07. SHRM will help you to shape up post-pandemic work environment.

HRM and post-pandemic changes 

Financial services providers have a jump-start when planning for the post-pandemic return of employees to the Sri Lankan banking and finance sector. Before the public health crisis upended life, The COVID-19 pandemic sparked even bigger changes. HRM has to create a hybrid working model that allows employees to perform their jobs remotely at least part of the time. Schedules will reflect employees’ roles, business requirements, and personal needs. Most of the banking sector HRD was already being renovated to provide greater flexibility, and now most of the company is considering how to adapt this for their other major business.

The pandemic dealt what is likely a serious blow to the five-day, 8-to-5, an in-office worker that has underpinned work-life for nearly a century. Flexibility had been seeping into the workplace, but now it’s flooding the corporate world as companies have discovered that remote work didn’t slash productivity and employees valued the arrangement. To be sure, such on-site businesses as hospitals, hotels, retail services, and manufacturing plants are less impacted. But even so, the banking and Finance sector impacts 50-50 to work remotely. While the transformation is occurring, many companies are still uncertain how to reorganize their existing offices and are avoiding major commitments while the situation is still in flux.

The HR Revolution to change.

With vaccine penetration approaching herd immunity levels, businesses rebounding and re-opening, and more optimism around a “return to normal” there is yet another pandemic looming that threatens business: A talent pandemic. The covid aftermath is impacting the enterprise’s most precious asset – its core talent. And top talent has an evolving, if not yet fully clear, framework of how they are defining their expectations for the new workplace. How companies recognize and address this will determine their ability to recover and move forward.

Now More Than Ever, SHRM Will Help You Shape the Future of Work

As the world gets back to work, we know it won’t be business as usual. HR leaders are the ones who will put workplaces back together with better than ever before practices and policies that will help employers and employees succeed. This is a key opportunity for our HR- profession and the purpose of HR's new ways, more than ever resource platform launching today. As an HR practitioner, HR managers spent the past year, demonstrating how vital your role is in the business. You (HRM) worked around the clock, took unprecedented measures to keep your employees safe, and ensured that the organization survived. Now, this is the time to be the Strategic leader who reshapes company values and enforces a commitment to putting employees first.

HR departments must find proper tools and pathways to help to navigate unforeseen challenges and changes, ensure colleagues treat each other as equals, retrain managers into effective leaders, redefine workplace culture, and inspire empathy in the workplace. Now more than ever the value of HR from both the CEO and HR leader’s perspective, Business, and more. SHRM is proud to highlight the singular role HR professionals will play in rebuilding businesses, reshaping company cultures, promoting previously untapped talent pools, advancing workplace equity, and so much more as we prepare for the post-pandemic world of work.

HRM has to show the world how HR is shaping the world of work now forever changed. SHRM is the partner HR professionals need now more than ever, as together they can cultivate a better tomorrow for work, workers, and the workplace. The HR team has to make their employees the most important stakeholders as we accelerate the recovery and revitalization of the world’s workplaces.

 

References:

01. Colarelli, S. M. 2003. No Best Way: An Evolutionary Perspective on Human Resource Management. Greenwich, CT: Praeger.

02. Way, S. A., Wright, P. M., Tracey, J. B., & Isnard, J. F. (2018). HR edibility: Precursors and the con-tangent impact on shrm financial performance. Human Resource Management. 

6. Beyond Cost-Cutting: Designing a strategy align with Risk Officers and HRM to boost returns.

 

Why Cost Cutting? 

Nowadays everybody in the banking sector talking about effects related to cost-cutting. The question is why any bank or financial organization need to reduce or cutting their expenses (Cost Cutting)?  If the Bank or any financial organizations struggling to improve its return on capital, many have to be forced to restructure and cut costs.

In this article, I’m trying to focus on how can bank think over about how it can best achieve its cost reduction measures in a sustainable, balanced way. The most important fact is each measure was devised to reduce the bank’s costs in the most effective way, while not damaging ongoing operations and the bank’s reputation amongst its customers.

Innovative and Strategic Ways.

• Assessing digital and operational maturity to eliminate non-value-added work, deflecting work to lower-cost channels, and driving automation to reduce processing costs.
•  Rationalizing and redirecting existing investment plans to better align with the bank’s digital and business needs.
•  Developing a governance model to drive global consistency, efficiently to achieve overall targets and allow for local customization.
•  Business realignment, the basic premise is to exit business lines that have high costs and low   margins and expand those lines that are inherently more cost-effective and profitable.
• Vendor relationships, improved vendor management is focused on deriving the greatest possible value from a vendor relationship. Important tools include using service-level agreements and vendor scorecards to monitor performance issues.

Banks seeking healthy profit margins must incorporate practical, cost-saving measures that boost banks’ digital capabilities and enable more flexible operating models which will allow for better customer service and greater reinvestment opportunities. And also risk officers must merge with the HRM team for analysis and make plans to face future challenges. With this in mind, Bank Risk Officers must ensure their approach to risk mitigation and HRD must carry out strategic plans to best positioned them to boost returns.  

Risk Officers and HRM must get together

In 2020, with this pandemic, we can see banks focusing their transformation agendas to streamline businesses and better serve customers. Against this background, banks need a strong control infrastructure to manage change and invest seriously in technology. For banks, the ability to continue to invest in digital transformation will depend on efforts now to improve profitability. Banks can learn lessons from peers that have consistently outperformed through driving efficiency, strengthening resilience, and creating a customer-centric culture.

The recession is an opportunity for HR professionals to step and contribute strategically. In the classical strategy paradigm, Risk Officers begin by looking at the economic environment and Then Risk Officers look at the effects on us and our competitors. Next, RO’s and HRD can establish which strategic factors HR influences directly. Finally, they can drop down to their tactics. The recession is about creative Human Resources Management. The HRM Function is asked to bring new ideas, to change the HRM Processes, and develop or change the procedures. And this effort has to be cheap or it has to cut the costs of the organization. HRM Innovation is easy in times of business growth, but the recession is not good for big innovative HRM Initiatives.

Innovative and Global HRM practices can drive through Beyond Cost-Cutting: boost returns.

The HR Management has to focus on unpopular innovations during the recession as the role of HR during the recession is to save money for the organization. The senior management expects all the support functions to bring innovative ideas and solutions, which will lead to a stronger organization when the next growth era comes. It’s important to recognize that long-term cost-effective operations are impossible to achieve without a corporate culture that supports and values it. This requires a visible commitment from top management and HRM to balance value and cost, reduce unnecessary expenditures, and implement metrics and accountability that encourage individual attention to cost reduction and efficiency.

Given today’s unstable economies and hypercompetitive markets, businesses are under constant pressure to compress costs and improve profitability. For HR, this challenge is multi-faceted as the department is tasked with cutting costs, without cutting heads, and boosting productivity, employee morale, and engagement at the same time. However, being a strategic business function, HR has numerous advantages and can really help companies cut costs. That’s why I said HRM must be the most strategic and Innovative department in the Bank.

Reference:

  https://www.shrm.org/hr-today/trends-and-forecasting/research-andsurveys/Documents/2016-Human- Capital-Report.pdf

5. Organizational Behavior (OB) & Human Resource Management (HRM)

Are people in organizations to be treated as individual human beings or as resources to be controlled?

What is Organizational Behavior?

A turning point in OB came with the Hawthorne (“the observer effect”) studies (1929–32) conducted by Elton Mayo and colleagues. Originally an attempt to apply scientific management principles to identify the most productive physical environment for workers, the researchers concluded that social relationships and informal group dynamics had a much greater impact on productivity than changes to lighting levels and so on (Mayo, 2003). This covered the way for many theorists to begin to examine motivation at work, with the focus being on the inter-and intra-individual aspects of work behaviour. Rather than recommending a ‘one best way’, OB began to develop as an academic discipline addressing the multi-level complexity of human behaviour at work. The Weighing the Evidence box examines the organizational behaviour (OB) is the study of individual and group dynamics within an organization setting whereas human behaviour, call it individual behaviour is a sub-set of organizational behaviour commonly the held assumption that more satisfied workers are more productive.

What is Human Resource Management (HRM)?

HRM is simply a case of identifying all the activities (such as selection, pay, and benefits) and roles (from administrative assistance through to director) associated with human resources in work organizations. This is the source of the great diversity in HRM: the goals of HRM vary depending on the strategic choices made in individual organizations and the wider environment or industry context in which they are embedded. HRM, as we recognize it today, emerged in the 1980s, when influential academics put forward a model of HRM that distinguished it from traditional personnel management or industrial relations. The Harvard model of HRM (Beer et al., 1984) was one of the first of these and it emphasized employees as an asset to the organization rather than a cost, and HRM as having a key role in strategic and business decisions rather than being a side-lined administrative department. Instead of seeing employees and managers as engaged in a constant struggle, HRM was portrayed as a way of bringing about unity in the organization, proactively engaging all employees to work towards organizationally important outcomes.

Boxall et al. (2007a) define HRM at its simplest as ‘the management of work and people towards desired ends’ and make the point that HRM is fundamental to every work organization. The work and the people need to be managed; thus, activities we currently identify as HRM will always exist. There may be arguments about what kind of umbrella term to give to these activities or even who should carry them outline managers or HR professionals – but the practices themselves are necessary to any organization’s survival. In a similar vein, Watson (2010) suggests treating HRM as a general term for employment or labour management rather than as a specific model or paradigm of how employees should be managed. Perhaps one of the best ways of conceptualizing what HRM is all about is to think of it as centred on managing the employment relationships in an organization.

HRM now can play a leading role in ensuring that organizational goals are met in an ethical manner and that ethical considerations are central to the management of the employment relationship. Ironically, the very term ‘human resource’ management has led some critics to suggest that HRM has played a role in reducing employees from ‘people’ to ‘things’ that can be exploited for the firm’s gain.

Organizational behaviour is a term used to explain the concept of the behaviour of individuals who constitute the human elements of an organization. This relates to human resources, which is a concept that is used to describe the management of the employees in any organization. From the description of the two terms, it is easy to see how organizational behaviour (OB) and human resource management (HRM) are related. Organizational behaviour looks at the individual behaviour, and then moves to group behaviour, progressively to the organizational behaviour, which we can also call the organization culture. It requires skills to understand how the organization and its members affect each other. Its areas include frameworks for diagnosing and resolving problems in organizational settings. Thereby we can say that organizational behaviour (OB) is the study of individual and group dynamics within an organization setting, whereas human behaviour, call its individual behaviour is a sub-set of organizational behaviour.

Conclusion.

Human behaviour is inherent in each individual which means his characteristics, his way of behaving and thinking is his own features while organizational behaviour is a group or company culture unique of each own felt and done. The relationship between organizational behaviour and human resource management stems from the fact that human resource management can be used as a tool for shaping organizational behaviour.

References:

1. Beer, M., Spector, B., Lawrence, P. R. and Mills, D. Q. (1984) Managing Human Assets: The Groundbreaking Harvard Business School Program. New York: Free Press.       
2. Boxall, P. (2007) ‘The goals of HRM’, in The Oxford Handbook of Human Resource Management. Oxford: Oxford University Press.
3. Mayo, E. (2003) ‘The Hawthorne Experiment Western Electrical Company’, in K. Thompson (ed.) The Human Problems of an Industrial Civilization. New York: Macmillan.
4. Miner, J. B. (2003) ‘The rated importance, scientific validity, and practical usefulness of organizational behavior theories: a quantitative review’, Academy of Management Learning & Education, 2(3).

4. Why Should HRM Practices must change in Sri Lanka? (Open for Discussion )

 HRM in Sri Lanka  

With my experience in several companies, I have realized through there are the most common duties and responsibilities of an HR manager in Sri Lanka.

• Maintenance of accurate, up-to-date records of all employees in personal files.
• Ensure the payment of statutory dues to state institutions on due dates pertaining to the Employees and also meeting deadlines for monthly remuneration payments.
• Procuring the progress and performance reports from all departments to assess the needs of job enrichment of every staff member.
• Continuous sourcing of staff through varied recruitment channels and industry reports.
• Introduction of periodic incentive schemes for workgroups in consultation with top management and Board of Directors.
• Arranging high-quality training & development programs to enhance the skill and productivity levels of all staff members.
• Invitation of external agencies and plant/machinery suppliers to carry out periodic training programs for staff members and top management.
• Timely and effective communication of all directions, decisions, instructions, guidelines, company policy decisions, work rules/times and work ethics, Terminations, to ensure strict compliance.
• Usage of main/departmental notice boards for effective communication, if required.
• Mitigation of staff/management turnovers to minimum levels and also to match the industry statistics.
• Carrying out periodic industry statistics, surveys and duly informing the management.
• Designing recruitment, promotion, cost-cutting, transfer, dismissal, and other situational documentation in a standardized format.
• Ensuring security and retaining of all files to be in line with the statutory requirements.

      External factors can impact HR practices. 

·        Economic factors
·        Political factors
·        Legal factors
·       Technological factors
·       Cultural factors

This will affect the recruitment and selection practices of any company. The per capital income of a country, its labour laws, and GDP levels will influence the minimum wage rate. Quoted companies in Sri Lanka have separate remuneration committees and they look into wage/salary structures from time to time and formulate remuneration policies. Political factors are taking precedence in times of elections, political uncertainties, or based on election promises.

In Sri Lankan Company HR-related laws are not based on prevention of sexual harassment, work unsafety and violation of health Management, labour union action/contracts, disability, and a few more areas. That’s why employees have to go with the Legal framework to decide the application of different HRM practices through labour and employment laws.

Unfortunately, the cultural and Ethical behaviour is not the case in some Sri Lankan Companies. Ideas will be either ignored or set sideways or will be presented by another as if the ideas were suggested by him/her. This will discourage the hard-working, loyal, and forward-thinking staff members/managers. A majority of Sri Lankan executives are often deprived of self-development and job enhancement within their respective companies. In some companies, even the private secretaries, blue-eyed staff members, drivers, and peons of directors have considerable clout in companies and could easily carry tales to the directors about the executives. These executives at times work under considerable stress and worry and are not interested in putting their best efforts in the company and also there is a whistle-blowing policy and it's not functional. In Sri Lankan Company HRM haven’t any solutions for this kind of matters, so that’s why I said Sri Lanka HRM Practices must Change with Global HRM concepts and practices.

What is your opinion?  Should HRM Practices need to Change in Sri Lanka?

3. Why HRM must be in TOP of the company hierarchy? (Global Concept)

In the corporate world, the subject of Human Resource Management has come to stay at the top of the Ladder of Business Management supplementing the corporate goals and strong good governance measures. It is the quality and exceptional skills of the staff, workers, and the management who jointly possess the keys to corporate Governance and corporate stability of any corporate entity as they will be directly executing the plans, goals, targets, and the vision of the Board of Directors.

 But, all over the world, the high-performing top bracket executives usually coordinate with the HR Manager in picking up the best possible team members for the corporate matches in the future. One cannot have non-performers and losers in the team. With competition looming large at almost all businesses, corporate management will have to continually search for executives with high innovative skills. Very few businesses are enjoying absolute monopolies. Head Hunting has become an integral part of modern business management. Profitability would be the ultimate goal with any team of staff members.

 New threads face by the corporate world

However, I think there are other corporate measurements such as corporate standing, customer acceptance, good CSR practices, lower staff turnover levels, and a number of other norms to measure the level of corporate success. Major corporate conglomerates even proceed to the extent of spying over the activities of the top executives of rival companies. Some executives pass on core information to rival companies while some others join rival companies after gathering vital and core business secrets of their present companies. Some companies even make reward payments to executives of rival companies for passing on sensitive information to them on a regular basis. This type of practice is common in high-tech product and service, manufacturing and marketing companies or in companies subject to subtle changes in demand over the sensitiveness of key factors.

Why HRM must be in Top of the Table

Therefore, the appointment of an efficient HR manager is of great importance to the success story of any corporate entity. As it is the vision of any company to recruit and retain a long-serving staff cadre, the top management should assist the HR manager in recruiting the most suitable staff members to achieve group results at various levels. HR Manager could be considered as the live wire of any organization who will immediately unearth and remedy the conflicts of staff members within an organization. It is common to find the following types of conflicts within an organization at any time. These conflicts will come to the surface only in specific situations or at times of poor business results of a corporate entity. Finding fault with each other at a later stage will pull the company backward and will not yield the corporate results expected. It is up to the directors and top management to strengthen the hands of the HR managers at all times. 

Reference:

1. Ahmad, S., & Schroeder, R. G. (2003). The impact of human resource management practices on operational performance: recognizing country and industry differences.
2. Compton, R. L., Morrissey, W. J., Nankervis, A. R., & Morrissey, B. (2009). Effective recruitment and selection practices: CCH Australia Limited.
3. Martocchio, J. J., & Joe, M. (2004). Strategic compensation: A human resource management approach: Pearson Education India.

2. HR Practices vs. Innovative HR practices

HR vs. IHR

Main responsibilities of HRM managers: staffing, setting policies, compensation, and benefits, retention, training, employment laws, and worker protection.

Innovative HR practices include free-market selection and recruitment, incentive rewards, performance evaluation and promotion, training and development, and worker participation in the decision-making process that is closely associated with human resource outcomes and firm performance.

Strategic flexibility and HR Practices

 

I think organizations’ emphasis on strategic flexibility affects their adoption of innovative human resource management practices. In addition, we find that strategic flexibility is a very important context for examining the impact of human resource management practices. In particular, we find that innovative human resource management practices are effective in mediating the relationship between strategic flexibility and employee productivity. Strategic flexibility is “the capability of the firm to pro-act or respond quickly to changing competitive conditions and, thereby, develop and/or maintain competitive advantage.

Organizations with a strategy to promote their flexibility and responsiveness to environmental changes would benefit from adopting innovative HR practices that include selective hiring, extensive and well-designed training, self-managed teams, and decentralization of decision making, information sharing throughout the organization, comparatively high compensation, and compensation contingent on organizational performance.

Innovative HR Practices

The key feature of innovative HR practices is to develop employee skills and behavioural repertoires that can provide a firm with sustainable competitive advantages. In pursuit of strategic flexibility, organizations seek flexibility in HR by adopting innovative HR practices To adapt to changes in the environment, organizations need their employees to be able to learn new tasks quickly (skill), to accomplish diverse tasks and assume responsibility for tasks from other jobs (functional flexibility), and to adjust their behaviour in different circumstances (behavioural flexibility). Organizations’ emphasis on strategic flexibility promotes firms to adopt training and staffing activities oriented toward personal growth that enable organizations to “have the right numbers of the right types of people to the right places at the right times” and identify and eliminate barriers to performance improvement. These are innovative HR practices.

References:

1. Laursen K, Foss NJ. New human resource management practices, complementarities, and the impact on innovation performance. Cambridge J Econ. 2003.
2. Chowhan J. Unpacking the black box: understanding the relationship between strategy, HRM practices, innovation, and organizational performance. Hum Resour Manage J. 2016.
3. Seeck H, Diehl M-R. A literature review on HRM and innovation–taking stock and future directions. Int J Hum Resour Manage. 2017.

1.Why Context-Specific nature of HRM that can be used to develop new HR programmes and policies for Banks in Sri Lanka?

HR

This is what I had in my mind; To explore and compare Human Resource Management practices in Sri Lanka Banking Sector. Human Resource Management (HRM) is a developing concept. It has tremendous relevance to the service sector like the Bank. Human input is the single largest input to the banking industry. The level of efficiency/productivity of this input gets reflected in the quality of service offered by the banks to its customers, as also in its ultimate growth, productivity, and profitability. Human Resource Management Practices have been studied extensively among Manufacturing, Service, and Small Medium Enterprises.  

I do not think anyone in Sri Lanka has not compared Human Resource Management Practices in Sri Lankan Public/Privet Sector banks. The key areas must be considered staffing, training, compensation, performance appraisal, and employee relations. Sri Lankan  Banks show to adopt a more rational approach than their counterparts.

Globalization, privatization (Public Banks), free trade, and liberalization are increasing the competition to the business organization. A key challenge confronting organizations is to continue to achieve sustained competitive advantage in the short term and also to prepare for long-term success. The primary source of competitive edge, in addition to access to finance or capital, rests with the organization, and with the people. People are the most important and valuable resources of any organization. Dynamic people can build a dynamic and growth-oriented organization. Effective employees can contribute to the effectiveness of the organization. Competent and motivated people can make things happen and enable an organization to achieve its goals. In this respect, the organization should continuously ensure that the dynamism, effectiveness, competency, and motivation of its people should remain at a high level.

Why HR important for Banking Sector?

Human Resources are more important in service organizations than in the goods-producing industry, as their cost of labour is relatively a high proportion of the total cost of production. Moreover, employees on the front line in the service sector are in contact with the customer, and customer satisfaction depends upon employee performance.

Banks, in the service industry, delivers their service across the counter to the ultimate customer. The activities of the banking industry are all about “relationships”. Hence, the banking industry has to provide better services with a smile to the customers in order to cultivate and maintain a long-lasting relationship with their customers. Notwithstanding the level of technology, banking is primarily a labor-intensive service sector. Hence it will not be possible for the banks to sustain effectiveness unless human resource management is given prime importance because the technology is only an aid to human effort and not a substitution thereof. If the technology is equalized, then the human capital shall be the differential in the future. 

Can Technology overtake HR in Banking Sector?

Human Resources are the most important element for the progress of banking. Though technology can replace manual intervention, the thinking process is the exclusive preserve of human beings. With changing times and technology, banks would require employees with special skills in the areas of risk management, treasury, product development, customer relationship management, and IT services. The technology can improve speed and quality of performance, but at the same time, it can also unleash the risk factor. It is rightly said: “We are trying to apply third-generation ideas on second-generation organizations which are unfortunately run by first-generation managers. It is a recognized fact that HR occupies a unique and sensitive position in the banking sector; no meaningful change is possible without the involvement of their employees. 

Therefore, if banks have to undertake any significant changes to adapt themselves to the new competitive environment, one of the most crucial initiatives lies in organizing and preparing its HR to the requirement of competitive banking. The human asset being an intellectual asset, the new source of competitive advantage can be defined as the sum total of knowledge, skills, and competencies that an organization possesses. The fundamental principle of human resource management is to treat people as valuable assets. 

Good HRM is to attract the best talent, retain and motivate them. 

The performance of the banks (as any other service sector organization) highly depends on their HR. Hence, efficient and effective HR practices of selecting the right people, who would maximize value and minimize cost within the organization, remain a challenging task.

The core function of HRD in the banking industry is to facilitate performance improvement, measured not only in 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 human capital play a crucial role in determining the competitiveness of the financial sector. The quality of HR indicates the ability of banks to deliver value to customers.  Capital and technology are replicable but not 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, In recruitment, placement, performance management, are complementary. Only one asset holds the power to differentiate banks in the competitive environment example, a dedicated, productive, and innovative workforce. No longer an organisation can afford to underestimate and demoralize its workforce to succeed at the expense of those who help and make success possible. Respect human dignity and have faith in every employee as a resource and potential asset while achieving organizational objectives efficiently. In short, banks have to invest in their workforce.

References:

01. Nanayakkara, G. (1999) ‘Changing Paradigms in Human Resource Management’, Institute of Personnel Management of Sri Lanka, Annual Conference.

02. Sangwan, D. S. (2005) ‘Human Resource Management in Banks’, IBA Bulletin, June, 09-15.