STATE BANK OF INDIA VRS CASE STUDY By: SAURABH AMBASELKAR
SBI SBI Grou Group p
SBI Introduction Public Company (60% Government-Owned) Incorporated: 1921 as the Imperial Bank of India Employees: 200,299 Total Assets: $104.81 billion (2003) Stock Exchanges: Mumbai, Kolkata, Chennai, Ahmedabad, Delhi, New York London Ticker Symbol: SBI NAIC: 522110 Commercial Banking
SBI Introduction The State Bank Group has 131 foreign offices in 32 countries across the globe. 21,000 ATMs and SBI group(including associate banks) has about 45,000 SBI has 26,500 branches, including branches that belong to its associate banks. SBI alone has 13,076 branches, including the branches of State Bank of Indore, as of 26 August 2010.
SBI Financials Revenue Profit Total asse ssets Total equity Owner(s) Employees
133,851 crore (US$29.05 billion) 11,733 crore (US$2.55 billion) (2010) US$ 323.0 billion (2010) US$ 18.5 billion (2010) Government of India 200,299 (2010)
SBI SBI Prod Produc ucts ts and Services Personal Banking SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Housing Loan Loan Loan Loan Against Against Shares Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme
SBI SBI Prod Produc ucts ts and Services Other Services Agriculture/Rural Banking NRI Services ATM Services S ervices Demat Demat Se Servic rvices es Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Vishwa Yatra atra Foreign Foreign Tra Travel vel Card Broking Services Gift Cheques
SBI VRS Case Approved by SBI board in Dec 2000. ±
FICCIs report
Cost cutting initiative ±
VRS
±
Increase its revenue from fee-based services.
Faced Protest ±
Face severe opposition on Feb 2001
Pros and Cons PROs Cost reduced. t he problem of overstaff. overstaff. Solution to the Explored new talent. CONs Loss of valuable Human resource. Acute manpower shortage. efficiency. Decreased efficiency. Increased the work load on existing workforce. Effect QWL. Adversely effect customer service.
Alt Altera erati tion on in VRS VRS sche scheme me REASON To restrict the out flow of HR. To maintain balance between workforce. work force. To reduced the work load. PROCESS Fixing Fixi ng age bar. bar. Restriction regarding eligibility criteria. CRITICISM Formation of SBIVRS optee optee officers officers Association. Association. Media verdict on SBI decision. Cost cutoff may lead to defame.
Consequences Shortage of Man power
VRS outcome
Increase workload
Stress Among employee
Reason
Required more Working capital
POOR HR POLICY
Reaso eason n For Revampi amping ng HR poli polici cies es Restoration of employee and existing talent. Loss of competent employee. Competence gain by the competitor. competitor.
Post ost VRS VRS Sc Scen enar ario io SBI merge with 400 loss making branches Redeploy additional man power Reduced regional office from 10 to 1 or 2 A single officer had to take care of 3 or 4 branches
Wha What could have been done. A good VRS, should be demographically aligned, based on age and competency profile of the employees, should have a clear-cut manpower plan and should be driven by keeping in mind future strategies of the business. Says HRD HRD consultant consultant J B Kabra Kabra of Mind Movers Movers Management Consultants, To nullify the psychological impact on employees lives, banks could have provided them with alternative means of employment. The optees optees could have have been employed employed alternatively alternatively in the co-operative sector banks, who constantly need staff who can work in shifts.
Wha What could have been done. One of the alternatives to VRS is the Sabbatical Scheme: here, the employees were allowed to go long leave without pay with an aim to cut costs. They were also assured help in getting jobs elsewhere. But this scheme raised issues about the promotion procedure for those who would return. Many returnees expected promotions to be on par with other colleagues.
Conclusion The VRS strategy show both the aspects of HR policy of SBI . It succeeded in decreasing the workforce which solve the problem of overstaffing ,on other hand it demoralized demoralized and demotivated demotivated the existing existing employee employee by increasing the work load and by hardening first rules.
Source: http://www.banknetindia.com/issues/bsvrs.htm http://www.slideshare.net/rubuna/ http://www.slideshare.net/rubuna/sbi-vrs-pol sbi-vrs-policy icy
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