Human Resource Practices in Public and Private Sector Banks

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EMPEROR INTERNATIONAL JOURNAL OF

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ISSN : 2395-5929

Founder | Publisher | Editor Dr. R. MAYAKKANNAN,

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H.H.The Rajah’s College (Autonomous), Pudukkottai, Tamilnadu.

Volume-II Issue-04 April- 2016

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Head & Associate Professor of Commerce

H.H.The Rajah’s College (Autonomous), Pudukkottai, Tamilnadu

Editor & Founder

Dr. R. MAYAKKANNAN,

Assistant Professor of Commerce,

Sri Sankara Arts & Science College,

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Emperor International Journal of Finance and Management Research [EIJFMR] ISSN: 2395-5929

Emperor International Journal of Finance and Management Research [EIJFMR] ISSN: 2395-5929 Page 14

HUMAN RESOURCE PRACTICES IN PUBLIC AND PRIVATE SECTOR BANKS

Dr.K.KRISHNAMURTHY

Assistant Professor & Research Supervisor, PG & Research Department of Commerce,

Rajeswari Vedachalam Govt. Arts College, Chengalpattu-603 001.

Mr. R.SRINUVASAN

Ph.D Research Scholar,

PG & Research Department of Commerce,

Rajeswari Vedachalam Govt. Arts College, Chengalpattu-603 001.

Introduction

Human Resource Development [HRD]

has been bandied about to mean training

or logical extension of it. What has to be

clearly understood is the while HRD

encompasses the entire process of

training; it is a much wider concept.

Training mean educating narrowly,

mainly by instruction whereas

development indicates an unfolding

process carries an implication of growth

and maturity. Training, therefore, is to

bridge a short-term gap between job

requirement and the employee’s present

knowledge, attitude and skills whereas

development is a long-term involvement

and commitment. Training is to meet

specific need but development is more

broad-based and concerned with the total

person. While training can be piecemeal

and sporadic, development is an on-going

process which needs full support of top

management and endorsed as one of their

basic organizational values.

HRD is one of the most important

functions for organizational growth and

development and includes long-term,

broad-based activities which would also

ensure organizational Effectiveness. It is

elixir of the business enterprise.

Need for HRD

The need for emphasis on HRD for an

organization’s growth arises for the

following reasons:

1. Death of capable managerial

manpower now and a greater nee in

the future increase the competition for

available talent

2. Continued growth and development of

business, coupled with increased

complexities such as the problems of

size, technology and competition, add

further pressures. Unsettled political,

economic and social conditions do not

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3. The need to continually press for

improved business performance to

improve products lower costs and

increase sales.

Banking Sectors in India

Public sector Banks: The public sector is

the one whose working is in the hands of

the government. The government holds a

majority stake in public sector industries.

Their activities are mostly influenced by

the government.

Private Banks: The private sector banks

that are not incorporated. A private bank

is owned by either an individual or

general partner(s) with limited partner(s).

Foreign Sector Banks: The Foreign sector

banks are those banks which have their

head office in other countries outside

India and branch is working in India.

operative Sector Banks: The

Co-operative Sector Bank is very much useful

for rural people

RRBS: The Regional Rural Banks is a

financial institution that helps rationalize

the developing regions developing

country to finance their needs specially

the projects regarding agricultural

progress.

HRD in banking sector

Today’s increasing complex and volatile

business environment characterized by

globalization, liberalization and

transnational invasion ensures that

managing would not be the same again.

As we are in 21st century competitiveness

in global market place presents the

ultimate challenges to policy makers,

business leaders and entrepreneur’s in any

industry, including banking.

Those leaders would be successful who

would manage the virtues of conflicting

paradigms, rather than rely on single set

of pre-determined theoretical “right

polices”. This has created in its wake a

need for adopting a proactive approach by

bankers in all areas of organizational

structure, administrative policies, and the

most important the HRD.

As result the banks have to continuously

strive to give new thrust and direction to

equip its employees to meet the emerging

challenges. Hence, a systematic HRD

strategy focused on people is essential.

The need for HRD is all the more great in

service-oriented institutions like banks.

An efficient, effective and disciplined

banking system helps the process of

economic development as per the national

priorities. It functions as catalytic agent

for bringing about economic, industrial,

and agriculture growth and prosperity of

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The need for HRD in the banking

institutions has continuously grown

because of an affective role the play of

social-economic development and

upliftment of especially those people who

are neglected and deprived. Banks have a

strong industrial relation orientation

which necessitates more and more focus

on improving the HRD efforts have to be

there to influence people to use HRD for

achievement of goal both business and

social. The HRD policy in the banks has

to act as an instrument to encourage

employees to show creativity, to reach for

excellence and finally to render better

customer service.

Objective of HRD in Banks:

1. Creating a climate of openness and

trust.

2. Building a collaborative culture

whereby everyone is an important

member of an effective team.

3. Preparing individuals for

technological competence.

4. Psychological prepared ness for

willing participation in change

implementation.

5. Facilitating building of a strong

character of honesty and integrity in

performance.

For a strong banking system it is

necessary to go beyond the existing issues

and benchmark. The problem stars with

slow progress in privatization of public

sector banks and restrictive FDI norms for

public banks. There is also a conflict in

the role of RBI as both supervisors and

owner, which at many time has led to

corporate governance issues, he said. The

HR policies, especially those relating to

the tenure of CEOs of banks have not

been conductive for continuity and long

term planning in banks. On the positive

side, technological changes have immense

in the recent past. It has brought a change

in the service paradigm, with several new

products to suit customer choice. Banks

are gearing to become a one-stop shop for

financial products in the future, and with

RBI, ready to adopt international norms,

much depends on the legal reforms which

could help expedite the loan recovery,

ease the exits procedures and inculcate

better borrower ethics. The slow pace of

recovery of banks dues has being one of

the most prominent problems. The time

has come to follow approach of

rehabilitation of weak banks to start a

reconstruction mode. Also, stringent and

harsh penalties need to be enforced on

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point of inflexion. They are facing intense

competitive pressure like other sectors of

industry and services. The challenge for

the banking sector is not only to come on

top of the competition, but also provide

funds at internationally competitive rates.

The recent initiatives of the finance

ministry have largely accelerated the

reforms process. There is still much to be

done by way of disinvestments and

decontrol of public sector banks,

introducing innovative banking, etc.

Methodology

In order to achieve the objective, both

primary and secondary sources of

information are relied upon. The primary

data was collected through structured

questtionaires apart form dicussions and

interviews with employees, managers of

the Bank, union representatives and staff

colleagues.

Objectives

1. To study the attitude of age wise

group of public sector bank toward

different human resource factor.

2. To study the attitude of experience

wise group of public sector bank

toward different human resource

factor.

3. To study the attitude of age wise

group of private sector banks towards

different human resource factor.

4. To study the attitude of experience

wise group of private sector bank

toward different human resource

factor.

Research design

For the present study factorial design is

used. Examine the impact of employees of

public and private sector banks on

different factor. Also analyses of age wise

and experience wise impact on factors.

The sample of 120 was collected form

managerial staff of the bank. The sample

collected from public and private sector

banks.

Tools and Measures

A questionnaire was designed for the

managerial level. The questionnaire

covered the following factors:

 Recruitment

 Training and development

 Performance appraisal

 Organization policy and culture

 Career planning

 Employee participation

Data Analysis and Interpretation

The aim of the present study is to find out

satisfied and dissatisfied level of employee

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Bank. The study evaluates the age wise and

experience wise attitude toward HRD

practices of both Banks. The result after

statistical analysis tabled below:-

Table 1.1

Distribution of Respondents BANK N %

Private 90 69.23

Public 40 30.77

Total 130 100.00

Distribution of Respondents according to Age group

Table 1.2

Age group Private Public

N % N %

20-35 yrs 13 14.44 4 10.00 35-45 yrs 16 17.78 17 42.50 Above 45 yrs 61 67.78 19 47.50 90 100.00 40 100.00 Distribution of respondents according to

Experience I Table 1.3

Experience Private Public

N % N %

Below 10 yrs

7 7.78 2 5

11-20 yrs 12 13.33 15 37.50 21-30 yrs 55 61.11 19 47.50 31-40 yrs 16 17.78 4 10.00 90 100.00 40 100.00 The above table shows that total number

of respondent were 130. These

respondents are from the public and

private commercial banks. The maximum

respondents were above 45 years and

having 21-30 years experience.

Test for Difference of Means for different

between private and public sector banks.

Table – 2.1

Factor Bank N Mean SD Z Result

Recruitment Private 90 8.53 1.76 1.75 NS Public 40 7.90 1.97

Training and Development

Private 90 33.93 6.18 1.63 NS Public 40 32.13 5.68

Performance appraisal and Transfer

Private 90 16.47 2.83 3.27 Public 40 32.13 5.68

Organization

policy and

cult.

Private 90 30.30 4.97 1.83 NS Public 40 28.30 6.08

Career planning

Private 90 12.10 2.80 2.86 Public 40 10.73 2.40 Employee

participation

Private 90 12.96 2.08 1.99 Public 40 12.20 1.96

To test for difference of mean for different

factors between private and public sector

banks Z-test was applied. The test results

are shown in the table given above. The

test results shows non-significant

difference (p<0.05) regarding recruitment,

training & development and organization

policy & culture, between opinion of

respondents of employees of private and

public sectors banks. The significant

difference was found for performance

appraisal & transfer (p < 0.01), career

planning (p< 0.01) and employee

participation (p < 0.05) in opinion of

employees of private and public sector

banks. If mean values of scores are

observed it can be clearly seen that for all

the three factors mean values are higher

for private sector bank as compared to

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respondents of private sector banks have

rated high for these factors of human

resource practices as compared to public

sector banks. Both banks have planned

career planning Appraisal system. In

private sector bank employee can progress

based on his/her performance but in

public sector he/she can get promotion as

per policy. Some flexibility is there in

transfer system. Meeting held frequently

in which they invite staff suggestion so

staff are more satisfied.

Suggestion and Conclusion

Indian commercial banks have been using

human resource practices to gain

competitive advantage. Both commercial

banks have planned career planning

appraisal system. In private sector, bank

employee can progress as his/her

performance but in public sector he/she

can get promotion as per policy. Some

flexibility is there in transfer system.

Meeting held frequently in which they

invite staff suggestion so staff are more

satisfied.

It is suggested that the bank may

introducing “open appraisal system’

wherein the marks awarded to the

reviewer is disclosed. In many

organizations open appraisal systems are

working. There may be open discussion

between manager & employee of that

employee would know weak areas of

performance and them to develop and

perform well.

It is suggested that institutional training

should provide effective skills to

employee. Employees should be

motivated to utilize the material and

libraries so that competency gap would be

reduced. It is suggested that apart from

that leaving can be sued. It involves use of

computer, and information technology

like video conferencing, internet etc. so

leaving methodology becomes effective

tool of leaving. Mostly promotions are

given in accordance with the performance

of the job. It is suggested that employee

potential should be evaluated based on

objective assessment but not on

favoritisms. Transparency in evaluation

and promotion policy also suggested.

Transfers in both banks are according to

the policy of bank. They have fixed time

private of employees in one branch after

that they are transferred to different

branch as per needs of the banks. The

employee of both bank have same

perceptions toward transfer system. They

want more improvement in the system. It

is suggested that there should be fair

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a leading tool. Some additional benefits

can be given to the employees’ along with

transfer who act as motivational factor.

References

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(New Delhi: Kalyani Pub.1998) Bass,

Bernard M., and Vaughan, James A.

Training in Industry: The

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New Delhi, 1979.

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