CHAPTER ONE
INTRODUCTION
1.1 Background to the study
The main source of income and profitability of the bank remains the spread or difference between the rate at which funds are borrowed and the rate they are invested or loaned out. In modern time the number of services offered by financial
institutions such as commercial banks have increased immensely this is to enable them boost their deposit base and risk taking which is a fundamental nature of banking remains unchanged. The risks of mismatches between assets and liabilities
and between borrowing and lending rates. In managing the risks the bank has to
satisfy the following sectors; surplus unit from which the bank borrows and who in
turn expect maximum liquidity from the bank; deficit unit,these are those who borrow from the bank who are also expected to liquidate the fund within a specified period. Another sector is the shareholders who will require adequate return on their investments in order for them to invest more; the regulatory authorities who ensures that banks operate prudently and within the stipulated regulatory requirements and finally the community within which it operates and who expects contribution of the organisation towards the development of the host environment. The financial institutions had witnessed continous evolution all over the world especially since after the second world war. From the collapse of Bretton
Woods system of floating exchange rate of the British government which resulted to increase volatility of exchange and interest rates in 1944 to the imbalance of capital flows as a result emergence of bigger industrial companies in the developed
countries such as Germany, Latin America, Japan etc. A view on Nigeria banking and financial system also indicates that the banking sector had undergone remarkable changes over the years in terms of the number of institutions, ownership structure as well as the scale of operations. Some notable and significant changes that took place were the deregulation, innovation of a range of new financial markets and instruments and advances in computer and information technology.
One of the effects of these development is the expansion of banking activities. The number of international banks increased considerably while the domestics banks went international and globalized their operations in order to preserve business relations with the international banks in the face of possible competition. Just like their counterparts in other part of the world and in order to conform with the international standards foreign banks were stablished in Nigeria, while Nigerian banks also established in foreign countries. This is in order to share in Nigeria’s international trade, and in the enormous advantages and opportunities which they hope to achieve by such venture and to provide a training ground for officers and staff from Nigeria coupled with the wish to deal direct with their customers and associates in the foreign countries. The foreign banks and branches provided international links in the financing of international trade and the flow of foreign exchange. They also exposed national banks to competition and to the inflow of new financial technology.
The establishment of Central Bank of Nigeria in 1956 opened a new chapter in the annals of the evolution of banks in Nigeria. It set the stage for a new era in which monetary policy could be used as an economic management.
More banks (government and individual) were established in the country after the independence in 1960. Government, in a bid to have total control of the indigenous banks and as part of National development plans, established some banks like the Nigeria Industrial Development Bank (NIDB), Nigerian Bank for Commerce and Industry (NBCI), Nigerian Agricultural and Co-operative Bank (NACB) etc. Nwankwo(1991) observed that, in order to escape from the suffocating political climate of government controlled banking establishments, the federal character syndrome and frustrated by the break on their career advancement and fearing premature retirement when they still have much to offer, several banking practitioners floated new banks where they hoped to put their expertise and drive into practice. The establishment of these banks brought a dramatic change to the two major banks which were established by the British and dominated the financial institutions in Nigeria in terms of structure and scope.
The financial instutions in Nigeria were not without their problems like in other banks the world over. This is endorsed by the fact that Nigeria banking history is replete with bank failures occassioned primarily by inefficient management resulting in poor internal controls, ineffective checks and balances and poor performance. In addition to these are, unwholesome practices and gross mismanagement, which contributed substantially to the failure of most of the banks. Some deficiencies and malpractices which pervades the industry in the formative years in the country still persist till today.
While it could be said that the performance of the nation’s banking industry was fairly good especially when the assessment is done in isolation to other sectors
of the economy and/or in isolation of what obtains in other emerging economies.
However, when the nation’s banking financial conditions and performances are
assessed against its expected role in the economy and or when compared with the banking sectors in South Africa, Malaysia, Europe, United States of America, it could be rightly described as fragile, poorly developed and extremely small. The Nigeria banking sector has not been able to actually support the
economy nor lend for long term to customers. This has been one of the banks
fundamental problems due to the limitation of resources, banks have to manage
their assets and liabilities very well and no bank want to have doubtful or bad debts.
This was why at a time in this country, banks were just trading in goods, local
purchase order financing, discounting among others which did not help the
economy.
Government did not also help matters in the history of Nigerian banks, like other banking system of other countries, they were subjected to extensive prudential regulation from the sociopolitical evolution of the country. The regulation sought to ensure sound and healthy banking and financial system, protect depositors effectively, accelerate the economic development of the country, develop banking
habit etc. The controls were too rigid and generally unacceptable coupled with the
strong control of some of the banks especially the foreign banks.
These problems necessitated lots of reformation in the industry. The notable
one is the 2005 consolidation policy in the Nigerian Banking Sector which stipulated
a new minimum capital base of N25billion for Nigerian banks which led to the
reduction of the number of banks from 89 to 24. Also as a way of checking the activities of banks, the Central Bank of Nigeria brought out a policy on financial year
harmonization which is expected to take effect from December, 2009. The training function, popularly referred to as Human Resources Development (HRD), coordinates the organization’s efforts to provide training and development experiences for its employees in order to meet up with the challenges.
Although training is often used in conjunction with development, the terms are not
synonymous. Employee training can be defined as a planned attempt to facilitate
employee learning of job-related knowledge, skills, and behaviors or helping them
correct deficiencies in their performance. In contrast, development is an effort to
provide employees with the skills needed for both present and future jobs.
This work stresses the point that in the future the only winning organizations
will be those that respond quickly to the issue of training and development–related
problems. If an organization wants to succeed, it must recognize the importance of
investing in its greatest resource—the force working for it. Developing human
resources as key to effective organizational success as it relates to Employee
training & development and Career development is the major issue that this work
tends to cover.
1.2 STATEMENT OF THE PROBLEM
Human Resources Development approach has not taken a planned route in most instances. These days what obtains in most financial institutions is an aberration of the real sector. Following the reduction of banks, many banks are now more interested in pursuing deposits to enable them meet up with the competitive nature of the business and keep abreast with the Central Bank of Nigeria Policy. This craze has further led some of the institutions to move farther away from the issue of human resource development. Employees are most often engaged solely on grounds of mobilizing deposits without proper training. There are cases of poaching from one bank to another. A case of which some banks watch out (poaching)for employee of other banks whoare sent on training for a mouth watering offer to such staff. Apart from depositmobilization issues such as leadership and managerial programs which covered
numerous topics such as; Banking Payment Systems, Anti Money Laundering,
terrorist financing, International Economy, Mutual Funds, Islamic Banking and
Finance, Banking Policies, Financial Markets, Information Technology, Human
Resources Development, and Insurance all these are global economic issues which
banks are expected to handle with seriousness and educate their staff on. These
issues are not just for bank response to global situation, but countries are also
assessed based on some of these economic activities. These account for the reason
the apex bank in Nigeria has continued to reform the banking industry through the
consolidation policy, financial year harmonisation policy and constant issue of
circulars on sensitive issues such as the terrorist financing and money laundering
matter and impose penalty on banks who fail to comply. Yet it is very unfortunate
to note that many employees do not know what these issues are all about due to lack of training or education on the issues.
Some employees continued to be trained in an unplanned manner without
strict accordance to the actual requirements. This predictably often results in an
imbalance of staff. Apart from imbalance of staff, in many instances, the
distribution and availability of staff is uneven with large concentrations in
marketing department. The new categories are trained in an ad hoc manner; their
numbers, deployment, and duration of training vary widely. This uneven
distribution of staff often leave gaps and raises issues of inappropriate and wasteful
use of personnel with higher skills.
Lack of research on the relevance and utilisation of available human
resources in relation to the bank needs and their performance characterizes the
management of human resources in most financial institutions in Nigeria. Training
and educational contents are not systematically and regularly tested for relevance tothe changing requirements of the financial situations and services.
It has also been observed that most employees make little or no effort to
develop themselves and or increase their careers that will help to progress their job
and employability. The above-mentioned problems and issues call for a revised and appropriate strategic approach to human resource development with a forward look to fit with the changing global economic situation with changing social, economic and environmental conditions.
1.3 Research Questions
In view of the above, the questions that agitate the mind of the researcher are as
follows:
- what is Human Resources Development (HRD)?
- what are the factors that impede HRD in Financial Institutions in Nigeria?
- , what are the underlying significance of Human Resources Development in
Financial institutions?
1.4 Purpose of the study
The general objective of the study is to disclose the effect of human resource
development on staff of First Bank of Nigeria, Plc, Enugu Business Development
Office.
The specific objectives of this study are to;
- to examine the human resource development strategies in FBN Plc, Enugu
Business Development Office
- to identify the factors that affect the implementation of human resource
development policies in FBN
- to proffer possible strategies for the successful implementation of the human
resource development in FBN Plc in ensuring the attainment of its goals.
1.4 SIGNIFICANCE OF THE STUDY
Globalization, technological change and competition have introduced
volatility into the 21st century economy. High level complexity and uncertainty
continue to characterize the global economic landscape with serious impact on
businesses both globally and locally. Cases of mergers, acquisitions, layoffs and
shutdowns are being reported worldwide. Surviving organizations are leaving no
stone unturned to ensure that they intelligently confront the rapid shifts in the global economy.
The growing complexity of banking operations and its demands for efficient
and effective management in the unfolding operations in the Nigerian banking
industry require employers and employees be not only experienced but also and
more importantly, be professionally qualified and informed of developments withinthe macro environments also have human resource at the core of decision making.
Indeed, as pointed out by Nwankwo (1991), the fastest better performing organizations are those with greater orientation to new environment opportunities,
fast market adaptation and more aggressive marketing tactics.
As already pointed out, as the economy expands and develops, new horizons
will unfold and new opportunities and challenges will open up. The environment
will have no room for stagnant employees, harm strung with age long traditions.
The day will be carried by the progressive and dynamic employee who is improving
his/her skills all the time, who is constantly scanning the environment and
identifying customers’ needs, and who in so doing carefully manages his resources to meet diverse and competing priorities. This cannot be possible without effective
employee and employer development.
Changing social values is another reason for the increasing importance and
central role of human management in organization effectiveness. The changing
pattern of motivation, talent and values was described by Schein (1987) as “career
anchors”.
Organizations need the combination of human, material and financial
resources to achieve set goals. While it is commonly believed that human resource
is a critical source of sustainable competitive advantage, corresponding actions in
organizations are usually incongruent with this assertion. This contradiction is
reflected in frequent failures to properly articulate and implement effective human
resource development policies and practices, consequently, attracting and retaining
core talents become serious challenges resulting in dysfunctional turnover that
hampers productivity.
This research therefore aims to make recommendations that will be valuable
to scholars especially in Banking profession, Financial institutions, and stakeholders
in establishing a sound process for helping employees develop their careers in
financial institutions. The research will also prove to be useful to researchers and
serve as a guideline to banks for adopting various policies and programmes to
enhance the competence level of their personnel.
1.6 Scope of the study
The scope of this study is Effective Human Resource Development in
Financial Institutions with special reference to First Bank of Nigeria Plc, Enugu
Business Development Office, Enugu.
1.7 Limitations of the study
The following are the constraints and shortcomings which the researcher
encountered in the course of the study
Lack of accurate data: There was no accurate data or information on Enugu
Business Development Office since the establishment of First Bank in 1894 due to
the periodic zoning system of the bank. Statistical data and information about staff
training and development since inception was also difficult to gather as the training
centre was handicapped with complete and relevant information in this regard. In
addition to this is the scarcity of materials with special relations to the topic as it
concerns financial institutions specifically.
Time Factor: This was the major constraint on the part of the researcher who had
to carry out the research in conjunction with her official assignments. This also
prevented her from traveling to other areas where she could explore other data
sources and additional information on the research. However, the researcher made
tremendous efforts to cover issues in order to give value to the findings of the study.
The study confines to one financial institution that is involved in this trend
and where it is highly essential that the demand for human resource development is
fully met so that better services are provided. Therefore, the present study was
conducted to examine the bank personnel competence as per the judgment of bank
customers, bank personnel and executives through questionnaires.
1.8 DEFINITION OF TERMS
TRAINING: The process of learning the skills that you need to do a job.
COG: A person who is a small part of a large organization.
RECRUITMENT: To find new people to join a company, an organization.
STRATEGY: A plan that is intended to achieve a particular purpose.
INEVITABLE: Something that you cannot avoid or prevent.
INTEGRATION: The act or process of contributing two or more things together so that they can work.
1.9 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows. Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, purpose of the study, research questions, research hypotheses, significance of the study, scope of the study etc. Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter. Chapter three is a research methodology covers deals on the research design and methods adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study
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