Human Resource Implications of Faysal Bank’s Move to Islamic Banking: A Strategic Overview

Abstract

This research explores the human resource (HR) implications of Faysal Bank’s transition from conventional banking to Islamic banking, focusing on the impact of shariah compliance, change management activities, competitive positioning, and training and development on employee performance. This research also assesses the moderating effect of organizational culture on this relationship. In this research, data was gathered using a closed-ended questionnaire through a quantitative research method from 217 employees of Faysal Bank drawn from different departments. The study also shows that each of the independent variables affects the level of performance and that competitive positioning and change management activities have the most consistently strong impacts. Training and development stand out as essential for preparing the personnel for performing technical and espoused cultural behaviors specified by Shariah. Shariah compliance plays the key role in emphasizing the correspondence between employee objectives and customer requirements as well as current market shifts. Organizational culture being a variable moderates the relationship between the formulated HR strategies and employees’ performance through enhancing their trust, engagement and encouragement of Islamic values. Therefore, the perfect message regarding the best supportive ideas of the HR strategies also underlines that the cohesiveness of the organizational culture would help the employees get prepared and produce the highest level of workforce during the change process of the organization. This research adds to the existing literature on Islamic banking transitions by presenting useful ideas for the consideration of counterparts in other organizations, government officials and policy shapers, and financial organization similarly transitioning. This research also points to the need for aligning strategic HR practices with the company cultures to gain sustainable performance within volatile markets.