Professional Documents
Culture Documents
i''■vvi';-
HUMAN RESOURCE
MANAGEMENT
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ii
INDIAN INSTITUTE OF BANKING & FINANCE
I!' i^-.i''■vvi';-
'THE ARCADE') WORLD TRADE CENTRE, CUFFE PARADE MUMBAI 400 005
Mission
• To develop professionally qualified and competent bankers and financial professionals
primarily through a process of education, training, examination, consultancy/counselling and
continuing professional development programs.
Vision
• To be the premier Institute for developing and nurturing competent professionals in banking
and finance field.
Objectives
• To facilitate study of theory and practice of banking and finance.
• To test and certify attainment of competence in the profession of banking and finance.
• To collect, analyse and provide information needed by professionals in banking and finance.
• To promote continuous professional development.
• To promote and undertake research relating to Operations, Products, Instruments, Processes,
etc., in banking and finance and to encourage innovation and creativity among finance professionals
so that they could face competition and succeed.
I!' i^-.i''■vvi';-
a
Indian Institute d Banking & Finance
MACMILLAN
© INDIAN INSTITUTE OF BANKING & FINANCE, MUMBAI, 2010
(This book has been published by the Indian Institute of Banking & Finance. Permission of the Institute is essential for
reproduction of any portion of this book. The views expressed herein are not necessarily the views of the Institute)
All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means,
without permission. Any person who does any unauthorised act in relation to this publication may be liable to criminal
prosecution and civil claims for damages
ISBN 0230-33049-5
10: 0230-33049-8
ISBN
13:
throughout the world
978
This book Is meant for educational and learning purposes. The author(s) of the book has/have taken all reasonable care to ensure
that the contents of the book d^ not violate any existing copyright or other intellectual property rights of any person In any manner
whatsoever. In the event the ¿uthor(s) has/have t>een unable to track any source and if any copyright has been inadvertently
infringed, please notify the publisher in writing for corrective action.
AUTHOR'S PROFILE
Mr. J Job Xavier is a senior H R professional with over 30 years experience and has headed HR in
Banking, Manufacturing, Media, Healthcare, and Financial services industries. He is professionally
quahfied in Law, Human Resources and Personnel Management.
He has 20 years experience in Banking; having worked with a nationalized bank, a private bank and a
new generation bank. He headed the HR in the latter two banks, with complete responsibility for all their
HR activities.
Passionate about training, he has built training centres in three of the organizations he had worked. Mr.
Xavier is Executive and Founder Director of Trinity Academy for corporate Training, Mimibai and is
currently associated with a number of firms as HR Advisor, dealing with recruitment. Assessment,
Training and Performance Management.
Shri C Krishnamurthi
Consultant and Former Head, HR
Grindlays Batik Limited Mumbai
FOREWORD
The Institute has adopted the practice of preparing dedicated courseware for all its examinations almost
a decade back and it continuously endeavors to update its books and courseware so that the candidates
taking the subject examinations are up to date with the latest knowledge in the banking and finance
industry. Apart from updating courseware the Institute also revamps courses and recasts it to suit the
requirements of the practising bankers. The revised format of CAIIB is an example of this endeavor of
the Institute to make the course more relevant for practising bankers.
The revised format of CAIIB underlines the fact that current day banking requires general as well as
domain specific knowledge. It is seen that, in the specialization era, a candidate who has worked under
one vertical in a bank for several years and has expertise in that area may not be equally comfortable
working in a new vertical unless the knowledge of the new vertical is made available in a professional
manner. Such persons need an opportunity to learn the nuances of a new vertical. Also a person
working in a given area in banking needs to keep pace with the current developments; which given the
work pressure may not be automatic. It is to meet with these divergent needs that we have formulated
the new CAIIB.
The new syllabus offers two compulsory papers viz.. Advanced Bank Management and Bank
Financial Management. The paper on Advanced Bank Management covers economic analysis,
business mathematics, human resources management and credit management. The paper on Bank
Financial Management includes international banking, risk management, treasury management and
balance sheet management. Thus, the two compulsory papers not only cover the modules of the three
papers of the current CAIIB but also include new areas such as economic analysis and business
mathematics, very useful skills for current day bankers.
As regards the third paper, candidates have the option to choose one out of the many optional papers
that will now be offered as electives. The electives cover the entire gamut of specialized domains in a
bank. The electives currently being offered are Human Resources Management, Risk, Treasury, Retail
Banking, International Banking, Corporate Banking, Co-operative Banking, Information Technology,
Rural Banking, Financial Advising and Central Banking.
The Institute brings out periodical subject updates for majority of its examinations. The updates help
the instimte in bringing out revisions in courseware once in three years. As such the book/courseware
and updates should be sufficient for the purpose of the examinations. Nevertheless, the book should not
be considered as the only source of information while preparing for the examination due to the rapid
changes witaessed in all the areas affecting banking and finance. The students have to keep themselves
abreast with the current developments by referring to economic dailies, articles, books and government
publications/websites etc. In view of this a few questions will be based on the recent developments
related to the syllabus, but may not have appeared in the book.
While the compulsory papers provide the breadth of banking, the electives provide the depth. We are
sure that candidates will find the new CAIIB useful for their purposes. Equally the banks will find the
CAIIB qualified professionals possess cutting edge knowledge.
The books should also be useful for anybody
interested in banking including students,
academics, researchers and others. We take this
opportunity to place on record our sincere
thanks to all the expert resource persons who authored
the courseware and experts who vetted the same.
But for their wholehearted support, involvement and
perseverance, this effort would not have been
successfiil in such a short period of time.
Mumba R. Bhaskaran
i Chief Executive Officer
1.7.201
0
Recommended Reading
The Institute has prepared comprehensive courseware in the form of study kits to facilitate preparation
for the examination without intervention of the teacher. An attempt has been made to cover fully the
syllabus prescribed for each module/subject and the presentation of topics may not always be in the
same sequence as given in the syllabus.
Candidates are also expected to take note of all the latest developments relating to the subject covered in
the syllabus by referring to Financial Papers, Economic Journals, Latest Books and Publications in the
subjects concerned.
n"
CAIIB SUBJECTS
Objective of the Examination: To provide advanced knowledge in banking subjects for better deci-
sion making.
Revised Structure:
Revised CAIIB Examination (2010) is structured with 2 compulsory papers and 11 elective papers as
given below.
I. COMPULSORY PAPERS
1, Advanced Bank Management
2. Bank Financial Management '
II. OPTIONAL PAPERS (Candidates to choose any one)
1. Corporate Banking
2. Rural Banking
3. International Banking
4. Retail Banking
5. Co-operative Banking
6. Financial Advising
7. Human Resources Management
8. Information Technology
9. Risk Management
10. Central Banking
11, Treasury Management
To be eligible for the award of CAIIB, a candidate must pass both the compulsory papers and any one
of the electives of the candidate's choice. Electives have been developed with the objective of giving
appropriate specialization to the candidates. Candidates may therefore choose those electives that are
relevant to their current and or immediate prospective job profile. Electives contain, in addition to the
knowledge inputs certain managerial inputs also. This is aimed to promote specialization in the study
by candidates at the same time enabling them to acquire skills required in bank management.
Ui
n"
Module B: Building an HR strategy
I. Strategy Formulation and implementation; Need for a distinctive H R strategy. Formulating the strategy;
connecting strategy to organization, aligning H R Systems with decision framework. Relationship between
sustainable strategic success and performance of the organization. Execution of strategy: Role of CEO,
Executive team, and line Managers, Succession Planning, HRD Audit, Effectiveness of HRD, Best HR
practices in banks.
2 Organizational Communication; Barriers to Communications, Steps for effective communication in the
organisation.
3. Manpower Planning; Recruitment, Selection, Placement and Promotion, Recruitment Vs Outsourcing:
Concept and Feasibility of Outsoiucing, advantages, disadvantages and constraints. Compensation; incentive
system linked to productivity, dealing with Attrition.
4. Performance Manag^ent and Appraisal Systems : Performance Appraisal System, Role of P A S, Emeig- ing
Trends, 360 degree performance Appraisal, Appraisal Vs Feedback, competency mapping, key performance
areas (KPA)
Module C: Motivation, Training and Skill Development
1. Human implications of Organisations; Learning and instmctions, Learning Processes, Employee Behaviour,
Theories of Motivation and their practical implications.. Motivational strategies. Reward and Incentive
fi.-«!''
schemes. Job Enrichment, Job Rotation, Employee Development strategies and Techniques.
1 Training and Development; Attitude development, Role and impact of training. Career Path Planning and
Counseling, Changing face of Banking, Future of Bank Education, Identification of Training Needs.
3. Training Methodology; subject matters of Training , Training infrastructure in Banks, outsourcing of Training,
On -the -job training. Management of conflict between Training and operations due to manpower constraints.
Development of soft skills and communications. Developing competencies through e-leam- ing, virtual
learning and self directed learning. Training measurement and impact.
CONTENTS
Foreword vu
3
2
6
6
9
8
0
9
1
MODULE A HUMAN
RESOURCE MANAGEMENT
1. Fundamentals of HRM
2. Organisational
Behaviour
3. Organisational Changes
4. HRM in Indian Banks
5. Knowledge
Management
MODULE B
BUILDING AN HR STRATEGY
6. HR as a Strategic Player
7. CEO and His Team
8. Communication
9. HR Functions
fi.-«!''
MODULE C
MOTIVATION, TRAINING AND SKILL DEVELOPMENT
18
5
20
4
222
23
2
MODULE-A
Unit
s
1.
2.
FUNDAMENTALS OF HRM
STRUCTURE
2, Objectives
3, Introduction
4, Fundamentals of HRM
5, New Insights into HR Management
Let Us Sum Up
Keywords
Terminal Questions ,
References
4 I HUMAN RESOURCE MANAGEMENTURCE MANAGEMENT
H.R.M-2
1.0 OBJECTIVES
After reading this unit, you should be able to:
• Understand the basic concepts of Human Resource Management;
• Grasp the importance of HRM and the value of Human Capital;
• Relationship between HRM and HRD;
• The role of the HRD professional.;
• Have an insight into the HR systems and practices in the Indian banking industry.
1.1 INTRODUCTION
The Times of India, on the occasion of celebrating 170 years of existence in India, organised a number
of seminars, which discussed the future; the future of Hope, the future of Style and the future of India,
the country that is being widely recognised as one of the most exciting emerging economies in the
world. Besides becoming a global hub for outsourcing, Indian firms are spreading their wings across
countries through mergers and acquisitions. During the first decade of this century, Indian companies
have bought a large number of foreign companies for billions of dollars, inviting the attention of
leading players the globe over, resulting in considerable FDI (Foreign Direct Investment) inflow. This
impressive development has been due to a growth in inputs (capital and labour) as well as increased
productivity indices. By the year 2020, India is expected to add about 250 million to its labour pool at
the rate of about 15 million a year, which is more than the entire labour force of a number of
progressive European nations. The BRIC (Brazil, Russia, India and China) countries are expected to
dominate the world economy with India poised to have the second largest GDP after China, by 2040.
This so called 'demographic dividend' has drawn a new interest in the Human Resource concepts and
practices in India and given a new insight into the people profile and human resource strength of this
country.
Some of the foreign banks in the country had introduced a few modern practices in people management
that resulted in a more systematic appraisal process, better employee grievance procedure and more
employee benefits within the constraints of the system. The old establishment and staff departments
were incapable of handling this change. It was during this time that Personnel Managers and Personnel
Departments started appearing in the PSU banks with a heavy slant on interpreting and implementing
the service conditions though rather mechanically. The economic liberalisation and globalisation of
trade and economy has transformed the way business is conducted the world over; opening new
economic opportunities. Banking in India could not remain a mere spectator and major transformation
took place subsequent to the Narasimham committee reports in the last decade of the 20th century,
resulting in the new generation private sector banks, and an entirely new banking experience for the
common man. Retail banking expanded to reach every street by way of ATMs and technology helped
make banking a pleasure by making available products and services at one's finger tips.
Besides the customers, the products as well as the market capitalisation based on the strength of the
stock and its holding pattern, a company is also valuing the efficiency of its operations which can have
a direct linkage to their staff. The strength of the organisation therefore arises out of the efficiency of
their operations, the processes and the expertise which has been developed by the employees.
Developing expertise is not easy; it requires constant practice especially in the face of constantly
changing technological conditions and market environment. Thus human capital becomes the basis for
constant creation of customer and structural capital. A dynamic Management Information System
would therefore capture all the elements of the human contribution in an organisation's performance.
FUNDAMENTALS OF HRM | 16
1
The employee displays over time a large number of competencies each of which can be measured and
valued. These competencies relate to domain knowledge, skills and technology and project
management and personal competencies such as initiative leadership, communication, etc. each of
which are important for specific functions. Software or an MIS that can capture these competencies and
convert them into productive and quantifiable output would result in a figure that is closest to the
human asset valuation.
most valued leadership skills in the HR industry is trust building. If Human Capital Management cannot
deliver on promises it has made, both its corporate base as well as its labour pool will quickly slip
away. During the recent recession, a number of leading IT companies in India recruited a large number
of programmers from leading institutes. Dreaming to work for a reputed company, many gave up other
options assuming their future was set. Hit by the recession, many of these companies went back on their
promise and could not offer the promised jobs, thus earning a bad name in the market. College
graduates between the ages of 21 and 28 in most major tech industries respond incredibly well to
Human Capital Management programs conducted by engaging and personable leaders. It has been
found that leadership success comes most often from those who exhibit a mentoring approach to the
yoimger recruits, guiding them in a nurturing manner that inspires a sense of loyalty and trust. The list
of qualities a leader needs is long but are achievable. A leader should look for tomorrow's problems in
today's environment, lear to adapt to change, set high standards and clear objectives, think through a
problem clearly, create sense of value and purpose in work so that employees will believe in what they
do, make sound decisions based on principles. He should be able to create a harmonious atmosphere of
work so that employees will be enthused to work and he should be sensitive to the needs of people.
abilities, it is important to implement training needed for the job, as well as career development and
treatment corresponding to the employee's attitude and types of employment.
FUNDAMENTALS OF HRM | 16
function till the late 80s.It was in some of the foreign banks that the designation slowly started to
change to the HR department and the Managers/officers of the Department had the nomenclature of
Relationship Managers. The departments with which a particular officer interacted became the
customers of that HR Relationship Manager. Some banks seriously started trying out assessment centres
as well. But in the public sector banks, there was no change. The department continued to retain the
Personnel Department tag. By the mid 90s and late 90s, these banks had a large number of old, surplus
staff and the solution by way of the VRS scheme was again introduced at an industry level and the
Personnel departments only implemented the scheme.
The HR Manager is responsible for providing a comprehensive range of strategic and operational
human resources services to achieve the organisational objectives as well as optimise employee needs
and engagement. This includes providing support to various fiinctional heads and regional priorities.
^Bil
OF HRM
■
1
1.3.5 Responsibilities and Tasks
Planning
FUNDAMENTALS OF HRM | 16
• Develop, monitor use and update policies in line with the Company's strategic objective.
• Ensure uniform implementation of HR procedures as well as organisational compliance to
recognised HR practices.
Staffing
• Provide each ilmction/section with adequate staff with up to date job descriptions in line with
managerial expectations
• Implement all aspects of recruitment, induction, remuneration and termination in line with the
HR policies as the need arises.
Performance Management
• Review performance processes and evaluate performance to ensure that the tasks performed are
in line with the Company's strategy.
• Put in place measurement systems for periodic reviews and co^ection.
li-aining and Development '
• Design a comprehensive training plan for the organisation.
• Implement the staff career development plans annually.
Compensation and Rewards
• Develop and implement a competitive remuneration strategy, updated annually, based on
current best incentive practices.
• Design an Incentive "plan to link rewards to performance.
Maintaining Quality of Work life and Discipline
• Develop and implement a healthy retention strategy.
• Continually monitor statutory compliance and.
• Ensure methods for creative work-life balance.
While the personnel head in PSU banks which have dominated the banking scene till the end of the last
century, may be reporting to the CEO, hardly any of the responsibility and tasks set out here is
performed by the Personnel Department. Most of the terms and conditions of the management staff as
well as the general category of employees are set by agencies outside the bank. This includes right from
the job grades, wages, working conditions to retirement age. Resourcing is also done by outside
agencies and the banks who are supplied with an exquisite bag of service conditions are free to
implement them fairly. In foreign banks though, things were much better and issues handled more
professionally.
H.R.M-3
U I HUMAN RESOURCE MANAGiEMENT
The essence is that an HR head wishing to convey focussed messages about the attribute and values of
products uses and promotes branded components (say of service conditions) whose own image
reinforces the desired attributes and values. As for banks, many in the clerical cadre (especially women
employees) joined because bank jobs were easy to perform and were considered fairly remimerative as
well. Now in a more competitive environment, this image also needs to undergo a major change.
Employee brand is a relatively new coinage but definitely a critical factor which will help one resolve
■SJLjAMki
m\ HUMAN
most recruitment hardships. It is all about being a company where people will want to work. And
definitely stressing on literally "being a company where people want to work", because unless you have
a great workplace you cannot create such an image.
Leadership opportunity
• Recognition for good work
• Learning and career growth
• Flexibility of timings
• Challenges and responsibilities
• Job Security
• Good work life and social life balance
In simple terms, be a good employer and give employees the maximimi reasons to reject another job
offer and stay on with the current organisation.
Make them feel good and they will speak good. There is nothing like a satisfied employee who spreads
the goodwill of the company by word of mouth. He is speaking from his experience and he is the best
brand ambassador one can find.
While calling for resumes, word the advertisement in such a way to build the company brand on terms
of credibility and employee welfare. Public relations can help build a credible brand image through
newspapers reports and magazines. Getting hsted in those "best employers' surveys will add a lot of
value. ,
Online strategies like press releases, newsletters, articles are also a powerfiil media for spreading the
word about the company. Also make the best out of corporate website.
Classic examples of employer branding in India are Infosys, Accenture, The TATA group and among
banks, the State bank of India.
As regards the PSU banks, there is no difference in wages and other service conditions offered to
employees except in the case- of retiral benefits. Thus State bank employees get gratuity, pension and
employer's contribution to P.F whereas in other banks, employees do get gratuity and pension but only
their own contribution to P.F. Therefore the only reason why a person will prefer one or the other bank
should remain outside the compensation and service rule sector and that is where the factors related to
branding come in.
Success of the new generation private sector banks was based on quick growth where major deposit
base came from a decrease in the existing business of public sector banks. The old public sector and
private sector banks were faced with considerable domestic competition. Innovation became the order
of the day and computerising of accounts across thousands of branches became a priority. Banks had to
reorganise their structure and thek business model and HRM became critical in the restructuring phase
and improving the profile of the workforce.
With the arrival of competition in all the emerging markets, the HR Department had to develop new
skills towards recruitment and selection and also devise a new methodology to attract good talent in the
face of heavy competition in the campuses. The new concept called for segregating the workforce based
on age, education qualifications and business priorities. The State Bank of India, India's largest bank
opted to undertake an intensive restructuring programme. Leading MNC consultants were used for the
restructuring exercise and a new people policy was in place, to decentralise operations as well as routine
HR work towards making the workforce far more focused to assist the organisation in implementing
changes.
Let Us Sum Up
In this nnit, we examined how people management, has evolved in India and elsewhere, some basic
concepts in HRM, the changing face of the workforce and attempts at valuing human capital. The rapid
changes all aroimd has resulted in constant up gradation of HR practices . We have examined the
relationship between HRM, the traditional personnel fimction and its developments, leading to the
current emphasis on human capital management.
I HUMAN : MANAGEMENT
Keywords
History of
management
Management theories
HRM terminology
HRM functions- managerial and
operational Human capital valuation
HR transformation ,
Employee outsourcing
Terminal Questions
1. What is the basis for the rise of people management as an essential managerial function?
2. Why is it important to value human capital? Cite some examples of companies in India that
practice Human Resource Accounting.
3. Trace the transition of the HRM flinction from one of time keeping to people management.
4. How is Personnel Management different from HRM?
References
• Business Week. (2007). A Red-HA Big Blue in India, Sept 3. Available: http://businessweek.com/
magazine/content/07_36/b4048052.htm.
• Chatteijee, S.R. (2006). Human resource management in India. In A. Nankervis, Chatterjee, S.R. & J.
Coffey (Eds.), Perspectives of himian resource management in the Asia Pacific (41-62). Pearson Prentice
Hall: Malaysia.
• Chatteijee, S.R., & Pearson, C.A.L. (2000). Indian managers in transition: OrientatibnsJ^ work goals, values
and ethics. Management International Review, 40(1), 81-95.
• Buckingham, Marcus-First Break All Rules. '
• Deal, E., & Kennedy, A.A. (1982). Cdrpdrate culture. Reading, MA.: Addison-Wesley.
• England, G.W., Dhingra, O.P., & Agarwal, C.N. (1974). The manager and the man: A crosscultural study of
personal values. Kent, Ohio; The Kent State University Press.
• Gopalan, S., & Rivera, J.B. (1997). Gaining a perspective on Indian value orientations: Implications for
expatriate managers. International Journal of Organisational Analysis, 5(2), 156-179.
• Lannoy, R. (1971). The speaking Tree: A study of the Indian society and culture. Oxford: Oxford University
Press.
• Khalilzadeh-Shirazi, J., & Zagha, R. (1994). Achievements and the agenda ahead. The Columbia Journal of
World Business, 29(1), 24-31.
• Khandekar, A., & Sharma, A. (2005). Managing human resource capabilities for sustainable competitive
advantage: An empirical analysis from Indian global organisation. Education & Training, 47(47/48), 628-
639.
• Kumvilla, S. (1996). Linkages between industrial nation strategies and industrial relations/human resource
policies: Singapore, Malaysia, the Philippines and India. Industrial & Labour Relations Review, 49(4), 635-
58.
• Meredith, R. (2007). The elephant and the dragon: The rise of India and China and what it means for all of
us. New York: W.W.Norton & Co.
• Mowday, R.T., Porter, L.W., & Steers, R.M. (1982). Employee-organisation linkages: The psychology of
commitment, absenteeism and turnover. New York: Academic Press.
• O'Reilly, C.A., Chatham, J.A., &. Caldwell, D.F. (1991). People and organisational culture: A profile
comparison approach to assessing person-organisation fit. Academy of Management Journal, 34(3), 487-
516.
• Rangarajan, L.N. (1992). The Arlhashastra. New Dheli: Penguin Books
• Roy, R. (2006). Quality of work life as a determinant of mental health: SCMS Journal of Indian
Management, 3(2), 87-91.
• Sett, P.K. (2004). Human resoiuce management and firm level restructuring: The south Asian drama. Research
and Practice in Human Resource Management, 12(1), 1-18.
• Singh, K. (2003). Strategic HR Orientation and Firm Performance in India. International Journal of Human
Resource Management, 14(4), 530-543.
• Sihag, B. (2004). Kautilya on the scope and methodology of accounting, organisational design and role of
ethics in ancient India. The Accounting Historians Joumal, 31(2), 125-148.
• Sinha, J., & Kanmmgo, R. (1997). Context sensitivity and balancing in organisational behaviour. International
Joumal of Psychology, 32(1), 93-105.
• Slater, J. (2004). Job-hopping central: Far East Economic Review, 8(1),34.
• Spencer, S., Rajah, T., Narayan, S., Mohan, S., & Latiri, G (2007). The Indian CEO: A portrait of excellence.
New Delhi: Response Books.
• Time. (2007). Special Report: 60 years of Independence, 170(6), 4-42.
• Venkatrataam, C., & Chandra, V. (1996). Sources of diversity and the challenge before human resource
management in India. International Joumal of Manpower, 17(4/5), 76-96.
ORGANISATIONAL BEHAVIOUR
STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Behavioural Dynamics in Organisations
2.3 Person - Job Fit
2.4 Group Dynamics <
2.5 Leadership and Team Effectiveness
2.6 HR Implications in Benchmarking
2.7 Quality Initiatives In Organisations
Let Us Sum Up
Keywords
Terminal Questions
References
2.0 OBJECTIVES
ORGANISATIOPiiPâL BEHÀVidil^^^^
After reading this unit, you should be able to:
• Get insights into the behavioral dynamics in organisations
• The person job fit - the right person for the right job
• Theories of group dynamics
• Qualities of Good Leadership & Team Effectiveness
• Benchmarking and how they affect quality
• Quality processes and their implications
2.1 INTRODUCTION
An understanding of organisational behaviour leads to the basics of people management. An
organisation is the coming together of individuals in order to attain a common goal or purpose. As
defined by Edgar Schein,. "An organisation is the rational co-ordination of the activities of a number of
people for the achievement of some conunon explicit purpose or goal, through division of labour and
fimction and through a hierarchy of authority and responsibility". (Schein 1979). Such a coming
together can be formal or informal, by way of a group of people for a specific purpose, can be for long
periods or even for the duration of a project. In a formal set-up, there is a given goal, a structure,
explicit roles and relationships in order to coordinate the activities whereas in an informal organisation,
these aspects evolve as an outcome of the group process.
The structure of an organisation denotes the formal hierarchical fi^mework by which job tasks are
divided, grouped, and coordinated. While most organisations start with a clear focus on levels and
fimctions along with the people to man these fimctions, it takes a while before the units of the
organisation get defined more clearly with a firmer statement of its policies, procedures, and goals.
"Y'l'ir
^ I HUMAn F^EStteii^i^^
"There's a lot that occurs in a person's life in terms of experiences and conditioning and attitudes, and
they bring all that with them into the worlqjlace," says Allen Jones, president of the Edge Leaming
Institute. "Businesses must recognise that people come to them with all sorts of prior knowledge, all of
which ultimately determine their contribution to an organisation way more than flieir technical
competence."
But many organisations do not have processes in place that can effectively leverage employees' real-
world, on and off-the-job experiences. The benefits of effective knowledge sharing, can include
improved productivity, increased engagement and retention, strengthened loyalty and a workforce that
feels more valued and validated.
"It's absolutely imperative that knowledge sharing takes place for a business to be competitive," Jones
said. "Equally important. is for learning professionals to help the employee understand the impact and
influence of those experiences, the cause-and-effect relationship of those experiences and how that
affects their ability to make contributions."
decide who should participate next. Group size will affect not only participation but satisfaction as well.
Evidence supports the notion that as the size of the group increases, satisfaction increases up to a certain
point. In other words, a group of six members has twice as many opportunities for interaction and
participation as a group of three people. Beyond 10 or 12 members, increasing the size of the group
results in decreased satisfaction. It is increasingly difficult for members of large groups to identify with
one another and experience cohesion.
impact is governed by the expectation of the recipient and it must be remembered that communication makes its
own demand on the recipient. That means that communication is not mere information.
ORGANISATIONAL BF-HAVIOUR | 36
difference, to know that our efforts essentially created some kind of change. Reality has to do with that we operate
in the real world, understanding and accepting it for what it is, rather than in some fantasy."
Ryan said the more of these needs that get met by a group, the more likely that the group will become transformative
for its members and in its results.
Whether a talent manager is bringing together a cross-functional team to handle a staffing issue or cope with layoffs,
Ryan said, "It's always wise to start with purpose."
"Make sure that people are clear about what the purpose of the group is," she said. "It's quite amazing how anybody
who's calling a group together can think it's perfectly clear what we're here for, when in fact, the 10 or 12 people
who show up don't have that understanding at all."
"Also, look at that purpose from the point of view of how compelling is it. Because one of the challenges in today's
world is that everybody's busy. Organisations ran so lean that everything's important and the pace can feel so rushed.
So the question becomes what's going to make this cross-functional team that we're creating important enough so
that people will really give their heads and hearts to it, and have it be significant enough so that when push comes to
shove, they will show up, they will do their homework, they'll be there on time, they'll follow through, they'll make
it a priority."
In an engineering company in India, whenever cross fimctional groups meet, one of the members writes down on a
board " what is the purpose of this meeting?", after the initial discussions. This obviously helps in setting the right
direction for the agenda.
Let Us Sum Up
Under this unit, we have leamt about the structure and various constituents of an organisation.
Understood the best manner in which to match a person to the job and gone through research reports which indicate
current trends in organisations.
Group Dynamics as a major topic giving inside into the formation and fimctioning of groups and how sub-groups
become effective within the over all organisation.
Keywords
Organisational structure '
Matrix structure
Fimctional structure of organisations Organisational
culture Forming, Storming, Norming Group Norms
and Group Cohesiveness Cyber Networks
4.Short note on Cyber Groups and how they differ from traditional groups. References
ORGANISATIONAL BF-HAVIOUR | 37
• Brainstorming; Group Decision Making; Teams and Teamwork; Amy McMillan; Revised by Tim Bamett
Further Reading
• Cherrington, D.J. Organisational Behavior. Boston: Allyn and Bacon, 1994.
• Frey, L.R., and S. Wolf "The Symbolic & Interpretive Perspective on Group Dynamics," Small Group
Research 35, no. 3 (2004): 277-316.
• Greenberg, J., and R.A. Baron. Behavior in Organisations. 7th ed. Upper Saddle River, NJ: Prentice Hall,
2000.
• Hellriegel, D., and J.W. Slocum, Jr. Organisational Behavior. 10th ed. Thomson South-Western, 2004.
#
• Katz, D., and R. Kahn. The Social Psychology of Organisations. 2nd ed. New York: John Wiley & Sons,
1978, 196.
• Luthans, F. Organisational Behavior. 10th ed. Boston: McCiraw-Hill, 2005.
• Robbins, S.P. Essentials of Organisational Behavior. Upper Saddle River, NJ: Prentice Hall, 1997.
The following factors contribute to hard work, skill development and effective problem solving strategies:
• The task itself should be motivating.
• The task itself should be seen as being worthwhile. It needs to be a whole piece of work with a
clear and visible outcome so that people can feel a sense of ownership.
• The outcome of the task should be perceived as being important to other people's lives. It should
affect others in the organisation or impact the external customer.
• The job should provide the team with an opportunity for self-regulation. They should decide how
the work is to be done. Meaningfiil feedback should be provided on the how well the team is
performing.
The team needs challenging goals, which are clearly defined which will help it mobilise its efforts to find
irmovative ways to achieve feats that may have been considered impossible. Providing a challenging job is
the most important motivator to sustain group effort.
Rewards are important and they need to suit the personal characteristics of the people on the team. It is
important that group effort is recognised and the disruptive habit of trying to single out individuals from the
group, when there has been a group effort, must be avoided.
Leaders get results. They make things happen. They continually advance a clear agenda, get others to buy in and
move the organisation to accomplish specific objectives. They are explicit, consistent, concise and sincere. They
generally have an abundance of charisma although some leaders gain success with a quieter influence. Exemplary
leaders take charge and are not afi-aid of responsibility or risk. Most people want to follow them. Good leaders
develop openness, honesty, clarity of purpose and a sincere caring for the people they lead. They gain commitment
and trust by demonstrating respect for the individual. They have a keen sense of understanding. They believe in
their task, they understand the objectives, they communicate clearly and they honestly project the understanding that
they need the efforts of everyone to succeed. It is all about believing in employees and their ability to create success.
was a poor team player confided his worries to her. He thought he was a good team member, but he was plagued by
persistent complaints. Recognising that he was a talented executive and a valuable asset to the company, Joan made
an agreement with him to point out (in private) when his actions undermined his goal of being seen as a team
player.
She followed the one-on-one conversations with a three-day off-site meeting. Her goal here was team building, so
that everyone would own whatever solution for the business problems emerged. Her initial stance at the off-site
meeting was that of a democratic leader. She encouraged everyone to express freely their fhistrations and
complaints.
The next day, Joan had the group focus on solutions: each person made three specific proposals about what needed
to be done. As Joan clustered the suggestions, a natural consensus emerged about priorities for the business, such as
cutting costs. As the group came up with specific action plans, Joan got the commitment and buy-in she sought.
With that vision in place, Joan shifted into the authoritative style, assigning accountability for each follow-up step
to specific executives and holding them responsible for their accomplishment. For example, the division had been
dropping prices on products without increasing its volume. One obvious solution was to raise prices, but the
previous VP of sales had dithered and had let the problem fester. The new VP of sales now had responsibility to
adjust the price points to fix the problem.
Over the following months, Joan's main stance was authoritative. She continually articulated the group's new vision
in a way that reminded each member of how his or her role was crucial to achieving these goals. And, especially
during the first few weeks of the plan's implementation, Joan felt that the urgency of the business crisis justified an
occasional shift into the coercive style should someone fail to meet his or her responsibility. As she put it, "I had to
be brutal about this follow-up and make sure this stuff happened. It was going to take discipline and focus."
The results? Every aspect of climate improved. People were innovating. They were talking about the division's
vision and crowing about their commitment to new, clear goals. The ultimate proof of Joan's fluid leadership style is
written in black ink: after only seven months, her division exceeded its yearly profit target by $5 million.
The style in a "Do what I tell "Come with "People come "What do you "Do as I do, "Try this."
phrase you." me." first." think?" now."
Lidership Style Coercive Authoritative Affiliative Democratic Pacesetting Coaching
Underlying Drive to Self- Empathy, Collabora Conscien Developing
emotional achieve, confidence, building tion, team tiousness, others.
intelligence initiative, empathy. relationships. leadership. drive to empathy,
competencies self-control change communica communica achieve, self-aware-
catalyst tion tion initiative ness
When the style In a crisis, to When To heal rifls To build buy- To get quick To help an
works best ORGANISATIONAL
kick start a changes in a teamBF-HAVIOUR
or in consen | 54 from a
results employee
turnaround. require a new to motivate sus, or get highly improve
or with vision, or people input from motivated performance
problem when a clear during employees and compe or develop
employees direction is stressful tent team long-term
needed circum strengths
stances
Overall impact Negative Most Positive Positive Negative Positive
on climate strongly
positive
Most effective leaders use a collection of distinct leadership styles-each in the right measure, at just the right time.
Such flexibility is tough to put into action, but it pays off in performance. And better yet, it can be learned.
An authoritative leader states the end but gives people their own means.
Leaders who have mastered four or more- especially the authoritative, democratic, affiliative, and coaching styles-
have the best climate and business performance.
1. Identify the problem areas - Because benchmarking can be applied to any business process or function, a
range of research techniques may be required. They include: informal conversations with customers,
employees, or suppliers; exploratory research techniques such as focus groups; in-depth marketing research,
surveys, questionnaires, process mapping, quality control variance reports, and financial ratio analysis.
Before embarking on comparison with other organisations, it is essential to determine own organisation's
fimctions and processes; base lining performance provides a point against which improvement effort can be
measured.
2. Identify other industries that have similar processes and shortlist organisations that are leaders in these areas -
Look for the very best in any industry and in any country. Consuh customers, suppliers, financial analysts,
trade associations, and magazines to determine which companies are worthy of study. Survey companies for
measures and practices. Surveys are typically masked to protect confidential data by neutral associations and
consultants.
3. Visit the "best practice" companies to identify leading edge practices - Companies typically agree to mutually
exchange information beneficial to all parties in a benchmarking group and share the results within the
group. Study and analyse practices best suited to the current scenario in the organisation and implement new
and improved business practices.
ORGANISATIONAL BF-HAVIOUR | 43
2.6.2 Types of
Benchmarking
• Process benchmarking -
the initiating firm
focuses its observation
and investigation of
business processes
with a goal of
identifying and observing the best practices from
one or more benchmark firms. Activity analysis
will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office
processes where outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess
one's overall competitiveness and productivity.
• Performance benchmarking - allows the initiator firm to assess their competitive position by comparing
products and services with those of target firms.
• Product benchmarking - the process of designing new products or upgrades to current ones. This process can
sometimes involve reverse engineering which is taking apart competitors' products to find strengths and
weaknesses.
• Functional benchmarking - a company will focus its benchmarking on a single function in order to improve
the operation of that particular fimction. Complex fimctions such as Human Resources, Finance and
Accounting and Information and Communication Technology are unlikely to be directly comparable in cost
and efficiency terms and may need to be segregated into processes to make valid comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a
specific fimction.
• Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis
of procedures performed.
The Indian banking sector is at a watershed. Brisk economic growth is opening up unprecedented opportunities.
Several Indian banks are pursuing global strategies, as Indian companies globalise and people of Indian origin
increase their investment in India.
At
the
same time a number of
global banks have stepped up their focus on India, keen to participate in the sector's growth. Today, the question
often asked is how competitive are Indian banks and do the practices at work in these banks compare against global
best practices.
To assess this, McKinsey & Co. launched five proprietary surveys with help from the Indian Banks Association to
profile leading Indian banks. The surveys administered were The McKinsey Personal Financial Services Survey;
Excellence in Retail Banking Survey; IT Benchmarking Survey; Organisational Performance Profile Survey; and
Asset-Liability Management Survey. We will here refer to the IT survey.
2.6.4 IT Effectiveness
The IT Benchmarking Survey profiled 11 leading banks in India. The survey based on proprietary methodology
assesses the level of IT capability and how it links to business performance across foin parameters - total spends on
technology, alignment of IT systems with corporate objectives, utility and complexity of solutions, governance and
management processes.
The survey reveals that IT effectiveness at the top Indian banks is world-class. Most banks in India have used IT to
achieve superior business performance, driven mainly by the cost advantage in India, the focus on avoiding legacy
systems, superior IT governance that often entails direct CEO involvement and competent outsourcing.
Today, Indian banks are some of the most technologically advanced banks with vast networks of branches
empowered by strong banking systems. Their product and channel distribution capabilities are on par with those of
the leading banks in the world. Sustained improvements in infrastructure and a strong focus on technology have
helped India become one of the most IT-efificient countries in the world.
• More focus on value adding activities: New private and foreign banks focus more on value-added activities
such as building new infrastructure like ATM networks and modem core banking systems; customer service
channels including call centres, Intemet banking and mobile banking;
sophisticated risk-assessment and pricing techniques; data warehousing/mining tools; and marketing tools
such as customer relationship management.
• Better IT talent management: Although IT governance and management are strong in most Indian banks;
new private and foreign banks have focused on promoting and nurturing talent. This is well reflected in their
compensation structure, which is highly linked to individual performance. Further, continual effort is made to
increase the distributed ownership of initiatives among all employees.
• Superior complexity handling: New private and foreign banks prove superior in managing both application
ORGANISATIONAL BF-HAVIOUR | 47
and infrastructure complexity. They are continuously advancing towards a centralised and consolidated
application portfolio. Better integrated and flexible applications are helping them to strengthen processes and
reduce the number of errors and maintenance costs. These banks also use infrastructure optimisation
technologies such as desktop and server virtualisation, grid computation, and Web service implementation.
To conclude, Indian banks have a strong competitive advantage on several dimensions such as alignment between IT
and business heads, management processes, and the ability to streamline administrative overheads and to channel
investments. But the survey suggests that several improvement opportunities exist for both new private and foreign
banks and old private and public sector banks. For instance, banks need to work towards streamlining commodity
areas such as application maintenance and infrastructure. They also need to focus on investing more in value adding
activities and outsourcing selectively. The PSU banks which is a major player in the Indian economy, have
obviously a long way to
go-
Further Reading
• An excerpt from McKinsey & Company's "Indian Banking: Towards Global Best Practices - Insights from
industry benchmarking surveys" released at the Bancon in November 2007.
• Beating the competition: a practical guide to Benchmarking. Washington, DC: Kaiser Associates. 1988. pp.
176. ISBN 978-1563650185. http://www.kaiserassociates.com/cs firstbookonbenchmarking.
• Camp, R. (1989). The search for industry best practices that lead 2 superior performance. Productivity Press.
*
• "GROWTH MANAGEMENT-Experiences of successfiil companies in Central Europe".
• Benchmarking: How to Make the Best Decisions for Your Practice[l].
• Retrieved from "http://en.wikipedia.org/wiki/Benchmarking".
• Categories: Strategic management.
compensation and rewards, performance appraisal, and training and development must
ORGANISATIONAL BF-HAVIOUR | 49
align with and support the new TQM culture. Information systems will need to be redesigned to measure and track
new areas such as service quality as also budgeting and resource allocation systems. Organisational structure and
design will be different under TQM: layers of management may be reduced and organisational roles will certainly
change. In particular, middle management and first line supervisors will be operating in new ways. Instead of
acting as monitors and agents of control, they will serve as boundary managers, coordinators, and leaders who
assist line workers in getting their jobs done. To deal with fears of layoffs, all employees should be assured that no
one will lose employment as a result of TQM changes: jobs may change, perhaps radically, but no one will be laid
off. Hyde (1992) has reconmiended that we "disperse and transform, not replace, midlevel managers." This no
layoff principle has been a common one in joint labour management ch^ge processes such as quality of working
life projects for many years.
Another systems consideration is that TQM should evolve from the organisation's strategic plan and be based on
stakeholder expectations. TQM is often proposed based on environmental conditions such as the need to cut costs
or demands for increased responsiveness to stakeholders. TQM should be purpose oriented: it should be used
because an organisation's leaders feel a need to make the organisation more effective. It should be driven by results
and not be seen as an end in itself. If TQM is introduced without consideration of real organisational needs and
conditions, it will be met by skepticism on the part of both managers and workers. ,
Implementation of large scale change such as TQM will inevitably face resistance, which should be addressed
directly by change agents. A key element of TQM in the service sector is working with customers, and the notion
of soliciting feedback/expectations from customers/clients and collaborating
with them, perhaps with customers defining quality, is a radical one in many oiganisations,, particularly those in
banks which are highly regulated with very little scope for flexibility. Historical worker antipathy to the use of
statistics and data in the human services may carry over into views of TQM, which encourages the gathering and
analysis of data on service quality. At another level, management resistance to employee empowerment is likely.
They may see decision making authority in zero sum terms: if employees have more involvement in decision
making, managers will have less. In fact, one principle in employee involvement is that each level will be more
empowered, and managers lose none of their fundamental authority. There will undoubtedly be changes in their
roles, however; they will spend less time on control and more on facilitation. For many traditional managers, this
transition will require training, self reflection, and time as well, as assurances from higher management that they are
not in danger of being replaced.
Resistance in other parts of the organisation will show up if TQM is introduced on a pilot basis or only in particular
programs (Hyde, 1992). Kanter (1983) has referred to this perspective as segmentalism: each unit or program sees
itself as separate and unique, with nothing to learn from others and no need to collaborate with them. This shows up
in the "not invented here" syndrome: those not involved in the initial development of an idea feel no ownership for
it. On a broader level, there may be employee resistance to industry examples used in TQM terms like inventory or
order backlog (Cohen and Brand, 1993).
There are several tactics which can be helpful in dealing with resistance to TQM implementation. Generally, they
have to do with acknowledging legitimate resistance and changing tactics based on it, using effective leadership to
enroll people in the vision of TQM, and using employee participation.
$6.51-billion Florida Power & Light, which won the Deming Prize in 1989; the $53.26- billion AT&T's Power
Systems Division in 1994, and the $38.05-billion Philips' Taiwan unit.
Even the great TQM corporations of the world, like the $48.88-billion Honda, the $55.03-billion Sony, and the
$190.84-billion General Electric, do not belong to it.
On November 14, 1998, when Srinivasan received the coveted prize, he joined the ranks of 163 CEOs and managers
who had received the award since it was instituted.
What makes Sundaram-Clayton's winning the Deming Prize for total quality (Company-Wide Quality Control (or
CWQC),)~an extraordinary feat is the fact that no global award for quality makes more demands of both the body
and the soul of the winning corporation, than this award.
Sundaram-Clayton's climb to the top of TQM started way back in 1979, when Venu Srinivasan took over from his
father, T.S. Srinivasan, as CEO after completing his MBA from Purdue University (US) in 1977. The SWOT
analysis he conducted, applying his B-school learning, revealed to the company's horror, that a 90% market share
was no insulation against top-class competition. Concluding that short- term tactics or defensive strategies would
not deliver what a long-term transition to excellence could, Srinivasan set his company off on quality sfreet.
In quick succession, Sundaram-Clayton's managers were exposed to the quality practices of global leaders, trained
in modern manufacturing techniques, and taught about Total Quality Control (TQC), first by Yoshio Kondo in a
workshop at the National Institute For Quality & Reliability in 1986. Srinivasan also set up a core taskforce to
initiate Sundaram-Clayton into the new religion of TQC.
The results of Sundaram-Clayton's total quality movement are reflected on the company's books. Its financial
indicators in the 5 years between 1992-93 and 1997-98 tell a tale of top-level performances.
Being a vendor to the auto-makers, its top line, of course, is tied to those of its customers: the Rs 2,048- crore Ashok
Leyland and the Rs 7,450-crore Tata Engineering & Locomotives Co. for air-brake systems, and the Rs 7,842 crore
Mamti Udyog and Hyimdai Motors India for castings. Thus, sales grew at an average rate of 35 per cent per annum,
between 1992-93 and 1996-97, although it shrank by 25 per cent in 1997-98, on account of the recession in the
automobile industry.
ORGANISATIONAL BF-HAVIOUR | 51
Likewise, the average growth in net profits in those 4 years was a stunning 83% per annum~a glowing tribute to
quality-led cost management-although it fell back by 35% in 1997-98. But, internally, its performance improved
consistently despite the recession, with tumover per employee rising by an average of 18% a year, and gross value
added climbing by an average of 12% per annum.
What Simdaram-Clayton's progress reveals is the all-important alignment, of the quality imperatives of the company
with the parameters used by an assessment framework, such as the one applied for the Deming Prize.
Sundaram-Clayton's integrated Deming's 10 parameters into the 4 sfreams of its quality practices, namely policies,
people, processes, and products, respectively. Its TQM model ensures Total Employee Involvement, Policy
Deployment, Standardisation, Kaizen, and Training, besides promoting employer - employee relations.
In short, everyone everywhere in the company is a custodian of quality.
63 I HUMAN aESOURCE MANAGEMENT
At Sundaram-Clayton, the Quality Policy deployment spreads across the entire organisational value- chain, including
the HR team. This is especially crucial in the context of the Deming Prize, which grades the performance of every
department and function separately—including the CEO himself.
Related reading: 'Total Quality Ltd', By R Sridharan, Business Today, 1999 (Financial reference is to figures of
1995-98 for Sundaram Clayton).
Li
t human
4. Process redesign
1. Develop alternative process scenarios
2. Develop new process design
3. Design HR architecture
4. Select IT platform
5. Develop overall blueprint for action and gather feedback
5. Reconstruction
1. Develop/install IT solution
2. Establish process changes
6. Process monitoring
1. Performance measurement, including time, quality, cost, IT performance
2. Link to continuous improvement
The following tìiree illustrations of BPR implementation in Banks, would give an idea of the need assessment and
the implementation strategy used with considerable success.
This facility would be available at 593 branches, and remote login at 269 branches. The bank's trade finance
solution, called EXIMBILLS, was intended to handle trade finance transactions efficiently and
enhance the range of services provided to corporates and network branches. In March 2004, SBI
announced that it would introduce 'anywhere banking' facility for its customers from over 9000
branches across India in the next two years. All branches in Mumbai would provide this facility
by December 2004. SBI also launched different customized loan programs to cater to various
sections of society depending on income levels and repayment capabilities. Interest rates and
repayment periods were tailor-made to suit the customer groups.
To boost its business, SBI entered into several alliances and tie-ups with automobile, insurance,
■ BEHAV.OUR •
mutual fund, project finance and medical equipment companies.
Auto Finance
Unlike other competitors that relied on reduced interest rates to get business, SBI extended the tenure of car loans
from five to seven years, thereby lowering the monthly debt repayment burden of the loan seeker. SBI entered into a
tie-up with Maruti, the largest automobile manufacturer in India, to provide loans for purchase of Maruti cars at the
rate of 10.05% and 11.25% for three years and above three years respectively. After the scheme was inttoduced, SBI
emerged as the largest financier for Maruti cars in India and the number of Maruti vehicles financed grew by 17% in
the fiscal 2003-04 over fiscal 2002-03.
#
BPRinlNGVysyabank
Established in 2002, the Bangalore-based ING Vysya Bank is an entity formed with the merger of erstwhile, \Vsya
Bank, a premier bank in the Indian private sector and ING, a Dutch financial services company.
Major outcome of BPR implementation
The service request fulfillment cycle was reduced by more than 90%, making the Bank's customers very happy By
making the bank easier for customers to interact with, helped save Rs 2.5 crore.
■ BEHAV.OUR •
The issues
Financial institutions are perceived to be opaque and inwardly focused. And ING Vysya Bank's worldwide market
research suggested the same: customers do not feel in control of their money when dealing with financial services
companies.
ORGANISATIONAL BF-HAVIOUR | 57
international agency for standardisation composed of the national standards bodies of 90 countries.
• Underwent major revision in 2000.
• Now includes ISO 9000:2000 (definitions), ISO 9001:2008 (requirements) and ISO 9004:2000 (continuous
improvement).
The revised ISO 9000:2000 series of standards is based on eight qualify management principles that senior
management can apply for organisational improvement:
• Customer focus
• Leadership
• Involvement of people
• Process approach
• System approach to management
• Continual improvement
• Factual approach to decision-making
• Mutually beneficial supplier relationships
The requirements call for the processes to be comprehensively documented as procedures to which staff
are expected to consistently conform. This is with the aim of meeting the needs and expectations of the
customer and helping organisations to comply with applicable regulations. Implementation involves
making production procedures explicit (say what you do), documenting them, ensiuing they are
followed and checking they are effective. A quality management system can be audited by an
independent certification body as conforming to the standard (leading to an ISO 9001: 2008 certificate),
although this is not compulsory unless it is a market or regulatory requirement.
The basic premise for all ISO processes is "Document what you do;do what you document". ISO does
not prescribe any standards of its own, it is for the organisation to define how and what must be done
with a process or a product. Though ISO has generally been associated more with the manufacturing
sector, a number of service industries including Banks, have got major activities and functions certified
under the ISO series.
Assessments for certification are carried out against the ISO 9001: 2008 standard, which is the only
certification standard in the ISO 9000 family. To comply with ISO 9001: 2008 an organisation needs to
review its processes in accordance with the standard's requirements in order to meet the needs and
expectations of the 'customer base'.
The organisation completes a Quality Manual, outlining the implementation of quality management
procedures and how the ISO 9001: 2008 requirements are being met.
When the quality system and requirements are in place and established, organisations like the British
Standards Institution recommend a pre-assessment by a third party to identify areas where an
organisation may not be operating according the standard's requirements and to help make effective
change towards that goal.
Organisations then seek an independent auditing by a certification body to check conformity with the
requirements of the standard and to ensure that they are working in practice. However, an organisation
can implement ISO 9001: 2008 without having its management system audited and certified. ISO does
not itself certify organisations. Most countries have formed accreditation bodies that in turn approve
individuals and organisations to audit and certify organisations applying for ISO 9001:2008 compliance
certification.
skills
Training in understanding the standards may be required. Actions taken to meet implementation to the requirements are
left to the organisation itself. The organisation then needs to address the issues needed to comply with the standards.
The ISO requirements cover a wide range of topics:
• Management commitment to quality.
• 'Customer' focus.
• Adequacy of an organisation's resources.
• Employee competence.
• Process management (for production, service delivery and relevant administrative and support processes).
• Quality planning.
• Design, purchasing, monitoring and measurement of its processes and products.
• Processes to resolve customer complaints.
• Corrective/preventive actions.
• A requirement to drive continual improvement of the organisation.
• A requirement to monitor 'customer' perceptions about the quality of the goods and services it provides.
Staff time
While this may vary depending on the size of the organisation and the change that has to be implemented, estimates
from organisations and consulting bodies indicate that it can take from between 6 and 18 months to implement.
Procedure
ORGANISATIONAL BF-HAVIOUR | 59
Once a decision has been taken to get a function, process or a branch as in the case of banks, certified under the
appropriate ISO series, the management appoints an internal champion as the Management representative who will lies
closely with the external consultant and all the concerned officials in various sections.
Each procedure that is covered under the scope for ISO certification is carefully documented with paras and subparas
with clear numbering so that reference to any procedure is accurate and once completed, gets a sign off by the
departmental head as well as the MR. Thereafter, all activities of the section are carried out strictly in accordance with
the laid down procedure. For example, if it is mentioned that the customer relations executive in the bank would pick up
a phone call within 2 rings, compliance can be monitored easily. Any deviation has to be rectified as per a laid down
procedure by the specified authority. Once all the procedures within the planned set of activities is completed and
practiced for a reasonable amount of time, the MR presents the case to the external. Certifying Authority, who on being
satisfied with the implementation, grants the ISO certification to the organisation or branch as the case may be.
Periodic reviews happen, generally eveiy year or six months and in case deviations are not rectified within reasonable
time, the certification may even get revoked.
2.7.15 Q C Implementation
Explain the concept to the employees and invite them to volunteer as members of Quality Circles. Nominate senior
officers as facilitators, form a steering committee.
ORGANISATIONAL BF-HAVIOUR | 61
i human -----------
Arrange training of coordinators, facilitators in basics of Quality Circle approach, implementation, techniques and
operation. Facilitator may provide training to Circle leaders and Circle members. Training to include, brief orientation
programme for top management, training of facilitators as well as Circle leaders and members.
The operation of quality circles involves a set of sequential steps as under:
1. Problem identification: Identify a number of problems, decide the priority and select the problem to be taken up
first.
2. Problem is clarified and analysed by basic problem solving methods.
3. Generate alternative solutions: Identify and evaluate causes and generate number of possible alternative
solutions, and select the most appropriate solution. Discuss and evaluate the alternative solutions by comparison
in terms of investment and return from the investment.
4. Prepare plan of action for converting the solution into action plan and implement solution as a test case.
5. The management evaluates the recommended solution. Then it is tested and if successful, implemented on a fu ll
scale. ,
Qualify Circles also help to develop internal leadership, reinforce worker morale and motivation, and encourage a
strong sense of teamwork in an organisation. Other benefits include higher quality, improved productivity, greater
upward flow of information, broader improved worker attitudes, and job enrichment.
Qualify Circles are not limited to manufacturing firms only. They are applicable for variety of organisations where there
is scope for group based solution of work related problems. Quality Circles are relevant for factories, firms, schools,
hospitals, universities, research institutes, banks, government offices etc. The P. W.D. of Maharashtra has set an
example for the Government organisations marching on the path of Quality Improvement.
2.7.16 QC in Banks
As for banks, the following excerpt from the Cañara Bank website is illustrative of the bank's approach.
Quality Circle is a voluntary group of employees in the same work area, coming together, working as a team, solving
work related problems resulting in self development and organisational benefit. The concept has been built on the basic
foundation of "Participative work culture" with motivation and involvement of employees at grass roots level exploring
their potentials, creativity and capabilities.
With a view to provide greater exposure and wide experience. Quality Circles which have successfully completed their
projects are nominated -
• To participate in Bank's Apex Quality Circle Contest.
• For p|resentations at external forums like - Local Chapter Conventions and Annual National Convention on
Quality Circles(NCQC) organised by Quality Circle Forum of India (QCFI).
Apart from the above, QC Teams are being nominated to International Conventions on Quality Control Circles
(ICQCC) organised by member countries. Several of our QCs have won prizes and accolades at these conventions.
4
4
2.7.17 Six Sigma
Six Sigma is a fact-based data driven structured methodology that is used to create breakthrough improvements in
business processes with a strong focus on customer needs. It is used to solve tough business problems when the root
cause of the problem or the solution is not known. Six Sigma is the most powerful methodology that is currently
available to attack and eliminate "pain" areas within a company. In today's business climate, as more and more
ORGANISATIONAL BF-HAVIOUR | 63
companies practice Six Sigma, it has become imperative for all companies to initiate the Six Sigma process in order just
to stay in business.
The number of companies that have deployed Six Sigma runs into the thousands. Six Sigma has been deployed in all
types of industries including manufacturing, IT, ITES, services, healthcare, design, BPO etc. Some companies that have
realised huge benefits are GE, Motorola, Caterpillar, Microsoft, Ford, Wipro, HP etc.
Six Sigma began in 1986 as a statistically-based method to reduce variation in electronic manufacturing processes in
Motorola Inc in the USA. Today, twenty-something years on. Six Sigma is used as an all- encompassing business
performance methodology, all over the world, in organisations as diverse as local government departments, prisons,
hospitals, the armed forces, banks, tihe tiffin service (Mumbai dabbawallahs) and multi-national corporations.
The UK Department for Trade and Industry defines Six Sigma as: "a data-driven method for achieving near perfect
quality. Six Sigma analysis can focus on any element of production or service, and has a strong emphasis on statistical
analysis in design, manufacturing and customer-oriented activities." June 2005. Six Sigma can be evaluated at three
different levels: As a metric, as a methodology, and as a management system. Six Sigma is a top-down solution to help
organisations align their business strategy to critical improvement efforts, mobilise teams to attack high impact projects,
accelerate improved business results and govern efforts to ensure improvements are sustained.
The word is a statistical term that measures how far a given process deviates from perfection. To achieve Six Sigma
Quality, a process must produce no more than 3.4 defects per million opportunities. An 'opportunity' is defined as a
chance for nonconformance, or not meeting the required specifications. This means, one needs to be nearly flawless in
executing the key processes.
In 1995, General Electric's CEO Jack Welch decided to implement Six Sigma in GE, and by 1998 GE
claimed that Six Sigma had generated over three-quarters of a billion dollars of cost savings. (Source:
George Eckes' book. The Six Sigma Revolution). In Jack Welch's own words "Nothing compares to the
effectiveness of six sigma when it comes to improving a company's operational efficiency, raising its
productivity and lowering its cost. It improves design processes, gets products to market faster with
fewer defects and builds customer loyalty. Perhaps the biggest but most unheralded benefit of six sigma
is its capacity to develop a cadre of great leaders( pg.245- "Winning" by Jack Welsh and Suzy Welch).
By the mid-1990's Six Sigma had developed into a transferable 'branded' corporate management
initiative and methodology, notably in General Electric and other large manufacturing corporations, as
also in organisations outside the manufacturing sector. By the year 2000, Six Sigma was effectively
established as an industry in its own right, involving the training, consultancy and implementation of
Six Sigma methodology in all sorts of organisations around the world.
Six Sigma is a methodology which requires and encourages team leaders and teams to take
responsibility for implementing the Six Sigma processes. Significantly these people need to be trained
in Six Sigma's methods - especially the use of the measurement and improvement tools, and in
communication and relationship skills, necessary to involve and serve the needs of the internal and
external customers and suppliers that form the critical processes of the organisation's delivery chains.
Training is therefore an essential element of the Six Sigma methodology. Six Sigma terminology
employs attractive names for other elements within the model, for example 'Black Belts' and 'Green
Belts', which denote people with different levels of expertise (and to an extent qualifications), and
different responsibilities, for implementing Six Sigma methods. Six Sigma teams and notably Six
Sigma team leaders ('Black Belts') use a vast array of tools at each stage of Six Sigma implementation
to define, measure, analyse and control variation in process quality, and to manage people, teams and
communications.
When an organisation decides to implement Six Sigma, first the executive team has to decide the
strategy - which might typically be termed an improvement initiative, and this base strategy should
focus on the essential processes necessary to meet customer expectations. This could amount to twenty
or thirty business process. At the top level these are the main processes that enable the organisation to
add value to goods and services and supply them to customers. Implicit within this is an understanding
of what the customers - internal and external - actually want and need.
A team of managers ('Black Belts' normally) who 'own' these processes is responsible for:
• identifying and understanding these processes in detail, and also
• understanding the levels of qualify (especially tolerance of variation) that customers (internal
and external) expect, and then
• measuring the effectiveness and efficiency of each process performance - notably the 'sigma'
performance - ie., is the number of defects per million operations.
Most practitioners and users of Six Sigma refer to Motorola's early DMAIC acronym (extended since to
DMAICT) as a way of reinforcing and reminding participants what needs to be done.
• M - Measure performance
• A - Analyse opportunity
• I - Improve performance
• C - Control performance, and optionally:
• T - Transfer best practice (to spread the learning to other areas of the organisation)
ORGANISATIONAL BF-HAVIOUR | 65
A measurement of four sigma equates to approximately 6,200 DPMO, or around 99.4% perfection. A measurement of
five sigma equates to just 233 defects per million opportunities, equivalent to a 99.98% perfection rate, and arguably
acceptable to many businesses, although absolutely still not good enough for industries that need that 100% safety
record.
into a small series of letters and nmnbers, hand-painted on each client's tiffin. For instance, Bhalekar's lunch would
carry the coding 3MC4, 3 for the carrier who delivers in Nariman Point, MC for his office in Mafatlal Centre and 4
for the floor his office is located on.
In another code below it, 10 is the number for the Churchgate station where the tiffm is offloaded and D for Dahisar
station where it was collected. So advanced, and so loved by the people, is the service that you can order it from
online grocery store webrishi.com. Despite such facilities and efficiency-a level which Forbes noted "western
businesses can only aspire to" - the service comes at an amazingly cheap fee of Rs 150 a month, the price determined
somewhat by the recession in the business. From its peak days in 1955 with deliveries of over two lakh tiffins per day,
the century-old trade received its first blow when bank employees began leaving home early with the change in office
timings in the late 1960s. The rapid closure of mills in the 1980s-'90s also robbed the dabbawallah of his largest
clientele, the mill
workers. Now, canteens and food courts in the office districts have taken their toll.
>
The sigma scale is exponential. The difference between the DPMO equating to each whole number more than doubles
as one moves up through the scale. By a rough calculation, 'seven sigma' would equate to about 2 defects per 100
million opportunities which is perhaps a little over-demanding even for zero defect industry, and that is perhaps why
nobody looks beyond six sigma.
Let Us Sum Up
In unit 2 we have gone through various aspects of an organisation as well as the groups of employees as well as
management that make up the structure.
Formation of small groups and group dynamics play a vital role.
We also understood how effective leaders develop and fimction and how they build functional teams. In
benchmarking we have briefly looked at the process and how it impacts organisational behavior.
In the long chapter on quality processes, we have looked at traditional techniques of TQM, BPR and ISO, and also
understood the implications of quality circles and the now widely prevalent six sigma process.
Keywords
Behavioural Djmamics
ORGANISATIONAL BF-HAVIOUR | 67
Cyber Groups
Leadership and Team Effectiveness
Leadership Develops Leaders
The Six Leadership Styles at a Glance
Human Resource Implications of Benchmarking
Benchmarking of IT capability in Indian banks.
TQM Implementation Process
Business Process Reengineering
ISO 9000 Series
Quality Circle
Six Sigma
Six Sigma Conversion Table
Terminal Questions
• Discuss briefly the history of TQM Implementation in history.
• Discuss how Business Process re-engineering can be implemented in the Indian Banking Industry. Cite some
examples of actual implementation.
• Elaborate on the feasibility of introducing quality circles in banks branches.
• Six sigma is considered the most efficient quality measure. Elaborate with examples from the Indian scenario.
References
Cunningham, J. B. & Eberle, T. (1990). "A Guide to Job Enrichment and Redesign," Personnel, Feb 1990, p.57
in Newstrom, J. & Davis, K. (1993). Organisation Behavior: Hmnan Behavior at Work. New York: McGraw-
STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 Change and Development
3.3 Change Agent
3.4 Managing Change
3.5 Responsibility Charting
Let Us Sum Up
Keywords
Terminal
Questions
References
3.0 OBJECTIVES
After reading this unit, you should be able to:
• Understand the significance of change in organisations and how they affect individual reactions
and career growth
• The role of the change agent and aligning change to HR initiatives
• Understanding and managing change
• Responsibility charting and how it can be used to advantage
3.1 INTRODUCTION
Change management is a systematic approach to dealing with change, both from the perspective of an
organisation and on the individual level. A somewhat ambiguous term, change management has at least
three different aspects, including: adapting to change, controlling change, and effecting change. A
proactive approach to dealing with change is at the core of all three aspects.
Successfiil adaptation to change is as crucial within an organisation as it is in the natural world. Just like
plants and animals, organisations and the individuals in them inevitably encounter changing conditions
that they are powerless to control, be it changes in the business environment (such as a fluctuation in the
economy, or a threat from a competitor) or at a ny)re individual level, trying to respond suddenly to
changes in the workplace due to new policies, technology or even a new boss.
Change management entails thoughtfiil planning and sensitive implementation, and above all,
consultation with, and involvement of, the people affected by the changes. Change should rarely be
forced on people, it must be gradual, well planned, realistic, achievable and measurable. Identify what is
expected to be achieved, who will be affected, and how much is to be changed and when. These aspects
if considered, exhibit an employee concern.
Change does not get sold to employees, instead, it needs to be understood and managed in a way that
people can cope effectively with it. Change can be unsettling, so the manager logically needs to be a
settling influence. It is important to check that people affected by the change agree with, or at least
understand, the need for change, and have a chance to decide how the change will be managed, and to
be involved in the planning and implementation of the change. Managers need to communicate face-to-
face with their people too if they intend to manage an organisational change. Email and written notices
are extremely weak at conveying and developing understanding.
Even in successfiil and professional organisations, change can be quite difficult to accomplish; it can be
like trying to change a person's habits. The increased body of research, practice and tools available,
provides a clear perspective on overall organisational change and development, along with sufficient
guidelines and action points for successful change.
There are many approaches to guiding change ~ some planned, structured and explicit, while others are
more organic, and implicit. Some approaches work fi-om the future to the present, for example,
involving visioning and then action planning about how to achieve that vision. Other approaches work
from the present to the future, for example, identifying current priorities (issues and/or goals) and then
action planning how to address those priorities. Different people often have very different ~ and strong
~ opinions about how change should be conducted and arguments as to how to implement whether at
one go or in phases and various modalities.
To initiate organisational change and begin guiding successfiil change efforts, the change agent should
have at least a broad understanding of the context of the change effort. This includes understanding the
basic systems and structures in organisations, including their typical terms and roles. This requirement
applies to the understanding of leadership and management of the organisations, as well. That is why
graduate courses in business often initially include a course or some discussion on organisational theory.
*
Organisational change should not be conducted for the sake of change. Organisational change efforts
should be geared to improve the performance of organisations and the people in those organisations.
Therefore, it's useail to have some understanding of what is meant by "performance" and the various
methods to manage performance in organisations.
Dave Ulrich has completed extensive research in this area as well. His research, validated by HR
professionals and their line manager "clients", showed that successfiil change agents had the ability to:
• Diagnose problems - Understanding both the business drivers and the organisation well enough
to identify performance issues and analyse their impact on short and long term business results.
• Build relationships with clients - Forming partnerships with mutual responsibility for the
outcomes of the change effort. Because the risk is higher than with most other HR roles the level
of trust required is much higher.
• Ensure that the Vision is Articulated - Inteipreting the hopes and motivations of the workforce
through the Vision statement.
• Set a Leadership Agenda - This requires the HR executive (if the change agent) to understand
intimately the dynamics, history and competencies of the leadership team and to have the tenacity
to insist on the agenda's accomplishment.
• Solve Problems - When dealing with change, the problems encoimtered are often loaded with
emotional and political dynamics. The change agent must possess the insight to recognise the
problem, the sensitivity to see its importance to those involved, the courage to take honest and
often difficult measures to resolve it and the credibility'to be heard.
• Implement Plans to Achieve Change Goals - Successful organisational change on any
significant scale can be attributed to the right strategy and appropriate change in organisation
culture. Culture change, in turn, relies heavily on aligned and supportive people policies, systems
and processes. In short, the implementation plan is an HR plan for both the HR function and for
management.
The four key factors for success when implementing change within an organisation are:
• Pressure for change - demonstrated senior management commitment is essential.
• A clear, shared vision - you must take everyone with you. This is a shared agenda that benefits
the whole organisation.
• Capacity for change - you need to provide the resources: time and finance.
• Action - and performance - "plan, do, check, act" - and keep commimication channels open.
The most important contributions to be made through the change agent role are those that sustain the
organisation's current performance and assure its future performance by;
• Enabling people to work effectively as they plan, implement and experience change
• Increasing people's ability to manage future change
Where change is needed to be made quickly, probe the reasons - is the urgency real? Will the effects of
agreeing to a more sensible time-frame really be more disastrous than presiding over a disastrous
change? Quick change prevents proper consultation and involvement, which leads to difBculties that
take time to resolve.
The chief insecurity of most staff is change itself Senior managers and directors responsible for
managing organisational change do not, as a rule, fear change - they generally thrive on it. People do
not relish change, they find it deeply disturbing and threatening; people's fear of change is as great as
the management's own fear of failure.
109 I HUMAN RESOURCE MANAGEMENT
6. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable
numbers of initiatives. Finish current stages before starting new ones.
7. Don't let up - Foster and encoinage determination and persistence - ongoing change - encourage
ongoing progress reporting - highlight achieved and future milestones.
8. Make change stick - Reinforce the value of successful change via recruitment, promotion, new
change leaders. Weave change into culture.
Perhaps the best study of organisational development was the one conducted by Sloan (1964).
According to Sloan, General Motors Corporation divided its activities into engineering, production,
sales and finance; set up committees to coordinate the policies at the center, while decentralising
administration, established financial controls, added engineering, research and technical staff; and made
continuous changes in technology and products.
In India, in the health field, the organisational structural changes made by Apollo Hospitals recently to
expand its operations is an example. It has created several divisions keeping in view its products and
services it wishes to market, and appointed chosen leaders in the health field to provide leadership. In
the industrial field, organisational structural changes being made by Birlas, Tatas, and Ambanis are
examples.
Anil Singh
Dilip Mohite
Chitra Iyer
1. Identify Tasks: Have your team list activities not clearly assigned to a person or group of people. Use the
following examples to spur your own discussion (some of these may already be assigned to your team). Aim
for a list of no more than 20 items.
Meeting Respomibittties
• Sending out meeting material, agendas, and minutes.
• Setting up the meeting room; cleaning up after meetings.
• Taking minutes.
• Facilitating meetings.
• Arranging meetings with Managers.
• Helping the group when it's stuck.
• Maintaining files.
• Leading warm-ups.
• Leading the meeting critique. ,
• Containing digression and monopolising; using other discussion skills.
Project Responsibilities
• Maintaining the picture book format.
• Gathering data.
• Plotting charts.
• Maintaining files.
Education/Training Responsibilities
• Teaching statistical tools
• Teaching project management skills
• Teaching meeting management skills
2. Create a Chart; Set up charts as illustrated above. Then list the tasks identified in the group meetings and
discussions in the TASK Colunm.
3. Work Through the Chart: Work through the chart one task at a time, having each member mark (with an
X or initials) the colxunn representing the group or person he or she thinks is responsible for that task.
(NOTE: Have each member use a different colour marker when marking the columns to simplify later
discussion). Do ttiis for every task listed.
Instructions
4.
4.
4. Di
scuss the
Answers: Discuss the answers, again working through the matrix one task at a time. Do not move to the
next item imtil the team has reached consensus on which person or group is responsible for that task. You
can decide to rotate a responsibilify between people or groups, but you must clearly set down procedures for
how and when to switch.
I ANAGEMENT
Let Us Sum Up
In unit 3 we have tackled an issue of continuous interest to all organisations niamely Change Management.
Resistance to change and responsibility for managir>g change are common place.
The change agent is preferred from the HR Dept. and he has very clearly identified duties and responsibilities.
Managing change effectively is important for continuous growth.
78 I
We also studied responsibility charting and its impact on effective implementation of a task.
Keywords
Change agent
The Prosci Study of Top Trends in Change Management
The Leadership Agenda for Change
John Kotter's Steps to Successful Change
Responsibility Charting"
Key Elements
Sample Chart
Terminal Questions
1. The H R manager is considered the most appropriate person as change agent. Do you agree? Elaborate with
reasons.
2. Write a short note on John P Kotter's eight steps to successful change.
3. What do you understand by responsibility charting? Elaborate with the help of a sample chart.
References
• John Fisher's personal change theory
• Conscious Competence - a personal change model in leaming and development
• Elisabeth Kiibler-Ross's Five Stages of Grief - primarily for dealing with death and
bereavement, but helpfiil for understanding change reaction to other types of major shock and loss
• Modem principles which underpin successfiil change in organisations
• Sharon Drew Morgen's Facilitation model - for change, coaching, decision-making and selling
Web References
• ChangingMinds.org
• Employee Commimication: 6 Steps to Communicate Change - Marcia Xenitelis
CHANGES I 79
• Change Management and Employee Communication Strategies - Marcia Xenitelis
»
• Reasons Why Change Fails - Richard Derwent Cooke
i
STRUCTURE
4.0 Objectives
4.1 Introduction
4.2 Traditional Role ofHRM in Indian Banks
4.3 Expectations from HR Dept. ,
4.4 HRMinBanks
4.5 Major HRM Challenges facing Banks
4.6 Core Banking and People Challenges
Let Us Sum Up
Keywords
Terminal Questions
References
i
IN fNDSAM 8ANKS
4.0 OBJECTIVES
After reading this unit, you should be able to:
• Understand the traditional role ofHRM in Banks >
• Need for HRM in Banks
• Expectations frojh the HRD^t.
• Conflict of new and old work cultures
• Major challenges faced by HRM
• Core Banking and People Challenges
4.1 INTRODUCTION
People, rather the employees are the asset of any organisation. An organisation, whether it is a
manufacturing concern or service oriented, cannot function without the active participation of people.
Banks as custodians of people's money and trust, have a major responsibility to streamline the HR
activities of its most vital resource. ,
L
HUi'i/IArJ RESOURCE IVIA^jAGEi^lENT
life with constant interaction with the customers. In fact in the past, the non performers were routinely moved to the staff
training colleges as faculty; the deeply committed and devoted were overlooked in selection to these training institutions. The
result: poor performance by these trend setting and concept building institutions. The list can be expanded but that will make
the picture much bleaker. Moreover, these training institutes were not even part of the HR department. An Asst. General
Manager headed these training colleges independently in most of the public sector banks. The task before the HR departments
HRM IN INDIAN BANKS | 100
82
Development and training are an ongoing process; after the initial training, the employees are provided with internal
development programs, business-related studies and professional qualifications, and the bank also offers the opportunity to
develop skills through extemally accredited courses. These are designed in conjimction with top universities and business
schools including postgraduate, MBA programs.
Product training is provided e.g. cash handling training, operational training etc. to help the staff gain hands on exposure about
the products. The bank provides a lot of skill related training by way of credit workshops, sales & negotiation skills, project
management, etc. to help staff enhance their skill in specialised areas. On the-job training continues and staff are given job
rotation to increase their exposure to more areas of operations.
The bank sends out CDs and books to staff for self study on credit, operations, trade finance, etc. In addition, by way of more
advanced MDP programs, employees are given strategic perspectives and business goals management skills; people
management, networking and customer focus abilities to better understand and manage their jobs. Specific Competency
Training ensures that the staff excels in product knowledge, understands regulatory procedures and is equipped with unique
techniques needed for a given position.
severance packages.
Performance at all levels is closely monitored and feedback provided to staff on areas of improvement and linked to both
financial and non-financial rewards. The bank also provides various incentives in the form of bonuses to encourage the
employees and motivate them to continue with their high performance. These include Spot Award, Surprise Arrears, Best
Performer Award and Service Quality Awards.
Cooperative Bank, Kangra Central Cooperative Bank, Udaipur Urban Cooperative Bank, Kollam District Cooperative Bank,
Kerala State Cooperative Bank and Panchsheel Mercantile Cooperative Bank have started to use and offer centralised Core
Banking too. The three standard software used are Flexcube from iFlex Solutions, Finacle from Infosys and B@ncs from
TATA Consultancy Services.
Surprisingly in countries such as Japan, core banking is still in its early stages. Although having autonomous reign over their
currency for over half a century, the consumers themselves do not see much use for such services - low demand, thus less
services. It is only within the last decade that banks started placing ATMs outside the bank premises. Many of the bank
services must be done in person at the account holder's^egistered branch. Japanese banks rely heavily on paperwork and
physical evidence, such as the personal chop or Inkan - thus rendering core banking impractical.
Let Us Sum Up
In unit 4 we have understood how from a traditional routine function HRM has evolved in Indian Banks.
The challenges faced by HRM with regard to new and old cultures as also due to technology changes have been examined.
We have also understood the human implications of technology especially with regard to core banking
Keywords
Narasimham Committee Economic
Liberalisation
Changing role and Mind Set of People and Management Core banking
Voluntary retirement scheme
Terminal Questions
1. Elaborate on the changing role of HRM in the banking industry.
2. What are the major HRM challenges facing banks especially with regard to introduction of technology?
3. What are the management's expectations from HRM?
4. Short notes on "Core banking".
Webiiography
• http://www.emeraldinsight.com
• http://www.accesskm.com
• http://www.KnowledgeStorra.com
• http://www.KMBook.com
• http://www.brint.org/
KNOWLEDGE MANAGEMENT
STRUCTURE
5.0 Objectives
5.1 Introduction
m
5.2 Concept of Knowledge Management
5.3 Significant Features of Knowledge Management
5.4 Knowledge Management in Banks
5.5 Application of Knowledge Management in Banks
5.6 I.T &. Database Management
5.7 People Dimension of Knowledge Management
5.8 Knowledge Management Applications in Banks - Current & Future
Let Us Sum Up
Keywortk
Terminal Questions
References
5.1 INTRODUCTION
The internet revolution has changed the very basis of knowledge dissemination. From the days of a
research scholar painstakingly going through manuscripts, to analyse and summarise information, the
amount of data being made available in any format today is literally mind blowing. Thus the traditional
kingdom of knowledge has now multiplied into a galaxy of information yielding desktops that have
changed the very nature of knowledge as something precious and difficult to come by.
Nearly every day, everyone survives a flood of information that is trying to drown us in its depths.
Companies don't just hire people; they hire a pool of knowledge base that has developed into talent over
time. Some companies have the requisite resources to enrich that pool whereas others let that pool dry
up. This simple realisation about the ubiquitous term knowledge which is often used in today's scenario
in the manner of knowledge economies, knowledge organisations and more recently knowledge banks
has made Knowledge Management in Banks interesting and rewarding.
Some researchers have defined knowledge in the context of know-why, know-what, know- who and
know-when, in order to relate it with managing knowledge concepts. For instance. Van den Bosch and
Van Wijk (2001) presented a conceptual framework of managerial knowledge integration. Know-what
can be defined as something people carry round in their minds and pass on to each other. In contrast.
Know-how embraces the ability to put Know-what into practice. Japanese researchers like Nonaka,
Toyomo and Kormo (2002) defined Knowledge by emphasizing on the relative, d)mamic and
humanistic dimensions rather than the traditional western epistemology (the study of knowledge) that
k
focused on absolute, static and non-human view of knowledge. The term 'knowledge' is one of the more
confiising aspects of KM. The terms 'information' and 'data' are often used as synonyms for the term
knowledge. In fact they are different from one another.
5.2.1 Types of Knowledge Management
Basically, knowledge is of two types. They are explicit and tacit knowledge.
The term explicit knowledge can be defined as that component of knowledge which can be codified and
transmitted in a methodical and prescribed language. For example, documents, databases. Webs, E-
mails, charts, etc.
On the other hand, tacit knowledge is personal, intuitive, contextual, and difficult to formulise, and
record or articulate. It is built out of experience and is stored in the minds of people.
m
It is estimated that tacit knowledge constitutes about 70% of all organisations' knowledge base and is
difficult to identify and convert into real value unless a structured approach is adopted to manage
knowledge through KM techniques involving intensive dialogues, discussions and sharing in teams.
KM refers to management of knowledge. It is an important component of organisational intangible
assets. Continuous changes in the market expectation and the demand for new products have replaced
capital and labor intensive firms by knowledge-intensive firms. It is a concept in which enterprise
gathers, organises shares and analyses ijs knowledge in terms of sources, documents and skills of the
people.KM is also viewed as a conscious strategy of putting knowledge into action as a means to
increase organisational efficiency.
In practical application, it covers identifying and mapping of intellectual assets, generating knowledge
for competitive advantage, making large amount of corporate information accessible, and sharing of
best practices and technology within the organisation.
The companies where KM initiative are already in place and practiced with success may be called
Knowledge Intensive Firms (KIF). A Chief Knowledge Officer (CKO) as he is called, is mainly
assigned the task of managing the reservoir of knowledge residing in the individual employee and
setting up a mechanism by which knowledge is shared by all concerned that would otherwise remain in
some remote department of the company. Under the stewardship of CKO, certain number of knowledge
harvesters fimction whose main task is to identify knowledge assets in the company with a view to
harness them for the benefit of company; ultimately it may result in creating new clientele base or
substantial increase in sales tumover year-on-year.
The key drivers for KM initiative are:
1. Rapid advances in the field of Information and Communication Technology (ICT) which has
revolutionised the way in which businesses are being carried out.
2. Extremely high business competition arising because of the globalisation of economies
worldwide; this is particularly relevant in emerging economies like India.
3. Increased complexity of business and complexity of management.
4. Faster pace of innovation because of growing industry competition.
5. Increased mobility of workforce.
6. Growing recognition across all industries regarding the need and significance of ongoing and
lifelong learning etc.
m
5.3 SIGNIFICANT FEATURES OF KNOWLEDGE MANAGEMENT
1. KM initiatives can substantially contribute towards cost cutting, product and process
innovations, competitiveness, and hence can ensure improved operational efficiency as well as
better systems, procedures and intemal control systems. However, it may not be possible to
establish any direct relationship between investment in KM and its impact on profitability (like,
ROI for example) of the firm. This is because KM seeks to transform the entire organisation by
bringing about desired qualities in several fronts such as openness in interpersonal
i
Knowledge Management as a topic has often been associated with other business setups like IT than
banks. So for the entire Banking, Finance and Insurance (BFSI) Sector, understanding the importance of
Knowledge Management as a competitive tool helps assist them in being more contemporary as from
the bank's perspective, it is important to be well informed when dealing vidth customers who may be
equally knowledgeable. Peter Dmcker had renamed employees as knowledge workers and stressed on
Knowledge Management because Knowledge management prevents tiie organisations' collective
knowledge
KNOWLEDGF: MANAGEMENT | 95
from perishing while the individual employee's knowledge will help the organisation achieve optimum
organisational efficiency. The essence of business is to convert its knowledge into goods and services
required by the customer.
MENT I 97
"Command and Control" style of working and encourage participative attitude among employees.
3. Instant messaging: Instant messaging system helps every day, more people to collaborate with coworkers,
immediately sharing business information across widespread geographical locations and time zones. It has the
advantage of connecting people in real time across the time zones.
4. Communities of Practice: KM technologies provide a convenient and effective way to form 'Communities of
Practice' (COP), around areas of common interest or projects. Communities are subgroups of people who have a
shared specialisation, interest or project. Users can ask and answer questions, as well as passively read about the
practice area. Discussion forums help in sharing information among commimity members.
5. Document and Content Management: Document management is a systematic method for storing, locating and
keeping track of information that is valuable to a business. A structured document management system can
increase productivity by workers reusing existing documents and expertise already generated.
6. Web Intelligence: It brings together some key information pieces vital for an organisation's survival by focusing
on the organisation's information, public relations and market intelligence needs. It also helps integrate the
organisation with its customers, so as to offer a seamless, time- independent blend of services.
7. Personalised Portal Interface: A personalised, portal interface becomes a great motivator to receive and share
information. Different users are able to have different home pages based on their roles. One single screen on the
computer enables the user to find relevant information in minimum possible time.
-1
KNOWLEDGF: MANAGEMENT | 100
I HUMAN
Database marketing can be defined as "A Direct marketing technique emanating from the use of data collection on
actual and prospective customers".
Since banking in its core a service industry, most transactions are dependent on the type of relationships that the banks
share with those who trust them. In other words, relationship marketing can be termed as the pillars of bank stability.
Database Management and database marketing adds to the strength of this pillar by helping in knowing a clear picture
of the customer profile, to understand who requires what and the specific type of service and meet such expectations as
closely as possible.
These databases, also called as the Customer Information Files have to be then indexed and scored according to the
probability of the their purchasing a product or service. One of the direct and earliest application of the databases was
by Mailers or Booklets of information to all customers that would advertise the Bank and give information of
products /services. With technology, databases have been integrated and logically used to produce personalised
packages for its clients. Now, different strategies and styles began to emerge for different banking institutions.
5.7.3 Assumptions
I HUMAN
A1--.Increased use of systems will enable the banks to enhance on their quality of performances.
A2~The greater the involvement of systematised databases in the functioning of the bank the quicker
will be its overall processing times and faster will be its services.
A3~Customers becoming lifelong partners of the bank will be an easy task. This not only ensures
revenues but also creates opportunities to build on business with new people coming from references.
The study would help to bring abou^ a comparative pictur» depicting the current level of the use of
databases in Indian banks of three categories:
(a) Private sector banks
(b) Nationalised banks
(c) Co-operative banks.
5.7.4 iUfethodology
Methodology: To obtain a comparative picture, a sample of 20 Banks was taken that covered all three
categories. A semi-structured questionnaire was prepared with 40 questions that encompassed Nature
and Designs of Databases and the level of Use of the databases for the various decision-making issues
related to products and customer services.
I HUMAN
9. The People Dimension in KM: Technology usually dominates the KM initiatives because it is the most visible and
tangible of the three components of KM- people, process and technology. However if people and processes are not
set in place there is no guarantee that people will use technology to promote KM in the organisation. Most
organisations need a change of culture without which no KM initiative will take off. Knowledge management (KM)
programs are bound to fail if not supported by leaders through their active participation. Organising knowledge fairs
and knowledge workshops bring people together so that they can share experiences. Face to face contact is an
important pre-requisite to effective computer based knowledge networking under KM initiatives.
knowledge management | 103
A knowledge network is not to be measured by the extent of its reach and capabilities to communicate, but rather by
the extent to which it supports and promotes reciprocity. To build and sustain a KM system, a cultural change in
propensity to share knowledge is fimdamental, which is most difficult part of knowledge management. An
organisation should be able to induce the behavioral change among people who are the contributors and users of
knowledge. It requires strong leadership to bring in cultural changes, set the right direction, and continuously
monitor the progress.
10. Application of KM in Banks - Current & Future: While the banks in India, both under public sector and private sector,
are endowed with adequate intellectual capital, in general they are yet to adopt KM as a strategic weapon for
gaining competitiveness. That is, with exception of a few new generation private banks and foreign banks, all other
banks especially the public sector banks are yet to appreciate and adopt KM initiatives in a big way. This could be
argued to be because of lack of operational flexibility and functional autonomy. Right from the grass root level to
the top management, the need for adoption of KM mitiatives for survival as well as sustained business growth and
competitiveness, has to be understood by all.
Worldwide, all progressive organisations, including many reputed banks and consultancy firms, have already recognised
knowledge of their employees as the most valuable asset; and knowledge of the organisation as the most valuable and
strategic resource.
It is therefore relevant to look into the practical ways in which banks in India can improve their strategic competence in
today's extremely competitive market scenario. International best practices, those prevailing in foreign banks and high tech
new generation banks in India, latest advancements in the field of IT and IT enabled services, research findings relating to
banking industry with practical relevance etc. provide us with certain meaningful insights into the above aspect. These are
briefly discussed in the following paragraphs.
With liberalisation and globalisation of business, competition has become the very core of business success or failure of
firms. This is particularly relevant in the banking industry in India in the post reforms period. Actually, KM can facilitate
competitiveness of a product significantly; because it can contribute, towards putting into practice all the three generic
competitive strategies viz.
(a) Cost Leadership (b) Differentiation and (c) Focus
Banks can gain strategic competence through creating and managing organisational knowledge available to it. Maximum
amount of an organisation's knowledge is it's people; this could be as high as 90% in certain cases, of the total
organisational knowledge. When the knowledge in people is shared it becomes helpful for the organisation as a whole and
can be recorded and made use of for a long time in the fiitin-e. In the present scenario especially in the public sector banks,
and old private sector banks, there is no provision to consider knowledge contributions of the employees as part the
performance appraisal system and also to offer rewards or incentives to such contributions. For solving such cultural and
behavioral issues banks can adopt certain measures like changing their HRM policies to incorporate rewards/incentives to
staff for sharing of their knowledge and also consider such contributions during the performance appraisal process.
5.7.6 Customer Knowledge
This is one of the most vital sources of knowledge of a bank. However banks in India, in general except a few foreign
banks and progressive private sector banks are yet to put in systems for creation, maintenance and updation of suitable
KNOWLEDGF: MANAGEMENT | 5
3. Knowledge Analysis: It is not easy to identify what knowledge differentiates between one bank and another. The
process of identifying specific skills contributing to the success of a firm is called knowledge analysis. It is not an
easy subject. Constant practice is required for its development. Leadership among banks will depend on which bank
leads in knowledge. In the 70s and 80s, Citi Bank in India was considered quite dynamic because of its innovative
products (based on knowledge).
Case Study
Knowledge Sharing Initiatives at the World Bank - Creating Knowledge Bank.
"The World Bank is changing its vision of itself from that of a financial bank to that of a knowledge bank, with increasing
attention given to supporting knowledge institutions in its borrowing member countries."
-An official at the World Bank Economic Development Institute in 2001.
"Given the complexity of the global challenges we face on a daily basis, it is critical that we respond to the needs of our
member coimtries in timely fashion, and with the best, most relevant knowledge available".
-James Wolfensohn, World Bank President, in 2003.
In October 1996, when James Wolfensohn (Wolfensohn), the newly appointed president of the World Bank, annoimced that
the organisation would transform itself into a 'knowledge bank', there were mixed reactions. Some were excited about
knowledge management and its potential in helping the World Bank achieve its objectives. Others considered it a waste of
time and resources and felt the Bank should stick to its original mission of eliminating poverty.
However, by the early 2000s, the World Bank had already emerged as one of the foremost knowledge organisations in the
world. It was one of the few non-commercial organisations to invest in knowledge management in a major way, and
analysts were surprised at its success in this area in a very short time. In early 2000, the World Bank was recognised as one
Keywords
The Knowledge Management capital in Banks Key drivers for Knowledge Management in Banks
Activation of Knowledge Management in Banks - Both in Private as well as Public Sector Banks Data Mining
Online Discussion Groups - *
Instant Messaging
Check Your Progress
State whether the following statements are True or False.
1. KM refers to management of knowledge. t
2. KM is not applicable to traditional Indian banks. f
3. Data mining is the basis for KM, used in document and content management. t
4. Private banks understand customer preference using technology. t
5. Traditional customer relations in PSU and cooperative banks are better than the impersonal, hi- tech relationship
of modem banks. f
6. KM is an important enabler, for innovative efforts by banks. t
Terminal Questions
• What is Knowledge Management and its significance in industry today?
• As a service industry, intellectual capital is the biggest asset in the banking industry. Elaborate.
• How has technology transformed the profile of Human Resource in the Banking Industry?
V Ì-V'.-.-Ì;-..-■■'.■■.
....
m nói i human rìesóuic^i:^
References Bibliography
• IBA Bulletin
• Effective Executive ICFAI University
• Professional Banker
Webiiography
• http://www.eineraldinsight.com
• http://www.accesskm.com
• http://www.KnowledgeStorm.com
• http://www.KMBook.com
• http://www.brint.org/
MODULE-B
BUILDING AN HR STRATEGY
Units
6. HR as a Strategic Player
7. CEO and His Team
8. Communication
9. HR Functions
10. Performance Management
Vf
<B
¿J
ir ^
HR AS A STRATEGIC PLAYER
STRUCTURE
6.0 Objectives
6.1 Introduction
6.2 HR as a Strategic Player
6.3 HR Strategy Formulation and Implementation
6.4 Need for a Distinctive HR Strategy
6.5 Connecting Strategy to Organisations
6.6 Strategy Execution
6.7 Aligning HR Systems with Decision Framework
Let Us Sum Up
Keywords
Terminal Questions
References
r aw I muM
6.0 OBJECTIVES
After reading this unit, you should be able to:
6.1 INTRODUCTION
The following anecdote is described by Dave Ulrich in one of his articles.
"A while back, the vice president of hvtaan resources (HR) of a big consumer product company
decided to visit with a few key customers and improve his line of sight with his company's
marketplace. To avoid wasting his customers' time, he began by reading everything he could-annual
reports, reports, product brochures, analysts' reports. His counterpart in sales was sceptic of the whole
idea, but once the HR-VP showed how knowledgeable and thoughtful he was, his sales colleague
agreed to set up a meeting with the VP of purchasing at one of their main customers. The moment they
walked into the office, however, the customer snapped, "I'm busy today. Why should I spend time with
you?"
This short story captures the past, present, and future of the field of HR. Twenty years ago, it would
have been unthinkable for almost anyone in HR to even consider spending time with external
customers. HR professionals built staffing, compensation, training, and other programs and policies
that focused on employees and kept companies legally compliant. Over the last few years however, HR
professionals have worked to become business partners and to align their work with business strategies.
They have been coached to spend time with general managers and with their counterparts in sales,
marketing, and manufacturing to ensure that HR work helps deliver business results.
6.2.2 HR Transformation
Many attempts at HR effectiveness start without defining value. For example, some companies invest in e-HR
services such as portals and online employee services and believe that they have transformed HR, but they have
not. While e-HR may be a part of an overall transformation, it is merely a way to deliver HR administrative
services. Moving toward service centers, centres of expertise, or outsourcing does not mean that HR has been
transformed. If new delivery mechanisms provide basically the same old HR services, the function has changed
but not transformed itself HR transformation changes both behavior and outputs. Changing any single HR practice
(staffing, training, appraisal, teamwork, upward communication) does not create a transformation. Unless the
entire array of HR practices collectively adds value for key stakeholders, transformation has not occurred.
Transformation requires integrating the various HR practices and focusing them jointly on value-added agendas in
intangibles such as customer connection, organisation capabilities, and individual abilities.
Writing an HR strategy or making a statement about HR roles does not necessarily create a transformation. In
presentations on HR strategy, a method has been evolved to ask six random participants to complete the following
statements as fast as they can:
• Our goal is to be a___________________.
We will do this by leveraging
And we will ensure that we anticipate And we
will invest in
And we will be known for
And we will work with unyielding
Filling in these six blanks with the first thing that comes to mind and then connecting these statements to a vision
generates an amazingly plausible HR strategy statement that can convert a statement of desire
HR AS A STRATEGIC PLAYER
and actual transformation from corporate rhetoric to actionable steps. HR transformation must be more
than rhetoric; it must shape behavior and create and ensure stakeholder value. A fundamental
transformation of HR starts with a definition of HR value-who the receivers are and a clear statement of
what they will receive from HR services. It also requires a complete picture of all the elements of HR
transformation, so that piecemeal attempts do not become isolated events.
Create a strategy map for the llfm: Business Indicators - teadini and lag • Results - tangible and
I
intangible
finn'a
strategy
map and
I
Periodically testHR
maasunss
Align the HR architecture with HR • •HRftmclion • HR system •
Strategic employae behaviors
\•
Design the strategic measurement system: • The HR scorecard • Results measurements - tangable and
intangable
I
Execute management by measurement
il
w M
Terminal Questions
1. How does one develop HR strategy for an existing company with no formal HR fimction?
2. The HR fimctionary has to find a place in the top management by being strategic. Elaborate.
3. What are the applications of HR strategy in banks?
References
r
• Sumantra Ghoshal and Christopher Bartlett The Individualised Corporation HarperBusiness, 1997
• Michael Porter Competitive Strategy Free Press, 1980
• Charles W.L. Hill and Gareth R. Jones Strategic Management Theory: An Integrated Approach
Houghton Mifflin, 1998
124 I M/
Dorothy Leonard Wellsprings of Knowledge Harvard Business School Press, ' 1995
Nucor's business and HR strategy are taken from Pankaj Ghemawat and Henricus J. Stander III
Nucor at a Crossroads Harvard Business School case No. 9-793-039 May 5, 1993
Details of Lincoln's HR strategy are taken from Jamie O'Connell and Christopher Bartlett Lincoln
Electric: Venturing Abroad Harvard Business School case No. 9-398-095, April 22,1998.
For more details of how McKinsey matches its corporate strategy and HR strategy, see Sumantra
Ghoshal and Christopher Bartlett The Individualised Corporation and Christopher Bartlett McKinsey &
Company:
Managing Knowledge and Leaming Harvard Business School case No. 9-396-357 April 20,1998.
Sée Rich Teerlink & Lee Ozley More than a Motorcycle: The Leadership Journey at Harley- Davidson
»
STRUCTURE
7.0 Objectives
7.1 Introduction
7.2 Role of CEO
7.3 CEO and Talent Management
7.4 Executive and Line Managers
7.5 Succession Planning
7.6 HRAudit
Let Us Sum Up
Keywords
Terminal Questions
References
Ì
126 I ^ HUMAN RESOURCE MANAGEMENT
7.0 OBJECTIVES
After reading this unit, you should be able to:
7.1 INTRODUCTION
The "chief executive officer" is the singular organisational position that is primarily responsible to carry
out the strategic plans and policies established by the Board of Directors. In business without a board of
directors (sole proprietorship, partnership, etc.), the "chief executive officer" is the singular
organisational position (other than partnerships, etc.) that sets the direction and oversees the operations
of an organisation.
1. The chief executive must serve as the key link between the organisation and its environment. In
the liaison role the manager develops high-status contacts, and in the spokesman and negotiator
roles, deals with the fum's public. In effect, the CEO uses his status in the maintenance of prime
links with outsiders. He is the nerve center of key information in the firm and must take full
charge of the organisation's strategy-making system. Decisions related to crises, problems, and
major opportunities must be overseen and integrated by the chief executive.
The chief executive officer is the overall, primary management and leadership role in the organisation.
Therefore, it is critical that chief executive officers have strong knowledge and skills in a wide variety
of
areas.
7.2.1 Planning
• Business Planning (plan a new business organisation, product, business department, etc.)
• Strategic Planning (establish organisational goals and how to reach them)
• Leading, co-coordinating activities and Resources (including performance management)
To briefly summarise at this stage, the CEO has to:
• Identify key activities.
• Assign each key function to be the exclusive responsibility of one executive who is selected on
the basis of personality and competence.
• CEO functions as the captain of the team.
pharmaceuticals and medical devices. The 20 corporate leaders interviewed are located in ten major
industrial countries, including the US, the UK, Japan, Australia and India. The firms include GA
(formerly Computer Associates) of iJie US, which was founded just 30 years ago, and the Go-operative
Group, a UK-based conglomerate with roots in the mid-19th. century. One company, Johnson &
Johnson China, is a subsidiary of the New Jersey-based pharmaceuticals giant.
The main points
• Chief executive officers (CEOs) are increasingly responsible for, and involved in, talent
management. The heads of human resources departments play an important, supporting role in
executing talent strategy.
• CEOs spend a large amount of their time-often more than 20%-on talent management. However,
this effort is not typically guided by a formal talent strategy explicitly linked to the company's
overarching goals or embedded in the business planning process. Rather, CEOs engage in
selected supporting activities where they believe they add value.
• Talent management has become more important because of a growing recognition that it helps to
drive corporate performance, even though the exact impact is hard to quantify.
• Good talent management is not undertaken in a piecemeal fashion but consists of comprehensive
development programmes. These include the identification of leadership potential, performance
evaluations, targeted development activities and job experience.
• Many CEOs mentor executives in their organisations- an additional and important part of the
programme. They regard the development of the next generation of leaders as one of the best
ways of leaving a strong legacy.
Japan: "Very specifically [my responsibility] is to be working with the senior team in
developing their capabilities but also to assist them in coming up with ideas,
"If their [employees'] attitude isn't strong about the culture, ultimately that will undo
you. "Robert Care, the CEO of Amp Australasia, a division of Amp Group.
ment
members learn
from one another and take successful actions together, the team's effectiveness and cohesiveness increase. This
increases the members' enthusiasm and commitment to the team. For a while there is a positive feedback loop in
which success increases cohesiveness, which increases effectiveness, which generates more success. This is the team's
adolescence.
Eventually the team accomplishes its first major success, the strategic objective for which it was framed. That strategic
success marks the point at which the team is considered to be highly cohesive and highly effective. The team develops a
team memory based on past successes and previous communication. The team memory now defines each member's
role, the team's knowledge of the outside world, and how the team operates in that world. The team memory enables the
team to perform like an experienced adult, able to quickly handle challenges in previously learned ways. When the
outside world changes, for example in customer requirements, competitors' innovations, or new technologies, the
members of a highly cohesive and highly effective team needs to learn new techniques to respond appropriately.
Winning teams are built with credible leadership and capable people in each role, who have a common purpose and
clear direction and a mutual understanding of roles, dependencies and values. They also have strong relationships with
stakeholders outside the team, have the trust and respect of their peers and are able to review their performance
continuously.
Line management is a hierarchical chain of command from executive to front-line level, a rather complex management
structure, in which top management has total and direct authority and employees report to only one supervisor. Line
management structures are usually organised along functional lines, although they increasingly undertake a variety of
cross-functional duties such as employee development or strategic direction. The lowest managerial level in an
organisation following a line management structure is supervisory management.
Most oraganisations that have grown to large size today started as proprietary concems with generations of the same
family occupying pivotal positions. A recent survey indicated that only one percent of family-owned businesses in
North America reach a third generation with family members running them. Another report shows that 30 percent of all
family-owned businesses have not considered a successor, with only 63 percent having done so when the owner has
already reached age 65. Finally, another recent survey shows that more than 58 percent of small-business owners list
inadequate succession planning as the biggest threat facing their business. The situation is no different in India with the
encouraging fact that most second generation owners are more professionally qualified, generally from the best
universities in the world and hence bring a lot of new thoughts, including the need for professional management in their
organisations. A classic example in India is of the Aditya Birla group, where a young new Chairman put in place long
needed revamp of the old guard, bringing in professional managers to take charge.
Given the fact that 80
percent of the major
businesses the world over
in the developed world are
family- owned and
managed, it is obvious that
a solid succession plan will
be important should the
majority owner die,
become disabled or retire.
cfo and his team |
Typically, succession planning entails three steps: a decision-making stage (choosing a successor), the gradual transfer
of management responsibilities to the successor.
As the generations pass it will be seen that the burden of managing the business requires the skills of a professional
with few or no ties to the original promoter. If such a person is already in employment, his or her ascent to leadership
may prove more advantageous to the business than carrying on a "family tradition."
Most experts in the field of succession planning suggest using these steps to pave the way for a suitable successor:
• Set a target date as one's last day with the company and start shifting responsibilities ahead, overseeing the
transition.
• Set standards that take into consideration the needs of the successor.
• Decide on the level of responsibility as well as authority that should rest with the successor.
H.R.M-10
4. The incoming executive should produce an organisation assessment and proposed action plan. À
Board would typically expect this within 3-6 months depending upon the organisation's size and
complexity. It can be the primary vehicle for initial strategic discussions between the CEO and the
board.
Regardless of the number, what is being developed is a description of the level and quality of performance desired
from the Human Resource function.
Assessing Current Practices
With the list of statements completed, the assessment of current practices demands looking for evidence that
supports or reflects each statement made. Evidence may take the form of policies and procedures, output from
employee surveys, interviews with key customers, data collection from a Human Resource Information System,
reports issued to regulatory departments, statistics, etc.
Definition of desired HR practices can occur through a variety of ways. A good starting point is to take some time
and reflect on the legal requirements and programs that the department must administer. Simply listing them is a
good first step. Next, consider the areas of responsibility and traditional HR practices covered by the function:
They may include HR Plaiming, Staffing, Performance Management, Employee Relations, Compensation and
Benefits, Trainipg and Development, Safety and Wellness, Employee Surveys, and Communication. Finally, other
areas to consider are company initiatives that the HR fimction may be required to support, such as supporting a
Total Quality Management initiative, introduction of new initiatives, specialised training etc.
With this list in hand, a statement can be written about each major practice that needs to be defined. Typically,
they are stated in the present tense and in a positive manner. The following examples illustrate these traits:
We have also understood how to measure the effectives of HRD through an HRD Audit.
Keywords
Chief Executive Officer Talent Management Executive Team and Line Managers Succession Planning Human
Resource Development Audit
Terminal Questions
1. The CEO is the captain of the organisational team. Discuss in the context of ideal qualities to be
displayed by a CEO.
2. Describe the role ofCEO in talent management.
3. Managerial succession planning is a strategic HR activity. Elaborate.
4. The HR audit is necessaiy every six months in an organisation. Do you agree? Give reasons.
References .i.^
• Field Guide to Leadership and Supervision in Business by Carter McNamara, published by
Authenticity Consultmg, LLC. Provides step-by-step, highly practical guidelines to recruit, utilize
and evaluate the best employees
• Loeb Marshall- Leadership for Dtmliqies ",
• Maxwell John Leadership 101,What every leader needs to know
• Blanchard, Ken- Leadership and the One Minute Manager
• http.7/www.thinkingmanagers.com/the-thinking-ceo
STRUCTURE
8.0
COMMUNICATIO
N
Objectives
8.1 Introduction
8.2 Organisational Communication
8.3 Types of Commimication
8.4 Barriers to Effective Communication
8.5 Steps for Effective Communication
8.6 HR and Communication
Let Us Sum Up
Keywords
Terminal Questions
References
8.0 OBJECTIVES
After reading this unit, you should be able to:
• Understand Organisational Communication
• Types of Commununication
• Barriers to Effective Communication
• Steps for Effective Commimication
• HR and Commimication
5. The two-way method is relatively noisier and looks more disorderly. The one-way method, on the
other hand, appears neat and efficient to an outside observer.
Thus, if speed is necessary, if a businesslike appearance is important, if a manager does not want his
mistakes recognised, and if he wants to protect his power, then one-way communication seems
preferable. In contrast, if the manager wants to get his message across, or if he is concemed about his
receivers' feeling
that they are
IV t participating and
are making a
contribution, the
two-way system
is better.
In either event, communication depends on how it is perceived by the recipient. In a two way
communication system, there is a chance to correct misperception if any. It is also tme that the impact
of receiving the commimication depends on the expectation of the recipient. Also every communication
is either a command or is an instmction or is for reproaching for doing wrong thing or may even be for
entertainment. The mood of the recipient while receiving the communication may determine whether he
will accept, understand, improve and also act as per the instmctions.
People cannot live without each other, we are social beings. As soon as we are in contact with others we
are communicating. For this we can make use of spoken and written language through which we make
the content of a message clear to each other. However we can also communicate without words. This
kind of communication tells iis something about the relationship between people. Often this is more
important than getting the content of the message across. The communication about this non spoken
communication, which tells us something about the relationship between people, is called Meta-
Communication.
communication i
When we connect with a person, we also have to make it clear to each other how the content of a spoken
message needs to be interpreted. How we do this says something about the relationship we have with
the other person, or think we have anyway. Often words are inadequate for this purpose. To make the
meaning of ow words clear we use body language. Body language is a language without spoken words
and is therefore called non-verbal communication. We use body language all the time, for instance
looking someone in the eyes means something different than not looking someone in the eyes when
talking to her.
Lively, sparkling eyes are attractive. They say, 'Talk to me, I'm approachable.' Looking away shows
disinterest or deviousness. Looking down conveys submission. Confident people make more frequent
eye contact than people who are unsure of themselves, so develop a steady gaze. When you enter a
room move around comfortably, smile and make gentle eye contact with everyone; not too much, not
too little.
Men and women behave and respond to body movements in different ways. So it is cmcial for you to
suit your body language depending on the gender of the person you meet, or you could damage a
relationship or business without even knowing it.
.............- - "
Body language thus is a key part of effective and precise communication. Human beings are
programmed to communicate verbally and non-verbally, combining the two aspects of communication
to send and receive accurate messages. Neither form of communication is more important than the
other. However, if one form is missing or inconsistent ,the impact on communication is huge. In
general, verbal messages enhance accuracy and specificity, while non-verbal messages enhance intent,
meaning, and subtlety.
A high proportion of a manager's time is taken away by one to one communication with staff, peers and
superiors. The advantage of one to one communication is that it enables you to gauge reactions
immediately. One also gets feedback about one's plans and ideas.
4. With today's increasingly diverse workforce, it is easy to believe information has been
communicated but the way they get interpreted may be different from what was intended.
Rumours if not tackled in time can lead to massive amounts of miscommimication.
5. When personnel are tired or under stress, it is easy to do what is urgent rather than what is
important. Misunderstanding is a common occurrence and again can get too late before the
correct picture emerges.
6. As organisations grow, their management tends to focus on matters of efficiency. They often
generate systems that produce substantial amount of data ~ raw information that doesn't seem to
really be important. Communication problems can arise when management simply sees no value
whatsoever in communicating with subordinates, believing subordinates should shut up and do
their jobs.
There is an invisible barrier between the superior and subordinate. Because of this, in any given
situation in an organisation, there is an expected answer and an actual answer. For example:
The CEO " How are you Ravi?
"I am well sir". This is the answer expected though at that moment, Ravi may not be well. "How
is the production in the department ?" CEO "Fine sir"
This is the expected answer and Ravi will say so even if there are problems in the department.
The real issue for Ravi is, in spite of his problems, he must somehow convey convincingly that
everything is all right. The other answer that" I have problems" may lead the CEO to believe
that Ravi is not effective.
2. Effective internal communications start with effective skills in communications, including basic skills
in listening, speaking, questioning and sharing feedback. These can developed with some concerted
review and practice. Perhaps the most important outcome from these skills is conveying that you
value hearing from others and their hearing from you. Soimd meeting management skills go a long
way toward ensuring effective communications.
3. A key ingredient to developing effective communications in any organisation is each person taking
responsibility to assert when they do not understand a communication or to suggest when and how
someone could communicate more effectively.
3. Respect the "grapevine" It is probably one of the most prevalent and reliable forms of communication. Major
"movements" in the organisation usually first appear when employees feel it safe to venture their feelings or
opinions to peers.
Keywords
Organisational Communication
Interpersonal Communication
Communication Networks including Cyber Networks
Body Language
Effective Communication
Check your progress
State whether the following statements are True or False.
1. One way communication as in armed forces is more effective. f
Terminal Questions
1. What are the basic components of organisational communication and who is responsible for ensuring the right
type of communication?
2. Write a short note on body language.
3. Identify barriers for effective communication and how they can be overcome.
References
Notes
• Herbert Simon, Administrative Behavior, 4th ed., p 208.
• Summarised fiom concepts developed by Alex Bavelas, "Communication Patterns in Task-Oriented Groups," pp.
503-11; Harold Guetzkow, "Differentiation of Roles in Task-Oriented Groups," pp. 512-26, in Cartwright and
Zander, Group Dynamics; H.J. Leavitt, "Some Effects of Certain Communication Patterns on Group
Performance," Joumal of Abnormal and Social Psychology vol. 46, (January 1951), pp. 38-50.
• Harold Leavitt, Managerial Psychology (Chicago: University of Chicago Press, 1958), pp. 118-28.
I • Richard Arvid Johnson (1976). Management, systems, and society : an introduction. Pacific Palisades, Calif:
Goodyear Pub. Co. pp. 148-142. ISBN 0876205406 9780876205402. OCLC 2299496.
• Virginia Satir (1967). Conjoint family therapy; a guide to theory and technique. Palo Alto, Calif: Science and
Behavior Books, pp. 76-81. OCLC 187068.
References
• Gergen, Kenneth and Tojo Joseph. 1996. "Psychological Science in a
Postmodern Context." American Psychologist. October 2001. Vol. 56.
Issue 10. p803-813
• Redding, W. Charles. 1985. "Stumbling Toward Identity: The
Emergence of Organisational Commimication as a Field of Study" in
McPhee and Tompkins, Organisational Communication: Traditional
Themes and New Directions. Thousand Oaks, CA: Sage.
H.R.M-11
HR FUNCTIONS
STRUCTURE
9.0 Objectives
9.1 Introduction
9.2 Human Resources Planning
9.3 Recruitment and Selection
9.4 HR Outsourcing
9.5 Compensation
9.6 Incentive based Compensation
9.7 Attrition
9.8 Employee Risk Assessment in Banks
Let Us Sum Up
Keywords
Terminal Questions
References
a
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s
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9.0 OBJECTIVES
After reading diis unit, you should be able to:
• Understand Human Resources Planning
• Recruitment and Selection
• HR Outsourcing
• Advantages and Disadvantages of HR Outsourcing
• Compensation
• Incentive based Compensation
• Attrition
• Employee Risk Assessment in Banks
9.1 INTRODUCTION
If one is given the task of setting up a new Human Resource Department in a small company where
would she begin? Such a task would be extremely daunting, but not impossible, if she follows a few
tips. To begin with, she needs to answer some basic questions:
• Why set up an HR department now? What developments have made the organisation believe
that an HR department is needed now?
• What is expected of the HR department and how will this function contribute to the success and
bottom-line of the organisation? Will it add value?
In other words, before she begins the task, she needs to have a clear definition of the mission and goals
of the department and secondly, what role she will play as "head" of the HR function. Once direction is
clear, there are some key "audit" issues that she needs to focus on.
• The current head count of employees, is all documentation with regard to their personal details
complete, are such details stored in their personnel files and are they current?
• Has someone framed policies and procedures? Are they up-to-date? Are they followed?
• Does the company have an employee handbook and are all relevant rules and regulations
communicated to all employees?
• How dynamic is the compensation structure, does it give scope for incentivising performance?
• Does the company have in place policies dealing with sexual harassment, workers'
compensation, safety, benefits, discipline, etc.?
Many other issues to be tackled relate to recruitment, promotions, statutory compliance, training and
development etc. As the HR function is yet to take off, most of these activities may not be very well
established and even routine functions such as recruitment, salary as well as training will be managed
on an ad hoc basis, thus leaving a lot of scope for introducing and implementing a number of very
relevant and important HR activities in a professional manner. In the following pages, we shall
examine the scope and range of various HR activities ranging from the manpower planning to
termination of employment with insights into the development and positive role each of these functions
play in an organisation's structure.
9.2 (MANPOWER) HUMAN RESOURCE PLANNING (HRP)
HRP includes estimation of how many qualified people are necessary to carry out the assigned
activities, how many people will be available, and what, must be done to ensure persormel supply
equals persormel demand at the appropriate point in the fixture."
HRP is a Process, by which an organisation ensures that it has the right number and kind of people at
the right place, at the right time, capable of effectively and efficiently completing those tasks that will
help the organisation achieve its overall objectives.
In simple words, HRP is understood as the process of forecasting an organisation's future demand for
and supply of the right type of people in the right numbers. It is only after HRP is done, that the
company can initiate and plan the recruitment and selection process. HRP is a sub-system in the total
organisational planning and facilitates the realisation of the company's objectives by providing right
type and right number of persormel. HRP is important because without a clear-cut manpower plan,
estimation of an organisation's human resource need is reduced to mere guesswork. A balanced HRP
helps the top management have a better view of HR dimensions of business, anticipate imbalances
before they become unmanageable and
expensive, and explore all avenues for sourcing the right candidates in a cost effective manner.
»
Marpower Forecast
Projected Manpower
profile 1
r 1
Surplus Manpower Shortage of Manpower
Business Environment
Strategic goals of orgainzation
A well defined recmitment policy helps the organisation identify the right mix of candidates and fill in requirements in a
cost effective manner and where needed, also maintain a pool of selected candidates to be used in future. The factors
governing recmitment are extemal ones like Demand and Supply of the required skills, labour market conditions and
ability of the organisation to attract the right type of candidates. Internal factors include the size of the organisation,
priority of functional requirement as well as the growth plans necessitating a particular profile of the candidate.
9.3.1 Recruitment Process ^ ^^^^^^ . - ^ « / ;-
All progressive organisations need to have a dynamic recruitment strategy that is demanding, flexible as well as able to
meet the needs of the organisation in quick time, in an efficient manner. The recruitment strategy takes into account the
potential of current and future employees to sustain and improve on business levels, build an image for attracting the best
talent and maintain the competitive edge throughout. Efficiency and productivity form the basis for all long term
commitment with regard to employee selection and development. A brief idea of the major advantages of internal as well
I HUMEAN RÉ^OÜRCE MANAGEMENT
as external recruitment (associated with promotions from within V/s lateral recruitment) is given below:
9.3.2 Internal Recruitment
Advantages Disadvantages
1. Less Costly L Traditional approach, play safe.
2. Candidates already oriented towards organisation 2. It abets raiding
3. Organisations have better knowledge about internal 3. Candidates' current work may be affected
candidates
4. Employee morale and motivation is enhanced 4. Politics play greater roles
5. Morale problem for those not promoted.
*
9.3.4 Selection
Selection is the process of picking up individuals (out of the pool of job applicants) with requisite qualifications
and competence to fill jobs in the organisation. It is the process of differentiating between applicants in order to
identify and hire those with a greater likelihood of success in a job.
Recruitment Selection
1. Recmitment refers to the process of identifying and 1. Selection is concerned with picking up the
encouraging prospective employees to apply for jobs. right candidates from a pool of applicants.
2. Recmitment is said to be positive in its approach as it
seeks to attract as many candidates as possible. 2. Selection on the other hand is negative in
its application in as much as it seeks to
eliminate as many unqualified applicants as
possible in order to identify the right
candidates.
i
9.3.5 Selection Process - Steps Involved
1. Screening and Preliminary Interview: Screening helps to eliminate applicants who do not fit the desired profile.
Preliminary interviews also help weed out the less qualified and weaker candidates.
2. Selection Tests: Selection tests help in bringing down the number of job seekers, especially in popular jobs such
as banking while at the same time helping in short listing better qualified candidates. These tests can be Aptitude
Tests, Personality Tests, and Ability Tests and are conducted to judge how well an individual can perform tasks
related to the job. Besides this there are some other tests also like Interest Tests (activity preferences). Graphology
:^NaTK>NS I B
Test (Handwriting), Medical Tests, Psychometric Tests etc.
3. Personal Interview: Interview is a formal and in-depth conversation between the applicant and a panel of experts
whose role is to assess the potential candidate's profile and match perceived competencies to that of the given
role. Interviews can be One-to-One, Panel Interview, or Sequential Interviews. Besides, there can be Structured
and Unstructured interviews. Behavioral Event Interviews and Stress Interviews. The higher the role, the more
focused, the interview process.
4. Reference and Background Checks: Reference checks and background checks are conducted to verify the
information provided by the candidates. Reference checks can be through formal letters, telephone conversations.
Though earlier considered more a formality, with the recent spate of data theft firom call centres as also the
possibility of computer hacking and even the terrorist threats, reference and background checks have become very
important and today almost all leading companies conduct elaborate background checks.
5. Selection and Job offer: After assessing the results of all the tests, interviews and other assessment tests if any, a
decision is taken on selection of the most suitable candidate. Selected candidates undergo a mandatory medical
examination following which the successful candidates are given a job offer, with all relevant details of the
position. On acceptance of the offer, an appointment letter is issued, giving all terms and conditions of
appointment.
9.3.6 E-recruitment
There is no doubt that today online recruiting has overpowered traditional methods of recruitment. The HR professional
is considered 'out of date' if she does not use e-recruitment, as this is clear indication of how much of change the HR
industry has seen because of IT.
9.3.7 10 Compelling Reasons to Ciioose E-recruiting
A leading survey says that 73% of the world's largest companies would adopt an e-recruiting strategy. Thinking why
erecruiting is becoming so popular and is considered to be the most efficient way of recruiting? The following are the
reasons:
9.3.10 Costs
The costs for registering in any online job portals like Monster or Naukri will be a much cheaper bet than advertising
in a newspaper. The existing recmiting process, will have to see some changes and though the initial costs are high,
the new process embarked on will make it cost effective as the days go by.
* ^\
9.4 HR OUTSOURCING
In keeping with the worldwide trend of outsourcing non-core activities, a large number of corporates
have started outsourcing certain routine HR functions to experts. This practice that was started in the
1990s have come to stay as a cost effective practice for a number of leading organisations all across the
world. HR Outsourcing refers to the process in which an organisation uses the expert services of a third
party (generally professional consultants) to take care of its HR functions while HR management can
focus on the strategic dimension of their function. The functions that are typically outsourced are the
functions that need expertise, relevant experience, knowledge and best methods and practices. HR
Consultancies such as Ma Foi and Planman Consulting and a host of others provide such services
through expert professional consultants. Human resources business process outsourcing (HR BPO) is a
major component of the worldwide BPO market. Performance management outsourcing involves all
the performance monitoring, measurement, management being outsourced from a third party or an
external organisation.
Many organisations have started outsourcing its recruitment process i.e. transferring all or some part of
its recruitment process to an external consultant providing the recruitment services. It is commonly
known as RPO i.e. recmitment process outsourcing.
The present value of the recruitment process outsourcing industry (RPO) in India is estimated to grow
at the annual rate of 30-40 per cent for the next couple of years, provided the recessionary trends get
over soon. The number of companies outsourcing their recmitment processes is increasing at a very fast
rate and so is the percentage of their total recmitment processes being outsourced. Outsourcing helps
save up to as much as 40 per cent of the regular recruitment costs. With the experience, expertise and
the economies of scale of the third party, organisations are able to improve the quality of the recmits
and the speed of the whole process. Also, outsourcing enables the human resource professionals of
organisations to focus on the core and more sfrategic issues. The portion of the recmitment cycle that is
outsourced range from preparing job descriptions to arranging interviews, the activities that consume
almost 70 per cent of the time of the whole recruitment process.
Outsourcing the recruitment processes for a sector like BPO, which faces an attrition of almost 50-60
per cent, can help the companies in BPO sector save costs fremendously and focus on employee
engagement and better retention. At the other end of the spectrum, job seekers are also availing the
services of the third parties (consultants) for accessing the latest job opportunities. Naukri.com, the
leading job portal claims to have a huge data base of potential candidates which they sell to corporates
for a fee.
Outsourcing is beneficial for both the corporate organisations that use the outsourcing services as well
as the consultants that provide the service to the corporates. Apart from increasing their revenues,
outsourcing Process provides business opportunities to the service providers, enhancing the skill set of
the service providers and exposure to different corporate experiences thereby increasing their expertise.
Business Process Outsourcing has now come to be accepted the world over and during the recent recession, has proved
beneficial to a large number of big corporates who would otherwise have had to
bear very heavy fixed costs. Having seen
firsthand how the more traditional ones
with regular staff suffered through
retrenchment and periodic downsising, the
current revival will see many more
companies going the outsourced route for all
non-core activities and explore
opportunities to have junior staff
outsourced to
professional firms. I
I
9.5 COMPENSATION
Human Resource as an important resource, is responsible for each and every decision taken, work done and the results
achieved. Employees should therefore be managed well and motivated by providing a competitive compensation based
on industry standards. A well thought out compensation package will also serve the need for attracting and retaining the
best employees.
Gompensation is the remimeration received by an employee in return for his/her contribution to the organisation. It is an
organised practice that involves balancing the work-employee relation by providing monetary and non-monetary
benefits to employees. Compensation is an integral part of human resource management which helps in motivating the
employees and improving organisational effectiveness.
Compensation provided to employees can be direct in the form of monetary benefits and/or indirect in the form of non-
monetary benefits known as perks, inceritives, variable pay etc. Compensation does not
include only salary but it is the sum total of all rewards and allowances provided to the employees in
>i
return for their services. If the compensation offered is effectively managed, it contributes to high
organisational productivity.
A good compensation package is important to motivate employees to increase organisational productivity.
• Salary is just a part of the compensation system, the employees have other psychological and
self-actualisation needs to fiilfill. This, a well thought out compensation structure tries to address.
Scale IV-V Nomial pay structure including basic pay and allowances
Senior Benefits associated with Senior Positions as incharge of regions/zones.
Management Normal pay structure including basic pay and allowances
Top Management Additional benefits as per structure of bank/as applicable to Top Level executives.
9.7 ATTRITION
A number of theories and practices have been documented right through the history of labour on how to
induce higher productivity from the worker. Time and motion studies, in the early days to incentives for
exceeding hourly targets as practiced in modern day BPOs and call centres, all have been designed to
induce that extra bit of productivity from an employee.
At the higher levels, there are the performance based bonuses paid by large financial advisory services
where the number of senior employees is kept to the minimum but their workload is heavy and highly
stressful. The amounts paid out are large^up to a crore in some of the treasury departments of MNC banks in the
country and measurement for the incentive is the volume of business transacted and profits generated for the Bank.
Whether a fixed incentive for the hourly worker or large payouts for highly skilled specialists, the underlying feature is
an incentive which is clearly variable in nature and directly linked to performance.
One of the most concerning issues for HR managers in India is the high staff tumover. In industries like call centres,
staff attrition is the single biggest issue. The industiy has grown from zero employment to an employer of quarter of a
million young English speaking, well educated and ambitious people. Attrition is highest in fraditional customer service
jobs, where young people find themselves having to spend all night on the phone, often with irate callers. In other areas
such as claims processing or accounting, the tumover rate is much lower. More worrying for many companies is the
'merry go round' in supervising and management jobs, as new centres are only too willing to pay higher salaries to
hijack experienced staff
The issue of retention is much more critical in the high value adding BPO sector such as R«&D activities. This $40
billion industry has one of the highest attrition rates of around 20 to 25 per cent. The service laden BPO and KPO
industry have the highest attrition rates.
Research and experience suggest that many managers are concerned that their best and brightest employees may pack
their bags in search of greener pastures if they receive smaller bonus checks than what they think they've eamed.
Managers are struggling with how to explain to employees that their hard work in 2009, hit by recession, will not result
in a salary increase or a bonus.
Recent Hay Group research shows that employee engagement and retention of top talent are the top two human capital
concems of management in organisations today. The counterargument of many managers - that people should feel lucky
just to have a job - is difficult to rebut in today's economic environment. But managers need to be mindful that their top
talent may indeed bolt when the economy turns around not necessarily because of pay.
Hay Group's research suggests that compensation is not even in the top five reasons employees are prone to taking calls
from headhunters and exploring their career options. Top reasons employees begin a job search include the need for
meaningfiil work, utilisation of their skills and abilities, career advancement opportunities and a clear sense of
organisational direction. Based on this, managers should concenfrate their efforts on increasing employee engagement
and developing systems that better support their employees' success.
To increase engagement in the bonus season, organisations and their managers would be well served by speaking from
a "total rewards" mindset m their discussions with employees. Managers are likely to strike out if they only focus on
base salary increases and incentive payments, or lack thereof They need to broaden the dialogue to a discussion around
the entire total rewards package employees receive, which includes career development, job enrichment, recognition
and meaningful performance development feedback, in addition to base pay, bonuses and benefits.
Again, the Recent Hay Group research shows that organisations understand the need to focus on total rewards, but have
not done a great job at communicating this to employees.
NS I t«T '
Ideally, total rewards discussions should be held throughout the year, not just at bcAius or salary
increase time." Managers should see each day as an opportunity to provide employees with meaningful
feedback and coaching and should shy away frorii the once-a-year performance appraisal discussion.
The engagement and job performance of employees and managers is significantly improved when
performance feedback is a continuous conversation rather than a distant event.
Following are six practical steps managers can take to improve employee engagement:
1. Help employees view their pay as more than base salary increases and bonuses and understand
that total rewards also include recognition, meaningful work and career opportunities.
2. Understand what truly engages and motivates employees. It is often much more than money as
different people value different rewards.
3. Clearly commimicate the link between performance and rewards. Clearly explain the reasons for
the reward and the amount of the reward.
4. Ensure that performance assessments and total rewards appropriately differentiate the best, solid
and weakest performers.
5. Assess and improve the organisation's work climate by training managers to motivate employees.
6. Use feedback as a gift - make it meaningful and give it often.
The last finding was rather surprising given that youngsters are not prone to succumb to fatigue easily.
But a further analysis of certain sectors such as Insurance, Retail as well as Consumer retail banking
revealed that pressure to sell and achieve monthly targets were so heavy that many a youngster would
lose sleep and be highly stressed as month end approached as a major chunk of their salaiy came in the
way of target linked incentive and some companies even had a policy of recovering from the incentive,
shortfall in sales achievement. Leaving jobs at the slightest excuse became the norm, with even a few
hundred rupees raise being enough attraction for the youngster, lured by the promise of a better working
environment, only to face similar pressure at the new place of posting.
Many companies are developing innovative practices in countering this job hopping phenomenon. The
following table illustrates some of these initiatives by leading companies in India.
9.7.3 Examples of Retention Strategies for young Professionals in India's BPO and
Services Sectors
Name of the Company Retention Strategy Impact
Tata Consulting A choice of working in over 170 offices across 40 Significant impact on job
Services(TCS) countries in a variety of areas. hopping achieved
Paternity leave for adoption of a girl child
Discounts on group parties
ICICI Bank Identification of potential talented staff Have been able to achieve
Alternative stock options higher retention rate
Quicker promotion
WIPRO • 'Wings Within' programme where existing employees get Has led to a higher
a chance to quit their current job role and join a retention rate
162 I ^firm
different HUMAN RESOURCE MANAGEMENT
within WIPRO
INFOSYS Fostering a sense of belongingness, creative artistic and Moderate Retentions rate
social activities for the employees and their families. increase achieved
Initiating one of the best 'corporate universities' in the
world
Mahindra & Co Culture change valuing innovation and talent over age Stabilised job hopping
and experience significantly
Institutionalising a practice called 'reverse mentoring'
where young people are given opportunities of
mentoring their seniors
The banking sector went through two major levels of attrition during the last
decade. The PSU and old private banks lost a considerable number of bright
staff, due to their badly executed VRS scheme. As new recruitment was
frozen till 2008, they had to put up with shortage of staff at most locations with
no end in sight to the problem of attrition.
As for the new generation banks, attrition was a way of life especially in the
retail assets and liability sections. Pressure of work, heavy targets especially
in the more aggressive banks and a general lack of preparedness through training
made the situation go from bad to
worse. In their anxiety to fiilfill
targets, most
yoimgsters
9.7.4 Attrition in Banlcing
would complete a deal without the necessary documentation and backgroimd checks, resulting in huge
NPAs in the retail sector. This resulted in large scale retrenchment and a drastic reduction in all the retail
activities.
The latter part of 2008 and the whole of 2009 have seen a consolidation in employment in all these sectors. And
now that the revival is on, there is a marked shift towards reducing fixed costs by way of employment and resorting
to outsourced agencies for many non core activities.
In the context of employees per se, the risk assessment goes a step beyond the physical aspects of safety and
security. Here, what is important is the potential risk that the organisation suffers due to bad or improper hiring.
Some of the issues involved are; negligent hiring, the screening policy and do all employees need to be screened,
and what is the legal implications for an employee's firaudulent actions, with regards to customer fimds as in a
bank.
NegUgent hiring and negligent retention lawsuits are increasing the world over, and so are employer expense and
liability as a result of these suits. Underlying the idea of negligent hiring and retention is an employer's legal
responsibility to provide employees, customers and the public a reasonably safe environment, and the liability
imputed to employers when they fail to exercise reasonable care in providing such an environment. It's when this
failure occurs that as an employer, the business, could be held liable for negligent hiring or retention. In banks, the
detection of a fraud by an employee who happens to have an earlier criminal record, could go against the bank if no
proper police verification was done prior to hiring. Consequently, from a cost contairunent and legal liability
perspective, it is increasingly crucial that businesses conduct criminal backgroimd checks, conduct such checks in a
competent manner and take reasonable action as a result of these inquiries.
H.R.M-12
A more subtle but equally harmful risk is that of bad or wrong hire. In the PSU banks, where average
performance is considered the norm, the cost of hiring substandard candidates could be a long term
liability. In other progressive banks, consistently below average performance could stand out and such
candidates get weeded out early after the first or second performance appraisal.
Let Us Sum Up
In this unit we have gone through the various HR Functions starting with Human Resources Planning,
Recruitment and Selection & Compensation.
We have also understood the concept of Employee Outsourcing with specific advantages and
disadvantages.
We have also understood the concept of employee attrition and its linkage to compensation.
The last topic covered was employee risk assessment in banks.
Keywords
Human Resources Planning
Recruitment & Selection
Employee Outsourcing
Compensation Structure
Incentive link to
Productivity Employee
Attrition Employee Risk
Assessment
References
• The Human Resource Function In Emerging Enterprises {entrepreneurship Series) (Hardcover - 2001-10-17)
by Jeffrey S. Homsby, Donald F. Kuratko
• The Human Capital Challenge (ASTD Public Policy Cduncil, August, 2003)
• * Tom McMullen is the vice president of North American reward practice at Hay Group and is based in
Chicago.
Webiiography
• BeakWare-net articles
■ 'ii.i
PERFORMANCE MANAGEMENT
STRUCTURE
10.0 Objectives
10.1 Introduction
10.2 Performance Management System
10.3 Performance Appraisal System
10.4 Use of Performance
10.5 360° Appraisal
10.6 Competency Mapping
10.7 Key Result Area
Let Us Sum Up
Keywords
Terminal Questions
References
10.0 OBJECTIVES
After reading this unit, you should be able to:
• Understand the concept of Performance Management
• Process for Performance Appraisal
• RoleofPerformance Appraisal and New Trends m Appraisal
• 360° Performance Appraisal
• Competency Mapping
• Key Result Area
10.1 INTRODUCTION
Performance Management System (PMS) is a formal, structured system of measvuing, evaluating job
related behaviors and outcomes to discover reasons of performance and how to perform effectively in
future so that employee, organisation and society all benefit. The most familiar aspect of PMS is the
performance appraisal, which is derived from the goals and objectives set, which again get derived fi-
om the Vision and Mission of the organisation.
Management of Performance is a major managerial activity and leads to a number of other HR
initiatives starting with rewards, training and development and shows the way for a company's
accelerated growth. Performance management is the process of looking both to the fiiture and to the
past, in the context of the collective performance of all the employees in an organisation.
I
v
Vj
talent management strategies - which look at HR processes as an integrated whole (not only as separate fimctional
processes). Ultimately, however one defines talent management, research clearly shows that performance management
is foundational - it establishes the ground rules for conversations between managers and employees.
How, for example, does one decide who gets the bigger raise? How to decide who is promoted into a given position?
How to decide who to lay off during a downturn? Who should be given an opportunity to take on a challenging,
business-critical new assignment? Everywhere one looks, these talent management decisions are dependent upon the
appraisal of an individual's performance, capabilities and potential. In most HR textbooks (and in many organisations),
performance assessment is broken into the following two fimdamental pieces.
• The "What" - What did this person accompUsh? What value is he / she delivering to the organisation?
Is he/she achieving his/her business objectives?
• The "How" - How did this person achieve such results? What is his / her skills and competencies?
How well are they aligned with our corporate values?
Performance Appraisals which is the most visible form of the performance management system, is a developmental tool
used for all round development of the employee and the organisation. Performance is measured against such factors as
job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation,
judgment, versatility and health. Assessment relates to past as well as potential performance.
;
10.3.2 Past Oriented Methods
.i 1. Rating Scales: Rating scales consists of several numerical scales representing job related performance
criterions such as dependability, initiative, output, attendance, attitude etc. Each scale ranges from excellent to
poor. The total numerical scores are computed and final conclusions are derived. Advantages - Adaptability, easy
to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training
required. Disadvantages - Rater's biases.
2. Trait Analysis: Under this method, checklist of statements of traits of employee in the form of Yes or No based
questions is prepsffed. Here the rater only does the reporting or checking and HR department does the actual
evaluation. Advantages - economy, ease of administration, limited training required, standardisation.
Disadvantages - Raters biases, use of improper weights by HR, does not allow rater to give relative ratings.
II
181 I ^ HUMAN RESOURCE MANAGEMENT
3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given and
the rater indicates which statement is true or false. The rater is forced to make a choice. HR department
does actual assessment. Advantages - Absence of personal biases because of forced choice.
Disadvantages - Statements may be wrongly framed.
4. Forced Distribution Method: Here employees are clustered aroimd a high point on a rating scale. Rater
is compelled to distribute the employees on all points on the scale. It is assumed that the performance
is conformed to normal distribution. Assumption of normal distribution, unrealistic, errors of central
tendency may occur.
5. Critical Incidents Method: The approach is focused on certain critical behaviors of employees that
makes all the difference in the performance. Supervisors as and when they occur record such incidents.
Advantages - Evaluations are based on actual job behaviors, ratings are supported by descriptions,
feedback is easy, reduces recent biases, chances of subordinate improvement are high. Disadvantages -
Negative incidents can be prioritised, forgetting the positive ones, overly close supervision.
6. Confidential Records: Mostly used by government departments, and in older organisations where the
concept of self assessment is not encouraged. Here the report is given in the form of Annual
Confidential Report (ACR) and may record ratings with respect to following items; attendance, self
expression, team work, leadership, initiative, technical ability, reasoning ability, originality and
resourcefiilness etc. The system is highly secretive and confidential. Feedback to the assessee is given
only in case of an adverse entry. Rather negative in impact as the ratings are highly subjective and can
be manipulated to suit an occasion.
7. Pen portrait: The assessor pictures in writing about the assessee, regarding his qualities and
performance as well as his potential. Armies use this method in evaluating cadets.
10.6.14 Quantity
• Number of units produced/published/sent/received/processed/deadlines met
• Contacts per hour/day/week
• Cost reduced
• Resources increased
• Increase in area/beneficiary coverage etc.
10.6.15 Quaiity
• New innovative ideas introduced
• Benefit Increased
• Error rate or reworks
• Grievances of employees
• Conflicts
• Returned goods
• Staff tumover
• Complaints and compliments received etc.
10.6.16 Cost
• Variance against budget
• Amount spent vs. benefit
• Utilisation of fimds
• Wastage of fimds
10.6.17 Time
• Speed of delivery (emergency response) etc.
• Reduction in number of minutes/hours/days etc.
• Deadlines and schedules met
• Average call response time
• Projects completed per week/month etc.
• Scheduling and maintenance
A balanced approach to the setting of KRAs brings together many of the seemingly disparate elements of
an organisation's agenda, and relates them to individual performance. It allows a supervisor and employee
to see whether improvement in one area may have been achieved at the expense of another. This approach
is based on four perspectives:
• Organisational perspective
• Client perspective
• Task perspective
• Interpersonal perspective
Key Result Areas should, always identify the current most significant objectives of the position, giving an
indication of the rationale for the given position.
K^ Result Area for a trainer
Bring the Competency level of employees ( grade 4) from current level 2 to level 3.
K^ performance indicators
1. Study current practices and industiy standards with regard to similar grade 4 employee training.
2. Define an illustrative competency profile for the group.
3. Design a model leaming program to cover the desired topics.
4. Identify the right profile of faculfy for the training programs.
5. Prepare a training calendar and define time frame within which to complete training the entire
group.
Performance measures
1. Whether program design accepted by functional heads as relevant to current and future
requirements, cover all identified sectors, technical areas and required qualification levels.
2. Training program results in continuous improvement of processes and enhanced productivify.
K^ Result Area for the Training Manager
A life long leaming culture to be promoted in the orgnisation.
Key Performance Indicators
1. Promotion of industry career information, websites and other mechanisms.
2. Ensuring that career services adequately addresses the industries.
3. Revising and promoting relevant careers publications.
4. Provide targeted careers information to employers.
5. Provide targeted ci.reers information to existing employees.
6. Identifying vocational education and training opportunities for existing workers.
7. Working with industry organisations and government agencies on industry action plans and
agendas.
8. Working with industry organisations and government agencies on a concerted approach and strategy
to promote industry careers.
9. Investigating innovative ways of promoting industry careers.
Ensure that training addresses the vocational education and training needs of industries and provide viable
career paths through vocational education and training.
Performance measures
1. Industry career information and websites and other mechanisms valued as providing relevant and
appropriate industry careers information.
2. Careers information systems and services adequately addressing the industries.
3. Careers information publications revised and published.
4. Continued and active involvement with industry action plans and agendas. Critical success factors
1. Resoince capability to imdertake the required work.
2. Sufficient access to career information and products by leamers, career aspirants and advisers.
3. Industry imderstanding of requirements regarding careers promotion.
4. Continued and enhanced support and promotion of vocational education and training by industry
organisations and government agencies.
• Cost of replacement
Ultimately the criteria for a performance
system should be genuinely related to
Let Us Sum Up
In this unit we have learnt Basics of Performance Management System, the Performance Appraisal
Process, the role of Appraisal, 360° Appraisal, Competency Mapping and Key Result Areas.
Keywords
PMS
Appraisal System
360° Performance Appraisal
Competency Assessment
Key Result Area
Key Performance Indicators
References
• Ganesh Shermon, Competency based HRM, 1st edition, 2004
• Seema Sangvi, A Hand book of Competency Mapping, 2004
• www.ignou.ac.in
• www.citehr.com
• High-Impact Talent Management; Trends, Best Practices andlndustry Solutions, Bersin &
Associates/Josh Bersin, May 2007
mmm
MODULE-C
STRUCTURE
11.0 Objectives
11.1 Introduction
11.2 Human Implications of Organisations
11.3 The Leaming Theory
11.4 The Leaming Process
11.5 Employee Behavior
Let Us Sum Up
Keywords
Terminal Questions
References
11.0 OBJECTfVES
After reading this imit, you should be able to understand:
• Human Implications in Organisations
• Various Theories of Leaming
• The Leaming process
• Appropriate Workplace Behaviour
11.1 INTRODUCTION
Human Resource Management is a way of management that links people-related activities to the
strategy of the organisation's business. HRM is often referred to as "strategic HRM". It has several
goals:
• To meet the needs of the business and management (rather than just serve the interests of
employees);
• To link human resource strategies / policies to the business goals and objectives;
• To find ways for human resources to "add value" to a business;
• To help a business gain the commitment of ejnployees to its values, goals and objectives.
Where should the business be located to compete Where do we need our people? How many do we need
optimally? and at what stage of business growth?
How can we achieve improvements in our unit How productive is the workforce currently? How does
production costs to remain competitive? this compare with competitors? What investment in the
workforce (e.g. training, recmitment) and their
equipment is required to achieve the desired
improvement in productivity?
How can the business impact cultural change? What are the current values of the workforce. How can
the prevailing cultwe be influenced/changed to help
implement a change programme?
How can the business respond to rapid technological What technological skills does the business currently
change in its markets? possess? What additional skills are needed to respond to
technological change? Can these skills be acquired
through training or do they need to be recmited?
i
An important part of HRM is the Hmnan Resources Plan. The purpose of this plan is to analyse the
strategic requirements of the business in terms of manpower - and then to find a way of meeting the
required demand for labour.
11.2.6 Installation
When change projects are first introduced into a work setting, they are deployed (i.e., announced, set up, or in some way
inaugurated) but have not yet achieved their ultimate intent. Installation is about placement; managing the tangible
aspects of inserting a new initiative into the work environment (logistics, plugging in hardware and software, training
schedules, work sessions, etc.).
Installation is an essential part of the overall implementation process, but it is a two-edged sword. With it comes the
potential for either furthering the primaiy purpose of the intended change or actually preventing it from ever tmly taking
form.
Realisation
Realisation takes place when the key purpose for an initiative (for example, confirmed cost savings, measurable
increases in customer loyalty, and documented productivity gains) is actually achieved. Only when installation has taken
place are the necessary elements there to ensure that the installed solution is fiilly used as intended.
The impact of all these four stages on the human resource is substantial. Fmstration and even abmpt withdrawal by way
of resignations happen when projects are killed or terminated early for no apparent reason. When projects get delayed or
discontinued due to a meltdown, a number of the staff involved could also be directly affected; by retrenchment or if
they continue with the project, continued fiiistration at the slow progress. Installation is a happy phase as at least the first
signs of accomplishment are visible; and the people involved find a meaning to their role and efforts. The last stage of
realisation results in meaningfiil role clarity for all those involved as also possible rewards by way of increased benefits
once the project starts bringing in the projected revenues.
11.2.7 Human Landscapes
What differentiates those organisations that simply install new initiatives from those that are able to fiilly realise the
hoped-for benefits is their ability to manage "human landscapes. "At its most basic core, a work environment is
composed of two types of building blocks; those that are "inert" (dealing with such things as structures, policies,
technology, strategies, capital, and tools) and those that are "human" (dealing with such things as perceptions,
assumptions, resistance, fears, aspirations, beliefs, and values). Each work environment has its own configuration of
inert and human components that form a unique identity or landscape that distinguishes it from any other work setting.
The inert aspects are isolated, independent features of the landscape that have no inherent connection to one another (i.e.,
a change in software does not by itself trigger a shift in the way budgets are managed). It is the human component of a
landscape that provides all the links, bonds, and affiliations that exist within work settings. Without the human
component, meaningfiil integration of the various inert components would not exist. For example, a procedure could
stand alone, unaffected by a report showing declining quality, which would be completely detached from employee
performance ratings, which would be unrelated to the new IT system, which would be disconnected from the
implications of a recent merger. People are the bridging agents between themselves and all inert features of a work
environment; therefore, it is the human landscape that is most crucial to the success or failure of efforts to change the
way an organisation functions.
When new initiatives are introduced into a work environment, they cause shock waves of disruption . These points of
impact are the physical and political locations where new entities (advances in technology, new organisational structures,
leadership changes, etc.) are introduced and potentially affect the people they touch. Around each point of impact is a
human landscape that reacts to and dictates the success of the change being introduced. The degree to which a new
initiative spreads throughout a work environment or dies an early death is directly dependent on the human dynamics
reflected in these landscapes (how much commitment or resistance exists, how many other changes are competing for
people's attention, etc.).
Why are the human dynamics around change so problematic? Human landscapes are the breeding grounds for resistance
because all initiatives designed to bring about change, by definition, interrupt the status quo. The greater the promise of
change, the more disruption required. Despite wishful thinking to the contrary, most people are reluctant to disturb the
routines that have formed in their lives. What people resist is not the technological and other changes but changes in
social relationships in the organisation. Employees as human beings, are addicted to established habits, and often cling to
them even when doing so is unproductive or, worse, self-destructive.
This reluctance to depart from the familiar makes it difficult to bring about true organisational transformation. Even
executives who sanction what they say are important changes often hope to somehow accomplish their intentions
without having to personally leave their comfort zones. Furthermore, even if leaders are attuned to the importance of
human landscapes, they often lack the knowledge and tools to deal with these issues adequately. Whether done because
of ignorance, avoidance, or ineptaess, the human landscapes that surround important business solutions are all too often
left unattended or poorly addressed. And when this happens, these landscapes become incredibly effective at
undermining and preventing projects from achieving their fiill potential.
Because of the powerful influence people and their reactions have on the success of change initiatives, it is vitally
important for decision makers to ensure that the human landscapes encircling key business solutions are managed
properly. Many leaders, however, choose instead to deal rather peripherally with or ignore altogether the people
dynamics associated with the major changes they attempt to implement. The key to the problem is to understand the true
nature of the resistance. Much of the time, it is because executives have not fully grasped that leadership today involves
more than making the right decisions about what should be done. In addition to correctly determining the proper course
of action, senior managers must also know how to orchestrate the human infrastructure to ensure that there is enough
support from the key people involved to actually achieve the true purpose of the initiative.
Regardless of the nature of the initiative, introducing change into an organisation is always a resource- consuming
activity (capital, time, energy, attention, etc.). These resources are corporate assets that ultimately fall under the o^ership
of shareholders. All too often however, the promises made about impending change fail to actually translate into the
intended results. Usually this is due to decision makers being dangerously naive about what is required on the
organisation's part for a major initiative to succeed. What is usually missing is either an awareness that perfectly thought
out strategy about what to do can still fall flat when not supported by the people being affected or the tools and
techniques needed to successfiilly direct the human aspects of the project's execution get overlooked.
Another issue inhibiting decision makers from fiilfilling their change-related promises is the assumption that the burden
of accountability for achieving their goals falls on staff or consultants. Although intemal staff can play key supportmg
roles and extemal consultants can deliver sound recommendations, the decision makers carry the greatest obligation for
success. They are the ones who must ultimately ensure that the surrounding human landscape is ready to support
whatever needs to happen.
Regardless of how leaders may contribute to the problem, dysfimctional installation takes place when correct business
solutions are inserted into human landscapes that have not been properly prepared to provide the necessary support.
When this happens, initiatives offer little more than temporary, superficial relief from whatever symptoms the
organisation was trying to resolve. Under such circumstances, the promised ROI cannot be fulfilled. Maximum retum on
the shareholder's investment and full realisation of expected value can only be accomplished by delivering on the
promises made. Fulfilling these promises is unlikely unless the corresponding "human landscapes" have been properly
addressed.
process by which an element is learned through association wth a separate, pre-occurring element. The
typical paradigm for classical conditioning involves repeatedly pairing an unconditioned stimulus
(which unfailingly evokes a particular response) with another previously neutral stimulus (which does
not normally evoke the response). Following conditioning, the response occurs both to the
unconditioned stimulus and to the other, unrelated stimulus (now referred to as the "conditioned
stimulus"). The response to the conditioned stimulus is termed a conditioned response.
The leaming process most characteristic of humans is imitation; one's personal repetition of an
observed behaviour, such as a dance. Humans can copy three types of information simultaneously: the
demonstrator's goals, actions and enviromnental outcomes. Through copying these types of infonnation,
most infants will tune into their surrounding culture.
Enculturation is the process by which a person leams the requirements of their native culture by which
he or she is surroimded, and acquires values and behaviours that are appropriate or necessary in that
culture. The influences which as part of this process limit, direct or shape the individual, whether
deliberately or not, include parents, other adults, and peers. If successful, enculturation results in
competence in the language, values and rituals of the culture. Most induction programs have
enculturation as a major, if subtle objective.
on tiie Qhessboard and also how to properly hold and move a chess piece (psychomotor). Furthermore,
later in the game the person may even leam to love the game itself, value its applications in life, and
appreciate its intellectual appeal.(affective domain).
H.R.M-14
11.4 THE LEARNING PROCESS
Learning Styles can be divided into three broad categories: auditory, visual and kinesthetic.
Characteristics of each are:
Auditory: "I hear": Leam best through hearing, using their ears and voices. These leamers remember
what they hear and remember by talking aloud, like to talk through a concept, enjoy class discussions.
Visual "1 see": Learn best through seeing. These leamers remember seeing things written down, enjoy
pictures of what is described, like written assignment instructions, observe the physical elements of the
teaching situation.
i
We learn: We Remember:
• 1% through taste » 10% of what we read
Initially, all learning comes from perceptions which are directed to the brain by one or more of the five
senses: sight, hearing, touch, smell, and taste. Psychologists have also found that leaming occurs most
rapidly when information is received through more than one sense.
THE LEARNING PBOC£SS ]
11.4.1 Perceptions
Perceiving involves more than the reception of stimuli from the five senses. Perceptions result when a
person gives meaning to sensations. The meanings which are derived from perceptions are influenced
not only by the individual's experience, but also by many other factors. There are several factors that
affect an individual's ability to perceive. Some are internal to each person and some are extemal. A
person's basic need is to maintain and enhance the organised self. The self is a person's past, present,
and future combined; it is both physical and psychological. A person's most fundamental, pressing need
is to preserve and perpetuate the self All perceptions are affected by this need.
Just as the food one eats and the air one breathes become part of the physical self, so do the sights one
sees and the sounds one hears become part of the psychological self. Psychologically, we are what we
perceive. A person has physical barriers which keep out those things that would be damaging to the
physical being, such as blinking at an arc weld or flinching from a hot iron. Likewise, a person has
perceptual barriers that block those sights, sounds, and feelings which pose a psychological threat.
Helping people learn requires finding ways to aid them in developing better perceptions in spite of their
defense mechanisms. Since a person's basic need is to maintain and enhance the self, the instructor must
recognise that anything that is asked of the student which may be interpreted by the student as
imperiling the self will be resisted or denied. Perceptions also depend on one's goals and values. Every
experience and sensation which is fimneled into one's cenfral nervous system is colored by the
individual's own beliefs and value structures. Spectators at a game may see an infraction or foul
differently depending on which team they support. The precise kinds of commitments and philosophical
outlooks which the student holds are important for the instructor to know, since this knowledge will
assist in predicting how the student will interpret experiences and instructions.
11.4.2 Self-Concept
Self-concept is a powerful determinant in learning. A student's self-image, described in such terms as
confident and insecure, has a great influence on the total perceptual process. If a student's experiences
tend to support a favorable self-image, the student tends to remain receptive to subsequent experiences.
If a student has negative experiences which tend to contradict self-concept, there is a tendency to reject
additional training.
A negative self-concept inhibits the perceptual processes by introducing psychological barriers which
tend to keep the student from perceiving. They may also inhibit the ability to properly implement that
which is perceived. That is, self-concept affects the ability to actually perform or do things unfavorable.
Students who view themselves positively, on the other hand, are less defensive and more receptive to
new experiences, instructions, and demonstrations.
Learning is a psychological process, not necessarily a logical one. Trying to frighten a student through
threats of unsatisfactory reports or reprisals may seem logical, but is not effective psychologically. The
effective instructor can organise teaching to fit the psychological needs of the student. If a situation
seems overwhelming, the student feels unable to handle all of the factors involved, and a threat exists.
So long as the student feels capable of coping with a situation, each new experience is viewed as a
challenge.
A good instructor realises that behavior is directly influenced by the way a student perceives, and
perception is affected by all of these factors. Therefore, it is important for the instructor to facilitate the
leaming process by avoiding any actions which may inhibit or prevent the attainment of teaching goals.
Teaching is consistently effective only when those factors which influence perceptions are recognised
and taken into account.
11.4.3 Memory
Memory is an integral part of the learning process. Although there are several theories on how the
memory works, a widely accepted view is the multi-stage concept which states that memory includes
three parts: sensory, working or short-term, and long-term systems. The sensory register receives inputs
from the envirormient and quickly processes it according to the individual's preconceived concept of
what is important. The sensory register processes inputs or stimuli from the environment within
seconds, discards what is considered extraneous, and processes what is determined by the individual to
be relevant. This is a selective process where the sensory register is set to recognise certain stimuli and
immediately transmit them to the working memory for action. No matter what is happening at the time,
when the sensory register detects a fire alarm, the working memory is immediately made aware of the
alarm and preset responses begin to take place.
11.4.5 Forgetting
A consideration of why people forget may point the way to help them remember. Several theories
account for forgetting, including disuse, interference, and repression. The theory of disuse suggests that
a person forgets those things which are not used. The high school or college graduate is saddened by the
lack of factual data retained several years after graduation. Since the things which are remembered are
those used on the job, a person concludes that forgetting is the result of disuse. But the explanation is
not quite so simple. Experimental studies show, for example, that a hypnotised person can describe
specific details of an event which normally is beyond recall. Apparently the memory is there, locked in
199 I ^ HUMAN RESOURCE MANAGEMENT
the recesses of the mind. The difficulty is summoning it up to consciousness. People forget something
because a certain experience has overshadowed it, or the leaming of similar things has intervened. This
theory might explain how the range of experiences after graduation causes a person to forget or to lose
knowledge. In other words, new events displace many things that had been leamed. From experiments, at
least two conclusions about interference may be drawn. First, similar material seems to interfere with
memory more than dissimilar material; and second, material not well learned suffers most from
interference.
All theories of forgetting imply that when a person forgets something, it is not actually lost. Rather, it is
simply unavailable for recall. The instructor's problem is how to make certain that the student's learning is
readily available for recall. The following suggestions can help.
Teach thoroughly and with meaning. Material thoroughly learned is highly resistant to forgetting. This is
suggested by experimental studies . Meaningful learning builds pattems of relationship in the student's
consciousness. In contrast, rote learning is superficial and is not easily retained. Meaningful learning goes
deep because it involves principles and concepts anchored in the student's own experiences.
There is a considerable amount of literature on retention of leaming during a typical academic lesson.
After the first 10-15 minutes, the rate of retention drops significantly until about the last 5-10 minutes
when students wake up again. Students passively listening to a lecture have roughly a five percent
retention rate over a 24-hour period, but students actively engaged in the learning process have a much
higher retention. This clearly reiterates the point that active learning is superior to just listening.
Let Us Sum Up
In this unit we have understood various aspects of Human behavior in the organisation. The Leaming
Theory and Processes, some insight into Memoiy and Forgetting and Employee Behavior
Keywords
Employee Engagement Competitive Advantage Moments of Tmth Hiunan Landscape Augmented
Leaming Cognitive Theory Adult Leaming
Terminal Questions
1. How does an employee feel that he has contributed to an organisation's performance. Elaborate in
the context of human implications of organisations.
2. Define the leaming process and characteristics of leaming.
3. Identify the process of adult leaming and how organisations can identify the right process of
leaming and development for different employee categories.
4. What is accepted employee behaviour at work? Cite instances from your workplace of deviation
and how it was dealt with.
References
• Holt, John (1983). How Children Leam. UK: Penguin Books. ISBN 0140225706. http://
books.google.fr^ooks?id=glEiAAAAMAAJ.
• Mayer, R. E. (2001). Multimedia leaming. New York: Cambridge University Press. ISBN 0-
52178-749-1. http://books.google.com/books?id=ymJ9o-w_6WEC.
• Paivio, A. (1971). Imagery and verbal processes. New York: Holt, Rinehart, and Winston, http:/
/books.google.com/books?id=xmB9AAAAMAAJ.
• Jvmgle Gyms: The Evolution of Animal Play, A^at behavior can we expect of octopuses?
• Sandman, Wadhwa, Hetrick, Porto & Peeke. (1997). Hirnian fetal heart rate dishabituation between
thirty and thirty-two weeks gestation. Child Development, 68, 1031-1040.
• Wood, D. C. (1988). Habituation in Stentor produced by mechanoreceptor channel modification.
Joumal of Neuroscience, 2254 (8).
• Gmsec, Joan E.; Hastings, Paul D. "Handbook of Socialization: Theory and Research", 2007,
Guilford Press; ISBN 1593853327, 9781593853327; at page 547.
• Augmented Leaming, Augmented Leaming: Context-Aware Mobile Augmented Reality
Architecture for Leaming
employee motivation
STRUCTURE
12.0 Objectives
12.1 Introduction
12.2 Types of Motivation
12.3 Motivational Theories
12.4 Employee Attitude Development
12.5 Practical Applications of Motivation
12.6 Job Enrichment
12.7 Job Rotation
Let Us Sum Up
Keywords
Terminal Questions
References
■i
12.0 OBJECTIVES
After reading this unit, you should be able to:
. Understand the concept of Employee Motivation
. Theories of Motivation and their practical Implications
• Types of Motivation
• Job Enrichment
• Job Rotation
rarLbeendefmed.to^eholo^^^
(Kreimer, 1995); a predisposition to ^ ^^^^^^^^ 1994);and
Buford,Bedeian,&Lindner, 199 ); an internal^
______________Intrinsic ______
Expressive
Interest for its
own sake:
Desire to
succeed: "I'm In order to gain
satisfaction In order to gain a
not going to let social acceptance,
derived directly tangible reward
this beat me": either within the
from or avoid negative
mastery class/course etc.
understanding/ consequences.
represents ("Pleasing
skill teacher" or being Can develop
something into more
important « one of the in-
Enthusiasm, crowd, or outside significant
commitment Commitment commitment.
Co-operation if class-
oriented. Achievement rests on
strict criteria of
"relevance"
Extrinsic
-Achievement
Social
Instrumental
Strengths
Intrinsic Extrinsic
Expressive Achievement Social Instrumental
Weaknesses May get "carried Potentially fickle May concentrate on Aspirations may
away": lose sight of What the teaming the appearance of be met in other
wood for trees. represents to the achievement to the ways. Anxiety
student may not be detriment of "deep" may impede
the same as what it learning. Social learning.
represents to you . aspirations may
change.
• h'i.riLtr^S:J — '-"«-'i'X.and
The needs, hsKd torn basic (lowest^Ues.) ,o n,« eomplex (highest-lates.) a,c as follows:
• Physiological
• Safety
• Belongingness
• Self esteem '
• Selfactualisation
He distinguished between:
• Motivation; (e.g. ehdlenging woH. recognition, responsibiliW which give positive satisfaction,
Goal Theory is based on the notion that individuals sometimes have a drive to reach a clearly defined end state. Often,
this end state is a reward in itself. A goal's efficiency is affected by three features: proximity, difficulty and specificity.
An ideal goal should present a situation where the time between the initiation of behavior and the end state is close.
This explains why some children are more motivated to learn how to ride a bike than mastering algebra. A goal should
be moderate, not too hard or too easy to complete. In both cases, most people are not optimally motivated, as many
want a challenge (which assumes some kind of insecurity of success). At the same time people want to feel that there is
a substantial probability that they will succeed. Specificity concerns the description of the goal in their class. The goal
should be objectively defined and intelligible for the individual. A classic example of a poorly specified goal is to get
the highest possible grade. Most children have no idea how much effort they need to reach that goal.
identify flieir motivating factor or thirTi^ST;,^ ¡««"'''»I can clearly
goal, they „ill neyerhave J^owitolZ.t ^
that he holds hta, in high regard. b»»® but overworks himself on the job to show
J.
employee
motivation |
• Honor,
the need to be
loyal to the
traditional values of one's clan/ethnic group
• Idealism, the need for social justice
• Independence, the need for individuality
• Order, the need for organised, stable, predictable environments
• Physical Activity, the need for exercise
• Power, the need for influence of will
• Romance, the need for sex
• Saving, the need to collect
• Social Contact, the need for friends (peer relationships)
• Status, the need for social standing/importance
• Tranquility, the need to be safe
• Vengeance, the need to strike back
In this model, people differ in these basic desires. These basic desires represent intrinsic desires that directly motivate
a person's behavior, and not aimed at indirectly satisfying other desires. People may also be motivated by non-basic
desires, but in this case this does not relate to deep motivation, or only as a means to achieve other basic desires.
We can assume that given the motivation levels in a person, there is a certain amount/ degree of satisfaction in him at
any given time. When this satisfaction level is disturbed, the search for greater satisfaction or another level of
satisfaction begins him. The greater the expected level of reward, the greater or more intensive the search. The greater
the reward, greater is the satisfaction. In other words, the level of satisfaction has moved to a higher level. But there
could be cases where the search does not yield expected results and could produce frustration. Some struggle and fmd
out newer ways of overcoming frustration; some fail to find a way out and this could lead to displacement, aggression,
resignation or
regression.
H.R.M-15
W^m
I HUMAN I
1^.5.1 Education
W i, ¡„,„ a mots ¿fri"*™^ l™«. ».ta. m a fe s o ^ ^ I " ' ' ' « a « ' '
1- SeiaiMjorgoaUulfollowapathneMftl,« ••
» succeed a. goala'you^lSri^"'"""""''^"-- ^«Xou
2. FtaishwteyoustartAhalftoi^h.,. ■ ^
• Motivationrequires Recognition ^
• Participation has motivating effect
• Seeing ourselves progressing Motivates us
• Challenge only motivates ifyou can win
I
employee motivation | 215
12.6.1 Limitations
But even the strongest supporters of job enrichment readily admit that there are limitations in its application
Some such observations as under:
1. Technology: There are some jobs, which are highly technical requiring a special range of skills where it
would be difficuh to enrich such jobs. And with specialised machinery and assembly line techniques it
may not be possible to make every job meaningful.
2. Cost: Though a great many companies appear to be interested in job enrichment programs, the extra cost
may seem high if a company is not convinced that the return will at least offset the incremental
expenditure. General Motors tried six man and three man teams in the assembly line but found the work
slowed and cost increased. At Saab & Volvo motors India, it was found that increased cost was
compensated by reduced absenteeism and labour turnover. Yet the cost of the programme was a
formidable factor.
3. Attitude of managers and workers as lack of interest in doing something different or plain laziness to take
on an enlarged role act as deterrents. Some have complained that enriched jobs provide too many
opportunities to commit mistakes and some workers fear that the increased productivity sought may even
mean loss of jobs.
4. Reaction of union Leaders: There has been little or no support of job enrichment by imion Leaders. As
they could later on be held responsible if better efficiency levels result in loss of jobs.
I; I
<l.ssa,,sftc„„„ bu, „„, Of^^, - They „ere seen as potential som^Tf '
Job enrichment, then, aims to create greater opportunities for individual achievement and recognition by
expanding the task to increase not only variety but also responsibility and accountability. This can also include
greater worker autonomy, increased task identity and greater direct contact with workers performing servicing
tasks.
Whilst job enrichment is based on a theory resulting from research carried out by Herzberg and his colleagues, the
research is not itself without its critics. Later research has not always produced such neat results. Also the focus of
the approach is the individual job and only limited consideration is given to the wider context in which the job is
carried out, particularly social groupings.
Job enrichment is improvisation of both tasks efficiency and human satisfaction by building into people's jobs,
quite specifically, greater scope for personal achievement and recognition, more challenging and responsible work
and more opportunity for individual advancement and growth. An enriched job will have more responsibility,
more autonomy (vertical enrichment), more variety of tasks (horizontal enrichment) and more growth
opportunities. The employee does more planning and controlling with less supervision but more self-evaluation.
In other words, ti:ansferring some of the supervisor's tasks to the employee and making his job enriched.
Volvo's experiment in job enlargement is worth mentioning. The ti-aditional assembly line in car manufacturing
was replaced by work teams, consisting of 15 to 20 who were given the task of some specific work like
manufacturing of breaks etc. The team was to work in an independent work shop and
21» I human resource MANAGE bemg^ greater work au,
„«,my, i„e«,ed
tS ^nH^e.^ """
12.6.6 BenefiteofJobEnrichment
io"-»'"- » vaHety.
- -- ^eareh on long
efficiency of production and customer service, and how each member of the team contributes to the process.
Hence, job rotation permits individuals to gain experience in various phases of the business and, thus, broaden
their perspective. Job rotation is a developmental technique that has been widely used but, surprisingly,
received little attention in himian-resources studies. Empirical research in this regard is sorely needed (Beatty,
Schneier & McEvoy, 1987).
Traditionally, job rotation is usually addressed at an organisational level. From the employers' point of view,
organisational theorists have advocated frequent rotation as a means of reducing fatigue and boredom on
production jobs so as to maintain productivity (Miller, Dhaliwal, & Magas, 1973) and fairly frequent rotation
after the initial hiring as a means of orientation and placement (Wexley & Latham, 1981). Job rotation enables
the training of workers to be backups for other workers so that managers have a more flexible work force and a
ready supply of trained workers (Rothwell & Kazanas, 1994). When rotation occurs at longer intervals, it has
been thought as a practice of progressive human resource development or a means of enhancing the value of
work experience for career development (Campion, Cheraskin, & Stevens, 1994).
The importance of job rotation has been recognised even at the national and transnational level. It has been
considered as one of the main solutions to the challenge of unemployment in the European Community.
Currently, 14 countries, 5000 public or private enterprises, and 100000 students have been involved in a "EU-
Job rotation" project, to resolve the bottleneck problems resulting from economic growth and to help reduce
the unemployment rate (See http://www.aof-give.dk/eujob/presentation.html).
Let Us Sum Up
In this imit we have learned about Employee Motivation, the various Theories and Strategies of Employee
Motivation, Employee Attitude Development, Job Enrichment and Job Rotation.
Keywords
Needs Theory
Herzberg's Two Factor Theory
Unconscious Motivation Intrinsic &
Extrinsic Motivation Job Enlargement
Job Rotation
Terminal Questions
References
Ineemalional Business StZ^"""'?;!«"'"'* " '"'=""'«»»»1 perspeetive. Journal of ' "^X'i^r" ^ ™.iva.io„ .o won, New
VoHc-
Busi„es;HoriL„rS^~=^'°>'-'Wo,te.andsuperviso,sgivediffe,«,,an^^^
13 employee development
STRUCTURE
13.0 Objectives
13.1 Introduction
Let Us Sum
Up Keywords
Terminal Questions
References
mmmm^m "T'rttfi
. 'l:
IB
13.0 OBJECTIVES
After reading this unit, you should be able to:
13.1 INTRODUCTION
Growth is a natural, physical phenomenon and a number of faculties develop over time in every human
being. While the majority of those of average education and caliber do not get much opportunities to
grow in a job, (till recently, the maximum a shop floor worker could aspire was to become a foreman
by the time he retired)the last few decades have seen a dramatic change. HRM became institutionalised
and training got to play a major role in corporate strategy with the result that development of an
employee became a major key result area for all managers in whatever field. Specialised training
approach along with generous budgets have made development a core issue, mandated by the Board
and enforced by every well meaning CEO.
13.2.1 Training
Training refers to the process of imparting specific skills. An employee undergoing training is
presumed to have had some formal education. No training program is complete without an element of
education. Hence we can say that Training is offered to operatives. Education is a theoretical learning
in classrooms. The purpose being to teach theoretical concepts and develop a sense of reasoning and
judgment. That any training and development program must contain an element of education is well
understood by HR Specialists. In fact organisations depute or encourage employees to do courses on
part time basis. CEOs are known to attend refresher courses conducted by business schools.
13.2.2 Development
point, now is not the time top reaching more efficiently, tes etd d^L
at
opportunities as well trained employees work
development. Employment traning improves employee engagement, loyalty and
give salosttoxctïle™^^^^
»^sri/^s rr ~
Training is skills focused. Training is presumed to Trainings are generally need based. Training is a
narrower concept focused on job related skills.
have a formal education
deficiency in
Training may not include development.
Training is aimed at improving job
related efficiency and performance.
Development is creating leaming
abilities. Development is not education
dependent. Development depends on
personal drive and ambition.
Development is voluntary.
Development is a broader concept focused on
personality development.
Development includes training wherever necessary
Development aims at overall personal effectiveness
mcludmg job efficiencies.
to machinery and reduces dissatisfaction, absenteeism,
complaints and turnover of employees. Above all, training is
an investment in the right type of employee resources, with
a promise of better retums in fiiture.
Training is needed at the individual level, to improve
individual performance or fix performance deficiency,
improve skills or knowledge and shape attitude. To
anticipate fiiture skill-needs and prepare employee to handle
more challenging tasks and also to prepare for job transfers
and assigning of more responsibilities. At the group level,
training helps prepare for any change in organisation strategy, when new products and services are
launched as also to avoid wastage and accidents.
Many organisations face the challenge of developing greater confidence, initiative, solutions-funding,
and problem-solving capabilities among their people. Organisations need staff at all levels to be more
self-sufficient, resourceful, creative and autonomous. While conventional skills training gives people
new techniques and methods, what will develop their maturity, belief, and attitude, which are so
essential for the development of managerial and strategic capabilities is a well planned behavioural
trainmg intervention. The focus here is on developing the person, along with the skills. Provide
learning and experiences that they would like for their own personal interest, development and
fulfilhnent. Performance and capability are ultimately dependent on people's attitude and emotional
maturity. Help them to achieve
responsibilities, roles and teams.employee development relevant to managing higher
On the HR front a major shift has taken place with regard to the freeze on '"«'^^'tme'it. With ^ K t Von of the BSRB
banks now have the freedom to recruit staff on their own and also invite
ttlltjo-rem"^
Cel. many banks are trying to introduce a perfomiance linked mcentive system.
There is snecial focus on corporate governance and the setting up of specialised board-level panels such
on.
Standine Committee on International Financial Standards and Codes under the Chairmanship ^ iTy. V
The RBI's
t^hriLfified glow standards and codes as part of the efforts to create a sound
13.6
future OF BANK EDUCATION IN INDIA
------ II^L^IM
" >s now commonplace to say that the 7Uf n
The transformation of banking caused by the rapid development of information and communication
"irh^provided baling entities with new ways of bringing th^^^
i^e banks would now have to increasingly deal with knowledge worke^ i.e «-/^o works pnmmly ^^ information and
uses knowledge in the work place. Traditional banking has electronic banking, and therefore the standard form of
contact - personal contact - is taking a back seat to new, faster, more conformable, and cheaper means of
communication.
The introductionofelectronicbanking services also creates new tasks to be faced, such^theoptimis^^^^^
^d HLn chamiels and the security of data transfer. The customer will not purchase a servie &at ?ails to meet his
requirements or a service that does not guarantee the required pnvacy and sec^^^ B^ therefore are trying to devote
enough attention to all aspects of the modernisation of traditional
banking.
Basic electronic banking includes services provided through self-service zones, ^^
mail Banking andPhoneBanking.Anew product is the electronicpurse,sometunescalleda multipurpose
wLh is a payment instrument for making non-cash pa^en.. The I S^cific fomi of electronic banking.
Electronic commerce comes m three basic forms, the e-shop,
e-store, and e-exchange.
With such an array of new products and more on the way, based on customer demand, India's banMng 72sTnZi
strengthen itself significantly if it has to support the modem and vibrât economy which
Moires to be pTcusing on enriching humancapilal will help theb^^^
^ eS. ms sector nlds to fiindamentally strengflien institutional skill ^-Is ^^ and marketing, service operations, risk
management and the overhaul the organisational Perfo™^ce tSiic Strengthening humL capital will be the single
biggest challenge. The older employees wdl either fede awT-get Quipped ^^th some of the skills needed for the new
banking while the younger empirees ZSZ^Zd PSU banks would come with a different set of capabilities, which need
to
"SiÎdÏerightwaythrough training andperiodicrefr^^^^^
also have the need to fimdamentally strengthen skill levels.
In the field of the knowledge economy, the re-orientetion in banking is required at two levels. The first
of banking man^-nt, the continuous improvem^t of which the use of infomiation technologies and
knowledge systems. This will involve, above W« for
financialsystemmanagement,intemalqualitymanagementsystemsmba^,m^^^^^^
and manaiment infomiation systems. All these will need strengthenmgthroughasenesofwelldesig^^^
training programs, to be conducted by experts in the respective fields. 13.6.1 Issues and Challenges in
Let Us Sum Up
Answers
1. True, 2. False, 3. False, 4. False
Terminal Questions
1 Hire for Knowledge and Train for Attitude. Do you agree with this traditional approach?
2'. Differentiate between training and development. What does a training needs analysis help m
developing? u*
3 Indian banking today is exciting for the employee as well as the customer. Elaborate
4. Training and education inlndianBanking has tobebasedontransferofastrongknowledgeba
Do you agree?
References ^ , , .,
. Gagne, R. (1962). Military training and principles of leaming. American Psychologist, 17,263-
276
. Gagne R (1985). The Conditions of Leaming (4th ed.). New York: Holt, Rinehart & Winston.
. Gagne R (1987). Instractional Technology Foundations. Hillsdale, NJ: Lawrence Erlbaum Assoc.
. Gagne! R. & Driscoll, M (1988). Essentials of Leaming for Instmction (2nd Ed.). Englewood Cliffs, NJ:
Prentice-Hall.
. Gagne, R., Briggs, L. & Wager, W (1992). Principles of Instmctional Design (4th Ed.). Fort Worth,
TX: HBJ College Publishers. Relevant Web Sites:
. The following web sites provide fiirther information about Gagne and his work:
http://www.e-leaminggura.com/articles/art3_3.htm
http://www.my-ecoach.com/idtimeline/theory/gagne.html
http://www.ibstpi.org/Products/pdf/appendix_A-C.pdf
training methodology
STRUCTURE
14.0 Objectives
14.1 Introduction
14.2 Subject matter of Training
14.3 Training Methodology
14.4 Current Trends in Training
14.5 Training Infrastructure in Banks
14.1 INTRODUCTION
Indian Companies are using latest technologies to train and re-skill employees, rich are P^ji^^g ^ ^
more flexible and convenient compared to traditional methods. The demand for skilled
Znowttrwori^^^^^^^ is encouraging companies to adopt the latest technologies for corporate
However, while coi>ventional skills training gives people new techniques and methods, it won't
develop their maturity, belief, or courage, which is essential for the development of managenal
and strategic capabilities.
2 Performance and capability are ultimately dependent on people's attitude and emotional matmty.
■ Help them to achieve what they want on a personal level, and this provides a platform for trust,
'emotional contracting'with the organisation, and subsequent sMlls/process/knowledge development
relevant to managing higher responsibilities, roles and teams^
3 When people develop confidence, integrity, and more knowledge, they automatically become
■ more proactive, solutions-focused, responsive, which has implications across a whole team with
multiplying effect. This means the rewards must be there too, or people have no reason to stick
their Lks out. And not just the prospect of fmancial reward. More importantly the He^berg- type
motivators - real extra responsibility, recognition, and involvement in new successfiil and
interesting projects. This is the fiiel of people's growth and change.
The Society for OrganisationalLeaming (MIT) definesa'-Learning Organisation''asonem
all levels, individually andcollectively,are continually increasingtheir capacity toF^^
care abo^t. The Leaming Organisation is therefore a collective ideal, a vision. The distmguishing feature
aboutaleaming organisation is that it promotesacultureofleaming,acommunityofle^ers,anditei«^
that individual leaming enriches and enhances the organisation as a whole. There c^ be no organisatioml
learning without individual learning, but individuallearningmustbesharedandusedbyft^^^^
familiar litany of challenges and changes in global competition, technological advances, quality
improvement, knowledge work, demographic diversity, changing social stractuies - is toving
orgamsatiom to adapt and change."The ability to learn faster than your competitors may be the only
sustainable competitive advantage" (Murrell and Walsh 1993, p. 295). Today, the banking industry is m
the mitbt of a huge transformation. The demographic profile of the banking sector indicates a huge gap
m temis of staUs and knowledge. While the PSU and old private banks have a large number of old^,
expen^ced and knowledgeable staff, the new generation banks have a young bunch rf employees hi^ly
operatioml aspects and technology but low on banking knowledge. The need of the horn is to im^
l^wledge more than leaming, and to retool the experienced persomiel mto more valuable one^ ^e
traditional approach of job rotation and promotional incentives too are being looked at m a different
perspective. Lks today reaUse the need to design career paths and job profilesclearly for Its pe^^^^^
the flux of human capital across industries is not a barrier for the learners. Ihe issue that a bank faces today is
to have cost effective, highly
knowledge transfer. How can a bank ensure that its employees are knowledgeable than just literate.'
How can it hamess the power of various media to impart the same knowledge across different leaming
curves? Most importantly, how can a bank ensure that training goes in tandem with daily operations,
without compromising on the quality aspect?
»»I I HI-".
14.3.1 Internet as a Leaming Medium
IS often left out in order to simplify the contenflïk fT P'"'®®®' ^^^raneous information skills in areas of knowledgeTafart^Ce^^^^^^
remain stagnant or stable to ensure'L" SSp^act^^^^ technology does not tend to
after another. The specific facts that we Ce to S P^^^em
obsolete almost as Ln as we miteT it '^"^'^dge becomes
a meaningfiil manner. The pS^i loSw^n^^^^ development to take place over time, in
system should be capable of ZoS^^^^^ P-^-P-ts. The
them enough scope L ^^to^y
TRAINfl^Q METHODOLOGY | 2«
Corporates expanding their geographic presence and increasing their headcount are looking at virtual universities to
enhance employee knowledge. Traditional sectors are actively pursuing e-leaming, more common in the knowledge
sector. Providers of e-leaming tools and technology say that they are witnessing over 100% aimual business growth.
Competition is forcing corporates to commit substantial resources to enhancing employee knowledge. Indian companies
increasing their global presence through acquisition and intemal growth are seeing a growing base of culturally and
academically diverse base of employees, with a wide range of skills sets. To provide them with a uniform knowledge
platform, corporates are leaning on e-leaming solutions.
I'
CiseoD^eiopmentO ^ixîirtoriorria^^
iè'XtaiïZttÎ^tTZi: ^ «an. and business
Piyush Dutta, associate vice president for human resources at Hrr r«.««». c . o
.eer^panyalsousesaL ^cr,::^^^
S; «ru-Sr^- - ^-^-'Oiie. and Tata
respeetively ta» ^eir own tnmnng eamp»«s in Mysore and Thimvananthap»™,
WK ■ ^ i m■ i H
Similarly, in the banking industry, the ICICI Bank partnered IT education services provider NUT to set
up the Institute of Finance, Banking and Insurance (IFBI), which provides training in the banking
insurance and allied services.
According to Rao of NIS Sparta. India continues to face an acute skill shortage and more needs to be
done to resolve the issue. "Corporate India is not doing enough insofar as training employees is concerned
Companies often find it difficult to identify skill set gaps of their employees," he said.
14.5.4 induction
include """
Broadly Spealcing
Employees and managers can be divided into 4 categories viz; activist, reflector, theorist and pragmatist. Activists are
gone for anything. Reflectors as the term suggests, would like to think over. Theorist is a person who would like to
connect his experience with theory. Pragmatist is a person who thinks it best o apply his experience m practice.
Acknowledging the learning styles of the participants will be helpful
llU LtgZf^'"® ^^ with
spirit Disadvantage - It may beeZ^^T^^? coordmtton ean be improved, iitstills team ^Iwtiot" - = verba, potation to
(a) Case Studies: It is a written description of an actual situation and trainer is supposed to analyse and give his
conclusions in writing. The cases are generally based on actual organisational situations. It is an ideal method to
promote decision-making abilities within the constraints of limited data.
(b) Role Plays: Here trainees assigned the part of the specific personalities in a case study and enact it in front of
the audience. It is more emotional orientation and improves interpersonal relationships. Attitudinal
change is another result. These are generally used in MDP.
(c) Sensitivity Trainings: This is more from the point of view of behavioral assessment, under
different circumstances how an individual will behave himself and towards others. There is no
preplanned agenda and it is instant. Advantages - increased ability to empathise, listening skills,
openness, tolerance, and conflict resolution skills. Disadvantage - Participants may resort to their
old habits after the training.
(d) Independent study: individual can plan and carry out their own learning programs.
(e) Action leaming: Individual managers can assist each other in the learning process.
(f) Laboratories: Here experience of individual managers are stored and are available for use.
4. Programmed Instractions: Provided in the form of blocks either in book or a teaching machine using
questions and Feedbacks without the intervention of trainer. Advantages - Self paced, trainees can
progress at their own speed, strong motivation for repeat leaming, material is structured and self-
contained. Disadvantages - Scope for learning is less; cost of books, manuals or machinery is expensive.
5. Computer Aided Instractions: It is extension of PI method, by using computers. Advantages - Provides
accountabilities, modifiable to technological innovations, flexible to time. Disadvantages - High cost.
H.R.M-17
14.7.2 Career Advancement
e1
does no, always mean pronto proacflvely commnmcalc U,a. "advancement-
8M I HUMAN—-
each of these generations - which span ZLt frr ? ^he workplace. Workers in
career goals and work styles^Je™^ motivations,
managing leaming, training andl^de^^^^^^^ ~ ^^"vering and
organisations will be better able to retain a ^rl " T ? ^^ employees,
them engaged, productive and suiTsfoU: re lonTeftel'li^^^^^ ™ ^^
are cultural differences as well. ^ generational differences, there
14.9 TALENT MANAGEMENT
Many organisations face the challenge of developing greater confidence, initiative, solutions-finding,
and problem-solving capabilities among their people. Organisations need staff at all levels to be more
self-sufficient, resourcefiil, creative and autonomous. This behaviour enables staff to operate at higher
strategic level, which makes their organisations more productive and competitive. People's efforts
produce bigger results. It's what all organisations strive to achieve.
However, while conventional skills training gives people new techniques and methods, it won't help
develop their maturity, belief, or courage, which is so essential for the development of managerial and
strategic capabilities. The focus is, on developing the person, along with the skills. It is important to
provide leaming and experiences that they would like for their own personal interest, development and
fiilfillment. Perfomiance and capability are ultimately dependent on people's attitude and emotional
maturity. Help them to achieve what they want on a personal level, and this provides a platform for
tmst, 'emotional contracting' with the organisation, and subsequent development of the skills,
knowledge and attitude relevant to managing higher responsibilities, roles and teams.
Participative workshops work well in beginning for this type of attitudinal development. Involve people
right from the start. Focus on what they want. Begin with a personal development questionnaire to set
the scene and provide examples of'altemative' leaming opportunities. It starts with the person, not the
skills. It is about attitude and emotional maturity. Emotional intelligence principles and methodologies
fit very well with modem approaches to developing people's belief, maturity and attitude. Case study
methods as well as situational experiences studies and discussed will also help give the participants a
better feel for tackling real life situations.
When people develop confidence, integrity, and sound knowledge of the job,, they automatically
become more proactive, solutions-focused, responsive, which across a whole team has a cumulative
effect. Johari window is a usefiil model too. So many people at work are simply 'going through the
motions', acting in a 'conforming' state, often because they feel insecure, lack confidence to do what
they think is right, or are nervous about being bold, most of which can be avoided with a Httle effort
and planing to design appropriate training programs which will address a lot of these deficiencies.
So. how do we train this group Of casual social butterflies now that theyVe pa. of our wo
14.10.2 Training the New Generation (Gen Y)
aud-oand video
Allow freedom
itsss r
at their leisure. Digital options also gi^ G^TtLffr f courses
previous training session on thero^ "^^«^als that were taught in a
videos on the training topic. courses and share expert Encourage teamwork
14.10.3 Training for New Hires at a New Generation Banic - Playing Games
For some new hires at a new generation bank, play is an integral part of work. These hires, typically
junior and middle-level managers hired for customer-facing fiinctions, are made to play online games for
several hours before they get down to the business of dealing with people.
"Gaming is an integral part of our induction programme," says one of the new trainees at the bank. More
than 2,000 ICICI employees have been playing games, and winning prizes, as preparation for handling
customers. The use of online games fits in nicely with the HR department's focus on e-leaming. "The
gaming initiative reinforces our brand proposition of anytime, anywhere leaming." Say the trainees.
The training department uses four games-queue management, cheque clearing (operations), cheque
payment across the counter, and savings accounts. As the names suggest, these games present situations
with customers seeking services in these areas. The games, developed by the Tata group's e-leaming
company, Tata Interactive Systems, require the staff to provide quick services and resolve issues
efficiently
For instance, the cheque clearing game involves all the steps involved-fi-om the point a customer presents
the cheque to the bank executive till the encashment of cheque. For every right move players make, they
get a part of the key to the kingdom, while they lose a life for every wrong move.
It is only after the new hires become adept at winning and achieve a certain proficiency that they are
allowed to actually deal with customers. "The drill prepares employees to deal with customers efficiently
from day one. All the effort is about creating a good experience for customers," says one official.
Experts say gaming could become an important tool in human resource management. "Gaming as a skill
enhancement and training tool has a huge potential in sectors and companies that are growing very fast,"
says Quentin Staes-Polet, CEO, Kreeda Games India Pvt Ltd. "This is all the more trae for sectors that
have a significant population of young people in the workforce. The fan element in the games infiises
interest in leaming, which is an important thing for the young generation known for its changing interest
levels," adds Staes-Polet.
Games-based training also tums out to be much more cost effective than other training methods. The
gaming engines used at the Bank cost up to Rs5 lacs. Games also provide the Bank with an opportunity to
assess skills and performance of employees without actually allowing these people to interact with
customers. "Games can be used to capture key real-time information about people, activities and
outcomes and to provide more frequent guidance and link performance to recognition," says Daniel Dias,
director, IBM India Research Laboratory.
Meanwhile, the Bank says there has been a tangible reduction in error rates and improvement in
productivity among employees trained through games. "But we would like to be a little guarded and
gauge the results across functions, and over a period of time, before we call it a success," says bank
officials.
management
14.10.4 Return on Investment (ROI)
one's axe and get ready for bigger acL in Zlys grind
«ts^rrds ~ ^^ -- efficiency
workforce.
Content, for example, isanext-generationtalentmanagementsolutiondesignedtom^^^^^
offerings available to users. Organisations can tailor such solutions to ensure that Aeir employees are
receiving andinteractingwithlhemostappmpriateandrelevantleaming^dtrai^^
and activities By providingasingleplace where leamerscanbrowseandselectlearmng content, solutions
and courses in a way that transcends employee leaming styles and generational sensitivities.
Let Us Sum Up
In this unit we have leamed the subject matter of training, training methodolo^, current trends in ttailg,
as well as various types of training. We also saw the benefits of training tale«gem^^^
^special emphasis ontrainingofnewgenerationemployees.ROIontrainingcompletedt^^
Keywords
Subject Matter of Training
Training Infi^stmcture Soft
Skills Training Training of
Generation Y Talent
Management ROI on
Training
Terminal Questions
2. Where wil, you „^e al,er™,te modes of .raining such as web based ttaining.
3. In fte banldng indusUy onteourcing of ttaining is essenUal. Do you ag,«.
References
• Swali Prasad is a freelance IT wi^^ based in IndU
. Ga^e, R. (19.2, Milita, tuning and principles of leaming. American Psychologist, 17, 263-
G.gne.R.,^87,Instruc«o^,Techno,ogyFonndations.Hillsdale,m^^
SK; " (2nd Bd.,. Hng,ewo„d'
• Hd., Fort
http://wwwibstpi.org/Products/pd^appendix_A-Cpdf
MODULE-D
INDUSTRIAL RELATIONS
(Part A)
STRUCTURE
15.0 Objectives
15.1 Introduction
15.2 Personnel Function
15.3 Legal Aspects of Personnel Function
Let Us Sum Up
Keywords
Terminal Questions
Reference
15.0 OBJECTIVES
After studying this Unit, you should be able to*
15.1 INTRODUCTION
labour too has seen the change from a hillv ^r . ^ « «»ajor change and
secondly no longer matters and each ^tTe^d/ '' - wSl
A look at the newer trends in managing neoole th* ^ •
»anagmg, nurturing and retaining talm Lems ^ bt environment, reveals that attracting
llm ^ -- facing organisationrS strong values, or robust
performance ethics and n^, u f ^ organisation that is flexible has
has led to companies proactively taking the^^^^^^ work on latest technology The whe talent can bl^^^^
^d recognition mechanism that provides value t pt^ ^«--d
hand, the union bargaining for tough concession« /Jlu ' management dealing with an iron
something more democr^tk and inivXalleTMr "^^^^-tion is giving wa^o
^ganisationFromapurelypeopleco
15.2.1 Strategic
Organisation Mission / Vision, Business Goals, Strategy, Oiganisation Life Cycle Stage and Organisation
Competency Identification (Key Competencies Required) including Competency Mapping Industry/
Competitor Analysis
15.2.2 Professional
• Performance Management and Review Mechanism, Key Result Areas, Key Performance Indicators and
Key Deliverables.
• Employee Morale and superior performance.
15.2.3 Administrative
• Selection, Performance and Potential Evaluation, training and development. Compensation, Rewards
and Recognition, Employee retention.
• Career and Succession Planning.
• Employee welfare.
15.3 LEGAL ASPECTS OF PERSONNEL FUNCTION
Labour has for centuries, been at the mercy of the employer, and exploited to the maximum whether it be in the
coal mines of Europe in the 1 c e n t u r y , modern mines in China, or even the hi tech call
environment though some of the acCrue Itj H ^^^^^^^
organisation is free to decide its activity L of h!^. a relook. A bu^ess
nauon-a corpomte citizen who ha^ tr^^/rbf c ~ ^^^« « «l«« a cilL of I
under the labour legislation. regulations which have b^n^
The important labour laws in India which annlv
' organisations can be classified under the following
• Legislation on Working Conditions
The Factories Act, 1948 The Mines Act, 1952
To ensure timely payment of wages and avoid unauthorised deductions from the wages.
To spell out and notify the service conditions for the information of all concerned.
To provide for formation of trade unions with a view to promoting collective bargaining.
To arrange for social security measures in the event of sickness, disablement and death of
workmen.
8. To promote industrial peace by providing for machinery for settlement of industrial disputes.
9. To be receptive to the market demands and enact legislation for facilitating modem businesses.
we.er.ewor...„c.e„.„„ornecess..for«,ebns.essoru,ees.B„sW
whearer «.e work is Of a per™,ia, n.,„„ or Of snfflcien. d««ion; and
. whefter i, is ordinarily done tfm,„gh n,g„,a, „orlanen. • A conliaclor is requited to provide:
• -- - p-». of If the contractor fails to pay the same. ' P^^ ""Paid wages
By a notification of December 6 I07A ^.^
Note
contract
Salient features
• Trade dispute' has been defined by the Act is a dispute between employers and workmen, or workmen
and workmen, or employers and employers, which is connected with the employment
or non emploj^ent or terms of employment or the conditions of labour. The definition is almost similar
6 I HUMAN RESOURCE MANAGEMENT
to the definition of industrial dispute given in the Industrial Disputes Act
. Workmen- means all persons employed in trade or industry with whom the trade dispute arises. •
Trade union' means a combination formed:
or between employers and employers; or 2. for imposing restrictive conditions on the conduct of
any trade or business. Note: although trade union is commonly understood as union of workmen, an
organisation of employers
can also be registered as a trade union under the Act. -«on or employers
' ^ trade union can by subscribing their names to the rules of the
union and by complymg with the provisions of the Act, apply for registration of the trade union
. If Ae trade union is in existence for more than a year before it applies for registration it shall submit a
statement of assets and liabilities in the prescribed fZ to the S^Trade
I
• «»Preven'illegal strite and Wouts •features
i
• Deductions are authorised for absence. However if 10 orn,.
I HUMA^J. RESgMBpE:;,^!^^
286
BiiW
rsrsi^a:: —- -- -
applicable to banks. incorporated some of these provisions and made this Act
\'::roer:H:crurvr:;ro'rds
con,ri«o„ ,0 d,e pension Jd or '¿ "d ', """ """
on discharge, and („veiling allow^™ ' ^^ P«yaWe
• ^«""-^tobepaidwithinaperiodofSmonthsfromtheclosethea •
or work of a atai^r rl^, «-""em»»» te m™ and „omen for U,e same wori, ' " -^e ma..er
Of eond«ons of service
• ^.^..and„.er<.„men.n.a«onteemp,o.ees ^
15.3.4 Legislation on Social Security
The Workmen's Compensation Act, 1923
• ? œ ^ f - - - — . e workman in an aeeiden.
<Ws no. eoMinue for more .han S "'^We,^™
- -enee of .„k
compensation is payable. Similarly, if the workman does not present himself for medical
examination or does not take the treatment which aggravates the injury, he is not eligible for
compensation. Schedule I lists the different types of injuries and percentage loss of earning
capacity or disablement.
• Section 4 to 7 detail the rate at which compensation is payable for different types of disablement
caused due to injiiry for.fatal injury as well as permanent total disability.
• Permanent Partial Disablement - According to incapacity caused.
• Temporary Disablement - fixed amount per month up to a period of 5 years.
• The Act provides for the compensation amount to be deposited with the Commissioner for
Workmen's Compensation in the case of fatal accidents. The amount deposited with the
Commissioner is payable to the dependants of the workman.
• If any workman who is in employment for more than 6 months, contracts occupational disease
peculiar to that employment, it is deemed to be an injury arising out of and in the course of
employment. Some of the occupational diseases listed in Schedule III are: anthrax, poisoning by
lead, phosphorous or mercury, telegraphist's cramp etc.
• Doctrine of Notional Extension: The Supreme Court explained this doctrine: "as a rule
employment does not commence until the workman has reached the place of employment and
does not continue when he has left the place of employment. This is however subject to the
theory of notional extension of the employer's premises so as to include the area the workman
passes and repasses while going to and returning from the workplace. There may be reasonable
extension in both time and place and a workman may be regarded as in the course of
employment even though he had not reached or had left the employer's premises. The facts and
circumstances of the case will have to be carefully examined in order to determine whether the
accident arose out of and in the course of employment keeping in view at all times this theory of
notional extension" (Saurashtra SaUMfg. Co. Vs. B V Raja and others: AIR 1958 S.C.881).
Incidentally, the Supreme Court has subsequently observed, while examining the point under the
Employees' State Insurance Act, 1948, that in order to succeed in such cases, it has to be proved
by the employee that: (1) there was an accident, (2) the accident had a causal connection with
the employment and (3) the accident must have been suffered in course of employment
(Regional Director, E.S.I. Corporation and another Vs. Francis De Costa and another: 1996 (II)
CLR 812). In short, the accident should have causal coimection with the employment.
2. The Employees' Provident Fund and Miscellaneous Provisions Act, 1952
Objectives: The objective of the Act is to provide substantial security and monetary assistance to the
employees and their families and to protect them during old age, disablement, etc. The Act provides for
a scheme for institution of provident fund. Although it was found that the provident fund was quite
useful in the old age, in the event of early death of the employee, the accumulations were not adequate
to provide long-term financial support to the family. The Employees' Family Pension Scheme was
therefore, introduced from 1 st March 1971. This has since been replaced by the Employees' Pension
Scheme, 1995. The new scheme provides for a regular income after retirement/death in the form of
pension.
Features and main provisions
. h e ™ g e e „ . e . g e h Jheen •»
. ^e te™ wage, tae.ude. basic pay. de»,ess allowance and .«ining allowance if anv
' ^^ZT^Z"^: --
or ac. of Solent or an
employment. turpitude committed by him
in the course of
Pension
availabilify certificate.
We have seen the main provisions of certain important laboiir laws. We will study in detail the provisions of the
Trade Unions Act, 1926, the Industrial Disputes Act, 1947 and the Payment of Subsistence Allowance Act
(States) in Unit IV. Apart fi'om the labour Jaws, certain Articles of the Constitution of India, provisions of
Awards, Settlements, Contracts, Case Laws (important judgements of the Courts/ Tribunals) apply to the banks
and other establishments and these have a direct bearing on the personnel functions. One has to be mindful of
these provisions while discharging the personnel functions. The following two enactments need special mention
in this context:
(a) Banking Companies' (Acquisition & Transfer of Undertakings) Act, 1970: This is the Act under which
the 14 major banks were nationalised in July 1969 and subsequently in April 1980, 6 more banks were
nationalised. The Act provides for the Central Government to make regulations on service conditions for
the employees of these banks.
(b) Banking Regulation Act, 1949: This Act is applicable to all the scheduled banks including the
nationalised banks. Section 10( 1) prohibits employment of any person who has been adjudicated
insolvent or has been convicted by criminal court of an offence involving moral turpitude.
It may be restated that all labour legislations have one common objective which is to protect the employees from
the arbitrary actions of the employer. The courts have over the years been interpreting these laws and there has
been a number of amendments by the legislature both by Parliament as well as individual states, all of which
have led to make these laws dynamic and more relevant to the times. In spite of the strictures under these laws, if
the action of the employer is in good faith and does not adversely affect the employee, he may still find support
from the appropriate authorities vested with the power of implementing the provisions of these laws. However, a
blatant disregard to these laws may not be looked at kindly.
Let Us Sum Up
In this Unit you have been exposed to traditional personnel fimctions as well as the legal aspects of the fimction.
We have seen major labour laws affecting employees especially in the banking industry. Some insight into
specific labour laws and the features affecting employees have been described. We also saw the changing
scenario on the labour front which will have a direct impact on the union and their influence over the working
class.
Keywords
Employee Morale
Employee Welfare
Available Surplus and Allocable Surplus
Labour Legislation
Dispute
your progress
State whether the following statements are True or False.
1. Legislation on working conditions has helped in ensuring better working conditions for staff t
2. The Shops and Establishment Act is applicable to banks in all states. f
3. Legislation on wages is strictly adhered to by industry. f
4. The ID Act as well as the Trade Unions Act have lost their relevance for modem industry like BPO and
Retail. t
5. Recent amendments to labour laws are more frequent and more realistic. f
Reference
STRUCTURE
16.0 Objectives
16.1 Historical Background of Trade Union Movement
16.2 Trade Unions in Banks
16.3 Industrial Relations
16.4 Collective Bargaining
Let Us Sum Up
Keywords
Terminal Questions
References
16.0 OBJECTIVES
After studying this Unit, you should be in a position to:
. Narrate the Trade Union movement in India and in the banking industrv .
Appreciate the problems faced by trade unions and the p^em cen^ • ^ow
about collective bargaining and its process
vZZT'.T the negotiations take place in the banking industry
Understand the mechanism of Bi-partite settlements.
• BMS-BhartiyaMazdoorSabha
INDUSTRIAL RELATIONS (Part A) | 25
Besides these, there are any number of state level unions, again promoted by political parties, prominent among them
being the Bharatiya Kamgar Sena, ( BKS) promoted by the Shiv Sena in Maharashtra.
through means, both fair and unfair. It gives rise to un ' f ^o achieve goals
violence. It is surely not in the interest'oT^" w^r^ in
&1S precise purpose the trade unions have come "e victimised. It is an irony that for
heartedly involve themselves in the trade u^^a^ir
workersfiutherfromtheunionactivitiesCLXic^^i^^^^™^^
INDUSTRIAL RELATIONS (Part A) | 27
We also saw fta, fte employe.' aSl^^t S ' ' r ' " »"O
maker and inten=sied only in higher wages „rSstrZ? f""" ^ ° ' .'»"We-
aggressiveness of fc unions who teok'on ra^TnTpl; "" » «al
The present scenario is, however different- tu^ ■ ■
need of mechanisation and comp^ttS^n t Z^ZT^""' ^^^^ ^-P^ed the
reahsed that it is in the interest of the barring idu't^ anH^r ^^ have
service they attract more business. The e ^ ^ ^ Z " ^ ^hat with better customer
miions as an important partner in the procZ of mlf e ™ P«'"^ «nd consider the b^een the unions and
managemeLX:
banking and anywhere banking along with 100% Snl T introducing core
back office functions have beL estfbhIdll «P^^^ions. Centralised
though with some negative fall out for the ba^ks anLb^ ^ ^^^ -Produced
reward merit by way of fast track promo^nfandTatS^^^^^^ ' ^ P™«^ shift to
agam triumphantly for the unions, having conldldTi ST " ^^^ ^«^«-«r ended
wage increase across the board with other ^ene^^^^ fo l'! with a hefty 17.5%
challenging the established practice this year -'™ost
low and a number of benefits cut to conLrve thekbssL ' '"«^s were
16.3 INDUSTRIAL RELATIONS
some of the more aggressive pri4e banks too^fh '^^^^ out unscathed from the ordeal though ^afi
especially at the lower end but w^ «^hers did
retrench
would have made it impossible for the industry to^J^^ " ^PP^^^'^h which
scenario m the countiy where even though ZLsZe 'i^ T " ^^ '"^-^rial relations
have changed hands from individuals to co^me hZlT ^^^he industries
more m tune with their lifestyle changes tI lol^f' ^ "^P'^^^ions of workers have changed importance in
the changing scenario. ""^'^'P ^ ^at
achieved onty through satisfactoiy industn^l XZ r A ' ^^^ ^^^^ c» be
pursuit of the industrial objective Badly ^^^^^ions contribute greatty in the
problems leading to a tense atmosphere^oSntd^^S^S^^^^^ - industrial relation:
Industrial relations are an integral aspect of social relations arising out of employer-employee interaction in modem
industries, which are regulated by the State in conjimction with organised social forces.
The Encyclopedia Britannica (1961) states of industrial relations as "a concept extended to denote the relations of the
State with employers, workers and their organisations.... The subject includes individual relations and joint
consultations between employers and workers at their places of work; collective relations between employers and their
organisations and trade unions; and the part played by the State in regulating these relations".
It will be seen from the above definitions that industrial relations encompass a very vast area of relationship, starting
with individual relations of the employers and workers to the relations of the State with the employers, workers and
their organisations. Rightly so, that the State should and does intervene to ensure an atmosphere of industrial harmony
for ensuring industrial growth and the rate of growth of the economy. The State cannot remain a silent spectator in the
hope that the relations will on their own reach the state of harmony. That is why under the Industrial Disputes Act, the
appropriate Government, where it feels that there may be an industrial dispute, refers the matter to adjudication, suo
moto. Thus, 'industrial relations' is not merely a simple relationship; it is a fimctional, inter-related complexities and
requires inter-disciplinary approach.
.b
- - Of a Of
of -ployment. This decision makii"^^^^^^ ^ the tenns and coLitLs
their own resources to develop their own relations^rSl ^ ^^ P^'^« ^^ly^ng on
parties need to reach agreements though thJ^^^^ ««'"tions to their problems. THe
of negotiation between the employer an^wXeTZ- LT' ' " ^^^ "^«ans a s^
have common interest. TTie workers deriveTw^owefl^^!^^^^^ of objectives where both ôf them
pcMnt and demands which if not considered cliTZuinT"' forth their vilw
actions which will adversely affect the emSo"" ^heir service or adopting otheT
draws Its power from the strength of bei'fS T^ -"-tive LgLlg
as ^e concerted action by.the workers ca^ Z^t in Lw"IT T these action!
agrees to negotiate the matter and the bargaini^i^eers beï ^ «"^P'^y^r thus
have areas of common interest, the bargaiLg^fn^s^^ ^^^ and workei.
ft a^eement in a fair and equitable mannef ^it^ -
wage settlement. It may also begin with the mel^^ of tfe ' ^««lement such as
benefits being necessary for the worker, of t h T , ^ ^ t h e need of certain other
• typically, the process could include:
1. The union writing to the employer making new demand and arguing as to how it is necessary and relevant to
sanction the demand.
2. The employer may on his part try to convince the union as to how the demand is irrelevant, and
carmot be acceded to.
3. The process may continue for some time with each party issuing notices, letters, replies to each
other.
4. The union may thereafter decide to intensify its action and give notice of non-cooperation or
strike.
5. To avert the production coming to a stand-still, the employer may call the union leaders for
negotiations.
6. The negotiations or rounds of negotiations, may take place with parties trying to prove their
point of view.
7. Finally, an agreement may be reached by both the parties leaving their rigid stand and
compromising in the larger interest of the workers and the industrial unit.
How strong is the union, how serious and important is the issue raised by the union, will decide what
kind of negotiations will take place. It will also depend on the financial state of the unit and the burden
the demand puts on the unit. While different views may prevail in the beginning of the bargaining
process, differences get ironed out and the settlement is reached. The cardinal principle both for the
employer and the union is a display of fairness. It is necessary for the union to keep in mind that no
demand can be in real sense fiilfilled if it bleeds the unit. Similarly, it is for the employer to realise that
he should be paying willingly what is within his capacity to pay and is the practice in the industry. He,
on his part, may, however, try to see how strong is the union on its commitment and whether the
agreement once reached will settle the dispute in reality. This point carries fiirther weight when the unit
has more than one union operating. Of late, employers have started making demands on the unions as
quid pro quo by listing several factors like increase in productivity, reduction of wastage, zero error,
improvement in quality, lower wage scales for fiiture recruits. This only adds to the complicated process
of collective bargaining.
October, 1966
October, 1970
August, 1979
September, 1983
April, 1989
February, 1995
March, 2000
June, 2005
► First bi-partite settlement • Second bi-partite settlement ' Third bi-partite settlement ' Fourth bi-partite
settlement Fifth bi-partite settlement Sixth bi-partite settlement Seventh bi-partite settlement Eighth bi-
partite settlement Ninth bi-partite settlement
April, 2010
j^e bi-p^ite settlements in the banking industry have set a t^^^^^^
issues of salary and allowances, duty hours, medical aid and hospitaliLon scheme kafe
cornputensatton^^^^^^^
wortmerT° " ^^ '^^g^tiations between the banks Ld ftek
eT^" a^^^^ - — about the staff product^ ty
Ter; hrieei no m^^^^^^ ""j^'^tively impllented and
ofX 0^^ Even for deciding the salary
or me omcers of the banks, the same process is followed.
Banks Association to negotiate with the unions on behalf of all the banks. The point in favour of thk
^.mentis that salary relatedmattersbebettersettledatthebanklevel^^^^^
about Its capacity to pay mile the weaker banks may find the agreed incremental burdr^i^Zite strc^ager
banks may feel the need to decide their own salary levels so that they can attract a^rSiri L
?ec mtltt i T rr the Opacity to p" i^:^ tI
ZTLTill^T ^ candidateL a hfgher salJy
may act^Hy lead to a situation where even salary and allowances along with the working conditiZ
may be detennined at individual bank levels. A decade back, one of the nationaliseTiZ «d "
t ' ^^ of md"^
S nLd lo t H . f ri u °ther service conditions. Such
t Z ' i^^T ^^^ a- no longer on
current terms, but more on an mdividual basis, linked to a "Pay for Performance" approach
Let Us Sum Up
In this Unit we have discussed the nature of trade unions in general and specific unions in the banking
industry. We have also understood the manner in which the majority union is identified and given
recognition. Collective bargaining and its fimctioning in banks especially through the bi-partite
settlement has been studied in detail.
Keywords
Trade Union
Multiplicity of
Unions Check-off
Facility Collective
Bargaining Bi-
partite Settlement
Terminal Questions
1.The term 'industrial relations' needs to be changed to 'employee relations' for bringing about a
more positive work environment. Do you agree?
2.Describe the rise and influence of unions in banking industry.
3.Enumerate the stages involved in a typical collective bargaining.
4.Majority of the banks still choose to bargain under the umbrella of the Indian banks'
Association. Is this a retrograde step. Critically examine the concept of negotiations and its
impact on the Indian Banking Industry.
References
• Labour.nic.in www.laws4india.com/labourlaws.asp
indiabudget.nic.in/es2005-06/chapt2006/chapI05.pdf
www.helplinelaw.com/docs/bareact.shtml
• Sarma, A M; Industrial Jurisprudence and Labour Legislation; Himalaya Publishing House, 1991.
employee discipline
(Grievance Redressal and
Discipline)
STRUCTURE
17.0 Objectives
17.1 Introduction
17.2 What is a Grievance?
17.3 Grievance Redressal
17.4 Conflict Resolution
17.1 INTRODUCTION
The group of people who make up an organisation follow certain levels of hierarchy, with various
functions and responsibilities assigned to each. These managers work in teams where again there are
leaders and followers, all with common goals to be achieved. Management in a broad sense means
officers and supervisors who are responsible to manage the day-to-day affairs of the organisation, and
who direct the workforce to achieve the defined goals. In a situation where one group of persons is
directed by another group, it is quite common to have a difference of opinion on values, procedures,
systems, and methods, among these people. If the differences are strong, it takes the form of a
grievance. There cannot be an organisation where its members do not have any grievance at any point
in time. It is but human, where emotions come into play constantly, that disagreements,
disappointments would take place. When a person feels aggrieved on the behaviour of another person
in the same group, or due to certain procedures and systems, it is a grievance.
It is necessary that the grievance is redressed immediately. Not resolving a problem can become a
cause of worry later on. Allowing the grievances to remain unattended will create a situation of tension,
dissatisfaction and will result in lack of interest on the part of the affected party, leading to poor work
output and even major errors. In a worst situation it may lead to accidents, disharmony and strikes-a
situation every one would like to avoid. Thus, it is imperative to handle the grievances immediately
when they are noticed.
can be termed as conflict. Man is a social animal and the human tendency to be a part of one group or
the other results in the individual becoming part of an organised group. A conflict may arise within the
group members when a particular member or members hold a different view than the others about a
work situation, work procedure, systems etc. which can immediately be solved by referring to the
manual or to a senior officer. But if the difference is in approach or ideology relating to the working
conditions, it needs to be addressed, either at the individual level or when it affects more people by the
representative union. ^ "ic
Conflict arises basically from different perception of a situation and'the prestige and ego of the person percieving
the situation. The conflict resolution therefore would lie in the fact that the persons involved should endeavour to
view the problem from the other's point of view, analyse the problem from a detached attitude, devoid of
36 ! HUMAN ■
emotions and then attempt to solve the issue. It is likely that once an emotion-free approach is adopted, it may be
easy to resolve the conflict.
(a) Status incongruence: Differences in the status in an organisation involving a salary diff-erence
of employees with similar profile, or that one gets promoted and the other does not can lead to
a conflict situation as the one who got promoted finds it difficuh to interact with the other
person freely. An attempt at counseling and a realistic assessment of the situation could heb resolve the
conflict. ^
(b) Competitive work enviromnent: Goals set in a highly competitive enviromnent, and the lack of equal
opportunities for achieving the same can lead to major conflicts especially if career growth and monetary
rewards depend on the successful attaimnent of these goals. A judicial approach to such goal setting and a
fair opportunity for all to succeed may help save the situation.
(c) Differences in value systems: This is a common source of conflict. People come from different back
grounds, different up-bringing, different culture and religion at the work place They are of different age
groups. Their value systems as to interpersonal interaction, societal references etc. differ. This, some times,
causes a problem in the organisation.
(d) Inadequate communication: Many of the conflicting situations arise due to improper, incorrect inadequate
communication in the organisation. The communication at times get distorted-though umntentionally-
which creates confiision and problems. It will be observed that the sources of conflicts are manageable and
conflicts can be resolved. Let us see how this is achieved
17.4.2 Conflict IManagement/Resolution
As in any issue that needs to be solved, some basic steps if in place, can help solve a problem. Clear
communication, a perception of the goals and targets, adequate role clarification and a process that can identify
and resolve conflicts quickly, will help in the management of conflicts.
In a group situation, one needs to acknowledge the fact that each one depends on the other to accomplish team
goals. Once this inter dependence is realised, cooperation becomes easy. Emotional outbursts under control, the
problem should be identified and analysed realistically to know whether the problem is 'real' or 'perceived'.
Conflicts cannot be resolved unless there is a culture of openness and mutual trust. Seniors can set examples by
encouraging an open culture and practice at all the levels.
Many problems have their origin in defective commimication systems. It is therefore necessary to improve the
communication channels, and encourage upward communication so that the tensions are released. Ambiguity in
the role definition and lack of clarity as to what is to be achieved by the group, creates a conflicting situation.
Properly defined goals for the groups and the roles of the individuals to achieve, will minimise the problems.
Let Us Sum Up
In this Unit we have studied the nature of a dispute as well as grievance and understood the procedure for
grievance settlement. We have also seen how conflicts are identified negotiated and resolved.
Keywords
Grievance Dispute
Grievance Settlement Conflict
EMPLOYEE DISCIPLINE | 37
Terminal Questions
1. Describe a 'conflict'. Why is it necessary to resolve a conflict situation?
2. Differentiate between a dispute and a grievance. How do you resolve both?
play,
management? ------- a constructive role in conflict
References
• Labounnic.in www.laws4india.com/labourlaws.asp indiabudget.nic.in/es2005.06/chapt2006/chapl05.pdf
www.helplineIaw.com/docs^a^eactshtml
WORKER'S PARTICIPATION IN
MANAGEMENT
STRUCTURE
18.0 Objectives
18.1 Introduction
18.2 What is Participation
18.3 Methods of Participation
18.4 Indian Banking Experience
Let Us Sum Up
Keywords
Terminal Questions
References
296 i human resource management
......
18.0 OBJECTIVES
After studying this Unit, you should be in a position to:
• Understand what is workers' participation in management
• Know what are the methods of participation
• Evaluate the Indian banking industry's experience in this regard
• Appreciate the benefits of the workers' participation in the management process.
18.1 INTRODUCTION
through people and they play a very important and influential role in the management process An
the Z to" f «-- due to the perceived conflict of interest basically between
the two groups of management and workers. Lots of energy gets dissipated in resolving the grievances and
conflicts and to maintam hannony To a large extent, the conflict of interests can be minfmised iTa
iebfo^'drt^ ' " organisational goals are their goals which can bTtohe
reinforced by what is generally termed as workers' association or participation in management. In a hteral
sense, it means allowmg workers to take decisions in matter, affecting them and their organisation which is
primarily considered to be the prerogative of the management. gamsation,
Laboii ronT' f f riment in this direction started in the year 1957-58 when the Indian
rir . P recommendation of a working group to set up the Joint Management
Counals. Pnor to this, the Industrial Disputes Act, 1947 stipulated constitution of Works CommiTtee.e
consisting of representatives of employers and workmen in the industrial establishments in which ToO
under:
• Informative participation: refers basically to information sharing concerning the balance sheet, production
schedules etc.
• Consultative participation: in which a joint council is constituted which considers matters such as welfare
programmes, safety procedures etc. However, the decision making power rests with the management.
• Associative participation: Here the role of the joint council is not limited only as an advisory body. The
coimcil's recommendations in the defined areas are implemented by the management.
• Administrative participation: Where the decision comes to the council with alternatives to select from for
implementation. Still there is no participation in the decision-making process but there is a choice to be
made from a few alternatives and the alternative chosen jointly will be accepted for implementation.
• Decisive participation: Here the decisions are taken jointly on matters relating to production, welfare etc.
Having seen what is participation and different levels of participation, let us now consider the purpose and
advantages of workers' participation in management. Participation in important areas affecting workers, result in
a unique motivational power and a great psychological value. Peace and harmony between workers and
management lead to workers getting to see how their actions would contribute to the overall growth of the
company. They tend to view the decisions as 'their own' and are more enthusiastic in their implementation.
Participation makes them more responsible and they become more willing to take initiative and come out with
cost-saving suggestions and growth oriented ideas. It also ensures optimum utilisation of resources because of the
feeling of "ownership" of the decision made. Some of the more visible benefits are:
• The confrontation orihe level of resistance and resistance to change comes down. Change is the sign of
growth, and willingness to accept change helps the organisation adopt new methods easily.
• It ensures free communication and the channel for upward communication opens up. It helps in reducing
the distortion or failure of communication and consequently implemented decisions become more
effective.
• Joint decision-making reduces the conflicting situations and therefore the disputes. The productivity of the
unit increases.
18.3 METHODS OF PARTICIPATION
is achieved. ^ ^^^ ^«»"kers and the unit. Let us see how this
a»B j human RESOURCE MANAGEMENT
as well as private sector. Experts studied imem^o^rleS ^ fconsultation in public and recommended a non-
sLtory ai?roa7mre e^Z.^^
per the Industrial Disputes Act, LfMan«f c^^ - ^ -«nt as
participation in management. Joint Managernent ConnT ! I?P™'"®^« workers- workmen. There are equal
number
fUnctionsasaconsultativeforum w^tifiZt^! f" management. The Council
responsibilities are also giveZ'le^infMr^ ^^ Certain administrative
admitted that the Joint M^^Selnt ^ ^ "e
Normally, ^ representative of the majority miion gets this appointment. Due to multiplicity of unions
iLroTr^ nr " ^^ confrontation with the other union challenging
Ae appointment, challenging the membership nmnber of the selected union and even challenging the
membership venfication process. In a few cases, the matter is referred to the court for adjudiLion.
equal representation of employers and workers. IHe total representation is restricted to 12. t S sip cmmcil
works for increase in production, ovemll efficiency, elimination of wastage etc. It identifies
iioTh?rn J f foductivity norms for the unit as a whole, efficiency level etc. It looks
into the matters which remained unsolved at the shop councils. The joint comicil thus operates on broader
issues concerning the unit. The employers and the workers implemented the scLme, bu" Ziir of compulsion
from the govemment. In 1984 again this scheme was
SniZte^ T govemment. The objectives of the shop council and joint councils are very noble. In stlmT
noticed in the system of workers' participation in Board as that
I^ZZT" f ^ ^"PP^'^-g at the shop-level or
S n^X H f TT ° management attempted at the Board level does
not percolate down to the shop-floor where there still remains the "we" and "they" attitude In this respect
the two-tier model of joint consultative committees appears to be more pra^natic.
and „law problem, in fcir a,ea. Zt^l Iwer."!®"^ ' ? '«>'' quali^-
Advantages
Disadvantage
Let Us Sum Up
In this Unit we have studied the approach to the setting up of committees made up of staff members on a
voluntary basis. We have familiarised ourselves with works committee, joint management committee as well as
the manner in which the workers get represented on the board. We also have familiarised ourselves with the
concept of employee stock option and how some banks have tried to implement join committees for
negotiations.
■I
Keywords
Workers' Participation Works Committee Employee Stock Option Employee
representative on the board
4. EmployeerepresentationontheBoardofBankshasimpactedtheworkingconditionsofemployees
Terminal Questions
1. Describe the concept of workers' participation in management.
2. What are the typical joint committees and how are they constituted?
3. What is participation? What are the various levels of participation?
4. Describe the legality of various joint committees.
5. Enumerate SEBI guidelines on employees stock option.
the experience of the banks in respect of participation of workers on
References
• Labour.nic.in www.laws4india.com/labourlaws.asp indiabudget.nic.in/es2005-
06/chapt2006/chapl05.pdf www.helplinelaw.com/docs/bareact.shtml
STRUCTURE
19.0 Objectives
19.1 Discipline in Workplace
19.2 Discipline Management
19.3 Disciplinary Rules in Banks
19.4 Domestic Enquiry
19.5 Frauds in Banks
19.6 The Risk Attached to Delegation of Financial Powers
19.7 Need for Vigilance Department in Banks
19.8 Diversity and Gender Issues
19.9 Dealing with Cases of Sexual Harassment
Let Us Sum Up
EMPLOYEE DISCIPLINE
Keywords
Terminal (Discipline Managenfient)
Questions
References
19.0
304 i human
OBJECTIVES
After studying this Unit, you should be in a position to-
• Understand the concepts of discipline in workplace
• Know what is indiscipline and misconduct
• Appreciate the reformative theoiy
• State what are the principles of natural justice
The following are the assumptions in employee discipline- 3. ^^ issuing instruction of good behaviour on his
penalties. Discipline should instead involve creation of mindset and an attitude to follow the desired pattern of
behaviour. When more and more employees follow the rules, an ideal organisational climate is created where
employees willingly conform to the standards of behaviour. The seniors play an important role in creation and
maintenance of such a climate by setting an example by themselves. Positive discipline leads to team spirit, co-
operation, mutual respect, high employee morale and a positive environment.
On the other hand, negative discipline refers to people being forced to follow rules and regulations threatening
liiem with severe punishments if they fail to follow the standards. Such punitive discipline where adherence is
sought to be ensured through penal actions ensures only minimum adherence to the rules and regulations, that
too, out of fear of being punished. It is always advisable to strive for positive discipline as it results in many
other benefits and fosters an atmosphere of mutual trust and openness.
Handling employee misconduct is a very critical task to be performed by the senior managers. Misconduct
and other offensive behaviors often lead to decreased levels of productivity as they affect the individual
performance of the employees. To manage discipline among employees, every company opts for a discipline
policy which describes the approach it will follow to handle misconduct and which will act as a deterrent to
others.
H.R.M-21
cannot be enforced. ^pecitic Relief Act,a personal contract of service
^~ta, proceeding cI
Wngheldsintultaneousiy.Ho!,^ fcbita't
been stken to prosecute an enirr« ^ ; ™^^^
offence, the ™a„age„,e„t nray' then dtl s if hTi::;" ""
mtseonduet. Thus, it is necessary to wait for a peri^ of™ "«'/»"'"'"tel ™ act of gross
against the employee. " J - « " f" the authorities to proceed
i-h' './'.iA
• Witness: A witness is a person who appears in the enquiry either in support of the charges or in
support of the CSE. The statements made by the witness are considered as oral evidence. The
witness should be examined first by the party producing him; this is known as examination-in- chief
Thereafter, the opposite side can cross-examine the witness. The enquiry officer should carefiilly
observe the demeanour of the witness so as to arrive at the credibility of his statements.
• Persons who can be present at the enquiry: Departmental enquiry is a closed door proceedings and
not one where anyone can attend. Only those connected with the proceedings can attend the enquiry.
They are: (a) the enquiry officer, (b) the management representative (MR), (c) the CSE, (d) the
defence representative (DR), (e) the witness whose evidence is being recorded and a typist or a
stenographer who records the minutes of the proceedings. The witnesses are allowed to depose in the
enquiry one after the other and, therefore, no two witnesses should be present in the enquiry at a
time.
- The proceedings: At the first hearing the enquiry officer should enquire from the CSE whether he
has received the charge-sheet and has understood the contents thereof Then in the presence of his
representative he should put a question to him as to whether he pleads guilty to the charges. If he
pleads guilty he should be asked whether he has understood the consequences of his pleading guilty
and whether he is doing so at his volition. Answers to these questions should be recorded, preferably,
verbatim. If the CSE does not plead guilty to any or all the charges, the enquiry officer should ask
the management representative to lead the case in support of charges. The MR may lead his case
through witnesses who should be permitted to depose one after the other. After the examination-in-
chief of the witness, the CSE should be given a chance to cross- examine him. Only after the cross-
examination is over the next witness should be called. The documents taken on record should be
given to the defence for inspection and thereafter taken on record. When the MR closes his case the
defence should be asked to present its case repeating the same procedure. After both the sides have
led their evidences and have also summed up their respective arguments, the CSE should be asked
whether he has anything else to say or submit. Thereafter, the enquiry proceedings are closed.
5. If the CSE prefers an appeal against the decision of the disciplinary authority, the appellate
authority should dispose of the case, as per rules and the principles of natural justice.
6. In the case of officers, there is one more step involved, i.e. review. The reviewing authority
may call for the record of the case within six months of the date of the final order and pass
such orders as it may deem fit. If the reviewing authority proposes to enhance the penalty, a
show cause notice will have to be issued.
As mentioned earlier, domestic enquiry is a quasi-judicial proceeding. If the matter goes to the
labour court (in the case of award staff) or to the High Court, these courts may go through the
enquiry proceedings, findings and orders passed by various authorities. It is, therefore, imperative
that every concerned authority acts in good faith, and follows the principles of Natural Justice.
role of the Defence Representative is to disprove the charges leveled against the delinquent
employee in the charge sheet. To this end, he will also produce documents and witnesses well in
advance and cross-examine prosecution witnesses. He will also submit a brief to the Enquiry
Officer, after going through the prosecution brief
scope for manual handling thus leading to minimal chances of frauds except in collusion with two or more
officials.
The Central government has a Chief Vigilance Officer who is the moral guardian of major activities of the
Government and its servants and the authority that should work towards prevention of frauds in all
EMPLOYEE DISCIPLINE {Discipline Management) | 315
public institutions. Vigilance by itself means guarding against a possible occurrence of something bad or amoral.
This could relate to frauds and dishonest behaviour among public servants doing acts prejudicial to the country
as well as the organisation and also prevention of slow but steady acts of corruption which can result into major
scams involving hundreds of crores of rupees.
The Central Goverrmient has defined the role of Chief Vigilance Officer and all public sector imdertakings
including banks are required to have a Chief Vigilance Officer at a senior level who would be in a position to
influence decisions and developments that could prove detrimental to the financial stability of the Bank. The
Chief Vigilance Officer has a Department both at the Central Office as well as at major regional offices so that
preventive measures could be taken by these officers as soon as they come cross any signals that could lead to
frauds in banks.
• Physical contact
• A demand or request for sexual favours
• Sexually coloured remarks
• Showing pornography
• Any other physical, verbal or non-verbal conduct of a sexual nature.
Sexual Harassment takes place if a person:
• subjects another person to an unwelcome act of physical intimacy, like grabbing, brushing touching,
pinching etc.
• makes an unwelcome demand or request (whether directly or by implication) for sexual favours from
another person, and further makes it a condition for employment/payment of wages/
mcrement/promotion etc.
• makes an unwelcome remark with sexual connotations, like sexually explicit compliments/cracking
loud jokes with sexual connotations/ making sexist remarks etc.
• shows a person any sexually explicit visual material, in the form of pictures/cartoons/pin-ups/
calendars/screen savers on computers/any offensive written material/pornographic e-mails, etc.
• engages in any other unwelcome conduct of a sexual nature, which could be verbal, or even nonverbal,
like stanng to make the other person uncomfortable, making offensive gestures kissing sounds, etc. '
It is sexual harassment if a supervisor requests sexual favours from a junior in return for promotion or other
benefits or threatens to sack for non-cooperation. It is also sexual harassment for a boss to make intrusive
mqumes into the private lives of employees, or persistently ask them out. It is sexual harassment tor a group of
workers to joke and snigger amongst themselves about sexual conduct in an attempt to humiliate or embarrass
another person.
Let Us Sum Up
In this unit we have leamt the need for discipline in organisations, procedure for enforcing discipline and
also for dealing with indiscipline. We have gone through the domestic enquiry procedure, the guidelines
with regards to pnnciple of natural justice as also the need for corrective and quick action. We have also
understood how frauds occur in banks and the need for a vigilance department to arrest the incidents of frauds.
Keywords
Discipline Positive
Discipline Negative
Discipline Principles of
Natural Justice Prevention
of Frauds Vigilance
Department
EMPLOYEE.
317
Terminal Questions
1. Enumerate an ideal disciplinary procedure for workmen staff in banks.
2. Describe the duties and responsibility of the enquiry officer as well as the disciplinary authority.
3. Short notes on principles of natural justice and reformatory action.
4. Discuss precautions needed to reduce risk when delegating financial powers.
5. How does an organisation enforce a positive environment to reduce cases of sexual harassment.
References
• Labour.nic.in www.laws4india.com/labourlaws.asp indiabudget.nic.in/es2005-
06/chapt2006/chapI05.pdf www.helplinelaw.com/docs/bareact.shtml
• Datta, SK; Guide to Disciplinary Action, Tata McGraw-Hill, New Delhi, Third Edition, 1994.
• http://EzineArticles.com/?expert=Seema_Jhingan
• James G March; Herbert A Simon (1958). Organisations. New York: Wiley, pp. 9-11. ISBN 0471567930
9780471567936. OCLC 1329335.