Shall we have to assess HR Risk, as a part of ICAAP?
Banks compute Pillar
– I capital adequacy to cover credit risk (CR), market risk (MR) and
operational risk (OR). Apart from these three types of risks, any other risks
that are left out, are to be discussed in “Pillar – II” risks. Banks need to identify,
assess and quantify the additional capital for Pillar – II risks. Human
Resources (HR) risk is one of those risks in Pillar – II risks. We shall have
to understand how and why HR risks are required to be part of Pillar – II risks.
Being in strategic management, identify how many of these following factors
would affect the profitability, vision, organizational objectives of the
company. If your answer is “4” or above for at least 7 questions in the
following questionnaire, please accept that HR risk needs to be considered as a
part of ICAAP risks. How much capital you need to keep, what are the tools you
are using to assess capital requirements…are left to your own methodologies.
Parameters / Questions for
Assessment of HR Risk
|
1
|
2
|
3
|
4
|
5
|
Do you agree that there is a relationship between
Corporate plan and HR Department objectives?
|
|
|
|
|
|
How far you agree that failure to achieve corporate
objectives is due to failure of HR Department strategies?
|
|
|
|
|
|
Do you agree that training the employees in their
job profile would lead to improved productivity?
|
|
|
|
|
|
Do you also agree that improved productivity and
corporate profitability have positive correlation?
|
|
|
|
|
|
Research papers on “Organizational Behavior”
indicate that “The more an employee is motivated, the more he owns up higher
responsibilities”. Do you agree that “Highly motivated employees contribute
to achieve organizational objectives”?
|
|
|
|
|
|
Creating a healthy work environment is one of the
HR Objectives. How far do you agree that it will have an impact on employee
productivity?
|
|
|
|
|
|
The core HR concepts like “Team work”, “Team
Building”, “Teaming” in the organizations creative a healthy competitions. Do
you agree that absence of such phrases in your corporate may lead to
scattered results?
|
|
|
|
|
|
Do you agree that “Financial Results are end
results”. Before conducting Financial Analysis, the companies need to
concentrate on “Analysis of HR practices”?
|
|
|
|
|
|
Do you agree that “Management of diversified cultures”
is an art? Wrong handling of those issues would lead to “Not achieving
corporate objectives?
|
|
|
|
|
|
“High brain drain” is the result of neglected
approach of Human Resources Management. Do you agree that “Talent acquisition
and Talent Retention” are important for achieving corporate objectives?
|
|
|
|
|
|
1 – Strongly Disagree;
2 – Disagree; 3 – Uncertain; 4 – Agree; 5 – Strongly Agree