A PROJECT REPORT ON

HRM IN BANKING SECTOR

Submitted in partial fulfillment of the requirements

For
MASTERS OF COMMERCE BANKING AND FINANCE
(2015-2016)
BY
HUMERA KHAN
Under the guidance of
Prof. GIRISH

Affiliated to University of Mumbai

S.K.SOMAIYA COLLEGE OF ARTS, SCIENCE AND COMMERCE
AURBINDO, VIDYANAGAR
VIDYAVIHAR [EAST]. MUMBAI-400077

[1]

CERTIFICATE
OF
PROJECT WORK
This is to certify that,

Ms HUMERA KHAN M.com Banking and Finance Part 1 Semester-2 Roll

No: 49 has undertaken and completed the project titled HRM IN BANKING
SECTOR during the academic year 2015-2016 under the guidance of Prof.
GIRISH submitted to this college in fulfillment of the curriculum of
MASTERS OF COMMERCE BANKING AND FINANCE,
UNIVERSITY OF MUMBAI
This is a Bonafide project work & the information presented is true &
original to the best of our knowledge & belief.

_______________
PROJECT GUIDE

______________________
EXTERNAL EXAMINER

_____________________
COURSE COORDINATOR

__________
PRINCIPAL

DECLARATION
[2]

I, HUMERA KHAN studying in M.com Banking and Finance Part 1 course in the
academic year 2015-2016 at S.K.SOMAIYA College of Arts, Science and
Commerce and hereby declare that I have completed the project on HRM IN
BANKING SECTOR as a part of course requirements of MASTERS OF
COMMERCE Banking and Finance of University of Mumbai.
I further declare that the information presented in this project is true and
original to the best of my knowledge.

Date:

Signature of Student
HUMERA KHAN

[3]

ACKNOWLEDGEMENT

I the undersigned, have great pleasure in giving my sincere thanks to those

who have contributed their valuable time in helping me to achieve the success in
my project work. I would like to thank Principal Dr. SANGEETA KOHLI, S K
SOMAIYA College of Arts, Science and Commerce for her continued support. I
would like to express my sincere thanks to Co-coordinator for his constant
encouragement, in completion of this project successfully.
I am indebted and thankful to my project Guide and Motivator Prof
GIRISH for his valuable and timely guidance, co-operation encouragement and
time spent for this project work. I would like to thank our Library Staff for
providing me sufficient information, which helped me to complete my project
successfully. I would like to thank all the lecturers for their support and guidance
throughout the project.
I also thank my family members for their continued support in completing
this project work and last but not least, I wish to thank all my friends and well
wishers who are directly or indirectly linked with the success of my project.
Course name: Master of Commerce Banking and Finance
College name: S.K.Somaiya college of Arts, Science and Commerce
University name: Mumbai University.

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ABSTRACT

Organizations the world over are under great pressure to combat recession,
globalization and internal competition. The companies that has emerged winners
are those which use all their people, all their skills, all the time; focus on speed and
action; break barriers to make their own rules and create benchmarks instead of
playing by the rules of the industry. Success in such a global environment is
possible by achieving a strategic fit among various parameters like structure,
HRM, culture and leadership.
Now, organizations have realized that People, rather the employees are the asset
of any organization. An organization, whether it is a manufacturing concern or
service oriented, cannot function without the active participation of people.

These days, role of HR has moved away from being merely a statutory and
personnel management job to that of business partnering. In the ultimate analysis,
HRM strategies require imaginative, innovative and at the same time flexiblity to
adjust to change. They should also be constantly reviewed keeping in mind what is
happening in the business and where it is heading.

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INDEX

SR.NO
1

TOPIC

PAGE NO
7-16

Introduction
Nature of HRM
Scope of HRM
Significance of HRM
Features of HRM
Changing Role of HRM
E-HRM
HRM in Banking Industry

Case Study- Standard Chatered Bank

30-35

4
5
6
7

SWOT ANALYSIS
Facing Global Challanges
Conclusion
Biblography

36-37
37-38
39
40

17-29

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HUMAN RESOURCE MANAGEMENT [HRM]

INTRODUCTION
Human resource management [HRM, or simply HR] is a function in
organizations designed to maximize employee performance in service of their
employers strategic objectives.HR is primarily concerned with how people are
managed within organizations, focusing on policies and systems. HR departments
and units in organizations are typically responsible for a number of activities,
including employee recruitment, training and development, performance appraisal,
and rewarding (e.g., managing pay and benefit systems). HR is also concerned
with industrial relations, that is, the balancing of organizational practices with
regulations arising from collective bargaining and governmental laws.
Behind the production of every product or service there is a human mind, effort
and man hour (working hours). No product or service can be produced without
help of human being. Human being is the fundamental resource for making or
constructing anything. Today many experts claim that machines and technology are
replacing human resource and minimizing their role or effort. But even machines
and technology have been build by the human aid and besides companies have
been continuously in search for talented, skilled and qualified professionals to
further develop latest machines and technology, which again have to be controlled
or used by humans to bring out products.
Meaning:
Human Resource Management is the process of recruitment, selection of
employee, providing proper orientation and induction, providing proper training
and the developing skills, assessment of employee (performance of appraisal),
providing proper compensation and benefits, motivating, maintaining proper
relations with labour and with trade unions, maintaining employees safety, welfare
and health by complying with labour laws of concern state or country.

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NATURE OF HRM
Human Resource Management involves management functions like planning,
organizing, directing and controlling
It involves procurement, development, maintenance of human resource
It helps to achieve individual, organizational and social objectives
Human Resource Management is a multidisciplinary subject. It includes the
study of management, psychology, communication, economics and
sociology.
It involves team spirit and team work.
It is a continuous process.
Experience high turnover
Have your people not doing their best
Waste time with useless interviews
Have your company taken to court because of discriminatory actions
Have your company cited under federal occupational safety laws for unsafe
practices
Have some employees think their salaries are unfair and inequitable relative
to others in the organization
Allow a lack of training to undermine your department's effectiveness
Commit any unfair labour practices
Human Resource management includes:
1. Conducting job analyses,
2. Planning personnel needs, and recruitment,
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3. Selecting the right people for the job,

4. Orienting and training,
5. Determining and managing wages and salaries,
6. Providing benefits and incentives,
7. Appraising performance,
8. Resolving disputes,
9. Communicating with all employees at all levels. Formerly called personnel
management.
10. Maintaining awareness of and compliance with local, state and federal labor
laws.
11.These are also called as functions of human resource management for the
purpose of effect you utilization of human resource.
SCOPE OF HRM

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 Human resource planning:

Human resource planning or Human Resource Planning refers to a process
by which the company to identify the number of jobs vacant, whether the
company has excess staff or shortage of staff and to deal with this excess or
shortage.
Job analysis design:
Another important area of Human Resource Management is job analysis. Job
analysis gives a detailed explanation about each and every job in the
company.
Recruitment and selection:
Based on information collected from job analysis the company prepares
advertisements and publishes them in the newspapers. This is recruitment. A
number of applications are received after the advertisement is published,
interviews are conducted and the right employee is selected thus recruitment
and selection are yet another important area of Human Resource
Management.
Orientation and induction:
Once the employees have been selected an induction or orientation
program is conducted. This is another important area of Human Resource
Management. The employees are informed about the background of the
company, explain about the organizational culture and values and work
ethics and introduce to the other employees.
Training and development:
Every employee goes under training program which helps him to put up a
better performance on the job. Training program is also conducted for
existing staff that have a lot of experience. This is called refresher training.
Training and development is one area where the company spends a huge
amount.
Performance appraisal:
Once the employee has put in around 1 year of service, performance
appraisal is conducted that is the Human Resource department checks the

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performance of the employee. Based on these appraisal future promotions,

incentives, increments in salary are decided.
Compensation planning and remuneration:
There are various rules regarding compensation and other benefits. It is the
job of the Human Resource department to look into remuneration and
compensation planning.
Motivation, welfare, health and safety:
Motivation becomes important to sustain the number of employees in the
company. It is the job of the Human Resource department to look into the
different methods of motivation. Apart from this certain health and
safety regulations have to be followed for the benefits of the
employees. This is also handled by the HR department.

SIGNIFICANCE OF HRM
Facilitates professional growth:
Due to proper Human Resource policies employees are trained well and this
makes them ready for future promotions. Their talent can be utilized not
only in the company in which they are currently working but also in other
companies which the employees may join in the future.
Better relations between union and management:
Healthy Human Resource Management practices can help the organization
to maintain co-ordinal relationship with the unions. Union members start
realizing that the company is also interested in the workers and will not go
against them therefore chances of going on strike are greatly reduced.
Helps an individual to work in a team/group:
Effective Human Resource practices teach individuals team work and
adjustment. The individuals are now very comfortable while working in
team thus team work improves.
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 Identifies person for the future:

Since employees are constantly trained, they are ready to meet the job
requirements. The company is also able to identify potential employees who
can be promoted in the future for the top level jobs. Thus one of the
advantages of HRM is preparing for the future.
Allocating jobs to the right person:
If proper recruitment and selection method is followed, the company will
able to select right person for right job. When this happens the number of
people leaving the job will reduce as they will be satisfied with their job
leading to reduction in labour turnover.

FEATURES OF HRM
Relates to managing people:
HRM relates to managing people at work. It covers all levels of personnel
and their needs, expectations and so on. In this sense, it is a comprehensive
function and is basically concerned with managing people at work.
People oriented process:
HRM is concerned with employees, both as individuals as well as a group.
The aim of HRM is to get better results through their involvement,
motivation and co-operation. It is a people-oriented process of bringing
people and organizations together so that the goals of each are met properly.
Develops employees potentialities:
HRM is concerned with helping the employee to learn and develop their
potentialities to the highest level for their benefit as well as for the benefit of
their organization. It is a manpower/employees development oriented
subject.

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 Integral part of organizations:

HRM is an integral part of all organizations. It is concerned recruitment,
selection and development of manpower available.
Continuous activity:
HRM is a continuous activity in an organization as personnel problems
continue to exist as long as the employees are working in an organization.
They need constant attention as they may disturb normal working of an
organization, if neglected.
Aims at securing employee co-operation:
HRM aims at securing willing co-operation of employees for achieving
organizational objectives. This is natural as industrial and other activities can
be conducted only with the support of human resources.
Challenging activity:
HRM is a challenging activity as it deals with the people/employees who are
always unpredictable. Employees have emotions and sentiments and cannot
be treated like machines. It is necessary to handle them tactfully. Here
multidisciplinary approach is required. HR manager makes use of various
disciplines (Psychology, Economics, Sociology, etc.) for managing
workforce effectively.

CHANGING ROLE OH HRM

The role of HR is changing. Previously considered a support function, HR is
now becoming a strategic partner in helping a company achieve its goals. A
strategic approach to HR means going beyond the administrative tasks like
payroll processing. Instead, managers need to think more broadly and deeply
about how employees will contribute to the companys success.
To understand the ever changing role of HR, let us have a look into how the HR
evolved and is evolving over a period of time or the ever changing role of HR
starting from the period of before industrialization.

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18 & 19 Century: This period can be classified into three period before
industrial revolution, period of industrial revolution and post industrialization.
Period before industrial revolution The society was primarily an agriculture
economy. Number of specialized crafts was limited and was usually carried out
within a village or community with apprentices assisting the master craftsmen.
Period of industrial revolution Industrial revolution marked the conversion of
economy from agriculture based to industry based. Modernization and increased
means gave way to industrial setup. A department was set up to look into workers
wages, welfare and other related issues. This led to emergence of personnel
management with the major task as
Workers wages
Workers record maintenance
Workers housing facilities and health care
An important event in industrial revolution was growth of Labour Union.
Post Industrial revolution The term Human resource Management saw a major
evolution after 1850. Various studies were conducted during this period which gave
HRM altogether a new meaning and importance.
20 Century (until late 1980s): The post industrialization period continued until
late 1980s. Evolution of scientific human resource management was emerged.
This period was known for traditional Human Resource Management. As a result,
HR started handling activities like
Recruitment and selection of skilled workforce;
Motivation and employee benefits;
Training and development of workforce;
Performance related salaries and appraisals;
Wage uniformity;
Statutory compliances;
20 Century (post late 1980s): This is the continuation of traditional human
Resource Management period. This is the period where globalization was evolving
in many ways and many organizations started adopting the practice of operating
from various parts of the world this is in search of skilled employees and to
decrease the expenditure. The focus started shifting towards employee
development. HR started handling activities like
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Recruitment and selection;

Training and development;
Performance appraisals;
Compensation and benefits management;
Employee Motivation through engagement activities, rewards and
recognition;
Attrition Management;
Statutory compliances;
Designing of policies;
An important event in this period is the improvement in communication systems.
21 Century: With multiple organizations entering into different countries, there are
numerous brands of similar products available in the market. And also there is a
revolution in communication system, transportation and in many other sectors. In
terms of communication, internet and mobile phones have become a part and
parcel of everyones life.
Today, organizations have an enormous competition in terms of people, products,
services and etc. In order to meet this, the traditional human resource management
approach faded and human resources started becoming a strategic human resource
management. Strategic HRM focuses on actions that differentiate the organization
from its competitors and aims to make long term impact on the success of
organization. HR started and continuing playing as a strategic advisor to the
management. The focus is on attracting and retaining talent through engagement.
Activities handled are like

Manpower planning, recruitment and selection;

Learning and development;
Organizational design, development and capability programs;
Leadership development;
Employee advocate;
Change Management;
Employer branding;
Increase in the focus of the wellness of employee with more focus on worklife balance;
Compensation, benefits and welfare
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 Employee engagement;
Performance appraisals focusing on overall development of employees;
Designing of policies which focuses on enhancing employee experience at
work place;
Statutory compliance;
Corporate social responsibility;
Employee Grievance handling and etc.
Saying all these, HR is still evolving, emerging and is becoming as a true
business partner. HR plays a key role in organizations success by taking the
role of an advisor to the management in terms of attracting talent, retaining
talent, differentiating an organization from its competitors. HR is partnering
with the management to reach the organizational goals. There are an
increased number of HR professionals understanding the concepts of
business, finance, production, marketing, sales and other functions of
business. Also, the focus of HR has been shifted and shifting towards
individual employee satisfaction, making the organization as Best Place to
Work or Employer of Choice not forgetting the fact that a happy
employee always gives best in reaching organization goals.
E-HRM
E-HRM is the use of web-based technologies to provide HRM services within
employing organizations. It embraces e-recruitment and e-learning, the first fields
of human resource management to make extensive use of web-based technology.
From this base e-HRM has expanded to embrace the delivery of virtually all HR
policies. Within a system of e-HRM, it is possible for line managers to use desktop
computers to arrange and conduct appraisals, plan training and development,
evaluate labour costs, and examine indicators for turnover and absenteeism.
Employees can also use a system of e-HRM to plan their personal development,
apply for promotion and new jobs, and access a range of information on HR policy.
E-HRM is the (planning, implementation and) application of information
technology for both networking and supporting at least two individual or collective
actors in their shared performing of HR activities.
Types of E-HRM
Operational E-HRM:
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Operational E-HRM is concerned with administrative functions - payroll

and employee personal data for example.
Relational E-HRM:
Relational E-HRM is concerned with supporting business processes by
means of training, recruitment, performance management and so forth.
Transformational E-HRM:
Transformational E-HRM is concerned with strategic HR activities such as
knowledge management, strategic re-orientation.

HRM IN INDIAN BANKING INDUSTRY

Human Resource
HRM contributes to organizational performance in different ways: through sound
functional basics; through effective realignment when the external environment
changes; and by building an organizational context to that the organization can
cope with the dualistic forces

Human Resource in Banking

The core function of HR in banking industry is to facilitate the performance
improvement among its people. Factors such as skills, attitudes and knowledge of
personnel, play a critical role in determining the competitiveness within the

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organization or the industry.. The quality of human resources indicates the ability
of banks to deliver the value to clients or customers.
Indian banking industry has been an important driving force behind the nations
economic development. The emerging environment poses opportunities and threats
to banks, as well as the human resource in changing economic and business
environment. The primary emphasis needs to be on integrating human resource
strategies with the business strategy. Above the aspects of recruitment, placement,
performance management, rewards and employee relations - a radical
transformation of the existing personnel structure in public sector banks like the
seniority over performance is not the best environment for attracting the best talent
from the young competitive environment. However, recruitment practices as well
as on-the-job-training and redeployment are considered as one of those many
improvements of HR in Indian Banks.

HRM Background and Practices

To make the Indian Banking System stronger, efficient and low-cost, the creation
of fundamentals must include in the banks operations, strategies and processes:
strengthening the prudential norms and market discipline; adoption of international
benchmarks; management of organizational change and consolidation within the
financial system; upgrading the technological infrastructure of the financial
system; and human resource development as the catalyst of the transformation.
The Human Resource field in the Banking Industry is considered as one of the
process of discovery and transformation. The field of Human Resource can be
described as emergent and dynamic within the cultural business aspect in a
Banking Industry. The success of todays banking business will sparsely depends
on the human resources of the organization, in which plays a crucial role in
providing the services needed.
The evolution of banking system in India affected the human resource practices,
recruitment and selection practices, and training system. It is very important that
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the details of human resource are discussed along with the employees, to build
their own career planning, perceptions and development.
The primary strength of the industry is the human resource that is why the efforts
to develop the skills and management are the main subject placed before the
human resource. A major challenge for many banks will be to develop the special
competencies and skills for credit appraisal and risk management. Putting the
information technology is a key contributed in human resource development.
Therefore, the HR model of the future will require professionals to be both driving
and anticipating change, understanding the complexities of the new business
environment and forces shaping it

HR Practices and Methods

A key focus of the human resource management is highlighted in the role of
staffing, performance management, training and development, and compensation
that plays indifferent types of business strategies. With the acquisition and
preparation of human resources, including planning, recruitment, selection, and
training can affect the whole organizational performance.
The HR planning, the start of the strategy, illustrates the process of
developing human resource plan. The strengths and weaknesses of
staffing options such as outsourcing, use of contingent workers, and
downsizing are involved in planning.
The recruitment process is done strategically to determine the talented
employee fit for the position.
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 The selection process emphasizes the ways in minimizing errors in

employee selection and placement to improve the companys competitive
position. The selection method standards such as validity and reliability
are utilized.
An effective training systems of the managers role in determining
employees readiness for training, creating a positive learning
environment, and ensuring the training is used on the job.

Beyond the human resource strategies are the rewarding and compensating that can
strengthen or weaken the employee effectiveness. In order to give recognition and
increase motivational levels amongst the employees, some Banks linked the
individual performance in an incentive scheme or for some rewards that may
come into any form . In summary, all of the HRM strategies and function should be
aligned to help the company meet its objectives as well as focusing on their
customers.
The best practice approach assert that certain HR practices are found to
consistently lead to higher organizational performance, independent of an
organizations stated strategy. The high performance HR practices foster
innovation through the development of innovation values, encouraging of
information sharing, goal setting and appropriate training and development. The
major innovations in Hr practices occurred when senior line managers take the lead
and their adoption depends on the attitude of top management and their
relationship with the HR department.
NEED OF HRM IN BANKS
Human Resource Management is important for banks because banking is a service
industry. Management of people and management of risk are two key challenges
facing banks. How you manage the people and how you manage the risks
determines your success in the banking business. Efficient risk management may
not be possible without efficient and skilled manpower. Banking has been and will
always be a "People Business". Though pricing is important, there may be other
valid reasons why people select and stay with a particular bank. Banks must try to
distinguish themselves by creating their own niches or images, especially in
transparent situations with a high level of competitiveness. In coming times, the
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very survival of the banks would depend on customer satisfaction. Those who do
not meet the customer expectations will find survival difficult. Banks must
articulate and emphasize the core values to attract and retain certain customer
segments. Values such as "sound", "reliable", "innovative", "international", "close",
"socially responsible", "Indian", etc. need to be emphasized through concrete
actions on the ground and it would be the banks human resource that would
deliver this.
It is a common complaint among bank executives that skilled manpower is in short
supply. No two arguments on this, HR resources are becoming scarce both in
quality and quantity. And, it is quite elementary that any resource that is in short
supply needs to be properly managed for the benefit of society and, therefore, you
need to pay attention to the entire Human Resource Management process. What
does it mean? You need to manage the people and for this you need to
discriminate between the people, that is positive discrimination. The entire
spectrum of HR practice requires revolutionary changes if the banks have to
survive. Managing the people is the key challenge. And, discrimination is the key
word when dealing with people. You will notice that this word is very frequently
used.

ROLE OF HRM IN BANKS

Applicant screening:
Certain jobs do not really require a thorough background check, but any job
in a bank definitely does. Human resource departments in banks must go the
extra mile to uncover the criminal and financial history of job applicants, for
the safety of their clients and their organization as a whole. Banks are highly
unlikely to hire candidates with financial fraud on their records, for example,
due to the sheer weight of temptation a position in a bank would place on
someone with that kind of history.
Bank security:
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Human resources departments must design and monitor work processes to

reduce opportunities for internal theft and collusion. HR policies separate
cash receiving, storage, processing and disbursement, and record all
activities via video surveillance. In the event that an employee attempts to
steal from a bank, the HR department must handle the legal paperwork and
administrative processes required by court proceedings.
Pay decisions:
As with other industries, HR professionals in banks have a hand in making
decisions for pay raises and promotions. Bank workforces are unique in that
they often have two methods of paying employees: salaries for back-office
and other personnel, and commissions for sales employees. Promotion
decisions for salespeople selling loans and other financial products differ
from decisions to promote administrative staff. Banks' HR departments must
manage both equitably and strategically to develop the workforce.
Executive requirement:
The banking industry is highly competitive, and banks constantly navigate a
legal minefield that can devastate companies that step out of line. Finding
the right executives is crucial in any industry, but especially one in which
competition is so fierce and legal compliance so important. Human resources
professionals in banks must go the extra mile to recruit the best executive
talent in the banking field, allowing their organizations to thrive and grow
into the future. Human resources departments in corporations must gain
approval of the board of directors before bringing someone in to fill an
executive spot, as well.

HR CHALLENGES FACED BY BANKS

The first and foremost challenge that HR function in India faces is to convert
the abundant population pool into useful human resource.

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 Training and development of human resource to match ever changing

industry demands requires HR to develop new and innovative ideas that suit
individual as well as industry criteria.
Employee motivation and satisfaction is another area of concern for the HR
today. In order to reduce attrition, HR needs to realize that monetary needs
are not the only drive for an individual and that a sense of belongingness
must be imbibed in employees.
With the increase in number of job options available nowadays, the HR
function of an organization must take care that they hire those people who
believe in long-term commitment to the organization. The HR then must
take up the challenge of retaining them by developing retention techniques
like Holiday plans fun-at-work etc.
Because of cutthroat competition, HR in India also faces the task of building
competitive advantage for the company over national and international
competitors.
The growing importance that companies are nowadays giving to cost-cutting
has posed HR with the challenge to minimize expenditure on HR not
compromising on the productivity.
Since right-sizing has been a growing trend in Indian organization, the HR
now faces the task of identifying and retaining the key employees of an
organization and letting go those that do not suit its future requirements.
HR also faces the challenge of creating a balanced organization that
originates from mergers and acquisitions.
HR needs to assimilate those policies that are mutually agreeable to the
companies being merges as well as profitable for the new organization.
Globalization poses HR with challenges such as expatriation and
repatriation. HR needs to train employees that leave their nation for fulfilling
a foreign assignment. It also needs to provide such employees with adequate
moral support and assure them of job security on their return.
With multinational organizations on the rise, HR needs to focus on issues
such as cross-cultural training so that problems that can arise because of
differences in international professional values can be diminished.

HOW TO MANAGE HUMAN RESOURCE

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(a) Planning
(b) Acquiring the right people
(c) Retaining/developing the people
(d) Managing people separation/exit
(a) Planning
As the economy grows at a steady rate of around 7-8%, incomes rise and
demographic dividends start accruing, the Banking industry is expected to take a
quantum leap forward. But this growth will need a large number of people and
considering that there are retirements in lakhs, a defining moment is being
presented before the Nationalized Banks to transform. Are the banks ready to
handle the new bunch of employees who will be culturally so different from their
predecessors of the post nationalization era? It all begins with having a manpower
plan. How many banks can claim to have a proper manpower plan that captures the
type of people it requires, the level at which they are required, clearly defined roles
for everyone, etc. Manpower plans should follow a lifecycle approach, that is, from
the time of recruitment of an employee to his retirement. Further, this needs to be
integrated with the Business Plan and strategy of the bank. Are we having a
Business Strategy or Business Plan needs to be addressed first.
While planning your people requirement it is very important for you to develop
your employer brand, that is, your reputation as an employer to attract, engage
and retain talented candidates and employees. Banks will have to plan for the
following:
A steady, carefully calibrated recruitment programme,
As rapid technological changes transform business continuous skill upgradation,
A new generation of the workforce will be working alongside an older
generation as a team. Banking, in my opinion is a team work and this new
situation will require cultural adjustments and therefore, change
management.

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b) Acquiring the right people:

What kind of talent is required by the banks? Discrimination is the key. Do we
need good people? Or do we need suitable people? We require good but suitable
people. Is the mad rush to top campuses justified? Will the people recruited from
top management institutes understand the Financial Inclusion drive? Will these
people have empathy towards poorest of the poor? It is often heard bank heads
talking about the challenge of finding people keen to work in rural areas. Does it
not indicate that there is something amiss in the way we recruit people? Is it not
better to recruit people from smaller cities?
How do we get to acquiring people with the right kind of talent? Unfortunately, it
is the same limited talent pool that will be targeted by Banks, Financial
Institutions, Insurance, Telecom and other industries which are on fast growth track
and in need of talented manpower. While my friends in the Banking Industry are
busy developing on-line application forms and on-line tests, we need to
probably question if we are even targeting the right kind of talent pool. I would like
to have a study on how many people in remote villages, at the taluka / tehsil level,
appear for the recruitment tests that are conducted. Because, these might be the
people who could be best suited to drive our financial inclusion agenda. While we
are busy testing the people for problem solving skills on paper, Professor Debashis
Chatterjee, Director of IIM Kozhikode says that these do not necessarily mean
problem solving skills on the ground. Our recruitment tests do not focus on testing
the psychological abilities of candidates to ensure that only the ones with right
attitude towards the job are selected. This is why we often end up with people
having brilliant minds but incapable of actually delivering on the tasks assigned.
Banks need to seriously look at lateral recruitment as an option to induct specialists
at various levels with specific skill sets and experience pool. While we have often
heard of people leaving banks to join finance, legal, accounting firms, etc. seldom
have we heard of people leaving these professions to join banks. This, needs to
change.
The right people will come only if they are paid competitive salaries. However, too
much pay also involves moral hazard issues and invites adverse attention of
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external stakeholders. As we will see later, the salary structure in the PSBs appears
to be distorted. There has to be discrimination in salaries of people.
(c) Retaining/ Developing the People:
We may be able to get the most suited people for our work but then the challenge is
to retain these people and to develop them. There are several dimensions to this
issue such as training/ re-skilling of employees, performance measurement,
promotion policy, transfer policy, talent management, communication, etc.
Training/ Re-skilling:
The nature of business requires massive re-skilling of the existing workforce and
continuous skill up-gradation. Khandelwal Committee has recommended major upgradation of in-house training facilities of banks. I tend to have a different view.
With a lot of service providers in the market, should we not majorly utilize their
services? In-house training facilities should be used for courseware development
on IT / electronic platforms. The courseware should facilitate skill development.
Again, there will have to be discrimination in the training that each employee has
to be provided - based on his /her requirements and the need of the institution, not
as a routine, not as a measure of reward alone.
It is also important here to understand why people work? In the olden times, in
agrarian societies, people worked for livelihood. Times changed and came the
industrial age. Livelihood was not the only reason of working. As Henry Ford
famously said Why is it every time I ask for a pair of hands, they come with a
brain attached? The people then understood that apart from livelihood, there is
something else required. This something else was termed Job Satisfaction. We
have moved on further and are now in the Knowledge Age and in this age, in my
opinion, people work for Empowerment more than anything else.
The best development of people is through empowerment. People at all levels in
the organization must feel empowered. For this, we need to cut layers of
bureaucracy that we have created over the years and adopt an effective way to
delegate. We have made some beginning in this direction in the RBI.

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Performance Management:
This is the most important area of Human Resource Management, the foundation
of which is discrimination. Unfortunately, current systems are unable to
discriminate and differentiate between performers and non-performers. In fact, it is
impossible to identify who are the performers and who are the non-performers. In
any organization typically there would be some 10-15% of people who would be
the high performers. HR managers often focus on this segment and try to cater to
their needs first. Instead, focus should be on the remaining 85% as any
improvement in their performance would have a significant impact on the
organizations performance. With all the efforts a student who always scores above
90% marks in his class, will benefit by only a few percentage. The one who scores
only 45%, however, has the potential of doubling his marks.
The results of not having a proper performance management system are disastrous.
We all have to deal with the problem of people who are promotable but not
postable and people who are postable but not getting promoted. This is
because we have failed to discriminate between performers and non-performers.
HR systems may have failed to appreciate performers. In fact, we have not even
tried to define what performance is in a given job. Despite this, what is the kind of
time we are spending on Performance Management? What is the kind of attention
that the Boards, CMDs and EDs give to this? To begin with, job roles and job
descriptions need to undergo a major overhaul. In fact, even at the level of CMDs/
EDs there is a need for complete job description and clear delineation of job roles
of CMDs and EDs. We need to define performance appropriately in the context
of banking services today for all levels of functionaries.
A fair, transparent and objective mechanism for performance management is a
must for all banks because an effective Performance Management System is the
key to talent management and succession planning. In RBI we are shortly going to
introduce a new Performance Management System that will work on goal setting,
potential appraisal of performers and developing a talent pipeline.
We are also going to face major challenges on the Talent Management front. In
coming times, the work force will get complex and there will be a need to juggle a
wide variety of people with varied needs and preferences, resulting in an array of
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relationships between the organization and those who work for it. Peter Drucker
had, more than a decade ago, expressed the need for what he called nontraditional work relations: flexible schedules, contract arrangements, virtual
teams, etc.
Managing in the knowledge era:
We are living in the knowledge age where our existing management theories,
which are oriented towards being more productive in the industrial society and the
ethics around it, will need to undergo a 360 degree change. As I mentioned earlier,
the key driver that motivates people in the knowledge era is not livelihood or job
satisfaction but is the feeling of empowerment. When we talk of talent
management today, it is about managing knowledge workers and there are some
prerequisites for it:
They cannot be treated as subordinates, but as associates
They cannot be managed, but led
They will work flexi-time and flexi-place but would need a home base
Above all, they cannot be purchased or bribed, they have to be empowered.
The new generation, in the age of knowledge workers, is going to be different. We
need to rewrite our employment contracts. There should be a variety of people
working with us on variety of options part time / contractual / regular regular in
regular job / regular on flexi-hours, etc.
A Performance Management System should throw up future leaders. This sounds
very simple but we must know what we expect from these leaders. What is
expected of a leader?
A leader is expected to do
Plan (the task)
Inspire (people)
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Inspire for aspiring

Inspire for perspiring
And;
Deliver (on results)
A leader is no leader if he / she cannot deliver.
Systems/ Processes:
The hallmark of any effective HR system/ process is that it should be objective and
transparent. These traits are essential for the manpower to repose trust in the
organizations systems/ processes. No HR function can be effective if it does not
enjoy the trust and confidence of its constituents.
Two key stakeholders in the HR management process are Board/ Senior
Management and Unions. How much time do Board members spend on HR related
issues? Perhaps, not enough. Structurally, it is important that Board/ senior
management is actively involved in HR matters involving all its manifestations.
Organized employee unions are an important part of the democratic process and
form an effective channel for communicating with employees down the line. It is
important to involve them in the HR process without allowing them to have an
overbearing influence.
Communication:
Communication with employees is a vital part of the HR process as it helps
enhance transparency in HR practices, thereby imparting credibility to them. When
dealing with human beings, it is important to be objective, transparent and nondiscriminatory and this must be effectively communicated. The employee must say
that the management has all the above qualities. The Board must spend time on
devising ways and means for this communication lay down appropriate structures
for the purpose. All forms of modern communication channels including intranet,
corporate e mails, etc. can be adopted to reach out to employees. However, despite
these developments, the traditional channel of communicating through unions
continues to be relevant as employees attribute greater credibility and reliability to
messages received through their unions. The Banks have a clear cut advantage in
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this respect they already have a participative process. Representatives of the

employees sit on the Board itself and hence, it requires better practice of
participative management in the real sense of the term.
(d) Managing people separation / exit:
Except maybe a last few years, so far most of the people leaving us were due to
retirements. Things will change, unless we are doing all the other things that I
spoke out earlier, properly, people will also leave us for other opportunities and
believe me, there are going to be plenty of them not only from competitor banks
and financial sector but also from outside the financial sector.
We need to introduce a system of exit interviews to determine why people are
leaving our organization whether there are any inherent system/ structure
failures? Have we not been able to empower the people enough? We should not try
to block their exit but, as a part of the manpower planning process, should be able
to identify substitutes who can step in and ensure non-disruption of important
functions, in the event of the exit of a key person. The place of an experienced
person could always be filled in through lateral recruitment of a person with
matching skills/ experience.
While we are facing a crunch of manpower can we use our retired people in
some way we are paying them pension and reasonable medical benefits already
can some contracts not be worked out for them? Again, can we not provide some
empowerment to them to leverage on their inherent loyalty? They could be useful
in brand building efforts, or perhaps, in our financial inclusion initiatives. It is,
definitely, an avenue that could be explored.
Nationalized Banks are at the cusp of a unique opportunity with people retiring
in lakhs making it a retirement decade, it is the best time to transform the HR
processes and implement some new age concepts. This kind of opportunity to
transform HR processes is once-in-a-lifetime window which, if properly utilized,
could help our banks take giant strides. On the other hand, those who miss the bus
would lag behind. The kinds of HR changes required are a tremendous challenge
and opportunity at the same time. We need some fresh ideas to make the banks
future - ready
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STANDARD CHARTERED BANK

Strategic HRM Practices of Standard Chartered Bank

Standard Chartered is the worlds leading emerging markets bank. It employs
30,000 people in over 500 offices in more than 50 countries in the Asia Pacific
Region, South Asia, the Middle East, Africa, United Kingdom and America.
At Standard Chartered Bank, human resource planning involves forecasting the
numbers of people which will needed by the bank, and then working out the best
way of obtaining then as and when they are needed.

Forecasting
Forecasting is the major function of the Standard Chartereds HR department. The
forecasting activities include:
Workforce numbers in sufficient detail to be useful.
Likely changes to the work of the bank.
Work force supply this involves forecasting the variations in the current
work force estimated to occur over the following years.
Impact on budgets and funding.

Good Practice Indicators

Standard Chartered Bank makes sure that effective human resource planning
process is in place when:
Appropriately skilled people are available to be deployed in the
Banks to meet forecast work demands.
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The Banks structure provides with opportunity for appropriate career

development, and is perceived to contribute to effective and efficient
work practices.

Relevant workforce data is readily available to inform management

decision making on human resource issues.
Training & Development
Development is critical to our future business success. In an exclusive interview
after recession hit the economy, Banks MD said The banks performance will
only continue to improve if we develop our people. To develop our people is to
invest in our future.
At Standard Chartered, training is a partnership between the employee and the
Bank. The Bank provides a framework within which the employee can identify the
training and development needs. Such training provides a consistent standard of
management learning throughout Standard Chartered. It also enables the
employees to take all of the programs or study for individual modules according to
their particular development needs.
EMPLOYEE ORIENTATION AND TRAINING
Orientation
Every staff member joining Standard Chartered Bank has to attend a 2-day
comprehensive orientation to get a feel about the Bank and its business. This
orientation program provides a good chance to meet with seniors & colleagues and
to build up the team spirit.
Product Training
Product training is provided e.g. cash product training, operational training etc. to
help the related staff to learn more about the products that the Bank is providing.
Skill Training
The bank provides a lot of skill related training e.g. credit workshop, sales &
negotiation skills, project management, etc. to help staff enhance their skill in
particular aspects.
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 On-job Training
Staff members are continuously involved in the learning process in the form of onjob training. Thus, a lot of on-job training opportunities and job rotation to increase
staffs exposure are provided.
Self-learning
The Standard Chartered Bank sends out CDs and books to staff for them to study
on trade knowledge, credit knowledge, etc. and staff will decide when he/she will
attend the Trade Skill Assessment (TSA) and Credit Skill Assessment (CSA)
Management Development Training
In this training program, the 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
Specific Competence Training is to ensure that the staff excels in product
knowledge, regulatory and unique techniques needed for the particular position.
Learning and Development
Standard Chartered recognizes that it is essential that they have the best people
equipped with the right skills and knowledge to perform their roles to the highest
standards. They went talented professionals, who seek self-development
opportunities including continuing professional development. In return the Bank
offers excellent training and development. They focus development on where they
believe that they will get the greatest return, by developing employees strengths.

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Recruitment
Standard Chartered Bank recruits the most talented individuals from the external
market to supplement their internal pipeline of talent. Their Human Resources
department provides guidance on the uses of psychometric tests and has robust
recruitment criteria to ensure that all candidates are treated fairly, equally and with
respect. It has a global Graduate Recruitment Program; where in the region of 150
graduates are recruited each year on a management trainee program across all
businesses, functions and countries.
Selection
Standard Chartered selects employee based on knowledge, skills and talent. They
are committed to providing equality of opportunity to all employees, regardless of
gender, race, nationality, age, disability, ethnic origin, or marital status. They are
committed not jus to providing equality of opportunity to all employee, but also
identifying what unique strengths each individual brings to the roles they carry out
and the development of these strengths.
Employee health, well-being and safety
Standard Chartered Bank believes that the health and well-being of their
employees and their families is important. They are concerned not only about the
physical health of their employees, but also their mental and emotional well- being.
Standard Chartered has policies & practices that provide for a safe and healthy
working environment. They place importance on the safety and well-being of their
staff, communities and on the effect its working and operational processes have on
the environment. They are continually developing policies and practices designed
to maintain the highest appropriate standards.
Reward & Recognition
Standard Chartered Bank aims to reward the talented and high performing
employees competitively. They regularly conduct salary surveys to ensure that the
reward package remains competitive in the market place. They encourage
continuous discussion; encourage regular review of employees performance and

[34]

development. This provides feedback to the staff about how they are doing. The
management links this to both financial and non-financial recognition.
In addition to this, the bank 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 + Rs. 5000 as cash prize

Surprise Award

Best Performer Award

Service Quality Award

YES (Year of Excellent Services) Award

Quality of Work Life

This means a job that not only is reasonably safe but also for which the pay is
equitable. At Standard Chartered Bank every employee in confident of his job
security and has the assurance that he would remain on the job for the agreed
period. In addition to this, the workload is equitable divided between the
employees and therefore, they work with peace of mind and tranquility, resulting in
the overall enhanced performance of the employees.
Mutual Commitment
Both the employees and the management try to meet the common objectives. They
coordinate their activities to ensure that they are heading towards achieving the
established goals and meeting the set targets within the specified time frame.
Mutual trust
At Standard Chartered Bank prevails an environment of confidence and mutual
trust? The documented employment policies are honestly implemented to the
satisfaction of both management and employees.
Performance Appraisal
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At Standard Chartered Bank the performance appraisal are in respect of the five
Ws that include: Who, What, Why, When and Where of performance appraisal.
Who: All employees work under the supervision of managers. Therefore, the
manager is the best person to do performance appraisal of his subordinates.
What: The appraisal at the organization includes appraisal of current performance
as well as the future potential. It also includes evaluation of human traits such as
behaviors, interaction with other staff members etc.
Why: It is concerned with creating and maintaining a satisfactory level of
performance of employee in the present job, highlighting his needs and potential
for personal growth.
When: It is carried out on yearly basis. The manager uses good work as
opportunity to provide positive thrust and uses poor work as a basis for training.
Where: The performance appraisal is done in a cordial and friendly environment.
Approach of Measuring Performance
The performance of the employees can be determined by making an overall
comparison among individuals performance. Hence a performance measurement
system is developed that incorporates a tool for measuring performance.
Appraising Employee Performance
Individual Performance Management:
A longstanding question that Standard Chartered Bank and many other
organization are still grappling with is whether and how to reward good
performance (or, conversely, how to deal with persistent poor performers). One
approach used by the bank is to make salary increments or progression on the pay
scale conditional on good performance.
Performance Management at Senior Levels
Typically, performance management systems for senior officials include elements
additional to performance-pay, such as time-limited contractual appointments. The
Bank has adopted this approach. Key features of its system include the following:

[36]

Senior officials are recruited to a unified career structure known as Grade A, which
incorporates most top-level positions.
On the basis of evaluation, the senior position employees are paid a performance
bonus.

SWOT Analysis of Indian Banks in HR Context

Strengths

High skilled personnel in middle

and low level in the banks.
Aggression towards the
development of the existing
standards.
Strong regulatory impact by central
bank to all banks for
implementation.

Weaknesses

Presence of more number of smaller

banks that would likely to be
impacted adversely.
Poor compensation system
Poor talent management

Presence of intellectual capital to

face the change in implementation
with good quality.

Opportunities

Poor technology infrastructure

Availability of fresh talent to

strengthen the bank operations.
Increasing risk manage expertise
Need significant connection among
business, credit & risk
manangement and information
technology

Threats

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Inability to meet additional capital

requirements
Huge investment in technologies
Entrance of foreign banks to
capture talent HR
Increasing the cost of human capital

Facing Global Challenges

While the globalization bug has bitten Indian organizations till about a decade,
several global MNCs have been managing a global pool of employees and have
therefore implemented a number of best practices in this area.
Here are some common best practice themes in managing an international talent
pool
1. Commit strongly to developing leaders with global outlook & capability
a. Set the tone from the top: Organizations betting global clearly establish that

international exposure is a key ingredient for success in climbing the corporate

ladder, e.g. P & G & Eli Lily ensure that their top executives have at least one
international assignment. Colgate-Palmolive, PepsiCo and GE have a regular pool
of Global Expatriates who build critical experiences outside their home country as
part of their Leadership Development Program.
b. Invest in creating international cadre: Banks run a program for International
Officers (IOs) that includes a 9-week residential training with emphasis on core
values, five-year rotation through five areas of commercial banking in several
countries and new postings every 2-3 years in an increasingly challenging
environment.
c. Access the best talent pool, regardless of source: banks uses its HRIS to seek
out internal candidates for overseas assignments and develops case studies to be
[38]

used in university training programs. They maintain the right to transfer top talent
when negotiating joint ventures and has a mini-MBA program for Polish joint
venture.
2. Ensure rapid deployment of international managers to seize opportunities
a. Build mobility explicitly into value proposition: Banks set mobility expectations
with their IOs from Day 1 and are managed as a corporate resource pool. They also
create cross-border teams to solve problems.
b. Remove barriers to mobility: Some banks have a spouse assistance program.
Shell has programs like Spousal Employment Program and education allowance
for children.
c. Use bundled skills approach: Carrefour, the French retail giant develops stores
in new emerging markets by sending in a team that stays on site till the operation is
on its feet and then moves to a new site. HSBC dispatched a high potential cross
functional team to spend 3 years setting up operations in China.
3. Allay fears
a. Balance tenure with motivation: ABN Amro does not repatriate managers until
theyve had a chance to show impact. Several organizations maintain motivation
through frequent senior leaders interaction.
b. Build connectivity with broader organization: HDFC assigns a senior home
office mentor who periodically touches base to provide news about events in home
country and offers career advice. ABN Amro uses the corporate intranet to
stimulate communication among expatriates

[39]

c. Ensure smooth and transparent repatriation: Komatsu has a return ticket

policy an assurance that the company views international assignments as a
broadening experience and that returning expats have a job waiting for them in
Japan.

Conclusion
Today, banks focus on designing and delivering processes, programs and services
to attract, develop and retain top talent. Utilizing the latest technologies, HR team
has launched sophisticated online systems that provide the employees with details
on benefits, compensation, special programs and internal job opportunities. As a
global employee population continues to grow, these cutting-edge activities are
increasingly important to the ability to deliver world-class HR solutions.

[40]

[41]

BIBLOGRAPHY:

WWW.GOOGLE.COM
WWW.WIKI.COM
WWW.VIPULPRAKASHAN.COM
WWW.STANDARDCHARTERED.COM

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