Indian Journal of Economics & Business, Vol. 16, No. 1, (2017) : 37-50
* Research Fellow, Management Department, IKGPTU, Kapurthala, E-mail: firstname.lastname@example.org** Associate Professor, Management Department, SBSSTC, Ferozepur, E-mail: email@example.com
EMPLOYEES ATTITUDE TOWARDS CHANGINGFACE OF HRM FUNCTION IN INDIAN BANKING
RAMANPREET KAUR* & RAMINDER PAL SINGH SACHDEVA**
In the present era, dynamic advances in information and communication technologyconverged with the forces of economic liberalisation, globalisation and virtualisationhas posed a volatile macro environment for the organisations. Organisations are incontinuous strife to optimise their resource utilisation, to achieve excellence, highlevels of efficiency and competitive edge over the competitors. So the businessenvironment nowadays, calls for the reengineering the business processes and strategicpolicy making for survival of the organisations. Out of men, machinery and money,human resources are the most vital factor in growth and development of business.Hence, the research paper attempts to examine the imperativeness of sound HumanResource Management Practices in Banking Industry of India. The focus of the currentstudy is to examine into changing face of HRM function in banking industry andlook into the HR practices being followed in this industry in present. The researchpaper is focused on studying the attitude of employees towards the five major HRpractices of public and private sector banks of India. Various variables of these HRpractices are framed for the complete analysis of attitude of the employees towardsthe practices.
Keywords: Human Resource Practices, Staffing, Job and Work Environment,Compensation, Performance Appraisal, Training and Development.
INTRODUCTIONIn the present era, dynamic advances of information and communication technologyconverged with the forces of economic liberalisation, globalisation and virtualisationhas posed a volatile macro environment for the organisations. Organisations arestriving to achieve sustainable excellence to sustain in highly volatile businessenvironment. Organisations are in continuous strife to optimise the use of theirresources to achieve excellence, high levels of efficiency and competitive edge intheir operations. This has lead to a continuous warfare among the organisation for
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acquisition, retention and optimum utilisation of the scarce resources. And humanresources are nevertheless most important and valuable resources in achieving theorganisational goals of excellence, efficiency and sustainability. One simple fact of21st century is that human resources- people within the organisation are one of theprimary means of creating competitive edge for the organisations. Human resourcesas the only active resources in the organisation are responsible for efficient andeffective use of money, machines, materials and technology. With the realisation ofvital role of human capital plays in the organisations, the focus of the current studyis to examine into changing face of HRM function in one of the most importantservice industry, i.e. Banking industry and to make an endeavour to find out thatwhether HR practices need a facelift in the current scenario or not.
Statement of the ProblemBanking industry viewed from personnel angle, has its own peculiarities. It is mainlylabour intensive industry and employees have got bearing on services offered.Human Resource Management function in this industry has travelled a long distancefrom basic Personnel Management to HRM function in line with organisationalstrategy. Although being the drivers of economic development of the country, HRMin banking industry should have gained better priority in its earlier days, butunfortunately it has been the most neglected part by bank managements. But,nowadays HRM function in banks is forging ahead at an exemplary pace. A majorityof banks have set up different Human Resource Management and Human ResourceDevelopment departments. Employees working in this industry have alsorepresented attitudinal changes towards HRM function. Employees empoweredwith access to the world through information and communication technology, arebecoming increasingly aware of recent trends in human resource management indifferent industries. The present study addresses the need of studying employeesattitudes towards changing face of HRM function in the Banking industry of India.
REVIEW OF LITERATUREMany researchers have investigated the role of human resource management ineffective functioning of the organisations. Sound and clear human resourcemanagement policies and practices are significant in determining behaviour andinsolence of the employees. Review of brief literature for the purpose of the studyclearly indicates the linkage between sound HRM practices and employeesatisfaction and consequently a competitive advantage in business. This is reasonnowadays that not only developed countries, but also developing countries areconsidering effective HR management as a vital component of their growthstrategies. Gratton et al. (1999) describes the essence of human resourcemanagement as Human resource management advocates the devolution of peoplemanagement from the human resource function to line management. However theresearch shows that this is difficult to achieve in practice. What can be done toensure line managers take responsibility of implementation of HR policies and
Employees Attitude towards Changing Face of HRM Function in Indian Banking... 39
practices? Thornhill et al. (2000) found a potential role for HR centred strategies tobe used to change or realign the culture of an organisation. The authors suggestedthat an organisation can change its culture by recruiting the managers from outside,restructuring the organisation, downsizing the workforce, training programmes,new reward strategies and performance management to alter the employeebehaviour and reinforce the emergent one. Supangco (2001) conducted a study toestablish relationship between sophistication of HRM plans and perceivedorganisational performance; relationship between sophistication of HRM plan andthe degree to which companies undertake practices with high strategic value; therelationship between strategic human resource management practices and perceivedorganisational performance Narasaiah & Reddy (2002) reviewed some of thesignificant HRD practices in Life Insurance Corporation of India and studied someof the HRD interventions by LIC that focused on individual growth of people of theorganisation. The goal of personnel policies in the changing scenario aim at ensuringsufficient number of persons with sound insurance background and experience atdifferent levels. So employees should get equitable opportunities to move up on thebasis of their performance. Roos et al. (2004) tried to examine the change of HRfunction into HRM with a view of current strategic role. Recent work on linksbetween HRM and business performance is reviewed highlighting the conclusionthat while the links are not disputed by researchers using variety of approaches,the ability to characterise definitive casual links has proved almost impossible.The techniques and resource based approach of Intellectual Capital may providethe key to identify the links, but again the work to date has proved that it may notbe possible to clearly separate HRM from other management functions to quantifythe effects of HRM. Ashraf (2007) explained that human development envisagescrating the condition that are helpful in creating motivated and skilful humanresources dedicated to the task of producing goods and services for the goodwilland welfare of the society. Mangleswaran & Srinivasan (2011) studied the HumanResource Management Practices (HRMP) and its outcomes viz. job satisfaction andorganisational commitment in Indian public sector banks. The study revealed thateffective HRM practices contribute to job satisfaction. However for PSBs in Indiathree HRM dimensions determine employee satisfaction. Further employeesatisfaction reduces stress and increase customer satisfaction. The results of thestudy reveals that sound HRM practices lead to higher job satisfaction andorganisational commitment. Majumdar (2012) in his study on HRM practices inprivate sector banks in Bangladesh concluded that there is need ofprofessionalization of HR practices to shape and develop new directional focus toensure efficient and effective HRM practices. Bowra, Niazi et al. (2012) studied theimpact of human resources practices on perceived performance on banking sectorin Pakistan. The HR practices and employee perceived performance has shownpositive and significant relation in the study. The results were in accordance withprevious study (Baloch et al., 2010). Mathivanan (2013) stated that HRM is a growingconcept which has tremendous relevance to services sector like baking. The level ofefficiency of this input is reflected in quality services provided in by banks to its
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customers. Tariq et al. (2014) explored the mediating role of employee motivationin relationship between post selection human resource management practices andperceived performance of Islamic banks in operating in Pakistan. Results ofregression analysis supported that post selection HRM practices have positiveimpact on perceived organisational performance and employee motivation.Neelkantaiah (2015) attempted to study human resource management and practicesin Indian banks and concluded that foremost challenge of HR function of India is toconvert abundant population pool into useful human resources. Training anddevelopment of human resources to meet ever changing needs of industry is anotherchallenge for banking industry. So the major challenge for banks as well as otherorganisations to develop their social architecture and intellectual capital as driverof change.
OBJECTIVES AND METHODOLOGYObjectives of the current study are-
To examine the Human Resource Management practices followed by publicand private sector banks of India at present.
To study the attitude of employees towards these HRM practices and see ifthere is any difference in the satisfaction levels of both banking sectorsemployees towards HRMP.
MethodologyKeeping in light the objectives of the study, three public sector banks viz. StateBank of India, State Bank of Patiala and Punjab National Bank and three privatesector banks viz. Axis Bank, ICICI Bank and HDFC Bank were selected. A samplesize of 350 employees working in both the sectors was selected on the basis ofconvenient sampling in the north zone of Punjab state. All the respondents werecontacted personally in the banks. A structured questionnaire covering theimportant dimensions of HRM was formulated to study the satisfaction level ofemployees towards these practices. But only 318 questionnaires could be consideredvalid and complete for the purpose of analysis. All the respondents cooperated inkeeping up the essence of this exploratory research by giving appropriate responsesto all the questions in questionnaire.
Hypotheses SettingHypothesis will be tested using independent sample t-test for the acceptance andrejection at significance level of 5%.
H1: There is significant difference in Staffing Practices of Public and PrivateSector Banks.
H2: There is significant difference in Job and Work Environment of Public andPrivate Sector Banks.
Employees Attitude towards Changing Face of HRM Function in Indian Banking... 41
H3: There is significant difference in Wages and Compensation Practices ofPublic and Private Sector Banks.
H4: There is significant difference in Performance Appraisal Practices of Publicand Private Sector Banks.
H5: There is significant difference in Training and Development followed ofPublic and Private Sector Banks.
Demographic Distribution of the RespondentsThe below subsections will present the demographic distribution of the respondents.The respondents have been segregated according to the type of employers i.e. publicor private sector banks, gender of the respondents, age of the respondents,qualification of the respondents, organizational experience of the respondents andtheir designation at the workplace.
Bank Wise Break Up of the Respondents
Figure 1: Bank Wise Break Up of the Respondents
The pie chart shows that nearly equal distribution of the employees fromboth public and private banks in Punjab, though the percentage of employees fromprivate sector banks (50.94%) were marginally higher than the public sector banks(49.06%).
42 Ramanpreet Kaur & Raminder Pal Singh Sachdeva
Gender Wise Break Up of the Respondents
Figure 2: Gender Wise Break Up of the Respondents
The pie chart shows that participation of both males and females are high inthe banking sector of Punjab. However the share of the male employees (53.77%)among the respondents was nearly 7% higher than the share of the female employees(46.23%) among the respondents.
Designation Wise Break Up of the Respondents
Figure 3: Designation Wise Break Up of the Respondents
Employees Attitude towards Changing Face of HRM Function in Indian Banking... 43
The pie diagram gives the demographic wise segregation of the respondentsfrom the public and the private banks. From the pie diagram it is evident that thelargest share of the respondents were working at the officer level (53.14%), followedby the managerial cadre (33.33%), while 13.52% of the respondents were workingas clerk or junior positions at their respective organizations.
Table 1.1Variables for Human Resource Practices in the Public and Private Banks
v1 Sufficient staff is available in the bankv2 Bank follows a standard procedure of recruitmentv3 Objectivity of methods of selectionv4 Transparent and fair selectionv5 Individual merit, skills and knowledge is given due considerationv6 Bank follows a standard procedure of transfersv7 Getting transferred to your required place is easy and simplev8 Training programmes serve both individual and organizational objectivesv9 Training system & staff is suitable and adequate as per the need of trainingv10 Training is imparted in an organised mannerv11 Training is conducted every yearv12 Training needs are identified through performance appraisal mechanismv13 You are clear about the roles and responsibilities of your jobv14 Supervision and communication channels are short and simplev15 Supervisors behaviour is proper and encouraging with his subordinatesv16 Your job is reasonably secure as long you are good at the jobv17 Present job is as per your ability, qualification and experiencev18 Leave policy of your bank is clear and simple to understandv19 Leave policy is as per industry guidelines (specifically in the case of sickness
leave or maternity leave)
v20 Bank follows a standard salary structure including HRA/ DAv21 Same salary for same job levelv22 Salary is revised...