27-09-2013, 03:26 PM
GLOBAL DIMENSIONS OF HR AND ITS IMPACT - BENCHMARKING IN THE INDIAN BFSI ORGANISATIONS
INTRODUCTION
Benchmarking is the process of comparing one's business processes and performance metrics
to industry bests and/or best practices from other industries. Dimensions typically measured
are quality, time and cost. In the process of benchmarking, management identifies the best
firms in their industry, or in another industry where similar processes exist, and compare the
results and processes of those studied (the "targets") to one's own results and processes. In
this way, they learn how well the targets perform and, more importantly, the business
processes that explain why these firms are successful.
The term benchmarking was first used by cobblers to measure people's feet for shoes. They
would place someone's foot on a "bench" and mark it out to make the pattern for the shoes.
Benchmarking is used to measure performance using a specific indicator (cost per unit of
measure, productivity per unit of measure, cycle time of x per unit of measure or defects per
unit of measure) resulting in a metric of performance that is then compared to others.
Return on assets (ROA) is one of the many measures used by finance technicians to measure
performance of financial institutions. We have used this data to highlight the kind of income
foreign banks generate from a low incision and penetration as compared to Indian banks,
financial services and insurance. The keyword in the current synopsis hence is ̳compare‘. To
benchmark would ideally include an incisive evaluation of the organisation as a whole before
we can compare the parameters with those of a leader. It has to be a holistic evaluation as all
departments of a business unit perform together to reach a certain objective. However, having
spoken of objectives, there is a deep chasm in terms of objective of the public sector BFSI
organisations and their privately owned counterparts.
Employee Engagement
Multinational banking, financial services and insurance companies and their private sector
counter parts spend a sizeable amount of resources on employee engagement in terms of
investment towards team building exercises, building a brand amongst its employees, and
inclusion in operational management decisions.
The differences are highlighted when one says he works in, say, BNP Paribas, and another
says, Indian Bank. Though the individual at Indian Bank might be in a far better position than
his counterpart, the brand sometimes becomes a game clincher.
Besides that, employees at home grown BFSI organisation also require a fair degree of
autonomy that affects the work surrounding him. Employees at multinational banking and
financial services companies are penalized for a delay / error that might cause the customer
any loss (whether or not the customer is aware of it). A similar ownership is missing in the
Indian counterparts of these entities.
De-Unionisation and Enforcing Discipline
Trade Unions Act and State laws provide Legal Protections. Trade Unions in India have
provided a powerful mechanism for collective bargaining between and employer and
employees. At the same time, disputes between employers and trade unions continue to be
litigated. The cost of disruption is constantly rising and raising questions about the role of
trade unions and TU Act. Many multinational banks and financial services – attribute a part
of their success to the absence of large scale trade union movements having vested interests.
[Vikram Shroff and Akshay Bhargav, Attorneys of Law, Nishith Desai & Associates].
The Supreme Court, during a recent hearing of an inter-trade dispute, remarked that the
provisions of TU Act were archaic and needed to be amended. Whether there will be a
change in the future is yet to be seen. Stronger HR commitment is also required for enforcing
appropriate work ethics decorum and discipline in public sector BFSI companies. Once
employed with a particula