GURU NANAK COLLEGE OF ARTS, SCIENCE & COMMERCE

G.T.B. NAGAR,
SION,
MUMBAI - 400037.

A PROJECT REPORT ON
HUMAN RESOURCE MANAGEMENT IN PUBLIC
AND PRIVATE SECTOR BANKS
IN PARTIAL FULFILLMENT FOR
BACHELOR OF BANKING & INSURANCE

SUBMITED BY
PAVITRA DEVI SOKKALINGAM
ROLL NO. 04
TYBBI (SEMESTER V)

SUBMITTED TO
UNIVERSITY OF MUMBAI
ACADEMIC YEAR
2015 2016

UNDER THE GUIDANCE

OF
MISS. S.SUDHA

ACKNOWLEDGEMENT

I would first thanks to Mumbai University for introducing the Bachelor of

Banking & Insurance course. There by giving us a platform to conduct this study
that has helped us to gain practical knowledge about the course.
I would like to extend my thanks to our Principal Dr. Vijay Dabolkar for
their constant efforts to conduct this course smoothly.
I would also like to extend my heartfelt thanks to course coordinator, my
parents, Librarian and friends for their constant support and encouragement

Date:
Place: Mumbai

Signature of Student

DECLARTION

I am Pavitra Devi Sokkalingam the student of Guru Nanak College of Arts,

Science & Commerce studying in T.Y. (Bachelor of Banking & Insurance)
Semester-V. Hereby declare that I have completed this Project on Human
Resources Management in Public and Private Sector Banks in the academic
year 2015-16.
This information submitted is the true & original to the best of my
knowledge.

Date:
Place: Mumbai

Signature of Student
(PAVITRA DEVI SOKKALINGAM)

CERTIFICATE
Guru Nanak College of Arts, Science & Commerce

This is to certify that Pavitra Devi Sokkalingam of T.Y. (Bachelor of Banking and
Insurance) Semester-V (Year 2015-16) has successfully completed the Project on
Human Resources Management in Public and Private Sector Banks under
the guidance of Miss S. Sudha.

Signature of Project Guidance

Signature of Principal

Signature of coordinator

Signature of External Examiner

INDEX

Sr.no

Topic

Page no

1.

Introduction to Bank

07

2.

The Structure of Banking System in India

09

3.

Functions of Banks

13

4.

Introduction to Human Resource Management

21

5.

Human Resource Management

24

6.

Objectives of Human Resource Management & Nature of

26

Human Resource Management

7.

Advantages / benefits / Significance / importance / need of

27

Human Resource Management

8.

Scope of Human Resource Management

29

9.

Human Resource Management Practices in Selected Public

32

and Private Sector Bank

10.

Human Resource Management in Banks

34

11.

Responsibilities of Human Resource Management in Banks

35

12.

Current Challenges Faced by Banks in Human Resources

36

Management
13.

Challenges Faced by Banking Industry

39

14.

Suggestion

45

15.

Human Resource Management in Public and Private Sector

47

Banks
5

16.

Human Resource Management Practices

48

17.

Suggestion

51

18.

Human Resource Management in SBI Bank

53

19.

Case Study of Human Resource Management in SBI Bank

55

20.

Human Resource Management in ICICI Bank

59

21.

Case Study of Human Resource Management in ICICI Bank

61

22.

Comparative Analysis

69

23.

Suggestions

70

24.

Conclusion

73

25.

Bibliography and Webliography

74

 Introduction of Bank:
Finance is the life blood of trade, commerce and industry. Now-a-days,
banking sector acts as the backbone of modern business. Development of any
country mainly depends upon the banking system.
The term bank is either derived from old Italian word banca or from a
French word banque both mean a Bench or money exchange table. In olden days,
European money lenders or money changers used to display coins of different
countries in big heaps (quantity) on benches or tables for the purpose of lending or
exchanging.
A bank is a financial institution which deals with deposits and advances
and other related services. It receives money from those who want to save in the
form of deposits and it lends money to those who need it.

Characteristics / Features of a Bank:

Dealing in Money:
Bank is a financial institution which deals with other peoples money i.e.
money given by depositors.
Individual / Firm / Company:
A Bank may be a person, firm or a company. A banking company means a
company which is in the business of banking.
Acceptance of Deposit:
A bank accepts money from the people in the form of deposits which are
usually repayable on demand or after the expiry of a fixed period. It gives safety
to the deposits of its customers. It also acts as custodians of funds of its
customers.
Giving advances:
A bank lends out money in the form of loans for those who require it for
different purposes.
7

 Payment and Withdrawal:

A bank provides easy payment and withdrawal facility to its customers in the
form of cheques and drafts. It also brings bank money in circulation. This
money is in the form of cheques, drafts, etc.
Agency and Utility Services:
A bank provides various banking facilities to its customers. They include
general utility services and agency services.
Profit and Service Orientation:
A bank is a profit seeking institution having service oriented approach.
Ever increasing Functions:
Banking is an evolutionary concept. There is a continuous expansion and
diversification as regards the functions, services and activities of a bank.
Connecting Link:
A bank acts as a connecting link between borrowers and lenders of money.
Banks collect money from those who have surplus money and give the same to
those who are in need of money.
Banking Business:
A banks main activity should be to do business of banking which should
not be subsidiary to any other business.
Name Identity:
A bank should always add the word bank to its name to enable people
to know that it is a bank and that it is dealing in money.
Electronic banking and E-banking:
Electronic banking is offering improved services to the customers are as
follows:

ATM Cards

Credit Cards

Electronic transfer of money

8

 THE STRUCTURE OF BANKING SYSTEM IN INDIA AND OTHER

DETAILS ( WITH DIAGRAMS )

The structure of banking system in India is significantly different from other

countries. It can be classified as given below:

1. Reserve Bank of India:

Reserve bank of India is the Central Bank of our country. It was established on
1st April 1935 under the RBI Act of 1934. It holds the apex position in the
banking structure. RBI performs various developmental and promotional
functions. It has given wide powers to supervise and control the banking
structure. It occupies the pivotal position in the monetary and banking structure
of the country. In many countries central bank is known by different names.

For example, Federal Reserve Bank of U.S.A, Bank of England in U.K, and
Reserve Bank of India in India, Central bank is known as a bankers bank. They
have the authority to formulate and implement monetary and credit policies. It
is owned by the government of a country and has the monopoly power of
issuing notes.

2. Commercial Banks:

Commercial bank is an institution that accepts deposit, makes business loans

and offer related services to various like accepting deposits and lending loans
and advances to general customers and business man.

These institutions run to make profit. They cater to the financial requirements of
industries and various sectors like agriculture, rural development, etc. it is a
profit making institution owned by government or private of both.

Commercial bank includes public sector, private sector, foreign banks and
regional rural banks:
a. Public sector banks:
It includes SBI, seven (7) associate banks and nineteen (19) nationalized
banks. Altogether there are 27 public sector banks. The public sector accounts for
90 percent of total banking business in India and State Bank of India is the largest
commercial bank in terms of volume of all commercial banks.
b. Private sector banks:
Private sector banks are those whose equity is held by private shareholders.
For example, ICICI, HDFC etc. Private sector bank plays a major role in the
development of Indian banking industry.
c. Foreign Banks:
Foreign banks are those banks, which have their head offices abroad. CITI
bank, HSBC, Standard Chartered etc. are the examples of foreign bank in India.

10

d. Regional Rural Bank (RRB):

These are state sponsored regional rural oriented banks. They provide credit
for agricultural and rural development. The main objective of RRB is to develop
rural economy. Their borrowers include small and marginal farmers, agricultural
labourers, artisans etc. NABARD holds the apex position in the agricultural and
rural development.
3. Co-operative Bank:
Co-operative bank was set up by passing a co-operative act in 1904. They
are organized and managed on the principal of co-operation and mutual help. The
main objective of co-operative bank is to provide rural credit.
The cooperative banks in India play an important role even today in rural cooperative financing. The enactment of Co-operative Credit Societies Act, 1904,
however, gave the real impetus to the movement. The Cooperative Credit Societies
Act, 1904 was amended in 1912, with a view to broad basing it to enable
organization of non-credit societies.
Three tier structures exist in the cooperative banking:
i. State cooperative bank at the apex level.
ii. Central cooperative banks at the district level.
iii. Primary cooperative banks and the base or local level.
4. Scheduled and Non-Scheduled banks:
A bank is said to be a scheduled bank when it has a paid up capital and
reserves as per the prescription of RBI and included in the second schedule of RBI
Act 1934. Non-scheduled bank are those commercial banks, which are not
included in the second schedule of RBI Act 1934.
5. Development banks and other financial institutions:
A development bank is a financial institution, which provides a long term
funds to the industries for development purpose. This organization includes banks
like IDBI, ICICI, IFCI etc. State level institutions like SFCs SIDCs etc. It also
includes investment institutions like UTI, LIC, and GIC etc.
11

 Commercial banks:
Banks are those institutions which conduct the business purely on profit
motive. Banks receive surplus money from the people who are not using it and
lend to those who need it for productive purpose. When we speak of a bank, we
generally mean a commercial bank. Commercial banks are those institutions
which conduct the business purely on profit motive. Commercial banks receive
surplus money from the people who are not using it and lend to those who need it
for productive purpose.
A commercial bank is a dealer in short and medium-term credit. It borrows
money from a group of people at a lower rate of interest and lends to the other
group of people at some higher rate of interest. The difference between the two
rates of interest is the profit of the bank.

1. Definition Of A Commercial Bank:

Some important definitions of commercial bank are given below.
1.1. Professor G. Crowther:
"A bank is a firm which collects money from those who have it spare. It lends to
those who require it."
1.2. Professor Parking:
"A bank is a firm that takes deposits from households and firms and makes loans to
other household and firms.

12

 FUNCTIONS OF BANKS - IMPORTANT BANKING FUNCTIONS AND

SERVICES
What are the Functions of Banks? Diagram : The functions of banks are
briefly

highlighted

in

following

Diagram

or

Chart.

These functions of banks are explained in following paragraphs of this article.

A. Primary Functions of Banks:
The primary functions of a bank are also known as banking functions. They are the
main functions of a bank.
These primary functions of banks are explained below.
1. Accepting Deposits:
The bank collects deposits from the public. These deposits can be of
different types, such as:a. Saving Deposits
b. Fixed Deposits
c. Current Deposits
d. Recurring Deposits
13

a. Saving Deposits:
This type of deposits encourages saving habit among the public. The rate of
interest is low. At present it is about 4% p.a. Withdrawals of deposits are allowed
subject to certain restrictions. This account is suitable to salary and wage earners.
This account can be opened in single name or in joint names.

b. Fixed Deposits:
Lump sum amount is deposited at one time for a specific period. Higher rate
of interest is paid, which varies with the period of deposit. Withdrawals are not
allowed before the expiry of the period. Those who have surplus funds go for fixed
deposit.

c. Current Deposits:
This type of account is operated by businessmen. Withdrawals are freely
allowed. No interest is paid. In fact, there are service charges. The account holders
can get the benefit of overdraft facility.

d. Recurring Deposits:
This type of account is operated by salaried persons and petty traders. A
certain sum of money is periodically deposited into the bank. Withdrawals are
permitted only after the expiry of certain period. A higher rate of interest is paid.

14

2. Granting of Loans and Advances:

The bank advances loans to the business community and other members of
the public. The rate charged is higher than what it pays on deposits. The difference
in the interest rates (lending rate and the deposit rate) is its profit.
The types of bank loans and advances are:a. Overdraft
b. Cash Credits
c. Loans
d. Discounting of Bill of Exchange

a. Overdraft:
These types of advances are given to current account holders. No separate
account is maintained. All entries are made in the current account. A certain
amount is sanctioned as overdraft which can be withdrawn within a certain period
of time say three months or so. Interest is charged on actual amount withdrawn. An
overdraft facility is granted against a collateral security. It is sanctioned to
businessman and firms.

b. Cash Credits:
The client is allowed cash credit upto a specific limit fixed in advance. It can
be given to current account holders as well as to others who do not have an account
with bank. Separate cash credit account is maintained. Interest is charged on the
amount withdrawn in excess of limit. The cash credit is given against the security
of tangible assets and / or guarantees. The advance is given for a longer period and
a larger amount of loan is sanctioned than that of overdraft.

15

c. Loans:
It is normally for short term say a period of one year or medium term say a
period of five years. Now-a-days, banks do lend money for long term. Repayment
of money can be in the form of installments spread over a period of time or in a
lumpsum amount. Interest is charged on the actual amount sanctioned, whether
withdrawn or not. The rate of interest may be slightly lower than what is charged
on overdrafts and cash credits. Loans are normally secured against tangible assets
of the company.

d. Discounting of bill of exchange:

The bank can advance money by discounting or by purchasing bills of
exchange both domestic and foreign bills. The bank pays the bill amount to the
drawer or the beneficiary of the bill by deducting usual discount charges. On
maturity, the bill is presented to the drawee or acceptor of the bill and the amount
is collected.

16

B. Secondary Functions of Banks:

The bank performs a number of secondary functions, also called as nonbanking functions.
These important secondary functions of banks are explained below.
1. Agency Functions:
The bank acts as an agent of its customers. The bank performs a number of
agency functions which includes:a. Transfer of Funds
b. Collection of Cheques
c. Periodic Payments
d. Portfolio Management
e. Periodic Collections
f. Other Agency Functions

a. Transfer of Funds:
The bank transfer funds from one branch to another or from one place to
another.

b. Collection of Cheques:
The bank collects the money of the cheques through clearing section of its
customers. The bank also collects money of the bills of exchange.

c. Periodic Payments:
On standing instructions of the client, the bank makes periodic payments in
respect of electricity bills, rent, etc.

17

d. Portfolio Management:
The bank also undertakes to purchase and sell the shares and debentures on
behalf of the clients and accordingly debits or credits the account. This facility is
called portfolio management.

e. Periodic Collections:
The bank collects salary, pension, dividend and such other periodic
collections on behalf of the client.

f. Other Agency Functions:

They act as trustees, executors, advisers and administrators on behalf of its
clients. They act as representatives of clients to deal with other banks and
institutions.

18

2. General Utility Functions:

The bank also performs general utility functions, such as:a. Issue of Drafts, Letter of Credits, etc.
b. Locker Facility
c. Underwriting of Shares
d. Dealing in Foreign Exchange
e. Project Reports
f. Social Welfare Programmes
g. Other Utility Functions

a. Issue of Drafts and Letter of Credits:

Banks issue drafts for transferring money from one place to another. It also
issues letter of credit, especially in case of, import trade. It also issues travelers
cheques.

b. Locker Facility:
The bank provides a locker facility for the safe custody of valuable
documents, gold ornaments and other valuables.

c. Underwriting of Shares:
The bank underwrites shares and debentures through its merchant banking
division.

d. Dealing in Foreign Exchange:

The commercial banks are allowed by RBI to deal in foreign exchange.

19

e. Project Reports:
The bank may also undertake to prepare project reports on behalf of its
clients.

f. Social Welfare Programmes:

It undertakes social welfare programmes, such as adult literacy programmes,
public welfare campaigns, etc.

g. Other Utility Functions:

It acts as a referee to financial standing of customers. It collects
creditworthiness information about clients of its customers. It provides market
information to its customers, etc. It provides travellers cheque facility.

20

 INTRODUCTION OF HUMAN RESOURCE MANAGEMENT:

Human resource management (HRM or simply HR) is a function in
organizations designed to maximize employee performance in service of an
employer's strategic objectives. HR is primarily concerned with the management of
people within organizations, focusing on policies and on systems. HR departments
and units in organizations typically undertake a number of activities, including
employee recruitment, "training and development", performance appraisal, and
rewarding (e.g., managing pay and benefit systems). HR also concerns itself
with industrial relations, that is, the balancing of organizational practices with
requirements arising from collective bargaining and from governmental laws. HR
is a product of the human relations movement of the early 20th century, when
researchers

began

documenting

ways

of

creating business

value through

the strategic management of the workforce. The function was initially dominated
by transactional work, such as payroll and benefits administration, but due
to globalization, company consolidation, technological advances, and further
research, HR as of 2015 focuses on strategic initiatives like mergers and
acquisitions, talent

management, succession

planning, industrial and labor

relations, and diversity and inclusion.

In startup companies, trained professionals may perform HR duties. In larger
companies, an entire functional group is typically dedicated to the discipline, with
staff specializing in various HR tasks and functional leadership engaging in
strategic decision-making across the business. To train practitioners for the
profession, institutions of higher education, professional associations, and
companies themselves have established programs of study dedicated explicitly to
the duties of the function. Academic and practitioner organizations likewise seek to
engage and further the field of HR, as evidenced by several field-specific
publications. HR is also a field of research study that is popular within the fields of
management and industrial/organizational psychology, with research articles
appearing in a number of academic journals, including those mentioned later in this
article.
In the current global work environment, most companies focus on
lowering employee turnover and on retaining the talent and knowledge held by
their workforce. New hiring not only entails a high cost but also increases the risk
of a newcomer not being able to replace the person who worked in a position
21

before. HR departments strive to offer benefits that will appeal to workers, thus
reducing the risk of losing corporate knowledge.

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.

Why name human resource management?

Human: refer to the skilled workforce in the organization.
Resource: refer to limited availability or scarce.
Management: refer to maximize or proper utilization and make best use of
limited and a scarce resource.

Altogether, human resource management is the process of proper and maximize

utilization of available limited skilled workforce. The core purpose of the human
resource management is to make efficient use of existing human resource in the
organization. The Best example at present situation is, construction industry has
been facing serious shortage of skilled workforce. It is expected to triple in the next
decade from the present 30 per cent, will negatively impact the overall productivity
of

the

sector,

warn

industry

experts.

Every organizations desire is to have skilled and competent people to make their
organization more effective than their competitors. Humans are very important
assets for the organization rather than land and buildings, without employees
(humans) no activity in the organization can be done. Machines are meant to
produce more goods with good quality but they should get operated by the human
only.
22

"You must treat your employees with respect and dignity because in the most
automated factory in the world, you need the power of human mind. That is what
brings in innovation. If you want high quality minds to work for you, then you
must protect the respect and dignity. "
---Mr. N.R. Narayana Murthy, Chairman Emeritus, Infosys Ltd >>.

Our progress as a nation can be no swifter than our progress in education. The
human mind is our fundamental resource. - John F. Kennedy.

Great Quotations:
The greatest tragedy in America is not the destruction of our natural resources,
though that tragedy is great. The truly great tragedy is the destruction of our human
resources by our failure to fully utilize our abilities, which means that most men
and women go to their graves with their music still in them. - Oliver Wendell
Holmes.
The human mind is our fundamental resource. - John F. Kennedy.

23

 HUMAN RESOURCE MANAGEMENT:

For any organization to function effectively, it must have resource of men
(Human Resource), money, materials and machinery. The resources by themselves
cannot fulfill the objectives of an organization, they need to be collected,
coordinated and utilized through human resources. And, the effective management
of human resources is also vital. Hence, Human Resource Management (HRM) has
emerged as a major function in organizations. Human Resource Management is the
organizational function that deals with issues related to people such
as compensation, hiring, performance

management,

organization

development, safety, wellness, benefits, employee motivation, communication,

administration, and training.
The administrative discipline of hiring and developing employees so that
they become more valuable to the organization.
Human Resource management includes:
1. Conducting job analyses,
2. Planning personnel needs, and recruitment,
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.

The ten "Cs" of human resources management are: cost effectiveness,

competitive, coherence, credibility, communication, creativity, competitive
advantage, competence, change, and commitment. The ten "Cs" framework was
24

developed by Alan Price in his book "Human Resource Management in a Business

Context".

The HR Director is a top-level manager responsible for the administration

of all human resource activities and policies. The director oversees compensation,
benefits, staffing, affirmative action, employee relations, health and safety, and
training/development functions. They also supervise professional human resources
staff.
Definitions:
Many great scholars had defined human resource management in different ways
and with different words, but the core meaning of the human resource
management deals with how to manage people or employees in the
organization.
Edwin Flippo defines - HRM as planning, organizing, directing,
controlling

of

procurement,

development,

compensation,

integration,

maintenance and separation of human resources to the end that individual,

organizational and social objectives are achieved.

The National Institute of Personal Management (NIPM) of India has

defined human resources personal management as that part of management
which is concerned with people at work and with their relationship within an
enterprise. Its aim is to bring together and develop into an effective organization
of the men and women who make up enterprise and having regard for the well
being of the individuals and of working groups, to enable them to make their
best contribution to its success.
According to Decenzo and Robbins, HRM is concerned with the people
dimension in management. Since every organization is made up of people,
acquiring their services, developing their skills, motivating them to higher
levels of performance and ensuring that they continue to maintain their
commitment to the organization is essential to achieve organsational objectives.
This is true, regardless of the type of organization government, business,
education, health or social action.

25

 OBJECTIVES OF HUMAN RESOURCE MANAGEMENT:

1. Societal objective: To be socially responsible to the needs and challenges of

society while minimizing the negative impact of such demands upon the
organization. The failure of organizations to use their resources for society's
benefit may result in restrictions. For example, societies may pass laws that
limit human resource decisions.

2. Organizational objective: To recognize that HRM exists to contribute to

organizational effectiveness. HRM is not an end in itself; it is only a means to
assist the organization with its primary objectives. Simply stated, the
department exists to serve the rest of the organization.

3. Functional objective: To maintain the department's contribution at a level

appropriate to the organizations needs. Resources are wasted when HRM is
more or less sophisticated than the organization demands. A department's level
of service must be appropriate for the organization it serves.

4. Personal objective: To assist employees in achieving their personal goals, at

least insofar as these goals enhance the individual's contribution to the
organization. Personal objectives of employees must be met if workers are to be
maintained, retained and motivated. Otherwise, employee performance and
satisfaction may decline, and employees may leave the organization.

NATURE OF HUMAN RESOURCE MANAGEMENT:

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.

26

 ADVANTAGES / BENEFITS / SIGNIFICANCE / IMPORTANCE /

NEED OF HUMAN RESOURCE MANAGEMENT:

I emphasize this - no matter how good or successful you are or how clever or
crafty, your business and its future are in the hands of the people you hire.
--- Akio Morita (Late) (Businessman and co-founder of Sony Corporation. Japan)
Ref: The Book: MADE IN JAPAN. Page.No.145

Human Resource Management becomes significant for business organization

due to the following reasons.

Objective: Human Resource Management helps a company to achieve its

objective from time to time by creating a positive attitude among workers.
Reducing wastage and making maximum use of resources etc.

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.

27

 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 people for the future.

Allocating

the

jobs

to

the

right

person:

If

proper recruitment and selection methods are followed, the company will be
able to select the right people for the right job. When this happens the number
of people leaving the job will reduce as the will be satisfied with their job
leading to decrease in labour turnover.

28

 SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of Human Resource Management refers to all the activities that
come under the banner of Human Resource Management. These activities are as
follows.

Human resources 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.
29

 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 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.

30

 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.
Industrial relations: Another important area of Human Resource
Management is maintaining co-ordinal relations with the union members.
This will help the organization to prevent strikes lockouts and ensure smooth
working in the company.

The Human Resource Officer is responsible for providing support in the various
human resource functions, which include recruitment, staffing, training and
development, performance monitoring and employee counseling.

31

 HUMAN RESOURCE MANAGEMENT PRACTICES IN SELECTED

PUBLIC AND PRIVATE SECTOR BANKS

I. INTRODUCTION:

The study of human resource management practice has been an important and
critical area in management and organizational performance from last several years
especially in the banking industry. Influence of Human Resource Management
practices on organizational performance has been an important area of research in
past 25 years indicating positive relationship between HR practices and
organizational performance. Human resource management (HRM) practices are
being increasingly treated as dependent rather than independent variables in the
olden days, management gurus and researchers were involved in exploring how
HRM practices affected employee performance, and overall bank performance.
The banking industry, one of the major segments of the financial system plays a
crucial role in the economic and social development of a country. A strong and
healthy Banking system is indispensable in a modern society as a financial
intermediary and occupies a unique position in a nations economy. Indian banking
sector has been passing through different phases such as pre-nationalization, postnationalization and post liberalization phase.

II. PUBLIC SECTOR BANKS:

Public sector banks are those banks that are owned by the government. The
government owns these banks. In India 20 banks were nationalized in 1969 and
1980 respectively. Social welfare is there main objective of these banks. They are
divided into two groups i.e. Nationalized Banks and State Bank of India and its
associates. Among them, there are 19 nationalized banks and 8 State Bank of India
associates. Public Sector Banks dominate deposits and advances in the banking
industry. Public Sector banks dominate the commercial banking scenario in India.
These public sector banks can be further classified into:
1) State Bank of India
2) Nationalized banks
3) Regional Rural Banks

32

III. PRIVATE SECTOR BANKS:

These banks are those banks that are owned and run by private sector. An
individual has control over these banks in proportion to the shares of the banks
held by him. Private sector banks came into existence to supplement the
performance of Public sector banks and serve the needs of the economy better. As
the public sector banks were merely in the hands of the government, banks had no
incentive to make profits and improve the financial. The main difference is only
that public sector banks follow the RBI Interest rules strictly but private sector
banks can effect some changes but only after approval from the RBI!

IV. WHY HUMAN RESOURCE MANAGEMENT IS IMPORTANT FOR

BANKS:

Human Resource Management is important for banks because banking is a service

industry. Management of people and risk are two key challenges faced by banks.
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 very survival of the banks would depend on customer
satisfaction. Values need to be emphasized through concrete actions on the ground
and it would be the banks human resource that would deliver this.

33

 HUMAN RESOURCE MANAGEMENT IN BANKS

The Classification of the Indian Banks into broad groups such as public sector, old
private sector, new private sector, foreign, regional rural banks and cooperatives
are largely on the basis of ownership pattern. It is also well known that the
business mix, delivery channels and IT strategies of these organizations vary
substantially. What is little known but of greater importance is that each of these
banks follows very distinct HR practices which have contributed, substantially, to
the business processes.
HUMAN RESOURCE MANAGEMENT IN PUBLIC SECTOR BANKS
In the recent times, the contours of HR function in public sector banks are slowly
but definitely changing. One could say that these banks are discovering the HR
function and it is hoped that these banks will fast catch up with others. It may be
recalled that, in a controlled environment and to meet with the rapid branch
expansion since 70s- Public Sector Banks (PSBs) have adopted HRM practices
similar to that of Government departments. Herein HRM did not have a direct role
in business development but was more concerned with centralized recruitment to
staff and providing them across the country.
HUMAN RESOURCE MANAGEMENT IN PRIVATE SECTOR BANKS
The HR function has practiced by private banks is effectively involved in the
identification of specific skills that each job warrants and recruiting suitable staff
by every way possible. In these banks, recruitment is a continuous process with a
strong focus on getting the right person for the right job by offering appropriate
compensation, incentives and designation. There is a great energy spent in keeping
the turnover low and offering appropriate training inputs. Possibly there are as
many pay structures as there are employees. More importantly, HRM has a role in
monitoring and mentoring the employee. There are no routine transfers. Rather
people are recruited in different geographical locations and different levels.
Technology has helped in centralizing the back office and other functions such that
service can be provided from a distance. These institutions adopt a proactive
performance appraisal system but still short of 360 Degree appraisals. Their
training process is concerned with both skill building and motivating. It should,
however be said that the demand for professionals on account of growth of Indian
Business is such that the efforts of HRM have not helped it from completely
staving off staff turnover in the ranks.
34

 RESPONSIBILITIES OF THE HUMAN RESOURCE MANGEMENT

DEPARTMENT IN BANKS
Role:
The role of the Human Resource Department is to create the climate and
conditions in which management throughout the Bank will be enabled to
optimize the individual and collective contributions of all employees to the
short and long term success of the Bank.
Responsibilities:
To be the principal sponsor & guardian of HR policies in the Bank.
To propose and obtain agreement on changes to these policies which have been
agreed are being implemented throughout the Bank.
To contribute fully to the task of meeting the business challenges which the
bank has to face by supporting Branch / Unit Managers in continuously
developing the potential of employees and in creating conditions in which all
the employees are motivated to meet the objectives of the Bank.
To continuously monitor the Banks strategies to ensure that HR policies are
appropriate and that employees numbers and skills are fully supportive of such
strategies.
To deliver a full range of personnel services in support of line management.
These services include manpower planning, recruitment/transfer, remuneration,
training and employee welfare.
To support line management in their day-to-day management of the workforce
by providing advice and consultancy on personnel and performance
management issues.

35

 CURRENT

CHALLENGES

FACED

BY

BANKS

IN

HUMAN

RESOURCE MANAGEMENT
Effective work force:
A time-consuming and hectic job is to hunt the right talent. Higher the
professional value of the vacancy, tougher is the search. Identifying the right
stuff followed by negotiation is the element which makes the job tough for the
employee. Banks are keenly interested to fill up two types of breeds of
professionals.

Ones who are outstanding professionals with high job hopping attitude--- these
are those who come-in-work for some time and then leave for better prospects.
Others are those who are keenly picked-up, trained and area somehow retained
to be developed as future management within the bank.

Management trainees are a growing popular phenomenon where freshly

qualified business graduates are engaged by banks and a certain percentage of
these well-equipped professionals stay back within the organization to grow
into the footsteps of senior managers.

Banking jobs being apparently lucrative for many, attract a large number of
candidates against advertised vacancies in media creating a large database
management problem. This has been facilitated by specialized hiring agencies
who may take up the job of hiring in case of large number of vacancies.
Right People:
The most difficult agenda of HRM across the banking sector is to retain the
right people. Sudden growth of retail banking and other services has put
pressure on HR Managers in banks to engage more professionals within shorter
span of time thereby attracting manpower in other banks on attractive packages
has made the job market very competing.

A bank in a normal course invests time and money to hire and train the
appropriate workforce for its own operations. This readymade force is often
identified and subsequently picked-up on better terms by others.

36

 Compensation:
How much to pay the right employee and how much to the outstanding
performer. Banks have traditionally followed pay scales with predetermined
increments, salary slabs, bonuses and time based fringe benefits like car and
house advance, gratuity, pensions, etc.

The situation is not the same anymore. An increment of Rs500-800 per annum
is no more a source of attraction for a professional anymore. A basic pay with
traditional formulas of linkage with medical and other facilities has no soothing
today.

A promise of future growth, learning culture and corporate loyalty is out of

dictionary and does not mean anything to this energetic and competent
performer today.

A waiting period of 3-4 years in each cadre haunts the incumbents who strongly
believe in immediate compensation. A freshly hired professional requires a
brand new car or car loan n resuming office quite contrary to his previous breed
Of bankers who would wait for the job seniority to qualify for a car loan.
Job Satisfaction:

Everybody in the bank wants to work in the professional department,

preferential location, city of his own choice and boss of his liking. An
administrative deviation from any of these results in lowered job satisfaction.

Although hiring is normally based on regional requirement matching the area of

activity with that of employees nativity yet other elements like appointment in
the department of choice and preference makes the job of HR manager quite
challenging.

What the HR manager cannot afford is the dissatisfied employee who not only
disrupts the smooth working himself, but also spreads the negativity to others
by his de-motivated attitude.

37

 Morale Boosting:
What has long been overlooked is the morale boosting of the employees by the
organization. Human beings even if satisfied of material wellbeing need to be
appraised and encouraged constantly.

Smart banks have realized this need and have taken steps to keep their work
force motivated through proper encouragement like man of the mouth awards,
repeat get-togethers, conferences, sports events, dinners, company sponsored
travel, reunions, etc. This is the way employees create a feeling of
belongingness.

38

 Challenges Faced By Banking Industry

Here are the ten challenges that the HR function in India faces:

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

2) Training and development of human resource to match ever changing industry

demands re-quires HR to develop new and innovative ideas that suit individual
as well as industry criteria.

3) 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.

4) 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 longterm 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.
5) Because of cutthroat competition, HR in India also faces the task of building
competitive ad-vantage for the company over national and international
competitors.

6) 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.

7) 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.

39

8) 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.

9) 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 pro-vide such employees with adequate moral support
and assure them of job security on their return.

10) 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.

Meeting HR Challenges:

The banking sector has been growing at a very fast pace in India not only in the
terms of its size but also in terms of the services being provided. With banks
reaching the remote areas in the country one can anticipate positive things like
financial aid to farmers and increased financial awareness. However, with the
increase in size and activities of banks, the number of banks in private sectors has
also increased thereby posing challenges like cost-efficiency, technological
advancement, and credibility related issues. The task before the HR is to develop
strategies that help banks in gaining competitive advantage and encourage
innovation in its products and services.
Managing Human Resource:

Considering the above HR challenges which our Indian banking industry is facing,
we can manage the human resources by proper Planning like
Hiring the right person for the right job
Retaining and Developing
Managing people/ conducting exit interviews

40

 Hiring the Right Person for the Right Job:

In assessing whether the "right person" has been selected for the "right job", the
most prominent theoretical concept that emerges is the concept of "fit". Different
writers emphasize different types of fit. Sekiguchi (2004: 179) in a review of
literature on person-environment fit discusses two types of fit that emerge as the
most prominent types of fit: person job fit and person-organization fit. In pursuing
person-job fit, companies seek to match the job holder's knowledge, skills and
abilities to the requirements of the job. Companies can ascertain personorganization fit by focusing on how well the individual fits with the culture or
values of the company and the individual's capacity to work well with other
company employees.

Banks 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 working alongside an older generation as a
team. Banking, it is a team work and these new situations require cultural
adjustments and therefore, change management.

Retaining and Developing Employees:

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. In this
study some of them for discussion:
Training and Development:

With drastic growth of banks it calls for efficient and well trained staff members to
handle/deal with the consumer needs. Banks are shaping up as financial hub for
their clients to grow in size and well recognized in the world market. To pull
consumers banks are offering traditional with advance services like SMS banking,
41

ATM, internet banking, priority banking, demat. So we can say that it caters to the
need of the bottom to the highest class of society providing something to everyone.
Universal banks have become modern days supermarket extending almost every
facility of banking under one roof.

Banks like Bank of Baroda are conducting Grooming and etiquettes programmes
for front line employees and also for employees selected for overseas posting in
order to improve their service levels and qualitative interaction with customers and
various stakeholders better. SEED (Self efficiency and effectiveness development)
programme being run for frontline staff of the Bank in order to improve their
service skills and servicing efficiency.

In Punjab National Bank, in the light of the large scale human resources gaps
that Bank is likely to face in the next few years need for Succession Policy has
been felt. The Policy envisages mapping of the 'existing pool' against the 'future
requirement' from the projected business figure to ensure that adequate number of
officials are available in the pool and also to foresee the surplus / deficit in the pool
for ascertaining the requirement of succession in a particular vertical. Bank has a
three tier training set up comprising of Central Staff College (CSC) at Delhi at
apex level catering to training needs of Top / Senior / Middle Management Grade
officers, three Regional Staff Colleges (RSCs) located at Belapur Navi Mumbai,
Lucknow and Panchkula for training needs of Senior / Middle /Junior Management officers as well as workman staff and seven Zonal Training Centres
(ZTCs) at Dehradun, New Delhi, Jaipur, Kolkata, Kozhikode, Ludhiana and Patna
looking after the training needs of Middle / Junior Management Grade officers &
Workman Staff. IT Training Centre located at Faridabad caters to the training
needs of officers exclusively in the areas of Information Technology.
Performance Management:
Banking service is one sector where a great degree of attention is being paid to
performance appraisal system. Several of the nationalized banks have changed
their performance appraisal system or are in the process of changing them. In most
of the banks that follows the traditional system, their officers are being assessed on
the following characteristics:
General Intelligence
Job Knowledge
42

 Initiative and resourcefulness

Supervision
Business Capacity
Ability to assess sound
Business propositions
Dependability
Relationship with junior & senior colleagues
Relationship with public
Conduct, manners, Managerial ability
Failures that attracted issue of warning by superiors

Several of the banks also have self-appraisal as a part of performance appraisal,

although mostly such self-appraisal is more of a communication of achievements.
A fair, transparent and objective mechanism for performance management is a
must for all banks because an effective Performance Man-agement System is the
key to talent management and succession planning. RBI is shortly going to
introduce a new Performance Management System that will work on goal setting,
potential appraisal of performers and developing a talent pipeline. With all these
changes 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
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
non-traditional work relations: flexible schedules, contract arrangements, virtual
teams, etc.

Some other HR practices and benefits given to employees:

Gratuity:

HDFC Bank provides for gratuity to all employees. The benefit is in the form of
lump sum payments to vested employees on resignation, retirement, death while in
43

employment or on termination of employment of an amount equivalent to 15 days

basic salary payable for each completed year of service. Vesting occurs upon
completion of five years of service.
Superannuation:

Employees of the Bank, above a prescribed grade, are entitled to receive retirement
benefits under the Banks Superannuation Fund. The Bank contributes a sum
equivalent to 13% of the employees eligible annual basic salary (15% for the
Managing Director, Executive Directors and for certain eligible erstwhile
Centurion Bank of Punjab (eCBoP) staff) to insurance companies, which
administer the fund. The Bank has no liability for future superannuation fund
benefits other than its contribution, and recognizes such contributions as an
expense in the year incurred, as such contribution is in the nature of defined
contribution.
Short Term Employee Benefits:

In State Bank of India the undiscounted amount of short-term employee benefits,

such as medical benefits, casual leave etc. which are expected to be paid in
exchange for the services rendered by employees are recognized during the period
when the employee renders the service.

The Bank operates a Provident Fund scheme. All eligible employees are entitled to
receive benefits under the Banks Provident Fund scheme. The Bank contributes
monthly at determined rate (currently 10% of employees basic pay plus eligible
allowance). These contributions are remitted to a trust established for this purpose
and are charged to Profit and Loss Account. The Bank provides for pension to all
eligible employees. The benefit is in the form of monthly payments as per rules
and regular payments to vested employees on retirement, on death while in
employment, or on termination of employment. Vesting occurs at different stages
as per rules.

44

 SUGGESTIONS

The banking sector has grown from a few institutions primarily involved in deposit
acceptance and trade finance into a complex multi-player markets where large
number of commercial banks, financial institutions and specialized banks are
operating with various product activities. Like many other organized sectors,
banking requires multi-layer manpower for its various requirements of
professionals and support staff. The range may require reasonably educated
security guards on the one hand and a highly educated and trained professional as
head of corporate finance. With liberalization of activities within the banking
sector, for example, more emphasis on consumer and house finance and personal
loans, etc. Banking has turned itself into a more market based business where
banks have expanded their reach more to customers door step in a big way making
banking more practical. This has further highlighted the need for proper
development of man power to run banks efficiently. Smart banks have realized this
need and have taken steps to keep their workforce motivated through proper
encouragement like man of the month award, repeat get-together, conferences,
sports events, dinners, company sponsored travel, reunions, etc.

In spite of all these facilitations there still exist several lacunas in the HRM
practices in banking industry.

Some of the specific suggestions based on survey of literature as well as the group
discussions and survey are given here under:

1) There should be a balanced compromise between organizational need and

individual need. Total insensitiveness to individual preference gives rise to
frustration at some point of time, which as a consequence has a real damaging
effect on the organizational growth itself.

2) While there must be rewards for performance, non-performance must be

punished/ reprimanded. Promotions must be only on merit.

3) There must be uniform, impartial and balanced employee performance review

system. This system in fact needs a total review.
45

4) Enthusiastic and pleasant behaviour of staff to the customer is necessary.

5) There must be a clearly defined system of succession planning and career

growth planning in banks.

6) Attitudinal changes are required at the top level.

7) Human resource Balance Sheet should accompany financial statements.

8) In order to become HRD conscious, the Public Sector Banks should allow
independent functioning of HRD section, where the top person should be himself a
good successful banker, a real HRD person free from any biases.
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9) More openness, transparency in personal matters, high value of human dignity,

people oriented management system, creating belongingness and trust, two-way
communication.

10) Banks should have a system, whereby the training needs of an employee are
identified and are duly fulfilled at every stage of career growth.

11) Have special R & D wings in HRD Department for ongoing in house &
external research development, review and implementation of HRD policies.

12) There should be award schemes administered by prestigious organizations and

Govt. agencies for best HRD policies & Practices amongst Public Sector Banks,
etc.
46

 HUMAN RESOURCE MANAGEMENT IN PUBLIC AND PRIVATE

SECTOR BANKS
Introduction:
At present, Indian banking sector is facing wide variety of opportunities and the
bright future scenario. The changing economic scenario, represented by rapid
process of globalization has brought out all the nations of the world together,
without geographical boundaries for trade and commerce but with great amount of
employment opportunities for individuals. Due to rapid advancement in
information technology and telecommunication in the recent years, the banking
industry has been undergoing rapid changes, reflecting a number of ongoing
reform processes. However, there are certain problems in the Indian Banking
system, which require great attention.
Some of the major problems are:
Continuous accumulation of morass, which hampers the profitability of the
banks.
Accumulation of Non-Performing Assets (NPAs), which threatens capital
adequacy and continuous stability of banks.
Some of the public sector banks are facing heavy over staffing, which reduces
productivity of the banks.
Above all these require a drastic change in the recruitment, training, placement
and promotion policies of the banks. Thus, the main concern is how to remove
legacies of the past and meet the demands and challenges of the new era.

47

 HUMAN RESOURCE MANAGEMENT PRACTICES

Human resources management practices play a very vital role in achieving the
organizations goals and maintain the competitive advantage.

HRM practices refer to organizational activities directed at managing the pool of

human resource and ensuring that the resources are employed towards the
fulfillment of organizational goals (Schuler & Jackson 1987). Human resource
management practices is the management of people within the internal
environment of organizations, comprises the activities, policies, and practices
involved in planning, obtaining, developing, utilizing, evaluating, maintaining, and
retaining the appropriate numbers and skill mix of employees to achieve the
organizations objectives (Appelbaum 2001). Presently organizations are
competing through implementing the unique HRM practices and due to the
globalization organizations adopt the most up-to-date HRM practices in order to
accomplish the organizational goals. Best HRM practices are advantageous for
both employee and employer; it plays an important role in constructive growth of
the organization.

Keeping in view of HRM practices, it is understood that the HRM did not has
direct role in business development but was more concerned with centralized
recruitment to staff. In this context, the review of the study covers the following
most important indicators of HR practices, which were followed by any public
sector bank.
Job analysis:

Job analysis involves collecting information about the characteristics of a job using
one of several methods: observation, interviewing, questionnaires, or more
specialized job analysis methods such as position or functional analysis.
Organizations sometimes use a combination of job analysis methods (Hawthorne,
2004; Mathis & Jackson,
1997). All the Banking authorities reported that they follow a combination of
several methods for job analysis of the employee.
Recruitment and selection:
48

Public Sector Banks follows systematic procedure in recruitment and selection

activities. For Recruitment and Selection these banks follows some standard most
of the cases. The practiced arrangement for selection and recruitment is the
corporate decide what positions will have to fill and how to fill the immediate as
well as future requirements.

This total procedure is designed to cover all positions from bottom to top level.
Indian Public Sector Banks use both methods of recruitment i.e., internal and
external markets. Usually, for clerical and officer posts, external market is used
through advertising etc. On the other hand, the managerial/executive positions are
filled up through promotions and transfers i.e., for higher positions the internal
market is usually relied upon. In some of the PSBs in India, the practice of
recruiting specialists such as technical employees, management trainees etc.
directly from the reputed institutions through campus interviews have been started.
Some banks are also utilizing the services of consultants and employment on
contract basis.
Training and Development:

HRD as one of the major functional area in HRM. Continuing education and
training programmes are essential considerations to enrich their careers and excel
their development. Banking activities and knowledge is ever changing. In order to
cope up with these changes and to develop employees careers all banks
established their own training institute. Those institutes organized different types
of training and development programmes based on the employees need.
Those needs are identified by need assessment activities.Volume-3, Issue-12, Dec-

Training is more in IPSBs because the training system in the banking industry has
a strong structural base, and has capabilities to handle training in large numbers.
The system has also developed several innovative activities in the training area
such as on-location training, manager to messenger programmes. Further the
IPSBs have a good support to training efforts from apex level training institutions
such as National Institute of Bank Management (NIBM), Bankers Training College
(BTC), and College of Agricultural Banking (CAB). The IPSBs have more than
three hundred individual bank level training colleges and training centers.
49

Training is given emphasis by all banks, although not much systematic training
need analysis is carried out. The training colleges conduct training programmes for
relatively junior level bank staff. For most of the senior level training, banks
depend on external agencies, especially foreign training organizations. Training
establishments of some of the bigger banks complain of under utilization.
Performance Appraisal:

Performance appraisal is the systematic, periodic and an impartial rating of the

employees excellence in matters pertaining to his present job and of his
potentialities for a better job.(Edwin B. Flipp).
Public Sector Banks in India give more attention towards performance appraisal in
the organizations. Performance appraisal based on quality of output, potential of
the employee within the organization etc. need to be incorporated across all grade,
cadres and levels. This will not only ensure maximizing productivity, but also go a
long way in motivating star performers aligning with the long-term mission and
vision of banks.
Compensation:

In general, the compensation in Public Sector banks is mostly based on seniority or

work experience. The Indian public sector banks should reward their professionally
qualified employees by scale up-gradation and special increments besides
motivating and encouraging them to acquire new knowledge. Common pay
structures based on number of years of service with the bank put in etc need to be
phased out in a planned manner.

SUGGESTIONS
50

On the basis of review of this study the following suggestions are made for better
HRM practice in the Public sector banks in India:
In the recruitment and selection process of employees, the banks should give
priority to the candidates who has graduate and above degrees in Information
Technology, experience, skills, competencies etc. It is also suggested that
institutional training should provide effective skills to employee. Employees
should be motivated to utilize the material and libraries so that competency gap
would be reduced.
It is necessary for restructuring of salary to motivate employees in particularly
in public sector banks.
To develop human resources, the bank should undertake different human
resource development programmes including continuing education and training,
IT-orientation, career development, etc.
Banks can send bright employees to abroad on fellowship/scholarship for
higher studies and learn new technology in order to attain competence at global
level.
Banks should organize seminars, workshops, conferences, different short
courses, and training programmes on financial matters, current issues, software
up gradation on regular basis that would definitely help to develop
knowledgeable manpower, create awareness and change mental attitudes among
the professionals.
All banks should allocate sufficient budget and sends competent employees to
international conferences and seminars to prepare them for the competitive
knowledge global market.
Human Resource Department is essential to empower the department or
divisions for handling different issues in HRM in banks. The divisions should
be incorporated with well-organized human resource information systems and
modern information technology facilities.
51

 Public sector banks should frequently invite staff for suggestions and their
active participation in meetings in order to encourage and staff satisfaction.
The training colleges conduct training programmes for relatively junior level
bank staff. For most of the senior level training, banks depend on external
agencies, especially foreign training organizations. It is to better to utilize of
bigger banks training institutions even for senior level instead of depending on
external agencies or foreign organizations.
It is suggested that employee potential should be evaluated based on objective
assessment but not on favoritism. Transparency in evaluation and promotion
policy also suggested.

52

 HUMAN RESOURCE MANAGEMENT IN SBI BANK:

State Bank of India is the nation's largest and oldest bank. Tracing its roots
back some 200 years to the British East India Company (and initially established as
the Bank of Calcutta in 1806), the bank operates more than 15,000 branches within
India, where it also owns majority stakes in six associate banks. State Bank
of India (SBI) has more than 80 offices in nearly 35 other countries, including
multiple locations in the US, Canada, and Nigeria. The bank has other units
devoted to capital markets, fund management, factoring and commercial services,
credit cards, and brokerage services. The Reserve Bank of India owns about 60%of
State Bank of India Human Resources Development Department
HRDD Vision

The Vision of the Human Resources Development Department (HRDD) is

essentially to facilitate the Bank to carry out central banking activities, i.e. to create
an enabling environment to enhance the efficiency of the organization. To draw out
from our staff the very best by a system of proper placements, incentives, To create
an atmosphere of trust, a certain security of expectations and feeling that the
organization cares about the well-being and personal aspirations of the staff. This
would help align personal aspirations with professional goals and help enhance
efficiency.

The Mission of HRDD is to create a facilitating environment to enhance the

efficiency of the Bank; to empower the staff so as to draw out the latent potential;
and to catalyze conditions for a more wholesome quality of life on the work
as wells personal front. Functions of to evolve HR policies on Recruitment: For the
decade as a whole, for the SBI group, 25.4% of the staff were officers, 51.0% were
clerks, and 23.6% were subordinate staff. The composition of staff was the same
for the nationalized banks with 27.9% of staff being officers, 50.7% being clerks,
and 21.4% being subordinate staff.

Performance and Potential Appraisal: The promotion to a higher management level

is best thought of through the lens of a tournament model (Lazar and Rosen, 1981)
where the prize in terms of compensation for a position in the hierarchy is fixed in
advance and is independent of absolute performance. In effect, an employee is

53

promoted to the next higher level/grade not because he is good, but because he is
better than everybody else at the current level/grade.

Placement Promotion and Career Progression, Out of Turn Promotion/ Increment

to Sports Person industrial Relations, Deputation / Secondment. Retirement and
Voluntary

Vacation

Motivation,

Training

Establishments,

Mobility

(Transfer/Rotation),Remuneration and Reward Mechanism, Staff Welfare,

Communication Organizational Development, Training and Skills Up gradation
(Policy and Implementation,

Other than policy aspects:

Interface with other institutions, government, central banks, etc. on HRD issues.
To maintain up to date database on human resources in the Bank and undertake
analytical studies and ongoing research on different manpower related issue. To
make ongoing review of the appraisal system in order to make it ineffective tool for
HRD policy management. To install and implement an effective counseling
system. To design career and succession plans. To review and revitalize
the training functions, Summer Placement, Formulate and administer the Staff
Suggestion Scheme, Publication of House Journal, Without Reserve.

54

 CASE STUDY OF HUMAN RESOURCE MANAGEMENT IN SBI BANK

Case Details:
Case Code

HROB007

Case Length

04Pages

Period

2001

Organization

State Bank of India

Pub Date

2001

Teaching Note

Available

Countries

India

Industry

Banking and Finance

Themes: HR Practices and Policies

Issues:
How poor manpower planning led to problems with the bank's VRS

Keywords:
State Bank of India, VRS, developments, Indian public sector bank, SBI, VRS,
reasons, employees, protesting, post-VRS scenario
"They are propagating the VRS in such a manner that the employees are being
compelled to opt for the scheme."
- V.K.Gupta, SBI employee's union leader in December 2000.

55

 VRS TROUBLES:
In February 2001, India's largest public sector bank (PSB), the State Bank of India
(SBI) faced severe opposition from its employees over a Voluntary Retirement
Scheme (VRS). The VRS, which was approved by SBI board in December 2000,
was in response to Federation of Indian Chambers of Commerce and Industry's
(FICCI)1 report on the banking industry. The report stated that the Indian banking
industry was overstaffed by 35%. In order to trim the workforce and reduce staff
cost, the Government announced that it would be reducing its manpower.
Following this, the Indian Banks Association (IBA)2 formulated a VRS package
for the PSBs, which was approved by the Finance ministry.
Though SBI promoted the VRS as a 'Golden Handshake,' its employee unions
perceived it to be a retrenchment scheme. They said that the VRS was completely
unnecessary, and that the real problem, which plagued the bank were NPAs 3. The
unions argued that the VRS might force the closure of rural branches due to acute
manpower shortage. This was expected to affect SBI's aim to improve economic
conditions by providing necessary financial assistance to rural areas. The unions
also alleged that the VRS decision was taken without proper manpower planning.
In February 2001, the SBI issued a directive altering the eligibility criteria for VRS
for the officers by stating that only those officers who had crossed the age of 55
would be granted VRS.

Consequently, applications of around 12,000 officers were rejected. The officers

who were denied the chance to opt for the VRS formed an association SBI VRS
optic Officers' Association to oppose this SBI directive. The association claimed
that the management was adopting discriminatory policies in granting the VRS...

56

 Background Note:
The SBI was formed through an Act of Parliament in 1955 by taking over the
Imperial Bank. The SBI group consisted of seven associate banks:
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Saurashtra
State Bank of Travancore
State Bank of Bikaner & Jaipur.
The SBI was the largest bank in India in terms of network of branches, revenues
and workforce. It offered a wide range of services for both personal and corporate
banking. The personal banking services included credit cards, housing loans,
consumer loans, and insurance. For corporate banking, SBI offered infrastructure
finance, cash management and loan syndication...

The Protests:
The SBI was shocked to see the unprecedented outcry against the VRS from its
employees. The unions claimed that the move would lead to acute shortage of
manpower in the bank and that the bank's decision was taken in haste with no
proper manpower planning undertaken.

They added that the VRS would not be feasible as there was an acute shortage of
officers (estimated at about 10000) in the rural and semi-urban areas where the
branches were not yet computerized. Moreover, the unions alleged that the
management was compelling employees to opt for the VRS. They said that the
threat of bringing down the retirement age from 60 years to 58 years was putting a
lot of pressure on senior bank officials to opt for the scheme...

57

 The Post VRS Days:

According to reports, SBI's total staff strength was expected to come down to
around 2, 00,000 by March 2001 from the pre-VRS level of 2, 33,000 (Refer Table
III). With an average of 5000 employees retiring each year, analysts regarded VRS
as an unwise move. By June 2001, SBI had relieved over 21,000 employees
through the VRS. It was reported that another 8,000 employees were to be relieved
after they attained the retirement age by the end of 2001. Analysts felt that this
would lead to a tremendous increase in the workload on the existing workforce

58

 HUMAN RESOURCE MANAGEMENT IN ICICI BANK:

The achievement of an organization is the result of the combined efforts of each

and every employee. All individuals want to do a good job, and if they are provided with
the proper environment, they will do so. People rarely succeed at anything unless
they enjoy doing it. The Bank has always viewed Human Resource
(HR) Development as a critical activity, as it plays a very important role in culture
building and gives an impetus to the effort put in achieving business goals more
efficiently. A seminar was conducted in January 1999 which enabled the Bank to
establish clearly the link between businesses strategy and human resource strategy.
Accordingly, different kinds of mindsets were worked out to ascertain there
requirement in the staff in the three main lines of business corporate banking, retail
banking and treasury operations. In the foreign banks and private sector banks,
however, there has been growing recruitment amongst the officers' cadre with a
decline in the recruitment of clerical and subordinate staff. Private Banks started
the decade with 24.5% of staff as officers, 54.8% as clerical, and 20.7% as
subordinate staff. By the end of the decade 36.2% of the staff were officers,
45.9%were clerical, and 17.9% were subordinate staff. A new organizational
structure effective April 1, 1999 was implemented successfully with the change
agent role played by the HR Department. Three different job profiles viz.,
customer service and cross selling of products, back office operations and
marketing and sales emerged after the new organizational structure was put in place.
The recruitment process has been fine-tuned through specially devised processes
that identify an individuals degree of customer orientation the principal trait
needed in the banking business. New recruits have been provided training in skill
up gradation and team building and development of an appropriate mindset
for better conduct of banking business. Training programs of shorter duration
were designed for the existing staff, with specific focus on product information,
customer service, cross selling of products and operational excellence. The
promotion process has been designed on the principles of openness and
transparency. Career progression is based on performance of employees being
above an acceptable level with emphasize on those with high business drive
and potential. These exercises are carried out by the Career Development Centre,
which offers a comprehensive competency building program. This process has
been followed for the last 5 years and has been perceived as being fair and credible by the
employee.
59

A high level of performance is rewarded by a system of performance bonus. The

ratio of variable bonus to fixed salary is fairly high to attract and retain the best talent in
the Bank. In the private and foreign banks there are larger pay differentials, fewer
rewards for tenure, and individual incentives are high. Further, to ensure that the
Bank does not lose high performers and to increase the motivation levels and instil a
feeling of ownership, the Bank has introduced an Employee Stock Option Scheme (the
Scheme). The first grant of stock options under the Scheme was made during the
year. The total number of staff of the Bank increased from 891 as on March 31,
1999 to1, 344 as on March 31, 2000. On an average, an employee received 37
hours of training during the year. The Bank conducted 34 internal and 67 external
training programs involving 658 and 198 employees respectively. Further, 22
employees were a part of overseas training programs.

60

 CASE STUDY OF HUMAN RESOURCE MANAGEMENT IN ICICI

BANK

Case Details:
Case Code

HROB157

Case Length

08 Pages

Period

2000-2013

Organization

ICICI Bank

Pub Date

2013

Teaching Note

Not Available

Countries

India

Industry

Banking and Finance

Themes:
Human Resources Management/ Leadership Development/ Mentoring

Issues:
Critically analyze talent management strategies at ICICI Bank.
Understand the mentoring process adopted by Kamath to groom young
employees at the bank.
Understand the need to set up a formal leadership development process at the
bank.
Understand the issues and challenges faced by the mentors while mentoring
employees.

61

 Key Words:
ICICI Bank, Talent management, Leadership talent, Mentoring, Nurturing talent,
Leadership

development,

Performance

appraisal,

Human

capital,

Talent

assessment, Leadership pipeline, Entrepreneur model, Talent screening, 360degree performance management process, ICICI DNA, Talent retention

"Leadership is the ability to handle the job at the next level with comfort. Being
able to perform your future role in the present. It is especially important in an
industry like ours where people are our most important asset, and we depend on
people for growth. When your business focuses on growth, grooming talent is
crucial".
- Chanda Kochhar, Chairman and MD, ICICI Bank Ltd., in 2010.

"The bank's leadership in the industry is exemplary. But nothing to compare its
ability to spot, groom, and deploy leaders in-house".
- Indrajit Gupta, editor, Forbes India & George Smith Alexander,
reporter at Bloomberg, in 2008.

Introduction:
ICICI Bank Ltd. (ICICI Bank), the India-based financial banking institution, began
a process of identifying and nurturing talent in the 1980s. This practice paid rich
dividends, with ICICI Bank becoming known as a powerhouse of leadership talent.
Ever since N Vaghul (Vaghul) became the chairman and MD of Industrial Credit
and Investment Corporation of India Limited (ICICI) in 1985, the bank had
fostered a culture of nurturing young talent. Vaghul brought in a fresh and different
approach to working in the organization. He involved younger people at the bank
in big projects unlike CEOs of other organizations who preferred to pick senior
level managers.

62

This was a bid to develop a talent pool at the bank. Vaghuls way of empowering
young people, nurturing talent, and developing a leadership pipeline became part
of the banks culture and was carried forward by former CEO and MD, KV
Kamath (Kamath) and present CEO and MD, Chanda Kochhar (Kochhar).

Kamath who joined ICICI Bank as CEO and MD in 1996, created an incredible
talent for spotting employees with leadership potential. He was instrumental in
grooming several people who later took up key positions at the bank. Kamath
nurtured people with potential leadership at the bank by moving them from one
assignment to another and making them take up different leadership roles and
serving the bank. Commenting on Kamaths ability to nurture talent, Kalpana
Morparia (Morparia), former joint managing director, ICICI Bank, said, "Mr
Kamath has an amazing ability to pick a leader and identify potential way beyond
what the people believed in. Less than 20-25% of us had any clue where we were
headed in our careers."
Kamaths vision was to enable ICICI Bank to surge ahead and capture a vital share
of the market. He planned to create leaders within the organization who could
foresee opportunities ahead of others.

The mentoring process started with picking young employees who had joined the
bank as management trainees and giving them hard-to-achieve targets to test their
potential. Employees passing the test were promoted to lead senior-level positions.

The success of the mentoring process led to the bank institutionalizing a formal
leadership development process that identified talented employees through a
performance appraisal system after which they were assessed for future leadership
roles.

Experts felt that the bank's successful transformation from a lending financial
institution to a retail powerhouse could be attributed to its mentoring and
leadership development process.

63

 Background Note:
ICICI Bank was founded in 1994 as a subsidiary of an Indian financial institution,
the Industrial Credit and Investment Corporation of India Limited (ICICI). ICICI
through its subsidiary, ICICI Bank, transformed itself from a developmental
financial institution offering services such as project finance into a diversified
financial services group offering an array of products and services directly as well
as through subsidiaries and affiliates such as ICICI Bank. In 1999, ICICI became
the first bank or financial institution from Asia barring Japan to be listed on the
New York Stock Exchange. In 2000, ICICI and ICICI Bank merged to benefit the
shareholders of ICICI Bank through a large capital base and scale of operations.

In October 2001, the Board of Directors at ICICI and ICICI Bank approved the
merger of ICICI with ICICI Bank and two of ICICI's wholly-owned retail finance
subsidiaries ICICI Personal Financial Services Limited and ICICI Capital
Services Limited.

ICICI Bank made phenomenal progress in a short period under the leadership of
Kamath, who joined ICICI Ltd. as its managing director and CEO in its embryonic
stage in 1996. It was at this time that the preliminary results of the liberalization
efforts that India had initiated in 1991 began to show.

In the changing environment, ICICI transformed itself from a traditional

development finance institution to a customer-centric private-sector bank. It was
not just merely a growth story of a corporate but the success of a clearly envisaged
leadership strategy adopted by Kamath for the growth and development of the
bank leveraging human capital and technology. In January 2002, the merger was
approved by shareholders of ICICI and ICICI Bank. In March 2002, the merger
was approved by the Gujarat High Court and in April 2002 by the High Court of
Judicature at Mumbai and the Reserve Bank of India. Subsequently, ICICI Group's
finance and banking operations - wholesale as well as retail - were integrated into a
single entity. It was reported that Kamath's ability to sense potential in the retail
business ahead of others and inspire his people to go for it was a major contributor
to ICICI's success. From 2001 to 2006, ICICI Bank bagged The Asian Banker's
Best Retail Bank in India' award.

64

Over the years, ICICI Bank adopted smart initiatives in the rapidly growing
financial sector of India and created a state-of-the-art banking infrastructure in its
branches across India. The main strengths of ICICI Bank were its talent pool,
complete product suite, large capital base, extensive customer relationship, strong
brand franchise, technology-enabled distribution architecture, and universal
banking presence. Though ICICI Bank was mainly involved in retail banking, it
ventured into other products such as insurance, corporate banking, venture capital,
etc.

In 2007, ICICI Bank created history by raising US$ 5 billion in the largest-ever
public offering in India and emerged as a valuable financial organization. In 2009,
Kamath stepped down from the post of CEO and MD of ICICI Bank in favor of
Kochhar.

For the FY ended March 31, 2012, ICICI Bank had assets worth US$ 83.6 billion,
which made it the second largest bank in India.

Nurturing Talent in its Initial Years:

ICICI had a history of identifying and nurturing young talent right from the time
SS Nadkarni (Nadkarni) was chairman of ICICI. Kamath himself was picked by
Nadkarni soon after he joined ICICI in 1971 after completing his post-graduation
from the Indian Institute of Management, Ahmedabad. Commenting on Nadkarni's
way of nurturing talent, Kamath, said, "He taught me initial skills; he had this
ability to test you by giving increasingly complex assignments. If you had any
intelligence you quickly made out that he was actually testing you to see if you are
fit enough to go on to the next rung."...

Mentoring - The Kamath Way:

One of the first things Kamath felt he had to do on returning to ICICI after an
eight-year stint with the Asian Development Bank in 1995 was to create a talent
pool in a bid to transform the government promoted project finance institution into
a universal bank. During this time, the bank also faced the problem of young
65

employees leaving the bank for better options. This prompted Kamath to devise the
parking lot theory...

A Formal Leadership Development Process:

Soon after ICICIs merger with ICICI Bank in 2000, Morparia and ICICI HR head
K Ramkumar (Ramkumar) felt that the bank should make the transition to a formal
system of leadership development rather than depending on Kamaths personal
genius. This, they felt, was required as the bank was scaling up from a 1,000
member organization to a strong team of 7000 employees. Moreover, they felt that
the previous process of grooming leaders which had been heavily dependent on the
board members contribution had started looking obsolete...

Talent Screening and Assessment:

As a first step of the formal leadership development process, the bank
institutionalized a talent screening process. With the number of employees rising
and the bank expanding to various national and international markets, a talent
screening had to be put in place, the bank felt. Since the selection of potential
leaders was done by the bank, the process started with creating a list of talent
which was empanelled as leadership talent. For instance, out of 15000 oddmangers, the bank chose 2000 people as leadership talent...

Grooming Successors:
The bank also used the leadership development process to groom successors at the
bank. Moreover, succession planning was essential as all the topnotch people such
as Lalita Gupte and Morparia were retiring in October 2006 and in 2007,
respectively...

66

 Other Initiatives:
While the formal leadership development system identified and nurtured young
professionals at the bank, ICICI Bank also took some initiatives to nurture leaders
at the senior management levels. For instance, in 2003, ICICI Bank came up with a
new leadership program called Mentoring the Mentors for professionals at the
senior management level. The program aimed to hone the mentoring abilities of
professionals. The bank also identified some corporate professionals from
companies across other sectors for this initiative. These professionals conducted
sessions on effective mentoring for the senior management level at the bank...

Results:
According to experts, ICICI Banks focus on nurturing young leaders helped the
bank move ahead of others in the Indian banking sector. Moreover, they felt that
the leadership development process had also helped the bank survive through the
crisis. For instance, in mid-2008, the global economic environment became very
challenging due to the global financial crisis. ICICI Bank also faced the heat due to
its heavy global exposure. Moreover, a rumor that began in Gujarat that ICICI
Bank would go bankrupt spread like wildfire...

Looking Ahead:
Experts felt that though ICICI Bank had a depth of talent, it also faced the risk of
becoming a poachers paradise. According to Kochhar, "When an organization
grows at 35-40 per cent per annum for 10 years and adds 10 new businesses during
that period, young professionals get the kind of exposure they would not have got
anywhere else. We have groomed people to build and run businesses like
insurance, securities, and retail. So if other players are looking to grow who would
they pick? The best person would be someone who has already run the business."...

67

 Exhibits:
Exhibit I: ICICI's Profit and Loss Statement
Exhibit II (A): Role of Top Management in Mentoring
Exhibit II (B): Employees Mentored by Kamath
Exhibit III: ICICI Bank's Talent Management Components
Exhibit IV: Women Leaders at ICICI Bank
Exhibit V: ICICI DNA Anchors
Exhibit VI: Kochhar's Career Path to the CEO

68

 Comparative Analysis:

ICICI is private global bank its HR practices are totally different SBI no.1 public
sector bank of India. Package given by ICICI is more enough than
salaries provided by SBI. Incentives and benefit policies of ICICI and SBI is
totally different. Selection process of ICICI is very lengthy and cost consuming.

Selection process of SBI is two levels:

PO level
Administrative Officers. The training and development policies of ICICI are
much better than SBI. There is not much emphasis on training and
development at SBI.

RECOMMENDATIONS:
Recommendations for ICICI:
Simplify its recruitment and selection process.
Reduce salaries of employee and increase the incentives and benefits part in
their compensation.
Recommendations for SBI:
Competition in banking sector increases due to private banks. Private
sector banks giving higher salaries to attract the talent. Thus it is necessary
for SBI to increase its salaries.
Give more emphasis on training and development of employees.
Increase motivation by giving extra benefits.

69

 SUGGESTIONS:

Based on findings emerged from the analysis of the data collected through
questionnaires and interacting with the management officials of the public sector
banks, the following suggestions are offered to improve the HRM as prevalent in
banks.
1. An awareness is to be created at all levels that HRM is everybodys business and
systems for creating such awareness are to be developed.

2. Banks should establish a high power HRM Committee at the corporate level.
Alternatives, the form and the scope of the Training Advisory Committee will meet
atleast once in 3 months. HRM task force at various levels may also be set up to
implement various HRM measures as are initiated and approved by the HRM
Committee.

3. All efforts must be continuously mode by banks to develop an overall HRM

culture and climate at all levels. It is very important that line managers and other
functionaries take appraisals of employees as an important part of their portfolio
and do not consider it to be the job of either personnel or HRM alone at the
corporate level.

4. The HRM surveys should be carried out in the banks every 3 years and findings
of these surveys should be interpreted and suitable HRM interventions should be
made. The suggestions emerging from these surveys need to be examined and
followed up seriously.

5. Scope of employee suggestion schemes needs to be expanded to make it more

participative and effective practical and useful suggestions should be encouraged.

6. Visiting faculty(with some behavioural science background) should be made to

visit all the branches over a period of time, by giving advance notice to the
branches and inviting questions and suggestions about the day-to-day problems.
These could be discussed in a brainstorming session at the branches with a view to

70

letting out pent up feelings if not for immediately solving them. This should be
followed up suitable communication from controllers.

7. Tasks/assignments/paper presentation to individuals/group of participants should

make as a regular feature experience sharing among participants to facilitate
meaningful interaction should be provided for. To the extent feasible, structured
and unstructured role plays in training sessions should be introduced.

8. Welfare measures particularly relation to hospitalization scheme, canteen

facilities at branches, scholarships for children of staff holiday homes and library
facilities at branches need reexamination and whenever feasible, these and other
such welfare measures may be suitably modified for the benefit of staff.

9. More important personnal policies like transfer and promotion are to be viewed
periodically transfer placement policy should be implemented in fairness with
minimum adhocism and undue favouritism from either side. This will instill
confidence amongst all.

10. The system of reward and punishment should be made more clear and
transparent while there should be an institutionalized system for calling periodical
information, good work done by staff for prompt appreciations of their deeds and
punishment to the erring employees should be quick and proper to serve as a
deterrent to others.

11. A thorough and scientific screening of the participants should be done before
selecting employees for training so that the right type of personnel are selected for
the right type of training.

12. The development oriented PAS should be integrated with the entire HRM
system of the organization. The appraisal data should be used not only for
promotion decisions but also identification of staff training needs, job placements,
job enrichment and enlargement, talent spotting and career planning.

13. A basic commitment and willingness on the part of the management and
employees along with sustained planning efforts are required for the entry of
71

computer in Indian banks. Bank managers should be prepared to manage the

people so that right type of data can be used in the computer at the right time.
Commitment of all the section of employees to computerization should be evolved
to cover various sections of employees. The executives and administrators must
make use of Computer Based Management Information System(CBMIS) to
enhance the quality of their decisions.

14. New manual for computer audit should be prepared and the access to software,
kind of access and the risks involved are required to be assessed periodically, so
that of computerized branches serve the purpose of an audit and does not become a
routine.

72

 CONCLUSION:
The face of banking is changing rapidly.
Competition is going to be tough and with human resources management of
public and sector private banks.
Banks in India will have to benchmark themselves against the best in the world.
These are some of the issues that need to be addressed if banks are to succeed,
not just survive, in the changing milieu.
Taking the banking industry to the heights of international excellence will
require a combination of new technologies, better processes of credit and risk
appraisal, treasury management, product diversification, internal control and
external regulations and not the least, human resources.
A high level of performance is rewarded by a system of performance bonus.
The ratio of variable bonus to fixed salary is finally high to attract and retain the
best talent in the bank.
The scope of public sector and private bank have great human resource
management is different but the competition which have various system.
Specializing in various human resource management tasks and functional
leadership engaging in strategic decision-making across the business.
To train practitioners for the profession, institutions of higher education,
professional associations, and companies themselves have established programs
of study dedicated explicitly to the duties of the function.

73

 BIBLIOGRAPHY
REFERENCE BOOKS:
Human Resource Management in Public and Private Sector Banks
H.R Machiraju. Indian Financial Systems, UBS Publishers and
Distributors LTD., India.
Principles of Banking Macmillum.
Joy, O.M.: Introduction to Financial Management (Madras: Institute for
Financial Management and Research., 1978).

WEBLIOGRAPHY
SOURCES:
www.google.com
www.googleimages,com
www.yahoo.com
www.yahooimages.com
www.wikipedia.com

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