CAIIB Human Resources Management Module B Unit 4 : HR Functions

20/04/2024

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CAIIB Human Resources Management Module B Unit 4 : HR Functions (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Rural Banking includes an important topic called “ HR Functions ”. Every candidate who are appearing for the CAIIB Certification Examination 2024 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Human Resources Management Module B Unit 4 : HR Functions, Aspirants must go through this article to better understand the topic, HR Functions and practice using our Online Mock Test Series to strengthen their knowledge of HR Functions. Unit 4 : HR Functions

HR Functions

With the increasing competition in business organisations and also the consequent transformation in HR role, the following new functions have to be owned by the HR as an impetus to ‘SHRM’:

Core People Role
Organisational Value-Add Role
Business Transformation Role

HRP System

A comprehensive HRP System keeps in mind the following elements:

The organisation’s growth plans.
Current and possible future trends in business.
Gaps in current manpower in terms of numbers and capabilities.
The employment scenario and availability of the desired profiles.
Approach towards cost effective sourcing of candidates.

Various Steps Involved in HRP

A typical HRP consists of the following steps:

Analyzing organisational plans.
Demand Forecasting – Forecasting the overall human resources requirements in accordance with the organisational plans.
Supply Forecasting – Obtaining the data on the present inventory of human resources and forecast the future changes in present human resource inventory.
Estimating the net human resource requirements.
In case of future surplus, plan for redeployment, retrenchment and lay off.
In case future deficit, forecast the future supply of human resources from all sources.
Plan for recruitment, development and internal mobility and career progression of future supply will be inadequate with reference to future net requirements.

HRP Process

Once the manpower gaps have been identified, the next stage is the sourcing process with serious thought given to internal as well as external hiring, the methodology to be used for both along with the training to be given. In the process of estimating the future quantity and quality of people required, the basis should be annual budget and long term corporate plans.

Demand forecasting is based on the following factors.

Internal Factors:

Business projections,
Budget constraints,
New products and services,
Attrition rate

External Factors:

Competitive environment
Job market scenario
Economic climate
Technology changes
Social Factors

Manpower Forecasting Techniques

Work Study Techniques gives the numbers for routine activities and in new areas such as BPO operations where productivity can be measured based on number of calls per hour, etc.
Delphi Techniques involve estimates from a group of experts, and HRP experts normally act as intermediaries, and summarize requirements based on a qualitative assessment. Looking within, the HR experts also identify the talent available in house, and take into account typical absenteeism, internal movements as well as loss due to attrition.
HRP, being an annual exercise, generally in Indian organisations including banks, the HRP exercise is being done internally through HR experts/professionals in their pay-roll.

Recruitment & Selection

Recruitment Process

The recruitment strategy takes into account the potential of current and future employees to sustain and improve on business levels, build an image for attracting the best talent and maintain the competitive edge throughout.

Internal Recruitment

External Recruitment

Selection

Selection is the process of picking up individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in the organisation.
It is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in a job.

Difference Between Recruitment And Selection

Selection Process: Steps Involved

Screening and Preliminary Interview: Screening helps to eliminate applicants who do not fit the desired profile. Preliminary interviews also help weed out the less qualified and weaker candidates.
Selection Tests: Selection tests help in bringing down the number of job seekers, especially in popular jobs such as banking while at the same time helping in short listing better qualified candidates. These tests can be Aptitude Tests, Personality Tests, and Ability Tests and are conducted to judge how well an individual can perform tasks related to the job. Besides this there are some other tests also like Interest Tests (activity preferences), Graphology Test (Handwriting), Medical tests, Psychometric Tests, etc.
Personal Interview: Interview is a formal and in-depth conversation between the applicant and a panel of experts whose role is to assess the potential candidate’s profile and match perceived competencies to that of the given role. Interviews can be One-to-One, Panel Interview, or Sequential Interviews
Reference and Background Checks: Reference checks and background checks are conducted to verify the information provided by the candidates. Reference checks can be through formal letters, telephone conversations. With the recent spate of data theft from call centres as also the possibility of computer hacking and even the terrorist threats, reference and background checks have become very important and today almost all leading companies conduct elaborate background checks.
Selection and Job offer: After assessing the results of all the tests, interviews and other assessment tests if any, a decision is taken on selection of the most suitable candidate. Selected candidates undergo a mandatory medical examination following which the successful candidates are given a job offer, with all relevant details of the position. On acceptance of the offer, an appointment letter is issued, giving all terms and conditions of appointment.

Essentials of a Good Selection Practice

Detailed job descriptions and job specifications prepared in advance and endorsed by HR and line management.
Trained panel of interviewers, with special emphasis on behavioral event interviewing.
There should be some standard with which a prospective employee may be compared (i.e., these should be available beforehand a comprehensive job specification as developed by job analysis.)
Line managers involved at all possible stages.
All newly appointed candidates are put through a well-designed training program.

E-Recruitment

E-Recruitment which also known as “Online recruitment”, is the use of technology or the web based tools to assist the recruitment processes. The tool can be either a job website like naukri.com, the organisation’s corporate web site or its own intranet.
Many big and small organisations are using Internet as a source of recruitment. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae (CV) through an e-mail using the Internet. Alternatively, job seekers place their CVs in worldwide web, which can be drawn by prospective employees depending upon their requirements.

Advantages of E-Recruitment

It is highly cost efficient and promises increased ROI.
It gives accessibility to a big pool of resumes compared to other methods like newspaper ads.

E-recruitment brings in an organized and proactive recruiting process.
Easy and efficient way of recruiting.
Shortened recruiting time span.
Reduced complexity, reduced paper work and streamlined workflow.
Establishes efficient communication channel between recruiter and candidate.
Helps in establishing a relationship between the recruiter and the candidate.
Dependable database applications available to support the company’s recruitment process.
Modern HR departments cannot ignore the efficiency that internet brings in.

Latest Trends in Corporate Recruitment

Corporate Talent Network
Social Sourcing
Recruiters as Sourcers not Recruiters
A Barrage of New Assessment Science
Building an End-to-End Talent Brand
Modernized applicant tracking software
A great candidate experience
High value outsourcers and staffing firms
BigData and BigData Firms

Role of Recruitment Agencies from the Point of the Company and Prospective Candidate

One of the latest trend in recruitment method is through recruitment agencies. This intermediary recruitment method ease the administrative problems for both the Corporates and the prospective candidates.
Recruitment agencies match candidates to job vacancies, working with companies directly to help fill their roles. Recruitment agencies work in a number of different ways. Initially, a company will get in touch with them to say they have a role on offer. The recruitment agency will then either:
Look at their current database, to find matching candidates.
Post the job online to source applicants with the right skills.

When they’ve sourced some suitable candidates, they’ll then send them through to the company for approval, and generally arrange interviews for the best-matching candidates.

Benefits of using a recruitment agency include:

CV and cover letter advice
Expert interview coaching
Constructive feedback from each interview and employer
Specialist advice for your chosen field
Being put forward for any relevant roles that come up

In Public Sector Banks, the recruitment to lower positions in feeder cadre, i.e., Sub-staff is being done by individual banks whereas in the recruitment to clerical positions and to the officer positions up to Scale III is being done through Institute of Banking Personnel & Selection (IBPS). However, for the senior positions like Scale IV and above are being done through recruitment agencies of high repute having sufficient expertise in sourcing such positions through innovative and effective selection methods like. Assessment Centre Approach, Management Games, etc., besides tough aptitude test, wherever required.

Impact of Technology on Critical HR Functions

Sourcing: Redditt, Github, Facebook Graph search, Network Money, I-Page, Linkedin are popular platforms which help companies to reach a talent pool that’s relevant to their needs.
Referrals: Zao is an employee referral software. It provides an easy-to-use platform for managing referral rewards and incentives as as well as social recruiting. The interesting part is that it does all this using innovative gamification technology.
Job Posting: Indeed and Jobs2Careers are popular job board among job seekers with billions of monthly searches done.
Candidate Management: Workable is an Applicant Tracking System (ATS) that automates and streamlines company’s recruiting process. It has tools to write job ads and post them to a variety of free and paid job boards. When resumes start pouring in, it helps the company to store them, search them, move candidates across the hiring pipeline and write comments and evaluations.
Task Management: Trello’s interface makes it easy to track processes, tasks and even candidates. The ability to move around entries from one stage to another and assign them to specific people can promote easy collaboration.
Selection: SparkHire, HireVue specialize in video interviewing. Gapjumpers offers a method to hire “using blind auditions” avoiding harmful biases when screening and evaluating candidates. SurveyMonkey are helpful to create pre-interview questionnaires to screen out candidates who aren’t a good fit before it spend time and effort in interviewing them.
Onboarding
Kin: Through its technology, the company can manage paperwork and create individual onboarding processes and checklists for each new employee.
Namely: Along with functions for payroll and benefits, it helps the company create an effective orientation process where paperwork and signatures are digital.
BambooHR: Their onboarding function is full of interesting features such as “get to know you” emails for introducing employees and preparing new hires for their first day.

Usage of Payroll Management Software

Payroll software is a tool that aims to restructure and automate the method of paying the employees of a company, making the task of processing payroll less time-consuming and convenient.

Advantages of Payroll Management Software to Business growth

Effective Costing: When employees themselves work on the salary management software without seeking help of professionals a lot of money is saved in this process. Thus, no expertise is needed to use the software; making it very user-friendly.
Notifications and Updates: The salary software keeps reminding the HR people of important notifications like tax payments and salary due dates.
Employee Calendars: These calendars are an easy approach to manage different aspects of employee status like check on sick leaves, absence and overtime. Time management software with payroll helps employees to make plans and decisions on a particular day.
Pay slips: This salary slip software helps the company to generate pay slips so that employees and company can keep the payment records.
Time Saver: Automation of the data management in this payroll management software helps speeding up the process of company’s work and saves a lot of time.
Negligible Errors/Mistakes: Errors/mistakes are minimized due to computing and automation benefits.
Customer Services: With saving of time and money the employees can focus on the customers better thereby improving company’ business standards.

Human Resource Information (Management) System (HRIS/HRMS)

Human Resource Information System (HRIS) is a software through which organisations can take care of all HR processes and unify employee data in a single system.
It can be utilized within the department to help human resources employees and managers improve their productivity and the results of their efforts. In many of the organisations including banking industry, this software is also called Human Resource Management System (HRMS).

Key functions of HRIS/HRMS

Benefits and welfare administration: This function deals with the benefit policies of employee in an organisation like, perks, special allowances, insurance, profit sharing and retirement benefits.
Payroll Handling: The HRIS system helps in maintaining the attendance and generating the payroll according to it and also in the preparation of pay slips.
Employee Record Handling: There is a need to manage all the documents related to the individual like offer letter, appointment letter, appraisal letter, relieving letter from the past company and many other documents and need to be managed correctly with exact working dates. HRIS helps it by providing a feature like document generation and document management so HR managers can control this activity with higher number of people as well.
Recruitment: HRIS system helps in organizing the recruitment activities properly like resume management, interview panel making, selection criteria, number of interview rounds and many other activities which needs to be performed as the recruitment process.
Training & Development: The HR department is responsible for organizing training session for its employee. HRIS helps in maintaining all these records, keeping appointment filtering of employee list based on their knowledge, weakness and other criteria, through which a session can be organized and proper identification can be done for employee while managing the trainings.
Performance Management: Collecting reports and other relevant information like extra-curricular activities & participations, learning reports, are joined together for analysis and comes out with the appraisals, incentives and promotions. HRIS supports these activities in analyzing the reports and works as a decision support system for the HR.
Attendance Management: HRIS is majorly used here in an automated fashion mostly where HR keeps the record of all the employees’ attendance, leaves – paid or non-paid, holidays granted or not granted one and of course timely reporting. Although there are smart machine and system now-a-days which manages attendance with a card swipe or a finger print reader, so in modern world it’s not a core HR function.

Benefits of HRIS / HRMS

There are many benefits that can be enjoyed after implementing a HRIS into an organisation, such as:

Expedition of recurring tasks through automation.
Improved ability to reach large candidate pools regarding new position openings.
Ability to quickly apply higher selection standards to a number of applications.
Speedy on boarding made possible by mobile accessibility.
Reduction of paper and related materials and storage
Ease in distributing up-to-date materials concerning company policies and procedures.
Potential for greater employee engagement through self-service options.
Streamlining of open enrollment for benefits.
Empowerment of employees to change benefits information directly as changes occur.
Improved collaboration throughout organisation, even when there are multiple company locations.
Improvements in training capabilities through integration with LMS and development tracking features.
Scheduling optimization with emphasis on compliance and immediate distribution to employees.
Reduction of errors in payroll and employee information database.
Improved time and attendance tracking abilities and accuracy.
Decrease in compliance woes aided by alerts and automatic reporting options.
Ability to make more informed decisions in real time by using analytics and integration of organisational data.
It reduces errors and maintain required Compliance.

Efficient Business Communication Tools

Intranet / social intranet
Chat Rooms, Private and Group Messaging
Discussion Forums
Internal Blogs, Video and Audio
Podcasts
Gamification

‘Social Media Policy’ For Organisations

Some of the common points/terms which encompass the ‘Social Media Policy’ of companies:

Employees are allowed to associate themselves with the company when posting but they must clearly brand their online posts as personal and purely their own. The company should not be held liable for any repercussions the employees’ content may generate.
Content pertaining to sensitive/confidential information of the company should not be shared to the outside online community. Divulging information like the company’s design plans, internal operations and legal matters are prohibited.
Proper copyright and reference laws should be observed by employees when posting online.
Not to use the company logo or company branding on any social media platform without prior approval from the concerned authority of the company.
Not to communicate anything that might damage the company’s reputation, brand image, commercial interests or the confidence of its customers.
Not to represent or communicate on behalf of company in the public domain without prior approval from the concerned authority of the company.
Not to post any material that would directly or indirectly defame, harass, discriminate against or the company, staff member, supplier or customer

Compensation

Compensation is the remuneration received by an employee in return for his/her contribution to the organisation. It is an organised practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.
Compensation is an integral part of human resource management which helps in motivating the employees and improving organisational effectiveness.

There are three key issues to take into account when considering salaries:

Salaries should be consistent with the organisation’s grading structure – the higher the grade the higher the salary. This ensures that the principle of equal pay for equal work is followed.
Salaries should be fair. Consider what other similar organisations are paying people for carrying out similar jobs.
The grading and salary system should be transparent and easy to understand. This means that staff can clearly see where their salary fits within the organisation’s overall grading and salary structure.

Types of Compensation

Compensation provided to employees can be direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, incentives, variable pay, etc.
Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organisational productivity.

Strategic Compensation

It is linked to performance and contribution of the concerned employee towards attaining key goals of organisation. Strategic compensation is determining and providing the compensation packages to the employees that are aligned with the business goals and objectives.

Cost to Company

Cost to company (CTC) is a term for the total salary package of an employee. It indicates the total amount of expenses an employer (organisation) spends on an employee during one year.

Components of salary

Basic salary: Basic salary is the core salary and it is the fixed part of the compensation package. Generally, the basic salary depends upon the employee’s designation or grade.
Allowance: Different types of allowance is given to employees such as house rent allowance (HRA), leave travel allowance (LTA), dearness allowance, convenience allowance, city compensation allowance and children’s education allowance.
Perquisites: It is basically different facilities such as rent free accommodations, car facility, interest subsidy on loan, reimbursement on medical bills and club facility.
Contribution to provident fund: Twelve per cent of the basic salary gets contributed from the employee for PF and another 12 per cent by the employer. So, 24 per cent of the basic salary gets deducted.
Reimbursement: Sometimes employees are entitled to many reimbursements such as medical treatment, newspaper, phone bill, etc.
Life and health insurance: organisation pays the premium of employees’ life and health insurance. But in reality, it is included in the CTC.
Transport facility: transport facility or pick-and-drop facility is also a component of the package.
Subsidized meals: Free lunch, subsidized meals from office canteen, food coupons even the tea or coffee come with a price tag to the employee.
Rent of the office space: the rent of office space (the space in the employee’s cabin) is borne by the employee in his CTC.

Formula

CTC = Direct benefits + Indirect benefits + Saving contributions.
Take Home Salary = Direct benefits – Employee PF – Other deductions – Income tax.

Compensation Structure in Public Sector Banks (PSBs)

In Public Sector Banks, the compensation and wages are covered by the bilateral agreements/settlements being entered into, at Industry level, i.e., at Indian Banks Association (IBA) after obtaining necessary mandates to this effect from individual banks.
The operation of these settlements are for 5 years and these settlements encompass entire gamut of compensation aspects.

Incentive- Based Compensation

Incentives are monetary benefits paid to employees in recognition of their outstanding performance. They are defined as variable rewards granted according to variations in the achievement of specific results.

Advantages of Incentive Based Compensations

Incentives are important for inducement and motivation of workers for higher efficiency and greater output.
Employee earnings go up, resulting in enhanced standard of living of employees.
Productivity increases and production capacity is also likely to increase, even with reduced supervision.
Companies can reduce the burden of fixed costs by keeping a portion of the remuneration as variable.

Disadvantages of Incentive Based Compensation

Tendency to bypass quality in pursuit of increased output for higher incentives.
Sometimes employees may disregard security regulations due to payment by results approach adopted for higher incentive figures.
Overworking may affect employee health.
Can demotivate employees not in a position to earn higher incentive due to sectional differences.

Attrition / Turnover Management

Attrition, refers to the phenomenon of the employees leaving the company. It is usually measured with a metric called attrition rate, which simply measures the number of employees moving out of the company (voluntary resigning or laid off by the organisation).
One of the most concerning issues for HR managers in India is the high staff turnover. Staff turnover or Employee turnover refers to the number or percentage of workers who leave an organisation and are replaced by new employees. Measuring employee turnover can be helpful to employers that want to examine reasons for turnover or estimate the cost-to-hire for budget purposes.

Compensation and Employee Attrition

Research and experience suggest that many managers are concerned that their best and brightest employees may pack their bags in search of greener pastures if they receive smaller bonus checks than what they think they’ve earned.

Following are six practical steps managers can take to improve employee engagement:

Help employees view their pay as more than base salary increases and bonuses and understand that total rewards also include recognition, meaningful work and career opportunities.
Understand what truly engages and motivates employees. It is often much more than money as different people value different rewards.
Clearly communicate the link between performance and rewards. Clearly explain the reasons for the reward and the amount of the reward.
Ensure that performance assessments and total rewards appropriately differentiate the best, solid and weakest performers.
Assess and improve the organisation’s work climate by training managers to motivate employees.
Use feedback as a gift – make it meaningful and give it often.

Arresting Attrition:

Many companies are developing innovative practices in countering this job hopping phenomenon. In order to address the issue of arresting attrition, companies have to start thinking from a rudimentary level, which has to be initiated right from acquiring talent. Once they understand the fitment between deliverables from a talent and his/her expertise and competencies, only then the initial war can be won.
It is very important to understand the aspirations of a particular talent. Job engagement and transparent evaluation also play a pivotal role. Job engagement will help keep the interests of the employee intact while transparent evaluation will help understand his/her current state and future path.
Once talent is engaged to a certain extent, he/she will not only be motivated to work and sharpen his/her skills, but also get utilized for other tangential responsibilities. Organisational behaviour and culture also play a critical role. They are among the decisive factors for sustenance of talent in an organisation. They give confidence to any employee to prosper and flourish.

Top 10 Ways to Mitigate Attrition in IT/ITES Industry

Build people skills of middle management:

While doing attrition analysis 3 key stated reasons emerges

Career Opportunity
Compensation
Personal Reason.

However, un-stated reasons starts appearing and most of time the reason has to do with lack of opportunity for capability building, emotional turmoil, lack of job satisfaction, respect at work, dis-satisfaction with Manager, etc. It is an acceptable fact in the Industry that 80% of employee leave their Managers instead of their organisation. It is a high time that we start paying attention to developing people management skills of our Managers.

Focus on Capability building and creating an eco-system: where people development is at the fore-front of leadership mindset. While it is difficult to stop attrition completely, however, by focusing on building people capability, you can make the “PULL” factor by competitors difficult.
Communication on Compensation & Benefits – Majority of organisations fail to position their compensation philosophy/benchmarking/structure and thus fails to leverage the advantage visa-vis their competitors.
Engage employees over & beyond their day to day job and ensure that their insecurities and vulnerabilities are addressed appropriately and timely through various programs and practices which could be designed keeping in view organisation context and requirements.
Provide Growth Opportunities and communicate about them Majority of companies do provide growth opportunities, however, fail to leverage due to lack of communication on this front.

Managing expectation of employees is a key

Provide opportunities for skill up-gradation through training intervention or internal job assignment/movement.
Career Pathing plays a key role. It would serve the purpose if all employees who have spent > 18–24 months in the system are pro-actively spoken and asked for their career preferences to bring about a spark and end monotony of work.
Creating Training Academies with in and also do tie up with institutions. Create sabbatical policy so that those employees who wants to pursue higher education can do so without leaving their job.
Effectiveness of Reward & Recognition – work hard and party harder is the mantra in IT/ITES industry. Celebrating success is a key. Strong reward & recognition framework keeping in view the context and levels also plays a critical role in employee retention.

Employee Risk Assessment Systems In Banks

Risk Assessment is a systematic method of looking at work activities, considering what could go wrong, and deciding on suitable control measures to prevent loss, damage or injury in the workplace. The assessment should include the controls required to eliminate, reduce or minimize the risks.
Employee risk assessment is a careful examination of what, in the organisation, could cause harm to people, so that one can assess whether they have taken enough precautions or should do more to prevent harm. A risk assessment is an important step in protecting employees as well as business, as also complying with the law. It helps to focus on the risks that really matter at the workplace – the ones with the potential to cause harm.
Banks being the custodians of public money, the employee risk which is a part of operation risk frame work, is paramount and as such, there has been a robust structure in periodical assessment of employee risk through tested models as directed by Reserve Bank of India.

Maintaining Effective Relationship between Employees & Employer

The relationship between employer and employee is primarily determined by the actions and attitudes of the employer. For instance, the employer generally sets the tone for whether the climate in the work environment will be casual, professional, regimented, creative, etc. The atmosphere that the employer desires to create will, therefore, determine whether the employer/employee relationships are healthy and productive.
The relationship largely defines the organization and has far-reaching effects on company culture, employee satisfaction, and turnover rates.
According to Nesco Resource, “When employees have a strong, healthy relationship with their employers, the entire company benefits. Studies show that employees who have mutually respectful relationships with their employers are more likely to be happy, loyal, and productive in the long-run

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CAIIB HRM Module B Unit 4 HR Functions (Ambitious_Baba)