Recent Trends in Banking with Special Reference to HR Issues in Banking

E. Jeevitha | April 25,2014 10:55 am IST

HRM has been much talked about and written about in recent years. For some, it heralds a new age where human resource issues at last become significant in the consideration of business strategy, and HR practitioners at last attain a place in the sun.

However, much of the debate has been conducted in purely theoretical terms covering HRM definitions and meanings. But, what is happening on the ground? Are HRM ideas changing policies? Are policies translated into practice? This case study seeks to critically examine the development of HR strategy in a bank. The experience suggests that whilst HR type policies are being implemented, the outcomes can by no means be taken for granted.

The author is focusing on the following areas and describing the paper in the following flow: -

Changing HR Paradigms in Banks
Plan for Emerging Models
Management Strategy & Employee Relations
Employee Relations in Banking
Towards HRM: New Policies

This paper sets out to explore the development of Human Resource Management (HRM) in the Co-operative Bank. It briefly discusses the literature on management strategy and employee relations, and the rise of Human Resource Management. An overview of employee relations in banking is given to set the scene for the developments in the Co-operative Bank. The case of the Co-operative Bank shows how the combination of product market change, and increasing recognition of the inadequacy of the old style approach to the management of labour, led to the embracing of a more pro-active role to managing human resources. But HRM is not a once and for all matter of selecting an 'appropriate fit' from a 'menu' of HR strategies. It is more a continual process of shifting priorities and policies as the organization adjusts to the stormy waves of the market environment. Like a ship setting a course, but adapting to the weather, organizations have to continually adjust to changing conditions.

This research draws on a three year ESRC funded project. The researcher adopted a top-down, qualitative approach to the research, which allowed for the "capture" of strategic change, as this way was deemed the most appropriate method for examining the relationship between business strategy and the management of labour.

Following the concept of methodological triangulation, interviews, documentary analysis and participants' observations were combined to provide a fuller and more accurate picture than that provided by a single research method. The sponsorship of the research by the organization enabled a high access to be achieved. 'While a case study is not capable of statistical generalisation, the prospective generalisation of a case study lies in analytical generalisation.' As Yin puts it: -

"Case studies, like experiments, are generalisible to theoretical propositions and not to populations or universes. In this sense, the case study, like the experiment, does not represent a 'sample' and the investigator's goal is to expand and generalise those theories (analytic generalisation) and not to enumerate frequencies (statistical generalisation)." (1984, p.21)

Longitudinal data over this period provides insight into the process of change.

HR in Banking
I know very well that the bankers are increasingly aware of the importance of technology for their operations, and if I may add, survival. Banks are adopting and adapting to technological tools to further their businesses. This new technology is transforming the skill structure in banking. What, then, exactly is the impact of technology on the human resources employed in banking? How should an HR Manager in a bank respond to this fast-changing scenario? For the first question, we do have some answers, thanks to a study by OECD on the impact of technology on human resources in banking and insurance companies in France, Japan, Germany, Sweden and the United States of America. In the study, the authors compared the old competencies with the emerging new competencies and the findings were as follows: -

These new and enhanced skills would require new knowledge and behavioral adjustments in respect of existing human resources. How should an HR Manager in a bank respond to this fast-changing scenario? In this context, the training system will emerge as an important tool of intervention. The training system in the banking industry has a strong structural base. However, in the past, the training activities have been more ritualistic due to absence of a strategic link between training and human resources development. Today, it is important that the training function is made an effective organizational intervention by establishing a clear policy of training and development within the framework of total human resource development. The training establishments need to be actively involved in the total training process starting from the identification of training needs, evaluation of training effectiveness, and the benefits of training to the end-users, viz., the internal and external customers.

HR Outsourcing
We understand the complete need of the customer, wherever so required, and provide skilled manpower to undertake specific HR activities as required by the customer on the basis of SLA's laid down in the contract, thus, offering a need-based solution. This piece includes and takes care of the following needs of customers: -

Recruitment & Hiring
Manpower Recruitment Planning
Sourcing Strategy
Timeline & Scale
Resource Requirements

Induction, Process Training & Deployment
Post-Hire Induction (Organization, Process & Culture)
Process & Skill-based Training, Performance Effectiveness Interventions
Staffing, Deployment & Team Building

Performance Management
Goal-setting & Performance Appraisal System
Employee Performance Monitoring & Feedback Management
Incentives & Benefits Planning & Administration
Feedback Integration (Training & Operational Interventions)
Severance, Attrition & Exit Administration


E. Jeevitha,Faculty,Department of Management Studies & Research,Tamilnadu College of Engineering, Coimbatore....