Strategic Orientation of Human Resource Function of Askari Bank Limited and Allied Bank Limited

Strategic Orientation of Human Resource Function of Askari Bank Limited and Allied Bank LimitedSubmitted To: Dr. Naukhez Sarwar

Submitted by: Anooshe ZIA, Maham Rashid Bajwa, Meenal Rashid Bajwa, Namra Saeed, Sadaf Hanif25/12/2014STRATEGIC HUMAN RESOURCE MANAGEMENT MBA 2K13

ACKNOWLEDGEMENT

After acknowledging the blessings of Allah Almighty, we would like to thank all the other helping hands who were with us in making this report a possibility.We would firstly like to extend our thanks to our teacher Dr. Naukhez Sarwar for his constant support and guidance during the course of this project. We would also like to thank Bakar Ahmed HR Head Askari Bank, Humza Khan Post Recruitment Officer Askari Bank Islamabad and Saqib Saghir Manager Operations (previously served as HR manager) Allied Bank Islamabad giving us their precious time and providing us with useful insight about the current working of the Human Resource Department of the respective banks. Our thanks and appreciation also extends to our parents and colleagues for their constant support and prayers.

EXECUTIVE SUMMARYThe following project is the examination of the strategic orientation in the banking sector. The banks chosen are Askari Bank and Allied Bank Limited. A model inspired by work of Devanna (1984) has been used to carry out the study in both the organizations. There are different indicators which indicate that the HR function is strategic or not. Indicators like Reporting line of HR head and HR linkage, Skill set and competencies of the HR to become strategic and presence of the HR in BOD where strategy is formulated. It has been found that both the banks are moving towards the strategic orientation of HR function, however Allied is ahead of Askari Bank, given the analysed indicators. Factors like Organizational leadership emerged to be important as both have undergone acquisition and since then there has been leaps and bounds of improvement.

TABLE OF CONTENTSSr. No.TOPICSPg. No.

1Introduction4

1.1 Project Scope5

1.2 Research Methodology5

2Literature Review6

2.1 Strategic Human Resource Management6

2.2 Strategic Orientation in Banking Sector9

3Model under Study12

4Results and Analysis14

4.1 Askari Bank14

4.2 Allied Bank18

4.3 Analysis23

5Conclusion and Recommendations27

5.1 Recommendations29

6References30

7Exhibit33

CHAPTER 1 IntroductionStrategic HR requires the alignment of HR strategy with the overall business strategy of either a business unit or with the corporate strategy. The alignment of the HR strategy can be either through the one-way approach where HR is used as a support function to implement the strategy, two-way approach where the HR strategy is formulated on the lines of the overarching strategy of organization or integrative approach where HR and business strategy is formulated by collaboration and co-operation. As the world is changing and globalization is growing, where the markets domains are shrinking and competition is becoming intense there is a need to develop a competitive advantage and that too a sustaining one. Many multinationals have understood that the human resource can serve a sustaining competitive advantage of the organization and it needs to be linked to the overall business strategy. By doing this the strategy formulated will be the one which is in sync with the human resource of the organization and secondly the execution will be carried out by the HR function. This will all translate into organizational effectiveness and enhance the overall performance. To observe whether HR function is strategic or not man indicators can be pointed out. For instance devolution of operational work to line, presence of HR representatives in the top-tier of organization, reporting line of the HR head (whether direct or indirect), the organizational culture and structure of it and most importantly the skill set and competencies of HR function and its Head. However in becoming strategic the organizations have to face a lot of obstacles and hurdles. First of there should be motivation and urge at the upper echelon to be strategic and they should be aware of benefits of being strategic. Most of the time knowing all the benefits and the advantages of strategic still organizations are unable to create a horizontal or vertical strategic fit because they simply dont have time to do so. The administrative and operational work takes up so much of their time that they are unable to perform strategically.Then if they move towards devolution the line complains to be burdened with work, they believe is not their responsibility. Thus the friction between line and HR originates from here. Here the perceived image of HR also comes in light as what personnel around the organization think about HR. This image whether positive or negative has impact on the relationship that HR has with the employees. Even if the HR is relieved of the operational work, not necessary that they perform strategically. There is no guarantee to that and that is very crucial concern due to which questions arise on the performance of HR department and its image. Project Scope:Initially two industries were given to us to choose from one was telecom industry and the other was the banking sector. We decided to do our project on the banking sector of Pakistan. We chose two banks for conducting our study and they were Askari Bank Limited and Allied Bank Limited. There were basically two reasons for choosing these banks one was that they both have a history of acquisition in their portfolios and the other reason was that according to our initial research these two banks are also considered as each others strong competitors.The main focus of this project is initially to check the strategic orientation of the Human Resource function of the two banks and then give our analysis accordingly. For this we are using the model proposed by Devana. After identifying certain factors, we checked the strategic orientation of the bank. Initially an introduction is given and after that the banks are analyzed on the basis of the model and in the end our conclusion is presented. Research MethodologyFor finding out the extent of strategic orientation of the two banks, we conducted in-depth interviews with senior HR personnel of the two banks. The conclusion that we will be presenting in the end will be based on our interpretation of the data collected through interviews from the respected banks. A guideline about the interview questions asked from the concerned HR personnel is attached in Exhibit 1.

CHAPTER 2Literature ReviewAction plan, course of action are often considered synonymous to strategy formulated by an organization, however to be specific strategy is defined as to be an approach followed by the organization to create a match between its internal resources and external opportunities posed by the environment (Grant, 1999). Hence business strategy is often associated with SWOT analysis of the organization and for the purpose of implementation Michael Porters five forces model is used. Strategy is also referred to as a decision making pattern of any company revealing its goals and plans of how to achieve these achieve those goals (Andrews, 1997) or some have labelled it as a ways to identify the domains of the market where the product of company is going to be sold and companys structure and processes are a mechanism through which these strategies are pursued (Miles, Snow, Meyer and Coleman, 1978).Strategy is a way through which the compnay gains an edge over its competitors and the aim is to create competitive product market for the economic gains (Barney, 1986). Strategy can be broadly divided at three levels, corporate, business and functional. Corporate strategy focuses on corporate level resources to define the activities of the firm (Grant, 1999) or it transforms the companys competence into a competitive advantage, whereas the business strategy determines how the company competes in a given position (Andrews, 1997).As organizatonal strategy finds fit between external and internal environment, strategic management examines how the goals can be adjusted and amended so that organizational strengths and weaknesses exploits the environmental opportunities and threats (Bratton & Gold, 2003). Both business strategy and corporate are the results of strategic management and in case of every company the outcomes of the efforts are uniques corresponding to each situation (Andrews, 1997).Strategic Human Resource Management:As the importance of human resources grew in the organizations and played integral part in its success, the personnel management became more strategy-driven (Perry, 1993). Human Resource Function and strategy merged together to give birth to Strategic HR and under this approach the HR managers are asscociated with other managers and they will advice them in aligning their behaviors with overarching goal and strategy (Beer, 1997). The overall strategy trickles down to lower levels and HR function manages the implementation of that startegy at all levels. Corresponding to competitive strategies the behaviors of organization are adjusted and human resource practices are designed (Schuler & Jackson, 1987). For instance innovation is a strategy then performance appraisals should support group-oreintation, jobs will be designed so that their skills are developed, broader career paths are designed and long-term incentives are offered. Organizations have aimed at becoming strategic to achieve co-ordination between the functions, commitment of employees, leadership competence, innovation and creation, and open communication (Beer, 1997). For acquisition of all of this a cultural revolution is required and external factors like competition, globalization and need for continuous change have pushed towards these state. Human Resource Management have two basic approaches, firstly it had to examine the relationship among HRM and organizationss performance and secondly tackle the increasing critique on it (Guest, 2002). Along with this HR has also realized that they simply dont have time to do both functions, strategic and administartive (Beer, 1997) hence devolution of some administrative work is required and this leads to friction between HR and line. Hence admist the creation of strategic HR the critique is done on HRM for being a support department and enjoying priviledges, while operational work is carried out by the line. Line is not appreciative of the devolution and tension does exist even though HR functions intention behind devolution was to create an integrative and collaborative culture (Cunningham & Hyman, 1999). Integration of the workers into the overall business has also been done to enhance the commitment and identity of interest with the organization (Bratton & Gold, 2003). However it does not produce the desired results all the time. For better understatnding of the HR function it can be studied undet two models. The models are of the opposing nature of managers and their control startegies. Thus argued that due to their broad and divergent assumptions both of the models cannot be brought under a single model of HRM (Truss, Gratton, Hope-Hailey, McGovern & Stiles, 1997). Hard models refers to more strict and strategic control and softer model of HRM is inclined towards Theory Y and control through commitment. While the HR function turns more strategic they devolve responsibilities to the line, hence the line managers takes the responsibility of people management roles. Now it is up to them how they perform this role and which style they prefer, can be hard one which is control-centered or can be a soft one which is more of facilitative (Cunningham & Hyman , 1995). However many organizations state that they are focusing on softer model of HRM and that is what they prefer, but in reality the implementation is that of the Hard model of HRM. This difference in rhetoric and reality should be eliminated (Truss, Gratton, Hope-Hailey, McGovern & Stiles, 1997).With changing times there is a need to create a value-added HRM. Regarding this the four different perspectives about HRM come in play. The debate is about whether best practice or best fit has added more value to HR. One is related to universal success and the other takes into account the contextual factors. It has been deduced that along with other factors including the resource-based model, some instituational mechanisms play a significant role in development of HR practices and policies (Paauwe & Boselie, 2003). It has been argued upon that universalistic perspective is too simple to be implemented in the dynamic world which is constantly changing (Rowley, 1997). Further there is an opinion that one of the intermediate factors between HR and organizational performance is a strong organizational culture and climate, which translates into a strong situation that the individuals of company share and this makes them more aware about what is expected of them and in what way they should be exhibiting their behaviors (Bowen & Ostroff ,2009). An HR systems strength explained how the employees contribute to the creation of organizational effectiveness. Organizational culture does play an interactive role in development of competitive advantage (Chan, Shaffer and Snape ,2004). In addition to this the organizational culture plays essential and an intermediary role between HR systems and dvelopment of products and services. HR systems and culture have reciprocating effect on each other for instance, if innovation is required then HR systems should innovation orientation. (Lau & Ngo, 2004). Similary an open and colloborative culture would have effect on the HR practices and policies. Strategic decision making is done at Chief Executive level, rather than at Board of Directors (BOD), hence the BOD membership is not necessary for the strategic decision making. However it is evident that the Directors do influence the strategic plans and while developing the representatives from specialities acted as general managers of business instead of going ahead with advocacy of their respective specialities (Kelly & Gennard, 2007). Another aspect regarding the development of HR function as strategic is the presence of HRs representative at board level or where the strategies are formulated. It has been observed that HR has presence at the executive leve and due to this the HR has been observed to become increasingly strategic in MNCs (Kelly, 2001). HR can become strategic or align itself with busine startegy in two ways, either reactvely or proactively. Reactive mode is when the busines strategy dictates the development of HR strategy and its practices are designed to complement business startegy. However the strategically proactive mode is when HR creates the culture and linked the internal processes and structure of the organization, while making it flexible to changes (Brockbank, 1999). Many of the Forutne 500 companies have indicated towards integrated strategic planning and HR systems. HR executives were found to be part of the planning process as the strategic partners hence also played an essential role in implementation of buiness strategies (Martell & Carroll, 1995).Along with being proactive, there is a need for HR head to have good interpersonal relationship with directors and an effective management style which is appreciative of the contribution towards achievement of business goals. This will add upto development of people oreintation and foster a culture of collaboartion, which would translate into strategic HR function. (Kelly & Gennard , 1996). As the world is changing and the organizations have widely spread over the globe there is increased need for decentralization of the HR operations along with its role in startegic decision making, centralized values or the perceived importance of the HR function itself (Jacoby, Nason & Saguchi, 2005). Where some argue that decentarlization does not necessarily means HR has become strategic, others found that devolution to line has positive relation with the startegic integration and HRM functions performance, but a weak realtion was observed between the performance and strategic involvement of HR function (Teo & Rodwel, 2007)Strategic Orientation in Banking Sector:Human capital is one of the most critical factors in the strategic success of banks in general. Researchers (Ulrich, 1995) have also pointed out the need for matching HRM with strategy. In order to gauge the effectiveness of these HRM practices, they must contribute to the bottom line of any organization (Pfeffer, 1994, Huselid, 1995 and Guest, 1997)

Commercial banks are profit making institutions that deal in a wide range of financial services including deposit, loan and trading facilities. In todays highly competitive banking business, commercial banks with almost comparable products and services are working on improving their customer service which will act as a competitive edge for them. In achieving this they either downsize or right size themselves to be more cost effective. This current trend has evolved great need for Hr to be strategic (Rajan, 1998)

In todays world of intense competition, in order to maintain a competitive edge a highly committed workforce is a pre requisite. As strategic partners, HR managers should know which HR practices will translate in the overall business strategy of an organization (Romeo V.Suares, 2009)

To remain in business commercial banks have to retain a high degree of credibility and financial stability for which it has to keep track of all uncertain factors that may arise. This requires sound and well thought through HR policies and managing of significant risks in the human resource area. These risks include recruiting the wrong people, inadequately training and developing employees and failing to cater to future human resource capability needs etc.

A research carried out by, Omondi, Magutu, Onsongo and Abongo (2011) was designed to collect cross sectional data on SHRM practices employed by commercial banks to managing its human resource for enhanced performance. The study targeted all commercial banks in Kenya and its findings indicated:

The number of years an organization has been in operation affects its HRM practices. Those banks which had been in operation for longer had more properly aligned best HR practices with respect to the changing external environment.

The number of employees also influences the HRM practices in an organization. It was found that banks generally have a balanced number of management level and low cadre employees The results from the data analysis and findings from this research led to the conclusion that a number of HR practices can act as strategic weapons for a bank to remain competitive. These can be divided in two components:

1. Post-entry/ on job SHRM practices which include implementing a banks chosen HR practices while effectively managing the resources to support the business strategy.2. Pre-entry strategic HRM practices which allows the organization to recognize the roles of employees before they are recruited, careful selection, Development and training of the employees.

According to the research by (Omondi, 2011) the factors discouraging the adoption of SHRM practices by commercial banks relate to poor communication between management and employees, ineffective decision making process and the inability of the union representatives and managers to discuss their concerns openly to find a solution. A second major component shown by the findings was of the failure of banks to apply non traditional incentive pay plan and the reluctance in profit sharing with its human resource. Another factor was that of poor job orientation of the employees, with less clarity of goals and work behaviours to exhibit on the job.

CHAPTER 3Model under StudyThe basic inspiration behind the model that is to be studied in this project was derived from work of Mary Anne Devanna regarding one of the strategic HRM model, called matching model. Her work was first published in 1984 in Strategic Human Resource Management along with the work of Charles J. Fombrum and Noel M. Tichy. Devanna in her framework had developed an argument that the HR systems along with organizational structure should be operated and controlled in a manner that it is coherent and integrated with organizational strategy. By making some addition regarding the indicators that make HR function strategic this model has been changed and then studied in the respective organization. Following is the model:

Presence of HR head in BODResource: Skills and Competencies

Reporting channel and linkage

In this model it can be seen that the business strategy is effecting; organizational structure and culture and formulation of HR strategy. Organizational structure and culture is also having an effect on HR strategy and the HR strategy is in turn influencing the organizational structure and culture. Meaning either it can be that the Hr strategy formulated is in accordance to the structure and culture of the organization or the HR strategy can dictate the development of culture and structure. This happens when HR is proactive in organization. Now there are other factors that create the alignment between HR and business strategy and decides whether HR is reactive or proactive. For instance the quality of the human resource the department and the organization is equipped with. The skill set and competencies. This can include the planning, organizing or the decision making ability among the HR department and its Head. If the HR head is equipped with skills to make the decisions and become strategic then there are chances that leader will pave the way for strategic HR function. Reporting channel and linkage is another factor which is also been observed in the HR department when it is performing strategically. What kind of reporting channel direct or indirect has an impact on the HR strategy being in line with business strategy. Directly reporting means that the HR head is directly giving feedback to the business unit head and there is no mediator in between. This will help in clear communication between the two and much better input could be given through direct communication lines. Secondly the linkage is observed whether it is one-way, two-way or integrative. This also explains that how much preference HR is given while formulating the overall strategy and whether their input is considered or they are merely a tool for implementation. This again sheds light on the reactive or proactive nature of the HR function.Lastly the presence of HR head on the BOD of directors will be observed. Whether HR is given importance that they have their representation in the BOD or not and are they taken into account when designing the strategy. If this is there then there are chances that HR function will strategic in the organizations. Through studying all these factors HR function will be analysed that how much strategic is the function. These variables explain the designing and formulation of the HR strategy, but through that the current state of HR function will be decided, that how these factors play their role in making HR strategic.

CHAPTER 4Results and AnalysisAskari Bank:As a public limited company, Askari Bank was established in Pakistan on October 9, 1991. It started its operations on April 1, 1992. The bank is listed on the stock exchanges on Karachi, Lahore and Islamabad. From the very start, the bank has followed a growth strategy by investing in the improvement of service, technology and enhancing the capabilities of its people. VisionTo be the bank of first choice of the region.MissionTo be the leading private sector bank of Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards while providing enhanced value to all our stake-holder, and contributing to society.Core ValuesFollowing core values are what being followed at Askari Bank: Commitment: Passionate about our customers success and delighting them with quality of our service. Integrity: A distinctive investment, delivering outstanding performance, return and value. Fairness: Exemplary compliance, governance and business ethics. Teamwork: Caring for our people and helping them to grow. Service: Dedication towards social development and improvement in quality of life. Like for every other bank, the regulatory authority for Askari Bank is State Bank of Pakistan. It has to follow the guidelines given to them by the regulatory authority and if they fail to do so, then in the year-end audit f discrepancies are found they will have to pay heavy fines. It has a vast presence all over Pakistan. It has divided its presences in to three regions North, South and Central. It has branches present in 85 cities across Pakistan. Askari Bank is catering to the needs of people from all walks of life. This is done by them by providing the customers with wide range of banking products in the following areas: Commercial Consumer Agricultural Islamic CorporateHuman Resource Department at Askari BankComing on towards the HR department of Askari Bank, first of all let us see the general hierarchy and reporting channel of the bank Following HR practices are seen being followed at the bank: Planning:The HR department is responsible for forecasting the demands of employees in the upcoming year. Like if new branch is to be opened then how many employees will be required and if the requirement would be fulfilled by internal sources or external hiring needs to be done. Recruitment:As mentioned above, Askari Bank is following the growth strategy so frequently recruitment is done of new and experienced staff. For this purpose, they give advertisements in the newspapers, on their websites and they also receive direct applications which are stored in their data bank and in time of need are referred to it.

Selection:After the candidates have been shortlisted they are called for a written test (usually for the fresh graduates). After the candidate has passed the test, he goes through a series of interviews with different officials and finally the candidate has to undergo through a medical test and then he is hired. Training and Development:Askari Bank pays special attention towards the training and development of the employees as this is evident from the fact that they have a separate training wing and employees usually MTOs (management trainee officers) and JOs (junior officers) receive training related to the different banking areas and personal development. Refresher courses are also offered to the current employees so they remain up to date with the changing trends of the industry. Compensation:In the area of compensation, we have come to know that they follow the policy of external equity. Performance Appraisal:This is the most important practice for any organization as because of this the salary increase, promotions and training needs are identified of the employees. At Askari Bank, for the formulation of the Annual Performance Report they follow a 360 degree appraisal system. For different identified skills the employees are rated on a scale of A-E which has different percentages. Strategic Orientation of the HR Function at Askari BankAt Askari Bank, the HR department was headed by the HR head. He considered himself to be strategic partner and someone who was bringing change and facilitating it. He has been in to this position for the past three months. He is transferred here from the training wing of the bank. The HR head before him served at this position for almost a year. The HR head considered the HR function to be highly strategic and was of the view that we have become 60% strategic and are still evolving. HR does not have representation at the Board of Directors. A committee by the name of HRC (human resource committee) is present where different strategies are formulated and their recommendations are sent to the BOD where discussion is carried and then sent back to the HRC. (two way linkage). The bank has decided to open almost 100 new branches in the coming year so the HR head is of the view that we will not be developing strategies for just for the present but we will be looking at the future. We will have to now look at the potential 8000 employees we will have in the future. We will have to design policies in such a manner that cater to the change the employees will go through. When asked to elaborate on the change he was referring to, he said because of the opening of so many new branches many employees who were previously nobody will come out in the front, we have to develop them in time so when the time comes they can take on the new positions with ease. A senior HR officer when asked of his views about the strategic nature of the function, he replied On a continuum of 1-10 one being the function administrative in nature and 10 being the function strategic in nature, I would place my HR department at 4. But he shared the same view as his head that we are evolving and becoming more strategic in nature. When asked to elaborate on this fact, he was of the view that we have started devolving some tasks to the line like now line could do transfers at the regional level. The employees whose services are to be terminated, they are solely identified by the line and their decision is considered final. It was also told that that HR was freeing its hands from strategic work by bringing in automation of different tasks as well like the annual appraisal system was in process of being automated.There are certain practices that are done by HR and line together like the performance management system initiated by HR and completed by line but finalization is still in the hands of HR. For recruitment the request is initiated by the line but then the process is followed through jointly by line and HR. There are still some practices that are solely in the hands of the HR department like the end of the performance management process, HR metrics, compensation etc. When asked that what kind of approach is being followed at the HR department then the employees were of the view that they are following a proactive approach. When asked that what was the evidence for this, it was told that HR department is working towards the betterment of the employees and is taking many self initiatives like a survey was being conducted to improve the employee commitment, cash handling allowance was under revision, a rule that was established that no one can ask the women employees to work beyond 5:30 p.m. this was aimed at providing work life balance and many other initiatives like that were also in the pipeline. They were also of the view that if talked in terms of profits then, definitely after acquisition the bank is performing better. From the discussion it was also inferred that the bank was moving towards the model of business partners as they had HR representation at the regional level but they were acting in the supporting capacity only. When an employee who recently shifted from a line position to the HR department was asked about her views that what line thought about the HR, the answer was what we always find in literature, that the line is not happy with the role of HR. she was also of the view that HR failed to understand the cultural inconsistency across different branches as she said that depending upon the type of customer we had to change the way of dealing with him but HR is always of the view that no matter what the same guidelines have to followed across all the branches. The policies are not made by keeping line in the loop. Even when policies were being made for the benefit of the line, they could not reap benefits from it properly. When the employee was asked that after shifting to the HR department whether her views have changed or not. To this she replied that what I have learnt till now is that the HR works on employee satisfaction and line works on customer satisfaction and it is a very difficult job to get both of them on the same line. When asked that whether you feel comfortable with the centralized, bureaucratic structure, her answer was yes that now she understands that the bank needs to follow this kind of structure as they are dealing with someone elses money. Allied Bank:Allied Bank started its journey by the name of Australasia Bank in Lahore in the year 1942. It changed its name to Allied Bank in the year 1974. The bank was acquired by Ibrahim Group in the year 2004 and it was again renamed and became Allied Bank Limited. Allied Bank has a strong presence of over 70 years and is dealing with clients of multiple natures. This has been made possible for them by the banks humongous network of 900 branches and 700 ATMs present all over Pakistan. The bank believes in developing a strong culture among its employees so that they would be able to carry out the business tasks with consistency. Through the following vision, mission and core values the bank believes to have boarded on a ship that would help them move forward in the 21st century.VisionTo become a dynamic and efficient bank providing integrated solutions in order to be the first choice bank for customers.Mission To provide value-added services to our customers. To provide high-tech innovative solutions to meet customers requirements. To create sustainable value through growth, efficiency and diversity for all stakeholders. To provide a challenging work environment and reward dedicated team members according to their abilities and performance. To play a proactive role in contributing towards the society.Core ValuesAllied Bank follows the following core values Integrity Excellence in Service High Performance Innovation and GrowthAllied Bank also falls under the regulatory authority of State Bank of Pakistan and has to adhere to the guidelines provided by them. The bank is divided in to three sections North, Central and South. Their central region is considered to be the largest as it is further divided in to two subgroups Central 1 and Central 2 each having 7 regions of its own. The remaining two areas have 9 regions each. The general hierarchy of each section is given below:

Human Resource Department at Allied BankHR department at Allied bank is considered as a very important function at Allied bank. This can be said from the fact that they have developed a mission statement for their HR department which is The mission of ABL HRM is to guide, facilitate and coordinate Organization wide effort to provide innovative, cost effective human resources programs to recruit develop and retain a highly qualified diverse workforce, reward employees throughout the organization.The following HR practices are followed at the bank: Planning:To cater to the changing needs of the bank, the HR department tries to anticipate the workforce needs of different branches. For this purpose the department launches an extensive forecasting process to prepare themselves to cater the needs of providing talented and qualified people at the right time for the right position. Recruitment & Selection:The process of recruitment and selection at Allied Bank aims at identifying the right person for the right job at the right time. It also aims at creating a diversified and balanced and unbiased workforce. For recruitment, external and internal sources are both utilized for finding a candidate. In external sources, the bank places advertisements in leading newspapers and on the banks website. When the bank utilizes internal sources, then it uses its established data banks and places advertisements on the internal news boards. When the candidates have been shortlisted then they undergo through written tests and series of interviews and after compilation of the results, the final offer letter is issued to the candidate. Training and Development:Hiring good employees is just the initial step towards profitable growth of the business. After hiring the best, the organization needs to constantly train and develop its employees. Allied bank is no different from this; they not only give training to their current employees but also give refresher courses to its current employees. They have two training academies in Lahore and Karachi and one in Islamabad. Trainings are also given to the employees in the form of seminars whenever there are policy changes At Allied Bank; training is given to the employees after conducting an in-depth training need analysis. This starts by conducting an organizational need assessment then task needs assessment and after that employee needs assessment. After these the training objectives are developed and then training is designed accordingly. Compensation and Benefits:The compensation packages offered at Allied Bank are very attractive and after joining this family the employees get entitled to many monetary and non-monetary benefits like gratuity fund, provident fund, staff loans, bonuses, medical insurance, attractive salary packages etc. Performance Appraisal:After serving at the bank for a certain time period, the employees go through the performance appraisal process. This is done to determine the usefulness of the employee. It can also be used increase the motivation and performance level, identify training need etc. Allied Bank also uses the 360 degree performance appraisal system. In this, the feedback from all the sources is given great importance. Career DevelopmentAllied Bank also pays a lot of importance to the career development of its employees. For this purpose different job opportunities are given to them that match with the goals of the career path of the employees that they have identified. For employees, career development workshops are also organized.Strategic Orientation of Human Resource Function at Allied BankThe interview was conducted with a senior HR professional of the department. First of all the generic question was asked that whether you think your department is strategic or not? The answer was yes we are very much strategic in nature and if it would be to quantify then we are 80% strategic and are still trying to increase our orientation. The HR head has representation in the board of directors and their input is considered very important. According to the input given by them the decisions are taken at the spot accordingly. This showed that they have an integrative linkage present. Although it is the policy of the State Bank that on one position a person cannot stay longer than three years until it has been specially approved by the President of the bank. In Allied Bank, the HR head is on this position for almost 6 years as it is the impression that the department is performing very well under him. He has brought the concept of automation in the department. He has introduced high tech softwares for different HR functions. Like OLM 5 for the purpose of compensation, MNP (manpower planning) for the forecasting purposes, AMNOST 24 for the purpose of checking the customer satisfaction, Specialized APR (annual performance review) is used for performance appraisals and many others like that.When asked about the consistency of organizational culture across different branches then they were of the view that we have automated our system to that extent that a branch located in a small unknown village will have the same system as a branch operating in a well-known city. Through the vast extent of automation, many tasks have been devolved to line but there are still tasks that are still centralized like the hiring, firing of employees and deciding on the compensation of the employees. The HR is satisfied with the work line is doing. The privatization of the bank happened in the year 2005-2006, and it is believed that after this the bank has improved a lot and has also taken a lot of initiatives to become strategic, as automation was brought by the new management and now all of the employees are of the view that for an organization and especially a department to be successful automation is very necessary

Analysis:The factors in the model presented have been observed in both the banks to some extent. Now the question rises about the intensity of their relationship and is the mere presence making the HR function strategic or not or as pointed out in the literature that whether the organizational performance and effectiveness have reached to optimum level.In Askari Bank even though the HR head is not present in BOD but have direct reporting link to President of the Bank and moreover has a good interpersonal relations with the President. So exploiting this factor the HR head can pose suggestions which will be heard and given importance while formulating the business strategy. Moreover the management style of the HR head is collaborative hence him taking aboard his department and then coming up with policies that can be communicated to the President, where there are chances that they will be incorporated into the business strategy. For instance the Askari Bank is going for the expansion in the coming year, due to which increased number of staff will be employed and handled by the HR department, thus they have started the automation of the operational work, so that it becomes more streamlined and will not put burden on the department regarding the operational work. Hence if devolution and automation works well for the organization then its HR department will have time for more futuristic planning. However currently devolution is done but branch managers have huge responsibility of their operational work that sometimes they are not able to fulfil the personnel management responsibilities up to mark and it are complying with the HR policies being made by the department. Hence the Bank is struggling with creating a right balance between the freedom and control over the line management. The line is given authority regarding the recruitment and selection and transfers as they are more aware of what they require. Even though the final authority lies with HR still, lines advice does not go unheard. Regarding the competencies and skills of the HR department is concerned, Askari Bank lacks in that to some extent, however the new HR head does posses skill and competencies to make decisions which will increase the strategic orientation of the HR function. However the head has appointed couple of months ago, so too early to say that the vast amount of information and experience they possess about the HR functions working will be translated into sound decision making or not. Another factor observed in HR of Askari Bank was that it is functioning in a reactive mode and takes decision or makes policies to cater to grievances or the problems. It has still not taken an initiative to develop the culture or environment in a way that HR leads the organization. Similarly coming to Allied Bank, the factor that distinguishes it from Askari Bank is that their HR representative is part of the Board of Directors. Thus HR has its presence at the point of origination of strategy. HR takes parts in the formulation of the business strategy, thus clearly shows that integrative linkage is present in Allied Bank. Overall business strategy formed has the support of HR and hence HR designs its practices and policies accordingly. The current HR head has been there for almost six years and has spent a lot of time; hence it can be deduced from that perspective only that HR head does possess competency and skills to develop a strategy which is supportive of business strategy and creating a strategic HR function. Another distinguishing factor between Askari and Allied Bank is that Allied has automated vast amount of their administrative work. This not only relieves the burden of the HR department but also streamlines the administrative activities. Automation for Allied is not only just a requirement but a necessity for them, and that is the reason HR has state of art information systems. These information systems allow HR of Allied Bank to easily do the planning and organizing of the activities. Hence it can be said that the information systems also help in making the HR strategic. Automaton was brought in by the current HR head, hence we can say that even though automation was required but the Head has identified that in coming times this will be a necessity thus futuristic planning was done at the part of the HR department. Common ground between Askari Bank and Allied Bank is that they have both been acquired by corporate entities. The only difference is that Allied was acquired in 2005 and Askari Bank in 2013. However post acquisition both the banks HR departments have transformed to a greater degree. Their strategic orientation has increased by many folds. Before this Allied Bank was functioning as any local, government owned entity is. Hence the transformation occurred when the top management changed and their tone set the basis of transformation in the organization. This transcribes that the mentality of the top management effects whether or not they want their functions to be strategic. In both the cases the top management changed and visible difference could be observed as the HR departments strategic orientation has increased. Organizations leadership was an additional factor which was observed and constant among the two organizations. It is up to the leadership that what they want and how they want it. Another aspect through which change was brought was that after the private or corporate enterprise have acquired these banks, there is injection of resources and they play a vital role in bringing about the change. These resources support the organization to change the culture and the environment and hire the competent human resource that have a vision and will to bring about the change. Thus competent work force contributes to the development of strategic HR function and to some extent, when comparing from past both the banks had hired and developed a competent workforce. While examining the HR function through the model, it has been observed in both the banks that the relationship of HR strategy with the culture and organizational structure was weak. It was observed but this factor was not a very strong one as compare to other factors. Firstly in a bank to maintain a consistent culture is a difficult as the branches and offices are geographically spread over the regions. Even though employees have the awareness of the basic core values of the organization but they are not shared with the same intensity everywhere. Consistency was regarding the processes that were automated were same in every part of the country. As the banking sector has strong SOPs that need to be followed around all the branches strictly and often the same processes and strict SOPs are mistaken to be consistent culture. In reality culture is much more than just the stated policies and procedures, it is an intrinsic factor which is embedded in the workforce of the organizations and mostly the HR strategy develops the culture of organization. This was however not observed in the case of Askari or Allied Bank. In this case, mostly the customers and the bank account holders dictate the culture. Hence it differed from branch to branch.Secondly the organization structure was tall in both the organization and a hybrid of centralized and decentralization. The literature pointed out that due to changing times the organizations are becoming flatter hence there is a need for strategic orientation through strong channels of communication, but in this case the organizations were tall but still possessing strategic indicators, explaining that even in taller organizations HR can be strategically oriented, even though it will have problems and mostly focus on top-down approach. Apart from model, the image of HR in sight of line was more or less same in both the organizations. Line believes that HR does not get its hands dirty in the operational work and they are not even doing strategic work. They believe that HR makes policies while remaining in isolation, and they dont have much idea of how the daily operations are carried out. However the HR believes that they have to take into account of all the possible factors and then make policies. Hence there are some grey areas between HR and Line, which cannot be categorised as to whose responsibility is where. Still HR should make efforts to take into account all the opinions and communicate its policies well. Both the banks dont have business partner structure and on inquiry of why they dont have then the answer is that there is no need for it. This again exhibits their reactive nature. HR is mostly working in the reactive mode, even though it does possess the ability to function proactively. The strategic HR function increases the organizational effectiveness as business strategy trickles down to the lowest level and everyone is aware of what behaviours are expected of them, hence individual will be acting in a way that is favourable for organization. Lack of strategic orientation will be resulting in lack of communication of what is expected of them and the individual will be performing without the knowledge of where he/ she are heading and what is their contribution in the overall organization. As far as Askari Bank and Allied Bank there was lack of communication to the lowest levels and the employees were aware of their operational goals and what they have to achieve but they are still unaware of their contribution to the overall goals and aims. HR functions knows that what they are doing and they are trying their best to strategically align themselves to the organization, however this has to be communicated to the lowest levels so that everyone is playing part in organizational effectiveness.

CHAPTER 5Conclusion and RecommendationsThe model exhibits that HR strategy is reactive to the business strategy. To some extent this was observed in the organizations, however in Allied Bank due to HR heads presence in the BOD helps in creating an integrative linkage there.Overall there were some strategic indicators were present in both the organizations but we cannot say that the model taken under study was fully applicable in both the organizations. The common was that the weak relationship with culture and structure of the organization with the HR strategy. To some extent they be effecting each other but that was not visibly observed in either Askari Bank or Allied Bank. However the business strategy does affect the structure and culture of the organization, in a way that the business strategy creates a culture. If Askari bank is undergoing expansion and growth strategy, probably going for external growth also then the culture of the organization has to be developed in a way that it can handle the growth well. Otherwise if structure and culture does not support the growth then the desired results will not be able to reap. Factors like top leadership and perceived image of HR were factors other than the model. Leadership was effecting the construction of HR strategic function. As this is a tall structure hence there is a top-down approach and in this case the change of leadership and their styles can make a lot of difference and set the tone of whole organization. Leadership has played a role in the development of strategic HR in both the banks. After comparing the top leadership of the HR department of the two banks, we can also come to the conclusion that the department head should be appointed for a longer time period as by this they have time to not only just bring improvement in the department but also can see the results. If something is going wrong then they can act accordingly as he is the one who has implemented the strategy and knows it best and can remove the bug in it. This argument can be supported by the fact that the head of HR Allied bank is there for the past six years and has brought a lot of improvement there. We also came to know that the people in the bank were also of the view that the head should have a broader set of knowledge meaning that he should have some understanding of the working of the line and he should not be completely detached from it.The perceived image of HR is not very good in both the banks, which suggests that there is lack of communication and link between HR and Line. This can be worked upon and improved. Allied Banks claim to be rated well on employees satisfaction, however Askari Bank is undergoing a process of surveying their employee satisfaction and commitment. For both the organizations a lot has to be done to make themselves strategic. As this model does not take into account any environment factors, but the strategic orientation will lead to external and internal fit and this will create strategic orientation as well as increase organizational performance along with the organizational effectiveness. When HR is devolving some functions it should be done completely. It has been observed that the HR still doesnt want to let go certain things completely like in Askari Bank they have devolved the function of hiring to the line but the final authority still lies with them. This shows that they are of the view that we have observed in literature that if HR will give their work to line then what will HR do? So, they have still maintained some control over the administrative work.Strategic Orientation doe not only mean that HR is strategic with the business strategy, however it also has to examine that how HR is complementing other functions of the business and are they all on one page and what is HR doing to create alignment. If this is to be seen there is still al long way that the HR of Allied and Askari Bank become strategic. The HR is still mostly reactive and not proactively managing the culture of the organization which supports the business strategy and create cohesion between all them. There are HR representatives in different functions to assist them in both Banks but they are not very effective. If we have to compare Askari Bank and Allied Bank and analyse that which one of them is having more strategic orientation then there Allied Bank will be better off. Firstly because of their presence in BOD which is very vital while strategy formulation. Secondly Allied Bank have already automated their administrative tasks and they have state of art information systems supporting their HR. This is helping them in carrying out the performance appraisals or recruitment, and along with they are able to plan their manpower by forecasting the demand and supply. Automation leads to streamlining of activities, consistency in them is achieved and moreover better results can be combined which will in turn assist in better decision making. However Askari Bank has able to change themselves quickly and they are on road create strategic fit of HR function. The current head of HR at Askari Bank had a line background as he was previously the training head of the bank. The department was of the view that he would be better able to lead because of his diverse background. HR also needs to put some effort in to improving the relationship with line because all the departments need to work in harmony with each other if they want to succeed and HR is such a department that needs to work with every department and needs to have a good repute. In Askari Bank, efforts were under way to improve that particular area.Recommendations:HR function should take more initiatives in both banks. This will help in development of culture which will foster growth and support the business strategy. Proactive HR function will help in anticipating problems and solving them before they make damage, or at least mitigate the damages by preparing yourself. Along with communication between top-tier and HR, there is need for improved communication between HR and Line. While making policies, opinion of line should be taken into account, as they are suppose to handle operations and they know how work is done and what are the requirements. Similarly while implementation of a certain policy HR should communicate that due to what reasons certain steps are taken and what will be its benefit. Open communication lines will not only clear out misconceptions between line and HR, will also explain with clarity as to what is expected of them. They will be informed that what is the strategy and how they have to behave to achieve the desirable outcomes. Accordingly the individuals will adjust their behaviours suiting business goals.Development and enhancement of interpersonal relationship with the top-tier or the executives is necessary so that HRs say is given importance. For Askari Bank they should cash upon better relationship of Head with President and make suggestions which will strategically align HR with business and other functional units of the Bank. Even though this is a tall structure still opinions from lower levels should be taken into account and their voice should be given importance. This will increase the employee commitment and their satisfaction. Not only this they will know their contribution and will be able to individually measure their performance.

REFERENCESAndrews, K. R. (1997). The concept of corporate strategy. In N. J. Foss, Resources, Firms and Strategies: A reader in resource based perspective (pp. 52-59). New York: Oxford University Press.Barney, J. B. (1986). Strategic factor markets: Expectations, luck and business strategy. Management Science , 1231-1241.Beer, M. (1997). The transformation of human resource function: Resolving the tension between a traditional administrative and a new strategic role. Human Resource Management , 49-56.Brockbank, W. (1999). If HR were really strategically proactive: Present and future directions in HR's contribution to competitive advantage. Human Resource Management , 337-352.Catherine Truss, Lynda Gratton, Veronica Hope-Hailey, Patrick McGovern and Philip Stiles. (1997). Soft and hard models of human resource management: A reappraisal. Journal of Management Studies , 53-73.Chung-Ming Lau and Hang-Ye Ngo. (2004). The HR system, organizational culture, and product innovation. International Business Review , 685-703.David E. Bowen and Cheri Ostroff . (2009). Understanding HRM-Firm performance linkages: The role of the 'strength' of the HRM system. Academy of Management , 203-221.Gennard, J. K. (2007). Business strategic decision making: the role and influence of directors. Human Resource Management Journal , 99-117.George O. Omondi, Peterson Obara Magutu, Cliff Ouko Onsongo and Linda A. Abongo (2011), The adoption of strategic human resource management practices in commercial banks: The process and challenges in Kenya, Journal of Human Resource Management Research, 1-20Grant, R. M. (1999). The Resource Based Theory of Competitive Advantage: Implications for strategy formulation. In M. H. Zack, Knowledge and Strategy (pp. 3-24). Butterworth-Heinemann.Guest, D. (2002). Human resource management, corporate performance and employee wellbeing: Building the worker into HRM. Journal of Industrial Relations , 335-358.Ian Cunningham and Jeff Hyman . (1995). Transforming the HRM vision into reality: The role of line managers and supervisors in implementing change. Employee Relations , 5-20.Ian Cunningham and Jeff Hyman. (1999). Devolving human resource responsibilities to the line: Beginning of the end or new beginning of personnel? Personnel Review , 9-27.Jaap Paauwe and Paul Boselie. (2003). Challengin 'strategic HRM' and the relevance of the institutional setting. Human Resource Management , 56-70.James Kelly and John Gennard . (1996). The role of personnel directors on the board of directors. Personnel Review , 7-24.James Kelly and John Gennard. (2007). Business strategic decision making: the role and influence of directors. Human Resource Management Journal , 99-117.John Bratton and Jeffrey Gold. (2003). Human Resource Management: Threory and Practices. Palgrave Macmillan.Kathryn Martell and Stephen J. Carroll. (1995). How strategic is HRM? Human Resource Management , 253-267.Kelly, J. (2001). The role of the personnel/HR function in multinational companies. Employee Relations , 536-557.Lismen L.M. Chan, Margaret A. Shaffer and Ed Snape . (2004). In search of sustained competitive advantage: the impact of organizational culture, competitive strategy and human resource management practices on firm performance. The International Journal of Human Resource Management , 17-35.Perry, J. L. (1993). Strategic human resource management . Review of Public Personnel Administration , 59-71.Randall S. Schuler and Susan E.Jackson. (1987). Linking competitive strategies with human resource management practices. Academy of Management , 207-219.Raymond E. Miles, Charles C. Snow, Alan D Meyer, Henry J Coleman Jr. (1978). Organizational strategy, structure and process. Academy of Management Review , 546-562.Rowley, C. (1997). Comparisons and perspectives on HRM in the Asia Pacific. Asia Pacific Business Review , 1-18.Sanford M. Jacoby, Emily M. Nason and Kazuro Saguchi. (2005). The Role of the Senior HR Executive in Japan and the United States: Employment Relations, Corporate Governance, and Values. Industrial Relations: A Journal of Economy and Society , 207-241.Stephen T. T. Teo andJohn J. Rodwel. (2007). To be strategic in the new public sector, HR must remember its operational activities. Human Resource Management , 265-284.Suarez, R. V. (2009), Comparative strategies of human resource management in selected SEACEN Central Banks and Monetary Authorities , SEACEN Centre

Exhibit 1:Questions for Interview.1. What is the structure of HR in your Bank?2. What is the reporting line of HR head?3. Is the HR head having representation in the BOD?4. How much importance is given to the advice of HR in top circles of Management?5. What is the personality of your HR head?6. What is HR heads leadership style?7. Does the HR possess competencies to make strategic decisions?8. Does the HR head has the ability to make decisions which are strategic and is able to plan the work accordingly?9. What kind of culture is prevalent in their organization?10. Is the culture shared through the organization? And how well?11. Does the HR strategy build up the culture and environment?12. How would you rank the strategic orientation of the Bank?13. Is the department moving in the right direction?28