TABLE OF CONTENTS

Executive summary

This report focuses on Human Resource Management (HRM) strategies and practices that are used by the Arab Banking Corporation in realizing the optimal capacity of its workforce. The bank has its headquarters in Manama, Bahrain. It provides wholesale trading services as well as retail banking services. The report will also explore some of the strengths and weaknesses that bank faces; available opportunities and some of the threats that have since affected the Mena region. The strategies applied in the HRM strategy will be looking to reduce the high employee turnover that has been experienced in the recent past. Some of the intervention techniques to be applied will also be outlined in the report.

Introduction

The Arab Banking Corporation (ABC) is one of the renowned international banks that offer exemplary banking services to the people that use it. ABC is a subsidiary of the Central Bank of Libya. The bank has its headquarters hosted in, Manama in Bahrain. This bank was incorporated in the year 1980 as a joint stock company. Through this, the company has been able to rise from levels to levels competing with some of the other international banks such as Barclays and Citigroup (Fathy, 2015). The slogan for the banks is Strengths and resilience, a tagline that has been demonstrated in the operations of the bank. As per financial statements of the year ended 31^st December 2018, the bank recorded a net interest income of $559 million. Further, the profit of the company was capped at $248 million which low compared to that in the year 2017.

The ABC bank offers a variety of services ranging from retail banking services, wholesale banking services, and investment banking. The company also covers a wider scope of the customer profile including personal accounts, group account, and institutional clients.

The Objectives

The objective of this report is to unravel the strategies and practices used by Human Resource Management in managing organizational performance. This will include the Recruitment and the selection process, the manpower planning, the selection process, and employee involvement. The report will also focus on detailing the impact of human resource management on the operational performance of the company. In addition, the report will explore the effects of both the internal and the external environments to the human resource management processes. The report will also look at the value that the HRM adds to the operational efficiency in the bank.

The Rationale

The reasons I chose to use this organization for the study are pegged on a number of factors. To begin with, the Bank operates over a wide region and it covers Europe, the Americas, GCC, MENA regions and also in Asia (Willy, 2016). The stability of the bank is yet another critical aspect of interest in this report since it outlines some strong points that it has been trading on. For these reasons, the bank offers a diverse representation of human resources management techniques and policies. The fact that the company originates in the Arabian States yet it has crossed the borders and seas to take its operations and services in the other regions of the world; offers a bigger opportunity to look into the strategies that it has been using.

SWOT Analysis

The Arab Banking Corporation operates within a framework of both the internal and the external forces which influence its performance. Some of the common strengths that this company operates on is the stable rating outlook. It benefits from the positive public image it has created over time. Secondly, the bank has a large geographic reach with a stable financial position; thus able to reach a wider client profile. ABC also has strong major shareholders which include the Central Bank of Libya, the Arab world and Kuwait Investment Authority. Also since it’s a universal bank, it rides on the economies of scale. However, some of the weaknesses of the bank include; overreliance on the customers in the Islamic nations who are mainly oil and natural gas exporters (Arif, 2016). Any adverse effects in these sectors can significantly affect the profits of the bank. The parent region of the banks often suffers sanctions from the United Nations something that can always adversely affect the performance of the bank. It is also a week performer in the retail banking sector. The ABC bank also has some important opportunities that it can explore to grow its operations in the regions. The bank can choose to expand its retail banking capability by expanding its network in the MENA region. It can also take its Islamic banking services to India, Malaysia, and Indonesia which are countries that have a huge Islamic following. Some of the threats that the bank faces in its operation are the rising Eurozone crisis, the political instability in the Bahrain region, and also the mounting protests in the region which affect the stability of the bank operations.

Human Resources Management Strategies and Practices used by the ABC

The ABC applies some crucial practices and strategies in attracting and in the management of its top talent. The bank has taken a strict interest in the quality of the workforce that it hires and works with. The HRM bank exercises some caution when it comes to the formation of the strategies to be applied in the HRM there are specific guidelines that it uses. This bank aims at attracting and retaining competent employees. The bank has worked towards removing the possible unfair labor practices that always seem to distract the employees from offering their best in performance. When it comes to the recruitment and the hiring process, the ABC bank strives to ensure that it recognizes and satisfies the individual needs of the employees. In this regard, the banks take a keen interest in the qualities of the person that they are considering to put on their workforce to ensure that they possess the right skills and experience for the job positions that they have.

For the manpower planning, the bank invests in carrying out the right job groups that would be used in classifying the employees in the right job fits so that that they can realize optimal performance. The selection and recruitment processes for the ABC bank forms the critical aspect of the bank since this is where the bank gets to take the new workforce (Craig, 2017). The entry stage which is the prime time for the recruitment process attracts the attention of all of the stakeholders since they get to decide the right talent that they need for the organizational objectives. The recruitment and the selection process is, therefore, an important time for understanding the organizational strengths. The banks get to determine the best fit in the human resource power that is needed to achieve the organizational goals.

Training and development is yet another important aspect of human resource management for the ABC bank. The staffs recruited by the company are equipped with the necessary skills to be able to take on the respective duties and responsibilities that they are assigned. The talent management process is a rigorous process that costs the bank yet very important to the performance. As such, the banks have maintained a culture of investing in sophisticated training programs and tools that help to boost performance capacity. The bank thrives on innovation. The employees are thus provided with an atmosphere that they can be able to think innovatively and positively contribute to the systems of the bank. The training and talent development process of the bank is composed of various tools and facilities which help to shape the mindset of the employees towards an innovative culture. They are trained to own up the operational technology and the systems that the bank uses its operations. In this regard, they are able to come up with ideas that help to revolutionize the workings in the bank.

The bank also maintains an optimal reward and compensation scheme that builds the morale of the workforce. The bank has consistently been paying employees salaries that are slightly higher than the competition offers. There are also lucrative perks that come alongside the salary for the different categories of their performance. The bank upholds the practice of rewarding the employees that have worked with it for more than 25 years. This practice has helped the company to reduce employee turnover. The bank also extends its rewards to the members of the family of its workers. Employees with children who show exemplary performance in public examinations are rewarded. This creates a sense of family bonding. The banks appear to be interested in the affairs of their employees and not just the labor that they can offer. The bond that is created between the bank and its employees is what makes it retain most of its workforce for many years. Finally, the ABC bank also offers s very attractive incentive bonuses to the employees who achieve their business targets. The employees that demonstrate exemplary service in their duty are rewarded accordingly to promote the good culture. This strategy has seen the company transform rapidly from a common retail banking institution into a multinational bank. The bank has been able to realize huge profits from the dedicated service offered by the employees.

The impact HRM has on Operational Performance of ABC

The operational influence of the ABC has been transformed by the motivated employee team that the company maintains. ABC sustains a strategy of ensuring that there is sustainable growth in the bank. The operational performance of the company is sustained by the fact the employees of the company stay motivated. Motivated employees are can comfortably deliver exemplary customer service. The human resource management force that the bank hold creates the needed support for the maximization of the profit of the organization. The quality of the business that the bank delivers to the customers is a representation of what they feel about their job. The external environments in the MENA region also make it very difficult for the bank to operate smoothly (Ding, 2008). To begin with, there have been protests in the region which have made it difficult for the company to get the right personnel. The protests in this region make it a challenge for the company to attract and retain a workforce from the global community. Also, the actions by the United Nations to freeze the accounts of the countries in these regions make it difficult for the bank to hire the right people for the job.

Challenges and Suggestions for Improvement

The ABC bank has been performing excellently not only in the MENA region but also on the global scale. As the first Arabian bank to go global, the bank has been efficient in the delivery of service to its clients. However, there continue to be inherent challenges that the bank faces in its human resource management. Firstly, the bank has a problem of retaining the workforce. Most of the employees fear because of the external conditions such as protests. Also, the rising political instability makes it difficult for the company to hire and retain a workforce for a long time. The employees fear for their safety and thus they would highly prefer not to work in the MENA region for a long time. Finally, since the bank is largely sustained by the oil and gas exporters as its major customers, any adverse conditions jeopardize the employee contracts. As such, most of the employee turnover situations have been occasioned by the lack of trust in the external business environment in the MENA region

Recommendations

For the ABC bank, there are a number of things that need to be done to stabilize the condition of human resource management. The bank should consider diversifying its retail banking services to other regions such as India and Asia which have a huge Islamic following. With the Islamic banking services that bank offers, it would be able to attract a strong workforce which will be willing to work not just in the MENA region but in the different subsidiaries scattered in various geographic zones. The bank should also strive to ensure the employment benefits and rewards offered to the employees, match the working conditions. The remuneration scheme applied should cater to the different diverse external conditions that they work in.

Conclusion

In a nutshell, the ABC which is a subsidiary of the Central bank of Libya offers exemplary services in the Islamic Mena region. The bank also has spread to the different regions of the world including Europe, America, and Asia. The HRM of the bank has incorporated different strategies and policies to ensure that the welfare of the employees is well taken care of. These include lucrative incentive bonuses, rewards for long-serving employees and best-performers rewards among many others. Still, the bank faces various challenges that need to be addressed for it to attain the full potential of its workforce.

References

Arif, S. (2016). SWOT ANALYSIS OF ARAB BANKING CORPORATION. Retrieved from http://www.managementparadise.com/sayed123/documents/15311/swot-analysis-of-arab-banking-corporation/

Craig, M. (2017). Human Resource Management Practices in Banking Sector – Assignment Point. Retrieved from http://www.assignmentpoint.com/business/human-resource-management/human-resource-management-practices-banking-sector.html

Ding, D. (2008). Strategic HRM practices and their impact on company performance in Chinese enterprises. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1002/hrm.20195

Fathy, Y. (2015). Company Overview of Arab Banking Corporation-Egypt (S.A.E). Retrieved from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=35777191

Willy, M. (2016). Arab Banking Corporation SWOT Analysis | Competitors & USP | BrandGuide | MBA Skool-Study.Learn.Share. Retrieved from https://www.mbaskool.com/brandguide/banking-and-financial-services/3183-arab-banking-corporation.html