impact of downsizing in hbl

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


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.

Institute of Business and Technology


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.



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



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




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

17



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

18



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

19



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

22



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

23



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

24



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

25



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.

26



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

28

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

performance



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.

29



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.

31



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

32



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

33

Strategy

Structure

Culture/ People

Technology

Products



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

35



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

36



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.

37



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

38



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

39



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.

41



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

43



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

44



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

45



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.

46



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.

47



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

51



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 handshake 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

57



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

61



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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http://jobsearch.about.com/



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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http://www.google.com/

http://www.docstoc.com/docs/9505193/Habib-Bank-Ltd-Pakistan

http://en.wikipedia.org/wiki/HabibBank



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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impact of downsizing in hbl

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