Implementation of Broad Banding at HBL
S
H
R
D
Being
Being
Prese
nted By:
Prese
nted By:
Adnan ur Rehman 082103Adnan ur Rehman 082103
Muhammad Ali 0921117 | Rajesh Kumar 1021132Muhammad Ali 0921117 | Rajesh Kumar 1021132
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BROAD BANDING AT HABIB BANK LIMITED
With banking sector reforms 1997, a large number of employees were retrenched under Golden handshake Scheme, as a consequence a ‘skill gap’ was created in the bank.
In order to fill this ‘skill gap’ and due to ban on hiring in permanent cadre executives from international banks were inducted on three years contract at HBL to steer the process of transformation.
A visible disparity in salary packages emerged due to the market-based compensation of new hiring as against HBL’s conventional pay levels.
The persisting anomaly in compensation caused great de-motivation in HBL regular employees.
Conversely due to the three years tenure, the contract employees also lacked a long-term commitment to the Bank
BACKGROUND
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BROAD BANDING AT HABIB BANK LIMITED
With the passage of time the contractual employees increased in number.
The animosity and feeling of disgust amongst regular and contractual employees increased and the permanent employees blamed management of injustice and favoritism due to salary differentiation.
The regular promotions from officer into executive cadre after every 3 to 4 years also was making the organization ‘top heavy’. The rankers were more general bankers with little specialized knowledge and were not equipped with modern day banking concepts.
The management wanted a more flatter organization and wanted a more diligent linkage between job responsibility and compensation.
BACKGROUND
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BROAD BANDING AT HABIB BANK LIMITED
Conflicting institutional priorities
Institutional challenges
Cultural challenges
Management challenges
Major financial sector threat
BACKGROUND
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S.No Statement Satisfaction Level
1 Discrimination in the workplace 2.35
2 Clear job descriptions 2.48
3 Support for performance of job 2.48
4 Recognize for good work 2.48
5 Environment that fosters Trust 2.5
6Training and Development
Programs2.55
7 Physical working conditions 2.55
8 HR Group efforts 2.6
9 Work environment 2.61
10 My workload is manageable 2.64
Regular v/s Contract Employees
EMPLOYEE CLIMATE SURVEY 2007 KEY ISSUES
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Town Hall HR Issues
Employee De-motivationEmployee De-motivation
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EMPLOYEMENT TYPES
GRADES / LEVELS Regular Contract Total
Senior Executive Vice President 0 11 11
Executive Vice President 17 29 46
Senior Vice President 78 45 123
Vice President 232 63 295
Assistant Vice President 746 61 807
TOTAL 1,073 209 1,282
Regular Vs Contractual Executives
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Figures in Million – Annualized Median
Current Grades
CashBenefit
Petrol CarBen.
Driver Guar.Bonus
Medical Reimb.
End of Service
Total Comp.
SEVP (C)
EVP (C) 3.73 0.32 0.48 0.07 0 0.41 0.35 5.36
EVP (R) 1.50 0.32 0.89 0.07 0.12 0.04 0.09 3.03
SVP (C) 2.22 0.19 0.41 0.06 0 0.24 0.20 3.32
SVP (R) 1.13 0.19 0.41 0 0.09 0.03 0.07 1.92
VP (C) 1.37 0.15 0.28 0 0 0.15 0.13 2.08
VP (R) 0.85 0.15 0.08 0 0.07 0.02 0.07 1.24
AVP (C) 0.89 0.12 0.07 0 0 0.10 0.08 1.26
AVP (R) 0.63 0.12 0.07 0 0.05 0.02 0.04 0.93
*Loan benefit and club membership is not covered
Calculation of Total Guaranteed Pay (Executives)
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Current Regular/Contractual Ratio
98%
2%
Regular
Contract
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ANALYSIS & KEY FINDINGS
The two-tier compensation issue is mostly a perception issue
The data indicates that:
There are only 209 employees on contractual package which is just 16% of the executive cadre
The gap to catch up with contractual package varies from 43% to 26% which is not as wide as general perception
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IDENTIFIED REMEDY:
Introduce a One-Tier Compensation for the entire Bank by converting all contractual employees on regular payroll
Introduce salary bands at each level to factor the salary variance
Revise salary ranges to broader scale linking pay with competencies/performance aligning pay with market
Alignment of benefits on a consistent basis
Faster adjustments in case of critical resources
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IMPLEMENTATION OF BROAD BANDING
PROPOSING ONE TIER
COMPENSATION STRUCTURE
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TOTAL PAY CONCEPT
Overall Equal
Benefit
Elimination of the concept of
Two Tier
Communicating it to the employees
Defining Salary
Structure / Levels
Benefit Monetization
Emphasis on Variable
Pay
STEPS TOWARDS IMPLEMENTATION
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BROAD BANDING AT HABIB BANK LIMITED
NEW TITLES UNDER
BROAD BANDING…………
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BROAD BANDING AT HABIB BANK LIMITED
Melding of job clusters or tiers of positions into relatively wide bands of pay ranges for the express purpose of gaining flexibility in managing career growth and administering base pay. (O’Niel, 1993)
Broad banding involves the collapsing of several salary grades into a few broad "bands" with significantly larger pay ranges (Milkovich & Newman, 2002).
“Pay tends to be market driven in broad-banded pay systems with more emphasis upon internal equity in traditional pay systems” (Gilbert Fd Abosch, 1996)
WHAT IS ‘BROAD
BANDING???’
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BROAD BANDING AT HABIB BANK LIMITED
Internal alignment between regular and contractual employees
A flatter structure will:Enhance cross-mobility in careerReduce levels of administrationImprove decision making and quicker response timeFacilitate attraction and retention of quality resources
Improved Efficiency Simpler salary administration process Faster grade placement decisions
WHY‘BROAD
BANDING’ ?
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BROAD BANDING AT HABIB BANK LIMITED
Reducing job levels from 9 to 7 by merging grades
Employees will be assigned to one of the bands according toTheir salary/level – short termJob evaluation – mid to long termThe gap in similar level jobs will be adjusted in phasesIndividuals will move horizontally and vertically based on job enrichment
Pay bands will support pay for performance and flexible hiring
Salary adjustments at the time of annual increase / renewal of contract
Rationalized titles structure
KEY FEATURESOF
‘BROAD BANDING’
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Level Alignment/New Titles (Executives)
President / CEO
SEVP
EVP
SVP
VP
AVP
SVP
VP
VP
Group Executive
AVP
General Manager
Deputy General Manager
Senior Manager
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Level Alignment/New Titles (Officers)
OG-I
OG-II
OG-III
CO/JO
OG-II
OG-IIIOG-III
CO/JO
Manager
Assistant Manager
Officer
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Population Distribution (Executives)
HBL Broadband Pay System
Pay Band 1 Pay Band 2
Current GradeRecommended
Grades1A 1B 2A 2B
SEVP (C) Group Executive 15*
EVP (C)General Manager
11 15 0 0
EVP (R) 16 0 0 0
SVP (C)
Deputy General Manager
0 0 45 0
SVP (R) 0 0 78 0
VP (C) 33 30 0 0
VP (R) 230 2 0 0
AVP (C)Senior Manager
4 57 0 0
AVP (R) 449 297 0 0
Grand Total 1,282
*including 4 EVPs working as group heads
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Population Distribution (Officers)
HBL Broadband Pay System
Pay Band 1 Pay Band 2
Current GradeRecommende
d Grades1A 1B 2A 2B
Officer Grade I Manager 1905 52 0 0
Officer Grade IIAssistant Manager
0 0 2726 0
Officer Grade III 3728 159 0 0
CO/JO Officers 200 58 0 0
Grand Total 8,828
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BROAD BANDING AT HABIB BANK LIMITED
MOVING TO ONE SYSTEM
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Towards One System
OneEmployment
System
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ONE BANK | ONE TEAM | TEAM HBL
IMPLEMENTATION STRATEGY
Communication/town hall meetingsFive back to back sessions covering over 2,000 employees
Senior management at Head Quarter Karachi Islamabad Lahore Multan
Highly interactive communication sessions at all locations
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HBL Organization Restructuring
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Broad Banding
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Key Features
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Implementation Challenges Anticipated
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Analysis of Driving & Restraining Forces:
Urgent Job
Evaluation
CommunicateAnd
Education
CommunicateAnd
Education
ImplementNew
Policy
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THE FINAL WORD:
The Broad banding despite its serious implications with regard to an individuals career path was successfully implemented by the managements ingenuity.
The communication strategy was cleverly planned out to exclude the negative implications of the strategy. Majority of the officers and executives failed to understand that the career ladder has been made long.
Employee’s concern regarding their placement in the appropriate band based on proper job evaluation is still due which may deteriorate the effects of the entire ‘Broad banding’ implementation initiative.
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BECOME A STUDENT OF CHANGE. IT IS THE ONLY THING THAT REMAINS CONSTANT
(Anthony J.D’ Angelo)
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