SONERI BANK LIMITED SBL

Compensation & Benefits Project

Compensation Policy of

Perpared by: Anees Alwani(53133)

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SONERI BANK LIMITED SBL

Presented to: Sir Zia-urRehman

Letter of Authorization
November 23/2010

Dear Reader,

The Compensation & Benifits Course Instructor, Mr. Zia Ur- Rehman, as per the course requirement, has authorised us to conduct an elaborate study on the Compensation & Benifits practices at Soneri Bank. This report contains complete information about the activities of Compensation Policy of the Soneri Bank including critical analysis and recommendations. I hope you will find this report both informative and helpful in academic as well as practical disciplines.

Regards,

Sincerely,

Anees Alwani (53133)

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SONERI BANK LIMITED SBL

Acknowledgement
November 23-2010

Dear, Sir I am thankful to your valuable guidance and encouragement. And your directions have certainly helped me in completing this report in time. I would like to thank Mr. Jaffer Ali, Assistant Vice President & Head Compensation Benefits of Soneri Bank for providing us the opportunity to study their compensation policy Further I also like to thank all the people who have made it possible for us to prepare this report. They supported us through the whole journey of writing and collecting data of this report, from collecting of information till writing of the main research report. It was because of their immense support, that I have been able to successfully complete this report.

Sincerely,

Anees Alwani

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SONERI BANK LIMITED SBL 53133

This Project familiarize with Soneri Bank Limiteds profile, growth history and other necessary details. The basic aim of this project is to know complete detail about Compensation Policy

We have more time for you

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SONERI BANK LIMITED SBL

TABLE OF CONTENTS
S NO. PARTICULARS WELCOME IN SONERI BANK LIMITED INTRODUCTION TO SONERI BANK OUR PROFILE OUR MISSION OUR OBJECTIVES & GOALS OUR GUIDING PRINCIPLES OUR PRODUCTS AND SERVICES OUR OFFICES AND BRANCHES CLASSIFICATION OF STAFF EMPLOYEES PERKS AND BENEFITS PROVIDENT FUND GRATUITY HOSPITALIZATION / HEALTH INSURANCE GROUP LIFE INSURANCE BANK MAINTAINED CAR STAFF FINANCE FACILITIES OFFICIAL TRAVEL LEAVE POLICY MOBILE PHONE FACILITY SALARY AND COMPENSATION MONTHLY SALARY DISBURSED INCOME TAX ANNUAL BONUS INCENTIVES ON IMPROVING QUALIFICATION PERFORMANCE APPRAISALS AND INCREMENT TRAINING AND DEVELOPMENT EMPLOYEE PROMOTION JOB ROTATION GAP ANALYSIS VIEWS AND SUGGESTIONS FINAL THOUGHTS 16 20 PAGE NO. 04

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SONERI BANK LIMITED SBL

INTRODUCTION TO SONERI BANK

OUR PROFILE
Incorporated on September 28, 1991 the first Branch of Soneri Bank Limited formally opened doors for operations in Lahore on April 16, 1992 followed by Karachi Branch on May 09,1992. The bank now operates wide branch network spread all over Pakistan including the Northern Areas of the Country where no other private bank ventured so far. Expansion of branches is still going on based on a policy of maintaining a balance between the Urban and Rural areas with a view to offering services even in the remote areas of Pakistan. Pleasant and sophisticated atmosphere has been provided in the branches. SBL is one of the leading banks of Pakistan and has earned the reputation of a solid and conservative financial institution managed by Professional Executives. During the last 16 years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base and managing its non-performing loans via improved risk management processes. The essence of the business philosophy is to cater to the banking requirements of small and medium sized entrepreneurs, providing them qualitative and competitive services with emphasis on encouraging exports.

MISSION
Providing an opportunity to the masses to participate gainfully in the economic development of Pakistan in accordance with the governments aim of Islamization of the economy and promotion of the private sector. Mobilizing personal and corporate savings by introducing new methods of financing and re-channelizing economy for productive purposes such as development of industry and agriculture. Serving the common man and business community not receiving proper attention. Protect the interest of share holders through channelizing their financial resources to profitable avenues for investment and to that end: a. Maximizing dividend income for distribution among share holders; and b. Producing capital appreciation through increase in the intrinsic value

OUR OBJECTIVES AND GOALS

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SONERI BANK LIMITED SBL

To provide quality services to its customers through adoption of best practices and full exploitation of information technology advancements culminating at attaining a leading position amongst its peer banks.
GUIDING PRINCIPLES
Ensure that they are fully familiar with responsibilities, procedures, rules and regulations applicable to their respective job roles. Endeavour to provide courteous, efficient and quality service to the customers of the bank. Ensure that time and efforts are applied in the most judicious and productive manner. Seek guidance from seniors involving complex issues. Maintain complete secrecy of the affairs of the bank and its customers. Ensures complete adherence to Banks standard code of ethics.

PRODUCTS AND SERVICES

Soneri Bank bears the critical responsibility of leading the way forward in establishing a stable and dynamic Banking system replete with dynamic and cutting-edge products and services. We believe in adding values to our customers lives and businesses, through dynamic and competitive products and services that fulfill their needs. Soneri Bank offers a wide variety of products and services that are upto the highest professional standards. Over the period of time, these products are introduced to provide the best market services to the customers. Products Brochures are available in the branches, which may be consulted for updates on the Banks Product.

OFFICES AND BRANCHES

The Bank's Head Office is situated in the city of Lahore in Punjab, but its Central Office is located in Karachi since it is the hub of business activities in Pakistan. Presently, the Bank has a strong network of branches in all the major cities of Pakistan, fully automated and computerized and providing wide range of banking services. Moreover branch network will be extended from time to time to other cities of Pakistan.

The salient features and other detailed information about Products, Services and Branch Networks are available at the Banks website for which you may log on at

www.soneribank.com.
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SONERI BANK LIMITED SBL

CLASSIFICATION OF STAFF
All the Permanent Staff of the Soneri Bank shall be classified under the following categories; CATEGORY-I: Senior Executive Vice President / Executive Vice President. Senior Vice President. Vice President. Assistant Vice President. CATEGORY-II: Officer Grade - I Officer Grade - II Officer Grade - III Trainee Officer Junior Officer CATEGORY-III: Senior Assistants / Data Entry Operators / Teleprinter/Telex Operators / Receptionist Assistant/Cashiers/Godown Keepers/Telephone Operators Mechanics and other Technicians. CATEGORY-IV: Drivers, Scooter Riders, Electricians, (Possessing Wiremans Competency License), Messengers.

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SONERI BANK LIMITED SBL

EMPLOYEES PERKS AND BENEFITS

Employees are provided a wide range of benefits as per their entitlements as follows:

PROVIDENT FUND
All regular employees after confirmation of service, if wishes to become a member of provident fund will start contributing in staff provident fund @ 8.33% of their basic salary per month. The bank will contribute the same amount to the provident fund of employees. Banks contribution for Provident Fund will be started after 5 years of confirmed service without any interruption / discontinuation of service. Trustees of provident fund account invest this fund in different national and private institutions in accordance with government laws for ensuring maximum returns on the balances. At the end of each calendar year trustees of provident fund, send individual Provident Fund account statement to all members of the fund showing their total contribution and up-to-date markup credited to their accounts.

GRATUITY
Soneri Bank Limited also provides gratuity facilities to all its regular confirmed staff. The minimum period of eligibility for gratuity is five years of service with the bank, but in case of death of an employee in service this condition is waived by the Management. If an employee leaves Banks service after completion of minimum 5 years employment, he/she will be entitled to be paid gratuity equivalent to one basic salary for each completing year of service period with Soneri Bank.

HOSPITALIZATION / HEALTH INSURANCE

Soneri Bank provides Hospitalization Insurance coverage to all its regular and confirmed employees and their eligible dependants at its own cost. Such hospitalization coverage is provided as per the following plan.

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SONERI BANK LIMITED SBL Grade President SEVP, EVP, SVP AVP/VP Junior Officer / Grade I NCS / Supervisory Health Plan A-1 A B C D Hospitalization Entitlement (in Rs.) 125,000/100,000/75,000/65,000/45,000/Annual Maternity Limits (in Rs.) Normal Delivery 27,000/Caesarean 45,000/Normal Delivery 25,000/Caesarean 37,500/Normal Delivery 25,000/Caesarean 37,500/Normal Delivery 20,000/Caesarean 30,000/Normal Delivery 20,000/Caesarean 30,000/-

Following points may please be complied as under: Please return the letter/health card to HR Division of the staff member transferred from your Branch to some other branch. The employees may be advised to use the authority letters for hospitalization and the hospitals on the approved panel of Insurance Company must be given preference, the list of such approved hospitals are printed on the back side of the letters. In case of extreme emergency, if Non-Approved Panel Hospital is preferred, a prior approval, supporting with the evidence, is required to be sought from Insurance Company, routed through HR Division Needless to mention, the authority letters are issued to confirm staff members of the bank, in case any staff member who has not been issued the Insurance Company authority letter, the matter must immediately be referred to HR Division for doing the needful. The Insurance Company Health Questionnaire Forms, which were required to be filled in by the employees, are no more required for issuance of Insurance Company Health Authority Letters. Upon confirmation employee will be required to submit detailed information of Spouse and their Children on simple application form containing Name, Date of Birth, Relationship with Employee & Occupation of their Dependents

GROUP LIFE INSURANCE

All employees of the Bank are covered under the Group Life Insurance scheme. The policy covers both natural as well as accidental death and permanent disability. The individual employees coverage under the Group Life Insurance policy will be in accordance with existing criteria subject to change at the discretion of competent authority. The 50% Premium of Group Life Insurance is borne by the employee on monthly basis.

ENTITLEMENT OF BANK MAINTAINED CAR

All employees in the cadre of AVP and above are entitled for bank maintained car in accordance with their entitlement. Also Employees are provided with Petrol ceiling as details given below:

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SONERI BANK LIMITED SBL

Employee Cadre SEVP EVP SVP VP AVP Executive On Contract

Petrol Ceiling 750 Liters 600 Liters 400 Liters 200 Liters 150 Liters Provision of Banks Car with petrol ceiling to the Executives appointed on contract will be at the sole discretion of the President.

STAFF FINANCE FACILITIES

(1) House Financing Scheme : The house finance loan shall be governed by the rules and only be allowed if; This loan will be allowed to all employees in regular cadre on completion of 3 years service continued service, after getting the property documents submitted by them authenticated by the Banks Legal Advisor, the charges of which will be borne by the employee. The finance will be allowed only once in a life time.

The service record of the employees is fair and nothing objectionable against him is recorded in his/her personal life. He/she has not availed house loan from House Building Finance Corporation or any other Corporation / Bank / Society. Fulfillment of any other conditions specified in individual or general cases by the President and BODs. The amount of house financing would be Rs. 4.0 Million or equivalent to 100 basic salary of concerned employee which ever is lower. The amount of said loan is recoverable in 20 years or period remaining to reach 60 years which ever is lower. (2) Motor Car Finance: The car finance loan is for Banks Executives and Officers with the objective to enable them to own a car for use by them / their families. This loan will be allowed to all employees in regular cadre, who have completed 02 years continued service. The maximum amount of car loan would be Rs. 1.0 million out of which minimum 15% of the cost will be paid by an employee and it is recovered in 5 years or remaining period to reach 60 years which ever is less.

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SONERI BANK LIMITED SBL (3) Staff Personal Demand Financing Scheme: All employees, regular as well as contract staff having a minimum 3 years continued service with the bank shall be eligible to apply for the facility. Amount of Finance must not exceed three times of applicants monthly gross emoluments or Rs. 300,000/- which ever is lowest. The amount of finance availed shall be repayable in maximum 36 equal monthly installments or remaining period to reach 60 years which ever is less. (4) Motor Cycle and Scooter Financing Scheme: All officers from Junior Officer to Officer Grade I who have 03 years continued service with bank are eligible to apply for the finance facility for purchase of new Motor Cycle / Scooter only. It will be allowed only once during the entire service. The amount such loan would be Rs. 60,000/- which is repayable in 3 years or remaining period to reach 60 years which ever is less. (5) Personal Computer / Electronic Items Financing Scheme: All officers from Junior Officer cadre and above and Executives who have 3 years continued service with Bank are eligible to apply for the finance facility for purchase of a personal computer and Electronic Items. It will be allowed only once during the entire service period with the bank. Staff will have to pay 10% of the price of Personal Computer or Electronic items from his own resources and the balance will be created as loan of Rs. 60,000/- which is repayable in 3 years or remaining period to reach 60 years which ever is less.

OFFICIAL TRAVEL
Soneri Bank makes reasonable arrangements for accommodation and travel for employees proceeding on official duty to another Station / City / Country. The hotel accommodation arrangement would be according to employees designation / grade as per the prevailing policy. In addition to hotel accommodation, employee will also be paid daily allowance to cover expenses of food, laundry, conveyance etc. during their stay on official duty. Such daily allowances are paid as per the prevailing rates which are subject to change.

LEAVE POLICY
Employees are entitled for following leaves : Casual Leave : Employees will be entitled to 10 days casual leave in a calendar year and unavailed causal leave will be lapsed. No employee shall proceed on any casual leave unless he obtains prior sanction from the competent authority except in the cases where the reaons are beyond his control. No employee shall be entitled to avail more than 04 days casual leave at one point of time except in exceptional circumstance. Privilege Leave: In addition to above an employee shall be entitled, at full pay privileged leave for 30 days which will be earned on completion of one year service, without any break or interruption, in the service of the bank.. Unavailed privileged leave shall be added to the privileged leave account for the next years subject to a maximum accumulation of 90 days. It shall not be granted unless applied by the employee at least 10 days prior to the date of commencement of leave period.

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SONERI BANK LIMITED SBL

Maternity Leave: A female employee may be granted maternity leave in the manner at set out below, subject to production of a medical certificate from a qualified doctor alongwith the leave application. (1) Upto a maximum of 60 days: Either from date of confinement OR a maximum of 30 days before confinement and balance period after delivery. (2) Two times in total service. Hajj Leave: Upto a maximum of 45 days of Hajj leaves are granted with pay upon completion of alteast 5 years continuous service with the bank and only once in the whole tenure of service, which can be affixed/suffixed with the privilege leave due to an employee.

An employee can not claim any type of leave as a matter of right.

MOBILE PHONE FACILITY

Soneri Bank provide mobile phone facility to following staff of the bank. 1. 2. 3. 4. 5. 6. 7. 8. Senior Executive Vice President Executive Vice President Controllers of Branches Senior Vice Presidents Division Heads Functions Heads (need based on the recommendations of respective SEVPs) VPs and AVPs (need based on the recommendation of respective SEVPs) Chief Managers / Senior Managers and Managers of Branches.

SALARY & COMPENSATION

MONTHLY SALARY DISBURSED
Monthly salaries are paid on 28th of each month, if 28th of the month is Sunday or public holiday, the salary will be paid a day earlier. Staff is provided salary slips with details of salary break-up and deductions.

INCOME TAX
Income tax is deducted from the salary and other payables to the employee as per the Income Tax Laws in force. Employees are personally responsible for preparation and submission of their income tax return or any other personal income tax report, bank only issue income tax deduction certificates to the employee once in a year.

ANNUAL BONUS - 13 -

SONERI BANK LIMITED SBL All employees of the bank will be entitled to general bonus, the grant of which will be subject to profitability of the bank as the first condition and secondly, it will be at the sole discretion of the BOD to decide the amount of bonus to be paid and the manner in which it is to be paid.

INCENTIVES ON IMPROVING QUALIFICATION

Soneri Bank, encourages its employees to participate in competitive exams and enhance their professional qualification and job related skills. Bank gives cash award and incentives to its employees who pass IBP examinations. Cash awards to our employees on passing Stage-I, II and Part-II/Stage-III of the Banking Diploma Examination will be made on the following staggering scales with immediate effect alongwith the weightage in promotion as mentioned below: Cash Award on Passing No. of Attempts --------------------1st Attempt 2nd Attempt 3rd Attempt Passing Stage-I -----------------Rs. 50,000/Rs. 30,000/Rs. 10,000/Cash Award on Cash Award on

Passing Stage-II ---------------------Rs. 75,000/Rs. 50,000/Rs. 15,000/-

Part-II / Stage-III -------------------Rs. 100,00/Rs. 75,000/Rs. 25,000/-

PERFORMANCE APPRAISALS AND INCREMENTS

Every employees performance is consistently appraised by his Supervisor / Senior. However as per banks policy, Annual Performance Appraisal exercise is conducted, whereby all employees performance is formally appraised in accordance with the appraisal system. The basic aim of such appraisal system is to fairly evaluate employees contribution towards the achievement of banks business objectives and also to reward an employee for his/her good or outstanding performance or provide feedback if his/her performance is not upto the mark. After such Employees Appraisal exercise, annual increments are decided and salaries are revised accordingly. In case of fresh appointees, the minimum period of service to be rendered will be 6 months to qualify for the consideration of annual increment.

TRAINING AND DEVELOPMENT

Training and development of the employees is given high importance in Soneri Bank. Employees are considered a valuable asset and every effort is made to train and equip them in areas of Banking and Management. In pursuit of our above objectives, the Bank has established its own Training Centres at Central Office, Karachi and in Lahore. The both training centers are well equipped with multimedia and other facilities. Bank has employed highly qualified professional and trainers to impart training and development activities. The training and development activities are focused for new hires / trainees as well the existing employees. Based on the training needs assessment exercise, training programs are carefully designed and conducted for various levels of employees. Employees are also nominated to attend courses conducted by outside training organizations both within and outside Pakistan. A yearly Training Calendars prepared which is circulated to the all Branch Managers / Divisional Heads.

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SONERI BANK LIMITED SBL

EMPLOYEE PROMOTIONS
All promotions shall be made on the merits of each case and no employee shall have a claim or right to be promoted to any particular post or grade by virtue of seniority alone. Promotion to all categories and grades shall be made by the respective competent authorities in accordance with the promotion policy laid down from time to time. Passing of Institute of Bankers Examination and procurement of handsome deposits / business will constitute one of the consideration for promotion to higher position.

JOB ROTATION
Job rotation is one of the essential components of employees career planning and development. Job rotation broadens the vision, skills and capabilities of the employees. It also enhances the motivation level of the employees. In Soneri Bank, special attention is paid to this part of the employees grooming. In the normal circumstances, employees, could be rotated after spending about 03 years in a particular department / position / assignment.

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SONERI BANK LIMITED SBL

GAP ANALYSIS
The present competitive environment requires new strategies toward employee compensation and employee practices, and new methods of educating employees to the shifting competitive environment that has brought about the necessity for these changes. Employee Compensation plays a very fundamental part in motivating and retaining employees which is very essential for organizations growth. The goal of the compensation plan is to attract qualified employees, to retain those employees, and to motivate employees to direct their efforts towards achieving the goals of the organization. After going through the Compensation Policy of Soneri Bank Ltd, it appears that although a comprehensive structure is given related to employees pay and benefits but still there are certain gaps and improvement area which need to be focused. These gaps and how to address it are elaborated below:

Salary Survey

As per our discussion with the concerned executive in the Bank and also going through the policy document, it was felt the need of having market salary survey on regular basis. The Bank had participated in one survey some time ago but thereafter no survey was conducted nor was any participation made in any kind of salary survey. In the absence of such survey, it is quite possible that Bank is paying salaries based on its old salary scale which may not be aligned with market.

Recommendation for it
Bank should conduct or participate the salary/compensation survey on regularly basis and also wherever necessary make adjustment in salary scale and revise its benefit plan.

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SONERI BANK LIMITED SBL

Performance Award/Appreciation

Currently Bank has no established plan to spontaneously reward the employees to recognize their good performance or achieving their business targets. These demotivate good employees and they just pull back their best efforts.

Recommendation for it
In order to promote the excellence in the organization and to appreciate and motivate good employees who work hard and demonstrate good job, Bank should have such policy by which such employees should be rewarded immediately.

Employee of the Month

This is also a motivational tool adopted by many organizations and it is not part of Bank policy where an outstanding employee is appreciated for his good work

Recommendation for it
Policy for Employee of the Month is announced in the Bank which really encourages good employees to come forward and show outstanding performance. Such employees should be appreciated in front of other employees and a letter of appreciation as well cash award to be given to them. Also their pictures to be given in Banks newsletter.

Employee Bonuses
I came to know that bank is paying bonus to its employees based on bank performance & profitability. However very small amount is paid in term of bonus during the current year and last year. Further such bonus is paid to all staff without considering their individual performance.

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SONERI BANK LIMITED SBL

Recommendation for it
It would be appropriate for bank to adopt consistent policy for payment of bonus and it should be clearly link with the bank profitability. Secondly scheme of Performance Bonus should be introduce. This scheme will enable individual employee to get bonus based on his own performance.

Monetization of Car
At present bank maintained cars are provided to bank executives. This requires lot of record keeping, monitoring of cars repair expenses and other administrative.

Recommendation for it
As many other good organization has introduce the monetization of car, instead of providing bank maintained car. Under this scheme eligible executives are given certain amount or loan to buy the car. Usual repair and maintained of the car would be the responsibility of individual employee and they are paid certain amount of allowances to cater the monthly installment of car loan as well repair and maintenance of car. The bank would be benefited to keep away itself from big hassle of keeping and maintaining carfleed.

OPD Out Patient Department

At present only hospitalization facility is covered thorough insurance policy and no OPD outpatient department is covered which creates hardship for employees

Recommendation for it
Bank should provide OPD facility to its employees either by reimbursements of expenses incurred on OPD.

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SONERI BANK LIMITED SBL

Club Membership
Bank doesnt provide any club membership to its executives due to which its executives feel unhappy.

Recommendation for it
Club membership normally provided for having a recreation and health facilities. It is therefore suggested that all executives should be provided club membership.

Education Assistance Programs

Bank doesnt provide any educational assistance programs. As such many employee feel handicap for not pursing there higher education in view of financial difficulties.

Recommendation for it
Continuous education considered to be very important in todays highly competitive environment and knowledge society. Every employee as to progress and pursue his higher education for which bank has to support financially and otherwise. Bank like good organization should provide mark up free loan up to 30% of the total cost and remaining 70% of the cost is to be provided as education assistance.

FINAL THOUGHTS After my meeting with the concerned executive of Soneri Bank and going
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through the Compensation Policy, I feel that bank can make further improvement in its compensation policy as describe above which will go a long way motivating and retaining as well attracting best talent from the market.

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