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Employee Retention, Training and Development in Banking Sector: A Review

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DOI: 10.2139/ssrn.2970490

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 PERFORMANCE ENHANCEMENT, TRAINING AND DEVELOPMENT
IN BANKING SECTOR : A REVIEW PAPER

By Ashish Dikshit1

Trilok Kumar Jain2

ABSTRACT

In the present scenario of economic reforms and emerging challenges the banking industry
cannot rule out the importance of training programs. It is through training and skill development
that the banks meet out their profitability and productivity. Training has to be initiated as training
needs assessment which forms the basis for designing, budgeting and implementing the training
program. Refresher training for updating with the latest knowhow is essential even if the targeted
employees are the best. The primary goal of the banks for conducting training is to equip the
employees to bring about customer satisfaction by addressing the customer needs.

INTRODUCTION

Training and development programmes give impetus to knowledge and skill development and
job enrichment of bank employees. It also reduces the attrition rate, increases job retention and
provides value addition to the employees. Training and development is a continuous activity
equipping the employees to perform more effectively. The result can also be seen as an improved
bank culture and profits to the bank.

Training has to be an ongoing process as it plays a vital role in improving the productivity,
efficiency, and effectiveness of managers. Designing Training and development programmes
incurs cost at present whereas the benefit accrues in the form of increased productivity of
employees, increased morale, reduced supervision, and increased organizational stability and
flexibility for the future.

The only way to face the competition in the market is to develop a competent and versatile
workforce. To be successful organizations need to add value and this can only be possible
through competent employees.

1
Research Scholar, Suresh Gyan Vihar University Jaipur ashish.d2410@gmail.com
2
Research supervisor, Dean, ISBM, Suresh Gyan Vihar University Jaipur email: jain.tk@gmail.com

Electronic copy available at: https://ssrn.com/abstract=2983150

(Ravi, 2001) has suggested that Training and Development (T&D) being a core technique of
HRD is the vital tool which contributes effectively towards the competencies of the employees
and a remedy for poor performance. Training bridges the gap between the desired level of
performance and the actual performance. Training equips the employee with required skills not
only to do justice to the current profile but also prepares him to seek responsibility for higher
levels in the organization.

The business environment today and intense competition globally have made it mandatory for
the business entities to train their human resources constantly and as per the emerging
challenges. The training programs have to be designed strategically to meet the business needs,
prior to that the training needs must be identified methodically with the use of the appropriate
tools so that the training program helps in meeting the current competitive market scenario.

An organization‟s training needs are assessed using Training Needs Analysis whose roots
include the gap analysis. The gap analysis is an assessment of the gap between the knowledge,
skills and attitudes that the employees in the organization require to meet the organization‟s
objectives of profitability and productivity and the knowledge, skills and attitudes that the people
in the organization currently possess. Therefore the assessment of training needs or the gap
analysis is carried out prior to designing, budgeting and delivering the training solutions.

According to Cosh, et al, (1998) a firm‟s expansion, developing its potentials and enhancing its
profitability can all be achieved by the implementation of training. Identifying the organization‟s
business objectives or strategy is the basic approach of the HRD.

As per Leigh, et al.,(2000) needs assessment and analysis is considered as the first step in any
HRD intervention.

Whereas according to Desimone, et al., (2002) four levels of needs have to be analyzed when
analyzing the HRD needs, and these four levels are assessing the needs of the organization,
individual employees‟ skills, knowledge and attitudes, and their functional responsibilities as
well as departments‟ needs (Wilson, 1999 and Harrison, 2000), which seemed to be the most
exhaustive technique of analysis.

Kerr & McDougall (1999) contradicted saying that, most companies do not analyze all the four
levels, but rather emphasized on individual employees‟ needs as the basic need requirement.
Wilson (1999) while accomplishing the identification of needs within organization and the
methodology to be used suggested the use of simpler methods such as interviews, questionnaires,
observations, and focus groups to generate information for HRD needs analysis, which could
further be used in designing the appropriate training program

HISTORY

The English Agency House of Calcutta and Bombay started Banking in India on modern lines.
Initially these institutions were functioning on the basis of unlimited liability, also issuing
currency until this privilege was withdrawn in 1862. Speculation and mismanagement were the
reasons of failure for most of the early banks.

Electronic copy available at: https://ssrn.com/abstract=2983150

Under Indian Law, in the year 1860, the principle of limited liability for banks was accepted.
During the time of Swadeshi movement several of the present leading banks were established
because of the encouragement received by the Indian Joint Stock banking. During the period
1900 to 1934 there were a lot of bank failures and crisis in the Indian banking history. The
Reserve Bank of India came into existence in 1935"[18] with the passing of “The Reserve Bank
of India Act in 1934. Too many bank failures received the attention of the Central banking
Enquiry Committee which recommended the passing of a special Act for regulating the banking
system. Hence the Banking Regulation Act was passed in the year 1949.

When Reserve Bank of India was established in 1935 there were seventeen exchange banks.
These banks were mainly engaged in financial foreign trade and financial internal trade too. The
other section of Indian banking comprised of three Presidency banks established under
Presidency Bank Act, 1876. These State Banks were reconstituted in 1921 to form the Imperial
Bank of India. The Imperial Bank carried out limited central banking functions along with
commercial banking business except foreign exchange dealings till 1935.

The Reserve Bank of India received wide powers, through „The Banking Regulation Act‟ 1949
to regulate supervise and develop the banking system. The Reserve Bank of India worked hard to
institute corporate savings to adopt the banking system to the emerging needs of the economy.

The period following 1949 also witnessed the consolidation of banking structure and emergence
of large commercial banks through amalgamations and mergers.

The Banking Regulation Act conferred a wide range of Powers to Reserve Bank of India relating
to supervision and control over banking in India, establishment of banks, mergers and
amalgamations and maintenance of certain operating standards. With the vesting of licensing
powers on Reserve Bank of India, made it mandatory for banks to get its prior permission for
opening branches. It also gave the Reserve Bank of India the authority to conduct inspection of
banks, thus enabling it to make qualitative assessment of the management including the methods
of business from the view point of depositors.

For Reserve Bank of India‟s Supervision of banks the Banking Regulation Act provided the
frame work. Standards for evaluating bank performance were drawn up on the basis of working
of well managed banks which many small could not meet and thus led to the growth of larger
banks. The failure of some banks, mergers, amalgamations etc significantly reduced the number
of banks between 1951 and 1968
[18]

The State Bank of India was constituted on July 1, 1955 as a successor to the Imperial Bank of
India, under the State Bank of India Act 1955 as per the recommendations of All India Rural
Credit Survey Committee for the creation of a state partnered and state sponsored bank.
Subsequently in 1959 the State Bank of India (Subsidiary Banks) Act was passed which enabled
the State Bank of India to take over eight state-associated banks as its subsidiaries, of which the
State Bank of Bikaner and State Bank of Jaipur were merged into one bank as State Bank of
Bikaner and Jaipur and the others were State Banks of Hyderabad, Indore, Mysore,
Patiala, Saurashtra and Tranvancore. This was done with the intension of accelerating the pace of
extension of banking facilities all over the country.

To determine the priorities for grant of loans and advances and to assess the demand for bank
credit from various sector of the economy the National Credit Council was set up in 1968. This
was done under the scheme of social control for bank announced in Parliament in December
1967 to bring about a wider diffusion of banking facilities and to change the uneven distribution
pattern of bank lending. Till then the large industries tended to get bulk of the commercial bank
credit, whereas Agriculture and small scale industries were ignored by the commercial banks.

Government nationalized 14 major banks in July 1969, with the intention of acquiring ownership
of banks to achieve the objectives of social control and to enable banks to play more effectively
the role of catalytic agents for economic growth by extending banking facilities. The 14
Nationalized banks are

1. Central Bank of India

2. Bank of India
3. Punjab National Bank
4. Bank of Baroda
5. United Commercial Bank
6. Canara Bank
7. United Bank of India
8. Dena Bank
9. Syndicate Bank
10. Union Bank of India
11. Allahabad Bank
12. Indian Bank
13. Bank of Maharashtra
14. Indian Overseas Bank.

In 1980, the government acquired 6 more banks which were having a deposit figure of Rs. 200
Crore or more. They were

1. Andhra Bank
2. Punjab and Sind Bank
3. Corporation Bank
4. Oriental Bank of Commerce
5. Vijaya Bank
6. New Bank of India

The total number of public sector Banks became 27 with the merger of New Bank of India with
Punjab National Bank in 1993. Another bank included in the list of Public Sector Banks [22] is
The Industrial development Bank of India (IDBI) set up in 1964 as an apex bank, which
undertakes, besides direct financing of big industrial projects, refinancing of term loans granted
by other financial institutions.

REVIEW OF LITERATURE

Training is a continuous activity that provides the employees with the required skills to perform
well in their job and also enhances their knowledge to cope up with the changing market
scenario. Training and development programmes are beneficial as they provide value addition to
the employees, help in reducing attrition rate, increase job retention and improve the market
share and profitability of the bank.

Requirement for Training

New recruits require induction training so as to perform their task efficiently. A combination of
instructions, coaching and guidance help them reach the required level of performance in their
jobs quickly and economically by performing well. Training for existing employees is necessary
to help them develop capabilities to improve their performance in their present jobs, and also to
prepare them by teaching them new technologies to achieve higher positions. Existing employees
do require fresh training so as to keep them abreast with the latest and to make them more
productive. Training is necessary when a person moves from one to another job so as to bridge
the gap as per the new job demands. Also, training equips a person to improve his performance
and achieve career goals with sincere efforts.

The Employee Development Programs are tailor made to meet specific objectives like
organizational effectiveness, employee productivity and to meet other emerging challenges from
time to time. The various sub processes in the process of management development program
include strategy to face the emerging challenges, reviewing organizational objectives, evaluating
the organization‟s current management resources, determining individual capabilities and needs,
designing and implementing development programs and evaluating the effectiveness of these
programs and finally measuring the impact of the training on the individuals work life quality
and balance between the two.

Dr John Ldama, Dr Mohammed Isah Bazza (2015) in a study on Nigerian banking industry have
analyzed that a major concern to managers is the issue of staff retention, especially skilled staff.
Skilled employees enable organizations to gain competitive advantage; hence retaining
employees to stay in their jobs through motivation is of utmost priority. According to
Awolusi(2013), a highly motivated person works hard towards achievement of organizational
goals, given the ability and adequate understanding of the job, hence he is an asset for the
organization. Motivational variables employed in retaining bank workers in the past may no
longer motivate bank workforce of today is a fact because earlier Monetary motivation such as
end of year bonus, and housing allowances given to staff in bulk were common motivators in
Nigeria‟s banking, and this was good methodology for retention. But now there were persistent
banks‟ failure, a study conducted by Adeyemi, (2011), Gunu and Olabisi, (2012), proved that
Nigeria‟s banking sub- sector witnessed tremendous failure at different points in time due to poor
performance, as a consequence of inadequate skilled manpower.
Young and enthusiastic bank employees see training as the most important motivational factor
for them to stay on their jobs. Training and development are motivators and sources of ideas and
innovations that safe guard‟s organization against future workforce turnover, motivating them to
stay with the organization. When employees‟ job is aligned to organizational needs and the
employees are given appropriate training to perform the task, employees‟ job performance and
willingness to work for the organization increases.
When the employees are given appropriate training as per the job requirement and in line with
the organizational needs, the employees‟ job performance and willingness to work for the
organization increases, resulting in organizational success.

Barringer (2005), in his study made a comparison of rapid- growth and slow growth firms, he
found out that rapid-growth firms used training and development of staff to achieve their
objectives and hence they emphasized on development of staff to a significantly greater extent
than their slow-growth counterparts, so the author concluded that training is positively related to
staff retention and job satisfaction.

Training and Development

According to Michel Armstrong, “Training is systematic development of knowledge, skills and

attitudes required by an individual to perform adequately a given task or job”.
According to Edwin B Flippo, “Training is the act of increasing knowledge and skills of an
employee for doing a particular job.”
Dale S Beach has defined training as, “Training is usually considered as the organized procedure
by which people gain knowledge and increase skills for a definite purpose”

Training and Development – Distinguishing Features

The concept of „Employee training‟ refers to enhancing the Technical and Operational skills
related to workplace whereas „Management Development‟ refers to developing the employee
specifically in the areas of Administration, Supervision and Principles & Techniques of
management.

Training Needs Identification

A “need” refers to the gap between what skills are present and what skills have to be acquired so
as to improve productivity.
If we conceptualize „need‟ then it refers to a gap between the organizational expectations and the
present scenario. It actually focuses on improving the substandard performance to achieve
organizational expectations.
The main purpose of assessment or analysis is to gauge the way things are and the way they
should be as per the organization‟s expectations, referred to as the performance gap.

Virmani and Seth (1998) state that the need for training should be analyzed, keeping in mind the
goals and objectives of the organization. It should help in increasing present efficiency keeping
in mind the future needs and growth and development of the organization. The training needs
identification process helps in perceiving the goals and objectives of the training activity.
Gautam, V. and Shobhana V., (2003) suggested three types of training needs:

1. Organizational needs:
These refer to the aims and aspirations of the organization i.e the overall direction in which the
organization as a corporate entity is focusing on / heading towards.
2. Professional needs: professional needs mean what is required in terms of skill, knowledge
and attitude to efficiently handle the current profile and with best productivity.
3. Individual needs: The individual needs refer to those skills which are required by an
individual to perform in his job with optimal effectiveness and which will also help him in
achieving his career objectives.

Training analysis is part of the system development process which has to be carried out
meticulously else failure and wastage of efforts may result and the desired objectives may not
be achieved.

Training Needs Assessment (TNA) used to assess an organization‟s training needs is an

assessment of the gap between the knowledge, skills and attitudes required to meet the
organization‟s objectives and the knowledge, skills and attitudes that people in the organization
currently possess.
Training needs analysis has to be carried out keeping in mind the objectives and projected
growth of the organization that is facing the emerging challenges.
TNA has to be carried out very methodically before designing, budgeting and delivering the
training program. The output of the TNA is considered to be a guideline for designing the
training programs. It is also very useful to set appropriate goals for training and ensure that
trainees are ready to participate because it contains a thorough needs assessment before training
is designed and delivered.
Training Needs Identification is a perennial activity taking place in the organization as every
change in the business environment will have its impact on the training system and it has to be
redesigned to meet the emerging challenges.

Training and Skill Development in Banks

The banking sector in India is undergoing rapid transformational growth on year to year basis,
hence to face the future challenges there has to be fullest support of all the employees to the best
of their abilities, to face the rapid technology advancement, increasing market competition and
stringent viability norms implemented on time to time basis. Training is one such HRD measure
that helps the banks to face the emerging challenges.

The banking staff needs to be rigorously trained in handling customer care services, behavioral
and operational areas of banking business.
As already discussed the training needs have to be assessed regularly through assessment
techniques like task analysis and performance analysis, which needs to be conducted through
surveys, or on the basis of information provided by the Departmental heads, reports generated
through 360 degree feedback systems and feedback from customers. Large banks conduct
training programs through a dedicated Human resource department having full time HR team
controlling all the training and development functions of the Banks or by engaging external
trainers coordinated by the HRD department of the bank. Presently the Banks have become quite
aware of the importance of training and development of their staff, in order to have a competitive
edge in delivering high quality services to the customers, as compared to their competitor banks.
Previously banks use to hire young college pass-outs as apprentices who were given initial
training as apprenticeship or on-the-job or formal training in basic routine operations for a longer
duration. Management positions were filled through open competitive exams or internally
through professionals qualifying associate-ship of the Institute of Bankers or equivalent
qualifying exams.

Ramu (2006) presented in his study that designing and implementing an effective training and
development program was an investment for the present whereas the benefits will be harvested in
the future.
Badhu and Saxena (1999) emphasized the fact that training and development should be an
ongoing activity based on a well defined training policy and an updated training manual based on
the HR guidelines. There should also be well defined Executive Development Programmes that
would help in improving the efficacy productivity and efficiency of the managers.
The outcome of training would not be of any use if quality training is not imparted or the focus is
on a wrong area. Normally the focus is on the improvement of skills related to operations,
decision making and interpersonal skills.

As per the study conducted by Kumari and Mishra (2009) organizations and their employees
have to always face changes in products and services, the knowledge and expertise required to
deliver these products and services have to be arranged through HRD interventions. HRD helps
in enhancing productivity and organizational effectiveness ultimately leading to successful work
atmosphere.

Akbar and Mattoo (2010) perceived that a highly trained team of employees contributes towards
organizational success, increased productivity, growth and is undoubtedly an asset for the
organization. In the present market scenario of doubts and uncertainties due to environmental
changes, organizations need to strategically plan and manage the training of the human resources
for stability of the organization. A well analyzed methodology for training delivery for best
results was the need of the hour, was also realized by Government and commercial
organizations.

Srimannarayana (2011) in his study projected the importance of the modern day Human
Resource Management and the varying need from one organisation to another of training and
development.

Ramakrishna, Kumar, Girdhar, and Krishnudu (2012) have strongly projected in their study that
Human Resource Development (HRD) has to proactively take up the task of developing the
required skills in the employees so as to face the challenges of the emerging markets. The bank
management not only has to devise strategies and make plans and policies, but need to see to
their implementation very strongly and effectively.

Jaspreet kaur (2016) in her study on a sample of 85 employees covering all Canara bank
branches in Kurnool District revealed that the employees strongly agreed about the necessity of
training and development programmes, have attended more training and development
programmes, majority of the employees have rated the trainer‟s as good with regard to their
preparation, employees praised the trainers‟ for creating a congenial learning atmosphere and
also the employees have been given overall rating for training and development programmes on
the basis of their proactive involvement.

Jadhav (2013) conducted a study on the training and development programmes undertaken by
banks for their employees to cope up with the economic reforms and to maintain the productivity
and profitability. The main objectives of the study were to analyze the efficacy of training and
development programmes for employees and to correlate whether the objective of achieving
customer satisfaction had been met with by the employees by discharging their duties in a more
effective manner. For this study a sample of 40 employees was selected by the use of random
sampling from prominent banks like HDFC, ICICI, Vijaya bank, Bank of Baroda, and Dena
Bank located in suburban area of Mumbai and primary data collected through questionnaire
filled by the bank employees working in these banks. The study concluded that both private and
public sector banks conduct training and development programmes for their employees to
increase their efficiency and profitability. Banks conduct training programmes to enhance the
knowledge and skills of their employees, and the result of this value addition is customer
satisfaction. The present day growth of the banking sector in India can be attributed to the skilled
manpower developed as a result of training and development due to the focused efforts of the
HRD team.

Mohanty (2011) has explained through a study that how Liberalization, Privatization and
Globalization have changed the scenario of the emerging markets and presents various
challenges for the corporate world. The present scenario is looked upon as newer challenges for
the human resources. New skills and abilities have to be acquired by the employees to face these
challenges. Continuous training acts as a strong foundation for the highly skilled and motivated
team of employees. Hence training is one of the most important aspects in the Human Resource
Department‟s endeavor to improve overall performance of an organization from time to time.
The highly effective training interventions can bring about significant improvement in the
working of the organization. Training helps an organization to go green by making its employees
more effective and productive, and ready to face emerging challenges.

Nagar (2009) has presented through a study the effectiveness of training programs being
conducted by commercial public as well as private sector banks. The area of study was confined
to the staff training centers of State Bank of Bikaner & Jaipur and The Bank of Rajasthan Ltd.,
chosen by the researcher. The data is collected through a structured questionnaire based on
various aspects of training programs. The study focused majorly on the opinions received from
the trainees regarding various aspects of training like course duration, library facilities, trainer
performance, teaching & computer aided facilities and other infrastructural facilities available.
The calculated t values were found to be less than table value of t, hence null hypothesis is
accepted or hence there is no significant difference in the opinion of respondents at the two
sample staff training centers chosen for the purpose.

Onattu (2005) in his study projected the need for qualified and trainable employee as a
mandatory factor to compete in the global market for competitive success. The study was
conducted with a purpose to generate information that could be used by the industry, policy
makers and the consultants to develop appropriate training and development interventions. The
present study was based on primary data which was collected with the help of a questionnaire
filled up by a sample of 50 respondents who were approached.

Raju (2005) contributed by conducting an opinion survey on the various aspects of training like
management‟s attitude, selection process, quality of training, impact of training on productivity
of the individuals being trained and further post-training assessment on the basis of feedback and
other criteria in different categories of banks in Coimbatore, taken as a sample. A questionnaire
was prepared using various aspects of training and opinion was sought from 154 employees of
24 banks in Coimbatore, chosen as target respondents.

Purohit (2012) contributed by studying the existing policies practiced in co-operative banks to
evaluate the level of HRD practices, to assess the satisfaction level of employees regarding HRD
practices particularly Training and development & Reward and recognition practice being
implemented for the employees for outstanding performance.

Chellappa (1976) proved by a study that training is a process of upgrading people in terms of
knowledge, skills, attitude by using the methodology of demonstration, instructions, practice and
participation with added motivation. Durgaprasad, and Srinivasa (2001) present that to meet the
emerging challenges of the changing organizational environment Training and Development
equips the employees to perform well.
Prabhu (1999) has rightly said that employees who are conscious about their growth get an
intellectual stimulation through training.

Gupta (1997) has reiterated the fact that the banks being major service sector providers employ a
large number of people hereby contributing substantially to our economy. The large number of
employees if trained properly can contribute aptly towards organizational growth. The process of
training bridges the gap between the demand and supply of the competitive environment and
emerging challenges.

Training and Development should be implemented with utmost diligence in the banks as it
ensures bridging the knowledge gap, development of requisite skills, achieving excellence in all
the activities associated with the bank, building up of proper attitude, helps in facing the
functional challenges and diversification in banks.
Training should not be simple but should be specific, should be oriented towards HRD policies,
should be based on training need, well planned and designed, implemented properly with
assessment of results through evaluation and post training utilization of human resources.

The quality of Customer Service Management training provided depends on following

parameters: measured in terms of accuracy, speed, promptness, change in attitude, concern
towards the customers, and nature of helpfulness and communication skill. As per Muniraj
(1994) training is not proper if there is lot of delay, irregularity, inaccuracy and lack of concern
while dealing with customers.

Rao (1982) has presented through a study that training should not end with the instruction.
Training to be analyzed in terms of learning preceding it and learning that follows the training.
Training results in modification in behavior as it is a disturbance in the existing pattern of
behavior and belief. The motive of the training to be made clear to the trainees else if is not
accepted and imbibed properly, it will result in total failure of the training programme.

According to Daudelin and Donglas (1997), no training programme is sustainable or supports

itself, that is it requires support for sustenance else it dies out and is a failure. Hence newly
learned skills need to be practiced and supported after careful diagnosis of Psychological factors
distracting an individual from gaining efficiency, motivation and productivity. The present day
Training programmes have become so hi-tech that behavior model training is never thought of or
incorporated hence no relevance given to standards for performance, risk taking, motivational
level, and levels of responsibility, attitudinal behavior and quality of supervision.

Lack of trained and skilled staff provides a hindrance to the computerization of rural bank
branches. To foster training and skill development and to utilize the learnt skill / knowledge on
the job, suitable reward / incentive schemes have to be implemented. On several occasions it has
been found that suitable training has not been given as per the job requirement hence the trainees
lose the skill due to lack of utilization.

According to Culbertson and Thomspon (1980) several banks have shown outstanding technical
competency without any formal training in supervisory skills being provided to the managerial
staff. Some of the competencies developed include communication, leadership and human
relations, ability to motivate employees. This has been perceived as the most difficult to
accomplish development of team members to gain their support and cooperation in the present
day competitive banking environment.

According to Jaspreet Kaur (2012) the Indian Banks have come down from a higher to a lower
position in terms of efficiency and on scales. New challenges have emerged in the banking
environment due to internationalization of the financial system, rapid globalization and also due
to the highly significant advancement in technology. Employees of the banks are composed of
many ethnic, as well as socioeconomic and gender, groups. The banking is facing dual problems
of young and versatile entrant with altogether different expectations joining the bank and
existing employees older in age and with a different mindset.

Customers have also become highly demanding being literate and similar is the case with
employees gaining expertise, education and skills.

Investors have become highly concerned about financial results due to the ever changing market
scenario. The banks too have to face ever changing diverse problems like stiff competition from
large players as well as from small private and foreign banks, positioning the banks in the minds
of customers, delivering new products besides managing customer expectations.
The ever changing market and operating environment requires highly skilled employees who
have the competence to handle the emerging challenges with care and confidence. They need to
handle unstable conditions with zeal and should have a quest for continuous learning.

Investment in human resource is the most important criteria for future growth and development
of an organization. Attracting and retaining the best talent has become uncompromisingly
important at strategic and management level and also at technical and operational level so as to
achieve the best results in terms of profitability and productivity. The role of Staff Training
Colleges need to be redefined and they should refrain from 'headcount'- oriented training
activities to competence and skill development training. This process would ensure utmost
involvement of the STCs in the whole range of training and skill development process starting
from identification of training needs to the evaluation of effectiveness of training given to the
employees and how successfully it is implemented at the work place with benefits to the end
users – our valued customers.

This sort of involvement of STCs would make the entire process of training and skill
development quite meaningful to the banking organizations and would lead to continuous
reviewing of the training process for emerging training needs. Not only would this be sufficient
but the review should also include examining the adequacy of courses, faculty development,
existing training infrastructure, appropriate training material and teaching methodologies. In
keeping the ever changing market scenario, banks have to proactively define and develop
training policies with commitment.

According to Osagie, G. Nosakhare and Prof. Egwu, U. Egwu (2016) the socio-economic
development in most advanced countries and the success of the organization is totally due to its
human resources. An organization in order to remain competitive and financially solvent must
have highly productive employees. In order to maintain human resources an organization must
be focused on its employee satisfaction and retention. The organizations success largely depends
on employees who can quickly change and adapt to the ever changing competitive market, hence
investment in the employees is a must. Training had been narrowly used for the effort on the part
of an organization to instill learning among its employees.

A study by Anthony (1999) discovered the differentiation between training for development for
broadening the skills of an individual for entrusting with future responsibilities and short term
performance oriented endeavor.

Milkovich et al, 1988 cited in Eze, 2005, that training is a systematic process of bringing about a
change in the knowledge, behavior and orientation of existing employees with regard to
employment requirement and employee characteristics. In the modern times organizations have
realized the fact that training is a measure of organizational survival and success, hence staff
training has become mandatory for achieving different levels of organizational productivity.
Hence training is needed by an organization to enjoy competitive advantage and to provide much
needed skills in the employees to meet the present and future requirement.
Hence be it large or small organizations both require equally competent personnel for efficient
and effective management and organizational growth.
Observations and Interpretations related to Training

Jaspreet Kaur (2012) has shared the findings of her study as:
 The Trainer plays a key role in influencing and changing the attitude and skills of an
employee in the organization
 To meet the future emerging challenges and development plans, the banks impart
training to the employees to equip them with better skills and also to improve the quality
and magnitude of work.
 Banks provide training to the employees to acquaint them with the latest knowhow,
introduce new products and develop innovation in employees.
 The bank employees too perceive that to adjust in their job in a better way and to have
additional knowledge they need to be provided with training.
 The supervisor‟s recommendation forms the basis for identifying training needs of bank
employees.
 The aspects which are emphasized during training sessions in banks include: updates on
developments in banking sector, banking theory and product knowledge.
 Training provides immense benefits to the trainees like it improves inter-personal
relation between the employees, creates positive attitude, increase the level of
motivation besides upgrading the knowledge of the employees continuously.
 The Training methodology is different for Private sector and Public sector banks. Private
sector banks use Orientation method for training the employees, Job rotation for
managers and Lecture method for non-managers. Public sector banks use on the job and
off the job training methods, Lecture method for managers and Orientation method for
non managers.
 Banks normally use traditional training methods and less usage is of other methods.

Training and Skill Development in Banks – Emerging Challenges

Several previous researches and a study by Supriya Srivastava (2016) have proved that „Skilled
workforce is the key to strong, sustainable and balanced growth of the organization. Also high
level of „Engagement‟ of the employees transforms into organizational success.
Engaged employees are those who exemplify Hard work, going that extra mile and loyalty. The
success of an organization depends on the employee behavior and the level of his engagement.
Employee engagement can be cognitive, behavioral or emotional. Cognitive engagement reflects
employees‟ beliefs related to the workplace, organization and its management. Behavioral
engagement reflects the amount of labor and hard work employees put in. Emotional engagement
is about how the employees feel about their colleagues, seniors and the company as a whole.
Business success can be attributed to the sum total of positive attitude and beliefs and high-
involvement work practices.
Companies using high performance work systems like employees being recognized for their
efforts, they have access to information about company costs and revenues, they are empowered
to make decisions related to their performance and they are given value addition through training
and skill development, their productivity increases. This was analyzed through a study based on
one hundred thirty two US manufacturing firms as compared to their competitors.

The newer competitive markets and changing trends would cause pressing changes in the
banking sector making them include non- traditional areas like personal investment counseling,
consultancy and research services, venture capital, factoring, merchant banking, mutual funds
and newer financial services products. Remaining in the competition will involve innovation, and
working like top notch banks. These changes related to financial transformations will require
new knowledge, skills and attitudes, and training systems will have to gear up to face these
challenges in the emerging business markets. With emerging modern business ventures enhanced
technology will assist in multifarious operations leading to decrease in the number of routine
workers at bottom level of hierarchy and increase in number of knowledge workers. Skills will
necessarily have to be revamped to adopt newer technology. The newly created scenario will
require new competencies incorporating new profiles and a fresh orientation due to the global
awareness of Indian banks. When engagement is effective and real a strong and effective
association with the organization prevails. Investing in training and skill development by the
organization is very useful as it helps in changing the attitude of employees towards their
colleagues and company‟s clients in a positive manner.

A study by Corporate Leadership Council (2004) - Driving Performance and Retention through
Employee Engagement gave a remarkable statistics that those employees who are most
committed perform 20% better and are 87% less likely to leave the organization indicating the
significance of engagement to organizational performance, good retention policy and
organizational success.

Training and Skill Development – Suggestions

Anjali Ganesh (2012) conducted a study and has suggested that: For superior results change in
behavior has to be made through Human Relations and Interpersonal Skills training,
 Lecture method is useful for mastering analytical and conceptual skills.
 Staff Training Colleges (STCs) to have more qualified and talented staff so that the
faculty are free from administrative and clerical duties and would allow them to do
justice to the training program
 More training programs on marketing and customer service as they help in generating
more business for the bank
 Employees training needs status has to be properly analyzed to avoid a mismatch and
Proper post training utilization of the employees would ensure high returns in terms of
performance
 Faculty selection at the STCs to be handled very efficiently, trainers to be rewarded and
attitudinal training enabling those faster promotions, awards and career growth.
 An advisory role as a consultant to the top management can be entrusted to the trainers.
 For efficient customer service both clerical and sub-staff to be given behavioral and
attitudinal training through STCs
 Empower the clerical and sub-staff to attend seminars and conferences selectively so as
to gain more commitment and interest from them.
  Thrust for more in-house training programs through STCs as better analysis of training
needs, and specialized training programs designed for delivery
 Brainstorming activity in the beginning and feedback at the end should be a mandatory
process at the STCs.
 Faculties at STCs on a permanent basis and not temporarily, for full commitment.
 STC should have an excellent building structure with wide class rooms, library, computer
lab, conference room, meeting hall and relaxation hall in it.
 Trainers to act more like a counselor and assist the trainees in implementing the new
skills gained by the training.
 Regular and compulsory workshops and seminars on Yoga, Meditation and Relaxation
techniques on a regular basis so as to relieve the employees from stress, depression and
interpersonal problems
 More of visiting faculties with expertise to be invited at the STCs
 STCs to conduct more training programs on risks like operational risks, credit risks,
liquidity risks, foreign exchange risks, strategic risks and in the field of International
Banking, External Trade and Foreign Currency Borrowings
 STC faculties to have substantial autonomy in designing training plans, training programs
and their scheduling, changes to be implemented, training budget, program contents and
level of training programs
 The banks should have a systematic training budget.

CONCLUSION

Coherent corporate culture rather than ad-hoc programs bring about development of integrated
and proactive training and development strategy. Training and skill development whether at
entry level or middle management level of the career always helps in bringing about a positive
change. Updated knowledge on current trends in IT and business acumen are visible changes in
the banking scenario present days. Banks are competing with one other while facing the
emerging challenges and going global. Banks in order to meet the growing challenges have to fill
up the information gaps and stop traditional mundane banking activities.
The role of Human Resource Management is very well defined and it is meant “to integrate all
personal activities with each other and strategically with organizational objectives” in the most
beneficial manner both for the employee and the organization. The first major objective of HRM
is to serve the organizational interest in the most beneficial manner; hence it is more of an
investment rather than a cost to the organization. The other resources are best utilized once the
human resources are efficiently utilized. With increase in complexity of jobs in the banking
sector, the importance of employee training has increased tremendously. In order to maintain a
viable and knowledgeable workforce, employee training has to be a commitment with resources.
Effective training of the employees equips them to perform well and also influences the growth
and profitability of the bank. Employee behavior too plays a vital role in improving the
productivity of the bank. Incorporating personality development program through group
discussion, business games and role plays, the senior subordinate relationship can be
strengthened, hereby improving productivity. Banks should proactively implement training
sessions so that the employees take it up with full dedication to enhance their performance and
productivity and to give customer satisfaction so that the banks could face emerging challenges.
The significant and positive influence on productivity in the banking sector could be attributed to
the training and development programs. These attributes include „introduction of new products,
imparting knowledge in addition to the present knowledge, programmes and product
orientation‟, „to train the staff for computerization‟, utilizing methodology like „appraisal
system‟, „technical analysis‟, „personal development plans‟ and „training programmes provided
by other banks‟ and fundamentals/ basics like „sufficiently integrated goals of organization in the
training activities‟, „professional and competent faculty‟, „enabling the staff to use skills at work
place‟, „developing organizational culture and incorporating „latest trends in banking are
significantly strong contributors to enhanced productivity in the banking sector.


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