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he rural financial system in Ghana and indeed in any developing country, acts as a medium for financial intermediation and therefore provides for the needs of Micro, Small and Medium Enterprises (MSMEs). The system also plays a key role in reducing poverty by providing funds to cater for the needs of the rural poor, more especially rural small-scale operators.

 

Given the number of rural banks in Ghana (129 as at April 2008[1]) and the important role they play in the growth of MSMEs and poverty reduction, rural banks need to be well equipped to deliver on their mandate. CDC Consult Limited has worked extensively with rural banks in Ghana and has identified some people management challenges characteristic of Ghanaian rural banks, which affect their level of effectiveness.  Key challenges are in the following areas:

 

Policies & Procedures

 

In most cases, rural banks CDC has interacted with have no written policies and procedures to guide their operations particularly in the area of people management. Managers, by virtue of their long service with the banks, know most of these policies and procedures ‘in their heads’. Once the Manager resigns or goes on retirement, s/he carries with them the institutional memory of the bank. A new Manager then needs to start from scratch to build their store of institutional policies and procedures.

 

The fact that only one person or a few people are the custodians of the institutional memory, means that it becomes easy to manipulate policies depending on the situation at hand. This leads to a feeling of discrimination among employees and other ripple effects such as low employee morale, ‘we versus them’ syndrome, lack of employee commitment and loyalty and many more.

 

Rural banks in Ghana need to clearly document their people management policies and procedures with respect to recruitment, training and development, performance management, reward management, promotion and grievance handling among others. This will provide an equitable basis for relating with employees and safeguard the bank’s institutional memory.

 

Orientation for New Employees

 

Our experience with rural banks in Ghana has shown that they do not give new employees adequate orientation to prepare them for their work. This crucial task is usually done as part of a ten (10) minute briefing session or delegated to a lower level employee.

 

The new employee is taken to their department to meet their immediate Manager after which, if lucky, s/he may get the opportunity to work briefly in the various departments of the bank. This brings the orientation process to an end. Although this process is not entirely wrong, it is highly insufficient to adequately prepare the employee to fit well into his new environment and hit the ground running.

 

How does the new employee get to know the soft issues which, though seemingly insignificant, can get him off to a wrong start at the bank? Such as the corporate culture, the values, the policies, procedures and practices of the bank, the mission and philosophy of bank and how employees are expected to go about the business of the bank? The result is often a confused new employee who is unproductive and is likely to spend valuable time learning by mistake.

 

Orientation should comprise a well organized programme providing relevant information and conducted in a systematic manner which will ensure that the new employee is equipped with all the information they need to succeed in the bank. The employee should also be made to prepare a post orientation report to provide management with feedback on the entire programme.

 

Documented Job Descriptions

 

Based on our extensive work with Ghanaian rural banks, we have identified that some of these banks take it for granted that employees know what they should be doing on the job. Managers assume that new employees probably have been briefed as part of orientation or by their immediate Managers. Thus the banks do not have written job descriptions for staff.

 

This situation has led to problems such as task overlaps and duplication of efforts. Some employees do not know their official job titles or have two or more job titles which are used interchangeably, creating confusion, while some employees do not know where their responsibilities end and some one else’s begins therefore there is sometimes a ‘gray area’ which appears to be no one’s responsibility in particular. People are not sure of what tasks they are required to execute except, of course, the routine ones. Employee performance appraisals are affected since the basis for the appraisal – job description – is non existent (technically).

 

These are challenges that can be resolved by simply documenting each employee’s job description and ensuring that they all have copies and understand what is expected of them. Job descriptions must clearly outline performance indicators by which employee performance will be appraised.

 

 

 

Performance Management System (PMS)

 

Performance management systems of rural banks we have interacted with usually comprise only an end of year appraisal which is even, in some cases, not conducted consistently each year. When conducted, records of appraisals are not kept on employees’ files making it difficult to track employee performance over the years. In some institutions, the same appraisal instrument is used for both managerial and non managerial staff, totally ignoring the fact that different skill sets are required at the two levels and therefore the need to reflect this in the appraisal instrument.

 

In view of these challenges, the PMS is unable to provide accurate information on employee development needs or support consistent performance monitoring and improvement throughout the year. Employees are unable to appreciate the need for appraisals because they do not see tangible outcomes. It is therefore reduced to a ‘form filling’ event each year.

 

It is important that rural banks put in place a continuous performance monitoring and review system which provides feedback and support to employees to enable them improve their performance. This support could be in the form of formal training, on-the-job training, coaching, mentoring etc. Appraisers or Managers should also receive some training on how to implement a performance management system to ensure that it yields the expected benefits.

 

Succession Planning

 

Our experience with rural banks has shown that there is usually no clear succession planning mechanism in place. The moment an employee in a key position exits the bank without adequate notice or is absent for one reason or the other, management is under pressure to urgently recruit a new person or identify an employee within the bank who can take over the duties of the absent employee. 

 

As a result of the hurried nature of the process, the successor is not adequately prepared to deliver on the job. The end result? On-the-job mistakes, low productivity, lack of initiative, inadequate technical skills to undertake tasks.

 

Rural banks need to have a succession plan which will guide the selection and development or grooming of successors to assume key positions.  This will ensure that work is not unduly disrupted by the unannounced absence of any employee as well as constantly provide a core team of well trained employees who can assume managerial positions.