Order ID 6463784949 Type Essay Writer Level Masters Style APA/MLA/Harvard/Chicago Sources/References 6 Number of Pages 5-10 Pages Description/Paper Instructions attached my work about Al Hilal Bank and what I would like to have is (CAMEL Compenent anaylsis) comparing it with Dubai Islamic Bank, AbuDhabi Islamic Bank, and Sharjah Islamic Bank and I want (Bowman’s Strategy Clock) and also I want another type of Analysis but not SWOT any one that we can use…
Case Synopsis
The United Arab Emirates has an enormous economy that is well-developed. Thus, the banking system has to be perfect to support the gigantic economy. The fact that the UAE has natural gas and oil exploration activities makes it have a further promising economy. Al Hilal is one of the leading banks in the UAE. It was established in 2007, and has won the market and become one of the most preferred banks in the country. During its launch, the government was facing many challenges. There was an economic crisis in 2008 and 2009 that caused the banking sector to fail tremendously. The decrease in interest rates, liquidity, and the support industries such as real estate and construction greatly affected the country. Nonetheless, Al Hilal had proper strategies and policies that helped it to stand firm and win the storm. It thrived irrespective of the many challenges. After absorbing the shock during its launch, the Bank became a giant in the sector. It merged with FGB and NBAD, a step that increased its economic muscles. It became the largest in the country and competitors paved the way as they could not compete with it. To further expand its muscles, Al Hilal merged with ADCB and UNB.
The process of merging these banks was long, but it was successful. This study focuses on the merger that took place between Abu Dhabi Commercial Bank and Al Hilal. The merger made the banks to realize the need to update the performance appraisal to an automated one, to increase employees’ satisfaction. Al Hilal employees claimed that the performance appraisal system was unfair. The process was tedious, and the results were disputed most of the times. Thus, Al Hilal learned that it has to stop using the semi-automatic system and switch to an automated one. ADCB had a modern performance appraisal system. Therefore, Al Hilal employees felt threatened. The management needs to take action to solve the problem once and for all. The bank has succeeded in other digital platforms such as the mobile banking application. Thus, it can be successful in the installation of an automated performance appraisal system.
Key Words: performance appraisal, digital transformation, merger, human resource, management, employee dissatisfaction
History and Profile
Al Hilal Islamic Bank was established in 2007 with its base in Abu Dhabi. Retail banking, asset management, and treasury were the kinds of business the bank handled. Being the first Islamic Bank in the CIS and Kazakhstan region, due to an intergovernmental agreement between UAE and Kazakhstan, Al Hilala had its mission in providing innovative banking products and services (AlHilalBank). The client-centric services offered are in line with the Sharia principles. The bank combined with ADCB and UNB to form one of the largest banking groups in the UAE region. The Bank is wholly owned by the Abu Dhabi government, and thus enjoys high long-term credit rating A+ by Fitch and A2 by Moody (AlHilalBank). The bank has opened 17 retail branches across UAE as well as three offices based in Kazakhstan (Ali, 2020). The branches offer digital-based services that facilitate their performance-driven culture.
The bank has increased its services by offering a wide array of banking services and financial products to gain a competitive edge. Al Hilal Bank has its foundation on sharia rules and regulations. The basic principles are to guide the bank in payments of interest and profit and loss sharing. Money is regarded as a form of measurement and as a medium of exchange. The bank has captured the Muslim community by offering services and products that have their culture in mind. Furthermore, the institution strictly observes Islamic Shari plus morals and values (Forstenlechner & Rutledge, 2020). It takes in ethical considerations while creating products with considerations of Islamic values and beliefs. The organization has an independent structure controlled by the Sharia Board.
Figure 1: Tower Housing Al Halil Bank
Source: (Al Halil)
The company, after being established in 2007, is governed by a board of directors. Most directors are from ADCB. The chairman, who is the chief executive officer and overall leader of the bank works closely with board members to set and implement strategic directions for the company (AlHalil). The strategic direction focuses on sound governance practices to earn the trust of stakeholders. Trust built ensures performance sustainability and shareholders value preservation. The board aims at striking a balance between profitability and meeting client needs, regulators, and other stakeholders. Board members are appointed by shareholders for a period of three years. The shareholders employ the board of directors based on their experience, skills, and knowledge.
Figure 2: Al Halil Bank Board Meeting
Source: (AlHalil)
The company’s mission is contributing to the growth of the UAE economy through creation of value for its stakeholders while positively profiling Islamic banking globally. The vision of the organization is to set new standards that redefine Islamic banking across the world. The company values are care, integrity, ambition, discipline, and respect. The company is currently employing digital transformation to simplify banking for the Islamic community.
Mergers
Abu Dhabi Commercial Bank and Union National Bank merged to acquire the Al Hilal Bank to form a powerful banking group in the UAE. After the merger, the group would carry the identity of ADCB which has majority of ownership by the government of Abu Dhabi; thus, benefits from strong institutional backing. However, Al Hilal Bank would retain its name and brand while operating as a separate entity, but within the group. The greater scale influences the scope of business by increasing market share and focusing on customer service excellence. Also, the bank focuses on continuous innovation of products and services to cater to the different clients’ tastes and preferences, particularly through digital channels. Subsequently, more investment on the employees of the bank, infrastructure and technology places them at an advantage compared to other banks within the region.
Once the merger was effective, UNB shares will be delisted from Abu Dhabi Securities Exchange, but retain ADCB’s legal registrations. The banks would operate separately until the effectiveness of the merger. The group hopes to be in the space of the next stage of UAE’s economic development. Moreover, the new group positions itself to support the regions economic vision, growth, and diversification. The financial institution sector is full of competition as they seek to win clients. This enables the group to take advantage of scale and efficiency to capitalize in people, services, products and channel development while gaining a greater market share.
Marketing Environment during the Launch of Al Hilal Bank
Al Hilal Bank was started at a time that no one thought it would thrive. In fact, the banking sector was full of foreign investors. The United Arab Emirates is the only country in the world that has 90% of the population as foreigners (Siiner, 2016). Majority of the investments in the country are owned by foreigners. Similarly, most of the employees are expatriates. They come to seek jobs in the UAE because of the favorable economic development. Thus, it was a tempting moment to start a bank, especially with a local preference in a region where locals are the minority. By the time the bank was being established, there were 50 banks in the country, with 23 belonging to the locals, while the majority 27 belonged to foreigners (Siiner, 2016). The sector had over $336 billion investment (Forstenlechner & Rutledge, 2020). Therefore, it was a courageous and risky step to think of starting a bank in the UAE.
However, only three out of the 50 banks had a significant share of the market, taking 30% of the segmentation. The rest shared 70%, which meant that the three banks dominated the economy (Siiner, 2016). There was a twist in the banking sector in 2008 when the banks belonging to the local Emiratis begun to pick. The expatriates started to suspect each other. Nonetheless, they trusted the Emiratis as they had started business at their ancestral land, and could hardly go away with their money. As a result, real estate businesses, individual investments, and construction sectors recorded a boom. The locally owned banks started to increase their market share significantly. Consequently, there was an economic crisis that forced the foreigners to withdraw their investments in the UAE market.
Between 2008 and 2009, the credit growth reduced from 50% to 9%, and this forced the foreigners out of the UAE banking sector (Forstenlechner & Rutledge, 2020). Banks had to take measures, and they reduced access to loans causing the stock markets to suffer a decline. As a result, the real estate, individual investments and constructions sectors that had boomed previously started to fail. Al Hilal Bank took this as a golden niche to start and claim its position at the top.
Government Challenges during Al Hilal Lunch’s Launch
The government faced liquidity problems that affected real estate and capital markets. Investors in the UAE had lost their trust in the banking sector as a result of negative interest rates. Thus, they refused to deposit money in the banks, and instead preferred to work with table banking programs that seemed promising. They could not risk the hypothetical monetary exchange programs involving the US dollar and the Dirhams. The government tried to intervene, but the rates it offered seemed to bring more harm than good to the investors. The continuous decrease in interest rates affected the working class, forcing many expatriates to go back to their country. Foreign investors abandoned a lot of unfinished projects and went back to their countries. Employers, also, could not take the pressure, and had to terminate contracts both for the locals and the foreigners. When Al Hilal bank was being launched, the UAE economy experienced rambling downfalls that caused closure of many major investments. Consequently, the equity, profit, loss and liquidity were affected.
Success Factors of Al Hilal Bank
Al Hilal Bank was fully owned by the government, thus enjoyed the support of the government financially and through branding. Government corporations enjoy credibility and trust from clients. Islamic nations are endowed with oil, and the banks that cater to this niche such as Al Hilal, had large investors from oil markets. The bank offered lucrative services, corporate governance and risk management services to its clients. When the oil prices hiked, the bank experienced significant growth as more investors made large deposits as the Dirham currency steadily rose against the dollar. The industry had top-notch banking systems that facilitated the ease of business transactions. Al Hilal Bank attributes its major success milestones to the merger between ADCB and UNB.
The organization has digitalized the banking system on a global scale. Digitalization has helped the company lower transaction costs by eliminating unnecessary costs. Productivity is increased when there is stronger operational resilience and capital efficiency, while utilizing company resources adequately (Al Hilal). The bank’s ambition to grow and reach its market share goals becomes possible through adoption of modern technology. Banks have heavily invested in Fintech industry that provides digital technology for all financial activities within the bank. Fintech ensures that models of financial institutions, products and services run properly to optimize banking infrastructure. Al Hilal Bank has taken into account the type of services they offer such as online payments, crowd funding, online remittances, and equity financing, leveraging on the modern technology to collect and analyze data.
Digitization demands the bank to attract, develop and retain talent within the organization. This has ensured that leaders are ready to take the company to greater transformational levels while employees connect and build relationships with clients. Marketing also promotes the brand to potential clients while reminding the existing clients why they are part of a dynamic team. Globalization gives customers broader choices as the banking sector becomes seamless (Satgunalingam, Abeysekera & Fernando, 2017). Global banking has pushed financial institutions to adopt policies and strategies that work to retain clients’ as well as searching for new ones to stay ahead of competitors. Most clients have access to the internet and are becoming tech savvy. Thus, Al Hilal has been on the forefront in providing the best services through digital platforms, creating a first-mover advantage.
Figure 3: Exhibit of Financial Success
Challenges
Conventional banking has for years played a dominant role in the financial sector and Islamic banking has been trying to extend its outreach. However, the low penetration in the market has been associated with lack of a Sharia legal framework necessary for interest free banking. Thus, the transactions are viewed as the selling and buying of properties, and hence, taxed twice. Moreover, Islamic laws have their own financial, transactional and execution framework, but this acts as an impediment since commercial banking and company laws contain provisions that limit their scope of practice within conventional limits (Benhayoun, Chairi, Gonnouni & Lyhyaoui, 2014). Furthermore, deposits made in the bank are done on a profit and loss principle. In case of a financial downturn within the industry, the losses are transferred directly to the depositors with no protection. Thus, the fear of such kind of repercussions on clients acts as the largest barrier to deposit mobilization within banks operating on Sharia laws.
The bank has been faced with the problem of looking for the right talent. Due to the stiff competition in the market, the bank has developed the need for professionalism in the banking practice. Hence the need to train banking professionals in Islamic banking and finance to cope with market demands. Benhayoun, Chairi, Gonnouni & Lyhyaoui, state that the training process is time consuming and financially constraining. Employees within the industry need to be retained and trained as well to handle the increasing workload. Al Hilal bank experienced diseconomies of scale in its operation and the merger between the three banks improved cost and profit efficiencies. The Islamic bank should identify stable growth to ensure they can provide credit facilities and generate economies of scale by standardization of compliance procedures.
Opportunities
Financial sectors in UAE region are mainly underdeveloped and a reason for the minimal use of renewable energy sources. Banks are unable to financially support the cause to produce renewable energy. According to Kumar & Bach, (2019) Al hilal Bank after the merger have increased the number of potential projects they can finance through their institution. The Bank benefits from underwriting and floatation cost uncertainties in the future market. Moreover, the Bank can take advantage of public issuance of securities to which provides opportunities for more investment avenues in financial markets. This promotes a saving culture by being more responsive to even small savers thus making the financial markets more competitive. Thus the bank can focus also on interest-free banking. If the outreach is increased, economies will aid in reducing the saving-investment gap.
Figure 4: Comparison of Domestic Credit showing the opportunities that Al Hilal Band had
Source: (The Economist)
The steady growth that the Islamic Banks have been experiencing provides a chance to increase investment banking operations and steer more IPOs and Sukuk issuance. The increase in IPOs and corporations increase the target market base through commercial banking. Al Hilal bank is in search of a unique identity as a platform for considerable marginal impact on the economy over conventional banks. By increasing investment banking operations, the company paves way to the increased utilization of equity financing over debt financing.
Downturn
The high rates of interest in the U.S currency have boosted profitability in the UAE. Cost cutting and financial barriers have facilitated lenders against the downturn. According to Moody’s rating, the largest banks including Al Hilal were up by 16% year on year. However, the low interest rates and rising provisions on bad loans were a huge down turn to the financial institution. The low interest rates lead to revenue for the bank. The tough economic times around the globe add salt to injury on the competitive industry. The property sector has been experiencing tough times, and the low interest rates weaken the quality of assets held by UAE banks putting immense pressure on profitability. The economic slowdown, bad deals, and a scam almost sent the bank to its knees, but the management moved in fast to help secure its lifeline. The employees were also affected with the negative growth experienced.
Al Hilal bank experienced an internal fraud of more than 136 million dollars. The amounts were taken from dormant customer accounts and later transferred to hoax accounts, then later withdrawn. The fraud was done internally by the banks employees thus going against the Islamic institutions norms and values. This led to huge debts due to the amounts of money stolen from the bank without suspicion since it was an inside job. As a result, of the financial challenges due to economic slowdown and the scam. Employees’ bonuses and benefits were greatly reduced. The institution could no longer support paying its employees huge salaries as well as provide bonuses and incentives to employees as a result of low profitability. Some employees were put on contractual basis while their perks were substantially reduced or eliminated amid low profitability and industry growth.
The financial institution failed to plan for the future since economic downturns do take place. The company had excellent products that were in line with Sharia laws and practices. However, they did not investment in technology that would see them through such situations. Investments also in research can help aid the organization forward as it would easily calculate the risk to take and when to take them. The institution failed to maintain competition with other leading banks to ensure its survival. Customers, even those loyal to the brand withdrew their funds because they were afraid of a possible shutdown. If the bank was to be acquired by another bank, the assurance that their money was safe and intact was uncertain.
Employee Dissatisfaction
Value in a company is created by loyal and productive employees. Employees can self-motivate but the management also needs to find ways to renew their levels of motivation. The morale of employees in an organization can be boosted if the management and the other employees work together. The management should ensure their expectations are properly communicated to employees (Satgunalingam, Abeysekera & Fernando, 2017). However, the management needs to also provide a good platform for employees to air out their expectations as well as the impracticalities of a certain demand by top level management. When they feel valued and appreciated, there is more job satisfaction and fewer turnovers. Before the company was taken over and merged with Abu Dhabi Commercial Bank and Union National Bank, the institution experienced huge financial losses. The employees became dissatisfied with their jobs. The salaries reduced while incentives were greatly reduced.
Employees are the driving factor of productivity in any organization. The management should ensure it employees are well catered to. Employees of Al Hilal bank had their reasons for working even when the institution began making immense losses. The Bank decreased their morale by interfering with their salaries and incentives. Moreover, management was not supportive of employee efforts to try and retain clients which they were losing very fast. Employees are the first contact persons with clients and when they are not supported financially or mentally, they may fail to perform as required (Rao-Nicholson & Salaber, 2015). Unhappy employees represent how a company is and translates eventually to the customers. Customers at Al Hilal bank fled to other financial institutions that they felt offered more stability and security.
Displeased employees at the institution bruised the brand’s reputation through an act or event. In turn, the institution experiences revenue loss. The marketing team becomes demotivated and is not able to upsell and close deals. Idowu (2017) argues that dissatisfied employees just come to work and wait for pay day. The employees show weakened work ethics and reduce interactions between employees and customers. Clients then begin to complain on brand reputation and post publicly about their unpleasant experiences thus impacting the organizations sales and revenues. The employees fail to sell the company name positively due to decreased company loyalty (Idowu, 2017). Al Hilal bank failed in keeping its employees happy who are in charge of driving consumers to purchase and recommend a business. Management should have increased employee morale to increase productivity, efficiency and revenues.
Al Hilal Bank Digital Transformation
The world is transforming to digital systems which are replacing the traditional systems, and Al Hilal Bank was not left behind. It has started to offer high quality and affordable Shariah-compliant services that focus on the digital platforms. The strategy was aimed at creating a considerably improved customer experience. Thus, it launched a mobile banking application that would ensure customers can conveniently access banks services and products. Further, the expansion of the Automated Teller Machines across the country enhanced access to fee-free banking networks.
The digital transformation placed the bank in a better position both locally and globally. The banking sector is transforming to the digital systems to increase efficacy and enhance security. It is one of the most sensitive sectors that have to be protected to ensure the interests of the customers are properly safeguarded. In this focus, Amr Al Menhali strategized digital transformation as the new road map to success. The bank management invested extensively in innovative and distinctive technology to heighten customer experience. The CEO, in his speech, appreciated the work that the stakeholders had done to ensure the banks succeed in its motive to transform. He argued that it was a golden opportunity for Al Hilal Bank to thrive in the sector as a digital-focused and innovative company, providing customers with exceptional banking services that are not only outstanding, but also compliant to the Sharia Complaints. The board of directors supported the entire idea of digital transformation.
The bank moved into the digital systems more smoothly than other banks had done as there was little resistance from the employees. The smoothness can be attributed to the effective communication systems that the bank has. The CEO is an effective communicator. He has technical skills and ensures that all the employees get the information at the right time. According to Grubb, Brown & Hall (2015), managers who have effective communication skills succeed as they get less resistance. They easily convince their subjects to accept the change as it will benefit the company, the workers and the customers. The CEO in Al Hilal ensured that the transformation was not a management-only change. Rather, it was embraced by employees from all levels.
The digital transformation focused on the interest of the customers. A business that focuses on the internal and external needs of the customers has a higher probability of succeeding. Satgunalingam, Abeysekera & Fernando, (2017) believe that customer orientation is an important aspect that makes business to have the right focus. The business concentrates on satisfying the customers as they are taken to be the most important persons in the firm (Satgunalingam, Abeysekera & Fernando, 2017). During his speech, the CEO announced that the bank decided to do the digital investment so that it would place the customers at the highest point in the operations. The decision reaffirmed the customers that they matter to the company, and they will always remain at the top.
Figure 5: Factors that led to the success of the digital transformation
Source: (The Economist)
Al Hilal Bank started the digital transformation to have a global taste of what the other financial institutions were enjoying. However, it did not affect the Emiratisation rate that the bank held since its establishment. The bank gives the young talented Emiratis a chance to work in the bank. Ali (2020) points out that the United Arab Emirates has been on the news because of increased expatriate workers (Ali, 2020). There have been high cases of immigration in the country which is majorly attributed to the enormous economic development in the country. The locals criticize most of the sectors and individual companies because of taking the foreigners at their expense (Forstenlechner & Rutledge, 2020). The foreign workers are cheaper and easier to find, as compared to the local Emirates. However, Al Hilal has a high emiratisation rate which has been 50% since the establishment (Al Hilal Bank). This is a recommendable percentage, considering the fact that the country has 90% expatriates (Siiner, 2016). The management confirmed during the digital launch that it would use the digital platforms to track the local Emiratis, and would only increase the rate but not reduce it. The bank has maintained its locality, which is a positive factor that has increased its success rate. The management understands that high rate of emiratisation is key to the future growth of the bank, thus a crucial part of the strategic transformation.
The first step in the digital transformation launch was the introduction of a mobile banking application that Al Hilal Bank had initiated. The application was aimed at giving the customers the best services at the comfort of their dwelling. The customers were only required to download the App or acquire it from the IT experts working with the bank. The customer would then use his account number, card number and identity card number to register and start using the app. It had many digital features that such as facial and fingerprint recognitions that were safe and secure. The harmonious mobile experience allowed the customers to conduct banking transactions without visiting the bank or ATM centers. The customers also had a chance to include beneficiaries through the use of IBAN numbers.
The digital transformation did not only cater for the already existing customers. Rather, the mobile application had an extension for the newbies. It would allow the first time customers to register and open bank accounts with Al Hilal Bank. The application is user friendly and can be used by every person with moderate education. Further, it has special features which allowed digital IT managers to answer any question throughout the day (Al Hilal). The bank enhanced customer relationship as customers would consult the bank even at the wee hours of the night. Availability of the two main languages, Arabic and English, enhanced the application. The expatriates would easily use the App using English, and those who preferred Arabic also did the same.
The mobile application enabled the customer to access their accounts and freely withdraw money that was in the ADCB, Al Hilal and UNB banks. The banks had been merged, and the customers from all these banks were using the same application. They could enquire their balances and consult their branches at will. According to Rao-Nicholson & Salaber (2015), merging banks should make their environment so that the customers do not find the merged bank complicated. Instead, the environment should be better than what the original banks had. The purpose of emerging is to create a favorable business environment, and this should be the representation in all departments (Rao-Nicholson & Salaber, 2015). The merger that Al Hilal Bank provided had a favorable environment that could not discourage the customers from all banks.
Adjustment of the Performance Appraisal
The management of Al Hilal Bank realized that there was a need to implement a perfecet appraisal sytem in the pursuit to save the bank. The employees had complained, and most of them had left the bank for greener pastures. In this case, it was time for the management to use a modern appraisal syatem that would be fair and impartial. At the beginning, the bank was using a complicated semi-automated system that could review performance of all the employees on annual basis. The system was functioning as expected since it could automatically update employees’ personal information, tasks assigned, and the human resource management expectation from the tasks.
The appraisal process caused a lot of dissatisfaction among the employees. Idowu (2017) agrees that employees will not be satisfied unless the appraisal system appears to be fair. They felt that their efforts were not being recognized in the right way. Consequently, they felt demotivated to work (Idowu, 2017). The previous system at Al Hilal was unfair in the eyes of the employees. The system automatically updated all the activities that an employee did within twelve months. This included the successful transactions, those that had been cancelled, and the pending transactions. The management required the employees to rate their work and submit the ratings to the system. The employees would then one by one go to the immediate supervisor or manager and defend their ratings. The manager had the power to approve or disapprove the ratings depending on his personal observation and records. It was not only a tedious but humiliating exercise both to the supervisors, the managers, and the employees. The face-to-face confrontation and defense-like meeting created unnecessary tension at the workplace. In fact, employees could hardly serve the customers effectively since they were so tensed.
In some cases, the employees could not agree with the managers or supervisors. Moura & Costa (2018) argues that at the workplace, conflicts are inevitable. The employees will conflict with their colleagues, and they will also disagree with the management (Moura & Costa, 2018). Sometimes conflicts are healthy as they act a wake-up call to the management. Idowu, (2017) agree that matters that have been oppressing the employees are sometimes discovered when conflicts arise, especially between the junior employees and the managers (Idowu, 2017). The employees claimed that the managers were unfair to them. The confrontations could sometimes become violent, and the parties ended up at the police station. The employees claimed that the managers were favoring their favorite employees, at the expense of others. The disagreements ended at the human resource manager where the manger and the employee had to agree on the ratings (Ali, 2020). The employees claimed that the HR was always on the manager’s side. The two are administrators and could not side with a junior staff. Therefore, it was unnecessary to resolve the case with the HR because he was always partial.
Managers should be effective conflict resolvers. Moura & Costa (2018) agree that the managers should have perfect dispute management skills so that they can help the juniors to resolve their disagreements. Further, the human resource manager has the responsibility of resolving all disputes involving workers at the workplace. In this case, it was unprofessional for the manager and the HR at Al Hilal to work together and be unfair to the employees. A negotiator should always be neutral, and never take any sides (Moura & Costa, 2018). The employees claimed that there was no single case that the HR sided with the employee. He always said that the manger was right and forced the employee to accept the ratings that manager suggested. It was humiliating to know that those who were recognized and rewarded were not the real performers. The employees stopped to enjoy the working environment. They felt that the board of directors and the management at large were frustrating them.
Apart from the complaints from the employees that the performance appraisal was unfair, the bank further faced a challenge of merging the Al Halal system to the ADCB sytem. The merger was a huge risk that the management could not leave any stone unturned. The two Banks had very different systems that were now supposed to work as one system. The Al Hilal system was based on annual reports (Fattah & Nair, 2018). A new employee was likely to receive rewards just like permanent employees who had worked with the company from the first day. Such mistakes occurred because it was based on ratings. UNB and ADCB, on the other hand, had a system that rewarded employees twice per year. They conducted performance appraisals at the beginning of the financial year, and rewarded the best performers on March and August. The employees in these two banks received bonuses after the performance payment. The banks argued that they needed to keep their workers motivated, and that is why they introduced the bonuses.
Employees at Al Hilal bank felt insure about the merger. They understood that the other banks had an effective performance appraisal system that fairly rewarded the employees because of their efforts, unlike theirs that was unfair. Rao-Nicholson & Salaber (2015) point out that employees in the financial institutions are restless whenever there are financial crisis in a country. They fail to understand their fate as merging is known to take some employees home. In fact, the last days before a merger are full of uncertainty and dissatisfaction. Employees do not have anything to motivate them to work the next day. They believe that their fate is already destined. Thus, they just report to work to complete their last days and look for another job (Rao-Nicholson & Salaber, 2015). This is the same feeling that Al Hilal employees had. Their career was at risk. The grapevine about the merger reminded them that no position is permanent. The chairman learned that the employees were demotivated, and he wanted to do something to confirm to them that their jobs are secure. Thus, there was a need to replace the old performance appraisal system with a new one that would be automated.
Recommendations
The study recommends that there is need for Al Hilal to immediately install the automated performance appraisals so that the employees can be satisfied. The bank has been successful, and the mergers have added positive points into the success. However, success of every organization has its backbone in the employees as they are the ones who work hard to achieve the organizational goals. Employees will only increase productivity if they are motivated and fairly rewarded. In this case, therefore, considering the challenge that the bank has witnessed of employees dissatisfaction, the automated performance appraisal should be installed with immediate effect. The IT department should ensure that it comes up with a current program that will enhance the system so that it does not fail and add to the dissatisfaction.
Conclusion
Since its establishment in 2007, Al Hilal bank has been successful. It was started during economic crisis, but it managed to shine irrespective of the many challenges. In fact, it is the only local bank that was started during that time and was not closed down when business were closing. The merger with ADCB and UNB further increased the victory. The bank has managed to introduce a mobile banking application which is doing perfectly well. However, the merger raised a major challenge. The bank had been using a semi-automated system that the employees did not approve. They were uncomfortable as they claimed it is unfair. Thus, there is an urgent need for Al Hilal Bank to install the automated performance appraisal system to motivate the employees and increase production.
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