1

A PROJECT REPORT
ON
HUMAN RESOURCE MANAGEMENT IN
STATE BANK OF INDIA

SUBMITTED TO UNIVERSITY OF MUMBAI IN

PARTIAL FULFILLMENT
FOR THE REQUIREMENT OF THE DEGREE OF
M.COM-I
(BUSINESS MANAGEMENT)
SEMESTER 1
UNDER GUIDANCE OF
PROF.MR. VINAYAK RAJE

VPMS K.G. JOSHI COLLEGE OF ARTS

N.G. BEDEKAR COLLEGE OF COMMERCE THANE
ACADEMIC YEAR: 2014-15

ADITI H. HANDE
ROLL NO. 14

Vidya Prasark Mandal, Thane

K.G JOSHI COLLEGE OF ARTS
N.G BEDEKAR COLLEGE OF COMMERCE

CERTIFICATE
OF
PROJECT WORK

This is to certify that

MR./MS.ADITI HEMANT HANDE of M.COM PART-I (BUSINESS MANAGEMENT)
Semester I Roll No.14 has undertaken & completed the project work title HUMAN
RESOURCE MANAGE MENT IN SBI during the academic year 2014-15 under the guidance
of PROF. MR. VINAYAK RAJE to this college in fulfillment of the curriculum of MASTER
OF COMMERCE PART-I (BUSINESS MANAGEMENT) UNIVERSITY OF MUMBAI.
This is a bonafied project work & the information presented is true & original to the best of our
knowledge and belief

PROJECT

EXTERNAL

GUIDE

EXAMINER

DECLARARTION
I Aditi Hande studying in M.COM-I (Business Management) hereby declares that I have done a
project on Human Resource Management In SBI. As required by the university rules, I state that
the work presented in this thesis is original in nature and to the best my knowledge, has not been
submitted so far to any other university.
Whenever references have been made to the work of others, it is clearly indicated in the sources
of information in references.

(Aditi Hande)
Place: Thane
Date:

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on Human Resource Management In SBI
have been prepared purely from the point of view of students requirements.
This project covers all the information pertaining to Human Resource Management. I had tried
my best to write project in simple and lucid manner. I have tried to avoid unnecessary
discussions and details. At the same time it provides all the necessary information. I feel that it
would be of immense help to the students as well as all others referring in updating their
knowledge.
I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us such an
awesome opportunity. I am also thankful to our co-ordinator Mr. D.M. Murdeshwar Sir and also
librarian and my colleagues for their valuable support, co-operation and encouragement in
completing my project.
Special thanks to Prof. Mr. Vinayak Raje my internal guide for this project for giving me expert
guidance, full support and encouragement in completing my project successfully.
I take this opportunity to thanks my parents for giving guidance and for their patience and
understanding me while I am busy with my project work.

INDEX
Sr.No
Topic
Chapter1 Human Resource Management
1.1 Introduction
1.2 Definition And Meaning
1.3 Nature Of Human Resource Management
1.4 Objectives Of Human Resource Management
1.5 Functions Of Human Resource Management
1.6 Importance Of Human Resource Management
1.7 New Role Of Human Resource Management
1.8 Environmental Factors Effecting HRM
1.9 Function Of HR Department
Chapter2 Human Resource Management In Banking
2.1 HR Practices And Methods
2.2 Importance Of HRM In Banks
2.3 How To Manage Human Resource In Banks
Chapter3 Human Resource Management In SBI
3.1 SBI Introduction
3.2 Role Of HR In Transformation Of SBI
3.3 Conception Of Parivartan
3.4 Result Of Parivartan
3.5 Human Resource Management In SBI
3.6 Strategic Training Unit
Conclusion
Bibliography

Page No
5-22
5
7
8
10
12
15
16
18
21
23-26
24
25
26
27-36
27
29
31
22
33
35
37
38

CHAPTER 1: HUMAN RESOURCE MANAGEMENT

INTRODUCTION
Human resource management (HRM, or simply HR) is a function in organizations designed to
maximize employee performance in service of their employers strategic objectives. HR is
primarily concerned with how people are managed within organizations, focusing on policies and
systems. HR departments and units in organizations are typically responsible for a number of
activities, including employee recruitment, training and development, performance appraisal, and

rewarding (e.g. managing pay and benefit systems). HR is also concerned with industrial
relations, that is, the balancing of organizational practices with regulations arising from
collective bargaining and governmental laws.
HR is a product of the human relations movement of the early 20th century, when researchers
began documenting ways of creating business value through the strategic management of the
workforce. The function was initially dominated by transactional work, such as payroll and
benefits administration, but due to globalization, company consolidation, technological
advancement, and further research, HR now focuses on strategic initiatives like mergers and
acquisitions, talent management, succession planning, industrial and labor relations, and
diversity and inclusion.
In startup companies, HR's duties may be performed by trained professionals. In larger
companies, an entire functional group is typically dedicated to the discipline, with staff
specializing in various HR tasks and functional leadership engaging in strategic decision making
across the business. To train practitioners for the profession, institutions of higher education,
professional associations, and companies themselves have created programs of study dedicated
explicitly to the duties of the function. Academic and practitioner organizations likewise seek to
engage and further the field of HR, as evidenced by several field-specific publications. HR is
also a field of research study that is popular within the fields of management and
industrial/organizational psychology, with research articles appearing in a number of academic
journals, including those mentioned later in this article.
In the current global work environment, most companies focus on lowering employee turnover
and retaining the talent and knowledge held by their workforce. New hiring not only entails a
high cost but also increases the risk of the newcomer not being able to replace the person who
was working in that position before. HR departments also strive to offer benefits that will appeal
to workers, thus reducing the risk of losing knowledge.

DEFINITION AND MEANING

Edwin B. Flippo
Human Resource Management is the planning, organizing, directing and controlling of the
procurement development, compensation, integration, maintenance and reproduction of human
resources to the end that individual, organizational and societal objectives are accomplished
The functional area of management which is concerned with human elements in the organization
is known as Human Resource Management (HRM).

Human Resource Management (HRM) is a relatively new approach to managing people in any
organisation. People are considered the key resource in this approach. it is concerned with the
people dimension in management of an organisation. Human Resource Management is a process,
which consists of four main activities, namely, acquisition, development, motivation, as well as
maintenance of human resources. Human Resource Management is responsible for maintaining
good human relations in the organisation. It is also concerned with development of individuals
and achieving integration of goals of the organisation and those of the individuals.

NATURE OF HUMAN RESOURCE MANAGEMENT

A manager to get the best of his people must undertake the basic responsibility of selecting
people who will work under him and to help develop, motivate and guide them. However, he can
take the help of the specialised services of the personnel department in discharging this
responsibility.
The nature of the human resource management has been highlighted in its following features:
1. Inherent Part of Management: Human resource management is inherent in the process of
management. This function is performed by all the managers throughout the organisation rather

that by the personnel department only. If a manager is to get the best of his people, he must
undertake the basic responsibility of selecting people who will work under him.
2. Pervasive Function: Human Resource Management is a pervasive function of management. It
is performed by all managers at various levels in the organisation. It is not a responsibility that a
manager can leave completely to someone else. However, he may secure advice and help in
managing people from experts who have special competence in personnel management and
industrial relations.
3. Basic to all Functional Areas: Human Resource Management permeates all the functional
area of management such as production management, financial management, and marketing
management. That is every manager from top to bottom, working in any department has to
perform the personnel functions.
4. People Centered: Human Resource Management is people centered and is relevant in all
types of organisations. It is concerned with all categories of personnel from top to the bottom of
the organisation. The broad classification of personnel in an industrial enterprise may be as
follows: (i) Bluecollar workers (i.e. those working on machines and engaged in loading,
unloading etc.) and whitecollar workers (i.e. clerical employees), (ii) Managerial and non
managerial personnel, (iii) Professionals (such as Chartered Accountant, Company Secretary,
Lawyer, etc.) and nonprofessional personnel.
5. Personnel Activities or Functions: Human Resource Management involves several functions
concerned with the management of people at work. It includes manpower planning, employment,
placement, training, appraisal and compensation of employees. For the performance of these
activities efficiently, a separate department known as Personnel Department is created in most of
the organizations.
6. Continuous Process: Human Resource Management is not a one shotfunction. It must be
performed continuously if the organisational objectives are to be achieved smoothly.
7. Based on Human Relations : Human Resource Management is concerned with the
motivation of human resources in the organisation. The human beings cant be dealt with like
physical factors of production. Every person has different needs, perceptions and expectations.
The managers should give due attention to these factors. They require human relations skills to
deal with the people at work. Human relations skills are also required in training performance
appraisal, transfer and promotion of subordinates.

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OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

The objectives of Human Resource Management, in an organisation, is to obtain maximum
individual development, desirable working relationships between employers and employees and
employees and employees, and to affect the moulding of human resources as contrasted with
physical resources.

11

The basic objective of human resource management is to contribute to the realisation of the
organisational goals. However, the specific objectives of human resource management are as
follows :

To ensure effective utilisation of human resources, all other organisational resources will

be efficiently utilised by the human resources.

To establish and maintain an adequate organisational structure of relationship among all
the members of an organisation by dividing of organisation tasks into functions, positions
and jobs, and by defining clearly the responsibility, accountability, authority for each job

and its relation with other jobs in the organisation.

To generate maximum development of human resources within the organisation by

offering opportunities for advancement to employees through training and education.

To ensure respect for human beings by providing various services and welfare facilities

to the personnel.
To ensure reconciliation of individual/group goals with those of the organisation in such

a manner that the personnel feel a sense of commitment and loyalty towards it.
To identify and satisfy the needs of individuals by offering various monetary and
nonmonetary rewards.

In order to achieve the above objectives, human resource management undertakes the following
activities :

Human Resource Planning, i.e., determining the number and kinds of personnel required

to fill various positions in the organisation.

Recruitment, selection and placement of personnel, i.e. employment function.
Training and development of employees for their efficient performance and growth.
Appraisal of performance of employees and taking corrective steps such as transfer from

one job to another.

Motivation of workforce by providing financial incentives and avenues of promotion.
Remuneration of employees. The employees must be given sufficient wages and fringe
benefits to achieve higher standard of living and to motivate them to show higher
productivity.

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FUNCTIONS OF HUMAN RESOURCE MANAGEMENT

The main functions of human resource management are classified
into two categories:
(a) Managerial Functions (b) Operative Function
(a) Managerial Functions
Following are the Managerial Functions of Human Resources Management.

13

1. Planning : The planning function of human resource department pertains to the steps taken in
determining in advance personnel requirements, personnel programmes, policies etc. After
determining how many and what type of people are required, a personnel manager has to devise
ways and means to motivate them.
2. Organisation : Under organisation, the human resource manager has to organise the operative
functions by designing structure of relationship among jobs, personnel and physical factors in
such a way so as to have maximum contribution towards organisational objectives. In this way a
personnel manager performs following functions :

preparation of task force;

allocation of work to individuals;
integration of the efforts of the task force;
coordination of work of individual with that of the department.

3. Directing : Directing is concerned with initiation of organised action and stimulating the
people to work. The personnel manager directs the activities of people of the organisation to get
its function performed properly. A personnel manager guides and motivates the staff of the
organisation to follow the path laid down in advance.
4. Controlling : It provides basic data for establishing standards, makes job analysis and
performance appraisal, etc. All these techniques assist in effective control of the qualities, time
and efforts of workers.

(b) Operative Functions

The following are the Operative Functions of Human Resource Management
1. Procurement of Personnel : It is concerned with the obtaining of the proper kind and number
of personnel necessary to accomplish organisation goals. It deals specifically with such subjects
as the determination of manpower
requirements, their recruitment, selecting, placement and orientation, etc.
2. Development of Personnel : Development has to do with the increase through training, skill
that is necessary for proper job performance. In this process various techniques of training are

14

used to develop the employees. Framing a sound promotion policy, determination of the basis of
promotion and making performance appraisal are the elements of personnel development
function.
3. Compensation to Personnel : Compensation means determination of adequate and equitable
remuneration of personnel for their contribution to organisation objectives. To determine the
monetary compensation for various jobs is one of the most difficult and important function of the
personnel management. A number of decisions are taken into the function, viz., job evaluation,
remuneration, policy, inventive and premium plans, bonus policy
and co-partnership, etc. It also assists the organisation for adopting the suitable wages and
salaries, policy and payment of wages and salaries in right time.
4. Maintaining Good Industrial Relation : Human Resource Management covers a wide field.
It is intended to reduce strifies, promote industrial peace, provide fair deal to workers and
establish industrial democracy. It the
personnel manager is unable to make harmonious relations between management and labour
industrial unrest will take place and millions of man days will be lost. If labour management
relations are not good the moral condition of the employee will suffer, and it will be a loss to an
organisation. Hence, the personnel manager must create harmonious relations with the help of
sufficient communication system and co-partnership.

5. Record Keeping : In record keeping the personnel manager collects and maintains
information concerned with the staff of the organisation. It is essential for every organisation
because it assists the management in decision making such as in promotions.
6. Personnel Planning and Evaluation : Under this system different type of activities are
evaluated such as evaluation of performance, personnel policy of an organisation and its
practices, personnel audit, morale, survey and performance appraisal, etc.

15

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Importance of human resource management is in reality the importance of labour functions of
personnel department which are indispensable to the management activity itself. Because of the
following reasons human resource management holds a place of importance.
It helps management in the preparation adoption and continuing evolution of personnel
programmes and policies.
It supplies skilled workers through scientific selection process.
It ensures maximum benefit out of the expenditure on training and development and
appreciates the human assets.
It prepares workers according to the changing needs ofindustry and environment.

16

It motivates workers and upgrades them so as to enable them to accomplish the

organisation goals.
Through innovation and experimentation in the fields of personnel, it helps in reducing
casts and helps in increasing productivity.
It contributes a lot in restoring the industrial harmony and healthy employer-employee
relations.
It establishes mechanism for the administration of personnel services that are delegated to
the personnel department.

NEW ROLE OF HUMAN RESOURCE MANAGEMENT

Human Resource Management in the New Millenium has undergone a great revolution by
questioning the accepted practices and reinventing the organisations as well as structures. Many
traditional practices have been thrown out. As an example, it can be seen that hierarchies are
vanishing and there is greater emphasis on flat organisations. It means a great deal of
specialisation and skills. It also means upgrading the norms and standards of work as well as
performance. The new role of human resource management is much more strategic than before.
Some of the new directions of the role of HRM can be summed up as follows:
1. A Facilitator of Change: To carry people through upheaval requires the true management of
human resources.

17

2. An Integrated Approach to Management: Rather than being an isolated function, human

resource is regarded as a core activity, one which shapes a companys values. In particular, this
can have an impact on customer service.
3. A Mediator: Establishing and balancing the new and emerging aspirations and requirements
of the company and the individual.
These changes, which are taking place, involve more commitment of the organisation to the
development of people by improving performance and cutting costs. As a result of this, the
duration of tenure, which was traditionally longstanding, is now limited, future is becoming less
certain, management opportunities are self determined and motivational factors are more
concerned with enhancing future employability rather than loyalty to the company and, at the
same time, the rewards are going up in terms of higher salaries. The future creative careers, will
require more involved approach to career development, which will include :
Share employees with strategic partner organisations (customers of suppliers) in lieu of
internal moves.
Encourage independence: Employees may go elsewhere for career development, possibly
to return in a few years.
Fund groups of employees to setup as suppliers outside the organisation.
Encourage employees to think of themselves as a business and of the organisations
various departments as customers.
Encourage employees to develop customers outside the organisation.
Help employees develop self marketing, networking and consultancy skills to enable
them to search out, recognise or create new opportunities for both themselves and the
organisation. Identify skilled individuals in other organisations who can contribute on a
temporary project basis or part-time.
Regularly expose employees to new people and ideas to stimulate innovation.
Balance external recruitment at all levels against internal promotion to encourage open
competition, competitive tendering for jobs to discourage seeing positions as someones
territory which causes self protective conformity.
Forster more cross functional teamwork for self development.

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ENVIRONMENTAL FACTORS AFFECTING HRM

When it comes to human resource management there are several factors that affect day-to-day
operations. Adapting in this field is important because at a moments notice new legislation can
be passed with an immediate effective date or corporate polices are changed where human
resources feels the brunt. A well-developed strategy for human resources department takes into
consider external factors that might affect the department.
4 External Factors that Affect Human Resource Management
Government Regulations With the introduction of new workplace compliance standards your
human resources department is constantly under pressure to stay within the law. These types of
regulations influence every process of the HR department, including hiring, training,

19

compensation, termination, and much more. Without adhering to such regulations a company can
be fined extensively which if it was bad enough could cause the company to shut down.
Economic Conditions One of the biggest external influences is the shape of the current
economy. Not only does it affect the talent pool, but it might affect your ability to hire anyone at
all. One of the biggest ways to prepare against economic conditions is to not only know whats
happening in the world around you, but also create a plan for when there is an economic
downturn. All companies can make due in a bad economy if they have a rainy day fund or plan to
combat the harsh environment.
Technological Advancements This is considered an external influence because when new
technologies are introduced the HR department can start looking at how to downsize and look for
ways to save money. A job that used to take 2-4 people could be cut to one done by a single
person. Technology is revolutionizing the way we do business and not just from a consumer
standpoint, but from an internal cost-savings way.

Workforce Demographics As an older generation retires and a new generation enters the
workforce the human resources department must look for ways to attract this new set of
candidates. They must hire in a different way and offer different types of compensation packages
that work for this younger generation. At the same time, they must offer a work environment
contusive to how this generation works.
Those involved in human resource management does more than hiring and firing, they make sure
that every type of external influence is listened to and proper procedures are followed to avoid
lawsuits and sanctions.

20

FUNCTIONS OF HUMAN RESOURCE DEPARTMENT

Recruitment
The success of recruiters and employment specialists generally is measured by the number of
positions they fill and the time it takes to fill those positions. Recruiters who work in-house -- as
opposed to companies that provide recruiting and staffing services -- play a key role in
developing the employer's workforce. They advertise job postings, source candidates, screen
applicants, conduct preliminary interviews and coordinate hiring efforts with managers
responsible for making the final selection of candidates.
Safety
Workplace safety is an important factor. Under the Occupational Safety and Health Act of 1970,
employers have an obligation to provide a safe working environment for employees. One of the
main functions of HR is to support workplace safety training and maintain federally mandated

21

logs for workplace injury and fatality reporting. In addition, HR safety and risk specialists often
work closely with HR benefits specialists to manage the company's workers compensation
issues.
Employee Relations
In a unionized work environment, the employee and labor relations functions of HR may be
combined and handled by one specialist or be entirely separate functions managed by two HR
specialists with specific expertise in each area. Employee relations is the HR discipline
concerned with strengthening the employer-employee relationship through measuring job
satisfaction, employee engagement and resolving workplace conflict. Labor relations functions
may include developing management response to union organizing campaigns, negotiating
collective bargaining agreements and rendering interpretations of labor union contract issues.

Compensation and Benefits

Like employee and labor relations, the compensation and benefits functions of HR often can be
handled by one HR specialist with dual expertise. On the compensation side, the HR functions
include setting compensation structures and evaluating competitive pay practices. A comp and
benefits specialist also may negotiate group health coverage rates with insurers and coordinate
activities with the retirement savings fund administrator. Payroll can be a component of the
compensation and benefits section of HR; however, in many cases, employers outsource such
administrative functions as payroll.
Compliance
Compliance with labor and employment laws is a critical HR function. Noncompliance can result
in workplace complaints based on unfair employment practices, unsafe working conditions and
general dissatisfaction with working conditions that can affect productivity and ultimately,
profitability. HR staff must be aware of federal and state employment laws such as Title VII of

22

the Civil Rights Act, the Fair Labor Standards Act, the National Labor Relations Act and many
other rules and regulations.
Training and Development
Employers must provide employees with the tools necessary for their success which, in many
cases, means giving new employees extensive orientation training to help them transition into a
new organizational culture. Many HR departments also provide leadership training and
professional development. Leadership training may be required of newly hired and promoted
supervisors and managers on topics such as performance management and how to handle
employee relations matters at the department level. Professional development opportunities are
for employees looking for promotional opportunities or employees who want to achieve personal
goals such as finishing a college degree. Programs such as tuition assistance and tuition
reimbursement programs often are within the purview of the HR training and development area

CHAPTER 2: HUMAN RESOURCE MANAGEMENT IN BANKING

The core function of HR in banking industry is to facilitate the performance improvement among
its people. Factors such as skills, attitudes and knowledge of personnel, play a critical role in
determining the competitiveness within the organization or the industry. The quality of human
resources indicates the ability of banks to deliver the value to clients or customers. Indian
banking industry has been an important driving force behind the nations economic development.
The emerging environment poses both opportunities and threats, particularly to the public sector
banks, as well as the human resource in changing economic and business environment. The
primary emphasis needs to be on integrating human resource strategies with the business
strategy. Above the aspects of recruitment, placement, performance management, rewards and
employee relations - a radical transformation of the existing personnel structure in public sector
banks like the seniority over performance is not the best environment for attracting the best talent
from the young competitive environment. However, recruitment practices as well as on-the-job-

23

training and redeployment are considered as one of those many improvements of HR in Indian
Banks.

HR PRACTICES AND METHODS

A key focus of the human resource management is highlighted in the role of staffing,
performance management, training and development, and compensation that plays indifferent
types of business strategies. With the acquisition and preparation of human resources, including
planning, recruitment, selection, and training can affect the whole organizational performance.
The HR planning, the start of the strategy, illustrates the process of developing human resource
plan. The strengths and weaknesses of staffing options such as outsourcing, use of contingent
workers, and downsizing are involved in planning. The recruitment process is done strategically
to determine the talented employee fit for the position. The selection process emphasizes the
ways in minimizing errors in employee selection and placement to improve the companys
competitive position. The selection method standards such as validity and reliability are utilized.
An effective training systems of the managers role in determining employees readiness for
training, creating a positive learning environment, and ensuring the training is used on the job.

24

Beyond the human resource strategies are the rewarding and compensating that can strengthen or
weaken the employee effectiveness. In order to give recognition and increase motivational levels
amongst the employees, some Banks linked the individual performance in an incentive scheme
or for some rewards that may come into any form .In summary, all of the HRM strategies and
function should be aligned to help the company meet its objectives as well as focusing on their
customers . The best practice approach assert that certain HR practices are found to consistently
lead to higher organizational performance, independent of an organizations stated strategy. The
high performance HR practices foster innovation through the development of innovation values,
encouraging of information sharing, goal setting and appropriate training and development.

IMPORTANCE OF HRM IN BANKS

Human Resource Management is important for banks because banking is a service industry.
Management of people and management of risk are two key challenges facing banks. How you
manage the people and how you manage the risks determines your success in the banking
business. Efficient risk management may not be possible without efficient and skilled manpower.
Banking has been and will always be a "People Business". Though pricing is important, there
may be other valid reasons why people select and stay with a particular bank. Banks must try to
distinguish themselves by creating their own niches or images, especially in transparent
situations with a high level of competitiveness. In coming times, the very survival of the banks
would depend on customer satisfaction. Those who do not meet the customer expectations will
find survival difficult. Banks must articulate and emphasize the core values to attract and retain
certain customer segments. Values such as "sound", "reliable", "innovative", "international",

25

"close", "socially responsible", "Indian", etc. need to be emphasized through concrete actions on
the ground and it would be the banks human resource that would deliver this.
It is a common complaint among bank executives that skilled manpower is in short supply. HR
resources are becoming scarce both in quality and quantity. And, it is quite elementary that any
resource that is in short supply needs to be properly managed for the benefit of society. The
entire spectrum of HR practice requires revolutionary changes if the banks have to survive.
Managing the people is the key challenge. And discrimination is the key word when dealing with
people.

HOW TO MANAGE HUMAN RESOURCES IN BANKS

The following are the various aspects through which human resource can be managed in the
banks:
1. Planning: While planning the people requirement it is very important to develop the
employer brand, that is, reputation as an employer to attract, engage and retain talented
candidates and employees. Banks will have to plan for the following:
A steady, carefully calibrated recruitment programme,
As rapid technological changes transform business continuous skill up gradation.
A new generation of the workforce will be working alongside an older generation as a
team. Banking, in my opinion is a team work and this new situation will require
cultural adjustments and therefore, change management.
2. Acquiring the right people: Banks need to seriously look at lateral recruitment as an
option to induct specialists at various levels with specific skill sets and experience pool.

26

While we have often heard of people leaving banks to join finance, legal, accounting
firms, etc. seldom have we heard of people leaving these professions to join banks. This,
needs to change. The right people will come only if they are paid competitive salaries.
However, too much pay also involves moral hazard issues and invites adverse attention of
external stakeholders. There has to be discrimination in salaries of people
3. Retaining the people: We may be able to get the most suited people for our work but
then the challenge is to retain these people and to develop them. There are several
dimensions to this issue such as training/ re skilling of employees, performance
measurement, promotion policy, transfer policy, talent management, communication, etc.

CHAPTER 3: HUMAN RESOURCE MANAGEMENT IN SBI

STATE BANK OF INDIA
State Bank of India (SBI) is a multinational banking and financial services company based in
India. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As
of December 2012, it had assets of US$501 billion and 15,003 branches, including 157 foreign
offices, making it the largest banking and financial services company in India by assets.
The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding
in 1806 of the Bank of Calcutta, making it the oldest commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two presidency banksBank of Calcutta
and Bank of Bombayto form the Imperial Bank of India, which in turn became the State Bank
of India. Government of India nationalised the Imperial Bank of India in 1955, with Reserve
Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the

27

government took over the stake held by the Reserve Bank of India. SBI was ranked 285th in the
Fortune Global 500 rankings of the world's biggest corporations for the year 2012.
SBI provides a range of banking products through its network of branches in India and overseas,
including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal
Offices that are located at important cities throughout the country.
SBI is a regional banking behemoth and has 20% market share in deposits and loans among
Indian commercial banks.
The State Bank of India was named the 29th most reputed company in the world according to
Forbes 2009 rankings[4] and was the only bank featured in the "top 10 brands of India" list in an
annual survey conducted by Brand Finance and The Economic Times in 2010.

Non-banking subsidiaries
Apart from its five associate banks, SBI also has the following non-banking subsidiaries:

SBI Capital Markets Ltd

SBI Funds Management Pvt Ltd

SBI Factors & Commercial Services Pvt Ltd

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

SBI DFHI Ltd

SBI Life Insurance Company Limited

SBI General Insurance

28

In March 2001, SBI (with 74% of the total capital), joined with BNP Paribas (with 26% of the
remaining capital), to form a joint venture life insurance company named SBI Life Insurance
company Ltd. In 2004, SBI DFHI (Discount and Finance House of India) was founded with its
headquarters in Mumbai.

ROLE OF HR IN TRANSFORMATION OF STATE BANK OF INDIA

The process of transformation started with the identification of various internal factors that were
responsible for poor performance of the bank as follows: Poor Customer Service: With years of
dominance in the market the employees had developed a feeling of indifference to the needs of
the customers. The mentality of the employees was that the business will come to them; they had
no need to attract the customers as there was no other institution in play. But with the private
banks coming into play, there was a change in the environment, customers became the king.
Transformation had to start from changing this notion of the employees engrained in their mind
due to decade of dominance. The need was a change in the outlook of the vast workforce. It was
observed that in some branches the work of the customers were not completed promptly and they
were made to come again and again. With the change in the environment the customer had

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paradigm shift in its attitude; they wanted better services and prompt dealing of their grievances.
The bank employees unaware of the changes were working on the same pattern. Poor branch
ambience: The bank was mostly operating in the ambience which was not customer friendly. The
space available to the customers was much less than the space available for banks work area.
There were no proper seating arrangement for the customers, no queue management system and
no drinking water facility. On the other hand all these facilities were provided by the private
banks as they were more sophisticated, modern and customer oriented. Technology not yet
stabilized: On the technological front the bank was far behind as most of the staff was not very
much conversant with the use of computers. Bank had to pave its way to the use of better
technology, core banking system and internet banking. Most of the staff had no exposure to work
in a computerized environment and many of them had not used even mouse. There was a huge
gap of skills and knowledge adversely affecting the customer services. Rigid internal procedures:
The internal process and procedures adopted by the bank were not in sync with the changing
environment. The private banks were faster in business booking unlike the Bank which followed
age old procedures that demanded a change.
The process of transformation started in early September 2006 at the resort of Aamby
valley with the meeting of the senior management following a top down approach keeping in
mind the huge size of the organization. The major focus was to become a customer oriented and
the most tech savvy bank and then to regain the leadership over the market which was slowly
slipping away. A need of change in the mindset of more than two lakh employees was required
that had deepened their roots for two centuries. It was recognized that poor internal
communication was a major hurdle and a platform was needed where the problems within the
organizations can be discussed. The Aamby valley meeting provided that platform where the top
executives were made aware of the problems and the challenges of the organization, After the
sessions the executives were asked to vote for the areas which needed reforms. According to
their voting seven areas were identified
1. Energizing employees.
2. Providing consistent and reliable customer service.
3. Accessing the new middle class.
4. Pushing for aggressive consolidation.
5. New and upgraded technology.

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6. Building of profitable global treasury.

7. Reenergizing the branch / distribution network.
Another problem the bank faced was of the leadership pool as most of the top
management had become an ageing group and the need of young, energetic, professional staff
was felt. The HR has to be revitalized as it was not able to deliver for the development of the
staff and incentive system had completely become ineffective. The staff was highly demotivated
and had grudges that 15% of the staff does 85% of the work. The salaries were too low for the
managerial level to provide any motivating factor. Union was another hurdle which protected the
employees.

CONCEPTION OF PARIVARTAN
Working upon the transformation agenda it was recognized that the people were SBIs
greatest asset and the real problem. Employees in the organization had low morale and a
complete change in the attitude was required. The change must not be forced it must come for
within. The frontliners shall put customers before the processes and the middle level shall keep
the performance targets in mind. Efforts were made to find out the solution for the question as to
why shall an employee change, coming out of their comfort zone, to willfully serve the customer
when there is lack of monetary incentive. One thing was for sure that the people working in the
organization had a great potential, the need was to make them aware of their power. The
workshop named PARIVARTAN was specifically designed to create a sense of team spirit among
the employees and the campaign was started first to cover the junior executives and the clerical

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staff that came out to 1,38,000 employees. The challenge was to prepare a very strong message
not just the sharing of facts but something that could really bring a permanent change in
their attitude. It was decided to host a two day workshop covering various aspects for behavioral
change comprising of eight segments and four objectivesto sensitize the staff about the
transformation efforts, to energize them to become a change agent, to help them to become more
customer friendly and to foster a sense of inclusiveness The programme had to be started
simultaneously at different centers as isolated efforts would have lost the gravity of the message.

RESULTS OF PARIVARTAN
PARIVARTAN was a team thinking platform but was not a regular exercise but aggressive
enough to had a tremendous effect on the employees. It touched the core of every employee
forcing them to think about the way they behave, their attitude towards work. Thousands of
unsolicited letters from the employees across the country with positive response shows the
success of the programme. Based on a questionnaire survey of SBI customers it was found that
the programme had a biggest effect on the various aspects of the employees. Over 48%
customers agreed about the fact that there has been an improvement in the employees as far as
updating them about the new products and services are concerned. Over 28% agreed that the
employees gave more attention than before. There were 24 aspects that were examined and most

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of them provided a positive result. By an SBI inspection team it was examined that maximum
improvement was evident in the Kolkata circle while the southern circles Bangalore, Chennai,
Hyderabad, Kerala did best in the overall customer service levels

HUMAN RESOURCE MANAGEMENT IN SBI

Human resources are very important part because of the people intensive nature of the banking
industry. In order to take full advantage of the expansion of the branch network and also to
mitigate staff shortage, particularly at the rural and semi urban branches, the bank added 20682
new Assistants. More than 30 lakhs candidates appeared for the test and the bank chose the best
and the brightest candidates. The bank also advertised for recruitment of 1500 probationary
officers and an unprecedented 17 lakhs candidates applied for the same. This only shows that the
bank is now the employer of choice of the young and educated population of the country.
Improvement In The Employee Productivity

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The large scale recruitment of Gen-next employees in the officers as well as in the assistant
grade have not only brought a far reaching attitudinal change among staff in their customer
interface and services across the branches, it has also become a catalyst in enhancing/ improving
the productivity and efficiency of the employees, thereby resulting in increasing growth in the
business and profitability for the bank. Consequently, both business par employee and also profit
per employee went up significantly.
Improvement In Work Culture
The management initiated administrative action against frivolous agitations by certain categories
of officers. State bank officers are on the best terms and conditions among all the banks in the
public sector. It is ironic that still some officers chose to conduct agitation only in SBI to the
exclusion of other banks. The bank is a caring and considerate employer. Therefore there is no
case of disruptive agitation exclusively in SBI , when issues are to be decided at industry level.
Consequent upon the above administrative actions, the demonstrations within the bank premises
have stopped.
Periodic consultative meeting are held with Officers Associations/ Staff Unions and the SC-ST
Staff Welfare Association as part of the constructive dialogue for understanding and addressing
grievances of various categories of employees. These consultations are don both at Corporate
Centre as also at Circles.

Reservation In Employment
Category
Officers
Assistants
Staff
Total

Total
80796
109686
37814
228296

SC
13824
18226
11500
43550

ST
5215
8745
2804
16764

PWD
485
1724
193
2402

Bank provides reservation to SC, ST and persons with disability (PWD) as per Government Of
India directives. In order to deal with issues relating to reservation policy and effectively redress

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the grievances of the SC/ ST employees, Liaison Officers have been designated at all Local Head
Offices of the bank as also at the Corporate Centre at Mumbai.
Other Initiatives
Several perquisites like leased accommodations, provision of mobile phones, Group Insurance
etc were significantly improved for all categories of staff during the year, which besides, being a
great motivational factor in improving the employee productivity, were indicative of a health
employer employee relationship.
Inter circle Tournaments were also successfully arranged in the field of Hockey, Volleyball and
Basketball at Bhopal, Chennai and Hyderabad respectively with some active participation by the
employees representing all the 14 Circles.

STRATEGIC TRAINING UNIT(STU)

The banks training apparatus comprises of the following:
Apex Training Institutions (ATI): State Bank Staff College- Hyderabad, State Bank
Academy- Gurgaon, State Bank Foundation Institute (Chetana)- Indore, State Bank Institute
of Rural Development- Hyderabad, Stat Bank Institute of Information and Communication
Management- Hyderabad.
State Banks Learning Centres: 47 Learning Centres spread across 19 states of the country.
Further the bank has acquired 10 acre of land in the prime institutional area at Rajarhat New
Town, Kolkata from WBHIDCO (West Bengal Housing Infrastructure Development
Corporation Ltd). Efforts are under way to construct a state of art full scale apex training

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centre. This would help correct regional imbalances as participants from eastern and northern
would not have to travel long distance for undergoing training.
In order to raise the standards of training and also to familiarize the Bank officials in the new and
sophisticated techniques of financial management like mergers, acquisitions overseas and also
in-depth analysis of financial statements, the bank has taken the help of outside experts, who
along with senior retired officers, are conducting advance training courses for officials handling
credit and faculty members, for imparting sophisticated learning. The aspirations is that the
faculty at the training institute should progressively be able to customize these programs and
conduct in house training.

Training Overseas

MD/ DMD
CGM
GM
DGM
Total

Overseas training
18
37
29
9
93

Training institutes in India

62
228
290

Recognizing the need for more advanced training and particularly in the areas of strategic
management, which may not be completely provided by the Banks inhouse training apparatus,
the Bank deputed its Senior executives for training in short duration Executive Development
Programmes to reputed institutes both in India and overseas.

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The policy of the Bank is that every single employee in every grade must attend at least one
training program every year. 1.76 lakh employees have been given institutional training during
the year covering 90% of the Officers and 60% of the Assistants.

CONCLUSION
Management of human resource in the future will be more complicated than it is today. Many of
the new generation of employees will be more difficult to motivate than their predecessors. This
will be in part the result of a change in value systems coupled with rising educational levels.
Greater skepticism concerning large organisations and less reverence for authority figures will be
more common. Unquestioning acceptance of rules and regulations will be less likely
Today, SBI focus on designing programs and process and services to attract, develop and retain
top talent. Utilizing the latest technologies HR team has launched sophisticated online systems
that provide the employees with details on benefits, compensation, special programs and internal
job opportunities. As a global employee population continues to grow, these cutting edge
activities are increasingly important to the deliver world-class HR solution. The core function of
HRD in the banking industry is to facilitate performance improvement, measured not only in

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terms of financial indicators of operational efficiency, but also in terms of the quality of financial
services provided. Factors like skills, attitudes and knowledge of the human capital play a crucial
, role in determining the competitiveness of the financial sector. The quality of human resources
indicates the ability of banks to deliver value to customers. Capital and technology are replicable
but not the human capital which needs to be valued as a highly valuable resource for achieving
that competitive edge. The primary emphasis needs to be on integrating human resource
management strategies with the business strategy. HRM strategies include managing change,
creating commitment, achieving flexibility and improving teamwork. The other processes
representing the overt aspects of HRM are recruitment, placement and performance
management.

BIBLIOGRAPHY

Annual report-SBI
https://www.sbi.co.in/user.htm
http://en.wikipedia.org/wiki/State_Bank_of_India
http://www.citehr.com/research.php?q=HR-practices-at-state-bank-of india
https://hrms.onlinesbi.com/irj/portalapps/com.hrmsin.html

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