A PROJECT REPORT ON
Employee Retention and Execution Process for ING Vysya Bank
Submitted in partial fulfillment of the requirement of award of the degree of MASTER OF BUSINESS ADMINISTRATION
Undersupervision of Mr. Amit Gupta Operation Manager ING VYSYA BANK ,Muzaffarnagar
SUBMITTED TO
Submitted by Nitesh Kumar Saini M.B.A IIInd Semester Roll No. 0827270053
Mahaveer Jain University (EDID), Bangalore
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CONTENTS PAGE No.
CERTIFICATE .3
DECLARATION .4 ACKNOWLEDGEMENT 5 CHAPTER-1 INTRODUCTION ..6-17 CHAPTER-2 REVIEW OF RELATED LITERATURE ..18-38 CHAPTER-3 DESIGN OF STUDY .39-43 THE STUDY OBJECTIVES OF THE STUDY METHODOLODY SCOPE OF THE STUDY LIMITATION CHAPTER-4 ANALYSIS OF DATA 44-65 CHAPTER-5 FINDINGS 66-68 LIMITATION.. 69-70 RECOMMENDATION 71-72
BIBLOGRAPHY 73 ANNEXURE 74-82
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CERTIFICATE
This is to certify that the Summer Training Project Report entitled being submitted by Mr. / Ms. .. in partial fulfillment of the requirement for the degree of the Master of Business Administration from U. P. Technical University, Lucknow, is an independent original research work done by him/her under my supervision and guidance.
Place: .. Date: ..
Director GNIT-MBA Institute
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DELARATION
I hereby to declare that the work for the Dissertation report entitled Employee Retention and Execution Process for ING Vysya Bank am completely done by me, based on my work conducted in ING VYYSA BANK, Bangalore. I also declare that this project work has not been submitted to any other university or Institution for the award of any degree, diploma, fellowship or other similar title. Admittedly, I have received suggestions and guidance from my guides for the partial fulfillment of M.B.A.
(Deepika Agarwal)
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ACKNOWLEDGEMENT
If words are considered to be signs of gratitude then let these words Convey the very same. My sincere gratitude to Mr., ING VYSYA BANK and giving necessary directions on doing this project to the best of my abilities. I am highly indebted to Mr. Branch Manager, who provided me with the necessary information and also for the support extended out to me in the completion of this report and his valuable suggestion and comments on bringing out this report in the best way possible.
So in the same sequence at very first, I would like to acknowledge my parents because of whom I got the existence in the world for the inception and the conception of this project. Later on I would like to confer the flower of acknowledgement to Ms. and other faculty members who taught me that how to do project through appropriate tools and techniques. Because ING VYSYA BANK has given me a chance to do my integrated project report., I would like to give thanks Dr. (Head of Department)
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CHAPTER -1
INTRODUCTION
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INTRODUCTION
Banking system of a nation is the shadow of nations economy. A healthy and profitable banking system is just like the backbone of nations economy. It is necessary for a nation to achieve growth and remain stable in this global world and global economy. The Indian banking system, with one of the largest banking networks in the world, has witnessed a series of reforms over the past few years like the deregulation of interest rates, dilution of the government stake in public sector banks (PSBs) and the increased participation of private sector banks.
1.1 History of INDIAN BANKING SYSTEM
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and the Bank of Hindustan, both of which are now defunct The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.
Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947,
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the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors
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1.2 Liberalization in INDIAN BANKING SYSTEM
In the early 1990s, the then government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This
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move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%, at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4%) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2009), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail
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banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. The public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.
1.3 The Origin of ING Group
ING group originated in 1990 from the merger between Nationale Nederlanden the largest Dutch Insurance Company and NMB Post Bank Group. Combining roots and ambitions, the newly formed company called Internationale Nederlanden Group . Market circles soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to ING Group. ING is a global financial services company providing banking, investments, life insurance and retirement services and operates in more than 50 countries.
PROFILE
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ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services. ING serve more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia. They draw on their experience and expertise, their commitment to
excellent service and their global scale to meet the needs of a broad customer base, comprising individuals, families, small businesses, large corporations, institutions and governments
STRATEGY
INGs overall mission is to help customers manage their financial future. Capitalizing on changing customer preferences and building on our solid business capabilities, INGs strategic focus is on banking, investments, life insurance and retirement services. They provide retail customers with the products they need during their lives to grow savings, manage investments and prepare for retirement with confidence. With wide range of products, innovative distribution models and strong footprints in both mature and developing markets, ING has the long-run economic, technological and demographic trends on their side. ING aligns its business strategy around a universal customer ideal: saving and investing for the future should be easier. While steering the business through turbulent times, ING will execute efforts across all its business lines to strengthen customer confidence and meet their needs, preserve a strong capital position, further mitigate risks and bring its costs in line with revenue expectations.
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COPERATE RESPOSIBILITY
ING wants to pursue profit on the basis of sound business ethics and respect for its stakeholders. Corporate responsibility is therefore a fundamental part of INGs strategy: ethical, social and environmental factors play an integral role in business decisions
1.4 FINANCIAL RESULTS
FY 2008 Income (in EUR milion) Insurance operations Banking operations Total Income1 Operating Expenses Insurance operations Banking operations Total operating expenses Addition to loan loss provision Banking operations Insurance result before tax Banking result before tax Total result before tax Taxation Minority interests Net result Figures per ordinary share (EUR) Net result Earnings 2) Dividend -0.36 -0.56 0.74 4.32 4.32 1.48 3.57 3.57 1.32 3.32 3.32 1.18 2.71 2.71 1.07 5,422 10,303 15,725 1,280 -1,635 148 -1,487 -721 -38 -729 5,515 9,967 15,481 125 6,533 4,510 11,043 1,534 267 9,241 5,275 9,087 14,362 103 4,935 5,005 9,940 1,907 341 7,692 5,195 8,844 14,039 88 3,978 4,916 8,894 1,379 305 7,210 4,746 8,795 13,541 465 4,322 3,418 7,740 1,709 276 5,755 54,851 11,731 66,291 62,208 14,602 76,587 59,642 14,195 73,621 57,403 13,848 71,120 55,614 12,678 68,171 FY2007 FY2006 FY2005 FY2004
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Shareholders equity Balance Sheet (in EUR billion) Total assets Total equity Shareholders equity Capital Ratios (%) ING Group debt/equity ratio Insurance capital coverage ratio Insurance debt/equity ratio Bank Tier-1 ratio Market capitalisation (in EUR billion) Shares (in millions): Outstanding Preference shares outstanding Key Performance Indicators - Net return on equity (ROE) - Net result growth Insurance - Value of new life business - Internal rate of return - Combined ratio (non-life) Banking - Cost/income ratio - RAROC after tax Assets under management (in EUR
8.55
17.73
17.78
16.96
12.95
1,332 29 17
1.312 40 37
1,226 41 38
1,159 38 37
964 28 28
13.8% 256% 8.5% 9.32% 15
9.5% 244% 13.6% 7.39% 60
9.0% 274% 14.2% 7.63% 74
9.4% 255% 13.4% 7.32% 65
10.2% 204% 14.3% 6.92% 49
2,063 -
2,226 16
2,205 63
2,205 87
2,205 87
-2.1% -108% 1,023 13.9% 97% 87.8% 1.2% 551
24.2% 20% 1,113 14.3% 97% 68.3% 19.9% 643
23.5% 7% 807 13.3% 91% 64.0% 19.7% 600
26.6%
25.4%
25% n.a. 805 13.2% 95% 63.9% 22.6% 547 632 12.1% 94% 69.4% 14.5% 492
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billion) Staff (FTEs end of period) 124,661 124,634 119,801 116,614 112,195
The ING Vysya BANK Ltd.
ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to form a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. ING and ING Vysya Life Insurance are headquartered at Bangalore, while the corporate office of ING Investment Management is situated at Mumbai. The synergies arising out of the three distinct but complimentary businesses are bound to be an asset to the group in the changing market dynamics of the future. The first such signs are already visible on the horizon with combined products being successfully launched by the different entities of the group in conjunction with each other It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one
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private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank stupendous. The 75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005.
The long journey of seventy-five years has had several milestones
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1930 Set up in Bangalore 1948 Scheduled Bank 1985 Largest Private Sector Bank 1987 The Vysya Bank Leasing Ltd. Commenced 1988 Pioneered the concept of Co branding of Credit Cards 1990 Promoted Vysya Bank Housing Finance Ltd. 1992 Deposits cross Rs.1000 crores 1993 Number of Branches crossed 300 1996 Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem & Jewellery Export Promotion Council for excellent performance in Export Promotion
Cash Management Services, & commissioning of VSAT. Golden Peacock Award - for 1998 the best HR Practices by Institute of Directors. Rated as Best Domestic Bank in India by Global Finance (International Financial Journal - June 1998) 2000 State -of - the -art Date Centre at ITPL, Bangalore. RBI clears setting up of ING Vysya Life Insurance Company
2001 ING-Vysya commenced life insurance business. The Bank launched a range of products & services like the Vys Vyapar Plus, the range of loan schemes for traders, ATM services, Smartserv, personal assistant service, Save 2002 & Secure, an account that provides accident hospitalization and insurance cover, Sambandh, the International Debit Card and the mi-b@nk net banking service. 2002 ING takes over the Management of the Bank from October 7th , 2002 2002 2003 RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter of 17.12.02 Introduced customer friendly products like Orange Savings, Orange Current and Protected Home Loans
2004 Introduced Protected Home Loans - a housing loan product 2005 2006 Introduced Solo - My Own Account for youth and Customer Service Line Phone Page | 17 Banking Service Bank has networked all the branches to facilitate AAA transactions i.e. Anywhere, Anytime & Anyhow Banking
Employee Retention:
Employee retention refers to the ability of an organization to retain its employees. Employee retention can be represented by a simple statistic (for example, a retention rate of 80% usually indicates that an organization kept 80% of its employees in a given period). However, many consider employee retention as relating to the efforts by which employers attempt to retain employees in their workforce. In this sense, retention becomes the strategies rather than the outcome. In a Business setting, the goal of employers is usually to decrease employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organisational knowledge. By implementing lessons learned from key organizational behavior concepts employers can improve retention rates and decrease the associated costs of high turnover. However, this isn't always the case. Employers can seek "positive turnover" whereby they aim to maintain only those employees who they consider to be high performers.
Retention Strategies
In order to retain employees and reduce turnover managers must meet the goals of employees without losing sight of the organization's goals, thereby creating a "winwin" situation. Valance and expectancy theories provided some of the earlier guidance for retaining employees. Valence is the degree to which the rewards offered by an organization align with the needs employees seek to fulfill. High valence indicates that the needs of employees are aligned well with the rewards system an organization offers.
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Conversely, low valence is a poor alignment of needs with rewards and can lead to low job satisfaction and thereby increase turnover and decrease retention. Expectancy theory details has several factors that can lead to high job satisfaction and high retention rates for organizations. Increasing expectancy in an organization can be done by training employees and thereby making them more confident in their abilities. Increasing instrumentality within an organization will be part of implementing an effective rewards system for attainment of specific goals and accomplishments.[1] However, while these theories may be valid they provide little practical assistant for business managers or human resource practitioners. More modern studies relating to employee engagement demonstrate that by developing a range of strategies that address various drivers of engagement, many positive outcomes can be achieved. These outcomes include higher profitability, improved customer satisfaction, lower absenteeism and lower accident rates as well as higher employee retention.
Retention and Motivation Theory
Retention has a direct and causal relationship with employee needs and motivation. Applying a motivation theory model, such as Maslows Hierarchy of Needs, is an effective way of identifying effective retention protocol. Each of the five tiers of Maslows hierarchy of needs relates to optimal retention strategy. Since Maslows introduction of his motivation model, organizations have been employing strategies attempting to stimulate each of the five humanitarian needs described above to optimize retention rates. When applied to the organizational model, meeting the self-actualization and esteem needs of an employee tend to correlate to better retention. Physiological, safety, and social needs are important as well, however, and must be addressed to better the work
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environment. While implementing a retention strategy is ideal, successful satisfying all five needs of employees is not only difficult, but also expensive. That being said, managers who attempt to maximize employee need coverage tend to be more concerned with employee satisfaction.
Maslow's hierarchy of needs
Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham Maslow in his 1943 paper A Theory of Human Motivation.[2] Maslow subsequently extended the idea to include his observations of humans' innate curiosity. His theories parallel many other theories of human developmental psychology, all of which focus on describing the stages of growth in humans. Maslow use the terms Physiological, Safety, Belongingness and Love, Esteem, and Self-Actualization needs to describe the pattern that human motivations generally move through.
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Employee Strength of ING Vysya:
Physiological needs
For the most part, physiological needs are obvious they are the literal requirements for human survival. If these requirements are not met, the human body simply cannot continue to function. Air, water, and food are metabolic requirements for survival in all animals, including humans. Clothing and shelter provide necessary protection from the elements. The intensity of the human sexual instinct is shaped more by sexual competition than maintaining a birth rate adequate to survival of the species.
Safety needs
With their physical needs relatively satisfied, the individual's safety needs take precedence and dominate behavior. In the absence of physical safety due to war, natural disaster, or, in cases of family violence, childhood abuse, etc. people (re-)experience post-traumatic stress disorder and trans-generational trauma transfer. In the absence of economic safety due to economic crisis and lack of work opportunities these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from
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unilateral authority, savings accounts, insurance policies, reasonable disability accommodations, and the like. Safety and Security needs include:
Personal security Financial security Health and well-being Safety net against accidents/illness and their adverse impacts
Love and belonging
After physiological and safety needs are fulfilled, the third layer of human needs are interpersonal and involve feelings of belongingness. The need is especially strong in childhood and can over-ride the need for safety as witnessed in children who cling to abusive parents. Deficiencies with respect to this aspect of Maslow's hierarchy due to hospitalism, neglect, shunning, ostracism etc. can impact individual's ability to form and maintain emotionally significant relationships in general, such as:
Friendship Intimacy Family
Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs, or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and non-sexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, may ignore the need to eat and the security of health for a feeling of control and belonging.
Esteem
All humans have a need to be respected and to have self-esteem and self-respect. Esteem presents the normal human desire to be accepted and valued by others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or
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an inferiority complex. People with low self-esteem need respect from others. They may seek fame or glory, which again depends on others. Note, however, that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances such as depression can also prevent one from obtaining self-esteem on both levels. Most people have a need for a stable self-respect and self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, recognition, fame, prestige, and attention. The higher one is the need for self-respect, the need for strength, competence, mastery, self-confidence, independence and freedom. The latter one ranks higher because it rests more on inner competence won through experience. Deprivation of these needs can lead to an inferiority complex, weakness and helplessness. Maslow also states that even though these are examples of how the quest for knowledge is separate from basic needs he warns that these two hierarchies are interrelated rather than sharply separated (Maslow 97). This means that this level of need, as well as the next and highest level, are not strict, separate levels but closely related to others, and this is possibly the reason that these two levels of need are left out of most textbooks.
Self-actualization
What a man can be, he must be. This forms the basis of the perceived need for selfactualization. This level of need pertains to what a person's full potential is and realizing that potential. Maslow describes this desire as the desire to become more and more what one is, to become everything that one is capable of becoming. This is a broad definition of the need for self-actualization, but when applied to individuals the need is specific. For example one individual may have the strong desire to become an ideal parent, in another it may be expressed athletically, and in another it may be expressed in painting, pictures, or inventions.[11] As mentioned before, in order to reach a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs.
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