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State Bank of India – The VRS Story. By: Harshala Salunke (Roll No.86) Mahesh Toraskar (Roll No. 112). Site Map. Overview Competition Right sizing Strategy (VRS) Reason for redesigning the VRS Post VRS Scenario Consequences Conclusion. Overview. Origin – Establishment 1806 - PowerPoint PPT Presentation
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State Bank of India – The VRS Story
By:Harshala Salunke (Roll No.86)Mahesh Toraskar (Roll No. 112)
Site Map
Overview Competition Right sizing Strategy (VRS) Reason for redesigning the VRS Post VRS Scenario Consequences Conclusion
Overview Origin – Establishment 1806 State bank group 1-State Bank of Bikaner and Jaipur (SBBJ)
2-State Bank of Hyderabad (SBH)3-State Bank of Indore (SBIR) 4-State Bank of Mysore (SBM) 5-State Bank of Patiala (SBP) 6-State Bank of Saurashtra (SBS) 7-State Bank of Travancore (SBT)
Overview
SBI India’s largest public sector bank
In terms of—Reach-Network of branches Customer Base-RevenueExperience-Workforce
Services Offered
Paradigm Shift
Technological Advancements -Computerization -Internet Banking -ATM’s Banking Dynamics
Competition
Comparison between SBI & some NPBs. Bank NPAs /NET
AdvancesProfit per employee(Rs.in mn)
SBI 7.18% 0.43
HDFC 0.77% 0.96
UTI 4.71% 0.69
ICICI 1.53% 0.78
GTB 0.87% 1.2
IDBI 1.95% 1.15
Right sizing Strategy (VRS)
To protect business To remain profitable To reduce cost of operations To get rid of the dead woods
VRS Package & response Eligibility – 15 Years of service /
greater than 40 years as on March 31,2000
60 Days of Salary for every completed year of service or salary to be drawn by for the remaining period of service whichever is lower.
Total 35,000 Applications 19,295 were officer ( 33 % of Total Officers)
Reason for redesigning the VRS
Reason To restrict the huge out flow of officers Competence gain by competitor To maintain balance between workforceProcess Fixing age bar (increased to 55yrs from 40 Yrs)
Eligibility criteriaCriticism Formation of SBIVRS optee Officers Association
Post VRS Scenario
SBI merge 440 loss making branches Reduced regional offices from 10 to 1 or 2 A single officer had to take care of 3 or 4
branches Acute manpower shortage in departments
like internal audit, monitoring, inspection of borrowers
Lost experts to competitors
31-Mar-01 31-Mar-00 % changeOfficers 52,558 59,474 -11.63%Clerical 103,993 115,424 -9.90%Subordinate 53,729 58,535 -8.21%Total 210,280 233,433 -9.92%
Consequences
VRS outcome
Stress Among employee
Required more Working capital
Reason
POOR HR POLICY
Conclusion
SBI objective of VRS were defeated1) To get rid of the dead wood2) Improve functioning of organisation The VRS strategy demoralized and
demotivated the existing employee by fear of increasing work load
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