The primary apprehension of the bank should be to bring in proper integration of human resource management strategies with the business strategies. It should faster cohesive team work and create commitment to improve the efficiency of its human capital. More than operational skills today are banking call for these ‘soft skills’ to attend the needs and requirement of the customers at the counter.
Banks have to understand that the capital and technology-considered to be the most important pillars of banking are replicable, but not human capital, which needs to be viewed as a valuable resource for the achievement of competitive advantage. The long-term vision for India’s banking system is to transform itself from being a domestic one to the global level may sound far-fetched at present. To take up this industry to the heights of international excellence requires combination of new technologies, better processes of credit and risk appraisal, treasury management, product diversification, internal control, external regulations and human resources at the most.
The main challenges faced by Banks in our country are the role played by financial instrumentation in different phases of business cycle, the emerging compulsions of the new prudential norms and bench marking the Indian financial system against international standards and best practices. There is a need for introduction of new technology, skill building and intellectual capital formation.
The most important need in this service industry is naturally the HRD. During the early phase of banking development in India after independence, opportunities for employment of the educated man-power were relatively limited. This sector was the preferred employer for the educated persons in the country in addition to civil services. In recent years, this position has changed dramatically. Certain rigidities have also developed in HRD within the banking system as this system is public sector. Its hierarchical structure gives preference to seniority over performance, and it is not the best environment for attracting the best talent from among the young.
How well Challenges are met will mainly depend on the extent to which the banks leverage their primary assets i.e., HR in the context of the changing economic & business environment.
Many literature surveys reveal that a paradigm shift is taking place in the role of the HR function in these organizations. There is a real danger of the function itself being outsourced in most organization. The danger comes through the following shifts:
- The line manger has become increasingly competent even to handle the matters.
- The government is seriously thinking of privatization and this leads to a government-protected system, to an environment where it has to be contended with market forces and large corporations with significant brand equity and also follow vastly different HR strategies & practices.
- Technology is eliminating routine paper activities.
- Virtual organizations are coming up.
HRD Practices in Bank:
I Staff Meetings
- Staff Meeting aims at group synergy, team building, open culture, family feeling and talent recognition which individually and cumulatively benefit the organizations.
- Goals/Targets set for the unit/Bank is discussed in the monthly Staff Meetings conducted at all branches/units and action plan is drawn in achieving them.
- The forum is being effectively utilized for harmonious functioning of all the branches and administrative units through greater involvement and collective contribution of all staff members.
II Brain Storming Sessions
- This is a technique for generating ideas and suggestions on topics of relevance and also to provide alternate solutions to problems by simulative thinking and imaginative power of cross section of employees.
- Corporate Topics are selected for each quarter and BSS are conducted in administrative offices/ braches on the topic during every quarter.
- Worthy implement able suggestions emanated are circulated for necessary action.
III Study Circle
- Concept of Study Circle aims at self development of employees by kindling the desire to acquire/update knowledge, information and experience.
- Guest lectures/ Power Point Presentation / Group Discussions, etc are arranged on topics of general interest by inviting experts in the field.
- Study Circle Meeting are conducted once in two months in administrative offices and once in a quarter in braches
IV Quality Circles
- It is a time tested tool of Total Quality Management (TQM) which promotes team spirit, cohesive quality work culture, commitment and involvement of employees.
CHALLENGES FACED BY THE BANKS:
- The real challenge of this sector is the “Indian companies”, how to transform into global corporations without losing the positive values and culture that they have developed.
- As most part of the jobs in this industry is monotonous/repetitive and routine, the HRD Department has to empower, engage and energies employees to create effectiveness & efficiency through motivation organizational structures, systems & procedures are facilitators of these, and there is a need to focus greater attention on these aspects by the industry.
- However, the emergence of a core and peripheral workforce in many organization has presented new challenges for HR managers public & private sector organizations are fast becoming diverse communities for core workers, flexibly employed casual and part-time workers, consultants, contractors & business partners.
- Certain rigidities have also developed in HRD within this banking system itself because this industry is largely in the public sector.
Following suggestions are very essential to adhere for effective Banking Administration:
- HR functions to be linked to corporate goals.
- Shift from Industrial relations manager to Business manager or Commercial manager.
- Team work is another important and essential soft skill that is necessary in this industry.
- The HR Professionals have to introduce &improve the adaptability of their structure that will be able to absorb, draw and retain the best.
- As people are primary asset, it is essential not only to invest in them, but also to ensure that the supporting elements for this asset are such that it can provide the maximum value on a sustainable basis.
- HRD is to be regularly reviewed against business outcomes as part of strategic and operational planning.
- To overcome the public sector’s hierarchical structure, which gives preference to seniority over performance, is not the best environment to attract the best talent from among the young.
- It is worthwhile to consider broad-basing the courses conducted in these institutions among other higher –level educational institutions, so that specializations in the area of banking and financial services becomes an option in higher education curricular.
- There is a need to adopt global best practices in financial sector regulation and supervision and adapt them to the domestic environment. This largely depends on the functioning and policies of public institutions, such as the RBI as it is increasingly subject to public discussion and debate.
- This calls for greater transparency more effective communication, and a high degree of professionalism in the bank’s staff, are the need of the hour.
- Continuous up gradations of human resources management strategies with a view to enhancing the level of knowledge, sharpening skills are and also to important the necessary and work culture must be installed.
- There is a pressing need to develop work practices which encourage efficiency in this banking sector.
- Incentive structures need to be conceived, supported by appropriate training and motivations, which aligns the employee’s goals and orientations with the core competencies and strategic advantages of the institution
- This service sector has to explore the feasibility of entering into collaborative arrangements with universities and other institutions in India and abroad to identify and provide specialized training in the financial services industry with an ongoing flow of emerging training packages.
- Information technology is an area where human resources development is critical fortunately, Indian professionals are world leaders in this area and spirit of co –operation and partnership between them in banking industries will result in a strong and modern financial system comparable to the best in the world.
- This committee recommended a system of recruitment from open market, including lateral induction of experts.
In a nutshell, it is felt that, the changing environment, the forces of globalization and liberalization and the advances in information and communication technology have major HR implications for the RBI as well. Financial products are becoming increasingly complex and diverse, while the markets in which they trade get progressively deregulated. It also possesses both opportunities & threats particularly for this public sector banks.