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Executive Summary: T.Y.Bbi-Semester V Human Resource Management
Executive Summary: T.Y.Bbi-Semester V Human Resource Management
BBI-SEMESTER V
EXECUTIVE SUMMARY
Fast global & technological developments have made todays business
environment highly uncertain & even chaotic. Organizations are seeking newer
ways to promote their adaptability to the complexities of the changed scenario so
as to survive & prosper. Globally organizations are striving to realize competitive
success through strategic management of human resources. Thus, people
management has never been more important than it is today. Therefore new themes
have emerged in the process, replacing some of the old ones. The new thinking in
this regard is referred to as Human Resource Management (HRM), which carries a
more proactive & strategic connotation.
The development of employee commitment through employee involvement &
empowerment is one of the key objectives of any HRM discourse. The complex
business objectives in todays business environment are difficult to realize without
developing highly committed & motivated employees who would strive to
contribute to organizational goals. That is why, human resource issues are no more
the preserves of personnel specialists; rather line & general managers are being
increasingly involved in handling key HR issues & in evolving, shaping &
managing human resource strategies & policies. These developments have given a
far greater recognition to the HR function in organizational decision- making
processes.
Human resource is one of the natural resources of any countrys economy. It is the
wealth of the country. In the context of banking, human resource is of greater
importance. The deployment of human resource through proper & efficient
selection, training & development, is called Human Resource Management.
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The success of any bank largely depends on efficient human resource management,
apart from operations, marketing & sales, the HR department manages all the
efficient people working in operations & marketing divisions in an organization.
HYPOTHESIS
GROWTH OF BANKING SECTOR DEPENDS ON APPROPRIATE HRM
POLICIES.
To analyze this hypothesis I have included a case study on STATE BANK OF
INDIA in which I have put forth the range of practices executed by the HR
department. I have even interviewed Mr. Rajiv Deka, Branch Manager of SBI &
Ms. Rohini Rai, Branch Manager of HDFC Bank, thereby representing the two
major sectors of BANKS, i.e., PUBLIC SECTOR & PRIVATE SECTOR.
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INTRODUCTION
The concept of human resource management is increasingly becoming a most vital
function of a modern manager. Human resource management is the management of
employees knowledge, abilities, talents, aptitudes, creative abilities, etc.
Human resources take active role in the modern economic scenario of any country.
The abundant physical resources alone cannot benefit the growth of the country
without human resource component, which transforms physical resources into
productive resources. In fact, the differences in the level of economic development
of the countries are largely a reflection of the differences in quality of their human
resources. The key element in this proposition is that the values, attitudes, general
orientation and quality of people of a country that determines its economic
development.
People are our most valuable asset is a clich which is no member of any
management team would disagree with.
The concept of HRM assumes immense importance as HRM plays vital role in
meeting the challenging requirements of highly skilled & component human
resources due to globalization.
DEFINITION
Human resource management is planning, organizing, directing & controlling of
the procurement, development, compensation, integration, maintenance &
separation of human resources to the end that individual, organizational and social
objectives are accomplished.
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MEANING
Human resources management involves all management decisions & practices that
directly affect or influence people or human resources, who work for the
organization. In recent years, increased attention has been devoted to how
organizations manage human resources. This increased attention comes from the
realization that an organizations employees enable an organization to achieve its
goals, & the management of these human resources is critical to the success of the
organization.
HRM is management function that helps managers to recruit, select, train &
develop members for an organization. Obviously HRM is concerned with the
peoples dimensions in organizations. HRM refers to set of programs, functions &
activities designed & carried out.
Human resource management means employing people, developing their
resources, utilizing, maintaining & compensating their services in consonance with
the job & organizational requirements.
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SCOPE
From entry to the exit of an employee in the organization;
Scope of HRM can be described based on the following activities of HRM. Based
on these activities we can summarize the scope of HRM into 7 different categories
as mentioned below after the activities. Lets have a look at both of them
HRM Activities:1. HR Planning
2. Job Analysis
3. Job Design
4. Recruitment & Selection
5. Orientation & Placement
6. Training & Development
7. Performance Appraisals
8. Job Evaluation
9. Employee & Executive Remuneration
10.Motivation
11.Communication
12.Welfare
13.Safety & Health
14.Industrial Relations
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NATURE OF
HRM
PROSPECTS
OF HRM
INDUSTRIAL
RELATIONS
EMPLOYEE
HIRING
HUMAN
RESOURCE
MANAGEMENT
EMPLOYEE
MAINTENANCE
EMPLOYEE &
EXECUTIVE
REMUNERATION
EMPLOYEE
MOTIVATION
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Managerial Functions
II.
Operational Functions
Managerial Functions:
Managerial functions of Personnel management include planning, organizing,
directing, co-ordinating & controlling.
Planning:
It is the charting out of programmes & changes in advance in the
achievement of organizational goals. Hence, it involves planning of human
resources requirements, recruitment, selection, training etc. It also involves
forecasting of personnel needs, changing values, attitudes & behavior of
their employees & their impact on the organization.
Organizing:
In the words of J. C. Massie, an organization is a structure & process by
which co-operative groups of human beings allocated its tasks among its
members, identifies relationships & integrates its activities towards a
common objective. Given the complex relationships that exist between
specialized departments & the general departments, many top managers seek
the advice of personnel manager. In this manner, the organization establishes
relationships among the employees so that they can together contribute to
the achievement of organizational goals.
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Directing:
After planning & organizing comes the execution of plan. The willing &
effective
cooperation
of
employees
towards
the
achievement
of
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Operative Functions:
The operative functions of HRM relate to employment, development,
compensation & relations. All these are interacted by managerial functions. Also,
they are to be performed in conjunction with management functions.
EMPLOYMENT
HUMAN
RESOURCE
DEVELOPMENT
Performance Appraisal
Training
Management Development
Career Planning & Development
Organisation Change
Organisation Development
COMPENSATION
MANAGEMENT
Job Evaluation
Wage & Salary Administration
Fringe Benefits
HUMAN
RELATIONS
Motivation
Morale
Job Satisfaction
Communication
Grievance & Disciplinary Procedures
Quality of Work Life & Quality Circles
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Employment:
Employment function is securing & employing the people having required
level of human resources essential for achieving the organizational
objectives. It involves job analysis, human resources planning, recruitment,
selection, placement, induction & handling internal mobility.
Job Analysis:
It is the study & collection of data relating to the operations &
responsibilities of a specific job. It includes:
a. Collection of data & information & facts relating to the various
aspects of jobs including men, machines & materials.
b. Drawing up of job description, job specification, job requirements
& employee specification with which nature, level & quantum
human resources can be finalized.
c. Providing the guidelines, plans & the basis for job design & for all
operative functions of HRM.
Human Resource Planning:
This is the process which assures the organization that it will have adequate
number of qualified persons, at requisite times, performing in a way to
satisfy the needs of the organization & also provide satisfaction to the
individual employee, so employed.
The process involves:
a. Estimating the present & future requirements of human resources
based on objectives & long range plans of the organization.
b. Calculation of net human resource requirements based on the
present availability of human resources.
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Placement:
It is a process of allotting to the selected candidate the most suitable job, as
per the job requirements & employee specifications.
This function includes:
a. Counselling the concerned managers regarding the placements.
b. Overseeing the follow-up studies, employee performance appraisal
to monitor employee adjustment to the job, in the coming days.
c. Correcting wrong/misjudged placements, if any.
Induction & Orientation:
These are procedures by which a new employee is rehabilitated in the new
surroundings & introduced to the practices, procedures, policies, people, etc.
of the organization.
It includes:
a. Familiarizing the employee with company philosophy, objectives,
policies, career planning & development, company product, market
share, history, culture, etc.
b. Introduce new employee to the peoplehis colleagues, supervisors
& subordinates.
c. Mould the employees by orientation methods to the new working
conditions.
Human Resource Development:
This process involves improving, moulding, & developing the skills,
knowledge, creativity, attitude, aptitude, values, commitment, etc. based on
the present & future job & company requirements.
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Performance Appraisal:
It is the continuous & systematic evaluation of individual employees with
respect to their performance & their potential for future development.
It includes:
a. Enunciating policies, procedures & techniques.
b. Assisting functional managers.
c. Reviewing & summarizing reports.
d. Evaluating the effectiveness of various programmes.
Training:
It is the process of transmitting the employees the technical & operating
skills & knowledge.
It includes:
a. Identification of training needs of the individuals & for the
organisation.
b. Developing appropriate training programmes.
c. Assissting & advising the management in the conduct oftraining
programmes.
d. Transmitting requisite job skills & job knowledge to the
employees.
e. Asses the effectiveness of the training programmes.
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Management Development:
It is the process of designing & conducting appropriate executive
development programmes so as to develop the managerial & human
relations skills of the employees.
It includes:
a. Identification of the areas in which management development is
needed.
b. Conducting development programmes.
c. Motivating executives/managers.
d. Designing
special
development
programmes/
assessment
&/or
Institutional
(external)
development
executive
development
programmes.
f. Evaluating
the
effectiveness
of
programmes.
Career Planning & Development:
It is the planning of ones career & implementation of career palns by means
of education, training, job search & acquiring of work experience.
It includes:
a. Internal mobilityvertical & horizontal transfers, promotions &
demotion.
b. Transferprocess of placing employees in the same level jobs
where they can be utilised more effectively as per the needs of the
organisation. This also meansdeveloping transfer policies,
offering assistance & guidance to employees under transfer orders
& evaluating transfer policy periodically.
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fair
implementation
of
demotion
policies
&
procedures.
Organisational Development:
The planned process drawn up to improve organisational effectiveness
through changes in individual & group behaviour, culture & systems of the
organisationdrawing models from applied behavioural science.
Human Relations:
Administering
various
human
resources
policies
like employment
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HRM Objectives
Social Objectives
Organisational Objectives
Functional Objectives
Performance Appraisals
Placement & Orientation
Employee Assessment
Personal Objectives
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OBJECTIVES
Societal Objectives: to be ethically & socially responsible to the needs &
challenges of the society while minimising the negative impact ofsuch
demands upon the organisation.
Organisational Objectives: To recognise the role of HRM in bringing about
organisational effectiveness. HRM is only means to achieve & assist the
organisation with its primary objectives.
Functional Objectives: To maintain departments contribution & level of
services at a level appropriate to the organisations needs.
Personal Objectives: To assist employees in achieving their personal goals,
at least in so far as these goals enhance the individuals contribution to the
organisation. This is necessary to maintain employee performance &
satisfaction for the purpose of maintaining, retaining & motivating the
employees in the organisation.
Objectives of Personnel Management are determined by organisational objectives
& individual & social goals. The main objectives of Human Resource Management
are drawn from the organisational objectives. The other objectives of HRM are to
take care of the needs, aspirations, dignity of the individual employees & at the
same time keeping in mind the socio-economic problems of the community & the
country.
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Responsibilities:
To be the principal sponsor & guardian of HR policies in the Bank.
To propose & obtain agreement on changes to these policies from time to
time & to ensure that policies which have been agreed are being
implemented throughout the Bank.
To contribute fully to the task of meeting the business challenges whichthe
bank has to face by supporting Branch/Unit Managers in continuously
developingthe potential of employees & in creating conditions in which all
the employees are motivated to meet the objectives of the Bank.
To continuously monitor the Banks strategies to ensure that HR policies are
approriate & that employee numbers & skills are fully supportive of such
strategies.
To deliver a full range of personnel services in support of line management.
These
services
include
manpower
planning,
recruitment/transfer,
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A bank in a normal course invests time & money to hire & train the
appropriate workforce for its own operations. This readymade force is often
identified & subsequently picked-up on better terms by others.
Compensation:
How much to pay the right employee & how much to the outstanding
performer. Banks have traditionally followed pay scales with predetermined
increments, salary slabs, bonuses & time based fringe benefits like car &
house advance, gratuity, pensions, etc.
The situation is not the same anymore. An increment of Rs.500-800 per
annum is no more a source of attraction for a professional anymore. A basic
pay with traditional formulas of linkage with medical & other facilities has
no soothing today.
A promise of future growth, learning culture & corporate loyalty is out of
dictionary & does not mean anything to this energetic & competent
performer today.
A waiting period of 3-4 years in each cadre haunts the incumbents who
strongly believe in immediate compensation. A freshly hired professional
requires a brand new car or car loan n resuming office quite contrary to his
previous breed of bankers who would wait for the job seniority to qualify for
a car loan.
Job Satisfaction:
Everybody in the bank wants to work in the preferential department,
preferential location, city of his own choice & boss of his liking. An
administrative deviation from any of these results in lowered job
satisfaction.
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The training system in the banking industry has a strong structural base. However,
in the past the training activities have been more ritualistic due to absence of a
strategic link between training & human resources development. Today, it is
important that the training function is made an effective organizational intervention
by establishing a clear policy of training & development within the framework of
total human resource development. The training establishments need to be actively
involved in the total training process starting from the identification of the training
needs, evaluation of training effectiveness & the benefits of training to the endusers viz. the internal & external customers.
The need for training & development is determined by the employees
performance deficiency, computed as follows:
Training & Development Need = Standard Performance Actual
Performance.
We can make a distinction among training, education & development. Training, as
was started earlier, refers to the process of imparting specific skills. Education, on
the other hand, is confined to theoretical learning in the classrooms.
Training & Education Differentiated:
TRAINING
EDUCATION
Application oriented
Theoretical oriented
Job experience
Classroom learning
Specific tasks
General concepts
Narrow perspective
Broad perspective
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Development:
Give a man a fish, & you give him meal. Teach man to fish, & you give him a
livelihood.
This ancient Chinese proverb seems to describe the underlying rational of all
raining & development programs. No banking organization can long ignore the
training & development needs of its employees without seriously inhabiting the
performance. Even the most careful selection does not eliminate the needs for
training, since people are not molded to specifications & rarely meet the demands
of their jobs adequately.
This HRM function deals with the overall development of the employees. This
includes their professional & well as their personal development. It is a part of
HRM function to identify opportunities for enhancing the skills of the resources.
Promotion is regarded as one of the ways of recognizing development undertaken
by an employee. Development is also largely dependant on training.
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Generally people think that training & development are one & the same, but there
are many differences between them. They are as follows:
TRAINING
Duration:
Training courses are designed
mostly for short term.
Managerial/Operative Personnel:
Training is normally directed at
operative employees & related to
technical aspects.
Specific/General:
Training is more specific job
related information.
Method:
More emphasis on the on the job
method.
Cost Involved:
Imparting
training
is
less
expensive.
Who Imparts:
Mostly the supervisors impart
training.
Frequency:
Less frequent. Mostly at induction
& at every change in job.
Theoretical/Practical Aspects:
Emphasis is placed on practical or
technical aspects of work.
DEVELOPMENT
It involves a broader long term
education for a long term.
It is directed at managerial
personnel to acquire conceptual &
theoretical knowledge.
It is more general in nature,
especially top management level.
More emphasis on the off the job
method.
Development is more expensive.
It is undertaken by supervisors,
outside experts & self.
More frequent & continuous in
nature.
Emphasis is placed on theoretical
& conceptual aspects.
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Assessment of Training
Needs
Establishment of Training
Goals
Devising Training
Programme
Implementation of Training
Programme
Evaluation of Results
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ON-THE-JOB METHOD
JOB ROTATION
COACHING
JOB INSRTUCTIONS
COMMITTEE
OFF-THE-JOB METHOD
VESTIBULE TRAINING
ROLE PLAYING
LECTURE METHOD
CONFERENCE OR
DISCUSSION
PROGRAMMED
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DEVELOPMENT IN BANKS
The banks must emphasis on human resource development as one of the critical
areas of its operations. It should redraw its training & development schedules to
suit the requirements of the current emerging scenario. Requisite training should be
imparted to various branch level functionaries as also administrative staff. Besides
in-house training the reputed external agencies should be utilized for human
resource development with a view to updating their knowledge & to keep them
abreast of the current banking scenario for meeting the challenges ahead. The
concept of segment specialization may be resorted to in respect of the personnel
selected therefore. It is now thought expedient to plan & strengthen the squad of
skilled officers in various segments as IT, marketing management, risk
management, risk based supervisors, law, security, etc.
The lead bank must play an effective role in improving the work environment &
pursuing staff welfare measures in the form of whole range of financial assistance
with reference to various loans of sorts.
Human resource skills are other areas of challenge. Because of modernization &
technological advancement rigorous training & man power planning are required.
In the market scenario characterized by heightened competition, growing customer
needs & technological up gradation, the bank fine tunes its HT policy to meet its
corporate objectives. New training systems have been developed to impart
competencies & a broad range of skills among the employees to deliver faster &
superior service that can delight the customers. The Industrial Relations in the
banks have been harmonious & cordial.
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RECRUITMENT
Meaning and definition:
The human resources are the most important assets of an organization. The success
or failure of an organization is largely dependent on the caliber of the people
working therein. Without positive and creative contributions from people,
organizations cannot progress and prosper. In order to achieve the goals or the
activities of an organization, therefore, they need to recruit people with requisite
skills, qualifications and experience. While doing so, they have to keep the present
as well as future requirements of the organization in mind.
Once the required number and kind of human resources are determined, the
management has to find places where the required human resources are/will be
available and also find means of attracting them towards the organization before
selecting suitable candidates for jobs.
Recruitment is defined as, A process to discover the sources of man power to
meet the requirements of the staffing schedule and to employ effective measures
for attracting that man power in adequate numbers to facilitate effective selection
of an efficient work force.
Objectives of recruitment
Some of the objectives of recruitment are:
To attract people with multi-dimensional skills and experiences that suits the
present and future organizational strategies
To induct outsiders with a new perspective to lead the company
To infuse fresh blood at all levels of the organization
To devise methodologies for assessing psychological traits
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RECRUITMENT PROCESS
Personnel
Planning
Job
Vacancies
Job Analysis
Recruitment
Planning
Number
Type
Strategy
Development
Where How
When
Employee
Requisition
Searching
Activation
Selling
Message
Media
Application
Population
Screening
To Selection
Application
Potential
Pool
Hirers
Evaluation &
Control
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Process of Recruitment:
Recruitment refers the process of identifying and attracting job seekers so as to
build a pool of qualifies applicants. This process comprises of five interrelated
stages, viz,
Planning
Strategy development
Searching
Evaluation and control
The ideal recruitment process is the one which attracts relatively larger number of
qualified applicants who will survive the screening process and accept positions
with the organization, when offered to approach the ideal people, individuals
responsible for recruitment process must know how many types of employees are
needed, where and how to look for individuals with appropriate qualifications and
interests, what inducements to use for various types of applicants group, how to
distinguish applicants who are unqualified from those who have a reasonable
chance of success, and how to evaluate their work.
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SELECTION
Definition
Selection is defined as the process of differentiating applicants in order to identify
and hire those with a greater likelihood of success in a job.
The objective of selection decision is basically picking an applicant from a pool of
applicants who has the appropriate qualifications and competency to do the job.
The selection procedure cannot be effective until and unless Requirements of the job to be filled have been clearly specified.
Employee specifications (physical, mental, social, behavioral etc) have been
clearly specified.
Candidates for screening have been attracted.
Selection process is preferable because:
It is easier for applicant as they can send their applications to a single
centralized department/agency.
It facilitates contacts with applicants because issues pertaining to
employment can be cleared through one central location.
It
helps
operating
managers
to
concentrate
on
their
operating
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Selection Process:
The selection process consists of the following steps:
1. Application form: Many companies formulate their own style of
application form depending upon the size and nature of business
carried on, type and level of the job etc. Information is generally
required on the following items in the form: personal background,
educational attainments, work experience references etc.
2. Written test: Written test is conducted for the qualified candidates
after they are screened on the basis of application form to measure the
candidates ability towards the job, his aptitude reasoning, knowledge
in various disciplines, English language etc.
3. Preliminary Interview: The next step that tag along the selection
procedure is a preliminary interview wherein the applications are
scrutinized so as to eliminate unqualified applications. Preliminary
Interviews are short. This interview thus provides information about
the candidate related to the job or personal specifications.
4. Selection Test: After passing through the interview the next stage that
applicant has to prove himself on are the selection tests. There are
different types of selection tests for different levels of the organization
and that too is further differentiated within different types of
organizations. Some of the most common and well-known tests that
an applicant has to go through are;
a. Ability test
b. Aptitude test
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7. Physical Examination: After the selection decision and before the job
offer is made, the candidate is required to undergo a physical fitness
test. The result of the medical fitness test is recorded in a statement
and is preserved in the personal records. The main objectives of this
test are as follows:
To detect if the individual carries any infectious diseases.
To determine whether an applicant is physically fit to perform
the work.
It helps to determine if there are any physical capabilities
which differentiate successful and less successful employees.
Medical check up protects applicants with health defects from
undertaking work that could be detrimental to them or might
otherwise endanger the employers property.
Last, but not the least such examination will protect the
employer from workers compensation claims that are not valid
because the injuries or illness was present when the employee
was hired.
8. Job offer: The next step is selection process is Job offer for those
applicants who had passed the previous stage. Job offer is made
through a letter of appointment. Such a letter usually contains the date
by which the appointee must report on duty. Appointee must be given
a reasonable time for reporting because it may be quite possible that
the appointee is employed in some other company or must be residing
in some other city and for such other reasons. Company may also
want the appointee to delay in joining the job because the job may
require undergoing some training program.
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FUTURE OF HRM
If HRM is not to remain more in the realm of rhetoric with wide disparities
between theory and practice, several things need to take place. First, HRM needs to
be diffused across industries and the economy. For this to occur the following
conditions need to be satisfied:
HRM should be an essential part of management education and training.
From this, two important consequences are likely to follow. HRM is likely
to be integrated into corporate strategies and line managers functions and
decisions. This would reduce the need for HRM specialists, except at the
policy level where they will have a greater voice. Business strategies are
then likely to be built less around low cost and low wages, but around the
real sources of competitive advantage such as flexibility, quality and
customer service.
Employment policies which support employment security, without which
HRM policies, including training, would have little motivational effect. This
does not mean guaranteed employment, but a policy which treats termination
as a last, rather than a first, resort. Learning from international experiences
and diffusing the information can have a transforming effect, as was the case
when American manufacturing was transformed through in-depth studies of
Japanese manufacturing in the automobile industry.
Substantial investment in people and the willingness of employers to view
the benefits from a long-term perspective - a difficult task in a system which
is driven by short-term investor pressure.
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CASE STUDY
PSBs,
which
was
approved
by
the
Finance
Ministry.
Though SBI promoted the VRS as a Golden Handshake,' its employee unions
perceived it to be a retrenchment scheme. They said that the VRS was completely
unnecessary, and that the real problem, which plagued the bank were NPAs. The
unions argued that the VRS might force the closure of rural branches due to acute
manpower shortage. This was expected to affect SBI's aim to improve economic
conditions by providing necessary financial assistance to rural areas. The union
also alleged that the VRS decision was taken without proper manpower planning.
In February 2001, the SBI issued a directive altering the eligibility criteria for VRS
for the officers by staffing that only those officers who had crossed the age of 55
would be granted VRS.
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The Protests
The SBI was shocked to see the unprecedented outcry against the VRS from its
employees. The unions claimed that the move would lead to acute shortage of
manpower in the bank and that the bank's decision was taken in haste with no
proper manpower planning undertaken. They added that the VRS would not be
feasible as there was an acute shortage of officers (estimated at about 10000) in the
rural and semi-urban areas where the branches were not yet computerized.
Moreover, the unions alleged that the management was compelling employees to
opt for the VRS. They said that the threat of bringing down the retirement age from
60 years to 58 years was putting a lot of pressure on senior bank officials to opt for
the scheme.
they
attained
the
retirement
age
by
the
end
of
2001.
Analysts felt that this would lead to a tremendous increase in the workload on the
existing workforce.
Analysts felt that SBI would have to take serious steps to reorient its HRD policy
to restore employee confidence and retain its talented personnel. SBI had many
strong organizational strengths and an excellent training system, but due to weak
HR policies, it had lost its experts to its competitors.
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T.Y.BBI-SEMESTER V
THE INTERVIEW
I have interviewed Mr. Rajiv Deka, Branch Manager of SBI & Ms. Rohini Rai,
Branch Manager of HDFC Bank, thereby representing the 2 major sectors of
banking, i.e., Public Sector & Private Sector. The theme of the interview was on
how HRM has reacted to the various drivers of modern banking & how to enhance
performance in the fast changing banking sector. The results of the interview threw
up some interesting facets to the HR issues confronting the banks today & how the
HR departments are coping with it. Hereby showing the main highlights of the
interview.
1. HRM CHALLENGES
HRM CHALLENGES
6%
4%
4%
15%
21%
26%
13%
11%
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T.Y.BBI-SEMESTER V
When interviewed the two personnel, both of them were of the opinion that the list
of HRM challenges in banks are as shown in the graph.
The biggest HRM challenge is sustaining & increasing the profits of the
bank.
Following that is improvement in the operational effectiveness of the HR
department.
The least priority on the challenge list is given to new distribution channels
& on introducing new products & services.
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T.Y.BBI-SEMESTER V
3. EFFECTIVENESS OF HRD
Posting right person for the right job, retaining talents, planning for the long term
needs of the bank, dovetailing employee preferences in the deployment process, &
capacity to make staff changes that drive business changes are the corner stones of
HR strategy. How effective are the banks in performing these tasks?
The two personnel were of the opinion that:
They are effective when it is a question of ability to post staff with
appropriate skills & capabilities for the job/s.
Also these departments have enough room/flexibility with regard to their
ability to make changes in staffing pattern/position based on changes in
business conditions.
As regards PSU banks, the response to the effectiveness should, be read in
conjunction with the issues on transfer & promotion policy. The posting of
staff with appropriate skills & capabilities could be well suffixed with
subject to availability of suitable skills & talents in the given location.
HRM effectiveness could also be suited with reference to be its role in staffing of
each department/unit. In an effective organization, the department will have a say
in the matter & work hand in glove with the line departments. This seems to be in
vogue in private sector & foreign banks. Invariably, in these organizations, the line
departments & HRD jointly select candidates, while HRD is involved in the head
hunting, finalizing pay & related aspects. In the case of PSBs, in the past the
selection process was through advertisements for a large number of posts.
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T.Y.BBI-SEMESTER V
The need for specialization & new skill sets for CBS &
Marketing of bank products bring us to the two issues that have gained
the attention of HR departments in the recent years, namely staff
deployment techniques & managing employee turnover.
Across the banking sector everyone is facing a high level of employee turnover in
the recent years. If till recently it was the BPO sector, which was the biggest
recruiter, it is now the turn of retail business. It is seen that bank employees are
able to take up jobs in these relatively new areas. In the view of this, it is seen that
the turn over level during the current year is higher than the previous years.
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T.Y.BBI-SEMESTER V
It can be said that the current period is the most challenging times for HRD, as
staff-mostly talented & experienced officers-move from public sector to private
sector & within the private sector to the greener pastures. Certain specialist areas
such as treasury management, risk management & customer relationship face acute
shortage of experienced & talented staff. As PSBs cannot offer-barring a fraction
of their business-market related salaries the turn over has been high. Another
reason for loss of staff is the requirement of domain staff in the IT companies.
Transfers have also been cited as one of the reasons for turnover in the public
sector. The available avenues to manage this issue are outsourcing, re-skilling,
hiring temporary staff; reuse of retired staff, etc. it is seen from the news reports
that, in making financial inclusion happen, banks have resorted to the use of the
expertise of retired staff. Some of the retired staff has also come forward to handle
training assignments. The following figure shows the importance of HR in each
strategy adopted by banks in the matter of staff deployment:
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
MORE
LESS
NO CHANGE
DONT USE
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T.Y.BBI-SEMESTER V
Performance Appraisal:
A related issue is the performance appraisal system that currently focused more on
promotions & not on linking performance to deployment of specialization.
Performance appraisal is also more on traits than on any qualitative or quantitative
appraisal of work. In the absence of clearly defined individual & organizational
goals the appraisal has become a routine. Participants indicated the need for a
change & more business oriented appraisal & felt that appraisal systems such as
360 Degree appraisals will be useful in future. The overwhelming feeling is that
PA system should change & react to new needs.
5. RECRUITMENT IN BANKS
Evidently the banks are waking up to many new issues. One such issue is the
changing recruitment market. What according to the HR executives attracted
candidates to the banks?
What attracts candidates to your banks?
Sr. No.
Particulars
1.
2.
3.
4.
5.
6.
7.
8.
Others
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T.Y.BBI-SEMESTER V
The personnels felt that the recruitment policies, in future, will be woven around
the above aspects (Table). It is an indication of changing times that the list includes
items such as performance linked incentives, fast track promotion, foreign posting
education, choice of departments, sabbatical & stock option. If turnover is high &
recruitment poses challenges on account of high salary & work life balance
expectations the HR function needs to adopt many different methods to
educate/train the staff.
Employee Development Techniques
It was earlier seen that the major task before the HRD is to instill new skills with
the staff. In this connection it can be pointed out that all the banks own a large
training network. They also have access to other training establishments &
seminars. Banks also send employees to B schools for short duration courses &
MDPs. The major emphasis of banks is to use their training systems &
establishments to the fullest extent. Banks were also keen on encouraging their
staff to take up new courses & correspondence courses. The schemes of
reimbursements of expenses were rather liberal.
40
35
30
25
20
15
10
5
0
EFFECTIVE
NOT EFFECTIVE
NOT TESTED
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T.Y.BBI-SEMESTER V
As staff turnover & new positions are filled, knowledge management becomes
important. The rules, procedures & customers, data that have been gathered need to
be made available to the new staff such that continuity & service excellence is
maintained. There is a need to curtail expenses in reinventing wheels. The HR
executives felt that the HR department can also function as knowledge
management centre. Banks have already begun knowledge management efforts.
6. SOURCES OF RECRUITMENT
The various sources of recruitment may be broadly classified into two categories,
i.e., internal & external sources. Some organizations draw their human resources
internally, i.e., from within the organization while others draw externally, i.e., from
outside the organization.
PROMOTION
TRANSFER
RETIREMENT
RECALLS
INTERNAL ADS
CONSULTANTS
I
N
T
E
R
N
A
L
Sources of
Managerial
Recruitment
E
X
T
E
R
N
A
L
ADVERTISEMENTS
INSTITUTES
RECOMMENDATION
DEPUTATION
Page - 55 - of 58
T.Y.BBI-SEMESTER V
CONCLUSION
The banking sector has grown from a few institutions primarily involved in deposit
acceptance and trade finance into a complex multi player where large number of
commercial banks, financial institutions and specialized banks are operating with
various products and activities. The banking has become a complex activity within
the financial market linked directly and indirectly with an over-all national growth
and its impact as an integral part of regional segment of a global banking
environment.
Thus, event the high automation would require proper man behind the machine to
make things happen. This idea has been realized by top managements in
progressive banks.
Like many other organized sectors, banking requires multi layer manpower for its
various requirements of professionals and support staff. The range may require
reasonably educated security guards on the one end and a highly educated and
trained professional as head of corporate finance at the other.
HRM is of great importance in banks. The training and development of employees
is very much important. Recruitment and selection must also be done very
efficiently. The major challenge for this industry is, attracting the right talent and
retaining them.
To conclude the growth of banking sector in the future depends upon appropriate
HRM policies which will assist the employees in achieving their personal goals
and in turn will enhance the individuals contribution to the organization.
Objectives of the employees should be met if employees are to be maintained,
retained and motivated.
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T.Y.BBI-SEMESTER V
ACKNOWLEGEMENT
I sincerely thank the University for introducing a degree course in B. Com for
Banking & Insurance. This has given us an opportunity to gain knowledge on the
insights of the Banking & Insurance industry. A special thanks to our esteemed
coordinator Prof. A.R.Suri for guiding and motivating me during this project. I
would also like to thank the librarian of Jai Hind College who helped me in finding
out various books on the topics.
This project was highly educational and a great learning experience.
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T.Y.BBI-SEMESTER V
BIBLIOGRAPHY
BOOKS
Human Resource Management and Industrial Relations P. Subba Rao
Human Resource Management K. Ashwathapa
Human Resource Management P. V. Rao
The future of Human Resource Management - K. Ashwathapa
Human Resource and Personnel Management William Wrether
WEBSITES
www.hrmguide.net
www.humancapitalonline.com
www.google.com
www.hrmtoday.com
www.wikipedia.com
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