Human Resource Management SYSTEM of National Bank of Pakistan (Part 1)

Posted by admin on June 25, 2012 in MANAGEMENTNo comments

Executive Summary National Bank of Pakistan has an existing Human Resource development department, which operates to increase the existing skills of the people existing or coming in the organization, in order to achieve its objectives in a more efficient and effective manner. NBP has devoid two basic training techniques. First is related to the training and development of mid term plan, regarding new clients & middle level employees. Secondly, the training & development for long term plan, regarding the career development of higher level employees. BP applies on-job and off-job strategies to train its employees (middle & higher level).NBP training & development academy advises Job rotation to ensure & facilitate the producing of all rounder. The source of this assignment confirms the availability of the training plan at least 2 months before the commencement of New Year, in order to make it easy for the socializing and orientation of the new employees. NBP believes in pre-post training test for existing employees & post training test for new employees. The trainees will be required to submit back-home action plan, which will be followed up by the JNMDC/Staff colleges. These plans will help in evaluation and end use of training. Company Introduction: It gives me great pleasure to exchange a few words about the banks performance. NBP continued its journey of success based on our strategy of serving clients better. a company agile enough to take advantage of its unique domestic and international footprint, capitalizing on the largest balance sheet and customer base in Pakistan with high cross sell potential. Our standalone AAA rating (the highest in the industry), our ROE, which is amongst the highest in the Asian Banking industry, and our comfortable capital adequacy ratios, position us well in front of our competitors for future growth. Year 2007 was an outstanding year with the bank recording the highest profit in its history. Our wide range of product offering, large branch network and committed workforce are some of our fundamental strengths that enabled us to achieve exceptional results in a very competitive market. The pre-tax profit increased to Rs. 28.06 billion, an increase of 6.6% over last year. Earning per share jumped by over 11.6% from Rs. 20.88 in 2006 to Rs. 23.34 in 2007. Pre- tax return on equity stood at 45.9%, whereas pre-tax return on assets stands at 4.1% and cost to income ratio of 0.30 remained one of the highest in the sector. These results were possible despite the fact that NBP had to make additional provision of over Rs.3 billion as a result of withdrawal of Forced Sales Value (FSV).This year NBP also availed the offer by Government of Pakistan to redeem up to 10% of its holding in NIT units held by the bank under Letter of Comfort (LoC) arrangement, this sell off resulted in a Capital gain of Rs. 1.8 billion. Increase in pre-tax profit was achieved through strong growth in core banking income. Net Interest income increased by Rs. 3.5 billion (11.5%) due to better yields and volume driven growth spurred by increase in consumer loan portfolio. Dividend income and Capital Gains also made a healthy contribution as it increased by Rs. 371 million and Rs. 1,145 million over 2006 respectively mainly owing to higher dividends from NIT Units as well as Capital gains recorded on sell of 10% NIT Units. Advances increased by Rs. 25 billion due to

impressive contribution by all business units. Deposits increased by a healthy Rs. 90 billion or 18% over last year. The banks NPL provision coverage ratio also stands at an impressive 84%.

Vision of National Bank of Pakistan To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility Mission of National Bank of Pakistan NBP will aspire to the values that make NBP truly the Nations Bank, by: 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 where we operate Core Values Highest standards of Integrity Institutionalizing team work and performance culture Excellence in service Advancement of skills for tomorrows challenges Awareness of social and community responsibility Value creation for all stakeholders Goals To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products 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. HR Values We believe 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.

Organization Hierarchy Chart

Structure of HRM Department HRM Process inNational Bank of Pakistan: National bank of Pakistan has existing human resource department, which operates to: Increase the skills of the existing employees New recruitment and hiring in the organization HRM system consist of following activities: Recruitment & Selection Training & development Compensation & benefits HR Planning and Forecasting: Determine the organizational goals Scan the organizational environment Set strategic goals Formulate the strategic plan Course of action is designed Steps of planning process in NBP Determine the objectives Define required skills to meet the objectives Determined additional human resource requirement Develop action to meet the anticipated human resource needs

Forecasting:

Zero Barrier Forecasting Bottom-Up Approach Use of Mathematical Model Simulation Induction Plan

Agriculture field officers (AFO`s) Customer facilitation officers (CFO`s) Management trainee officers (MTO`s) Cash officers (co`s) Relationship Managers (RM) (Competitive examination through SBP/Ibp)

Employees Recruitment & Selection

Recruitment Plan

Direct from quota system Indirectly by bank management Training and development NBP has development group called organizational development and training group Four staff colleges are operating under this group in Lahore, Karachi, Islamabad and Peshawar The training is mostly carried through seminars , work shops and mostly on the job training

At the time of the introduction of the employee he is given the initial training in Institute of Bankers of Pakistan (IBP). After that they are posted to their respective jobs. National Bank of Pakistan follows two forms of trainings First is related to the training and development of new and mid level employees Second is the training for long terms plans, regarding the career development of higher level employees NBP applies on-job and off-job strategies to train its employees NBP training and development academy advices job rotation to ensure and facilitate the production of all- rounder employees. Training program started at least two month before the commencement of the New Year, in order to make it easy for the socializing and orientation of the new employees. NBP believe in pre/posttests for the existing employees and post training test for the new employees. Training Calendar Training catalogue Training course module / schedule Out coming (Need Based) Feed back analysis Quiz competitions Short, Medium, Long terms workshops, seminars, courses Data Reportings Performance Management In performance management factor there are certain aspects about which Nation Bank takes special care, these are: Professional Knowledge Improving corporate culture Decision making ability Ability to visualize and plan Ability to act in emergent situation Ability to implement decisions Ability to guide and create team work Communication skills Customer relationship Acquaintance with technological improvement Performance Evaluation: An employee do not has any right and access to the Annual Confidential Report (ACR). But he or she informed, so that he or she can rectify/improve his or her shortcoming if any After ACR paper work, it is enter into data base by HR On the basis of the evaluation, benefits are offered in term of promotion, reward etc. Health and Safety A different type of compensations includes:

Medical Insurance Sick Leave Vacations Provident and Pension Funds Promotions Overtime pay Profit sharing Travel/Meal/ Housing Allowances House and car loans Yearly 3 bonuses Performance award in cash Labor Management Relations: The society of labor is formed within NBP, which functions with the help of management, so form a good relation and provides: Immediate relief to any accidental causality Some benefits to on job decreased Arranges variety shows for the families of the employees Arrange educational funds or benefits for the employees

SWOT Analysis of NBP

STRENGTH: Nationalized Bank Largest Branch Network Strongest Capital Structure Monopolistic Hold Public Confidence Experience of Operation Easy access to the customers WEAKNESSES: Poor performance of the workers Untrained staff and week customer handling Favoritism and Nepotism Lack of coordination Unpleasant working environment Traditional Approach Lack of IT infrastructure & less No of Online Branches Burden of running extra number of branches OPPORTUNITIES: Electronic Banking Leasing Business Network in foreign Countries Gain Economies of Scale THREATS:

Globalization Increase in competition Privatization Political instability in the country Lack of inconsistency in Governments policies

Challenges faced by HR Manager Working with people of different cultures Managing workforce diversity Helping employees balanced work life conflict Up gradation of employees according to the environment Cost cutting Employees job Requirement Management Trainees for General Banking, Corporate & Investment Banking, Credit, Risk Management, Compliance, Commercial & Retail Banking and Treasury Management MBA or equivalent degree (Finance/General Management/Marketing Banking). Management Trainees for HR MBA/MPA or equivalent degree in Human Resource Management. GPA Requirements:- Minimum GPA.3.0 out of 4 or 3.7 out of 5.0 where GPA system is applicable, where GPA system is not in practice candidates must have secured a minimum of 70% aggregate marks in the examination. Only those who have already received final results are eligible to apply (Executive MBAs are ineligible). Age Limit:-Maximum age limit 26 years as on 31.07.2009. Compensation:-Management Trainees will be appointed as Officer Grade-Il in regular cadre and will receive a gross compensation of around Rs.30,000I- per month plus bonuses, liberal perks and end service benefits. Training & Development:-They will receive comprehensive training in banking and management to groom them as professional bankers. Career Growth:- Management Trainees on completion of three years will be promoted as Officer Grade-I and in next three years as Assistant Vice President on the basis of their performance. Selection Process:- Candidate will be required to appear for written test on the pattern of GMAT/GRE. Successful applicants will participate in group discussion and final interview. Career opportunity in NBP NBP maintains its position as Pakistans Premier Bank with a network of over 1200 branches locally, 18 overseas branches, 1 Subsidiary at Almaty (Kazakhstan) and 11 Representative Offices all over the world NBP also have a Joint Venture with UBL at U.K., with the name of Pakistan International Bank (UK) Ltd., with seven branches at Main Branch, London, Manchester Branch, Glasgow Branch, Bradford Branch, Sheffield Branch, Birmingham Branch and Knightsbridge Branch (London).

The Bank has employed more than 15,000 people world wide. The various departments include: Consumer Banking Corporate Finance Investment Banking Agricultural Banking Transactional Banking Operations Software Development and Automation Financial Control Treasury Internal Audit Risk Management & Credit Economic & Business research Training & Development Strategic Planning Human Resource NBP offers unlimited opportunities to its employees for continuous personal and professional growth: 1) Change Management Program: NBP has started an ambitious Change Management Program to further train its employees to meet the challenges of present day requirements. 2) Training of new staff: Training and development are the core issues of HR, which will ultimately improve our customer service and help us attain the standard of a progressive bank. 3) Benefits: Besides a competitive financial package, we offer excellent working conditions, job satisfaction, superior leadership, and a conductive environment for growth. Recommendation Employees should be involved in decisions affecting them Promotion and reward system should be fair Introducing new and efficient products Total quality approach should be used Training should be according to assessed needs Creation of enhanced performance appraisal system Job rotation and job enrichment for employees Improve communication skills Aggressive marketing strategy in banking Institutionalization of HRM Research and development facilities must be improved New Talent/ professionals should be hired Public relation desk should be established in each and every branch Conclusion: NBP is the employer of choice. The whole NBP family comprises of committed and dedicated members with passion to serve in their respective functional areas. The Bank has challenging work environment where merit and performance help the individuals to explore their true potential. As a caring employer the Bank enables the employees to excel and grow in highly congenial employment conditions and culture. The career path is full of challenges and opportunities. The Bank has absolutely open culture where members share and communicate freely.