PROJECT REPORT ON

COMMERCIAL BANK MANAGEMENT:

HUMAN RESOURCE MANAGEMENT IN BANKS

M.COM – I BANKING & FINANCE 2020-2021

SUBMITTED BY: Harshit kanakia

ROLL NO – 25
PROJECT REPORT ON COMMERCIAL BANK MANAGEMENT:

HUMAN RESOURCE MANAGEMENT IN BANKS

M.COM – I BANKING & FINANCE

2020-2021

SUBMITTED BY: Harshit kanakia

ROLL NO – 25

PROJECT GUIDE: Prof. JAYA MANGLANI

SUBJECT: COMMERCIAL BANK MANAGEMENT

H.R. COLLEGE OFCOMMERCE AND ECONOMICS

CHURCHGATE, MUMBAI- 400 020.

SR NO. COMPONENTS
INTRODUCTION OF HUMAN RESOURCE
1.
MANAGEMENT

2. FUNCTION OF HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE PLANNING

TRAINING

DEVELOPMENT

PERFORMANCE APPRAISAL

3. HRM IN BANKS

4. NEED & IMPORTANCE OF HR IN BANKS

5. HR PRACTICES ADOPTED BY COMMERCIAL BANKS

6. EXAMPLE OF AXIS BANK

7. CONCLUSION

8. BIBLOGRAPHY
INTRODUCTION OF HUMAN RESOURCE MANAGEMENT

Human resource management (HRM) is the strategic and coherent approach to the

management of an organization's most valued assets - the people working there who

individually and collectively contribute to the achievement of the objectives of the

business. The terms "human resource management" and "human resources" (HR) have

largely replaced the term "personnel management" as a description of the processes

involved in managing people in organizations. Human Resource management is evolving

rapidly. The Human Resources Management (HRM) function includes a variety of

activities, and key among them is deciding what staffing needs you have and whether to

use independent contractors or hire employees to fill these needs, recruiting and training

the best employees, ensuring they are high performers, dealing with performance issues,

and ensuring your personnel and management practices conform to various regulations.

Activities also include managing your approach to employee benefits and compensation,

employee records and personnel policies. Usually small businesses (for-profit or

nonprofit) have to carry out these activities themselves because they can't yet afford part-

or full-time help. Human Resource Management or Personnel management is the activity

of managing personnel, usually employees. In any organization, managing personnel is

the process of making sure the employees (not the customers) are as productive as they

can be. This can include hiring, firing, or transferring people to/from jobs they can do

most productively. This subject is a major at many universities, or a minor in the business
school. It is also known as personnel administration, which is functionally an equivalent

term.

MEANING OF HUMAN RESOURCE MANAGEMENT:

A business unit needs employees to look after different activities. This is called

manpower or human resource. Such human resource needs to be developed fully so that it

will make positive contribution for the progress and prosperity of a business unit. For this

systematic development and management of human resources is necessary. HRM is an

organized learning experience aimed at matching the organizational need for career

growth and development. It is a process involving series of learning activities designed to

acquire desired level of competence among employees. HRM is a continuous process and

it needs money. Such investment creates a team of efficient, skilled and trained

manpower which brings success and stability to a business unit. HRM programmes offer

long term benefits to an organization.

FUNCTION OF HUMAN RESOURCE MANAGEMENT

As defined by Bulla and Scott, human resource planning is ‘the process for ensuring that

the human resource requirements of an organization are identified and plans are made for

satisfying those requirements. Reilly defined workforce planning as: ‘A process in which

an organization attempts to estimate the demand for labor and evaluate the size, nature

and sources of supply which will be required to meet the demand.’ Human resource

planning includes creating an employer brand, retention strategy, absence management

strategy.

PLANNING: As the economy grows at a steady rate of around 7-8%, incomes rise and

demographic dividends start accruing, the Banking industry is expected to take a

quantum leap forward. But this growth will need a large number of people and

considering that there are retirements in lakhs, a defining moment is being presented

before the Nationalized Banks to transform. Are the banks ready to handle the new bunch

of employees who will be culturally so different from their predecessors of the post

nationalization era? It all begins with having a manpower plan.

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

management. 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 need for training & development is determined by the

employee ‘s performance deficiency, computed as follows.

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. Promotion is regarded as one of the ways of recognizing development

undertaken by an employee. Development is also largely dependent on training.

Generally, people think that training & development are one & the same, but there are

many differences between them.

PERFORMANCE APPRAISAL: A performance appraisal is a systematic and

periodic process that assesses an individual employee’s job performance and productivity

in relation to certain pre-established criteria and organizational objectives. Other aspects

of individual employees are considered as well, such as organizational citizenship

behavior, accomplishments, potential for future improvement, strengths and weaknesses,

etc. Some applications of PA are compensation, performance improvement, promotions,

termination, test validation, and more. While there are many potential benefits of PA,

there are also some potential drawbacks.

HUMAN RESOURCE MANAGEMNENT IN BANKS

I am happy to note that a conference focusing exclusively on HR issues is being

organized by Public Sector Banks. I understand that the conference is being organized at

the instance of the Government of India, who are the promoters/ owners of the Public

Sector Banks. It is good to see the promoters/ owners taking a keen interest in the human

resource issues of the promoted companies. Let us have a look. Why are the
promoters/owners being made to take a keen interest in your routine affairs? Efficient and

effective HR systems are the key here. In my opinion, this may be due to something

lacking in the management capacity of the banks. Hence, we need to upgrade our HR

capacity development process to enhance management capacity of banks, to avoid such

needs on a recurring basis. I would structure my talk today into three broad segments

where I would be discussing the importance of human resource management for banks,

some of the key challenge facing HR managers in Public Sector Banks, including

probable solutions, and why now is the right time to focus on HR issues. 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.

1. 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.

2. 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.

3. 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.

4. 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.

5. 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. 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. 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.

NEED & IMPORTANCE OF HR IN BANKS

industry. Management of people and management of risk are two key challenges facing

banks. How you manage the people and how you manage the risks determines your

success in the banking business. Efficient risk management may not be possible without

efficient and skilled manpower. Banking has been and will always be a "People

Business". Though pricing is important, there may be other valid reasons why people

select and stay with a particular bank. Banks must try to distinguish themselves by

creating their own niches or images, especially in transparent situations with a high level

of competitiveness. Banks must articulate and emphasize the core values to attract and

retain certain customer segments. It is a common complaint among bank executives that

skilled manpower is in short supply. No two arguments on this, HR resources are

becoming scarce – both in quality and quantity. And, it is quite elementary that any

resource that is in short supply needs to be properly managed for the benefit of society

and, therefore, you need to pay attention to the entire Human Resource Management

process. There are several reasons for the new approaches to the nefarious activities

prevalent in the market and also save it management of staff. Firstly, infrastructural

problems with from the people who have vested interests. These hamper growth in the

bank and over staffing. Secondly, the autonomous growth of these institutions. One

important increasing competitive pressure in cooperative banking had factor to be noted

is that though the cooperative banks come led to greater attention to controlling labor

costs and under the financial discipline of the RBI, NABARD and the increasing labor

productivity. Thirdly, the nature of change Apex Bank, they enjoy autonomy in personnel

matters. had moved the emphasis towards being a market-driven rather than an
administratively driven organization and the cooperative banks should be committed to

Equal importance of staff quality was being emphasized.

HR PRACTICES ADOPTED BY COMMERCIAL BANKS

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.

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.

HR PRACTICES AND METHODS

A key focus of the human resource management is highlighted in the role of staffing,

performance management, training and development, and compensation that plays

indifferent types of business strategies. With the acquisition and preparation of human

resources, including planning, recruitment, selection, and training can affect the whole

organizational performance. The 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 company’s

competitive position. The selection method standards such as validity and reliability are

utilized. Beyond the human resource strategies are the rewarding and compensating that

can strengthen or weaken the employee effectiveness. 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 organization ‘s 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.

EXAMPLE OF AXIS BANK:

HUMAN RESOURCE OBJECTIVES OF AXIS BANK:

1. To initiate & institutionalize globally competitive HR practices in the Bank in our

pursuit to become a Bank of international standards and to become an employer

of preferred choice.

2. To put in place relevant HRD strategies and use modern methodologies to

undertake organizational renewal; identify and nurture talent, bring about marked

changes in the mindset of employees at all levels so as to enhance HR Quality.

3. To create a performance-driven culture and an exciting workplace for the

employees.

4. To create a pool of entrepreneurial managers and business leaders for future.

5. To inculcate a strong and effective sales and service culture across levels in the

organization in order to generate strong stakeholder affiliation.

6. To create a learning organization for employees’ intellectual growth and

creativity; and to re-skill the workforce to operate in digitally enabled modern

core banking environment.

Philosophy and is focused towards attainment of long-term organizational goals.

A very strong Organizational Leadership at different levels forms the key link in the

Model. These are: -

1. Strategic Leadership - Corporate level

2. Business Leadership - Zonal & Regional level

3. Operational Leadership - Business unit level i.e., branch

The two vital Human Resource sub-systems i.e., HR Planning & Management Sub-

System & Competency Based HRD Sub-System shape the very crucial Performance

Environment within the Bank which facilitates development of enabling capabilities of

the people. The Model is adequately supported by a suitable Learning Platform, which

imparts proper Knowledge and enhances Learning among people (functional, behavioral

etc.) so that their Competence increases and their potential could be properly leveraged

for greater Individual and Organizational Effectiveness.

HR BLUEPRINT FOR BUSINESS-DRIVEN HR REFORMS - Board level approved

strategy paper outlining various organization wide HR reforms interventions.

KHOJ - Organization wide Talent identification and Development Programmed for

Officers and Clerks (Through scientific process of identification and selection,

employees with high potential to be deployed in key business areas. Such employees to

be provided with suitable grooming and career.

the CMD for immediate relief)

PARAMARSH- Employees Counselling Centre (Counselling centers for providing

psychological assistance and guidance to overcome their stress, complexities and

conflicts in order to lead a better life. This is totally confidential between the employee

and the counsellor. First such center set up at Mumbai where services of professional

Clinical Psychologist are available.

AXIS FINANCIAL REWARDS FOR BUSINESS LEADERS- Weighted Index based

Model (with pre-defined weight ages for different business KRAs) for balanced

assessment of efforts of Business Leaders (Branch Heads, Regional Heads, Deputy

Regional Heads and Zonal Heads). Rewards in Cash for achievement of business KRAs.

MEP-TIKSHNA- Management Education Programmed for Executives (GM, DGM,

AGM, Chief Managers) in association with top B-Schools like IIM-Ahmadabad and

Management Development Institute, Gurgaon. The specially designed programmed is

aimed at development of strategic business leaders for the future. So far, 213 executives

have undergone the programmed.

HR RESOURCING POLICY- New HR Resourcing Policy formulate to take care of

various recruitment needs of the bank consequent upon abolition of the erstwhile Banking

Services Recruitment Board (BSRB).

PERFORMANCE APPRAISAL SYSTEM FOR CLERICAL AND SUB-STAFF-

With the objective of bringing an organization wide performance culture in the

organization, hitherto uncovered employees in the Clerical and Sub-Staff cadre brought

in under a new performance appraisal system.

GRADUATES FROM B-SCHOOLS THROUGH CAMPUS RECRUITMENT- To

take care of the Bank ‘s requirement in different specialized areas like IT, Treasury, HR,

Marketing & Sales, Credit, International Business etc. (Around 500 officers being

recruited).

A NEW INDUCTION CUM GROOMING PROGRAMME FOR YOUNG

OFFICERS- With the objective of developing future managers and leaders and for

deployment in key areas, a re-vamped Officers ‘Induction cum Grooming Programmed is

launched.

FAST TRACK CAREER GROWTH OPPORTUNITIES FOR EXECUTIVES AND

OFFICER- In order to provide fast track growth opportunities to aspiring Executives and

Officers, promotional opportunities have been provided.

AXIS LEADERSHIP DEVELOPMENT CENTRE- Board has taken the decision to

set-up a World-Class Leadership Development Centre to be set up to prepare future

leaders for the Bank.

NEW GROUP HR STRUCTURE- A new Group HR Organization Structure is being

put in place to take care of the strategic business – HR needs of the Organization. The

Structure would have balanced focus on HRM and HRD aspects and will put in place

competency-based HR systems and practices.

1. CV SUBMISSION Potential candidates interested in joining the bank are required to

send their complete curriculum vitae. An acknowledgement of receipt is sent for all

submitted applications to the candidate's email.

incoming applications, against prerequisite abilities and skills set for all current

openings. All applications are kept based on strengths and specialization, for future

reference.

3. ABILITY TESTS Potential candidates will be invited to participate in aptitude tests

i.e., numerical, verbal, English and psychometric, when deemed necessary.

4. CAPABILITY BASED INTERVIEWS To ensure that our recruitment process is

fair and consistent, all candidates who are successful at the exams are invited for a

capability-based interview. Interviews are based against capabilities, required for

each position for which the candidate is interviewed for. A capability or competency

is an ability described in terms of skills & behaviors that are essential to effectively

perform within a job.

5. REPLY LETTERS At all stages of the process candidates are kept informed of the

status of their application with an email reply letter.

6. JOB OFFER If a candidate successfully reaches the final stage, a position offering

is made in conjunction with a competitive reward package.

CONCLUSION

The public sector banking system in India is standing at an important cross road. There

are critical choices to be made and initiatives to be taken. The time is ripe for leaving the

old baggage and taking bold measures. These measures would determine the future path

of public sector banks and whether they would continue to retain their position of

preeminence in the banking space or would they yield to the pressure from their peers in
the private sector. Considering the importance that banks have in the nation building

process, the choices made now could have a bearing on the economic future of the

country and on the lives of crores of our fellow countrymen, many of whom are yet to be

touched by the formal financial system. We must succeed. Not only for ourselves but also

for the society and for the nation.

I hope that some of the issues raised by me here today are dwelled upon during the course

of this Conference and concrete action plans emerge to tackle the HR challenges facing

our banks. I wish the Conference all success. Thank you.

BIBLOGRAPHY

BOOKS

 HRM IN BANKING [TY BCBI]

 PERSONNAL MANAGEMENT/HRM - BHATIA S.K.

 HRM: CONTEMPORARY PROSPECTIVE – BREADWELL, IAN, HOLDEN

 HRM &INDUSTIAL RELATIONS – SUBBA RAO

 CASE AND EXERCIES IN HRM – GEORGE, STEVENS

 HRM: CONTEMPORARY PROSPECTIVE – BREADWELL, IAN, HOLDEN

 HRM &INDUSTIAL RELATIONS – SUBBA RAO

 CASE AND EXERCIES IN HRM – GEORGE, STEVENS

 PERSONNEL MANAGEMENT – MAMORIA, C.B.

SEARCH ENGINE:
  www.google.co.in/

 www.yahoo.in/

WEBSITES:

 www.wikipedia.com

 http://www.rbi.org.in/home.aspx

 http://www.sbi.co.in/

 http://www.rbi.org.in/financialeducation/home.aspx

 http://www.moneycontrol.com/