Banking Article, Banking Finance 2021, Banking Finance March 2021

HR- The Life line of Indian Banking Sector

Introduction

The Human Resource has always served as a backbone of the Indian Banking system. The various aspects of Human Resource management flow as a blood to keep up the proper functioning of the Indian Banking sector alive. Banking sector plays a key in the development of Indian economy.

The Indian banking sector deals in providing services to its customers and employees at different hierarchy in order to facilitate them with the maximum level of satisfaction which is directly based on the human resources where firstly the needs of the customers and employees are identified and provided with services required.

The Indian Banking industry has witnessed rapid changes during past two decades in relation to Human resource. So, we can state that the role of Human Resource management has penetrated its roots deep into the ever changing environment of the banking system, giving it a drastic change to cope up with its ultimate goal of being the best in the market and providing employees satisfaction.

Banking sector is one of the vital financial pillars of Indian economy, so in order to keep the pillar upright a sound foundation of human resource management is needed. In India, banks play a strategic role in attracting deposits from the people and in deploying these funds for lubricating various sectors of the economy. Over the years there has been tremendous growth in the various parameters which could be only possible with the sound functioning of the Human Resource department of the banking sector.

Human factor plays an important and essential role in the development of any country. Human factor in banking organisations gained significance due to the fact that most of the problems in the organisations are human and social in nature than physical, technical or economic.

It is people who can make a difference and who can have an everlasting impact on the survival and functioning of the organisations. The banking industry in India is all the more human intensive. No bank can run successfully unless the human factors are managed well. During the last two decades, Indian banking has undergone a metamorphic change. It is becoming important on the part of banks to have a hard look in several aspects of management of human resources.

It is the human resource which provides a competitive edge to banking. The changing profile of bank employees should be a vital reason for changing in HRM. There is very need for a reorientation in HRM policies and practices so as to ensure that HRM is in line with the changing scenario of banking industry.

Therefore, effective human resource management practices help the banks to march ahead and achieve the desired results.

 

The various functions of HR – Leading to the ladder of success

Planning – First step of Human Resource in the Banking sector starts with the planning

process. It aims in projecting future man power requirements through the Human Resource planning a management strives to have the right number and the right kind of people at the right places at the right time. It also aims in doing the economic forecast, the banking products sale expansion forecast and the employees market forecast.

Job Analysis – The next step of human resource in the banking sector is Job analysis. The main purpose of conducting a job analysis is to prepare a description and job specification which helps to hire the right person with the right skills, at the right place. It is basically a list of duties and responsibilities made in order to make oneself more competent enough to face the challenges with other banks.

The government controlled bank’s focus was on maintaining internal books of records and providing branch based banking with less emphasis on marketing and cross selling. This myth was changed with the introduction of private banks which made use of their selling techniques of their products and with their aggressive marketing strategies including selling financial products to customers directly and working longer hours.

So, the role of human resource department becomes very vital in giving a vivid shape of its organisation by identifying the right skills of its employees nurturing them in the manner they could deliver their best, for this a list of job duties, responsibilities, reporting relationship, working conditions and supervisory responsible are made.

Job Evaluation – The next step of human resource in the banking sector is the implementation of job evaluation. The scope of application of a job evaluation programme is not only confined to the lower level of the hierarchy but is to be applied to all sections.

The jobs of clerical employees, supervisory personnel and even more of executives can be evaluated by using appropriate systems and plans. Job evaluation is a process of determining the relative worth of a job. This process is advantageous to the banking sector for the purpose of reduction in inequalities in salary structure, introduction of standardization, helps in selection of new employees and developing a harmonious relationship between employees and manager. This helps a fair wage policy in the entire system.

Commercial bank plays a catalyst role in the conversion of static credit into dynamic credit. As such the health of the economy is influenced by the performance of banking sector. To fulfil these the next step of human resource in the banking sector is recruitment and selection. The progress of any organisation depends

upon the quality of people who works in it. Only a committed and qualified workforce will be able to achieve the goals and targets set by the organisation therefore it is very important to place the right people in the right job, this is solely the work of the proper functioning of the human resource department of the banking sector to adopt the best techniques available in order to embed the available post with the best suitable and deserving candidates.

Promotion and Transfer– Coming further in the process, to establish a sound foundation to the banking sector the next step of human resource department is channelizing a proper system of the promotion and transfers. Promotion is advancement of an employee to a better job in terms of higher responsibility, more prestige, greater skill and increased rate of pay. Promotions are the major attractions in the banking career.

The spectacular growth of banking industry in recent past has brought about space of promotional chances to the employees in all scales. Promotion provides an incentive to the employees so that they may continue to contribute their best to the organisation. This also helps in developing a competitive spirit and inculcate the goal to acquire higher skill, knowledge required by higher level of gobs. This also helps to promote a feeling of satisfaction and a sense of belongingness towards the organisation. It is also needed to boost morale of the employees.

The promotion policies adopted by the management should be consistent and should be applied uniformly to all employees. It should be fair and impartial. Systematic line of promotion channel should be incorporated.

Another important aspects along with the promotion is transfer. Transfer is defined a lateral shift causing movement of individuals from one position to another ordinarily without involving any marked change in duties, responsibilities, skills needed or compensation. Transfer is viewed as change in assignment in which the employee moves from one job to another in the same or different level of hierarchy requiring similar skills, involving identical level of responsibilities.

The movement of an employee from one place to the other at the same level in hierarchy is needed to meet the organisational requirements like change in technology and the organisational structure, to satisfy the employee’s needs and to make use of their skills.

Employees may prefer to ask for transfer in order to satisfy their desire to work under a friendly supervisor, in a department where opportunities for advancement are bright and more challenging. The transfers are also done to improve the employee’s background by placing him in different jobs in various units, this develops the employees and enables him to accept any job.

The transfer are also done to give relief to the employees who are overburdened or doing complicated work for a long period.The human resource department of a banking sector should make sure that the policy of transfer should be transparent to avoid frustration among employees. Reason should be considered for personal transfers and should have order of priority, well stipulated. There should be provisions for mutual transfers of employees. The human resource department should also convince the employees to overcome with the problems raised due to transfers like adjustment to the new job, place, environment, superiors and colleagues.

Training and Development – The next step in the ladder where the human resource plays the most effective and vital role in the training and development which is an important component of every organisation’s survival strategy.

Technology is changing very fast and so is the information explosion terrific. Under such circumstances individuals as well as organisations can survive and progress only if they update their knowledge, sharpen their skills and keep themselves a breast of the latest development and changes.

Training and development is important to face the tough competition in every field and survive gracefully. It is needed for an improved job performance and consequently better job satisfaction. It helps the employees to learn the correct way of doing things, it also helps to upgrade and sharpen one’s skills that are needed to do the job successfully.

To fulfil all these and channelize a proper system of training a lot of responsibilities rests on the human resource development because the importance of training in banks is growing over the years as it helps the employees to improve their skills, competence and effectiveness at their work and would update their current knowledge, therefore training function has become a part and parcel of bank management.

During pre-nationalisation period, training in banks did not receive due importance in banks. But after nationalisation, training in the banking sector acquired a new thrust and many banks have started their own training colleges for officers and clerks. Human resource development department is one of the wings which helps the bankers to get success.

Performance Appraisal – Moving ahead it is very important to evaluate the performance of employees periodically to find out their level of efficiency. So, it is a vital function of the human resource department to develop some standard methods to make the employees understand how far they from the expected standards so that their performance can be improved.

From the organisational point of view, performance

appraisal is very important to improve the quality of work force. Those employees who lag behind in certain key performance areas must be assisted to analyse and improve their performance levels.

Therefore the processes of performance appraisal helps to evaluate and improve the performance of the employees so that they can give their best to achieve the goals of the banking sector as well as achieve better career satisfaction.

Retirement Planning – When we reach to the top of the ladder a very important role of the human resource is acknowledged in the recent era that is facilitation in the retirement planning of the employees. It is well said that the human resource department has a very deep accessibility to the employees strength and weakness so, at the time retirement it becomes a duty of the human resource department to motivate the employees in planning his/her retirement so that they may continue to impart the knowledge and skills acquires during the whole service tenure to some other organisation being a financial advisor or holding any post.

 

Conclusion

From the analysis presented on the various function of the human resource department in the banking sector it may be maintained and concluded that the ability of the banking system to perform effectively and in harmony with the country’s socio-economic goals depends to a large extent on the effective human resources management.

It is therefore important to motivate the work force to contribute their best which in turn contributes for the country’s economic development. Therefore, it is essential for the banking sector to keep pace with the changes in the financial policies because only banking sector can help the nation to march ahead.

The banking industry is a highly regulated powerhouse that stabilizes the economic environment of nations around world. So, human resource department being the backbone of the banking system is supposed to be the most efficient department of the entire system because as we know that the strength of the building is judged with its strong foundation, so subsequently the human resource department of the banking sector should be the strongest because right from the recruitment till retirement it is the human resource of the organisation who is channelizing the manpower to achieve the set target and ultimately the organisational goal.

The human resource department also has the responsibilities in maintaining a higher level of integrity and trustworthiness within the employees so that everything is running smoothly and with harmony.

 

 

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