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ACKNOWLEDGEMENTOur first and foremost gratitude to ALLAH the Almighty for keeping us motivated throughout thisendeavor.We would like to thank Ms. Sobia Shujhat, for helping us out in academic matters. Wewould also like to thank Mr. Saif Quraishi [Human Resources, HR- Business Partner], he

provided with valuable information that was required to create this report. This experience not only enhanced our skills, but also provided us the exposure to the practical aspect of our knowledge & added more information to our knowledge.EXECUTIVE SUMMARY

It is a challenge for every organizations HR department to choose right people for the right job,appraise, compensate and give proper feedback to its employees and train and teach themadvanced techniques in order for them to create a competitive edge in the industry by serving theorganizations customers well in short motivate employees to a certain point that they give their best in the organization.The organization that we have selected is The Royal Bank of Scotland Pakistan. It is amultinational bank having its branches and offices in many parts of the world. RBS humanresource department gives tough competition to its rivals (HR department of other organizations)as it recruits, appraises and trains its employees properly.This report points out the factors why RBSs HR Department is effective in motivating their employees and how they have given a tough competition to its opponents.Nothing great was ever achieved without enthusiasm.-Ralph Waldo Emerson

Methodology:The information related to the project has been collected from the ROYAL BANK OF SCOTLAND, Karachi Branch . The methodology adopted is as follows:

1) Collection of data by conducting interviews of officials of the Bank 2) Frequent visits3) Internet Search4) Study of Banks annual reports

A comprehensive study of the literature has been carried out the see the factors that help inachieving a competitive advantage in a dynamic banking environment.Scope of Study:

As we know services are a growing industry of Pakistan and many firms are striving to deliver value added services to the customers. In this regard banks are continuously focusing towards

improving their services. Similar is the case with Royal Bank of Scotland. This Bank has evolvedtremendously during the last couple of years and now has become one of the leading banks inPakistan. Keeping this in view the study has been undertaken to identify the strategies and plansof the Bank and to identify the methods adopted by the Bank to train and motivate their peopleand work force.INTRODUCTION TO ORGANIZATION

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The Royal Bank of Scotland Our focus is on building stand alone strengthRBS will ach ieve t h is wit h integrity, transparen cy, and by serving t heir cust om ers well.

HISTORY

Early Scottish success The Royal Bank of Sco tland was founded in 1727. Originally opened wit h a sta ff of just eig h t, its f irst pre m ises were in t he Old Town of Edinburg h . For mo re t han half acentury, RB S traded s o lely f rom the Sco ttis h capital, but in 1783 it opened f irst bran ch in t hef ast-gr owing trading city of Glasgow. Th is new off ice was s oo n co ndu cting over half of the Bank'sentire business. Spurred on by t h is su ccess, m any mo re bran ch es opened a cross Sco tland andthen, in 1874, t heir f irst off ice opened in L ond on.

Domestic and overseas growthIn t he twentiet h century RB S expanded rapidly, a cq uiring several Englis h banks in cludingWilliam s Dea co n's Bank, Glyn, Mills & C o and Dru mmo nds Bank. In t he 1950s t heir mo bile banksbegan serving rural comm unities, and by 1960 t heir f irst off ice opened in New Y ork. In 1969their m erged wit h Nati onal Comm er cial Bank of Sco tland t o ach ieve a greater m arket s hare inSco tland. RB S also intr odu ced t he daisy w heel brand m ark w h ich re m ains s o central t o theirco rp orate identity.Technology and diversificationIn t he 1970s t hey e m bra ced com puterisati on and intr odu ced a new generati on of m ulti- f un ctioncas h dispensers. In t he 1980s t hey laun ch ed Dire ct Line mo to r insuran ce and b ough t CitizensFinan cial Group in t he USA. By the 1990s t hey were at t he fo re f ront of telep ho ne and internetbanking.Takeovers and acquisitions In 2000, t hey a cq uired Nati onal West m inster Bank in t he biggest

banking take over ever in Britain and s o inherited a ri ch heritage co vering mo re t han 200 banksthat had m ade up NatWest. In 2005 t hey fo rm ed a strategi c partners h ip wit h Bank of Ch ina and,tw o years later, in t he biggest take over in banking h istory, t hey led a uni que co ns ortiu m to acq uire t he Dut ch bank ABN AMRO committed to working together. However w hen t heStandard C hartered Bank , pr oposed a m erger wit h the Royal Bank in 1980, t he b oard of m anage m ent resp onded f avo rably t o the off er. Standard C hartered Bank was head quartered inLond on, alt ho ugh mo st of its operati ons were in t he Far East, and t he Royal Bank sawadvantages in creating a truly internati onal banking gr oup. Appr oval was re ceived f rom the Bankof England , and t he tw o banks agreed a m erger plan t hat w ould see t he Standard C harteredacq uire t he Royal Bank and keep t he UK operati ons based in Edinburg h . However t he bid wasscam pered by t he Honking and Shang hai Banking C orpo rati on (HSBC) wh ich tabled a rival off erWit h th ree centuries of banking be h ind t hem , they re m ain comm itted t o m aking it happenfo r t heir cust om ers, s hare ho lders and sta ff ar ound t he w orld.The Royal Bank of Sco tland in o ther regi onsThe Royal Bank of Sco tland Gr oup has gr own f rom sm all beginnings nearly 300 years ag o to be com e t he se co nd largest f inan cial servi ces gr oup by pr of it, in t he w o rld. Wit h an AA creditrating, RB S group has mo re t han 40 m illion cust om ers w orldwide, operating pr of it in 2007

10.3 billi on, and t o tal assets, as at 31 De cem ber 2007, of GBP 1,900.5 billi on. Their brands

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operate ar ound t he globe and d own y our street t o pr ovide banking servi ces fo r individuals,businesses and instituti ons. Pr oud of our h istory, we re m ain comm itted t o inn ovati on andservi ce - in business and t hrough our m any sp ons orsh ip a ctivities.As ia Pacific The Royal Bank of Sco tland Gr oup is n ow one of the t op f ive banks in t he Asia Pa cif ic regi on

fo r co rp orate and instituti onal cust om ers, and retains a strategi c partners h ip wit h Bank of Ch ina. We als o pr ovide wealt h m anage m ent servi ces a cross t he regi on t hrough RBS Coutts.Europe As well as having t he largest bran ch netw ork in t he UK and pr oviding m arket-leading wealt h m anage m ent, co nsu m er f inan ce, insuran ce and co rpo rate banking s o luti ons t o m illions of cust om ers, t he RBS Group has a gr owing presen ce a cross t he rest of Europe.North A merica The Royal Bank of Sco tland Gr oup is n ow one of the t op 10 banking gr oups in t he US, and anestablis hed na m e a cross Nort h Am erica. Citizens Bank has retail bran ch es in 13 states, w h ileRBS GloRBS Banking & Markets w orks wit h 80 per cent of the Fortune 100 com panies.The Royal Bank of Sco tland Pakistan

RBS Pakistan off ers pr odu cts in areas like Dep osits, Saving and currents a cco unts, cas h andch eque dep osits, and l oan f acilities. N o t only t h is, but it is als o off ering pr odu cts as: Balan ceTrans f er Fa cility (BTF) wh ich in banking ter m ino logy is One Stop Pay m ent Sho p, 24 ho ur n onst opbanking centre, relati ons h ip card t h rough wh ich cust om er can a ccess t o over 1000 ATMs, li f einsuran ce pr o te ction, E state m ents t hrough wh ich you can re ceive y our BTF via e m ail, Drop b oxf acility- t he co nvenien ce of dropping of your pay m ents at any of the dr op b oxes pla ced outsideRBS, Pakistan State Oil (P SO) and Shell.RBS Vision

Contributing to profit generating by reducing the amount of time employees spend on trainingactivities and enabling employees to spend more time on revenue generating activities. (The

Royal Bank of Scotland, 2008)

RBS Mission

To create maximum economic value for our shareholders through a constantrelationship focus on the financial services needs of our chosen clients segment anda strict adherence to our financial target. (The Royal Bank of Scotland, 2008) RBS Values

Customer Focus

Relentless focus on understanding and fulfilling customer needs through superior service.

Inn ovatio n

Continually generate, validate and implement creative solutions to business challenges

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In tegrity

Uncompromising financial and intellectual honesty to the organization and oneself with

relationships based on mutual trust and openness.

T eam-work

W illingness to share the glory of achievements as well as responsibility for failure

INTRODUCTION TO TOPIC MOTIVATION

Objective of report:To determine how the companies are motivating their people, what are the motivation Factorsamong the employees and what factors are being provided by MNCs and Domestic companies?

MOTIVATION:M otivation is an inner drive resulting in doing a job. The inner drive is affected by various humanneeds. Need also includes psychological or physiological desires.

Motivation is the willingness to do something and is conditioned by this actions ability to

satisfy some need for individual.

Stephe n P.Robbi n

Motivation = Valance X Expectancy

Key Elem ents of Mo tivati on

The t hree key ele m ents in M o tivati on are:

1) Effort : Effo rt is t he m easure of intensity or drive. A mo tivated pers on tries hard. T here forewe m ust co nsider t he quality of the e ffo rt as well as its intensity.2) Goal s : Are t he dire ction t oward e ffo rts are ch anneled. T hey are a kind of e ffo rt t hat t heem ployees m ust be seeking.3) Need s : Need is an internal state t hat m akes certain out com es appear attra ctive. Anindividual s need m ust be com patible wit h the o rganizati on s goals.

MOTIVATIONAL THEORIES

There are di ff erent mo tivati onal t heories in Manage ment. T hese t heories can be divided int o tw o

diff erent se ctions

1) Early t heories of Mo tivati on.2) Conte m porary t heo ries of Mo tivati on.

Early t heories of Mo tivati on

Masl ow s Hierarch y of needs t heo ry

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The best kn own t heo ry of mo tivati on is pr obably Abra ham Masl ow s Hierarchy of needs t heory. Masl owwas a psy cho logist w ho pr oposed t hat wit h in every pers on is a h ierar chy of f ive needs. Abra ham Masl owpr oposed it in h is 1943 in h is paper A Theory of Human Motivation . Masl ow subse quently extended t heidea t o include h is observati ons of hum ans' innate curi osity. His t heories parallel m any o ther t heo ries of hum an Devel opm ental psy cho logy, all of wh ich foc us on des cribing t he stages of growt h in hum ans.

Masl ow's t heo ry was f ully expressed in h is 1954 b oo k Motivation and Personality The lower four layers of the pyra m id contain w hat Masl ow called "de f icien cy needs" o r "d-needs": p hysio logical (in cludingsexuality), se curity of position, f riends h ip and l ove, and estee m . Wit h the ex cepti on of the lowest(physio logical) needs, i f these "de f icien cy needs" are n o t m et, t he b ody gives no physical indi cati on butthe individual f eels anxi ous and tense.

McGreg or t heory X and t heo ry Y:T heory X and Theory Y are t heo ries of hum an mo tivati on created and devel oped by D ouglas M cGreg or atthe MIT Sloan Schoo l of Manage m ent in t he 1960s t hat have been used in hum an res our ce m anage m ent,o rganizati onal be havior, organizati onal comm uni cati on and devel opm ent F o r McGreg o r, Theo ry X and Y

are n o t di ff erent ends of the sa m e co ntinuu m . Rat her t hey are tw o diff erent co ntinua in t hem selves.Thus, i f a m anager needs t o apply T heo ry Y principles, t hat d oes n o t pre clude h im f rom being a part of Theory X & Y.

THEORY X:In th is theo ry, w h ich has been pr oven counter-e ff ective in mo st mo dern pra ctice, m anage m ent assu m esem ployees are in herently lazy and will av oid w ork if they can and t hat t hey in herently dislike w o rk.

THEORY Y:In th is theo ry, m anage m ent assu m es e m ployees may be am biti ous and sel f -mo tivated and exer cise sel f -contr o l. It is believed t hat e m ployees enj oy their m ental and p hysical w o rk duties. A cco rding t o Papa, t o

them work is as natural as play.

Herzberg s hygiene mo tivati on t heo ryH erzberg' s motivation-hygiene theory states t hat t here are certain f acto rs in t he w o rkpla ce t hat cause job satis f action, w h ile a separate set of f actors cause dissatis f action. It was devel oped by Frederi ckHerzberg, a psy cho logist, w ho theorized t hat j ob satis f action and j ob dissatis f action a ct independently of ea ch o ther. A cco rding t o Herzberg, individuals are n o t content wit h the satis f action of lower- o rder needsat w ork; rat her, individuals l oo k fo r t he grati f icati on of h igher-level psy cho logical needs having t o do wit h ach ieve m ent, re cogniti on, resp onsibility, advan cem ent, and t he nature of the w ork itsel f . Hygiene

mo tivati on t heory distinguishes between:

Mo tivat o rs:(e.g., challenging work, recognition, responsibility) that give positive satisfaction, arising from

intrinsic conditions of the job itself, such as recognition, achievement, or personal growth.Hygiene f actors:

(E.g. status, job security, salary and fringe benefits) that do not give positive satisfaction, thoughdissatisfaction results from their absence. These are extrinsic to the work itself, and includeaspects such as company policies, supervisory practices, or wages/salary.

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He publis hed h is f indings in t he 1959 b oo k The M o tivati on t o Wo rk. Herzberg reas oned t hat be cause t hef acto rs causing satis f action are di ff erent f rom tho se causing dissatis f action, t he tw o f eelings cann o tsim ply be treated as opp osites of one an o ther. T he opp osite of satis f action is n o t dissatis f action, butrat her, n o satis f action. Sim ilarly, t he opp osite of dissatis f action is n o dissatis f action.

Conte m porary M o tivati on TheoriesThere are six di ff erent t heories under C onte m po rary t heory w h ich areTh ree needs t heory:

David M cClelland and o thers have pr oposed t he t hree needs t heory, w h ich says t here are t h ree a cquired(no t innate) needs t hat are m ajo r mo tivates in w o rk. These t hree needs in clude:

a) Need fo r Ach ieve m ent:

The drive t o excel, t o ach ieve in relati on t o set of standards, and t o strive t o su cceed.

b) Need fo r Po wer:

The need t o m ake o thers t o be have in a way t hat t hey w ould n o t have be haved o therwise.

c) Need of Aff iliatio n:

The desire fo r f riendly and close interpers onal relati onsh ips.

Goal Setting t heory:

Goal- s etting theory has be com e one of the mo st p opular t heo ries in o rganizati onal psy cho logy.

Goals can affect performance in three ways:a) Goals narrow attention and direct efforts to goal-relevant activities, and away from perceivedundesirable and goal-irrelevant actions .

b) Goals can lead to more effort; for example, if one typically produces 4 widgets an hour, andhas the goal of producing 6, one may work more intensely than one would otherwise in order toreach the goal.c) Goals influence persistence. One becomes more prone to work through setbacks or to work harder if pursuing a goal.

1) Reinfo rcem ent t heory:Reinforcement theory says that behavior is a function of its consequences. While goal-setting theory

proposes that an individuals purpose directs his or her behavior, reinforcement theory argues that behavior is externally caused. What controls behavior are: R ein forcers : Consequences that when given immediately following a behavior increase the

probability that the behavior will be repeated

Designing M o tivating J obs:Because m anagers are pri m arily interested in ho w t o mo tivate individuals on t he job, we need t o loo k

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ways ho w t o mo tivate e m ployees. T h is task in turn is aggregated int o jobs We use t he ter m jobs design t o re f er t o the way ho w task are com bined t o fo rm a job.There are tw o ways in w h ich m anagers can design mo tivating j obsJob enlarge ment:The ho rizontal expansi on of job by in creasing j ob sco pe.T he nu m ber of diff erent tasks re quired in a j ob

and t he f re quen cy wit h wh ich these tasks are repeated. T h is type of job design is called j ob enlarge m ent.

Job enri chm ent:

The verti cal expansi on of a job by adding planning and evaluating resp onsibilities. J obenri chm ent in creases j ob dept h , wh ich is the degree of co ntr o l em ployees have over t heir w ork.Equity Theory:Th is theo ry was pr oposed by J. Sta cey Ada m s, he said t hat e m ployees per ceive w hat t hey getf rom a job situati on (out com es) in relati on t o what t hey put int o it (inputs) and t hen com paretheir inputs- out com es rati o wit h the input- out com es rati o of relevant o thers. E quity t heorypr opose t hat e m ployee m igh t A ) Distort eit her t heir own o r o thers input or out com es B) Behave in s om e way t o indu ce o thers t o ch ange t heir inputs or out com es C) Behave in s om e way t o ch ange t heir own inputs o r out com es D) Choo se a di ff erent com paris on pers on, o r E) Q uit t heir job

Expe ctan cy theory:

The t heory t hat an individual tends t o act in a way based on t he expe ctati ons t hat t he a ct will be

fo llowed by a given out com e and on t he attra ctiveness of that out com e t o the individual. Itincludes t hree variables o r relati ons hips:

a) Expe ctan cy or e ffo rt per form an ce linkage is t he pr obability per ceived by t heindividual t hat exerting a given a mo unt of e ffo rt will lead t o a certain level of per fo rm an ce.

b) Instru m entality or per fo rm an ce reward linkage is t he degree t o wh ich the individualbelieves t hat per fo rm ing at a parti cular level is instru m ental in attaining t he desiredout com e.

c) Valen ce or attra ctiveness of reward is t he im portan ce t hat t he individual pla ces onthe p o tential out com es or reward t hat can a ch ieved on t he job.

Intr odu ction t o Hum an Res our ces Depart m entof Royal Bank of Sco tland Pakistan

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People are at the heart of our success

There is possibly no greater challenge in HR than recruiting, motivating, engaging, developingand rewarding so many people in a Group with so many brands. If you consider RBS growthrecord, this is only likely to increase. The size of the challenge is matched only by the success of

our approach. RBS act as internal consultants across the Group, creating and delivering business-specific solutions. RBS remit covers every issue involving staff recruitment, training,development, reward, career building, and change management. RBS need to understand thespecifics of each business and deliver solutions which are consistent across the Group yetsensitive to individual requirements. With a consultancy HR model well established, HR servicesare delivered to the business through Business Partners, project-based HR Consultants and arange of technical specialists.

Within RBS there are HR professionals working within the Group's Central Functions as well asaligned in the business. There are also specialist technical areas such as Remuneration andBenefits, Policy and Employment, HR Shared Services, Health, Safety and Wellbeing, Group

Resourcing and Group Organizational Effectiveness.Recruit m ent & Sele ction:

RECRUITMENT is the pr oc ess of generati on a p oo l of capable pe ople t o apply fo r e m ploym ent t o an organizati on. SELECTION is the pr oc ess by w h ich m anagers and o thers use spe cif ic instru m ents t o choo se f rom a p oo l of appli cants a pers on or pers ons mo st likely t o su cceed inthe job, given m anage m ent g oals and legal re quire m ents.

T he s tep to s tep Recruitment proce ss followed by organization i s :

y Planningy S ourcingy S creeningy Interviewingy H iringy Reporting y Planning

Recruit m ent & Sele ction at RB S Pakistan: RBS is interested in attracting and hiring the very best people in the market.

We understand the integral role you play in our continued success. We're committed to providingyou with a candidate experience that is robust, transparent and gives you the power to makechoices.A two way pr ocess RBS wants to make sure the hiring process works for everyone is the same.They provide candidates with all information and support they need to demonstrate their experience and capabilities and to help them make the right career decision .Their selectionexperience will vary based on the role they have applied for but will typically include thefollowing stages.

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Eff ective Re cruiting Recruitment is done through developing applicant pool. Employee recruitingmeans finding and and or attracting applicants for the employees open positions EffectiveRecruitingWhy re cruit m ent is i m portant: High performing staffs are essential if an organization is to deliver outstanding services to vulnerable people. Recruiting the right people is a key managerial role, yetone that agencies often do not devote enough time to. In financial terms, the average frontlineworker paid 18,000 represents an investment of around 65,000 over a three year period. If your organization was considering investing a similar sum in a new IT system, a great deal of thoughtand analysis would go into selecting the right system. Many organizations do not invest enoughtime in thinking about the skills, attributes and behaviors they need in their staff. This guide aimsto help service managers recruit the right staff and give them the best induction into their newrole.

Recruitment and selection has many processes and steps that must be followed.

y Decide w hat p ositions t o f ill, through per s onal planning and foreca s ting y Build a p oo l of candidates fo r t hese j obs, by recruiting internal o r external candidatesy Have candidates com plete application form and per haps underg o initial s creening interviewsy Use s election tool s like tests, ba ckground investigati ons, and p hysical exa m s t o identi f y viablecandidates.y Decide w ho to m ake an off er t o , by having t he supervis o r and per haps o thers interview thecandidates

Applicati on stage :Whether candidate applies directly through RBS careers website or through their staff referralscheme, they'll ask you for some background information - this usually involves completing an

application form or submitting a CV/resume. For some roles, candidate will need to complete anonline application form and then be directed straight through to an online assessment process. For other roles, once HR managers have reviewed your CV/resume and established there is a good fit

between your background and the 'essentials' they are looking for, the candidate will hear fromtheir recruitment team. The team will tell you what to expect next, share information about whatit's like to work here and answer any questions, the candidates might have.

For some roles, candidates may also have an initial phone interview. This helps HR managersassess candidates skills, background and experience so they can decide if they should invite youto the next stage of the hiring process. Phone interviews usually take about 30 to 40 minutes.

Interview stage

Interviews are usually conducted face-to-face in RBS offices with of recruiters or a line manager.The process and questions will vary based on the role you have applied for, but may explore:

y Candidates behavioural abilities (called 'competencies')y Candidates technical skills and background (based on qualifications and/or relevant work

experience)

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y Candidates reasons for wanting to work for them.

They'll make sure candidate is fully briefed on what to expect from the interview process andwhat they are looking for.

Furt her sele ction stages

The next stages will vary based on the role candidate has applied for. In some cases a face to faceinterview will be the final stage in the process. In other cases, candidate may attend additionalinterviews, complete further individual assessment exercises or join RBS at an assessment centre.

Making t he off er

Assuming everything has gone well for both candidate and HR managers, they will makecandidate an offer. This is a very important part of the overall process. Your recruiter or RBScontact will help answer any questions and support candidate with any of the practicalities

involved in confirming offer, such as our pre-employment screening process.

Findings t hrough our Dire ct Interview f rom HR m anagers

With the visit paid by us to the Royal Bank of Pakistan branch at Haroon road, Karachi. Wefounded out the different aspects regarding to our report asked. The following research driven isas under:

Finding of Different Motivational theories applied in Royal Bank Of Scotland Pakistan

With our detailed interview with the HR Manager of RBS, Saif Qureshi, Wederived that there are different motivational theories which are applied in theRoyal Bank of Scotland but first when asked about how employees aremotivated the answer we got was that

Saif Q ures h i says

RBS hire self motivated employees. If you have the potential, you are motivated and efficienttowards your career and work RBS is the right place for you to join in. We apply differenttheories of Motivation to keep the employees Motivated throughout the work carried on not to

train them how to get motivated instead how to keep them motivated.CONTRASTING OF MOTIVATIONAL THEORIES:

EARLY THEORIES:

Keeping in view the above statement quoted by the manager we contrasted different early theoriesof motivation studied in our course of Management by Sobia Shujhat.There were almost every

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theory explained above in the introduction of topic is applied in Royal Bank of Scotland. Thefollowing contrasted are:

McGreg o r Theory X and Theory Y and RBS:

In the above explained McGregor theory the Theory Y is applied and most prominent in RBS.The employees in RBS under theory Y are creative, enjoy work, seek responsibility and canexercise self-direction. It is believed t hat e m ployees enj oy their m ental and p hysical w ork duties. T heypossess t he ability fo r creative pr oble m so lving, but t heir talents are underused in mo st o rganizati ons.Given t he pr oper conditi ons, RBS m anagers believe t hat e m ployees will learn t o seek out and a cceptresp onsibility and t o exer cise sel f -contr o l and sel f -dire ction in a ccom plish ing obje ctives t o wh ich they arecomm itted. An RB S m anager applying T heory Y believes t hat, given t he rig h t conditi ons, mo st pe ople willwant t o do well at w ork. They believe t hat t he satis f action of do ing a g oo d job is a str ong mo tivati on.Many pe ople interpret T heory Y as a p ositive set of belie f s ab out w o rkers. It's here t h rough hum anres our ce devel opm ent t hat is a cru cial aspe ct of any organizati on. Th is would in clude m anagers

comm uni cating openly wit h sub ordinates, m inim izing t he di ff eren ce between superi or-sub o rdinaterelati ons h ips, creating a comfo rtable envir onm ent in w h ich sub ordinates can devel op and use t heirabilities. T h is clim ate w ould in clude t he s haring of de cision m aking s o that sub o rdinates have say inde cisions t hat in f luen ce t hem . Th is theo ry is a p ositive view t o the e m ployees!.

Theory Y leading t o the appli cati on of Masl ow s Theory in RBS Pakistan:

McGreg o r's w ork was based on Masl ow's h ierar chy of needs. He gr ouped Masl ow's h ierar chy int o "lowero rder" (T heory X) needs and " h igher o rder" (T heory Y) needs. He suggested t hat m anage m ent could useeit her set of needs t o mo tivate e m ployees. As m anage m ent t heo rists be cam e f am iliar wit h Masl ow'swork, t hey s oo n realized t he p ossibility of conne cting h igher level needs t o wo rker mo tivati on.

In RBS Pakistan o rganizati onal g oals and individual needs are integrated s o that pe ople w ould a cquiresel f -estee m and, ulti m ately, sel f -actualizati on t h rough work, t hen mo tivati on w ould be sel f -sustaining.Today, Masl ow s and Theory Y principle in f luen ces t he design of pers onnel p o licies, a ff ects t he waycom panies condu ct per fo rm an ce reviews, and s hapes t he idea of pay fo r per fo rm an ce.Phy s iological need s :For the most part, physiological needs are obvious. They are the literal requirements for human survival. If these requirements are not met (with the exception of clothing, shelter, and sexual activity), the human

body simply cannot continue to function.RBS Pakistan take very good care of these needs and providetheir employees with a all the requirements to satisfy their physiological needs in all. S

afety needs:

With their physical needs relatively satisfied, the individual's safety needs take precedence anddominate behavior. In the world of work, this safety needs manifest themselves in such things as a

preference for job security, grievance procedures for protecting the individual from unilateralauthority, savings accounts, insurance policies, reasonable disability accommodations, and thelike. RBS Pakistan gives its employees high safety assurance to make them satisfied at their jobthat greatly help in motivating them in their work.

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S ocial need s : After physiological and safety needs are fulfilled, the third layer of human needs are social andinvolve feelings of belongingness Hum ans need t o f eel a sense of bel onging and a cceptan ce, w het herit com es f rom a large s oc ial gr oup, su ch as clubs, off ice culture, religi ous gr oups, pr of essi onalo rganizati ons, sp orts tea m s, gangs (" Saf ety in nu m bers"), or s m all soc ial conne ctions ( f am ily m em bers,inti m ate partners, m ent o rs, close co lleagues, conf idants. T h is need fo r bel onging can of ten over com e t hephysio logical and se curity needs, depending on t he strengt h of the peer pressure. W o rking itsel f in RBS Pakistan mo tivates t he e m ployee all o t as RBS is an internati onal private bank serving fo r past s o m anyyears it f ulf ills all t he s oc ial needs of the e m ployees w orking and mo st of the pe ople desire t o work atRBS.Es teem:

All humans have a need to be respected and to have self-esteem and self-respect. Also known asthe belonging need. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and self-valued, be it in a

profession or hobby. RBS Pakistan takes good care of all these things and motivates itsemployees accordindly.By providing different incentives and recognitions, bonuses, and other incentives, different programs are set giving employees task to motivated to achieve and enhancetheir skills, all motivates themS elf-actualization: The desire t o be com e mo re and mo re w hat one is, t o be com e everyt h ing t hat one is capable of

be com ing. Th is is a br oad de f inition of the need fo r sel f -actualizati on, but w hen applied t o individuals t he need is spe cif ic. As m enti oned be fo re, in order t o rea ch a clear understanding of th is level of need one m ust f irst n o t only a ch ieve t he previ ous needs, p hysio logical, sa f ety, l ove,and estee m , but m aster t hese needs. RB S Pakistan sel f -actualize its e m ployees by telling t hem again and again tw o th ings w h ich are:1) To be f ree of the g oo d opinion of o thers

2) To do th ings n o t sim ply fo r t he out com e but be cause it's t he reas on you are here on eart h .Herzberg s M o tivati on-hygiene T heory in RBS Pakistan: T h is theory states t hat satis f action anddissatis f action are driven by di ff erent f acto rs mo tivati on and hygiene f actors, respe ctively. Anem ployee s mo tivati on t o wo rk is continually related t o job satis f action of a sub o rdinate. In RB S Pakistanmo tivati on can be seen as an inner fo rce t hat drives individuals t o attain pers onal and organizati on goals.These f actors are t ho se aspe cts of the job t hat m ake pe ople want t o per fo rm , and pr ovide pe ople wit h satis f action RBS, fo r exa m ple a ch ieve m ent in w o rk, re co gniti on, pr omo tion opp ortunities. T hesemo tivating f acto rs are considered t o be intrinsi c to the job, or t he w ork carried out. Hygiene f actorsinclude aspe cts of the w orking envir onm ent su ch as pay, com pany p o licies, supervis o ry pra ctices, ando ther w orking conditi ons w h ich are all seen in RB S Pakistan and pra cticed a mo ng t he e m ployees.

MOTIVATORS IN RBS PAKISTAN: Factors that increase job satisfaction and motivation inemployees observed and seen by us during our visit to RBS are:

1) Ach ieve m ent: Great e m phasis is m ade on t he a ch ieve m ents of goals by e m ployees in RB S. Goals areset every ti m e and w h ich are altered a cco rding t o the organizati onal re quire m ent.

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2) Recogniti on: RBS pr ovides a re cogniti on t o em ployees in t he Banking m arket w o rldwide as it is aninternati onal bank covering s o m any countries w orldwide w h ich in turn pr ovidesmo tivati on t o em ployees w h ile w orking wit h RBS.

3) Work itsel f : The w o rk given and t he g oals set are itsel f mo tivating fo r t he RBS em ployees. T he pr o jectsand assign m ents given t o m eet are designed by t he t o p level in su ch a way t hat

pr ovides mo tivati on t o sub ordinates w h ile d o ing t hem .4) Resp onsibility: Handling a resp onsibility given it mo tivates an individual. Giving resp onsibilities

mo tivates t he e m ployees itsel f in t he o rganizati on and help t o im pr ove t heir w ork.5) Advan cem ent: T he di ff erent types of te chno logies and advan cem ent used in t he syste m of Banking of

RBS plays its part in pr oviding a great deal of mo tivati on t o em ployees t o work on wit h .Working in an advan ce envir onm ent helps t o mo tivate e m ployees and help t hem to ach ieve mo re t han t heir own com peten cies.

6) Growt h : RBS keeps a close l oo k at inn ovati on in its pr odu cts and servi ces pr ovided be cause d o ing s o just n o t bene f it t he o rganizati on itsel f but als o mo tivates e m ployees t owards newinn ovati ons and new ideas.

HYGIENE FACTORS IN RBS PAKISTAN:We w ould n o t dis cuss hygiene f actors contrasting RB S be causehygiene f actors are t ho se f actors t hat eli m inate j ob dissatis f action but d on tmo tivate e m ployees s o it suseless t o discuss it under RB S.

2) CONTRASTING OF MOTIVATIONAL THEORIES:CONTEMPORARY THEORIES:

Keeping in view the above statement quoted by the manager we contrasted different early theoriesof motivation studied in our course of Management by Sobia Shujhat.There were almost everytheory explained above in the introduction of topic is applied in Royal Bank of Scotland. Thefollowing contrasted are:Th ree need T heo ry in RBS Pakistan: In RBS Pakistan this three need theory is also applied at certainlevel of management. It is not that widely used as the early theories are but they are applied insome departments as researched further in RBS. This can be contrasted by looking at the differentneeds under it which are contrasted within RBS:

1) Need fo r a ch ieve m ent: As dis cussed ab ove need fo r a ch ieve ment in RB S 2) Need fo r Power: E m ployees here are mo tivated by pr omo tions and distributi on of diff erentdesignati ons t o them .3) Need fo r a ff iliation: As said be fo re t h is theo ry d oesn t f ully apply in RB S. Need fo r a ff iliation isn tseen observed m uch .Goal setting T heo ry in RBS Pakistan:

Goal setting theory is widely used in RBS Pakistan. During our visit we observed that goalswhich were assigned were different in nature some were difficult and some very easy and somewere even more difficult but it had a great impact on performance of the employee that wasemployees were greatly motivated in achieving such goals which did not only motivated to work hard n efficiently but also enhanced their skills more and more

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Our resear ch in RBS concluded regarding G oal setting t heory in RBS that t here were 4 f acto rs a ff ectingthe g oal-dire cted e ffo rts t o em ployees.

1) Diff iculty level: G oal di ff iculty is t he level of diff iculty t o ach ieve t he g oal.RBS goals assigned wereacco rding t o the level of the e m ployee but di ff icult g oals mo tivated overall e m ployees.

2) Comm itm ent: G oal Comm itment is t he extent t o wh ich a pers on is interested t o rea ch thegoal.RBS em ployees were greatly comm itted t o the g oals assigned t o them as we observed t hatthe comm itm ent t o the g oals were very m uch to an extend t hat leaded t o mo tivati on again.

3) Spe cif icity: Goal spe cif icity m eans t he g oal sho uld be relatively clear and pre cise in its target.That was t he m ainly j ob of the t op m anage m ent w ho were assigning t he g oals t o sub o rdinates.

4) Acceptan ce: Goal a cceptan ce is t he extent t o wh ich a pers on ad opts a g oal as h is or her own.Th is als o played it part in mo tivating t he e m ployees.

Reinfo rcem ent t heory in RBS Pakistan Rein fo rcem ent t heo ry is t he best-kn own appli cati on of theprin ciples of rein fo rcem ent t heo ry t o organizati onal settings is called be havioral mo dif icati on, o rbe havioral contingen cy m anage m ent. T hese are widely used in RB S Pakistan and it is t he mo st f avo rableof all t he t heories we w ould say. Rein fo rcem ent t heory plays an i m po rtant r o le in explanati on of ho wpe ople learn be havior in RBS. It is of ten applied t o organizati onal settings in RB S in t he context of abe havioral mo dif icati on pr ogra m . Altho ug h the assu m pti ons of rein fo rcem ent t heo ry are of ten criticized,its prin ciples continue t o off er i m po rtant insig h ts int o individual learning and mo tivati on. The resear ch done by us s ho wed t hat t here are di ff erent variants, typi cally, a be havioral mo dif icati on pr ogra m thatco nsists of four steps:

1. In RBS employees specifying the desired behavior as objectively as possible.2. They constantly measure the current incidence of desired behavior.3. Employees are provided behavioral consequences that reinforce desired behavior.4. And in the end each employee determining the effectiveness of the program by

systematically assessing behavioral change.

Designing M o tivating j obs t heory in RBS Pakistan:

Managers in every organization have the opportunity to influence the motivation of employeesthrough design of their jobs. Well-designed jobs help accomplish two important goals: getting thenecessary work done in a timely and competent manner, and motivating and challengingemployees. Managers in RBS Pakistan starts job designing with determining the duties, tasks andactivities for each job. The process of determining the content of jobs is called job analysis. Jobanalysis in RBS is considered the foundation of human resource management Department.

JOB DESIGN: After the job analysis has provided the necessary job data, managers are ready todesign jobs. Job design is the structuring of jobs to improve the efficiency of the business andim pr ove e m ployee satis f action. Managers in RB S add co nsiderati on of what individuals want in t heir jobs.Som eti m es m ino r changes in j ob design, dra m ati cally im pr ove a j ob in t he e m ployee s view

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JOB ENRICHMENT: in RBS is a resp onse t o em ployees ready fo r mo re resp onsibility, variety andch allenge. Wanting mo re is only part of what is re quired t o m ake j ob enri chm ent a su ccess. E m ployees inRBS m ust be able t o handle t he enri ched j obs t hat are being devel oped fo r t hem . Managers need t o co nsider care f ully ea ch em ployee s physical capabilities, m ental skills, o rganizati onal com peten ce andcapa city fo r learning be fo re inviting an e m ployee t o take on an enri ched j ob. Fo rcing mo re on e m ployeesthan t hey are capable of handling will likely hurt t he business and f rustrate t he e m ployees.

JOB ENLARGEMENT: In RBS Pakistan the following steps are always considered before a manager does its employees job enlargement:

Make a job more challenging by making it more difficult.Assign challenging new tasks that the employee must learn to do through self-study, off-site

training, on-the-job training, experimentation and/or contact with others who have the necessaryexpertise.

Delegate responsibility and authority to an employee.Ask the employee to become expert in an area of interest to him or her,

Provide the employee with performance reports about enterprises or major cost categories andask that he or she provide analysis and suggestion on how to improve performance.JOB DESIGN: Job Rotation allows workers to diversify their activities to offset boredom. There aredifferent types of job rotation experienced in RBS Pakistan which are as follows:

1) Vertical rotation relates to promotions and demotions2) Horizontal transfers-moving someone to another activity when the first is no longer

challenging Equity Theo ry in RBS Pakistan: Equity Theory has been widely applied to business settings by IndustrialPsychologists to describe the relationship between an employee's motivation and his or her perception of equitable or inequitable treatment. The basic idea behind the Equity Theory is that workers, in an attemptto balance what they put in to their jobs and what they get from them. In RBS Equity Theory is applied by

looking at the most highly motivated employee is the one who perceives his rewards are equal to hiscontributions. If he feels that he is working and being rewarded at about the same rate as his peers, then hewill judge that he is being treated fairly. Everyone takes up a job as they are motivated by some factor or the other. Some are motivated by the challenge they will face in carrying out their job, some are motivated

by the level of fame they may earn, others and majority of people are motivated by the money they willearn. The last factor plays a major role in making or breaking a company. People in RBS, is observed, willwork better when they are motivated enough with the pay scale, the incentives and the perks they areoffered in return of a job well done. Based on this factor, many scholars and researchers have put forththeir equity theory of motivation for employees. Equity theory have several implications for businessmanagers in RBS Pakistan:

1) Employees m easure t he t o tals of their inputs and out com es.2) Diff erent e m ployees as cribe pers onal values t o inputs and out com es.3) Em ployees are able t o adjust fo r pur ch asing p ower and l oc al m arket co nditi ons.3) Altho ugh it m ay be a cceptable fo r mo re seni o r sta ff to re ceive h igher com pensati on, t here arelim its t o the balan ce of the s cales of equity and e m ployees can f ind ex cessive exe cutive payde mo tivating.4) Sta ff per cepti ons of inputs and out com es of the m selves and o thers m ay be in co rre ct, and

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per cepti ons need t o be m anaged e ff ectively.5) An e m ployee w ho believes he is over- com pensated m ay in crease h is e ffo rt. H owever he m ayalso adjust t he values t hat he as cribes t o h is own pers onal inputs.

Expectan cy theo ry in RBS Pakistan:

The Expe ctan cy Theo ry of Mo tivati on was devel oped, by Vi ctor Vroom of the Yale Schoo l of Manage m ent, in t he year 1964. He was of the opini on t hat pe ople m ade a co ns cious cho ice w h ilede ciding w het her or n o t t o per fo rm at t he w o rkpla ce. H owever t he cho ice t hat was m ade by t he RBS em ployee depended entirely on t he e m ployee's level of mo tivati on w h ich in turn was a f un ction of threef acto rs (t h is was concluded by t he questi onnaire taken f rom diff erent e m ployees in t he o rganizati onwh ich is presented in t he end of the rep ort).

Ex pectancy is a person's strength of convictions as regards the ability to attain goals. E mployees whodesire the rewards, that the management is e x pected to bestow upon them on account of superior performance, are given strong convictions regarding their ability to deliver. An employee should feel that

the efforts that he/she would like to put into work would yield the desired results. It is ultimately a questionof how confident one feels about oneself. A self proclaimed achiever may be immensely confident of theability to perform astoundingly while a doubting Thomas may have an entirely different perspective. Anemployee, who feels that the efforts will not yield the desired results in terms of achieving the set targets,will have a low probability of e x pectancy. RBS probability of an event can assume values between 0 and 1.How well does an employee score on this scale of confidence will have a direct bearing on the employee'slevel of motivation. A motivated employee is thus the RBS product of the perceived level of satisfaction , theconfidence to achieve and the rewards that the employee hopes to receive on achieving the set goals. Inother words

Valence * e x pectancy * instrumentality = motivation.

Overall M o tivati onal met ho ds applied in RB S Pakistan:

The managers being assigned the job to lead the staff try their level best to motivate the staff for giving their best. The employees are given the charm of increments and bonuses to work hard for the MANAGEMENT REPORT. The employees on contract basis work hard because of thecharm to be permanent in the bank. The permanent employees work hard as they see the charm toget promotion and increment. All these charms are there by the management, for motivating their staff.Sta ff Monit o ring:The bank has a very str ong sta ff mo nit o ring syste m . They fo llow t he auditing p o licy of internal contr o l. In t h is respe ct every m em bers w o rk is checked by an o ther m em ber. T he bank has aseparate auditing depart m ent t o co ntr o l any disputes between t he m em bers and keep up t he f low of itsf un ctionality.

Grouping of Sta ff :RBS does n o t believe in gr ouping t he sta ff fo r any reas on. The e m ployees are givenindividual tasks and g oals. M ostly t he e m ployees t hat are on contra ct basis are mo re of ten given t hesekinds of tasks. Gr ouping t he e m ployees is n o t a commo n pra ctice in RBS MANAGEMENT REPORT. But stillit is d one in s om e spe cial cases w here it be com es very ne cessary.

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Controlling:Controlling and handling the employees is a breath taking job. RBS has done thisob very well. They have made a separate department for this purpose, The Audit Department.

This department works throughout the year and helps the employees for maintaining theaccounts as per required by the laws. Along with that it keeps an eye on the employees thatthey are working in the favor of the bank. For controlling the staff RBS has some defined

laws. The employees are given written instructions that enable them to work in accordance tothe management and other employees. Security cameras are not only used to secure the bank but also help the management to keep a check on the staff. MANAGEMENT REPORTSpecial personals are hired to monitor the working staff and report it to the higher staff basedon their monitoring.Controlling the Services:RBS has hired professional Islamic scholars to provide their customers the best available services. By this they provide their customers the requiredIslamic banking. In addition to the Islamic banking it has consumer and commercial as well asSME banking for which they have hired trained professionals, for giving the best possibleservices in their respective fields. Those professionals there are also working with the youngtalented people to train them and give the bank a number of workers.

Quality ControlThe quality control in the banking field is related to the environmental quality. The bank has a veryhealthy environment for the employees and customers. This helps a lot to retain the existing customersand attract the MANAGEMENT REPORT new ones. The bank has created a new department tocontrol the quality of its services and the banking environment .Finan cial Contr o l:The audit depart m ent of the bank plays a vital r o le in contr o lling t he f inan cial m atters. T h isdepart m ent is w orking t he w ho le year and checks t he f inan cial m atters by checking all t he b oo ks of acco unts and t hat t hey are in a cco rdan ce wit h the internati onal laws.

Our esti m ati on and opini on a f ter resear ch RBS has a very str ong p osition in Asia. In Pakistan it has mo re t han seventy bran ches. It is kn own asone of the best cust om er servi ce pr oviders wit h foc us on t he h igh pr of ile business pers ons.

In Islamic banking it is one of the first foreign banks to launch Islamic products. It has a bright future

ahead. The Islamic Mortgage Department is working on launching various products, although its

products range cannot be compared with the competitors but one can predict that in future a wide

variety of RBS products will be covering the market. The Customer Service Department is one of the

best departments in the whole bank, offering products in areas like Deposits, Saving and currents

accounts, cash and cheque deposits, and loan facilities. Not only this, it is also offering products as:

Balance Transfer Facility (BTF) which in banking terminology is One Stop Payment Shop, 24 hour nonstop banking centre, relationship card through which customer can access to over 1000 ATMs, life

insurance protection, E statements through which you can receive your BTF via email, Drop box

facility- the convenience of dropping of your payments at any of the drop boxes placed outside RBS.

Despite its strong position RBS has some of the weak points which can be removed easily. There are

weaknesses in the bank which can be overcome by efforts of the staff. Its strength is that it is the

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number one bank in whole world with respect to the assets and the big weakness is that it should

improve its information sharing with the customers. On the whole we can conclude that almost all of

the employees are satisfied, although some are dissatisfied whose results are shown in the survey.

But on the whole we cannot compare RBS with any other bank. One can feel the difference while

entering its premises thats why it says

We make it

happen.

Our esti m ati on and opini on a f ter resear ch regarding M o tivati on t heo ries and RB S Generally, t he RBS group s HR prof essi onals are business- foc used and comm er cially aware, wit h a

h igh degree of "consulting" com peten cies su ch as o ral presentati on skills. The m aster classes wereseen as extre m ely su ccess f ul by t he HR f un ction as:

They provided actions for the HR function to help the businesses and were key in informing theHR strategy, which the HR professionals now "own"

HR professionals had a much greater understanding of the business drivers and impact on share price

100% of participants said they personally benefited from the workshop and the PwC presentationand facilitationAlmost half of the participants said that their most significant learning point was the market perceptionof the RBS group and how this perception impacts on share price. For many participants personalaction points included continuing to develop commercial awareness and encouraging similar discussions in their wider HR communities. Participants now believe even more strongly that the HR function has a real opportunity to play a strategically important role and are highly motivated andenthusiastic about being part of an HR function aligned to achieving business objectives.

RBS appr oach fo r mo tivati on of em ployeesWit h our interview wit h Saif Q ures h i the, Hu m an Re course Manager, He h igh ligh ted t he fo llowingpo ints w h ich RBS f re quently use t o keep t heir e m ployees mo tivated t h rougho ut t he g oals.

Per fo rm an ce Appraisal:

Each organization must create and communicate performance measures that reflect itsunique strategy. Performance management is the process through which managers ensure

That employee activities and outputs are congruent with the organizations goals. It is

central to gaining competitive advantage. A well-executive performance management planenables RBS to achieve critical goals such as:1. Recognize the efforts and contributions of current staff.2. Reward staff with compensation directly linked to performance.3. Motivated staff to improve performance.4. Orient staff towards goal achievement.5. Retain key employees through the use of competitive compensation programs.

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6. Attract quality employees with an effective performance management system.

The key elements of a Performance Management System include the following:1. A Formal Compensation Philosophy Statement2. Salary Administration Program3. Job Evaluation System4. Performance Appraisal System5. Reward ProgramsCom pensati on:

Being a leading Bank Royal Bank of Scotland presents itself to its corporate as well asindividual customer as dependent upon the ability of its sales force. These are theindividuals who take an active approach in getting the message out about the Banks

products and services. How effectively the sales team markets the Bank, and in turn, howsuccessful it is, is directly related to the sales compensation program. A sound sales

compensation package enable RBS focus sales activities towards desired results, andrewards these outcomes with compensation tied directly to the level of achievement.Rewards & Re cogniti on:

Royal Bank of Scotland rewards the talented and high performing employeescompetitively. They regularly conduct salary surveys to ensure the reward packageremains competitive in the market place. They encourage continuous discussion;encourage regular review of employees performance and development. This providesfeedback to the staff about how they are doing. The management links this to bothfinancial and nonfinancial recognition. In addition to this, the bank provides various

incentives in the form of bonuses to encourage the employees and motivate them tocontinue with their high performance. These include1. Spot Award + Rs. 5000 as cash prize

2. Surprise Award3. Best Performance Award4. Service Quality AwardKhuli Khecheh ri:It is a pr ogra m wh ich is held a f ter every 2 mo nt hs in ea ch and every depart m ent of RBS. Th is id d one t o share t he views of em ployees and t heir experien ce of the tasks com pleted wit h ea ch o ther by d o ing s o

th is m et ho d be com es a way fo r mo tivating t he e m ployees f urt her and di ff erent awards are als o distributed appre ciating t he per fo rm an ce of the e m ployees w h ich is later fo llowed by a lavis h dinner orlun ch . Arranging di ff erent event like K huli Khecheri (as t he sa m e suggest) invites e m ployees t o mo tivateindividually t hem selves by s haring and dis cussing als o their pr oble m s n challenges f aced by t hem .Em ployees w ho need t o be f urt her assessed wit h their abilities are als o loo ked up on by t he m anager fo rassistan ce.D iscusses some of the policies regarding employees motivation applied in RBS in 2009 whichare as follows:

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Redepl oyment and redundan ciesThe Group has endeavored to keep job losses and compulsory redundancies to a minimum.However, due to the necessary changes throughout the Group, there has been a need to cut

jobs across the organization. A number of initiatives were undertaken to minimize compulsoryRedundancies, and to support staff and managers through these challenging times. Advice was

provided for line managers going through a departmental restructure, staff could apply for voluntary redundancy, or redeployment and outplacement support. The total employeepopulation was 160,000 at the end of 2009, a 14,000 reduction from the end of 2008. Since thebeginning of the financial crisis, we have announced a planned reduction of appro x imately20,000 jobs, of which some are still being progressed. An employee financial hardship projectwas launched in 2009 to support employees in financial difficulty and financial advice andcounseling was also provided. The Group works with over 40 social partners globally includingtrade unions, works councils and two cross jurisdiction E uropean W orks Councils. E achrelationship is different depending on jurisdiction and issue; we are currently in the process of discussing the future E uropean structure with both the RBS E uropean E mployee CommunicationCouncil and the ABN E uropean Staff Council.Rem unerati on and rewardRemuneration is one of the most challenging issues that RBS currently faces. D uring 2009, theRemuneration Committee sought to reflect public sentiment on this issue while ensuring thatRBS remains competitive and retains individuals that are central to its future success. Theapproach used to generate and distribute bonus pools has changed to be aligned with effectiverisk management. The Groups control functions (HR, Risk M anagement, Finance) now have amore e x plicit role in challenging divisional recommendations prior to submission and provide theRemuneration Committee with conte x t of divisional performance. A rigorous process todetermine bonus compensation is also carried out to establish criteria in line with shareholder interests and long-term risk adjustment. A review of the e x ecutive remuneration framework was

undertaken in 2009, which will strengthen performance management processes and ensure thatthe Boards requirement for the management of risk is reflected in reward policy and practice.Em ployee & C omm unity Engage m entThe E mployee & Community E ngagement program makes a difference in the communities inwhich we operate by supporting the good causes that matter most to our employees in threeways. First, we run an employee volunteering program where employees can participate in teambuilding opportunities in work time, where we partner with a range of charities to deliver theskills,Services or fundraising that they need. Second, we match the donations they make tocharity via their salary. Third, we make cash grants to the 3,800 charities that employees givetheir time to, E ither as volunteers or fundraisers. Last year more than 50,000 RBS employeeswere given almost 155,000 hours off work to volunteer.Listening t o em ployeesThe Group E mployee Opinion Survey ( E OS) is an integral part of how we manage our employees and we use this survey to identify where we need to invest more time and energy inorder to create a positive workforce. W e also use this survey to benchmark the Group againstthe industry standard. W e continue to achieve a strong response rate with 87% of employeestaking part in the survey in 2009, significantly higher than the average industry responserate. D ue to the unprecedented change and uncertainty at the Group over the last 2 years, our

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staff feeling has declined. This is evident in the employee security score which has fallen 14points since 2008. However, there was a general downwards shift in the industry as the Groupremains at 16 points below the Global Financial Services norm. The effect of continueddisruption at RBS is also evident in the job satisfaction and engagement score, which sits at 12points below the norm

Em ployee pensi onsD uring 2009 the Group made two changes to retirement provision impacting the UK and theRepublic of Ireland. Firstly, the e x tent to which increases in salary could count towards theemployees pension in the final salary pension plan was limited to the rate of inflation or 2% each

Year, whichever is lower. In the view of the Group Board, this change was necessary to controlthe cost and risk of operating such plans and by doing so we are able to keep these plans opento e x isting members. Secondly, for those who are eligible for company contributions madeto a defined contribution plan in the UK, we introduced a default contribution of 2% of pay withthe intention of increasing this gradually to 7%. E mployees have the ability to choose the level of contribution that is appropriate for them, and detailed information and support is beingProvided. Contributions from RBS to the Group Pension Fund in respect of the main UK definedbenefit scheme for 2009 totaled 536 million Diversity and in clusion pr ogra m W e value the diversity of our employees and are committed to creating a working environmentthat is inclusive to all. In order to attract and retain talent and enable employees to reach their fullpotential we need to embrace peoples differences, whether they are related to physicalcharacteristics, such as gender, race, age or disability, or related to their personality, opinions,preferences and beliefs. For an overview of the Groups W orkforce Composition Statistics,please visit rbs.com/ sustainabilityreport2009.Gender equality is a key focus and in order toreflect a more robust gender equality policy, the Ex ecutive recruitment process has been

Reviewed to ensure that a female is included on all shortlists. A new D iversity training modulewill be implemented in 2010, which highlights the issue and impact of unconscious biases indecision making. To promote gender equality internally, the Focused W omen Network (F W N)aims to inspire, lead, coach, motivate and create opportunities to fulfill employees potential.FW N organizes events such as networking conferences and personal development sessions inthe UK, with the aim of going global. In 2009 the Group won the Gold Standard Award fromOpportunity Now and ranked first place for Financial Services in the Race for Opportunity.W e are in the Stonewall Top 100 E mployers W orkplace E quality Inde x for Lesbian, Gay andBise x ual people and are in The Times top 50 W here women want to work. Three femaleemployees were also shortlisted in the 2009 W omen in Banking and Finance Awards for

Achievement.Em ployee devel opm ent

It is beneficial to the Group, the overall working environment and individual employees to havemotivated and challenged staff. It is important that employees are given the opportunity and thecapacity to develop and there are a number of initiatives in place to promote this. In 2009, theHarvard Business Publishing Online product was launched, enhancing our online and ondemand learning. The courses are tailored for non-managerial staff, middle managers and firstline managers. Over 12,000 employees have registered and it has proved to be acomprehensive and useful tool. In order to equip the senior employees of the Group tounderstand, e x ecute and sustain the strategic business plan, a new Leadership D evelopment

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Program was launched in 2009. Two modules were integral to delivery of the Groups strategicplan: M anaging for Value Creation and Strategic Risk M anagement, which 50 e x ecutives andsenior managers attended in 2009. This provided a forum to challenge the business plan anddevelop analytical and strategic thinking. This helps build a culture of collaboration aimed atimproving business performanceWhat s are our 2010 pri o rities?

D evelop our Performance M anagement Capability to ensure

E very employees contribution is aligned to our strategic plans.

W herever possible, we will E ndeavour to mitigate the need for Compulsoryredundancies.

y Improve employee engagement using non-financial means.

Build our internal bench strength through more rigorous assessment and developmentof our talent whilst recognizing the diversity of our talent.

Implement the D iversity & Inclusion strategyComm paring M o tivati on wit h pr of it and l oss rep ort of RBS PAKISTAN

PROFIT ANDLOSS ACCOUNTANALYSIS:Overall revenue of the Bank grew by 3% to PKR 23.0 billion for the year ended D ecember 31,2009 as against PKR 22.3 billion in 2008. Net M ark-up / Interest income of PKR 16.4 billion wasmarginally higher than last year. W holesale banking Net M ark up / Interest income was 57%higher than last year primarily D ue to an increase in its advances portfolio. This growth was

offset by a reduction in the consumer banking interest income as atD

ecember 31, 2009.Consumer banking advances has reduced primarily due to the decision of the bank to be e x traprudent on both secured and unsecured products. D espite double digit inflation and significantinvestmentin technology, branch network and infrastructure, non mark-up e x pense have increased only by4% to PKR 12.62 billion compared to last year PKR 12.16 billion. In line with our growth strategythe distribution network was further enhanced by 33 branches. Total network now stands at 174branches in 41 cities compared to 141 branches last year.Mo tivati on ANALYSIS th rough Prof it and L oss rep ort:In RBS E mployees are motivated with different activities and policies as stated above. M otivatingemployees greatly affect the profit and loss report of the organization. E mployees bestperformance greatly helps in increasing the profit of the firm which in turn increase the goodwilland position of the organization in the market. In RBS by comparing the report we can contrastthe motivational level of employees and at what e x tend the employees are motivated that resultin great increase in the profits of the organization.Our pers onal experien ce at RB S:The f irst t h ing w h ich we n o ticed in all t he depart m ents of RBS is that all t he e m ployees w o rk very hard,

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so the overall less on I learnt is t hat One cann o t g o wit ho ut hard w o rk, espe cially w hen one j o ins anyMulti Nati onal organizati on one has t o sho w h im / her as a dedi cated w orker.

Regarding w orking sta ff in RBS we w ould like t o say t hat t hey are t he real pe ople w ho have grip over t heir

spe cif ic wo rking areas. In t h is depart m ent t he tea m m anager tea ches ho w t o f ill the fo rm s and arrange

the d ocum ents of the cust om ers. T hey als o condu ct interview wit h cust om ers by asking t hem spe cif ic

questi ons. They telep ho ned t he regular cust om ers fo r advertising t he new pr odu ct laun ched by t he

Islam ic Mo rtgage Depart m ent. In General Banking I n o ticed t hat cust om ers are guided pr operly t o the

co unters. One t h ing I no ticed in t he bank w h ich m akes it di ff erent t han o ther banks of Pakistan is its rules

of conduct which include: RB S dre ss code, language and it s working environment.