Human Resource Management
INTRODUCTION TO HUMAN RESOURCES:
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 "firm-specific human capital" has evolved to represent the original meaning of term "human resources".
Human Resource Management
HUMAN RESOURCE MANAGEMENT :
Human Resource Management or Personnel management is the activity of managing personnel, usually employees. In any organization, managing personnel is the process of making sure the employees (not the customers) are as productive as they can be. This can include hiring, firing, or transferring people to/from jobs they can do most productively. This subject is a major at many universities, or a minor in the business school. It is also known as personnel administration, which is functionally an equivalent term.
Human Resource Management
MEANING OF HUMAN RESOURCE MANAGEMENT :
A business unit needs employees to look after different activities. This is called manpower or human resource. Such human resource needs to be developed fully so that it will make positive contribution for the progress and prosperity of a business unit. For this systematic development and management of human resources is necessary. Human Resource Management (HRM) deals with: (a) Training (b) Self-development (c) Promotions (d) Performance appraisal of manpower recruited in an organization. HRM is an organized learning experience aimed at matching the organizational need for career growth and development. It is a process involving series of learning activities designed to acquire desired level of competence among employees. HRM is a continuous process and it needs money. Such investment creates a team of efficient, skilled and trained manpower which brings success and stability to a business unit. HRM programmes offer long term benefits to an organization.
Human Resource Management
CHARACTERISTICS OF HUMAN RESOURCE MANAGEMENT:
(1) Upgrading Manpower:
HRM is basically concerned with the upgrading of manpower working in an organization. This leads to improvement in the individual performance of an employee and also corresponding improvement in the organizational performance.
(2) Stress on Training:
HRM includes various schemes arranged for providing education, guidance, training and opportunities to learn and develop employees of all categories and working in different departments. There is an integrated use of sub-systems (training, career developments, organizational development) in the HRM programme.
(3) Attention to learning and career development:
Learning, self-development, career development and possible through HRM programme.These are the core areas of HRM. Career development is possible through joining training courses, reading books and periodicals. Learning and career development raise the capacity of employees to work at highest levels. They are given higher positions with monetary benefits.
(4) Organizational Development:
HRM includes organizational development, which includes effective communication within the organization, coordination of different activities, elimination of conflicts of different types and creation of orderly atmosphere in the whole organization.
on the job and off the job training programmes are introduced from time-to-time. HRM programmes create matured.
NEED AND IMPORTANCE OF HUMAN RESOURCE MANAGEMENT:
. which is a valuable asset of a business unit.
(7) Termination of Employment:
Termination is an unpleasant part of any manager’s job. Employees occasionally must be terminated for breaking rules of failing to perform adequately.
(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.
(9) Wide Scope:
The scope of HRM programmes is very vast. It is multi-disciplinary in character. skilled and efficient manpower. For this. departments and levels of management are properly integrated.Human Resource Management
(5) Team Spirit :
HRM is basically for developing team spirit in the whole organization.
(8) Continuous Activity:
HRM is rightly treated as a continuous activity due to new developments taking place regularly in the business world. Team spirit facilitates orderly growth of the organization in the right direction. For this. Training and guidance are given on different aspects of business management to enable managers to deal with complex managerial problems and challenges.
Human Resource Management
(1) To create stable labour force:
HRM programme are needed in order to create stable. Employees demand. etc. computers. training
. automation. introduction of new technology.
(2) 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. HRM programme are needed in order to absorb technological changes taking place with speed. will not be possible unless training is provided to the manpower. This avoids managerial obsolescence. All this is possible through HRM. In fact.
(5) 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. reducing costs and avoiding wastages.
(3) To develop strength for survival:
HRM programme are necessary for survival in the present competitive marketing environment. Even the vacancies at higher levels can be filled in internally due to HRM programme as they provide training and opportunities of self-development to employees working at lower levels. efficient. An enterprise can face market competition only by improving quality. skilled and matured manpower required by an enterprise for the present and future period.
(4) To face challenges of technological changes:
Technological changes are taking place rapidly in every area of business.
refresher courses. HRM is needed in order to keep ready a team of competent managers as a second line of defence.
(7) To facilitate expansion and diversification:
HRM activities are needed to meet the manpower requirements resulting from expansion and diversification programme undertaken at the enterprise level.Human Resource Management
SCOPE OF HUMAN RESOURCE MANAGEMENT:
. Attention should be given to HRM much before the introduction of expansion programme. etc. career guidance. Competent juniors must take their positions. for their self-development. It provides skilled manpower for this purpose. 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.
(8) To utilize production capacity fully:
HRM is needed in order to use the available production capacity to the optimum level. Executives. promotions and transfers. HRM programme are needed to fulfill self-development and career development of employees.
(2) Performance Appraisal:
Performance appraisal is an important area of HRM.
(3) Potential Appraisal:
It relates to the study of capabilities 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. Career development is an integral part of HRM.
(4) Career planning and development:
Under HRM employees should be given guidance for their self-development and career development. This technique is useful for building a team of capable employees and is also used for their self-development. It is useful for proper placement and career development of employees.Human Resource Management
Training is an essential element of HRM. Potential appraisal of employees is useful for developing their special qualities. Superiors are supposed to provide information and guidance to their juniors in this regard.
(5) Employees welfare:
. It is useful for self-development and career development. The purpose of performance appraisal is to study critically the performance of an employee and to guide him to improve his performance. They should be motivated for self-development. This develops skills and capacity to work at higher levels and positions. Training is possible by different methods. Potential appraisal is possible by the superior with the help of different methods. which can be used fruitfully along with the expansion and diversification of activities of the company. The opportunities likely to develop in the organization should be brought to their notice. which is useful to the organization in the long run.
Employees welfare include the provision of medical and recreation facilities. low productivity or industrial disputes. skills and experiences which will be useful in the near future. It also keeps plans ready to deal with problems like absenteeism.
(9) Human resource information system:
. Reward is an appreciation of good work. to grow and to develop new qualities.Human Resource Management
Employees welfare is within the scope of HRM. Such facilities support training and other measures introduced for HRM. 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. Such facilities raise the morale of employees. It may be in the form of promotion. Welfare facilities are useful for creating efficient and satisfied labour force. higher salary or higher status.
(6) Rewards and incentives:
HRM includes provision of rewards and incentives to employees to encourage them to learn. attractive pay. subsidized canteen. turnover. A forward looking policy on employee benefits like job security. Rewards and incentives motivate employees and raise their morale.
(8) Quality of work life:
Quality of work life depends on sound relations between employers and employees.
(7) Organizational development:
HRM aims at providing conflict-free operations throughout the organization. free transport and medical insurance.
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
Such system acts as an information bank and facilities human resource planning and development in a proper manner.
evaluation. HR executives rely on internal or external IT professionals to develop and maintain their Human Resource Management Systems (HRMS). The HR function consists of tracking innumerable data points on each employee. experiences to payroll records. capabilities and limited technical resources. HR Technology or also called HR modules. skills. and payroll processes. these ERP systems have their origin on software that integrates information from different applications into one universal database. Efficient and effective management of the "Human Capital" Pool (HCP) has become an increasingly imperative and complex activity to all HR professionals. data.
The HR function's reality :
All in all. organizations began to electronically automate many of these processes by introducing innovative HRMS/HCM technology. EHRMS). from personal histories. most organizations have formalized selection.Human Resource Management
HUMAN RESOURCE MANAGEMENT SYSTEMS:
Human Resource Management Systems (HRMS. To varying degrees. shape an intersection in between human resource management and information technology. Before the "client-server"
. Due to complexity in programming. On the whole. the HR function is still to a large degree administrative and common to all organizations. The linkage of its financial and human resource modules through one database is the most important distinction to the individually and proprietary developed predecessors. To reduce the manual workload of these administrative activities. which makes this software application both rigid and flexible. whereas the planning and programming of data processing systems evolved into standardized routines and packages of enterprise resource planning (ERP) software. Human Resource Information Systems (HRIS). It merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field. capabilities.
these internally developed HRMS were limited to medium to large organizations being able to afford internal IT capabilities. and generating periodic pay cheques and employee tax reports. as well as labour distribution capabilities and data analysis features. The most advanced modules provide broad flexibility in data collection methods.Human Resource Management
architecture evolved in the late 1980s. Data is generally fed from the human resources and time keeping modules to calculate automatic deposit and manual cheque writing capabilities. This module is a key ingredient to establish organizational cost accounting capabilities. The advent of client-server HRMS authorized HR executives for the first time to take responsibility and ownership of their systems. The payroll module sends accounting information to the general ledger for posting subsequent to a pay cycle. 2) time and labour management 4) HR management.
The time and labour management module: applies new technology and
methods (time collection devices) to cost effectively gather and evaluate employee time/work information. every single HR automation process came largely in form of mainframe computers that could handle large amounts of data transactions.
The benefit administration model:
permits HR professionals to easily
administer and track employee participation in benefits programs ranging from
. calculating various deductions and taxes. In consequence of the high capital investment necessary to purchase or program proprietary software. These client-server HRMS are characteristically developed around four principal areas of HR functionalities: 1) "payroll". 3) benefits administration and
The payroll model: automates the pay process by gathering data on employee
time and attendance. Sophisticated HCM systems can set up accounts payable transactions from employee deduction or produce garnishment cheques.
Costly and time consuming HR administrative tasks. HRMS/HCM technology replaces the four core HR activities by streamlining them electronically. capabilities and skills management. While using the internet or corporate intranet as a communication and workflow vehicle. Leading edge systems provide the ability to "read" applications and enter relevant data to applicable database fields. the HRMS/HCM technology can convert these into web-based HRMS components of the ERP system and permit to reduce transaction costs. notify employers and provide position management and position control.
. insurance policy. selection. authorize access to information for employees (manager's side) are being individually handled and permit to reduce HR transaction time. managers and HR professionals alike.Human Resource Management
healthcare provider. benefits enrolment. enrolment in training classes (employee side) and to instruct a personnel action. HR activities shift away from paper based processes to using self-service functionalities that benefit employees. leading to HR and organizational effectiveness. compensation planning records and other related activities. 1) payroll. leading to greater HR and organizational efficiency. Through employee or manager self-service (ESS or MSS). 2) time and labour management. Typically. which lead to business innovation. The system records basic demographic and address data. 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. HR professionals can spend fewer resources in managing administrative HR activities and can apply freed time and resources to concentrate on strategic HR issues. personnel data change. training and development. 3) benefit administration and 4) HR management. Consequently. such as travel reimbursement.
Corporate goals are translated into viable realities and profits only with human element who play their due role in achieving the desired results.Human Resource Management
HUMAN RESOURCE MANAGEMENT IN BANKING:
Human resource management (HRM) has long been overlooked in the corporate sector in the country where a small section. With the growing realization of proper HRM in the corporate sector. financial institutions and specialized banks are operating with various products and activities. 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. it has grown into an important activity. 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. Thus even the high automation would require proper man behind the machine to
. 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. 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. comprising mostly the multi-national companies was practicing the same. Now the head of HRM is an important member of the senior teams of any thriving business.
banking requires multi layer manpower for its various requirements of professionals and support staff. more emphasis on consumer and house finance and personal loans. Personnel departments were primarily engaged in approval of leaves. This has further highlighted the need for proper deployment of man-power to run banks efficiently. HRM banks like other institutions have been handling this sensitive activity through respective personnel departments. 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. equipment and appliances. conducting disciplinary enquiries and termination from service. etc. With liberalization of activities within the banking sector. 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. Success stories of large banking companies have been evident of the fact that HRM
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make things happen. pieces of furniture. This means human resources were managed like other physical assets e. Like many other organized sectors. for example. handling of staff loans. This idea has been realized by top managements in progressive banks.g. calculators. For many years. 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. issuance of show cause.
on the other they think of their long run goals and objectives. On the one hand it is the assigned duty and task they are to perform and for which they are paid by their employer.
. Its strong sensory and decision-making capacity has to be greatly emphasized by the employers.Human Resource Management
is quite different from management of physical assets. Managing this educated. Human brain has its own peculiar chemistry. By no means. skillful and trustworthy work force is not an easy job. The work forces constituting all levels of employees are constantly thinking in many dimensions. their brains can be controlled to think beyond the current situation of employment.
work and life. HRM did not have a direct role in business development but was more concerned with centralized recruitment of staff and providing them across the country. Job rotation has been a major plan of developing expertise. The management canvass has become vast and challenging.Human Resource Management
ROLE: HUMAN RESOURCES MANAGEMENT IN BANKS
Human Resources Management is concerned with people. It would be interesting to study the role of HRM in the Indian Banking. were driven by grades and seniority. Wherever HR develops professional with appropriate competencies it becomes the driver of the business by partnering the development process. Similarly. They have in addition responsibility towards the shareholders and need to proactively grapple with many issues. successful HRM attaches great value to people and creates an organization which is both competitive and compassionate. The business mix and the focus have shifted. profit and size.
. information. As Indian Banking starts grapping with issues of globalization. business goals are meet and sustained. adoption of new technology and growth HRM becomes critical and could be the major growth driver. The personnel policies. practices. Wherever the HRM the functions and practices are aligned with overall corporate strategies. today. Technology has changed the layout of the workplace. customers and other stake holders. be it salary or promotion or transfer. bank management is more directly responsible for decisions. Unlike the past when the balance sheets were not transparent and regulation was not calibrated. performance. Success of the bank is measured in terms of the market share. Indian Banking is the happening place witnessing exciting days. HRM of banking should be no different from the rest of the business. It is concerned with building an infrastructure that impacts employees.
Role of Hum an Resources m anagem ent
HR Provides advice and counsel to business
HR Actively participates & provides resources
HR is aware of Business Transformations
HR business transformation effort
. Given this. but technology alone cannot drive business development efforts. as banking is fundamentally a matter of banker customer relationship. ensure that the banks perform very well and play a vital role in the transformation of banks into global leaders. the demand on HRM for making available professional to perform new jobs and new locations is endless.Human Resource Management
However. it is evident that technology can expedite and improve delivery of banking services. Actually it is only the human resources that can use the technology efficiently.
This has been facilitated by specialized hiring agencies who may take up the job of hiring in case of large number of vacancies. 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. Ones who are outstanding professionals with high job hopping attitude .
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CHALLENGES FACED BY THE BANKING INDUSTRY IN TERMS OF HUMAN RESOURCE MANAGEMENT:
(1) Effective work force:
A time-consuming and hectic job is to hunt the right talent. trained and are some how retained to be developed as future management within the bank. tougher is the search. Identifying the right stuff followed by negotiation is the element which makes the job tough for the employer. Banking jobs being apparently lucrative for many. Its just sitting by the river and waiting for the right fish to catch. Banks are keenly interested to fill up two types of breads of professionals.these are those who come in . Others are those who are keenly picked-up. Higher the professional value of the vacancy.work for some time and then leave for better prospects. attract a large number of candidates against advertised vacancies in media creating a large data base management problem.
bonuses and time-based fringe benefits like car and house advance. A basic pay with traditional formulas of linkage with medical and other facilities has no soothing effect today. The situation is not the same anymore. There are examples to this. 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. A promise of future growth. salary slabs.Human Resource Management
(2) Right people:
The most difficult agenda of HRM across the banking sector is to retain the right people. learning culture and corporate loyalty is out of dictionary and does not mean anything to this energetic and competent performer today. Banks have traditionally followed pay scales with predetermined increments. A waiting period of 3-4 years in each cadre haunts the incumbents who strongly believe in immediate compensation. This ready-made force is often identified and subsequently picked-up on better terms by others. etc. gratuity.
How much to pay to the right employee and how much to the outstanding performer. pension. A bank in a normal course invests time and money to hire and train the appropriate work force for its own operations. Thanks to the car
. An increment of Rs500-800 per annum is no more a source of attraction for a professional anymore.
preferential location. 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. 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. repeat get21
. city of his own choice and boss of his liking.Human Resource Management
financing modalities car is no more a fantasy item any more. 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.
(5) Morale boosting:
What has long been overlooked is the morale boosting of the employees by the organizations. Human beings even if satisfied of material well being need to be appraised and encouraged constantly.
(4) Job satisfaction:
Everybody in the bank wants to work in the preferential department. An administrative deviation from any of these results in lowered job satisfaction. What the HR manger cannot afford is the dissatisfied employee who not only disrupts the smooth working himself but also spreads the negativity to others by his de-motivated attitude.
reunions. sports events. conferences. company sponsored travel. etc.Human Resource Management
Challenges for HR in days to come
20 15 12 10 17 12 7 7
Cross training of staff for use in different
Developing basic IT skills
Availability of leadership across
Fostering a Learning culture
. This is the way employees create a feeling of belongingness. dinners.
dovetailing employee preference in the deployment process. Undoubtedly this has been a successful model as it has thrown up a large number of very efficient leaders in the sector. Indeed the concept of job rotation is contrary to the development of specialist skills. finalizing pay and related aspects.specific training. HRM effectiveness could also be studied with reference to its role in staffing of each department / unit. the line department and HRD is involved in the head hunting. and capacity to make staff changes that drives business changes are the corner stones of HR strategy. The selection process was through advertisement for a large number of posts. In an effective organization. HR functionaries have indicated that jobs are becoming specialists in nature.Human Resource Management
EFFECTIVENESS OF HUMAN RESOURCE DEPARTMENT :
Posting right person for the right job. This seems to be in vogue in private sector and foreign banks. Some of the banks have also started offering market related pay. It is clear that the HR departments feel that they are effectives when it is a question of ability to post staff with appropriate skills and capabilities for the jobs. Invariably. On selection. in these organization.
. retaining talents. the department will have a say in the matter and work hand in glove with the line departments. There are campus recruitments and sporadic instances of specialists being inducted at higher levels. planning for the long term needs term needs of the bank. the candidates were given a induction training and job. Also these departments have enough room / flexibilities with regard to their ability to make changes in staffing pattern / position based on changes in business conditions.
THE EXPECTATION FROM HUMAN RESOURCE
. B = Identify Long Term trends in the supply and demand for staff and plan accordingly. D = ability to make changes in the staffing pattern / position based on changes in business conditions. C = Incorporate employee preferences in the deployment.Human Resource Management
H R M effectiveness
Effective Not Effective 120 100 80 60 40 20 0 A B C D
A = Posting of staff with appropriate skills and capabilities.
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(1) (2) (3) (4) There is an urgent need of inducting marketing people at different levels. who. There is a simultaneous need to balance the demand of IT savvy youngsters joining the organization who ask for high salaries. People with specialists skills such as risk management and channel management are needed in hurry. HRM should also take immediate steps to improve productivity. Customer relationship management has come to centre stage and calls for specialist people. There is a need for well trained officers to deal with high net worth individuals where continuity and close knowledge of customer is important. on account of age profile is not comfortable working in an IT environment. In the circumstances an important task at hand is training the staff member.
Milos Tucakovic. 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. This lecture was held in NBS and it was organized by the Academy of Banking and Finance. 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.Human Resource Management
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. HR Manager. presented from the viewpoint of top-level international hotel industry. was the guest lecturer at the round table of HR managers in the banking sector. Tucakovic presented his experience in managing human resources in the 5-star hotel. work. Aside from
. Human resources management. Adaptation of world standards to domestic conditions and local culture. the Head of the Personnel and Training Division at the Hyatt Regency Hotel in Belgrade. Milos Tucakovic. to HR division managers from Serbia’s commercial banks and the central bank. The management of the Hyatt Regency Belgrade Hotel tends to recruit its management personnel from the ranks of its own employees whose characteristics. performance and professional training demonstrate that they are ready to accept new challenges. held in NBS and organized by Academy of Banking and Finance. 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 abroad. 51 percent owned by the famous Pritzker family and 49 percent owned by domestic shareholders. Mr.
intended for facilitating the performance of specific tasks. be acquainted with the market and the business environment. as this visitor is called in the Hyatt. provision of first-rate services.Human Resource Management
divisional training. it was interesting to learn about the characteristics required and developed in its personnel. all employees attend a compulsory training programme in the course of which they become acquainted with the company and the hotel. is a person from the company who conducts an unannounced check of compliance with standards. adaptability. the program of independent development of managers requiring the candidate to exercise self-initiative. complaint resolution. hygiene and general work safety standards. “Main characteristics required in all employees are energy. telephone communication skills. have the ability to solve problems and be acquainted with the company procedures. to make decisions. to plan and view things in the long-term. whose identity and time of coming is not known. the hotel also offers “Hyattrack”. communicativeness. to motivate others. organize work. team spirit. honesty. 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. 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. in addition to various forms of training. commitment to clients/accuracy in work. selling skills. hence. In addition to the foregoing. managers are required to have the following skills: ability to implement changes. collegiality and punctuality. The management and the owners of the Hyatt Regency Belgrade Hotel believe that training is a type of employee benefit. This guest.” Milos Tucakovic pointed out.
. which practically means the unannounced visit by a “phantom” guest. develop their staff.
and the other one including back-office personnel whose work is also crucial for the proper functioning of the system. there are always two employee recognition lists: one encompassing front-office personnel.Human Resource Management
It should also be noted that commendations by guests are taken into account when evaluating employees.
. who are in direct contact with guests. but with a view to providing an equal opportunity for all employees.
would particularly assist in creating a joint strategy for the development of human resources in this field. as a joint venture of the National Bank. on adequate computer literacy. corporate and investment banking. Senior Adviser in the NBS. Rautenberg said that the Academy. The meeting took place in the NBS Villa in Topcider on 16 September with representatives of 28 commercial banks. but also the most desirable ways of parting with employees who failed to meet the expectations or had
. Besides satisfaction of eventually meeting their colleagues from other banks. commercial banks and the Association of Serbian Banks. Wolfgang Rautenberg. interdependencies between the central bank and commercial banks. and would also facilitate daily work for the managers taking care of the employees in the banking and finance industry. HR managers also expressed interest in exchange of experience. and Aleksandara Lujic and Jasmina Milosevic from the NBS. In addition. relations with international institutions and modern banking systems. special attention would be devoted to retail. efforts and availabilities and about motivation and stimulation systems in business environment. Mr. in the manner of organizing human resources and in education of employees in the banking industry. choice of new professionals for the bank. as well as mortgages and insurance business. i. The HR Managers were welcomed by Mr. Mr. The topics to be focused on within banking education would comprise basics of international banking and finance.e. They also stressed the need to find out more about evaluating staff performance.Human Resource Management
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. Rautenberg explained that the training to be offered to commercial banks would primarily insist on the English language as the language of banking. communication skills and specific banking knowledge. The other topics of their concern included the most reliable headhunting criteria.
Wolfgang Rautenberg underlined in his address to the commercial banks’ HR managers. Mr. Rautenberg also emphasized the importance of training for managers. “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. together with acquiring international presentation skills. 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. especially with respect to managing people and organizations.
. as it is often mistakenly thought” Mr.Human Resource Management
to be made redundant.
was held today by the Academy of Banking and Finance in the NBS Villa in Topcider. use and develop personnel with a view to realizing the objectives of the organization. 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. place and role of the human resources management function within 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. as well as to prevent the reduction of work to a mere administering of working relations and transferring responsibility to the organizational unit. organization.” Professor Janicijevic pointed out in the course of the roundtable discussion. Nebojsa Janicijevic.
. Professor at the Faculty of Economics. discussing the importance. underestimating the significance of human resources. In the course of the discussion. gave a presentation on “Contemporary Human Resources Management”. stressing the importance of training managers in contemporary management in this field. attended by representatives of commercial banks. In this sense.Human Resource Management
The Second Roundtable of Commercial Banks’ HR Managers
The second roundtable of banking sector human resources managers. “To manage human resources means to systematically attract.
Initial career progression indications are positive with a rise noted in the number of internal job applications by participants. Human Resource Manager of Westpac's Policy. On-going verbal and written guidance was offered by the project manager and coordinator. Although the Westpac culture generally exhibits little gender bias. Westpac encountered some unwillingness on the part of some mentors to attend training.WESTPAC BANKING CORPORATION.that's why I'm a mentor. Three sets of evaluation questionnaires (at six weeks. two weeks later. mid-point and project conclusion) were also used. expressed at focus groups of managers and executive managers. trial nature of the pilot meant that some people had to be turned away. "I already have communication skills . but they were given assurances they would be considered for involvement in such a program when it goes company-wide." Many satisfying outcomes of the pilot program have been observed. Every effort was made to stay in telephone contact with all participants.
At the July meeting of the Making Mentoring Connections Network. These workshops were augmented.Human Resource Management
ARTICLE ON CASE STUDY. a case study of the pilot mentoring program in the Westpac Banking Corporation was presented by Niki Kesoglou. The breakfast. and their comments and input acted upon. by a "get acquainted" breakfast. it was agreed that the program helped improve the visibility of women in this particular workplace. 6 females) and 14 mentorees (6 males. The limited. and this will need to be tracked over time.
. and also a mid-point follow-up workshop with both mentors and mentorees. Mentoring relationships which cross functional areas have assisted in breaking down barriers. Their attitude seemed to be. Westpac's program was feedback-intensive. Westpac's mentoring was born out of a need. Projects & Diversity Department. 8 females). The pilot included 18 mentors (12 males. ARTICLE WRITTEN BY SANDRA O’NEILL. to examine career progression and to retain high potential people resources (particularly for female staff) within the company. There was an overwhelming response to circulation of a mentoring booklet and invitation. Bio-data sheets were issued and participants took part in mentoring skills workshops. both from people wanting to be mentors and also from hopeful mentorees. provided opportunities for checking reactions and progress.
Further. Some banks are convinced that the software developers have had to consider the effectiveness issues in their design. Retail banks sell 65 to 80 percent of their new products to
. For example. Human Resources will drive the incentive system. In those cases. Most banks do not have an integrated technology solution. The contact management system and the CRM are often the purview of marketing. Technology vendors prefer to install their software in the easiest and most operationally effective way possible. depending on 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. the technology decision starts with a traditional approach to define business requirements leading to software selection and then implementation. the "owners" of an element of the process make the system choices for the pieces of technology they require.Human Resource Management
Banks are taking a variety of approaches in implementing technology to make improvements in retail delivery. The methods differ. Branch administration may decide on the document preparation system. technology is not often applied to simple processes that could reduce errors. 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. Vendors have become very effective in making this case. but sales and marketing management develop it. and see little value in starting with process redesign. 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. Banks have opted to design the technology implementation process around meeting the customers' needs and limiting the work effort required. The challenge has been to accomplish straight-through processing in order to eliminate potential errors and work duplication.
and type of organization. without noting any significance related to performance and system use.
. but. The trend in technology is straight-through processing or electronic integration of all the required data elements and support systems. This advantage will certainly impact the amount of work that a CSR (Customer Service Representative) is able to complete on a comparative basis. and better quality of data elements. very few have accomplished the connectivity in an efficient or effective manner. lower cost.Human Resource Management
existing customers. to date. the new business 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. Independent surveys conducted by the Robert E. Nolan Company reveal that many banks have this objective. asset size. 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. Keeping this in full view. The study examined top-tier performers by line of business. The conclusion is that performance is more highly correlated to the process design and integration of data systems.
. ten 20s. including balancing. They conclude that this work is not cost beneficial. 00). In the 1980s.
The data demonstrates that high-performing banks handle 13 percent more transactions per month than average banks.Human Resource Management
Industry data is best used as directional information. 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. Although banks need these statistics to look at teller performance. two 5s and five Is = $265. the operational focus was on security factors. Many banks fired tellers for being out of balance. The audit department often imposed security into the processing steps without regard to timeliness and the service impact on customers. and a practice called "backing" deposit slips and/or withdrawal slips. Teller effectiveness is an area where banks have gone through cycles over the past 20 years. Backing referred to writing the exact currencies transferred on the back of the slip to potentially simplify the balancing process later in the day (for example. In these banks. Each bank places differing process and security time burdens on the teller position. the importance was on transaction accuracy. but other conditions can directly influence transaction performance. Those banks designed their transactions to include redundant steps to help measure and track the balancing process. including triple counting the cash back to customers. The relative cost per transaction is 35 percent higher in the average banks than the high-performing banks. not as a true measure of what individual banks need to achieve to realize high performance. Transaction effectiveness is a significant factor. five 10s. a directional view is required. The following statistics from the 2003 Nolan Efficiency Ratio Benchmarking Study show the range of teller performance from high-performing banks to average performers.
The national average is 33 to 35 percent. Effective training can cut errors and help to ensure that the speed of processing is elevated through a confident and competent staff. Wide variances exist in the time and effort banks put into teller training. Recruiting appropriate personnel from the branch location often helps in keeping tellers with the bank longer. and. communications. 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. Not many banks are equipped to measure the actual teller performance or even relative performance within a branch or from branch to branch. when management considers that more tellers interact with customers daily than any other position in the bank. One of the reasons is that teller opportunities to perform are not equal. They train individual transactions in a uniform and controlled way and then. but. the opportunity to perform at a high rate related to staffing and scheduling. in week four. the actual teller performance. The annualized teller turnover rate is typically one of the highest areas in a bank.Human Resource Management
Teller performance variables can include: the impact on training. it follows that service and transaction training is essential to high performance. ranging from the mid teens in some banks to over 100 percent in others. the use of part-time tellers and teller pools that can support multiple branches due to illnesses and vacations. The teller turnover rate is generally lower in a down economy. assign them a branch teller monitor to assist in getting started. the sales referral policies and requirements. procedures and systems. the customer base being serviced. A drive-up teller will usually
. In these cases. Some banks provide no formal training but have tellers work with a "teller trainer" in the branch to learn the policies. Banks that seem to have lower rates of turnover often have practices in place to reward high performance. the teller turnover rate. The cost of effective training appears high on the surface. the trainer will influence the procedure with their individual biases and not necessarily the bank's standard practices.
possibly differing cashing limits for tellers due to experience or branch characteristics. GMT. Differences in work are attributable to a varying mix of transaction types due to customer base. physical location of bank checks and encoding equipment. and Exometrics all have the required queuing models and the flexibility to place staffing and scheduling in the hands of retail management. and potential use of cash dispensers in some locations. High turnover branches will have lower real performance due to more tellers who are in a learning curve. and with a bank turnover rate of 35 percent. Within the branch. Demos. the teller at the head of the queue will service every customer in slow periods. as well as differences due to the actual performance of standard work. rural. 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. The teller position is a "customer demand" work environment and while management sometimes uses fill-in work to help the utilization. university. Banks must account for all of these differences. the bank would need sophisticated modeling to calculate customer arrivals during the tellers' working hours along with customers in line to determine teller opportunity.Human Resource Management
handle more transactions per hour due to handling two customers at a time and a limit on transaction types. where a teller at either end of the teller line will not have as many opportunities. all three have the modeling capabilities and report generation necessary to be effective with a diverse set of branch locations. The learning curve for tellers is typically three months. The standards and the work measured must accurately reflect the branch conditions as believed by branch management and then used to develop schedules. it typically comes down to effective staffing and scheduling. Some banks tailor standards to location-type such as urban. Banks must factor in tailored work standards and develop scenarios that reflect the conditions of each branch location as close as possible to reality. but currently there are three that have the features necessary to model both teller and CSR positions effectively. etc. that can lead to lower
. shopping mall. To analyze real teller performance.
The factors that prevent banks from performing at the higher level relate to process efficiency.5 tellers per hour in remote locations. policy. retail banking has experienced a significant shift to transform practices to primarily a sales orientation. Staff modeling is a dynamic process and the tools used should be dynamic as well. it is very difficult to evaluate the performance of tellers since management must staff to volume and allow for breaks and coverage. Many banks have trained their teller staff in how and what to refer with an expected volume of two closed referrals per day. The incentive system should not penalize them or it will force even higher turnover.5 and 2. True performance is difficult to measure without a tool to properly balance the customer demand to the service staff hours. which may also slow down the transaction processing and resultant service levels. In low-volume locations. not the software.Human Resource Management
performance in selected branches. In the past six years. Management may decide to utilize three full-time tellers to allow for coverage during peaks and deliver service properly. Incentive systems can direct tellers to concentrate on referrals. Line of business performance is determined by how people. Teller incentives are largely weighted on paying for closed referrals over and above any measure for service and productivity. 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. 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. Often a branch requires the equivalent of between 1. process and technology are deployed.
. and the connectivity of software. deployment of staff through scheduling and staffing. This shift in many institutions has contributed to difficulty in making any comparisons. Banks can adjust the staffing model for effective service in locations with high turnover until the time that problem is resolved.
Banks have wide differences
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There are a variety of issues that impact the performance of Customer Service Representatives (CSRs) in the current environment.
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 opening individual accounts and therefore open fewer accounts per month than the time allows. branch support. and administration. Some will limit the activities of the "platform staff" to strictly new business and support service. service. In any event. Other banks will view the CSRs as part of the retail branch sales and service team.
. Nolan Company show that high-performing banks have a work distribution of 55 percent on sales and account opening. the key is to establish the branch objectives in line with the bank's strategic direction. This is where the significance of work process has the greatest impact. Average performing banks. while other banks see marketing as having a primary role in driving potential customers into the branch. see their CSRs spending more time in problem resolution (25 percent) and less time (30 percent) in actual sales and account opening. 18 percent on fee and non-fee services. and 19 percent on administration and other. Performance is a function of how banks manage and structure time. on the other hand. The primary activities we see CSRs handling are sales/new business. and will deploy their time to sales and service first with a component of teller support in their mix of responsibilities.
COMPARISON BETWEEN HIGH-PERFORMING BANKS AND AVERAGE PERFORMERS. 8 percent on customer problem resolution. Independent studies conducted by the Robert E.Human Resource Management
When we further dissect the information. The emphasis on developing a sales culture has made a dramatic impact on many banks. or the CSR could have sold the account
. Not every bank has experienced the same success in terms of this change translating directly to the bottom line.
High performing banks put on 152 new accounts per employee versus the average bank's 139 new accounts.Human Resource Management
When we examine the details of high-performing banks versus average performers. it has literally transformed the retail banks from "order takers" to "business development" engines. In some cases. Looking deeper into the data.35 percent. When banks examine the incentives that are paid to CSRs there are a couple of telling characteristics to look for. not the need. The following is from the 2003 Nolan Efficiency Ratio Benchmarking Study retail branch data. 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. The customer could have been inclined to set up the account prior to walking into the branch. CSRs have had their offerings expand to include insurance. an increase of 9. 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. Many banks base incentives on the first sale. 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. investment and select deposit products. 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. It can be difficult to train CSRs in the relative benefits of each vehicle and often the weight of the incentive to the product drives them. meaning banks are paying for every new account regardless of how it was sold.
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. Often this happens
. The reason may be due to the specific product offering which may not convert to an interest in other product offerings. In many of the campaigns and programs. banks may prevent the attrition of their customer base. Often the marketing teams concentrate on a specific use and not on developing market intelligence. Not every bank or branch location has the same potential for growth in their marketplace. For example. booked new business is the only criteria. but unless they understand why the customer has that product. Successful banks establish both branch and individual sales thresholds before incentives are earned. so they should model each location on its individual characteristics and opportunity for growth. the data may help banks to determine which customers have a product. they may miss a targeted marketing opportunity. In this way. not what it has achieved in terms of net bottom line. The development of excellent market data has greatly assisted the banks who understand where to place their sales and service emphasis. Segmentation of the market is significant since it is not so much a measure of the actual effort as where the effort is extended. 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. Today over 400 CRM models are on the market.Human Resource Management
based on its features. Applying science and analytics to the data suggests that the most pertinent information will lead to selling new products to existing customers. and the tools are more affordable with greater applications. A second element to consider is what the bank is strategically trying to achieve-net new business. Deployment is as much a part of the success of the tools as it is with any technology. This analysis also applies to the possible loss of customers.
loan and deposit account needs with an entirely separate input form and screen. they take an application for a retail loan and submit it for credit approval. the CSR needs to prepare a separate document to show that they have properly completed an assessment of the customer's full investment. Banks should utilize the proper information to determine how many CSRs are deployed. but without integration. In many cases. with too many unconnected information inputs. processes are not structured to take advantage of that information in an automated way. Often banks profess to have their process integrated. a separate incentive form or screen may need to be completed. It is common to find that the input form or screen for credit differs from the loan application. This is an example of short-term application with a potentially long-term strategic tool. The work processes are as significant to the overall time success as any factor in the performance equation. and this is where the sales service face is presented to the customer and potential customer base. it requires multiple inputs of the same information. For instance.Human Resource Management
with HELOC campaigns and the CSRs cannot meet customer service expectations. Lastly. When the loan is approved. and see that they have the right tools and products to be successful. As mentioned earlier. Unfortunately. thus requiring a separate input. very little science has been applied to the CSR position in banks. A significant portion of CSR effectiveness is in the details of the process. separate boarding documents get the loan booked on the accounting system. but ironically. there is a separate input form or screen for document preparation. Many new business processes are burdened at the point of the CSR. it is common that 65 percent to 80 percent of new sales are due to existing customers. Every step in the process may be thought of as employing technology.
. After the loan is approved. The staffing and scheduling element has as much to do with success in CSR effectiveness as with teller effectiveness. but rather have a series of largely manual steps.
It is seen that the recruitment process in the banking industry is changing.Human Resource Management
Already there are indicators that the above issues have started weighing with the HRM. Apparently future recruitment will be clearly driven by the number of persons needs at different levels.
Continuity and responsibility towards customer could be more if people are recruited for different geographical locations. On the contrary.Human Resource Management
The routine skills and functions will be to a large extend outsourced and banking will be more to recruit a large number of person with different qualifications. Those who like the challenges and salary will apply for the jobs in different locations. train them and nurture them internally. As more and more new skills are wanted by the banking sector. Retail. in addition to IT. training could be outsourced and blended with learning. Another thing that will change is policy of transferring people across the country. There is a need for an active dialogue with the academic institutions such that candidates are job. post them across geography. talents will be recruited locally and nurtured. It is also hopped that the market will offer ready to use candidates who have. it is hoped that the ever expanding IT inventions could be more effectively used in reaching training across the geography rather than run huge in house infrastructures. Banks will also used to the word attrition and learn to manage this aspect. In such a situation packet should be market driven and adequate. Finance and other specializations and good level of banking knowledge.
For better understanding of this project I have were visited I met
The Questions was asked by me and reply were given by the Manager Mr. What are the challenges faced by your HRM department? Ans: The challenges of the HR department are that the employees should achieve internal goals and target of the bank. Do you list you vacancies on websites or give advertisement in newspaper? Ans: We give advertisement in newspaper.N. 4.S. It is a routine exercise. I asked in certain set of questions to know his views and thought on this segments here I have tried to share with you all his experience that he share with me.
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Mr.N. We have performance appraisal for the employees and after every six months we give performance appraisal to our employees to achieve the goal and expectations of the bank and also to know the strength and weakness of the employees.S. What aspects do you consider while recruiting the employees? Ans: We consider aspects like Education Background of employees their computer literacy and aptitude for banking work. Is it very costly or expensive? Ans: NO. What changes do you make periodically to upgrade your Human Resource Management? Ans: We periodically review our system and upgrade them.Kharkar which was as follows:
5. 2. 3.
. Do you give training to each and every employee? Ans: Yes. What do you do to solve the problems of the employees? Ans: Our institution is Human approach . Genuine problems of the employees are considered only and solved accordingly so that employee should not be under depression and they should be satisfied.Lenient problems of each and every employee is studied. 8. Does Human Resource Management help to improve the skills of the employees? Ans: Yes. All employees should know everything. Human resource concept should be their in every bank but HRM department is not necessary. It helps to improve the skills of the employees. 10. 7.Human Resource Management
6. What steps are to smooth functioning of your HRM department? Ans: We upgrade our systems continuously for the smooth functioning and we take periodical suggestions from the customers and accordingly we make changes. Rotational training is given to all employees so that no one is dependent on other. 11. Is it important for every bank or a firm to have a human resource management department? Ans: According to me. 9. How many employees do you have in your HR department? Ans: 21 Employees.
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