HRMT20024: Attracting and Retaining Employees in the Banking Sector

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HRMT20024 Assessment 3
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Assignment 3 is dedicated to the subject of human resource management. This is an essay that
will focus on the key challenges faced by companies in the banking sector. There are various
issues between the employees of an organisation. It is the responsibility of the managers of the
business to take effective actions to resolve the conflicts between the employees and create a
healthy working environment for them. The essay will throw light on the methods by which the
managers of banking sector companies can use to attract and retain the employees. The
assignment will contain on various themes of human resource management that will have an
impact on the methods of attracting and retaining the employees in a business.
The banking sector is a growing industry and holds a great place in the market. The economic
development of a country depends upon the working of the banking sector of that country. It is
very crucial that the employees of the banking business are happy and satisfied working in the
organisation. It is the duty of the managers of human resource department of the banks to have
such policies and strategies that help to attract and retain the employees and also motivate them
to serve the organisation in the best possible manner.
Challenges in attracting and retaining employees
The banking sector is the sector that provides various types of services to its customers, and there
are people from different fields of expertise. It is important for the human resource department of
the banks to develop and formulate such strategies which are in favour of all the employees.
After all the efforts from the human resource department, there are still some challenges which
are encountered by the managers in retaining the employees. The problems are given discussed
beneath:
Monetary dissatisfaction is an issue which leads to employee turnover, or the employees leave
the organisation. It is a true statement that everybody works for money and if money is provided
according to work done, employees get de-motivated and dissatisfied. When employees think
that they are not paid suitably according to their efforts, they tend to work less efficiently, and
this hampers the profits of the organisation. It is one of the major challenges in employee
retention (Hossain, 2012).
As the industry is growing, so various market players provide numerous opportunities to attract
the customers. This becomes a challenge for some banks as the employees might leave the
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organisation for grabbing the opportunities provided by the other banks. They sometimes leave
the organisation due to the greed for money. So providing regular opportunities to the employees
is very important to attract them and retain them in the bank.
In an organisation, the employees are allotted their tasks, and they are told to complete that on
time. But some employees get bored by doing the same type of work in a short period. It is very
difficult for the management to change their tasks frequently or provide job enrichment which
can attract them. This is also a challenge which leads to employees leaving the banks.
Unrealistic expectations from the job are another challenge for the companies. Some employees
expect more than they deserve which is not possible for the management to provide. This is a key
issue, and the employees leave the organisation due to that (Kramar, 2014).
All these issues are the key challenges which the organisations in the banking sector face and are
important to be tackled by the management of the banks.
Ways to attract and retain the employees
Theme 1: Strategic human resource management
Strategic human resource management can be defined as the process of establishing a connection
between the objectives of the organisation and the strategies of the human resource management
of the company (Gannon, et. al., 2012). The process of strategic human resource management
can prove to be beneficial for attracting a retaining the employees in the banks. The strategic
human resource management can help in hiring the best suitable candidates for the bank. It is the
duty of the manager of the human resource department to create a healthy workplace culture for
the employees so that the employees feel motivated and happy working there. When the
employees do not get a comfortable working environment, they hesitate, and this issue can lead
to their dissatisfaction. The strategic human resource can also help the bank in retaining the
employees by making managing the employees proactively (Kramar, 2014).
Theme 2: Ethical and safety context of the employees.
Ethics can be termed as the principles, and moral values followed in an organisation. In any
business, there are a lot of people working and want that they must be treated equally. In a bank,
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men and women both work and they expect that the bank will treat them equally. It is seen in the
banks that the cashier position is generally given to a man as there is a common perception that
women are less capable of handling money. This is a statement which reflects the inequality at
the workplace (Haiying and Shen, 2013). The scenario has to be changed, and the ethical
principle of equality must be followed by the management of the banks. The policies and rules of
the organisation must include e such that they satisfy the employees. The strategies and policies
of the business must be in accordance with the interests of the employees. Safety of the
employees is another important concern for a business. The safety of the employees must be
taken into consideration by the business as they are most important resource of an organisation.
In a bank, the safety issue can be resolved by providing various types of insurances to the
employees without any extra interest charges. As the employees are working in the bank, they
must be provided with some additional benefits.
Theme 3: Analysis and design of work
Job design is one of the main activities of the human resource department of an organisation.
Job designing is associated with the function of job specification, tasks to be performed in the
job, methods to accomplish the task. It also sets up a relationship between the subordinates and
the superior in an organisation (Kramar, 2014). There are various aspects in the job designing
like the job rotation, job simplification, job enrichment and job enlargement. As it has already
been described that some employees get bored by doing the same kind of work in a very short
period of time, the human resource management of the organisation must be attentive towards
the designing of the job work. The work given to the employees must be designed in a way that
the employees enjoy doing it. There must be alterations in the work so that the employees do not
get fed up by performing same work several times. The analysis and designing of job work is the
task of the human resource department of the bank, and the team must be competent enough to
analyse the needs of a jib and then designing work for the employees (Rebecca, et. al., 2013).
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Theme 4: Employee relation Challenges
Building good relations in an organisation is very important for the growth of the business. If
there is a conflict between the employees, it will surely have a negative impact on the
performance of the employees, and ultimately the growth of the company will hinder (Arvin and
Maryam, 2017). The conflicts between the employees can be because of the dissatisfaction of the
employees or any cultural difference in the employees. The human resource department of the
bank is responsible for making a balance between all the employees of the organisation. The
human resource manager must make efforts to build a strong bond between the employees and
also the management and the employees. For this purpose, the human resource department can
use team building activities like weekly games, counselling of employees and other such events
so that there is a healthy relationship between the employees and the management.
Theme 5: Motivation and rewards
Motivation is the key to success. When people are motivated they perform to their best
potentials. For human motivation is very important. It is the drive which makes people performs
to their best. In the banking sector also the employees need to be motivated. Their motivation
will be a huge contribution to the success of the company. Employees need to be motivated so
that they take an interest in the job. There are two ways to motivate the employees. First is the
financial method of motivation. Financial motivation is the motivation in which the employees
are provided with monetary benefits. The benefits can be incentives, bonuses and other
allowances (Yasser, 2017). Other is the non-financial method of motivation. In the non-financial
method of motivation, the employees are given non-monetary benefits like awards and
recognition. In the banking sector also employees need some motivation so that their morale is
boosted and they perform well Motivation and rewards are beneficial for the employee retention
as when the employees are provided with the awards and recognition, they do not think of
switching to other organisation or job. The technique of rewards and recognition creates a good
impression in the minds of the employees and the society. The goodwill of the company is
increased which helps in attracting new candidates to the organisation.
Arguments for human resource management
Strategic organisational function
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The banking sector organisations should maintain the changes in the organisation through an
organisational strategy which will help to retain the employees of the organisation. The
organisational strategy refers to the strategy that is developed to improve the staff functioning of
the organisation. The organisational plan of the banks can help them to implement the changes in
the structure and culture of the organisation effectively. The organisational strategy also involves
the decisions taken for the employment structure, compensation system and other staff related
functions. The strategic organisational function helps in maintaining employees with high
satisfaction and decreasing the employee turnover ratio.
Laws and regulations in the financial sector
The laws and regulations in the financial sector affect the employee structure and retention of the
employees. The banking sector organisations should follow the laws and regulations of
employment to maintain their satisfaction. The banks have to follow the laws to avoid any legal
action upon them. The employment laws are created to protect the interest of the employees at
the workplace. The employment laws provide safety to the employees of the banks. These laws
also protect the exploitation of the employees in the banks. These define the compensation,
working hours, incentives and other facilities that improve the employee satisfaction.
Job characteristics
The job characteristics of the employment in the banking sector involve satisfaction, pay and
incentives, working hours and business culture of the business organisation. These characteristics
define the satisfaction of the employees in bank organisations. The better the business culture
and job characteristics of the employees, lower the employee turnover ratio. The employees
which are satisfied with the job characteristics tend to be more loyal to the business. The
employees who are satisfied, perform better with the organisation. The banks in the financial
sector should provide them with effective facilities and incentives. The job characteristics also
affect the future recruitment process of the organisation (Ghosh, et, al., 2015).
Study of human resources effectiveness
The banking organisation in the financial sector can improve their human resource’s
effectiveness and efficiency through improved human resource planning and strategies that will
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help improve their satisfaction. The human resource is isoisfected by the competency, job
characteristics and willingness, so the organisation should follow effean ctivan e strategy to
improve the employee's willingness and competency. The human resource planning and
forecasting their need can help to improve their role in the organisation.
Human resource management practices
The Human source management practices can be improved to improve the employee's
involvement and satisfaction in the financial sector. The change in the macro environment like
technology, legal and political issues and innovative recruiting methods have improved the
source management. The human resource management practices are now effeeffectively lied in
the organisation to improve the retention. The Human source practices can also be improved in
the banking sector to decrease the employee turnover ratio. The improved human resource
management systems and models are also improving the human resource management in the
organisations (Fetiniuc & Luchian, 2014).
The essay concludes about the various themes in the human resource management of the banking
sector. Banking sector has a major contribution in the economic development of a country so it is
important they this sector continuously grow and prosper. For the growth of the banking sector,
it is important that the employees of the banks are satisfied with their jobs and they are motivated
to perform to their best levels (Rebecca, et. al., 2013). The department of human resource in an
organization is responsible for all these works. They have a duty to make effective decisions
regarding the job designing and the compensation of the employees suitably so that the
employees are committed to their job and retained in the bank. The human resource department
of a banking sector is also liable to provide a good working environment to the employees of the
business (Ahmad, et. al., 2015). This is important to make the employees comfortable at the
workplace and they are attracted and retained towards the job position. The essay gave
information about the methods of motivating the employees. The study also gave insights about
the importance of good employee relation in companies operating in the banking sector.
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