nsour (2012) also support this finding.In addition, the results of the findings of Chi and Gursoy (2009) and Güngor (2011), stated that employees' satisfaction are important and affect their performance.

Financial Rewards
Financial rewards involve the availability and fairness of policies, processes and practices toward financial reward system.H2, which examined the relationship between financial rewards and employees' performance suggest that there is a positive impact on performance and is supported by the regression analysis test applied to the original model.Respondents from the Jordanian banks expressed the importance of financial rewards as critical influence on their performance.This result complies with the findings of Mohamad, et al., (2009); Katou and Budhwar (2009); Naseem et al., (2011);Adi, (2012); Deshpande et al., (2012) and Elsamen and Alshurideh (2012).

Motivation
Motivation involves management ability to create a condition of eager to act or work within the work environment and employees.H3, which examined the relationship between motivation and employees' performance suggest that it has a positive impact on banks performance and found to be supported by the regression analysis test applied to the original model.This result complies with the findings of Güngor, (2011); Elsamen and Alshurideh (2012); Ghoneim and El-tabie (2014).

Performance Appraisal System
This factor involves clarity, goal orientation, and fairness of policies, processes and practices toward employees' performance appraisal.H4, which examined the relationship between performance appraisal system and employees' performance suggest that it has a positive impact on banks' performance and found to be supported by the regression analysis test applied to the original model.Respondents from Jordanian banks employees expressed the importance of performance appraisal system.This result complies with the findings of Mohamad, et al., (2009).

Employees' Training and Development
This factor involves availability, clarity, and efficiency of employees' training and development programs.H5, which examined the relationship between employees' training and development and the banks' performance suggest that it has a positive impact on banks performance and found to be supported by the regression analysis test applied to the original model.Respondents from Jordanian banks employees expressed the importance of employees training and development for banks performance level.This result complies with the findings of Katou and Budhwar, (2009); Mohamad, et al., (2009); Naseem et al., (2011); Elsamen and Alshurideh, (2012); Ghoneim and El-tabie, (2014).

Empowerment
This factor involves management ability to create a working environment where employees are allowed to make or contribute on decisions related to their work.H6, which examined the relationship between employees' empowerment and employees' performance at Jordanian banks didn't confirm the relationship between empowerment and employees' performance and found to be not supported by the regression analysis test applied to the original model.This result is not supported by the findings of Elsamen and Alshurideh, (2012); Ghoneim and El-tabie (2014) who stated that employees' empowerment is important for banks' performance.

Internal Communication
This factor involves the availability of effective, honest, open communication between employees in the organization.H7, which examined the relationship between internal communication and employees' performance suggest that it has a positive impact on their performancel and found to be supported by the regression analysis test applied to the original model.Respondents of the Jordanian banks expressed the importance of internal communication for banks performance level.This result complies with the findings of Adi (2012); Ghoneim and El-tabie, (2014), as they stated that internal communication is important for banks performance level.

Wo rk Environment
This factor describes workplace design suitability and work spirit between employees.
H7, which examined the relationship between work environment and employees' performance suggest that it has a positive impact on banks performance and found to be not supported by the regression analysis test applied to the original model.Results of the regression analysis are not supported by the findings of Naseem et al., (2011); Deshpande et al., (2012) and Elsamen and Alshurideh (2012), who stated that work environment, are important for banks performance level.

Conclusions
Based on the data analysis results and the literature review conducted to identify the factors that affect organizational performance within Jordanian banks, the researchers concluded the following: 1) From the eight factors examined in this research, only six of them are found to be important and influence organizational performance within Jordanian banks.These are; financial rewards, employees satisfaction, performance appraisal, training and development, motivation, and internal communication, respectively.
2) The results revealed that financial rewards are the most influential factor that impacts organizational performance within Jordanian banks.
3) From employee's perspective, empowerment and work environment doesn't have a considerable effect in organizational performance within Jordanian banks.Therefore, management shouldn't spend resources on improving environment or delegate their authority since it's not important.
4) Banks in Jordan are aware about the importance of employees' loyalty program and the risk of not implementing it.
5) A competition can be observed between banks to attract new distinct employees and how to satisfy them.

Recommendations
Based on the research findings, several conclusions can be addressed to decision makers in banking sector in Jordan.These include: 1) Jordanian banks should have clear and integrated employees' loyalty programs as part of their strategy to stay competitive.
2) Jordanian banks should pay special attention to financial rewards as the main factor affects their organizational performance.Therefore, management should have clear financial reward systems that involve salaries, bonus, commission, etc. to attract and encourage employees to do their best.
3) Jordanian banks should be aware of the importance and benefits of employees' loyalty programs and how it affects their employees' satisfaction and organizational performance.As they should be aware of the importance of investing in their employees.
4) Jordanian banks should concentrate on developing a clear and long term training and career development plan for their employees.
5) Jordanian banks should focus on their employees' loyalty programs to attract distinguished employees.
6) Jordanian banks should take advantage of the suggested framework proposed in this research and the findings in their decision making process.
7) Further researches can be proposed to examine the relationship between employees' satisfaction, employees' performance, customers' satisfaction and organizational performance.
. Summary of the loyalty programs factors and hypotheses of the research Hypotheses Factors H1: Employees' satisfaction is positively associated with organizational performance Employees' satisfaction H2: Financial rewards are positively associated with organizational performance Financial rewards H3: Motivation is positively associated with organizational performance Motivation H4: Performance appraisal system is positively associated with organizational performance Performance appraisal system H5: Employees' training and development are positively associated with organizational performance Employees' training and development H6: Employees' empowerment is positively associated with organizational performance Employees' empowerment H7: Internal communications is positively associated with organizational performance Internal communications H8: Work environment is positively associated with organizational performance Work environment

Table 2 .
below.These variables are; Financial rewards, Employee satisfaction, Motivation, Performance appraisal, Internal communication, and Employee training and development.Results of the stepwise regression that shows the significant variables of the research model Coefficients_a There are two non-significant variables excluded from the original model with p-values > 0.05, as shown in Table3below.These variables are; Employee empowerment and work environment.

Table 3 .
Results of the stepwise regression that shows the excluded variables from the research model

Table 4 .
Results of the stepwise regression that shows the significant variables of the research model Coefficients_a

Table 6 .
Result of the regression analysis of the research hypotheses of the original model