A Review of Human Resources Practices Influencing Workforce Effectiveness in the Banking Sector

Abstract

The aim of the research, which claims banking as a basic element of economic development and financial soundness, has been analysed in the prism of Human Resource Management (HRM) as the strong force of organisational functioning and workforce success. This review article discusses the multidimensional nature of HRM practices, including recruitment and selection, training and development, performance management, compensation and rewards, employee engagement, and leadership, in increasing productivity, flexibility, and competitiveness in the banking industry. The study has a qualitative systematic literature review approach and utilises peer-reviewed research, journal articles, and institutional reports published in 2020-2025, as databases include Scopus, Web of Science, Google Scholar, and Emerald Insight. Thematic analysis method was employed in order to synthesise key findings of 59 chosen studies with the help of the Resource-Based View (RBV) and Human Capital Theory to explain the contribution of strategic HRM practices to workforce competence, motivation, innovation, and resilience. The results indicate that sustainable performance is based on the alignment of HR strategies with organisational objectives, the use of digital technologies in HRM, and the promotion of inclusion and well-being. The research is, however, limited by the fact that it uses secondary data, the analysis was conducted qualitatively, and the available literature is concentrated in the region, which could limit generalisation. In spite of these drawbacks, the review provides useful information to scholars and practitioners, pointing out that adaptive and technology-orientated HR should be applied to enhance the effectiveness of the workforce in the changing banking sector.