HBL - Implementation of Broadbanding
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Transcript of HBL - Implementation of Broadbanding
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Implementation of Broad Banding
at HBL
S
H
R
D
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Adnan ur Rehman 082103
Muhammad Ali 0921117 | Rajesh Kumar 1021132
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SHRD
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 inpermanent 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 HBLs 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 employeesblamed 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 specializedknowledge 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 StatementSatisfaction
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-motivation
PerformanceManagement
JobInsecurity
Contract v/sRegular
Employees
Employee De-motivation
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Figures in Million Annualized Median
Current
Grades
Cash
Benefit
Petrol Car
Ben.
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 employeeson
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
payrollIntroduce 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
Internal alignment between regular and contractual
employees
A flatter structure will:
Enhance cross-mobility in career
Reduce levels of administration
Improve decision making and quicker response
time
Facilitate attraction and retention of qualityresources
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 to
Their salary/levelshort termJob evaluationmid to long term
The gap in similar level jobs will be adjusted in phases
Individuals 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 FEATURES
OF
BROAD
BANDING
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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 Grades 1A 1B 2A 2B
Officer Grade I Manager1905 52 0 0
Officer Grade IIAssistant
Manager
0 0 2726 0
Officer Grade III 3728 159 0 0
CO/JO Officers200 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
RegularEmployees
ContractEmployees
OneEmployment
System
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ONE BANK |ONE TEAM |TEAM HBL
IMPLEMENTATION STRATEGY
Communication/town hall meetings
Five 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
Morale & Motivation
Pride in old titles
Horizontal promotions
Negative perception bybenefit alignment
Senior levels in mergedbands may get a sense ofdemotion
Communication
Roll out and selling theconcept acrossorganization
Managing negativefeedback
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Analysis of Driving & Restraining Forces:
UrgentJob
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.
Employees 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
bandingimplementation 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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Any Questions?