Brief History of HSBC:

HSBC is one of the largest banking and financial services organizations in the
world. HSBC’s headquarter is in London. The HSBC Group is named after its
founding member, The Hongkong and Shanghai Banking Corporation Limited,
which was established in 1865 to finance the growing trade between China and
Europe. HSBC extended its operation around the globe by maintaining an
international network of around 9,500 offices in 86 countries and territories in
Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. HSBC
provides a comprehensive range of financial services e.g. personal financial
services, commercial banking, corporate banking, investment banking, private
banking, financial consultancy services and other activities. HSBC ensures its
international operations and communications through an international network
linked by advanced technology. The name of HSBC is also become popular to
the mind of bank customers due to its rapidly growing e-commerce capabilities.
With listings on the London, Hong Kong, New York, Paris and Bermuda stock
exchanges, shares in HSBC Holdings plc are held by around 200,000
shareholders in some 100 countries and territories. HSBC offers a
comprehensive range of financial services to individuals, companies and
institutions. This organizes their business into two customer groups, Personal
Financial Services and Commercial Banking; and two global businesses, Global
Banking and Markets, and Private Banking. In total, HSBC serve over 100 million
personal customers and almost three million commercial customers.

Human resource management:

Simply human resource management deals with individuals in terms of

recruitment, training, motivation, leading, promotion, payroll, reward, etc. The role
played by human resource functions is best explained by identifying the key
objectives that they seek to achieve on behalf of organizations either singly or
with the help of other departments. Four objectives form the foundation of all HR
activity. These are:
i. Staffing objectives: Human resource managers are first concerned with
ensuring, that the organization is appropriately staffed and is thus able to draw
on the human resources it needs. ii. Performance objectives: Once the required
workforce is in place, human resource managers seek to ensure that individuals
are as well motivated and committed as possible so as to maximize their
performance in their different roles.
iii. Change-management objectives: A third set of core objectives in nearly every
organization relates to the role played by the human resource function in the
effective management of change.
iv. Administration objectives: The fourth type of objective is less directly related to
achieving competitive advantage; it is simply carried out in order to facilitate an
organization’s smooth running.

Figure-3 shows Harvard framework for human resource management:

Stakeholder
interests
HRM HR Long-term
Policy Outcomes Consequences
Choices

Situational factors

Situational factor: It indicates so many factors that influence human resource

management such as work force characteristics, business strategy and condition,
management philosophy, social values, etc.
Stakeholder interest: This refers to shareholder management, employee groups,
government community and unions.
HRM policy choices: The Harvard framework also given much more emphasize
on employee influence, human resource flow, reward system and work systems.
HR outcomes: It describes commitment, competence, congruence and cost
effectiveness. Long term consequences: This indicates individual well being,
organization effectiveness, and societal well-being.
The key human resource term of HSBC is Diversity. HSBC believe the world is a
rich and diverse place full of interesting cultures and people, who should be
treated with respect and from whom there is a great deal to learn. Employing and
managing diverse people HSBC has become an organization and makes it more
adaptable to new situations. This is not simply about gender, ethnicity, disability
or age: it is about open mindedness, embracing non-conformity and creating
balanced teams. Diversity is a source of opportunity, whether in employment or
customer markets. A generalized market approach will not reach the many
pockets of value to be found in diverse groups of customers. Competitive edge
can be gained from the variety present in our workforce and customer base, and
specific attention to market variation, in, for example: age, (length of) experience,
gender, sexuality, race, religion, culture, nationality, physical ability and
appearance, outside, non-employment, activity and interests, personality,
educational background. A diverse organisation is one that invites embraces and
manages difference in the changing workforce to gain the best from its people
and to provide the best service to its customers.

Key features of HRM of HSBC include:

• Recognition of diversity as a business issue.

• The existence of a widely accepted and practiced set of values.
• An environment where the insights of diverse groups are sought and
welcomed.
• Innovation and creativity are rewarded and recognized.
• A climate where people feel that their background and lifestyle does not
affect perceptions of them as a professional, or affect their opportunities
for development.
 • Flexible working practices are made available, as there is an appreciation
that not everyone can and will work the same hours and in the same way.
• The diverse workforce is visible at every level of the organisation and in
every business area. Maximize and develop existing pools of talent and
skills within HSBC.

Strategies:
Strategies show the ways in which an organization operates its business
towards goals and objectives. At the end of 2003, HSBC launched ‘Managing for
Growth’, a strategic plan that provides HSBC with a blueprint for growth and
development during the next five years. It builds on HSBC’s strengths and it
addresses the areas where further improvement is considered both desirable and
attainable. Management’s vision for the Group remains consistent: HSBC aims to
be the world’s leading financial services company. In this context, ‘leading’
means preferred, admired and dynamic, and being recognised for giving the
customer a fair deal. It will also focus on investing in its delivery platforms, its
technology, its people and its brand to support the future value of HSBC as
reflected in its comparative stock market rating and total shareholder return
(‘TSR’).

HR STRATEGY IN HSBC
The strategy model of GLT HR in HSBC is based on the “Systematic model”
which explains about the Environmental and the Business issues. The
methodology is as:
Assess Feasibility: To make GLT success the number and profile of
associates obtained are based on the time where the behavioural expectations of
the strategy are realistic.
Determine Desirability: Implication of strategy are examined on the basis of HR
policies
Determine Goals: The two main key HR Goals are Contribution and
Composition which are derived primarly from the business strategy. These are
the main issues which are to be focused.

Means for achieving goals: “closer the external and internal fit better is the
strategy in consistence with the need to adapt flexibility to change. External fit
refers to the degree of consistency between HR goals on one hand and the
exigencies of the underlying business strategy and relevant environmental
conditions on the other. Internal fit measures the extent to which HR means
follow from the HR goals and other relevant environmental conditions, as well as
degree of coherency or synergy among various HR”. (hsbc, 2005)

“At HSBC, the human resources function is seen as an integral part of its business
success”.

(Sirimanna, 2007)

HSBC HR Strategy

(Kapilashrami, 2009)
HR Functions of HSBC:
COMMERCIAL STRATEGIC AND LEADING EFFICIENT
RELEVANT

High quality The Business The main basis of Effective and

strategic and Agenda has been HSBC operational efficient
transactional influenced with execution underpinned by
support are their Strategic strategy is skilled robust processes,
operated by HR and deeply systems and
as a globalaised expertise HR. metrics
Business
framework Realizing greater
HSBC is HSBC acts as a benefits from off-
By undertaking responsible and attraction for shoring/
transparent ready to adapt their HR talent in outsourcing, and
measurement the changes the market. delivering high
HSBC supports within the quality services
the superior market. to the Group
values to their through a
customers variable cost
through their model
Business Agenda.

Stakeholders management:
The most important issue of success is now stakeholder’s management
and communication. Freeman (1984) used a term to show the importance of
stakeholder’s management ‘stakeholder’s management capability (SMC).’
Through this concept Freeman suggests that managers and firms may reside at
three levels of stakeholder’s management refinements or sophistication.
Level 1: the rational level. This is the level of stakeholder’s identification. Most
organization knows who their stakeholders are, but many have not carefully
analyzed the nature of the stakes. Level 2 of SMC is the process level. At this
level organization go a step further and develop and implement organizational
process by which the firm may scan the environment and receive relevant
information about stakeholders that is then used for decision making process.
Level 3, the highest level of SMC is the transactional level. At this highest level of
SMC managers take the initiative in meeting stakeholders and strive to
communicate with them and to be responsive to them and to anticipate their
needs (Robert T, 2000).
Since the late 1980s, mangers in many organizations have started to realize that
their organizations are dependent upon a range of stakeholding groups instead
of just a rather select group of financial investors or customers alone (Preston L.
E. 1990). Widespread adoption of the stakeholder perspective in business marks
a move away from the neo-classical economic theory of organizations to a socio-
economic theory, within which the stakeholder perspective is embedded.
The neo-classical economic theory suggests that the purpose of organizations is
to make profits in their accountability to themselves and shareholders and that
only by doing so can business contribute to wealth for itself as well as society at
large.
The socio- economic theory suggests, in contrast, that the nation of
accountability in facts looms larger to other groups outside stakeholders who are
important for the continuity of the organization and the welfare of the society.
The following figure-1 shows Stakeholders model of strategic management (See
Donaldson, 1995).
Figure-1

Investors Political
Governments groups

Suppliers ORGANIZATION
Customers

Trade
Communities
Association
Employees
Stakeholder management assumes that all persons or groups with legitimate
interests in an organization do so to obtain benefits and there is in principle no
priority for one set of interests and benefits over another.
HSBC recognizes its stakeholders from it’s inception of business. Day by day the
communication network of HSBC with its stakeholders has become stronger
what provided HSBC competitive advantages than competitors. The stakeholders
of HSBC’s are:
• Customers: HSBC is serving over 125 million customers. Its employees
conduct regular surveys to monitor customer satisfaction. Modern e-
commerce facilities like online banking makes easier communication for it’
• Colleagues: Today HSBC Group employs 330,000 in 10,000 offices in 83
countries and territories. Stakeholder’s management of HSBC assures its
employees a great place to work.
• Suppliers: HSBC has developed an Ethical Code of Conduct for Suppliers
of Goods and Services which spells out its expectations of suppliers’
environmental practices and employment conditions.
• Non-governmental organizations: HSBC maintains regular contact with a
number of non-governmental organizations representing wider society,
including its HSBC Climate Partnership partners The Climate Group,
Earthwatch Institute, Smithsonian Tropical Research Institute (STRI) and
WWF.
• Governments and regulators: HSBC also participate in numerous
government-led and financial services industry working parties. The Group
does not make contributions to political parties.
• Investors: Executive Directors of HSBC lead it’s executives engagement
efforts with the investment community through a range of activities and
reports including the Annual Report and Accounts, the Annual Review,
the Annual General Meeting.
 • Special Interest: HSBC works with other companies and organizations on
a range of issues including human rights, sustainability, bribery and
money laundering, and reporting.

Performance management:

In this section, it would involve me to put information regarding 'performance

management', and some examples of the following methods
that HSBC uses to manage the performance of its employees:

* Performance reviews including appraisals;

* Self evaluation;

* Peer evaluation;

* Target setting for individuals and groups;

* Measuring individual and group output/production.

And to find information on just how important training and development

is to HSBC, in terms of enhancing the performance of individuals and
groups of employees, and the need of being aware for competitive
businesses to link performance reviews and evaluations to appropriate
training and development needs of individuals.

The information of understanding the environment which HSBC attempts

to manage the performance of their employees, in particular therefore,
I would need to understand the key aspects of legislations affecting
factors, such as the maximum number of hours employees can work in a
week, etc, the regulations governing leave arrangements (including
maternity and paternity leave) and minimum wage rates.

And finally within this section I would need to acquire the knowledge
of just how employee motivation and the significance of both financial
and non-financial factors in terms of motivation, and the
identification of the influence that the following motivation
theories/ideas have had, on the way's in which HSBC manages its
employees:

* Frederick Taylor's principles of scientific management;

* Abraham Maslow's hierarchy of needs;

* Douglas McGregor's Theory X and Y;

* Frederick Herzberg's two-factor theory.

I would also have to cover the responsibilities that are covered by

the human resources function at HSBC, and the importance of these
resources to HSBC. I would also need to understand how internal
staffing information and external labour market information can help
plan human resources at HSBC and how they will use this information. I
would also need to understand how any possible conflicts of interest
between the human resource functions that would take place, and how
they will affect the business.

And finally I would need to acquire information based on, the purpose
of performance management and HSBC's approach to motivational theory,
and information on one human resources job role, with examples of how
the work is carried out and how it is evaluated in terms of its
contribution to the business
REWARDS:
Argument: Performance Causes Satisfaction: If high levels of performance
cause job satisfaction, the message to managers is quite different. Rather than
focusing first on peoples’ job satisfaction, attention should be given to helping
people achieve high performance; job satisfaction would be expected to follow.
Research indicates an empirical relationship between individual performance
measured at a certain time period and later job satisfaction. A basic model of this
relationship, based on the work of Edward E. Lawler and Lyman Porter,
maintains that performance accomplishment leads to rewards that, in turn, lead
to satisfaction. In this model rewards are intervening variables; that is, they “link”
performance with later satisfaction. In addition, a moderator variable—perceived
equity of rewards—further affects the relationship. The moderator indicates that
performance will lead to satisfaction only if rewards are perceived as equitable. If
an individual feels that his or her performance is unfairly rewarded, the
performance–causes–satisfaction relationship will not hold.

Argument: Rewards Cause Both Satisfaction and Performance:

This final argument in the job satisfaction–performance controversy is the most
compelling. It suggests that a proper allocation of rewards can positively
influence both performance and satisfaction. The key word in the previous
sentence is proper. Research indicates that people who receive high rewards
report higher job satisfaction. But research also indicates that performance-
contingent rewards influence a person’s work performance. In this case, the size
and value of the reward vary in proportion to the level of one’s performance
accomplishment. Large rewards are given for high performance; small or no
rewards are given for low performance. And whereas giving a low performer only
small rewards initially may lead to dissatisfaction, the expectation is that the
individual will make efforts to improve performance in order to obtain greater
rewards in the future. The point is that managers should consider satisfaction
and performance as two separate but interrelated work results that are affected
by the allocation of rewards. Whereas job satisfaction alone is not a good
predictor of work performance, well-managed rewards can have a positive
influence on both satisfaction and performance.

Application of Schuler’s Model:

Application and analysis of Sparrow’s Model:

Conclusion:

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