INTRODUCTION TO HUMAN RESOURCES

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Human Resource Management is essential in all sectors and this project deals with human resources in general and in the banking sector. Before discussing Human Resources in the banking sector it is essential to understand the basic concept of human resources as well as that of management. The term human resources is variously defined in political economy and economics, where it was traditionally called labor, one of three factors of production. Its use within corporations continues to define common conceptions of the term. Modern analysis emphasizes that human beings are not predictable commodity "resources" with definitions totally controlled by contract, but are creative and social beings that make contributions beyond "labor" to a society and to civilization. The broad term human capital has evolved to contain the complexity of this term, and in macro-economics the term "firmspecific human capital" has evolved to represent the original meaning of term "human resources".

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What is Management?
Management is concerned with the human beings whose behaviour is highly unpredictable. Ever since people began forming groups to achieve as individuals. Managing has been essential to provide the coordination of individuals efforts. Management does not perform specific jobs. It motivates other people to perform specific jobs. It indicates a total process of executive control in business. It implies undertaking of responsibility for effective planning, policy making, fixation of targets and operative functions of providing men, money and materials to run day-to-day administration. Management is concerned with actually directing and guiding the operations to achieve business objectives. It uses human efforts to reach the predetermined goals. Regulation. Control and evaluation of human efforts in the direction of achieving the given objectives are the primary functions of management. Also, management refers to bringing together of physical and human resources to carry on planned activities and control performance in order to ensure that what is done is what is expected. Management is applicable to both profit-making and service-rendering organizations.

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Nature of Management
(1). Management as an economic resource: Historically, land and capital were treated as sources of production. Now along with land and capital, labour and management are given the status of economic resource. Management coordinates as well as controls economic resources. It facilitates effective use of other resources for achieving specific objectives.

(2). Management as a system of authority: A manager is given specific duties and also the authority. He has to achieve certain results with the participation of others. He has to get the work done through the others. A manager can achieve results through delegated authority as per the need of the situation.

(3). Management is a group activity: Management is not individualistic but a joint activity. Managers have to guide and motivate their subordinates. Management is an activity of a group. Results will not be achieved only by the managers but also bt the cooperation and participation of subordinates.

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Management is a social process: Management takes place through people. (3). The managers exercise leadership by assuming authority and direct others to act within the organization. 4 . A managers job is to get the things done with the support and cooperation of subordinates. Management is a group activity: Management is not an isolated activity but it is an activity of a group. It is this human element which gives management its special character. Management is a process: Management is a process and not merely a body of individuals.Characteristic features of Management: A few of the characteristic features of management are: (1). (2). It aims at using group efforts for achieving objectives. Those who perform this process are called managers.

5 . activities and employees. Management is all persuasive: Management is comprehensive and covers all departments. Another manager need not repeat the decisions of one manager.(4). Similarly. Management is innovative: Management techniques are dynamic and innovative. a manager has to change his decisions under different situations. Such techniques are adjusted as per the requirements of the situations. Managers are working at different levels but their functions are identical. This indicates that the management is a universal process. (5).

many persons work together. guidance and even motivation for raising their efficiency. Orderly achievement of business objectives: Efficient management is needed in order to achieve the objectives of business activity in an orderly and quick manner.Need for Management (1). 6 . coordinating and controlling are the basic functions of management. Management is needed for guiding employees in the right direction and for coordinating their efforts. Management is needed as these functions are performed through the management process. organizing. (2). In the absence of guidance. (3). people will work as per their desire and the orderly working of enterprise will not be possible. Performance of basic managerial functions: Planning. Direction and control of group efforts: In business. They need proper direction.

Motivation of employees: Management is needed for motivating employees and also for coordinating their efforts to achieve business objectives quickly. progress and smooth functioning of a business enterprise 7 . Success and stability of the business enterprise: Efficient management is needed for success. Effective communication at all levels: Management is needed for effective communication within and outside the organization. (5).(4). (6).

Modern business is highly competitive and needs efficient and capable management. which leads to progress and prosperity of a business enterprise. It is through management that business activities are organized and conducted efficiently. (3). Optimum use of resources: Management facilities optimum utilization of human and physical resources. Following are few of the points that suggest the importance of management: (1). Motivates employees: It motivates employees to take more interest and initiative in the work assigned and contribute for raising productivity and profitability of the enterprise.Importance of Management The importance of management in business is universally accepted. This enables an enterprise to develop and expand its assets and profits. (2). 8 . Competitive strength: Management develops competitive strength in an enterprise.

It creates good corporate image to a business enterprise. growth and diversification of a business unit are possible through efficient management. (5). Reduces turnover and absenteeism: It reduces labour turnover and absenteeism and ensures continuity in the business activities and operations. 9 . Expansion of business: Expansion.(4).

firing. It is also known as personnel administration. 10 . or transferring people to/from jobs they can do most productively.HUMAN RESOURCE MANAGEMENT Human Resource Management or Personnel management is the activity of managing personnel. usually employees. or a minor in the business school. In any organization. which is functionally an equivalent term. managing personnel is the process of making sure the employees (not the customers) are as productive as they can be. This can include hiring. This subject is a major at many universities.

HRM programmes offer long term benefits to an organization. Such investment creates a team of efficient.Meaning of Human Resource Management: A business unit needs employees to look after different activities. 11 . Such human resource needs to be developed fully so that it will make positive contribution for the progress and prosperity of a business unit. HRM is a continuous process and it needs money. HRM is an organized learning experience aimed at matching the organizational need for career growth and development. For this systematic development and management of human resources is necessary. skilled and trained manpower which brings success and stability to a business unit. Human Resource Management (HRM) deals with: (a) Training (b) Self-development (c) Promotions (d) Performance appraisal of manpower recruited in an organization. It is a process involving series of learning activities designed to acquire desired level of competence among employees. This is called manpower or human resource.

This leads to improvement in the individual performance of an employee and also corresponding improvement in the organizational performance. organizational development) in the HRM programme. training and opportunities to learn and develop employees of all categories and working in different departments. reading books and periodicals. Career development is possible through joining training courses. (3).Characteristics of Human Resource Management: (1). career developments. career development and possible through HRM programmes. Attention to learning and career development: Learning. There is an integrated use of sub-systems (training. self-development. guidance. Stress on Training: HRM includes various schemes arranged for providing education. (2). These are the core areas of HRM. Upgrading Manpower: HRM is basically concerned with the upgrading of manpower working in an organization. 12 .

which is a valuable asset of a business unit. Team spirit facilitates orderly growth of the organization in the right direction. elimination of conflicts of different types and creation of orderly atmosphere in the whole organization. For this. skilled and efficient manpower. (5). Team Spirit: HRM is basically for developing team spirit in the whole organization. which includes effective communication within the organization. (4). HRM programmes create matured. Organizational Development: HRM includes organizational development. They are given higher positions with monetary benefits. departments and levels of management are properly integrated.Learning and career development raise the capacity of employees to work at highest levels. coordination of different activities. (6). Huge spending by Management: All companies invest huge money on HRM activities but such expenditure is absolutely essential for survival in the present competitive business world. 13 .

Employees occasionally must be terminated for breaking rules of failing to perform adequately. (8). Wide Scope: The scope of HRM programmes is very vast.(7). It is multi-disciplinary in character. Termination of Employment: Termination is an unpleasant part of any manager’s job. Continuous Activity: HRM is rightly treated as a continuous activity due to new developments taking place regularly in the business world. Training and guidance are given on different aspects of business management to enable managers to deal with complex managerial problems and challenges. on the job and off the job training programmes are introduced from time-to-time. (9). 14 . For this.

An enterprise can face market competition only by 15 . skilled and matured manpower required by an enterprise for the present and future period. To develop strength for survival: HRM programmes are necessary for survival in the present competitive marketing environment. This avoids managerial obsolescence. efficient.NEED AND IMPORTANCE OF HUMAN RESOURCE MANAGEMENT: (1). (3). To create stable labour force: HRM programmes are needed in order to create stable. To update the quality of manpower: HRM activities are needed for updating the quality of manpower as per the growing and changing needs of an enterprise. Even the vacancies at higher levels can be filled in internally due to HRM programmes as they provide training and opportunities of selfdevelopment to employees working at lower levels. (2).

All this is possible through HRM. 16 . reducing costs and avoiding wastages. for their self-development. refresher courses. career guidance. HRM programmes are needed to fulfill self-development and career development of employees.improvimg quality. (5). Employees demend. training facilities. supervisors leave the job or retire due to age factor. managers. (6). To meet future manpower needs: HRM is needed to meet the future manpower needs of the organization. etc. To face challenges of technological changes: Technological changes are taking place rapidly in every area of business. promotions and transfers. introduction of new technology. Executives. computers. HRM programmes are needed in order to absorb technological changes taking place with speed. In fact. automation. will not be possible unless training is provided to the manpower. (4). etc. To satisfy the demand of self-development of employees: HRM is needed to meet the needs of employees in regard to selfdevelopment and career development aspirations.

It provides skilled manpower for this purpose. Attention should be given to HRM much before the introduction of expansion programme. (7). 17 . To utilize production capacity fully: HRM is needed in order to use the available production capacity to the optimum level. (8).Competent juniors must take their positions. To facilitate expansion and diversification: HRM activities are needed to meet the manpower requirements resulting from expansion and diversification programmes undertaken at the enterprise level. HRM is needed in order to keep ready a team of competent managers as a second line of defence.

SCOPE OF HUMAN RESOURCE MANAGEMENT: (1) Training: Training is an essential element of HRM. Potential Appraisal: It relates to the study of capabilities of employees. The purpose of performance appraisal is to study critically the performance of an employee and to guide him to improve his performance. (2). It is useful for proper placement and career development of employees. An employee is told about his strengths and weaknesses and assistance is given to remove weaknesses and make the plus points more strong. (3). It is useful for self-development and career development. Performance Appraisal: Performance appraisal is an important area of HRM. Potential appraisal of 18 . Training is possible by different methods. This technique is useful for building a team of capable employees and is also used for their selfdevelopment. This develops skills and capacity to work at higher levels and positions.

They should be motivated for self-development. Career development is an integral part of HRM. Employees welfare: Employees welfare is within the scope of HRM. Career planning and development: Under HRM employees should be given guidance for their selfdevelopment and career development. (5). subsidized canteen. Welfare facilities are useful for creating efficient and satisfied labour force. Superiors are supposed to provide information and guidance to their juniors in this regard. 19 . free transport and medical insurance. (4). Such facilities support training and other measures introduced for HRM.employees is useful for developing their special qualities. Employees welfare include the provision of medical and recreation facilities. The opportunities likely to develop in the organization should be brought to their notice. which can be used fruitfully along with the expansion and diversification of activities of the company. which is useful to the organization in the long run. Potential appraisal is possible by the superior with the help of different methods. Such facilities raise the morale of employees.

A forward looking policy on employee benefits like job security. low productivity or industrial disputes. It also keeps plans ready to deal with problems like absenteeism. (7). Quality of work life: Quality of work life depends on sound relations between employers and employees. Organizational development: HRM aims at providing conflict-free operations throughout the organization. participative management and monetary and non-monetary rewards will go a long way in improving the quality of work life helps employees to strike an identity with the organization. It may be in the form of promotion. Reward is an appreciation of good work. 20 . turnover. higher salary or higher status. to grow and to develop new qualities. Rewards and incentives motivate employees and raise their morale.(6). attractive pay. Rewards and incentives: HRM includes provision of rewards and incentives to employees to encourage them to learn. skills and experiences which will be useful in the near future. (8).

Human resource information system: Such system acts as an information bank and facilities human resource planning and development in a proper manner. 21 .(9). Every organization has to introduce such system for ready reference to HRM matters. Updating of such information is also essential. It facilitates quick decision making in regard to HRM.

HUMAN RESOURCE MANAGEMENT SYSTEMS:

Human Resource Management Systems (HRMS, EHRMS), Human Resource Information Systems (HRIS), HR Technology or also called HR modules, shape an intersection in between human resource management and information technology. It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field, whereas the planning and programming of data processing systems evolved into standardised routines and packages of enterprise resource planning (ERP) software. On the whole, these ERP systems have their origin on software that integrates information from different applications into one universal database. The linkage of its financial and human resource modules through one database is the most important distinction to the individually and proprietary developed predecessors, which makes this software application both rigid and flexible. The HR function's reality All in all, the HR function is still to a large degree administrative and common to all organisations. To varying degrees, most organisations have formalised selection, evaluation, and payroll processes. Efficient and effective management of the "Human Capital" Pool (HCP) has become an increasingly imperative and complex activity to all HR professionals. The HR function consists of tracking innumerable data points on each employee, from personal histories, data, skills, capabilities, experiences to payroll records. To reduce the manual workload of these administrative activities,
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organisations began to electronically automate many of these processes by introducing innovative HRMS/HCM technology. Due to complexity in programming, capabilities and limited technical resources, HR executives rely on internal or external IT professionals to develop and maintain their Human Resource Management Systems (HRMS). Before the "client-server" architecture evolved in the late 1980s, every single HR automation process came largely in form of mainframe computers that could handle large amounts of data transactions. In consequence of the high capital investment necessary to purchase or program proprietary software, these internally developed HRMS were limited to medium to large organisations being able to afford internal IT capabilities. The advent of client-server HRMS authorised HR executives for the first time to take responsibility and ownership of their systems. These client-server HRMS are characteristically developed around four principal areas of HR functionalities: 1) "payroll", 2) time and labour management 3) benefits administration and 4) HR management.

The payroll model: automates the pay process by gathering data on employee time and attendance, calculating various deductions and taxes, and generating periodic paycheques and employee tax reports. Data is generally fed from the human resources and time keeping modules to calculate automatic deposit and manual cheque writing capabilities. Sophisticated HCM systems can set up accounts payable transactions from employee deduction or produce garnishment cheques. The payroll module sends accounting information to the general ledger for posting subsequent to a pay cycle.
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The time and labour management module: applies new technology and methods (time collection devices) to cost effectively gather and evaluate employee time/work information. The most advanced modules provide broad flexibility in data collection methods, as well as labour distribution capabilities and data analysis features. This module is a key ingredient to establish organisational cost accounting capabilities.

The benefit administration model: permits HR professionals to easily administer and track employee participation in benefits programs ranging from healthcare provider, insurance policy, and pension plan to profit sharing or stock option plans.

The HR management module: is a component covering all other HR aspects from application to retirement. The system records basic demographic and address data, selection, training and development, capabilities and skills management, compensation planning records and other related activities. Leading edge systems provide the ability to "read" applications and enter relevant data to applicable database fields, notify employers and provide position management and position control. Typically, HRMS/HCM technology replaces the four core HR activities by streamlining them electronically; 1) payroll, 2) time and labour management, 3) benefit administration and 4) HR management. While using the internet

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25 . such as travel reimbursement. managers and HR professionals alike. personnel data change. leading to greater HR and organisational efficiency. which lead to business innovation.or corporate intranet as a communication and workflow vehicle. Through employee or manager self-service (ESS or MSS). authorise access to information for employees (manager's side) are being individually handled and permit to reduce HR transaction time. enrolment in training classes (employee side) and to instruct a personnel action. benefits enrolment. HR professionals can spend fewer resources in managing administrative HR activities and can apply freed time and resources to concentrate on strategic HR issues. HR activities shift away from paper based processes to using self-service functionalities that benefit employees. Costly and time consuming HR administrative tasks. the HRMS/HCM technology can convert these into web-based HRMS components of the ERP system and permit to reduce transaction costs. Consequently. leading to HR and organisational effectiveness.

THE TWO THEORIES WHICH SUPPORT HUMAN RESOURCE MANAGEMENT. According to this theory employees will show little ambition without an enticing incentive program and will avoid responsibility whenever they can. organizational behavior. Theory X In this theory management assumes employees are inherently lazy and will avoid work if they can. They describe two very different attitudes toward workforce motivation. According to McGregor. 26 . The result of this line of thought is that Theory X managers naturally adopt a more authoritarian style based on the threat of punishment. in that they take a rather pessimistic view of their employees. Because of this workers need to be closely supervised and comprehensive systems of controls developed. most managers (in the 1960s) tend to subscribe to Theory X. THEORY X AND THEORY Y Theory X and Theory Y are theories of human motivation developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s that have been used in human resource management. An hierarchical structure is needed with narrow span of control at each level. McGregor felt that companies followed either one or the other approach. that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee. and organizational development. A Theory X manager believes that his or her employees do not really want to work.

selfmotivated. There is an opportunity for greater productivity by giving employees the freedom to be their best. and exercise self-control and self-direction. He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs. A Theory Y manager believes that. It is believed that employees enjoy their mental and physical work activities. anxious to accept greater responsibility. McGregor and Maslow's hierarchy McGregor's work was based on Maslow's_hierarchy_of_needs. A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing their potential. most people will want to do well at work and that there is a pool of unused creativity in the workforce. given the right conditions. It is also believed that employees have the desire to be imaginative and creative in their jobs if they are given a chance.Theory Y In this theory management assumes employees are ambitious. 27 . He suggested that management could use either set of needs to motivate employees but that better results could be obtained by meeting the Theory Y needs. They believe that the satisfaction of doing a good job is a strong motivation in and of itself.

never asks Does not participate Does not team-build Unconcerned about staff welfare. edicts Issues threats to make people follow instructions Demands. sometimes to the point of self-destruction One-way communicator Poor listener Fundamentally insecure and possibly neurotic Anti-social vengeful and recriminatory Does not thank or praise Withholds rewards. or morale Proud. to the exclusion of everything else Intolerant Issues deadlines and ultimatums Distant and detached Aloof and arrogant Elitist Short temper Shouts Issues instructions.Characteristics of the X Theory Manager • Results-driven and deadline-driven. and suppresses pay and remunerations levels Scrutinises expenditure to the point of false economy Seeks culprits for failures or shortfalls 28 • • • • • • • • • • • • • • • • • • • • • • • . directions.

so cut out the incidentals.• Seeks to apportion blame instead of focusing on learning from the experience and preventing recurrence Does not invite or welcome suggestions Takes criticism badly and likely to retaliate if from below or peer group Poor at proper delegating . 29 . Avoiding confrontation (unless you are genuinely being bullied) and delivering results are the key tactics. Theory X managers (or indeed theory Y managers displaying theory X behaviour) are primarily results oriented .so orientate your own discussions and dealings with them around results .some extreme X theory managers can be extremely unpleasant .ie what you can deliver and when. especially reporting on results and activities.but there are ways of managing these people upwards. Theory X managers are facts and figures oriented . be able to measure and substantiate anything you say and do for them.but believes they delegate well Thinks giving orders is delegating Holds on to responsibility but shifts accountability to subordinates Relatively unconcerned with investing in anything to gain future improvements Unhappy • • • • • • • Managing an X Theory boss Working for an X Theory boss isn't easy .

which amounts to more freedom. the less they'll feel the need to do it for you. be seen to be self-starting. you'll increasingly be given more leeway on how you go about the tasks. provided you deliver the 'what' and 'when'.Theory X managers generally don't understand or have an interest in the human issues. but constructively .the more the X theory manager sees you are managing yourself and producing results. Be aware also that many X theory managers are forced to be X theory by the short-term demands of the organisation and their own 30 . and check that it's okay to 'streamline the process' or 'get things done more efficiently' if the chance arises . And this is really the essence of managing upwards X theory managers . be constructive as to how the overall aim can be achieved in a way that you know you can deliver. Stand up for yourself.they'll normally agree to this. which effectively gives you control over the 'how'. so don't try to appeal to their sense of humanity or morality. Set your own objectives to meet their organisational aims and agree these with the managers. state the reasons why it's not realistic. but be very sure of your ground. Never threaten or go over their heads if you are dissatisfied or you'll be in big trouble afterwards and life will be a lot more difficult. Always deliver your commitments and promises. self-motivating. simply confirm the end-result that is required. then don't question the process.avoid confrontation. If an X theory boss tells you how to do things in ways that are not comfortable or right for you. If you are given an unrealistic task and/or deadline.if you consistently deliver. selfdisciplined and well-organised .focus and get agreement on the results and deadlines . don't be negative.

but McGregor's X-Y Theory remains a guiding principle of positive approaches to management. 31 . They are thought to express extreme positions that are not realistic.superiors . Criticisms Today the theories are seldom used. and to improving organizational culture. Recent studies have questioned the rigidity of the model.an X theory manager is usually someone with their own problems. so try not to give them any more. Most employees fall somewhere in between these extremes and the theories are of little help in everyday human resource management decisions. However Theory X and Theory Y are still important terms in the field of management and motivation. to organizational development.

The evolution of banking dates back to the earliest writing. which refers to an out of business bank.HUMAN RESOURCE MANAGEMENT IN BANKING: What is a Bank? The word bank is derived from the Italian banca. comprising mostly the 32 . Banking licenses are granted by financial supervision authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. Currently the term bank is generally understood as an institution that holds a banking license. having its bench physically broken. or big open rooms. There are also financial institutions that provide certain banking services without meeting the legal definition of a bank. The terms bankrupt and "broke" are similarly derived from banca rotta. The essential function of a bank is to provide services related to the storing of deposits and the extending of credit. which is derived from German language and means bench. Banks are a subset of the financial services industry. with each lender working from his own bench or table. a so called non-bank. Money lenders in Northern Italy originally did business in open areas. Human resource management (HRM) has long been overlooked in the corporate sector in the country where a small section. and continues in the present where a bank is a financial institution that provides banking and other financial services.

With the growing realization of proper HRM in the corporate sector. This idea has been realized by top 33 . it has grown into an important activity. Now the head of HRM is an important member of the senior teams of any thriving business. financial institutions and specialized banks are operating with various products and activities. Thus even the high automation would require proper man behind the machine to make things happen. Corporate goals are translated into viable realities and profits only with human element who play their due role in achieving the desired results. The banking sector has grown from a few institutions primarily involved in deposit acceptance and trade finance into a complex multi player markets where large number of commercial banks.multi-national companies was practising the same. 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. Almost every bank and financial institution is involved in various functions in a day's job and thus requires a highly effective team and appropriate manpower to run the show. Although the idea is new for many local businesses where entrepreneurs are at the beginning of the learning curve yet in reality the theme is getting support from the organized entrepreneurs.

equipment and appliances. banking requires a multi layer manpower for its various requirements of professionals and support staff. Personnel departments were primarily engaged in approval of leaves. more emphasis on consumer and house finance and personal loans. 34 . pieces of furniture. banking has turned itself into a more market-based business where banks have expanded their reach more to customers' door steps in a big way making banking more practical. Like many other organized sectors. HRM banks like other institutions have been handling this sensitive activity through respective personnel departments. etc. With liberalization of activities within the banking sector.g. 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. Recruitment was a routine function and was done in a mechanical way to hire people with specific educational background irrespective of their real value to the institution. This means human resources were managed like other physical assets e. conducting disciplinary enquiries and termination from service. for example. This has further highlighted the need for proper deployment of man-power to run banks efficiently. handling of staff loans.managements in progressive banks. issuance of show cause. calculators. For many years.

Success stories of large banking companies have been evident of the fact that HRM is quite different from management of physical assets. Managing this educated. their brains can be controlled to think beyond the current situation of employment. On the one hand it is the assigned duty and task they are to perform and for which they are paid by their employer. skillful and trustworthy work force is not an easy job. Human brain has its own peculiar chemistry. Its strong sensory and decision-making capacity has to be greatly emphasized by the employers. By no means. on the other they think of their long run goals and objectives. A few of the current challenges faced by the banking industry in terms of human resource management may be the following: 35 . The work force constituting all levels of employees are constantly thinking in many dimensions.

work for some time and then leave for better prospects. Others are those who are keenly picked-up. attract a large number of candidates against advertised vacancies in media creating a large data base 36 . trained and are some how retained to be developed as future management within the bank. Higher the professional value of the vacancy. tougher is the search.CHALLENGES FACED BY THE BANKING INDUSTRY IN TERMS OF HUMAN RESOURCE MANAGEMENT: (1). Ones who are outstanding professionals with high job hopping attitude these are those who come in . Banking jobs being apparently lucrative for many. Identifying the right stuff followed by negotiation is the element which makes the job tough for the employer. Management trainees are a growing popular phenomenon where freshly qualified business graduates are engaged by banks and a certain percentage of these well equipped professionals stay back within the organization to grow into the footsteps of senior managers. Banks are keenly interested to fill up two types of breads of professionals. Its just sitting by the river and waiting for the right fish to catch. Effective work force: A time-consuming and hectic job is to hunt the right talent.

37 .management problem. The situation is not the same anymore. This has been facilitated by specialised hiring agencies who may take up the job of hiring in case of large number of vacancies. pension. Right people: The most difficult agenda of HRM across the banking sector is to retain the right people. Sudden growth of retail banking and other services has put pressure on HR mangers in banks to engage more professionals within shorter span of time thereby attracting manpower in other banks on attractive packages has made the job market very competing. (3). Compensation: How much to pay to the right employee and how much to the outstanding performer. salary slabs. A bank in a normal course invests time and money to hire and train the appropriate work force for its own operations. etc. A basic pay with traditional formulas of linkage with medical and other facilities has no soothing effect today. An increment of Rs500-800 per annum is no more a source of attraction for a professional anymore. This ready-made force is often identified and subsequently picked-up on better terms by others. gratuity. Banks have traditionally followed pay scales with predetermined increments. (2). bonuses and time-based fringe benefits like car and house advance.

(4). Job satisfaction: Everybody in the bank wants to work in the preferential department. A freshly hired professional requires a brand new car or car loan on resuming office quite contrary to his previous breed of bankers who would wait for the job seniority to qualify for a car loan. city of his own choice and boss of his liking. There are examples to this.A promise of future growth. Although hiring is normally based on regional requirement matching the area of activity with that of employee's nativity yet other elements like appointment in the department of choice and preference makes the job of HR manager quite challenging. What the HR manger cannot afford is the dissatisfied employee who not 38 . A waiting period of 3-4 years in each cadre haunts the incumbents who strongly believe in immediate compensation. Thanks to the car financing modalities car is no more a fantasy item any more. learning culture and corporate loyalty is out of dictionary and does not mean anything to this energetic and competent performer today. An administrative deviation from any of these results in lowered job satisfaction. preferential location.

39 . etc. dinners. conferences. This is the way employees create a feeling of belongingness. reunions. (5). repeat get-togethers. Smart banks have realized this need and have taken steps to keep their work force motivated through proper encouragement like man of the month awards. company sponsored travel.only disrupts the smooth working himself but also spreads the negativity to others by his de-motivated attitude. sports events. Human beings even if satisfied of material well being need to be appraised and encouraged constantly. Morale boosting: What has long been overlooked is the morale boosting of the employees by the organizations.

Human resources management. This lecture was held in NBS and it was organized by the Academy of Banking and Finance. Tucakovic presented his experience in managing human resources in the 5-star hotel. Milos Tucakovic. Milos Tucakovic. pointed out that the specific advantage of his hotel’s forming part of a world chain of luxury hotels provides an opportunity for exchanging first-rate trainers and the simple option of professional training 40 . Adaptation of world standards to domestic conditions and local culture. held in NBS and organized by Academy of Banking and Finance. the Head of the Personnel and Training Division at the Hyatt Regency Hotel in Belgrade. 51 percent owned by the famous Pritzker family and 49 percent owned by domestic shareholders. main corporate culture values and personnel quality standards required in this prestigious hotel were only some of the issues addressed by Milos Tucakovic in his lecture. HR Manager.AN EXTRACT FROM A LECTURE ORGANIZED BY THE ACADEMY OF BANKING AND FINANCE Following is an extract from a lecture given by Milos Tucakovic who is the Head of the Personnel and Training Division at the Hyatt Regency Hotel in Belgrade. was the guest lecturer at the round table of HR managers in the banking sector. raised some new questions for banking sector’s HR division managers who displayed interest in evaluating other managers’ experiences and possibly applying them in their future work. presented from the viewpoint of top-level international hotel industry. to HR division managers from Serbia’s commercial banks and the central bank. Mr.

commitment to clients/accuracy in work. hence. The management of the Hyatt Regency Belgrade Hotel tends to recruit its management personnel from the ranks of its own employees whose characteristics. managers are required to have the following skills: ability to implement changes. the program of 41 . hygiene and general work safety standards. honesty. collegiality and punctuality. Since the Hyatt Regency Belgrade was one of the first companies in this region to invest in personnel selection and training in the modern sense. organize work. to plan and view things in the long-term. selling skills.” Milos Tucakovic pointed out. “Main characteristics required in all employees are energy. In addition to the foregoing. communicativeness.abroad. telephone communication skills. adaptability. in addition to various forms of training. all employees attend a compulsory training programme in the course of which they become acquainted with the company and the hotel. team spirit. have the ability to solve problems and be acquainted with the company procedures. work. develop their staff. to motivate others. Aside from divisional training. complaint resolution. intended for facilitating the performance of specific tasks. The management and the owners of the Hyatt Regency Belgrade Hotel believe that training is a type of employee benefit. provision of first-rate services. it was interesting to learn about the characteristics required and developed in its personnel. be acquainted with the market and the business environment. performance and professional training demonstrate that they are ready to accept new challenges. to make decisions. the hotel also offers “Hyattrack”.

which practically means the unannounced visit by a “phantom” guest. but with a view to providing an equal opportunity for all employees. It should also be noted that commendations by guests are taken into account when evaluating employees. is a person from the company who conducts an unannounced check of compliance with standards. as this visitor is called in the Hyatt. and the other one including back-office personnel whose work is also crucial for the proper functioning of the system. who are in direct contact with guests. The high level of services and business practice for which the Hyatt chain of hotels is recognizable worldwide is also maintained by means of the “Mystery Guest Audit” institution. 42 . whose identity and time of coming is not known. This guest. there are always two employee recognition lists: one encompassing front-office personnel.independent development of managers requiring the candidate to exercise self-initiative.

communication skills and specific banking knowledge. commercial banks and the Association of Serbian Banks. The topics to be focused on within banking education would comprise basics of international banking and finance. The HR Managers were welcomed by Mr. on adequate computer literacy. special attention would be devoted to retail. and Aleksandara Lujic and Jasmina Milosevic from the NBS.The First Roundtable of Commercial Banks’ HR Managers The newly founded “Academy of Banking and Finance” has organized the first in the series of planned round tables for HR managers working in the banking industry. would particularly assist in creating a joint strategy for the development of human resources in this field. relations with international institutions and modern banking systems. The meeting took place in the NBS Villa in Topcider on 16 September with representatives of 28 commercial banks. Wolfgang Rautenberg. Mr. in the 43 . as well as mortgages and insurance business. corporate and investment banking. Besides satisfaction of eventually meeting their colleagues from other banks. In addition. Senior Adviser in the NBS. HR managers also expressed interest in exchange of experience. and would also facilitate daily work for the managers taking care of the employees in the banking and finance industry. as a joint venture of the National Bank. Rautenberg said that the Academy. Mr. Rautenberg explained that the training to be offered to commercial banks would primarily insist on the English language as the language of banking. interdependencies between the central bank and commercial banks.

e. efforts and availabilities and about motivation and stimulation systems in business environment. The need for general managers to increase their awareness of the significance of HR operations and investments in human capital was singled out as a vital aspect of the education. “It is up to you to change the image of the HR sector into what it really is – and that is much more than just administration. 44 . together with acquiring international presentation skills. i. choice of new professionals for the bank. especially with respect to managing people and organizations. They also stressed the need to find out more about evaluating staff performance. Mr. but also the most desirable ways of parting with employees who failed to meet the expectations or had to be made redundant.manner of organizing human resources and in education of employees in the banking industry. Wolfgang Rautenberg underlined in his address to the commercial banks’ HR managers. as it is often mistakenly thought” Mr. Rautenberg also emphasized the importance of training for managers. The other topics of their concern included the most reliable headhunting criteria.

The Second Roundtable of Commercial Banks’ HR Managers The second roundtable of banking sector human resources managers. was held today by the Academy of Banking and Finance in the NBS Villa in Topcider. underestimating the significance of human resources. In this sense. Professor at the Faculty of Economics. gave a presentation on “Contemporary Human Resources Management”. “To manage human resources means to systematically attract.” Professor Janicijevic pointed out in the course of the roundtable discussion. place and role of the human resources management function within banks. 45 . stressing the importance of training managers in contemporary management in this field. Nebojsa Janicijevic. In the course of the discussion. the participants in the roundtable emphasized that the fundamental problem they face in their organizations on a daily basis is how to retain young qualified personnel. use and develop personnel with a view to realizing the objectives of the organization. as well as to prevent the reduction of work to a mere administering of working relations and transferring responsibility to the organizational unit. organization. attended by representatives of commercial banks. Professor Janicijevic pointed out that a basic precondition for an efficient human resources management in banks is to correct the misconceptions of bank’s management. discussing the importance.

Every effort was made to stay in telephone contact with all participants. Projects & Diversity Department. These workshops were augmented. The pilot included 18 mentors (12 males. Three sets of evaluation questionnaires (at six weeks. expressed at focus groups of managers and executive managers. ARTICLE WRITTEN BY SANDRA O’NEILL. Westpac's program was feedback-intensive. There was an overwhelming response to circulation of a mentoring booklet and invitation. by a "get acquainted" breakfast. At the July meeting of the Making Mentoring Connections Network. 8 females). to examine career progression and to retain high potential people resources (particularly for female staff) within the company. The breakfast. and their comments and input acted upon. mid-point and project conclusion) were also used. Bio-data sheets were issued and participants took part in mentoring skills workshops. 6 females) and 14 mentorees (6 males. a case study of the pilot mentoring program in the Westpac Banking Corporation was presented by Niki Kesoglou. Human Resource Manager of Westpac's Policy. both from people wanting to be mentors and also from hopeful mentorees. and also a midpoint follow-up workshop with both mentors and mentorees. but they were given assurances they would be considered for involvement in such a program when it goes company-wide. provided opportunities for checking reactions and progress. Westpac's mentoring was born out of a need.WESTPAC BANKING CORPORATION.ARTICLE ON CASE STUDY. The limited. trial nature of the pilot meant that some people had to be turned away. On-going verbal and written guidance was offered by the project manager and coordinator. two weeks later. 46 .

Initial career progression indications are positive with a rise noted in the number of internal job applications by participants. "I already have communication skills ." Many satisfying outcomes of the pilot program have been observed.Westpac encountered some unwillingness on the part of some mentors to attend training. Although the Westpac culture generally exhibits little gender bias. Their attitude seemed to be. 47 .that's why I'm a mentor. Mentoring relationships which cross functional areas have assisted in breaking down barriers. and this will need to be tracked over time. it was agreed that the program helped improve the visibility of women in this particular workplace.

based on previous practices and existing rules. and that they do not necessarily trust their own numbers. banks would gain control of the most profitable customers. a recent Gallup Poll (April 14 to 16. customer segmentation and the resulting targeted marketing campaigns. Interestingly enough. and varying tools that individual bank managers use to react to the marketplace. 2003) finds that 83 percent of Americans still visited their branch bank at 48 . The traditional measures of performance that branch management has relied upon in the past are becoming invalid since they are indicators of an obsolete environment. and the adoption of end-to-end processing in new business to simplify sales transactions have influenced retail management. and management practices. segmentation. The important issues taken from this discussion are that retail management is searching for some solid ground in making management decisions. Projections showed that these factors would lessen the reliance on the traditional branch system to support and deliver retail performance.ROLE OF BANKS The key performance numbers that retail bank management rely on to run their franchise effectively are shifting along with wholesale changes in technology. a younger more electronic-minded customer base. In cases where solid management information is not available. The thought was that by deflecting high-value customers to private bankers and low-value service customers to contact centers. shifting resources. banks manage primarily by experience. In recent years. shifts such as the development of alternative delivery channels. sales strategy. delivery channel choices. Managing branch effectiveness has been an elusive target for many banks due to changing objectives.

have yet to significantly impact (deflect) customer behaviors. The results provide an excellent starting point in establishing directional shifts. depending on 49 . service offerings. The primary responsibility of retail bank managers is to meet the service expectations of customers. systems. The efficiency ratio is a common banking ratio which measures the cost to generate a dollar of revenue.1 percent for the top-tier performers and 47. an examination of what is changing in the industry to gain competitive perspective is valuable. The retail branch Efficiency Ratio is currently 27. The Robert E. The 2003 study includes data from 36 banks. While each bank's key management numbers are unique to its conditions. and marketing programs that the bank has chosen to employ. Nolan Company conducts an annual Efficiency Ratio Benchmarking Study. but we must comment that a high efficiency ratio by itself for any given bank should not be viewed as an indictment of the retail management of that bank.least once a month on average over the past year. We will examine the drivers beneath the key numbers to shed some light on what the new numbers mean. The differential is significant between the top performers and the average banks. TECHNOLOGY Banks are taking a variety of approaches in implementing technology to make improvements in retail delivery. incentives. policies. The study examines differences between high-performing banks and average banks by each line of business. thrifts and credit unions with assets between $ 1 and $5 billion. simply. and their approach to customer segments in general. The methods differ. It is often. a function of the work processes. Bank changes to products.5 percent for the average of all 36 participants. It is important to understand the essential factors that make a difference and try to put them into perspective.

Individual system owners most often do not want to complicate the decision to acquire and install "their system" by including total integration of all data requirements in the process resulting in largely disconnected technological environments. Most banks do not have an integrated technology solution. In those cases. Banks have opted to design the technology implementation process around meeting the customers' needs and limiting the work effort required. Branch administration may decide on the document preparation system. Vendors have become very effective in making this case. Technology vendors prefer to install their software in the easiest and most operationally effective way possible. the loan accounting system is often in the hands of loan operations and the credit division usually makes the credit system decisions. Often in isolation. Retail banks sell 65 to 80 percent of their new products to existing customers. technology is not often applied to simple processes that could reduce errors. The challenge has been to accomplish straight-through processing in order to eliminate potential errors and work duplication. the new business 50 . The contact management system and the CRM are often the purview of marketing. Further. the "owners" of an element of the process make the system choices for the pieces of technology they require. the technology decision starts with a traditional approach to define business requirements leading to software selection and then implementation. and see little value in starting with process redesign. Some banks are convinced that the software developers have had to consider the effectiveness issues in their design. For example. but sales and marketing management develop it. Human Resources will drive the incentive system.the bank management's mindset toward the purpose of the software and its valued place in the new business or service delivery processes. cost and time. Keeping this in full view.

TELLER EFFECTIVENESS Industry data is best used as directional information. Many banks fired tellers for being out of balance. but. and type of organization. The conclusion is that performance is more highly correlated to the process design and integration of data systems. Nolan Company reveal that many banks have this objective. In the 1980s. including triple counting the cash back to customers. Teller effectiveness is an area where banks have gone through cycles over the past 20 years. very few have accomplished the connectivity in an efficient or effective manner. without noting any significance related to performance and system use. The study examined top-tier performers by line of business. Backing referred to writing the exact currencies 51 . and better quality of data elements. the operational focus was on security factors. This advantage will certainly impact the amount of work that a CSR (Customer Service Representative) is able to complete on a comparative basis. An interesting discovery from the most recent Nolan Efficiency Ratio Benchmarking Study (analysis completed july 2003) reveals that there is no correlation between a particular software system and higher retail performance. to date. not as a true measure of what individual banks need to achieve to realize high performance. asset size. Independent surveys conducted by the Robert E.process should allow the existing core systems to populate the appropriate customer data whenever a customer opens a new product or service. The few banks that are integrated have lower time to close. The trend in technology is straight-through processing or electronic integration of all the required data elements and support systems. lower cost. including balancing. Those banks designed their transactions to include redundant steps to help measure and track the balancing process. and a practice called "backing" deposit slips and/or withdrawal slips.

The data demonstrates that high-performing banks handle 13 percent more transactions per month than average banks. The relative cost per transaction is 35 percent higher in the average banks than the highperforming banks. a directional view is required. five 10s. They conclude that this work is not cost beneficial. ten 20s. Each bank places differing process and security time burdens on the teller position. Top-tier performing banks examined the value of each element of transaction processing and found that the work expended in triple counting and backing added 20 percent or more to the transaction time. The following statistics from the 2003 Nolan Efficiency Ratio Benchmarking Study show the range of teller performance from high-performing banks to average performers. and. the opportunity to perform at a high rate related to staffing and scheduling.transferred on the back of the slip to potentially simplify the balancing process later in the day (for example. The audit department often imposed security into the processing steps without regard to timeliness and the service impact on customers. but other conditions can directly influence transaction performance. In these banks. 00). Transaction effectiveness is a significant factor. the customer base being serviced. the importance was on transaction accuracy. the actual teller performance. communications. the teller turnover rate. the sales referral policies and requirements. Although banks need these statistics to look at teller performance. 52 . the use of part-time tellers and teller pools that can support multiple branches due to illnesses and vacations. two 5s and five Is = $265. Teller performance variables can include: the impact on training.

They train individual transactions in a uniform and controlled way and then. Recruiting appropriate personnel from the branch location often helps in keeping tellers with the bank longer. Some banks institute a three-week formal training process where tellers learn about the bank's commitment to customers and how it supports the bank's strategy. Within the branch. The teller turnover rate is generally lower in a down economy. where a teller at either end of the teller line will not have as many 53 . Some banks provide no formal training but have tellers work with a "teller trainer" in the branch to learn the policies. assign them a branch teller monitor to assist in getting started. Not many banks are equipped to measure the actual teller performance or even relative performance within a branch or from branch to branch. The national average is 33 to 35 percent. ranging from the mid teens in some banks to over 100 percent in others. procedures and systems. Banks that seem to have lower rates of turnover often have practices in place to reward high performance. One of the reasons is that teller opportunities to perform are not equal. In these cases. the teller at the head of the queue will service every customer in slow periods. A driveup teller will usually handle more transactions per hour due to handling two customers at a time and a limit on transaction types. but. the trainer will influence the procedure with their individual biases and not necessarily the bank's standard practices.Wide variances exist in the time and effort banks put into teller training. The annualized teller turnover rate is typically one of the highest areas in a bank. The cost of effective training appears high on the surface. Effective training can cut errors and help to ensure that the speed of processing is elevated through a confident and competent staff. when management considers that more tellers interact with customers daily than any other position in the bank. it follows that service and transaction training is essential to high performance. in week four.

GMT. The teller position is a "customer demand" work environment and while management sometimes uses fill-in work to help the utilization. as well as differences due to the actual performance of standard work. it typically comes down to effective staffing and scheduling.opportunities. The flexibility of the model used is only one element in staffing and scheduling success. Hundreds of teller staffing and scheduling models are available in the marketplace. university. and Exometrics all have the required queuing models and the flexibility to place staffing and scheduling in the hands of retail management. High turnover branches will have lower real performance due to more tellers who are in a learning curve. Differences in work are attributable to a varying mix of transaction types due to customer base. shopping mall. and potential use of cash dispensers in some locations. possibly differing cashing limits for tellers due to experience or branch characteristics. the bank would need sophisticated modeling to calculate customer arrivals during the tellers' working hours along with customers in line to determine teller opportunity. Banks must factor in tailored work standards and develop scenarios that reflect the conditions of each branch location as close as possible to reality. To analyze real teller performance. Banks must account for all of these differences. Some banks tailor standards to location-type such as urban. Demos. The standards and the work measured must accurately reflect the branch conditions as believed by branch management and then used to develop schedules. rural. and with a bank turnover rate of 35 percent. etc. that can lead to lower performance in selected branches. physical location of bank checks and encoding equipment. all three have the modeling capabilities and report generation necessary to be effective with a diverse set of branch locations. Banks 54 . but currently there are three that have the features necessary to model both teller and CSR positions effectively. The learning curve for tellers is typically three months.

Management may decide to utilize three full-time tellers to allow for coverage during peaks and deliver service properly. The reported results from the recent Nolan Efficiency Ratio Benchmarking Study show that top-performing banks' branch personnel are processing 13 percent more transactions per month than the average banks and are supporting 39 percent more deposit accounts.5 tellers per hour in remote locations. Incentive systems can direct tellers to concentrate on referrals. it is very difficult to evaluate the performance of tellers since management must staff to volume and allow for breaks and coverage. retail banking has experienced a significant shift to transform practices to primarily a sales orientation. True performance is difficult to measure without a tool to properly balance the customer demand to the service staff hours. The factors that prevent banks from performing at the higher level relate to process efficiency. This decision places the teller in a position where they cannot perform on the same level as a teller in a branch where customer demand is high and relatively constant.can adjust the staffing model for effective service in locations with high turnover until the time that problem is resolved. Often a branch requires the equivalent of between 1. which may also slow down the transaction processing and resultant service levels. Teller incentives are largely weighted on paying for closed referrals over and above any measure for service and productivity. 55 . Many banks have trained their teller staff in how and what to refer with an expected volume of two closed referrals per day. In low-volume locations. In the past six years. Staff modeling is a dynamic process and the tools used should be dynamic as well. The incentive system should not penalize them or it will force even higher turnover. This shift in many institutions has contributed to difficulty in making any comparisons.5 and 2.

This is where the significance of work process has the greatest impact. Performance is a function of how banks manage and structure time. Line of business performance is determined by how people. 18 percent on fee and non-fee services. The primary activities we see CSRs handling are sales/new business. while other banks see marketing as having a primary role in driving potential customers into the branch.policy. 8 percent on customer problem resolution. In any event. branch support. and administration. Independent studies conducted by the Robert E. see their CSRs spending more time in problem resolution (25 percent) and less time (30 percent) in actual sales and account opening. CSR EFFECTIVENESS There are a variety of issues that impact the performance of Customer Service Representatives (CSRs) in the current environment. deployment of staff through scheduling and staffing. on the other hand. and 19 percent on administration and other. process and technology are deployed. Nolan Company show that high-performing banks have a work distribution of 55 percent on sales and account opening. Some banks will establish an objective for outside sales asking CSRs to have involvement in community functions in the sales effort. A factor influencing this difference in performance is that average performing bank CSRs spend more time 56 . Average performing banks. Other banks will view the CSRs as part of the retail branch sales and service team. not the software. and the connectivity of software. Some will limit the activities of the "platform staff" to strictly new business and support service. service. and will deploy their time to sales and service first with a component of teller support in their mix of responsibilities. Banks have wide differences in deployment. the key is to establish the branch objectives in line with the bank's strategic direction.

high-performing banks open only 25 percent of new deposits to the total deposit account balances with their efforts as opposed to 32 percent for the average bank.35 percent. an increase of 9. These measures support the conclusion that the high performing banks do not need to open as much in new deposit balances since they retain their existing deposits better than the average banks. The emphasis on developing a sales culture has made a dramatic impact on many banks. High performing banks put on 152 new accounts per employee versus the average bank's 139 new accounts. The following is from the 2003 Nolan Efficiency Ratio Benchmarking Study retail branch data. When we examine the details of high-performing banks versus average performers. investment and select deposit products. we see the new non-time deposit account balances as a percentage of total non-time deposit balances was 14 percent in top-tier banks versus 20 percent on average. we discover additional detail on what drives branch performance. In some cases. What are the underlying factors that might support this outcome? They are likely the focus on new business in average performing banks versus the focus on net new business in high-performing banks.opening individual accounts and therefore open fewer accounts per month than the time allows. it has literally transformed the retail banks from "order takers" to "business development" engines. When we further dissect the information. It can be difficult to train CSRs in the relative benefits of each 57 . Looking deeper into the data. CSRs have had their offerings expand to include insurance. COMPARISON BETWEEN HIGH-PERFORMING BANKS AND AVERAGE PERFORMERS.

In many of the campaigns and programs. Today over 400 CRM models are on the market. The customer could have been inclined to set up the account prior to walking into the branch. The development of excellent market data has greatly assisted the banks who understand where to place their sales and service emphasis. A second element to consider is what the bank is strategically trying to achieve-net new business. For example. Deployment is as much a part of the success of the tools as it is with any technology. so they should model each location on its individual characteristics and opportunity for growth. not the need. Often the marketing teams concentrate on a specific use and not on developing market intelligence. meaning banks are paying for every new account regardless of how it was sold. Not every bank or branch location has the same potential for growth in their marketplace. Many banks base incentives on the first sale. Successful banks establish both branch and individual sales thresholds before incentives are earned. Not every bank has experienced the same success in terms of this change translating directly to the bottom line. and the tools are more affordable with greater applications.vehicle and often the weight of the incentive to the product drives them. When banks examine the incentives that are paid to CSRs there are a couple of telling characteristics to look for. Segmentation of the market is significant since it is not so much a measure of the actual effort as where the effort is extended. booked new business is the only criteria. or the CSR could have sold the account based on its features. the 58 . The subliminal message is that servicing existing customers is not as important to achieving individual or bank goals leading to service time spent on difficulties booking new business correctly and not primarily servicing existing customers. not what it has achieved in terms of net bottom line.

The work processes are as significant to the overall time success as any factor in the performance equation. thus requiring a separate input. but unless they understand why the customer has that product. As mentioned earlier. but ironically. It is common to find that the input form or screen for credit differs from the loan application. Banks that see a gap in their product offering often rush to put together a campaign before understanding the potential customer acceptance and impact on existing work processes. the CSR needs to prepare a separate document to show that they have properly completed an assessment of the customer's 59 . In many cases. they take an application for a retail loan and submit it for credit approval. Often this happens with HELOC campaigns and the CSRs cannot meet customer service expectations. The reason may be due to the specific product offering which may not convert to an interest in other product offerings. but rather have a series of largely manual steps. This is an example of shortterm application with a potentially long-term strategic tool.data may help banks to determine which customers have a product. with too many unconnected information inputs. When the loan is approved. there is a separate input form or screen for document preparation. Often banks profess to have their process integrated. processes are not structured to take advantage ofthat information in an automated way. In this way. it is common that 65 percent to 80 percent of new sales are due to existing customers. Applying science and analytics to the data suggests that the most pertinent information will lead to selling new products to existing customers. This analysis also applies to the possible loss of customers. Many new business processes are burdened at the point of the CSR. they may miss a targeted marketing opportunity. banks may prevent the attrition of their customer base. For instance.

5 percent. The ways people. Banks should utilize the proper information to determine how many CSRs are deployed. processes and technology are designed. and the average bank. The numbers tell a story over time. integrated and deployed make the difference. The comparative gap in efficiency ratio between the top performers. Every step in the process may be thought of as employing technology.1 percent. The analysis conducted in the annual Nolan 60 . SUMMARY The findings noted here from the 2003 Nolan Efficiency Ratio Benchmarking Study should not be surprising to most bankers since the behavioral basis today is basically the same in the top-performing banks as it has been for decades. Lastly. The staffing and scheduling element has as much to do with success in CSR effectiveness as with teller effectiveness. and this is where the sales service face is presented to the customer and potential customer base. A significant portion of CSR effectiveness is in the details of the process. loan and deposit account needs with an entirely separate input form and screen. it requires multiple inputs of the same information. very little science has been applied to the CSR position in banks. of the 20. the personnel cost gap is 10 percent and the other operating expenses is 10. separate boarding documents get the loan booked on the accounting system. is significant at 20.4 percent.full investment.4 percent gap. Unfortunately. 27. a separate incentive form or screen may need to be completed.4 percent. What makes the difference between the topperforming retail banks and the average performers is the way they design and deploy their resources to achieve sales and service goals for their customers. but without integration. 47. Interestingly. After the loan is approved. and see that they have the right tools and products to be successful.

61 .study of the top-performing banks year after year shows that improvements are ongoing-thai is what makes a single target elusive. process. technology and deployment should be the source of your measures and the basis for your improvement opportunities. The key to success is to understand that policy.

Minu Madlani. I would like to sincerely like to thank Ms. our co-ordinator for assisting in the project whenever help was required.ACKNOWLEDGEMENTS I Tulika Alva.B. First of all. the student of Jai Hind College pursuing my third year of Bachelor of Management Studies (T.Y. am very grateful to a lot of people for guiding and helping me in the right direction throughout my project.).B.I. 62 .

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