February 6, 2006	Monday	Muharram 7, 1427

Today, one of the two fast growing sectors is banking (the other is telecom). Various variables in banking especially consumer banking are affecting it in a complex yet dynamic manner, which is making the consumer side a difficult area to work in. One such variable is “the turnover rate” of employees.

Gone are the days when one was employed in a bank and stayed in it, like the Japanese lifetime job. Now, the consumer banking sector, the human resource faces a key challenge of how to retain its employees, the turnover of the first line managers is something that happens monthly, if not on weekly basis.

This article is based on observations and semi-structured interviews with middle management staff at two multinational and three local banks at Islamabad and Ralawpindi.

Whether we like or dislike this trend, we know that it is there, the question is that how is it effecting our human resource management? The concepts of customer service relationship (Viney & Tyson 1997), employee ownership, and transformational leadership (Luthans 1980) tend to be negated by this trend.

Aside from money all the other traditional motivational approaches have a negligible effect (Herzberg 1957, Maslow 1954, McGregor 1960 , and Vroom 1964).

To elaborate this aspect, the employees hired at the entry level (often known as relationship managers) leave within a short period of time (between two to six months). In such a short time, they can not develop employee ownership, nor can their immediate or reporting supervisor develop relationship with them, and these employees are not focused on customers, because such frequent movements lead to lack of long- term relationships with customers and the organization.

In relation to motivational approaches, it is primarily money that motivates employees at this level, aside from this, all other motivational tool like work environment, type of management, content and load of work tend to have negligible effects.

Another interesting finding is that, many would think that money must be the first and foremost priority because of need, but even those who come from affluent families tend to go for more money rather than any other factors mentioned above. (Need is defined as something without which comfortable living is not possible).

However, the flip side of the coin is that those who leave feel that their previous employer hired them at a cost/price much lower than their worth therefore these employees are able to find work so quickly else where.

It is thought that it is the responsibility of the banks to discourage such behaviour patterns as it is damaging the sector and the service provision of all.

Also at the individual bank level, the total remuneration should be set in relation to the market reference point (Armstrong & Murlis 2004) so that higher-level offers are not an easy option to offer (which is one of the primary reasons of this level of turnover).