CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

According to David B. Balkin (2001), Communication comes from the Latin word “comunis” which means common. Communication is defined as the process of giving information, making emotions or ideas known to someone. Communication has become an important concept in an organization; large ambitious goals usually require employees to engage into exchange of ideas, information amongst themselves. Effective communications are intermediary goals towards good, sustainable results. Organizations have been increasing efforts through encouraging feedback, sharing, follow up, planning to help people to communicate more effectively and to accomplish shared goals whether colleagues are present or absent (Donald P. Schwab, 1987). Through communication, team members have been able to share knowledge and experience in the best interest of the team.

Leaders have also been able to articulate potential problems for the success of the organization and take steps to avoid and overcome difficulties. Communication enables coordination of activities, sharing of information and respect of values, beliefs and norms of different groups. Only a positive social atmosphere can make people work at their full capability and achieve synergy with others Scarpello (1988). Scott et al contend that through open communication, organizations have been able to produce more or high output than would have been where communication flow is only limited to specific sections of employees. To develop effective employee relations companies had to develop a need for communication channels to move information up, down and across the organization. Effectiveness in an organization involves a sender who encodes the message, a communication channel that transmits the message; a receiver who decodes the message and provisions of feedback because noise in the environment may distort the message’s true meaning Scott Sneii, (2004).

According to smith and Mounter (2006), internal communication is a basic and the most crucial activity of organizations’ operations. For an organization to enjoy effective communication regardless of the work environment, systems have to be put in place Men (2014). In addition, the current organizational functions require organizations to pay more attention to the communication process in order to become effective and also boost overall performance (Mazzei,2014)

Communication is a critical element in influencing employee performance within Microfinance Institutions (MFIs), with the rise of digital communication tools and diverse communication styles significantly impacting organizational dynamics. Over recent years, the widespread adoption of digital communication technologies has revolutionized how employees interact and collaborate within MFIs. From email and instant messaging platforms to video conferencing and collaboration software, these tools offer new avenues for communication that can improve efficiency, accessibility, and connectivity among employees. Nevertheless, the specific effects of digital communication tools on employee performance within MFIs remain relatively unexplored.

Furthermore, the communication styles employed within MFIs play a crucial role in shaping organizational culture, employee engagement, and performance outcomes. Different communication styles, such as assertive, passive, aggressive, or passive-aggressive, can have varying effects on employee morale, motivation, and productivity. Leaders who adopt an open and transparent communication style tend to foster trust, collaboration, and innovation among employees, ultimately contributing to improved performance. Conversely, a lack of clarity or consistency in communication styles may lead to confusion, conflict, and disengagement among employees, thereby undermining performance outcomes within MFIs.

In the context of MFIs, where employees often interact with clients from diverse socio-economic backgrounds, effective communication skills become even more imperative Abu-Tineh et al., (2021). Clear and empathetic communication with clients enhances their understanding of financial products and services, builds trust, and fosters long-term relationships (El-Kassar & Singh, 2019). Moreover, communication plays a vital role in addressing the unique needs and challenges faced by clients, thereby contributing to financial inclusion and poverty alleviation efforts Ogbazi et al (2020).

Understanding the interaction between digital communication tools, communication styles, and employee performance is essential for MFIs seeking to optimize their operational processes and achieve strategic objectives. While digital communication tools offer opportunities for remote work, real-time collaboration, and information sharing, their effective utilization depends on factors such as employee skills, access to technology, and organizational support. Similarly, aligning communication styles with organizational values, goals, and the socio-cultural context of MFIs is crucial for fostering a positive communication climate conducive to high performance

1.2. Statement of the Problem

In today’s globalized work environment, ineffective communication practices pose significant challenges that hinder employee performance and organizational success. Communication barriers  such as lack of clarity, misinterpretation, poor feedback, multicultural communication challenges, information overload, lack of communication technology skills, and organizational silos, negatively impact employee performance in MFI’s in Bamenda such as the Bamenda Police Cooperative credit union limited (BAPCCUL), Bambui Cooperative Credit Union limited (BambuiCCUL), and other MFI’s in Bamenda leading to decreased productivity in these MFI’s, demotivation, and compromised outcomes. In most countries emphasis has been put on improving communication as a formality but most organizations have failed to perform to the public expectations. The lack of communication in organizations has resulted into poor relationship amongst employees, lack of trust, increase in the rate of conflict and poor coordination of activities scott snell (2004)

Effective communication is crucial for enhancing employee performance within Microfinance Institutions (MFIs), yet the specific impact of communication, especially regarding digital communication tools and verbal communication, remains poorly understood. Digital communication tools have become increasingly common in modern workplaces, offering new avenues for sharing information, collaborating, and coordinating tasks. However, there is a lack of clarity on how these tools influence employee performance within MFIs, which often operate across multiple branches and serve diverse clienteles (Nambisan et al., 2019).

Additionally, as concern the language of communication, Effective communication, particularly in diverse linguistic contexts like Bamenda, plays a crucial role in client engagement, trust-building, and service delivery within the microfinance sector (Vaara & Tienari, 2011). However, linguistic diversity can pose challenges, affecting clarity, customer satisfaction, and operational efficiency. Understanding how language preferences and proficiency impact client interactions and organizational effectiveness is imperative for MFIs aiming to enhance service delivery and overall performance in Bamenda. Ensuring that communication strategies are culturally sensitive and linguistically inclusive can lead to better outcomes in client acquisition, retention, and operational efficiency for MFIs in Bamenda

1.3. Research Questions

1.3.1. Main Research Questions

• What is the effect of communication on the performance of employees in MFI’s in Bamenda?

1.3.2. Specific Research Questions

• How does digital communication affect the performance of employees in MFI’s in Bamenda?
• How does the language of communication affect the performance of employees in MFI’s in Bamenda?
• What is the effect of verbal communication on the performance of employees in MFI’s in Bamenda?

1.4. Objectives of the Study

1.4.1. Main Research Objective

• To determine the effect of communication on the performance of employees in MFI’s, Bamenda

1.4.2. Specific Research Objective

• To determine the effect of digital communication on employee performance in MFI’s in Bamenda
• To determine the effect of the language of communication on the employee performance in MFI’s, Bamenda.
• To determine the effect of verbal communication on the performance employee in MFI’s, in Bamenda

1.5. Hypothesis of the Study

For this study to run successfully, the following hypothesis were developed.

H₀: There is no significant effect of digital communication on employee performance in MFI’s in Bamenda

H_1: There is no significant effect of the language of communication on the employee performance in MFI’s, Bamenda.

H₃: There is no significant effect of verbal communication on the employee performance in MFI’s, Bamenda