COMPENSATION PRACTICES AT NBP

Principal Author:
FARHAN SHAFIQ BBA-FA10-030

Interview From:
General Manager Operations Mr.JAHANGIR
OG I officer Mr.Shafiq-UR-Rehman

BY:
FARHAN SHAFIQ





GROUP MEMBERS:



BASHIR BBA-F10-
FARHAN SHAFIQ BBA-F10-030
NASIR BBA-F10-
Zainab BBA-F10-
















HR Mission:
Provide more talented Human Resource in all NBP functional areas in relation to
competition keep motivated all the employees and maintain total industrial harmony.
Values:
NBP believes that;
People make the organization
People collectively yield results
People have ambitions and aspirations to be distinguished and rewarded
People form the human capital to be developed and invested in.


Dr. Mirza Abrar Baig
Group Chief /SEVP
HUMAN RESOURCE MANAGEMENT & ADMINISTRATION GROUP
Moizuddin Khan
EVP/Divisional Head
Training & Organization
Development Division
Muhammad Hassan Khaskheli
EVP/Divisional Head
Personnel & Industrial
Relations Division
Mohammad Iqbal Qasim
EVP/Divisional Head
Sports, Culture & Corporate
Social Responsibility Division
Qamar Hussain
EVP / Divisional Head
HR Division
Muhammad Afsar
SVP / Wing Head
Recruitment, Outsourcing &
Regulations Wing
Muhammad Hanif
EVP / Coordinator
HR Special Projects
Fazal-ur-Rehman
EVP / HR Coordinator










HR DIVISION

The goal of the HR division is to prepare professionals who work in the National Bank
Of Pakistan to deal with the complexities and challenges of HR and managing today's
workforce. The division is headed by EVP who is responsible to ensure that the latest
HR tools are implemented within the organization. His core responsibilities are to
implement:
1. Specific HR functions include:
- Recruitment and selection in the banking system
- Employee development and Training
- Benefits and Compensation
- Employee Evaluation
2. Strategic HR Management
3. Managing Strategic Change
4. Conflict Resolution
5. Globalization and its impact on Human Resources management in NBP
6. Customer Services in the Banking System (CRM)
7. Synergetic Decision Making
8. Leadership as a key factor in Human Resources Development
9. Team work


Compensation and Benefits:
The Bank gives an attractive package. Their basic salary starts from 27000. They avail
other benefits such as interest free loans; employees are also sent abroad for training
conducted in foreign countries. There are a lot of chances for internal promotions, which
motivates employees into working hard to progress and achieve advancements.
For example, the OG2 officers have greater chances of getting promotion after 3 years
and becoming the branch managers; that is OG1. This culture of promoting employees
internally motivates and encourages NBPs current employees to work hard and
achieve their targets. This is part of their internal promotion program, where the
potential candidates go through the tests for promotion. They are commonly referred as
the Talent Pool.
The employees pay package is revised every 2 years. The raise is about 10% to 15%,
depending on the inflation prevailing in the country. There is also an increase in the
benefits provided to them






Competitive Wage Policy
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. House Rent Allowance (50% of basic pay)
3. 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
5. Education Allowances
6. Medical Allowances (for medicines)
7. Maternity Allowances

Spot Cash Awards:
They are awarded for extraordinary counter service or adopting precautionary
measures to prevent frauds/ forgeries
Special Cash Awards:
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
Mostly managers are benefited from this award to motivate them for procuring
more business
Annual Increase:
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%
All other employees get their annual increase as per rate announced by the Head
Office irrespective of their performance
However from the year 2009, concept of "Pay for Performance" is implemented
in NBP for all the officers and executives
Loan Facilities
Motor Cars for Branch Managers
Promotions


MOTIVATIONAL TECHNIQUES
Human motives are based on needs consciously or sub-consciously filled in
individualistic hierarchical order. Generally motivation includes the entire class of drives,
desires, needs and wishes, all of which are different for different individuals and further
differ in their importance at various times for the same individual. Managing employee
motivation is always an extremely complex task.
To continuously enhance the level of performance of employees and attain the optimum
level for ensuring growth of the organization, it is the primary responsibility of all HR
practitioners to continuously maintain employee satisfaction and high motivation levels.
The NBP utilized all HRM tools for enhancing employees motivation thereby
contributing to banks record growth. Some of the steps NBP has taken to improve the
motivational level of its employees so that they can contribute best to the organization,
are:
With increase in Banks profitability, NBP shared this gain with employees
through raising their salary by almost 200% since 2002 and it is again
going to be reviewed effective 2010.
For employee motivation, 99% of employees were promoted to higher
grades. Almost every employee has received either one or two promotions
and in some places three promotions. This step was taken to satisfy the
genuine aspirations of the employees which is unparalleled its
uniqueness, unseen in the banking and other industries in the country.
Education, health, loan facilities, highest in the industry by:
Introduction of various new benefits and extension of existing
benefits to the employees in the areas of medical and other
allowances.
Record increase in House Building and Car Loans in last two years.
For Top Performers, Performance Bonuses to create high performance
culture in the Bank.
To secure future of the Bank, hired 1000 MBAs on merit (300 being
females 30%).
Initiated Talent Hunt Program which enabled talented employees (about
500) within the Bank to take up key positions and provided great
encouragement by opening new avenues for the existing employees
based on merit for key internal and overseas postings
Improved Employee Communication through NBP Newsline, Management
Brief, Presidents Dialogue Sessions, Employee Communication Program
etc.
Employment to the children of the retired and deceased employees.
Regular increase in the pension of retired employees to give them a
feeling that NBP care for them even after their separation.



Promotions & Career Progression:
For employee motivation, 99% of employees were promoted to higher grades in the
recent past. Almost every employee has received either one or two promotions and in
some places three promotions. This step was taken to satisfy the genuine aspirations of
the employees which is unparalleled due to its uniqueness, unseen in the banking and
other industries in the country.
Promotion of employees who perform well are made strictly on the basis of merit and in
the most transparent manner. Such promotions have been made a regular feature so
that high performing employees are rewarded and their efforts in the growth of the bank
are recognized.
Employee Compensation:
Pay Packages 2004, 2006 and 2008 were negotiated and implemented to the complete
satisfaction of the employees and in the best interest of the Bank. This was a major
accomplishment in view of the highly charged intra-union and inter-union rivalries
compounded by the transition of HR responsibilities.
Liberal payouts of Profit Bonuses were adopted to provide a sense of participation
amongst the employees in achieving high profits. Besides the favorable packages, staff
loans benefits have been improved through enhanced financing limits and reduction in
mark-up. Pensionary Benefits were enhanced to retired employees or their widows to
emphasize banks tradition of employee care. To ensure compensation levels of bank
employees in relations to the market, salary surveys have been conducted and salary
adjustments are being made wherever required
Achievement & Spot Awards:
A merit based culture has been established in the Bank through implementation of
achievement and spot awards for individual employees showing exemplary
performance during the year or in an assigned task. The achievement award policy of
the Bank is a transparent system for rewarding high performing employees through
achievement awards to 10% of the total employee strength every year. The policy of
spot award is basically for recognizing individual employees for their one-off excellent
performance.



Performance Appraisal System & Pay-for-Performance:
Performance Appraisal System has been revised to replace the traditional subjective
ACR to provide more objectivity in evaluation and recognizing merit. This system has
been implemented with effect from January 2007 for all executives and contractual
employees. Based on the evaluation of individual employees as per their performance
appraisal a system of pay for performance is being implemented to properly
compensate relatively high performing employees thereby strengthening the merit
based culture

Performance information Source:
The immediate boss (The Manager) writes this report every year when performance
appraisals are due. The manager is chosen because he has all the information about
the nature of the job and the employee performing the job. The manager does not
consult his peers or the employees for information on employees performance. This
report is submitted on 31
st
Dec every year. The written documentation is forwarded to
senior managers for promotions and pay-raise. Based on these documentations,
managers decide their employees professional fate. This system however has greater
chances of biasness and favoritism and for this reason NBP is planning to introduce the
Bell Curve Method for employees evaluation.
The employees have their own intranet, which is only used to emailing purpose. The
intranet however lacks other information which employees should have access to.
Conflicts and its Resolutions:
Conflicts lead to a non-conducive and unfriendly environment. They should be avoided
at all levels, and if they do take place, there should be a quick remedy for it.
At NBP, there are no formal committees or teams made to resolve such issues.
Conflicts do take place, but these issues are not dealt with a formal procedure. When
there is a conflict between managers or a manager and his subordinate, the parties to
the conflict try to resolve the issue at their own level, without involving higher authorities.
If the issue isnt resolved at this level, branch manager is involved. If the branch
manager is also unable to solve their issue, then the problem is taken to the head office,
which tries to resolve the issue. In most of the cases, one of the employee is transferred
to other branch to minimize the contact with his previous manager.




Leaves :
Privilege Leave (PL) 30 days per annum:
Thirty (30) days Privilege Leave per annum is allowed to Executives / Officers and PL to
be availed within a year on becoming due. The maximum relaxation of 90 days is
allowed to avail the leave in the following years.
Casual Leave (CL) 20 days per annum:
Twenty (20) days Casual Leave is allowed to Executives/ Officers per annum and un-
availed Casual Leave up to a maximum of 15 days is allowed to be encashed, to OG-I,
II & III at the end of the year.
Sick Leave (SL) 18 days per annum.
Eighteen (18) days sick leave is allowed to Executives/ Officers and Un-availed Sick
Leave accumulates and becomes part of the Leave balance.
Special Leave (for Female employees):
On the death of her husband, a female employee may be granted Special Leave on full
pay, when applied for a period not exceeding 130 days. Such leave shall not be debited
to her Leave account. The Leave shall commence from the date of death of husband of
the employee and for this purpose, along with her application for special leave, or if that
is not possible, the said certificate may be furnished to the leave sanctioning authority
separately.
Maternity Leave:
A Female employee may be granted maternity leave on full pay, outside the leave
account, to the extent of ninety days in all from the date of its commencement, or forty-
five days from the date of confinement, whichever is earlier
Maternity leave may not be granted for more than three times in the entire service of a
Female employee. For confinements beyond the third one, the Female employee would
have to take leave from her normal leave account.