Reference no: EM133305540

Assignment: VNZ Bank is a local bank operating in Vietnam for the last 30 years and have gained the trust of the general population in their banking needs. However, with the emergence of digital banking and the increasing tech savviness of the Vietnamese over the years, VNZ Bank is looking to transform itself into a leading digital bank in Vietnam not only for the local consumers but for the foreign investors looking to invest and set up businesses in Vietnam. This transformation plan is also to expand its local mass market clients as well as penetrate into the market segments for the local high net worth clients. This will increase VNZ Bank's banking deposits and to expand its investment products to cater to different segments of consumers.

VNZ has traditionally been developing its compensation policies based on job-based structure where job analysis of benchmarked positions is undertaken once every 3 years and annual market benchmarking of critical jobs is being carried out. With the shift in business strategy to scale up in its digital banking plans and to expand its client base both locally and regionally, VNZ senior management is looking to propose competency-based internal structure for managerial positions and above in the organisation. Many progressive banks in Asia have already moved to competency-based structure for their managerial job levels in order to recognise the core and functional competencies required by the organisations.

Like many other banks in Asia, VNZ Bank is particularly interested to enhance its cybersecurity capabilities and expertise due to the increasing incidents and its magnitude effect of cyber security compromise and illegal hacking into the banking systems. This is in conjunction with VNZ Bank's ambitious plan to move into digital banking which makes the need for a strong team of cyber-security unit an imperative one.

Question:

(a) Discuss THREE (3) advantages for VNZ Bank to shift to competency-based structure with the view to attain its business strategy in the digital banking growth.

(b) Examine the effect of internal alignment policy of the compensation strategy in VNZ Bank with this shift to competency-based structure. Illustrate this by using examples of competencies that are relevant to VNZ Bank.

(c) Evaluate the significance of internal alignment policy and external competitiveness policy in the pay model concept for the cyber-security job family in VNZ Bank. Base your analysis in view of the lack of benchmark local salary data for this job family as well as the shortage of talents in the local labour market.

(d) Discuss the rationale on how performance-based compensation plans can be used by VNZ Bank to recognise the competency-based performance targets.