Importance of Human Resource Development in Banks
In the present scenario of globalization, and increasing interdependence among various sectors, Human Resource Development is expected to perform a very crucial role. HRD intrinsically recognizes that 'people' are the organization's singularly important and valuable resources and that they need to be developed in terms of their knowledge, skill and attitude for achieving their personal as well as organizational goals. HRD must concentrate on moving up the value chain and focus on value creation and value addition. This paper focuses on the importance of HRD in service sector with special reference to banking sector. Key words: Globalization, Human Resource Development, Strategies.
HUMAN RESOURCE DEVELOPMENT' (HRD) signifies an effort aimed at "qualitative improvement of human beings in their specific role as assets of an organization". Because only dynamic people can build dynamic organizations and only competent and motivated people enable an organization achieve its goals. Globalization dominates the competitive horizon and entails new markets, new products, new mindsets, new competencies and new ways of thinking about business. The rapid movement of products, people, information and ideas around the world focus on global economies of scale. It requires a global mindset and a local commitment: Thinking globally but acting locally. To accomplish this ambitious agenda, organizations will have to fundamentally redefine themselves as that of a global relay team. Organizations will have to build global capabilities such as the ability to seamlessly move talent, ideas and information around the world to create products and services at an optimum pace with quality above par. They will have to build an employee infrastructure for hiring, maintaining, training and developing that takes a global perspective which is made possible through the Human Resource Development (HRD) activities
HRD as a concept demands a specific and congenial climate to take root. It enriches the
work life in an organization and aims to link productivity with a sense of personal fulfillment. HRD involves all management decisions and practices that direct, affect or influence the Human Resources in the organization. In recent years, increased attention comes from the realization that an organization's employees enable an organization to achieve its goals and the management and development of these resources is critical to an organization's success (Schuler, 1992). HRD in many contexts proved itself as a key element in coping with many acute problems created by economic, social and technological trends.
The importance of HRD as a catalytic agent of growth has been increasingly recognized which makes necessary organizational effort to help the managers in adapting to the emerging changes of environment. It is moving up in the ladder of value chain from mere administrative function to a value contributory factor. HRD is a key to harnessing change through appropriate skills. It promotes learning culture.
THE IMPORTANCE OF HRD IN SERVICE SECTOR WITH SPECIAL REFERENCE TO BANKING SECTOR
The Service sector is undergoing a sea change in the post globalization era. Service sector refers to the 'intangible goods'. A service sector is rather the more prominent sector where the human capital, creativity and innovation provide
the basis for success. The main challenges that are experienced in this sector are: 1. Technological innovations 2. Intense competition 3. Increased capital mobility 4. Rising expectations of consumers and workers.
These forces are prompting organizations to realign their systems and processes. Thus, the HRD managers have a complex role to perform. They have to intensely keep on trying to generate the competitive advantage which is promising factor for the sustenance of the organization. There are three important dimensions for HRD professionals. 1. Evolving the need based HRD strategies 2. Ensuring the employee participation 3. Developing an enabling culture for a planned change.
These objectives call for holistic and integrated view of HRD with special reference to the organizational analysis, HRD strategy formulation and careful implementation.
Technological advancements and the knowledge economy has opened a whole set of opportunities. Change is vivid in service sector, and banking as a part of service sector is not exception. In the changing environment the organizations and the individuals must keep on learning. HRD is the field of study and practice responsible for the fostering of a long term work related learning capacity at the individual, group and organizational levels.
To maintain their status in the competitive environment banks have to concentrate in developing their human resources.
In any organization the quality and the amount of productivity mainly depends on the skill and interest of the employees. Banking sector also is dependent on the quality of HRD practices for the motivation of the employees.
HRD seeks to bring about overall development of employees by enabling them to improve their knowledge, skill and behavior. It helps them to develop better awareness about their roles in the work situation and contributes to the process of integration of employees with the organization. An effective implementation of HRD activities would result in excellent organizational climate for the people to be competent and productive.
HRD acquires special meaning in banking industry due to a variety of factors. Banking is a labor-intensive industry. So, the quality of banking services and the objectives in achieving the socio-economic goals are highly dependent on the employees who deliver the services. Also client development involves total involvement of the employees in the process of rendering services. Thus, the task of HRD will always be central and neglect of HRD function is likely to destroy the fabric of banking itself.
THE IMPORTANCE OF HRD IN INDIAN BANKING SECTOR
Human Resource Development in a growing economy like India is the need of the time and undoubtedly, banking sector is the most effective instrument for India's economic development, for which developing Human Resources for this sector has become essential to achieve the national objectives.
Banks constitute the very life blood of modern economy. A well developed banking system is a prerequisite for the economic development of, particularly, a developing economy like India. Banks not only provide the necessary funds for the growth of the various sectors but also influence the direction in which the funds are utilized. In a country like India banks are expected to perform a developmental role and the role of a nation builder.
Moreover, the banks are expected to play a rather constructive role in the post nationalization era. In the words of late prime Minister Indira Gandhi "while the nation is committed to establish a pattern of society, the Government felt that the public ownership and control of the commanding heights of national economy and of its strategic sectors were essential aspect of the new social order." The nationalization of the banks was felt to be a significant step in the achievement of the social objectives of the nation. Since then banks were attached with some social responsibilities viz. advances to priority sector, social banking etc. With the above explained existing scenario managing a commercial bank in India is unique and challenging as compared to any other economic activity. Banking activities are highly
regulated both by the social value systems and monetary considerations.
The need of the HRD in banking institutions has continuously grown because of the effective role they are called upon to play in the task of socio economic development and rehabilitation of especially those people who were hitherto neglected and deprived. The high expectations of the society on the banking system cannot be met without the development of integrity, efficiency and behavioral pattern of those who are working in banks.
There is another dimension for the same story. In the wake of deregulation, liberalization, and globalization of Indian Economy the banking system is getting gradually internationalized. In the environment of globalization the Indian Commercial Banks have to equip themselves to meet the challenges of competition within the country and outside. Besides, the clientele of the banks is not only increasing but also getting diversified.
Here lies the whole importance of HRD. The image of the bank depends on the performance level of the employees. It is only through the implementation of well designed HRD programs that the performance level of employees is enhanced. The HRD must aim at developing the capabilities to meet the needs of both internal and external environment, attaining self confidence and motivation for public service. It must also aim at giving more thrust on the human resources to encourage creativity for the better customer service.
HRD efforts in banks therefore focus on building a strong character of honesty, integrity and truthfulness. HRD efforts crystallize the values that are goal supportive and contribution oriented. It emphasizes the functional style, ethos, culture and work ethics which are built around people, manifesting a concern and is sensitive to the needs of the organization. An efficient and effective commercial banking activity is the result of effectively motivated employees. Only when the employees are trained, motivated and committed the objectives of the banks are achieved fully. The HRD policy in the banks has to act as an effective instrument to encourage the employees to show creativity to reach excellence and finally to render better customer service. In the light of this awareness banks are revamping their procedures and methods of work for economic and technical reasons. The need for HRD is also realized in view of changed job design to suit automation and changing characteristics of new groups of recruits. The staff needs to learn new skills and knowledge to cope with the changing technology. The objectives of HRD in banks should aim at 1. Creating a climate of openness and trust. 2. Building a collaboration culture whereby everybody is an important member of an organization. 3. Preparing individuals for technical
competence. 4. Psychological preparedness for willingness
to participate in changed implementation. 5. Promoting human capabilities and
competencies in the organization. 6. Facilitating to build a strong character of
honesty and integrity of performance. 7. Improving the quality of work life. Based on various studies conducted on the HRD in banks the following conclusions can be drawn The HRD practiced in the banks has a strong influence on their employees’ performance. Private Banks have placed less emphasis on HRD practices in their organizations, which may be due to lack of adequate orientation and resource allocation towards developing their human factor. Top Performing Banks have a higher extent of HRD practice in their organizations, which influences the effectiveness of their organizations.
Thus it could be concluded that high extent of HRD practices and better performance go hand in hand. HRD and performance level of the employees are twin sisters. They grow simultaneously. This should be realized by the banks with low performance. New generation banks are imparting the best kind of training to the employees. It should also be adopted by the traditional nationalized as well as private banks. The Low Performing banks have to lay emphasis on designing key performance areas which can increase role clarity and enhance their performance.
People oriented perspective should be developed in order to build up good competitive advantage. The top management must instill team spirit and collaborative working in their organizations. Proper recruitment strategy must be designed in order to recruit more number of people with technical skills. The technical expertise is the need of the hour. At the same time the mindset of the employees also should change accordingly The Top Private Banks vouchsafe this. Proactive measures must be adopted by providing a continuous environment of openness and exploration into new markets rather than adopting a problem solving approach.
RECENT TRENDS IN THE HRD POLICIES OF THE PUBLIC SECTOR BANKS
“While the risk management systems can be put in place, technology can be harnessed to deliver more value to the customer, success in a deregulated environment can come about only if the human resources in the banks are fully prepared to meet the challenges. Thus the ability of the banks to execute the chosen strategy and achieve the desired goals depends on whether they can organize, develop and manage human resources.”
The above statement is given by one of the leading public sector banks in its policy drafts. It clearly brings out the importance the Public Sector Banks attach to the HRD.
The Public Sector Banks seem to realize the adverse age profile of the employees. The recruitment, thus assumes greater importance. There is a thorough need to be more aggressive and proactive to capture a greater share in the market. Banks now take up the strategy of recruiting more of specialist officers in the areas of credit, FOREX, marketing etc. These are believed to have an edge over general officers.
Banks also realize the threat posed by high rate of attrition of experienced, skilled and quality staff. It is also pointed out that the fresh recruits coming from diverse geographic areas, of different languages are finding it difficult to get inducted in the new organizational climate.
As the talent retention is highly important, it is supposed to be achieved by effective and proper talent management by Placement of right person at right place Integrating these new entrants into our organizational climate and culture Through effective talent recognition mechanism Strengthening the existing cell which closely monitors the needs of the new recruitees, through regular feed backs and acts as a mentor, counsellor and grievance redressal.
Banks also find the importance of competency mapping done professionally, and most of the times by external agents, so that individuals with the right competencies are identified to place them in jobs most appropriate for their capabilities.
Banks recognize the importance of placement, as a motivational tool to reward performer. Placement of right man with the right skill at the right place is given top most priority.
THE STRATEGIES THAT CAN FURTHER BE ADOPTED
To improve effectiveness of the Bank training is the main tool. By training employees are enabled to realize their growth potential and make significant contribution towards achievement of Bank's objectives. The strategies should be designed in such a way that the individual's goals are integrated with the organizational growth. Identification of training needs for multi tasking and specialist areas, intensive training for talent enhancement are needed E- learning has to be implemented for continuous learning through web. Conference method can also be adopted, where the employees acquire knowledge located at various places. Focus must be thrown on performance appraisal system also. It must be transparent. It would be helpful in separating performers and non performers.
Therefore, HRD has a crucial role to play, in a service industry like Banks. Banks must adopt the suitable HRD strategies in order to sustain, and grow in the present day's competitive environment.