INTRODUCTION TO HUMAN RESOURCE MANAGEMENT AND ENVIRONMENT

INTRODUCTION
Human Resource Management (HRM) is a relatively new approach to managing people in any organisation.
People are considered the key resource in this approach. it is concerned with the people dimension in
management of an organisation. Since an organisation is a body of people, their acquisition, development of
skills, motivation for higher levels of attainments, as well as ensuring maintenance of their level of
commitment are all significant activities. These activities fall in the domain of HRM.
Human Resource Management is a process, which consists of four main activities, namely, acquisition,
development, motivation, as well as maintenance of human resources.
Scott, Clothier and Spriegel have defined Human Resource Management as that branch of management
which is responsible on a staff basis for concentrating on those aspects of operations which are primarily
concerned with the relationship of management to employees and employees to employees and with the
development of the individual and the group.
Human Resource Management is responsible for maintaining good human relations in the organisation. It is
also concerned with development of individuals and achieving integration of goals of the organisation and
those of the individuals.
NorthCott considers human resource management as an extension of general management, that of prompting
and stimulating every employee to make his fullest contribution to the purpose of a business. Human resource
management is not something that could be separated from the basic managerial function. It is a major
component of the broader managerial function.
French Wendell, defines Human resource management as the recruitment, selection, development,
utilisation, compensation and motivation of human resources by the organisation.
According to Edwin B. Flippo, Human resource management is the planning, organising, directing and
controlling of the procurement, development, resources to the end that individual and societal objectives are
accomplished. This definition reveals that human resource (HR) management is that aspect of management,
which deals with the planning, organising, directing and controlling the personnel functions of the enterprise.

NATURE OF HUMAN RESOURCE MANAGEMENT

The emergence of human resource management can be attributed to the writings of the human relationists who
attached great significance to the human factor.
Lawrence Appley remarked Management is personnel administration. This view is partially true as
management is concerned with the efficient and effective use of both human as well as non-human resources.
Thus human resource management is only a part of the management process. At the same time, it must be
recognised that human resource management is inherent in the process of management. This function is
performed by all the managers. A manager to get the best of his people, must undertake the basic
responsibility of selecting people who will work under him and to help develop, motivate and guide them.
However, he can take the help of the specialised services of the personnel department in discharging this
responsibility.
The nature of the human resource management has been highlighted in its following features:
1.

Inherent Part of Management: Human resource management is inherent in the process of

management. This function is performed by all the managers throughout the organisation rather that by the
personnel department only. If a manager is to get the best of his people, he must undertake the basic
responsibility of selecting people who will work under him.
2.

Pervasive Function: Human Resource Management is a pervasive function of management. It is

performed by all managers at various levels in the organisation. It is not a responsibility that a manager can
leave completely to someone else. However, he may secure advice and help in managing people from experts
who have special competence in personnel management and industrial relations.
3.

Basic to all Functional Areas: Human Resource Management permeates all the functional area of

management such as production management, financial management, and marketing management. That is
every manager from top to bottom, working in any department has to perform the personnel functions.
4.

People Centered : Human Resource Management is people centered and is relevant in all types of

organisations. It is concerned with all categories of personnel from top to the bottom of the organisation. The
broad classification of personnel in an industrial enterprise may be as follows : (i) Blue-collar workers (i.e.
those working on machines and engaged in loading, unloading etc.) and white-collar workers (i.e. clerical
employees), (ii) Managerial and non-managerial personnel, (iii) Professionals (such as Chartered Accountant,
Company Secretary, Lawyer, etc.) and non-professional personnel.
5.

Personnel Activities or Functions : Human Resource Management involves several functions

concerned with the management of people at work. It includes manpower planning, employment, placement,

training, appraisal and compensation of employees. For the performance of these activities efficiently, a
separate department known as Personnel Department is created in most of the organisations.
6.

Continuous Process : Human Resource Management is not a one shot function. It must be performed

continuously if the organisational objectives are to be achieved smoothly.

7.

Based on Human Relations : Human Resource Management is concerned with the motivation of

human resources in the organisation. The human beings cant be dealt with like physical factors of production.
Every person has different needs, perceptions and expectations. The managers should give due attention to
these factors. They require human relations skills to deal with the people at work. Human relations skills are
also required in training performance appraisal, transfer and promotion of subordinates.

PERSONNEL MANAGEMENT VS HUMAN RESOURCE MANAGEMENT :

Contemporary Human Resource Management, as a part and parcel of management function, underscores
strategic approach to management in areas of acquisition, motivation, and management of people at work.
Human Resource Management derives its origin from the practices of the earlier personnel management,
which assisted in the management of people in an organisation setup. Human Resource Management
leverages setting up the systems and procedures for ensuring efficiency, controlling and providing equality of
opportunities for all working for the organisation.
Human Resource Management (HRM) differs from Personnel Management (PM) both in scope and
orientation. HRM views people as an important source or asset to be used for the benefit of organisations,
employees and society. It is emerging as a distinct philosophy of management aiming at policies that promote
mutuality-mutual goals, mutual respect, mutual rewards and mutual responsibilities. The belief is that policies
of mutuality will elicit commitment, which in turn, will yield both better economic performance and greater
Human Resource Development (HRD). Though a distinct philosophy, HRM cannot be treated in isolation. It is
being integrated into the overall strategic management of businesses. Further, HRM represents the latest term
in the evolution of the subject.
There are several similarities between Human Resource Management (HRM) and Personnel Management
(PM) (a) Both models emphasise the importance of integrating personnel/HRM practices with organisational
goals. (b) Both models vest Personnel/HRM firmly in line management. (c) Human Resource Management
(HRM) and Personnel Management (PM) both models emphasise the importance of individuals fully
developing their abilities for their own personal satisfaction to make their best contribution to organisational
success. (d) Both models identify placing the right people into the right jobs as an important means of
integrating personnel/HRM practice with organisational goals.
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OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

According to Scott, Clothier and Spriegal, The objectives of Human Resource Management, in an
organisation, is to obtain maximum individual development, desirable working relationships between
employers and employees and employees and employees, and to affect the moulding of human resources as
contrasted with physical resources.
The basic objective of human resource management is to contribute to the realisation of the organisational
goals. However, the specific objectives of human resource management are as follows :
(i) To ensure effective utilisation of human resources, all other organisational resources will be efficiently
utilised by the human resources.
(ii) To establish and maintain an adequate organisational structure of relationship among all the members of an
organisation by dividing of organisation tasks into functions, positions and jobs, and by defining clearly the
responsibility, accountability, authority for each job and its relation with other jobs in the organisation.
(iii) To generate maximum development of human resources within the organisation by offering opportunities
for advancement to employees through training and education.
(iv) To ensure respect for human beings by providing various services and welfare facilities to the personnel.
(v) To ensure reconciliation of individual/group goals with those of the organisation in such a manner that the
personnel feel a sense of commitment and loyalty towards it.
(vi) To identify and satisfy the needs of individuals by offering various monetary and non-monetary rewards.

In order to achieve the above objectives, human resource management undertakes the following
activities :
(i)

Human Resource Planning, i.e., determining the number and kinds of personnel required to fill

(ii)
(iii)
(iv)

various positions in the organisation.

Recruitment, selection and placement of personnel, i.e., employment function.
Training and development of employees for their efficient performance and growth.
Appraisal of performance of employees and taking corrective steps such as transfer from one job to
another.

(v)
(vi)

Motivation of workforce by providing financial incentives and avenues of promotion.

Remuneration of employees. The employees must be given sufficient wages and fringe benefits to

(vii)

achieve higher standard of living and to motivate them to show higher productivity.
Social security and welfare of employees.
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ELEMENTS OF HUMAN RESOURCE MANAGEMNET

HRM is concern with People dimension of the organisation. In order to achieve organisational
objectives it is important to acquire HR, develop their skills, motivate them for high performance and ensure
that they continue to maintain their commitment and loyalty towards the organisation.
The scope of HRM lies in the fact that that it involves an integrated use of training and development,
organisational development and career development to improve individual, group and organisational
effectiveness. The different elements HRM are:
1. Training and Development:
HRM involves identification of individual potentialities and helping in the development of key
competencies through planned learning process. The competencies are to be developed to enable
individuals to perform current as well as future jobs.
2. Organisational development:
This element assures healthy inter and intra-unit relationships. It helps work groups in initiating and
managing change.
3. Career Development:
It is assuring an alignment of individual career planning and organisational career management. It is a
process of achieving an optimal match of individual and organisational needs.
4. Job Design:
This element defines tasks, authority and systems and also ensures integration of individual jobs across
the unit.
5. Human Resource Planning:
It involves determine the organisation HR needs, Strategies and philosophies.
6. Performance Management Systems:
The Performance management ensures linkage between individual and organisational goals. It aims at
ensuring that every individuals efforts and actions support the organisational goals.
7. Selection and Staffing:
HR is a process of matching people and their career needs and capabilities with the jobs and career
paths.
8. Compensation and Benefits:
Here the focus is on assuring fair, consistent and equitable compensation and benefits to the work
force.
9. Employee Assistance:
The focus of employee assistance is to provide problem solving/counselling to individual employees.
The purpose is to help employees in overcoming personal and job related problems.
10. Union Labour Relations:
This variable assures healthy union organisation relationship. It aims at creating on environment of
industrial peace and harmony.
11. HR research and Information Systems and Audit:
This element ensures a reliable and fool proof HR information base. It is not only evaluates personal
policies and programmes but also highlights the need and areas of change.
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THE SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of human resource management outlined below includes an outline of transformation and
development issues, tentative generic skills required in performing HRM roles, as well as the roles of a human
resource management practitioner (line management and HRM professionals). With regard to the latter, the
assumption is made that roles are inter-linked and interdependent, even though these relationships may not be
expressly stated in each case.
Transformation and development issues

Knowledge management which entails accumulating & capturing

Knowledge in large organisations for future application & use (organisation memory)
Reconciliation management
Work creation as opposed to job creation
Manage the transfer of HRM functions and skills to line management
Marketing of HRM to line management
Development of contextual approaches to HRM
Multi-skilling and /or multi-tasking
Increased societal responsibility
Managing people in virtual work environments
Focus on deliverables rather than doable
Develop additional means of assessing HRM
Appreciation and assessment of intellectual capital
Take HRM from a business partner to a business itself / Managing HRM as a business unit
Adviser / consultant to line management
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Supportive generic skills

This is not intended to be final outline of human resource skills but the following have emerged during the
process as important skills for human resource practitioner to possess. These are:
Project management
Consulting skills
Entrepreneurship
Self management
Communication skills
Facilitation skills
Presentation skills
Skills for transforming groups into self-directed mutually controlled high performing work teams
Trans-cultural skills
Mediation & arbitration skills
Financial skills
Problem-solving
Diagnostic skills

Core roles in Human Resource Management

The core roles of human resource management are grouped below into four categories. The titles
of the

clusters are tentative, and are open for comment.

PLANNING AND ORGANISING FOR WORK,

PEOPLE AND HRM
Strategic perspective
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 Organisation design
Change management
Corporate Wellness management
PEOPLE ACQUISITION AND DEVELOPMENT
Staffing the organisation
Training & development
Career Management
Performance Management
Industrial relations
ADMINISTRATION OF POLICIES , PROGRAMMES & PRACTICES
Compensation management
Information management
Administrative management
Financial management

FUNCTIONS OF HUMAN RESOURCE MANAGEMENT.

The main functions of human resource management are classified into two categories:
(a) Managerial Functions and (b) Operative Functions
(a) Managerial Functions
Following are the managerial functions of Human Resources Management.
1.

Planning: The planning function of human resource department pertains to the steps taken in

determining in advance personnel requirements, personnel programmes, policies etc. After determining how
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many and what type of people are required, a personnel manager has to devise ways and means to motivate
them.
2.

Organisation: Under organisation, the human resource manager has to organise the operative

functions by designing structure of relationship among jobs, personnel and physical factors in such a way so
as to have maximum contribution towards organisational objectives. In this way a personnel manager
performs following functions:
(a)

preparation of task force;

(b)

allocation of work to individuals;

(c)

integration of the efforts of the task force;

(d)

coordination of work of individual with that of the department.

3.

Directing: Directing is concerned with initiation of organised action and stimulating the people to

work. The personnel manager directs the activities of people of the organisation to get its function performed
properly. A personnel manager guides and motivates the staff of the organisation to follow the path laid down
in advance.
4.

Controlling: It provides basic data for establishing standards, makes job analysis and performance

appraisal, etc. All these techniques assist in effective control of the qualities, time and efforts of workers.

(b) Operative Functions : The following are the Operative Functions of Human Resource Management
1.

Procurement of Personnel: It is concerned with the obtaining of the proper kind and number of

personnel necessary to accomplish organisation goals. It deals specifically with such subjects as the
determination of manpower requirements, their recruitment, selecting, placement and orientation, etc.
2.

Development of Personnel: Development has to do with the increase through training, skill that is

necessary for proper job performance. In this process various techniques of training are used to develop the
employees. Framing a sound promotion policy, determination of the basis of promotion and making
performance appraisal are the elements of personnel development function.
3.

Compensation to Personnel: Compensation means determination of adequate and equitable

remuneration of personnel for their contribution to organisation objectives. To determine the monetary
compensation for various jobs is one of the most difficult and important function of the personnel
management. A number of decisions are taken into the function, viz., job-evaluation, remuneration, policy,

inventive and premium plans, bonus policy and co-partnership, etc. It also assists the organisation for adopting
the suitable wages and salaries, policy and payment of wages and salaries in right time.
4.

Maintaining Good Industrial Relation: Human Resource Management covers a wide field. It is

intended to reduce strifies, promote industrial peace, provide fair deal to workers and establish industrial
democracy. It the personnel manager is unable to make harmonious relations between management and labour
industrial unrest will take place and millions of man-days will be lost. If labour management relations are not
good the moral and physical condition of the employee will suffer, and it will be a loss to an organisation visa-visa nation. Hence, the personnel manager must create harmonious relations with the help of sufficient
communication system and co-partnership.
5.

Record Keeping: In record-keeping the personnel manager collects and maintains information

concerned with the staff of the organisation. It is essential for every organisation because it assists the
management in decision making such as in promotions.
6.

Personnel Planning and Evaluation: Under this system different type of activities are evaluated such

as evaluation of performance, personnel policy of an organisation and its practices, personnel audit, morale,
survey and performance appraisal, etc.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Human Resource Management has a place of great importance. According to Peter F. Drucker, The proper
or improper use of the different factors of production depend on the wishes of the human resources. Hence,
besides other resources human resources need more development. Human resources can increase cooperation
but it needs proper and efficient management to guide it.
Importance of personnel management is in reality the importance of labour functions of personnel department
which are indispensable to the management activity itself. Because of the following reasons human resource
management holds a place of importance.

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1. It helps management in the preparation adoption and continuing evolution of personnel programmes and
policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training and development and appreciates the human
assets.
4. It prepares workers according to the changing needs of industry and environment.
5. It motivates workers and upgrades them so as to enable them to accomplish the organisation goals.
6. Through innovation and experimentation in the fields of personnel, it helps in reducing casts and helps in
increasing productivity.
7. It contributes a lot in restoring the industrial harmony and healthy employer-employee relations.
8. It establishes mechanism for the administration of personnel services that are delegated to the personnel
department.
Thus, the role of human resource management is very important in an organisation and it should not be
undermined especially in large scale enterprises. It is the key to the whole organisation and related to all other
activities of the management i.e., marketing, production, finance etc.
Human Resource Management is concerned with the managing people as an organizational resources rather
than as factors of production. It involves a system to be followed in business firm to recruit, select, hire, train
and develop human assets. It is concerned with the people dimension of an organization. The attainment of
organizational objectives depends, to a great extent, on the way in which people are recruited, developed and
utilized by the management. Therefore, proper co-ordination of human efforts and effective utilisation of
human and others material resources is necessary.

Legacy of HRM :
The legacy of HRM needs to be analysed from two different perspectives to get a better insight into its nature.
These are (a) the Western context (b) the Indian context.
(a) Western Context : The origin of HRM, as is known today, date back to ancient times. One find a reference
of HR policy as early as 400 B.C., when the Chaldeans had a sound incentive wage plan. All that has changed
over the years is the status of the employees, their roles and relationship-inter personal and inter-group. The
status of labour prior to industrial revolution was extremely low and the relationships were characterised by
slavery, seldom and guild system. The slaves performed manual tasks to agricultural, military and clerical
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responsibilities. The efficiency levels were low due to over-dependence on negative incentives and negligence
of positive incentives.
The slavery structure was replaced by seldom, were neither slaves nor hired labourers. The structure was
related to rural and agrarian pursuits. Workers were offered positive incentives which resulted in enhanced
productivity and reduced need for supervision. Seldom disappeared during Middle Ages with growth in
manufacturing and commercial enterprises. It was replaced by the Guild System.
The guild system involved the owners, the journeyman and the apprentice. It was here that real HRM started.
One noticed, proper selection procedures being adopted, workers being imparted training and collective
bargaining being adopted to settle issues pertaining to wages and working conditions.
With the advent of Industrial Revolution, the guild system disappeared. The doctrine of laisser-faire was
advocated and the cottage system got transformed to factory system leading to enhanced specialisation. But
this period was dominated by many unhealthy practices like unhealthy work environment, long working
hours, increased fatigue rate, monotony, strains, likelihood of accidents and poor work relationship.
Progressive entrepreneurs like Owen believed that healthy work environment could be effectively used to
improve productivity. But his opinion faced severe opposition.
A major change was noticed in personnel practices after the World War I. The modern HRM started in 1920.
Groups were formed to conduct research on personnel problems. A number of studies were undertaken to
analyse the fallacies in the personnel field. For the first time, psychology was applied to management. The
Hawthorne studies advocated the need to improve industrial relations for increasing production. The
application of psychology brought a dramatic change in the work relationship and productivity started
increasing. But this prosperity ended during the great depression. Thereafter, organisations started offering
fringe benefits to workers to induce them to work. Findings of behavioural science were used to enhance
productivity.
Increasing number of organisations adopting manpower planning, management development, techniques of
personnel management, etc. Personnel departments started stressing on management-individual employee
relationships. This was followed by setting up of labours relations department to negotiate and administer
collective bargaining. Federal interest gave rise to manpower management department. The members of these
departments were technically competent in testing, interviewing, recruiting, counselling, job evaluation
negotiation and collective bargaining. They also acquired expertise in wage and salary
administration, employee benefit schemes and services, training and development and other allied services.
The top management started encouraging line managers in middle management to consult personnel
departments in these respects. This department, later on acquired recognition as staff to the working-line. This

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led to multiplicity of personnel jobs instead of a single, stereotyped task. The personnel or human resource
manager became a part of top management.
In todays world, stress is on scientific selection, training and development. There is an increasing emphasis on
interrelationship between the leader, follower and the environment. Attempts are also on to provide scope to
an individuals personal dignity, status and sense of achievement. The concern is increasing profits through
people.
HRM in India is centuries old. The first reference of HRM was provided by Kautilya as early as 4th century
B.C. in his book
Arthashastra. The work environment had logical procedures and principles in respect of labour organisation
such as ShreniWages were paid in terms of quantity and quality of work. Workers were punished for
unnecessary delay or spoiling of work. Kautilyas contribution was based on Shamrastra Concepts like job
description, qualifications for jobs, selection procedures, executive development, incentive system and
performance appraisal were very effectively analysed and explained.
The guild system prevailed in the Indian economy too. It was based on Varnashram or caste system and
resulted in division of labour accordingly. In the course of time, professions became hereditary. From 14th
century B.C. to the latter half of 10th century B.C., the relationship of employer-employee was marked with
justice and equity.
The HRM experienced full in mediaeval India due to foreign aggressions over the next 700 years. During the
Mughal rule,
Karkhanas were established, but the artisans and craftsmen were poor and lived on starvation level and the
productivity was low.
During the British rule, the work environment was appalling and full of inhuman cruelties. This continued till
1881 when the Factory Act was enacted. This Act provided for (i) weekly holidays (ii) fixation of working
hours (iii) fixation of minimum age for children at 7 years subject to a maximum working period of 7 hours a
day.
In 1890, the first labour organisation was formed and was known as Bombay Mill Hands Association. This
association started working for improving the work environment and for getting the
workers their rightful dues. The success of this association Few amongst these were Printers Union Calcutta
(1905), Postal Union, Bombay (1907) and Madras Labour Union (1918).

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The union movement was very weak till the early thirties. But the situation showed marked improvement 5
years before and after the Second World War. After independence, the activities of the personnel department
have multiplied.
Human resource department is expected to take care of welfare activities, employment, safety, training, wage
and salary administration, promotions, transfers, lay-off, improvement in living and working conditions,
health services, safety measurers, prevention and settlement of disputes, etc.

FUTURE CHALLENGES BEFORE THE MANAGERS

Because of continuous changing socio-economic, technological and political conditions, the human resource
managers of the future shall have to face more problems in the management of labour. The human resource
managers of today may find themselves obsolete in the future due to changes in environment if they do not
update themselves some of the important challenges which might be faced by the managers in the
management of people in business and industry are discussed below :

1.

Increasing Size of Workforce : The size of organisations is increasing. A large number of

multinational organisations have grown over the years. The number of people working in the organisation has
also increased. The management of increased workforce might create new problems and challenges as the
workers are becoming more conscious of their rights.
2.

Increase in Education Level : The governments of various countries are taking steps to eradicate

illiteracy and increase the education level of their citizens. Educated consumers and workers will create very
tough task for the future managers.
3.

Technological Advances : With the changes coming in the wake of advanced technology, new jobs are

created and many old jobs become redundant. There is a general apprehension of immediate unemployment.
In the competitive world of today, industry cannot hope to survive for long with old technology. The problem,
of unemployment resulting from modernisation will be solved by properly assessing manpower needs and
training of redundant employees in alternate skills.
4.

Changes in Political Environment : There may be greater

Governments interference in business to safeguard the interests of workers, consumers and the public at
large. Governments participation in trade, commerce and industry will also pose many challenges before
management. The Government may restrict the scope of private sector in certain areas in public interest. It
14

does not mean chances of co-operation between the Government and private sector are ruled out. In fact, there
will be more and more joint sector enterprises.
5.

Increasing Aspirations of Employees : Considerable changes have been noted in the worker of today

in comparison to his counterpart of 1950s. The workers are becoming more aware of their higher level needs
and this awareness would intensify further in the future workers.
6.

Changing Psychosocial System : In future, organisations will be required to make use of advanced

technology in accomplishing their goals while satisfying human needs. In the traditional bureaucratic model,
the organisations were designed to achieve technical functions with a little consideration given to the
psychosocial system. But future management would be required to ensure effective participation of lower
levels in the management of the organisation system.
7.

Computerised Information System : In the past, the automation of manufacturing processes had a

major effect upon the systems of production, storage, handling and packaging, etc. More recently, there has
been and in the future there will be the impact of revolutionary computerised information system on
management. This revolutionary development would cover two primary areas of personnel management
which are as follows :
(a)

The use of electronic computers for the collection and processing of data, and

(b)

The direct application of computers in the managerial decision making process.

8.

Mobility of Professional Personnel : Organisations will expand the use of boundary agents whose

primary function will be achieving coordination with the environment. One interesting fact will be an increase
in the mobility of various managerial and professional personnel between organisations. As individuals
develop greater technical and professional expertise, their services will be in greater demand by other
organisations in the environment.
9.

Changes in Legal Environment : Many changes are taking place in the legal framework within which

the industrial relations systems in the country are now functioning. It is the duty of the human resource or
personnel executive to be aware of these changes and to bring about necessary adjustments within the
organisations so that greater utilisation of human resources can be achieved. This, indeed, is and would remain
a major challenge for the personnel executive.
10. Management of Human Relations : On the industrial relations front, things are not showing much
improvement even after so many efforts by the government in this direction. Though a large number of factors
are responsible for industrial unrest but a very significant cause is the growth of multi unions in industrial
complexes having different political affiliations. Under the present conditions, it appears that inter-union
rivalries would grow more in the coming years and might create more problems in the industry.
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Management of human relations in the future will be more complicated than it is today. Many of the new
generation of employees will be more difficult to motivate than their predecessors. This will be in part the
result of a change in value systems coupled with rising educational levels. Greater skepticism concerning large
organisations and less reverence for authority figures will be more common. Unquestioning acceptance of
rules and regulations will be less likely.

New Role of Human Resource Management

Human Resource Management in the New Millenium has undergone a great revolution by questioning the
accepted practices and re-inventing the organisations as well as structures. Many traditional practices have
been thrown out. As an example, it can be seen that hierarchies are vanishing and there is greater emphasis on
flat organisations. It means a great deal of specialisation and skills. It also means upgrading the norms and
standards of work as well as performance.
The new role of human resource management is much more strategic than before. Some of the new directions
of the role of HRM can be summed up as follows:
1.

A Facilitator of Change: To carry people through upheaval requires the true management of human

resource.
2.

An Integrated Approach to Management: Rather than being an isolated function, human resource is

regarded as a core activity, one which shapes a companys values. In particular, this can have an impact on
customer service.
3. A Mediator: Establishing and balancing the new and emerging aspirations and requirements of the
company and the individual.
These changes, which are taking place, involve more commitment of the organisation to the development of
people by improving performance and cutting costs. As a result of this, the duration of tenure, which was
traditionally long standing, is now limited, future is becoming less certain, management opportunities are selfdetermined and motivational factors are more concerned with enhancing future employability rather than
loyalty to the company and, at the same time, the rewards are going up in terms of higher salaries. The future
creative careers, will require more involved approach to career development, which will include :
(i)

Share employees with strategic partner organisations (customers of suppliers) in lieu of internal

moves.
(ii)

Encourage independence : Employees may go elsewhere for career development, possibly to return in

a few years.
(iii)

Fund-groups of employees to set-up as suppliers outside the organisation.

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(iv)

Encourage employees to think of themselves as a business and of the organisations various

departments as customers.
(v)

Encourage employees to develop customers outside the organisation.

(vi)

Help employees develop self-marketing, networking and consultancy skills to enable them to search

out, recognise or create new opportunities for both themselves and the organisation.
(vii)

Identify skilled individuals in other organisations who can contribute on a temporary project basis or

part-time.
(viii)

Regularly expose employees to new people and ideas to stimulate innovation.

(ix)

Balance external recruitment at all levels against internal promotion to encourage open competition,

competitive tendering for jobs to discourage seeing positions as someones territory which causes selfprotective conformity.
(x)

Forster more cross-functional teamwork for self-development.

(xi)

Eliminate the culture of valuing positions as career goals in favour of portraying a career as a

succession of bigger projects, achievements and new skills learned. The concept of position is part of the
outside static concept of the organisation. Positions are out. Processes and projects are in.
(xii)

Abandon top-down performance appraisal in favour of self-appraisal based on internal customer

satisfaction surveys and assessing people as you would suppliers.

(xiii)

Replace top-down assessment processes with self-assessment techniques and measure performance in

term of results.

Functions of a Human Resource Manager

A human resource manager, charged with fulfilling the objectives of an organisation, should be a leader with
high intellectual powers, a visionary and a philosopher who provides the initiative to shape the future in terms
of leading the human beings in an organisation towards more prosperous and progressive policies.

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1.

Human Resource Man as an Intellectual : The basic skill in the human resource field as compared to

technologists or financial experts is the skill to communicate, articulate, understand and above all, to be an
expert when it comes to putting policies and agreements in black and white. The personnel mans skill lies in
his command over the language. A personnel man has to deal with employees and he must possess the skills of
conducting fruitful and systematic discussions and of communicating effectively. He should also be in a
position to formulate principles and foresee the problems of the organisation. This means that he would
require the mental ability to deal with his people in an intelligent manner as well as to understand what they
are trying to say.
2.

Human Resource Man as an Educator : It is not enough that a human resource man has command-

over the language, which, however, remains his primary tool. He should be deeply interested in learning and
also in achieving growth. Basically, human beings like to grow and realise their full potential. In order to
harmonise the growth of individuals with that of the organisation, a personnel administrator must not only
provide opportunities for his employees to learn, get the required training and assimilate new ideas but also he
himself should be a teacher. A personnel man who simply pushes files and attends labour courts for
conciliation purposes and other rituals of legal procedure for the settlement of industrial disputes is not a
personnel administrator of the future.
3.

Human Resource Man as a Discriminator : A human resource administrator must have the capacity

to discriminate between right and wrong, between that which is just and unjust and merit and non-merit. In
other words, he should be a good judge when he sits on a selection board, a fair person when he advises on
disciplinary matters and a good observer of right conduct in an organisation.
4.

Human Resource Man as an Executive : The human resource man must execute the decisions of the

management and its policies with speed, accuracy and objectivity. He has to streamline the office, tone up the
administration and set standards of performance. He has to coordinate the control functions in relation to the
various other divisions and, in doing so he should be in a position to bring unity of purpose and direction in
the activities of the personnel department. He must ask relevant questions and not be merely involved in the
office routine whereby the status quo is maintained. He should have the inquisitiveness to find out causes of
delay, tardy work and wasteful practices, and should be keen to eliminate those activities from the personnel
functions which have either outlived their utility or are not consistent with the objectives and purposes of the
organisation.

5.

Human Resource Man as a Leader : Being basically concerned with people or groups of people, and

being placed in the group dynamics of various political and social functions of an organisation, a Human
resource man must not shirk the role of leadership in an organisation. He, by setting his own example and by
working towards the objectives of sound personnel management practices, must inspire his people and
18

motivate them towards better performance. He should resolve the conflicts of different groups and build up
teamwork in the organisation.
6.

Human Resource Man as a Humanist : Deep faith in human values and empathy with human

problems, especially in less developed countries, are the sine qua non for a Human resource man. He has to
deal with people who toil at various levels and partake of their joys and sorrows. He must perform his
functions with sensitivity and feeling.
7.

Human Resource Man as a Visionary : While every leading function of an organisation must evolve

its vision of the future, the primary responsibility for developing the social organisation towards purposive
and progressive action fall on the personnel man. He should be a thinker who sets the pace for policy-making
in an organisation in the area of human relations and should gradually work out new patterns of human
relations management consistent with the needs of the organisation and the society. He must ponder on the
social obligations of the enterprise, especially if it is in the public sector, where one has to work within the
framework of social accountability. He should be in close touch with socio-economic changes in the country.
He should be able to reasonably forecast future events and should constantly strive to meet the coming
challenges.

Role and Challenges of Human Resource Manager

Human Resource (HR) Department is established in every organisation under the charge of an executive
known as Human Resource Manager. This department plays an important role in the efficient management of
human resources. The human resource department gives assistance and provides service to all other
departments on personnel matters. Though personnel or human resource manager is a staff officer in relation
to other departments of the enterprise, he has a line authority to get orders executed within his department.
The human resource manager performs managerial functions like planning, organising, directing and
controlling to manage his department. He has also to perform certain operative functions like recruitment,
selection, training, placement, etc., which the other line managers may entrust to him. He is basically a
manager whatever may be the nature of his operative functions. The status of Human Resource Manager in an
organisation depends upon the type of organisation structure.

Role of Human Resource Manager in an Organisation

In most of the big enterprises, human resource department is set up under the leadership of personnel manager
who has specialised knowledge and skills. The human resource manager performs managerial as well as
19

operative functions. Since he is a manager, he performs the basic functions of management like planning,
organising, directing and controlling to manage his department. He has also to perform certain operative
functions of recruitment, selection, training, placement, etc., which the problems to management, the human
resource managers attach highest priority to the settlement of industrial disputes than anything else.
The role of human resource management in industry is underlined by the complex and dynamic nature of
environment under which the modern large-scale industries function. The impact of technology on
organisation structure, politicisation of workers unions, and the growing consciousness of industrial
employees about their rights and privileges, have made the role of personnel management increasingly more
important in industrial undertakings. The task has also been facilitated by the greater recognition of the value
of human resources in industry and application of human resource development (HRD) techniques by the
enlightened managers in modern organisations.

HUMAN RESOURCE MANAGEMENT IN BANKING

What is a Bank? The word bank is derived from the Italian banca, which is derived from German
language and means bench. The terms bankrupt and "broke" are similarly derived from banca rotta, which
refers to an out of business bank, having its bench physically broken. Money lenders in Northern Italy
20

originally did business in open areas, or big open rooms, with each lender working from his own bench or
table. The essential function of a bank is to provide services related to the storing of deposits and the
extending of credit. The evolution of banking dates back to the earliest writing, and continues in the present
where a bank is a financial institution that provides banking and other financial services. Currently the term
bank is generally understood as an institution that holds a banking license. Banking licenses are granted by
financial supervision authorities and provide rights to conduct the most fundamental banking services such as
accepting deposits and making loans. There are also financial institutions that provide certain banking services
without meeting the legal definition of a bank, a so called non-bank. Banks are a subset of the financial
services industry. Human resource management (HRM) has long been overlooked in the corporate sector in
the country where a small section, comprising mostly the multi-national companies was practicing the same.
With the growing realization of proper HRM in the corporate sector, it has grown into an important activity.
Now the head of HRM is an important member of the senior teams of any thriving business. Although the idea
is new for many local businesses where entrepreneurs are at the beginning of the learning curve yet in reality
the theme is getting support from the organized entrepreneurs.
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 products and activities.
HRM Background and Practices.
The banking has become a complex activity within the financial market linked directly and indirectly with an
over-all national growth and its impact as an integral part of regional segment of a global banking
environment. Almost every bank and financial institution is involved in various functions in a day's job and
thus requires a highly effective team and appropriate manpower to run the show. Corporate goals are
translated into viable realities and profits only with human element that play their due role in achieving the
desired results. Thus even the high automation would require proper man behind the machine to make things
happen. This idea has been realized by top management in progressive banks. 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 end and a highly educated and trained
professional as head of corporate finance at the other. 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 steps in a big way making banking more practical. This has further highlighted the need for proper
deployment of man-power to run banks efficiently. For many years, HRM banks like other institutions have
been handling this sensitive activity through respective personnel departments. This means human resources
were managed like other physical assets e.g. pieces of furniture, calculators, equipment and appliances.
Personnel departments were primarily engaged in approval of leaves, handling of staff loans, issuance of show
21

cause, conducting disciplinary enquiries and termination from service. Recruitment was a routine function and
was done in a mechanical way to hire people with specific educational background irrespective of their real
value to the institution. Success stories of large banking companies have been evident of the fact that HRM is
quite different from management of physical assets. Human brain has its own peculiar chemistry.
Its strong sensory and decision-making capacity has to be greatly emphasized by the employers. The work
force constituting all levels of employees is constantly thinking in many dimensions. On the one hand it is the
assigned duty and task they are to perform and for which they are paid by their employer, on the other they
think of their long run goals and objectives. By no means, their brains can be controlled to think beyond the
current situation of employment. Managing this educated, skillful and trustworthy work force is not an easy
job. A few of the current challenges faced by the banking industry in terms of human resource management
may be the following:
To make the Indian Banking System stronger, efficient and low-cost, the creation of fundamentals must
include in the banks operations, strategies and processes: strengthening the prudential norms and market
discipline; adoption of international benchmarks; management of organizational change and consolidation
within the financial system; upgrading the technological infrastructure of the financial system; and human
resource development as the catalyst of the transformation (2002).
The Human Resource field in the Banking Industry is considered as one of the process of discovery and
transformation. The field of Human Resource can be described as emergent and dynamic within the cultural
business aspect in a Banking Industry. The success of todays banking business will sparsely depends on the
human resources of the organization, in which plays a crucial role in providing the services needed. The
evolution of banking system in India affected the human resource practices, recruitment and selection
practices, and training system. It is very important that the details of human resource are discussed along with
the employees, to build their own career planning, perceptions and development. The primary strength of the
industry is the human resource that is why the efforts to develop the skills and management are the main
subject placed before the human resource. A major challenge for many banks will be to develop the special
competencies and skills for credit appraisal and risk management. Putting the information technology is a key
contributed in human resource development. Therefore, the HR model of the future will require professionals
to be both driving and anticipating change, understanding the complexities of the new business environment
and forces shaping it.

HR Practices and Methods.

A key focus of the human resource management is highlighted in the role of staffing, performance
management, training and development, and compensation that plays indifferent types of business strategies.
22

With the acquisition and preparation of human resources, including planning, recruitment, selection, and
training can affect the whole organizational performance. The HR planning, the start of the strategy, illustrates
the process of developing human resource plan. The strengths and weaknesses of staffing options such as
outsourcing, use of contingent workers, and downsizing are involved in planning. The recruitment process is
done strategically to determine the talented employee fit for the position. The selection process emphasizes the
ways in minimizing errors in employee selection and placement to improve the companys competitive
position. The selection method standards such as validity and reliability are utilized. An effective training
systems of the managers role in determining employees readiness for training, creating a positive learning
environment, and ensuring the training is used on the job. Beyond the human resource strategies are the
rewarding and compensating that can strengthen or weaken the employee effectiveness. In order to give
recognition and increase motivational levels amongst the employees, some Banks linked the individual
performance in an incentive scheme or for some rewards that may come into any form .In summary, all of
the HRM strategies and function should be aligned to help the company meet its objectives as well as
focusing on their customers . The best practice approach assert that certain HR practices are found to
consistently lead to higher organizational performance, independent of an organizations stated strategy. The
high performance HR practices foster innovation through the development of innovation values, encouraging
of information sharing, goal setting and appropriate training and development.

Job analysis, Job design and Job evolution

A job is defined as a collection of duties and responsibilities which are given together to an individual
employee. Job analysis is the process of studying and collecting information relating to operations and
responsibilities of a specific job.
23

Job analysis Job description Job specification

Job title/ name of the job Qualification
Working hours Qualities
Duties and responsibilities Experience
Working conditions Family background
Salary and incentives
Training Machines to be handled on the job Interpersonal skills
As mentioned in the above table job analysis is divided into 2 parts
a) Job description
Where the details regarding the job are given.
b) Job specification
Where we explain the qualities required by people applying for the job.

Need/importance/purpose/benefits of job analysis

Def.: - A job is defined as a collection of duties and responsibilities which are given together to an
individual employee. Job analysis is the process of studying and collecting information relating to
operations and responsibilities of a specific job.
The following are the benefits of job analysis.
1. Organizational structure and design:Job analysis helps the organization to make suitable changes in the organizational structure, so that it
matches the needs and requirements of the organization. Duties are either added or deleted from the job.
2. Recruitment and selection:Job analysis helps to plan for the future human resource. It helps to recruit and select the right kind of
people. It provides information necessary to select the right person.
3.Performance appraisal and training/development:Based on the job requirements identified in the job analysis, the company decides a training program. Training
is given in those areas which will help to improve the performance on the job. Similarly when appraisal is
conducted we check whether the employee is able to work in a manner in which we require him to do the job.
4. Job evaluation:Job evaluation refers to studying in detail the job performance by all individual. The difficulty levels, skills
required and on that basis the salary is fixed. Information regarding qualities required, skilled levels, difficulty
levels is obtained from job analysis.
5. Promotions and transfer:24

When we give a promotion to an employee we need to promote him on the basis of the skill and talent
required for the future job. Similarly when we transfer an employee to another branch the job must be very
similar to what he has done before. To take these decisions we collect information from job analysis.
6. Career path planning:Many companies have not taken up career planning for their employees. This is done to prevent the employee
from leaving the company. When we plan the future career of the employee, information will be collected
from job analysis. Hence job analysis becomes important or advantageous.
7. Labour relations:When companies plan to add extra duties or delete certain duties from a job, they require the help of job
analysis, when this activity is systematically done using job analysis the number of problems with union
members reduce and labour relations improve.
8. Health and safety:Most companies prepare their own health and safety, plans and programs based on job analysis. From the job
Analysis Company identifies the risk factor on the job and based on the risk factor safety equipments are
provided.
9. Acceptance of job offer:When a person is given an offer/appointment letter the duties to be performed by him are clearly mentioned in
it, this information is collected from job analysis, which is why job analysis becomes important.

Methods of job analysis:

Def: - A job is defined as a collection of duties and responsibilities which are given together to an individual
employee. Job analysis is the process of studying and collecting information relating to operations and
responsibilities of a specific job. There are different methods used by organization to collect information and
conduct the job analysis. These methods are

1. Personal observation:In this method the observer actually observes the concerned worker. He makes a list of all the duties
performed by the worker and the qualities required to perform those duties based on the information collected,
job analysis is prepared.
2 Actual performance of the job:In this method the observer who is in charge of preparing the job analysis actually does the work himself. This
gives him an idea of the skill required, the difficulty level of the job, the efforts required etc.
3. Interview method:-

25

In this method an interview of the employee is conducted. A group of experts conduct the interview. They ask
questions about the job, skilled levels, and difficulty levels. They question and cross question and collect
information and based on this information job analysis is prepared.
4. Critical incident method:In this method the employee is asked to write one or more critical incident that has taken place on the job. The
incident will give an idea about the problem, how it was handled, qualities required and difficulty levels etc.
critical incident method gives an idea about the job and its importance. (A critical means important and
incident means anything which takes place in the job)
5. Questioner method: In this method a questioner is provided to the employee and they are asked to answer the questions in it. The
questions may be multiple choice questions or open ended questions. The questions decide how exactly the
job analysis will be done. The method is effective because people would think twice before putting anything
in writing.
6. Log records:Companies can ask employees to maintain log records and job analysis can be done on the basis of
information collected from the log record. A log record is a book in which employees record /writes all the
activities performed by them on the job. The records are extensive as well as exhausted in nature and provide
a fair idea about the duties and responsibilities in any job.
7. HRD records: Records of every employee are maintained by HR department. The record contain details about educational
qualification, name of the job, number of years of experience, duties handled, any mistakes committed in the
past and actions taken, number of promotions received, area of work, core competency area, etc. based on
these records job analysis can be done.

Job design
Definitions: - Job design is the process of a) Deciding the contents of the job. b) Deciding methods to carry
out the job. c) Deciding the relationship which exists in the organization. Job analysis helps to develop job
design and job design matches the requirements of the job with the human qualities required to do the job.

Factors affecting job design: There are various factors which affect job design in the company. Factors affecting job design
1. Organizational factors
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2. Environmental factors
3. Behavioural factors
I] Organizational factors:Organizational factors to refer to factors inside the organization which affect job design they are
a) Task characteristics:- Task characteristics refer to features of the job that is depending on the type of job
and the duties involved in it the organization will decide, how the job design must be done. In case the
company is not in a position to appoint many people; a single job may have many duties and vice versa.
b) The process or flow of work in the organization:- There is a certain order in which jobs are performed in
the company. In case the company wishes it could combine similar job and give it to one person this can be
done if all the jobs come one after the other in a sequence.
c) Ergonomics:- Ergonomics refers to matching the job with physical ability and characteristics of the
individual and in providing an office environment which will help the person to complete the jobs faster and
in a comfortable manner.
d) Work practices:- Every organization has different work practices. Although the job may be the same the
method of doing the job differs from company to company. This is called work practice and it affects job
design.
II] Environmental factors:Environmental factors which affect job design are as follows
a) Employee availability and ability:- Certain countries face the problem of lack of skilled labour. They are
not able to get employees with specific education levels for jobs and have to depend on other countries due to
this job design gets affected.
b) Social and cultural expectations :- The social and cultural conditions of every country is different so
when an MNC appoints an Indian it has to take into account like festivals, auspicious time, inauspicious time,
etc. to suit the Indian conditions. This applies to every country and therefore job design will change
accordingly.
III] Behavioral factors:Job design is affected by behavioral factors also. These factors are
a) Feedback: - Job design is normally prepared on the basis of job analysis and job analysis requires
employee feedback based on this employee feedback all other activities take place. Many employees are
however not interested in providing a true feedback because of fear and insecurity. This in turn affects job
deign.

27

b) Autonomy:- Every worker desires a certain level of freedom to his job effectively. This is called autonomy.
Thus when we prepare a job design we must see to it that certain amount of autonomy is provided to the
worker so that he carries his job effectively.
c) Variety:- When the same job is repeated again and again it leads to burden and monotony. This leads to
lack of interest and carelessness on the job. Therefore, while preparing job design certain amount of variety
must be provided to keep the person interested in the job. Methods of job design There are various methods in
which job design can be carried out.
These methods help to analysis the job, to design the contents of the and to decide how the job must be carried
out .these methods are as follows: I.
II.
III.

Job rotation
II. Job enlargement
III. Job enrichment

1.Job Rotation: Job rotation involves shifting a person from one job to another, so that he is able to understand and learn what
each job involves. The company tracks his performance on every job and decides whether he can perform the
job in an ideal manner. Based on this he is finally given a particular posting. Job rotation is done to decide the
final posting for the employee e.g. Mr. A is assigned to the marketing department whole he learns all the jobs
to be performed for marketing at his level in the organization .after this he is shifted to the sales department
and to the finance department and so on. He is finally placed in the department in which he shows the best
performance Job rotation gives an idea about the jobs to be performed at every level. Once a person is able to
understand this he is in a better understanding of the working of organization

Advantages of job rotation

1. Avoids monopoly:Job rotation helps to avoid monopoly of job and enable the employee to learn new things and therefore enjoy
his job
2. Provides an opportunity to broaden ones knowledge :Due to job rotation the person is able to learn different job in the organization this broadens his knowledge iii.
Avoiding fraudulent practice:-In an organization like bank jobs rotation is undertaken to prevent employees
from doing any kind of fraud i.e. if a person is handling a particular job for a very long time he will be able to
find loopholes in the system and use them for his benefit and indulge (participate) in fraudulent practices job
rotation avoids this.

Disadvantages of Job Rotation

28

1. Frequent interruption:- Job rotation result in frequent interruption of work .A person who is doing a
particular job and gets it comfortable suddenly finds himself shifted to another job or department .this
interrupts the work in both the departments
2. Reduces uniformity in quality :- Quality of work done by a trained worker is different from that of a new
worker .when a new worker I shifted or rotated in the department, he takes time to learn the new job, makes
mistakes in the process and affects the quality of the job. iii. Misunderstanding with the union member:Sometimes job rotation may lead to misunderstanding with members of the union. The union might think that
employees are being harassed and more work is being taken from them. In reality this is not the case.

2.. Job enlargement:

Job enlargement is another method of job design when any organization wishes to adopt proper job design it
can opt for job enlargement. Job enlargement involves combining various activities at the same level in the
organization and adding them to the existing job. It increases the scope of the job.
It is also called the horizontal expansion of job activities. Job enlargement can be explained with the help of
the following example
If Mr. A is working as an executive with a company and is currently performing 3 activities on his job after
job enlargement or through job enlargement we add 4 more activities to the existing job so now Mr. A
performs 7 activities on the job. It must be noted that the new activities which have been added should belong
to the same hierarchy level in the organization. By job enlargement we provide a greater variety of activities
to the individual so that we are in a position to increase the interest of the job and make maximum use of
employees skill. Job enlargement is also essential when policies like VRS are implemented in the company.

Advantages of job enlargement

1. Variety of skills:- Job enlargement helps the organization to improve and increase the skills of the
employee due to organization as well as the individual benefit.
2. Improves earning capacity:- Due to job enlargement the person learns many new activities. When such
people apply for jobs to other companies they can bargain for more salary.
3. Wide range of activities:- Job enlargement provides wide range of activities for employees. Since a single
employee handles multiple activities the company can try and reduce the number of employees. This reduces
the salary bill for the company.

Disadvantages of job enlargement

1. Increases work burden:- Job enlargement increases the work of the employee and not every company
provides incentives and extra salary for extra work. Therefore the efforts of the individual may remain
unrecognized.
29

2. Increasing frustration of the employee:-In many cases employees end up being frustrated because
increased activities do not result in increased salaries.
3. Problem with union members:Many union members may misunderstand job enlargement as exploitation of worker and may take objection
to it.

3. Job enrichment: Job enrichment is a term given by Fedric Herzberg. According to him a few motivators are added to a job to
make it more rewarding, challenging and interesting. According to Hertzberg the motivating factors enrich the
job and improve performance. In other words we can say that job enrichment is a method of adding some
motivating factors to an existing job to make it more interesting. The motivating factors can be
a. Giving more freedom.
b. Encouraging participation.
c. Giving employees the freedom to select the method of working.
d. Allowing employees to select the place at which they would like to work.
e. Allowing workers to select the tools that they require on the job.
f. Allowing workers to decide the layout of plant or office. Job enrichment gives lot of freedom to the
employee but at the same time increases the responsibility. Some workers are power and responsibility
hungry. Job enrichment satisfies the needs of the employees.

Advantages of job enrichment

1. Interesting and challenging job:- When a certain amount of power is given to employees it makes the job
more challenging for them, we can say that job enrichment is a method of employee empowerment.
2. Improves decision making:- Through job enrichment we can improve the decision making ability of the
employee by asking him to decide on factory layout, method and style of working.
3. Identifies future managerial caliber: - When we provide decision making opportunities to employees, we
can identify which employee is better that other in decision making and mark employees for future promotion.
30

4. Identifies higher order needs of employees:- This method identifies higher order needs of the employee.
Abraham Maslows theory of motivation speaks of these higher order needs e.g. ego and esteemed needs, selfactualization etc. These needs can be achieved through job enrichment.
5. Reduces work load of superiors:- Job enrichment reduces the work load of senior staff. When decisions
are taken by juniors the seniors work load is reduced.

Disadvantages of job enrichment

1. Job enrichment is based on the assumptions that workers have complete knowledge to take decisions and
they have the right attitude. In reality this might not be the case due to which there can be problems in
working. 2. Job enrichment has negative implications i.e. Along with usual work decision making work is also
given to the employees and not many may be comfortable with this. 3. Superiors may feel that power is being
taken away from them and given to the juniors. This might lead to ego problems.
4. This method will only work in certain situations. Some jobs already give a lot of freedom and
responsibility; this method will not work for such jobs.
5. Some people are internally dissatisfied with the organization. For such people no amount of job enrichment
can solve the problem

Human Resource Planning

This is the process which assures the organization that it will have adequate number of qualified persons, at
requisite times, performing in a way to satisfy the needs of the organization & also provide satisfaction to the
individual employee, so employed. The process involves:
a) Estimating the present & future requirements of human resources based on objectives & long range plans of
the organization.
b) Calculation of net human resource requirements based on the present availability of human resources.
31

c) Taking suitable steps to identify, mould, change & develop the strength of existing employees so as to meet
the future requirements.
d) Preparation of action plans to acquire the balance human resources from outside the organization & to
develop the existing employees.

Recruitment:
It is the process of searching for future employees (requirement) & ensuring they apply for jobs in the
organization. It involves:
a) Identification of existing sources of candidates & developing them.
b) Seeking out & identifying new sources of applicants.
c) Motivating the right type of candidates to apply for jobs in the organization.
d) Ensuring a healthy balance between internal & external sources.

Selection:
It is the process of ascertaining the qualifications, experience, skill, Knowledge, etc. of an applicant to
ascertain his/her suitability for the job applied. This includes:
a) Developing application blanks.
b) Creating & developing valid & reliable testing techniques.
c) Formulating interviewing techniques.
d) Checking of references.
e) Setting up for medical examination policy & procedure.
f) Line Managers to be involved in the decision making.
g) Sending letters of appointment.
h) Employing the selected candidates, when he reports for duty.

Placement:
It is a process of allotting to the selected candidate the most suitable job, as per the job requirements &
employee specifications. This function includes:
32

a) Counseling the concerned managers regarding the placements.

b)Overseeing the follow-up studies, employee performance appraisal to monitor employee adjustment to the
job, in the coming days.
c) Correcting wrong/misjudged placements, if any.

Induction & Orientation:

These are procedures by which a new employee is rehabilitated in the new surroundings & introduced to the
practices, procedures, policies, people, etc. of the organization. It includes:
a) Familiarizing the employee with company philosophy, objectives, policies, career planning & development,
company product, market share, history, culture, etc.
b) Introduce new employee to the peoplehis colleagues, supervisors & subordinates.
c) Mould the employees by orientation methods to the new working conditions.

Human Resource Development

This process involves improving, moulding, & developing the skills, knowledge, creativity, attitude, aptitude,
values, commitment, etc. based on the present & future job & company requirements.
1. Performance Appraisal: It is the continuous & systematic evaluation of individual employees with respect
to their performance & their potential for future development. It includes: a) Enunciating policies, procedures
& techniques. b) Assisting functional managers. c) Reviewing & summarizing reports. d) Evaluating the
effectiveness of various programmes.
2. Training: It is the process of transmitting the employees the technical & operating skills and knowledge. It
includes a) Identification of training needs of the individuals & for the organization. b) Developing
appropriate training programmers. c) Assisting & advising the management in the conduct of training
programmes. d) Transmitting requisite job skills & job knowledge to the employees. e) Asses the effectiveness
of the training programmes.

Management Development:
It is the process of designing & conducting appropriate executive development programmes so as to develop
the managerial & human relations skills of the employees. It includes:
Identification of the areas in which management development is needed.
33

 Conducting development programmers.

Motivating executives/managers.

Designing special development programmers/ assessment procedures for promotions. Utilizing the

services of specialists-both internal & external for development &/or Institutional (external) development
programmes.
Evaluating the effectiveness of executive development programmes..

Career Planning & Development:

It is the planning of ones career & implementation of career plans by means of education, training, job search
& acquiring of work experience. It includes:
A. Internal mobility:
Vertical, horizontal transfers, promotions and demotion.
B. Transfer:
Process of placing employees in the same level jobs where they can be utilized more effectively as per the
needs of the organization. This also means developing transfer policies, offering assistance & guidance to
employees under transfer orders & evaluating transfer policy periodically.
C. Promotion:
It deals with the upward assignment of employees to occupy higher positions (with better status & pay) in
consonance with resources of employees & job requirement. The department must ensure that: Equitable,
fair & consistent promotions are formulated & administered. Managers & employees are given assistance &
guidance on the subject of promotion. Executions of promotional policies are as per policies & procedures.
D. Demotion:
It is the downward assignment of an employee in an organization. The department must ensure that:
Equitable, fair & consistent demotion policies are drawn up. Assisting & advising employees regarding
demotions. Ensure fair implementation of demotion Policies & Procedures.

Organizational Development:
The planned process drawn up to improve organizational effectiveness through changes in individual & group
behavior, culture & systems of the organizationdrawing models from applied behavioral science.
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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 & cooperatives are largely on the basis of ownership pattern. It is also
well known that the business mix, delivery channels & 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.

HRM in Cooperative Banks

It is sad that the HR policies of cooperative banks are totally dominated by the Registrar of Cooperatives. This
is, perhaps, one reason why the cooperatives are unable to improve themselves.

HRM in Regional Rural Banks (RRBs)

As regards RRBs, most of them adopt the HR policies of sponsor banks, which are not appropriate for their
special nature.

HRM 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 & it is hoped that these banks will fast catch
up with others. It may be recalled that, in a controlled environment & 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 & providing them across the country..

HRM in Private Banks & Foreign Banks

The HR function as practiced by private & foreign banks is effectively involved in the identification of
specific skills that each job warrants & 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 & designations.
There is a great energy spent in keeping the turnover low & offering appropriate training inputs. Possibly there
are as many pay structures as there are employees. More importantly, HRM has a role in monitoring &
35

mentoring the employee. There are no routine transfers. Rather people are recruited in different geographical
locations & different levels. Technology has helped in centralizing the back office & 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 & 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.

HRM in Public Sector Unit Banks (PSU Banks)

In the case4 of PSU Banks the recruitment process is annual & large scale. People are recruited at the lowest
grade & promoted I due course. This makes the career path of each employee the responsibility of the
organization. This also underlies a belief that anyone can occupy any desk. In such a system specialization is
the loser. Recruitment at higher levels is a recent phenomenon & more an exception than rule. Pay packets are
uniform for a grade/level with annual increments & uniform perquisites. Increments are earned automatically.
Transfers are not driven by business requirements but a matter of routine. Vacancies get created as & when
people move up. It is not uncommon to see new departments spring up just to allow promotions. In a way
such a move is justified as salary is linked to grades & not performance. The concept of job rotation is
practiced with great conviction. As regard leave it is seen that modern business organizations, driven by work
life balance issues & operational risk ensure that certain annual leave is mandatory.
In the case of PSU Banks, the compulsory leave system has not yet taken root. In the circumstances an
important task at hand is training the staff member, who, on account of age profile is not comfortable working
in an IT environment. HRM should also take immediate steps to improve productivity. There is a simultaneous
need to balance the demand of IT savvy youngsters joining the organization who ask for high salaries. PSU
Banks are not able to offer market driven salary. Given that banking business & the business of Government
are distinct, there is, in the case of PSU Banks, an urgent need that salaries are not limited by what is paid in
the ministry but unshackled. Till that happens, HRM should, innovatively tackle the issue.

Responsibilities of the Human Resource Management Department in Banks

Role:
The role of the Human Resource Department is to create the climate & conditions in which management
throughout the Bank will be enabled to optimise the individual & collective contribution of all employees to
the short & long-term success of the Bank.

Responsibilities:
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 To be the principal sponsor & guardian of HR policies in the Bank.

To propose & obtain agreement on changes to these policies from time to time & to ensure that
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 & 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 & that

employee numbers & 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, and training & employee welfare.
To support line management in their day-to-day management of the workforce by providing advice &
consultancy on personnel & performance management issues.

EMPLOYEE RELATIONS IN BANKS

The banking sector has been characterized by apparently harmonious industrial relations & has not suffered
from the British Diseases of industrial action & demarcation issues associated with parts of manufacturing
industry (e.g. Batstone, 1984). Banks have promoted unitarism (Fox, 1966) encouraging an ethos of
teamwork, shared interest & loyalty, wanting commitment beyond the cash nexus. While banks are generally
seen as having a passive approach to employee relations, paternalism did underpin the system & particularly
important was the system of internal promotion supported by an unwritten agreement between the major UK
Banks on no poaching. The internal labour market created two categories of employees: career & non-career
which equated to a male/female divide. Retail banking is a highly labour intensive industry with labour costs
forming 70%of total operating expenditure & involvement in fund transmissions meant that a majority of
clerical staff have not been used as a means of marketing the banks products nor directly for increasing
business but to process existing accounts. They have been regarded as an overhead rather than a resource.
Until the 1980s, competition between the Banks has been limited, banks operating as an oligopoly&
Governments concern with maintaining economic stability with limits to lending, & control over interest
rates facilitated this. The oligopoly fed through to the management of staff - 38 - as national wage bargaining
minimized competition for labour. However deregulation led to the collapse of the national system & a
questioning of the old employment practices.

CURRENT CHALLENGES FACED BY BANKS IN HRM

Effective work force:
A time-consuming & 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 employer. Banks are keenly interested to fill up two types of breeds of professionals. Ones who
37

are outstanding professionals with high job hopping attitude these are those who come in-work for some tome
& then leave for better prospects. Others are those who are keenly picked-up, trained & are 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 & 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 & 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 - 39 - attractive packages has made
the job market very competing. A bank in a normal course invests time & money to hire & train the
appropriate workforce for its own operations. This readymade force is often identified & subsequently pickedup on better terms by others.

Compensation:
How much to pay the right employee & how much to the outstanding performer. Banks have traditionally
followed pay scales with predetermined increments, salary slabs, bonuses & time based fringe benefits like car
& house advance, gratuity, pensions, etc. The situation is not the same anymore. An increment of Rs.500-800
per annum is no more a source of attraction for a professional anymore. A basic pay with traditional formulas
of linkage with medical & other facilities has no soothing today. A promise of future growth, learning culture
& corporate loyalty is out of dictionary & does not mean anything to this energetic & 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 preferential department, preferential location, city of his own
choice & 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 & preference makes the
job of HR manager quite challenging. What the HR manager cannot afford is the dissatisfied employee who
38

not only disrupts the smooth working him, but also spreads the negativity to others by his de-motivated
attitude.

Morale Boosting:
What has long been overlooked is the morale boosting of the employees by the organizations. Human beings
even if satisfied of material wellbeing need to be appraised & encouraged constantly. Smart banks have
realized this need & 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.

DEVELOPMENT IN BANKS
The banks must emphasis on human resource development as one of the critical areas of its operations. It
should redraw its training & development schedules to suit the requirements of the current emerging scenario.
Requisite training should be imparted to various branch level functionaries as also administrative staff.
Besides in-house training the reputed external agencies should be utilized for human resource development
with a view to updating their knowledge & to keep them abreast of the current banking scenario for meeting
the challenges ahead.
The concept of segment specialization may be resorted to in respect of the personnel selected therefore. It is
now thought expedient to plan & strengthen the squad of skilled officers in various segments as IT, marketing
management, risk management, risk based supervisors, law, security, etc.The lead bank must play an effective
role in improving the work environment & pursuing staff welfare measures in the form of whole range of
financial assistance with reference to various loans of sorts. Human resource skills are other areas of
challenge. Because of modernization & technological advancement rigorous training & man power planning
are required. In the market scenario characterized by heightened competition, growing customer needs &
technological up gradation, the bank fine tunes its HT policy to meet its corporate objectives. New training
systems have been developed to impart competencies & a broad range of skills among the employees to
deliver faster & superior service that can delight the customers. The Industrial Relations in the banks have
been harmonious & cordial.

TRAINING & DEVELOPMENT

Meaning & Definition:
Training: Organization & individual should develop & progress simultaneously for their survival & attainment
of mutual goals. So every modern management has to develop the organization through human resource
development. Employee training is the important sub system of human resource management. Employee
training is a specialized function & is one of the fundamental operative functions for human resources
39

management. After an employee is selected, placed & introduced he or she must be provided with training
facilities. Training is the act of increasing the knowledge & skill of an employee for ding a particular job. Dale
S. Beach defines the training as the organized procedure by which people learn knowledge & skill for a
definite purpose.
The training system in the banking industry has a strong structural base. However, in the past the training
activities have been more ritualistic due to absence of a strategic link between training & human resources
development. Today, it is important that the training function is made an effective organizational intervention
by establishing a clear policy of training & development within the framework of total human resource
development. The training establishments need to be actively involved in the total training process starting
from the identification of the training needs, evaluation of training effectiveness & the benefits of training to
the end users viz. the internal & external customers. The need for training & development is determined by the
employees performance deficiency, computed as follows:
Training & Development Need = Standard Performance Actual Performance.
We can make a distinction among training, education & development. Training, as was started earlier, refers to
the process of imparting specific skills. Education, on the other hand, is confined to theoretical learning in the
classrooms. Training & Education Differentiated

Development:
Give a man a fish, & you give him meal. Teach man to fish, & you give him a livelihood.
This ancient Chinese proverb seems to describe the underlying rational of all raining & development
programs. No banking organization can long ignore the training & development needs of its employees
without seriously inhabiting the performance. Even the most careful selection does not eliminate the needs for
training, since people are not molded to specifications & rarely meet the demands of their jobs adequately.
This HRM function deals with the overall development of the employees. This includes their professional &
well as their personal development. It is a part of HRM function to identify opportunities for enhancing the
skills of the resources. Promotion is regarded as one of the ways of recognizing development undertaken by
an employee. Development is also largely dependant on training. Generally people think that training &
development are one & the same, but there are many differences between them.

Recruitments

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Meaning and definition: The human resources are the most important assets of an organization. The success
or failure of an organization is largely dependent on the caliber of the people working therein. Without
positive and creative contributions from people, organizations cannot progress and prosper. In order to achieve
the goals or the activities of an organization, therefore, they need to recruit people with requisite skills,
qualifications and experience. While doing so, they have to keep the present as well as future requirements of
the organization in mind. Once the required number and kind of human resources are determined, the
management has to find places where the required human resources are/will be available and also find means
of attracting them towards the organization before selecting suitable candidates for jobs.
Recruitment is defined as, - A process to discover the sources of man power to meet the requirements of the
staffing schedule and to employ effective measures for attracting that man power in adequate numbers to
facilitate effective selection of an efficient work force.

Objectives of recruitment
Some of the objectives of recruitment are:
To attract people with multi-dimensional skills and experiences that suits the present and future
organizational strategies. To induct outsiders with a new perspective to lead the company.
To infuse fresh blood at all levels of the organization.
To devise methodologies for assessing psychological traits.

Process of Recruitment:
Recruitment refers the process of identifying and attracting job seekers so as to build a pool of qualifies
applicants. This process comprises of five interrelated stages, viz,

Planning
Strategy development
Searching
Evaluation and control

The ideal recruitment process is the one which attracts relatively larger number of qualified applicants who
will survive the screening process and accept positions with the organization, when offered to approach the
ideal people, individuals responsible for recruitment process must know how many types of employees are
needed, where and how to look for individuals with appropriate qualifications and interests, what inducements
to use for various types of applicants group, how to distinguish applicants who are unqualified from those who
have a reasonable chance of success, and how to evaluate their work.

Selection
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Definition Selection is defined as the process of differentiating applicants in order to identify and hire those
with a greater likelihood of success in a job. The objective of selection decision is basically picking an
applicant from a pool of applicants who has the appropriate qualifications and competency to do the job. The
selection procedure cannot be effective until and unless Requirements of the job to be filled have been clearly specified.
Employee specifications (physical, mental, social, behavioral etc) have been clearly specified.
Candidates for screening have been attracted.

Selection process is preferable because:

It is easier for applicant as they can send their applications to a single centralized department/agency.

It facilitates contacts with applicants because issues pertaining to employment can be cleared through
one central location.
It helps operating managers to concentrate on their operating responsibilities. This is helpful during
peak operating period.
It can provide for better selection because hiring is done by specialist trained in staffing techniques.
The applicant is better assured of consideration for a greater variety of jobs.
Hiring cost may be cut because duplication of efforts is minimized.

Selection Process:
The selection process consists of the following steps:
1. Application form: Many companies formulate their own style of application form depending upon the size
and nature of business carried on, type and level of the job etc. Information is generally required on the
following items in the form: personal background, educational attainments, work experience references etc.
2. Written test : Written test is conducted for the qualified candidates after they are screened on the basis of
application form to measure the candidates ability towards the job, his aptitude reasoning, knowledge in
various disciplines, English language etc.
3. Preliminary Interview: The next step that tag along the selection procedure is a preliminary interview
wherein the applications are scrutinized so as to eliminate unqualified applications. Preliminary Interviews are
short. This interview thus provides information about the candidate related to the job or personal
42

specifications. 4. Selection Test: After passing through the interview the next stage that applicant has to prove
himself on are the selection tests. There are different types of selection tests for different levels of the
organization and that too is further differentiated within different types of organizations. Some of the most
common and well-known tests that an applicant has to go through are;
a) Aptitude test
b) Personality tests: This is common mostly for the higher levels of management are given to measure a
prospective employees motivation to function in a particular working environment.
c) Internal test: To measure an individuals activity preferences.
d) Graphology Test: is an art wherein the individuals handwriting is seen and accordingly his personality
traits are derived by the way he writes.
e) Polygraph Test: Are designed to ensure accuracy of the information given in the applications. f) Medical
Tests: Reveal physical fitness of the candidate.
g) Drug test: Help to ensure the presence of illegal or Performance- affecting drugs.
1. References and background checks: Many employer request names, address, and telephone numbers or
references for the purpose of verifying information and, perhaps, gaining additional background information
on an applicant.
2. Selection Decision: After collecting data from all the preceding steps, this is the most crucial step in the
entire selection process. The main difference between the preceding stages and this is that former is used to
short list the number of candidates and later one is to make a final decision from the pool of individuals who
pass the tests, interviews and reference checks. The view of line manager will be generally considered in the
final selection because it is he/she who is responsible for the performance of the new employee. The HR
manager plays a crucial role in the final decision.
3. Physical Examination: After the selection decision and before the job offer is made, the candidate is
required to undergo a physical fitness test. The result of the medical fitness test is recorded in a statement and
is preserved in the personal records. The main objectives of this test are as follows:
To detect if the individual carries any infectious diseases.
To determine whether an applicant is physically fit to perform the work.
It helps to determine if there are any physical capabilities which differentiate successful and less
successful employees.
Medical checkup protects applicants with health defects from undertaking work that could be
detrimental to them or might otherwise endanger the employers property.

43

 Last, but not the least such examination will protect the employer from workers compensation claims
that are not valid because the injuries or illness was present when the employee was hired.
1. Job offer: The next step is selection process is Job offer for those applicants who had passed the previous
stage. Job offer is made through a letter of appointment. Such a letter usually contains the date by which the
appointee must report on duty.
Appointee must be given a reasonable time for reporting because it may be quite possible that the appointee is
employed in some other company or must be residing in some other city and for such other reasons. Company
may also want the appointee to delay in joining the job because the job may require undergoing some training
program. Decency demands that rejected applicants must be informed about their non-selection. These
applicants data must be used for future references.
2. Contract of employment: After the job offer is made and the candidates accept the offer, certain
documents need to be executed by the employer and the candidate. One such document is Attestation form.
This form contains vital details about the candidate, which are authenticated and attested by him/her, which
could be used for future reference. Another document is contract of employment. This document contains the
terms and conditions of employment like designation, perks, term of job and so on. The information written in
the contract may vary according to the level of the job. The main drawback of the contract is that it is difficult
to enforce them.
3. Concluding the selection process: The selection process will not end with executing the employment
contract. The step is reassuring the candidates who have not been selected. Such candidates must be told that
they were not selected, not because of any serious deficiencies in their personalities, but because their profiles
did not match the requirements of the organization.
4. Evaluation of selection process: The broad test if the effectiveness of the selection process is the quality of
the personnel is hired. An organization must have competent and committed personnel. The selection process,
if properly done, will ensure availability of such employees. Audit must be conducted by the people who work
independent of the HR department.

New methods of selection:

1.360degree selection or participative selection: Normally supervisors administer the selection test and
interview. They judge the fit between the job and the candidate. But the employee skills, knowledge and
performance affect not only superiors but also subordinates and the employees of the same level. Hence the
organization started involving the subordinates and the employees of the same level in administrating the
employment tests and interviews. This type of selection program is called 360 degree program.
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2. Employee leasing: The client company leases employees from a third party, not on temporary basis but on
a full time basis and for long help. An interesting feature is that the client company need not perform
personnel activities such as hiring compensation or record keeping. Employees working elsewhere are leased.
They are not directly employed by the company where they are working. Employees not recruited by one
client are sent to another.
3. Selection by invitation: Management observes the performance of the key executives of competitors. If the
performance of the key executives is excellent or the key executives are the change agents, the management
invites them to join the organization by offering attractive salary and benefits. Thus, the significant
performance of the executives forms basis for selecting them by invitation.

HRM ISSUES IN PUBLIC SECTOR BANKS

Background:
Among the 12 services classified under the services definition of GATS, banking is one of the prominent one.
Banking industry in India is one of the most diversified and heterogeneous in terms of ownership; coexistence of private and public sector is one of the best examples of peaceful co-existence of two entirely
different cultural systems in the services sector. Coupled with that, the country has a large number of foreign
banks with altogether a different work culture and climate. The simultaneous existence of so many types of
work ethos, systems and processes are truly symbolic of the great Indian unity amongst diversity.
Notwithstanding the fact that lots of efforts have gone into bringing technological & process congruence, it is
really unfortunate that very little has been done on the human resource front in this regard. Unfortunately,
public sector banking has been the biggest victim, being governed by outdated & prohibitive sets of
government guidelines. The Management often complains lack of adequate power and flexibility; the Trade
Unions often look at any directional change with a sense of suspicion; majority of the workforce remains in
dream-world of the pre-liberalized scenario of work security. The result is that public sector banks are least
concerned about human resource management and reforms thereto and consequently remain under-productive.
Though renaming of Personnel departments to HR departments took place quite a few years ago in some of
the public sector banks, the work processes & culture in many of them till today remain outdated and are not
in a position to meet changing expectations of the human talent within. The scope of this is limited to address
some of the fundamental issues in areas of human resource management front in the public sector banking in
India.

45

SUGGESTIONS AND RECOMMENDATIONS

The management must commit itself to allocate major resources and adequate time to training.
Ensure that training contribute to competitive strategies of the firm. Different strategies need different
HR skill for implementation. Let training help employees at all levels acquire the needed skill.
Ensure that a comprehensive and systematic approach to training exists, and training and retraining
are done at all levels on a continuous and on-going basis.
Ensure that there is proper linkage among organizational, operational and individual training needs.
Skill based training (product/process training) should also be provided.
Besides questionnaire other methods of post training evaluation should also be used like interviews,
self-diaries, observation and supplement test.
The evaluation procedure must be implemented concerning trainer, trainee and subject.
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 Post training feedback has to be continuous and should also be taken from line manager/superior &
from peers to find out the effectiveness and valuation of training.

CONCLUSION
Today, banks focus on designing programs and process and services to attract, develop and retain top talent.
Utilizing the latest technologies HR team has launched sophisticated online systems that provide the
employees with details on benefits, compensation, special programs and internal job opportunities. As a global
employee population continues to grow, these cutting edge activities are increasingly important to the deliver
world-class HR solution.
The core function of HRD in the banking industry is to facilitate performance improvement, measured not
only in terms of financial indicators of operational efficiency, but also in terms of the quality of financial
services provided. Factors like skills, attitudes and knowledge of the human capital play a crucial role in
determining the competitiveness of the financial sector. The quality of human resources indicates the ability of
banks to deliver value to customers. Capital and technology are replicable but not the human capital which
needs to be valued as a highly valuable resource for achieving that competitive edge.

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The primary emphasis needs to be on integrating human resource management strategies with the business
strategy. HRM strategies include managing change, creating commitment, achieving flexibility and improving
teamwork. The other processes representing the overt aspects of HRM are recruitment, placement and
performance management.

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