Introduction

In this writing, the human resources management practices, polices as well as strategies for Public Bank will be analyzed and investigated. For this purpose, three areas of human resources management will be discussed, namely: (a) HRM planning and implementation, (b) performance evaluation and reward system, and lastly (c) strategic human resources management (SHRM). Public Bank is chosen as the subject under studied because the author previously worked before in the bank subsidiaries in China. It is surprising that the bank has an excellent human resources management system – judging from the low employee turnover rate (when the turnover rate in other oversea banks in China is relatively much higher), and from the highly committed and motivated task force working in the bank.

The article will be arranged as follow. Firstly, a brief introduction to the background of Public Bank will be provided. Secondly, the relevant theoretical framework as literature in the context of human resources management will be discussed. Thirdly, personal observation as well as HR-related information elicited from the bank’s annual report will be presented. Then, discussions on the HRM practices in the bank will be carried out with respect to the existing literature in the subject of HRM. A summary will then be presented to outline the key success factors of the bank in the today competitive business environment.

Background of Public Bank

Founded in 1966 by Tan Sri Dato’ Sri Dr. Teh Hong Piow, Public Bank is known for its prudent management, strong profitability, stable leadership, strong asset quality, healthy capitalization and service excellence. A top-tier bank in Malaysia, Public Bank has the best overall financials among local banks. The fact that Public Bank is untouched by the US subprime crisis demonstrates its adherence to its prudent management and strong risk management. With a healthy balance sheet, Public Bank is the largest domestic bank in Malaysia by market capitalization and the third largest by balance sheet. The Public Bank Group employs close to 16,000 people – up from 14,000 in 2007 – with about 90% of the staff in Malaysia and the remaining spread across Hong Kong and the People’s Republic of China, Cambodia, Vietnam, Laos and Sri Lanka. The Public Bank Group is very focused on growing its market share in its retail lending and deposit-taking businesses in the Malaysian and overseas markets, while maintaining its prudent risk management and strong asset quality. The effectiveness of the Group’s business strategy rests with its proven ability to effectively execute its core business strategies and build a strong capability and capacity to innovate and offer a wide range of competitive financial packages to its increasingly demanding customers. All these are backed by a committed, motivated and hardworking taskforce in the bank.

Theoretical Framework & Literature Review

Introduction to Human Resources Management

Human resource management (HRM) refers to the activities a firm carries out to manage its human resources effectively (Ming, 2002). Generally, it is argued that HRM activities and context include determining human resource strategy, staffing, performance evaluation, management development, compensation, training and development, change management, labor relations and management of international expatriates in the global context (Beardwell & Claydon, 2007).

Importance of HRM

The importance of HRM in an organization cannot be denied. The success of implementation of strategies and tactics for a firm is highly dependent on the HRM of that particular company. Logically, people are the most basic element to the firm’s organization architecture and human capital is the sources of all types of competitive advantages (Dessler, 2011). Thus, to attain success for any organization requires that HRM policies be congruent and consistent with the firm’s strategy across all workforce and time period. Specifically, it is not uncommon to found that researchers have found strong fit between HRM practices or procedures with the desired or planned strategy is required for high profitability and enduring performance of a firm. In the long run, this is very critical because the relevancy and proper implementation of HRM policies is the source of sustainable and high productivity & competitive advantage in the global economy (Brewster et. al., 2007). Besides, in the later part, it will also be discussed on the factors determining the integration of HRM into the corporate strategy.

HRM Planning and Execution

HRM planning is a process that articulate the strengths and weaknesses of current HRM practices or policies, forecasts future demand for human resources that will meet the requirement of corporate business strategies, and implements strategies to ensure that sufficient human resources for the company growth and expansion in the future. Basically, there are three main steps in terms of HRM planning and execution process.

Step #1: Forecasting. Forecasting is important as it will determine the demand and supply of human resources and it is crucial to predict the job positions that will face either surpluses or shortages issues in the future.

Step #2: Goal setting and strategic planning. These tools define specific goals regarding a desired end and provide benchmarks for deter­mining the relative success of a program aimed at addressing labor surpluses or shortages. A specific timetable is set for when results should be achieved. The point should be clear that without planning by the organization, employees suffer the most, especially in a labor surplus because of layoffs and pay reductions.

Step #3: Program implementation and evaluation. Program implementation and evaluation are critical elements to ensure that an individual is held accountable for achieving the stated goals and has the necessary authority and resources to accomplish goals.

Performance Evaluation and Reward System

Effective performance management system is a very important element in managing a business for success (Brewster et. al., 2007). It is also a very important part of human resources management in implementing and ensuring the strategic directions of an organization is achieved. Effective performance management system has many roles and objectives in an organization. The critical evaluation, managers needs to realize that it is an effective performance management system. Generally speaking, the purpose is to improve staff performance. This program helps two-way communication, management development, consistent with the proper goal which directly related to the company’s core values and ability. It can express and support for training the professional development needs, establishing standards and reward (Price, 2007).

Besides, it is also worthy to mention that an effective performance management system is inter-connected with performance development discussions. To be effective, manager should always conduct quarterly performance development discussions (Zhao, 2002). If the comment for employee can often change, from the performance evaluation or one-sided statement, staff’s performance would be better. Quantity staff always knows their performance, and their next goal, puts forward a serious challenge. Of course, it is also common sense and often argued that effective performance management system is highly dependent on the reward system a company is pursuing. For this, in order to have an effective performance management system, managers and employer should understand the importance of designing an Effective compensation and recognition system award people for their contribution (Zhao, 2002). An effective compensation mechanism often overlooked some employees to emphasize the book in the literature. I think this is wrong. Usually it is not so much money, because it is about all kinds of rewards and recognition sending a message to people about their value. Money has become a metaphor. Thus, as mentioned above, monetary rewards may not be always attractive to a person. It is also very important for us to recognize that career prospect is also very important elements in having an effective performance management system (Price, 2007). Thus, we should aim to provide promotional/career development opportunities for staff. Supervisor has played an important role in helping employees in developing their potential. Development goals, changes and challenging tasks or responsibilities, and cross training to make new contributions to the development of more effective staff. To help create an environment, let a person feel comfortable experiment. If this is possible, people may enjoy working and become more participative in a company strategic direction, and thus, more willing to change their attitude and observe their own performance, which is critical to having an effective performance management system in the company (Zhao, 2002).

Strategic Human Resources Management System

Generally speaking, HRM contribute to the strategic orientation of business – The elements of mission and strategy, formal structure and HRM are interrelated and emphasizes that HRM is an important part of determining organizational strategy. This means that we cannot ignore HR in determining or planning our corporate strategy. However, sadly speaking; today, many organizations still view HRM in the context of housekeeping, hiring and paying and retiring staff. The HR is isolated from the long-term planning of the business (HR activities undertaken isolated from one another) HRM models (Zhao, 2002). The successful 21st-century organization will not take the loyalty of talented people for granted. It will constantly try to recruit and keep them. The mutual commitment of an employer and an employee will be one of the most important factors for a 21st-century organization. People are the common element in all social organizations. They create the objectives, the innovations, and the accomplishments for which organizations are praised. Looked at from the perspective of the organization, people are resources (Ming, 2002). They are not inanimate resources, such as land and capital; instead, they are human resources. Without them, organizations would not exist (Ming, 2002).

In sum, from the perspective of strategic HRM – HRM activities matches the demands of the changing environment. Among the important functions for this include: (1) HR planning and implementation of recruitment, retention, training and development program (2) Performance management: such as performance appraisal, (3) Reward management: value of excellent, performance, teamwork and quality, (4) developing a structure, culture.

Observations on Public Bank’s Human Resource Management

In the following section, several points on HRM practices, policies and strategies in Public Bank are outlined. All of these points are either obtained through personal observation, or through investigating the annual report of the bank.

HR planning and implementation of recruitment, retention, training and development program. The Public Bank has been executing this with excellent track record. It is found that they understand the importance of hiring right people. They put the right talent in the right place. Often, this means lesser problems in management in the later days. Of coz, not to mention that the company has also spent lot money in training up the human capital, as illustrated by the amount of money the company spends.

Performance management, appraisal, and reward management. We have lesser disclosure in this section from the company. However, as per observation, it is found that the bank is also implementing a successful and effective reward system. Essentially, the company rewards what they wish to shape the employee behaviors. To promote fast working ethics among employees, effective and efficient workers can get more increment and bonus in the company. This is a good HR practices (align the employees’ interest to the goals or the organization). Teamwork is somewhat important to the bank as well. We can see the bank often organize team building to ensure the team member understand each other in a better manner. According to the theory, this can enhance the relationship between the team members, and can create a team spirit in the organization. On the surface, the company is somehow successful in carrying out this task.

SHRM to develop a corporate value of excellent, performance, teamwork and quality, and a strong corporate culture. The bank definitely has a strong culture. Every time we enter the bank, we can feel the fast speed and customer oriented working ethics among the employees. The queue is rarely long, although the customers may be a lot. Public bank is found training the employees to be service oriented and have an attitude to work harder. The bank pays a slightly better premium to maintain the best talent in the organization. This strategy work well in the long run, as we can see how efficient the banking operation of the group has become recently.

Discussion & Recommendations

As per discussion in paragraphs above, with some personal experiences working in the bank, it is discovered that the HR practices in the company is very good. Generally speaking, it seems like there are very few issues exists, which we know about. From the annual report, especially, we can see that there are very little issues that had been caused by imperfect or failure in (a) HRM planning and execution, (b) performance evaluation and reward system and lastly (c) SHRM in the company. In fact, the SHRM in the company is very successful, and this lead to the growth and profitability for the company. The excellent implementation of the SHRM practices has indeed transform into effectiveness of the company.

Judging from the success of Public Bank, the human resources practices in the bank is worth investigating. In the following paragraphs, it is outlined several key success factors of the bank in the context of HRM.

Strategic rather than administrative. The HR management style in the bank is indeed having a strategic focus, rather than purely from the administrative mindset. The HR practices are designed in such a way that is consistent with the strategic direction intended by the entire organization. As this is already done pretty well in the organization, it is understood that if the bank wish to continue its first class position in this industry, the management must continuously conscious about this issue: align the strategic plan and HR practices in the future.

Strong linkage and business focus. As human is linked to the operation of the business; managing human must also consider the context and requirement of the business, and vice versa. Whatever strategy implemented by the bank must be supported by the HR practices and policies. Up to now, we can observe that the company is doing this with great success.

Build HR expertise in line managers. This is something not mentioned in the annual report. However, this can be very important. The line manager is the first person in contact with the lower level employees, and has daily operation knowledge. Thus, it is very important for these managers to know the critical issues of the SHRM. Only through this, they can immediately implement whatever strategies effectively, with fast to market response time.

Strong employee involvement. HR practices and strategic direction derivation should involve employee. As per knowledge from OB, employee involvement and participation is very important factors in affecting the employee’s motivation and satisfaction in an organization.

Assist the organization to attract the right quality and number of employees. This actions is already been done by the company. As long as the bank has good image and brand name, we can expect more and best talent will tend to apply to work in the company.

Develop, disseminate, and use job descriptions, performance standards, and evaluation criteria. This is not mentioned in annual report. However, somehow, a similar action and system is already implemented in the company, as per conservation with the employee.

Foster a safe, healthy and productive work environment. Human simply need a safe work place for them to perform well for the benefit of the organization. Strategic HR demands a safe working environment for workers, as minimum standards.

Help maintain a harmonious working relationship with employees and unions where present. Although the banks in Malaysia have not such kind of issues, the bank has been proactively treating the employee with great respect and sympathy. Example, during the high inflationary period, the bank relief the employees’ tension by lowering the interest costs.

Conclusion

By integrating human resources management (HRM) into the agency planning process, emphasizing human resources (HR) activities that support broad agency mission goals, and building a strong relationship between HR and management, agencies are able to ensure that the management of human resources contributes to mission accomplishment and that managers are held accountable for their HRM decisions. Human resources management alignment means to integrate decisions about people with decisions about the results an organization is trying to obtain. Many researches indicates that agencies that successfully align human resources management with agency mission accomplishment do so by integrating HRM into the agency planning process, emphasizing HR activities that support mission goals, and building strong HR/management relationships. In the future, we can safety say that that organization who understands the important of human capital, particularly its context and linkage to the strategic direction of a company, will beat the competition and achieve remarkable success in the very increasingly competitive market place. Public bank in our example above is a great example.

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