The Importance Of Credit Risks In Human Resource Management

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Credit risks is a major risk associated with any lending institution. A lending institution relies on customers applying for loans and then making the monthly payments that consist of both principal and interest. However, when these debtors do not pay their monthly payments or when they make late payments, then that is a risk and it will affect the lending operations. An individual that would be in charge of trying to reduce these credit risks is a credit analyst. A credit analyst is responsible for determining the credit of the borrower and putting everything about the borrower’s credit in a portfolio in order to determine whether the borrower will be able to repay the loan amount according to the loan conditions. The main job of a credit analyst is to utilize a credit score system where each borrower is screened before the leaning institution …show more content…
An operational risk is a potential risk that were not meant to happen such as human risks, natural disasters, or error of the company policy and procedures. All of these components would affect the day to day operations of the business, but it is important that the human resource manager has plans and procedures in place where employees can go to reference in order to find the answer to a question before taking action. Another important component that would help reduce organizational risk is proper training on the company’s policies and procedures as well as the strategic plan and overall goals of the company. By a company properly training their employees, it will generate revenue by encouraging employee to follow the company rules and understand what is expected of them in terms of the company’s own policy and procedures (Levoy, 2011). Therefore, if the human resource manager takes the time and really teaches the employees of the policy and procedures of the company, then it will hopefully reduce the risks formed from operational

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