The Banking Sector In India

Published Date: 02 Nov 2017

A Comparison between the Manufacturing and Banking Sector in India

[Name of Writer]

[Name of Institution]

A Comparison between the Manufacturing and Banking Sector in India

CHAPTER 1: INTRODUCTION

This chapter will discuss the main topic of the research. It is important to discuss about the topic and to ensure that both the sectors i.e. manufacturing and banking is explored in India in a manner that will focus on the HR practices and its impact on both these sectors in the country.

Background

Human resource management practices may be viewed as supervisory practices. However, the review of the literature revealed a broader and more contemporary definition of HRM practices that focuses on the constructs of inclusion of the human elements for the efficient operation of the organization. Consequently, according to the operational definition human resource is to identify those factors that influence the relation between managers and subordinates within an organization. HRM practices are the activities and tasks that a supervisor or manager engages in to manage and support the activities of the organization's most valuable resource i.e. human beings. Thus, human resource management practices are the functions in an organization that focus on the management of people. They are practices and activities supervisors and managers utilize to support, develop, and guide employees.

Ross (1981) defined human resource management as a comprehensive approach to managing people that goes beyond the traditional personnel functions. She argued that HRM has two objectives: the motivation and development of employees to affect organizational performance.

The effective management of people within the organization is important to the organization's efficiency and effectiveness. Boyne (2003) argued that the improvement in the banking depends on better management, including a focus on leadership and human resource management (HRM) practices. He maintained the focus on regulations and organizational structure limits the progress of today's public organizations. HRM consists of all the tasks involved in ensuring the effective and efficient use of the people inside the organization to meet an organization's goals and objectives. The process of effective management of people means cultivating effective work environments, fostering employee participation and contribution to the organization's success.

An organization’s need for effective teams has led to significant advancements in research for enhancing team performance. Researchers now concur that effective organizational teams provide a directed and collaborative effort when addressing organizational tasks. However, organizational teams are often not inherent in competitive workplace environments; lack of acceptance often causes the team to fail, even if forming the team is perfectly logical and necessary. Research suggests organizations that are developing teams must recognize critical team characteristics in order to utilize a more comprehensive framework to capitalize on their teams’ capacity for change.

In this context, the team design fundamentals advocated in lean manufacturing advance intellectual seeking behaviors that may encourage team members to look at traditional problems in new ways by seeking different perspectives from other team members. The principles of lean manufacturing are specifically designed to develop autonomous work teams integrated from all functional areas across an organization that is engaged in continuous improvement activities.

HRM practices are continually evolving to meet the changes of a dynamic workforce. These challenges may vary depending on the nature of the services provided and on whether the organization is a private or public entity. Wright and Rudolph (1994) referred to this change in the work environment and the workforce itself as a "revolution." In their research of HRM trends in the 1990s, the researchers suggested this "revolution" is a "Human Resource Management Paradigm" (p. 29). The researchers further argued that this paradigm shift most significantly influences the focus of organizations toward new strategic HRM practices designed to increase performance. HRM practices are not merely the function of HR departments but also of supervisors and managers throughout the organizational hierarchy.

Consequently, the field of HRM is undergoing significant reforms because of legislative, policy, and technological changes. Researchers assert that these changes are affecting all levels of government. For example, the literature suggests that line supervisors and managers have been given a greater role in the practice of HRM. The intent is to increase organizational performance through the integration of HRM practices with productivity factors.

Problem Statement

The main issue that will be studied in this research is the differences in the HR practices of both the sectors and how this will prove to be effective for the people who are working in these sectors. The impact of the HR practices on these two companies will be studied in an efficient manner. In the opinion of many experts, the trends in HRM are innovative and participative. This suggests that human resource managers are now involved in strategic planning, are taking a proactive role in the development of employees, and are increasingly active in the organization's decision-making process. Significant reforms because of legislative, policy, and technological changes are influencing dramatic changes in HRM practices and organizational performance perspectives in many organizations.

The employment of a more diverse workforce requires organizations to change practices, behaviors, and attitudes to enhance performance and quality of work life. In addition, the inclusion of supervisors and managers in line operations is crucial to effective HRM practices in today's public organizations. Most studies in the field indicate strategic planning, selection, training and development, and organization development and change as important to the success and survival of today's organizations.

Purpose of the Research

The main purpose of this research is to explore and identify the different HR practices in both the sectors i.e. manufacturing and banking. Manufacturing sector is a sector where the final product that is delivered to the customers is tangible, whereas, in the banking sector, the product is intangible and is thus regarded as a service sector. It is important to learn more about the HR practices in these two sectors. HRM practices is extensive and includes practices such as recruiting, selection, compensation, and job design that are still structured and controlled by human resource departments. The recent trend; however, is toward the devolution of many HRM practices and responsibilities to line supervisors and managers.

Additionally, it is argued that training and development and a rewards and recognition system will influence organizational change and thus impact job satisfaction and organizational performance. It is important that the HRM practices are studied in an effective manner and it is important that the people learn about the differences in these two sectors.

Significance of the Research

Therefore, this study will provide management with a greater understanding of the importance of line supervisors' and managers' involvement in HRM practices. Moreover, this study has implications for public sector HRM policy and practice as well as for social services agencies' performance. Thus, the major objective of this research is to examine the relationship among HRM practices, organizational culture, job satisfaction, and performance in a public social services agency. This research is timely given the fact that in social services organizations the day-to-day dynamics of HRM practices in line operations have received so little attention. As a result, little emphasis is placed on how those practices may impact job satisfaction and organizational performance. This study will contribute to the growing body of literature on HRM practices, job satisfaction, and organizational performance.

Research Questions

The research will aim to answer the following questions:

What are the different HRM practices in the manufacturing sector of India?

What are the different HRM practices in the banking sector of India?

What are the differences and similarities in the HRM practices of the manufacturing and banking sector of India?

Summary

This chapter has presented explanation on the HRM practices of the banking, as well as, the manufacturing sector of India. The discussion has explained the different HRM practices which are present in the manufacturing and services sector. In addition to this, the different practices related to the human resource management are discussed to ensure that the different measures are taken to improve the performance of the company and to motivate the employees to work in a manner that will help the company to grow and succeed.

CHAPTER 2: LITERATURE REVIEW

This section will talk about the concerning the issues of human resource management practices, job satisfaction, and organizational performance. It is important that the HR practices of the manufacturing sector, as well as, the banking sector of India are explored. This will help in carrying out a comprehensive comparison regarding the topic.

HR Strategies

The following strategies are followed by the manufacturing sector in India:

Communication

In the manufacturing sector in India, communication is an integral part of management. It has been argued that multidirectional communication is essential for clearly defining the managers' expectations. Organizational communication is the process that an organization uses to communicate to employees the organization's mission, vision, expectations, and outcomes. Consequently, effective communication results in higher job satisfaction, morale, commitment, and organizational performance.

Participative Management

Participative management is a managerial philosophy in which employees participate in problem-solving and decision-making activities. Kim (2002) maintained that "participative management practices balance the involvement of managers and their subordinates in information-processing, decision-making, or problem solving endeavors" (p. 232). According to practice in the manufacturing sector, participative management can enhance job satisfaction. A study explored the relationship between participative management and job satisfaction in local government agencies. The implication of this study is that it demonstrated importance of the use of participative management as a HRM practice that will improve job satisfaction and organizational performance. Schuster et al. (1997) found that increased employee involvement in decision making led to improved organizational performance and goal attainment. The researchers also found that participative management practices enhanced employee relations within the organization.

Reward and Recognition

A process designed to motivate employees to increase morale, commitment, productivity, and teamwork, rewards and recognition are often given through both monetary and nonmonetary means. Literature supports the idea that reward and recognition are important factors that influence employee behavior, job satisfaction, and organizational performance (Keller & Szilagyi, 1976). Implementation of this HR strategy in the manufacturing sector of India indicated that HRM practices can affect employee motivation by encouraging employees to work harder. Often these practices are in the form of compensation but may also include rewards and recognition and employee participation programs.

Supervisory Leadership

Supervisory leadership is behavior that provides direction and encourages others to take action. This includes perceptions held by employees about the extent of supervisory support, work facilitation, and team building. In the manufacturing sector of India, this practice is implemented in a manner that helps the employees in working in the most effective manner. This HRM factor displays commonly recognized leadership styles that are observable in the day-to-day work environment of line operations in many public organizations. Those styles are autocratic, consultative, participative, and laissez-fare. The autocratic leader is decisive and allows for little input or participation from his or her subordinates. These leaders (supervisor and managers) simply make decisions and impose those decisions on subordinates. Conversely, the consultative leader allows employees to participate in the decision-making process. The laissez-faire leader is one who acts as a representative of the group. This leader allows the employees to do what they want and intervenes when leader support is needed. The participative leader is one who functions from a Theory Y perspective. Under this type of leader, employees can be creative and innovative and are included in the decision-making process.

The following strategies are followed by the banking sector in India:

Empowerment

Empowerment is the process supervisors and managers use to encourage employees to utilize their skills, abilities, and creativity. According to Conger and Kanungo (1988), two categories of power define empowerment: relational perspective and motivational perspective. This has been exercised in the banking sector of India. The relational perspective of empowerment involves management's delegation of or sharing of power. The creation of an environment that increases employee motivation and enhances personal development characterizes the motivational perspective. The researchers argued that the need to empower is critical in circumstances where employees feel powerless. Thus, managers must identify those circumstances within the organization that instill this sense of powerlessness. The manager is responsible for developing ways to remove the condition or change the circumstances so that the employee feels empowered to act once the circumstances are identified.

Motivation

Motivation is the process of providing reasons or motives for exerting effort and causing employees to act in certain ways. In the banking sector in India the aspect of motivation is taken care of properly. According to Timm and Peterson (1993), the most important function of a supervisor or manager is to motivate and direct human behavior. It was further noted that this linkage is related to the extent of which an employee is satisfied with meeting personal needs and whether one feels sufficiently rewarded at work. In addition to the fundamental concepts that influence and characterize behavior and management style, motivation theory embodies the concept of public service motivation (PSM). This construct helps in explaining why individuals choose public service employment. A number of researchers asserted that the approach to public service motivation is from three perspectives: rational, norm based, and affective.

Performance Evaluation

Performance evaluation is the process of evaluating how well employees perform their job when compared to a set of standards intended to measure the performance. They focus on identifying, measuring, evaluating, and improving employee performance. Cleveland, Murphy, and Williams (1989) found that organizations use performance evaluations for between-individuals and within-individuals purposes. This is what exactly is implemented in the banking sector of India. The between-individuals evaluation is used to determine salary and promotion and to identify poor performance. Conflicting with between-individuals approach is within-individuals, which identifies individual training needs and individual strengths and weaknesses and provides performance feedback. A third usage suggested by the researchers is systems maintenance, which identifies individual training needs and evaluates goal attainment and goal identification. Finally, the researchers suggested that performance evaluations may be used to validate research, document personnel decisions, and meet legal requirements.

Training and Development

Training and development is the process of developing expertise and is designed to promote or enhance job performance. Furthermore, training is an important function that influences the organization's ability to achieve its goals (Selden, 2005). Managers are responsible for the development of employees in an organization. He argued that as part of their role, managers should be able to turn their employees' strengths into effective job performance through consistent training and development. He further argued that employees' weaknesses are unimportant. It was also suggested by many researchers that training and development are needed for both management and every employee in the organization. Chien (2004) found that training is an important factor to organizational performance. He asserted that basic skills training, on-the-job-training, and coaching can influence employee development and organizational performance.

Impact of HR Strategies

The researchers summarize the essence of HRM as:

Vertical integration—understanding the organization and its context

Horizontal integration—creating coherent HRM systems

Demonstrating effectiveness—showing how HRM systems affect organizational performance

Partnership—HR professionals working cooperatively with line managers as well as with non-management employees.

Chien (2004) conducted a qualitative case study to examine how HRM could improve organizational performance. The researcher identified five factors that affect organizational performance: (a) model of motive, (b) leadership style, (c) organizational culture and environment, (d) job design, and (e) human resource policies. Chien concluded that HRM is a very viable approach to linking organizational performance and personnel management functions. Furthermore, in order for an organization to gain and maintain a competitive advantage, management must understand and develop the SHRM factors that influence organizational performance.

Job Satisfaction

The concept of job satisfaction is defined as a state of pleasure that an individual gains from applying one's values to a job. He maintained that different individuals measure this level of satisfaction differently. His research into job satisfaction focused on the individual values that define a person's job satisfaction. Arvey (1995) defined job satisfaction as the affective or emotional state resulting from the overall appraisal of one's job experienced by an individual. It has been seen that the implementation of HR strategies has increased the performance of the employees in the manufacturing, as well as, the banking sector of India.

Organizational Performance

Traditionally, organizational performance in the public sector focused on the delivery of service and was measured by organizational effectiveness and efficiency. Recently, because of many reform efforts, organizational performance organization has become the focus of intensive research. Generally, the literature discusses performance at four levels: (a) the individual employee (performance appraisal), (b) the team or small group (team performance), (c) the program (program performance), and (d) the organization (organizational performance). These levels have been seen in the manufacturing and banking sector when the strategy was implemented and the performance of the organizations in these sectors improved a lot.

Limitations of HR Strategies

It is important for the sectors in India to realize that implementing these HR practices has negative aspects, as well. This means that the company and the management will have to ensure that the HR strategies are implemented in such a manner that the operations of the business are not adversely impacted. This means that the company will have to gather information related to the proper implementation of the HR strategies. For this, the management will have to take steps for measuring performance in the right manner and will also prove to be beneficial for the employees. It is essential that the employees are given preference in every situation and that their motivation level is maintained in a manner by means of which the company will grow and succeed. It is important that the management realizes the importance of keeping the employees motivated and satisfied or else the company will not be able to implement the strategies in the right and in the most efficient manner.

CHAPTER 3: METHODOLOGY

Research Design

For the purpose of this research, primary data, as well as, secondary data will be collected and qualitative research will be carried out. This will help in analyzing the past researchers that will be held and will also prove to be effective for the companies where such strategies are implemented. Collecting first hand data will also help in knowing more and will provide accurate results related to the HR strategies that are implemented in the manufacturing and banking sector of India.

Interview

In the interviews, structured and semi-structure questions will be used that will allow the respondent to express their opinion freely, which would enable the researcher to gather more data and to gain more knowledge on the subject even through additional data have to be eliminate, which would not fit the purpose. This would not be possible in structured questions as there may be several answers to a specific question, given different circumstances, which the respondent would not be able to explain (Krishnaswam & Satyaprasad, 2010). In order to find out the percentage of the answers to the questions, structured questions will be used. On the other hand, unstructured questions will be used whenever there is a necessity for a wider view on the part of the respondent. When conducting interviews, the body language of the participants will also help in finding more about their attitude towards the implementation of HR strategies.

Literature Search

The selection criteria for the literature was relevant to the topic of the research and the publication year. Both the private and public libraries were visited in order to access the information. Other then this some online libraries were also visited including Pheonix, Emerald, Questia, Ebsco and more. These data bases enabled the researcher to access a number of libraries containing sufficient information of the past studies as well as the latest studies on the topic selected. The data utilized in the literature review was peer-reviewed and validated. A technique of library indexing and research was utilized which employed related texts which is written on the selected subject and incorporated them in the research study. Some assistance was also taken from different data and surveys conducted by various companies about the HR practices in India. It is easier to collect and find the secondary data however, the researcher was aware about the data limitations which can cause problems and unauthentic data inclusion in the research study which could make the research study unreliable as:

The secondary data is vague and general and many not be very helpful in coming to authentic findings

The data and information of the secondary research can be inaccurate which is the reason it is significant to check the source of the data

The data attained in the secondary research can be out of date

The sample size utilized in the some of the secondary data can be small

The company which published the data may not be trustworthy

Authentic research in any field is a combined endeavor of the human for discovering the truth. The research is a continuous and never ending process in order to make the world a better place to live in for the humans. It assists in determining the problems and striving for an effective and appropriate solution.

Inclusion and Exclusion Criteria

Following is the inclusion and exclusion criteria which were utilized by the researcher to search the websites, magazines and databases:

Research is published between the years 2005 and 2012 and is in English language

The public method reconsiders research assistance, randomized controlled trials, assessments, research, considerations for other publications, meta-analysis, models etc

The research are based on the HRM practices in the manufacturing and banking sector of India.

The information utilized in the research is reliable and unbiased and accurate.

Timetable

Activity

Jan-Feb

March-April

May-July

August-September

Read the literature

Finalize Objectives

Draft Literature Review

Read Methodology Literature

Devise Research Approach

Draft Research Strategy & Method

Develop Questionnaire

Pilot Test & Revise Questionnaire

Administer Questionnaire

Enter Data into Computer

Analyze Data

Draft the Finding Chapter

Update Literature Read

Complete Remaining Chapters

Submit to Tutor & await feedback

Revise Draft format for Submission

Write conclusions and implications

Print, Bind & Submit