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hrm in banking and insurance

hrm in banking and insurance

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Harry Jones
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hrm in banking and insurance - February 6th, 2007

hi guys i have project on hrm in banking and insurance can anyone help me with dat
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Re: hrm in banking and insurance - March 19th, 2007

even i m searchng for same plz anyone has any linkmatleast mail us it will be beneficial
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Re: hrm in banking and insurance - March 19th, 2007

Hey ,
I am a new user of this site...someone told me tht i need to post something to someone and that is wat i am doin ...i am sorry if i m disturbing.... bare with me ... and if u can help me on how to operate this site in and efficient way ...

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Re: hrm in banking and insurance - April 2nd, 2007

hey,

Even i m looking for tis topic. Pls sum1 help me out.

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Swati Srivastava
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Re: hrm in banking and insurance - April 15th, 2007

i think this will help u all

EXECUTIVE SUMMARY

Fast global and technological developments have made today's business environment highly uncertain and even chaotic. Organizations are seeking newer ways to promote their adaptability to the complexities of the changed scenario so as to survive and prosper. Globally, organizations are striving to realize competitive success through strategic management of human resources. Thus, people management has never been more important than it is today. Therefore new themes have emerged in the process, replacing some of the old ones. The new thinking in this regard is referred to as Human Resource Management (HRM), which carries a more proactive and strategic connotation. HRM is intimately intertwined with business strategy. In many situations, it even critically influences business strategy.

The development of employee commitment through employee involvement and empowerment is one of the key objectives of any HRM discourse. The complex business objectives in today's business environment are difficult to realize without developing highly committed and motivated employees who would strive to contribute to organizational goals. That is why, human resource issues are no more the exclusive preserve of personnel specialists; rather line and general managers are being increasingly involved in handling key HR issues and in evolving, shaping and managing human resource strategies and policies. These developments have given a far greater recognition to the HR function in organizational decision-making processes.

Introduction


“Human resource management is planning, organizing, directing and controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives accomplished.”

Thus, human resource management refers to a set of programmes, functions and activities designed and carried out to maximize both, employee as well as organizational effectiveness.
It is concerned with the people dimensions in the management. Since every organization is made up of people, acquiring their services developing their skills motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of organization -government, business, education, health, recreation or social actions.

Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank or organization largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.

Thus, HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employees as well as organisational effectiveness.

Meaning of "Human Resource" in banks
Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.
Need for HRD and Its Management in banks
Ø There is a qualitative change in the banking paradigm on account of changes in the industry due to the entry of new private sector Banks. Therefore, it has become a necessity to recruit, train and deploy people at all level efficiently, for better performance and success. This is the basic function of HRD, which includes the concept of HRM.
Ø An view of the changes in the political scene in the recent past, seeping changes are expected to take place in the banking industry. It is expected that only a few banks will remain after a series of amalgamations and mergers, not only in the Indian banking industry, but also at the international level.
Ø Emergence of new private sector banks, disintermediation and competition and self-regulation in monitoring banking has necessitated efficient Human Resources Management in banks.

HRM is a continuous process, involving selection, recruitment and training on an "on going basis" for the staff and their deployment in the right place. The activity is called HR development.






















Building up efficiency in Banks with the help of HRM

Ø The crucial factors behind successful banking will be continuous and sustained build up of skills, knowledge, education and attitudes among people working in the banks, particularly the frontline staff, working in the branches.
Ø It is possible through professionalization, which is an internal part of HRM. Bank staff should be motivated and encouraged to practice proffessionalism for their personal growth and thus contribute to the organization's growth.
Ø Building efficiency in banking is, therefore largely dependent on the best selection process adopted by the HR department. There is imperative need to build up skills within an organization for the successful managing of available HR.
Ø Banks have vast human resource specialized in multiple disciplines like technology, law, operations, foreign exchange, administration etc. the basic function of HR is to manage them efficiently for continuous success.












For building up better efficiency in banks HRM in banks have to follow the bellow two functions:-
1) Emphasis on job description and job Assignment.
2) Response to challenges in future.

1. EMPHASIS ON JOB DESCRIPTION AND JOB ASSIGNMENT

One of the important functions of HR department is to ensure proper definition for workers in the bank. The staff should know about the vacant positions and the skills required for those particular jobs. Accordingly, people should be recruited to that particular job. The allotment of a job to a right person, who has the required skills is called job assignment. If this function is not properly performed by the HR department, people in all departments will be in a chaotic situation. This will impair their performance and subsequently customer service.

Improvement in performance and skills of existing employees can be achieved through recruiting the right person for the right place. Thus, job description and job assignment are parallel concept requiring attention.







2. RESPONSE TO THE CHALLENGES IN FUTURE.

Bankers should chalk out a wide range of strategic responses to the future challenges. They have to look into the structure, procedures and processes of the systems and make policies accordingly, to ensure necessary changes. It is the foremost function of HRM. Banks have to convince their employees that that a challenge is an opportunity to prove oneself. Bankers in India have to utilize this opportunity before the competition overtakes them and people in banks have to respond immediately to the challenges.

This requires the HR department to work efficiently. Banks are in the service industry, where the raw material is HR. HRM, therefore, emerges as a very basic and important element for strategic response to the changes that are taking place in the banking sector. HR departments should take it seriously to formulate policies to meet these challenges.

HRD is a critical management function. Each manager should have initiative, awareness, co-ordination and facilitation to perform his role. This is critical function of HRM.






The Changing Banking Environment and Role of HRM

Owing to the changing banking environment HR department should call for appropriate response in equipping people who have to perform in the new environment. People should be prepared to 'accept changes. The upgraded technology in banks might create fear among the staff regarding their adaptability to the new environment. It is the responsibility of the HR department to properly counsel people and prepare them to face the challenges before them. Their mind should be fine - tuned to work in the new technological environment.

The main function of HRM is to build up capabilities in people working in banks and intensify their sense of belonging to the organization. To improve their performance and increase the bank's productivity HR must incorporate challenges in routine work. Team spirit has to be inculcated in the branches and greater focus should be on customer care. This would be possible only through the unprecedented efforts to be put forth by the HR department.






Rewards, Remuneration, Incentives and Punishments

HR department should make efforts to provide appropriate incentives, rewards and increase remuneration to employees. Otherwise, dissatisfaction may creep into all levels of the bank, resulting in" inefficiency, perfunctory attitude, and poor service standards. These will ultimately affect the functioning of the organization. Therefore, the HR department has to formulate policies with utmost care taking into account all these facets of personnel banking. Radical changes are required in the performance appraisal system to avoid nepotism. HR policies with regard to manpower and career planning, and placement policies have to he revamped. A level of professionalism with the help of technology and scientific management has to be brought in by the HR departments of banks. Clear policies regarding performance rewards, incentives and increase in remuneration have to be outlined and implemented.
With regard to the accountability for non-performance and for the mistakes, the HR department's intervention is a must for establishing the facts of each case. Proper judgment "with impartial attitude helps develop satisfaction among the staff members.
Before punishing for mistakes and non-performance, a certain kind of enquiry is required by the HR department. In the present scenario, particularly in the new private sector banks, dismissals are taking place arbitrarily without proper enquiry for accountability. This will impart the efficiency of the existing staff and lower dynamism in their performance, ultimately leading to reduced productivity due to fear and insecurity of losing the job. It is the first and foremost duty of the HR department to formulate appropriate policies with regards to punishments. A set of guidelines and procedures has to be formulated and followed for punishments to staff in case of any indiscipline.
There are certain inevitable situations in working where the staff needs to experiment in order to take decisions. In the process mistakes are bound to occur. Committing mistake is a way of learning. These are not to be treated as sin by the management. Otherwise, the decision making process will be vitiated. In such situations, the HR department plays a crucial role in
adopting proper strategies and in responding correctly to the warranted situation.
HRM will play a significant role in handling situations while awarding punishments to employees without impairing others' efficiency.




















Employee Turnover and Implementation of "Exit Policy"

Ø I n the present scenario, the employee turnover has increased in the banking industry, specifically in the new private sector banks.
Ø The main reason behind the trend is the recruitment of young people without experience.
Ø They will be moving to other jobs after gaining experience, for higher salaries.
Ø This usually has a bad effect on the work atmosphere of the organization.
Ø The new private sector banks have become a training ground for the new and fresh recruits.
Ø It is the responsibility of the HR department to arrest this trend of employee turnover.
Ø The HR department should formulate suitable policies to retain the staff by providing 'incentives, rewards, and better increments every year. These policies will ensure organizational efficiency.
Ø The employee turnover may increase on account of
o Lacunae in the appraisal systems,
o Non-recognition of talent,
o Discouragement for the staff,
o Lack of motivation,
o Lack of promotions to higher cadre in the organization etc.
Ø HR and personnel departments of banks should realize the importance of all these aspects and help the organization in formulating correct policies. In this process, the HR departments of all banks should realize the importance of recruiting experienced people in higher positions to ensure utmost efficiency. It will increase the productivity and profitability of the organization.
Performance Appraisal Systems

Ø It is one of the important functions of the HR department is to formulate proper policies with regard to performance appraisal in banks to avoid discrimination in ranking the personnel for further promotions.
Ø To manage people, it is very important to fudge the abilities correctly to recognize them.
Ø Self-appraisal system is prevalent for officer cadre personnel in public sector banks.
Ø In die new private sector banks, if is available to the entire staff including award staff but it is compulsory, tiring system by which a section of the employees will he ranked under the lowest category that is, it requires improvement on a specific percentage basis.
Ø This is a discouraging exercise and at times even a performer will be ranked the lowest.
Ø This will have an adverse impact on die organization.
Ø HRM should give a serious thought to this aspect.










Human Resource Risk
The banking HR risk is another important aspect to be managed by the HR and Planning department.
In certain situations the departure of an employee with specialized skills and knowledge due to resignation, retirement or removal may bring certain systems to a halt and may even create chaos. This is called HR risk.
In this process, the-bank may have to pay multiple individuals with similar knowledge and experience to ensure protection against this risk.
Similarly, the bank may have to face the risk of loss of key personnel, which is called the risk of inadequate motivation among staff who manage the situation. If the management offers inadequate incentives or doesn't, give any incentive at all, or wrong incentives, it may lead to disastrous financial results, provided the incentives are linked to individual performance. In such a case, the personnel will not co-operate in combating the risky situation. In case a group incentive is given, individual motivation will be affected. Therefore in such "HR risk" Situations incentives should be linked to short-term results and not to long-terms ones.
It is the responsibility of the HR department to formulate proper policies to prevent such situations, where "HR risk" may crap up due to the exit of skilled personnel from banks.
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Re: hrm in banking and insurance
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Swati Srivastava
Puswaka is on a distinguished road
 
Puswaka
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Institute: Rithumbara
Status: Offline
Posts: 16
Join Date: Feb 2007
Re: hrm in banking and insurance - April 15th, 2007

i think this will help u all

EXECUTIVE SUMMARY

Fast global and technological developments have made today's business environment highly uncertain and even chaotic. Organizations are seeking newer ways to promote their adaptability to the complexities of the changed scenario so as to survive and prosper. Globally, organizations are striving to realize competitive success through strategic management of human resources. Thus, people management has never been more important than it is today. Therefore new themes have emerged in the process, replacing some of the old ones. The new thinking in this regard is referred to as Human Resource Management (HRM), which carries a more proactive and strategic connotation. HRM is intimately intertwined with business strategy. In many situations, it even critically influences business strategy.

The development of employee commitment through employee involvement and empowerment is one of the key objectives of any HRM discourse. The complex business objectives in today's business environment are difficult to realize without developing highly committed and motivated employees who would strive to contribute to organizational goals. That is why, human resource issues are no more the exclusive preserve of personnel specialists; rather line and general managers are being increasingly involved in handling key HR issues and in evolving, shaping and managing human resource strategies and policies. These developments have given a far greater recognition to the HR function in organizational decision-making processes.

Introduction


“Human resource management is planning, organizing, directing and controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives accomplished.”

Thus, human resource management refers to a set of programmes, functions and activities designed and carried out to maximize both, employee as well as organizational effectiveness.
It is concerned with the people dimensions in the management. Since every organization is made up of people, acquiring their services developing their skills motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of organization -government, business, education, health, recreation or social actions.

Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank or organization largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.

Thus, HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employees as well as organisational effectiveness.

Meaning of "Human Resource" in banks
Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.
Need for HRD and Its Management in banks
Ø There is a qualitative change in the banking paradigm on account of changes in the industry due to the entry of new private sector Banks. Therefore, it has become a necessity to recruit, train and deploy people at all level efficiently, for better performance and success. This is the basic function of HRD, which includes the concept of HRM.
Ø An view of the changes in the political scene in the recent past, seeping changes are expected to take place in the banking industry. It is expected that only a few banks will remain after a series of amalgamations and mergers, not only in the Indian banking industry, but also at the international level.
Ø Emergence of new private sector banks, disintermediation and competition and self-regulation in monitoring banking has necessitated efficient Human Resources Management in banks.

HRM is a continuous process, involving selection, recruitment and training on an "on going basis" for the staff and their deployment in the right place. The activity is called HR development.






















Building up efficiency in Banks with the help of HRM

Ø The crucial factors behind successful banking will be continuous and sustained build up of skills, knowledge, education and attitudes among people working in the banks, particularly the frontline staff, working in the branches.
Ø It is possible through professionalization, which is an internal part of HRM. Bank staff should be motivated and encouraged to practice proffessionalism for their personal growth and thus contribute to the organization's growth.
Ø Building efficiency in banking is, therefore largely dependent on the best selection process adopted by the HR department. There is imperative need to build up skills within an organization for the successful managing of available HR.
Ø Banks have vast human resource specialized in multiple disciplines like technology, law, operations, foreign exchange, administration etc. the basic function of HR is to manage them efficiently for continuous success.












For building up better efficiency in banks HRM in banks have to follow the bellow two functions:-
1) Emphasis on job description and job Assignment.
2) Response to challenges in future.

1. EMPHASIS ON JOB DESCRIPTION AND JOB ASSIGNMENT

One of the important functions of HR department is to ensure proper definition for workers in the bank. The staff should know about the vacant positions and the skills required for those particular jobs. Accordingly, people should be recruited to that particular job. The allotment of a job to a right person, who has the required skills is called job assignment. If this function is not properly performed by the HR department, people in all departments will be in a chaotic situation. This will impair their performance and subsequently customer service.

Improvement in performance and skills of existing employees can be achieved through recruiting the right person for the right place. Thus, job description and job assignment are parallel concept requiring attention.







2. RESPONSE TO THE CHALLENGES IN FUTURE.

Bankers should chalk out a wide range of strategic responses to the future challenges. They have to look into the structure, procedures and processes of the systems and make policies accordingly, to ensure necessary changes. It is the foremost function of HRM. Banks have to convince their employees that that a challenge is an opportunity to prove oneself. Bankers in India have to utilize this opportunity before the competition overtakes them and people in banks have to respond immediately to the challenges.

This requires the HR department to work efficiently. Banks are in the service industry, where the raw material is HR. HRM, therefore, emerges as a very basic and important element for strategic response to the changes that are taking place in the banking sector. HR departments should take it seriously to formulate policies to meet these challenges.

HRD is a critical management function. Each manager should have initiative, awareness, co-ordination and facilitation to perform his role. This is critical function of HRM.






The Changing Banking Environment and Role of HRM

Owing to the changing banking environment HR department should call for appropriate response in equipping people who have to perform in the new environment. People should be prepared to 'accept changes. The upgraded technology in banks might create fear among the staff regarding their adaptability to the new environment. It is the responsibility of the HR department to properly counsel people and prepare them to face the challenges before them. Their mind should be fine - tuned to work in the new technological environment.

The main function of HRM is to build up capabilities in people working in banks and intensify their sense of belonging to the organization. To improve their performance and increase the bank's productivity HR must incorporate challenges in routine work. Team spirit has to be inculcated in the branches and greater focus should be on customer care. This would be possible only through the unprecedented efforts to be put forth by the HR department.






Rewards, Remuneration, Incentives and Punishments

HR department should make efforts to provide appropriate incentives, rewards and increase remuneration to employees. Otherwise, dissatisfaction may creep into all levels of the bank, resulting in" inefficiency, perfunctory attitude, and poor service standards. These will ultimately affect the functioning of the organization. Therefore, the HR department has to formulate policies with utmost care taking into account all these facets of personnel banking. Radical changes are required in the performance appraisal system to avoid nepotism. HR policies with regard to manpower and career planning, and placement policies have to he revamped. A level of professionalism with the help of technology and scientific management has to be brought in by the HR departments of banks. Clear policies regarding performance rewards, incentives and increase in remuneration have to be outlined and implemented.
With regard to the accountability for non-performance and for the mistakes, the HR department's intervention is a must for establishing the facts of each case. Proper judgment "with impartial attitude helps develop satisfaction among the staff members.
Before punishing for mistakes and non-performance, a certain kind of enquiry is required by the HR department. In the present scenario, particularly in the new private sector banks, dismissals are taking place arbitrarily without proper enquiry for accountability. This will impart the efficiency of the existing staff and lower dynamism in their performance, ultimately leading to reduced productivity due to fear and insecurity of losing the job. It is the first and foremost duty of the HR department to formulate appropriate policies with regards to punishments. A set of guidelines and procedures has to be formulated and followed for punishments to staff in case of any indiscipline.
There are certain inevitable situations in working where the staff needs to experiment in order to take decisions. In the process mistakes are bound to occur. Committing mistake is a way of learning. These are not to be treated as sin by the management. Otherwise, the decision making process will be vitiated. In such situations, the HR department plays a crucial role in
adopting proper strategies and in responding correctly to the warranted situation.
HRM will play a significant role in handling situations while awarding punishments to employees without impairing others' efficiency.




















Employee Turnover and Implementation of "Exit Policy"

Ø I n the present scenario, the employee turnover has increased in the banking industry, specifically in the new private sector banks.
Ø The main reason behind the trend is the recruitment of young people without experience.
Ø They will be moving to other jobs after gaining experience, for higher salaries.
Ø This usually has a bad effect on the work atmosphere of the organization.
Ø The new private sector banks have become a training ground for the new and fresh recruits.
Ø It is the responsibility of the HR department to arrest this trend of employee turnover.
Ø The HR department should formulate suitable policies to retain the staff by providing 'incentives, rewards, and better increments every year. These policies will ensure organizational efficiency.
Ø The employee turnover may increase on account of
o Lacunae in the appraisal systems,
o Non-recognition of talent,
o Discouragement for the staff,
o Lack of motivation,
o Lack of promotions to higher cadre in the organization etc.
Ø HR and personnel departments of banks should realize the importance of all these aspects and help the organization in formulating correct policies. In this process, the HR departments of all banks should realize the importance of recruiting experienced people in higher positions to ensure utmost efficiency. It will increase the productivity and profitability of the organization.
Performance Appraisal Systems

Ø It is one of the important functions of the HR department is to formulate proper policies with regard to performance appraisal in banks to avoid discrimination in ranking the personnel for further promotions.
Ø To manage people, it is very important to fudge the abilities correctly to recognize them.
Ø Self-appraisal system is prevalent for officer cadre personnel in public sector banks.
Ø In die new private sector banks, if is available to the entire staff including award staff but it is compulsory, tiring system by which a section of the employees will he ranked under the lowest category that is, it requires improvement on a specific percentage basis.
Ø This is a discouraging exercise and at times even a performer will be ranked the lowest.
Ø This will have an adverse impact on die organization.
Ø HRM should give a serious thought to this aspect.










Human Resource Risk
The banking HR risk is another important aspect to be managed by the HR and Planning department.
In certain situations the departure of an employee with specialized skills and knowledge due to resignation, retirement or removal may bring certain systems to a halt and may even create chaos. This is called HR risk.
In this process, the-bank may have to pay multiple individuals with similar knowledge and experience to ensure protection against this risk.
Similarly, the bank may have to face the risk of loss of key personnel, which is called the risk of inadequate motivation among staff who manage the situation. If the management offers inadequate incentives or doesn't, give any incentive at all, or wrong incentives, it may lead to disastrous financial results, provided the incentives are linked to individual performance. In such a case, the personnel will not co-operate in combating the risky situation. In case a group incentive is given, individual motivation will be affected. Therefore in such "HR risk" Situations incentives should be linked to short-term results and not to long-terms ones.
It is the responsibility of the HR department to formulate proper policies to prevent such situations, where "HR risk" may crap up due to the exit of skilled personnel from banks.
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Re: hrm in banking and insurance
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 (7 (permalink))
Swati Srivastava
Puswaka is on a distinguished road
 
Puswaka
Analyst at DBOI
 
Institute: Rithumbara
Status: Offline
Posts: 16
Join Date: Feb 2007
Re: hrm in banking and insurance - April 15th, 2007

i think this will help u all

EXECUTIVE SUMMARY

Fast global and technological developments have made today's business environment highly uncertain and even chaotic. Organizations are seeking newer ways to promote their adaptability to the complexities of the changed scenario so as to survive and prosper. Globally, organizations are striving to realize competitive success through strategic management of human resources. Thus, people management has never been more important than it is today. Therefore new themes have emerged in the process, replacing some of the old ones. The new thinking in this regard is referred to as Human Resource Management (HRM), which carries a more proactive and strategic connotation. HRM is intimately intertwined with business strategy. In many situations, it even critically influences business strategy.

The development of employee commitment through employee involvement and empowerment is one of the key objectives of any HRM discourse. The complex business objectives in today's business environment are difficult to realize without developing highly committed and motivated employees who would strive to contribute to organizational goals. That is why, human resource issues are no more the exclusive preserve of personnel specialists; rather line and general managers are being increasingly involved in handling key HR issues and in evolving, shaping and managing human resource strategies and policies. These developments have given a far greater recognition to the HR function in organizational decision-making processes.

Introduction


Human resource management is planning, organizing, directing and controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives accomplished.

Thus, human resource management refers to a set of programmes, functions and activities designed and carried out to maximize both, employee as well as organizational effectiveness.
It is concerned with the people dimensions in the management. Since every organization is made up of people, acquiring their services developing their skills motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of organization -government, business, education, health, recreation or social actions.

Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank or organization largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.

Thus, HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employees as well as organisational effectiveness.

Meaning of "Human Resource" in banks
Human resource is one of the natural resources of any country's economy. It is the wealth of the country. In the context of banking, human resource is of greater importance. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.
Need for HRD and Its Management in banks
There is a qualitative change in the banking paradigm on account of changes in the industry due to the entry of new private sector Banks. Therefore, it has become a necessity to recruit, train and deploy people at all level efficiently, for better performance and success. This is the basic function of HRD, which includes the concept of HRM.
An view of the changes in the political scene in the recent past, seeping changes are expected to take place in the banking industry. It is expected that only a few banks will remain after a series of amalgamations and mergers, not only in the Indian banking industry, but also at the international level.
Emergence of new private sector banks, disintermediation and competition and self-regulation in monitoring banking has necessitated efficient Human Resources Management in banks.

HRM is a continuous process, involving selection, recruitment and training on an "on going basis" for the staff and their deployment in the right place. The activity is called HR development.






















Building up efficiency in Banks with the help of HRM

The crucial factors behind successful banking will be continuous and sustained build up of skills, knowledge, education and attitudes among people working in the banks, particularly the frontline staff, working in the branches.
It is possible through professionalization, which is an internal part of HRM. Bank staff should be motivated and encouraged to practice proffessionalism for their personal growth and thus contribute to the organization's growth.
Building efficiency in banking is, therefore largely dependent on the best selection process adopted by the HR department. There is imperative need to build up skills within an organization for the successful managing of available HR.
Banks have vast human resource specialized in multiple disciplines like technology, law, operations, foreign exchange, administration etc. the basic function of HR is to manage them efficiently for continuous success.












For building up better efficiency in banks HRM in banks have to follow the bellow two functions:-
1) Emphasis on job description and job Assignment.
2) Response to challenges in future.

1. EMPHASIS ON JOB DESCRIPTION AND JOB ASSIGNMENT

One of the important functions of HR department is to ensure proper definition for workers in the bank. The staff should know about the vacant positions and the skills required for those particular jobs. Accordingly, people should be recruited to that particular job. The allotment of a job to a right person, who has the required skills is called job assignment. If this function is not properly performed by the HR department, people in all departments will be in a chaotic situation. This will impair their performance and subsequently customer service.

Improvement in performance and skills of existing employees can be achieved through recruiting the right person for the right place. Thus, job description and job assignment are parallel concept requiring attention.







2. RESPONSE TO THE CHALLENGES IN FUTURE.

Bankers should chalk out a wide range of strategic responses to the future challenges. They have to look into the structure, procedures and processes of the systems and make policies accordingly, to ensure necessary changes. It is the foremost function of HRM. Banks have to convince their employees that that a challenge is an opportunity to prove oneself. Bankers in India have to utilize this opportunity before the competition overtakes them and people in banks have to respond immediately to the challenges.

This requires the HR department to work efficiently. Banks are in the service industry, where the raw material is HR. HRM, therefore, emerges as a very basic and important element for strategic response to the changes that are taking place in the banking sector. HR departments should take it seriously to formulate policies to meet these challenges.

HRD is a critical management function. Each manager should have initiative, awareness, co-ordination and facilitation to perform his role. This is critical function of HRM.






The Changing Banking Environment and Role of HRM

Owing to the changing banking environment HR department should call for appropriate response in equipping people who have to perform in the new environment. People should be prepared to 'accept changes. The upgraded technology in banks might create fear among the staff regarding their adaptability to the new environment. It is the responsibility of the HR department to properly counsel people and prepare them to face the challenges before them. Their mind should be fine - tuned to work in the new technological environment.

The main function of HRM is to build up capabilities in people working in banks and intensify their sense of belonging to the organization. To improve their performance and increase the bank's productivity HR must incorporate challenges in routine work. Team spirit has to be inculcated in the branches and greater focus should be on customer care. This would be possible only through the unprecedented efforts to be put forth by the HR department.






Rewards, Remuneration, Incentives and Punishments

HR department should make efforts to provide appropriate incentives, rewards and increase remuneration to employees. Otherwise, dissatisfaction may creep into all levels of the bank, resulting in" inefficiency, perfunctory attitude, and poor service standards. These will ultimately affect the functioning of the organization. Therefore, the HR department has to formulate policies with utmost care taking into account all these facets of personnel banking. Radical changes are required in the performance appraisal system to avoid nepotism. HR policies with regard to manpower and career planning, and placement policies have to he revamped. A level of professionalism with the help of technology and scientific management has to be brought in by the HR departments of banks. Clear policies regarding performance rewards, incentives and increase in remuneration have to be outlined and implemented.
With regard to the accountability for non-performance and for the mistakes, the HR department's intervention is a must for establishing the facts of each case. Proper judgment "with impartial attitude helps develop satisfaction among the staff members.
Before punishing for mistakes and non-performance, a certain kind of enquiry is required by the HR department. In the present scenario, particularly in the new private sector banks, dismissals are taking place arbitrarily without proper enquiry for accountability. This will impart the efficiency of the existing staff and lower dynamism in their performance, ultimately leading to reduced productivity due to fear and insecurity of losing the job. It is the first and foremost duty of the HR department to formulate appropriate policies with regards to punishments. A set of guidelines and procedures has to be formulated and followed for punishments to staff in case of any indiscipline.
There are certain inevitable situations in working where the staff needs to experiment in order to take decisions. In the process mistakes are bound to occur. Committing mistake is a way of learning. These are not to be treated as sin by the management. Otherwise, the decision making process will be vitiated. In such situations, the HR department plays a crucial role in
adopting proper strategies and in responding correctly to the warranted situation.
HRM will play a significant role in handling situations while awarding punishments to employees without impairing others' efficiency.




















Employee Turnover and Implementation of "Exit Policy"

I n the present scenario, the employee turnover has increased in the banking industry, specifically in the new private sector banks.
The main reason behind the trend is the recruitment of young people without experience.
They will be moving to other jobs after gaining experience, for higher salaries.
This usually has a bad effect on the work atmosphere of the organization.
The new private sector banks have become a training ground for the new and fresh recruits.
It is the responsibility of the HR department to arrest this trend of employee turnover.
The HR department should formulate suitable policies to retain the staff by providing 'incentives, rewards, and better increments every year. These policies will ensure organizational efficiency.
The employee turnover may increase on account of
o Lacunae in the appraisal systems,
o Non-recognition of talent,
o Discouragement for the staff,
o Lack of motivation,
o Lack of promotions to higher cadre in the organization etc.
HR and personnel departments of banks should realize the importance of all these aspects and help the organization in formulating correct policies. In this process, the HR departments of all banks should realize the importance of recruiting experienced people in higher positions to ensure utmost efficiency. It will increase the productivity and profitability of the organization.
Performance Appraisal Systems

It is one of the important functions of the HR department is to formulate proper policies with regard to performance appraisal in banks to avoid discrimination in ranking the personnel for further promotions.
To manage people, it is very important to fudge the abilities correctly to recognize them.
Self-appraisal system is prevalent for officer cadre personnel in public sector banks.
In die new private sector banks, if is available to the entire staff including award staff but it is compulsory, tiring system by which a section of the employees will he ranked under the lowest category that is, it requires improvement on a specific percentage basis.
This is a discouraging exercise and at times even a performer will be ranked the lowest.
This will have an adverse impact on die organization.
HRM should give a serious thought to this aspect.










Human Resource Risk
The banking HR risk is another important aspect to be managed by the HR and Planning department.
In certain situations the departure of an employee with specialized skills and knowledge due to resignation, retirement or removal may bring certain systems to a halt and may even create chaos. This is called HR risk.
In this process, the-bank may have to pay multiple individuals with similar knowledge and experience to ensure protection against this risk.
Similarly, the bank may have to face the risk of loss of key personnel, which is called the risk of inadequate motivation among staff who manage the situation. If the management offers inadequate incentives or doesn't, give any incentive at all, or wrong incentives, it may lead to disastrous financial results, provided the incentives are linked to individual performance. In such a case, the personnel will not co-operate in combating the risky situation. In case a group incentive is given, individual motivation will be affected. Therefore in such "HR risk" Situations incentives should be linked to short-term results and not to long-terms ones.
It is the responsibility of the HR department to formulate proper policies to prevent such situations, where "HR risk" may crap up due to the exit of skilled personnel from banks.
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Re: hrm in banking and insurance - April 15th, 2007

hi puswaka,

i m lookin for a 100 marks project. Pls help me out wid tht. d project is quiet relevant, but i want for 100 marks.

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Re: hrm in banking and insurance - June 2nd, 2007

your project on Insurance and Banking was realy useful to me
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Re: hrm in banking and insurance - June 30th, 2007

Hey ,
I am a new user of this site.can u help me on how to operate this site in an efficient way ... i find this site too good but unable to operate it pls help.

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