STUDY OF PROMOTION AND REWARD POLICY

OF STATE BANK OF INDIA

A PROJECT REPORT
SUBMITTED TO THE HIMACHAL PRADESH UNIVERSITY, SHIMLA

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE AWARD OF THE DEGREE OF

MASTER OF COMMERCE

(2015-2017

SUPERVISED BY: SUBMITTED BY:

Dr. Richa Rana Pooja Devi

(Assistant. Professor ) M.Com 4th sem

Roll No 833

Univ.Roll No 86990

DEPARTMENT OF COMMERCE

HIMACHAL PRADESH UNIVERSITY REGIONAL CENTRE

DHARAMSHALA (MOHLI) KHANIARA

 PREFACE

Project is an important part of theoretical studies. It is of an immense importance in the field of

management .It offers the student to explores the valuable treasure of experience and exposure
to real work followed by the industries and thereby helping the students to bridge the gap
between the theories explained in the book and their practical implementations.

Project plays an important role in the future building of an individual so that he/ she can better
understand the real world in which he has work in future. The theory greatly enhance our
knowledge and provides opportunities to bold theoretical with the practical knowledge trainee
gets familiar with certain aspects of industry.

The entire project study has been divided in to five chapters.

First chapter deals with the introduction of the “Promotion and reward policy of state bank of
India and also introduce the Indian banking system.

Second chapter is devoted to the review of existing studies on Promotion and reward policy of
with a view to have a better understanding of the problem in this related field.

Third chapter is related with the research design and methodology adopted for the purpose of
the study.

Forth chapter suggest the steps and method through which the study the has been preceded. It
deals with the analysis and interpretation portion of various tables showing the data collected
related to the study.

Fifth chapter is devoted finding, conclusion, limitations and suggestions.

 CERTIFICATE

This is to certify that Miss. POOJA student of M.COM 4th sem. of HPU
Regional Centre Dharamshala, Khaniyara, Mohli has completed her project report
on the topic of “STUDY OF PROMOTION AND REWARD POLICY OF
STATE BANK OF INDIA ”Under the supervision and guidance of Dr. RICHA
RANA. The technique used and the data reported in the project report are genuine
to the best of my knowledge. It represents their original work of the project report
is worthy of consideration for the award of master of commerce. To best of my
knowledge the report is original and has not been copied or submitted anywhere
else .It is an independent work done by her.

Date :- ( Dr. Richa Rana)

Place :- Dharamshala
 ACKNOWLEDGEMENTS

I have taken effort in this project. However it would not have been possible
without the grace of GOD and kind support and help of many individuals. I would
like to extend my sincere thanks to all of them.

My special thanks to Dr. KULDEEP ATTRI. (DIRECTOR OF HPU

REGIONAL CENTRE DHARAMSHALA) & Dr. RICHA RANA for giving
me such attention and time.

I am highly indebted to Dr. MANOJ SHARMA (Assistant Prof. of HPU

Regional ) for here guidance and constant supervision as well as for providing
necessary information regarding the project & also for her support in completing
the project. I would like express my gratitude towards my parents and friends for
their support and encouragement which help me in completion of this project. My
thanks and appreciations also go to all my teachers who have willingly helped me
out with their abilities.
CHAPTER -1
INTRODUCTION
 AN INTRODUCTION TO INDIAN BANKING SYSTEM

INTRODUCTION

The banking sector is the lifeline of any modern economy. It is one of the
important financial pillars of the financial sector, which plays a vital role in the
functioning of an economy. It is very important for economic development of a
country that it’s financing requirements of trade; industry and agriculture are met
with higher degree of commitment and responsibility. Thus, the development of a
country is integrally linked with the development of banking. In a modern
economy, banks are to be considered not as dealers in money but as the leaders of
development. They play an important role in the mobilization of deposits and
disbursement of credit to various sectors of the economy. The banking system
reflects the economic health of the country. The strength of an economy depends
on the strength and efficiency of the financial system, which in turn depends on a
sound and solvent banking system. A sound banking system efficiently mobilized
savings in productive sectors and a solvent banking system ensures that the bank
is capable of meeting its obligation to the depositors.

In India, banks are playing a crucial role in socio-economic progress of the

country after independence. The banking sector is dominant in India as it accounts
for more than half the assets of the financial sector. Indian banks have been going
through a fascinating phase through rapid changes brought about by financial
sector reforms, which are being implemented in a phased manner.

The current process of transformation should be viewed as an opportunity to

convert Indian banking into a sound, strong and vibrant system capable of

playing its role efficiently and effectively on their own without imposing any
burden on government. After the liberalization of the Indian economy, the
Government has announced a number of reform measures on the basis of the
recommendation of the Narasimhan Committee to make the banking sector
economically viable and competitively strong.

The current global crisis that hit every country raised various issue regarding
efficiency and solvency of banking system in front of policy makers. Now, crisis
has been almost over, Government of India (GOI) and Reserve Bank of India
(RBI) is trying to draw some lessons. RBI is making necessary changes in his
policy to ensure price stability in the economy. The main objective of these
changes is to increase the efficiency of banking system as a whole as well as of
individual institutions. So, it is necessary to measure the efficiency of Indian
Banks so that corrective steps can be taken to improve the health of banking
system.

EVALUATION OF INDIAN BANKING

The period of last six decades has viewed many macro economic development of
India. The monitory, external and banking policies have undergone several
changes. The structural changes in the Indian financial system specially in
banking system has influence the evaluation of Indian Banking in different ways.
After the independence and implementation of banking reforms, we can see the
changes in the functioning of commercial banks. In order to understand the
changing role of commercial banks and the problems and challenges, it would be
appropriate to review the major development in the Indian banking sector.
Evaluation of Indian banking may be traced through four distinct phases

1. Evolutionary phase (Prior to 1947)

2. Foundation phase (1947-1969)

3. Expansion phase (1969-1990)

4. Consolidation and Liberalization phase (1990 to till)

 The present chapter analyses the above phases and structure of the banking
sector in India. The main objective of this chapter is to setup the ground and
logic for the next chapter.

Evolutionary phase (Prior to 1947)

According to the Central Banking Enquiry Committee (1931), money lending
activity in India could be traced back to the Vedic period, i.e., 2000 to 1400 BC.
The existence of professional banking in India could be traced to the 500 BC.
Kautilya‟s Arthashastra, dating back to 400 BC contained references to creditors,
lenders and lending rates. Banking was fairly varied to the credit needs for the
trade, commerce, agriculture as well as individuals in the economy, Mr. W.E.
Preston, member, Royal Commission on India Currency and finance set up in
1926, observed “….. It may be accepted that a system of banking that was
extremely suited to India’s then requirements was in force in that country many
countries before the science of banking become an accomplished fact in England.”
They had their own inland bills of exchange or Hindi’s which were the major
instruments of transactions. The dishonoring of bundies was a rare at that time as
most banking worked on mutual trust, confidence and without securities.

The first western bank of a joint stock verity was Bank of Bombay, establishing
1720 in Bombay. This was followed by bank of Hindustan in Calcutta, which was
established in 1770 by an agency house. This agency house and banks were close
down in 1932. The first „Presidency Bank‟ was the Bank of Bengal established in
Calcutta on June 2, 1806 with a capital of Rs.50 Lakh. The Government
subscribed to 20 percent of its share capital and shared the privilege of appointing
directors with voting rights. The bank had the task to discounting the treasury bills
to provide accumulation to the Government. The bank was given powers to issue
notes in 1823. The Bank of Bombay was the second presidency bank set up in
1840 with a capital of Rs. 52 Lakh, and the Bank of
Madras the third Presidency bank established in July 1843 with a capital of Rs. 30
Lakh. The presidency banks were governed by Royal charters. The presidency
banks issued currency notes until the passing of the paper currency Act, 1861,
when this right to issue currency notes by the presidency banks was taken over
and that function was given to the Government. The presidency bank act, which
came into existence in 1876, brought the two three presidency banks under a
common statute and imposed some restrictions on their business. It prohibited
them from dealing with risky business of foreign bills and borrowing abroad for
lending more than 6 months.

The presidency banks were amalgamated into a single bank, the Imperial Bank of
India, in 1921. The Imperial Bank of India was further reconstituted with the
merger of a number of banks belonging to old princely states such as Jaipur,
Mysore, Patiala and Jodhpur. The Imperial Bank of India also functioned as a
central bank prior to the establishment of the Reserve Bank in 1935. Thus, during
this phase, the Imperial Bank of India performed three set of functions via
commercial banking, central banking and the banker to the government. The first
Indian owned bank was the Allahabad Bank set up in Allahabad in 1865, the
second, Punjab National Bank was set up in 1895 in Lahore, and the third, Bank
of India was set up in 1906 in Mumbai. All these banks were founded under
private ownership. The Swadeshi Movement of 1906 provided a great momentum
to joint stock banks of Indian ownership and many more Indian commercial banks
such as Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and
Bank of Mysore were established between 1906 and 1913. By the end of
December 1913, the total number of reporting commercial banks in the country
reached 56 comprising 3 Presidency banks, 18 Class „A‟ banks (with capital of
greater than Rs.5 lakh), 23 Class „B‟ banks (with capital of Rs.1 lakh to 5 lakh)
and 12 exchange banks. Exchange banks were foreign owned banks that engaged
mainly in foreign exchange business in terms of foreign bills of exchange and
foreign remittances for travel and trade.
 Table 1.1 Numbers of Banks, Capital and Deposits

End Number of reporting commercial Paid capital and reserves Deposits

Dec. banks
Pre- Clas Ex- Clas Tota Pre- Clas Clas Tota Pre- Clas Ex- Clas Total
sidency s A* chang s B* l sidency s A* s B* l sidency s A* s B*
chang
imperia e imperia imperia
e bank
l bank bank l bank l bank
1870 3 2 3 0 8 362 12 0 374 1197 14 52 0 1263
1880 3 3 4 0 10 405 21 0 426 1140 63 340 0 1543
1890 3 5 5 0 13 448 51 0 499 1836 271 754 0 2861
1900 3 9 8 0 20 560 128 0 688 1569 808 1050 0 3427
1910 3 16 11 0 30 691 376 0 106 3654 256 2479 0 8699
7 6
1913 3 18 12 23 56 748 364 0 111 4236 225 3104 151 9750
2 9
1920 3 25 15 33 76 753 109 81 192 8629 711 7481 233 2345
3 7 5 8
1930 1 31 18 57 107 1115 119 141 244 8397 632 6811 439 2197
0 6 6 3
1934 1 36 17 69 123 1128 126 149 254 8100 767 7140 511 2342
7 4 7 8

Source: Statistical tables relating to Banks in India, various issues

By 1930, the number of commercial banks increased to 107 with the Imperial
Bank of India still dominating the Indian banking sector (Table 1.1). Besides, at
end-March 1929, 158 cooperative banks also existed. The number of co-operative
banks rose sharply (more than doubled) between 1922-23 to 1928-29 (Table 1.2).
Although greater than commercial banks in number but the size of deposits of co-
operative banks was much smaller.
 Table 1.2 Numbers of Co-operative Banks

Class A* Class B* Total

Year No. Capital Deposit No. Capital Deposit No. Capital Deposit
And and and
Reserves Reserves Reserves

1922-23 5 44 341 63 131 502 68 175 843

1925-26 10 91 538 104 203 930 114 254 1468
1928-29 18 163 901 140 277 1487 158 440 2388

World War I and its Impact on Indian banking sector

The World War I (1913-1918) has affected badly the Indian economy and created
many problems like high Inflation, low productive of agriculture sector. During
the war period, a large number of banks failed. Some banks that failed were also
doing trading function with banking function. Mast of the banks that failed during
war period had low capital base. Several exchange banks also failed during this
period mainly due to global reasons. The great depression (1928-1934) also
affected Indian banking industry as the number of banks failing raised sharply due
to high NPAs. The capital of bank that failed, on an average, was lower than the
average size of the capital of reporting banks in categories A and B7. Reserve
Bank of India was setup in 1935, as bank failure and neglecting of agriculture
sector were the main reasons for the establishment of Reserve Bank of India. Yet,
even after 12 years of the Reserve Bank establishment, bank failure did not stop.
The major concern was the existence of non-scheduled banks as they remained
outside the preview of the Reserve Bank. Banking was more focused on urban
areas and the credit requirements of agriculture and rural sectors were neglected.
These issues were solved when the country attained independence.
Foundation Phase (1947-1969)
When the country became independent in 1947, India banking was entirely in the
private sector. In addition to the Imperial Banks, there were five big banks, each
holding public deposits aggregating Rs.100 Cr. and more, Central Bank of India
Ltd., Punjab National Bank Ltd, Bank of India Ltd, Bank of Baroda Ltd. And
United Commercial Bank Ltd. At the time of independence, the banking structure
was domestic scheduled commercial banks. Non- scheduled banks, though large
in number but constituted a small share of the banking sector. The banking system
at the time of independence was largely urban- oriented and remained beyond the
reach of the rural population. A large percentage of the rural population had to
depend on the money lenders as their main source of credit banks. Rural access
was grossly inadequate, as agriculture was not considered as an economic
proposition by banks in these days. Thus, the rural economy, in general, and
agriculture sector in particular, which is the crucial segment of the Indian
economy was not supported by the banking system in any form.

Establishment of State Bank of India

At the time of Independence, the Imperial Bank of India and all other commercial
banks were urban oriented. Therefore it is the need of the hour, to provide the
banking facility to the rural area. It was suggested that the Imperial Bank of India
should extent its branches to Taluka or Tehsil to provide the banking services for
the neglected area. The Imperial Bank of India was given a target of opening 114
offices within a period of five years commencing from 1st July, 1951. But
Imperial Bank of India could open only 63 branches till June 20, 19558. Imperial
Bank of India was taken over by the Government under the State Bank of India,
Act, 1955, effective from July 1, 1955. Under the State Bank of India (Subsidiary
Banks) Act, 1959, eight state owned/sponsored banks were taken over by State
Bank of India as its subsidiaries, now called Associate Banks. With amalgamation of
two of them (State Bank of Bikaner and Jaipur), the number of these associate
banks has come down to seven. At present, state bank group consists of six banks.

Expansion Phase (1969-1990)

Although the banking system had made some progress in terms of deposit growth
in the 1950s and the 1960s, its spread was mainly concentrated in the urban areas.
It was felt that if bank funds had to be channeled for rapid economic growth with
social justice, then most of the banks should be nationalized9. Accordingly, the
Government nationalized 14 banks with deposits of over Rs.50 Cr. by the Banking
Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969. These
banks were the Central Bank of India, Bank of Maharashtra, Dena Bank, Punjab
National Bank, Syndicate Bank, Canera Bank, Indian Overseas Bank, Indian
Bank, Bank of Baroda, Union Bank, Allahabad bank, United Bank of India, UCO
Bank and Bank of India. The main objectives behind the nationalization of the
banks were as follows:

Reduction in the regional imbalance of economic activities.

to make the banking system reaches in hand of rural and semi-urban people.

the aim was to bring a large area of economic activity within the organized
banking system. Although banks penetrated in rural areas, but amount of credit
extended to the weaker section of society was not satisfactory. In 1974 the
Narasimham Committee went into these problems and recommended the
establishment of regional Rural Banks (RRB) under the „Regional Rural Banks
Act, 1975‟.Banking in collaboration with central and State Governments, set up
Regional Rural Banks in selected regions where the co- operative system was
weak and where commercial banks were not very active. On April 15, 1980 six
more private sector banks were nationalized, making the number of public sector
banks 27.
Consolidation and liberalization Phase (1990 to till)
By the time the decade of 1990s started, a number of problems were facing Indian
economy. The situation had become extremely uncontrollable. Fiscal deficit was
constantly growing, balance of payment situation had become extremely critical.
There was pressure from the external sector for putting the domestic economy in
order. The need for initiating radical structural reforms was being greatly
emphasized. Under structural reforms, the emphasis was on relaxing restrictions
which severely impeded the functioning of the market mechanism and led to
inefficiency and sub optimal resource allocation. It was a period when policy
measures were directed towards liberalization, privatization and globalization of
the economy in selective phased manner11. Financial sector reforms constituted
an important component of the structural reforms. The basic objectives of these
reforms was to promote a diversified, efficient and competitive financial sector for
achieving improved efficiency of available savings, greater investment
profitability and accelerated growth of the real sector of the economy. A three-
pronged strategy was adopted under these reforms.

1. Improving the overall monetary policy framework

2. Strengthening the financial institutions

3. Integrating the domestic financial system with the global economy in a phased
manner.

One of the most important policy initiative of this phase was the acceptance and
implementation of many recommendations of far reaching implications for the
financial sector, made by the Narsimham Committee Simultaneously, for
strengthening the securities market, Securities and Exchange Board of India was
made a statutory body and given sufficient power to deal with various fraudulent
practices and scams effectively. A few years later, Insurance Regulatory and
Development Authority was set up to regulate and promote the insurance business
on competitive lines.

In order to improve the financial strength and the profitability of the public sector
banks and tone up the overall Indian financial system by examining all aspects
relating to structure, organization, function and procedures, the Government of
India set up two high level committees with M. Narshimham, a former Governor
of RBI, as their Chairman. The first Committee submitted its report in 1991 and
the second committee, which was set up a few years later, submitted Report in
1998. These reports made certain recommendations for introducing radical
measures. The major thrust of the recommendations was to make banks
competitive and strong and conducive to the stability of the financial system. The
Government was advised to make a policy declaration that there would be no
more nationalization of banks. Foreign banks would be allowed to open offices in
India either as branches or as subsidiaries. In order to promote competitive culture
in banking, it was suggested that there should be no difference in the treatment
between public sector banks and private sector banks.

The Government of India accepted all major recommendations of Narsimham

Reports and started implementing them straightway, despite stiff opposition from
banks unions and political parties in the country. It is primarily because of the
financial sector reforms initiated during the last two decades or so that the Indian
financial system is acquiring fast the shades of a vibrant, dynamic, globalised,
complex system today, creating new opportunities and challenges. But it still
continues to be largely dominated by the presence of a giant public sector
particularly in banking and insurance even though the private sector has been
growing at a much faster rate in the recent years, out-playing the public sector in
the matter of efficiency and performance.
RECENT DEVELOPMENT IN INDIAN BANKING
SECTOR
In the recent year, the banking Industry has been undergoing rapid changes which
is reflecting in banking reforms. Telecommunication and Information technology
are the most significant areas which have changed rapidly. It has accelerated the
broadcasting of financial information which lowering the costs of many financial
activities. In the last few year banking sector has introduce new products: Credit
Cards, ATM, Tele-Banking, Electronic Fund Transfer (EFT), Internet Banking,
Mobile Banking etc. These new products increase the efficiency of banks by
reducing transactions cost. Some of the important areas which developed recently
are discussing here.

RETAIL BANKING CONCEPT

One of the major developments in the banking sector is the introduction of retail
Banking in the country. At present, banks are focusing more on retail banking by
proving various loan facilities to depositors. The banking sector is facing
increased competition from non-banking institution. The Retail Banking
encompasses various financial products (different type of deposit accounts, home
loan, auto loan, credit cards, demate facilities, Insurance mutual funds, credit and
debit cards, ATM, Stock broking, payment of utility bills) catering to diverse
customer groups, offering a host of financial services, mostly to individuals.
Simply speaking, it takes care of the diverse banking needs of an individual. Now
a days, banks are focusing more on individual needs through retail
banking which increased the other income of the banks significantly.
INFORMATION TECHNOLOGY
Information technology (IT) has transformed the functioning of businesses, the
world over. With the innovation in the IT, Indian banking sector has benefited a
lot by offering new products and services. Information technology has helped the
banking sector by opening newer delivery channels to customers – ATMs
networking in the form of shared payment networks, internet banking,
implementation of core Banking solutions, mobile banking etc.

The RBI has played a proactive role in the implementation of IT in the banking
sector. According to RBI the two major advantages of technological adoptions -

A. Reduction in banks operational cost.

B. Facilitating more efficient transactions among customers with in the same

network.

Over the year RBI has increase the role of technology in the day to day operation
of banks. The IT Vision Document, 2011-17 of the Reserve Banks sets out the
roadmap for implementation of key IT applications in banking with special
emphasis on seamless delivery of banking services through effective
implementation of Business Continuity Management (BCM). Information
Security policy, and Business process Re-engineering (BPR).

Public sector banks accounting for more than 60% of the total number of ATMs
as at end March 2012, while close to one third of the total ATMs were attribute to
the new private sector banks. On Comparing the number of off-site and on-site
ATM installed, it has been noted that new private sector banks have largest
number of off-site ATMs in 2011-12, while Public sector banks have largest
number of on-site ATMs. Further, foreign banks have more off- site ATMs than
on-site ATMs in all the financial area.
CONSOLIDATION THROUGH MERGERS
To archive a higher level of efficiency and taking benefits of economics of scale,
mergers and acquisition are increasing in the banking sector. The RBI has been
encouraging the consideration process wherever possible, given the inability of
small banks to complete with large banks which enjoy enormous economies of
scale and scope. It is observe that most of the mergers and acquisitions are
voluntary and market driven between the healthy and financially sound and based
on profitability motive).

BANKING STRUCTURE IN INDIA

Indian banking system consists of “non scheduled banks” and “scheduled banks”.
Non scheduled banks refer to those that are not included in the second schedule of
the Banking Regulation Act of 1965 and thus do not satisfy the conditions laid
down by that schedule. Schedule banks refer to those that are included in the
Second Schedule of Banking Regulation Act of 1965 and thus satisfy the
following conditions: a bank must

(1) Have paid up capital and reserve of not less than Rs. 5 lakh and

(2) Satisfy the Reserve Bank of India (RBI) that its affairs are not conducted in a
manner detrimental to the interest of its deposits.

Scheduled banks consist of “scheduled commercial banks” and scheduled

cooperative banks. The former are further divided into four categories: (1) public
sector banks (that are further classified as “Nationalized Banks and the “State
Bank of India (SBI) banks”); (2) private sector banks (that are further classified as
“Old Private Sector Banks” and “New Private Sector Banks” that emerged after
1991); (3) foreign banks in India, and (4) regional rural banks (that operate
exclusively in rural areas to provide credit and other facilities to small and
marginal farmers, agricultural workers and small entrepreneurs). These scheduled
commercial banks except foreign banks are registered in India under the
Companies Act.

The SBI banks consist of SBI and five independently capitalized banking
subsidiaries. The SBI is the largest commercial bank in India in terms of profits,
assets, deposits, branches and employees and has 13 head offices governed each
by a board of directors under the supervision of a central board. It was originally
established in 1806 when the bank of Calcutta (latter called the Bank of Bengal)
was established, and then amalgamated as the Imperial Bank of India after the
merger with the bank of Madras and the Bank of Bombay. The Imperial Bank of
India was Nationalized and named SBI in 1955. Nationalized banks refer to
private sector banks that were nationalized (14 banks in 1969 and 6 in 1980) by
the central government compared with the SBI banks, nationalized banks are
centrally governed by their respective head offices. In 1993, Punjab National
Bank merged another nationalized bank, New Bank of India, leading to a decline
in total number of nationalized banks from 20 to 19. Regional rural banks account
for only 4% of total assets of scheduled commercial banks. As at the end of March
2001, the number of scheduled banks is a follows: 19 nationalized banks, 8 SBI
banks, 23 old private sector banks, 8 new private sector banks, 42 foreign banks,
196 regional rural banks and 67 cooperative banks. But number of scheduled
commercial banks in India as on 31 October, 2012 as follows: 26 public sector
banks 20 private sector banks.
 Figure 1.1 Banking Structure in India

SCHEDULED BANKS IN INDIA

Scheduled commercial banks Scheduled co-operative banks

Public sector banks Private sector Foreign banks in Regional rural

banks INDIA banks

Nationalized SBI and its Old private sector New private sector
banks associates banks banks
COMPANY PROFILE

TYPE PUBLIC

TRADED AS NSE:SBIN
BSE:50012
LSE:SBID
BSE SENSEX Constituent
CNX NIFTY Constituent
INDUSTRY BANKING FINANCIAL SECURITY
FOUNDED 2nd June, Bank Of Calcutta
27th Jan 1921, Imperial Bank Of India
1st July 1995, SBI
2nd June 1956, Nationalization
HEADQUATERS Mumbai, Maharashtra, India
AREA SERVED Worldwide
KEY PEOPL Arundhati Bhattacharya(Chairperson)

PRODUCTS Consumer banking, corporate banking, finance and insurance,

investment banking, mortgage loans, private banking, private
equity, savings, securities, assets management, wealth
management, credit cards
OWNER Govt. Of India
NO.OF EMPLOYEE 207739
CAPITAL RATIO 13.12%
WEBSITE www.sbi.co.in
OVERVIEW
The State Bank of India, the country‘s oldest Bank and a premier in terms of
balance sheet size, number of branches, market capitalization and profits is today
going through a momentous phase of Change and Transformation the two hundred
year old Public sector behemoth is today stirring out of its Public Sector legacy
and moving with an ability to give the Private and Foreign Banks a run for their
money.

The bank is entering into many new businesses with strategic tie ups Pension
Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking,
Point of Sale Merchant Acquisition, Advisory Services, structured products etc
each one of these initiatives having a huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new
banking models, to expand its Rural Banking base, looking at the vast untapped
potential in the hinterland and proposes to cover 100,000 villages in the next two
years.

It is also focusing at the top end of the market, on whole sale banking capabilities
to provide India‘s growing mid / large Corporate with a complete array of
products and services. It is consolidating its global treasury operations and
entering into structured products and derivative instruments. Today, the Bank is
the largest provider of infrastructure debt and the largest arranger of external
commercial borrowings in the country. It is the only Indian bank to feature in the
Fortune 500 list.

The Bank is changing outdated front and back end processes to modern customer
friendly processes to help improve the total customer experience. With about
11448 of its own branches and another 6500+ branches of its Associate Banks
already networked, today it offers the largest banking network to the Indian
customer. Banking behemoth State Bank of India is planning to set up 15,000
ATMs in the country by March 2010 investing more than Rs 1,000 crore.

RP Sinha, deputy managing director (information technology) of the bank, said:

"We plan to have 25,000 ATMs in the country by March 2010. We will add
15,000 ATMs to the existing ones by end of this fiscal." The bank has almost
10,300 ATMs in the country at present.

According to a senior SBI official, the spot for an ATM counter is taken on lease.
It requires Rs 5.2-5.5 lakh to set up the infrastructure and almost Rs 3.5 lakh for
an ATM machine. "All put together, the cost is around Rs 9 lakh per counter," he
said. Going by the estimate, SBI would require a whopping Rs 1,350 crore for
setting up 15,000 ATMs.

The Bank is also in the process of providing complete payment solution to its
clientele with its ATMs, and other electronic channels such as Internet banking,
debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centers spread
all over the country the Bank is continuously engaged in skill enhancement of its
employees. Some of the training programmes are attended by bankers from banks
in other countries.

The bank is also looking at opportunities to grow in size in India as well as

internationally. It presently has 82 foreign offices in 32 countries across the globe.
It has also 8 Subsidiaries in India – SBI Capital Markets Ltd, SBI Mutual Funds,
SBI factor and commercial services Ltd, SBI DFHI Ltd, SBI Cards and Payment

Services Ltd, SBI Life Insurance Company Ltd, SBI Fund Management Pvt. Ltd,
SBI Canada - forming a formidable group in the Indian Banking scenario. It is in
the process of raising capital for its growth and also consolidating its various
holdings.
BACKGROUND
State Bank of India is the largest and one of the oldest commercial bank in India,
in existence for more than 200 years. The bank provides a full range of corporate,
commercial and retail banking services in India. Indian central bank namely
Reserve Bank of India (RBI) is the major share holder of the bank with 59.7%
stake. The bank is capitalized to the extent of Rs.646bn with the public holding
(other than promoters) at 40.3%.

SBI has the largest branch and ATM network spread across every corner of India.
The bank has a branch network of over 17000 branches (including subsidiaries).
Apart from Indian network it also has a network of 73 overseas offices in 30
countries in all time zones, correspondent relationship with 520 International
banks in 123 countries. In recent past, SBI has acquired banks in Mauritius, Kenya
and Indonesia. The bank had total staff strength of 198,774 as on 31st March,
2008. Of this, 29.51% are officers, 45.19% clerical staff and the remaining
25.30% were sub-staff. The bank is listed on the Bombay Stock Exchange,
National Stock Exchange, Kolkata Stock Exchange, Chennai Stock Exchange and
Ahmadabad Stock Exchange while its GDRs are listed on the London Stock
Exchange.

SBI group accounts for around 25% of the total business of the banking industry
while it accounts for 35% of the total foreign exchange in India. With this type of
strong base, SBI has displayed a continued performance in the last few years in
scaling up its efficiency levels. Net Interest Income of the bank has witnessed a
CAGR of 13.3% during the last five years. During the same period, net interest
margin (NIM) of the bank has gone up from as low as 2.9% in FY02 to 3.40% in
FY06 and currently is at 3.32%.
KEY AREAS OF OPERATION
The business operations of SBI can be broadly classified into the key income
generating areas such as National Banking, International Banking, Corporate
Banking, & Treasury operations. The functioning of some of the key divisions is
enumerated below:

a) Corporate banking

The corporate banking segment of the bank has total business of around
Rs1,193bn. SBI has created various Strategic Business Units (SBU) in order to
streamline its operations.

These SBUs are as follows:

a.1) Corporate Accounts

a.2) Leasing

a.3) Project Finance

a.4) Mid Corporate Group

a.5) Stressed Assets Management

b) National banking

The national banking group has 14 administrative circles encompassing a vast

network of 9,177 branches, 4 sub-offices, 12 exchange bureaus, 104 satellite
offices and 679 extension counters, to reach out to customers, even in the remotest
corners of the country. Out of the total branches, 809 are specialized branches.
This group consists of four business group which are enumerated below:

b.1) Personal Banking SBU

b.2) Small & Medium Enterprises

b.3) Agricultural Banking

b.4) Government Banking

c) International banking

SBI has a network of 73 overseas offices in 30 countries in all time zones and
correspondent relationship with 520 international banks in 123 countries. The
bank is keen to implement core banking solution to its international branches also.
During FY06, 25 foreign offices were successfully switched over to Finacle
software. SBI has installed ATMs at Male, Muscat and Colombo Offices. In
recent years, SBI acquired 76% shareholding in Giro Commercial Bank Limited
in Kenya and PT Indomonex Bank Ltd. in Indonesia. The bank incorporated a
company SBI Botswana Ltd. at Gaborone.

d) Treasury

The bank manages an integrated treasury covering both domestic and foreign
exchange markets. In recent years, the treasury operation of the bank has become
more active amidst rising interest rate scenario, robust credit growth and liquidity
constraints. The bank diversified its operations more actively into alternative
assets classes with a view to diversify the portfolio and build alternative revenue
streams in order to offset the losses in fixed income portfolio. Reorganization of
the treasury processes at domestic and global levels is also being undertaken to
leverage on the operational synergy between business units and network. The
reorganization seeks to enhance the efficiencies in use of manpower resources and
increase manoeuvrability of banks operations in the markets both domestic as well
as international.
e) Associates & Subsidiaries

The State Bank Group with a network of 14,061 branches including 4,755
branches of its seven Associate Banks dominates the banking industry in India. In
addition to banking, the Group, through its various subsidiaries, provides a whole
range of financial services which includes Life Insurance, Merchant Banking,
Mutual Funds, Credit Card, Factoring, Security trading and primary dealership in
the Money Market.

e.1) Associates Banks:

SBI has six associate banks namely

• State Bank of Indore

• State Bank of Travancore

• State Bank of Bikaner and Jaipur

• State Bank of Mysore

• State Bank of Patiala

• State Bank of Hyderabad

e.2) Non-Banking Subsidiaries/Joint Ventures

i) SBI Capital Markets Ltd,

ii) SBI Mutual Funds,

iii) SBI factor and commercial services Ltd,

iv) SBI DFHI Ltd,

v) SBI Cards and Payment Services Ltd,

vi) SBI Life Insurance Company Ltd,

PROMOTION
Each organization needs to maintain a balance between the internal sources of
personnel promotion and external sources by means of recruitment. Hence,
promotion must be based on consistent, fair and clear cut policy. The National
Institute of Personnel Management (NIPM) has suggested a promotion policy on
the following lines:

Drawing up an organization chart to make clear to all the ladder of promotion.

Where there is a job analysis and a planned wage policy, such chart is quite easy
to prepare. Making the promotion system clear to all concerned who may initiate
and handle cases of promotion. Though departmental heads may initiate
promotion, the final approval must lie with the top management; after the
personnel department has been asked to check from its knowledge whether any
repercussion is likely to result from the proposed promotion.

All promotions should be for a trial period to ascertain whether the promoted
person is found capable of handling the job or not. Normally, during this trial
period, he draws the pay of the higher post, but it should be clearly understood
that if he does not make the grade he will be reverted to his former post and
former pay scale.

REWARD SYSTEM
Fat pay package, quicker promotions and incentives are not enough anymore.
Employers need to listen what employees want.

A reward or incentive can be anything that attracts a worker‘s attention and

stimulates him to work.

In the words of Bureckm and Smith “reward systems is a plan or programme to

motivate individual or group performance”. An incentive programme is most
frequently built on monetary rewards, but also includes a variety of non-monetary
rewards or prizes On the other hand French says the incentive system has a
limited meaning that excludes many kinds of inducements offered to people to
perform work, or to work up to or beyond acceptable stands. It is related with
wage payment plans which tie wages directly or indirectly to standard
productivity or to the profitability of the organization or both criteria.

The use of incentives assumes that people‘s actions are related to their skills and
abilities to achieve important longer run goals. Even though many organization by
choice or by tradition or contract. In fact rewards on non performance criteria,
rewards should be regarded as a pay off the performance.

Jack Zigon defines rewards as “something that increase frequency of an employee

action”. This definition points to an obvious desired outcome of rewards and
promotion: to improve performance.

An incentive plan has following important features:-

1. An incentive plan may consist of both monetary and non-monetary elements.

Mixed elements can provide the diversity needed to match the needs of individual
employees.

2. The timing, accuracy and frequency of incentives are the very basis of a
successful incentive plan.

3. The plan requires that it should be properly communicated to the employees to

encourage individual performance, provide feedback and encourage redirection.

DETERMINANTS OF REWARDS
These features are contingencies, which affect the suitability and design of
rewards to varying degrees. The effective use of rewards depends on 3 variables.

1. Individual
2. Work situation

3. Incentive plan

A. The individual and the rewards:

Different people value things differently. Enlightened managers realize that all
people do not attach the same value to monetary rewards, bonuses, prizes or trips.
Employees’ view these things differently be of age, marital status economical
need and future objectives .However even though employees’ reaction to rewards
varies greatly, rewards must have some redeeming merits. For e.g. there might be
a no of monetary and non monetary rewards to motivate employees.

B. The work situation:

This is made up of four important elements,

1) Technology:-

Machine or work system, if speed of equipment operation can be varied, it can

establish range of the rewards.

2) Satisfying Job Assignment:-

A worker‘s job may important a number of activities that he finds satisfying.

Rewards may take the form of earned time off, greater flexibility in hour worked,
extended vacation time and other privileges than individual values.

3) Feedback:-

A worker needs to be able to see connection between works and rewards. These
responses provide important reinforcement.
4) Equity:-

Worker considers fairness or reasonableness as part of the exchange for his work.

Rewards in general are important motivator. Their effectiveness depends upon 3

factors.

• Drives

• Preference value and

• Satisfying value of the goal objects.

TYPES OF REWARDS
There are a number of ways to classify rewards. We have selected three of the
more typical dichotomies: intrinsic versus extrinsic rewards, financial versus non-
financial rewards, and performance-based rewards. These categories are far from
being mutually exclusive.

Intrinsic versus Extrinsic Rewards

Intrinsic rewards are the satisfactions one gets from the job itself. These
satisfactions are self- initiated rewards, such as having pride in one‘s work, having
a feeling of accomplishment, or being part of team. These techniques of job
enrichment, shorter work-weeks, flex-time and job rotation can offer intrinsic
rewards by providing interesting and challenging jobs and allowing employee
greater freedom.

Extrinsic rewards include money, promotions and fringe benefits. Their common
thread is that they are external to the job and come from an outside source, mainly
management. Thus, if an employee experiences feelings of achievement or
personal growth from a job, we would label such rewards as intrinsic. If the
employee receives a salary increase or write-up in the company magazine, we
would label those rewards as extrinsic.

Motivational researchers had generally assumed that intrinsic and extrinsic

rewards were independent; that is, the stimulation of one would not affect the
other. However, research conducted in the late 1960s and early 1970s suggested
that this assumption might be in error.

Early experiments designed to test the independence assumption tended to

support the proposition that when extrinsic rewards like money, promotions or
fringe benefits were used as payoffs for superior performances, the internal
rewards, which are derived from the individual doing what he or she likes, were
reduced. The explanation for these occurrences went something like this. For
money or other extrinsic rewards to be used as effective motivators, they should
be made contingent on the employee‘s performance. But when this is done it
decreases the internal satisfaction the employee gets from doing the job. What has
happened is that an external stimulus has been substituted for an internal one.

Financial versus Non financial Rewards

Rewards may or may not enhance the employee‘s financial well-being. If they do,
they can do this directly- through wages, bonuses, profit sharing and the like; or
indirectly through supportive benefits such as pension plans, paid vacations, paid
sick leaves and purchase discounts.

Nonfinancial rewards cover a smorgasbord of desirable things that are potentially

at the disposal of the organization. Their common link is that they do not increase
the employee‘s financial position. Instead of making the employee‘s life better off
the job, non financial rewards emphasize making life on the job more attractive.
The non financial rewards that we will identify represent a few of the more
obvious; however, the creation of these rewards is limited only by managers’
ingenuity and ability to assess payoffs within their jurisdiction that individuals
within the organization find desirable.

The old saying one man‘s food is another man‘s poison applies to entire subject
of rewards, but especially to the area of non financial rewards. What one
employee views as something I have always wanted, another finds superfluous.
Therefore care must be taken in providing the right non financial reward for each
person; yet where selection has been done assiduously, the benefits to the
organization should be impressive.

Some workers are very status conscious. A paneled office, a carpeted floor, a
large walnut desk or a private bathroom may be just office furnishing that
stimulates an employee toward top performance. Similarly status oriented
employees may value an impressive job title, their own business cards, their own
secretary or a well located parking space with their name clearly pained
underneath the Reserved sign.

Some employees value having their lunch between one and two o‘clock in the
afternoon. If lunch is normally from eleven in the morning until noon, the benefit
of being able to take their lunch at another, more preferred, time can be viewed as
a reward. Having a chance to work with congenial colleagues and achieving a
desired work assignment or an assignment where the worker can operate without
close supervision are all non financial rewards that are within the discretion of
management and, when carefully used, can provide stimulus for improved
performance.
Performance-Based versus Membership-Based Rewards

The rewards that the organization allocates can be said to be based on either
performance criteria or membership criteria. While the managers in the most
organizations will vigorously argue that their reward system pays off for
performance. Few organizations actually reward employees based on
performance.

Performance-based rewards are exemplified by the use of commissions,

piecework pay plans, incentive systems, group bonuses or other forms of merit
plan. On the other hand, membership based rewards include cost-of-living
increases, profit sharing, benefits and salary increases attributable to labour
market conditions, seniority or time in rank, credentials (such as collage degree or
a graduate diploma), or future potential (the recent M.B.A out of a prestigious
university). The demarcation between the two is not always obvious. For instance,
company paid membership in a country club or use of company-owned
automobiles and aircraft by executive may be given for membership or
performance. If they are available to, all middle and upper level executives, then
they are membership based. However, if they are made available selectively to
certain managers based on their performance rather than their entitlement, which
of course implies they can also be taken away, we should treat them as
performance-based rewards for those who might deem them attractive.
 CHAPTER-2
OBJECTIVES OF THE
STUDY
1. Primary Objectives

To Study various factors relating to rewards and promotion in State bank

of India.

2. Secondary Objectives

1) Study about criteria for rewards and promotion

2) To know about the eligibility for rewards and promotion

3) To study the impact of rewards and promotion on behavior of

employees.

4) To study the benefits derived by rewards and promotion.

5) To study the effect of rewards and promotion on behavior of employees

on the basis of absenteeism, trust and uncertainty avoidance.

6) To Study the effects of promotion and rewards policy on employees

performance.

7) To give recommendation and suggestion.

 CHAPTER-3
LITERATURE REVIEW
LITERATURE REVIEW
Organizations in today‘s environment seek to determine the reasonable balance
between employee commitment and performance of the organization. The reward
and promotion programs serve as the most contingent factor in keeping
employees‘ self esteem high and passionate. Oosthuizen (2001) stated that it is
among the function of managers to motivate the employees successfully and
influence their behaviour to achieve greater organizational efficiency. La Motta
(1995) is of the view that performance at job is the result of ability and
motivation.

Ability formulated through education, equipment, training, experience, ease in

task and two types of capacities i.e. mental and physical. The performance
evaluation and rewards are the factors that proved to be the bonding agents of the
performance evaluation programs. According to Wilson (1994), the process of
performance management is one among the key elements of total reward system.

Entwistle (1987) is of the view that if an employee performs successfully, it leads

to organizational rewards and as a result motivational factor of employees lies in
their performance. Majority of the organizations require their employees to work
according to the rules and regulations, as well as, job requirements that comply
with full standards. The investigations that have been conducted to find the
relationship between compensation and individuals were focused to increase the
performance of employees (Ciscel, 1974). The highly motivated employees serve
as the competitive advantage for any company because their performance leads an
organization to well accomplishment of its goals.

Among financial, economical and human resources, human resources are more
vital that can provide a company competitive edge as compared to others.
According to Andrew (2004), commitment of all employees is based on rewards
and promotion. Lawler (2003) argued that prosperity and survival of the
organizations is determined through the human resources how they are treated.
Most of organizations have gained the immense progress by fully complying with
their business strategy through a well balanced reward and promotion programs
for employee. Deeprose (1994) argued that the motivation of employees and their
productivity can be enhanced through providing them effective promotion which
ultimately results in improved performance of organizations. The entire success of
an organization is based on how an organization keeps its employees motivated
and in what way they evaluate the performance of employees for job
compensation. Managing the performance of employees forms an integral part of
any organizational strategy and how they deal with their human capital (Drucker
as cited in Meyer & Kirsten, 2005).
CHAPTER-4
RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY

1) Research Design

This is descriptive study including various factors of Rewards and

promotion like criteria for promotion and rewards, eligibility, impact on
behaviours of employees, frequency for rewarding and benefits derived.

2) Data Source

Primary data source –Questionnaire

Secondary data source –Internet

3) Sample Size

Sample size is 70

4) Sample Technique

A simple random technique is used for the collection of primary data

by using questionnaire.

5) Research Instrument

Questionnaire
6) Statistical Tools
Hypothesis:

Ho:-There is no impact rewards and promotion on behaviour of employees

on the basis of absenteeism, trust and uncertainty avoidance.

H1:- There is an impact rewards and promotion on behaviour of

employees on the basis of absenteeism, trust and uncertainty avoidance.

Ho:-There is no effect of promotion and reward policy on organizational

performance.

H1:- There is an effect of promotion and reward policy on organizational

performance.
 CHAPTER-5
DATA ANALYSIS

&

INTERPRETATION
5.1 How long have you been working here?

Table No.5.1

Sr. no. Options No. of respondents Percentage

1 Less than 1 year 15 21%
2 1-5 years 17 24%
3 5-10 years 18 26%
4 More than 10 years 20 29%

Fig. no. 5.1

Interpretation:

Most of the SBI employees working here more than 10 years that is 29%, 21 %
employees working here less than 1 year, 24% are 1-5 years, 26% are 5-10 years.
 5.2Are you aware of various monetary and non monetary reward
schemes of SBI?

Table no.5.2

Sr. no. Options No. of respondents Percentage

1 Yes 70 100%
2 No Nil Nil

Fig. no. 5.2

Interpretation:

The above pie chart indicates that 100% of the employees are aware of various monetary
and non monetary reward scheme of SBI.
5.3 Are you aware about the basic criteria on which various
awards are based?

Table no. 5.3

Sr. no. Options No. of respondents Percentage

1 Yes 70 100%
2 No Nil Nil

Fig. no. 5.3

Interpretation:

The above pie chart indicates that 100% respondents are aware about the basic criteria on
which various awards are based.
5.4 Are rewards based on objectives basis?

Table no. 5.4

Sr. no. Options No. of respondents Percentage

1 Strongly agree 12 17%

2 agree 25 36%
3 Neutral 28 40%
4 disagree 3 4%

5 Strongly disagree 2 3%

Fig. no. 5.4

Interpretation: The above pie chart indicates that 4% of the employees are strongly
disagreed, 3% disagreed, 40% neither agreed nor disagreed, 36% agreed and 17% strongly
agreed that the rewards were based on the objective basis.
5.5 Favoritism prevails when it comes to giving away awards?

Table no. 5.5

Sr. no. Options No. of respondents Percentage

1 Strongly agree 3 4%

2 agree 5 7%
3 Neutral 30 43%
4 disagree 9 13%

5 Strongly disagree 23 33%

Fig. no. 5.5

Interpretation:

The pie chart indicates that 33% employees are strongly disagreed, 13% disagreed, 43%
neither agreed nor disagreed, 7% agreed and 4% strongly agreed that favoritism prevails while
giving away the rewards.
5.6 Are deserving people rewarded?

Table no. 5.6

Sr. no. Options No. of respondents Percentage

1 Strongly agree 10 14%

2 agree 30 43%
3 Neutral 20 29%
4 disagree 7 10%

5 Strongly disagree 3 4%

Fig. no. 5.6

Interpretation:

The pie chart indicates that 4% employees are strongly disagreed, 10% disagreed, 29%
neither agreed nor disagreed 43% agreed and 14% strongly agreed that deserving people were
rewarded in the organization.
5.7 Rewards are given as and when they become due?

Table no. 5.7

Sr. no. Options No. of respondents Percentage

1 Strongly agree 13 19%

2 agree 27 38%
3 Neutral 22 31%
4 disagree 6 9%

5 Strongly disagree 2 3%

Fig. no. 5.7

Interpretation:

The above pie chart indicates that 3% employees are strongly disagreed, 9% disagreed,
31% neither agreed nor disagreed, 38% agreed, 19% strongly agreed that the rewards were
given as and when they became due.
5.8 Good performance is appreciated and recognized by top
management?

Table no. 5.8

Sr. no. Options No. of respondents Percentage

1 Strongly agree 10 14%

2 agree 32 46%
3 Neutral 23 33%
4 disagree 3 4%

5 Strongly disagree 2 3%

Fig. no. 5.8

Interpretation:

The above pie chart indicates that 3% strongly disagreed, 4% disagreed, 33% neither agreed
nor disagreed, 46% agreed, 14% strongly agreed that good performance is recognized and
appreciated by top management.
5.9 Is increased performance linked with the monetary rewarded?

Table no. 5.9

Sr. no. Options No. of respondents Percentage

1 Strongly agree 5 7%

2 agree 25 36%
3 Neutral 30 43%
4 disagree 3 4%

5 Strongly disagree 7 10%

Fig. no. 5.9

Interpretation:

The above data indicates that 10% employees strongly disagreed, 4% disagreed, 43%
neither agreed nor disagreed 36% agreed and 7% strongly agreed that the increase performance
linked with monetary rewards.
5.10 Is the reward system influencing the behaviour of employees?

Table no. 5.10

Sr. no. Options No. of respondents Percentage

1 Strongly agree 8 12%

2 agree 20 31%
3 Neutral 27 34%
4 disagree 10 15%

5 Strongly disagree 5 8%

Fig. no. 5.10

Interpretation:

The above data indicates that 8% employees strongly disagreed, 15% disagreed, 34%
neither agreed nor disagreed 31% agreed and 12% strongly agreed that reward system
influencing the behaviour of employees.
 5.11 Is the reward system decreased the absenteeism?

Table no. 5.11

Sr. no. Options No. of respondents Percentage

1 Strongly agree 3 4%

2 agree 25 36%
3 Neutral 33 47%
4 disagree 5 7%

5 Strongly disagree 4 6%

Fig. no. 5.11

Interpretation:

The above data indicates that 6% employees strongly disagreed, 7% disagreed, 47%
neither agreed nor disagreed 36% agreed and 4% strongly agreed that the reward system
decrease the absenteeism.
 5.12 Is the reward system increased the trust of the employees?
Table no. 5.12

Sr. no. Options No. of respondents Percentage

1 Strongly agree 10 14%

2 agree 28 40%
3 Neutral 22 31%
4 disagree 6 9%

5 Strongly disagree 4 6%

Fig. no. 5.12

Interpretation:

The above data indicates that 6% employees strongly disagreed, 9% disagreed, 31% neither
agreed nor disagreed 40% agreed and 14% strongly agreed that the reward system increased the
trust of the employees.
5.13 Is reward system can help to decrease the uncertainty
avoidance of employees?

Table no. 5.13

Sr. no. Options No. of respondents Percentage

1 Strongly agree 2 3%

2 agree 8 11%
3 Neutral 40 57%
4 disagree 5 8%

5 Strongly disagree 15 21%

Fig. no. 5.13

Interpretation:

The above data indicates that 21% employees strongly disagreed, 8% disagreed, 57%
neither agreed nor disagreed 11% agreed and 3% strongly agreed that the reward system can
help to decrease the uncertainty avoidance of employees.
 5.14 Is the promotion and reward policy can affect the
employee’s performance?

Table no. 5.14

Sr. no. Options No. of respondents Percentage

1 Strongly agree 5 7%

2 agree 25 50%
3 Neutral 18 26%
4 disagree 7 10%

5 Strongly disagree 5 7%

Fig. no. 5.14

Interpretation:

The above data indicates that 7% employees strongly disagreed, 10% disagreed, 26%
neither agreed nor disagreed 50% agreed and 7% strongly agreed that the promotion and reward
policy can affect the employee’s performance.
CHAPTER-6
FINDINGS &
CONCLUSION
FINDINGS AND CONCLUSION

 MAJOR FINDINGS:

100% agreed that they are aware of various rewards monetary and non
monetary reward schemes of SBI.

17% strongly agreed that the rewards were based on the objective
criteria.

33% strongly disagreed that favoritism prevails while giving away the
rewards.

14% strongly agreed that deserving people were rewarded in the

organization.

38% agreed that the rewards were given as and when they became due.

46% agreed that good performance is recognized and appreciated by top

management.

36% agreed that the performance linked with monetary rewards.

CONCLUSION

The responses obtained indicate that the employees were fairly satisfied
with the reward system of SBI. Although a small sample size was taken to analyze
it, every proportion of population was represented by the sample appropriately.

The questions were designed using basic principles into consideration i.e.
fairness, openness, timeliness etc. The responses thus obtained were then analyzed
to arrive at the conclusion.

The responses obtained in the two extremes were very less, i.e. every
question was responded by the employees avoiding the two extremes of strongly
agree & strongly disagree this can be justified by the fact as explained above in
the limitations that the employees were hesitant and behaved as if some
confidential information was being extracted from them or that it indicates that
employees were fairly satisfied with the management regarding the various reward
system schemes.

Majority of the responses obtained were that of ―agree i.e. approximately

30 to 40% 0f the employees responded ―agree to the questions like rewards are
given as per criteria that indicates that etc., indicating that organization had been
fairly successful in keeping the reward system schemes balanced and satisfactory.

Also it was observed that most of the executives took a lot of time in
responding and were less cooperative and open as compared to the non executive
employees, also the satisfaction level was high in the higher grade above. The SBI
employees were enthusiastic and cooperative in their responses as well as
interactive. After detailed analysis done band wise or grade wise it can be
concluded that the satisfaction level of the employees as well as their awareness
regarding various rewards & promotion schemes was fairly well, i.e. the
employees were fairly satisfied with Reward System of SBI.
CHAPTER-7
LIMITATION

&

SUGGESTION
LIMITATIONS OF STUDY
1. No generalization: the study is restricted to an organization under study, so
it cannot be generalized for all employees in other organization.

2. Rewards and promotion are complex problem and researcher has attempted
to study most appropriate factors but chances cannot be ruled out that some
areas may have been untouched or not adequately touched.
SUGGESTION
1. Surveys should be conducted frequently in order to judge satisfaction level
of the employees.

2. In addition to surveys, interaction of HR officers with the employees should

also be given space if possible.

3. Suggestions and discrepancies regarding the various reward schemes should

be openly invited from the employees and should be materialized into
action as soon as possible should not be dumped as paperwork.

4. Formal and Informal meetings: should be conducted to judge the employee

satisfaction, regarding various services & new way out should be searched
to tackle the same.
BIBLIOGRAPHY
1. Andrew, D. P. S., & Kent, A. (2007). The impact of perceived leadership behaviors on
satisfaction, commitment, and motivation: An expansion of the multidimensional model of
leadership. International Journal of Coaching Science, 1(1), 35-56.

2. Baron, R. A. (1983). Behaviour in organisations. New York: Allyn & Bacon, Inc.

3. Barton, G. M. (2002). promotion at work. Scottsdale: World at Work.

4. Board, L. M. (2007). Coaching a stockholder on performance improvement option, ASTD

International conference Atlanta GA, USA.

5. Bull, I. H. F. (2005). The relationship between job satisfaction and organizational

commitment amongst high school teachers in disadvantaged areas in the Western Cape.
Unpublished Masters Dissertation. Cape Town: University of the Western Cape.

6. Ciscel, H. D. (1974). Determinants of executive compensation, Southern economic Journal,

40(4), 613-617.

7. Csikszentmihalyi, M. (1990). Flow: the psychology of optimal experience. New York:

Harper & Row. Reviewed by Steve Krett.

Websites:

1. www.google.com

2. www.yahoo.co.in

3. www.sbi.co.in

4. https://corp.onlinesbi.com/corporate

5. https://en.wikipedia.org/wiki/State_Bank_of_India
ANNEXURE
QUESTIONNAIRE
Sir/Madam, I am the student of H.P.U Regional Centre Dharamshala.I am conducting a study
on “The promotion and reward policy at SBI.”This questionnaire is part of study, therefore I
hereby request you to contribute your valuable opinion .This is only for academic purpose and
your information will be kept confidential.

1. How long have you been working here?

Less than 1 year 1-5 years

5-10 years more than 10 years

2. Are you aware of various monetary and non monetary reward schemes of SBI?

Yes No

3. Are you aware about the basic criteria on which various awards are based?

Yes No

4. Are rewards based on objectives basis?

Strongly agree agree

Neutral disagree

Strongly disagree

5. Favouritism prevails when it comes to giving away awards?

Strongly agree agree

Neutral disagree

Strongly disagree

6. Are deserving people rewarded?

Strongly agree agree

Neutral disagree

Strongly disagree
7. Rewards are given as and when they become due?

Strongly agree agree

Neutral disagree

Strongly disagree

8. Good performance is appreciated and recognized by top management?

Strongly agree agree

Neutral disagree

Strongly disagree

9. Is increased performance linked with the monetary rewarded?

Strongly agree agree

Neutral disagree

Strongly disagree

10. Is the reward system influencing the behaviour of employees?

Strongly agree agree

Neutral disagree

Strongly disagree

11. Is the reward system decreased the absenteeism?

Strongly agree agree

Neutral disagree

Strongly disagree

12. Is the reward system increased the trust of the employees?

Strongly agree agree

Neutral disagree

Strongly disagree
13. Is reward system can help to decrease the uncertainty avoidance of employees?

Strongly agree agree

Neutral disagree

Strongly disagree

14. Is the promotion and reward policy can affect the employee’s performance?

Strongly agree agree

Neutral disagree

Strongly disagree
Personal details:

1. Name___________________________

2. Age:

a) 18-25years b) 26-35years

c) 36-50 years d) above 50 years

3. Sex:

a) Male b) Female

4. Income (annually):

a) Below 250,000 b) 250,000-350,000

c) 350,000-500,000 d) above 500,000

5. Address & contact no:

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