Industrial/Organizational Psychology in Banking
Industrial and organization psychology, also referred to as the occupation psychology is the general study of human or employee behavior in their workplace. Traditionally known as the behavior of workers, industrial or organization psychology has become a crucial sector within any objective organization (Yousef & Noon, 2012, p. 89). This has seen the introduction and inclusion of Human Resource Management as part of organizations’ management that of late does not only concern the recruitment of employees into organization but as well considers the performance and general employees’ affairs and concerns. Industrial psychology leads to companies’ success by improving workers satisfaction, performance, safety and well-being that puts the employees at a better place to perform objectively in their duties. Workers feel motivated hence perform to their best. In the context of this analysis, I will consider analyzing industrial psychology in the banking industry of a casually operating banker. Like any other service job, bankers wish to perform to their best and achieve their goals of satisfying their clients’ needs.
Banker and Bank
Banks aim at maximizing profits at the expense of reduced cost of operation. The cost of operations include salaries and wages of employees, bills and overhead costs to which it incurs during the working moments. At the center of the banks, are the bankers, individuals who are obligated to the duty of ensuring that the operations of the organization are achieved at a manageable cost. A bank is a service-selling organization therefore; most of its performance are customized. This puts the customers at a higher side of the bargaining rift giving them more power over their money transacted in the banks. The bankers must hence adopt a mutual relationship and correlation with the customers coupled to the competitive nature of the banking industry. Human relation is hence a factor here for the management of the banks to consider at all costs. Hence, employees have to be managed well, their well-being catered for, safety and remains motivated to work. Since the bankers employs the power of persuasion, only the self and institutionally motivated bankers will be at a better position to have powers over the customers. Banks can never overlook the concept of industrial psychology if they really aim success.
Banking is a professional job with a distinct description of the proper assignments and requirements of the job. Bankers have got duties well stipulated in the job ethics and role guidelines from which everyone in the profession is expected to carry out himself or herself diligently with regard to the assigned responsibilities. Bankers have the responsibility of managing the finance entrusted to them by lending and borrowing and at the same time ensuring that the cash deposited by the clients can be retrieved or given to them upon recall. Generally, banking as a profession is wide and hence within the bank, every banker is assigned a specific responsibility and duty just as in other jobs. These sections may include the credit section, tailoring, customer relation and care center and other sections that the bank may find relevant to the customers.
Banking is a complex type of job as compared to other white-collar jobs. In its nature of professionalism, banking demands self-realization and unique ethics of its own. Therefore, analyzing banking would require both task-oriented job analysis and worker-oriented job analysis.
The sole viability of banking is vested in the tasks, duties and responsibilities required of the bankers. This implies that the banking business remains relevant and in operation as long as the bankers, employees perform their duties and responsibilities to the satisfaction of the customers. A banker must hence have to perfect in his duties. Every rational consumer would hence prefer to initiate transaction or trade with a seller that he or she feels is worthy and can satisfy his or her needs. This concept among other factors such as stiff competition from other institutions and organizations offering the same services, puts banking at a more compromising position. The banker therefore has no solution but to provide the most satisfying performance and task to his customers. Banking is held strong from the quality and quantity of services offered to the customers. Being a competitive industry, banks have to ensure that whatever they deliver to the customers is nothing but their best. The organization has the responsibility to monitor in keenness the performance and duties of every worker in the institution and as so, banking requires total dedication by the workers to their work. The banker must hence ensure that his or her duties are performed and that he or she remains competent.
Banking also requires a worker-oriented assessment that is much concern to the knowledge, skills, ability and other worker traits are properly managed for the success of the institution. Through the assistance of Human Resource Management office, banks have the ability of analyzing and gauging bankers’ performance by managing the affairs of the bankers. This apparently puts banking at a competitive edge to other jobs since it requires distinct skills, knowledge both orientation and experience, and ability to perform the responsibilities and duties they are assigned to. Banking requires one to have gone through an educational process through which he or she acquires the required academic merits just as other jobs. Skilled worker would be able to perform in their duties than semi-skilled. However, just as other professional jobs, academic merit is a requirement for one to secure a chance in the job since it requires academic merits just as it may with good code of conduct. Banks hence have to heavily invest in their worker to ensure that the bankers are competent enough to handle their responsibilities without a balance of doubt.
Recruitment and Selection
Most organizations have in recent time merger the industrial psychology with human resource management. This is since the roles of the two offices are centered towards one main goal of ensuring the employees’ desires are met and performance boosted. However, in the banking institution, the roles of the two offices are separated for the purpose of certain duties that cannot be merged in order to avoid collusion of roles. These duties includes the recruitment and selection of bankers and other employees of the bank. The Human Resource office is obligated the responsibility of ensuring the recruitment of bankers while on the other side, Industrial or organization psychologists are obligated the responsibility of also ensuring the right people are recruited for the jobs by doing a close personal assessment of the recruitment. This hence implies that bankers’ recruitment involves a vigorous process.
Personal recruitment and selection in banks is a procedural process that begins from the process of developing job announcements, putting up advertisements that defies the qualifications and requirements of applicants and then the interview session that demands the screening out of the applicants to eliminate the unqualified applicants.
Bank’s recruitments occasionally begins with the Human Resource office together with the bank’s industrial psychologist developing the jobs announcement. The two offices makes the recruitment committee that undertakes the recruitment process. It begins with the committee outlining the job requirements and a subsequent job announcement through any media found to be relevant and accessible by many willing applicants. At the top of the list, is academic merits which is a mandatory requirement for banking and must be merits that is relevant to banking such as banking studies, accounting, economics, credit management and many other. Afterannouncement and applicants’ application, the applications are then sorted in order of merit in satisfying the requirement. They then undertake an interview that is done under close watch of the industrial psychologists to ensure that the banks only recruits the desired qualified applicants who would be able to enable it achieve its financial goals.
Employee selection on the other side involve the process through which the banks hire and promote employees in the organization. This responsibility is totally vested on the industrial psychological office. The bank psychology carries out a continuous close watch on the employees of the bank to be able to develop a work-priority schedule from which the best performing bankers can then be awarded and assented for promotions. Similar to recruitments, selection of employees for rewards and promotion is based on merit. This boost the bankers’ morale and hence would always work towards achieving performance success.
Banking has a distinct job evaluation procedure that leads to the different pay levels present in the banks. These procedure are based on a number of factors, among them, level of education or academic merits, performance of duties, experience of the workers, and other industrial psychological measures. More practical, academic merits have been used for job evaluations in the banking sector or organization whereby employees with higher academic merits earn higher than their fellow with inferior merits. However, this evaluation process can only move in wave of academic merits to a level that can be sustained by the bank.
Employee Performance Appraisal
Banks like other organizations, measures their employees’ ability to work and compares it against the expectations of the organization. This implies that as the organization sets its goals that it aims to achieve, each individual employer, banker targets a goal that he or she aims to achieve (Muchinsky, 2006, p. 107). Banks used performance appraisal in promotions and duty compensation of bankers that have shown massive improvements in their work and streams of changes in organization duties. It also helps the banks in organization and developing an unbiased employee selection procedures to enable the banks management the performance of the workers. Such performance managements includes coaching of new recruits and monitoring of the bankers. This may also include keeping of records of employees on their duty performance and other non-professional activities that would help the company in understanding best their employees. These records have been used in developing employee expertise since the bank would be able to tell which occupation are the employee can well manage. Banks are very keen on employee track records hence they take serious the management of employees’ performance appraisal.
Banks use industrial psychology to gather information from job analysis process that would assist the organization in determining the job’ performance direction. The bank through the human resource office then develops a rating scale that describes each level of performance for the job. For some banks, the industrial psychologist would engage the bankers and other employees of the banks by training each employee on how to use the bank’s appraisal tools. This choice of the some organization to have the employees themselves use the appraisal instruments to gauge themselves have been criticized by some management bodies that feel that employees should not be part of the monitoring team that monitors their performance. However, Revolution theory argues that giving employees that opportunity to gauge their own performance, equally gives them the opportunity to improve in their performances. This leaves no doubt that next time, every employee engage in the previous performance appraisal stands a higher chance to improve on their work efforts. The banks also take it on integrity ground to ensure that the performance appraisal instrument used does not show or give any way of biasness to the employees. It must be able to accommodate all employees on all the criteria of recruitment used.
The bank has also set a legitimate appraisal schedule that allows for a regular performance appraisal that gives a chance to employee motivation and commitment in their duties. Most of the banks do a quarterly performance appraisal that allows for accommodation of all affected individuals. The evaluation of employee performance is done by the bank industrial psychologist in conjunction to the human resource office, the two offices that are concerned with employee relation.
Training and Employee Development
Banks take the responsibility of training its new recruitment and periodic training for all the staff to enable them cope up with certain changes made in the industry. Being a service industry, banks faces a lot of innovational changes with regard to customer relations and these changes can never be ignored. For the new recruits, the organization has an outlined orientation process through the new bankers are trained on the handling of their duties and given tips in certain occupational ethics that is required of them at all times. Just as other organizations, training of employees is a priority to the bank since through these trainings that they employees gain expertise in their respective areas of work. Some banks also train their employees to be all-round in the performance of all duties within the institution. This increases on the performance capability of the employees.
Job stressors and Communication Process
Banks as well faces a number of occupational and managerial conflicts in their conditions of work that leads to deterioration of employee morale and counterproductive behaviors. Bankers are only able to work in conditions that favor them in terms of keeping up their morale and self-driven. However, when this situations of work are disrupted, the workers loses the urge to perform efficiently as required of them. The most common stressor affecting the bankers is conflict with their supervisors. Both the Industrial Psychologist and Human Resource manager have the responsibility of supervising the bankers but at times there may arise a conflict in the remuneration of employees that may deter bankers working morale. Other stressors include non-compliance to compensation agreements made between the bankers and the management, long working hours and salary remuneration. The bank has an efficient communication system that allows for interaction between the staff members and communication with its customers. It uses both official communication channels and as well social media where the bank has created a platform for interaction between the bankers and the staff.
Banks motivate their employees on the basis of good performance of their duties. The modes of motivating the bankers constitute of rewards and promotions. Every banker whose performance satisfies the institution’s need for rewarding apparently receives the reward. In the recent past, the banks have made adjustment to their modes of motivating their best performing employees by even giving them academic rewards by sponsoring them for certain courses that boost their expertise.
The bank commonly uses the Incentive theory of motivation and Humanistic theory of motivation. The incentive theory of motivation is where the banks motivates his best performing employees by giving them materialistic rewards in exchange of their dedication to better the bank’s performance rate. Equally the bank uses Humanistic theory by developing the self-driving motive of every employee that enable them to perform to their best in maintain their jobs to enable them provide for their needs and desires.
The bank aims at developing every employee to be a reputable leader of his own. This is quite evident in the manner from which the bank has embark in training of all its employees to be self-reliant, be an individual leader, urge of team working that gives a chance to everyone to once at a time be a group leader. This approach taken by the bank is termed as the leader-focused approach where the center of the bank’s aim is to make as many leaders of the employees as possible. This approach creates a sense of responsibility in the employees.
Banks are service institutions that offers banking services to their customers at their customers’ accessibility ability. This therefore means that for the bank to capture more customers, the quality of the service delivery must be very high. However, this can only be achieved if the service providers, the employees or bankers are sufficiently motivated to work to their best. It hence recommends that changes should be effected on employee motivation and the bank management should consider at broader width building up employees’ morale to satisfactorily perform their duties. Suppose every employee would be self-motivated to work without supervision, then the bank would have a chance to satisfy its customers’ needs and hence attract more clients into the bank.
Muchinsky, P. M. (2006). Psychology applied to work: An introduction to industrial and organizational psychology. Belmont, Calif: Thompson Wadsworth.
Yousef, C. & Noon, A. (2012). Industrial/Organizational Psychology. San Diego, CA: Bridgepoint Education, Inc.