HUMAN RESOURCE DEVELOPMENT
OMAR MARASHDEH
Human resources play an important role in the development, progress, and success of any organisation. Islamic financial institutions, like other organisations, should emphasise the vital role of huma n resources in the development and spread of Islamic banking.
Islamic banks have proven their viability after more than two decades of operations in various parts of the world. However, their market share in their areas of operations is still very small. This could be due to the under-development of their human resources. Such a situation can be improved, and the success of Islamic banking can be enhanced by improving the quality of their huma n resources through Huma n Resource Development (HRD).
HRD comprises of three important areas: training that is related to the current job, development that is related to the future job or promotion, and education that is related to the general growth of the individual and organisation.
Nadler defines Human Resource Development as, “the activity of an organisation that provides organised learning experiences for a specified period of time, for the possibility of improving job performance or growth of the employee”. This definition emphasises the continuous learning process, which enables the employee to transfer new knowledge to the work place to improve his performance and growth, thus, leading to an improvement in productivity of the organisation which leads to the growth and success of the organisation.
When an organisation develops and trains its employees, a sense of belonging is implanted in the employees. A sense of belonging is, indeed, very important for the success of an organisation. When employees feel that they belong to an organisation, they may go out of their way to improve an organisation. A sense of belonging is developed among employees when the organisation cares about the well-being, professional growth and development of the employees. Organisations where a sense of belonging is absent and employees are demoralised, are bound to decline and lose their position to competitors.
If Islamic financial institutions do not upgrade the skills of their staff, they may face several problems. Firstly, the inability to introduce new financial instruments and compete with conventional banks who are introducing Islamic windows. Secondly, over-utilisation of Mudaraba and Musharaka financing, the core modes of financing that distinguish Islamic banks from conventional financial institutions. Thirdly the inability to invest mobilised resources efficiently.
To avoid such problems, Islamic financial institutions can help to develop their employees’ skills by embarking upon a series of training programmes.
Such training programmes may include: credit management training to enable staff to evaluate the creditworthiness of customers; project evaluation and feasibility studies to enable staff to evaluate projects and their feasibility; customer relations training especially for front-line staff to enable them to attract more customers by being more friendly and helpful; and information technology training to enable the staff to understand the various instruments and to be in a position to explain them to customers.
Finally, Sharia and economics training would enable staff to understand the application of the Sharia to modern banking practices.
Training programmes could be conducted internally by experienced staff or externally by outside consultants well-versed in this field.
Islamic financial institutions can collaborate with institutions of higher learning such as universities to provide consultants to train their employees. Moreover, training of staff could be more formalised by their taking structured courses of short duration at universities to improve the competency of staff in certain areas. These courses should be designed to suit the needs of industry and to train their existing staff. Indeed, universities and institutions of higher learning could play a pivotal role in the training and development of the staff of Islamic financial institutions.
Universities should be instrumental in producing a cadre who are well-groomed in the Sharia, economics and the modern practice of banking through the offering of degrees at various levels which blend the three elements together.
Finally, each Islamic financial institution should set-up Human Resource divisions responsible not only for the hiring of staff, but also for the continuous professional development of the staff.
However, for these programmes to be implemented, the higher-level management of Islamic financial institutions should realise the importance of Human Resources Development to the survival of the organisation. Without such a realisation, human resources in the organisation, like any other resources, will depreciate and its knowledge may become obsolete after a period of time, leading to the decay of the organisation.
Islamic financial institutions, for their survival in the next decade and beyond, can ill afford to ignore the development of their human resources.
Edited By Asma Siddiqi
Institute Of Islamic Banking And Insurance London
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John Doe
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