Dubai Islamic Bank
DIB is a bank that offers an array of products and services that are compliant with the Sharia laws of the UAE. The institution offers commercial, financial services, trade services, customer transactions, and classified banking, among others. Also, among its product and service portfolio are free electronic banking, savings account, current accounts, free payments on utility bills, investment account opening, deferred payment cards, personal finance, and home finance, all of which are Sharia-compliant.
The company has listed its shares in the Dubai Finance Market. DIB is a public company that is currently having operations in 62 different locations. The company’s vision is to be the leading Islamic financial institution. The mission of the DIB is to improve and maintain its position as the global leader in Islamic banking by offering unrivaled innovation, growth, customer service, and consistent engagement of its employees.
First Gulf Bank
First Gulf Bank is considered one of the leading banks in the UAE. The institution caters to the buyer, bulky purchasing, and capital segments, where it offers an extensive selection of supplies such as bancassurance and Islamic financial transactions. The bank has established a consolidative network across the UAE and even internationally. First Gulf Bank has earned recognition as an excellent organization that is committed to extending its value to its shareholders, employees, and customers by focusing on the delivery of banking products and services that meet the needs of the client while at the same time supporting the economy of the UAE.
Moreover, the bank has extended its commitment through investing in both people and technology to provide excellent services. The organization’s mission is to ensure that it forms the first choice for its customers in all its selected markets through enhancing its brand, both locally and globally, growing its international and local coverage, delivering full-service proposition, and achieving a sustainable financial return.
Review of Literature
Strategic Functional Areas of Human Resource
Strategic Human Resource Planning
Human resource planning (HRP) is the process by which an organization identifies the number of employees it requires to cater for its service/product quality and quantity. HRP is an on-going process that is periodically reviewed by an organization. The process is aimed at achieving both training and skill requirements, as well as developing human resources. Through developing its human resources, an organization can have a competitive advantage through enhancing its employee efficiency.
Fundamental functions of HR planning are categorized into three areas, namely, labor forecast, management of employee demands, and maintaining a balance between the supply and demand for labor. Hence, HR planning investigates all organizational requirements, needs, policies, and human resources that are necessary to achieve the organizational objective (Aslam, Aslam, Ali, Habib, & Jabeen, 2013). HRP is the prime activity of HR management
Talent management is a primary function of human resource management that is required to ensure the success of an organization. It incorporates the execution of complex mechanisms or techniques that are aimed at augmenting efficiency in the administrative centers through better processes that draw, choose, maintain, expand, and deploy human resources with the required propensity and expertise that match both the present and the expected business demands. For talent management to be effective, it must be aligned from top to bottom. Hence, it must be hammered from the top positions in leadership to the lower levels (Lockwood, 2006).
Training and Development
Training of employees entails an expert working together with the learners to transfer knowledge and skills that improve the performance of the current organizational duties. In the context of management of human resources, development refers to a multifaceted set of functional activities aimed at elevating the performance threshold of an individual and that of an organization through equipping the individual with a set of skills that allow them to perform a particular task or role in the future. Training and development form an important facet in maintaining a competitive advantage of an organization.
Through upgrading skills and knowledge set of employees, an organization can produce higher quality of products and/or services in a more effective way by upholding change while appreciating its contribution to innovation (Yawson, 2009).
Performance management as a function of human resource management is a strategic process that incorporates the setting of goals, performance appraisals, and the development of a coherent human resource framework driven by a specific objective of aligning the individual performance goals of employees with that of the organization. Therefore, performance management encompasses how employees work, including how they can be managed and developed to improve their performance and ultimately, how their contribution to the organization can be optimized to reap maximum benefits. The function of performance management can be contextualized to inform a cycle encompassing objective setting, performance development, and performance review in this order (Atkinson & Shaw, 2006).
Human Resource Management Practices and Techniques
Staffing entails a set of organizational processes that include job analysis and design, human resource planning, recruitment, selection, performance appraisal, career planning and development, and staffing administration. Each of the individual components contained in the staffing process is essential to the accomplishment of the primary staffing objective. Job analysis or design is a basic component based on its direct impact on all other aspects of staffing. Human resource planning is highly dependent on a job analysis and design, but it can also be affected by performance appraisal, staffing administration, and career planning and development.
Furthermore, human resource planning forms the basis of the recruitment of additional staff. This process, in turn, entails the selection of employees who meet the requirements for a particular job description and specification. Employees hired by an organization, in turn, affect its performance appraisal, staffing administration, and career planning and development. Each of the staffing activities inevitably affects the evaluation of staffing effectiveness, including how well each activity is done. Procedures, policies, practices, and programs used in any of the staffing components must be carefully reviewed concerning their impact before being implemented or developed (Caruth, Caruth, & Pane, 2009).
Compensation refers to the monetary or non-monetary reward an employee receives from the organization for his or her service. The processes of reimbursement are based on strategies and philosophies, guiding principles, procedures, and structures, which have been established to offer and uphold sustainable and suitable forms of paybacks and other reimbursement categories. Compensation practices vary significantly across various employment units and jobs.
These practices can range from basic pay and benefits to incentives. Reimbursement can be associated with worker enrollment, business configuration, maintenance, presentation, impetus, and job contentment. For the employees, compensation is commensurate with how much they are valued by the organization, as opposed to how they are paid. Organizations use three main techniques to compensate their employees.
The methods include non-monetary reimbursement, direct reimbursement, and indirect compensation. Direct compensation includes basic pay, incentives, stock options, and bonuses. Indirect compensation includes housing, unemployment, and social security benefits. Both aspects are essential considerations in determining compensation types to be given to an employee (Hackett & McDermott, 1999).
HR Development Environments
Human resource development is a framework for expanding human capital in an organization through the development and improvement of individual and organizational performance. Techniques applied by organizations as part of their human resource development include career planning, career development, social and cultural programs, teamwork programs, and employee training (Sharma & Maheshwari, 2013).
Strategies and Programs
Dubai Islamic Bank
The organization has earned a reputation for fostering the development of its human capital. The company promotes both an inclusive and diverse work environment by supporting its staff members to achieve their optimum performance levels and/or help to grow the company. An interview with the company’s CEO, Adnan Chilwan, revealed how the company’s human resource management strategy includes a range of career development programs and opportunities for its employees.
Additionally, the firm has integrated a talent management approach such as the High Potential Employee Program, where it is constantly involved in the creation of exciting career plans for its employees (Dubai Islamic Bank, 2016). Through such programs, the bank continues to enhance the skills of its existing employees through continued training. Its human resource development strategy that is characterized by promising career development opportunities ensures that it attracts and retains qualified and experienced staff in all of its segments as part of its staffing strategy.
The company has integrated the Emiratization program as part of its human resource strategy. The key objectives of the program are to recruit, retain, develop, and reward excellent employees who are UAE nationals. According to Chilwan, the program also identifies training and other developmental needs of its UAE employees through proactive interactions. This program ensures that the training needs of its employees, especially emirates, are met. Moreover, it establishes an effective mentorship scheme for its UAE employees (Dubai Islamic Bank, 2016). The summer training program is one of the emiritization development programs put up by the company to provide valuable work experience opportunities to the UAE nationals.
First Gulf Bank
One of the key priorities of the bank is to invest in growth and development of its employees. In this regard, the human resource department’s role is to ensure that the organization develops and sustains high performance through formulating and implementing strategic policies and practices. The company believes that through the continued engagement of its workforce, the firm can automatically improve the performance of its business.
In relation to this policy, the company conducts annual employee engagement reviews to gauge the organization’s pulse. This approach allows managers and employees in collaboration with human resources to improve the performance of the organization. Additionally, the company has invested in building talent through its leadership development program that aims at identifying talent at all levels across the organization. The identified talents are then taken through various training workshops that cover behavioral, technical, and functional competencies.
The bank has devised concrete compensation and benefits programs for its employees. The programs cover all levels and types of jobs. For instance, the company’s expat salary package is meant for newly recruited employees. It entails benefits such as free visa and master credit during the first year of employment, special discounts on vehicle purchases availed at special car dealerships, and loan packages payable over 15 years.
The bank has also incorporated an employee banking solution in its compensation and reward strategy by offering its employees customized financial products. The employees’ banking solution comes with benefits such as attractive interest-bearing accounts for transfer of salary with no minimum bank requirements. The benefits also include welcome packages for new recruits comprising a debit card and a bank account on the day of joining, free unlimited ATM transactions, overdraft facilities, attractive interest rates on personal accounts, auto loans and mortgage loans, and a 24/7 helpline. This program is aimed at addressing most of the banking needs of employees to ensure that their staffs have a hustle-free banking experience (First Gulf Bank, 2016).
Concerning its staffing strategy, the company’s recruitment and selection procedure is tailored based on the level and grade of the job position. Firstly, the company’s human resource team pre-screens and shortlists candidates who meet its qualification criteria for the available job positions. After short-listing the qualified candidates, applicants are then subjected to a psychometric test after which they are interviewed to evaluate their level of competency for the post. A shortlist of the most outstanding candidates is then made. A recommendation is submitted to the hiring manager, including the results for both the psychometric test and interview.
After reviewing the recommendation, the hiring manager then conducts interviews and ultimately chooses the best candidate for the post. The company’s recruitment and selection process is purely based on an objective, non-discriminatory, and meticulous assessment that entails the suitability of a potential employee to the job (First Gulf Bank, 2012).
Issues and Discussion
Dubai Islamic Bank
One of the main challenges facing DIB human resource strategy is its participation in the emiritizaiton program. The program entails giving priority in its human resource strategy concerning staffing, training, development, and compensation to the UAE nationals. Williams (2011) explains how the program forces businesses such as Dubai Islamic Bank to take on the UAE nationals who may not be as qualified or experienced compared to its non-UAE counterparts. This situation may greatly affect the company’s staff quality and consequently cause a reduction in the overall performance of the company.
One of the challenges that the company has faced regarding talent development is the retention of its quality staff in a highly competitive market. Therefore, through the High Potential Employee program, the bank can out-perform the market by developing a strong leadership network that spans across different levels of the bank. The beneficiaries of this program will be equipped to contribute to the bank’s strategic priorities and ambitions of growth.
Additionally, the bank has formulated a methodological development platform to facilitate the implementation of this program through ensuring its accessibility to its employees, exposure of employees to key strategic projects, mentorship, executive coaching, and exposure to senior management advice (Al Bawaba, 2015).
First Gulf Bank
One of the issues concerning the bank’s employee engagement and talent management programs is retaining its key quality staff. Fortunately, the company has devised ways of dealing with this challenge. It has provided mentors for recruits and trainees. It has also provided career advancement tools, conducted regular appraisals, and/or formulated methods aimed at acknowledging individual success (Al Bawaba, 2012). Moreover, the company strongly believes that the two programs are well equipped to tackle the existing and future challenges. To facilitate the programs, the firm has engaged in partnerships with international training institutions that can assist in providing business engagement, leadership, and entrepreneurial knowledge and skills to its employees to reinforce the organization’s talent base (First Gulf Bank, 2016).
Another challenge facing the First Gulf Bank in the implementation of its staffing strategy is the shortage of skills among its employees and new recruits. This issue has had a negative impact on its overall performance. Nevertheless, customers are making more demands regarding the standards of banking services. Additionally, the bank also faces the problem of recruiting additional employees to staff women’s branches in an attempt to expand its market share for lending to medium and small businesses. Therefore, to circumvent this challenge, the bank requires a diversification of its talent. As a result, it has implemented a mentoring and coaching scheme for all its employees while revamping compensation for its executive workforce (Hunter, 2011).
Dubai Islamic bank and First Gulf bank are two fully-fledged banks that practice Islamic banking and with operations in the UAE. Islamic banking has grown over the last decade to the level of competing well with conventional banking in terms of stability and efficiency. The two banks are among the leading institutions in the Middle East. They offer an extensive array of services such as commercial deposits, trade transactions, customer services, classified transactions, and asset financing among others.
Management of human resources is a fundamental challenge facing the two firms in the banking sector. One of the highlighted challenges is the growing shortage of human resources in Islamic banking sector. The situation requires players to formulate strategic management policies and practices to have a competitive advantage through attracting and retaining key staff. Both banks have incorporated a training and talent development strategy aimed at improving the performance of their individual staff and the whole organization.
However, the main challenge facing the implementation of this program is the retention of key staff members after investing in their training since they may later resign to work for competitor companies. As a result, both banks have formulated mentorship, coaching, and performance appraisal programs objected to tackle this problem as a way of maintaining a competitive advantage concerning staff quality. In addition, First Gulf Bank has incorporated partnership engagement through partnering with international training institutions to facilitate employee training and talent development.
Dubai Islamic Bank should engage in partnerships with training institutions that can organize training and career development programs for its employees while at the same time providing internship and job posts to new potential recruits. Through such partnerships, the banks will address the issue of skills shortage among the existing employees and recruits, thus improving the overall performance of the organization in terms of the quality of service and in meeting the increasing customer demands.
To address the issue of emiratization where the banks are forced to recruit less qualified employees to comply with government policy, the human resources team should perform a thorough job analysis to highlight the job descriptions and specifications of a particular post. Besides increasing the level of understanding regarding a particular job vacancy, this move will also increase the incumbents’ comprehension of what is expected from them.
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