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CHAPTER V

FUNCTIONING OF HRDDs AND ROLE OF


HRD IN COMMERCIAL BANKS
CHAPTER V

FUNCTIONING OF HRDDs AND ROLE OF HRD


IN COMMERCIAL BANKS

INTRODUCTION
In the last one decade many organisations have created a new office of
the "HRD Manager". This HRD manager normally heads a new department,
the "HRD Department (HRDD)" (not HR department), reports to the chief
executive of the organisation, has a budget of his own (or atleast an assurance
from the chief executive that there is no limit on the budget), has a few staff
members to assist him, has control over (or atleast an easy access to) data
relating to employees and has a say in the plans and policies of the
organisation. In a few of such organisations the HRD manager's position is
very top level, senior, position equivalent to that of a GM, Vice-President or
even a Director and he is required to look after other aspects of HRM or
administration along with HRD. Such high level positions have been created
either by upgrading the personnel department and bring HRD as a newly added
part of the personnel function or by establishing a new HRDD and slowly
integrating personnel functions into it by enhancing the role of HRD.

Whatever may be the case, today many organisations have a relatively


new office called the HRD manager called by different titles like, Manager
(HRD), Executive (HRD), DGM (HRD), GM (HRD), Chief Officer (HRD),
Chief Manager (HRD), Manager (OD), etc. One can add the prefix of
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'Assistant' to many of these designations or alternately 'Senior' or 'Joint' in some


cases thus making the designation as Assistant Manager or Senior Manager or
Joint Manager, Assistant Executive, Senior Executive, etc. Most of these
functionaries have an independent department or function to look after.

HRDDs AND THEIR TASKS

The main objective of the HRDD is to create a learning environment and


development climate in the organisation. By learning environment is meant a
culture where employees continuously learn from their own experience and the
various learning opportunities the organisation provides. The HRDD should
also be sensitive to the motivational patterns of employees and try to develop
motivation. The HRDD should create an "enabling" culture where the
employees are able to make things happen and in the process discover and
utilise their potential.'

In order to achieve HRD objectives, the HRDD should 2

1 Develop a HR philosophy for the entire organisation and get the TM


committed to it openly and consistently;
2. Keep inspiring the line managers to have a constant desire to learn
and develop;
3. Constantly plan and design new methods and systems of developing
and strengthening the HRD climate;
4. Be aware of the business/social/other goals of the organisation and
direct all their HRD effort to achieve these goals;
Rao,T.V.,The HRD Missionary, Oxford & IBH Publishing Co. Pvt.Ltd., New Delhi, 1990, p.16.
2
Rao,T.V., "HRD Managers and their Roles", Excellence through Human Resource Development,
(Eds.) M.R.R.Nair and T.V.Rao, Tata McGraw Hill Publishing Company Ltd., New Delhi, 1990,
p.83.
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5. Monitor effectively the implementation of various HRD


sub-systems/mechanisms;
6. Work with unions and associations and inspire them.
7. Conduct human process research, organisational health surveys and
renewal exercises periodically and
8. Influence personnel policies by providing necessary inputs to the
Personnel Department/TM.

STRUCTURING THE HRD FUNCTION

How should one structure the HRD function? Should it be a part of


personnel or should personnel be a part of HRD? To whom should the HRD
Chief report to? What are the linkages with other departments? How many staff
should it have? What should be their levels? These are some of the commonly
asked questions. If there is any person or a group of persons in the organisation
already performing the eight functions outlined above or atleast have the
mandate, competence, credibility and motivation to perform these, then there is
no need to create a separate HRDD or group. Most of the time, no such
exclusive person/employee or group of employees exists. The personnel
departments in some organisations have the mandate but not credibility and
competence. Competence and motivation can be acquired or developed, but
credibility to perform such important and complex functions cannot be easily
acquired. In those organisations where 'personnel' function is treated as a
'routine' or 'administrative' function and its activities are limited to controlling,
monitoring, welfare, discipline and other maintenance type activities, the
personnel departments may not have credibility. In such organisations, it is
useful to start a new group or activity with a new 'HRD' identity. In relatively
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smaller organisations it is probably enough to have one such full-time person


with competence, credibility and motivation and give him the mandate. In very
small organisations where it is not feasible to have a full-time person, the role
of performing HRD function can be assigned to one or two employees. Where
there are large numbers of unionised categories of employees, it may be useful
to have separately designated functionaries to exclusively look after HRD for
workmen.

It is not necessary to have a hierarchical structure in HRDDs. In fact a


hierarchical structure may often come in the way of effective functioning of
HRD groups. Some organisations have a tendency to appoint a HRD
manager/Chief of HRD. Sooner the chief wants two deputies and after the
deputies are appointed each of them want a few assistants and each assistant
wants a secretary. The HRDD may thus, grow to take care of itself than of
others. Hence, it will be ideal to have a flat structure in the HRD
groups/Departments.

Reporting

The HRD function is in a way a spiritual function. It should, therefore,


be directly with the Chief Executive of the organisation. The Chief Executive
may need to keep in touch with people in many ways. Hence, both the
personnel and HRD functions become very important instruments to keep in
touch with people. The Chief Executive Officer should have monthly or
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quarterly reviews of the HRD spirit and activities. Such reviews go a long way
in strengthening the HRD spirit and activities.

Links with other Departments

The HRDD has high interdependence with the Personnel Department.


Personnel policies affect to a great extent the motivation and development of
employees as well as organisational health. Therefore, the HRD staff should
closely work with Personnel staff and influence personnel policies. Some Chief
Executives prefer HRD staff to actively participate and formulate personnel
policies. The training function should form part of HRD. Similarly all OD
activities should be a part of HRD. The Personnel Department may keep
sharing with HRD their concerns, manpower plans, recruitment processes,
personnel policy changes, etc., to help HRD contribute to these. Where the
Personnel and HRDDs are separate, the Chief Executive of organisation or the
Director, HR, should perform an integrating role. The HRDD should also have
links with Corporate Planning Department to get to know periodically the
company plans and strategies for future so that the HRD effort can be geared in
this direction. The Corporate Planning activity should take the HRD
functionaries as members of task forces or groups while working out Corporate
Plans. The HRDD may also work in close collaboration with the Industrial
Engineering, Organisation and Management and EDP Departments which can
contribute a great deal in strengthening HRD systems. The Industrial
Engineering and 0 & M Departments deal with issues like job-evaluation,
structuring, work methods, etc., which affect employees. These departments
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can provide useful inputs to HRDDs in their work and in turn may get help
from HRD. The EDP and management systems departments can contribute to
systems development like HRIS, etc.

HRDDs IN COMMERCIAL BANKS

In recent years the HRD movement has percolated in banks and


blossomed in a multi-dimensional manner. A majority of the banks have set up
separate HRDDs. In less than a decade of functioning, HRDDs in some banks
have gained creditable achievements. There are banks where the HRDD is
carrying out only the personnel administrative functions of recruitment,
transfer, promotion, etc., of course, along with the traditional HRD function of
training. The functioning of the HRDD in some other banks show a transition
towards HRD functions. In these banks, along with training, some activities
like manpower planning and performance appraisal have been introduced. A
few other banks have gone much ahead as far as the introduction of new HRD
activities and subsystems such as systematic induction, QCs and staff meetings
are concerned. In addition to introducing these systems, some banks have also
put in appreciable efforts at perfecting certain systems like training and
performance appraisal.

ORGANISATIONAL STRUCTURE OF BANKS

The organisational structure of almost all Public Sector Banks and


Private Sector Banks in India is line-cum-functional in nature.
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CHART 5.1
LINE ORGANISATION OF BANKS

PUBLIC SECTOR BANKS PRIVATE SECTOR BANKS

Four-tier system Three-tier system

Head Office
(Chairman/ Managing Director)
Head Office
(C hairman/Managing Director
Zonal Offices
(Deputy General Managers)
Divisional Offices
(Divisional Managers)
Regional Offices
(Chief Managers)
Branch Offices
Branch Offices (Branch Managers)
(Branch Managers)

CHART 5.2
FUNCTIONAL ORGANISATION OF BANKS

PUBLIC SECTOR BANKS PRIVATE SECTOR BANKS

Chairman!
Managing Director Chairman / Managing Director

I Executive Director General Manager


I
I General Managers
I
I Deputy General Managers [Deputy General Managers
I
Asst.General Managers
Asst. General Managers
Chief Managers

Managers
I Senior Managers
Managers
Chief Officers

Sub-staff Sub-staff
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The line organisation of banks is either four-tier or three tier system and
the same can be observed from the Chart 5.1.

From the chart 5.1 it is clear that the public sector banks have four-tier
system and private sector banks have three tier system of line organisation in
operation. The two select public sector banks have four-tier system, viz., HO,
ZO, RU and BO and the two select private sector banks have three tier system,
viz., HO, DO and BO.

The functional organisation of the public and private sector banks can be
clearly understood with the help of the Charts 5.2,

In the select two public sector banks, they have separate HRDD headed
by DGM along with other departments like Personnel Department, Industrial
Relations Department and SC/ST Cell. The HRDDs in the select two public
sector banks were established in the late Eighties. The HRDDs of these banks
perform the following activities:
1. Preparation of Career charts for all categories of officers.
2. Development of PAS. {Banks have received an exhaustive PAS
format from Ministry of Finance (Banking Division), New Delhi,
which has been devised in consultation with IBA. It is mandatory for
all banks to get Performance Appraisal of their officers in the revised
format.} (See Annexure 3)
3. Drawing out of detailed plan for thrust areas and regular staff
efficiency training.
4. Cadre building through recruitment of professionally qualified
personnel, i.e., officers for administrative cadre, managerial cadre,
business cadre, technical cadre, specialist cadre, HRD/HRM cadre,
Accounts cadre.
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5. Manpower budgeting and study of cost effectiveness of different


activities undertaken by the banks with a view to shed
unremunerative activities. For instance, after 1984, the banks used
Work Analysis and Staff Assessment Sheet (WASAS) for assessing
the exact staff requirements. Since 1990, WASAS was dispensed
with and to maintain recruitment at 0.75% of total staff strength per
annum request for staff is made to BSRB for newly opened or acute
shortage branches. Presently, BSRB zonewise recruitment is followed
to minimise dropouts.

. In the select two private sector banks, they have personnel department
headed by AGM. Under this department, HRD Wing, Personnel Industrial
Relations Wing and Personnel Administration Wing are functioning. The HRD
Wing is looked after by the HRD Manager. The HRD Wingsin the select two
private sector banks were established in the early Nineties. The HRD Wing
performs the following activities:

1. Appointment of officers, clericals & substaff.


2. Recruitment of high level professionals.
3. Transfers of all staff members at various levels.
4. Promotions pertaining to all cadres.
5. Sanctioning of subscription to executives/officers for joining as a
member in clubs/societies.
6. Maintaining of staff inventory.
7. Maintaining of staff position of the Bank.
8. Engagement of temporary clerks at AO/Branches.
9. Maintaining of membership strength in Officers' Association /
Employees' Union/Association.
10. Maintenance of Peons' uniform records at AO level.
11. Granting and cancellation of Power of Attorney in respect of
executives and officers and Power of Authorisation in respect of
Special Assistants.
12. Employment Exchange Returns: Quarterly/Half Yearly.
13. Maintaining of retirement date of staff members.
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14. RBI statement regarding SC/ST.


15. Dealing with resignation of staff members.
16. Maintaining of additional staff requirement chitta in respect of all
branches/offices.
17. Maintaining service agreement in respect of executives/officers.

Number of Employees in HRDD

Table 5.1 clearly gives the number of employees in the HRDDs or HRD
wingwf the select public and private sector banks in the normal course.
Table 5.1
NUMBER OF EMPLOYEES IN HRDDs

Designation Public Sector Banks Private Sector Banks


IB 10B KVB LVB
Officers 7 6 7 2
(including
DGMs)
Clercial 14 13 21 20
Sub-staff 3 2 2 3
Total 24 21 30 25
Source: Official Records of the select banks.

ROLE OF HRD PERSONNEL IN BANKS

Success of HRD in banks calls for clear understanding of the roles to be


played at different levels. In a large organisation like banks, such identification
of organisational positions which can make critical contribution to the smooth
introduction and implementation of HRD is very much desirable. It is felt that
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critical positions in banks which require clear and deep understanding of HRD
are four, viz., TM, HRD manager, line managers and unions.

1. The Role of TM in HRD

The importance of the development of HR (individuals, teams,


inter-teams and the organisation) is being seen and expressed in policy
documents of the various banks. However, unfortunately, the dilemma of
business versus people is still an obsession with most of the banks. While the
TM verbally supports the development of people in action, they perceive
business as more important, and this difference between 'saying' and 'doing' is
clearly reflected in what happens in the banks. Lip service is paid to HRD and
, real attention to human resources is 'postponed' in favour of immediate
business needs. There is no gainsaying the fact that the final test of the success
of a bank is its leadership in its field of business. But there need not be a
conflict and therefore a need to make a choice, between people and business.
Over concern with business, resulting in the neglect of human resources, is a
short-sighted policy. Building human resources may help in the long-run in
achieving business goals. Hence, the choice must be made between the
short-term and the long-term goals. The various roles and related action
strategies/mechanisms are shown in chart 5.3.

From the Chart 5.3, it is clear that the TM need to build a strong image
of HRD, create the necessary climate for its implementation and success,
attract relevant competent people to undertake responsibility, make the line
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managers take more and more responsibility for developing their people and
teams and build HRD as a specialised function in the long-run. This can be
done if the TM team itself experiences the process of HRD, takes interest in
HRD, works through various periodical reviews, provides support both
material and strategic and makes demands on HRD to contribute to salving
problems of the banks. The roles of TM in making HRD effective can only be
played by people at that level. If these roles are weak HRD cannot be expected
to perform effectively.

CHART 5.3
TM's ROLES AND ACTION MECHANISMS FOR HRD
t
Roles ! Action Mechanisms
1. Building HRD image 1 a. Develop Corporate Policy for
and climate HRD.
1. b. Build OCIAPAC culture.
2. Attracting Competency. 2. a. Involve the HRD personnel in
business policy.
2. b. Put demands on HRD.
2. c. Use HRD.
3. Integrating HRD in line 3.a Emphasise HRD as line
management. responsibility.
3. b. Start OD and action research.
3. c. Develop effective systems.
4. Building HRD as a 4. a. Take interest in HRD.
special function. 4. b. Provide support.
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2. Role of HRD Managers


A management innovation like HRD can be initiated and
institutionalised only with a deep commitment and involvement of the top-most
managers in an organisation. But, between the acceptance of the idea by TM
and its institutionalisation lies the process of giving shape, flesh, blood and life
to it. TM requires atleast one person to begin and sustain this process.
Irrespective of the various labels used by different organisations, that person is
the HRD manager. 3

If the HRD manager is placed in the HO, an important role for him
would be to formulate the bank's HRD policies. These then would be discussed
by the TM as well as other levels of managers to make it a desirable and yet
achievable policy. After establishing personal credibility, comes the role of
designing new HRD mechanisms and systems. This should be done through
research and participation of the relevant groups of managers and employees.
Research and participation in design make the new systems more valid and
acceptable.

Implementing new systems becomes the next crucial role of the HRD
managers. It requires design and conductivity of special training programmes
as well as monitoring of the usage of the impact of the new system. In case this
much is successfully achieved, an HRD manager faces a special challenge.
This relates to making the HRD function continuously innovative and
responsive rather than sitting pretty on initial laurels. It would require keeping
3
Gupta, R.K., "Role of HRD Managers in Banks", HRD in Banks, (Ed.) Anil,K.Khandelwal,
Oxford & IBH Publishing Co. Pvt. Ltd., New Delhi, 1988, p.186.
163

in touch with the key managers about the emergent problems, periodically
surveying employee opinions and attitudes and keeping in touch with the latest
developments in the filed of HRD through readings, seminars and conferences.
Use of techniques of creativity within the department and with select groups of
manager would also be helpful.

At the regional level, HRD manager's role would be to understand the


policy thoroughly, through discussions with the HRD functionaries at the HO.
He should as far as possible uphold it in all his discussions with the regional
management. Wherever regional management and the HRD management find
it inappropriate, an HRD manager should influence the HO to modify it or
allow for local experimentation. These local experiments can be in many areas
such as action research projects, job rotation schemes, preparing managers and
staff for performance counselling, QCs, staff meetings, union-management
co-operation, job enrichment and redesign, etc.

The role of HRD managers at the HO and RO tends to differ in detail


though not in spirit. Implementation of the overall HRD policy is the main task
of the regional functionary while formulation of policy is that of the HOs. All
India common interventions in terms of new systems may be formalised by the
HO but generally proper usage and credibility about them is the responsibility
of the RO. A major special responsibility of the regional HRD managers is to
provide expert assistance to regional management and branch managers to
explore more humanistic and research based approaches to solve their recurring
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problems. The HRD manager must constantly invite feedback directly and
indirectly about his own behaviour and the activities of the department. This is
crucial for modelling the spirit of HRD as well as for continued relevance and
credibility of the HRD function.

3. Role of Branch Managers in HRD

The most important agent in developing human resources in any bank is


the Branch Manager (BM). Just as the effectiveness of any bank depends on the
collective effectiveness of its branches, the effectiveness of the HRD function
also depends on the collective effectiveness of its BMs as agents of developing
branch staff. It is quite conceivable that a bank fails in its HRD function but
some of its BMs succeed in the HRD function at the branch level.

The following are some of the important roles the BMs should perform
in order to ensure their own effectiveness: 1) development oriented leadership
role; 2) creating HRD climate in the branches; 3) developing a family culture in
the branches; 4) inducting new employees, socialising them and creating a
good work culture; 5) managing the boundary role through interpreting
management policies to a branch and taking up branch problems to higher
levels of management; 6) performance appraisal development and counselling;
and 7) grievance handling and maintaining good relations with employees for
ever.
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4. Role of the Unions in HRD


An important but least visible challenge to trade unions lies in the need
to respond to the diverse sets of expectations and aspirations of employees.4
They are trapped between the factors calling for change and forces opposing
the change. Unions can play important roles in setting the stage, designing and
participating in HRD programmes, thereby attempting to integrate them into
their representational role in the organisation. On the other hand, over a period
of time, these efforts are likely to build a higher involvement of the employees,
create more satisfaction and give expression to workers aspirations. The
pressures for change are so high that the unions need to modify their traditional
role at the work place and start focusing on developmental roles. Some of the
developmental roles which unions can play are 1) initiation of HRD; 2)
communication; 3) counselling; 4) education and training; 5) welfare; 6) role in
family and vocational guidance; and 7) research.

In order to play the developmental roles effectively, trade unions must


professionalise. This will mean HRD to function within the framework of
unions. Since long, trade unions have ignored developing union leadership.
This has strongly served the cause of vested interests which want to stick to
leadership positions and it seems to have created intra-union frictions. It also
deprives the unions of new thinking, new approach, etc. New roles for the
unions will focus on improving the psychological well-being of the workers
and have built certain roles to achieve the same. The new development role will

° How some firms are managing without Unions ?, International Management, June, 1979.
166

require several new skills in the union leadership to enable them to play these
roles. These roles are depicted in the Chart 5.4.

CHART 5.4
ROLE OF UNIONS
Traditional Role Focus: Developmental Role Focus:
Economic well-being Psychological and social
well-belag
Bargainer Explorer
Negotiator Trainer
Fire-fighter Educator
Agitator Counsellor
Grievance handler Collaborator
Game-player Motivator
Blackmailer Facilitator
Crisis dealer Communicator

ROLE OF HRD IN PROVIDING CUSTOMER SERVICES

Banks, like manufacturing organisations, have to work in a competitive


environment. Product differentiation is often employed as a major technique to
survive in a competitive market. Since product differentiation on the interest
front and service charges is ruled out for banks, it appears that banks have to
bank their hopes on improvement of customer services only. Therefore, in
order to mobilise more deposits and attract customers to use the services of a
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particular bank, that bank has to necessarily differentiate its customer services,
from the other banks. Not only different customer services, but banks have to
offer better customer services to survive ultimately in the competitive market.
There is ample scope on the customer services front for a bank to employ
innovative and novel techniques and stand apart distinctively from the rest.

The quality, efficiency and effectiveness of customer service necessarily


depend on the way the bankmen at the counters and behind the counters
interact with a customer when the latter approaches it. To attract customers a
bank which has better quality of human resources can have an edge over others.
Here comes into the picture the role of HRD programmes. It is the HRD
programme which moulds the behavioural pattern of bankmen. The BM as a
leader of the branch team should make sincere attempts and take conscious
efforts to gellerdte 'teairr spirit' among all staff. In short, he should strive hard to
build an image of himself as an adorable and respectable leader of a well-knit
team. A well co-ordinated team work at the branches is absolutely essential to
ensure sound operations and effective/quick and courteous service to the
customers.

The existence of sizeable human resources does not, by itself, ensure


effective and efficient customer service. It is rather the development of human
resources through rational training programmes that the targets of better
customer service can be achieved. While formulating different training
programmes with a view to improving customer service, the points to be

Shastri P.P., HRD and its Role in Customer Service in Banking Industry, IBA Bulletin, Vol. VIII,
No.9, September 1986, p.200.
168

considered are formation of homogeneous groups; training programmes for


heterogeneous groups; pre-job induction training programmes; on-the-job
training programmes; and periodical post-job induction training programmes.

In fine, the quality of customer service will play an increasingly


important role in the business dealings of commercial banks. Therefore, banks
have to prepare and channelise their human resources towards offering better
customer services. It is the law of competition and survival of the fittest that
plays a vital role in the competitive environment. The choice is either to prove
or prevail or to become feeble and weak. Therefore, a bank offering better
customer service will go a long way not only in surviving in the globally
competitive market but also in strengthening and establishing itself firmly like
a solid rock in the industry,