Chapter 1: 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.

1.1 Objective:

The thesis has been undertaken to assess the Strategic Human Resource

Management practices of Standard Chartered Bank with the prime focus at

formulation of strategies and tactics and how it contributes in implementing

the strategies.

1.2 Methodology:

The information related to the project has been collected from the Standard

Chartered Bank , Islamabad Branch . The methodology adopted is as

follows:

Collection of data by conducting interviews of officials of the

Bank

1

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.

1.3 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.

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Chapter 2: 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

Employee Relations

3

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.

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Chapter 3: Introduction To SCB

3.1 History of Standard Chartered Bank

Standard Chartered is the worlds leading emerging markets bank

headquartered in London. Its businesses however , have always been

overwhelmingly international. Standard Chartered is name after two banks,

which merged in 1969. 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 Chartered’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,

5

privilege it continued to exercise up until the end of the 19 th 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.

3.1.1 Expansion in Africa and Asia:

The Standard Bank opened for business in Port Elizabeth, South Africa , in

1863. It pursued a policy of expansion and soon amalgamated with several

other banks including the Commercial Bank of Port Elizabeth, the

Colesberg Bank, the British Kaffarian Bank and the Fauresmith Bank. The

Standard Bank was prominent in the financing and development of the

diamond fields of Kimberly in 1867 and later extended its network further

north to the new town of Johannesburg when gold was discovered there in

1885. Over time , half the output of the second largest goldfield in the

world passed through the Standard Bank on its way to London. In 1892 the

Standard Bank opened for business in Zimbabwe, and expanded in

Mozambique in 1894 , Botswana in 1897 , Malawi in 1901, Zambia in

1906, Kenya, Zanzibar and the Democratic Republic of Congo(D.R.C.), in

1911 and Uganda in 1912. Of these new business, Botswana , Zanzibar and

the D.R.C. proved the most difficult and the branches soon closed. A

branch in Botswana opened again in 1943 but lasted for only a year and it

was not until 1920 that the Bank re-opened for business in Botswana. In

Asia the Chartered Bank expanded opening offices including Myanmar in

1862, Pakistan and Indonesia in 1863, the Philippines in 1872 , Malaysia in

1875, Japan in 1880 and Thailand in 1894. Some 34 years after the

Chartered Bank appointed an agent in Sri Lanka it opened a branch in 1892

6

to take advantage of business from the tea and rubber industries. During

1904 a branch opened in Vietnam. Both the Chartered and Standard Bank

opened offices in New York and Hamburg in the early 1900’s. The

Chartered Bank gaining the first branch license to the issued to a foreign

bank in New York.

3.1.2 The Impact of War:

Even the First World War offered opportunities for expansion when the

Standard Bank set up a branch in Tanzania shortly after British troops

occupied the formerly German administered Dar es Salaam in September

1916. Both banks survived the inter-war years but he world trade slump led

to the closure of operations in the Canary Islands, Liberia, the Netherlands ,

and Equatorial Guinea.

Disaster struck the Chartered Bank ‘s office in Yokohama, Japan , when an

earthquake in 1923 killing a

number of staff destroyed it. The Second World War particularly affected

the Chartered Bank when numerous Asian countries were occupied by

Japan.

3.1.3 The Post War Years:

After the Second World War many countries in Asia and Africa gained

their independence. This led to local incorporation in some countries ,

particularly in Africa. Other operations such as those in Iraq, Angola ,

Myanmar and Libya were nationalized, while in Indonesia the Jakarta

office was destroyed in an attempted coup d’etat.In 1948 the Chartered

7

Bank opened in Bangladesh and during 1957 it acquired the Eastern Bank.

The Eastern Bank gave the Chartered Bank a network of branches including

Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab

Emirates. The Chartered Bank also entered into a joint venture to form the

Irano-British Bank , which opened for business in 1959. The bank grew

rapidly and had 24 branches when it was nationalized in 1981. By the mid

1950’sthe Standard Bank had around 600 offices in Southern, Central and

Eastern Africa. Its network grew substantially in 1965 when it merged with

the former Bank of British West Africa , which had some 60 branches in

Nigeria, 40 branches in Ghana and eleven branches in Sierra Leone in

addition to operations in Cameroon and Gambia. Despite these acquisitions

and expansion into new counties such Mexico , South Korea and

Oman(1968) , both the Standard and Chartered Bank networks were

comparatively small. Both viewed the future with some trepidation as the

need to protect themselves from acquisition became ever more apparent.

Standard Chartered PLC in 1969 the decision was made by the Standard

Bank and the Chartered Bank to undergo a friendly merger thus forming

Standard Chartered PLC. It was one year later that descendants of the

“Chartered Bank of India , Australia , and China” were finally permitted to

open a representative office in Sydney , Australia. Standard Chartered

subsequently acquired the UK based Hodge Group , in which it already had

a minority shareholding , and the Wallace Brothers Group. The Hodge

Group brought to Standard Chartered and extensive network of UK offices

specializing the installment credit and industrial leasing and after a period

of rationalization its name was change to Chartered Trust Limited. Standard

Chartered ‘s operations in Jersey emerged from the integration of other

Hodge Group business with those of Wallace Brothers Bank(Jersey),

Limited.

8

Standard Chartered decided, after the merger , to expand the Group outside

its traditional markets. In Europe a number of offices were open including

Austria , Belgium, Denmark, Ireland, Spain and Sweden as well as several major

cities in the UK. Standard Bank also opened offices in Argentina, Canada ,

Colombia, the Falkland Island, Panama and Nepal. In the USA a number of offices

were opened and three banks were acquired. These included the Union Bank of

California, which gave Standard Chartered a presence in Brazil and Venezuela.

The opening of a branch in Istanbul in 1986 was overshadowed by a far more

dramatic event when Lloyda Bank of the UK made a hostile take-over bid for

Standard Chartered . Standard Chartered won its right to remain independent but

entered into a period of considerable change.

By the late 1980’s Standard Chartered already had considerable exposure to third

world debt. To this was added provisions against loans to corporations and

entrepreneurs who could not meet their commitments. Standard Chartered

reviewed its operations and decided to focus on its core strengths of Consumer

Banking , Corporate & Institutional Banking and Treasury in its well-established

operation in Asia , Africa and the Middle East. This led to a series of divestments

notably in Europe, the United States and Africa. During this time staff numbers

were reduced; business not considered core were sold or closed; associate holdings

disposed of; unprofitable branches closed and back office functions consolidated.

In addition expensive buildings were sold with the proceeds reinvested in the

business , and the senior management team was radically changed and

strengthened.

3.1.4 Standard Chartered in the 1990’s:

Even within this period of apparent retrenchment Standard Chartered

expanded its network, re-opening in Vietnam in 1990’ Cambodia and Iran

9

in 1992, Tanzania in 1993 and Myanmar in 1995. With the opening the

branches in Macau and Taiwan in 1983 and 1985 plus a representative

office in Laos (1996), Standard Chartered now has an office in every

country in the Asia Pacific Region with the exception of North Korea. In

1998 Standard Chartered concluded the purchase of a controlling interest in

Banco Exterior de Los Andes (Extebandes), an Andean Region bank

involved primarily in trade finance. With this purchase Standard Chartered

now offers full banking services in Colombia, Peru and Venezuela. In 1999,

Standard Chartered acquired the global trade finance business of Union

Bank of Switzerland. This acquisition makes Standard Chartered one of the

leading clearers of dollar payments in the USA. Standard Chartered also

opened a new subsidiary, Standard Chartered Nigeria Limited in Lagos,

acquire 75 percent of the equity of Nakornthon Bank, Thailand; and agreed

terms to acquire 89 percent of the share capital of Metropolitan Bank of the

Lebanon.

3.1.5 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.

10

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.

3.2 Performance Review in Pakistan:

Standard Chartered has been in Pakistan since 1863 and is one of the

longest operating foreign banks. There are 6 Standard Chartered Bank ‘s

branches and 15 Grindlays branches have been acquired which makes a

total of 21 branches operating in Pakistan that offer full banking services in

corporate, institutional and consumer banking and custody services.

Adopting a pro-active approach , the bank is able to offer a flexible and

comprehensive range of financial services in particular transactional

banking products. The bank has also invested in its branches to ensure that

their business is supported by high-tech operations using state-of-the-art

technology. Dedicated customer services with solution-oriented cash

specialists to provide customers with cost-effective solutions. Electronic

delivery system has been put in place to give customers maximum control

of their transactions. Pakistan’s currency in the Rupee(Swift code: PKR)

3.3 Design and Approaches of Services:

3.3.1 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.

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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.

3.3.2 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.

3.3.2.1.1 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

12

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 customers 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.

3.3.2.2 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.

3.3.2.3 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?

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3.5.1 Limitations of the Ad-Hoc Approach:

The disadvantage of the ad hoc approach is that sometimes the bank over or

under estimates the transaction costs and thereof the benefits obtained from

centralization choose their significance.

3.5.2 Limitations of the Strategic Approach:

Disadvantages of the strategic approach are chiefly a function of size and

complexity. The strategic approach may not be the most cost effective as it

often ignores the implementation and running costs in favor of a corporate

strategy that is geared toward centralization.

3.5.3 Limitations of Pragmatic Approach:

The disadvantage of the pragmatic approach is the difficulty in maintaining

implementation efforts that are proportionate to the advantage that the Bank

can gain from the centralization activity.

3.6 Operations Strategies for Banking Services;

How can we satisfy our customer? This is perhaps the most important

question that the Bank can ask from itself and its people. Customer needs

and wants to run the full gamut , from tangible products, quality of services

delivered, and attitude of the entire management to the aesthetics. In this

regard , Standard Chartered Bank aims at satisfying these needs and wants

by developing and fulfilling missions and strategies, which can be as

diverse as the customers they serve.

14

3.6.1 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.

3.6.2 Operation Plans:

The Operational Plans of the Bank are as follows:

Deposits

Loans

Domestic Banking

Trust Operation

Treasury Operations

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Chapter 4: 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.

4.1 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.

4.1.1 Forecasting:

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

forecasting activities include:

1. Workforce numbers in sufficient detail to be useful.

2. Likely changes to the work of the bank.

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3. work force supply – this involves forecasting the variations in the current

work force estimated to occur over the following years.

4. impact on budgets and funding.

4.1.2 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.

4.1.3 Good Practice Indicators:

Standard Chartered Bank makes sure that effective human resource

planning process are in place when

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

meet forecast work demands.

2. The Bank’s structure provides with opportunity for appropriate career

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

practices.

3. Relevant workforce data is readily available to inform management

decision making on human resource issues.

3.1.4. 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.

17

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.

4.1.5 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.

4.2 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.

18

4.2.1 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:

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

employee’s own business or function and particular department.

2. Training in specific products or technical skills.

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

in a particular department for a period of time.

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

another business or support function.

4.2.2 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

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4.2.3 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.

4.2.4 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.

4.2.5 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.

4.2.6 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.

4.2.7 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).

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4.2.8 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.

4.2.9 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.

4.2.10 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 employees strengths.

4.3 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.

4.3.1 Who are they recruiting?

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

career in the financial services industry.

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2. Consistent academic performer throughout his/her education.

3. Career-oriented person

4. Energetic, ambitious ,innovative and business-oriented person.

4.3.2 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.

4.4 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.

4.5 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

22

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 its

working and operational processes have on the environment. They are

continually developing policies and practices designed to maintain the

highest appropriate standards.

4.6 Compensation:

At Standard Chartered Bank , the compensation package provided to the

employees can be divided into two categories. One comprises of the sales

personnel who are compensated on their ability to meet their targets.

Second is compensating the executives who are responsible for the overall

functions of the Bank.

4.6.1 Compensating the Sales Force:

How the Bank presents itself to its corporate as well as individual

customers is dependant upon the ability of its sales force. These are the

individuals who take and active approach is getting the message out about

the Bank’s products and services. How effectively the sales team markets

the Bank and in run, how successful it is , is directly related to the sales

compensation program.

The key to a successful sales compensation program is achieved in three

steps:

1. Clearly defining sales goals that are realistic but challenging

2. Tracking and measuring performance against goals

3. Rewarding achievement with competitive and motivational compensation

Sales compensation packages typically comprise one or more of the

following components:

1. Base Salary

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2. Periodic incentives tied to short-term goals

3. Annual Incentives tied to longer-term sales activities

4. Commission-based incentives

5. Perquisites to facilitate sales efforts

4.6.2 Executive Compensation:

The way the Bank pays its top management plays an important role in

motivating the critical performance needed to run it effectively. Base salary

is not the only component of the typical executive’s compensation package.

Executive compensation packages typically comprise the following

components:

1. Base Salary

2. Annual Incentives

3. Long-Term Capital Accumulation

4. Deferred Compensation Arrangements

5. Supplement Benefits and Perquisites

6. Special Severance and Retirement Arrangements

7. Employment and Change of Control Agreements

4.7 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 employees

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.

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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:

1. Spot Award + Rs. 5000 as cash prize

2. Surprise Award

3. Best Performer Award

4. Service Quality Award

5. YES( Year of Excellent Services) Award

4.8 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.

4.9 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.

4.10 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.

25

4.11 Job Design:

Job design comprises of six components. These are:

4.11.1 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

4.11.2 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.

4.11.3 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:

1. Skill Variety

2. Job Identity

3. Job Significance

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4. Autonomy

5. Feedback

4.11.4 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.

4.11.5 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:

1. Spot Award + Rs. 5000 as cash prize

2. Surprise Award

3. Best Performance Award

4. Service Quality Award

4.11.6 Ergonomics:

Ergonomics is the study of work. It deals with building a good interface

between the man and the machines . Keeping this in view , the Bank has

been designed in such a way so that the employees are comfortable working

there.

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4.12 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.

4.12.1 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.

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4.12.2 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.

4.13 Appraising Employee Performance:

4.13.1 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.

4.13.2 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:

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

A, which incorporates most top-level positions.

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

performance bonus.

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4.13.2 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.

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Chapter 5: Analysis

5.1 HR Planning:

HR Planning process consists of forecasting , goal setting and strategic

planning, and program implementation and evaluation.

HR managers should attempt to ascertain the supply of and demand for

various types of human resources. The primary goal is to predict areas

within the organization where there will be future labor shortages or

surpluses.

As the Bank operates in a dynamic environment where new and advanced

practices are frequently emerging resulting in changing customer’s

requirements. Not only this , the demands on existing staff resources

fluctuate in order to maintain the provision of services, it becomes even

more critical that all managers contribute to HR planning in a structure

way.

5.2 Recruitment:

Human Resource Recruitment is defined ad any practice or activity carried

on by the organization with the primary purpose of identifying and

attracting potential employees.

The goal of an organizational recruitment program is to ensure that the

organization has a number of reasonably qualified applicants(who would

find the job acceptable) to choose from when a vacancy occurs.

Standard Chartered Bank recruits the most talented individuals from the

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

Resources department provides guidance on the use 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

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

management trainee program across all businesses , functions and

countries.

5.3 Selection:

Any organization that intends to compete through people must take the

utmost care with how it chooses organizational members. Personnel

selection is the process by which companies decide who will or will not be

allowed into their organization. Several generic standards should be met in

any selection process, which are reliability , validity, generalizability, utility

, and legality.

Standard Chartered selects employees 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.

5.3 Training & Development:

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.

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5.4 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.

The key elements of a Performance Management System include the following:

1. A Formal Compensation Philosophy Statement

2. Salary Administration Program

3. Job Evaluation System

4. Performance Appraisal System

5. Reward Programs

5.5.1 Purpose of Performance Appraisal:

There are a number of reason for carrying out the performance appraisal of

employees such as promotion , transfer etc. Therefore , the Bank makes sure

that the employees clearly understand the objectives of the performance

appraisal.

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5.5.2 Performance Measurement Criteria:

Once the Bank has determined what kind of performance it expects from

the employees, it needs to develop appropriate ways to measure that

performance.

5.5.2.1 Strategic Congruence:

The basic aim of Standard Chartered Bank is to provide speedy customer

services. Therefore its performance management system should assess how

well its employees are serving the customers . Strategic congruence

emphasizes the need for performance management system to provide

guidance to the employees so that they can achieve the Bank’s and enable it

to remain competitive. For this purpose the system should be flexible to

adapt to changes.

5.5.2.2 Validity:

According to the employees , the appraisal procedure used to measure their

performance lacks in one aspect. This aspect relates to the deficiency

element of validity. This means that as one standardized formant is used to

evaluate performance, therefore it ignores many of the job specific aspects.

5.5.2.3 Reliability:

At Standard Chartered Bank the performance management criteria

resembles test-retest reliability. According to this the employees are

evaluated on annual basis and those employees who have somewhat similar

ratings from year to year have greater chances of getting promotion,

bonuses etc. Therefore , the Bank checks the consistency of performance of

employees in this manner and determines that which employees have the

potential to grow and better serve the customers.

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5.5.2.4 Acceptability:

Diverging opinions prevail about the acceptability of the performance

appraisal. Some employees accept them to be fair while others believe them

to be biased and predetermined. In addition to this the views regarding

fairness are perceived differently within the three category including:

1. Procedural

2. Interpersonal

3. Outcome

5.5.2.5 Specificity:

One of the major lacking in the performance appraisal method of Standard

Chartered Bank is in the area of specificity. Amongst the various levels of

employees the performance evaluation is believed not to provide specific

guidance about what is expected of them and how they can meet these

expectations.

5.5.3 Source for Performance Information:

In case of Standard Chartered Bank , managers are the only and most vital

source of performance information. They have extensive knowledge of the

job requirements and adequate opportunity to observe the way in which the

employees fulfill these requirements , thus , they are the best source to

assess and rate their employees.

5.5.4 Rater Errors:

Like all other organizations , in Standard Chartered Bank the performance

evaluation process is affected by the rater’s error. The rater error prevailing

in the bank resembles the distributional errors. In the bank the managers

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often go by their own preference while rating the employees. Therefore

there are high chances of making leniency, strictness, and central tendency

errors.

5.5.5 Top Management and Employee Perspective:

Although the performance management system at Standard Chartered Bank

has a vital role to play in assessing the potential of the employees. Yet it is

perceived to be a routine and cumbersome affair that has to be undertaken

once a year. This perception some what nullifies the true essence in the

performance management should be conducted.

5.5.6 Shortcomings of the Appraisal System:

The performance appraisal system at the Bank lacks in certain areas such

as:

1. Information regarding the employee’s performance is purely dependent

upon their managers. However , the employee are of the view that

information should also be collected from them as they are the ones who

perform are responsible for performing the various tasks.

2. Thus , a major shortcoming of the system is that the employee’s are not

involved in the appraisal process.

3. The performance appraisal system is believed not to provide any guidance

for the development of employees.

4. The employees are of the opinion that the performance appraisal should be

done on quarterly basis, instead of being conducted annually.

5.5.7 Necessary Measures:

Adopting the following measures can reduce the shortcomings of the

system:

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Employees should be involved in the appraisal process, i.e. information

should be taken from them. The process should result in effective outcomes by

telling the employees that how can they improve their performance. This would

not only benefit the Bank , but would also help the employees in their personal

development.

5.6 Compensation:

Being a leading Bank Standard Chartered Bank presents itself to its

corporate as well as individual customer as dependent upon the ability of its

sales force. These are the individuals who take an active approach in getting

the message out about the Bank’s products and services. How effectively

the sales team markets the Bank, and in turn, how successful it is, is directly

related to the sales compensation program. A sound sales compensation

package enable Standard Chartered Bank to focus sales activities towards

desired results, and rewards these outcomes with compensation tied directly

to the level of achievement.

5.7 Rewards & Recognition:

Standard Chartered Bank rewards the talented and high performing

employees competitively. They regularly conduct salary surveys to ensure

the reward package remains competitive in the market place. They

encourage continuous discussion; encourage regular review of employees

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

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1. Spot Award + Rs. 5000 as cash prize

2. Surprise Award

3. Best Performance Award

4. Service Quality Award

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Chapter 6: Recommendations

Based on the study, several recommendations have been made. These

include:

1. In order to successfully conduct the performance measurement process,

Standard Chartered Grindlays Bank should formulate effective internal and

external communication mechanism.

2. A conceptual framework understood by all levels of the bank should be

developed.

3. Accountability for results must be clearly defined and well understood.

4. Performance measurement system must provide intelligence for decision

makers rather than just compiling data.

5. Compensation , rewards and recognition should be linked to performance

measurements.

6. Performance evaluation should be positive and not punitive.

7. Employees should be specific as to what is expected from them so that they

direct their efforts towards achieving those expectations.

8. Feedback on the evaluation should be provided to the employees so that

they can improve their performance.

9. Lastly, performance measurement systems should not be seen as an end ,

but a beginning.

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