CONSOLIDATION AND HUMAN RESOURCE MANAGEMENT IN SELECTED BANKS IN LAGOS, NIGERIA

Abstract

The recapitalisation policy of July 4, 2004 by the Central Bank of Nigeria (CBN) introduced consolidation as a survival option for banks. This required the harmonisation of hitherto separated structures of management and job redesign. There is, however, a dearth of data on implications of reform programmes on the management of human resources in the sector. The limited information on it are also inconclusive. The study, therefore, sets out to investigate the human resource challenges in the post-consolidation period in the specific areas of job adaptation, job insecurity, cultural integration, work relations, wage disparity and voice representation. A survey was conducted within the city of Lagos because of its prominence as Nigeria's commercial capital. Three banks namely Union Bank, Oceanic Bank and Unity Bank were purposively selected for the study. While Union Bank has had a longer history of banking commencing from 1917, Oceanic Bank was established in 1991 in the closing period of banking expansion and Unity Bank in 2006 as a result of consolidation-induced combination of nine banks. Data were obtained through quantitative and qualitative techniques. The quantitative approach involved the administration of questionnaire on 221 employees from the headquarters of the selected banks through simple random sampling. Qualitative data were derived from four in-depth interviews involving top management staff of the three banks. Data were analysed using frequency counts, simple percentages and content analysis. Employee job adaptation improved through the employment of culture-bound strategies such as after-service delivery and personalised customer relations by bank management in the three banks. For 70% of respondents across the banks, active union participation was important for effective voice representation that could check indiscriminate job losses, and consequently improve job security. Consolidation acted primarily as a redemptive option to assist distressed banks, and to restructure the banking system for effective service delivery. Diverse cultures brought into the banks by new employees were effectively integrated according to 84.8% of respondents, particularly in Union Bank and Unity Bank. With the exception of Unity Bank, high job insecurity prevailed in other banks; 59.4% of respondents opined that staff reduction was based on employee performance appraisal. However, the high wage compensation that typically attracted employees to the sector lost its appeal due to high rate of retrenchment which was not negotiated with the unions. Nevertheless, in Union Bank and Oceanic Bank, wage compensation improved considerably in the post-consolidation era according to 83.4% of the respondents while wage cuts was a factor of job sustenance for employees of Unity Bank. Banking consolidation provided the basis for refocused strategy for banks in managing human resources and improving wages and productivity. This was carried out at the expense of job security and voice representation. Future banking reforms should be designed to avert these negative side effects on human resources.