CHAPTER-I

INTRODUCTION

INTRODUCTION

Management is an art of getting things done through people. It is defined by Mary parker Follett. The management further defined as field of human behaviour in which manager s plan! organi"e staff direct and control human! physical and financial resources in an organi"ed effort! in order to achieve desired individual and group ob#ective with optimum efficiency and effectiveness. It is clear from this definition that management is concerned with the accomplishment of ob#ectives by utili"ing physical and financial resources through the efforts of human resources.

The personnel management is the process of attracting! holding and motivating people involving all managers $ line and staff. The term human resources at the macro level spells that total sum of all the components %like skill! and creative ability& possessed by all the people %employed! self'employed! un' employed! employers owners etc&. (here as the term personnel even at the macro level is limited to only employees of all organi"ations.

)ersonal management is a pervasive function of management. *ll managers at various levels in the organi"ation it involves perform it several function concerned with the management of the people at work. It includes manpower planning! employment! placement! training! recruitment! appraisal and

compensation of employees. For the performance of these activates efficiently a separate department know as personnel department is created in most of the organi"ations.+uman resource management is inherent in the process of management. *ll the managers throughout the organi"ation perform this function rather by the personnel department only it the manager has to get selecting people who will under him. +e must also take interest in training and motivating the employees and of appraising their performance for improving their ,uality.

IMPORTANCE OF HUMAN RESOURCES

+uman resources management is a process of bringing people and organi"ation together so that the goals of each are met. It is that part of the management process which is concerned with the management of human resource in an organi"ation. It is a way of managing people at work. .o they give their best to the organi"ation.

+uman resource managements an activity! which is being increasingly impacted by people management all over the world! especially after /0 s!

+uman resource management is all about people at work! both as individual and groups. It tries to put people on assigned #obs in order to produces good result.

+uman resource management tries to help employees to develop their potential fully.

It encourages them to give out their best to the organi"ation. 1ffective human resource management helps an organi"ation to achieve its term goals by providing for competent! well'motivated employees.

+uman resource department e2its to assist and advice the line or operating managers to their personal work more effectively.

+uman resource! along with financial and material resource contributes to the production of goods and services in an organi"ation. )hysical and

monitory resource! by themselves cannot improve efficiency or contribute to an increased to an increased rate of return on investment. +uman resource re,uires that employees be motivated to e2ert their ma2imum effort. That their performance is evaluated properly for results and that they are remunerated on the basis of their contribution to the organi"ation. +uman resource management cannot be practiced one hour each day or none day each week. It re,uires a constant lateness and awareness of human relations and their importance in everyday operation.

OBJECTIVES OF THE STUDY

To know about the wage structure in the organi"ation. To study the employee satisfaction towards the +5 practices in the organi"ation. To know the recruitment procedure in the organi"ation. To elucidate the training and development procedures in the organi"ation. To study about the promotion policy in the organi"ation. To study up to what e2tent the grievance redresser mechanism has been following in the organi"ation. To study the motivation levels of the employees in the organi"ation. To know the type of benefits providing to employees in the organi"ation.

NEED FOR THE STUDY

The study is needed for provide information about the performance ranks basing on which decision regarding salary fi2ation! confirmation! promotion! transfer and demotion are take. )rovide feedback information about the level of achievement and behaviors of sub' ordinate.

METHEDOLOGY OF STUDY

MEANING:

Research is a careful investigation or inquiry especially through search for new facts in any branch of knowledge. According to Redman and Mary research is a systematized effort to gain new knowledge. According to D.Sleshinger and M.Stemson has defined research as the manipulation of things concepts or symbols for the purpose of generalizing to e!tend correct or verify knowledge heather that knowledge aids in construction of theory or in the practice of an art.

PRIMARY DATA:

)rimary data is in the information which is collected by the researcher from different persons.

SOURCE:

)ersonal interviews! telephone interviews! mail surveys! and ,uestionnaires.

SECONDARY DATA: Secondary data is collected from the companies.

SOURCES:
"ompany magazines #ournals news papers industry hand book web sites and company records.

SAMPLE:
The si"e of the sample is -00. This information helps to review the performance of the sub'ordinate! rectifying performance deficiencies and to set new standards of works! if necessary. )rovide information which helps to counsel the sub'ordinate. )rovide information to diagnose deficiency in employees regarding skill. 9nowledge! determine training and developmental needs and to prescribe the means for employee growth provides information! for correcting placements. To prevent grievances and in disciplinary activities. The goal of performance appraisal is learning newer values for achieving goals and ob#ectives. .ince learning is never done has always #udged

,uantitatively! as companies seek to become ;global ! it is imperative to measure it ,uantitatively also. Through the trainers are re,uired to impart their skills and knowledge to their best! the net outcome is not satisfactory. 1mployees are not prepared to handle bigger responsibilities through training. <n the other hand! performance appraisal is like a good butler! which is more like coaching a company for responsibilities.

PERFORMANCE SYSTEM IN THE COMPANIES:

In order to raise performance! many organi"ations have tried various evaluation systems to monitor and evaluate employee performance. +owever! it was noticed that when one system becomes obsolete! organi"ations are more likely to find systems that are in e2istence but not serving the purpose. Meanwhile! there used to be arbitrary or symbolic routine e2ercises where the supervisor submits his report by e2changing a few pleasantries and files the evaluation record. It was later discovered that the employee was not performing to the mark while the employee s personnel records show only rosy statements like he is such a loyal worker. The problem becomes more critical when the same person is promoted over another. It is desirable that in a professional practice! such decisions should be made through a successful track record of substantive accomplishment. =ut ,uick decisions based on vague statements are evident here. *s such! the need to performance ob#ectives where there is an assurance of due

performance is important in such circumstances. <b#ectives may be laid out for each of these performance attributes. In an effective performance appraisal system! a supervisor sets clear ob#ectives and targets at the beginning of a working cycle. In the middle of the cycle! the supervisor evaluates whether the conditions are favorable for the ob#ectives. *t the end of the cycle! he calls his report to check if the outcomes have been met. If the organi"ations follow this! the ensuring reports should be very clear and concise. >learly organi"ations can function more smoothly when they let their employees know what is e2pected of them with regard to work right from the beginning. *s India is one of the fastest growing economies! Industries especially the retail! banking and finance! manufacturing! telecom and public sector! can reap the benefits of performance appraisal systems. Further! every organi"ation is dreaming of a workforce performing e2cellently. =ut managing and measuring the performance of the organi"ation and its people are very challenging and hard. Though most organi"ations are establishing their continuous improvement techni,ues for performance measurement systems! most of the time they fail in measuring performance of their own employees. Measurement systems in manufacturing companies have failed since there are overwhelming volumes of performance'measure statistics. 1ven in service industry! it is the same case as there has to be a single measure for performance! for all the activities at work like punctuality! ,uality of output! meeting deadlines! etc.

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12perts say if divided according to performance! /0? of the work force falls under possible and typical performance category! only 6? in e2cellent performance and rest in problem performance. In its research statistical analysis software! a business software firm found that :4? of companies asked were now using performance appraisal systems in at least two divisions at their office. +owever! the research found that despite this significant level of take'up! many companies were failing to integrate the systems properly with in heir overall company structure and thus failing to reap the ma2imum benefits from the systems. *nd .*. e2perts have warned that companies trying to use performance appraisal systems must use a fully integrated IT system to ensure investments are not wasted. )erformance is the life line of any organi"ation. (ith the rise of performance' centric organi"ations in the area of competitiveness! there seems to be various ways in which the employees can be recogni"ed and rewarded. The onus of +5 people who earlier could their ;make or break the career of people at large! has been offloaded to the performance of employees either individually or in teams. Modern performance methods attempt to provide a futuristic insight into the individual s contribution. @o longer do they rely on past performance and there by eliminate errors attached to those systems such as regency of spillover effects. The leveraged performance appraisal systems also have an effect on other systems such as recruitment! training and the compensation structures. Therefore! it becomes imperative that organi"ations devise new

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systems that manage performance so that the human capital based on those systems can be developed! managed! reviewed and rewarded.

LIMITATIONS OF THE STUDY

1. Two months of time period. -. Aepartmental secrecy. 3. @on'co operation of employees. 4. In complete and inade,uate. 6. The respondents were not readily available and data was collected as per the convenience of the respondents. 7. .ome of the responses received have the influence of the organi"ation. 8. There was delay in getting the data! as they were busy in their work. :. The study has been constrained by limitations of time.

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CHAPTER II

INDUSTRY PROFILE

INDUSTRIAL PROFILE
ORIGIN OF THE WORD:
The name bank derives from the Italian word banco BdeskCbenchB! used during the 5enaissance by Florentine bankers! who used to make their transactions above a desk covered by a green tablecloth. D-E +owever! there are traces of banking activity even in ancient times. In fact! the word traces its origins back to the *ncient 5oman 1mpire! where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu! from which the words banco and bank are derived. *s a moneychanger! the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in 5omeFthat of the Imperial Mint.D3E The earliest evidence of money'changing activity is depicted on a silver drachma coin from ancient +ellenic colony Trape"es on the =lack .ea! modern Trab"on! c. 360'3-6 =>! presented in the =ritish Museum in Gondon. The coin shows a bankerHs table %trape"e& laden with coins! a pun on the name of the city. In fact! even today in Modern Ireek the word Trape"e %JKLMNOP& means both a table and a bank.

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=anks act as payment agents by conducting checking or current accounts for customers! paying che,ues drawn by customers on the bank! and collecting che,ues deposited to customersH current accounts. =anks also enable customer payments via other payment methods such as telegraphic transfer! 1FT)<.! and *TM. =anks borrow money by accepting funds deposited on current accounts! by accepting term deposits! and by issuing debt securities such as banknotes and bonds. =anks lend money by making advances to customers on current accounts! by making installment loans! and by investing in marketable debt securities and other forms of money lending. =anks provide almost all payment services! and a bank account is considered indispensable by most businesses! individuals and governments. @on' banks that provide payment services such as remittance companies are not normally considered an ade,uate substitute for having a bank account. =anks borrow most funds from households and non'financial businesses! and lend most funds to households and non'financial businesses! but non'bank lenders provide a significant and in many cases ade,uate substitute for bank loans! and money market funds! cash management trusts and other non'bank financial institutions in many cases provide an ade,uate substitute to banks for lending savings to.

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DEFINITION:
The definition of a bank varies from country to country. Qnder 1nglish common law! a banker is defined as a person who carries on the business of banking! which is specified asRD4E

conducting current accounts for his customers paying che,ues drawn on him! and >ollecting che,ues for his customers.

In most 1nglish common law #urisdictions there is a =ills of 12change *ct that codifies the law in relation to negotiable instruments! including che,ues! and this *ct contains a statutory definition of the term bankerR banker includes a body of persons! whether incorporated or not! who carry on the business of bankingH %.ection -! Interpretation&. *lthough this definition seems circular! it is actually functional! because it ensures that the legal basis for bank transactions such as che,ues do not depend on how the bank is organi"ed or regulated. The business of banking is in many 1nglish common law countries not defined by statute but by common law! the definition above. In other 1nglish common law #urisdictions there are statutory definitions of the business of banking or banking business. (hen looking at these definitions it is important to keep in minds that they are defining the business of banking for the purposes of the legislation! and not necessarily in general. In particular! most of the

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definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. +owever! in many cases the statutory definition closely mirrors the common law one. 12amples of statutory definitionsR

Bbanking businessB means the business of receiving money on current or deposit account! paying and collecting che,ues drawn by or paid in by customers! the making of advances to customers! and includes such other business as the *uthority may prescribe for the purposes of this *ctS %=anking *ct %.ingapore&! .ection -! Interpretation&.

Bbanking businessB means the business of either or both of the followingR

1. receiving from the general public money on current! deposit! savings or other similar account repayable on demand or within less than D3 monthsE ... or with a period of call or notice of less than that periodS -. paying or collecting che,ues drawn by or paid in by customersD6E .ince the advent of 1FT)<. %1lectronic Funds Transfer at )oint <f .ale&! direct credit! direct debit and internet banking! the che,ue has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the che,ue based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties! even if they do not pay and collect che,ues.

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=ank statements are accounting records produced by banks under the various accounting standards of the world. Qnder I**) and IF5. there are two kinds of accountsR debit and credit. >redit accounts are 5evenue! 1,uity and Giabilities. Aebit *ccounts are *ssets and 12penses. This means you credit a credit account to increase its balance! and you debit a debit account to increase its balance.E This also means you debit your savings account every time you deposit money into it %and the account is normally in deficit&! while you credit your credit card account every time you spend money from it %and the account is normally in credit&. +owever! if you read your bank statement! it will say the oppositeFthat you credit your account when you deposit money! and you debit it when you withdraw funds. If you have cash in your account! you have a positive %or credit& balanceS if you are overdrawn! you have a negative %or deficit& balance. The reason for this is that the bank! and not you! has produced the bank statement. Tour savings might be your assets! but the bankHs liability! so they are credit accounts %which should have a positive balance&. >onversely! your loans are your liabilities but the bankHs assets! so they are debit accounts %which should have a also have a positive balance&.

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(here bank transactions! balances! credits and debits are discussed below! they are done so from the viewpoint of the account holderFwhich is traditionally what most people are used to seeing.

WIDER COMMERCIAL ROLE:

The commercial role of banks is not limited to banking! and includesR

issue of banknotes %promissory notes issued by a banker and payable to bearer on demand&

processing of payments by way of telegraphic transfer! 1FT)<.! internet banking or other means

issuing bank drafts and bank che,ues accepting money on term deposit lending money by way of overdraft! installment loan or otherwise providing documentary and standby letters of credit %trade finance&! guarantees! performance bonds! securities underwriting commitments and other forms of off'balance sheet e2posures

safekeeping of documents and other items in safe deposit bo2es currency e2change acting as a Hfinancial supermarketH for the sale! distribution or brokerage! with or without advice! of insurance! unit trusts and similar financial products

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ECONOMIC FUNCTIONS:
The economic functions of banks includeR 1. Issue of money! in the form of banknotes and current accounts sub#ect to che,ue or payment at the customerHs order. These claims on banks can act as money because they are negotiable andCor repayable on demand! and hence valued at par. They are effectively transferable by mere delivery! in the case of banknotes! or by drawing a che,ue that the payee may bank or cash. -. @etting and settlement of payments $ banks act as both collection and paying agents for customers! participating in interbank clearing and settlement systems to collect! present! be presented with! and pay payment instruments. This enables banks to economise on reserves held for settlement of payments! since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas! reducing the cost of settlement between them. 3. credit intermediation $ banks borrow and lend back'to'back on their own account as middle men 4. >redit ,uality improvement $ banks lend money to ordinary commercial and personal borrowers %ordinary credit ,uality&! but are high ,uality borrowers. The improvement comes from diversification of the bankHs assets and capital which provides a buffer to absorb losses without

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defaulting on its obligations. +owever! banknotes and deposits are generally unsecuredS if the bank gets into difficulty and pledges assets as security! to rise the funding it needs to continue to operate! this puts the note holders and depositors in an economically subordinated position. 6. Maturity transformation $ banks borrow more on demand debt and short term debt! but provide more long term loans. In other words! they borrow short and lend long. (ith a stronger credit ,uality than most other borrowers! banks can do this by aggregating issues %e.g. accepting deposits and issuing banknotes& and redemptions %e.g. withdrawals and redemptions of banknotes&! maintaining reserves of cash! investing in marketable securities that can be readily converted to cash if needed! and raising replacement funding as needed from various sources %e.g. wholesale cash markets and securities markets&.

LAW OF BANKING:
=anking law is based on a contractual analysis of the relationship between the bank %defined above& and the customerFdefined as any entity for which the bank agrees to conduct an account. The law implies rights and obligations into this relationship as followsR 1. The bank account balance is the financial position between the bank and the customerR when the account is in credit! the bank owes the balance to

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the customerS when the account is overdrawn! the customer owes the balance to the bank. -. The bank agrees to pay the customerHs che,ues up to the amount standing to the credit of the customerHs account! plus any agreed overdraft limit. 3. The bank may not pay from the customerHs account without a mandate from the customer! e.g. a che,ue drawn by the customer. 4. The bank agrees to promptly collect the che,ues deposited to the customerHs account as the customerHs agent! and to credit the proceeds to the customerHs account. 6. The bank has a right to combine the customerHs accounts! since each account is #ust an aspect of the same credit relationship. 7. The bank has a lien on che,ues deposited to the customerHs account! to the e2tent that the customer is indebted to the bank. 8. The bank must not disclose details of transactions through the customerHs accountFunless the customer consents! there is a public duty to disclose! the bankHs interests re,uire it! or the law demands it. :. The bank must not close a customerHs account without reasonable notice! since che,ues are outstanding in the ordinary course of business for several days. These implied contractual terms may be modified by e2press agreement between the customer and the bank. The statutes and regulations in force within a

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particular #urisdiction may also modify the above terms andCor create new rights! obligations or limitations relevant to the bank'customer relationship.

ENTRY REGULATION:
>urrently in most #urisdictions commercial banks are regulated by government entities and re,uire a special bank license to operate. Qsually the definition of the business of banking for the purposes of regulation is e2tended to include acceptance of deposits! even if they are not repayable to the customerHs orderFalthough money lending! by itself! is generally not included in the definition. Qnlike most other regulated industries! the regulator is typically also a participant in the market! i.e. a government'owned %central& bank. >entral banks also typically have a monopoly on the business of issuing banknotes. +owever! in some countries this is not the case. In the Q9! for e2ample! the Financial .ervices *uthority licenses banks! and some commercial banks %such as the =ank of .cotland& issue their own banknotes in addition to those issued by the =ank of 1ngland! the Q9 governmentHs central bank. .ome types of financial institution! such as building societies and credit unions! may be partly or wholly e2empt from bank license re,uirements! and therefore regulated under separate rules.

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The re,uirements for the issue of a bank license vary between #urisdictions but typically includeR 1. Minimum capital -. Minimum capital ratio 3. HFit and )roperH re,uirements for the bankHs controllers! owners! directors! andCor senior officers 4. *pproval of the bankHs business plan as being sufficiently prudent and plausible.

BANKING CHANNELS:
=anks offer many different channels to access their banking and other servicesR

* branch! banking centre or financial centre is a retail location where a bank or financial institution offers a wide array of face'to'face service to its customers.

*TM is a computeri"ed telecommunications device that provides a financial institutionHs customers a method of financial transactions in a public space without the need for a human clerk or bank teller. Most banks now have more *TMs than branches! and *TMs are providing a wider range of services to a wider range of users. For e2ample in +ong 9ong! most *TMs enable anyone to deposit cash to any customer of the bankHs account by feeding in the notes and entering the account number to

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be credited. *lso! most *TMs enable card holders from other banks to get their account balance and withdraw cash! even if the card is issued by a foreign bank.

Mail is part of the postal system which itself is a system wherein written documents typically enclosed in envelopes! and also small packages containing other matter! are delivered to destinations around the world. This can be used to deposit che,ues and to send orders to the bank to pay money to third parties. =anks also normally use mail to deliver periodic account statements to customers.

Telephone banking is a service provided by a financial institution which allows its customers to perform transactions over the telephone. This normally includes bill payments for bills from ma#or billers %e.g. for electricity&.

<nline banking is a term used for performing transactions! payments etc. over the Internet through a bank! credit union or building societyHs secure website.

Mobile banking is a method of using oneHs mobile phone to conduct simple banking transactions by remotely linking into a banking network.

Uideo banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Uideo banking can be performed via purpose built banking transaction machines %similar to an *utomated teller machine&! or via a videoconference enabled bank branch.

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TYPES OFBANKS:
=anksH activities can be divided into retail banking! dealing directly with individuals and small businessesS business banking! providing services to mid' market businessS corporate banking! directed at large business entitiesS private banking! providing wealth management services to high net worth individuals and familiesS and investment banking! relating to activities on the financial markets. Most banks are profit'making! private enterprises. +owever! some are owned by government! or are non'profit organi"ations. >entral banks are normally government'owned and charged with ,uasi' regulatory responsibilities! such as supervising commercial banks! or controlling the cash interest rate. They generally provide li,uidity to the banking system and act as the lender of last resort in event of a crisis.

>ommercial bankR the term used for a normal bank to distinguish it from an investment bank. *fter the Ireat Aepression! the Q... >ongress re,uired that banks only engage in banking activities! whereas investment banks were limited to capital market activities. .ince the two no longer have to be under separate ownership! some use the term Bcommercial bankB to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.

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>ommunity =anksR locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners.

>ommunity development banksR regulated banks that provide financial services and credit to under'served markets or populations.

)ostal savings banksR savings banks associated with national postal systems.

)rivate =anksR banks that manage the assets of high net worth individuals. <ffshore banksR banks located in #urisdictions with low ta2ation and regulation. Many offshore banks are essentially private banks.

.avings bankR in 1urope! savings banks take their roots in the 1/th or sometimes even 1:th century. Their original ob#ective was to provide easily accessible savings products to all strata of the population. In some countries! savings banks were created on public initiativeS in others! socially committed individuals created foundations to put in place the necessary infrastructure. @owadays! 1uropean savings banks have kept their focus on retail bankingR payments! savings products! credits and insurances for individuals or small and medium'si"ed enterprises. *part from this retail focus! they also differ from commercial banks by their broadly decentrali"ed distribution network! providing local and regional outreachFand by their socially responsible approach to business and society.

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=uilding societies and GandesbanksR institutions that conduct retail banking.

1thical banksR banks that prioriti"e the transparency of all operations and make only what they consider to be socially'responsible investments.

Islamic banksR =anks that transact according to Islamic principles.

TYPES OF INVESTMENT BANKS:

Investment banks BunderwriteB %guarantee the sale of& stock and bond issues! trade for their own accounts! make markets! and advise corporations on capital market activities such as mergers and ac,uisitions.

Merchant banks were traditionally banks which engaged in trade finance. The modern definition! however! refers to banks which provide capital to firms in the form of shares rather than loans. Qnlike venture capital firms! they tend not to invest in new companies.

BOTH COMBINES:

Qniversal banks! more commonly known as financial services companies! engage in several of these activities. These big banks are very diversified groups that! among other services! also distribute insuranceF hence the term banc assurance! a portmanteau word combining Bban,ue or bankB and BassuranceB! signifying that both banking and insurance are provided by the same corporate entity.

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OTHER TYPES OF BANKS:

Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several well'established principles based on Islamic canons. *ll banking activities must avoid interest! a concept that is forbidden in Islam. Instead! the bank earns profit %markup& and fees on the financing facilities that it e2tends to customers.

BANKS IN THE ECONOMY:

Size of !o"#! "#$%i$ i$&'()*+ (orldwide assets of the largest 1!000 banks grew 17.3? in -007C-008 to reach a record V84.- trillion. This follows a 6.4? increase in the previous year. 1Q banks held the largest share! 63?! up from 43? a decade earlier. The growth in 1urope s share was mostly at the e2pense of Wapanese banks! whose share more than halved during this period from -1? to 10?. The share of Q. banks remained relatively stable at around 14?. Most of the remainder was from other *sian and 1uropean countries.D:E The Qnited .tates has by far the most banks in the world! both in terms of institutions %8!640 at the end of -006& and branches %86!000&. This is an indicator of the geography and regulatory structure of the Q.*! resulting in a large number of small to medium'si"ed institutions in its banking system. Wapan had 1-/ banks and 1-!000 branches. In -004! Iermany! France! and Italy each had more than 30!000 branchesFmore than double the 16!000 branches in the Q9.

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BANK CRISIS:
=anks are susceptible to many forms of risk which have triggered occasional systemic crises. These include li,uidity risk %where many depositors may re,uest withdrawals beyond available funds&! credit risk %the chance that those who owe money to the bank will not repay it&! and interest rate risk %the possibility that the bank will become unprofitable! if rising interest rates force it to pay relatively more on its deposits than it receives on its loans&. =anking crises have developed many times throughout history! when one or more risks have materiali"ed for a banking sector as a whole. )rominent e2amples include the bank run that occurred during the Ireat Aepression! the Q... .avings and Goan crisis in the 1/:0s and early 1//0s! the Wapanese banking crisis during the 1//0s! and the subprime mortgage crisis in the -000s.

CHALLENGES WITHIN THE BANKING INDUSTRY:

The banking industry is a highly regulated industry with detailed and focused regulators. *ll banks with FAI>'insured deposits have the FAI> as a regulatorS however! for e2aminations!Dclarification
neededE

the Federal 5eserve is the

primary federal regulator for Fed'member state banksS the <ffice of the >omptroller of the >urrency %<>>& is the primary federal regulator for national banksS and the <ffice of Thrift .upervision! or <T.! is the primary federal regulator for thrifts. .tate non'member banks are e2amined by the state

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agencies as well as the FAI>. @ational banks have one primary regulatorFthe <>>. 1ach regulatory agency has their own set of rules and regulations to which banks and thrifts must adhere. The Federal Financial Institutions 12amination >ouncil %FFI1>& was established in 1/8/ as a formal interagency body empowered to prescribe uniform principles! standards! and report forms for the federal e2amination of financial institutions. *lthough the FFI1> has resulted in a greater degree of regulatory consistency between the agencies! the rules and regulations are constantly changing. In addition to changing regulations! changes in the industry have led to consolidations within the Federal 5eserve! FAI>! <T. and <>>. <ffices have been closed! supervisory regions have been merged! staff levels have been reduced and budgets have been cut. The remaining regulators face an increased burden with increased workload and more banks per regulator. (hile banks struggle to keep up with the changes in the regulatory environment! regulators struggle to manage their workload and effectively regulate their banks. The impact of these changes is that banks are receiving less hands'on assessment by the regulators! less time spent with each institution! and the potential for more problems slipping through the cracks! potentially resulting in an overall increase in bank failures across the Qnited .tates.

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The changing economic environment has a significant impact on banks and thrifts as they struggle to effectively manage their interest rate spread in the face of low rates on loans! rate competition for deposits and the general market changes! industry trends and economic fluctuations. It has been a challenge for banks to effectively set their growth strategies with the recent economic market. * rising interest rate environment may seem to help financial institutions! but the effect of the changes on consumers and businesses is not predictable and the challenge remains for banks to grow and effectively manage the spread to generate a return to their shareholders. The management of the banks asset portfolios also remains a challenge in today s economic environment. Goans are a bank s primary asset category and when loan ,uality becomes suspect! the foundation of a bank is shaken to the core. (hile always an issue for banks! declining asset ,uality has become a big problem for financial institutions. There are several reasons for this! one of which is the la2 attitude some banks have adopted because of the years of good times. The potential for this is e2acerbated by the reduction in the regulatory oversight of banks and in some cases depth of management. )roblems are more likely to go undetected! resulting in a significant impact on the bank when they are recogni"ed. In addition! banks! like any business! struggle to cut costs and have conse,uently eliminated certain e2penses! such as ade,uate employee training programs.

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=anks also face a host of other challenges such as aging ownership groups. *cross the country! many banks management teams and board of directors are aging. =anks also face ongoing pressure by shareholders! both public and private! to achieve earnings and growth pro#ections. 5egulators place added pressure on banks to manage the various categories of risk. =anking is also an e2tremely competitive industry. >ompeting in the financial services industry has become tougher with the entrance of such players as insurance agencies! credit unions! check cashing services! credit card companies! etc. *s a reaction! banks have developed their activities in financial instruments! through financial market operations such as brokerage and trading and become big players in such activities.

BROKERED DEPOSITS:
<ne source of deposits for banks is brokers who deposit large sums of money on the behalf of investors. This money will generally go to the banks which offer the most favorable terms! often better than those offered local depositors. It is possible for a bank to be engaged in business with no local deposits at all! all funds being brokered deposits. *ccepting a significant ,uantity of such deposits! or Bhot moneyB as it is sometimes called! puts a bank in a difficult and sometimes risky position! as the funds must be lend or invested in a way that yields a return sufficient to pay the high interest being paid on the brokered deposits. This may result in risky decisions and even in eventual failure

3-

of the bank. =anks which failed during -00: and -00/ in the Qnited .tates during the global financial crisis had! on average! four times more brokered deposits as a percent of their deposits than the average bank. .uch deposits! combined with risky real estate investments! factored into the .avings and loan crisis of the 1/:0s. 5egulation of brokered deposits is opposed by banks on the grounds that the practice can a source of e2ternal funding to growing communities with insufficient local deposits.

PROFITABILITY:
* bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds! and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. +istorically! profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers. In recent history! investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees! primarily loan fees but also including service charges on an array of deposit activities and ancillary services %international banking! foreign e2change! insurance! investments! wire transfers! etc.&. Gending activities! however! still provide the bulk of a commercial bankHs income. In the past 10 years *merican banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market

33

conditions. First! this includes the Iramm'Geach'=liley *ct! which allows banks again to merge with investment and insurance houses. Merging banking! investment! and insurance functions allows traditional banks to respond to increasing consumer demands for Bone'stop shoppingB by enabling cross'selling of products %which! the banks hope! will also increase profitability&. .econd! they have e2panded the use of risk'based pricing from business lending to consumer lending! which means charging higher interest rates to those customers that are considered to be a higher credit risk and thus increased chance of default on loans. This helps to offset the losses from bad loans! lowers the price of loans to those who have better credit histories! and offers credit products to high risk customers who would otherwise been denied credit. Third! they have sought to increase the methods of payment processing available to the general public and business clients. These products include debit cards! prepaid cards! smart cards! and credit cards. They make it easier for consumers to conveniently make transactions and smooth their consumption over time %in some countries with underdeveloped financial systems! it is still common to deal strictly in cash! including carrying suitcases filled with cash to purchase a home&. +owever! with convenience of easy credit! there is also increased risk that consumers will mismanage their financial resources and accumulate e2cessive debt.

34

=anks make money from card products through interest payments and fees charged to consumers and transaction fees to companies that accept the cards. +elps in making profit and economic development as a whole.

36

CHAPTER III

COMPANY PROFILE

13

ORGANI,ATION PROFILE

COMPANY PROFILE OF SBI:

The origin of the S)#)e B#$% of I$&i# goes back to the first decade of the nineteenth century with the establishment of the =ank of >alcutta in >alcutta on - Wune 1:07. Three years later the bank received its charter and was re'designed as the =ank of =engal %- Wanuary 1:0/&. * uni,ue institution! it was the first #oint'stock bank of =ritish India sponsored by the Iovernment of =engal. The =ank of =ombay %16 *pril 1:40& and the =ank of Madras %1 Wuly 1:43& followed the =ank of =engal. These three banks remained at the ape2 of modern banking in India till their amalgamation as the Imperial =ank of India on -8 Wanuary 1/-1. )rimarily *nglo'Indian creations! the three presidency banks came into e2istence either as a result of the compulsions of imperial finance or by the felt needs of local 1uropean commerce and were not imposed from outside in an arbitrary manner to moderni"e IndiaHs economy. Their evolution was! however! shaped by ideas culled from similar developments in 1urope and 1ngland! and was influenced by changes occurring in the structure of both the local trading

37

environment and those in the relations of the Indian economy to the economy of 1urope and the global economic framework.

B#$% of Be$ #! H-O-

ESTABLISHMENT:
The establishment of the =ank of =engal marked the advent of limited liability! #oint'stock banking in India. .o was the associated innovation in banking! vi". the decision to allow the =ank of =engal to issue notes! which would be accepted for payment of public revenues within a restricted geographical area. This right of note issue was very valuable not only for the =ank of =engal but also its two siblings! the =anks of =ombay and Madras. It meant an accretion to the capital of the banks! a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping %and in some cases! even investment on behalf of the clients& by the indigenous bankers had not spread as a general habit in most parts of India. =ut! for a long time! and especially up to the time that the three presidency banks had a right of note issue!

38

bank notes and government balances made up the bulk of the investible resources of the banks. The three banks were governed by royal charters! which were revised from time to time. 1ach charter provided for a share capital! four'fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors! which managed the affairs of each bank! were mostly proprietary directors representing the large 1uropean managing agency houses in India. The rest were government nominees! invariably civil servants! one of whom was elected as the president of the board.

G*o'. P/o)o #./ of Ce$)*#! Bo#*& 012314

BUSINESS:

The business of the banks was initially confined to discounting of bills of e2change or other negotiable private securities! keeping cash accounts and receiving deposits and issuing and circulating cash notes. Goans were restricted to 5s.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities! commonly called >ompanyHs )aper! bullion! treasure! plate! #ewels! or goods Hnot of a perishable natureH and no

3:

interest could be charged beyond a rate of twelve per cent. Goans against goods like opium! indigo! salt woolens! cotton! cotton piece goods! mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. *ll commodities! including tea! sugar and #ute! which began to be financed later! were either pledged or hypothecated to the bank. Aemand promissory notes were signed by the borrower in favor of the guarantor! which was in turn endorsed to the bank. Gending against shares of the banks or on the mortgage of houses! land or other property was! however! forbidden. Indians were the principal borrowers against deposit of >ompanyHs paper! while the business of discounts on private as well as salary bills was almost the e2clusive monopoly of individuals 1uropeans and their partnership firms. =ut the main function of the three banks! as far as the government was concerned! was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.

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O!& B#$% of Be$ #!

MAJOR CHANGE IN THE CONDITIONS:

* ma#or change in the conditions of operation of the =anks of =engal! =ombay and Madras occurred after 1:70. (ith the passing of the )aper >urrency *ct of 1:71! the right of note issue of the presidency banks was abolished and the Iovernment of India assumed from 1 March 1:7- the sole power of issuing paper currency within =ritish India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Iovernment undertook to transfer the Treasury balances to the banks at places where the banks would open branches. @one of the three banks had till then any branches %e2cept the sole attempt and that too a short'lived one by the =ank of =engal at Mir"apore in 1:3/& although the charters had given them such authority. =ut as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches! they embarked on branch e2pansion at a rapid pace. =y 1:87! the branches! agencies and sub agencies of the three presidency banks covered most of the ma#or parts and many of the inland trade centres in India. (hile the =ank of =engal had eighteen branches including its head office! seasonal branches and sub agencies! the =anks of =ombay and Madras had fifteen each.

40

B#$% of M#&*#( No)e D#)e& 1561 fo* R(-17

PRESIDENCY BANKS ACT:

The presidency =anks *ct! which came into operation on 1 May 1:87! brought the three presidency banks under a common statute with similar restrictions on business. The proprietary connection of the Iovernment was! however! terminated! though the banks continued to hold charge of the public debt offices in the three presidency towns! and the custody of a part of the government balances. The *ct also stipulated the creation of 5eserve Treasuries at >alcutta! =ombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Iovernment could lend to the presidency banks from such 5eserve Treasuries but the latter could look upon them more as a favour than as a right.

41

B#$% of M#&*#( The decision of the Iovernment to keep the surplus balances in 5eserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1:87. The pace of e2pansion witnessed in the previous decade fell sharply although! in the case of the =ank of Madras! it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centers of the presidency.

India witnessed rapid commerciali"ation in the last ,uarter of the nineteenth century as its railway network e2panded to cover all the ma#or regions of the country. @ew irrigation networks in Madras! )un#ab and .ind accelerated the process of conversion of subsistence crops into cash crops! a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais! the hills of *ssam and the @ilgiris into regions

4-

of estate agriculture par e2cellence. *ll these resulted in the e2pansion of IndiaHs international trade more than si2'fold. The three presidency banks were both beneficiaries and promoters of this commerciali"ation process as they became involved in the financing of practically every trading! manufacturing and mining activity in the sub'continent. (hile the =anks of =engal and =ombay were engaged in the financing of large modern manufacturing industries! the =ank of Madras went into the financing of large modern manufacturing industriesS the =ank of Madras went into the financing of small'scale industries in a way which had no parallel elsewhere. =ut the three banks were rigorously e2cluded from any business involving foreign e2change. @ot only was such business considered risky for these banks! which held government deposits! it was also feared that these banks en#oying government patronage would offer unfair competition to the e2change banks which had by then arrived in India. This e2clusion continued till the creation of the 5eserve =ank of India in 1/36.

B#$% of Bo8"#+

PRESIDENCYBANKSOFBENGAL:

43

The presidency =anks of =engal! =ombay and Madras with their 80 branches were merged in 1/-1 to form the Imperial =ank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks had emerged. The new bank took on the triple role of a commercial bank! a bankerHs bank and a banker to the government.

=ut this creation was preceded by years of deliberations on the need for a H.tate =ank of IndiaH. (hat eventually emerged was a Hhalf'way houseH combining the functions of a commercial bank and a ,uasi'central bank.

The establishment of the 5eserve =ank of India as the central bank of the country in 1/36 ended the ,uasi'central banking role of the Imperial =ank. The latter ceased to be bankers to the Iovernment of India and instead became agent of the 5eserve =ank for the transaction of government business at centers at which the central bank was not established. =ut it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the 5eserve =ank. It also acted as a bankersH bank by holding their surplus cash and granting them advances against authori"ed securities. The management of the bank clearing houses also continued with it at many places where the 5eserve =ank did not have offices. The bank was also the biggest tendered at the Treasury bill auctions conducted by the 5eserve =ank on behalf of the Iovernment.

44

The establishment of the 5eserve =ank simultaneously saw important amendments being made to the constitution of the Imperial =ank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign e2change business and e2ecutor and trustee business for the first time.

IMPERIALBANK:

The Imperial =ank during the three and a half decades of its e2istence recorded an impressive growth in terms of offices! reserves! deposits! investments and advances! the increases in some cases amounting to more than si2'fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. =ut the lofty traditions of banking which the Imperial =ank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then e,ual. *ll these enabled the Imperial =ank to ac,uire a pre'eminent position in the Indian banking industry and also secure a vital place in the countryHs economic life.

46

S)#8. of I8.e*i#! B#$% of I$&i#

FIRST FIVE YEAR PLAN:

In 1/61! when the First Five Tear )lan was launched! the development of rural India was given the highest priority. The commercial banks of the country including the Imperial =ank of India had till then confined their operations to the urban sector and were not e,uipped to respond to the emergent needs of economic regeneration of the rural areas. In order! therefore! to serve the economy in general and the rural sector in particular! the *ll India 5ural >redit .urvey >ommittee recommended the creation of a state'partnered and state' sponsored bank by taking over the Imperial =ank of India! and integrating with it! the former state'owned or state'associate banks. *n act was accordingly passed

47

in )arliament in May 1/66 and the .tate =ank of India was constituted on 1 Wuly 1/66. More than a ,uarter of the resources of the Indian banking system thus passed under the direct control of the .tate. Gater! the .tate =ank of India %.ubsidiary =anks& *ct was passed in 1/6/! enabling the .tate =ank of India to take over eight former .tate'associated banks as its subsidiaries %later named *ssociates&.

The .tate =ank of India was thus born with a new sense of social purpose aided by the 4:0 offices comprising branches! sub offices and three Gocal +ead <ffices inherited from the Imperial =ank. The concept of banking as mere repositories of the communityHs savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking subserving the growing and diversified financial needs of planned economic development. The .tate =ank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the e2citing field of national development.

48

BOARD OF DIRECTORS:
S*- No- N#8e of Di*e9)o* .hri <.). =hatt 1. >hairman .hri ..9. =hattacharyya -. MA X >>X5< .hri 5. .ridharan 3. MA X I1%*X.& 4. 6. 7. 8. :. /. 10. 11. 1-. 13. Ar. *shok Whun#hunwala .hri Aileep >. >hoksi .hri .. Uenkatachalam .hri. A. .undaram Ar. Aeva @and =alodhi )rof. Mohd. .alahuddin *nsari Ar.%Mrs.& Uasantha =harucha Ar. 5a#iv 9umar .hri *shok >hawla .mt. .hyamala Iopinath 1/%c& 1/%c& 1/%c& 1/%c& 1/%d& 1/%d& 1/%d& 1/%d& 1/%e& 1/%f& 1/%b& 1/%b& 1/%a& Se9- of SBI A9): 12;;

AWARDS:

4:

1. .+5I <.).=+*TT A1>G*51A >@@ I=@H. =Q.I@1..M*@ <F T+1 T1*5 -008 -. .=I >+*I5M*@ .+5I.<.).=+*TT *(*5A1A T+1 T5*@.F<5M*TI<@*G G1*A15 *(*5A -008

TRANSFORMATION JOURNEY IN STATE BANK OF INDIA:

The .tate =ank of India! the country s oldest =ank and a premier in terms of balance sheet si"e! number of branches! market capitali"ation and profits is today going through a momentous phase of >hange and Transformation $ the two hundred year old )ublic sector behemoth is today stirring out of its )ublic .ector legacy and moving with an ability to give the )rivate and Foreign =anks a run for their money.

The bank is entering into many new businesses with strategic tie ups $ )ension Funds! Ieneral Insurance! >ustodial .ervices! )rivate 1,uity! Mobile =anking! )oint of .ale Merchant *c,uisition! *dvisory .ervices! structured products etc $ each one of these initiatives having a huge potential for growth.

The =ank is forging ahead with cutting edge technology and innovative new banking models! to e2pand its 5ural =anking base! looking at the vast untapped potential in the hinterland and proposes to cover 100!000 villages in the ne2t two years.

4/

It is also focusing at the top end of the market! on whole sale banking capabilities to provide India s growing mid C large >orporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today! the =ank is the largest provider of infrastructure debt and the largest arranger of e2ternal commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 600 list.

The =ank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer e2perience. (ith about :600 of its own 10000 branches and another 6100 branches of its *ssociate =anks already networked! today it offers the largest banking network to the Indian customer. The =ank is also in the process of providing complete payment solution to its clientele with its over :600 *TMs! and other electronic channels such as Internet banking! debit cards! mobile banking! etc.

(ith four national level *pe2 Training >olleges and 64 learning >enters spread all over the country the =ank is continuously engaged in skill enhancement of its employees. .ome of the training programs are attended by bankers from banks in other countries. The bank is also looking at opportunities to grow in si"e in India as well as internationally. It presently has :- foreign offices in 3- countries across the

60

globe. It has also 8 .ubsidiaries in India $ .=I >apital Markets! .=I>*) .ecurities! .=I AF+I! .=I Factors! .=I Gife and .=I >ards ' forming a formidable group in the Indian =anking scenario. It is in the process of raising capital for its growth and also consolidating its various holdings.

Throughout all this change! the =ank is also attempting to change old mindsets! attitudes and take all employees together on this e2citing road to Transformation. In a recently concluded mass internal communication programme termed ;)arivartan the =ank rolled out over 3300 two day

workshops across the country and covered over 130!000 employees in a period of 100 days using about 400 Trainers! to drive home the message of >hange and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other )ublic .ector <rgani"ations seeking to emulate the programme.The >@@ I=@! @etwork 1: recogni"ed this momentous transformation #ourney! the .tate =ank of India is undertaking! and has awarded the prestigious Indian of the Tear $ =usiness! to its >hairman! Mr. <. ). =hatt in Wanuary -00:.

HISTORY OF SBI:

61

The evolution of .tate =ank of India can be traced back to the first decade of the 1/th century. It began with the establishment of the =ank of >alcutta in >alcutta! on - Wune 1:07. The bank was redesigned as the =ank of =engal! three years later! on - Wanuary 1:0/. It was the first ever #oint'stock bank of the =ritish India! established under the sponsorship of the Iovernment of =engal. .ubse,uently! the =ank of =ombay %established on 16 *pril 1:40& and the =ank of Madras %established on 1 Wuly 1:43& followed the =ank of =engal. These three banks dominated the modern banking scenario in India! until when they were amalgamated to form the Imperial =ank of India! on -8 Wanuary 1/-1. .preading its arms around the world! the SBI<( I$)e*$#)io$#! B#$%i$ G*o'. delivers the full range of cross'border finance solutions through its four wings $ the Aomestic division! the Foreign <ffices division! the Foreign Aepartment and the International .ervices division. The Aomestic wing provides services like 8e*9/#$) "#$%i$ : (/i..i$ fi$#$9e #$& .*o=e9) e>.o*) fi$#$9e. The Foreign <ffices wing offers the entire range of international trade and industrial finance products! while the 9olkatta' based Foreign Aepartment undertakes treasury and currency operations. The International .ervices division renders speciali"ed services like 9o**e(.o$&e$) "#$%i$ : !o"#! !i$% (e*?i9e( #$& 9o'$)*+ #$& "#$% *i(%

e>.o('*e 8o$i)o*i$ . =eing India s largest and most trusted commercial bank!

6-

the .=I offers you a network of relationships unmatched in strength and span by any other Indian financial entity. The bank has a network of 66 offi9e(@"*#$9/e( i$ 32 9o'$)*ie( spanning all time "ones. The .=I s international presence is supplemented by a group of <verseas and @5I branches in India and correspondent links with o?e* ;33 !e#&i$ "#$%( of the world. .=I s offshore #oint ventures and subsidiaries

enhance its global stature. The bank has carved a niche for itself in 1uroland with branches strategically located in )aris! Frankfurt and *ntwerp. Indian banks and corporates are able to avail single'window 1uro services from .=I Frankfurt. These strengths are reinforced by a &e&i9#)e& #$& /i /!+ (%i!!e& team of professionals deployed by the bank in each specific segment. *n important turning point in the history of .tate =ank of India is the launch of the first Five Tear )lan of independent India! in 1/61. The )lan aimed at serving the Indian economy in general and the rural sector of the country! in particular. Qntil the )lan! the commercial banks of the country! including the Imperial =ank of India! confined their services to the urban sector. Moreover! they were not e,uipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. Therefore! in order to serve the economy as a whole and rural sector in particular! the *ll India 5ural >redit .urvey >ommittee recommended the formation of a state'partnered and state'

63

sponsored bank.

The *ll India 5ural >redit .urvey >ommittee proposed the take over of the Imperial =ank of India! and integrating with it! the former state'owned or state'associate banks. .ubse,uently! an *ct was passed in the )arliament of India in May 1/66. *s a result! the .tate =ank of India %.=I& was established on 1 Wuly 1/66. This resulted in making the .tate =ank of India more powerful! because as much as a ,uarter of the resources of the Indian banking system were controlled directly by the .tate. Gater on! the .tate =ank of India %.ubsidiary =anks& *ct was passed in 1/6/. The *ct enabled the .tate =ank of India to make the eight former .tate'associated banks as its subsidiaries.

The .tate =ank of India emerged as a pacesetter! with its operations carried out by the 4:0 offices comprising branches! sub offices and three Gocal +ead <ffices! inherited from the Imperial =ank. Instead of serving as mere repositories of the communityHs savings and lending to creditworthy parties! the .tate =ank of India catered to the needs of the customers! by banking purposefully. The bank served the heterogeneous financial needs of the planned economic development.

.tate =ank of India! together with its subsidiaries! provides various banking products and services in India and internationally. The company offers personal banking products and services! including term deposits! recurring

64

deposits! housing loans! car loans! educational loans! personal loans! loans for pensioners! loans against mortgage of property! loans against shares and debentures! current accounts! and savings accounts! as well as mobile banking! demat! *TM! Internet banking! locker! foreign inward remittance servicesS and pay roll cards! gift cards! travel cards! and gift che,ues. It also provides @5I services that include deposit accounts! @5I car and home loans! and remittancesS and agriculturalCrural services! such as agricultural banking and micro credit. In addition! .tate =ank offers international banking services comprising trade finance! correspondent banking! merchant banking! pro#ect e2port finance! offshore banking! and treasury servicesS and corporate banking products and services! such as working capital financing! pro#ect finance! corporate term loans! deferred payment guarantees! corporate loans! e2port credit! strategic business units! structured finance! dealer financing! channel financing! e,uipment leasing! and loan syndication. Further! the company provides domestic treasury! mutual fund! life insurance! factoring! broking! e'pay! and e'retail services. *s of March 31! -00:! it operated a network of appro2imately 16!11: branches.

BRANCHES:

The corporate center of .=I is located in Mumbai. In order to cater to different functions! there are several other establishments in and outside Mumbai! apart from the corporate center. The bank boasts of having as many as 14 local

66

head offices and 68 Yonal <ffices! located at ma#or cities throughout India. It is recorded that .=I has about 10000 branches!

ATM SERVICES:

.=I provides easy access to money to its customers through more than :600 *TMs in India. The =ank also facilitates the free transaction of money at the *TMs of .tate =ank Iroup! which includes the *TMs of .tate =ank of India as well as the *ssociate =anks $ .tate =ank of =ikaner X Waipur! .tate =ank of +yderabad! .tate =ank of Indore! etc. Tou may also transact money through .=I >ommercial and International =ank Gtd by using the .tate =ank *TM'cum' Aebit %>ash )lus& card.

SUBSIDIARIES:
The .tate =ank Iroup includes a network of eight banking subsidiaries and several non'banking subsidiaries. Through the establishments! it offers various services including merchant banking services! fund management! factoring services! primary dealership in government securities! credit cards and insurance. T/e (e?e$ "#$%i$ ('"(i&i#*ie( #*e:

.tate =ank of =ikaner and Waipur %.==W& .tate =ank of +yderabad %.=+& .tate =ank of Indore %.=I5&

67

.tate =ank of Mysore %.=M& .tate =ank of )atiala %.=)& .tate =ank of .aurashtra %.=.& .tate =ank of Travancore %.=T&

PRODUCTS Persona Ban!"n#:

.=I Term Aeposits .=I Goan For )ensioners .=I 5ecurring Aeposits Goan *gainst Mortgage <f )roperty .=I +ousing Goan Goan *gainst .hares X Aebentures .=I >ar Goan 5ent )lus .cheme

O$%er Ser&"'es:

*gricultureC5ural =anking @5I .ervices *TM .ervices Aemat .ervices >orporate =anking Internet =anking Mobile =anking International =anking .afe Aeposit Gocker 5=I1FT

68

1')ay 1'5ail .=I Uishwa Tatra Foreign Travel >ard =roking .ervices Iift >he,ues

AEY STATISTICS ABOUT STATE BANA OF INDIA

To. Lo9#)io$(

=ombay *rea! India %167& Aelhi *rea! India %:0& Madras *rea! India %3:&

S$a$e Ban! o( In)"a Hea)*+ar$ers A))ress .tate =ank =havan Madame >ama Marg Mumbai! Maharashtra 4000-1 India )honeR /1 -- --:: 3::: Fa2R /1 -- --:6 634:

He#&B'#*)e*( =ombay *rea! India I$&'()*+ =anking T+.e )ublic >ompany

6:

S)#)'( <perating Co8.#$+ Size 1:6!3:: employees 377C Re?e$'e -77!-17 mil DI@5E %14?& Fo'$&e& 1:07 We"(i)e httpRCCwww.statebankofind...

INVESTOR RELATIONS:
S)#)e B#$% of I$&i#! the country s largest commercial =ank in terms of profits! assets! deposits! branches and employees! welcomes you to its ;Investors 5elations .ection. .=I! with its heritage dating back to the year 1:07! strives to continuously provide latest and upto date information on its financial performance. It is our endeavor to walk on the path of transparency and allow complete access to all the stakeholders enabling total awareness about the =ank. The =ank communicates with the stakeholders through a variety of channels! such as through e'mail! website! conference call! one'on'one meeting! analysts meet and attendance at Investor >onference throughout the world.

WORAFORCE PLANNING

6/

HRM IN SBI:

70

=anking behemoth .tate =ank of India %.=I&! with over - lakh employees! has for the fast time launched a fast'track promotion policy to choose future leaders from the lower and middle management. Fast'track promotion with tough eligibility criteria will be simultaneously run along with the e2isting normal promotion e2ercises for cadres. <fficials who will be promoted this way will be deployed in challenging operational posts. +owever! there would not be any e2tra money for these officials but will receive the same amount on par with officials of the same rank. In what appears to be a ma#or decision on the human resources management front! the bank has promoted 16 assistant general managers to the post of deputy general managers after e2tensive tests! including written e2ams! group discussions and interviews. .ome of the group discussions and interviews will be conducted by professionals outside of the bank. To avail of fast'track promotion! an official starting from scale I up to scale UI needs to have spent a minimum of three years in the e2isting grade and should have higher performance appraisals to hisCher credit. The tests and interviews are really gruelling and cover many non'banking areas! said an official who has been promoted under the new system. In normal course! it takes an average of si2'seven years before one is considered for the ne2t promotion and the e2ercise is #ust confined to interviews mainly by the bank s own officials.

71

The bank has taken several initiatives in +5 management! including review and revamp of its recruitment policy by a consultant to meet increased competition! manage risks! meet the demand for specialised banking functions! and to use IT as competitive tool. The bank s earlier plan to conduct direct recruitments for some of the senior level posts will be confined only to specialist posts! like IT and security. The bank has also undertaken thorough e2amination of its promotion policy by an internal taskforce and review of its training system by e2perts. .pecial skills in retail banking! treasury! risk management! foreign e2change! development banking etc will need to be carefully nurtured and built! said .=I chairman *9 )urwar. In this conte2t! the bank has charted out plans to upgrade its credit assessment and risk'management skills! retrain staff! develop specialist s skills and introduce technology'driven management information systems. The three key elements which the bank is focusing on to retain its market share! are raving customers %not #ust satisfied customers&! committed and empowered employees.

PERFORMANCE APPRAISAL:
)erformance appraisal! also known as employee appraisal! is a method by which the #ob performance of an employee is evaluated %generally in terms of ,uality! ,uantity! cost and time&.

7-

)erformance appraisals are a regular review of employee performance with in organi"ations.

Genera ,- $%e a".s o( a s'%e.e are:

o Iive feedback on performance to employees. o Identify employee training needs. o Aocument criteria used to allocate organi"ational rewards. o Form a basis for personnel decisionsS salary increases! promotions! disciplinary actions! etc. o )rovide the opportunity for organi"ational diagnosis and development. o Facilitate communication between employee and administrator. o Ualidate selection techni,ues and human resource policies to meet federal e,ual 1mployment opportunity re,uirements.

* common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of ob#ectivesCattributes. In some companies! employees receive assessment from their manager! peers! subordinates and customers while also performing a self assessment. This is known as 370Z.appraisal.

73

T/e 8o() .o.'!#* 8e)/o&( )/#) #*e "ei$ '(e& #( .e*fo*8#$9e #..*#i(#! .*o9e(( #*e:

o Management by ob#ectives %M=<& o 370 degree appraisal o =ehavioral <bservation .cale %=<.& o =ehaviorally *nchored 5ating .cale %=*5.&

Trait based systems! which rely on factors such as integrity and conscientiousness! are also commonly used by business. The scientific literature on the sub#ect provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two'foldR

1& =ecause trait based systems are by definition based on personality traits! they make it difficult for a manager to provide feedback that can cause positive change in employee performance. This is caused by fact that personality dimensions are for the most part static! and while an employee can change a specific behavior they cannot change their personality. For e2ample! a person who lacks integrity may stop lying to a manager because they have been caught! but they still have low

74

integrity and are likely to lie again when the threat of being caught is gone.

-& Trait based systems! because they are vague! are more easily influenced by office politics! causing them to be less reliable as a source of an employee s true performance. The vagueness of these instruments allows managers to fill them out based on who they want toCfeel should get a raise! rather than basing scores on specific behaviors employees shouldCshould not be engaging in. These systems are also most likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information. The history of performance appraisal is ,uite brief. Its roots in the early -0 th century can be traced to Taylor s pioneering Time and Motion studies. =ut this is not very helpful! for the same may be said about almost everything in the field of modern human resource management.

*s a distinct and formal management procedure used in the evaluation of work performance! appraisal really dates from the time of .econd (orld (ar' not more than 70 years ago.

76

Tet in a boarder sense! the practice of appraisal is very ancient art. In the scale of things historical! it might well lay claim to being the world s second oldest profession[

There is! says Aulewic" %1/:/&! \ a basic human tendency to make #udgments about those one is working with! as well as about oneself. *ppraisal it seems! is both inevitable and universal. In the absence of a carefully structured system of appraisal! people will tend to #udge the work performance of others! including subordinates! naturally! informally and arbitrarily.

The human inclination to #udge can create serious motivational! ethical and legal problems in the workplace. (ithout a structured appraisal system! there is little chance of ensuring that the #udgments made will be lawful! fair! defensible and accurate.

)erformance appraisal systems began as simple methods of income #ustification. That is! appraisal was used to decide whether or not the salary or wage of an individual employee was #ustified.

The process was firmly linked to material outcomes. If an employee s performance was found to be less than ideal! a cut in pay would follow. <n the other hand! if their performance was better than the supervisor e2pected! a pay rise was in order.

77

Gittle consideration! if any! was given to the developmental possibilities of appraisal. It was felt that a cut in pay! or a rise! should be provide the only re,uired impetus for an employee to either improve or continue to perform well.

.ometimes this basic system succeeded in getting the results that were intendedS but more often that not! it failed.

For e2ample! early motivational researchers were aware that different people with roughly e,ual work abilities could be paid the same amount of money and yet have ,uite different levels of motivation and performance.

These observations were confirmed in empirical studies. )ay rates were important! yesS but they were not the only element that had an impact on employee performance. It was found that other issues! such as morale and self' esteem! could also have a ma#or influence. *s a result! the traditional emphasis on reward outcomes was progressively re#ected. In the 1/60 s in the Qnited .tates! the potential usefulness of appraisal as tool for motivation and development was gradually recogni"ed. The general model of performance appraisal! as it is known today! began from that time.

78

7:

CHAPTER IV

THEORITICAL FRAMEWORA

37

THEORETICAL FRAMEWORA

INTRODUCTION TO HRM:

+uman 5esource Management means employing people! developing their resources! utili"ing! maintaining and compensating their services in tune with the #ob and organi"ational re,uirements with a view to contribute to the goals of the organi"ation! individual and the society.

FEATURES OF HRM:

+5M is concerned with employees both as individuals and as a group in attaining goals. It is also concerned with behavior! emotional and social aspects of personnel. +5M covers all levels %low! middle! and top& and categories %unskilled! skilled! technical! professional! clerical and managerial& of employees. It covers both organi"ed and unorgani"ed employees. It is a continuous and never ending process. Individual employee'goals consist of #ob satisfaction! #ob security! high salary! attractive fringe benefits! challenging work! pride! status! recognition etc.

7:

 It is a responsibility of all line managers and a function of staff managers in an organi"ation. It is the central sub'system of an organi"ation and it permeates all types of functional management. It is concerned mostly with managing human resources at work.

FUNCTIONS OF HRM:

These are broadly classified in to two categories 1. Managerial Functions -. <perative Functions

Mana#er"a F+n'$"ons::

Managerial Functions of personnel management involve )lanning! <rgani"ing! Airecting and >ontrolling. *ll these functions influence operative functions.

#- P!#$$i$ : It is a predetermined course of action. )lanning pertains to formulating strategies of personnel programmes and changes in advance that will contribute to the organi"ational goals. In other words! it involves planning of human resources! re,uirements! recruitment!

7/

selection! training etc. It also involves forecasting of personnel needs! changing values! attitudes and behavior of employees and their impact on the organi"ation. "- O* #$izi$ : *n organi"ation is a means to an end. It is essential to carry out the determined course of action. >omple2 relationships e2ist between the speciali"ed departments and the general departments as many top managers are seeking the advice of the personnel manager. Thus! an organi"ation establishes relationships among the employees so that they can collectively contribute to the attainment of company goals. 9- Di*e9)i$ : The ne2t logical function after completing planning and organi"ing is the e2ecution of the plan. The basic function of personnel management at any level is motivating! commanding! leading and activating people. The willing and effective co'operation of employees for the attainment of organi"ational goals is possible through proper direction. Tapping the ma2imum potentialities of the people is possible through motivation and command. &- Co$)*o!!i$ : It involves checking! verifying and comparing of the actual with the plans! identification of deviations if any and correcting of identified deviations.

80

OPERATIVE FUNCTIONS:

The <perative Functions of +5M are related to specific activities of personnel management vi".! 1mployment! Aevelopment! >ompensation and 5elations. *ll these functions are interacted with managerial functions. Further these functions are to be performed in con#unction with management functions.

1- E./ o,.en$: It is concerned with securing and employing the

people possessing the re,uired kind and level of human resources necessary to achieve the organi"ational ob#ectives. It covers functions such as #ob analysis! human resource planning! recruitment! selection! placement! induction and internal mobility. Jo" A$#!+(i(R It is a process of study and collection of information relating to the operations and responsibilities of a specific #ob.

H'8#$ Re(o'*9e P!#$$i$ : It is a process for determination and assuring that the organi"ation will have an ade,uate number of ,ualified persons! available at proper times! performing #obs which would meet the needs of the organi"ation and which provide satisfaction for the individuals involved.

81

 Re9*'i)8e$): It is the process of searching for prospective employees and stimulating them to apply for #obs in an organi"ation.

Se!e9)io$: It is the process of ascertaining the ,ualifications! e2periences! skills! knowledge etc.! of an applicant with a view to appraising hisCher suitability to a #ob.

P!#9e8e$): It is the process of assigning the selected candidate with the most suitable #ob in terms of #ob re,uirements. It is matching of employee specifications with #ob re,uirements.

I$&'9)io$ #$& O*ie$)#)io$: Induction and <rientation are the techni,ues by which a new employee is rehabilitated in the changed surrounding and introduced to the practices! policies! purposes! and people etc.! of the organi"ation.

3- H+.an Reso+r'es De&e o/.en$: It is the process of improving!

moulding and changing the skills! knowledge! creative ability! aptitude! values! commitment etc. based on present and future #ob and organi"ational re,uirements. This function includesR

8-

 Pe*fo*8#$9e A..*#i(#!: It is the systematic evaluation of individuals with respect to their performance on the #ob and their potential for development.

T*#i$i$ : It is the process of imparting to the employees technical and operating skills and knowledge.

M#$# e8e$) De?e!o.8e$): It is the process of designing and conducting suitable e2ecutive development programs so as to develop the managerial and human relations skill of employees. C#*ee* P!#$$i$ #$& De?e!o.8e$): It is the planning of one s career and implementation of career plans by means of education! training! #ob search and ac,uisition of work e2periences.

D- Co./ensa$"on: It is the process of providing ade,uate! e,uitable

and fair remuneration to the employees. It includesR

Jo" E?#!'#)io$: It is the process of determining relative worth of #obs. W# e #$& S#!#*+ A&8i$i()*#)io$: This is the process of developing and operating a suitable wage and salary programmed.

83

 I$9e$)i?e(: It is the process of formulating! administrating and reviewing the schemes of financial incentives in addition to regular payment of wages and salary. F*i$ e Be$efi)(: These are the various benefits at the fringe of the wage. Management provides benefits to motivate and to meet their life s contingencies.

E- H+.an Re a$"ons: )racticing various human resources policies and

programmes like employment! development and compensation and

interaction among employees create a sense of relationship between the individual worker and management! among workers and trade unions and the management. It is the process of interaction among human beings. +uman relations is an area of management in integrating people into work situations in a way that motivates them to work together )roductively! >o'operatively and with 1conomic! )sychological and .ocial .atisfaction.

Qnderstanding and applying the models of )erception! )ersonality! Gearning! Intra and Inter )ersonal 5elations! Intra and Inter Iroup 5elations. Motivating the employees. =oosting employee morale.

84

 Aeveloping the communication skills. Aeveloping the leadership skills. Improving ,uality of work life of employees through participation and other means. )roviding a comfortable work environment by reducing Fatigue! Monotony! =oredom and Industrial *ccidents. >ounseling the employees in solving their personal! family and work problems and releasing their .tress! .train and Tensions.

;- In)+s$r"a Re a$"ons: It refers to the study of relations among

1mployees! 1mployer! Iovernment and Trade Qnions. It includesR Indian Gabour Market Trade Qnionism >ollective =argaining Industrial >onflicts (orker s )articipation in Management and ]uality >ircles

6- Re'en$ Tren)s "n HRM: +5M has been advancing at a fast rate.
The recent trends in +5M includeR

86

 ]uality of (ork Gife Total ]uality in +uman 5esources +5 *ccounting! *udit and 5esearch and 5ecent techni,ues of +5M.

CORPORATE MANAGEMENT:
In the very narrow conte2t of corporate Bhuman resourcesB management! there is a contrasting pull to reflect and re,uire workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills! ingenuity! humor! and careful listening! are e2amples of traits that such programs typically re,uire. It would appear that these evidence a general shift through the human capital point of view to an acknowledgment that human beings do contribute much more to a productive enterprise than BworkBR they bring their character! their ethics! their creativity! their social connections! and in some cases even their pets and children! and alter the character of a workplace. The term corporate culture is used to characteri"e such processes at the organi"ational level. The traditional but e2tremely narrow conte2t of hiring! firing! and #ob description is considered a -0th century anachronism. Most corporate organi"ations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. .ome of these! in

87

turn! deprecate the term Bhuman resourcesB as useless. Tet the term survives! and if related to ^resourcefulnessH! has continued and emerging relevance to public policy. In general the abstractions of macro'economics treat it this way ' as it characteri"es no mechanisms to represent choice or ingenuity. .o one interpretation is that Bfirm'specific human capitalB as defined in macro' economics is the modern and correct definition of Bhuman resourcesB ' and that this is inade,uate to represent the contributions of Bhuman resourcesB in any modern theory of political economy.

HUMAN RESOURCES MANAGEMENT TRENDS AND INFLUENCES:

In organi"ations! it is important to determine both current and future organi"ational re,uirements for both core employees and the contingent workforce in terms of their skillsCtechnical abilities! competencies! fle2ibility etc. The analysis re,uires consideration of the internal and e2ternal factors that can have an effect on the resourcing! development! motivation and retention of employees and other workers. The e2ternal factors are those largely out'with the control of the organi"ation and include issues such as the economic climate! current and future trends of the labor market e.g. skills! education level! government investment into industries etc. <n the other hand internal influences are broadly within the control of the organi"ation to predict determine and

88

monitor! for e2ample the organi"ational culture underpinned by management behaviors %or style&! environmental climate and the approach to ethical and corporate social responsibilities.

MAJOR TRENDS:
In order to know the business environment in which any organi"ation operates! three ma#or trends should be consideredR

De.o#ra/%"'s $ the characteristics of a populationCworkforce! for

e2ample! age! gender or social class. This type of trend may have an effect in relation to pension offerings! insurance packages etc.

D"&ers"$, $ the variation within the populationCworkplace. >hanges in

society now mean that a larger proportion of organi"ations are made up of Bbaby' boomersB or older employees in comparison to thirty years ago. Traditional advocates of Bworkplace diversityB simply advocate an employee base that is a mirror reflection of the make'up of society insofar as race! gender! se2ual orientation! etc.

S!" s an) *+a "("'a$"ons $ as industries move from manual to more

managerial professions so does the need for more highly skilled graduates. If the market is BtightB %i.e. not enough staff for the #obs&! employers will have to compete for employees by offering financial rewards! community investment! etc.

8:

FRAMEWORK:
+uman 5esources Aevelopment is a framework for the e2pansion of human capital within an organi"ation or %in new approaches& a municipality! region! or nation. +uman 5esources Aevelopment is a combination of training and education! in a broad conte2t of ade,uate health and employment policies that ensures the continual improvement and growth of the individual! the organi"ation! and the national human resourcefulness. *dam .mith states! The capacities of individuals depended on their access to education. +uman 5esources Aevelopment is the medium that drives the process between training and learning in a broadly fostering environment. +uman 5esources Aevelopment is not a defined ob#ect! but a series of organi"ed processes! with a specific learning ob#ective %@adler!1/:4&(ithin a national conte2t! it becomes a strategic approach to intersectoral linkages between health! education and employment.

STRUCTURE:
+uman 5esources Aevelopment is the structure that allows for individual development! potentially satisfying the organi"ations! or the nationHs goals. The development of the individual will benefit the individual! the organi"ation! or the nation and its citi"ens. In the corporate vision! the +uman 5esources Aevelopment framework views employees! as an asset to the enterprise whose value will be enhanced by development! Its primary focus is on growth and employee development\it emphasi"es developing individual potential and

8/

skills %1lwood! <lton and Trott 1//7&+uman 5esources Aevelopment in this treatment can be in'room group training! tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a desired outcome that will develop the individual s performance. *t the level of a national strategy! it can be a broad intersectional approach to fostering creative contributions to national productivity

TRAINING:
*t the organi"ational level! a successful +uman 5esources Aevelopment program will prepare the individual to undertake a higher level of work! organi"ed learning over a given period of time! to provide the possibility of performance change %@adler 1/:4&. In these settings! +uman 5esources Aevelopment is the framework that focuses on the organi"ations competencies at the first stage! training! and then developing the employee! through education! to satisfy the organi"ations long'term needs and the individuals career goals and employee value to their present and future employers. +uman 5esources Aevelopment can be defined simply as developing the most important section of any business its human resource by! attaining or upgrading the skills and attitudes of employees at all levels in order to ma2imise the effectiveness of the enterprise %9elly -001&. The people within an organi"ation are its human resource. +uman 5esources Aevelopment from a business perspective is not entirely focused on the individual s growth and development! development

:0

occurs to enhance the organi"ationHs value! not solely for individual improvement. Individual education and development is a tool and a means to an end! not the end goal itself. %1lwood F. +olton II! Wames (. Trott Wr&. The broader concept of national and more strategic attention to the development of human resources is beginning to emerge as newly independent countries face strong competition for their skilled professionals and the accompanying brain' drain they e2perience.

RECRUITMENT:
1mployee recruitment forms a ma#or part of an organi"ationHs overall resourcing strategies which seek to identify and secure the people needed for the organi"ation to survive and succeed in the short to medium'term. 5ecruitment activities need to be responsive to the ever'increasingly competitive market to secure suitably ,ualified and capable recruits at all levels. To be effective these initiatives need to include how and when to source the best recruits internally or e2ternally. >ommon to the success of either areS well'defined organi"ational structures with sound #ob design! robust task and person specification and versatile selection processes! reward! employment relations and human resource policies! underpinned by a commitment for strong employer branding and employee engagement strategies. Internal recruitment can provide the most cost'effective source for recruits if the potential of the e2isting pool of employees has been enhanced through

:1

training! development and other performance'enhancing activities such as performance appraisal! succession planning and development centers to review performance and assess employee development needs and promotional potential. Increasingly! securing the best ,uality candidates for almost all organi"ations will rely! at least occasionally if not substantially! on e2ternal recruitment methods. 5apid changing business models demand skills of e2periences which cannot be sourced or rapidly enough developed from the e2isting employee base. It would be unusual for an organi"ation today to undertake all aspects of the recruitment process without support from third'party dedicated recruitment firms. This may involve a range of support services! such asS provision of >Us or resumes! identifying recruitment media! advertisement design and media placement for #ob vacancies! candidate response handling! short listing! conducting aptitude testing! preliminary interviews or reference and ,ualification verification. Typically! small organi"ations may not have in'house resources or! in common with larger organi"ations! may not possess the particular skill'set re,uired to undertake a specific recruitment assignment. (here re,uirements arise these will be referred on an adhoc basis to government #ob centers or commercially run employment agencies. 12cept in sectors where high'volume recruitment is the norm! an organi"ation faced with an une2pected re,uirement for an unusually large number of new recruits at short notice will often hand over the task to a specialist e2ternal recruiter to manage the end'to'end resourcing programme. .ourcing

:-

e2ecutive'level and senior management as well as the ac,uisition of scarce or ;high'potential recruits has been a long'established market serviced by a wide range of ;search and selection or ;headhunting consultancies which typically form long'standing relationships with their client organi"ations. Finally! certain organi"ations with sophisticated +5 practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third'party recruitment agencies or consultancies. In the most sophisticated of these arrangements the e2ternal recruitment services provider may not only physically locate! or ;embed ! their resourcing team%s& within the client organi"ation s offices but will work in tandem with the senior human resource management team in developing the longer'term +5 resourcing strategy and plan.

:3

CHAPTER V

ANALYSIS OF INTERPRETATION

7:

ANALYSIS OF THE STUDY

1- Gevel of employee satisfaction on present wage structure in the organi"ationR' T#"!e: 1 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 70 1-0 -0 -00 Per'en$a#e o( Res/on)en$s 30? 70? 10? 100?

Gra/%"'a re/resen$a$"on

Percentag eof Respondents

10% 30% Excellent Good Average

60%

INTERPRETATION:
The above analysis derives that only 70? of employees respond as good on present wage structure. The scenario e2plains us there is need to consider wage structure of employees.

:4

-. 1mployees opinion regarding welfare measures that implemented in the organi"ationR' T#"!e: 3 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 40 160 10 -00 Per'en$a#e o( Res/on)en$s -0? 86? 6? 100?

Gra/%"'a re/resen$a$"on

INTERPRETATION:
86? of the employees felt good about the welfare measures implementing by the organi"ation. It suggest that there is a need to improve the welfare measures to some e2tent by the organi"ation

:6

3. 1mployee opinion on fringe benefits in the <rgani"ationR' T#"!e: D Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 40 170 0 -00 Per'en$a#e o( Res/on)en$s -0? :0? 0? 100?

Gra/%"'a re/resen$a$"on

INTERPRETATION:
It is interpreted from above analysis that :0? of employees feel good about fringe benefits providing by the organi"ation.

4. Gevel of employee satisfaction on promotion policy in the organi"ationR' T#"!e: E

:7

Res/onses 12cellent Iood *verage Total

No0 o( Res/on)en$s 10 160 40 -00

Per'en$a#e o( Res/on)en$s 6? 86? -0? 100?

Gra/%"'a re/resen$a$"on

Percentag eof Respondents

80% 70% 60% 50% 40% 30% 20% 10% 0% 20% 5% Excellent Good Average 75% Percentage of Respondents

INTERPRETATION:
The captioned analysis reveals that 86? of the employees are with a good opinion towards the promotion policy. It is to be suggested that to reveal the policy for satisfying all the employees. 6. 1mployee satisfaction on transfer policy in the <rgani"ationR' T#"!e: ; Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s -0 180 10 -00 Per'en$a#e o( Res/on)en$s 10? :6? 6? 100?

:8

Gra/%"'a re/resen$a$"on

INTERPRETATION:
It clearly shows from the above analysis! :6? of the employees felt good regarding to the transfer policy in the organi"ation.

7. 1mployee opinion on prevailing of industrial atmosphere in the organi"ationR' T#"!e: 6 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s : 1640 -00 Per'en$a#e o( Res/on)en$s 4? 87? -0? 100?

Gra/%"'a re/resen$a$"on

::

Percentag eof Respondents

4% 20%

Excellent Good Average

76%

INTERPRETATION:
It is to be known from the above analysis! 87? of the employees felt well on prevailing of industrial atmosphere in the organi"ation. It is re,uired to improve the industrial atmosphere in the organi"ation. 8. 1mployee opinion on Irievance redresser Mechanism in the organi"ationR' T#"!e: C Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 30 130 40 -00 Per'en$a#e o( Res/on)en$s 16? 76? -0? 100?

Gra/%"'a Re/resen$a$"on

:/

Percentag eof Respondents

Average 20%

Good

65%

Percentage of Respondents

Excellent 5%

0%

20%

40%

60%

80%

INTERPRETATION:
From the above information only 76? were felt well on grievance redresser mechanism. The situation warrants in improve of grievance redresser mechanism to more e2tent in the organi"ation. :. Gevel of employee satisfaction with recruitment of new staff in the organi"ationR' T#"!e: 5 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 1:4 17 0 -00 Per'en$a#e o( Res/on)en$s /-? :? 0? 100?

Gra/%"'a Re/resen$a$"on

/0

INTERPRETATION:
(ith the help of above information it is to be known that /-? of respondents have an e2cellent satisfaction with the recruitment of new staff in the organi"ation.

/. 1mployee opinion about Training )rogrammes in the organi"ationR' T#"!e: 2 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 164: 0 -00 Per'en$a#e o( Res/on)en$s 87? -4? 0? 100?

Gra/%"'a Re/resen$a$"on

/1

INTERPRETATION:
The above representation shows that! 87? of employees felt e2cellent regarding the conduction of training programmes in the organi"ation. 10. <pinion on up gradation of skills and motivation levels of employees in the organi"ationR' T#"!e: 17 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 67 144 0 -00 Per'en$a#e o( Res/on)en$s -:? 8-? 0? 100?

Gra/%"'a Re/resen$a$"on

/-

Percentag eof respondents

0% 28% Excellent Good Average 72%

INTERPRETATION:
The above analysis shows that 8-?of employees were believed that the organi"ation is good in up gradation skills and keeping motivation levels high. It is to be suggested that to improve more in this area. 11. 1mployee opinion on super annuration benefits in the organi"ationR' T#"!e: 11 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 1/: 0 -00 Per'en$a#e o( Res/on)en$s /7? 4? 0? 100?

Gra/%"'a Re/resen$a$"on

/3

INTERPRETATION:
It is to be clear from the above information! /7? of respondents have e2cellent opinion on the super annuration benefits providing by the organi"ation 1-. <pinion on opportunities availing in the organi"ation is better than the other organi"ations in the same industryR' T#"!e: 13 Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 10 1/0 0 -00 Per'en$a#e o( Res/on)en$s 6? /6? 0? 100?

Gra/%"'a Re/resen$a$"on

/4

Percentag eof Respondents

100% 0% 80% 70% 60% 50% 40% 30% 20% 10% 0%

5%

Percentage of Respondents

5% Excellent Good

0% Average

INTERPRETATION:
The above peak concludes that /6?of the employees felt well about their organi"ation are better than the other organi"ations in availing of opportunities of same industry. 13. <pinion of the employee about sound policies that moving in the organi"ationR' T#"!e: 1D Res/onses 12cellent Iood *verage Total No0 o( Res/on)en$s 14 1:7 0 -00 Per'en$a#e o( Res/on)en$s 8? /3? 0? 100?

Gra/%"'a re/resen$a$"on

/6

Percentag eof Respondents

0% 7%

Excellent Good Average

3%

INTERPRETATION:
The above piechart shows! /3? of employees were agreed with the concept that the organi"ation is moving on good sound policies.

14. 1mployee opinion in assessing the future of organi"ationR' T#"!e: 1E Res/onses 1conomically upward 12cellent growth with huge profits *verage Total No0 o( Res/on)en$s 0 -00 0 -00 Per'en$a#e o( Res/on)en$s 0? 100? 0? 100?

Gra/%"'a re/resen$a$"on

/7

Percentag eof Respondents

0% Econo!"call# $p%ard Excellent gro%t& %"t& &$ge prof"ts Average

100%

INTERPRETATION:
The above analysis conclude that the employees have a strong belief! assessing their bank future have an e2cellent growth with huge profits.

/8

CHAPTER-VI

FINDINGS SUGGESTIONS CONCLUSION

:4

FINDINGS F SUGGESTIONS

FINDINGS

1- Ma#ority of the employees of urban area are not satisfying with the present wage structure.

-. It is observed that the employees of the rural and remote area are unhappy with the transfer policy

3. From the studies it is known that specific core of employees are unhappy with Irievance redresser mechanism.

4. From the studies it is observed that there is a need in up gradation of skills and keeping motivation levels high in sub staff

6.

It is observed that the attitude of time management and conduction of customer service is not good in gross root level.

:4

SUGGESTIONS

It is suggested that the wage structure of urban area have to be increased.

Training programmes for employees who promoted to further cadre to be strictly followed especially from sub staff.

It is advised to appraise the performance of each employee on the basis of seniority! e2perience! sincerity and skills of knowledge.

It is to be suggested that to create awareness about the grievance redresser mechanism in staff! it has to be strictly amended.

It is to be suggested that to improve the time management and attitude in conduction of customer service.

It is highly essential to improve work holmic nature especially in grass root level.

:6

CONCLUSION

Most of the employees of urban area are in a view that there should be an increase of their salaries to meet the present needs. The training programmes for motivation and up gradation of skills would be in regular. .o that it helps in enhancing the ,uality and speediness of work. The policies and practices in wage and salary administration! in transfers! in promotion pool will be strictly followed. It is observed that the grievance redresser mechanism is not strictly following. It is also observed that there is an improper time management and conduction of customer service. There is more to improve workaholic nature especially in grassroots level. Most of the employees feel that their organi"ation is the best in fringe benefits! super annuration benefits! and e,uitable wages. Ma#ority of employees think that! since their organi"ation providing a good industrial atmosphere and moving on sound policies ultimately lead to the future of their bank with e2cellent growth and huge profits.

:7

BIBLIOGRAPHY

We1 s"$es
www.sbi.co.in www.sify.com www.wikipedia.com

Jo+rna s
>olleague %Internal maga"ine of .=I& >apital market

Boo!s
+5 management and industrial relations by p.subbarao +5 management by >.=. Mamoria )rinciples and practices of banking 9now thyself %Aepartmental publication of .=I&

:8

GUESTIONNAIRE

M..*TT*Q.+*A1UI

pursuing

my

M.=.*

from

ADITYA

INSTITUTE OF P-G STUDIES0A-U4: 9akinada. *s a part of my circulam. I am doing my pro#ect in ..=.I Titled +5 management system I would re,uest you kindly e2tend your co'operation in filling the ,uestionnaire to the fullest of your knowledge.

P ease ans2er $%e (o o2"n# *+es$"ons:

1+ave you been satisfying yourself with present wage structure in your %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

<rgani"ation_

-.

(hat do you feel about the welfare measures that implemented in the

<rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

3. (hat is the opinion on Fringe benefits in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

::

4. +ave you been satisfying with promotion policy that implemented in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

6. +ave you been satisfying with transfer policy in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

7.

(hat is the opinion in prevailing of industrial atmosphere in your

<rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

8. (hat is the opinion on Irievenceredressal Mechanism in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

:. +ave you been satisfying with recruitment of new staff in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

/. (hat is the opinion about Training )rogrammes in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

10. Ao! the <rgani"ation is well in keeping motivation levels and upgradation of skills_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

:/

11. (hat is the opinion on super annuration benefits in your <rgani"ation_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

1-. Ao you feel that the opportunities availing in your <rgani"ation are better than other <rgani"ations in same industry_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

13. Ao! your <rgani"ation is moving on sound policies_ %*& 12cellent %=& Iood %>& *verage %A& =elow *verage

14. In what way do you assess the future of your =ank_ %*& 1conomically upward %>& 1merge as super power %=& 12cellent Irowth with huge profits %A& 5etrieving the e2isting economic stability

/0