Hrm Final Report 8968

Institute of Business Management

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COMPANY OVERVIEW: 1.1 HISTORY OF STANDARD CHARTERED BANK: Standard Chartered has a history of over of 150 years in the Banking and is named after two banks, which merged in 1869. They were originally known as the Standard Chartered Bank of British South Africa and the Chartered Bank of India, Australia and China. Of the two banks the Chartered Bank is the older having been founded in 1853 following the grant of Royal Charter from Queen Victoria. The moving force behind the Chartered Bank was a Scot, James Wilson, who made his fortune in London making hats. James Wilson went on to start The Economist, still one of the world’s pre-eminent publications. Nine years later, in 1862 the Standard Bank was founded by a group of businessmen led by another Scot, John Paterson, who had immigrated to the Cape Province in South Africa and had become a successful merchant. Both banks were keen to capitalize on the huge expansion of trade between Europe, Asia and Africa and to reap the handsome profits to be made from financing that trade. The Chartered Bank opened its first branches in 1858 in Chennai and Mumbai. A branch opened in Shanghai that summer beginning Standard Charterer’s unbroken presence in Chine. The following year the Chartered Bank opened a branch in Hong Kong and an agency was opened in Singapore. In 1861 the Singapore agency was upgraded to a branch, which helped provide finance for the rapidly developing rubber and tin industries in Malaysia. In 1862 the Chartered Bank was authorized to issue bank notes in Hong Kong. Subsequently it was also authorized to issue bank notes in Singapore, it continued to exercise up until the end of the 19th Century. Over the following decades both the Standard Bank and the Chartered Bank printed bank notes in a variety of countries including 3

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China, South Africa , Zimbabwe, Malaysia and even during the siege of Marketing in South Africa. Today Standard Chartered is still one of the three banks, which prints Hong Kong’s bank notes. Standard Chartered is the worlds leading emerging markets bank headquartered in London. Its businesses however, have always been overwhelmingly international.

1.2 PAKISTAN Standard Chartered Bank (Pakistan) Limited (Standard Chartered) is a commercial bank. It is principally engaged in providing commercial banking,

consumer

banking,

wholesale

banking,

Islamic

banking,

wholesale banking and small and medium enterprises banking services. The bank also offers 24-hour phone banking, e-statements, SMS banking and online banking services. Standard Chartered Bank (Pakistan) Limited is Pakistan's oldest and largest foreign commercial bank. It employs over 9000 people in it’s and operates through a network of 162 branches in Pakistan Its operating subsidiaries comprises of Standard Chartered Leasing Limited, Standard Chartered Modarba and Standard Chartered Services of Pakistan (Private) Limited. The bank operates as a subsidiary company for Standard Chartered PLC. The bank principally operates in the region of Pakistan. Standard Chartered is headquartered at Karachi, Pakistan. In 2006 Standard Chartered Bank acquired Pakistan's Union Bank. On 30 December 2006, Standard Chartered merged Union Bank with its own subsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixth largest bank.

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Standard Chartered is also committed to all its stakeholders by living its values in its approach towards managing its people, exceeding expectations of its customers, making a difference in communities and working with regulators. Key people: Badar Kazmi CEO, SCBPL

1.3 STANDARD CHARTERED TODAY: Today Standard Chartered is the worlds leading emerging markets bank employing 30,000 people in over 500 offices in more than 50 countries primarily in countries in the Asia Pacific Region, South Asia, the Middle East, Africa and the Americans. The new millennium bas brought with it two of the largest acquisitions in the history of the bank with purchase of Grindlays Bank from the ANZ Group and the acquisition of the Chase Consumer Banking operations in Hong Kong in 2000. These acquisitions demonstrate Standard Chartered firm is committed to the emerging markets, where the Bank has a strong and established presence and where they see their future growth.

2. INTRODUCTION: Human Resource Management is the process of developing, applying and evaluating policies, procedures, methods and programs relating to the individual in the organization. Human resource management includes

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Human Resource Planning, recruiting, selection, training and development, compensation, performance management and employee development. Effective human resource practices relate to company performance by contributing

to

employee

and

customer

satisfaction,

innovation,

productivity, and development of a favorable reputation of the firm in the industry.

2.1 OBJECTIVE: The Research has been undertaken to assess the Training & Development practices of Standard Chartered Bank with the prime focus at how these formulation of strategies and tactics contributes in enhancing the employee’s performance.

2.2 METHODOLOGY: The information related to the project has been collected from the Standard Chartered Bank, Imperial Court. The methodology adopted is as follows: Collection of data by conducting interviews of officials of the Bank Frequent visits Internet Search Study of Bank’s annual reports A comprehensive study of the literature has been carried out the see the factors that help in achieving a competitive advantage in a dynamic banking environment.

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2.3 SCOPE OF STUDY: As we know services are a growing industry of Pakistan and many firms are striving to deliver value added services to the customers. In this regard banks are continuously focusing towards improving their services. Similar is the case with Standard Chartered Bank. This Bank has evolved tremendously during the last couple of years and now has become one of the leading banks in Pakistan. Keeping this in view the study has been undertaken to identify the strategies and plans of the Bank and to identify the methods adopted by the Bank to train and motivate their people and work force.

3. LITERATURE REVIEW Human resources management includes a variety of activities , and among them is deciding what staffing needs an organization has and whether to use independent contractors or hire employees to fill these needs , recruiting and training the best employees , ensuring they are high performers , dealing with performance issues and ensuring the personnel and management practices conforms to various regulations. Activities also include managing their approach to employee benefits and compensation, employee record and personnel policies. HRM practices have shown to be valuable to any company’s success. Thus to be successful in a global market place, the challenge for all businesses regardless of size is to invest in human resources. They need to select and retain talented employees, undertake employee training and

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development programs and dismantle traditional bureaucratic structures that limit employee’s ability to be innovative and creative. The commonly practices HR activities include the following: HR Planning, Recruiting, Selection, Training and Development, Compensation, Performance Management and Employee Relations World-class organization use performance measurement systems to determine whether they are fulfilling their vision and meeting their customer-focused

strategic

goals.

Leading-edge

organizations

use

performance measurement to gain insight into, and make judgments about, the effectiveness and efficiency of their programs, processes, and people. These best-in-class organization decide on what indicators they will use the measure their progress in meeting strategic goals and objectives, gather and analyze performance data and then use those data to drive improvements in their organization and successfully translate strategy into action. Thus in today’s organizations, the use of Strategic Human Resource Management information is to help set agree-upon performance goals, allocate and prioritize resources, inform managers to either confirm or change current policy or program directions to meet those goals , and report on the success in meeting those goals.

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4. DESIGN AND APPROACHES OF SERVICES: 4.1 SERVICES DESIGN: Designing services to accommodate their unique characteristics is challenging. One reason productive improvements in services are so low is because both the design and delivery of service products include customer interaction. The services provided at SC Bank are primarily based upon a few approaches. The outsourcing of payments continues to be a major area of focus for finance and treasury professionals. Over the past three years, competition in Asia has become more intense and this has helped drive the increase in the number of companies that use payments outsourcing as a way to reduce cost and focus on core activities. 4.2 APPROACHES TO REGIONALIZING THE PAYMENTS FUNCTION: “Choose always the way that seems the best, however rough it may be, custom will soon render it easy and agreeable.” Pythagoras Intuitively, there are numerous benefits to regionalizing the payments function of Standard Chartered Bank. This is particularly true where it has the critical mass to justify an undertaking of considerable size and complexity. Frequently mentioned benefits include: economies of scale, increase control managed by a small, high quality team and standardization of processes, amongst others.

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4.2.1 The Ad Hoc Approach: The ad hoc approach is often the default method of regionalization of payments and other cash management activities. This is often undertaken when decision-makers make a priority determination that centralizing cash management activities offers significant benefits to the bank and thus should be implemented. At Standard Chartered this approach is frequently accompanied by minimal investigation and planning, which invariably leads to difficulties and dissatisfaction. The sum total of planning is often reduced to determining which financial institute can best meet the open ended requirements of the bank. Banks may be guilty of reinforcing the ad hoc approach if they do not take the time to understand their customer’s strategies, objectives and type of businesses, and make recommendations that may not have been originally considered. This can be a function of whether the service provider considers the implementation of capabilities as simple sale or the start of a long-term implementation. 4.2.2 The Strategic Approach: The Strategic approach is also a priority determination for implementing an SSC/CAP because it is not a stand-alone process, but rather part of a global or regional strategic planning process that encompasses the entire organizational structure of the Bank. Often this is accompanied by the implementation of a high-end Enterprise Resource Planning (ERP) system, such as Oracle or SAP, which integrates the various units.

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4.2.3 The Pragmatic Approach: The pragmatic approach alone is not a priority but rather a post-hoc determination. The most straightforward and effective questions that the Bank asks itself when taking the pragmatic approach are: Where are we now? Where do we want to be? What is the best way to get there? 4.3 Operational Strategies: To steadily develop the lending business and upgrade the quality of loan assets. In lieu of Islamic banking the Bank aims to aggressively promote feeincome business to raise non-interest revenue sources. To provide efficient services to fulfill customers needs and create a highquality service image. To actively set up business units in major business centers of the country. To aggressively develop international banking operations and seek opportunities to develop strategic alliances with other banks to create new products and services. 4.4 Operation Plans: The Operational Plans of the Bank are as follows: 4

Deposits

5

Loans 11

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Domestic Banking

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Trust Operation

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Treasury Operations

5.

STRATEGIC

HRM

PRACTICES

OF

STANDARD

CHARTERED BANK People, rather the employees are the asset of any organization. An organization, whether it is a manufacturing concern or service oriented, cannot function without the active participation of people. Standard Chartered is the world’s leading emerging markets bank. It employs 30,000 people in over 500 offices in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, United Kingdom and America. 5.1 Human Resource Planning: HR planning is a process, which anticipates and maps out the consequences of business strategy on an organization’s human resources. This is reflected in planning of skill and competence needs as well as total headcounts. Every organization needs to be able to forecast and plan for its future people requirements. At Standard Chartered Bank, human resource planning involves forecasting the numbers of people which will needed by the bank, and then working out the best way of obtaining then as and when they are needed.

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5.2 Forecasting: Forecasting is the major function of the bank’s HR department. The forecasting activities include: ♣ Workforce numbers in sufficient detail to be useful. ♣ Likely changes to the work of the bank. ♣ Work force supply – this involves forecasting the variations in the current work force estimated to occur over the following years. ♣ Impact on budgets and funding. 5.2.1 Who‘s responsible for it? It’s easy to shift responsibility and say that personnel and human resource departments should carry out HR planning, but it should be the concern of every manager. As the Bank operates in a dynamic environment where new and advanced practices are frequently emerging resulting in changing customer’s requirements. 5.3 Good Practice Indicators: Standard Chartered Bank makes sure that effective human resource planning process is in place when Appropriately skilled people are available to be deployed in the Bank’s to meet forecast work demands.

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The Bank’s structure provides with opportunity for appropriate career development, and is perceived to contribute to effective and efficient work practices. Relevant workforce data is readily available to inform management decision making on human resource issues. 6. Standard Chartered Bank‘s Structure: The Bank’s structure is the means by which the work is integrated to ensure that the objectives and activities of individual work teams and departments match the overall goals. The structure of the Bank provides scope for the flexible deployment of people and to promote equity, job satisfaction, motivation and commitment to goals; as well as providing access to career development.

7. Workforce Analysis (Supply and Demand) The effective collection and analysis of workforce statistics trends in the workforce to be considered with the specific requirements for skilled and qualified people to meet the corporate aims to be kept in mind. Workforce

statistics

and

analysis

support

Bank’s

efficiency

and

effectiveness by providing a firm basis for human resource planning. Any information gathering systems in place should support manages and be responsive to their needs as well as being easily accessible in the workplace.

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8. Training & Development Development is critical to our future business success. Our bank’s performance will only continue to improve if we develop our people –you. To develop our people is to invest in our future. We know you have the motivation to succeed, to be good at your job and progress as far as you can. As Standard Chartered, training is a partnership between the employee and the Bank. The Bank provides a framework within which the employee can identify the training and development needs. Such training provides a consistent standard of management learning throughout Standard Chartered. It also enables the employees to take all of the programs or study for individual modules according to their particular development needs. 9. The Initial Two Years: What the employee can expect to experience during initial 2 years training is a blend of core and discretionary elements, such as: Induction i.e. the processes that introduces the new entrant to the bank, the employee’s own business or function and particular department. Training in specific products or technical skills. Work-based assignments in respective business or function i.e. doing a job in a particular department for a period of time.

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Cross-functional attachments – experiencing short period of time spent in another business or support function.

10. Long Term Training: Development and training does not stop after two years. After this initial training, the employees are faced with internal development programs, business-related studies and professional qualifications, and the bank also offers the opportunity to develop skills through externally accredited courses. These are designed in conjunction with top universities and business schools including postgraduate, MBA. Accreditation

Internal

External Schools

Executive Development

MBA

Diploma in Management

Certificate in Management

Foundation Course Induction Course

11. EMPLOYEE ORIENTATION AND TRAINING 11.1 Orientation:

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Every staff member joining Standard Chartered Bank has to attend a 2-day comprehensive orientation to get a feel about the Bank and its business. This orientation program provides a good chance to meet with seniors & colleagues and to build up the team spirit. 11.2 Product Training: Product training is provided e.g. cash product training, operational training etc. to help the related staff to learn more about the products that the Bank is providing. 11.3 Skill Training: The bank provides a lot of skill related training e.g. credit workshop, sales & negotiation skills, project management, etc. to help staff enhance their skill in particular aspects. 11.4 On-job Training: Staff members are continuously involved in the learning process in the form of on-job training. Thus, a lot of on-job training opportunities and job rotation to increase staff’s exposure are provided. 11.5 Self-learning: The bank sends out CDs and books to staff for them to study on trade knowledge, credit knowledge, etc. and staff will decide when he/she will attend the Trade Skill Assessment (TSA) and Credit Skill Assessment (CSA). 17

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11.6 Management Development Training: In this training program, the employees are given strategic perspectives and business goals management skills; people management, networking and customer focus abilities to better understand and manage their jobs.

11.7 Specific Competency Training: Specific Competence Training is to ensure that the staff excels in product knowledge, regulatory and unique techniques needed for the particular position. 11.8 Learning and Development: Standard Chartered recognizes that it is essential that they have the best people equipped with the right skills and knowledge to perform their roles to the highest standards. They went talented professionals, who seek selfdevelopment opportunities including continuing professional development. In return the Bank offers excellent training and development. They focus development on where they believe that they will get the greatest return, by developing employee’s strengths. 12. Recruitment: The Bank’s Management Trainee Development Scheme takes place in Karachi,

where

they

recruit

management

trainees.

Alternatively,

candidates can apply to their local cities. It is the aim of management to 18

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recruit young, bright, energetic and enthusiastic graduates and post graduates.

12.1 Who are they recruiting? Bright, young graduate or a postgraduate, who cannot wait to start his/ her career in the financial services industry. Consistent academic performer throughout his/her education. Career-oriented person Energetic, ambitious, innovative and business-oriented person. Recruitment Criteria: Standard Chartered Bank recruits the most talented individuals from the external market to supplement their internal pipeline of talent. Their Human Resources department provides guidance on the us of psychometric tests and has robust recruitment criteria to ensure that all candidates are treated fairly, equally and with respect. It has a global Graduate Recruitment Program; where in the region of 150 graduates are recruited each year on a management trainee program across all businesses, functions and countries. 12.2 Selection: Standard Chartered selects employee based on knowledge, skills and talent. They are committed to providing equality of opportunity to all employees, regardless of gender, race, nationality, age, disability, ethnic origin, or marital status. They are committed not jus to providing equality of opportunity to all employee, but also identifying what unique strengths 19

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each individual brings to the roles they carry out and the development of these strengths. 13. Employee health, well-being and safety: Standard Chartered Bank believes that the health and well-being of their employees and their families is important. They are concerned not only about the physical health of their employees, but also their mental and emotional well- being. Standard Chartered has policies & practices that provide for a safe and healthy working environment. They place importance on the safety and well-being of their staff, communities and on the effect it’s working and operational processes have on the environment. They are continually developing policies and practices designed to maintain the highest appropriate standards. 13.1 Reward & Recognition: Standard Chartered Bank aims to reward the talented and high performing employees competitively. They regularly conduct salary surveys to ensure that the reward package remains competitive in the market place. They encourage continuous discussion; encourage regular review of employee’s performance and development. This provides feedback to the staff about how they are doing. The management links this to both financial and nonfinancial recognition. In addition to this, the bank provides various incentives in the form of bonuses to encourage the employees and motivate them to continue with their high performance. These include: ♣ Spot Award + Rs. 5000 as cash prize ♣ Surprise Award 20

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♣ Best Performer Award ♣ Service Quality Award ♣ YES (Year of Excellent Services) Award 13.2 Quality of Work Life: This means a job that not only is reasonably safe but also for which the pay is equitable. At Standard Chartered Bank every employee in confident of his job security and has the assurance that he would remain on the job for the agreed period. In addition to this, the workload is equitable divided between the employees and therefore, they work with peace of mind and tranquility, resulting in the overall enhanced performance of the employees. 13.3 Mutual Commitment: Both the employees and the management try to meet the common objectives. They coordinate their activities to ensure that they are heading towards achieving the established goals and meeting the set targets within the specified time frame. 13.4 Mutual trust: At Standard Chartered Bank prevails an environment of confidence and mutual trust? The documented employment policies are honestly implemented to the satisfaction of both management and employees.

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14. Job Design: Job design comprises of six components. These are: 14.1 Labor Specialization: The Bank aims at hiring specialized people and their recruiting criteria are based on their knowledge, expertise, past working experience and their exposure to the professional fields. Employee wages are set in accordance with the aforesaid recruitment criteria and most of them are intent with what they earn at Standard Chartered Bank 14.2 Job Expansion: The Bank improves the quality of work life by assigning various tasks to the employees so as to equip them with the different services offered by the Bank. Job expansion includes job enlargement, rotation, enrichment and empowerment. 14.3 Psychological Components: For enhancing the skills and abilities of the work force, the psychological components of job design are also catered for by Standard Chartered Bank. These psychological components focus on how to design jobs that meet some minimum psychological requirements of the employees. These

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components are utilized in accordance with Core Job Characteristics, which suggests that the jobs designated to the various employees in the bank include the following five aspects: ♣ Skill Variety ♣ Job Identity ♣ Job Significance ♣ Autonomy ♣ Feedback 14.4 Self-Directed Teams: A self-directed team is a group of empowered individuals working together to reach a common goal. At Standard Chartered Bank, these teams are found in almost every department to achieve the set targets. These teams are an integral part of the personal loans, sales and credit cards department where they are established to achieve both, the short-term as well as long term objectives. 14.5 Motivation and Incentive Systems: Sometimes the psychological components are not enough for motivating the employees. In this case, monetary incentives play a vital role for increasing the commitment of the employees toward their jobs and in return enabling them to have job satisfaction. These monetary incentives and rewards are given in various forms to the employees who act as a strong motivational factor. These could be given as:

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• Spot Award + Rs. 5000 as cash prize • Surprise Award • Best Performance Award • Service Quality Award 15. Performance Management: Traditionally, the formal performance appraisal system has been viewed as the primary means for managing employee performance. Performance appraisal is an administrative duty performed by managers and primarily the responsibility of the HR function. Performance management is the process through which managers ensure that employee activities and outputs are congruent with the organization’s goals. It is central to gaining competitive advantage. 16. Components of Performance Appraisal: At Standard Chartered Bank the components of performance appraisal are in respect of the five W’s that include: Who, What, Why, When and Where of performance appraisal. Who: All employees work under the supervision of managers. Therefore, the manager is the best person to do performance appraisal of his subordinates. What: The appraisal at the organization includes appraisal of current performance as well as the future potential. It also includes evaluation of human traits such as behaviors, interaction with other staff members etc.

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Why: It is concerned with creating and maintaining a satisfactory level of performance of employee in the present job, highlighting his needs and potential for personal growth. When: It is carried out on yearly basis. The manager uses good work as opportunity to provide positive thrust and uses poor work as a basis for training. Where: The performance appraisal is done in a cordial and friendly environment. 17. Approach of Measuring Performance: The performance of the employees can be determined by making an overall comparison among individual‘s performance. Hence a performance measurement system is developed that incorporates a tool for measuring performance.

18. Appraising Employee Performance: 18.1 Individual Performance Management: A longstanding question that Standard Chartered Bank and many other organization are still grappling with is whether and how to reward good performance (or, conversely, how to deal with persistent poor performers). One approach used by the bank is to make salary increments or progression on the pay scale conditional on good performance.

18.2 Performance Management at Senior Levels:

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Typically, performance management systems for senior officials include elements additional to performance-pay, such as time-limited contractual appointments. The Bank has adopted this approach. Key features of its system include the following: Senior officials are recruited to a unified career structure known as Grade A, which incorporates most top-level positions. On the basis of evaluation, the senior position employees are paid a performance bonus. 18.3 Linking Performance to Promotions: Some have argued tying career advancement to performance is more important than linking performance and pay. Whereas the benefits of pay for performance are uncertain, particularly in the lower echelons, there is no doubt of the need to ensure that the best people rise to management levels.

19. Analysis 19.1 Training Training refers to a planned effort by a company to facilitate the learning of job-related knowledge, skills, or behavior by employees. Standard Chartered provides a framework within which the employee can identify the training and development needs. Such training provides a consistent standard of management learning throughout Standard Chartered. It also enables the employees to take all of the programs or

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study for individual modules according to their particular development needs. Development Programs are carried out in the first two years of joining, applicable to all management trainees, across the Bank. Each business and function would decide the appropriate development needs for each individual, within this overall framework. 19.2 Performance Appraisal: Each organization must create and communicate performance measures that reflect its unique strategy. Performance management is the process through which managers ensure that employee activities and outputs are congruent with the organization’s goals. It is central to gaining competitive advantage. A well-executive performance management plan enables an organization to achieve critical goals such as: 1 Recognize the efforts and contributions of current staff. 2 Reward staff with compensation directly linked to performance. 3 Motivated staff to improve performance. 4 Orient staff towards goal achievement. 5 Retain key employees through the use of competitive compensation programs. 6 Attract quality employees with an effective performance management system.

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