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HRM 380.1 HRM 380.1 Group-BGroup-B

LETTER OF TRANSMITTAL

HRM 380.1Group-B

North South University

April 21, 2011Mr. Tajuddin AhmedFaculty, School of BusinessNorth South University

Dear Sir,

Here is the human resource perspective analysis report of the case Commercial Customer Service at Bank One that you asked us to report upon. We have prepared this report in accordance to your instructions.

The purpose of this report is to portray a clear picture of the case on Bank One on the Human Resource perspective. We hope this report will come to your benefit. To serve the purpose, we have analyzed this topic to get the appropriate output. As per your direction we have tried our best to emphasize our results through this report. We sincerely hope that this report will fulfil the requirements suggested by you for the course HRM 380.

We greatly appreciated your consideration of our report. For any further queries regarding the report, please feel free to contact us.

Best regards,

Efta Khairul Alam Mohammad Manzoor-A-KhodaID# 083 232 030 ID# 091 0060 030

Nazratun Sururan Shahrin Nusrat Sababa ShammaID# 091 0029 030 ID# 083 425 030

Jesmin Jerin ID# 091 0036 030


EXECUTIVE SUMMARY

Bank One Corporation was the sixth-largest bank in the United States. It traded on the New York Stock Exchange under the stock symbol ONE. The company had its headquarters in the Bank One Plaza in the Chicago Loop in Chicago, Illinois. Chicago-based Bank One Corporation formed in 1998 through the merger of Banc One Corporation, headquartered in Columbus, Ohio, and First Chicago NBD Corp. The fourth largest bank in the United States in the late 1990s, Bank One is also the number two issuer of credit cards. The company offers such services as commercial and corporate banking, loan and leasing, insurance, and investment and brokerage services. With branches primarily located in the Midwest and Southwest, Bank One has more than 1,800 branches spread across 14 states.

In HR issues, the report discusses about the different HR problems, which can be minimized or removed from the organization. The HR issues are:

1) Lack of an active HR department at Bank One.

2) Deficiency of adequate communication of employees with the customers.

3) No training and development programs for the employees.

4) Bank One is most likely to face problem in terms of managing and controlling the large diverse workforce.

5) Bank One had a poorly managed organizational system.

6) The recruitment and selection process at Bank One lacks strategic focus.


THEME

Bank One is one of the leading financial institutions in the United States. The history of the bank involves a series of mergers and acquisitions. Due to the drastic post-merger integration, infrastructure is not similar in different parts of the organization. The lack of alignment and synchronization between different business units of the company has had great adverse effects on customer service, the key to success in the Financial Services industry. Jamie Dimon, Bank One’s new CEO has advocated changes aimed at achieving superior customer service. His challenge now is to determine strategies for development in the four key areas- Introduce TQM culture in all aspects of commercial customer service at Bank One; there is no specific mention of any HR department in Bank One; technology should be upgraded to provide the best support to customers and the absence of effective and an efficient performance appraisal System.


MAIN ISSUE

What should Jamie Dimon do in order to ascertain the retention of high-quality customer services at Bank One and thus assure its sustainability, therefore its profitability and growth in the long term?


SWOT ANALYSISSWOT analysis is a strategic balance sheet of an organization; that is the strengths of the organization, the weaknesses of the organization, the opportunities facing the organization, and the threats facing the organization. It is one of the cornerstone analytical tools to help an organization develop a preferred future. It is one of the time-tested tools that have the capacity to enable an organization to understand itself, to respond effectively to changes in the environment. The purpose of the SWOT analysis is to provide information on strengths and weaknesses in relation to the opportunities and threats.

Successful planning process for the human resources of an organization depends on creating a fit between the resources available to an organization and the opportunities present in its environment to minimize the weaknesses and face the challenging threats to survive and lead the industry. Evaluation of internal and external factors helps to analysis Strengths, Weakness, Opportunities, and Threats.

Effective and efficient planning process for Human Resource Management requires the perfect and specific information from the internal and external environment. The benefits of a SWOT analysis are that it provides learning and knowledge vital to the organization’s survival and prosperity. Therefore, SWOT is very important part for any company to be successful in the long run.

A business does not perform well just by accident. Good performances occur because of the people directing the affairs of the business, and their interaction with the environment in emphasizing on the company’s strengths and eliminating any underlying weaknesses.

In other words, in order to operate successfully in a continuously changing environment, the business firms should plan its future goals and strategies around its strengths and also try to overcome the weaknesses. Thus, the

key skills,

resources of the

firmidentifyi

ng strength

s and weaknesses (S & W)

I n t e r n a l a n a l y s i s ( l o o k i n g i n s i d e t h e fi r m )

environmental scannin

gidentifyi

ng opportu

nities and

threats (O & T)

E x t e r n a l A n a l y s i s ( l o o k i n g o u t s i d e t h e fi r m )


assessment of strengths, weakness, as well as opportunities, and threats become an essential task for management.

Strengths refer to the competitive advantages and other distinctive competencies that a company can exert in the market place.

Weaknesses are constraints that hinder movements in certain directions.

Opportunities primarily arise from the external environment, and refer to the chances of gaining competitive advantages.

The external uncontrollable variables that can create problems on organizational performances pose as Threats to business firms.

Environment

Internal Analysis

Strength Weakness

External Analysis

Opportunity Threats


SWOT ANALYSIS

STRENGTH

sixth largest bank of USA Customer service was set to top priority widely spread with many branches in U.S immediate priorities for the bank Considerable progress in the first year cut unnecessary expenses bring higher return on equity increased stock price. excellent and match winner CEO profitability of each loan Sharing profit after meeting the earning target implemented a Bureaucracy Busters Program

WEAKNESS

Compensation package is not well designed Low stock price and bad customer service internal conflict difficulties to manage the diversified workforce too many risky loans increase their interest rate Twisted mix of computer systems lacks a proactive recruiting system difficulties to deal with the downsizing Lack of training and development facilities

THREAT

Competitors Absence of recognition plans and training

programs Market forces are not sufficiently strong and

fine Tuned Getting familiar with the latest technologies Increased the interest rates from 4.5% to 19.9% More Expansion/Diversification May Lead to

Chaos changes in the bank’s products and Services

Frequent expensive practices not working in real life’

managing and controlling the large diverse workforce

OPPORTUNITY

Expansion in other areas of US

Excellent commercialization of customer service by Dimon’s leadership

Fast technology growth Hiring new compliance officer Expertise offered by the management team create platform for global business Initial Public Offering (IPO)

add new portfolios of services


STRENGTHBank One is the sixth largest bank holding company in the United States, with assets worth over $260 billion. Their headquarters is located in Chicago. The bank has 2,000 branches in 14 states where 74,000 employees are working presently. The bank is a leading provider of lending, treasury management, and capital markets products to Middle Market businesses and corporations.Bank One has recently brought some changes to its corporate structure for better management. For an example, they have taken five major changes procedures to gear up their motion and to regain business reputation. New person has been appointed as the President of the Group. New computer monitoring and compliance officer have been taken for better operation maintenance. Training division has been renovated for better corporate performance. Policies have been rechecked to ensure that operations are going well in order; especially the procedures, which are related with market timing and trade periods. It encourages the newly appointed person to perform better. Training is a vital element for corporate success. This truth has been finally realized by bank One after having a lot of troubles and panic. They now have been started to enhance their training standard and like to bring all personnel under up to date training program. This will definitely improve the service delivery. The more they will receive training the more they will be innovative. In today’s competitive business world this is an important key element for success. Better monitoring also ensures better results from the workers. It helps to extract the loopholes of the system and also helps to find out the ways to solve any complex situation. So these steps can act as very strong key point for Bank One.

‘Bank One’ is considered as the sixth largest bank of USA’

Bank One is the sixth largest bank holding company in the United States, with assets worth over $260 billion. Their headquarters is located in Chicago. The bank has 2,000 branches in 14 states where 74,000 employees are working presently. The bank is a leading provider of lending, treasury management, and capital markets products to Middle Market businesses and corporations. The retail bank serves over 7.2 million households.

Bank One’s Commercial line of business operated in fourteen states in four regions: the West, South, Midwest, and East. The South region included Louisiana, Oklahoma, and Texas; while the West covered Arizona, Colorado, and Utah. The Midwest consisted of Illinois, Indiana, and Wisconsin, and the Eastern region covered Kentucky, Michigan, and Ohio. Their massive size


ensures their market and by improving services they are able to attract more customers.

Customer service was set to top priority as the customers are more concerned about customer service than stock price.

In Bank One, customer service was set to a top priority, along with integration of systems, breaking down bureaucracy, and streamlining operations with a leaner, meaner bank. This decision made them well-built to improve the customer service and also work out for complains made by customers previously.

Bank one is widely spread with many branches in U.S: operates its commercial line of business in fourteen states in four regions in U.S.A.

All companies must have a goal and set standard to have the best position in the market. Development is the most important criterion in any kind of business. Bank One Has a Vast commercial line of business in U.S.A. Bank One operates its commercial line of business in fourteen states in four regions in U.S.A. They cover almost four regions; the West, South, Midwest, and East. The West region includes Arizona, Colorado and Utah, South is covered Louisiana, Oklahoma and Texas. The Midwest region is consisting of Illinois, Indiana, and Wisconsin, and at the last Eastern region is just covered the Kentucky, Michigan, and Ohio. In these regions The Bank One operates its commercial lines of business very effectively. The main lines of business of Bank One are Investment management, retail, commercial and credit card.

Chief executive Jamie Dimon has identified four immediate priorities for the bank which were promising for a positive future of the bank.

Jamie Dimon identified four immediate priorities for the bank. These priorities were customer service, financial discipline, system conversions, and building the management team. All the factors are proven to be their strength which brings them a better future and maintains their position in the market.

Considerable progress was made by the bank in the first year after setting priorities for the bank.

Customer service, financial discipline, system conversions, and building the management team was set as priorities for the bank, which results in a considerable progress in first year in building its core and infrastructure, particularly in customer service.


The quality of customer service was tracked, measured, and rewarded by the bank. The bank also improved service through better systems and appropriate compensation plans.

The CEO of Bank One cut unnecessary expenses which bring higher return on equity and also increased stock price.

Under CEO Dimon’s leadership, the Bank experienced major changes. He cut expenses by16.6% which saves $1.8 billion.

In 2000, the bank suffered from $511million loss. But after cutting unnecessary expenses the bank earned $2.6 billion with a return on equity of 13% in 2001. The decision became their strength as the bank achieved that much success in one year only. Their stock price also increased by 34% and became $38.

Bank one has got an excellent and match winner CEO Jamie Dimon to achieve its goals.

Mr. Jamie Dimon is the perfect person to handle the current and ongoing crisis of Bank One. He was a tough, loud, charismatic New Yorker. People characterized him as a manic, whirling dervish who was into everything. He inherited a badly managed, poorly organized bank, and energetically set to work to turn the bank around. One of the first things he did was buy two million shares of Bank One stock, investing $56 million, half of his personal fortune. He wanted to lead the bank with his own money on the line.

This bank has already been passing a very turbulent time for which its survival has become questionable. In this kind of circumstance, Bank One is supposed to have somebody who can act as a “Crisis man” to overcome the situation and to regain its previous prestige and reputation. Mr. Dimon is a mastermind banking professional who knows how to tackle critical situation and how to react on those particular time. He has timely taken some measures, which proved him an expert solution provider for Bank One.

Bank one is getting more transparent than ever before.

Transparency is a major factor for business. After having some unexpected situation Bank One becomes more alert about this key factor. They like to present them in front of their shareholders in more open way than ever before. After the mutual fund scandal they felt that they need to clarify themselves that they were not directly connected with the problem. They have established stronger “Communication network” with their valued customers. They are also encouraging their employees to send letters to their clients to build up more intimate relationship as a part of their image enhancement program. Employees were acting with greater openness. the bank has shown keen interest and devotion about the questionnaires that rise from their customers’


side regarding different issues especially about any discrepancies. They have been presenting themselves totally free towards its customer’s enquiries.

Bank one has proved their extent of sincerity by brining dramatic changes inside of its infrastructure.

For tackling the current miserable situation Bank One has taken some tactful and appropriate steps. Hiring a new compliance officer for better monitoring, implementing massive training program etc are good signs of sincerity. They are also now observing how research funds are negotiated, paid and disclosed to investors. They are also now disclosing the portfolio of company’s business to their official website to make the customers more informed and aware about the current status of their business trend. This will help the investors to have a crystal clear idea how things are going on inside, whether they are going to have any benefit or need to be aware about any coming disaster.

They have creativity, capability to make product functional & more financial access.

Investment both financial and none financial has be worth to organizations goal and objectivity for having expected productivity and real output. Sufficient investment will also helpful to make the right product for the customers.

Bank one has a big assets value over $260 billion. The Bank One also has 74,000 employees at 2,000 branches in 14 states of U.S.A. These huge assets of Bank One state that they are financially stable. Assets like more than $260 billion are really a large amount in the banking field. Bank one is extremely well capitalized and well reserved banking company and they are also protecting against increasing interest rate.

Bank assessed the profitability of each loan on its books and reduced loss.

Mr. Dimon has to do worst-case scenario planning after analyzing the major weaknesses of Bank One. As a result, the bank assessed the profitability of each loan on its books. Domestic Corporate banking Chief John E.Neal reviewed a list of about 1,800 borrowers and gave warning to those whose loans might not be renewed. Many cheap loans were losing the bank money. The bank offered these commercial customers the opportunity to purchase other products (such as asset management, treasury services, derivatives, and bond underwriting) from Bank One, or find another bank. In this way, their relationship became profitable for the Bank. If they don’t accept that then they left the bank one.


Bank One implemented a Bureaucracy Busters Program to help reduce bureaucracy.

To help reduce bureaucracy, Bank One implemented a Bureaucracy Busters Program, an online suggestion box that paid employees for money-saving ideas. In 2002, the Bureaucracy Program was renamed The Idea Center to encourage more suggestions on how to improve the bank’s internal processes. In response, employees sent in thousands of recommendations, and the Bank put many of them in place.

Sharing profit after meeting the earning target motivates employees more.

Management centralized its operations and sought to give people in the field more authority and responsibility. It increased the feeling of ownership in the company by giving a grant of $300 in Bank One stock to the plans of almost 40,000 of its lower-paid employees. Employees at 1,800 branches were given the opportunity to share profits if they met earnings targets.

Divided organizational structure is considered as a big strength for Bank One as they can provide multiple services.

Bank One’s main lines of business included investment management, retail, commercial, and credit card. The bank defined small business as one with annual revenues of $10 million or less. Commercial customers had annual revenues of over $10 million.

The Bank’s Commercial line of business was divided into Middle Market and Corporate. Middle Market customers generally ranged from $10 million to $500 million in annual sales, while corporate customers ran over $500 million. The Middle Market group serviced depository accounts, treasury management products, capital market products, and commercial loans.

‘Desire to help people’- this policy made their customer service even better.

Over the first two years of Dimon’s leadership, Bank One’s customer service has steadily improved. One of the most important characteristics of a service consultant is a sincere desire to help people. This related to Jamie Dimon’s belief about what it takes to make the Bank succeed. To Dimon, this step was critical to success.

Quality Improvement Measures has been taken for customer service.

Under Dimon’s leadership, Bank One implemented a variety of measures to monitor and continuously improve customer service. These ensured that any issues were resolved to the customer’s satisfaction and included customer


care reports and conference calls, performance reports, monthly customer satisfaction surveys, and business won and lost surveys.

Bank made a promise to its customers and employees concerning its commitment to service.

The bank made a promise to its customers and employees concerning its commitment to service. Bank One promised its 60 million customers that they would receive individual answers to their requests and inquiries. This helps to them to get the employees more motivated toward their work and also attract or retain customers.

Bank One developed Service Essentials to ensure quality service.

Bank One developed Service Essentials in fall 2000, recognizing that the overall quality of the experience keeps customers coming back. It identified the following customer needs: Accuracy, Quick response time, Fast problem resolution, Proactive, empowered, knowledgeable, trustworthy employees, Personal attention

Modern computer technology & service excellence e-cards at Bank One

Technology is the most important factor now a day for the greater productivity and more output, which help every organization to serve successfully with in the competitive market in international business. At Bank One since customer service is their main priority, and to improvise on that the employees are asked to show their appreciation to internal colleagues and external customers. After the merger of Banc One and First Chicago NBD, Bank One was formed. These two banks were formed from previous mergers of many different banks, which used different computer systems to provide customer service. As a result the newly formed Bank One was having grave problems to serve their customers properly. Under the leadership of James Dimon, the Bank One implements a variety of measures to monitor and continuously improve the customer service. By this system employees know that what is right for the employees and what makes them satisfied. This system ensures that any issues resolved based on customer satisfaction, and also included customer care report and conference calls, performance reports, monthly customer satisfaction surveys, and business won and lost surveys.

More over this gives the employees a clearer and simpler idea of how the bank operates, and therefore makes it easier for them to work as well.

Bank One recognizes service excellence in several ways.

The national Commercial Client Services Recognition Program rewards the achievement of the Service Consultants in Middle Market, Large Corporate, and the Service Centers. The program began on January 1, 2000,


to reward employees, who received engraved recognition plaques with emblems to reflect their individual achievements.

Among the 26 emblem categories were Service Star, Best Overall Service Star, Sales Star, Client Applause, Leadership, Fraud Detector, and Lemons-2-Lemonade. Emblems were awarded monthly, quarterly, and annually, depending on the emblem criteria. The emblems were earned by course completion, supervisory, customer and business partner recognition, as well as peer and team nominations.

Service Excellence E-cards were launched in March 2002 to provide an avenue for employee’s to show their appreciation to internal colleagues and external customers.

The Commercial Banking Senior Management Recognition program sent a complimentary letter or memo from an Executive Vice President to employees in Commercial Banking who had received written compliments from internal or external customers.

Corporate Service Excellence began the Service Heroes program to celebrate service and spotlight employees who provided outstanding service to internal and external customers.

WEAKNESS

‘In bank one, Compensation package is not well designed to retain employees’

Though Bank One claims that they have an appropriate compensation plan, but the compensation package is not well described. Bank One provides a handsome amount of salary, profit sharing opportunity, and employee stock ownership plans, payment for cost-saving ideas, rewards etc. However, other employee benefits and services and some non-monetary rewards are absent from the compensation package. Without a total compensation package, the employees will not motivate to provide huge effort to improve the customer service. On the other hand, monetary rewards do not work always-for those cases non-monetary rewards should not be misjudge. As Dimon encourages teamwork, to have an effective teamwork employees should be satisfied with their compensation package.

‘Low stock price and bad customer service cause a adverse impact on bank’s reputation’

Bank One had a weak customer service and stock price. So the share value of Bank One was decreasing day by day. If a company can do well in


customer service then it will be a free promotion for them. The brand name or image will go up. But the absence of 100% effort Bank One looses their positions. So it is weakness for Bank One. This mainly arose when customer service at Bank One arose as a big issue. This affected their reputation in the financial market. More over the risky loans that they were giving out to large corporations was also an issue. Hence investors did not want to invest at Bank One anymore. As a result Bank One’s share price plummeted and the stock lost its value in two years.

‘In Bank One internal conflict arouse due to shared ownership which affected the performance of employees of this organization’

In an organization, conflict may arise due to many reasons between employees. In Bank One, there is also arise conflict due to shared ownerships and which became hamper the performance of the employees of this organization. Internal conflict disrupts the performance and morality of the companies’ employees. After the merger in the year1998; the confusion of ownership arose as big issue. After merging there is problem regarding the ownership means who get maximum % of ownership whether retailer or corporate culture. At last, it was decided that is Bank One will own 60% by First Chicago stockholders will own 40% of equity ownership.

Whenever a disagreement would arise in the banking system of Bank One then for the agreement on a single decision would be a very big problem. In some organization, they give award to some better performer of the company who does a good job in the organization. But sometimes some worker will feel jealous and create problem in working place. Therefore, some unhealthful situation will arise and it creates many problems in the organization. Bank one has such a diversified work force with employees from different corners of United States. So that they have different ideas and views which in turn may generate problems at times by arising internal conflicts among employees.

Bank One would face difficulties to manage the diversified workforce which occurred as a result of several mergers and acquisitions with other banks.

Bank One has a large diversified workforce due to its merger and acquisition of other two banks. Because of this merge, different employees come from different states in this organization and Bank One has to deal with this dissimilar workforce and it is very difficult to retain diverse workforce within organization. Bank One is the sixth largest bank in the United States. Though all the branches of Bank One are located in USA, the people vary from state to state because of the culture, ethnical value, geographical reason, life-style etc. Each people are different from others because of their sex, age, religion, locality, life-style, principles, religious and many other objects.


Bank one made too many risky loans and was not able to earn as much revenues as expected within a very short time frame

Bank One had face financial problem in early 2000. Bank One merges with two banks and because of this different system of those two banks will come in this organization. Due to this reason the organization faces problems. As a substitute of one integrated system they followed two different wayward systems. Bank One took an initiative to give away loans to large corporations because after merges Bank One was suffering huge losses. This was mainly with the aim to make a quick revenue generation. Though the bank wanted to earn as much revenue as possible within a very short time frame, it was not possible as they gave out loans to corporations, which proved to be risky ventures.

Bank One increase their interest rate due to restructuring procedure which may hamper the further transactions of customers with the bank

After merge, Bank One tries to make some changes in the organizational structure. According to these changes, organization needs to design new and upcoming business structure to support the changes. And financial support and efficiency is a need for any organization to support the restructuring procedure. So, Bank One increased their interest rate from 4.5% to 19.9% in the credit card section if only the customers made paid a day late only twice within a time frame of six months. As a result, it leads to trailing customers and this customer also doesn’t go for a further transaction with this bank and it hamper the overall transaction of the bank. If they don’t lower interest rates down to these present rates then borrowers don’t renew their loans timely.

Bank One may face difficulties to deal with the downsizing because of a lot of merger with different companies

To turn around the bank in a good shape from badly managed and poorly organized bank, Dimon eliminated about 8000 jobs. As a result, a large number of people became out of work. The Corporation not only terminated the employees but also made their family in trouble. If the bank does not compensate them well then those employees may bring the bank to court, which may cause huge problem. It may effect the bank’s reputation also. If the bank just simply lay off their employees without any payment, which is against the employment law, the court may give the order to shut off the business for rest of the life.

Bank one lacks a proactive recruiting system which can affect and discourage its employees to a greater extent

Recruitment system is very crucial for any kind of organization. Though, Bank One is the sixth largest Bank in USA; job seekers will always intent to enter in


the Corporation. But Bank One doesn’t have enough position to hire enough employees at that position according to market needs. When this organization extends their business they did not create any new positions for the job seekers. Unstructured recruitment process has reduced the morality, ethical behavior of the company.

Bank One doesn’t have any specific recruitment process or team mentioned. Bank One always recruits people either from the reference of higher authority but it does not putting prominence on educational background, criminal record, physical test, ability etc. Dimon eliminated about 8,000 jobs in his first year of the job, cutting the workforce to 75,800. he scaled back an auto-leasing unit. He closed wingspan, the online bank launched two years previously. The venture cost the bank between $100 and $150 million during its first year along. Eventually, Dimon replaced twelve of the top thirteen executive managers at the bank.

Twisted mix of computer systems hampers the customer service.

The bank had to blend seven deposit systems, and worked hard to avoid service problems that could frustrate customers to the point of leaving. Bank one’s goal was for customers to receive services seamlessly and efficiently, no matter where they were or their banking needs are. Dimon insisted on integrating the diverse system into one platform. Slowly, painfully, the bank underwent conversions to one unified system, state by state. The conversions required a huge effort that many at the bank thought was impossible. Twisted mix of computers systems left over in Bank One from Dozens of mergers with regional banks. So it is weakness for Bank One.

Lack of training and development facilities for service consultant can be the reason of misusing authority.

The service consultants are empowered to exercise their authority. They are not provided with any sound training for adapting to the changing environment of the business. Every time the service consultants need to learn new technology for enhancing their customer service. However, these people are not given any professional support or motivation for doing so. This style of learning on their own would be a bigger problem when many customers would require the service. They should streamline the service and make the job of Service consultants follow guidelines in addition to their style of doing work.

OPPORTUNITY


External conditions those are helpful to achieving the objective. Opportunities may occur suddenly. Opportunities come from factors outside of anyone’s control. These are in the environment that surround the business and should be tried to capitalize on. There are several opportunities are available for Bank One and in this case study:

‘Expansion in other areas of US will attract more customers’

Up till now Bank One has been operating its commercial line of business in fourteen states in four regions. These regions are the West, South, Midwest, and East. Bank One can further expand their line of business in other states of U.S. This will in fact help them generate enough revenues to cover the losses they have faced earlier. After Dimon joined in as the new CEO, he was very keen in improving customer service at Bank One, and he also made bank undergo various conversions to one unified system. That is he focused mainly on networking, making the computers talk to one another. This is what boosted their productivity in terms of customer service. If Bank One can further improvise on networking facility, they will be able to spread their services in many other countries throughout the world.

Bank One can add new portfolios of services to its existing line of business

Bank One currently is operating its line of business in investment management group, commercial, credit card, and retail. Apart from these four lines of business operations, Bank One can start operating in other areas of the service industry such as they can open up a nongovernmental organizations. This will allow them to do something for the welfare of the society, and also add value to the organization.

The main lines of business for Bank One includes Investment management, Retail, commercial, and credit card. The identification of the Middle Market and the Corporate market helps Bank One categorize the different mainlines according to the Market they operate. The financial standings of the institutions also help Bank One develop new strategies for operation.

Bank One goes for an Initial Public Offering (IPO) in 2003

Under such circumstances, when the bank’s wholly owned indirect subsidiary banc One Investment Advisors (BOIA) came under investigation in the mutual fund probe, the company also went public more or less the same time. Floating shares has its own advantages which includes the collection of capital. This step took the company to yet another level. Mr. Dimon took the opportunity to develop a strategy that involved cooperation, transparency and communication. Since they were a public company, they had to share this information with all their shareholders.


Thus, this helped them not only to now be a company gaining all the advantages that a public company has, but it was also an opportunity for the Bank One to promote transparency, cooperation and communication with the shareholders and gain their trust back.

Bank one can create platform for global business after fulfilling the local demand

Bank One has succeeded in getting many businesses across the regions. One of which is the building up of the credit card customers. This Credit card cluster of individuals in an area can create a huge market in the various regions of the United States and the global market. The Bank One can have an option to develop a platform for the credit card business. Being globally spread over the regions they have an opportunity to do Global business. Bank One has developed an extensive customer service-delivering unit. This not only has been operating in the specified region but also has a Central department. The extensive distribution of the customer service and recognition of it as a professional position makes Bank One develop Customer relations. They are always concerned for giving better quality and this creates opportunity for them to prosper with their service in the global arena.

Expertise offered by the management team can be shared through consult.

The Management team of Bank One consists of personnel from various well-reputed institutions. These are the expert panel of people who has a major role in the success story of Bank One. With such expertise available they can offer banking service other than the traditional one, which would help in earning extra revenue. Not only has this offered new business for the bank but also the inclusion of more human resource.

‘Excellent commercialization of customer service by Dimon’s leadership’ Over the first two years of Dimon‟s leadership, customer service of Bank One improved in a steady way. The main reason behind this success was the quick identification of the most important characteristics of a service consultant; that is, “sincere desire to help people”. Dimon told some system analyst, loan officers, and branch manager in Chicago that, winning does not come from Patent of Your IQ or educational background. It comes from one thing, “how much you want it”. According to Dimon, the desire to do the job well is critical for success.

‘Fast technology growth makes banking faster and easier’


Bank One is an institution where technology has a greater impact for delivering service. They have been adopting new technology for every phase of their transformation. This resulted in having a state of the art technology with their system of Banking. Bank One there would be able to deliver a faster response to the questions for day-to-day business. This provides them an opportunity for becoming the global Bank partner for large transactions worldwide. Bank One use advance technologies that was specific to customer service. They used a front-end system allowing them to access information. Another technology that Bank One used was the one to give Customer Service Consultants the ability to do call tracking. This helps the Service Consultants to see what was done previously for a particular customer and track how often the customer had called.

‘Hiring new compliance officer can be beneficial for the bank’

After holding a public dialog on the best practices in the industry, the Bank One selected and implemented a number of best practices which included hiring new compliance officer. With the hiring of the compliance officer and informing about this to all its stakeholders would likely to prove a great decision. This is because this officer is solely employed to monitor that everyone is following the law and working accordingly. This would make the happy and all those with bad intentions not do anything else any further.

Thus, this would help the Shareholders feel safer investing in the bank; and they would be again, be able to regain the confidence of the shareholders.

Threats

Threats are negative external environmental factors, which influences an organization’s decision. External factors are not controlled by the organization and to survive every organization needs to be very alert about its threats and how they can overcome this problem. Organizations should be proactive rather than reactive and should be aware of what are the competitors‟ moves and should take necessary action in advance to face those moves.

‘Competitors can be a big threat for Bank One in retaining the higher possession of the market’


Being the sixth largest bank in United States, Bank One has to make its employees work with complete dedication to maintain its reputation worldwide as well as to ensure updated customer service by using the advanced technologies. Strong competition from the banking industry is very obvious in this competitive era. As a result Bank One will have many competitors depending on the market as well as the promotional activities offered by other banks in the regional sectors as all the banks want to be in top of the market.

Several competitors in different territories of Bank One has been identified hence the competitors varied according to the market in the Southern region’s Commercial line of business. Bank One has competitors in Louisiana, Dallas and Oklahoma. In Dallas, the competitors were Chase, Bank of America, Wells Fargo, and Comerica. In Oklahoma, the major competitors of Bank One were Bank of America, Bank of Oklahoma, and Bank First. On the other hand, in Louisiana, local banks like Whitney National Bank and Hibernia were the competitors. Offering different lucrative promotional activities like increasing the number of ATM booths by the competitors can be a threat for Bank One.

‘ABSENCE OF RECOGNITION PLANS AND TRAINING PROGRAMS FOR THE SERVICE CONSULTANTS CAN CAUSE PROBLEMS’

All the employees both established and newly hired need sufficient chance to acquire diversified training and learn new skills available to serve the customers in enhanced ways. Customer relationship training is mandatory for the purpose of ensuring better service towards the customers.

Being the sixth largest bank, Bank One did not provide its employees with updated training in order to ensure error free service to the employees. The employees of Bank One were the people who work for the customer to give better service but the bank did not give them enough recognition. Lack of a precise training center can be a big threat for Bank One as other five top bank’s can provide their employees with best training to be competitive in this challenging market.

On the other hand, Bank one maintains service consultants’ position but does not recognize them accordingly in terms of dressing as well as performance. They had the same professional position as others in the Bank. Motivation is required for making them work better otherwise it might impose threats for the Bank as there is a chance that the service consultants will leave their job for not getting proper recognition.

‘MARKET FORCES ARE NOT SUFFICIENTLY STRONG AND FINE- TUNED TO ASSURE OPTIMAL CONTRACTING OUTCOMES’

Market forces are not sufficiently strong and fine-tuned to assure optimal contracting outcomes. Markets-including the market for corporate control, the


market for capital and the labor market for executives- impose some constraints On what directors will agree to and what managers will ask them to approve. The market for control might impose some costs on managers who are especially aggressive in extracting rents. The important point is that the market for corporate control fails to impose tight constraints on executive compensation.

‘GETTING FAMILIAR WITH THE LATEST TECHNOLOGIES FOR THE EMPLOYEES IS TIME CONSUMING WHICH MIGHT AFFECT THE

SERVICE’

The success of rapidly growing company is based on the frequent change of the technology to make the operation effective. It is always concerned about bringing in best technologies, which are needed to produce the best quality services that the market demands.

Bank One needed to use advance technologies as they were going through a critical period. They needed a front-end system allowing the customers to access information. Jamie Dimon has made significant changes in the Bank’s operations and steered it towards success. He improved all the features of customer service quality and Bank One could really enhance the quality of its commercial customer service between 2000 and 2003. But for that time being, the bank’s employees needed time to get familiar with the technologies. Service Consultant is required to upgrade their skills and technical knowledge very often which required training as well. This imposes a greater threat as the time taken for the different phases would make Bank One incur costs and also will they lose customers as no proper information will be available during the adaptation because it is really time consuming to get well known with latest technologies in order to apply it professionally.

‘Increased the interest rates from 4.5% to 19.9% in the credit card section’

Bank One, made some changes in the organizations policy regarding giving out loans to customers just after the merger. This time they increased the interest rates from 4.5% to 19.9% in the credit card section if only the customers made paid a day late only twice within a time frame of six months. Because of these, a large number of customers fled; therefore investors did not want to invest at Bank One anymore. As a result Bank One’s share price dropped and the stock lost half its value in two years. This affected their reputation in the financial market. This led to customer abuse and as a result many of the customers made no further transactions with the bank. If they do not lower interest rates down to 4.5% or somewhat lower than 19.9% it is unlikely that they will get their customers back. So the increased interest rate of Bank One is one of the biggest obstacles in the way to success.


‘More Expansion/Diversification May Lead to Chaos as managing a large diversified workforce through one unique method is a tough task’

Up till now Bank One has been operating its commercial line of business in fourteen states in four regions. These regions are the West, South, Midwest, and East. Bank One can further expand their line of business in other states of U.S.A. It is a good plan for those people who perform better but not much successful for those people who are from another different culture.

On the other hand, if within the organization some people are lazy by nature because of their life-style in a different locality, they may cause interruption in achieving the objective on time. Then again, Bank One has 2000 branches in 14 different states, which is very difficult to lead a huge diversified workforce in different states in a unified approach. To manage a large diversified workforce through one unique method is not an easy task. This situation can create a severe mess in the corporation.

‘Bank One might face difficulties in dealing with the downsizing factor as several mergers and acquisitions took place among the other State banks’

To turn around the bank in a good shape from badly managed and poorly organized bank, Dimon eliminated about 8000 jobs. As a result, a large number of people became out of work. The Corporation not only terminated the employees but also made their family in trouble. If the bank does not compensate them well then those employees may bring the bank to court, which may cause huge problem. It may affect the bank’s reputation also. If the bank just simply lay off their employees without any payment, which is against the employment law, the court may give the order to shut off the business for rest of the life.

‘Frequent changes in the bank’s products and services can hamper customer service quality’

Bank One changes its products and services frequently. This product and service are very interrelated as one helps to foster other to the customers. Adaptation to this changing environment by a Service consultant imposes restrains. The technological and teamwork knowledge changes every time and consultants start from Scratch. This changing nature not only makes the consultants stressed to work but also every time makes a new approach to an existing customer. All this changes the Bank’s image.

‘The risk of all the expensive practices not working in real life’


Mr. Dimon surely acted very swiftly to come out of the crisis with a strategy called “do the right things”. It involved a lot of expense, starting from making new rules and regulations, implementing those, hiring new employees, giving training to employees, restitution to shareholders and so on. All this were taking a toll on the company. If by any chance all these don’t work to impress the investors, the company will surely be in trouble. Thus, the company has although taken up a strategy which surely looks like that it would work, however nothing is 100% guaranteed. So the risks remain for these efforts to backfire.

‘Bank One is most likely to face problem in terms of managing and controlling the large diverse workforce’

Bank One has 74,000 employees at 2000 branches in 14 states. Therefore, Bank One has to deal with diversified workforce. Though all the branches of Bank One are located in USA, the people vary from state to state because of the culture, ethnical value, geographical reason, life-style etc. Each people are different from others because of their sex, age, religion, locality, life-style, principles, religious and many other objects.

To maintain good relationship with employees it is very important to encourage the employees of the organization to be motivated toward customer service. If within the team some people are lazy by nature because of their life-style in a different locality, they may cause interruption in achieving the objective on time. Then again, Bank One has 2000 branches in 14 different states, which is very difficult to lead a huge diversified workforce in different states in a unified approach. To manage a large diversified workforce through one unique method is not an easy task. This situation can create a severe mess in the corporation.

‘Because of providing too much access and authority to the employees, Human Resource Department of Bank One may lose control over them’

To do good business it is important to give necessary authority and power to the employees that they can solve the problem instantly by their own. Moreover, when the company is serviced based it is obvious that employee require some delegation of authority. The management of Bank One centralized its operation and sought to give people in the field more authority and responsibility to perform better. It means employees will get the authority to take any decision and to make any changes regarding their job but they have to inform the central location means headquarter in Chicago.

Because of this type of delegation of authority, management may loose control over the employees. However, the customer service operation and other activities of the Bank One may run smoothly but the employees may be involved in some kind of unethical activities like stealing money from


customers account, cashing less money than the customer has asked etc. Delegation of authority and responsibility to employees need to allocate to some extent. Too much of delegation of authority is bad for any organization.

‘Bank One had a poorly managed organizational system’

Jamie Dimon was asked by the board of Bank One to take over as CEO in 2000. He received a badly managed, poorly organized bank. The reason behind it was, Bank One is the product of several mergers and acquisitions, and while doing this previous CEO’s let the local manager stay on and continue running the bank at the way they were doing in the past. That is why; different branches follow different strategies of their own, which create clutter in the whole organization.

Dimon wanted to give the company a new and strong shape. He eliminated about 8000 jobs in the first year, cutting the workforce to 75,800. He also scaled back an auto-leasing unit. Then he closed the Wingspan, which was the first online bank launched previously. After that, Dimon replaced twelve of the top thirteen executive managers at the bank. In other words, we can say that, Dimon was trying to build an efficient workforce, which can work efficiently under his leadership.


SWOT ANALYSIS (NARROW VERSION)

STRENGTH

Bank One may face difficulties to deal with the downsizing because of a lot of merger with different companiesModern computer technology & service excellence e-cards at Bank OneIn Bank one active employee participation is promotedThey remained committed to a dedicated & strong customer service, which always strived to stay competitive

WEAKNESS

Bank one lacks a proactive recruiting system which can affect and discourage its employees to a greater extent

Bank One may face difficulties to deal with the downsizing because of a lot of merger with different companies

OPPORTUNITY

Bank One can practice true commitment to the reallocation of power in order to promote service consultants’ involvement and empowerment which in return helps them to retain employees with the organization

In several U.S. markets, Bank One has the potentiality for constant growth which will help to increase its operation effectively

THREAT

Difference of opinions in Customer Care Services sometimes force the customers to depart the bankincreased the interest rates from 4.5% to 19.9% in the credit card section


Human Resource IssuesThe HR department is the most essential department for any organization. The human resources (i.e. employees) are the key elements of any organization for any success that any organization desires to achieve. This is why if any organization is to function properly and look for the efficiency at the highest level, there is no alternative of establishing the HR department. Moreover, it is the responsibility of the human resource department to best utilize the human resources of the company to the maximum.

Lack of an active HR department at Bank One

Although Bank One is the sixth largest bank holding company in the United States it is necessary that it has Human Resource Department. However, the HR department is not well ordered to manage the diversified workforce of this company.

This international bank needs to have a properly designed and well functioning Human Resource department to recruit the right people for the


right position, to make the employees work in that way so that they can contribute in achieving the corporate strategy of the company. Above all a proper HR department is needed to prepare a well-designed Human Resource Planning for the company.

Additionally, Human Resource Planning provides the basis for establishing and maintaining effective HR programs and for coordinating the various HRM functions. In order to develop a well-structured HRP the company needs a well functioning HR department in its head office. Moreover, Bank One needs to have HR units in its every branch. Without a proper HR department, it is very difficult to allocate skilled employees and manage them properly.

Deficiency of adequate communication of employees with the customers

Jamie Dimon, who took over as Bank One’s CEO in 2000, faced many complaints and questions regarding the customer services of Bank One within seven weeks of his tenure. The lack of communication among the employee at the Bank One is one of the most important HR issues. So it is typical to speculate that in order to prevent that ‘grapevine’ among employees there is a need of proper communication to start with. Furthermore this HR issue should be given more importance to the fact that it may hamper the course of the investigation. That would be hazardous for the organization. The bank also feared from the fact that they are losing money to less profitable customers in a way that is more than the customer is earning for the bank. This is one of the reasons the bank provided far less customer services, such as telephone priorities, only to top profitable customers.

No training and development programs for the employees

Bank One does not have any training and development program for their employees to train them how best to perform their duties and responsibilities in Bank One. That is why in early 2000 the bank had to go through the customer service problems as well as financial crisis.

Jamie Dimon identified four immediate priorities for the bank at the time he joined Bank One. They are: customer service, system conversions, financial discipline and building the efficient management teams. To perform these actions brilliantly some crucial characteristics were required; such as effort, technical skill, teamwork and many other factors, which objects can only be learnt through proper training process. For the customer service department, employees need training program to identify how to deal with the customers and solve their problems-which is missing from Bank One Corp. Training for


both improving the employees’ performance and managing diversified workforce are absent from Bank One.

Bank One is most likely to face problem in terms of managing and controlling the large diverse workforce

Bank One has 74,000 employees at 2000 branches in 14 states. Therefore, Bank One has to deal with diversified workforce. Though all the branches of Bank One are located in USA, the people vary from state to state because of the culture, ethnical value, geographical grounds, life-style etc. Each people (both employees and customers) are different from others because of their sex, age, religion, locality, life-style, principles, religious and many other principles.

To maintain good relationship with employees it is very important to encourage the employees of the organization to be motivated toward customer service. If within the team some people are lazy by nature because of their life-style in a different locality, they may cause interruption in achieving the objective on time. Then again, Bank One has 2000 branches in 14 different states, which is very difficult to lead a huge diversified workforce in different states in a unified approach. To manage a large diversified workforce through one unique method is not an easy task. This situation can create a severe mess in the corporation.

Bank One had a poorly managed organizational system

Jamie Dimon was asked by the board of Bank One to take over as CEO in 2000. He received a badly managed, poorly organized bank. The reason behind it was, Bank One is the product of several mergers and acquisitions, and while doing this previous CEOs let the local manager stay on and continue running the bank at the way they were doing in the past. That is why; different branches follow different strategies of their own, which create mess in the whole organization.

Dimon wanted to give the company a newer and stronger shape. He eliminated about 8000 jobs in the first year, cutting the workforce to 75,800. He also scaled back an auto-leasing unit. Then he closed the Wingspan, which was the first online bank launched previously. After that, Dimon replaced twelve of the top thirteen executive managers at the bank. In other


words, we can say that, Dimon was trying to build an efficient workforce, which can work efficiently under his leadership.

The recruitment and selection process at bank one lacks strategic focus

Bank One Corporation acquired as well as merged with many companies. Since Bank One is the sixth largest Bank in USA; job seekers will always intent to entire in the Corporation and to become a part of the workforce. However, the problem is, John McCoy, who became the CEO of Bank One in 1984, used to keep the local managers of the acquired or merged banks to continue the banking operation in the way they had before.

Thus, though the market for Bank One became large but the need for employees did not improve. Even if they became a large corporation, they did not create any new positions for the job seekers. Bank One recruits either from the reference of higher authority or the applicants’ desires to do the job.

Bank One does not have any standard recruiting process to hire new qualified people from different states. Without an outstanding recruitment system, it will be difficult for Bank One to recruit qualified people and to run the business in near future as the corporation is getting bigger by the day and it is expanding their business from one state to another. The firm needs to emphasize on the other factors of recruiting; such as educational background, criminal record, physical test, ability etc. Bank One does not have any standard recruiting process to hire new qualified people from different states. Without a magnificent recruitment system, it will be difficult for Bank One to get eligible people and to run the business in near future as the corporation is getting bigger day by day and it is expanding their business from one state to another.


RECOMMENDATIONS

After analysis of the case from various perspectives, it is now time to recommend activities that will support the efforts of quality enhancement of customer service at Bank One. With a specific focus on Human Resource related issues for this report, here, the implications of human resource management about compensation tools and techniques are discussed with more emphasis. However, along with recommendations for additional compensation tools, the intended compensation and reward plans that Bank One authority already planned to initiate is also covered within the plan. In such cases, recommendations are made to enhance their effectiveness.


LACK OF TQM CULTURE IN ALL ASPECTS OF COMMERCIAL CUSTOMER SERVICE AT BANK ONE

Problem

In this modern era of business world, organizational culture is a very important prerequisite of success of any organization which was not the reality in Bank One. Moreover, TQM (Total Quality Management) itself has to work as a part of the organizational culture to be effective.

Recommendation

Therefore, it is suggested that the organizational culture at Bank One should revolve around quality service that will lead to ultimate customer satisfaction. It is true, that cultures do not develop immediately. However, necessary steps


are to be taken as soon as possible to inculcate and encourage the TQM oriented cultural practices.

Justification

The quality culture will help Bank One in various ways. It will help to increase the morale of the employees and give them a strong feeling of belongingness, which will thereby in course of time become their collective identity. It is strongly believed that this, in turn, will encourage employees to put forth higher commitment to the quality of their work and due attachment to the company. In addition, the cultural bonding will tie the employees together. It will lead them to hold more attentive attitude towards their quality of work of their co-workers. Thus, a collective accountability can be established. Again, a culture of openness and proper communication will accelerate the free flow of information, knowledge and experience. In addition, handing over of authority and decentralization should work up to their highest degree.

THERE IS NO SPECIFIC MENTION OF ANY HR DEPARTMENT AND ITS NOTEWORTHY ROLE IN BANK ONE, AS THEY FACE ONE OF THEIR BIGGEST LEGAL CHALLENGES.

Problem

Human Resource Departments are the heart of an organization. So not having a proper HR department is a serious threat. The Bank One does not have any separate HR department for which it does not follow any specific rules to recruit, select, compensate or train their employees. They hire those employees who are able to quickly adopt their corporate culture and commitment to serve their customer with maintaining the same quality, and as


a result of this those employees are engaging in unethical activities. Thus the good reputation of Bank One is corrupting. They may train them in multi skills needed to serve their customers effectively but they don’t train them to uphold the image of Bank One by maintaining company code of conduct. There is no specific T&D plan in Bank One’s case. Moreover, training is not given to the existing employees. Without a guideline no business can be run successfully for longer period of time. Though they have survived a mutual fund issue, they may not survive the second issue because of less trained employees. They need to be more tactful to be the leader in the banking industry throughout the world as the age is being competitive day by day.

Recommendation

Bank One needs a separate HR Department, which will control the processes such as recruitment, selection, employees attitude and behavior, T&D (training and development), Compensation policy and employee-employer relationships, legal aspects of employee behavior etc., which are vital to the company success in the long run.

The Bank One is one of the largest financial services company around the world. But in this competitive age, to sustain in the market with the same position it must have to adopt new strategy. Here Human Resources play a key role in helping companies deal with a fast-changing competitive environment and the greater demand for quality employees. Though without any effective HR department they are operating their business successfully, if they open this department their performance efficiency would increase positively.

RECRUITMENT & SELECTION PROCESS

Under the control of the HR department Bank One, a Recruitment and Selection Committee should be created consisting of some experienced people as well as professional HR managers or line managers who will maintain the whole process. They have to have a written criterion following which the recruitment committee members will hire the new employees so that they can identify the right person for their company. But the final decisions should be taken by the Executive managers of HR department where the experienced people will be in those positions, because they are the people who can better choose the right person as their service provider.

TRAINING & DEVELOPMENT PROCESS

Bank One should provide training to its new as well as its existing employees according to the employees’ knowledge level. But there would be also some


proper planning for train them effectively so that their efficiency in service providing increases more. At first the company has to hire a trainer who will be recruited and trained firstly by the experienced managers, who are currently involved with Bank One and free from the mutual fund issue. After giving the trainers proper training, a proper T&D plan would be made. So in this way employees will be trained effectively in a systematic way and from the right trainers.

Justification

Employees and employee relationship with the organization’s employers and as well as customer is the most important aspect, otherwise known as human resource management in a nutshell. Without it, an organization is like helpless in a sea because every part of an organization is interrelated with HR. Appropriate human resources assure an organization that the right number and kind of people are available at the right time and place so that organizational needs can be met. But Bank One does not have any separate HR department for which it does not follow any specific rules to recruit, select, compensate or train their employees. So it is the best solution for them to run their business in a systematic way.


TECHNOLOGY SHOULD BE UPGRADED TO PROVIDE THE BEST SUPPORT TO CUSTOMERS

Problem

The technology used by Bank one was way too diversified. Every bank branches in different regions that were previously owned by other entity had a different data base system. Different banks used different kinds of computers, data storage, mainframe etc which made it difficult for Bank One to merge all of them to form singular unit storage of data and information for easy use of its manipulation.

Recommendation

Bank One requires technology that is specific to customer service. They can execute front-end system, which will help them to access information of any customer without go through the different program applications of different branches. This way the time consumed by the system can be saved and allocated to elsewhere necessary.

Justification

The newly developed technologies about this segment should be adopted by the bank. The bank should provide the technology to the service consultants the ability to do the call tracking which would allow them to see the overall information of a particular customer and how many times the customer had called up the consultants. The bank can improve the customer service by adopting the new technology, which will help the consultants in doing their job.


THE ABSENCE OF EFFECTIVE AND AN EFFICIENT PERFORMANCE APPRAISAL SYSTEM

Problem

Absence of effective and efficient performance measurement lead the employee to feel de-motivated which in return might hinder the overall performance of Bank One.

Recommendation

Performance appraisal must be precise and well enough designed in order to motivate the employees with higher efficiency for their better performance. Performance assessment should be built in such way so that it can give both the employees and the organization the highest benefit.

Justification

If the performance appraisal is clear and strong enough to motivate the employees, the employees will have higher motivation to improve their skills and performance. As a result the organization will be benefited as well. Performance appraisal is the core efficient method to motivate the employees in their work. When the employees are appraised for their performance, other employees also get the head start to achieve better quality performances.


IMPLEMENTATION

In early 2000, Bank One is facing a lot of difficulties with customer service and their financial problems. They also faced losses worth $511 million, which changed Bank One’s leadership to Mr. Jamie Dimon, former President of Citigroup Inc. Things started to change under the guiildance of Mr. Dimon, however, after reading the case, it was observed that, Bank One has a lot of problems which are discussed in the HR issues. Also, recommendations to those problems are given above. Now, implementation to those recommended solution are discussed below:


LACK OF TQM CULTURE IN ALL ASPECTS OF COMMERCIAL CUSTOMER SERVICE AT BANK ONE

Problem

In this modern era of business world, organizational culture is a very important prerequisite of success of any organization, which was not the reality in Bank One. Moreover, TQM (Total Quality Management) itself has to work as a part of the organizational culture to be effective.

Recommendation

It is suggested that the organizational culture at Bank One should revolve quality service that will lead to ultimate customer satisfaction. It is true, that cultures do not develop immediately. However, necessary steps need to be taken as soon as possible to inculcate and encourage the TQM oriented cultural practices.

The “quality‟ culture will help Bank One in various ways. It will help to increase the morale of the employees and give them a strong feeling of belongingness, which will then become their collective identity. It is believed that, this, in turn, will encourage employees to put higher commitment to the quality of their work and attachment to the company. In addition, the cultural bonding will tie the employees’ together, also, it will lead them to hold more attentive attitude towards their quality of work of their co-workers. Thus, a collective accountability for the organization can be established.

How the solution be implemented?

The main concern of the shareholders’ of Bank One is about quality customer service. To achive this goal, Mr. Dimon, the CEO of Bank One has to take a lots of initiative like empowerment of customer service consultants, make them feel important. Also, grant those service employees as professionals whose main target is to perform well and serve the 60 million customers of Bank one with appropriate answers to all their enquiries.

The other forms of Total Quality Management issues of Bank One need to be evaluated with the regular or periodic meeting of the top management. Those


assessment, then can be fulfilled by middle-level and lower level management.

Who will implement?

The top management that means all the managers and other high officials has to aware about TQM. Under the supervision of CEO, they can resolve the situation and create TQM culture in all aspects of commercial customer service at Bank One.

When the recommended solution be implemented?

The process will start immediately.

Where the solution be implemented?

Implementation takes place in the customer service department first. Because they are the one who has direct contact with the clients.


THERE IS NO SPECIFIC MENTION OF ANY HUMAN RESOURCE DEPARTMENT AND ITS SIGNIFICANT ROLE IN BANK ONE

Problem

Human Resource Departments are the heart of an organization. So, company without proper HR department is a serious threat. The Bank One does not have any separate HR department, so, it does not follow any specific rules to recruit, select, compensate or train their employees. They hire those employees who are unable to adopt their corporate culture and commitment to serve their customer with maintaining the same quality, therefore, those employees are engaging in unethical activities. Thus, the good reputation of Bank One gets manipulated. They may train them in multi skills needed to serve their customers effectively but they do not train them to uphold the image of Bank One by maintaining company code of conduct. There is no specific Training and Development plan in Bank One’s case. Moreover, training is unable to the existing employees. Without a guideline, no business can run successfully for longer period. They need to be more tactful to be the leader in the banking industry throughout the world as the age is being competitive day by day.

Recommendation

Bank One needs a separate HR Department, which will control the processes such as recruitment, selection, employees attitude and behavior, T&D (training and development), Compensation policy and employee-employer relationships, legal aspects of employee behavior etc., which are vital to the company success in the long run.

The Bank One is one of the largest financial services company around the world. But in this competitive age, to sustain in the market with the same position it must have to adopt new strategy. Here Human Resources play a


key role in helping companies deal with a fast-changing competitive environment and the greater demand for quality employees. Though without any effective HR department they are operating their business successfully, if they open this department their performance efficiency would increase positively.

How to implement the solution

RECRUITMENT & SELECTION PROCESS

First, Bank One should create a potential HR department. Under the control of the HR department Bank One, a Recruitment and Selection Committee should be created consisting of some experienced people as well as professional HR managers or line managers who will maintain the whole process. They have to have a written criterion following which the recruitment committee members will hire the new employees so that they can identify the right person for their company. However, the Executive managers of HR department should take the final decisions

TRAINING & DEVELOPMENT PROCESS

Bank One should provide training to its new as well as its existing employees according to the employees’ knowledge level. Therefore, there would be also some proper planning for train them effectively so that their efficiency in service providing increases more. At first, the company has to hire a trainer who will be recruited and mentored firstly by the experienced managers, who are currently involved with Bank One .After giving the trainers proper information about the bank, a proper T&D plan would be made with the help of both the trainer and the top HR managers. So in this way employees will be trained effectively in a systematic way and from the right trainers.

Who will implement?


The current CEO Jamie Dimon will implement these plans. In addition, after designating the newly hired HR people in the right position in the department, then, they would recruit other HR managers by using the Recruitment & Selection Committee. After that, the committee will hire some trainers from outside who has or will have the keen knowledge about Bank One to train their existing and new employees and also to create a proper T&D plan for the company.


The process need to take place immediately.


The HR department will be established in all the operations of Bank One.

TECHNOLOGY SHOULD BE UPGRADED TO PROVIDE THE BEST SUPPORT TO CUSTOMERS

Problem

The technology used by Bank One was way too diversified. Every branch of Bank One in different regions that were previously owned by other entity had a different data base system. Different banks used different kinds of computers, data storage, mainframe which made it difficult for Bank One to merge all of them to form singular unit storage of data and information for easy use and increased efficiency.

Recommendation

Bank One requires technology that is specific to customer service. They can execute front-end system, which will help them to access information of any customer without go through the different program applications of different branches. This way the time consumed by the system can be saved.

How will implement?

It has to be done, gradually. First, a integration system has to develop to communicate between different system from mergers with regional banks. Then, convert those different systems into a platform where all the system will be united to be one.


Also, new technologies can be used to provide better customer service, customer service consultants can be allowed to do call tracking, when a customer calls in customer care of Bank One, then the executives can track about his/her past problems, how the problem was solved and how often he/she calls in the customer care. In this way, it is obvious that customers will a better service from commercial customer service consultants.

Who will implement?

The management can hire external software engineer to develop a unified system. It is vital to make the bank more efficient.


This is a long-term process. This process should be initiated as early as possible.


The central database of Bank One is the best place to start the process where all the information of Bank One and its merged companies are kept.


THE ABSENCE OF EFFECTIVE AND AN EFFICIENT PERFORMANCE APPRAISAL

Problem

Absence of effective and efficient performance measurement lead the employee to feel de-motivated which in return might hinder the overall performance of Bank One.

Recommendation

Performance appraisal must be precise and well enough designed in order to motivate the employees with higher efficiency for their better performance. Performance assessment should be built in such way, so that, it can give both the employees and the organization the highest benefit.

How the solution be implemented?

As the main focus of the newly developed compensation standards are on performance, it is recommended that the performance indices should be tied to customer account based contribution, teamwork capability and timely achievement of given objectives. To achieve better performance from Bank one employees’, the management can use different ways of determining employees’ performance like management by objectives, 360-degree appraisal feedback, and many more.


Who will implement?

The current CEO Jamie Dimon will implement these appraisal method.


If Bank One has to be competitive in the market, then performance appraisal system need to be initiated as soon as possible.


The new performance appraisal systems will be established in all the operations of Bank one.

PERFORMANCE APPRAISAL METHODS

Management by objectives

(MBO)

360 degree appraisal

Behavioral Observation Scale (BOS)

Behaviorally Anchored

Rating Scale (BARS)

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