Human Resource ManagementGroup Project

Group # 3 Lt. Col. Ghulam Abbas Sabeen Fahim Zaryan Sarfraz Toor Zoheb Sattar

Date of Submission: 18th July 2005Submitted to: Mr. Naukhez Sarwar

Local Company Selected: UBLForeign Company: HSBC

Areas in HR to be analyzed: Training & Development Planning Compensation

UBL INTRODUCTION:................................................................................................................................4BASIC PRINCIPLES AND VALUES:...................................................................................................................7ORGANIZATIONAL STRUCTURE:.....................................................................................................................8CULTURE AT UBL:..........................................................................................................................................9UBL STRATEGY:..............................................................................................................................................9

UBL HRM- An Overview....................................................................................................................10

JOB ANALYSIS:..............................................................................................................................................11RECRUITMENT & SELECTION:.....................................................................................................................11RECRUITMENT AT UBL:...............................................................................................................................11

Recruitment Methods:...........................................................................................................................12SELECTION:....................................................................................................................................................13PERFORMANCE MANAGEMENT:...................................................................................................................13PLANNING.......................................................................................................................................................14

Forecasting:..........................................................................................................................................16Targeting:.............................................................................................................................................16Periodic Revisions:...............................................................................................................................16Planning Stages:...................................................................................................................................16Target setting for employees:................................................................................................................17Realizing the potential:.........................................................................................................................17Regional/area / branch/ territorial Planning:......................................................................................18Mapping out the hunting grounds:.......................................................................................................19

TRAINING & DEVELOPMENT........................................................................................................................20UBL as a learning organization:..........................................................................................................20The Training Needs Assessment Process:.............................................................................................20Staff College---Main training hub of UBL:..........................................................................................20‘You First’ Service & Quality:..............................................................................................................21SERVICE & QUALITY WORKSHOPS.................................................................................................21‘You First’ Service Managers:..............................................................................................................21Process Improvement (PI) teams:.........................................................................................................22Product Training Sessions:...................................................................................................................23Motivational Training Programs:.........................................................................................................23Mortgage Training................................................................................................................................24Training Workshops..............................................................................................................................24Extensive Training for the Senior Employees:......................................................................................26Training Methods:................................................................................................................................26Evaluation of Training Programs:........................................................................................................26Return on investment:...........................................................................................................................27

COMPENSATION.............................................................................................................................................27Profit Sharing:......................................................................................................................................32Ownership:............................................................................................................................................32Gain sharing:........................................................................................................................................32Agency cost:..........................................................................................................................................32

HSBC....................................................................................................................................................33

BUSINESS PRINCIPLES AND VALUES:............................................................................................................33GROUP STRUCTURE:......................................................................................................................................34CUSTOMER GROUPS:.....................................................................................................................................35HSBC STRATEGY...........................................................................................................................................36

HSBC HRM--An Overview:.................................................................................................................38

PRIMARY RESPONSIBILITIES OF HSBC HR DEPARTMENT:.......................................................................38

RECRUITMENT:..............................................................................................................................................38Electronic Recruitment:........................................................................................................................38Advertisement in Newspapers and Business Magazines:.....................................................................38Universities and Job Fairs:..................................................................................................................38Employment Agencies:..........................................................................................................................39

SELECTION:....................................................................................................................................................39PERFORMANCE MANAGEMENT:...................................................................................................................41PLANNING.......................................................................................................................................................41

Role of HSBC’s Strategic Development Unit in Planning:..................................................................41Role of HSBC International in Planning:.............................................................................................41HSBC Forecasting Labor Demand and Supply:...................................................................................42Goal Setting and Strategic Planning:...................................................................................................42Business Process Outsourcing:.............................................................................................................43Contractual and Part Time Employees:...............................................................................................43Downsizing:..........................................................................................................................................43Affirmative Action Planning:................................................................................................................43

TRAINING AT HSBC:.....................................................................................................................................44HSBC’s Training Management Model:................................................................................................44Different Training Programs offered at HSBC:...................................................................................45Different Methods of Training at HSBC:..............................................................................................46

LEARNING CENTERS AND LEARNING MATERIALS:...............................................................46

Graduate Trainee Programme of HSBC:..............................................................................................47

TOWARDS LEARNING AND DEVELOPMENT:.....................................................................................48Training Needs Assessment Process:....................................................................................................49Development Activities:........................................................................................................................49

Career Development:..........................................................................................................................50

Choices Program:.................................................................................................................................50COMPENSATION.............................................................................................................................................52

Employee Benefits and Rewards:..........................................................................................................53Health Care:.........................................................................................................................................53Work / Life Balance:.............................................................................................................................54Financial Security:................................................................................................................................55HSBC - Retirement and Savings Program:..........................................................................................55Incentives and Rewards:.......................................................................................................................56HSBC Great Ideas Program:................................................................................................................57

Analysis…………………………………………………………………………………..58Recommendation……………………………...……………………………………………………………62Conclusion………………………………………………………………………………………………………………65

UBL, Where you come first.

United Bank Limited is one of the largest commercial banks in the country. With almost forty-six years of good standing to its valued clients, it has stood the test of time, producing assets of over Rs. 300 billion.

UBL has assets of over Rs. 300 billion and a solid track record of forty-six years - in addition to the convenience of over 1000 branches serving throughout the country and also at several overseas locations.

Date EstablishedNovember 7, 1959

ChairmanHis Highness Shaikh Nahayan Mabarak Al Nahayan

Deputy ChairmanSir Mohammed Anwar Pervez OBE

President & CEOMr. Atif R. Bokhari

Branches 1056 Domestic, 15 Overseas Branches

Representative OfficesTehran and Cairo

SubsidiaryUnited Bank AG Zurich, Switzerland United National Bank Limited, UK (Joint venture with NBP)

Associated CompanyOman United Exchange Company, Muscat

Offshore Banking UnitExport Processing Zone, EPZ Branch, Karachi, Pakistan

Employees 8,998

VISION: To be a World Class Bank Where You Come First

INTRODUCTION:

The decision to establish UBL was taken in June 1959 and the company was registered on July 24, 1959. It was on November 7th 1959 that United bank limited appeared on the

banking horizons in Pakistan and started operations with its first branch namely McLeod Road now I.I Chundrigar Road at Karachi. On the 9th November 1959 the Gazette of Pakistan notified and included United Bank Limited in its list of scheduled banks operating in Pakistan.

With in the shortest span of time UBL emerged as a dynamic and a large international organization. In 1969 the management of Union Bank Limited incorporated in former East Pakistan, was handed over to UBL which later merged with UBL in early seventies.

The bank continued its operations as a private banking company until 31st December 1973 when it was nationalized along with other banks operating in the country and two banks namely Pak bank of former East Pakistan and Commerce Bank Limited were merged with UBL.

A bank, like society it serves should be dynamic as banking is about people, customers with their needs and opportunities and staff with skills, experience and resources. United Bank Limited has shown dynamism since its inception. There have been many changes in structure, functions and the services provided. These changes reflect the changing requirements of our developing economy as a whole and those Industry, Commerce and private individuals.

In view of the highly impressive growth and development achieved during its 45 years of experience, UBL has come to be accepted as one of the most progressive and dynamic component of the banking industry of Pakistan.

Record Performance:

The financial results of the early years of the bank’s operations showed that the new bank got to a flying start and was set to beat past records of growth in Pakistan’s banking history. In spite of the intense competition from the other major players with their established business relationships and a substantial market share, UBL made its presence felt in the market and during mid seventies stood to become the second largest bank of the country.

Although the bank used the conventional banking apparatus of the day, its approach was market oriented and appealed to the customers. UBL’s dynamic, radical and very personalized style of banking differed significantly from the set conventional business pattern of the period. In fact every feature and aspect of UBL’s behavior reflected and highlighted the differences. Most significantly the style of the address to the customer differed.

Personalized service and dynamic approach:

In order to meet its goals and capture the market share the bank employed skillful and professional approach to management, which took a series of successive measures to educate the people of Pakistan banking and savings. Various drives for mobilization of

savings and other accounts were initiated. The knowledge of the customers business market research and business planning, visits to customers at their door steps, development of personalized relationships with the business community, fixation of seasonal business targets and follow up to achieve these goals attained prominence. Flexibility, delegation of authority to the lowest possible level and encouragement by initiative were the key factors which helped the bank, to achieve the objectives.

Catalyst of Change:

UBL’s emergence proved a catalyst and brought changes in the banking sector as a whole. The bank – Customer relations attained a new dimension and courtesy, politeness and efficiency gained fundamental importance. Convenience of the customers remained the core and criterion of this relationship. UBL initiated the scene in the Office and the branches redesigned and modernized.

After achieving dynamic progress domestically, the Bank took a basic decision to make its presence felt internationally and to cater to the needs of Importers and Exporters as well as its share in the International market, foreign trade, UBL opened its first branch in 1963 in London UK, the most important center of the international finance and trade.

The UK operations of United Bank limited were closed during the year 2002 and along with branches of National Bank of Pakistan a new Bank namely Pakistan International Bank has been incorporated in UK with 55% share holding of UBL.

In Oman the share holding in Commercial Bank of Oman was withdrawn however an Exchange Company namely Oman United Exchange Company a joint venture was formed in 1983. The Bank also has withdrawn its share holding the United Saudi Commercial Bank, Saudi Arabia as well as United Bank of Lebanon and Pakistan SAL.

The UBL global network with its strategically located overseas branches and affiliates, covering almost all major financial markets of the world, is well positioned to act as a correspondent Bank for Pakistani and foreign banks for processing and settlement of various currency transactions. With its strategy to reach customers in various diversified markets across the globe, UBL is progressing fast in the arena of cross border ventures with an appetite for commercial and country risks. To meet the required International standards of modern banking United Bank Limited is the first Pakistani Bank to shift its International Division from Karachi to Dubai.At present the UBL and its subsidiaries are:-

United Bank Limited -Holding Company.Pakistan International Bank -Joint venture Oman United Exchange Co -Joint ventureUnited Bank AG-Zurich -SubsidiaryUnited Asset Management Co Ltd -doUnited Executors & Trustees Co Ltd -do

United Bank Financial Services (pvt) Ltd -do

Ready for 21st Century:

The privatization process of UBL started in late 1995. The World Bank and the IMF had directed the Government of Pakistan to privatize the financial institutions in order to generate financial resources and reduce the government’s dependence on foreign loans. It was decided that United Bank be privatized first, followed by Habib Bank. UBL wasoffered only to the foreign buyers, on an ‘as is where is’ basis and Saudi Basharahil Group finally became the sole bidder after Faysal Bank’s withdrawal from the bidding process. It was decided that the bank be handed over to the Saudi Group by the end of March 1996. However, due to speculation about the Group’s authenticity to manage amega banking institution like UBL and the inherent problems such as the liquidity crunch, excessive expenditures, unruly labour union, and irrational loan policy, faced by the bank, the privatization of UBL was cancelled. In April 1996, the State Bank of Pakistan took over the management control of UBL, Mr. M. R. Khan was appointed the Chairman of the Bank. The privatization was conducted in 2002 under the leadership of Mr. Amer Z. Khan, the then President of UBL.

United Bank Limited has stepped in to the 21st century with confidence. Now that the Bank has been privatized and 51% shares have been purchased by the investors i:e. , The Best Ways group UK and Abu Dhabi consortium electing HH.Shiekh Nahyan-al-Mubarik as Chairman UBL and Sir Anwer Parvez as Vice Chairman, who retained Mr.Amer Z. Khan as President and the CEO of United Bank Limited in order to continue the policies of dynamism and therefore, UBL geared itself to provide the services which the customers in the modern day banking expect from a bank.. At present, Mr. Atif Bukhari is the President of UBL.

The Bank has plans to play its dynamic role in the overall development of the country. It is now well equipped with the latest technologies and professional experience to face the future with determination and confidence and with its high aims and sense of direction to serve the nation with zeal and devotion.

Basic Principles and Values:

United Bank Limited is an old organization. Many leadership changes over the years mean that it has been driven by many different kinds of VISION.But certain values were notable throughout most of the changes.

Growth Orientation Aggressive customer outreach Appreciation of professionalism Staff loyalty, sense of ownership More “modern” than other national banks Participation in technological changes

These have been characteristic United Bank values.

United Bank is today again in the forefront of Change:

By separating marketing from operations By adopting contemporary marketing and branding methodologies By creating a separate sales force of selling professional By adopting incentivised reward systems.

The new vision for UBL needs its appropriate strategies.

Organizational Structure:The overall organizational structure is a Market Structure, however, between divisions, a matrix structure is visible.

Corporate Banking Group:

UBL’s Corporate Banking Group offers a full range of products ans services including; Corporate finance, Finance/ credit extension and Investment/ cash management.

Treasury & Capital Markets:

The UBL Treasury & Capital Markets (TCM) is one of the top ranked market makers in foreign exchange, money markets, bond and derivatives.In 2004, Treasury& Capital Markets was one of the top 2 Primary Dealers (volume wise) in Secondary market T-Bill trading and PIB trading, in 2004TCM ranks as one of the top inter bank market makers within estimated market share of 18%UBL Treasury & Capital Market is accredited with the first-ever derivative transaction in Pakistan in 2003In 2004, it was the market leader with 20 Derivative transactions

Investment Banking Group:

IBG specializes in providing innovative and unique advice to its clients to assist them in meeting challenges in an ever-changing market.

Consumer Banking:

UBL has recently emerged as a top player in the Consumer Banking business with successful launch of the following products.

UBL- Click N remit UBL-Cashline

UBL Drive Home Financing UBL-VISA Card UBL Credit Card

UBL Address

PLS Term Deposits

PLS Savings Accounts

Uni-Saver

Remittances

Commercial Banking:

UBL offers commercial banking services that help to manage and grow small and medium-sized business, provide agricultural loans and, facilitate online banking. UBL’s Commercial Banking has introduced an ATM/Debit card called UBL-Wallet to withdraw cash at any time and make cashless purchases.

The bank is divided into three major zones; North Central South

There are 14 regions operating at present.

Culture at UBL:In the area of organizational development, the cultural norms and values are worked on to be established and a detailed cultural initiative implementation plan is being worked out since the privatization and taking over of the Bank by the new management team. The emphasis of the management is thought to be on employer branding, both internally as well as externally to enhance the image of the Bank and become the employer of choice.

UBL Strategy:To be a world-class bank-Where you come first

The diversified customer base and the healthy bottom line indicate the UBL is all set to make headway in the banking world.The vision of the Bank remains focused on its commitment to higher standards. The Bank is emerging as a fully integrated and multi-product institution becoming a financial partner to its customers.During the years 2004-2005, a comprehensive and far reaching review was undertaken to develop a strategic plan and vision for the bank. This has laid the foundation for a strong financial institution with best practices that would contribute positively towards the country’s economic growth, while enhancing shareholders values.Thus the strategic plan is aimed at the three basic thrusts:

People---UBL’s pride Premises---UBL’s focus Technology---UBL’s strength

Consumer & Commercial Bank is focused on UBL’s vision of becoming a world class bank. in 2004, it continued to work on the four principles of its strategy:

Hiring and developing a world-class team Launching customer focused products Continuous improvement of processes Investing in new premises

The end result has been satisfying so far, evident by the milestones achieved in 2004 by UBL.

UBL HRM- An Overview

HR continues to remain a strategic business partner to all business lines in UBL. HR ensures that UBL, as an organization, is aligned to the market in relation to all its HR practices in order to ensure that it maintains its competitive edge in the market.

In 2004, one of the major driving areas in HR was Recruitment of key talent. The Bank was successful in hiring 1881 staff out of which 837 were in the permanent Cadre across all functions while 1044 were hired as contractual in the Consumer Bank. One of the major hiring was of Management Associates who were brought from the top universities across the country and were hired as ‘Change Agents’ to bring about a bank wide significant cultural change.

Another main focus during the recent years has been on reducing the communication gap between the senior management and the employees. Close interaction has now been established among all regions through regular visits by senior management, as well as through expeditious responses to issues raised by employees at RHQ/HUB/Branch Levels.

The main objective for the years ahead is to ensure that UBL works closely with all business lines so as to substantiate the fact that HR continues to act as a strategic partner to all businesses. In light of this, establishment of HR presence in all major cities is being planned to ensure HR support at regional level.

Job Analysis:

A Job-Description manual is being designed by the HRM Department at the Bank which would be known as a “Job Design Booklet”. It would include pre designed job and skill requirements for a particular position in the bank thus making objectives clearer to the employees. Such a manual would include;

Functional titles for each job Tasks and responsibilities Job description Requirements

Recruitment & Selection:

UBL terms its HR as assets rather than expenses overburdening its operations. Therefore, it makes sure that the recruitment process is focused on merit and suitability. Since, its emergence as a semi-privatized organization, it has put major emphasis on the fact that key positions in the management are occupied by top of the line people. Their objective remains to recruit and retain key talent at all levels. Identification of key and critical staff positions and formulation of policy for the development and retention of such assets also is on the agenda.

Recruitment at UBL:

Recruitment is done at various levels in UBL:

← Fresh Level:

UBL has a Management Associates Program. Through this program, UBL hires new employees who are normally fresh graduates. 30 to 40 employees are hired through this program every year. The qualification for employees for the management associates program is 4 years Bachelors or Masters from a recognized university. Usually, such newly recruits are taken as permanent hires by the management.

Lateral Level:

Lateral level hiring is for employees who have more than two years experience. Such hiring takes place with the consent of the top management.

Bulk Hiring:

Bulk Hiring is for contractual employees. These employees are hired on yearly contracts. They are normally hired for consumer banking and the collection department.

Recruitment Methods:

UBL uses following recruitment for recruiting employees:

Private Employment Agencies:

UBL has contracts with various employment agencies which provide them employees for hiring on contractual basis. Such employees are mostly hired for jobs related to the Collections and Sales Department or the Consumer Relations Division.

Job Fairs:

UBL participates in the job fairs organized by various universities of Pakistan. Through participating in these job fairs, they identify the potential employees for them through conducting interviews of interested students. UBL has signed up with the placement offices of many renowned universities of Pakistan like Lahore University of Management Sciences (LUMS), Quaid-e-Azam University and NUST Institute of Management Sciences.

Electronic Recruitment:

Electronic Recruitment at UBL is done through a Mid East based online recruitment agency named “Bayt”. This agency provides the management with potential employees searched after an electronic talent hunt.UBL is also planning to start online recruiting through its own website in August this year.

Advertisement in Newspapers and Business Magazines:

Advertising jobs through newspapers is an addition to the recruitment methods. This year the ad was published in the leading newspapers for the first time. It is a practice that is likely to continue in future too owing to its recognition and assistance over recruitment this year.

Employment Referrals:

One source for hiring of new employees for UBL is through employment referrals.

Direct Referrals:

People drop off their CV’s at UBL and management contacts them as and when needed.

Employment Agencies:

UBL also uses the services of several recruitment agencies. One of the recruitment agency most used by UBL is Human Resource Services. UBL requires all recruitment agencies to hire according to their own recruitment policies.

Selection:

The steps involved in the selection of employees at UBL are listed below:

Written tests Group Discussions Panel Interviews Medical Examination Final Decision

Written tests:

The first step in the selection of employees at UBL is a written test , conducted by the “Institute of Bankers”. The test is a standard GMAT based test. Candidates who are applying for positions in finance are also tested on several basic financial concepts.

Group Discussions:

If an applicant passes the written test stage, the he is called for a group discussion in which few existing employees from the same department test the candidate on various skills.

Performance Management:

Performance Management is a key component of the HR practices in any organization. Basically, it takes car of three important areas;

Defining performance, measuring Performance, Evaluating Performance

At UBL, performance is mainly managed on the basis of performance appraisals which are a regular practice by the managers. Such appraisals are put forward annually.

HR and Career Decisions, transfers and postings are all taken on the basis of appraisal forms.

The performance of the branch staff is usually evaluated by the Branch Manager, Area Managers are evaluated by regional chief Executive, and Regional Operations Head is evaluated by Regional chief Executive. The RCE’s performance is evaluated by Group Head Commercial Banking.

UBL has its own grading process the details of which have been presented as a sample in the annexure.

Basic Conditionalties:

Targets are cascaded to team members with different weight age, depending upon the place of posting.

RCE and AM not to get 1 or 2 rating, unless rating of minimum 3 is achieved in control parameter.

For AM with 10 or more branches, if 2 get BA Audit rating, then AM gets an overall rating of 4 or 5

For AM with less than 10 branches, if 1 gets BA Audit rating, then AM gets an overall rating of 4 or 5

For RCEs, if more than 4% branches get BA Audit rating, then RCE gets an overall rating of 4 or 5.

Planning

HR Planning is the process of anticipating and making provisions for the movement of people into, within and out of an organization. At UBL, the HR Planning Department is categorized into five main functions;

1. Policy and Planning2. Recruitment and Resourcing3. HR Relationship Division4. Personnel Division5. Employee Relations Division

1. Policy and Planning:

At the beginning of every year, a headcount budget is announced for HR induction at all regions. This budget is allocated to each region on the basis of appraisals sent forward by the regional heads. The program highlights provisions regarding hiring of new employees, transfers in case of excess and other similar issues. The regions are given the liberty to perform such practices of HR planning with the allotted budget. Another important facto kept into consideration before allotting budgets is the regional targets for that year for a particular region.Such planning is usually called Manpower Budgeting at UBL.

2. Recruitment and Resourcing:

This function performs all the functions related to employee recruitment and selection. Before such an activity is formally carried out, a requisition form is filled out followed by an interview with the potential employees.

3. HR Relationship Division:

This division is a relatively new division at UBL. It basically acts as a strategic partner to all other functions. Thus, it is sometimes referred to as the integrating factor. UBL is divided into three main zones; North, Central, South. HR Relations Division is present in all the three zones and it plays the role of a Liaison between regions and Head Office employees. The regions thus can have a closer contact with the HR practices at the top level through this newly added division.

4. Personnel Division:

This is the biggest division of HR at UBL. 60 employees are currently taking care of this division. This department mainly keeps track of issues as follows;Issuance of appointment lettersPayroll and fundsTransfersPlacement and personal record of all the employeesStaff financesDetails of service benefits at the end of service

5. Employee Relations Division:

All issues related to employee litigation, medical allowance, disciplinary problems, legal matters etc. come under this division. HR audit, to a limited extent, can also be thought of as a part of this division. Generally, all employees’ related issues are addressed through this division and possible decisions are taken to settle issues.

All the functions discussed above operate on the basis of feedback provided by the regions. The regional feedback is based upon the responses gathered from the areas, and consequently the branches.

It is worthwhile to mention here that the planning program of UBL has taken a dramatic turn after its privatization in 2002. As many as 5600 employees were terminated of their services as a part of the major downsizing conducted. The step was taken to eliminate non productive levels from its structure and replace the deadwood with young energetic minds.

Golden Handshake Scheme was the most popular scheme adopted then. The process was made partial and as a result of the scheme, the bank lost many of its star employees. According to the rules, the employees not having received a raise in the last year of the then service period, had to accept the Hand Shake. The employees were given compensation by the World Bank as part of its grants for the Govt. banks of Pakistan.

Following is an account of the plans at the area and regional levels and their implementation criteria;The objective point is to develop ACCEPTABLE working targets. There are different phases of HR planning at all levels;

Forecasting:The main purpose of forecasting is to identify Primary and Secondary customer segments demographically and estimate possible per capita business volume by those segments. After estimation comparison with actual accounts to date to derive the Market Share of United bank and then project what is felt to be achievable Market share and therefore projected business Volume.

Targeting: After proper forecasting has been done the area manager discusses the territory’s forecast with the concerned field operative, carefully explaining logic behind the forecast and negotiate the his/her own territory’s target, on a logical basis. After a little give & take they both agree to a target.

Periodic Revisions:At the end of each month, the branch manager examines the performance against forecasts, of each territory and then helps in the preparation of working forecasts for the next three months which is subject to area’s manager’s approval. All of this is carried out based on three advisory principles;

Focus onto CLEARLY DEFINED market segments (customers-category; demographic user-categories)

Avoid “last year’s” thinking, which will generally lead you to last year’s results. Aggressive realism: “Eyes on the stars but feet firmly on the ground”.

Planning Stages:

Assessing the potential:No planning is possible if the team members are unaware of their territory or if the Branch Manager does not know all of their territories or the area manager does not know all the territories of his CENTRE BRANCH and his SATELLITE BRANCHES. Or for the matter if the RCE does not a have a very good idea at all parts of his region.

In short one can say that the planning process begins with understanding each territory better everybody.

In order to understand it better UBL prepares a territorial plan once a year for each territory which is done by the territory holder. These plans are incorporated with AGREED views of the Territory holders and his supervisors. These plans are finalized after amendment by the branch manager and area manager. These plans are reconsidered quarterly.

The territorial plan works out to a plan of numbers of potential customers to be contacted based on

Estimate possible per capita business volume from above Project likely business (No. of customers X business per capita), giving the

TERRITORY FORECAST. The Sum of the Territory forecast constitutes the Area Plan. The Sum of the area plans lead to the Regional Plan

The Agreed Territory Forecasts are basically agreed Territory Targets

It’s the duty of the area manager to discuss each territory’s forecast with concerned field operative, carefully explaining logic behind the forecast & negotiate the territory’s target logically. After negotiations they agree upon a certain target.

Target setting for employees:Targets are set up monthly for each team member. It is by ensuring the follow-up of the achievement of these that sales success is ensured. The regional plan is nothing more than the summation of the area plans, broken out by areas. In all of these it is worth ensuring that the process involves and engages every relevant level. At each level, there is the benefit of addition or modification by the next higher and at each level, the numbers are logically “negotiated” and agreed by the front- line operative.

Periodic revisions ensure continual improvement.

On the basis of the territorial plans the area managers determine priorities and possibilities with sales force members i.e. which suspects can be approached? In which localities, and in which months. These constitutes the monthly prospecting plan, the “hard” plan, binding on sales force members.

Realizing the potential:Once the branches are improved, territories worked out, marketing plans developed and regional sales plan is ready, comes across the question How such teams are going to be managed.

It’s not enough to say the RCE will manage area managers who, in THEIR turn, will manage BRANCH managers and sales team members.So UBL ensures that work is being carried out at all levels and uses the following key sales force management tools.

o Regional/area / branch/ territorial Planning.o Monitoring field worko Sales force meetingso Reviewing performance

Regional/area / branch/ territorial Planning:

The point is to have agreed the potential with all the area managers and to have ensured that they have also agreed to it with the respective branches. The Basic building blocks are the territorial plans.

1. Monitoring field work:While it is necessary to give salespeople considerable freedom, the area manager cannot ABDICATE his field responsibility. He must ensure that his team delivers both the committed QUANTITY and the desired QUALITY.

The Area manager accomplishes this, by systematic prospect follow-up, systematic sales force follow-up and continuous sales force guidance and through personal follow-up in the field. RCEs need to ensure that Area managers follow their own field work benchmarks The area manager also makes customer calls himself to ensure the customer is happy.

2. Systematic field follow-up:The means for the area manager to guide and train his sales team members and check back on their prospecting. It also enables him to demonstrate selling techniques to them. He can collect market and customer feedback and maintain customer goodwill through this process.

4. Reviewing performance: Area Managers conduct formal sales performance reviews monthly, at the regular monthly area meetings, against agreed targets of:

Callage Customer Acquisition Product Sign-ons Account Balances

In UBL the RCEs review area-wise results monthly with area managers. They attend one area meeting per month, by rotation to assist in reviewing territory achievements.

All plans are revised quarterly by UBL.

Mapping out the hunting grounds:

The territory is the geographical area allotted to a specific sales person, whether a branch manager or a front line sales team member.

The territory holder needs to know his territory his territory well so that he can exploit its potential, prospect the territory. This would help him in acquiring customers. UBL makes sure that the territory holder receive incentive rewards base on the territory’s results.

Formal Reports help in future planning. Some of UBL’s formal reports are

At filed operative level: Prospect Plan Call memo Prospect card Weekly territory report

At field management level: AM’s weekly report Monthly/Qtly Area Report

At RCE level: Regional Sales report

Periodic Meetings: A system of regular meetings for members of the field force at all levels, with the goal of establishing a more formal system of monitoring, review and control than exists at present, is outlined.

Training & Development

In the era of organizational training and development, the cultural norms and values will be established and a detailed culture initiative implementation plan is being worked out by the HR team. The emphasis will be on employer branding, both internally as well as externally to enhance the image of the Bank and become the employer of choice.

HR has been actively striving to provide training to the staff in order to upgrade their skills, which could be beneficial, both to the employees and to the bank. Several courses in various fields of banking profession have been organized since UBL came into being; such courses have extensively gained momentum after its privatization in 2002.

UBL as a learning organization:

The post privatization era has been a relief for a few and a tyranny for many. As a result of major downsizing of the labor-force, UBL had to induct many energetic and agile minds to incorporate the trend of prosperity under the new management. Although, heavy recruitment was conducted but learning organization failed to develop. The atmosphere proved to be too suffocating for the fresh batch of employees. The generation gap came ahead as the major hindrance in UBL’s becoming a learning organization. However, its striving for better results and the management seems optimistic in achieving their objective.

The Training Needs Assessment Process:

TNA at UBL is done on the basis of feedback provided by the managers. The branch managers inform the area of any deficiency or mechanism that is proving to be hindrance in the way to progress. Such deficiencies are an ineffective communication problem, a technical issue like dealing with an automated system or lack of coordination while working in teams etc. The Area manager lists down the deficient areas and forwards them to the regional chief who then informs the HR Department. Such information is conveyed to the Staff Colleges present in the three regions to design courses for the skill improvement and enhancement. The employees are then asked to take classes to improve upon their deficient areas.

Staff College---Main training hub of UBL:

It has been stated before that UBL is presently divided into three main regions; North, Central and South. Staff College, which is the main hub of training activities, is present in all regions. Staff Colleges is an independent body that designs its own management training models and manuals and makes them available for managers. Such an offer is not restricted to the new entrants but extends to all the employees of the bank willing to enhance their managerial skills in different ways. The management of these colleges is

run on the basis of feedback provided to them by the Bank employees, specifically the HR Department. Different training manuals are then published and provided to employees for reference in future. Besides these colleges, the off an on training sessions are conducted for employees as and when the need arises for them.

Following is a description of training and development courses and workshops that UBL has conducted for its employees. It is important to mention here that such courses account for the changing needs and market trends of the banking profession and thus, rarely follow a fixed format.

‘You First’ Service & Quality:

SERVICE & QUALITY WORKSHOPS

Any change in organization, considering the size of UBL, entails getting the employees on board and generating excitement about the change enabling them to embrace change with an open mind and positive attitude. The workshop provides a road map for institutionalizing initiatives designed to change the culture of the Bank and bring a fresh awareness about UBL and its new vision, to all the stakeholders. It is a form where hundred members of the senior management from all over Pakistan and the international division get together to further endorse the senior management’s commitment to providing world class banking services to its customers, as well as fostering employee emancipation and empowerment, process improvement, teamwork, quality initiatives and strategizing the way forward through consensus and open communication.

‘You First’ Service Managers:

UBL has embarked on its service and quality journey at the first contact point of customers i.e. its branches by posting young and dynamic ‘You First’ Service Managers (YFSMs) in mostly the Hub branches in Karachi, Lahore, Islamabad and Faisalabad in the first phase.

The ‘You First’ Branch Meetings initiated by the YFSMs serve as a practical platform in which the staff is encouraged to voice its concerns openly and without apprehensions. Once the issues faced by the employees are identified, they are resolved on a priority basis. Issues that aren’t resolved in the Branch ‘You First’ are escalated to the Regional ‘You First’ and then the Head Office ‘You First.’

Some of the changes that have been brought about in the branches include assembling queues with the greeter’s help, implementing proper dress code amongst the staff, organizing account opening and deposit slip stationery for customer convenience and ensuring maximum cleanliness in branches at all time, well designed seating

arrangements for employees as well as waiting areas for customers- all activities that are geared towards reaping maximum support and admiration of the customers, thus broadening the client-base.

The Branch staff also receives service training by the YFSMs, which are designed to inculcate the importance courteous behavior, problem resolution of customers, and personal grooming. The YFSMs also arrange training sessions of the front end staff in the products they are dealing with in order to assist and guide customers proficiently. Quality measurements are noted every month to observe whether transactions are carried out within the specific turnaround time. Through this, UBL assess whether they need to give training to the front end staff.

Process Improvement (PI) teams:

Such teams are of four types: U force Mail Managers TAT Team Tez Team

U force:The purpose of the team is the elimination of issues related to employee loans and to make the process simpler for employees.Team Achievements--- Various Police Amendments made which are incorporated in the staff circular 1169, RCAD, Operations & Staff Finance modules amended, Loan Calculator made available online.

Mail ManagersThe purpose of the team is to improve the satisfaction level of the internal and external customers by improving the mail management System of the President’s Secretariat.Team Achievements---Departmental mail protocol defined and timeliness for reminders, replies, case closure specified and agreed with the President’s Secretariat. Mail being marked/ copied to the Global/ Group heads by the PS reduced by upto 90% in some cases.

TAT Team:The purpose of the team is to reduce the turnaround time (TAT) of various types of commercial advances without compromising on risk and controls.Team Achievements---Standardization of document, target market study/ RM training initiated, RMs provided proper seating facilities/Email/telephone, TAT measurement initiated trough TAT reduction by 50%.

Tez Team:The purpose of the team is to reduce the TATs for payment of TezRaftaar transactions.

Team Achievements---Real time funds transfer from the Gulf. Transaction tracking module is also being prepared. Over the counter payment facility trough identification is to begin shortly.

Product Training Sessions:The purpose of such training sessions is to bring the staff home about all policies/ procedures of following Products, the main contributors of Monthly ICU Key Control issues, a lot of emphasis is put on exercising higher responsibility/ dedication for strict compliance to all Control Requirements and perform their duties with utmost vigilance to save the bank from risks/ losses (SBP Penalties) etc.

Elaborating the main components of Excellent Customer Services, the staff is stressed upon to strive hard to achieve institutional goals of ‘Error Free Processing’ and ‘Excellent Customer Services.’These comprehensive training sessions enhance the performance standard of staff and bring positive improvement in the working of branches.

Topics/ Products covered:1. Account opening2. Cash Management3. Service Excellence

Efficiency-Quality Quantity High Responsibility Level/ Ownership Positive Attitude Effective Communication Confidence

4. Sundry/ Suspense/ Other Assets entries5. Withholding Tax- Deduction & Deposit6. Unclaimed Deposit7. Zakat Deduction and Deposits8. SOC- Violations9. Excess-Profit paid

Motivational Training Programs:

Excellence and reputation of an institution adds to the motivation of its employees. One develops a sense of pride in working with prestigious institutions. The launch of UBL’s corporate identity, introduction of employees-friendly welfare schemes, pay for performance incentives and the proposed launching of innovative products have instilled greater confidence in the employees and customers. These and other similar initiatives are bound to make UBL a World Class Bank and raise its image further.

Mortgage Training

There is a mortgage training program at UBL. The main purpose of the program is to give an insight into the process of mortgaging

Training Workshops

Different types of Workshops are conducted regularly at UBL. UBL has a one day orientation program for new intakes. The purpose of this workshop is to provide participants with an insight of the salient features of UBL banking.

There is another two days short course with the main aim basically to develop awareness about the nature, purpose and processing of consumer credits among their staff.

A one day course on “Email orientation and accessing of UBL web server is conducted for the staff to help them effectively use email for their day to day communications and improve their efficiency.

Three one-day workshops titled “Mind Power through the Fourth Dimension” are held at Karachi, Lahore and Islamabad, in which around 300 senior executives from all regions and Head Office participate. The workshops are conducted by Professor Moiz Hussain, who has undergone training in USA in NLP and DHE.

A one day course on internal and external foreign exchange trade environment is held at the Institute of Bankers Pakistan. The course is designed to impart update and share importance of foreign and local regulations governing foreign trade, in-house processing standards to achieve standardization at all foreign exchange centers and most importantly the current audit issues in line with the regulations.

Modification of Branch Operations North:

Country Branch Operation was previously centralized at Karachi. It is now bifurcated into segments: one as Branch Operations North and the other as branch Operations South. The main purpose of this bifurcation is to streamline the working and to bring effective control of Regions/ Areas/ Branches in matters relating to operations.

Reduction/ Zeroation of ICU Exceptions Settlement of open Audit items/ DTRs remains the main focus. In some region, especially Sialkot and Peshawer, there is a shortage of staff. Staff in all regions is being provided with in-house training so that prompt and quality service is ensured at all levels and complaints are reduced to a minimum.

Future Plans:

In order to improve the northern region working, following programs have been envisaged:-

1. To inculcate the habit, in all staff members, of being punctual, polite and courteous to all bank customers, so that no complaint should arise.

2. To be neatly dressed.

3. To improve training to all staff members so that they are aware of all modern innovations pertaining to the bank.

4. To ensure that exceptions are not repeated over and over again.5. Realignment / reallocation of certain branches that are not contributing to the

growth of business.6. Renovation of key branches in all regions.7. Closure of Audit / ICU open items prior to 2004.8. Frequent follow up and review meetings to ensure that the above objectives are

met. Road Shows:

Road shows are one of the key initiatives of their internal communication strategy. Direct communication between top management and branch staff is the key involvement and support at all levels. The first road show was held in Lahore, which was attended by participants of Sialkot and Gujranwala as well. A total of around 650 employees attended that road show. The second road show was held in Islamabad, which was attended by around 800 employees from Islamabad, Peshawar and Azad Kashmir regions. The third road show was held in Karachi where approximately 800 participants from Karachi and Hyderabad regions participated. The fourth Road Show was held in Faisalabad in which approximately 600 employees participated. The fifth Road Show was held in Multan region in which 800 employees participated.

In these road shows, DCEO M.A.Mannan shared with staff the vision of the bank, the business results for the year 2003 and the targets for the year 2004 and the four pillars of UBL’s strategy: People, Premises, Processes and Products.

A major part of the strategy covered the different Service and Quality initiatives, which were finalized in the “You First” Service and Quality workshop.

A very important feature of these road shows was the open nature in which participants asked questions which were answered by the Senior Management.

The Road Shows are very interactive and there is generally a positive feedback form all regions.

Town Hall Meeting:

Town Hall meetings are a forum in which senior management interacts down the line, shares the vision, seeks frank comments and responds to concerns. In the meeting there is staff representation from all levels so that the message is effectively passed down and across the organization. After the Service and Quality workshop Town Hall meetings have been held in all regions by the Regional Chief Executives.

Extensive Training for the Senior Employees:

In the wake of privatization, UBL was driven by the need to induct fresh expertise while investing heavily in training the existing UBL staff. Substantial efforts have been made to bridge the gap between the existing employees and the new ones so as to avoid miscommunication and thus, various events like the road shows and town hall meetings are conducted to address maximum interaction and role-play between the two. Another change in the strategy owing to privatization is the open-door policy of employees and their bosses. The existing employees are being trained to cater to these and other potential changes as the banking field continues to practice dynamism in its practices.

Restructuring Commercial Bank on Business Lines:

UBL has grown considerably since privatization, and has made progress on all fronts. One of the businesses that has kept pace with this dynamic change has been Commercial Bank (CB), which required operational and management changes to meet the demands of the future. This challenge was addressed as an opportunity.

The concept of the restructuring and development of CB branch network has been prepared after taking into consideration the territorial demarcation of the country, as well as the business opportunities that are offered in the environment.

The main objective of restructuring CB is to provide the best possible platform to business to grow and prosper. The theme behind this initiative is the “ Captain of the Ship Concept” whereby all functions have been allocated to the Regional Chief Executives, who will manage the busies through their Area Managers.

The primary goal of this restructuring is to empower the RCE by delegating business ownership to him and providing the RCE with a manageable span of control, leading to higher productivity and motivation.

Training Methods:

The training methods depend upon the type of training and vary from type to type. The methods include; presentation techniques, hands-on techniques and group-building methods.

Evaluation of Training Programs:

There is no fixed mechanism by which assessment of raining programs takes place, however; the productivity gains and improvement in profit-making provide ample evidence that a certain training program had been successful in delivering its purpose.

Return on investment:

The investment proves to be worthy when the performance of the employees’ in general improves and employees seem more motivated to work than before the particular training session.

Compensation

Staff strength and morale continues to be UBL’s major focus. The absence of promotions and salary adjustments in the dark period has been difficult to rectify all at once and progress needs to be matched with their financial capability every step of the way. In their approach they have emphasized a "Pay for Performance" culture through awards and incentives and this is showing positive results. Through a number of schemes for deposit mobilization, service excellence and other such criteria, they have sought to differentiate based entirely on a transparent and merit based approach. In line with this, during 1998 a performance ranking was carried out and 1,157 Executives, Officers and other Staff were promoted during the latter half of the year. They recognize that there is a clear compensation gap to address and even this year they have come up with certain meaningful steps in the right direction. As they move forward, they need to ensure that they do not undermine the genuine progress made in improving the health of the Bank.The compensation packages for employees at UBL are devised according to their respective grades and posts held in the bank. Such packages account for the basic salaries according to the ranks. However, incentive based pay is also offered in the form of ‘benefits’. Such benefits are not part of the employees’ permanent salary.

Before privatization, UBL was one of the major commercial banks in Pakistan. Therefore, its basic pay offering was more or less comparable to that offered by other national banks. However, after its privatization and taking over by a new management, the compensation packages were revised.

As a result of UBL’s privatization in 2002, the biggest threat to the employees was of job-insecurity. While the downsizing cost of Rs 6.9 billion at the UBL translates into an average individual payment of Rs 1.27 million the actual individual financial benefit would differ from employee to employee. However, compared to HBL where the number of executives retired mandatory and voluntarily adds upto 1,579 (1079 plus 500 respectively) the retirement scheme at the UBL include only about 390 executives while the bulk comprise of Grade III officers (54 per cent), Grade II officers ( 28 per cent) and the Grade I officers

About 7 per cent of the total 5,416 were mandatory retirements.

The mandatory retirement scheme implemented by the UBL was no less golden than that of HBL, claimed the UBL management, as it said that the 99 per cent of the affected staff would receive well in excess of their current salaries, particularly the officers who

could earn up to 72 per cent more take home salary per month if they chose to deposit the money  at 16 per cent monthly rate.

However one would have to discount for devaluation and inflation. A chart worked out by UBL shows that the investment of money by the Grade 1, II and III officers would fetch them 50 per cent, 72 per cent and 38 per cent more monthly salary than what they were receiving when they were laid off by the Bank. The same chart shows that a similar investment would bring 59 per cent more monthly income to an AVP, 52 per cent to a VP, 10 per cent more to a SVP while it would slash the monthly income of an EVP and a SEVP by 6 per cent and 26 per cent respectively. The investment scheme thus is not favorable to the affectees of the SEVP and EVP level who would be more inclined to invest their money elsewhere to earn at least an equivalent of their monthly take home salary or more.

The grounds that caused UBL’s privatization, led to many sacrifices borne by its loyal employees. The employees left after the major downsizing conducted by the management, remained loyal to the bank and passed this crucial phase with no increments for 2-3 years in their basic pay scales and benefits. The focus of the entire management was on getting out of in-debt situation.

The management therefore signed a contract with United Bank Employees Federation Union of UBL to provide reasonable compensation to its existing employees. One of the key areas highlighted was the allocation of 20% bank shares. These shares were to be offered to the employees at the bid price offered by the strategic investors. Another aspect was the assurance to regularize 50 % ad-hoc employees on seniority basis.

United Bank Limited (UBL) was the first, among the nationalized commercial banks (NCBs), to announce its results for the year 2000. UBL posted an all time high profit of Rs 2 billion then. UBL's restructuring has been substantially complete and its operating profit continued to improve during the first quarter of the year 2001.

While evaluating the performance of UBL, it is necessary to keep the economic conditions of the country in perspective. Though, the banking sector did not face any adverse fundamentals, slow pace of economic activities and process of documentation did not allow commercial banks, in general, to increase their deposits. However, the demand for credit by the private sector was much higher than the demand experienced in the past. One of the reasons for higher credit demand was lower interest rate and bulk of the funds went to agriculture and agro-based industries.

It is true that like other National Commercial Banks, a programme for closing down non-profit generating branches and voluntary separation scheme has been going on in UBL. At the same time a vision to make the Bank a super market of financial institution is also being

implemented. In order to build this environment, as well as dynamism without excessive management control, UBL proposes to pay minimum fixed salaries high variable compensation, proportionate to the business, each staff member attracts and serves. This will progressively have the effect of building thousands of entrepreneurs across the bank, which is critical need of Pakistan. UBL is thus an attractive institution for talent and for those who are confident of their capacity, willing to take self initiative, and have patience and maturity in interpersonal and selling skills.

The current pay schedule followed by UBL includes the basic pay and annual benefits.

Benefits:

The benefits highlighted by the HR Coordinator were the following;

Company Car House Rent Allowance Conveyance Allowance Medical Allowance Free Hospitalization Annual Increments based on the Appraisals Utility Allowance Service Benefits Provident Funds Relocation Allowance House Maintenance allowance Reimbursement of children’s educational fees Vehicle running, maintenance and others Recognition Awards Acknowledgement in the quarterly published magazine Mandatory leave with pay

Company Car with driver is offered to all ranks above Area Manager. The models of such cars differ from rank to rank. Annual increments are forwarded to prospective employees who have been able to perform exceptionally well in the evaluating period, the information regarding which is provided in the appraisal form. The Chief Executive and certain executives are provided with free use of the Group maintained cars and household equipment. Similarly, relocation allowance is provided to employees incase of transfers to other cities. Such a benefit is sometimes referred to as displacement allowance.

Pension Scheme:

Before privatization, UBL offered pension packages to its employees after the service period or during retirement. Such a service has now been converted into provident funds and other service benefits, thus, the employees are compensated in a newer manner. The

management has done away with pensions. However, a pension scheme known as benefit scheme exists for certain staff members. This scheme is closed for new employees. Pension costs are assessed in accordance with the advice of the independent qualified actuary to recognize the cost of pension on a systematic basis over employees’ service lives.

Contributory Provident Fund Scheme:

UBL operates a contributory provident fund scheme for 5,294 employees who are not in the pension scheme. The employer and employee both contribute 8.33% of the basic salaries to the funded scheme every month.

Post retirement medical benefits:

The bank provides post retirement benefits to eligible retired employees. Such a scheme is again restricted to few employees. No new members have been admitted to the scheme since 2004.

Leave prior to retirement:

The management of UBL increased the entitlement of employees in respect of leaves prior to their retirement from 180 days to 365 days according to last year’s annual report. This increase is applicable to employees retiring prior to 2008. An amount of Rs. 220 million has been charged in these financial statements as a result of this increase in entitlement based on an actuarial advice.

Recognition Awards:

Such awards comprise of cash awards and recognition certificates. The awards are a part of UBL’s recent strategy of instant rewards and recognition for top performers. Such awards are categorized as follows;

Top 100 Branch Managers Top 100 Hub Awards Top RCE Award Pool Car Award

Acknowledgement in the quarterly published magazine:The quarterly published magazine named ‘Dialogue’ reviews activities of various sectors of the bank. It also acknowledges excellent performances on part of employees and departments thus act as a motivational tool.

Mandatory leave with pay:A 14 day mandatory leave is offered to all employees annually. Employees are free to avail this opportunity at any time of the year, in bulk or in parts.

The above benefits are offered to the employees on the basis of their grades and performance during the year. Such benefits are not part of the basic pay and all the employees are not entitled to them at one time.

The entitlement of such yearly bonuses is doe on the basis of appraisal forms filled out by the managers. The sequence of such information flow is as follows;

The branch manager evaluates individual employees at the end of the year and sends the appraisal forms to the area.

The area manager evaluates the branch managers performing under him and forwards the remarks to the regional manager

The regional manager scrutinizes the reports sent in by the area managers, makes alterations if any, and forwards the material to the HR department that then decides the bonus entitlement to different employees.

Contractual Compensation:

The employees hired on contract are compensated in a different way. We were informed that contractual hiring at UBL is rare. The staff hired in this manner is basically from Collections & Sales department, Consumer relationship area or related fields. These hiring are conducted with the held of External Agency, and thus, these employees’ are on the pay-roll of the agency.

Role of Market-Surveys in structuring pay-packages:

The range of salaries is structured on the basis of industry analysis; however, UBL alters the pay-scales according to its requirement. Such surveys are not conducted on a regular basis. UBL does not aim to be the pay-leader; however, it strives to attract potential players in the market by offering them attractive pay-packages.

Approach to developing a pay-structure:

At UBL, usually Pay Grade approach is followed. The whole lot of employees is divided into manageable chunks so as to make the process administratively feasible. Thus, employees are divided into certain ranks like Grade 1, Grade 2 etc., or Assistant Vice Presidents, Vice Presidents, Senior Vice Presidents etc. The basic salaries are fixed but may differ according to performance initiatives on part of the employees. Such a job-based structure stimulates a strong performance appraisal, again a basis for additional bonuses and annual increments.

Extent of Merit Pay Programs:

As has already been stated, the pay structure followed by UBL is job-based. i.e. the employees are compensated according to the responsibilities ad requirements of jobs, and employees belonging to a certain level are entitled to more or less similar pay structure. Merit pay programs are introduced in the system in the form of benefits and bonuses. If,

for instance, an employee is graded as outstanding by his/her boss as a result of remarkable performance, he/she is compensated accordingly. Such a compensation has no relation with the employee’s fixed pay, however, the additional perks subsequently add up to the overall pay package of the employee. Thus, individual performance difference are also catered for and accommodated.

Profit Sharing:According to the revised policies, profit sharing is abundantly practiced at UBL. Such profit sharing results into increments in the pay packages of all employees according to their respective grades.

Ownership:Presently, ownership options are not offered by the management to the employees.

Gain sharing:As a result of privatization, certain new concepts like working in teams have come up in the policy and procedures manual. The employees are encouraged to be effective team members and such encouragement is enhanced by offering them incentives like gain sharing. They are also applauded by the senior management at the end of the year, boosting their morale and encouraging them to be even more productive.

Agency cost:

We were told by our clients that UBL has not faced substantial agency costs. This accounts to the fact that both the management and the owner’s are completely satisfied with each others’ policies and strategies regarding various operational strategies or the costs are so trivial that they aren’t worth mentioning. Nevertheless, the continuous fluctuations in the management raise eyebrows.

The privatization practice was held when Mr. Amer Z. Khan was the President of the Bank. However, soon after the privatization, a new management came into view headed by Mr. M. A. Mannan, the CEO. Currently, Mr. Atif Bukhari is the CEO whereas; Mr. M. A. Mannan is the Head Consumer/Commercial Bank. These fluctuations in the senior management, though are not very unusual, yet may not be considered as a routine affair.

Headquartered in London, HSBC Holdings plc is one of the largest banking and financial services organizations in the world. HSBC’s international network comprises over 9,500 offices in 79 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.Through an international network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services: personal financial services; consumer finance; commercial banking; corporate, investment banking and markets; and private banking. It has 255,000 employees and nearly 200,000 shareholders around the world.Although the Group’s holding company, HSBC Holdings plc, was formed as recently as 1991, many of its principal constituent companies opened for business over a century ago and have long experience in their home and international markets. The story of the growth and development of these companies is rich in variety and achievement, with an international pedigree that is unique in banking history.

Business principles and values:

The HSBC Group is committed to five Core Business Principles:

Outstanding customer service; Effective and efficient operations; Strong capital and liquidity; Prudent lending policy; Strict expense discipline;

Through loyal and committed employees who make lasting customer relationships and international teamwork easier to achieve.

HSBC also operates according to certain Key Business Values:

The highest personal standards of integrity at all levels; Commitment to truth and fair dealing;

Hands-on management at all levels; openly esteemed commitment to quality and competence;  A minimum of bureaucracy; Fast decisions and implementation; Putting the  team’s interests ahead of the individual's; The appropriate delegation of authority with accountability; Fair and objective employer; A diverse team underpinned by a meritocratic approach to

recruitment/selection/promotion; A commitment to complying with the spirit and letter of all laws and regulations

wherever they conduct their business; The exercise of corporate social responsibility through detailed assessments of

lending proposals and investments, the promotion of good environmental practice and sustainable development, and commitment to the welfare and development of each local community.

HSBC’s reputation is founded on adherence to these principles and values. All actions taken by a member of the HSBC Group or staff member on behalf of a Group company should conform to them.

Group structure:

Headquartered in London, the HSBC group operates in five regions: Europe; Hong Kong; the rest of Asia Pacific; including the Middle East and Africa; North America; and South America. 

The entities which form the HSBC Group provide a comprehensive range of financial services to personal, commercial, corporate, institutional and investment, and private banking clients. To more easily promote the Group as a whole, HSBC was established as a uniform, international brand name in 1999.  In 2002, HSBC launched a campaign to differentiate its brand from those of its competitors by describing the unique characteristics which distinguish HSBC, summarized by the words 'The world's local bank'.

HSBC organizes its business around customer groups, which are based on a geographical structure with regional offices. HSBC’s Group Head Office provides overall strategic and functional direction. The heads of the customer groups are responsible for establishing and implementing strategies for the development of their business. They work withregional and country managers to deliver the Group’s strategies around the world.

Customer groups:

Personal Financial Services:HSBC has over 100 million personal customers’ worldwide (including Consumer Finance customers). It provides a full range of personal financial services, including current and savings accounts, mortgages, insurance, credit cards, loans, pensions and investments. In 2004, the business reported a pre-tax profit before goodwill amortization of US$5.4 billion, an increase of 34% over 2003. The number of customers using HSBC Premier continued to grow; by the end of the year, the total stood at 1.14 million, an increase of 250,000 in 12 months. HSBC is now one of the world’s top 10 credit card issuers.

Consumer Finance:HSBC Finance Corporation’s Consumer Finance business facilitates point-of-sale credit to consumers, and lends money and provides related services to meet the financial needs of everyday people. In 2004, the first full year of ownership, HSBC Finance Corporation earned a pre-tax profit before goodwill amortization of US$3.7 billion. The integration of the former Household businesses into HSBC was completed in 2004. Non-funding-related benefits of the integration reached more than US$200 million.

Commercial Banking :HSBC is a leading provider of financial services to small, medium-sized and middle-market enterprises. The Group has over two million such customers, including sole proprietors, partnerships, clubs and associations, incorporated businesses and publicly quoted companies. In 2004, Commercial Banking earned a pre-tax profit before goodwill amortization of US$4.2 billion, an increase of 32%. In the UK, 209 Commercial Centers were launched to provide improved relationship management for higher value SMEcustomers while, in Hong Kong, Business Banking Centers were expanded to provide one-stop service.

Corporate, Investment Banking and Markets:This customer group provides tailored financial services to corporate and institutional clients, and contributed a pre-tax profit before goodwill amortization of US$5.2 billion, an increase of 17% over 2003. Business lines comprise Global Markets, Corporate and Institutional Banking, Global Transaction Banking and Global Investment Banking. Global Markets includes foreign exchange, fixed income, derivatives, equities and metals sales and trading businesses. Corporate and Institutional Banking covers relationshipmanagement and lending activities. Global Transaction Banking includes payments and cash management, trade services, supply chain, securities services and wholesale

banknotes businesses. Global Investment Banking is involved in investment banking advisory and investment banking financing activities.

Private Banking:HSBC has one of the world’s top private banking businesses, providing financial services to high net worth individuals and their families in 70 locations. Record pre-tax profit before goodwill amortization of US$693 million in 2004 represents an increase of 23% over 2003. HSBC Private Bank strengthened its onshore operations significantly in Asia, Europe, the Middle East and North America.

HSBC strategy

HSBC is clear about where its priority lies. Their number one objective is to ensure that their shareholders get a better return from HSBC than they would from investing in their financial services peers. To achieve financial success over the longer term requires a sustainable approach, and HSBC’s strategy seeks to address the expectations of their customers, colleagues and those who represent the interests of various communities, the wider society and the environment. HSBC’s strategic objectives include making HSBC one of the world’s leading brands for customer experience and corporate social responsibility. The plan also calls for several major initiatives: growing revenues through a world-class, ethical sales and marketing culture; focusing relentlessly on customers’ needs; increasing productivity and controlling costs effectively; and managing their people in a way that encourages and rewards strong performance. While a large part of their strategy involves growing revenues by meeting customer needs, but according to HSBC, their goal is not, and never has been, profit at any cost. They believe that tomorrow’s success depends on the trust they build today.

When The Hong Kong and Shanghai Banking Corporation acquired the Mercantile Bank and The British Bank of the Middle East in 1959, it laid the foundations of today’s HSBC Group. In these acquisitions and, by the later investment in Hang Seng Bank in 1965, the bank grew and diversified through subsidiary companies with their own experience and expertise. If one looks at the history of HSBC, he will find out that HSBC has grown up to become the World’s second largest bank going through a lot of mergers and acquisitions, and HSBC’s main directional strategy has been “external growth strategy.”

HSBC HRM--An Overview:

Primary Responsibilities of HSBC HR Department: Looks at the business from every angle to ensure that HR policies are applied

effectively and fairly across the Bank Provides strategic support on staffing levels, individual development and career

succession planning Generates fresh ideas on recruiting, retaining and motivating the best employees Offers expertise in employee contracts, disciplinary procedures, pay reviews,

appraisals and employee performance criteria Combines lateral thinking with commercial understanding to deliver effective HR

solutions

Recruitment:HSBC believes that their biggest asset is their people. They make the difference. They set them apart. HSBC recruit and promote employees solely on merit and suitability; and they encourage staff to realize their full potential. They ensure that the posts with the most impact on business success are occupied by the best people. Their talent strategy is about ensuring a steady flow of high-performing executives at all levels who contribute significantly to key roles while they are prepared for more senior roles in future.HSBC hires and recruits employees on the basis of the demand, which is determined on the basis of various factors. These factors include forecast of future demand; and if HSBC is planning some acquisitions or mergers, then they plan for the recruitment accordingly.

Electronic Recruitment:Whenever there are any vacancies and openings in any particular area, it is advertised on the HSBC’s websites. The advertisement contains all the necessary information regarding the types of job, type of skills required, and other relevant job information. HSBC also use the services of some other websites for advertising the job openings, one such example is Hays.com.

Advertisement in Newspapers and Business Magazines:Advertisements are also given in newspapers and business magazines of the specific country regarding employment opportunities.

Universities and Job Fairs:HSBC makes frequent visits to different universities for the purpose of identifying potential candidates. They also give scholarships and assistance to talented students who work with HSBC after completing their education.

Employment Agencies:HSBC also uses the services of several recruitment agencies, and they require all recruitment agencies to hire according to the recruitment policies of HSBC.

Selection:

HSBC has a well defined selection procedure. Recruitment is done at various levels in HSBC. An executive management trainee (entry level) goes through the following stages during the selection process.

Online application form

Online tests

Face-to-face interview

Assessment centre

Feedback

Selection is done for various openings at HSBC, which include information technology management trainee, international management trainee, retail management trainee etc. There are certain variations in the selection process for each post. The activities in the selection of executive management trainee are discussed below:

Online application form:

HSBC Bank requires all job applicants to fill out the company’s standardized application form rather than curriculum vitae. This helps ensure details of a person that are irrelevant to the job are not included.

The application form also has a detachable section with questions on, among other things, a person’s ethnic/racial background. The section is used by the bank for monitoring its diversity policy. If it becomes clear that minority ethnic groups who are underrepresented in the workforce are not applying, then this can be taken into account in subsequent recruitment drives. HSBC’s online application form usually takes around three hours to complete. So it is quite a comprehensive application form.

Qualifications Section:

The qualification section of the application form has to be filled with all important personal qualifications.

Personal qualities:

There is a personal qualities section in the application form, in which applicants are supposed to describe their achievements and explain what they have learned from them. This information helps HSBC screen out the applicants who can’t be eligible for joining their team.

Career objectives:

There is a career objectives section of the application form, in which applicants are asked to explain the reason for which they want to join HSBC. If an applicant is successful, he is invited to complete the online test within five working days.

Online tests:

If the online application passes HSBC’s screening process, applicants will be asked to complete an online verbal and numerical reasoning test. These tests normally take about 20 minutes each. HSBC at times also retests candidates at later stages in the selection process to ensure the validity of the online test results.

Face-to-face interviews:

If an applicant passes the online test stage, he is contacted for setting interview date and time. Interviews are structured and capability-based. Applicants are asked to talk about specific examples of when they have used their skills and experience. Interviewers are normally line managers. Usually a note-taker is also present to record the interview to make sure that the assessments are accurate and consistent

If an applicant is successful, he will be invited to take part in the final stage of the process, which is to attend an assessment centre

Assessment center:

This is the final stage of the Executive Management selection process. It includes an overnight stay with an evening dinner, and generally runs from around 4 p.m. to 4 p.m. the next day. It’s hosted by the Graduate Recruitment team, a number of business representatives, both junior and senior, plus Executive Management trainees on the training program. Assessment centre are two-way events. They’re not just designed to help HSBC decide if the applicant is right for them: they also help the applicant decide if the Executive Management program is right for them.

Feedback:

If the applicant is successful, he is given feedback within one week of the assessment process. Feedback on how one performed at the assessment centre is given to every applicant, whether or not he is successful.

Performance Management:

At HSBC, the company's success, which depends on the excellent performance of its staff, is achieved through a two-phase Performance Management process.

Performance planning and review ensures that the personal objectives of all staff are linked to divisional and HSBC Group imperatives using a balanced scorecard approach. It provides an opportunity for dialogue between the line manager and individual thereby allowing for a realistic review of performance and requirements for further development and training.

Managers work with their employees to set performance goals and expectations and evaluate progress toward the employee's professional development goals. Regular coaching, recognition and feedback give the employees the opportunity to improve and excel.

Everyone at HSBC starts the New Year by planning their activities for the coming year. These activities cover four key areas. These are:

Customer Business systems and process Learning and Growth Financial

In mid-year and at the end of the year, employees sit down with their managers to discuss their achievements against the objectives set for the four quadrants of activities.The overall performance assessment feeds directly into the annual remuneration review and bonus award.

Planning

Role of HSBC’s Strategic Development Unit in Planning: Acts as internal consultancy to senior executive management on business strategy Examines potential acquisitions and partnerships, deployment of capital and

resources, corporate planning, performance analysis and new ventures

Formulates the Bank's response to changes in regulation (both domestic and European Union), as well as assessing the likelihood and timescales of possible UK adoption of the euro

Undertakes strategic business reviews and project-based research

Role of HSBC International in Planning: Head Office for 17 of HSBC Bank plc's overseas branches and subsidiaries

including those in Greece, Malta and Turkey Provides strategic direction and co-ordination, for example, when opening a

branch in a new country or developing a new customer grouping proposition for an existing branch

Monitors financial performance of overseas operations against targets set down in annual operating plans

HSBC Forecasting Labor Demand and Supply:

HSBC main strategy has been external growth. If one looks at the history of HSBC, he will find that HSBC has grown up to become the world’s second largest bank through a number of mergers and acquisitions.

The criterion for selecting acquisitions has mainly been that the acquisitions must fit into their overall business strategy. They should bring a valuable customer base or productcapability, and most important of all, HSBC looks for similar type of culture and people in the considered company. When HSBC looks for a merger or acquisition with another company, it makes sure that it has the necessary resources to manage the business. According to the needs, HSBC also gives training to its employees for managing the mergers and acquisitions.

When HSBC plans to expand its business by opening new branches or expanding its existing branches, it analyzes its labor requirements and plan for labor rightsizing accordingly. For example, HSBC is planning to recruit 130 business bankers next year, as part of a £1.4bn five-year investment who will assist the creation of 214 commercial centers in its branches.

Goal Setting and Strategic Planning:

Managing for Growth:

At the end of 2003, HSBC launched ‘Managing for Growth’, a strategic plan that provides HSBC with a blueprint for growth and development during the next five years. The strategy is evolutionary, not revolutionary. It builds on HSBC’s strengths and it addresses the areas where further improvement is considered both desirable and attainable.

HSBC plans to deliver its strategy for growth by focusing on enhancing HSBC’s revenue generation culture, further developing the brand, managing costs strategically, maintaining a prudent credit/market risk stance and investing further in their people

As acquisitions remain an integral part of HSBC’s strategy, they deliver it through concentrating activities on geographies where growth and critical mass are located, rewarding revenue performance and penalizing mediocrity and Benchmarking growth targets and achievements rigorously against peer group.

To reduce costs and stay competitive, at times, HSBC has to downsize or hire contractual employees or using other strategies to manage their workforce requirements.

Business Process Outsourcing:

The bank has been one of the early adopters of the offshore model, opting for the captive route of moving to low-cost countries but keeping the facilities in-house rather than hand it over to a third-party service provider. HSBC has business process outsourcing (BPO) centres in Bangalore and Hyderabad. HSBC outsource its jobs and moves to cheaper locations wherever possible. They have publicly stated their intention to outsource 4,000 jobs to cheaper locations over the next two years and they are looking for moving to cheaper locations like Sri Lanka and the Philippines in addition to India.

Contractual and Part Time Employees:

About thirty percent of employees at HSBC are contractual and part time. Employing contractual and part time employees helps HSBC remain flexible. Contract of part time employees can be terminated as well as renewed; or at times, the status of outstanding employees is upgraded to permanent.

Downsizing:

In the year 2003, the group had 215,000 employees worldwide, up from 171,000 employees in 2002. Despite the rise in headcount overall, HSBC announced in 2003 it would cut 1,400 jobs from its overall UK payroll due to a weaker business environment. Most of the layoffs come from a recruitment freeze and leaving vacancies unfilled.

Other than that, HSBC is planning to shed 4,000 jobs in its UK banking operations by 2006, affecting sites in Brentwood, Birmingham, Sheffield and Cardiff, in order to transfer work to India, China and Malaysia, which will help them lower their costs.

Affirmative Action Planning:

HSBC is an equal opportunity and affirmative action employer, HSBC is required to obtain race, gender, disability and other demographics on job applicants.

Training at HSBC:

HSBC believes that a business's most important asset is often its people. Training and developing them can be one of the most important investments a business can make. The right training can ensure that their business has the right skills to tackle the future. It can also help attract and retain good quality staff, as well as increasing the job satisfaction of those presently with the Bank - increasing the chances that they will satisfy their customers.

HSBC offers various training programs not only locally but also throughout regional training centers in Asia, the Middle East, Europe and a number of countries. Department Managers identify training needs of staff from clerical level to executive level. Other than job related training, HSBC also conducts supervisory and management skill courses for suitable employees.

HSBC also subsidizes various tuition fees for staff in courses such as language training, computer training, Korea Bankers Institute Correspondent Programs and graduate school. HSBC also utilizes a job-rotation policy. This has the advantage of developing an individual's career not only in one specific area but encourages staff to become skilled in many areas. Rotation is undertaken through internal job openings for vacant position or after evaluating the potential value of an individual's contribution in other areas of the business.

HSBC’s Training Management Model:

Different Training Programs offered at HSBC:

Reflecting the nature of the business and a commitment to the development of employees, there has been a strong tradition of training within the organization. HSBC currently has 15 regional training centers in operation worldwide, and a residential Group Management Training College in Hertfordshire.

Induction training:

Induction training provides the employees with an insight into HSBC as an organization and outlines the key values and the standards required.

Systems training:

System training provides employees a comprehensive training on HSBC’s products and services.

Communications Training:

Communication training program provides the employees training on sales presentation skills, negotiation skills, teamwork building and others.

Technical Training:

Technical training is also provided to employees wherever needed which includes giving training on using office applications and other necessary applications.

Formal Skills Training:

Employees can take advantage of hundreds of business-specific and professional development training resources (classroom instruction, self-study programs, peer training and Web-based training) to help develop and enhance their skills.

Management skills Training:

Class room training is also provided to employees to improve their management skills, which can help them in their future.

Executive Trainee Development Programme (ETDP):

The ETDP is a seven-week course of intensive training held at the Group Training Centre in the UK with HSBC Group trainees from around the world. The ETDP provides a comprehensive overview of the banking industry and of the Group's entire international operations, as well as the management skills required to take up operational roles. It's also a great opportunity to network with other trainees as well as senior management of HSBC, providing useful contacts for the future.

Diversity awareness training:

A one-day event, designed specifically to help managers and supervisors at all levels to understand the business benefits of serving a diverse community, as well as the impact of their behavior on others. The training encourages cultural competence and incorporates an overview of legislation currently in force.

Disability awareness training:

Delivered by trainers with disability experience, many with disabilities themselves. This event concentrates on providing managers and supervisors with an overview of the issues and concerns of people with disabilities. Recognizing that one size does not fit all, it aims to help them to support people in the bank who become disabled during their working life, as well as to promote the recruitment and development of people with disabilities.

The same difference - working with diversity:

Video-based, mandatory viewing for every employee in the bank. It challenges individuals to look at themselves and understand how their personal experiences inform their frame of reference when communicating with others.

Different Methods of Training at HSBC:

HSBC uses various methods for training their employees and keeping their skills up to date. These methods include class room training, on-job training, lectures and seminars, use of multimedia, interactive video etc.

Learning centers and learning materials:Onsite learning facilities enable their employees to not only improve their job-related skills but also allows them to develop new skills and build knowledge to facilitate their own personal development. This is supplemented by access to a comprehensive bank-wide network of learning materials such as CD-ROMs, audio cassettes, videos and books.

E-Learning:HSBC wants to equip their employees with the skills they need to operate successfully. They use a variety of training mechanisms, including e-learning, which is a cost-effective way of enabling more employees to work on programs at their own pace.

Equal opportunities CD-Rom:This is an interactive learning resource for any employee to use to increase their knowledge of various sectors of the community.

LEAP library: A resource library of videos, books and audio cassettes with a dedicated diversity section. The material in LEAP is free of charge to all employees and includes information and material on women's development, disability, cultural awareness, race issues and other diversity topics.

Distance Learning:Web-based and multimedia self-study programs available through Intranet and/or more than 130 multimedia Learning Centers located in various HSBC offices.

Ongoing training: Regular modular training sessions from HSBC’s on-site training teams help their employees to develop as the role evolves and they face new challenges.

Regular coaching or On Job Training:

At HSBC, employees get the opportunity to receive regular coaching, ongoing appraisal and with it the opportunity to develop a whole host of new skills

Graduate Trainee Programme of HSBC:There are two streams of choice for the Graduate Trainee Programme:

The graduate takes up one position for the full duration of the programme in one department

The graduate experiences a rotation amongst various departments for the duration of the 12 -18 month programme

Specialized Programme: This is where the Graduate Trainee has a special area of interest and wishes to spend the full duration of the programme in one specific area of the business.

Rotation Programme: Graduates rotate on a four to six week basis through the business areas listed below. After each rotation, the graduates provide feedback on their experience, which assist with the final selection of their permanent position at the end of the programme. In addition, the Department Head also provides feedback to the graduate.

Each graduate rotates through at least six of the following areas:

Planning and Strategy Settlement Operations and Finance Internal Control, Credit Risk and Compliance Corporate and Institutional Banking Corporate Finance Research Treasury and Capital Markets Derivatives Equity Trading Personal Financial Services Training at the HSBC Group's training centre in the United Kingdom

Each graduate is given a fixed, but not inflexible, timetable detailing the sequence and dates for each rotation. Once all the rotations are completed, the graduate spends three months working on a project in an area that s/he has identified as one where s/he would like to be placed permanently.

During their rotation, graduate trainees are offered training in IT modules (Word, Excel, etc.) presentation skills, project management skills, business writing skills and any other relevant technical training

Towards learning and development:

The growing diversity of the financial services business, increasing competition in this sector and the sheer complexity of a global business ensures the Group continually refines its approach to 'learning and development'. A significant reorganization involving the merger of three corporate training teams took place in 2002 and a major review of training and learning activities was completed in July 2004. This review has led to better alignment with the business, a stronger commercial focus and a move to emphasize and support the learner and his or her manager in managing their learning. The department has also changed its title from 'Training' to 'Learning and Development' highlighting this change in focus.

Training Needs Assessment Process:TNA at HSBC is carried out by Departmental Managers from clerical to the executive level. After thorough analysis, the managers come up with a decision to enhance cross training skills or allow job rotation, career development opportunities and the like. The need to prepare individuals for vacancies also comes up which is dealt with after analyzing individuals capabilities and past performances.

Development Activities:

HSBC understands that for the organization to continue to succeed, it needs its people to continually grow and learn in their jobs. To support this, HSBC offers a wide range of development activities such as:

← Internal technical and managerial training courses (both in Sydney's training centre and other Regional Training Centers, including Hong Kong and Singapore).

← A transparent internal recruitment process, with a weekly positions vacant bulletin advertising all internal vacancies.

← On-the-job development, with learning journals and hands-on coaching. ← Financial support and examination leave for attendance on appropriate external

tertiary courses. ← Developmental secondments to other members of the Group overseas entities for

high potential employees. ← On-line learning, including 'take-away' training to provide flexibility to

employees and maximize learning opportunities. ← Reading material, journals, videos, available for employees to broaden their

skills/knowledge. ← Learning and growth is formalized through the Annual Review Process and

therefore a part of each employees responsibility. ← Department Specific 'coaches' and 'trainers' to share in-depth specialist knowledge

with new joiners and up skill existing team members.

The main driver in all these developmental options is the employee.

Career Development:

No matter where employees begin their careers at HSBC, HSBC offers professional development; mentoring and training opportunities that can help employees develop their talents throughout their careers.  Here are just some of the opportunities available:

Choices Program:

In an effort to encourage employee development, HSBC offers full-time employees $50.00 a year to put towards something that they believe would support their personal development. Employees are given the freedom to interpret personal development in their own way. While the dollar amount is modest, the program importantly signifies that the bank values individualized understandings of employee development. HSBC has also recently introduced the availability of paid time off for employees to prepare for assignments and exams related to HSBC-endorsed external academic, training and development courses.

Self-development Support:

To support the self development of employees, training is given to employees on various courses like accounting and security analysis etc.

Career Track:

As employees develop their talents and wish to advance their careers, HSBC’s national internal job bank provides early notice of positions available in the company.

Mentoring:

HSBC believes that mixing new and highly experienced employees is a recipe for success. Their business and operating units have implemented special mentoring programs that pair high-potential individuals with business-savvy senior managers to provide advice, collaborate on career development and increase visibility with the HSBC leadership team.

Training Libraries:

At their larger locations, employees can learn more on their own by visiting their corporate libraries stocked with books, tapes, periodicals and, in some cases, Internet-ready personal computers.

Tuition Reimbursement:

HSBC supports educational endeavors for their employees by offering a generous tuition reimbursement program.  Eligible part- and full-time employees who take undergraduate or graduate college courses are reimbursed up to specific limits each year, until the entire cost of the tuition is reimbursed.

HSBC University in UAE:

The HSBC University was officially launched in February 2004 to induct UAE nationals into a specific job role following an agreed training and development programme. By

enrolling in the University, staff are given clear direction and pace for their chosen career and development.

Management Training Programs:

HSBC supports their employees by giving them proper training and development from the day they join the company. Through several management training programs in their business units, they offer rotational job assignments, mentoring, networking and formal training to high-potential employees to help them become leaders.

There are various management trainee programs offered to employees at HSBC. The contents of “commercial management trainee” program are discussed below:

Over the course of the first year, the management trainee experience commercial banking and understand the different needs of business customers. This phase is very much a customer facing one, aimed at providing the trainee with the interpersonal skills and technical knowledge they need to build relationships with business customers.

In the second year, HSBC tries to develop trainee’s relationship management skills and their flair for identifying business opportunities. Trainees go out with the commercial manager and learn about how to win new business and build their own portfolio of customers. In the process, Employees also develop their knowledge of the local area and spot commercial prospects, whilst building their list of networking contacts.

Trainees also undertake a number of projects related to the different skills they need to develop. Typical projects include:

Researching the local business market and identifying growth opportunities Planning, publicizing and budgeting for a promotional event  Analyzing financial data and putting together a business plan  Reviewing local competitor activity Community Action initiatives

Compensation

Five- and six-figure cash awards aren’t unusual for employees with great ideas that save the financial services firm money. And, says HSBC vice president of compensation Chuck Dwyer, you don’t have to be a senior executive to win one.

The driving philosophy behind HSBC's compensation practice is the principle of pay for performance. This means that rewards are differentiated based on personal contribution. There are four aspects of compensation:

Base salary

Incentives (bonus or commission) Long term incentives (shares) Recognition awards

In the year 2003, 5,300 HSBC employees working in New York received $26 million in bonuses, using a pay-for-performance formula. Annual raises were also weighted, based on performance. HSBC structures its base salary program to motivate and reward superior performance. Salary at HSBC is based on how well the employees perform.

Employee Benefits and Rewards:

HSBC’s key principles are fair pay for the contribution made by an employee, with an element of variable pay based on individual performance. Promotion is based on competence, performance and adherence to values and ethical standards. HSBC shares the benefits of their success through performance-related bonuses in most regions and the extension of share ownership. About half of all HSBC employees now participate in one or more of HSBC’s employee share plans.

HSBC is proud of its high-performance culture, which has made it one of the top 10 financial services companies in the United States. HSBC succeeds because they attract and develop the very best people in the business. HSBC provides a wide variety of employee benefits and rewards including health insurance (medical, dental, vision), life insurance coverage, retirement and savings programs, 401(k) and other employee services.

HSBC invests in their employees and provides best-in-class rewards that help employees manage their careers and their diverse lifestyles. HSBC assists them for counseling, adoption, scholarships etc. Other than that, employees also receive staff discounts on banking and other financial services.

Benefit Choices:

A flexible benefits plan including life, disability and travel insurance coverage plus the ability to select from a menu of health and dental options - or take cash instead.

Health Care:

Medical, Dental and Vision Plans: HSBC offers a number of medical plans, including Preferred Provider Organizations (PPO), Exclusive Provider Organizations (EPO), Health Maintenance Organizations (HMO) and corporate- and employee-supported health fund accounts to meet the diverse needs of their employees. They also offer vision, dental and prescription drug programs for eligible full- and part-time employees and their spouses, children and same-sex domestic partners.

Flexible Spending Accounts: Employees can enroll in tax-free health care, commuter expense, and dependent care flexible spending accounts. With an industry-leading family care plus dependent care FSA, HSBC contributes 50 cents for each dollar that employees contribute, up to the plan maximum.

Insurance, Disability and Long-term Care Programs: HSBC offers basic life insurance free of cost to eligible employees, as well as discounted supplemental life, dependent life, and accidental death and dismemberment insurance programs. The company also provides short- and long-term disability coverage and long-term care insurance options. For the convenience and savings of their employees, they offer a group home and auto insurance plan as well as a group legal and senior advocate plan.

Work / Life Balance:

Adoption Assistance: The Company pays up to $2,000 toward eligible adoption expenses for infants and children; up to $4,000 in adoption expenses for children with special needs.

Child Care Centers: In specific major sites, HSBC offers childcare centers, mother's rooms, back-up childcare options and a new-mother transition program.

Health & Wealth: Each year, employees at many larger facilities have the opportunity to participate in free, on-site health screenings that go beyond the typical flu shot (i.e., diabetes, blood pressure and cholesterol testing). Employees at smaller facilities and branch offices also enjoy these benefits, as the company reimburses the cost of similar exams performed by their own doctors. All Health & Wealth participants receive a $100 contribution to their Healthcare Flexible Spending Account in the following year.

Time off Program (TOP): TOP provides employees with a bank of paid days off to use as they wish (e.g. vacation, short Illness, errands, family responsibilities, volunteering).

Company-paid Holidays: HSBC observes a number of company holidays annually, dependent on business unit. Employees who wish to observe other holidays can do so by using their TOP days.

Concierge Services: Some larger facilities offer services like dry cleaning, cafeteria, movie passes, gift shop, postal services, and photo finishing services, ATM machines and discounts to entertainment destinations.

Merchant Discounts: All employees can take advantage of discounts and special promotions offered by national and local merchants, including great savings on furniture, jewelry, cell phone plans, travel programs and tours, health club memberships and more.

Family Leave:Five days paid leave is available to all employees who have caring responsibilities. This could be childcare, elder care or for disabled relatives. Leave is prorated for part time employees.

Long Service Awards:

Long Service Awards were introduced within HSBC in 1997.  Initially, those reaching 20 years service were given a bottle of champagne, flowers or a gift token to the value of £25 and those reaching 30 years had the choice of an engraved gift or a celebratory lunch or dinner for partner and colleagues.  At 40 years, employees were awarded a celebratory lunch or dinner and an award equivalent to one month's basic salary. Awards have been enhanced over time and the need to engrave the 30 year gift dropped

By rewarding Long Service, the bank hopes to demonstrate its appreciation of the loyalty and commitment of employees, after all, the continuing success of the organisation is a direct result of the performance of their people.

Financial Security:

Shares save: The plan offers employees the opportunity to buy shares of HSBC Holdings plc stock at a 20 percent discount, without brokerage fees or commissions, on the purchase of the shares. Employees contribute through payroll deductions over a 3- or 5-year contract period. At the end of the contract period, they have the opportunity to use all or part of their savings, plus interest, to buy shares at the previously fixed discount price. Or, if the value of the stock declines, they can withdraw all of their savings, plus interest.

HSBC - Retirement and Savings Program:

Retirement saving is a partnership between the company and the employee. To support that partnership, HSBC offers employees two ways to build for their future.

HSBC Tax Reduction Investment Plan and Trust 401(k):

HSBC’s 401(k) savings plan offers employees a generous $3 for $1 match on the first one percent they contribute. In addition, HSBC matches $1 for $1 on the second, third, and fourth percent of pay they contribute. That is a total 6% match when employees contribute 4% of their income. The plan also offers the convenience of payroll deductions, tax advantages, and diverse investment opportunities.

The HSBC - Retirement Income Plan and Trust: At no charge to the employee, the company contributes funds to a retirement account for each eligible employee.

Workers Compensation Pension:

HSBC supports its employees by offering various workers compensation pension packages to their employees. In case, a worker meets an accident at the work place and faces permanent total disability, HSBC supports the employees by giving him pensions. In case of an employee’s death, his/her beneficiaries become the recipients of a Survivorship Insurance policy that pays them a monthly pension.

Types of Pensions Deriving from Worker's Compensation Insurance: Permanent Total Disability Pension Permanent Partial Disability Pension Widow's/Widower's Pension Widow's/Widower's and Orphan's pension Orphan's Pension Descendant's Pension

Incentives and Rewards:Incentives are ingrained in the HSBC Culture. HSBC employee incentive programs are gaining increasing recognition; helping the financial-services company gain coveted spots on “the best places to work”. Employee engagement isn’t new at HSBC; it dates back to the early 1980s when employee suggestion programs acknowledged employee expertise in getting things done better, faster, cheaper and smarter.

HSBC is gaining positive attention for its tailor-made rewards programs developed to recognize employee achievement. In addition, its 200-plus incentive programs span all levels. More than four in five employees – managerial, non-managerial, professional and nonprofessional – receive an annual bonus or incentive reward.

Top employees exceeding their business performance goals receive cash incentives, merchandise awards, exotic trips, family vacations, SUV and sports car leases, new home furnishings, home additions and scholarship annuities for their children. For just two of the company’s incentives programs – Great Ideas and 4* Star Performance – the company awarded 10 top-performing employees rewards that totaled nearly three-quarters of a million dollars.

Since 2002, more than 2,200 employees have submitted more than 3,400 suggestions for “valuable and viable efficiency and cost improvement.” The company has adopted more than 240 of these “great ideas” suggestions and benefited by saving more than $6 million. Employees rewarded for their ideas receive generous cash, stock and merchandise.

HSBC 4 * Star Performance Program:

The 4* Star Performance program honors outstanding collections, bankruptcy and credit-counseling employees in various business units. Each year, nine eligible employees receive $50,000 plus a $10,000 dream award. In addition to these annual performance awards, quarterly, monthly and on-the-spot cash and merchandise awards are earned by exceptional employees in each business unit.

HSBC Great Ideas Program:The bank's "Great Ideas" program rewards workers who make efficiency and cost-improvement suggestions. Since 2002, more than 1,500 employees have submitted more than 2,200 suggestions in exchange for generous cash, stock and merchandise prizes. The company has adopted more than 120 ideas, resulting in a value to the company of nearly $3 million.

As an evidence to support the face that how HSBC rewards its employees on coming up with creative ideas, we can take the example of Janice Stanley, an employee at HSBC, who benefited from having a say in how the organization operates. As an underwriting director, she was determined to streamline a consumer-lending underwriting process using innovative technology. She saw a way to make the process much more efficient and productive for bank branches that sell loans and for back-office teams that make sure those loans are underwritten and processed as quickly and accurately as possible.

She suggested an online paper-processing environment for faster turnaround, easier document retrieval and better data retention. She was even put in charge of the approved project. In its first year, the online underwriting process generated tangible savings of nearly $2 million. For her efforts, Ms. Stanley received $100,000 from her business unit senior management and an additional $100,000 from the company chairman.

Every year, HSBC's incentive and award team asks employees to identify what prize they would like to receive if they should win. The prize value is capped at $10,000, and it cannot be redeemed as cash, but other than these two restrictions, each employee is free to pick whatever prize he wants. Then, at the end of the year, after the winners have been identified by their performance, HSBC cross-references each winner to the prize he identified, shoots a video explaining why he won and why he selected his particular prize, and, at the big Dream Awards gala, the company plays the video and awards the prize. The number of these prizes varies depending on how many truly deserve it, but HSBC says it awards about a dozen of them each year.

More than 80 percent of HSBC's employees received an annual bonus or incentive reward in 2003, according to company reports. And many of the awards are given throughout the year, not just at the end-of-year gala.

Compensation Packages Offered to Employees during Downsizing:During downsizing or closing of a branch office, employees are at times offered different alternatives. Employees affected by these changes are asked to indicate their preferred option for the future. The options at times, given to employees are:

Alternative Employment Voluntary Redundancy Take a down grade

Analysis

After the in-depth study of the various Human Resource practices conducted at both United Bank Limited and HSBC, the following analysis was constructed;

HSBC, being the world’s second largest bank, is way ahead in ensuring that its HR policies are applied effectively and practically across. It efficiently combines lateral thinking with commercial understanding to deliver realistic HR solutions. UBL, on the other hand, realized the powerful tool of managing HR correctly, after its privatization. It would be wrong to state here that UBL had no HR management mechanism before its turning into a semi-autonomous entity; however, the HR’s role then was limited to an administrative level. The take-over by the new management and the changing trends in the banking industry compelled it to review its HR practices and realize the potential and power that this effective tool clutches with it.

Following is the detail of the extent to which several Human Resource functions like; Planning, Training and Development and Compensation are performed at the two banks, the pros and cons of each and the recommendations through which a change can be brought about in effectively dealing with the work-force in future.

Planning

Eminent practices at HSBC:

HR performs an integrative role in strategic decision making at HSBC. It provides the senior executive management viable feedback on the business strategy of the company and thus, plays the role of an internal consultant to all the major departments of the corporation. One of the major factors responsible for HSBC’s current standing and stature in the world is its tendency to integrate its practices with other corporations through acquisitions and mergers. HR Planning thus performs an important responsibility in managing such executions successfully. The bottom line in decision making related to HR Planning is to bring valuable customer base home which is not possible without considering work-force compatible with the culture of the host country. Even before allowing a merger or acquisition to take place, considerable thought is allocated to the

fact that HSBC has the necessary resources and options to initiate business. Mostly such acquisitions lead to the strategy of downsizing or cutting the labor force number at a particular branch. One of the remarkable features too mention here is the awareness forwarded to employees ahead of any major decision and an option to choose an alternative that makes it evident that HR is termed as an asset by the management at HSBC. This doesn’t mean that such awareness always brings in a complete air of satisfaction amongst the employees. One of the noteworthy aspects is the current dissatisfaction and displeasure expressed by the employees in UK as a result of the shut-down of a branch there. The affected employees are currently on strike and expressing dislike regarding the downsizing strategy. HR Planning also takes care of the cost-effective variable in HSBC’s strategy. It therefore, lists downs options that ensure the right balance between work-force requirements and their costs. Contractual jobs are allocated keeping in mind the above strategy. Another important feature evident in HR Planning at HSBC is its Affirmative Action Planning strategy that accounts for maximum participation and equal opportunity for people thus, minimizing room for racial, gender and disability biases. This is one of the basic requirements of current dealings in business and an opportunity picked up by a successful bank like HSBC.

Eminent practices at UBL:

HR Planning was not considered worthwhile before UBL turned into a privatized institution. However, to put the entire blame on the management in this regard would not be a professional approach. The trend of the banking sector in Pakistan was such that banks could easily perform without an active participation of HR in strategic decision making. However, the trend changed and UBL confronted cutthroat competition when the industry became vulnerable for foreign players. The market dynamics changed and it was considered to be in the interest of the bank to go private in 2002. The new management dealt well with the tool of HR mechanics and designed an effective planning function for its employees. The major turning point in its history was the privatization era when the management planned its huge downsizing strategy- the golden handshake, involuntary and mandatory. Although the management believed that they had conducted the practice fairly, our research shows that they might have been at fault. A visit to the Head Office right after the practice by an interviewer exhibits; On the face of it the apprehensions expressed by the affectees seem to make sense as the mandatory retirement at the UBL affected lower cadre officers more than the executives. Nevertheless, the post privatization era has given more room to HR Planning and has categorically organized it into different functions already discussed in the report. In addition to this, HR Planning is done by a very sequential design traveling through the reporting channel getting feedback from all levels. The pooling of labor-force is conducted on the basis of targets set for the next year after reviewing completely the potential of current and future employees. The forecasting and target setting is done as a result of periodic meetings conducted at all levels in all regions. This procedure again has some pros and cons, although the entire team gathers to discuss possibilities, yet the authority to take decision lies with the boss and thus, it’s not possible to judge here that suggestions of the employees would be catered for or not while taking the decision.

Training & Development

Eminent practices at HSBC:

HSBC offers extensive training to all its employees and addresses almost all areas of concern. The elaborated training manuals of HSBC highlight not only the opportunities at hand but also provide ample information to strike prospects for future. The employee development approach is positively catered for at the corporation. It would be worthwhile to mention here that HSBC encourages career building of employees not only for jobs at HSBC but also for any other potential area of opportunity. There are learning centers in different regions that address career planning and development. This unselfish attitude towards employee development proves that the corporation strives to improve and enhance the skills of its employees to serve at any place and at any time. The disability program exhibits the in-discriminatory attitude towards disabled people. The regular coaching of employees as well as the system of ongoing appraisals also proves to be effective in managing HR and preparing the employees for any unforeseen incident. The rotation program is perfect for the cross training of employees as the network is widely spread in all the continents of the world and business mechanism is invariably dynamic everywhere. On-line journals meant for learning and hands-on coaching also cater for the continuous improvement aspect of employee development and enhance the capability and potential of the employees. Choices program is another striking feature of HSBC training as it assists the employees to choose areas of their own interest. This helps to enable the air of interest and consent and enhances their motivational level on job. Profit making is just one small concern at HSBC; one of the priorities here is valued customers and employee development that is apparent from their highly structured training and development program.

Eminent practices at UBL:

The good point about the training and development issue at UBL is their timely address to the changing trends in the environment. There is no fixed training program that is offered on a regular basis to all employees, several courses (discussed in the earlier pages) are designed as and when needed for the employees. The duration of all such courses and workshops differs from one another. Certain teams like; Process

Improvement (PI) teams have also been made and have been proved to be successful to-date. The Road Shows and Town Hall Meetings have also been productive and thus have made the experiment successful. Such practices have accelerated since privatization. Before that, there used to be training programs that were repetitive and less dynamic. Then again, they had been observed to be suitable for the market practices of those times. The trend has changed tremendously now and therefore, the need of the hour is to term HR as an asset and not an operating expense. This statement is mentioned in the policy of the bank and it would be appreciated if it is implemented correctly. The career planning program for the employees is new at UBL and thus, would take some time before we start seeing change. As far as training is concerned things at UBL are improving rapidly.

Compensation

Eminent practices at HSBC:

As far as performance management is concerned the pay-for-performance strategy is critical. This strategy is followed successfully at HSBC. The combination of fixed-pay and variable-pay (benefits and commissions) has proved to be successful to-date and has helped enhance the motivational aspect of its employees to work harder. In this way, HSBC has claimed the envious position of attracting the very best pool of employees from its environment. The benefits are offered to all employees irrespective of their ranks or grades in the corporation and are characteristic of the performance level of its employees. Comprehensive Work/ Life Balance compensation packages are offered by the bank. Similarly Benefits Choice Program discussed in detail in the report also provides valuable compensation to the employees in return of their hard work. Merchant discounts, long service rewards, share save, retirement and savings program are all key area of HSBC’s compensation package. Great Ideas Program in which employees provide the management with suggestions for improvement is an impressive initiative. The employees are rewarded for their “valuable and viable efficiency and cost ideas for improvement”. The compensation offered during downsizing is also commendable but is not perfect. The management currently is facing with a dilemma in one of its branches, where the employees are on strike and are expressing their dissatisfaction over the downsizing step taken up by the management.

Eminent practices at UBL:

Compensation packages given to employees at UBL are not as attractive when compared to the ones offered by HSBC. The era of privatization was accompanied by a lot of anguish and dissatisfaction by the affected employees. The management claims that employees were offered decent compensation for their efforts before termination but

privatization was no less than turmoil for most. The UBL compensation program revised by the new management offers no post retirement benefits to the employees. However, the senior management tries to make sure that the senior employees are rewarded in some way for their lasting loyalty and dedication to their service in the bank. A program was initiated by the management for a few employees to activate their promotion as a thank you gesture to them in response to their life long effort to uplift the bank’s performance.

Recommendations

One of the major problem areas in HR Planning procedure at HSBC was found to be the dissatisfaction expressed by employees at their downsizing strategy. The alternatives that they currently provide suggest that the company does not want those employees. Although, it is impossible to take a decision that is 100 % perfect yet, the management should strive to take one having the least drawbacks. We recommend HSBC’s concerned department to take the employees into confidence well before announcing a downsizing scheme and should highlight the inevitable causes of downsizing. They should explain the alternatives that were available to the company. They should also provide the employees with better alternatives and the pros & cons attached with them. This would ensure maximum participation at all quarters and would minimize the dissatisfaction following a major downsizing attempt.

HR Planning department operates at the Head Office of UBL. Although, it works on the feedback provided by different regions while taking decisions, yet, it would be more feasible if the HR personal were present in every regional department. It would help the HR department to eye HR practices more closely than before and minimize loopholes.

Since privatization, UBL has revamped its training program, which looks good to an observer; however the HRM department needs to make sure that it is incorporated in the system. UBL should develop training manuals for employees. The training manuals should be company property but available to all of its employees. The Staff Colleges should also prepare course outlines aligned with the requirements of the present world. Such extensive training programs, if designed and implemented correctly by banking entities in the country would help in bringing forward HR as their core competency.

UBL should inhibit practices followed by global banking giants like HSBC in its training agenda. These could include more comprehensive diversity awareness programs, cross-functional training programs, enhancement through E-Learning to make sure that employees train themselves according to their respective

capability, choices program discussed in HSBC’s training overview and mentoring. Such activities are time-tested and successful. By incorporating such training and development programs UBL could emerge as a powerful banking enterprise proud of its HR assets.

The step towards bias-free training of employees at HSBC should be taken by UBL too. In this fast competing business-world equal opportunity rights should be provided and availed at all levels irrespective of race, gender and position. Equal opportunity CD-Rom is available for all employees at HSBC, related material should also be taken up by UBL, altered to the country’s culture and environment.

There is no cross-functional training program at UBL at present. Rotation programs at HSBC enhance employees’ cross-functional skills and help them to become better professionals. As the acquisition of skills has become the need of the hour, therefore it is recommended that UBL should pay attention to this area and address it properly.

UBL’s career training program is again a new step taken by the management after its privatization. This is a good step and should be encouraged and enhanced at all phases. This would not only open vast career opportunities for employees to move to higher ranks within the organization but also in the vast business profession. Such an opportunity would also cater to adjustments made incase of mergers, joint ventures or acquisitions.

Mentoring can prove to be very beneficial once it’s adopted carefully. At present there is no such flair for mentor-protégé relationship at UBL. There is a “We Vs Them” sort of an attitude over there. This also accounts to the fact that UBL has not come up as a learning organization after its privatization. Hindrances and obstacles are met with at different stages of interaction between old and new employees. Although, none can be blamed in this regard, yet a solution should be constructed minimizing such frustration in future. The old and new employees should be made to interact in a comfortable manner. An open door policy should be taken up by the management. The current system is a mix of both mechanistic and motivational structures; however, according to the changing needs of the bank, the reporting channel should be made more feasible for the employees. If such a program is encouraged, it would make interactions a lot friendlier and constructive in future, thus making UBL a learning organization in the real sense of the word.

TNA should be carried out on a more thorough basis. In the prevailing world, designing training programs only on the basis of feedback provided by managers would be insufficient. HRM Department should always be on the run to address any ongoing trend in the best way possible.

The employees should be given stock options to arouse their interest and motivation to perform even better. This would enable a sense of ownership in them and they would be willing to perform even better in future.

The benefits that are currently offered to the employees are based on performance appraisals filled by the managers (their bosses). The performance appraisal is not based on the 360° parameter; rather it is evaluated by a single supervisor. Such an activity may highlight an element of biasness or unfair practice and thus it is

recommended that the performance appraisal should be made more thorough and systematic.

There are certain benefits offered to only a few employees at UBL. It is thought that they out-compete others without them being evaluated properly. Such huge discrepancies should be abolished and a fair and impartial system of pay-for-performance should b adopted in order to avoid dissatisfaction at various levels.

Whenever the bank closes down its branch in the area where its not performing well. Such an attempt results in cutting off jobs from pay rolls of the bank. It is recommended that employees should be informed of any such step well before the activity and the affected employees should be offered proper compensation in the wake of such a happening.

HSBC offers a standardized application form. It does not entertain normal CV’s, which saves it time & money. UBL should also either completely switch to Online recruitment or at-least have standardized forms so that they can help in saving time and money and the employers don’t have to see irrelevant information.

HSBC follows succession planning. UBL should also follow that so that whenever a senior top management official leaves they know who will replace him/her and they don’t waste time or money.

Conclusion

Upon project completion, we feel that there is a lot of potential in the Pakistani Banking Sector to tamper with its Human Resource pool and exploit it to the maximum. There is no such thing as talent deficiency in this part of the world. The only problem is to find the best balance and incorporate effective HR practices in this field to reach the pinnacle of glory. It is difficult but not impossible. The point worth mentioning here is the fact that Banking Sector in Pakistan has dealt with big HRM challenges in the recent past and has acknowledged that HRM is a tool to gain a competitive edge in the market. Gone are the days when HRM was considered to be an administrative task. The two banks analyzed in this project both share the mindset that HRM in their respective organization is termed as an asset and not an operating expense.Thus, HRM is bound to open avenues of opportunities in the market for young leaders aiming to enhance their managerial skills to the maximum. By reviewing HR practices and improving the design manuals they can add wonders to this potential field. In a nutshell, the local entities should improve upon their practices by establishing top-of-the-line internationally acclaimed counterparts’ practices as benchmarks. This would lead to enhancement of their performance and enrichment of the banking culture of Pakistan.

Privatization of United Bank Limited- some additional facts

While the downsizing cost of Rs 6.9 billion at the UBL translates into an average individual payment of Rs 1.27 million the actual individual financial benefit would differ from employee to employee. However, compared to HBL where the number of executives retired mandatory and voluntarily adds up to 1,579 (1079 plus 500 respectively) the retirement scheme at the UBL include only about 390 executives while the bulk comprise of Grade III officers (54 per cent), Grade II officers ( 28 per cent) and the Grade I officers

(7 per cent) of the total 5,416 mandatory retirements.

PAGE visited the Head Office of the UBL a day after the mandatory retirement and talked to a number of officers whose services were terminated by the Bank. The terminated officers told PAGE that while the management chose to terminate their services unceremoniously, many of whom received the termination letters on the 13th to inform them that their services were not required from the 11th and they were not informed that how much they would be receiving in benefits.

A Grade II officer who had joined the Bank in 1975 as an Assistant (clerk) and had his first promotion in 1981 when he was elevated to Grade III and he was demoted 13 years later in 1994 to Grade II and his services were terminated. The management however chose to remain silent over how much would be paid and when?

The sacked officers and their lucky colleagues who were spared the mandatory retirement at the bottom ladder of the officer cadre said that after the deductions of loans availed, the affectees would only be getting a few hundred thousand rupees in financial compensation, the value of which has already been slashed by the 9 per cent recent currency devaluation and the 7 per cent income tax of any benefits that they would receive. They refuted the claims of the Bank management that 99 per cent of the affected staff would receive well in excess of their salaries adding that the lower cadre officers

would not be getting enough funds to invest in either business or many of the savings scheme.

On the face of it the apprehensions expressed by the affectees seem to make sense as the mandatory retirement at the UBL affected lower cadre officers rather than the executives.

According to the chart worked out by the UBL the average after-tax package for executives would be Rs 3.6 million for SEVPs, Rs 2.8 million for EVPs, Rs 2.68 million for SVPs, Rs 2.4 million for VP and Rs 2.13 million for an AVP. In case of Grade I, II and III officers it would be Rs 1.7 million, Rs 1.27 million and Rs 790,000 respectively.

The mandatory retirement scheme implemented by the UBL is no less golden than that of HBL, claimed the UBL management, as it said that the 99 per cent of the affected staff would receive well in excess of their current salaries, particularly the officers who could earn upto 72 per cent more take home salary per month if they chose to deposit the money at 16 per cent monthly rate.

However one would have to discount for devaluation and inflation. A chart worked out by UBL shows that the investment of money by the Grade I, II and III officers would fetch them 50 per cent, 72 per cent and 38 per cent more monthly salary than what they were receiving when they were laid off by the Bank. The same chart shows that a similar investment would bring 59 per cent more monthly income to an AVP, 52 per cent to a VP, 10 per cent more to a SVP while it would slash the monthly income of an EVP and a SEVP by 6 per cent and 26 per cent respectively. The investment scheme thus is not favourable to the affectees of the SEVP and EVP level who would be more inclined to invest their money elsewhere to earn atleast an equivalent of their monthly take home salary or more.

This also shows that while the two top categories of the executives would have more money to invest in other than savings schemes, the comparative smaller number — according to another chart shows that only 3 SEVPs and 10 EVPs were retired, of them will opt for real investment.

Questionnaire

Q How your HR department is linked with your strategic planning?

A Integrative linkage which became more prominent after privatization.

Q During human resource planning process which method of forecasting, if

undertaken for demand and supply is used by your organization?.

A Different regions are allocated budget and the regions are authorize to hire HRM

resource as per their requirements while remaining with in the allocated budget.

Q Has your organization resorted to down sizing and for what reasons?

A The main downsizing was under taken in 2002 at the time of privatization when

approximately 5600 employees were terminated under Golden Hand Shake.

Q What is your recruitment process? Do you recruit yourself or use the services of

any outside agency?

A The recruitment is carried by the bank using various methods like referral etc. The

bank has also contacts with placements offices of various universities like LUMS,

Quaid e Azam University and NUST. The bank has advertised for recruitment in

the news paper for the first time this year.

Q Do you promote the people internally to fill various vacancies vacated or carry

out recruitment externally?

A The priority is given to internal promotion for filling up of vacant vacancies. In

case of non existence of a qualified person external recruitment is also under

taken.

Q Do you advertise your vacancies in electronic as well as print media?

A The vacancies has been advertised in print media first time this year.

Q Do you utilize the services of public or private employment agencies for

recruitment?

A The bank utilizes the services of two companies i.e. Bayt, a mid east based

company and HRS (Human Resource Service), a Pakistan based company.

Q Do you carry out Training Need Assessment (TNA)?

A TNA is carried out at every level starting from branch till regional level. Starting

from branch every level informs its immediate level for necessity of training to be

carried out. The HRM then arranges the necessary training through Staff College.

Q How you arrange training for fresh inducted employees?

A There is no hard and fast rule. The fresh inductees are given on job training as

well as training at Staff College.

Q How do you socialize fresh inducted employees?

A Institutionalized socialization is practiced in the bank. After the privatization the

gap between the senior management and lower management has increased.

Moreover it is not a learning organization.

Q How much budget do you spare for training?

A Declined to give any information.

Q What is the time schedule for training of fresh employees?

A The new employees are called management associates and are given 1-2 years of

training.

Q How do you motivate your employee for under going training?

A Training is mandatory for every body. Training is arranged on collective rather

than individual basis. Whenever necessity of training is felt it is arranged.

Q What all actions do you ensure to create a learning environment in your

organization?

A Various workshops and seminars etc are arranged regularly to decrease the

existing gap between senior and lower management and to create a learning

environment

Q What training methods do you use for training of fresh employees?

A Lectures, hand on training, seminars and workshops are used for training.

Q What performance appraisal system do you follow in your bank?

A Branch managers appraise the branch employees, area managers appraise branch

managers and regional managers appraise the area managers.

Q What approach your bank adopts for measuring the performance of your

employees and why?

A Result approach is used for measuring the performance of employees based on

periodic results of MBO.

Q How do you obtain information about a particular employee during the process of

performance appraisal?

A Bosses and supervisors appraise their subordinates.

Q Do you give performance feed back to your employees after he has been

appraised?

A Performance feed back is given to the employees.

Q How do you develop your employee for future assignments?

A Development of employee is carried out through training courses at Staff College

and various job experiences in the bank.

Q What approaches do you adopt for employee development?

A Through formal education and assessment centers.

Q Do you have any succession plans and how do you go about it?

A Formally no succession planning is done however at informal level succession

planning is done to some extent.

Q How do you manage involuntary turn over of your employees?

A Branches which don’t meet the targets are closed making the staff surplus

therefore employees of those branches are per forced are terminated.

Q How do you deal with discipline problems relating your employees?

A Actions are taken according to Progressive Discipline

Q In case of any dispute among your employees, how do you go about resolving it?

A For resolving the disputes we proceed as per Alternative Dispute resolution.

Q Do you have any outplacement counseling system in your bank?

A No

Q How do you manage voluntary turn over of your employees?

A We try to retain our top stars by meeting their genuine demands like financial

packages.

Q Do you resort to profit sharing or gain sharing in your bank?

A We share our profits with our employees in the form bonuses.

Q Do you have “stock options” and “employee stock ownership plan” for your

employees?

A No