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8/7/2019 Abstract hbl
This paper examines the impact of HR practices on employee performance in Habib Bank Limited.
The reason we investigated the impact of HR practices (Compensation Practices, Promotion Practices and Performance Evaluation
Practices) in Habib Bank Limited in order to evaluate the performance of their employees.
A number of researchers have established the relationship between HR practices and employee performance but they mainly
discussed developed countries. Little evidence is available about relationship between HR practices and employee performance from
developing countries like Pakistan. This study examine the relationship between three HR practices i.e. compensation, promotion
and performance evaluation and perceived employee performance among HBL Pakistan. The result of the study indicates a positive
relationship between compensation and promotion practices and employee perceived performance while performance evaluation
practices are not significantly correlated with perceived employee performance. HBL need to revise Performance Evaluation process
and define clear career paths to enhance the performance of employees. Subjectivity overruling objectivity and performance
quantification technique lacks in HBL.
Habib Bank Limited commonly referred to as "HBL" and head-quartered in Habib Bank Plaza, Karachi,Pakistan, is the largest
bank in Pakistan. The bank has a network of over 1450 branches in Pakistan and 55 branches worldwide. It has a domestic market
share of over 40%. It continues to dominate the commercial banking sector with a major market share in inward foreign remittances
(55%) and loans to smallindustries, traders and farmers. Overseas, it has operations in the following countries:
y Afghanistan, Australia, Bahrain, Bangladesh, Belgium, Canada, China, France, HongKong, Iran,Kenya, Lebanon, Maldives, Nepal, Netherlands, Nigeria, Oman, Singapore, Sri
Lanka, Tanzania,Turkey, UAE, UK& USA.
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the emerging markets,
providing our customers with a premium set of innovative products and services, and granting superior value to our stakeholders
shareholders, customers and employees.
Habib Bank offers the basic range of banking services to its customers, to include Commercial, Corporate, Investment, and Retail
Banking, Treasury, and Islamic Banking.
Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of financial intermediation while he was campaigning
for the creation of a separate homeland for the Muslims of India. He persuaded the Habib family to establish a commercial bank that
could serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in 1941, with HO
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in Bombay(nowMumbai), and fixed capital of 25,000 rupees. The bank played an important role in mobilizing funds from the
Muslim community to finance the All-India Muslim League's campaign for the establishment of Pakistan. Habib Bank also
played an important role in channeling relief funds to the people hurt in the communal riots and violence that preceded the
departure of the British from India.
After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General Jinnah, moved its headquarters to Karachi,
Pakistan's first capital. This gave Karachi its first commercial bank of the newly formed Islamic Republic of Pakistan. The Habib
family owned and managed the bank until the Pakistan government nationalized it on 01 January 1974.
y 1951 HBL opened the first of 3 branches in Sri Lanka.y 1952 HBL established Habib Bank (Overseas).y 1956 HBL opened first of 5 branches in Kenya.y 1957 or 1958 HBL opened a branch in Aden.y 1961 HBL opened the first of what would become 6 branches in the UK.y 1964 HBL opened the first of 4 branches in Mauritius and a branch in Beirut.y 1966 HBL opened the first of 8 branches in the UAE.y 1969 HBL opened first of 3 branches and an OBU in Bahrain. However, HBs branch in Aden is nationalized.y 1971 HBL opened an OBU in Singapore and a branch in New York.y 1972 HBL opened the first of 11 branches in Oman. HBL constructed Habib Bank Plaza in Karachi to commemorate the
banks 25th Anniversary.
y 1974 The government of Pakistan nationalized HBL and HBL merged with Habib Bank (Overseas).y 1975 HBL opened a branch in Belgium. HBL also merged with Standard Bank, a Pakistani bank.y 1976 HBL opened a branch in the Seychelles, the first of two branches in Bangladesh, and a branch in the Maldives.y 1979 HBL opened a branch in the Netherlands.y 1980 HBL opened a branch in Paris and another in Hong Kong.y 1981 HBL established Nigeria Habib Bank with 40% ownership. HBL also opened a representative office in Teheran.y 1982 HBL opened a branch in Khartoum.y 1983 HBL opened branch in the Karachi EPZ and a branch in Istanbul.y 1984 HBL established Habib American Bank in New York with a branch each in Manhattan andQueens, and a US
International Banking Facility. HBL also opened a branch in California.
y 1987 HBL opened in Australia.y 1991 The Habib Group established a separate private bank, the Bank AL Habib, after private banking was re-established in
Pakistan. HBL opened a branch in the Fiji Islands, and took over the Paksistani branches of failed bank, BCCI.
y 1992 In Nepal HBL acquired 20% of Himalayan Bank.y 1995 HBL established a representative office in Cairo.
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y 1990s HBL established Habib Finance (Australia), and Habib Finance International Limited, Hong Kong.y 2000 HBL established Habib Canadian Bank.y 2002 On June 13, 2002 Pakistan's Privatization Commission announced that the Government of Pakistan had granted
the Aga Khan Fund for Economic Development (AKFED), a subsidiary of theAga Khan Development Network, rights to
51% of the shareholding in HBL, against an investment ofPKR22.409 billion (USD 389 million).
y HBL's UK operation came close to being shut down due to regulatory issues with the Financial Services Authority. Theissue was resolved by converting the operations to a subsidiary. Then Habib Bank Limited and Allied Bankof Pakistan
merged their operations (Habib contributed its 6 branches and Allied its 4), into a new bank, called Habib-Allied
International Bank, in which Habib Bank has a 90.5 percent shareholding, while Allied Bank has 9.5 percent.
Simultaneously with the transfer of business to the new bank, both Allied and Habib Bank close down all independent
operations in the UK.
y 2003 HBL received permission to open a branch in Afghanistan.y 2004 On February 26, the Government of Pakistan handed over management control of Habib Bank to AKFED. The
Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and
three Government of Pakistan nominees.
y 2006 HBL sold the operations that it had established in Fiji in 1991 to Bank of South Pacific.y 2009 HBL was granted permission to open Remnibi accounts in China. It already has training and shareholding
arrangements with Urumqi Commercial Bank.
Habib bank has long been scrutinized by intelligence officials monitoring terrorist money flows.
On July 18, 2007, Mariane Pearl, the widow ofWall Street Journal reporter Daniel Pearl, filed a lawsuit against Habib Bank Ltd over
the 2002 abduction, torture and murder of her husband. The pending lawsuit alleges the bank and its subsidiaries knowingly
conducted financial transactions and provided account services on behalf of Al Akhtar Trust, a Pakistani based charity trust. Al
Akhtar Trusts accounts have been used to provide financial support to terrorists. However, HBL claims to have frozen Al Akhtar
Trusts accounts several years before Daniel Pearls abduction.
On October 24, 2007, Pearl's lawsuit against HBL was formally dropped. Lawyers for Mariane Pearl noted that Habib Bank Limited
and the other defendants in the case had not answered the lawsuit filed in July (although Habib Bank Limited had denied ever
supporting terrorism), but they otherwise did not explain their reason for dropping the action.[
The U.S. Federal Reserve Board and the New York State Banking Department criticized Habib Bank Limited for failing to address
deficiencies in its compliance with U.S. anti-
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money laundering laws. After the U.S. Federal Reserve Board threatened formal charges, though none were filed, Habib Bank
Limited agreed to strengthen the banks compliance. More specifically, the Fed ordered HBL to strengthen its transaction monitoring
systems and the filing of "suspicious activity reports" on transactions that do not fit the routine business patterns of the bank's
Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation
may achieve several purposes assisting in recruitment, job performance, and job satisfaction.
Compensation is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be
adjusted according the business needs, goals, and available resources.
Compensation may be used to:
y Recruit and retain qualified employees.y Increase or maintain morale/satisfaction.y Reward and encourage peak performance.y Achieve internal and external equity.y Reduce