Strategic Human Resource Management Practices in HSBC: Analysis Report

This report provides an in-depth analysis of Strategic Human Resource Management (SHRM) practices within HSBC, a leading global financial institution. It begins with an overview of HSBC's operations and structure, emphasizing its global presence and substantial workforce. The core of the report focuses on the application of SHRM principles, highlighting key strategic issues such as fair compensation, effective recruitment, performance management, employee behavior and culture, and employee retention. It then delves into specific SHRM development strategies and practices employed by HSBC, including selective hiring, performance-based compensation, the use of self-managed teams, and regular training and development programs. The report also proposes a detailed training strategy, outlining steps to analyze training needs, identify skill gaps, prioritize training areas, and effectively plan and deliver training programs to enhance employee performance. Overall, the report provides a comprehensive understanding of HSBC's approach to SHRM and offers insights into the challenges and strategies involved in managing a large, global workforce.

Running Head: SHRM Practices in HSBC
Strategic Human Resource Management in HSBC
Report
System04104
8/24/2019

SHRM Practices in HSBC 1
Introduction
The human capital is the soul of any organisation because proper management of the human
resources determines the success of any organisation. The multinational companies (MNCs)
focus on proper human resource management and strategies related to human resource to
achieve the organisational goals and objectives (Cascio, 2015). The MNCs have many
subsidiary companies or firms and therefore managing large number of employees is a
challenge for the organisations. However, SHRM helps the employees to formulate strategies
to manage the large number of employees. The SHRM gives a competitive advantage over
other firms. This report is about the human resource management of HSBC and it has been
prepared in consideration with various strategic challenges that company is facing related to
human resource management.
Overview of HSBC
HSBC is known as the world’s local bank. The full name of HSBC bank is Hong Kong and
Shanghai Banking Corporation. HSBC is a British financial multinational company of UK.
The company was established in 1865 in British ruling country Hong Kong (HSBC, 2019). In
1991, the HSBC plc. adopted the HSBC and it is now parent company of HSBC. The
company is financial service provider and it is the seventh largest bank of the world
according to a survey in 2018 (HSBC, 2019). HSBC is the largest bank in Europe. The net
income of HSBC is more than US$15.025 billion and there are more than 235,217 employees
are working in the bank (HSBC, 2019). The operating income of the company is more than
US$19.9 billion and total assets of the company is more than US$2.558 trillion. The
Headquarter of the bank located in Hong Kong (HSBC, 2019).
SHRM in HSBC
The Strategic human resource management enables the organisation to face such type of
challenges and also prepare the organisations in advance to meet the future challenges and
environmental changes in human resource management (Masum, Azad, and Beh, 2016).
However, in easy words, it can be said that SHRM provides a linkage to human resource to
strategic goals and objectives of the organisation in order to meet the future challenges and
foster innovation. SHRM helps the organisation to focus on innovation, developing a good

SHRM Practices in HSBC 2
culture and gain competitive advantage over other competitors in the same industry (Chang,
2011).
The HSBC is a global company. Therefore, it needs to manage a global workforce while the
organisation aligning and unifying many different cultural people in its single branch
organisation. HSBC also needs to face global recruitment and HR policies and should modify
its HR strategies accordingly (HSBC, 2019). The company always focuses on the employee
performance and tries to keep its employee more satisfied. However, the increasing
competition in the banking industry and global labour market force every organisation to
fight with increasing costs of employment and tough competition in the labour market.
Strategic Issues in HSBC
HSBC is facing various strategic issues related to HRM and it is essential for the organisation
to find out suitable strategic to encounter these HRM challenges in the organisation (Sparrow,
Brewster, and Chung, 2016). The strategic issues are related to concern about the
organisational structure, matching resources to fulfil organisational future needs, quality,
culture, values, and commitment. The major Strategic issues in HSBC are as follow:
1. Strategic issues related to fair and equitable reward: The major challenge for the
company is to manage the fair and equitable reward system that removes the situation
of wage discrimination in the organisation. Fair wages and compensation
management in the organisation helps the organisation to fulfil the needs of
employees (Yeung, 2011). However, the equitable and fair wages and compensation
structure may help the organisation to improve the performance of employees and
enhance their commitment for the HSBC.
2. Strategic issues related to recruiting competent people for the organisation: The
second issues related to Strategic HRM in HSBC are to recruit competent and skilful
people for the organisation. It is really a challenge for any organisation to find
competent people for the organisation because of heavy competition in the labour
market. There are so many other companies that are providing high wages and
flexible employment conditions to the people, so it is not easy for the HSBC to recruit
and attract people towards the organisation (Fratričová and Rudy, 2015).
3. Strategic Issues related to performance management: SHRM helps the employees
to care even about the individual interest in the organisation. However, this is crucial

SHRM Practices in HSBC 3
for an organisation to manage the performance of employees to ensure the success of
whole organisation (Farndale and Paauwe, 2018). HSBC is an excellent organisation,
which has to manage large workforce. However, in such situation managing
performance of every people in the organisation is a challenge for the HR manager.
Therefore, managing performance or implementing an effective performance
management system is necessary for the HSBC.
4. Strategic Issues related to employee’s behaviour and culture at the workplace:
Employees culture and norms are the basic principles or fundamentals that ensures the
moral or ethical behaviour of employees in the organisation. It is really a difficult task
for a multinational organisation to manage a diverse workforce in the organisation
because people have different opinion norms and culture. HSBC needs to maintain an
excellent organisational culture in the organisation that further helps other people to
grow and develop in the organisation (Farndale and Paauwe, 2018).
5. Strategic issues related to employee retention and employee engagement: HSBC
needs to focus on employee retention and reducing the high employee’s turnover in
the organisation. A long-lasting relationship of organisation with the employees is the
key of success for any organisation. HSBC is facing high attrition rate in the
organisation. The organisation needs to provide all the facilities and resource to the
organisational people, so they can stay in the organisation for log-term.
SHRM Development Strategies and Practices
To become a successful organisation and utilise the full human resources, an organisation
needs to practice following SHRM development strategies that are crucial for HSBC as well
to improve its employee’s performance and better job satisfaction:
1. Hiring the Right People: Selective hiring is the most significant and important HR
practice in any organisation. It is really necessary for any organisation to recruit
competent people who are able to perform best in the organisation. No organisation
can just hire anyone rather every organisation wants to hire those people who fit for
the job. Company want to hire those exceptional people who add values in the
business. For example, Apple and Google are known for hiring best talent for their
organisation. The company recruit people on the basis of various skills such as
emotional intelligence, spiritual intelligence and based on their IQ level. This helps
the company to hire most talented and competent people for the organisation. The

SHRM Practices in HSBC 4
benchmark set by these organisations must be fulfilled by every candidate before
hiring process (Khan, 2015).
2. Fair and performance-based compensation practices: The organisation needs to
focus on contingent compensation practice that gives more benefits to the employees.
A suitable and competitive salary or compensation package in the organisation helps
the company to retain people in the organisation for long time (Zott and Amit, 2010).
The organisation needs to pay above than average compensation to the employees
because fair wage not only retain people for long time rather it also establishes a good
relationship between management and employees. For example, Sage Incorporation
that is known for healthcare and medical services is sharing its part of profit in
employees and this is part of its business model. This motivates the employees to give
their best participation in the organisational work (Caldwell, Truong, Linh, and Tuan,
2011).
3. Self-managed and effective teams: Teamwork is an important aspect of corporate
organisations. Teamwork is beneficial for the organisation to achieve the
organisational goals with efficient and effective ways. A team is consisted with
different type of people having different thinking, knowledge and skills but they all
are working together to get the common organisational goals and objectives (Boselie,
2016). For example, FedEx Corporation, which is known for the best employment
practices and it treats its employees in such a manner that it increases the trust of
employees in the management. The company practices “people-service-profit”
philosophy, which is related to excellent care of employees and provides them proper
facilities and wages to improve their performance. This will also lead to a better
corporation and support among the employees and self-manage teams that is goal
oriented.
4. Regular training and development programs: Training is one of the important
aspects of SHRM that not only helps to improve the performance of employees rather
it also helps the employees to coordinate and cooperate each other as a team member
to achieve the organisational goal (Guest, 2011). As a HR manager, it is responsibility
of HR to identify the necessity of training in different department and for different
people. Training not only helps to grow and develop new skills rather it also updated
the employees with latest skills and knowledge that further helps the organisation to
improve the productivity (Masum, Azad, and Beh, 2016). The best example of it is
AMX Company, which is known for its best employees training practices. The

SHRM Practices in HSBC 5
company provides regular training to its employees and staff. The training is
conducted in open space area where every member of the organisation can
communicate with each other and it further improves the workplace culture and
environment. Apart from this, the company hires to those people research the
company throughout their career before hiring process. This helps the company to
make just little efforts in training period to enhance the knowledge and skills of
people in the organisation.
Proposed Training Strategy to Create High Performance
Providing employee training is an essential function in any organisation. Training determines
the success and failure of the organisation. Most of the large business organisation has formal
training for the employees that enables the employees to enhance their knowledge and skills
for achieving organisational goals and objectives (Dimba, 2010). However, a company spend
money on employees to provide training to them because they want to retain the people for
long time in the organisation. For the successful training, organisation needs to focus on
following strategy points:
1. Analyse the needs of training: The first step in training is to identify the needs of
training. The HR manager must identify that why training is needed and determine
about the requirements and needs of the organisation to conduct training. In the first
step, the main focus should be on identifying the required skills, knowledge, and
expertise that is necessary for employees to accomplish the organisational goals.
2. Identify the skills Gap: The next step in the training strategy is to identify the gap
between the existing knowledge and experience and required knowledge and
experience of employees. It is really important for HR manager of the organisation to
identify the core competencies, skills, and abilities of employees to recognise the need
of training in the organisation (Kaufman, 2012).
3. Prioritize: Training helps the employees to develop new skills and knowledge, so
they can perform best in the organisation. However, every organisation spends so
much money and resources on training programs. There are some skills, which are
essential in the organisation to develop and learn. The HR manager of the
organisation must identify these important skills and knowledge and provide training
in those specific areas to the employees. The prioritization of the HR to provide
training based in those needs and strategic initiatives of the organisation, which is
crucial for the organisation (Ariss, Cascio, and Paauwe, 2014).

SHRM Practices in HSBC 6
4. Plan and deliver training: The final step in training planning is to execute the
training functions in the organisation. However, execution of training function is so
crucial because a best strategy will be useless if execution is not done in appropriate
manner or in proper way. Company should also involve every employees and staff of
the organisational training function who needs training to improve or develop their
skills and knowledge for organisational success and growth.
HR implementation Plan to Create High Performance and Competitive Organisation
Executives and HR professional in HSBC plays major role in talent management and
employee’s performance management (HSBC, 2019). HSBC is known for its best employee
performance management, but the strategic issues related to HRM in the company forces the
company to consider the basic talent management plan for overall development of the
organisation (Kramar, 2014). The HR management generally need to focus on basic talent
management functions such as hiring and recruiting people, SHRM functions and its
requirements, performance appraisal strategies and training and development of people in the
organisation. To ensure success business leader must be engaged in the high performing
employees, which is crucial for the success of the organisation (Briscoe, Tarique, and
Schuler, 2012). HSBC should follow these things in implementing HR strategy in the
organisation:
Proper HR Planning: To become a successful organisation, HSBC needs to work on
preparing an effective plan for the development and growth of the employees. It is really
important for the HSBC to identify the need of various HR strategies and then execute the
plan in the organisation, so it can benefit to the organisation. At the initial stage of the HR
planning the HR or senior manager needs to communicate with the people and explain the
employees that what are the mission and vision of the organisation and how training help
them to achieve the organisational goals. It is really beneficial for the HSBC to communicate
its goals and vision to the employees, so they can understand their role in the organisation.
Communicating the strategy and goals of the HSBC to the employees helps the HRM
department to concrete methods that HR strategy can use to enhance the effectiveness of HR
practices (Luthans and Doh, 2012).
Recruitment and Selection of People: Recruitment and selection of people for the
organisation is a tough job for the HR manager. It is known that there is a tough competition

SHRM Practices in HSBC 7
in the world labour market. HSBC will have to face a strong competition from the
competitor’s company in recruitment and selection of people. HSBC needs to focus on those
sources of talent hiring that provides best talent to the HSBC (Marler and Parry, 2016). Apart
from this, the company can also recruit people from various online sources or third-party
contractors who provide instant solution to the company to recruit and hire people for any
organisation. However, HSBC operates its business at global level, so the company needs to
manage a huge diverse workforce in the different location of the world. Apart from this, the
company should also focus on retaining new and potential workforce for the organisation. For
this, HSBC can conduct seminar and placement seminars in different colleges and
universities to hire fresh talent. A good salary package of HSBC can also attract the fresh
talent towards the organisation (Lai, 2012).
Developing excellent culture in the organisation: Culture is one of the important expect of
any organisation that determines the behaviour of employees at the workplace (Noe,
Hollenbeck, Gerhart, and Wright, 2017). HSBC needs to provide adequate training and
development programs to its employees that enable the workers and employees of the
organisation to know the organisational principles and norms and follow those norms in order
to achieve the organisational objective and goals. HSBC needs to conduct occasionally
interaction or induction program for the employees that further helps the employees to know
about the cultural practices of the organisation. However, the organisational function also
helps the employees to make a strong bonding and relationship with other employees
(Maditinos, Chatzoudes, Tsairidis, and Theriou, 2011).
Performance Management and Appraisal Strategies: Performance is the key
consideration in any organisation. Managing performance of employees is a tough job for HR
manager. The top executives and HR of the organisation should ensure an adequate and
transparent performance management system in the organisation. HSBC has large bunch of
employees who are working in different department of the company (Paauwe and Boon,
2018). Therefore, the HSBC needs an effective performance management system that is
based on enhancing the employees’ performance and confidence in the organisation. It is also
crucial that the appraisal system of the organisation should be aimed to provide proper
growth and development of employees in the organisation. HSBC is a global financial
organisation and it is known for its large human resource management practices. However,
the company needs to focus on employee satisfaction and trust because these are the things
that motivate the employees (Masum, Azad, and Beh, 2016).

SHRM Practices in HSBC 8
Reward System: The Company need to review its reward system, as reward and
compensation are two key factors that motivate the employees towards their performance.
HSBC need to link the reward system with the performance of employees (HSBC, 2019).
However, another thing that is crucial for the HSBC is discrimination in wages. The gender
pay gap in the organisation is more than expected level in the organisation, which is a crucial
problem for HSBC. The company needs to make balance between the pay of men and
women. HSBC can also use the merit pay system in the organisation. The merit pay is
separated by employee’s competency and based on the inflation rate where salary of
employees increases with percentage change in the inflation rate (Renwick, Redman, and
Maguire, 2013). However, determination of appropriate reward system not only satisfies the
current workforce in the organisation rather it also helps the organisation to attract potential
workforce such as college students and professional towards the HSBC.
Conclusion
As HSBC is a world class bank in the banking sector and finding its position in the top 20
banks of the world, the proper implementation of HRM strategy took the organisation at new
level. The HRM strategies and practices help the organisation to become a bank of customers.
However, HSBC always ensure that the employees of the organisation follow the rules and
regulation of the organisation and adhere the policies within the organisation. This is the
reason that makes this organisation world’s best banking organisation that cares about
employee’s performance and customer satisfaction both. These qualities make HSBC more
successful banks among top banking organisation of the world. However, if the bank focuses
on recruiting new talent in the organisation, providing proper training to the existing and new
people in the organisation and implement a better performance management system in the
organisation, it become world’s best banking organisation in next few years. HSBC should
also consider the reward system and provide competitive pay to its employees that helps the
organisation to retain its customers for long time and establish a good relationship with
employees that further enhance the performance of employees as well.

SHRM Practices in HSBC 9
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