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Abstract The present study has been undertaken in view of the absence of systematic
studied on the subject. Nationalization has changed the complexion and dimensions of
Commercial Banking in India. It helped to hasten the pace of geographical and
functional diversification. The new dimensions have placed the varying responsibilities
on the shoulders of commercial banks such as expansion of branch offices to unbanked
and remote rural areas on a massive scale so as to cover small scale sector, cottage and
rural industries, self-employed persons, artisans, weaker sections of the society, small
traders and other persons of small means. The study covers all the important areas of
human resource development in banks. These areas include conceptual clarification
about human resource and human resource development in banks, essentials of HRD,
the sub-system of human resource development like performance appraisal, training,
management development, career planning and development, organization
development, participative management, quality circles etc. These primary areas of
human resources development will be studied thoroughly to the maximum extent
through the means of discussion, interviews, reports, accounts, observations etc.
public sector banks. But in July 1993, as study of a leading public sector bank SBI
part of the banking sector reform process in Hyderabad Karnataka Area. He even
and a measure to induce competition in analysed that the HRD practices in State
the banking sector. The RBI permitted Bank of India is standard and some
entry to the private sector into the changes required for strengthening the
banking system. This resulted in manpower of SBI. He also noted the role
emerging of a private sector Banks: of employees union in HRD function of
These banks are collectively known as the Bank.
‘new’ private sector banks. After
Ouchi in his work suggested that the
nationalization of major Banks, their
success of the Japanese Organizations in
network has expanded geographically and
comparison with the contemporary
diversified in complex and challenging
American Organizations was largely due
areas. As private sector Banks has
to the adoption of Human Resource
already entered into their business areas
policies, which encouraged commitment
viz, Merchant banking, mutual funds,
and participation among employees and
Credit cards etc. Now Public sector banks
resulted towards innovative and flexible
are also growing in size and entering into
organizations, which finally led to the
their areas too. It requires technical and
better performance. Hence, the wastage
managerial human power for future. The
of Human Resource means wastage of
future need of the banking sector can
money, which becomes a burden on an
only be met if present human resources
organization. Thus, the role of Human
are developed and utilized.
Resource Management emerged as to
Review of Literature maximize employee commitment,
flexibility, organizational integration, and
Mr.Venkata highlighted in his research
to improve quality of the work. To
thesis, the importance of standard
overcome various impediment
Human resource management system in
Researchers of different countries derived
the Indian Banking industry for survival
different models and had given various
and growth in the present competitive
theories in relation to Human Resource
world. He further noted that, how
Management and Human Resource
designing the HR policy plays an
Strategy.
important role in the development of the
Indian Bank. Human resource development in
Indian banking sector
Mr. Joshi explained in his research
thesis, the importance of Manpower To take up this industry to the heights of
planning in public sector banks. He international excellence requires
explained that, banking is a service combination of new technologies, better
industry and for any expansion of its processes of credit and risk appraisal,
branches and banking services to attract treasury management, product
and retain customer, banks must diversification, internal control, external
concentrate on proper man power regulations and human resources at the
planning. most. The main challenges faced by
Banks in our country are the role played
Aravind studied in his research thesis,
by financial instrumentation in different
in detail about the human resource
phases of business cycle, the emerging
development in commercial banks, a case
International Journal of Academic Research
ISSN: 2348-7666; Vol.4, Issue-2 (1), February, 2017
Impact Factor: 4.535; Email: drtvramana@yahoo.co.in
compulsions of the new prudential norms central and outer challenges. In different
and bench marking the Indian financial way the HR department sales, finance
system against international standards and manufacture the strategic over time
and best practices. There is a need for to achieve its ultimate objectives.
introduction of new technology, skill Monitoring as well as changing the
building and intellectual capital strategy also permits the business to cope
formation. The most important need in up with the current demand.
this service industry is naturally the
Earlier Studies Human resource
HRD. During the early phase of banking
development is a process through which
development in India after independence,
employees in an organization are assisted
opportunities for employment of the
to realize their full potential for their
educated man-power were relatively
present and future jobs. It involves long
limited. This sector was the preferred
term perspective which visualizes change
employer for the educated persons in the
through involvement and ownership of
country in addition to civil services. In
such change by the participants. HRD
recent years, this position has changed
believes that individual in an
dramatically. Certain rigidities have also
organization have unlimited potential for
developed in HRD within the banking
growth and development and that their
system as this system is public sector. Its
potential can be built through
hierarchical structure gives preference to
appropriate and systematic efforts. The
seniority over performance, and it is not
abbreviation HRD denoting, “Human
the best environment for attracting the
Resources development” is creation of
best talent from among the young. How
western countries; they treat and deal
well Challenges are met will mainly
human force as resource. Resources are
depend on the extent to which the bank s
explored, exploited and discarded after
leverage their primary assets i.e., HR in
their use. Continuous use of resources
the context of the changing economic &
make them weak and futile, they decay
business environment. It is expected that
with time. However, human beings
the Indian banking and finance system
become wiser, stronger and grow from
will be globally competitive. For this the
within each challenge problem
market players will have to be financially
encountered. Wisdom and strength in
strong and operationally efficient. Capital
human beings appreciated with time but
would be a key factor in building a
use of resource always make them weak,
successful institution. The banking and
futile and depreciate. D.V. Ramana
finance system will improve
Murthy has discussed in this article on
competitiveness through a process of
“Human Factor in Banks,” the
consolidation, either through mergers
significance of human factor and trade
and acquisitions through strategic
unions in the banks. S.R. Varde in his
alliances. Indian Banking system has
paper on “Manpower Planning” at the
played a crucial role in the socio-economic
level of an Indian commercial bank dealt
development of the country. The system
with the aspects like basic structure of
is expected to continue to be sensitive to
manpower planning, linkage of
the growth and development needs of all
manpower plan to other plans,
the segments of the society. Besides
interrelationship of various manpower
practicing HR in different units it is also
functions, objectives of manpower
a mammoth task for the banks to face the
International Journal of Academic Research
ISSN: 2348-7666; Vol.4, Issue-2 (1), February, 2017
Impact Factor: 4.535; Email: drtvramana@yahoo.co.in
the present is empirical study and hence, 4) With the increase in number of job
the focus is on the hither to neglected options available nowadays, the HR
Human Resources Management variables function of an organization must take
in the earlier, studies, viz., Performance care that they hire those people who
Appraisal system, Training system, believe in long-term commitment to the
Recruitment Process, Quality circles. organization. The HR then must take up
Human Resources information systems the challenge of retaining them by
and impact a focus on Human Resources developing retention techniques like
Management, by an independent and Holiday plans fun-at-work etc.
outside management researcher and
5) Because of cutthroat competition, HR
hence, devoid of any bias.
in India also faces the task of building
Objectives of the Study competitive advantage for the company
over national and international
1) To enquire into the HRD philosophy of
competitors.
banks.
6) The growing importance that
2) To study the organizational and HRD
companies are nowadays giving to cost-
climate in the banks.
cutting has posed HR with the challenge
3) To enquire into the practices of various to minimize expenditure on HR not
HRD techniques, and compromising on the productivity.
4) To study the outcomes of human 7) Since right-sizing has been a growing
resource development for the banks, trend in Indian organization, the HR now
individual employees. faces the task of identifying and retaining
the key employees of an organization and
Challenges Faced By Banking
letting go those that do not suit its future
Industry
requirements.
Here are the ten challenges that the HR
8) HR also faces the challenge of creating
function in India faces:
a balanced organization that originates
1) The first and foremost challenge that from mergers and acquisitions. HR needs
HR function in India faces is to convert to assimilate those policies that are
the abundant population pool into useful mutually agreeable to the companies
human resource. being merges as well as profitable for the
new organization.
2) Training and development of human
resource to match ever changing industry 9) Globalization poses HR with
demands requires HR to develop new and challenges such as expatriation and
innovative ideas that suit individual as repatriation. HR needs to train
well as industry criteria. employees that leave their nation for
fulfilling a foreign assignment. It also
3) Employee motivation and satisfaction
needs to provide such employees with
is another area of concern for the HR
adequate moral support and assure them
today. In order to reduce attrition, HR
of job security on their return.
needs to realize that monetary needs are
not the only drive for an individual and 10) With multinational organizations on
that a sense of belongingness must be the rise, HR needs to focus on issues such
imbibed in employees. as crosscultural training so that problems
International Journal of Academic Research
ISSN: 2348-7666; Vol.4, Issue-2 (1), February, 2017
Impact Factor: 4.535; Email: drtvramana@yahoo.co.in
that can arise because of differences in their clients to grow in size and well
international professional values can be recognized in the world market. To pull
diminished. consumers banks are offering traditional
with advance services like SMS banking,
Hiring the Right Person for the
ATM, internet banking, priority banking,
Right Job
demat. So we can say that it caters to the
In assessing whether the "right person" need of the bottom to the highest class of
has been selected for the "right job", the society providing something to everyone.
most prominent theoretical concept that Universal banks have become modern
emerges is the concept of "fit". Different day s supermarket extending almost
writers emphasize different types of fit. every facility of banking under one roof.
Sekiguchi (2004: 179) in a review of
Performance Management
literature on person-environment fit
discusses two types of fit that emerge as Banking service is one sector where a
the most prominent types of fit: person great degree of attention is being paid to
job fit and person-organization fit. In performance appraisal system. Several of
pursuing person-job fit, companies seek the nationalized banks have changed
to match the job holder's knowledge, their performance appraisal system or
skills and abilities to the requirements of are in the process of changing them. In
the job. Companies can ascertain person- most of the banks that follows the
organization fit by focusing on how well traditional system, their officers are
the individual fits with the culture or being assessed on the following
values of the company and the characteristics:
individual's capacity to work well with
General Intelligence
other company employees. Banks have to
plan for the following: Job Knowledge
A steady, carefully calibrated Initiative and resourcefulness
recruitment programme,
Supervision
As rapid technological changes Business Capacity
transform business – continuous
skill up-gradation. Ability to assess sound
A new generation of the Business propositions
workforce working alongside an Dependability
older generation as a team.
Banking, it is a team work and Relationship with junior & senior
these new situations require colleagues
cultural adjustments and Relationship with public
therefore, change management.
Conduct, manners, Managerial
Training and Development ability
With drastic growth of banks it calls for Failures that attracted issue of
efficient and well trained staff members warning by superiors.
to handle/deal with the consumer needs.
Banks are shaping up as financial hub for
International Journal of Academic Research
ISSN: 2348-7666; Vol.4, Issue-2 (1), February, 2017
Impact Factor: 4.535; Email: drtvramana@yahoo.co.in
Several of the banks also have self- retirement benefits under the Bank s
appraisal as a part of performance Superannuation Fund. The Bank
appraisal, although mostly such self- contributes a sum equivalent to 13% of
appraisal is more of a communication of the employee s eligible annual basic
achievements. A fair, transparent and salary (15% for the Managing Director,
objective mechanism for performance Executive Directors and for certain
management is a must for all banks eligible erstwhile Centurion Bank of
because an effective Performance Punjab („eCBoP ) staff) to insurance
Management System is the key to talent companies, which administer the fund.
management and succession planning. The Bank has no liability for future
RBI is shortly going to introduce a new superannuation fund benefits other than
Performance Management System that its contribution, and recognizes such
will work on goal setting, potential contributions as an expense in the year
appraisal of performers and developing a incurred, as such contribution is in the
talent pipeline. With all these changes we nature of defined contribution.
are also going to face major challenges on
Banks like Bank of Baroda are
the Talent Management front. In coming
conducting Grooming and etiquettes
times, the work force will get complex
programmes for front-line employees and
and there will be a need to juggle a wide
also for employees selected for overseas
variety of people with varied needs and
posting in order to improve their service
preferences, resulting in an array of
levels and qualitative interaction with
relationships between the organization
customers and various stakeholders
and those who work for it. Peter Drucker
better. SEED (Self efficiency and
had, more than a decade ago, expressed
effectiveness development) programme
the need for what he called “non-
being run for frontline staff of the Bank
traditional” work relations: flexible
in order to improve their service skills
schedules, contract arrangements, virtual
and servicing efficiency.
teams, etc.
Punjab National Bank, in the light of
Some other HR practices and benefits
the large scale human resources gaps that
given to employees:
Bank is likely to face in the next few
Gratuity years need for Succession Policy has been
felt. The Policy envisages mapping of the
HDFC Bank provides for gratuity to all
'existing pool' against the 'future
employees. The benefit is in the form of
requirement' from the projected business
lump sum payments to vested employees
figure to ensure that adequate number of
on resignation, retirement, death while in
officials are available in the pool and also
employment or on termination of
to foresee the surplus / deficit in the pool
employment of an amount equivalent to
for ascertaining the requirement of
15 days basic salary payable for each
succession in a particular vertical. Bank
completed year of service. Vesting occurs
has a three tier training set up
upon completion of five years of service.
comprising of Central Staff College (CSC)
Superannuation at Delhi at apex level catering to training
needs of Top / Senior / Middle
Employees of the Bank, above a
Management Grade officers, three
prescribed grade, are entitled to receive
Regional Staff Colleges (RSCs) located at
International Journal of Academic Research
ISSN: 2348-7666; Vol.4, Issue-2 (1), February, 2017
Impact Factor: 4.535; Email: drtvramana@yahoo.co.in