HRM Report: Compensation Strategy of National Commercial Bank (NCB)

This report provides a comprehensive overview of the compensation strategy employed by the National Commercial Bank (NCB), also known as AlAhli Bank, a leading financial institution in Saudi Arabia. The report begins with a brief introduction to NCB and its transformation into a complete Islamic Bank, followed by an in-depth analysis of its compensation strategy, which aligns compensation resources with business goals. It details the various compensation packages offered to different employee groups, including young Saudi graduates, senior expat managers, and expat laborers from developing countries, considering factors like base salary, non-financial benefits (such as healthcare and incentives), and the impact of nationality on compensation. The report also highlights NCB's focus on attracting, motivating, and retaining high-quality employees through a competitive and comprehensive compensation system, emphasizing both intrinsic and extrinsic elements to drive employee motivation and organizational performance. The conclusion summarizes the bank's approach to employee development and the varying compensation levels across different employee categories.

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Executive Summary:
The objective of the report is to provide an overview of the compensation strategy of National
Commercial Bank (NCB). The report commences with a brief description of the bank thereby
describing the compensation strategy he adopts. The report also puts across an explanation of the
various compensation packages offered to the young Saudi graduates, the expat managers and
the expat laborers of the developing countries. The report also provides an insight into the base
salary and the non-financial benefits put forward by the company.

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Table of Contents
Introduction:....................................................................................................................................3
Compensation and Compensation Strategy of NCB.......................................................................3
Explanation of Different Compensation Packages Offered For Different Group...........................4
Focus on Base Salary and Non-Financial Benefit:..........................................................................5
Conclusion:......................................................................................................................................6
References:......................................................................................................................................6

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Introduction:
The report aims at providing at insight into the compensation strategy of National
Commercial Bank (NCB) of Saudi Arabia. It is also known as the AlAhli Bank and is one of the
largest bank in terms of its overall assets and the second largest in terms of the market
capitalization (alahli.com, 2019). In the year 2014, NCB made an announcement of transforming
it into complete Islamic Bank. The compensation strategy of NCB puts across the point of view
of the organization on how it determined its pay and the benefits to the employees. The package
is decided by aligning the compensation resource to business goals that also helps the company
in determining its competitors. The report helps in identifying and explaining the compensation
package being offered the young graduates, senior expat manager, expat laborers from
developing world along with a focus on the non-financial benefits and the base salaries.
Compensation and Compensation Strategy of NCB
Compensation represents a broader idea that includes both financial and non-financial
rewards which an employee values and expects that the employer is willing or able to offer in
return of the employee contribution (Aamir et al. 2013). Compensation has an intense impact
over employee motivation. Compensation of NCB comprises both intrinsic and extrinsic factors
that have possible impacts on motivation. It is found it is both the monetary and the non-
monetary value that plays a key role for motivation.
The compensation strategy of NCB aims towards achieving higher means of
organizational, individual and the team performance (Folléa, 2016). Development and
management of a compensation system that is effective and suitable for organization is a key
function of the human resource. From the perspective of NBC, the focus of the compensation

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strategy lies in attracting, motivating and retaining employees of higher quality(8) . However, the
system of compensations must be designed based on the understanding of the employees.
Compensation comprises of both the extrinsic and the intrinsic elements. In addition to pay, the
other means of compensation includes stocks, bonus, insurance and healthcare.
Explanation of Different Compensation Packages Offered For Different Group
NCB puts across distinguished and advanced work ambience that makes it a suitable
choice for the career seekers in all the banking fields right from the fresh graduates to the
experienced people (alahli.com, 2019). The ongoing expansion in the branch network and
operation put across job opportunities for the ones who wishes to join the NCB. The actual need
for recruitment in NCB is identified by the human resource department which then creates a new
job in developing work cycle within Bank thereby setting job description for each of the
positions. The career website of NCB represents interactive platform that is available to the male
and the female job seekers thereby opening the door to the fresh graduates looking forward
towards joining NCB.
The compensation package offered by NCB are different for the different groups
(Nalband & Awadh, 2017). The compensation package offered to young Saudi graduates is
approximately around 50,000 SAR to 1, 50,000 SAR per annum. The company offers 8 month
practical and theoretical training for the graduates. On completion of training, the qualified
trainees will be absorbed for the full jobs. This is known as the Rowad program which remains
linked to the long term objectives of the bank which included providing opportunities for career
to the newer generation of the banking leaders of Saudi Arabia.

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The senior expat managers in NCB are approximately paid in the range of 202,907 -3
00,000 SAR per annum. The expats managers lives in a country different from the one in which
they are brought up. The period of residency would be long term and permanent.
As far as the compensation packages are concerned, there are various people are keen on
knowing about the amount the expats earns in Saudi Arabia. The biggest determining factor for
the job has been the nationality (Raheja & Bano, 2016). Asians or Africans have lowest salary,
the Arab nationals have medium level salary while it is highest in case of Americans and
Europeans. Thus the salary of the expat laborers from the developing countries approximately
ranges between 850 to 4000 SAR per annum
Focus on Base Salary and Non-Financial Benefit:
It has been found that the base salary of Saudi Arabia ranges from a minimum salary of
10,769 SAR each month to a maximum salary of about 35,211 SAR each month. The median
salary is however fixated at about 19,613 SAR which implies that close to 50 percent of the
people working in the Banking sectors are receiving a salary lesser than 19,613 SAR while the
other half is getting a salary over 19,613 SAR.
The non-financial benefits of NCB includes competitive packages, greater incentive and
premium quality healthcare facilities (alahli.com, 2019) . As a part of the competitive package
the competitive salary scale acted as the basis of the comprehensive benefit package put across
by the firm. As far as the great incentives were concerned, NCB offered additional incentives
for the eligible employees. The details remains outlines in job offers put across to selected
candidates. NCB also provides the employees with benefits of premium healthcare that provided

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the employees with higher quality of healthcare programs covering both the despondent and the
employees.
Conclusion:
On a concluding note, it can be stated that corporate strategy of the National Commercial
Bank (NCB) puts forward both intrinsic and extrinsic benefits that has acted as a motivating
factor for the employees. NCB always considered the employees as their most vital assets which
is also a secret to the success and longevity and hence considered various employee development
initiatives. The fresher however receive a minimum compensation package along with the
benefits of a compensation program. The expat managers however receive the maximum
compensation while the expat laborers of Asia receive minimum compensation. The company
also provides various non-financial benefits to its employees.

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References: 0.0529377 0.0529377
Aamir, A., Jehanzeb, K., Rasheed, A., & Malik, O. M. (2012). Compensation Methods and
Employees' Motivation (With Reference to Employees of National Commercial Bank
Riyadh). International Journal of Human Resource Studies, 2(3), 221.
alahli.com, (2019). Retrieved from
https://www.alahli.com/en-us/about-us/Careeralahli/Pages/default.aspx
alahli.com, (2019). Retrieved from
https://www.alahli.com/en-us/about-us/Careeralahli/Pages/Work-in-Branches.aspx
Folléa, G. (2016). Donor compensation and remuneration–is there really a difference?. ISBT
Science Series, 11(S1), 3-9.
Nalband, N. A., & Awadh, M. A. (2017). Employer branding practices in Saudi Arabian banking
sector. Journal of Management Research, 9, 31-48.
Raheja, D., & Bano, B. (2016). A Study of Employee Benefits at Leading Banks in Kingdom of
Saudi Arabia. ANVESHAK, 5(2), 169.