Table of Contents

Contents Page No

Executive summary 02

Problem Statement & Implements 03-12

References 13

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 Executive Summary
NDB Bank PLC and DFCC Bank PLC which were supposed to
merge under the Central Bank’s financial sector consolidation plan are now awaiting the
results of an evaluation conducted by a committee appointed by Prime Minister Ranil
Wikramasinghe.

With the merger of the both banks the Board of directors is planning to
redesign the organization structure. All the new managerial positions are expected to be
filled by internally competent officers.

So, I discuss what is the new selection process, what is the performance pay
and reward system they going to implement and what the other changes are they going to
implement through this case study.

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 Problem Statement and alternatives
1. With the merger of the both banks the Board of directors is planning to
redesign the organization structure. All the new managerial positions are
expected to be filled by internally competent officers. Explain a new selection
process, the Chief HR Officer should adapt in this respect.
Selection is the process in which candidates for
employment are divided into two classes-those who are to be offered employment
and those who are not.
Selection process is the process of making the choice of the
most appropriate person from the pool of the applicants to fill a job vacancy.

Selection Process

Screening of applications and short-listing

Conduct the initial or preliminary interview
Conduct the selection test
Check of references
Second/ Final interview
Medical examination
Actually, the organization expects staff that is being recruited for,
 Deliver current and future business need.
 Value creation for current and future.

Validation of selection process

Validation refers to how well a criterion of job success actually predicts

successful performance on the job.

Type of Validation

 Empirical Validity
Empirical Validity is established by collecting data and using the correlation
analysis which is to measure the relationship between dependent and independent
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 variables to determine the relationship between criterion predictor and the
criterion of job success.

 Content Validity
Content Validity requires a systematic analysis of the test that is to be used
in hiring new employees and job that is to be performed to determined whether
the content of the test contains a sample of knowledge, skills and behavior
necessary for successful performance of the job.

According to this case study, after merge the DFCC bank and NDB bank
they wanted to change their staff, because they have excess staff. So, they have decided
to redesign the organization. They are expecting to fill by internally competent officers.
Then, they have wanted a new selection process. Actually, selecting people based on their
ability to do the task required has long been established in the selection of military and
intelligence personnel.

The successful officer needed to show the following qualities:

 Leadership
 Adaptability to different situations,
 Ability to find a solution to a problem, and
 Ability to work as team member.

So, we can introduce new criteria for select the new managerial staff. We
can’t remove both bank managers. Then, first we should identify who are the most
qualified and experienced persons in these both banks. After we can select who are the
best performers and who like to take risks from them. We can select the person who has
ability in new intervention as well.

After that we can check the person who has taken more leaves and
absenteeism. After we should screen the applications which we selected persons who are
in the both banks. Then, we can interview them and recruit.

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 Assessment centre is a method for assessing aptitude and performance;
applied to a group of participants by trained assessors using various aptitude diagnostic
processes in order to obtain information about applicants' abilities or development
potential.

Assessment centers are a combination of job-related simulation, tests,

and exercises to assess job-related behavior and performance. The use of assessment
centers in human resource management extends to recruitment, promotions, training, and
leadership development.

Assessment center methodology has greater validity for promotion

and selection compared to traditional techniques. The reasons for the same include the
following:

• Assessment center tasks are developed based on job analysis, and as such are
inherently valid and proven as a better indicator of future success than other tools.

• Assessment center used for promotions usually extend over a long period and
cover a wide range of inputs that not only establish the candidate's competency in the
present job, but also tests the suitability of the candidate for new roles.

Process of Assessment Centre

 Job analysis
 Briefing
 Conducting exercise
1. Group activity
2. Case Study
3. Psychometric testing
4. In basket exercise
5. Role play
6. Interview
7. Aptitude test
8. Presentation

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 Actually, through this assessment Centre we can select the most suitable
candidates from the internal officers. So, we can get advantages using assessment centre.

Advantages- Assessment Centre

 Multi methods
 Multi Assessor
 Multi competencies
Having pre-determined competencies means that you know exactly what
to look for, there’s better focus and decision making is easier. Multiple assessors
are important to avoid bias or rating errors because the same assessors will not be
looking at the same participant all the time. Since all behavior is noted and
discussed before final ranking, there’s minimum room for error. Because multiple
methods are used there are different avenues for participants to display their
talents.

1) Considering the nature of the bank, propose a suitable performance pay and
reward system for Managerial staff and discuss the possible effects of such a
system.

Performance related pay system is a financial reward system for

employees where some or all of their monetary compensation is related to how their
performance is assessed relative to stated criteria. Performance related pay can be used in
a business context for how an individual, a team or the entire company performs during a
given time frame.

Actually, a money motivation in the form of incentives is needed to motivate

employees for superior performance. These incentives are paid over and above the
guaranteed wage based on input and time and results produced.

Then, let’s see what the objectives and features of performances related
pay:

 Cost savings

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  Re-structuring
 Quality improving
 Enhancement of commitment

Actually, these both banks had two cultures before merge the bank. So we
have to change the culture. So, managers have to adjust to one culture. Actually it is
difficult to change the culture at once. So, I think it is better to implement individual
performance related pay system, because this supports to change the culture and to attract
and retain high quality people. However, there are arguments and against individual
performance related pay.

Arguments of individual performance pay

 To recognize and reward better performance

 To attract and retain high quality people
 To improve organizational performance
 To focus attention on key results and values
 To motivate people
 To influence behavior
 To support cultural change

Against individual performance related pay

 Money by itself will not result in sustain motivation

 Financial rewards can de-motivate those who don’t receive them
 Often they are perceived to be unfair inadequate or badly managed
 They depend on accurate and reliable methods of measuring performance

Actually, with the merger of both banks we have to consider about the
managers in the both banks. Then, when we talk about the reward system we have to
concern the both banks managers’ needs, because some managers may be interested in
financial rewards, while others may be interested in non financial rewards.

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Financial rewards

 Bonus
 Allowance
 Pensions
 Wages and salaries

Non- financial rewards

 Praise for a good work

 Challenging work 
 Career opportunity
 Recognition
Basically, there are two types of incentive schemes as individual and group.
Individual method is based on a production standard against which, an employee’s output
is measured. A group method is based upon production standards against which the
proven output of a group of employees is measured. Now let’s see what the advantages of
individual and group incentive methods are.
Advantages of individual incentive scheme
 The employee is in business for himself.
 There is a high level of employee effort, high production and lowered cost per
piece.
 A precise analysis of each employee’s performance is gained.
 More accurate and consistent production standards are demanded.
 Employee can’t pass the buck for his efficiency.

Advantages of group incentive scheme

 Demands increased cooperation between employees.
 Simplifies payroll calculation.
 Permits greater incentive coverage at less cost.
 Improves the level of quality.
 Reduces absenteeism and tardiness.

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 So, I think it is important for these both banks to implement financial
and non financial reward system for the managers.

2) Discuss the aspects of “Balance Scorecard” technique that can be

implemented for the merged bank.

Balance scorecard is a strategic planning and management

system used to align business activities to the vision statement of an organization.

A Balanced Scorecard approach generally has four perspectives:

1. Financial perspective

2. Internal business processes and systems

3. Learning and Growth perspective (human focus, or learning and development)

4. Customer perspective

Financial
perspective

Internal
Customer business
perspective Balance Scorecard
process and
systems

Learning and
growth
perspective

Implementing the Balanced Scorecard system company-wide

should be the key to the successful realization of the strategic plan/vision.

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A Balanced Scorecard should result in:

 Improved processes

 Motivated/educated employees

 Enhanced information systems

 Monitored progress

 Greater customer satisfaction

 Increased financial usage

The entire balanced scorecard measurement system encourages

managers to actively engage with the strategy implementation process, rather than
simply monitor financial results. By specifying the vital process measures,
assessing them, and regularly communicating the organizations performance on
these criteria to employees, managers ensure that the entire organization
participates in strategy implementation. Therefore the balanced scorecard
approach makes strategy everyone’s business.

Actually, we have to concern about the customers,

financial, internal bank process and learning and growth perspective of these both
banks. So, we can approach these perspectives through the balance scorecard.
Therefore, I think that it is important for the merged bank implement the balance
scorecard.

3) Write a report to the Board of Directors, explaining, how Chief HR Officer

could contribute, in developing “Brand Value” of the Bank.
Now we have merged the two banks. So, we have to
concern about the customers in both banks, because they are very important for
us. Actually, if we retain our customers, we want to develop our brand value.
Truly speaking, Customers our main resource. Because of this we should be
responsible to protect them.

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 A brand is the consumer's gut feeling or perception of your
company or your company's products and services. And when enough people
share the same gut feeling or opinion, it becomes known as our bank of the brand.
“ Brand Value" is considered to be the net present value of the estimated
future cash flows attributable to the Brand. Brand value in the case of consumer product
brands can be measured through customer loyalty, staff retention/recruitment. So, first we
should concern about,
 How can we, as brand builders, make people's lives better?
 Do our customers really believe that we care?
 Do we build meaningful difference?

As I chief HR Officer, I think clarify the brand frame of reference

and understand the consumer’s purchase process in two banks and establishing
the context within which the brand really matters.
Actually, there are two cultures in these both banks. So, we have
to make adjust the employees for one culture. Otherwise it may be effect to the
image of the bank. Then, customers may be disappointed to deal with the bank.
So, first we should change the culture and build one culture for both banks.
After that we should inform the both bank customers about new
procedure of the merged bank and what are the facilities they can get.
Next thing is, we should retain the most active and talented
employees to attract the customers. Actually, the employees should be talent to
retain the potential employees, because they may be create wrong image about the
merged bank. Due to this reason, we should concern about the staff of the bank.
So, I think that these factors will be help to develop the brand
value of the bank.

4) Assuming that you are a manager in this bank, draft a speech to be delivered
in a customer forum, explaining your clients, as to how profitability could be
enhanced through improvement of “Productivity”.
Dear customers,

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 Today, I came to here to inform both banks customers how
profitability could be enhanced through improvement of productivity. Everyone
knows DFCC bank and NDB bank have merged. So, I think that you have many
problems to make solve. So, I’m going to talk about how to profitability could be
enhanced through improvement of “Productivity”.
First of all let’s see what the productivity is. Actually,
productivity is an average measure of the efficiency of production. It can be expressed
as the ratio of output to inputs used in the production process. So, we know that the key
initiatives that Sri Lanka can take to improve productivity. They are;
 Establish a supportive economic framework
 Encourage more saving and better investment
 Improve labour market flexibility
 Invest in developing the workforce
 Enhance productivity at the enterprise level
 Encourage and facilitate at the enterprise level

Actually,

1. Banking profitability depends on interest rates for asset and liability items, which is not
the same for one market interest rate.

2. Banking profitability depend on the user costs of all financial items, and user costs
depend on service charges, service premium costs and deposit insurance premiums, as
well as on interest rates.

3. The relative price changes between financial and non-financial items are taken into
account.

So, we intend to increase the interest rate and to introduce more

facilities to deal with us. Actually, these two banks had two procedures. So, we think to
analyze those procedures and implement effective procedure. Not only that the board of
these two banks has decided to introduce new technology as well. I think these activities
help us to develop our profitability. So, I think all of you will be with us forever. Finally,
I like to tell you that to believe us. Thank you.

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 References

www.google.com

www.wikipedia.org

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