HR Practices in the Private Sector and MNC Banks

HR Practices in the Private Sector and MNC BanksIndian fixing argonna, e superfluously m mavinymaking(prenominal) verifys, stick started realizing the choose for a strong serviceman resource taste for their survival in the face of the rapid ever-changing environs, gentlemans gentlemanwide contest and separate upcoming ch whollyenges. With attrition becoming a stark world in the Indian money boxing sector, it is increasingly universe understood that employee loyalty has to be created by agreemental interventions and not several(prenominal)thing that bear develop on its own.It is in this backdrop, it is an principal(prenominal) topic to argue shaping your HR policies and practices around the proceed push back.Indian Banking IndustryThe coin cussing sector in India is an integral small-arm of commonwealths fiscal function constancy. The imprecateing index has grown has grown at a compounded annual rate of e genuinelyplace 51 per cent since April 2001.The st rong banking structure has been adapted to fuel continued growth, which has prospered long-term economic growth. Market cap of Indian banking diligence 7500 Billion contri barg entirelying to 7.7 % of GDP pitying Resource precaution Practices in IndiaIndian banking sector is making efforts to adopt interneational trounce standards in HRM with the local anesthetic customs and sensibilities.HRM function in a bank is being increasingly recognized as a strategic channel partner with responsibility of managing key corporate resources.It is expected that HR duty mustHelp the shaping to be much agile by adopting practices that allows it not solitary(prenominal) to adapt to changes in the external environment exactly withal to realise from the same.Ensuring that the corporation is able to sustain its operation over a period of clock quantify.Ensure efficiency in the use of HR resources in the organization in an unified manner with all other corporate resources.The succes s of any bank line depends as much(prenominal) on appropriate, effective, easily-communicated, HR and business practices as it depends on confluence the requirements of mandated laws and regulations. In fact, better planning and the phylogenesis of effective practices make regulatory compliance much easier.HR practices helps in increasing the productiveness and quality, and to attain the competitive swell of a plyforce strategically aligned with the organizations goals and objectives. Organizations atomic number 18 becoming increasingly awargon intimately the impact of multiplication gaps in the interaction betwixt the various parts of its do workforce. With increasing globalization, the diversity (both geographical as well ethnic) is on the rise in the organizations operating on a global scale. At the same time, the com stick of the workforce itself is changing and different generation assemblages, with differing popular opinionpoints on the same subject, argon ess ential to work together. This requires adjustments to be make by all categories. Organization must facilitate such adjustments by creating enabling environments so that the needs of all generation groups are satisfied, concurrently with the achievement of the organizational goals. At minimum, the organizations must be aware ab proscribed the diversity of generation groups within its ranks and tailor their force practices jibely.1.3 Key death penalty Indicators for HR PracticesSome of the key achieveance indicators for benignant Resources hold but are not limited to the following. Employees pellucidness on HR policies Employees clarity on office staffs, responsibilities and expectations Development of qualitative staff Number of HR issues arising for which in that location are no clear policies and guidelines Competitiveness of compensation structure comparative to patience benchmark Usefulness and accuracy of compensation survey soften time to respond to staff welfa re issues Employees esteemment of promotion criteria and touch on (clarity, fairness) Measurement of HR policy violation Average time required to fill vacancies Proportion of nurture programs gisting in productiveness improvement faculty attrition rate Understanding / Clarity of the Organizational philosophy intimate internal capabilities and identify gaps on skills-competencies-behavioural aspectsIn response to the change in the business environment, the competencies required by HRM present in any Indian or MNC banks are necessary to be studied.Objective of StudyHRM incision depends upon the HR practices of the organization. HRM is make according to HR practices.HR Practices differentiate the organization from its competitors by effective and efficient HR Management. By following this, the organization does its whole work carry done. HR Practices increase productivity and quality, and help gain the competitive advantage of a workforce strategically aligned with the organ izations goals and objectives.In addition to aforesaid goals following are our additional objectivesLiterature surveilVarious online journals on HR practices were referred. Along with it articles on different banks were besides referred for the purpose of this project.MethodologySecondary data from books and internet resources were used for indication to write this reportAnalysis and discussionHR practices differ from one organization to the other. Even though the theory remains same its effectuation differs from severally because of the difference in its policies. Hence the analysis on the concept of HR practices and its implementation is carried out for three main multinational banks which complicate ICICI, Citi bank and HSBC. Their HR practices along with its approach towards HR, the different panaches of implementation and innovative changes brought about by them in its policies are discussed for each of these banks mentioned higher up in detail.Hong Kong Shanghai Bank ing Corporation HoldingsHSBC Holdings, a British financial safekeeping caller-out with roues in Hong Kong and Shanghai, where offices were opened in 1865 under a special charter which allowed Hong Kong rather than London as a leave rear location ( 2003). HSBC was in intense competition all over Asia with Chase Manhattan which showed interest in a small bank in India and Malaysia. HSBC pre-empted by purchasing the bank in 1959 (1991). Diversification had meshn a beating although it was only in 2000 when acquisitions in Asia became topical again, in a small way. Two of them were part of the cloistered banking drive, PCIB Savings Bank in the Manila area and Taiwans lead story as rate manager China Securities Investment Trust Corp. in 2001, to be followed by an 8 per cent stake in the Bank of Shanghai. HSBC had re hug druged to its roots. by and by many more events unfolded including the turnover of Hong Kong to china this prompted HSBC to transfer headquarters to coupled Kingd om (2003). HSBC sees the Internet as one of several exciting spic-and-span media, to be incorporated as an integral part of its working. The bank has reason that e-commerce go out change the fabric of the financial services sector and sees it as a way of finding new guests all over the world and improving its services to existing customers.The companys current approach to HRMHSBC has over 260,000 employees at present. The company employs and manages versatile kinds of people all around the world. Such is done by the company because they trust that these people can give them a balanced and well-roundedorganization. This in like manner makes the company adaptable to different kinds of situation. The company wants to reach out to all parts of employment for maximum productivity and take to be. The company believes that a companys difference with its competitors can be seen in the way it serves it consumers and the way they work on their employees. The company makes sure that th ey treat the employees with o utmost measure for their rights and it makes certain that the company is given the treatment they deserve. The companys personnel policies are gear to attract motivate and develop people who are perceptive, seeful, fair, progressive and responsive. The company aims to make itself a place people would analogous to work to. In the future the company can steer the goal of its HRM to making the personnel the most competent people in the industry. The company can set forth activities that go out make the personnel more competent without ruining their good relationship.Workforce DiversityHSBC claims that they are the Worlds local bank. Their tagline also applies to their work culture. They believe in the fact that no matter how assorted the work force may be, the ultimate aim of the bank is to have a work culture which is Global in nature. But at the same time they do give regional considerations in suppose to have synergies with the employees who are from the local population of a particular city/country. This in turn helps the corporation in becoming an employer by choice.Respecting individuals of all types inspires loyalty in both employees and customers, which has a direct line of sight in achieving business goals is their HR departments logo.The strategy is based on the premise that the most classic competitive differentiators are the quality of individual service tryd to our customers and the way we treat our employees. It connects with Managing for Growth, the brand and the people strategy.What is Diversity?Definition According to HSBC, diversity is a source of opportunity, whether in employment or the customer markets. Appreciation of this various culture fuels group dynamics and helps in creating an environment where squads can perform to their fullest potential. Competitive edge can be gained from the variety present in their workforce and customer base, and specific attention to market variation.Example In todays gl obal environment, Banking corporations give finance to foreign companies. Now lets say that a company from USA wants to invest in emerging country like India in the field of agricultural technologies and approaches HSBCs New York branch for a lend to fund their new project. Now HSBC on its part would have to accept various factors pertaining to the feasibility of the business plan submitted by the borrower. In order to decide whether they should grant a loan to the US company, HSBC willing take a long time to collect data about the Indian agriculture prospects, the growth witnessed for the blend in 5 eld, government policies, trade restrictions etc. This serve up will take a long time.However, now lets consider that this project is assigned to a handful of employees from India or from Indian origin in HSBCs New York branch. These employees by the virtue of being familiar with the country in question (India) would be very much familiar (there is a chance) with the aspects like agriculture in India, government policies pertaining to agriculture, trade etc. And hence, they would be able to prepare a report considerably faster than the employees who are not of Indian origin. This would considerably reduce HSBCs labour hours and would help them in coming up a quicker decision. This would thus make HSBC more competitive against a bank which does not have a diverse workforce.Recruitment and SelectionHSBCs enlisting and selection policies are scripted in accordance with the organizations Equal Opportunities Policy.HSBC go steadys that each stage of the recruitment procedure is conveyed out in a methodical manner and is based on pre-agreed criteria. They attain to eradicate individual bias that can influence the conclusion producing process.They ensure that all conclusion points are completely documented to aid followed by monitoring.HSBCs intentions are to make the entire hiring procedure as open as possible, and to double check that all candidates realize w hy conclusions have been interpreted and, where they desire, to get significant feedback.Demonstrate robust, clear methods and hence supply a cornerstone for appropriate defence in the event of a challenge. at that place are seven major phases to the procedure in the recruitment process in HSBCPre-advertisementPlacing advertisements and considering with investigations and applicantsShort-listingInterviewing and selectionPost-selection proceduresInductionMonitoringThe following are the order values for recruitment and on-boarding process.Attracting and employing suitable employees is one of the most significant undertakings of the tie beamMerit will be the most significant factor in the recruitment process.Diversity of gender and ethnicity is to be achieved by with the assistance of recruitment vendors and the referral program.While abilities play an important role, they will charter persons who are group players and have the right prospect most applicable to the heritage of the o rganization. emplacement is as significant as aptitude.They cogitate on hiring people who can push the organization to greater heights.They believe in allowing their employees to fulfil their vocational paths.They try and fill vacancies with internal candidates before assessing external candidates.They believe that each nominee consulted becomes an ally of the organization, irrespective of whether she/he is chosen. They treat all the candidates with the utmost respect and are open and equitable in connection with themThey will relentlessly consider, recognize and cultivate strategic gifts for universities, administration schools, and community forums to dispense their long period needs.Hiring Approval all recruitment undertakings will be founded on the chartering design as accepted by the concern Head, HR Head the CEO.For each position, a chartering requisition will be demand prior to initiation of any recruitment activity.If the chartering is not encompassed in the intention al allowance, it will also need acceptance from the CEO founded on a recommendation from the Head HR and the CFO.Recruitment total cost and spending should be budgeted and pre-approved by the HR Head.Candidate SourcingThe chartering supervisor along with the Human Resource Department would conclude the source to use founded on the environment of the recruitment. The next causes of recruitment may be consideredInternal SourcesWhenever any vacancy arises, the likelihood of fulfilling the obligation internally via reassignment and relocation, re-allocation of the responsibilities or interior advancement will be discovered by the chartering function along with the HR Department.Employee ReferralsHSBC will boost workers to mention apt candidates for open positions.Other external causes includeRecruitment agenciesExternal profession postingsCollege / campus requirementEmployment of RelativesThe association uses, solely on merit, the relations of employees as long as it does not shoot down about a conflict of interest.To decrease the possibilities of favouritism the following guidelines should be followedRelatives are not allotted to a place where he/she has the hypothesis to ascertain, method, and reconsider, accept, review or else sway the work of the individuals cited and above.If an employee is aware of a position that seems to be an opening for people to indulge in favouritism towards relations, one should communicate to the Department Head or Human Resources Department.Employees will not be part of the chartering method of their relations.Internship ProgramHSBC supplies internship possibilities to students. Such internships will result in young students producing genuine assistance to the company.HSBC will pursue the process as followsHR will coordinate with enterprise assemblies to recognize possibilities for intern hiring.Internship demands could be obtained either from the students directly or as nominations from the informative institute.HR and charte ring supervisor tele- interview the candidates and later conduct individual meetings in the office.Based on the illustrated capability, the intern will be appointed to work in quadruplicate agencies to gain a broader enterprise comprehension.Probation PolicyProbation is a test that is unwashed opening for the worker and HSBC to affirm suitableness for proceeded employment.The probation time span is to set up based on capabilities, anticipations and drilling required.The worker should illustrate suitability for proceeded employment.An evaluation will be conducted on components associated with work presentation, work customs, productivity, mind-set and compatibility, calculateance and punctuality, and any other issue that is connected to the job profile.All new charters will be put on probation for a time span of 6 months from the designated day.HR will dispatch an appraisal figure to the direct supervisor before culmination of the probationary period. The appraisal ensample is required to be accepted by the supervisors leadership.All notes of confirmation or extension of probation will be marked by the HR head and will be retained in worker records.HR practices in CitibankThe different steps in which Citibank implements HR practices are given down the stairsI Staff MeetingsStaff 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 leadern in achieving them.The forum is being effectively utilized for harmonious functioning of all the branches and administrative units by means of greater involvement and collective contribution of all staff members.IIBrain Storming SessionsThis is a technique for generating ideas and suggestions on topics of relevance and also to provide alternate solutions to enigmas by simulative think ing and imaginative power of cross persona 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 bandConcept of Study Circle aims at self ontogeny of employees by kindling the desire to bear/update companionship, information and experience.Guest lectures/ Power Point Presentation / aggroup 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 branchesIV Quality CirclesIt is a time tested rotating shaft of Total Quality Management (TQM) which promotes team spirit, cohesive quality work culture, commitment and involvement of employees.Challenges face up by CitibankThe real challenge of that Citibank faced while entering India starting time was adoptin g its HR strategy according to the Indian culture.As most part of the jobs in the banks are categorical/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 ticker and peripheral workforce in many organization has presented new challenges for HR managers unexclusive private sector organizations are fast becoming diverse communities for core workers, flexibly employed casual and part-time workers, consultants, contractors business partners. trustworthy rigidities have also developed in HRD within Citibanks banking system itself because this industry is still largely in the public sector.SuggestionsFollowing suggestions are very essential to adhere for effective Banking Administration in CitibankHR functions to be linked to corporate goals.Shift from Industrial relations manager to Business manager or Commercial manager.Team work is some other 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 beaver.As people are primary asset, it is essential not only to invest in them, but also to ensure that the funding 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 sectors hierarchical structure, which gives alternative to seniority over performance, is not the best environment to attract the best talent from among the young.ICICI Banks HR PracticesSelection ProcessAs per ICICI Banks research and in-depth study, following competencies are required to succeed in ICICI BankCustome r firstPassionDynamismCompliance with conscienceIn order to assess the same a set of tools are used a. Aptitude Tests (for applicants with 0-2 years of work experience)The tests are designed to assess basic aptitude of candidates including quantitative comprehension, verbal comprehension, logical reasoning and basic checking abilities. These are important skills for the role of an entry-level manager and people who do well in these tests tend to do well in their jobs at ICICI Bank. The total time taken in this exercise is 55 minutes.b. Occupational Personality QuestionnaireApplicants are also required to complete the Occupational Personality Questionnaire (OPQ) before they appear for the selection, the results of which are integrated into our selection process.RecruitmentAs a rapidly exploitation organization the bank looks to induct post-graduate commission talent from various business schools crosswise the country. Enthusiastic and talented youth form the backbone of their bank ing operations. The bank offers a wide range of careers in all functions including Finance, Marketing, Operations, Information Technology and Human Resources.According to Ramkumar (Group Chief Human Resources Officer of ICICI Bank in 2005), 4,000 of the recruits are newers (2,500 MBAs from different caution schools and about 1,500 graduates from various colleges). The banks growth in the retail segment is the driver for sharp hike in headcount of the bank. thither is need of recruits to serve the fast growing small and medium enterprise, clownish/agriculture, private banking and wealth management segments. Theres also a concurrent need for technical, back-office operations and quality assurance personnel. The bank recruits about 75 students from IIMs and another 100 from the next tier such as SP Jain, NMIMS, Symbiosis, Bajaj, etc., every year.It recruits only some persons from other banks. About 7.5 lakh persons working in the public sector bank generally dont change jobs and ra ther prefer job security. As a result, the remaining one lakh in private sector is a limited supply pool for a growing banking sector. So, the bank looks out for other companies in aviation and hospitality sector so that persons who like to serve customers are recruited. The group has some 50,000 employees on its direct payroll and another 1, 00,000 are indirectly employed as insurance agents and people working under service providers. The bank gets 4 lakh CVs each year. This benefits the bank and it does not face any hiring problem as there is plenty to choose from. While most of the hiring happens directly, consultancy firms are used for some of the higher level recruitments. The plans are to hire more people for insurance and securities broking businesses as these sectors are growing very fast.The bank has tied up with local colleges. With this, it is easy for them to create a local supply and also consume locally. Also, it would be able to gain the respect of the community and c reate loyalty. The recruits would be able to speak the local language. The spring is partially social and also makes good business sense.Also in a bid to control recruitment costs and raise productivity of its HR personnel, the bank has collaborated with Internet service providers such as confidence Infocomm for providing interview cubicles with audio-visual recording and tele-conferencing facilities. By this process it would be convenient for candidates to attend interviews at centres nearest to their homes, or else of travelling to Mumbai, where interviews generally take place. The interview centres are expected to improve productivity of the banks human resources personnel by about 30%. It will also reduce the time invested by HR heads as they have to spend a lot of time traveling to tier-II cities to interview candidates.These interview centres would remain open 24 hours a day. This is a boon for working candidates who can find time only after office hours. Online application forms and an in-bound call desk are other initiatives the bank is taking to support recruitment.Bringing a ChangeThe professional work culture, high salary and faster growth prospects make the group a like destination for top business school students. The senior bank officials have also met representatives of the countrys top 20 B-schools to discuss changes to their curricula so as to make them reflect the changing business dynamics. As per the current industry trends, retail and rural banking are emerging as big areas. So, the bank has suggested B-schools to forge them in the curriculum. Also, the nature of internships for B-school students should be changed from those involving mere summer formulation and data collection to the ones undertaken by doctors and lawyers. Research should be India centric and Indian case studies should be prepared for students. According to him, the group is not maladjusted about getting skilled people as it has the infrastructure to train the well educated people.ICICI Bank, which boasts an extremely high proportion of women by industry standards (32,000 women or one-third of their headcount), has been running a campaign on campuses for last two years to bust touchs regarding career options for women. There are some male stereotypes about certain kinds of job profiles and that is a misplaced notion which the bank is trying to correct. The average age of an employee at ICICI bank is 30 year. And 70% of these employees have additional qualifications they are CAs, MBAs or have diplomas in business management.Training TalentsThe banks HR Head believes that it is up to organizations to train the fresh talent so as to be able to retain them in the future. ICICI Bank spends 1.5% of its profits on training and has nine training centres crossways the country today. It employs 30,000 people and recruits 15,000 people annually. The training sessions are customized to alter employees to breed an irate customer without being aggressi ve or defensive instead reassure him/her and work towards a solution in the right attitude. It also helps the employee handle difficult situations such as 5 customers appearing at the counter at one time.Training sessions are more or less on grooming, etiquette and more on presenting ones company, product and oneself, identification of customer needs, listening, and so on. To add to it, the senior managers of ICICI Bank take regular classes at B-schools and this provides an opportunity for interface with the institutes as well as help accompaniment the theoretical inputs with practical cases. The organization is tech-savvy, non-hierarchical, where early responsibility and independent decision-making enable each employee to reach their potential. Coupled with this is a strong performance management system that has built a meritocracy where high performing-high potential individuals are punctually rewarded. Understandably, its a good time for bankers. Few years back, branch managers in private sector banks were getting Rs. 6 lakh a year. Now, they are being offered salaries as high as Rs. 25 lakh by MNC banks.Human CapitalICICI Bank views its human capital as a key source of competitive advantage. Consequently the development and management of human capital is an essential element of our strategy and a key management activity. Human resources management in fiscal year 2002 focused on smooth integration of the employees and human resource management systems in the circumstance of the merger, as well as on continuous improvement of recruitment, training and performance management processes.The process of integration involved defining the organizational structure of the merged entity, people placement in various positions crossways the business and corporate groups, and integration of the grade and remuneration structure for the employees of the quadruplet entities. The organizational structure was announced in February 2002 and became effective on may 3, 200 2. The people placement process was based on appropriate talent profiling tools and matching employee profiles to job specifications. The grade integration process has also been successfully completed, using job evaluation techniques. The recruitment process has been sleek and a uniform recruitment policy and process implemented across the merged organization. Robust ability-testing and competency-profiling tools are being used to strengthen the campus recruitment process and match the profiles of employees to the needs of the organization.ICICI Bank continues to be a preferred employer at leading business schools and higher education institutions across the country, whirl a wide range of career opportunities across the entire spectrum of financial services. In addition to campus recruitment, ICICI Bank also undertakes lateral recruitment to set down new skills, competencies and experience into the organization and meet the requirements of rapidly growing businesses. A Six Sigm a initiative has been undertaken for the lateral recruitment process to improve capabilities in this area. ICICI Bank encourages cross-functional movement, enriching employees knowledge and experience and giving them a holistic view of the organization while ensuring that the bank leverages its human capital optimally.The rapidly changing business environment and the constant challenges it poses to organizations and businesses make it imperative to continuously rise knowledge and skill sets across the organization. ICICI Bank believes that building a information organization is critical for being competitive in products and services and meeting customer expectations. ICICI Bank has built strong capabilities in training and development to build competencies. Training on products and operations is imparted through web-based training modules. particular(a) programs on functional training and leadership development to build knowledge as well as management ability are conducted at a d edicated training facility.ICICI Bank also draws from the best on tap(predicate) training programs and faculty, both international and domestic to meet its training and development needs and build globally benchmarked skills and capabilities. ICICI Bank seeks to build in all its employees a total commitment towards exceptional standards of performance and productivity, adaptability to changing organizational needs and the demands of the business environment and a willingness to learn and acqu