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Conflict Management

[Submitted to: Mr Zeeshan Ali]


[Date: May 25, 2009]

Submitted By:
Faiza Zafar
Mariam Shamim
Mariam Siddiqui
Mohammad Saif
Naveen Zuberi
(Arranged in alphabetical order)
Bahria University
Karachi Campus
13 National Stadium Road
Karachi – 75260
TEL: 9240002 – 6
FAX: 9240351

Habib Bank Limited (HBL)


Mr. Amin-ul-Huda khan
DGM II, (SVP) May 8, 2009
Human Resource Management.

Subject: Assignment / Project Report

Dear Sir,
Bahria Institute of Management & Computer Sciences (BIMCS) is conducting a Full-time BBA /
MBA and BCS/ MS Program.
The students of BBA-6E Semester are required to submit a report on Conflict Management.
Following students require your cooperation for making the report which is to be submitted in the
Second week of May 2009.

• Faiza Zafar Email address: ideefixe8@hotmail.com


• Mariam Shamim Paracha
• Mariam Siddiqui
• Naveen Zuberi
• Syed Mohammad Saif

It will be very kind of you if you would arrange an appointment for this purpose, preferably
coming Saturday. Kindly reply on the email address given above. Thanking you in anticipation,
we will be looking forward towards your kind cooperation.
Yours Sincerely,

Zeeshan Ali
Senior Lecturer
Management Sciences

2 Bahria University – Karachi Campus


ACKNOWLEDGMENT:

In the name of Allah, the Creator, the beneficial and most merciful who gave us the
strength and wisdom to achieve our goal “The Report on Conflict Management”. We would
like to thank and acknowledge all the people who helped and guided us. In particular,
thanks are due to our conflict management teacher Mr. Zeeshan Ali and Mr. Amin-ul-Huda
Khan DGM II, (SVP) Human Resource Management HBL,ANNEXE, and the never ending
support of our families. It was a great experience for us. We toiled hard but we are rewarded
in the shape of this comprehensive and researched report.

Mr.Zeeshan Ali

3 Bahria University – Karachi Campus


Senior Instructor, Conflict Management
Bahria University.
Karachi.

Dear Mr Zeeshan Ali:


Here is the report on HBL: “Major Problems in resolving of conflicts facing an organization in
Pakistan” The term project assigned by you.

We have put our maximum efforts in collecting, interpreting and organizing the data in the best
possible way. This report is a combination of a lot of sincere hard work and dedication. But we
would like to point out in the beginning that the work you are about to see in this report is group
work. As the saying goes." coming together is a beginning, staying together is a process and
working together is success".

We are also thankful to the HBL staff which gave us valuable advices and to our friends and
family who were always there to back us up when we were down as this report was a very
arduous task.

We will highly appreciate any suggestions for improvements in this report and any queries
regarding it are most welcome. As nothing is perfect in this world and there is always room for
improvement.

Sincerely,

___________ _____________ ______________ ____________ _____________


Faiza Zafar Mariam Shamim Mariam Siddiqui Naveen Zuberi Mohammad Saif

4 Bahria University – Karachi Campus


TABLE OF CONTENT
SERIAL TOPIC PAGE
NO NUMBER

01 HISTORY 06

02 MAJOR TYPE OF CONFLICT IN HBL 07

03 DISPUTE RESOLUTION PROCESS 08-09

04 PROBLEMS IN DISPUTE RESOLUTION PROCESS AT HABIB 10-17


BANK LTD

05 RECOMMENDATIONS AND SUGGESTIONS TO IMPROVE 17-23


CONFLICT RESOLUTION PROCESS AT HBL:

06 CONCLUSION 24

07 APPENDIX 25

08 REFERENCES 37

HISTORY:
HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Its first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was

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built in 1972 to commemorate the bank’s 25th Anniversary.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to
dominate the commercial banking sector with a major market share in inward foreign remittances
(55%) and loans to small industries, traders and farmers. International operations were expanded
to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

On June 13, 2002 Pakistan's Privatization Commission announced that the Government of
Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights
to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389
million). On February 26, 2004, management control was handed over to AKFED. The Board of
Directors was reconstituted to have four AKFED nominees, including the Chairman and the
President/CEO and three Government of Pakistan nominees.
HBL has the largest Corporate Banking portfolio in the country with an active Investment
Banking arm. It encompasses product offerings and services in Retail Banking and, in recent
years, Consumer Banking as well.
HBL is expanding its presence in principal international markets including the UK, UAE, South
and Central Asia, Africa and the Far East.

RATING:
HBL is currently rated AA (Long Term) and A-1+ (Short term). HBL is the first Pakistani bank to
raise Tier II Capital from external sources.

PRIVATIZATION:
HBL was privatized in 2004 at the price of 22.4bn Rs. It was purchased by AKFED (Aga khan
fund for economic development) through a 3 step bidding process involving the notice of interest,
actual bidding and the take over process held on 24th of February 2004.
Although HBL was privatized in 1997 if looked back at the process of privatization it was
initiated way back in 1997 when government appointed Mr Shaukat Tareen as the president of
HBL. He introduced the foreign teams in HBL’s management which was the last effort made by
the government in order to restore the HBL’s management system in its proper condition.

MAJOR TYPE OF CONFLICT IN HBL:


Most of the major conflicts in HBL belong to the category of policy driven conflicts. After
privatization of HBL, it had a major change in its structure and policies. This change was
necessary to overcome key problems associated with the structure of the public owed company
such as:

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Over-staffing:
HBL before privatization had more than 31000 employees, management and non- management,
they aimed to reduce this number to 27000 employees with the help of its new policies.
Political Pressure:
Before privatization HBL was highly influenced by the governmental policies as it was the
largest financial institute under government control. The economic policies of the country were
also affecting the bank’s policies. The problem occurred mainly because of the unstable political
situation in Pakistan which was causing the huge fluctuations in governmental policies resulting
in the inconsistency of HBL’s policies which led to the inefficient results. The motive of
privatization was to make HBL as independent as possible.

THE CONFLICT:
Drastic transformation from public owned to private company gave origin to resistance from the
employees as a sudden change in structure was unacceptable to them as they were used to work
with previously defined policies and system. It was hard for the employees to accept the new
policies and overall system, they resisted as they felt that new policies were not employee
friendly and this clash of interest ultimately resulted in conflicts.
Example: HBL’s re-entrenchment program was one of the bones of contention between the
employees and the management. HBL’s aim was to create space for more non operational non
clerical, technology savvy staff to generate more effectiveness they aimed to remove the
permanent clerical staff and get them on contractual basis. This sudden change generated the
feeling of uncertainty and disrespect among the employees and resulted in a huge retaliation.
HBL however provided them with compensation, packages and even provided them new jobs in
other organizations but despite these efforts to gain the satisfaction of employees failed to gratify
employees and there are still few cases in litigation.

Other issue:
In 2002: HBL employees perceived that it is their right that their child / children get employed at
HBL but HBL followed merit based system and they were interested in hiring skilled employees
to satisfy the company’s as well as stake holders’ expectations.

DISPUTE RESOLUTION PROCESS:

Negotiation:

The Senior Vice President of Human Resource Management and Head of disciplinary
department, Mr. Amin-ul-Huda Khan undertake the negotiation process. The representatives of
the affected department approach Mr. Amin- ul – Huda and put forward their point of view that

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usually is against the management. Mr. Amin uses his experience and expertise to minimize the
conflict and to achieve the BATNA (Best Alternative To a Negotiated Agreement). He makes the
employees agree to most of his demands if not all he drags the employee to agree on two or three
points at least by making employees compromise on most of the issues. His preference remains
that management by any means should not compromise and if incase he fails to do this he moves
to the next phase that is of mediation.

Mediation:

Despite trying hard, when the negotiation process fails HBL goes for the mediation process,
where the role of an effective, neutral mediator comes in who acts as a communication bridge
between the management and the employees. Usually the mediator is in HBL is a trusted manager
popular amongst both employees and managers HBL’s mediation process can be broadly divided
into the following three stages:

Stage 1: Introduction and establishment of credibility:

During the first stage, the mediator plays a passive role. The main task is to gain the trust and
acceptance of the conflicting parties, so that they begin to believe that he/she will be capable of
assisting them fairly as a person on whom they can rely at all times for this purpose HBL chooses
a mediator with the mutual consent of employees and the management. Mediator in HBL is
usually an internal, neutral person trusted by both management and employee. He leaves most of
the talking to the disputing parties, but listens attentively and asks probing questions to pinpoint
the causes of the dispute, obstacles to a possible settlement and to identify the issues in order of
priority. Once credibility is achieved and sufficient background knowledge gained, the mediator
may begin to persuade the parties to resume negotiations, possibly with a fresh perspective.

Stage 2: Steering the negotiation process:

In the second stage, the mediator intervenes more actively in steering the negotiations. He/she
may offer advice to the parties, attempt to establish the actual resistance point of each party and
to discover areas in which compromises could be reached. The mediator encourages parties to put
forward proposals and counter-proposals and (when a solution appears feasible) will begin to
urge or even pressurize the participants towards acceptance of a settlement.

Stage 3: Movement towards a final settlement:

In the final settlement the mediator decides to finish the matter quickly, he/she uses bi-lateral
discussions with individuals or groups and during the final stages may actually suggest or draft
proposals for consideration. In the event of a final settlement being reached, the mediator assists
the parties in the drafting of their agreement, ensuring that both sides are satisfied with the
wording, terms and conditions of the agreement.

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Arbitration:

When even mediation fails to work for HBL it goes for arbitration. The delay in court cases has
always been a source of concern to HBL as this impacts the enforceability of contracts. As most
of the conflicts are policy driven HBL’s utmost priority is to enforce those policies on employees
at any cost and without compromising when all the methods fail to achieve this purpose, HBL
goes for arbitration with the consent of employees and make them realize that it was important
for the benefit of organization. Arbitration is used in HBL because arbitration awards are
generally easier to enforce than court judgments.

Litigation:

HBL has lawyers who take care of its legal formalities. HBL believes that even if the conflict gets
failed to resolve and the employees file a lawsuit against them the management is least bothered
about it because it believes that employees don not have enough resources to fight in the court
where as HBL pays a fee of about 400000 Rs to their designated lawyers who are expert in
dragging the time of the hearing and making employees willingly take the case back. According
to Mr. Amin ul Huda they still have cases in litigation and none of them yet got resolved or
turned out in the favor of employees.

PROBLEMS IN DISPUTE RESOLUTION PROCESS AT HABIB BANK LTD

Having a conflict is not anything uncommon in an organization being a system comprising of


many parts and subsystems that are all interlinked and interconnected. In a multinational like
Habib Bank ltd, the enormous level of activity giving rise to one or the other major or minor
conflicts in forms of either functional or counterproductive cannot be ignored. However, since
functional conflicts do not need any treatment with a resolution process they are the destructive
ones that actually demand such a process and above all effective management of that very
process too.

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Habib bank is an organization comprising of various branches and networks thus conflict at each
level is unpredictable and hard to surface without proper management intervention. But while
analyzing their dispute resolution system, various bottlenecks and hindrances were found that
actually make initially the application of such a process and then the effective result of it to
spread and bring benefit for the organization in the future.

There are a variety of problems that were explored while analyzing the dispute resolution process
at HBL.

FAILING TO MINIMIZE THE OVERALL LEVEL OF CONFLICT:

Firstly, the resolution process although aimed at minimizing the overall level of conflict but it
was not fulfilling its purpose and was not able to minimize the overall level of conflict giving rise
to other more severe conflicts. Therefore, it can be said that the resolution process did not
completely satisfy the interests of all the parties and when at one hand it managed to satisfy one
stakeholder, left dissatisfactory results for others or the organization itself.

Example at the time when organization made a decision to go for downsizing, their major
concern was to make redundant lower level staff i.e. drivers, peons etc to hire a better, more
skilled personnel at the same rate so that they can offer more to the organization since the lower
level staff was being hired at a rate far above the market rate increasing costs for the organization.
Hence, the organization only cared about its own need and brought this decision, a surprise to
employees by ineffective communication through mere word of mouth and rumors giving rise to
extreme retaliation from the employee’s side who did not want to leave the organization although
being offered incentives and an alternate firm to join hands with.

LACK OF PRE AND POST DISPUTE ANALYSIS:

HBL lacks a pre and post dispute resolution analysis this means that there is no analysis or
interpretation of where the organization wanted to be and where it actually is after
implementation of the process of resolution and there were no proper guidelines giving directions
to take about the conflict resolution process. Hence, this resulted in failure in having effective
resolution process and there was no proper comparison or evaluation of whether the organization
has achieved its desired state can be done giving a rather blur picture to both employees and
management and leaving them confused about whether implementing such a process is cost and
time worthy in the future since they do not know the pros and cons of this system.

10 Bahria University – Karachi Campus


For example, when HBL decided to downsize and make certain employees quit, they were not
completely sure of whether doing so is likely to give them the desired outcomes rather they were
just hitting the ball blindfolded and simply hoped to achieve what they want .furthermore, when
HBL went towards retrenchment, and successfully but with great difficulty achieved it, managers
did not do any proper formal analysis with the top executives of what were the difficulties they
faced and how to make sure they do not reappear in the future when they take such a crucial
action. Also, there was no evaluation of results the conflict appearing from retrenchment brought
to them. Moreover, no analysis of how to implement safety measures to avoid facing the same
conflict again was done.

RESOLUTION PROCESS CAUSED EVEN MORE CONFLICTS:

Apart from this, the resolution process instead of satisfying all the affected parties at the end
brought more dissatisfaction and complaints at its end making managers feel the loss of time
HBL have invested while engaging in resolving conflicts when at the end it brought no fruitful
results for either the employees or HBL.

FAILED TO FOSTER LONG TERM RELATIONSHIP:

As the process did not manage to satisfy all or most of the parties and caused more conflicts in
return, it became a basis for more personal conflicts among individuals which adversely affected
the work relationships and the organization’s productivity as a result. Therefore, the process did
not promise to foster effective long term relationships among colleagues giving rise to feelings of
hatred and emotional disparity among employees in the same department or between an
employee and manager.

Example, in the case of HBL’s formal dress code policy, the manager pointed out an individual in
front of his junior colleagues making him feel insulted and hating the manager for doing so,
causing him to feel demoralized to perform any task given by the manager with eagerness and
finding ways to back bite and bad mouth the manager with other employees.

DIFFICULTY IN CHALLENING MANAGEMENT:

The dispute resolution at HBL does not assure management that employees can safely and
effectively challenge management. This is because such an act is not possible with employees

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who do not have enough resources or power to raise a voice making them insecure of their own
jobs. moreover employees have a great degree of fear in their minds of authoritative management
situation which does not aim at collaboratively discussing issues and then implementing an offer
or demand rather just order employees in shape of surprises or written messages .therefore,
employees do not have a say in their own organization and this fear and lack of understanding
with HBL’s management leave most of the conflicts un surfaced and unresolved portraying a
fake picture of happy and content employees towards management.

LACK OF EMPLOYEE EMPOWERMENT:

Because employee empowerment was lacking, the employees do not feel the need to contribute
towards the organization benefit and just work for the sake of securing their jobs, positions and
dignity among others since raising a voice means openly exposing themselves to chances of
being dismissed or transferred.

LACK OF EFFECTIVE COMMUNICATION:

Lack of Effective communication is another problem that makes dispute resolution at HBL
inappropriate and unsatisfactory. A classic example was seen at two events.

Firstly, due to lack of communication in HBL among departments regarding the code of ethics
and specifically organizational culture, most managers of HBL Sukkur branch, were being seen to
wear shalwar kurta and having tea while sitting on the floor giving rise to an immediate clash of
opinion between the directors and those managers. Therefore, no or miscommunication left un-
uniformity among the different branches of the same bank.

Secondly, on the occasion of employee redundancy due to downsizing, employees got mixed
messages of them being departed from their organization in the form of rumors and ‘grapevine’.
Hence, this resulted in lack of trust in management for the employees who were being affected
and also for those who were not making them feel the next to become the culprit of management
sudden decisions and surprises. Such distorted communication channels lead to employees giving
different meanings to the same picture since every organization comprise of diverse mental filters
causing more conflicts at personal level between employees .

INFLEXIBLITY OF APPLICATION:

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Similarly to the problems above, inflexibility of application and allocation of rewards, application
and policies was another factor of disturbance in the process. Employees do not know what
HBL’s management expects of them at certain events and therefore most of the employee’s only
aim to work at moderate performance levels since management’s criteria of reward is
unpredictable like the management itself. Therefore, people do not want to work hard and get no
return rather they find it better to work consistently at a medium pace and not being rewarded
which would at least not demoralize them at the end.

POOR APPLICATION OF RESOLUTION PROCEDURES:

Moreover, poor application of resolution procedure, that is in areas only where management feels
it is important is another problem. HBL’s managers just believe what they see and see what they
believe and start resolving and working on it by simply forcing employees to follow what it
dictates without welcoming any feedback, opinions or suggestions from employees being the
other half that makes up the organization.

Example, during the union negotiation sessions, the union representators are forced to agree on
management’s choices and issues through a sound mediator whose popular and in good books of
all employees and someone who the employees look up to so that management can get the other
party convinced at its point on emotional grounds and can satisfy its demands at the cost of
leaving its workforce feel dissatisfied and simply being won on emotional rather than
professional grounds.

HBL DID NOT INVOLVE EMPLOYEES IN POLICY IMPLEMENTATION AND IT


AMPLIFIES PROBLEMS IN DISPUTE RESOLUTION PROCESSES OF HBL:

While resolving conflict HBL did not balance competing interest of both the organization and the
employees and the senior managers specifically were not collaborating with the employees to
present the best opportunity to meld them in ways that are mutually beneficial for both the system
and the employees. They were not willing to contribute their information, expertise and energy in
order to give benefit to each other while resolving conflict due to which many problems arises in
dispute resolution processes of HBL. The management did not allow employee participants to get
involved in the process of implementation of policy and due to which employees did not gain a
better understanding that why management were implementing this policy, what was the goal of
the organization and what will be the future outcomes after implementing this policy. While

13 Bahria University – Karachi Campus


resolving conflict management does not allow employees to challenge conventional wisdom and
management’s mental models by participating in dialogue and employees were not able to convey
their view of what really goes on in the workplace and what issues are real and not real.

When the dispute resolution process persisted, management did not effectively communicate the
result to all employees due to which they were unable to understand the extent or level of
reduction in conflict. Moreover, while resolving conflict at HBL, their management did not
conduct employee surveys that request written input on the issues being considered in the dispute
resolution process and did not give emphasis to employee focus groups that facilitate discussion
of the issues being considered and did not invite oral feedback from employees about their
perception in the whole dispute resolution process.

POLICIES WERE NOT UPDATED AND EMPLOYEES WERE NOT WELL AWARE
ABOUT THE NEW POLICIES IN HBL:

The workforce and the nature of work have changed dramatically in HBL over the years, and they
continue to change with the increasing speed more specifically in banking sector but HBL did not
keep their employees well informed about the new policies. The management of HBL did not
address the changing need of employees in their policies due to which further conflict arises. The
managers and policy administrator did not continually implement, administer and reexamine and
change all of an organization’s policies by keeping in mind the changing needs of employees with
the passage of time and with the ups and downs in the economy but rather than that they just
focus on the company’s interest and the growth of the organization and did not update policies at
the exact time when it was actually needed. The policies did not intend to ensure workplace
effectiveness, justice, fairness and peace among the employees at HBL because the management
did not update policies when needed.

MANAGEMENT AT HBL DID NOT BALANCE FORCES FOR CHANGE AND THE
FORCES FOR STABILITY WHLIE RESOLVIVG CONFLICT:

In the dispute resolution process of HBL management just focuses on forces for change and did
not focus on balancing the forces for stability as well. When the management did not focus on
balancing both the forces, it takes too much time to resolve conflict because the forces for
stability are at one side and they continuously make effort not to adopt changes at HBL whereas
HBL wants to achieve its target by mainly focusing on forces for change and they surprise
employees while announcing the policy and did not give acceptance time to employees. In
resolving conflict, the drive to change did not exceed the target’s resistance and did not create a
disequilibrium that unfreezes the status quo. While resolving conflict, the resistance which is the
action of the targets to maintain the status quo further increases.

EMPLOYEES MISUNDERSTAND THE FACTS:

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When management resolves conflict, due to miscommunication in the dispute resolution process
employee misunderstand the facts and further resistance arises when employee have incorrect
perceptions and misunderstandings about whether a change is good or bad for them. The
employees have different information that management has. Because of a closed style, poor
communication and negligence in the dispute resolution processes, management did not involve
employees in the decision process or did not share with them all the information behind a planned
change due to which further misunderstanding arises in the dispute resolution system of HBL.
And when employees did not have a clear picture about what was going on in the organization
they were more likely to assume the worst and resist. When sometimes management shared a
little bit information about the change, employees also did not believe what they hear because of
a lack of trust in the management of HBL.

THE MANAGEMENT OF HBL DID NOT CONDUCT AN APPROPRIATE DISCHARGE


DISCUSSION:

They did not conduct such discussion in which the employee is advised of his discharge is the
single event most likely to occur in order reduce the cost and for the long term growth for the
organization. In the dispute resolution process, the person holding the discussion was not fully
trained and the meeting was not be carefully planned often scripted and rehearsed because the
senior manager did not fully aware about the facts and reasons behind the conflict. They did not
use person to person discussion when advising individuals of a dismissal for downsizing instead
they use a hybrid of both phone call and other impersonal communication. While resolving
conflict, the senior manager did not directly get to the point and present the bad news and they
did not stated the reason for the termination in a few short sentences and did not tell the person
that he has been terminated due to which the expectation level of employees further increases.
The management cop out and make the discharge seem unjustified in an effort to avoid hard
feelings. The management of HBL also did not listen to what the employees has to say and
answer their questions honestly and concisely. The management while resolving conflict did not
explain initially all severance details about how long the employees will be paid, how insurance
will be handled , references, outplacement services and other information of importance the
employee being discharged. They did not even explain the exit procedures such as when and how
the employee should vacate the workplace.

NO JOB SECURITY FOR THE EMPLOYEES:

In the past, employment at HBL was typically seen as long term relationship between HBL
competing in expanding markets and hourly wage workers or salaried managers. But today’s
employment relationship at HBL is very different. Increased participation of young workers and
fresh graduates, the prevalence of part-time or temporary workers, increased risk of permanent
job loss, and other similar factors have changed the basic employment contract and introduced
continuing uncertainty into the employment relationship for the remaining employees after
retrenchment as well due to which problems arises in the dispute resolution system and the main
problem is that while minimizing conflict, another issue of job security for the temporary and for
the remaining employees arises as well.

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THE MANAGEMENT DID NOT PROVIDE PROPER CONFIDENTIAL AVENUES (NO
PROPER COUNSELLING OR DISCUSSION PLATFORM):

Management of HBL did not ensure that the dismissal discussion itself was private means that it
was not conducted behind closed doors but also handled so that employees in general do not
know it was taking place. The management did not carefully consider that what information was
to be shared with the remaining employees, who have a legitimate interest in what has happened.
Employees did not believe that the dispute resolution processes will foster fair resolution of the
process and fulfill their rights.

MANAGEMENT OF HBL DID NOT MAKE A DISCIPLINED, BALANCED


DISCHARGE DECISION:

Employees felt that supervisors and managers forgot about their feelings and they thought only
about the interest of the organization while resolving conflict. Other managers fail to take needed
action because of the potential cost and disruption to the organization. While resolving conflict,
delaying appropriate discharge allows bad behavior to spread to others, impacting the broader
organization performance. The management did not thoughtfully balance the potential pros and
cons of dismissing employees while resolving conflict. In the dispute resolution process, the
management did not ensure that affected employees have an opportunity to present their case,
with help from an employee union representative if requested. Initially the management did not
clearly articulate a defensible reason for all dismissals. The management did not provide for a pre
decision review by higher levels of management, a peer committee, external lawyers, or other
knowledgeable individuals.

NO PROPER ADR POLICY:

There was no formal ADR policy statement at HBL that establishes the rules for resolving
disputes, provides due processes, and fosters a full understanding of the dispute resolution
options available to the organization’s employees and because of this further problem arises in the
dispute resolution system. There was no fair and impartial investigation of disputes.

RECOMMENDATIONS AND SUGGESTIONS FOR IMPROVING AND REFINING THE


DISPUTE RESOLUTION PROCESS AT HBL

It is time that the organizations such as HBL realize that conflict cannot be resolved by firing the
coach or trading a player. Conflict is inevitable. If it is handled well, it can lead to constructive

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dialogue, needed change and ultimately resolution. If it is handled poorly or left unresolved, it
can disrupt relationships, affect on the job performance and lead to costly and time-consuming
litigation.

A dispute resolution system preserves relationships, provides durable resolution of disputes,


preserves confidentiality, avoids litigation, and maintains management’s control over the process.
Large businesses are finally embracing Dispute Resolution Systems in the workplace and are
finding that a majority of conflicts are being resolved.

Following are some of the suggestions, recommendations for managements of the organizations
like HBL as to how to design and implement an effective dispute resolution system in the
workplace, minimizing problems in resolving conflicts:

• A DISPURTE RESOLUTION SYSTEM SHOULD INVOLVE EVERYONE:

A dispute resolution system has to involve everyone. Management employees, owners,


CEOs and Presidents cannot be exempt from participating in the system. It is not a system
designed by a consultant for the non exempt employees. In a small organization, all
employees, owners and managers interact with one another on a daily basis. The
organization becomes instantly dysfunctional if an employee(s) refuses to communicate
with other employees. It is a must that all employees communicate with each other
(Moreno, 2004).

• A SYSTEM THAT RESOLVES ALL CONFLICTS:

Organization that employs employees has advantages and disadvantages: everyone knows
everyone else, including all about their personal lives. This can create conflict in the
workplace, if HBL has an employee always complaining to a co-employee about her
couch potato husband, her unruly teenager or her desk chair that is hurting her back.
These complaints cannot be ignored and must be addressed. Many large organization
views a dispute resolution system as only addressing filed actionable claims such as
sexual harassment, discrimination, workers’ compensation or wage and hour violations.
However, a dispute resolution system addresses all conflicts in the workplace, whether
they are actionable claims, other workplace disputes or personal employee complaints.
For the co-worker who has to listen to the personal complaints of a co-worker, this can
create an intolerable working environment. For the employee who has many personal
issues, this must affect her work performance. Many personal complaints or workplace
disputes are usually a precursor to a claim that is actionable. Addressing those conflicts
will make happy employees and decrease the actionable disputes. This does not mean that
the employer becomes a therapist (Moreno, 2004).

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However, it does require an employer to address employee morale and personal
complaints that maybe disrupting not only to the complaining employee’s work
performance, but that of the co-employee (Moreno, 2004).

• THE IDENTIFICATION OF THE NATURAL EMERGENCE OF A PERSON


WHO HANDLES ALL CONFLICTS:

Organizations are fortunate because usually an employee emerges who has the skills and
talents to handle disputes. This person is liked by the employees and the employees
confide in this person, because the person listens, keeps all complaints confidential, is fair
minded and knows who to approach to resolve complaints. This person becomes an
ombudsman. The person is trusted by both management and non-management and is not
necessarily a human resource professional. Organizations do not have to spend time and
monetary resources to locate or develop the person who will become the champion of
resolving conflicts and becomes a natural emergence. Through this natural emergence of
the person who handles disputes in a small organization, this person must insure
confidentiality, be a good listener, fair minded, and know who to approach or who should
handle a dispute in order to get the dispute resolved. And the management at HBL should
take keen interest and identify who this person is and how he can affect the conflicts and
the environment and how to with tackle him (Moreno, 2004).

• LOOK TO EXTERNAL SOURCES WHEN NEEDED-ASSURES NEUTRALITY:

Organizations sometimes try their best to resolve disputes internally, but some employees
see the internal methods as an employer dominated system with no chance of a fair
resolution. HBL should embrace external features. And they should recognize that
proceeding to binding arbitration is costly. As a result that before any formal claim is
filed; they must offer the employee the use of external mediation, by an independent
mediator. HBL’s management must offer a list of mediators and the employee chooses the
mediator, after the employee has had an opportunity to speak with the mediators regarding
their credentials or bias in favor of the employer. Providing the use of external mediators
that are not associated with the organizations assures more neutrality. It has been seen and
believed that a system that utilizes both internal and external features, demonstrates to the
employees that the employer values the employees by spending time and money to have a
dispute resolved by a neutral party (Moreno, 2004).

• ELIMINATE THE MISCONCEPTION THAT IT TAKES LARGE MONETARY


RESOURCES TO IMPLEMENT A SYSTEM:

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Many organizations complain that they do not have the resources to implement a dispute
resolution system. It does not take monetary resources to resolve conflicts. Resolution of
disputes involves an employer’s willingness to address conflicts, to listen, and to take
steps to resolve them. Conflicts have to be addressed and there is an employee who has
the natural attributes to handle employee conflicts as mentioned above. Management
should tap in on those resources and before knowing it, management at HBL will easily
develop a workplace dispute resolution system, without expending large sums of money
(Moreno, 2004).

• AN ONGOING PROCESS-UPDATING POLICY WITH CHANGING TRENDS:

Management at HBL should update the policy regularly with the changing times and
needs. A workplace dispute resolution system is similar to a house, it can stay standing for
50 or 60 years, but during those years it needs to be remodeled with updated parts in order
to replace those components that have worn out or retired. A workplace dispute resolution
system is an ongoing process that is ever changing and requires continual assessment. The
framework may stay the same, but a change in management or new disputes may arise
that will require different methods to address those disputes. If the workplace dispute
resolution system evolves from the ground up, there is more likelihood that the
framework will remain but the methods used in resolving disputes may change. It is a
continuing metamorphosis (Moreno, 2004).

• ELIMINATION OF BUREAUCRATIC ATTITUDE AND ENCOURAGING


FRIENDLY ENVIRONMENT:

When HBL was a public entity, the bureaucratic attitude of management was okay, but as
soon as it is privatized, the expectations, needs, interests of people have changed so there
is a need to change and implement such a friendly and different environment that
everyone feels comfortable and satisfied.

• SATISFYING BOTH THE PARTIES INA CONFLICT:

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Finding a way to satisfy both parties in a conflict will ultimately be good for the company.
Management should take such steps that when resolving a conflict none of the party
remains unsatisfied, i.e. none of them feels that their interests and needs are not
considered or fulfilled and ensure them satisfying both sets of concerns.

• EFFECTIVE PRE AND POST DISPUTE RESOLUTION PROCESS:

HBL needs a pre and post dispute resolution analysis so that there is a proper analysis or
interpretation of where the organization wants to be and where it actually is after
implementation of the process of resolution and also there are proper guidelines giving
directions to take about the conflict resolution process. Hence, it should be unproblematic
to realize that whether the organization have achieved its desired objectives and state or
not.

• ETHICAL MANAGEMENT:

There needs to an ethical management and also management ethics, so that employees
learn the same from the management.

• SURFACE AND SOLVE CONFLICT AS SOON AS POSSIBLE:

Resolving conflicts creates more conflicts. If the management has firstly or previously
attempted to address and fulfill the needs and interest of its employees, the
counterproductive conflict would not have reached to this level or new conflicts wouldn’t
have rise.

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• LEARNING FROM CONFLICTS:

In HBL, they lack effective resolution process, they should see if their dispute resolution
process is effective or not in resolving conflicts, and also they should see that the same
thing and conflicts does not repeat and rise again, i.e. they should learn from the conflicts.

• MANAGEMENT SHOULD BE FLEXIBLE:

Management should create such an attitude and should be flexible enough, that employees
come to them openly and freely with their problems. And management should create an
environment for employees so that they feel that their interest and needs will be
considered and valued.

• USE OF COLLABORATIVE POWER:

In order to build trust, openness and respect among management and employees,
management should use collaborative power rather than coercive power.

• ACCURATE INFORMATION WITHOUT MANIPULATION:

Management should take the initiative to provide the same and standard information to its
employees regarding the change and implementation or any other important step, as it will
help then in keeping all of them in the same page. And also this is how there is no
miscommunication and misinterpretation of messages.

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• DISPUTE RESOLUTION PROCESS IN BLACK AND WHITE:

The management should announce or should have dispute resolution process in black in
white and should have a designated department for it. Management should spread or
announce a common message among all of its employees in order to ensure uniformity all
over the departments and branches. This can be in the form a code of ethics and a code of
conduct for all of its employees all over the country. And they should also mention DRP
in the policy in detail so that everyone in organization has clear cut idea that what will be
the processes, what will be the technicalities if a conflict rises. Management should know
the advantages and disadvantages of dispute resolution process.

• DRP FOSTERING LONG-TERM RELATIONSHIPS:

The dispute resolution process should foster a healthy and long-term relationship between
employees, colleagues and management, in order to ensure work relationships and
increased organization’s productivity. That will definitely eliminate feelings or hatred,
dissatisfaction not only among employees but also managers, management and
employees.

• ALLOTMENT OF EMPOWERMENT TO THE EMPLOYEES:


Management should provide a certain degree of empowerment to its employees, so that
they also have power, resources and they feel secure and safe and do not feel insecure for
their jobs. Also management should change attitude as employee’s fear of the
management’s bureaucratic attitude, which leads to failing collaborative meetings.

• PROPER FLEXIBILITY OF APPLICATION, ALLOCATING REWARDS AND


ENCOURAGING EMPLOYEES:

There should be flexibility of application, policies and proper allocation of reward system.
And also management should mention that what level of performance they expect from
the employees and at which level they will be appreciated and will be provided with
rewards, this will definitely help the management to encourage them and so everyone then
will be willing to work hard and work according to the interests of the organization.

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• FEEDBACK FROM THE PARTIES INVOLVED:

Management should welcome some kind of feedback, suggestions and opinions from the
employees, so that they get to know what are the major and repeated problems involved in
the conflict and what DRP should be followed and what modifications should be made in
the process. This will also lead to increased employee trust on the management. HBL
could:

* Ask what alternate behavior could have been used (Weeks, 1992).

* Ask them to put themselves in HBL’s shoes to understand how HBL was affected by
their behavior (Weeks, 1992).

* Focus on the positive by reminding them of past examples when their fair behavior
resulted in good partnership resolution (Weeks, 1992).

Tips for management during Negotiation or DRP:

• Management of HBL should be objective: support both sides, even if privately they
prefer one point of view (Torr, 2004).

• Management should be supportive: use caring language. Provide a non-threatening


learning environment, where people will feel safe to open up (Torr, 2004).

• Management should not be judgmental: actively discourage judgments as to who was


right and who was wrong. Do not ask "Why did you?" Ask "What happened?" And "How
did you feel?" (Torr, 2004).

• Encourage suggestions from the Parties. Resist advising. If suggestions are really
needed, offer as options not directives (Torr, 2004).

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• Win/Win: work towards wins for both Parties. Turn opponents into problem solving
partners (Torr, 2004).

• Get agreement from both Parties about a basic willingness to solve the problem (Torr,
2004).

• Let each Party say what the problem is for them. Check back that each Party has actually
understood the position of the other Party (Torr, 2004).

• Guide conversations towards a joint problem-solving approach and away from


personal attack (Torr, 2004).

• Encourage Parties to look for answers where everybody gets what they need (Torr,
2004).

• Reframe negative statements into a neutral description of a legitimate present concern


(Torr, 2004).

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CONCLUSION:

Believing that solutions can be found which will satisfy all parties is the first step toward
successfully solving a problem. The parties need to admit that there is a problem and get it out in
the open. Management should encourage this and let employees know that conflict is normal. The
problem should be analyzed by both parties, with the manager as the intermediary. By accepting
employees’ concerns, managers can encourage an attitude that will help problem solving. The
parties can then come up with options for solving the problem and agree on a final solution.
When employees feel that management is different than them, they often decide not to
communicate openly and problems can grow over time. This will be especially true if the
manager tends to use the forcing technique to problem management.

Managing conflict is a normal aspect of business operations. Although managers do have to


dedicate much of their time to conflict management, successfully doing so can be good for the
long-term performance of the company. To effectively solve conflicts, managers need to
recognize the factors that cause it and try to implement strategies for solving problems in a
constructive way.

Following the recommendations mentioned above, management of HBL can improve and make
better the dispute resolution process, and such an effective DRP will minimize conflicts in the
organization and will result in increased satisfaction of employees. Employees will feel safe and
secure and that will lead to increased management’s trust. And ultimately it will lead to increased
productivity in the organization.

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APPENDIX

Set of questions asked:

Q: Mostly what nature of conflict arises in HBL?

Q: What Is Your Conflict Resolution Style?

Q: What are the problems that you face during the conflict resolution process?

Q: How can you negotiate with someone when that person doesn't want to do so?

Q: What do you do when you have several people, or an entire staff, in conflict?

Q: How do you overcome the problems you encounter during the conflict resolution process?

Q: What Strategies do you follow for dealing with conflict resolution in electronic
communication?

Q: What are Guidelines for when to consult with HR about a conflict-resolution situation?

Q: What are the Tools that give you quick and easy access to key conflict-resolution information,
strategies, and techniques?

Q: Do you use any alternative dispute resolution? Like arbitration, mediation?

Q: Managers who exhibit favoritism toward one or more employees set themselves up for
problems with the “non-favored.” How do you handle these situations?

Q: What type of conflict requires intervention?

Q: How do you transform conflict into a positive, productive force?

Q: How do you differentiate between structural (organizational) and interpersonal conflicts?

Findings from the interview with Mr. Amin ul Huda:

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• Conflict varies from situation to situation and from organization to organization. Not
all organizations face the same kind of conflict nor all conflicts can be handled the same
way as handled previous ones. Sources of conflict range from a difference of opinion,
difficult working conditions, or unrealistic work expectations through to discriminatory
behavior such as racism or sexism, poor communication, or non-compliance with
organizational norms or values. Instead, HBL can learn about any flaws and mistakes in
the conflicts arising, in order to minimize the likelihood of conflicts in the future.

• Conflict can be between individuals and groups, groups and managers, groups and
groups etc.
o Conflict between individual People has differing styles of communication,
ambitions, political or religious views and different cultural backgrounds. In our
diverse society, the possibility of these differences leading to conflict between
individuals is always there, and HBL must be alert to preventing and resolving
situations where conflict arises.
o Conflict between groups of people When ever people form groups, they tend to
emphasize the things that make their group "better than" or "different from" other
groups. This happens in the fields of sport, culture, religion and the workplace and
can sometimes change from healthy competition to destructive conflict.
o Conflict within a group of people even within one organisation or team, conflict
can arise from the individual differences or ambitions mentioned earlier; or from
rivalry between sub-groups or factions. All leaders and members of the
organisation need to be alert to group dynamics that can spill over into conflict.

• No specific department titled conflict management:

There was no specific department named or titled conflict management and didn’t exist in
HBL however two departments look after the disputes and their resolution they are
Human Resource and IR and Disciplinary department which aims to resolve pre exist
problems. Other organizations also do not have specific department. Example: Toyota’s
management (pre examinant). So it is not necessary to have any special department or
subdivision for resolving and handling conflicts instead, the more important thing is the
dispute resolution system, how it is designed, carried out and implemented, is it effective
or not. In HBL this all is handled by HR, IR and disciplinary department

• Socio Political environment increases chances of conflicts:

Forces such as socio political environment also increase the likelihood of conflicts
occurring in the organizations. As people work together, know each other interacting with
each other they get mixed, start socializing and start forming groups. And many of the
people are very much concerned about who is getting what rewards, appraisals etc. Also
professional jealousy also exists i.e. politics.

• System: Input – Process – Output

• Important for the company to have a strong feedback cycle:

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Feedback is of 2 types: Internal and External. It’s very important for the company to have
strong feedback cycle in order to minimize conflict and uncovering the suppressed
conflicts. Providing and listening to feedback is certainly something they spend a lot of
time doing in their own office. A Marketing Director eagerly recognizes that client
feedback is a better indicator of her performance than close ratios and costs-per-lead.
Facilitation staff meets regularly to review the feedback and determine which things will
be continued, which HBL will be done less of, and which will be stopped. Feedback
begets change. Internal feedback is just as important as external feedback, and sometimes
harder to get. Even if the team isn't the type to offer feedback (positive or constructive),
one can establish systems that will facilitate those processes, over time making feedback a
component of the company’s culture. The final outcome is a set of yearly professional
development plans and a company development plan that work in tandem.

• Rationalization of human resource is done by HBL.

• Major conflict at HBL: Overstaffing

Major conflict that arose was of overstaffing. HBL was then very much concerned not to
supply too many employees. Overstaffing can create problem in ways that a work of 1
person is done by many people, also resources and other possessions are spent on them,
which is a waste, so downsizing was needed at HBL. Overstaffing can become the reason
of de-motivation, ultimately affecting the core objective of the organization that is
maximum profitability as it increases cost. (Example of other government owned
institution is PIA)

• Feedback cycle: different inputs.

• Arbitration:

Arbitration did not exist with this particular name at HBL but do work with this
unorganized way. The appointment of an independent person to act as an adjudicator (or
judge) in a dispute, to decide on the terms of a settlement. Both parties in a conflict have
to agree about who the arbitrator should be, and that the decision of the arbitrator will be
binding on them all. Arbitration differs from mediation and negotiation in that it does not
promote the continuation of collective bargaining: the arbitrator listens to and investigates
the demands and counter-demands and takes over the role of decision-maker. People or
organizations can agree on having either a single arbitrator or a panel of arbitrators whom
they respect and whose decision they will accept as final, in order to resolve the conflict.
Arbitrator is a legal person and his decision will be followed by both employees and
management.

• CBL negotiations:

• If arbitration fails, HBL goes for negotiations:

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Official negotiations are also done at HBL, when things get out of control or are not solved
through arbitration. Depending upon the situation and time, the way the negotiations are to be
conducted differs. The skills of negotiations depend and differ widely from one situation to the
other. Negotiation process takes one month at HBL. It is at times beneficial in the organizations
in order to resolve conflicts.

• Types of Conflicts at HBL:

o Pay raise issues mostly create conflicts, when bonuses, rewards are not given at
proper time and in proper amount. These kinds of problems also rise because of
the inflation

o KESC employees (around 7000 employees) argued for their right, but government
did not support them. i.e. a difference of interests and rights or "Disputes of right"
and "disputes of interest"
• These all issues occur in transactional activities. Such as in systems, policies, procedures
and climates at HBL. Transformational are like major conflict emerges, and cultural
values are involved here which creates conflicts.

• Downsizing:

In 1997: 29000 employees were working at HBL they were downsized to 13000; the case
is in litigation now. In organization they have complex and heterogeneous structure. In
these cases HBL has no issues or problems because a certain amount goes to the
company’s lawyer every month, and he handles the case. But the people involved or
individuals seek difficulties because lawyer’s fees are expensive and they can’t afford
these fees for too long.

• Re-entrenchment:

In 2007: Conflict because of re-entrenchment occurred that was attempted to be


minimized by offering various packages and incentives for the employees. Means people
were given incentives and other facilities or other job opportunities and were asked to
leave jobs from HBL.

• Employees’ expectations from management:

• In 2002: HBL employees perceived that it is their right that their child / children get
employed at HBL but HBL followed merit based system and they were interested in
hiring skilled employees to satisfy the company’s as well as stake holders expectations.
And that’s the right choice, because if they started hiring on sources HBL will be biased at

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hiring employees, instead the best way is to hire on merit, who are more capable
candidates.

• MCB and UBL transformed but they overcome their conflicts less than HBL, HBL is
growing transformational 10% more than them because they re-entrenched the employees
very peacefully gave incentives and bonuses.

• Reason for entrenchment:

Driver’s salary exceeded Rs.20000. This is wrong because an MBA now a day’s hardly
gets a job of Rs. 10000, and a driver was given Rs.20000, which is a big difference. So it
was decided after downsizing that the driver’s salary will be included in each executive’s
salary, and now it’s his choice to hire a driver or not, and that driver’s salary is around
Rs.7000.

• Competing Internationally:

One of the reasons for HBL was also that HBL competes internationally that is why it has
to hire skillfully appropriate workforce and for that they need to create space to
accommodate them. HBL manages conflicts better than other companies.

• Outsourcing of Employees:

Employees such as peons, guards, and drivers were outsourced from another company.
This is because in order to avoid conflicts in a way that nor there will be a similar staff
nor there will be groups, and there will be least probability of conflicts arising.

• Management’s Role in resolving conflicts:

Management at HBL is involved and is a key role player in surfacing, handling and
resolving conflicts at HBL at group, individual and organizational levels. This also gives
rise to and also encourages a collaborative stage, where everyone at management level is
involved in resolving conflicts and also parties involved are asked for feedbacks and
suggestions.

• Mediation after negotiation:

Mediation takes place after negotiation, if employees resist accepting new terms and
sticking to two or three points. This takes place when employees and groups are not at all
ready to accept the decisions of the management and they call for strikes, threats etc.

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• The Mediator:

Then mediator talks or deals with him on the basis of his talent, personality and skills.
Mediator in HBL is a well known and popular among both employees and management
and he/ she is the person who knows well the goal of organization that as the competition
increases has to be reduced by covering extra cost, expenses as it hinders the growth of
organization that is the penetrating disease. Mediation drag the employee to agree on
further two or three points but still in the employee do not agree on even one point
arbitration takes place.

• Employees hired at temporary work basis:

At HBL there are no permanent operational employees hired instead they all are hired on
a temporary basis contracts.

• Role of Work Councils:

Personality conflict chewing pan, talking loud on cell phone, Negative attitude of
employees are monitored by these councils. Most of the time employees did this on
purpose to give an impression that they are more powerful than the management. These
conflicts at HBL have also rise, such as not following the dress coat, negative attitude or
any practice against the terms mentioned in the code of conduct. Accountability or check
the dress code and other matters at regular intervals is necessary in any organization.

EMPLOYEES’ BOOK – CODE OF ETHICS AND BUSINESS CONDUCT:


It is the policy of Habib bank limited to conduct the business of the bank in full compliance with
the laws, rules and regulations of the community in which it operates and to adhere to the highest
ethical standards. To these ends employees are expected and directed to manage the business of
the bank with:

• The highest ethical standards of integrity and candor in conformity with the code of ethics
& business conduct.

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• Due diligence and proficiency in all business activities.
• Compliance of all legal and regulatory requirements.
• A manner that no disfavor will reflect on the bank, both on and off the job.

OBJECTIVES
Code of ethics and business conduct intends to deter wrongdoing and act as a ready reference to
all the employees in maintaining compliance with the rules and regulations laid down by Habib
bank limited and would be a guide in directing the group’s management to ensure the observance
by employees according to the stipulated policies of Habib bank and promote the following
objectives:
• Honest and ethical conduct, including ethical handling of actual or apparent conflicts of
interest between personal and professional relationship.
• Compliance with applicable governmental laws, rules and regulations.
• Promote internal reporting to designated persons of violations of the code.
• Accountability for non-adherence of the code.
All employees are to conduct themselves in accordance with highest standard of personal
and professional integrity.

OBSERVANCE OF RULES
Habib bank expects its employees to have integrity, honesty and the highest moral principles. The
bank does not intend to attempt any control over the private lives of its people or to say how these
lives are to be lived. The bank does not tolerate any conduct, which might be considered as
detrimental to the reputation of the bank. Every employee is to abide by the rules and regulations
of the bank and should strictly observe, comply with and obey all the orders.

APPLICATION OF CODE
The code applies to all staff members of Habib bank limited in their decisions and activities
within the scope of employment, or when representing the bank in any capacity. A copy of code
of conduct is given to every employee for review. Each one of them is required to sign a written
confirmation that they have reviewed, understood and agreed to adhere to the code.

MAINTAINING OFFICE DECORUM

• All the employees are obligated to comply with the office work timings and ensure that
work commitments are not disrupted.
• Employees are required to maintain proper dress code (office attire) and appear well
groomed & presentable all the time. Livery staff should be in their proper uniforms
during office hours.

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• Employees are to observe high standards of behavior/ attitude that include positive
attitude/ body language, politeness & optimistic approach. Clumsy/ abnormal behavior/
short-temperament should be avoided at all times.
• Employees are responsible for ensuring their own work area.

CONFIDENTIALITY
Confidential information about Habib bank’s business or business plans, products and services,
marketing methods, technology or systems must never be disclosed to a third party except
pursuant to a statute or regulations, or a valid court order. The bank owes a strict suttee of
confidentiality to their customers. Employees are not to disclose to any third party particulars
of the identity or financial, business or personal affairs of a customer, unless:

• The customer has given prior written consent.


• Disclosure is compelled by a court or statutory authority of competent jurisdiction.
• Disclosure is compelled by law, due to money laundering, or by regulatory requirements.
• Disclosure is necessary to protect the banks interest, for example disclosure to the police
in case of suspected fraud.

CONFLICTS OF INTEREST

• You must ensure that your personal interests do not conflict with the duties that you
adhere to the bank or which the bank owes to its customers. In particular, an employee
should never become personally involved in any transaction, negotiation or contract on
behalf of an organization with an entity in which the employee or any of his relative or
friend has an interest, without full written disclosure to and prior written approval from
the group head concerned.
• An employee must avoid conflict between his personal, social, financial or political
interests.
• An employee must not participate in reviewing and approving an application for a loan
from a corporation of which he is a director.

GIFTS AND INDUCEMENTS


Employees are not permitted to accept gifts, entertainment, or other favors from existing or
prospective customers of the bank.
OUTSIDE PRESSURE
Employee must refrain from bringing in outside pressure or influence to attain personal gains
within the organization; any such attempt will be subject to disciplinary action/ corrective
guidance.
INSIDER TRADING

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Employees are advised never to engage in insider trading in securities. It means that employees
are not to make deal, advice or arrange for anyone else to deal, in any shares or other securities
listed or trade on a recognized stock exchange. Employees must also observe the internal rules on
personal trading in securities which the bank puts in place and which apply to all employees.
Money laundering:
The bank fully supports the international drive against serious crime and is committed to
assisting the authorities to identify money laundering transactions and, where appropriate to
confiscate the proceeds of crime. The bank has issued guidelines to all business units to enable
them to follow the anti- money laundering policy.

KEY PRINCIPLES
• The identity of a customer beginning a business relationship or conducting a single
transaction should be established from official or other reliable identifying documents.
The golden rule is to know your customers.
• Business units must keep record of customer identification for at least five years after the
account is closed and of transactions for at least five years after their completion, or
longer if the local law requires.
• If business units suspect that funds stem from money laundering, they should promptly
report those suspicions to the competent authorities and record the circumstances in
writing.
• Business units should not forewarn their customers when information relating to them is
being reported to the competent authorities.
• When a business unit reports its suspicions to the competent authorities, it should comply
with their instructions.

PROTECTING BANKS RESOURCES


All employees are responsible for safeguarding Banks and customers tangible and intangible
assets including cash, securities, business plans, customer information and physical property and
services. Copying, selling, using and distributing information, software and other forms of
intellectual property in violation of license agreements are prohibited. The use of email,
telephone, fax and computers are primarily for business purposes. Personal communication must
be kept to a minimum. Stationary including letterheads are to be strictly used for business
purposes only.

DISCRIMINATION OR HARASSMENT.
Habib bank encourages a work environment where employee differences are valued and
respected. Bank promotes equality of gender, race and religion and prohibits sexual or any other
kind of discrimination, harassment or intimidation whether committed by or against a supervisor,
coworker, customer, vendor or visitor. No employee shall because of race, creed, color, national/

34 Bahria University – Karachi Campus


ethical origin, gender/sex, marital status, sexual preferences, religion, age, or physical disability,
be subjected to any discrimination or to any harassment be another employee of the bank.

FRAUD, THEFT OR ILLEGAL ACTIVITIES


Employees are to be alert and vigilant with respect to frauds, theft or significant illegal activity
committed within the office. If any such activity comes into employee’s attention he must
immediately report the same to his immediate supervisor or group head who will arrange for
appropriate follow up action to be taken. Failure to report any such activity will be subject to
disciplinary action.

ACCURATE RECORD KEEPING AND REPORTING


Banks books, records, accounts, and reports must accurately reflect its transactions, and must be
subject to an adequate system of internal controls and disclosure controls to promote the highest
degree of integrity.
An employee must not make a fake claim for reimbursement of any expense.

COPYRIGHTS
Employee will not make unauthorized copies of copy write materials, bank’s proprietary
information such as banks documents, policies, manuals, instructions, computer program etc. Any
wok that you undertake for the bank is the sole property of bank and that should be kept secret
and treated as copyright.

REGULATORS AND AUDITORS


Compliance with laws, regulations and ethical standards is an important element of their
obligations to their customers, stockholders, and general public and other staff. It is essential for
the banks success that they take compliance seriously. An employee should think of compliance
as his own responsibility.

ZERO TOLERANCE TO WORK PLACE VIOLENCE


The bank is committed to creating and maintaining a working, learning and customer care
environment, which is free from violence. Mutual understanding and respect toward all
employees is an essential element for excellence in professionalism, existence of safe and healthy
workplace, and maintenance of a corporate culture, which serves the needs of the community.
The bank prohibits violence acts o threats of violence. Any employee, who commits or threatens
to commit a violent act, is subject to disciplinary action. The bank has zero tolerance for violence
against any member of the workforce or its property.

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DRUG- FREE WORK PLACE
Habib bank limited is committed to providing a safe work environment and fostering the well
being and health of its employees. This commitment is jeopardized when an employee illegally
uses drugs or alcohol on the job, come to work with these substances present in his body, or
possess, distribute, or sell drugs in the workplace.

EQUAL EMPLOYMENT OPPORTUNITY


Habib bank limited is an equal opportunity employer in hiring and promotion practices, benefits
and wages. The bank will not tolerate discrimination against any person on the basis of race,
religion, color, gender, age, citizenship, disability or any other basis prohibited by law in
recruiting, hiring, placement, promotion, or any other condition of employment.

NEPOTISM
While there is no prohibition against the employment of close relatives, the integrity of the
personnel process must be maintained.
Therefore, no one shall serve on a committee; make personal recommendations or decisions,
influence any person making decisions such as appointment, retention, transfer, advancement or
promotion affecting a close relative.

RESPONSIBILITIES AFTER LEAVING THE BANK


Employee must not use their position to advance their prospects for future employment, or allow
their work to be influenced by plans for or offers of, external employment which would conflict
or compromise in any way the best interests of the bank which would conflict or compromise in
any way the best interests of the bank.
Employee’s professional duty while being employed by the bank is to maintain confidentiality;
therefore, an employee must maintain the same professionalism and secrecy after leaving the
employment of the bank and not disclose any official information.

ACTS OF MISCONDUCT

• Theft, fraud, dishonesty with business or property of the bank or any other organization.
• Falsification of employment documents/ data to obtain employment.
• Tampering the office records.
• Negligence or improper conduct leading to damage of bank-owned property or damage to
the reputation of the bank.
• Conviction of a criminal offence within or outside the office.

36 Bahria University – Karachi Campus


• Violation of safety or health rules.
• Smoking in prohibited areas.
• Spitting within banks premises.
• Unauthorized absence from duty.
• Illegal strike or go slow tactics.
• Misuse of official stamps/ letterheads/ telephones/ computers & other items.

The bank, at its sole discretion, shall determine what act or omission constitutes misconduct,
breach of trust or negligence of duty.

CONCLUSION
This employee book includes the code of ethics & business conduct, there is written a set of
general principles rather than detailed prescriptions. It is impossible to address every single
circumstance you may face that will require you to ponder the proper ethical approach in any
given situation. This successful development of an ethical environment relies upon the sense of
responsibility for our own professional behavior taking into consideration the provisions of this
code and policies of the Bank.

MERITS OF THE CODE


This code clarifies all the staff of the bank the conduct expected in the performance of the duties.
This leads the employees to conduct themselves in accordance with the highest standards of
personal and professional integrity and to comply with all laws and regulations and corporate
policies and procedures.

References.

Moreno, E. (2004, September). A Workplace Dispute Resolution System Creates A Winning Team.
Retrieved May 11, 2009, from http://www.mediate.com/articles/morenoE2.cfm#top

37 Bahria University – Karachi Campus


Torr, J. (2004). The mediation process. Retrieved May 11, 2009, from
http://www.staffs.ac.uk/idr/mediationprocess.html

Weeks, D. (1992). The conflict resolution process. Retrieved May 14, 2009, from
http://www.qvctc.commnet.edu/classes/ssci121/weeks.html

38 Bahria University – Karachi Campus

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