Introduction to SBI
The evolution of State Bank of India can be traced back to the first decade of the 19th century. It
began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806. The bank was
redesigned as the Bank of Bengal, three years later, on 2 January 1809. It was the first ever joint-
stock bank of the British India, established under the sponsorship of the Government of Bengal.
Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras
(established on 1 July 1843) followed the Bank of Bengal. These three banks dominated the
modern banking scenario in India, until when they were amalgamated to form the Imperial Bank
of India on 27th January 1921
Important turning point in the history of State Bank of India is the launch of the first Five Year
Plan of independent India, in 1951. The Plan aimed at serving the Indian economy in general and
the rural sector of the country, in particular. Until the Plan, the commercial banks of the country,
including the Imperial Bank of India, confined their services to the urban sector. Moreover, they
were not equipped to respond to the growing needs of the economic revival taking shape in the
rural areas of the country. Therefore, in order to serve the economy as a whole and rural sector in
particular, the All India Rural Credit Survey Committee recommended the formation of a state
partnered and state-sponsored bank.
The All India Rural Credit Survey Committee proposed the takeover of the Imperial Bank of
India, and integrating with it, the former state-owned or state-associate banks. Subsequently, an
Act was passed in the Parliament of India in May 1955. As a result, the State Bank of India (SBI)
was established on 1 July 1955. This resulted in making the State Bank of India more powerful,
because as much as a quarter of the resources of the Indian banking system were controlled
directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in
1959. The Act enabled the State Bank of India to make the eight former State-associated banks
as its subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried out by the 480
offices comprising branches, sub offices and three Local Head Offices, inherited from the
Imperial Bank. Instead of serving as mere repositories of the community's savings and lending to
creditworthy parties, the State Bank of India catered to the needs of the customers, by banking
purposefully. The bank served the heterogeneous financial needs of the planned economic
development.
State Bank of India initially had 7 associate banks under it, which are called as sister banks of
India. They were the following:-
1. State Bank of Bikaner and Jaipur
2. State Bank of Hyderabad
3. State Bank of Travancore
4. State Bank of Mysore
5. State Bank of Patiala
6. State Bank of Saurashtra
7. State Bank of Indore
In 2008 and in 2010 the State Bank of Saurashtra and State Bank of Indore were merged with
State Bank of India respectively. Hence reducing the number of associate banks under State
Bank of India to 5 at present.
An employee enters the bank after he qualifies the entrance exam and interview. The letter of
permanent employee is given only after successful completion of 6 months of service in the
bank. The person may start with a clerical post and move up the ladder based on his
performance. The position that comes after clerk cub be that of officer, Accountant, Branch
Manager, Chief Manager, Assistant General Manager, Deputy General Manager and General
Manager. The small branch of bank has 1 Branch Manager, 1 Officer and 3 clerks.
The number of clerks may group up to 78 in large branches.
If the work tenure of employee comes gender 1-12 years, he is called assistant or computer
operator. For 13-19 years, he is called Senior Assistant. Service tenure for more than 20 years he
is called special assistant. After 23 years of his service he is called special assistant. The
authority and decision making power increases as the employee moves up the ladder.
Performance Appraisal Process at SBI
In State Bank of India, performance appraisal is done on yearly basis. It is carried out to judge
the performance of employees in correlation with the fulfillment of goals, mission and vision of
the bank. The immediate supervisor starts the process of performance appraisal. His observations
regarding the employee are put in written and forwarded to the Branch Manager. In many small
branches, the branch manager may initiate the performance appraisal process. Every year it is the
branch manager’s duty to send a letter regarding performance of the employees to the higher
authorities like Deputy General Manager and general Manager. The higher authorities then take
appropriate decision regarding the service of the employees and the amount of his contribution
made towards the development of the business.
Every employee is given a fixed monthly salary along with Dearness Allowance, House Rent
Allowance. City Compensatory Allowance and increments. Generally an employee is given 1
increment annually. But if he is highly educated person in terms of his being a graduate or has
completed a professional course, then he is given 2 increments. The increment given may vary
from bank to bank as decided by the higher authority. The top management may also have the
right to stop the increment for an employee in case he does not perform satisfactorily.
During the process of Performance Appraisal, the employee is judged on the following aspects
and given points out of a total of 100 points.
Behavior: The behavior of employee towards customers, his subordinates, his superiors
and his peer group members is noted. The behavior of employee towards minority
customers is also kept in mind.
Assistance and Implementation of Guidelines: The helping nature of employee is
stressed upon in this criterion. The help that he provides to his subordinates and peer
group is noted. Also the guidelines given to the employee by his senior members is seen.
The employee is required to implement the guidelines and improve his service and
performance.
Critical Performances: The ability of an employee to perform outstandingly during
difficult and significant situation is noted.
Work Analysis: The ability of an employee to achieve his target, the business brought by
him towards the organization is an important criterion that is observed during
performance appraisal process. The additional efforts made by employee by moving out
of his seat to develop the business are also noted.
Responsibility and Risk Taking: The employee is marked for his performance and his
response towards the responsibility of special task assigned to him. Also the risk taking
ability of an employee is focused to take accurate decision in the future.
Self Improvement and skills: the skills of an employee are given consideration in
performance appraisal process. Also his interest for self development in the field of
education and other courses are noted. Employee is always motivated to improve his
skills and qualification for his personal development and also for the development of the
organization as a whole. The employee who finds it difficult to perform is given special
training in the area where he lacks required skills.
Lastly the performance appraisal process also considers the sincerity, integrity, discipline,
attendance and punctuality of the employee and his commitment towards the
development of the business. Also customer feedback is also taken into consideration to
judge the performance of the employee. The employees who do not perform well are
given warning for improvement and provided required training. There is no demotion in
SBI but the employee may not be given any additional benefits if he does not meet the
expectations of the top management by his performance.
Rewards and Appreciation
The employees with outstanding performance are recognized in the meeting held by the top
management. Rewards like monetary benefits, promotional benefits, best employee certificate,
bronze, silver, or gold medal, and many more additional benefits are given to motivate the
employees and recognize his efforts.
To conclude, the current Performance Appraisal process in SBI uses a combination of traditional
and modern methods which includes straight ranking method, essay appraisal method,
confidential reporting, critical incidents method, assessment centers, behaviorally anchored
rating scales, human resources accounting method and 360 degree performance appraisal
method.
This performance appraisal is used as a reference by the top management to decide the
promotional worth of an employee. Generally for promotion purpose, the performance appraisal
letter for the past four years is referred from which the 3 best appraisals are chosen. Around 10%
of weight age is given to performance appraisal of an employee. The employees are ranked
based upon the points they acquire in performance appraisal process. A minimum of 60% marks
are required for promotion purpose in the performance appraisal process. An employee who
scores 90% or more is listed on merit basis. For those who score between 60%-90% are given
senior positions. The employees may be rated on a scale of excellent, very good, good, poor
depending upon the points they receive in the performance appraisal process. Also the Branch
Manager is given points for the excellent work done by the employees and the branch under his
guidance.
