EMPIRICAL FINDINGS
Regardless of problems interviewing HR managers and getting sufficient information concerning Georgian banks, we managed to collect some data about several banks’ HRM issues. We have to mention that, banks do not have well-managed HR system, due to some reasons. But, in the future they are going to improve the existing situation. As we have already mentioned intention of this report is to discuss how the following processes are implemented in Georgian banking sector:
HR strategy and policy
We are going to discuss several issues in the HR strategy and policy. One of the most important topics is Organizational structure and Recruitment.
Organizational Structure
Every bank has merely different organizational structure. For example, Bank Republic has the following hierarchical structure:
- Assistant;
- Specialist;
- Senior specialist;
- Head of section;
- Head of department – Branch Director;
- Top manager;
- Director;
Cartu Bank has Pyramid Structure:
Recruitment
Internet is very rampant way of recruiting job candidates in Georgian banks. HR in Georgian banks uses a couple of internet sites: and . Every bank has its style of candidate selection. For example, Cartu bank has several steps when selecting new employee. The following steps should be passed by a candidate:
- Professional test;
- Interview with HR manager and immediate manger;
- Psychological test (In case of ambiguous personality);
- Group interview;
At Bank of Georgia they plan the end of the year, on what positions to hire employees. But sometimes there are circumstances, when an employee is hired spontaneously.
The following steps exist for recruiting in Bank Republic:
- Selection;
- Testing;
- 2 interviews;
- Hiring for the job;
An employee motivation system
Motivation is undivided part of any job in any organization. Banks, operating in Georgia mainly have financial motivators.
There are myriad of effective motivator tools, which banking sector uses. For example, Standard Bank uses salary increase as the major motivator tool. Employees’ salaries are raised according to degree of their performance. Also, they use group incentive plans. For example, if a department performs well, group is rewarded by some amount of money. They also use recognition-based awards, specifically, non-financial recognition. Recently, for example, Standard Bank’s Executive director- Imran Hizar Hayat awarded 3 sales people from sales department. At Cartu bank at the end of the year, they award the best employee from different point of view (the most loyal employee, the most active and etc.). Nowadays they organize photo competition.
At Bank Republic there are New Year’s and Easter premium, which every employee gets, if they do not have get any reprimand. There is a bonus on performing the action plan at the end of the year. Also, there is a bonus for credit officers, who are oriented on sales and executing a plan simultaneously.
Performance appraisal
Performance appraisal is the most developed in banking sector. Banks in Georgian market appraise their employees mainly by their immediate supervisors. More sophisticated mechanism is in Cartu Bank Human Resource Department. Employees are appraised according to departments. Each department has its functional plan (what work has to be done), which is written based on past performance. In this case head of a department appraises his/her subordinate and Top management is also involved in this process. Appraising employees through department is very important and valuable; some departments are interrelated and weakness of each department can be articulated easily. So, management will be able to improve performance of the weak department.
According to our research the reason Standard Bank did not have performance appraisal system is that this bank was very small and other fact is that subordinate and manager were not working with each other enough time (minimum working period between subordinate and a manager is 6 months). In the future this bank is planning to appraise employees based on managers. Managers will evaluate their subordinates’ work, according to their competences; there will be five competencies and in each competence there will be several levels.
Bank of Georgia has different performance appraisal system. They use 360-degree appraisal system, which is one of the most objective tool to evaluate. Performance information is collected all around an employee from his or her supervisors, subordinates, peers and internal or external customers. For Bank of Georgia this system is bases for providing feedback.
Performance appraisal is very important issue and is different in every organization. This is why some banks refused to give the information about this topic and kept this information confidential.
Trainings
It is very appreciating that trainings are very actual in Georgian banking sector. There are several types of training; the most widespread is training connected with new products and training for new employees.
HR department in banks, have experience in assigning outside seminars (some employees are sent to polish their skills and improve performance).
In Standard Bank, employer assigns training courses to new comers, as well as existing employees. Newcomers are trained about their duties and they are taught how the whole system works, which is called first level training. In the case of Standard Bank, they do not assign training courses according to employee’s gap in the performance; instead, existing employees ask by themselves for training courses in the field they have less understanding and knowledge. Apart from this they have several types of trainings, such as stress, service+ and qualification improvement trainings. These are called second level training.
Cartu Bank has connections with Leader’s school, where Cartu Bank’s employees are provided with valuable trainings.
Bank Republic has a high level Training Center aiming at accelerating the development of performances, team spirit, communication and professionalism.
When to train employees (Bank Republic)
There are obligatory trainings that include bank system trainings, customer service and etc. Once a year while evaluating subordinates, managers point out the trainings that are necessary. BR validation training centre conducts the training and than evaluates the results. Mainly there are planned trainings, but sometimes banks assign spontaneous trainings.
Types of Trainings which Bank Republic conducts:
- Induction Training;
- Front Desk Operations;
- Retail Operations;
- Corporate Banking;
- Banking Products;
- Customer Service;
- Sales;
- Presentation and Negotiation;
- Anti Money Laundering;
- Banking Risks;
- Train the Trainer;
- Management Skills;
Bank of Georgia has very interesting training scheme. They use training as one of the selection tools. If a candidate fails to pass minimum requirement of training during selection, his candidate will not be discussed on the position. At Bank of Georgia they have carrier development scheme, not for every employee, but for each position.
Salary ranges
Nearly every bank has different structure of salary gradation. For example, in the Standard Bank there are 6 pay grades and within this pay grades there is min-max salary ranges. Employer is changing the pay range within the grade according to employees’ performance.
Some banks have very sophisticated formation of salaries; for example, Cartu Bank’s every employee is situated in a salary matrix. This matrix is made exclusively for this bank and every employee knows his/her maximum salary level. In Cartu Bank every employee is allowed to fill in an application form
(minimum in every four months), where he/she can depict her personal growth, how he/she developed skills, gained knowledge, and he/she must confirm how she uses gained experience and knowledge in practice; based on this, HR will decide if she/he deserves increase in salary. All this information must be well proved and if there is an attempt that an employee is lying about her/his personal growth, than the employee will get a penalty (he will be prohibited to fill in the application form for 6 months).
In general, employer takes into account what competitors are paying to their employees for the same position, in order not to lose an employee.
It is remarkable that Cartu Bank serves mainly corporate clients, which induces employees’ high responsibility toward job performance process. Whenever there is increased responsibility, this plays an important role when defining salaries.
At present time Bank Republic is implementing new Salary system. In general market price has always been considered. As for Bank of Georgia they have two major salary grades for every position, minimum and maximum, and they vary between these two grades. The minimum and maximum are defined by market price.
BIBLIOGRAPHY
Interview
Marina Kuchukhidze - Standard Bank’s HR manager
Irina Museridze - Cartu Bank’s HR manager
Tiko Kutaladze – Bank of Georgia’s HR representative
Nino Maisuradze – Bank Republic’s HR manager
Material
“A Framework for Human Resource Management”, 4th edition, Gary Dessler
“Organizational Behavior”, 11th edition, Robinson and Judge
Relying on the data collected and investigations conducted, we can conclude that HR management in Georgia in banking industry is in its development stage. But yet, too little is made and too much can be improved in HR management that will improve the overall industry situation, service quality, employee satisfaction and overall social wealth and progress.
Several years ago even this “too little” was not being made and nowadays an apparent progress can be seen. The tendency leads us to conclusion that the next several years will gain a lot for the banking industry in Georgia.
The past and future HR progress can be prescribes to the increasing competition, foreign entrants on the marketplace and the improving economical situation of the country.
