The Importance of Strategic Human Resource Management Practices in Banking Sectors

 

Strategic human resource management is a process that helps the human resources department maximizes the potential of its workforce through strategic planning, talent management, leadership development, organizational design, and performance management.

In the past, strategic HR management was an administrative function. Today, HR managers play a critical role in ensuring that the organization has the right people that help improve business performance and ensure that it delivers on its mission.

It means that HR professionals need to understand its goals and objectives. How they can best help the organization achieve those goals, and what actions will allow them to do so. This article will help you better understand what strategic human resource management is and how a smart plan can bring tremendous value to the organization. (Hr.university, 2023)

Strategic Contingency Theory

One of the HR theories is strategic contingency theory. The second one among the human resource management theory and practice is strategic contingency theory, which, as the name suggests, is based on two concepts i.e. ‘Contingency’ and ‘Strategic’ aspect of contingency.

A Contingency is a need for different tasks of a subunit in an organization on which tasks of other subunits create an effect. This contingency becomes strategic once other subunit starts controlling more contingencies and becomes powerful in an organization.

As per the Strategic contingency theory, a leader becomes a central part of an organization due to his/her unique skills to solve the biggest HR challenges which others are unable to solve. Too much dependency lies on a leader so he/she is not easily replaceable. (Peoplehum, 2023)

“Organizations can be described as a collection of departments or functions that align together to cope with uncertainty.” (Hickson, 1971)

Advantages of Contingency Approach to Management

·         Contingency approach is dynamic in nature. So, it changes according to the situations. It allows managers to change the policies according to the situation.

·         Contingency approach helps the manager to enhance their leadership and decision-making skills.

·         Contingency approach provides options to the employees that help them to grow and share their ideas to the business.

·         It helps to design the organizational structure and plan the information decision systems. (commercemates, 2023)

Disadvantages of Contingency Approach to Management

·         Contingency approach has a complex approach. The suggestion of the approach is very simple but when it comes to practical it becomes more complex.

·         Contingency approach is basically reactive in nature. Sometimes the handling the situations become hard for the manager.

·         Contingency approach suffers from inadequately of literature. It is not sufficient to say that ‘a managerial action depends on the situation.

The NDB bank strategy is clearly linked to the individuals' performance in achieving the Bank's strategic goals, and is evaluated via a robust performance management system using balanced scorecard. (ndbbank, 2017)

NDB bank has a better strategic resource management that will leads to the growth of the organization, where the management of the organization provides the opportunities for the employee to attend in their carrier within different aspects. This means the organization promote their employees to develop their academic and professional aspects by using the organizational resources. This will lead to the growth of the organization, where the knowledge regarding the banking field will flow into the business and it will create innovative business ides to achieve the organizational success. And also the NDB bank provides training and development activities to their employees by utilizing the organizational resources. By using this technique, the utilized amount by the organization will return as the knowledge of the employees, and then it will make the employees more knowledgeable and more technical about the job that the particular employee performs. By this conduct the company can achieve their growth. NDB bank will stimulate the employees through motivating them and through introducing some monetary benefits. This will lead to a certain loyalty of the employees toward their organization and the employees will tend to perform their job efficiently and effectively without harming to the organizational resources.

NDB is a leading financial institution in Srilanka and they have recorded profits in past consecutive years, in the past few year this financial institution has used strategic management theories to maintain their vision and mission stable. The company has also used the competitive advantage to stay on with the rivals and to attract customers. NDB has used the welfare management strategies, customer relations with the combination of strategic human resource management to achieve the reputation over the society and to face the rivalry successfully (Bank, n.d.). They have used the employees to make the decision of the company, they have introduced some monetary and non-monetary incentives to employees to perform better within their job and through the motivation the potential abilities of the employees have been generated to perform well on behalf of the organization. The employees commitment towards the organization Is the main strength of the company and they have used the human resource strategies with a proper utilization and a proper accomplishment to achieve the targets of the organization.

Referances

commercemates. (2023). Retrieved 04 06, 2023, from https://commercemates.com/advantages-disadvantages-contingency-approach/

Hickson, D. (1971). Studiousguy. Retrieved 04 24, 2023, from Studiousguy: https://studiousguy.com/strategic-contingency-theory/#:~:text=Hickson's%20concept%20is%20based%20on,another%20subunit%20in%20an%20organization.

Hr.university. (2023). Retrieved 04 21, 2023, from Hr.university: https://hr.university/shrm/strategic-human-resource-management/

ndbbank. (2017). Retrieved 04 24, 2023, from https://www.ndbbank.com/annual-report/2017/management-discussion-and-analysis.humcap#:~:text=OUR%20APPROACH%20TO%20HUMAN%20CAPITAL%20MANAGEMENT&text=Employees%20are%20also%20governed%20by,conflicts%20of%20interest%20among%20others.

Peoplehum. (2023). Retrieved 04 24, 2023, from Peoplehum: https://www.peoplehum.com/glossary/hr-theories

 

 

Human Resource Practices in the Banking Sectors

 

Human resource management is the practice of supporting and managing employees through every aspect of their jobs, from recruitment and hiring to professional development and retirement benefits. HR specialists have avarity of day-to-day activites associated with the areas they work on and oversee. In all that they do, HR professionals must have strong interpersonal skills, since they are in charge of working directly with employees and managers. Human resource employees must also have great organizational skills, as they often juggle multiple duties at once. In addition, they need to clearly understand their organization’s values to be able to effectively advance them. (whatishumanresource, 2023)

The Importance of Human Resource Practices

The role of HRM practices is to manage the people within a workplace to achieve the organization's mission and reinforce the culture. When done effectively, HR managers can help recruit new professionals who have skills necessary to further the company's goals as well as aid with the training and development of current employees to meet objectives.

A company is only as good as its employees, making HRM a crucial part of maintaining or improving the health of the business. Additionally, HR managers can monitor the state of the job market to help the organization stay competitive. This could include making sure compensation and benefits are fair, events are planned to keep employees from burning out and job roles are adapted based on the market. (Techtarget, 2023)

Banks,   in   the   service   industry,   delivers   its service   across   the   counter   to   the   ultimate customer. The activities of banking industry are all about “relationship”. Hence, banking industry has to provide better services with a smile to the customers in order to cultivate and maintain long lasting   relationship   with   their   customers. Notwithstanding   the   level   of   technology, banking is primarily a   labor   intensive service sector. Hence it will not be possible for the banks to   sustain   effectiveness   unless   human   resource management is given prime importance because the technology is only an aid to human effort and not a substitution thereof. If the technology is the equalizer,   then   the human capital shall be the differential in future. (Srinivasan.P.T, 2009)

The   Human   Resources   are   the   most important element   for   the   progress of   banking.   Though technology can replace manual intervention, the thinking process   is   the   exclusive preserve   of human   beings.   With   changing   times   and technology, banks would require employees with special skills in   the   areas of risk management, treasury,   product   development,   customer relationship   management   and IT services.  The technology   can improve   speed and quality   of performance,   but   at   the   same   time   it   can   also unleash the risk factor. It is rightly said: “We are trying to apply third generation ideas on second generation organizations which are unfortunately run   by   first   generation   managers”. (Srinivasan.P.T, 2009)

Based on NDB bank HR processes are governed by a comprehensive suite of policies and standards which ensure the equitable treatment of all employees. The policies in place cover aspects such as recruitment, training and development, performance management, compensation and benefits, industrial relations, occupational health and safety and administration matters. HR practices extend beyond the legal requirements to embrace industry best practice. Employees are also governed by a Code of Conduct which outlines the professional and ethical conduct that is expected of employees including general conduct, competence, confidentiality, handling of material information and conflicts of interest among others. (ndbbank, 2017)

Benefits of Human Resource Management

Human Resource Management (HRM) helps in estimating the right number of people required for carrying out the necessary activities of an organization. It analyses different work positions within a business for identifying the skill sets needed for such positions. Proper information regarding job designations helps in acquiring the right peoples.

It enables business in hiring skilled and qualified workforce by creating a large pool of competent peoples. Human Resource Management conducts whole recruitment process of an organization in accordance with the requirements of job positions.

Human Resource Management plays an efficient role in retaining skilled employees for a longer term within an organization. It monitors working environment provided to workers and ensures that they get hygienic working place, better remuneration, extra benefits and facilities. This leads to long term associations of workers with organization. 

Human Resource Management influences the overall productivity and profitability of a business organization. It is the one which monitors the allocation of all resources and ensures that they are full utilized with minimum wastage. Human Resource Management matches right person with right job which improves the effectiveness of an organization.

Motivation of employees towards their roles is must for achieving the desired goals and objectives. Human Resource Management motivates workforce by rewarding them as per their performance and providing welfare facilities. It examines their output level for deciding their incentives which boost the overall morale of workers.

HRM focuses on establishing good relations among management and labors for ensuring continuity of business. It provides fair remunerations to workers and take cares of all their necessities. Human Resource Management builds up better coordination in between employer and employees by considering their ideas and suggestions in policy making. (commercemates, 2023)

Referances

(2023). Retrieved 04 20, 2023, from whatishumanresource: https://www.whatishumanresource.com/human-resource-management

commercemates. (2023). Retrieved 04 22, 2023, from https://commercemates.com/advantages-disadvantages-human-resource-management/

ndbbank. (2017). Retrieved 04 22, 2023, from ndbbank: https://www.ndbbank.com/annual-report/2017/management-discussion-and-analysis.humcap#:~:text=OUR%20APPROACH%20TO%20HUMAN%20CAPITAL%20MANAGEMENT&text=Employees%20are%20also%20governed%20by,conflicts%20of%20interest%20among%20others.

Srinivasan.P.T. (2009). Researchgate. Retrieved 04 22, 2023, from Researchgate: https://www.researchgate.net/publication/229100744_HUMAN_RESOURCE_MANAGEMENT_PRACTICES_IN_SRI_LANKAN_AND_INDIAN_PUBLIC_SECTOR_BANKS_AN_EMPIRICAL_COMPARISON

Techtarget. (2023). Techtarget. Retrieved 04 21, 2023, from Techtarget: https://www.techtarget.com/searchhrsoftware/definition/human-resource-management-HRM

The Impact of Work-Life Balance on Job Satisfaction on Banking Sectors

 

Work-Life Balance

Work-life balance is an aspect of employee well-being related to the employee's ability to manage both personal and professional responsibilities with adequate time for rest and leisure. Each individual may define his or her ideal work-life balance differently.

Importance of Work-Life Balance

Working on a job for a company and making a career can be an extremely time consuming duty for any employee. Employees are busy at their offices throughout the day and sometimes even on weekends. This gives them very little time to interact with their family. Because of high pressure of work, often family members get neglected. Also, stressful jobs cause the health of employees to deteriorate. This is where work life balance come into the picture. Work life balance concept allows an employee to maintain a fine balance in the time he or she gives to work as well as to personal matters. By having a good balance, people can have a quality of work life.

This helps to increase productivity at workplace as the employee is relaxed about his personal commitments. It also allows the employee to give quality time with family to spend vacations, leisure time, work on his/her health etc. Hence work life balance is extremely important for employees and increases their motivation to work for the company.

The below image depicts a work life balance scenario, where an employee has to balance his/her life between personal (family, friends & self) and professional (job, career) commitments. (mbaskool, 2023)

Job Satisfaction

Job satisfaction can be defined as an employee is said to be satisfied from his/ her work when he/she feels comfort in while working in the organization. Kamal and Sengupta (2008) defined the term satisfaction as a simple feeling/state accompanying the attainment by an impulse of his/her objectives and job satisfaction therefore, refers to ones view of favorableness of his/ her work. According to Opatha (2009), Job satisfaction means, “the degree of enjoyment an employee feels towards his job being performed”.

Based on the banking sectors there are more competitors in the banking industry, compared to other sectors. So when the employees working in the banking sectors they will consider as highly stress full. So the organization keep their employees satisfied their work.

A flexible working environment allows employees to balance personal and professional responsibilities. The banking sector which comes under service sector completely depends on customers and therefore, they treat their customers as kings. In order to retain the customers, the banks should provide a quality service Therefore, the employees especially managers, should be motivated by the management to get positive involvement to achieve bank’s target. (Esther, 2022)

High quality of Work Life Balance will improve the Job satisfaction and vice versa. The Work Life Balance and the Job Satisfaction of managerial level employees of NDB Bank are at lower level. Flexible Work Life Balance initiatives should be designed by the management to help the employees to balance their Work and Personal Life. As well they should increase the intrinsic aspects of Job Satisfaction which is how people feel about the nature of the job tasks themselves and on the other hand extrinsic Job Satisfaction is how people feel about aspects of the work situation that are external to the job tasks or the work itself. If employees feel that that they are able to balance their Work and Life they will be highly satisfied with their job and it will lead to high productivity and High profitability of the bank. Hence, “Work Life Balance is not a problem to be solved but an ongoing issue to be managed”.  (Sangarandeniya, 2015)

Long working hours, marital status, and salary packages, if favorable, can assist many working women in taking care of their partners, children, and other responsibilities, which could lead to a happy and successful personal life. On the contrary, if WLB is not given due attention, it becomes nearly impossible for women working in the banking sector to successfully lead a personal life. . Consequently, personal life sometimes needs to be sacrificed at the cost of professional life. Therefore, our study recommends that women who are financially well compensated can sacrifice their personal life to some extent. On the other hand, it can be categorically stated that WLB among working women is imperative with the growing need for women to work. Hence, organizations must pay more attention to WLB issues and formulate new and favorable policies, especially for working women, so as to improve their living conditions in both their professional and their personal life. (Khan, 2022)

References

Esther. (2022, 06 21). frontiersin. Retrieved 04 27, 2023, from https://www.frontiersin.org/articles/10.3389/fpsyg.2022.906876/full

Khan, S. (2022). MDPI. Retrieved 04 25, 2023, from Administrative Sciences: file:///C:/Users/asus/Downloads/admsci-13-00007%20(1).pdf

mbaskool. (2023). Retrieved 04 23, 2023, from mbaskool: https://www.mbaskool.com/business-concepts/human-resources-hr-terms/7045-work-life-balance.html

Sangarandeniya, V. (2015, 04). pdfs.semanticscholar. Retrieved 04 06, 2023, from pdfs.semanticscholar: https://pdfs.semanticscholar.org/32ad/8be650ba80a931fcfdcfaf186ab46cffd010.pdf