EFFECTIVENESS OF HUMAN RELATIONS IN THE BANKING INDUSTRY

CHAPTER ONE

1.1       Introduction

Human Resource is a management approach that is aimed at understanding how psychological and social process interacts with the work situation to influence performance. Human relations are the first major approach to emphasize information work relationship and work satisfaction.

As global workplace becomes a reality, companies, both large and small require human resource. The oppressive nature or informal, email and mobile phone now ensures that a manager is continually fed with information. However, these are still no more than supporting tools in business life, helping to maintain good relationship created at more personal level. The reality is that successful businesses in the 21st Century are still built around relationship founded on face to face meeting with customers, suppliers and employees.

For many, it is when they look at faces, before they know whether they should sign a deal, promote or take decision.

An organization is said to be a social system, where there is an interpersonal or inter-group, interaction aimed at increasing effectiveness at attaining organizational goals. Though these interactions may involve personal affairs, to a large extent, the interaction is related to the role expectations in group or in position occupied by sole occupant.

1.2   Background of GTB

Sincerely, Guaranty Trust Bank Plc was incorporated in July 1990, as a private limited liability company, wholly owned by Nigerian individuals and institutions. The bank was licensed as a commercial bank in August of the same year and commenced operations in February, 1991.

In September 1996, Guaranty Trust bank became a public quoted company, winning the prestigious president’s award in its first year on the stock exchange, and again in the year 2000. and 2003. Guaranty Trust Bank Plc held its public offer in 2001. This was over subscribed by 1.17% and is a testimony to the Bank’s viability as a profitable investment.

The Bank has over the years been committed to awarding excellent cash returns on shareholder investment, remaining one of the existing institutions in Nigeria that pays both interim and final divided each financial year.

Guaranty Trust Bank Plc obtained a Universal banking license in February 2002. The Bank’s reputation as an excellent financial service provider and its financial capacity to meet obligations as and when they fall due has led to a consistent appreciation of its risk asset rating. This currently stands at Tripple A, the highest rating on the Agusto & Co. Limited rating scale.

The Bank is today recognized as one of the most professional and profitably run banks in Nigeria. From a start-up capital of 25 million in 1991, the Banks shareholders funds have grown to over 11.7 billion, with an asset based over 160 billion. Annual revenues of 18 billion

Guaranty Trust bank started based on three fundamental aspirations:

-               Exceptional customer service

-               Excellence and superior financial returns

-               Creating role model for society.

Values

-               Learning organization

-               Professionalism and service excellence

-               Commitment to excellence financial returns

-               Unique culture

Other Subsidiaries

1.   Guaranty Trust Bank Gambia Ltd with 78% shareholding

2.   Guaranty Trust Bank Sierra Leone Ltd with 87% shareholding

3.   Guaranty Trust Bank Ghana Ltd with 78% shareholding

4.   Guaranty Trust Assurance with 94% shareholding

5.   GTB Register Ltd with 99% shareholding.

Ownership Structure

The shareholding structure of GTBank is spread amongst a group of corporate and individual investors who possess complimentary strength totally committed to the long term corporate vision of the bank to become a role model in the banking industries, such as one of Nigeria’s largest and most profitable bank and as a well respected west African (WA) financial service player.

Shareholders fund of N39 billion ($300 million) and market capitalization in excess of N149 billion ($1.17 billion) balance sheet size N493 billion ($ 3.79 billion).

Operating Structure

GTBank has over 100 business locations in Nigeria with 6 regions across the country, namely.

-         North West

-         South West

-         South East

-         North East

-         Abuja North Central

-         Lagos

Each region is headed by a Regional Manager who act as the CEO of the region.

Banking Services

GTBank provides a full range banking services, which include personal and corporate savings, account fund transfer, foreign exchange services, loans and advances, treasury functions and deposit, issuance of advance payment services, guarantees and performance bonds, collection services and correspondent banking services. The bank is fully equipped with latest technology in all its branches and it operates online services.

1.3       Statement of the Problem

The choice of this topic “Human Relation as a Tool for Effective Management in the Banking Industry” is to look at the organization and its management perspective in terms of Human Relations.

Basically, human resource had gained a permanent role within the organization; it is important to note that unless the management of the organization support human relations, the success of the organization (Banking industry) may just be a façade.

This research work will therefore address the following problems:

(a)  How effective is the Human Relation System in the banking industry?

(b)  How motivated are the employees through social interactions?

(c)  How effective is communication in the banking industry?

(d)  Does psychological factors influence performance?

These and other related problems are what I intend to critically look into; it is also important to state here that one of the fundamental problems of employees poor productivity is lack of good human relation in firms today and it is still handled at a every level in most organization.

However, opportunities still holds firms to change this situation, which would be looked at with the aim of laying or carryingout this research work.

1.4 Aims and Objectives

This study is intended to address myriads of objectives which include:

ii.            To find out how human relations has improved the level of standard of performance.

iii.           To find out how human relations has assisted in achieving effectiveness in management.

iv.          To discover, the effect of supervision and or group performance of management.

v.           To make concrete, advice or suggest on how human relation can be used for effective banking industry.

vi.          And to promote a reference point where future researchers or students can draw inspiration for their intellectual nourishment.

1.5       Statement of Hypothesis

Ho: Human Relation does not serve as a tool for effective management in banking industry.

HI: Human Relation serve as a tool for effective management in banking industry.

1.6       Significance of the Study

The significance of the study are clearly stated below:

1.       The study will help Guaranty Trust Bank (GTB) and possibly other banks in the banking industry to improve or implement Human Relation policy inside to control problems faced from such a cause.

2.       Human Relations can also enlighten workers (Industrial and groups) about the concept of human relations and its implications to management effectiveness.

3.       The study will reveal the relationship between human relation and productivity as it relates to organisation’s growth and survival.

4.       The study will help identify benefits accrued to the Banking industry in the area of human relation and effective management.

The significance of this study cannot be over-emphasised as the adoption of this new approach to firms advancement can improve employees performance, productivity, efficiency and effectiveness and employees attitude toward work and gaining a highly competitive advantage over other equally competitive and commercially oriented firms.

1.7       Scope and Limitation of the Study

This study is centered on Human Relation in Banking industry with a case study of Guaranty Trust Bank (GTB) Kaduna. The study circumscribe around Human Relations and how it can be used as a tool for effective management, the study is under a lot of constraints.

The time for the study is quite long, but due to academic demand like preparation for tests, assignments, and paper presentations took a lot of time for one to go out and source for information.

Financial constraint was another major limitation, which made it uneasy for the materials to be readily available at the appropriate time.

The restrictions of Guaranty Trust Bank made it almost impossible to obtain details about the organization.

1.8       Definition of Terms

Organization – Can be regarded as a framework for getting things done. It consist of units, function, decisions, departments and formally constituted work teams into which activities related to particular processes, projects, products, customers or professional discipline are grouped together (Micheal Armstrong 2008). 

Attitudes – An attitude can broadly be defined as a settled mode of thinking. Attitudes are evaluative. As described by Malain et’al (1996).

Organizational behaviour – This is concerned with how people within organizations act, individually or in groups, and how organizations function, interms of their structure and processes by Nadler and Tushman (1980).

Grapevine – Refers to the informal and unofficial channels of communication in an organization by Cole (2005).

Value – Values are believes in what is best or good for the organization and what should or ought to happen.

Norms – Norms are written rates or behaviour, the rates of the game that provide informal guidelines on how to behave.

Group – A group is basically a collection of individuals, contributing to some common aim under the direction of a leader, and who share a sense of common identity.

Formal group – Formal groups are set up by the management of an organization to undertake duties in the pursuit of organization goals. Cole (2005).

Informal group – Informal groups or organizations are those groupings, which employees themselves have developed in accordance with their own need.

Management – Management is a operational process initially best dissected by analyzing the managerial functions. The five essential management functions are: Planning, organizing, staffing, directing and leading, and coordinating. Koontz and O’Donnell (1984).