National Bank of Pakistan, RHQ (Rwp.

)
A report on National Bank of Pakistan, RHQ (Rwp.) in light of the course outlines of Principles of Management.

Course Instructor: Mr. Zonaib Tahir

Group Members: 1. 2. 3. 4. Hisan Asif Zia-Ul-Haq Shaban Akbar Irsalan Habib

TABLE OF CONTENTS

Overview of National Bank of Pakistan. .3 1. 2. 3. 4. Vision Mission Core Values Goal

Procedures of the National Bank of Pakistan.... 6 Selection, culture. Recruitment and De-recruitment. Training (planning and execution), Methods of communication. Leading and Controlling Decision Making Culture Managerial Roles Controlling Organizational Departmental Style

Execution functions. 10 SWOT Analysis... . 13

Note: The following document is a result of the transcription and interpretation of the audio recordings conducted at the NBP Regional Headquarters Rawalpindi. The policies and procedures of the HR department were not disclosed by the HR manager therefore, all the points discussed in the following report are subject to interpretation and are a result of the live audio recordings conducted during the interview. Furthermore, it is important to note here that the group has placed the recruitment and selection sectio n together in the execution of HR functions section due to scarcity of data.

National Bank of Pakistan

Overview of the Organization: The history of National Bank (NBP) can be dated back to its independence in 1947. The newly born country was struggling for improvement and with the increasing threat of resource management and absence of any monetary policies and with the country struggling for economic prosperity / independence, it was impetus to take the initiative of establishing a State Bank that would guide the country like a lighthouse in the sea and that would provide a financial resource management infrastructure for the country. The National Bank of Pakistan was established in November, 1949 under the National Bank of Pakistan Ordinance, 1949. The foundation of this infrastructure at such an early stage of development was also laid to provide an avenue against the continual devaluation of the Indian Rupee (1949). Throughout the course of time, National Bank of Pakistan has proved to be Pakistans No.1 Bank in both Public and Government operations by Moodys (AAA Rating, Long Term).

Overview of the Human Resource Department: The visit was conducted on April 25th, 2013 at the National Bank of Pakistan, Regional Headquarters, Rawalpindi through a reference of Zia-Ul-Haq (group member) in which the group met with Mr. Muhammad Iftikhar, the General Manager Human Resource in Regional Headquarters and for the Rawalpindi sector, which includes 67 Branches and over 460 employees. For a detail interview, the respected General Manager directed us to Mr. Aftab Gul, the Assistant Vice President in the Regional Headquarters. The policies and procedures of the HR department were not disclosed by the HR manager therefore, all the points discussed in the following report are subject to interpretation and are a result of the live audio recordings conducted during the interview. The group has discussed following points with the Human Resource department: Selection, culture. Recruitment and Derecruitment. Training (planning and execution), Methods of communication. Leading and Controlling.

There are five employees under Mr. Aftab Gul (AVP), the details of which are depicted in the following organogram: Table 1: Organogram of Regional Headquarters Rawalpindi: Muhammad Iftikhar
GM (HR)

Aftab Gul
AVP (HR)

Ikhlaq A. Khan AVP (HR)

Asad Iqbal
(OG-1)

M. Kafait Hussain
(OG-1)

Abdul Manan
(OG-1)

Irfan Sakhawat
(OG-2)

Ms. Sana Iqbal

(OG-2)

They have provided us with a detail report on the National Bank which included: the Mission Statements, Vision, Core Values, and Goals of National Bank of Pakistan Regional Headquarters, Rawalpindi. The following vision and mission statements are formulated by the HR department of NBP Head Office in Karachi. 1. Vision: To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices, and social responsibility. 2. Mission: NBP will aspire to the values that make NBP truly the Nations Bank, by: 1. 2. 3. 4. 5. Institutionalizing a merit and performance culture. Creating a distinctive brand identity by providing the highest standards of services. Adopting the best international management practices. Maximizing stakeholders value. Discharging our responsibility as a good corporate citizen of Pakistan and in countries we operate.

3.

Core Values: 1. 2. Highest standards of integrity. Institutionalizing a teamwork and performance culture.

3. 4. 5. 6.

Excellence in service. Advancement of skills in tomorrows challenges. Awareness of social and community responsibility. Value creation for all stakeholders.

4.

Goal: To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.

Human Resource Planning and Management falls within the domain of Human Resource Management Group, Head Office, situated at Karachi. Recruitment and Selection process is conducted by HR and Talent Hunt Teams and accordingly placed in Regions. Decision Making: The decision making in National Bank and HR department in particular are centralized in nature. All decision execution exercised by the department in light of the criteria as instructed by the top management at State Bank of Pakistan and National Bank of Pakistan at Karachi. Being a Government organization managers in NBP are symbolic, meaning that most of the organizations success or failure can be attributed to external factors outside of a managers control. How employees learn culture in National Bank: Employees learn culture in National Bank mainly through rituals, material artifacts and symbols, and more importantly through language. National Bank of Pakistan, like any other organization has its own set slangs in particularly in Punjabi that employees use to identify with specific work tasks or organizational routines. Old and memorable stories of a specific branch are also shared widely throughout the setup and communicated with employees. Dimensions of Organizational Culture: Out of the seven dimensions of organizational culture as discussed in the class, only two were found applicable on the National Bank of Pakistan namely, Attention to Detail and Stability. Attention to detail, because in a banking institution, employees, especially the managerial staff has to keep an eye on the entire banking operations. Specific instructions are also passed out by the SBP towards NBP for ensuring steps to keep an eye on the banking operations. Stability is also ensured throughout NBP. Managerial Roles are not performed by employees throughout NBP Branches because of its rigid and centralized structure with all the decision making and directives enforced by the State Bank and Banking Services corporation Pakistan. Furthermore, it is important to note here that from the Behavioral Theories of Leadership, National Bank somewhat follows the style as proposed by Chester Bernard, organizations are social systems, and the belief that managers should coordinate and stimulate employees high level of effort. Chain of Command: Considering the concepts of Chain of Command as discussed in the coursework, National Bank follows Authority and Unity of Command with the employees reporting only to one manager and authority is being exercised throughout the organization by the managers and respective department heads.

Controlling: For exercising control in a particular branch or even an RHQ, National bank relies solely on actual performance as expected by the directives by the SBP and Banking Services Corporation. Actual performance of branches is measured by the BSC and measured against the standards set out by BSC and the refined plans and procedures regarding the performance are then sent out for the respective managerial action for monitoring and controlling. Communication Style in NBP: National Bank and all of its branches follows a Chain Structure of communication with a the criteria as follows: 1. 2. 3. Speed: Moderate Accuracy: Moderate to High Employee Satisfaction: Moderate

Recruitment: 1. In the case of replacement staff a critical questioning of the need to recruit at all (replacement should rarely be an automatic process) 2. 3. 4. Newspaper Ads are also published with general guidelines for applicants and a specific criteria. Equally organization may seek help from 'head hunters', to recruit executives Recruitment should screen for suitability of applicants as poor selection costs a lot even for the mundane day-to day jobs 5. 6. NBP strictly follows merit policy for recruitment of employees in the bank. The pre-existing employees carry out an extensive on-the-job training for the new employees after they have successfully completed their course in the respective Staff Colleges. 7. The policy making body is the Head Office in Karachi that develops policies pertaining to Compliance, Human Resource, and Operations. 8. Clerical staff is not hired with effect from January 2011. Instead, people with a four-years Bachelors degree that can perform both, the clerical and managerial functions are now hired in National Bank. 9. The process of recruitment is carried in a manner that is similar to a continuous filtering process in which only the prospective candidates are hired. 10. An Equal Employment Opportunity Act in conjunction with the recently introduced Female Empowerment Act is followed to ensure that women get an equal chance to participate in all the hiring processes of the National Bank. 11. A special quota for disabled people has also been introduced in the National Bank to ensure that these people also get an equal chance of employment. De-recruitment: National Bank being a Government organization, does not follow a specific de-recruitment criteria. Employees (including managers) if caught by auditors or other supervisory staff are laid off for a month six months depending upon the nature of the issue. After resolving the issue the employees are restored back to their original status.

Negligence (on a higher scale) if found on the part of employees, the employees in this case are terminated from their respective appointments.

Table 2: Recruitment:

Recruitment

Advertising

Bank Sources

Institute of Bankers Pakistan

Sources of candidates: 1. Internal Sources 1. 2. All the Groups in NBP Special products divisions

2.

External Sources 1. 2. 3. 4. Industry Educational institutions Institute of Bankers in Pakistan HR Group Head Office Karachi

Selection: 1. As per requirement of the bank, the HR group circulates details of all the vacancies in all the branches through Regional HR Departments. Applications are screened of internal applicants and suitable candidates are called for interview after scrutiny.

2.

Table 3: Evaluation Criteria:

Evaluation Criteria

Personality Test

Interviews

Background Checks

Training (Planning and execution): 1. National Bank of Pakistan defines training and developing of employees in the following ways: a. Training is the systematic development of the attitude, knowledge, skill pattern required by a person to perform a given task or job adequately b. Development is 'the growth of an individual in terms of ability, understanding and awareness.' 2. 3. 4. Develop workers to undertake higher-grade tasks Provide the conventional training of new and young workers (e.g. as apprentices, clerks, etc.) Special training programs are arranged by Organizational Development and Training Wing headed by Executive Vice President Mr. Muhammad Hanif at NBP 5. OD&T Wing formulates education and training programs for all levels of employees from executives to lower management. 6. A two-tier training methodology is followed by the National Bank of Pakistan namely, the Medium and High level training. 7. Training sessions will include on-the-job training, classroom training, conferences, and seminars.

Reward System: 1. At present, salary structure of NBP employees is much better than its competitors. Besides basic pay, following allowances are also paid to employees irrespective of their grade or scale 2. 3. House Rent Allowance (50% of basic pay) Conveyance Allowance (minimum 90 liters of petrol to clerical staff, 120 liter OG-III, 130 Liters OG-II, 140 to OG-II, 240 TO AVP and so on.).

4.

Utility Bill Allowances, Education Allowances, Medical Allowances (for medicines), Maternity Allowances.

5.

Spot Cash Awards are awarded for extraordinary counter service or adopting precautionary measures to prevent frauds/ forgeries.

6.

Every year, best performers are awarded with cash awards ranging from Rs. 100,000/-to Rs. 500,000/depending on the grade of the employee (Special Cash Awards). Mostly managers are benefited from this award to motivate them for procuring more business.

7.

Employees (AVP and above) get annual increase in their basic pays depending on their performance, cost of living with increase rate varying from 4% to 17%

8.

All other employees get their annual increase as per rate announced by the Head Office irrespective of their performance

9.

However from the year 2009, concept of "Pay for Performance" is implemented in NBP for all the officers and executives

10. Special loan facilities for all the employees of the National Bank of Pakistan are also provided.

Execution of the Human Resource Functions: Recruitment & Selection: 1. We advertise in which the criterion is given. For example, 3.0 GPA. The applications are received through mail and are also received / advertised through email, etc / online applications forms. 2. No interviews are conducted in the internal selection process rather, a small panel (usually of two executives) conducts the interviews of the prospective employees. Lower grade officers (usually Grade 1, 2, and 3) are not interviewed. They are promoted upon recommendation. The recruitment is done only at the Head Office level and the employees are then posted to the respective branches falling under jurisdiction of respective Regions with their branches informed of their arrival. 4. Clerical staff is not hired. Instead, people with a Bachelors degree that can execute both the clerical and officers functions are hired by the HO. 5. The process of recruitment is simple. After the submission of applications, the candidates the screened on the basis of CGPA and age, some people might have some Domicile issues and are therefore dropped out. The candidates are then screened on the basis of a written test after which the potential candidates proceed for their first interview. The outstanding candidates are then hired. The criteria is lowered only in the case of shortage of the candidates.

3.

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6.

Equal Opportunity Employment Act and Female Empowerment Act (in the Musharraf era) is strictly followed in NBP and women are encouraged to join the Bank. A woman would be hired readily if she falls within the criteria as laid down by the National Bank. The current panel of Board of Directors of National Bank include a woman, Haniya Shahid Naseem which clearly exemplifies the fact that National Bank of Pakistan does not discourages the participation of women. There is a quota for disabled personnel as well.

Training (Panning and Execution): 1. There are two levels or tiers of training in National Bank of Pakistan. These are the Medium and the High level training tiers. 2. The mid level training is given to the fresh graduates and the training aspects mainly include courtesy and mannerism when it comes to customer dealing. The prime focus in this training is customer dealing. 3. Staff Colleges, situated at Karachi, Lahore, Islamabad and Peshawar, impart preliminary training and orientation sessions before Field Training / or On-the-job training is done as well. 4. Curricula and Scope for training of functions like HR, Operations, Audit & Inspection, Compliance, is designed by the Training and Organization Development Group at HO Karachi, and then they are communicated to the respective Staff Colleges and Members of Directing Staff posted therein. They are also responsible for checking how much and what amount of support is required by the employees at the respective Branches. 5. The High level training includes training the managerial staff to meet the challenges and the targets as conveyed by the RHQ and the Head Office in Karachi. For example, if a certain Branch has a deposit of Rs. 31 Crores, the HO can give it a target at the start of the fiscal year i.e. January to meet the target by the end of the fiscal year i.e. December. These statistics are studied and projected by the RHQ s and the Head Offices in Karachi for all of the 1406 Branches throughout Pakistan. 6. The training sessions in National Bank of Pakistan include on-the-job training, class room training, seminars, and workshops. 7. For Management Trainings, JNMDC (Jameel Nishtar Management Development Center) Karachi, under the umbrella of Training and Organization Development Group, is specialized in imparting skillful and handy Management trainings among Managerial Staff of the bank. On the-job training is provided to the staff at managerial and middle level tiers of all the Branches throughout Pakistan. For this purpose, National Bank sends prospective employees to Staff College in Islamabad where they undergo detail oriented classroom training sessions. These training sessions include a general coursework with a specific number of students in a particular class. The employees are then divided into groups and presentations and the related classroom work is conducted in the college. The students (employees) undergo a final examination and are reverted back to their respective Branch where after a year, they are promoted (depending upon their recommendation and performance). Like all organizations, the basic purpose of training the employees is to fill gaps throughout the organization that can be covered through a medium training session and that can aid in bringing all the employees on the same level, regardless of their backgrounds. Conferences

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are conducted on a regular basis for the mid and higher management while seminars are conducted bi-annually for the lower management. Promotion: 1. No written tests are conducted. Rather the executives are interviewed under a small panel (usually from the same organization and the questions are asked according to the pre-existing job portfolio of the candidate). The interview panel consists of only three to four interviewers. 2. Officer Grades like grades 1, 2, and 3 are not interviewed rather, they are promoted directly upon recommendation under certain promotion policy. Executive Cadre, starting from Assistant Vice President (AVP) and Equivalent to Basic Scale 18/19 and above are interviewed by Head Office Team of cross functional areas of the bank and promoted upon recommendation made by them to the President. 3. Referrals are highly encouraged in National Bank and the Bank avoids external hiring or outsourcing as a policy. Rather, the people upon recommendation are just promoted to higher positions. 4. The interview panel is briefed in detail before they can conduct the interview. A short on-the-spot training session is conducted for the interviews with the aim of guiding them in asking the appropriate questions from the candidates, etc. 5. Three years is the minimum duration before an employee can be promoted to next grade up in Hierarchy. The total service is also taken into account before promoting the employee to a managerial position. Sometimes it might happen that an employee is performing well but he or she would not be promoted because he or she might not have sufficient experience in the organization. Analysis of National Bank of Pakistan

Strengths

Weaknesses

Opportunities
Strengths:

Threats

It is among the first banks of Pakistan with experience that cannot be compared with any other public or private sector banks. Moreover, the main strength of this bank is its support from the State Bank of Pakistan and its ability to process large transactions making it the most favorable bank for the business minded.

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National Bank with its 1451 Branches is undoubtedly having the most extensive banking network covering the Northern Areas of Pakistan i.e. Skardu, Gilgit. The constant up gradation of branches from manual systems to Online has aided in processing and retrieving vital customer information and has also supported the employees and work staff in updating these records. Moreover, financial transactions can also be processed easily.

The biggest asset of National Bank is its culture and Branches located in remote districts throughout Pakistan. Although it might feel awkward, but the Branch staff is usually posted on the basis of their region i.e. to the area to which they belong. There is no restriction on wearing shalwar kameez or coat. The working environment of the bank is very cooperative and supportive. With the induction of new young enthusiastic staff, the management trend is changing and managers are now following the principle of Management by Walking Around. It has created a fair, friendly and family atmosphere among the banking staff.

Weaknesses: NBP is a public sector bank and therefore it needs to monitor its all control mechanisms instead of encouraging favoritism, which indoctrinates the feeling of inequity and injustice among other employees. National Bank needs to adopt competitive marketing strategies although it is having a huge customer base. Political pressure is one of the negative aspects that have constantly damaged the performance of the bank. Payment of unjustified loans to various people, writing off bad debts, employment of unqualified people etc. are the few outcomes of political pressure due to which injustice is felt among employees and efficiency and performance of the bank is reduced. Opportunities: Due to increase unemployment in the economy the huge pool of awaiting candidates is available with the National Bank to select its employees from. Although National bank has adopted various strategies to adopt newly graduated BBA and MBA individuals for the positions of second grade branch officers, still the process needs to be streamlined and refined. The world is progressing at a fast pace. Therefore, it is the duty of SBP to upgrade the database and similar other management systems so that National Bank can come at par with other domestic and international banks. National Bank has more than 45 branches in more than 29 countries worldwide. The initial purpose of these branches was to assist the Pakistani delegations and handle embassy related issues. For the purpose of

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gaining strength worldwide, National Bank should adopt a strategy of free banking system worldwide with minimum constraints. Threats: Increasing advancement of technology and its adoption by the foreign banks has impacted the market. If timely action is not taken by the NBP to develop its technology it will be left far behind in competition. The government should adopt a policy of restraint on the part of hiring of politically appointed individuals so that the workload is evenly distributed. Suggestions: NBP is a public sector bank and therefore it needs to monitor its all control mechanisms instead of encouraging favoritism, which indoctrinates the feeling of inequity and injustice among other employees. National Bank needs to adopt competitive marketing strategies although it is having a huge customer base. Political pressure is one of the negative aspects that have constantly damaged the performance of the bank. Payment of unjustified loans to various people, writing off bad debts, employment of unqualified people etc. are the few outcomes of political pressure due to which injustice is felt among employees and efficiency and performance of the bank is reduced.

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