Staff development

Human resources are an organisation's key asset and the most successful organisations make the most effective use of their staff. Human resource management is all about recruiting capable, flexible and committed people, managing and rewarding their performance and developing their capabilities. Important issues, therefore, include selection procedures, pay and incentives, performance assessment, grading structures, training and development, welfare and communication, employee relations, dismissal procedures, personnel administration and legislative requirements.

People working within a culture of commitment are generally prepared to work longer, apply greater ingenuity to resolve a problem and try that much harder to succeed. It also helps to work within a learning environment - one in which knowledge acquisition and skill development is paramount. Many organisations have reoriented themselves away from piecemeal training of individual employees and towards becoming "learning organisations" with an emphasis on continuous learning.

Library Resources

resource title type year resource
Staff Incentive Schemes for Deposit Mobilisation Brief 2006

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After highlighting that staff incentive schemes for microfinance institutions (MFIs) usually focus on maximising the performance of the loan portfolio, the main purpose of this brief is to discuss the question: Now that many MFIs are becoming licensed deposit taking institutions, how can staff incentive schemes be designed to encourage deposit mobilisation.

It is noted that deposit mobilisation is important for several reasons. The small entrepreneurs and salaried employees who form an MFI’s typical clientele have a high demand for accessible and affordable deposit facilities. This is even true for very poor people, whose capacity and willingness to save are often underestimated. These locally mobilised funds help to reduce the dependence on (foreign) donors, and they mitigate exchange rate risks. Successful deposit mobilisation can help to increase an MFI’s outreach dramatically, and the savings business that clients conduct with their bank can serve as a useful market research tool for later offering credit services to the same customers.

The brief also stresses that the key for successful deposit mobilisation is trust – and trust in an institution can only be built if its staff members are also trustworthy. Hence, in order to mobilise savings, staff should be open and friendly to all clients, and they should be willing to work in a team. Good interpersonal skills are much more important for staff members in this area than are highly developed analytical skills or a background in economics or accounting.

It is suggested that in savings mobilisation it can often be difficult to discern exactly what (and who) caused the customer to entrust the institution with his or her funds; and furthermore, for branch operations in particular, it is difficult to match the results achieved with an individual staff members. As such the brief argues that it is much more useful to pay incentives based on team results.

The act of designing a simple bonus formula is discussed and a suggested calculation provided. The brief then looks at situations under which the basic formula can be refined before providing advice on the distribution of group bonus pools.

Author Grammling, M and Holtmann, M
Publisher MicroSave
Primary Language English (en)
Region / Country Global
Keywords Savings, Deposit Services, Staff Incentives, Staff Development, Deposit Mobilisation
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Human Resource Management for Growing MFIs Brief 2006

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As financial institutions grow, and particularly during periods of rapid growth, attracting the best staff and managing them for high performance becomes a key challenge. Developing effective human resource management systems and processes to fit the needs of the expanding institution can assist in managing growth and maintaining strong performance in financial service delivery. This briefing note provides examples of human resource issues to consider during a time of growth.

Some growth related stresses affecting an organization's human resources occur because of changes in the organizational structure, new communication channels, recruitment and hiring needs, training and staff development, performance management and development of the institutional culture. Each of these potential change areas are reviewed in this note together with their implications for staff management. The brief serves as an introduction to MicroSave’s Human Resource Toolkit which offers detailed discussions and examples of these and other human resource topics. By building strong, well functioning human resource systems and tools, an MFI will be well poised to meet the demands of growth, manage the challenges of an evolving environment, and respond to the needs of clients.

Author Jennifer Helmuth, Lisa Parrott and David Cracknell
Publisher MicroSave
Number of Pages 2 pp.
Primary Language English (en)
Region / Country Global
Keywords Human Resource Development, Institutional Growth
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Peer Advisory Boards: Entrepreneurs Learn Best from Each Other Paper 2006

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The paper explains that a Peer Advisory Board is a carefully selected team of like-minded colleagues who provide crucial advice, accountability and guidance to each other on a regular basis. It operates much like a self-designed group mentoring program, offering the wisdom of many and being held-accountable to the team.

The paper states that to understand the power and relevance of the concept, it is worth considering the many challenges a bank or a small business leader faces. Common challenges include:

  1. meeting the double bottom line of economic development and profitability;
  2. maintaining effective HR intensive processes;
  3. establishing a strong middle management; and
  4. developing a management information system (MIS) and infrastructure that adequately support the organisation.

The rationale behind the Peer Advisory Group is that business leaders have access to a multitude of people that have come to know, trust and value each other. They share their experiences with similar situations, discuss what did and did not work, and envision new ideas and resources. All work together over time to track progress and drive results.

After expanding on the purpose of a Peer Advisory Board, the paper discusses the benefits of a peer advisory board using examples of how they have helped management in the past. The paper also sets out the eight main steps to setting one up, including a quality checklist. Finally, a sample agenda for Peer Advisory Group meetings is given as well as a sample of meeting minutes and progress tracking.

Customer Service Toolkit Toolkit 2005

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In this toolkit, MicroSave seeks to ensure that service levels in a financial institution exceed customer expectations despite the continuous challenges of growth and change. This has multiple implications. First, financial institutions need to understand customer expectations. Second, they must understand the internal factors that drive an appropriate institutional response to customer expectations. Third, performance needs to be continuously monitored and communicated to ensure it meets required service levels. This process occurs in a dynamic environment and therefore needs to be driven by an appropriate strategy.

Why should a financial service provider invest in customer service? There are five compelling reasons why excellent customer service must be a “prime directive” for any market led MFI:

  1. Good service keeps customers
  2. Good service builds word-of-mouth business
  3. Good service can help overcome competitive disadvantages
  4. Good service is easier than many parts of the business
  5. Good service helps people to work more efficiently

Quality of customer service consistently ranks high on any list of customer preferences for financial services. In a qualitative study in Uganda in 2003, Mukwana and Grace found staff attitude, flexibility of terms and speed of service to be key reasons for choosing a particular financial institution. Similarly, the companion quantitative survey found that the second most common reason for customers to leave financial institutions was congestion in branches and the poor service associated with it. Competing financial services often don’t differ greatly from each other, so the way that a financial institution supplies its customers can become more important than the service itself.

This toolkit contains the following sections:

  • Putting customer service strategy into context.
  • The Strategic Dimensions of Customer Service
  • Determining the Role of Customer Service in an Institutional Strategy
  • Diagnosis and Analysis
  • Developing a Strategy, Action Plan and Budget
  • Implementing a Customer Service Strategy
  • Setting Customer Service Standards
  • Leveraging Technology
  • Training and Motivating Staff
  • Developing a Customer Service Culture
  • Monitoring and Communication

The aim of the toolkit is to enable the user to develop a written Customer Service Strategy, which can serve as a valuable tool for planning, implementing, monitoring and adjusting performance in pursuit of their customer service objectives.

Designing and Implementing Staff Incentive Schemes Toolkit 2005

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Well-designed staff incentive schemes can have positive and powerful effects on the productivity, efficiency and quality of MFI operations. Conversely poorly developed schemes can have serious detrimental effects. Incentive schemes must be transparent so that staff members affected should be able to easily understand the mechanics of the calculation. Thus the system should not be overly complex and should contain as many objective factors and as few subjective variables as possible. Furthermore, the “rules of the game” should be made known to everyone and should not be changed arbitrarily. In addition, it is essential that the incentive scheme be perceived as being fair, and thus the goals set out by the scheme must be attainable, and better performing staff members must indeed be rewarded with higher salaries. Finally, everyone must be able to achieve a higher compensation by working better and harder.

There are five compelling reasons why excellent customer service must be a “prime directive” for any market-led MFI:

  1. Good service keeps customers;
  2. Good service builds word-of-mouth business;
  3. Good service can help you overcome competitive disadvantages;
  4. Good service is easier than many parts of your business; and
  5. Good service helps you work more efficiently.

This manual, which was prepared for the participants of MicroSave training programmes on this subject, comprises a set of notes for each training session. The session topics include:

  • Basic principles of staff incentive schemes
  • Defining the incentive scheme objectives
  • Selecting the incentive scheme mechanisms
  • Conducting the technical design work
  • Analysing costs and benefits
  • Selling the scheme to staff

The notes contain many examples and the manual concludes with a number of case studies.

Human Resource Management for MFIs Toolkit 2005

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Effective human resource management uses systems and tools to bring together: the right number of people, with the right attitude and skills, in the right place, at the right time. The goal of human resource systems, tools and activities is to help the individual employees who make up an institution to be successful at their jobs and to work well together. In order to accomplish this goal, Human Resource Management (HRM) must be an integral part of the strategic plans of an organisation and have the full support of senior management and the board of directors.

This toolkit which was written by MEDA and published by MicroSave divides the primary activities of HRM in the context of microfinance into six broad categories:

  1. Human Resource Planning
  2. Human Resource Policies
  3. Recruitment and Selection
  4. Salary, Benefits and Incentives
  5. Performance Management
  6. Training and Development

It has been written with microfinance institutions in mind but the principles apply equally to any type of financial service provider and would be as useful in a credit union or rural bank. The toolkit is detailed and practical and contains many summaries, checklists and examples. Accompanying handouts are available on the MicroSave website.

Author Kim Pityn; Jennifer Helmuth
Publisher MicroSave; MEDA
Number of Pages 89 pp.
Primary Language English (en)
Region / Country Global
Keywords Human Resource Management, Recruitment, Training Methodology, Staff Development
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Building Human Resources for the Micro-Finance Industry: Issues and Concerns Article 2004

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This short paper outlines the implications for human resource development of the salient features of the micro-finance industry. The first point to note is the diversity of functions required, e.g. developing new financial products, initiating policy dialogue, delivering credit plus services but on the other hand there is a need for standardised operating procedures. To manage operations on the scale that is required, very highly trained manpower will be needed.

As micro-finance is about finance, all staff will need some detailed training in finance. This component of training acquires significance from the fact that large majority of microfinance institutions have emerged from development background, with most of their staff inadequately trained in this area. This input needs to become more that just training in financial skills; it should be designed to help people think financially.

The second area, where training is going to be critical is the ability to work with people from disadvantaged sections of society. Most micro-finance institutions have strengths in working with communities but with mainstreaming and scaling up, these organisations will have to worry about how these skills can be transferred to a large number of new entrants, reasonably quickly. Training in information technology will also be significant for the micro-finance sector as changes in this field open the doors to many new feasible options.

Understanding the commercial viability of enterprises as clients move on from emergency and consumption-smoothing finance will become another training need. In addition as micro-finance practitioners handle the responsibilities of other people’s money, especially of vulnerable people, it will be important for them to understand the legal environment. SA-Dhan is an association of Community Development Finance Institutions in India which is developing an agenda of training to meet its members needs in all these areas.

Author SA-Dhan
Publisher SA-Dhan
Number of Pages 4 pp.
Primary Language English (en)
Region / Country Global
Keywords Staff Training, Agricultural Microfinance
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Improving Employee Performance in Microfinance Institutions: Incentive Remuneration Guideline 2003

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Performance-based incentive remuneration can be used by institutions to encourage increased productivity and to help achieve other goals. The paper puts forward four main questions at the outset:

  • Beyond the challenge of motivating staff, on what foundations should incentive policies be based to ensure a positive impact on institutional performance?
  • What parameters are necessary to define an appropriate incentive remuneration strategy?
  • How does a remuneration system take into account the specifics of an individual organisation?

The overall aim of this paper is to offer guidelines for designing an incentive remuneration system and to identify the factors or elements influencing the choice of an appropriate scheme. The paper aims to set out the principles to be observed, the conditions for optimum use and the various options all in relation to an incentive remuneration strategy. As well as describing the major stages for designing such a scheme, this guide also introduces practical experiments undertaken by various Dévelopment international Desjardins (DID) partners and by various other MFIs.

The paper begins by considering the objectives, principles and conditions required for success. It then follows with a study on designing an incentive remuneration system, which includes highlighting the key advantages and precautions at each stage. The latter half of the paper sets out a series of 8 case studies. The idea is to compliment the theoretical aspects discussed earlier in the paper by drawing on the experience of actual MFIs that have adopted an incentive remuneration system. Each case study is usefully accompanied by a summary table setting out the main reasons for adopting the system as well as its key aspects and how it functions.

Author Fortier, C., Leduc, S.M.
Publisher Développement International Desjardin
Number of Pages 57 pp.
Primary Language English (en)
Region / Country Global
Keywords Human Resources, Human Resource Development, Staff Incentives
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From the Roots Up: Strengthening Organizational Capacity through Guided Self-Assessment Toolkit 2000

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Capacity building can be understood as an explicit effort to improve an organization’s performance in relation to its purpose, context, resources and sustainability. The self-assessment process presented in this field guide is designed to help organizations recognize their own potential and decide for themselves how to best address the challenges they face. This guide has been written specifically for local intermediary organizations working with community-based partners. Throughout the guide there are tips on how to adapt and create exercises and methods to fit the specific needs of the organization with which you are working and the local context. The margins are used to summarize the main points and the text is broken up by useful graphs, charts and graphics that assist in the explanation of the main concepts.

The guide contains nine chapters, appendices, a glossary of key concepts and a list of recommended resources. The chapters are as follows:

  1. The big picture of development
  2. How to use the guide
  3. The main concepts of organizational self-assessment
  4. Ideas for preparing exercises
  5. Overview of planning a guided self-assessment workshop
  6. Conducting fieldwork
  7. How to work with facilitators
  8. Analysis and documentation
  9. A reference list of exercises used in the guide
Author Gubbels, P.; Koss, C.
Publisher World Neighbors
Number of Pages 194 pp.
Primary Language English (en)
Region / Country Global
Keywords Capacity Building, Self-Assessment, Staff Training, Assessment Tools
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The People Part: Common sense advice in motivating microfinance clients and staff Book 2000

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This booklet forms part of the Catholic Relief Service Microfinance series. It serves as a user-friendly guide geared to managers trying to run microfinance institutions (MFIs). It places its emphasis on the human side of the microfinance business, stressing the need to build up a reliable client base through personal contact and the value of having a skilled staff which functions as a team.

Author Susan Gibson gives a clear and easy-to-follow series of concepts to follow. Microfinance institutions should be responsive to the needs and situation of individual clients, with mutual accountability between institution and client; they should be financially sustainable, run as a business rather than a charity, and efficient. On the way to these conclusions, which are as commonsensical as the title says, the author lays out her ideas simply and effectively.

The book is divided into two parts: Part 1 focuses on the clients angle and covers topics such as who and where are your clients, understanding client needs, creating a vision, what’s reasonable to lend and charge; Part 2 focuses on staff and deals with such issues as getting the right people to do the job, the importance of recognition, building a team, making training relevant, fun and applicable, leading by example. Each two-page section is distinguished by a relevant quote from an author or philosopher, a three-point list of main principles, and even a suggestion for a motivational song or two.

This booklet offers a fresh and encouraging hands-on approach to client and staff management. It addresses the difficult questions of how to handle non-repayment of loans and how to fire staff, and always with a positive emphasis on assistance and good business practice. It is a must-have for managers of MFIs.

Author Gibson, S.
Publisher Catholic Relief Services
Number of Pages 67 pp.
Primary Language English (en)
Region / Country Global
Keywords Staff Development, Microfinance Institution
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Managing Growth: The Organizational Architecture of Microfinance Institutions Paper 1997

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This document was written to provide microfinance practitioners with ideas and suggestions to assist them with the challenging task of managing growth. It notes that the traditional approach to managing growth relies on standardization and replication. Although this approach is valid, particularly for MFIs that do not operate in competitive markets, this study draws on lessons from upheavals in the corporate world where many businesses have realized that bigger is not always better. In the face of heavy competition, many corporations are reorganizing and “right sizing” in line with new thinking on growth management. As the microfinance industry matures and MFIs experience increased competition, this study argues that they are likely to conclude that lessons from the business world are increasingly applicable.

Managing growth incorporates all aspects of MFIs. This document uses the metaphor of “organizational architecture” as a framework for analyzing and designing three inter-related components that are essential to managing growth: (1) institutional culture, (2) human resource development, and (3) organizational structure.

The document begins by defining the term “organizational architecture”. It notes that it requires an inclusive view of the elements of design and of the social and work systems that make up a large and growing corporation. Organizational architecture includes the formal structure, such as the design of work practices; the nature of the informal organization or operating style; and the process for selection, socialization, and development of people. As companies gain equal access to capital and as many technologies mature and become widespread, organizations will gain a competitive advantage primarily from their ability to deploy and leverage the efforts of the people in the organization.

Following this, the study starts with a discussion on “understanding growth”. This includes sections covering the pressure to grow, approaches to managing growth and microfinance growth strategies. The bulk of the paper then provides a detailed analysis of each of the three areas noted as essential for managing growth.

The conclusion notes that managing growth, as defined by the three elements of organizational architecture, is the process of building solid and lasting institutions. The conclusion then considers some of the lessons from the business literature on these three subtopics as they pertain to three levels of institutional development: (1) subsidy dependent; (2) operationally efficient; and (3) financially self-sufficient.

Author Churchill, C – ACCION International
Publisher Development Alternatives Inc
Number of Pages 98 pp.
Primary Language English (en)
Region / Country Global
Keywords Agricultural Microfinance, Agricultural Growth, Organisational Structure, Human Resources
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