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Abstract of
Finance and HR Practices of Sampath Bank
In this report, the integration of finance and HR resources
in the context of Sampath Bank PLC is analysed and elaborated. It has been
determined that there are a number of areas and aspects in which changes can be
made for facilitating the integration of these resources. The organisation
relies on third-party advertisement agencies for recruitment and it serves to
utilise a lot of money. The firm can recruit in-house advertising managers and
it would serve to decrease the budget or amount of money which is allocated to
advertising agencies. In addition, the bank can consider selection tests for
ensuring that right employees are chosen for decreasing the cost and time
invested in the process of recruitment. Resource allocation can be automated
and the company can consider the use of intrinsic rewards for improving
employee satisfaction. In the implementation of these changes through Lewin’s
model, it has been determined that a communication challenge might be
encountered which can be overcome by ensuring that communication is established
at every stage of implementation. It has also been determined in this report
that different financial tools such as budgeting and forecasting can facilitate
the change.
Company
Introduction of Finance and HR Practices of Sampath
Bank
Sampath Bank PLC is a commercial and
licensed bank incorporated in 1986 in Sri Lanka. It has approximately 373 ATMs
and 229 branches spread across the island. In addition to it, Bank of the Year has been received by it
from The Banker. In Sri Lanka, it has become the 3rd largest private
bank with its deposits of Rs. 453 billion. The vision of the bank is to become
the growing force in the financial sector of Sri Lanka. Meanwhile, the mission
of the organisation is to develop a learning culture that promotes both
organisational and individual development while promoting value and innovation
for customers
The
bank has the goal of treating all external and internal customers in the way they
want to be treated. Sampath Bank has net assets of 962.4 billion rupees which
is five percent higher than 2018, 61,449 million rupees of market
capitalisation, owns 857.3 billion rupees of liabilities, has an operating
income of 55.2 billion rupees, and value distribution of 11.6 billion rupees to
the government. For the year of 2019, the bank also experienced profits of
11.15 billion rupees. When it comes to the workforce of the bank, 1131
employees were trained and gained skills under the Saviya Programme of the Bank
in 2019
Introduction of
Finance and HR Practices of Sampath Bank
In
general, HR and finance functions are considered critical in every
organisation. Human resources are composed of people who create the workforce
of a firm while finance represents the processes of acquiring and managing
funds. Actually, human resource management is integration for the proper
management and utilisation of available workforce for meeting the goals of the
firm. Meanwhile, finance management outlines the processes and activities which
are related to investment, budgeting, liabilities, money, credit, and leverage
in the firm. Thus, the significance of both HR and finance functions is
undeniable in an organisation. In this study, these aspects will be analysed in
terms of Sampath Bank
Resource Integration of
Finance and HR Practices of Sampath Bank
Hatten (2012) determines that
finance and human resources are normally considered two opposite ends of an
organisation. After all, their basic fundamentals are quite different from each
other. For instance, human resources comprehends the language of people and its
effect whereas finance seems to comprehend the language of ROI and numbers. In
addition to it, their core values are dissimilar as well. In spite of these
differences, the integration of human resources and finance is more than just a
little important for the success of an organisation in the market. The
underlying reason is that both business functions seem to have overlapping or
common aims and they are dependent on each other or the implementation of major
strategies within an organisation. Generally, business results are driven by
employees and value is created for the company. As a function, human resources
has the role of supporting the wellbeing of employees, which in turn helps in
creating and achieving a competitive advantage because a healthy and happy
workforce is developed. When there is a satisfied workforce, it decreases
turnover, which positively influences finances as it means that more money will
be generated for growing the business
Under the managing director, there
are CFO, CIO, CLO, Company Secretary, Deputy General Human Resources Manager,
Group Chief Compliance Officer, Group Chief Risk Officer, General Manager of
Consumer Banking, and Senior Deputy General Manager of Corporate Banking. Under
the CFO, there is Assistant General Manager of Corporate Finance and under the
CIO, there is Assistant General Manager of IT Development. Under the Deputy
General Manager of Human Resources, there is Assistant General Manager of Human
Resources. Since both HR and finance department have assistant general
managers, it is easier for them to collaborate with each other and integrate
their resources in an effective manner.
Current Integration of
Finance and HR Practices of Sampath Bank
Figure: Balanced Scorecard
Balanced Scorecard model was
developed by Kaplan and Norton for helping organisations in measuring the
performance of an organisation with the use of both non-financial and financial
information. In accordance with the balance scorecard, it has been determined
that Sampath Bank effectively establishes balance among innovation, internal
processes, customer aspects, and financial areas. A large portion of investment
is made by the bank in implementing training programmes which are aimed at
enhancing the skills and developing employees. For instance, annual cost of the
programmes is 1.5 million rupees and annual participants are 4,500-5,000
employees. The recent statistics suggest
that the desired number of employees are trained with the use of training
programmes. In fact, efforts are invested by the HR department in ensuring that
knowledge and critical skills are developed among employees. For every
employee, there is a specific time which is allocated for the development of necessary
skills which is 5-8 hours. Sampath Bank ensures that talented employees are
retained effectively within the organisation because it realises the benefits
of employee retention
Chart: Recruitment Cost
Meanwhile, when it comes to recruitment,
it can be seen in the above chart that most of the recruitment cost goes to
advertising agency which is responsible for delivering the message of Sampath
Bank to potential employees and job seekers. The second largest portion of
investment is consumed in venue fee. At the firm, the recruitment policy is to
ensure that equal opportunity is provided to each and every applicant and there
is no gender discrimination within the organisation
At
present, this is how resource integration is taking place. For instance,
finances are being integrated in conducting and performing HR practices. As it
has been explained above, a significant amount of investment is made by Sampath
Bank in developing the skills of employees. This integration is practiced for
achieving higher efficiency and increased effectiveness. If HR resources are
not integrated into finances and vice versa, it will not be possible for
numerous processes of the bank to produce the desired results. For instance, by
the integration of resources, profit per employee, revenue per employee, and
number of employees effectively contributing to the bank are identified
Improvements of
Finance and HR Practices of Sampath Bank
Although HR and financial resources
are being integrated effectively at Sampath Bank, there are a number of
processes which can be changed for ensuring better resource integration.
Following are the changes which can be made:
Recruitment Process of
Finance and HR Practices of Sampath Bank
A major portion of the allocated financial resources for
recruitment goes to the advertising firm. This puts Sampath Bank at a
disadvantage because in recent times, organisations have in-house advertising
managers. It means that these organisations are able to decrease the costs of
recruitment. The same can be done by Sampath Bank for decreasing the amount
that it invests in the process of recruitment. For instance, it can recruit
social media experts who can help in attracting talented candidates to the
organisation
Resource Selection of
Finance and HR Practices of Sampath Bank
At the moment, Sampath Bank lacks an
important step in the process of recruitment which leaves a significant gap in
selecting only the right candidate for the job. Assessment tests are not
included in the recruitment process and due to it, there is a great risk that
those candidates might be selected and recruited by the bank that are not
suitable for the post. Therefore, it presents a risk that financial investment
will be lost for every candidate who is interviewed but is not suitable for the
job. In order to decrease the waste of financial resources, a change can be
made in recruitment process in the form of addition of assessment tests.
Although these tests might require more time, they can play an important role
in the better integration of resources. For instance, they can decrease the
likelihood of selecting ineligible candidates for the post
Resource Allocation and Acquisition
At Sampath Bank, resources are acquired and allocated
manually. One of the major changes that could be made to the existing processes
for better allocation and acquisition could be the integration of an automated
system which enables the allocation of resources in a better and more efficient
manner. For both tangible and intangible resources, manual processes always
pose a risk of error in judgment. This error and likelihood of issues can be
reduced significantly by automating the processes. It can serve to not only
decrease operational costs but can also facilitate the process of resource
integration. In recent times, automated systems are being utilised for
transforming traditional processes and it presents a significant opportunity to
Sampath Bank where allocation of resources relies on manual processes instead
of automated processes
Changes to Performance Evaluations
At present, there is only a single
evaluation method which is utilised by HR manager for evaluating the
performance of employees and that is by setting performance standards which are
to be met by employees. These performance standards are different for every
employee. Although it is a simple and effective method, it is very time
consuming and it lacks thorough evaluation. Instead of it, 360-degree feedback
method should be utilised by the HR department for evaluating the performance
of employees as it helps in analysing every aspect of the employee
Motivation of Finance and
HR Practices of Sampath Bank
In general, motivation for employees
is directly related to their satisfaction and retention. At Sampath Bank,
significant attention is given to the retention of employees by providing them
with extrinsic rewards as it serves to increase motivation. This can be
improved by rewarding employees intrinsically as well
Implementation of Changes of
Finance and HR Practices of Sampath Bank
Actually, there are a number of
change management models such as Deming Cycle, Kotter’s 8 Step Plan, and
Lewin’s 3 Stages Model. In this case, Lewin’s model for change management has
been selected.
Lewin’s 3 Stage Model of
Finance and HR Practices of Sampath Bank
Following are the stages according
to which changes can be made effectively in Sampath Bank:
Unfreeze of Finance and
HR Practices of Sampath Bank
In general, the first change of the
change includes preparing the firm to accept that some changes are important.
Therefore, in the first stage, all the necessary changes should be proposed and
presented to the senior executives of Sampath Bank. It is important to explain
the benefits of implementing these changes within the organisation and what
type of losses might be experienced by the bank if these changes are not made.
For instance, one of the major drawbacks of not implementing the outlined
changes is the loss of investments in both recruitment and allocation of
resources. Thus, this information will be conveyed in the first stage of the
model. In addition to it just explaining the benefits, it will be determined in
this stage that the current practices employed within the bank should be
re-assessed for the identification of gaps
Change of Finance and
HR Practices of Sampath Bank
Once uncertainty about the existing
processes is created, the second stage of change should be considered in which
executives will start resolving their uncertainty and they will consider new
ways of performing and conducting the same processes but with the desire of
better results. The time duration between the stages of unfreeze and change
will be one week. It is in this stage that the benefits of implementing the
necessary changes will be further emphasised. For instance, it should be
explained and communicated to employees why these changes are being implemented
in the first place and how they will help in saving money and making better
investments.
Refreeze of Finance and
HR Practices of Sampath Bank
Once the changes have been
implemented in the previous stage, they will be evaluated and monitored in this
stage. In addition to monitoring, it will be ensured that desired results are
being produced. Although all necessary steps will be taken for ensuring that
only the needed results and outcomes are being produced, there will also be a
backup plan which can be considered in case the desired results are not being
produced. For instance, if an automated system is implemented and it does not
result in increased efficiency, a training programme can be considered for
producing the desired outcomes. This is how the change can be implemented in an
effective manner within the Sampath Bank
Financial Planning of
Finance and HR Practices of Sampath Bank
It is important to recognise that
the changes which have been considered in this paper are important for the
better integration of financial and HR resources. Still, for the implementation
of these changes, a specific budget must be allocated for the changes and in
order to do that, the assistance of finance department is necessary. First of
all, all the changes and necessary steps for implementing them require some
investments. These investments cannot be made without performing the process of
budgeting which helps in creating a specific budget for every planned or
determined procedure. Obviously, for the preparation of a budget, it is
important to forecast how much investments and money must be separated. Forecasting
is one of the most important parts of creating a budget for a project that is
yet to be implemented because the actual costs are not determined accurately.
Forecasting enables an organisation to ensure that a certain budget is created
in which the whole project will be completed without any issue. The same
applies to this case.
In addition to budgeting and
forecasting, an important role will also be played by the breakeven analysis
which will help in the management of the changes. For instance, it will
determine at which stage or point when profits will be experienced by the
Sampath Bank and where the bank is located at the moment. As it has been
explained above, financial integration plays an important role in almost every
project because investments have to be made and these tools help a lot in
managing the change. For the implementation of the outlined changes,
forecasting, budgeting, and breakeven analysis will allow the bank to not
experience issues in terms of finances
Constrains and Challenges of
Finance and HR Practices of Sampath Bank
When it comes to the management and
implementation of a change, regardless of the organisation, there are some
challenges and issues which have to be overcome in order for the change to be
effective. One of the major challenges is resistance from the side of
employees. Obviously, when a change is to be implemented within Sampath Bank
that requires employees to change their existing processes and work on new
ones, it will cause them to experience a significant shift in how they have
been working up till now. Thus, there is a significant likelihood that they
will resist the change. This challenge can be overcome with the establishment
of effective communication between the management and the employees. Resistance
to change can be overcome in an effective manner by making sure that the
objectives, reasons, and benefits of changes are shared and communicated with
the employees. In this manner, employee resistance can be mitigated and
prevented in Sampath Bank. Other than this, there are not many major problems
which might be experienced in the implementation of change.
Still, scenario-based planning can
be performed for ensuring that all the possible risks and challenges are
identified so that they can be tackled in a timely and effective manner.
Conclusion of
Finance and HR Practices of Sampath Bank
Overall, in this paper, it has been determined that Sampath Bank is becoming one of the leading forces in the Sri Lankan private sector. Within the bank, HR and financial resources are integrated effectively for the achievement of desired results and enhanced productivity. Still, there are some changes to the process of recruitment, management and allocation of resources, and rewarding of employees which can be implemented for improving the integration of resources and achieving increased efficiency. In order to implement these changes, Lewin’s 3 Stage Model has been considered and through it, the changes can be implemented in an effective manner.
References of
Finance and HR Practices of Sampath Bank
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Appendix
Deming Cycle
The Deming Cycle is actually a
consistent and continuous model of quality improvement as it consists of a
logical sequence of four steps for consistent learning and improvement. These
four steps include Plan, Do, Check, and Act.
Kotter’s 8-Step Change Model
In accordance with this model, it is
possible to implement a change effectively in eight steps. The first step is to
create urgency among the executive team that approves the change. Moving on,
the second step is concerned with forming a powerful coalition while the third
step is to develop a vision for change. Meanwhile, the fourth step is all about
communicating the vision and the fifth step is to remove the hurdles and
obstacles. The sixth step is to develop short-term goals and wins. The
second-last step is all about building on the change while the last step is all
about anchoring the changes in corporate culture.
Lewin’s 3-Stage Model
Kurt Lewin create a model for the
implementation of change which includes unfreezing, changing, and refreezing.
The change processes seems to entail creating a perception that a change is
required then shifting towards the desired and new level of behaviour before
solidifying the change.
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