case study bank z

8/4/2019 Case Study Bank z

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CASE STUDY: SERVICE INDUSTRY (Bank Z)

General Background:

Bank Z is the largest domestic private sector bank in India. Since its inceptionin 1930 till date, the bank takes a pride in serving its three million customers

through a vast domestic network of seventeen regions consisting of 336

branches and 101 extension counters spread across the length and breadth of

country. The total manpower strength of the bank stands at 5877, out of which

3780 are workmen. Financially, the bank has been doing moderately well with

increasing trend of deposits and profits level. In the face of deregulation

(Narasimham Committee Recommendations), stiff competition and volatility in

markets, the bank had to opt for reorienting its strategic framework by

introducing strategic intents like sustained profitable growth,

training/upgradation of human skills, enhanced customersÃ¢â‚¬â„¢,shareholdersÃ¢â‚¬â„¢ and employeesÃ¢â‚¬â„¢ satisfaction, leverage IT andbranch network, focus on retail banking, establishment of strong customer

relationships etc to retain the leading position among the private sector banks.

These strategies were to be driven by measures such as diversification, joint

ventures, customer service, cost reduction, restructuring etc.

Assessment of Environment:

The external environment of Bank Z is undergoing a rapid transformation.

Among many of the external environment, the bank is facing the direct

implications of following three key triggers:

Ã¢â‚¬Â¢ Government Policy Changes: The implementation of liberalizedpolicy by the government has created favorable environment for the banking

sector. Such as deregulation of interest rate structure has given flexibility to

the banks to fix its own rate of interest. Reduction of government stake to 33

percent has led to opportunity of having more power to the management team

of the bank regarding the decision making etc.

Ã¢â‚¬Â¢ Intensification of Competition: The impact of liberalized governmentreform is seen in the form of intensified competition in the banking sector. The

entry of foreign banks and new private sector has increased the competition

and complexity in the domestic banking sector. As a result, an extra effort



Strategic responses related to Process management

Its process related strategies consists of giving increased services to its

customers such as introduction of ATM, extension of business hours at Tele

Banking Counters (TBCs), Rejuvenation of customer service committee etc.Similarly it also includes marketing strategies like brand building,

advertisements, up gradation of skills etc.

It also aims at providing various information technologies like email facility to

200 locations, CMS to 50 locations, Automating Forex Services etc. It also

has a cost reduction strategy and the bank also has a quality strategy, which

includes good inspection system, adherence to customer service manual and

customer satisfaction.

Strategic responses related to Structure in the Bank

The Bank has introduced flat structure in place of its hierarchal structure and

also has introduced a profit centre concept, which means that each region is a

profit centre and is accountable for its business performances.

Identification and Assessment of HRD Responses:

The Bank has a wide array of HRD process and responses provided to its

employees which are identified as hereunder;N Compensation is according to IBAÃ¢â‚¬â„¢s guidelines and also consistentwith Consumer Price Index rate. A wide range of allowance and perks has

been arranged. They are also entitled to receive soft loans, such as house

building advance, vehicle loan, various policies and holiday advance. They

also get statutory benefits like bonus, social security schemes etc.

N Working Conditions is excellent with no compromise made on any aspect.

The bank emphasize on the congenial physical environment in the bank to

attract the customers and to provide a comfortable working place.

N Family welfare Employees are well taken care of with the Family Welfare

provision The bank provides medical aid to the dependent family member.

The employees are also paid education allowance and each employee along

with the dependent family members is entitled for leave travel concession and

has also introduced a pension scheme.

N No proper written HR Policy inspite of having full-fledged HR Department:



However it has a few booklets containing rules and regulations governing the

sanction of advances and service rules.

N Training policy yet not evolved. But it follows a custom of training every

employee a minimum of two or three days in a year and has a full-fledged

training infrastructure at Bangalore.N No written Performance Appraisal System: Even though the bank has a

performance appraisal format it has no written appraisal policy.

N Job Enrichment: The Bank does not have a specific programmes/effort

designed or implemented to enhance the job content of the staff except a kind

of job rotation system which is yet not clear.

N Career Planning: The Bank does not have any formal career planning.

N Communication: In order to make the employees aware of various important

developments, new policies and business plans, the bank publishes a monthly

newsletter. No other communication mechanism is used in Bank Z.

N Employee involvement and empowerment programmes: The bank has

started a quality circle, which has been adopted by many branches. Except

QC, no other employee participation programs are there in the organization.

Alignment:

Analyzing the present policies and practices adopted at the bank and then

comparing it to the Corporate Strategy, we can deduce that though the bank

seems to be providing wide array of employee perks, allowance and benefits,it does lack in few aspects in alignment of its HR practices to that of Corporate

Vision and Strategy.

N According to the Corporate Vision, Employee Growth is taken as a

Commitment; however the conspicuous absence of any definite specific HR

Policy inspite of having full-fledged HR Department shows the commitment is

not very serious. Similarly, the management's apathy for upgrading the skills

of clerical staff beyond a certain level in consideration of the fear that the

highly skilled workers may leave the bank after they are upgraded is nothing

but because of the lack of proper HR and Training Policy. The bank should

instead ensure that its employees are skilled and are the best in the industry

to provide the seamless service to its customers and better than its

competitors are providing.

N One should not forget that the quality service is a core competency of the

banks which is only possible when the employees, who come to direct



contacts with the clients and customers, give high level of performance. The

quality of performance can be ensured by the regular performance appraisal.

Performance Appraisal in service sector like Bank Z is something which one

cannot afford to ignore because it helps to improve the individual, team and

group's performance by identifying the areas needed for improvement andhelp the organization as a whole to gain its objectives by improved service

and performance. But at Bank Z it seems that Performance Appraisal is done

just for the sake of doing it. No formal policy, authority or trained officer takes

charge of the process. Though the PA system is used for the purposes of

training, promotions, and placement in a particular function, due to lack of

trained authority, counseling and further improvements required are not taken

into consideration seriously.

N There is no formal career planning carried out in the bank. Though there is

a scheme to encourage staff to acquire additional qualification and provision

that employees acquiring these qualifications will be rewarded with monetary

incentive and earn extra credit points for promotion to higher posts, which is

just for short run. But no formal development needs of employee for long run

are identified.

N The HRD practices where Bank Z is good at; such as Compensation,

Working Conditions and Family Welfare can only fulfill the basic physiological

needs of an employee. Moreover, it seems that bank had these facilities only

because of unions influence to the management. The challenges at work andself actualization needs of the employees cannot be fulfilled by these mere

compensation packages. For this, job enrichment and employee participation

in decision making is required which the bank seems to be lacking. For job

enrichment, they have only job rotation program which still is not coherent.

Giving a common designation irrespective of actual job profile with less

hierarchical level may give less development ladder to the employees which

may act adversely as demotivating factor for ambitious employees. Similarly,

the bank has QC program as employee participation and empowerment

program which do help the employee to solve work related problems; yet

employees are not participated in decision making of the organization.

N Similarly, the bank lacks two way communications between management

and employee. Employees are informed only through the newsletter published

monthly. There is no way the employee can give their opinion to the

management.



Suggestions/ Conclusion

The bank needs to have a separate HRD Vision and Strategies consistent

with the corporate strategy, vision and mission.

The bank should craft effort to make business strategy and employeeresource strategy coherent to each other.

A push for a more business-driven thrust to HRD at organisational level is

needed because HRD Strategy is something, which falls, at functional

strategy level. Though it is narrower in scope compared to overall business

strategy, it adds relevant details to the overall business game plan. Care

should be taken that the HRM Strategy must support the bankÃ¢â‚¬â„¢soverall business strategy and competitive approach.

The bank should Improve HRD not only Employee Development becausethere are individuals or groups who have some relationship with an

organisation but are not in an employer-employee relationship. These external

people and institutions have a direct or indirect interest in the business and

influence the success of the business.

The bank come up with formal exhaustive HR Policy including training

policy ensuring that the employees are well trained and those on whose

training investment is done cannot leave the bank all of a sudden to join

competitors bank.

The Bank is to face a stiff competition from influx of foreign banks and theirpowerful resources and thus to ensure the retention of its highly qualified

executives from joining those foreign banks the bank could provide Employee

Stock Options to the deserving workforce of the bank.

Efforts to increase the client base and to retain the customers should be

instilled while formulating the plans and procedures by providing better

facilities and products than the competitors. One of the ways of outperforming

competitors is to increase performance of employees to give better customer

service; for which HR capital should be mobilized efficiently giving them morethan compensation in terms of job enrichment, communication and

participation at policy level.

Similarly, attempt should be made to roll out the latest in technology like

internet-banking and train the staffs and customers to use it efficiently.

case study bank z

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