globalization on human resource management in the banking industry Page |
Impact of Globalization on Human Resource Management in Banking Industry
The nature and philosophy of doing business and making an organization policy has greatly changed in the last few years as companies are expanding globally and becoming more and more boundary less. 'Globalization' has taken-up the responsibility of bringing the global companies together in a single platform where they can interact, interchange ideas, technology, business processes and intellectual capacities. Globalization has not only brought about changes on the international front but domestic affairs of the companies on the micro level and the complete economic and social system of the country on the macro level. Many of the political, cultural, social and economic system of international affairs have given the name of globalization like free market economy, westernization, economic liberalization, internet revolution and global integration. The modern social theorist has termed globalization with 'deterritorialization' according to which many of the social activities and events takes place irrespective of the geographical boundaries.
Globalization has given space to countries to meet with the international challenges openly in a free market economy where every participant is allowed to show their potential and strength and avail the opportunity according to their capabilities. There is one school of thought that opposes globalization on the grounds that international free market has assisted multinational giants to expand and grow enormously at the cost of smaller domestic investors who lack the resources to compete on the international level thus distorting their financial position (Kumar, and Liu, 2005). However, on the other hand there is another school of thought who supports the phenomenon of globalization and argues that it helps poor countries and economies to raise their standards and improve their quality of living by maintaining it with the international level. Thus the concept of globalization is controversial to some extent but nevertheless it has transformed the way business operations are conducted specifically in the area of managing people and taking care for their growth and development under the domain of human resource management (Lansbury, Kitay, and Wailes, 2003).
Impact of globalization on human resource management in the banking industry
Understanding the impact of globalization on human resource management in the banking industry calls for reviewing the changing role of HR professionals in today's competitive environment not only for the management of financial (money) and capital (building etc.) resources but also makes necessary arrangements in the areas of human resource for the attainment of the organization goals. Unlike financial resources of the banking industry that is limited to the assets base and equity, human resource has unlimited capacity with unbounded boundaries of intellectual capacity, potential to deliver in the highest quality. Knowledge and human aptitude are significant sources for companies to get competitive advantage and transform their business from better to best possible outcomes. Therefore, managers must strive to build on the human skills, awareness and technical competencies.
Gaining organization success in the global environment through human
Globalization has interchanged various assets whether tangible or intangible across borders for prosperity in this the growth of human resource and their development is critically important. This emphasis on human capital portrays more importance on the human capital than on the physical capital for the advancement of organizations. Globalization has introduced pluralistic workforce within the organization and within this pluralistic workforce people from diverse backgrounds brings in diverse knowledge, skills and capabilities. Amalgamation of these strengths in one unit can bring sparkling fire in the organization therefore organization should encourage the concept of 'diversity within workforce' with the advent of globalization. For managing the diverse workforce managers must consider the following steps to be undertaken while going in for the process of recruitment and selection and career development of personnel are major components of human resource management:
Hiring dexterous workforce:
In the competitive marketplace where survival is only possible for the fittest and who possess the potential to grow and advance with time, managers need to focus their attention on hiring people who are not only skilled but are capable of increasing their skills and potential with changing time. Such human resource possess the quality of learning quick having the fast grasping capacity with sharp and attentive minds with energetic attitude towards work. Since with globalization, technological advancement has gained importance and necessity of organization's survival. Therefore, managers are seeking towards hiring people who are technically literate and possess the capability to even grow and advance in the field of computer and technology.
Talent aligned with job responsibility:
Managers when hiring people for the organization must focus on the individual skills, knowledge and talent irrespective of the culture, race and ethnicity to which they belong. Right people for the right job are the management philosophy for growth and financial sustainability of not only the financial institution but for all types of companies. Banks that make it easier for employees to find and take on new opportunities within the organization are better at enhancing overall workforce performance (Ahmad, and Schroeder, 2003).
Controlling and measuring employee performance:
If employees are provided with real time feedback, it is more likely that their efficiency will increase and will improve to a considerable extend for future performance. Banking industry which is very sensitive in terms of providing service to its customer as building trust relationship with its client is core to their business strategy; need to focus on performance management tools of its employees to even greater extend with the adaptation of latest technological tools for its measurement (Guest, 1997).
Personnel actions linked to corporate strategy:
In the banking industry where banks are operating in the global market place interacting with international customers, dealing in global financial instruments and providing services to its customers irrespective of their geographical location, need to understand the fact that its valuable customers are closely in contact with the employees for their ease and convenience (Joseph, McClure, and Joseph, 1999). Personnel are the only source that understands customer needs and wants at its best and a source of portraying institutions image in the market. Linking employees with the corporate strategy will increase employee morale and their motivation towards their job. They will not only help in formulating corporate strategy that can benefit the institution in financial terms but will also assist in having a long-term valuable relationship with its customers.
Works on the notion of continuous development:
Just like the manufacturing concerns and production firms focus their quality control strategies on continuous development though mechanisms of total quality management or kaizen techniques; banks also focus on the strategy of continuous development of their employees which will eventually generate quality of service to its customers and they are assured that their money is managed in safe hands. Once the goals and strategies have been communicated to employees banks must ensure to provide necessary resources and skills development programs for the attainment of these goals (Keltner, and Finegold, 1996). Banks must take the responsibility to continuously refresh and upgrade their workforce skills and competencies.
Globalization had transformed conventional business activities
Globalization has given a new direction to the human resource management and drive their activities from traditional hiring, transfers, maintenance of employment record are towards more developmental phase with the inception of responsibilities like training need assessment of employees, coaching and counseling, handling employee grievances, sharing information, building bridges within the departments, managing diversified workforce and above all motivating employees towards organizations goals and objectives. Globalization and internationalization of banking industry has made it more customer focused than ever before. The success of banking industry in the global market is to be able to organize financial resources, physical resources and people around the globe. There are many setbacks of being global especially in the event of financial crisis of the firm when it gets difficult for companies to manage its resources so it plans to cut them and in case of human capital the most practiced procedure adopted for the reduction of workforce is 'downsizing'.
Many companies have adopted various measures to cope with the issues of human resource management in the event of global workforce. Following are some of the measures adopted by the organizations:
Internationalization of the banking industry has given entrance to people from varying geographical locations and mixed gender with also dominance of women in the workforce. To optimize the human resource management in the firm and ensuring that firms are not losing its best people merely because of the meager factor of time constraints, it has introduced the concept of 'flexi-hours'. Banking industry is service industry where customer is given the most preference and customer information is of confidential nature. Therefore, banks can't afford to lose its personnel and let their clients suffer. Banks has introduced flexible working hours for their customer representative staff and its front deck operational team so that they can manage their personal life preferences with work and don't have to compromise on working hours for their personal reasons. This initiative…