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ICICI Bank.
Secondary objectives: To study the various types of performance appraisal system.
banking scenario.
government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country.
Central banking is the responsibility of the Reserve Bank of India, which
in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions.
After India's independence in 1947, the Reserve Bank was nationalized
sector banks (that is with the Government of India holding as take), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks.
They have a combined network of over 53,000 branches and17,000ATMs.
legislature & framing policy govt. through its budget affects the banking activities securitization act has given more power to banking sector against defaulting borrowers.
ii)
Budget & budget measures Increase farm credit Subvention of 1% to be paid as incentives to farmers.
iii) Foreign Direct Investment limits The move to increase FDI limits to 49% from 20% during the first
quarter of this fiscal came as a welcome announcement to foreign players waiting to get a foothold on Indian Markets.
ECONOMIC FACTORS
Every year RBI declares its 6 months policies & accordingly the various measures and rates are implemented which has an impact on the banking sector.
In past 24 months RBI has changed its key monetary rates 13 times
economy by giving certain concessions or facilities. If in savings are encouraged, then more deposits will be attracted towards the banks and in turn they can lend more money to the agriculture sector & industrial sector, therefore booming the economy.
If the FDI limits are relaxed, then more FDI are brought in India
SOCIO-CULTURE FACTORS TRADITIONAL MAHAJAN PRATHA Before birth of banks people used to borrow money from local moneylenders,
shahukars, shroffs.
CHANGE IN LIFESTYLE
Lifestyle of people is changing rapidly & they are demanding high class
products. They have become more advanced. So banking sectors have great opportunities.
POPULATION
Increase in population is one of the most important factor, which affect the
private sector banks. Banks would open their branches after looking into the population demographics of the area.
LITERACY RATE Literacy rate in India is very low compared to developed countries. Illiterate
people hesitate to transact with banks. So this impacts negatively on banks. But there is a positive side as well i.e., illiterate people trust more on banks to deposit their money, they do not have market information.
TECHNOLOGICAL FACTORS
introduced.
It include technological aspects such as R&D activity, automation,
in banking industry are :a) Automated Teller Machine (ATM) b) Automated Voice Recorder c) Credit Card Facilities d) IT Services & Mobile Banking
ENVIRONMENTAL FACTORS
Banking industry is directly related to the growth of economy. It is great news that today the service sector is contributing
more than half of the Indian GDP. It takes one step closer to the developed economies of the world.
This increases the avenues of investment by the industrial
sector. This would further increase the borrowings by the industry leading to the banking industry.
In regards to the service sector, as the income of the people
increases lending and savings will increase leading to increased business for the banks.
LEGAL FACTORS
Banking Industry :
a) BANKING REGULATION ACT In 1949, the Banking Regulation Act was enacted with
empowered the Reserve Bank of India to regulate, control & inspect the banks in India.
b) INTERVENTION BY RBI The RBI will intervene to smooth sharp movements in the rupee & prevent a downward spiral in its value, but will balance this with the need to retain reserves in the event of prolonged turbulence.
Public
NSE: SBIN BSE: 500112 LSE: SBID BSE SENSEX Constituent
Industry
Founded Headquarters Area served Key people Products Revenue Profit Total assets
Total equity
Owner(s) Employees
WEAKNESS
Lack
issues quickly due to higher job security and customers waiting period is long when compared to private banks.
SBI has the largest number of employees
in banking sector, hence the bank spends a considerable amount of its income in employees salary compensation.
In spite of modernization, the bank still
OPPORTUNITY
SBIs merger with five more banks
THREAT
Net profit of the year has decline
namely State Bank of Hyderabad, State bank of Patiala, State bank of Bikaner and Jaipur, State of bank of Travancore and State bank of Mysore are in approval stage.
share to its close competitor ICICI & Other private banks like HDFC, AXIS bank etc.
Customer prefer to switch to
of its banking operations, there is a better scope of using advanced technologies and software to improve customer relations.
Young
and talented pool of graduates and B schools are in rise to open new horizon to so called old government bank.
private banks and financial service providers for loans and mortgages, as SBI involves stringent verification procedures and take long time for processing.
ICICI BANK
Type
Traded as
Public
BSE : 532174 NSE : ICICI BANK NYSE : IBN BSE SENSEX Constitution Banking, Financial services 1955 Mumbai, Maharashtra, India Worldwide K.V. Kamath (Non-executive Chairman) & Chanda Kochhar (MD & CEO)
Products
Revenue
Credit cards, Consumer Banking, Corporate banking, Finance andinsurance, investment banking, mortgage loans, private banking, wealth management
US$ 13.52 billion (2012)
Profit
Total assets Total equity Employees
WEAKNESS
Customer support of ICICI section is not performing well in terms of resolving complaints. The ICICI bank has the most stringent policies in terms of recovering the debts and loans, and credit payments. They employ third party agency to handle recovery management.
One of the major strength of ICICI bank according to financial analysts is its strong and transparent balance sheet.
ICICI bank is the first bank in India to introduce complete mobile banking solutions and jewelry card. The bank has PAN India presence of around 2,567 branches and 8003 ATMs. ICICI bank is the first bank in India to attach life style benefits to banking services for exclusive purchases and tie-ups with best brands in the industry such as Nakshatra, Asmi, Ddamas etc. Good Marketing and advertising strategies.
There are also complaints of customer assault and abuse while recovering and the credit payment reminders are sent even before the deadlines which annoys the customers. The bank service comparatively higher.
charges
are
OPPORTUNITY
Banking sector is expected to
THREAT
RBI allowed foreign banks to
India are more than 1500. This can ensure regular supply of trained human power in financial products and banking services.
Within next four years ICICI bank
in urge of modernizing the capacities to ensure the customers switching to new age banks are minimized.
HDFC is the major competitor
for ICICI, and other upcoming banks like AXIS, HSBC impose a major threat.
In
Essay appraisal method Graphic rating scales Field review method Forced choice rating method Critical incident appraisal method Management by objectives Work standard approach Ranking methods Methods Alteration ranking - Paired comparison - Person-to-person rating - Checklist - Behaviorally anchored rating scales - Assessment centers
performance of the employees to the higher authorities like Deputy General Manager and General Manager.
The higher authorities then take appropriate decision regarding the
service of the employees and the amount of his contribution made towards the development of the business.
is judged on the following aspects and given points out of a total of 100 points.
Behavior Assistance and Implementation of Guidelines
Critical Performances
Work Analysis Responsibility & Risk Taking
method the subordinate in consultation with the supervisor chalks out short term objectives followed by specific actions that he has to carry out. The goals are finally set and are action oriented. The goals set are specific, measurable, achievable, review able and time bound and most importantly they use to be aligned with the goal of the organization. At the end of a specified time period, the activities are jointly reviewed by both the subordinate and his supervisor. Depending on the performance of the subordinate, the goals are modified or redesigned for the next period of time.
The annual Performance Appraisal is usually done in two steps. a) First, the employees and their manager complete the Performance Appraisal form doing a self assessment. Often the bank also uses 360 degree feedback process, asking for input from peers. b) Secondly, the bank employees and manager participate in a formal Performance Appraisal interview.
The appraisal form, used in the first step, consists of performance standards and criteria that are used to judge evaluate your performance. The items comprising your job description are usually the performance standards that are used in employees annual appraisal .
RESEARCH METHODOLOGY
DATA COLLECTION Qualitative Data Survey Questionnaires RESEARCH DESIGN
QUESTIONNAIRE
1. Are you aware about the banks performance appraisal system?
3. Does appraisal system of your bank facilitate career growth & learning?
4. Performance appraisal system really assesses the quality of an employee. Do you agree?
6. Are you aware of technique of Performance Appraisal being followed in your bank?
7. The present performance appraisal of your bank distinguishes the performers & non performers?
8. The periodical performance appraisal of employee is required for maintaining efficiency of individual in bank?
9. Are you aware of the basis or attributes on which your performance is appraised?
12. Performance appraisal is useful to the contributor to encourage people to perform better on their jobs?
13.The appraisal system is helping each employee to discover his/her potential & make their short comings?
14. The present performance appraisal of your bank assesses individual behavior, discipline, integration, communication skill, leadership qualities & growth?
18. How often did you speak, or discuss about your performance with your superiors?
19. Training & development programs improve the quality of the employees?
20. Do you think the present appraisal system of your bank is effective to increase your performance?
HYPOTHESIS TESTING
Z TEST
Null Hypothesis (H0) (1 - 2 = 0) - The Performance Appraisal is not
Sample 2 (SBI) x1 = 1.76 x2 = 1.2 S12 = 0.5044 S22 = 0.3941 n1 = 25 n2= 25 z = (x1 - x2) ( 1- 2) S12 / n1 + S22 / n2 = (1.76 1.2) (0) 0.5044 / 25 + 0.3941 / 25 = 2.95
RESULT OF Z TEST
Since the calculated value of z =2.95 > the critical or table
value 1.96 and it falls in the rejected region or area, thus we would reject null hypothesis i.e., the performance appraisal is not effective in both State Bank of India and ICICI Bank and accept the alternate hypothesis i.e. the performance appraisal is more effective in State Bank of India than in ICICI Bank.
So it results, that, The Performance Appraisal is more
CHI-SQUARE TEST
Null Hypothesis (H0) There
is no relationship between who should do the appraisal and the effectiveness of appraisal system to increase the performance.
between who should do the appraisal and the effectiveness of appraisal system to increase the performance.
Linear-by-Linear Association
N of Valid Cases
.038
25
.846
In Chi-Square test the crosstabs commands the rows include the Who should do
the appraisal and the columns include the Do you think the present appraisal system of your bank is effective to increase your performance.
The first line of the Chi-Square Tests table gives the results from the chi-
squared test of independence. The Asymp. Sig. in the Chi-Square Test is 0.421.
At the 95% confidence level, the exact test finds no evidence of an association
calculated value i.e., 0.421 is less than the tabulated value i.e., 1.145.
Therefore, accept H0 i.e., There is no relationship between who should do the
appraisal and the effectiveness of appraisal system to increase the performance and reject H1 i.e., There is relationship between who should do the appraisal and the effectiveness of appraisal system to increase the performance.
In Chi-Square test the crosstabs commands the rows include the Who should do
the appraisal and the columns include the Do you think the present appraisal system of your bank is effective to increase your performance.
The first line of the Chi-Square Tests table gives the results from the chi-
squared test of independence. The Asymp. Sig. in the Chi-Square Test is 0.249.
At the 95% confidence level, the exact test finds no evidence of an association
calculated value i.e., 0.249 is less than the tabulated value i.e., 1.145.
Therefore, accept H0 i.e., There is no relationship between who should do the
appraisal and the effectiveness of appraisal system to increase the performance and reject H1 i.e., There is relationship between who should do the appraisal and the effectiveness of appraisal system to increase the performance.
Bank of India is more effective then ICICI bank as per the response given by the respondents.
From the results of Chi-Square of SBI and ICICI bank it shows that we
accept null hypothesis i.e., there is no relationship between who should do the appraisal and the effectiveness of appraisal system to increase the performance and reject alternative hypothesis i.e., there is a relationship between who should do the appraisal and the effectiveness of appraisal system to increase the performance.
So it results, that, there is no relationship between who should do the
FINDINGS
CRITERIA Aware about the banks performance appraisal Performance appraisal is essential and also it facilitates career growth & learning Performance appraisal is based on Seniority Seniority & performance Counseling Formal Informal SBI ICICI BANK 100% 100% 100% 100%
96% 4%
76% 24%
44% 56%
72% 28%
Training & development programs improve the quality of the employees Strongly agree Agree
Present appraisal system is to a large extent effective to increase their performance Large extent Moderate extent Less extent
32% 68%
44% 56%
56% 44% 0%
28% 68% 4%
LIMITATIONS
Whenever the work is conducted by the human, there are errors or limitations to it. But as a matter of fact they could not be eliminated completely. There is no concrete basis to prove the response given is a true measure of the opinion of all the respondents as a whole.
I have tried my level best to remove errors and degrade the level of limitations. Though
there are some limitations related to my work as follows: Study is limited to selected banks and its branches. Problems with confidential information. Even after a lot of effort from my side some of the employees fear to supply the information or provided wrong information due to their level in company so the information provided by them may be inaccurate. The method used for taking out sampling size has its own limitations so that becomes my own limitation and so the sample size is limited to 100 respondents. The questionnaire contained mostly multiple-choice questions; therefore many respondents may not have given a proper thought before answering the questions. The response of the respondents may not be accurate thinking that the management might misuse the data and even most respondents might be influenced by their peers in answering the questions. Researcher has its own limitations while analyzing the data.
RECOMMENDATION
Findings suggest that the SBI performance appraisal process is
accomplished by using job dimensions as the critical behaviors on which to base the appraisal. Success is premised on the job analysis being current and an accurate reflection of the individuals job.
Numerical ratings may be utilized if anchored to specific job
training. This can be facilitated by including space on the form to prioritize training needs. Training is essential for appraiser biases to be reduced.
Appraisals need to be reviewed at more than one level. If an individual
reports to several different superiors, it is advisable to have each appraise the individual.
Instruments should include comment and summary sections for rater and
ratee.
Finally and most importantly, the appraisal process must be part of a total
management system which considers the needs of the agency as well as the public employee.
Performance Appraisal should be treated as an integral part of the bank
CONCLUSION
To summarize we can say that the Performance Appraisal an integral
bank to develop the capacity to meet these expectations and are given feedback on their performance.
and formulate the strategy for manpower planning and career development.
Performance appraisal directly affects the other sub system of
HRM such as manpower planning selection, career development, potential development, recruitment, compensation, etc.
Performance appraisal is a widen approach to guide the employees
in the right direction to achieve organizational as well as individual objectives mainly in banking sector because of the dominancy of personal skill and service level to interact with the customers.
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