MN7181-Peoples and organization-

Importance of Human Resources Management in Banking Sector-

 



Human resource management (HRM, or simply HR) is a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives. (HRM in changing organizational contexts, 2009). HR is primarily concerned with how people are managed within organizations, focusing on policies and systems ( Human resource management: A critical approach , 2009). HR departments and units in organizations are typically responsible for a number of activities, including employee recruitment, training and development, performance appraisal, and rewarding. HR is also concerned with industrial relations, that is, the balancing of organizational practices with regulations arising from collective bargaining and governmental laws. (Rihan, 1998)

In this competitive environment, organizations in service sector and industrial sector are trying their best to win the loyalty of their customers by providing the superior quality services and innovative products to remain competitive in the market. The objective of this study is to focus on the concept that organizational well structured HRM policies and top management commitment for quality services play a positive role for satisfaction of employees and customer. In well structured organizations where HRM and quality practices are implemented, a healthy culture and a competitive working environment develops, which creates motivation and commitment among employees for achieving quality and financial objectives of the organization. This study is focused on the banking sector of Pakistan. It is concluded that quality in service sectors strongly depends on employees’ commitment with the organization for providing superior services to the customers to enhance customers’ satisfaction based on training and development to enhance employees’ skills and leaning abilities to perform their tasks efficiently and effectively. (Irfan et al.,  2009)

The Sri Lankan banking sector was chosen, since it represents the main characteristics which demand the HR professionals to implement change in their roles. The banking sector underwent major changes from the early 1980s due to deregulation, resulting in acute competition between local private and foreign banks. As such, local banks, private and government, had to change the way they operated, becoming more customer-oriented and delivering results in time. There is also a perception among the general public that banks in Sri Lanka have better HR practices than other industries (personal communication).

The local banks in Sri Lanka can be categorized based on their ownership and type of business operations. According to their ownership, the local banks can be classified as private or public banks. With regard to the type of business operations, banks can be categorized as commercial and non-commercial (specialized) banks. The major difference between the commercial and noncommercial banks is that only the former have the power to hold and maintain current accounts. According to the Central Bank records (2010), there are 21 local banks in Sri Lanka, which consisting of 11 commercial banks and 10 noncommercial banks. Hence the accessible population is 21 local banks. From these, a sample of 10 banks was taken based on two main conditions: (1) the sample should comprise both private and public banks as well as commercial and noncommercial banks; and (2) the sample should contain five banks (equal basis) from each category. Thus, a sample of 10 banks was chosen randomly based on the above criteria consisting of two public commercial banks, three public noncommercial banks, three private commercial banks, and three private noncommercial banks. From the selected 10 banks, 50 HR professionals belonging to senior and middle managerial level and 50 non-HR professionals in senior and middle managerial levels (finance, marketing, accounts, information technology and other) were chosen for final data collection. (Arachchige and Weerasinghe)

Conclusion

Human Resource Management is the strategic approach to the effective management of people in a Banking sector  such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives.

References

Rihan, I., 1998. What is Human Resources Management. Obtido de academia. edu: https://www. academia. edu/7775792/What_is_Human_Resources_Management_.

Irfan, S.M., Mohsin, M. and Yousaf, I., 2009. Achieving service quality through its valuable human resources: An empirical study of banking sector of pakistan. World Applied Sciences Journal, 7(10), pp.1222-1230.

Anifowose, B.D., Genty, K.I. and Atiku, O.S., 2011. The post consolidation of banks: Human resources management challenges and prospects in Nigeria banking sector. International Journal of Business and Management, 6(11), p.67.

Arachchige, B.J. and Weerasinghe, B.L., 2012. Role Transition of HR Professionals in the Sri Lankan Banking Sector: A Study. IUP Journal of Management Research, 11(4).

Comments

  1. upulblog1 December 2020 at 18:44

    good blog; flow is o.k. but words are more than expected

    ReplyDelete
  2. Chanakaja13 December 2020 at 05:18

    For banks, Human Resource Management is important because banking is a service industry. People's management and risk management are two main issues facing banks. Without effective and professional manpower, efficient risk management will not be feasible. Banking has been and always will be a "People Business"

    ReplyDelete
  3. Hemanthi Maheshika Abeysekara13 December 2020 at 10:02

    Managing of Human Resource in banking industry is more important since although employees and other tangible assets are there, banks give service. Therefore, managing people in an effective manner will help to increase the service level of the company.

    ReplyDelete

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