The Effectiveness of Human Relations in the Banking Industry

The Effectiveness of Human Relations in the Banking Industry

CHAPTER ONE

1.1 Introduction

A 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 relationships and work satisfaction.

As the global workplace becomes a reality, companies, both large and small require human resources. The oppressive nature of informal, email, and mobile phones 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 relationships created at a more personal level. The reality is that successful businesses in the 21st Century are still built around relationships founded on face-to-face meetings 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 a decision.

An organization is said to be a social system, where there is an interpersonal or inter-group, interaction aimed at increasing effectiveness in attaining organizational goals. Though these interactions may involve personal affairs, to a large extent, the interaction is related to the role expectations in a group or in the position occupied by the 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 oversubscribed 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 pay both interim and final divides 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 shareholder’s funds have grown to over 11.7 billion, with an asset-based of 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 models for society.
• Values
• Learning organization
• Professionalism and service excellence
• Commitment to excellent 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 complementary strengths 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 ($1.17 billion) balance sheet size of N493 billion ($ 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 acts as the CEO of the region.

Banking Services

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

2.3 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 the lack of good human relations in firms today and it is still handled at every level in most organization.

However, opportunities still hold for firms to change this situation, which would be looked at with the aim of laying or carrying out this research work.

2.4 Aims and Objectives

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

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

iii. To find out how human relations have 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 how human relations 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.

2.5 Statement of Hypothesis

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

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

2.6 Significance of the Study

The significance of the study is clearly stated below:

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

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

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

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

The significance of this study cannot be over-emphasized as the adoption of this new approach to firms advancement can improve employees’ performance, productivity, efficiency, and effectiveness and employees’ attitude toward work and gain 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 relations in the Banking industry with a case study of Guaranty Trust Bank (GTB) Kaduna. The study circumscribes Human Relations and how they 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 demands like preparation for tests, assignments, and paper presentations took a lot of time for one to go out and source 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 consists of units, functions, decisions, and departments and formally constituted work teams into which activities related to particular processes, projects, products, customers, or professional disciplines 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 behavior – This is concerned with how people within organizations act, individually or in groups, and how organizations function, in terms of their structure and processes Nadler and Tushman (1980).

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