Bank One (North South University)

7/27/2019 Bank One (North South University)

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Background

History of Bank One:Bank One is the sixth largest bank holding company in the United States. Itsheadquarters are based in Chicago. It has 74000 employees at 2000 branches in 14states. Its assets are worth more than 260 billion. It is a leading provider of lending,treasury management and capital market products and its retail bank serves over 7.2

million households.

Commercial National and City National bank of commerce of Columbus merged toform City National Bank and Trust. John H. McCoy became president in 1935 and in1958 his son John G. McCoy became president. The bank offered the first Visa creditcard outside of California. It also created the first drive up bank and was one of thefirst banks to use ATMs. John G. McCoy formed a holding company called FirstBank Group In Ohio, which later became Bank One. The bank also expanded toIndiana, Kentucky, Michigan and Wiskonsin.

John B. McCoy, became CEO in 1984. During his fifteen years he acquired over 100banks, he also bought twenty failed banks and expanded into Texas. Then it movedinto Illinois and after that it entered Arizona and Utah. Its first international venturewas with Banco Nacional de Mexico in 1992. In 1996, Bank One purchased premierBank corp the number three bank in Lousiana. A year later it added Liberty Bankcorp.After buying first USA in 1997, Bank One became the third largest credit card issuer.

Bank One had a large retail operation based primarily in Midwest and Southwest.Bank One usually let the old managers stay in the banks after acquiring them. Soonafter the Merger First USA created problems by raising their credit card charge from4.5% to 19.9%.

In 2000, Bank Ones board of directors asked Jamie Dimon to take over as CEO.Dimon was a tough, loud and charismatic young leader. When he took over Bank Onewas badly managed and poorly organized. He bought two million shares of Bank Onestock with hald of his fortune. He eliminated 8000 jobs in his first year and scaled

back and auto leasing unit. He also closed Wingspan. Dimon also replaced twelve ofthe top thirteen executive managers at the bank.


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By developing marketing and customer service Bank One succeeded in getting back

many credit card holders. Earnings which came down to about 0 in 2000 reached 946million in 2001. Attrition declined from 20% to about 10%. New managers got rid ofabout seven million inactive accounts and reduced the number of new accountsopened. The bank also bought Wachovias consumer credit card portfolio adding 2.8million customers.

A big problem of Bank One was the mix of computer systems by mergers withregional banks. The bank had to blend seven deposit systems which seemed almostimpossible at that time. Dimon insisted that all the systems be integrated into one

single platform. One by one, state by state the went into conversion of the systems.

Dimon was experiencing highest amount of difficulty with managing the loans of thebank. In his words, You dont run a business hoping that you dont have arecession. This was the case with Bank One. The bank assessed profitability of eachloan and warned those that seemed risky.

Culture of Bank One:Under Dimons influence, many significant changes took place in Bank Ones culture.Employees were acting with greater openness, passion and urgency. They wereencouraged to ask questions and give suggestions. A program named BureacracyBusters Program was initiated to help remove bureaucracy. In 2002 this program wasrenamed as Idea Center to gather ideas from the employees for making the workenvironment better and faster. Employees sent thousands of suggestions to this

program and many of them were implemented.

The Bank started centralizing its operations and gave the people in the fields moreauthority and responsibility. Dimon also encouraged teamwork across theorganization.

Organizational Structure:

Bank Ones commercial line of business ran in fourteen states of four regions. Theregions were : South, West, MidWest and East. The states are Lousiana, Oklahom,Texas, Arizona, Colorado, Utah, Illionis, Indiana, Wisconsin, Kentucky, Michiganand Ohio.


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Bank Ones main line of business included investment management, retail,

commercial and credit card. It defined small businesses as having annual revenues of10 million. Middle market customers ranged from 10 million to 500 million andcorporates were over 500 million.

Competitors:Bank One had many competitors. It varied across different states and regions.

Customer service:

Bank Ones customer service was following the method of tiering the customer tomake the bank more profitable. At all First Bank in Baltimore only the top customershad acces to Bank agents over the phone. Credit card customers were coded with red,green and yellow. Red meant unprofitable, green profitable and yellow as somewherein between.The method of tiering was attractive cause the bank had the biggest gap ingaining profits from customers.

Under the leadership of Dimon, Bank Ones customer service had steadily improved.Dimon trained the employees to sincerely help the customers. He also emphasized onteamwork. Bank One also developed strategies and guidelines to help improve servicequality. Bank One had promised its 60000 employees that they would get directanswers to their queries. The service essentials of Bank One are:

1. Accuracy,2. Quick Response time3. Fast Problem Resolution

4. Proactive, empowered, knowledgeable, trustworthy employees5. Personal attention

Structure of Commercial CustomerService:

Each bank Of Bank One has a service manager and service consultant working withunderwriters, bankers, treasury management sales officers and divison managers. In


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addition to local service consultants Bank One also has service centers in Milwaukeeand Chicago.

Recognition for OutstandingCustomer Service:

Bank One recognizes and encourages service excellence. For this purpose they havebegun programme from January 1, 2000 to reward employees by giving themindividual plaques around 26 emblem category. Emblems were awarded monthly,

quarterly and annually. Service excellence in E-cards were launched in March 2002.

Quality Improvement Measures:

Bank One implemented a number of ways to monitor and improve customer service.They ensured that any issues were resolved to the customers satisfaction. Theseincluded customer care reports, conference calls, performance reports, monthlycustomer satisfactions surveys etc.

Challenges in Customer Service:

Technical Knowledge and teamwork are the two greatest challenges in maintainingcustomer service. The banks products and services changed frequently so the banksservice consultants needed to upgrade their knowledge frequently. They also neededto know many different softwares to access information since different banking

products needed different solutions. They also needed to know many different parts ofthe bank as they had to navigate through the system.

Future Direction in CustomerService:

After Jamie Demon took over the bank in 2000 the bank had come a long way inimproving customer service. In the future they needed to address these issues:

1) Empowering service consultants


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2) Professionalization of customer service3) Customer service technology

Service Consultants needed to be empowered as they were the root of the serviceprovided. This could be done by improving efficiency and granting more autonomy.The customer service staff needed to be more professionalized. Many of the serviceconsultants dressed more formally then other staff. But they needed to prove their

professionalism by their work attitude. Newer technologies needed to be introduced togive the customers the best service by taking less time.


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Bank One have made a significant stride improving and delivering the quality of itscustomer service, eliminating bureaucracy by encouraging employee participation andteam work, integration of deposits systems.

Main issueWhat strategies should be adopted by Bank One in the future in order maintain themomentum and continue to improve customer service?


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SWOT

Analysis( NARROW)

Strength

1. Bank One has got an outstanding and match winner CEO like Jamie Dimon toachieve its goals.

2. Along with all the acquisitions, Bank Oneis presently the sixth largest bank in U.S whichis a huge strength for them.

3. There is an openness between Dimon and hisemployees which gives the comfortably to theemployees to work with Bank One.

4. Bank Ones goal was for customers toreceive services seamlessly and efficiently, nomatter where they were or what their banking

needs.

5. Bank One developed Service Essentials in fall 2000, recognizing that theoverall quality of the experience keeps customers coming back.

6. Bank One recognizes serviceexcellence in several ways. Forexample, the national CommercialClient Services RecognitionProgram rewards the achievementof the Service Consultants in

Middle Market, Large Corporate,and the Service Centers.

Weakness1. Bank One was a very bureaucraticorganization.

2. There was mix of computer systems left over from dozens of mergers with regionalbanks of Bank One.


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3. To maintain quality service one important thing was to have harmonious teamwork

which was somewhere missing in Bank One.

4. To continue building quality into customer service within the middle market, thebank should empower the service consultants but they are not.

5. Bank One does not have many service centers.

Opportunity

1. To help reduce bureaucracy, Bank One implemented a Bureaucracy BustersProgram, an online suggestion box that paid employees for money-saving ideas. In2002, the Bureaucracy Program was renamed The Idea Center to encourage moresuggestions on how to improve the banks internal processes.

2. They removed those cheap loaners because whom their money was losing.

3. Bank One has huge business line which creates

newer opportunities for them.

Threat1. Bank One had many different competitors,depending on the market who are giving hugecompetition to Bank One.

2. Bank One met up their biggest threat when theymerged up with NBD.

Strength

1.Well effective CEO like Dimon:

Bank One has got an outstanding and match winner CEO like Jamie Dimon to achieve


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its goals.

Undoubtedly, a good and wise Chief Executive Officer is the matchmaker for anybusiness organization, let alone the banking industry and there is no doubt; Mr. JamieDimon is the perfect person to handle the current and ongoing crisis of Bank One.This bank has already been passing a very turbulent time for which its survival has

become questionable. In this kind of circumstance, Bank One is supposed to havesomebody who can act as a Crisis man to overcome the situation and to regain its

previous prestige and reputation. Mr. Dimon is a mastermind banking professionalwho knows how to tackle critical situation and how to react on those particular time.He has timely taken some measures, which proved him an expert solution provider forBank One.

Mr. Dimon is such an asset for organization who can change the entire scenariowithin a short period of time. His wise decision and prediction about his organizationand the industry always keeps himself at forefront. So, it can be mentioned that thiskind of employee is a very strong and vital strength for any organization especially forBank One in such a terrible time.

2. Huge Dynasty:

Along with all the acquisitions, Bank One is presently the sixth largest bank in U.Swhich is a huge strength for them.

With headquarters in Chicago, Bank One is the sixth largest bank holding company inthe United States, with assets worth over $260 billion. The bank has 74,000employees at 2,000 branches in 14 states. The bank is a leading provider of lending,treasury management, and capital markets products to Middle Market businesses andcorporations. The retail bank serves over 7.2 million households.

This hug dynasty represents power of Bank One which itself is a basic strength ofBank One.

3. Openness between employer and

employees:

There is an openness between Dimon and his employees which gives the comfortablyto the employees to work with Bank One.

Under Dimons leadership, Bank Ones culture underwent important changes. In hisletter to the stockholders in the 2001 Annual Report, he noted that employees wereacting with greater openness, passion and urgency. He frequently talks with theemployees and they reply him enthusiastically.

These friendliness and openness need to maintain in every organization as it increases

workers satisfactory level and productivity which is present in Bank One.


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4. Goal is customer satisfaction:Bank Ones goal was for customers to receive services seamlessly and efficiently, nomatter where they were or what their banking needs.

One of the most important characteristics of a service consultant is a sincere desire tohelp people. This related to Jamie Dimons belief about what it takes to make theBank succeed. Dimon told a crowd of systems analysts, loan officers, and branchmanagers in Chicago, Winning isnt about patents or your IQ or where you went toschool. Its about one thinghow much you want it!

They focus on customers satisfaction more than increasing stock value. This priorityis their strength to do business.

5. Developed Service Essentials

Bank One developed Service Essentials in fall 2000, recognizing that the overallquality of the experience keeps customers coming back.

Service essentials are the needs of the customers which will make them to comeback. It identified the following customer needs:

Accuracy

Quick response time

Fast problem resolution

Proactive, empowered, knowledgeable, trustworthy employees

Personal attention

These service essentials are one step toward maintaining customer satisfaction. Ifcustomers are satisfied then they can carry on their business and they are highlyfocused on that which is clearly visible.

6. Recognition programs:

Bank One recognizes service excellence in several ways. For example, the nationalCommercial Client Services Recognition Program rewards the achievement of the

Service Consultants in Middle Market, Large Corporate, and the Service Centers.


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The program began on January 1, 2000, to reward employees, who received engravedrecognition plaques with emblems to reflect their individual achievements. Among

the 26 emblem categories were Service Star, Best Overall Service Star, Sales Star,Client Applause, Leadership, Fraud Detector, and Lemons-2-Lemonade. Emblemswere awarded monthly, quarterly, and annually, depending on the emblem criteria.The emblems were earned by course completion, supervisory, customer and business

partner recognition, as well as peer and team nominations. Service Excellence E-cardswere launched in March 2002 to provide an avenue for employees to show theirappreciation to internal colleagues and external customers. The Commercial BankingSenior Management Recognition program sent a complimentary letter or memo froman Executive Vice President to employees in Commercial Banking who had receivedwritten compliments from internal or external customers. Corporate ServiceExcellence began the Service Heroes program to celebrate service and spotlight

employees who provided outstanding service to internal and external customers.

This recognition process is very important part of them to motivate their employeesand giving them a place among the customers mind. So both customers andemployees are becoming strength of them which is very much unique among other

banking organizations.

Weakness:

1. Bureaucracy:

Bank One was a very bureaucratic organization.

Being bureaucratic was a huge weakness of Bank One. There were so many uselesslayers in the organization. Those job places were completely unnecessary and weremaking the organization a complex one.

2. Twisted mix of computer system:

There was mix of computer systems left over from dozens of mergers with regionalbanks of Bank One.

Because of these the Bank had to blend seven deposit systems, and worked hard toavoid service problems that could frustrate customers to the point of leaving. BankOnes goal was for customers to receive services seamlessly and efficiently, no matterwhere they were or what their banking needs.


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Because of this problem many customers were leaving the bank so it was a hugeweakness of Bank One.

3. Lacking of teamwork

To maintain quality service one important thing was to have harmonious teamworkwhich was somewhere missing in Bank On.

A key to excellent customer service was teamwork. Customer Service Consultantsneeded to work closely with people in other areas of the bank to resolve problems.Consultants used many different systems in a typical day to access information, sincemany banking products use different software for deposits, loans, and information

reporting. Customer Service Consultants had to be familiar with many parts of thebank as they navigated the different systems. Teamwork was vital since customerissues often crossed over into other lines of business. Service Consultants had todepend upon people in other areas of the bank to help resolve any problem. So lackingof teamwork was exposing the weakness of Bank One.

4. Lacking of empowerment on the

service consultants

To continue building quality into customer service within the middle market, the bankshould empower the service consultants but they are not.

The service consultants of Bank One are holding no power of themselves. They arenot properly empowered which is demotivating them as well as they are not beingable to improve their customer service.

5. Lacking of service centers:

Bank One does not have mush service centers.

In addition to the local Service Consultants in each market, Bank One has ServiceCenters in Milwaukee and Chicago that handle calls from Middle Market customersnationwide. Customers usually prefer to receive help from a person in their own city.However, the National Service Centers have longer hours, from 7 a.m. to 7 p.m.

Central time.


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Opportunity

1. Idea center

To help reduce bureaucracy, Bank One implemented a Bureaucracy Busters Program,an online suggestion box that paid employees for money-saving ideas. In 2002, theBureaucracy Program was renamed The Idea Center to encourage more suggestionson how to improve the banks internal processes.

In response, employees sent in thousands of recommendations, and the Bank putmany of them in place. According to the experienced view of the employers this openup a new chance for Bank One to improve their system. Even many mistakes can besolved if they use it effectively.

2. Removing problematic loaners

They removed those cheap loaners because whom their money was losing.

Dimon required worst-case scenario planning after analyzing the major weaknesses ofBank One. He stated, You dont run a business hoping you dont have a recession.As a result, the bank assessed the profitability of each loan on its books. DomesticCorporate Banking chief John E. Neal reviewed a list of about 1,800 borrowers andgave warning to those whose loans might not be renewed. Many cheap loans werelosing the bank money. The bank offered these commercial customers the opportunityto purchase other products (such as asset management, treasury services, derivatives,

and bond underwriting) from Bank One, or find another bank. In this way, theirrelationship became profitable for the Bank, or they left.

Because of leaving those customers they gain huge revenue and hoping to get more bycovering up the losses which is taken as great opportunity.

3. Huge business line:

Bank One has huge business line which creates newer opportunities for them.


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Bank Ones Commercial line of business operated in fourteen states in four regions:

the West, South, Midwest, and East. The South region included Louisiana, Oklahoma,and Texas; while the West covered Arizona, Colorado, and Utah. The Midwestconsisted of Illinois, Indiana, and Wisconsin, and the Eastern region coveredKentucky, Michigan, and Ohio. Bank Ones main lines of business includedinvestment management, retail, commercial, and credit card. The bank defined small

business as one with annual revenues of $10 million or less. Commercial customershad annual revenues of over $10 million. The Banks Commercial line of businesswas divided into Middle Market and Corporate. Middle Market customers generallyranged from $10 million to $500 million in annual sales, while corporate customersran over $500 million. The Middle Market group serviced depository accounts

(checking and savings and all variations), treasury management products, capitalmarket products, and commercial loans.

Threat

1. CompetitorsBank One had many different competitors, depending on the market who are givinghuge competition to Bank One.

The competitors of Bank One in the Southern regions Commercial line of businessvaried according to the market. For example, the competitors in Louisiana were local

banks such as Whitney National Bank and Hibernia. In Dallas, the competitors wereChase, Bank of America, Wells Fargo, and Comerica. In Oklahoma, majorcompetitors included Bank of America, Bank of Oklahoma, and Bank First.

2. Merging with NBD:

Bank One met up their biggest threat when they merged up with NBD.


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Bank One was formed after a $29 billion merger in 1998 between Banc One ofColumbus, OH and First Chicago NBD. Banc One had a large retail operation located

primarily in the Midwest and Southwest. In contrast, First Chicago NBDs strengthlay in its long history of corporate lending to medium-sized manufacturers. Thecombined Bank One was 40% owned by First Chicago stockholders and 60% owned

by Banc One. First Chicago NBD had most of its business in Chicago and Detroit.When acquiring banks to add to Banc Ones portfolio, McCoy usually let the localmanagers stay on and continue running the bank the way they had in the past. Heavoided centralizing the management of his new acquisitions. When Banc One andFirst Chicago NBD merged, he believed it would be a merger of equals, and agreed tomove the new banks headquarters to Chicago. After the merger, questions raged overwho was in charge. Both sides battled over whether retail or corporate should get theresources, and who should manage the businesses. Both banks resulted from multiple

mergers of the past, where neither exerted strong central controls over the mergedbanks. As a result, regional practices prevailed. Wanting to grow revenues quickly,the bank took on too many risky loans to large corporations. The stock lost half itsvalue in two years. Adding to the problems was First USA, the credit card operationthat Bank One bought for $8 billion in 1997. Soon after the merger, First USA abusedits customers by increasing rates 4.5% to 19.9% if they paid a day late only twicewithin six months. As a result, large numbers of customers fled.

HRM Issue

ISSUE#1


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Bank One doesnt have any specific HR Department

Bank One is the sixth largest bank holdingcompany in the United States, with assetsworth over $260 billion. The Bank has74,000 employees at 2000 branches in 14states and it doesnt have any specific HRdepartment. The Bank is a leading providerof lending, treasury management, and capitalmarkets products to Middle Market business

and corporations. So for maintaining all ofthis bank one should establish a HRdepartment. A proper HR department canhelp any company to reach their perfectgoals. Also it about the employeesmanagement. There are so many employees in Bank One, but they didnt have any

plan that how will they hiring people, how will they provide training provide. AsJamie Dimon already realized that they need to provide really a very good service totheir customer, but they dont have any proper plan that how will they train theiremployees to provide customer service. This is all about a proper HR department.

ISSSUE#2

Bank One does not have structured policy about their

employees benefit or compensation package that is applicable

for all the employees of fourteen states in four regions and

different lines of businesses.


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We already saw in case that Bank One is the sixth largest bank holding company inthe United States, with assets worth over $260 billion. The Bank has 74,000

employees at 2000 branches in 14 states and when Jamie Dimon took theresponsibility, he saw that they had huge problem in providing customer service. Inthat case, there is nothing mentioned about the compensation packages of theiremployees. So with out the proper compensation and packages we dont thinkemployees of Bank One can be motivate. So, to encourage them and to make the bestoutput from their employees there should be a plan about compensation benefit oremployee benefits. Only proper compensation can satisfy the employess of the anycompany ant its really very important for any company to be success. Even theydidnt have any plan about their employees motivation and satisfaction. And wethink this a very big important issue because employees motivation

is a vital tool for any company. As the company providingcustomer service, but there is nothing mentioned aboutthe system of providing customer service, also there isnothing mentioned that how will employees get propertrained to providing best services through customers.So, including all of this , we think this one is also a

big HR issue of Bank One.

ISSUE#3

The management of Bank One did not have strong central

control over the merged banks

While solving this case we find out that the management doesnt have strong central

control over the merged banks. There is also nothing mention about any strategywhich can lower organizational and transaction costs, concentration of HR


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management skills and the bank not so well connected with other branches andacquired banks, attuned to organizations long term skills/capabilities needs and

consistent processes and practices. So, there is no mechanism to improve theemployees performance. Moreover, this would allow efficiency and synergy to creepin.

ISSUE#4

Bank One being affected because of its

Bureaucratic nature.

In that case, we were able to find out that underDimons leadership, he noted that in 2001 Annualreport that employees were acting with greateropenness, passion, and urgency. He also encouragedemployees to ask and solve problems. He also askedthe employees that they really thinks they are slowand bureaucratic or not. And most of them agreedwith that problem. As a result, employees aredissatisfied. It is not unsurprising to see that Bank

One was not being able to satisfy its customersthrough its service. Bureaucracy therefore isdamaging to organizational effectiveness. It is alsoweakening employee morale, commitment and canalso act as an element to increase turnover.

ISSUE#5

The long working hours can create

exhaustion and lose inproductivity

In the case, it is mentioned that Service Centerslocated in Milwaukee and Chicago have longerhours, from 7 a.m. to 7 p.m. Working for 12hours is a tough ask for any employee. Theemployees are likely to be tired and lose theirconcentration. This is definitely going to decreasetheir productivity. Moreover, the employees willhave a feeling a monotonous creeping through intheir work. As a result, they will not be able to


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enjoy their work. Moreover, the employees are not being compensated well for theirwork. This is also likely to decrease their motivation.

RecommendationProblem 1:

Bank one doesnt have any specific HR Department.

Recommendation:

An HR Department should be set up.

An HR Department necessitates the functions andresponsibilities, which no one else either wants or is capable of doing. From recruitingto orienting new employees, from writing job descriptions to tracking attendance, andfrom instituting and monitoring policies to monitoring benefits, there has been a need


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for an HR generalist to assist senior management in both establishing a structure toholding down costs of administration. HRM have become an integral part in business.

A difference in being a successful company or a failure company depends on the largeextent on the employees. HR is responsible for nurturing the employees of theorganization, keeping them motivated, active, enthusiastic and dedicated to theirwork. Thus, the success of the company depends on HR management and practicesfollowed in an organization. Bank One has 74,000 employees. Thus, maintaining74,000 employees without a HRM department is definitely a tough task. Moreover,having operations in 14 states further creates problem. Thus, a HR Department ismust.

Justification:It is best because HR is responsible not only for motivating the employees, keepingthem active, dedicated but also for carrying out other tasks like recruitment &selection, training and development, compensation and benefits. In order to screen outthe best from the poor or average, the selection has to be strict and closely maintained.Since Bank One does not have any separate HR department so it does not follow anyspecific rules to recruit, select, compensate or train their employees. Having a HRDepartment ensures better selection of employees and talents. Moreover, in thecurrent era of globalization and intense competition, it is very essential to train theemployees and help them to develop their competencies in order to increase their

productivity. Again, having a HR Department would decrease such headaches.Moreover, it is also very crucial that the employees are well rewarded or compensatedfor their efforts. Thus, a proper compensation plan is must. An HR Department onceagain will stand out to solve this problem.

Problem 2:

Bank One does not have structured policy about their employees benefit or

compensation package that is applicable for all the employees offourteen states in

four regions and different lines of businesses.

Recommendation:

Bank One should set up a compensation committee responsible for

developing proper compensation plan for its employees in order to

meet the need of diversified employee and different business line.

.

Compensation is the best form of showing appreciation towards a work.

Having a good compensation plan would ensure that matters related tocompensation is not ignored.


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Having a good compensation plan would also ensure attraction of talented individualstowards the organization which would definitely be welcomed. Bank One despite

being a large bank fails to take this into account which is sad. Bank One needs to havea proper compensation plan for its employees. Bank One only has Commercial ClientServices Recognition Program for the service sector but these programs should spreadto all the sectors and should be provided at all levels. In this era of intensecompetition, it is needless to say that to attract talented people, Bank One has tocompensate them well and provide them with other incentives and benefits to retainthem and keep them satisfied.

Justification:

Designing, developing and implementing benefits and compensation strategies wouldenable the company to attract, motivate, and retain top talent. This will ensure propermanagement of the planning, implementation, maintenance and administration ofthese programs efficiently and accurately. Moreover, a proper compensation planwould ensure that the employees are being compensated well and fair for their effort.This would also generate satisfaction among the employees. The employees wouldalso be motivated if they are being compensated fairly. As a result, they will workhard and have a feeling of dedication towards the organization. This in turn wouldhelp to increase the organizations productivity and revenue.

Moreover a compensation committee can play an important role like

Participate in and conduct compensation surveys to determine the Banks

market relationship. Analyze results of comparison and surveys and developspecific recommendations for review by management.

Present recommendations to CEO, Executive staff regarding Compensation.

Develop and implement salary administration guidelines.

Review proposed salary actions to ensure conformance with established

guidelines and policies; make salary recommendations for new hires.

Develop and monitor administration of Merit Increase Budget.

Facilitate and monitor the Focal Review process, process completed reviews

along with all necessary paperwork for promotions, salary increases, titlechanges, etc.

Problem 3:


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The management of Bank One did not exert strong central control over the

merged banks.

Recommendation:

The HR Department should mostly align their strategy with that of Bank One

but should also provide scope for some alteration in the strategies.

The HRM Department of Bank One should have a proper control over the bankswhich they have taken over. It is mentioned that after any acquisition McCoy usuallylet the local managers stay on and continue running the bank the way they had in the

past. In this way, the management of Bank One would not be able to have a proper

control over the acquired bank and might as well fail to take some opportunities thatmight come in their way. So, Bank One needs to set up a core policy and also amendsome of the strategies for the acquired bank to take advantage of better opportunities.

Justification

The recommended strategy is best because this would ensure proper control over theacquired banks. Moreover, having a core strategy can lower organizational and

transaction costs, concentration of HR management skills, rapid dissemination ofknowledge (org needs, roles descriptions, candidates), help the bank to be wellconnected with other branches and acquired banks, attuned to organizations longterm skills/capabilities needs and consistent processes and practices This would act asa mechanism to improve the employees performance. Moreover, this would allowefficiency and synergy to creep in.

Problem 4:

Bank One being affected because of its Bureaucratic nature.

Recommendation:

Bank one should encourage employee participation and also empower them.

In this era of Globalization, competition isintense and the survival of any company is atstake. The organizations now have to react

fast to the competitors strategy. It istherefore necessary for organization to


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encourage employee participation and idea generation in order to succeed. Therefore,Bank One should encourage more employee participation in idea generation and also

empower the employees. In Bureaucratic organization, due to the many layers ofmanagement, decisions cannot be taken quickly as decision-making authority has topass through a larger number of layers. This may negatively affect the organization.Moreover, it is virtually impossible for a single individual or the top management togenerate the range of strategic ideas. Therefore, the organization may not be in thestrong position as far its strategy is concerned. So, empowering individuals andemployee participation should be encouraged by Bank One.

Justification:

Bank One is the sixth largest Bank in the US. It has a huge customer base. Therefore,it is likely that Bank One has to provide customer service to thousands of customers aday. A situation may arise where the employee has to provide service in a way by

going out of the usual regulations of the organization. But Bank One being abureaucratic organization, would not encourage it. As a result, employees aredissatisfied. It is not unsurprising to see that Bank One was not being able to satisfyits customers through its service. On the other hand, empowering employees wouldhelp to bring down the response time and is sure to increase the customer satisfaction.Bureaucracy therefore is damaging to organizational effectiveness. It is alsoweakening employee morale, commitment and can also act as an element to increaseturnover.

Problem5:The long working hours can create exhaustion and lose in productivity.

Recommendation:The length of work time in service Centre should be decreased.

In the case, it is mentioned that Service Centers located in Milwaukee and Chicagohave longer hours, from 7 a.m. to 7 p.m. Working for 12 hours is a tough ask for anyemployee. The employees are likely to be tired and lose their concentration. This is

definitely going to decrease their productivity. Moreover, the employees will have afeeling a monotonous creeping through in their work. As a result, they will not be able


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To implement a plan some resources like- time, money, and place must be properlyallocated with preference, because without the proper allocation of these resources no

plan can be successfully implemented. Now in this subsequent implementationsection of the case solution, we have to answer some subsequent questions regardingthe implementation process following our identified problems along with theirsolutions. We will discuss elaborately in this section How we would implement ourrecommended plans, Who is going to implement them, Where we wouldimplement them and at last but not the least By when we would implement them.After answering all these questions following the problems one by one hopefully wewill be able to implement our plan timely and effectively.

Without a sound framework and without a healthy work environment, even the best

ever plans will fail. Therefore, an appropriate organizational environment must be inplace that will foster the effectiveness of our proposed implementation plan. We havecome up with some realistic implementation plan that will foster the company to thehighest extent to achieve highest efficiency in their business operation. All those plansare described below one by one along with their problems and proposed solutions:Therefore, effective and timely implementation of suitable plans is essential to makethem successful. All those implementation plans are described in the next pages one

by one along with their problems and proposed solutions.

Problem 1Bank one does not have a HR Department.

Recommendation 1A HR Department should be set up

How to implement Recommended Solution 1

An HR Department necessitates the functions and responsibilities, which no one elseeither wants or is capable of doing. From recruiting to orienting new employees, fromwriting job descriptions to tracking attendance, and from instituting and monitoring

policies to monitoring benefits, there has been a need for an HR generalist to assistsenior management in both establishing a structure to holding down costs of

administration. Thus, the success of the company depends on HR management andpractices followed in an organization. Bank One has 74,000 employees. Thus,


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maintaining 74,000 employees without a HRM department is definitely a tough task.Moreover, having operations in 14 states further creates problem. Thus, a HR

Department is must.

1st stage:

Making the draft of the levels:

To open a new HR department the Bank One will have to hire some professional HRpeople from outside who will later decide how to develop the department. At firstthey have to create an outline about how many levels would be there in thisdepartment and how to fulfill those positions like the Vice President of HR, Directorof HR, Executive managers, Mid-level managers, Supervisors, HR specialists andclerical staffs. Then they must divide the whole department into some other segmentsaccording to the work varieties.

Getting approval of the draft:after making the draft it has to be presentedin front of the department heads of four regions to get approval. Cultural andeconomic difference of the regions must be kept into mind. Once the draft is approved

then we will move to next step.

Making the HR committee: They have to restructure some processes, like-recruitment and selection, training and development, compensation strategy,centralized decision making structure etc. Such as, for recruitment & selection processthey must have a recruitment & selection committee, for training their employees theyneed a T&D section, for distributing the salary or any other compensation issues theyneed to open a compensation committee and so on.

Formulating strategic plan of the department that supports the organizational

goal: The goal of the HR department must align with the overall goal of thereorganization. Otherwise there will not be a proper selection, recruitment andtraining process. THz her people need to align with the other department people alsoto solve their problems and motivate them. So unless the different people of fourregions cannot share common goal and strategy, the HR department wont besuccessful.


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Finalizing work division, job requirement, compensation andjob description of different committee and levels of the

HR department:There are some other issues involved in HR practices. Such as- organizationalstructure, compensation system, orientation, and so on. Along with developing a newdepartment of HR the Bank One will have to hire HR people to manage all these

processes. The HR managers would have to create a proper guideline to orient thenew employees, to maintain a good relationship with both existing and newemployees, and to develop an effective compensation policy.

Cost Allocation: To open HR departments in every regional sectors of thesubsidiary, they must consider a big amount of money anyhow as they have toadd four full HR teams in their business operation. They will have to pay forgiving the new HR people their office space for which they might have toexpand their current building space, also for office furniture, Job advertisement,recruitment process for hiring people. They also have to consider the payroll ofall additional employees in HR department including the trainers for the T&D.

2nd stage:

After all the strategic planning is done, they need to focus on establishing specificallythe two processes of recruitment and training processes at first. The whole procedureof developing these two different divisions within the HR department is given belowone by one:

Recruitment & Selection process

After opening the new HR department, Bank One needs to create a Recruitment andSelection Committee at first which would be under the control of the HR department.There would be some experienced and professional HR managers or line managers inthe committee who will maintain the whole procedures of recruitment and selection.After creating the new policy and following it properly the committee will recruitemployees for HR positions. After hiring the HR people from outside for the firsttime, a written criterion would be developed following which the recruitmentcommittee members will hire the executives, managers and sales people for every


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department. So in this way by following the specific criterion they can identify theright person quickly. But the final decisions should be taken by the Executive

managers of HR department.

Training & Development process

The Bank One also doesnt have any specific Training and Development Plan for itsemployees. From the given case we have found that the company is providingtechnical assistance in the form of product application procedures where some teamsare sent to the customer locations for training the product application. So they must do

proper planning to train them effectively, because Training and Development iscrucial for a company to make their employees to be productive, efficient and

potential. If the employees are not productive and efficient enough then its reallydifficult to meet the corporate needs, objectives and goals. They must provide trainingfacilities to its new as well as its existing employees according to their personalrequirements and also according to the culture and customs of the local areas, forwhich there should be some proper planning before train them.

3rd stage:

Evaluation and feedback:

The HR department must be always on the toes to ensure that the plan is executedwith peace and harmony throughout the organization and it does not becomea source of resentment towards the company. Also what is necessary is to

assess that if the company is truly benefiting from all these. There are certaincost associated with pay cuts and freeze related to employee dissatisfactionand demotivation. If the company is main more benefits over cost issomething the organization must review form time to time.

Succession planning and long term orientation:

The HR department must focus on long term goal and succession planning to ensurethat the new HR department works well for a longer time. Without long termorientation and succession we will not find future leaders. Promotion is veryimportant for employee satisfaction. So that is also need to be fulfilled by the HR.


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Who to implement Recommended Solution 1

Before starting the developing process the Bank One must choose the right person forthe implementation program. According to us the current top management are the

people who will hire some experienced HR people from outside for creating theRecruitment & Selection Committee. According to the need they would recruit otherHR managers by using a newly properly made guideline. After that the committee

will also hire some trainers from outside to train their existing and new employees andsales representatives.

When to implement Recommended Solution 1

As they have enough money from to open the HR departments in every country, theydo not need to wait to manage the money for which they can easily go for it as soon as

possible.. We suggest that as they have sufficient financial resources to develop fournew HR departments they can go for it within three months. As HR is an important

part of every organization, as soon as possible they need to develop it so that they canhave the feedback of it before they go for furtherexpansion in other countries.

Where to implementRecommended Solution 1


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Bank One has expanded its operation Bank OnesCommercial line of business operated in fourteen states infour regions: the West, South, Midwest, and East. TheSouth region included Louisiana, Oklahoma, and Texas;while the West covered Arizona, Colorado, and Utah. TheMidwest consisted of Illinois, Indiana, and Wisconsin,and the Eastern region covered Kentucky, Michigan, and

Ohio. As day by day they have spread out their business throughout countries theymust need to proceed forward in a systematic way. We could suggest them to open itin the headquarter in Chicago at first and then in the other countries. But beforeopening the department in those places, they must research on the business cultureand employee behavior of those countries so that they can figure out what additionalchanges they need to make according to the local needs.

Problem 2

Bank One does not have structured policy about their employees benefit or

compensation package that is applicable for all the employees offourteen states in

four regions and different lines of businesses.

Recommendation 2Bank One should set up a compensation committee responsible for developing

proper compensation plan for its employees in order to meet the need of

diversified employee and different business line.


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Bank one is operating in different regions and different lines of business thecompensation plan should vary according to it. Not all lines of business require sameeffort and same working conditions. As a result Bank One should have acompensation committee to set up a structure compensation policy based on taskdivision, job type, working condition, culture and job level. After analyzing thesituation, we have suggested Bank One to structure new compensation policy for theemployees four different region because in different country stage of recession andexpectation of the employees are different. So we cannot give same level ofcompensation and performance appraisal to all which is centrally decided fromChicago.

Setting up a compensation committee:

To have a proper compensation plan they need a compensation committee who ellwork for a significant time and design and formulate the entire plan for someconsecutive years. For that they need to follow some structure:

Hiring consultant:

Bank One will have to hire a consultant who can give the best suggestions to employees. At

first they have to create an outline with the help of the consultant about newcompensation level and performance appraisal for every employee including MCP,commercial representatives, employees, managers.

Internal recruiting

It has to form a compensation committee consisting of officers from every region.

The consultant is from outside ago he does not know all the internal issues andpolicies. So there has to be members in the committee from the organization who isworking for a long time and know about the culture and internal issues. It will helpthe committee to set the standard in a fair way.

Doing marketing research:

After that they have to do market research for judging the recession position andprepare a compensation policy which can reflect both the employees and employermost. They also need to focus on individual performance level which will improve the


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efficiency of work performed by the worker and otherwise they are not willing towork hard and precisely.

Setting up the compensation package:

Then they have to come up with such compensation system that encouragesemployees to work hard and efficiently and take the organization toward the

profitable industries. After that they need to decide the salary level and benefitprograms for the employees whether it will offer at, above than industry average.

Discussion and communication with the employees priorimplementing the decision

The first step to the implementation of such a sensitive and important decisionrequires the acceptance and knowledge of the employees concerned. What themanagement needs to do is to communicate their problems and justify the causereason for such an action. If the employees can be convinced that in the long run thesesteps are going to be beneficial to them then they will co-operate with the authoritymore readily.

Establish pay grade system


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Structure the compensation philosophy

Now HR department of Bank One has to develop a new compensation policy as forall four countries to cover the recession period of the economy which will motivatethe existing employees to stay with the company more than now and attract the newcomers. Bank One needs to increase the basic salary to comply with the recessionfactor of Argentina, Brazil, Uruguay and Paraguay. This will help employees to feelthat they are valued for the company and company needs their services along with

high efficiency.

o Merit base pay: The more people in the higher quartiles, the larger the

budget must be for merit increases. Therefore, the compensation managermust monitor the attempts of line mangers to push their employees to thetop of job ranges as a way to offer them more rewards. The compensationmanger ends up playing the role of police officer, especially in a highlycentralized operation.


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o Continuous review of the plan is necessary forproper and time updates

The HR department must be always on the toes to ensure that the plan is executedwith peace and harmony throughout the organization and it does not becomea source of resentment towards the company. Also what is necessary is toassess that if the company is truly benefiting from all these. There are certaincost associated with pay cuts and freeze related to employee dissatisfactionand demotivation. If the company is main more benefits over cost issomething the organization must review form time to time.


Structuring new compensation policy and performance appraisal program in a multi-national company is quite difficult to implement. To implement it Bank One mustchoose the right person who can make this impossible in possible. They should hire aconsultant who is knowledgeable about the demographic and economic situation ofthe four countries Bank One is operating. Senior managers with consult of board ofdirectors are needed to implement a new compensation program and performanceappraisal.


Bank One must implement the compensation plan within a specific time. They musttarget a date within which they will come up with their new specific and propercompensation policy with performance appraisal system.. We suggest developing HRdepartment at first as they dont have yet and within 3 months they need to come upwith compensation plan before it is too late.

Where to implement Recommended Solution 2

As Bank One is already in several countries, need to consider the compensation planfor these four countries at a time. If they use one after another process ofimplementation of this program other countries employees will be demotivated anddissatisfied with the discrepancy policy. So, we suggest them to implement thesolutions in the regions at the same time make sure unity is there. Last of all, wesuggest them to focus compensation policy on customization basis.


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Problem 3

The management of Bank One did not exert strong

central control over the merged banks.

Recommendation 3

The HR Department should mostly align their strategy with that of Bank One

but should also provide scope for some alteration in the strategies.


Bank One needs to set up a core policy and also amend some of the strategies for theacquired bank to take advantage of better opportunities. Moreover, having a corestrategy can lower organizational and transaction costs, concentration of HRmanagement skills, rapid dissemination of knowledge (org needs, roles descriptions,candidates), help the bank to be well connected with other branches and acquired

banks, attuned to organizations long term skills/capabilities needs and consistent

processes and practices This would act as a mechanism to improve the employeesperformance. Moreover, this would allow efficiency and synergy to creep in.

Policy formulation:

Firstly Bank One needs to formulatea total compensation package. TheHR department should prepare it

keeping in mind the needs anddifferences and present it to thedepartment heads.


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.


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Policy execution:

After formulating the policies they need to execute it properly and can follow thefollowing steps.to ensure a proper execution Bank One should follow these steps.

DESIGN STAGE

Many pay plans are designed by top management and installed in a fairly authoritativefashion. Apparently, however, employees can do the same things and even moreeffectively. That is, employees can be responsible for designing the pay plan, assuggested in the previous chapter. Furthermore, they understand and accept the planmore readily if they are involved. Participation in plan design also helps to reduce the

potential resistance to change that accompanies almost any change in an organization.Consequently, employees are more motivated to increase performance.

ADMINISTRATION STAGE

Employees can responsibly determine when and if other workers should receive payincreases. This also appears to be true for individuals determining their own payincreases. Nevertheless, employee participation may not work in all cases, nor is itnecessarily appropriate under all circumstances. Employee participation in paydecisions may be appropriate in organizations with entrepreneurial or growthstrategies, but may not be appropriate in organizations with turnaround or liquidationstrategies.

Communicating the Benefit Package

Although most organizations provide some form of benefits to their employees theaverage employee often has little idea of what he or she is receiving. Bank Onemust ensure that the package has been communicated properly across theorganization and across the regions to avoid future problems.

Employee Preferences among Benefits

If Bank One expects to get the maximum return from its benefit package in termsof such factors as motivation, satisfaction, low turnover, and good relations with

unions, the benefits should be those most preferred by its employees. Historically,they have offered uniform benefit packages selected by the human resource


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department and top management. But they need to keep in mind the preference ofemployees.

Flexible-benefit plans

Because of the differences in employee preferences Bank One should ensure it. Undera flexible-benefit plan, individual employees have some choice as to specific benefitseach will actually receive; usually employees select from among several options howthey want their direct compensation and benefits to be distributed. The idea is to allowemployees to select benefits most appropriate to their individual needs andlifestyles.so Bank One should adopt this plan.

o Evaluation and feedback

o TRAINING AND DEVELOPMENT

Managers must be trained to accurately assess the effects of contingent(performance-based) rewards on performance and to provide employeesfeedback-pay, praise, and other rewards-as quickly as possible after the desired

behavior occurs .In addition to management training, several organizationdevelopment programs can be used in conjunction with performance-based pay toimprove productivity and the quality of work life.

o USING PAY SURVEYS

ParticipantsBroad-based

TimelinessJob-matches

Methodology

Survey DataRelevance

and Validity


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o Proper performance appraisal

Proper performance appraisal system is requires by Bank One. If the employees feel

that through a proper appraisal system their work and skills are being noticed and themanager is giving proper feedback, they will be more motivated and dedicated. So theemployees will know that they have to perform better to stay in the organization.


Structuring new compensation policy and performance appraisal program in a multi-national company is quite difficult to implement. To implement it Bank One mustchoose the right person who can make this impossible in possible. They should hire a

consultant who is knowledgeable about the demographic and economic situation ofthe four countries Bank One is operating. Senior managers with consult of board ofdirectors are needed to implement a new compensation program and performanceappraisal.


Bank One must implement the compensation plan within a specific time. They must

target a date within which they will come up with their new specific and propercompensation policy with performance appraisal system.. We suggest developing HRdepartment at first as they dont have yet and within 3 months they need to come upwith compensation plan before it is too late.

Where to implement Recommended Solution 3

As Bank One is already in several countries, need to consider the compensation planfor these four countries at a time. If they use one after another process of

implementation of this program other countries employees will be demotivated anddissatisfied with the discrepancy policy. So, we suggest them to implement thesolutions in the regions at the same time make sure unity is there. Last of all, wesuggest them to focus compensation policy on customization basis.


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Problem4

Bank One being affected because of its Bureaucratic nature.

Recommendation4:

Bank one should encourage employee participation and also empower the

managers.

How to implement Recommended Solution4

To encourage employee participation and also empower the managers Bank Oneshould stop being a Bureaucratic institution asit has become must for them to serve theircustomers. For that they need to bring twochanges.

First of all the departments heads of all fourregions must sit together in the Brazilheadquarter and then propose the plan ofdecentralizing the organization. They need tomake sureDelegation & Empowerment.Delegation is a traditional management modelconcept, whereas empowerment belongs to thenew management model, and both are integral parts of a decentralized organization.

Delegation only thrusts authority on individuals, and overlooks aspects such asmotivation and will to achieve the task. Empowerment on the other hand replacesauthority with ownership, and considers unique capabilities of the individual, such asinitiative and efficacy, rather than just roles and responsibilities.

1st stage

How much decision making authority will be in the hands of headquarter:

It is very important to make sure what atructural changes to be made to make the

company from centralization to decentralization. To make the decentralization thecompany has to deligate its decision making authority. There is both positive and


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negative side of this. The positive side is that the subsidiaries will feel theresponsibility. They will be able to make the decisions according to their economic

and cultural needs. But it may also result in chaos and misuse and mismanagement ofpower and the whole organization may suffer. So it is very important to structure thewhole organization in a way that can adjust with the change.

How much decision making authority will be in the hands of the subsidies

It is very important to make sure what structural changes to be made to make thecompany from centralization to decentralization. To make the decentralization thecompany has to delegate its decision making authority. There is both positive and

negative side of this. The positive side is that the subsidiaries will feel theresponsibility. They will be able to make the decisions according to their economicand cultural needs. But it may also result in chaos and misuse and mismanagement of

power and the whole organization may suffer. So it is very important to structure thewhole organization in a way that can adjust with the change. The subsidies stillfollow the headquarters decision. After the delegation also the headquarter will makethe major decisions and the subsidies must follow that. The HR department shouldalso ensure that any goals or deals of the subsidies do not violate company law andthe goal of the company.

Which administrative and operational authority will be decentralized?

Then the step comes when the company needs to decide what to decentralize andwhat not. It is very important to have a formal and clear structure of all the

procedures of how the decentralization has occurred to avoid future complications.The headquarter must realize that they need to have some authority over thesubsidies. So some decision making authority must be solely on headquarters hand.

Not all administrative and operational authority will be decentralized. The strategicand long term policies should be in the hand of the headquarter. Recruitment andselection, training, distributor selection, customer orientation etc can be decided by

the subsidies. This difference will help both tha headquarters and subsidies to have aclear idea of their responsibilities and power which will in turn rescue misuse of

power.

How much empowerment and delegation will be given

Then the step comes when the company needs to decide. How much empowermentand delegation will be given. Recruitment and selection, training, distributor

selection, customer orientation etc can be decided by the subsidies. This differencewill help both the headquarters and subsidies to have a clear idea of their


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responsibilities and power which will in turn rescue misuse of power. To make thedecentralization the company has to delegate its decision making authority. There is

both positive and negative side of this. The positive side is that the subsidiaries willfeel the responsibility. They will be able to make the decisions according to theireconomic and cultural needs. But it may also result in chaos and misuse andmismanagement of power and the whole organization may suffer. So it is veryimportant to structure the whole organization in a way that can adjust with thechange. The subsidies still follow the headquarters decision. After the delegation alsothe headquarter will make the major decisions and the subsidies must follow that.The HR department should also ensure that any goals or deals of the subsidies do notviolate company law and the goal of the company.

After the decentralization what organizational changes will occur?

Moreover, for this structure it takes too long for them to make, approve andimplement a decision which results the deficiency in their operational activities. Thisis not the proper way of operating a multinational subsidiary, because in differentregions there might be needed some emergency measures to take. If they have to waitfor the decisions made by the headquarters, they may lose the new opportunities fornot taking needed measures in proper time. So they must need to restructure it byleaving some freedom to the regional countries, but having the strict control over theirdecisions made. In this way they will be able to increase their operational efficiency.

Training is very important in this regard. The employees need to be trained and giventime to change with the change.

How to deal with distributors and external issues after the decentralization

They also need to consider four different countries in this region and their economicrecession and regional crisis as well. Though the countrys economic situation arealmost same but all the countries are not in same position. Some country faces rougheconomic recession and some are facing moderate. This recession in economy willimpact in companys sales volume and operating profit. The distributors are veryvaluable part of the company and if the company fails to keep them in the favor of thecompany the company is to face problems in times of economic crisis and recession.As a result, it is very important for the company to give distributors bonuses andincentives to motivate them.

What legal issues should be considered?

To change an organizations structure and to empower employees will bring a hugechange in the overall format of the organization. As a result the company will facesome legal issue about authorities which has to be maintained.


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2nd stage

Training & Development process

The Bank One also doesnt have any specific Training and Development Plan for itsemployees. From the given case we have found that the company is providingtechnical assistance in the form of product application procedures where some teamsare sent to the customer locations for training the product application. So they must do

proper planning to train them effectively, because Training and Development iscrucial for a company to make their employees to be productive, efficient and

potential. If the employees are not productive and efficient enough then its reallydifficult to meet the corporate needs, objectives and goals. They must provide trainingfacilities to its new as well as its existing employees according to their personalrequirements and also according to the culture and customs of the local areas, forwhich there should be some proper planning before train them.

Evaluation and feedback:

The HR department must be always on the toes to ensure that the plan is executedwith peace and harmony throughout the organization and it does not becomea source of resentment towards the company. Also what is necessary is toassess that if the company is truly benefiting from all these. There are certaincost associated with pay cuts and freeze related to employee dissatisfactionand demotivation. If the company is main more benefits over cost issomething the organization must review form time to time.

Where to implement Recommended Solution4

After all the administrative, strategic and legal procedures are over then they willimplement the plan. However the company is growing and in operating in manycountries it is necessary to move in a strategic way. It may backfire if all the regionsmake the change together. So for safety, the change will be made in headquarter ofChicago. For the subsidiaries the empowerment will happen gradually. Not all atonce. Moreover, the economic and cultural differences must be considered whendecentralizing will occur.

Who to implement Recommended Solution4


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Structuring decentralize program in a multinational company is quite difficult toimplement. To implement it Bank One must choose the right person who can make

this impossible in possible. HR people are the right person who can easily structurethe compensation program without facing lots of problems. They should hire aconsultant who is knowledgeable about the demographic and economic situation ofthe four countries Bank One is operating. Senior managers with consult of board ofdirectors are needed to implement a new compensation program and performanceappraisal which will help to satisfy employees in different regions also.

When to implement Recommended Solution4

Bank One must implement the compensation plan within a specific time. They musttarget a date within which they will come up with their new specific and properdecentralization policy. The decentralization in their region will reflect the currentfinancial situation of the employees as well as economic situation. The strategy of thewhole organization is likely to be affected. It is a long procedure. So they should startas early as possible.


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CASE:4Problem5

The long working hours can create exhaustion and lose in

productivity.

Recommendation5

The length of work time in service Centre should be decreased.

How to implement Recommended Solution4

If the work time is decreased, then the employees will be able to give their centpercent in their work. They will not get bored and also will be able to concentrate intheir work. Thus, the productivity will not get affected and there will be no wastage ofresources. Frist of all it is needed to understand why the employees are working longhour. After the problem is addressed then they can go for proper solution.

ADDRESSTHEREASONOFTHEPROBLEM:

First of all Bank One needs to find out why the employees have such a long hour andwhy they cannot complete their task in less time and if there is any other way of doingthe work that can release their pressure and help them. Even if they are working longhour what are the other reasons that are making them tensed or not.

SEARCHFORALTERNATIVES:

After addressing the problem then they will look for whether there is any otheralternatives like rescheduling the work, and if there is any other way of doing the


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work that can release their pressure and help them. How can they keep theiremployees less monotonous and charged even after long working hour.

PERFORMANCE BASE PAY:

To implement the recommendation we need to establish a performance basedcompensation system to decrease the response time the company should establish

performance based incentive system. This system gives people immediate andmeaningful feedback. The term pay for performance refers to a wide range ofcompensation options including merit pay, cash bonuses, incentive pay, and variousgain sharing plans. Performance based pay have lots of benefits-performance,motivation, quality and competitiveness.

STANDARD HOUR PAY:

Bank One can have the standard hour plan. It is essentially a piecework plan, exceptthat standards are denominated in terms of time per unit of output rather than money

per unit. Tasks are broken down by the amount of time it takes to complete them. Thiscan be determined by historical records, time-and-motion studies, or a combination of

both. The time to perform each task then becomes a "standard time." By this theamount of work will be measured not the time

MEASURED DAY WORK

This individual-level incentive plan removes some of the stringency of therelationship between rates and standards. Again, formal production standards areestablished, and employee performance is judged against these standards. But withmeasured day work, the typical standards are less precise.

INCENTIVE PAY

Bank One can attempt to strengthen the performance-reward relationship and thusmotivate the affected employee. The idea is to have employees think of themselves as

business partners by sharing the financial risks and rewards of doing business.Another advantage to incentive pay is that it is not permanent and must be earnedeach year.


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Plans based on time saved

Standard hour plans are similar to piece rate plans except that a standard time is set interms of the time it should take to complete a particular job. Incentive plan based ontime saved give an employee a bonus for reaching a given level of production oroutput in less than the standard time.

JOBROTATION

The employees are monotonous and tires of their long working hour. So their

productivity is going down rapidly. So Bank One can encourage the employeesthrough job rotation by which they can have a break and refresh themselves

PAIDVACATION

Bank One can send its employees on paid holidays and trips on company expense torefresh the mind of the employees and motivate them. The paid vacation will givethem a break from their everyday work and they can be encouraged to work harder.

The HR department will then present the plan in front of directors and departmentheads and upon the approval they will implement the plan. The plan should beimplemented after discussing with all supervisor and managers to ensure that thechanges will be able to reduce the time and help the employees to concentrate more.

After these pay plans are designed then the HR department will implement it. For

these kind of changes a proper training and development is needed to understand and

CommonOvertime

Issues

CompensatoryTime Off

Incentivesfor Non-exempts

Training

Time

Travel

Time


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measure the changes and also a proper evaluation is necessary to find out if the plansare fulfilling the needs and changing the situation or not.

Where to implement Recommended Solution4

After all the administrative, strategic and legal procedures are over then they willimplement the plan. However the company is growing and in operating in manycountries it is necessary to move in a strategic way. It has to be implemented all

together in all the regions. Otherwise it will be very difficult to control and manageand maintain unity. Moreover, employees will raise questions if it is not implementedwhole organization wide.

Who to implement Recommended Solution4

Senior managers with consult of board of directors are needed to implement a newcompensation program and performance appraisal which will help to satisfy

employees in different regions also. To implement it Bank One must choose the rightperson who can make this impossible in possible. HR people are the right person whocan easily structure the compensation program without facing lots of problems. Theyshould hire a consultant who is knowledgeable about the demographic and economicsituation of the four countries Bank One is operating.

When to implement Recommended Solution4

Bank One must implement the compensation plan within a specific time. They musttarget a date within which they will come up with their new specific and propercompensation plan that can motivate the employees to work hard. Employees are themost important asset of the organization and if they are dissatisfied the productivitywill fall drastically. So Bank One should implement the plan as soon as possible.

Bank One (North South University)

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