HUMAN CAPITAL MANAGEMENT IN NIGERIAN DEPOSIT MONEY BANKS

HUMAN CAPITAL MANAGEMENT IN NIGERIAN DEPOSIT MONEY BANKS

The Complete Project Research Material is averagely 52 pages long and is in Ms Word Format, it has 1-5 Chapters. Major Attributes are Abstract, All Chapters, Figures, Appendix, References Level : BTech/BSc/BA/HND/ND

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CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

There are many arts among men, the knowledge of which is acquired bit by bit by experience. For it is experience that causeth our life to move forward by the skill we acquire, while want of experience subjects us to the effects of chance. (Plato)  The new economic order, or the informational era, will do for human capital what the Industrial Revolution did for physical capital. Human capital and knowledge-based industries are emerging as the key to wealth creation.

The concept of  human capital management’ (HCM) is concerned with obtaining, analyzing and reporting on data that inform the direction of value-adding people management, strategic, investment and operational decisions at corporate level and at the level of front line management. It is, as emphasized by Kearns (2005), ultimately about value. HCM is concerned with purposeful measurement, not just measurement. The defining characteristic of HCM is the use of metrics to guide an approach to managing people that regards them as assets and emphasizes that competitive advantage is achieved by strategic investments in those assets through employee engagement and retention, talent management and learning and development programmes. HCM provides a bridge between Human Resource and business strategy.

The Concept of Human Capital

Individuals generate, retain and use knowledge and skill (human capital) and create intellectual capital. Their knowledge is enhanced by the interactions between them (social capital) and generates the institutionalized knowledge possessed by an organization (organizational capital). These concepts of human, intellectual, social and organizational capital are explained below.

Human capital consists of the knowledge, skills and abilities of the people employed in an organization. The term was originated by Schultz (1961) who elaborated his concept in 1981 as follows: Consider all human abilities to be either innate or acquired. Attributes which are valuable and can be augmented by appropriate investment will be human capital.’ A more detailed definition was put forward by Bontis et al (1999), as follows.

Human capital defined, Bontis et al (1999) Human capital represents the human factor in the organization; the combined intelligence, skills and expertise that gives the organization its distinctive character. The human elements of the organization are those that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long-term survival of any organization. Human capital management has a significant and positive influence on organizational performance. It is recommended among other things that training and development programmes should be prioritized in the banking industries and workers should be made to develop their careers by ensuring their job security and not just being used for the organizational growth.

It is possible as a manager to do things right – lay brilliant plans, draw clear organization charts, set up world- class assembly lines and use sophisticated accounting controls, but still fail by hiring the wrong people or by not motivating subordinates. On the other hand, many managers have been successful even with inadequate plans, organizations, or control. They were successful because they had the opportunity of hiring the right people for the right jobs and motivating, appraising and developing them. It was formally believed that capital is the major obstacle to developing industries before now. However, this is no longer true as it is now the inability of the company to employ the required work force and maintain them that now constitutes an impediment for organizational efficiency and performance. There is no project supported with good ideas, vigor and enthusiasm that has been stopped by capital inadequacy; but there are organizations which growth had been retarded because of inability to hire and maintain very efficient and enthusiastic work force. This, falls under the purview of human capital management.  The concept of human capital has recently received attention from many researchers. They hypothesized that it represents the human factor in the organization, the combined intelligence, skills and expertise that gives the organization its distinctive character. Human capital is the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being. The aspects of human capital that are of most relevance to the organization’s workforce and productivity are: formal learning (learning leading to a qualification); non-certified learning (on-the-job training, work experience, or other learning not leading to a formal qualification); foundation skills; management skills and leadership skills. Employees’ knowledge and skills are known as human capital. It is the core of intellectual capital that drives business performance.

Human capital refers to factors as employees‘ knowledge, skill, capability, and attitudes in relation to fostering performances which customers are willing to pay for and the company‘s profit comes from. Recent surveys reveal that although business executives firmly believes that people are the most important asset that the organization can use to meet its goal, they are at a loss to prove that investment in people lead to improved business results. However, common metrics like Economic Value Added (EVA) and Return on Investment (ROI) shed little light on how organizations human assets are performing. Among the 4M’s namely: Money, Materials, Machines, and Man, what actually makes the organization is Man. Deposit Money Banks (DMB) is a financial institution by the regulatory authority to mobilize deposit from the surplus unit and channel the funds through loans to the deficit unit and performs others financial services and activities(Central Bank Of Nigeria). there are 21DMB in Nigeria example; Access Bank Plc, Citibank Nigeria limited, Diamond Bank Plc, Ecobank Nigeria Plc, Enterprise Bank, Fidelity Bank Plc, First City Monument Bank Plc, Guaranty Trust Bank Plc, Heritage Banking Company Ltd, Key Stone Bank, MainStreet Bank, Skye Bank Plc, Stanbic IBTC Bank Ltd, Sterling Bank Plc, SunTrust Bank Nigeria Ltd, Union Bank of Nigeria Plc, Union Bank Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc.  The Nigerian Deposit Money Banks is very vibrant and the most active in the economy. The sector is presently what makes the economy buoyant; active hence the human capital development needs to be adequate and consists of people’s skills. The right people should occupy the right places at the right time within the organization/industry. A peep into what constitutes the human capital requirement reveals that people with core competences are what most banks employ. The number of workers employed by banks are usually small in nature but of high quality. For efficient human capital development to take place in the banking industry, the members must evolve the learning and development processes. What this means in essence is that the organization must find ways of developing and mobilizing the intelligence, knowledge and creative potential of human beings at every level of organization and become increasingly skilled in placing quality people in key places and developing their full potentials. It will also become increasingly important to recruit people who enjoy learning and relish change and to motivate employees to be intelligent, flexible and adaptive. Kauter (1992) expresses this as the need to develop people as a key lever in human resource management and makes the correction between the learning of organizational member and the survival and effectiveness of the organization.

1.2      Statement of the Problem

Human capital management holds the key to success of any organization. For this to happen the Nigerian banking industry must be able to train and retrain their staff. To do this will amount to paying huge sums of money to conduct Seminars (in-house or outside). Remember that even when the fund for training is available, the employees must develop the right mental attitude for the training. The organization must also create the right environment for its employees. Human resources environment can either be internal or external in nature. The internal environment consists of those sets of controllable factors or variables and forces within the confines of the organization e.g. the value of top management and the technology in use in the organization, for example, if the top management values people and sees them as critical Success Factor (CSF) and adequately rewards them when the need arises, the employees will be at their optimum and the banking industry will continue to grow. Another to consider if the banking industry and its human resource capital management will grow if the technology is in use. During this era of I.T. and globalization, banks should stand up to the challenge. For instance the use of ATM machine has sharpened the future of human capital management in most banks who can afford it. Human Capital management in the Nigerian banking industry is as important as the sector itself. However, there are some problems such as:

  1. Will human capital management solve the problems of banking in Nigeria?
  2. How does Human Capital management assist deposit money banks in Nigeria?
  3. Which positive effect does it have on the shareholder, inventors and the general public?
  4. How best will organization prevent labour unrest turnover irrespective of management of it human resources.
  5. Does time and money spent on human capital management correlate with output and returns from the employees?
  6. Is human capital management a panacea to performance by employees?
  7. Does human capital management reflect in the deposit money banks profitability?
  8. What measures should be taking by banks in terms of human capital management to usher in more profits?
  9. What prospects does human capital management have for the banking industry?
  10. It is right for the employees to be over used just in the name of making more profits?

1. 3     Objective of the Study

The research work is expected to contribute to knowledge; this discovered knowledge will be of great benefit to the following categories:

  1. Government
  2. Investors
  3. Bank etc.

Hence the purpose of the study is:

  1. To ascertain the problems of human capital management in the banking sector (deposit money banks) in Nigeria.
  2. To evaluate and measure how human capital management will contribute and to increased performance in Nigerian deposit money bank.
  3. To evaluate the ability of the present human capital management to fit into the banking sector and face banking competition.
  4. To proffer solutions to the problems of human capital management in Nigerian deposit money banks (filling the existing gap).
  5. To recognize the importance of human capital management as panacea to success and continuous growth in the banking industry in Nigeria.

1. 4     Scope of the Study

The scope of the study is on human capital management in deposit money banks in Nigeria.

Human capital consists of the knowledge, skills and abilities of the people employed in an organization also Human capital refers to investment in education which in embedded in the workers. Some of the training “general” or “transferable” skills which can be used equally productively across different organization. Others provide organization specific skills which enhance the workers’ productivity within the training organization only. These latter skills tend to be those which are best learned or can be learnt on the job. Workers having organization specific skill will only be able to obtain a wage premium in respect of that skill within the organization where they were trained, to leave would mean to seek job in a place where they will be less productive and hence less paid. Two things follow from this, firstly there is an incentive for such workers to remain with the organization in which they acquired their skills. This give the employers a measure of monopoly power over the workers. Secondly however, the loss of specific skills would involve the organization in costly training of new workers. This study has been designed and organized to include a comprehensive evaluation of human capital management with a case study of deposit money banks in Nigeria. It will highlight the problems and prospects inherent in the industry as a whole.

1.5       Significance of the Study

  1. To the Banking sector, this research on human capital management will contribute immensely and impressively to the growth of Nigerian banking industry.
  2. It will play an important role and aid management to realize adequate returns on investment.
  3. To the employees’ human capital management and to serves as a veritable tool in equipping themselves in terms of skill for the present and future challenges.
  4. With adequate investment in human capital management in the banking industry, the investors will be double sure of their investment being in safe hands because no matter how robust the other factors of performance are without labour (human capital) will yield negative result.
  5. It will serve as reference to future researchers who may wish to carry out research work on the performance, problems and prospects of human capital management.
  6. To make recommendations based on the forging study.

1.6      Research Hypothesis

A hypothesis is an assertion, assumption or a statement of facts which has not been proved. However, for our research project, the following hypothesis will be tested:

Ho     =      shall be used for Null hypothesis

H1     =      shall be used for Alternative hypothesis

Hypothesis 1

Ho:   Human capital management will not solve the problems of the Nigerian deposit money banks.

H1:   Human capital management will solve the problems of the Nigerian deposit money banks.

Hypothesis 2

Ho:   Human capital management is not a solution to efficiency in the Nigerian deposit money banks.

H1:   Human capital management is a solution to efficiency in the Nigerian deposit money banks.

Hypothesis 3

Ho:   Human capital management does not aid management in measuring performance.

H1:   Human capital management will aid management in measuring performance.

1.7      Research Methodology

For our research to be complete and reliable, we must collect data. In this case we can source for information through primary and secondary sources. Primary data can be collected using Questionnaire and through personal interview and physical observation. Questionnaire can be administered to the members of staff of any intending organization but in this case banks (deposit money banks).

Secondary data can also be of use to our study. These can be gotten from textbooks, annual accounts, and reports of organization. Since we are dealing with Nigerian deposit money banks, we can obtain their data from their annual reports.

More essential is the use of online facilities such as the Internet. Computers have made work through research easy hence it continued usage by accountants, scientist etc.

1.8      Definition of Terms

  1. (DMB) = Deposit Money Banks: a financial institution by the regulatory authority to mobilize deposit from the surplus unit and channel the funds through loans to the deficit unit and performs others financial services and activities
  2. ATM = Automatic Teller Machine: A machine that automatically pays when withdrawal is made.
  3. Controllable Factors: Factors operating within an organization, which is within the confines of an organization such as size of the organization, value of the top management and technology in use etc.
  4. IT = Information Technology: The use of computer within the organization.
  5. Human Capital: human capital refers to factors as employees‘ knowledge, skill, capability, and attitudes in relation to fostering performances which customers are willing to pay for and the company‘s profit comes from.



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