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HR Practices in Bank Alfalah Limited Name: Raheel Mahmood Qureshi Registration No: 1432-408014 Class: M.B.A evening (HRM) 8 th Qtr Submitted To: Sir Pervaiz Nusrat 1

HR Practices in Bank Alfalah Limited

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Page 1: HR Practices in Bank Alfalah Limited

HR Practices in Bank Alfalah Limited

Name: Raheel Mahmood Qureshi

Registration No: 1432-408014

Class: M.B.A evening (HRM) 8th Qtr

Submitted To: Sir Pervaiz Nusrat

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Page 2: HR Practices in Bank Alfalah Limited

TABLE OF CONTENTS

What are the HR Practices?

Emergence of Banking

Overview of the Financial Sector in Pakistan

Introduction of Bank Alfalah Limited

Vision & Mission

Board of Directors

Organizational Structure

Core Values

Goals & Objectives

Product & Services

HRM Process in Organization

Functional Overview of HRM Process in Organization

Recruitment & Selection of Employees

Employee Training & Development

Performance Management

Performance Appraisal

Employee Compensation & Benefits

SWOT Analysis

Customer & Employee Problems & Solution

Conclusion

Recommendations

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Appendices (Employee Questionnaire)

References

What are the HR Practices?

Human resource management (HRM) is the strategic and coherent approach to the management of an organization’s most valued assets - the people working there who individually and collectively contributes to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple sense, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

Features:

Its features include:

Organizational management

Personnel administration

Manpower management

Industrial management

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms, although these normally refer to the relationship between management and workers and the behavior of workers in companies. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.

Human Resource Management (HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are

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expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organizations.

Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organizations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled"

While Miller (1987) suggests that HRM relates to:

"Those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage"

Academic theory:

The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines; therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial relations, industrial engineering, sociology, economics, and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management or in Human Resources and Industrial Relations. One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:

Strategic business partner

Change management

Employee champion

Administration

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However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen rather as reactive as strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their

activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value.

Business practice:

Human resources management comprises several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.

Workforce planning

Recruitment (sometimes separated into attraction and selection)

Induction, Orientation and On boarding

Skills management

Training and development

Personnel administration

Compensation in wage or salary

Time management

Travel management (sometimes assigned to accounting rather than HRM)

Payroll (sometimes assigned to accounting rather than HRM)

Employee benefits administration

Personnel cost planning

Performance appraisal

Labor relations

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Functions:

The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have 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 your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have—and are aware of—personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, e.g., career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, e.g., "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone tremendous change over the past 20–30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

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Emergence of Banking:

The word “bank” is derived from “Bancus” or “Banque”. History of banking is traced to 2000 B.C in Greece. Priest and Goldsmiths acted as financial agents by keeping money and valuables of people in temples in strong safes. Thus, the first stage in the development of modern banking was accepting of deposits of cash from those who had surplus money with them.

The Goldsmiths issued receipts for the money deposited with them, which began to pass from hand to hand in settlement of transaction as people had confidence in the integrity and solvency of goldsmiths. The receipts were drawn on a way that it entitled the holder to claim that specified amount of money from goldsmiths. These receipts were the earlier bank notes. Thus the second stage in the development of banking was the issues of bank notes.

The goldsmiths discovered all the people who had deposited money did not come to withdraw their finds in cash, only a few people presented the receipts for encashment during a given period of time and they also found that most of the money deposited with them was lying idle. They also found they were being constantly requested for loan on good security. They thus thought it profitable to lend at least some of the money with them to needy persons. This proved profitable for them. Instead of charging interest from deposits, they began to give them interest on money deposited with them. This was the third stage in the development of banking.

Through experience, banks came to know that they could keep a small proportion of total deposits for meeting demands of customers for cash and could easily lend the rest. They allowed deposits to draw over and above than the money standing to their credit. They thus allowed the overdraft facility to their deposits and this was the fourth stage in the development of banking. Every bank issued receipts and most allowed overdraft facility and this caused too much confusion the systems. In order to earn profits, banks did not keep adequate reserves to meet demands of customers for cash. This failure on the part of bankers to return money caused widespread distress among people.

In order to create confidence among the people, steps were taken to regulate the banking. A conference was held in Nuremberg in 1548 where it was decided that a bank should be set up by the state, which would streamline the banking organization and technique. The first central bank was thus formed in Geneva in 1694. The responsibility of issuing notes is now entrusted to a central bank in each country.

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With passage of time, activities of commercial bank increased. They dealt with large number of issues such as obtaining funds, advancing loans to business, farmers, households, making investment in stocks, discounting bills of exchange etc. commercial banks are now multi-service organizations and play a very important role in financial markets.

Overview of the Financial Sector in Pakistan:

The history of banking system in Pakistan dates back to independence of Pakistan in August 1947

when various banks transferred their Head Quarters and funds to areas likely to fall in India. This

trend emerged due to dominant role of Hindus in pre-partitioned Indian banking system.

According to various books there were 3496 branches of Indian scheduled banks in the undivided

sub-continent as on 1st March 1947 out of which only 487 branches were located in areas presently

constituting Pakistan. However the number of scheduled banks drastically declined to 195 from 487

immediately after partition. At the time of partition there were only two banks having the honor to

be first commercial bank of Pakistan namely Habib Bank Ltd., which was set up in 1941 with its

Head Office in India and the Australasia Bank Ltd., which was established in 1944 with its Head

Office in Pakistan.

By following the partition, an expert committee was set up and this committee recommended that

the Reserve Bank of India being the Central Bank of the undivided India should continue to

function as Central Bank of Pakistan and the Indian currency notes would continue to be legal

tender in Pakistan till 30th September 1948. Subsequently it was decided to have separate Central

Banks and the State Bank of Pakistan was set up and started functioning from 1st July 1948.

Thus the history of Banking system in Pakistan started with the establishment of the State Bank of

Pakistan which was inaugurated by Quaid-e-Azam Muhammad Ali Jinnah on 1st July, 1948.

Consequently three banks were established which include Muslim Commercial Bank Ltd. formed in

September 1948. Bank of Bahawalpur in October 1948 and National Bank of Pakistan in 1949

Habib Bank also transferred its Head Office from Bombay to Karachi due to partition in August

1947 and it was assisted by the State Bank to finance domestic trade of the country.

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Introduction to the Organization:

Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 282 branches in 98 cities, with the registered office at B.A. Building, I.I. Chundrigar, Karachi.

Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services.

This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years, we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.

Chairman’s Message:

"Our core philosophy of honesty, transparency in customer dealings, product innovation, excellence in customer service”.

Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in expanding our branch network and deposit base, along with making profitable advances and increasing the range of products and services. We have made a break-through in providing premier services at an affordable cost to our customers.

Keeping in view our valued clients and the need for constant and effective communication of information, we have designed this website to be as user-friendly as possible.

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As we pursue the path of excellence, customer satisfaction remains our priority. It is only when we know our customers better, can we deliver a higher quality of services, thereby adding synergy to our existing management expertise, financial strength and profitability.

The bank perceived the requirements of customers and matches them with quality products and

service solutions. During the past five years, bank has emerged as one of the foremost financial

institution in the region endeavoring to meet the needs of tomorrow as well as today. To

continually upgrade the quality of service to the customers, training of team members in all the

integral aspects of banking, customer service and IT was specially focused.

The portfolio concentrates on all aspects of

Conventional banking as well as the Financial needs of

corporate sector. Dynamic and high value product includes

Car Financing, Home Financing, Rupee Travelers Cheques,

Credits Cards, Debit Cards, on line Banking, ATM and

consumer durables. In addition to this, Islamic Banking

Division is a recent initiative, which operates as separate

branch. It offers Shariah Compliant products through a

network of five branches, which has been increase to 98 by the year 2010

The bank is committed to combine all it s energies and resources to bring high value, security

and satisfaction to its customers, employees and shareholder. The Bank has invested in

revolutionary technology to have an extensive range of products and services. This facilitates

commitment to a culture of innovation and seeks out synergies with client and service providers

to ensure uninterrupted services to its customers.

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V I S I O N

“To be the premier organizations operating locally and

internationally that provided the complete range of

financial services to all segments under one roof”

MISSION

“To develop and deliver the most innovative products,

manage customers experience, deliver quality service that

contributes to brand strength, establishes a competitive

advantage and enhances profitability, thus providing

value to the stakeholders of the bank

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Board of Directors:

H.E. Sheikh Hamdan Bin Mubarak

Al Nahayan

Chairman

Mr. Mohammad Saleem AkhtarChief  Executive Officer

Mr. Abdulla Nasser Hawalileel Al-Mansoori

Mr. Abdulla Khalil Al MutawaMr. Ikram Ul-Majeed Sehgal

Mr. Khalid Mana Saeed Al Otaiba

Mr. Nadeem Iqbal Sheikh

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Organizational Structure:

President (CEO)

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

Officers Grade I, II, III

Clerical Staff Non-Clerical Staff

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Cashier Typist Clerks Guards Messengers & Assistants

Core Values:

Our core values and corporate culture is based on the ideology of superior personalized service and the extra mile which the Bank is ever willing to go for its customers and employees. This trait alone separates us form other financial institutions and is also a testament to our slogan of The Caring Bank. Bank Alfalah, besides being the most rapidly expanding Bank in the market, is also the choice of many career focused individuals since it offers stability of career, tremendous growth & personal development opportunities coupled with a nurturing work environment.

Goals & Objectives:

Goals and objectives are factors through which the company’s devotion and commitment to the

job can be seen. If the goals are realistic and achievable, than surely that organization is doing its

job. Bank Alfalah also has certain goals and objectives which it is trying to achieve, through its

various strategies and operations. The goals and objectives are mentioned below:

1. To create a sound base, and through efficient systems achieve modern banking

throughout Pakistan.

2. By the end of every accounting year there is an increase in deposits. As the

deposit rate of during 2002 was approx 52 Million and the same has been

increased in 2003 by 77 Million.

3. To create unit banking network in all the branches of Bank Alfalah, the end of the

year. This means that all the operations of the bank, i.e. deposits to advances,

imports, exports, L/C Opening, foreign currency and many more aspects under

one roof, so that the customer can be facilitate in one visit.

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4. Islamic Banking is one of the goals of Bank Alfalah though it has been initiated in

the last fiscal year and it is very acceptable for general public.

5. However, there is lot of work to do for successful implementation of the Islamic

Banking Plan. In this regard the Bank is opening specific Islamic Banking Branch

under the supervision of its Islamic Banking Division.

Product & Services:

With the mission to provide all-encompassing banking services to the customers, Bank Alfalah

has a uniquely defined menu of financial products. Currently it is one of the most comprehensive

portfolios of personalized financial solutions that are custom-tailored to serve the requirements

not only of conventional customers but also fulfill the needs of the corporate sector:

Car Financing

Rupee Travelers Cheques

Online Banking

Credit Cards

ATMs

Home Financing

Islamic Banking

Corporate and Structured Financing

Car Financing:

Car Financing is one of the major renowned products of Bank Alfalah and can be utilized in

terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing

Facility (only for Alfalah Customers) and it is characterized in terms of:

Lowest Mark up

Lower Insurance

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Quick Processing

Lower Down Payment

Home Financing:

Major features of Bank Alfalah Home Financing are Lowest

Mark-up, Quick Processing, Multiple Repayment Options and

Free Valuation. It has been bifurcated in terms

of “Home Buyer, Home Construct, Home Improver, Home

Balance Transfer Facility”.

Financing Limit : up to Rs. 10,000,000/-

Tenure : up to 20Years

Equity Participation : 30% Borrower / 70% Bank

Rupee Travelers Cheques:

Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel agents,

hotels business establishments and all over the country and abroad. This service is being offered to

facilitate instant fund availability to travelers and business people who used to carry a large sum of

money with them.

Credits Cards:

Bank Alfalah Visa Card is everywhere and globally

Accepted and welcomed at locations displaying the

VISA logo. It is accepted at nearly 30 million merchants16

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& 870,000 ATMs in more than 150 countries around the

globe and over 10,000 establishments in Pakistan. Alfalah VISA pays for shopping, travel,

entertainment, meals and much more.

Debit Cards:

Bank Alfalah Limited presents Alfalah Hilal Card, the first

Visa Electron International Debit Card which gives an

unlimited access to current / savings account with a simple

swipe, at millions of retail shops and ATMs, worldwide. The

Alfalah Hilal Card comes with a host of conveniences and

benefits combined with the wide reach of Visa Network

enabling it to be accepted at more than 840,000 ATMs and

13 million retail outlets around the world, making it the most

acceptable Debit Card available in Pakistan.

On Line Banking:

To provide enhanced and value added products to

customer bank is constantly striving for

additional facilities. Bank provide fully

automated on-line telephone banking facilities to

its customers enabling them to carry out banking

transactions like balance inquiries, statement

requests, product information and exchange rate.

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Automated Teller Machine (ATM):

The bank offers 24 hours self service banking facilities to it customers on country wide basis

through deployment of Automated Teller Machine. This system allows the banking facilities

such as cash with drawls, cash deposits, and funds transfer, balance inquiries, account

statements. Electronic cash dispensing facilities are available in major cities of Pakistan. All

ATMs are linked through a state-of-the-art Satellite Based Communication System which offers

24 hours real time service.

Islamic Banking:

A separate division is a recently initiated, which operates as separate branch. It offers Shariah

Compliant products through a network of five branches, which will increase to 50 by the year

2007. Islamic Banking has launched following products with the perception that these are in

accordance with the Sharia Principles.

Alfalah Masharaka Homes

Murabaha Finance

Alfalah Car Ijarah

Corporate and Structured Financing:

The portfolio concentrates on all aspects of conventional banking as well as the financial needs

of corporate sector including dynamic and high value product.

Loaning against securities

Letter of Credit

Letter of Guarantee

Demand Finance

Cash Finance

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Human Resource Management Process in the Organization:

Man-power (Human Resource) is the most important factor of production. Other factors are also important but these are easily available. If we have funds we can easily buy the piece of land at our desired location and we can buy latest machinery and plant and equipment from the market. But the same is not true for Human Resource. It is a tough task to search for and recruit the suitably skilled and qualified persons. Than it is necessary to train them and develop them to fit in the organization and become a useful source. Next task is to retain them because if a properly trained and skilled person leaves an organization, it will negatively affect the organization.

These all activities i.e., staffing, retaining and development of Human Resources is called Human Resource Management and it is a continuous process. There is always a situation in the organization that some people join an organization while others leave it. Hence HRM process is an ongoing process. We can categories this process in to five major tasks.

Staffing.

Retention.

Development.

Adjustment.

Managing change.

Staffing:

It is a process of

Identifying jobs or work requirements.

Determining the number of persons required with necessary education and skills and

Recruiting, selecting and promoting the deserving persons.19

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Retention:

It is an activity to retain the employees in an organization. This task is achieved by

Rewarding the efficient employees.

Ensuring proper inter personal relationship among the employees and management and

Providing and maintaining safe and healthy working environment.

Development:

It is an activity to enhance the knowledge, abilities and skills of the employees by providing them with necessary training, refresher courses and study opportunities so that their improved competencies add to the over-all improvement of the organization.

Adjustments:

Enabling the employees to comply with the policies of the management, office orders and organizational culture

Managing Change:

It is the activity to prepare the organization as well as employees to be ready to adapt to the changes taking place in the market due to improved technology and be ready to face the challenges caused by “change in the business environment”.

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Functional Overview of HRM Process in Organization:

Human Resource Planning:

At Bank Alfalah Limited, Human Resource Planning involves a decision making in three areas of combined activities:

Step-I The bank identifies its organizational needs and then acquires a right king of human resource accordingly.

Step-II Bank motivates them to achieve excellent performance by giving them different sorts of targets according to their job requirements.

Step-III It also creates an interactive link between the employee goals and the organizational goals.

Job Description:

It is descriptive in nature and constitutes a record of existing and additional job facts. The order of job description is as follows:

Job identification

Job summary

Duties performed

Supervision given and received

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Recruitment & Selection of Employees:

Selection of the right people for the job is the first step towards developing an efficient

institution. Great stress has therefore been laid on ensuring that the recruitment process at the

Bank Alfalah is highly competitive, transparent and merit based. As a result of this conscious

policy, we have been able to attract some of the top talent in the country in the fields of

Economics, Finance, Business administration, IT, Accounts and Audit as well as Statistics.

In Bank Alfalah Recruitment of employees starts from:

An analysis of the job to be done (i.e. an analytical study of the tasks to be performed to

determine their essential factors) written into a job description so that the selectors know what

physical and mental characteristics applicants must possess, what qualities and attitudes are

desirable.

What Bank Alfalah looks for when recruiting personnel?

Team players with excellent interpersonal skills Knowledge and use of information technology

Strong analytical and problem solving skills

Excellent written and verbal communication skills in English

The main sources of recruitment in Bank Alfalah are:

Internal promotion and internal introductions (at times desirable for morale purposes) Advertising (often via agents for specialist posts) or the use of other local media.

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In Bank Alfalah Interviews are carried out by individuals (e.g. supervisor or departmental

manager) in the form of sequential interviews by different experts and can vary from a Five

minute 'chat' to a process of several days. Ultimately personal skills in judgment are probably the

most important, but techniques to aid judgment include selection testing for:

Aptitudes

Group problem solving

Before letters of appointment are sent any doubts about medical fitness or capacity is resolved by

requiring applicants to attend a medical examination and a background investigation of

employees is also conducted.

Orientation:

Introduction of a new employee to his/her job and the organization. Orientation is designed to

provide new employees with the information needed to function comfortably and effectively in

the organization. In Bank Alfalah objective of orientation is to inform all new employees with

the basic structure and rules of bank. Human resource Department is responsible for orientation.

With the first week of the employment employee go through Department orientation.

Employee Training & Development:

Bank Alfalah’s management believes in developing the potential of the Bank’s employees to the fullest extent. Training & Development Centre of the Bank are housed in state of the art facilities at Karachi and Lahore. The centers are responsible for providing multi-level high quality training programmes to all staff members in the following areas:

Consumer Banking Operations

Credit Marketing & Credit Proposals

Credit Administration/Documentation

Marketing & Selling skills 23

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Customer service skills

Leadership and Management Skills

Personal effectiveness and skills

It is obligatory for each staff member of the bank to attend at least two days of training in a calendar year. Wherever the Training Department is unable to provide focused training for certain groups of staff, reputable external training providers are invited to fill the gap.

Performance Management:

Performance management includes activities to ensure that goals are consistently being met in an

effective and efficient manner. Performance management can focus on performance of the

organization, a department, processes to build a product or service, employees, etc.

Performance Appraisal:

It is a structured discussion between employee and supervisor. It provides an opportunity for the

supervisor to recognize an employee’s achievement, offer suggestions for improvement when needed,

discuss job responsibilities, define objectives, counsel for career advancement, and justify a pay

adjustment. Regarding the performance appraisal, bank adopts both types of approaches.

a. Traditional Approach:

The traditional approach is primarily concerned with the overall organization and

its past performance. In Bank Alfalah, overall performance is reviews at branch

level. Each branch is liable to show its performance in a positive direction

according to set goals.

b. Development Approach:

This approach viewed the employees as individuals and has been forward looking

through the use of goal setting. All the employees in the each of the branches are

given a performa. Every employee working in the bank is assigned targets,

usually their target are in the form of amount. The performances of all the

branches are reviewed in the end of December. Till yet Bank Alfalah, has no

computerized system to assess the performance of employees24

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Performance Appraisal Process:

The performance appraisal process in the Bank Alfalah Ltd. consists of four inter-related

steps:

i. Establish a common understanding between the manager (evaluator) and

employee (evaluate) regarding work expectations, mainly the work to be

accomplished and how those work are to be evaluated.

ii. Establish ongoing assessment of performance and the progress against work

expectation.

iii. Formal documentation of performance through the completion of a performance

and development appraisal form appropriate to the job family.

iv. The formal performance and development appraisal discussion, based on the

completed appraisal form and ending in the construction of a development plan.

Employee Compensation & Benefits:

Reward Management elaborates how people are rewarded in accordance with their value to an

organization. It is concerned with both financial and non-financial rewards. A reward system of

an organization consist of integrated policies, processes and practices for rewarding its

employees in accordance with contribution, skill and competence and their market worth.

In Bank Alfalah the elements of reward management system are consists of Basic Pay; the fixed

salary or wage which constitutes the rates for the job. This rate is varied in a skill based or

competence based system according to the individual’s skill or competence. The rates are fixed

by managerial judgment of what is required to recruit and retain the employee.

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In Bank Alfalah there is no any concept of individual performance related pay except to the Business Development Officer. Business Development Officers are those who are hired at contractual basis. They are assigned different targets. If they exceed to the targets they can enjoy the individual performance related pay otherwise they are fired

Bank Alfalah offers highly competitive salaries and benefits to both fresh recruits and experienced professionals. Once part of the Alfalah family you can expect both monetary and non monetary rewards based on performance. Some of our benefits include:

Attractive Salary Package

Employee Provident Fund

Gratuity Fund

Medical Insurance (Self, family and parents)

Life Insurance

Performance based promotions & bonuses

Various types of staff loans

Assistance in pursuing higher education

Rewards on completing professional qualifications

Managerial Practices:

Aggressive Banking: Bank Alfalah expanding their network of Islamic Banking. Bank Al Baraka has been serving the Islamic banking sector since 10 years and they have only 5 branches in Pakistan. On the other hand bank Alfalah has established 20 branches in a year.

Motivation: Bank Alfalah motivating their employees by giving them comprehensive benefits and professional environment within the organization, which enhances the

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performance of the employees. Bank motivates their employees by giving 3 bonuses in a year.

Benefits:

Monitory Benefits: Monitory benefits are given to the employees on the basis of their performance like salary rise, cash prize.

Grade Promotion: Bank also provides benefit to their employees in the form of grade promotion. Grade promotion motivates the employee to do their work efficiently and effectively.

Abroad Posting: Bank benefit their employees by sending them on overseas posting where they can enhance their professional skills and get handsome financial benefits in terms of salary or fridge benefits.

Controlling: Bank has proper setup of controlling the day to day transactions and operational affairs. Bank controls the operations through a proper check and balance system and properly monitor the daily work.

Internal Control Unit: Bank has an Internal Control Unit that monitors the daily transactions within the organization and keeps informing the management about the rules and policies violation. Internal control unit has a proper check and balance on operations and other bank departments.

Internal Audit: Internal audit is a tool to have a proper check on daily working in a bank. Internal auditor has to point out the discrepancies found during audit. Internal auditors hand over the audit report to the audit chief and he hand over that to the management. Management overlooks all the discrepancies and try to reduce the violation and also

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took the necessary actions. Internal audit conducted in a bank twice a year.

External Audit: External auditors are the representatives of state bank of Pakistan. State bank assigned them to audit the banks the find out the lapses or discrepancies according to the rules and regulations of state bank of Pakistan. State bank imposed penalty on bank if they found any discrepancies related to banking practices or procedures. External auditor hand over the audit report to state bank of Pakistan and SBP handover the report to the management along with the debit advice in form of penalty and management overlook the discrepancies and take necessary actions. External audit conducted once in a year. Bank Alfalah has a Chartered Accountant Company on his panel who prepare and overview the financial reports of the bank Taseer Hadi & Co. is a chartered firm which is on the panel of Bank Alfalah.

SWOT Analysis:

Strengths:

Since, inception of Bank Alfalah, it has moved rapidly in expanding branch

network and deposit base, along with making profitable advances and increasing

the range of products and services bank have made a break-through in providing

premier services at an affordable cost to our customers.

Bank Alfalah has been awarded an AA- (double A minus) and an A1+ (A one plus)

in the long and short term respectively by the PACRA. These rating denote very

high credit quality and very low expectation of credit risk.

The main source of a financial institution is public savings in this regard public

confidence plays a vital role. So, the confidence of customers is the main strength

of Bank Alfalah. In order to maintain an effective communication of information

regarding the need of valued client’s bank has designed its website to be as user-

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friendly as possible. This facilitates to pursue the path of excellence and customer

satisfaction through delivering higher quality of services, thereby adding synergy to

our existing management expertise, financial strength and profitability. Hence, it’s

a channel of communication for the delivery of quality products and services that

enhance value

Weaknesses:

As per Bank policy, advertising and publicity is not extensively emphasized.

Through advertisement customers could be kept abreast with the products and

services. The main focus of Bank is major cities of Pakistan. It is direly needed to

extend its network and people should be educated about the functioning of bank.

Since, Bank Alfalah has strong set up in UAE and Middle East, therefore,

specifically those areas of Pakistan should be targeted where large numbers of

people are working abroad.

Opportunities:

The life cycle of an organization is comprised of threats as well as opportunities. If

we say, today the rates of challenges are too high but simultaneously the rate of

opportunities is also high. It is mandatory to try to make progress with consistency

as well as to adapt changes with the needs of time, in order to cope up with both

conditions. In the prevailing scenario, Bank Alfalah could penetrate further and

could capture various corporate customers in addition to the retail customers by

expanding their network. In addition to the excellent routine banking, it has earned

a good name by offering special products like car financing, home financing and

credit card. So, the penetration of these products could enhance the market share.

In the rapidly growing industry of Pakistan, launching of another SBU, Al-Warid

Mobile will be an excellent addition towards the credibility as well as enhancement

of Bank Alfalah’s market share.

Bank Alfalah has launched another division known as Islamic Banking. This new

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aspect will also attract a large number of people, who don’t want to deal with

interest bearing banking. Hence, it’s a new opportunity where competitors are

limited.

Threats:

While doing business, threats are part of the game. Especially, in this era, most of

the financial institutions are working as Private Limited Company and facing or

have a fear of threat from their competitor as well as new entrants. In order to

maintain as well as to enhance the market share, banks always try to introduce new

schemes / packages. Hence, the environment is very much innovative and adaptive

to the needs of customers.

Though Bank Alfalah has a strong footing and maintain a good number of loyal

customer, still bank has threats in various sectors:

In Car Financing MCB & UBL are threats however, the expected car

financing of RBS could also be a threat for Bank Alfalah.

In Home Financing Union Bank or to some extent NBP are threats.

In credit cards, Bank Alfalah captured the market share of Citi Bank and

Standard Chartered Bank. Till yet the bank has no prominent threat. But, the

launch of Askari Bank Master Card and Union Bank Card might be threat

after some time.

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Customer & Employee Problems:

Customer Problems:

It seems that the priority is given to the corporate customers in Bank Alfalah as the individuals

from middle class have to remind the management of certain branch to do the needful for them.

Customer is the king and customer always right. Bank is earning profit from the customers. Bank

should have a proper relationship with corporate as well as individual customers. It is

recommended that the management should stress on having satisfactory relationship with

individual customers because they can also provide the revenue in term of profit.

Employee Problems:

Insufficient Employees:

To compete in the banking industry Bank Alfalah should have enough employees to facilitate the

customers, and divide the workload of the existing employees by hiring new people, because the

bank cannot use the alternative to reduce the number of customers and loosing the market share.

Working Hours:

Bank Alfalah although providing the customer service in better way but there is a lot of work to

do in a routine banking to the employees due to which they work for long time. Management

should gave relaxation to the employees by hiring new professionals and reduce the working

hours.

Solution to the Problems:

Customer Problems Solution:

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Customer is the king and customer always right. Bank is earning profit from the customers. Bank

should have a proper relationship with corporate as well as individual customers. It is

recommended that the management should stress on having satisfactory relationship with

individual customers because they can also provide the revenue in term of profit.

Employee Problems Solution:

Insufficient Employees:

The Bank should divide the workload of the existing employees by hiring new people, because

the bank cannot use the alternative to reduce the number of customers and loosing the market

share.

Working Hours:

Management should give relaxation to the employees by hiring new professionals and

reduce the working hours.

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Conclusion:

The economy of the country is booming and with the investment favorable policies and their

smooth implementation, the role of banks in today’s economy have become an important one.

The banking industry is also reaping the fruits of this economic boom by growing rapidly over

the past few years. There are a number of mergers happening in the economy with foreign

investments coming into the banking sector. The bank has seen phenomenal growth in the past

few years by opening more branches in the country, increasing the deposit base, while also

increasing the assets and profits of the bank.

The services that Bank Alfalah provides have a great market penetration not only because of

their features but also the profit and markup rates that they charge. Also the products that Bank

Alfalah provides cater to sector of the economy.

The top management of the bank is always developing strategies that cope with unexpected

challenges to deliver products and services more efficiently

Furthermore, as the bank is growing, the number of employees at Bank Alfalah are increasing,

which shows that Bank Alfalah is being considered as a an employer, that provides its employees

with a challenging environment to work in, where they can harness their full potential and shows

confidence as an employer by the employees of the bank.

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Lastly to become the leading bank of Pakistan, Bank Alfalah has to benchmark its services to its

major competitors in the industry or the market leader in the industry and provide a continuous

mean of improvement in its existing products and services, while introducing new ones to the

industry.

Recommendations:

Some of the recommendations that I would recommend to some of the problems discussed in the

above section, that might increase the efficiency of both the operations and employees of Bank

Alfalah are as follows

Technological Advancements:

Bank Alfalah should develop a modern connectivity architecture to effectively maintain an

online connection of the branch with other branches and also the ATM link, which may include

using modern technologies like fiber cables, routers etc. Also backup links should also be

developed.

Also a proper IT department should be established in all branches, with professional having the

knowledge to maintain a secured connection with other banks. Also scheduled backups of data

should be done within the bank.

Workshops and Counseling:

Work shop programs should be conducted in every city, rather than just two centers, for all Bank

Alfalah employees. These workshops should relate to all aspects of banking and may also be

conducted with other banks as a joint program.

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Also as parts of the human resource training, counseling programs should be started for junior

executives or new entrants into the bank, introducing them to their prospects in this industry.

The lower staff employed at Bank Alfalah should also be given a chance to succeed in life by

training them in different simple jobs at the bank, which my include sorting of cheques, phone

banking etc.

Incentives:

Incentive schemes should be developed for the employees that can help motivate them,

which might include:

Personal loans and car financing facilities for all ranks of employees.

Scholarship programs for all employees.

Introducing employee awards at branch and regional levels.

Job rotation programs to enhance the skills of employees.

Priority Banking and Business Development Department:

There is no priority banking department at Bank Alfalah, like that of other bank. A priority

banking department should be developed so as to give even more exclusive and customized

services to high end customers with large deposit accounts. Also Business Development

Department should be developed in all branches, so that they can actively find prospect

customers to take up products from Bank Alfalah.

Innovative Products:

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New and innovative products should be introduced by Bank Alfalah, like other bank such as

Citibank and Standard Chartered Bank develops for their customer. For this purpose, special

teams should be developed that include professional from all departments of the banks to come

with ideas. This process will increase the number of ideas generated and even produce

innovative products for the bank that might give them the edge.

Placements of Employees:

There are some departments in the bank that do not have enough employees, while some have

more than needed. All this creates inefficiencies and so the operations manager should look at

the department of the branch and see where inefficiencies lie, in consultation of with the heads of

the departments and hire individuals where there are less employees or rotate employees from

other departments.

Amenities in Branch:

There should be a prayer room developed in all branches as many employees want to pray, but

do not have the proper place to do it. Also work like sorting, which takes up a lot of space should

be done in a separate place and amenities like television and internet connection should be

placed in the common room, so as to give employees a relaxing environment when they have a

break.

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Appendices:

Employee Questionnaire

This questionnaire is part of my research work for MBA project. It is requested that please answer all the mentioned questions in questionnaire. Your cooperation in this regard is highly appreciated.

HR practices in Bank Alfalah Limited

Person responsible for completing the questionnaire:

Name: ______________________________ Department: _______________________

1. Human Resource Management Department is working satisfactorily in my organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

2. The HR Practices are effectively communicated to all employees in the organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

3. I know the difference between Performance Management and Performance Appraisal.

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Strongly Agree Agree Neutral Disagree Strongly Disagree

4. Our targets/ objectives are set regularly (e.g. quarterly, half yearly, yearly etc.)

Strongly Agree Agree Neutral Disagree Strongly Disagree

5. I use to participate in setting individual targets for measures.

Strongly Agree Agree Neutral Disagree Strongly Disagree

6. I feel there is gap between my existing HR practices and expected HR practices.

Strongly Agree Agree Neutral Disagree Strongly Disagree

7. I think there is a direct relationship between employee performance and reward system in my organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

8. The top management applies improved Human Resource Management techniques.

Strongly Agree Agree Neutral Disagree Strongly Disagree

9. I feel that measures taken to assess my performance are in accordance with these objectives.

Strongly Agree Agree Neutral Disagree Strongly Disagree

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10. I feel current ACR based system in my organization is effective for employee appraisal/ evaluation.

Strongly Agree Agree Neutral Disagree Strongly Disagree

11. My competencies are thoroughly judged, while evaluating my performance.

Strongly Agree Agree Neutral Disagree Strongly Disagree

12. I am satisfied with the level of training and development, I received in my organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

13. I feel my work achievement contributes to organizational goals.

Strongly Agree Agree Neutral Disagree Strongly Disagree

14. The findings of ACR are used in order to assess the employee performance.

Strongly Agree Agree Neutral Disagree Strongly Disagree

15. My organization uses performance evaluation as a guide to new policy formulation.

Strongly Agree Agree Neutral Disagree Strongly Disagree

16. I think that existing HR practices is contributing very much towards employee development in my organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

17. I am satisfied with my salary package.

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Strongly Agree Agree Neutral Disagree Strongly Disagree

18. I have been paid as per my contribution/ performance to the organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

19. I will welcome any new practice in respect of Human Resource Management implemented in my organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

20. There is a high level of motivation among employees of organization.

Strongly Agree Agree Neutral Disagree Strongly Disagree

21. I am satisfied with existing system of bonuses and rewards.

Strongly Agree Agree Neutral Disagree Strongly Disagree

22. I have job satisfaction.

Strongly Agree Agree Neutral Disagree Strongly Disagree

23. I think that career progression in my organization is carried out satisfactory.

Strongly Agree Agree Neutral Disagree Strongly Disagree

24. I perform my assigned/ established targets with full responsibility.

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Strongly Agree Agree Neutral Disagree Strongly Disagree

25. What are the barriers in performance improvement of individuals?

………………………………………………………………………………………………

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………………………………………………………………………………………………

………………………………………………………………………………………………

26. Give your general suggestion/ comments for improving employee human resource management system in your organization.

……………………………………………………………………………………………..

………………………………………………………………………………………………

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…………………………………………………………………………………………….

Thank you very much for your valuable cooperation.

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References:

Mr. Mazhar HussainManager Bank Alfalah LimitedMurree Road Branch Rawalpindi

Mr. Shuja TariqOperations Manager Bank Alfalah LimitedMall Road Branch Saddar Rawalpindi

Ms. Amna TabasumHR Coordinator Bank Alfalah LimitedMall Road Branch Saddar Rawalpindi

Web References:

http://www.linkedin.com/companies/bank-alfalah-limited

http://www.managementhelp.org/hr_mgmnt/hr_mgmnt.htm

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

http://www.bankalfalah.com/

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