In September of this year, the European Microfinance Platform published the results of a survey that mapped Human Resource Development (HRD) Practices in the Microfinance Sector and highlighted opportunities for acting on those results. This blog is the fourth in a series of thematic case studies which explore the actions that some survey participants have taken to address each area. The profiled institutions were selected based on the quality of their HR practices and their willingness to share experiences. We are extremely grateful for their time and effort to contribute to this important research.

As noted in the first and third (part 1 and part 2) blogs of this series, managers play a critical role in HR development. They establish expectations, identify needs, facilitate learning, nurture individual potential, and coordinate teamwork. They are expected to model preferred behaviors, motivate performance, and ensure discipline.

It’s a daunting job description – and that’s only the HR part. To explore some of the ways that MFIs are supporting managers to carry out these functions, this blog uses the 9Buckets framework, which was inspired by research conducted with CGAP on employee and agent empowerment. Each of the buckets in the framework represents a type of resource that MFIs might provide to increase managers’ ability or willingness to carry out their HR role.

Resource category #1: Information and knowledge

There are many kinds of information that could prove useful to managers. Some of the examples mentioned by survey respondents include: a description of the HR functions that managers are expected to perform; job descriptions that clarify what each employee is expected to deliver; succession planning guidelines; data on the performance of individuals and teams; and results from employee and climate surveys.

VisionFund Guatemala and Bank Arvand in Tajikistan both conduct regular engagement surveys. They share organization-wide results with all employees, but they also segment the data by branch and share that analysis with branch managers so they can see what is working well and what needs to be improved within their span of control.

Resource category #2: Skills and habits

The second way that MFIs can support managers in their HR role is to provide opportunities for them to strengthen their HRD practices. More than three-quarters of all survey respondents train managers to assess their employees’ technical and soft skills, provide professional feedback, or identify employees’ individual strengths and delegate tasks accordingly. 34% provide training in all these areas. At some MFIs, such as ASKI in the Philippines, HR training is a requirement for promotion to a supervisory position.

Training isn’t the only type of opportunity being provided. Coaching is increasingly popular and is offered by 65% of survey respondents. MFIs like Crystal in Georgia and FINCA Guatemala have developed programs that combine training with practice and coaching to build HRD skills through a series of interactions – but with considerable differences: Crystal’s program lasts three weeks, while FINCA Guatemala’s lasts nine months. Managers are expected to practice what they learn in between training sessions and discuss the results each time they reconvene. Resilience training is an important part of the agenda, strengthening managers’ ability to respond to whatever circumstances may arise.

Resource category #3: Values and attitudes

Managers are more likely to fulfil their HRD role if they believe that doing so is important and feasible. MFIs can’t force managers to believe in HRD, but they can nurture that belief through their messages, targets, and culture.

VisionFund Guatemala’s transformation leadership initiative started with a simple message, “You’re not just responsible for making sure employees stay with you forever; they’re supposed to grow.” That message is supported by the work of the People and Culture Department, which strives to get everyone in the organization thinking about the culture they want to work in and taking concrete steps to live it.  

At Buusaa Gonofaa in Ethiopia, General Manager Teshome Dayesso was able to guide his managers through a particularly difficult period during the COVID-19 pandemic by asking them to identify one thing that they could do something about. “As soon as that was clear,” he says, “everyone was relieved, and the mood went up [a lot].”

Resource category #4: Dialogue and support

In interviews with case study MFIs, this resource category was mentioned more often than any other. MFIs are providing managers with opportunities to access other people’s knowledge, skills, energy and influence through formal coaching and mentoring programs, participatory performance management processes, informal feedback sessions, discussion guidelines, periodic field visits, phone calls and WhatsApp chats.

“Sometimes we just speak to our branch managers and say, ‘Okay, how is your team doing?’” Fermin Sanchez, CEO of FINCA Guatemala, asks members of his management team to visit branches regularly so that those in the field recognize that they are part of a bigger company. At Buusaa Gonofaa, company level joint feedback sessions allow branch managers to learn from each other’s success, failure, and challenges. At ASKI and VisionFund, regional representatives play an important role, providing HR guidance and one-on-one support on the ground in a relevant context. And at Bank Arvand, midterm reviews offer an opportunity to discuss whether managers have what they need to meet expectations.

When a change affects all employees, having a dedicated person that supports managers with timely implementation can be helpful.  One of the ways that ASKI overcame employee resistance to a new mobile app was to have a dedicated person communicating with employees, helping them register and login, and designing creative strategies to help people see the benefits of the new app.

Resource category #5: Control and influence

To play a productive role in HRD, managers need to be given responsibility for specific HR functions, have the authority to act within their span of control to fulfill those functions, and be held accountable for the results. Ideally, they would also have channels for influencing HR decisions outside their span of control, especially when those decisions impact their team.

The case study MFIs seek to clarify managers’ HR responsibilities through job descriptions and annual performance agreements. They hold managers accountable for achieving specific HR results as part of their standard evaluation process. Most often, what gets measured is employee satisfaction and retention, but some MFIs measure whether the professional development plan for each employee has been met.

All the case study MFIs that conduct regular employee surveys ask managers to develop action plans that address areas of weakness. At VisionFund, these action plans are followed closely each quarter by the Senior Leadership Team and the Board; even the Audit department uses survey results to identify risks and follow-up on corrective actions.

MFIs are also finding opportunities for managers to influence HR decisions that are outside their span of control. 57% of survey respondents consult managers on the design of learning and development (L&D) programs to ensure they are practical. 46% ask managers to assess the impact of L&D measures on their employees’ performance. In many MFIs, managers do not control the hiring of new employees, but they influence hiring decisions by participating on selection committees.

Resource category #6: Tools and infrastructure

There are many types of tools that can make it easier for managers to fulfil their HR role, but interviews with case study MFIs highlighted three:

  • tools for understanding employees, their performance, and their motivation;
  • tools for communication and collaboration; and
  • a coherent system of policies and procedures that create a safe and equitable work environment.

The better managers can understand their employees’ knowledge, performance, and motivation, the more appropriately they can guide and support their employees’ development. Knowledge tests, competency management systems, scorecards and employee surveys make it easier for managers to identify what an MFI expects of each employee and the extent to which employees are meeting those expectations.

Bank Arvand’s assessment system creates an automated report for each employee that summarizes input from the employee, supervisor, any tests or trainings taken during the evaluation period, quantitative and qualitative performance indicators, as well as contextual information such as the number of years the employee has been working with the company. The report provides the basis for discussions between the employee, their supervisor, and the HR department.

Salome Kvakhadze, Head of Talent Development and Management at Crystal in Georgia, commented on how the digitization of performance data increases the speed with which managers can access information about employee performance and use it to improve results in the current period. “Manual data is past data and it’s more static,” she explained. “Digitalization helps us be more proactive.”

For communication and collaboration, case study MFIs found platforms like WhatsApp, Zoom and Microsoft Teams to be game changers, particularly during the COVID-19 pandemic. Two organizations also mentioned using the DiSC® model to help managers understand team member personalities and improve working relationships.

With respect to policies and procedures, interviewees spoke in general terms about the need for guidelines that would help to ensure fair treatment (such as protocol for resolving complaints), and structures that could help managers create better routine practices (such as quarterly performance reviews to encourage more regular feedback).

Resource category #7: Rewards and penalties

Even if managers know what their HR role is, and can perform it, they may not choose to do so if they don’t enjoy it or, as mentioned above, they don’t think it is important enough to warrant their attention. Rewards and penalties can motivate managers to take their HR role seriously, and guide, motivate or discourage specific actions.

42% of survey respondents incentivize HR goals (either employee retention or specific learning and development objectives). 9% reward managers when the employees they supervise are promoted. Among case study MFIs, ASKI makes a point of recognizing top performing managers on social media, something which is generally highly valued in the Philippines.

Resource category #8: Time and energy

Time and energy are finite resources. There are only 24 hours in anyone’s day and people have limited energy, so if MFIs want managers to spend more of their time and energy on HR functions, they have only three options:

  1. Help managers use their time and energy more efficiently by providing one or more of the resources described above;
  2. De-prioritize some of the tasks that currently consume managers’ time and energy so they can spend more on HR functions; or
  3. Bring in other people to help.

Case study MFIs have used all three approaches, but primarily adopt the first. They are providing information, tools and skill building opportunities. They’re also engaging managers in conversations about the kind of support that would make it easier, or more enjoyable, to carry out their HR roles. Sometimes it is the existing tools and infrastructure that may make the job difficult or unappealing, and in these cases reengineering a process, rather than replacing an entire system, can have a significant impact.

Resource category #9: Money

The ninth type of resource that could be used to support managers in their HR role is financial. Interestingly, none of the MFIs interviewed mentioned money as a constraint or a lever for this purpose. That doesn’t mean it can’t be useful. Money is typically needed to acquire new tools and improve the infrastructure, for example, but MFIs usually find it more cost-effective to purchase or develop tools for all managers to access rather than give each manager money to buy tools themselves.

The good news for HRD is that many of the resources discussed above can be provided without additional financial resources. It’s part of what makes this an exciting and promising area for action within the microfinance sector.

Photo 1: Bank Arvand

Photo 2: ASKI

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