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nkM Ass|gnment















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ko|| 13
Though public sector banks have been on a transformational journey since
past two decades, from improving technological aspects of banking to
providing better retail banking products, one key area that needs to be
looked into going into the future is how to compete in the human capital
and its management.
A recent study by McKinsey (2010) makes some revealing observations. t
says PSBs will lose half their employees to retirement over the next
decademore than 80% of general managers, 50% of middle managers
and 30% of all PSB employees will retire over the next five-six years. This
poses a massive recruitment challenge, especially in the context of
changing roles and skills requirement.
The 2010 Khandelwal Committee put forward various issues in banking
regarding HR including-lack of manpower planning, HR policies not linked
with profitability of the bank,HR as an ad hoc and inadequately
professionalized system, with high standardization, trade unionism,
absence of a reward mechanism and serious gaps in succession planning.
Considering the new challenges and opportunities of new age banking,
enormity of the issue and long-term risk of its neglect, HR needs to be
monitored by the government and by the banks' boards.

Some fundamentaI measures
O Introduct|on of |ndustry |eve| wage system 1he dlfference beLween prlvaLe
and publlc secLor banks wage ls subsLanLlal and grows hlgher ln order Lo
hlerarchy as Lhe responslblllLy grows 1hls ls noL ln harmony wlLh new age
banklng and needs Lo be looked lnLo and should be aL Lhe fundamenLal of
change ln pollcles 1hls wlll lnfuse a sense of ownershlp and accounLablllLy aL
bank level for llnklng compensaLlon Lo lssues of proflLablllLy and producLlvlLy
and wlll also help banks Lo llnk pay wlLh performance wlLh wlder consequences
on moLlvaLlon
O C|ar|ty |n nk po||c|es 8anks have clear pollcy documenLs for all lLs funcLlons
Slmllarly Lhe P8 pollcy should clearly lay down Lhe dlrecLlon of lnlLlaLlves ln
Lhe varlous subsysLems of P8 such as recrulLmenL LalenL managemenL career
plannlng employee engagemenL successlon plannlng and leadershlp
developmenL
O ea||ng w|th Un|ons lor a long Llme Lhe P8 ollcles have been dlcLaLed by
unlons whlch have made sLandardlzed wage pollcles and dlscouraged lncenLlve
based performance 1he managemenL needs Lo revamp lLs seLLlemenLs and
creaLe an undersLandlng for beLLer uLlllzaLlon of human resource
O Success|on p|ann|ng and |eadersh|p deve|opment ven Lhough Lhe Lop
managemenL successlon ls well soughL ouL ln mosL cases Lhe second level of
hlerarchy needs serlous focus ln Lerms of developmenL of leadershlp skllls and
lLs successlon plannlng 1hls can be done by managemenL developmenL
programmes aL varlous managemenL schools and focuslng on enhanclng Lhe
skllls of Lhe bankers as Lhey grow up hlgher ln leadershlp chaln ln Lhelr banks
O rofess|ona||zat|on of nk unllke oLher progresslve lndusLrles and prlvaLe
banks LhaL hlre Lralned and quallfled professlonals for P8u S8s largely rely
on career bankers uue Lo lack of exposure Lo speclallzed meLhodology for P8
Lhey are noL able Lo lnlLlaLe besL pracLlces for sclenLlflc performance
measuremenL evaluaLlon and LalenL managemenL and reLenLlon lor example
Lo emphasls on P8 each bank should consLlLuLe a commlLLee wlLh Lwo
ouLsLandlng P8 professlonals aparL from Lhe CMu and u
ln order Lo aLLracL Lhe besL mlnds Lo work ln Lhe banks Lhe banks need Lo creaLe a
work culLure and a brand value ln lLself Lo reflecL prlde and respecL llke slmllar blg
corporaLe houses and MnCs A young workforce looks more Lhan [usL pay and
package buL Lhlngs LhaL have become parL and parcel of professlon llfe