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    EXECUTIVE SUMMARY

    The research and actual application of SHRM shows that moving in this direction is good for

    companies. However, the research should leave no doubt that the transition is difficult, and it

    does require changing well-established attitudes and roles. These are attitudes that have

    existed for decades, and they are not going to change quickly. On the other hand, as with

    many things that occur in the world of business, as companies realize that advantages that

    come with SHRM, more will move in that direction and require acceptance of the policies

    that come with it (Wright & McMahan 1992: 316; Siddique 2004: 219).

    1.INTRODUCTION

    1.1HR AND ITS FEATURES

    Edwin Flippo(1984) defiNes HRM asplanning, organizing, directing, controlling of

    procurement,development, compensation, integration , maintenance and separation of

    human resources to the end that individual, organizational and social objectives are

    achieved.

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    Fig1 Human resource and features

    1.2SHRM

    Strategy is the direction and scope of an organization over the longer term ideally,

    which matches its resources to its changing environment, and in particular, to its

    markets, customers and clients to meet stakeholder expectations.

    (Johnson and Scholes, 1993)

    1.3SHRM and business strategy

    In majority of organisations people are the biggest asset and are used to the maximum effect

    to create value. A good strategy, one which is likely to succeed is informed by people factors.

    So both SHRM and business strategy must be mutually informative.

    HR

    strategy

    training recruitment

    compensati

    on

    Performance

    management

    Careermana ement

    Business result

    Business

    strategy

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    1.4SHRM and human capital management

    HCM complements and integrates SHRM by management through measurement, providing

    guidance, creating value through people and create a link between HRM and business

    strategy.

    1.5SHRM and business performance

    Positive management relationships with the superiors and motivation and strong values of the

    employees will lead to higher levels of business performance.

    fig2 poles of strategic plan

    Aktouf(1996)

    Senior management

    environment resources

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    Strategic planning

    Admiral James.G.stavridis

    Fig3 strategic planning process

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    Table1 strategic planning process

    HRM,Robert L mathis and john H Jackson tenth edition(2004)

    1.6Strategic implementation

    The heart of execution lies in the three core processes:

    Peopleprocesses,operation processes,strategy processes.

    Larry Bossidy,execution.The discipline of getting things done

    Fig4 shows strategic management model

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    Fig5 shows hierarchy of levels in strategic decision making.

    Fig6 shows SHRM matching model: source(devanna et al 1984)

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    HR strategy models: resource based model and control based model, integrative model.

    2.REVIEW OF KEY CONCEPTS OF SHRM

    Job Analysis: is the process of studying and collecting information relating to the operations

    and responsibilities of a specific job. The immediate products of this analysis are job

    descriptions and job specification.

    Recruitment: is the process of finding and attracting capable applicants for employment. The

    process begins when new recruits are sought and ends when their applications are submitted.

    The result is a pool of applicants from which new employees are selected. Selection is the

    process of differentiating between applicants in order to identify (and hire) those with greater

    likelihood of success in a job.

    Training and development: It is an attempt to improve current or future employee

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    performance by increasing an employees ability to perform through learning, usually by

    changing the employees attitude or increasing his or her skills and knowledge. The need for

    training and development is determined by employees performance deficiency, computed as

    follows: Training and development need = Standard performanceActual performance

    Remuneration: is the compensation an employee receives in return for his or her

    contribution to the organization.

    Motivation: is a process that starts with a psychological or physiological deficiency or need

    that activates behavior or a drive that is aimed at a goal or an incentive.

    Participative management: Workers participation may broadly be taken to cover all terms

    of association of workers and their representatives with the decision making process, ranging

    from exchange of information, consultations, decisions and negotiations to more

    institutionalized forms such as the presence of workers members on management or

    supervisory boards or even management by workers themselves as practiced in Yugoslavia.

    (ILO)

    Communication: may be understood as the process of exchanging information, and

    understanding among people.

    Safety and health: Safety means freedom from the occurrence or risk of injury or loss. In

    order to ensure the continuing good health of their employees, the HRM focuses on the need

    for healthy workers and health services.

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    Welfare: as defined by ILO at its Asian Regional Conference, defined labour welfare as

    term which is understood to include such services, facilities, and amenities as may be

    established in or in the vicinity of undertakings to enable the person employed in them to

    perform their work in healthy, congenial surroundings and to provide them with amenities

    conducive to good health and high morale.

    Transfer: involves a change in the job (accompanied by a change in the place of the job) of

    an employee without a change in the responsibilities or remuneration.

    Separations: Lay-offs, resignations and dismissals separate employees from the employers.

    Employee Relations: is concerned with the systems, rules and procedures used by unions

    and employers to determine the reward for effort and other conditions of employment, to

    protect the interests of the employed and their employers, and to regulate the ways in which

    employers treat their employees.

    Disputes and their settlement: Industrial disputes mean any dispute or difference between

    employers and employers, or between employers and workmen, or between workmen and

    workmen, which is connected with the employment or non-employment or terms of

    employment or with the conditions of labour of any person.

    Table1.Keyconcepts of SHRM

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    3.ORGANISATION-SBI

    State Bank of India (SBI) is a large scale commercial bank in India in the following aspects

    such as assets, profits, deposits, customers, branches and employees.SBI ranked 64th of Top

    1000 Banks in the world and 11th in Asia by "The Banker" in July 2009.SBI is the largest

    financial services company with a 200 year history. The Government of India is the single

    largest shareholder of this Fortune 500 entity with 59.73% ownership.

    Structure of sbi

    Fig7 organisation structure of sbi

    The organisation is headed by the chairman and board of directors who decide the policies,

    strategies and goals of the organisation. The chairman is supported by a secretariat which

    consists of five divisions headed by deputy managing directors . these five divisions are

    information technology, financial division, inspection& management audit, credit division

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    and development division. The organisation is further divided into business groups headed by

    managing directors based on the functions they have to undertake. Presently, there are four

    functional groups viz, corporate banking, new businesses, international banking and

    accounts&services.Each MD is assisted by a chief general manager who is further assisted by

    a team of general managers who are again functional heads heading divisions like operations,

    credit, inspection, treasury etc. Sbi has 10000 branches which are geographically and

    functionally grouped into various modules. Each module is headed by a deputy general

    manager who reports to the general managers depending on the function assigned. The DGM

    of a module is assisted by a secretariat consisting of AGMs CMs and managers who

    perform the various tasks like credit processing, general banking, lead bank operations etc.

    Fig8 Details of structure of sbi

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    3.1Business review of sbi 2010-2011:

    Profit The operating profit of the bank for FY 2009-2010 stood at Rs.18320.91Cr as

    compared to Rs. 17915.23 cr in Fy2010 registering a growth of 2.26 %.The bank has

    posted a net profit 9166.05 RsCr in Fy2010.The bank has increased Dividend to rs

    30rs per share(2010) from 29rs per share in last year. Operating expenses increased by

    29.84 % attributable to higher staff cost and other expenses.

    Assets and liabilities The total assets of the bank increases by 9.23%.The banks

    market share in domestic advances was 16.28% as of march 2010.where as the

    aggregate liabilities rose by 8.93 %.The increase in liabilities was mainly contributed

    by the increase in deposits and borrowings.The banks market share in deposits was

    16.31% as of 2010.Higher provisions had to be made according to the RBI rules as

    special home loans are riskier. Other substantial provisions and as well as the higher

    tax ones had led to decrease of 9.84% in net profit (2009-2010) banks capital remains

    adequate despite a drawdown from the reserves. Net profit of associate banks has

    increased by 21.62%.below are few data above entities.

    Fig9 elements of hrm

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    Strategy adopted by SBI

    Institutuion for advanced learning,internal consultant,feedback supplier,think tank,research

    and development,staff training centre overlapping,

    Hr practices in SBI

    Vision

    It is essentially to facilitate the bank to carry out central banking activities

    Mission

    It is to create a facilitating environment to enhance the efficiency of the Bank; to empower

    the staff so as to draw out the latent potential;and to catalyze conditions for a more

    wholesome quality of life on the work as well as personal front.

    4.LITRETURE REVIEW

    The purpose of this section of the report is to look at research and information

    regarding HR departments. The background information is being provided in the context of

    determining the problems and opportunities that exist for HR departments to transition from

    simply doing human resource management to handling strategic human resource management

    for the companies in which they operate. One of the ideas that exists about human resource

    management is that it was divided into its various parts in the past. This division of what

    constitutes human resource management is known as a subfunctional view. One of these

    problems is that the subfunctional view created problems for HR managers to try to

    understand how all of these functions actually came together. The end result has been that HR

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    departments have not seen that all of the functions they perform actually do work together to

    accomplish the overall vision for the company (Wright & Snell 2001: 206).

    In fact, Van Donk & Esser (2001: 302) note that human resource managers often view

    the idea of managing human resources as lying within certain areas of concern and policy for

    the company and its employees. These areas concern the influence that a company may give

    to employees and even employee unions, the flow of human resources to various parts of the

    company, the rewards and benefits that are given to the employees, and the actual design of

    the work and the jobs that are performed.

    Lundy (1994) also explains, as far as human resources goes in the United

    States, that their was an old system in place of managing employees. This was a system

    where those who oversaw personnel decisions really lacked any power or decision-making

    skills at all.In fact, Appleby & Mavin (2000) conducted research to determine what happens

    when there is an integration of human resource roles and ideas. The research looked at over

    800 companies in the manufacturing industry in England.

    HR planning

    HR planning is classified as anticipating future business and environmental demands on

    organisations and meeting the personnel requirements dicatated by those

    conditions(Cascio,1987a).Unfortunately evidence suggests that link between HRP and

    SHRM often is not emphasized in practice(Baird et al.,1983; Desanto,1983;Olian&

    rynes,1984;Rowland&Summers,1981)

    Performance management system

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    Neely et al.4

    defined performance measurement its strictest sense as the process of

    quantifying the efficiency and effectiveness of action. Neely5

    went on to identify the activities

    required to measure performance by defining a performance measurement system

    Franco and Bourne61

    identify the most significant factors affecting the use of performance

    management. These factors are heavily influenced by the change management literature

    reflecting the need not only to manage the implementation of a performance management

    system but also the ongoing change hat results from the review and management of

    performance.

    Corporate culture - some studies highlight the need for a corporate culture that encourages

    team working, ownership of problems and risk-taking or entrepreneurship, while others

    emphasise the need for a corporate culture orientated to continuous improvement and use

    of the SPM system.

    Alignment - the integration and linkage of individual strategies and goals, and the good

    match between managers responsibilities and the performance being managed.

    Review and update - a continuous review of the strategy, the performance being managed

    and systems and processes being used to manage. The focus of performance management

    should be to drive action for improvement and learning rather than control. There should

    also be focus on the development of action plans in order to explain how the gaps between

    performance measures and goals could be closed, and review their progress periodically.

    Communication and reporting - of performance and progress. There is emphasis on the

    need for prompt and formal feedback.

    Involvement of employees. There is consensus around the benefits of making everyone

    participate in the development of measures. Involvement in the selection and definition of

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    measures can reduce employees and managers resistance to performance management,

    and increase their usage level of performance measures.

    Management understanding.

    Compensation linkthere is inconsistency in the literature regarding the linkage between

    incentive compensation and strategic performance measures. In addition, a lack of

    understanding around the concept of compensation seems to exist, since studies use the

    words incentives, rewards and compensation interchangeably.

    Table2 Performance management concepts

    Employee compensation

    Employee compensation practices differ across employment units (e.g., organizations,

    business units, and facilities) on several dimensions (Gerhart & Milkovich, 1990, 1992;

    Gerhart, Milkovich, & Murray, 1992). The focus of the employee compensation literature has

    been on defining these dimensions, understanding why organizations differ on them

    (determinants), and assessing whether such differences have consequences for employee

    attitudes and behaviors, and for organizational effectiveness. In the following discussion, we

    briefly describe the basic dimensions of compensation and summarize some of the key

    theories used to explain the consequences of different compensation decisions. A discussion

    of pay determinants can be found in Gerhart and Milkovich (1990, 1992).

    Strategic Pay

    Pay practices vary significantly across employing units and to some degree, across jobs.

    We discuss the form, level, structure, mix, and administration of payment systems (Gerhart &

    Milkovich, 1992; Heneman & Schwab, 1979; Milkovich & Newman, 1993).

    Reinforcement and expectancy theory

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    Reinforcement theory states that a response followed by a reward is more likely to recur

    in the future (Thorndike's Law of Effect) expectancy theory (Vroom, 1964) focuses on the

    link between rewards and behaviors (instrumentality perceptions), although it emphasizes

    expected (rather than experienced) rewards (i.e., incentives).

    Equity theory

    Equity theory suggests that employee perceptions of what they contribute to the

    organization, what they get in return, and how their return-contribution ratio compares to

    others inside and outside the organization,' determine how fair they perceive their

    employment relationship to be (Adams, 1963).

    Agency theory

    Agency theory, until recently best known in the economics, finance, and law literatures,

    focuses on the divergent interests and goals of the organization's stakeholders, and the ways

    that employee compensation can be used to align these interests and goals (Eisenhardt, 1989;

    Fama & Jensen, 1983)

    Thinking Integrated Space-TQM and HRM

    By P. Vijayan

    TQM

    refers to a set of principles and practices whose core ideas include understanding

    customer needs, doing things right the first time, and striving for continuous

    improvement. TQM approach emphasizes a prevention, rather than a detection approach

    to work. Traditionally, TQM was on the agenda of Manufacturing, Operations and SCM.

    TQM SELECTION PROCESS

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    As opposed to what was believed traditionally by the HR Department, generation of more

    number of CVs is generally not good. Instead, firms should filter the applications and

    spend more time with few candidates.

    EMPLOYEE SATISFACTION

    Itis as important as Customer Satisfaction because satisfied employees can add value

    towards enhancing customer satisfaction. It also bridges the gap between what senior

    leaders feel is necessary to improve employee satisfaction & their real need.

    PERFORMANCE APPRAISAL & JOB PERFORMANCE

    These practices can cause managers to ignore system factors and cause employees to

    compete instead of cooperate as:

    In sharp contrast to the TQM performance assumption, the field of human resource

    management (HRM) assumes that performance is largely due to the worker and not the

    system/process.

    Both person and system factors can directly influence work performance. Moreover,

    system factors can enhance or constrain the influence of person factors on work

    performance

    5.CRITICAL ANALYSIS

    5.1HR PLANNING

    HR initiatives have been taken by the bank to motivate the employees to perform better so as

    to achieve banks growth plans.

    5.1.1Learning and development

    Jagrithi a leadership program for branch managers and unit heads of CPCs has been designed

    and conducted.Training system of the bak was awarded Golden peacock national award 2009

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    5.1.2Personnel management

    Retired employees medical benefit scheme has been modified.centralised payment of pension

    has been made operational.

    5.1.3Industry relations

    Massive recruitment excercises have been undertaken to recruit around 22000clerical staff

    and 5000 officers.

    5.1.4HRMS project

    Salary and pension processing and payment of 2.08lac employees including employees

    retired have been centralised.HRMS wil make additional services on online submission and

    viewing of the data.The above initiatives would help in employee satisfaction.

    5.2Training and development sbi

    The State Bank Academy (SBA), was set up at Gurgaon, on the 18th November,

    1982. Its a centre for training and development. Its basically formiddle and senior

    management officials of the State Bank group. Various programmes are held there for

    the officials. These have attained a steady - stream maturity over the years. Over

    19,000 managers during the past five years have been trained. Gurgaon visualizes an

    unfolding opportunity in the use of new, technology enabled training methods as a

    supplemental training medium. It has designed and launched an institution-wide e-

    learning programmes to be used by managers at various branches of the bank . This

    Endeavour is intended to deepen the collective training exposure of SBI managers.

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    Changes observed due to SAP and ERP:

    State Bank Group responded faster to market demands. It also enabled real-time information

    access. It could assign the right people to the right positions at the right time. On

    Implementation of SAP ERP helps the State Bank Group drive in innovation in areas of

    human capital management and ERP such as e- learning, virtual classrooms, career

    development competency assessment, performance management and property management

    Brainstorming sessions were conducted to find solutions about declining market share, and

    came up with the idea of a massive programme of transformation. A program titled

    "Parivartan" was conducted to get employees at all levels to undergo training and charge

    themselves to better tackle competition and change at the market place.

    5.3RECRUITMENT

    SBI is committed to principles in recruitment and selection process.The following are the

    principles

    Recruitment is purely based on merit.Promotion of equity in the company.fairness and

    transperancy.

    SBI recruitment objective is to find the best talent and to endeavor right talent at the right

    time as per the business requirements.

    Types

    Bank hires employees on permanent and contract basis as well.Any departmental head in

    need of additional employees should raise the man power requisition form to HR and discuss

    the arrangement.Fulltime employees are required to work 44hours per week.

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    Use of recruitagencies will be resorted by the bank only if the advertisements and website

    posting donot get the righ kind of person for the job.The process begins with manpower

    requisition and the overall pricess is completed by the CEO.

    Sourcing the candidates

    Internal job postings,employee referral,job portals,walkins,web site,campus

    recruitment,newspaper advertising,existing database.

    5.4SELECTIONPROCESS

    general steps in the selection processResumes reviewInitial screening interviewAnalyze the application blank

    Conducting test n evaluating performancePreliminary interviewCore n departmental interviews

    Reference checksJob offerrejection by candidateoffer to next suitable candidateMedical examination / placement

    Table3 Stages in selection process

    Screening at SBI is conducted to narrow down the pool of candidates to those who meet best

    position requirements.By using the job description it can be concluded if the job is suitabke

    for the candidate or not.It also lists the qualifications,scope,experience etc.Functional and

    technical knowledge is also a crieteria looked upon at this stage.

    Final selection will be made on the basis of performance in the written test and interview

    takentogether.

    SBI Written Examination (Phase - I)

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    Maximum Marks - 300, Total Duration - 4 hours.

    Objective Type Tests consists of

    Test of data Interpretation and Analysis,Test of Reasoning.Test of General

    Awareness,Test of English Language.

    SBI Descriptive Type

    Test of English Language The Descriptive Test will be for maximum of 50 marks and for

    duration of 1 hour.

    SBI Group Discussion & Interview (Phase - II)

    Group Discussion and SBI Interview will be of 50 marks (20 marks for Group discussion and

    30 marks for interview

    Interview and selection

    Its the most important stage in recruitment process.The interview will be conducted in two

    stages.Interview panels are different for different positions and members in the corporate

    teams may participate in interviewing when recommended by the CEO.Few criteria are

    followed before appointment process such as

    Reference checks,original certificates clarifications,medical results etc.

    Offer and notification

    The decision to offer the job to the selected candidate will be based on final candidate

    assessment and reference.Hr will prepare letters of appointment with terms and condition as

    accorded by the CEO.The letter of appointment is issued and signed by head HR.In all cases

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    the new employee must sign in full on duplicate copy of offer letter duly accepting conditions

    and complete all necessary formalities before the commencement of duty.

    SBI Probation for Recruitment

    SBI Selected candidates will be on probation for a period of one year. After completion of

    probation successfully, the officers will be confirmed in SBI Bank position.

    Confirmation

    This process is initiated by reporting manager of the employee.The manager would give a

    written feedback to HOD.And then a confirmation letter will be issued to the employee by the

    HR.An employee failing to achieve will repeat the probation period.

    Posting

    It involves positioning the employee in a particular role.It depends on needs of the bank.

    5.5PERFORMANCE MANAGEMENT

    There are three phases in performance management system of SBI

    Setting expectations for employee performance, maintaining communication between

    supervisors and employees,measuring actual performance relative to expected performance.

    Objectives

    The primary focus is on appropriate training measures,consistent performance appraisal

    system,system for evaluating performance.

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    Performance appraisal

    Framework

    Appraisal forms- various formats have been developed for grades. These appraisal forms

    recognise the role diversities in various levels of the organisation.

    Format design

    Its common for all grades but the criteria changes.both qualitative and quantitative factors are

    to be appraised.Assessment is done on weightage basis and these forms are reviewed in the

    mid of year.accurate and fair evaluations are to be undertaken by reporting and reviewing

    authorities.

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    Performance management process flow

    Fig10 performance management system at sbi

    Performance

    planning

    review

    Performance rating Personal

    development plan

    Rewards and careerdevelopment

    Learning anddevelopment

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    Various parameters are used to asses employee performance

    Rating scale 5- outstanding- employees performance is exceptionally excellent.

    4- very good- employee exceeds expected level

    3- good- meets requirements more than satisfactory level

    2-above average- just satisfactory

    1-average- meets minimum requirements

    KPI and normalisation methods are used for objective assessment.KPI method is used in SBI

    for measuring performance.two kind of measurements are used for goal accomplishment

    using numerical data and verifying input from those who know (qualitative).normalisation

    can be carried out as per the guidelines after the appraisal format ratings.an example below

    shows how normalisation is done

    Performance of the bank-------------------------->

    Below budget at budget above budget

    Excellent 5% 10% 20%

    Very good 10% 20% 30%

    Good 45% 50% 55%

    Above average 25% 20% 15%

    Average 15% 10% 5%

    Percentage of employees receiving rating

    Table 2 normalisation method at sbi

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    Normalisation process

    Normalisation of performance score is done when required, a distribution curve is drawn

    based on bank performance, various employee clusters are identified, respective employees

    are slotted into categories.

    5.6COMPENSATION AND BENEFITS

    Bank uses an appropriate mix of compensation components such as

    Base pay- Its the salary paid to staff for normal duties during the course of work.

    Basic rate pay- Salary paid to all staff for normal duties and fixed monthly allowances.

    Commissions- to drive performance incentive schemes based on job needs are provided.

    Allowances- SBI offers various allowances such as

    Shift allowance

    Employees who are required to regularly work more than 1 rotating shift pattern at the

    request of the bank will be paid shift allowance.

    Meal allowance

    Its provided when the employee works on Sundays and public holidays or after office hours.

    Transport allowance

    Its provided to senior staff members at SBI.

    Overtimepay

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    When staff work additional hours at SBI they are provided with extra pay.various procedures

    are followed to calculate overtime.

    Salary ranges

    Each job at sbi has salary range with minimumand maximum points.on annual basis salary

    range is reviewed to ensure internal equity and market competitiveness.

    Annual increments

    Salaries re reviewed every 1st

    july on each year.First service increment will be given on the

    anniversary day of employment for each employee.

    Promotion increments

    Upon promotions employees will have their salaries reviewed.

    MEDICAL AND HEALTH

    The bank provides medical benefits to the employees by reimbursement against medical

    expenses.For specialist care or diagonistic tests a referral letter will be given by the bank to

    the banks appointed panel of general practitioners.bank entered into agreement with leading

    insurance companies for suitable group medical insurance policies.

    TRAVEL AND ENTERTAINMENT

    In the normal course of their duties, employees may be required to incur business related

    expenses.So they are entitled to reimbursements of such reasonable expenses.any mode of

    transport such as private vehicles,local bus,trains can be adopted to visit for the business

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    issue.But the employees should choose most economical route and mode of transport for the

    visit.

    Claim procedure

    Claims must be submitted to the HR and must be signed both by the employee and the

    manager.

    Overseas business travel

    Overseas Business trips includes meetings,conferences,seminars,training programs

    etc.Employees are required to obtain prior approval from the head.employees are required to

    travel by airlines appointed by the bank.All bookings should be made directly through

    airlines or banks appointed travel agencies.out of pocket expenses will also be paid to the

    employees during the business trip.Employees will pay for the accommodation charges and

    claim reimbursement from the bank upon their return.All the transport claims should be

    submitted to the HR with supporting receipts.

    Entertainment

    Leave travel concession (LTC) is provided once in every four years by SBI to all the

    employees and family with more than one year experience. They can visit hometown which

    is also borne by the Bank once in every two years.

    5.7Employee Relations

    The employer employee relations in State Bank of India are very harmonious and cordial.

    The roles and responsibilities of the employees are clearly defined and documented. A

    grievance redressal mechanism is also in place to address employee grievances. The bank

    also supports formation of Union of the employees which is a democratically elected body

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    and represents the voice of the employees. The salaries, perks and other benefits of the

    employees are represented to the management by the employees Union and amicably settled.

    Both the management and employees ensure that there is constructive cooperation for the

    betterment of the Bank and the employees. The industrial relations are bound by a Code of

    Discipline accepted both by the Management and Employees.

    6.SWOT analysis of SBI

    Strengths Weaknesses Opportunities Threats

    Brand name Needs further

    modernisation

    New branches in

    foreign locations

    CRM

    Govt. Owned Hierarchical

    Management.

    Mergers Employee strike

    Leader Hindrances in org. ATMs Advent of MNC

    banks

    Wide distribution

    network

    Delay in decision

    making

    Expansion Private banks

    venturing into rural

    areas; Banking

    licences to Foreign

    Banks a major threat

    Table3 swot analysis of sbi

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