5. What are Motivation Theories that apply to the banking sector?

    The banking industry in Sri Lanka is currently facing stiff competition. The result was that development slowed and expanded rapidly after the end of the Civil War. Competitiveness is a new and derivative opportunity for employees. Conducted by the Executive Level Employees of the Banking Sector in Sri Lanka.   

    Fred Luthan2004) defines motivation as a process that begins with or with psychology. According to Lutheran, the key to understanding the motivation process remains Relationship between needs, drivers, and incentives. The figure below shows the Motivation process. Drivers aimed at incentives are required.

Needs: Needs are created when there is a physical or mental imbalance.

Drive: Drives or motives (terms can be used differently according to Luthans - 2004), arranged to mitigate needs. The drive is functionally centered and provides the energy to reach it and encourage it.

Incentives: Incentives are anything that satisfies the need and reduces the driver. Thus, receiving incentives tends to restore physical or mental balance and will reduce or cut off the drive.

THE HAWTHRONE STUDIES

    The Hawthorne studies experimented with by Elton Mayo of the School of Human Relations are one of the earliest and pioneering theories in the field of motivation. He conducted behavioral experiments at Hawthorne Works at American Western Electric Company in Chicago. He did a few lighting experiments, introduced a break between performances, and introduced a refresh during the break. On the basis of this, he concluded that motivation is a very complex subject.

    It was not only about salary, service status, and morale but also psychological and social factors. Although this research was criticized from many angles, the central conclusion was:

• People are motivated more than wages and conditions.
• The need for recognition and a sense of entitlement is very important.
• Attitudes towards work strongly affect the group.

    This study derives the term "hawthorn effect" from which some people tend to work harder and act better when they participate in a test. Individuals may change their behavior, not because of the handling of independent variables but because of the attention, they receive from researchers.

THE CONTENT THEORIES OF MOTIVATION 

    Content theories of motion These theoretical theories focus on identifying human needs and drivers and prioritizing how these needs become drivers (Lautens, 2004). They care about the incentives or goals that people try to satisfy and function well. The basis of these theories is the belief that an unsatisfied need causes stress and illness.

    Content theories are called "static" because they include only one or more points over time, and they tend to be passed or present. So they do not necessarily predict motivation or behavior, but it is still important to understand what motivates people in the workplace. Content theories date back to the 20th century when pioneering scientific managers such as Frederick W. Taylor, Frank Gilbraith, and Henry L. Gant proposed modern wage, incentive models.

    Next came the human relations movement pioneered by Elton Mayo, focusing on economic conditions and working conditions. Later, content theories intended to focus on high-level needs pioneered by the contributions of Abraham Maslow, Friedrich Herzberg, Clayton Alderfer, David McClelland, and Douglas McGregor. The primary objective of this study is to identify what motivates bank executives, so the content theory is the most relevant theory.

Maslow’s Hierarchy of needs.

    Abraham Maslow outlined elements of the hierarchy of a classic paper in 1943 Needs, as a theory of motivation. Drawing mainly from humanistic psychology and his clinical experience has shown that a person's needs can be organized in a hierarchical way. he identified five needs that people are trying to meet:

Physiological Needs - 

    The basic level of the hierarchy, physical needs in general, corresponds to the basic needs of the ignorant of the people.

Safety needs - 

    These second-level requirements are roughly the same as security requirements. These requirements concerned with emotional and physical safety.

Belonging needs- 

    This third or intermediate level of need, affiliate requirements.

Esteem needs -

    Estimated Requirements Represent high-level requirements proof and status.

Self-actualization needs -

    This level is all down, intermediate and the higher needs of man. People who are self-verified are self-satisfied and have realized all their potential.

    Maslow's theory has an intelligent appeal and is very influential. However, the theory has not been validated by empirical research and its rigidity has been criticized as the fact that requirements arise only in a hierarchy. Human and organizational behavioral experts state that different people have different priorities, and it is difficult to accept that the hierarchy of human needs is gradually increasing.

References -

https://www.assignmentpoint.com/business/human-resource-management/human-resource-management-practices-banking-sector.html

Role of HR in Banking - David Ingram

http://etheses.dur.ac.uk/80/

https://theinvestorsbook.com/human-resource-management-hrm.html

https://www.bankingexchange.com/c-suite/item/6715-employee-turnover-dealing-with-costs-seen-and-hidden

    

4. Why Human Resource Management is important for the banking sector

    Skilled manpower and Efficient can manage the financial risks that banks need to take on a regular basis. It is the responsibility of the Department of Human Resources to find such talented manpower and ensure that they hold appropriate positions in the banks.

    Any organization that deals with people need good human resource management. Banking will always be a "public business". Efficient and efficient management of the human resources of the organization makes it a successful one.

    

    The importance of human resource management for banking has grown in many ways due to the nature of the banking industry, which is mainly service-based. The biggest challenge facing the banking industry at any given time frame is managing the organization's individuals while managing a wide range of financial and economic risks. The efficient and efficient manpower management of this sector can only be done by the financial risks that banks have to take on a regular basis. It is the responsibility of the Department of Human Resources to find such skilled manpower and employ them in proper employment in banks.

    In addition to the risks in the banking sector, the people who run the day-to-day operations of banks need to keep customer satisfaction in mind. It is the responsibility of the human resource to ensure that the people working in the front office become the face of the bank, thereby working in front of qualified people. Selected candidates in banks should make sure that they get the necessary training before starting their work so that they are better aware of the intricacies of the core banking industry and customer relations.

 

Importance of Human Resource Management in the Banking Sector 

Recruitment Plan: 

    

    The continuously growing banking industry over the past decade has led to many vacancies and overall growth in this sector. The number of branches in the public sector has increased significantly and so has the need for trained manpower. The HR management team is responsible for analyzing the future needs of their organization and calibrating the recruitment process in any particular bank.

Maintaining Workforce Experience and Youth Balance: 

    With the emergence of online banking and major banking services, the changing situation in the banking sector needs to be enhanced in terms of youthful energy and work ethic. But, as in any other field, there must be a good balance between young energy and experienced professionals to make it a successful and effective combination.Human resource management is therefore responsible for maintaining this balance and making a number of cultural and management changes to suit working people.

Manpower Training: 

    Technology is changing rapidly with the methodology of working in the banking sector. Not only machines, but also access to various schemes, policies and banking facilities change over time. New recruits and seniors should also be trained to grasp the same thing from time to time. Human Resource Management ensures that the people working in the banking organization do not suffer from any such anomalies. Empowering employees to train and then measure their performance is something the HR department should take care of.

Performance Management and Skills Identification: 

    Human resource management is responsible for measuring the overall performance of employees working in different departments. They focus more on people who do not have the working spirit of the organization and try to help them improve their performance for the betterment of the bank. The Department of Human Resources gives employees adequate recognition and promotion to give prominence to their hard work and dedication.

Keeping a tab of the employee's personal needs: 

    The employee of any organization seeks his / her value in the company. Once they feel they are an important resource to the company, they work even harder and the company thinks about it for them. The Department of Human Resources should look into granting pay privileges for good work, keeping some personal information and wishing for it on occasion, granting leave and keeping a tab on promotion and transfer requirements.

Keeping a tab on retirements and resignations: 

    It is the responsibility of the Department of Human Resources to retain skills. The HR team is also responsible for making arrangements to stop the resignations of employees to any organization. Employees should evaluate and analyze the reasons for their decision to leave the organization and take action to improve the situation. The HR team should have a record of retirements planned for a few years and make sure they have recruitment notices to fill vacancies.

    The banking sector is a broad financial and economic industry that is mainly dependent on the workforce. Accordingly, the management and maintenance of this workforce become the priority of the Human Resources Department of the Banks.

        

    

3. Employee Relations

  Employee  relationship  management  (ERM)  refers  to  the  development  of  the relationship between the organizational management  and the employees. There are  several issues in ERM which can affect employee satisfaction as well as influences the productivity and overall corporate culture. It also refers to the relation between the different employees of an organization. The relationship can be between employee and the management as well as between employees at the same organizational hierarchy. It is nothing but a technique which binds the  employees and  the management  together on  a common  ground and  leads them towards  the  organizational  goal.

 Employee relationship is the way employees deal with the employer. In other words, the relationship between employers and workers in their workplace. Employees who work with the employer can work individually or collectively. It can be two or more. As it grows, it can become a team. Then a group of people dealing with the employer says something similar to the union.

    Employee relations are one integrated concept in human resource management. Its purpose is to maintain and develop employee motivation as well as employee morale. Employee motivation is a way of improving the ability of employees to work. Employee confidence should be enhanced and this can be done by protecting personal happiness and social satisfaction.

 From  the employee’s  perspective, an  employee  is an  asset rather  than a  cost.  An effective employee relation involves producing and nurturing a self-motivated and productive workforce.  Employees  should  be  motivated  from  within,  since  the  management  help  to nurture  the  type  of  environment  where  employees  flourish,  enabling  the  organization  to achieve competitive advantage.

Human resource managers are expected to understand the different types of employee relationship approaches. The reason is that human resource managers provide theoretical foundations for many roles in human resource management.

    In the current market concept, we can find different approaches to employee-employer relationships.

Unified approach

The unitary approach means that employees and employers work towards the same goals. In this approach, we can see how team activities work, a common goal, an individual strategy, and the interpersonal efforts of individuals. What makes this concept positive is that conflicts are non-permanent mutations that are the result of improper management of the organization. This approach creates a winning position for the organization.

Every employee strives to achieve common goals while maintaining peace and cooperation in the workplace. It will benefit everyone involved in the organization. It also treats corporate conflicts that feel strikes are futile and destructive.

The main purpose of this approach is as follows:

1. Creating a creative, effective, and pleasant sound in the workplace.
2. Develop a responsible, open, fair, and transparent work culture within the organization
3. Create a pleasant work environment
4. Limiting issues between management and employees

    We can find an example of the unity of the banking and financial industry. In the banking and finance industry, we often see bonus proposals. A bonus is a gift that an employee gives to an employer based on the achievement of specific goals. Therefore, the staff works to achieve the set budget goals. The same is true of the employee's ultimate goal. As a result of overcoming the situation, employers also earn their bonuses and bank budgets.

2. Strategic employee resource and skill management

 Recruitment and skills management is the most important function of human resource management. While turnover is a constant, human resource management professionals strive to keep the financial and human impact to a minimum. They know they must continuously update their recruiting strategies if they are to stay competitive in finding and retaining top talent. In order to minimize the resignation turnover of the employees, the Human Resources Department should select the most suitable candidates for the Bank and develop their capabilities according to the expected level of the Bank.

Recruitment as a Human Resource Activist

   At the start of every year, one thing we can always predict is the huge number of lists divining the hot issues in HR for the year ahead. Reading the crop of blogs that have appeared in the past few weeks, it is hard to disagree with the consensus among influencers and experts that the impact of technology on jobs, learning and management will define the agenda for HR into the 2020s. This includes creating a pool of suitable candidates in line with the human resource plan aimed at present and future selection. Recruitment is usually done through media advertisements (e.g. newsletters, social media, company websites), employment agencies, job fairs, and word of mouth going to universities and colleges.

What is the Importance of Recruitment

1. Find qualified and experienced employees in the market.
2. Replacing vacancies of retired employees.
3. Lack of qualifications with external staff.
4. Facing current market conditions or facing future market changes.
5. In some cases recruiting existing employees outweighs the costs of upgrading to new positions.

Recruitment in the banking sector

Level of employment in banking sector

    The Department of Human Resources has recruited employees to the Bank's top management level, mid-management level, and operational level. There are three major types of bank recruitment. Human Resource Management is important for banks because banking is a service industry. Management of people and management of risk are two key challenges facing banks. How you manage the people and how you manage the risks determines your success in the banking business.

Direct Recruitment - 

    Banks and financial institutions directly advertise the qualifications required for positions and experience on newspapers, websites (own website and others), social media to find suitable employees for the bank. Such recruitments are made for vacancies at the middle management level and operational level.

Former Training Executives, Management Trainees, Kanish Ex Executives.

Taking people from other banks and financial institutions - 

    Competitive banks and financial institutions need to be qualified, experienced, and performing banks. These types of recruitments are done for mid-management level and top-level vacancies.

Former Heads of Departments, Managing Directors.

From Internal Promotion - 

    

    Promotion of Internal Employees to higher grades according to internal needs.

Former Junior Executive Executive I to Junior Executive Executive II, Junior Executive Executive II to Executive I

Compared to the above 03 categories, the internal promotion has the least risk and it is a good habit to encourage existing employees in banks. Therefore, every bank conducts such promotions in its organization annually.

    Also, recruiting management-level employees with other companies is sometimes a problem for the bank because they had bad habits. Especially in lending. E.g., a portfolio of increased lending with personal loans and minimal lending with secured facilities (home loans and leasing). This helps the bank to create non-performing loans.

    Banks generally have the right to identify employees, but strict guidelines, but the decision-making process involves employment, training costs, and salaries, regardless of recruitment, giving benefits, large decision-making, and not showing the same bet. Employee service time and replacement were separated from the selection procedure.

Having the right candidates with the appropriate skills, from different resources and guaranteeing the best fitting of employees’ needs. It is most effective when using updated recruiting technologies.

Selection as a Human Resource Activist

This includes selecting the most suitable candidates from the pool of candidates that can be created during the recruitment phase. Therefore, the terms recruitment and selection are two different functions. Selection is done using applications, resumes, interviews, aptitude tests, and inquiry checks to recruit candidates.

Bank Selection Process

1. Call for applications
2.  Ability Test
3.  IQ test (Cognitive ability test)
4.  Physical fitness tests
5. Psychological tests (EQ test)
6. Selection Interview (Interview 01 or 02)

Motivation as human resource activism

   A positive work culture and a good organizational climate helps bring effective results to a company. Using this strategy, it’s possible to increase employee productivity and engagement, as well as create an environment conducive to innovation. However, these benefits are only achieved with employee motivation and performance.

 This work is sometimes referred to as the socialization or orientation of newly hired/hired employees to help them adapt smoothly to the organizational structure, culture, and process. In this case, a basic understanding of their responsibilities, accountability, and expectations of organizational policies and employee behavior will be provided. A job manual covering organizational functions, structure, value proposition, basic assumptions, vision, mission, and objectives will be a useful tool at this stage.

    In the banking sector, this type of division often handles senior employees of the bank or hires specially trained trainers.

    For example, newly hired employees in banks initially participated in the 7-day motivation section. In this section, they will learn about banking culture, banking products, and more.

    After completing the 06 monthly training period, the employees again participated in another motivational section. In this section, employees will learn about some of the technical aspects of banking products and some of the cryptocurrencies in banking and industry. They also have the opportunity to discuss their experiences with senior human resources senior staff at the head office.

    After completing another six-month training period, employees returned to another motivational section. In the section, they learn about the Bank's practical issues and policy actions. Such a division is handled by the Bank's senior and experienced officers.

The Human Resources sector has a very strategic role in organizations. Through their activities, motivation can be encouraged and in such, increase the quality of life-work balance for their employees. In the same way, the organizational climate can improve and directly impact productivity.

Talent Management

    The development of technology, changing demographics and the fluctuating economic and political situation, have all affected talent and employment. Talent management is the use of an integrated set of activities to ensure that the organization attracts, retains, motivates and develops the talented people it needs now and in the future.  

You’ve invested in acquiring the best talent, but how do you keep them? In the demanding and fast-paced financial sector, retaining and developing your workforce can be one of the biggest challenges within your HR team. From hire to retire, introducing a mentoring and talent management program can be pivotal for growth and development at every level. In order to maximize competitive advantage, the banking industry needs, among other things, not only a performance-oriented performance management system but also the right people with a creative mindset. The best option for this is to follow skill management.

    Accordingly, a banking business approach should include tasks for line managers to develop the skills of their immediate subordinates. Managers should share statistics with other departments for employees to gain knowledge of the overall organizational objectives.

    The problem with many banks and finance companies today is that their organizations put a lot of effort into attracting employees to their company but spend little time retaining and developing skills. Current employee performance in a specific job is always a standard assessment tool for an employee’s profitability.

    However, "Talent management" focuses on the future potential of an employee. The 'Talent Management' system can be implemented according to the banking business strategy and can be implemented in the day-to-day operations of the company as a whole. An organization engaged in "Talent Management" has published successful stories on how to mobilize, attract, select, train, develop, retain and promote employees within the organization.

    In the current economic climate, many companies have abandoned the need to cut costs. In that context, skill management can be used as a means of optimizing the performance of each employee and organization. Globally, however, only a small percentage of organizations say they have a clear "Talent management" strategy. The banking industry will be forced to rely disproportionately on millennials as this generational shift occurs. This is why training programs that focus on talented younger employees in the organization are so important.

    

1. How do manage Human Resources in the Banking Sector?

The resignation turnover of the banking sector?

    Employee turnover  or the resignation turnover of an organization refers to the percentage of employees who leave a company and that are replaced by new employees. According to information obtained from my bank's human resources department, I have identified that the bank's high resignation turnover age limit is between twenty to thirty years old.

    Why is this so important? Measuring employee turnover helps employers to find out how many people leave the organization on a given period of time and it will help to identify the reasons for turnover or estimate the cost of hiring for budget purposes and can implement plans to minimize the employee turnover. The main reason that can be identified is that many young employees are not satisfied with their jobs in the banking sector or rather their expectations on the new job is high but once they continue to work, they eventually get discouraged. For various reasons in human resource management, the resignation turnover of employees in the financial and banking sectors is high.

    It is common in the banking industry for newly hired young employees to start their careers as bank counter or account opening assistants. These two departments basically handle 80% of the daily bank customers. Most of the times, newly hired employees have to work after bank hours due to heavy workload. Maybe it goes on until 7.00 pm. The main reason  that can be identified for high startup resignations is increased stress during the career startup phase itself.

    Also, most of the times, banks pay lower salaries during the training period compared to the permanent staff salary. Even trainees don't get most of the benefits that are given to the permeant carder. In order to enjoy the benefits of a banker, they have to wait for 2 years until they get permanent and pass the certification level in banking test.

    Many branch managers have not been able to provided the trainees' performance appraisals as expected which is another reason for the high resignation of the youth group. Some managers set high goals for trainees in the hope that they would work hard to open more and more  new deposits and accounts to the bank. Eventually this put more pressure on new employees. These are the main reasons which I have identified for the high resignation turnover in the banking sector when considering the facts and figures.

    When looking at young employees expectations, surveys have proven that young employees expected a well-paying job with low workload, good performance appraisals for their work and a recognized job with less amount of stress for their length of service. Therefore, the Human Resources Department of the Bank should play a major role in managing the above matters of the Bank. They need to devise new strategies and minimize the resignations of the bank's young employees as it would be an additional cost as well as a hassle for the bank to find and recruit new employees frequently.

   So lets look at human resource management, skills management, learning and development in the banking sector, employee relations, human resource management, and work planning and performance management as solutions to the above problem.

How to effectively manage the human resources of the banking industry

In almost all organizations, there is a report of its mission stating that people are the most valuable resource. To achieve its goal, survive and succeed, any organization should have the right personnel at the right place and at the right time. Banking organizations, as well as other types of business organizations, depend largely on the quality and competence of its employees. Therefore, organizations have to pay more attention to their human resources, because implementation of human resource practices supports maximizing employees' competences in the organization.

People are the main resource for financial services organizations, and skills, abilities, employee motivation levels, and the way they are deployed will be a major competitive advantage. Human resource management plays a vital role in attracting, developing, and disposing of employees in efficient and effective use. HRM practices are likely to create work conditions and environment where employees become highly committed to the organization (have positive attitude) and do their best to accomplish the organization's goals. Organizational commitment can be considered the employees' willing to be committed to help the organization in achieving its goals. Organizational commitment involves the employees' levels of identification, involvement and loyalty

There are several similarities between the financial industry and other companies in an economy. All companies try to maximize profits by selling their products or services in the market. Products and services are manufactured by companies using several inputs. However, banking companies differ from other companies in one important aspect, which is the composition of the balance sheet.

    

 A bank's balance sheet consists mainly of assets in the form of loans, advances, and investments. Other companies contain more real assets and fewer other assets. Therefore, the bank uses one important input of knowledge and skills to produce its output. Acquisition, development, promotion, and use of knowledge and skills by individuals working in a bank. Such individuals are labeled as the human resources of the banks and have given their maximum influence to achieve the banking objectives (vision and mission). 

    

For banking, the importance of human resource management has grown manifold because the nature of banking industry, which is mainly service based. The management of people in the organization along with handling the financial and economic risks at the wider level is the most potent challenges in front of the banking industry in any given time frame. Human resources perform a variety of functions such as credit proposal analysis, credit eligibility analysis, loan portfolio monitoring, providing other services to customers (LC facility, purchase checks, etc.), and debt recovery.

    

For any organization dealing with people requires a good human resource management efficient working of the organization. Banking has been and will always be a "People Business". Efficient and effective management of the human resource in the organization turns it a successful one. Therefore, the human resource base is the most imported asset base for the banking industry. Therefore, the banking industry should be properly identified as a key resource of the HR organization. In order to gain a competitive advantage in the banking industry, banks need to properly manage their human resources using a variety of human resource strategies.

Human resource flow in the banking sector

    Human resource flow covers the entire spectrum of human resource management and development activities in an organization. It begins with recruitment and ends with employment and resumes as a cycle covering all human resource activities. Human resource management involves a full spectrum of activities from HR marketing, hiring, training, developing, specialists deployment, to out-placing. The key to the determination of your company's human resource requirements is deciding, depending on the complexity of your operation, what your staffing needs are in this Organization.

Human Resource Management covers the below fields in the Banking Sector

Hard talk Humen Resource for The Banking Industry