Description
The report explains about the implications of recession on the Human resource policies of Banks. In this report ICICI bank has been taken into consideration.
3/14/2009
Economic Slowdown: Implications on HR Practices
HR Practices at ICICI Bank
Economic Slowdown: Implications on HR Practices 2009
Table of Contents
INTRODUCTION ..............................................................................................................................................................2 LITERATURE REVIEW....................................................................................................................................................3 SYNOPSIS –PARTICIPATION ...............................................................................................................................3 SYNOPSIS -TRAINING ..........................................................................................................................................4 SYNOPSIS -APPRAISAL ........................................................................................................................................4 SYNOPSIS –REWARDS AND WELFARE ............................................................................................................5 SYNOPSIS –COUNSELLING .................................................................................................................................6 SYNOPSIS –HUMAN RESOURCE INFORMATION ...........................................................................................6 SYNOPSIS –SUCESSION PLANNING ..................................................................................................................7 ICICI B ANK ..................................................................................................................................................................8 BACKGROUND.......................................................................................................................................................8 CURRENT HR PRACTICES ...................................................................................................................................8 ANALYSIS .................................................................................................................................................................... 10 QUALITATIVE ...................................................................................................................................................... 10 1. 2. 1. 2. INTERVIEW EXCERPTS ............................................................................................................................. 11 OUTLOOK ON RECESSION ....................................................................................................................... 12 METHODOLOGY ......................................................................................................................................... 13 RESULTS ....................................................................................................................................................... 13
QUANTITATIVE ................................................................................................................................................... 13
INTERPRETATIONS & RECOMMENDATIONS ............................................................................................................... 22 REFERENCES ............................................................................................................................................................... 27 BOOKS ................................................................................................................................................................... 27 WEB SITES ............................................................................................................................................................ 27
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INTRODUCTION
Years of “irrational exuberance” saw the financial markets in United States and many of the world?s major economies roaring as if there was nothing to fear. The underlying factor lay in the unprecedented rise in housing prices. Mortgage lenders made loans to all kinds of people including those with low creditworthiness, often without proof of income leading to the creation of “subprime credit”. This led to the creation of a “housing bubble” that peaked in 2005. On average, US home prices rose by more than an unprecedented 124 percent between 1997 and 2006. By 2006, housing prices began to fall in overbuilt markets. Interest rates began to rise. Borrowers started to default on their loans as the loans reset to higher interest rates and payment amounts. Consequently, the country witnessed a high rate of foreclosure of property, thereby triggering off a further downward spiral. This led to the collapse of leading Wall Street giants like Bear Sterns, Lehman Brothers and Freddie Mac and Fannie Mae who had huge amounts in subprime mortgage backed assets. The contagion spread across countries particularly in Europe and a severe liquidity crunch in the global credit markets and banking systems precipitated the present financial crisis. This led to slowdown in the global economy. India has been no exception though the magnitude of the crisis has been relatively modest as compared to other economies with the possible exception of China. The most immediate effect of the crisis on India has been the outflow of foreign institutional investment from the equity market. After a long spell of growth, the Indian economy is experiencing a downturn. Industrial growth has faltered, the current deficit is widening, foreign exchange reserves are depleting and the rupee is depreciating. More than five lakh jobs have been lost in India. However, the RBI has been successful in regulating the Indian banking institutions to insulate them, significantly, if not completely from the subprime mess.
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LITERATURE REVIEW
SYNOPSIS –PARTICIPATION 1. Shared values must come to the fore during the recession - Nicholas Bacon (Feb 2009)
(http://business.timesonline.co.uk/tol/business/industry_sectors/public_sector/article5720415.ece)
2. Importance Of High Employee Engagement During Recession Leads Organizations To Participate In Annual Best Employers In Canada Study – Hewitt Associates (Mar 2009) (http://beta.investors.com/NewsAndAnalysis/Article.aspx?id=89018777&source=Newsfeed) The concept of employee participation has its origins in competitive issues especially after the 1982 recession in America. Research has attributed several virtues to participation: a. b. c. d. Participation improves decision making People tend to be more committed to implementing decisions that they themselves make It enhances a sense of power among employees It helps enhance identification with the organization if employee suggestions are incorporated. The current economic environment has sparked increased interest in the study and the role of employee engagement in successfully addressing challenging times. Research by Hewitt Associates has revealed that organizations with high employee engagement have lower turnover, higher productivity, less absenteeism and greater sustainability in the face of business challenges. Participation enables organizations to measure the engagement level of their workforce and learn where best to target efforts to increase it. It has also been seen that good industrial relations have enabled organizations to manage their way out of the recession successfully. Effective management of industrial relations requires shared values among employers, trade unions and governments. This includes agreements on the rights and roles of unions and employers, employee participation and what constitutes fair outcomes. Employer commitment to consultation and gain-sharing with employees is essential in 3 Group 7
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turbulent times. Employee commitment to business success in the workplace requires enhanced employee participation in important decisions at corporate levels. SYNOPSIS -TRAINING 1. Talent Management in a Recession – Matt Street (Aug 2008)
(http://www.management-standards.org/client_files/Talent%20management%20in%20a%20recession.pdf)
Training has often been thought of as the first casualty of recessions as companies are more bent on cutting costs in such times. An August 2008 research report titled “Talent Management in a Recession” says that neglecting talent management in times of economic downturn is likely to have a significant negative impact in the long run, and that organisations should continue to place importance on talent management and staff training and development throughout difficult economic periods. The research suggests that Staff development need not be put on hold during periods of economic instability. Correct training provides more value than it costs; and this holds true whether a recession is occurring or not. If training budgets need to be reduced internal staff members (particularly senior managers) may be able to provide training instead of using costly external training providers. The research also says that senior managers may also be more willing to take on training or mentoring role in times of economic instability, in part to prove their worth and in part because they may have more time available in quiet periods. Training should help an organisation cope with the downturn. Training related to issues like change management may be helpful. An important question that an organization should ask itself is whether employees would continue to be motivated and stay with the organisation if training is not imparted . Studies have shown that employees highly value the development of their own skills, with talented employees likely to do so more than others. Cutting back on training and development is likely to reduce morale and act as a de-motivator for your staff, and may even be a reason for leaving for some. SYNOPSIS -APPRAISAL 1. Talent Management in a Recession – Matt Street (Aug 2008)
(http://www.management-standards.org/client_files/Talent%20management%20in%20a%20recession.pdf)
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The report also suggests that staff appraisals and the reviewing of employees? skills should take place within all organisations. Reviews in times of downturn can be used to find both the „talent? within an organisation and those who can be easily replaced or let go of. Proper review and appraisal would also help in determining where existing or likely future skills gaps exist within the organisation. Appraisals can be used to determine which individuals in an organisation have the potential to be promoted to senior roles in the future, which individuals have scarce skills and which individuals would benefit the most from training. A detailed review of employee skills will also be useful to determine which employees might be made redundant should staff cuts need to be made in periods of economic downturn. Also, a review of employee skills and talents can be made use of if any restructuring activity is needed for the organisation to enable it to cope with the economic downturn. SYNOPSIS –REWARDS AND WELFARE 1. Rewarding in a recession - Blyth Alex at Personnel Today, 12/2/2008, p20-22, 3p 2. McKinsey Quarterly June 2006 (http://download.mckinseyquarterly.com/srbonus-2006-08.pdf ) 3. Reward in a Recession - Roger Down (Jan 2009) (http://www.wayshrconsulting.com/wp4. The Value of Increasing Investment in Employee Benefits during an Economic Downturn - Bryan K. Brenner, REBC (http://www.workingwell4you.com/documents/2008-115. Recession:
13%20The%20Value%20of%20Increasing%20Investment%20in%20Employee%20Benefits%20during%2 0an%20Economic%20Downturn%20HPEB%20Jan09.pdf) (http://www.jackkeogh.com/Recession%20Human%20Capital%20Challenge.pdf) content/uploads/2009/01/white-paper-reward-in-a-recession.pdf)
The
Human
Capital
Challenge
–
Jack
Keogh
While some experts believe that in a downturn, employers should cut rewards and welfare package at these times, others argue that it is necessary that they invest in benefits during times of financial crisis. According to a McKinsey Quarterly survey conducted in June 2006, 46% of executives believe employee benefits help attract and retain quality employees, keep them motivated and that benefits are important to staying competitive. Health insurance, along with other employee benefits, is believed to be even more significant in helping companies retain employees, reduce training costs and maintain productivity. A survey by MetLife called “6th Annual Study of Employee Benefit Trends” reveals that businesses that invest more in employee benefits during times of economic distress will see that investment pay off in profits. The economic advantage is not only realized in saving money by 5 Group 7
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paying less in training and recruiting costs, it helps the company make money for the firm through greater employee productivity. In a report published in the Journal of Financial Service Professionals in January 2009, the author says that providing desirable employee benefits and welfare schemes need not be an expensive proposition if innovative schemes can be designed. It found that perks like providing recreational facilities, allowing employees to use the company mailroom, or having on-site access to exercise classes or massages help employees develop loyalty. SYNOPSIS –COUNSELLING 1. Anxiety over market comes to Workplace - Bob Ankeny, Jay Greene (EBSCO) 2. Survivors? Anguish – Samantha Marshall (EBSCO)
There has been a resurgence of the issue of employee counselling in the wake of the worldwide financial crisis. In a recent survey conducted by the American Psychological Association, it reported that worries about money and job stability are top stress factors that have led to higher levels of drinking, overeating, smoking, gambling and higher level of domestic conflicts. The current economic scenario also warrants people working longer hour to constantly be responsive to clients' needs. Also, the massive layoffs across the board have led to a devastating morale as employees who manage to survive are uncertain about their own future and frustrated by the way their colleagues were treated. Troubled employees cost employers a lot of money in terms of lost productivity. Employee Assistance Programs can help employees achieve work-life balance, enhance trust and security, reduce absenteeism and contribute to a more engaged workplace. It is said that employees whose personal issues are resolved often have fewer errors and missed deadlines on the job, along with improved workplace behavior and communication skills. Therefore, everyone in the organization should be made aware of the importance of recognizing and helping colleagues who may be suffering from depression as positive action will result in benefits not just to the individuals but to the company as a whole. SYNOPSIS –HUMAN RESOURCE INFORMATION 6 Group 7
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1. Transparency Key to Sustain Employee Performance During Recession – Kellye Whitney (http://www.talentmgt.com/newsletters/talent_management_perspectives/2008/May/632/index.php) 2. Results That Last – Quint Studer (Apr 2008)
(http://apps.sgasp.com/qbooks/Documents/StuderBadEconomyRel_04-17-08FINAL.pdf)
A recession brings the risk of decreasing employee performance, engagement and organizational loyalty. Manny Avramidis, senior vice president global human resources at the American Management Association says that employers should pay close attention to feelings of insecurity and the resulting performance disruptions that can occur during an economic slump. Employers should focus on creating a transparent work culture that would promote and maintain clear and consistent communication throughout whereby every employee should know exactly where they stand, as well as where the business stands, and what the organization's strategy will be to get through the economic downturn. This would enable the management and individual employees to jointly deal with the challenges. Also, not only would it promote employee trust and loyalty it would also help the organization show genuine interest in employee development so, once through the economic downturn, the organization is positioned to come out stronger than ever on the other end. SYNOPSIS –SUCESSION PLANNING 1. Taking Stock: Succession Planning in a Recession – Jamberry Ltd Survey 2. Clarity amid the Crunch – Matthew Parker (Dec 2008)
(http://www.jamberry.co.uk/coaching/pdf/Taking%20Stock.pdf) (http://www.stepstonesolutions.com/_pdf/Whitepapers/StepStone_White_Clarity_amid_the_Crunch.pdf )
3. Bottom Up Succession Planning Works Better – Paul Stevens (Aug 2000)
(http://cclp.mior.ca/Reference%20Shelf/PDF_OISE/Bottom%20Up.pdf)
An executive white paper published by Stepstone called “Clarity amid the crunch “published in December 2008 talks about the risk of “non-strategic promotion” particularly in a recession. While efficient internal prospecting of employees supports and improves productivity, nonstrategic promotions could be given to the least appropriate contenders in positions that would add to already enhanced costs during downturns. Proper succession planning is also necessary as employees realize that career protection and increased employability can only be done by themselves. As a consequence, succession planning would enable employees to be better prepared to face challenges
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ICICI BANK
BACKGROUND ICICI Bank is India's second-largest bank with total assets of Rs. 3,744.10 billion (US$ 77 billion) at December 31, 2008. The Bank has a network of 1,416 branches across urban and rural India and presence in 18 countries including USA, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai. The bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts are listed on the New York Stock Exchange. CURRENT HR PRACTICES Training – ICICI Bank implemented Sum Total?s solution “The Learning Matrix” as an enterprise application for aligning e-Learning needs of its employees. (http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application=story&active=no&Paren
tID=1119278002800&StoryID=1196697279551&xref=)
Succession Planning – Forecasting on attrition rates and revenue delivered by the HR Department has saved Rs 100 cr for ICICI Bank. The technique of not benching people and promoting from within by training them with the systems and training in place has made this possible. (http://www.business-standard.com/india/news/savvy-hr-saves-icici-bank-rs-100-cr/267870/) Appraisal – PMS (Performance Management System) is the system used in ICICI Bank for appraisal of its employees. It grades employees in 5 categories – Type 1, 2, 3, 4, 5 where Type 1 being the best to Type 5 being the underperformer.
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Career Planning – ICICI Bank launched a new initiative called ICICI Bank DNA to map competency of employees for the different work profiles. Human Resource Information – iVoice is the initiative launched in 2006 by the HR Department to integrate the various department ideas. Management Speak is a special initiative within iVoice to help in communication of Top Management with the employees. Participation – iLab is an initiative launched by ICICI Bank to help in exchange of ideas with the employee getting felicitated from Top Management for breakthrough ideas.
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ANALYSIS
QUALITATIVE "We are reading the economy and the mood is obviously not as bullish as a year or two ago. So, we have decided to be cost-prudent by holding back the annual promotions and scaling down the bonuses for this year” K. Ram Kumar, Group HR Head “ICICI Bank has one of the best HR policies in the banking sector. With this current slowdown, some hard decisions have been taken and some more will be taken. All the employees understand this. They know that this will pass and that the bank will reward all the performers when we get through this phase.” Roopa Joshi, Manager “There have been no promotions this year. However, some of our job profiles have been enhanced. I am currently handling a profile which was handled by a higher grade.” Arif Sheikh, Asst. Manager “Having a job in this current slowdown is a reward in itself” Samirahamad Sayyad, Senior Officer In the financial year 2007-08, ICICI held back the annual promotions and scaled down on the promotions too. It was expected that things would improve during the financial year 2008-09 At the time of taking the responses for the questionnaire, the employees were not sure of the policy for rewards and promotions for the financial year 2008-09.
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Training modules in ICICI are delivered through the classroom training and online training modules. As per the current practice, all employees have to complete a certain number of classroom and online programs. Training is conducted for soft-skills development, functional areas, quality improvement and leadership development. However, there seems to be a general tendency of the employees to treat these training programs very casually. Also, there is a general perception most programs are not implementable at work. As one respondent said, “The classroom programs are very good. But most are difficult to implement in this office.” Another said, “We have to complete a set number of online programs every year. Any-one can do any module. But it has little value-addition. Completion of a module does not make one eligible for any opening in the sector related to that module.” The respondents had good words for the Human Resources Information provided by the company. Most departments have an internal online newsletter. Every quarter, there is a quarterly new magazine known as “I-Voice” which informs everyone about the various activities carried out by the bank along with an interactive session with the group heads and HR managers. Appraisal is usually a sore point in most organisations. However, there is general perception among the respondents process of appraisal is transparent and well organised. The appraisal process is conducted twice a year, a half yearly appraisal during September/October and the Final appraisal during February/March. “Our work is monitored monthly through various MIS and Balanced Score Card. The Half-yearly is just a formal way of updating us on our weak and strong points. The end of year appraisal is the most important.” said one. However, this appraisal also determines the rating of an individual. As one Manager said, “The year-end appraisal is one of the main factors to decide the bonus and promotion. It is a pretty transparent process. It is the other factors which I have a problem with.” 1. INTERVIEW EXCERPTS Interviewee: Darshana Nair (Assistant Manager) Group: What are your current responsibilities? DN: I am currently the Area Operations Manager in Mumbai 11 Group 7
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Group: Are you able to implement the learnings from the training programs you have attended? DN: The functional programs like where you are taught how to use the new software etc. are easily implementable. These are tangible and one has to use it every day, No issue on this. However, the other soft skills, quality technique trainings are more difficult. No one likes to change their routine. It takes an extra effort and needs time to show results. It is much harder to practice this, and if you are not watchful, you go back to the same routine. But here the bosses want immediate results. So if it does not show results quickly, it is put into the backburner and forgotten Group: What do you have to say about the different rewards and welfare initiatives in ICICI? DN: This year we still haven?t been told „bout the policy for this year. The previous years? has been quite reasonable.
Interviewee: Ramakrishnan Ramamurthy (AGM) Group: Sir, what are your thoughts on the appraisal system in the bank? RR: The bank has a very robust and well structured appraisal system. Appraisal is done twice a year, during September and February and captured in the Performance Management System. There are inbuilt criteria along with the mutually agreed criteria that one can use to appraise ones subordinates. Each manager has to give his feedback to his subordinates, else the HR dept. sending reminders to those who have not. The year-end appraisal is one of the main factors along with potential and “talent” for promotion. Group: What does the bank do to help in the career planning of an individual? RR: Unlike some companies, there is no official “mentor” system in ICICI. All the employees are appraised on the basis of their performance. However, while searching for talent, a special cross functional committee judges the candidates of Asst Manager or higher grade, to see if they fit the laid out criteria. Such people are provided special help and guidance to realise their potential. They are also given more responsibilities and challenges in their day to day work.
2. OUTLOOK ON RECESSION
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It was observed in the interviews there is general apprehension among the rank and file of the organization regarding the current economic crisis. Usually, during the I-Voice sessions in month of March, there is a lot of excitement and a lot of queries on the performance rating, criteria of promotion, bonus and etc. However, this year, the same is missing. As one respondent explained, “This year, the economy has not done well. Same is with the bank. To expect the same kind of promotions and bonuses that we received the last few years is foolish” The employee turnover rate in ICICI till recently has been very high on the account of poaching from foreign banks. However, the news of mass lay-offs in the same foreign banks has made the employees more circumspect about the future. QUANTITATIVE 1. METHODOLOGY The complete set of responses has been categorised into ten dimensions. Based upon the responses from participants of questionnaire, the mean and mode of the responses have been calculated. ? ? ? Calculation of mean and mode value for each dimension. Calculation of overall value of all the responses for the company. This provides the central tendency the company. Finding standard deviation of each dimension
2. RESULTS As indicated, in the responses to the questionnaire, the total mean score is 3.516 with a standard deviation of 0.813 with mode of 4. A marked difference in perception can be seen in the responses of the higher management to that of the lower rung officers in some areas. While nearly all the respondents agreed that a lot was being done by the company in the dimensions of Organisation Development and HR information and areas of concern in Training and Job enrichment, there were marked differences in 13 Group 7
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dimensions like Appraisal and Succession Planning. Given below are the mean, standard deviation and modal scores of the various dimensions in the HRD Climate survey.
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Officers Asst Manager Manager Dept Heads Total Avg Std Mod Avg Std Mod Avg Std Mod Avg Std Mod Avg Std Mod Organisational Development Appraisal Reward Training Counselling Succession Planning Participation HR information Career Planning Job Enrichment 3.67 3.33 3.11 3.10 3.17 2.78 3.33 3.50 2.67 3.00 0.87 1.03 0.60 0.54 1.17 0.67 1.12 0.55 0.58 0.00 4 4 3 3 3 3 4 4 3 3 4.20 3.50 3.67 3.77 4.00 3.60 4.00 3.70 3.60 3.80 0.41 0.71 0.49 0.73 0.82 0.91 0.53 0.67 0.55 0.45 4 3 4 4 4 4 4 4 4 4 3.56 3.42 3.39 3.12 3.58 3.78 3.28 3.50 3.50 2.83 1.15 0.67 0.70 0.67 1.00 0.73 1.07 0.67 0.55 0.75 4 4 4 3 3 4 4 4 4 3 3.83 4.25 4.50 3.43 3.25 3.83 3.50 4.00 4.00 2.50 0.98 0.50 0.55 1.09 0.96 1.17 1.38 0.00 0.00 0.71 4 4 5 4 4 5 4 4 4 3 3.81 3.53 3.56 3.36 3.59 3.54 3.54 3.63 3.44 3.13 1.31 1.26 1.17 0.96 1.26 1.12 1.24 1.25 1.46 1.10 4 4 4 3 3 4 4 4 4 3
Figure 1: Mean of Dimensions by Grades
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Figure 2: Mean, Mode & Std Dev of Responses
Figure 3: Mean, Mode & Std Dev for all responses Dimension wise
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3. GRAPHS ? Participation
The responses for Participation had a mean of 3.54 with standard deviation of 1.24 and modal value of 4. In this dimension, most employees surveyed felt that they had an important part to play in the daily running of the organisation. As expected, the junior level officers did not respond to most of the questions for this dimension positively. However, it should be noted that some senior employees feel that they do not have a say in the path that the management decides for organisational growth. The middle managers and the assistant managers were more inclined to believe that they had a positive influence in direction the organisation was taking. ? Succession Planning
The responses for Participation had a mean of 3.54 with standard deviation of 1.12 and modal value of 4. This dimension showed a lot of variation in the responses provided by lower level officers and the department heads. While the lower level officers believed that there was no concerted effort to prepare them for higher positions, most respondents of the grade assistant managers and above believed that enough feedback and preparation is given before hand to prepare them for the challenges they would face at the next higher positions. Most respondents also agreed that the policies were in place for the smooth transition to higher positions.
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? Human Resource Information The dimension of Human Resource Information has the second highest mean of 3.63 with standard deviation of 1.25 and modal value of 4. This result is consistent in all employees groups. It can be inferred that there are good policies and practices in place to communicate to the employees. ? Organizational Development the potential, capabilities and areas of improvement
The dimension of Human Resource Information has the highest mean of 3.81 with standard deviation of 1.31 and modal value of 4. This result is consistent in all employees groups. However, the question on every employee having the chance to suggest his opinion on how to develop the organization had the highest standard disagree. deviation of 1.088. The responses varied from agree to strongly
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? Training
The dimension of Human Resource Information has the highest mean of 3.36 with standard deviation of 0.96 and modal value of 3. Other than the department heads, there is a general perception that the organisations does not support the implementations of the training programs. This as indicated by the article by Matt Street may lead to problems in the future. ? Appraisal
The responses for Appraisal had a mean of 3.53 with standard deviation of 1.26 and modal value of 4. This dimension showed a lot of variation in the responses provided by lower level officers (mean 3.33) and the department heads (mean 4.25). The managerial cadre believes that the appraisal system instituted helps the employees know their efforts and potentials as well as encourage them to put in more efforts to present a better show. Many times this is used as an indication for people to be laid off as suggested in the article by Matt Street. 19 Group 7
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? Counselling
Counselling plays a very important part in determining the productivity and job performance of an employee. The responses for Counselling had a mean value 3.59 with standard deviation of 1.26 and modal value of 3. This shows that Counselling dimension has been well received at the organisation level. Analysing at individual levels, it can be inferred that Assistant Managers (Mean – 4) and Managers (Mean – 3.58) are satisfied by the amount of counselling received by them. However lower mean values among Officers (Mean – 3.17) with high standard deviation of 1.17 leads to infer that the counselling measures have not been effective. The same inference can be drawn for departmental heads. ? Career Planning
Career planning is a dimension which has evoked a pattern in which the mean values are higher at every level of an employee?s career progression. The mean value at Officers level is the lowest at 2.67 which improves at every succession level and the mean value at Departmental heads level is highest at 4. The decrease in the standard deviation figures also leads us to infer that there is more clarity regarding career planning and advancement in the organisation as the employee moves up in the hierarchy. The overall mean value is 3.44 and standard deviation is 1.46 which shows that career planning is one of the dimensions which has been effected and perhaps been given less importance. 20 Group 7
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? Reward and Welfare
Reward and Welfare come in both tangible and intangible forms and are very powerful tools to create job satisfaction. The overall mean value is 3.56 with standard deviation of 1.17 which leads to infer that the company has been carrying out rewards and welfare measures. The Departmental Heads (Mean – 4.5) have responded more positively than any other level and all other levels have shown almost same level of agreement towards the measures carried out. The response from Departmental heads also show that rewards and welfare measures dimension has been most effective out of all other researched dimensions of HRD climate. ? Job Enrichment
Job enrichment is a dimension which directly reflects the overall efficiency and employment of skills of the employee. The mean value across all levels is 3.13 with standard deviation of 1.10. This leads us to infer that job enrichment dimension has least influence out of all dimensions when measured at companywide level. However we see that among Assistant Managers (Mean – 3.80), job enrichment scores a mean value much higher than the overall level. This leads us to infer at office level; the job has lesser responsibilities and work is routine. In contrast, there is much higher level of challenge and skill development once the employee is at Assistant Manager Level (Mean – 3.8). The low mean values among Managers (Mean - 2.83) and Departmental heads (Mean – 2.5) show that they are less influenced by job enrichment measures. 21 Group 7
Economic Slowdown: Implications on HR Practices 2009 INTERPRETATIONS & RECOMMENDATIONS
Based on the responses we obtained from the employees it was apparent that there was a general trepidation about the current economic recession. Also there was a lot of variation in the perception of the HR climate in the bank on the basis of grade of the employee. In dimensions of Career Planning, Succession Planning and Reward there is a marked difference in the responses received from the officer level and the department heads. This implies more emphasis being laid on the managerial level in these areas. In areas of Organisational Development, Appraisal, Counselling and HR information there is a general agreement within the different employee levels. ? Participation
ICICI Bank is perceived to be a high engagement organization and according to Hewitt Associates there is high productivity, low absenteeism and greater sustainability in the face of business challenges. There is a general feeling among the respondents surveyed that the company is open to participation from the employees. However, this is more prominent among the middle level managers than the lower level officers. There are initiatives in the bank to promote participation like I-Lab. However, the efficacy of this does not seem to be universal in the organisation. There should be more initiatives taken to involve all the different grades in the decision making process of the organisation, especially among the senior officer and below levels. This might be done by giving them more say in the day-to-day working of their teams or departments. The introduction of the Five S in 2004 was a step in the right direction. There has to be constant effort to sustain this movement. ? Succession Planning
As per the article Clarity amid the Crunch it is important that Succession Planning achieves greater strategic importance which is the case for ICICI Bank. On the basis of the survey, one can conclude that the company places more emphasis on succession planning activities in the middle management onwards. Here too, the lower level cadre appears not to have benefitted 22 Group 7
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from the policies and practices in the organisations. We believe that this is because of the high attrition rate which was prevalent in the bank in the recent past, wherein there was more emphasis on retention of performing managers rather than lower cadre. It is recommended that the bank should look inward for talent spotting, especially during these recessionary times. This will help them reduce the HR costs as well as time for delivery of results. ? Training
A lot of the lower level employees questioned the efficacy of the training programs conducted by the organisation. The online modules, though a good concept, is not being effectively used. This might lead to long term problems as indicated by the article by Matt Street if such training activities are not engaging. The gap between what is covered in the programs and what is required in their daily work, if reduced, would help the employees increase their job productivity. The importance of internal certification via online modules could be given emphasis during evaluations for lateral shifts as well as promotions, especially if the modules are related to the competencies required for the new position. ? Career Planning
There is an increase in this dimension form officer level to department level. Within different levels there is low variance. This too, can be attributed to the HR practice of emphasising on retention of managerial staff. This is an area of HRD concern, which has to be looked into. The HR should have policies so that the lower level employees do not feel left out. ? Job Enrichment
Job enrichment is more visible and appreciated among the officers and assistant managers, since this gives them a sense of pride and self worth. From the survey we can conclude that there is a
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concerted effort being made to reduce the monotony of the day to day work. However with the increasing span of control, such job enrichment is not perceived by department heads. One way to enhance the work of the Unit Heads could be to be made responsible for regional expansion with the spate of expansions happening across the globe or responsible for new market/area development projects.
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Economic Slowdown: Implications on HR Practices 2009 ANNEXURE
1. Log of Visits Organization Date of Visit Time of Visit Contact Person Contact Number ICICI Bank 28th Feb 2009 & 7th March 2009 2.00 p.m. – 6.00 p.m. Ms. Roopa Joshi (Manager R.A.O.G.) 66672105 ICICI Bank Ltd. Company Address 2nd Floor, Empire Building, Senapati Bapat Marg, Lower Parel, Mumbai 400013 2. Contact Details of Respondents
Name Vishal Dalvi Ajay Singh Samirahamad Sayyad Devesh Verma Arif Sheik Naveen Batra Rinal Puthran Darshna Nair Parikshit Lale Vittal Sirigiri Manish Agrawal Deepak Mendon Roopa Joshi Praveen Krishnamurthy Harsh Taparia Ramakrishnan Ramamurthy Email ID [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Tel 6667 3839 9820861568 9930062590 66672112 9892488933 9819611544 26537346 9821899118 99870 27244 9819787591 9821407047 Education BCOM MBA BSC BTECH BCOM CA CA BCOM PGDM-IIM PGDM-IIM MBA ICWA., ACA CA Grade Senior Executive Officer Senior Officer Asst Manager Asst Manager Asst Manager Asst Manager Asst Manager Manager Manager Manager Manager Manager
MBA Manager 9967577403 CA,CS,ICWA Chief Manager ICWA AGM
[email protected] -
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3. Responses
N Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20 Q21 Q22 Q23 Q24 Q25 Q26 Q27 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 Maximum Minimum Mean Median Mode Std Dev 5 2 4.25 4.00 4.00 0.775 5 2 3.69 4.00 4.00 0.873 5 2 3.63 4.00 4.00 0.719 5 2 3.63 3.50 3.00 1.025 5 2 3.81 4.00 3.00 0.981 4 2 3.38 3.00 3.00 0.619 5 1 3.38 3.00 3.00 1.025 5 2 3.88 4.00 4.00 0.806 5 2 3.81 4.00 4.00 0.655 5 2 3.88 4.00 4.00 0.806 4 3 3.81 4.00 4.00 0.403 4 2 3.19 3.00 3.00 0.544 4 1 3.06 3.00 4.00 0.998 4 2 3.38 4.00 4.00 0.806 5 1 3.69 4.00 4.00 1.078 5 2 3.50 4.00 4.00 0.816 4 2 3.44 4.00 4.00 0.727 5 2 3.25 3.00 3.00 0.856 5 2 3.25 3.00 3.00 0.683 5 2 3.38 3.00 3.00 0.957 4 1 3.31 3.50 4.00 0.873 5 1 3.38 4.00 4.00 1.088 4 2 3.44 3.50 4.00 0.629 4 2 3.38 3.00 3.00 0.619 4 2 3.13 3.00 3.00 0.719 5 2 3.56 4.00 4.00 0.727 5 2 3.50 3.50 3.00 0.730
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REFERENCES
BOOKS 1. Human Resource Management (11th Edition) Gary Dessler, Biju Varkkey 2. Organizational Behaviour (3rd Edition) Steven McShane, Mary Gilnow, Radha Sharma WEB SITES 1. www.wikipedia.org 2. www.icicibank.com
3. www.human-resources-management.suite101.comhttp://human-resources-management.s.../global_credit_crunch_affects_employee_health
4. www.marketwatch.comhttp://www.marketwatch.com/news/story/global-economic-crisis-has-made/story.aspx?guid={5D73FD6F-140E-4721-B09E-EC8529888014}
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doc_602926025.pdf
The report explains about the implications of recession on the Human resource policies of Banks. In this report ICICI bank has been taken into consideration.
3/14/2009
Economic Slowdown: Implications on HR Practices
HR Practices at ICICI Bank
Economic Slowdown: Implications on HR Practices 2009
Table of Contents
INTRODUCTION ..............................................................................................................................................................2 LITERATURE REVIEW....................................................................................................................................................3 SYNOPSIS –PARTICIPATION ...............................................................................................................................3 SYNOPSIS -TRAINING ..........................................................................................................................................4 SYNOPSIS -APPRAISAL ........................................................................................................................................4 SYNOPSIS –REWARDS AND WELFARE ............................................................................................................5 SYNOPSIS –COUNSELLING .................................................................................................................................6 SYNOPSIS –HUMAN RESOURCE INFORMATION ...........................................................................................6 SYNOPSIS –SUCESSION PLANNING ..................................................................................................................7 ICICI B ANK ..................................................................................................................................................................8 BACKGROUND.......................................................................................................................................................8 CURRENT HR PRACTICES ...................................................................................................................................8 ANALYSIS .................................................................................................................................................................... 10 QUALITATIVE ...................................................................................................................................................... 10 1. 2. 1. 2. INTERVIEW EXCERPTS ............................................................................................................................. 11 OUTLOOK ON RECESSION ....................................................................................................................... 12 METHODOLOGY ......................................................................................................................................... 13 RESULTS ....................................................................................................................................................... 13
QUANTITATIVE ................................................................................................................................................... 13
INTERPRETATIONS & RECOMMENDATIONS ............................................................................................................... 22 REFERENCES ............................................................................................................................................................... 27 BOOKS ................................................................................................................................................................... 27 WEB SITES ............................................................................................................................................................ 27
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INTRODUCTION
Years of “irrational exuberance” saw the financial markets in United States and many of the world?s major economies roaring as if there was nothing to fear. The underlying factor lay in the unprecedented rise in housing prices. Mortgage lenders made loans to all kinds of people including those with low creditworthiness, often without proof of income leading to the creation of “subprime credit”. This led to the creation of a “housing bubble” that peaked in 2005. On average, US home prices rose by more than an unprecedented 124 percent between 1997 and 2006. By 2006, housing prices began to fall in overbuilt markets. Interest rates began to rise. Borrowers started to default on their loans as the loans reset to higher interest rates and payment amounts. Consequently, the country witnessed a high rate of foreclosure of property, thereby triggering off a further downward spiral. This led to the collapse of leading Wall Street giants like Bear Sterns, Lehman Brothers and Freddie Mac and Fannie Mae who had huge amounts in subprime mortgage backed assets. The contagion spread across countries particularly in Europe and a severe liquidity crunch in the global credit markets and banking systems precipitated the present financial crisis. This led to slowdown in the global economy. India has been no exception though the magnitude of the crisis has been relatively modest as compared to other economies with the possible exception of China. The most immediate effect of the crisis on India has been the outflow of foreign institutional investment from the equity market. After a long spell of growth, the Indian economy is experiencing a downturn. Industrial growth has faltered, the current deficit is widening, foreign exchange reserves are depleting and the rupee is depreciating. More than five lakh jobs have been lost in India. However, the RBI has been successful in regulating the Indian banking institutions to insulate them, significantly, if not completely from the subprime mess.
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LITERATURE REVIEW
SYNOPSIS –PARTICIPATION 1. Shared values must come to the fore during the recession - Nicholas Bacon (Feb 2009)
(http://business.timesonline.co.uk/tol/business/industry_sectors/public_sector/article5720415.ece)
2. Importance Of High Employee Engagement During Recession Leads Organizations To Participate In Annual Best Employers In Canada Study – Hewitt Associates (Mar 2009) (http://beta.investors.com/NewsAndAnalysis/Article.aspx?id=89018777&source=Newsfeed) The concept of employee participation has its origins in competitive issues especially after the 1982 recession in America. Research has attributed several virtues to participation: a. b. c. d. Participation improves decision making People tend to be more committed to implementing decisions that they themselves make It enhances a sense of power among employees It helps enhance identification with the organization if employee suggestions are incorporated. The current economic environment has sparked increased interest in the study and the role of employee engagement in successfully addressing challenging times. Research by Hewitt Associates has revealed that organizations with high employee engagement have lower turnover, higher productivity, less absenteeism and greater sustainability in the face of business challenges. Participation enables organizations to measure the engagement level of their workforce and learn where best to target efforts to increase it. It has also been seen that good industrial relations have enabled organizations to manage their way out of the recession successfully. Effective management of industrial relations requires shared values among employers, trade unions and governments. This includes agreements on the rights and roles of unions and employers, employee participation and what constitutes fair outcomes. Employer commitment to consultation and gain-sharing with employees is essential in 3 Group 7
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turbulent times. Employee commitment to business success in the workplace requires enhanced employee participation in important decisions at corporate levels. SYNOPSIS -TRAINING 1. Talent Management in a Recession – Matt Street (Aug 2008)
(http://www.management-standards.org/client_files/Talent%20management%20in%20a%20recession.pdf)
Training has often been thought of as the first casualty of recessions as companies are more bent on cutting costs in such times. An August 2008 research report titled “Talent Management in a Recession” says that neglecting talent management in times of economic downturn is likely to have a significant negative impact in the long run, and that organisations should continue to place importance on talent management and staff training and development throughout difficult economic periods. The research suggests that Staff development need not be put on hold during periods of economic instability. Correct training provides more value than it costs; and this holds true whether a recession is occurring or not. If training budgets need to be reduced internal staff members (particularly senior managers) may be able to provide training instead of using costly external training providers. The research also says that senior managers may also be more willing to take on training or mentoring role in times of economic instability, in part to prove their worth and in part because they may have more time available in quiet periods. Training should help an organisation cope with the downturn. Training related to issues like change management may be helpful. An important question that an organization should ask itself is whether employees would continue to be motivated and stay with the organisation if training is not imparted . Studies have shown that employees highly value the development of their own skills, with talented employees likely to do so more than others. Cutting back on training and development is likely to reduce morale and act as a de-motivator for your staff, and may even be a reason for leaving for some. SYNOPSIS -APPRAISAL 1. Talent Management in a Recession – Matt Street (Aug 2008)
(http://www.management-standards.org/client_files/Talent%20management%20in%20a%20recession.pdf)
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The report also suggests that staff appraisals and the reviewing of employees? skills should take place within all organisations. Reviews in times of downturn can be used to find both the „talent? within an organisation and those who can be easily replaced or let go of. Proper review and appraisal would also help in determining where existing or likely future skills gaps exist within the organisation. Appraisals can be used to determine which individuals in an organisation have the potential to be promoted to senior roles in the future, which individuals have scarce skills and which individuals would benefit the most from training. A detailed review of employee skills will also be useful to determine which employees might be made redundant should staff cuts need to be made in periods of economic downturn. Also, a review of employee skills and talents can be made use of if any restructuring activity is needed for the organisation to enable it to cope with the economic downturn. SYNOPSIS –REWARDS AND WELFARE 1. Rewarding in a recession - Blyth Alex at Personnel Today, 12/2/2008, p20-22, 3p 2. McKinsey Quarterly June 2006 (http://download.mckinseyquarterly.com/srbonus-2006-08.pdf ) 3. Reward in a Recession - Roger Down (Jan 2009) (http://www.wayshrconsulting.com/wp4. The Value of Increasing Investment in Employee Benefits during an Economic Downturn - Bryan K. Brenner, REBC (http://www.workingwell4you.com/documents/2008-115. Recession:
13%20The%20Value%20of%20Increasing%20Investment%20in%20Employee%20Benefits%20during%2 0an%20Economic%20Downturn%20HPEB%20Jan09.pdf) (http://www.jackkeogh.com/Recession%20Human%20Capital%20Challenge.pdf) content/uploads/2009/01/white-paper-reward-in-a-recession.pdf)
The
Human
Capital
Challenge
–
Jack
Keogh
While some experts believe that in a downturn, employers should cut rewards and welfare package at these times, others argue that it is necessary that they invest in benefits during times of financial crisis. According to a McKinsey Quarterly survey conducted in June 2006, 46% of executives believe employee benefits help attract and retain quality employees, keep them motivated and that benefits are important to staying competitive. Health insurance, along with other employee benefits, is believed to be even more significant in helping companies retain employees, reduce training costs and maintain productivity. A survey by MetLife called “6th Annual Study of Employee Benefit Trends” reveals that businesses that invest more in employee benefits during times of economic distress will see that investment pay off in profits. The economic advantage is not only realized in saving money by 5 Group 7
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paying less in training and recruiting costs, it helps the company make money for the firm through greater employee productivity. In a report published in the Journal of Financial Service Professionals in January 2009, the author says that providing desirable employee benefits and welfare schemes need not be an expensive proposition if innovative schemes can be designed. It found that perks like providing recreational facilities, allowing employees to use the company mailroom, or having on-site access to exercise classes or massages help employees develop loyalty. SYNOPSIS –COUNSELLING 1. Anxiety over market comes to Workplace - Bob Ankeny, Jay Greene (EBSCO) 2. Survivors? Anguish – Samantha Marshall (EBSCO)
There has been a resurgence of the issue of employee counselling in the wake of the worldwide financial crisis. In a recent survey conducted by the American Psychological Association, it reported that worries about money and job stability are top stress factors that have led to higher levels of drinking, overeating, smoking, gambling and higher level of domestic conflicts. The current economic scenario also warrants people working longer hour to constantly be responsive to clients' needs. Also, the massive layoffs across the board have led to a devastating morale as employees who manage to survive are uncertain about their own future and frustrated by the way their colleagues were treated. Troubled employees cost employers a lot of money in terms of lost productivity. Employee Assistance Programs can help employees achieve work-life balance, enhance trust and security, reduce absenteeism and contribute to a more engaged workplace. It is said that employees whose personal issues are resolved often have fewer errors and missed deadlines on the job, along with improved workplace behavior and communication skills. Therefore, everyone in the organization should be made aware of the importance of recognizing and helping colleagues who may be suffering from depression as positive action will result in benefits not just to the individuals but to the company as a whole. SYNOPSIS –HUMAN RESOURCE INFORMATION 6 Group 7
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1. Transparency Key to Sustain Employee Performance During Recession – Kellye Whitney (http://www.talentmgt.com/newsletters/talent_management_perspectives/2008/May/632/index.php) 2. Results That Last – Quint Studer (Apr 2008)
(http://apps.sgasp.com/qbooks/Documents/StuderBadEconomyRel_04-17-08FINAL.pdf)
A recession brings the risk of decreasing employee performance, engagement and organizational loyalty. Manny Avramidis, senior vice president global human resources at the American Management Association says that employers should pay close attention to feelings of insecurity and the resulting performance disruptions that can occur during an economic slump. Employers should focus on creating a transparent work culture that would promote and maintain clear and consistent communication throughout whereby every employee should know exactly where they stand, as well as where the business stands, and what the organization's strategy will be to get through the economic downturn. This would enable the management and individual employees to jointly deal with the challenges. Also, not only would it promote employee trust and loyalty it would also help the organization show genuine interest in employee development so, once through the economic downturn, the organization is positioned to come out stronger than ever on the other end. SYNOPSIS –SUCESSION PLANNING 1. Taking Stock: Succession Planning in a Recession – Jamberry Ltd Survey 2. Clarity amid the Crunch – Matthew Parker (Dec 2008)
(http://www.jamberry.co.uk/coaching/pdf/Taking%20Stock.pdf) (http://www.stepstonesolutions.com/_pdf/Whitepapers/StepStone_White_Clarity_amid_the_Crunch.pdf )
3. Bottom Up Succession Planning Works Better – Paul Stevens (Aug 2000)
(http://cclp.mior.ca/Reference%20Shelf/PDF_OISE/Bottom%20Up.pdf)
An executive white paper published by Stepstone called “Clarity amid the crunch “published in December 2008 talks about the risk of “non-strategic promotion” particularly in a recession. While efficient internal prospecting of employees supports and improves productivity, nonstrategic promotions could be given to the least appropriate contenders in positions that would add to already enhanced costs during downturns. Proper succession planning is also necessary as employees realize that career protection and increased employability can only be done by themselves. As a consequence, succession planning would enable employees to be better prepared to face challenges
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ICICI BANK
BACKGROUND ICICI Bank is India's second-largest bank with total assets of Rs. 3,744.10 billion (US$ 77 billion) at December 31, 2008. The Bank has a network of 1,416 branches across urban and rural India and presence in 18 countries including USA, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai. The bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts are listed on the New York Stock Exchange. CURRENT HR PRACTICES Training – ICICI Bank implemented Sum Total?s solution “The Learning Matrix” as an enterprise application for aligning e-Learning needs of its employees. (http://www.hr.com/SITEFORUM?&t=/Default/gateway&i=1116423256281&application=story&active=no&Paren
tID=1119278002800&StoryID=1196697279551&xref=)
Succession Planning – Forecasting on attrition rates and revenue delivered by the HR Department has saved Rs 100 cr for ICICI Bank. The technique of not benching people and promoting from within by training them with the systems and training in place has made this possible. (http://www.business-standard.com/india/news/savvy-hr-saves-icici-bank-rs-100-cr/267870/) Appraisal – PMS (Performance Management System) is the system used in ICICI Bank for appraisal of its employees. It grades employees in 5 categories – Type 1, 2, 3, 4, 5 where Type 1 being the best to Type 5 being the underperformer.
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Career Planning – ICICI Bank launched a new initiative called ICICI Bank DNA to map competency of employees for the different work profiles. Human Resource Information – iVoice is the initiative launched in 2006 by the HR Department to integrate the various department ideas. Management Speak is a special initiative within iVoice to help in communication of Top Management with the employees. Participation – iLab is an initiative launched by ICICI Bank to help in exchange of ideas with the employee getting felicitated from Top Management for breakthrough ideas.
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ANALYSIS
QUALITATIVE "We are reading the economy and the mood is obviously not as bullish as a year or two ago. So, we have decided to be cost-prudent by holding back the annual promotions and scaling down the bonuses for this year” K. Ram Kumar, Group HR Head “ICICI Bank has one of the best HR policies in the banking sector. With this current slowdown, some hard decisions have been taken and some more will be taken. All the employees understand this. They know that this will pass and that the bank will reward all the performers when we get through this phase.” Roopa Joshi, Manager “There have been no promotions this year. However, some of our job profiles have been enhanced. I am currently handling a profile which was handled by a higher grade.” Arif Sheikh, Asst. Manager “Having a job in this current slowdown is a reward in itself” Samirahamad Sayyad, Senior Officer In the financial year 2007-08, ICICI held back the annual promotions and scaled down on the promotions too. It was expected that things would improve during the financial year 2008-09 At the time of taking the responses for the questionnaire, the employees were not sure of the policy for rewards and promotions for the financial year 2008-09.
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Training modules in ICICI are delivered through the classroom training and online training modules. As per the current practice, all employees have to complete a certain number of classroom and online programs. Training is conducted for soft-skills development, functional areas, quality improvement and leadership development. However, there seems to be a general tendency of the employees to treat these training programs very casually. Also, there is a general perception most programs are not implementable at work. As one respondent said, “The classroom programs are very good. But most are difficult to implement in this office.” Another said, “We have to complete a set number of online programs every year. Any-one can do any module. But it has little value-addition. Completion of a module does not make one eligible for any opening in the sector related to that module.” The respondents had good words for the Human Resources Information provided by the company. Most departments have an internal online newsletter. Every quarter, there is a quarterly new magazine known as “I-Voice” which informs everyone about the various activities carried out by the bank along with an interactive session with the group heads and HR managers. Appraisal is usually a sore point in most organisations. However, there is general perception among the respondents process of appraisal is transparent and well organised. The appraisal process is conducted twice a year, a half yearly appraisal during September/October and the Final appraisal during February/March. “Our work is monitored monthly through various MIS and Balanced Score Card. The Half-yearly is just a formal way of updating us on our weak and strong points. The end of year appraisal is the most important.” said one. However, this appraisal also determines the rating of an individual. As one Manager said, “The year-end appraisal is one of the main factors to decide the bonus and promotion. It is a pretty transparent process. It is the other factors which I have a problem with.” 1. INTERVIEW EXCERPTS Interviewee: Darshana Nair (Assistant Manager) Group: What are your current responsibilities? DN: I am currently the Area Operations Manager in Mumbai 11 Group 7
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Group: Are you able to implement the learnings from the training programs you have attended? DN: The functional programs like where you are taught how to use the new software etc. are easily implementable. These are tangible and one has to use it every day, No issue on this. However, the other soft skills, quality technique trainings are more difficult. No one likes to change their routine. It takes an extra effort and needs time to show results. It is much harder to practice this, and if you are not watchful, you go back to the same routine. But here the bosses want immediate results. So if it does not show results quickly, it is put into the backburner and forgotten Group: What do you have to say about the different rewards and welfare initiatives in ICICI? DN: This year we still haven?t been told „bout the policy for this year. The previous years? has been quite reasonable.
Interviewee: Ramakrishnan Ramamurthy (AGM) Group: Sir, what are your thoughts on the appraisal system in the bank? RR: The bank has a very robust and well structured appraisal system. Appraisal is done twice a year, during September and February and captured in the Performance Management System. There are inbuilt criteria along with the mutually agreed criteria that one can use to appraise ones subordinates. Each manager has to give his feedback to his subordinates, else the HR dept. sending reminders to those who have not. The year-end appraisal is one of the main factors along with potential and “talent” for promotion. Group: What does the bank do to help in the career planning of an individual? RR: Unlike some companies, there is no official “mentor” system in ICICI. All the employees are appraised on the basis of their performance. However, while searching for talent, a special cross functional committee judges the candidates of Asst Manager or higher grade, to see if they fit the laid out criteria. Such people are provided special help and guidance to realise their potential. They are also given more responsibilities and challenges in their day to day work.
2. OUTLOOK ON RECESSION
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It was observed in the interviews there is general apprehension among the rank and file of the organization regarding the current economic crisis. Usually, during the I-Voice sessions in month of March, there is a lot of excitement and a lot of queries on the performance rating, criteria of promotion, bonus and etc. However, this year, the same is missing. As one respondent explained, “This year, the economy has not done well. Same is with the bank. To expect the same kind of promotions and bonuses that we received the last few years is foolish” The employee turnover rate in ICICI till recently has been very high on the account of poaching from foreign banks. However, the news of mass lay-offs in the same foreign banks has made the employees more circumspect about the future. QUANTITATIVE 1. METHODOLOGY The complete set of responses has been categorised into ten dimensions. Based upon the responses from participants of questionnaire, the mean and mode of the responses have been calculated. ? ? ? Calculation of mean and mode value for each dimension. Calculation of overall value of all the responses for the company. This provides the central tendency the company. Finding standard deviation of each dimension
2. RESULTS As indicated, in the responses to the questionnaire, the total mean score is 3.516 with a standard deviation of 0.813 with mode of 4. A marked difference in perception can be seen in the responses of the higher management to that of the lower rung officers in some areas. While nearly all the respondents agreed that a lot was being done by the company in the dimensions of Organisation Development and HR information and areas of concern in Training and Job enrichment, there were marked differences in 13 Group 7
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dimensions like Appraisal and Succession Planning. Given below are the mean, standard deviation and modal scores of the various dimensions in the HRD Climate survey.
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Officers Asst Manager Manager Dept Heads Total Avg Std Mod Avg Std Mod Avg Std Mod Avg Std Mod Avg Std Mod Organisational Development Appraisal Reward Training Counselling Succession Planning Participation HR information Career Planning Job Enrichment 3.67 3.33 3.11 3.10 3.17 2.78 3.33 3.50 2.67 3.00 0.87 1.03 0.60 0.54 1.17 0.67 1.12 0.55 0.58 0.00 4 4 3 3 3 3 4 4 3 3 4.20 3.50 3.67 3.77 4.00 3.60 4.00 3.70 3.60 3.80 0.41 0.71 0.49 0.73 0.82 0.91 0.53 0.67 0.55 0.45 4 3 4 4 4 4 4 4 4 4 3.56 3.42 3.39 3.12 3.58 3.78 3.28 3.50 3.50 2.83 1.15 0.67 0.70 0.67 1.00 0.73 1.07 0.67 0.55 0.75 4 4 4 3 3 4 4 4 4 3 3.83 4.25 4.50 3.43 3.25 3.83 3.50 4.00 4.00 2.50 0.98 0.50 0.55 1.09 0.96 1.17 1.38 0.00 0.00 0.71 4 4 5 4 4 5 4 4 4 3 3.81 3.53 3.56 3.36 3.59 3.54 3.54 3.63 3.44 3.13 1.31 1.26 1.17 0.96 1.26 1.12 1.24 1.25 1.46 1.10 4 4 4 3 3 4 4 4 4 3
Figure 1: Mean of Dimensions by Grades
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Figure 2: Mean, Mode & Std Dev of Responses
Figure 3: Mean, Mode & Std Dev for all responses Dimension wise
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3. GRAPHS ? Participation
The responses for Participation had a mean of 3.54 with standard deviation of 1.24 and modal value of 4. In this dimension, most employees surveyed felt that they had an important part to play in the daily running of the organisation. As expected, the junior level officers did not respond to most of the questions for this dimension positively. However, it should be noted that some senior employees feel that they do not have a say in the path that the management decides for organisational growth. The middle managers and the assistant managers were more inclined to believe that they had a positive influence in direction the organisation was taking. ? Succession Planning
The responses for Participation had a mean of 3.54 with standard deviation of 1.12 and modal value of 4. This dimension showed a lot of variation in the responses provided by lower level officers and the department heads. While the lower level officers believed that there was no concerted effort to prepare them for higher positions, most respondents of the grade assistant managers and above believed that enough feedback and preparation is given before hand to prepare them for the challenges they would face at the next higher positions. Most respondents also agreed that the policies were in place for the smooth transition to higher positions.
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? Human Resource Information The dimension of Human Resource Information has the second highest mean of 3.63 with standard deviation of 1.25 and modal value of 4. This result is consistent in all employees groups. It can be inferred that there are good policies and practices in place to communicate to the employees. ? Organizational Development the potential, capabilities and areas of improvement
The dimension of Human Resource Information has the highest mean of 3.81 with standard deviation of 1.31 and modal value of 4. This result is consistent in all employees groups. However, the question on every employee having the chance to suggest his opinion on how to develop the organization had the highest standard disagree. deviation of 1.088. The responses varied from agree to strongly
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? Training
The dimension of Human Resource Information has the highest mean of 3.36 with standard deviation of 0.96 and modal value of 3. Other than the department heads, there is a general perception that the organisations does not support the implementations of the training programs. This as indicated by the article by Matt Street may lead to problems in the future. ? Appraisal
The responses for Appraisal had a mean of 3.53 with standard deviation of 1.26 and modal value of 4. This dimension showed a lot of variation in the responses provided by lower level officers (mean 3.33) and the department heads (mean 4.25). The managerial cadre believes that the appraisal system instituted helps the employees know their efforts and potentials as well as encourage them to put in more efforts to present a better show. Many times this is used as an indication for people to be laid off as suggested in the article by Matt Street. 19 Group 7
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? Counselling
Counselling plays a very important part in determining the productivity and job performance of an employee. The responses for Counselling had a mean value 3.59 with standard deviation of 1.26 and modal value of 3. This shows that Counselling dimension has been well received at the organisation level. Analysing at individual levels, it can be inferred that Assistant Managers (Mean – 4) and Managers (Mean – 3.58) are satisfied by the amount of counselling received by them. However lower mean values among Officers (Mean – 3.17) with high standard deviation of 1.17 leads to infer that the counselling measures have not been effective. The same inference can be drawn for departmental heads. ? Career Planning
Career planning is a dimension which has evoked a pattern in which the mean values are higher at every level of an employee?s career progression. The mean value at Officers level is the lowest at 2.67 which improves at every succession level and the mean value at Departmental heads level is highest at 4. The decrease in the standard deviation figures also leads us to infer that there is more clarity regarding career planning and advancement in the organisation as the employee moves up in the hierarchy. The overall mean value is 3.44 and standard deviation is 1.46 which shows that career planning is one of the dimensions which has been effected and perhaps been given less importance. 20 Group 7
Economic Slowdown: Implications on HR Practices 2009
? Reward and Welfare
Reward and Welfare come in both tangible and intangible forms and are very powerful tools to create job satisfaction. The overall mean value is 3.56 with standard deviation of 1.17 which leads to infer that the company has been carrying out rewards and welfare measures. The Departmental Heads (Mean – 4.5) have responded more positively than any other level and all other levels have shown almost same level of agreement towards the measures carried out. The response from Departmental heads also show that rewards and welfare measures dimension has been most effective out of all other researched dimensions of HRD climate. ? Job Enrichment
Job enrichment is a dimension which directly reflects the overall efficiency and employment of skills of the employee. The mean value across all levels is 3.13 with standard deviation of 1.10. This leads us to infer that job enrichment dimension has least influence out of all dimensions when measured at companywide level. However we see that among Assistant Managers (Mean – 3.80), job enrichment scores a mean value much higher than the overall level. This leads us to infer at office level; the job has lesser responsibilities and work is routine. In contrast, there is much higher level of challenge and skill development once the employee is at Assistant Manager Level (Mean – 3.8). The low mean values among Managers (Mean - 2.83) and Departmental heads (Mean – 2.5) show that they are less influenced by job enrichment measures. 21 Group 7
Economic Slowdown: Implications on HR Practices 2009 INTERPRETATIONS & RECOMMENDATIONS
Based on the responses we obtained from the employees it was apparent that there was a general trepidation about the current economic recession. Also there was a lot of variation in the perception of the HR climate in the bank on the basis of grade of the employee. In dimensions of Career Planning, Succession Planning and Reward there is a marked difference in the responses received from the officer level and the department heads. This implies more emphasis being laid on the managerial level in these areas. In areas of Organisational Development, Appraisal, Counselling and HR information there is a general agreement within the different employee levels. ? Participation
ICICI Bank is perceived to be a high engagement organization and according to Hewitt Associates there is high productivity, low absenteeism and greater sustainability in the face of business challenges. There is a general feeling among the respondents surveyed that the company is open to participation from the employees. However, this is more prominent among the middle level managers than the lower level officers. There are initiatives in the bank to promote participation like I-Lab. However, the efficacy of this does not seem to be universal in the organisation. There should be more initiatives taken to involve all the different grades in the decision making process of the organisation, especially among the senior officer and below levels. This might be done by giving them more say in the day-to-day working of their teams or departments. The introduction of the Five S in 2004 was a step in the right direction. There has to be constant effort to sustain this movement. ? Succession Planning
As per the article Clarity amid the Crunch it is important that Succession Planning achieves greater strategic importance which is the case for ICICI Bank. On the basis of the survey, one can conclude that the company places more emphasis on succession planning activities in the middle management onwards. Here too, the lower level cadre appears not to have benefitted 22 Group 7
Economic Slowdown: Implications on HR Practices 2009
from the policies and practices in the organisations. We believe that this is because of the high attrition rate which was prevalent in the bank in the recent past, wherein there was more emphasis on retention of performing managers rather than lower cadre. It is recommended that the bank should look inward for talent spotting, especially during these recessionary times. This will help them reduce the HR costs as well as time for delivery of results. ? Training
A lot of the lower level employees questioned the efficacy of the training programs conducted by the organisation. The online modules, though a good concept, is not being effectively used. This might lead to long term problems as indicated by the article by Matt Street if such training activities are not engaging. The gap between what is covered in the programs and what is required in their daily work, if reduced, would help the employees increase their job productivity. The importance of internal certification via online modules could be given emphasis during evaluations for lateral shifts as well as promotions, especially if the modules are related to the competencies required for the new position. ? Career Planning
There is an increase in this dimension form officer level to department level. Within different levels there is low variance. This too, can be attributed to the HR practice of emphasising on retention of managerial staff. This is an area of HRD concern, which has to be looked into. The HR should have policies so that the lower level employees do not feel left out. ? Job Enrichment
Job enrichment is more visible and appreciated among the officers and assistant managers, since this gives them a sense of pride and self worth. From the survey we can conclude that there is a
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Economic Slowdown: Implications on HR Practices 2009
concerted effort being made to reduce the monotony of the day to day work. However with the increasing span of control, such job enrichment is not perceived by department heads. One way to enhance the work of the Unit Heads could be to be made responsible for regional expansion with the spate of expansions happening across the globe or responsible for new market/area development projects.
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Economic Slowdown: Implications on HR Practices 2009 ANNEXURE
1. Log of Visits Organization Date of Visit Time of Visit Contact Person Contact Number ICICI Bank 28th Feb 2009 & 7th March 2009 2.00 p.m. – 6.00 p.m. Ms. Roopa Joshi (Manager R.A.O.G.) 66672105 ICICI Bank Ltd. Company Address 2nd Floor, Empire Building, Senapati Bapat Marg, Lower Parel, Mumbai 400013 2. Contact Details of Respondents
Name Vishal Dalvi Ajay Singh Samirahamad Sayyad Devesh Verma Arif Sheik Naveen Batra Rinal Puthran Darshna Nair Parikshit Lale Vittal Sirigiri Manish Agrawal Deepak Mendon Roopa Joshi Praveen Krishnamurthy Harsh Taparia Ramakrishnan Ramamurthy Email ID [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Tel 6667 3839 9820861568 9930062590 66672112 9892488933 9819611544 26537346 9821899118 99870 27244 9819787591 9821407047 Education BCOM MBA BSC BTECH BCOM CA CA BCOM PGDM-IIM PGDM-IIM MBA ICWA., ACA CA Grade Senior Executive Officer Senior Officer Asst Manager Asst Manager Asst Manager Asst Manager Asst Manager Manager Manager Manager Manager Manager
MBA Manager 9967577403 CA,CS,ICWA Chief Manager ICWA AGM
[email protected] -
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Economic Slowdown: Implications on HR Practices 2009
3. Responses
N Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20 Q21 Q22 Q23 Q24 Q25 Q26 Q27 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 Maximum Minimum Mean Median Mode Std Dev 5 2 4.25 4.00 4.00 0.775 5 2 3.69 4.00 4.00 0.873 5 2 3.63 4.00 4.00 0.719 5 2 3.63 3.50 3.00 1.025 5 2 3.81 4.00 3.00 0.981 4 2 3.38 3.00 3.00 0.619 5 1 3.38 3.00 3.00 1.025 5 2 3.88 4.00 4.00 0.806 5 2 3.81 4.00 4.00 0.655 5 2 3.88 4.00 4.00 0.806 4 3 3.81 4.00 4.00 0.403 4 2 3.19 3.00 3.00 0.544 4 1 3.06 3.00 4.00 0.998 4 2 3.38 4.00 4.00 0.806 5 1 3.69 4.00 4.00 1.078 5 2 3.50 4.00 4.00 0.816 4 2 3.44 4.00 4.00 0.727 5 2 3.25 3.00 3.00 0.856 5 2 3.25 3.00 3.00 0.683 5 2 3.38 3.00 3.00 0.957 4 1 3.31 3.50 4.00 0.873 5 1 3.38 4.00 4.00 1.088 4 2 3.44 3.50 4.00 0.629 4 2 3.38 3.00 3.00 0.619 4 2 3.13 3.00 3.00 0.719 5 2 3.56 4.00 4.00 0.727 5 2 3.50 3.50 3.00 0.730
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Economic Slowdown: Implications on HR Practices 2009
REFERENCES
BOOKS 1. Human Resource Management (11th Edition) Gary Dessler, Biju Varkkey 2. Organizational Behaviour (3rd Edition) Steven McShane, Mary Gilnow, Radha Sharma WEB SITES 1. www.wikipedia.org 2. www.icicibank.com
3. www.human-resources-management.suite101.comhttp://human-resources-management.s.../global_credit_crunch_affects_employee_health
4. www.marketwatch.comhttp://www.marketwatch.com/news/story/global-economic-crisis-has-made/story.aspx?guid={5D73FD6F-140E-4721-B09E-EC8529888014}
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doc_602926025.pdf