MBA-7000-P&0 - This is about Human Resource Management Assignment PDF

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This is about Human Resource Management Assignment ...

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Master of Business Administraon EXECUTIVE SUM SUMMAR MAR MARY Y

Effective management of the human capital of any organization plays a key role to succeed in the business they are ventured in. Commercial Bank of Ceylon PLC (CBC) is the largest private sector bank (in terms of assets) in Sri Lanka. The bank has been adjudged as the Best Bank in Sri Lanka for 14 consecutive years and the only bank to represent in the Top 1000 World Banks for three consecutive years. The success story of a bank is highly dependent on the efficient service provided by its employees to the customers. This is because banks provide direct services to their customers and employees are in direct contact with the customers. Therefore, the continuous success of CBC can be directly attributable to the efforts made by its employees in bringing CBC to great heights. This report mainly identifies the importance of Human Resource Management (HRM) and critically analyses the present organizational structure and the challenges CBC has encountered in managing its employees. CBC has a well-established Human Resource Department headed by a Deputy General Manager. The main objective of this department is to support,to achieve the set goals and objectives of the bank through timely supply of required human resources while carrying out the HRM processes which include selection, training and development, motivation and rewarding the employees. Although CBC has a strong and well equipped Human Resources Development (HRD) center to oversee the training and development requirement of the bank, still there are few areas, where the bank should addressed to overcome issues in relation to career progression , transfer policies motivation of staff, change management etc.. Therefore this report will also discuss the Kurt Lewin’s three stage process of change theory to manage the proposed changes within the organization.

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TABLE OF CONTENT 1.0 2.0 3.0

4.0

5.0

7.0 8.0

List of abbreviation Introduction 2.1 Objectives of this report Best Bank in Sri Lanka 3.1 History of the bank 3.2 Performance at a glance 3.3 Present organization structure 3.4 HR Practices followed by CBC 3.4 People Management approach of CBC Managing Human Resources at CBC 4.1 Employee recruitment and selection 4.2 Training and development 4.3 Career progression 4.4 Critical evaluation of present people management approach of CBC 4.4.1 Career advancement policy 4.4.2 Transfer policy 4.4.3 HRD policy Change Management 5.1 Proposed Change 5.2 Managing Change 5.2.1-Planning Stage-(Unfreeze) 5.2.2-Implementation-(Transition) 5.2.3-Evaluation of outcome-(Freeze) Conclusion References

PAGE NO 03 04 04 04-07 04 04 05 06 07 07-12 08 09 10 10 10 12 12 13-15 13 14 15 15 15 15 16

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1.0 LIST OF ABBREVIA ABBREVIATIONS TIONS

BOC

-

Bank of Ceylon

BOD

-

Board of Directors

BT

-

Banking Trainee

CBC

-

Commercial Bank of Ceylon PLC.

CBF

-

Certificate in Banking and Finance

COO

-

Chief Operating Officer

DBF

-

Diploma in Banking and Finance

DGM

-

Deputy General Manager

HR

-

Human Resources

HRD

-

Human Resource Development

HRD

-

Human Resource Development

HRM

-

Human Resource Management

JEA

-

Junior Executive Assistant

JEO

-

Junior Executive Officer

MD

-

Managing Director

Mn

-

In Millions

PB

-

Peoples Bank

Rs.

-

Rupees

SBU

-

Strategic Business Unit

SL

-

Sri Lanka

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2.0 INTRODU INTRODUCTION CTION CBC is the largest private sector bank in Sri Lanka (SL) with 235 branches and employs 4,700 permanent employees and 650 employees on fixed term contract. The Bank has been recognized as the best bank for 15 consecutive years by USA based Global Finance magazine and has been the only local bank to be ranked among the top 1,000 banks of the world for 3 consecutive years. Vision statement "To be the most technologically advanced, innovative and customer friendly financial services organization in Sri Lanka, poised for further expansion in South Asia" Mission statement "Providing reliable, innovative, customer friendly financial services, utilizing cutting edge technology and focusing continuously on productivity improvement whilst developing our staff and acquiring necessary expertise to expand locally and regionally" 2.1 Ob Objectiv jectiv jectivee of this rep report ort

The report will critically analyze organization structure of CBC, Challenges & issues face by the organization due to the present structure and to address the issued by providing a suitable structural change for CBC

3.0 Best Bank iin n Sri Lanka 3.1 History of the bank The roots of CBC could be found early 1920’s when Eastern Bank of England (EBE), a British overseas bank established a branch in Colombo which gave the start for this long journey of CBC. In 1957, EBE was acquired by Standard Bank England, and after a decade later in 1969, CBC was duly incorporated as a Licensed-Commercial Bank in the country. Over the years CBC grew strength to strength to become the benchmark private-sector bank in the country, providing superior banking-services to its customers. Keeping in line with their vision to expand in the South Asia, in 2003 the CBC ventured into overseas markets by acquiring the operations of Credit-Agricole-Indoseuz in Bangladesh which made CBC the first SL Private-Bank to establish operations outside SL. 3.2 Performance at a glance CBC is the third largest private sector bank in SL and the third largest bank in the country falling behind to the two largest state-owned giants, Bank of Ceylon (BOC) and Peoples Bank (PB). CBC’s total product portfolio can be divided into two, namely deposits and advances and offers array of products covering all segments of the market. Although the main competitors of CBC are 4

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BOC, PB (state banks) and Hatton-National-Bank (Private bank) CBC has been able to secure its market share as the 3rd largest bank in SL for the decade and the performance highlights of the bank is as follows . Year

2013 2012 2011 2010

Deposit Portfolio Value (Rs. Mn) Market Position 451,152 3 390,611 3 318,461 3 259,779 3

Advance portfolio Value (Rs. Mn) Market Position 390,611 3 343,797 3 283,344 3 234,021 3

Net Profit Value (Rs. Mn) Market Position 10,446 3 10,098 3 8,048 3 5,523 3

Figure 3.2 Performance at a glance (annual Report 2013 / CBC-Research & Development-Department)

3.3 Present or organization ganization structure

Figure 3.4 HRM Hierarchy (CBC Intranet)

3.4 HR Practices followed by CBC Employees are the most valuable asset for any organization. CBC has recognized the importance of their human capital and has taken adequate measures to manage them effectively & efficiently. The HR policies are treated as strategic initiatives by the bank and have appointed members at the highest level to oversee these policies and functions. HR Vision – “To be the most sought after HR partner recognized for creating convenience through best practices in managing talent”. 5

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HR Mission – “Orchestrating people talents and organizational capabilities to inspire robust performance and greater convenience to people”

Figure 3.4 HRM Hierarchy (CBC Intranet)

HR-Department plays a critical role in achieving CBC’s strategies. At present the keeping in line with the vision statement of the bank, CBC is following an expansion strategy aiming to increase its presence in the region. CBC has taken up several key initiatives to achieve this ambitious task by spreading the branch network not only to Bangladesh but countries such as Maldives, Myanmar and UAE during the past year. The HR - department plays a vital role in this strategy through recruiting the right talent, developing the right skills and retaining/managing them by rewarding accordingly. When it comes to employee relations, the author of this report believes that the HR department has treated the employees fairly, and taken fair effort on developing them and motivating them. However there are few shortcomings that the company should try to improve. These will be discussed in detail in the coming chapters. 3.4 People Management approach of CBC People management is the ability to manage and develop people and gain their trust and cooperation to achieve goals and objectives of any organization. The people management or human resource management (HRM) approach adopted by CBC cannot be directly attributable to one technique because of the mix HRM-approaches can be seen at different levels of the bank. As a result understanding the HRM-approach followed by CBC was extremely difficult. This was mainly due CBC is being a large scale organization with much strategic business units (SBU). However, the author of this report who has been an employee of the bank for more than a decade believes that with the recent change in the top management, there had been a visible change in the leadership style adopted by the bank. At present the leadership style of CBC can be identified as 6

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more democratic compared to the autocratic leadership style prevailed in the bank for many years. As a result the HRM approaches of CBC also in the transformational era from “hard HRM” to “soft HRM” approach to suit the new leadership style.

HRM Factors Organizational structure Leadership Style Communication Training and development Appraisal system Delegation of authority

Analysis of HRM Approach of CBC CBC’c focus Tall Hierarchy More towards autocratic style One way communication High priority Based on individual performance High

HRM approach Hard HRM Hard HRM Hard HRM Soft HRM Hard HRM Soft HRM

(Figure 3.4 Analysis of HRM Approach of CBC)

The challenges and issues the or organization ganization faces in the area of people management. A factual and realistic finding of the or organization’ ganization’ ganization’ss current challenges and issues- (20%)

4.0 Managing Human Resource Resourcess at CBC Composition employees’ of CBC can be mainly divided in to two sections namely, permanent and contract based employees. The contract/outsourced employees are mainly involved in most of the low level duties such as janitorial services and other related work. The author in this report will only focused on the employees of permanent cadre of CBC. Permanent cadre of employees consists of two categories, namely executives and non-executives. Further classification of under the permanent cadre is shown below (Data for below mentioned classifications and analysis obtained from Annual Report of CBC for the year 2013);

Figure 4.0.1 Staff composition by Grade (Annual report 2013)

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Figure 4.0.2 Staff composition by Age and Gender (Annual report 2013)

Figure 4.0.3 Service analysis of employees (Annual report 2013)

4.1 Employee recruitment and selection The recruitment process of CBC is handled by a separate unit established within the HR department to specifically oversee the recruitment and selection functions of the bank. This division is headed by a senior manager and consists of 21 staff members including 3 executives. The entire process with regard to recruitment such as Job-Analysis, Job-Description, Personnel-Specification followed by advertising is handled by this department. As in most organizations the recruitment of staff is carried out by internal and external recruitment processes. Out of the aforementioned two recruitment process CBC is heavily dependent on the internal-recruitment system to fill up vacancies within the organization. Generally all intakes to the executive cadre would be by way of promotions from non-executive grades. However the bank would approach external avenues to fill up executive-position depending on requirement/situation, where internal-resources are not available. Common external-recruitment of executives would be 8

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way of a competitive process of selection as Management-Trainee. Also the bank would resort to external-resources to fill-up very senior and highly technical positions of the bank when the requirement arises. However, apart from the above, the entry-level positions, which are the Banking-Trainee (BT) positions and Management-Trainee (MT) positions, the bank, rely on the external-recruitments. 4.2 T Training raining and development CBC is one of the few banks’ that has been constantly investing on their human capital to develop and to equip with the knowledge which will in turn enhance the quality of its workforce. The bank provide primarily on-the –job training for the entry level recruits and refresher programs for the trainees and monitor their progress periodically. For other staff members the HRD center organizes various training sessions on a regular basis to update the current/new developments taking place in the banking as we as the in the industry. In 2013, the HRD-center has conducted 484 training-programs spanning over 153,928 training-hours by incurring a total cost of Rs.54.9Mn for training and education of the staff members. Furthermore CBC has taken several initiatives to encourage/ increase the participation of its staff for these learning sessions by implementing the following; ⦁ ⦁ ⦁ ⦁ ⦁ ⦁ ⦁ ⦁ ⦁

Encourage staff members for attending training programs by providing meals and refreshment. Providing travelling and lodging expenses for staff members who are arriving for training from distant branches. Encourage staff members to follow professional exams by recognizing those qualifications for accelerated-promotions. Provide duty-leave for attending training-programs. Maintaining mini-libraries in every branch while operating a fully-fledged library at head office. Maintaining a comprehensive e-learning site. Internet access for all managers. Reimburse membership fees of one professional body. Pay Honorarium payment for employees who were successful in banking exams conducted by IBSL.

4.3 Career progression 9

Master of Business Administraon Every 3 years with good performance

Executive (4 years of experience or 3 years of experience with banking exams stage 2 and good performance)

Junior Executive (7 years of experience or 3 years of experience with banking exams stage 1 and good reports)

Junior Executive Assistant (JEA) (Successful compleon of on the job training of 2 years)

Banking T Trainee rainee (BT) Figure 4.3 Career progression diagram CBC

Career-progression in CBC is mainly based on performance-appraisals. The performance of every staff member is appraised annually and a performance rating is given. The staff members with higher ratings in consecutive years are more likely to be promoted. 4.4 Critical evaluation of present people management approach of CBC The author of this report is in view of that the overall HRD policies adopted by CBC are at very high standards. However the author has identified certain areas that need to be improved in managing the people. 4.4.1 Career advancement policy Career-progression practices followed by CBC have not lived up to the employees-expectations. In fact the slow career progression has been widely criticized. Especially young-employees prefer a quick career-progression path which is linked to the performance. The author of this report believes that there should be amendments to recognize high performance workers. Also the author does not agree with giving preference merely based on qualifications or experience of an employee when it comes to promotions. The author believes that it should be a mix of both work-experience and qualifications which will give priority against the mere qualification or experience of an employee. The present system at the bank allows for professionally qualified staff to become eligible for 10

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promotion much faster than those not holding paper qualifications. This would allow the bank to attract qualified candidates. However, the lack of experience may lead to a lack of practical knowledge that can only be learnt through experience. This in turn would affect the sustainability of the business when senior cadre is unable to deal with practical issues. Bias or preference towards professionally qualified employees over employees that are eligible based solely on seniority would result in the latter considering joining other institutions. Even in the event that such employees do not leave the bank they would naturally harbor animosity towards those that are promoted due to qualification and result in a break down in interpersonal relations. Either outcome would result in negative employee satisfaction affect the sustainability of the organization due to the loss of input from experienced staff.

Figure 4.4.1 New Staff Recruitments & Staff Attritions (Annual report 2013)

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Figure 4.4.2 Employee turnover (Annual report 2013)

As mentioned in the above graphs the employee turnover has been increased in 2013 YoY from 3.28% to 4.29% which reflects the downwards trend in the employee satisfaction. The author believes that this will tend to increase further in future if necessary rectification measures were not taken immediately. 4.4.2 T Transfer ransfer policy Streamlining and adherence to the transfer policy allows staff the knowledge that no ad hoc and politically motivated transfers can occur. As such transparent transfer process would result in employee confidence in the system and ultimately contribute positively to employee satisfaction. In the present transfer policy, building up of employees with special skills is limited since they were transferred upon completion of number of years in a particular SBU. Also, transferring of employees to rural areas will also be a demotivating factor. CBC should give more attention to recruit and deploy employees to the branches where they can access from home as much as possible. As a result this will be a definite motivational factor for an employee to work in the organization for a longer period. In addition, CBC can use their personal contacts to attract and retain valuable clients in the vicinity. For rural branches, the employees who can travel to branch more easily should be selected. Retaining specialized employees in the same branch / department – This will add to the value work force by enhancing the mastery in employees thereby making the work more convenient and productive. 4.4.3 HRD policy At present the training of staff members is done in a quiet satisfactory manner However when it comes to specialized-training, the practice has been to call nominations from the respective managers in selecting staff members for training. The author recommends that this procedure should be suitably amended and the selection of the employees should be done by the HRD in order to avoid selection of staff members on personal preferences of the supervising managers. The needed chang...