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INSTITUTE OF BUSINESS AND TECHNOLOGY
Impact of Downsizing in HBL
Prepared By
Madiha Munawwar MirzaBM-25070
Course Code : MKT-606
MBA (Human Resource Management)
FACULTY OFMANAGEMENT AND SOCIAL SCIENCES
FALL - 2010
Impact of Downsizing in HBL
INSTITUTE OF BUSINESS AND
TECHNOLOGY
ABSTRACT SUBMITTED BY: Madiha Munawwar Mirza
DISCIPLINE: MBA (HRM)
TITLE OF PROJECT REPORT: Impact of Downsizing in HBL
MONTH OF SUBMISSION: November, 2010
NAME OF PROJECT SUPERVISOR: Dr. Noor Ahmed Memon
ABSTRACT
Organizational downsizing, or simply ‘downsizing’, is a feature of many
organizations in the industrialized world. As a goal-oriented restructuring
strategy, downsizing endeavors to increase an organization’s overall
performance. However, the consequences of downsizing have proven to be
persistently negative. Indeed, organizations embarking upon downsizing have
largely failed to accomplish their stated and desired objectives. Moreover, the
execution of downsizing is not confined to economic and organizational
consequences, but profoundly affects the entire workforce. The first of two, aims
to review the relevant body of literature and attempts to clarify many of the
mysteries and misconceptions associated with downsizing paying particular
attention to aspects concerned with definitions and meaning, scope and
implementation strategies.
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ACKNOWLEDGEMENT
First of all I would like to thank my ALLAH Almighty Who gave me the
courage, health, and energy to accomplish my Project in due time and without
Whose help this study which required untiring efforts would have not been
possible to complete within the time limits. All respect for his Holy Prophet Hazrat
Muhammad (P.B.U.H) who enabled us to recognize our creator.
Motivation, encouragement, guidance, corrections, advices, and overall
support are the key elements required from the supervisor to write and complete
a Project of a good standard and a quality within deadlines. It is a matter of
utmost pleasure for me to extend my gratitude and give due credit to my
supervisor DR. NOOR whose support has always been there in need of time and
who provided me with all these key elements to complete my dissertation within
the time frame.
Moreover, he has been supporting me enthusiastically throughout my
work to make my Project ready in due time. My thanks is also due to my
examiner Dr. NOOR whose valuable comments and suggestions made colossal
contribution in improving my dissertation. Last but not least, I extend my thanks
to my entire family for moral support and prays for my health and successful
completion of my dissertation within time limits.
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TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENT
1. INTRODUCTION 1 1.1 Introduction 1
1.2 Purpose of Study 1
1.3 Research Objectives 1
1.4 Research Methodology 2
2. LITERATURE REVIEW 3 2.1 Downsizing 3
2.2 Employee Downsizing 3
2.3 Morale 5
2.4 Conceptual Approach To Employee Downsizing 8
2.5 Downsizing and Employee Attitude 12
2.6 Effects On Employee Downsizing Rate 17
2.7 Downsizing -- The Long Term Effects 23
3. HABIB BANK LIMITED 41 3.1 Introduction 41
3.2 Vision47
3.3 Mission 47
3.4 Values 47
3.5 Products Offered by HBL 47
4. DOWN-SIZING 55 4.1 Golden Handshake Scheme 55
4.2 Conflict Management 55
4.3 Dispute Resolution Process 57
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5. RESEARCH FINDINGS 74 5.1 The Questionnaires74
5.2 Findings 82
6. CONCLUSION AND RECOMMENDATIONS 83 6.1 Conclusion 83
6.2 Recommendations 83
BIBLIOGRAPHY 86
APPENDIX 87
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1. INTRODUCTION
1.1 Introduction
The research objectives is to identify main problems concerning with most
employee concerns with downsizing in HBL because their services with certain
expectations, and, for any number of reasons, those expectations were not met.
Higher management can help in this scenario controlling misconceptions and
troubles. so this is total concern of my thesis that how and when downsizing and
top management can impart their role in HBL concerning the favor and fear of
employees.
1.2 Purpose of Study
The Purpose of the present research is:
"To gain a better understanding of the role of employee loyalty &
satisfaction in maximizing profitability in HBL Limited ".
Our Purpose is employees satisfaction and job security provides from two
to three times as much profit as the traditional banking environment where the
fear of downsizing is present.
1.3 Research Objectives
“Downsizing and its impact on workforce of employees of HBL ” generally
represent all those issues which influence Downsizing adoption in Pakistani
banking sector . The study would focus only on the “Employees Satisfaction &
Downsizing Environment”.
The research objective covers the following:
What are the major reasons and requirements for implementing
downsizing?
How can employee's role are applied on organization?
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How employee's efficiency can be affected by the downsizing?
1.4 Research Methodology
In order to conduct the research work a number of research methods are
used which includes intensive web search, interviews, and visits at HBL. The
Total concern of research methodologies will based on how and when
downsizing and top management can impart their role in HBL concerning the
favor and fear of employees.
For this purpose the following research methodologies are followed:
Primary data
o Questionnaires, Interviews
Secondary data
o Libraries, Articles, Research material, Internet, Financial Magazines
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2. LITERATURE REVIEW
2.1 Downsizing
Organizational downsizing, or simply ‘downsizing’, is a feature of many
organizations in the industrialized world. As a goal-oriented restructuring
strategy, downsizing endeavors to increase an organization’s overall
performance. However, the consequences of downsizing have proven to be
persistently negative. Indeed, organizations embarking upon downsizing have
largely failed to accomplish their stated and desired objectives. Moreover, the
execution of downsizing is not confined to economic and organizational
consequences, but profoundly affects the entire workforce. The first of two, aims
to review the relevant body of literature and attempts to clarify many of the
mysteries and misconceptions associated with downsizing paying particular
attention to aspects concerned with definitions and meaning, scope and
implementation strategies.
2.2 Employee Downsizing
Employee downsizing is a nightmare feared by most of the employees
working in the corporate world. A downsizing strategy reduces the scale (size)
and scope of a business to improve its financial performance.
In management parlance, the term downsizing refers to pruning (including
layoffs and retrenchments) of the size of workforce for a variety of reasons:
Obsolescence of skills consequent upon up gradation of technology,
Shift in the organizational requirements;
Outsourcing;
Modernizing,
Restructuring or even reducing the activities of industrial units
Employees, nowadays, will have to reconcile with the ugly realities of the
corporate world and they may have to be prepared for alternative employment as
the axe may fall on anyone at any time. Due to the globalization of business,
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organizations are able to develop a number of approaches by which to employ
human resources, technology, and capital to implement innovative projects in
different parts of the world. They are able to derive maximum advantage due to
these possibilities. While the larger goals appear justifiable and in the interest of
most stakeholders, they lead to frequent changes at the organizational,
functional, and individual levels.
At the organizational level, such changes can lead to closure of
businesses, off-shoring, merging with another organization, outsourcing,
restructuring, etc. At the functional level, it can imply changes in the availability of
resources, changes in the scope of activities, etc. As a sequel to these
developments, employees can be redeployed, transferred, rendered redundant,
or let go within a very short span, without adequate preparation for these
changes. Such changes take their toll in terms of organizational productivity,
nature of employer-employee relationships and the associated social costs.
People who contribute to the organizational goals are the organization's
assets. These assets are turned into liabilities due to reasons mentioned earlier.
The challenge is to what is morale manage employee exit without disrupting the
organization's functioning. Those individuals who lose jobs are the hardest hit.
For the affected employee, the emotional trauma of losing a job is very difficult to
cope with. Aside from the financial implications of a job loss, they have to
reconcile with the loss of self-esteem, self-confidence, and a breach of trust
between the employer and the employee. Along with the individual, his/her family
also gets deeply affected with the involuntary job loss of a family member. The
pain is not limited to the individual alone but affects a number of others. The
effect is also felt by other employees who remain in the organization as they
suffer from the guilt and are also faced with the fear of job insecurity.
The fundamental reason to resize the organization is to improve
organizational performance and to reduce costs of operation. While these
changes are expected to fetch significant gains for the companies in the long run,
an analysis of corporate experiences of downsizing shows that such measures
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are not always implemented with careful consideration of all the implications.
Downsizing also brings, in its wake, a number of associated hidden costs, which
companies tend to overlook in pursuit of short-term gains. The flip side of
downsizing is that the organizations lose expertise, skills, knowledge, experience
and valuable relationships, which walk out of the door every time somebody
leaves. A number of alternative approaches can be implemented to achieve the
over-riding goal of enhancing business performance. At the same time, it is true
that downsizing in many cases is an inevitable option. However, downsizing
should be considered not as the first but the last option. If the axe has to fall, it
should be preceded by a careful consideration of the consequences of such a
drastic action.
2.3 Morale
Morale, also known as esprit de corps, is an intangible term used for the
capacity of people to maintain belief in an institution or a goal, or even in oneself
and others. According to Alexander H. Leighton, "morale is the capacity of a
group of people to pull together persistently and consistently in pursuit of a
common purpose".
Morale in the workplace
Workplace events play a large part in changing employee morale,
such as heavy layoffs, the cancellation of overtime, canceling benefits
programs, and the lack of union representation. Other events can also
influence workplace morale, such as sick building syndrome, low wages, and
employees being mistreated.
Factors influencing morale within the workplace include:
Job security.
Management style.
Staff feeling that their contribution is valued by their employer.
Realistic opportunities for merit-based promotion.
The perceived social or economic value of the work being done by the
organization as a whole.
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The perceived status of the work being done by the organization as a
whole.
Team composition.
The work culture.
How Down-Sizing Affects Employees’ Morale
Every year companies spend millions in recruitment due to employee
turnover. Turnover and its associated costs are a burden that used to be just
the cost of doing business. But more and more companies are investing time
and effort in making better hiring decisions and doing more to keep the
employees they do hire. Employee retention is now a buzz word in today’s
business world.
Over two-thirds (70%) of HR managers state that employee retention
is a primary business concern. HR managers currently find employee
retention a business challenge, long-term demographic changes, such as the
retiring Baby Boomer population have the potential to aggravate this issue. All
companies, regardless of size, are struggling with how to keep employees
from leaving for more money or better opportunities. Studies consistently
show that even though employees may say they are leaving for more money,
when those same employees are asked several months later why they really
left, the money factor is about 5th or 6th on the list.
The first few reasons include lack of recognition, disagreement with
the culture or direction of the company, poor treatment by their boss, lack of
excitement about their growth prospects, and poor relationships with co-
workers. How much? When you add the costs of finding an employee,
training the new employee, lost productivity and filling in for the employee
who leaves, the cost can easily equal 150% of the base salary of the person
who left. So, if you are paying someone $50,000, the cost to replace that
person will be approximately $75,000. This money comes out of your hard-
earned profits.
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This is one of the key reasons that companies are focusing so much
effort on keeping their current employees. Some of the steps taken by
companies to retain their work force are:
Ensure you offer competitive compensation.
Ensure you offer basic health care benefits at reasonable rates.
Consider adding lifestyle benefits that are cost effective (read easy on
the cash flow).
Find out what employees want from their career and do what you can
to provide for their needs.
Be as flexible as possible about how the work gets done.
Be as flexible as possible as to when and where the work gets done.
Can it be OK for an employee to take a few hours off to attend to a
family or personal matter if they can accomplish the job at their home
in the evening?
Take a real and genuine interest in people’s career aspirations and
personal lives.
Recognize positive contributions to the company. Communicate
company progress, financial news, major customer or sales activities
on a regular basis. Follow up on your commitments to provide
information or answers.
Have regular (bi-weekly or monthly) meetings with all employees
where they can ask you questions about your plans, company
progress, new developments to look for, etc. Be accessible to them so
you can learn their needs. If you can respond to their needs before
they become real issues, they won’t begin looking for greener grass.
Ask former employees why they resigned. Even if they left six months
ago, they still have a valid perspective.
Routinely ask employees what you can do to make the company a
better place to work. Set boundaries if necessary as to what items are
not negotiable; such as ownership in the company or 50% per year
salary increases.
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2.4 Conceptual Approach To Employee Downsizing
Reflective Restructuring
According to Theo Blackwell of The Work Foundation, in 1980s and
1990s many companies resorted to downsizing their human resources in
order to cope with economic pressures. But what most of these companies do
not realize is that downsizing does not always lead to savings in reality or
increase in the market worth of the company. On the contrary, the downsizing
companies may be branded anti-people. It usually leads to repetitive
downsizing and results in the loss of employee morale and loyalty and
thereby affects overall productivity levels. However, they can adopt alternative
approaches to cope with economic uncertainties. Wayne Cascio had
proposed a new strategy termed as "reflective restructuring", which enables
companies to offer a range of smarter options to employees. The article
explains the significance of this new concept and provides examples of
companies in the US and UK which have adopted the strategy. It also
explains that while companies in the US are at a greater liberty to downsize,
the UK business environment is not amenable to such measures.
He outlines the causes that resulted in surplus manpower among
PSUs. However, after India opened up its economy, most PSUs were
compelled to streamline their operations to increase their efficiency. One of
the major steps taken to achieve this goal was to shed the excess staff on
their payrolls through the "golden handshake," by floating Voluntary
Retirement Schemes (VRS) and Compulsory Retirement Scheme (CRS). The
other major step was to outsource non-core activities and focus on their core
competencies. The article provides a snapshot of the Indian experience of
downsizing and also discusses the social implications of these drastic
measures.
Barbara L Davison explains, in "The Difference Between Rightsizing
and Wrong sizing", the differences among the terms used in conjunction with
downsizing, i.e., rightsizing, resizing, upsizing, side sizing, and wrong sizing.
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The author clarifies that rightsizing need not imply reduction of personnel. In
certain cases, it can also mean increase in the numbers. The article explains
the need for tying rightsizing efforts with the overall strategy, identifying
critical growth areas as well as those needing consolidation, analyzing the
effects of rightsizing on all functional areas, evaluating the financial
implications, and ensuring that each department and employee adds
measurable value. The author illustrates how to carry out a rightsizing
exercise with the help of a process example, which describes the most
important steps. In this connection, it cites the examples of a few companies,
such as Ernst & Young, Cisco, Agilent Technologies, and Schwab, which
have implemented rightsizing. The article also illustrates a few alternatives to
downsizing and highlights new workforce concepts, i.e., "Just-in-time"
workforce and the "Portfolio" workforce, to cope with fluctuations in business
cycles.
Rick Maurer of Maurer & Associates emphasizes the need for
organizations to act swiftly to cope with changing business conditions and on
their requirement of human resources. Business leaders need to continuously
assess the mix of skills required as well as the number of employees required
for the present and the future. In addition, they should engage in a process of
benchmarking with companies in the same industry.
The article explains that downsizing may prove to be a risky strategy
that may not always bring about much improvement in terms of the
productivity or revenues to the organizations. Hence, to cope with changing
requirements of staff, companies should consider a number of different
alternatives to downsizing.
Implementation of Employee Down Sizing
Sumati Reddy of the ICFAI University, Hyderabad, India outlines
ways in which employers can implement a well-considered downsizing
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program. If downsizing is inevitable, organizations must pay due attention to
the rationale for downsizing, involvement of employees in designing the
program, formulation of a fair and equitable policy, Equal Employment
Opportunity (EEO) guidelines, legal counsel, etc. The article also suggests
the use of objective data to formulate the downsizing plan. In conclusion, it
points to a few indicators to assess the effectiveness of a downsizing
program.
Carlton Becker of ORC enumerates a number of lessons from the
collective experience of layoffs by companies across the globe. These
lessons largely pertain to the need to remain lean and mean in a fast-
changing global business environment, rightsizing the right way, considering
scientific alternatives to downsizing, paying attention to the after-effects of
downsizing, and being aware of the legal implications of downsizing. The
author points out those mass layoffs should be viewed as a change process
to be implemented by adopting a systems approach. It explains the strategic
role of HR executives during the whole process, especially during the initial
stages of rightsizing. It further explains the step-by-step guidelines that HR
executives can adopt in the downsizing process. The article shares the
experiences of a few companies such as MacMillan Bloedel, Canada,
DaimlerChrysler AG's US unit Motorola, Hallmark Cards, and Lucent
Technologies.
Coping with Downsizing
Neela Radhika of the ICFAI University, Hyderabad, India, describes a
new phenomenon observed in the aftermath of downsizing - Pink Slip Parties.
It describes how Pink Slip Parties came into practice and the reason for using
the term `Pink Slip'. The article elucidates the special features of these parties
with respect to attendees, the kind of music played during these parties, the
color of wristbands or badges, message boards, and activities. Pink Slip
Parties offer a number of benefits to both job seekers, who had lost jobs on
account of downsizing, as well as the recruiters. The effectiveness of these
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parties are analyzed vis-à-vis the nature of support gained by laid-off workers
in restarting their careers. The article also points to new developments in this
area, such as Layoff Lounges.
Mika Kivimäki, Jussi Vahtera, Jaana Pentti, and Jane E Ferrie reports
the results of a study conducted to investigate the effect of the psychosocial
work environment on employee health. This study was conducted among
1,110 municipal staff in Raisio, Finland, between 1990 and 1995. It
encompasses the period prior to downsizing, during downsizing, and when
downsizing had slowed down. The downsizing exercise was a reactive one,
conducted through retirement and hiring freezes, and letting go the temporary
employees. Some of the significant findings of the study are: downsizing
results in changes in work, social relationships, and health-related behaviours
that lead to increase in certificated sickness due to increases in physical
demands, job insecurity, and reduction in job control; sickness absence
increases twofold in a major downsizing as compared with sickness absence
during a minor downsizing; downsizing was associated with negative changes
in work, impaired support from spouse, increased prevalence of smoking, and
sickness absence. It has been found that this study was unique in the area of
employee downsizing and employee health as it studied a natural experiment,
which is rarely feasible.
Jonathan Kelley explains that the significance of downsizing depends
on its long-term impact on workers. It presents a model to study the
probability of re-employment among workers shed by downsizing firms as
compared with those departing from stable or growing firms. This model can
also be used to examine the impact of downsizing on the duration of jobless
spells, continuity or change in occupation, on earnings, and on job
satisfaction among workers who obtain employment. The model combines
three factors: re-employment by age, gender, and education.
Some of the significant findings of the study are: downsizing is not a
disaster for most of the workers; 75% of the downsized employees find jobs,
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and most of them do so quickly; workless spells between jobs are short or
non-existent; and the most serious grounds for concern relate to groups of
vulnerable workers, such as older workers and women.
Carl Van Horn, William M Rodgers III, Neil Ridley, and Laurie M
Harrington of Rutgers, offers glimpses of the consequences of involuntary job
loss for workers and their employers. It describes the evident patterns of
worker dislocation: it affects both blue-collar and white-collar employees,
workers of all races, ages, education levels, occupations and industries; and it
happens at very short notice (usually one week or less, and many do not
receive any advance warning). The report describes the impact of job loss on
individuals and their families, the most significant being emotional distress
and financial hardship. It delineates the differences in approaches by small
and large firms. Large firms offer more assistance and better severance pay
as compared with smaller firms. It also provides guidelines for employers,
employees and policymakers to deal with the consequences of job
dislocation. The experience of downsizing employees during the last few
years points to the need for employees to be prepared for a job loss at any
point of time in their career. This report also includes examples of effective
practices of a few companies to bring succour to the displaced workers.
2.5 Downsizing and Employee Attitude
In today's competitive market, many companies have found that staying in
business means downsizing. However, this everyday event in the business world
is a unique (hopefully) event for you and your employees. It is important to
remember that this event affects not only the "downsized," but also those who
remain.
Importance & Necessity
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Downsizing has become a common occurrence in today's business
world. Because of this, and many other factors, many employers and
employees no longer believe in the concept of lifetime employment. As a
result, employers often underestimate the need to provide support to
employees, both those who are being released and the 'survivors.' Many
employers feel that the only support they can provide is expensive
outplacement services.
The decision to downsize is made for strategic and financial reasons.
The expectation is that the expense reduction will lead to a positive impact on
the bottom line and will ultimately be reflected in improved profitability and
productivity. However, many organizations neglect to factor in the
psychological impact of downsizing on those who remain. In fact, if
downsizing is handled improperly, the problems it was designed to correct
may be intensified due to the impact on the loyalty and attitudes of the
survivors.
Effects on Work Effort
In an attempt to determine the impact of downsizing, the effects of job
insecurity and economic need to work on employee attitudes was examined
by Brockner and his colleagues in 1992. In this study, Brockner decided to
use work effort as a measure of job attitudes. The study found that high job
insecurity coupled with high need to work, resulted in increased work effort
following a layoff. High job insecurity, coupled with low need to work resulted
in no change in the level of work effort.
This seems to indicate that when there are high levels of job
insecurity, as would be expected during downsizing; employees with a high
need to work will increase their work effort, while those with a low need to
work will have no change in work effort. While this result is interesting, of
more interest was the finding that variables moderated this observed
relationship. Specifically, Brockner found that the remaining employees'
perception of the fairness of the lay-off process and their attachment to the
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lay-off victims colored their views. This issue of fairness has been found to be
related to a number of other work-related variables and has its roots in
theories of organizational justice.
The Justice Theory
Theories of organizational justice propose that people attend to the
processes used to determine outcomes as well as to the end result in
determining "fairness." For example, as Brockner's study reported, the
remaining employees considered the way in which their co-workers were
treated during the downsizing process as well as the outcome (i.e., losing
their jobs). From this perspective, layoff survivors can be expected to exhibit
the most negative reactions when they identify with the layoff victims, and feel
the victims have not been well compensated.
"When survivors perceived that those laid off had been dismissed
with little or no compensation, they reacted more negatively (from an
organizational perspective) to the extent that they felt some prior sense of
psychological kinship with the laid-off parties."
What Brockner's study would indicate is that employees are affected
by more than just the fact of layoffs. They are affected by how the layoffs are
managed and by what is done for the individuals in those positions. Brockner
found that negative attitudinal changes were reflected in survivors' reduced
work performance and lowered commitment to the organization. Conversely,
the study showed that employee commitment can actually increase during a
layoff process when the company shows some commitment to displaced
workers.
The post-layoff setting provides organizations with a rather
unique...situation in which to express their commitment to employees; that is,
if organizations show commitment to their dismissed workers (through
caretaking activities of providing severance pay and outplacement
counseling,)—even as they are in the process of becoming uncommitted to
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them by laying them off--the more committed to the organization are survivors
apt to be" (Brockner et al., 1987). Brockner's study indicates organizations
can proactively affect surviving employees' attitudes during periods of
downsizing. The next section describes some steps that can be taken to
minimize the negative effects of downsizing.
Strategies for Maintaining Positive Employee Attitudes
According to survey results from a study on employee loyalty
conducted by Industry Week, there are eight factors affecting employee
loyalty. They are, in descending order: equity, security, good management,
integrity, empowerment, good communications, benefits and personal support
(McKenna, 1991).
Downsizing is a stressful time for employees, and is a time in which
they will question each of the eight factors mentioned in the above quote by
McKenna. By communicating with employees, making them feel part of the
organization, and working to restore loyalty, it is possible to avoid some of the
most dangerous pitfalls of downsizing.
Communicate
During downsizing, the losses due to decreased employee loyalty,
morale and lost productivity are compounded by the complexity of the layoff
process. For example, the rumor mill that develops, or intensifies, during the
preliminary planning stages results in employees spending significant
amounts of time gossiping and worrying about what may happen.
Unfortunately, many managers in the position of being "in the know" are
guided by a policy in which they are to avoid talking about rumors with
employees.
While this policy may seem appropriate, the associated costs, in
terms of lost productivity and employee loyalty, may be significant.
Communication will help to curb the worry and re-direct employee energies to
the job at hand (Fisher, 1988). "If you don't know something, or you do know
but SEC rules or other legal constraints have momentarily sealed your lips,
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come out and say that. Silence is the worst policy" (Fisher, 1988). The most
preferred method of communication is personal appearances from upper
management; however, any communication at all will be helpful.
Ensure that communications cover the following topics:
Talk about the fact that changes are coming; employees already
know, but it will increase their trust level if they hear it from you;
explain the purpose of the downsizing;
explain the need for growth and profitability (which can be perceived as
legitimate reasons when presented in an appropriate manner);
if possible, explain future plans including detailed plans for
restructuring, upgraded technology, or some processes to increase
efficiency;
communicate, whenever possible, that though employee downsizing is
necessary, each employee who is let go will receive appropriate
severance pay and (if you intend to offer it) job placement assistance;
emphasize that laid-off employees will be treated with respect and
dignity; this is important for managing and maintaining remaining
employees' moral and company commitment.
Most importantly, listen carefully to employee concerns and adequately
address each concern to whatever degree possible. This must be done
with sincerity and no sense of condescension, such as "calming the
mob."
In addition, justification for the layoffs is extremely important,
especially if times are good and the downsizing is a part of strategic growth
and profitability. Employees need to understand that you sincerely need to
make these cuts and it is not a whim or a mistake.
Make Valuable Employees Part of a Progressive Organization
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To stay or not to stay? That is the question some remaining
employees ask in the aftermath of their company's downsizing process—
particularly those who have other employment opportunities outside the
company. When these employees see some top managers leave voluntarily,
they may question the long-term prospects for the company and consider an
immediate job change. This is something to watch out for, as the people who
leave under these circumstances are generally those with valuable skills and
training.
A former West Coast bank manager who left when he saw his
manager leave made this comment for an article in Fortune: "If you let people
get the idea that the company is not just cutting back but is sinking into
mediocrity, morale really goes to hell" (Fisher, 1988). This quotation highlights
the importance of managing perceptions with "positive press" and
communication from upper management. Discuss the downsizing as a step
towards a more efficient and profitable business with an attractive future.
Rebuild Loyalty
Long after downsizing is completed; continue communicating with
employees to re-build security and trust. Do not allow management to
assume remaining employees are merely grateful to still have jobs.
Employees need to feel they are valued, that they have a place in the
company, and that management believes that they are an important part of
the success of the organization. To emphasize this point, talk about where the
company is headed, and describe any plans for growth and prosperity.
2.6 Effects On Employee Downsizing Rate
Organizational Climate
Litwin and Stringer define organizational climate as 'a set of
measurable properties of the work environment, perceived directly or
indirectly by people who live and work in this environment and assumed to
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influence their motivation and behaviour'. Traditionally, organizational climate
alms to capture a snapshot of an organization at one point in time.
Organizational climate research has had a long and active history, with much
of its foundation drawn from psychology. Because of space constraints and
the availability of excellent articles which review the extensive history of the
organizational climate literature, we will only briefly review the organizational
climate literature here.
Organizational climate is largely based on Lewinian field theory,
which is a result of Lewin's work on experimentally-created social climates
This work was advanced by several early key studies including Litwin and
Stringer and Tagiuri and Litwin. Litwi n and Stringer investigated how
organizational climate affects individual motivation. They also suggested that
organizational climate was comprised of nine dimensions: structure,
responsibility, reward, risk, warmth, support, standards, conflict, and identity.
Taguiri and Litwin's book was comprised of a series of essays that treated
climate in ways ranging from a subjective interpretation of organizational
characteristics to an objective set of organizational characteristics. Other
early studies were aimed at identifying the dimensions comprising
organizational climate
After the 1960s and early 1970s, the focus of the organizational
climate field became more clearly defined. More recently, organizational
climate researchers have begun to consider how organizational climates
develop. Three schools of thought have developed: the subjectivist,
objectivist, and interactionalist perspectives.
Probably the most troubling issue that the organizational climate
literature continues to face is defining the appropriate dimensions that
comprise organizational climate. Organizational climate is a fairly general
term which refers to a class of dimensions which can be critiqued for being
too diverse . In addition, the multidimensional nature of organizational climate
makes it more difficult to define sharp borders. Organizational climate
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scholars have responded by making empirical and theoretical arguments to
distinguish organizational climate from various other const ructs, such as
structure and individual satisfaction. While these and other efforts have been
helpful, some fuzziness around the borders and differentiation of the
organizational climate construct still remains.
Research on organizational climate has continued more recently,
including Joyce and Slocum's study of person and organizational fit, Joyce
and Slocum's investigation of the extent to which organization members
agree about their organizational climate, Glick's discussion of the difficulties of
measuring organizational climate, Denison's investigation of the relationship
between organizational climate and performance, and Koyes and DeCotis's
work on measuring organizational climate. Even more recently, Denison has
investigated the difference between organizational culture and organizational
climate, and Griffin and Mathieu have looked at how perceptions of
organizational climate vary with the hierarchical level in an organization.
Anderson and West contributed to the literature by exploring the link between
organizational climate and innovation.
Measuring Organizational Climate
At its most basic level, organizational climate refers to employee
perceptions of their work environment. Generally, these perceptions are
descriptively based rather than value based. For example, the phrase, "I have
more work to do than I can possibly finish" is a description of a person’s
workload, while the phrase "I like my job" is a positive evaluation of one’s job.
Thus, organizational climate is more than simply a summary of employee
likes and dislikes.
The assessment of organizational climate typically occurs via an off-
the-shelf or customized survey containing questions about he work
environment. Although administration procedures used when conducting a
survey can vary, ideally employees are asked to report to a designated work
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site at a scheduled time to complete the survey, and employee participation is
voluntary.
Selecting a Survey
Once a decision is made to conduct an organizational survey, it can
be difficult to identify the "right" survey to use. Although not a comprehensive
list, the following factors may be helpful in reducing the number of survey
choices:
Determine the scope of information included in the survey. As might
be imagined, there are a large number of organizational climate areas that
exist. Recent research has identified more than 460 different types of work
environment characteristics that have been measured. Many of these
characteristics can be classified into the following major areas: job, role,
leader, organization and work group. In many companies there are particular
areas where employee feedback would be useful. For example, a company
concerned about the impact of recent managerial downsizing may want to
ensure that leadership/supervisory components are included in the survey.
Make sure the number of climate areas included is kept to a
manageable level. Not only will including too many areas on the survey
increase the time and effort needed to administer the survey, but it also can
make the interpretation process more difficult. On a related issue, many users
of organizational surveys find it useful to add a few customized items to the
survey. Although adding items does not always add to the scientific value of a
survey, it can go a long way in generating support from the company’s
management team.
It can be extremely helpful to choose a survey that offers some
flexibility in its administration capabilities. For example, some companies may
require the ability to administer the assessment using a paper-and-pencil
format, while others may prefer an intranet format. Factors such as employee
demographics can be important, also. Some companies may require both an
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English and Spanish version of the survey to accommodate all of their
employees.
Finally, identify some general pieces of information you would like to
see in a report once the survey responses have been analyzed. For example,
some companies may have an interest in only reviewing the average levels of
item responses within the company, while others may want to see how the
company scored compared to other companies throughout the nation.
In addition, some companies may want to have results broken down
department-by-department or item-by-item while others may want one set of
analyses based on the entire set of employee responses. In any event, the
publisher/director of an organizational survey should assist a company in
selecting an instrument that will meet their specific reporting needs.
Benefits
Companies that conduct organizational climate surveys may
experience one or more of the following benefits:
Employee involvement
By administering an organizational survey, employees are given an
opportunity to be involved in the company at a different level than is typically
defined in their job descriptions. Research has shown that employees who
are more involved in the company also may be more satisfied with their job,
miss fewer days of work, stay with a company longer, and perform better on
the job.
Positive work outcomes
In the last 30 years, a significant amount of evidence has been
accumulated documenting the importance of the work environment in relation
to organizational performance. In general, research has shown that factors in
the work environment are related to outcomes such as employee motivation,
job satisfaction, intentions to quit, job performance and even organizational
productivity. In addition, an emerging area of research has indicated that
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organizational climate can influence customer perceptions of the quality of
goods or services delivered by a company.
Communication forum
In many companies it can be very difficult to communicate with the
majority of employees. Recent trends such as organizational restructuring
and/or merging of companies has resulted in "flat" organizational
responsibility charts, which increases the number of employees for which
each manager is accountable. As a result, some managers only have limited
amounts of time to talk to employees about day-to-day activities.
Conversations regarding an employee’s work environment can fall to the
wayside, and in some instances, never take place. Organizational surveys
that occur on a scheduled basis (e.g., annually, biannually, etc.) can be a
more efficient way for managers to gather important information.
Industry comparisons
Organizations often look to other companies when determining
organizational policies and procedures. It is quite common for companies to
"explore the market" or conduct benchmark studies when considering issues
such as new product development, salary or employee benefit policies,
marketing strategies, etc. A common question is "How do we compare to
others?" One advantage of conducting an organizational survey is that it can
provide an opportunity to compare the company’s work environment to that of
other companies. Many surveys offer a national normative database that can
be used to facilitate comparisons across a variety of conditions and
industries.
Proactive management
Administering organizational climate surveys allows managers to be
much more proactive in managing their employees and work environments.
When used on a scheduled basis, organizational surveys can help pinpoint
problem areas within the work environment before they grow into a crisis
needing immediate attention. Problems that require a reactive posture
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interrupt the normal workflow, and typically cause delays in providing
products or services to customers.
Tips For Creating An Effective Organizational Climate For Minimum
Employee Down Sizing
1. Listen to the entire organization with ease.
2. Collect perceptions in real-time.
3. Reduce organizational bias.
4. Validate the questions and thus improve the results.
5. Facilitate candid and open feedback from employees who respond
anonymously.
6. Identifying areas of inefficiency or performance gaps.
7. Identify root causes for poor productivity (such as poor communication or
poor process efficiency).
8. Reduce transition time during changes in the organization (such as
reorganization, relocation, a change in ownership, new
products/services, or rapid growth).
9. Inform leaders with the information needed to make the best decisions.
10. Give employees an organized voice to assist leaders in taking actions.
11. Gain a fresh perspective of the organization.
12. Facilitate, track and execute informed action steps in one system.
2.7 Downsizing -- The Long Term Effects
Originally written about downsizing within the public sector, the
points in this article are no less applicable to any organization that is forced to
undergo downsizing. Interestingly enough, almost all surveys and research
examining the long term effects of downsizing indicate that companies that
downsized ended up disappointed in the results. Layoffs may serve a short
term need, but create huge longer term issues. Few government
departments or branches have escaped the necessity of downsizing. The last
three or four years have brought almost constant cuts in staffing, and some
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departments have been "hit" several times. For many downsizing has become
an annual process. When managers are faced with downsizing, they tend to
focus on the immediate and practical needs that emerge at the time when staff
are being let go. After all, employees need to be selected and notified,
one of the most difficult tasks for any manager. Jobs responsibilities need to be
shuffled, and generally the period where downsizing is occurring is very busy and
emotionally taxing.
Unfortunately, there is a tendency for managers to focus on those that are
leaving rather than those that remain. This also holds true for central training and
consulting agencies who are asked to support the laid off employees with
career development help, counseling, and other supports. There is no
question that laid off employees deserve and need these kinds of supports and
services. Unfortunately, there is a tendency to forget that after the laid-off
workers are gone, the "survivors" must soldier on, and the manager must
deal with the long-term effects on the remaining organization. We are now
seeing the effects of downsizing on those that remain. One of the most telling
comments is often put forth by employees a year or two after downsizing,
and it goes like this: "Sometimes I think that the ones who were laid off are
the lucky ones". They usually go on to describe a workplace where employees
feel:
It is easy to understand these effects when they occur close to the
time when down-sizing occurs, and remaining staff "grieve" the loss of friends
and colleagues. But, these effects are now being seen as long as one or two
years AFTER the downsizing period. There are indeed long term effects of
downsizing that need to be addressed. Understanding The Organizational Down
cycle. To counter-act the long term effects of downsizing, managers need to
understand how organizations slip into "down cycles".
An organizational down cycle can be characterized as a long-term
process where the organization becomes progressively more depressed,
insular, protective and confused. The important thing to note is that this process
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occurs slowly, sometimes imperceptibly, and that if the process is allowed to
continue unchecked, it gets worse. The down cycling organization loses
its positive momentum and enthusiasm. A vicious circle is formed. It
snowballs. Bad feelings and depression become the norm rather than
occasional, until, in extreme cases, the organization becomes unable to move
effectively, and the work climate can become intolerable for everyone.
Because the process tends to be gradual, managers tend to assume that
the problems that occur early in the down cycling will solve themselves
without attention. It is easy to assume that staff will "get over" the effects of
downsizing over time. This may be the fatal mistake, because if the
process is left unmanaged, there is a good chance that staff will become more
demoralized.
1. Proactive management activities are always required when downsizing
occurs. Managers must realize that they "can pay now or pay later", and that
delaying actions designed to revitalize the organization will result in a huge cost
down the road. Managers should consider that the period immediately after
downsizing is critical. Action or inaction during this period will determine whether
the organization moves into a depressed down cycle, or makes the commitment
to move forward. Downsizing time should also be a time when the organization's
mandate and vision are revisited. It should be a time when the manager
dedicates him/herself to the long-term health of the organization by clarifying,
supporting and building trust. Above all, this is the time where the manager's
prime responsibility is to communicate, both with staff, and with executives. One
focus of communication should be clarifying mandate, vision, priorities and
commitment levels.
2. Proactive long-term approaches should also be applied by any central
agencies charged with "helping" downsizing organizations. Support should be
offered to those that are displaced, but, in the long term, help offered to
"survivors" will be much more important in determining organizational health. As
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a manager, ask, or demand that these services be made available by central
agencies, or procure them from private vendors, if the central agency won't do
the job.
3. If you are in the unfortunate position of managing an organization that is
"down cycling", you need to be aware of two things. First, it will get worse if
neglected. Second, interventions to turn the cycle around must be considered as
long-term projects. One shot consulting or training isn't going to do much, and it
may be damaging. Remember that your organization may have been moving
downward for a year or two, and that it is going to take a substantial period of
time to reverse the process. Positive change will require a consistent effort on
your part, and may require consulting help over a period as long as a year. Your
work success hint! Did you know that a high percentage of conflict at work and at
home is a result of ineffective use of language? It's true. The best part is that you
can learn to alter your communication and language so that what you say is
perceived as more cooperative, and less confrontational. The result? Less
conflict incidents and less severe conflicts.
Model of Planned Organizational Downsizing
Change can be managed. By observing external trends, patterns and
needs, managers use planned change to help the organization to adapt to
external problems and opportunities. When organizations are caught flat
footed, failing to anticipate or respond to new needs, management is at fault.
Four events make up the change sequence:
Internal and external forces for change exist
Organization managers monitor these forces and become aware of a need
for change; and
The perceived need triggers the initiation for change, which
Is then implemented.
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How each of these activities is handled depends upon the
organization and managers’ styles.
Forces for Downsizing
Forces for organizational change exist both in the external
environment and within the organization.
Environmental Forces
External forces originate in all environmental sectors, including
customers, competitors, technology, economic forces, and the international
arena.
Internal Forces
Internal forces for change arise from internal activities and decisions.
If top managers select a goal of rapid company growth, internal actions will
have to be changed to meet that growth.
Steps for Effective Organizational Change
The four steps for organizational change process are as follows:
Assess the need for Downsizing
Initiate Downsizing
Implement Downsizing
Evaluate the Downsizing
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Assessing the need for the Downsizing
The external and internal forces translate into a perceived need for
change within the organization. Managers sense a need for change when
there is a performance gap—a disparity between existing and desired
performance levels. The performance gap may occur because current
procedures are not up to standard or because a new idea or technology could
improve current performance.
Managers in every company must be alert to problems and
opportunities, because the perceived need for change is what sets the stage
for subsequent action that creates a new product or technology. Big problems
are easy to spot. Sensitive monitoring systems are needed to detect gradual
changes that can fool managers into thinking their company is doing changes
slowly, because managers may fail to trigger an organizational response.
Initiating Downsizing
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Assess the need
Recognize that there is a problem
Identify the source of the
problem
Initiate
DownsizingDecide what organizations ideal future state would
be
Implement
DownsizingIntroduce the
change
Evaluate the
Downsizing
Compare pre change
performance with post change
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After the need for change is perceived, the next part of the change
process is initiating change, a truly critical aspect of change management.
This is where the ideas are developed.
Search
Search is the process of learning about current developments inside
or outside the organization that can be used to meet the perceived need for
change. Search typically uncovers existing knowledge that can be applied or
adopted within the organization. Managers talk to friends and colleagues,
read professional reports, or hire consultants to learn about ideas used
elsewhere.
Creativity
Creativity is the development of novel solutions to the perceived
problems. Creative individuals develop idea that can be adopted by the
organization.
Each of us has the capacity to be creative. Creative people are often
known for originality, open-mindedness, curiosity, a focused approach to
problem solving, persistence, a relaxed and playful attitude, and receptive to
new ideas.
Creativity can be designed into organizations. Companies or
departments within companies can be organized to be creative and initiate
changes.
Idea Champions and New-Venture Teams
If creative conditions are successful, new ideas will be generated that
must be carried forward for acceptance and implementation. This is where
idea champions come in. The formal definition of the idea champion is a
person who sees the need for and champions productive change within the
organization.
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Personal energy and effort are required to successfully promote a
new idea. Often a new idea is rejected by the management. Champions are
passionately committed to a new product or idea despite rejection by others.
Implementing Downsizing
Creative culture, idea champions and new-venture teams are ways to
facilitate the initiation of new ideas. The other step to be managed in the
change process is implementation. A new, idea will not benefit the
organization until it is in place and being fully utilized. One frustration for
managers is that employees often seem to resist change for no apparent
reason. To effectively manage the implementation process, managers should
be aware of the reason for employee resistance and be prepared to use.
Techniques for obtaining employee cooperation are:
Resistance to Downsizing
Idea champion often discover that other employees are
unenthusiastic about their new idea. Members of a new-venture group may
be surprised when managers in the regular organization do not support or
approve their innovations. Several reasons for employee resistance are:
Self-Interest
Employees typically resist a change they believe will take away
something of value. A proposed change in job design, structure, or
technology may lead to a perceived loss of power, prestige, pay, or many
company benefits. The fear of personal loss is perhaps the biggest obstacle
to organizational change.
Lack Of Understanding And Trust
Employees often do not understand the intended purpose of a
change or distrust the intentions behind it. If the previous working
relationships with an idea champion have been negative, resistance may
occur.
Uncertainty
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Uncertainty is the lack of information about future events. It
represents a fear of the unknown. Uncertainty is especially threatening for
employees who have a low tolerance for a change and fear the novel and
unusual.
Different Assessment And Goals
Another reason for resistance to change is that people who will be
affected by innovation may asses the situation differently from an idea
champion or new-venture group. Managers in different departments pursue
different goals and an innovation may detract from performance and goal
achievement for some departments. The reasons for resistance are legitimate
in the eyes of employees affected by the changes. The best procedure for
managers is not to ignore resistance but to diagnose the reasons and design
strategies to gain acceptance by users. The strategies for overcoming
resistance to change typically involve two approaches: the analysis of
resistance through the force field technique and the use of selective
implementation tactics to overcome resistance.
Force Field Analysis
It’s the process of determining which forces drive and which resist a
proposed change. To implement a change, management should analyze the
change forces. By selectively removing forces that restrain change, the
driving forces will be strong enough to enable implementation. As restraining
forces are reduced or removed, behavior will shift to incorporate the desired
changes.
Implementation Tactics
The other approach to managing implementation is to adopt specific
tactics to overcome employee resistance. The following five tactics have
proven successful:
Communication and Education.
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Communication and education are used when solid information about
the change is needed by users and others who may resist implementation.
Education is especially important when the change involves new technical
knowledge or users are unfamiliar with the idea.
Participation.
Participation involves users and potential resisters in designing the
change. This approach is time consuming, but it pays off because users
understand and become committed to the change.
Negotiation.
Negotiation is more formal means of achieving cooperation.
Negotiation uses formal bargaining to win acceptance and approval of a
desired change.
Coercion.
Coercion means that managers use formal power to force employees
to change. Resisters are told to accept the change or lose rewards or even
their jobs. Coercion is necessary in crisis situation when a rapid response is
urgent.
Top Management Support.
The visible support of top management also helps overcome
resistance to change. Top management support symbolizes to all employees
that the change is important for the organization.
Evaluating the Downsizing
The last step in the change process is to evaluate how successful
the change effort has been in improving organizational performance. Using
measures such as changes in market share, profits, or the ability of manages
to meet their goals, managers compare how well an organization is
performing after the change with how well it was performing before. Managers
also can use benchmarking, comparing their performance on specific
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dimensions with the performance of high-performing organizations to decide
how successful the change effort has been.
Types of Planned Downsizing
Now that we have explored how the initiation and implementation of
change can be carried out, let us look at the different types of change that
take place in organizations. The types of organization changes are strategy,
technology, products, structure, and culture/ people. Organizations may
innovate in one or more areas, depending on internal and external forces or
change. In the rapidly changing toy industry, a manufacturer has to introduce
new products frequently. In a mature, competitive industry, production
technology changes are adopted to improve efficiency.
In the diagram, the arrows connecting the types of change show that
a change in one part may affect other parts of the organization: a new product
may require changes in technology, and a new technology may require new
people skills or a new structure.
Technological Downsizing
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Structure
Culture/ People
Technology
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A technology Downsizing is related to the organization’s production
process—how the organization does its work. Technology changes are
designed to make the production of a product or service more efficient.
How can managers encourage technology downsizing?
The general rule is that technology change is bottom up. The bottom-
up approach means that ideas initiated at lower organization levels and
channeled upward for approval. Lower level technical experts act as idea
champions—they invent and champion technological changes. Employees at
lower levels understand the technology and have the expertise needed to
propose changes.
Managers can facilitate the bottom-up approach by designing creative
departments. A loose, flexible, decentralized structure provides employees
with the freedom and opportunity to initiate continuous improvements. A rigid,
centralized, standardized structure stifles technology innovation. Anything
managers do to involve the grass roots of the organization—the people who
are experts in their parts of the production process—will increase technology
change.
New-Product Downsizing
A product downsizing is a change in the organization’s product or
service output. New-product innovations have major implications for an
organization, because they often are an outcome of a new strategy and may
define a new market. The introduction of a new product is difficult, because it
not only involves a new technology but also must meet customers’ needs.
Companies that develop new products usually have the following
characteristics:
People in marketing have a good understanding of customer needs
Technical specialists are aware of recent technological developments and
make effective use of new technology
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Members from key departments—research, manufacturing, marketing—
cooperate in the development of new product.
These findings mean that the ideas for new products typically
originate at the lower levels of the organization just as they do for technology
changes. One approach to new product innovation is called the horizontal
linkage model. In this model people from research, manufacturing and
marketing departments meet frequently in teams and task forces to share
ideas and solve problems. Research people inform marketing of new
technical developments to learn whether they will be good to customers.
Marketing people pass customer complaints to research to use in the design
of new products. Manufacturing informs other departments whether a product
idea can be manufactured within costs limits. This teamwork required for the
horizontal linkage model is a major component of using rapid innovation to
beat the competition with speed.
Structural Downsizing
A structural downsizing is a change in the way in which the
organization is designed and managed. Structural changes involve the
hierarchy of authority, goals, structural characteristics, administrative
procedures, and management systems. Almost any change in how the
organization is managed falls under the category of structural change.
Successful structural change is accomplished through a top-down
approach, which is distinct from technology change (bottom up) and new
products (horizontal). Structural change is top down because the expertise for
administrative improvements originates at the middle and upper levels of the
organization. The champions for structural change are middle and top
managers. Lower-level technical specialists have little interest or expertise in
administrative procedures.
If organization structure causes negative consequences for lower-
level employees, complaints and dissatisfaction alert managers to a problem.
Employee dissatisfaction is an internal force for change. The need for change
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is perceived by higher managers, who then take the initiative to propose and
implement it.
The top-down process does not mean that coercion is the best
implementation tactic. Implementation tactics include education, participation,
and negotiation with employees. Top-down change means that initiation of
the idea occurs at upper levels and is implemented downward. It does not
mean that lower-level employees are not educated about the change or
allowed to participate in it.
Culture/People Downsizing
A culture/people downsizing refers to a change in employees’ values,
norms, attitudes, beliefs, and behavior. Changes in culture and people pertain
to how employees think; these are changes are in mindset rather than
technology, structure, or products. People change pertains to just a few
employees, such as when a handful of middle managers is sent to a training
course to improve their leadership skills. Training is the most frequently used
tool for changing the organization’s mindset. A company may offer training
programs to large blocks of employees on subjects such as teamwork,
listening skills, quality circles, and participative management.
“Top 10” list of guiding principles for downsizing management,
some of steps that the company can take:
1. Address the “human side” systematically
2. Start at the top
3. Involve every layer
4. Make the formal case
5. Create ownership
6. Communicate the message
7. Assess the cultural landscape
8. Address culture explicitly
9. Prepare for the unexpected
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10.Speak to the individual
1. Address the “human side” systematically.
Any significant transformation creates “people issues.” New leaders
will be asked to step up, jobs will be changed, new skills and capabilities must
be developed, and employees will be uncertain and resistant. Dealing with
these issues on a reactive, case-by-case basis puts speed, morale, and
results at risk. A formal approach for managing change — beginning with the
leadership team and then engaging key stakeholders and leaders — should
be developed early, and adapted often as change moves through the
organization. This demands as much data collection and analysis, planning,
and implementation discipline as does a redesign of strategy, systems, or
processes. The change-management approach should be fully integrated into
program design and decision making, both informing and enabling strategic
direction. It should be based on a realistic assessment of the organization’s
history, readiness, and capacity to change.
2. Start at the top.
Because change is inherently unsettling for people at all levels of an
organization, when it is on the horizon, all eyes will turn to the CEO and the
leadership team for strength, support, and direction (govt. in case of PTCL).
The leaders themselves must embrace the new approaches first, both to
challenge and to motivate the rest of the institution. They must speak with one
voice and model the desired behaviors. The executive team also needs to
understand that, although its public face may be one of unity, it, too, is
composed of individuals who are going through stressful times and need to
be supported. Executive teams that work well together are best positioned for
success. They are aligned and committed to the direction of change,
understand the culture and behaviors the changes intend to introduce, and
can model those changes themselves.
3. Involve every layer.
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As transformation programs progress from defining strategy and
setting targets to design and implementation, they affect different levels of the
organization. Change efforts must include plans for identifying leaders
throughout the company and pushing responsibility for design and
implementation down, so that change “cascades” through the organization. At
each layer of the organization, the leaders who are identified and trained must
be aligned to the company’s vision, equipped to execute their specific
mission, and motivated to make change happen.
4. Make the formal case.
Individuals are inherently rational and will question to what extent
change is needed, whether the company is headed in the right direction, and
whether they want to commit personally to making change happen. They will
look to the leadership for answers. The articulation of a formal case for
change and the creation of a written vision statement are invaluable
opportunities to create or compel leadership-team alignment. Three steps
should be followed in developing the case: First, confront reality and articulate
a convincing need for change. Second, demonstrate faith that the company
has a viable future and the leadership to get there. Finally, provide a road
map to guide behavior and decision making. Leaders must then customize
this message for various internal audiences, describing the pending change in
terms that matter to the individuals.
5. Create ownership.
Leaders of large change programs must over perform during the
transformation and be the zealots who create a critical mass among the work
force in favor of change. This requires more than mere buy-in or passive
agreement that the direction of change is acceptable. It demands ownership
by leaders willing to accept responsibility for making change happen in all of
the areas they influence or control. Ownership is often best created by
involving people in identifying problems and crafting solutions. It is reinforced
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by incentives and rewards. These can be tangible (for example, financial
compensation) or psychological (for example, camaraderie and a sense of
shared destiny).
6. Communicate the message.
Too often, change leaders make the mistake of believing that others
understand the issues, feel the need to change, and see the new direction as
clearly as they do. The best change programs reinforce core messages
through regular, timely advice that is both inspirational and practicable.
Communications flow in from the bottom and out from the top, and are
targeted to provide employees the right information at the right time and to
solicit their input and feedback. Often this will require over communication
through multiple, redundant channels.
7. Assess the cultural landscape.
Successful change programs pick up speed and intensity as they
cascade down, making it critically important that leaders understand and
account for culture and behaviors at each level of the organization.
Companies often make the mistake of assessing culture either too late or not
at all. Thorough cultural diagnostics can assess organizational readiness to
change, bring major problems to the surface, identify conflicts, and define
factors that can recognize and influence sources of leadership and
resistance. These diagnostics identify the core values, beliefs, behaviors, and
perceptions that must be taken into account for successful change to occur.
They serve as the common baseline for designing essential change elements,
such as the new corporate vision, and building the infrastructure and
programs needed to drive change.
8. Address culture explicitly.
Once the culture is understood, it should be addressed as thoroughly
as any other area in a change program. Leaders should be explicit about the
culture and underlying behaviors that will best support the new way of doing
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business, and find opportunities to model and reward those behaviors. This
requires developing a baseline, defining an explicit end-state or desired
culture, and devising detailed plans to make the transition.
Company culture is an amalgam of shared history, explicit values and
beliefs, and common attitudes and behaviors. Change programs can involve
creating a culture (in new companies or those built through multiple
acquisitions), combining cultures (in mergers or acquisitions of large
companies), or reinforcing cultures (in, say, long-established consumer goods
or manufacturing companies).
9. Prepare for the unexpected.
No change program goes completely according to plan. People react
in unexpected ways; areas of anticipated resistance fall away; and the
external environment shifts. Effectively managing change requires continual
reassessment of its impact and the organization’s willingness and ability to
adopt the next wave of transformation. Fed by real data from the field and
supported by information and solid decision-making processes, change
leaders can then make the adjustments necessary to maintain momentum
and drive results.
10. Speak to the individual.
Change is both an institutional journey and a very personal one.
People spend many hours each week at work; many think of their colleagues
as a second family. Individuals (or teams of individuals) need to know how
their work will change, what is expected of them during and after the change
program, how they will be measured, and what success or failure will mean
for them and those around them. Team leaders should be as honest and
explicit as possible. People will react to what they see and hear around them,
and need to be involved in the change process. Highly visible rewards, such
as promotion, recognition, and bonuses, should be provided as dramatic
reinforcement for embracing change. Sanction or removal of people standing
in the way of change will reinforce the institution’s commitment.
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Most leaders contemplating change know that people matter. It is all
too tempting, however, to dwell on the plans and processes, which don’t talk
back and don’t respond emotionally, rather than face up to the more difficult
and more critical human issues. But mastering the “soft” side of change
management needn’t be a mystery.
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3. HABIB BANK LIMITED
3.1 Introduction
In any organization work force is considered the life blood. It down the
road, assumes various denominations, designations, attributes, powers,
meanings, strengths, weaknesses, psychological advantages against other such
small groups and some times produce animosity, cruelty, harshness, indifference
for other recessives subgroups.
The oft quoted feature usually appears in a large groups, institutions and
organizations working for a collective goal and targets. It is widely observed that
groups running various businesses at a time lack such transformation and variety
of organization psychological attribute. This is because in each individual working
wing of the group, a team spirit and sense of belonging among those wing
members appears. The two sister wings of a group may or may not conceive
each other as rival but they enjoy a sense of belonging among co workers in the
same wing.
For instance a large group (ATLUS GROUP) running insurance firm, bank,
car manufacturing plant, trades company with different names but under one flag
seldom, experience tension inside the workers of any single subgroup or wing.
They might develop a sense of advantage, depravity, professional rivalry against
other subgroup of the same entity.
For instance insurance sales executive team might feel inferior to car
sales team but among each individual team the strong sense of belonging binds
each other closely. As far as a large organization is concerned where whole work
force fall under same category with no water tight demarcation, a different
environment appears. For instance a very strong administrative control of few
executives yields the power circle, Then come supervisors that report directly to
administration, then comes the working group under different designations and
denominations
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In this case the think tank, planners and human resource staff work
independently keeping humane feelings for the junior cadre. In such an
organization, for instance a bank(HABIB BANK), sale force , marketing force,
consumer support executives , non clerical , clerical , officer cadre , and then
executives members constitute a team , a staff, a representative body and
assume a physical shape of the respective organization . At this point of time any
or all member reflects the behavior, temperament and stature of that
organization.
The behavior of sales representative is enough to work out the complete
hierarchical framework of the bank and same goes for any other institution. Blue
– collar jobs are not the only jobs being lost. During the last few years, thousands
of executives, managers and professionals have been laid off from their jobs as
companies streamlines, restructured, and downsized. About 85% of fortune
hundreds companies have downsized their white-collar workforce in recent
years.
The trend of downsizing, sometimes called rightsizing, reduction in force,
and restructuring will probably continue to impact managers and organizations
for a period of time.
Background
Downsizing is taking place in the public sector, private sector, non-
profit businesses, health-care, education and government in the whole world.
Business realities are making themselves felt throughout the corporate world.
Decreasing margins, global competition and customer expectations are
forcing the domestic banks and companies to look for ways to increase
productivity. Many think that downsizing in the domestic banking industry is
the panacea for all economic ills. Downsizing in the domestic banking industry
is a legitimate tool, but not necessarily the best choice for every circumstance
and economic ill. Governments may mediate the conflicting forces that prompt
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organizations to downsize, but they abort the fundamental dynamics at their
peril.
The severe competition, economic dependency and scarcity of
financial resources force the domestic banking industries, companies and the
governments to opt for the policy of downsizing. Many famous and big
multinationals like AT&T, The Bank of America, Kimberly-Clark, RJR Nabisco,
Xerox, IBM, US Air, Ford Motors, Procter & Gamble, Colgate-Palmolive and
PIA, WAPDA, Pakistan Railways, Banks and DFIs of the country are ready to
initiate a new round of downsizing.
The ultimate results of downsizing, rightsizing, restructuring or
reengineering differ from country to country and from organization to
organization. Some developing countries like Pakistan are adopting this policy
of downsizing because of the pressure of the international monetary
agencies. According to some economists, downsizing is a positive and
purposive strategy. It is a set of organizational activities undertaken on the
part of the management of an organization, and is designed to improve
organizational efficiency, productivity, and/or competitiveness.
It is evident that in Pakistan, downsizing is part of the overall
economic program that embraces deregulation and liberalization of the
economy, with a view to achieving higher growth rates through improved
efficiency and better services. It is also true that in Pakistan, downsizing is
integrated to the overall policy of privatization. The banking system of
Pakistan consists of a central bank, 4 nationalized banks, 2 denationalized
banks and 15 newly established private banks. They have been playing an
important role in the economic growth of Pakistan.
The expected policy of downsizing will damage the high standards of
efficacy, professional expertise, and rapidity of execution and overall
credibility of the government. There has been a ban on jobs in the federal and
provincial government departments from the early 1990s. This irrational policy
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may spoil the social fabric, economic prosperity and financial stability of the
general intelligentsia and banks alike.
In our country, the downsizing exercise was instigated in the public
banks and DFIs in 1997.The golden handshake scheme was offered to all the
permanent employees' at all hierarchical levels. The main philosophy behind
downsizing was to save Rs20 to 30 million annually. The IMF, the World Bank
and the State Bank offered to bear part of the downsizing expenses. As of
June 1998, a total of 22,642 banks/DFIs employees availed of the golden
handshake and the payment that was made to them was Rs29.1 billion.
Every country of the world is adopting policy of downsizing according
to its socio-economic needs and compulsions. Hasty and imported policy of
downsizing programmes can leave countries/companies with an atmosphere
of mistrust and insecurity. Downsizing is not the only solution for any radical
change in the banking sector of the country. In spite of downsizing of local
banks and DFIs, the recovery of stuck-up advances in full, strict enforcement
of credit, financial and administrative discipline, reduction of cost of financial
intermediation, payment of positive average real rates of returns to
depositors, removal of corrupt bankers and computerization to be taken.
According to ILO (1998), nearly 68 per cent of all downsizing, restructuring,
and reengineering efforts are not very successful all over the world.
In many cases, companies that downsized and restructured to
become more profitable and efficient have not achieved either. Instead they
have experienced tremendous fallout, especially in the areas of decreasing
employee productivity and morale, and increasing levels of absenteeism,
cynicism, and turnover.
The people of Pakistan are very emotional about their jobs and
organisations. They work hard for the betterment of their departments.
Therefore, the sudden downsizing would be a bolt for them. The major
economic conditions of Pakistan are not stable. There are huge internal and
external debts, regional disparity, massive unemployment, low mark-up
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structure, and deteriorating law and order situation, which is negating all the
efforts of the government for the quick economic revival and poverty
alleviation.
Unemployment is increasing, price hiking is a bitter reality, inflation is
on the move and industrial productivity is decreasing day by day. In this bleak
situation, the policy of downsizing in the domestic banking industry may add
fuel to the miseries of general masses and employees.
History
The Habib Bank Group is a leader in Pakistan's services industry. An
extensive network of 1450 domestic branches – the largest in Pakistan – and
25 international branches has enabled HBL to provide comprehensive
services that meet customer needs. This has ensured thriving client
relationships that form the backbone of the Bank's operations.
Today, HBL plays a central role in Pakistan's financial and economic
development. It has come a long way from its modest beginnings in Bombay
in 1941 when it commenced operations with a fixed capital of 25,000 rupees.
On 25th of August 1941, Habib Bank inaugurated its operations with the
bank’s first branch in Bombay.
Impressed by its initial performance, Quid-e-Azam Mohammed Ali
Jinnah asked the Bank to move its operations to Karachi after the creation of
Pakistan. HBL established itself in the Quid’s city in 1943 and became a
symbol of pride and progress for the people of Pakistan. Throughout the
decades, HBL has held the mantle of a dynamic leader, by adding value to
the lives of its customers
Habib Bank has been a pioneer in providing innovative banking
services. These have included the installation of the first mainframe computer
in Pakistan followed by the first ATM and more recently, internet banking
facilities in all its 1424 domestic branches.It was HBL that introduced products
such as Credit Cards, ATMs, Travelers Cheque, etc., to the Pakistani market.
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The Bank's towering presence in Pakistan's financial and commercial
life has remained unchanged over the decades. The strength of its brand and
image is symbolized by its prominent Head Office building that has dominated
Karachi's skyline for 35 years. Bank continues to build on its track record and
in its quest for excellence it strives to meet the needs of both its customers
and its employees. Habib Bank aims to ensure customer satisfaction by
providing high quality banking services. This is made possible by the
professionalism of its employees all of whom are provided with the requisite
training and opportunities to enable them to realize their full potential.
The Government of Pakistan privatized HBL in 2004 through which
AGHA KHAN FUND FOR ECONOMIC DEVELOPMENT (AKFED) acquired
51% of the Bank's shareholding and management control. With a presence in
25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal,
Nigeria, Kenya and Kyrgyzstan and rep offices in Iran and China, HBL is also
the largest domestic multinational. The Bank is expanding its presence in
principal international markets including the UK, UAE, South and Central
Asia, Africa and the Far East.
Key areas of operations encompass product offerings and services in
Retail and Consumer Banking. HBL has the largest Corporate Banking
portfolio in the country with an active Investment Banking arm. SME and
Agriculture lending programs and banking services are offered in urban and
rural centers.
Economic activities both for the Govt. & affectees. In less than three
weeks that fell between August 22 to September 13 a total of 6,495 executives
and officers were retired by the Habib Bank Limited and United Bank Limited.
The downsizing exercise initiated by HBL on the 22nd of last month and
followed the UBL on the 13th of the current has now spread to National Bank
of Pakistan which has offered voluntary retirement scheme to all its workers.
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Departments of HBL
There are few departments on which general or day to day banking
of HBL composes. There details are as under:
1. Deposit department
2. Clearing Departments
3. Inland Remittance Department Bills Departments
4. Advances Departments
5. Cash department CD Department
6. Foreign Exchange Department
3.2 Vision
Enabling people to advance with confidence and success.
3.3 Mission
To make HBL Investor (s) prosper, our staff excel and to create value for
our stakeholders.
3.4 Values
Our values are based upon the fundamental principles that define our
culture and are brought to life in our attitude and behavior. It is our values that
make us unique and stem from five basic principles.
3.5 Products Offered by HBL
Tele-printer service
Introduced in 1952, this system helped the Bank to improve its
services.
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Rupee Traveler’s Cheques
It was introduced in 1957. Here the customers are provided the
facility of encashment of their traveler’s cheques through any branch of the
Bank.
Small Factory Owner Scheme
In 1959 the Bank offered loans to small scale producers under the
“small factory owner scheme” in order to boost the economy of Pakistan.
Foreign Tele Printer Service
It was introduced in 1961. The idea behind this scheme was to
provide quick and prompt Banking services to customers in foreign countries.
Gift Cheques Schemes
It was launched in 1962. Under this scheme, the Bank provided
customers with pre-printed cheques of various denominations which could be
used to send gifts to their loved one on various occasions.
School Banking
This scheme was introduced in 1962 to provide Banking services to
children in a number of schools though out the country.
Drive in Banking
HBL established “Drive in” branches in 1962 at various major cities of
the country where the customers could avail Banking services without getting
down from their vehicles.
Mobile Banking
It was introduced in 1962. The feature of this scheme is to provide
Banking services to the customers residing in the rural areas.
Night safe Scheme
In 1962 the Bank offered facility to their customers to deposit their
valuables at night in specified branches of the Bank.
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Computer accounts
In 1962 the Bank introduced computer accounts through which most
of the accounts in head office were computerized
Computer Prize Bond
It was introduced in 1966. It is a scheme through which prize could be
declared for prize bond scheme.
Credit card scheme
It was introduced in 1966 through which customers could get certain
sum of money from specified branches. Many business organizations
accepted payments through valid credit cards.
Infant Saving Scheme
In 1968 the Bank offered infants to open saving accounts operated by
their parents/ guardians.
Courtesy Card
It was launched in 1968 through which the customer could be
introduced to other branches in the country.
Deposit growth certificate
This scheme was introduced in 1975 with increase rate of interest.
Special five years deposit certificate
This scheme was introduced in 1975 where the major emphasis is on
increased rate of interest.
Dollar traveler cheques
Introduced in 1976, the scheme was more helpful and safe for the
travelers than carrying foreign currency notes.
Hajj accidental death scheme
Introduced in 1983, according to this insurance scheme, if a Hajji who
has submitted his Hajj application through HBL died while he was away for
performing Hajj, his family was to be provided a certain sum of money.
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Auto Cash Teller Machine
Auto cash machines are installed in 1988 at various branches which
allows customers to withdraw cash round the clock and on all days of the
week.
Transport Finance Scheme
In 1989 the Bank in order to decrease unemployment in the country
introduced owner, driver taxi finance and scooter loans. According to this
scheme they were provided loans on soft terms.
Gold card system
In 1991 HBL introduced the scheme with the features of offering card
holders to get up to Rs. 10,000 at a time.
Muhafiz Rupee Traveler Cheque
It was introduced in 1998. A cheques available in denomination of Rs.
10,000, 25,000, 50,000 and 100,000 with the advantage of 100% free
purchase and encashment
Distinct Properties of Muhafiz
It can be issued from more than 700 branches all over Pakistan. Muhafiz provides the facility of payment in all branches of HBL. There is no commission and fee charge for purchase of Muhafiz
HBL keeps alive the tradition of “Serve you better” charges nothing for the purchase
and sale of Muhafiz.
INNOVATIVE PRODUCTS
House Finance
HBL provides the facility of house finance: Financing available for:
1. Purchase of house
2. Home improvement and renovation
3. Self Construction
Some characteristics of House Finance of HBL Are:
Lowest marl-Ups leading to affordable monthly installments
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5 years fixed Rates/ one year Floating Rate available.
Lowest processing charges
Financing tenures ranging from 3 to 20years.
Financing limits of up to Rs. 7.5 million (Rs. 3.0 million for
Home Improvement/Renovation)
Quick Processing
Auto Finance
Habib Bank Auto Finance, a lease product, designed to offer you an
economical way for owing the car of your choice.
Some characteristics are:
Lowest Down Payment
Lowest monthly rentals
Fixed repayment tenures of 36,48and 60 months.
Lowest Processing charges
Insurance premium rates as low as 3%
World wide personal accidental insurance coverage of up to
Rs. 200,000.
All locally assembled new cars can be financed through this
scheme
HBL Flexi Loan:
HBL had introduced a unique loan system for the middle income
serving people in various public sectors. It is basically meant for those in
service people who earn more than Rs. 5,000 per month. This loan meets the
petty requirements of the salaried class. Since the introduction of this scheme
Rs. 6 billion is advanced throughout the country. The maximum limit of this
loan is Rs. 3,000,000.
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Life Style
Habib Bank Lifestyle is an economical financing scheme for
Household Appliances and consumer Electronics. Salient features of HBL
LIFESTYLES:
Loans for salaried/ self Employed individuals or business
persons
Low Mark-ups leading to affordable monthly installments.
Financing from Rs.10,000 to Rs.500,000
Fixed tenures of 6,12,18,24 and 36 months
Low Processing charges
Full credit Life Insurance
Free Doorstep Delivery of items
Available throughout Pakistan from over 330 designated
Habib Bank Branches
HBL Rescue
(Balance Transfer Facility) HBL provides the facility to transfer your
personal loan and credit card liabilities, at the lowest rates ever.
For Personal Loans
Maximum loan up to Rs. 1,000,000
Choice of 12,24,36,48 and 60 months for payback
Lowest Mark- up
Quick processing
Full Credit Life insurance
Available from over 400 designated branches throughout
Pakistan
For Credit Card Payments
Maximum loan up to Rs.1,000,000
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Lowest mark-up-compared to any credit card
Choice of 12,24,36,48 and 60 months for payback
Quick processing
Full Credit Life insurance
Available from over 400 designated branches throughout
Pakistan
Auto Cash (Debit/ ATM Card)
Habib BANK icard is used for dual purposes-a debit card and an ATM
card and provides u the direct access to cash in your account.
Habib Bank icard as your Debit Card
When payment is made at any merchant location using the card ,
exact purchase amount is deducted from your account. Convenient, secure,
quick and easy payment option Nationwide acceptability at various merchant
locations displaying ORIX Network logo Free of charge debit card
transactions
HBL iCard as your ATM Card
Offer a number of facilities such as cash withdrawal, Funds transfer
between accounts, Balance Inquiry, Mini Statement, PIN Change etc.
Accepted at all 1LINK and MNET ATMs across the Country.
HBL Easy Access
Online access to banking services at over two hundred branches in
Pakistan
HBL Fast Transfer
A unique solution for overseas Pakistanis to send money back home
in a swift and convenient manner.
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Haryali Agricultural Loans
It entails all kind of agricultural finance facility for the rural market.
HBL E-Bank
It provides services via a dedicated communication link on the
internet. The E-Banking services provide “anytime, anywhere” banking to all 5
million customers. This service, designed to be user friendly, assures secured
access and confidentiality.
SWIFT
The bank is a major SWIFT user in 70 domestic branches & 21
overseas countries / locations in the network. SWIFT services are being used
for funds transfer, remittances and trade related transactions, resulting in
major improvement in payment processing capability for enhanced customer
service.
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4 . DOWN-SIZING
4.1 Golden Handshake Scheme
The scheme offers a unique opportunity to boost long term investment & A
similar scheme has also been offered by one of the Development Financial
Institutions, the Agriculture Development Bank of Pakistan (ADBP) and is
expected to be followed by other DFIs soon. Besides, HBL also offered all 30,000
of its workers and staff a voluntary golden hand- shake scheme and though the
HBL president, Shaukat Tareen expected that 10,000 employees would avail the
offer, PAGE has learnt that only 6,500 HBL employees have applied to take
advantage of the offer. On the other hand, the president of UBL Zubyr I. Soomro
has said that the downsizing in UBL is completed and there would be no
more retrenchment, mandatory or voluntary, at UBL.
Among reported 11,000 employees of the Habib Bank facing the axe of
downsizing, as many as twenty-five sportsmen will lose their job, but the officials
insisted the mass-scale retrenchment would not affect their cricket, hockey and
football teams.
4.2 Conflict Management
Major Type of Conflict in HBL
Most of the major conflicts in HBL belong to the category of policy
driven conflicts. After privatization of HBL, it had a major change in its
structure and policies. This change was necessary to overcome key problems
associated with the structure of the public owed company such as:
Over Staffing
HBL before privatization had more than 31000 employees,
management and non- management, they aimed to reduce this number to
27000 employees with the help of its new policies.
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Political Pressure
Before privatization HBL was highly influenced by the governmental
policies as it was the largest financial institute under government control. The
economic policies of the country were also affecting the bank’s policies. The
problem occurred mainly because of the unstable political situation in
Pakistan which was causing the huge fluctuations in governmental policies
resulting in the inconsistency of HBL’s policies which led to the inefficient
results. The motive of privatization was to make HBL as independent as
possible.
The Conflict
Drastic transformation from public owned to private company gave
origin to resistance from the employees as a sudden change in structure was
unacceptable to them as they were used to work with previously defined
policies and system. It was hard for the employees to accept the new policies
and overall system, they resisted as they felt that new policies were not
employee friendly and this clash of interest ultimately resulted in conflicts.
Example: HBL’s re-entrenchment program was one of the bones of
contention between the employees and the management. HBL’s aim was to
create space for more non operational non clerical, technology savvy staff to
generate more effectiveness they aimed to remove the permanent clerical
staff and get them on contractual basis. This sudden change generated the
feeling of uncertainty and disrespect among the employees and resulted in a
huge retaliation. HBL however provided them with compensation, packages
and even provided them new jobs in other organizations but despite these
efforts to gain the satisfaction of employees failed to gratify employees and
there are still few cases in litigation.
Other issue
In 2002: HBL employees perceived that it is their right that their child /
children get employed at HBL but HBL followed merit based system and they
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were interested in hiring skilled employees to satisfy the company’s as well as
stake holders’ expectations.
4.3 Dispute Resolution Process
Negotiation:
The Senior Vice President of Human Resource Management and
Head of disciplinary department, Mr. Amin-ul-Huda Khan undertake the
negotiation process. The representatives of the affected department approach
Mr. Amin-ul–Huda and put forward their point of view that usually is against
the management. Mr. Amin uses his experience and expertise to minimize the
conflict and to achieve the BATNA (Best Alternative To a Negotiated
Agreement). He makes the employees agree to most of his demands if not all
he drags the employee to agree on two or three points at least by making
employees compromise on most of the issues. His preference remains that
management by any means should not compromise and if incase he fails to
do this he moves to the next phase that is of mediation.
Mediation:
Despite trying hard, when the negotiation process fails HBL goes for
the mediation process, where the role of an effective, neutral mediator comes
in who acts as a communication bridge between the management and the
employees. Usually the mediator is in HBL is a trusted manager popular
amongst both employees and managers HBL’s mediation process can be
broadly divided into the following three stages:
Stage 1: Introduction and establishment of credibility: During the first
stage, the mediator plays a passive role. The main task is to gain the trust
and acceptance of the conflicting parties, so that they begin to believe that
he/she will be capable of assisting them fairly as a person on whom they can
rely at all times for this purpose HBL chooses a mediator with the mutual
consent of employees and the management. Mediator in HBL is usually an
internal, neutral person trusted by both management and employee. He
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leaves most of the talking to the disputing parties, but listens attentively and
asks probing questions to pinpoint the causes of the dispute, obstacles to a
possible settlement and to identify the issues in order of priority. Once
credibility is achieved and sufficient background knowledge gained, the
mediator may begin to persuade the parties to resume negotiations, possibly
with a fresh perspective.
Stage 2: Steering the negotiation process: In the second stage, the
mediator intervenes more actively in steering the negotiations. He/she may
offer advice to the parties, attempt to establish the actual resistance point of
each party and to discover areas in which compromises could be reached.
The mediator encourages parties to put forward proposals and counter-
proposals and (when a solution appears feasible) will begin to urge or even
pressurize the participants towards acceptance of a settlement.
Stage 3: Movement towards a final settlement: In the final settlement
the mediator decides to finish the matter quickly, he/she uses bi-lateral
discussions with individuals or groups and during the final stages may
actually suggest or draft proposals for consideration. In the event of a final
settlement being reached, the mediator assists the parties in the drafting of
their agreement, ensuring that both sides are satisfied with the wording, terms
and conditions of the agreement.
Arbitration:
When even mediation fails to work for HBL it goes for arbitration. The
delay in court cases has always been a source of concern to HBL as this
impacts the enforceability of contracts. As most of the conflicts are policy
driven HBL’s utmost priority is to enforce those policies on employees at any
cost and without compromising when all the methods fail to achieve this
purpose, HBL goes for arbitration with the consent of employees and make
them realize that it was important for the benefit of organization. Arbitration is
used in HBL because arbitration awards are generally easier to enforce than
court judgments.
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Litigation:
HBL has lawyers who take care of its legal formalities. HBL believes
that even if the conflict gets failed to resolve and the employees file a lawsuit
against them the management is least bothered about it because it believes
that employees don not have enough resources to fight in the court where as
HBL pays a fee of about 400000 Rs to their designated lawyers who are
expert in dragging the time of the hearing and making employees willingly
take the case back. According to Mr. Amin ul Huda they still have cases in
litigation and none of them yet got resolved or turned out in the favor of
employees.
Problems in Dispute Resolution Process at Habib Bank Ltd:
Having a conflict is not anything uncommon in an organization being
a system comprising of many parts and subsystems that are all interlinked
and interconnected. In a multinational like Habib Bank ltd, the enormous level
of activity giving rise to one or the other major or minor conflicts in forms of
either functional or counterproductive cannot be ignored. However, since
functional conflicts do not need any treatment with a resolution process they
are the destructive ones that actually demand such a process and above all
effective management of that very process too.
Habib bank is an organization comprising of various branches and
networks thus conflict at each level is unpredictable and hard to surface
without proper management intervention. But while analyzing their dispute
resolution system, various bottlenecks and hindrances were found that
actually make initially the application of such a process and then the effective
result of it to spread and bring benefit for the organization in the future.
There are a variety of problems that were explored while analyzing
the dispute resolution process at HBL.
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Failing To Minimize the Overall Level of Conflict
Firstly, the resolution process although aimed at minimizing the
overall level of conflict but it was not fulfilling its purpose and was not able to
minimize the overall level of conflict giving rise to other more severe conflicts.
Therefore, it can be said that the resolution process did not completely satisfy
the interests of all the parties and when at one hand it managed to satisfy one
stakeholder, left dissatisfactory results for others or the organization itself.
Example at the time when organization made a decision to go for downsizing,
their major concern was to make redundant lower level staff i.e. drivers,
peons etc to hire a better, more skilled personnel at the same rate so that
they can offer more to the organization since the lower level staff was being
hired at a rate far above the market rate increasing costs for the organization.
Lack Of Pre And Post Dispute Analysis:
HBL lacks a pre and post dispute resolution analysis this means that
there is no analysis or interpretation of where the organization wanted to be
and where it actually is after implementation of the process of resolution and
there were no proper guidelines giving directions to take about the conflict
resolution process. Hence, this resulted in failure in having effective resolution
process and there was no proper comparison or evaluation of whether the
organization has achieved its desired state can be done giving a rather blur
picture to both employees and management and leaving them confused
about whether implementing such a process is cost and time worthy in the
future since they do not know the pros and cons of this system.
For example, when HBL decided to downsize and make certain
employees quit, they were not completely sure of whether doing so is likely to
give them the desired outcomes rather they were just hitting the ball
blindfolded and simply hoped to achieve what they want .furthermore, when
HBL went towards retrenchment, and successfully but with great difficulty
achieved it, managers did not do any proper formal analysis with the top
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executives of what were the difficulties they faced and how to make sure they
do not reappear in the future when they take such a crucial action. Also, there
was no evaluation of results the conflict appearing from retrenchment brought
to them. Moreover, no analysis of how to implement safety measures to avoid
facing the same conflict again was done.
Resolution Process Caused Even More Conflicts
Apart from this, the resolution process instead of satisfying all the
affected parties at the end brought more dissatisfaction and complaints at its
end making managers feel the loss of time HBL have invested while engaging
in resolving conflicts when at the end it brought no fruitful results for either the
employees or HBL.
Failed To Foster Long Term Relationship
As the process did not manage to satisfy all or most of the parties
and caused more conflicts in return, it became a basis for more personal
conflicts among individuals which adversely affected the work relationships
and the organization’s productivity as a result. Therefore, the process did not
promise to foster effective long term relationships among colleagues giving
rise to feelings of hatred and emotional disparity among employees in the
same department or between an employee and manager.
Example, in the case of HBL’s formal dress code policy, the manager
pointed out an individual in front of his junior colleagues making him feel
insulted and hating the manager for doing so, causing him to feel demoralized
to perform any task given by the manager with eagerness and finding ways to
back bite and bad mouth the manager with other employees.
Difficulty in Challenging Management
The dispute resolution at HBL does not assure management that
employees can safely and effectively challenge management. This is because
such an act is not possible with employees who do not have enough
resources or power to raise a voice making them insecure of their own jobs.
moreover employees have a great degree of fear in their minds of
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authoritative management situation which does not aim at collaboratively
discussing issues and then implementing an offer or demand rather just order
employees in shape of surprises or written messages .Therefore, employees
do not have a say in their own organization and this fear and lack of
understanding with HBL’s management leave most of the conflicts un
surfaced and unresolved portraying a fake picture of happy and content
employees towards management.
Lack of Employee Empowerment
Because employee empowerment was lacking, the employees do not
feel the need to contribute towards the organization benefit and just work for
the sake of securing their jobs, positions and dignity among others since
raising a voice means openly exposing themselves to chances of being
dismissed or transferred.
Lack of Effective Communication
Lack of Effective communication is another problem that makes
dispute resolution at HBL inappropriate and unsatisfactory. A classic example
was seen at two events.
Firstly, due to lack of communication in HBL among departments
regarding the code of ethics and specifically organizational culture, most
managers of HBL Sukkur branch, were being seen to wear shalwar kurta and
having tea while sitting on the floor giving rise to an immediate clash of
opinion between the directors and those managers. Therefore, no or
miscommunication left un-uniformity among the different branches of the
same bank.
Secondly, on the occasion of employee redundancy due to
downsizing, employees got mixed messages of them being departed from
their organization in the form of rumors and ‘grapevine’. Hence, this resulted
in lack of trust in management for the employees who were being affected
and also for those who were not making them feel the next to become the
culprit of management sudden decisions and surprises. Such distorted
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communication channels lead to employees giving different meanings to the
same picture since every organization comprise of diverse mental filters
causing more conflicts at personal level between employees .
Inflexibility of Application
Similarly to the problems above, inflexibility of application and
allocation of rewards, application and policies was another factor of
disturbance in the process. Employees do not know what HBL’s management
expects of them at certain events and therefore most of the employee’s only
aim to work at moderate performance levels since management’s criteria of
reward is unpredictable like the management itself. Therefore, people do not
want to work hard and get no return rather they find it better to work
consistently at a medium pace and not being rewarded which would at least
not demoralize them at the end.
Poor Application of Resolution Procedures
Moreover, poor application of resolution procedure, that is in areas
only where management feels it is important is another problem. HBL’s
managers just believe what they see and see what they believe and start
resolving and working on it by simply forcing employees to follow what it
dictates without welcoming any feedback, opinions or suggestions from
employees being the other half that makes up the organization.
Example, during the union negotiation sessions, the union
representations are forced to agree on management’s choices and issues
through a sound mediator whose popular and in good books of all employees
and someone who the employees look up to so that management can get the
other party convinced at its point on emotional grounds and can satisfy its
demands at the cost of leaving its workforce feel dissatisfied and simply being
won on emotional rather than professional grounds.
HBL Did Not Involve Employees In Policy Implementation And It
Amplifies Problems In Dispute Resolution Processes Of HBL
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While resolving conflict HBL did not balance competing interest of
both the organization and the employees and the senior managers
specifically were not collaborating with the employees to present the best
opportunity to meld them in ways that are mutually beneficial for both the
system and the employees. They were not willing to contribute their
information, expertise and energy in order to give benefit to each other while
resolving conflict due to which many problems arises in dispute resolution
processes of HBL. The management did not allow employee participants to
get involved in the process of implementation of policy and due to which
employees did not gain a better understanding that why management were
implementing this policy, what was the goal of the organization and what will
be the future outcomes after implementing this policy. While resolving conflict
management does not allow employees to challenge conventional wisdom
and management’s mental models by participating in dialogue and employees
were not able to convey their view of what really goes on in the workplace
and what issues are real and not real.
When the dispute resolution process persisted, management did not
effectively communicate the result to all employees due to which they were
unable to understand the extent or level of reduction in conflict. Moreover,
while resolving conflict at HBL, their management did not conduct employee
surveys that request written input on the issues being considered in the
dispute resolution process and did not give emphasis to employee focus
groups that facilitate discussion of the issues being considered and did not
invite oral feedback from employees about their perception in the whole
dispute resolution process.
Policies Were Not Updated And Employees Were Not Well Aware
About The New Policies In HBL.
The workforce and the nature of work have changed dramatically in
HBL over the years, and they continue to change with the increasing speed
more specifically in banking sector but HBL did not keep their employees well
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informed about the new policies. The management of HBL did not address
the changing need of employees in their policies due to which further conflict
arises. The managers and policy administrator did not continually implement,
administer and reexamine and change all of an organization’s policies by
keeping in mind the changing needs of employees with the passage of time
and with the ups and downs in the economy but rather than that they just
focus on the company’s interest and the growth of the organization and did
not update policies at the exact time when it was actually needed. The
policies did not intend to ensure workplace effectiveness, justice, fairness and
peace among the employees at HBL because the management did not
update policies when needed.
Management At HBL Did Not Balance Forces For Change And The
Forces For Stability While Resolving Conflict
In the dispute resolution process of HBL management just focuses on
forces for change and did not focus on balancing the forces for stability as
well. When the management did not focus on balancing both the forces, it
takes too much time to resolve conflict because the forces for stability are at
one side and they continuously make effort not to adopt changes at HBL
whereas HBL wants to achieve its target by mainly focusing on forces for
change and they surprise employees while announcing the policy and did not
give acceptance time to employees. In resolving conflict, the drive to change
did not exceed the target’s resistance and did not create a disequilibrium that
unfreezes the status quo. While resolving conflict, the resistance which is the
action of the targets to maintain the status quo further increases.
Employees Misunderstand the Facts
When management resolves conflict, due to miscommunication in the
dispute resolution process employee misunderstand the facts and further
resistance arises when employee have incorrect perceptions and
misunderstandings about whether a change is good or bad for them. The
employees have different information that management has. Because of a
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closed style, poor communication and negligence in the dispute resolution
processes, management did not involve employees in the decision process or
did not share with them all the information behind a planned change due to
which further misunderstanding arises in the dispute resolution system of
HBL. And when employees did not have a clear picture about what was going
on in the organization they were more likely to assume the worst and resist.
When sometimes management shared a little bit information about the
change, employees also did not believe what they hear because of a lack of
trust in the management of HBL.
The Management Of HBL Did Not Conduct An Appropriate Discharge
Discussion: They did not conduct such discussion in which the employee is
advised of his discharge is the single event most likely to occur in order
reduce the cost and for the long term growth for the organization. In the
dispute resolution process, the person holding the discussion was not fully
trained and the meeting was not be carefully planned often scripted and
rehearsed because the senior manager did not fully aware about the facts
and reasons behind the conflict. They did not use person to person
discussion when advising individuals of a dismissal for downsizing instead
they use a hybrid of both phone call and other impersonal communication.
While resolving conflict, the senior manager did not directly get to the point
and present the bad news and they did not stated the reason for the
termination in a few short sentences and did not tell the person that he has
been terminated due to which the expectation level of employees further
increases.
The management cop out and make the discharge seem unjustified
in an effort to avoid hard feelings. The management of HBL also did not listen
to what the employees has to say and answer their questions honestly and
concisely. The management while resolving conflict did not explain initially all
severance details about how long the employees will be paid, how insurance
will be handled , references, outplacement services and other information of
importance the employee being discharged. They did not even explain the
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exit procedures such as when and how the employee should vacate the
workplace.
No Job Security for the Employees
In the past, employment at HBL was typically seen as long term
relationship between HBL competing in expanding markets and hourly wage
workers or salaried managers. But today’s employment relationship at HBL is
very different. Increased participation of young workers and fresh graduates,
the prevalence of part-time or temporary workers, increased risk of
permanent job loss, and other similar factors have changed the basic
employment contract and introduced continuing uncertainty into the
employment relationship for the remaining employees after retrenchment as
well due to which problems arises in the dispute resolution system and the
main problem is that while minimizing conflict, another issue of job security for
the temporary and for the remaining employees arises as well.
Management Did Not Provide Proper Confidential Avenues (No
Proper Counseling or Discussion Platform)
Management of HBL did not ensure that the dismissal discussion
itself was private means that it was not conducted behind closed doors but
also handled so that employees in general do not know it was taking place.
The management did not carefully consider that what information was to be
shared with the remaining employees, who have a legitimate interest in what
has happened. Employees did not believe that the dispute resolution
processes will foster fair resolution of the process and fulfill their rights.
Management of HBL Did Not Make a Disciplined, Balanced
Discharge Decision: Employees felt that supervisors and managers forgot
about their feelings and they thought only about the interest of the
organization while resolving conflict. Other managers fail to take needed
action because of the potential cost and disruption to the organization. While
resolving conflict, delaying appropriate discharge allows bad behavior to
spread to others, impacting the broader organization performance. The
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management did not thoughtfully balance the potential pros and cons of
dismissing employees while resolving conflict. In the dispute resolution
process, the management did not ensure that affected employees have an
opportunity to present their case, with help from an employee union
representative if requested. Initially the management did not clearly articulate
a defensible reason for all dismissals. The management did not provide for a
pre decision review by higher levels of management, a peer committee,
external lawyers, or other knowledgeable individuals.
No Proper ADR Policy:
There was no formal ADR policy statement at HBL that establishes
the rules for resolving disputes, provides due processes, and fosters a full
understanding of the dispute resolution options available to the organization’s
employees and because of this further problem arises in the dispute
resolution system. There was no fair and impartial investigation of disputes.
Rationalization Of Human Resource Is Done By HBL.
Major conflict at HBL: Overstaffing
Major conflict that arose was of overstaffing. HBL was then very
much concerned not to supply too many employees. Overstaffing can create
problem in ways that a work of 1 person is done by many people, also
resources and other possessions are spent on them, which is a waste, so
downsizing was needed at HBL. Overstaffing can become the reason of de-
motivation, ultimately affecting the core objective of the organization that is
maximum profitability as it increases cost. (Example of other government
owned institution is PIA)
Feedback Cycle: Different Inputs.
Arbitration: Arbitration did not exist with this particular name at HBL
but do work with this unorganized way. The appointment of an independent
person to act as an adjudicator (or judge) in a dispute, to decide on the terms
of a settlement. Both parties in a conflict have to agree about who the
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arbitrator should be, and that the decision of the arbitrator will be binding on
them all. Arbitration differs from mediation and negotiation in that it does not
promote the continuation of collective bargaining: the arbitrator listens to and
investigates the demands and counter-demands and takes over the role of
decision-maker. People or organizations can agree on having either a single
arbitrator or a panel of arbitrators whom they respect and whose decision
they will accept as final, in order to resolve the conflict. Arbitrator is a legal
person and his decision will be followed by both employees and
management.
CBL Negotiations: If arbitration fails, HBL goes for negotiations:
Official negotiations are also done at HBL, when things get out of control or
are not solved through arbitration. Depending upon the situation and time,
the way the negotiations are to be conducted differs. The skills of negotiations
depend and differ widely from one situation to the other. Negotiation process
takes one month at HBL. It is at times beneficial in the organizations in order
to resolve conflicts.
Types of Conflicts at HBL:
Pay raise issues mostly create conflicts, when bonuses, rewards are not
given at proper time and in proper amount. These kinds of problems also
rise because of the inflation
KESC employees (around 7000 employees) argued for their right, but
government did not support them. i.e. a difference of interests and rights
or "Disputes of right" and "disputes of interest"
These all issues occur in transactional activities. Such as in systems,
policies, procedures and climates at HBL. Transformational are like major
conflict emerges, and cultural values are involved here which creates
conflicts.
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Downsizing:
In 1997: 29000 employees were working at HBL they were
downsized to 13000; the case is in litigation now. In organization they have
complex and heterogeneous structure. In these cases HBL has no issues or
problems because a certain amount goes to the company’s lawyer every
month, and he handles the case. But the people involved or individuals seek
difficulties because lawyer’s fees are expensive and they can’t afford these
fees for too long.
Re-entrenchment:
In 2007: Conflict because of re-entrenchment occurred that was
attempted to be minimized by offering various packages and incentives for
the employees. Means people were given incentives and other facilities or
other job opportunities and were asked to leave jobs from HBL.
Employees’ expectations from management:
In 2002: HBL employees perceived that it is their right that their child /
children get employed at HBL but HBL followed merit based system and they
were interested in hiring skilled employees to satisfy the company’s as well as
stake holders expectations. And that’s the right choice, because if they
started hiring on sources HBL will be biased at hiring employees, instead the
best way is to hire on merit, who are more capable candidates.
MCB and UBL transformed but they overcome their conflicts less
than HBL, HBL is growing transformational 10% more than them because
they re-entrenched the employees very peacefully gave incentives and
bonuses.
Reason for entrenchment:
Driver’s salary exceeded Rs.20000. This is wrong because an MBA
now a day’s hardly gets a job of Rs. 10000, and a driver was given Rs.20000,
which is a big difference. So it was decided after downsizing that the driver’s
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salary will be included in each executive’s salary, and now it’s his choice to
hire a driver or not, and that driver’s salary is around Rs.7000.
Competing Internationally:
One of the reasons for HBL was also that HBL competes
internationally that is why it has to hire skillfully appropriate workforce and for
that they need to create space to accommodate them. HBL manages conflicts
better than other companies.
Outsourcing of Employees:
Employees such as peons, guards, and drivers were outsourced from
another company. This is because in order to avoid conflicts in a way that nor
there will be a similar staff nor there will be groups, and there will be least
probability of conflicts arising.
Management’s Role in resolving conflicts:
Management at HBL is involved and is a key role player in surfacing,
handling and resolving conflicts at HBL at group, individual and organizational
levels. This also gives rise to and also encourages a collaborative stage,
where everyone at management level is involved in resolving conflicts and
also parties involved are asked for feedbacks and suggestions.
Mediation after negotiation:
Mediation takes place after negotiation, if employees resist accepting
new terms and sticking to two or three points. This takes place when
employees and groups are not at all ready to accept the decisions of the
management and they call for strikes, threats etc.
The Mediator:
Then mediator talks or deals with him on the basis of his talent,
personality and skills. Mediator in HBL is a well known and popular among
both employees and management and he/ she is the person who knows well
the goal of organization that as the competition increases has to be reduced
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by covering extra cost, expenses as it hinders the growth of organization that
is the penetrating disease. Mediation drag the employee to agree on further
two or three points but still in the employee do not agree on even one point
arbitration takes place.
Employees hired at temporary work basis:
At HBL there are no permanent operational employees hired instead
they all are hired on a temporary basis contracts.
Role of Work Councils:
Personality conflict chewing pan, talking loud on cell phone, Negative
attitude of employees are monitored by these councils. Most of the time
employees did this on purpose to give an impression that they are more
powerful than the management. These conflicts at HBL have also rise, such
as not following the dress coat, negative attitude or any practice against the
terms mentioned in the code of conduct. Accountability or check the dress
code and other matters at regular intervals is necessary in any organization
Summary
Change is inevitable in organizations. The trend today is toward the
learning organization, which embraces continuous learning and change.
Managers should think of change as having four elements—the forces for
change, the perceived need for change, the initiation of change, and the
implementation of change. Forces for change can originate either within or
outside the firm, and managers are responsible for monitoring events that
may require a planned organizational response. Techniques for initiating
changes include designing the organization for creativity, encouraging change
agents, and establishing new-venture teams. The final step is implementation.
Force field analysis is one technique for diagnosing restraining forces, which
often can be removed. Managers also should draw on the implementation
tactics of communication, participation, negotiation, coercion, or top
management support.
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Also discussed are specific types of changes. Technology changes
are accomplished through a bottom-up approach that utilizes experts close to
the technology. Successful new-product introduction requires horizontal
linkage among marketing, research and development, manufacturing, and
perhaps other departments. Structural changes tend to be initiated in a top-
down fashion, because upper managers are the administrative experts and
champion these ideas for approval and implementation. Culture/people
change pertains to the skills, behaviors, and attitudes of employees.
Organizational development is an important approach to changes in people’s
mind-set and corporate culture. The OD process entails three steps—
unfreezing (diagnosis of the problem), the actual change (intervention), and
refreezing (reinforcement of new attitudes and behaviors).
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5. RESEARCH FINDINGS
5.1 The Questionnaires
The empirical data collected have a lot of problems in analysis, its viability,
handing, missing scenarios and its outliners are aspects that relates with its
interpretations. My data is mainly constituted on the questionnaires and
interview’s answers. I selected the most valid data through inferential &
descriptive statistics methods.
Q1.Primary Reason for Leaving the Company:
For this question I won’t be using any charts to show the answers of
employees. Here an open-ended question was formulated to acquire a wider
number of answers. The answers were Benefits, Better Job Opportunity, Working
Conditions, Job Expectation, Conflict with Other Employees, pay or
Reallocation/Move for employee to a set of options. The reason for asking this
question was to discover the diverse range of opinions that employees at HBL
have.
This question was also asked to provide leverage and determine the
reasons that employees have.
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Q2. Time Period You Been Thinking About Leaving The Company:
1. One Month or Less 2. One To 5 Months
3. More Than 5 Months
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Q3. Satisfied With The Company You Work For:
1. Extremely Dissatisfied 2. Very Dissatisfied
3. Neither Satisfied nor Dissatisfied 4. Very Satisfied
5. Extremely Satisfied
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Q4. Your Working Experience:
1. Much More Positive than Negative
2. More Positive than Negative
3. More Negative than Positive
4. Much More Negative than Positive
Q5. Experiences Are More Negative Than Positive, What Factors Are
Responsible. Select All That Apply.
1. My Performance Evaluation and the Outcome
2. My Role, Responsibility and/ or Title
3. Job Training
4. My Boss
5. My Co-Workers
6. My Compensation
7. Change in Compensation Package
8. Company Savings Plan
9. Medical Benefits and Insurance
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10. Vacation Time
11. Other
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Q6.Flexibility of the Company With Respect To Your Family Responsibilities?
1. Very Inflexible 2. Somewhat Inflexible
3. Neither 4. Somewhat Flexible
5. Very Flexible
Q7.A Clear Path for Career Advancement:
1. Strongly Disagree 2. Somewhat Disagree
3. Neither Agree or Disagree 4. Somewhat Agree
5. Strongly Agree
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Q8. Satisfaction With Your Position At This Company:
1. Very Satisfied 2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied 4. Somewhat Satisfied
5. Very Satisfied
Q9.Part of Pay Play in Your Decision to Leave the Organization:
1. 20-40% 2. 40-60%
3. 60-80% 4. 80-100%
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Q10.Working Conditions Affect You to Leave Your Job:
1. Yes 2. No
Q11.Rate the Morale In Your Company:
1. Low 2. Very Low
3. High 4. Very High
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Q12. This Company Have Done Anything To Encourage You To Stay:
1. Yes 2. No
5.2 Findings
The present report indicates that the following features:-
1. Better job opportunities in outer market & pay are the main reasons
for increasing attrition rate.
2. The employees do not feel valued by their employer.
3. The working environment in the company also make them to leave
their job.
4. Performance Appraisals are not given at regular intervals so that the
Employee feel motivated for its work.
5. The work schedule is very much inflexible & Stressful
However an effective retention policy could be followed to make the
employees stay in the company starting form recruitment and selection of
employees, providing an effective pay packages and compensation, outlining an
efficient career development path for employees and most importantly catering to
their emotional, mental and family needs. Also practices should be followed to
bring the ex-employees back in the company.
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6. CONCLUSION AND RECOMMENDATIONS
6.1 Conclusion
Habib Bank Limited (HBL) is considered first commercial bank of Pakistan.
HBL has grown its branch network and become the largest private sector bank
with over 1450 branches across the country and a customer base exceeding five
million relationships.
Study was conducted to know the impact of customer relation officer
activities on the performance of bank and for this purpose Habib Bank Limited
was selected. HBL is very conscious about its employees and very much
importance is given by bank to their valuable satisfaction. Bank also follows
employee's crisis management because role of employee's crisis management in
banking sector is most important and it enhances the business and performance
of the bank.
Employee's crisis management helps to acquire strong and satisfied
workforce and maximizes the business of the bank. Through close relationship
with employee, bank obtains more deposits and efficiency.
6.2 Recommendations
The majority of research on the response of employees to downsizing has
centered on layoff victims; few studies have focused on the people who survived
the layoff. But, these tips will assist you with the emotional aspects of coping with
the loss of your coworkers.
1) Recognize that your emotions are legitimate and that time passing is
necessary for the intensity of your current emotional response to die
down. In organizations where managers recognize and acknowledge this
emotional component in a downsizing, employees return to productivity
much sooner.
2) Recognize that you may need to experience each of the stages of
loss described in Kubler-Ross’s groundbreaking studies about grief.
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3) Seek access to your supervisor; assuming your supervisor is readily
available and perceived by you as concerned about employees, and
honest, reliable and competent, your time with your supervisor should help
you feel reassured.
4) Attempt to recreate the daily patterns you experienced prior to the layoffs.
While much time in an office is invested by employees in talking about the
situation after layoffs, the sooner you can recreate your prior patterns, the
better for your mental health.
5) Treat yourself with kindness. Now is the time to eat a portion of your
favorite comfort food. Got chocolate? Share with coworkers. Bring in a
casserole or cookies that coworkers can share. Small gestures mean a lot
in the post layoffs workplace.
6) Talk out your feelings with coworkers who are likely experiencing loss just
as you are. You can comfort one another. Your significant others outside
of your workplace make good sounding boards, too.
7) Pay attention to the needs of the coworkers who were laid off. These are
your friends and they are experiencing serious issues with self-worth and
loss, too. So many people tie up so much of their identity and self esteem
in what they do for a living that a layoff is a major blow to their sense of
themselves, their competence and self worth. You do them a kindness,
and you will feel better, too, if you continue your weekly lunch date with
your laid off coworker. Let your laid off former coworker vent and listen to
see how you can lend support. Sometimes, active listening is all they
need.
8) You will feel as if you have a proactive mission and purpose when
you connect your laid off coworkers to your connections on Face book,
Linked In, and the other online social networks. Anything you can do to
help them expand their networks and effectively job search will be valued
by your friends.
9) Communication is critical following a layoff. But, remember that the middle
managers who would generally communicate are also experiencing loss
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and concern about their own jobs. (Often managers are the first to be laid
off.) If you are not receiving the communication you need from your
manager, seek it out by asking questions and spending time with him or
her. Go after what you need; don’t wait for communication to flow
downwards.
10) Hopefully, your organization has recognized the importance of valuing the
remaining employees. But, if the opportunities for reward, recognition and
valuing seem slim, volunteer to head up an employee morale committee.
The committee can do much to bring fun and motivation back into the
workplace following layoffs. Think ice cream socials, popcorn machines,
and potluck lunches; the activities don’t need to be expensive.
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BIBLIOGRAPHY
Books References:
Charles R. Greer, Strategic Human Resource Management: A General
Managerial Approach, Second Edition, Person Education, 2004
Barney Olmstead and Susanne Smith (2001): Creating a Flexible Workplace:
How to Select and Manage Alternative Work Options
Brockner, J., Grover, S., Reed, T., & Dewitt, R.L. (1992). Layoffs, job insecurity,
and survivors' work effort: evidence of an inverted-U relationship. The Academy
of Management Journal, 35, 413-425.
Articles:
www.hbl.com
http://en.wikipedia.org/wiki/HabibBank
http://www.highbeam.com/doc/1G1-96745487.html
Websites:
http://www.docstoc.com/docs/9505193/Habib-Bank-Ltd-Pakistan
www.google.com
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APPENDIX
Q1. Primary Reason for Leaving the Company:
Q2. Time Period You Been Thinking About Leaving The Company:
1. One Month or Less 2. One To 5 Months
3. More Than 5 Months
Q3. Satisfied With The Company You Work For:
1. Extremely Dissatisfied 2. Very Dissatisfied
3. Neither Satisfied nor Dissatisfied 4. Very Satisfied
5. Extremely Satisfied
Q4. Your Working Experience:
1. Much More Positive than Negative
2. More Positive than Negative
3. More Negative than Positive
4. Much More Negative than Positive
Q5. Experiences Are More Negative Than Positive, What Factors Are
Responsible. Select All That Apply:
1. My Performance Evaluation and the Outcome
2. My Role, Responsibility and/ or Title
3. Job Training
4. My Boss
5. My Co-Workers
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6. My Compensation
7. Change in Compensation Package
8. Company Savings Plan
9. Medical Benefits and Insurance
10.Vacation Time
11.Other
Q6. Flexibility of the Company With Respect To Your Family Responsibilities?
1. Very Inflexible 2. Somewhat Inflexible
3. Neither 4. Somewhat Flexible
5. Very Flexible
Q7. A Clear Path for Career Advancement:
1. Strongly Disagree 2. Somewhat Disagree
3. Neither Agree or Disagree 4. Somewhat Agree
5. Strongly Agree
Q8. Satisfaction With Your Position At This Company:
1. Very Satisfied 2. Somewhat Dissatisfied
3. Not Satisfied nor Dissatisfied 4. Somewhat Satisfied
5. Very Satisfied
Q9. Part of Pay Play in Your Decision to Leave the Organization:
1. 20-40% 2. 40-60%
3. 60-80% 4. 80-100%
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Q10. Working Conditions Affect You to Leave Your Job:
1. Yes 2. No
Q11. Rate the Morale In Your Company:
1. Low 2. Very Low
3. High 4. Very High
Q12. This Company Have Done Anything To Encourage You To Stay:
1. Yes 2. No
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