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CHAPTER-8

SUMMARY OF FINDINGS AND SUGGESTIONS

Organisations all over the world are rushing to implement the latest ideas in the field

of Human Resource Management in order to achieve the twin objectives of profit

maximization as well as wealth maximization. The major challenge now for banks as well as

other organisations, basically is how to develop their socio-economic architecture that

generates intellectual capital as the quintessential driver of change. Developing human

capacities is an integral element of capacity building. In fact, capacity building

initiatives are now increasingly becoming almost an index of institutional quality.

Taking the banking industry to the heights of excellence, especially in the face of

forehead-detailed emerging realities, requires a combination of new technologies, better

processes of credit and risk appraisal, treasury management, diversified product

development, training and development diversification, business process re-engineering,

internal control and external regulations and the most important of all is taking care of its

human resources.

The present study has been an attempt to make a comparative analysis of human

resource management practices relating to employees‟ recruitment, selection, promotion,

compensation packages, training and development practices in the public and private sector

commercial banks in India and the way these are linked with the employees' job satisfaction.

Here, in the first part of this chapter, findings and conclusions based on the research analysis

have been presented and in the second part some suggestions have been made in the light of

research findings.

To study the HRM policies, practices and trends with respect to recruitment, selection

and promotion, compensation, training and development in the commercial banks, secondary

data have been gathered from available sources like the published documents, such as annual

reports of the banks, manuals, office records of different Training Institutes, divisional offices

and head offices of the sample banks and from other available sources like IBA and RBI,

various journals related to the banking industry, websites etc. The secondary data related to

the trends in business per employee, profit per employee, staff strength, branches, deposits

per employee, advances per employee, cost per employee, establishment expenses per

employee etc have also been studied for the selected commercial banks with a time span

ranging from 2002-03 to 2011-12 and different statistical tools such as time series, ratios,

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mean, standard deviation, variance analysis and Compound Average Growth Rate (CAGR)

have been applied to analyse the secondary data.

A study of HRM policies and practices of the four sample banks have also been done

through „content analysis‟. The 29 different HRM areas have been identified in the sample

banks with respect to recruitment and selection, promotion, compensation, training and

development policies and practices and compared through „content analysis‟. Similarly, in

order to study and compare the HRM policies and practices of public and private sector

commercial banks with respect to recruitment, selection and promotion, compensation,

training and development, 30 different HRM areas have been identified through „content

analysis‟.

8.1 SUMMARY OF FINDINGS

The present study has been an attempt to make a comparative analysis of data on

human resource management policies and practices in the public and private sector

commercial banks in India and the way these are linked with employees' job satisfaction.

Findings of the study have been presented objective wise.

8.1.1 Findings Regarding HRM Policies, Practices and Trends in the Selected Public

and Private Sector Commercial Banks.

It is observed that on the aspects of recruitment, placement, performance

management, rewards and training and development; a radical transformation of the existing

human resource management policies and practices in the selected public and private sector

commercial banks like the seniority over performance is not the best environment for

attracting the best talent from the young competitive environment. However, recruitment

practices as well as on-the-job training and redeployment are considered as one of those

many improvements of Human Resource Management in the Indian commercial banks.

Various indicators showing the growth and development trends of the selected four

banks relating to its human resources have been discussed in terms of branch network, staff

strength, business per employee, profit per employee, deposits per employee, advances per

employee, cost per employee and establishment expenses per employee, over the period of

study. Although business in PNB is growing but still it requires focus on its business in order

to achieve ideal level and it has taken an initiative to open maximum branches. The bank

recognizes its employees as the most vital and valuable assets. It has built a track record of

exercising the best HRM practices. HRM practices in SBOP have been continuously

undertaken as a movement and direction to enable every individual as a member of an

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effective team of the banking community, to realize and activate his potential so as to

contribute to the achievement of the goals and derive satisfaction thereof. All human resource

management related interventions have been based on the philosophy of individual and

organizational development with the aim of achieving professional excellence in individual

and fostering team work.

In both the public sector banks (Punjab National Bank and State Bank of Patiala), the

HRM policies aim at creating an environment for facilitating the overall development of

people and thereby enabling them to translate their potential into role related competencies.

Both the public sector banks recognize the value of the contributions of their human

resources in achieving the corporate objectives. All human resource management related

interventions are based on the philosophy of individual and organizational development.

Moreover, both the public sector banks are likely to face challenges in the next few years,

and as such, need long-run and practically viable recruitment and selection, rewards or

compensation along with promotion policies. It is observed that the training and

development policies and practices in both the banks are very effective, and PNB has

emerged as a role model for the other public sector banks.

HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic team

committed to accomplish the vision of becoming a world-class Indian bank. With its business

philosophy based on four core values: Customer Focus, Operational Excellence, Product

Leadership and People, the bank has grown very fast aiming at exceptional quality of its

manpower and their extraordinary efforts. For this reason, the bank is hiring, developing,

motivating and retaining the best people in the industry. The HDFC Bank focuses on training

its employees on a continuous basis, both on the job and through training programmes

conducted by the internal and external faculty. The Bank has consistently believed that

broader employee ownership of its share has a positive impact on its performance and

employee motivation and retention. Continually and constantly attempts are made at all

management levels to integrate human resource strategies with the bank‟s business strategy.

As far as the Axis Bank is concerned, it has adopted a human resource policy that is

not only robust and flexible, but also aims to create and nurture a committed, motivated and

knowledgeable pool of talent. The Human Resources Management agenda of the AXIS Bank

has continuously been remained focused on creating a team of empowered employees

oriented to realize the bank's vision. With a view to promote rural talents, it recruits aspirants

from Tier-II business schools as well. Continuous training, the opportunity to work on

challenging tasks, and job rotation are part of the Bank‟s talent retention strategy. Training is

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an area of continuing focus for the Bank in order to ensure that its professional skills are

equipped to maintain high standards of customer service and are also aware of the latest

developments in their specializations by focusing on upgrading the professional skills of each

individual. The bank has a well- structured performance-linked scheme of variable pay and

employee stock options for all the employees across grades and functions.

Thus, the emerging HRM environment poses both opportunities and threats for the

public and private sector commercial banks, as well as the human resource in the changing

economic and business environment. The primary emphasis needs to be on integrating the

human resource strategies with the business strategy, above the aspects of recruitment,

placement, performance management, rewards, and training and development; a radical

transformation of the existing human resource management policies and practices in the

selected public and private sector commercial banks. Prioritizing seniority over performance

is not a good practice for attracting the best talent in a competitive environment. However,

recruitment practices as well as on-the-job training and redeployment are considered as one

of those many improvements of HR in the Indian banks.

In fact, HRM policies and practices of all the selected commercial banks in the above

background concentrated on recruiting, promoting and placing, compensating, training and

developing, and motivating employees to work for ensuring that these policies are properly

designed and implemented, thereby helping the workers to set and achieve individual and

organisational goals.

8.1.2 Findings on the Basis of Comparison of HRM Policies and Practices of Public

and Private Sector Commercial Banks.

As far as the present scenario is concerned, the banking sector in India is passing

through a transitional phase. The public sector banks are the mainstay of the banking sector in

India and account for more than three fourth of the total banking industry assets, The rapid

expansion of the private sector banks proved to be a massive source of employment for

thousands. The public sector banks find it difficult to compete with their counterpart private

sector banks. In order to compete, they needed to implement in their bank the latest

technology available as well as introduce the best Human Resource policies in order to regain

their manpower strength and retain the talents which are already present with them.

Though the public sector banks have gained market share over the last decade, but

these have not been focusing on recruitment planning, career planning, training and

development, performance-linked incentives, succession planning and grooming of leaders,

and a contingent of contented workforce as expected. A fast-track promotion policy and

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performance-linked compensation packages are missing at the planning level as well as in

real practice. The average cost per employee as well as expenses per employees for the public

sector banks have overtaken that of their private sector peers. Profit per employee in the

public sector banks is much lower as compared to the private sector banks and in the absence

of cost advantage, and the problem of lower productivity calls for an urgent human resource

transformation in the public sector banks. The public sector banks still adhere to an industry-

wide wage settlement, brokered by the Indian Banks‟ Association once in every five years.

The staff strength of the public sector banks had gone down during the period under

study due to retirements and voluntary retirement schemes, but that of the private sector

banks has gone up significantly. The business per employee has grown manifold in the past

decade, but employee strength has gone down. Another major concern before the public

sector banks is the large number of employees who are to retire in the near future. Banking

Staff Recruitment Board, a common recruitment board for the industry was dismantled and

the banks started recruiting staff at their whims and fancies. The practice of recruiting the

employees directly, even at the senior levels, by the banks at their own levels resulted in cut-

throat competition for talent and poaching of each other‟s employees within the banking

sector. The Government has recently setup another recruiting agency IBPS in order to bring

qualitative improvements in recruitment and selection policies and practices of the public

sector banks. The public sector banks in the country that account for about 70 per cent of the

industry are on a hiring spree to keep pace with their business expansion. During the last year

of the research i.e., 2011-12, hiring by the public sector banks has been quite significant as

more than 50,000 supervisory and clerical vacancies are being filled up and many more

vacancies are yet expected to be filled during the coming few years. However, a few private

banks have been remained cautious about their expansions, whereas, the recruitment outlook

of the public sector banks remains unhealthy due to significant retirements and rural

expansion plans over the recent past. Some of the private banks that have aggressively

enhanced their business, riding on the world‟s second fastest growing economy, are now

shrinking their businesses while the public sector banks are expanding by opening new

branches across the country. Similar problems in the private sector banks never prevail

because of their clear long term vision and well defined sound planning in this regard and

their recruitments and selections at all levels are always need based.

The existing promotion policies and practices in both the sectors are well defined but

still require some major changes to be done on the procedural front. Promotion tests and

interview in their contents and forms vary from one segment to another even within the one

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sector and also from one sector to another. The compensation practices of all employees and

officers in the public and private sector banks remained uniform but never linked to the

profitability, on the lines of some of the private and foreign banks. The public sector banks

have also failed to provide for their employees and bank officers better compensation

package and introduce variable pay structure like the new private sector banks having been

successful in retaining young employees by adopting these techniques. As a generally

accepted practice and despite low salary, many private sector bank employees have now

begun approaching the public sector banks looking for job security. Some of the private

banks that have aggressively grew their business, riding on the world‟s second fastest

growing economy, are now shrinking their branch networks while the public sector banks are

expanding by opening new branches across the country.

Training for the staff has been an integral part of the Indian commercial banks since

the beginning, which somehow missed the track midway and the only significance for the

training was to fill in the slots of the training programmes and keep the training centres going

by achieving the targets. As far training scenario in the private sector banks is concerned

main thrust is on e-learning and short term crash courses. Like the private sector banks, the

public sector banks have started affecting a complete overhaul of their talent assessment,

engagement programmes and a new appraisal system. The public sector banks following their

counterpart private sector banks have also begun to provide global exposure to its employees

by tying up with some of the leading international Business Schools.

In the public as well as in private sector banks, the generation difference between the

new hires and their bosses is also becoming stark, often affecting day-to-day functioning at

the banks. But the problem is not so serious in case of the private sector banks. There are now

two large groups of employees; one group includes people under 30 and the other above 50.

The reason for the mis-match is that the public sector banks failed to assess their own growth

potential, whereby created increasing cultural interaction problems between these two groups.

The public and private sector banks also differ with respect to their background and work

culture. Because these differences between the sectors hold an important factor in shaping the

work culture of an organisation, it needs to be explored how they would affect job

satisfaction as it affects their performance and commitment, which eventually influences the

banks' growth and profitability.

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8.1.3 Findings Based on the Perceptions of Bank Officers Regarding HRM Policies and

Practices in the Selected Public and Private Sector Commercial Banks.

The descriptive analysis presents a demographic profile of the respondent officers.

While using the Chi-square test, it has been observed that there exists highly significant

difference among the respondent officers belonging to different age categories, monthly

salary, gender, marital status and in case of work experience profiles in the public and private

sector commercial banks. On the contrary there is an insignificant difference among the

respondent officers‟ profiles regarding different educational qualifications categories in the

public and private sector commercial banks.

The public sector banks have either balanced manpower or under manpowered as

compared to their counterpart private sector banks which are balanced as far as their

manpower status is concerned. Presently, all the commercial banks particularly the public

sector banks are in the process of recruitment. In the public sector banks, two third of the

respondent officers stated „others‟ as reasons for the imbalanced manpower, other one third

of the respondent officers revealed that unplanned recruitment in the beginning as the second

highest reason for imbalanced manpower. However, a large majority of respondents in the

private sector commercial banks have revealed „others‟ as reasons for imbalanced manpower.

Similarly, few respondents feel external pressures, lower level of performance of existing

employees and lack of re-employment efforts as the main reasons for the imbalanced

manpower in their banks. Chi-square test shows significant difference with regard to

manpower status and reasons for imbalanced manpower.

The statement that HRM practices are the keys to success, the respondents of both the

public and the private sector commercial banks have expressed their opinion „to a large

extent‟ with insignificant difference in opinions. HRM practices are standardized „to a large

extent‟ in both the public banks and the private sector banks with an insignificant difference

in opinions. The opinions of the respondent officers as expressed on the statements that their

bank‟s recruitment and selection policies are good, fairness of modes of recruitment and

selection is considered as a prerequisite of HRM practices, show that the respondents of both

the public and the private sector commercial banks have expressed their opinions „to a large

extent‟ with significant difference in opinions of the public sector commercial banks have

expressed their opinions favouring analysis of positions and requirements before recruitment

process starts, favouring the statements „to large extent‟, while the private sector respondent

officers have expressed their opinions „to moderate extent‟ and Mann-Whitney-U-test shows

that there exist significant differences between the opinions on these statements.

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A well defined recruitment and selection system is followed, line manager and HR

managers participate, comprehensive selection process is used before rendering a decision,

unbiased tests and interviewing techniques are used, attitude and desire to work in a team and

individual as a criterion used in recruitment and selection process in their banks with t-test

indicating insignificant differences in the opinions on these statements and further the

statement that the comprehensive selection process is used before rendering a decision, with

an insignificant difference in opinions, the respondent officers of both the public and the

private sector banks revealed that they „agree‟ on these statements. The respondent officers of

the public sector banks express their opinions on the statement that valid and standardized

tests are used in the selection process, selections are based on desired knowledge, skills and

aptitude, employees are selected without any bias and employees are selected on the basis of

a strong merit criteria in the process of selection in their banks, all statements with

insignificant differences in opinions, revealed that are „agree‟. While, the private sector

respondent officers exhibit their „neutral‟ approach towards these statements. Officer

respondents of the public sector banks revealed that have „neutral‟ point of views on the

usage of the assessment centers for selection in their banks, while in the private sector banks,

respondent officers represented that they are „agree‟ with the usage of assessment centres for

selection with an insignificant difference in opinions according to Mann-Whitney-U-test.

Sector-wise analysis of bank officers‟ perceptions regarding their promotions in term

of times highlights that in the public sector commercial banks, a very large number of bank

officers have been promoted once or twice, while few of them have never been promoted.

However, in the private commercial banks, majority of the bank respondent officers have

been promoted once, twice or even thrice while a good number of the bank officers have

never been promoted. There exists a highly significant difference between the responses of

both the public and the private sector banks‟ respondent officers.

Analysis of bank officers‟ perceptions regarding the basis of their promotion shows

that many of the public sector bank respondent officers get promoted through written test and

merit criterion and very few of them have been promoted on merit cum seniority basis or on

merit and seniority basis. The private sector banks‟ respondent officers got promotions either

on the basis of written test and merit or on merit and a few have been promoted on the basis

of merit cum seniority or seniority only. None of the bank officers in both the public and the

private sector commercial banks has been promoted through any other channel. The

Pearson‟s Chi-square p-value shows that there exists a significant difference in responses of

respondents.

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Sector-wise analysis of the bank officers‟ satisfaction level regarding financial

incentives given by their banks show that large number of bank officers of both the public

and private sector banks are dissatisfied with the compensation packages offered by their

banks. In the public sector commercial banks one third are satisfied and one sixth of them are

not ready to share their opinions, on other hand, other one sixth of the bank respondent

officers in the private sector banks have not expressed anything in this regard. Interestingly,

none of the respondent officers have been traced in highly satisfied category as far as their

banks‟ compensation practices are concerned. There exists an insignificant difference in the

opinions of the bank officers of both the banking sectors.

As to how many times their pay scales have been revised, out of the total 30 officer

respondents, two third respondents of the public sector banks have revealed that their pay

scales have been revised five times during the tenure of their service and a very few have

answered that their pay scales have been revised four times and for rest of them it varies from

one to three times. Contrarily, in the private sector commercial banks, two third officer

respondents reveal that their pay scales have been revised only once. And there are very few

officer respondents whose pay has been revised two times, three times, and five times.

Whereas, no bank officer in the private sector banks has been traced whose pay has been

revised four times. The Pearson‟s Chi-square p value shows that there exists a significant

difference in bank officers‟ opinions from both the sectors in this regard.

Sector-wise analysis of bank officers‟ expectations regarding duration of revision of

their pay scales by the management reveals that a large majority of the public sector banks‟

respondent officers want their pay to be revised after every four years. Further, a few of the

bank officers expressed their opinions that their pay scales should be revised after every ten

years and every eight years respectively. On the other hand, all the private sector bank

officers reveal that they want their pay to be revised after every four years. Interestingly, in

the private sector banks none of the respondent officers falls under rest of the categories. The

Pearson‟ Chi-square test p value shows a significant difference between the opinions of both

the public and private sector bank respondent officers on this statement.

Regarding the statements that pay incentives (Is Now) such as bonus or profit sharing

are an important part of the compensation strategy, non-financial benefits are an important

part of the total pay package, a portion of the employee‟s earnings is contingent on group or

organisation‟s performance goals being achieved, now bank‟s pay policies recognize that

long-term results are more important than short-term results, now salary raises are determined

mainly by an employee‟s job performance and at present there is a large pay spread between

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low performance and higher performance in a given job, the employee benefits packages are

very generous the public sector bank respondents officers have opined that they support these

statements „to some extent‟. Mann-Whitney-U-test shows that significant differences in the

opinions of respondents of both the banking sectors regarding all the above statements.

Whereas, the opinions given by the private sector banks‟ respondent officers represent that

they rely on these statements „to moderate extent‟. Both the public and private sector banks‟

respondents have expressed their opinions „to moderate extent‟ on the statements that an

employee‟s seniority is counted for pay decisions, pay incentives are designed to provide a

significant amount of an employee‟s total earnings, and present pay system in their respective

banks has futuristic goals. Mann-Whitney-U-test shows an insignificant difference in the

opinions of respondents of both the banking sectors regarding all the above statements.

The bank officers of the public sector expect (Should Be) „to moderate extent‟ that pay

incentives such as bonus or profit sharing should be an important part of the compensation

strategy with significant difference in opinions, non financial benefits should be an important

part of the total pay package with insignificant difference in opinions and compensation

policy recognizes that long term results should be more important than short term results with

an insignificant difference in opinions while their counterparts, in the private sector banks

respondent officers expect the same „to large extent‟. The respondent officers of both the

public and private sector banks expect „to moderate extent‟ that in their bank a portion of the

employee‟s earnings should be contingent on group or organisation‟s performance goals

being achieved and there should be a large pay spread between low performance and high

performance for a given job with insignificant differences in opinions on these statements. An

officer‟s seniority should be counted for pay decisions; on this statement the public sector

banks‟ respondent officers have expressed their expectations „to a large extent‟ with an

insignificant difference in opinions. However, the private sector bank respondents

represented that they stand by this statement „to moderate extent‟. The opinions on the

statement that pay and incentives should be designed to provide a significant amount of

employee‟s total earnings with insignificant difference in opinions, employee benefits

package should be very generous with significant difference in opinions, the pay system in

their respective banks should have futuristic goals and the pay raises should be determined

mainly by an employee‟s job performance with insignificant difference in opinions indicate

that in both the public and the private sectors commercial banks the opinions given by the

respondents have expressed that their expectations are expressed „to a large extent‟ in this

regard.

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It has been traced that the differences between the respondent officers‟ perceptions

and expectations regarding all the above ten statements under compensation practices

prevailing in the public sector banks are much higher on the negative side and significant.

Thus, officers‟ expectations are much more than what they are provided as compensation by

their banks. Similarly, the difference between the perceptions and expectations of officers in

the private sector commercial banks regarding all the ten items under the compensation

practices prevailing in their banks are higher than the mean values of perceptions, which

indicates that the respondent officers are not satisfied with the compensation policies and

practices of their banks. As per the Mann-Whitney-U-test, the differences between the

officers‟ perceptions and expectations regarding all the dimensions of compensation policies

and practices are much higher on the negative side and significant.

The effectiveness of compensation practices have been measured on the basis of

perceptions of the respondent officers of both the public and the private sector commercial

banks The perception that the pay practices help their banks to have and retain (retention)

high performing officers, the officer respondents of both the public and private sector banks

have expressed the opinions that they support the statement „to moderate extent‟ with

insignificant difference in their opinions. The pay practices help banks to have employees

who are satisfied with their jobs, the pay practices make a positive contribution to the overall

effectiveness of the bank, the pay practices‟ contributions to employees‟ efficiency are

concerned, the public sector bank officers have expressed their expectations that they support

this statement „to moderate extent‟. While the private sector banks‟ respondent officers

represented that they stand by this perception „to large extent‟ as far as the pay practices‟

contributions to employees‟ efficiency is concerned. T-test with associated p-value indicates

that there exist significant differences between the opinions of the respondents of both the

sectors on all the above statements.

A large number of respondent officers in both the public and the private sector

commercial banks reveal their dissatisfaction with the non financial incentives provided by

their bank while the others stated that they are „neutral‟ and only few have occupied the

extreme options, either highly satisfied or highly dissatisfied. An insignificance difference

exists between the opinions of respondents on this issue. The opinions of both the public and

private sector bank officers have been analysed to compare the levels of interest taken by

their banks in employees‟ welfare, which reveals that majority of the public as well as the

private sector banks‟ respondent officers accept that their banks take interest in the welfare of

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their employees. Chi-square test indicates an insignificant difference between the opinions of

respondents of both the sectors.

The majority of the respondent officers of both the public and the private sector

commercial banks admitted that training and development policy exists in their banks. Chi-

square test indicates an insignificant difference between the opinions of respondents of both

the sectors. A majority of the public sector bank officers express that their training and

development policy concentrates on skill development, while some others opined that it

concentrates on ones‟ skills needed, identifying job performance and assess prospective

trainee's skills factors, respectively. Similarly, in the private sector banks, a large numbers of

respondents shared that their bank‟s training and development policy focuses on skills needed

while some others admitted that this puts emphasis on the development objectives,

identifying job performance and skills needed respectively. Chi-square test indicates an

insignificant difference between the opinions of respondents of both the sectors.

The respondent officers of both the banking sectors opined opposite to each other on

the issue that their banks adopt workbooks, exercises and activities along with evaluation and

assesses the programme‟s successes or failures and produce the training programme content

as instructional design for their Training and Development policy. There lies an insignificant

difference between the opinions of the respondent officers of both the banking sectors.

A great majority of the public sector banks‟ respondent officers replied that the

Training and Development policy is need based while only few opined that it is cadre based.

In the private sector commercial banks, two third of the respondent officers reveal that their

banks‟ training is need based and others answered that it is cadre based training policy. Chi-

square test shows that an insignificant difference exists between opinions of bank officers of

both the public and the private sector banks.

The public sector officer respondents have expressed the opinions that in their banks

training needs are ascertained by assessing the skills required to perform the job, by periodic

surveys through observation and interview and by performance appraisals. And none of them

have expressed any other options by which their training needs are assessed. However, the

private sector respondents opined that their banks‟ training needs are assessed by assessing

the skills required to perform the job and by assessing requirements of the job, while few

others shared that these are assessed on any other basis or by making performance appraisals

or by making periodic surveys through observations and interviews. Chi-square test indicates

an insignificant difference between the opinions of respondents of both the sectors.

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Regarding the modes of imparting training, only a few of the public sector banks

respondents shared that their banks impart training by vestibule school training, while others

answered that their banks adopt on the job training, off the job training and use of audio

visual as the modes of imparting training. However, in the private sector commercial banks

the majority of the respondents opined that their banks adopt off the job training as mode of

imparting training. Regarding the statements that training needs are assessed before training

is imparted, training programmes are planned in the organised way, employees are made

aware about the objectives of the training before attending it and training programme

contents are relevant to trainees‟ current job, the public sector bank respondents opined „to

moderate extent‟. However, the private sector respondents represented that they frame

opinions for this statement „to large extent‟. Chi-square test indicates an insignificant

difference between the opinions of respondents of both the sectors.

Training needs are assessed before training is imparted, the present training system is

adequate to meet the job requirements and training programme contents are relevant to

trainees‟ current job in both the public and the sector private commercial banks, resulted that

on this perception the public sector respondent bank officers support this statement „to

moderate extent‟. However, the private respondent bank officers represented that they agree

with this perception „to a large extent‟. T-test indicates that an insignificant gap lies between

opinions of the respondent officers in both the public and the private commercial banks on

this statement. Training programmes are planned in the organised way and officers are made

aware about the objectives of the training before attending it the public sector respondent

bank officers have represented that they rely on this statement „to moderate extent‟. Whereas,

the private sector respondent bank officers represented that they stand by this perception „to a

large extent‟. The T-test indicates significant gap exists between the opinions of the

respondent officers in both the public and the private sector commercial banks on this

statement.

Both the public and the private sector banks‟ respondent officers respectively

indicated „to moderate extent‟ that their bank‟s training programmes aim to achieve

individuals‟ objectives only. Similarly, respondent officers of both the public and the private

sector commercial banks have also stated that bank‟s training programmes aim to achieve

organisational objectives, „to large extent‟. The opinions of the respondent officers of both

the public and the private sector commercial banks on the perception have expressed that

their banks also use their training programmes to achieve departmental objectives „to large

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extent‟. The t-test indicates an insignificant difference between the opinions of the

respondents of both the sectors.

The respondent officers of both the public and private sector banks opined „to

moderate extent‟ that in their banks conduct extensive (T and D) programmes for officers,

banks officers at each job normally go through Training and Development programmes every

year with an insignificant difference between the respondents‟ opinions, training needs are

identified through a formal performance appraisal mechanism with an insignificant difference

between the respondent officers‟ opinions. It has been observed that the officer respondents

of the public as well as private sector banks supported the statements „to a large extent‟ that

there are formal training programmes to teach new employees the skills they needed, training

needs identified are realistic, useful and based on their bank‟s strategy and their banks have

the systems for calculating the costs and benefits of training. The perception that there are

formal training evaluation methods applied to assess the effectiveness of the training in their

banks has been supported by the officers of the public sector banks „to moderate extent‟.

Whereas, the private sector bank officers stand by the same „to large extent‟. The t-test values

for the above statements indicate insignificant differences between the opinions of

respondents of both the sectors.

The respondent officers of both the public and private sector banks opined „to a large

extent‟ that training programme are able to bring improvement in knowledge about the job,

able to achieve effectiveness of style of presentation, able to bring improvement in the

understanding about the responsibilities of the job, able to bring improvement in the type of

interaction with others, able to acquire better skills to identify the problems , able to enhance

their job satisfaction towards the job and able to increase better ability to generate solutions

to the problems in their banks. The t-test values for all the above statements indicate

insignificant differences between the opinions of the respondents of both the sectors.

8.1.4 Findings Based on the Employees’ Perceptions Regarding HRM Policies and

Practices in the Selected Public and Private Sector Commercial Banks

The descriptive analysis of demographic profiles of the respondent employees‟

indicate that the respondent employees belonging to different categories may have different

perceptions regarding „Human Resource Management Policies and Practices‟ being adopted

by their banks. The application of Chi-square test shows that a high significant difference

exists among the respondent employees‟ profiles relating to different age groups, monthly

income, gender, marital status, education, work experience, nature of jobs, previous service

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experience and duration of previous service and reasons for leaving previous service, in the

public and private sector commercial banks.

The public sector banks are under manpowered while the private sector banks are

balanced manpowered as opined by the respondent employees. Main reasons for this are

unspecified and unplanned recruitments in the case of public sector banks and in case of the

private sector banks external pressures have been responsible for imbalanced manpower.

Chi-square test signifies that a high significant difference exists among the respondents‟

opinions on these two issues.

A good number of employees in both the banking sectors admitted that they have

been recruited through recruitment agencies. The newspaper advertisements have been

described as second highest recruitment source by almost one third employees in each of the

banking sectors. In the private sector banks very few of the bank employees have been

recruited through employees referrals whereas no one has been recruited through this channel

in the public sector banks. Similarly a few employees in public sector commercial banks have

adopted internet job sites whereas, in the private sector commercial banks only five per cent

of the employees have used internet job sites as their recruitment sources. In the private

sector commercial banks only a marginal number of respondents have been recruited through

campus placements and through friends while a very few in both the banking sectors opted

for other sources. Accordingly, Chi-square test shows that a highly significant difference

exists between the responses. Indirect sources like recruitment agencies, newspaper

advertisements are the main source of recruitments in the public and private sector banks.

Written tests followed by interviews are used as methods of recruitments in both the banking

sector. Whereas, merit of qualifying written tests and interviews are used for recruitment of

employees as secondary method of recruitment in both the banking sector.

A large majority of the public and private sector bank employees hold very bad

opinions about their bank‟s recruitment and selection policy and remaining one third of the

bank employees have expressed their opinions as worst. None of the respondents of the

public sector banks have given good or bad opinions about their banks‟ recruitment and

selection policy. Chi-square test shows an insignificant difference between the opinions on

their banks‟ recruitment and selection policy.

The statements that HRM practices are key to success, recruitment and selection

policies are good, the respondent employees of both the public and private sector banks

conceded „to a large extent‟ and there exists a significant difference regarding the opinions

shared by the respondent employees. HRM practices are standardized and fairness of modes

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is considered as a pre-requisite of HRM practices, the respondent employees of both the

public and private sector banks conceded „to a large extent‟ and there exists an insignificant

difference regarding the opinions shared by the respondent employees. While respondent

employees of public sector commercial banks favour analysis of positions and requirements

before the start of recruitment process starts „to moderate extent‟ and in the private sector

banks they agree with the statement „to a large extent‟ and an insignificant difference exists

between the opinions of the respondent employees.

As far as the use of recruitment and selection system is concerned, a well defined

recruitment and selection system is followed in the banks and their banks preferably use

attitude and desire to work in a team and individual as a criterion in employees‟ selection, the

public sector bank employees remained „neutral‟ as compared to its counterpart private

sector respondent employees who „agreed‟ in favour of these statements and there is highly

significant difference between the opinions of banks employees of both the banking sectors

on these statements. Based on the analysis of weighted average of the responses given by

both the public and private sector bank respondent employees remained „neutral‟ to find

any participation of line managers and HR managers in the recruitment and selection process,

selections are made based on desired knowledge, skills and aptitudes and shows a significant

level. Regarding the use of valid and standardized tests in the selection process is good in

both the public and private sector banks, banks make use of comprehensive selection process

before rendering a decision for recruitment and selection, regarding the use of assessment

centres for selection of manpower in their banks, regarding the use of unbiased test and

interviewing techniques for selection of manpower in their banks and existence of a strong

merit criteria for employees‟ selection and employees are selected without any bias. There is

no significant difference between the opinions of employees of both the banking sectors

regarding these perceptions.

A large number of employees of both the public and private sector banks have been

promoted once or twice while even some have been promoted thrice. However, there are

some employees who have never been promoted. There exists a highly significant difference

between the responses of both the public and private sector banks. Both in the public and

private sector banks, mainly written test and merit, followed by merit cum seniority in public

sector and only merit in the private sector have been used as the basis for promotion.

As far as the financial incentives given by the banks to their employees are concerned,

the researcher found that a highly significant difference exists between responses of the

respondent employees of both the public and the private sector banks. Sector-wise analysis of

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employees‟ perceptions regarding their pay revisions in term of number of times shows that

there is highly significant difference between the responses of both the public and the private

bank respondent employees. Sector-wise analysis of the employees‟ perceptions regarding

their duration of pay revisions indicate that both the public and private sector commercial

banks‟ employees want that their salaries and pay scales be revised every four years and

while only a very few want that these to be revised six yearly or eight yearly and the analysis

further signify an insignificant difference between the responses of bank employees of both

the public and the private sector banks.

This section describes the way pay practices are currently conducted in their banks

through the employees‟ perceptions regarding various statements relating to compensation

practices prevailing (Is Now) in the sample banks. The calculations made on the responses

given by respondent employees on the statement that pay incentives such as bonus or profit

sharing are an important part of the banks‟ compensation ,non–financial benefits are an

important part of the total pay package offered by their banks , at present a portion of an

employee‟s earnings is contingent on group or organization‟s performance goals are being

achieved, currently their bank‟s pay policies recognize that long-term results are more

important than short-term results , an employee‟s seniority is counted for pay decisions, pay

incentives as given by their banks are designed to provide a significant amount of an

employee‟s total earnings, the employees‟ benefits package is very generous, , pay system in

their banks has been based on futuristic goals, pay raises are determined mainly by an

employee‟s job performance as their banks‟ compensation strategy. There exists a significant

difference between the opinions of bank employees of both the banking sectors on mentioned

statements. There exists large pay spread between low performers and high performers for a

given job in their banks, have been supported by the public sector banks‟ respondent

employees „to some extent‟ as compared to their counterpart private sector banks respondent

employees who supported this statement „to moderate extent‟. There exists an insignificant

difference between the opinions of bank employees of both the banking sectors.

Findings on the values based on sector wise analysis of responses expressed by the

bank respondent employees in terms of their expectations regarding the way pay practices

‘Should Be’ exercised to promote organisational effectiveness have been outlined here.

The expectations of the respondent bank employees in the public sector commercial

banks indicate that pay incentives such as bonus or profit sharing should be an important part

„to moderate extent‟ in their banks‟ compensation strategy, Non-financial benefits are an

important part of the total pay package, as compared to their counterpart private sector banks,

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respondent employees depicted that pay incentives such as bonus or profit sharing should be

important part, in their banks, a portion of an employee‟s earnings is contingent on group or

organisation‟s performance goals being achieved‟, employee‟s seniority should be counted

for pay decisions as an important part in their banks‟ compensation strategy, pay system has

been based on futuristic goals „to moderate extent‟ in their banks‟ compensation strategy and

pay raises are determined mainly by an employee‟s job performance in their banks‟

compensation strategy, „to a large extent‟ in their banks‟ compensation strategy. As Mann-

Whitney-U-test indicates that there exists significant difference between the opinions of the

bank respondent employees. The respondent employees of the public and private sector banks

depicted that they agree with the statement „to a large extent‟ that bank‟s pay policies

recognize that long term results are more important than the short term results, that pay

incentives are designed to provide a significant amount of an employee‟s total earnings and

there is an insignificant difference between the opinions of both the public and private sector

banks‟ respondent employees. The respondents of both the public and private sector

commercial banks express their opinions in terms of their weighted average values admitted

„to moderate extent‟ that there is a large pay spread between low performers and high

performers for a given job in their banks compensation strategy and there exists a highly

significant difference between the views shared by the bank respondent employees.

Expectations expressed regarding the statement that the employee benefits packages should

be very generous, for the employees of both the public sector and the private sector banks

opined „to a large extent‟ in their banks‟ compensation strategy. There exists a significant

difference in the opinions of both the banking sectors‟ respondent employees.

A clear difference exists between the perceptions and expectations of the respondent

employees‟ of the public sector banks regarding the 10 items under compensation practices

prevailing in the public sector banks exists. Expectations are higher than perceptions of the

public sector employees as far as compensation policies and practices are concerned. All the

difference values are negative which have further been verified by p-values at 1 per cent level

of significance. As such, it can be concluded that the differences between the employees‟

perceptions and expectations regarding all the dimensions of compensation policies and

practices covered under all the above statements are much higher on the negative side and

significant.

Similarly, a significant difference exists between the perceptions and expectations of

respondent employees in the private sector commercial banks regarding all the ten items

under the compensation practices prevailing in their bank. The results reveal that the mean

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values of expectations against all the ten items are higher than the mean values of

perceptions, which indicates that the respondent employees are not satisfied with the

compensation policies and practices of their banks. The results of all difference values are

negative which state that the private sector commercial banks should consider planning

effective compensation policies and practices to keep hold of their human resources. Thus, it

can be concluded as per the Mann- Whitney-U-test that the differences between the

employees‟ perceptions and expectations regarding all the dimensions of compensation

policies and practices covered under all the statements are much higher on the negative side

and significant.

Analysis of weighted averages based on perceptions given by the respondent

employees regarding the effects of Compensation Practices Prevailing in their banks,

generally the pay practices help their banks to have employees who are satisfied with their

jobs as an important part of their banks‟ compensation strategy, pay practices make positive

contribution to the overall effectiveness of the bank, and pay practices do contribute to

employees‟ efficiency, explain that the employees of both the public and private sector banks

expressed opinions „to moderate extent‟. There exists no significant difference between the

views shared by both the public and private sector banks‟ respondent employees.

The respondent employees of both the banking sectors have been found either

dissatisfied or indecisive and there exists an insignificant difference between the responses of

both the public and the private sector bank respondent employees on the issue of non

financial incentives. A large majority of the bank employees of the public sector banks

admitted that their bank take interest in their welfare while one fourth of the total respondent

employees admitted that their bank does not take interest in their welfare. Whereas, in the

private sector commercial banks 85 per cent of the respondent employees admitted that their

banks always take an interest in their welfare and the remaining 15 per cent said that their

banks do not take an interest in their welfare.

As far as the existence of Training and Development policy in both the banking

sectors is concerned the respondents of both the banking sectors admitted that there existed

training and development policies in their banks, and no significant difference between the

perceptions of the public and private sector bank employees was located. Nearly one half of

the respondent employees of the public sector commercial banks feel that the Training and

Development policy of their banks concentrated on development objectives and other one

third feel that the training and development policy impasses on identification of their job

performance. Very few believe that it concentrates on assessment of perspective trainee's skill

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and skills needed for it respectively. Whereas, one third respondents of the private sector

commercial banks believe that it is highly concentrated on identification of job performance.

And one forth, each of the private sector bank employees feel that their banks‟ Training and

Development policy emphasis on development objectives and assessment of perspective

trainee‟s skills respectively. Very few of the respondent employees believe that Training and

Development policy concentrates on skills needed for Training and Development. However,

the difference between the public and the private sector banks employees‟ perceptions on this

statement is significant.

A few of the public sector banks‟ respondent employees stated that their bank uses

Validation: Presenting (trying out) the training to a small representative audience

instructional design in their Training and Development policy. However, nearly one third

each of the private sector commercial banks‟ respondent employees answered that their bank

uses produce the training programme content and implement the programmes: Actually

training targeted employee group as instructional design in their Training and Development

policy. Similarly, one fourth of the private sector bank respondent employees stated that their

bank follows Workbooks, exercises, and activities as instructional design for their Training

and Development policy. A significant difference between the public and private sector

banks‟ employees‟ responses has been observed by applying Chi-square test.

Perceptions regarding methodology adopted for assessment of training programmes

the statements that training needs are assessed before training is imparted, training

programmes are planned in the organised way, employees are made aware about the

objectives of the training before attending it and training programme contents are relevant to

trainees‟ current job, the public sector bank respondent employees opined „to moderate

extent‟. However, the private sector bank respondent employees represented that they frame

opinions on same statements „to large extent‟. Chi-square test indicates an insignificant

difference between the opinions of respondents of both the sectors.

In the public sector banks, majority of the respondents opined that their banks‟

training policy is need based for them and others say that it is cadre based. However, in the

private sector banks eighty per cent respondents stated that their bank follows need based

training policy and twenty per cent say that their bank follows cadre based training policy. A

significant difference between the perceptions of the respondent employees of the public and

private sector commercial banks has been traced.

Majority of the respondent employees in both the public and the private sector

commercial banks stated that their training needs are assessed by assessing the requirements

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of job and the skills required for performing the job. The public as well as private sector

banks‟ respondent employees stated that their training needs are assessed on the basis of

periodic surveys through observations and interviews, by performance appraisal, etc. The

difference between the public and the private commercial banks‟ employees‟ opinions is

insignificant.

Both the public and private sector commercial banks impart on the job training to

their employees, along with class room training. Off the job training and vestibule school

training are rarely put in use. On the other hand, in the private sector commercial banks, a

large majority of the respondent employees stated that their banks impart on the job training

using the e-mode and through special assignments and action learning. A significant

difference exists between the opinions of employees of both the sectors regarding the modes

of imparting trainings.

Almost equal number of the public sector banks‟ respondent employees stated that in

their banks trainees are selected „on the basis of their job experience‟ or „on other basis not

covered under the questionnaire and „on the basis of their job performance‟ and „on the basis

of their qualifications‟. Whereas, in the private sector banks respondent employees stated „on

the basis of their job performance and trainees are selected in their banks „on the basis of

their job experience‟, „on the basis of their qualification‟ and „on other base not covered

under the study‟, respectively. And there is a significant difference between the respondents‟

opinions expressed regarding the basis of selection of trainees in their banks.

According to the analysis of responses of both the public and private sector banks‟

respondent employees‟ indicated „to moderate extent‟ that their banks adopt training

programmes to achieve individual objectives. The respondent employees of both the public

and private sector banks admitted that training programme in their banks are successful „to a

large extent‟ in achieving the organisation‟s objectives. Further, the respondent employees of

both the public and the private sector banks admitted „to moderate extent‟ that training

programme aims to achieve the departmental objectives in their banks.There is no significant

difference between the opinions of respondent employees of both the public and the private

sector commercial banks.

On the issue of comparing the extensive conduct of Training and Development

programmes for employees in both the public and the private sector commercial banks, the

employees‟ views indicated that the respondent employees of both the sectors agreed „to

moderate extent‟ on the statements that at each job normally employees go through Training

and Development programs every year, training needs are identified through a formal

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performance appraisal mechanism in their banks, the formal training evaluation methods

applied to assess the effectiveness of the training in their banks, their banks have the systems

for calculating the cost and benefit of training in their banks, and there lies a significant

difference among the banks respondent employees‟ opinions on these statements. The

respondent employees of the public sector banks expressed their opinions „to moderate

extent‟ over the existence of formal training programmes to teach new employees the skills

they needed in their banks, and training needs are identified are realistic, useful and based on

their bank‟s strategy, while the private sector banks‟ respondent employees „agree‟ to the

statements „to a large extent‟ and a significant difference exists among the banks‟ respondent

employees‟ opinions of both the public and private sector banks.

An analysis of employees‟ perceptions and weighted averages highlighted that the

respondent employees of the public sector banks admitted „to a large extent‟ that the training

programmes are able to bring improvements in the employees‟ knowledge about the job in

their banks, training programmes are able to bring improvement in understanding the

requirements of job in their banks, training programme are able to bring improvement in the

understanding about the responsibilities of their jobs, training programmes/practices in their

banks are able to bring better acquisition of skills to identify the problems, and the training

programme are able to bring more satisfaction towards the job. While, the private sector

banks‟ respondent employees expressed their opinions on the same statement „to moderate

extent‟ only and there exist a significant difference among the banks‟ respondent employees‟

responses of both the public and private sector banks regarding these statements. Respondent

employees of both the public and private sector banks supported the statement „To moderate

extent‟, which further shows that there exists a significant difference among the banks‟

employees that training programmes are able to bring improvement in the type of interaction

with others in their respective banks and training programme/practices in their banks are able

to bring better ability to generate solutions to a problem. There exists significant difference

among the bank respondent employees‟ of both the banking sectors.

A large majority of the respondent employees in the both the public and the private

sector commercial banks opined that training programme‟s contents, instructions etc. are

quite balanced in their banks. While, another one fourth of the respondents in both the public

and the private sector banks admitted that purely practical based training programme‟s

contents, instructions are used in their banks. And the remaining respondent employees stated

that purely theoretical contents, instructions etc., are adopted by their respective banks.

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However, a significant difference between the opinions of the respondent employees of

public and private sector banks has been observed.

8.1.5 Findings on Job Satisfaction in Relation to HRM Practices in Selected Public and

Private Sector Commercial Banks.

When the bank employees were asked to express their level of satisfaction over the

issue as to whether their pay is fair as per their work requirements or not, comparing the

salary for similar jobs in other organisations, an analysis of the perceptions of both the public

and the private sector banks‟ respondent employees indicate that their opinions fall under the

„neutral‟ category. However, it proves that there is significant difference between the

opinions expressed by both the public and private sector commercial banks‟ respondent

employees. The perceptions for the public sector bank respondent employees are „neutral‟

that their pay is enough for providing necessary things in their life and that promotions are

made on merit in their banks. Whereas, the private sector banks‟ respondent employees

represented that they „agree‟ with the statements. As t-test further establishes there lies an

insignificant difference between the opinions shared by the banks‟ respondent employees of

respective banks. Level of job satisfaction of employees on the perspective that employees

get promoted as per their qualifications and experience, the banks‟ respondent employees of

the public sector commercial banks clarify their opinions on this perception shows that they

„agree‟ with this statement. Whereas, the private sector banks‟ respondent employees

represented that they have „neutral‟ approach for the statement, which further shows that an

insignificant difference lies between the opinions shared by banks‟ respondent employees.

The opinions of the bank employees of both the public and the private sector banks

respondent employees indicate that they „agree‟ with the statement that they feel proud while

working in their respective banks, organisation treats them better than another organisation

and banks employees have full confidence in the management of their organization. As t-test

further proves that there exists an insignificant difference between the opinions shared by the

banks‟ respondent employees of the respective banks. The bank respondent employees in

both the public and private sector commercial banks have expressed their opinions, show that

they „agree‟ with this statement, which further shows that insignificant difference exists

between the opinions of the banks‟ respondent employees of respective banks on this

statement. The public sector banks respondents have indicated „neutral‟ opinions regarding

the statement. Whereas, the private sector banks‟ respondent employees indicated that they

„agree‟ with the statement that favoritism does not have any role to play in their organisation.

The opinions shared by the respondent employees of the private sector commercial banks

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have negative relative importance for this perception. The difference in opinions is highly

significant.

On the whole their employees are satisfied with general supervision in their

department and the supervisor behaves properly with the bank employees, in both the public

and private sector commercial banks‟ respondents‟ show that they have „agree‟ approach on

the statements. Further, it shows that an insignificant difference lies between the public and

the private sector commercial banks‟ respondent employees. The statement that supervisor

keeps the bank employees informed about all policies/happenings of the organisation shows

that they are „neutral‟ on this statement. Whereas, the private sector banks‟ respondent

employees represented that they „agree‟ with the statement. The p-value shows that the public

and the private sector commercial banks‟ respondent employees have significant difference

on this statement. The statement that superiors take into account the employees wishes as

well as work done in the public as well as in the private sector commercial banks, the

opinions of bank employees have represented that they are „neutral‟ on this statement. The p-

value establishes that there lies an insignificant difference between the opinions shared by

both the banking sector respondents.

The opinions shared by both the public and the private sector banks‟ respondent

employees indicated that their jobs are reasonably secure as long as they do good work,

employees‟ job has helped them to learn more skills and employees on the whole feel that

they have good prospects for advancements in their job, which have indicated that they both

„agree‟ with this statement, which further shows that there is an insignificant difference

between the public and private sector commercial banks‟ respondent employees. The

statement that their present job is as per their ability and experience, they usually feel fresh at

the end of the day's work and their bank provide them satisfactory working conditions, the

opinions expressed by the public and private sector banks‟ respondent employees have been

represented through their respective weighted average values, indicated that they have

„neutral‟ approach on this statement and an insignificant difference lies between the

responses of the public and private sector commercial banks‟ respondent employees.

This part explains the research findings regarding employees‟ level of satisfaction

with regard to co-workers‟ behaviour in their banks. The perceptions that co-workers inform

others of what happened in their department when they are not on duty, employees feel glad

to work with all their co-workers in their department, employees often ask the opinions of

their co- workers who work in their unit, communication between co-workers is free and

open, an analysis of the opinions of the respondent employees of the public and private

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sector banks‟ respondent employees have indicated that they „agree‟ on this statement and

there exists a significant difference between the opinions of the public and private sector

commercial banks‟ respondent employees. The public sector bank respondents indicate that

they are „neutral‟ on the statement that there is a high team spirit in the work group. While

the responses expressed by the private sector banks‟ respondents indicated that they „agree‟

with the statement. And further t-test establishes that there exists an insignificant difference

between the opinions of both the public and private sector commercial banks‟ respondent

employees.

The scores of the job satisfaction are skewed on the positive side, indicating thereby

that the employees of both the banking sectors possess favourable attitude towards the job. A

great majority of the respondents of both the banking sectors show „to a large extent‟ level of

job satisfaction. A moderate number of respondent employees have been found satisfied to

great extent with their jobs. None of the respondents perceived the lower levels of job

satisfaction. The general consideration is on the higher side and a negligible percentage is

concentrated on the extreme ends of the job satisfaction/dissatisfaction continuum. The

findings of the overall job satisfaction appear to be reasonably valid in view of the deplorable

socio-economic conditions of the employees and their factors influencing job satisfaction.

Here, the findings of inter sectoral analysis of the level of job satisfaction among the

bank respondent employees based on their opinions in respect of HRM practice adopted by

the public and private sector commercial banks are explained. The perception that the

recruitment and selection procedure is followed in the banks are satisfactory, promotional

policy followed by their banks provide better job satisfaction, adequate promotional avenues

are available, HRM practices and level of job satisfaction which includes training

programmes when studied together for both the public and the private sector banks‟

respondent employees have expressed that they both are „satisfied‟ with these perceptions.

There is an insignificant difference between the opinions of the bank employees of both the

public and the private sector commercial banks on this statement. As per the perception when

asked from the banks‟ respondent employees about the follow up of the performance

appraisal system in their respective banks, does their present pay give them a significant

improvement in their living conditions, „satisfied‟ with the revised pay scales offered by their

banks and satisfaction over the welfare facilities provided to them by their banks, the public

sector banks‟ respondent employees have indicated that they have expressed „neutral‟

approach on this statement, while the responses of the private sector banks‟ respondent

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employees reveal that they are „satisfied‟ with the statement as t-test value shows highly

insignificant difference between the opinions of respective respondent employees.

8.2 SUGGESTIONS

The key to the success of any organization lies in how efficiently the organization

manages its human resources. The principle applies equally and perhaps more aptly to service

institutions like the banks. The issue is all the more relevant to the public sector banks which

are striving hard to keep pace with the technological changes and meet the challenges of

globalization. Banks need to look beyond their current HR practices and achieve a

fundamental shift in their human resource management policies and practices. HRM policies

must be imaginative, innovative while at the same time, flexible to adjust with the rapidly

changing socio-economic environment. This can be realistic only when the human resources

are explicitly recognized as assets.

Changes in human resource policies should be based on the projected market potential

of the concerned bank and moreover they should have to reallocate funds towards HR

functions to prepare manpower for the future. It requires more sharing of powers with

employees than what has been conventionally in practice in the past. Identification and

acquisition of appropriate knowledge and talent have now become a must for the Indian

banking. Innovations are required to be encouraged not only in the areas of fast growing

technology but also in the human resource management.

Human resource management is an ever continuing process to ensure the development

of competence, dynamism, motivation and effectiveness of human resources in a systematic

and planned manner and the banking industry has an important role to play in this regard. The

Banks need to look beyond their current practices and achieve a fundamental shift in their

human resources management policies and practices. HRM policies must be imaginative,

innovative while at the same time, flexible to adjust rapidly and based on the projected

market potential of the concerned bank. Some important suggestions have been made on the

basis of findings of the present research work:

8.2.1 Recruitment and Selection

1. While the public sector banks are facing a crunch of manpower and they need to use

the retired people as they could be useful in brand building efforts, or perhaps, in bank‟s

financial inclusion initiatives. Banks are expected to find out the current as well as future

inventory of manpower in the following dimensions:

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I. Inventory counts- total, department, sex, age, designation, skill-wise,

experience skill, talent, ability, aptitude, knowledge.

II. Job inventory of clerks, typist, technical, sub-staff and officers-General,

technical and at different levels like Scale I to Scale VII.

III. Inventory of qualification, training and executive development.

IV. Inventory of performance

V. Inventory of potential

1. With the aim to meet the global standards and to remain competitive, both the public

and private sector banks should recruit specialists in various fields such as Treasury

Management, Credit, Risk Management, IT related services, HRM, etc. in keeping

with the segmentation and product innovation. As a complementary measure, fast

track merit and performance based promotions from within would have to be

institutionalized to inject dynamism and youthfulness in the banks‟ workforce. The

place of an experienced person could always be filled in through lateral recruitment of

a person with matching skills and experience.

2. Public sector banks by following the private sector banks‟ philosophy of growth have

exploited productivity enhancement for growth so far, but now they need to induct

new talent in large numbers to maintain growth. Recruitment machinery is required to

attract talent (as against evaluate applicants) and to retain them through well planned

HRM practices. Banks also need to explicitly tackle the generation gap. Banking

industry is expected to grow at a higher rate and to take a quantum leap forward,

which in turn requires a large number of people and considering that there are

retirements in a large number.

3. Another defining moment is being presented before the Nationalized Banks to

transform. It all begins with having a talented and efficient manpower. At this

moment banks cannot claim to have a proper manpower plan that captures the type of

people it requires, the level at which they are required, clearly defined roles for

everyone, etc. Manpower plans should follow a lifecycle approach, that is, from the

time of recruitment of an employee to his retirement.

4. Further, this needs to be integrated with the Business Plan and strategy of the bank.

Another key problem area for the public sector banks is that the kind of talent they

require. Banks need to acquire people with the right kind of talent out of same limited

talent pool that will be targeted by the public and private banks, Financial Institutions,

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Insurance, Telecom and other industries which are on fast growth track and in need of

talented manpower.

5. Banking recruitment tests do not focus on testing the psychological abilities of

candidates to ensure that only the ones with right attitude towards the job are selected.

This is why we often end up with people having brilliant minds but incapable of

actually delivering on the tasks assigned.

8.2.2 Promotion Policies

1. Banks need to deal with the problem of people who are “promotable” but not

“postable” and people who are “postable” but not getting promoted. This is because

banks have failed to discriminate between performers and non-performers. HRM

systems should initiate to appreciate performers. The current HRM set ups are unable

to discriminate and differentiate between performers and non-performers. As such,

policy of promoting the deserving and promotable human resources should be framed

on priority.

2. As the entire Indian banking industry is witnessing a paradigm shift in systems,

processes, strategies, it would warrant creation of new competencies and capabilities

on an on-going basis for which an environment of continuous learning would have to

be created so as to enhance knowledge and skills. Technology should be used to

optimize placements and maintain the skill inventory of the organization. People need

to be moved to career tracks that suit their aptitude and the organization‟s needs.

Banks should set up Career Committees to discuss people‟s career plans.

8.2.3 Compensation

Another important ingredient of HR management is reward and compensation which

at present do not have any linkage to skills and performance. A system of reward and

compensation that attracts, recognizes and retains the talent, and which is commensurate with

performance is an urgent need of the banking sector. The salary structure in the public sector

banks appears to be distorted. There has to be discrimination in salaries of people as

prevailing in the private sector banks. The right people will come only if they are paid

competitive salaries.

8.2.4 Training and Development

Training and development of human resources to handle the multiplicity of points of

critical importance in the third millennium banking industry has become a challenge with

which staff colleges and training centres of the banking system have to deal. The continuous

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introduction of new control mechanisms, as well as, reporting system in modern banking,

smoothening business cycles, changing public expectations, new trends in demographic

distribution and fast moving banking technology have made the captains of the industry sit up

and take notice of quality training inputs and specializations of personnel.

1. With the aim to make training useful and bringing it in consonance with costs

involved, it need to be meaningful, need-based, effective, broad-based and purpose-

oriented. Generally speaking need for training can be best judged by the employees

themselves or their immediate superiors who know the gaps of knowledge and skills

required or to be acquired. But in the case of specialized types of skills, it should be

left at the administrative control points to judge the training gaps and the required

manpower to fill up such gaps depending upon the overall HR policy

2. HR departments need new technology and skills in every field of banking and non

banking operations. Top management must begin by challenging their own mindset.

As such, massive re–skilling is required at each level for the banks to move from

predominantly back office roles to predominantly sales and service roles.

3. Banks need to create their own universities and business schools with a very diverse

range of programmes for each level in hierarchy round the year. Banks must start with

credible target setting, group based incentive systems, appraiser training, and HR

process discipline system at the grass root level.

4. The nature of business requires massive re-skilling of the existing workforce and

continuous skill up-gradation. There needs to be discrimination in the training that

each employee has to be provided, based on his or her requirements and the need of

the institution, not as a routine, not as a measure of reward alone. Thus, the training

system need to focus on strengthening on strengths of each individual, branch and

cluster of branches in line with the goal oriented needs of individuals along with their

team leaders.

8.2.5 Job Satisfaction

1. An equally important issue relevant to HRM is to create a conducive working

environment in which the human resources can take commercial decisions judiciously

and feel satisfied. This calls for a re-look into the HR system as it exists today.

Manpower in the banks comprises of the majority of staff who is younger in average

age, needs to be energized with suitable engagement interventions and incentive

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programmes. The best development of people is through empowerment. People at all

levels in the organization must feel empowered.

2. The secret of any effective HRM that it should be objective and transparent. These

traits are essential for the manpower to repose trust in the organization‟s systems and

processes. HRM function to become effective it must be based on the trust and

confidence of its constituents.

3. Communication with employees is a vital part of the HRM as it helps enhance

transparency in HRM practices, thereby imparting credibility to them. When dealing

with human beings, it is important to be objective, transparent and non-discriminatory

and this must be effectively communicated.

8.2.6 Downsizing HR Cost

New HRM practices should be utilized to reduce employee share of total costs. Over

the last 10 years the average cost per employee in the public sector banks surpassed the new

private sector banks. With four decades of legacy to overcome, the solution does not lie in

blind adoption of HR practices from the private sector, which requires very careful

reconsideration of:

Instituting discipline and

Enhancing human resources‟ motivation.

In the ultimate analysis, the success of the banking sector in managing the human

resources commensurate with the effort that is put into this vital area. The banking industry

has an important role to play in developing and effective management of human resources.

There are several dimensions to this issue such as recruitment and selection, training re-

skilling of employees, performance measurement, promotion policy, transfer policy, talent

management, communication, job satisfaction and working environment, etc. As such, human

resources management is a continuous process to ensure the development of competence,

dynamism, motivation and effectiveness of human resources in a systematic and planned

manner.

8.3 AGENDA FOR FUTURE RESEARCH

The present research work assessed only the employees‟ recruitment, selection,

promotion, compensation packages, training and development practices and job satisfaction

and other areas of interest like performance appraisal, job commitment, strategic HRM,

employees‟ productivity. HRM effectiveness, work-life-balance, work-life culture, work-life

effectiveness, industrial gaps, employees‟ turnout, performance appraisal, productivity and

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efficiency of human resources, labour welfare with respect to the Indian banking sector, etc.,

have not been included in this study. There is ample scope for undertaking further research on

these issues in different industries and service sectors in India and abroad. Even inter-sectoral

and cross-nations studies can also be initiated in these areas.

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