INTRODUCTION

Human resource management (HRM) is the strategic and coherent approach to the effective and efficient
management of people in a company or organization such that they help their business gain a competitive
advantage. It is designed to maximize employee performance in service of an employer’s strategic
objectives.
Human resource management is primarily concerned with the management of people within organizations,
focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design,
employee recruitment, training and development, performance appraisal, and reward management, such as
managing pay and employee benefits systems.
HR also concerns itself with organizational change and industrial relations, or the balancing of
organizational practices with requirements arising from collective bargaining and governmental laws.
The overall purpose of human resources (HR) is to ensure that the organization can achieve success through
people HR professionals manage the human capital of an organization and focus on implementing policies
and processes.
They can specialize in finding, recruiting, selecting, training, and developing employees, as well as
maintaining employee relations or benefits. Training and development professionals ensure that employees
are trained and have continuous development.
This is done through training programs, performance evaluations, and reward programs. Employee relations
deals with the concerns of employees when policies are broken, such as in cases involving harassment or
discrimination. Managing employee benefits includes developing compensation structures, parental leave
programs, discounts, and other benefits. On the other side of the field are HR generalists or business
partners.
These HR professionals could work in all areas or be labour relations representatives working with
unionized employees.

1
HR is a product of the human relations movement of the early 20th century when researchers began
documenting ways of creating business value through the strategic management of the workforce.
It was initially dominated by transactional work, such as payroll and benefits administration, but due to
globalization, company consolidation, technological advances, and further research, HR as of 2015 focuses
on strategic initiatives like mergers and acquisitions, talent management, succession planning, industrial and
labour relations, and diversity and inclusion. In the current global work environment, most companies focus
on lowering employee turnover and on retaining the talent and knowledge held by their workforce.
New hiring not only entails a high cost but also increases the risk of a new employee not being able to
replace the position of the previous employee adequately.
HR departments strive to offer benefits that appeal to workers, thus reducing the risk of losing employee
commitment and psychological ownership.

CHARACTERISTICS OF HRM
The characteristics of HRM are mostly industry-specific and vary according to organizational needs.
However, the nine key characteristics are:

1. Embracing Diversity
HRM aims to build an inclusive workplace culture that celebrates employee diversity. They do so by
embracing the differences in skills, abilities, experiences, backgrounds, etc., and encouraging
individuals’ unique strengths.

2. Strategic Alignment
HRM helps align the HR goals to the organization’s overall strategic goals. HR professionals actively
participate in strategic planning and decision-making by providing insights on workforce planning,
talent acquisition and management, and organizational culture development.

3. Cultivating Commitment
HRM helps build a commitment among the workforce by fostering a sense of loyalty and trust in
them. In addition, they help promote a positive environment and a culture of transparency and
accountability, along with nurturing long-term relationships with the workforce.

4. Mutual Benefit
HRM aims to create a mutual environment where the employees and the organization benefit equally.
This promotes collaboration, mutual trust, and respect among employees and management. So, in this
situation, the organization achieves its goals while providing fair opportunities for growth and
development for the employees.

2
 5. Balancing Perspectives
HRM aims to balance the unitarian and the pluralist perspectives of the employees. The unitarian
perspective views the organization as a single entity with a common goal and aspirations. The
pluralist perspective acknowledges the presence of multiple ambitions and goals of various
stakeholders like employees, shareholders, managers, etc. A balance between the two helps nurtures
efficient communication, synergy in the team and prompt conflict resolution.

6. Valuing Human Capital

HRM values employee contributions to organizational development. Therefore, they focus on
attracting, developing, training and developing talent to drive the organization toward business
profitability and success.

7. Aligned with Values

HRM helps align the organizational processes and HR practices with the organization’s mission,
vision, and core values. They promote the values of integrity, honesty, fairness, and sustainability
among the workforce to ensure the organization’s compliance with legal and ethical standards.

8. Integrated System
HRM encompasses various HR functions like planning, designing and implementing HR
practices and policies to create a culture where HRs take an active role in the business decision-
making process and manage the organization’s daily operations.

9. Harmonizing Outcomes
HRM caters to organizational and individual needs by achieving results benefiting both parties. Their
main goal is to enhance organizational productivity and profitability along with employee satisfaction
and well-being. Thus, they need help balancing business goals and employee satisfaction simultaneously

HISTORICAL BACKGROUND OF HRM IN BANKING SECTOR

The history of Human Resource Management (HRM) in the banking sector can be traced back to the early
stages of banking when the focus was mainly on administrative functions, like record-keeping and clerical
tasks. Early banks employed staff for basic tasks, and HR practices were simple, focusing on hiring and
managing people.
Over time, especially during the 20th century, HRM in banking evolved. The introduction of new
technologies, globalization, and competition led banks to realize the importance of skilled employees. They
started developing HR practices that focused on recruiting, training, and retaining talented staff.
In the 1980s and 1990s, the banking sector began to modernize further. Human resources management in
banks started to adopt more strategic approaches, focusing on improving performance, enhancing employee
satisfaction, and aligning HR goals with overall business objectives.
Today, HRM in the banking sector involves not only recruitment and training but also performance
management, leadership development, and fostering a positive work culture, all aimed at supporting the
competitive needs of the industry.

3
As the business landscape evolved due to figures like Andrew Carnegie and public policies like the New
Deal, employer-employee relationships transformed, leading to the formalization of HR management (HRM)
as “industrial and labor relations.” Professional HR associations, such as the Chartered Institute of Personnel
and Development (CIPD) and the Society for Human Resource Management (SHRM), emerged to support
the field’s growth.
In the Soviet Union, Stalin’s regime recognized the strategic importance of human resources, implementing
HR policies alongside technical management. In the United States, institutions like the School of Industrial
and Labor Relations at Cornell University and publications like The Journal of Personnel Research furthered
HR research and education.
Throughout the 20th century, HR practices adapted to changing needs, with a shift towards viewing
employees as assets and the dominance of the term “human resources management” (HRM). This term
encompasses various aspects of workforce management, including talent management, organizational
management, and personnel management.
As transportation and communication advanced, facilitating workforce mobility and collaboration, HRM
continued to evolve, with a focus on human capital management (HCM) emphasizing individuals’
knowledge contribution to organizations.

BENEFITS OF THE STUDY OF HRM

Human Resource Management (HRM) department holds prime importance in any company and are
considered as the backbone that leads to the streamlining of any system. HR professionals who are deployed
in small scale businesses hold well-rounded expertise to deliver various services to its employees

They handle vast array of tasks including recruiting new employees, conducting interviews, dealing with
conflict resolution, and managing the holiday allowance, benefits and payroll for existing employees. There
are many routes into a career in HR; however the safest route is to do a HR specific course like degree,
postgraduate course or diploma.

HR qualification will help you to get on the career ladder. In addition, there are several benefits you can
enjoy by learning HRM. This blog discusses 10 benefits of studying Human Resource Management in 2020.
4
1. Helps reduce employee turnover

High employee turnover can negatively affect a company. In fact, it costs twice as much as a current
employee’s salary to find and train a new recruit. When you become a human resource professional, you will
get to know how to hire the right people(those who are best qualified for the positions and will help the
company to attain their organizational goals)for the company from the start.

You need to interview the candidates carefully, to ensure that they have the right skills and to check whether
they fit in with the company’s culture. You need to outline the right compensation and benefits. In addition,
you need to pay attention to the personal needs of employees.

During the interview, you need to discuss clear career paths, as employees may like to know how they can
grow within the company. Human resource professionals usually meet employees only when there are
issues, but to reduce employee turnover they will have to regularly visit staff members and enquire if they
are feeling alright and happy.

2. Helps resolve workplace conflicts

5
Workplace conflict is unavoidable, as employees have different personalities, lifestyles and work ethics.
When you are doing the Human Resource Management (HRM) course, you will be taught how to manage
conflict in the workplace and how to resolve it

In addition, you will be taught how to handle the situation as professionally as possible. If conflict arises
between employees or an employee and someone in management, as a human resource professional, you
should be able to assist both parties equally and not choose sides.

3. Determines the level of employee satisfaction

Human resource specialists are responsible for determining the level of employee satisfaction. HRM student
will learn how to set up surveys, focus groups and interview strategies, which will help him /her to
determine whether employees are content or not.

Human resource professionals determine the underlying causes for employee dissatisfaction. They address
those issues and motivate staff members with creative solutions. They always try to find out the issues that
employees face and look for ways to assist them.

4. Boosts employee performance

Human resources develop performance management systems. If there is no human resource professional in a
company, then candidates who may not have necessary skills and expertise for the position can easily get a
job in that company. Therefore, human resources are required in every workplace.

6
When there is a line-manager, you will have to give employee performance reviews on annual basis. You
need to be open about their accomplishments and things that you think they could have done even better.

5. Conducts training

Human resources conduct needs assessments for employees. It helps to determine the type of skills training
and employee development programmes that are necessary for improvement and additional qualifications.

In fact, most of the start-ups or companies in its budding stage can benefit from identifying training needs
for its staff. Hiring additional staff or more qualified candidates is less expensive. This also helps reduce the
company’s employee turnover and improve employee retention.

6. Controls budget

It is vital for human resources to define the processes, be it the 360-feedback review, the annual pay review
or the development of a new program, as specific projects. A human resource professional need to
understand a project’s broad budget.

They control excessive spending through developing methods for trimming workforce management costs.
They also ensure competitive and realistic wage setting based on studying the labour market, employment
trends and salary analysis based on job functions.

7
ANY 5 CONCEPT OF HRM IN BANKING
Here are 5 concepts of Human Resource Management (HRM) in banking explained in simple terms:
1. Recruitment and Selection
This is the process of finding and hiring the right people for banking jobs. It involves advertising job
openings, screening applicants, interviewing candidates, and choosing the best fit for the job. In banking, it’s
important to select employees who have the right skills, experience, and values to provide good customer
service and handle financial tasks carefully.

8
 2. Training and Development
Banks provide ongoing training to help employees improve their skills and knowledge. This could include
learning about new banking technology, financial regulations, or customer service techniques. Development
programs also prepare employees for higher positions, helping them grow in their careers.

3. Performance Management
This involves setting clear goals for employees and regularly reviewing their performance to ensure they
meet those goals. In banking, performance management helps ensure that staff deliver high-quality service,
follow bank policies, and contribute to the bank’s overall success. Feedback is given to improve
performance, and rewards may be offered for exceptional work.

4. Employee Motivation and Retention

Motivating employees in the banking industry is crucial to keep them engaged and productive. This
includes offering incentives like bonuses, recognition, and career advancement opportunities. Retention
strategies help banks reduce employee turnover, saving costs and maintaining experienced staff.

5. Compliance with Regulations

Banks must follow strict rules and regulations, and HR departments play a key role in ensuring employees
are aware of these laws. HR ensures that employees are trained in compliance, ethics, and security measures,
so the bank can avoid legal issues and maintain customer trust. This helps in maintaining the bank’s
reputation and smooth operations.

These concepts help HR departments in banks create a skilled, motivated, and compliant workforce, which is
essential for smooth banking operations and customer satisfaction.