CASE STUDY OF HRM IN HDFC BANK
HDFC Bank uses A Comprehensive HR approach to respond to changing resource needs.
Rapid growth in a burgeoning new market should be cause for celebration—unless the organization that's growing can't keep up with the demands of an expanding workforce or simplify the management of multiple databases. But Mumbai, India-based HDFC Bank wasn't about to let that happen.
Initially the premier bank in the corporate sector, HDFC Bank began its expansion into the retail market in 1995. Now, as it adds thousands of new customers each day and manages dramatic increases in its retail loan portfolio—22 percent in 2003 alone—the bank is facing the challenges that come with rapid success.
"Today's competitive environment means that human resources
must refocus away from activities that sap value from the organization and instead focus on achieving outcomes that improve company performance," says C.N. Ram, head of information technology at HDFC Bank. HDFC was already an established leader in eliminating the inefficiency traditionally associated with resource planning and management, and bank management knew just what to do.
"Due to significant growth in the number of our employees over the past few years, we could no longer handle our human capital management on Microsoft Excel spreadsheets and homegrown reports," says Ram. In addition, management understood that high growth rates might have jeopardized product quality, while tension about relative compensation levels between the sales personnel in the branch and operations could have threatened HDFC Bank's culture.
People Are Our Business, Too
The bank decided to implement Oracle Human Resources applications so that HR planning and tracking could be handled more efficiently. "We had already compiled large amounts of data about employees who had been with us for awhile, but we lacked a workable way to store other kinds of information, such as data about family members and career paths at HDFC Bank," Ram explains. "We can now capture everything, which gives senior management better data for performance evaluations and helps them do better career planning." The solution also allows the bank to compensate on the basis of performance and provide targeted career development, which raises credibility with employees and helps the bank attract and retain top candidates.
HDFC Bank has also implemented Oracle's applications for HR analysis and reporting across the enterprise, providing management with the ability to drill down into performance and cost on an exceedingly granular level. This gives the bank the flexibility to tailor employee record-keeping while remaining in compliance with employment laws. Additionally, the automation of actions such as warnings, e-mail notifications, and vacation hour balances gives the bank a complete profile for each employee. "The comprehensive reporting capabilities save a lot of staff time and allow us to handle profiles, skill sets, and training and integrate them with the payroll system," continues Ram.
Low Costs Key to Profitability
A big part of the bank's tremendous performance and profitability is tied to the low cost of operations driven by automation and reduced employee costs. The total automation of HR processes has reduced errors and introduced a best-practices approach that encourages employees to perform well and allows them to reap the rewards of their good performance. "Organization-building and our high commitment to HR management are paying off," says Ram. "These kinds of changes can be extremely destabilizing if not managed appropriately, but HDFC Bank has embraced the right formula, and the right applications, for successful employee management and tracking."
HDFC Bank has also implemented Oracle Balanced Scorecard for its HR function, to evaluate the effectiveness of its HR management. Through this approach, the bank is able to measure and improve the effectiveness of support functions and quantify non-financial measures to better track those functions. It has also transformed the HR department from a purely administrative organization to one that has significant input in recruitment, development, and strategic planning. And it's able to track the effect of management systems on shareholder influence, flows, rewards, and work systems.
HDFC Bank uses A Comprehensive HR approach to respond to changing resource needs.
Rapid growth in a burgeoning new market should be cause for celebration—unless the organization that's growing can't keep up with the demands of an expanding workforce or simplify the management of multiple databases. But Mumbai, India-based HDFC Bank wasn't about to let that happen.
Initially the premier bank in the corporate sector, HDFC Bank began its expansion into the retail market in 1995. Now, as it adds thousands of new customers each day and manages dramatic increases in its retail loan portfolio—22 percent in 2003 alone—the bank is facing the challenges that come with rapid success.
"Today's competitive environment means that human resources
must refocus away from activities that sap value from the organization and instead focus on achieving outcomes that improve company performance," says C.N. Ram, head of information technology at HDFC Bank. HDFC was already an established leader in eliminating the inefficiency traditionally associated with resource planning and management, and bank management knew just what to do.
"Due to significant growth in the number of our employees over the past few years, we could no longer handle our human capital management on Microsoft Excel spreadsheets and homegrown reports," says Ram. In addition, management understood that high growth rates might have jeopardized product quality, while tension about relative compensation levels between the sales personnel in the branch and operations could have threatened HDFC Bank's culture.
People Are Our Business, Too
The bank decided to implement Oracle Human Resources applications so that HR planning and tracking could be handled more efficiently. "We had already compiled large amounts of data about employees who had been with us for awhile, but we lacked a workable way to store other kinds of information, such as data about family members and career paths at HDFC Bank," Ram explains. "We can now capture everything, which gives senior management better data for performance evaluations and helps them do better career planning." The solution also allows the bank to compensate on the basis of performance and provide targeted career development, which raises credibility with employees and helps the bank attract and retain top candidates.
HDFC Bank has also implemented Oracle's applications for HR analysis and reporting across the enterprise, providing management with the ability to drill down into performance and cost on an exceedingly granular level. This gives the bank the flexibility to tailor employee record-keeping while remaining in compliance with employment laws. Additionally, the automation of actions such as warnings, e-mail notifications, and vacation hour balances gives the bank a complete profile for each employee. "The comprehensive reporting capabilities save a lot of staff time and allow us to handle profiles, skill sets, and training and integrate them with the payroll system," continues Ram.
Low Costs Key to Profitability
A big part of the bank's tremendous performance and profitability is tied to the low cost of operations driven by automation and reduced employee costs. The total automation of HR processes has reduced errors and introduced a best-practices approach that encourages employees to perform well and allows them to reap the rewards of their good performance. "Organization-building and our high commitment to HR management are paying off," says Ram. "These kinds of changes can be extremely destabilizing if not managed appropriately, but HDFC Bank has embraced the right formula, and the right applications, for successful employee management and tracking."
HDFC Bank has also implemented Oracle Balanced Scorecard for its HR function, to evaluate the effectiveness of its HR management. Through this approach, the bank is able to measure and improve the effectiveness of support functions and quantify non-financial measures to better track those functions. It has also transformed the HR department from a purely administrative organization to one that has significant input in recruitment, development, and strategic planning. And it's able to track the effect of management systems on shareholder influence, flows, rewards, and work systems.