RECRUITMENT & SELECTION PROCESS OF NATIONAL BANK OF PAKISTAN

C OMPARISON TO BENCHMARK

A CKNOWLEDGEMENT

December 14, 2009

We are thankful to Allah Almighty for giving us the capability and strength to complete this Term report which analyzes the practices followed by National Bank of Pakistan regarding Recruitment and Selection Process and its comparison with that of Bank Alfalah Limited.

We would also like to thank our course instructor Ms. Amna Yusaf whose utmost dedication and devotion provided us with the insight to analyze the practices regarding Human Resource. It was her guidance and teachings that enabled us to finish this term report.

We would also like to give our heartiest thanks for the cooperation and help provided by Ms. Maria Khan, Assistant HR Manager, and NBP.

Sincerely,

Najah Saeed (7037) Dileep Kumar Maheshwari (7633) Rahil Murad Ali (7740) Afifa Zehra (7130) Sidra Gul (7733)

L ETTER
Mrs. Amna Yusaf Course Instructor Institute of Business Management Korangi Road Karachi

OF

T RANSMITTAL
December 5, 2011

Dear Mrs. Yusaf, Here is our term report on of course Human Resourse Managent, which is to be submitted on December 14, 2009. The report analyzes the practices followed by National Bank of Pakistan regarding Recruitment and Selection Process and its comparison with Bank Alfalahs Policies.

We greatly benefited from this report as our term report on Human Resource Management. It really helped widening our vision, improving our quality of work, building self-reliance and gave a vital experience in order to improve our analytical skills. We hope it is up to your expectations and fulfils all the requirements given by you.

Sincerely, Najah Saeed (7037) Dileep Kumar Maheshwari (7633) Rahil Murad Ali (7740) Afifa Zehra (7130) Sidra Gul (7733)

Table of Contents
Table of Contents....................................................................................................... 5 EXECUTIVE SUMMARY.................................................................................................1 BANK ALFALAH LIMITED..............................................................................................2 HISTORY:.................................................................................................................2 VISION..................................................................................................................... 2 MISSION..................................................................................................................2 CREDIT RATING....................................................................................................... 2 INTRODUCTION...........................................................................................................3 NBP- The Nations Bank..........................................................................................3 MISSION...................................................................................................................3 HR MISSION.............................................................................................................4 VALUES ...................................................................................................................4 HR PRACTICES......................................................................................................... 4 THE RECRUITMENT AND SELECTION PROCESS AT NBP:..............................................5 HOW TO DETERMINE NEED OF RECRUITMENT:........................................................5 HOW LARGE IS THE POOL OF APPLICANTS:.............................................................5 SOURCES EMPLOYED FOR RECRUITMENT:...............................................................6 THE SELECTION PROCESS:......................................................................................6 SWOT ANALYSIS:........................................................................................................8 ISSUES IN THE RECRUITMENT AND SELCTION PROCESS OF NBP:...............................8 QUOTA SYSTEM:......................................................................................................8 Comparison with Bank Alfalah Limited (BAL):..........................................................9 Comparison with BAL:.................................................................................................9 OTHER POINTS OF COMPARISON:.............................................................................10

RECOMMENDATIONS:...............................................................................................11

EXECUTIVE SUMMARY

The report begins with a brief introduction of Bank alfalah Limited about its history, vision, mission and credit ratings and why it is nominated in survey of top ten best employers in Pakistan.

Further, it provides the introduction of National Bank of Pakistan and a brief overview of Human resource Department at NBP i.e. its HR mission, Values and its practices. After that our main topic of the project starts which is the RECRUITEMENT AND SELECTION PROCESS at National Bank of Pakistan. It provides how they determine the need of the recruitment of applicant?, how large is the pool of applicant?, different sources used for the recruitment of applicant? When it proceeds with Selection Process and SWOT analysis.

Next, the report focuses on issues of recruitment and selection process at National Bank of Pakistan just as Quota system, manual work, Government/political pressures than report makes a comparison between its policies to the policies at Bank Alfalah Limited.

In the end Report concludes with the suggestions and recommendations to the National Bank for their recruitment and selection process.

BANK ALFALAH LIMITED

HISTORY: Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st ,1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 195 branches in 74 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years, we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today. VISION To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof. MISSION To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank. CREDIT RATING PACRA, a premier rating agency of the country, has rated the bank AA (double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low expectation of credit risk. The ratings of first and second and third unsecured listed and 2

subordinated TFC issues of PKR 650 million, PKR 1,250 million and Rs.1,325 million have been maintained at AA- (Double A minus).

NATIONAL BANK OF PAKISTAN

INTRODUCTION NBP- The Nations Bank National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its balance sheet size surpasses that of any of the other banks functioning locally. It has redefined its role and has moved from a public sector organization into a modern commercial bank. The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen. NBP maintains its position as Pakistan's Premier Bank with a network of over 1200 branches locally, 18 overseas branches, 1 Subsidiary at Almaty (Kazakhstan) and 11 Representative Offices all over the world, The Bank has employed more than 15,000 people worldwide. The various departments include: Consumer Banking Corporate Finance Investment Banking Agricultural Banking Transactional Banking Operations Software Development and Automation Financial Control Treasury Internal Audit Risk Management & Credit Economic & Business research Training & Development Strategic Planning Human Resources MISSION NBP will aspire to the values that make NBP truly the Nations Bank, by: Institutionalizing a merit and performance culture Creating a distinctive brand identity by providing the highest standards of services Adopting the best international management practices Maximizing stakeholders value

 Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate.

HUMAN RESOURCES AT NBP: NBP is the employer of choice. The whole NBP family comprises of committed and dedicated members with passion to serve in their respective functional areas. The Bank has challenging work environment where merit and performance help the individuals to explore their true potential. As a caring employer the Bank enables the employees to excel and grow in highly congenial employment conditions and culture. The career path is full of challenges and opportunities. The Bank has absolutely open culture where members share and communicate freely. HR MISSION Provide more talented Human Resource in all NBP functional areas in relation to competition keep motivated all the employees and maintain total industrial harmony. VALUES NBP believes that;

People make the organization People collectively yield results People have ambitions and aspirations to be distinguished and rewarded People form the human capital to be developed and invested in.

HR PRACTICES JOB ANALYSIS It is the primary function in HR, which you undertake. It is the analysis of the tasks activities involved, time taken to perform the tasks, importance of the tasks, responsibility associated with the task, conditions under which it is performed, expertise required, equipments to be used, etc. This would help the HRM, to determine: a)Job Description b)Job Specification. Recruitment Selection

 Developing compensation package Training & development Skills development programs

THE RECRUITMENT AND SELECTION PROCESS AT NBP:

HOW TO DETERMINE NEED OF RECRUITMENT: NBPs Human Resource Department conducts HR planning exercise in which they find out the number of personnel (human resources) required in the organization. In this regard, the following three ways are considered:
Business expansion plans whether the organization is planning to open a new branch. If

it is so, there would be a need of hiring new employees for that branch.
Data related to retirement this data also gives them idea that how many employees they

need to hire for future and this also helps them to set their hiring budget.
Trend analysis look at the past trends of voluntary resignations as well as involuntary

resignation (provision) The Recruitment Department at NBP forwards a requisition form to each Functional/Departmental Head. Information regarding the type of employee needed, number of employees, specification of employee etc. is to be given in the requisition form by the Functional Heads and then the filled form is sent back to the Recruitment Department. According to the information received on the requisition form, internal placements circulars and job advertisements are designed. NBP follows centralized recruiting system.

HOW LARGE IS THE POOL OF APPLICANTS: As mentioned previously, NBP through its HR planning decides the number of employees needed in the organization. But, in a more formal way, a letter is issued from the Recruitment Department to 16 functional groups asking for the analysis of each group on its own. These 16 functional groups conduct self-analysis i.e. their current strengths and their additional requirement and inform this to the Recruitment Department. Their requirement is approved by the Board and accordingly the budget is set in the beginning of the year.

SOURCES EMPLOYED FOR RECRUITMENT: In NBP, quarter-wise division is carried out; for example, a new branch has been established which is going to be made operational in June. In this case, line managers are asked to evaluate their requirements and make the Recruitment Department aware of them in the first quarter, as the branch is to be made operational in the 2nd quarter. Internal sources: Internal placement circulars are circulated in which line managers have to give complete details of the required employee. In this, they also have to include the position for which the employee is required as well as all the specification of employee and the required skills. Then the recruitment department waits for the response for certain time and if not responded takes action on its own. NBP relies on its internal source mostly. They try to make the most out of their existing employees. If new positions are open, the Recruitment Department prefers the existing employees to fill up these positions. Then, if some new branch is to be made operational at a new area, there would a need of fresh employees with new skills which the existing employees might not have. In this case they turn their focus to job advertisements in newspapers. External sources: NBP uses only newspaper advertisements as external source for attracting employees, i.e. generating a pool of applicants. They find advertisements as the most feasible way of attracting applicants pool because their branches are spread nation wide including rural areas so people have access to newspapers throughout the country. There are two kinds of advertisements: 1. Blind advertisements these are for contractual cater (employees to be hired on contract) 2. Open advertisements for permanent cater (i.e. regular/permanent employees)

THE SELECTION PROCESS: The selection process is different for permanent cater and contractual cater. Permanent cater selection process: 6

This type of selection is only for the M.T.s because permanent employees once hired are employed as MTs and their allowances etc. are all same as the other permanent employees already working in the organization.

When the open advertisements are published, applicants respond so their CVs are received. Then a test is conducted and their career paths are defined. The tests are GMAT and conducted through IBP because these tests are hard to manage by the organization itself. Next, they screen the applicants which they do manually* and test letters are issued. Venues are decided which are mostly Karachi, Lahore and Faisalabad. Then group discussion is conducted with the screened applicants. Next goes the panel interview and lastly, a final interview is conducted (one-on-one basis) before actually employing the applicant. And the final selection, orientation is held. * The Recruitment Department of NBP wanted a recruitment portal through Enterprise Resource Plan from SAP which will help them to screen their applicants automatically through this system.

Contractual cater selection process: After the advertisements being published and CVs received, the Recruitment Department conducts an initial screening. They check whether the applicant is fulfilling the criteria, if he/she is not fulfilling the set criteria then they are rejected and thus, the applicants are further shortlisted. The final candidates are called for the preliminary interview. Lastly, a final interview is conducted after which the candidates are finally selected. NOTE: The interview is conducted by the group head (functional head) and an HR head. The screening is done on paper. NBP has skilled interviewers and the interviews conducted are structured.
The tests conducted i.e. GMAT; test the applicants intelligence and stress levels, EQ,

skills for the job etc.

Selection of Managers:

The selection of top level executives and managers is done through head hunters. They select the suitable candidate and inform the organization about them, and these candidates are directly called for the final interview.

SWOT ANALYSIS:
STRENGTHS: Government support Large number of branches WEAKNESSES:

Traditional approach Lack of IT infrastructure Internal recruitment at large Recruitment policy-favoritism(Not on Merit) Incompetent differences staff & individual

OPPORTUNITIES: E-banking

THREATS: Untrained staff hurting the image Government policies

ISSUES IN THE RECRUITMENT AND SELCTION PROCESS OF NBP:

QUOTA SYSTEM: As NBP is a government organization, quota system is a basic issue. In NBP, there is an overall standard criteria set by the Board. But, when the recruitment of close relatives/family members is concerned, the criteria are relaxed. For instance, standard criteria for recruiting an MT is that he/she should be an MBA with a CGPA equal to 3.0 and he/she should not be more than 26 years

of age. But when an employees son/daughter is to be hired, the criteria is relaxed and as such he/she should be an MBA with 2.8 CGPA and the age should not be more than 28 years. Comparison with Bank Alfalah Limited (BAL): BAL does not prohibit employment of close or blood relatives of current employees, provided that they meet the required eligibility criteria. Candidate once appointed should not be placed in the same Branch/Unit in which his close/blood relative is already working. All, candidates at the time of interview are required to disclose their relationship with the existing employees in their application form.

1. MANUAL WORK: The Recruitment Department of NBP carries out the process of recruitment and selection manually. Especially the prescreening of applicants is done manually/on paper. They are planning to buy & make use of the ERP-Enterprise Resource Plan. The ERP provides human, financial and information resources to the organization. They give the human capital modules with sub-modules including recruitment and selection, compensation, performance appraisal etc. This is an automated system - Human Resources Integrated System (HRIS). They are planning to employ this integrated, automated system as it is very difficult to manage the data of all the operations and employees of NBP as there is a network of 450-500 banks (branches). The manual system is very time consuming. As it is difficult to manage the data of the whole network of branches of NBP nation-wide so it has caused lack of decision making. By using the HRIS this problem will be solved the process will improve.

Comparison with BAL:

Bank Alfalah Limited uses HRIS-the automated system for all the recruitment and selection process and does not carry this out manually.

2. GOVERNMENTAL/POLITICAL PRESSURES: Since the bank was nationalized it has been facing this problem. As it is a government organization, it has government accounts too. The Recruitment Department faces political/governmental pressures regarding the hiring of employees. For this fact, they have to amend their policies regarding recruitment and selection. Comparison with BAL:

Every candidate applying for job at BAL should fulfill the eligibility criteria of the Bank, which is the same for all employees. No amendments are made in the recruitment and selection policies of the Bank under pressure. Thus, BAL strictly follows its policies.

OTHER POINTS OF COMPARISON:

Apart from the written tests of all candidates for regular employment in BAL, their psychometric tests are also conducted. Only those obtaining satisfactory rating (as defined by consultants involved in the process) will be taken to the next stage. While in NBP, only written test (GMAT) is conducted. A panel interview is conducted at BAL for the final selection of the candidates applying for top level managerial/executive positions. The final interview in the selection process at NBP is on one-to-one basis. NBPs interviews are based on mixture of both types of questions structured as well as unstructured; their basic requirement is just to check that whether the employee is fulfilling the criteria of required job or not while BALs interviews are based on only structured questions in order to judge all the employees on same criteria. At BAL, a new joiner has to undergo a medical examination from a Registered Medical Practitioner before joining the bank. Whereas, in NBP, there is no such condition for medical examination for the new joiners. They take medical exams only for the jobs such as security guards as they have to be medically fit. As a standard practice, service of new entrants to BAL is to be subject to a probationary period. Length of this probationary period is to be determined as follows: o For those with less than five years of prior relevant experience: 6 months. o For those with prior relevant experience of five years and above: 3 months.

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In contrast, new joiners as permanent employees at NBP are to be employed as MTs. There is no probationary period; instead, from the very first day of work they are paid the same allowances etc. as a permanent employee is to be received.

RECOMMENDATIONS:
Quota system should not be considered while hiring employees on the basis of existing employees contacts. Criteria and standard should be same for each employee.

The bank should give first priority to develop automated system to compete with other banks because without the Human Resource Integrated System (HRIS), bank would not be able to grow in todays competitive environment.

Government/political pressure should be avoided. The bank has to revise policies regarding recruitment and selection to avoid discrepancies.

NBP should focus on private sector as well as the bank give preference to the graduates of government universities while hiring employees so the bank should give the equal chance to the graduates of private universities.

NBP should give equal proportion to internal sources and external sources of hiring. As the bank give the high preference to internal sources than external sources. The employees hired externally might bring new skills with them. 11

The bank use only newspaper as an external source but NBP should focus on other external sources e.g. College recruitment so bank will be able to easily cater talented, high-skilled, well-educated and diversified pool of applicants.

There is no proper delegation of authority. Executive at all level should be given sufficient power and authority to make quick decisions. This will increase the effectiveness and efficiency of the organization.

Application
Position Applied For: (Tick your choice)
Management Trainee(General Banking, Corporate & Investment Banking, Commercial & Retail banking, Credit Management, Treasury Management, Compliance, Human Resource, Risk Management & Audit)
Nam e: Fathers/Husbands Name: Date of Birth/Age: (as on 31.07.2009) C.N.I.C. No.: Marital status: Domicil

Paste Photograph here

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e: Postal Address: Tel :PTCL /Mobile No.: Email Preferred Venue for appear written test

EDUCATIONAL RECORD
Certificate/Deg ree with Specialization Name of Institution (Board/University) Year of Passing Subject(s) GPA (or % whichever is applicable)

WORK EXPERIENCE (if any)

Name of Organization Position/Grade held Field From(MM/YY) To (MM/YY)

Date:

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