Day-to-Day Activities

1. Day-to-Day Activities Organization and Management Presented by S. Cox

2. 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

3. 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

4. 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

5. 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

6. 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 executives

7. 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

8. Day-to-Day Activities Special Departments

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. Day-to-Day Activities Human Resources

22. 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

23. 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

24. Recruiting and Hiring New Employees • Recruiting is attracting the best people for the positions…multistep process: • Recruit applicants • Interview selected applicants • Verify references • Hire the best applicant

25. Recruiting and Hiring New Employees • Recruiting Applicants is not as simple as hanging a help wanted sign…bank jobs usually require a specific set of skills, experience, and education • 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 • 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

26. Recruiting and Hiring New Employees • 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 • 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

27. Recruiting and Hiring New Employees • 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

28. Recruiting and Hiring New Employees • 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.

29. Recruiting and Hiring New Employees • 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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