PROJECT REPORT

ON

“COMPARATIVE ANALYSIS OF HR PRACTICES IN BFSI FIRMS”

Submitted to Dr. A.P.J. Abdul Kalam Technical University, Lucknow

for the partial fulfilment for the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted To:

Dr. Sadananda Prusty Dr. Sadananda Prusty

Project Supervisor Dean (Academics)

Submitted By: VANSHIKA ARORA

Roll No.:2001160700163

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 CERTIFICATE

I, Ms. Vanshika Arora, Roll no. 2001160700163 certify that the Project Report entitled

“Comparative Analysis of HR Practices In BFSI Firms” is completed by me and it is an

authentic work carried out by me at Jaipuria Institute of Management, Ghaziabad.

The matter embodied in this project work has not been submitted earlier for the ward of any

degree or diploma to the best of my knowledge and belief.

Signature of the student: Date: 31.12.2021

Certify that the project report entitled “Comparative Analysis of HR Practices in BFSI Firms”.

2
CERTIFICATE

3
 TABLE OF CONTENT

S.NO. CONTENTS Page

no.
1 2
Certificate
2 3
Certificate from Company
3 6
Acknowledgement
4 7
Declaration
5 8-9
Executive Summary
6 10-18
Introduction of the Company
7 19-20
Company Portfolio
8 21-23
Competitors of the Company’s products
9 24
Market Strategies
10 25-26
Porters Five Forces Model
11 27
SWOT Analysis of the Company
12 28-32
Introduction of the Topic
13 33-39
Literature Review
14 40
Objectives of the Project
15 41
Hyphothesis of the Project
16 42-43
Structure of the Indian Banking
17 44-45
Research Methology
18 46
Methods of Data Collection
19 47-54
Data Analysis and Interpretation
20 55-57
Findings of the Project
21 58-59
Conclusions and Suggestions
22 60-61
Limitations and Directions for Future
Research
4
23 62-65
References

5
 ACKNOWLEDGEMENT

It is not possible to prepare a project report without the assistance & encouragement of other

people. This one is certainly no exception. On the very outset of this report, I would like to

extend my sincere & heartfelt obligation towards all the personages who have helped me in

this endeavour. Without their active guidance, help, cooperation & encouragement, I would

not have made headway in the project. I am extremely thankful and pay my gratitude to my

faculty Dr. Sadananda Prusty for his valuable guidance and support on completion of this

project in its presently.

I extend my gratitude to Jaipuria Institute of Management Indirapuram, Ghaziabad for giving

me this opportunity. I also acknowledge with a deep sense of reverence, my gratitude towards

my parents and member of my family, who has always supported me morally as well as

economically.

At last, but not least gratitude goes to all of my friends who directly or indirectly helped me to

complete this project report.

Thanking You

VANSHIKA ARORA

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 DECLARATION

I, Vanshika Arora, hereby declare that the report titled, “Comparative Analysis of HR

Practices In BFSI Firms” submitted in fulfilment for the award of Degree of Master of

Business Administration of A. P. J Abdul Kalam Technological University is a bonafide record

of work done by me under the guidance of Dr. Sadananda Prusty, Dean Academics of Jaipuria

Institute of Management Indirapuram, Ghaziabad.

This report has not previously formed on the basis for the award of any degree, diploma, or

similar title of any University.

Date- 24.12.2021 Signature of the student

This is to certify that the statement made by the candidate is true to the best of my knowledge

and belief.

Signature of guide

Dr. Sadananda Prusty

(Dean Academics)

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 EXECUTIVE SUMMARY

AIM India has three ventures and is basically a wealth management and

consultancy firm which delivers a one stop solution/ service to achieve financial

independence. Our principle is to deliver high returns to our clients through our

network of government sector banks in India. Talking about its other ventures

Insplore and Finamigo is dedicated to empower people with 7 relevant jobs and

development opportunities.

We serve small, medium & large organizations across all industry sectors. We

have a Team of Professionals working every day to provide HR Solutions to the

companies. Our Sole objective is to bridge the gap between the Talented

Candidate and the Talent Seeker.

The objective of my internship was to explore the field of marketing, learning

the work in different sectors, choose my field wisely as well as to undergo a

project work in the field of human resource.

The background of my internship is market research which included data

mining of different companies of different sectors as well as sales in insurance

sector which included a life cover security scheme, a medical insurance policy

as well as term loans.

The Methodology used is both secondary, that is, the backend work which

included the data mining of the information of different companies in different

sectors as well as contacting the HR of the respective companies and taking a

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regular follow up i.e. B2B as well as primary which included the sales of the

insurance policy in which we were supposed to perform a direct sale, i.e. B2C.

The learning experience I gain from the internship is immense. Till now, I am

able to understand the importance of customer relationship for any company. I

have completed the project satisfactorily to my belief as well as collected a

survey on the same. The Limitations of the project was firstly the field work

as it was tedious task to deal with different types of customers as well as to

understand their mentality towards insurance policy.

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 INTRODUCTION OF THE COMPANY

My experience with AIM India Pvt Ltd has been an eye opening one in terms of

teaching me the various complexities the insurance company undergoes in

creating a perfect financial product, pitching it to potential consumer and yet

unable to match the consumers’ abstract needs.

AIM India Pvt Ltd is a third-party agent company which provides the insurance

plan of “INDIAFIRST LIFE CO.” to the potential consumers. The whole work

methodology of the organization rotates on the shifts and all year hiring of the

interns. The main work of the firm is “Wealth Management” i.e., “Helping the

individual reach the state of financial independence”. To do this they provide the

assistance of insurances to the clients.

In brief, AIM India Pvt Ltd provides exemplary insurance service extension to

the consumers. Aim India deals in life insurance.

At initial period of our internship, we were taught various aspects to be aware of

while a consumer invests, these are:

• Lock in Period

• Value for money

• Goodwill

• Protection of Loved one

• Privacy statement

• USPs

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 • Market Stability

• Rights of Policy Holder

• Types of Death covered

• NRI Applicability

AIM INDIA Pvt Ltd deals with consumer on the sale of India first Life Insurance

company’s products. The various financial products that company sells are

1. “India First Life Company” Mahajeevan Plan

2. “Term life insurance”

3. “Mediclaim product of Star Health company”

We were briefed with the history of India First Life Company which is actually

JOINT VENTURE between “Bank of Baroda” & “Andhra Bank” & “Dena Bank”

& “Vijaya Bank” & “Union Bank”. India First life co. on its independent

performance offers Group insurance product, Individual insurances which are

spanned over by 2.4 lakh service distributors due to the presence of the bank

branches of its ventured banks. Hence, it actually works on the principle of “Bank

assurance.”

The major competitors for our company are LIC, HDFC Life Insurance, Aviva

Life Insurance, Bajaj Life Insurance, LIC etc.

1. Mahajeevan PLAN:
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This is actually a traditional plan i.e., non-linked insurance plan which offers both

deaths as well as maturity benefits to the insurer. It offers life protection plus

saving and equally provides revisionary bonuses to enhance the policy holder’s

wealth. In an occurrence of untimely demise of life insured, death benefits are

offered. In case the time period is over, the maturity benefits are offered. The

policy holders receive “Terminal bonuses” as well as “Revisionary bonuses”.

Various key points of this policy are as follow: -

I. Rider benefit: A rider option is also provided to insured life.

II. The maturity benefit is equal to the guaranteed sum assured plus the

bonuses.

III. The death benefit is the assured sum i.e., equal to sixteen times the first

premium paid plus accrued revisionary bonus and terminal bonus. But

usually this “sixteen time” index is also dependent on age. The younger the

life insured is higher is the probability to receive the sum closer to sixteen

times.

IV. Under the sections of Income Tax of Indian Constitution, the specific tax

benefits are offered via Income Tax Act 80C and full tax saving on the

maturity amount on 10(10(D)).

V. The Entry age is 5 years of life assured and policy term is 15 years.

VI. The lock in period of the plan is 3year. However; the co has provided a

loan feature for utilization of cash invested in case of any work. Post two

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 year, the proposer can take 90% of the sum money as loan, which would

be free of interest and next year it has to be paid via renewal.

VII. EMI feature is available to proposer to put in the premium from second

year without any hassle of interest payments.

VIII. Any person with Indian passport can buy this product.

IX. This is a traditional plan fee of market risks.

X. Types of death covered include suicide as well but only after lock in period

is completed and scrutiny report is submitted over by concerned officials.

XI. The market return is 8% (4% + 2% + 2%).

XII. There is provision to expand it to 25 years.

XIII. There is ownership transfer scheme provided.

XIV. Flexibility is provided pan India for nominee change.

The pitching of the product was taught on the categorization of :-

• Child Category

• Youngster Plan

• Retirement Plan

The child pitching actually consists of the age benefit whereby the proposer can

continuously keep investing even after the maturity occurs via taking out some

fund and reinvestment.

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For the youngsters, the pitching could involve “Good return”, “Tax benefit”, “and

Life Security”, “Ownership transfer”, “Loan feature”.

For the elderly, the plan could be rolled out to someone around 40-45 year. There

is provision of investment for 15 years and at the end the maturity amount could

be either blocked for 8 years which would give double money at end or the

interest on whole amount if kept with company can be provided as monthly

premiums.

2. Term PLAN:

This is the second plan we have been introduced to. Just like any motor insurance,

it only comes into existence if any accident occurs else it expires. It covers the

clause that if the person smokes, the premium is slightly higher than non-smoker.

So, for the elderly people and one with medical histories and serious backgrounds

such as diabetes, genetic problems etc. There is no maturity benefit, it only has

death benefit. The term plan can’t be extended. The benefit is really less as

compared to Traditional plan of Mahajeevan.

3. Medi Claim PLAN:

This is the third plan, which is actually of “Star Health” Company. The plan

covers the disease and medical emergencies, surgeries cover up for the person

and family insured under certain acceptable terms and conditions. This is a
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comprehensive plan. There is no capping. There is provision of Floater system,

and one can effectively change premium each year leading to change in the

coverage span.

The main aim of the undergone Summer Internship Program is to make the

students experience the work culture and the procedures of the Corporate World.

This Summer Internship Program consists of the involvement of the students in

company as intern and understands the facts of the company as well as to make

the project on the work done by the students in the Company allotted to them for

the Internship in various domains like Marketing, Marketing research, HR,

Finance, Operations etc.

In this report I will share my experience of 60 days in the company. My role as

an intern in the company is to study and understand the company’s product and

sell it. I need to have an in-depth knowledge of entire financial sector and know

our product’s special feature which may differentiate it from others. I also have

to lure and convince the customers for our investment plan (Mahajeevan). And

also I have worked for other two verticals of the company that is a consultancy

firm and a coaching institute which were at the initial stage of the business.

In the HR sector, my mentor taught me about various features:

➢ HR Training

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➢ Roles of HR

➢ Recruitment Process

➢ Various types of letters

➢ Pay slips

➢ Role plays

In the finance sector, my mentor taught me about:

➢ Taxation module

➢ various types of taxes and their relevance

➢ Tax slabs

➢ Tax calculations’

➢ Various deductions (80(C), 80(D), 10(10) D.

➢ Various financial sectors

➢ Portfolio management

The reporting time for the interns was 10:00 AM in the morning till 5:30 PM

which includes a break of 30 minutes for the lunch. During my internship I was

given training of Fifteen days by my mentor Mr. Chinmay Dev Tiwari in which

he taught me about all the market sectors as well as the various financial sectors

and made me do the role plays to face the market.

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After this training I was on 30 days field work in which I need to perform sales

of the new products launched by the company dealing with insurance plans and

medical claims. It was a great experience as well as a good exposure given by the

company as in that field work.

PRODUCTS:

MAHAJEEVAN:

India First MahaJeevan Plan is a with profit, non-linked, endowment insurance

plan. Under this plan, you can choose how much you would like to insure yourself

based on your requirements. We suggest you make sure this amount is what your

family needs to avoid cash flow problems in case of the untimely demise of the

Life Assured. This is a regular premium plan with the option of choosing from

15 to 25-year plan term. This plan may include the ‘Life Assured’, the

‘Policyholder’, the ‘Nominee’ and the ‘Appointee’.

KEY FEATURES:

• Plan your future needs by deciding exactly when you need the assured

amount - anytime between 15 – 25 years

• Ensure your prosperity with the assurance of a guaranteed maturity amount

(sum assured) along with the bonus, if any

• We prosper only if you prosper. We will share terminal bonus, if any, at

the end of the plan term

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• Accumulate your savings systematically, through regular premium

contributions based on your income and needs 17

• The plan offers a death benefit equal to the sum assured in case of the life

assured’s untimely demise. Enhance your life cover through India First

Term Rider offered under the plan

• Under Section 80C you can enjoy tax benefits on the premium you invest.

You can also get tax benefits on the benefits you receive at maturity of your

plan, under Section 10(10D) of the Income Tax Act, 1961

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 COMPANY PORTFOLIO

• Company identity is as the leading provider of professional wealth

advisory in India and Abroad, AIM India delivers a one stop solution/

service to achieve financial independence. Our principle is to deliver high

returns to our clients through our network of government sector banks in

India. Our comprehensive wealth management is a high-level professional

service that combines financial and investment advice in accounting,

taxation services and retirement planning. Our wealth management is much

more than just investment advice as we encompass all parts of an

individual's financial life. We coordinate all the services needed to manage

client's money and plan for their own and family's current and future needs.

We maintain and increase their wealth based on individual's financial

situation goals and comfort level with risk.

• Vision is to deliver high rate of returns to our clients and to move towards

financial independence.

• Mission is to become an organization that is knowledge centric and offers

expert advice to our clients.

Company also deals in various financial sectors: -

• Compliance services

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• Accounting services

• Taxation services

• Training & development services

• Recruitment services

• Consulting services

• Insurance services

• Mutual funds

• Retirement planning

• International expansion

• Wealth advisory services

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 COMPETITORS OF INDIA FIRST LIFE INSURANCE

COMPANY

• LIC India Life Insurance

• New India Assurance

• National Insurance

• Bajaj Allianz Life Insurance

• United India Insurance

• Oriental Insurance

• ICICI Prudential Life Insurance

• Max life insurance

• SBI Life Insurance

• Birla Sun Life Insurance

• Apollo Munich Insurance

• IFFCO Tokyo Insurance

• Bharti AXA Life Insurance

• HDFC Ergo Insurance

• Tata AIA Life Insurance

• Max Bupa Insurance

• PNB MetLife Insurance

• Kotak Mahindra Insurance

• Future Generali Insurance

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 • Reliance Life Insurance

• United India Insurance

• Star Health Insurance

• Cigna TTK Insurance

• Aviva India Insurance

• India first Insurance

• Exide life Insurance

• HDFC Life Insurance

An Example of various financial product comparison.

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The objectives of our profile were as under:

• Distribution of the insurance policies.

• Understanding the various uses of Insurance as a Product.

• Proper understanding and analysis of insurance industry.

• Knowledge about the financial Industry.

• Generating and analysing leads for the sales.

• Doing the basic market analysis for all the three verticals.

• To understand the consumers perception in all the verticals.

• To bring about changes in the product as per the current market situation

for effective and efficient stabilization of the company in order to achieve

the above objectives.

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MARKETING STRATEGY FOLLOWED BY THE COMPANY

Stage one: Defining strategic marketing objectives

Stage two: Determining strategic focus

Stage three: Defining customer targets

Stage four: Competitor analysis

Stage five: Differential advantage

Stage six: Marketing mix

Stage seven: Implementation

Stage eight: Monitoring market performance

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PORTER’S FIVE FORCES MODEL

Porter's five forces analysis is a framework for analysing the level of competition

within an industry and business strategy development. It draws upon industrial

organization economics to derive five forces that determine the competitive

intensity and therefore the attractiveness of an industry. Porter's five forces

include three forces from 'horizontal' competition: the threat of substitute

products or services, the threat of established rivals, and the threat of new

entrants; and two forces from 'vertical' competition: the bargaining power of

suppliers and the bargaining power of customers.

Threat of new entrants:

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Since it is an insurance company, which holds only 3% of coverage in India, so

there are great chances of new competitors to enter the market, though it has no

such risk because our company has tie up with the government banks that makes

its existence secure and reputed brand name as well.

Threat of substitutes:

Insurance nowadays is more than a cover but an investment as well, the other

substitutes that are available are fixed deposits, share market, gold etc. which are

not bearing those good returns as insurance so there is no such threat.

Degree of Rivalry:

The rivals mainly are the other insurance companies and the major one is LIC,

talking about the private players, till date Indian customers prefers govt. over

private for security of funds, and now talking about LIC it has schemes that are

outdated and no assured, though it takes a little more effort and research but it is

a better option.

Bargaining power:

Insurance is a sector that requires lots of convincing and patients because people

have to invest their money for a quite long duration, in most of the cases it is little

difficult as the customers bargain a lot. Thus, customers have a great say in this

field.
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SWOT ANALYSIS OF THE COMPANY

Strength:

• Corporate collaboration

• Global presence

• Business growth

• Emerging middle-income group

Weakness:

• Dominance of public sector

• Less promotion

Opportunity:

• Creation of strong future growth

• Rise in income

• Creation of Stronger demand

• Spread awareness

Threat:

• Economic crisis

• Entry of new NBFC’s in the sector

• Varying government policies

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 INTRODUCTION OF THE TOPIC

Organization is a place where the entire employees work together. Commonly in

any organization perception towards the culture and organizational Human

recourse practices play the very important role. Human Resource practices in

organization describe about the perception of the employee towards the job,

culture and organization. In my internship study I focused on the Human

Resources practices and culture of the Aim India Pvt Ltd.

Human resource management practices include many familiar functions of

personnel managers, such as man-power planning, selection, performance

appraisal, salary administration, training and management development and to

improve communication systems, involvement, commitment and productivity.

Human Resource Management HRM practices are the methods by which a

company's leadership is established. This occurs as a result of implementing a

wide range of motivation-related training courses and services, such as

developing systems to assist and guide management in conducting ongoing

performance appraisals.

Employee perception is the process of system of procedures, training, and

methods to monitor an organization’s impact on the environment and evaluate

28
ways to minimize negative impacts on the environment. Perception is not

necessarily based on reality, but is merely a perspective from a particular

individual’s view of a situation. In dealing with the concept of organizational

behaviour, perception becomes important because people’s behaviour is based on

their perception of what reality is, not on reality itself; the world as it is perceived

is the world that is behaviourally important. Human nature can be very simple,

yet very complex too.

An understanding and appreciation of this is no pre-requisite to effective

employee perception in the workplace and therefore effective management and

leadership. there is a known fact that without perception, nothing can be done in

an organization and for doing any task we need a perception which is accepted

by all the employees in an organization. It is the key for the manager to make her

team work and get the better output for the organization. The perception helps

each and every individual in the organization to carry the things in different ways

as the organization needs different perceptions to make successful results.

This study will be helpful to know the perception and satisfaction level of

employees about HR practices and policies in the organization and also this

would be a chance for them to give suggestions for the improvement in them.

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This study exhibits on the methodologies adopted by the organization to different

HR practices based on the requirements and also certainly includes the procedures

by which the employees are being assessed for various HR practices.

It is to be noted that all the existing HR practices of the organization are not

studied and are being assessed for various HR practices analysed wherein special

preference is given to Recruitment & Selection, Induction, Training &

Development and Performance appraisal.

The HRM practices in banks are steadily forging ahead. Majority of the banks

have set up separate HRD Departments (HRDDs) within a decade of their coming

into operations; HRDDS in some banks have gained certain valuable

achievements. Certain people have extended blanket criticism of the existing

HRM functions as “Ornamental Appendages” cannot be justified. However, it is

a fact that functioning in a majority of the banks is far from satisfactory. Instances

have been reported from within banks where HRDD discharged personnel

administrative functions of recruitment, placement, transfer, promotion and

training.

The functioning of the HRDD in many banks shows a transition towards HRD

functions. In these banks, in addition to training, certain other activities like

manpower planning and performance appraisal have been introduced. Yet, a few

other banks have made rapid strides as far as the introduction of new HRM
30
activities and sub-systems are concerned, e.g. quality circles, staff meetings &

systematic induction are concerned besides introducing these systems, some

banks have also taken appreciable efforts in perfecting functions like training and

performance appraisal.

Nevertheless, there is a widespread feeling in the banking sector that there are no

sufficient pay offs from the HRM functions and the system at the operational

level are relegated to mere rituals. The linkages between HRD systems and other

related such systems in HRM are also not very obvious. There is a need to make

Indian Banking System stronger, efficient & low-cost. This can be achieved by

creation of fundamentals that must be included in the banks strategies, operations

& processes; strengthening the prudential norms & market discipline; adoption

of international/global benchmarks to optimize operations; change management

& consolidation within existing financial system; upgrading technological

infrastructure of the financial system; & development of human resources as a

catalyst for transformation.

Human Resource Management within the Banking sector is considered as one of

the “pillars” of process of discovery & transformation. The field of Human

Resource Management can be described as vibrant, dynamic and emergent within

the cultural aspect in the Banking sector. The success of today's banking business

31
will depend on how effectively and efficiently the human resources of the

organization are utilized.

The evolution of the whole banking system in India has affected the human

resource practices, recruitment and selection conventions & practices, and

training system. It is important that the details of human resource philosophy

within a bank are discussed along with the employees, to build & plan their own

career-path, planning, perceptions and development. It goes without saying that

the primary strength of the industry is the human capital that is why the efforts to

develop the skills is important.

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 LITERATURE REVIEW

INTRODUCTION

Review of related literature serves as the base for any researcher to understand

his or her research problem clearly and to design the methodology by which the

study is to be conducted. Various studies conducted earlier on the topics related

to the current research problem are included in the literature. It gives an idea for

the researcher to determine the research problem and to frame the objectives. It

also enables the researcher for the smooth conduct of the present study. The

literature includes books, journals, magazines, reports, etc. These studies have

been reviewed carefully and summarized in this chapter.

REVIEW OF LITERATURE

Banking is delivering variety of services to its ultimate customer right across the

counter in the service sector. The activities of banking industry are all about

“relationship”. Hence, banking industry has to provide better services to their

customers with a smile to built and sustain long term bank-customer relationship.

Even with highland of technology banking sector is primitive and is dependent

on human face of human resource management.

The technology is merely an aid to the human face but cannot be substituted by

any machine. Recognition to HR as an important component in the development

and learning processes in banking sector is the key to success and reward as
33
human resource is supreme than all other resource in any organization. According

to Vandana and punia (2004), "the managerial functions can be performed by

human beings only and not by machines".

Human resource has substantially enhanced its value as the "Core Resource"

especially when there is cut throat competition between organizations in a

competitive market. According to Rao (1992), human resource is a crucial to the

organizational as a heart is to the body‟. Human resource is probably the only

resource which is capable of providing sustained competitive advantage to

organization in globalized world. In the content of this significance human

resource as the core resource has earned a position of dignity.

According to Schuler (1994), in a worldwide IBM study, 67% of the CEOs and

72% of the executives believed that the HR is critical to the success of business

today. Similar concern regarding the HR role and effectiveness in the new

business context has been articulated across the world (Shandur & Teo, 1999;

Schular, Dowling and Decieri, 1993; Scarpello, 1994; Ulrich, 1998; Wright and

McMahan, 2001; Bowen, Galang & Pillai, 2002; Mitsuhashi, Park, Wright &

Chua, 2000; Tung-Chun Huang, 2002; and Agarwala, 2002. Empirical studies

have also found that efficient use of HR has been instrumental in forging larger

gains.

A study by Singh (2000) of 84 Indian organizations found significant relationship

between investment in the HR and the firm performance. It was in line with the

past research findings. Some of the studies conducted in the recent past have
34
shown encouraging results. (Kleiner, 1990; Boudreau, 1991; Johnes and Wright,

1992; Dyer and Reeves, 1995; Becker and. Gerhart, 1996; Guest, 1997; Delery

and Doty, 1996. In their study of the HR practices, Huselid and Becker (1997)

and Bilmes et al. (1997), found that differences in HR practices are associated

with large differences in financial performance. Beckar and Gerhart (1996)

resolved that reasonable changes in an HR system can affect a firm's market value

by $ 15000-45000 per employee and can affect the probability of survival in

respect of a new firm by as much as 22%. Similar findings were observed by

Welbourne and Andrews (1996). Sharif, Dowling and Liesch (1998), found that

the HR management plays a significant role in international joint venture success.

Similar results were found by Huselid, 1995; MacDuffie, 1995 and Huselid and

Becker, 1995. According to Bandarker (2003), "some of the global giants (ABB,

GE, IBM and Motorola) who underwent transformation, made specific efforts at

people mobilization, especially through effective human resource management".

Human resources in terms of reported research findings yield substantial results

even in complex situations achieving organizational productivity and excellence.

According to Miejia, Balkin, & Cardy (2003), HR mean the "people who work in

an organization". However, Megginson (1972) defines the term human resources

as "the total knowledge, skills, creative abilities, talents and aptitudes of an

organization's workforce as well as the value, attitudes and beliefs of the

individuals involved."

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According to Pal (1997) ,"it includes the various facets of human energy and

Capability such as - knowledge, skills, attitude, behavior, experience, motivation,

physical and mental strength, capacity for growth, etc. The people working in an

organization at all levels are owners and users of these resources".

Keeping in view the paramount significance of HRD and its contribution on

overall performance of an organization, an effort has been made to have an

overview of research studies in the area of HRM mechanisms in the banking

industry. It may be mentioned here that very limited research has been conducted

on HRM practices in banking sector.

The following review of literature will unfold a broader canvas of empirical and

conceptual studies that would determine the paramount importance of HRM

practices in the banks and its positive impact on individual behavior, performance

and organizational effectiveness. A brief schematic view of definitions of

variables used from literature perspective

36
Schematic view of definitions of variables used from literature perspective

37
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39
 OBJECTIVES OF THE PROJECT

Objectives: -

• To study the HR practices in the selected BFSI companies.

• To analyse the impact of HR policies on employee’s retention.

• To study the satisfaction of employees towards HR policies.

• To study and compare the Recruitment policy, the Appraisal system,

Employee retention & Training practices in public sector and private sector

banks in India.

40
 HYPOTHESIS OF THE PROJECT

H1: There is close relationship between HRM practices and organizational

performance.

H2: HRM practices has positive impact on organizational performance in

banking sector.

41
 STRUCTURE OF THE INDIAN BANKING

Banks in India can be classified into two categories, commercial banks and

cooperative credit institutions. Within the category of commercial banks, there

are two types of Banks, namely scheduled commercial banks and non-scheduled

commercial banks. Depending upon the pattern of ownership, commercial banks

can be classified into two groups. These are

1. Public sector banks which includes SBI (State Bank of India) & its associates,

regional rural banks & nationalized banks.

2. Private sector banks, consisting of Indian private sector banks (which can be

sub divided into two i.e. banks existing prior to 1991 and banks established after

1991) and foreign banks operating in India.

3. Others comprising of Regional rural banks and local are banks.

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43
 RESEARCH METHODOLOGY

The research design is the arrangement of conditions for collection and analysis

of data. The research design is undertaken for the study in descriptive. In which

collected data from the employee in the company by asking the open-ended

questions.

Sources of Data: -

1. Primary Data

Primary data is collected for the first time by the employees of the company

by questionnaire method. It’s a first-hand data and fresh, in which for

collecting the data 50 employees are chosen as a sample. Survey is conducted

while working hour of the employee and collect a primary data from them.

2. Secondary Data

In which data is collected from the followings

• Journals

• Research Papers

• Company Websites

• Brochures

44
Secondary data is based on information gleaned from studies previously

performed by government agencies, chambers of commerce, trade

associations and other organizations.

45
 METHODOLOGY OF DATA COLLECTION

Methods of data collection: -

The data were collected on the basis of secondary research.

Research Techniques: -

Some of the common research techniques used in nowadays are

1) Interviews

2) Tests

3) Surveys

4) Observation

In this project the research technique which is used to gather data is published

research papers and journals.

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 DATA ANALYSIS AND INTERPRETATIONS

Since each of the organization does possess certain unique characteristics, the

results are bound to differ from each other. Table 1.1 and 1.2 depicts the overall

perception of managers and subordinates towards the Human resource

management practices in sample study organization. The public sector bank

includes PNB and SBI. The results of public sector and private sector differ, but

also the results of the organization within the same sector differs. It is clear from

the table 5., that the highest percentage of 32.5% of managers from PNB strongly

agree that general climate of an organization is good that plays important role to

improve the performance of an organization while SBI with 34.9% of agree and

is statistically significant (p-value ≤0.0001). PNB with a score of 51.9% of agree

leads all the organizations with the perception the OCTAPACE culture has direct

impact on the organizational performance SBI with 35.7% and is statistically

significant with p-value ≤0.0001.

The result from the table shows that 62.1% of managers of PNB perceives that

bank has good selection process and techniques that leads to effective

performance of an organization and SBI with 24.1% and is statistically significant

(p- value ≤0.0001). The table shows that 63.6% of PNB managers agree with the

statements of Job definitions followed by SBI with 37.0% . It is clear from the

result that if job description and job specifications will be clear to the employees

47
that will directly improve performance of an employees and leads to the increase

in the performance of an organization.

The majority of the managers from all the sample study organizations either agree

or strongly agree that career planning is clear to all the employees and is

statistically significant. The table also depicts that the employee's participation is

very important to improve organizational performance. Both managers of PNB

and SBI agree with the performance appraisal variable of HRM practice with the

highest percentage of 50.6% in PNB and SBI (40.5%) which implies performance

appraisal and organizational performance are closely linked with each other.

Training plays an important role in enhancing the skills of an employees and

57.6% of PNB managers agree with the training variable of HRM practice

followed by the managers of SBI with 50.9% .The results shows that 29.1% of

PNB managers strongly agree that company takes care of employees while setting

the compensation followed by SBI(16.7%) with p-value ≤0.0001 and is

statistically significant.

After analyzing the above table 1.1, we can accept all alternate hypotheses that

HRM practices are closely related with organizational performance and HRM has

positive impact on organizational performance and reject null hypothesis. It is

also clear from table 1.2 that overall perception of subordinates varies from PNB

and SBI. For general climate, OCTAPACE culture and selection the highest

percentage of strongly agree is shown by the subordinates of PNB (15.6%, 22.1%

and 26.8%) and are statistically significant with p-value ≤0.0001. In job definition
48
the highest percentage of strongly agree is shown by the subordinates of PNB

(20.2%), and SBI (12.3%) .

The respondents from both the banks agree in the following order PNB (38.1%),

and SBI (33.3%) towards the career planning of HRM variable .It was observed

that 34.6% of subordinates of SBI strongly disagree with the statement of

employees participation while 30.3% of PNB agree that employees participation

plays major role in enhancement of organizational performance. The table reveals

that 54.5% of PNB subordinates agree with the statement of performance

appraisal and SBI (25.7%) and is statistically significant with p-value ≤0.0001.

The highest percentage of agree for training variable is shown by the subordinates

by PNB (41.4%) and SBI (35.8%).

The table depicts that 34.5% of PNB subordinates agree with compensation

variable of HRM practices followed by 32.5% of HDFC subordinates and 21.4%

of JKB subordinates while 31.9%of SBI subordinates strongly disagree and is

statistically significant with p-value ≤0.0001. From the table 1.2 it is clear that

perception of employees towards HRM practices is positive . This indicates that

HRM practices are positively related with organizational performance and HRM

practices has direct impact on organizational performance.

Table 1.1. Index of overall perception of managers towards Human resource

management practices – organization-wise.

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Table 1.2. Index of overall perception of subordinates towards Human resource

management practices – organization-wise

50
Comparing the organizations within the public sector, it is amply clear from the

results presented in the table no. 1.3 that mean values of all HRM practice

variables among managers in case of PNB are higher than the mean values of

HRM practice variables of the SBI.

The table under reference depicts that the overall satisfaction/ perception of

managerial staff fall in the satisfactory range of scale. The overall mean values,

of managerial group are > 70% except for employee participation and

compensation. The table also depicts that the overall mean values of

subordinates fall in satisfactory range of scale and recorded overall percentage

of mean score >60 in PNB except for the employees participation and

compensation.

The overall mean score of managers against General climate is 3.96(74.00)

which are marginally higher than subordinates which is recorded at 3.36(59.00).

The table also shows that managerial staff recorded highest mean and scored

>85 % against selection with the mean score 4.44. On the other hand

subordinates of PNB shows the highest mean score of 3.92(73.00) against

career planning.

The table also reflects the lowest mean score 3.05(51.25) of managerial staff

recorded against the compensation variable. The rest of the variables scored by

manager's shows reasonably good response. When we look at the table 5.30, the

interesting observation comes into light that subordinates express positive view

against selection and career planning which scored >70 % .

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However the rest of HRM variables scored by subordinates show good

response. But overall satisfaction of managers is higher than the subordinates

Which is indication of the fact that there is a tremendous scope of improvement

of various HRM practices in case of subordinates is concerned. The perception

of managerial group of SBI also falls in satisfactory range of scale as compared

to subordinates. The table amply that the overall mean values of managers

Recorded >60 % for HRM variables except for employees participation and

compensation.

The table also shows that managerial staff recorded highest mean and scored

>70 % against job definition with the mean score 4.07. On the other hand

subordinates of SBI shows the highest mean score of 3.44(61.00) against job

definition . The table also reflects the lowest mean score 2.54(38.50) of

managerial staff recorded against the compensation variable. The rest of the

variables scored by manager's shows reasonably good response. When we look

at the table 5.31, the interesting observation comes into light that subordinates

express positive view against job definition >60 % .

The lowest mean score(2.33) is recorded in employee participation among

subordinates of SBI. However the rest of HRM variables scored by subordinates

show average response. Which is indication of the fact that there is a

tremendous scope of improvement of various HRM practices in case of

subordinates is concerned.

52
It is clear from the table that overall mean score or its percentage linked across

all the HRM practice variable of the employees both managers and subordinates

in SBI are less satisfied as compared to the employees of PNB. Thus it is clear

from the table 5.30 that contradictory statements among the managers and

subordinates in both the organization are observed. Managers claim that top

management goes out of their way to make sure that employee enjoy their work.

Managerial personnel also claim that they always help their subordinates and

presume development of subordinate is very important job in both the

organization. On the other hand interesting observation come to light that

subordinates blame that employees participation is rare in making any decision

and compensation is not based on competency or ability of an employee.

However as compared to managers, subordinates are highly dissatisfied with

existing HRM practices in both the organizations.

The situation in case of PNB is comparatively better than SBI which is clearly

reflected from overall mean values and their respective percentage ranging

between 3.05(51.25) to 4.44(86.00) in managers and 3.07(51.75) to 3.92(73.00)

in case of subordinates of PNB. While in SBI overall mean values and their

respective percentage ranging between 2.54(38.50) to 4.07(76.75) in managers

and 2.33(33.25) to 3.44(61.00) in case of subordinates.

As a whole while looking the above analysis, we conclude that overall

managers are more satisfied than subordinates towards the HRM practices in the

sample study organization. We can also conclude that satisfaction level of PNB
53
employees towards the HRM practices is higher than SBI employees. Higher

the level of satisfaction higher is the organizational performance thus our

alternate hypothesis is accepted the HRM practices are closely related with

organizational performance and null hypothesis is rejected.

Table 1.3. Perceptions of managers and subordinates towards the overall HRM

practices in public sector.

54
 FINDINGS OF THE PROJECT

Job analysis

Every organization has different positions known as corporate organogram

or organizational hierarchy. Each position has some duties and is

responsible to its superior. Assigning people in each position with some

specific responsibilities and tasks may be termed as job analysis. According

to Dessler (2020), Job analysis is the procedure that determines the duties

of the company's positions and the characteristics of the people to hire

for them.

Recruitment and selection

After job analysis, the next part is recruitment and selection. Recruitment

and selection involve the process of encouraging people to apply for the

position and finding skilled and talented people for the position.

Recruitment is the process of enticing individuals to apply for positions with

an organization on time, insufficient numbers, and with the appropriate

qualifications (Mondy and Martocchio, 2016).

Training and development

The core of a continual endeavor to increase employee competency and

organizational performance is training and development (T&D) (Mondy

55
and Martocchio, 2016). Both are areas of human resource management

that attempt to improve an organization's capacity to create positive

results. Employee development, human resource development,

development, and learning are some of the terms used to describe it

(Anwar and Balcioglu, 2016).

Compensation

Compensation is the sum of all benefits given to employees in exchange for

their efforts. Compensation includes both financial and non-financial

benefits. Financial benefits include salary, wages, bonuses, commission,

retirement plans, medical benefits, etc., whereas non-financial benefits

involve satisfying, enjoyable, and challenging jobs, job environment, and

workplace flexibility.

Motivation and reward

Motivated workers are necessary for organizations to retain an effective

workforce that is eager to attain strategic corporate goals. Motivation can be

defined as "a set of energetic forces that originate both within as well as

beyond an individual's being to initiate work-related behavior and

determine its form, direction, intensity, and duration"(Pinder, 1985).

56
Building employee relations and engagement

Employee relations is concerned with the management of the working

relationship as well as the psychological contract. Employee relations

encompass a broader range of issues than industrial relations, which

are primarily concerned with interactions between management and trade

union representatives and officials, including collective bargaining,

collective bargaining agreements, and dispute resolution (Armstrong and

Taylor, 2014).

Employee health and safety

Employee safety entails preventing injuries caused by work-related

incidents. Factors such as musculoskeletal diseases, stress injuries, and

workplace and domestic violence are all covered under the umbrella

term of safety. Employees' health refers to their ability to work without

experiencing physical or mental disease (Mondy and Martocchio, 2016).

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 CONCLUSIONS AND SUGGESTIONS

Most of the researchers and the human resource practitioners agree that

performance of employees is the key to success for any organization. The better

the employees perform, the more the successful the organization is. If the

organizations do not focus on its human resource management, not only the goals

remain unaccomplished but work performance also suffers. Therefore,

organizations must take its human resource management responsibility seriously

for the enhancement of their employee's performance and accomplishment of

their goals. The study of HRM practices and its impact on organizational

performance in the sample study organization suggest they face number of

challenges to ensure the professional and organizational commitment of officials

in order to provide quality services to the people. Effective human resource

management issues raised in this research would lead to better implementation of

reform processes. An attempt was made to understand the relationship of different

HRM practices with perceptional organizational performance in banking industry

in India with a view to a) to understand the relationship between HRM practices

and organizational performance b) to identify the whether there is a positive or

negative impact of HRM practices on organizational performance c) to critically

review the HRM practices in the sample study organization and d) to provide

some relevant measures that can enhance the organizational performance of the

sample organizations under study . The results also indicate that the employees

58
of PNB are more satisfied than the employees of SBI In order to achieve and meet

with the worldwide standards and to sustain in a competitive market banks need

to create such an organizational climate and implement HRM practices that has

great impact on the quality of organizational performance.

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 LIMITATIONS AND DIRECTIONS FOR FUTURE

RESEARCH

The study was confined to investigate the impact of HRM practices on

organizational performance in banks and compare HRM practices in PNB and

SBI. The research study made number of limitations. The main limitation of this

research study is about sampling issue as the small sample size was small that

may have affected the research results. Even our research findings might have

depicted certain results these findings cannot be construed as an independent

model to ensure performance of the organizations.

Nonetheless, this model has provided insight into possible reasons for

organizational performance. In addition to that, the study focused on

perceptions of organizational performance and HRM practices as reported by

the employees. Hence it is subject to common source and common method bias

as perception varies from person to person. The study did not cover all the

HRM practice variables that have an impact and relationship with

organizational performance. Several suggestions and recommendation that are

fruitful for future research emerged from this present study. In order to validate

the findings of the study, case study, focus groups and longitudinal studies are

another interesting approach that can be undertaken for future research.

Additionally, the research model of this study can be tested in other service

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sector like education, airlines,hotels, hospitals and tourism with the large

sample size so that the research model can be generalized.

61
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