Assessment of HRM Function In Bank of Kathmandu

PREPARED BY: (GROUP 5) Anish, Luna, Nirjal, Rakesh, Sujesh, Umesh

SUBMITTED TO Mr. JAYENDRA RIMAL

9th September, 2013

Assessment of HRM Function In Bank of Kathmandu

ACKNOWLEDGEMENT

We would liketo thankthe staff of Human Resource Department of Bank of Kathmandu who helped us to provide necessary data and other information without this report could not have been completed. We would also like thank Bank of Kathmandu to give us permission to perform Human Resource Management (HRM) assessment. Finally we would also like to express the deepest appreciation to my facilitator Mr. Mr. Jayendra Rimal who has the attitude and the substance of genius. He convincingly conveyed a spirit of adventure in regard to this project work and an excitement in regard to teaching. Without his guidance and persistent help this project work would not have been completed.

Table of Contents

ACKNOWLEDGEMENT.......................................................................................................... 2 Table of Contents ....................................................................................................................... 3 INTRODUCTION

1.1 1.2 1.3

Human Resource Management ............................................................................................... 5 Bank of Kathmandu................................................................................................................... 6 Strategies of Bank of Kathmandu ............................................................................................ 6

Vision 6 Mission Statement Core Values

1.4 1.5 1.6 1.7 1.8 1.9 1.10

6 7

Organizational Structure ........................................................................................................... 7 Human Resource Management in Bank of Kathmandu.......................................................... 13 Different sections of HRM department of BoK ....................................................................... 14 Recruitment and Selection...................................................................................................... 15 Objective and Methodology of the assessment ..................................................................... 18 Significance of the Study ......................................................................................................... 18 Limitation of the study ............................................................................................................ 19

2.1 HRM Assessment............................................................................................................... 19 2.1.1 HRM Capacity analysis 21 2.1.2 HRM Climate Analysis 23 2.1.3 HRM Information 25 2.1.4HRM Strategy and Policy 27 2.1.5 HRM Mechanism and Methods 28 2.1.6. HRM Outcomes 30 CHAPTER 3 ............................................................................................................................. 32 Assessment of HRM in Bank of Kathmandu
3.1

32

Strength and Weakness ......................................................................................................... 32

3.2 Linkage between HRM and Organization Performance ............................................................... 33

CHAPTER 4 ............................................................................................................................. 35 CONCLUSION AND RECOMMENATION 35

4.1. Conclusion .................................................................................................................................. 35 4.2 Recommendation ........................................................................................................................ 35

REFERENCES ......................................................................................................................... 38 3

CHAPTER I

INTRODUCTION
1.1 Human Resource Management Human Resource Management (HRM) Function is an important and vital department in an organization. In order to have a fair idea of how effective and complete this Unit is in an organization we have chosenBank of Kathmandu for our case study. A detailed study of HRM Function has been carried out by covering most of the components of HRM. This type of study and its findings will definitely help organizations develop and grow by identifying areas of improvement and strengths. In the present world Human Resource Management has come out to be a vital organ of an organization because it deals with people, the most important resource. The overall performance and development of an organization is based on HRM function.

Within the broad term of HRM, Human Resource Department (HRD) is responsible for managing the people aspect of an organization like proper staffing, staff structure and positioning, budget, facilities and benefits, succession planning, processes and practices, HR data base, HRM strategy etc. Its most important role is to continuously build a pool of qualified human resources to run the organization. The role of HRD is crucial because it involves from Selection till the attrition of the employees. Employee recruitment, re-placement, training, payroll, staff budgeting, dispute settlement are few of the vital tasks of HRM functions.

In order to have a fair idea whether all the components of the HRM function are performing well, it is important to carry out the HRM assessment. The HRM assessment matrix presented later in this report will help HRM functions to know where it stands in terms of maturity and evolvement of the HRM department and off course, its strength and weaknesses.

In our assessment of HRM function of Bank of Kathmandu, our findings on different aspects like HRM capacity, HRM climate, HRM information, HRM strategy and policy etc. have been discussed separately.

1.2 Bank of Kathmandu Bank of Kathmandu Limited has become a prominent name in the Nepalese banking sector. We would like to express our sincere gratitude to our customers, shareholders, employees and other stakeholders for their support and co-operation for leading the bank to the present height of achievements. We wish to reiterate here that whatever activity we undertake; we put in conscious efforts to glorify our corporate slogan, "We make your life easier". We would also like to elucidate that Bank of Kathmandu is committed to delivering quality service to customers, generating good return to shareholders, providing attractive incentives to employees and serving the community through stronger corporate social responsibility endeavor.

Bank of Kathmandu Limited (BOK) has today become a landmark in the Nepalese banking sector by being among the few commercial banks which is entirely managed by Nepalese professionals and owned by the general public.

BOK started its operation in March 1995 with the objective to stimulate the Nepalese economy and take it to newer heights. BOK also aims to facilitate the nation's economy and to become more competitive globally. 1.3 Strategies of Bank of Kathmandu Vision To become a significant contributor to the economic development of Nepal by distinguishing the Bank as an efficient, competitive, safe and top-quality financial institution.

Mission Statement To offer financial services and become the "Bank of Choice" by dedicating the progress and

growth of the institution to the community, customers, employees and stockholders by:
Promoting economic growth and becoming a caring corporate citizen Providing excellent customer services by offering personalized quality services and products Including modern technologies of banking that add value to customer services Following strict risk-control mechanisms Enhancing shareholders value Providing challenging career and learning opportunities for our employees

Core Values The Bank has defined following core values for achieving the vision and mission:
Embrace a commitment to excellence Develop knowledgeable, competent and professional employees Deliver quality services Provide value to the stockholders Be accountable for delivering what we promise Demonstrate honesty and integrity in all actions Be balanced in customer orientation and risk consciousness Be efficient and technology oriented

LUNA will be responsible from here

1.4 Organizational Structure

The present organization structure at the corporate level is headed by the Managing Director (MD) and made responsible to BoK board. The MD is the Chief Executive Officer and also one of the board member of BoK. Under MD, there are 7 Deputy Managing Directors (DMD) with the responsibilities of Planning, Business& Change Management, Development, Operation & Maintenance, Finance, Internal Audit and Human Resource Development, all occupying the position of 11 level officer. There are 5 Directors of 11th level and 2 Act. Directors of 10th Level who handles Mobile Service Directorate, IT Directorate, Satellite Service Directorate, CDMA Services Directorate, PSTN Service Directorate &Telecom Training Section.

In addition, there are 6 regional directorates under the MD; of which 2 regional directorates are headed by the 11th level officers and remaining 4 regional directorates are of 10th level officers. This shows that the MD has many deputies who work directly under him, spending more time in maintaining the reporting relationship with them, and involving in day-to-day decision making processes. 7

Currently, BoK has seven major network related work units headed by DMDs or Directors. They are: 1. Planning Department: This department is responsible for overall network planning of the organization. Under this work unit, there are two components which include Transmission Planning and Switching Planning. 2. Business Department: This department is responsible for overall business and marketing. There are two sub departments i.e. international business which looks carrier business outside the country and national businesses which looks inter connection business in domestic market. 3. Development Department: Under this, there are Civil Department. The other three are civil works with the responsibilities of small civil construction task of BoK, Material
Board of Directors

Company Secretary

Audit Committee

Head Internal Audit Chief Executive Officer Secretary

EM Business

Chief Operating Officer

Finance & Treasury

Management and Development 4.

Integrated Risk Management & section. Compliance

Marketing & Corporate Communicati on

Corporate Legal Affairs & Recovery

Human Resource Developmen t

5. Operation and Maintenance Department:This department is responsible for overall network maintenance of fixed line in BoK as well as maintenance strategy formulation of

BoK. This department is also responsible for Management Information System (MIS) of BoK. 6. PSTN Directorate: This directorate is responsible for overall project implementation of core network and access network. This directorate is also responsible for access network panning of the organization. Under this directorate there are four departments which is project Implementation Department-East (PID-East), PID-Mid, PID-West, Optical Network Project Implementation Department and Access network Planning Department. 7. Satellite Service Directorate: The main responsibility of this work unit is to look project implementation, operation and maintenance of satellite link and related network. It is also responsible forproviding telecommunication service to remote rural areas through VSAT technology.BoKs ongoing Broadband wireless Internet (Wimax) project is also looked by this directorate. 8. Mobile Service Directorate: This Directorate is responsible for the Planning, implementation, operation and maintenance and customer care of GSM mobile services. 9. CDMA Service Directorate:This Directorate is responsible for the Planning, implementation, operation and maintenance of CDMA mobile services. It is also responsible for the implementation of BoKs transport Network as well wireless transmission Network. 10. IT Directorate: It provides nationwide internet and data services. This department is responsible for the generation of bills for the PSTN customer. It also maintains the internal computer network of the organization. The above structure shows that the present structure is more of functional type which seems appropriate when BoK has only one main single product / service i.e. fixed telephone service to its clients. The departmentalization of the structure, therefore, was done in terms of planning, Business, Development; and operation and maintenance in corporate level to formulate strategy related to the different service. Forthe operation of service related equipment different directorate has been formed. Other non technical departments (Finance, HRD, and Internal Audit) are created to provide support services to these technical oriented departments.

Details of the Employees Hierarchy Level:

PERMANENT 01-CEO / MD 02-SGM 03-GM 04-DGM 05-AGM 06-EM 07-M 08-DM 09-AM 10-SO / IT Administrator 11-JO / IT Supervisor 12-SA / IT Senior Operator 13-A / IT Operator 14-JA 15-Probationary JA 16-Driver 17-Messenger Management Trainee CONTRACT Driver Messenger Cleaning Personnel Total Contract GRAND TOTAL 1 0 0 1 0 3 5 10 15 49 30 90 201 22 19 14 18 12 1 1 2 4 494

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1.

Technical Staffs Non Technical Staffs (Overall)

45% Technical Staff Non Technical Staff 55%

2.

Technical Officer Non -technical Officer (Officer Level)

33% Technical officer Non Technical Officer 67%

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3. Officer Level - Non Officer Level (Non-officer level)

30%

Officer Level

Non Officer Level

70%

1.5

Human Resource Management in Bank of Kathmandu

Human Resources Management is an important department in Bank of Kathmandu. It is there to take care and manage the employees aspects of the organization like proper staffing, staff structure and positioning. Its most important role is to continuously build a pool of qualified human resources to run the organization.

In Bank of Kathmandu, HRM Department is one of the non-technical departments in the organization undertaking responsibilityfor managing and mobilizing the available human resource. If Human resources are utilized properly, then there are maximum chances of theachieving success and organizations goals.

LUNA will be responsible till here

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ANISH will be responsible from here

Different Sectionof HRM Department in Bank of Kathmandu
Chief Executive Officer

1.6

Different sections of HRM department of BoK

Human Resource Development

The different sections of HRM department of BoK and their responsibilities are as follows:
Human Resource Development Head

1.6.1 Planning and Record Section Responsible for Workforce Planning HRM planning is responsible for the entire manpower planning of Bank of Kathmandu such as fiscal year

planning, Five year plan, which includes the requirement of man powers, offices expansion as per telecom services expansion nationwide etc. -

Human Resource Development Officer

It has responsibility of human resources of company from pre recruitment process to post retirement process (i.e. PR to PR) Record Section is responsible for keeping all the records related to human resources of BoK such as employee info, works details, promotions, transfer, recruitments/ retirements, pension etc in the computerized system called HRMIS( Human resource management information system)

1.6.2 Personnel administration section Is responsible for gathering information of manpower requirements, estimating and preparing list of demanded posts
-

Responsible for appointing, posting, transferring, punishing and retiring employees as per KARMACHARI BINIYAMAWALI. 14

Responsible for providing compensation, benefits & rewards

1.6.3 Management Development & General Administration Section is responsible for the development of employees which includes training requirements for skill development, employee career development planning etc; Is responsible for all activities those are not covered by other section of HR department. e.g.outsourcing man power requirements like Security guards appointment, buildings sanitation, safety, Industrial & employee Relation services,relationship with labour unions , negotiation with them etc 1.6.4 Training & Vehicle section Is responsible for the management of training for the employees. It coordinates with telecom training centre for local training and also manages all kind of international training programs. Training committee will decide in case any employee is requiring training outside the country. 1.6.5 Performance appraisal section Is responsible for performance management of the employees. Performances of employees are evaluated on yearly basis for promotion. Performance Evaluation is done on the basis of supervisors evaluation, reviewers evaluation, seniority basis, geographical region wise etc The performance evaluation records of all employees are maintained in systematic way.

1.6.6. Legal section Legal section is responsible for dealing all the legal aspects of the company.

1.7 Recruitment and Selection 1.7.1 Recruitment and Selection Process Among the different sections of HRM department, HR Planning and Personal Administration are directly involved in HR recruitment process. Both the sections are involved in gathering the

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number of vacancies to be posted. There are three ways to conclude the number of vacancies which are as below: 1. From the internal record Vacancies due to attrition and resignation. 2. Post creation from proposed projects planned by Planning Department (Technical). 3. Request from Regional Offices.

Planning department (Technical) decides the future projects as per fiscal year programs and estimates/forecasts the number of manpower (level wise) requirement for the project. Other Departments/Directorates/offices also makes the request mentioning the number of vacant posts or additional manpower requirement for those Departments/Directorates/offices to the personnel administration section of HRM. Personnel administration section of HRM also prepares the detailsabout the vacant posts from the record section.It then estimates the number of required vacancies. If vacancy requirement demands extra new posts, it sends the details of new posts requirement to HR Planning Section. HR Planning Section prepares the final list which will be submitted to Managing Director to be submitted to Board of Directors for approval. Upon approval from Board of Directors, HR Planning section submits the details to Recruitment Secretariat. All the required vacant posts are fulfilled based on the provisions made in Karmachari Biniyamawali as follows: For level 1 2: All required number of seats will be called for free open competition. For level 3 6: 50% of total required number of seats will be called for free open competition and remaining 50% will be secured for internal "File Badhuwa" and internal examination.

For level 7 (Technical):

75% of vacant seats will be called for free open competition and 25% of the remaining seats will be secured for internal "File Badhuwa" and internal examination.

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For level 7 (Non-technical): 100% of the remaining seats will be secured for internal "File Badhuwa" and internal examination. For Level 8 11:

All vacant seats are secure for "File Badhuwa" and internal examination.

Recruitment secretariat, then submits the details to the Recruitment Committee which comprise of the following. 1. Managing Director 2. DMD, HR 3. DMD Technical appointed by MD 4. HRD Manager Chairman Member Member Member Secretary

Recruitment secretariat carries out the job vacancy advertisements, as per the decisions, for both (internal/external) posts and instructs exam section to conduct the selection procedures(exam, interviews, internal competition) Recruitment committee finalizes and publishes the result of successful candidates as per exam or internal performance evaluations and sends it to Personnel Administration Section for appointment and socialization (induction for new) and posting as per requirement.

1.7.2 Internal Promotion "File Badhuwa" process: Employee who have served for at least 3 fiscal years in one level, are eligible for internal promotion. In internal promotion, evaluation is made on the basis of Appraisal Sheet ( KaSaMu) and educational qualification, seniority, presentation and interview, geographical places, in which the employee has served etc.

1.7.3 Appraisal method BoK has been applying a 20-12-8-60 grade technique for performance appraisal. The score of 20 points is awarded by the supervisor, 12points is awarded by a person above the immediate supervisor and 8 points is awarded by the HR committee.

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The remaining 60 is divided into five segments. 25 points for the presentation, 15 numbers for the no. of years worked at BoK, 4 for the geographical location where the person has worked, 12 for the educational qualification and final 4 points for the number of years the person has worked as an office in-charge at any office of BoK all over Nepal.As per the bylaws, only Technical people can be an office in-charge. Hence, for non-technical, the division of 60 would be 25-1512-4-4.

1.8

Objective and Methodology of the assessment

During the Human Resource Management course we have been exposed to theoretical aspects of HRM. In reality, for big organizations like Bank of Kathmandu, how HRM functions is a big question. Hence, main objective of the assessment was to get overview of how Human Resource Management functions in an organization practicing HRM functions. The objective of this study is to know the role and status of HRM functions by analyzing its various components. This assessment is not meant for full proof solution to the organization in its area of weaknesses. However, few recommendations where the organization can develop and improve are provided in this report.

The overall research has been carried out with the help of the HRM assessment tools which has various components and are numbered from 1 to 4 as per the development stages. Various measurement criteria have been defined in each indicator. The instrument was circulated to the HR staffs for their views. The assessment presented in this paper is based on their views. Discussions were also held with HR Manager and the HR officer to understand the HRM function better. The BoKs HR policy, Annual Report and other publications published by the organization have been studied to help us compile this report. These policies and publications helped us to validate the HRM indicator provided by the HR department.

1.9

Significance of the Study

The study mainly fills a research gap on the study of HRM function of BOK. The success and prosperity of the BOK depend upon the successful implementation of human resources, which is the pillar of the company.

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Provide clear picture how BOK is implementing HRM function. It shows the weakness of HRM department in BOK Can be useful feedback for the policy makers of the BOK for further improvement. All stakeholders of BOK will be benefited from this research.

1.10

Limitation of the study

This assessment is based on the views shared by the HR personnel which we have tried to validate through other document related to BOK. Hence the findings may not be in its entirety. Time factor has been another limitation in our assessment. Though we were given sufficient time for this project, it was difficult to compile all the required data in the given time period. HRM functions being a sensitive area of an organization, information were not readily available. Therewere difficulties in extracting the required information.

ANISH will be responsible till here

CHAPTER 2

SUJESH will be responsible from here

Presentation and Analysis of Major Findings

2.1

HRM Assessment

The HRM assessment given below is based on the indicators provided in the assessment instrument and our interaction with the HRM personnel. Other areas of information (Annual

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report published, websites etc.) have also been referred. The following components have been analyzed with the help of these tools;

2.1.1

HRM Capacity

2.1.2 HRM Climate 2.1.3 HRM Information 2.1.4 HRM Strategy and Policy 2.1.5 2.1.6 HRM Mechanisms and Methods HRM Outcomes Analysis

HRM Assessment Matrix HRM Component Indicators HRM Capacity HRM structure and Planning HRM Staff HRM Budget HRM facilities and resources ( non-human) HRM program planning and delivery capability HRM Climate HRM Importance Leadership style and managerial systems Organizational process and practices HRM Information Human Resource Database Utilization of HR data for HRM HRM resource information HRM Strategy and Policy HRM policy, strategy and plan Strategic linkage of HRM Alignment with HRM X X X X X X X X X X X X X X 1 2 3 4

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HRM Mechanism and Methods HRD alignment with HRM HRD evaluation and feedback HRD program and planning and management Number and variety of training programs Number and variety of development programs Use of work systems for development Career planning and development supports Diagnosis of organizational effectiveness and renewal issues Organizational change and development interventions HRM Outcomes Employee performance capacity Qualitative change in employee Employees performance and productivity Customer satisfaction 2.1.1 HRM Capacity analysis The overall HRM units responsibility and role carried out by the HRM function is measured with the help of this instrument. This heading has been explained through below sub-headings. Brief synopsis: X X X X X X X X X X X X X

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Indicators for Stages of HRM S.No. 1 2 3 4 5 6 HRM Component HRM Capacity HRM Climate HRM Information HRM Strategy and Policy HRM Mechanism and Methods HRM Outcomes Total 1 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 3 3 3 0 2 8 3 19 4 2 0 3 1 1 1 8 Average 3.40 3.00 4.00 3.33 3.11 3.25 3.30

2.1.1.1HRM Structure and Positioning HRM is a major responsibility of human resource or personnel department. There is a formal assignment of this responsibility. The function has low organizational visibility and position. Bank of Kathmandu has a Human Resource Department at corporate level lead by Human Resource Deputy Managing Director. With its existing structure, each regional directorate have one or more than one accounting centre and under a single accounting centre, it has one or more than one collection centre. So, operating in wide range of regional levels and with so many staffs all over Nepal, it is necessary for Bank of Kathmandu to have a separate Human Resource section at least in regional directorate level. This section will feed in to HRD at corporate level, which will enhance its activities effectively. 2.1.1.2 HRM staff There are trained HRM staffs in the organization, but only at a level to maintain basic procedures and record-keeping functions. Bank of Kathmandu provides communication services which are highly dependent on the mobilization of capable human workforce. In order to create a customer friendly environment, there should be capable and skilled enough staffs in HR department, who can plan, develop and depute competent and dedicated employees. Bank of Kathmandu being one of the largest Company in Nepal with 5542 staffs altogether, there should be educated, capable and experienced group of staffs in HR department who can handle the work of HR department for achieving the organizational goal.

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2.1.1.3 HRM budget Fund for HRM staff and HRM programmes is a permanent budget item, reviewed annually and adjusted if possible. There is a provision of budget for HR department in Bank of Kathmandu. This budget is allocated annually which is reviewed in case of excess or short fall. The budgets allocated are utilized for training staffs on the job or off-the job. The budget is also used for arranging HR programmes within the organization. 2.1.1.4 HRM facility and resources (non-human) HRM is a major responsibility of human resource or personnel department. There is a formal assignment of this responsibility. The function has low organizational visibility and position. As it is a separate department led by a Human Resource DMD at corporate level, there are enough facilities and resources (e.g. space, learning materials and computerized system) available for the HR department. However, due to various constraints like lack of experienced HR staffs, pressure from unions these facilities are not being fully utilized

2.1.1.5 HRM program planning delivery capability HR people in the organisation have expertise and experience in planning and delivering a variety of HRM programmes. They use their competencies frequently. Some external supports are used for major programmes.BoK has nationwide network and utilises advanced technology development for their multiple projects to attain uninterrupted service. For this to take place a proper plan and proper channels are required. Though, BoK calls job vacancy every year to fulfil the vacant post and fulfil the additional requirements, it is observed that enough manpower is not dispatched in a scientific way. Same group has to work in multiple sites which create delays in restoration of the services. For example, maintenance of Mobile BTS. 2.1.2 HRM Climate Analysis This tool helps to measures the observation of the top-level management towards the HRM activity conducted by the HR Department. With the help of this instrument we can judge whether the HR department is functioning independently or not, without any interference by the

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top management. Various sub activities are defined under this tool to indicate the HRM performance of the organization, which are given below. 2.1.2.1 HRM Importance Top management believes in the importance of human resources and shows fair commitment to their development. There is a fair support for training and development. The HRM function is given some priority. Because of the type of service it provides and its size, it seems that the higher management has always felt the importance of Human Resource department. It has also realized importance of HR training for capable staffs. However, during our interview session, HR staff expressed their dissatisfaction as there were very little changes of HR staffs being sent for higher trainings related toHR. In todays competitive environment, if proper planning is not done, there are higher chances of loosing the dominant role of BoK in its sector. It will become very difficult for HR to work and manage in such a diverse situation. Therefore, there is a strong necessity for training HR staffs at International standard. 2.1.2.2 Leadership style and managerial systems The leader generally involves the team members in making decisions and gives some discretion for performance. There is limited encouragement to act independently. Participatory management processes and mechanisms are in place and they are generally used. As Bank of Kathmandu has a formal structure policy-wise everything has to be within the rule and guidelines. There is always departmental effort to complete the task. 2.1.2.3 Organizational Processes and Practices Opportunities to take initiatives and experimentation for employees are available to some extent but all employees are not encouraged to use them. Employees are encouraged to confront and challenge issues. Systems for collaboration, mutuality and team- work do partially exist but do not cover all employees. In order to bring a change in an organization, a mindset of the employees need to be changed but it is not an easy task. To address this issue, BoK formed a separate department called Change Management to explore the creative and innovative ideas to bring in the changes in HR and in the organization as a whole. A very detailed study was carried out for the re-structuring of the organization, and a report was prepared. Unfortunately, it could not be implemented due to the reservation from few higher officers and unions.(@Sujesh: Dont know in context of BOK)

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2.1.3

HRM Information

Information is the vital tool in any organization for its growth and to maintain its credibility among the competitors. Various number of information like Payroll, Work Time, Benefit administration, HR management is required in an organization for the instant support and for the decision making process. HRM information is the core information for the policy level people where they analyze the data for the future growth of the organization. For example if the organization wants to expand its branch / or expand services then it can estimate how many staffs will be required to open one branch, what will be the cost involve, level of the staff they are going to appoint in that branch, which staff is best fitted in the newly open branch, what type of trainings are required etc. can be obtained from the HRM Information system. Hence it is highly important for the BoK or any institution to keep the robust HRM database system in their organization. 2.1.3 .1 Human Resource Database A well-designed, comprehensive and computerised human system is in place. There is a system of data management with provision for regular updating. BoK has recently procured and installed Enterprise Resource Planning (ERP) systems which is capable of maintaining HR database, financial records as well as assets management(@Sujesh: Dont know in context of BOK)

2.1.3.2 Utilization of HR data for HRM HRM policies making, planning and programming decisions extensively use and are fully informed by HR database. HR data is actively sought for and fed forward into HRM decisions. Bank of Kathmandu maintains a database of employee records in computer as well as manually in record files (conventional) which are used in the planning process as well. However, due to the existence of highly politically influenced unions, these data are often not properly used.(@Sujesh: Dont know in context of BOK)

2.1.3.3 HRM resource information There is a well-maintained, regularly updated and comprehensive database on HRM resources available within and outside the organisation. All HRM planning and delivery activities are based on the analysis and use of such data.

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Most of the information regarding HRM resources is maintained in computers but they do not have any standard process in which data could be fed in a structured manner. Employees seem to be happy with traditional manual record keeping systems. Manual records are tedious and time consuming to locate. They do refer to these data during HR planning but utilized it very rarely while delivering. (@Sujesh: Dont know in context of BOK)

SUJESH will be responsible till here

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NIRJAL will be responsible from here

2.1.4HRM Strategy and Policy Overall HRM strategy adopted by the BoK is given under this category. The short-term goal and long term goals adopted by the BoK indicates the overall growth. Hence it is important that BoK should update and monitor its HRM Strategy and Policy in regular basis. The various sub-tools under this category are utilize to measure the over HRM strategy and policy. 2.1.4.1 HRM Policy, Strategy and plan HRM policies and strategies are prepared but they cover limited aspects of HRM, mostly training. HRM plan focuses on key short-term needs. All HR activities are guided by clear HR policies and guidelines. However, it is observed that they are focused on short term solutions only. Trainings are more focused on technical aspect which is a very short-term as technical trainings are scheduled during the procurement of equipment. Long term training for both technical and non-technical people are rarely planned and executed. 2.1.4.2 Strategic linkage on HRM Corporate / business goals, strategies and plans are taken as a basis for developing HRM policies and actions. However, HRM plan is also developed to respond to other immediate needs. HRM does not influence corporate strategies. With fast pace of technological change around the globe, BoK is providing all possible services in the country to maintains its dominance. However, to address new changes, a very interim HR planning is done as same employees are appointed to multiple projects. They do plan to meet the corporate / business goals. However, these plans do not last long, which makes it difficult to achieve the corporate /business goals.

2.1.4.3 Alignment with HRM

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HRM policies, strategies, practices generally support the development of the people and utilisation of their competencies. There is a good deal of linkage between the two. 2.1.5 HRM Mechanism and Methods The overall work performed by the HRD department depends upon the HRM Mechanism and Methods developed by the organisation. The comprehensive HRM policy and system should be translated into the HRD program. Overall program and planning that are going to be adopted by HRD in regard with staff management, training program, developing a career planning mechanism is catered by the HRM Mechanism and Methods. The indicator under this category as defined by BoK is mentioned with the following sub headings. 2.1.5.1 HRD alignment with HRM Development needs of employees are assessed, mostly in an informal and unsystematic way. The exercise focuses only on training needs. No formal policies and systems are in place to guide the activity. We can find clear policies and guidelines for HRM whereas we did not find any clear documents and practices that exist for Human Resource Development (HRD) in Bank of Kathmandu. The trainings are normally provided only for technical staffs whereas non-technical employees do not receive any formal training. 2.1.5.2 HRD evaluation and feedback There are no formal policies and systems in place to evaluate HRD process and outcomes and to give feedback on learning and performance. Evaluation is not done at any level. There are no formal process and guidelines of job analysis in Bank of Kathmandu. Staffs from GSM Billing department can attend training related to Network. Similarly staffs from PSTN billing system can attend training on switching system. This shows that staffs are sent for training without evaluating its relevance on the job description. 2.1.5.3 HRD program planning and management There are some procedures and norms established for planning, designing and implementing HRD programmes, but they are short of professional standards. They are not followed consistently and seriously. At times higher management in Bank of Kathmandu and HR department have meetings for HRD programmes but these have been limited only to meetings and papers. They do not even have a job description till date. Staffs in Bank of Kathmandu dont have any formal description on the difference between JOB DESCRIPTION and POSITION. 28

2.1.5.4 Number and variety of training program Training opportunities are available both in-house and outside to a large number of staff categories. They meet a variety of training needs of the employees of the organization. But they focus mainly on junior and middle level staff and not on senior managers. Training Need Analysis has not been done in Bank of Kathmandu. During our interview session, the HR staff expressed that most of the times technical trainings are sent after the project is completed which should have been other way round. Normally, abroad trainings are provided to technical staffs at officer level of 7 & 8 and very often to higher levels i.e. 9 and 10 levels. In house trainings for lower levels are provided at training centre at Babarmahal. 2.1.5.5 Number and variety of development program Development opportunities are available to a large number of staff categories. They meet a variety of development needs of the employees of the organization. There is no judicious mix of on-site and off-site development programmes. Development opportunities do exist for most of the staff. Though abroad trainings are not scheduled to non-technical staffs, a regular in-house faculty related trainings are being conducted in Telecom Training Centre. 2.1.5.6 Use of work systems for development There is an acceptance of the value of work systems for employee development. Numbers of work systems are used for developing employees purposely by a number of mangers. There is an acceptance of the value of work systems for employee development. Departmental heads are encouraged to develop work systems within their department which helps them to finish their work in timely manner. Various set of policies are developed within the department and various software are used by the support function for quick processing of their job. 2.1.5.7 Career planning and development supports Career planning and development support policies and practices (e.g. career counselling, workshops, job posting, outplacements, career-related training and educational programmes) do not exist for employees career growth. There is no awareness of this need in the organization and resources are not available. As there is no formal awareness and training practices to develop HRM in BoK, career planning and development support policies and practices are non existent. We observed thatthere are

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hierarchies / ranks / level where people can reach but it takes years to reach to a managerial position. With change in globalisation and steady progress in realization in need for career planning and development, it has not been formally implemented yet. 2.1.5.8 Diagnosis of organizational effectiveness and renewal issues Occasional diagnosis of organisational effectiveness and development issues is done, but mostly under external pressures or for some ulterior reasons. There is no built-in system for diagnosis. There is need to have professional supports for the diagnosis of the issues or some set of policies can be developed with the help of external support to monitor and tracking of the issues. If the organization can develop a system to log any issues that impact the overall image of the organization can be prioritize and risk analysis of such issues can be done by the top level management on more organized way. 2.1.5.9 Organizational change and development interventions Major issues are often addressed through planned change programmes. There is an internal system and some capacity to design and manage such programmes. External supports are frequently sought. The process is not very participatory and there is not much empowerment effects. Considering a competitive environment in the sector, the organization is going through massive change for which management and the people within the organization need to be well prepared for the change. For this activity, BoK has done couples of study hiring national and international experts. 2.1.6. HRM Outcomes The overall HRM outcomes is measured on Employee performance capacity, various development program developed by the organization, behavioural change of the employee irrespective of their work and life balance, substantial increased in their performance and productivity. All these elements lead to the customers satisfaction, which is kept by the BoK on its top-most priority.

2.1.6.1 Employee performance capacity

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Organisational members have a high level of performance capacity in core capabilities necessary for the business as a result of HRM activities. Their potential has substantially enhanced and they have flexible and adaptable ability to learn and change. With the proper coordination of HRM and Change Management Department people are now more aware towards change and have realized that there should be change within the organization. With the activities performed by HR, people are now more competent in what they do and are more willing to learn. 2.1.6.2Qualitative change in employees Many employees have demonstrated some changes in a few job-related behaviours(e.g. initiatives, customer orientation, result conscious, quality focus, and promptness) through their participation in HRM activities. Lately, due to the awareness and realisation in development of HRM, several activities are being conducted on regular intervals. Besides technical aspects employees are getting trained on the behavioural aspects as well, specially after being shareholder of the organization. 2.1.6.3Employee performance and productivity Some improvements in the quality of performance of the employees participating in HRM activities have been noticed. Though their productivity has also improved, the change is not consistent. 2.1.6.4Customer Satisfaction Some of the customers are satisfied. Level of satisfaction is moderate. Customer satisfaction is the ultimate goal of the service provider. Various activities done by the BoK ultimately leads towards to serving its customers better. In this regards, BoK has always given high priority to its customer by providing various products through its trained customer care staff. Further BoK is expanding its product line through highly skilled professional e.g. ADSL for higher customer satisfaction.

NIRJAL will be responsible Till here

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CHAPTER 3

UMESH will be responsible from here

Assessment of HRM in Bank of Kathmandu
3.1 Strength and Weakness From the HR Assessment matrix, we can clearly analyze the area of strength and weakness of the organisation's HRM Function. Most of the indicators lie between 3 and 4 which mean the overall working area of this function is satisfactory. However, it is still important to analyze

each heading to know the strength and weakness of the organisation.

3.1.1 HRM Capacity: It is one of the strongest areas in the HRM functions.

Most of the component in this area can

achieve the goals that are defined in this instrument. It is recommended for the organisation that they should keep this component constant to help them build the overall HRM capacity.

3.1.2 HRM climate: The organisation feels the importance of this area and there is room for improvement. Theoretically, the organization's policy is well structured but practically, it has not being followed.

3.1.3 HRM Information: BoKfeels that this is one of the assets for the country as it is a dominant service provider. However, the proper record keeping system is not up to the level which in turn affects the effectiveness of HR Department. So to fulfil this weakness they have initiated the process (installation of ERP system) for proper database.

3.1.4 HRM Strategy and Policy: There still is room to grow in this area as well because to sustain in the competition it is important have a effective HRM Strategy and Policy.

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3.1.5 HRM Mechanism and Methods: This is the weakest facet of the HR as described earlier in this report. We can find a clear policies and guidelines for HRM where as we did not find any clear documents and practices that existed for HRD in Bank of Kathmandu. The trainings are normally provided only for technical staffs where as non-technical employees receive any formal training.

Formal HRD process cannot be seen in BoK in absence of proper job analysis. It can be seen that the employees are sent for the trainings not relevant to their job description. This depicts a vacant space in the part of BoK for proper career development and HR practices. In normal case, it would take years to be promoted to a managerial level after being appointed in an officer level initially. This has been realised but a formal process is yet to be implemented.

3.1.6 HRM Outcomes: This is one of the core areas in the HRM functions. The overall management is focused in this area because it is directly linked with the employee performance capacity and productivity. The growth of the organization depends on the productivity level of its employees. If the employees are satisfied, the productivity level of the organization increases. Hence, it is a primary job of the HRM function to increase HRM indicators.

3.2Linkage between HRM and Organization Performance The overall performance of the organization is based on the HRM policy. The HRM function should be formulated such that it complements the goal of the organization. If the policy and

procedure mentioned in the HRM document is timely monitored and tracked by the management in a scientific way, the organization's performance will be increased. As the overall performance of the staff is based on the HRM functions, it is importantfor the organization to strengthen HRM policy and procedure. HRM is an indicator of an organization to judge its failure or success. If the organization fails to manage its human resource well, it leads a disaster. So the linkage between HRM function and Organization Performance is directly proportional.

UMESH will be responsible till here

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RAKESH will be responsible from here

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CHAPTER 4

CONCLUSION AND RECOMMENATION

4.1. Conclusion Out of various resources available in an organization, Human Resource is ranked as most important resource. In order to utilize other resources in an organization, skilled and competent human resources have to be mobilized. For better customer service, production of goods and optimal utilization of raw materials, machineries and finance, it needs proper human resources. No matter how sophisticated technology and machinery BoK uses, it will all remain unproductive in absence of competent human resources.

Gone are the days when humans were used as machines. Today, in any organization management of employee always comes on top priority. By proper mobilization and utilization of competent human resources, present and future of an organization can be determined. Proper, planned and timely investment in Human Resource Development, Management can increase employee productivity and thereby, increases organization stability and growth, where as opposite will tend to produce unproductive employee and thereby, creating unstable and unsustainable situation for an organization.

4.2 Recommendation As we have gone through the study of HR system in Bank of Kathmandu, we observed that HR system is in function but needs a lot of improvements. We have tried to list out some such points which would help the organization to improve its operations in the future.

4.2.1 Staffing (Retention / Recruitment / Promotion) Since the turnover of BoK employees is very low i.e. 0.25% (Excluding Retirement) Employee retention is not a problem in this organization. The recruitment process is unbiased and fair. However, it is observed that promotion process of the organization has some flaws.

Till last year female employees are given high priority in internal promotion. They are eligible for promotion after serving only three years whereas the male employees are eligible only after four years of service in a particular level. This has 35

created unhealthy relationship between female and male employees. Male employees feel that females are given unjustified preference and feel de-motivated. The provisions should be equal to all. After strong protest from male employee, now management has corrected this provision.

Similarly while doing the marking system for internal promotion; female employees are getting more geographical marks than male even though they are located in the same place which is the one of the causes among many due to which employee get de-motivated.

With the information provided, we observed that there is problem in the automatic promotion scheme of BoK. Employees at BoK are qualified for promotion after having served in the same post for 4 years provided that they scored the required percentage in their appraisal. However, BoK has a policy of automatic promotion for the staffs having served in the same post for 8 years and scoring 60% on 20-128. The Problem with this system is that for the employees who are promoted in 8 years criterion, there is very little chance of them being given newer responsibilities. They are with the same work which they were doing in the post prior to their promotion. This might result in de-motivation on the part of employees. A promotion is expected with newer responsibilities which is not the case at BoK. In some extreme cases, an employee may be working in same job for 16 or 20 years. This stagnate the growth of the employee and hampers their performance. So, the HR should devise plans to avoid such situations and should develop programs that will be beneficial for the career development of its employees.

4.2.2 Training and Development: HRM employees are well educated and competent in their operation and daily work but according to the change in work nature and globalization, these employees need further trainings so that they are well aware of the recent changes in the HR sector. Besides these trainings, the staffs should also have regular trainings which would refresh their knowledge on HR.

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Trainings are normally provided to technical staffs but should not be made limited to them. There are many departments and BoK should ensure that staffs of all the departments are equally competent in order to work in synchronization. If BoK could increase activities like sending its staffs for non relevant trainings, staffs would be more motivated.

4.2.3 Performance Management: Though the promotional process is based on the performance appraisal, we observed during the interview, that proper grading is not awarded by the supervisors. Two different aspects is being realized, some supervisors award the grades on average to all regardless of their actual performances while some award at the lowest possible grading even for high performers. This practice de-motivates the highly performing employee while it encourages the under-performers. In order to encourage, the evaluating supervisors to appraise the subordinates correctly. The HR should arrange events to educate the importance of the performance appraisal. 4.2.4 Employee size of organization: Currently BoK has more than five thousand five hundred staffs out of which 23% staffs are level one which has nothing to do with productivity of organization. Similarly job nature of level 4 and level 5 staffs are similar and they are purely administrative staff which is around 23%. These staffs have also very less contribution in productivity of organization. BoK should entirely layoffs all the level 1 staffs by voluntary retirement system and work related to such type of staff should be outsourced. Similarly BoK should layoffs the level 4 and 5 staffs by voluntary retirement system and down size these staffs. BoK should layoffs unproductive staffs in other level also. 4.2.5 Ratio of Technical and non technical employee: BoK is technical service providing organization. Therefore non technical staffs have less contribution in productivity of organization. It is general practice that any technical organization should not have more than 25% non technical staff. Looking the number of level 4 and level 5 employee it is just opposite i.e. 36% technical and 64% non technical. BoK should reduce the number of level 4 and level 5 non technical staffs by voluntary retirement scheme.

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4.2.6 Revision of promotion process: In promotion of above level 8, there are 25 marks for presentation out of 100, which is very high weight-age on particular area. In government organization like Bank of Kathmandu where Managing Director (MD) is appointed directly by government, this presentation gives very high place of manipulation and practically it is seen that too juniors are getting promotion with the influence of political parties through which MD has been appointed.This promotion system has de-motivated many senior officers. Therefore it needs to be revision.

RAKESH will be responsible till here

REFERENCES 1. 2. 3. www.ntc.net.np Annual report of Bank of Kathmandu 2011/12 The HRM Assessment Instrument

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