Management in a Business Context - Case Study Example

QNB and HSBC Name: Tutor: Course: Date: Introduction Human resource policies in the banking industry represent the vision to maximize on employee recruitment, development and management. The immediate interest is on selection, appraisal, teamwork, training, empowerment, communications, employment security and performance related perks. Improving performance in the banking industry demands proper reward to high achievers. These rewards can come in the form of career progression, financial compensation as well as other acknowledgements like tested-and-proven employee monthly awards. In the banking industry, a properly structured incentive system is a powerful tool for staff retention, especially in the front office, given that its turnover is disreputably high. Defined at the employee level, the solution is to link rewards directly to performance measures so as to ensure sustenance on hard-won improvements. Qatari National bank (QNB) and Hongkong Singapore Banking Corporation (HSBC) share a common market in Singapore and South East Asia (QNB Investor, 2001). In 2011, QNB was named the best bank in Qatar and the whole of Middle East during the banker Middle East industry awards and Retail Financial Services Awards. It also had the highest market capitalization. In HSBC, the commitment to performance appraisals is held on the premise that the practice will enhance organizational performance and sustainability of the bank in the Far East (Mick, 2007). Performance Management Performance measures HSBC currently has employee strength of 26000 managing diverse personnel globally. The company maintains a well rounded and balanced employment status providing an advantage to face all sorts of circumstances and issues. HSBC bank preserves the rights of employees and prioritizes on their issues. QNB Group’s presence on the other hand reaches its employees through a Management Information System (MIS) called EverSuite solutions (QNB Investor, 2001). It has associate and subsidiary companies in more than 26 countries thus providing elaborate products and services. It has more than 13,500 operating staff from over 570 locations which is half the number at HSBC. The employee performance measures used in both banks are pegged on daily productivity, customer service ratings and managerial appraisals in every quarter. In HSBC, the measures have been anchored on a platform of anger and frustration during the annual shareholder meetings. The bank is known to have a self-imposed target of awarding "underperformer" grades to ten per cent of its employees automatically to the staff worldwide (Ahmad & Schroeder, 2003). The "forced distribution" technique requires managers to apportion 10 percent of failures to employees of every grade. The performance measure is treated as outdated and requires reforms. This has lowered morale since statistics in 2009 showed that employee engagement had dropped from 71 percent to 68 percent. In QNB, the bank uses employee daily productivity as a tracking measure for sales and front office staff. The measures align employee objectives to company goals. The measures are in the form of Incentive Matrix based on formula based calculations for consistent and accurate payments (Becker & Gerhart, 2006). In HSBC, the measures have seen underperforming workers miss out on bonuses and pay rises worth thousands of pounds. This affects modest paid call-centre workers and branches owing to cost-cuts and redundancy (Mick, 2007). QNB has been able to track sales and operations attributed to each employee in expanding to countries internationally. HSBC behaves like any other British banks with similar systems where 8 per cent of all employers apply quotas to appraise staff. In QNB, even distribution technique ensures that it adheres and obliges managers to differentiate the various employees hence cutting out a propensity of line managers becoming over-lenient to under performers (Guthrie, 2001). However, this measure crow-bar staff into the wrong category leading to perceptions of unfair treatment. The balanced score card can have one employee scoring three and another four with a big difference in annual bonuses. In HSBC, measures have since been changed and no longer do employees term the bottom grade as "carparkers" (Mick, 2007). Motivation and Appraisal The two banks appreciates that employees are the back bone of their companies. They ensure greater commitment of the employee. They also know that appraisal and motivation reduces the gap between the management and the employees. Both have reward programmes that serve to increase the employee confidence and commit them towards the organization (Guthrie, 2001). The bank managers yield highly creative and productive results through employee motivation; financial enrichment offers, company incentives to motivate the employee for attaining its goals. In the two cases, managers motivate employees through elimination of organizational barriers by providing employees with respected loyalty. HSBC and QNB bank reward the employee with incentives, reward points, or gift to motivate them into achieving greater goals. HSBC bank gives warnings and attempts to improve the employee performance and avert quick terminations (Ahmad & Schroeder, 2003). In QNB, the annual staff appraisal is groaned by managers and employees fearing the method bring promotion and higher pay for those doing it right while reprimanding or even sacking those deemed under par. In HSBC, the element of appraisal makes the process of quotas more anxiety-inducing. The pre-determined employee proportion that automatically fails in spite of their performance is disappointing. Qatar National Bank (QNB) needed to motivate its workforce by adopting or deploying an EverSuite solution that necessitated automation, management, sales tracking and incentives payment to external and internal sales force. The system motivated QNB’s employees and sales force in return exposing its services and products to a number of customers (Guthrie, 2001). This was deemed to increase the profits, bank’s productivity, and return on investments. The company replaced the existing spread sheet system with one that tracks the Incentives payment and sales dynamically. The system targeted QNB’s external and internal sales force over a broad range of services and products. Both HSBC and QNB have successfully managed the front office and sales compensation procedure. QNB has proper incentive plans based on evaluation of retainer and commission calculation (Becker & Gerhart, 2006). Human Resource Management Models The two banks exploit the soft and hard models of HRM. HSBC uses the Hard model in cashing sections given that their functions are a routine which insists on meeting the demands using the available work force. Soft model is least employed since it is seen as more employee oriented and offers room for employees to grow inside the organization (Becker & Gerhart, 2006). QNB bank implements the Soft model of HRM that offers foremost deliberation to the employee. The bank develops the skills of the employees through continuous professional development (CPD) in Qatari higher institutions of learning. It boosts innovation and creative works. HSBC also follows this model of HRM for its employees and protect their rights to growth within the company (Ahmad & Schroeder, 2003). Teamwork and Competencies Development QNB provides employees with the opportunities to learn from each other. The managers are helpful and makes very difficult assignments look simple (Mick, 2007). Employees relate as co-workers and assist each other in most of the banking assignments. Team work is the most enjoyable part of the QNB banking job. Here, everybody plays a strong team role and offers their best especially when it comes to meeting deadlines. HSBC also makes employees to enjoy working in the organization (Koch & McGrath, 2006). The bank is at the forefront in developing and updating proactive and responsible business plans. This requires skills, experience and qualifications obtained within and without QNB Group. The non-financial and financial dimensions trains employees on specific marketing skills on various areas such as Financial, Customer service, operations, Risk and marketing research (Koch & McGrath, 2006). The HSBC Group provide its sales employees with competencies on monitoring, tracking, updating and reviewing all performance scorecards and individual business plans for support divisions and the business. The bank recognizes years of similar experience from other reputed Financial Institution as well as functional experience or diverse businesses. QNB appraises employees on the current and previous experience to facilitate corporate planning and performance Management. Both banks have a great practice in performance management, management Information Systems (MIS) and balance scorecard approach (Mick, 2007). Employees are taught to possess a great knowledge and understanding of the functions and activities of the different support divisions and the entire business. Every year, both banks rate employees on their analytical, evaluation, numerical, and planning skills developed. Preparation and administration of performance appraisals HSBC bank is ever keen on staff performance evaluation as a way of providing and delivering better services to clients. Performance evaluation initially establishes employee needs then followed by collection of employee views in order to meet the essential needs. Feedback on employee's performance is then administered (Mick, 2007). In QNB, evaluation has reduced the communication gap between the staff and high level administration. The bank allocates a reward programmed for the employees to improve on their performance. QNB’s employees broaden the opportunity to develop and offer more benefits to the company. Achieving targets is essential in both banks. The reward program is more enticing than the desire of the management to place employees on performance improvement programs. The company lends support more on employee who achieve company target more. Employees failing to achieve their targets are regarded as a burden to the company. QNB and HSBC monitors every performance of the employee and rate them based on the target achieved. QNB Company measures the employee's quantity and quality of work and evaluates their performance accordingly. HSBC has goodwill that is pegged on the quality work the employee performs. In this case, the company is keen on the employee activities. Both firms show consistency in the performance of their employees (Guthrie, 2001). They note that reliable employees show consistency in performance. It enables the firms to take decision on long term plans since the staff is consistent. Employee behavior and discipline The two firms are keen on tracking and monitoring the behavior of their employees. They monitor how their employees’ attitude and obedience cop up with managers, supervisors, and co-workers (Ahmad & Schroeder, 2003). Employee performance in attaining company targets is pegged on good behavior and discipline in the organization. Employees discipline is also dependent on the employee commitment to adhere to the company’s policies. Both firms company wants their employees to uphold firms’ policies in their work. Discipline promotes cost efficient on task completion (Mick, 2007). QNB and HSBC prefer staff that can control operational expenditure to achieve the set target. The companies set challenges to employees and check how they take up the challenge. The time consumed to do the task and quality of work done is monitored. Communication QNB checks the employee's feedback from their colleague which is a 360 degree feedback. The bank collects feedback from managers, co-workers and all involved with the employee at work. The feedback is taken while evaluating the employee performance (Koch & McGrath, 2006). The HSBC bank assesses the staff performance at consistent intervals while reporting their performance. These aspects are also considered during employee evaluation. They also adopt some methods for evaluating employee performance. HSBC and QNB evaluate employee performance through effective communication and maximizing on skills and knowledge of the employee. By doing so, QNB and HSBC obtain specialist workers for each function or department (Becker & Gerhart, 2006). Conclusion Performance management is a promising banking sector phenomenon affecting QNB and HSBC bank. As they strive to be high end achievers, finding its position among the top contenders requires proactive review of Human Resource Management function. The proper implementation of human resource strategy has promoted the organization to a new level of customer banking. HSBC and QNB have ensured that their employees become productive and innovative in upholding the bank policies. In the long run, performance management helps the two organizations to achieve their goals (Price, 2003). Therefore, today's competitive business world has made QNB and HSBC to achieve a major role in customer's satisfaction by way of reaching greater goals. Both banks have capitalized on performance management at the start of each business year by coming up with new schemes like corporate financial solution, investment banking, corporate banking, trade service, cash and payment management. These aspects are customer oriented hence QNB and HSBC bank increases the customer trustworthiness and business entity. Performance management ensures employees acquire skills and experience needed for attaining individual goals and organization goals (Mick, 2007). By implementing this, QNB and HSBC will have tied up their employee with their firms to review the target of company in posterity. References Ahmad, S. & Schroeder, R.G. (2003). The impact of human resource management practices on operational performance: Recognising country and industry differences. Journal of Operations Management, 21, 19–34. Becker, B.E. & Gerhart, B. (2006). The impact of human resource management on organizational performance: Progress and prospects. Academy of Management Journal, 39, 779–801. Guthrie, J.P. (2001). High involvement work practices, turnover and productivity: Evidence from New Zealand. Academy of Management Journal, 44, 180–90. QNB Investor (2001). QNB Annual report. Qatar Koch, M.J. & McGrath, R.G. (2006). Improving labor productivity: Human resource management policies do matter. Strategic Management Journal, 17, 335–54. Mick M. (2007). Human Resource Management HSBC Bank, Human Resource Management Journal, Vol 4 66-89. Price, A. (2003). Management in a Business Context, 3rd edition. London. Read More