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HUMAN RESOURCE MANAGEMENT

INTRODUCTION TO HRM DEFINITION OF HRM MEANING OF HRM

Introduction
Rapid globalization and technological developments have made todays business environment highly uncertain and even chaotic. Organizations are seeking newer and better ways to promote their adaptability to the complexity of changed scenario in order to survive and prosper. To exist, change has become the order of the day. Success only comes if we stay ahead of competitors and not by following them. We have got to innovate, remain original, experiment and be ahead of others. Thus, manpower is undoubtedly the key to any progress but is equally important to utilize them appropriately. So globally, organizations are striving to realize competitive success through strategic management of human resource. Thus, people management has never been important than it is today. Therefore new themes have immerged in the process, replacing some of the old ones. The new thinking in this regard is referred to as HRM, which carries a more proactive and strategy connotation. HRM is intimately intertwined with business strategy and many times also influence business strategy

Human Resource Management is a management function that helps managers to recruits, select, train and develops members for an organization. HRM is concerned with the peoples dimension in organizations. Before quoting the definitions, the core points to be considered are: Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage the organizations. HRM involves the application of Management functions and principles. The functions and principles are applied to acquisitioning, developing, organizations. Decision relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other HR decisions. Decisions made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high quality products supplies at reasonable costs. HRM functions are not confined to business establishments only. They are applicable to non-business organizations such as education, health care, recreation, etc. maintaining and remunerating employees in

DEFINITION OF HUMAN RESOURCE MANAGEMENT

According to Edwin Flippo, HRM is planning, organizing, directing and controlling of procurement, development compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are accomplished. According to George R. Terry, HRM is concerned with the obtaining and maintaining of a satisfied workforce. MEANING: HRM refers to set of programs, functions, and activities designed and carry out to maximize both employees as well as organization effectiveness. It is concerned with people dimension/behavior in the management. Thus, HRM is made of people in organization, acquiring their services developing their skills motivating them to higher level of performance and ensuring that they continue to maintain their commitment to the organization in order to achieve organizational objectives. HRM is applicable to all organizations regardless of their type i.e. government, business, education, health, recreation or non-profit organization.

FEATURES OF HUMAN RESOURCE MANAGEMENT

MANAGING PEOPLE PEOPLE ORIENTED PROCESS DEVELOPING EMPLOYEES POTENTIALITIES INTEGRAL PART CONTINUES ACTIVITY SECURES CO-OPERATION FUTURE ORIENTED CHALLENGING FUNTIONS/ACTIVITY

FEATURES OF HUMAN RESOURCE MANAGEMENT

1) MANAGING PEOPLE: HRM relates to managing people at work. It

covers all level of personnels and their needs, expectations and so on. It is a comprehensive function and basically concerned with tackling people at work.
2) PEOPLE

ORIENTED PROCESS: HRM is concerned with

employees, both as individual as well as a group. It is a people oriented process of bringing people and organization together so that the goals of each are met properly. Acquisition, development, motivation and maintenance of human resource are four basic functions in HRM process.
3) DEVELOPING

EMPLOYEES POTENTIALITIES: HRM is

concerned with helping the employees to learn and develop their potentialities to the highest level for their benefits as well as for the benefits of their organization. It is an employees development oriented subject.
4) INTEGRAL PART: HRM is an integral part of all organization. It is

concerned with recruitment, selection and development of manpower available.


5) CONTINUES ACTIVITY: HRM is a continues activity in an

organization as problems continue to exist as long as employees are working in an organization. They need constant attention as they may disturb normal working in an organization, if neglected.

6) SECURES CO-OPERATION: HRM aims at developing and

maintaining team spirit at the organizational level. Such team spirit brings success to the organization.
7) FUTURE ORIENTED: HRM is concerned with helping an

organization to achieve its objectives in future by providing competent and motivated employees. It makes an attempt to integrate individual objectives of employees with the organizational objectives. HRM provides long-term benefits to employees, organization and the society at large.
8) CHALENGING FUNCTION/ACTIVITY: HRM is a challenging

function/activity as it deals with the people/employees who are always unpredictable. Employees have emotions and sentiments and cannot be treated like machines. It is necessary to handle them and activities related to them tactfully. In short, HRM brings challenges before HR manager from time to time. It also provides opportunity to organization to grow through the efforts of efficient and devoted manpower. HRM is a key element in dealing with economic, technological and other problems faced by business organization. Such problems can be solved with the help of devoted team of employees.

OBJECTIVES OF HUMAN RESOURCE MANAGMENT

PERSONAL OBJECTIVES FUNCTIONAL OBJECTIVES ORGANISATIONAL OBJECTIVES SOCIAL OBJECTIVES

OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

OBJECTIVES
The primary objective of HRM is to ensure the availability of a competent and willing workforce to an organization. Beyond this there are four fold objectives personal, functional, organizational and societal objectives. They are briefly explained below

PERSONAL OBJECTIVES: To assist employees in achieving their

personal goals, at least so far that these goals enhance individual contribution to the organization. Personal objectives of the employee must be met if workers are to be maintained, retained and motivated. Otherwise, employees performance and satisfaction may decline and employees may even leave the organization.

FUNCTIONAL

OBJECTIVES:

To

maintain

departments

contribution at the level appropriate to the organizational needs. Resources are wasted when HRM in either more or less sophisticated to suit the organizational demands. The departments level of service must be tailored to fit the organization it serves.

ORGANISATIONAL OBJECTIVES: To recognize the role of

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

SOCIETAL OBJECTIVES: To be ethical and socially responsible

to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of organization to use these resources for the societies benefit in ethical ways may lead to restriction. For example the society may limit HR decisions through loss that enforce reservation in hiring and laws that address discrimination, safety and other such areas of societal concern.

The above objectives in any organization can be summarized as under:


1)

To

attain

maximum

individual

development

(self

development) of the members of an organization and also to utilize available human resources fully and efficiently.

2)
3)

To mould effectively human resource. To establish desirable working relationships between To ensure satisfaction of workers so that they are freely ready To improve the service rendered by the enterprise to the

employer and employee and between groups of employees.


4)

to work.
5)

society through better employee morale that leads to more efficient individual and group performance.
6)

To establish and maintain a productive and self respecting To ensure availability of a competent and willing workforce To help organization to achieve its goals by providing well To maintain high morale and good human relations with in

relationship among all the members of an organization.


7)

to the organization for its progress and prosperity.


8)

trained, efficient, and properly motivated employees


9)

the organisation for the benefit of employer and employee. 10) To secure integration of all the individuals and groups with the organization by reconciling individual/group goals with those of an organization.

DIFFERENCE BETWEEN HRM AND PM


DIMENSION PERSONAL MANAGEMENT HUMAN RESOURCE MANGEMENT

1.EMPLOYMENT CONTRACT

CAREFUL DELINEATION OF WRITTEN CONTRACTS

AIM TO GO BEYOUND CONTRACT

2. RULES

IMPORTANCE OF DEVISING CLEAR RULES

CAN DO OUTLOOK, IMPATIENCE WITH RULE

3. GUIDE TO MANAGEMENT ACTION

PROCEDURES

BUSINESS NEED

4. BEHAVIOR REFERENT

MONITORING

VALUE/MISSION

5. MANAGERIAL TASK VIS-A-VERSA LOBOUR

NORMS AND PRACTISES

NURTURING

6. KEY RELATIONS

LABOUR MANAGEMENT

CUSTOMER

7. INITIATIVES

PEACEMEAL

INTEGRATED

8. SPEED OF DECISION

SLOW

FAST TRANSFORMATIONAL

9. MANAGEMENT ROLE 10. COMMUNICATION

TRANSACTIONAL INDIRECT

LEADERSHIP DIRECT

11. PRIZED MANAGEMENT SKILLS 12. SELECTION

NEGOTIATION

FACILITATION

SEPARATE, MANAGERIAL TASK

INTEGRATED, KEY TASK

13. PAY

JOB EVALUATION

PERFORMANCE RELATED

14. CONDITIONS

SEPARATELY NEGOTIATED

HARMONISATION

15. LOBOUR MANAGEMENT

COLECTIVE BARGAINING CONTRACTS

INDIVIDUAL CONTRACTS

16. JOB CATOGARIES AND GRADE 17. JOB DESIGN

MANY

FEW

DIVISION OF LABOUR

TEAM WORK

18. CONFLICT HANDLING

REACH TEMPORARY TRUCE

MANAGE CLIMATE AND CONDITIONS

19. TRANING AND DEVELOPMENT

CONTROLLED ACCESS TO COURCES

LEARNING COMPANIES

20. FOCUS OF ATTENTIONS FOR INTERVENTIONS

PERSONAL PROCEDURES

WIDE RANGE CULTURAL, STRUCTURAL AND PERSONAL STRATEGIES

21. RESPECT OF EMPLOYEES LABOUR IS TREATED AS A TOOL WHICH IS EXPENDABLE AND REPLACEABLE

PEOPLE ARE TREATED AS ASSETS TO BE USED FOR THE BENEFIT OF THE ORGANIZATION, ITS EMPLOYEES AND THE SOCIETY AS WHOLE

22. SHARED INTEREST

MUTUALITY OF INTEREST

FUNTIONS OF HUMAN RESOURCE MANAGEMENT

RECRUITMENT SELECTION

DISIPLINE DEVELOPMENT TRAINING REWARDS PRODUCTIVITY MOTIVATION

SELECTIO N
MOTIVATIO N

RECRUIT MENT

PRODUCT IVITY

HR ORIENTA TION HUMAN RESOURCE MANAGEMENT M


FUNCTIONS

TRAININ G REWARD SYSTEM

DEVELOP MENT

FUNCTION 1: SELECTION

According to DALE YODER selection is defined as, The process in which candidates for employment are divided into two classes- those who are to be offered employment and those who are not. Selection is a process whereby an organization searches for and attracts qualified candidates for variances. Deciding whether more efficient to recruit internally or externally or a mix. Selection is a process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in a job.

SELECTION PROCESS: Selection procedure is a long process commencing from the preliminary interview of the applicants and ending with the contract of employment. - Environmental factors affecting selection: a) Preliminary Interview b) Selection tests c) Employment Interview d) Reference and background analysis e) Selection decision f) Physical examination

g) Job offer h) Employment contract i) Evaluation Recruitment and attraction represent vital stages in the determination of which employees will be able to benefit from integrated HRM policies. Two crucial issues can be highlighted. A: B: There is a need to attract people and this implies that people do The contribution that people will make to an organization is not

have a choice about which organization they wish to work for. totally predictable. Recruitment and then selection process aim to attract and admit those whom management views as the right people for such an approach. With a strategic view of its recruitment requirement and the strategic plan representing the starting point the goals objectives and targets set the parameters for performance and how work is organized into roles with the strategy. Images and values projected by an organization and information on espoused goals will interact with potential applicants in the external labour markets and determine the degree of attraction to an organization on the part of potential recruits. The interview is the oldest and most wildly used of all the selection techniques. Selection based on competences attitudes has been one result of increased attention given to personality factors and how such factors predict job performance. Psychometric Test has a good record of reliability and validity. There are different kinds of test:

Ability test Aptitude test On-line testing is also being used for selection and other HR purposedreferred to as e-assessment.

FUNCTION 2: RECRUITMENT

It is a process of searching for prospective employees and stimulating and encouraging them to apply for the jobs in an organization. The two important sources of recruitment are:

1 INTERNAL: Under this source, personnel needs are filled through transfer and promotions. It is applicable only for jobs above the entry level. 2 EXTERNAL: The important external sources are advertisement, employment exchange, campus recruitment, personnel consultants and educational institutions.

FACTORS GOVERNING RECRUITMENT

Recruiters should have the talents of advertising experts, the skills of salesman and market research specialist. They should also know what their bank is to the potential employees and what they want. They should also know that organization appeal might be effective in hiring employees but not in retaining them. They should use those features in recruiting candidate that are desired by the prospective employees. Research studies show that employees desire security opportunity for advancement, self determination, freedom on the job, etc where as woman employees desire personal relationship with people at work, good supervision, pleasant working condition, etc.

SELECTION
MOTIVATION
RECRUITMENT

FUNCTION 3:ORIENTATION
PRODUCTIVITY

HUMAN RESOURCE MANAGEME NT

Orientation

REWARD SYSTEM TRANING

DEVELOPME NT

Orientation also called Induction, which is designed to provide a new employee with the information he or she needs to function comfortably and effectively in the organization. A formal definition of orientation is:

.planned introduction of employees to their jobs, their co-workers and the organization.

Typically Orientation conveys three types of information1) General information about the daily work routine 2) A review of organization history, founding fathers, objectives, operations and products and services as well as expected job contribution by the new employee. 3) A detail presentation perhaps, a brochure of the organization policy, work rules and employees benefits.

PURPOSE OF ORIENTATION Organizations are known to spend few weeks or even months on orientation programs. The idea is to make new employees feel AT HOME in the new environment. It is a well-known fact that employees feel anxious on entering an organization. They worry about how well they could perform on the new jobs. They feel in adequate when they compare themselves with the more experienced employees and are concerned about how well they will get along with their co-workers. Effective orientation programs reduce the anxiety of the new employees by providing them information on the job environment and on supervisors, by introducing them to co-workers, and by encouraging them to ask questions. The ease with witch the new employees adjust to a new job and work environment is, often, a function of human resource department. In later case, orientation can modify employees expectation.

In one study of considerable importance, researchers discovered the following about new employees: 1) The first days of the job were anxious and disturbing ones. 2) New employees initiation practices by peers intensified anxiety. 3) Anxiety interfered with the training process. 4) Turn over of newly hired employee was caused primarily by anxiety. 5) The new workers are reluctant to discuss problems with their supervisors. Employees orientation is aimed at minimizing such problems. Orientation seeks to expose new employees to all area of the organization. This prevents

inducts from getting over specialized. Induction makes new hires productive to company quickly. Finally good orientation programs will create a favorable impression of the organization and its work. This helps the employee to adjust better. Further effectiveness of the orientation program can have a lasting effect on absenteeism and turnover. First developed in US during the early 70s, orientation is gaining popularity. Several banks are orienting their new hires. Prominent user companies are Citibank, Taj Group of Hotels, P&G, Unilever, etc.

REQUISTES OF AN EFFECTIVE ORIENTATION 1) Prepare for new employee 2) Determine information new employees want to know 3) Determine how to present information 4) Completion of paper work

TOPIC OFTEN COVERED IN EMPLOYEES ORIENTATION PROGRAM


INTRODUCTION
TO SUPERVISORS AND TRANERS CO-WORKERS AND EMPLOYEE COUNSELLORS

JOB DUTIES
OVERVIEW OF JOB AND JOB LOCATION JOB TASK AND JOB OBJECTIVES JOB SAFETY REQUIREMENTS

RELATION TO OTHER JOBS

EMPLOYEES BENEFIT
PAY SCALE AND PAY DAYS REST BREAKS, VACATIONS AND HOLIDAYS TRANING, COUNSELLING AND EDUCATION BENEFITS INSURANCE BENEFITS RETIREMENT AND REHABILATION PROGRAM EMPLOYER-PROVIDED SERVICES TO EMPLOYEES

ORGANISATIONAL ISSUES
HISTORY AND ORGANISATION OF EMPLOYER NAME AND TITLES OF KEY EXECUTIVE LAYOUT OF PHYSICAL FACILITIES PROBATIONARY PERIOD PRODUCT LINE OR SERVICES PROVIDED OVERVIEW OF PRODUCTION PROCESS COMPANY POLICIES AND RULES DISCIPLINARY REGULATIONS EMPLOYEE HANDBOOK SAFETY PROCEDURE AND ENFORCEMENT

FUNCTION 4: DEVELOPMENT
Give a man a fish, and you give him meal. Teach man to fish, and you have gave him a livelihood. This ancient Chinese proverb seems to describe the underlying rational of all training and development programs. No banking organization can longer ignore the training and 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 and rarely meet the demands of their jobs adequately. This HRM function deals with the overall development of the employees. This includes their professional as 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.

FUNCTION 5: TRAINING

GLODSTIEN describes the training process as, THE ACT OF

INCREASING THE KNOWLEDGE AND SKILLS OF AN EMPLOYEE FOR DOING A PARTICULAR JOB.
A well-trained workforce is the greatest asset of an organization. Training prepares employee to perform better and more efficiently. It also prepares employees for higher positions with increased responsibilities. An organization cannot perform effectively when its employees are not trained well.

TRAINING IS A KEY FOR BECOMING MORE GLOBALLY COMPETITIVE. Lack of training is often the cause of a) POOR PRODUCTIVITY b) ERRORS AND WASTAGE c) UNSAFE WORKING PRACTICES d) DISSATISFACTION AT WORK Goals are to improve knowledge, skills and attitudes of employees, leading to improve corporate performance. Training and development can be a combination of on and off the job, providing of experiences. Training includes lectures, discussions, video, case

studies, role-play, and interactive videodisc. Coaching, apprenticeship has become very important. Workplace learning has become a key idea in recent years. It cast a whole organization as a unit of learning, allowing managers to take a strategic view but others to think in terms of how their learning impacts on the wider context. It is an idea that unifies an increasingly diverse of influence and disciplines within HRD such as training and organization development but also information systems. It highlights the significance of HRD practitioners as people specialist knowledge and skills and contributes to the advance of their professional status.

Objectives of training are as follows: 1) To train the employees in the indigenous and alien cultural values. 2) To train the employees to increase their quantity and quality of output. 3) To train the employees for promotion to higher jobs with increased responsibilities. 4) To train the bright but dronish employee in the formation of its goals.

5) To train the employees towards better job adjustment and high morale. Major benefits form training 1) Higher productivity and profits 2) Optimal use of resources 3) Job satisfaction 4) Safety 5) Reduce stress 6) Career development

FUNCTION 6: REWARD SYSTEM

The system of benefits used by the firm to reward workers-money not the only method. Others include fringe benefits, flexibility at work, holidays, etc. Compensation is the generic term of all the financial rewards received by an employee including: SALARY/WAGES FRINGE BENEFITS INCENTIVE PAY External factors affecting compensation: Government regulations, polices of competitors, union s, labour market conditions. Internal factor affecting compensation: Management philosophy, pay equity program, nature of job.

DETERMINIG COMPENSATION Step1: Conduct salary survey. Step2: Determine worth of each job. Step3: Similar jobs are grouped into pay grades within a range of points. Step4: Benefits added to pay level.

Rewards, Remuneration, Incentives and Punishments


HR departments should make efforts to provide appropriate incentives, rewards and increase remuneration to employees. Otherwise, dissatisfaction may creep into all level of the bank, resulting in inefficiency, perfunctory attitude and poor service standards. These will ultimately affect the

functioning of the organization. Therefore, HR department has to formulate policies with utmost care taking into account all this facets of personnel banking. Radical changes are required in the performance appraisal system to avoid nepotism. Clear policies regarding performance awards, incentives and increase in remuneration have to be outlined and implemented.

FUNCTION 7: PRODUCTIVITY

Productivity is measured by measuring performance, by assigning values to the workers contributions, by taking appraisals. Appraisal is a process that provides an analysis of a persons overall capabilities and potential, allowing informed decisions to be made for particular purposes. The main purposes and desired benefits for appraisal are as follows: To improve individual performance Improving motivation and morale

Clarifying expectations and reducing ambiguity about performance Identifying training and development opportunities

360-DEGREE FEEDBACK
Nowadays, a new way called 360-degree feedback is used apart from traditional appraisal. In human resources, 360-degree feedback is employee development feedback that comes from all around the employee. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as a self assessment and in some cases external sources such as customers and suppliers or other interested stakeholders. (360 refers to the 360 degrees in a circle.) Compared to upward feedback where managers are given feedback by their direct reports, for a traditional performance appraisal where only their managers most often review the employees. The person receiving the feedback to plan their training and development often uses the results from 360-degee feedbacks. The

results are also used by some organizations for making promotional or pay decisions. This is known as multicater feedback. In addition, the aggregate data (cumulative results for a group of 360degree feedback recipients, example the management team or a whole department) provides organizations with curial information required for effective strategic planning

FUNCTION 8: MOTIVATION

According to James motivation is, how behavior gets

started, is energized, is sustained, is directed, is stopped, and what kind of subjective reaction is present in the organism while all this is going on
Motivation is an important concept that has been receiving considerable attention from academicians, researches and practicing HR managers. The HR specialists must use several ways to motivate the employees. To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise. Basic financial rewards and conditions of service (e.g. working hours per week) are determined externally (by national bargaining or government minimum wage legislation) in many occupations but as much as 50 per cent of the gross pay of manual workers is often the result of local negotiations and details (e.g. which particular hours shall be worked) of conditions of service are often more important than the basics. Hence there is scope for financial and other motivations to be used at local levels. As staffing needs will vary with the productivity of the workforce (and the industrial peace achieved) so good personnel policies are desirable. The latter can depend upon other factors (like environment, welfare, employee benefits, etc.) but unless the wage packet is accepted as 'fair and just' there will be no motivation.

Hence while the technicalities of payment and other systems may be the concern of others, the outcome of them is a matter of great concern to human resource management. Increasingly the influence of behavioral science discoveries are becoming important not merely because of the widely-acknowledged limitations of money as a motivator, but because of the changing mix and nature of tasks (e.g. more service and professional jobs and far fewer unskilled and repetitive production jobs). The former demand better-educated, mobile and multi-skilled employees much more likely to be influenced by things like job satisfaction, involvement, participation, etc. than the economically dependent employees of yesteryear. Hence human resource management must act as a source of information about and a source of inspiration for the application of the findings of behavioral science. It may be a matter of drawing the attention of senior managers to what is being achieved elsewhere and the gradual education of middle managers to new points of view on job design and workforce and worker autonomy. Motivation in simple terms may be understood as the set of forces that causes people to behave in certain ways. The framework shown behind will help us understand the nature of motivation better:

FRAMEWORK OF MOTIVATION

The above framework comprises of six steps: Step 1: Motivation process as shown in the figure begins with individual needs. Needs are felt deprivations which the individual experience at the given time and act as energizers. Step 2: The needs may be psychological (E.g. The need for recognition), physiological (E.g. The need for water, air and food) or social (E.g. the need for friendship). These deprivations force the individual to search the way to reduce or eliminate them. STEP 3: Motivation is goal directed. A goal is a specific result that the individual want to achieve. An employees goal are often driving forces and accomplishing these goals can significantly reduce needs. For Example, some employees have strong drives for advancement and expectations that

working long hours on visible projects will lead to promotions, raises and greater influence. Such needs and expectations often create uncomfortable tension within these individuals. Step 4: Believing that certain specific behaviors can overcome these

tensions, these employees act to reduce it. Employees striving to advance may seek to work on major problems facing the organization in order to gain visibility and influence the senior managers. Step 5: Promotion and raises are two of the ways that organization seeks to maintain desirable behaviors. They are feedback to the employees that their need for advancement and recognition and their behaviors are appropriate. Step 6: Once the employees have received either rewards or punishments, they reassess their needs.

SCOPE OF HUMAN RESOURCE MANAGEMENT

NATURE OF HRM EMPLOYEE HIRING EMPLOYEES AND EXECUTIVE REMUNERATION EMPLOYEES MOTIVATIONE EMPLOYEES MAINTAINENANCE

INDUSTRIAL RELATION PROSPECTS OF HRM

SCOPE OF HRM:
The scope of HRM is indeed vast. All major activities in the working life of a worker- from the time of his entry into an organization until he leavescome under the purview of HRM. Specifically the activities included are HR planning, Job Analysis and Design, Recruitment and Selection, Orientation and Placement, Training and Development, Performance Appraisal, Employee and Executive remuneration, motivation and communication, welfare, safety and health, industrial relations, e tic. For the sake of convenience, we can categorize all this functions into seven sections:

From the Industrial Age to the Information Age From Restricted Markets to Globalization From Bureaucracy to Adhocracy From Stability to Change From Command to Orientation From Muscular to Mental Work

From Solitary to Collective Activity From Specialization to Multitasking From Full-Rime to Part-Rime Work From Followers of Orders to Entrepreneurs

Challenges in human resource management in the new millennium


The world of human resource management is changing more rapidly than can be imagined. Constant environmental changes mean that human resource managers face constant challenges. They must respond by taking advantage of gradual yet profound changes in the nature of the field, current practices, and overall human resource management policies, mission and vision. Challenges for Human Resource Management (HRM) are as follows:
1) From the Industrial Age to the Information Age: Work performed

in factories by machines is being replaced by work in offices or at computer terminals. And instead of working with things, people increasingly work with ideas and concepts. Information and knowledge have replaced manufacturing as the source of most new jobs.

2) From Restricted Markets to Globalization: Our old local regional

vision is giving way to a new global economic order and business vision. The new demand is think globally and act locally. We are also used to dealing with restricted or concentrated markets. We need to become accustomed to dealing with business from a new global perspective.
3) From Bureaucracy to Adhocracy: The rigid organizational

hierarchy with its monolithic chain of command is giving way to integrated team networks based on autonomy and flexibility. Rigid departmentalization is being replaced by flexible organizational structure - business units and profit centers that change rapidly. We are used to working in mechanical, bureaucratic, vertical and pyramidal organizations. We need to become accustomed to working in organizations that grow and change as if they were alive.
4) From Stability to Change: Static, permanent organizations designed

for a stable and predictable world are giving way to flexible, adaptive organizations more suited for a new world of change and transformation. Emphasis on permanence, tradition and the past is giving way to creativity and innovation in the search for new solutions, new processes, and new products and services. Maintaining the status quo is less important than a vision of the future and the organization's destiny. We are used to dealing with certainty and predictability. We need to become accustomed to dealing with uncertainty and ambiguity.
5) From Command to Orientation: The traditional hierarchical notion

of authority based on vertical imposition of orders and instructions is giving place to democratic leadership based on the organization's mission and vision. Blind, reactive obedience is giving place to spontaneous, proactive collaboration, and employee commitment. We

are used to working under authoritarian, autocratic command. We need to get used to working with democratic, inspirational leadership.
6) From Muscular to Mental Work: Repetitive physical labor that

doesn't add value is increasingly being replaced by mental creativity. Routine and monotony are giving way to innovation and a break with tradition. in the past, people were considered to be merely workers, an old concept that associated people with things. Now people are considered purveyors of activities and knowledge whose most important contributions are their intelligence and individual talents. We are used to dealing with physical, repetitive manual labor; we need to become accustomed to dealing with mental, creative, and innovative work.
7) From Solitary to Collective Activity: Teamwork is supplanting

individual activity the old emphasis on individual efficiency (on which the total efficiency of the organization depended) is being replaced by group synergy. It's a matter of multiplying efforts, rather than simply adding them. We are used to individualized, isolated work; we need to change to high-performance teamwork.
8) From Specialization to Multitasking: The traditional division of

labor with its consequent fragmentation of activity is evolving toward more varied and integrated work. Compartmentalization is changing to a systematic holistic vision, unified rather than separate. We are used to dealing with division of labor and task specialization. We need to become accustomed to working in teams and with holistic organizations. From a focus on Products and Services to a Customer Orientation. In the past, the product or service was the most important element. Now, the customer to whom this product or service is targeted has become fundamental. Before, an internally focused vision based on the product or service prevailed. Now, an externally focused vision for the customer who is going to use that product or service

predominates. In the past, the product/service was the goal. We're used to working with the products and services we produce or offer. We need to shift toward looking after the customer's needs.
9) From Full-Rime to Part-Rime Work: Work carried out with total

and exclusive dedication to a single company is coming to an end. It is being replaced by work carried out at any time, and at any place, to the extent that workers are becoming suppliers for various activities and various companies at the same time. The old concept of a job with a single schedule and a formal job description, dating back to the Industrial Revolution and the main feature of the Industrial Age, is being supplanted by a new concept of work that typifies the digital age. Part-time work, remote work, and virtual work constitute these new forms of human activity we are used to the old concept of a single job for life, exclusive and full time. Now, we need to become accustomed to work as it is defined in the digital age.
10) From Followers of Orders to Entrepreneurs: The old concept that

people are hired workers who hold certain positions according to fixed schedules and following internal rules and regulations is being supplanted by a new concept that rewards internal entrepreneurship. In the past, performance evaluation emphasized things like absenteeism, punctuality, and personal discipline. Now, it focuses on vision, goals and results, and especially on personal contributions to organizational objectives. Rather than being conservative bureaucrats, workers are becoming innovative and creative. And the new generation of workers (the networked generation) created by digital technology is leaving the older generation behind. We are used to working by following rules and regulations, external controls and standards; now we need to become goal oriented and mission driven.

HUMAN RESOURCE INFORMATION SYSTEM

INTRODUCTIOON STEPS IN IMPLEMENTING HRIS

USES OF HRIS

HUMAN RESOURCE INFORMATION SYSTEM


The Human Resource Information System is a systematic procedure for collecting, storing, maintaining, retrieving and validating data needed by an organization about its human resources. The HRIS is usually a part of the organizations larger management information system. HRIS need not be complex or even computerized but computerization has its own advantage of providing more accurate and timely data for decision making.

Steps in implementing HRIS:


a) Inception of Idea. b) Feasibility study. c) Selecting a project team. d) Defining the requirements. e) Vendor analysis. f) Package contract negotiation.

g) Training h) Tailoring the system. i) Collecting the data j) Testing the system k) Starting up l) Running in parallel m) Maintenance n) Evaluation

Uses of HRIS

E mplo And labor

H ealth, Safety & Security


HRM IN BANKS

BACKGROUD OF INDIAN BANKING SECTOR WHAT IS HRM IN BANKS EVOLUTION OF HRM IN BANKS HRM AS IMPORTANT TOOL OF BANKING SECTOR

BACKGROUND

Human Resources Management (HRM) is concerned with people, performance, practices, information, work and life. It is concerned with building an infrastructure that impacts employees, customers and other

stakeholders. Wherever the HRM functions and practices are aligned with the overall corporate strategies, business goals are met and sustained. Similarly, successful HRM attaches great value to people and creates an organization, which is both competitive and compassionate. Wherever HR develops professionals with appropriate competencies it becomes the driver of the business by partnering the development process. HRM of banking should be no different from the rest of the businesses. As Indian banking starts grappling with issues of globalization, adoption of new technology and growth HRM becomes critical and could be the major growth driver. Indian banking is the happening place witnessing exciting days. It would be interesting to study the role of HRM in the Indian banking story.

BACKGROUND OF INDIA BANKING SECTOR Based on the banking policy adopted from time to time and the stance of the regulatory authorities, the chronology of Indian banking could be classified into four distinct periods namely

Till 1970 Pre-

1970-1990 Post-

1990-2000 Post-Reform

Post-2000 The era of globalization the where the

nationalization nationalization which period of class but pre-reform heralded banking period saw branch enhanced customer base massive new sector

which setting up of banks have to private meet banks aggressive are competition and

expansion and which technology aggressive -reform outreach in the driven

EVOLUTION OF HRM IN INDIA

PERIOD

DEVELOPMENT STATUS

OUTLOOK

EMPHASIS

STATUS

1920-1930

Beginning

Pragmatism of capitalist

Statutory, welfare, paternalism

Clerical

1940-1960

Struggling recognition

of Technical legalistic

Introduction of Administrat techniques Regulatory, Conforming, ive

1970-1980

Achieving sophistication

Professional, Legalistic, Impersonal

Imposition Standards

of on

Managerial

Other Function Human Values, productivity

1990s

Promising

Philosophical

through people

Executive

HRM in the banking industry:


The classification of Indian banks into broad groups such as public sector, old private sector, new private sector, foreign, regional rural banks and

cooperatives are largely on the basis of ownership pattern. It is also well known that the business mix, delivery channels and IT strategies of these organizations vary substantially. What is little known but of greater importance is that each of these banks follows very distinct HR practices which have contributed, substantially, to the business processes. HRM in Cooperative Banks It is sad that the HR policies of the 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 and it is hoped that these banks will fast catch up with others. It may be recalled that, in a controlled environment and to meet with 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 of staff and providing them across the country. The personnel policies, be it salary or promotion or transfer, were driven by grades and seniority. Job rotation has been a major plank of developing expertise. HRM in Private Banks and Foreign Banks The HR function as practiced by private banks and foreign banks is effectively involved in the identification of specific skills that each job

warrants and recruiting suitable staff by every way possible. In these banks, recruitment is a continuous process with a strong focus on getting the right person for the right job by offering appropriate compensation, incentives and designations. There is a great energy spend in keeping the turnover low and offering appropriate training inputs. Possibly there are as many pay structures as there are employees. More importantly, HRM has a role in monitoring and mentoring the employee. There are no routine transfers. Rather people are recruited in different geographical locations and different levels. Technology has helped in centralizing the back office and other functions such that service can be provided from a distance. These institutions adopt a proactive performance appraisal system but still short of 360 Degree appraisals. Their training process is concerned with both skills building and motivating. It should, however be said that the demand for professionals on account of the 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 case of PSU banks the recruitment process is annual and large-scale. People are recruited at the lowest grade and promoted in 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 and more an exception than rule. Pay packets are uniform for a grade / level with annual increments and uniform perquisites. Increments are earned automatically. Transfers are not driven by business requirements but a matter of routine. Vacancies get created as and 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 and 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 and 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 and 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.

THE SURVEY

AS PER SURVEY CHALLENGES IN HRM ROLE OF HRM IN BANKS

The Survey Recently the Institute held its 8th Bank Education Conference, an annual feature in the Institutes list of activities. The theme of the current and the previous seminar was on how HRM has reacted to the various drivers of

modern banking and how to enhance performance in the fast changing banking sector. The participants at the seminar are very senior human resource personnel in banks. All the sectors such as private sector banks, public sector banks and foreign banks are well represented in the seminar. In the current conference 12% of the participants were General Managers or head of the HR function; 30% were in the rank of Deputy General Managers (DGMs), Assistant General Managers made up about 14% and Chief Managers made up the remaining 44% of the participants. About 70% of the participants were from the public sector including all India financial institutions, 25% from private sector and 5% from foreign banks. Resource persons of IIBF also participated in the seminar. The speakers and paper presenters were also from a similar background. We took the opportunity to conduct a survey amongst the participants of the seminar on various HR related issues. The results of the survey threw up some interesting facets to the HR issues confronting the banks today and how the HR departments are coping with it.

HRM Challenges (as per the survey):

The Role of HRM in banks today (as per survey)-

Only 14% of the participants to the survey indicated that HRM drives business transformation initiatives. Another 31% said that the HRM is aware and advises in the business transformation issues. It is therefore not completely incorrect to conclude that HRM participates in the decision and allocation process after the major issues are decided. It is seen that, post business decision the HRMs participation in the business implementation and resource allocation is solicited (about 50% of the respondents attest that).

It is necessary that banks take up human resources accounting and involving HRM Departments fully in the business process changes so that the full potential of change in business processes may be realized. Interestingly the response about the changes within HR Departments with reference to a change in the business strategy revealed similar dichotomy. Nearly 44% of the responses indicated that the HR strategy is not formally aligned and documented to coincide with business planning. As indicated previously, one of the major reasons for this could be that there is, almost no human resources accounting within the bank and due to market compulsions, HR preparedness may not be a criteria for business development decisions. Thus, most of the participants have indicated that HR strategy is developed after the business strategy is finalized. 40% of the respondents indicated lack of participation by HR in the decision process but being reactive to changes.

Effectiveness of HRD (as per survey)Posting right person for the right job, retaining talents, planning for the long term needs of the bank, dovetailing employee preferences in the deployment process, and capacity to make staff changes that drive business changes are the corner stones of HR strategy. How effective are the banks in performing these tasks? Consider the following:

From the above graph it is clear that the HR departments feel that They are effective when it is a question of ability to post staff with appropriate skills and capabilities for the job/s. Also these departments have enough room / flexibility with regard to their ability to make changes in staffing pattern / position based on changes in business conditions. Where they do not have equal flexibility is in incorporating employee preference in the deployment process and identifying long term trends in supply and demand for staff and planning accordingly.

As regards PSU banks, the response to the effectiveness should, be read in conjunction with the issues on transfer and promotion policy. The posting of staff with appropriate skills and capabilities could be well suffixed with, subject to availability of suitable skills and talents in the given location. HRM effectiveness could also be studied with reference to be its role in staffing of each department/unit. In an effective organization, the department will have a say in the matter and work hand in glove with the line departments. This seems to be in vogue in private sector and foreign banks. Invariably, in these organizations, the line department and HRD jointly select the candidates, while HRD is involved in the head hunting, finalizing pay and related aspects. In the case of PSBs, in the past, the selection process was through advertisement for a large number of posts. On selection, the candidates were given an induction training and jobspecific training. Undoubtedly this has been a successful model as it has thrown up a large number of very efficient leaders in the sector. In the recent years, however, there are apparent changes in the way the staff are selected in PSBs. There are campus recruitments and sporadic instances of specialists being inducted at higher levels. Some of the banks have also started offering market related pay. Yet, as of now, it appears that in the case of PSBs the line departments have no rote in the selection of candidates. The responses clearly show that there is a need for greater coordination between HR and line the participant HR functionaries have indicated that job rotation is an important aspect of employee development. They have also indicated that most jobs are becoming specialist in nature. Indeed the concept of job rotation is contrary to the development of specialist skills.

Coping with employee turnover If a bank does not have the staff with the required skill at the required place it would resort to recruiting. This, coupled with I. The need for specialization and new skill sets for CBS and II. Marketing of bank products brings us to the two issues that have gained the attention of HR Departments in the recent years, namely staff deployment techniques and managing employee turnover.

Across the banking sector every one is facing a high level of employee turnover in the recent years as per above figure. If till recently it was the BPO sector, which was the biggest recruiter, it is now the turn of retail business. It is now the turn of retail business it is seen that bank employees are able to take up jobs in these relatively new areas. In view of this, it is seen that the turn over level during the current year is higher than the previous years. It can be said that the current period is the most challenging times for HRD, as staff - mostly talented and experienced officers - move from public sector to private sector and within the private sector to greener pastures. Certain specialist areas such as treasury management, risk management and customer relationship face acute shortage of experienced

and talented staff. As PSBs cannot offer - barring a fraction of their business - market related salaries the turnover has been high. Another reason for loss of staff is the requirement of domain experts in the IT companies. Transfers have also been cited as one of the reasons for turnover in the public sector. The available avenues to manage this issue are outsourcing, re-skilling, hiring temporary staff; reuse of retired staff, etc.1t is seen from the news reports that, in making financial inclusion happen, banks have resorted to the use of the expertise of retired staff. Some of the retired staff has also come forward to handle training assignments. The following figure 8 shows the importance of HR in each strategy adopted by banks in the matter of staff deployment

HUMAN CAPITAL ACCOUNTING Possibly one of the constraints in managing turnover is non-availability of sufficient information on human capital with HR Managers. The HR departments did not have the data on Human resources in terms of skills and performance related to those skills. Interestingly 21% of the participants felt that they are not able to, specifically; identify the skill sets and specialization among the staff, as there is no data on the same. The survey shows that this is an area that has not been fully exploited by the banks. It appears that HRM executives did not have adequate knowledge about human capital systems and the possible use of the systems for organizational excellence. In the circumstances, placement, promotion decisions are taken on the basis of some knowledge and not deep knowledge about the staff. Evidently, there is a need to build up data on each staff and use the same.

Performance

appraisal:

A related issue is the performance appraisal system that currently focused more on promotions and not on linking performance to deployment or specialization. Performance appraisal is also more on traits than on any qualitative or quantitative appraisal of work. In the absence of clearly defined individual and organizational goals the appraisal has become a routine. Participants indicated the need for a change and more business oriented appraisal and felt that appraisal systems such as 360 Degree appraisals will be useful in future. The overwhelming feeling is that PA system should change and react to new needs.

Recruitment in banks
Evidently the banks are waking up to many new issues. One such issue is the changing recruitment market. What according to HR executives attracted candidates to the banks?

What attracts candidates to your bank?


Serial No. 1 2 3 4 5 6 7 8 Work and Life Balance Career growth opportunities Banks track record Compensation being better than market Good company values Challenging work environment Positive corporate reputation Others Particulars % Responses (as per survey) 11 14 17 13 5 10 25 5

The participants to the survey felt that the recruitment policies, in future, will be woven around the above aspects (Table).It is an indication of changing times that the list includes items such as performance linked incentives, fast track promotion, foreign posting education, choice of departments, sabbatical and stock option. If turnover is high and recruitment poses challenges on account of high salary and work life balance expectations the HR function needs to adopt many different methods to educate/train the staff.

Employee development

techniques

It was earlier seen that the major task before the HRD is to instill new skills

with the staff. In this connection it can be pointed out that all the banks own a large training network. They also have access to other training establishments and seminars. Banks also send employees to. Be schools for short duration courses and MDPs. The major emphasis of the banks is to use their training systems and establishments to the fullest extent. Banks were also keen on encouraging their staff to take up new courses and correspondence courses. The schemes of reimbursement of expenses were rather liberal.

As staff turnover and new positions are filled, knowledge management becomes important. The rules, procedures and customer, data that have been gathered need to be made available to the new staff such that continuity and service excellence is maintained. There is a need to curtail expenses in reinventing wheels. The HR executives felt that the HR department can also

function as knowledge management center. Banks have already begun knowledge management efforts.

PSU Banks in India Planning Outsourcing

Different segments of the industry have acknowledged the benefits of outsourcing their businesses in order to register higher growth as well as reduce costs. Financial companies, Software companies, Legal firms and Pharmaceutical companies are leading the outsourcing business. In a significant development, two public sector banks in India received the green signal from the finance ministry to outsource non-core work like salary payments and recruitment. According to FINANCE MINISTER sources, outsourcing of non-core functions could help the nationalized banks in using their workforce for sanctioning loans and recovery of bad debts. The private banks had used direct sales agents for a series of activities ranging from giving loans to issuing credit cards and accepting deposits. However, they had to stop depending on outsourced staff following a directive from the Reserve Bank of India. Outsourcing of core services is not permitted. However, outsourcing of non-core services will definitely open more options before public sector and nationalized banks. The Times of India reports that The issue is going to be discussed by finance minister P Chidambaram when he meets bank chiefs on this occasion. But officials said that the government did not want to force any bank to embrace the outsourcing culture and was merely trying to create the environment for those who want to exercise the option.

CASE STUDY

HRM IS PRACTICED BEST IN HDFC AND HSBC HSBC ranks 6th and HDFC ranks 9th in the top 10 of THE BEST COMPANIES TO WORK FOR IN INDIA survey conducted by business today in association with mercer HUMAN RESOURCE COUNCELLING.

HONK KONG AND SHANGAI BANKING CORPORATION LIMITED


HSBC call them as the worlds local bank. It has its headquarters in London. It is the largest banking and organization in the world. HSBCs international network comprises of over 9800 offices in 77 countries and territories in Europe, the Asia pacific region, the Americas, the Middle East and Africa. . HSBC has been able to achieve the unthinkable if on one hand it pushes its employees hard to deliver top-notch performance, on the other hand it can be externally gentle and benevolent towards its employees to leave office early on family occasions. Despite all the thought talk while in office, HSBC has tried to insure their life foe its employees- is not just work further of this comes from the fact that employees are persuaded to make us of their privilege leave. The sensitivity with which the HSBC management in India handled the voluntary retirement scheme (VRS) for its employees is evidence of the care and concern HSBC has for people. VRS was implemented with a human touch and despite asking some employees to pack their bags, the management insured that the employees left with dignity and an attractive severance package. According to Niall s. k. booker, people can accept hard decision as long as they are fair. Some of the other innovative HR practices at HSBC are:

HSBC has a variable compensation package, which essentially leaves the employees with more cash and the freedom to decide what to do with rather than bank providing benefits like car, housing, etc. BRIGHT IDEAS and THANK YOU AWARDS that is employees are allowed to come with their ideas on how to work better and instant recognition of good work have resulted in employees feeling more strongly for organization and creating and energetic workforce. HSBC employees are evaluated on the HSBC capability FRAMEWORK. The framework defines the skills, attitudes and behaviors expected of their employees around the group. It provides a common language to describe what represents success in HSBC, both now and in future. The CAPABILITY FRAMEWORK is a structured around six capabilities cluster.

DRIVING BUSINESS VISION AND BRAND

COMMERCIAL JUDGMENT

IS INNOVATIVE AND FORWARD LOOKING. ESTABLISHES TEAM AND PERSONAL OBJECTIVES THAT ARE ALIGNED WITH HSBCS BUSINESS GOALS. SUPPORTS THE DIFFERENTIATION OF HSBC AND ITS BRAND FOR COMPETION. UNDERSTANDS AND INTERPRETS BUSINESS INFORMATION

LEADING PERFORMANCE

CUSTOMER DRIVE

COMMITED TO THE DELIVERY OF OUTSTANDING CUSTOMER SERVICES. WINS NEWS AND LASTING COSTOMER RELATIONSHIPS.

WORKING WITH OTHERS

DRIVING, COMMITMENT AND PERSONAL DEVELOPMENT

DEMONSTRATES A HIGH DEGREE OF COMMUNICATION TO HSBC AND DRIVING SELF TO ACHIVE BUSINESS AND PERSONAL GGOALS, OVERCOMING OBSTACLES AS THEY ARISE.

HOUSING DEVELOPMENT FINANCE CORPOPRATION BANK LIMITED If I dont have happy employees, I will never have happy customers. This simple one liner from Aditya Puri, Managing Director of HDFC BANK, makes it crystal clear how much HDFC values its employees. The KARO SIFARISHS PROGRAM has proved to be a gigantic step in HDFC Banks to keep its employees happy. The KARO SIFARISHS PROGRAM is actually an employee referral scheme to recommend friends and in the process of incentive. Thus HDFC BANK ensures that the best buddies work together. The logic is simple; it creates a happy work place as nobody could call his or her friends to work in the place of misery. Currently 30% of recruitment takes place through employees referral. It is such innovative and people friendly majors that have contributed to HDFC BANK blossoming from a bank with half a dozen employees in 1995 to a closely-knit family over 11500 employees in 2005.

STATE BANK OF INDIA


CASE STUDY
In February 2001, Indian largest public sector bank (PSB), STATE BANK OF INDIA (SBI) faced severe opposition from its employees over a VOLUNTARY RETIREMENT SCHEME (VRS). The VRS, which was approved by SBI board in December 2000, was in response to FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRYS (FICCI) report on the banking industry. The report stated that the Indian Banking Industry was overstaffed by 35%. In order to trim the work force and reduce staff cost, the government announced that it would be reducing its manpower. Following this, the Indian Banks Association (IBA) formulated a VRS package for the PSBs, which was approved by Finance Minister. Though SBI promoted VRS as a Golden Handshake, its employee union perceived it to be a retrenchment scheme. They said that VRS was completely unnecessary, and that the real problem, which plagued the bank were NPAs. The union argued that the VRS might force the closure of rural branches due to acute manpower shortage. This was expected to affect SBIs aim to improve economic conditions by providing necessary financial assistance to rural areas. The union also alleged that the VRS decision was taken without proper manpower planning. In February 2001, the SBI issued a directive altering the eligibility criteria for VRS for the officers by staffing that only those officers who had crossed the age of 55 would be granted VRS.

THE PROTESTS
The SBI was shocked to see the unprecedented outcry against the VRS from its employees. The unions claimed that the move leads to acute shortage of manpower in the bank and that the banks decision was taken in the haste with on proper manpower planning undertaken. They added that the VRS would not be feasible as there was an acute shortage of officers (estimated at about 10000) in the rural and semi urban areas where the branches are not yet computerized. Moreover, the unions alleged that the management was compelling employees to opt for the VRS. They said that the threat of bringing down the retirement age from 60years to 58 years was putting a lot of pressure on senior bank officials to opt for the scheme.

THE POST VRS DAYS


According to reports, SBIs total staff strength was expected to come down to 200000 by March 2001 from the PRE-VRS level of 233000. With the average of 5000 employees retiring each year, analysts regarded VRS as an unwise move. By June 2001, SBI has relieved over 21000 employees through the VRS. It was reported that another 8000 employees were to be relieved after they attain the retirement age by the end of 2001. Analysts felt that this would lead to a tremendous increase in the workload on the existing workforce. Analyst felt that SBI would take serious steps to reorient its HRM policy to restore employees confidence and retain its talented personnel. SBI had made strong organizational strengths and an excellent tanning system, but due to weak HR Policy it lost its experts to its competitors. As a result of the VRS, SBIs net profit decreased from Rs.25 billion in 1990-00 to Rs.16 billion in 2000-01.

WHY STUDY HRM?


Towards the end of this project, we pose a pertinent question and answer to it too. The catechize is WHY STUDY HRM? The response to this question is in lines that follow. Taking a look at the people is a rewarding experience. It is the people who possess skills, abilities and aptitude that offers competitive advantage to a firm. It is only human resource that is capable of deciding, implementing and controlling activities. No computer can substitute human brain, no machine can run without human inventions and no organization has mandate to exist if it cannot serve peoples needs. HRM is a study about people in organizations how they are hired, trained, compensated, motivated and maintained/retained. A factory is built not by god, but by human being. It is people who build factories, structure organization and manage them successfully. How an idea is conceived by an entrepreneur, how building is constructed and machinery is installed, how needed inputs are marshaled and are put to use, and how good and services are produced, is a sags which is no less thrilling and exciting than a general leading army to victory in a war, an invention made by a scientist or a remedy discovered to cure AIDS disease. HRM as stated above offers a comprehensive picture about the people in the organizations. The rapid growth of globalization has increased the number and significance of banks in India which in turn increased the mobility of people. Working in banks in Todays scenario is a challenging task as the latest chapter in this book tells. A typical Banking and Insurance student is likely to take up a job in banks, insurance company, financial institution or MNCs after completing his/her degree. A prior knowledge about HRM, particularly international HRM, keeps him/her prepared for the challenge lying ahead.

JOBS AND CAREERS IN HRM:


This HR positions in Organizations can be divided into three categories:
HR specialist: - These jobs are entry level positions for an

HRM

career.

It

includes

roles

such

as

Interviewer,

Compensation analyst, benefits coordinator and trainer.


HR Manager:-A person is a generalist who administers and

coordinates programs cutting across functional areas. He could be a top ranking person at a plant and is expected to know about all areas of HRM.
HR Executive: - He is the Vice president of an organization,

has the responsibility of linking the firms to the corporate policy and strategy with HRM.

Conclusions Already there are indications that the above issues have started weighing with the HRM. It is seen that the recruitment process in the banking industry is changing. Apparently future recruitment will be clearly driven by the number of persons each SBU needs at different revels. The routine skills and functions will be to a large extent outsourced and banking will be more focused on customer relationship. In view of this, it may not be possible, any more to recruit a large number of persons with different qualifications, post them across geography, train them and nurture them internally. Banks will also get used to the word attrition and learn to manage this aspect. It is also hoped that the market will offer ready to use candidates who have, in addition to IT, Retail, Finance and other specializations and good level of banking knowledge. In such a situation pay packet should be market driven and adequate. Another thing that will change is the policy of transferring people across the country. On the contrary, talents will be recruited locally and nurtured. Those who like the challenge and salary will apply for the jobs in different locations. Continuity and responsibility towards customer could be more if people are recruited for different geographical locations. As more and more new skills are wanted by the banking sector1 training could be outsourced and blended with learning. There is a need for an active dialogue with the academic institutions such that candidates are job-ready. Finally, it is hoped that the ever expanding IT inventions could be more effectively used in reaching training across the geography rather than run huge in house infrastructures.