The Habib Bank Limited Commerce Essay

Habib Bank Limited commonly referred to as Habib Bank is the largest bank in Pakistan and a thoroughly established banking chain throughout the world.

HBL has an extensive network of 1425 branches in Pakistan and 55 international branches that makes it one of the largest banks in Pakistan today.

Habib Bank Plaza is located in Karachi; Sindh is the formal headquarters of the bank. The bank has a network outside Pakistan including USA, UK, Middle East, Asia Pacific and Africa.

Customers are the key that makes HBL a top-ranked bank and HBL continuously strives to keep its customers happy, which is why HBL has a broad range of products that cater to the different needs of its customers.

In terms of HR activities, HBL could be ranked as one of the best employers in Pakistan.

The bank has a detailed HR policy that is continuously updated keeping in mind the changes in technology and even employees responsibilities.

This report highlights the recruitment procedures, selection, training, compensation and benefits that HBL covers in its HR policy. The HR department isn’t the only party responsible for all the HR policies; HBL also uses the services of consulting firms that help in administering the hr functions.

History

Hbl was founded in Pakistan as on 1947, the headquarters was situated in Karachi.

It started its operations in other countries during 1951 when it opened its first branch abroad in Sri Lanka and Habib bank Plaza was built in 1972 to commemorate the bank’s 25th anniversary.

It has come a long way from its modest beginnings in Mumbai (Bombay) during 1941

when it commenced operations with a fixed capital of 25,000 rupees.

The strong performance and growth of Hbl in its initial years impressed Mohammed Ali Jinnah (the founder of Pakistan) who had then asked the Habib Bank to move its operations to Karachi after the independence of Pakistan.

Habib Bank Limited established itself in Karachi in 1944 and became a symbol of pride and progress for the people of Pakistan.

Habib Bank Ltd was operating under state ownership from 1974-2004.

Although in 2004 it went under privatization and as of today 51 percent of the Bank’s shares are purchased by the Aga Khan Fund for Economic Development, an agency of the Aga Khan Development Network. The Government of Pakistan is expected to gradually divest its remaining shares in the Bank.

Introduction

HBL was the first commercial bank to be established in Pakistan in 1947.

Over the years, HBL has grown its branch network and it now the largest private sector bank that has over 1,450 branches across the country and a customer base which is exceeding five million relationships.

HBL has its presence in 25 countries, its subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria, Kenya and Kyrgyztan and representative offices in Iran and China, HBL is also the largest domestic multinational from Pakistan.

The Bank is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East.

The crucial key areas of operations encompass product offerings and services in Retail Banking.

HBL also takes pride in holding the largest Corporate Banking portfolio in Pakistan with an active Investment Banking arm.

In the urban as well as rural centres, the banking services that HBL offers are SME and Agriculture lending programmes.

In the UK and GCC, HBL focuses on trade finance and remittances for the South Asian diaspora in addition to basic banking facilities.

HBL takes pride in the fact that it has always been a bank and a brand for the masses, with a history that is inextricably linked with the history of Pakistan itself.

As it continues to grow, both locally and abroad, it strives to embody its brand personality: honest, approachable, inclusive.

HBL is currently rated AA+ (Long term) and A1+(Short term)*. It is the first Pakistani bank to raise Tier II Capital from external sources.

Mission Statement:

To make our customers prosper, our staff excel and create value for shareholders.

Vision Statement:

Enabling people to advance with confidence and success.

Values:

HBL values are the fundamental principles that define its culture and are brought to life in their attitude and behaviors. It is these values that make HBL unique and unmistakable.

The values are defined below:

Excellence

This is at the core of everything we do. The markets in which it operates are becoming increasingly competitive, giving our customers an abundance of choice.

Only through being the very best – in terms of the service we offer, our products and premises – can we hope to be successful and grow.

Integrity

HBL is the leading bank in Pakistan and our success depends upon trust. Its customers – and society in general – expect us to possess and steadfastly adhere to

high moral principles and professional standards.

Customer Focus

HBL understands fully the needs of its customers and adapt its products and

services to meet these. It always strive to put the satisfaction of its customers first.

Meritocracy

HBL always believes in giving opportunities and advantages to its employees on the basis of their ability. They believe in rewarding achievement and in providing first-class career opportunities for all.

Progressiveness

HBL believes in the advancement of society through the adoption of enlightened working practices, innovative new products and processes and a spirit of enterprise.

HBL Products

Domestic Banking: Service Line

In domestic banking HBL deals with the following various financial transactions and provides a wide array of services to its customers:

Consumer Banking Services:

Habib Bank Ltd. has continuously strived to meet this requirement and along with its regular consumer banking services it has often introduced quite innovative services in the market in order to satisfy its customers. Some of its great achievements are that Habib Bank Ltd. was the first bank to introduce Traveler’s Cheques in Pakistan, and the Habib Bank Master Card was the first to be introduced in the region.

Cash Management Services

HBL’s Cash management Services look after the local and cross border payments, collections, account services and liquidity management for both corporate and institutional customers.

Utilities Services

For the convenience of its customers Habib Bank always is willing to stand on their side to provide as per standing order facilities to the customers like, bank paid Electricity Bills, Phone Bills, Gas Bills and other utilities expenses on the behalf of customer.

Transferring of Money

The bank provide facility of transferring of money from one place to another place within the country as well as outside Pakistan the bank receive normal changes as per their schedule of charges declared half yearly from their customers for transferring the money. The various channels of remittance are as under: 1 Demand Draft (DD) 2 Telegraphic Transfer (TT) 3 Mail Transfer (MT) 4 Muhafiz Transfer Cheques (TC)

Dealing in discounting of title to goods

The bills department of the branch deals with the discounting various title to goods such as bill of lading (B/L), Railway receipt (R/R), Truck Receipt (T/R) Airway Bill (AWB).

Issuance of letters of guarantee

The bank issue letter of guarantee on behalf of its customers financing customer authorities export promotion bureau Sui nothern gas pipeline, other government agencies as requested by its customers.

Product Lines

Auto-Finance

Habib Bank Auto Finance, offers the customer, an expedient and economical way of fulfilling their requirements of owning the car of their choice on their terms. Options of affordable down payments, convenient repayment arrangements in the form of monthly rental payments, which are tailored to the expected cash flows of the customer are some of the host of value added features, this product offers its customers.

Home-Finance

Habib Bank brings the most affordable and convenient scheme to finance one’s own house. Habib Bank – House Finance, a demand / running finance facility to assist an individual in turning his vision into a reality. With adaptable options, varying amounts and flexible tenures one can start shifting to, building or renovating one’s own house in few weeks.

Habib Bank Value Debit Card

Habib Bank Value Debit Card is a secure and convenient payment tool. It is linked to the personal Habib Bank account of the customer. When the customer uses Value Card at outlets for payment of daily purchases, the exact purchase amount is deducted from their personal Habib Bank account.

Flexiloan

Habib Bank FlexiLoans is a personal loan product, which is available for salaried individuals for a variety of reasons. Whether it is for a child’s education, a much needed vacation, a daughter’s wedding or even just a shopping spree, HBL FlexiLoans is a flexible financing scheme which can actually provide the much needed cash to fulfill all such requirements.

Habib Bank Master Card

Habib Bank MasterCard opens a world of convenience for its clients. Be it shopping or traveling or medical expense, HBL MasterCard sets you free from the hassles of carrying cash, wherever you are. You have the option to choose from our Domestic or International card… depending on your requirements

Habib Bank Lifestyle

Habib Bank’s Lifestyles Financing Scheme provides financing for household appliances and consumer electronics on easy terms and flexible tenures. The product aims to bring comfort into each domestic unit by providing financing for essential domestic items, the purchase of which may be postponed by households due to paucity of funds. The bank aims to provide speedy financing so that families do not defer purchase of such essentials, and all such items are effortlessly accessible as and when required.

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Job Analysis at HBL

This is the procedure that is undertaken in determining the duties and tasks of a position in the organization, the requisite characteristics of the people filling in those job positions.

There are special consultancy firms that could aid in an organizations human resource planning; HBL is using the services of ‘Sidat Hyder Morshed Associates’ which is one of the pioneering management consulting firms.

SMHA provides job analysis services to HBL and for that it collects information through:

Questionnaires

Interviews

Interviews:

Interviewing is a crucial source that is used in collecting information for the job analysis procedure. Employees, group of employees as well as the supervisors are interviewed due to the vast knowledge they have about the job position.

The interviews are usually structured and sometimes may even be unstructured.

In the structured interview a sequence of questions are followed by the interviewer.

However, in the unstructured interview the interviewer pursues any interesting topics that may seem relevant to them in the process of responses to questions.

Questionnaires:

Herein employees are given a questionnaire which they have to the answer and it helps in quantifying their job-related duties and responsibilities.

Questionnaires are also of various formats although mainly their either open-ended [more qualitative] or structured [quantitative].

Amongst the quantifiable questionnaire methods used, HBL mainly uses the ‘Position analysis questionnaire’.

The position analysis questionnaire is used to collect quantifiable data concerning the key duties and responsibilities of the various jobs. It analysis a job according to five main activities, which are:

Decision making/communication/social responsibilities

Performing skilled activities

Being physically active

Operating vehicles/equipment

Processing Information

In Habib Bank job analysis is usually conducted:

When it’s opening a new branch, or introducing a new technology or a new product/new services etc.

The purpose of job analysis at HBL is:

•To collect information concerning the varied level of activities to be performed

•Collection of data about the skills, education, experience, personnel qualities that are needed in selection of the suitable person for right job.

Job Analysis for Top Level Management:

The job analysis for the top management is supervised and administered by the HR department at the head office situated at Karachi. For filling the respected vacancies the head office uses internal as well as external source of recruitment.

An example of job description and job specification of a managerial post in HBL is as follows. This was constructed with the aid of a thorough job analysis.

Managerial Job Description

Job Title: Branch Manager

Job Summary: Promotes banking in the community and manages branch operations in

coordination with the head office.

Tasks

•Highlight the services of the bank in the community to attract people for opening their

accounts to increase the bank assets.

•To operate the branch in such a way that the cost of operation is minimized and the services

are maximized.

• To check and issue loans on merit for the increase of bank revenues.

Managerial Job Specification:

Experience:

This job is for the trained person and should have minimum 2 years of working experience.

Previous job performance should be good.

Personality: Attractive

Qualification:MBA or MS in relevant field.

Personnel Planning at HBL

The HR Department at HBL is responsible for effective HR planning specially the regarding demand and supply of employees and also forecasting for prospective demands and supply that may be needed at a later time.

The objectives of human resource planning for HBL the is same like all the other organizations which mainly centres around forecasting and planning for acquisition, retention, improvement and the utilization of HR.

At HBL, Human Resource Planning encompasses decision making in three areas that have combined activities:

Step 1: Habib Bank Limited makes a list of requirements concerning the specified job keeping in perspective the needs, objectives, additional human resource and skills required, then bank is able to hire the services of right kind of person to fill the particular job.

Step 2: HBL make plans for motivation of their employees by giving them different types of targets and incentives on their accomplishment and for bringing excellence in the performance of employees in the organization.

Step 3: There is an interlinking between the employee goals and the organizational goals.

Human resource planning is specifically performed in these two activities:

Forecasting employee demand

Introducing new services

Opening new branches

Changing customer demands

Setting up new technology

Forecasting employee supply

Overtime

Job rotations

Transfers

Internal Promotion

Recruitment and Selection at HBL

HBL has a very systematic procedure of recruiting its employees, which is completely based on its value ‘Meritocracy’.

The merit-based recruitment process at HBL incorporates the principles of equal opportunity and this results in the appointment of the most efficient and capable candidate.

Such a process ensures openness as well as transparency, and allows a greater confidence in the outcome of the selection process.

The merit principle at HBL mainly aims in identifying the most suitable person for the job assessed on the basis of the following parameters:

•

Educational Background

•

Skills and Competencies

•

Abilities and Attitude

•

Experience

•

Interpersonal / Communication skills

Campus Hiring:

HBL has a very active hiring procedure for students and it annually visits universities in search for prospective job candidates.

As part of HBL’s human resource strategy, it regularly visits various universities across the country to induct & groom fresh business graduates every year.

Enthusiastic and talented youth form is crucial and thus they are even nurtured to become future leaders at HBL.

To attract the best young talent, the resourcing department employs a pro-active strategy. HBL actively participates in campus seminars by giving presentations that highlight HBL’s background, vision, mission, values, recruitment & selection process, future career prospects and overall business strategies.

Fresh talent is hired on a permanent basis and their offered a wide range of career opportunities from various departments across the organization such as Information technology, Marketing, Finance, Operations and HR.

This is the process that is undertaken at HBL in filling in positions:

For selection HBL usually does:

Interviews

Written tests

Background Checks

After the recruitment process, selection of most reliable and capable applicants is made at HBL under the supervision of HR personals.

Firstly HBL advertises in all types of media which includes newspaper, magazine, website etc) where the public is informed that a particular situation is vacant for the following post, for which their criteria [normally in HBL] are:

O Candidate must be a citizen of Pakistan.

O Should be qualified in the relevant field having graduate or post-graduate degree.

Candidates then send their filled applications against the vacant posts advertised in the newspapers, after advertisement different people apply for the job.

In the preliminary stage of recruitment, the CV’s that are of irrelevant applications are screened out and relevant applications are called for written test.

This test is examined by IBP (Institute of Bankers Pakistan). The test pattern is of GMAT format in which the institute judges the person job behavior and skills of doing individual as well as group tasks.

Usually interviews are individual, however when a group interview is conducted herein the candidates are given a specific topic to debate about, this group discussion mainly helps in judging personality traits as well as leadership qualities that give the candidate its USP.

The External sources of hiring HBL uses are:

Advertisements through newspapers (Jang, Dawn and The News namely)

Trade and Professional Journals (Aurora Magazine)

Online Job websites (Rozee.pk)

The external sources that supply potential candidates are:

Sidat Hydey Morshad Associates

Employee referrals

College-recruitment

Walk-in interviews

The internal sources that supply candidates:

Rehiring former employees

Job Postings

Training at HBL

Habib Bank believes that training plays a vital role in the development of the talented and energetic youth of the country. History reveals that HBL pioneered its first training programme in 1946, which was followed by many other programs since then onwards. The training division carries out a talent hunt programme regularly that then makes the selection of the potential candidates for the banking profession on studying their merits.

The training methods that are undertaken by HBL are:

Soft skill functional training: This is usually done in order to improve the personality traits of HBL employees and also other physical mannerisms such as social grace, personal habits, fluency of language etc.

On-the-job training: Different methods are employed such as coaching and mentoring. The trainee is taught as well as supervised also a lot of job rotation activity happens in this scenario.

Class room lectures: HBL had launched a two-day standardized training programme on ‘Know Your Customer and Anti Money Laundering’, in joint collaboration with Global Compliance and HR and OD groups for all its employees.

Class room lectures help strengthen the integrity of business relationships, mitigate growing risks and create awareness amongst HBL’s work force.

HBL also launched an Urdu version of the policy document as well as making use of state of the art training tools.

Besides these there also other training procedures for new employees such as:

Management Trainee: This keeps a watch for highly motivated individuals who have the potential and capability and exhibit a future leader’s qualities.

This program offers extensive interactive classroom training, job rotations, and personal mentoring which makes this whole process a comprehensive learning experience.

Management Associate: This is a training and rotational program that mainly emphasizes in branch dealing and the banking requirements in a branch. This offers accelerated development opportunities across different banking divisions such as retail, commercial and priority banking.

Cash Officers: HBL does believe in the fact that employees of the bank are its brand ambassadors, which is why they should display exemplary skills when handling customers. This is a one month training program that is based on branch banking operations before any placement in the branch.

HR Centre

Recruitment

Derecuitment

Selection

Identification &selection

Of competent employees

Oreintation

Training

Adapted and competent employees with up-to-date skills and knowledge

Performance Appraisal at HBL

The Job Evaluation Criteria of HBL:

The basic pay

The fixed salary

The wages which comprises of the rates for the jobs, these are basically for skill based jobs wherein these rates may vary according to the skill and competence of a person. Management judgment is used in the fixing of these rates when recruiting and retaining an employee.

As far as performance appraisal is concerned HBL adopts two types of approaches and those are: The traditional approach and The modern approach.

a. Traditional Approach:

In this approach of appraisal a holistic view is undertaken about the overall organization, which is based on its past performance. In HBL a review is done at branch level. Each branch has the responsibility of showing its performance in accordance with the goals that have been set and that too heading towards a positive direction.

b. Modern Approach:

With this method, all the employees are allocated certain specific goals or targets that are to be fulfilled in a given time period that has been allocated to them, this ultimately shows the overall performance of each employee e.g. the deposits that they collected and whether they matched it up to the amount limits.

The performances of all the branches are reviewed at the end of the financial year which is December.

Compensation and Benefits at HBL

HBL offers its employees compensation in various shapes such as:

Cancelled holidays fees

Injuries during a job task

Cost of medical treatments

Repair of vehicles

Employees can claim these types of compensation at any time, when such an incident occurs.

HBL is one of the most employee-centred banks in the country, which is why they have a very detailed benefits plan, which includes:

Disability

Paid time off

Training Programs

Insurance

Education

If employees are on a holiday, or either on sick they are still compensated, which is indicated by the ‘paid time off’ plan.

Employees nearing the age of retirement are compensated in shapes of gratuity, pensions, super annuation fund and provident fund.

In the case of any disability the bank assures financial support, when the employees are ill and are either unable to do their job the bank offers different types of education and training programs to the employees so that they could furnish and sharpen their skills.

Currently, HBL is one of the first few companies that if offering its employees free of cost 12% of GOP shares under the ‘Benazir Employees Stock Options Scheme’ [BESOS].

Motivation at HBL

Motivation is the willingness of employees to exert high levels of effort in the accomplishment of goals. With motivation present there is a higher success rate in the achievement and fulfillment of any task.

Managers at HBL are alert about the needs of the employees that match “Maslow’s hierarchy of needs” this is indicated even in its ethics policy, which is discussed later on.

Since banks are all about services that are rendered by humans, thus it is a known fact that there are different types of workers. HBL recognizes the fact that it has both types of workers that are discussed in “McGregor’s theory X and theory Y”, although most of the employees belong to the “theory Y” category, herein the leaders/supervisors know that motivating these individuals guarantees effectiveness, activeness and responsibility fulfillment.

Ethics at HBL

Hbl strongly emphasizes on conducting the business with full compliance with the law, the rules and the regulations that have been determined by the community.

Thus, the employees of HBL at all times have to display the highest standard of ethical interaction and candor in conformity with the set code of ethics and the professional business conduct.

The objectives that reflect HBL’s code of ethics are:

Code of ethics at HBL

Honest and ethical Conduct

Compliance with applicable Government laws

Promotion of

Internal reporting

Any conduct that may be detrimental or harm the reputation of HBL is not tolerated.

A copy of codes of conduct is given to every employee and it is mandatory for them to abide by it and this is indicated by a written signature.

Maintaining office decorum:

It’s essential for all the employees to comply with the office timings and assure that there’s no disruption in any work commitment.

A proper dress code is required to be maintained by the employees, they need to be well-presentable as well as well groomed at all times. The other ancillary staff needs to be in uniforms.

At all times the employees have to present a high standard of behavior, attitude, there needs to be positivity in their body language. Patience and politeness is the key in handling clients.

Every employee needs to ensure their work area is clean.

Confidentiality:

Every policy concerning HBL’s business, products or services, innovative technology, new marketing methods or systems should never be disclosed or discussed with any third party.

No third party should be given any important financial information regarding the clients unless the disclosure is necessary for the law example money laundering; or protects the bank’s interest example suspected fraud.

Conflicts of interest:

Personal interests of the employees should never conflict with their duties in the bank or in their services to the client.

It is mandatory for an employee to avoid conflict between all levels i.e. financial, political, social and personal interests.

For higher level employees, it is crucial they do not review a loan for an organization they may be a director of.

Gifts and Inducements:

There is no permission at any cost given to employees to accept gifts, favors or any entertainment from existing or prospective customers.

Outside Pressure:

At all times, employees should refrain from inciting any external pressure or influence for the attainment of their own personal goals and benefits in the bank. If any employee exerts such a behavior they would b subjected to disciplinary action.

Insider Trading:

Employees should refrained and strictly condemn any insider trading in HBL shares, even they should avoid making a deal, advising or arranging a deal for someone else, even if its for securities listed in the stock exchange.

There are certain internal rules concerning personal trading in securities which have been placed by HBL and they apply to all employees.

HBL has full cooperation in the drive against money laundering and the authorities have been giving full authority to confiscate any proceeds of crime.

The various business divisions in the bank have been given guidelines that aid them in the compliance of the anti-money laundering policy.

Key Principles:

The golden rule at HBL is to “know your customer”.

The various business divisions are required to keep a record of customer identification for at least five years, since the closing of their account. In the case of transactions, the law in Pakistan states that for five years at least the record should be maintained.

Employees should not inform any customer if their account’s being investigated for any criminal activity.

Protecting Bank Resources:

It is the responsibility of all the employees to safeguard the bank and even its customer’s tangible assets which includes cash, securities, physical property and services and customer information.

Interaction and personal communication between the customers and their managers should be kept at minimum.

Stationary which includes letterheads should only be used for business purposes only.

Discrimination or Harassment:

HBL employs equality in terms of gender and religion.

Its strictly prohibited to have any harassment or any kinds of sexual discrimination whether its committed to the customers, subordinates or even supervisors etc.

Its strictly condemned to discriminate or harass any employee because of gender, creed, age, religion, marital status or any physical disability.

The other rules that HBL ethics policy covers are copyrights, accurate reporting and record keeping, auditing and regulators, zero tolerance to workplace violence and most importantly equal employment opportunities which in details covers issues such as nepotism.

Career Planning and Progress

This is a career ladder that has shown the growth from a cash officer to a branch manager.

It suggests that a strong sense of direction if coupled with responsibility boosts motivation levels and enhances not only performance but even productivity.

A holistic career progression plan is covered below in the chart:

Career Progression Plan