Bank of Baroda: Human Resource Management Strategy

Human Resource Management strategy may be defined as a calculated means by which the enterprise deploy its human resources to accomplish its purpose and basic objectives under the most advantageous circumstances. This implies that the HRM strategy defines the direction in which the organization intends to move and establish the framework of action through which it intends to get there due to the efficiency of the workforce and that is the HRM strategy that Bank of Baroda has emphasized on.

Bank of Baroda is a financial institution which has many subsidiaries in many countries and has its headquarters in India. This financial institution has a HRM strategy that has enhance the achievement of its objectives over the past years. This is because the institution management and especially the Human Resource Department believe that people are the most important asset in the institution as compared to other assets that aid in running an organization.

Organizations have a human purpose and they are always formed and maintained on the basis of mutuality of interest among the participants. People see organizations as a means to help them to attain their goals while organizations need people to accomplish their objectives. Therefore if mutuality is missing, it makes no sense in trying to assemble a group and develop a cooperation because there is no common base on which to build. Therefore for attainment of organizational effectiveness, human resource is the most important asset that has been paid much attention by the management of Bank of Baroda.

Human resource in the institution has the responsibility to coordinate all the activities within the financial institution and they have to ensure efficiency in productivity thus increase in productivity which in turn leads to rise in profit level. The institution policy has been always been to recruit competent and qualified personnel that can work efficiently and effectively and thus increase the output of the institution. It is obvious that all institutions in the financial sector of economy aim to gain competitive edge over their rivals by practicing Strategic Human Resource Management (SHRM), and this institution has not been left behind in containing competition from the rival firms because it has formulated policies that can cope with the ever increasing competition.

The procedures adopted by the HRM Department of Bank of Baroda has been viewed to be of high standards as it is evident in the procedures of recruitment and selection exercises has always yielded good results in terms of sourcing the right personnel. These procedures include recruitment and selection process that ensures sourcing the right people to work in this institution.

Bank of Baroda HRM approach has always fit both local and global environments. The local approach that the Bank of Baroda has taken is mainly recruiting the local people to work in the institution. This has led to attraction of customers because the local people will always engage in business transactions that involve their fellow citizens. This has enabled the financial institution to do well in the financial industry and become competitive in the banking industry and the institution has coped with competition from banks like Barclays and Standard banks. Because of invention of advanced technology the world has increasingly become a village and as a result global business is the modern form of business in this 21st century.

Because of globalization there have been great disregard to national borders, governments have lower hand in controlling the flow of their economies and MNC’s are now not restricted to only one particular country as it was before. This has been the case to Bank of Baroda and its approach towards globalization is said to be commendable. The institutions HRM strategy has enabled it to diversify into many countries worldwide. The policies that have supported this include the following; Introduction of new technologies that has boosted financial activities globally, constant training of the institution’s staff, sourcing employees globally, and the positive attitude of the entire management towards change.

The other HRM strategy taken by the Bank of Baroda is that of formulating corporate policies that enhances attainment of goals. The institution’s corporate planning process has integrated the bank’s overall planning system through formulating of clear vision and mission statement that can be attainable, for example, its vision has to reach to more customers and it has managed to do so by diversifying to many countries. The other HRM strategy implemented by the bank is that of fostering a good environment for conducting its business activities. The human resource of the institution has been assigned the responsibilities of constant reviewing of the institution’s competitiveness through SWOT analysis that is analysing the bank’s strengths, weaknesses, opportunities, and threats. This has helped the bank to perform well in the banking industry as compared to other banks.

There are similarities and differences that exist between the Bank of Baroda situated locally and its headquarters in India. The main similarity is its overall mission statement of providing financial services to its customers. The institutions culture of doing things is applied universally to all the subsidiaries around the globe. The bank has a well laid down strategic planning system that has ensured that a good environment which has increased the chances of survival and prosperity of this institutions.

The other similarity between the local subsidiary and the institution headquarters is the issue of commitment to social responsibility. The Bank’s HRM approach outlines what the community expects from the institution and this is evident when the bank participates in community projects like providing funds to the needy and engaging in cleaning the environment. These similarities have led to achievement of goals both locally and internationally.

The other similarity is that both the local subsidiary and the headquarters have adopted the same policies in their management practices for example both have emphasized the application of managerial skills that foster attraction of customers e.g. they have customer care centres that are able to handle any issues that the customers might raise regarding to the financial activities of the bank. The other similarity is that both the subsidiary and the headquarters have embarked on recruiting competent and qualified employees that can work efficiently. Also the other similarity adopted by both institutions is better remuneration of their employees. They have been recorded to be paying fair wages and also provide allowances such as fringe benefits among others.

There also exist differences between Bank of Baroda situated locally and its headquarters. The main difference is that major decisions are made from the headquarters and the local subsidiary has fewer roles in the overall decision making process. The other difference is that the headquarters office is larger and provides large variety of financial services as compared to that of the local subsidiary. This implies that the competitive advantage of the headquarters is higher than that of the local subsidiary. Also the other difference is that in the headquarters sourcing of employees is done globally unlike in the subsidiary whereby local labour force dominates the financial institution structure. This has led to success of the bank because it can cope with the changes brought about by globalization.

In the recent past, financial activities have become increasingly global in some way because of the need to gather and increase the financial institutions financial bases. Advancement in technology including communication efficiency and better international relations has contributed to the promotion of the international trade and especially has led to many financial institutions including Bank of Baroda to diversify. Competition has however become a great challenge to the success of global business management but most financial institutions including Bank of Baroda are rising to the challenge.

To continue to take advantage of the world being global village and to achieve greater investments and better market opportunities in the international market, it is necessary that Bank of Baroda carry out primary and secondary market research to ensure that information regarding the target markets in countries desired is obtained.

However, local financial institutions too should be enhanced and good HRM approach should be adopted by Bank of Baroda in order to protect the local subsidiary from competition from other financial institutions who also seek to the advantage of globalization. We can therefore conclude that good and efficient HRM strategies, policies and procedures adopted by Bank of Baroda has led to prosperity and the main ingredient to it has been international marketing which have been employed by the bank in order to increase its market share and profits.

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