Human Resource Management in Multinational Banks in Tanzania - Research Paper Example

? HRM Management Number: The concept of performance management is what stands between organisational success and failure. The case applies even to multinationals which are struggling to extend their hold in a foreign market. However remote or advanced a market or a business environment may be, an organisation must engage effective performance management to motivate its personnel, attract and retain the most desirable talents and skills, ensure continuity even in the face of personnel exit [through death, resignation or retirement], build internal organisational cohesion or even achieve the attainment of organisational goals and mission. In this regard, organisational stability, growth and success are fundamentally dependent upon effective performance management. This is because, effective performance management stretches beyond the realization of performance target, to embrace and embody crucial facets of organisational functions such as the inculcation of organisational vision, mission and goals into the organisational personnel and the integration of other synergies of organisational performance such as communication, finance, planning and accounting into a complex whole. 1. Diagnosing This Company and Identifying the Major Issues That Work Against the Concept of Performance Management The company in discussion is known as Citibank Ltd. At the beginning of the 21st century, Citibank as a US based financial organisation went to Tanzania to do business. Citibank had adopted global practices to facilitate the management of human resources management policies and organisational structures. The bank operated in three main branches in Tanzania, with these branches being distributed in Dar es Salaam, Arusha and Mwanza. Electronic banking, the issuance of monitoring credit card systems and the buying and selling of foreign exchange are some of the specialised financial products and services that Citibank has sought to dispense to Tanzanians. According to Beamish and Newenham-Kahindi (2007), one of the problems that Citibank has had to contend with in Tanzania is reconciling the self- contradictory need of thinking globally, while acting locally. Another impediment to Citibank’s use of performance management was the firm’s systematic interconnection of its personnel to its organizational structures. This made Citibank employees too tense to discharge their tasks effectively, because of the hierarchical tension. This situation is highly concomitant with a tense working environment which is a strong impediment to the attainment of organisational goals. In a separate wavelength, that Citibank employees almost always multitasked underscored the fact that the Tanzanian chapter of Citibank was significantly understaffed. This was also a setback to proper and effective ratification of performance management. Performance management portends the assigning of roles, duties, powers, privileges and benefits to an office in a hierarchical manner, and according to merit. Another serious setback to Citibank’s ability or prospects for using effective performance management is underscored by the firm’s failure to apply and use gender equality. In the Tanzanian chapter of Citibank, men and women are not treated equally. All receptionists of the three branches [Dar es Salaam, Mwanza and Arusha] were found to be female (Budworth and Mann, 2011). Likewise, proper HRM culture was treated as the last-resort function which is only applicable to the head office corporate culture. This state of affairs has left branch managers with very little room to make policy changes or to adapt to the prevailing norms in the local society. Because of this, there is also a failure on the side of branch managers to devolve essential HRM programs, so that all training programs in these three branches are directed from a single head office. Because of this, many Citibank employees have decried frustration, citing the failure of the firm to provide them with training and employee skills development programs for more than a year, as indicators of these frustrations. Stark (2007) and Van Dooren (2011) posit that Citibank also places a lot of emphases on western-style human resources management practices by using flexible systems, the right to fire and hire, short term employment, and promotion and downsizing. Although these practices may be seen as incentives which can provide employees with a great impetus to work harder, yet they may work against proper performance management by demoralising employees. First, the use of western-style in an African country may not be optimally appropriate because of differing work ethics between Westerners and Tanzanians. Secondly, short term employment opportunities and the firm’s right to hire and fire may inspire employees with fear by instilling among these employees, the fact that these provisions may be used arbitrarily against them. Citibank employees are also not allowed the autonomy to issue collective decision. This denudates the strength of positive contributions to the firm, as a group. 2. Diagnosing the Company and Identifying the Major Factors That Are Supportive of Implementing Performance Management Definitely, as is the case with other firms, there are factors which favour Citibank’s application and implementation of performance management. Among these factors is Citibank’s ability to integrate its departments, regional head offices and international branches to ICT and NSE-check systems. This enables faster and more efficient ratification of performance management. Again, it is important to know that because of the integration of Citibank’s branches and operations to effective communication systems, the firm has been able to furnish all its branches with diverse sources of information such as communal lounges. In these communal lounges, it is possible to catch up with international news from the CNN network, read newspapers and watch music videos and other entertainment programs on MTV-USA. Citibank’s organisational culture is also supportive to the effective implementation of performance management. Particularly, Citibank allows its employees an hour’s break to relax. Closely related to this organisational culture is the use of merit to apportion employees certain ranks. For instance, only employees with American accent are accorded with the opportunity to handle individual clients, given that most of Citibank’s employees are Americans. In this light, Citibank ensures that there is a process for socialising bank representatives and employees (Milica and Milos, 2013). In a closely related wavelength, it is important to take stock of the fact that Citibank issues grants to those who attend its recreational schemes and operations regularly. Likewise, Citibank branch managers call an individual employee into their offices to reward the same employee, instead of using group rewards. Conversely, Citibank also uses an employee-centred HRM policy. This policy makes a better working environment for employees, the preservation of work-related values and the enhancement of career development its chief aims, as the artifice to effective employee management. Citibank also gives employees an avenue for contributing ideas and a room for solving work conflicts through the HR department, since every one of the three branches of Citibank in Tanzania has employees who are fewer than one hundred. Question 3 From the information provided, this multinational seems to be doing well. This is underscored by Citibank having shown a cultural commitment to: issue competitive remunerations; observe meritocracy and bureaucracy; extend its branches in local and foreign markets; and to create a distinct organisational culture. Nevertheless, there are measures that Citibank can apply to have a more effective performance management system. First, there is need to have Citibank in Tanzania devolve essential HRM programs to allow training programmes in these three branches to be directed from a single head office. A single head office has more knowledge on its employees and how employees’ skills and talent can be used to either achieve the performance target or to seal the performance gap. The HRM department in the single head office will therefore also know how to effectively use workshop and training programs as a way of sealing performance gap (Shutler and Storbeck, 2002). It is also highly expedient that Citibank carries out recruitment exercises to ensure that it has an appropriate number of employees to avoid multitasking among employees. The recruitment exercise should be carried out based on merit, so as to grace Citibank with the most appropriate talents and skills. Following meritocracy will also extirpate chances for the gender imbalance which is clearly manifest in Citibank, particularly, in its reception. Citibank can also tamper its organisational hierarchy and bureaucracy with diverse modes of communication such as the open door policy and round table meetings. Other provisions such as suggestion boxes, internal and external memos and organisational parties can also go a long way to diffuse the employee-employer tension in Citibank. Just as Brumback (2011) and Chih-Ching (2012) recommend, Citibank can reconcile the need to think globally and act locally by using integrated systems. Herein, Citibank may integrate its systems and processes into a single complete framework which may be worked at, locally. These systems and processes include the vision, mission and goal statements, communication, finance and HR management, among others. Question 4 Just as Narasimhan (2004) and La Ferla (2006) postulate, in order to govern the performance management programme in this company effectively, it is needful that the roles, functions and powers of branch managers are devolved to essential HRM programs and units. This is to the effect that every branch will take charge over its performance management through the engagement of the HR departments. The HR departments are to use effective talent management and rewards strategy, right from the point of employee recruitment, throughout the employee’s tenure at the firm, and to the employee’s exit. Remunerations, allowances, and other forms of perks are to be issued according to merit and individual achievement in relation to the performance target. The talent management and rewards strategy must be complemented with sharpening tools such as supervision, employee training and workshop programs. Question 5 To ensure that Citibank has a favourable communication system, it will be important that the firm creates an integrated communication system. This communication system can use oracle-based information system which allows any officer to access the company’s information or details that are relevant to his duties and designation. The use of oracle-based information system has been used by Citibank to efficiently and centrally manage client and employee communication. The same systems will enable the company to combine operational and analytical client and employee management to realise faster response to diverse events. In the same wavelength, the use of oracle-based information management system will enabled Citibank to manage employees in a better way and carry out more systematic customer segmentation (Eldomiaty and Behery, 2010). Question 6 A critical observer can agree with the idea which Faupel (2012) advances to the effect that the company can also use open door policies and round table meetings to bring about personal touch within Citibank’s rank and file. As Africans, Tanzanians enjoy personal touch in communication and it may therefore help to break the employee-employer tension. In-house communication and regular meetings and consolations will be used to foster acceptance of these policies and to inculcate internal cohesion. Policies which are generated in-house are accepted more readily than those that are arrived at only by organisational executives. Question 7 The expected benefits of the newly proposed policy above include greater accountability among individual employees, the attainment of performance target both at the individual and organisational level, intra-organisational cohesion, organisational loyalty and the ability of employees to fully identify with Citibank as a family, enhancement of employees’ welfare, plurality of ideas [because of the use of a wider consultative culture] and organisational growth and stability. References Beamish, P. W. & Newenham-Kahindi, A. (2007). Human Resource Management in Multinational Banks in Tanzania. Richard Ivey School of Business Foundation. Brumback, G. (2011). Performance Management Fundamentals. Industrial and Organisational Psychology, 4 (2): 182 – 183. Budworth, M. & Mann, S. L. (2011). Introduction: Performance Management: Where Do We Go from Here? Human Resource Management Review, 21 (2): 81 – 84. Chih-Ching, Y. (2012). Service, Investment and Risk Management Performance in Commercial Banks. The Service Industries Journal, 32 (12): 2005. Eldomiaty, T. I. & Behery, M. H. (2010). Stakeholders-Oriented Banks and Banks Performance: Perspectives from International Business Management. International Journal of Commerce and Management, 20 (2): 120 – 150. Faupel, C. (2012). Value-based Performance Management. Advances in Management Accounting, 20 (2): 187 – 208. La Ferla, B. (2006). Performance Management. Engineering Management Journal, 16 (6): 38 – 39. Milica, J. & Milos, J. (2013). Performance Management and Employee Satisfaction. Montenegrin Journal of Economics, 9 (1): 85. Narasimhan, K. (2004). Performance Management. Measuring Business Excellence, 8 (3): 72. Shutler, M. & Storbeck, J. (2002). Performance Management. Journal of the Operational Research Society, 53 (3): 245 – 246. Stark, R. (2007). Performance Management. Information Professional, 4 (4): 32. Van Dooren, W. (2011). Better Performance Management. Public Performance & Management Review, 34 (3): 420 – 433. Read More