Transforming the human resource management of microfinance institutions: The case of Bank Rakyat Indonesia

The microbanking operation of Bank Rakyat Indonesia (BRI) is widely acclaimed as one of the most successful minimalist microfinance operations. This paper focuses on the transformation of the human resource management (HRM) practices of BRI that contributed significantly to this success. It begins by discussing the change in the overall organizational objectives within BRI, followed by a before-and-after comparison of its HRM practices, in terms of staff selection, training and compensation management. Since the transformation, BRI has continued its commitment to integrate these improved HRM practices into its organizational strategy, despite the fact that an alternative approach may be available at a lower cost. This sets a standard for HR and staff retention in difficult environments that is still not emulated by many others despite the success of BRI.