Bank of Kathmandu Limited

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1 KATHMANDU UNIVERSITY SCHOOL OF MANAGEMENT HRD Climate Survey and Analysis Report of Bank of Kathmandu Limited Submitted to: Asst. Prof. Seema Singh Human Resource Development Submitted by: Ginish Jung Dahal (17307) Tajshree Rana (17326) Roshani Tamang (17335) Date of submission: April 4,

2 CHAPTER 1 Background In present context, organizations are in continuous pressure to maintain its operational excellence in a way that it is not easily replicable to its competitors. Employees, who were traditional, viewed as an expendable resource of the organization are now the integral part to maintain an organization s competency. They can no longer view their employees as their expenses but rather see them as the capital of the company that needs to continuously be developed within the organization in order to fulfill the organizational objectives. Human resource, which were divorced from the strategic orientation of the organization are increasingly expanding their role as the strategic partner of the organization. But in order to direct the human investment into fulfill the strategic goals of the organization, effective HRD efforts is necessary. Human Resource Development (HRD) is a process by which the employees of an organization are helped, in a continuous, planned way, to acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles, develop their general capabilities as individuals and discover and exploit their potentials for their own and/or organizational development purposes, and develop an organizational culture in which supervisorsubordinate relationships, teamwork, and collaboration among subunits are strong and contribute to the professional well-being, motivation, and pride of employees (Rao, 1990). The HRD efforts that can translate into organizational profit and fulfillment of organizational objectives need to back by a supportive HRD climate. HRD climate can be viewed as a conceptual linkage between organizations and individuals that intervenes between specific situation attributes or events and individual perceptions, attitudes and behaviour. (Payne and Monsfield, 1973) 2

3 HRD climate can be categorized into three broad categories: 1. General climate HR importance Policies and attributes supportive of HRD Leadership and management style Organizational structure 2. HRD mechanism Performance and potential appraisal Performance feedback and rewards Career planning Coaching and counseling Training Job rotation 3. OCTAPACE Openness and risk taking Confrontation Trust Autonomy Proactivity Authenticity Collaboration and mutuality Enthusiasm 1.1 Company s profile Bank of Kathmandu Limited is one of the largest private sector commercial banks in the country in terms of capital base, number of branch locations, ATM networks and customer base. It has a vision to become a significant contributor to the economic development of Nepal by distinguishing the bank as an efficient, competitive, safe and top-quality financial institution. It does have a mission statement to offer financial services and become the Bank of Choice by dedicating the progress and growth of the institution to the community customers, employee and stockholders. Bank of Kathmandu has spent a significant amount of money on training heading in various fiscal years. In fiscal year 2015/16, it spent around 26 lakhs rupees under training heading to develop its HRD practice. It also offers various other services such as free insurance, gratuity, medical and other benefits to ensure that the best output from its peoples. It has also tied up with banking training institute to ensure the training needs of employees of organization at all levels. 3

4 1.2 Objectives of the study To study the current situation of HRD climate in the organization To evaluate the general climate, HRD mechanism and OCTAPACE culture of the organization 1.3 Methodology Descriptive and analytical research design has been adopted for the study of HRD climate in the organization. Primary data has been collected from the employees of the organization from different department of the organization with the use of a structured questionnaire developed by Rao, T.V. and Abraham. In addition, secondary information has been collected for study purpose from journals, books, magazines, internet articles, etc. Non-probability sampling i.e. convenience sampling technique has been used to collect the data of 30 respondents of the organization who are currently the employees of the organization. 1.4 Limitations of the study Some of the limitations of this study could be outlined as follows: - Limited number of samples - Time constraint - Resource constraint 4

5 Chapter 2 Analysis of the study The analysis was done with the help of MS-Excel where average responses from the respondent were analyzed. The responses were divided on the following variables: 1. Gender of the respondent (Male/Female) 2. Age of the respondent (Below 20 years /20-30 years /30-40 years /40-50 years /above 50 years) 3. Education of the respondent (Intermediate / Bachelor / Masters / Others ) 4. Department of the respondent (cash, operation, credit, customer service department and branch manager) 5. Designation of the respondent (Junior assistant, Assistant, senior assistant ) 2.1 Aggregate analysis Referring to Annex 1, the HRD climate in the overall organization can be depicted as follows: Average score General climate 3.47 HRD mechanism 3.63 OCTAPACE 3.71 Overall HRD climate 3.60 Since the questionnaire was used in a 5 point scale, with 5 being the most favorable and 1 being the least favorable, a score of 2.5 indicates a moderate tendency on the dimension. Here, an average score in 3.60 indicates that the overall HRD climate in the organization is good. If we examine the overall HRD climate in the three major components which are General climate, HRD mechanism and OCTAPACE, we can evaluate the following: 5

6 i. General climate The general climate of the company includes variables such as top management style and philosophy, personnel policies, positive attitude towards development and commitment of line managers. The score of the company on the general climate is 3.47 which is a good score indicating that the general line managers and top management have incorporated the role of HRD in the organization. The respective scores of the individual factors considered in the general climate have been presented in Annex 1. ii. HRD mechanism The HRD mechanism is the enabling forces that facilitates favorable HRD climate in the organization. It incorporates all the structures, system and techniques that are used by the organization to acquire the employees and strengthen their capabilities. It includes factors such as performance appraisal, career planning, grievance mechanism, feedback and counseling, training and development, employee welfare, job rotation, rewards and recruitment and selection. The organization has a mean score of 3.63 which indicates that the enabling force to enhance the HRD climate is present and quite good in organization. More detailed scores of each factors under the HRD mechanism is presented in Annex 1. iii. OCTAPACE The degree of openness, confrontation, trust, autonomy, proactivity, authenticity, collaborates and experimentation is reflected by the OCTAPACE culture of the organization. The mean score of the organization is 3.71 which is a quite good score which indicates that the culture of the organization promotes the different dimensions of the OCTAPACE culture in the organization. The various constituents are detailed more in Annex Variable analysis The study has also been evaluated the respondents in terms of various variables which are as follows: Department ( cash, operation, credit, customer service department and branch manager) Gender (male, female) 6

7 2.2.1 Inter-department analysis Departments General Climate HRD mechanism OCTAPACE Overall HRD Climate Cash Operation Credit CSD (Customer Service Department) Branch manager From the above table, we can see that the Cash department of the organization has an average score of 3.64 in the overall HRD climate which indicates that the overall HRD climate perception in the department is quite good. Moreover, the department seems to agree that the leadership and management style is supportive of the HRD. Similarly, they also seem more inclined towards agreeing that the tools and techniques that enable the HRD climate is also present. The employees also seem that the culture of the organization allows them to express themselves openly, bring forward their issues, offer them independence and build trust among each other. Likewise, similar analysis can be made from the operation, credit, customer service department and the branch manager. However, with respect to all the other departments, credit department seems to have a relatively less average score. Even though an average score of 3.43 is considered good, it has a relatively high variation from the cash, operation and customer service department. Upon analyzing the individual components of the department, we can see that employees on average don t seem to believe that the management is putting in significant effort in ensuring the employees welfare or to ensure that the employees are enjoying their work. Similarly, the branch manager does not seem to be as agreeable to the HRD climate as operation, credit and customer service despite having an average score higher than that of credit department. Here, the scores in the general climate, HRD mechanisms and OCTAPACE are quite steady unlike that of the credit department. We usually expect the HRD climate to be more 7

8 favorable to the managerial position which has not been true in this case. The branch manager seems to be less agreeable to the general climate of the organization. Overall, the customer service department seems to be more agreeable to the overall HRD climate on average than all the other departments with an overall mean score of It has the highest mean score on the general climate and the OCTAPACE which indicates that the employees think that the management value human resource, find the people in the organization helpful along with finding training activities quite productive. However, they seem to not agree that supervisor treat their mistake with understanding and don t find the way the supervisors communicate their mistakes to be non-threatening Gender analysis General climate HRD mechanism OCTAPACE Overall HRD climate Female Male On average, both male and female of the organization seem to be agreeable to the overall HRD climate of the organization with a mean score of 3.27 and 3.94 respectively. However, we can observe that there is a high difference in the overall HRD climate score. There is a contrast on their view regarding the general climate. In terms of the general climate, the male employees seem to believe that the top management doesn t put an extra effort to make their work more enjoyable, the seniors don t take an interest on their junior and help them learn their job and that employees are hesitant to sharing their problem with their supervisors. Similarly, the female employees of the organization, on average seem to strongly believe that the people in the organization are helpful to each other. Moreover, female employees are much more agreeable that employees take their training seriously and try to learn from them. They also believe that job rotation facilitates the employee development much more than their male counterparts. Thus, they seem to find more enabling conditions in the current HRD than the male employees. Similarly, in terms of the OCTAPACE, the male employees seem less agreeable that there is delegation of authority to juniors to handle responsibility whereas the female employees are more agreeable to it. Likewise, the female 8

9 employees on average highly agree on the existence of team spirit on high order and openness and confrontation when dealing with issues in the organization. 9

10 Chapter 3 Discussion, implications and conclusions 3.1 Summary of findings Based on overall data analysis, the major findings that drawn from the study are below: The overall mean score of HRD climate is 3.60 which is above average that represents the good HRD climate in this organization. The organization values the importance of the human resource and provides opportunities for human resources to enhance their abilities and develop various characteristics as efficient human resource. Among the various HRD climate dimensions, General climate has mean score of 3.47, HRD Mechanism has mean score of 3.63 and OCTAPACE has mean score of 3.71 indicating favorable HRD climate in the organization. It is observed that within the General Climate, item 9 item 12 and item 7 has high mean score of 4.19, 3.97 and 3.81 respectively. This indicates that employees in the organization are helpful, superiors guides their junior to prepare them for the future responsibilities and people lacking in competencies are helped to acquire competencies attentively. Similarly, among HRD Mechanism, the item 24, 38 and 25 has high mean score of 4.47, 4.28 and 4.16 respectively which indicates the employees are actively participating in the training programs sponsored to them, job rotation are also part of employee development programs and employees are provided with opportunities for transfer of training in the organization. The OCTAPACE has high mean score for item 33, 32 and 29 with respective score of 4.28, 4.16 and Through this finding, we can interpret that organization values team spirit, delegation of authorities is taken as opportunities to develop by employees and the employees are open about their feeling and expression with the subordinates. 10

11 In overall HRD climate item assessment, the higher mean score can be seen of item 24 (4.47) followed by item 33(4.28) and 38(4.28). The lowest item mean score is that of item 1(2.81), 30(3.06) and 31(3.09). This reflects that the employees tends to wait for superior order to perform certain activities, the delegation of authority is not much greater that restricts the employees handling responsibilities on their own. Among 5 departments, CSD have high mean score of 3.75 with high score in OCTAPACE that reflects the employees having high degree of openness, confrontation, trust, pro activity, authenticity, collaborate and experimentation. Likewise, the Operation department score third highest mean score of 3.62 with high HRD mechanism score of 3.81 representing the employees are encouraged to learn from mistakes, learn things out of training as well as provide training based on need assessment. In comparison to male and female, female has high score of HRD climate representing they are more facilitate with the HRD climate of the organization. The female are more in favor of the HRD mechanisms followed by OCTAPACE and general climate. Overall, HRD climate is found to be favorable and attractive as well with individual analysis. 3.2 Critical HRD implications The critical HRD implication of the assessment of HRD climate for Bank of Kathmandu can be listed as below: There should be more delegation of authorities to encourage juniors to develop skills handling higher responsibilities. The employees needs to be encouraged to take initiatives and act on their own through skills development and rewards for the initiatives taken. The workplace culture needs to flourish the openness among employees to exchange their views and express their idea. The organization requires developing such 11

12 environment which will enhance the cooperative and collaborative culture within the workplace. Employees should not be resistant to change and hence need to view through various aspects of the problem. The changes must be made within the policy level to enhance the much favorable environment. The organization must align human resource development with its strategies in order to enhance the scenario of HR within the organization. The current assessment showed the significant result of good HRD climate in the organization. However, there is still place for further improvements to be done. The organizational structure should incorporate HR so that the development of HR can be performed from the bottom level of the organization. Appraisal needs to be done for every performance of employees. This will help to detect the strength and weaknesses of the employees and as an organization, it can work on the capacity development through trainings, career planning, coaching and counseling as well as perform job rotation to develop skills. This shows that in overall it is the HRD climate that is responsible for the efficient performance and development of the employees. The HRD climate needs to be effective and supportive of human resource development and capability advancement. The organization needs to work on these factors which will be enhancing the development of employees. The programs and policies must be developed for which timely assessment and evaluation must be conducted to know the changing HRD climate of the organization and work accordingly. 3.3 Conclusion In this competitive and dynamic business environment, organizations are in need of continuous development of its resources and capital. The skills, knowledge and ability of employees must be developed aligned with the changing need of business environment. The organization requires obtaining strategy for the sustainable development which needs changing workforce culture, 12

13 environment, structure and human resources to adapt with the change. For which, the HRD climate must be favorable for organization. And based on the findings of the study, it is found that Bank of Kathmandu is doing quite well in terms of HRD climate. It is above average. However, the improvement can still be made in terms of the few factors such as policies, development mechanisms and other related factors. The top management involvement in terms of initiative can be seen low in Bank of Kathmandu, so it needs to be improved through rewards. The delegation of authority is not up to the mark which the organization along with its top management and employees must work on together. 13

14 Reference Payne, R. L. & Mansfield, R. (1973). Relationships of perceptions of organizational climate to organizational structure, context, and hierarchical position. Administrative Science Quarterly. 18(4): Rao, T.V., & Abraham, E. (1990). The HRD Climate Survey, In J.W. Pfeiffer (Ed.). The 1990 annual Developing Human Resources. San Diego, CA: University Associates. 14

15 Annex 1 Items Overall Mean score Gender Department M F Credit CSD Op Cash 1 The top management of this organization goes out of its way to make sure that employees enjoy their work. 2 The top management believes that human resources are an extremely important resource and that they have to be treated more humanly. 3 Development of the subordinates is seen as an important part of their job by the managers/officers here. 4 The personnel policies in this organization facilitate employee development. 5 The top management is willing to invest a considerable part of their time and other resources to ensure the development of employees. 6 Senior officers/executives in this organization take active interest in their juniors and help them learn their jobs. 7 People lacking competence in doing their jobs are helped to acquire competence rather than being left unattended. 8 Managers in this organization believe that employee behavior can be changed and people can be developed at any stage of their life. 9 People in this organization are helpful to each other Employees in this organization are very

16 informal and do not hesitate to discuss their personal problems with their supervisors. 11 The psychological climate in this organization is very conducive to any employee interested in developing himself by acquiring new knowledge and skills. 12 Seniors guide their juniors and prepare them for future responsibilities/roles they are likely to take up. 13 The top management of this organization makes efforts to identify and utilize the potential of the employees. 14 Promotion decisions are based on the suitability of the promotee rather than on favoritism. 15 There are mechanisms in this organization to reward any good work done or any contribution made by employees. 16 When an employee does good work, his supervising officers take special care to appreciate it. 17 Performance appraisal reports in our organization are based on objective assessment and adequate information and not on favoritism. 18 People in this organization do not have any fixed mental impressions about each other. 19 Employees are encouraged to experiment with new methods and try out creative ideas. 20 When an employee makes a mistake, his supervisors treat it with understanding and help him to learn

17 from such mistakes rather than punishing him or discouraging him. 21 Weaknesses of employees are communicated to them in a nonthreatening way. 22 When behavior feedback is given to employees, they take it seriously and use it for development. 23 Employees in this organization take pains to find out their strengths and weaknesses from their supervising officers or colleagues. 24 When employees are sponsored for training, they take it seriously and try to learn from the programs they attend. 25 Employees returning from training programs are given opportunities to try out what they have learnt. 26 Employees are sponsored for training programs on the basis of genuine training needs. 27 People trust each other in this organization. 28 Employees are not afraid to express or discuss their feelings with their superiors. 29 Employees are not afraid to express or discuss their feelings with their subordinates. 30 Employees are encouraged to take initiative and do things on their own without having to wait for instructions from supervisors. 31 Delegation of authority to encourage juniors to develop handling higher responsibilities is quite common in this organization

18 32 When seniors delegate authority to juniors, the juniors use it as an opportunity for development. 33 Team spirit is of high order in this organization. 34 When problems arise people discuss these problems openly and try to solve them rather than keep accusing each other behind the back. 35 Career opportunities are pointed out to juniors by senior officers in the organization. 36 The organization s future plans are made known to the managerial staff to help them develop their juniors and prepare them for future. 37 This organization ensures employee welfare to such an extent that the employees can save a lot of their mental energy for work purposes. 38 Job-rotation in this organization facilitates employee development Here, M=Male F=Female CSD=Customer Service Department Op=Operation 18