HUMAN CAPITAL MANAGEMENT IN BANKING SECTOR-A CONCEPTUAL FRAMEWORK

The issue of human resource management has been a long-debated topic for business and professional organisations. Modern view and approach see the workers and employee as human capital. So many research and studies have established the direct relationship between human capital management practices and employee performance, which finally establishes a positive relationship between human capital management practices and organisational performance. Traditionally, in banking sector, there was no such concept of human resource development and so for, human resource department was not the part of organisational structure. As professionalism and competition are increasing in banks, a need of human development initiative is much felt now. To fulfil the gap, banks are setting human resource department in their system. Now a days according to required benchmarks, the banks are also trying to establish their standard for human capital management. Although, the reports say that most of the commercial banks adopt human capital management practices to an average degree. Some reports also say that HRD department's functioning is far from satisfactory level in majority of the banks yet. But, a positive gesture and initiative in this direction is on the flow. In many banks along with training, other activities like manpower planning and performance appraisal have also been introduced. This paper investigates the background, current status and practice adopted by banks for development of their human capital. The methodology adopted for the study includes literature review for conceptual background, theoretical perspective for establishing the relationship between human capital management practices and employee performance as well as organisational performance, and chronological presentation of empirical research done on human resource development practices in banks.