Human Resource Policies for Staff Performance

Introduction

As Bratton and Gold (2003, p. 11) explain, “human resources management is the function in an organization charged with the responsibility of implementing policies and strategies related to management of individuals who comprise the work force of an organization”. In any business, “the human resource management strategy is expected to maximize returns on investment in the organization’s human capital, and at the same time do so in a way that creates minimal financial risks” (Bratton and Gold, 2003, p. 11).

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As McNamara (2009) argues, “successful organizations are becoming more adaptable, resilient, quick to change directions, and customer-centered”. The working environment today is constantly changing, and demands strategic planning and organization. Technological innovations such as Human Resource Management Systems have made it easy for organizations to handle HR information. Human resource management features personnel administration, organizational management, industrial management and manpower management.

Gaining competitive advantage has become a major challenge for businesses today. As markets get larger and more competitive, strategic human resource management is a key recipe when formulating effective strategies. Employers must be able to establish what works in their human resource management efforts and what doesn’t, to eliminate those strategies that waste time and cost the business.

Another major challenge facing businesses is ensuring talented employees stay motivated and disciplined. A good employer must be courageous enough to let go of employees who affect a business’ results negatively. If such qualities lack, holding on to employees simply because they are talented may be costly for a business.

Strategic Human resource management

“Strategic human resource management (SHRM) aligns an organization’s human resources function to its core business objectives” (Wright, Timothy and Lisa, 2003, p.22). The task of managing employees is not as daunting as it may sound, as long as an organization fully equips itself with the strategies, skills and knowledge to bring out the best of its employees. Despite the fact that proponents of human resource strategies have outlined their benefits to organizations for a long time now, they are not as widespread as may be expected. The results have been poor management of human resources and increased costs of hiring and training new employees every too often.

In Strategic human resource management (SHRM), “compensation management involves the analysis and effective control of employee remuneration and covers salary and all benefits” (Serco, 2007, p. 2). It aims at assessing the nature of rewards available for employees, the expected results and actual results. There are three parts of reward management namely; the purpose, return on investment and the most appropriate places to apply it. Many times compensation and reward management “constitute the financial reward aspect which incorporates processes and procedures for tracking market rates, measuring job values, designing and maintaining pay structures, paying for performance and giving employee benefits” (Heneman, 2002, p. 14).

However, it is important to note that it is not just about monetary compensation. It is also about other non-financial rewards which boost an employee’s confidence and provides motivation. Key issues to address in human resource management include how to manage external and internal competitiveness and equity, as well as how to reward individuals and promote team work as well.

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Human resource management policies

HR policies serve several purposes in an organization. They allow organizations to be clear with their employees on issues that affect the way they work and achieve set objectives. Such issues include what employees should expect from the organization, how policies and procedures work in an organization, acceptable and unacceptable behaviors, the organization’s expectations on employees, among other important issues.

As Baptiste (2007, p. 285) argues, “the establishment of policies can help an organization demonstrate, both internally and externally, that it meets requirements for diversity, ethics and training as well as its commitments in relation to regulation and corporate governance”. Gelade (2003, p. 384), further explains that “the establishment of an HR Policy which sets out obligations, standards of behavior and document disciplinary procedures, is now the standard approach to meeting these obligations”.

Human resource management and policies address the most appropriate performance management processes for a business, how power should be devolved to the managers level, and how they can manage their own HR strategies while staying within the corporate policies to allow every employee is reached (Paauwe, 2009). It also addresses how to structure and design job evaluation schemes. These puts into focus performance measures and what they are based on.

Ramsay, Dora and Bill (2000, p. 501), define HRM policies as “systems of codified decisions, established by an organization, to support administrative personnel functions, performance management, employee relations and resource planning”. Different industries, organizations and markets have their own set of circumstances put together to develop policies that suit them. Many organizations today realize that a stable and strong workforce is their biggest asset. “Human resource management (HRM) policies provide an organization with a mechanism to manage risk by staying up to date with the current trends in employment standards and legislation” (Baloch, Nazim, Tahir, Anjum and Awais, 2010, p. 211).

Area of study

Banking sector in Nigeria

“As in any nation, the banking and financing system is a very important aspect when it comes to economic development” (Saletti, 2009, p. 1). For an emerging market such as Nigeria, the banking system plays even a more crucial role towards growing and stabilizing the economy. High rates of poverty leave the financial systems with a huge responsibility of ensuring the that the country’s economic developments and benefits reach even the poor.

The country’s GDP has had positive trends since 2005. According to the World Bank, “this is an important economic achievement for an emerging market like Nigeria” (Saletti, 2009, p. 1). Such developments have made the banking industry quite competitive. A good number of Nigerian banks enjoy international recognition and have been listed among the world’s best banks. Among these banks is the Zenith Bank, the Union Bank, First Bank, among others. More investment projects are still coming up all over the country, and there are expectations of a more vibrant banking industry in the region.

The results of such positive trends in the country have led to increased competition in the banking industry. Like every other industry, human resources still rank among the most important assets for the banks. Therefore, the banking labor markets in Nigeria are getting more competitive each day. Human resource strategies and policies play a significant role in determining a bank’s ability to access and retail the best talent in the markets (Katou, 2008). This study will focus on the bank’s human resource strategies, with specific attention on promotion, compensation, and disciplinary policies in Zenith Bank.

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Comparison between Zenith Bank and some of the banks in different parameters in the year 2010 are summarized below:

Parameter Zenith Bank Comparison
Earning income 192.4 B First Bank at 230.6B
Customer deposits 1.38 Trillion First Bank at 1.45 Trillion
Profit after tax 37.4 Billion GT Bank at 38.3 Billion
Shareholder’s funds 363 Billion IBTC at 372 Billion

Fig 1: Comparison of Zenith Bank and other banks based on different parameters.

Data available in Daily Independent Newspaper, 26 April 2011.

Zenith Bank

“Zenith Bank Plc. (ZETH.LG) is a Nigerian bank based in Victoria Island, Lagos” (Zenith Bank, 2011). The business is ranked among the biggest in West Africa in terms of assets value. As at 2007, the business was valued at more than $2.1 billion (Zenith Bank, 2009). The bank has a well spread network and enjoys a presence in many other countries such as Gambia, South Africa, the United Kingdom, and Ghana among others. The bank was established in 1990 and became a public limited company 14 years later. It employs more than 3,911 employees. It is headed by Godwin Emefiele as the Managing Director/Chief Executive Officer.

“In 2004, after the bank had been listed in the Nigerian Stock Exchange, credit rating agency Fitch Ratings identified its credit as AA- on their long-term scale” (Zenith Bank, 2010, p, 1).

Rating Agency

Rating

Agusto & Co. (2003-2007) Aaa
Fitch Ratings (2008) AA- (ngA)
Standard and Poor’s (revised in 2009) ngA

Fig 2: Zenith Bank ratings. Information available at: www.zenithbank.com, 2011.

The company’s vision is “to build Zenith brand into a reputable international financial institution recognized for innovation, superior customer service and performance while creating premium value for all stakeholders” (Zenith Bank, 2011). This the bank tries to achieve by providing unique products, aggressively marketing itself and ensuring all stakeholders’ needs and expectations are fully met. Its mission is “to establish a presence in all major economic and financial centers in Nigeria, Africa and indeed all over the world; creating premium value for all stakeholders” (Zenith Bank, 2011)

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According to the management, “the bank has over the years, through strategic deployment of its people, information and communication technology (ICT) redefined customer service standards and created diverse delivery channels” (Zenith Bank, 2011). The bank treats its human resources as an important asset by ensuring their needs are met and addressed. With over 3,000 employees to cater to, human resource management plays a critical role in the bank.

Its profits in the 2005-2009 period are summarized below:

Five years financial summary of Zenith Bank. 
Fig 3: Five years financial summary of Zenith Bank. 

Why is the study interesting

The results of a vibrant banking industry in Nigeria have been increased levels of competition among banks targeting different market segments. Like every other industry, human resources still rank among the most important assets for the banks. Therefore, the banking labor markets in Nigeria are getting more competitive each day. Human resource strategies and policies play a significant role in determining a bank’s ability to access and retail the best talent in the markets.

According to Stewart, et.al (cited in Newman, 2008), the quality and continuous improvement for an organization to compete in the highly competitive business environment of today comes from its employees. With the growth of the Compensation policies play a significant role in determining the level of satisfaction among employees in a bank. Disciplinary is a crucial determinant of a bank’s ability to sustain quality, performance and customer satisfaction.

As a Branch manager in Zenith bank, I have the privilege to appraise and review staff performance. Interestingly, contribution per staff has been on the downward slide for 3 years consecutively. Discussions with most staff reveal that majority of them are disgruntled with recent HRM policies especially as it has to do with the disciplinary, performance appraisal and compensation policies.

Theories and models

Staff turnover trends in the banking industry

The banking and financial industries seem to be on the right path towards curbing the problem. As evident by a survey conducted by Nobscot, 15%-16% rates of turnover are still significantly high enough to cause worry in the industry.

Employee turnover in the banking sector compared to other industries.
Fig 4: Employee turnover in the banking sector compared to other industries.

HRM models

In today’s scenario, there are various management models available for a business. As Armstrong, Duncan and Peter (2010, p. 53) explain “more organizations today choose to develop increased awareness of the need to treat job measurement as a process for managing relatives, which, as necessary, has to adopt to new organizational environments and much greater role flexibility”. Others choose integrated management structures that cover every employee regardless of their position. Team management is a common trend today in most organizations as they more importance is being place on teamwork.

Other trends include performance awards and more sensitivity to functional markets to enable organizations retain talented employees (Mahoney, 2001). Therefore, it is important that the management takes the initiative to ensure that every person, regardless of their level of work, is well covered by a company’s policy, is well appreciated and recognized through their managers.

Management styles

There are different types of management styles in HRM. The most commonly known are authoritarian, democratic and Laissez-faire management styles (Pride, Robert and Jack, 2010). These styles of management determine the area of freedom for the managers and employees. The authoritarian manager does not allow for any forms of negotiation but instead makes decisions and announces them to everybody else.

The Laisez-faire type of management is where a manager presents decisions but at the same time the subordinate is free to make decisions and do what they want to. In the democratic style of management, subordinates are allowed to function and make decisions but do so within defined limits (Pride, Robert and Jack, 2010).

In this management styles, the difference is level of power. One is more formal and legitimate, one is charismatic, while the other is manipulative and exploitative. The level of relationship between the manager and the subordinate varies. Authoritarian management has a one way form of communication where the manager passes orders and decisions to the rest of the team and the decisions cannot be questioned. The laissez-faire allows very little communication between the two levels of management as people do what they want while the democratic form or management allows full consultation and the communication channel is very open (Frame, 2003).

Purpose of study

Aims

  • Encapsulated in the words of Stone (1998), ‘HRM is either a part of the problem or part of the solution in gaining the productive contribution of people’.

Objectives

  • Explore systems currently used by HRM to enhance performance.
  • Research on appraisal/promotion, compensation and disciplinary policies in Zenith PLC Bank and how they affect performance.
  • Understand which of these systems work and why.
  • Understand which of the currently available HRM policies in Zenith Bank are not effective.
  • Collect views on how defective systems can be improved.

Research question

The primary question in this paper will be; How effective is the bank’s performance management policies specifically appraisal/promotion, compensation and disciplinary policies?

Other questions arising from the main question include:

  • What systems are currently used by HRM to enhance performance?
  • What is the effect of the appraisal/promotion system on staff? Does it motivate or demoralise the team?
  • Which of these policies are not effective and why?
  • What can be done to improve on the defective systems?

Rationale

This research has specific practical value. Having considered the results, it will be possible to state whether HRM policies play a vital role in business’ success or not. The answers will explain different roles of compensation, promotion and disciplinary policies in Zenith Bank, as well as how these policies contribute to the success of the bank. The influence of human resource management policies in a business is evident from their in coaching, development and perfecting the human resource capital in a business.

Structure of the dissertation

The dissertation’s structure is summarized in the table below

Chapter number and name Outline
1. Introduction
  • HRM management
  • Area of study
  • Theories and models
  • Purpose of study
2. Literature review
  • Academic sources review
  • HRM policies
  • Employee satisfaction and motivation
  • HRM in Zenith
3. Methodology
  • Data collection
  • Structure of survey
4. Discussion and analysis
  • The survey’s outcome
  • Results analysis
5. Conclusions and recommendations
  • Summary of the study’s outcome
  • Proposed improvement strategies
6. Reflections
  • Summary of the project’s tasks
  • Recommendations for a future study

Table 1: Structure of the dissertation.

Literature review

Academic sources review

A literature review will be used to understand the background of the problem, possible solutions, trends and solutions already in place in the banking industry. As part of the papers information collection methods, it will be used to understand what experts, authors and other researchers have to say about human resource management in the business world. The banking industry is among the fastest growing in the world currently, and its demands for human labor are high.

Several authors and research projects have been put forward as researchers try to understand the industry, how it has developed, its challenges and available opportunities. The literature review will cover HRM trends, effective HRM, the banking industry management and organizational behavior, HRM as a critical tool in a business, labor markets in different regions, the role of technology, as well as retention, incentives and challenges.

Strategic human resource management is explained by Farhad who argues that “employees play a decisive role in achieving a sustainable competitive advantage” (Farhad, 2007, p. 65). SHRM should be considered a critical tool in managing human resources and businesses must be ready to invest in the concept. A good relationship between employees and businesses allows people to air out their complaints before seeking out other job opportunities.

Bratton and Gold, through their book, human resource management theory and practice, have focused on understanding the different trends in HR management. The authors point out that human resources are a business’ biggest and most treasured wealth. Therefore, effective management of human resource is paramount in any organization. Maintaining a competitive advantage requires a highly competent and committed workforce. It is for these reasons that the banking industry needs to act promptly and reduce the rate of staff turn-over in their industry.

Baloch,Nazim, Tahir, Anjum and Awais explain the relationship between HR practices and perceived employee’s performance of Banker’s, using Pakistan as a case study. Their study measures the impact of three HR practices which are promotion, compensation and performance. The authors conclude that “there is a significant relationship between compensation practices on perceived employee performance, promotion practice and perceived employee performance and perceived employee performance” (Baloch, Nazim, Tahir, Anjum and Awais, 2010, p. 210). They further point out that these factors influence and have a relationship with the way performance is evaluated.

Ramsay, Dora and Bill help the reader understand the relationship between management practices and performance outcomes. These two relate through the incentive and motivation effects. The banking industry demands a large number of employees and at the same time experiences the considerable levels of staff turnover. “When this is happens, there is loss of skill, knowledge and wisdom that the employees had accumulated over their stay in a business” (Becker, 1996, p. 800). Getting a new team to rise up to that level not only takes time, but it is also costly and affects services negatively.

Cesyniene explains globalization and human resource management. The author gives an introduction of new technologies available in HRM today, and how they affect the human resource management in terms of numbers of employees. According to the author, better motivation and performance of the employees in a company has been brought about in many ways by the high levels of competitiveness of the human resource market. Organizations are increasingly putting more emphasis on productivity and quality. Improved technology has come with many advantages as well as disadvantages to the human resource industry. With increased machinery and their efficiency, many people continue to lose jobs as a result of their jobs being taken away by machines.

Czentre takes the discussion further and explains labor markets and HRM in global enterprises. The book focuses on contracting and outsourcing as a major factor in many organizations’ human resource management. “The rationale behind outsourcing is that it allows products and service providers to specialize and concentrate on core competencies making them more productive” (Czenter, 2002, p. 111).

According to the author, outsourcing has the advantage of creating more opportunities, increasing income and improving dignity to service and work since most people are able to specialize and perfect their services. “Many companies are choosing to outsource departments that may not be directly related to their core businesses” (Czenter, 2002, p.123). This means that the human resource has to be well in line with such plans in knowing where to recruit and where to down size workforce.

Human resource policies, their concepts, processes and applications are discussed by Fazey. The author starts by pointing out that “contemporary throughout in HRM focuses very much on HR strategy, but neglects the policy function as the vital link between strategy and practice” (Fazey, 20110, p. 17). In his work, the author aims at providing practitioners with guidelines on how they can design, implement and maintain effective HR policy functions.

Becker (1996, p. 779) argues that “human resource management decisions are likely to have an important and unique influence on organizational performance” (p. 779). This argument is based on the fact that economic environments are rapidly changing and characterized by new trends. As he further explains, “the markets are characterized by such phenomena as the globalization and deregulation of markets, changing customer and investor demands, and ever-increasing product-market competition” (Becker, 1996, p. 770).

For businesses to compete effectively, they need to align their resources with what they intend to achieve. In the author’s opinion, human resources are a critical resource in any business. They influence a business performance in their ability to contribute to the business’ revenue growth, and improve it efficiency.

As more businesses embrace SHRM and its principles, those in developing nations such as Nigeria still face challenges implementing them. This is as a result of limited resources and professional capabilities. Tessema and Joseph examine how and the extent to which HR policies and practices affect performance in a business. Using the Eritrean civil service as a case study, the authors argue that “to a large extent, a business’ performance is judged on the basis of the performance of the human resources” (Tessema and Joseph, 2006, p. 86). Employee’s performance on the other hand is largely influenced by a business’ policies on tasks management, duty allocation, performance measure, compensation, among others.

HR managers, and the policies they put in place, play a significant role in diffusion of ideas to build a performing team in a business. As businesses struggle to stay competitive and profitable, “one factor looms large as an explanation for the difficulties: the mental models or mind-sets of senior leaders” (Pfeffer, 2005, p. 124). Improving productivity can only be achieved if human resource managers adopt a way of thinking that ensures treating employees as a significant part of the business, and ensuring they are compensated as so. This in return builds loyalty and commitment levels among employees. This argument is supported by Banker, Seok-Young, Gordon and Dhinu (1996), who argue that “a vital ingredient of excellent service quality is having highly motivated employees and rewarding their superior performance”.

In their book, Marchington and Adrian study the relationship between HRM and performance. The book focuses on investigating how best practice HRM can improve a business’ performance. By gathering information from other researchers, the authors regard “employment security as fundamentally underpinning the other six HR practices, principally because it is regarded as unrealistic to ask employees to offer their ideas, hard work and commitment without some expectation of security and concern for their careers” (Marchington and Adrian, 2005, p. 73).

Human resource management policies

Staff Promotion policy

Promotion

“The purpose of promotion policies is to provide greater opportunities for promotion and transfer from within and to improve the upward mobility potential for qualified personnel” (Rao, 2010, p. 1). The author continues to explain that “since seniority and merit suffer certain limitations, a firm should institute a portion policy that gives due weightage to both seniority and merit” (Rao, 2010, p.1). For a big organization such as Zenith Bank, it is important that there is a balance between the two. It is important that there is an equitable and fair basis for promotion based on seniority and merit.

Demotion

Singh (2011, p. 1) defines demotion as the “downward movement of an employee in the organizational hierarchy with lower status and pay”. Demotion can be in the form of loss of rank, loss of power, reduced earnings, or loss of influence in major processes and decisions in a business. Depending with a business’ policy and laws, demotions can happen due to various reasons. It may be due to inability to meet the challenges of a new job position, inability to meet objectives and targets, or changed job designs.

Demotion also happens when a business is going through adverse conditions and may need to downsize. In such situations, some businesses will choose to downgrade job position rather than let go of employees. Demotions could also be used as a disciplinary tool against erring employees (The University of British Columbia, 2010).

A business must ensure that its demotion policy is considerate of how such a move will affect an employee. As Rao, Sankar and Sriram (2010, p. 96) explain, “demotion may have a devastating impact on employee morale”. A decision to demote an employee could also permanently impair their relationships with colleagues, as well as the management. Therefore, it is important that when effecting a demotion, a business must ensure that it is not exposing itself to consequences that could hurt it.

Compensation policy

Compensation and reward methods are categorized into two major categories; monetary and non-monetary. “Compensation management involves the analysis and effective control of employee remuneration and covers salary and all benefits” (Serco, 2007, p. 1). It aims at assessing the nature of compensations available for employees, the expected results and actual results. There are three parts of compensation management namely; the purpose, return on investment and the most appropriate places to apply it (Hunter and Lorin, n.d).

As Heneman (2002, p. 76) explains, “it constitutes the financial reward aspect which incorporates processes and procedures for tracking market rates, measuring job values, designing and maintaining pay structures, paying for performance and giving employee benefits”. However, it is important to note that reward management is not just about monetary compensation. It is also about other non-financial rewards and compensations which boost an employee’s confidence and provide motivation.

Monetary compensation

Tropman (2001, p. 34) defines direct compensation as “monetary benefits offered and provided to employees in return of the services they provide to the organization”. This type of compensation is present in every industry, business and organization. It is given at an interval defined by a business’ policy, and sometimes a state’s policy on labor. “These benefits include basic salary, house rent allowances, conveyance, leave travel allowances, bonus/ Pf/Gratuity, among others” (Tropman, 2001, p.45). They are given to employees as one, a combination of a few or all of them, depending with a business’ compensation policy.

“Salary is the amount received by the employee in lieu of the work done by him/her for a certain period, say a day, a week, a month or even a year” (Tropman, 2001, p. 50). The duration after which an employee is paid is dependent with the business’ compensation policy, the worker’s contract with the business, and several other factors. The amount of money paid as salary is further dependent on an employee’s contract and the business rates of compensation for the position at which he/she is in (Becker and Mark, 1992).

House rent allowances can be in the form of cash or paid for accommodation for employees. House rent allowances are paid to motivate employees and offer them social security. Conveyance allowances are also given to motivate employees and allow them easy movement. They are in the form of cash, paid for cabs, vehicles and petrol allowances. Leave travel allowances are given to allow employees relax by giving them money to go for a holiday, or pay a vacation for them and sometimes their families too. Other types of compensations and allowances include special allowance, bonuses, insurance and medical reimbursement.

Every employee of the bank is entitled to a salary on a monthly basis. Although basic salaries are well defined and agreed upon with employees before they are hired, it is negotiable and subject to an increase or decrease depending with different factors (Banker, Seok-Young, Gordon and Dhinu, 1996). The executive management has the powers to decide on salary increments and decrements depending with the bank’s business strategy at a particular period of time. The Nigerian government requires that employers remit their employees’ personal income tax. As a result, taxes are deducted before the salary is released for those whose salaries reach the tax bracket.

Discipline policy

Discipline measures in a business should be aimed at correcting deviations rather than embarrassing employees. Zenith Bank agrees with The University of British Columbia (2010, p. 1), who define discipline as “the means by which supervisory personnel correct behavioral deficiencies and ensure adherence to established company rules”. In today’s business environments, using positive approaches to correct problems is a more effective strategy than instilling heavy measures of disciplines. Tough discipline measures such as termination should only be applied where an employee has been constantly neglecting the company’s policies or commits indiscipline acts intentionally.

Discipline in any business must be from the employee as well as the employer. While an employee is expected to adhere to a business’ rules and regulations, an employer must be willing to respect the rights of its employees and treat them with respect (Barnard and Ronald, 2000). The employer’s responsibilities are defined through the labor laws and policies put in place by the government. An employee’s opinion must be sought when decisions which affect them are made.

Employee satisfaction

Employee satisfaction is a wide topic and a source of constant debate in the labor markets. “The success of any business is dependent on a motivated, highly performing and loyal workforce” (Iverson, and Christopher, 2011, p. 30). Well satisfied employees are more motivated and as a result, they perform their tasks better and give better results. Loyal employees are more dedicated, will defend the company and stand with it in troubled times, and will always pursue excellence (Purcell and Sue, 2007).

Employees’ loyalty is taken lightly by many companies, without realizing that lack of it could cost them a lot of money. To be successful, businesses must focus on gaining their employees’ trust and loyalty (Khera, 2010). Lifetime loyalty, though rare amongst employees, is the biggest asset any business can have.

Employment conditions in many businesses have been under constant criticism for a long time now and as a result, employees’ loyalty level is low and so is their satisfaction (Quresh, et al., 2010). This is especially so for businesses that have a presence in different countries, because they will have different experiences in different regions. In some regions such as the Middle East and some African countries, employees’ rights are not respected and working conditions are still very poor. Even as the era of slave labor slowly comes to an end in the gulf and other regions, foreign businesses investing in these countries have a hard time earning employees’ loyalty. The businesses also tend to be more reluctant to implement employee motivation measures.

In the American and European countries, the situation is completely different and employee satisfaction is a big priority for businesses. Employees fully understand their rights, governments have put in place adequate measures to ensure these rights are respected, and labor markets are more competitive. The rate of employee turnover is high and more businesses struggle to stay profitable. Costs saving measures include ensuring employees’ retention, which calls for ensuring that their needs are well met and they are well satisfied (Druker, Geoffrey, Ariane and Lesley,1996).

Part of this research will be aimed at establishing and discussing the relationship between employees’ satisfaction and their level of loyalty to a business. To understand loyalty among employees, important points to be discussed will include training and development, respecting employees’ needs, creating working favorable conditions, communication channels, rewards and recognition, and what role these factors play in achieving the same. Promotions and career development, process improvement, corporate cultures, compensations and benefits, and job enrichment will also be discussed and their roles in ensuring customer satisfaction.

Employee motivation

Motivation calls for use of incentives to achieve a higher output and productivity (Wright, Gary and Abagail, 1994). The biggest factor to consider in motivation is satisfaction. The two therefore, go hand in hand in any industry. The argument behind motivation theory is that “a motivated work force will generate much more than a demotivated workforce” (Othman, 1998, p. 20). The results are a higher output and more satisfying quality. Employees can be motivated using different types of incentives. The most common forms of incentives today are financial. They include pension, bonuses and pay increment for a certain level of achievement.

Motivation is also deemed a very critical factor for producing high quality work and minimizing wastage. Motivated staff will tend to be more pro-active and have a bigger sense of seeing things happen (Guest, 1987). They will give their best to their organization, which helps a business improve its profitability and as a result, better performances. Motivated employees are also bound to be more open about their problems and concerns and will air them out instead of letting them affect an organization’s performance.

Different philosophers present different motivational theories and give different arguments as to why they support motivation. “One of the most significant motivational theories is Frederick Herzberg’s motivational theory” (Hoffmann, 2006, p. 67). Herzberg argues that “satisfaction and dissatisfaction arise from different factors at work and they are not opposing reactions to the same factor” (Hoffmann, 2006, p. 67). Those factors motivating people are not the same that dissatisfy them. Satisfaction comes from factors which are involved in accomplishing a task. Dissatisfaction on the other hand comes from factors in the job context.

Another motivation theory is that of Abraham Maslow. His theory explains the human need hierarchy. He arranges the human needs in the form of a hierarchy from the least to the biggest. According to him, the most important human need is the physiological needs, followed by security and safety, social, esteem and self actualization needs in that order (Hoffmann, 2006). He argued that any time a need is satisfied, the next need on the hierarchy becomes dominant. He also acknowledges that no need can ever be fully satisfied but if an organization wants to motivate their employees, it is important for them to understand their level of need in the hierarchical order.

This theory enjoys a huge recognition from different managers. “This is from the fact that it is easy to understand and it has a logic that is easy to relate with” (Weiner, 2002, p. 83). However, the theory also attracts criticism for lacking empirical evidence and lacking research support for it. The two theories differ from the fact that Herzberg identifies both motivational factors and maintenance factors. Maslow on the other hand “identifies human needs and arranges them in a hierarchical order” (Weiner, 2002, p. 23).

Human resource management in Zenith Bank

Introduction

In any organization, “the human resource management strategy is expected to maximize returns on investment in the organization’s human capital, and at the same time do so in a way that creates minimal financial risks” (Janssens and Chris, 2009, p. 145). For a business efforts regarding HRM to pay returns, “the human resource department must align the supply of skilled and qualified individuals and capabilities of the workforce with the organization’s business plans to maximize returns and secure future success” (McNamara, 2009, p.1).

In an attempt to understand the human resource concept, I conducted a research on Zenith Bank PLC. The bank’s human resource department is driven by integrity, accountability and commitment towards the employees’ welfare and commitment to the organizations success and growth. “It provides a stable work environment and equal opportunities for learning and growth for all its employees” (Zenith Bank, 2011). One way through which the bank improves efficiency service, is through encouraging innovation and implementing policies that allow creativity. The management also points out that, “employees provide the same concern, respect and attitude within the organization that they are expected to share externally with each of the Zenith’s customers” (Zenith Bank, 2011).

Structure of human resource offices

When discussing human resource management, the structure of the offices is many times left out. Employees’ ability to access information and reach the human resource managers is an equally important factor. In many organizations, the front office is responsible for being a single point of contact for the rest of the organization ( Lundy and Alan, 1996, p. 113). It is also important to realize the importance of the back office as “it is responsible for ensuring full compliance of the HRM activities with the legal environment” (Schuler and Susan, 2008, p.46).

On the centers of excellence, Savanevicience and Zivile (2010, P 530) points out that “A center of excellence keeps products, processes, policies and initiatives updated, developed and fully competitive with the external world”. Such an organizational structure allows the human resource department employees and the rest of the organization to smooth out co-operation among its employees, and have a clearer definition of roles and responsibilities among team members.

Human resource structure

Like in many other organizations, Zenith PLC human resource department has a structure that fits the imperatives defined by the need for cost cutting and providing operational excellence at the same time. According to Zenith Bank (2011), their structure is designed in such a way to help further develop of the potential of human capital inside the organization. “The human resource management team at Zenith PLC focuses on enabling the power of the team’s co-operation, optimal processes and communication flow inside the team” (Zenith Bank, 2011). Putting such requirements into consideration, the resulting human resource organizational structure is divided into different segments that allow easy management of information regarding human resources.

Hiring processes, job designs and diversity

Employees’ recruitment forms a very big part of Zenith Bank PLC. “In any organization, recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all the levels” (McNamara, 2009). In Zenith Bank PLC, internal recruitment is always given priority as it provides the most cost-effective source for recruits and gives employees a chance to diversify and grow (Zenith Bank, 2011).

Further growth is made possible by continuous training, development and other performance-enhancing activities to ensure constant potential of the existing pool of employees. Performance enhancing activities include activities such as performance appraisal, succession planning and development centers. “Such activities help review performance and assess employee development needs and promotional potential” (Glanz, 2002, p. 35).

Legal issues and labor relations

“Understanding legal decisions and legislation is fundamental in any sound management of the human resources especially with the increasingly litigious society” (Griffeth and Peter, 2001, p. 32). During the research, it was clear that the bank takes seriously, and constantly updates itself on regulations and policies that govern human resource management. This includes a constant watch-out for any new regulations or changes in existing ones from the National Labor Relations Boards of Nigeria, as well as other regulating bodies in the different countries the business operates in.

Retention, incentives and compensation

Even though Zenith Bank is a great employer, the management points out that like every other business today, they too are facing major challenges in trying to retain their best employees. The human resource market has become increasingly competitive. With all the money spend on training and upgrading activities, the management reinstates that it is imperative for them to constantly motivate their employees and keep the environment as exciting as possible to retain most of them. The organization tries to reduce costs and one way of doing that is ensuring that salaries do not increase dramatically and immediately. Incentive plans have therefore been laid down to retain high-performers and encourage achievement.

The company gives targets to each employee to allow a bigger opportunity for earnings at performance incentives. The negative indicator category is aimed at keeping employees alert and on the right side of scores on both rules and performance. It includes, disciplinary incidents, unfinished assignments, lateness and other bad habits that employees should not engage in. “In recent times of a sluggish economy, compensation systems have gotten a new focus by only rewarding star performers more that the rest of the pack” (Phillips and Lisa, 2005).

Incentive pay programs have become a popular human resource practice in many organizations. “Despite their popularity, very little research has been done to examine the dynamics and dilemmas associated with implementing these programs” (Paauwe and Ray, 2009, p. 1086). Benefits and compensations are taken very seriously in Zenith Bank and there is constant evaluation of benefit packages triggered by several key factors.

Human resource challenges

The role of the human resource management is evolving with the changing, competitive and aggressive market environments (Anakwe, 2002). “With the increasing competition, locally and globally, businesses have to become more adaptable, agile, resilient, and customer-focused to achieve success in such financial environments” (Harney and Claire, 2008). Major challenges facing the banks’ HRM department include managing different employees’ cultural background, erosion of skill and managing a large number of employees in all its branches. “The company aims to use the diverse cultural backgrounds, religion, age, gender and lifestyles to respond to global opportunities more rapidly and creatively” (Zenith Bank, 2011).

Methodology

Background

The research methodology applied in this paper included study of books, academic journals, online articles, past projects by different authors, government statistics and non-governmental organizations on the banking industry. It also included a study of various works on human resource crisis management in the banking industry, using Zenith Bank Nigeria as a case study. Study of books and different articles reveals that the banking industry is among those suffering average levels of staff-turn over. To prevent such challenges, many banks and other financial service industries have realized that the most important factors in human resource management today are employee loyalty and retention. As a result, a lot of attention is being focused on employee satisfaction.

It is also clear that many banks are spending a lot of money to ensure satisfaction, safety and motivation of their employees. Communication has proved crucial in many organizations in an effort to have employees air out their dissatisfaction before making a decision to leave. Such information was collected from various reports by governmental and non-governmental organizations. These reports served very effective and relevant in trying to understand this paper’s background. Recent and past books and research papers by different authors were also helpful in understanding human resource management. Views from fellow students were also collected to get their thoughts on the subject and how it affects them.

As Weiner (2002, p 15), argues, “the best avenue for driving an organization’s performance gains is managing the implementation of its processes”. Identifying the key human resource management steps is very fundamental if an organization is expecting to have a successful implementation of its HRM strategies. “Human resource management strategies are only productive if the results will be aligned with the organization’s strategic objectives” (Weiner, 2002, p. 45).

Key human resource management processes are easily identifiable by their level of impact on its success. They are those processes whose success or failure has serious implications on a organization’s goals and revenues. For a business to succeed in human resource management, its implementation and management has to be given priority and has to be right. Its objectives should also be specific to an organization’s unique policies, goals and approach. The study was aimed at establishing the truth in these arguments, and establishing areas of improvement.

The research adopted a triangulation method. This means that multiple methods of quantitative and qualitative methods were utilized. This decision is justified by the fact that while the research was interested in measuring the different policies and their effectiveness, it also attempted to qualify their impact on the performance of the employees. Triangulation further allowed this project to get better results and manage any challenges that may arise from one research method. This was possible through balancing between the weaknesses of one research method against the strengths of the other. Data collected was categorized into primary and secondary data.

Primary data was collected through a semi-structured face to face interview of 5 senior management staff. Four of these participants were general managers, while the fifth was a director. The surveys aided in exploring the views of the policy promoters in the raison d’etre of formulating these policies and their views on the relationship between the policies and the alarming drop in staff performance constantly being witnessed by the bank.

This method of data collection was necessary for the study to be able to collect detailed information about specific questions. “Using semi-structured questionnaires allows a broad scope of answers and sufficient latitude for further questioning on specific responses” (Singh and Naurang, 1996, p. 1). Questions were closed at the initial stage and opened later to allow more in-depth discussions with the interviewees.

The interviewees’ wide experience in management made them suitable candidates for the interview. The interviews were aimed at understanding how compensation, discipline and promotion policies have been appreciated, by studying how Zenith Bank PLC is able to attract and retain the best employees in the market through various mechanisms. The interview was used to further establish how these policies have been taken up in businesses with a presence in different regions such as the Zenith Bank group.

They further sought the interviewees opinions on how through labor unions, businesses are being forced to establish communication channels, a measure that has gone a long way in improving employer-employee relationships. The interviews also discussed the role of respecting employees in motivation and how it can be used as a reward mechanism. Creating favorable work conditions is another important tool that was discussed in the interviews, as well as how far Zenith Bank has come in achieving this.

Another significant topic of discussion during the interviews was employees’ satisfaction and its role in the ability to implement different HR policies. This covered promotions and career development and how they are being addressed in the banking industry. Process improvement was analyzed to understand how by making effort to make a working system better, an organization makes it easier for employees to work. Other important measures discussed in the interview included the role of a good corporate culture, job enrichment and proper non-monetary compensations and benefits.

More primary data was collected through a survey carried out using self administered questionnaires. The questionnaires were administered using a convenience sample of 100 participants. 50 were at a mid management level, while the other half was made up of junior level staff. The participants were drawn from 6 branches of the bank. The choice of participants was motivated by the fact that my employment level allows me to reach these people more easily. The sample population balanced the representation of the different levels of the bank. The self administered questionnaires were comprised mainly of closed questions and a few open questions. Closed questions make collection of data easier and they do not take a lot of the participants’ time.

Structure of the survey

Participants

Interviews were conducted on 5 senior management staff. Four of these participants were general managers, while the fifth was a director. Furthermore, a survey was carried out using self administered questionnaires on a convenient sample of 100 participants. 50 were at a mid management level, while the other half was made up of junior level staff. The participants were drawn from 6 branches of the bank.

The population was distributed among different age groups, responsibilities at their level, and the number of years the employee had worked in the bank. 50% of the participants had more than 10 years experience in the banking industry. 50% of the participants had been working in Zeneth bank for more than 5 years. These participants proved very resourceful in understanding the company’s human resource policies and strategies.

Recruitment

Recruitment was done by using social network and online forums to reach out to targeted participants. The snowball technique was used to reach the targeted number of participants required for the study. In this technique, people familiar with the study were used to reach out to more people who were then be directed to the research’s weblink. For the interviews, the participants were contacted on the phone by fetching their numbers from the bank’s human resource management department. All participants were presented with adequate explanations and guidelines for the study. All participants were also required to fill and sign a consent form agreeing to voluntary participation.

Data collection

The research methodology applied in this research project was designed to achieve the set objectives of the paper. It included study of books, academic journals, online articles, past projects by different authors, government statistics and interviews with experts in the banking industry. It was also be through conducting interviews on senior and junior managers in the bank. To understand the background of the problem, literature relating to promotion, discipline and compensation policies will be reviewed. Primary data collection was done by administering questionnaires to 100 participants. Secondary data was collected from past research projects, government and non-governmental statistics and other relevant sources.

Case design

The case design was comprehensive and complete enough, to allow the bank understand and utilize the information in decision-making easily. Beneficiaries of the study include the Zenith Bank, and other stakeholders in the banking industry. Reviewing the case design was critical to ensure its validity and applicability. This was ensured in this research project. Cross-comparing the case design and its outcome, with similar research projects conducted in the past, helped this research to highlight commonalities and identify areas where the results need to be strengthened. Data analysis tools and software were beneficial when sorting out data and identifying patterns.

Data analysis

Data analysis comprised of diverse techniques since the study had different types of data and expected outcomes. When conducting a human resources policies study, data mining is an indispensable technique since it involves discovering knowledge, as opposed to describing it. In this project, 90% of the questionnaires distributed were returned and filled correctly. Interviews were scheduled early to guarantee enough time for preparation by participants.

Secondary data was extremely valuable in augmenting the research. Before any data was collected, permission was sought from different authorities such as the Zenith Bank, where the participants work. Data analysis tools and software were beneficial when sorting out data and identifying patterns. Answers to close-ended questions were analyzed in percentages while others were individually analyzed and discussed.

Project implementation

Overall project plan

This research paper is expected to be complete in a duration of 3 months

Project's Gantt chart.
Table 2: Project’s Gantt chart.

Ethical issues and limitations

There were a number of ethical issues that arose in the course of completing this research project. One of the most fundamental principles that I followed in research is voluntarism participation. The principle requires that no participant should be coerced to participate in a research or give false information. A participant must also give consent before their identity is revealed if there is a need to do so, although for such a project, anonymity would be applied.

During a research project, ethics also demand that the process must not subject the respondents to any danger or harm, a factor I took very seriously. A researcher is supposed to apply the principle of anonymity to protect them from consequences of revealing the information they do. It is also the respondent’s right to be treated with respect and dignity during the study. These ethical issues are expected to be adhered to when the organization is conducting its research.

Limitations faced in the exercise included language barriers since the company employs a considerable number of foreigners. Lack of cooperation from some respondents also stood as a challenge and there were fears that they may not give accurate answers or they may take too long to respond. Conducting a research project is an expensive activity and finances posed as a challenge. These challenges were addressed by conducting research in the most language, which was English, and using translators. There were also comprehensive explanations about the scope of the research to respondents to ensure they understood the objectives and minimize resistance. I also ensured a proper costing and allocation of funds was done before the task commenced.

Discussion and analysis

Results analysis

“An organization is as good as its people, and nobody can deny the fact that manpower is the greatest asset of a company” (Naidu 2011, p. 1). Getting the best in the market does not bear much fruit if a business is not able to retain them. The author further points that the less human resource turn-over a business has, the less expenses it incurs in establishing a strong work force. Mehta (2005, p.1) further expounds on this point by arguing that that “high attrition rates incur major costs to the company including recruiting expenses, training expenses, unemployment insurance and guest service of a quality less than one has been striving for”.

The level of employees’ satisfaction in a business determines their willingness to stay. Satisfaction on the other hand in influenced by several other factors such as the business’ policies. In the recent past, retention has been a major challenge for business in all industries. Recording just how bad the problem is in many businesses, Naidu (2011, p. 1) explains that “employee turnover in different industries is averaged at 30%, a percentage enough to make employees lose sleep over the tangible and intangible costs of employee turnover”.

The most immediate effect of a high staff turnover level in the banking industry is inconsistent quality delivery. The customer service-dependent areas of a business are most affected when employees keep leaving and new ones coming in. Vacancies mean more work-load for remaining employees, a factor that many times harms the quality of the business’ service front.

Issues identified in the study varied from management, work environment, job security, satisfaction, discipline to security, just to mention a few. The study was aimed at relating these issues with performance management. 70% of the participants said they were aware of the bank’s HRM policies. 50% pointed out that they were conversant with all the five policies outlined on the questionnaire. 20% said they were more conversant with the compensation policy, 10% felt they understood the appraisal/promotion more, and another 10% felt they were more conversant with the training and development policy. A small percentage of 3% and 4% felt they were more conversant with the disciplinary and recruitment policies respectively.

70% of participants felt that all policies affected their job performance equally. The same percentage further pointed out that they were contended with the bank’s human resource policies. They were comfortable with their jobs, the amount of compensation they got and opportunities available for them in the bank. Even though they felt generally happy with their jobs, there were a few disagreements on some of the company’s policies. They felt that the business did not have enough opportunities for everyone to grow. They also felt the bank could do much better on salaries, considering its rate of returns.

The remaining 30% of the participants said they felt that some policies I n the bank negatively affected their performance. They gave different reasons as to why they felt dissatisfied. The biggest reason why employees felt dissatisfied was excessive work. 20% of the participants pointed out that the policies did not protect them from being overworked and pointed this as a major concern for them.

They also pointed out that it would be enough reason to leave if they found a more appealing job opportunity in another organization. Lack of sufficient recognition also stood out as a main reason for dissatisfaction. 15% of the participants pointed out that they felt their work was not being appreciated. Those at the middle management levels pointed that the management treated their work with less appreciation, even though they played the biggest role in ensuring the business’ goals were met. This is a major concern for employees in many businesses and could lead to high levels of staff turnover. As researched by Czenter (2002), regular recognition and appreciation means more than financial rewards to some employees.

15% of those who filled the questionnaires pointed out lack of power to make decisions as the reason they were not satisfied. 89% of this group was made up of people at the middle management level. Senior managers who participated in the survey didn’t think this was a big challenge to them.

Their positions allowed them a chance to participate in most of the organization’s decisions. Another significant reason why such a big percentage of employees in the bank felt dissatisfied, as evident by the results, is lack of growth opportunities. 18% of the participants pointed that they felt the bank had very few senior opportunities to take care of all of them. They felt that they would not have a chance to grow to levels they desired to if they continued to stay. As a result, they are always on the look-out for an opportunity outside their own organization.

50% said the bank’s policy had a provision for employee feedback and mentioned training and development as one of the policy that has been adjusted to accommodate the employees’ feedback and suggestions. A small percentage of the employees considered the bank’s compensations policies insufficient. 10% of the participants said they felt they were paid less than what they were worth. This is despite the fact that the business is among the highest paying in Nigeria. Another 10% of those who participated in the survey had other reasons why they felt dissatisfied. These factors included personal reasons, medical challenges, bad relationships with colleagues and long working hours than they would prefer.

Regarding incentives and compensation, the research revealed that Zenith Bank uses positive rewards to motivate employees, and negative indicators to discourage under-performance and indiscipline. The company gives multiple targets to each employee to allow a bigger opportunity to the employees for earning at least some part of the performance incentives. This has worked well as a motivator and has also worked successfully as a retention tool.

These results support one of the company’s strategies which is “to use incentives and rewards to identify high performers who then become eligible for the succession pipeline for key positions in the business” (Zenith Bank, 2011). In the bank, such tools have been broken down into different categories. They have been divided into performance based targets, with each department setting its own specific performance related goals. According to the senior managers in the bank, the category of individual targets is based on individual achievements and constitutes up to 20% and 80% for senior and junior level employees respectively.

Most employees agreed that core elements of job satisfaction are not necessarily based on financial factors. Compensation is an important element in their satisfaction and includes other things other than money. However, monetary compensation is equally important and the participants point out that the bank must ensure that they pay employees what they are worth, and do the best to stay within the market rates or higher than that. The survey revealed that 80% of the participants think that employees should be rewarded for performance and not for seniority. They argue that a percentage of their earnings should be based on successful completion of duties. The participants further pointed out that this is lacking in Zenith Bank, since salaries are largely based on positions and seniority.

From the interviews, information collected from those participants revealed that Zenith Bank PLC as an employer does not discriminate on the basis of race, sex, religion and other differences among people since it is illegal to do so according to the law. The company highly appreciates skill and offers employment opportunities based on qualifications rather than cultural backgrounds. According to the bank, a Zenith person is defined as “an employee who shares the same mission with the bank, a bold person who loves challenges, is able to solve problems, is imbued with a conducive team spirit and is zealous to work well” (Zenith Bank, 2011). The bank places high expectations on its employees.

For them to be able to perform as expected, the bank has the responsibility of ensuring that proper measures are installed to support their efforts. The bank has set up a learning school where new recruits will resume into orientation before they can start working officially. This is where the bank’s values and cultures are imparted on them.

From the interviews, it was also clear that training in Zenith Bank is taken seriously. New recruits have to go through the learning school where they are taught all the aspects of banking. Rules and regulations guiding the bank are also installed in them before they are posted to different departments. The bank promotes itself as a good employer through what they refer to as the Zenith experience. The bank promotes itself as a highly dynamic bank offering a veritable platform for those looking for an opportunity to grow their careers.

All the interviewees pointed that fostering an environment of growth and learning brings out the best in an organization’s employees and helps them develop confidences. Training and development play an important role in ensuring this happens. In-house training saves a business a lot of money and makes it easier for employees to open-up, since they are dealing with people they know. Employees are more bound to trust a company that is investing in making them better. The interviewees agree with Gelade and Mark (2003, p. 390) who argue that “such employees are more likely to uphold the business’ best interest and keep an eye on furthering the company’s goals and enhancing its welfare”

The director explained that today, banks have adopted a better culture where employees’ are encouraged to develop a work and life balance through more flexible work schedules. Employee satisfaction programs include more holistic packages that include ensuring their welfare is fully considered. More flexible arrangements such as job sharing, part-time jobs and online working are common to ensure that employees have time to cater to their other needs. More banks are also offering programs that allow employees to do this without much distraction at work.

Zenith Bank PLC has realized the need to invest in their employees’ well-being and providing them with good working conditions. Pleasant working conditions encourage a hardworking spirit and motivate innovations. Working hours in the bank still raise questions, as it is not rare to find people working for more than 8 hours a day, even though working overtime attracts compensation. The director further explains that maintaining open channels of communication has been of a big significance as the business tries to motivate employees, as well as earn their trust and loyalty. This is with the realization that the fastest way a business can gain its employees’ trust and loyalty is by showing them that it cares by paying attention to their concerns.

The four general managers all pointed that the business today is investing heavily in team building activities, counseling and any other avenue that encourages employees to open up. It has also been important for the bank to communicate its vision, mission and plans to its employees, especially plans that affect them directly. It is in the same spirit of communication that the bank is able to create an environment of inclusion. “Studies have shown time and again that employees who feel valued, recognized and appreciated are the most loyal” (Girard, 2009, p. 112). The managers agree to this and point out that it has been a point of focus in Zenith Bank.

Performance needs to be recognized and so should good ideas. Employees creativity an inventions should be followed up and implemented where possible. Consulting employees on their ideas also shows appreciation and recognition. Just like Girard (2009, p. 45) argues, “formal mechanisms for evaluating and rewarding employees need to be in place, and they need to be competitive and in sync with an industry’s norms”. Many businesses today are investing a lot on rewards, and investing more

The interviewees concluded by arguing that businesses with developed programs to promote all titles and levels of employees have more satisfied employees. Employees are looking for challenges, excitement, growth and fulfillment in a job. If a company does not have the capacity to convince its employees that there is more left for them, they are bound to leave for more challenging opportunities. One way to convenience employees that they are needed is through constant appreciation, recognition and reward. Of major importance for this to happen is ensure that policies allow for proper compensation, growth and disciple measures to be implemented.

Issues arising

Promotion

Only 70% of the employees said they were satisfied with the bank’s promotion/appraisal policy. These employees felt there was a good chance that they would be promoted to a higher level of their career than they were in. The rest felt that career growth in the bank as a process was too slow. They felt that the bank had very few opportunities for everyone. Promotion opportunities still remain a big source of concern for employees in the bank.

A significant reason why employees feel unappreciated, as evident by the results from the survey, is lack of growth opportunities. Promotion policies in the bank only allow few chances for vertical growth, and yet they do not create a lot of room for horizontal growth. Many employees felt that organizations have very few senior opportunities to take care of all of them. They feel that they will not have a chance to grow to levels they desire to, if they continue to stay. As a result, they are always on the look-out for an opportunity outside the bank.

The bank can handle this by creating enough room for horizontal growth to compensate for the lack of opportunities to grow vertically. Horizontal growth allows employees to have a pay increase without necessarily going to a higher position in the office. It also happens through re-assigning responsibilities, creating new titles for employees and allowing them to make decisions on different tasks at work. Furthermore, rewarding employees on performance rather than positions minimizes their attachment to titles.

Promotions and work stability is further established by minimizing drastic changes at work, as well as consulting employees before making any major changes. Ongoing changes causing instability made it impossible for employees to stay or grow their careers. Changes come in terms of management, reshuffles and major changes in job designs. When this happens, employees feel that it is hard for them to achieve consistency and perfect their skills in such a changing environment. Poor leadership also plays a significant role in the bank’s high rates of staff turnover. It makes it hard for employees to implement any good ideas they may have, and may force them to implement ideas they don’t agree with.

Discipline

“Discipline in the workplace is the means by which supervisory personnel correct behavioral deficiencies and ensure adherence to established company rules” (The University of British Columbia, 2010, p.3). Discipline measures in a business should be aimed at correcting deviations rather than embarrassing employees. Successful business have mastered the art of using positive approaches to correct problems without having to instill discipline on their employees. However, a business should not be hesitant to instill disciplinary measures, especially in cases where misconduct is recurrent.

Discipline in the bank is two way. Employees are required to adhere to the bank’s rules, regulations and policies. The bank on the other hand is expected to recognize and respect the rights of its employees. The banks responsibilities are defined through the labor laws and policies put in place by the government.

In Zenith Bank, disciplinary actions include suspensions, warning letters and termination of employment in extreme situations. Examples of acts considered as misconduct in Zenith Bank include theft, insubordination, failure to follow company policies, failure to notify of an absence, just to mention a few. Several factors are taken into account before disciplinary measures are taken. The bank has to establish whether;

  • The employee clear understood the rules and policies before violating them.
  • Whether the broken rule or policy was enforced by the bank.
  • Whether the employee was aware that their actions would attract discipline.
  • The seriousness of the offense and the level of obligations it causes the bank.
  • The employee’s discipline record.
  • Any possible provocations.
  • The employee’s reactions to his/her mistakes.

To ensure that employees’ rights are respected, and the back plays its role in meeting them, labor relations and legal considerations are a crucial consideration for employees when considering a job position. When they are not satisfied with a business’ regulations, they may easily opt to leave. It is paramount that a business does not discriminate on the basis of race, sex, religion and other differences among people since it is illegal to do so according to the law.

Labor relations in the company must therefore be taken serious and employees must have an opportunity to understand and address various issues that affect them as employees. Some of these issues include their union’s relationship with the management, whether to remain in a union or not, collective bargains, potential contribution of union representatives and the advantages and disadvantages of a represented work place.

Lack of the ability to manage cultural backgrounds could easily pose as a challenge for Zenith Bank, since it employs experts from different parts of the world. Ensuring good relationships between employees is one way to ensure that rules and regulations are adhered to. When this is lacking, employees are unable to work as a team, they may feel frustrated and might act out of rebellion. “An organization can further encourage good discipline and relationships by rewarding team work” (McNamara, 2009, p. 1). This can also be done through training and team building activities.

Compensation

“Most types of compensation are covered by state laws, and individual countries have their own worker’s compensation laws that handle various claims from employees” (Accident Consult, 2011, p. 1). Compensation in a business covers salaries, allowances and other liabilities on employer’s faults. Termination of contracts, accidents occurring as a result of negligence or any other employer’s faults attract different forms of compensation as defined by the business’ policy. Some countries dictate that employees be provided with compensation insurance depending with a business’ size and nature of operations. Medical covers for employees may also be compulsory or optional depending with a country’s laws and the business’ policies.

In Zenith Bank PLC, employees’ contracts determine the forms of compensations they are entitled to. Employees hired on a permanent basis are entitled to a health cover that covers them and their families (wife/husband and children below the age of 18 years). They are also entitled to transport allowances or fuel allowances. Employees hired on contracts are allowed to transport allowances, especially when they are running job related errands. The bank is financially liable if an employee gets hurt at the bank’s premises or in their line of duty, especially if it happens due to the bank’s negligence. Employees at the executive management level enjoy more other financial benefits such as education expenses for their children.

Other than monetary types of compensation, the Zenith Bank has put in place other types of strategies to ensure employees are truly rewarded for their efforts. The bank has embraced a united culture to ensure employees have a sense of belonging at work. According to Schuler and Susan (2008 p. 34) “culture is by no means a superficial concept, but a term used to describe a dynamic part of all organizations”.

Cultures differ with organizations, and can be used to measure the level of success for a business. Successful cultures are those that allow employees to create goals that align with those of an organization. In successful cultures, employees are united, and everyone works towards the same goals. Within such a framework, everyone knows what is expected of them and when. Successful cultures recognize the values of all the employees, and decisions are enacted by all the members of the team. Zenith Bank PLC has created an organizational culture that encourages high levels of sociability.

The business helps its employees manage their personal wealth through free consultations to allow employees manage their salaries and financial resources wisely. It is a well known fact that money problems are a major stressor for employees. An employee who is unable to manage money will never be satisfied regardless of the amount of salary offered to them. Employees in Zenith Bank PLC are helped to deal with money problems by having financial advisers and managers on site.

Employees are free to consult with them at any time and the services are paid for by the company. As a result, even employees at the lowest salary scale are able to budget and manage their money well. The company has a percentage of its shares reserved for its employees, a policy that has allowed many of its employees become millionaires through the stock exchange market.

Job designs and diversity

Recruitment forms a very big part of Zenith Bank. “In any organization, recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all the levels” (McNamara, 2009, p. 1). For the business to achieve an effective recruitment process, its human resource management strategies have to take into consideration the benefits and challenges of sourcing employees from within or outside the company. Motivation during hiring is ensured through sound job designs and robust tasks distribution.

Growth opportunities are a well developed reward strategies in Zenith Bank. Internal recruitment is always given priority as it provides the most cost-effective source of recruits, and gives employees a chance to diversify and grow (Zenith Bank, 2011). Further growth is made possible by continuous training, development and other performance-enhancing activities to ensure constant potential of the existing pool of employees. Performance enhancing activities include activities such as performance appraisal, succession planning and development centers. “Such activities help review performance and assess employee development needs and promotional potential” (Girard, 2009, p. 33).

Other considerations

One of the questions that Zenith Bank PLC should address to ensure employee satisfaction is whether they are doing enough to ensure the comfort of its employees. From past surveys and analysis by different researchers and experts, banks have been in the forefront of ensuring their employees are comfortable. Most banks and financial institutions today prefer to focus on retaining their employees and developing talents. “The HRM departments in many international organizations act as mentors, coaches, counselors and succession planners to help motivate the organization’s members and build their loyalty” (Heneman, 2002, p. 68).

However, many banks still face challenges when trying to implement employee satisfaction and retention strategies. “Major challenges facing the human resource departments include the ability to manage a diverse body of abilities and use them to bring innovative ideas, views and perspectives to their work without conflict” (Mahoney, 2001, p. 270). Another significant challenge facing the company’s human resource management is the easy erosion and irrelevance of skills.

There are huge amounts of resources being spent on training and skill upgrading in a bid to ensure that its employees remain relevant not only to them but to the human resource market at large. This analysis agrees with (McNamara, 2009, p.1) who points out that “retention is one of the biggest challenges facing many human resource departments in most organizations”. Competition for the best skills and talent is on the rise and this creates a constant threat and fear by many businesses for loss of employees. As was established from different articles and literature about human resource management in the banking industry, training and retaining talent is a major focus for most of them.

Employee retention is another significant issue, one that is among the most discussed topics today in businesses. For any business to be successful, they need to have a retention program which recognizes the importance of mutual respect between employees and employers, rewards employees appropriately, and motivates employees. Many companies understand the importance of putting such a program together but since it takes time and financial resources, many organizations would rather just leave it for another day.

As a result they suffer huge costs of employing and training new employees who leave almost immediately and the cycle continues. Employee retention and increased performance of employees has a huge payoff which is often underestimated by many organizations. It increases productivity, improves employees’ morale, increases turnover as a result of reduced costs of recruitment and training, and trains a business to effectively address employee-related problems.

“In any business, the human resource management retention strategy is expected to be able to maximize return on investment in the organization’s human capital” (Mehta, 2005, p. p.3). It is also supposed to ensure that the company has reduced financial risks by reducing the cost of new recruitment which can only be achieved by keeping their employees for long. As Sanders (2002) points out, many businesses today are facing major challenges in trying to retain their best employees. The human resource market for both skilled and unskilled workers has become increasingly competitive. For professionals especially, they are constantly looking for better and more rewarding challenges in the now wide market while employees are constantly on the watch for young, developed talent and loyal employees.

With all the money spend on training and upgrading activities, Sanders reinstates that it is imperative for organizations to constantly motivate their work force and keep the work environment as exciting as possible. To retain employees, variable incentives are proving hard and costly to apply and therefore, organizations need a strategy that will last. In international organizations, there is obviously a problem with retention. The fact that their rates are competitive but employees still leave is a clear proof that employees need more than financial rewards and satisfaction to stay.

Conclusions and recommendations

Conclusions

Effective human resource management is considered among the most significant successes of a business today. In any business, “the human resource management strategy is expected to maximize returns on investment in the organization’s human capital, and at the same time do so in a way that creates minimal financial risks” (Serco, 2007, p. 2). McNamara (2009, p. 1) further explains that “the supply of a skilled workforce must be aligned with the organization’s ongoing and future business plans to maximize return on investment and to secure future success”.

Human resource functions have to be performed and implemented effectively and pragmatically. Measures such as legal procedures and ethics have to be taken into consideration to allow for implementations in a manner that retains the respect and support of the workforce. For a company’s HRM efforts to pay returns, “the human resource department must align the supply of skilled and qualified individuals and capabilities of the workforce with the organization’s plans to maximize output and secure future success” (McNamara, 2009, p.1). Human resource functions have to be performed and implemented effectively and pragmatically.

It is also evident that a business’ culture substantially affects the ability of employees to execute their responsibilities. It also influences how an organization meets its goals and objectives. A culture of recognition gives employees reason and motivation to work harder. It is also used by organizations as a lagging indicator and allows them to give training to people who have had low recognition due to lagging performance. This in turn improves its performance and productivity. A culture of appreciation and mentorship on the other hand ensures that every member of the team is recognized for their good and productive efforts. It also encourages high performance amongst employees.

A business which has an open communication culture, and an opportunity for employees to give feedback, allows employees air their concerns and complains, some of which may be affecting their performance (Lundy, 1994).

It also allows managers and the executive to relate and connect better with every part of the organization including employees at the lowest level. Healthy communication between people on all levels is a good way to source information and allow the executives make more informed decision, considering every person’s needs. A business which adopts policies that punish poor performance may be able to improve its productivity but will not enjoy the loyalty of its employees since they work from fear. A company’s policies should therefore provide an environment that allows recognition of performers, as well as the appropriate rewards.

The outcomes in this research concur with Guest (1997), who summarizes the relationship between the three HRM policies and performance as follows;

HRM practice HRM outcomes Behavior outcomes Performance outcomes Financial outcomes
Appraisal Commitment Effort/Motivation Productivity
Innovation
Profits
Reward/
Compensation
Quality Involvement Less labor turnover
Reduced customer complaints
Profits
Discipline Flexibility Organizational citizenship Minimized absenteeism
Less conflicts
ROI

Table 3: Relating HRM to performance.

In any big business such as Zenith Bank PLC, there are obviously problems facing employees and that is why they don’t stay despite the fact their salaries are at a level that is acceptable in the market. The fact that their rates are competitive but employees still leave is a clear proof that employees need more than financial rewards and satisfaction to stay. Through the research, I was able to identify a number of factors, which employees considered as major stressors.

From the research, many employees pointed out that management is a key challenge for them. The pointed out that their seniors are too demanding and some completely incompetent to manage responsibilities. When employees don’t have faith in the management, it is hard for them to build an open relationship with them where they can easily air out their concerns. It is also hard for them to trust in a system led by someone who does not seem sure of what they are doing.

A big company such as Zenith Bank should ensure that hiring is on the basis of qualifications and not on how applicants relate with the managers. Friendship and family must not in any way interact with how human resources are run. Some employees pointed out that, managers tend to favor those who are friends with them during promotions and when opportunities occur. As a result, disgusted and frustrated employees would rather leave than work under supervision of an incompetent person who seems favored by the boss.

Another stressor at the work place is lack motivation. When employees are not motivated, it is hard for them to keep the rest of the team motivated. It is the business’ responsibility to ensure only qualified managers are employed, and relevant training is constantly conducted to ensure consistency in leadership skills. When senior managers are motivated, it is easier for them to pass it on to the staff at the junior level.

Work overload was identified as a big stressor in the bank. Overworked employees as a challenge arises from the fact that the business still faces a considerable level of staff turn-over. As a result, there is always a shortage some departments and some employees have to do more than they should to cover up for the shortage. Overworking employees means they are unable to plan their schedule well and even when they do it is hard to keep up with it. It also means that employees may not have any time for recreational activities or skill building activities such as training.

Human resource policies in a business impact the outcome of all the factors that affects it (Barnard and Ronald, 2000). Human resource policies can be used to address all the complaints aired by the employees. This paper focused on compensation, disciplinary and promotion policies. A well designed and structured promotion/appraisal policy ensures that every employee has opportunity to grow. It also ensures that promotion and growth is only based on qualifications. This way, employees are motivated to work hard and earn better positions in the bank. Knowing that the bank only allows genuine recruitment and growth opportunities is a significant measure towards ensuring employees’ satisfaction.

A positive and well considered discipline policy ensures that disciplinary measures are only intended to correct mistakes and encourage positive behavior rather than embarrass and intimidate wrong doers. The bank’s discipline policy ensures that wrongs are properly investigated before any measures are taken. Such a policy minimizes cases of unfair punishment, discrimination and sabotage. A disciplinary policy can be used to improve employees’ satisfaction by making sure they understand that the bank is willing to work on their failures with them to build and develop their skills. However, the bank is not hesitant to impose strict disciplinary measures especially in recurring or intentional indiscipline cases.

The bank’s compensation policy outlines what is expected of the employees and the employer. Employees’ contracts and level of employment defines what they are entitled to. Ensuring that compensation, terms and conditions are well explained before an employee starts working is a good way of ensuring that disagreements do not occur. When employees are well aware of what they are working for and what to expect, disappointments do not easily arise.

Recommendations

Human resource policies and their implementation play a significant role in a business’ overall HRM strategy. One major significant benefit of effective HRM policies is “designing performance incentives plans with the intention to continuously motivate employees and thus improve customer service in a dynamic environment” (Fazey, 2010, p. p. 56). Implementing appropriate SHRM techniques in an organization enables a business build a productive and efficient team, and work with them for a long time to ensure consistency. International organizations should seek the best SHRM techniques after a further review of their need and problems.

Human resource policies can be used to solve major challenges facing human resource managers today. Uncomfortable conditions such as being overworked have featured in the research as the biggest reason why employees’ level of satisfaction is low. The trend is a significant challenge for many businesses. The banking industry has not been left put in this trends as it still has more than 15% staff turnover annually.

As a result of being unable to retain the best employees, many banks end up with employees who portray several counterproductive behaviors. Lack of satisfaction also causes high levels of absenteeism. As a result other employees are forced to take up the responsibility of the absentees, making the problem even worse. Asking employees to do more than is their responsibilities regularly is a problem on its own especially when they are not given extra payment for it. Part of ensuring satisfaction is ensuring that no employee suffers for other employees’ mistakes.

The human resource manager needs to ensure tough discipline policies to ensure that such habits are not tolerated in the business. This can be done by ensuring the business has clearly formulated rules which every employee has to go through and understand when they join the business. Discipline can also be achieved by encouraging team work so that employees are considerate of each other and what they put each other through by being absent. Team work is best established through training and team building activities to encourage more open relationships amongst employees.

An organization’s human resources are key in its success. Getting the best in the market is not enough and organizations now need to go a step further to retain them. A business’ promotion/appraisal policy must ensure that retention is addressed. This saves a business a lot of money spent on recruitment and training new employees. It also allows organizations to achieve consistency in their products, as well as maintain a good reputation in the markets they serve. Employee loyalty can only be achieved by putting in professional strategies that allow employees’ continuous satisfaction, strategies which may be costly and involving but which have a huge payoff at the end.

For an effective promotion/appraisal policy, the bank should consider the following;

  • Design an equitable and fair basis for promotion based on seniority and merit.
  • Ensure there is an open policy that allows every eligible employee a chance to get a promotion based on their performance and not category of employment. There should be a well defined way by which employees can grow their careers vertically.
  • A well defined and fair formula for judging potential, merit and length of service. The measure for performance must be spelt out clearly.
  • A policy that provides equal opportunities for employees in all departments, station of work and category of work.
  • A specified way of acquiring new skills and preparing employees for career advancements and available opportunities in future.
  • “The final decision on promotion must only be entrusted with a trustworthy and honest group of people” (Rao, 2010, p. 2). This is to ensure fairness and reduce cases of corruptions and favoritism within the bank.
  • Detailed and well kept record of performance and achievements for employees to avoid any cases of favoritism nepotism.
  • Consistency and uniformity in inspective programs.
  • Communication to all employees any time new promotion policies are formulated.

A demotion policy must ensure;

  • There is a clear and well explained list of offenses punishable by demotion.
  • There is a detailed and fair investigations for any cases that call for demotion before it is effected.
  • Employees are well familiar with the business’ rules and policy as regards demotion.
  • There is enough room for review of the policy.
  • There are relevant and comprehensive explanations when the business is forced to effect demotion as a result of economic adversities.

The bank should also utilize other HRM strategies such as training to ensure professional development and prepare employees for available promotion opportunities. Training is aimed at preparing individuals to keep their skills updated and ready to undertake higher levels of work when chance arises. It also provides a possibility of performance change. Training helps the organization retain their pool of human resource and stay up-to-date with current and relevant skills in the market. It also makes employees feel cared for.

Regarding incentives and compensation, the research revealed that Zenith Bank uses positive rewards to motivate employees, and negative indicators to discourage under-performance and indiscipline. The company gives multiple targets to each employee to allow a bigger opportunity to the employees for earning at least some part of the performance incentives. This has worked well as a motivator and has also worked successfully as a retention tool. In the company, such tools have been broken down into different categories. They have been divided into performance based targets, with each department setting its own specific performance related goals.

Most employees agree that core elements of job satisfaction are not necessarily based on financial factors. Compensation is an important element in their satisfaction and includes other things other than money. However, monetary compensation is equally important and the participants point out that employers must ensure that they pay employees what they are worth, and do the best to stay within the market rates or higher than that. The survey revealed that a big percentage of the participants think that employees should be rewarded for performance and not for seniority. Human resource experts argue that a percentage of their earnings should be based on successful completion of duties.

Reward can also be achieved through developing favorable social setting of an organization.The social factor of an organization is an important factor in any organization” (Armstrong, Duncan and Peter, 2010, p.23). It is the basis for relationships, communication and team work. When they are lacking, any efforts of reward management in an organization may not bear fruits. “It is important that employees of an organization feel a sense of belonging in it” (Baptiste, 2007, p.285).

An organization which is open to different social factors is bound to develop more loyal employees who feel as part of a family. Social factors in an organization provide a common purpose. Different social factors in an organization include relationships which may be employee to employee relationships, employee to managers relationships or manager executive relationships. These kinds of relationships are more often than not official but when a social element is introduced to them, they become a good source of information among people from the different levels of an organization.

Key issues to address in a compensation policy for Zenith Bank would be;

  • How to use compensation to ensure external and internal competitiveness and equity.
  • How to compensate individuals, groups and team work.
  • Which compensation methods and processes are appropriate for a business.
  • How to devolve power and ensure managers can manage their own reward strategies while staying within the corporate policies.
  • How to compensate and motivate those who have reached the highest level of career possible in the business.
  • How to ensure increased compensation translates to improved performance.
  • How to structure and design job evaluation schemes.
  • How to ensure employees are rewarded for both their inputs and outputs.
  • How to make employees recognize and appreciate non-monitory rewards.

In today’s scenario, there are various management trends available for the banking industry. As Armstrong, Duncan and Peter (2010, p.145) explains “more businesses today choose to develop increased awareness of the need to treat job measurement as a process for managing relatives, which, as necessary, has to adopt to new organizational environments and much greater role flexibility”. Others choose integrated pay structures that cover every employee regardless of their position. Team pay is a common trend today in most businesses as they more importance is being place on teamwork. Other trends include performance awards and more sensitivity to functional markets to enable organizations retain talented employees.

Whichever compensation strategies an organization chooses, it should be able to create external and internal competitiveness and equity in the organization. It should not allow room for some employees to feel discriminated against. It should also address team compensation programs. Most employees may not be able to create uniqueness as individuals but do so every day through teamwork. Reward strategies and structures must therefore, identify the role of individual employees in creating the best team or departmental results.

Human resource policies in a business should be able to identify which performance management processes are appropriate for it. An organization must be able to identify its needs and implement strategies that address them. For example, if an organization is faced with many absenteeism or discipline cases, it should set up measures that discourage such trends through positive and negative rewards for such behaviors or the opposite.

“How jobs are designed and evaluation schemes structured play a very important role in determining the level of success in an organization’s HRM strategies” (Huselid and Brian, 1995, p. 35). Jobs designs should allow employees to accomplish their goals and targets. Undefined job responsibilities make it hard for employees and organizations to measure success. Evaluation schemes must also ensure that employees are tested on all relevant performance levels. They should test target deliveries, punctuality, and employee’s relationships with colleagues, and discipline levels among others.

Reflections

Issues identified in this study vary from management, work environments, promotion and job security, compensation, and satisfaction just to mention a few. The rate of staff turnover is a significant measure of how comfortable or satisfied employees are. The hypotheses of this paper were;

  • Compensation policies in Zenith Bank PLC affect employee performance.
  • There is a significant relationship between the employees performance and promotion/appraisal policies in Zenith Bank.
  • Disciplinary policies in the bank have a significant influence on how the employees perform.

This dissertation’s objectives were well defined and fulfilled. The main objective was to confirm that HRM policies affect employees performance. This was done through the literature review, the primary survey and the interviews. Table 1 above summarizes the relationship between promotion, compensation and discipline polices with performance.

The proposal was planned and executed within the set timescales. Data collection was successful as 90% of the all the participants returned their questionnaires well filed and on time. Implementation was made possible by breaking down the tasks and setting different timescales for each of the tasks. Since the research applied the anonymity principle, respondents did not have any way of telling who had participated in the survey and what they said. However, most of them mentioned that they considered their colleagues before filling the questionnaires. The biggest lesson from the study was the importance of time management, and the importance of considering employees feedback in a business.

In future, a research on HRM policies should focus on how available resource influence a business’ design and implementation of policies. The survey should focus on those business that face financial difficulties in their bid to implement better policies such as small business and those business in developing economies. A bigger number of participants in a future survey will ensure that employees at all levels are well represented, and their views are heard.

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