HR Practices in Bank Alfalah Limited

HR Practices in Bank Alfalah Limited
Name: Raheel Mahmood Qureshi
Registration No: 1432-408014
Class: M.B.A evening (HRM) 8th Qtr
Submitted To: Sir Pervaiz Nusrat
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TABLE OF CONTENTS
What are the HR Practices?
Emergence of Banking
Overview of the Financial Sector in Pakistan
Introduction of Bank Alfalah Limited
Vision & Mission
Board of Directors
Organizational Structure
Core Values
Goals & Objectives
Product & Services
HRM Process in Organization
Functional Overview of HRM Process in Organization
Recruitment & Selection of Employees
Employee Training & Development
Performance Management
Performance Appraisal
Employee Compensation & Benefits
SWOT Analysis
Customer & Employee Problems & Solution
Conclusion
Recommendations
Appendices (Employee Questionnaire)
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References
What are the HR Practices?

Human resource management (HRM) is the strategic and coherent approach to the management
of an organization’s most valued assets - the people working there who individually and
collectively contributes to the achievement of the objectives of the business. The terms "human
resource management" and "human resources" (HR) have largely replaced the term "personnel
management" as a description of the processes involved in managing people in organizations. In
simple sense, HRM means employing people, developing their capacities, utilizing, maintaining
and compensating their services in tune with the job and organizational requirement.
Features:
Its features include:
• Organizational management
• Personnel administration
• Manpower management
• Industrial management
But these traditional expressions are becoming less common for the theoretical discipline.
Sometimes even employee and industrial relations are confusingly listed as synonyms, although
these normally refer to the relationship between management and workers and the behavior of
workers in companies. The theoretical discipline is based primarily on the assumption that
employees are individuals with varying goals and needs, and as such should not be thought of as
basic business resources, such as trucks and filing cabinets. The field takes a positive view of
workers, assuming that virtually all wish to contribute to the enterprise productively, and that the
main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of
process.
Human Resource Management (HRM) is seen by practitioners in the field as a more innovative
view of workplace management than the traditional approach. Its techniques force the managers
of an enterprise to express their goals with specificity so that they can be understood and
undertaken by the workforce and to provide the resources needed for them to successfully
accomplish their assignments. As such, HRM techniques, when properly practiced, are
expressive of the goals and operating practices of the enterprise overall. HRM is also seen by
many to have a key role in risk reduction within organizations.
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Synonyms such as personnel management are often used in a more restricted sense to describe
activities that are necessary in the recruiting of a workforce, providing its members with payroll
and benefits, and administrating their work-life needs. So if we move to actual definitions,
Torrington and Hall (1987) define personnel management as being:
“a series of activities which: first enable working people and their employing organizations to
agree about the objectives and nature of their working relationship and, secondly, ensures that
the agreement is fulfilled"
While Miller (1987) suggests that HRM relates to:
"Those decisions and actions which concern the management of employees at all levels in the
business and which are related to the implementation of strategies directed towards creating and
sustaining competitive advantage"
Academic theory:
The goal of human resource management is to help an organization to meet strategic goals by
attracting, and maintaining employees and also to manage them effectively. The key word here
perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an
organization's employees, and the overall strategic direction of the company (Miller, 1989).
The basic premise of the academic theory of HRM is that humans are not machines; therefore we
need to have an interdisciplinary examination of people in the workplace. Fields such as
psychology, industrial relations, industrial engineering, sociology, economics, and critical
theories: postmodernism, post-structuralism play a major role. Many colleges and universities
offer bachelor and master degrees in Human Resources Management or in Human Resources and
Industrial Relations. One widely used scheme to describe the role of HRM, developed by Dave
Ulrich, defines 4 fields for the HRM function:
• Strategic business partner
• Change management
• Employee champion
• Administration
However, many HR functions these days struggle to get beyond the roles of administration and
employee champion, and are seen rather as reactive as strategically proactive partners for the top
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management. In addition, HR organizations also have the difficulty in proving how their
activities and processes add value to the company. Only in the recent years HR scholars and HR
professionals are focusing to develop models that can measure if HR adds value.
Business practice:
Human resources management comprises several processes. Together they are supposed to
achieve the above mentioned goal. These processes can be performed in an HR department, but
some tasks can also be outsourced or performed by line-managers or other departments. When
effectively integrated they provide significant economic benefit to the company.
• Workforce planning
• Recruitment (sometimes separated into attraction and selection)
• Induction, Orientation and On boarding
• Skills management
• Training and development
• Personnel administration
• Compensation in wage or salary
• Time management
• Travel management (sometimes assigned to accounting rather than HRM)
• Payroll (sometimes assigned to accounting rather than HRM)
• Employee benefits administration
• Personnel cost planning
• Performance appraisal
• Labor relations
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Functions:
The Human Resources Management (HRM) function includes a variety of activities, and key
among them is deciding what staffing needs you have and whether to use independent
contractors or hire employees to fill these needs, recruiting and training the best employees,
ensuring they are high performers, dealing with performance issues, and ensuring your personnel
and management practices conform to various regulations. Activities also include managing your
approach to employee benefits and compensation, employee records and personnel policies.
Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves
because they can't yet afford part- or full-time help. However, they should always ensure that
employees have—and are aware of—personnel policies which conform to current regulations.
These policies are often in the form of employee manuals, which all employees have.
Note that some people distinguish a difference between HRM (a major management activity) and
HRD (Human Resource Development, a profession). Those people might include HRM in HRD,
explaining that HRD includes the broader range of activities to develop personnel inside of
organizations, including, e.g., career development, training, organization development, etc.
There is a long-standing argument about where HR-related functions should be organized into
large organizations, e.g., "should HR be in the Organization Development department or the
other way around?"
The HRM function and HRD profession have undergone tremendous change over the past 20–30
years. Many years ago, large organizations looked to the "Personnel Department," mostly to
manage the paperwork around hiring and paying people. More recently, organizations consider
the "HR Department" as playing a major role in staffing, training and helping to manage people
so that people and the organization are performing at maximum capability in a highly fulfilling
manner.
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Emergence of Banking:
The word “bank” is derived from “Bancus” or “Banque”. History of banking is traced to 2000 B.C
in Greece. Priest and Goldsmiths acted as financial agents by keeping money and valuables of
people in temples in strong safes. Thus, the first stage in the development of modern banking was
accepting of deposits of cash from those who had surplus money with them.
The Goldsmiths issued receipts for the money deposited with them, which began to pass from hand
to hand in settlement of transaction as people had confidence in the integrity and solvency of
goldsmiths. The receipts were drawn on a way that it entitled the holder to claim that specified
amount of money from goldsmiths. These receipts were the earlier bank notes. Thus the second
stage in the development of banking was the issues of bank notes.
The goldsmiths discovered all the people who had deposited money did not come to withdraw their
finds in cash, only a few people presented the receipts for encashment during a given period of
time and they also found that most of the money deposited with them was lying idle. They also
found they were being constantly requested for loan on good security. They thus thought it
profitable to lend at least some of the money with them to needy persons. This proved profitable
for them. Instead of charging interest from deposits, they began to give them interest on money
deposited with them. This was the third stage in the development of banking.
Through experience, banks came to know that they could keep a small proportion of total deposits
for meeting demands of customers for cash and could easily lend the rest. They allowed deposits to
draw over and above than the money standing to their credit. They thus allowed the overdraft
facility to their deposits and this was the fourth stage in the development of banking. Every bank
issued receipts and most allowed overdraft facility and this caused too much confusion the
systems. In order to earn profits, banks did not keep adequate reserves to meet demands of
customers for cash. This failure on the part of bankers to return money caused widespread distress
among people.
In order to create confidence among the people, steps were taken to regulate the banking. A
conference was held in Nuremberg in 1548 where it was decided that a bank should be set up by
the state, which would streamline the banking organization and technique. The first central bank
was thus formed in Geneva in 1694. The responsibility of issuing notes is now entrusted to a
central bank in each country.
With passage of time, activities of commercial bank increased. They dealt with large number of
issues such as obtaining funds, advancing loans to business, farmers, households, making
investment in stocks, discounting bills of exchange etc. commercial banks are now multi-service
organizations and play a very important role in financial markets.
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Overview of the Financial Sector in Pakistan:
The history of banking system in Pakistan dates back to independence of Pakistan in August 1947
when various banks transferred their Head Quarters and funds to areas likely to fall in India. This
trend emerged due to dominant role of Hindus in pre-partitioned Indian banking system.
According to various books there were 3496 branches of Indian scheduled banks in the undivided
sub-continent as on 1st March 1947 out of which only 487 branches were located in areas presently
constituting Pakistan. However the number of scheduled banks drastically declined to 195 from 487
immediately after partition. At the time of partition there were only two banks having the honor to
be first commercial bank of Pakistan namely Habib Bank Ltd., which was set up in 1941 with its
Head Office in India and the Australasia Bank Ltd., which was established in 1944 with its Head
Office in Pakistan.
By following the partition, an expert committee was set up and this committee recommended that
the Reserve Bank of India being the Central Bank of the undivided India should continue to
function as Central Bank of Pakistan and the Indian currency notes would continue to be legal
tender in Pakistan till 30th September 1948. Subsequently it was decided to have separate Central
Banks and the State Bank of Pakistan was set up and started functioning from 1st July 1948.
Thus the history of Banking system in Pakistan started with the establishment of the State Bank of
Pakistan which was inaugurated by Quaid-e-Azam Muhammad Ali Jinnah on 1st July, 1948.
Consequently three banks were established which include Muslim Commercial Bank Ltd. formed in
September 1948. Bank of Bahawalpur in October 1948 and National Bank of Pakistan in 1949
Habib Bank also transferred its Head Office from Bombay to Karachi due to partition in August
1947 and it was assisted by the State Bank to finance domestic trade of the country.
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Introduction to the Organization:
Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the
Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997. The
bank is engaged in commercial banking and related services as defined in the Banking companies
ordinance, 1962. The Bank is currently operating through 282 branches in 98 cities, with the
registered office at B.A. Building, I.I. Chundrigar, Karachi.
Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management
of the bank has implemented strategies and policies to carve a distinct position for the bank in the
market place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by
its board of management, the Bank has invested in revolutionary technology to have an extensive
range of products and services.
This facilitates our commitment to a culture of innovation and seeks out synergies with clients and
service providers to ensure uninterrupted services to its customers. We perceive the requirements
of our customers and match them with quality products and service solutions. During the past five
years, we have emerged as one of the foremost financial institution in the region endeavoring to
meet the needs of tomorrow today.
Chairman’s Message:
"Our core philosophy of honesty, transparency in customer dealings,

product innovation, excellence in customer service”.
Since the inception of Bank Alfalah, by the grace of the Almighty, we have moved rapidly in
expanding our branch network and deposit base, along with making profitable advances and
increasing the range of products and services. We have made a break-through in providing premier
services at an affordable cost to our customers.
Keeping in view our valued clients and the need for constant and effective communication of
information, we have designed this website to be as user-friendly as possible.
As we pursue the path of excellence, customer satisfaction remains our priority. It is only when we
know our customers better, can we deliver a higher quality of services, thereby adding synergy to
our existing management expertise, financial strength and profitability.
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The bank perceived the requirements of customers and matches them with quality products and
service solutions. During the past five years, bank has emerged as one of the foremost financial
institution in the region endeavoring to meet the needs of tomorrow as well as today. To
continually upgrade the quality of service to the customers, training of team members in all the
integral aspects of banking, customer service and IT was specially focused.
The portfolio concentrates on all aspects of
Conventional banking as well as the Financial needs of
corporate sector. Dynamic and high value product includes
Car Financing, Home Financing, Rupee Travelers Cheques,
Credits Cards, Debit Cards, on line Banking, ATM and
consumer durables. In addition to this, Islamic Banking
Division is a recent initiative, which operates as separate
branch. It offers Shariah Compliant products through a
network of five branches, which has been increase to 98 by the year 2010
The bank is committed to combine all it s energies and resources to bring high value, security
and satisfaction to its customers, employees and shareholder. The Bank has invested in
revolutionary technology to have an extensive range of products and services. This facilitates
commitment to a culture of innovation and seeks out synergies with client and service providers
to ensure uninterrupted services to its customers.
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VISION
“To be the premier organizations operating locally and

internationally that provided the complete range of
financial services to all segments under one roof”
MISSION
“To develop and deliver the most innovative products,
manage customers experience, deliver quality service that
contributes to brand strength, establishes a competitive
advantage and enhances profitability, thus providing
value to the stakeholders of the bank
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Board of Directors:
H.E. Sheikh Hamdan Bin Mubarak

Al Nahayan
Chairman
Mr. Abdulla Nasser

Mr. Mohammad Saleem Akhtar
Hawalileel Al-
Chief Executive Officer
Mansoori
Mr. Ikram Ul-Majeed

Mr. Abdulla Khalil Al Mutawa
Sehgal
Mr. Nadeem Iqbal

Mr. Khalid Mana Saeed Al
Otaiba Sheikh
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Organizational Structure:
President (CEO)
Senior Executive Vice President
Executive Vice President
Senior Vice President
Vice President
Assistant Vice President
Officers Grade I, II, III
Clerical Staff Non-Clerical Staff
Cashier Typist Clerks Guards Messengers

& Assistants
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Core Values:
Our core values and corporate culture is based on the ideology of superior personalized service and
the extra mile which the Bank is ever willing to go for its customers and employees. This trait
alone separates us form other financial institutions and is also a testament to our slogan of The
Caring Bank. Bank Alfalah, besides being the most rapidly expanding Bank in the market, is also
the choice of many career focused individuals since it offers stability of career, tremendous growth
& personal development opportunities coupled with a nurturing work environment.
Goals & Objectives:

Goals and objectives are factors through which the company’s devotion and commitment to the
job can be seen. If the goals are realistic and achievable, than surely that organization is doing its
job. Bank Alfalah also has certain goals and objectives which it is trying to achieve, through its
various strategies and operations. The goals and objectives are mentioned below:
1. To create a sound base, and through efficient systems achieve modern banking
throughout Pakistan.
2. By the end of every accounting year there is an increase in deposits. As the

deposit rate of during 2002 was approx 52 Million and the same has been
increased in 2003 by 77 Million.
3. To create unit banking network in all the branches of Bank Alfalah, the end of the
year. This means that all the operations of the bank, i.e. deposits to advances,
imports, exports, L/C Opening, foreign currency and many more aspects under
one roof, so that the customer can be facilitate in one visit.
4. Islamic Banking is one of the goals of Bank Alfalah though it has been initiated in
the last fiscal year and it is very acceptable for general public.
5. However, there is lot of work to do for successful implementation of the Islamic

Banking Plan. In this regard the Bank is opening specific Islamic Banking Branch
under the supervision of its Islamic Banking Division.
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Product & Services:
With the mission to provide all-encompassing banking services to the customers, Bank Alfalah
has a uniquely defined menu of financial products. Currently it is one of the most comprehensive
portfolios of personalized financial solutions that are custom-tailored to serve the requirements
not only of conventional customers but also fulfill the needs of the corporate sector:
 Car Financing
 Rupee Travelers Cheques
 Online Banking
 Credit Cards
 ATMs
 Home Financing
 Islamic Banking
 Corporate and Structured Financing
Car Financing:
Car Financing is one of the major renowned products of Bank Alfalah and can be utilized in
terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing
Facility (only for Alfalah Customers) and it is characterized in terms of:
 Lowest Mark up
 Lower Insurance
 Quick Processing
 Lower Down Payment
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Home Financing:
Major features of Bank Alfalah Home Financing are Lowest

Mark-up, Quick Processing, Multiple Repayment Options and
Free Valuation. It has been bifurcated in terms
of “Home Buyer, Home Construct, Home Improver, Home

Balance Transfer Facility”.
 Financing Limit : up to Rs. 10,000,000/-
 Tenure : up to 20Years
 Equity Participation : 30% Borrower / 70% Bank
Rupee Travelers Cheques:
Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel agents,
hotels business establishments and all over the country and abroad. This service is being offered to
facilitate instant fund availability to travelers and business people who used to carry a large sum of
money with them.
Credits Cards:
Bank Alfalah Visa Card is everywhere and globally
Accepted and welcomed at locations displaying the
VISA logo. It is accepted at nearly 30 million merchants
& 870,000 ATMs in more than 150 countries around the
globe and over 10,000 establishments in Pakistan. Alfalah VISA pays for shopping, travel,
entertainment, meals and much more.
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Debit Cards:
Bank Alfalah Limited presents Alfalah Hilal Card, the first

Visa Electron International Debit Card which gives an
unlimited access to current / savings account with a simple
swipe, at millions of retail shops and ATMs, worldwide. The
Alfalah Hilal Card comes with a host of conveniences and
benefits combined with the wide reach of Visa Network
enabling it to be accepted at more than 840,000 ATMs and
13 million retail outlets around the world, making it the most
acceptable Debit Card available in Pakistan.
On Line Banking:
To provide enhanced and value added products to

customer bank is constantly striving for
additional facilities. Bank provide fully
automated on-line telephone banking facilities to
its customers enabling them to carry out banking
transactions like balance inquiries, statement
requests, product information and exchange rate.
Automated Teller Machine (ATM):
The bank offers 24 hours self service banking facilities to it customers on country wide basis
through deployment of Automated Teller Machine. This system allows the banking facilities
such as cash with drawls, cash deposits, and funds transfer, balance inquiries, account
statements. Electronic cash dispensing facilities are available in major cities of Pakistan. All
ATMs are linked through a state-of-the-art Satellite Based Communication System which offers
24 hours real time service.
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Islamic Banking:
A separate division is a recently initiated, which operates as separate branch. It offers Shariah
Compliant products through a network of five branches, which will increase to 50 by the year
2007. Islamic Banking has launched following products with the perception that these are in
accordance with the Sharia Principles.
• Alfalah Masharaka Homes
• Murabaha Finance
• Alfalah Car Ijarah
Corporate and Structured Financing:
The portfolio concentrates on all aspects of conventional banking as well as the financial needs
of corporate sector including dynamic and high value product.
 Loaning against securities
 Letter of Credit
 Letter of Guarantee
 Demand Finance
 Cash Finance
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Human Resource Management Process in the Organization:
Man-power (Human Resource) is the most important factor of production. Other factors are also
important but these are easily available. If we have funds we can easily buy the piece of land at
our desired location and we can buy latest machinery and plant and equipment from the market.
But the same is not true for Human Resource. It is a tough task to search for and recruit the
suitably skilled and qualified persons. Than it is necessary to train them and develop them to fit in
the organization and become a useful source. Next task is to retain them because if a properly
trained and skilled person leaves an organization, it will negatively affect the organization.
These all activities i.e., staffing, retaining and development of Human Resources is called Human
Resource Management and it is a continuous process. There is always a situation in the
organization that some people join an organization while others leave it. Hence HRM process is
an ongoing process. We can categories this process in to five major tasks.
• Staffing.
• Retention.
• Development.
• Adjustment.
• Managing change.
Staffing:
It is a process of
• Identifying jobs or work requirements.
• Determining the number of persons required with necessary education and skills and
• Recruiting, selecting and promoting the deserving persons.
Retention:
It is an activity to retain the employees in an organization. This task is achieved by
• Rewarding the efficient employees.
• Ensuring proper inter personal relationship among the employees and management and
• Providing and maintaining safe and healthy working environment.
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Development:
It is an activity to enhance the knowledge, abilities and skills of the employees by providing them
with necessary training, refresher courses and study opportunities so that their improved
competencies add to the over-all improvement of the organization.
Adjustments:
Enabling the employees to comply with the policies of the management, office orders and
organizational culture
Managing Change:
It is the activity to prepare the organization as well as employees to be ready to adapt to the
changes taking place in the market due to improved technology and be ready to face the challenges
caused by “change in the business environment”.
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Functional Overview of HRM Process in Organization:
Human Resource Planning:
At Bank Alfalah Limited, Human Resource Planning involves a decision making in three areas
of combined activities:
Step-I The bank identifies its organizational needs and then acquires a right king of human
resource accordingly.
Step-II Bank motivates them to achieve excellent performance by giving them different sorts of
targets according to their job requirements.
Step-III It also creates an interactive link between the employee goals and the organizational
goals.
Job Description:
It is descriptive in nature and constitutes a record of existing and additional job facts. The order
of job description is as follows:
• Job identification
• Job summary
• Duties performed
• Supervision given and received
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Recruitment & Selection of Employees:
Selection of the right people for the job is the first step towards developing an efficient
institution. Great stress has therefore been laid on ensuring that the recruitment process at the
Bank Alfalah is highly competitive, transparent and merit based. As a result of this conscious
policy, we have been able to attract some of the top talent in the country in the fields of
Economics, Finance, Business administration, IT, Accounts and Audit as well as Statistics.
In Bank Alfalah Recruitment of employees starts from:
An analysis of the job to be done (i.e. an analytical study of the tasks to be performed to
determine their essential factors) written into a job description so that the selectors know what
physical and mental characteristics applicants must possess, what qualities and attitudes are
desirable.
What Bank Alfalah looks for when recruiting personnel?
• Team players with excellent interpersonal skills

• Knowledge and use of information technology
• Strong analytical and problem solving skills
• Excellent written and verbal communication skills in English
The main sources of recruitment in Bank Alfalah are:
• Internal promotion and internal introductions (at times desirable for morale purposes)
• Advertising (often via agents for specialist posts) or the use of other local media.
In Bank Alfalah Interviews are carried out by individuals (e.g. supervisor or departmental
manager) in the form of sequential interviews by different experts and can vary from a Five
minute 'chat' to a process of several days. Ultimately personal skills in judgment are probably the
most important, but techniques to aid judgment include selection testing for:
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• Aptitudes
• Group problem solving
Before letters of appointment are sent any doubts about medical fitness or capacity is resolved by
requiring applicants to attend a medical examination and a background investigation of
employees is also conducted.
Orientation:
Introduction of a new employee to his/her job and the organization. Orientation is designed to
provide new employees with the information needed to function comfortably and effectively in
the organization. In Bank Alfalah objective of orientation is to inform all new employees with
the basic structure and rules of bank. Human resource Department is responsible for orientation.
With the first week of the employment employee go through Department orientation.
Employee Training & Development:

Bank Alfalah’s management believes in developing the potential of the Bank’s employees to the
fullest extent. Training & Development Centre of the Bank are housed in state of the art facilities
at Karachi and Lahore. The centers are responsible for providing multi-level high quality training
programmes to all staff members in the following areas:
• Consumer Banking Operations
• Credit Marketing & Credit Proposals
• Credit Administration/Documentation
• Marketing & Selling skills
• Customer service skills
• Leadership and Management Skills
• Personal effectiveness and skills
It is obligatory for each staff member of the bank to attend at least two days of training in a
calendar year. Wherever the Training Department is unable to provide focused training for
certain groups of staff, reputable external training providers are invited to fill the gap.
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Performance Management:
Performance management includes activities to ensure that goals are consistently being met in an
effective and efficient manner. Performance management can focus on performance of the
organization, a department, processes to build a product or service, employees, etc.
Performance Appraisal:
It is a structured discussion between employee and supervisor. It provides an opportunity for the
supervisor to recognize an employee’s achievement, offer suggestions for improvement when needed,
discuss job responsibilities, define objectives, counsel for career advancement, and justify a pay
adjustment. Regarding the performance appraisal, bank adopts both types of approaches.
a. Traditional Approach:
The traditional approach is primarily concerned with the overall organization and
its past performance. In Bank Alfalah, overall performance is reviews at branch
level. Each branch is liable to show its performance in a positive direction
according to set goals.
b. Development Approach:
This approach viewed the employees as individuals and has been forward looking
through the use of goal setting. All the employees in the each of the branches are
given a performa. Every employee working in the bank is assigned targets,
usually their target are in the form of amount. The performances of all the
branches are reviewed in the end of December. Till yet Bank Alfalah, has no
computerized system to assess the performance of employees
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Performance Appraisal Process:
The performance appraisal process in the Bank Alfalah Ltd. consists of four inter-related
steps:
i. Establish a common understanding between the manager (evaluator) and

employee (evaluate) regarding work expectations, mainly the work to be
accomplished and how those work are to be evaluated.
ii. Establish ongoing assessment of performance and the progress against work
expectation.
iii. Formal documentation of performance through the completion of a performance

and development appraisal form appropriate to the job family.
iv. The formal performance and development appraisal discussion, based on the
completed appraisal form and ending in the construction of a development plan.
Employee Compensation & Benefits:

Reward Management elaborates how people are rewarded in accordance with their value to an
organization. It is concerned with both financial and non-financial rewards. A reward system of
an organization consist of integrated policies, processes and practices for rewarding its
employees in accordance with contribution, skill and competence and their market worth.
In Bank Alfalah the elements of reward management system are consists of Basic Pay; the fixed
salary or wage which constitutes the rates for the job. This rate is varied in a skill based or
competence based system according to the individual’s skill or competence. The rates are fixed
by managerial judgment of what is required to recruit and retain the employee.
In Bank Alfalah there is no any concept of individual performance related pay except to the
Business Development Officer. Business Development Officers are those who are hired at
contractual basis. They are assigned different targets. If they exceed to the targets they can enjoy
the individual performance related pay otherwise they are fired
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Bank Alfalah offers highly competitive salaries and benefits to both fresh recruits
and experienced professionals. Once part of the Alfalah family you can expect both
monetary and non monetary rewards based on performance. Some of our benefits
include:
• Attractive Salary Package
• Employee Provident Fund
• Gratuity Fund
• Medical Insurance (Self, family and parents)
• Life Insurance
• Performance based promotions & bonuses
• Various types of staff loans
• Assistance in pursuing higher education
• Rewards on completing professional qualifications
Managerial Practices:
Aggressive Banking:
Bank Alfalah expanding their network of Islamic Banking. Bank Al Baraka has been
serving the Islamic banking sector since 10 years and they have only 5 branches in
Pakistan. On the other hand bank Alfalah has established 20 branches in a year.
Motivation:
Bank Alfalah motivating their employees by giving them comprehensive benefits
and professional environment within the organization, which enhances the
performance of the employees. Bank motivates their employees by giving 3 bonuses
in a year.
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Benefits:
Monitory Benefits:
Monitory benefits are given to the employees on the basis of their performance like
salary rise, cash prize.
Grade Promotion:
Bank also provides benefit to their employees in the form of grade promotion. Grade
promotion motivates the employee to do their work efficiently and effectively.
Abroad Posting:
Bank benefit their employees by sending them on overseas posting where they can
enhance their professional skills and get handsome financial benefits in terms of
salary or fridge benefits.
Controlling:
Bank has proper setup of controlling the day to day transactions and operational
affairs. Bank controls the operations through a proper check and balance system and
properly monitor the daily work.
Internal Control Unit:

Bank has an Internal Control Unit that monitors the daily transactions within the
organization and keeps informing the management about the rules and policies
violation. Internal control unit has a proper check and balance on operations and
other bank departments.
Internal Audit:
Internal audit is a tool to have a proper check on daily working in a bank. Internal
auditor has to point out the discrepancies found during audit. Internal auditors hand
over the audit report to the audit chief and he hand over that to the management.
Management overlooks all the discrepancies and try to reduce the violation and also
took the necessary actions. Internal audit conducted in a bank twice a year.
External Audit:
27
External auditors are the representatives of state bank of Pakistan. State bank
assigned them to audit the banks the find out the lapses or discrepancies according to
the rules and regulations of state bank of Pakistan. State bank imposed penalty on
bank if they found any discrepancies related to banking practices or procedures.
External auditor hand over the audit report to state bank of Pakistan and SBP
handover the report to the management along with the debit advice in form of
penalty and management overlook the discrepancies and take necessary actions.
External audit conducted once in a year. Bank Alfalah has a Chartered Accountant
Company on his panel who prepare and overview the financial reports of the bank
Taseer Hadi & Co. is a chartered firm which is on the panel of Bank Alfalah.
SWOT Analysis:
Strengths:
Since, inception of Bank Alfalah, it has moved rapidly in expanding branch network
and deposit base, along with making profitable advances and increasing the range of
products and services bank have made a break-through in providing premier services
at an affordable cost to our customers.
Bank Alfalah has been awarded an AA- (double A minus) and an A1+ (A one plus)
in the long and short term respectively by the PACRA. These rating denote very
high credit quality and very low expectation of credit risk.
The main source of a financial institution is public savings in this regard public
confidence plays a vital role. So, the confidence of customers is the main strength of
Bank Alfalah. In order to maintain an effective communication of information
regarding the need of valued client’s bank has designed its website to be as user-
friendly as possible. This facilitates to pursue the path of excellence and customer
satisfaction through delivering higher quality of services, thereby adding synergy to
our existing management expertise, financial strength and profitability. Hence, it’s a
channel of communication for the delivery of quality products and services that
enhance value
Weaknesses:
28
As per Bank policy, advertising and publicity is not extensively emphasized.
Through advertisement customers could be kept abreast with the products and
services. The main focus of Bank is major cities of Pakistan. It is direly needed to
extend its network and people should be educated about the functioning of bank.
Since, Bank Alfalah has strong set up in UAE and Middle East, therefore,
specifically those areas of Pakistan should be targeted where large numbers of
people are working abroad.
Opportunities:
The life cycle of an organization is comprised of threats as well as opportunities. If

we say, today the rates of challenges are too high but simultaneously the rate of
opportunities is also high. It is mandatory to try to make progress with consistency
as well as to adapt changes with the needs of time, in order to cope up with both
conditions. In the prevailing scenario, Bank Alfalah could penetrate further and
could capture various corporate customers in addition to the retail customers by
expanding their network. In addition to the excellent routine banking, it has earned a
good name by offering special products like car financing, home financing and credit
card. So, the penetration of these products could enhance the market share.
In the rapidly growing industry of Pakistan, launching of another SBU, Al-Warid

Mobile will be an excellent addition towards the credibility as well as enhancement
of Bank Alfalah’s market share.
Bank Alfalah has launched another division known as Islamic Banking. This new
aspect will also attract a large number of people, who don’t want to deal with interest
bearing banking. Hence, it’s a new opportunity where competitors are limited.
Threats:
While doing business, threats are part of the game. Especially, in this era, most of
the financial institutions are working as Private Limited Company and facing or have
29
a fear of threat from their competitor as well as new entrants. In order to maintain as
well as to enhance the market share, banks always try to introduce new schemes /
packages. Hence, the environment is very much innovative and adaptive to the needs
of customers.
Though Bank Alfalah has a strong footing and maintain a good number of loyal
customer, still bank has threats in various sectors:
• In Car Financing MCB & UBL are threats however, the expected car
financing of RBS could also be a threat for Bank Alfalah.
• In Home Financing Union Bank or to some extent NBP are threats.
• In credit cards, Bank Alfalah captured the market share of Citi Bank and
Standard Chartered Bank. Till yet the bank has no prominent threat. But, the
launch of Askari Bank Master Card and Union Bank Card might be threat
after some time.
Customer & Employee Problems:

Customer Problems:
It seems that the priority is given to the corporate customers in Bank Alfalah as the individuals
from middle class have to remind the management of certain branch to do the needful for them.
30
Customer is the king and customer always right. Bank is earning profit from the customers. Bank
should have a proper relationship with corporate as well as individual customers. It is
recommended that the management should stress on having satisfactory relationship with
individual customers because they can also provide the revenue in term of profit.
Employee Problems:
Insufficient Employees:
To compete in the banking industry Bank Alfalah should have enough employees to facilitate the
customers, and divide the workload of the existing employees by hiring new people, because the
bank cannot use the alternative to reduce the number of customers and loosing the market share.
Working Hours:
Bank Alfalah although providing the customer service in better way but there is a lot of work to
do in a routine banking to the employees due to which they work for long time. Management
should gave relaxation to the employees by hiring new professionals and reduce the working
hours.
Solution to the Problems:
Customer Problems Solution:
Customer is the king and customer always right. Bank is earning profit from the customers. Bank
should have a proper relationship with corporate as well as individual customers. It is
recommended that the management should stress on having satisfactory relationship with
individual customers because they can also provide the revenue in term of profit.
Employee Problems Solution:
Insufficient Employees:
31
The Bank should divide the workload of the existing employees by hiring new people, because
the bank cannot use the alternative to reduce the number of customers and loosing the market
share.
Working Hours:
Management should give relaxation to the employees by hiring new professionals and
reduce the working hours.
Conclusion:
32
The economy of the country is booming and with the investment favorable policies and their
smooth implementation, the role of banks in today’s economy have become an important one.
The banking industry is also reaping the fruits of this economic boom by growing rapidly over
the past few years. There are a number of mergers happening in the economy with foreign
investments coming into the banking sector. The bank has seen phenomenal growth in the past
few years by opening more branches in the country, increasing the deposit base, while also
increasing the assets and profits of the bank.
The services that Bank Alfalah provides have a great market penetration not only because of
their features but also the profit and markup rates that they charge. Also the products that Bank
Alfalah provides cater to sector of the economy.
The top management of the bank is always developing strategies that cope with unexpected
challenges to deliver products and services more efficiently
Furthermore, as the bank is growing, the number of employees at Bank Alfalah are increasing,
which shows that Bank Alfalah is being considered as a an employer, that provides its employees
with a challenging environment to work in, where they can harness their full potential and shows
confidence as an employer by the employees of the bank.
Lastly to become the leading bank of Pakistan, Bank Alfalah has to benchmark its services to its
major competitors in the industry or the market leader in the industry and provide a continuous
mean of improvement in its existing products and services, while introducing new ones to the
industry.
Recommendations:
33
Some of the recommendations that I would recommend to some of the problems discussed in the
above section, that might increase the efficiency of both the operations and employees of Bank
Alfalah are as follows
Technological Advancements:
Bank Alfalah should develop a modern connectivity architecture to effectively maintain an

online connection of the branch with other branches and also the ATM link, which may include
using modern technologies like fiber cables, routers etc. Also backup links should also be
developed.
Also a proper IT department should be established in all branches, with professional having the
knowledge to maintain a secured connection with other banks. Also scheduled backups of data
should be done within the bank.
Workshops and Counseling:
Work shop programs should be conducted in every city, rather than just two centers, for all Bank
Alfalah employees. These workshops should relate to all aspects of banking and may also be
conducted with other banks as a joint program.
Also as parts of the human resource training, counseling programs should be started for junior
executives or new entrants into the bank, introducing them to their prospects in this industry.
The lower staff employed at Bank Alfalah should also be given a chance to succeed in life by
training them in different simple jobs at the bank, which my include sorting of cheques, phone
banking etc.
Incentives:
34
• Incentive schemes should be developed for the employees that can help motivate them,
• which might include:
• Personal loans and car financing facilities for all ranks of employees.
• Scholarship programs for all employees.
• Introducing employee awards at branch and regional levels.
• Job rotation programs to enhance the skills of employees.
Priority Banking and Business Development Department:
There is no priority banking department at Bank Alfalah, like that of other bank. A priority
banking department should be developed so as to give even more exclusive and customized
services to high end customers with large deposit accounts. Also Business Development
Department should be developed in all branches, so that they can actively find prospect
customers to take up products from Bank Alfalah.
Innovative Products:
New and innovative products should be introduced by Bank Alfalah, like other bank such as
Citibank and Standard Chartered Bank develops for their customer. For this purpose, special
teams should be developed that include professional from all departments of the banks to come
with ideas. This process will increase the number of ideas generated and even produce
innovative products for the bank that might give them the edge.
Placements of Employees:
There are some departments in the bank that do not have enough employees, while some have
more than needed. All this creates inefficiencies and so the operations manager should look at
the department of the branch and see where inefficiencies lie, in consultation of with the heads of
the departments and hire individuals where there are less employees or rotate employees from
other departments.
Amenities in Branch:
35
There should be a prayer room developed in all branches as many employees want to pray, but
do not have the proper place to do it. Also work like sorting, which takes up a lot of space should
be done in a separate place and amenities like television and internet connection should be
placed in the common room, so as to give employees a relaxing environment when they have a
break.
Appendices:
Employee Questionnaire
36
This questionnaire is part of my research work for MBA project. It is requested that please
answer all the mentioned questions in questionnaire. Your cooperation in this regard is highly
appreciated.
HR practices in Bank Alfalah Limited

Person responsible for completing the questionnaire:
Name: ______________________________ Department: _______________________
1. Human Resource Management Department is working satisfactorily in my organization.
Strongly Agree Agree Neutral Disagree Strongly Disagree
2. The HR Practices are effectively communicated to all employees in the organization.
3. I know the difference between Performance Management and Performance Appraisal.
4. Our targets/ objectives are set regularly (e.g. quarterly, half yearly, yearly etc.)
5. I use to participate in setting individual targets for measures.
37
6. I feel there is gap between my existing HR practices and expected HR practices.
7. I think there is a direct relationship between employee performance and reward system in
my organization.
8. The top management applies improved Human Resource Management techniques.
9. I feel that measures taken to assess my performance are in accordance with these
objectives.
10. I feel current ACR based system in my organization is effective for employee appraisal/
evaluation.
11. My competencies are thoroughly judged, while evaluating my performance.
12. I am satisfied with the level of training and development, I received in my organization.
38
13. I feel my work achievement contributes to organizational goals.
14. The findings of ACR are used in order to assess the employee performance.
15. My organization uses performance evaluation as a guide to new policy formulation.
16. I think that existing HR practices is contributing very much towards employee
development in my organization.
17. I am satisfied with my salary package.
18. I have been paid as per my contribution/ performance to the organization.
19. I will welcome any new practice in respect of Human Resource Management
implemented in my organization.
39
20. There is a high level of motivation among employees of organization.
21. I am satisfied with existing system of bonuses and rewards.
22. I have job satisfaction.
23. I think that career progression in my organization is carried out satisfactory.
24. I perform my assigned/ established targets with full responsibility.
25. What are the barriers in performance improvement of individuals?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
40
………………………………………………………………………………………………
26. Give your general suggestion/ comments for improving employee human resource
management system in your organization.
……………………………………………………………………………………………..
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
…………………………………………………………………………………………….
Thank you very much for your valuable cooperation.
References:
Mr. Mazhar Hussain

Manager Bank Alfalah Limited
Murree Road Branch Rawalpindi
41
Mr. Shuja Tariq
Operations Manager Bank Alfalah Limited
Mall Road Branch Saddar Rawalpindi
Ms. Amna Tabasum

HR Coordinator Bank Alfalah Limited
Mall Road Branch Saddar Rawalpindi
Web References:
http://www.linkedin.com/companies/bank-alfalah-limited
http://www.managementhelp.org/hr_mgmnt/hr_mgmnt.htm
http://en.wikipedia.org/wiki/Bank_Alfalah
http://www.bankalfalah.com/
42

HR Practices in Bank Alfalah Limited

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HR Practices in Bank Alfalah Limited

Name: Raheel Mahmood Qureshi

Registration No: 1432-408014

Class: M.B.A evening (HRM) 8th Qtr

Submitted To: Sir Pervaiz Nusrat

Overview of the Financial Sector in Pakistan

Introduction of Bank Alfalah Limited

Vision & Mission

Goals & Objectives

Product & Services

HRM Process in Organization

Functional Overview of HRM Process in Organization

Recruitment & Selection of Employees

Employee Training & Development

Employee Compensation & Benefits

Customer & Employee Problems & Solution

Appendices (Employee Questionnaire)

What are the HR Practices?

While Miller (1987) suggests that HRM relates to:

• Strategic business partner

• Recruitment (sometimes separated into attraction and selection)

• Induction, Orientation and On boarding

• Training and development

• Compensation in wage or salary

• Travel management (sometimes assigned to accounting rather than HRM)

• Payroll (sometimes assigned to accounting rather than HRM)

• Employee benefits administration

• Personnel cost planning

"Our core philosophy of honesty, transparency in customer dealings,

The portfolio concentrates on all aspects of

Conventional banking as well as the Financial needs of

corporate sector. Dynamic and high value product includes

Car Financing, Home Financing, Rupee Travelers Cheques,

Credits Cards, Debit Cards, on line Banking, ATM and

consumer durables. In addition to this, Islamic Banking

Division is a recent initiative, which operates as separate

branch. It offers Shariah Compliant products through a

“To be the premier organizations operating locally and

H.E. Sheikh Hamdan Bin Mubarak

Mr. Abdulla Nasser

Mr. Ikram Ul-Majeed

Mr. Nadeem Iqbal

Senior Executive Vice President

Executive Vice President

Senior Vice President

Assistant Vice President

Officers Grade I, II, III

Clerical Staff Non-Clerical Staff

Cashier Typist Clerks Guards Messengers

Goals & Objectives:

2. By the end of every accounting year there is an increase in deposits. As the

5. However, there is lot of work to do for successful implementation of the Islamic

 Lower Down Payment

Major features of Bank Alfalah Home Financing are Lowest

of “Home Buyer, Home Construct, Home Improver, Home

 Financing Limit : up to Rs. 10,000,000/-

 Equity Participation : 30% Borrower / 70% Bank

Rupee Travelers Cheques:

Bank Alfalah Visa Card is everywhere and globally

Accepted and welcomed at locations displaying the

VISA logo. It is accepted at nearly 30 million merchants

& 870,000 ATMs in more than 150 countries around the

Bank Alfalah Limited presents Alfalah Hilal Card, the first

To provide enhanced and value added products to

Name: ________ Department: _