HSBC is a global banking and financial services company established in 1991 with over 267,000 employees worldwide. As an organization dealing with financial risks, human talent is its most important asset. To gain full employee commitment, HSBC uses different human resource management policies and practices tailored to different cultural contexts. In East Asia, HSBC faces challenges recruiting local skilled talent and uses an international talent management process to identify and develop future leaders internally. Training programs are designed regionally but implemented locally considering cultural differences to enhance employee performance and prepare them for future roles.

1. UNIVERSITY OF BEDFORDSHIRE
LEADING PEOPLE IN ORGANIZATIONS
SHR601-6
Assessor: Dr PAULINE LOEWENBERGER
HSBC CASE STUDY

2. Executive Summary
Financial Institutions are known to be highly imperative of continuation of globalization
throughout the world. Hence each and every economy has to focus on establishment and
proper functioning of both local and globalised financial institutions. HSBC is one of world
recognized organization which has great influence on world economy.
HSBC can be identified as world largest banking and financial service corporation which was
established in 1991 as a parent company for Hong Kong and Shanghai Banking Corporation.
Company occupies 267000 employees.
As HSBC is an organization dealing with risky conditions related to financial management,
human talent would be most important asset of an organization. To conquer full commitment
from employees, HSBC uses different human resource management policies and practice.
Conversely organization need to be conscious of cultural diversity of people as it has
circulated branch network among numbers of countries with different cultural backgrounds.
Hence HRM practices of organization supposed to be differed from region to region.
2

3. Table of Contents
Table of Contents...................................................................................................................................3
Introduction...........................................................................................................................................4
Analysis of HSBC’s HRM policies and practices in East Asia...................................................................4
Recruitment and Selection................................................................................................................4
Training and Development................................................................................................................6
Conclusion...........................................................................................................................................10
Recommendations...............................................................................................................................10
About HSBC (2011)(Online), Available from http://www.hsbc.com/about-hsbc [Accessed on
29/03/2013].........................................................................................................................................13
3

4. Introduction
Increasing globalization has created more awareness of the need for managers to be sensitive
to the cultural aspects in human resource management. Proper human resource management
brings an understanding regarding the values and beliefs of employees from different cultural
backgrounds. This report is comprised with evaluation and analysis of key performance areas
in human resource management of HSBC Holdings PLC.
HSBC as an organization which operates globally with thousands of employee base, strategic
HRM is inevitable. Recruitment and selection process of organization performs a significant
role in attracting talent to the organization. Training and development strategy enhances
employee job performance as well as career growth, further performance management and
reward
strategy
defines
the
evaluations
and
returns
for
better
performances.
Recommendations have addressed aspects to be improved.
Analysis of HSBC’s HRM policies and practices in East Asia
Human resource policies and practices grant organization to structure to be followed and
guidelines for reacting to particular situations (Alcázar et al, 2005: p.633). If organization
does not have specified policies and practices of HRM it will complicate the situation rather
than resolving it. In the context of HSBC, organization cannot implement standardized HRM
system with standard policies and practices in each region of world. Hence HSBC has taken
up cultural differences in to consideration when stipulating HRM policies and implementing
HRM practices.
Recruitment and Selection
As per Schuler and Jackson (2000:p.65), the process refers to identifying best suited
employee for a particular position among pool of candidate is known as recruitment and
selection. Every organization should be comprised of specified and appropriate recruitment
and selection policies which encounter of selecting most suitable candidate who matches with
organizational requirement.
4

5. When HSBC was moving in to Asian market, especially in to East Asia they had to face with
problem of deficient in required talent from local labour markets. Many of Asian economies
Such as China and Vietnam often have unskilled and semi-skilled workers but not trained
people with required skills. As other MNCs, HSBC also had to adopt ethnocentric approach
in to their recruitment policies and procedures. This problem became more critical as HSBC
was expanding businesses over the globe. Because of this HSBC was face with difficulty in
finding skilled bankers locally (Treanor, 2007:p.35). This may be a challenge to business
expansion in developing countries where level of education remains at a lower level.
Recruitment and selection process of HSBC is initiated with filling online CV in electronic
form. After referring the CV by HR team of HSBC determined it as suitable or not for
particular position. Those applications will be checked against the prerequisite skills and
qualification required for job (Tiwar and Buse, 2006:p.112). Then candidates have to
countenance with ability test which known as aptitude test. In this scenario HR team of
HSBC considers cultural barriers and perceptions of people. As an example perceptions of
Asian person might be totally different from European person. Hence HSBC never tries to
attitudes of people using questions exposed to cultural differences. Selected candidates
should be confronted for face to face interview and outstanding personalities will be selected.
If organization is unable to find suitable people they have to import talent from foreign which
incurs larger cost to the organization.
As a solution, HSBC used Global or International Talent Management process as a mean of
attracting, retaining and motivating people. Ethnocentric approach is used by organization for
most of occasions, but there were some instances where it is no longer suitable. Hence need
for proper program became inevitable (Brunner et al, 2004:p.90). As the first step of
International Talent Management process, need to identify senior manager talent pool among
management positions. For this HSBC uses 360 Degree feedback, interviews, Panel
assessment and self and manager assessments with the purpose of collecting information who
suits for management positions (Storey, 2002: p.235), Organisation expects to avoid need for
recruiting foreign employees for managerial positions of branches in developing countries
such as China, Vietnam and Nepal. HSBC emphasizes on integrity, collegiality and diversity
as core competencies needed for a leader. Afterwards they expand talent pool beyond the
senior management and forward to junior managers and other competent employees. Through
5

6. development programs focused on core competencies, organization expects to develop
leadership of all level employees.
Figure no.01: Global Talent Management Process at HSBC
(Source: ww.slideshare.net/adelinawomack/global-talent-management-at-hsbc-)
Recruitment process of HSBC is different from country to country. There may be two
different systems of recruitment in Europe and Asia. It is an advantage for organization as it
helps to identify cultural differences and organization will be able to turn those implications
in to opportunities for gaining higher level of commitment from employees. If organization is
implementing standard system over the globe it would not beneficial for organization as each
country and people may not desire to move with that system (Martin et al, 2005:p.263). If so
it may create internal troubles as well as external troubles.
If we considered International Talent Management process it will be greater opportunity for
middle and lower level employees to climb up their career ladders through own
competencies. This process can explain using behavioral theory of leadership which describes
leaders may not instead they are made (Marchington and Zagelmeyer, 2005:p.33). Believing
above phase HSBC is attempted to create future leaders within organization eliminating need
for headhunting or recruiting talent externally.
Training and Development
As globe is exposed to tentative, compound and erratic situations, has a pressure on
organisation to constantly develop and be adoptable with both external and internal
environmental dynamics. Most of business organisations mainly compete through human
6

7. talent. Hence they should be prepared employees for successfully deal with upcoming
situations (Rosemary, 2005:p.5).
Basically training is a methodical procedure of mounting knowledge, skills and attitudes to
enhance performance of current job which helps individual employee to meet up with job
requirements easily up to the expected level (Derek,2004:p.363). Conversely development
refers to developing employees to do more challenging job in future. In other words
development can be defined as equipping employees to take more challenges in the future.
In the context of HSBC, they organise and design training programs by regional training
teams. But they disseminate instructions to each country and Country HR manager and HR
team will be responsible of implementing training programs in local offices. As per Bowers
(2008:p.24), each and every employee eligible for training programs depending on their
service period.
HSBC has placed vast attention on training and development of employees in HSBC offices
located in developing countries. Hence they have used number of training methods to train
employees such as management training, leadership training, language and technical skill
training (William et al, 2004:p.4). Those are common for all departments. Addition to those
employees of East Asian countries have provided with special skill trainings as class room
based trainings kind of off the job training program and day to day or on the job training
program which is a multimedia based e- training.
Analyzing the training and development in HSBC it is possible to say organisation is always
tries to make their employees competent through developing required talents and skills.
Through training HSBC employees will be able to improve their individual performance and
thereby it helps to augment whole organisational performance. As employees become more
talented it will increase the service quality of HSBC. One of imperative strength of
organisation can be derived as training and development and it would raise HSBC as world’s
best financial institution. On the other hand training and development of HSBC helps to
improve work efficiency by reducing wastage. It will offers further competitive price for end
services. Through this HSBC has become organization with one of best customer services in
the world.
7

8. According to two factor theory of motivation by Fredrick Herzberg, every person has two
levels of needs as physical level and psychological level. Motivators are intrinsic factors
which mount the morale. Accordingly career development also can be defined as
motivational factor which enhances employee commitment and satisfaction (Cohn et al,
2005:p.83). Money is not sole motivator at the employment, and this is especially very true
for the 21st century. The people who work with organizations seek for more than fair
employment from work; they also look at the holistic development of themselves. Since
HSBC is offering employees with numerous training and development opportunities it will be
back-up for employees to develop themselves. But one of weakness of Training and
development of HSBC is lack of identifying individual weaknesses.
Reward System
According to Williams, 2003:p.28, reward can be defined as a stimulus which encourages
employees to exert higher level of commitment and effort towards the job tasks. In another
words reward system of particular organization can be defined as a mean for bridging the gap
between ability to work and motivation to work.
Since majority of Asian countries have limited number of skilled labour, need to be highly
competitive through offering spirited compensation and rewordings. Otherwise organization
may not be able to attract talented candidates and retain competent employees (Gibbons and
Woock, 2007:p.27). Mainly there are two types of rewards as financial rewards and nonfinancial rewards. On the other hand each reward should be attractive to employees and need
to be aligned with organizational strategies.
HSBC offers their employees different employee rewards both financially and none
financially. In another words, HSBC is offering intrinsic and extrinsic rewards. Among most
of other global organisations HSBC has ranked as one of well-paying firm for own
employees. HSBC has espoused an ethnocentric approach to its reward system.
As explained by Daniels (2004:p.235), through rewarding system organisation expects to
increase productivity by mounting average performances of employees. By offering reward
system, organisation hopes to pull people towards their maximum effort in accomplishing
particular task. HSBC has offered standard procedure for reward management including
policies which offers ability to react in different situations. Conversely rewards may be
8

9. morale boosters which help to accomplish particular task effectively. This can be explained
through Expectancy theory of motivation. It defines that individual employee believes that
his or her effort will lead to better performance and in turn it will guide to organizational
reward. In the context of HSBC, employees are committed for work mostly for financial
rewards such as bonuses and salary increments. Addition to those they will inclined to retain
with the expectation of receiving extrinsic rewards such as retirement’s benefits and other
employee benefits.
Figure 01: Expectancy Theory
(Source: Developed by Own)
Rewards system of HSBC would be a control for managing tardiness and absenteeism. When
employee performances link with rewarding system they will become motivated for
organizational functions and tend to be avoided negative attitude and practices towards the
work.
When employees are rewarded with non-financial rewards such as promotions, status and
ranking and etc employees will be satisfied of the job as they are gratified social and
psychological needs( Zaffron and Steve, 2009:p.89).
Before stipulating reward system HSBC is often consider views and expectations of
employees. If not employees will not be interested for given rewards and will not be
motivated to exert maximum effort further (Hewstone and Brown, 2000:p.55). Each reward
system implements by HSBC is easy for employees to understand. Hence employees can
work out of it without difficulty. Thereby confidence and trust of employees towards the
organization will increase.
Employees of HSBC are entitled for selecting desired rewards among others. Accordingly
they are given with prerequisites that should be accomplished in attaining particular goals.
9

10. This would be positive point for organization as it boosts ability to alter with employee
preferences and needs of any transform in the conditions.
Even though rewarding system of HSBC has number of positive implication, can be seen
some negative aspects as well. There is a problem with just and equitability in rewarding
.This situation is critical in Asian countries as managers tend to be rewarded employees
depending on favourations rather than considering competencies. As per Glisson and L James
(2002:767), due to this situation problems may be created for organization as employees
perceive they are treated unequally. Thus HSBC employee turnover is somewhat higher than
employee turnover of European and Western countries.
Conclusion
Having analyzed the case of HSBC Holdings PLC, as a assignment requirement, able to gain
a wide understanding about Human Resource Management in a practical scenario and
identified factors which can be affected on leading employee behavior for achieving
organizational goals and objectives. Analysis of HSBC’s HRM policies and practices in East
Asia has evaluated positive and negative facets of organizational performances considering
imperatives areas as recruitment and selection, training and development and reward system.
Accordingly recommendations are proposed to overcome shortcomings with human resource
facets of an organization. Modern Organizations are competing through human talent.
Therefore human resource becomes most valuable assets in every organization. This study
has given me a broader knowledge. My intention was not only to fulfill the assignment
requirement but also to understand the practical application of the theories we learnt under
the subject Human Resource Management.
Recommendations
Recruitment is a crucial area of HRM as it mainly deals with attracting new blood to
organization. Hence organisation can establish recruitment policy which linked and reflect
corporate strategy of organisation. Through this organisation will be able to attract employees
who can occupy in achieving organizational objectives and people with competencies
10

11. attaining those. This would be addressing specific need of recruiting candidate for a particular
job position.
On the other hand HSBC can be conscious of Cultural dimensions across countries and take
advantages from them. According to the Cultural dimensions of Hofstede’s, different regions
of countries have distanced cultural implications .Linking those in to recruitment processes of
each country, organization will be able to gain cultural opportunities in attracting employees.
This would be an advantage to attract most talented people from pool of limited qualified
bankers in East Asian countries.
HSBC has placed small attention on individual weaknesses in planning training and
development program. Instead they pull employees towards training and development
programs insisting on seniority and service period. If organization pays attention on
individual weaknesses, it will be much helpful in correcting their performance drawbacks and
enhancing employee performances up to the expected limit.
HSBC can link grievance handling procedure with rewarding system. Any rewarding system
may create grievances for a certain extent. Hence management of HSBC can develop
effective grievance procedure linked to reward system. Thereby organization will be able to
diminish conflicts can be occurred.
Performance management and reward system should be more tailored. Current performance
management system is considered only the job related aspects. But it is important to evaluate
all other characteristics of employees which related with their performances either directly or
indirectly. In turn organization will be able to create balanced employees who can manage
time and work with outstanding personality repercussions.
11

12. References
Alcázar, F., P. M. Fernández & Forteza, J.A., and Prieto, J.M (2005), Strategic human resource
management: integrating the universalistic, contingent, configurational and
contextual perspectives, International Journal of Human Resource Management, p
633
Brunner, A., Decressin, J. ,Hardy, D. and Kudela, B. (2004), Germanys Three-Pillar
Banking System – Cross-Country Perspectives in Europe, Occasional Paper,
International Monetary Fund, Washington DC ,p.90
Bowers, S. (2008), HSBC loses disk with policy details of 370,000 customers,The
Guardian (London),p.24
Cohn, J.M., Khurana. R, and Reeves, L. (2005), Growing talent as if your business
depended on it, Harvard Business Review, p.83
Daniels, A. (2004), Performance Management: Changing Behavior that Drives
Organizational Effectiveness, 4th Edition, p.345
Derek, T., Laura, H. and Stephen, T. (2004), Human Resource Management,6th Editiion,
Pearson Education. p. 363
Gibbons, J and Woock, C (2007), Evidence-based Human Resources, The Conference
Board, New York,p 27
Glisson, C. and L. R. James (2002), the cross-level effects of culture and climate in human
services teams, Journal of Organizational Behavior, p 767
Hewstone, M., and Brown, R. (2000), Contact and conflict in intergroup encounters,
Oxford:
Basil Blackwell Ltd,p 55
Martin, A. J., Jones, E. S. J. and Losey, M. (2005), The role of psychological climate in
facilitating employee adjustment during organizational change, European Journal of
Work and Organizational Psychology, p 263
12

13. Marchington, M. and S. Zagelmeyer (2005), Foreword: linking HRM and performance
--never-ending search?, Human Resource Management Journal, p 33
Rosemary, H. (2005), Learning and Development, 5 th Edition, CIPD Publishing,p. 5
Schuler, R.S. and Jackson, S.E. (2000), Managing Human Resources- A Partner
Perspective ,London,Thomas Learning,p 65
Storey, J. (2002), Introduction: from Personnel Management to Human Resource
Management,Human Resource Management: a critical Text, London,p 235
Treanor, J. (2007), Taiwan gives HSBC £750m to take on Chinese bank, The Guardian,
London, p.35
Tiwari, R. and Buse, S. (2006), The German Banking Sector: Competition, Consolidation
and Contentment, Hamburg University of Technology, p.112
William, J., Rothwell, M. and Kazanas, H. C. (2004), The Strategic Development of Talent,
3rd Edition, Human Resource Development Press. p. 4
Williams, J. G. (2003), the importance of HR practices and workplace trust in achieving
superior performance: a study of public-sector organizations, International Journal
of Human Resource Management, p 28
Zaffron, L. and Steve, D. (2009), Performance Management: The Three Laws of
Performance: Rewriting the Future of Your Organization and Your Life,4th
Edition,Willey and Sons,New York,p.89
Web References
HSBC
bank
'to
offshore
more
jobs'
(2005),
(Online),
Available
from
http://news.bbc.co.uk/2/hi/business/4353423.stm/[Accessed on 29/03/2013]
About HSBC (2011)(Online), Available from
[Accessed
on 29/03/2013]
13
http://www.hsbc.com/about-hsbc

14. 14