Human Resource Management In Multinational Banks In Tanzania

United Republic Of Tanzania is a developing country, located in East Africa. Tanzania has high level of unemployment, poverty, and a weak national institutional system. After independence in 1961 till 2000, the country had little influence on the business activities of foreign investments and was passing through transformation from its socialist policies to a market economy.

Towards the end of 1980’s, however, the views of “African socialism or Ujama” began to experience a series of extremely hard internal and external economic shocks. Internally, the Ujama system could not work effectively to alleviate the levels of poverty. Bureaucratic inefficiencies, lack of responsibility and weak performance of collective farms and factories and the deficits in the government budget and trade could not be removed. Externally, Tanzania could not escape the reality of globalization forces. In 1995, Tanzania introduced privatization policies which include attracting foreign direct investment (FDI) and multinational companies (MNCs), to improve its socio cultural and socio-economic conditions.

In early 2000, US based Citibank and South Africa based Standard Bank started providing financial services in Tanzania. Both the banks claimed to possess global “best practices” in managing their organizational structures and human resource management policies. All foreign investors to Tanzania faced the same sort of pressure of thinking GLOBALLY but acting LOCALLY. Now we have to find out whether their actions really reflect “HR best practices” or not.

Citibank Ltd. in Tanzania:

Citibank opened three main branches in Tanzania вЂ" Dar Es Salaam, Mwanza and Arusha. The bank offered variety of specialized financial services and products, involved in electronic banking, selling and purchasing of foreign exchange, issuing and monitoring of credit card systems. The organizational system was systematically interconnected with the hierarchical structures of the bank. The environment of the work and the attitude of employees were generally tense. Employees were constantly busy in multitasking. The head office in New York dealt with major strategic activities, major corporate decisions and also designed all HRM policies.

The integration between departments, branches, country and regional head office, and head office was effected by the so-called ICT “e-check” systems. Each branch had communal lounges, where one could get newspapers printed in USA, watch international news from US cable network CNN and music programs on MTV-USA. During 1hour lunch break employees could relax but they had to eat from branch canteens. All workers should wear smart formal dress. Only employees with a good American accent were given opportunity to handle individual customers, since most customers were from USA. In each branch, there was a process for socializing between employees and bank representatives. Bonuses were granted to those who attended these recreational schemes regularly. Men and women were not equally treated, as receptionists were found all female.

As HRM was treated as a back-up function of head office corporate culture, so there was a little chance of branch managers to make any change with policies or to adapt locally. Training programs were directed from the head office. Most operational employees reported frustration at not being given any training since last one year. Instead of group rewards, branch HR managers individually called & gave reward to employee. The bank emphasized on Western style HRM practices through flexible systems, short term employment, right to hire and fire, individual performance-oriented pay and promotion and downsizing. Citibank had employee-focused HRM policies to make better work environment, promoting career development and preserving work-related values. Although local employees were encouraged to contribute ideas, they were not given the autonomy to make collective decisions. Joining trade unions was not permitted by Government. As each branches had fewer than 100 employees, incase of conflict, bargaining and work related issues were dealt through direct individual consultation with HR department.

Standard Bank Ltd. in Tanzania:

Standard Bank had