An age-old saying is that the most important asset of an organization is its workers. If this saying is valid, and it is, then handling a work force becomes vital for the organization. Managing people is a continuous process from the time people join an organization until their retirement — and at times even beyond that.
In smaller businesses, this job is done by the owner (proprietor) himself, whereas in large-scale organizations, it is the responsibility of the management. The importance of people management is undoubted but at the same time, managing human beings is indeed a delicate, complicated and a difficult job. People are individuals, having distinct behavior, different and sensitive natures, varying mindsets, emotional variations, different affiliations etc. The fabric of human relationship is very delicate, thus managing them requires skills and effective planning. Although many individuals can work in groups/teams but to evolve, a joint effort for the achievement of organizational goals is a difficult task for the management — making the management of people in a large-scale enterprise is a ‘shared responsibility’.
Human resource is the least mobile of the four factors of production and (under right conditions) it improves with age and experience, which no other resource can do. It is, therefore, regarded as the scarcest and the most crucial productive resource that creates the largest and long-lasting advantage for an organization. Loads of books have been written globally on human resource (HR). In this article, some aspects of HR in the banking institutions will be discussed.
To achieve its objectives, any bank undergoes one of the most important processes, which is Strategy Formation. The importance of Strategy Formation is such that it is the business of the Chief Executive of the bank and his senior colleagues, backed by strong analytical support. This process covers very important areas and human resource is on top of the list.
With the passage of time, as a result of development, things became advanced and complex globally at an extremely high speed. In this scenario, advancement in technology remained in the limelight with great focus on Information Technology. Such changes did not, of course, remain in isolation. These changes, as a matter of fact, encompassed everything and organizations were no exception. Changing environment, a complex market, development of different financial instruments and cut-throat competition compelled the banks to realign their business strategies, on do-or-die basis. Thus, banks tuned themselves accordingly to meet the market challenges, with the result that their organizational setup, systematically, kept on becoming complex. The more complex the organization, the more difficult it is for humans to manage it.
Some people are favored by natural aptitudes, but all must train themselves to provide leadership in a way that the organization needs. The training policies should be such that the workers according to their respective levels of hierarchy are trained and refreshed on different professional issues and aspects to become competent enough. A continuously run training process ensures ‘succession plan’ is in place and produces leaders for the organization. Moreover, it addresses the issue of ‘sudden leadership’ where, in case of emergency an ‘automatic choice’ is not trained enough, then it would be rather risky for the organization to make this choice.
On one side we have developed extremely complex markets, intense challenges due to highly sophisticated IT, globalization etc. Banks have to make use of these developments to maximize the profits. On the other hand, with the passage of time, different risks are also becoming more complex thus more challenging; many of the risks were perhaps not even known to the banks some decades back. Banks have to avoid such risks to avoid losses. To reach a win-win situation, it is the need of the hour to develop human resource, to keep pace with the developments and to counter, to a greater extent, the risks in any form.