Brief History Of HBL Commerce Essay

Brief History Of HBL Commerce EssayStragtegic Human Resource Management suspensors an organization pass on productivity and effectiveness, by sharing the overall romance of the organization, sharing goals and objectives, and devising sure that Human Resource is non just a department, but the whole organization speaks of HR as the effect division, which manner that organization is employee centered. strategicalal HR changed a number of things in HBL. It updated the way envisions were make, shifting to strategic plans, from a one-man show to bringing e realbody on get on, advance idea generation and sharing proposals, opposite departments sharing their plans of what to look for in the coming year and democratic decision making by appointing a Strategic Planning Division and appointing member from the Board of Directors that goes through each plan and then the CEO communicating the approved plan to the departmental mentalitys. By this, the plan became not just an objective, but more than of a bible.At HBL, after the privatization, a number of initiatives were taken, from right sizing and getting rid of lethargic employees, to introducing flamboyant handshake schemes, from moving to implementation management clay to inducting young blood that brings in fanciful ideas. Concepts akin employee engagement and job rotation became part of the policy, organization-wide rewards programs were introduced.An ineluctable change in culture was in any case accomplished, it from the seniority based to performance based culture. Overall structure of the organization was also made flatter, removing additional levels and bureaucracy. installation TO HBLIt is the prime Bank in country established in 1941 having a registered head agency in Karachi. It was nationalized in 1974, but recently on twenty-sixth February 2004 it has been privatized by Government of Pakistan and is taken over by Aga Khan computer storage for Economic Development (AKFED). They acquired 51 percent of sh bes of HBL.It is one of the whoppingst Banks of Pakistan with 1439 branches, having total as coteries of Rs. 1,139,554,000, 5 one million million million total number of customers helping in gene range Rs 13 million profit currently.Brief History of HBLHBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the cusss 25th Anniversary.With a national market sh be of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial avowing sector with a major market sh atomic number 18 in indwelling foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.On December 29, 2003 Pakistans Privatization Commission announced that the Government o f Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the sh beholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 2004, management control was handed over to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the electric chair and the President/CEO and three Government of Pakistan nominees.BUSINESS DIVISIONS AT HBLHBL has a wide array of customers, belonging to a wide range of business divisions, from individuals to corporate, from Muslim banking to commercial banking. They are divided into three main categories, as followsIndividual CustomersCar, Home LoansCredit, Debit CardsDeposit AccountsBancAssurancePhone BankingFastTransferMutual Funds wage PlusBusiness CustomersCorporate BankingCommerical BankingSME BankingGlobal TreasuryInvestment BankingCash ManagementZarai BankingAs redress ManagementIslamic BankingDeposit AccountsFinancing ProductsMurabahaDiminis hing Musharakajarah clientele and Value added ServicesMISSIONTo make our customers prosper, our mental faculty excel and create value for shareholdersVISIONEnabling spate to advance with confidence and success setOur values are the fundamental principles that define our culture and are brought to life in our attitudes and behavior. It is our values that make us unique and unmistakable. Our values are delimitate belowExcellenceThis is at the core of ein truththing we do. The markets in which we operate are becoming increasingly competitive, giving our customers an abundance of choice. Only through being the very best in harm of the service we offer, our products and premises rump we hope to be successful and grow.IntegrityWe are the leading bank in Pakistan and our success dep overthrows upon trust. Our customers and society in general expect us to possess and steadfastly adhere to luxuriously moral principles and professional standards.Customer FocusWe understand in full the call for of our customers and adapt our products and function to meet these. We always strive to put the satis occurrenceion of our customers first.MeritocracyWe believe in giving opportunities and advantages to our employees on the basis of their ability. We believe in rewarding achievement and in providing first-class career opportunities for all.ProgressivenessWe believe in the advancement of society through the adoption of enlightened working practices, innovational new products and carry throughes, and a spirit of enterprise.HUMAN RESOURCE AS A SOURCE OF COMPETITIVE ADVANTAGEBrief IntroductionHuman alternative, being the pulsing of any organization, is its most precious asset. And information plays a vital role in tapping and developing its potential to the utmost. With this place factor in mind, HBL pioneered its first fostering program in 1946, in which Muslim youth were recruited after an extensive tour of leading academic institutions.There are 78 employees in the HR department. jibe to Adnan-ur-Rehman Khan, ripened Manager, Human Resources at HBL Worldwide, the practice is of having 100 to 1 ratio, i.e. to have one employee of HR department per 100 employees of other departments. In Pakistan, unless due to low importance of HR as a strategic function, it is okay to have 1000 to 1 ratio instead.ImportanceBank is a service industry, automation cannot be done. Every activity has to be managed by gracious beings, a particular department is at that placefore unavoidable.Trust and loyalty can only be ensured by gay beings. Banking involves money, which is why ensuring trust is extremely important.Housing 13,000 sight is not an easy job. HR department at HBL deals with the factors associated with human beings like counseling, behavior management, motivation and job satisf achievement.Since the organization is heterogeneous, complex and large a proper HR department exists to manage the diverse needs of large internal customers.Catering to administrative and long term strategic needs of employees. Support functions are required in order to help employees work towards organisational goals.RECRUITMENT PROCESSInternal job postingThis is the most traditional manner which most of the companies are following in which CVs are being quiet from companys website and other sources and then after the filtration process desired individuals are called for the interview. HBL in truth grooms and trained their employees in different departments and whenever there is a vacancy they always prefer their trained employees. This adds a lot to the current employees confidence and morale, which they have a better chance to be promoted and thus strive to achieve higher than expectations. submission level hiring fresh graduates for MTOS and non MTOSMTO admission program is being conducted in 6-7 certified universities, students who have a GPA above certain level can apply. They are being passed through screening and interview processes a nd then HR team hire them. Non MTOs are selected from B grade universities are passed from a testing process which is being outsourced, then they are also passed through an interview process and are shortlisted.Mid careerCV is being selected from the database of bank which points out the staple skills required for the job. After this HR team selects candidates who can perform these required tasks very effectively. These candidates are preferred to already have a career of at least 8-10 years so that they can understand the job demands properly.Cross function hiring Hiring from different departments is also preferred as one of the enlisting method at HBL. For example while hiring for retail banking they also look into corporate bankings department. Similarly hiring for HR department can be done from compliance and canvass divisions.TRAINING AND DEVELOPMENTThe banks Training Division has gained renown for its excellence and efficiency and was called upon to assist in training personn el for other upcoming baking institutions. With the enactment of time this assistance became a testimonial of the banks valuable contribution towards establishing and developing of other commercial banks within the country where several trained Habibians went to work with senior, put and junior levels. Word of its skills spread far wide which led to numerous international banks sending their personnel to HBL for training.Presently HBL manages full-fledged teaching facilities and support staff at Karachi, Lahore and Islamabad. The training programs are conducted with the modish aids and equipment and involve extensive training to new recruits, and existing staff with specialized courses that cater to the different prison cell of personnel on treetopics of Management, Marketing, Selling, Accounting and Finance, Banking Law and Practice and Internal Procedure. Speakers from other prestigious institutes are also invited to deliver lectures.Methods employOn the Job trainingCoachin g/MentoringGroup DiscussionsOutdoor trainingRewards and RecognitionFor them remuneration is the unwrap element of employee engagement. Two elements of remunerationAnnual salary act-related benefit death penalty is more than just achieving financial objectives. As a bank they pride themselves at their unique culture and values Every employee receive a values rating that reflect how employee live at their values and culture, which influence their performance related awards. . Those with the lowest value ratings would receive no annual performance related bonus, so far if they achieve all their financial targets. The rating criterion is as followsA is a role model.B is an exemplary.C lived value with more time.D needs to learn values.These ratings denote your bonuses as well as fall in increments. These ratings are purely awarded on the basis of performance and as mention earlier for that key performance indicators (KPI) plays a significant role. Along with these ratings they also g ive rewards for some particular achievement as recently they have arranged a 3 day holiday trip to Malaysia for their remote banking employees for performing significantly well.OutsourcingHBL manages its workforce by not hiring everybody. S. Ali Raza Zaidi, VP, Personnel Division said Now a days, there are companies that deal help in delivering services, which helps in keeping our workforce under control. Take credit card sales for example. These companies go for aggressive sales and telemarketing. There are not our employees, but bring us business and charge a fee for the service. In this way, HBL is also outsourcing some of the services, for which we dont need to actually employee people. However, if supervisory program is needed, that must be a companys person.INNOVATION AND RISK TAKING AMONG EMPLOYEESThey motivate their employees to be courageous and bold enough to raise their voice against the system and for the system. There is a leadership board on internet to which every p erson is accessible and writes whatever he thinks should be done to purify the organizational effectiveness and then he is called to explain his idea in front of Board of Directors.This further elaborates the openness that is quite visible in the culture at HBL, where every employee is given confidence to speak what they feel is right and raise voice against anything that is bad, anonymity is of prime importance and HBL makes sure the whistle blowers remain plungeation the curtains.MOTIVATION AMONG EMPLOYEESMotivating the employees is of primary importance to any organization. HBL follows below criteriaCompensateThe salary and employee benefits your bank provides serve a major role in recruiting, retaining, and motivating staff. While salary and benefits are not the most important aspect of your jobs, they definitely contribute to recruiting, retaining, and motivating superior employees. The quest to compensate employees fairly is an on-going challenge. If your bank pays emplo yees too little, you may risk alienating and losing valuable employees. If you pay too much, you may be unwisely spending company resources. How much your bank can afford for employee salaries can determine the caliber of talent you attract to your organization. workPerformance plays a significant role in motivating the employees. Performance of the employee can be judge by the employee himself. As in the beginning of the year targets are being set for the employees performance so by the end of the year employees themselves can see that what they have achieved and what more they can earn with their performance.Transition to Strategic HRMWHY SHRM?Strategic Human Resource Management practices upraise employee productivity and the ability of agencies to achieve their mission. Integrating the use of personnel practices into the strategic homework process enables an organization to better achieve its goals and objectives.With the advent of todays economy where services contribute to a major share of the GDP and the fact that the service sector is essentially people centric, it is vital that the people first approach be accepted by the organizations for sustainable business strategy. The practice of SHRM demands a proactive and hands on approach by the management as well as the HR department with regards to the entire scope of activities ranging from staffing and training and development to mentoring and pay and performance management.Adnan-ur-Rehman Khan, Senior Manager, Human Resources Were not a small firm, were in fact one of the biggest banks of Pakistan, having experience that ranges to decades. With so much experience, the one thing which we learnt is that people are your most important, and irreplaceable asset. You want monetary gains, you cannot ignore the human resource of your firm. This is infeasible today, as it is in future. If youre to go ahead, and really fulfill the vision, you have to trust your people. Invite them on the same platform, listen to their problems, and encourage them to speak their mall out. This essentially means that you welcome them on the big table, show them the big picture, share your mission, and treat your people like your stakeholders. Only in this way, by treating people as your strategic element, you can get the competitive edge against competitors.STRATEGIC PLANNING AT HBLPlanning processStrategic Planning Division is made up of Board of Directors which evaluates previous performances, current market trends and forecasts future potential on a yearly basis. BoD evaluates several proposals and modified goals.All the core departments of HBL are involved in the strategy formulation, the formation of following years strategy is a combination of input signals and proposals from departments like Marketing, Operations, IT, Finance and Human Resource.According to Adnan-ur-Rehman Khan, Senior Manager, Human Resources at HBL The strategy is not just what the next year would be like, it is more like fulfilli ng the vision, which cannot be done without coordination of each department, responsibility and commission of every employee of each division. The strategy is made when each department is on same page, one platform. This is what strategic planning means. The process, though extensive, only goes through with hefty consensus. The Strategic Planning Division votes on the proposals, and suggests recommendations if needed. After going through the extensive process of planning and strategizing, the plan takes the shape of a bible.Policy making is done by feedback process i.e. input, process, output and feedback. Input is provided by the BoD and top management, and then they are circulated in the organization. Employees work according to these policies and then their pros and cons are observed for the future policy making.Significance of strategic planningPlanning out the future of any business is the best way to guarantee success. It seems unenviable in beginning, but as the time goes by, a strategy is what helps a business move in the right (planned) direction. At HBL, once approved strategic plans become bible for the whole organization, every department is given particular goals to meet every department comes up with its own strategy on how to achieve those goals.SBUs are also encouraged to come up with their own business strategy, since each business division has better understanding on deciding the action plan to meet targets. According to Adnan-ur-Rehman Khan, Senior Manager, Human Resources at HBL every division is allowed to come up with its own strategy to meet the set targets, top management is flexible in this regard.Types of Strategic GoalsStrategic goals are monetary and non monetary. Monetary goals are highly centralized and cascaded down to businesses and interpret these goals to SBUs and non monetary goals are transferred to support functions and support functions interpret them. Performance management system reviews the performance of SBUs and su pport functions, if any discrepancy is found, departmental heads are taken to task.Monitoring Performance Management SystemProgress of implementation of strategic goals is continuously monitored, if any discrepancy is found between performance level and set goals, it affects performance estimate process. If everything goes as planned, performance management eventually helps in the performance appraisal of employees. Performance Managements core objective is manage talent, motivation, commitment of the employees towards the organization and its vision.They have very strong evaluation process in which the evaluation is started right away from the 1st day of joining to the bank. Right from the first day the immediate supervisor of an employee has a meeting with him and they both discusses around the goals, objectives and what is being expected from him. They have key performance indicators through which the performance of each and every employee is being analyse. With the help of thi s key performance indicators and the discussion with the supervisor the employee had a clear idea and road map that what he has to do and what is expected from him. The goals are being set by the mutual understanding between the employee and his supervisor. This evaluation is being done on the semi annually basis. On the basis of this evaluation employees get their pay raise and ratings. The more rating points you earned the more pay increments you will get.Communication of GoalsCEO communicates these goals to direct reporters i.e. departmental heads which are further communicated to functional heads who set their respective targets. For example the functional head of retail banking sets their target to collect the deposits of Rs 25 million and now it is to be increased to 35 million by 2013. Retail banking allocates goals to its further 20 regions after a meeting with their respective heads. Regional heads might require more resources so HR department arranges for that as well (Exa mple quoted by S. Ali Raza Zaidi, VP, Personnel Division, HBL).Policy Making and Risk ManagementBoard Human Resource Committee (BHRC) includes chairman, president and one independent board member. These three members issue recommendations on HR Initiatives and policies. Similarly there are committees of compliance and risk which deals with the matters like compliance with government policies on employment, ethical issues, matters like sexual harassment and the like.STRATEGIC INITIATIVESTransformation from Public to PrivateIn 2003, under the government of General Musharraf a commission called Pakistan Privatization Commission was formed, under the leadership of Shaukat Aziz HBL, along with many other companies, was privatized and 51% of its shares were sold to Aga Khan Fund for Economic and Development (AKFED).Right Sizing of work forceEarlier when HBL was a habitual organization its culture was lethargic, many people under burdened, all responsibilities were shared vaguely. When it went private one of the strategic decisions taken was of right sizing. From 31000 employees all over Pakistan, in 1997, the number was shrunk to around 10000 and it stands at 13000 as of 2012. The right sizing did not create an ethical issue because the nature of the organizational holding was changed.Workforce cut down to 13000, which increased the productivity level and motivation because the less-productive employees were laid off which increase individual work load but not so much as to over burden employees and helped organization cut down cost of additional employees that were not contributing enough.From Annual Confidential Report to Performance Management system.Initially HBL used to do the performance appraisal on annual basis and this process was called annual confidential report which was as the get up suggests kept confidential to the top management only. After privatization bank moved towards performance management system which was by nature more transparent, open to input from various departments and was reviewed on a continuous basis to make sure that the performance of employees is in line with the strategies made at the top.Paradigm Shift to Growth-OrientedAccording to Adnan-ur-Rehman Khan, Senior Manager, Human Resources While some organizations are strictly business oriented where the only thing that matters is money, on the other extreme there are people centric organizations which are primarily concerned with its workforce, HBL took a midway approach. The organization believes in welfare of its employees by channeling their efforts towards achieving monetary goals. Banks culture is such that its the people who bring in profits so it should be people who are benefits the most from the profit which cannot be done without organizational growth in the terms of greater market coverage.Organizational Transformation by introducing Golden Handshake SchemeWhen the organization realized that the current workforce could not come with many creative ideas and lacked physical efficiency and could not cope with changing market trends due to resistance to change, HBL introduced golden handshake scheme. Under this scheme 25/55 rule was established i.e. the employees with 25 years of experience within the bank and 55 years of age were offered 5 months cumulative salary and their services were recognize as an honor to HBL.Inducting Young BloodPreviously discussed golden handshake scheme helped HBL to induct young blood. Since youth is more inclined towards updating themselves with latest techniques, open to change, have superior physical strength and more creative mind, this strategy helped increase efficiency in the organization. This young blood equipped with the creative mind and greater insights of recent market trends helped te bank to grow in the face of fierce competition.Tracking Employee Demand and SupplyManagement at HBL is alert on upcoming vacancies, and how to fill them up. Whenever an employee is about to leave, he mus t serve the one month notice period, the company first looks at the internal pool of candidates, those who are most eligible to be promoted. If there is no replacement available in the current employees, the bank goes the through the external recruitment process (mentioned above in recruitment process).Employee EngagementJob rotation and transfer is done every 3 years according to the policy. The assignment should be changed for this purpose. Nobody is allowed to work more than three years on the same position, he is either promoted or his job is changed, job rotation is a key policy at HBL.Job rotation program is also there for Management Trainee employees who are being rotated to different departments after every 6 months. HBL derives following benefits from their job rotation policyExplore the Hidden Talent Job Rotation is designed to expose employees to a wider range of operations in order to assist managers in exploring their hidden talent. In the process, they are moved throug h a variety of assignments so that they can gain awareness about the actual working style of the organization and understand the problems that crop up at every stage.Individuals Explore Their Interests Sometimes, employees are not aware of what would like to do until they have their hands on some specific job. If their job is rotated or they are exposed to different operations, they can identify what they are wide at and what they enjoy doing.Identifies Knowledge, Skills and Attitudes Job Rotation helps managers as well as individuals identify their KSA (Knowledge, Skills and Attitudes). It can be used in determining who needs to improve or upgrade his or skills in order to perform better. This helps in analyzing training and development needs of employees so that they can produce more output.Motivates Employees to grass with New Challenges When employees are exposed to different jobs or assigned new tasks, they try to give their best while effectively dealing with the challenges coming their way. gladness and Decreases Attrition Rate Exposing employees to different tasks and functions increase their rapture level. Job variation reduces the boredom of doing same task every day. Moreover, it decreases attrition rate of the organization.Align Competencies with Requirements concurrence of competencies with requirements means directing the resources when and where they are required. It assesses the employees and places them at a place where their skills, competencies and caliber are used to the highest possible extent.Career counseling when neededEmployees who are not able to perform or want to leave the organization voluntarily they were given incentives which were added in their benefits. In other cases where employees with good performance are planning to leave the organization then they are provided with proper career counseling by the HR manager himself and his reservations are also sorted out to uttermost extent.Employee as familyTo motivate the employe es non monetary benefits are also there which includes gatherings, trips to foreign countries, picnics, visits, lunches and formal dinners. This helps the employees feel like part of the family, rather than just workers. This is essential in terms of relationship building, and increasing communication between the top management and other employees.CORPORATE STRATEGYAccording to Adnan-ur-Rehman Khan, Senior Manager, Human Resources HBL follows the strategy of diversification, since it deals with different customers, in different markets. We have a different group of customers for Islamic Banking, different for Corporate Banking. We aggressively look for new divisions that have a high potential of growth. For example, we were the pioneers of Zarai Banking, which made our portfolio diverse.HBL is suppose to be a heterogeneous, complex and large organization therefore there are multiple strategies used. Centralized approach is used for financial dealings is used.Top management is flexib le in this regard that every function can devise its own business strategy.Core Divisions at HBLHBLs pioneer division is Agri financing. They are market leaders and other banks are following HBL. The division deals in providing farmers with necessary financing.Second core division at HBL is Retail Banking.CULTURE AT HBLSeniority based culture to performance based cultureWhen the bank was Public limited, the culture was more inclined towards advance comes with age and loyalty. The transition to Private limited company ensured that the culture be changed performance based. The seniority now holds less weight as compared to actual performance, when it comes to performance appraisal.Employee Work hours and Overtime issueHBL has a very strict policy against overtime. Overtime is not appreciated much. Timings are followed strictly. Every employee is supposed to leave the office at 5.30 PM, the usual off time of the organization. If an employee is sitting late and working, he is obliged t o answer as to what took him to register overtime. The culture is such that when more than 95% employees leave on time, including the top management, employees are generally demotivated to stay late as well.ResponsivenessCustomer responsiveness delivers an excellent customer experience. As a global research reported, 81 percent of banks with strong capabilities and competencies for delivering customer experience excellence are outperforming their competition. An effective customer response strategy enables a bank to deliver the highest standards of customer care at a time when the customer most needs it. That level of care makes an important contribution to customer satisfaction and long-term loyalty.Head of resourcing instead of head of recruitment. Outsourcing worker services,ANALYSIS OF ORGANIZATIONAL STRUCTUREThe purpose of an organizational structure is to help in creating an environment for human performance. It is then, a management tool and not an end in its own. Although th e structure must define the task to be done, the rules so established must also be designed in the light of abilities and motivation of the human recourse available. By analyzing the organizational structure of HBL presence of the following elements can be found in its structure.Transition towards flatter organizationAnother change in the private limited company was the removal of additional levels in the organizational hierarchy, this helped in reducing the communication gap between employees and management, and among