Wednesday, May 11, 2016

Developing Human Resources, the State Bank Way


Let me begin with a small correction. A more appropriate title for this article should have been HRD at SBI-The way it was. How far things have changed since I left the group in 1995, I do not know. But, to a large measure, the credit for what I have been able to achieve professionally as a banker or otherwise, goes to what the bank inculcated in us. So bear with me, and indulge me a little, while I go down the memory lane to highlight a few of them.

The annual budget exercise
Budget settlement was a lengthy exercise – comparable to the Union Budget, perhaps! A document called the Policy Guidelines used to arrive at the branches around September-October. It outlined the macro issue, including the 5-Year Plan, the most recent Union Budget and its implications. The document outlined issues that could have a direct bearing on the banking and the financial sectors.

Taking off from there, the Policy Guidelines document gave a break up of the goals – in terms of the business segments – that the bank had set for itself for the next financial year. Our job at the branches was to prepare a draft budget proposal keeping the overall policy guidelines in view. The operating environment of the respective branches was factored in. Business targets were quantified. Support required from the bank, say, in terms of capital expenditure, staff and training requirements was also included. An important segment of the budget proposals was the assumptions that we made for our next year’s projections. 

These too had to be clearly outlined and defended, if need be.
The exercise was not limited to the branch head alone. All members of staff were expected to contribute. They had to buy in to the budget projections. Therefore, long meetings were held before a branch’s draft budget was finally signed and sent off. At the planning department it was consolidated and evaluated against a host of benchmarks.

Thereafter, the controlling authority (CA) for the branch/region/zone visited the offices under his control to finalise the budget – with every branch, separately, individually, at the branch itself. Never was the branch head summoned to the regional or the zonal office to finalise and settle the budget with his boss. The CA invariably carried with him his own sets of numbers – result of his interaction with his controlling authority, who in turn well, you get the picture! It was a detailed exercise, with good reasons. Note that all the individual budget projections from all the units had to finally add up to, if not exceed, the overall targets set for the bank by the bank’s board, as outlined in the Annual Policy Document.

It was action station, next. The tug of war between the CA and the branch head, often aided by his lieutenants, could last for hours. It could be rough and very acrimonious too. I recall an incident at our bank’s main branch (it was very big) at Mysore in 1975. It was headed by an assistant general manager. His CA was the general manager, no small fry by any standard even in those days. We, the minions, were outside, chatting and waiting, while heated discussions went on inside the AGM’s cabin. It was getting close to midnight. We could hear the voices getting louder. All of a sudden the debate reached a crescendo, ending abruptly with a very loud thud. We later learned that in sheer anger and frustration our AGM had thrown a huge file straight at his own GM!

Why so? It’s because the CA could not leave without obtaining the branch head’s signature on the budget proposal, which had to be mutually agreed. The numbers (i.e. the targets) could not be imposed. Till agreement was reached, till one of the parties convinced the other, discussions had to go on. This was the only opportunity that the branch had to get all that it could negotiate from its CA. Once signed off, the targets would get frozen (for all practical purposes) for the next 12 months. If the branch failed to meet the targets set, it would be accountable and must justify the variations to his CA. An analysis would be made even if the branch did the opposite, i.e. exceeded the target by miles. (Mid term reviews were undertaken to revise the targets, but only under exceptional circumstances.)

Staff training
The overall requirement of the branch for the training of staff, like other issues, was also discussed and agreed upon between the controlling authority and the branch head during the budget exercise. The training centres, on their turn, worked out their respective annual plans. Later, they called upon the braches to depute staff according to their programme schedules. The plans, however, were not carved in stone. Staff could be deputed to the bank’s training centres even at short notice, if need be.

If someone was nominated, he or she’d better go. There was no other option. The branch had to release the staff for training. No excuse, genuine or otherwise – including severe staff shortage – was acceptable. Same applied to the staff concerned. The message from the top was very clear:
(a)   A well trained staff was an asset to the organisation.
(b)   Every staff had the right to training. Nothing should stand in its way.
(c)   The programmes were planned for the staff’s development and the bank’s greater benefit. To take full advantage of these programmes, it was the duty of the branch to ensure that the staff attended the programme without fail.
(d)   The bank could not afford to waste (training) resources.
The bottom line: the staff must be allowed to go; as for the staff member, he or she must go!

Job rotation
Every office was required to rotate the jobs of all members of staff every six months. If anyone was to continue at the same desk for another six months, the reasons for doing so had to be recorded, and permission sought from the controlling authority. Only one extension was allowed; that too, only under unavoidable circumstances. At the end of the next block of six months, he had to be shifted, whatever the exigencies. (The branch knew well in advance what to expect, didn’t it?)
The reasons for this policy being strictly enforced were as follows:
(a)   No department could be an exclusive domain of a privileged/select few. Every member of staff had the right to be exposed to and learn all types of work.
(b)   Their career advancement could suffer otherwise.
(c)   Nobody had the right to become a specialist at the cost of the others.
(d)   If the staff were not rotated, bench strength would never develop. In the absence of a particular staff, smooth operation of a branch office could be compromised. This was not desirable at all.
(e)   The branch would not otherwise be ready to handle sudden rush, or other exigencies like leave or transfer.
(f)     Planning of annual leave would not be possible.
(g)   Rotation of duties prevents fraud and development of vested interest.

The importance of the above approach can hardly be overstated.

Posting and transfer
So what if you had been posted earlier at the bank’s office in Germany, Tokyo or the US! It did not matter if you were in charge of glamour portfolios like M & A, investment banking or were closing exotic international deals while abroad. On your return to India, you could be posted to offices in rural or semi-urban areas, or asked to handle something diametrically opposite – like agricultural or SMSE financing. One had no choice in that matter. (Many called the personnel department ‘sadist’.) It had to be the bank’s way or the highway.
The message was clear: Just because the bank had selected you for a foreign posting, the bank was not obliged to continue to offer you lucrative or glamour postings. A State Banker was supposed to be an all rounder, not a banker with blinkers on – pointing only in one direction.
Similarly, staff with exposure to rural or semi-urban operations could be posted direct to, for example, an international division in a metro city. “You too can”, was the clear message to one and all. The bank was an “equal opportunity employer” in the truest sense of the term. The results showed!

Taking responsibility
Every recommendation for loans and advances to clients had to compulsorily originate from the respective operating/field office (viz., a branch, big or small) where the client maintainted his account. Every such proposal had to be finally signed off by the branch head before it could be forwarded to the higher authorities for consideration. If the branch head was not convinced or satisfied about its viability or did not recommend it for sanction, no power on earth – inside the bank or outside it – had the authority to bypass him/her or proceed with granting that advance directly to any potential borrower.
This approach had its own reasons. First, it made the one recommending the advance responsible for its viability and continued well-being. Second, it sent a clear message to the borrower that – even if the bank’s chairman or a board member were his bosom friend – no approval would be forthcoming without the branch’s approval. Day to day management of the borrower’s account could best be monitored by the branch, at the ground level. It was clearly understood that the branch concerned, being closest to the action, would be the one to always have its finger on the pulse, would know the borrower and its operations far better than offices at the zonal or head office level ever could.

Grooming to be an officer
Probationary officers (PO) had to go through the grind – spread over a two year period – allowing exposure to a wide range of line and staff functions. My first branch training started with sorting out inward mail, entering them in the peon delivery book, and handing the mail over to the concerned department heads against their acknowledgement. At that ‘currency chest branch’ (branch handling government accounts, and holding cash on behalf of the Reserve Bank of India), I often joined the cashiers to help in counting several crores in cash by hand. (There was no note counting machine those days.) All trainees were also required to sit at the counters and do everything that the counter-staff did during their working hours.
The grooming process included being an understudy, officiating on leave vacancies, managing small to medium sized departments, similar branches in rural, semi-urban and urban areas as we kept developing our operational and managerial skill levels and moved up the ladder, growing in confidence all the while.
The manual system of accounts and book-keeping helped us to learn the system and procedures inside out. We learned the theory and practice of banking far better than they probably do nowadays from the computer interface. When the computers do not work, all that we are told is that ‘the link is down’, hence nothing can be done. “How about continuing the work manually for the time being, son? Do you at all know how to?” I often feel like asking, knowing it’s fruitless to do so.

Treating former employees
One of the bank’s greatest virtues was the culture of sincere, deep respect towards its former employees. I have seen many organisations treat their former employees, or employees about to leave, like ex-convicts. Where he was the man in charge yesterday, is a ‘persona non grata’ today. When an employee serves notice to leave, his entire support system is severed. Access to various areas of office, as also to his own office’s computers and data base, are curtailed. He becomes a virtual pariah, ‘an enemy of the state’ so to speak. The organisation is keen to get rid of him as fast as possible (lest he…!)
On his or her last day in office, the employee is allowed to pack his or her own stuff, but only under strict supervision. If he later visits his old office, he is permitted access only up to the reception area or the meeting room, no further. Fraternising with former employees is not encouraged.

Compare this with how State Bank treats its former employees. For myself, even after I had left I was never treated as an outsider, rather a brand ambassador for the bank. The handing over and taking over of charge was quite a ceremony, worth emulating elsewhere. (At one branch where I was the branch manager, I was given farewell twice. Once, when I left. The second time, when the staff who were on vacation during the summer holidays reported back for duty only to learn that I had resigned and had left.) 

Whenever I drop in at any of my former branches, no one treats me with suspicion or with fear of being seen together. Instead, I am shown all the respect a former officer and a loyal employee of the bank deserves. I am allowed free access everywhere, without question. Former colleagues offer me tea at every desk. I have to stop everywhere, greet them individually, shake hands with all of them in turn. That is expected. They were still your friends. Every former employee was made to feel welcome at all times. It made us feel proud of the organisation which we had once served. It still does.

Career advancement
A few words about career opportunities should be in order. Graduates from the top tier management schools do not consider commercial banking as the career of choice. I can only say that commercial banking was the best career choice I had ever made. (When I joined, people used to prefer being a PO with State Bank over IAS - till Pillai Committee spoiled it all.) There is always plenty of room at the top for professionals of every shade, qualification, inclination or experience, from an engineer to an agricultural graduate, a marketing guy to a faculty, an IT expert to an investment banker. State Bank offered a very satisfying career opportunity to one and all. I am sure it still does.

Trust me, I am a banker

My only regret is that, since I left the bank, no opportunity has come my way to give back to the institution that gave me so much. 

For, the lessons that I learnt at the bank continue to be priceless. I truly realised their value only after I had left the bank and went out into the big wide world. I always felt confident that I was well-equipped to take up any responsibility at any bank in any part of the world. The exposure that the State Bank Group gave me stood me in very good stead all through my professional career, and still does – right up to this day. 

More importantly, the value systems that were ingrained in me are still with me, guiding my actions all the while. I am proud to have been a (State) banker, and would always remain so.

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