Chapter 1

Introduction

1. Banking History:
Banking is one of the most sensitive businesses all over the world. Banks play
very important role in the economy of a country and Pakistan is no exemption. Banks are
custodian to the assets of the general masses. The banking sector plays a significant role
in a contemporary world of money and economy. It influences and facilitates many
different but integrated economic activities like resources mobilization, poverty
elimination, production and distribution of public finance.

1.1 Commercial Banking in Pakistan:

The interesting point which I observed during the span of mine internship was the
historical background of Banking & Financial sector which is the one in which
great improvement and growth is observed since the formation of Pakistan. For studying
the growth of this sector we can divide it into three stages, which are as follows:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era

Pre Nationalization Period:

There were only two Muslim banks in Indo Pak before partition, they were; Habib Bank
Ltd. (estd. in 1941 at Bombay) & Australia Bank Ltd. (estd. In 1944 at Lahore). All other banks,
at that time, were either owned by Hindus or Foreigners.

At the time of partition there were 631 bank branches in area which came under Pakistani
control. But due to bloodshed and violence at large scale, mostly branches were closed
and the disparity can be assessed from the fact that on July 1948 there were 195 branches
with deposits of Rs.88 crore (880 million) only.
Also a factor lagging in Pakistani industry was a central bank of its own, by that time
Reserve Bank of India was acting as central bank for both countries and same currency
2

notes were used in both territories. But Reserve Bank of India was biased and Set down
Pakistan on many occasions such as the issue of funds transfer etc.
In this period drastic steps were taken in government sector for the improvement of
overall position. The private sector also responded to these changes and some very
positive changes were observed. Some of the steps taken by the government in this regard
were as under:
1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.
2) Setting up of National Bank of Pakistan in November, 1949 to control the
'jute' export in East Pakistan and to act as agent of SBP.
3) Larger powers were given to SBP through SBP Act (1956) for controlling purposes.
4) Banking Companies Ordinance 1962 for protection and guidance to banks.
5) Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952);
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).
These were the steps, which built a strong banking sector in Pakistan. This is also obvious
from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan
and all over deposit position was around Rs.2300 crore (23,000 million). A bird eye view
of 5 top banks was as given below:

Nationalization Period:
On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act
1974. Under this law all Pakistani banks became a public property. All small banks were
merged in bigger banks to create 5 major Pakistani banks Pakistani banks.
These banks were to control by Pakistan Banking Council. There are still controversies
about this act of government as whether it contributed in success of failure of banks.

However the major changes after nationalization were as follows:

Working of banks was extended to under developed areas.

Market expansion for credit and deposits.
Decrease in service level of bank officers.
Decrease in profitability as well.

Post Nationalization Era:

In 1990 the government decided to denationalize all the nationalized institutes. Some was
also suggested in banking sector. For this purpose, amendments were made to
Nationalization Act 1974 and two nationalized banks were privatized.
Along with this a permission to open banks in private sector was also granted. The rules
regarding establishment of new banks and for incoming foreign banks were also relaxed.
The-three privatized banks are;
a) MCB taken up by a private group in April, 1991
b) ABL taken up by its own employees in September, 1991.1
c) UBL taken up by UAE party in 2002.
After these changes a large number of private and foreign banks started their operations
in Pakistan and the present status can be seen from the following figures:

1.2An overview of Organization:

1.2.1 History of MCB:
This bank was incorporated under companies act 1913 on 9th July 1947 (just before
partition) at Calcutta. But due to changing scenario of the region, the certificate of
incorporation was issued on 17th August, 1948 with a delay of almost 1 year; the
certificate was issued at Chittagong.

The first Head office of the company was established at Dacca and Mr. G.M. Adamjee
was appointed its first chairman. It was incorporated with an authorized capital of Rs. 15
million.
After some time the registered office of the company was shifted to Karachi on August
23rd, 1956 through a special resolution, now recently the Head office of MCB has been
transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At that time it had 506
branches and deposits amounting to Rs. 1,640 million. Although. MCB has a reputation
of a conservative bank but nationalization also left its effects on this institute as well and
by end of year 1991 in which it was privatized the total number of branches were 1.287
and deposits amounting to as high as Rs. 35,029 million.
When privatization policy was announced in 1990, MCB was the first to be privatized
upon recommendations of World Bank and IMF. The reason for this choice was the better
profitability condition of the organization and less risky credit portfolio which made'' it a
good choice for investors.

Privatization:
A wave of economic reforms swept Pakistan in the lattes introducing the Need for
privatization of state owned banks and companies. This was the first bank to be
privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate
groups led by Nishat Group. Nishat Group is one of the leading and most diversified
business groups in Pakistan. The group has strong presence in the most important
business sectors of the country such as banking, textile, cement and insurance.
Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played
instrumental role in its success. In recognition of Mr. Manshas contribution, the
Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most
prestigious civil awards of the country.

Developments:
After privatization, the growth in every department of the bank has been Observed.
Following are some key developments:
1.

Launching of different deposit schemes to increase saving level.

2. Increased participation on foreign trade.

3. Betterment of branches and staff service level.
4. Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time
in Pakistan.
5. Extended use of information technology which is evident from the fact that
there are 768 fully automated branches, 243 online branches (integrated
networking), 151 ATMS in 27 cities nationwide and MCB continuously
innovates new product.

1.3 Nature

of the Organization:

1.3.1 Vision Statement:

To be the obvious choice for financial services in the region and beyond
To be the leading, financial services provider, and partnering with our customers for a
more prosperous and secure future.
Our vision statement underlies our aspirations to establish the MCB group as the
benchmark reference for the provision of financial services in the region and even further,
in line with the increased needs of our customers operating in the global economy.

1.3.2 Mission Statement:

Pursuing the voyage towards excellence...
We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so,
We ensure that our shareholders can invest with confidence in us.
6

Providing innovative
Efficient financial solutions
Long-term relationships with our customers
Shareholders invest with confidence

Our mission statement testifies to our unrelenting commitment to best practices in the
provision of financial services throughout the group against the backdrop of creating
shareholder value.

1.4 Branch Network:

Domestic Operation

1,101

Commercial
Privilege
Wholesale
Islamic
Sub-Branches

1,064
04
10
11
12

Overseas operation

Sri Lanka
Bahrain
EPZ
UAE

07
05
01
01
01

1.5 FEATURES OF MCB

Integrity:

We are the trustees of public funds and serve our community with integrity. We believe in
being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.

Respect:
We respect our customers values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them. We
create an environment where each individual is enabled to succeed.

Excellence:
We take personal responsibility for our role as leaders in the pursuit of excellence. We are
a performance driven, result oriented organization where merit is the only criterion for
reward.

Knowledge:
A strong commitment to nurture our human capital through lifelong development &
learning toward achieving our goal described in our mission.

Customer Centricity:
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make every
effort to exceed customer expectations through superior services and solutions.

Innovation:

We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.

Customer Care:
The assurance of providing quick, dedicated and unrivalled services to our valuable
customers.

Team Work:
Our approach, towards synergistic potential among our people between the companies of
the group alongside leveraging individual skills & competencies.

1.6 Product and Services:

Cash plus
MCBs network of 900 branches in Pakistan enables us to collect and disburse payments
efficiently with our cash management services .this also enables us to offer you a choice
of paper based or electronics fund transfer solutions including collection amounts, cross
branch online transactions etc.

MCB ATM 24 hours cash:

With an ever growing numbers of ATMs operating across the nation ,the mcb ATM
network is the largest and most advanced od its kind in the country ,and is part of MCB,s
continuing efforts to provide with convenience that suits your requirements most. And
now the MCB ATM has gone global .MCB,s affiliation with master card international
brings about added facilities for the MCB travels abroad with the cirrus and maestro
networks

M net:
9

MCBs revolutionary m-net switch enables customers to access their MCB account from
any member banks ATM machine

Online:
With a solid foundation of over 50 years in Pakistan, with more than 750 automated
branches, 269 online branches, over 190 MCB ATMs in 34 cities nationwide and a
network of over 16 banks on the MNET ATM switch, MCB is positioned at the forefront
of the banking industry in Pakistan .this success has been possible because of never
ending drive to achieve higher levels of excellence, constantly striving to raise the level
of performance.

MCB mobile banking:

At the fore front of technological excellence, MCB has proudly introduced MCB mobile
banking .MCB MOBILE banking provides the convenience of accessing account balance
information and mini statements whenever the customer is available.
MCB mobile banking services is available to all MCB ATM cardholders,24 hours-365
days .they just have to call MCB help line on(021) 111-000-777 or any MCB online
branch for assistance.
MCB mobile banking gives customer easy and quick access to their account (s)at any
time including holidays .with MCB mobile banking customer can
Check your balance
View the last 4 transaction of your MCB account
MCB mobile banking is free service for MCB account holders who have ATM card .all
they have to pay for is the cost of an sms message if charged by the services provider.

MCB rupee traveler s cheque:

10

MCB rupee travelers cheques were first introduced in 1993 as safe cash for traveling and
travel related purposes .the product has been extremely popular and is preferred over cash
by customers while traveling and in all walks of life .MCB rupee travellers cheques- the
safest way to vary cash the most widely accepted way to pay cash for travel related
purposes .RTC is a safe and secure way to make payments nationwide/
MCB bank has been at the forefront of providing its customers with new and innovative
product and financial instruments that are safe, secure and profitable.

MCB CASH CARD:

The wide spread acceptability and frequent use of MCB ATM cards has prompted the
bank to add more value to the cards which cater to customers evolving cash needs
enabling them to go ahead with ease and convenience .this reinforce MCB commitment
to

provide

to

its

customers

safe

and

secured

mode

of

cash

substitute.

MCB cash card is useful means of cash for MCB customers and non-customers alike:

Travelers

Businessman

General public

Payara ghar

MCB offers three home financing options for Payara ghar .MCB payra ghar provides
flexible and competitive home financing facility with option of home purchase,
construction and renovation. With MCB schemes customers can obtain the financing to
purchase a house /apartment ,construct own house or renovate existing house
immediate .nothing could be more convenient than owning a house and paying easy
installments that takes a step closer to becoming the owner a house and paying easy
installment that takes a step closer to becoming the owner of their house .it is better than
paying a monthly house rent which takes nowhere other than increasing your expenses
.Payara ghar is definitely the most feasible and direct route to a dream house .

Business sarmaya:
11

MCB business sarmaya is the best running finances facility against residential property
which empowers to manage business dealings better.so customers can get MCB business
sarmaya and thus improve their business ,avail lucrative opportunities and expand their
business ,with absolute satisfaction of cash flows.

Khushali bachat account:

Khsuhali bachat account is one of the most popular deposits accounts offered by MCB
.Its a special type of account which provides the account holder additional facilities for
payment of utility and HBFC.

1.7 Business volume:

Rupee in (000)
Profit before tax 26,253,075
Profit after taxation 16873175
Total assets 567,552,613
Total liabilities 488,348,404
Deposits 431,371,937
Investment 213,060,882

1.8 Competitors:

National bank of Pakistan

12

Bank al falah

United bank

Allied bank of Pakistan

Habib bank LTD.

Faysal bank

Standerd charterd

MCB

13

Chapter 2
ORGANIZATIONAL STRUCTURE
AND HIERARCHY
14

2.1 ORGANIZATIONAL STRUCTURE

Chairman

Board of Directors

Chief Executive/President

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

OG-1

OG-2

Clerical Staff

Non Clerical Staff

15

OG-3

2.2 Hierarchy of HR Department

16

Chapter 3
HRM PRACTICES

17

3.1 Human Resource Management Department:

Human resource management is responsible for the people dimension of the organization.
It is responsible for getting competent people, training them to perform at high effort
levels, and providing mechanism to ensure that these employees maintain their
productive affiliation with the organization.
Our focus is on building stand alone strength
The MCB believes in investing in its people. On this account they have very
comprehensive and effective Human Resource Development system. Since privatization
the Human Resource Department has adopted the strategy of streamlining, paving the
way for unyielding competitiveness.

3.2 THE HR FUNCTIONS:

At The MCB Ltd. because people are the key to its success, the Human Resource
Department (HRD) champions the importance of the individual while thinking
strategically.
HR facilitates the creation of an environment in which people have the means to
constantly evolve in striving for continuous improvement for the benefit of all
stakeholders.
Positioned as a strategic business unit within the corporate structure of the MCB,
the HRD's has as its prime responsibility to contribute to the organizations effectiveness
by engaging its people and aligning the policies and procedures and systems to the
strategy of the business. It is through this that the HRD adds value to the institution.
The Human Resource Department (HRD) facilitates and partners with its customers
(MCB Staff) in implementing the planned strategy by adopting a Can Do Attitude. HR

18

More specifically the HRD contributes to the business strategy through:

Competency based HR systems

Policy and Procedures

Developing Capabilities

Performance Management

Transparent and Open Communication

Reward and Recognition

Employee Satisfaction

Diversity

Compliance

Human resource management department works for the betterment of the employees. It
enhances their skills, training management, service skills, service benefits, wages,
medical facilities, staff loans are basic functions of this department.
3.3 HRM PROCESS IN MCB
The HRM process consists of interrelated activities in Muslim Commercial Bank, i.e.

Recruitment
Selection
Training
Compensation and supervision

When applying the process diversity, labor laws and privacy is considered.

3.4 Human resource planning and forecasting:

Human resource planning and forecasting includes the specific and interrelated activities
that together constitutes HRP system:

19

3.5 HRP Process:

These are steps of HRP in Muslim Commercial Bank.

Determining the Objectives.

Defining skills required to meet the objectives.
Determine additional human resource requirements.
Develop actions to meet the anticipated HR needs.

Forecasting HR Requirements:
The purpose of forecasting of human resources is to estimate labor requirements at some
future times period. Such forecasts are of two types.
1. The external and internal supply of labor
2. The aggregate external and internal supply of labor

Internal supply forecast:

Relates to the conditions inside the organization, such as age distribution of the work
force, terminations, retirements and new hires within the jobs.

External supply forecast:

Relates to hire the candidates from external labor market in order to fill the talent gap in
the organization.
Demand forecast:
Is subject to many uncertainties like economic conditions, technological advancement
and competition.

Methods to Forecast HR Needs:

Zero-base Forecasting:
This method uses the MCBs current level of employment as the starting point for
determining future staff needs in MCB.
20

Bottom-up Approach:
It is the forecast method in which each successive level of the MCB, starting with the
lowest and forecasts its employee requirements in order to ultimately provide an
aggregate forecast of employee needs.

Use of mathematical models:

Mathematical models are also used for forecasting HR requirements. It defines
relationship between demand and the number of employees supplied.

Simulation:
It is a technique for experimenting with a real world situation through a mathematical
model representing that situation some of the major components of Human Resource
Policy are listed below in this chapter.

3.6 Employee Selection and Recruitment:

People are at the heart of our success
Recruitment is the discovering of potential applicants for actual and

Anticipated

organizational vacancies.
The caliber of the work force of an organization largely determines its strengths and its
success as an enterprise. The employment policies of many organizations are not
formalized. They have just evolved as practices over the course of many years.
MCB is interested in attracting and hiring the very best people in the market.
We understand the integral role you play in our continued success. We're
committed to providing you with a candidate experience that is robust,
transparent and gives you the power to make choices.
The MCB has very orderly and impartial procedure for selecting people. In fact it is the
only bank in private sector with such an extensive and irrefutable selection process.
21

Human Resource Department has combined many selection techniques i.e. job
application form, employment test, interview, and physical examination
The step to step Recruitment process followed by organization is:

Job Analysis

Planning

Sourcing

Screening

Interviewing

Hiring

Reporting

3.7 Job Analysis:

The procedure for determining the duties and skill requirements of a job and the kind of
person who should be hired for it is called Job analysis. Job analysis is every important as
job analysis information is used in Selecting and recruiting, compensation, performance
appraisal, training and in resolving other issues which MCB faces.
The methods which are used in collecting job analysis information are

The interview

Questionnaire

Recruitment process

22

23

Planning:
Planning includes both workforce planning and individual recruitment planning. Workforce
planning typically focuses on forecasting staff and skill gaps in the most business-critical
positions, while individual recruitment planning focuses on sourcing and screening strategies
for specific vacancies.

Sourcing:
Sourcing focuses on activities to attract both passive and active candidates. Common
strategies include advertising, marketing at select schools and organizations, managing
employee referral programs, and cross-marketing new positions to prior applicants.

Screening:
Screening focuses on creating a qualified pool of candidates to share with the hiring manager.
Common activities include resume/application reviews for select qualifications, supplemental
questionnaires, and formal testing.

Interviewing:
Interviewing includes in-person reviews designed to select a final candidate. Common
strategies include peer interviews, panel interviews, and the use of behaviorally-based
interview techniques.

Hiring:
Hiring focuses on persuading the selected candidate to join the organization. Common
activities include making the job offer, negotiating terms and conditions of employment, and
all pre- and post-start on-boarding.

Reporting:
Reporting includes all post-hire data collection, monitoring, and reporting. Common activities
include surveying applicants and hiring managers, collecting and analyzing applicant flow
data, and reporting performance measures and processing metrics.

24

Purpose and Importance of Recruitment:

The Purpose and Importance of Recruitment are given below:
Attract and encourage more and more candidates to apply in the organization.
Create a talent pool of candidates to enable the selection of best candidates for the

organization.
Determine present and future requirements of the organization in conjunction with

its personnel planning and job analysis activities.

Recruitment is the process which links the employers with the employees.
Increase the pool of job candidates at minimum cost.
Help increase the success rate of selection process by decreasing number of

visibly under qualified or overqualified job applicants.

Help reduce the probability that job applicants once recruited and selected will

leave the organization only after a short period of time.

Meet the organizations legal and social obligations regarding the composition of

its workforce.
Begin identifying and preparing potential job applicants who will be appropriate

candidates.
Increase organization and individual effectiveness of various recruiting techniques and
sources for all types of job applicants.

3.8 Training and Development at MCB Pakistan:

The management of MCB believes that systematic training and development helps the
Bank's human resource in acquiring professional skills and expertise, which in turn gives
MCB a sustainable edge over their peer banks in the today's competitive business
environment. Ongoing learning for all is therefore one of the priority areas at MCB.
The objectives of training activities are to keep MCB employees abreast of latest
professional knowledge and skills in all areas of banking, as well as to reinforce a passion
for the highest quality of customer service at all levels.

25

It is obligatory for each employee of the Bank to attend at least one training course (of a
minimum duration of one full day) in a calendar year. Branches, Area Offices and Head
Office Divisions/Departments are to send their nominations for training courses at least
two weeks prior to the start of a training course. Employees may also take the initiative
and get themselves nominated through their supervising officers for training courses
relevant to their needs.
The Bank has the latest state-of-the-art training facilities at its Training & Development
Center (TDC) and a dedicated training team to look after most of the training needs of its
employees.
MCB uses following programs for training and development

Management Trainee

Management associate

Cash officers

Internships

Management Trainee:
MCBs Management Trainee (MT) program looks for highly motivated individuals who
exhibit the potential to excel as future leaders. The program is geared towards providing
challenging work assignments complemented by a learning component for select
individuals from reputable universities. At MCB, the MT program offers extensive
interactive classroom training, on the job rotations and personal mentoring from senior
management to provide a comprehensive learning experience. The objective of the
program is to realize potential and translate the experience into a successful banking
career.

Management associate:
MCBs Management Associate Program is a training and rotational program focused on
dealing with branch banking requirements. It provides accelerated development
26

opportunities across MCBs branch network of Retail, Corporate & Commercial banking.
During this program, candidates are assigned with challenging business scenarios to
enhance their critical and analytic skills.
Another crucial element of the program ensures that managerial skills are honed and
developed. This provides associates with the expertise required to handle supervisory and
administrative tasks that will result in the development of successful business managers.

Cash officers:
MCBs Cash Officers Program catapults successful candidates to the front lines of the
bank. Candidates in this program are the banks ambassadors and must have exemplary
skills in dealing with clients. The program involves an extensive one-month training
period based on branch banking operations before placement in the branches. Energetic
and focused graduates from HEC recognized institutions with good communication and
interpersonal skills qualify for MCBs Cash Officers Program. Before being placed at
MCB branches, these individuals must exhibit a proven ability to add value and act as
agents of change.

Internships:
MCBs Internship Program offers promising students with the exciting opportunity to
apply their classroom learning experience to real life corporate assignments. Through the
program, internees can support their career goals by using the internship as a launching
pad for creating contacts with professionals in the field and identifying their own
competencies to build a successful career with MCB.

3.9 Performance Management:

It is the description of job-relevant strengths and weaknesses of an individual or a group.
Setting and clearly communicating performance standards and expectations, observing
and providing feedback, and conducting appraisals enable you to achieve the best results
through managing employee performance.
To begin the process, you and the employee will collaborate on the development of
27

performance standards. You will develop a performance plan that directs the employee's
efforts toward achieving specific results, to support organizational growth as well as the
employee's professional growth. Discuss goals and objectives throughout the year,
providing a framework to ensure employees achieve results through coaching and mutual
feedback. At the end of the rating period, you will appraise the employee's performance
against existing standards, and establish new goals together for the next rating period.

Role of Immediate Supervisor & Branch Manager / Unit Head:

Performance appraisal is an interactive exercise between the immediate supervisor and
the staff member reporting to him/her. A supervisor is defined as the person to whom one
or more employees report on a regular basis. Branch Managers and Unit Heads supervise
this interaction from a distance, and try not to dominate the proceedings. With their
greater maturity and experience, they discreetly guide the process in order to empower
the departmental heads to assume greater responsibility in this area.
The Branch Managers and Unit Heads however, continue to bear the ultimate
responsibility for successful completion of the exercise. They discuss the goal setting
done by their departmental heads and place second signature on appraisal forms of all
non-supervisory staff. Supervisory staff is evaluated by the Branch Manager and Unit
Heads directly. In addition to personal skills, their supervisory skills are also evaluated,
using the second page of the appraisal form for 'Managerial' staff.

Setting Performance Standards:

In MCB, performance expectations are the basis for appraising employee performance.
Written performance standards let supervisor compares the employee's performance with
mutually understood expectations and minimize ambiguity in providing feedback.
Having performance standards is not a new concept; standards exist whether or not they
are discussed or put in writing. When observed an employee's performance, supervisor
usually makes a judgment about whether that performance is acceptable. How do you

28

decide what's acceptable and what's unacceptable performance? The answer to this
question is the first step in establishing written standards.
Standards identify a baseline for measuring performance. From performance standards,
supervisors can provide specific feedback describing the gap between expected and
actual performance.
Effective performance standards:

Serve as an objective basis for communicating about performance.

Enable the employee to differentiate between acceptable and unacceptable

results.

Increase job satisfaction because employees know when tasks are performed
well.

Inform new employees of your expectations about job performance.

Encourage an open and trusting relationship with employees.

As the immediate supervisor, you play an important role; your closest interaction with the
employee occurs at this level.

Performance Standards

Observation and Feedback (Coaching)

Absolute Category Rating (ACR)

Performance Appraisal

Observation and Feedback (Coaching):

Once performance objectives and standards are established and clearly communicated,
branch manager observes employees' performance and provide feedback. Branch
manager has a responsibility to recognize and reinforce strong performance by an

29

employee, and identify and encourage improvement where it is needed. He provides

informal feedback almost every day.
By observing and providing detailed feedback, manager plays a critical role in the
employee's continued success and motivation to meet performance expectations.
Coaching is a method of strengthening communication between manager and the
employee. It helps to shape performance and increase the likelihood that the employee's
results will meet the expectations. Coaching sessions provide manager and the employee
the opportunity to discuss progress toward meeting mutually-established standards and
goals. A coaching session focuses on one or two aspects of performance, rather than the
total review that takes place in a performance evaluation.

Guiding Principles:
Effective coaching can:

Strengthen communication between branch manager and the employee.

Help the employee attain performance objective.

Increase employee motivation and commitment.

Maintain and increase the employee's self-esteem.

Provide support.

Absolute Category Rating (ACR):

A method of evaluating transmitted voice quality where subjects rate (from 1 to 5) short
groups of unrelated sentences under controlled conditions. ACR is a category judgment
method where the test sequences are presented one at a time and are rated independently
on a category scale. (This method is also called Single Stimulus Method.)
Subjects are asked to rate the quality of the presentation based on the level of the quality
they have in their opinion for it after viewing or listening it. This phase is named the
30

voting time. The voting time should be less than or equal to 10 seconds. The five-level
scale for rating overall quality is the most used scale, if higher discriminative power is
required; a nine-level scale may be used. It is a test method used in quality tests. It has
been standardized in ITU-T Recommendation. In this method, a single test condition
(generally an image or a video sequence) is presented to the viewers once only. They
should then give a quality rating on an ACR scale. Test conditions should be presented in
random order.

3.10 Performance Appraisal:

MCB Pakistans performance appraisal system is based on a combination of 'MBO' and
'Enabling Traits' approaches, under which: 60% weight age is given to performance goals
discussed and laid out in the beginning of the year. Another 40% weight age is assigned
to enabling personality factors, which are clarified to all employees by their supervising
officers at the start of each year.
The system and process flow of the appraisal process is modified, improved and
upgraded from time to time in line with the Bank's requirements, as well as with industry
practices. HR Department notifies all units of the Bank of the PA system and procedure
currently in use. Units are also notified deadlines for goal setting, form filling, monitoring
and final appraisals.
Salary increases and adjustments are based on performance of employees during a
calendar year and are finalized during the first quarter of the New Year. Grade promotions
on the other hand are based on the -availability of higher positions, employees' ability to
fill those positions and sustained high performance during the last few years, and are
finalized during the second quarter of each year.

3.11 MCB Objectives Of Performance Appraisal:

1. Improving the performance of the Bank and its staff members
2. Laying a solid foundation for relationships between staff and management.
31

3. Clarifying performance targets for all.

4. Using the process for career planning and professional development of staff.
5. Review of salary, assignment and career path.
6. Award of bonuses.
7. Promotion to higher salary ranges and functional responsibilities.

Need, Importance And Advantages Of Performance Appraisal:

Scientific basis for judging the merit or worth of employees

Sound basis for promotion, demotion, transfer or termination of

employees.

Helps in distinguishing between efficient and inefficient workers.

It reveals the defects in the selection procedure

Helps to know the potentials of the subordinates systematically.

Helps correct placements.

It helps in constructively guiding the employees.

It prevents grievances and develops a sense of confidence.

Protects the management against the charges of discrimination.

How Performance Reports Are Written:

32

MCB have a very regular and transparent appraisal system. The basic requirement for the
consideration to be promoted is three years period. A performance is used for appraisal
which has different ratings. According to these ratings employees are given different
ranks and starting from A to E. rank E is the worst. Employees performance position is
communicated him to writing so that he can improve. Benefit of transparent appraisal is
that employee can himself work out his performance on criteria.
Performance appraisal in MCB involves making Absolute Category Rating (ACR)s of
the subordinates. That is, a branch manager writes the ACRs of employees in his branch,
a Regional Manager writes the ACRs for the various Branch Managers working under
him and so on.
An ACR contains such information as the employee background, nature of his work,
performance of employee, performance rating and recommendations. These ACRs are
sent to the GM Office from where they are forwarded to the Human Resource Division.

3.12 Employee Compensation and Benefits:

An organization reward system is a program or scheme which provides incentives for
those individuals or groups who perform well in the organization. This reward system in
actual motivates employees to perform well by attracting with well designed incentive
packages. It includes anything an employee values and desires that an employer is able
and willing to offer in exchange for employee contribution.
Compensation is payment to an employee in return for their contribution to the
organization, that is, for doing their job. Compensation includes topics in regard to wage
and/or salary programs and structures, for example, salary ranges for job descriptions,
merit-based programs, bonus-based programs, commission-based programs, etc.
Employee benefits typically refers to retirement plans, health life insurance, life
insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits
are increasingly expensive for businesses to provide to employees, so the range and
options of benefits are changing rapidly to include, for example, flexible benefit plans.
33

Rewards bridge the gap between organizational objectives and individual expectations.
To be more effective, organizational reward systems should provide four things.
1.

Legal compliance with all appropriate laws and regulations

2.

Cost effectiveness for the organization

3.

Internal, external, and individual equity for employees

4.

Performance enhancement for the organization

All reward systems are based on the assumptions of attracting, retaining and motivating
people. Financial rewards are an important component of the reward system. These
incentives can be monetary or non-monetary.

Compensation and Benefits In MCB:

MCB awards their employees a lucrative compensation in return of their tough mental
labor. Apart from basic salaries they are offered many other benefits like:
o
o
o
o
o
o

Utility Allowance,
Medical Allowance
Overtime Allowance
Education Allowance
House Rent Allowance
Bonuses

Non Interest Loans:

They are also offered non-interest loans from the bank which prohibits the payment or
acceptance of interest fees for loans of money.

Cash Prizes:
There are also some cash prizes for employees who show better performance.
Those employees, who pass IBP part 1 exam in first attempt, are offered Rs.60,
000 cash prize or two increments.
34

Similarly those who pass part 2 exams are offered Rs.100, 000 or three increments. Those
who pass both examinations within one year of training are promoted to OG 2, and those
who get the gold medal in the exam, are promoted to OPERATING GRANT 1.

House Building Loan:

Of the employees who dont have reasonable accommodation, MCB offers a very
suitable house building loan. Contain share of the credit is free certain portion is on low
mark up base. Any employee can get 80 times loan of its basic salary. For example if an
employ can get loan of two lac, and forty thousands.

Conveyance Loan:
MCB is giving medical facility for their employees. For that every good hospitals one in
its panel officers are offered this facility for them, their spouse and children. For None of
them officers, parents are also included for medical facility.

Education Allowance:
MCB is also giving education allowance for the children of employees. Education
allowance is for none of them officers only. Officers already have reasonable salaries,
which covers all of their needs.

Computer Loan Facility;

they want to train their employees according to the requirements of the current age. For
their financial support in this area, they are offering computer loan facility. So that, they
buy their own computers and make themselves an expert in it.

35

Chapter 4
Study during internship

36

TOPIC OF STUDY DURING INTERNSHIP

During my internship I studied the training and development process of MCB
4.1 Training at MCB:
As priory written in the scope of study that MCB is managing its training needs from a
single Training Center, so it is feasible to elaborate some facts about the Training Center
before breaking the training methodology. The training center was established in 1999,
since then it is managing the training needs of Punjab, NWFP and AJK region. It
also handles the Sindh and Baluchistan Region in alliance with main branch
of Karachi. For Sindh and Baluchistan, Training camps work to fulfill the needs
of the region, this is done 3 4 times in a year
4.1.1 HIRARCHY OF TRAINING CENTER:
President

HR Division

Training wing

Training wing

Mr. Shahaid
Iqbal(Grade 1 Officer )

Mr. Irfan (Grade 3

Officer)

4.1.2 Areas of Training

The training at MCB is done at two broad areas, which are further categorized, these are:

37

Banking
General Banking
Credit Division.
Foreign Trade.
Personality Development:
Management. (Leadership & Controlling etc)
Marketing and Selling.
Behavior Modeling. (Personality development)
Communication Skills. Etc.

Information Technology training is also given to the related employees in

collaboration with the Electronic Technology Department (ETD)
4.1.3 Who Need Training
The new hires always need training. There are two types of new hires;
1) Fresh Hires:
Fresh employees are those who have recently completed their studies and have nor little
experience of banking. Such employees need to attend a formal training session
to get aware of banking technicalities. These fresh selected employees are c a t e g o r i z e d
in two separate parts according to their posts; hence the training
methodology of both differs with each other.
a) Management Trainee Officers (MTO)
MTOs are hired only once in a year, and they are selected for middle level executive
posts, so their training is quite complex as compared to JOs. After the selection, they
have a Theoretical Training Session of 2 3 months followed by O n Job Training (OJT)
(33)

for

further

years.

The

theoretical

training

session

is

c o n d u c t e d b y t h e T r a i n i n g C e n t e r, w h e r e f o r m a l l e c t u r e s a n d p r e s e n t
a t i o n techniques are adopted. Whereas , the OJT is conducted at the relevant branch and
department. MTOs get training in all the areas of banking, i.e. General Banking, Credit,
Foreign Trade and Personality Development.
b) Junior Officers (JO)
38

Junior Officers are hired according to the needs of different branches and
departments. There work is non-managerial and clerical in nature, so their training
needs are not as complex as of MTOs. After the selection, JO have t o a t t e n d
o n l y a 2 w e e k s Theoretical Training Session. T h e y g e t training only in the
General Banking and Personality Development and not in Credit and Foreign Trade.
No OJT is conducted for JOs.
2) Experienced Hires:
Experienced employees are those who have already worked in other banks at
executive posts. Such employees do not need any formal training session; they are
informally trained in their specific area.
3) Current Employees:

MCB offers more than 50 Refresher Courses in different aspects of banking, so that the
training needs of current employees are fulfilled.
4.1.4 Training Need Assessment Process
The identification that either the training of current employees is necessary or not
depends on the results of Annual Performance Report (attached in annexure).In APR the
Training Pressure Points might be the following one;

Poor Performance of Employees

Lack of Skills in Employees
Employee Himself Asks For Training
His Boss Identifies Him For Training

Other than APR, following are also some of the valid reasons for conducting the training
program.

1.

New Hires.
NewTechnology
Internal Growth. (New Branch)
New Services
Organizational Analysis:
39

The Head Office supports the training program by providing finance and
peer appreciation. An
Annual Budget is allotted to the Training Wing for conducting the training program.
2.

Person Analysis:

The APR exactly identifies that who needs training, and is it really a training problem.
APR is evaluated by using the most effective tool, 360 Feedback a n d AP R i s
c h e c k e d b y t h e r e p o r t i n g o f f i c e r a n d r e c h e c k e d b y s e n i o r reporting
officer, so there is no doubt about the identification of the training need of an
employee
3. Task Analysis:
The task and duties that require training are also specified in the APR. In the APR the
Boss might recommend the areas of training, or the employee himself may identify the
tasks and duties for which he needs training.
4. Ensuring Employee Readiness
The relevant department of whose employee is requiring a training session
ensures the particular employee that h e c a n l e a r n t h e t a s k o r d u t y .
Further they also ensure the employee / trainee that it will be beneficial for him
and for the organization both
5. Creating a Learning Environment
In OJT, all the branches and departments of MCB maintain a learning environment to
enhance the training by;

6.

Job Rotation.
Valuing of Employees.
Appreciation Certificates. Etc.
Sharing / Transfer of Training

40

Informally in all jobs the trained and experienced employees share their knowledge with
the new hires and those employees who are suffering with their tasks. But in Elec.
Tech.Deptt. (ETD) it is done formally by the technicians
4.1.5 Training Methods
Among the various training methods, MCB is using the following methods to trains its
employees.
1. Class Room Instructions
The Training Wing of MCB commonly uses it. JOs have 2 weeks session
of classroom training. MTOs have 3 months session of classroom training,
which covers all the three areas of banking. Followings are the parts of classroom
training session.
Business Games
Case Studies
Research Topics
Written and Oral Assignments
Role Plays
2. On Job Training (OJT)

It is the second most commonly used method of training in MCB. Only

MTOs have an OJT session. Job Rotation is the main ingredient of OJT.
3. Degrees & Certifications
Other than full time degrees and certificates, MCB has more than 50 Refresher Courses for
current employees to enhance their skills.
Team Learning.
Behavior Modeling.
* Audio Visual Aids and Multimedia are used in the training sessions. Furthermost of the
training sessions are conducted in 5 Star hotels.
4.1.6 Evaluation of Training Program
41

The Training Wing in alliance with HR evaluates its training program as follows;
The most important way to evaluate the training program is by
c h e c k i n g t h e linkage with the objective and goals of the bank / high leverage training.

1.

By measuring the effects on organization.

By Cost Benefit Analysis / Budgeting.
By checking the employee reaction.
Evaluation of Trainees

At the completion of training session, the

t r a i n i n g Win g e v a l u a t e s e a c h t r a i n e e i n following ways;
By Pre-test Post-test.
By testing the employees during the session.
MCB conducts quizzes and evaluates the written & oral assignments.
2. Cross Cultural Training
There is an informal cross-cultural training of employees in MCB for its branch in
Bahrin.
3. Reward System
M C B h a s a r e w a r d s ys t e m f o r t h e t r a i n e e s w h o p e r f o r m b e t t e r d u r i n g
t h e t r a i n i n g session, which are in shape of;

Appreciation Letters
Shields. Etc.

* Courses are normally conducted at Five Star Hotels, which are a motivating
factor for trainees.
4.2 Employee Development at MCB: Development of employees in MCB is done under following approaches;
4.2.1 On Job Degrees and Certifications:
42

At MCB every employee is given an opportunity to do extra degrees and certifications in

his field or where he / she are lacking skills. E.g. MBA- Executive and others.
M C B h a s a l s o m o r e t h a n 5 0 Refresher courses
i n d i f f e r e n t a r e a o f b a n k i n g a n d management. Employees are fully
supported at MCB to take these courses and degrees.
For refresher courses, which are usually not longer than 7 to 10 days,
sabbaticals are given to the employees. This motivates the employees to take these
courses whenever an opportunity is there
4.2.2 Assessment Centers:
Leaderless group discussions are occasionally held at all branches and
departments followed by conferences at meetings between employees and among
executives and board of directors on regular basis, for the whole day, normally
after the banking hours. During training sessions Role Plays are also given to
employees, which help them to develop themselves.

5.5 SWOT ANALYSIS:

5.1 STRENGTHS:

MCB is Successive and Market oriented.

MCB investing huge sums on HR development and training.

Customer default rate is lower as compared to other banks.

MCB has the largest ATM network in the country.

Meeting the challenges of latest Technology by introducing Smart card

remit express, mobile banking etc.

One of the major strengths of MCB is that it has very stable deposit base.

MCB is largest private bank in Pakistan with around 1000 branches, which
cover almost every part of Pakistan.

The bank enjoys competitive advantage over other banks in Pakistan.

The bank enjoys competitive profitability in the industry.

43

MCB has captured majority of potential customers in Pakistan.

MCB has the accounts of big organizations like OGDCL, PTCL, EFU,
PTC etc.

5.2 WEAKNESSES:

Low motivational level

Employees, dissatisfaction due to ill treatment and improper reward

system.

Favoritism and Nepotism in recruitment.

High Employees Turnover.

Decision making process is very slow.

It is not having greater no. of branches abroad.

Though ATM network is the largest in Pakistan, still some potential areas
dont have the ATM.

MCB RTC is useable only in Pakistan.

Some management positrons needed are not professional.

Although most of the branches are computerized now, still some important
branches dont have computers.

Less efficiency of SYMBOL System due to disconnectivity.

5.3 OPPORTUNITIES:

Leasing sector is growing in Pakistan for the last two to three years which
provides opportunity to MCB to go ahead in this area as well.

MCB is providing Consumer Finances at comparatively lower rates which

paves a way to grab more customers

Financing to small/medium cottage industries will definitely increase its

advances and profitability as well.

Islamic Trading Based Banking can enhance the business of the bank.

Overseas Operations.

Launch the more effective and modern banking online system.

44

5.4 THREATS:

Other private commercial bank with sound profitability is also a threat to

MCB e.g. UBL, Al falah, HBL etc.

For the last of many years, Pakistan is facing economic and political
instability which is a big threat.

Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which may affect MCB.

Foreign banks are flourishing in field of consumer financing.

People dont prefer banking culture. They mostly prefer cash transactions.

6.CONCLUSIONS:

45

In MCB, with Cooperation of all branch members, I have been able to learn and
experience many new things related to the banking sector and the banks workings. I am
able to handle the public with respect to many different workings on many different
instances and also in account opening for customers and can handle many other tasks as
well.
Finally I concluded that MCB is a good organization for a person for his long term career
workings. Overall working and environment of the bank is very comfortable and the staff
is very helpful and respectful of each other and it still maintains a professional
environment. Management of the bank is very strong. I found MCB a very well organized
and managed organization. Its progress in a very short time is a proof of its good policies
and commitments by both, the management and the employees towards achieving the
goals and act upon the mission of MCB.
Employees of MCB work more than their working hours and all the workings take place
in a very friendly atmosphere that does not induce pressure on the person working there.
Unlike most of the other organizations, MCB do not try to squeeze their people into a
corporate mould, instead they identify individuals talent and then give them plenty of
room to grow. It also shows their loyalty and commitment to the organization. This
branch of MCB relatively small and has climbed its way up very quickly and all that only
because of the employees efforts and consideration for each other
Understanding and the effective management of the human resources is the most difficult
challenge faced not only by the bank but by all the organizations. Even though the people
have been sacrificed in the new organizational developments, it is becoming clear that the
true lasting competitive advantage comes through human resources and how they are
managed.

Along with all these positive points, like all other organizations MCB also needs to
improve in some aspects. MCB seems to not focusing on this highly critical issue as the
job satisfaction level of the employees working at MCB, was quite low. There are quiet
tight and hard policies in case of promotion. It takes too much time for promotions even
46

if the promotion is due; it still requires a recommendation from management. Pay

structure is also very poor. Employees are low-paid. And all these factors create
dissatisfaction and demotivate employees.
Now a days, despite all these little problems, as a whole MCB is a unique blend: diverse,
challenging and moving at a growing pace, yet also personal and friendly. They value
their best performers highly and offer three things that must be top of the list when you
consider your next, all important career move:

Stimulating work that will enhance any resume

Development opportunities to enrich your professional growth
Rewards that match with performance.

7.RECOMMENDATIONS:
From the quantum of the profit and its financial data it can easily judged the after
privatization Muslim Commercial Bank is performing well. Its deposits are growing dayby-day and so its profitability. The controlling body is responsible for the productive
performance of the bank. Followings are my observations and suggestion to improve the
efficiency for the development of the bank.

Increase in Profits:
People can be motivated to save money by offering the deposit through various
investment schemes. The rate of profit should increase 1% or 2 % it would be profitable
step for bank.

Increase Salaries:
MCB is making good profits but giving less pay to their employees as compared to their
competitors. So their salaries should be increased. Because less salaries make the
employees demotivate and they lose their interest in their jobs.
47

Change The Nature Of Work:

Most of the bank employees are sticking to one seat only with the result that they become
master of one particular job and lose their grip on other banking operation. In my opinion
all the employees should have regular job experience all out-look towards banking. Their
promotion policy should be adjusted accordingly.

Training:
Every year some of the employees should be sent for training to other countries and
employees from other branches should be brought here. Some more reading material
should be provided the purpose should be to educate the employees with the advance
studies in their field. The employee should be provided the opportunities to attend and
participate in seminars and lectures on banking.

Refresher Courses:
Refresher courses for the staff are most important in any international organization. All
the employees should have these courses according to their requirement. Foreign experts
can also be called for this purpose.

Special Training In Abroad:

Every year some of the employees should be sent for training to other countries and
employees from other branches should be brought here. Some more reading material
should be provided the purpose should be to educate the employees with the advance
studies in their field. The employees should be provided the opportunities to attend and
participate in seminars and lectures on banking.

Incentive to Employees:
Bank should give some more incentive to its employees in order to remove the conflict
between lower and higher officers and should try to improve the working condition of the
bank. Such system should be designed that every employee who has some problems with
his officers can communicate to the higher management and some steps must be taken to
improve that.
48

Performance and Reward;

Smart, educated, skilled, well spoken and well versed staff personals should be rewarded
and appreciated, while on the other hand lazy, lethargic, heard, rough-dealers and ill
mannered must be warned and penalized but this all should be on merit and considering
the policy of honesty is the best policy and not due to some personal liking, disliking
prejudice and patrimonial. It is therefore suggested certain schemes and checks may be
introduced in banks to increase efficiency through reward and punishment system.

Over Employed:
During my internship period I felt that at some place the Muslim Commercial Bank
Limited is over employed which is causing in expenditure. I think that the best way out
for this problem is to pen new branches.

Promotion and Advertising:

Bank must let potential customers know that all attractions for banking exist. This is done
by advertising on television and obtaining press coverage, in conjunction with direct
mail, window displays, leaflet in branches and in appropriate other locations (such as
hotels, shops, etc.) and including leaflets in statement of accounts sent to existing
customers in the hope that they will tell potential customers about the services provided
by our bank.

Better Reward System:

Better reward system is one of the most important requirements in order to reduce the
problem of Employee retention and improve Employee motivation.

49

Reward and Punishment:

It is human nature one goes behind reward and incentives while and try to avoid from
punishment. Likewise in commercial institution like bank this system be introduced with
full force means active smart, educated skilled, self spoken and well versed staff
personal, should be reward and appreciates, while on the other hand lazy, lethargic,
heared, rough dealers and ill mannered must be warned penalized and punished.
But this all should be on merit and considering the policy of honesty is the best policy
and mot due to some personal liking, disliking prejudice and patrimonial. It is therefore
suggest certain schemes and checks may be introduced in banks to increase efficiency
through reward and punishment system.

More Focus on Salary Accounts:

Logic leads to promotional campaign through employers who are customers of the banks
and their employees are paid in cash. Such business accounts should be encouraged to
open the accounts of their employees with the banks. It might be worth offering free
banking for a specific period to new accounts or simply publicizing the services available
by means of posters at the employers premises.

Internship Facilities;
The period of internship should be divided into the number of department of the MCB.
The internee should be given timetable mentioning the number of days he has to work at
different places in the bank. On the 1st 4 day in each department internee should be given
a lecture by the officer of the department concerned about working of the department.
A lot of productive time is wasted by the staff in unproductive pursuits and tea and lunch
breaks are got voluntarily extended and the time spent in corridors, courtyards, depends
on the staff will. This tendency of late must be eliminated which reflect adversely on the
image of the institution and has posed a serious problem.
Distribution of work is not on equity basis, work has not been allocated properly some
workers have to work hard and have to work in late hours without any extra reward. So I
suggest that steps should be taken to allocate the work properly.
50

Survival Of The Fittest:

It is not nearly a sentence or idiom right man for the right job according to his
qualification to his qualification, profession skills and experience with the job
specification must be considered while posting and placing the employees.
It should not be like that a person who may be a very good worker but possessing lack of
managerial capabilities should be posted as manager. But as second place in command or
some heavy working department wished persons together with managerial qualities and
manners in the same fashion should be posted and placed as manager.

8.Limitation of the Study:

The study is done with the sole purpose of doing the best work but there were certain
limitation faced during the internship period. The most important limitation from which
the study suffers is the non-availability of information in a manner required for analysis
and the secrecy of the bank. Another important limitation of the study is time and space
constraint.

REFERENCES

Introduction:

http://mcb.com.pk/mcb/about_mcb.asp
51

Vision / Mission: http://mcb.com.pk/mcb/mission_vision.asp

Corporate information:
http://mcb.com.pk/mcb/corporate_information.asp

http://www.oppapers.com/essays/Pakistans-Banking-Sector-Industry
Analysis/181995

http://en.wikipedia.org/wiki/Economy_of_Pakistan

http://www.sbp.org.pk/reports/annual/arfy09/annex_index.htm

http://en.wikipedia.org/wiki/Muslim_Commercial_Bank

http://www.blurtit.com/q501915.html

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