day-to-day activities

Day-to-Day Activities

Organization and ManagementPresented by S. Cox

Objectives

• Explain how organizational charts are used in the banking industry

• Describe how banks are structured• Describe the role bank management plays in

meeting bank goals

Organizational Charts• Organization and leadership are important characteristics

of banks– Organization provides structure for action– Leadership structures an organization and directs its members– Classroom is similar…you can see who is in charge, but it

doesn’t end their…teachers report to the principals, principals report to the board and so on

• Organizational chart – a diagram representing the structure of a company or organization…allows you to see the relationships among individuals and groups that might be difficult to put in words

Bank Structure

• Organizational structure depends on its size and goals…each bank is different– Departments – group created when several

employees in a business are working on a specialized task (marketing, customer service, and human resources)

– Branch office – banking facility that is not the bank’s main location…called branches

Bank Management

• How the bank is run…managers usually carry out the plans the executives develop– Managers – a bank employee who is in charge of a

segment of a business…must have:• Responsibility – the duty to complete an assigned task

we• Authority – the power to affect or direct a situation or

worker’s behavior

Bank Management– Executives – top layer, managers who have the

responsibility and authority to make decisions about the bank and how it conducts its business• Depends size and ownership…for example smaller

banks have fewer executivesChief Executive Officer (CEO)

Chief Operating Officer (COO)

Vice Presidents by Function

Department Managers

Chief Financial Officer (CFO)

Bank Management

– Board of Directors – group of individuals elected by a bank’s shareholders to represent and guide the bank’s policies and business decisions• Ultimate authority Board of

Directors

Chief Executive Officer (CEO)

Chief Operating Officer (COO)

Department Managers

Chief Financial Officer (CFO)


Special Departments

Objectives

• Describe the special functions that banks perform

• Explain the administrative tasks tellers perform

• Explain how a bank collects funds from unpaid loans

• Describe the role of compliance in bank operations

Operational Support

• Front-line operational support is performed by tellers…most public faces in a bank– Greet customers – inside

or drive through– Cash checks and make

deposits

Operational Support

• Transactions – tellers prepare, verify, and process deposit slips; cash checks; sell money orders and traveler’s checks; inform customers of their balance; and transfer funds from one account to another

• New Account Functions – at many banks tellers help customers open new accounts…explain the account characteristics and any unfamiliar terms

Operational Support

• Safe deposit boxes – a strong storage container usually metal, that is kept in the safest area of the bank…rented to customers, who use them to store valuables– Requires two keys – one stays at the bank and the

other is given to the customer– Must have proper ID to be able to access the box

Operational Support

• Customer Interaction – tellers are often the first interaction customers have with the bank; the impression that tellers give contributes to the bank’s public image

Operational Support

• Balance the Cash Drawer – cash drawer has separate compartments for different denominations of coins and bills; often a drawer that can be inserted and removed from the tellers workstation…must balance it everyday

– Verifying that the drawer has the correct amount of cash after several transactions

– Regulations do not govern when or how the cash drawers are balanced

– Not all banks use the same procedures

Operational Support

• FedCash Services are provided by the Federal Reserve Banks– Used to order additional currency and coins to meet the

needs of the customers– Excess currency and coins are deposited with the Federal

Reserve bank– Damaged currency is deposited at the Federal Reserve

Bank and removed from circulation• Head teller usually prepares the order or deposit• When it arrives two people must verify by counting

Loan Collection

• Not all loans are repaid…goes into collection – the transfer of past-due loans to a bank department or outside agency that attempts to gather full or partial repayment of the loan

• Several options– Take the property if the loan was secured– Negotiate with the borrower– Take court action to recover lost funds

Loan Collections

• Secured loans – backed by an asset (collateral)– Foreclosure – the legal process of ending an

owner’s right to a property, usually caused by unpaid mortgage loan…usually refers to real estate

– Repossession – when the bank takes property from a borrower who is not able to repay the loan…generally refers to a vehicle

– Then the bank sells the real estate or other property to pay for the loan

Loan Collections

• Negotiation – if the customer is unable to pay banks will try to re-negotiate the terms of the loan…lower the interest rate and extend the length of the loan– Customer gets to keep the property and the bank

doesn’t have the expense of collecting an unpaid loan

Loan Collections

• Court Action – a bank can take a borrower to court for an unpaid loan– the court may order to garnish the borrower’s

income…Garnishment is withholding all or part of a borrower’s salary to pay an outstanding unsecured debt or bounced checks

– Often a last resort for an unpaid loan

Compliance

• Banks are heavily regulated to protect customers• Laws and regulations cover every aspect of

banking from advertising to customer interactions

• Compliance is the process of following these laws and regulations– Banks hire compliance managers or teams to ensure

that the bank meets new and updated rules


Human Resources

Objectives

• Summarize the role of the human resources department

• Explain the process involved in recruiting and hiring a new employee

• Describe benefits that may be offered to employees

• Explain the employee review process• Discuss the importance of maintaining employee

records

Human Resources Department

• Human Resources (HR) Department – finds and supports employees who contribute to the success of the bank

• Small banks may have only one person in HR but larger banks may have several and can be separated into four categories:– Recruiting and hiring new employees– Managing employee benefits– Conducting or supervising employee reviews– Maintaining employee records

Recruiting and Hiring New Employees

• Recruiting is attracting the best people for the positions…multistep process:1. Recruit applicants2. Interview selected applicants3. Verify references4. Hire the best applicant


• Recruiting Applicants is not as simple as hanging a help wanted sign…bank jobs usually require a specific set of skills, experience, and education1. Promotions from within for those who are on a career

path (a series of jobs with increasing responsibility within a specific career) within the bank…great way to keep good employees

2. Media Advertising – in the past job seekers would look through the classified ads in the newspaper but today the Internet is where companies often advertise open jobs


3. Job fairs – a recruiting event attended by one or more companies that are seeking new employees• Held at hotels or conference centers, often sponsored

by colleges or universities• Each company has a table or booth set up

4. Employment agencies – match an employer’s available jobs to workers who have the needed skills, education, and experience• Can be private companies or government agencies• Helpful to both job seekers and employers


• Interviewing Applicants– A company usually interviews several applicants for a

position• Interview – a meeting between a company representative and

the applicant…meant to see if the applicant is a good match for the position

• The number of times the applicant is interviewed varies…could be interviewed by different departments (HR, manager, and coworkers)

• May have to take a test…for example a math test• Personal and professional ethics are particularly important in

banking…confidentiality, ethics, and honesty may be discussed


• Verifying References – – After the applicant passes the interview phase the

company will contact the applicant’s references• Reference – a person who can provide information

about the applicant’s work history or character.


• Hiring the Best Applicant – – Criteria for judging the applicants will vary– Education, work experience, technical skills,

leadership, and interpersonal skills are signs of whether someone will make a good employee

– Hiring cannot be judged based on someone’s age, gender, race, religion, or ethnicity

Managing Employee Benefits

• Employees receive salaries and benefits in exchange for their work– Benefits are services or privileges that an employer

provides in addition to the employee’s wages or salary• 401(k) and stock options; scholarships; health insurance;

free training; paid sick days; wearing casual clothing on Friday

• Some are standard for all and others vary based on length of service or position

– HR ensures that each employee receives the benefits he or she is entitled to

Reviewing Employees

• At regular intervals employees will have a performance review or performance evaluation…to look at how well an individual is doing his or her job

Reviewing Employees

• Performance evaluations fulfill many functions:– Clarify an employees role in the company– Determine whether strategic plans are being carried out– Open lines of communication– Assess the extent to which goals have been met– Gauge employee potential for advancement– Provide feedback to the employee and supervisor– Identify differences in expectations and outcomes– Discover areas for needed support or training– Conclude if performance level merits a pay increase

Reviewing Employees

• Typically occur annually…new hires are evaluated 3 to 6 months after being hired and then annually after that– Conducted by the employee’s manager…sometimes

coworkers are asked to participate– May be tied to a raise– Managers should keep on going records of employee

performance to help with the annual evaluation• Some employers choose to evaluate everyone at the

same time and other choose to evaluate their employees on their service anniversary

Reviewing Employees• Un acceptable Performance – if an employee performs

poorly, he or she may be placed on probation…a period of time in which the employee’s performance is closely watched– If poor performance continues the employee may be terminated– If performance improves the employee may be taken off

probation– If the employee’s behavior is unethical, he or she may be

terminated immediately…if illegal, he or she may be arrested– Unethical behavior cannot be tolerated when dealing with large

sums of money and confidential information

Maintaining Employee Records

• Most businesses keep extensive records about every employee from initial contact to last contact

• Intended to document events and actions taken• State laws about record access vary…typically

employees are allowed to see their records on request, but are not allowed to see records about criminal investigations, reference letters, or documents obtained before they were hired

day-to-day activities

Documents

banks tellers

goalseach bank

bank employee

banks performexplain

banks policies

banks shareholders

role bank management

interaction customers