Be Careful What You Wish For...A Bank Crisis From An HR Perspective
Would you fly on an airline that provided huge bonuses to pilots based on how many passengers and how much freight they could cram on their aircraft and on how few costs they incur? Not unless you were desperate. We really want those people up the front end of our plane to be hired on their skills and their tendencies to comply with regulations and place safety first. While the full details, and cost, of the National Australia Bank $360 million foreign exchange disaster may never surface, the initial findings make interesting reading. Of particular interest are the comments in the PricewaterhouseCoopers' report blaming a culture of arrogance and non-compliance as a key contributor to the forex losses and the bank's new management promising to weed out "cultural misfits". While we don't know what factors were being considered when the rogue traders were being recruited, they probably weren't recruited for their adherence to rules nor excluded for arrogance. It is quite possible the NAB wanted, as many organizations do, people with ambition, an aggressive approach to doing business and were willing to pay for results. Incentives of up to $265,000 were paid to the traders. This case reinforces the importance of organizations spending time identifying carefully the competencies required for the business to be successful. Rather than just a "wish list" or a series of descriptors for some behaviours, we need to ask the question: will someone who has these competencies succeed in our business and is that what we want? There is an old HR joke about about the briefs given for recruitment which often list conflicting attributes: "a real go getter who will quietly do what they are told", "a team player who will work independently." After identifying the desired competencies we can then consider how to recognise and reward people who demonstrate them. Starting with the overall direction of the business, what needs to be achieved, what values are important and what successful people in the past have brought to the business will soon lead to the core competencies required. If a bank was doing this and really examined what its customers needed, integrity may come out fairly high on the list. The behaviours required to demonstrate integrity might then be identified and can be built into the recruitment, training and performance management systems. More importantly, in the case of the NAB, it would be important that incentives could not be earned if there was any doubt at all about integrity. Developing the desired competencies to specific behaviours allows planning, recruitment, training, performance management and remuneration to be congruous. This need not be a major exercise and can bring significant benefits to a business as well as provide considerable protection.
By: Paul Phillips
Article Source: http://www.directorys.uniquearticles.info
Paul Phillips is a Director of Horizon Management Group; a consulting firm which assists businesses manage their people more effectively. He has over 30 years experience in human resources and, while based in Australia, has worked in a number of overseas locations. www.horizonmg.com
Please Rate this Article5 out of 54 out of 53 out of 52 out of 51 out of 5 Not yet Rated
What Are Your Weaknesses? - By : Lucy EvansFactors Influencing the Employee Relations - By : Robert II SmithThe Role of the Administrative Assistant and Office Staff - By : Robert II SmithHow to Use Assessments to Hire Effectively - By : Dana BorowkaNine Tips for Cracking the Personality Code - By : Dana BorowkaTraining Tips From Southeast Asia - Training In Different Cultures - By : Jim OliveroClassification of Contingent Pay for Individuals - By : Robert II SmithSkill-based Pay Management - By : Robert II SmithCrimes and Criminal Records - By : RClarkProtect Your Family by Accessing Public Records - By : RClark
