PROJECT REPORT ON
HUMAN RESOURCES MANAGEMENT IN
COMMERCIAL BANK OF NEPAL
Submitted by
Bikash Bhusal
P.U. Exam Roll No.: 18030929
P.U. Registration : 2017-2-03-2146
Submitted To
V.S. Niketan College
Under the Management of V.S. Education Foundation
Pokhara University
In Partial Fulfillment of the requirements of the Degree of
Bachelor of Business Administration
BBA
2021
i
DECLARATION
I hereby declare that the project work entitled to Human Resources Management in
Commercial Banks of Nepal
submitted to the Faculty of Management, Pokhara
University is an original piece of work under V.S. Niketan College, Minbhawan ,
Kathmandu and is submitted in partial fulfillment of the requirements for the degree of
Bachelor of Business Administration (BBA). This project work report has not been
submitted to any other university or institution for the award of any degree.
Signature:
Name of Student: Bikash Bhusal
Date:
ii
BONAFIDE CERTIFICATE
The project work report entitled of “Human Resources Management in Commercial
Banks of Nepal” submitted by Bikash Bhusal of V.S. Niketan College, Minbhawan is
prepared under my supervision as per the procedure and format requirements laid by the
Faculty of Management, Pokhara University, as partial fulfillment of the requirements for
the degree of Bachelor of Business Administration (BBA). I therefore recommend the
project work report for evaluation.
-------------------------------------
-----------------------------
Supervisor
Principal
Mr. Binod Lingden
Mr. Gopal Singh
----------------------------Name of External Examiner:
Date:
iii
ACKNOWLEDGEMENT
It would not have been possible to complete this dissertation without the guidance and the
assistance of several individuals. Each of them contributed in the preparation and
completion of this study.
First and foremost, my sincere gratitude goes to Mr. Binod Lingden for his guidance and
encouragement.
I would like to thank V.S. Niketan College for providing us opportunities to enhance our
individual skills. I would also like to appreciate the various helping hand extended toward
me by my friends and college and all the directors including Pokhara University for
providing an opportunity of experience and learning.
Finally, I again send my greeting and obligations to all those who involved in this project
directly or indirectly
Thank you!
Bikash Bhusal
iv
TABLE OF THE CONTENTS
Title page
i
Declaration
ii
Bonafide Certificate
iii
Acknowledgements
iv
Table of Contents
v
Executive Summary
CHAPTER I:
vi
INTRODUCTION
1 - 14
1.1 Background Information
1.2 Profile of the Organization
1.3 Objectives of the Project Work
1.4 Review of Related Studies
1.5 Research Methods
CHAPTER II:
DATA ANALYSIS AND MAJOR FINDINGS 15 - 27
2.1 Data Presentation and Analysis
2.2 Major Findings and Discussions
CHAPTER III:
SUMMARY AND CONCLUSIONS
3.1 Summary
3.2 Conclusion
Recommendation
Reference
Appendices
v
28 - 33
EXECUTIVE SUMMARY
The modern management regards human resource as the precious assets of an
organization. How this important asset is treated and developed in the Nepalese banks is
the main concern of this study banks are the important financial intermediary. Bank plays
a vital role in nation’s economy. The study reveals that there is a lack of systematic
approach toward human resource development in Nepalese bank. Many bank given low
priority human resource. However, it is the good indication that some of the banks have
started to provide their employee the training though they lack clear policy framework.
Now human resource management has been taken central position, but still the
development aspect of human resource has not received as much attention as it deserves.
The main objective of human resource management in bank is to facilitate employee’s
learning of job – related behavior, skills, knowledge and attitude in order to improve
employee’s performance. It is a continuous process basically designed to enhance
employee’s performance and satisfaction thereby improving organizational efficiency and
effectiveness. In the present context there is competitive and dynamic business
environment, the role of human resource increasingly important than ever before.
Nepal is one of the least developed countries and the concept of human resource
management in this country rose only after 1990 with the adaptation of liberalization and
privatization policy.
This paper first presents the meaning of bank and its history in Nepal. Then it will present
an overview of human resource management and practices of human resource
management in Nepalese bank. Then paper goes on analysis section, I have taken three
banks as reference for collecting information and analyzed human resource practices in
Nepalese bank. The characteristics of HR department, recruitment method, pay level and
evaluation results were found to have greater local influence while selection method,
training, performance tools had greater foreign influence.
vi
CHAPTER I
INTRODUCTION
1.1
Background of the study
Banks are the financial intermediary which helps the transfer of fund from surplus units
of economy to the deficit unit of the economy. Household individuals, business
corporations, governments and foreign parties are the units of economy which can be
surplus unit or deficit unit as per their requirements. Banks are one the most important
types of financial intermediary which are in operation throughout the world.
Bank is a profit-making organization established with an objective to provide various
banking services to the public and make a earning from its business operation. The bank
helps to transfer funds from surplus units of the economy to the deficit units of the
economy. It facilitates movement of money and goods thus making it possible both the
domestic trade and international trade and tourism. It helps the general public to protect
their money and valuable. The core banking functions can be said as:
Deposit Mobilization

Lending

Remittance
Beside the given functions modern bank also provides various other services and
products such as Bank assurance, derivative contracts, locker service, utility payment etc.
The concept of HRM in Nepal rose after the liberalization and privation policy in 1990.
Prior to this, Nepalese banks were not using any precisely defined HR strategies.
Establishment of private business organizations and joint ventures after 1990 gave a new
turn to Nepalese banking organizations. For example; pay and benefits became
competitive for competent employees, many organizations started emphasizing on
performance. Training and development programmers were highly welcomed as means to
develop employees’ skills and knowledge.
1
However, the Nepalese banks are still on learning phase and thus the foundation of HRM
is not yet clearly established.
1.2
Profile of the Organization
A) Nepal Rastra Bank
Nepal Rastra Bank (NRB), the Central Bank of Nepal, was established in 1956
under the Nepal Rastra Bank Act, 1955, to discharge the central banking
responsibilities including guiding the development of the embryonic domestic
financial sector. Since establishment, there has been significant growth in both the
number and the activities of the domestic financial institutions in the country.
To reflect this dynamic environment, the functions and objectives of the Bank have
been re-casted by the new Nepal Rastra Bank Act, 2058 (2002), which lays down
the objectives of the Bank as:



To formulate necessary monetary and foreign exchange policies in order to
maintain the stability of price and balance of payment for economic stability
and sustainable development of economy, and manage it;
To increase the access of the financial service and increase the public
confidence towards the banking and financial system by maintaining stability
of the banking and financial sectors,
To develop a secure, healthy and efficient system of payment;
For the achievement of the above objectives in the present dynamic environment,
NRB is pursuing sustained progress and continued reform of the financial sector is
of utmost importance. In this regard, NRB is pursuing various policies, strategies
and actions, all of which are conveyed in the Banks annual monetary policy.
B) Siddhartha Bank Limited
Siddhartha Bank Limited (SBL), established in 2002 and promoted by prominent
personalities of Nepal, today stands as one of the consistently growing banks in Nepal.
While the promoters come from a wide range of sectors, they possess immense business
acumen and share their valuable experiences towards the betterment of the Bank.
Within a short span of time, Siddhartha Bank has been able come up with a wide range of
products and services that best suits its clientele. Siddhartha Bank has been posting
2
growth in its portfolio size and profitability consistently since the beginning of its
operations. The management of the Bank has been thoroughly professional.
Siddhartha Bank has been able to gain significant trust of the customers and all other
stakeholders to become one of the most promising commercial banks in the country. The
Bank is fully committed towards customer satisfaction. The range and scope of modern
banking products and services the Bank has been providing is an example to its
commitment towards customer satisfaction. It is this commitment that has helped the
Bank register quantum growth every year. And the Bank is confident and hopeful that it
will be able to retain this trust and move even further towards its mission of becoming
one of the leading banks of the industry.
VISION
Siddhartha Bank runs with a vision to be financially sound, operationally efficient and
keep abreast with technological developments.
MISSION
The Bank desires to be one of the leading banks of the industry by fulfilling the interest
of the stakeholders and also aims to provide total customer satisfaction by way of
offering innovative products and by developing and retaining highly motivated and
committed staff. It directs all its efforts to move ahead with increased profits.
C) Standard Chartered Bank
Standard Chartered Bank Nepal Limited has been in operation in Nepal since
1987 when it was initially registered as a joint-venture operation. Today, the Bank
is an integral part of Standard Chartered Group having an ownership of 70.21% in
the company with 29.79% shares owned by the Nepalese public. The Bank enjoys
the status of the only international bank currently operating in Nepal.
We are a leading international banking group with a 160-year history in some of
the world’s most dynamic markets. Our heritage and values are expressed in our
brand promise, Here for good. Our operations reflect our Purpose, which is to
drive commerce and prosperity through our unique diversity. We are present in 60
markets and serve clients in a further 85. Supported by our global functions, our
businesses serve four client segments in four regions- Europe & Americas, Africa
and Middle East, ASEAN & South Asia, Greater China & North Asia. Standard
Chartered PLC is listed on the London and Hong Kong Stock Exchanges as well
as the Bombay and National Stock Exchanges in India.
With 15 points of representation, 26 ATMs across the country and more than 531
local staff, Standard Chartered Bank Nepal Limited is serving its clients and
customers through an extensive domestic network. In addition, the global network
of Standard Chartered Group enables the Bank to provide truly international
3
banking services in Nepal. Standard Chartered Bank Nepal Limited offers a full
range of banking products and services to a wide range of clients and customers
including individuals, mid-market local corporates, multinationals, large publicsector companies, government corporations, airlines, hotels as well as the
development organizations segment comprising of embassies, aid agencies,
bilateral entities, multilateral entities, non-government organizations and
international non-government organizations. The Bank has been the pioneer in
introducing client-focused products and services and aspires to continue its
leadership. It is the first Bank in Nepal to implement the Anti- Money Laundering
policy and to apply the ‘Know Your Customer’ procedure on all the customer
accounts.
The Bank believes in delivering shareholder value in a social, ethical and
environmentally responsible manner. Standard Chartered throughout its long
history has played an active role in supporting those communities in which its
customers and staff live.
From 2003 to 2018, the Bank’s Global Community Program Strategy focused on
health and education with Seeing is Believing (SiB) as the flagship program to
tackle avoidable blindness and visual impairment. In 2018, the Bank achieved its
ambitious target to raise USD100 million globally for SiB two years ahead of
schedule. In Nepal, we continue to support all existing SiB commitments until 31
December 2020.
In May 2019, the Bank’s new Global Community Program Strategy “Future
makers by Standard Chartered” was launched in Nepal subsequent to the global
launch in January 2019. This initiative focuses on empowering the next
generation to learn, earn and grow. There are three pillars to the strategy:
education, employability and entrepreneurship. It builds on the success of our
current community programs while growing our ambition to ensure that we are
reaching more young people across our markets. The Bank is also actively
engaged with the communities in raising awareness around Financial Literacy,
Environment, Health and Education.
4
1.3 Objectives of the Study
The main objective of this study is to evaluate the importance of human resource in
Nepalese banking sector. The specific objectives of the study are as follows:

To analyze practices of human resource management in Nepalese banking sector.

To access role of HR department to meet individual employee’s goal as well as
organizational goal.

To identify employees satisfaction with their job and HR head.

To explore the nature of Human Resource Management in Nepalese banking
sector.
1.4 Limitations
This study is not free from the limitations. The limitations of the study are as follows:

The research was conducted within the limited period of time. So due to time
constraint it may lack some important essential information.

This report is based on secondary data collected from internet.

There was less use of necessary process.

The primary data used in this research covers only certain area.
5
1.5 Review of Related Studies
The human resource management is a common term which is heard amongst
professionals. This term takes on a key part in the success of any system. This function
present in any management helps in maximizing employee performance. Valuable
employees are held in an organization and also certain aspects such as organizational
culture, policies, benefits, compensation, and employee relation are maintained with the
aid of human resource management. HR sets up strategies, produces policies, systems,
standards and procedures. HR department is responsible for training employees,
rewarding, performance appraisal and recruitment and more. Human resource is the main
assets of any organization. Nepalese banking are practicing human resource management
longer than other business organization.
A very few research has been conducted in past about “human research management in
Nepalese banking sector.”Recently Published International Executive Report on
comparative human resource management (CRANET, 2006). This reveals that around 40
percent of Nepalese organizations have a human resource manager on the main board of
directors or its equivalent, although the means by which they obtained this position
remains rather opaque; the majority reported not to have been recruited as HR specialists
(CRANET 2006, p13). The same survey reports that while 69 percent of organizations
have personnel /HRM department; only 21 percent organizations have personnel strategy
(Adhikari and Gautam, 2006). According to the CRANET survey data, involvement of
HR in business strategy in Nepalese organization tends to occur in the implementation of
that strategy, rather than at its inception or development (43%), with less than one in
three businesses reporting HR involvement in strategy formulation; the lowest proportion
of any of the 32 countries on which they report.
It would appear that as a result of this lack of upstream input into strategy formulation, or
simply a general absence of HR influence.
Responsibility for day to day HR activity seems to fall on line management. The
CRANET survey (2006) reports that recruitment and selection, pay and benefits, training
6
and development, industrial relations and workforce expansion in Nepal are all primarily
the responsibility of line management alone.
In contrast to this overall picture however, a study of Nepalese commercial banks
(Gautam,2006) reveals that most of the responsibility for HR practices is shared between
line management and HR. This degree of joint responsibility may be viewed as
encouraging if line managers are increasingly involved in HR related decisions.
History of Bank in Nepal
Nepal Bank ltd, Is the first modern Bank in Nepal. It is taken as the milestone of modern
banking of the country. Nepal bank was established in 1937 A.D. Nepal Bank has been
inaugurated by King Tribhuwan Bir Bikram Shah Dev on 30thkartik 1994 B.S. Nepal
Bank was established as a semi government bank with the authorized capital of rs.10
million and the paid up capital of rs.892 thousand. Until mid 1940 only metallic coins
were used as a medium of exchange. So the Nepal government felt the need of separate
institution or body to issue national currency and promote financial organization in the
country. Nepal bank ltd. remained the only financial institutions of the country until the
foundation of Nepal Rastra Bank is 1956 A.D. due to the absence of the central bank,
Nepal Rastra Bank has to play the role of central bank and operate the function of central
bank. Hence, the Nepal Rastra Bank Act, 1955 was formulated, which was approved by
Nepal government.
In 1957 A.D. industrial development bank was established to promote the
industrialization in Nepal, which was later converted in to Nepal industrial development
corporation (NIDC) in 1959A.D.Rastriya Banijya Bank was established in 1965 A.D. as
the second commercial bank of Nepal. Agriculture development Bank was established in
1968 A.D. this is the first institution in agriculture financing.
Today the banking sector is more liberalized and modernized and systematic managed.
There are various types of ban working in modern banking system in Nepal, includes
central, development, commercial finance and micro finance.
7
Human Resource Department
The size of organization determines whether to have or not to have Human Resource
Department. In Nepal almost every banking organization have HR Department, and in
most of cases HR head or director is appointed from within the organization. 90% banks
have male HR representatives (the remaining 10% have female HR representative). HR
department in Nepalese banks is male dominated.
Recruitment and Selection
Recruitment is the process of discovering qualified job candidates and encouraging them
to apply for work (French, 2006). It is a part of hiring process which includes attracting,
collecting, short-listing and examining the job applicants (Gautam, 2011). Recruitment
should locate and attract a sufficiently large pool of qualified candidates since it increases
the possibility of recruiting right and the competent person. Recruitment sources are
defined as follows :
Internal sources: promotions, transfer, rehire and job rotation.
External sources: advertising, internet, employment agencies, executive recruiter (head
hunter), educational institution placement, internship, professional associations etc.
Selection is the process of screening effectively among the people who apply for work
with an organization. Selecting the right people is regarded as one of the most important
function of HR manager as the right skills and attitudes do the better job for the
organization.
Agrawal (2009) says that referrals i.e. friend and families in case of Nepal, is the most
commonly used recruitment sources. Nepotism, favoritism and ‘bending of rules’ to hire
the favored candidate is also very common. Therefore, choosing inappropriate
recruitment sources and lack of transparency and fairness in selection have been a
problem in many organizations ( including banking sector) in Nepal. On the other hand,
Gautam (2011) argues that Nepali organizations placed bigger priority for fighting
against favoritism after 1990 as they needed the real job performers to remain
competitive. He further says that there is no uniform practice of recruitment among
8
Nepali organizations. However, they have developed certain process depending upon the
HR need. Company website and commercial web sites are increasing as the recruitment
sources and some organizations have started the practice of educational institute
placements. The Cranet report (2005) shows that the Primary responsibility for
recruitment and selection in majority of the Nepali companies is fulfilled by line
managers.
Human Resource Development
Human resource development is the managerial function of preserving and enhancing
employee’s competence in their jobs through improving their knowledge, skills, abilities
and other characteristics. Thus it is concerned with the process for developing capabilities
and competencies and acquired through organized learning experience. It is linked with
the contribution of employees for successfully achieving organizational goals. The area
of human resource development covers both training and managerial developments.
Training refers to the methods used to give new or present employees the skills they need
to perform their jobs. Task analysis for the new employees and performance analysis for
the present employees are the two basic tools used for accessing the training needs.
Training methods are broadly categorized into two types 1)on the job (Apprenticeship,
internship, job instructions, informal learning etc) and 2)off the job (lectures/conferences,
simulation, programmed instructions etc) training. Management development is any
attempt to improve managerial performance by imparting knowledge, changing attitudes,
or increasing skills. Management development could also be either on the job (coaching,
understudy, job rotation, planned work assignment, internship etc) or off the job
(lectures/seminar, simulation, role play, computer modeling, sensitivity training,
transactional analysis etc).
Employees of Nepalese banking sector had been unable to take the full advantage of new
jobs generated by development activities. One of the reasons is the lack of sufficient
opportunity to learn the requisite skills. Nepalese employees are looking for training with
specific reference to new technology and opportunity for further education (Adhikari and
Gautam, 2011). However, many Nepalese banks do not have any defined training and
9
development policies. However, training is the first victim of budget cuts. It is regarded
as costs rather than investment . In average, 0.5% of total budget is used as training
budget. Supervisors and line managers play the most influential role in defining training
needs, designing training activities and even selecting the potential trainees. Nepali
banking organizations prefer to hire mid-career and experienced human resources to
reduce time and cost on training. The mix of both on the job and off the jobs training
methods is used in Nepal but very few bank shave practice of management development
programs. Coaching, understudy, lectures and seminars are used for such programs). The
primary responsibility of training and development is of line managers in 35% of the
Nepalese banks while in 25%, it is done by line managers in consultation with HR.
Performance Appraisal
Performance appraisal is a formal, systematic assessment of how well employees are
performing their jobs in relation to established standards and the communication of that
assessment to employees. It is a review of the job-relevant strengths and weaknesses of
an individual or a team in an organization. Therefore, this appraisal provides crucial
information on which the supervisor can make promotion and pay increment. It points out
the deficiencies and emphasizes to work correctly. It also assists in career-planning of
employees. Performance appraisals are mostly done by immediate supervisors. Peer
reviews, rating committees, self ratings, appraisals by subordinates, 360 degree feedbacks
are other performance appraisals tools.
In Nepalese banks, performance appraisal has received lower priority. Personal judgment
and subjective assessment have been the key criteria in many private sector banks. It is
mostly linked with promotion and pay increment. However, it lacks transparency and not
used either for corrective action or for career planning .The lack of performance appraisal
system makes the competent employees highly dissatisfied at work and with pay and
benefits. Performance appraisal is often done by immediate supervisor in Nepalese banks.
In addition, supervisor’s supervisor, employee herself/himself, subordinates, peers and
customers feedback are also used as inputs. The outcome of evaluation is basically linked
with training and development, pay determination and HR planning.
10
Compensation
Compensation refers to all forms of pay or rewards going to employees and arising from
their employment. It has two main components:
-
Direct financial payments:In the form of wages, salaries, incentives, commissions, and bonuses and
-
Indirect payments:In the form of financial benefits like employer-paid insurance and vacations.
Compensation should be attractive and at the same time it should also be cost
effective for balancing employee’s motivation and the financial capacity of the
organization. Compensation structure is affected by legal considerations, market
rates, equity consideration, cost of living, union pressures etc.
The current level of salary and wages is one of the most dissatisfying and
demotivating factors for Nepalese employees mainly in private banking sector. The
current pay level in Nepalese banks is the lowest in South Asia (Adhikari, 2008; Adhikari
and Gautama, 2010) and what was seen in the literature, there is no specific pay
determination system except the minimum wage and benefits stated in law.
Employee Relations
A healthier labor-management relationship is imperative to achieve organizational
objectives. A good employee relation is maintained by harmonizing the distinctive and
conflicting interests of the workers, employers and society. Here, society indicates the
government and pressure groups. Workers are represented by trade unions. A union is an
organization of workers, acting collectively, seeking to promote and protect its mutual
interests through collective bargaining. Collective bargaining refers to the negotiation
between management and union for terms and conditions of employment.
According to the Trade Unions Act of Nepal, employees can form an enterprise based
trade union if 25% of the employees agree of the same company. Trade Union
Association and Trade Union Federation can also be formed. Trade Union Association
11
refers to the group of enterprise-based unions based on the same function or industry.
Almost every bank in Nepal has union and some of banks have inter-union.
The higher compensation, job security, better working conditions, influence over work
rules and obtain political power are the main reasons to form a union in the context of
Nepal. The Nepali trade unions are rather political than institutional. The existence of
more than one union in an organization is creating the inter-union competition and
rivalries, which is adversely affecting both the employee welfare and the organizational
performance. Trade unions in Nepal are obsessed with demands of pay increment and
extra benefits. They hardly make the management aware for the improvements on quality
of work life.
The main barriers in having employee relation in Nepalese banks are hierarchical nature
with over-centralization of power, lack of trust between top management and the line
management, the headstrong feeling of status and prestige in top management etc. The
conflicts mainly arise due to the communication breakdown, personality clashes, and role
inconsistencies.
Further, lack of education in the unions and the management itself has led to an enormous
employee issues.
12
A Paradigm of Human Resources Management
Job Organization and
Information
J O B S
PEOPLE
Acquisition
-knowledge
-skills
Maintenance
-attitudes
-potentialities
Training and Development
-needs
-values
Research on Human
Resources
Figure:1
If the proposition that people are the organization’s most valuable assets is to be upheld,
then we have to understand how these assets are acquired, retained and improved as
shown in Figure 1. Organizations must be able to determine the key role of human
resources (HR) and introduced or strengthen the appropriate HR skills and capabilities in
order to make HR credible and a real business partner.
13
1.6 Research Methods
The main purpose of this study was to know the importance human resource in Nepal
especially in banking sectors.
Nature and Sources of Data
Since the study used both data i.e. primary and secondary sources of information. Both
qualitative and quantitative data were utilized for the study. The information had
collected the data mainly through secondary sources like surfing net, book and past
reports. Almost all the data has been collected from published reports, brochures, articles
in newspaper etc.
For the study both primary and secondary data were used. In order to get more
information and to reach to depth of human resource management in Nepalese banks, it
was required to consult and review existing literatures, Reports, information bulletins,
booklets etc published by various institutions and personnel working in this field.
Primary data were collected from the respective financial institutions and secondary data
were collected from various published articles, book and from internet.
Data Collection Techniques
For the collection of primary data a structured questionnaire were used. A set of
structured questionnaire were developed to conduct interview with the HR head and the
employee of the respective bank.
14
CHAPTER II
Data Analysis and Major Findings
2.1 Data Presentation and Analysis
Table 2.1
Human Resource Management Practiced by Nepalese Bank
Banks
Nepal
HR head
Male
Rastra
Recruitment
Performance
Training &
process
appraisal
development
Internal
Every staff is
Conducts a survey
evaluated
tanning needs-
biannually
assessment
Through job
At the requirement,
External
Bank
Siddhartha
Male
Bank ltd.
Internal
External
Compensation
Fixed schedule
According to
fulfillment analysis
performance and
and skill rating
level of job
Most preferred
internal
Standard
Chartered
Bank
Female
Internal
Most preferred
external
Based on five W’
Provides framework
Divided into two
that includes: who,
within which
categories
what, why, where,
employee can
when.
identified the
15
-sales personnel
training and
-compensating to
development need
executives
HR Departments
All three Nepali banks had HR department. All of them have written HR policy. HR
department works under the direct supervision and control of top management and it is
male dominated. Heads of HR department in two banks are male and in one female. Area
of responsibility of banks HR, also cover administration and general affairs too.
Recruitment and Selection
Nepal Rastra Bank has the policy of filling vacant positions either internally, externally
and promotions based on performance. The percentage of recruitment from outside (open
competition), internal competition and promotions are determined by the Staff By-Laws
of the Bank. The Bank would make an open call for applications for external recruitment,
conduct competency examinations and interviews to select the best candidate. For the
internal recruitment, the Bank would also conduct examinations and interviews.
The Bank has a generalized recruitment policy, except for technical/specialized
departments and positions such as information technology, legal, and other technical
grades such as electrician, plumber etc. These general staff can be deployed or placed at
any department. There is two process of recruiting :
1) Internal – job rotation, promotion, demotion, transfer
2) External – advertisement, employment agencies, universities etc.
Siddhartha Bank Ltd. most commonly used internal recruitment sources such as
promotion, transfer, and contract staff. Attract quality candidates with the help of
newspaper and official website.
16
It outsourced recruitment process because,
 Its required lots of additional staffs
 Time consuming
 Such recruiting agencies are expertise
Standard Chartered Bank recruits the most talented individual from the external market to
supplement their internal pipeline of talent. Their human resource management provides
guidance on the use of psychometric test and has robust recruitment criteria to ensure that
all candidates are treated fairly, equally with respect. It has a global graduate recruitment
program where in the regions of 150 graduates are recruited each year on the
management trainee program across all business, functions and countries.
Methods of recruitment in standard chartered bank are
Internal
1) Job posting
2) Skill inventory
3) Job bidding
4)
Referrals
External
1) School and college recruiting
2) Advertising
3) Private employee agencies
4) Internet and the website
The main sources of recruitment for Nepali banks are internal, advertisement in
newspaper, word of mouth, referrals, recruitment agencies and head hunting. Demand for
recruitment comes from the respective departments with the defined requisition. It shows
17
that the HR works in co-ordination with the line managers. One bank said that the
demand for new recruitment comes from the senior level. It indicates the direct control of
the top management. Simultaneously, it is also assumed that the top management
influences selection of the candidates.
Performance Appraisal
In Nepal Rastra Bank every staff is evaluated biannually. Staff By-Laws have prescribed
criteria for the appraisal. The Supervisor rates her/his subordinates on those criteria
Siddhartha Bank ltd. measured employee’s performance according to their job fulfillment
and it also appraised performance through skill rating analysis.
At standard chartered bank the components of performance appraisal are in respect of the
five W’s includes: who, what, why, when and where performance appraisal.
Who: all employee work under the supervision of manager. Therefore, the manager is the
best person to do performance appraisal of his subordinates.
What: the appraisal at the organization includes appraisal of current performance as well
as the future potential. It also includes evaluation of human traits such as behavior,
interaction with other staff member etc.
Why: it is concern with creating and maintaining a satisfactory level of performance of
employee in the present job highlighting his/her needs and potential for personal growth.
When: it is carried out one yearly basis the manager uses good work as opportunity to
provide positive thrust and uses poor work as a basis for training.
Where: the performance appraisal is done in a cordial and friendly environment.
18
Training and Development
Periodically, the Nepal Rastra Bank conducts a survey for training needs-assessment. On
the Basis of the needs-assessment and the invitations from international organizations
Staff is nominated to attend learning events. The Bank currently sends its staff Mainly to
the IMF, the SEACEN Centre, Asian Institute of Technology (AIT), SAARC Finance, etc
for the overseas training. Meanwhile, the BTC conducts a Survey for training demand
annually to formulate its training calendar.
In Siddhartha Bank ltd. training and development program for all its employees ranging
subordinates to executives levels .it practices both on the job and off the job training
according to requirement.
Standard chartered bank training is a partnership between employee and the bank. The
bank provide framework within which the employee can identified the training and
development needs. Such training provides a consistent standard of management learning
throughout standard chartered. It also enables the employees to take all of the programs
or study for individual modules according to their particular development needs.
All three Nepali banks offer both on the job and off the job training. One of them
provides managerial training. Supervisor’s direct observation, training need analysis form
and performance appraisal are used for determining training needs. In all three banks,
selecting employees for training is a combined task of head of department, immediate
supervisor and HR. All the banks often participate in training programs held by various
training providing institutions in Nepal giving more focus on off the job trainings. One
bank said that these training institutions are the decisive factor for providing training to
its employees. Company decides for training after getting information on upcoming
training events and workshops.
19
Compensation
Nepal Rastra Bank has a fixed schedule of compensation which applies to all staff. There
are also fixed benefit schemes for staffs such as housing loans, medical allowance, and
lunch allowance, various leaves, annual grades etc.
Siddhartha bank ltd. provided compensation based on employees performance.
Standard Chartered Bank divided compensation in to two categories:
1) Sales personnel, who are compensate on their ability to meet their target.
2) Compensating the executives, who are responsible for the overall functions of the
bank.
All three Nepali banks stated that they strictly follow labor law of Nepal in case of
determining the minimum salary/wages and the benefits. Besides the former, bank
capacity and market rate are the two most influential factors for determining the starting
pay level. For pay increment and benefits, collective bargaining and performance
appraisal are decisive.
To get the clear picture of analysis the major findings are present in the following points
and table.
HR department of Nepalese banks found to be localized being male-dominated and
covering the area of responsibility more than HR. This feature of HR department is
similar in all Nepalese Bank.
20
Table 2.2
Finding on HR Department
NRB
SBL
SCB
Findings
Male dominated area
Male dominated area
Not male dominated
NRB & SBL– local
of responsibility
of responsibility
are of responsibility
HR practices and
covering more than
covering more than
covering more than
unclear work area
HR
HR
HR
SCB – western HR
practices and clear
work area
Various practices were found in recruitment and selection in different banks. Siddhartha
Bank ltd. most commonly used internal recruitment sources ( job posting, promotion,
contact staff).while Rastra Bank used both internal or external. And standard chartered
mostly preferred external recruitment. It shows the three different recruitment and
selection practice followed by Nepalese Bank. The following table shows the overall
summary on findings of recruitment and selection:
21
Table2.3
Recruitment and Selection
NRB
SBL
SCB
Finding
Recruitment
Internal,
Internal,
Internal,
NRB- both
Sources
advertisement,
advertisement,
advertisement,
internal and
word of mouth,
word of mouth,
word of mouth,
external
referrals,
connection,
referrals,
recruitment
recruitment
recruitment
agencies, head
agencies, head
agencies, head
SBL -
hunting, fresh
hunting,
hunting,
Preferred
graduates
internal
SCB –
Preferred
external
Demand for
from the
from the
from the
In all bank
recruitment
respective
respective
respective
there is
departments
departments
departments
interference of
with the defined with the defined with the defined top
requisition form
requisition form
22
requisition form
management
All three banks have same method of training and development methods but procedure
are different according to the nature and culture of bank.
Table 2.4
Findings on Training & Development
Method
NRB
SBL
SCB
Findings
On the job, off
On the job, off the
On the job, off
NRB-preferred off
the job
job
the job
the job.
Focus on both
focus on off the
SBL – both
job
according to
more focus on off
the job
requirement.
SCB-preferred off
the job.
Training need
Supervisor’s
Supervisor’s direct Supervisor’s
They all have same
analysis tool
direct
observation, need
direct
features on
observation, need
analysis form,
observation, need training need
analysis form,
performance
analysis form,
performance
appraisal
performance
appraisal
Have defined
No
analysis
appraisal
No
No
Undefined
procedure
training
programs and
schedule
23
The performance appraisal is not effective in Nepalese banking sector. This could be
because of the lack of fairness in Nepali way of performance appraisal system. But In
case of SCB, they are using extra tools to make the appraisal system more fair and
transparent. The outcome of performance appraisal could be said as more effective in
case of SCB since it is also used for giving feedback to employees.
Table 2.5
Finding on Performance Appraisal
Conducted by
NRB
SBL
SCB
Finding
Head of
Head of
Head of
Only head of
Department
Department
Department
Department is
involved
Compensation is found to be the most varied practice in NRB bank. Compensation and
benefits well paid in this bank than SCB & SBL. The SCB & SBL are emphasizing more
on the individual competency for basic pay level.
24
Table 2.6
Finding on Compensation
NRB
SBL
SCB
Finding
Base for initial
Company
Company
Company
Rate of
salary
capacity and
capacity, market
capacity and
compensation is
market rate
rate
individual
based on bank
competency,
capacity
Base for
Collective
Collective
Collective
All bank used
increment
bargaining,
bargaining,
bargaining,
same method
performance
performance
Performance
appraisal
appraisal
appraisal,
seniority
25
2.2 Major Finding and Discussion

Various practices are found in recruitment and selection in different bank.

In NRB and SBL, local HR practices and unclear work area but In SCB, western
HR practices and clear work area.

In all Bank have same features on training need analysis.

Three banks have same method of training and development but procedure are
different according to the nature of bank.
 The performance appraisal is not effective in Nepalese banking sector, this could
be because of lack of fairness in Nepali way of appraisal system.

Compensation is found to be the most varied practice in NRB bank, SCB and
SBL are emphasizing more on the individual competency for basic pay level.

Rate of compensation is based on Bank capacity.
26
COMPAIRING BANKS ACCORDING TO HR PRACTICES
HR Practices out of 10
NRB
SBL
SCB
It shows that among there of those commercial banks, SCB is good according to HR
practices because it follows western HR practices which is clear and is not male
nominated as like NRB and SBL. And also its pay system is different and good than
others two. So it has higher HR practices out of 10.
27
CHAPTER III
SUMMARY AND CONCLUSION
3.1 Summary
This study on “Human Resource Management in Nepalese Bank” is specially directed
toward the analysis of current status of human resource management in Nepal as well the
role and contribution of human resource in banking sector.
Bank is a profit-making organization established with an objective to provide various
banking services to the public and make a earning from its business operation. The bank
helps to transfer funds from surplus units of the economy to the deficit units of the
economy. Bank is a profit-making organization established with an objective to provide
various banking services to the public and make a earning from its business operation.
The bank helps to transfer funds from surplus units of the economy to the deficit units of
the economy.
The human resource management is a common term which is heard amongst
professionals. This term takes on a key part in the success of any system. This function
present in any management helps in maximizing employee performance. Valuable
employees are held in an organization and also certain aspects such as organizational
culture, policies, benefits, compensation, and employee relation are maintained with the
aid of human resource management.
Now human resource management has been taken central position, but still the
development aspect of human resource has not received as much attention as it deserves.
The main objective of human resource management in bank is to facilitate employee’s
learning of job – related behavior, skills, knowledge and attitude in order to improve
employee’s performance
28
In my project researcher have analyzed three types of bank, Nepal Rastra Bank ( central
bank), Siddhartha bank ltd ( development bank)and standard chartered bank ( commercial
bank) to collect information about human resource management practice and have
dedicated first phase of its background with meaning of banks history of banks in Nepal.
In second phase researcher have described about human resource management and its
functions. Similarly on the third phase researcher have analyzed HR department, training
& development, compensation, recruitment practices in Nepalese banking sector.
3.2 Conclusion
The Banks in Nepal are using a complex set of HR practices. It is difficult to summarize
in one context. Nepalese banks are concerned toward human resource management.
In conclusion, I found that HR practice in Nepal is not as good as it should be. In this
report I analyzed the bank NRB, SBL and SCB as references for collecting data for this
report and I found that in those bank still HR are not fully taken as assets. Among these
SCB bank has adopted western HR practices which is quite impressive and which is
equally motivating to employees.
Its only three banks which I have went through for information that’s why it is not fully
dependable and applicable for overall bank in Nepal.
29
BIBLOGRAPHY
Adhikari, D.R. (2004). “Human Resource Environment in Nepal”.
Aarthik Abhiyan National Daily : 2073 Shrawan 13 Thursday
Figure:1, Concepcion Rodil Martires,1991
Website
-www.google.com
-www.abhiyan.Com.np/article – 5 page 14 march
30
LIST OF QUESTIONS
Questionnaire has been set for both employees and employers point of views.
Employer engagement questionnaire
Q1. What opportunities are employees getting in your organization to
develop job-related knowledge and skills?
a) Training
b) self assessment
Q2. How proactive is management to provide training opportunity for
employees?
a) very proactive
b) moderate proactive
c) Little proactive
Q3.which source you commonly preferred in recruitment and selection
Process?
a) Internal
b) external
c) Both
Q4. How you motivate your employee?
a)compensation
b) reward
Q5. What types of orientation or training do new employee received?
a) On the job
b) off the job
31
Q6. What determines raises and promotions?
a) Performance
b) work potential
c) Both
Q7. What are the points that are looked while employing people?
a) Experienced
b) Bright, young graduate
Q8.what do you think is the most effective motivator of employees?
a) Compensation & benefits
b) promotions
c) Rearwards
Q8. What employee benefits does the bank mostly offer?
a)Health care
b) workplace flexibility
Employee engagement questionnaire
Q1. Considering everything, how satisfied are you with your job?
a) Very satisfied
b) somewhat satisfied
C) Neutral
d) somewhat dissatisfied
e) Very dissatisfied
Q2. Have you been often praised for your work?
a) Definitely
b) sometimes
C) Rarely
Q3.Do you have good communications with your manager?
a) Yes, very good
b) strictly business
C) Not a good one
32
Q4. What types of training you like to receive?
a) On the job
b) off the job
Q5. Are you satisfied with the information you received from management on what is
going
on in your division?
a) Very satisfied
b) somewhat satisfied
c) Very dissatisfied
d) somewhat dissatisfied
33