Introduction to Organization:

Habib Bank Limited commonly referred to as "HBL" and head-quartered in Habib

Bank Plaza, Karachi, Pakistan, is the largest bank in Pakistan. The bank has a
network of 1425 branches in Pakistan and 55 branches worldwide. It has a domestic
market share of over 40%. It continues to dominate the commercial banking sector
with a major market share in inward foreign remittances (55%) and loans to small
industries, traders and farmers. Overseas, it has operations in the following
countries:

Afghanistan, Australia, Bahrain, Bangladesh, Belgium, Canada, China, France, Hong

Kong, Iran, Kenya, Lebanon, Maldives, Nepal, Netherlands, Nigeria, Oman,
Singapore, Sri Lanka, Turkey, UAE, UK & USA.

History of the Company:

Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of

financial intermediation while he was campaigning for the creation of a separate
homeland for the Muslims of India. He persuaded the Habib family to establish a
commercial bank that could serve the Indian Muslim community. His initiative
resulted in the creation of Habib Bank in 1941, with HO in Bombay (now Mumbai),
and fixed capital of 25,000 rupees. The bank played an important role in mobilizing
funds from the Muslim community to finance the All-India Muslim League's
campaign for the establishment of Pakistan. Habib Bank also played an important
role in channeling relief funds to the people hurt in the communal riots and violence
that preceded the departure of the British from India.

After Pakistan came into being in 1947, Habib Bank, at the urging of Governor-
General Jinnah, moved its headquarters to Karachi, Pakistan's first capital. This gave
Karachi its first commercial bank of the newly formed Islamic Republic of Pakistan.
HBL was incorporated on 25th August 1941 and operated in the private sector until
its nationalization in 1974. HBL has been approved for privatization and the
privatization commission has selected a Financial Advisor to prepare a
comprehensive plan and assist in the sale process. The government has appointed
a professional management team to restructure the bank and to recover and clean
its doubtful and classified portfolio

Company Description:
HBL is a Banking Company, which is engaged in Commercial & Retail Banking and
Related services domestically and overseas.

Human Resource management structure:

The HRM department plays an important role in value of any company. HBL has
very active and one of the best HR department in Pakistan as well as worldwide.

Occupational Groups:

R. Zakir Mahmood President is the Head of Bank. The bank is practicing”Broad

Banding” since Last 4 years. The major occupational groups/ job roles at HBL are.

• Chiefs and Heads

• General Manager( Band 1, Band 2)
• Deputy General Manager(Band 1, Band 2)
• Senior Manager(Band 1, Band 2)
• Manager(Band 1, Band 2)
• Assistant Manager(Band 1, Band 2)
• Cash Officer

Company HR Statement

At HBL we have created a challenging environment that

encourages creativity and commitment. In our pursuit of
excellence, we are focused on attracting, developing and
retaining the best talent in the marketplace. Our dynamic
culture offers diverse growth opportunities across Pakistan
and in 25 countries around the world.”
HBL fosters a work environment where employees can
realize their potential whether locally or in the international
arena. Thus, we enable our employees to achieve their
professional goals while keeping in synch with the bank’s
overall objectives.”

HR manual contains five processes

1. Selecting and Recruiting
2. Training and Development
3. Performance Appraisal
4. Compensation
5. Employee relation

Compensation Package:

Company Statement of HBL

“Our focus is on attracting, developing and
retaining the best in the business by offering
market driven compensation and benefits packages.
Our compensation and benefits strategy combines
the need to maintain a high performance culture
along with market competitiveness. Annual
benchmarking exercises are conducted to stay
abreast with industry standards.”

Structure:

There are three categories of employees in HBL which includes.

(i) Executives

(ii) Officers

(iii) Cashiers

Guard’s and drivers are employed on third party contract Basis.

Structure of Compensation package for officers and executive includes following

head.

• Basic Salary

• Medical Allowance

• House Rent

• Conveyance Allowance

• Education Allowance

Executives have given few other allowances than these which include.

• Petrol Ceiling(Ranges from 180-250 liters)

• Driver Salary(For Executives who are Departmental Heads and are given Car)
 • Servant Allowance

Additional Benefits:

Additional Benefits include for officers and executive

• Ex- Gratia payment annually

• Leave Encashment( 15 days per year)

Additional Benefits for cashiers include.

• Statutory Bonus or Profit Sharing

• Bonus(Equal to One Gross Salary)

• Leave Encashment( 20 days and unavailed holidays are paid)

Pay Scales:

Pay scales are designed competitive to market rate and employees are given
increment after each year based on performance. There is no maximum pay range
of any scale.

Medical Facilities:

Medical allowance is given to officers and executives with the salary. In case of
hospitalization complete hospitalization charges are paid by Bank, In case of serious
illness like Heart attack e.t.c, Bank paid all the cost of treatment. 18 year old son
and unmarried daughter is eligible for these benefits as well.

For Cashiers medical consultation charges equal to 60 percent of Basic is paid

annually. In case of Hospitalization payment is made.

Administration of Compensation Package:

Board of Directors takes the decision on compensation packages and HR

Department administers the compensation package.

Employees Suggestions and Involvement:

Compensation package is communicated to each employee by sending confidential

letters to individual and Bank doesn’t disclose it to any other than the respective
employee. Suggestions are taken from employees and decisions are based on these
suggestions. HR head conduct meeting with Officers Association and Union on
behalf of Officers and Cashiers.
Retirement Benefits:

Retirement age is 60 years and employees are made following payments at the
time of retirement.

• Pension(Can be taken lump sum)

• Benevolent Fund

• Gratuity

• Medical Allowance(Lump sum payment)

Performance Management System/ Performance Appraisal:

Evaluating an employee’s current and past performance relative to its performance

Standards is called performance appraisal.

A process that consolidates goal settings, performance appraisal, and development

into a single common system to ensure that employee’s performance is according
to company’s aims is called performance management.

HBL’s performance management and reward systems ensure that goals are met in
an effective and efficient manner. HBL defines a clear path for you to contribute to
the organization’s overall goals, peppered with regular reviews and feedback to
help you gauge your progress. At HBL growth is not a function of time but rather of
performance. As your performance improves, the role that you play within the
organization will accelerate to reflect your input.

In an effort to improve the performance evaluation process, Habib Bank Limited

(HBL), one of the oldest yet one of the most progressive banks of the nation, has
launched the Performance Management System (PMS) 2007 for its employees.
Through the Performance Management System, HBL will involve its employees in
improving organizational effectiveness and in the accomplishment of the bank's
mission and strategic goals.

Procedure:

Target is given to individuals and branch by the Management to achieve and upon
these target appraisals is made, No team evaluation is done in HBL. Performance is
evaluated only individuals. HR department evaluate the performance of employee
on the basis of report given about him or her by Manager or Head. Following are the
categories in which employees fall by using appraisal system.

• Top ten
 • Excellent

• Exceeding All competencies

• Exceeding Most competencies

• Exceeding some competencies

• Meeting all competencies

• Missing some competencies

• Missing many competencies

Rating system is used against each competency 5 is maximum rating. If someone is

given 5 than this means that “Employee performance exceeds the required
standards all time.”

Job competency requirement for Officers and Executives are:

• Job Knowledge

• Communication

• Interpersonal Effectiveness

• Initiative

• Flexibility

• Leadership

Cash officers are evaluated on separate criteria than officer and executive and
managers are evaluated on the competencies discussed above.

Frequency:

Performance appraisal is done twice a year known as Midterm appraisal and yearly
appraisal.

Comments:

HR takes comments from some employees as a sample on the appraisal system.

Weakness:

Training needs are identified for individuals who are not achieving goal their
training needs are identified and are given training on weak areas. At Islamabad
Training Institute previously known as Management Training Institute presently
known as “Learning and Development” exist to provide employee of the Bank with
training on new technology and techniques introduce in the industry.

Promotions and rewards:

Performance appraisal is used as a base for reward given by HBL to its employees.
Rewards are.

• Increment(In Salary)

• Honorarium

• (Cash reward)

Helpfulness of PMS in HBL:

PMS is good system to evaluate the performance of employees. If PMS/PA is done

fairly and deserving employees get promotion and increments, than they will work
hard to achieve goal given by management to them. At HBL this system is
considered as fair and employees are mostly satisfied with PMS done by HR
department.

Difference between Ideal HR tool and HR Tool at HBL:

Compensation Package:

• Medical facility not given completely free to officers.

• Hospitalization charges are not given to cashiers.

• No Bonus for officers and executives

• Retirement Benefits(not enough)

• Pension ceased at percentage of basic pay in 2004 for all employees,

whenever they will retire.

• Lump sum medical payment is made at the time of retirement.

Suggestions for Compensation Package:

• Free of Cost Medical Facilities including Hospitalization for officers, executives

and cahiers.

• Bonus for officers and executive to keep them motivated

 • Increase Retirement Benefits

• Pension should not be ceased at maximum rate

• After retirement medical facility should be given free.

Difference between Ideal HR tool and HR Tool at HBL:

•The process of promotion at HBL is slow so they should maximize the

promotion
Process which would be source of motivation for their employee
• Performance of Experienced employee is not given importance
• Small Increment
• Manager can make biased rating
Suggestions for PMS:
• Promotions Should be done on merit basis
• Employee involvement should be given more importance
• Increments should be made competitive
• Rating should be based on targets achieved