Meezan Bank Ltd. Human Resource Management


EXECUTIVE SUMMARY

This report portrays an effort to explore the relationship between an organization’s design and structure and the nature of training and development programs of the organizations. This report helps in the understanding of how the structure of an organization affects the development of its employees and vice versa. For the purpose of this example of a real life organization i.e. Meezan Bank, has been taken and its HR activities regarding organizational design and training and development have been thoroughly observed.

The first part of the report gives a clear picture of and analyses the organizational design of Meezan Bank which is a fine blend of the selected features of the culture and structure of Meezan Bank. This organizational design assists in the definition and achievements of the goals for managers.

In the second part, the training and development programs, techniques and strategies of Meezan Bank have been investigated which shows that the training methods and tools used by them are very much relevant and in alignment with the departmental hierarchy and structure. It also identifies the extent to which these training efforts are spread departmentwise.

In conclusion, the Bank has been given some suggestions and recommendations as to how the relationship between the organizational design and skills development can be exploited to facilitate the goals and objectives that have been set for organizational effectiveness and efficiency.

ABOUT MEEZAN BANK LTD.

Meezan Bank Limited is a publicly listed company, first incorporated on January 27, 1997. It started operations as an investment bank in August of the same year. In January, 2002 in an historic initiative, Meezan Bank was granted the Nations first full-fledged commercial banking license dedicated to Islamic Banking, by the State Bank of Pakistan.

Meezan Bank, stands today at a noteworthy point along the evolution of Islamic Banking in Pakistan. The banking sector is showing a significant paradigm shift away from traditional means of business, and is catering to an increasingly astute and demanding financial consumer who is also becoming keenly aware of Islamic Banking. Meezan Bank bears the critical responsibility of leading the way forward in establishing a stable and dynamic Islamic Banking system replete with dynamic and cutting-edge products and services.

Vision

Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind.

Mission

To be a premier Islamic bank, offering a one-stop shop for innovative value added products and services to our customers within the bounds of Shariah, while optimizing the stakeholders value through an organizational culture based on learning, fairness, respect for individual enterprise and performance.

Service Mission

To develop a committed service culture which ensures the consistent delivery of our products and services within the highest quality service parameters, promoting Islamic values and ensuring recognition and a quality banking experience to our customers.

Meezan Bank has made fundamental and significant progress forward, and in doing so has established a strong and credible management team comprised of experienced professionals, which have achieved a strong balance sheet with excellent operating profitability, including a capital adequacy ratio that places the Bank at the top of the industry, a long-term entity rating of A+, and a short-term entity rating of A1.

The Banks main shareholders are leading local and international financial institutions, including ‘Pak-Kuwait Investment Company’, the only AAA rated financial entity in the country, the ‘Islamic Development Bank of Jeddah’, and the renowned ‘Shamil Bank of Bahrain’. The established position, reputation, strength and stability, of these institutions add significant value to the Bank through Board representation and applied synergies.

Meezan Bank believes in adding value to its customers’ lives and businesses, through dynamic and competitive products and services that fulfill their needs while conforming completely to the dictates of Shariah. At the same time, Meezan Bank endeavors to deliver competitive risk adjusted returns to its stakeholders.

ORGANIZATIONAL STRUCTURE

THE TOP MANAGEMENT HIERARCHY

Ownership

Shareholders

Trusteeship

Board of directors

Shari’ah supervisory board

Board audit committee

Corporate Management

President & CEO

COO

General Manager corporate & business development

General Manager commercial banking & SME

Divisional Management

Head of Operations

Head of legal affairs

Head of I.T

Head of Marketing

Etc

Functional Management

Marketing Manager (These designations & names not mentioned in organogram)

Human Resource Manager (These designations & names not mentioned in organogram)

Etc

ORGANIZATIONAL CULTURE

TERMINAL VALUES

§ Optimizing the stakeholders value

§ Offering a one-stop shop for innovative value added products and service

Instrumental Values:

§ Shariah compliant

§ Integrity

§ Professionalism

§ Service Excellence

§ Social Responsibility

§ Learning

§ Fairness

§ respect for individual enterprise and performance

Characteristics Of The Employees Of Meezan Bank

The Bank expects its employees to be:

§ Sober.

§ Truthful.

§ Committed to excellence

§ Empathetic.

§ Professional.

§ Extremely loyal.

§ Dependable friend.

§ Trustworthy business partner.

§ Committed to the cause of Islamic banking.

Discipline

Punctuality in working timings / hours and appointments, proper and presentable dress, positive and cooperative behavior towards colleagues, juniors, superiors and customers and the maintenance of discipline are the obligations of every employee of the Bank.

Attire is a reflection of professionalism as well as that of the Bank. A professional business appearance together with a high standard of personal hygiene is expected from all employees.

ORGANIZATIONAL DESIGN

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Meezan bank’s managers would now choose and administer various aspects, dimensions, and components of its structure and culture, which in turn would enable it to control the activities necessary to achieve its goals.

The banking industry in Pakistan has always been a thriving one, and has been booming during the last 8 yrs even more. There have been a few economic ups and downs, yet it’s growing at a fast pace. There have been quite a few mergers and acquisitions going on, larger banks eating up the smaller banks. In such a competitive environment, Meezan bank has got to strike a balance between the external pressures from its environment and internal pressures as well. Attaining this proper balance can ensure Meezan bank a survival in the long run along with glory.

The organizational structure of Meezan Bank, in the form of the hierarchy and organizational culture consisting of the shared values and norm mentioned above, are nothing but the means, which Meezan bank is supposed to use for achieving its goals.

KEY COMPONENTS OF TRAINING & DEVELOPMENT FRAMEWORK AT MEEZAN BANK LTD.

The Framework outlines the basic platform for training and development. It is based on following key areas.

1. Process

Needs Analysis And Planning Activity

Identification of training & development needs;

§ Competency Profiling (Job Competency & Personal Competency Profiling), the main analytical tool.

§ PDPs, the core planning mechanism.

§ Contribution which training & development makes business success.

clip_image005The Assessment Of Development Needs

The Training & Development needs for an individual are assessed through the use of competency profiling.

Competency profiling is a tool of describing an area of knowledge, skill, or ability. This would help in matching and placing the right person on the right job. This provides a basis for planning personal development in a focused way. It can be applied in two ways:

§ The skills and knowledge required for performing a job to a given standard. This results in the creation of a Job Competency Profile.

§ The skills and knowledge of an individual. These can be captured in a Personal Competency Profile.

Comparison of an individual’s Personal Competency Profile with the Job Competency Profile for his/her existing position identifies current development needs. Comparison with a Job Competency Profile for a potential future highlights areas for long-term development activity.

Competencies are divided into two broad categories, which are referred to Core and Specific e.g., few training courses are given below (other courses may be added as per the requirements).

Specific

Specific to department/area

§ Strategic Perspective

§ General Management

§ Contingency Planning

§ Time Management

§ Compliance

§ Team Management

§ Change Agent

§ Regulations

§ Customer Focus

§ Information System Management

§ Achieving Results with People

§ Decision Making

§ Building Networks and Relationships

§ Leadership in Management

§ Islamic Banking

§ Product Knowledge

§ Banking Laws &

§ Regulatory /

§ Risk Management

§ Prudential

Personal Development Planning (PDP)

Personal Development Planning (PDP) is a tool by which skills and learning needs are transformed into development solutions. This helps Meezan bank in improving performance of employees in their current roles and progress in their careers in the Bank. Each employee’s plan is agreed in discussion with his/her Department Head then monitors progress against the plan. It is made sure that the plan is:

§ Simple.

§ Managed and owned by the individual.

§ Focused priority.

§ Ensures an objective approach towards assessing development needs.

§ Designed to encourage continuous development.

Performance Planning & Assessment

Performance Planning and Assessment is the appraisal process that helps to translate business goals into individual objectives. Progress against objectives is monitored and the final result is evaluated. This provides the basis for measuring and recognizing achievements in order to link performance with reward. It should be:

§ Discussed and agreed.

§ Open, fair and explainable.

§ Joint ownership between the individual and the Department Head.

§ Focused and assessed against objectives, as well as overall contribution in the job as a whole.

§ Linked to performance reward and bonus.

2. Standards of Excellence

Competencies

The success of Meezan bank is dependent on the employees, striving to achieve standards of excellence in their jobs. Competencies can play an important role in this process by helping individuals to define the job standards, which will help the employees in achieving the quality results.

3. Learning Mechanism

Learning mechanisms permits both traditional and more innovative methods. These include:

Flexible Learning

Flexible Learning – describes activities other than formal training. Flexible Learning is usually focused on ‘learning by doing’ or self-initiated study.

Examples are:

§ On the job training / coaching.

§ Mentoring.

§ Reading and research.

§ Expert briefing.

§ Team-based activities.

§ Project assignments.

§ Job swaps.

Head of Human Resources works with Department Heads to explore how these opportunities can be maximized.

Management Development Program primarily develops employees in the core competencies. Different jobs / positions throughout the Bank require different levels and combinations of core competency, although some ability in all these areas is needed, regardless of an individual’s role.

Management Development program are designed and coordinated by the Human Resources Division.

Business Training addresses the development of the specific competencies, which vary between the departments.

Examples of Business Training are:

§ Islamic Banking;

§ Product knowledge;

§ Asset / Liability Management;

§ Marketing and selling skills;

§ Credit Management;

§ Negotiation skills;

§ Risk Management;

§ Customer Service Standards;

§ Assets / Liability Management;

§ Telephone Calls Handling;

§ Financial Management;

§ Cash Management.

The Head of Human Resources will work with department heads to design the Business Trainings. The Department Heads shall conduct these trainings.

Distance Learning

Distance learning, through the provision of books, computers, videos, tapes, etc. from a training library / institutes.

Head of Human Resources plans to develop a proper library with the input of the Department Heads. A budget is expected be allocated to encourage learning and growth.

Career Planning

Training & Development is viewed as a mean of enhancing the knowledge and skills in order to progress in careers. Employees who want to take greater personal responsibilities for their career, they are provided more help and guidance by the Bank. Career planning is a key priority within the Training & Development Framework.

WHOM TO TRAIN?

The Individual

§ Must have motivation to succeed;

§ Must have willingness to learn and grow;

§ Must have commitment & willingness to take more personal responsibilities;

§ Must be committed towards Islamic Banking;

§ Must have right attitude towards learning and grooming;

§ Must take training and development activities seriously;

§ Must give proper feedback on Training & Development activities for improvements.

THE ROLE WHICH RESPECTIVE DEPARTMENT HEADS AT MEEZAN BANK PLAY IN THE TRAINING AND DEVELOPMENT PROCESS:

§ Supports and develops their team members.

§ works with their team members to identifies training & development needs;

§ Creates and facilitates learning opportunities;

§ Makes the effective use of Training & Development Activity Plan (Annual Training Calendar).

§ Prioritizes the identified training & development needs and measures for assessing the contribution towards success.

§ Identifies / recommends the training needs of their team members during the Performance Appraisal exercise. However, a special need arising in between is communicated at any time to the Human Resources Division;

§ Conducts training programs as designed.

§ Is required to commit a minimum of 20 hours of formal training per annum.

THE ROLE OF HEAD OF HUMAN RESOURCES OF MEEZAN BANK IN TRAINING AND DEVELOPMENT PROCESS:

§ provides support & guidance to department heads in designing, delivering

§ Internal or external sourcing of training & development solutions.

§ Receives employee’s training recommendation with the endorsement of Departmental Head; matches it with PDP and make recommendations to COO/CEO approval. The outcome is communicated to the Department Head.

§ finalizes Training Activity Plan (Annual Training Calendar) with the mutual concern of the department heads;

§ ensures the proper implementation and administration of the training process during the year;

§ identifies the needs for in-house training program and training conducted by outside trainers, and reviews them with the respective departmental heads before finalizing it;

§ designs in-house training / course with the input of the department heads;

§ Ensures proper linkage between Practice and Theory (a mix of internal and external resource persons may be blended to conduct training programs).

RELEVANCE OF TRAINING & DEVELOPMENT AT MEEZAN BANK WITH THE ORGANIZATIONAL GOALS & OBJECTIVES

At Meezan Bank, Training & Development is the cornerstone of the business strategy. They consider it imperative if they are to meet the challenges of an increasingly competitive business environment. It is also a critical factor in the future success of the bank with the advent of new Islamic banks coming into the banking sector as a result of which there will be an increasing threat of losing key staff to new competitors.

The Bank provides Training & Development opportunities, which are:

§ Timely and relevant from an individual’s perspective;

§ Firmly linked to both today’s business needs and the long-term business plans.

Training & Development is a core management activity at Meezan bank. It is no longer an option, but a key to competitive advantage. Meezan Bank’s Training & Development policy outlines the commitment to enabling its employees to realize their full potential and improve the Bank’s performance through developing and motivating them.

Six Result Areas:

§ Training Driven by Business Needs.

§ Cost Effectiveness.

§ Quality Service for achieving excellence.

§ Integration and Consistency.

§ Evaluation of Output.

§ Ownership of Training with the Management.

ANALYSIS OF TRAINING AND DEVELOPMENT AT MEEZAN BANK LTD.

Meezan Bank can consider its activities for Training & Development effectively only when its employees are:

§ Using new skills and abilities which results in improved business performance;

§ Progressing based on merit, as a result of acquiring new skills and abilities;

§ Taking more personal control of the way in which their career progresses;

§ Experiencing greater motivation and job satisfaction as a result of new learning;

§ Enjoying effective partnership with team colleagues;

§ Delighting customers and contributing to overall performance of the Bank. clip_image006


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