A WINTER RESEARCH PROJECT REPORT ON

EFFECTIVENESS OF HUMAN RESOURCE MANAGEMENT PRACTICES IN BANKING (HDFC) IN MORADABAD

Submitted in partial fulfillment of the requirement for the award of degree

Of MASTERS OF BUSINESS ADMINISTRATION SESSION (2011-2013)

SUBMITTED TO:Ms. Megha Bhatia IFTM UNIVERSITY MORADABAD

SUBMITTED BY:Name: Km. Shaista Aqil Class: MBA B College Roll No. 11021083

IFTM UNIVERSITY MORADABAD

ABSTRACT

Effective management of human resources play a vital role in sound management of banks as human resource management is a central sub system of modern management system. This truism is well recognised by even market economies of India. Management of human resources, adaptation to any kind of change and effective functioning of banks are possible only when human resources are developed. Thus, HRD facilitated for all round development of banks in addition to allowing them to be dynamic and responsive to the environmental changes. The study on Human Resource Development in Banks, under present economic scenario in the country is essential to understand banks present HRD philosophy, practice and outcome with a view to offer suggestions for formulation of right philosophy and practice of HRD in Banks. The present study has been undertaken in view of the absence of systematic studied on the subject. Nationalization has changed the complexion and dimensions of Commercial Banking in India. It helped to hasten the pace of geographical and functional diversification. The new dimensions have placed the varying responsibilities on the shoulders of commercial banks such as expansion of branch offices to unbanked and remote rural areas on a massive scale so as to cover small scale sector, cottage and rural industries, self employed persons, artisans, weaker sections of the society, small traders and other persons of small means. The study covers all the important areas of human resource development in banks. These areas include conceptual clarification about human resource and human resource development in banks, essentials of HRD, the sub-system of human resource development like performance appraisal, training, management development, career planning and development, organization development, participative management, quality circles etc. These primary areas of human resources development will be studied thoroughly to the maximum extent through the means of discussion, interviews, reports, accounts, observations etc. Key Words: Dimension, conceptual, career planning
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INTRODUCTION

Human resources is a term used to refer to how people are managed by organizations. The field has moved from a traditionally administrative function to a strategic one that recognizes the link between talented and engaged people and organizational success. The field draws upon concepts developed in Industrial/Organizational Psychology and System Theory. Human resources has at least two related interpretations depending on context. The original usage derives from political economy and economics, where it was traditionally called labor, one of four factors of production although this perspective is changing as a function of new and ongoing research into more strategic approaches at national levels. This first usage is used more in terms of 'human resources development', and can go beyond just organizations to the level of nations [2]. The more traditional usage within corporations and businesses refers to the individuals within a firm or agency, and to the portion of the organization that deals with hiring, firing, training, and other personnel issues, typically referred to as 'human resources management'. This article addresses both definitions. Management Human resource management's objective, on the other hand, is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers in a corporate context to conduct these activities in an effective, legal, fair, and consistent manner. Key functions Human Resource Management serves these key functions:

1. Recruitment & Selection 2. Training and Development (People or Organization) 3. Performance Evaluation and Management 4. Promotions/Transfer 5. Redundancy 6. Industrial and Employee Relations 7. Record keeping of all personal data. 8. Total Rewards: Employee Benefits & Compensation 9. Confidential advice to internal 'customers' in relation to problems at work 10. Career development 11. Competency Mapping (Competency mapping is a process an individual uses to identify and describe competencies that are the most critical to success in a work situation or work role.) 12. Time motion study is related to HR Function 13. Performance Appraisal Modern analysis Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. The International Labour Organization also in 2001 decided to revisit, and revise its 1975 Recommendation 150 on Human Resources

Development. One view of these trends is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can develop skills and experience in various ways, and move from one enterprise to another with little controversy or difficulty in adapting. Another view is that governments should become more aware of their national role in facilitating human resources development across all sectors. Labour mobility An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital. The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts. An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes

the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society. In a series of reports of the UN Secretary-General to the General Assembly [e.g. A/56/162 (2001)], a broad inter-sectoral approach to developing human resourcefulness [see United Nations Expert Meeting on Human Resources Development. `Changing Perspectives on Human Resources Development. ST/TCD/SER.E/25. June 1994]
[4]

has

been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement (Lawrence, J.E.S.) Perceptions Terms like "human resources" and "human capital" may be perceived as insulting to people. They create the impression that people are merely commodities, like office machines or vehicles, despite assurances to the contrary. Corporate management In the very narrow context of corporate "human resources" management, there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift through the human capital point of view to an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity, their social

connections, and in some cases even their pets and children, and alter the character of a workplace. The term corporate culture is used to characterize such processes at the organizational level. The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless. Yet the term survives, and if related to `resourcefulness', has continued and emerging relevance to public policy. In general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity. So one interpretation is that "firm-specific human capital" as defined in macro-economics is the modern and correct definition of "human resources" - and that this is inadequate to represent the contributions of "human resources" in any modern theory of political economy. Human resources management trends and influences In organizations, it is important to determine both current and future organisational requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers. The external factors are those largely out-with the control of the organization and include issues such as the economic climate, current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal

influences are broadly within the control of the organization to predict determine and monitor, for example the organizational culture underpinned by management behaviours (or style), environmental climate and the approach to ethical and corporate social responsibilities. Major trends In order to know the business environment in which any organization operates, three major trends should be considered: Demographics the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc. Diversity the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "baby-boomers" or older employees in comparison to thirty years ago. stankein advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc. Skills and qualifications as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for the jobs), employers will have to compete for employees by offering financial rewards, community investment, etc.

Individual responses In regard to how individuals respond to the changes in a labour market the following should be understood: Geographical spread How far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post. Occupational structure The norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed). Generational difference Different age categories of employees have certain characteristics, for example their behavior and their expectations of the organization. Framework Human Resources Development is a framework for the expansion of human capital within an organization or (in new approaches) a municipality, region, or nation. Human Resources Development is a combination of training and education, in a broad context of adequate health and employment policies, that ensures the continual improvement and growth of both the individual, the organisation, and the national human resourcefulnes. Adam Smith states, The capacities of individuals depended on their access to

education. Human Resources Development is the medium that drives the process between training and learning in a broadly fostering environment. Human Resources Development is not a defined object, but a series of organised processes, with a specific learning objective (Nadler,1984)[7] Within a national context, it becoms a strategic approach to intersectoral linkages between health, education and employment.[8] Structure Human Resources Development is the structure that allows for individual development, potentially satisfying the organizations, or the nation's goals. The development of the individual will benefit both the individual, the organization, or the nation and its citizens. In the corporate vision, the Human Resources Development framework views employees, as an asset to the enterprise whose value will be enhanced by development, Its primary focus is on growth and employee developmentit emphasises developing individual potential and skills (Elwood, olton and Trott 1996) Human Resources Development in this treatment can be in-room group training, tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a desired outcome that will develop the individuals performance. At the level of a national strategy, it can be a broad intersectoral approach to fostering creative contributions to national productivity [10] Training At the organizational level, a successful Human Resources Development program will prepare the individual to undertake a higher level of work, organized learning over a given period of time, to provide the possibility of performance change (Nadler 1984). In these settings, Human Resources Development is the framework that focuses on the organizations competencies at the first stage, training, and then developing the employee,

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through education, to satisfy the organizations long-term needs and the individuals career goals and employee value to their present and future employers. Human Resources Development can be defined simply as developing the most important section of any business its human resource by, attaining or upgrading the skills and attitudes of employees at all levels in order to maximise the effectiveness of the enterprise (Kelly 2001). The people within an organization are its human resource. Human Resources Development from a business perspective is not entirely focused on the individuals growth and development, development occurs to enhance the organization's value, not solely for individual improvement. Individual education and development is a tool and a means to an end, not the end goal itself. (Elwood F. Holton II, James W. Trott Jr)[11]. The broader concept of national and more strategic attention to the development of human resources is beginning to emerge as newly independent countries face strong competition for their skilled professionals and the acbanking brain-drain they experience. Recruitment Employee recruitment forms a major part of an organization's overall resourcing strategies which seek to identify and secure the people needed for the organisation to survive and succeed in the short to medium-term. Recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all levels. To be effective these initiatives need to include how and when to source the best recruits internally or externally. Common to the success of either are; well-defined organisational structures with sound job design, robust task and person specification and versatile selection processes, reward, employment relations and human

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resource policies, underpinned by a commitment for strong employer branding and employee engagement strategies. Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing pool of employees has been enhanced through training, development and other performance-enhancing activities such as performance appraisal, succession planning and development centres to review performance and assess employee development needs and promotional potential. Increasingly, securing the best quality candidates for almost all organizations will rely, at least occasionally if not substantially, on external recruitment methods. Rapid changing business models demand skills of experiences which cannot be sourced or rapidly enough developed from the existing employee base. It would be unusual for an organisation today to undertake all aspects of the recruitment process without support from third-party dedicated recruitment firms. This may involve a range of support services, such as; provision of CVs or resumes, identifying recruitment media, advertisement design and media placement for job vacancies, candidate response handling, shortlisting, conducting aptitude testing, preliminary interviews or reference and qualification verification. Typically, small organisations may not have in-house resources or, in common with larger organisations, may not possess the particular skill-set required to undertake a specific recruitment assignment. Where requirements arise these will be referred on an adhoc basis to government job centres or commercially run employment agencies. Except in sectors where high-volume recruitment is the norm, an organization faced with an unexpected requirement for an unusually large number of new recruits at short notice will often hand over the task to a specialist external recruiter to manage the end-to-end

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resourcing programme. Sourcing executive-level and senior management as well as the acquisition of scarce or high-potential recruits has been a long-established market serviced by a wide range of search and selection or headhunting consultancies which typically form long-standing relationships with their client organizations. Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies. In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or embed, their resourcing team(s) within the client organization's offices but will work in tandem with the senior human resource management team in developing the longerterm HR resourcing strategy and plan. Modern concept of human resources Though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although this view was increasingly challenged by more quantitatively rigorous and less "soft" management techniques in the 1960s and beyond, human resources development had gained a permanent role within organizations, agencies and nations, increasingly as not only an academic discipline, but as a central theme in development policy.

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OBJECTIVES

The main objectives of the study are:1. To examine the nature of HRM Climate in HDFC BANK. 2. To identify the nature of HRM System in HDFC BANK. 3. To study the effectiveness of Training Appraisal Techniques in HDFC BANK. 4. To analyse the prevailing practices of workers participation in decision making and employee- management relationship. Programme and Performance

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SCOPE & IMPORTANCE

The scope of HRM is immense for any organization plying in todays dynamic business environment. The entire process starts right from the manpower planning process and revolves around an organizations hiring practices, employee and executive motivation, maintenance, performance evaluation and compensation management, industrial relations and the employee retention plans and strategies. In case of a successful

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LITERATURE REVIEW
In todays knowledge economy, business experts claim that the organizations who can constantly change and realign themselves with the fast changing business environment would survive for the long run. Fostering and building knowledge, developing and retaining talents and promoting creativity and innovation would thereby become the strategic needs for future organizations. For, only their abilities to learn, create, and innovatively utilize knowledge faster than those of the competitors and quicker than the environmental changes would provide them competitive advantage in the fast changing business environment. Hence, the core competence of any organization would be their human capital, the collective learning of the people and the value chain they would create by nurturing and developing new knowledge. Thus, for ensuring organizational success CEOs and business captains would principally depend on how their people are being procured, developed, retained and nurtured into knowledge workers. Every organization believing in this philosophy would thereby be emphasizing on composing their people with such innovative capabilities and utilizing their services, developing their skills, motivating them to enhance their levels of performance and ensuring that they remain committed to the organization. This probably would be true for all types of organizations government, business, education, health, recreation or social service organizations like NGOs irrespective of the type of business or service they are involved with. Organizations that can achieve these people capabilities have been suggested to be both effective as well as efficient. Inefficient or ineffective organizations without such people capabilities would face the threat of stagnating or being driven out of business by their rival organizations.

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Hence from the above discussion it is evident that, the emphasis to acquire people capabilities would only be feasible if proper and effective human resource management principles and practices are fine tuned with the strategic needs of the business and the needs of the customers. HRM would thereby emerge as one of the most important strategic factor in contributing to the success of an organization. With the growing importance of knowledge workers to organizations and the rising expectations of employees, it is essential to have a good human resource management system in place. It is also important that all the different processes in an organization, like finance, HRM, marketing and operations align their objectives and strategies to those of the organization and work in harmony with each other. Human Resource Management (HRM) can be primarily described to consist of four essential functions namely acquiring, developing, motivating and retaining human resources. The acquisition of human resources is a crucial function that starts with planning for the number and categories of employees required (with the right capabilities and expertises) and ends with staffing. The development function has four dimensions namely employee training, management development, and career development followed by succession planning. The motivation function is perhaps the most important for the retention of people in todays organizations. It involves identifying the individual motivational needs of employees and finding ways to motivate them. The retention function is perhaps the most complex function amongst all challenges in todays competitive business environment. It varies from industry to industry, business to business, capabilities of people and most importantly their changing needs and expectations. In a simpler way, it aims to provide a

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conducive work environment to the employees and nurturing them to make them feel committed and psychologically attached to the organization. Over the years most organizations had depended on personnel management principles and practices for managing people at their workplaces. These traditional approaches emphasized on command and control relationships between the managers and employees, which are no longer in vogue in todays organizations. These have now given way to new approaches characterized by greater freedom and support to the employees as revealed in the above caselet. Many successful companies and even budding organizations have started believing in the capabilities of their people. Empowerment, innovation had rightly emerged as the most effective strategies for harnessing business success. Conventionally many authors had so long considered an organizations physical assets to be the major factors in determining their success, but it is now believed that the employees or human resources are equally critical assets. The successful management of an organizations human resources is an exciting and dynamic task, especially at a time of increasing competition, when companies are facing newer and more complex challenges. WHAT IS HUMAN RESOURCE MANAGEMENT? Definition: According to Invancevich (2008)1 , Human Resource Management (HRM) is concerned with the most effective use of people to achieve organizational and individual goals. It is the strategic and coherent approach to the management of an organizations most valued assetsthe people working there who individually and collectively contribute to the achievement of its goals.

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HRM can also be described as a set of interrelated policies with an ideological and philosophical underpinning, concerned with the employment, development and reward of people in organizations and the conduct of relationships between the management and the employees. HRM is a strategic approach to the acquisition, motivation, development and management of the organizations human resources (Sharma, A.M.)2 . It can be said that although all the line managers and team leaders play a pivotal role in managing an organization, the HR specialists play a vital role in shaping the overall strategy of an organization as well as acting as Internal Consultants for the organization. Todays HR professionals constantly need to nurture an empowering culture so as to ensure effective retention of human resources in their organizations. This philosophy is nurtured well in an organization like ICICI Prudential India, as revealed by the following exhibit. On the other hand, for an organization like TCS, the companys success depends to a great extent on its ability to recruit, train and retain high quality IT professionals. TCS places emphasis on the human resources function in the organization, investing a substantial percentage of its annual revenues in training. HR Practice: Thus, carrying on with the above discussions, it can be said that HR practices can be described as: Any practice that deals with enhancing competencies, commitment and culture building can be considered as a HR practice. The practice could be a rule, a system, a process, and an activity, an accepted or expected way of doing things.

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 For an organization like Arvind Mills, the HR practice acts as the foundation that integrates organizational culture, vision and values, fosters an environment that facilitates the maximization of human potential.

RESEARCH METHODOLOGY
DATA COLLECTION METHOD Data for the present study is collected from two sources: a. Secondary: - Secondary data will be collected from published sources like Journals, Magazines, various newspapers and published books.

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FINDINGS & ANALYSIS

The real challenge of this sector is the Indian companies, how to transform into global corporations without losing the positive values and culture that they have developed. As most part of the jobs in this industry is monotonous/repetitive and routine, the HRD Department in HDFC Bank has to empower, engage and energies employees to create effectiveness & efficiency through motivation organizational structures, systems & procedures are facilitators of these, and there is a need to focus greater attention on these aspects by the industry. However, the emergence of a core and peripheral workforce in many organization has presented new challenges for HR managers public & private sector organizations are fast becoming diverse communities for core workers, flexibly employed casual and part-time workers, consultants, contractors & business partners. Certain complexities have also developed in HRD in HDFC Bank within this banking system itself because this industry is largely in the public sector.

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CONCLUSION

After having analyzed the data, it was observed that practically there was no proper HRM system in the o HDFC Bank. To be an effective tool, it has to be on the continuous basis. This is the thing that has been mentioned time and again in the report, as, in the absence of continuity, it becomes a redundant exercise. Before actually deciding drafting what should be the kind of development system, the following things should be taken care of: 1. The very concept of human resource development should be marketed throughout the organization. Unless this is done, people would not accept it, be it how important to the organization. 2. To market such a concept, it should not start at bottom, instead it should be started by the initiative of the top management. This would help in percolating down the concept to the advantage of all, which includes the top management as well as those below them. This means that the top management has to take a welcoming and positive approach towards the change that is intended to be brought. 3. Further, at the time of confirmation also, the appraisal form should not lead to duplication of any information. Instead, detailed appraisal of the employees work must be done which must incorporates both the work related as well as the other personal attributes that are important for work performance.

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4.

It should be noted that the development system for each job position should be different as each job has different knowledge and skill requirements. There should not be a common appraisal form for every job position in the organization.

5.

The job and role expected from the employees should be decided well in advance and that too with the consensus with them.

6.

A neutral panel of people should do the appraisal and to avoid subjectivity to a marked extent, objective methods should be employed having quantifiable data.

7.

The time period for conducting the development system be revised, so that the exercise becomes a continuous phenomenon.

8.

Transparency into the system should be ensured through the discussion about the employees performance with the employee concerned and trying to find out the grey areas so that training can be implemented to improve on that. Ideally in the present day scenario, human resource development system should be done, taking the views of all the concerned parties who have some bearing on the employee. But, since a change in the system is required, it cannot be a drastic one. It ought to be gradual and a change in the mindset of both the employees and the head is required.

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SUGGESTIONS

The current system of human resource management appears to be very effective. The Lululemon company continues to expand, and with this growth comes more opportunities for jobs within the company. The Lululemon strategy of ensuring high levels of job satisfaction through benefits, positive work environment, personal motivation and goal setting has made the idea of working at Lululemon very appealing to the external labour market. One recommendation would be to consider that some potential (and current) employee may be more private individuals. While Lululemon seeks certain characteristics from employees, (eg. enthusiasm, positivity), personal privacy is one theme that may often go overlooked. For example, employees are expected to post their personal and professional goals on the bulletin board at work, and often in-store events incorporate activities such as wearing large buttons that the employee has written one of their goals on. These types of expectations may cause potentially great employees to not apply for positions, be singled out by supervisors, colleagues or peers, or in extreme cases, quit their job. A second recommendation would be to consider that some potentially great employees may not apply for positions because of the "image" of Lululemon. While Lululemon has policies against overt discrimination and practices fair hiring, distributive and procedural justice, Lululemon after all, projects an image of healthy living. Some job applicants may be intimidated by the emphasis on physical activity if they have limited experience with fitness and exercise. Other applicants may be intimidated by other characteristics such as their age, or physical attributes such as body weight.

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BIBLIOGRAPHY
Books: 1) Awasthapa. K (2001) Human Resource Management Tata MC Graw Hill 5th edition 2) Bernadi (2000) Human Resource Management Tata Graw Hill 4th edition 3) Desslar Gary (2003), Human Resource Management Prentice, Hall of India Put 9th edition 4) Kothari CR (2000) Research Methodology method & technology, New Delhi Wishwa Prakashan 5) Memoria C.B Grankar S.V (2002) Personnel Management Himalaya Publishing House, 22 editions

WEBSITES: 1. 2. 3. www.HRMnetworks.com www.HRMindia.com www.hdfcbank.com

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