HBL - Implementation of Broadbanding

8/13/2019 HBL - Implementation of Broadbanding

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Implementation of Broad Banding

at HBL

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Adnan ur Rehman 082103

Muhammad Ali 0921117 | Rajesh Kumar 1021132

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SHRD

BROAD BANDING AT HABIB BANK LIMITED

With banking sector reforms 1997, a large number of employees

were retrenched under Golden handshake Scheme, as a

consequence a skill gap was created in the bank.

In order to fill this skill gap and due to ban on hiring inpermanent cadre executives from international banks were

inducted on three years contract at HBL to steer the process of

transformation.

A visible disparity in salary packages emerged due to the market-

based compensation of new hiring as against HBLs conventional

pay levels.

The persisting anomaly in compensation caused great de-

motivation in HBL regular employees.

Conversely due to the three years tenure, the contract

employees also lacked a long-term commitment to the Bank

BACKGROUND

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With the passage of time the contractual employees increased

in number.

The animosity and feeling of disgust amongst regular and

contractual employees increased and the permanent employeesblamed management of injustice and favoritism due to salary

differentiation.

The regular promotions from officer into executive cadre after

every 3 to 4 years also was making the organization top heavy.

The rankers were more general bankers with little specializedknowledge and were not equipped with modern day banking

concepts.

The management wanted a more flatter organization and

wanted a more diligent linkage between job responsibility and

compensation.

BACKGROUND

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Conflicting institutional priorities

Institutional challenges

Cultural challenges

Management challenges

Major financial sector threat

BACKGROUND

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S.No StatementSatisfaction

Level

1 Discrimination in the workplace 2.35

2 Clear job descriptions 2.48

3 Support for performance of job 2.48

4 Recognize for good work 2.48

5 Environment that fosters Trust 2.5

6Training and Development

Programs2.55

7 Physical working conditions 2.55

8 HR Group efforts 2.6

9 Work environment 2.61

10 My workload is manageable 2.64

Regular v/s Contract

Employees

EMPLOYEE CLIMATE SURVEY 2007

KEY ISSUES

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Town Hall HR Issues

Employee De-motivation

PerformanceManagement

JobInsecurity

Contract v/sRegular

Employees

Employee De-motivation

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Figures in Million Annualized Median

Current

Grades

Cash

Benefit

Petrol Car

Ben.

Driver Guar.

Bonus

Medical

Reimb.

End of

Service

Total Comp.

SEVP (C)

EVP (C) 3.73 0.32 0.48 0.07 0 0.41 0.35 5.36

EVP (R) 1.50 0.32 0.89 0.07 0.12 0.04 0.09 3.03

SVP (C) 2.22 0.19 0.41 0.06 0 0.24 0.20 3.32

SVP (R) 1.13 0.19 0.41 0 0.09 0.03 0.07 1.92

VP (C) 1.37 0.15 0.28 0 0 0.15 0.13 2.08

VP (R) 0.85 0.15 0.08 0 0.07 0.02 0.07 1.24

AVP (C) 0.89 0.12 0.07 0 0 0.10 0.08 1.26

AVP (R) 0.63 0.12 0.07 0 0.05 0.02 0.04 0.93

*Loan benefit and club membership is not covered

Calculation of Total Guaranteed Pay (Executives)

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Current Regular/Contractual Ratio

98%

2%

Regular

Contract

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ANALYSIS & KEY FINDINGS

The two-tier compensation issue is mostly a

perception issue

The data indicates that:

There are only 209 employeeson

contractual package which is just 16%of the

executive cadre

The gap to catch up with contractual

package varies from 43% to 26%which is

not as wide as general perception

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IDENTIFIED REMEDY:

Introduce a One-Tier Compensation for the entire Bank

by converting all contractual employees on regular

payrollIntroduce salary bands at each level to factor the salary

variance

Revise salary ranges to broader scale linking pay with

competencies/performance aligning pay with market

Alignment of benefits on a consistent basis

Faster adjustments in case of critical resources

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IMPLEMENTATION OF BROAD BANDING

PROPOSING ONE TIER

COMPENSATION STRUCTURE

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TOTAL PAY

CONCEPT

Overall

Equal

Benefit

Elimination of

the concept of

Two Tier

Communicating it

to the employees

Defining

Salary

Structure /

Levels

Benefit

Monetization

Emphasis

on Variable

Pay

STEPS TOWARDS

IMPLEMENTATION

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Internal alignment between regular and contractual

employees

A flatter structure will:

Enhance cross-mobility in career

Reduce levels of administration

Improve decision making and quicker response

time

Facilitate attraction and retention of qualityresources

Improved Efficiency

Simpler salary administration process

Faster grade placement decisions

WHY

BROAD

BANDING ?

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Reducing job levels from 9 to 7 by merging grades

Employees will be assigned to one of the bands

according to

Their salary/levelshort termJob evaluationmid to long term

The gap in similar level jobs will be adjusted in phases

Individuals will move horizontally and vertically based on

job enrichment

Pay bands will support pay for performance and flexible

hiring

Salary adjustments at the time of annual increase /

renewal of contract

Rationalized titles structure

KEY FEATURES

OF

BROAD

BANDING

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Level Alignment/New Titles (Officers)

OG-I

OG-II

OG-III

CO/JO

OG-II

OG-IIIOG-III

CO/JO

Manager

Assistant Manager

Officer

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Population Distribution (Executives)

HBL Broadband Pay System

Pay Band 1 Pay Band 2

Current GradeRecommended

Grades1A 1B 2A 2B

SEVP (C) Group Executive 15*

EVP (C) General

Manager

11 15 0 0

EVP (R) 16 0 0 0

SVP (C)

Deputy General

Manager

0 0 45 0

SVP (R) 0 0 78 0

VP (C) 33 30 0 0

VP (R) 230 2 0 0

AVP (C)Senior Manager

4 57 0 0

AVP (R) 449 297 0 0

Grand Total 1,282

*including 4 EVPs working as group heads

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Population Distribution (Officers)

HBL Broadband Pay System

Pay Band 1 Pay Band 2

Current GradeRecommende

d Grades 1A 1B 2A 2B

Officer Grade I Manager1905 52 0 0

Officer Grade IIAssistant

Manager

0 0 2726 0

Officer Grade III 3728 159 0 0

CO/JO Officers200 58 0 0

Grand Total 8,828

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MOVING TO ONE SYSTEM

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Towards One System

RegularEmployees

ContractEmployees

OneEmployment

System

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ONE BANK |ONE TEAM |TEAM HBL

IMPLEMENTATION STRATEGY

Communication/town hall meetings

Five back to back sessions covering over 2,000 employees

Senior management at Head Quarter

Karachi

Islamabad

Lahore Multan

Highly interactive communication sessions at all

locations

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HBL Organization Restructuring

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Broad Banding

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Key Features

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Implementation Challenges Anticipated

Morale & Motivation

Pride in old titles

Horizontal promotions

Negative perception bybenefit alignment

Senior levels in mergedbands may get a sense ofdemotion

Communication

Roll out and selling theconcept acrossorganization

Managing negativefeedback

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Analysis of Driving & Restraining Forces:

UrgentJob

Evaluation

CommunicateAnd

Education

CommunicateAnd

Education

ImplementNew

Policy

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THE FINAL WORD:

The Broad banding despite its serious implications with

regard to an individuals career path was successfully

implemented by the managements ingenuity.

The communication strategy was cleverly planned out to

exclude the negative implications of the strategy. Majority of

the officers and executives failed to understand that the

career ladder has been made long.

Employees concern regarding their placement in the

appropriate band based on proper job evaluation is still due

which may deteriorate the effects of the entire Broad

bandingimplementation initiative.

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BECOME A STUDENT OF CHANGE. IT IS THE

ONLY THING THAT REMAINS CONSTANT(Anthony J.D Angelo)

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Any Questions?

Documents

HBL - Implementation of Broadbanding