Evaluating an International Human Resource Strategy Banking Industry Essay Example

HR practices. Testa (2008) emphasizes that HR plays a vital role in developing public relations, especially in the banking sector where customer interactions are frequent. Therefore, HRM is a critical function in expanding the customer base in the banking sector. A well-established HRM system fosters customer satisfaction as well.

Retaining employees in the organization for the long term is difficult due to competition in the job market and employees' preference for better opportunities. Selecting the right candidate for the organization is also challenging. The management has a crucial role in overseeing HRM in the company. In the banking sector, a proper recruitment and selection process is important to find suitable candidates. HRM also includes employee retention, job engagement, and involvement. When HRM is strong and effective, it increases work commitment.

In the UK, the main international banks include HSBC, Royal Scotland Bank, Lloydstsb TBS, Barclays, Coutts, Co-operative Bank, ABN AMRO, Citi Bank, and others.

Recruitment and Selection

Recruitment and selection are crucial elements of an organization's HRM. Although connected, these processes are distinct. Recruitment involves advertising job openings, shortlisting candidates, conducting interviews, and more. Figure 01 below illustrates this process. The initial step is for the company to analyze positions and requirements.

There are multiple methods to determine a company's requirements, which include performance appraisal and evaluation of company performance. Moreover, if a company possesses a larger customer base, it must ensure an adequate number of employees to cater to them. In the banking sector, numerous essential roles such as branch managers, assistant managers, accountants, cashiers, banking assistants, bookkeepers, and computer operators exist. Henceforth, the company should identify and advertise available vacancies on its website along with newspapers, magazines online

platforms etc. The quantity of applications received is likely to increase with strong market demand or if the organization is well-known and respected in the industry.

HRM has the responsibility of receiving and shortlisting applications from potential candidates to manage the job market. If there is a high volume of applications, the company can use criteria like experience, education, and skills to narrow down the selection. After this step, HRM needs to determine the number of interviews and assessment methods for evaluating candidates.

While most sectors follow a three-stage interviewing process, the banking industry often expands it to include three to five stages. The selection of candidates can involve multiple methods, including telephone interviews, exams, face-to-face interviews, and group interviews. Companies have the option to recruit internally or externally.

Recruiting from outside the organization for top management positions can have both advantages and disadvantages. On one hand, bringing in new faces can motivate employees and bring fresh perspectives. On the other hand, for lower or middle-level positions, internal recruitment is preferable because existing employees are already familiar with the organization and its procedures. However, external recruitment can also bring in new ideas and innovations, which is important for driving change. The selection of the right candidate can also boost motivation among other employees. Ultimately, the recruitment process involves conducting interviews and making decisions about candidates.

Internal recruitment can be achieved through transfers, promotions, or re-emplacements, while external recruitment can be accomplished through advertising, employment exchanges, employment agencies, educational institutes, recommendations, etc. The purpose of recruitment is to encourage candidates to apply for vacancies, determine current and future needs, create a talent pool, foster a connection between employer and employee,

select candidates at minimal cost, and enhance individual effectiveness.

Training commences after the orientation program and plays a crucial role in improving the employee's skills, knowledge, attitudes,
capabilities etc.

Training and development programs offer many benefits, including improved productivity, performance, and employee morale. Both on-the-job training and off-the-job training are available options. On-the-job training is a cost-effective choice that applies to all organizations. In the banking sector, it is used to educate employees about different aspects of banking activities.

Off the job training involves conducting seminars, conferences, workshops, and similar methods to effectively train a large group of individuals. It should cover essential topics like communication skills, diversity, human relations, safety, customer service, ethics, and behaviors. According to Richard (2009), these training programs not only improve job satisfaction and employee morale but also greatly motivate employees and enhance their overall efficiency.

Additionally, it is beneficial in decreasing organizational turnover and supports the transformation of employees' ethical behaviors. This is crucial for enhancing the company's overall image. There are two approaches to training and development: traditional and modern. The traditional perspective suggests that training and development is not valuable nor cost-effective.

According to modern thinking, training programs are considered crucial for company productivity and performance as they should align with the company's goals. It is essential to retain quality employees if a company hires them, and training and development programs play a vital role in increasing their productivity. It is a misconception that training is only meant for new employees; instead, it should be an ongoing process to adapt to role changes or job modifications and provide employees with the necessary training.

The training process involves several steps, including need

assessment, trainee selection, choosing appropriate training methods, gap identification, administering the training, and evaluating the training. Richard (2009) states that training needs can be determined by analyzing the organization as a whole, the individual's needs, and job characteristics. Through need analysis, it is possible to determine where training is necessary, who requires the training, and why it is needed for them.

Reward and performance management

The rewards system and performance management are interconnected because having a reward system within an organization is crucial for motivating employees.

Wright et al. (2003) state that organizations offer rewards to employees depending on their performance, categorizing them into monetary and non-monetary rewards. Monetary rewards consist of bonuses, commissions, incentives, etc., while non-monetary rewards are also considered.

The implementation of this system varies based on the organization and its culture, offering both advantages and disadvantages in regards to rewards. All individuals work to earn an income and have additional employee needs. Increased productivity among employees typically leads to a desire for greater benefits.

Qualified employees anticipate being rewarded for their performance, with pay playing a crucial role in their occupation. The human resource management (HRM) department is responsible for implementing a reward system that aligns with performance management. This system includes fixed payments such as salary and wages, as well as performance-based rewards. Mathis and Jackson (2000) state that Maslow's hierarchy of needs also considers the employee reward system in meeting their basic needs.

Rewards serve as a powerful mechanism to motivate employees by acknowledging their job performance. While some individuals value non-monetary rewards like appreciation, smiles, and recognition, companies can

provide rewards when employees surpass company expectations. These rewards are typically given after job performance and play a crucial role in meeting customer expectations. In the marketing field, employees often receive diverse rewards in addition to their fixed income, whereas in the banking sector, organizations commonly reward employees for achieving their targets.

They are expected to find new customers, and if they surpass the target, employees can receive rewards such as bonuses and commission. Many banking companies choose the best employee and best marketer of the month. For instance, HSBC offers multiple rewards to motivate their employees and maximize performance. Team targets also provide opportunities for employees to earn profits or rewards. Promotions are among the non-monetary rewards implemented by the company's HR department, which must align with the company's goals and objectives. Figure 06 demonstrates how to design a reward system in an organization. Any reward system should be specific, meaningful, achievable, reliable, and timely.

According to Armstrong (2008), the reward system can be categorized into four groups: transactions, relational, communal, and individual. Transactions rewards are tangible and mainly comprise financial rewards that are determined by market competitors. Conversely, relational rewards are intangible but play a significant role in augmenting the value of tangible rewards.

Recognition is essential in a workplace because it can result in positive transformations within an organization. When employees feel valued for their hard work, it can boost their happiness and contentment. HRM or the organization can give this recognition without any monetary expense.

Employee participation and trade unions

Employee participation plays a vital part in decision-making and empowering individuals within organizations.

Empowerment is vital in creating a friendlier work environment, with team collaboration being an

important aspect of this empowerment. Employee involvement is also crucial for the development of Human Resource Management (HRM). When employees actively participate, it can enhance customer satisfaction and meet their expectations. In the banking sector, employee participation is often observed in meetings, multi-channel decision-making processes, suggestion schemes, and project teams. These activities significantly contribute to the organization's benefits by increasing productivity levels and positively impacting employee attitudes and overall company atmosphere. Additionally, active employee participation enables individuals to achieve a work-life balance by discussing any concerns they may have with HRM for clarification.

According to Phil (2007), trade unions are organizations of workers who have a common goal of seeking improvement in their working environment. They engage in negotiations with employers and advocate for the interests of employees, aiming to enhance working conditions. Trade unions primarily negotiate on issues such as wages, rules and regulations, benefits, hiring procedures, and other related matters.

According to Johnson's (2004) research, trade union density in the UK stands at 28%. In the banking sector, employees actively participate in decision making, providing support to companies on various projects. Simultaneously, both employees and companies keep trade unions informed about changes within the company and future plans. When it comes to policy changes and other employee-related decisions, discussions take place among employees, the company, and trade unions, ultimately reaching a conclusion. Hence, companies are not free to make decisions at their own discretion; they must seek advice and support from employees and trade unions.

When employees are members of trade unions, they can't argue unnecessarily with the company, as the employers are aware of the process.

Recommendations

In any organization, HRM plays a significant role, involving various

common functions such as recruitment and selection, training and development, rewards and performance, employee participation, and trade unions. It is crucial to have well-planned HRM functions within any organization. In the banking sector, many international banks utilize specialized methods for recruitment and selection, giving high consideration to factors like education, physical ability, and background. Maintaining training and development programs is important for ensuring employee performance and supporting the enhancement of their knowledge, skills, and attitudes.

Banking organizations can improve productivity and turnover by implementing on-the-job training programs. This type of training allows employees to learn quickly and gain practical skills while dealing with customers, making it more effective than classroom training. To further enhance performance, the company should establish a well-designed reward system that is directly linked to employee performance. Rewards should only be offered when employees exceed company requirements. However, non-monetary rewards should also be given attention, as they are cost-free and include recognition and a positive attitude. Training programs should focus on developing communication abilities, risk management skills, work-life balance, language proficiency, customer care, and public relations.

Proper planning in training and development programs by the HRM benefits the organization, customers, and employees. In the banking sector, it is important for all employees to have some knowledge of other roles. This enables the company to make real changes and job modifications, and internal recruitment becomes essential. All training and development programs should be correlated with the company's goals and objectives. Additionally, employees should have a clear understanding of these goals. Team building plays a crucial role in the banking sector for achieving targets.

Companies can implement a reward system for employees who meet team targets. This

should be applicable to all departments of the organization, without any limitations. Employee engagement is crucial in decision-making processes within the company, and HRM should receive employee support for work-related projects and decisions. Building a strong relationship with trade unions is important, as they constantly monitor the organization and are always there for the employees.

Therefore, it is important for companies to have proper policies and procedures in place for all their functions, including HRM's understanding of trade unions. The company can organize activities such as charitable events with trade unions to foster understanding between the two groups.

In conclusion, this assignment focuses on the critical HRM functions within an organization, specifically in the banking sector of the UK. It covers topics such as recruitment and selection, training and development, rewards and performance management, employee participation, and trade unions. The report discusses how these functions are carried out by HRM and highlights their benefits. Additionally, recommendations are provided to further develop these functions discussed within the report.

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