Impact of Voluntary Retirement Scheme (VRS) on Competitiveness and Cost Efficiency in Indian Public Sector Banks a Case Study of the SBIN

Ravindra Yadav¹

Section:Research Paper, Product Type: Journal-Paper
Vol.1 , Issue.1 , pp.1-7, Sep-2013

Online published on Sep 30, 2013

Copyright © Ravindra Yadav . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
This study examines the implications of the Voluntary Retirement Scheme (VRS) implemented by Indian public sector banks, specifically focusing on the State Bank of Indore. Introduced to enhance cost efficiency, operational productivity, and competitiveness within the banking sector, the VRS aimed to streamline human resources in response to increased pressures from economic liberalization and globalization. The research investigates VRS`s effects on profitability, productivity, and human resource optimization, as well as its psychological impact on employees who either accepted or declined the offer. The study evaluates shifts in financial performance metrics such as business and profit per employee and examines changes in HR management strategies, including policy development, employee acquisition, and organizational restructuring. Further, it explores the psychological responses among "survivors," or remaining employees, addressing factors like morale, loyalty, and stress levels. Using paired t-tests, regression, and factor analysis, this research assesses VRS`s success in achieving its intended goals and provides insights into how HR strategies can be optimized for improved efficiency in a competitive, liberalized economy. Findings contribute to understanding the broader impact of VRS on workforce dynamics and organizational health within the public banking sector.

Key-Words / Index Term :
Voluntary Retirement Scheme (VRS), Organizational Restructuring, Employee Morale, Employee Loyalty, Employee Stress, Survivor Employees, Paired t-test, Regression Analysis. Factor Analysis, Banking Sector, Workforce Dynamics, Organizational Health

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