CHANGE MANAGEMENT

PROJECT

SUBMITTED TO:
DR. PROF. ABDUL WAHEED
SUBMITTED BY:
USMAN FAHEEM L1F10MBAM0137
WASEEM BASHIR L1F12MBAM0198
TANZEEL NAWAZ L1F12MBAM1266
RASHID MUKHTAR L1F12MBAM0173
MUHAMMAD ABBAS L1F12MBAM0171

SECTION: C


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ACKNOWLEDGMENT

By the Grace of Almighty ALLAH, Who is the only source of knowledge and wisdom
bestowed to Mankind. The researchers seek peace for Prophet Muhammad (Peace Be upon
Him), who has always been a hope and source of knowledge for humanity.

Initially, we admit receipt of those people whose inspiration and support strengthened
and groomed me in a way, what I am today.

We acknowledge with deep gratitude the invaluable help of Mr.Siraj Muhammad, Fahad
Mujadad, for their valuable teaching. They taught me a lot of things and their suggestions and
cooperation enabled me to compose my efforts and learning in the shape of this report and
indeed their support and disseminated knowledge will help me to propel my career.

Finally, we owe entire to MY PARENTS whose prayers, Cardial Love and Guidance
diligently led me to success. We also acknowledge the love and prayers of my great well-
wishers Sisters, Relatives, Friends and especially beloved personality, whose prayers and heavy
weight of love provides me security and enhance my inspiration and vision.









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MCB BANK LIMITED
INTRODUCTION:
M.C.B Bank Ltd. unfolds 63 years of growth. M.C.B is not an overnight success story. The bank started
corporate life in Calcutta on July 9, 1947. After the partition of the Indo-Pak Subcontinent, the bank
moved to Dhaka from where it commenced business in August 1948. In 1956, the Bank transferred its
registered office in Karachi. Now the banks Principle Office locates in Lahore. The bank inherits a 63-
year legacy of trust in its customers and the citizens of Pakistan.
NATIONALIZATION:
In January 1974, the Government of Pakistan nationalized M.C.B, following the banks (Nationalization)
Act 1947, Premier Bank Limited merged with M.C.B.
PRIVATIZATION:
A wave of economic reforms swept Pakistan in the late 1990, introducing the need for privatization of
state owned banks companies. This was the first bank to be privatized in Apr 1991 and the bank was
purchased by a consortium of Pakistani corporate groups led by NISHAT Group.
M.C.B soon earned the reputation of a solid and conservative financial institution managed by
expatriate executives. Now M.C.B is one of the leading banks of Pakistan with a deposit base of Rs. 368
Billion and total assets over Rs.500 Billion.
It is our proud and valuable moment to present you with the extensive and critical investigative report
of M.C.B regarding our change management. It was indeed hard work dedicated by our team members
to this particular project since practice always thrills us and not to mention 15% of the total weight age
goes into this project.
We chose M.C.B for our project because 2 years back there was an extensive change in this bank
regarding pay scale. M.C.B is a bank which is highly disregarded for it HR management policies which
entails salary packages discrimination, extensive over time work with no reward for overtime, lucrative
payments to the top management, including middle level managers and not to mention it has the
highest turnover in contrast to all the banks.


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VISION STATEMENT






To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future.

MISSION STATEMENT




We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our customers.
In doing so, we ensure that our shareholders can invest with confidence in us.








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SUMMARY

M.C.B is the bank which has enormous problems with respect to HR policies. It is a common perception
that M.C.B has the toughest HR policies and doesnt reward its employees as the other banks do. It has
the highest turnover in contrast to other banks and it should be noted it has the highest intake of
personals too. Salaries are not lucrative at all for lower level staff, which is greater in number, however
the middle and top level managers and employees are well compensated. Seeing the intensifying
problem of the thefts, frauds, ignorance, dacoits, the basic reason was the tellers who sit on piles of
cash on a daily basis for more than 12 hours a day and they were treated the worst in all the categories
of grades and also in terms of salaries. MCB thereby in response to circular of recommendation by the
state bank of Pakistan gave special attention to such employees and decided to make another grade for
them called as OG4.

DISCLAIMER

We have done rigorous research to fulfill the requirements of the project and topic we have chosen was
indeed highly relevant and policies of which were highly qualified. It is hereby stated that we have
posted the figures in terms of approximately and have hidden the names and references of the top HR
managers whom we met solemnly backed by the reason of confidentiality which if broken will surely
lead to termination of the employees we name and lawsuit against us.











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PROBLEM DETECTED
The lowest level grade was OG 3 having the lowest salary and an abundance of work which was for the
lowest ranked executives. Most of the tellers/cashiers were not even part of this grade. They were even
less paid than all the OG 3. The work of a teller is the most hectic if we compare to nature of jobs of all
the employees in bank with immense pressure to manage the cash. Slight shortfall is charged to his
nothing value able salary. They were among those people who were recruited by the third party and
paid the lowest, most salaries as compare to all the employees. Imagine the scenario the starting salary
of this personal was usually 10 to 13k and the salary of tea boy or sweeper was around 7 to 10k. The
basic reason the salary being lower was that they were recruited by the third party and the third party
used to take commission directly from their salaries up to 3 to 5k. This was indeed highly in just and
people working on this post were highly dissatisfied. Word will never end for the injustice being done to
such people and it is obvious that such policies have grave repercussions as it happened in this case too.
Its a fact that most of the fraudulent activities, loot and dacoits happen under the nose of the cashier.
He is the one mastermind behind the scene of all such losses. The bank lost millions due to such
atrocities.
The basic reasons of such were the following
Low salaries
Low morale
Job dissatisfaction
Nature of work
Long working hours
No proper road map for promotion
No overtime payment
Plentys directly charged to their salaries
Recruited on contract (Can be fired at any moment M.C.B deem necessary)
High turnover of the cashiers/Tellers
Increase in no. of the errors of the errors committed by the tellers

If we put it in terms of reasons for change, then the above mentioned points are the best exclamation of
the internal and external factors which instigated this change.





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SOLUTION TO THE PROBLEM
This was not the only problem with M.C.B in fact; all the other banks were the victim of such due to their
own atrocities. However, seeing such defaming and acute problem the State bank of Pakistan issued a
circular to all the banks recommending to recruit cashiers/tellers on permanent pay role and offer them
reasonable salaries so that they can somehow make their both ends meet in order to lower the rate of
crimes, dacoits, frauds etc. It was apprehended by M.C.B at first place and they opted to follow this
recommendation.
They implemented this change in the following way.
Ultimately the prime step they took was to eradicate the role of third party recruitment and
they recruited them directly hence saving their cost from 2 to 4k per individual though their own
HR executives took great part in handling this affair.
They gave them permanent status of employment instead of contractual basis.
They boosted up their salaries from 2 to 6k hence they directed the cost saving of 2 to 4k to the
salaries of the employees.
More people were added to the work force of tellers in order to share the work load and
decrease the level of heftiness a teller used to face.
Different tellers were given different roles. For instance the clearing section, cash deposit &
payments, cheque book issuance and other chores were isolated in order to save teller from
tiredness.
They were given roadmap of the promotion criteria mentioning experience and qualification to
meet so that they can be moved to the next grade and increase the salaries accordingly.

RESULTS OF THIS CHANGE
The results of this change were indeed quite astonishing and fruitful for M.C.B by all means. Though
some of the managers were skeptical about the change they initiated as they were having the view of
the psyche of the people of Pakistan that no matter how better you pay them they always ditch you at
the end. This observation, however, failed and the results were far too fruitful as forecasted or stated
by the few executives that the Fruit to get from this tree is far fetched. They were highly successful
and till to date they are satisfied with their change. Following are the highlighted points of results

There was a dramatic decrease in the rate of frauds, dacoits, etc., which definitely saved the
bank from hefty losses.
Turnover was decreased.


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The ratio of work errors in the work done on the daily basis declined to a great extent.
Increase in job satisfaction level.
Job loyalty was increased too.
Increase in customer satisfaction too, as the customers no longer have to stand in long row to
be attended.
The work load was decreased.
High appreciation by the bank manager.

REASONS FOR FRUITFUL RESULTS
It is indeed worth mentioning that what actually was there in their newly devised policy of change which
led them to fruitful results far more than they expected. Reasons for this change are more of a common
sense which being used as recommended by the state bank of Pakistan. Let's analyze these reasons
fruitful changes
It's more of a common sense that if an individual is given a reward for his hard work the loyalty is
increased and it will not motivate him to earn money through unfair means. Same worked with M.C.B
tellers as they were not sufficiently rewarded in the past for their hectic work done. It was hard for them
to do the same job for 12k and the nature of the job so hard and punishing. Giving them more salary
was indeed promising enough to gain their loyalty.
The introduction of promotion road map was also the pivotal reason for success of this change as
previously there was no set target for promotion.
Another significant trait which led to success of this change was given permanent status of employment.
Now the tellers were no longer recruited on the contractual basis, which means that M.C.B cannot fire
them without proper notification. Even if M.C.B downsize/fire the teller they can switch to another
firm/bank on more lucrative salaries as it gives a positive impact on the prospect recruiter firm that this
employee had been on permanent employee of the previous bank.
The increase in the labor force and distribution of different duties indeed resulted in a decrease in the
workload of the tellers which enhanced their motivation and zeal to work hard.





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FUTURE OF THIS POLICY CHANGE
It is pivotal to mention here that this change has performed far more than expected and the results are
enormous in contrast to forecasted ones. Indeed the prime credit goes to State Bank Of Pakistan but
indeed the appreciation goes to M.C.B bank for initiating this change in form of strategy. M.C.B intends
to carve and polish this strategy more in order to gain long term sustainability of the firm. As giving the
tellers more salaries are far cheaper than bearing the loss of theft/fraud in the whole branch. Plus the
loyalty factors amplify the performance of the employees which in turn gives benefit to the bank in
many different ways.

PROBABILITY OF FALIURE
It would be highly irrational to mention that this particular change would fail as till to date it has not
failed and given far better results than the expectations of the top management. So the probability of
failure is very low and obviously they will not follow this policy in case of any failure.

OBSTACLES TO THE CHANGE
There was one major hurdle when the change was initiated with respect to tellers, having experience of
more than 5 years or so. Such tellers resigned voluntarily on the basis of salary discrimination because
all new tellers who were recruited at nearly 15k and most of them under 2 years of experience were
given the salary rise up to 15k. They were ranked as OG4 where as the old experienced people who
started working at the salary approx 10k and current salary was about 15 k. They felt amazed at this
change that new persons with experience to none are enjoying the same salaries as they are.
The result was there was a heavy turnover of the old experienced tellers. And surprisingly the M.C.B
didnt do much to halt this turnover because people who left were under qualified with less chance of
getting prompted to operation manager. People who were qualified stayed with M.C.B and kept on
waiting for their promotion for the operations manager. Now the bank is in stable condition with very
low turnover in terms of tellers.




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CURRENT STATUS OF CHANGE
M.C.B proudly having fruit for this initiation of the change and this change is on the hot line for the last 2
or more years. It would be hard to actually declare that this has been penetrated as a culture of this
organization. But yes, this change has stated the results far more than expected and M.C.B intends to
make this change as a part of the culture after monitoring it for some more time.

Bullock And Battens Theory
We relate our whole change process with the bullock, and batten theory. The theory consists of four
phases, we explain our change process with the help of these four phases.
Exploration:
In this phase organizations explores and decide whether it want to make specific changes to its
operations and if so, commit resources to planning the changes. In MCB the management identifies
problems (cashiers /tellers have less salaries and having no specific grades and also they are on contract
basis) because of this the ratio of the turnover is increasing and they involve in fraudulent activities.
These are the most common causes for this problem
Low salaries
Morale is low
Boredom and job dissatisfaction
The nature of their work
Long work hours
No proper road map for promotion
No overtime payment
Plentys directly charged to their salaries
Recruited on contract (Can be discharged at any moment M.C.B deem necessary)
Reason of lower salaries for cashiers is that they are recruited by a third party who takes commission
directly from their salaries up to 3 to 5k.
Planning:
In planning usually organizations collect information, establish goals and plan appropriate actions to get
rid of the problems. After identifying the problems the management gathers information how to tackle
this problem. Due to increase in different fraudulent activities by cashiers/tellers then state Bank of
Pakistan issue a circular (to give proper attention to such employees by giving rewards) so management

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of MCB bank decided to take in another grade OG4 for cashiers/tellers and the management will also
plan to eradicate the role of a third party, transfer from contractual status to permanent status and
proper road map for promotion.
Action:
In action stage the organization starts moving from its current to the desired level. In action phase MCB
bank implementing the change process according to the plan which they are prepared in the planning
stage.
Ultimately the prime step they took was to eliminate the use of third party recruitment and they
recruited them directly hence saving their cost from 2 to 4k per individual though their own HR
executives took great part in managing this matter. They gave them permanent status of employment
instead of contractual basis. They boosted up their salaries from 2 to 6k hence they directed the cost
saving of 2 to 4k to the salaries of the employees. More people were added to the work force of tellers
in order to share the work load and decrease the level of heftiness a teller used to face. They were given
roadmap of the promotion criteria mentioning experience and qualification to fulfill so that they can be
moved to the next level and increase the salaries accordingly.
Integration:
After the change process has been completed successfully, then the results for change are
communicated throughout the organization. In MCB bank the results of this change were successful.
Now this change has been penetrated as a culture of this organization and giving permanent status of
employment to tellers. In future MCB bank follow this strategy in order to gain long term sustainability
of the firm.

CONCLUSION
It totally unprecedented and highly unlikely for the MCB to implement any change regarding the HR
policies and more precisely, such changes which are directly linked to the job satisfaction of its
employees. MCB is the bank which is highly disregarded for its HR policies, especially when it comes to
staff below executives thought it was the best performing bank in 2013 with record of profits which
neither of the bank attained. This change intitative has worked well for MCB and till to date they are
enjoying fruitful results of this change and every organization should adopt changes in their HR policies
frequently keeping in view of the necessities. As it is said by the L Cohen
I balance on wishing well that all men call the world. We are so small between the stars, so large
against the sky, and lost amongst the subway crowd I try and catch your eye .