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HRD of CBI; Exploring and Recommending

A quantitative short research

Authorized: Ali Haj Aghapour(DBA candidate)


Student Id: 1101600894
Lecturer: Dr. Maniam Kalianan

2011©

CBI in a snapshot

"BANK MARKAZI JOMHOURI ISLAMI IRAN" is the central bank of the


Islamic Republic of Iran. The Central Bank of Iran (CBI) was established in 1960
(1339 solar year). As stated in the Monetary and Banking Act of Iran (MBAI),
CBI is responsible for the design and implementation of the monetary and credit
policies with due regard to the general economic policy of the country. Four
major objectives of CBI as stated in the MBAI are:

Maintaining the value of national currency


Maintaining the equilibrium in the balance of payments
Facilitating trade-related transactions
Improving the growth potential of the country
To achieve the objectives as stated in the MBAI, CBI is endowed with the
responsibility of fulfilling the following functions:

Issuance of notes and coins


Supervision of banks and credit institutions
Formulation and regulation of foreign exchange policies and transactions
Regulation on gold transactions
Formulation and regulation on transactions and inflow/outflow of
Domestic currency

As banker to the government, the CBI is mandated to keep government


accounts, grant loans and credits to state enterprises and agencies. The CBI also
covers such functions as lending facilities to banks, purchase and sale of
government participation papers as well as other legal banking operations.

After the Islamic Revolution of Iran laws and regulations pertaining to money
and banking institutions and monetary policy design and implementation were
amended to reflect the priorities and principles as set out in the Constitution of
the Islamic Republic of Iran. At present, CBI is responsible for the design and
conduct of monetary policy within the context of government's five year
development plan and annual budget. These crucial responsibilities make a
strategic approach within CIB. However, this paper tries to investigate HRD
which needs to be considered to enhance these responsibilities.

Methodology

In the context of this quantitative research, secondary data and Interview are
chosen to collect information. In detail, after gathering some focused imperial
literatures as well as preparing A pre-tested questionnaire including 16 pre-
designed questions will be used to explore and investigate through its 3 main
management levels.(more info: http://www.scribe.com)
Organizational Structure
Invariably, human resource management (HRM) issues have been major concern
for managers at all levels, because they all meet their goals through the efforts of
others, which require the effective and efficient management of people (Dessler et
al., 2000).
The central Bank of Iran (CBI) as a bureaucratic firm with 6 Vice Governors,33
General Directors, 55 Directors, and approximately 3500 employees, structurally
requests for a unique HRD format to effectively respond to the mass.
Figure 1 shows HRD in CBI:

Vice Governor

construction & Training & oreganization &


Wealth & social
installation human resources methods
General Diroctor
General Direct General Director director

Constrction
wealth director Traing Director
irector

purchase human resource


club director
direction director

Head of library

Figure1:HRD organizational chart(www.cbi.ir)


HRD Activities
Although HRD is not the sole dep which involves in designing, and implementing
of HR policies and HR practices, it’s known as the dep in charge. However,
Micheal(2006) defined these activities into 5 main categories.
To adjust this vast muddle into our case, scholar selected some of main activities
to investigate. Randall et al(2004) stated there are six critical activities which
normally most organizations involve:

1. Recruitment and selection


In terms of recruitment, there are three main steps- defining job, attracting
candidate, and selecting candidate.(tao,2010)
To define job, HRD usually employs “job description” and “specification”.
To select potential candidate, HRD use both direct and indirect methods based on
position.
-Operation level: out sourcing, testing, interviewing, assessing, and recruiting are
the prevalent methods to add a new member.
-Middle level: promoting, interviewing, and assessing.
-Top level: Promoting, and taking persons on deputation from Government.

To attract appropriate candidate, reviewing and evaluating alternative sources of


applicants, inside and outside the company, advertising, using consultant, will be
used in CBI.
2. Training and Employee Development
Excellent staff should have: First, high loyalty, company loyalty by recognizing
the company's values, to share weal and woe, and common development; second,
right attitude, initiative, and study to make improvements, work hard and willing to
do, know that they are doing, those things that do and should not do, great
development potential; Third, professional ability, can work independently, with
skill, and can continue to improve.
ICB has a banking institute to prepare knowledge-based employee. Also, based on
position and the results of personal’s assessment as well as job analysis, HRD will
design and implicate Training courses which are appropriate for both personal and
organizational development. Mostly, “on-the-job training “, “on-the-course
training”, and “membership in professional association” are utilized to train
employees.

3. Employee relation
CBI designs its relation with people according to “Labor Act” which is passed in
1954(katozian,2008) and level of employee.
-operation level: minimum vertical communication, maximum horizontal
communication, inter-dep relation, high-bureaucratic.
-Top level: participating in strategic decision making, more subjective than
objective, and less-bureaucratic.
-Middle level: fluctuated within this “less-high” domain.
To decrease this fatal gap between these levels,CBI has installed an Intranet to
improve communication.
4. Appraisal
In order to assess operational-level employees, “periodical assessment” will be
used by HRD. In this way, ask from any direct manager to fill up a pre-designed
questionnaire which will effect on job description, training programs, and
compensation.
-The result of training exams are effective in final score which leads to obtained
total advantages.
Middle-level and top-level employees are evaluated by their organizational
performance and the productivity of related Deps through organizational strategies
and goals as well.
5. Compensation & Reward

-The amount of salary is estimated by level of education, position, and assessment


-All employees and their closed relevant are covered by specifically internal
insurance
- CBI financially supports its employees to improve family welfare(loan,
guarantee, bones, sharing in net profit, accommodating qualified employees,
transportation)
- Annual & occasional ceremonies, holy day trips, and CBI club are some of
external motives (Sanayei el at,2008)which used to improve commitment .

Discussion & Recommendation

In terms of Recruitment & selection


-“Job description” and “job analysis” need to periodically be re-designs.it was
reviewed in 2000.
-In operational level, CBI must change its approach regarding selection. They must
take their own “entrance exam”. Also, they should add a psychological expert to
their interview’s team
-Related education must be recognized to obtain job vacancies, specially, those
graduated from the Banking Institute.
-based on management level, more creative attracting, and selecting methods must
be used, Specially, when rare skills are requested.

In terms of training and development


In the cyber Age, computer-based training courses would ease internal
communication even you are a bureaucratic firms with more than 3000 human
capitals.
-CBI must immediately introduce and promote people with their intra-net which
has been launched since 2007.
-CBI must try to drive training contexts to e-learning methods to achieve E-HRM
advantages.(Sanayie,2008)
-Preparing more Behavioral and managerial courses for supervisors and managers.
- CBI must try not only link High-level people to professional communities but
also executive level employees need to be linked based on their professions.
-HRM decision makers must become more “investment-oriented” regarding
personal and organizational Development.(Mello,2006)

In terms of evaluation

-CBI must periodically update its annual evaluation context


- CBI must prepare strategies leading to innovation and association
- E-appraisal will be facilitated when Intranet is became popular.(Sanayie,2008)
-during the assessment, “utilitarianism” must be considered to acquire efficient
results.(Mello,2006)

In terms of Reward
-CBI shouldn’t rely on financial forms of rewards, and must launch more
organizational rewards.
-CBI must design its compensation based on recognized Behavior theories.
-financial leverages misconceptions must be tried to be vanished.(Mello,2006)

Conclusion
I my point of view, although HRD of CBI is so interactive, it needs to be
characterized as a strategic and effective unit which is managing, organizing, and
developing Human capital toward making a sustainable competitive advantages
named “Human assets”. In order that the accumulation of multi-purposed activities
and internal policies must be periodically identified, practiced and evaluated
throughout an “Investment perspective”. In general speaking, whether organization
culture trends to a strategic recognition of HRM, many HR activities, such as
appraisal, selection, reward, and development, will diverge to prepare a unique,
committed human resource with adequate, accurate, and unduplicated skills.

References and Bibliography


- Katozian,M.(2008), Introduction to Iran Constitution(11th edition), Iran: Tehran
University Press
-Dessler, G. (2000), Human Resource Management,Usa: Pearson
-http:// www.cbi.ir
-http:// www.scibe.com
-Mallo, P.A.(2006), strategic Management of Human Resources(third edition),
Canada: South-Western

-Maro,n(2008),Human Resource Management in Cooperative Bank in India, in


Cab Calling, India

-Randall,S. &Susan,E. & Luo, Y.(2004),Managing Human Resources In Cross-


Border Alliances, London: EC4P 4EE
-Rauf,A.M.(2007),HRM sophistication and SME performance: a case of
readymade garment manufacturers and exporters in lahor, pakistan.(unpublished
doctoral degree), University of Twente, Netherland
-Sanayie,A. &Mirzaie,A(2008). Designing a model for evaluating the effectiveness
of E-hrm,Journal of Information science and technology,6(2),pp:79-98
-Tao,T.(2010), Toward understanding HRM in furniture company.(unpublished
bachelor’s degree),University of Gavle, Sweden