3661565 report on organizational behavior of nib bank 2

8/6/2019 3661565 Report on Organizational Behavior of NIB Bank 2

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LETTER OF TRANSMITTAL

May 31, 2008

Mr. Retd. Cdr. Tabassum

Teacher, Organizational Behavior

Bahria University

Karachi. Sir:

We herewith present our Term Report authorized by you as a requirement for thiscourse.In this report, we have tried to provide analysis on organizational behavior of NIB Bank.

We hope we have covered all that was required for the report.

If there be any clarification demanded, we would appreciate a call from you to our groupmembers.

Sincerely,

Maaz Khalid

Muhammad Usman Badar

Muhammad Zain

1 ORGANIZATIONAL BEHAVIOR


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HISTORY OF THE NIB B ANK :

NIB Bank Limited started as NDLC-IFIC Bank Ltd. which was incorporated in March2003 as a public limited company. It started operations in October 2003 when all assets,

liabilities, rights and obligations of the former National Development LeasingCorporation (NDLC) and Pakistan operations of IFIC were amalgamated with and intothe bank with a paid up capital of Rs.1.2bn. In April 2004 the Pakistan operations of Credit Agricole Indosuez were also amalgamated with and into NIB. In March 2005Temasek Holdings of Singapore acquired 25% shareholding in NIB Bank, through BugisInvestments.

This shareholding was further enhanced to over 70% in June '05 following an increasein NIB's paid up capital to Rs.3.4bn.

NIB Bank has since grown rapidly from a base of 2 branches in 2003 to 45 in the 4th

quarter of 2007. Total assets have grown from Rs.9bn in December 2003 to Rs.87bn(excluding acquisition of PICIC through rights) as of September 30 2007, a CAGR of 85%. Loan growth has been equally rapid, increasing from Rs.7bn to Rs.43bn in thesame period (a CAGR of 64%), resulting from successes in both the commercial andconsumer business.

Deposits for the same period have grown at a CAGR of 95%, reaching Rs.45.3bn. Theoverall client base of NIB has also witnessed a tremendous growth in the same periodas of September 2007; from a few thousand to over one hundred thousand.NIB Bank'svision is to rank amongst the top 5 banks in the country.

Therefore towards end of June 2007 it acquired majority shares of PICIC with the aim of merging PICIC and its commercial banking subsidiary PICIC Commercial Bank Limitedinto NIB . The acquisition was financed through the country's largest private sector rights issue, with resultant increase in NIB's paid up capital to Rs.21.4bn. The PICICacquisition has bought with it another subsidiary "PICIC AMC" and an affiliate "PICICInsurance". NIB already has a shareholding in NAFA, an Asset Management Company(AMC); thus its asset management business will now also be increased, withdiversification in the insurance business.

The legal merger of PICIC, NIB & PCBL took place on December 31, 2007, once allregulatory approvals were in place. NIB Bank is led by Khawaja Iqbal Hassan,supported by four business heads and ten business enabling function heads. Themerger has resulted in a vastly expanded network of 240 branches and total assets of



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over Rs.185bn. Consequently NIB has the second highest paid up capital of aroundRs.27.5bn and ranks number 7 amongst commercial banks in terms of distributionnetwork. Merger synergies will accrue through lower cost deposits, enhanced customer service delivery channels and overall improved efficiencies. These would provide acompetitive edge in the face of increasing competition. Temasek Holdings remains thelargest single investor in NIB Bank.This merger is one step forward in consolidating the banking sector as envisioned byState Bank of Pakistan and enhancing FDI as per the Government of Pakistan'sobjectives. The powerful franchise of the three merged entities has now been broughttogether to form a large and powerful bank. Going forward management is confidentthat the combined bank will be a top performer delivering a wide range of financialservices through an extensive branch network. The asset management arms andinsurance affiliate are also expected to perform well and provide an attractive dividendstream.

GOAL S ETTING THEORY :



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Now the question arises why in general the answer was different instead of havingmajority satisfied with the standards. The reason is that those 32% employees whowanted to decrease the standard marked greater difference on the scale we providedwhich affected the final result but the analysis shows that the majority is satisfied withstandard of the goal sets for them.

But very few of the employees answers led us to decide that employees wanted todecrease the standard of goals set for them by management.

But too much difficult goals can also de-motivate many employees. Company should setthere goals that there employees expect to achieve.

EMPLOYEE INVOLVEMENT P ROGRAMS :

A participative process that uses the entire capacity of employees and is designed toencourage increase commitment to the organization success. Employee involvementprograms include the following.

Participative management Representative Participation



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Quality circles Employee Stock Ownership Plans.

Participative Management:

An open form of management where employees have a strong decision-making role.Participative management is developed by managers who actively seek a strongcooperative relationship with their employees. The advantages of participativemanagement include increased productivity, improved quality, and reduced costs.

ANALYSIS :

To what extent you and your colleagues feel that you can make decisions and solve problemswithout checking with your managers?

No responsibility 1 2 3 4 5 6 7 8 9 10 Expected responsibility

Scores- - 4 2 7 9 3 - - - E- - - - 3 8 8 6 - - D

We asked the question from the employees to what extant you and your colleagues feelthat you can make decisions and solve problems without checking with your managers?Basically this question is related to participative management that is one of the types of employees involvement program to increase the involvement of employee in decisionmaking process. After analysis of the questionnaire we found that the currentparticipation level in NIB Bank is 48% this shows that the employees are authorized tomake decisions for routine works or in normal situations but not in critical situation.

However, the rating scale in our questionnaire suggests that employees wanted to betrusted and allowed to make decision to further extent by 20% more. Participativeprogram are also very helpful to increase the moral high and productive of theemployee. In participative management employees are the trusted by the managementand also increase the management confidence on their employees. Participationincreases commitment to decision. Employees are less likely to undermine a decision atthe time of implementation if they share in making that decision and participativemanagement makes employees job more interesting and meaningful to them andparticipative management increased productivity, improved quality and reduced costs.

MOTIVATION :

The process that accounts for an individual, intensity, direction and persistent effortstowards attaining a goal.Reward systems:



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The only way employees will fulfill your dream is to share in the dream. Reward systemsare the mechanisms that make this happen. "However, reward systems are much morethan just bonus plans and stock options. While they often include both of theseincentives, they can also include awards and other recognition, promotions,reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you.

ANALYSIS :

We asked the question related to rewards that how rewards motivate employees in NIBBank and we found that there are different kinds of rewards NIB Bank gives to their employees which are as follows:

Cash Bonuses Promotions Make team leader ESOP Increment in salaries Allowances like (Fuel allowance, mobile allowance)

We found one very different kind of reward in NIB Bank that they motivate their employees whose performance is not up to the mark by giving them the salariesequivalent to the market value of the any other employee of same rank so as tomotivate their employee.

We asked the question from the employees related to reward system that to what extentthey are being recognized and rewarded on their good performance and how theserewards motivate them to work. We ascertained that most of the employees in NIB Bankare satisfied but very few of employees showed that there are not rewarded for their performance but the overall result is positive and this shows the level of motivationemployees get from rewards. Many of the employees told us they are being rewardedafter accomplishment of their sales target in such a way that their management takethem to the picnic or invite them for dinner and the rewards like picnic and dinner fromNIBs management is being rewarded most frequently.

And other very interesting thing which we found in NIB Bank is that their managementdoesnt fire their employees even their performance level is not up to the standard of thecompany. For example if an NIBs employee continuously does not achieve its target for the period of three months the management does not fire that employee and we cansay that this is kind of surety from NIBs management to its employees and this kind of relaxation motivate employees a lot and employees secure and they are not alwaysthreaten from their management to achieve sales target.



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Here we also want to share that in NIB Bank we did not find the employee recognitionprograms like (employee of the year, employee of the month) and we feel that this kindof recognition program can also increase the level of motivation and productivity of employees of NIB Bank.

But in whole we discover that the employees of NIB Bank are very much satisfied fromrewards that are being given to them and the rewards in NIB Bank is based on theperformance of the employee except one that we mentioned above and in NIB Bankmost of the rewards are given to employees are of monetary nature and Management of NIB Bank continuously appreciates the good work done by the employees for theachievement of goals, which motivate the employees to worker harder for theachievement of goals.

LEADERSHIP S TYLES :

From Mahatma Gandhi to Jack Welch and Martin Luther King to Rudolph Giuliani, thereare as many leadership styles as there are leaders. Fortunately, business people andpsychologists have developed useful, shorthand ways of describing the main leadershipstyles that can help aspiring leaders to understand and adapt their own styles andleadership impact.



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Whether you are managing a team at work, captaining your sports team or leading amajor corporation, you leadership style is crucial to your success.

10 of the most frequently talked-about leadership style are as follows:

1. Autocratic leadership2. Bureaucratic leadership3. Charismatic leadership4. Democratic leadership or Participative leadership5. Laissez-faire leadership6. People-oriented leadership or Relations-Oriented leadership7. Servant leadership8. Task-oriented leadership9. Transactional leadership10.Transformational leadership

ANALYSIS :

Key: 1 = Never; 2 = Seldom; 3 = Occasionally; 4 = Often; 5 = Always

S.No. QUESTIONS SCORING1 2 3 4 5

1 Tells group members what they are supposed to do. - - 4 18 32 Acts friendly with members of the group. - - 3 5 173 Sets standards of performance for group members. - 2 5 12 64 Helps others feel comfortable in the group. - - 4 8 135 Makes suggestions about how to solve problems. - 2 4 6 136 Responds favorably to suggestions made by others. - - 6 10 9

7 Makes his/her perspective clear to others. - - 2 16 78 Treats others fairly. - - 2 5 189 Develops a plan of action for the group. - 1 14 7 3

10 Behaves in a predictable manner toward group members. - 3 12 2 8

We asked different questions relating to the leadership style from NIB Bank employees

to know which leadership style their leader uses and we found that two of the leadershipstyles that are task oriented and people oriented or relations-Oriented. The results wegot from employees of NIB Bank that 53% of the employees feel that their managersare relationship oriented leaders and remaining 47% feels that their managers are taskoriented leaders so this shows that the NIB Bank has got the combination of leadersthat are task oriented and relationship oriented. This shows that NIB Bank have theleaders that perform better in all situations and can manage their teams more effectivein favorable conditions and also in very unfavorable conditions.



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P ATH GOAL THEORY :

Houses PATH GOAL THEORY describes how leaders can motivate their followers toachieve group and organizational goals and the kinds of behaviors they can engage into accomplish that Path Goal theory suggests that effective leaders follow threeguidelines to motivate their followers. The guidelines are based on the expectancytheory of motivation. Effective leaders who follow these guidelines have highlymotivated subordinates who are likely to meet their work goals and perform at highlevels.



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Determine what outcomes subordinates are trying to obtain in the workplace. For example, what needs are they trying to satisfy, or what goals are they trying to meet?After gaining this information, the leader must have control over those outcomes or over the ability to give or withhold the outcomes to subordinates.Reward subordinates for performing at high levels or achieving their work goals bygiving them desired outcomes.Make sure the subordinates believe that they can obtain their work goals and perform athigh levels. Leaders can do this by showing subordinates the paths to goal attainment(hence the name path goal theory), by removing any obstacles that might come alongthe way, and by expressing confidence in their subordinates capabilities.

House identified four types of behavior that leaders can engage in to motivatesubordinates:

Directive behavior (similar to initiating structure) lets subordinates know whattasks need to be performed and how they should be performed.

Supportive behavior (similar to consideration) lets subordinates know their leaders cares about their well-being and is looking out for them.

Participative behavior enables subordinates to be involved in making decisionsthat affect them.

Achievement-oriented behavior pushes subordinates to do their best. Suchbehavior includes setting difficult goals for followers, expecting high performance,and expressing confidence in their capabilities.

ANALYSIS :

We designed a different questionnaire especially for the TOP MANAGEMENT OF NIBBank and the questions were related to PATH GOAL THEORY as the questionnairebelongs to the top management so we asked four top level managers of NIB Bank to fillthis questionnaire list of their names and designation are given below:By studying our questionnaire we found different behaviors of leadership and therecontribution in the organizations behavior. We found different results for each behavior after analyzing the answers of our respondents which are given below:

Directive Leaders Behavior:

The most contributive behavior in leadership behaviors in NIB Bank having 27% sharein leadership behavior was found to be directive behavior which is being frequently usedin the organization we targeted. The benefit of using directive form of leadership which



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is characterized by greater control, defining what needs to be done, allocating resourcesand establishing clear expectations.The directive leadership behavior takes a more pragmatic approach to handling affairsin NIB Bank and is characteristically utilized in corporate turn-around situations.

Supportive Leaders Behavior:

The second most contributory behavior in leadership behaviors in NIB Bank having 26%share in leadership behaviors was found to be supportive behavior the results obtainedshows that supportive behavior used in NIB Bank is almost the same as the use of directive leadership behavior with having difference of only 1% which is not a very bigfigure.

Participative Leaders Behavior:

Participative leadership behavior is the least used behavior in NIBs culture with having23% this shows that the NIB Bank leaders do consult with their subordinates whilemaking a decision but at low frequency as compared to other PATH GOAL leadershipbehaviors.

Achievement Oriented Leaders Behavior:

The third most contributory behavior in leadership behaviors in NIB Bank with havingpercentage of 24 this shows that the leaders of NIB Bank set challenging goals for their subordinates with low frequency but they expect from their employees to perform attheir highest level.The results of our analysis shows that there is no such big difference in leadershipbehaviors used in NIB Bank and this is a very good sign for NIB Bank that their leaders

manage their subordinates according to different situations with different leadershipbehaviors.

NORMS :

Norms are shared group expectations about behavior and how members ought tobehave.Norms provide groups with control and predictability and give members a sense of security and comfort. Norms are also the way we express values, attitudes and beliefs.

Norms put boundaries on members that may be narrow or wide.Many norms in organizations originate from management expectation or from work rulesand procedures of the formal organization. They develop and operate in informalgroups. Many central work group norms revolve around productivity. Norms can putlower and upper limits on productivity. Controlling productivity not only spread the workought to more people for a longer period, but also prevents management from rising itsexpectation.



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Some organizations have norms emphasizing social concern for employees this normfoster taking care of people who needed or other wise contributing to the quality of anemployees life at work. Management can foster many norms that contribute toorganizational success, such as norms effecting work quality, helpfulness or customer relation. A norm of secrecy may be critical to keep competitors from stealing ideas.

ANALYSIS :

Norms are of four types. The one we quire about is social norm. The reason of selectingsocial norm is that our culture is based on collectivism so the importance of socialnorms is very high. The situation of norms in NIBs culture is fair enough according tothe result of our questionnaire most of the employees follows the norms set by theorganization and they are satisfied with them, but we found some employees who arewilling to improve the conditions i.e. norms the calculated value of there willingness isabout 25%. The major factors of social norms are friendliness, trust and mutual support.According to the employees in NIB Bank the conditions of trust and friendliness arepretty good and they are willing to increase mutual support.

It is necessary to emphasize on social arrangement norms in country like Pakistanbecause of its collectivism culture and these norms helps the organization to get theparticipation of their employee in positive manner to achieve the goals set by theorganization these kind of norms also motivates the employees to remain inorganization because of friendly culture in organization social arrangement norms alsohelps the employees to interacts with each other in more friendly manner which willincrease trust among them and with there top management.

If these norms are valued by the management then it will positively affect employeesatisfaction and productivity and it will also enhance the organization culture

CONFORMITY :

Conformity can be defined as a change in a persons behavior or opinions as a result of real or imagined pressure from a person or a group of people.

Who does Conformity affect? Conformity can affect people in all different ways, positively and negatively.In task-specific situations, those who are led to believe they do not have the requiredaptitude, their tendency to conform increases.Individualistic societies are less likely to conform than collectivistic.

How does Conformity work? An individual will most likely conform if:



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The majority consists of experts The members of the majority are important to the individual The individual can relate to the majority on some level--there are similarities

between the individual and the group

ANALYSIS :

Through our questionnaire we analyzed the pattern of answers given by employees andwe found many similar answers in regard of questions and it shows greater extend of conformity among employees of NIB Bank as they have almost marked similar optionsgiven in each questions of our questionnaire. The level of conformity shows there goodrelations and understanding with each other which also shows that they will not leaveeach other in hard times but on the other hand the high level of conformity indicates thedanger of employees saying always yes to others decision instead of thinking criticallyabout it and there might be a chance of employee saying yes under pressure in the fear of loosing group and may result in loss of any useful idea.

After Aschs study about conformity, in the world the conformity is decreasing as thelevel of knowledge and awareness are increasing and the result of our questionnaireshows high level of conformity, we can suggest the reason collectivism culture of Pakistan

TEAMS :

A group whose individual efforts result in a performance that is greater than the sum of the individuals input.

Guideline for team leaders set by NIBs management:

Definition :

Has a natural authority, generates commitment and builds team cohesiveness by setting a clear vision for the team, reflected in core values.

EFFECTIVE BEHAVIOUR INDICATOR LESS EFFECTIVE BEHAVIOUR INDICATOR

MORE OF THIS LESS OF THIS



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Communicates frequently a realistic picture of futureplans so people know what has to be done and why?

Arrives at decision by consensus, where appropriate,to gain team commitment.

Is supportive of the team / individuals and helps inovercoming problems to achieve targets.

Leads by example; displays behavior which reflects thedesired work norms and values.

Spends time finding out the way individuals want to bemanaged and work together; adapts leadership bystyle to match.

Maximizes the available resource by constructing well-balanced teams; acknowledges and helps othersvalues the unique contributions of each member.

Identifies own leadership style and strengths, adaptsthese to specific situations.

Follows up with dissenters or blocker to containnegativity.

Takes independent decisions and asks theteam to follow instruction without questioning.

Waits for team to ask for information instead of proactively keeping them informed of the bigpicture.

Exhibits high personal energy when initiatingaction but does not follow through.

Talks about the theory and principles of leadership, yet not reflected in behavior.

Uses the abilities of staff for own personal andcareer gains; does not share benefits andpraise but passes on criticisms and blame.

Does not seek to identify and discuss thevalues of the team to ensure everyone is

working towards a common goal.

Avoid admitting own mistakes or limitations.

Guidelines for reducing conflicts between team members set by NIBs management:



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Definition :

The ability to pull together individuals or parties in conflict by diffusing emotions, identifying thecritical issues and helping got reach a compromise; keeps the focus on common objective tomeet both needs.



Confronts covert conflict; draws out sensitive issuesor relationships.

Uses all-round knowledge to manageinterdepartmental and intra-departmental conflicts.

Keeps the focus of conflict resolution on the longterm overall interests of the organization.

Facilitates open discussion between conflicting

parties.

Remains impartial when dealing with others; listento arguments of each party.

Adapts approach to the situation and the culture of the conflicting parties.

Lets conflict escalate before taking any action.

Seeks to diffuse conflict after listening to only some

of the parties involved; jumps to conclusions aboutothers based on earlier situations.

Adopts a singular style or strategy across differentcontexts.

Does not identify brewing conflicts from emotionalreactions.

Suggests own solution to conflict withoutidentifying the source.

Focuses too much on emotional aspects of theconflict rather than the solutions.

Conveys inconsistent messages to conflictingparties, thus resulting in the further confusions.

ANALYSIS :

After visited to NIB Bank we discovered that the NIB Bank employees comprised of self-managed works teams according to employees responses they feel greater level of



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responsibility on their shoulders and they manage the things like planning, scheduling of work, and assigning task to the member of team, control the pace of the work, makedecisions through discussion between the team members, take actions to solve theproblem and also interact with their customers and we found that the employees calledtheir colleagues relationship officer rather than sales officer.

QUALITY MANAGEMENT :

CREATIVITY

Definition :

Is able to conceive original, imaginative and valuable ideas to solve problems and improveprocesses.



Develops ideas and thinks through to an innovativeconclusions.

Questions traditional thinking in order to initiate newperspectives.

Builds on information and ideas provided by others.

Acts quickly to grasp and develop novelopportunities.

Improvises effective solutions when faced withambiguous and difficult situations.

Tests out ideas for practicality and feasibility.

Seeks out pools and thinkers and puts them

Prefers to use tried and tested methods to solveproblems rather than think of new and innovativesolutions.

Sees opportunities as risks; talks about thedangers and risks rather than the potentialbenefits.

Actions ideas giving appropriate thought only toshort-term benefits and immediate impact.

Is overly absorbed in own ideas; hence is not as

aware of the environment or important events asrequired.

Over relies heavily on past experience; does notthink laterally.



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together to generate ideas; uses tools andtechniques to simulate others creativity.

CONTINUES LEARNING:

Definition :

A strong personal commitment to self-development reflected in an underlying curiosity to knowmore about people, things, issues, stretching beyond what is routine or required job knowledge.





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Identifies skills needed for the future and takessteps to develop self and others.

Actively seeks professional developmentopportunities, both inside and outside theorganization.

Seeks opportunities to work with the others of diverse backgrounds, experience, viewpoints.

Has personally established on-going systems or habits for information gathering through

professional memberships, literature and contacts.

Sets clear personal development targets whichfocus on behavioral improvements as much asprofessional / technical skills.

Volunteers for assignments which contribute toindividual learning goals.

Accepts and seeks feedback from others; learnsfrom past mistakes.

Over emphasizes the importance of wonprofessional development at the cost of workpriorities.

Relies too heavily on own knowledge does notaccept constructive feedback.

Sticks to own area of expertise rather thanbroadening ones focus.

Develops oneself for tangible rewards rather thanmore and grow.

Waits for others to identify own development needs.

Considers skills lifelong; continuously resorts totried and tested methods.

Prefers to cover up mistakes rather than seekfeedback and learn.

CONCLUSION :



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After studying and a analyzing the results of our research on the various issues relatedto the organizational behavior within the organization that are affecting the performanceof its management and particularly its employee, followed by several general andspecific list of questions we asked and the interviews we conducted during our visit tothe two branches of NIB bank one on Tariq Road and other on I.I Chundrigar Road,we are able to draw out our conclusions about this report.

NIB Bank is a global bank which is also operating in Pakistan. The organizationbehavior regarding goal setting for employees we have concluded that the managementof NIB Bank is effective in setting goals according to the competition in the bankingsector of Pakistan. As the requirement of growing banking sector it is necessary to setchallenging and effective goals so as to become market leaders. Despite of settingchallenging goals the employees of NIB Bank are satisfied with these challenging goalsand performing well to achieve the goals which were provided to them.

The management style in NIB Bank is kind of participative management in whichemployees are given chance to share their ideas for decision making so the NIB Bank isutilizing its employees by getting different ideas from different employees this providesgreater chances for getting better and innovative ideas. Not only this but from thisactivity employees feel motivated because they think they also have the authority indecision making process and they are also a part of an organization. During theinterview of an employee NIB Bank he told us All the employees here are given title of relationship officer rather than any other designation and at the beginning of eachmonth the top level management visits every branch and arrange meeting with all theemployees of the branch and discuss the problems faced by every employee andimmediately tries to resolve the problem and this is the major motivating factor for us.For motivating their employees management uses different types of motivating tools theinnovative ones we found are ESOP (Employees Stock Ownership Plan) and the pay

plan for less productive workers. By providing ESOP the employees gains theownership of an organization and work hard not only for their benefit but also tomaximize the profit of the organization. The next thing about the pay plan for lessproductive workers the company motivate their employees whose performance is not upto the mark by giving them the salaries equivalent to the market value of the any other employee of same rank.

As the motivation and reward systems are up to the expectation of the employees sothe employees are very much satisfied and dont want to leave the organization.

The leadership styles in NIB Bank are mixture of both the task oriented and relationshiporiented but it is little lien towards relationship oriented leadership style. The leadersbehavior consisting of all the leaders behavior provided by Houses Path Goal Theoryhaving almost same percentages with very low variation.

Overall we concluded NIB Bank inherits strong organizational culture having values for leaders and as well as for employees and the organization behavior is up to the markfor any company being in Pakistan.



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RECOMMENDATION :

1. NIB Bank should offer training and development sessions for undergraduates;this will help NIB Bank in future while recruiting employees.

2. NIB Bank should reduce conformity by giving rewards to employees for suggesting more effective idea in the benefit of the organization this will not onlyprovide wider range of ideas but also act as a motivational tool for their employees.

3. NIB Bank should arrange extra curricular activities like cricket matches on inter bank level to further improve relations between employees as other organizationsare organizing (for example ABN Amro, Mobilink, etc.)

4. NIB should introduce Dress-Down day i.e. employees should be givenpermission to wear dresses other than formal dresses on certain days so as tomake them relaxed while work.


3661565 report on organizational behavior of nib bank 2

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