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

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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.

4
 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 19th 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 to take

6
 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
Bank opened in Bangladesh and during 1957 it acquired the Eastern Bank.

7
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.

11
 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.

3.3.2.1.1The 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

15
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.

16
 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

19
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).

20
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.

4.2.10Learning 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.

21
 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

23
 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.

24
 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:

4.11.1Labor 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

4.11.2Job 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.

4.11.3Psychological 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

26
 4. Autonomy
5. Feedback

4.11.4Self-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

4.11.6Ergonomics:
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.

4.12.1Components 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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4.12.2Approach 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:

4.13.1Individual 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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4.13.2Linking 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
Program; where in the region of 150 graduates are recruited each year on a

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 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.

5.5.2 Performance Measurement Criteria:

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 Once the Bank has determined what kind of performance it expects from
the employees, it needs to develop appropriate ways to measure that
performance.

5.5.2.1Strategic 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.

5.5.2.2Validity:
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.

5.5.2.3Reliability:
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

5.5.2.5Specificity:
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
often go by their own preference while rating the employees. Therefore

35
 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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