Project 1111

PROJECT REPORT
ON
“HUMAN RESOURCES MANAGEMENT

IN
PRIVATE SECTOR BANK”
BACHELOR OF COMMERCE
BANKING AND INSURANCE
SEMESTER-V
SUBMITTED
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR AWARD OF
DEGREE OF BACHELOR OF
COMMERCE – BANKING AND INSURANCE
BY
RAJNI NAIDU
ROLL NO.39
SMT.CHANDIBAI HIMATHMAL
MANSUKHANI COLLEGE
ULHASNAGAR-3
CERTIFICATE
THIS IS TO CERTIFY THAT SHRI/MISS RAJNI NAIDU OF B.COM

BANKING AND INSURANCE SEMESTER-V (2009-2010) HAS
SUCCESSFULLY COMPLETEDTHE PROJECT ON HRM IN
PRIVATE SECTOR BANK UNDER THE GUIDANCE OF PROF.
KAJAL BHOJWANI
COURSE CO-ORDINATOR PRINCIPAL
INTERNAL EXAMINAR
EXTERNAL EXAMINAR
DECLARATION
I, MISS RAJNI NAIDU, THE STUDENT OF B.COM

BANKING AND INSURANCE- SEMESTER-V (2009-2010) HEREBY
DECLARE THAT I HAVE COMPLETED THE PROJECT ON
HUMAN RESOURCES MANAGEMENT IN PRIVATE SECTOR
BANK.
THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO

THE BEST OF MY KNOWLEDGE.
SIGNATURE OF STUDENT
RAJNI NAIDU
ROLL NO.39
METHODOLOGY
Primary Data Collection:-
The primary data was collected by making a visit to…..
 ICICI Bank,andheri branch

 ICICI,ambarnath
The view and opinions were collected from the above mentioned bank.
Secondary data collection:-
The secondary data has been collected from the following sources….
 HRM books
 Websites
 Magazine
ACKNOWLEDGEMENT
I, WOULD LIKE TO ACKNOWLEDGE THE FOLLOWING AS

BEING AN IDEALIST CHANNEL AND A FREASH DIMENSION IN
THE COMPLETION OF THIS PROJECT.
FIRST AND FOREMOST I WOULD LIKE TO THANK MY GUIDE,

PROFESSOR KAJOL BHOJWANI WHO’S IN VALUABLE SUPPORT
AND GUIDANCE HELPED ME IN EVERY ASPECT OF THIS
PROJECT. SECONDLYT,
I WOULD LIKE TO EXPRESS MY DEEP SENSE OF GRATITUDE

TOWARDS OUR BANKING AND INSURANCE CO-ORDINATOR
PROFESSOR KISHORE PISHORI FOR THEIR VALUABLE
GUIDANCE AND SUPPORT WITHOUT THIS PROJECT WOULD
HAVE NOT BEEN POSSIBLE.
LAST BUT NOT THE LEAST I WOULD LIKE TO THANK

ALL THE RESPONDENTS FOR THEIR SUPPORT ANDALL THOSE
PEOPLE WHO DIRECTLY AND INDIRECTLY HELPED ME IN
COMPLETING THIS PROJECT SATISFACTORILY.
OBJECTIVE:-
1) To understand the role of HRM in banks
2) To know the functions of HRM
3) To know the need of HRM in banks
4) To know the structure and position of HR department
5) To study the Human Resources Management
6) To know the changing bank environment and role of HRM

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.
In this project it includes the focus on HRM as Human Resource

Management. Indicating the ability of banks to deliver value to customer.
BROAD CONTENTS
Sr.no. Chapters Page no.
01 Human Resources Management 1-44
02 Human Resources Management in Private 45-56

Sector Banks
03 Case Study on ICICI 57-67
04 Conclusion 68-70
Human Resource Management (HRM)
INDEX
Sr.no Particulars Pg.no.

01 Introduction 1
02 Meaning and definition 2-6
03 Scope of HRM 7
04 Evolution of HRM 8-14
05 Objectives of human resource management 15-16
06 Functions 17-24
07 Positions and structure of HRM 24-27
08 Human Resources planning 28-31
09 Focus on HRM 32-33
10 HRM implementation activities 34-38
11 HRM development and implementation 39-41
responsibilities
12 Evaluation of HRM methods 42-44
HRM in private sector banks

INTRODUCTION
“Human Resources Management” (HRM) is a management

functions that helps managers recruit, select. Train and develop members
for an organization.
HRM involves the application of management functions and principles.

The functions and principles are applied to acquisitioning, developing,
maintaining and remunerating employees in organizations.
It is a series of integrated decisions that form the employment

relationship; their quality contributes to the ability of the organizations
and the employees to achieve their objectives.
Thus, HRM refers to a set of programmers, functions and

activities designed and carried out in order to maximize both employees
as well as organizational effectiveness.
~1~

MEANING AND DEFINITION
“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 programmer,

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,
Human acquiring their services developing their skills
resources motivating them to higher levels of performance and
Management
is also ensuring that they continue to maintain their
management commitment to the organization are essential to
function
concerned achieving organizational objectives. This is true,
with hiring regardless of the type of organization –government,
motivating
and business, education, health, recreation or social
maintaing actions.
people in an
organization
. It focuses Human resource is one of the natural resources of
on people in
any country’s economy.
organization
~2~

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.
Human resources are a term with which many organizations describe the
combination of traditionally administrative personnel functions with
performance management, employee relations and resources planning.
The field draws upon concepts developed in industrial/organizational
psychology.
Human resources have at least two related interpretations depending on

context. The original usage derives from political economy and
economics, where it was traditionally called labor, one or four factors of
production. The more common usage within corporations and business
refers to the individual within the firm and to the portion of the firm’s
organization that deal with hiring, firing, training, and other personnel
issues.
~3~

Human resources management (HRM), or human resource development,
entails planning, implementing, and managing recruitment as well as
selection, training, career and organizational development initiative
within an organization.
The goal of HRM is to maximize the productivity of an organization by

optimizing the effectiveness of its employees while simultaneously
improving the work life of employees and training employees as valuable
resources. Consequently, HRM encompasses efforts to promote personal
development, employee’s satisfaction, and compliance with employment-
related laws.
Michael j.jucius defined as” the field of management which has to-do
with planning, organizing, directing and controlling the functions of
procuring, developing, maintaining and utilizing a lobour force, such that
the-
(a) objective for which the company is established are attained

economically and effectively,
(b) objective of all levels of personnel are served to the highest
possible degree, and
(c) objectives of society are duly considered and served”
~4~
To achieve equilibrium between employer and employee goals and

need, HRM department focus on these three general functions:-
1. planning
2. implementing and
3. evaluation
The planning function refers to the development of human

resources policies and regulations. Human resources manager attempt
to determined future HRM activities and plan for implementing of
HRM procedures to help companies realizes their goals.
Implementing of HRM plans involves four primary
activities:
a) Acquisition,
b) Development,
c) Compensation and
d) Maintenance.
Acquisition entails the hiring of workers most likely to help a

company attain its goals.
The development function encompasses the training of workers to
perform their task in accordance with company strategy.
~5~
This activity also involves company efforts to control and change

employee behavior, appraisals, incentives and discipline.
Compensation covers the payment of employees for their services.
Maintenance requires structuring labor relations the interaction

between a company’s management and its unionized employees and
ensuring compliance with federal and state employment law.
~6~
SCOPE OF HRM
The scope of HRM is indeed vast. All major activities
in the working life of a worker-from the time of his or her entry into an
organization until he or she leaves-come under the preview of HRM.
Specially, the activities included are-HR planning, job analysis and
design, recruitment and selection, orientation and placeme3nt, training
and development, performance appraisal and job evaluation.
Human resource management serves these key functions:

1. Recruitment & Selection
2. Training and Development (People or Organization)
3. Performance Evaluation and Management
4. Promotions/Transfer
5. Redundancy
6. Industrial and Employee Relations
7. Record keeping of all personal data
8. Compensation, pensions, bonuses etc in liaison with Payroll
9. Confidential advice to internal ‘customers’ in relation to problems
at work
10.Career development
11. Competency Mapping
12.Time motion study is related to H.R.Function
~7~
EVOLUTION OF HRM
The momentum for the industrial revolution grew through the 17th
century. Agricultural methods were continually improving, creating
surpluses that were used for trade. In addition, technical advances
were also occurring, for example the Spinning Jenny and the Steam
Engine. These advances created a need for improved work methods,
productivity and quality that led to the beginning of the Industrial
Revolution.
Adam Smith.
In 1776, Adam Smith wrote about the economic advantages of the

division of labour in his work The Wealth of Nations. Smith (1776)
proposed that work could be made more efficient through specialization
and he suggested that work should be broken down into simple tasks.
From this division he saw three advantages:
- the development of skills
- time saving
- the possibility of using specialized tools.
Smith's suggestions led to many changes in manufacturing processes.
~8~
Every individual necessarily labours to render the annual revenue of

the society as great as he can. He generally, indeed, neither intends
to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he
intends only his own security; and by directing that industry in such a
manner as its produce may be of the greatest value, he intends only
his own gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it."
Adam Smith, considered by many to be the father of Capitalism, also

discussed the Invisible Hand or Laissez Faire approach (this term is
not used in the book but argues the case). "According to the hidden
hand approach, the only responsibility of business is to maximize
profits according to the market principle and within the constraints
of the law. If government interference in business is restricted to a
minimum, society will benefit automatically from the activities of the
business sector."
According to Rossouw (1994) the hidden hand approach lost value when
societies did not benefit automatically from business activity. It was
clear that business could not be relied upon to act in the best
interests of is staff, consumers and the society within which it was
operating.
~9~
In 1832, Charles Babbage examined and expanded upon the division of

labour in his work, On the Economy of Machinery and Manufacturers. In
this book Babbage offered, as an advantage to the division of labour,
that the amount of skill needed to undertake a specialized task was
only the skill the necessary to complete the task. Babbage analysed
and documented the manufacture of a pin and broke the process down
into seven elements to illustrate his point.
This study became important to employers in that they only had to pay
for the amount of skill required to complete a task.
Trade Unions.
During the late 1700's and early 1800's governments began to feel
pressure from the working class masses who started to question and
defy the power of the aristocracy. The working class began to form
workplace combinations and trade organizations provide a collective
voice for their rights. Governments tried to fight this using
legislation such as the Combination Acts of 1799/1800 in the UK, which
Banned everything from meetings to combinations.
~10~
"There were also attempts to form general unions of all workers

irrespective of trade. William Benbow (a Lancashire shoemaker), Robert
Owen and many others looked upon trade unionism not just as a means
for protecting and improving workers' living standards, but also as a
vehicle for changing the entire political and economic order of
society. Owen experimented with co-operative ventures and 'labour
exchanges'; both attempts to bypass the existing order of wage
slavery." (Trade Unions Congress, 2004)
Trade Unions were and are still an influential force, working for
continued economic and social development of workers and societies in
many countries around the world. Taylor is considered to be the father of
Scientific Management.
In 1911, his seminal work, The Principles of Scientific Management was

published. This book contains four overriding principles of scientific
management:
- Each part of an individuals work is analysed 'scientifically'.
- The most suitable person to undertake the job is 'scientifically

chosen' and is taught the exact way to do the job.
- Managers must co-operate with workers to ensure the job is done in a

Scientific way.
~11~
- There is a clear division of work and responsibility between

management and workers. (Bloomsbury, 2002)
"Taylor's impact has been so great because he developed a concept of
work design, work measurement, production control and other functions,
that completely changed the nature of industry. Before scientific
management, such departments as work study, personnel, maintenance
and quality control did not exist."
The Hawthorne Studies :-

The Hawthorne Studies were a groundbreaking set of experiments
conducted at the Western Electric plant in Hawthorne, Chicago by Elton
Mayo. The studies were conducted from 1927 to 1932 and measured the
relationship between productivity and working environment.
The studies were based on preliminary experiments conducted in 1924

that measured the effect of lighting on productivity. (Bloomsbury, 2002)
The results of the experiments showed that changes in the environment
did affect productivity, but this was not the sole factor.
The results of the experiments showed that changes in the environment

did affect productivity, but this was not the sole factor. The workers
considered management to be showing an interest in them and this
improved motivation.
~12~
Mayo's studies and the subsequent results were a significant break

from the theories of F.W. Taylor in that the workers were not solely
motivated by self interest. Mayo's research has led to the
understanding that workplaces are more than machine like environments
in that there are social environments and human emotions that require
consideration. Mayo's studies led to the rise of the Human Relations
Movement
Contemporary Human Resource Management.
In modern business the Human Resources Management function is

complex and as such has resulted in the formation of Human resource
departments/divisions in companies to handle this function. The Human
resource function has become a wholly integrated part of the total
corporate strategy
The function is diverse and covers many facets including Manpower

planning, recruitment and selection, employee motivation, performance
Monitoring and appraisal, industrial relations, provision management
of employee benefits and employee education training and development.
~13~

Frederick Taylor develops his ideas on scientific management.
1890- Taylor advocates scientific selection of workers based on
1910 qualifications and also argues for incentive-based compensation
systems to motivate employees.
Many companies establish departments devoted to maintaining the

1910- welfare of workers. The discipline of industrial psychology begins to
1930 develop. Industrial psychology, along with the advent of World War
I, leads to advancements in employment testing and selection.
The interpretation of the Hawthorne Studies' begins to have an

impact on management thought and practice. Greater emphasis is
1930-
placed on the social and informal aspects of the workplace affecting
1945
worker productivity. Increasing the job satisfaction of workers is
cited as a means to increase their productivity.
In the U.S., a tremendous surge in union membership between 1935

and 1950 leads to a greater emphasis on collective bargaining and
1945-
labor relations within personnel management. Compensation and
1965
benefits administration also increase in importance as unions
negotiate paid vacations, paid holidays, and insurance coverage.
The first is the increasing diversity of the labor force, in terms of age,
gender, race, and ethnicity. A second trend is the globalization of
business and the accompanying technological revolution. These
factors have led to dramatic changes in transportation,
1985-
communication, and labor markets. The third trend, which is related
present
to the first two, is the focus on HRM as a "strategic" function. HRM
concerns and concepts must be integrated into the overall strategic
planning of the firm in order to cope with rapid change, intense
competition, and pressure for increased efficiency.
~14~

OBJECTIVE OF HUMAN RESOURCES MANAGEMENT
Objectives are pre-determined goals to which individual or group activity

in an organization is directed. Objectives of human resources
management are influenced by social objectives, organizational
objectives, functional objectives and individual objectives. Institutional
are instituted to attain certain specific objectives. The objectives of the
economic institute are mostly too earn profits, and that of educational
institutions are mostly impart education and conduct research so on and
so forth. However, the fundamental objectives if any organization is
survival. Organizations are not just satisfied with goal. Further, the goal
of the most of the organization is growth and/or profit.
The objectives of HRM may be as follows:-
i. To create and utilize an able and motivated workforce, to

accomplish the basic organizational goals.
ii. To establish and maintain sound organizational structure and

desirable working relationship among all the members of the
organization.
~15~

iii. To secure the integration of individual and groups within the
organization by co-ordination of the individual and group goals
with those of the organization.
iv. To create facilities and opportunities for individual or group

development so as to match it with the growth of the organization.
v. To attain an effective utilization of human resources in the

achievement of organizational goals.
vi. To identify and satisfy individually and group needs by providing

adequate and equitable wages, incentives, employee benefits and
social security and measures for challenging work prestige,
recognition, security, status etc.
~16~
FUNCTION OF HRM
The Human Resources Management (HRM) function

includes a variety of activities, and key among them is deciding what
staffing needs you have and whether to use independent contractors or
hire employees to fill these needs, recruiting and training the best
employees, ensuring they are high
performers, dealing with
performance issues, and ensuring
your personnel and management
practices conform to various
regulations. Activities also include
managing your approach to
employee benefits and
compensation, employee records
and personnel policies. Usually
small businesses (for-profit or
nonprofit) have to carry out these activities themselves because they can't
yet afford part- or full-time help. However, they should always ensure
that employees have -- and are aware of -- personnel policies which
conform to current regulations. These policies are often in the form of
employee manuals, which all employees have.
~17~
Note that some people distinguish a difference between HRM (a major

management activity) and HRD (Human Resource Development, a
profession). Those people might include HRM in HRD, explaining that
HRD includes the broader range of activities to develop personnel inside
of organizations, including, e.g., career development, training,
organization development, etc.There is a long-standing argument about
where HR-related functions should be organized into large organizations,
e.g., "should HR be in the Organization Development department or the
other way around?"
The HRM function and HRD profession have undergone tremendous

change over the past 20-30 years. Many years ago, large organizations
looked to the "Personnel Department," mostly to manage the paperwork
around hiring and paying people. More recently, organizations consider
the "HR Department" as playing a major role in staffing, training and
helping to manage people so that people and the organization are
performing at maximum capability in a highly fulfilling manner.
Following are the some of the functions in details:-
Recruitment strategy planning:-
An analysis of the job to be done (i.e. an analytical study of the tasks to

be performed to determine their essential factors) written into a job
description so that the selectors know what physical and mental
characteristics applicants must possess, what qualities and attitudes are
desirable and what characteristics are a decided disadvantage;
~18~
• In the case of replacement staff a critical questioning of the need to

recruit at all (replacement should rarely be an automatic process).
• Effectively, selection is 'buying' an employee (the price being the
wage or salary multiplied by probable years of service) hence bad
buys can be very expensive. For that reason some firms (and some
firms for particular jobs) use external expert consultants for
recruitment and selection.
• Equally some small organizations exist to 'head hunt', i.e. to attract
staff with high reputations from existing employers to the
recruiting employer. However, the 'cost' of poor selection is such
that, even for the mundane day-to-day jobs, those who recruit and
select should be well trained to judge the suitability of applicants.
Employee motivation:-
To retain good staff and to encourage them to give of their best while at
work requires attention to the financial and psychological and even
physiological rewards offered by the organization as a continuous
exercise.
Basic financial rewards and conditions of service (e.g. working hours per
week) are determined externally (by national bargaining or government
minimum wage legislation) in many occupations but as much as 50 per
~19~
cent of the gross pay of manual workers is often the result of local
negotiations and details(e.g. which particular hours shall be worked) of
conditions of service are often more important than the basics. Hence
there is scope for financial and other motivations to be used at local
levels.
As staffing needs will vary with the productivity of the workforce (and
the industrial peace achieved) so good personnel policies are desirable.
The latter can depend upon other factors (like environment, welfare,
employee benefits, etc.) but unless the wage packet is accepted as 'fair
and just' there will be no motivation.
Employee services
Attention to the mental and physical well-being of employees is normal

in many organizations as a means of keeping good staff and attracting
others.
The forms this welfare can take are many and varied, from loans to the
needy to counseling in respect of personal problems. Among the activities
regarded as normal are:
• Schemes for occupational sick pay, extended sick leave and access
to the firm's medical adviser;
• Schemes for bereavement or other special leave;
• The rehabilitation of injured/unfit/ disabled employees and
temporary or permanent move to lighter work;
~20~
• The maintenance of disablement statistics and registers (there are

complicated legal requirements in respect of quotas of disabled
workers and a need for 'certificates' where quota are not fulfilled
and recruitment must take place);
• Provision of financial and other support for sports, social, hobbies,
activities of many kinds which are work related;
• Provision of canteens and other catering facilities;
• Possibly assistance with financial and other aid to employees in
difficulty (supervision, maybe, of an employee managed
benevolent fund or scheme);
• Provision of information handbooks,
• Running of pre-retirement courses and similar fringe activities;
• Care for the welfare aspects of health and safety legislation and
provision of first-aid training.
The location of the health and safety function within the organization
varies. Commonly a split of responsibilities exists under which
'production' or 'engineering' management cares for the provision of safe
systems of work and safe places and machines etc.,
But HRM is responsible for administration, training and education in

awareness and understanding of the law, and for the alerting of all levels
to new requirements.
~21~
Employee education, training and development:-
In general, education is 'mind preparation' and is carried out remote from

the actual work area, training is the systematic development of the
attitude, knowledge, skill pattern required by a person to perform a given
task or job adequately and development is 'the growth of the individual in
terms of ability, understanding and awareness'.
Within an organization all three are necessary in order to:
• Develop workers to undertake higher-grade tasks;

• Provide the conventional training of new and young workers
• Raise efficiency and standards of performance;
• Meet legislative requirements (e.g. health and safety);
• Inform people (induction training, pre-retirement courses, etc.);
From time to time meet special needs arising from technical, legislative,
and knowledge need changes. Meeting these needs is achieved via the
'training loop'. (Schematic available in PDF version.)
The diagnosis of other than conventional needs is complex and often

depends upon the intuition or personal experience of managers and needs
revealed by deficiencies. Sources of inspiration include
• Common sense - it is often obvious that new machines, work

systems, task requirements and changes in job content will require
workers to be prepared;
~22~
• Shortcomings revealed by statistics of output per head,

performance indices, unit costs, etc. and behavioral failures
revealed by absentee figures, lateness, sickness etc. records;
• Recommendations of government and industry training
organizations;
• Inspiration and innovations of individual managers and
supervisors;
• Forecasts and predictions about staffing needs;
• Inspirations prompted by the technical press, training journals,
reports of the experience of others;
• The suggestions made by specialist (e.g. education and training
officers, safety engineers, work-study staff and management
services personnel).
Designing training is far more than devising courses; it can include

activities such as:
• Learning from observation of trained workers;

• Receiving coaching from seniors;
• Discovery as the result of working party, project team membership
or attendance at meetings;
• Job swaps within and without the organization;
• Undertaking planned reading, or follow from the use of self–
teaching texts and video tapes;
~23~
• Learning via involvement in research, report writing and visiting

other works or organizations.
So far as group training is concerned in addition to formal courses there

are:
• Lectures and talks by senior or specialist managers;

• Discussion group (conference and meeting) activities;
• Briefing by senior staffs;
• Role-playing exercises and simulation of actual conditions;
• Video and computer teaching activities;
• Case studies (and discussion) tests, quizzes, panel 'games', group
forums, observation exercises and inspection and reporting techniques.
POSITION AND STRUCTURE OF HUMAN RESOURCE

MANAGEMENT
Human resource management department responsibilities can be broadly

classified by:-
1) Individual,
2) Organizational, and
3) Career areas.
~24~
Individual management entails helping employees identify their strengths

and weaknesses; correct their shortcomings; and make their best
contribution to the enterprise. These duties are carried out through a
variety of activities such as performance reviews, training, and testing.
Organizational development, meanwhile, focuses on fostering a

successful system that maximizes human (and other) resources as part of
larger business strategies. This important duty also includes the creation
and maintenance of a change program, which allows the organization to
respond to evolving outside and internal influences. The third
responsibility, career development, entails matching individuals with the
most suitable jobs and career paths within the organization.
Human resource management functions are ideally positioned near the

theoretic center of the organization, with access to all areas of the
business.
Since the HRM department or manager is charged with managing the

productivity and development of workers at all levels Human resource
personnel should have access to—and the support of—key decision
makers.
In addition, the HRM department should be situated in such a way that it

is able to effectively communicate with all areas of the company.
~25
HRM structures vary widely from business to business, shaped by the

type, size, and governing philosophies of the organization that they serve.
But most organizations organize HRM functions around the clusters of
people to be helped—they conduct recruiting, administrative, and other
duties in a central location. Different employee development groups for
each department are necessary to train and develop employees in
specialized areas, such as sales, engineering, marketing, or executive
education.
In contrast, some HRM departments are completely independent and are

organized purely by function. The same training department, for example,
serves all divisions of the organization.
In recent years, however, observers have cited a decided trend toward

fundamental reassessments of human resources structures and positions.
"A cascade of changing business conditions, changing organizational

structures, and changing leadership has been forcing human resource
departments to alter their perspectives on their role and function almost
over-night,"
"Previously, companies structured themselves on a centralized and

compartmentalized basis—head office, marketing, manufacturing,
shipping, etc. They now seek to decentralize and to integrate their
operations, developing cross-functional teams….
~26~
Today, senior management expects HR to move beyond its traditional,

compartmentalized 'bunker' approach to a more integrated, decentralized
support function." Given this change in expectations,
Johnston noted that:-
"An increasingly common trend in human resources is to decentralize the

HR function and make it accountable to specific line management. This
increases the likelihood that HR is viewed and included as an integral
part of the business process, similar to its marketing, finance, and
operations counterparts. However, HR will retain a centralized functional
relationship in areas where specialized expertise is truly required," such
as compensation and recruitment responsibilities.
~27~
Human Resources Planning
The objective of human Resources management is to achieve a high level

of return on an organization investment in people. For many organization
people are the only, or the most expensive, asset upon which the success
of the enterprise is dependent.
Although most organization realize the important of this asset, some have
not put into place the infrastructure components required to manage
people in the same manner in which other assets are managed .Financial,
capital, and information resources, for example, are managed with
careful planning, monitoring, replacement, or upgrading. Often the same
cannot be said for how an organization’s Human Resources are managed.
In order to manage and nurture Human Resources, planning is required to

establish a framework in which this valuable asset will be employed. This
includes identification of objectives, values, principles, and practices to
guide the organization in its use of people. Within this framework the
infrastructure components to give managers the skills and guideline to
apply sound management principles and practices are developed.
The infrastructure is made up of a broad framework and includes such

support mechanisms as organization, performance management
processes, rewards and incentives, recruitment standards and human
resources development principles.
~28~
These in turn are supported by subsystems which include specific policies

and procedures such as recruitment procedure, compensation policies,
performance appraisal, training and development policies, legislative
compliance, communication devices, and the like.
BENEFITS OF HUMAN RESOURCES PLANNING:-
Human Resources Planning (HRP) anticipates not only the required kind
and number of employees but also determine the action plan for all the
functions of personnel management. The major benefits of human
resources planning are:-
• It checks the corporate plan of the organization.
• It offsets uncertainty and changes. But the HRP offsets

uncertainties and changes to the maximum extent possible and
enables the organization to have right men at the right time and in
the right place.
• It provides scope for advancement and development of employees

through training, development etc.
• It helps to anticipate the cost of salary enhancement, better benefits

etc.
~29~
• It helps to anticipate the cost of salary, benefits all the cost of

human resources, facilitating the formulation of budgets in an
organization.
• To foresee the need for redundancy and plan to check it or to

provide alternative employment in consultation with trade unions,
other organization and the government through remodeling
organizational, industrial and economic plan.
• To foresee the changes in value, aptitude and attitude of human

resources and to change the techniques of interpersonal
management etc.
• To plan for physical facilities, working conditions and the volume

of fringe benefits like canteen, school, hospitals, conveyance, child
care centre, quarters, company stores etc.
• It gives an idea of the type of tests to be used and interview

techniques in selection based on the lev4el of skills, qualifications,
intelligence, values, etc. of future human resources.
• It causes he development of various sources of human resources to

meet the organizational needs
~30~
• It helps to take steps to improve human resources contributions in

the forms of increased productivity, sales, turnover etc.
• It facilities the control of all the functions, operations, contribution

and cost of human resources.
Factors Affecting HRP:-
HRP is influenced by several considerations. The more important of them

are:
 Type and strategy of organization
 Organizational growth cycles and planning
 Environmental uncertainties,
 Time horizons
 Type quality of forecasting information
 Nature of jobs being filled and
 Off-loading the work
Organizatio
nal growth
cycle Environmen
Type and tal
strategy of uncertaintie
organization s
Outsourcing
Time
HRP
horizons
Nature
Type and
quality of
forecasting
of jobs
being filled
~31~
THE FOCUS OF HRM:-
Businesses and organizations rely on three major resources:
1. Physical resources, such as materials and equipment;
2. Financial resources, including cash, credit, and debt; and
3. Human resources or workers.
In its broadest sense, HRM refers to the management of all decisions

within an organization that are related to people.
In practice, however, HRM is a tool used to try to make

optimum use of human resources, to foster individual development, and
to comply with government mandates.
Larger organizations typically have an HRM department and its primary

objective is making company goals compatible with employee goals
insofar as possible. Hence, for a company to attain its goals, it must have
employees who will help it attain them.
Towards this end, R. Wayne Pace, writing in Human Resource

Development, identifies seven underlying assumptions that provide a
foundation and direction for HRM.
~32~
First is the acknowledgment of individual worth, suggesting that

companies recognize and value individual contributions.
Second is that employees are resources who can learn new skills and
ideas and can be trained to occupy new positions in the organization.
Third is that quality of work life is a legitimate concern, and that

employees have a right to safe, clean, and pleasant surroundings.
A fourth assumption is the need for continuous learning; talents and

skills must be continually refined in the long-term interests of the
organization.
A fifth assumption supporting the existence of an organized HRM within

a company or institution is that opportunities are constantly changing and
companies need methods to facilitate continual worker adaptation.
Sixth is employee satisfaction, which implies that humans have a right to

be satisfied by their work and that employers have a responsibility and
profit motivation to try to match a worker's skills with his or her job.
The seventh and final assumption is that HRM encompasses a much

broader scope than technical training—employees need to know more
than the requirements of a specific task in order to make their maximum
contribution.
~33~
HRM IMPLEMENTATION ACTIVITIES:-
To fulfill their basic role and achieve their goals, HRM

professionals and departments engage in a variety of activities in order to
execute their human resource plans. HRM implementation activities fall
into four functional groups, each of which includes related legal
responsibilities: acquisition, development, compensation, and
maintenance.
ACQUISITION:-
Acquisition duties consist of human resource planning for

employees, which includes activities related to analyzing employment
needs, determining the necessary skills for positions, identifying job and
industry trends, and forecasting future employment levels and skill
requirements. These tasks may be accomplished using such tools and
techniques as questionnaires, interviews, statistical analysis, building skill
inventories, and designing career path charts. Four specific goals of
effective human resource planning are:
1. Sustaining stable workforce levels during ups and downs in output,
which can reduce unnecessary employment costs and liabilities and

increase employee morale that would otherwise suffer in the event
of lay-offs.
2. Preventing a high turnover rate among younger recruits.
~34
3. Reducing problems associated with replacing key decision makers

in the event of an unexpected absence.
4. Making it possible for financial resource managers to efficiently
plan departmental budgets.
The acquisition function also encompasses activities

related to recruiting workers, such as designing evaluation tests and
interview methods. Ideally, the chief goal is to hire the most-qualified
candidates without encroaching on federal regulations or allowing
decision makers to be influenced by unrelated stereotypes. HRM
departments at some companies may choose to administer honesty or
personality tests, or to test potential candidates for drug use. Recruitment
responsibilities also include ensuring that the people in the organization
are honest and adhere to strict government regulations pertaining to
discrimination and privacy. To that end, human resource managers
establish and document detailed recruiting and hiring procedures that
protect applicants and diminish the risk of lawsuits.
DEVELOPMENT:-
The second major HRM function, human resource

development, refers to performance appraisal and training activities. The
basic goal of appraisal is to provide feedback to employees concerning
their performance.
~35~
This feedback allows them to evaluate the appropriateness of their

behavior in the eyes of their coworkers and managers, correct
weaknesses, and improve their contribution. HRM professionals must
devise uniform appraisal standards, develop review techniques, train
managers to administer the appraisals, and then evaluate and follow up on
the effectiveness of performance reviews.
HRM professionals must devise uniform appraisal standards, develop

review techniques, train managers to administer the appraisals, and then
evaluate and follow up on the effectiveness of performance reviews. They
must also tie the appraisal process into compensation and incentive
strategies, and work to ensure that federal regulations are observed.
Training and development activities include the determination, design,

execution, and analysis of educational programs. Orientation programs,
for example, are usually necessary to acclimate new hires to the
company. The HRM training and education role may encompass a wide
variety of tasks, depending on the type and extent of different programs.
In any case, the HRM professional ideally is aware of the fundamentals
of learning and motivation, and must carefully design effective training
and development programs that benefit the overall organization as well as
the individual. Training initiatives may include apprenticeship,
internship, job rotation, mentoring, and new skills programs.
~36~
COMPENSATION:-
Compensation, the third major HRM function, refers to

HRM duties related to paying employees and providing incentives for
them. HRM professionals are typically charged with developing wage
and salary systems that accomplish specific organizational objectives,
such as employee retention, quality, satisfaction, and motivation.
Ultimately, their aim is to establish wage and salary levels that maximize
the company's investment in relation to its goals. In particular, HRM
managers must learn how to create compensation equity within the
organization that doesn't hamper morale and that provides sufficient
financial motivation.
Besides financial compensation and fringe benefits, effective HRM

managers also design programs that reward employees by meeting their
emotional needs, such as recognition for good work
MAINTENANCE:-
The fourth principal HRM function, maintenance of human resources,

encompasses HRM activities related to employee benefits, safety
and health, and worker-management relations. Employee benefits
are non-incentive-oriented compensation, such as health
insurance and free parking, and are often used to transfer no taxed
compensation to employees.
~37~
The three major categories of benefits managed by HRM managers are:

employee services, such as purchasing plans, recreational
activities, and legal services; vacations, holidays, and other allowed
absences; and insurance, retirement, and health benefits.
Human resource maintenance activities related to safety

and health usually entail compliance with federal laws that protect
employees from hazards in the workplace. Regulations emanate from
the federal Occupational Safety and Health Administration, for
instance, and from state workers' compensation and federal
Environmental Protection Agency laws. HRM managers must
work to minimize the company's exposure to risk by implementing
preventive safety and training programs. They are also typically
charged with designing detailed procedures to document and handle
injuries.
Maintenance tasks related to worker-management relations primarily

entail: working with labor unions, handling grievances related to
misconduct such as theft or sexual harassment, and devising systems to
foster cooperation.
Activities in this arena include contract negotiation, developing policies

to accept and handle worker grievances, and administering programs to
enhance communication and cooperation.
~38~
HRM DEVELOPMENT AND IMPLEMENTATION

RESPONSIBILITIES
While most firms have a human resources or personnel department that

develops and implements HRM practices, responsibility lies with both
HR professionals and line managers. The interplay between managers
and HR professionals leads to effective HRM practices. For example,
consider performance appraisals. The success of a firm's performance
appraisal system depends on the ability of both parties to do their jobs
correctly. HR professionals develop the system, while managers provide
the actual performance evaluations.
The nature of these roles varies from company to company, depending

primarily on the size of the organization. This discussion assumes a large
company with a sizable HRM department. However, in smaller
companies without large HRM departments, line managers must assume
an even larger role in effective HRM practices.
HR professionals typically assume the following four areas of

responsibility: establishing HRM policies and procedures,
developing/choosing HRM methods, monitoring/evaluating HRM
practices and advising/assisting managers on HRM-related matters. HR
professionals typically decide (subject to upper-management approval)
what procedures to follow when implementing an HRM practice.
~39~
For example, HR professionals may decide that the selection process

should include having all candidates:-
(1) Complete an application,
(2) Take an employment test, and then
(3) Be interviewed by an HR professional and line manager.
Usually the HR professionals develop or choose

specific methods to implement a firm's HRM practices. For instance, in
selection the HR professional may construct the application blank,
develop a structured interview guide, or choose an employment test. HR
professionals also must ensure that the firm's HRM practices are properly
implemented. This responsibility involves both evaluating and
monitoring.
For example, HR professionals may evaluate the usefulness of

employment tests, the success of training programs, and the cost
effectiveness of HRM outcomes such as selection, turnover, and
recruiting. They also may monitor records to ensure that performance
appraisals have been properly completed.
HR professionals also consult with management on an array of HRM-

related topics. They may assist by providing managers with formal
training programs on topics like selection and the law, how to conduct an
employment interview, how to appraise employee job performance, or
how to effectively discipline employees.
~40~
HR professionals also provide assistance by giving line managers advice

about specific HRM-related concerns, such as how to deal with problem
employee Line managers direct employees' day-to-day tasks. From an
HRM perspective, line managers are mainly responsible for
implementing HRM practices and providing HR professionals with
necessary input for developing effective practices.
Managers carry out many procedures and methods devised by HR

professionals. For instance, line managers:
• Interview job applicants

• Provide orientation, coaching, and on-the-job training
• Provide and communicate job performance ratings
• Recommend salary increases
• Carry out disciplinary procedures
• Investigate accidents
• Settle grievance issues
The development of HRM procedures and methods often requires input

from line managers.
For example, when conducting a job analysis, HR professionals often

seek job information from managers and ask managers to review the final
written product.
Additionally, when HR professionals determine an organization's training

needs, managers often suggest what types of training are needed and who,
in particular, needs the training.
~41~
EVALUATION OF HRM METHODS
One of the most critical aspects of HRM is evaluating

HRM methods and measuring their results. Even the most carefully
planned and executed HRM programs are meaningless without some way
to judge their effectiveness and confirm their credibility. The evaluation
of HRM methods and programs should include both internal and external
assessments. Internal evaluations focus on the costs versus the benefits of
HRM methods, whereas external evaluations focus on the overall benefits
of HRM methods in achieving company goals. Larger human resource
departments often use detailed, advanced data gathering and statistical
analysis techniques to test the success of their initiatives. The results can
then be used to adjust HRM programs or even to make organizational
changes.
The authors of Human Resources Management posit

four factors, the "four Cs," that should be used to determine whether or
not an HRM department or individual program is succeeding:
commitment, competence, cost-effectiveness, and congruence. In testing
commitment, the HRM manager asks to what extent do policies enhance
the commitment of people to the organization? Commitment is necessary
to cultivate loyalty, improve performance, and optimize cooperation
among individuals and groups.
~42~
Competence refers to the extent to which HRM policies attract, keep, and
develop employees: Do HRM policies result in the right skills needed by
the organization being available at the proper time and in the necessary
quantity? Likewise, cost-effectiveness, the third factor, measures the
Fiscal proficiency of given policies in terms of wages, benefits,
absenteeism, turnover, and labor/management disputes. Finally, analysis
of congruence helps to determine how HRM policies create and maintain
cooperation between different groups within and outside the organization,
including different departments, employees and their families, and
managers and subordinates.
In addition to advanced data gathering and analysis techniques, several

simple observations can be made that provide insight into the general
effectiveness of a company's human resources. For example, the ratio of
managerial costs to worker costs indicates the efficiency of an
organization's labor force. In general, lower managerial costs indicate a
more empowered and effective workforce. Revenues and costs per
employee, when compared to related industry norms, can provide insight
into HRM effectiveness.
Furthermore, the average speed at which job vacancies are filled is an

indicator of whether or not the organization has acquired the necessary
talents and competencies. Other measures of HRM success include
employee complaint and customer satisfaction statistics, health insurance
and workers' compensation claims, and independent quality ratings.
~43~
In addition, the number of significant innovations made each year, such

as manufacturing or product breakthroughs, suggest HRM's success at
fostering an environment that rewards new ideas and is amenable to
change.
Besides evaluating these internal aspects of HRM programs, companies

also must assess the effectiveness of HRM programs by their impact on
overall business success. In other words, companies must link their
Evaluation of HRM methods with company performance to determine

whether these methods are helping their business by increasing quality,
reducing costs, expanding market share, and so forth. Ultimately,
companies must make sure that they have the right amount of properly
skilled employees performing tasks necessary for the attainment of
company goals and that greater revenue and profits result from HRM
efforts to increase the workforce and improve worker training and
motivation.
~44~
Human Resource Management (HRM) in private sector banks
INDEX
Sr.no. Particular Page no.
1 Introduction 45-46
2 Meaning of HRM in Banks 46
3 Need For HRM and Its 47

Management in banks
4 Building up efficiency in Banks with

48-50
the help of HRM
The Changing Banking Environment

5 and Role of HRM 50-52
6 Employee Turnover and 53-55

Implementation of "Exit Policy"
7 Human Resource Risk 56
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.

proper and efficient selection, training and development, is called
~45~

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
organizational effectiveness.
Meaning of “Human Resources Management” in Banks
Human resource is one of the natural resources of any country's economy.

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.
~46~

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.
 A view of the changes in the political scene in the recent past,
seeping changes is 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.
~47~
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 professionalism 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:-
~48~
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.
~49~

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 this challenge. 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.
~50~

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.
~51~

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. HRM will play a significant role in handling
situations while awarding punishments to employees without impairing
others’ efficiency.
~52~

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.
~53~

 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.
~54~

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.
~55~
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.
~56~
Case study on ICICI Bank
INDEX
Sr.no. Particular Page no.
01 Introduction of ICICI bank 57-58
02 History of ICICI bank 59-61
03 Awards & recognitions 62-63
04 Questionnaire 64-67

Introduction of ICICI bank
ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment

Corporation of India) is India's largest private sector bank by market
capitalization and second largest overall in terms of assets. Bank has total
assets of about USD 77 billion (at the end of December 2008). The Bank
also has a network of 1,449 branches and about 4,721 ATMs in India and
presence in 18 countries, as well as some 24 million customers (at the end
of July 2007). ICICI Bank offers a wide range of banking products and
financial services to corporate and retail customers through a variety of
delivery channels and specialized subsidiaries and affiliates in the areas
of investment banking, life and non-life insurance, venture capital and
asset management. (These data are dynamic.)
~57~
I HRM in private sector banks

[1]
CICI Bank is also the largest issuer of credit cards in India. . ICICI
Bank has got its equity shares listed on the stock exchanges at Kolkata
and Vadodara, Mumbai and the National Stock Exchange of India
Limited, and its ADRs on the New York Stock Exchange (NYSE).
The Bank is expanding in overseas markets and has the largest

international balance sheet among Indian banks. ICICI Bank now has
wholly-owned subsidiaries, branches and representatives offices in 18
countries, including an offshore unit in Mumbai. This includes wholly
owned subsidiaries in Canada, Russia and the UK (the subsidiary through
which the HiSAVE savings brand is operated), offshore banking units in
Bahrain and Singapore, an advisory branch in Dubai, branches in
Belgium, Hong Kong and Sri Lanka, and representative offices in
Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the
United Arab Emirates and USA. Overseas, the Bank is targeting the NRI
(Non-Resident Indian) population in particular.
ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29%
increase in total income to Rs. 9,712.31 crore in Q2 September 2008 over
Q2 September 2007. The bank's current and savings account (CASA)
ratio increased to 30% in 2008 from 25% in 2007.
~58~

History of ICICI
• 1955 The Industrial Credit and Investment Corporation of India

Limited (ICICI) was incorporated at the initiative of World Bank,
the Government of India and representatives of Indian industry,
with the objective of creating a development financial institution
for providing medium-term and long-term project financing to
Indian businesses.
• 1994 ICICI established Banking Corporation as a banking

subsidiary. Formerly Industrial Credit and Investment Corporation
of India. Later, ICICI Banking Corporation was renamed as 'ICICI
Bank Limited'. ICICI founded a separate legal entity, ICICI Bank,
to undertake normal banking operations - taking deposits, credit
cards, car loans etc.
• 2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura

was a Chettiar bank, and had acquired Chettinad Mercantile Bank
(est. 1933) and Illanji Bank (established 1904) in the 1960s.
• 2002 The Boards of Directors of ICICI and ICICI Bank approved

the reverse merger of ICICI, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, into ICICI Bank.
~59~

• After receiving all necessary regulatory approvals,
• CICI integrated the group's financing and banking operations, both

wholesale and retail, into a single entity.
• Also in 2002, ICICI Bank bought the Shimla and Darjeeling

branches that Standard Chartered Bank had inherited when it
acquired Grindlays Bank.
ICICI started its international expansion by opening representative

offices in New York and London.
• 2003 ICICI opened subsidiaries in Canada and the United

Kingdom (UK), and in the UK it established an alliance with
Lloyds TSB.
It also opened an Offshore Banking Unit (OBU) in Singapore and

representative offices in Dubai and Shanghai.
• 2004 ICICI opens a rep office in Bangladesh to tap the extensive

trade between that country, India and South Africa.
~60~

• 2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia
bank with about US$4mn in assets, head office in Balabanovo in
the Kaluga region, and with a branch in Moscow. ICICI renamed
the bank ICICI Bank Eurasia.
Also, ICICI established a branch in Dubai International Financial

Centre and in Hong Kong.
• 2006 ICICI Bank UK opened a branch in Antwerp, in Belgium.

ICICI opened representative offices in Bangkok, Jakarta, and
Kuala Lumpur.
• 2007 ICICI amalgamated Sangli Bank, which was headquartered

in Sangli, in Maharashtra State, and which had 158 branches in
Maharashtra and another 31 in Karnataka State. Sangli Bank had
been founded in 1916 and was particularly strong in rural areas.
ICICI also received permission from the government of Qatar to

open a branch in Doha.
ICICI Bank Eurasia opened a second branch, this time in St.
Petersburg.
• 2008 The US Federal Reserve permitted ICICI to convert its

representative office in New York into a branch.
~61~

Awards and recognitions for HRM
2008
Indira group of institute, pune presented indira excellence awards for

creating opportunities for youth innovatively.
Mr.K.V.Kamath, MD&CEO, ICICI Bank wins “the Asian banker

leadership achievement awards” for the Asia pacific and gulf region
2007.
2007
India time’s mindscape presented employer branding award 2007, 13th

Jan, 2007: taj land ends, Mumbai awards for talent management ICICI
Bank Ltd.hosted by: - the savile row company, London.
Bharti vidyapeeth’s and India time’s mindscape- gateway to knowledge

capital presented recruiting and staffing best in class award 1st Feb, 2007.
Taj land ends, Mumbai. Mr.k.ramkumar- group chief HR
Officer, ICICI Bank.
~62~

2004
Best HR practices award- centre of international business amity

business school. International HR summit 2004.
2003
World HRD congress: innovative HR practices award in
banking ICICI Bank Ltd Jan, 30th,31st-feb1st,2nd,2003 India.
2002
Ranked third ‘best employer’ in a campus track study amongst

the student of the best business school in India conducted by
ORGMARG.
2000
Best CEO for innovative HR practices to Mr. Kamath by world

HRD congress.National HRD award- outstanding company
award 19th Aug, 2000 for innovative HR practices.
~63~

QUESTIONNAIRE
(1) What are the functions of HR department in banks?

Ans: - a) determining human resources need
b) Attracting qualified employees
c) Developing qualified employees
d) Keeping qualified employees
(2) What is the HR planning in banks?

Ans: - planning is significant as it helps you determine future personnel
needs. And it is also a part of strategic planning and also creates highly
talented personnel.
(3) What is the recruitment procedure in ICICI bank?

Ans:- In our continuous endeavor to improve the selection process for
recruitment at all levels in ICICI Bank, we have carried out an in-depth
study of the competencies required to succeed in ICICI Bank which are
called the ICICI Bank DNA anchors. As per our research, the DNA
anchors which indicated success at the entry level in ICICI Bank are:
• Customer first
• Passion
~64~

• Dynamism
• Compliance with conscience
In order to assess the same we use a set of tools -
a. Aptitude Tests (for applicants with 0-2 years of work experience).
The tests are designed to assess basic aptitude of candidates including

numerical 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 Questionnaire.
Applicants 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.
(4) How you motivate your employees?

Ans: - we provide flexible working hours to women employees and
different facilities to them which are as follows:-
Fitness center:-
State of the art on site fitness center. It helps to refresh the mind
of the employees and also provides space from stress of work.
~65~

Health services:-
The company provides a comprehensive medical plan with an on site

doctor and dietician.
Club membership, Discount offers/schemes, Holiday homes, Scholarship

scheme, Etc…
(5) Is there any training conducted by you for better efficiency of

employees?
Ans: - ICICI bank has training centers at khandala in the state of
Maharashtra which conduct various training programs designed to meet
the changing skill requirements of its employees.
(6) Is it necessary to conduct the training program?

Ans: - yes it is very necessary to conduct the training program to
employees to develop their skills but also focus on the following:-
a) Improve the employees performance in their jobs, thus improve the

performance of the bank.
b) Allow employees you achieve professional and further educational

qualifications.
c) Allows employees to achieve promotion and allow a chosen career,

thus leading a job satisfaction.
~66~

(7) What is the nature of workforce?
Ans: - a) cultural diversity and need for unification
b) Increased in professionalisation
c) Increased formal education
d) Increased level of soft skill
e) Positive attitude
(8) What welfare and recreation facilities given by you to your

employees?
Ans: - welfare and recreation facilities includes:-
Canteens, consumer societies, credit societies, housing, legal aid,
employee counseling, welfare organization, holiday homes, etc.
(9) What are your retention strategies?

Ans: - our retention strategy includes:-
a) identification of potential talented staff
b) alternative stock options
c) quicker promotion
It has unable us to achieve higher retention rate
~67~

Analysis of Survey
After visiting the bank and after getting the answer of my question from
the manager I analyzed that:
The financial services industry in India is undergoing unprecedented
changes as deregulation gains momentum. Moreover, changing customer
needs and rapid advances in technology are continually redefining the
lines of innovation and competition. To meet these challenges the bank
has to relied extensively on Human Capital.
Their main intention is to adopt new innovation technology and to retain

the customer my providing various services.Their employees are also so
talented; manager provides them training and development programs
before joining the banks as well as their performance management are
strong enough.
The last but not the least one their selection process is one of the best
process, they not only look after the past qualification but at the same
time they check the candidate
 mental ability
 personality profiling system
 Candidate (at all level regardless of the number of years of
work experience) are also required to complete the
occupational personality questionnaire.
Therefore, the ICICI bank is one of the leading private sector banks.
~68~

CONCLUSION
The core function of HRD in the banking industry is to facilitate

performance improvement, measured not only in terms of financial
indicators of operational efficiency but also in terms of the quality of
financial services provided. Factors like skills, attitude and knowledge of
the human capital play a crucial role in determine the competitiveness of
the financial sector.
Capital and technology are replicable but not the human capital which
needs to be valued as a highly valuable resource for achieving that
competitive edge. HRM strategies include managing change, creating
commitment, achieving flexibility and improving teamwork. The other
processes representing the over aspects of HRM. i.e. recruitment,
placement, performance management are complementary.
~69~
Book Referred:-
Authors name Books name Publication
K.Aswathappa Human resource & Tata McGraw-Hill
Personnel management
P. Subba rao Human Resource Management Himalaya

Vinay v. Prabhu Human Resource Management in Vipul Prakashan
Banking & Insurance
Websites:-
A) www.hr.com
B) www.icicibank.com
C) www.management.co.in
D) www.thehindubusinessline.com
~70~

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PROJECT REPORT

“HUMAN RESOURCES MANAGEMENT

THIS IS TO CERTIFY THAT SHRI/MISS RAJNI NAIDU OF B.COM

COURSE CO-ORDINATOR PRINCIPAL

I, MISS RAJNI NAIDU, THE STUDENT OF B.COM

THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO

Primary Data Collection:-

The primary data was collected by making a visit to…..

 ICICI Bank,andheri branch

Secondary data collection:-

I, WOULD LIKE TO ACKNOWLEDGE THE FOLLOWING AS

FIRST AND FOREMOST I WOULD LIKE TO THANK MY GUIDE,

I WOULD LIKE TO EXPRESS MY DEEP SENSE OF GRATITUDE

LAST BUT NOT THE LEAST I WOULD LIKE TO THANK

1) To understand the role of HRM in banks

2) To know the functions of HRM

3) To know the need of HRM in banks

4) To know the structure and position of HR department

5) To study the Human Resources Management

6) To know the changing bank environment and role of HRM

Fast global and technological developments have made today's business

In this project it includes the focus on HRM as Human Resource

Sr.no. Chapters Page no.

01 Human Resources Management 1-44

02 Human Resources Management in Private 45-56

Sr.no Particulars Pg.no.

12 Evaluation of HRM methods 42-44

HRM in private sector banks

“Human Resources Management” (HRM) is a management

HRM involves the application of management functions and principles.

It is a series of integrated decisions that form the employment

Thus, HRM refers to a set of programmers, functions and

HRM in private sector banks

“Human resource management is planning, organizing, directing and

Thus, human resource management refers to a set of programmer,

It is concerned with the people dimensions in the management. Since

HRM in private sector banks

The success of any bank or organization largely depends on efficient

Human resources have at least two related interpretations depending on

HRM in private sector banks

The goal of HRM is to maximize the productivity of an organization by

(a) objective for which the company is established are attained

HRM in private sector banks

To achieve equilibrium between employer and employee goals and

The planning function refers to the development of human

Acquisition entails the hiring of workers most likely to help a

HRM in private sector banks

This activity also involves company efforts to control and change

Maintenance requires structuring labor relations the interaction

HRM in private sector banks

Human resource management serves these key functions:

12.Time motion study is related to H.R.Function

HRM in private sector banks

In 1776, Adam Smith wrote about the economic advantages of the

- the development of skills

- the possibility of using specialized tools.

Smith's suggestions led to many changes in manufacturing processes.

HRM in private sector banks

Every individual necessarily labours to render the annual revenue of

Adam Smith, considered by many to be the father of Capitalism, also