A public sector bank has introduced Artificial Intelligence-based recruitment, digital learning platforms, and HR analytics dashboards. However, employee productivity has remained unchanged because business heads continue to evaluate employees using outdated KPIs unrelated to digital transformation. According to Strategic HRM principles, which factor is MOST responsible for this failure?

Strategic HRM emphasizes vertical fit, meaning HR policies should directly support organizational objectives. Although the bank adopted modern HR systems, performance measures remained outdated. Thus, HR initiatives were not aligned with business strategy. Therefore, technology alone cannot improve performance unless performance management supports strategic objectives. Why other options are incorrect B. Horizontal fit Horizontal fit refers to consistency among HR functions like recruitment, training, appraisal, and compensation. Here, HR functions themselves appear consistent. The mismatch is between HR practices and organizational strategy. C. Workforce Planning Workforce planning concerns forecasting manpower needs. No evidence suggests incorrect staffing levels. D. Succession Planning Succession planning develops future leaders. The issue concerns performance evaluation. E. Job Analysis Job analysis determines duties and responsibilities. The problem lies in performance metrics rather than job design.