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Design and Implementation of OD Interventions

A Comparative Study in Public Sector Bank and Private


Sector Bank
Abstract
A rapidly changing economic environment characterized by globalization, deregulation of market
,changing customer and investor demand and ever increasing competition has become a real
todays organization resulting in tremendous pressure on organizations to
order to survive and sustain. Organizational change and
several intentional and planned change
for overall organizational
organization

challenge for

generate equally fast responses in

transformation triggered by a relevant shift leads to

across organizations which is called Organizational development

health and effectiveness by changing the attitude, beliefs, values and structure of

so that people can adopt to new culture, systems and processes ,technologies and structure and

the associated issues and challenges In the last one decade Indian industries across sectors have tried
level best to think and act global managing several tecno-structural, Human
Interventions , Financial sector and Banks are no exception to this
present paper would highlight on OD Interventions in

Resource

change process.

and

their
Strategic

With this backdrop the

financial sector with special reference to Banks,

Introduction and overview :


Organizational development is a long range effort to improve organization's problem solving and
renewal processes, particularly through more effective and collaborative management of
organizational culture, often with the assistance of a change agent or catalyst and the use of the theory
and technology of applied behavioral science. Organizational Development (OD) is the process of
improving organizations. The process is carefully planned and implemented to benefit the
organization, its employees and its stakeholders. . Objectives OD differs from traditional consulting
because client involvement is encouraged throughout the entire process. The ways in which people
communicate and work together are addressed concurrently with technical or procedural issues that
need resolution.
Importance of Organization Development Across Sectors

Profitability, productivity, morale and quality of work life are of concern to most organizations
because they impact achievement of organization goals. There is an increasing trend to maximize an
organization's investment in its employees. Jobs that previously required physical dexterity now
require more mental effort. Organizations need to work smarter and apply creative ideas The
effective organization must be able to meet today's and tomorrow's challenges. Adaptability and
responsiveness are essential to survive and thrive across sectors and business sectors in the fast
changing business environment characteristic by globalization and Information explosion.
Todays organization are trying hard to trade off between different stakeholders especially internal
customers on the one hand and external customers on the other. The work force has changed.
Employees expect more from a day's work than simply a day's pay. They want challenge, recognition
a sense of accomplishment, worthwhile tasks and meaningful relationships with their managers and
co-workers. When these needs are not met, performance declines.
Today's customers demand continually improving quality,quick product or service delivery; fast turnaround time on changes, competitive pricing and other features that are best achieved in complex
environments by innovative organizational practices. Organizations in this context use planned
strategy like OD interventions and there by sustaining and improving organization's capacity to handle
crucial aspects such as improved interpersonal and group processes, more effective communication,
enhanced ability to cope with organizational problems of all kinds, more effective decision processes,
more appropriate leadership style, improved skill in dealing with destructive conflict, and higher levels
of trust and cooperation among organizational members.
These objectives stem from a value system based on an optimistic view of the nature of man that
man in a supportive environment is capable of achieving higher levels of development and
accomplishment. Essential to organization development and effectiveness is the scientific method
inquiry, a rigorous search for causes, experimental testing of hypotheses, and review of results.
Organizational Development Interventions
Organizational development interventions is a sequence of activities, actions and events intended to
help an organizations improve its performance and effectiveness. Interventions design derives from
careful diagnosis and is meant to resolve specific problems and to improve particular areas of
organizational functioning identified in the diagnosis. Organizational development interventions very
from standardized program's that have been developed by many organizations to relatively unique
program featured to a specific organization or department.
.
Designing organization development interventions requires paying careful attention to the needs and
dynamics of the change situation and crafting a change program that is consistent with the different
criteria of effective interventions. Usually organization development interventions are designed to fit
the needs of the organization are usually based on knowledge of intended outcomes and transfer
competence to manage change through organizational members. Intervention design involves
understanding situational contingencies such as individual differences among organizational members
and dimensions of change process itself.
Over all four key organizational factors readiness for change, capability to change, cultural context
and capabilities for the change agent affect the design and implementation of almost every
intervention. The different types of organization development interventions are basically classified
into 4 different types such as :
a)
Human process interventions
b)
Technostructural interventions
c)
Human resource management
d)
Strategic interventions

Objective of the study 1. the objective of the study is to conceptualize Organizational Development and Organizational
Development Interventions
2. to delineate the importance of OD practices for organizations across sectors in changing
business environment
3. to critically analyze the transformation process undergone using OD interventions in one
leading private sector bank i.e ICICI and one leading Public Bank i.e State Bank of India

Banking in India
Banking in India originated in the last decades of the 18 th century. The oldest bank in existence in
India is the State Bank of India, a government-owned bank that traces its origins back to June 1806
and that is the largest commercial bank in the country.
Currently, India has 88 scheduled commercial banks (SCBs) 27 public sector banks (that is with the
Government of India holding a stake), 31 private banks (these do not have government stake; they
may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined
network of over 53,999 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating
agency, the public sector banks hold over 75 percent of total assets of the banking industry, which the
private and foreign banks holding 18.2% and 6.5% respectively.
Private Sector Banks in India
Initially all the banks in India were private banks, which were founded in the pre-independence era to
cater to the banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of
Bombay, and Bank of Madras, merged to form Imperial Bank of India. In 1935, the Reserve Bank of
India (RBI) was established and it took over the central banking responsibilities from the Imperial
Bank of India, transferring commercial banking functions completely to IBI. In 1955, after the
declaration of first-five year plan, Imperial Bank of India was subsequently transformed into State
Bank of India (SBI).
Following this, occurred the nationalization of major banks in India on 19 July 1969. The Government
of India issued an ordinance and nationalized the 14 largest commercial banks of India, including
Punjab National Bank (PNB), Allahabad Bank, Canara Bank, Central Bank of India, etc. Thus, public
sector banks revived to take up leading role in the banking structure. In 1980, the GOI nationalized 6
more commercial banks, with control over 91% of banking business of India.
In 1994, the Reserve Bank of India issued a policy of liberalization to license limited number of
private banks, which came to be known as New Generation tech-savvy banks. Global Trust Bank was,
thus, the first private bank after liberalization; it was later amalgamated with Oriental Bank of
Commerce (OBC). Then Housing Development Finance Corporation Limited (HDFC) became the
first (still existing) to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up
a bank in the private sector.
At present, Private Banks in India include leading banks like ICICI Banks, ING Vysya Bank, Jammu
& Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank, SBI Commercial and International Bank,
etc. Undoubtedly, being tech-savvy and full of expertise, private banks have played a major role in the
development of Indian banking industry. They have made banking more efficient and customer

friendly. In the process they have jolted public sector banks out of complacency and forced them to
become more competitive.
ICICI
History
ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion (US$ 100 billion)
at March 31,2008 and profit after tax of Rs. 41.58 billion for the year ended on March 31, 2008.
ICICI Bank is the second amongst all the companies listed on the Indian stock exchanges in terms
of free float market capitalization. The Bank has a network of about 1,308 branches and 3,950
ATMs in India and a presence in 18 countries. The Bank currently has its subsidiaries in the United
Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain, Hong Kong, Sri
Lanka, Qatar and Dubai International Finance Center and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia
Vision
''To be the leading provider of financial services in India and a major global bank."
Mission- Mission of ICICI Bank is to be

the banker of first choice for our customers by delivering high quality, world-class products
and services.
expand the frontiers of our business globally.
play a proactive role in the full realization of India's potential.
maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
maintain high standards of governance and ethics.
Contribute positively to the various countries and markets in which we operate.
Create value for their stakeholders.

OD Interventions in ICICI Bank


In 1955, seven years since India had become independent, it was also the time to rebuild the nation
and industrialization was the only way forward. It was at this time that with the initiative of the World
Bank and the Indian government, that the Industrial Credit and Investment Corporation of India,
ICICI, was formed. Sixteen years later in 1971, to give a new lease of life to its rather nondescript
existence, the corporation hired a batch of young business graduates. Among them, was 24-year-old
Kundapur Vaman Kamath; fresh out of management school in Ahmadabad. In time, Kamath would
redefine banking in India and become a legend in his own right. Man galore-born Kamath joined the
Project Finance Division of ICICI as a management trainee in 1971. A quick learner, Kamath
demonstrated his entrepreneurial skills early in his career and his sheer talent caught the attention of
the then chairman of ICICI, N Vaghu1. Kamath set-up new businesses in leasing, venture capital,
credit rating as well as handling general management position. Taking his responsibilities a step
further, he implemented ICICl's computerization pro gramme, which in later years would give ICICI a
huge competitive advantage. For 17 years, KV Kamath looked beyond the obvious to create value for
ICICI. In 1988, an opportunity came calling that would take him beyond the shores of India.
Managing Editor of The Smart Manager, Gita Piramal, told CNBC-TVI8, "Kamath was with ICICI for
17 years before he decided he needed a change. He went to Manila to. the Asian Development Bank,
and this was an absolutely critical turning point in his career. He learn t about new processes, how
emerging markets work, he learn t to deal on a global international scale and this was absolutely

important when he came back to India. He was with the Asian Development Bank for about eight
years before he got a call from his mentor." Chairman at ICICI Bank [Get Quote], N Vaghul, recalls,
"Within a few months of my joining I had interacted with Kamath. Kamath was at that time in the
leasing department and I had more or less made up my mind that he would be my successor."
By 1994, the impact of the economic reforms initiated by the Narasimha Rao government were
beginning to show, albeit rather slowly. The same year, ICICI Limited had set up its subsidiary - ICICI
Bank. Two years later, in 1996, Vaghul's protege KV Kamath rejoined ICICI as its new Managing
Director and CEO.

Strategic Interventions and Techno-Structural Interventions in ICICI


Kamath immediately initiated strategic initiatives and structural changes across the ICICI Group that
helped redraw its boundaries and take it to the next level. MD & CEO, ICICI Bank, KV Kamath says,
"An organization, which is 40 years old, you need to move some people into some positions, in which
you think they would be better of and that's what was on top of my mind."
1)

Kamath's immediate priority after his return was to create new operations in the
organization(Strategic intervention)and more importantly, to tap new markets. He introduced
flexibility in the bank's functions and shaped them to respond to new market reactions. The
company was now laying the foundation to become a financial powerhouse, but Kamath had a
mammoth task ahead. Piramal explains, "Kamath had a daunting assignment to get a banking
license. This was a very important moment because the Indian government had not issued
licenses since Indira Gandhi had nationalised banks. But at this juncture, the government did
issue licenses and there was a mad scramble for them. Amongst those who managed to get it the Times Group, the Hindujas, Kotak and of course ICICI. But this was just the begilll1ing he had far bigger dreams. "

2)

The visionary banker saw an encashable opportunity in the retail banking space(Strategic
intervention). ICICI's strategy and product offering recognized the changing demands of a
growing middle-class. Deputy MD, ICICI Bank, Chanda Kochhar, says, "When we rolled out
the retail strategy in a big way -- that was again a huge change and therefore a hugely
enriching experience because at that time, the entire consumer finance business was very
nascent for the country as a whole. So, we really had to create a vision of what this business is
going to be like for the country and of course it was absolutely new for ICICI.

3)
Retail financing in the mid-1990s was an open field, with no major players and Kamath recruited a
young bunch of strikers who would score willl1ers for him. In 1997, ICICI became the first
Indian financial institution to go on line (Strategic intervention). At a time when word was
experiencing the dotcom boom, Kamath was quick to sense the shift in customer demands.
Fighting skeptics, Kamath went ahead with a plan to offer a multi-challl1el delivery system to
its customers. Starting with just 5,000 on line customers, ICICI today serves over 2.5 million
people on line. It opened the floodgates of a unique success story. By the end of the 1990s,
Kamath had chalked out ambitious plans to spruce up ICICI from within. Supported by an able
group of young aspirants who believed ICICI had places to go.!n September 1999, within three
years of taking over as the Managing Director and CEO of ICICI, KV Kamath
drew up aggressive plans for growth. That year, ICICI Ltd got listed on the New York Stock
Exchange, NYSE, the first ever Indian financial institution to go the American
Depositary Receipts, ADR rout The next year, ICICI Bank followed suit and its ADRs made
a debut at
$14 on the NYSE, at a premium of over 27% over its issue price of $11.
4)

Most significantly, it acquired Bank of Madhura (Strategic intervention) in 2001 at a time

when its own revenues stood at Rs 2,500 crore (Rs 25 billion) and that of the bank at Rs 100
crore (Rs 1 billion), it was time far the next courageous move.
The year 2002 was the landmark year for ICICI, the board of directors of ICICI and ICICI
Bank approved the merger of the parent company ICICI and subsidiaries like ICICI Personal
Financial Services Ltd and ICICI Capital Services Ltd, with yet another subsidiary ICICI
Bank.
In 2007 ICICI amalgamated the Sangli Bank, which was headquartered in Sangli, in
Maharashtra State, and which had 158 branches in Maharashtra state and another 31 in
Karnataka State. ICICI also received permission from the government of Qatar to open a
branch in Doha and from the US Federal Reserve to open a branch in New York city. ICICI
Bank Eurasia opened a second branch in St. Petersburg.
5)

The entire banking and financial operations of the group was bought under one roof. It was a
reverse merger(Strategic and Technostructural Intervention) and quite rare in corporate
India, where a parent company merged with its subsidiary and adopted the later's identity. KV
Kamath explains, "The bank was the entity into which ICICI Ltd went backwards into. You
did not then have to address the issues of regulatory clearance to do a whole lot of things
because the bank already had those approvals and that facilitated the whole process and that
was the critical reason. The other reason to use this route, was to clean up ICICI Ltd at the
time of the merger and the only way we could do it was, if ICICI Bank was the entity into
which ICICI Ltd merged. "
Soon after the merger, it was time for ICICI now in its new avatar ICICI Bank to takeoff and
wins new markets as well as look for horizons beyond the Indian seas.
In 2002, ICICI set up offices in New York and London.

6)

He introduced ATMs (Technostructural Interventions) across the country using current


technology as an enabler.ICICI Bank had experienced a growth rate of more than 180% in its
very first year and a separate majority owned company called ICICI Infotech supported the IT
operations of the banking section. But it was the innovative idea of introducing A TMs, that
tips the scales in their favour.
Kamath says, "To set up an ATM, you need three-four levels of redundancies. You set up
recycling, you have to have a lease line, a dial-up line and you are still not sure the ATM'
would work 94-95% of the time. Today, you have ATMs available 99.99% of the time. So,
there were these risks but we bet on technology. Piramal adds, Kamath found himself
sandwiched between State Bank of India and the foreign banks who had an excellent retail
presence. One of the ways is to meet the shortfall of being able to offer 'branch facilities, and
at that time ICICI had just 50 branches. To meet that shortfall, Kamath hit upon an absolutely
winning strategy and that was to install A TMs across the country."

With the turn of the millennium, ICICI emerged as the largest private bank in India and fueling
its growth was the untiring efforts of one man -- KV Kamath. He rightsized the organization,
expanded internationally and gave a fillip to its technology driven expansion plans, and then
Kamath set his eyes on making ICICI a universal bank.
He had a vision and it was to create an international banking experience in the country, which
would provide complete financial services to different classes of customers.
8)

For the first time ever, the rural community was included. (Technostructural and Strategic
Intervention) With the use of technology, the bank started tapping into the micro- banking
space in rural India, utilizing partnerships with multinational and local agricultural institutions.

Kamath repeated his earlier success with A TMs, when he introduced cross-selling in ICICls
banking system. He recognized the inconvenience faced by busy customers and brought in
direct selling agents, who would reach customers easily, identify prospects and initiate
dialogue. This not only helped ICICI deliver personalized banking facilities, but also changed
the banking experience in India forever.
"Several Indian corp orates are going overseas in acquiring businesses and expanding into the
global marketplace. Mr Kamath is a visionary and I do see that this will definitely have an
impact on the bank, as we go forward."
9)

Piramal says, "In all the different directions that it was growing, Kamath also had to look after
the legacy of the past. He had to streamline and right size the organization.
(Technostructural Intervention) It had 33 subsidiaries, he gradually brought them down step
by step from 33 to 24 and then 12 and he prepared the company for an IPO. This was an
absolutely critical testing time for Kamath. "
In December 2005, ICICI Bank announced its initial public offer to the Indian market and
amassed over Rs 80 billion. With a very well defined roadmap, ICICI Bank soon put in place,
a formidable plan for its future. With its current asset over Rs 250,000 crore (Rs 2,500) billion
and a net profit of over Rs 2,500 crore (Rs 25 billion), with a network of 614 branches and
over 2,000 A TMs, ICICI Bank has left its competition years behind.
Kamath's contribution to cutting edge innovations in the banking sector will soon
recommence, and as if to acknowledge the years of dedication he has put in to making sure
that ICICI Bank stands at the apex -- in 2001, he was named the Asian Business Leader of the
Year. A fitting finale one would say. . . but there just might be more coming from him.

Few Others Structural Changes and Interventions in ICICI


ICICI was a part of the developmental finance institutions (DFI's) who were the sole providers of the
long term funds to Indian industry. But in 1990, the corporate were allowed to raise funds abroad,
putting an end to DFI monopoly. At this time Kamath who had been away from ICICI returned. ICICI
had limited expertise, with its key activity being the disbursement of loans to big clients like reliance
industries and Telco. It was neither a low cost player-and nor was a differentiator in terms of customer
service. Kamath wanted ICICI to become a one stop shop for financial services. He identified the
problem as company's ignorance of lending practices in new sectors. Change program initiated within
the organization involved the creation of infrastructure group, Oil and gas group, planning and
treasury dept, structured product group. This was done as the lending practices were quite different for
all these. People for each dept were picked. Following were the problems that cropped up:

As the new groups took a tasks, major work along with good talent shifted their, while the
importance of zonal offices diminished. People found it difficult to be noticed in the zonal
offices. Some of the people who did not fit in this set up left the organization. Thus resistance
to started at ICICI.

Also if the same customer had different requirements he had to approach the 3 depts
separately, which was time consuming and chances of losing the customer were also there. So
ICICI set up another 3 new dept: major client grp, growth client group, personal finance grp.
Now customer talked only to the representative in his Grp. Who would do the rest of finding?

Customers were happy by this, but not the people in the organization. They said working in
MCG offered better exposure and bigger orders than GCG. Thus ICICI was blamed for not
putting in place adequate system to develop people.

Its feedback system was also questioned as it was not transparent

Thus Kamath also undertook initiatives to counter them. They were:


1)

Human Process Intervention- improve imparting new skills to existing employees, training
programs and seminars were conducted by external agencies, in-house training programs were
conducted, Officers nominated for overseas training programs and ICICI introduced a twoyear graduates' management training programme.

2)

Human Resource Management Intervention-Set up the right reward system:


i)
Managementt ensures rewards were related to group performance and not individual
performances.
ii)
Method of selecting star performer was made transparent

3)

Human Resource Management Intervention-Review Compensation Structure 2 types of


remuneration:
i)
Contract basis (for risk- takers)
ii)
Tenure based (for those who wanted security)

4)

Human Resource Management Intervention-Feedback Process Reviewed A 360 degree


appraisal system was put in place.
The results of the OD Interventions were:

Employee unrest gradually turned to a relaxed atmosphere in the organization.

ICICI emerged as a second largest financial institution in India with assets worth RS.
582bn.

5)

Human Process and Human Resource Management Intervention-In Dec. 2000, ICICI
merged with Bank of Madura (BOM).Though ICICI bank was nearly three times the size of
BOM, its staff strength was only 1400 as against BOM'S 2500.There were:

Large differences in profiles, grades, designations and salaries of personnel in the two
entities.

Uneasiness in BOM'S employees to push up productivity.

BOM not sure whether their rural branches would continue or not.

Working cultures different.

To counter these problems, Kamath:

Paid special attention to facilitate smooth cultural integration.


Appointed consultants-Hewitt associates to help in working out a uniform
compensation and work culture.

Conducted an employee behavioral pattern study to assess the various fears and
apprehensions that employees had.

Fear of the unknown was tackled with adept communication and fear of inability to
function was addressed by adequate training.

Formulated a HR blueprint to ensure smooth integration of the human resources.

To ensure employee participation, management established clear communication


channels throughout to avoid any kind of wrong msg. being sent across.

Management mt. also worked on contingency plans and initiated direct dialog with the
employee
unions of the BOM to maintain good employee relations.

The results of the intervention were:

Process of integration between ICICI and BOM was started.

Promotion schemes for BOM employees were initiated.

By the end of the year, ICICI seemed to have successfully handled the HR aspects of

the BOM merger


Summary and Critical Appraisal of Transformation Process at ICICI
.

Organizational development has a strong value orientation with belief in humanism,


democratization, employee participation and multi dimension approach to individual and
organizational effectiveness.

ICICI Bank under the leadership of Mr. K.V. Kamath brought some dynamic changes in their
organization from man management to bringing, new innovation to their organization, which
helps ICICI Bank to serve its customer in a better way and thus helps in expanding its
business. Thus a leader is required to bring about changes holistically in an organization.

All interventions and changes should be in line with the bank's mission and vision.

Role of HR i)
Banking by its nature is an information (intensive) and human capital intensive
industry.
ii)
The efficiency of the employees of a bank on this notion can be summarized by the
ratio of the deposits plus advances (the turnover) per employee. So HR has to play an
important role.
iii)
With so much of global interaction among banks, HR comes into the lead to facilitate
change management.
iv)
In ICICI, the role of HR department is more of a profit center. At the core of this
achievement is the forecasting technique used by the HR team, which seeks to achieve
accurate results each month.
v)
Industry analysts estimate that this could amount to a saving of over Rs 100 crore a
year.
vi)
The bank's HR team forecasts attrition by doing three things. In the third week of every
month, it holds a forecasting meeting where projections are made for resource needs
for the following three months. Accordingly the bank plans strategies and goes in for
changes.

OD Interventions in Public Sector BankBanking Sector in IndiaBanking in India originated in the last decades of the 18th century .The oldest
bank in existence in India is the State Bank of India, a government -owned bank that traces its origins
back to June 1806 and that is the largest commercial bank in the country .Central banking is the
responsibility of the Reserve Bank of India ,relegating it to commercial banking functions .After
India's independence in 1947 ,the Reserve Bank was nationalized and given broader powers .In 1969
the government nationalized the 14 largest commercial banks;the government nationalized the six next
largest in 1980.
Currently ,India has 88 scheduled commercial banks (SCBs) -27 public sector banks (that is with the
Government of India holding a stake ) ,29 private banks (these do not have government stake ; they
may be publicly listed and traded on stock exchanges ) and 31 foreign banks .They have a combined
network of over 53,000 branches and 17,000 ATMs .According to a report by ICRA Limited ,a rating
agency the public sector banks hold over 75 percent of total assets of the banking industry ,with the
private and foreign banks holding 18.2% and 6.5% respectively.
Evolution of SBI
The origin of the State Bank of India goes back the decade of the nineteenth century

with th establishment of the Bank of Calcutta in Calcutta on 2 june 1806 .Three years later the bank
received its charter and was re-designed as the Bank of Bengal .A unique institution ,it was the first
joint -stock bank of British India sponsored by the government of Bengal .The Bank of Bombay (15
April 1840) and the Bank of Madras (1july 1843) followed the Bank of Bengal .These three banks
remained at the apex of modern banking in India till their amalgamation as the imperial Bank of India
on 27 January 1921.
Primarily Anglo-Indian creations ,the three presidency banks came into existence either as a result of
the compulsions of imperial finance or by the felt needs of local European commerce and were not
imposed from outside in an arbitrary manner to modernize India's economy .Their evolution was
,however ,shaped by ideas culled from similar developments in Europe and England ,and was
influenced by changes occurring in the structure of both the local trading environment and those in the
relations of the Indian economy to the economy of Europe and the global economic framework.
BusinessThe business of the banks was initially confined to discounting of bills of exchange or other
negotiable private securities ,keeping cash accounts and receiving deposits and issuing and circulating
cash notes .Loans were restricted to Rs one Lakh and the period of accommodation confined to three
months only .The security for such loans was public securities ,commonly called Company's Paper
,bullion ,treasure ., plate ,jewels ,or goods not of a perishable nature and no interest could be charged
beyond a rate of twelve percent .Lending against shares of the banks or on the mortgage of houses
,land or other real property was ,however ,forbidden . But the main function of the three banks ,as far
as the government was concerned ,was to help the latter raise loans from time to time and also provide
a degree of stability to the prices of government securities .
Human Resource Management InterventionHRM interventions focuses on personnel practices used to integrate people into the organizations.
These include career planning ,reward system ,performance appraisals etc, managing work force
diversity etc.
The appraisal is a yearly based and it is done through MBO , balanced score -card ,feedback ,360
degree appraisal etc .SBI is in a process of adopting an open PMS system but till the time it is
followed it will follow the traditional system of appraisal .On the following characteristics an assessor
is assessed in a traditional system

Intelligence
Job knowledge
Initiative and resourcefulness
Supervision
Business capacity
Dependability
Relation with junior and senior colleagues

Training at SBI
With four national level Apex Training Colleges and 54 learning Centers spread all over
the country the Bank is continuously engaged in skill enhancement of its employees . Some of the
training program es are attended by bankers from banks in other countries . According to a press
release ,the bank said it has 46 staff training centers spread across the country ,were focused on
creation and development of skills relevant to all aspects of banking . Training system is synchronized
with the corporate objectives .Delivery of training is done through practical oriented pro-grammes ,on
the job related needs ,etc . Proper selection of trainers and trainees is very important as it is necessary
for all level of employees from their entry till retirement .Training period is of 36-108 hours per
year .Training colleges/cent res are put up in every circle . There is also is a systematic evaluation of

the training on the employees.


Techno structural Intervention:Technostructural intervention focus on improving the organizational effectiveness and
human development by focusing on technology and structure .These interventions are rooted in the
fields of engineering ,sociology and psychology ,combined with socio -technical systems and job
analysis and design These types of interventions rely on a deficit based approach; the idea is to find
problems to solve Technostructral approaches focus on improving an organization's .technology and
structure includes-organizational structure ,organization systems ,business process redesign ,space and
physical settings ,socio -technical systems ,change management ,job design / enrichment
,competency -based management ,knowledge management and organizational learning .The Bank is
changing outdated front and back end processes to modern friendly processes to help improve the total
customer experience .
Strategic Interventions ;Strategic interventions contribute to align the organization with its environment. These
interventions link the internal functioning of the organization to the larger environment ; transforming
the organization to keep pace with changing conditions .Strategic intervention help organizations to
gain a better understanding of their current state ,their environment ,that allow them to better target
strategies for competing or collaborating with other organizations. The bank is entering into many new
businesses with strategic tie ups -Pension Funds ,General Insurance ,Custodial Services ,Private
Equity ,Mobile Banking ,Point of sale Merchant Acquisition ,Advisory Services ,structured products
etc- each one of these initiatives having a huge potential for growth. It is consolidating its global
treasury operations and entering into structured products and derivative instruments.
Alliances and Tie -Ups
To boost its business, SBI entered into several alliances and tie -ups with automobile ,insurance
,mutual fund ,project finance and medical equipment companies .
-Auto FinanceUnlike other competitors that relied on reduced interest rates to get business ,SBI extended
the tenure of car loans from five to seven years ,there by lowering the monthly debt repayment burden
of the loan seeker .burden of loan seeker .SBI entered into a tie up with Maruti ,the largest
automobile manufacturer in India ., to provide loans for for purchase of Maruti cars at the rate of
10.05 percent and 11.25 per cent for three years and above three years respectively. Maruti vehicles
financed grew by 17 percent in the fiscal 2003-04 over 2002-03.
The Marketing Initiatives
SBI carried out various marketing initiatives to enhance its reach .They
included segregating and targeting existing high value customers ,cross sales of other products ,setting
up call centers and outbound sales force to secure new customers .Plans were also made to utilize
database marketing to pursue large and medium sized corporate ,government and trade finance
customers .SBI also introduced various other ways of reaching out to customers like extension of
hours of work and aggressive marketing through print and television media .SBI increased daily
working hours by two hours and Sunday banking was introduced.
Techno structural in detail
Liberalization of the Indian Banking Industry
Private sector banks made their first appearance in January 1993.During that period ,PSBs accounted

for over three-fourths of total banking industry assets. New banks ,especially in metro cities and
urban areas .The PSBs found it increasingly difficult to come with the new private sector banks and
the foreign banks .These banks also employed state of art technology ,which helped them to save on
manpower costs and concentrate on providing better service.
The Restructuring
To overcome the intense competition from private and foreign banks ,SBI planned a
major organizational restricting exercise .The key aspects involved redesigning of branches ,providing
alternate channels ,and focus on lean structure and technological up gradations .A business process re
engineering (BPR) team was constituted in June 2003 with Mc Kinsey and company as consultants
.The BPR s basic goal was to create an operating architecture that would facilitate service delivery of
international standards.
Developing
The State Bank Academy(SBA) formerly known as State Bank of College was set up at
Gurgoan on 18th Nov 1982 .It is a center of training middle and senior management officials of the
State Bank Group and other organizations in India and abroad .SBA has imparted training over 19000
managers during the past 5years .To this end ,it has designed and launched an institution wide elearning programmes to be used by managers at various branches of the bank .Implementation of SAP
and ERP was done .In a recently concluded mass internal communication programme termed
Parivartan the Bank rolled out over 3300 two day workshops across the country and covered over
130,000 employees in a period of 100 days using about 400 trainers to drive home the message of
change and inclusiveness .The workshops fired the imaginations of the employees with some other
banks in India as well as other Public Sector Organizations seeking to emulate the programme.
Institutionalize
The purpose of this program me was to explain to the employees why change is necessary
with examples of transformations of other organizations .Feedback from different employees was
taken .Customers of SBI have experienced positive change whenever they visited the branch .They are
sure that theyll be welcomed courteously ,greeted with a smile and attended promptly .This has
increased the market share of this bank
Summary and Critical Appraisal of Transformation Process at ICICI
.

Organizational development has a strong value orientation with belief in humanism,


democratization, employee participation and multi dimension approach to individual and
organizational effectiveness.

ICICI Bank under the leadership of Mr. K.V. Kamath brought some dynamic changes in their
organization from man management to bringing, new innovation to their organization, which
helps ICICI Bank to serve its customer in a better way and thus helps in expanding its
business. Thus a leader is required to bring about changes holistically in an organization.

All interventions and changes should be in line with the bank's mission and vision.

Role of HR i)
Banking by its nature is an information (intensive) and human capital intensive
industry.
ii)
The efficiency of the employees of a bank on this notion can be summarized by the
ratio of the deposits plus advances (the turnover) per employee. So HR has to play an
important role.
iii)
With so much of global interaction among banks, HR comes into the lead to facilitate
change management.
iv)
In ICICI, the role of HR department is more of a profit center. At the core of this

v)
vi)

achievement is the forecasting technique used by the HR team, which seeks to achieve
accurate results each month.
Industry analysts estimate that this could amount to a saving of over Rs 100 crore a
year.
The bank's HR team forecasts attrition by doing three things. In the third week of every
month, it holds a forecasting meeting where projections are made for resource needs
for the following three months. Accordingly the bank plans strategies and goes in for
changes.

Summary and Transformation Process at SBIState bank of India earlier known as empirical bank has provided its existence
through introducing various innovative schemes and that also are considered as competitive in present
market .At the same time we conclude that they need to focus on the human resources in order to
achieve the maximum market share.

Conclusion
The banking sector is one of those sectors of the economy which has seen a plethora of changes
ranging from technology to human resources. The magnitude of change has varied according to the
strength, stability, operations and outreach of the institution. Organization Development not only as
an initiative by the HR but as a process involving the whole banking organization has utmost
importance and indispensability. As has been analyzed in the paper changes are brought about in banks
to increase efficiency and thus its proper implementation is a pre-requisite to reap the benefits of the
change. No organization can survive without change and transformation as change is the only costant
these days so are banks. All banks keeping in mind the competition and need to succeed plan for
change accordingly and take minutest detail into consideration to generate strategic outcomes out of it.
Therefore, one can say that organization development is an integral practice of banking sector and
requires appropriate design and implementation of different type of interventions taking both
internal and external customers in to view for their continued success and glory.

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