HRM Final Report 8968

Institute of Business Management

Human Resource Management1




1 COMPANY OVERVIEW:

1.1 HISTORY OF STANDARD CHARTERED BANK:

Standard Chartered has a history of over of 150 years in the Banking and

is named after two banks, which merged in 1869. They were originally

known as the Standard Chartered Bank of British South Africa and the

Chartered Bank of India, Australia and China. Of the two banks the

Chartered Bank is the older having been founded in 1853 following the

grant of Royal Charter from Queen Victoria. The moving force behind the

Chartered Bank was a Scot, James Wilson, who made his fortune in

London making hats. James Wilson went on to start The Economist, still

one of the world’s pre-eminent publications. Nine years later, in 1862 the

Standard Bank was founded by a group of businessmen led by another

Scot, John Paterson, who had immigrated to the Cape Province in South

Africa and had become a successful merchant. Both banks were keen to

capitalize on the huge expansion of trade between Europe, Asia and Africa

and to reap the handsome profits to be made from financing that trade.

The Chartered Bank opened its first branches in 1858 in Chennai and

Mumbai. A branch opened in Shanghai that summer beginning Standard

Charterer’s unbroken presence in Chine. The following year the Chartered

Bank opened a branch in Hong Kong and an agency was opened in

Singapore. In 1861 the Singapore agency was upgraded to a branch,

which helped provide finance for the rapidly developing rubber and tin

industries in Malaysia. In 1862 the Chartered Bank was authorized to issue

bank notes in Hong Kong. Subsequently it was also authorized to issue

bank notes in Singapore, it continued to exercise up until the end of the

19th Century. Over the following decades both the Standard Bank and the

Chartered Bank printed bank notes in a variety of countries including



China, South Africa , Zimbabwe, Malaysia and even during the siege of

Marketing in South Africa. Today Standard Chartered is still one of the

three banks, which prints Hong Kong’s bank notes.

Standard Chartered is the worlds leading emerging markets bank

headquartered in London. Its businesses however, have always been

overwhelmingly international.

1.2 PAKISTAN

Standard Chartered Bank (Pakistan) Limited (Standard Chartered) is a

commercial bank. It is principally engaged in providing commercial

banking, consumer banking, wholesale banking, Islamic banking,

wholesale banking and small and medium enterprises banking services.

The bank also offers 24-hour phone banking, e-statements, SMS banking

and online banking services. Standard Chartered Bank (Pakistan) Limited

is Pakistan's oldest and largest foreign commercial bank. It employs over

9000 people in it’s and operates through a network of 162 branches in

Pakistan

Its operating subsidiaries comprises of Standard Chartered Leasing

Limited, Standard Chartered Modarba and Standard Chartered Services of

Pakistan (Private) Limited. The bank operates as a subsidiary company for

Standard Chartered PLC. The bank principally operates in the region of

Pakistan. Standard Chartered is headquartered at Karachi, Pakistan.

In 2006 Standard Chartered Bank acquired Pakistan's Union Bank. On 30

December 2006, Standard Chartered merged Union Bank with its own

subsidiary, Standard Chartered Bank (Pakistan), to create Pakistan's sixth

largest bank.



Standard Chartered is also committed to all its stakeholders by living its

values in its approach towards managing its people, exceeding

expectations of its customers, making a difference in communities and

working with regulators.

Key people: Badar Kazmi CEO, SCBPL

1.3 STANDARD CHARTERED TODAY:

Today Standard Chartered is the worlds leading emerging markets bank

employing 30,000 people in over 500 offices in more than 50 countries

primarily in countries in the Asia Pacific Region, South Asia, the Middle

East, Africa and the Americans.

The new millennium bas brought with it two of the largest acquisitions in

the history of the bank with purchase of Grindlays Bank from the ANZ

Group and the acquisition of the Chase Consumer Banking operations in

Hong Kong in 2000.

These acquisitions demonstrate Standard Chartered firm is committed to

the emerging markets, where the Bank has a strong and established

presence and where they see their future growth.

2. INTRODUCTION:

Human Resource Management is the process of developing, applying and

evaluating policies, procedures, methods and programs relating to the

individual in the organization. Human resource management includes



Human Resource Planning, recruiting, selection, training and development,

compensation, performance management and employee development.

Effective human resource practices relate to company performance by

contributing to employee and customer satisfaction, innovation,

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

industry.

2.1 OBJECTIVE:

The Research has been undertaken to assess the Training & Development

practices of Standard Chartered Bank with the prime focus at how these

formulation of strategies and tactics contributes in enhancing the

employee’s performance.

2.2 METHODOLOGY:

The information related to the project has been collected from the

Standard Chartered Bank, Imperial Court. The methodology adopted is as

follows:

Collection of data by conducting interviews of officials of the Bank

Frequent visits

Internet Search

Study of Bank’s annual reports

A comprehensive study of the literature has been carried out the see the

factors that help in achieving a competitive advantage in a dynamic

banking environment.



2.3 SCOPE OF STUDY:

As we know services are a growing industry of Pakistan and many firms

are striving to deliver value added services to the customers. In this regard

banks are continuously focusing towards improving their services. Similar

is the case with Standard Chartered Bank. This Bank has evolved

tremendously during the last couple of years and now has become one of

the leading banks in Pakistan.

Keeping this in view the study has been undertaken to identify the

strategies and plans of the Bank and to identify the methods adopted by

the Bank to train and motivate their people and work force.

3. LITERATURE REVIEW

Human resources management includes a variety of activities , and among

them is deciding what staffing needs an organization has and whether to

use independent contractors or hire employees to fill these needs ,

recruiting and training the best employees , ensuring they are high

performers , dealing with performance issues and ensuring the personnel

and management practices conforms to various regulations. Activities also

include managing their approach to employee benefits and compensation,

employee record and personnel policies.

HRM practices have shown to be valuable to any company’s success.

Thus to be successful in a global market place, the challenge for all

businesses regardless of size is to invest in human resources. They need

to select and retain talented employees, undertake employee training and



development programs and dismantle traditional bureaucratic structures

that limit employee’s ability to be innovative and creative.

The commonly practices HR activities include the following:

HR Planning, Recruiting, Selection, Training and Development,

Compensation, Performance Management and Employee Relations

World-class organization use performance measurement systems to

determine whether they are fulfilling their vision and meeting their

customer-focused strategic goals. Leading-edge organizations use

performance measurement to gain insight into, and make judgments

about, the effectiveness and efficiency of their programs, processes, and

people. These best-in-class organization decide on what indicators they

will use the measure their progress in meeting strategic goals and

objectives, gather and analyze performance data and then use those data

to drive improvements in their organization and successfully translate

strategy into action.

Thus in today’s organizations, the use of Strategic Human Resource

Management information is to help set agree-upon performance goals,

allocate and prioritize resources, inform managers to either confirm or

change current policy or program directions to meet those goals , and

report on the success in meeting those goals.



4. DESIGN AND APPROACHES OF SERVICES:

4.1 SERVICES DESIGN:

Designing services to accommodate their unique characteristics is

challenging. One reason productive improvements in services are so low is

because both the design and delivery of service products include customer

interaction. The services provided at SC Bank are primarily based upon a

few approaches.

The outsourcing of payments continues to be a major area of focus for

finance and treasury professionals. Over the past three years, competition

in Asia has become more intense and this has helped drive the increase in

the number of companies that use payments outsourcing as a way to

reduce cost and focus on core activities.

4.2 APPROACHES TO REGIONALIZING THE PAYMENTS FUNCTION:

“Choose always the way that seems the best, however rough it may be,

custom will soon render it easy and agreeable.” Pythagoras Intuitively,

there are numerous benefits to regionalizing the payments function of

Standard Chartered Bank. This is particularly true where it has the critical

mass to justify an undertaking of considerable size and complexity.

Frequently mentioned benefits include: economies of scale, increase

control managed by a small, high quality team and standardization of

processes, amongst others.



4.2.1 The Ad Hoc Approach:

The ad hoc approach is often the default method of regionalization of

payments and other cash management activities. This is often undertaken

when decision-makers make a priority determination that centralizing cash

management activities offers significant benefits to the bank and thus

should be implemented. At Standard Chartered this approach is frequently

accompanied by minimal investigation and planning, which invariably leads

to difficulties and dissatisfaction. The sum total of planning is often reduced

to determining which financial institute can best meet the open ended

requirements of the bank.

Banks may be guilty of reinforcing the ad hoc approach if they do not take

the time to understand their customer’s strategies, objectives and type of

businesses, and make recommendations that may not have been originally

considered. This can be a function of whether the service provider

considers the implementation of capabilities as simple sale or the start of a

long-term implementation.

4.2.2 The Strategic Approach:

The Strategic approach is also a priority determination for implementing an

SSC/CAP because it is not a stand-alone process, but rather part of a

global or regional strategic planning process that encompasses the entire

organizational structure of the Bank. Often this is accompanied by the

implementation of a high-end Enterprise Resource Planning (ERP) system,

such as Oracle or SAP, which integrates the various units.



4.2.3 The Pragmatic Approach:

The pragmatic approach alone is not a priority but rather a post-hoc

determination. The most straightforward and effective questions that the

Bank asks itself when taking the pragmatic approach are:

Where are we now?

Where do we want to be?

What is the best way to get there?

4.3 Operational Strategies:

To steadily develop the lending business and upgrade the quality of loan

assets.

In lieu of Islamic banking the Bank aims to aggressively promote fee-

income business to raise non-interest revenue sources.

To provide efficient services to fulfill customers needs and create a high-

quality service image.

To actively set up business units in major business centers of the country.

To aggressively develop international banking operations and seek

opportunities to develop strategic alliances with other banks to create new

products and services.

4.4 Operation Plans:

The Operational Plans of the Bank are as follows:

4 Deposits

5 Loans



6 Domestic Banking

7 Trust Operation

8 Treasury Operations

5. STRATEGIC HRM PRACTICES OF STANDARD

CHARTERED BANK

People, rather the employees are the asset of any organization. An

organization, whether it is a manufacturing concern or service oriented,

cannot function without the active participation of people.

Standard Chartered is the world’s leading emerging markets bank. It

employs 30,000 people in over 500 offices in more than 50 countries in the

Asia Pacific Region, South Asia, the Middle East, Africa, United Kingdom

and America.

5.1 Human Resource Planning:

HR planning is a process, which anticipates and maps out the

consequences of business strategy on an organization’s human resources.

This is reflected in planning of skill and competence needs as well as total

headcounts. Every organization needs to be able to forecast and plan for

its future people requirements.

At Standard Chartered Bank, human resource planning involves

forecasting the numbers of people which will needed by the bank, and then

working out the best way of obtaining then as and when they are needed.



5.2 Forecasting:

Forecasting is the major function of the bank’s HR department. The

forecasting activities include:

Workforce numbers in sufficient detail to be useful.

Likely changes to the work of the bank.

Work force supply – this involves forecasting the variations in the

current work force estimated to occur over the following years.

Impact on budgets and funding.

5.2.1 Who‘s responsible for it?

It’s easy to shift responsibility and say that personnel and human resource

departments should carry out HR planning, but it should be the concern of

every manager. As the Bank operates in a dynamic environment where

new and advanced practices are frequently emerging resulting in changing

customer’s requirements.

5.3 Good Practice Indicators:

Standard Chartered Bank makes sure that effective human resource

planning process is in place when

Appropriately skilled people are available to be deployed in the Bank’s to

meet forecast work demands.



The Bank’s structure provides with opportunity for appropriate career

development, and is perceived to contribute to effective and efficient work

practices.

Relevant workforce data is readily available to inform management

decision making on human resource issues.

6. Standard Chartered Bank‘s Structure:

The Bank’s structure is the means by which the work is integrated to

ensure that the objectives and activities of individual work teams and

departments match the overall goals.

The structure of the Bank provides scope for the flexible deployment of

people and to promote equity, job satisfaction, motivation and commitment

to goals; as well as providing access to career development.

7. Workforce Analysis (Supply and Demand)

The effective collection and analysis of workforce statistics trends in the

workforce to be considered with the specific requirements for skilled and

qualified people to meet the corporate aims to be kept in mind.

Workforce statistics and analysis support Bank’s efficiency and

effectiveness by providing a firm basis for human resource planning. Any

information gathering systems in place should support manages and be

responsive to their needs as well as being easily accessible in the

workplace.



8. Training & Development

Development is critical to our future business success. Our bank’s

performance will only continue to improve if we develop our people –you.

To develop our people is to invest in our future. We know you have the

motivation to succeed, to be good at your job and progress as far as you

can.

As Standard Chartered, training is a partnership between the employee

and the Bank. The Bank provides a framework within which the employee

can identify the training and development needs. Such training provides a

consistent standard of management learning throughout Standard

Chartered. It also enables the employees to take all of the programs or

study for individual modules according to their particular development

needs.

9. The Initial Two Years:

What the employee can expect to experience during initial 2 years training

is a blend of core and discretionary elements, such as:

Induction i.e. the processes that introduces the new entrant to the bank,

the employee’s own business or function and particular department.

Training in specific products or technical skills.

Work-based assignments in respective business or function i.e. doing a job

in a particular department for a period of time.



Cross-functional attachments – experiencing short period of time spent in

another business or support function.

10. Long Term Training:

Development and training does not stop after two years. After this initial

training, the employees are faced with internal development programs,

business-related studies and professional qualifications, and the bank also

offers the opportunity to develop skills through externally accredited

courses. These are designed in conjunction with top universities and

business schools including postgraduate, MBA.

Accreditation Internal

External Schools Executive Development

MBA Diploma in Management

Certificate in Management Foundation Course

Induction Course

11. EMPLOYEE ORIENTATION AND TRAINING

11.1 Orientation:



Every staff member joining Standard Chartered Bank has to attend a 2-day

comprehensive orientation to get a feel about the Bank and its business.

This orientation program provides a good chance to meet with seniors &

colleagues and to build up the team spirit.

11.2 Product Training:

Product training is provided e.g. cash product training, operational training

etc. to help the related staff to learn more about the products that the Bank

is providing.

11.3 Skill Training:

The bank provides a lot of skill related training e.g. credit workshop, sales

& negotiation skills, project management, etc. to help staff enhance their

skill in particular aspects.

11.4 On-job Training:

Staff members are continuously involved in the learning process in the

form of on-job training. Thus, a lot of on-job training opportunities and job

rotation to increase staff’s exposure are provided.

11.5 Self-learning:

The bank sends out CDs and books to staff for them to study on trade

knowledge, credit knowledge, etc. and staff will decide when he/she will

attend the Trade Skill Assessment (TSA) and Credit Skill Assessment

(CSA).



11.6 Management Development Training:

In this training program, the employees are given strategic perspectives

and business goals management skills; people management, networking

and customer focus abilities to better understand and manage their jobs.

11.7 Specific Competency Training:

Specific Competence Training is to ensure that the staff excels in product

knowledge, regulatory and unique techniques needed for the particular

position.

11.8 Learning and Development:

Standard Chartered recognizes that it is essential that they have the best

people equipped with the right skills and knowledge to perform their roles

to the highest standards. They went talented professionals, who seek self-

development opportunities including continuing professional development.

In return the Bank offers excellent training and development. They focus

development on where they believe that they will get the greatest return,

by developing employee’s strengths.

12. Recruitment:

The Bank’s Management Trainee Development Scheme takes place in

Karachi, where they recruit management trainees. Alternatively,

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



recruit young, bright, energetic and enthusiastic graduates and post

graduates.

12.1 Who are they recruiting?

Bright, young graduate or a postgraduate, who cannot wait to start his/ her

career in the financial services industry.

Consistent academic performer throughout his/her education.

Career-oriented person

Energetic, ambitious, innovative and business-oriented person.

Recruitment Criteria:

Standard Chartered Bank recruits the most talented individuals from the

external market to supplement their internal pipeline of talent. Their Human

Resources department provides guidance on the us of psychometric tests

and has robust recruitment criteria to ensure that all candidates are treated

fairly, equally and with respect. It has a global Graduate Recruitment

Program; where in the region of 150 graduates are recruited each year on

a management trainee program across all businesses, functions and

countries.

12.2 Selection:

Standard Chartered selects employee based on knowledge, skills and

talent. They are committed to providing equality of opportunity to all

employees, regardless of gender, race, nationality, age, disability, ethnic

origin, or marital status. They are committed not jus to providing equality of

opportunity to all employee, but also identifying what unique strengths



each individual brings to the roles they carry out and the development of

these strengths.

13. Employee health, well-being and safety:

Standard Chartered Bank believes that the health and well-being of their

employees and their families is important. They are concerned not only

about the physical health of their employees, but also their mental and

emotional well- being. Standard Chartered has policies & practices that

provide for a safe and healthy working environment. They place

importance on the safety and well-being of their staff, communities and on

the effect it’s working and operational processes have on the environment.

They are continually developing policies and practices designed to

maintain the highest appropriate standards.

13.1 Reward & Recognition:

Standard Chartered Bank aims to reward the talented and high performing

employees competitively. They regularly conduct salary surveys to ensure

that the reward package remains competitive in the market place. They

encourage continuous discussion; encourage regular review of employee’s

performance and development. This provides feedback to the staff about

how they are doing. The management links this to both financial and non-

financial recognition.

In addition to this, the bank provides various incentives in the form of

bonuses to encourage the employees and motivate them to continue with

their high performance. These include:

Spot Award + Rs. 5000 as cash prize

Surprise Award



Best Performer Award

Service Quality Award

YES (Year of Excellent Services) Award

13.2 Quality of Work Life:

This means a job that not only is reasonably safe but also for which the

pay is equitable. At Standard Chartered Bank every employee in confident

of his job security and has the assurance that he would remain on the job

for the agreed period. In addition to this, the workload is equitable divided

between the employees and therefore, they work with peace of mind and

tranquility, resulting in the overall enhanced performance of the

employees.

13.3 Mutual Commitment:

Both the employees and the management try to meet the common

objectives. They coordinate their activities to ensure that they are heading

towards achieving the established goals and meeting the set targets within

the specified time frame.

13.4 Mutual trust:

At Standard Chartered Bank prevails an environment of confidence and

mutual trust? The documented employment policies are honestly

implemented to the satisfaction of both management and employees.



14. Job Design:

Job design comprises of six components. These are:

14.1 Labor Specialization:

The Bank aims at hiring specialized people and their recruiting criteria are

based on their knowledge, expertise, past working experience and their

exposure to the professional fields. Employee wages are set in accordance

with the aforesaid recruitment criteria and most of them are intent with

what they earn at Standard Chartered Bank

14.2 Job Expansion:

The Bank improves the quality of work life by assigning various tasks to

the employees so as to equip them with the different services offered by

the Bank. Job expansion includes job enlargement, rotation, enrichment

and empowerment.

14.3 Psychological Components:

For enhancing the skills and abilities of the work force, the psychological

components of job design are also catered for by Standard Chartered

Bank. These psychological components focus on how to design jobs that

meet some minimum psychological requirements of the employees. These

components are utilized in accordance with Core Job Characteristics,



which suggests that the jobs designated to the various employees in the

bank include the following five aspects:

Skill Variety

Job Identity

Job Significance

Autonomy

Feedback

14.4 Self-Directed Teams:

A self-directed team is a group of empowered individuals working together

to reach a common goal. At Standard Chartered Bank, these teams are

found in almost every department to achieve the set targets. These teams

are an integral part of the personal loans, sales and credit cards

department where they are established to achieve both, the short-term as

well as long term objectives.

14.5 Motivation and Incentive Systems:

Sometimes the psychological components are not enough for motivating

the employees. In this case, monetary incentives play a vital role for

increasing the commitment of the employees toward their jobs and in

return enabling them to have job satisfaction. These monetary incentives

and rewards are given in various forms to the employees who act as a

strong motivational factor. These could be given as:

Spot Award + Rs. 5000 as cash prize

Surprise Award



Best Performance Award

Service Quality Award

15. Performance Management:

Traditionally, the formal performance appraisal system has been viewed as

the primary means for managing employee performance. Performance

appraisal is an administrative duty performed by managers and primarily

the responsibility of the HR function.

Performance management is the process through which managers ensure

that employee activities and outputs are congruent with the organization’s

goals. It is central to gaining competitive advantage.

16. Components of Performance Appraisal:

At Standard Chartered Bank the components of performance appraisal are

in respect of the five W’s that include: Who, What, Why, When and Where

of performance appraisal.

Who: All employees work under the supervision of managers. Therefore,

the manager is the best person to do performance appraisal of his

subordinates.

What: The appraisal at the organization includes appraisal of current

performance as well as the future potential. It also includes evaluation of

human traits such as behaviors, interaction with other staff members etc.

Why: It is concerned with creating and maintaining a satisfactory level of

performance of employee in the present job, highlighting his needs and

potential for personal growth.



When: It is carried out on yearly basis. The manager uses good work as

opportunity to provide positive thrust and uses poor work as a basis for

training.

Where: The performance appraisal is done in a cordial and friendly

environment.

17. Approach of Measuring Performance:

The performance of the employees can be determined by making an

overall comparison among individual‘s performance. Hence a performance

measurement system is developed that incorporates a tool for measuring

performance.

18. Appraising Employee Performance:

18.1 Individual Performance Management:

A longstanding question that Standard Chartered Bank and many other

organization are still grappling with is whether and how to reward good

performance (or, conversely, how to deal with persistent poor performers).

One approach used by the bank is to make salary increments or

progression on the pay scale conditional on good performance.

18.2 Performance Management at Senior Levels:

Typically, performance management systems for senior officials include

elements additional to performance-pay, such as time-limited contractual

appointments. The Bank has adopted this approach. Key features of its

system include the following:



Senior officials are recruited to a unified career structure known as Grade

A, which incorporates most top-level positions.

On the basis of evaluation, the senior position employees are paid a

performance bonus.

18.3 Linking Performance to Promotions:

Some have argued tying career advancement to performance is more

important than linking performance and pay. Whereas the benefits of pay

for performance are uncertain, particularly in the lower echelons, there is

no doubt of the need to ensure that the best people rise to management

levels.

19. Analysis

19.1 Training

Training refers to a planned effort by a company to facilitate the learning of

job-related knowledge, skills, or behavior by employees.

Standard Chartered provides a framework within which the employee can

identify the training and development needs. Such training provides a

consistent standard of management learning throughout Standard

Chartered. It also enables the employees to take all of the programs or

study for individual modules according to their particular development

needs.

Development Programs are carried out in the first two years of joining,

applicable to all management trainees, across the Bank. Each business



and function would decide the appropriate development needs for each

individual, within this overall framework.

19.2 Performance Appraisal:

Each organization must create and communicate performance measures

that reflect its unique strategy.

Performance management is the process through which managers ensure

that employee activities and outputs are congruent with the organization’s

goals. It is central to gaining competitive advantage.

A well-executive performance management plan enables an organization

to achieve critical goals such as:

1 Recognize the efforts and contributions of current staff.

2 Reward staff with compensation directly linked to performance.

3 Motivated staff to improve performance.

4 Orient staff towards goal achievement.

5 Retain key employees through the use of competitive compensation

programs.

6 Attract quality employees with an effective performance management

system.


Documents

HRM Final Report 8968