A Study of Hrm Practice as Talent Management in Icici Bank Limited

8/10/2019 A Study of Hrm Practice as Talent Management in Icici Bank Limited

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A Study of HRM Practice as

Talent Management in ICICI

BANK LIMITE

Su!mitted to

Prof" e!i "S" Saini

HRM

Group Project:Term-III

27NMP44Amit Jain27NMP45AnandSan!ar27NMP5"#oma$ Ta%ra

27NMP7&SumitA%%ar'a$


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A Study of HRM Practice as Talent Management in ICICI BANK LIMITE

Abstract:

The case discusses the talent management strategies at India-based financial banking institution, ICICI Bank Ltd. (ICICI

Bank). Since the 1!"s, the bank has fostered a culture of nurturing #oung talent. This $as a bid to create a talent %ool

and to de&elo% a leadershi% %i%eline at the bank. The %rocess of em%o$ering #oung %eo%le, nurturing talent, and

de&elo%ing a leadershi% %i%eline became %art of the bank's culture and $as carried for$ard b# former C and *+,

amath and %resent C and *+, Chanda ochhar. amath $as instrumental in grooming se&eral %eo%le $ho later

took u% ke# %ositions at the bank. e s%otted %eo%le $ith leadershi% %otential at the bank and mo&ed them from one

assignment to another and mentored them to take u% different leadershi% roles and ser&e the bank.

The success of the mentoring %rocess led to the bank institutionali/ing a formal leadershi% de&elo%ment %rocess that

identified talented em%lo#ees through a %erformance a%%raisal s#stem after $hich the# $ere assessed for future

leadershi% roles.0ccording to e%erts, ICICI Bank's focus on nurturing #oung talent rea%ed se&eral benefits for the bank.

2hile the leadershi% grooming %rocess hel%ed it tackle the %roblem of attrition, it also enabled the bank mo&e ahead of

others in the Indian banking sector. The bank's focus on nurturing #oung talent also hel%ed ICICI Bank de&elo%businesses that accounted for half of ICICI Bank's %rofits. Industr# obser&ers felt that going for$ard, the challenge for

ochhar $ould be to maintain the bank's momentum, continue international e%ansion, e%and %roduct offerings,

im%ro&e technological inno&ation, and continue to nurture #oung talent. The main issue in this case is, as %er market

sur&e# ICICI B03 is not a good %a#master and a&erage salar# of its em%lo#ee is 4lo$er than the other com%etiti&e

banks but still ICICI B03 is more %rofitable than other %ri&ate banks and the main reason for this is successfull#

managing its talent %ool and retaining them b# gi&ing %ro%er training and sho$ing them the future success %ath.

INTRODUCTION

Banking Regulation Act of India, 1949 defines Banking as accepting, for the purpose of lending or of investment of

deposits of money from the pulic, repayale on demand or other!ise or !ithdra!le y che"ue, draft order or

other!ise#$ %he Reserve Bank of India Act, 19&4 and the Banking Regulation Act, 1949, govern the anking operations in

India#

Banking 'tructure in India

%he Industrial (redit and Investment (orporation of India )imited#* In 199+, it !as incorporated as the initiative of orld

Bank# -.ective: (reating a development financial institution for providing medium term and long term pro.ects financing

to Indian Business# In 1994, I(I(I estalished Banking (orporation as a Banking 'usidiary !hich !as later renamed as

I(I(I Bank )imited$#

2


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In the 199/s, I(I(I transformed its usiness from In -ctoer 0//1, the Bo of a development financial In 1999, I(I(I

ecome I(I(I and I(I(I Bank institution offering only the first Indian company approved the merger of pro.ect finance to

a I(I(I and t!o of its !holly2 and the first ank or diversified financial services o!ned retail finance group offering a!ide variety financial institution susidiaries, I(I(I 3ersonal of products and from non2apan Asia to 5inancial 'ervices

)imited services, oth directly and e listed on the 67'8# And I(I(I (apital 'ervices through a numer of )imited, !ith

I(I(I Bank susidiaries#

By the igh (ourt of udicature at umai and the Reserve Bank of India in April 0//0# By the igh (ourt of ;u.arat

at Ahmadaad in arch 0//0#By shareholders of I(I(I and I(I(I Bank in anuary 0//02 %he merger !as approved:

I(I(I Bank is India


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* here R fits in the modern central ank

* anaging people and linking !ith technology in anking operations needs to e prioriti@ed#

In I(I(I ank >commercial private ank? !e face similar R issues ut !e have achieved ecellence in handling such

issues y industry est practices# %oday !e !ill discuss ho! the I(I(I ank has een ale to manage its talentDhuman

capital# 8mployees are the strength of I(I(I ank !ho helps the organi@ation to achieve the vision and mission#

HUMAN RESOURCES DEVELO.MENT ICICI

%he achievement of an organi@ation is the result of the comined efforts of each and every employee# All individuals !ant to

do a good .o, and if they are provided !ith the proper environment, they !ill do so# 3eople rarely succeed at anything unless

they en.oy doing it# %he Bank has al!ays vie!ed uman Resource >R? evelopment as a critical activity, as it plays a very

important role in culture uilding and gives an impetus to the effort put in achieving usiness goals more efficiently# A seminar!as conducted in anuary 1999 !hich enaled the Bank to estalish clearly the link et!een usinesses strategy and human

resource strategy# Accordingly, different kinds of mindsets !ere !orked out to ascertain the re"uirements in the staff in

the three main lines of usiness corporate anking, retail anking and treasury operations# In the foreign anks and

private sector anks, ho!ever, there has een gro!ing recruitment amongst the officersJ cadre !ith a decline in therecruitment of clerical and suordinate staff# 3rivate Banks started the decade !ith 04#+K of staff as officers, +4#=K

as clerical, and 0/#LK as suordinate staff# By the end of the decade &M#0K of the staff !ere officers, 4+#9K!ere clerical,

and 1L#9K !ere suordinate staff# A ne! organi@ational structure effective April 1, 1999 !as implemented successfully

!ith the change agent role played y the R epartment# %hree different .o profiles vi@#, customer service and

cross selling of products, ack office operations and marketing and sales emerged after the ne! organi@ational structure

!as put in place# %he recruitment process has een fine tuned through specially devised processes that identify an

individual


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usiness# %raining programs of shorter duration !ere designed for the eisting staff, !ith specific focus on produc

information, customer service, cross selling of products and operational ecellence# %he promotion process has een

designed on the principles of openness and transparency# (areer progression is ased on performance of employees eingaove an acceptale level !ith emphasi@e on those !ith high usiness drive and potential# %hese eercises are carried out

y the (areer evelopment (entre, !hich offers a comprehensive competency uilding program# %his process has een

follo!ed for the last + years and has een perceived as eing fair and credile y the employees#

A high level of performance is re!arded y a system of performance onus# %he ratio of variale onus to fied salary is fairlyhigh to attract and retain the est talent in the Bank# In the private and foreign anks there are larger pay differentials, fe!er

re!ards for tenure, and individual incentives are high# 5urther, to ensure that the Bank does not lose high performers and

to increase the motivation levels and instill a feeling of o!nership, the Bank has introduced and 8mployee 'tock -ption 'cheme

>the 'cheme?# %he first grant of stock options under the 'cheme !as made during the year# %he total numer of staff of the

Bank increased from =91 as on arch &1, 1999 to1,&44 as on arch &1, 0///# -n an average, an employee received &L

hours of training during the year# %he Bank conducted &4 internal and ML eternal training programs involving M+= and

19= employees respectively# 5urther, 00 employees !ere a part of overseas training programs

HRDD V's'n

%he Nision of the uman Resources evelopment epartment >R? is essentially to facilitate the Bank to carry out

central anking activities, i#e#>i? %o create an enaling environment to enhance the efficiency of the organi@ation>ii? %odra! out from our staff the very est y a system of proper placements, incentives, O>iii? %o create an atmosphere of trust,

a certain security of epectations and a feeling that the organi@ation cares aout the !ell eing and personal aspirations

of the staff# %his !ould help align personal aspirations !ith professional goals and help enhance efficiency

R ission

%he ission of R is to create a facilitating environment to enhance the efficiency of the BankP to empo!er the staff

so as to dra! out the latent potential and to cataly@e conditions for a more !holesome "uality of life on the !ork as !ell

as personal front#

F$nct'ns - HRDD

1? %o evolve R policies on

a? Recruitment

? 3erformance and 3otential Appraisalc? 3lacement: 3romotion and (areer 3rogression -ut of %urn 3romotionD Increment to 'ports 3erson

d? Industrial Relations

e? eputation D 'econdment

f? Retirement and Noluntary Nacation

g? otivation

h? %raining 8stalishments

i? oility >%ransferDRotation?

.? Remuneration and Re!ard echanism

k? 'taff elfare

l? (ommunication

m? -rgani@ational evelopment

n? %raining and 'kills p gradation >3olicy and Implementation, oth?o? edical

0? -ther than policy aspectsa? Interface !ith other institutions, government, central anks, etc# on R issues

? %o maintain up to date dataase on human resources in the Bank and undertake analytical studies and c?

ongoing research on different manpo!er related issues

d? %o make ongoing revie! of the appraisal system in order to make it an effective tool for R policy

management

e? %o install and implement an effective counseling system

(


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f? %o revie! and revitali@e the training functions

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RECRUITMENT AND SELECTION .ROCESS

Recruitment is the process !hich links the employers !ith the employees# It meets the organi@ations legal and social

oligations regarding the composition of its !orkforce# In anking services recruiting right kind of candidate is very

important as they are the face of ank# I(I(I ank has uni"ue recruitment and selection process# It creates an efficient

applicant pool to fill vacancies# At I(I(I recruitment is high during ay2une O -ctoer26ovemer# Attrition Rate ishigh among sales managers, unit managers and those mostly in sales profile# Recruitment process starts !ith reali@ation of

.o vacancies and understanding of the .o profiles for the same# (losely follo!ed y this is .o design and specifications

for the .o portals# 8very position at I(I(I has a very specific .o design# 8#g# 5or audit, they seek technical kno!ledge

and analytical skills Q an aility to sift through humongous data and ring a contet to it

INTERNAL RECRUITMENTat I(I(I H

Referral forum in company


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3roationary -fficers >.unior level?

1# -nline Aptitude %est0# -nline 3sychometric Assessment -nce the aove t!o are cleared:* ;roup iscussion >(ase

'tudy Based?* 3ersonal Intervie!

3roationary officers undergo a one year intensive residential classroom training at I(I(I anipal Academy and

internship# -n successful completion, they get asored as anager or Assistant anagers>999 students in 0/10?

5or B2'chool ires:* 5irst & !eeks: induction, usiness eti"uette* Allo!ed to !ork for &24 months* Intensive 9 to 9

technical training for one !eek* 7early one !eek training programs >common for all employees?

I(I(I Business )eadership 3rogramme * I(I(I Bank has partnered !ith 6ational Institute of 'ecurities arkets >6I'?

to launch 3ost ;raduate (ertificate in 'ecurities arkets >3;('?-n successful completion of the course participants

get asored at I(I(I Bank >or any other group company? as a anager#

*


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Kn,!e&"e Mana"e(ent

KM t'"ers ICICI Ban# $as gro%n si&'fold since its KM strategy %as esta!lis$ed in ()))* ma#ing it t$e second

!iggest in India today" But t$at strategy $as !een ro!ust enoug$ to gro% %it$ it" Central to ICICI Ban#+s success $as

!een its fle&i!le* inno,ati,e met$ods* and a -let$ora of KM tools t$at %ere cannily mar#eted to staff from t$e ,ery

start

FIRST STE.S

I(I(I BankE? strategy !as estalished in 0///# Back then, the company !as very much

smaller than it is no! H .ust 1,0// staff compared to the &/,/// that !orks for I(I(I Bank today#

o!ever, the programme !as started at a time !hen the companyR? system for

vacation entitlements, ook days off or vie! their personal pension details By putting these simple, ut necessary

activities on the intranet, it encouraged employees to get familiar !ith using !e2ased applications, to overcome any

fear of technology as !ell as providing them !ith a good reason for using the portal on a regular asis#

hat egan more as an idea and less as a pro.ect !as simply the elief that staff should have a space on the intranet

!here they could participate in collaorative activities, such as contriute or find documents, engage in discussions and

post or ans!er "ueries# %hat idea, in essence, first converted the ank to E#

Initially, the organi@ation !as motivated to act due to the upheaval caused y the tail2end of the dot2com oom, !hich

!as depriving the ank of many good staff as they left in significant numers to .oin dot2com start2ups H taking their

kno!ledge and kno!2ho! !ith them# e therefore developed ise ;uy, I(I(I


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to2day asis# %his is !hat makes it virant and engaging#

It is significant that a small pro.ect originally designed for aout 1,0// employees in fe! locations has een fleile and

scalale enough to cater for more than &/,/// employees in more than M// locations, most of !hom are customer2

facing staff#

8verything they need should e at their fingertips, !hether getting an ans!er to a prolem, checking a policy or

accessing standard templates and formats such as letters, agreements or guidelines#

%he importance of scalaility cannot e underestimated# In 0//+, usage increased more than si times compared to the

year efore and the portal marked a record one2million logins in 6ovemer 0//4 after the site !as redesigned# %he

numer of staff using the E portal douled in the same period#

-n average today, aout M,/// users visit the site daily, of !hich 9+ per cent come from I(I(I BankE)'? !as orn#

;uest speakers included eperts on various topics, such as advanced finance, and internal usiness heads !ho !ere

delighted to e invited and !ere !illing to give it a try# E)' evolved to include even chief the financial officers and

(8-s of reno!ned companies in India, !ho have spoken on the topics of leadership and strategy#

(alled Fise ednesdays


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look up all the ne!sletters pulished y internal usiness groups, media releases, as !ell as tracking !hat our

competitors are up to# %hen there are FE2mailers


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it !as replicated for other teams too#

COM.LIANCE0 1UALITY AND CUSTOMER SERVICE

In 0//0, the ank launched its "uality programme to achieve the relevant certification levels throughout

the organisation# 6aturally, E


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arketing E, !e found, is all aout making connections, so !e didn


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5inally, it is aout speed, aout the youth and their energy, aout collaoration and co2operation

WISE GUY CONTRIBUTIONS

ise ;uy has assisted the organi@ation in a numer of !ays# It has helped:

In the creation of a common storehouse of kno!ledgeP

'taff identify sources of in2house epertiseP

In the development of a sense of Felonging< among staffP

'ave the ank moneyP

Improve our employee


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6on2ierarchical

8tension of Authority along !ith accountaility

4# Re!ards2 8'-3includes employee goal setting D o.ective setting?

* -ngoing 3erformance (ommunication* ata ;athering, -servation and ocumentation

* 3erformance Appraisal$ eetings

* 3erformance iagnosis and (oaching

%he 3erformance Appraisal$ system in I(I(I ank emphasi@es individual o.ectives, Bank o.ectives and also mutual

o.ectives#

INDIVIDUAL OB2ECTIVE VIEW.OINT

a? hat task the individual is epected to doG

? o! !ell the individual has done the taskG

c? o! can his performance e further improvedG

d? is re!ard for doing !ell#BANK OB2ECTIVE VIEW .OINT

a? anpo!er information

? improve efficiency and effectiveness

c? serve as a mechanism of control and provide a rational compensation structure

MUTUAL OB2ECTIVE VIEW .OINT

a? %he emphasis is on gro!th and development, harmony, effectiveness and profitaility of the ank

.A MODEL 3

Rank and yank strategy

* Best2to2!orst ranking methods are used to identify poor performers#

"(


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%he identified poor performers are then given a time period to sho! an improvement in their performance#

* If the employee fails, he is asked to leave the organi@ation and a severance package is offered to him#

* If the employee refuses to leave, his service is terminated !ithout any compensation#* Advantage : it continually motivates employees to etter their performance since noody !ould like to e included in

the poor performance and#

* isadvantage : employees ecome too competitive and team spirit is not nurtured#

.A MODEL 4anagement y -.ective >B-?

* In this method the suordinate in consultation !ith the supervisor chalks out short term o.ectives follo!ed y specific

actions#

* %he goals are action oriented, specific, measurale, achievale, revie! ale and time ound, aligned !ith the goal of

the organi@ation#

* %he activities are .ointly revie!ed y oth the suordinate and his supervisor

#* epending on the performance of the suordinate, the goals are modified or redesigned for the net period of time#

Advantages of B-

:* 'elf evaluation

* 3romotes communication and information sharing* otivates employees

* 5acilitates guidanceMODEL 5

1# 3erformance Appraisal 5orm :

0# A self assessment form employees and managers have to fill#0# &M/ degree feedack process : Input is taken from

peers#

3erformance Appraisal Intervie! : anagers and employees take part in a formal intervie!#

;rooming leaders for adaptive challenges 2 %he I(I(I !ay

hen vast opportunity and a meritocratic culture are complemented y a roust process for managing talent, leadership

development ecomes a success

.EO.LE MATTERS EDITORIAL TEAM

At I(I(I, leadership is defined in terms of conviction to set the agenda and persistence to live through the change

!hatever the challenges# If you have leadership potential, someone else esides your manager should kno! you or

should have !orked !ith you# hen vast opportunity and a meritocratic culture are complemented y a roust process

for managing talent, leadership development ecomes a success# (handa Eochhar .oined I(I(I )td as pro.ect trainee in

19=4# hen, !ithin 1/ years of .oining, she !as sent to I(I(I Bank as part of the core team to setup the ank, it !asclear that she had een chosen for a more amitious role than her peers# An internal process had een set in motion,

!herey she !ould e provided !ith more opportunities to uild and lead change as a platform for gro!th and

development# -ther similar roles !ould follo! 22 from infrastructure finance to uilding the retail usiness H mostly

assignments to gro! a usiness from its inception phase, until she ecame (8- in ay 0//9#

ith more than 0,+// employees in the %alent 3ool, I(I(I aims to create a pipeline of eligile talent to cater to allcritical .os in the ank# %his does not happen y default ut y strategic design# %he company puts serious resources,

time and effort ehind this important activity of identifying and grooming talent# In 0//0, the ank started to gro! at an

accelerated rate and the previous process, !hich !as heavily dependent on the contriution of oard memers, had

egun to look osolete# In 0//0, on r# Eamath


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had enough talent and leaders availale from !ithin to eecute their amitious gro!th strategy#

And the ama@ing gro!th of I(I(I in this decade and the seeming ease !ith !hich they have created ne! usinesses is

evidence enough that the process for creating leaders from !ithin is !orking very !ell indeed# At I(I(I, leadership is

defined in terms of (onviction 2 to set the change agenda and 3ersistence 22 to live through the period of change

!hatever the challenges#

ith around &+,/// employees in I(I(I Bank and more than =/,/// across the group, the process of identifying leaders

starts !ith the 3erformance anagement 3rocess# FA pre2re"uisite to e considered part of the talent pool is to

consistently e a good performerone of the anchors? is defined y

ehaviour like consistently leveraging customer interaction as an opportunity to understand customer needs# (onversely,

the stopper is defined y actions like promising more than can e delivered# ith such precise definitions, the process is

ale to standardi@e the seemingly amiguous task of identifying leadership talent# %hese definitions are attriutes that the

core group elieves are re"uired of a leader in the organi@ation# 5inally, all this information is compiled into a one2page

profile !hich highlights the areas that the panel should e focusing on and gives a cue for potential areas for

development#

%he final step is a panel assessment that identifies the aptitude and maturity of the employee


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participants learn to apply standard models !hile appreciating that choosing et!een alternate course of actions !ill

re"uire sound .udgment# %he key focus of the program is to provide the talent pool an opportunity to uild perspective y

using the Action2Behaviour2(onse"uence model# %he most uni"ue aspect of the program is the concept of groupmentoring, as opposed to individual mentoring, !here the entire senior and peer group come together to mentor and aid

in the individual


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References:

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A Study of Hrm Practice as Talent Management in Icici Bank Limited

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