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This report is a brief understanding of role played by Human resource management in banking sector. For this assignment I have chosen Royal Bank of Scotland hereafter will be abbreviated as RBS throughout this report. In this report I have tried to explain few HRM objectives, policies, functional areas along with the information regarding the HR planning and implementation methods and their effectiveness in the RBS.
Human resource is one of the valuable natural resources for the country's economy. It is the wealth of the country. In the perspective of banking, human resource has a greater importance and a most valuable role to play. The deployment of human resource through proper and efficient selection, training and development, is called Human Resource Management. The success of any bank largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization.
The Royal Bank of Scotland was founded in 1727. Originally opened with a staff of only eight people, its first site was in the Old Town of Edinburgh. For more than half a century, RBS traded exclusively from the Scottish capital, but in 1783 it opened first branch in the fast-growing trading city of Glasgow. Spurred on by this success, many more branches opened across Scotland and then, in 1874, their first office opened in London. In the twentieth century RBS expanded rapidly, acquiring several English banks including Williams Deacon's Bank, Glyn, Mills & Co and Drummonds Bank. In the 1950s their mobile banks began serving rural communities, and by 1960 their first office opened in New York. In 1969 their merged with National Commercial Bank of Scotland to achieve a greater market share in Scotland. In the 1970s they embraced computerisation and introduced a new generation of multi-function cash dispensers. In the 1980s they launched Direct Line motor insurance and bought Citizens Financial Group in the USA. By the 1990s they were at the forefront of telephone and internet banking. In 2000, they acquired National Westminster Bank in the biggest banking takeover ever in Britain and so inherited a rich heritage covering more than 200 banks that had made up NatWest. In 2005 they formed a strategic partnership with Bank of China and, two years later, in the biggest takeover in banking history, they led a unique consortium to acquire the Dutch bank ABN AMRO Committed to working together With three centuries of banking behind them, they remain committed to making it happen for their customers, shareholders and staff around the world.
Focus of Human Resource Management:
There is possibly no greater challenge in HR than recruiting, motivating, engaging, developing and rewarding so many people in a Group with so many brands. If you consider our growth record, this is only likely to increase. The size of the challenge is matched only by the success of our approach. We act as internal consultants across the Group, creating and delivering business-specific solutions. Our remit covers every issue involving staff recruitment, training, development, reward, career building, and change management. We need to understand the specifics of each business and deliver solutions which are consistent across the Group yet sensitive to individual requirements. With a consultancy HR model well established, HR services are delivered to the business through Business Partners, project-based HR Consultants and a range of technical specialists.
Within RBS there are HR professionals working within the Group's Central Functions as well as aligned in the business. There are also specialist technical areas such as Remuneration and Benefits, Policy and Employment, HR Shared Services, Health, Safety and Wellbeing, Group Resourcing and Group Organizational Effectiveness.
Human resource management (HRM), or human resource development, entails planning, implementing, and managing recruitment, as well as selection, training, career, and organizational development initiatives within an organization. The goal of HRM is to maximize the productivity of an organization by optimizing the effectiveness of its employees while simultaneously improving the work life of employees and treating employees as valuable resources. Consequently, HRM encompasses efforts to promote personal development, employee satisfaction, and compliance with employment-related laws.
To achieve equilibrium between employer and employee goals and needs, HRM departments focus on these three general functions or activities: planning, implementation, and evaluation. The planning function refers to the development of human resource policies and regulations. Human resource managers attempt to determine future HRM activities and plan for the implementation of HRM procedures to help companies realize their goals.
Implementation of HRM plans involves four primary activities: acquisition, development, compensation, and maintenance. Acquisition entails the hiring of workers most likely to help a company attain its goals. The development function encompasses the training of workers to perform their tasks in accordance with company strategy. This activity also involves company efforts to control and change employee behavior via reviews, appraisals, incentives, and discipline. Compensation covers the payment of employees for their services. Maintenance requires structuring labor relations the interaction between a company's management and its unionized employees and ensuring compliance with federal and state employment laws. Finally, the evaluation function includes the assessment of a company's HRM policies to determine whether they are effective.
Businesses and organizations rely on three major resources: physical resources, such as materials and equipment; financial resources, including cash, credit, and debt; and human resources or workers. In its broadest sense, HRM refers to the management of all decisions within an organization that are related to people. In practice, however, HRM is a tool used to try to make optimum use of human resources, to foster individual development, and to comply with government mandates. Larger organizations typically have an HRM department and its primary objective is making company goals compatible with employee goals insofar as possible. Hence, for a company to attain its goals, it must have employees who will help it attain them.
Objectives of HRM:
Objectives are pre-determined goals to which individual or group activity in an organization is directed. Objectives of personnel management are influenced by organizational objectives and individual and social goals. Institutions are instituted to attain certain specific objectives. The objectives of the economic institutions are mostly to earn profits, and of the educational institutions are mostly to impart education and conduct research so on and so forth. However, the fundamental objective of any organization is survival. Organizations are not just satisfied with this goal. Further the goal of most of the organizations is growth and profits.
Institutions procure and manage various resources including human to attain the specified objectives. Thus, human resources are managed to divert and utilize their resources towards and for the accomplishment of organizational objectives. Therefore, basically the objectives of HRM are drawn from and to contribute to the accomplishment of the organizational objectives. The other objectives of HRM are to meet the needs, aspirations, values and dignity of individual employees and having due concern for the socio-economic problems of the community and the country.
HRM must be aware of the business plan, to decide how much man power they required for the business.
Conducting job analysis, knowing about the candidate's background.
Suitable candidates must be recruited according to the company needs.
Selecting the candidates by conducting interview while judging the best according to the qualities.
Giving the positions to the selected candidates.
Managing their information and giving them compensations in different levels.
According to their skills giving rewards, benefits and appraisals.
Promoting the best deserving according to performance and requirement.
Training, developing and building their capability.
Group Human Resources
It is responsible for recruiting, motivating, engaging, developing and rewarding all current and future employees. Their service includes:
Remuneration and Benefits
Policy and Employment
HR Shared Services
Health, Safety and Wellbeing
Group Organisational Effectiveness
HRM functional areas:
The three functional areas of HRM are human relations, organization theory, and decision areas. Although the method and degree to which these areas are handled vary among different HRM departments, a few general rules characterize the responsibilities, positioning, and structure of most HRM divisions.
Human Relation: It includes matters such as individual motivation, leadership, and group relationships.
Organization Theory: It refers to job design, managerial control, and work flow through the organization.
Decision Areas: It covers interests related to the acquisition, development, compensation, and maintenance of human resources.
To justify their primary role and achieve their goals, HRM professionals and departments take on a variety of activities in order to execute the human resource plans. These activities are characterized into four functional groups according to their legal responsibilities: acquisition, development, compensation, and maintenance.
Acquisition: Its duties consist of human resource planning for employees, which includes activities related to analyzing employment needs, determining the necessary skills for positions, identifying job and industry trends, and forecasting future employment levels and skill requirements. It also covers activities related to recruiting workers, such as designing evaluation tests and interview methods.
Development: It refers to performance appraisal and training activities. The basic goal of appraisal is to provide feedback to employees concerning their performance. This feedback allows them to evaluate the appropriateness of their behavior in the eyes of their coworkers and managers, correct weaknesses, and improve their contribution.
Compensation: It refers to HRM duties related to paying employees and providing incentives for them. HRM professionals are typically charged with developing wage and salary systems that accomplish specific organizational objectives, such as employee retention, quality, satisfaction, and motivation. Ultimately, their aim is to establish wage and salary levels that maximize the company's investment in relation to its goals. This is often successfully accomplished with performance based incentives.
Maintenance: It covers activities related to employee benefits, safety, health, and worker management relations. Employee benefits are non-incentive-oriented compensation, such as health insurance and free parking, and are often used to transfer non taxed compensation to employees. It is also important to understand tax incentives, retirement investment plans, and purchasing power derived from a large base of employees.
Human resource planning has traditionally been used by organizations to ensure that the right person is in the right job at the right time. Considering the past conditions of relative environmental certainty and stability, human resource planning focuses on the short term as well as on line management concerns. Increasing environmental instability, demographic shifts, changes in technology, and heightened international competition the need for human resource planning has increased in leading organizations. Planning is prime point of interaction between line management and planners. In addition, organizations are realizing that in order to adequately address human resource concerns, it is must to develop long-term as well as short term solutions.
The key points of effective human resource management planning are:
Supporting steady workforce levels during ups and downs in output, this can reduce unnecessary employment costs and liabilities and increase employee morale that would otherwise suffer in the event of lay-offs.
Preventing a high turnover rate between younger recruits.
Reducing problems associated with replacing key decision makers in the event of an unexpected absence.
Making it possible for financial resource managers to efficiently plan departmental budgets.
Model of HR Planning:
This includes following phases of HR planning:
Gathering and analyzing data to forecast expected HR demand.
Establishing HR objectives.
Designing and implementing programs that will help to achieve HR objectives for an organization.
Monitoring and evaluating programs.
This involves three key steps:
Organisational and Individual learning
Organisational and individual learning: It includes developing the business as learning organization, providing employees with learning objectives as well as career growth.
Management development: Providing learning and development opportunities which in turn will increase capacity of managers.
Career management: Planning and developing the career of people with potential.
Effectiveness of HR planning in improving performance:
Effectiveness of HR planning provides a framework for the understanding of the strategic role of HR, its practices, the outcomes of the respective category of HR practices, critical reasons for measuring HR's efforts, and proposes a framework for judging HR. Finally organizations must be able to make use of the information to conclude how particular HR practices explain a relationship with better business results, determine potential areas for investments, expansions, and reductions, justify budget allocations and be more accountable for expenses incurred within the organization. This outline proposed does not only explain the cost for each major HR activity, but also demonstrates the values of the activities and the opportunity to determine whether it is a meaningful investment and strategy for creating a competitive advantage.
This framework proves its effectiveness in the organisation, to show how HR creates value to employ information to increase investments in specific HR strategies and eradicate ineffective investments, and to serve as a critical resource in strategic business planning and budget allocation. In today's business environment, organizations constantly need to evaluate their internal and external environment for challenges and opportunities to remain competitive and to sustain growth. Political, economic, social, and even psychological changes within our societies have a significant impact on organizations.
Many factors force changes in organizations including the use of technology, globalization, changes in workforce strategies, the purging of bureaucracies in organizational structures, and helping to poise between work and family issues. Understanding the potential of an organization's resources and optimizing the output of such resources, provides a momentum for HR to become the key source of creating the competitive advantage for the organization.
Succession management is a key strategy that implements strategies such as recruitment, valuing diversity, organizational redesign, implementation of new technologies and outsourcing as a result of your HR planning process. It addresses many issues faced by the organisation, such as:
Increasing retirement rates
Tight labour market
Fast-paced changes in work
By implementing a succession management program that is transparent and equitable you will be creating an environment for people to develop their skills in preparation for a range of future possibilities. This results in a workplace that will be well positioned to face whatever lies ahead.
Performance management is a strategic tool used to promote an effective organization. It ensures that individual employees' efforts are focused on the priorities and strategies set out in the corporate and departmental business plans. It directs efforts towards effectiveness and away from merely being busy.
The success of employees depends on a clear performance management process, which recognizes the accomplishments and supports the professional development of the employees.
Responsibilities of PM:
It is a key responsibility of managers to ensure that each employee is having adequate knowledge as expected by the management in terms of performance and professional development. Managers are responsible for training employees and giving feedback based upon goals set at the beginning of the performance cycle. As well, together, managers and employees review progress periodically throughout the year and formally at the end of the cycle.
Employees are responsible for their own performance and are in charge of their own career development and should take the initiative to be successful. The performance management process helps them do this by linking the business plan with their individual responsibilities and helps them focus on what needs to be done and how it needs to be done.
This report is a brief understanding of role played by Human resource management in banking sector. It explains the contribution of human resource management in achievement of organizational objectives. It defines the critical organizational objectives and related activities. Also key HRM functional areas along with their activities are characterized in this presentation. The effectiveness of the HRM approach is described here which are required to attain the objectives. HR planning and development methods are explained needed by the organization to progress and judge the effectiveness of the organizational objectives along with its performance.