HRM-Final

Human Resource Management Practices of Public Banks in Bangladesh

Abstract

HRM has been much talked about and written about in recent years. Human resource

department is an essential part of Banks in Bangladesh. An organization is valueless without its

manpower/human resource. Human resource is, the most powerful element/key of an

organization.

Purpose:This paper sets out to explore the Human Resouces Management pracites in Public

banks in Bangladesh, specially in Sonali Bank Limited. It briefly discusses the literature aboutall

the activities that come under the banner of HRM in Sonali Bank Limited.

Finding: This Paper discuss about current and previous all kind of Human Resource activities of

Sonali Bank Limited and other public banks in Bangladesh. By focusing on the HR activities this

paper describes the real phenomena and functions of HRM practices of public sectors in

Bangladesh and found that their recruitment and motivation strategies need to be redesigned.

Originality/Value: This report is based on both primary and secondary data. Initially, the work is

started with data those were available at Company’s Annual Report and company’s news letter.

Moreover, it becomes helpful to gather some more information from the website of the company.

Information regarding HRM practices are collected from interviewing with the HR Manager,

AGM, senior officers.

Research Limitation: This report focuses on Human Resource Management Practices of public

banks in Bangladesh, lack of knowledge and experience, lack of communication, due to shortage

of time information was not collected in details from the personnel of Public Banks.

Keywords: Human resource, Sonali bank, public sectors.


Introduction

The effective performance of an organization depends not only on the available technical

resources, but also on the quality and competence of its employees as required by the

organization from time to time. The difference in the level of performance of two organizations

depends on utilization value of employees. Moreover, the efficiency of production process and

various areas of management depend to a greater extent on the level of quality employee

retention and development. The term human resources refer to the knowledge, skills, creative

abilities, talents, aptitude, values and beliefs of an organization’s work force. The more

important aspects of human resources are aptitude, values, attitudes and beliefs. But only a few

companies in Bangladesh have started putting Human Resources Management systems in place

that support this philosophy. Employee satisfaction is a prerequisite for staff retention.

Organizations with higher staff retention rates are naturally better at retaining knowledge, which

can lead to better performance and profit for the business. Improved employee satisfaction

reduces the cost of staff turnover, builds brand loyalty with staff and positions the company as an

employer of choice that attracts talented people to the organization. It is very important for

management to have knowledge about the ways the employees are motivated. Sometimes it may

be by monetary incentives or by internal factors like recognition and challenge at work.

Human resources constitute the most important component of modern organizations. The

accomplishment of organizational missions and objectives depends, to a large extent, on having

right persons in right positions as well as the commitment and contributions of those involved. In

the age of knowledge economy, human resource is considered as the most important resource of

the organizations and it became decisive for success of any organization (Moyeen & Huq 2001;

Schuler 1990; Werther & Davis 1996). Human resource management (HRM) refers to the


policies and practices including human resource planning, job analysis, recruitment, selection,

orientation, compensation, performance appraisal, training and development, and labor relations

(Dessler 2007). The purpose of human resource management is to improve the productive

contributions of employees and provide competitive advantage to the organizations (Werther &

Davis 1996). It is well recognized that an organization enriched with committed, motivated,

talented, and competent human resource can achieve any kind of challenging goals. Success of

managers in the new century would absolutely depend upon their capabilities in managing

human resources (Budhwar & Debrah 2001).

There are about fifty local banks in Bangladesh totally. Most of these banks are private

commercial banks and specialized banks except for four nationalized commercial banks. The

banking sector alone accounts for a substantial share of assets of the financial system. The

efficiency of national investment depends on the complementary roles of both the private and

public sectors and this financial sector requires a highly skilled manpower and quality

information to undertake this vast range of tasks. For banks in Bangladesh to survive in a very

competitive environment, they need to design effective human resource (HR) practices that

encourage the high performance of employees. It seems that there is a gap in the empirical

knowledge available about the effects of HRM practices on turnover of employees in the

organizational context particularly employee turnover in banks in Bangladeshi context from the

perspective of managers. This study finds out which variables causing employee turnover and

how they impact employee intention to leave. In addition to this, the study also focuses on

various HR practices in the banking industry. Human resources constitute the most important

component of modern organizations. The accomplishment of organizational missions


andobjectives depends, to a large extent, on having right persons in right positions as well as the

commitment and contributions of those involved.

Human resource management practices can contribute to superior productivity directly by

finding better and more efficient ways to achieve objectives and indirectly by improving the

quality of work life for employees (Werther & Davis 1996). Effective HRM practices can

achieve high productivity and corporate financial performance, low scrap rate, and low

employee turnover (Arthur 1994; Huselid 1995). Proper human resource management practices

such as incentive pay, teams, flexible job assignments, employment security, and training can

improve productivity enormously (Ichniowski, Shaw & Prennushi 1997; Katou & Budhwar

2007).

HRM practices in Bangladesh

Human Resource must be sufficient to ensure the healthy operation of the organization,

whether it is a business firm, a government agency, a professional football team or a University.

Toward this objective of continuing healthy operations,’ the organization requires human

resource planning. Human resource planning is one of the most important elements in a

successful HRM program. Specifically, human resource planning is the process, by which an

organization ensures that it has the right number and kinds of people, at the right places, at the

right time, capable of effectively and completing those tasks that will help the organization

achieve its overall objectives. Human resource planning then translates the organization's

objectives and plans into the number of workers needed to meet those objectives. Without clear

cut planning, estimation of an organization human resource need is reduced to mere guesswork.

Human Resources department is an indispensable part of an organization to achieve its

objectives. To improve the HRD, it takes proper planning and managing that is human resource


management to be followed. HRM means concern with the people dimension in management.

Since every organization is made up of people, acquiring their services developing their skills,

motivating them to high levels of performance and ensuring that they continue to maintain their

commitment to the organization are essential to achieving organizational objectives.

In the past, HR role was concentrated to hiring firing and letter issuance-dispatching-

filing stage. Now it has started to perform more than that. Such as Employee motivation,

Employee development, Employee retention, facilitating organizational development initiatives

etc. and thus contributes to the achievement of organizational goals. These value added job has

just begun in BD. For a good tomorrow, this is the starting point. Bangladesh is a developing

country with significant socioeconomic development opportunities. To maximize the outcome

from those opportunities, business organizations need to attract, retain and manage their human

resources effectively by managing their expectations effectively. Studying HRM practices in

Bangladesh and how cultural and contextual issues affect them can benefit Public Companies in

different ways.

HRM practices have been researched in Bangladesh from different perspectives. A

researcher explored HRM practices of 24 small enterprises operating in Dhaka. He identified that

in case of recruitment, personal contact was the primary means (58%) followed by advertisement

in newspaper (21%), walk-in (13%), and company notice board (8%). All the enterprises, except

one, used work sample test and interview for the selection of employees. On-the-job training was

observed to be the most widely used one. Most of the enterprises (87.5%) paid one or more types

of allowances in addition to salary. (Rab)

Another research examined the roles of human resources, and infrastructure in the

industrialization process of Bangladesh. The observation was that ineffective human resource


management was one of the major problems faced by industrial sector of Bangladesh. Most of

the HRM practices such as HR planning, recruitment, selection, promotion, performance

appraisal, compensation, incentives, and industrial relations were not performed properly in

industries (Shelly, 1994). Another study showed that the transformation of personnel

management into human resource management. Based on different empirical and theoretical

studies conducted in the western world, the authors distinguished between personnel and human

resource management. Another researcher (Ahmed, 2001) discussed about the linkage between

human resource management and corporate strategy. He also revealed that corporate strategies

developed by Michel Porter such as cost leadership, differentiation, and focus strategies had

significant impact on HR strategies and practices.

A study of HRM practices on 92 medium and large business enterprises (public and

private sector) located in Dhaka, Bangladesh. They found that only 62% of surveyed

organizations had an HR/IR department. About 96% organizations had training programs. 91%

of organizations had performance appraisal system and similar percent of organizations had a

system of rewarding the good employees. The least prevalent practice among the surveyed

organizations was employee pension plan. The researchers inferred that union status (presence of

unions) was associated with some HRM practices and firm’s size was found as an important

predictor of some of the HRM practices. (Moyeen, 2001).

In Bangladesh HR planning generally prescribes HR strategies which define what an

organisation wants to do in the longer term to address critical HR issues and to develop and

implement policies, practices and processes that will further the achievement of its business

goals and meet the needs of its stakeholders. Human resources planning constitute the most

important component of modern organizations. The accomplishment of organizational missions


and objectives depends, to a large extent, on having right persons in right positions as well as the

commitment and contributions of those involved. This is why human resource management has

acquired a growing significance in current organization theory and practice in Bangladesh. As a

matter of fact, a sound and effective human resource management is being seen as the most

significant variable that determines the performance of an enterprise. Thus theorists and

practitioners alike attach a considerable importance on the need for ensuring an efficient and

effective use of proper Human Resources Planning. In Bangladeshi aspects HRM planning show

the logical relationships between various elements of human resource management and

underscore the importance of integrating them with the overall framework of the organization.

(Huda, 2007)

The matter has gained even more prominence in the recent conceptualization of human

resource management in Bangladesh. Better known as Strategic Human Resource Management

(SHRM) planning, it emphasizes, among other things, the following: (i) that it is human

capability and commitment which distinguish successful organizations from others; (ii) that

managing human resources is a matter of truly strategic importance; (iii) that human resource

management is an activity which is to be owned by all managers; and (iv) that the key levers

must be internally integrated with each other and externally integrated with the organizational

strategies. Thus the current notion of human resource management goes beyond simple emphasis

of the role of human factor and indicating for integrating personnel functions with general

strategic framework of the enterprise. Bangladesh provides a typical case where the objective of

developing a sound and rational system of human resource management remains illusory.


Background information about Public Banks in Bangladesh

The banking system of Bangladesh is dominated by the 4 Nationalized Commercial

Banks In which 3 is totally controlled by government and 1 (Rupali Bank) bank is controlled by

both government and private sector. The nationalized commercial banks are:

Nationalized Commercial Bank of Bangladesh:

Sonali Bank

Agrani Bank

Rupali Bank

Janata Bank

Sonali Bank LimitedSoon after independence of the country emerged as the largest and

leading Nationalized Commercial Bank by proclamation of the Banks' Nationalization Order

1972 (Presidential Order-26) liquidating the then National Bank of Pakistan, Premier Bank and

Bank of Bhwalpur. As a fully state owned institution, the bank had been discharging its nation-

building responsibilities by undertaking government entrusted different socio-economic schemes

as well as money market activities of its own volition, covering all spheres of the economy.

The bank has been converted to a Public Limited Company with 100% ownership of the

government and started functioning as Sonali Bank Limited from November 15 2007 taking over

all assets, liabilities and business of Sonali Bank. After corporatization, the management of the

bank has been given required autonomy to make the bank competitive & to run its business

effectively. The corporate head quarter of the bank is located at Motijheel, Dhaka, Bangladesh,

the main commercial center of the capital.Sonali Bank has an authorized capital of BDT 10

billion and has BDT 9 billion of paid up capital. With 1193 branches including two overseas


branches, 3 subsidiaries and 3 representative offices, Sonali is by far the largest commercial bank

of the country.

Table 1.1: Background information about Public Banks in Bangladesh

Industry Type Public Banks of Bangladesh

CompanySonali Bank

LimitedJanata Bank

LimitedRupali Bank

LimitedAgrani Bank

Limited

Interviews

General Manager,

Senior Officer, Officer

Manager, Senior Officer,



Main Services

General Banking, Deposit

Schemes, Credit Schemes, Industrial Finance,

International Banking

Retail/Personal Banking, Credit programs, Micro

Enterprises & Special Credit, Rural Banking / Credit Program,

International Banking, Foreign Remittance and NRB Banking

General Banking, Credit Facility,

Foreign Currency Account,

Services to the society

Personal Banking, Corporate Banking, Business support,

Agri & Rural Banking, SME

Banking, Banking for NRBs,

Merchant Banking, Islami Banking

Establishment year

1972 1972 1972 1972

Number of Employees

21839 15109 4293 13269

Total Asset ( US $) 8129 million 4315 million 1064 million 3311 million

Average Age 40 42 42 40

Branches 1193 872 492 876

Average Education

Bachalor degree Bachalor degree Bachalor degree Bachalor degree

Average monthly salary

25000 25000 22000 22000

Number of Strike Day

N/A N/A N/A N/A

Employee Turnover Rate

6 % 6 % 9 % 8 %


Agrani Bank Limited, a leading commercial bank with 876 outlets strategically located in

almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and

hundreds of overseas Correspondents, came into being as a Public Limited Company on May 17,

2007 with a view to take over the business, assets, liabilities, rights and obligations of the

Agrani Bank which emerged as a nationalized commercial bank in 1972 immediately after the

emergence of Bangladesh as an independent state. Agrani Bank Limited started functioning as a

going concern basis through a Vendors Agreement signed between the ministry of finance,

Government of the People's Republic of Bangladesh on behalf of the former Agrani Bank and

the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect

from 01 July, 2007.Agrani Bank Limited is governed by a Board of Directors consisting of 13

(thirteen) members headed by a Chairman. The Bank is headed by the Managing Director &

Chief Executive Officer; Managing Director is assisted by Deputy Managing Directors and

General Managers. The bank has 11 Circle offices, 25 Divisions in head office, 54 zonal offices

and 876 branches including 27 corporate and 40 AD (authorized dealer) branches. The total

number of employees is 13269.

Rupali Bank Limited was established in a newly independent country of Bangladesh as

a Nationalized Commercial Bank in the year 1972. RBL emerged through merger of three

comparatively smaller private banks of the then East Pakistan. The three banks namely, Muslim

Commercial Bank Ltd. Australasia Bank Ltd. and Standard bank Ltd. with all their assets,

liabilities, benefits, rights, powers, authorities, and obligations, merged into one by the

Bangladesh Bank (Nationalization) Order 1972 ( P.O.No. 26, 1972). Rupali Bank Ltd. came out

as the largest public limited banking company of Bangladesh on 14 December, 1986. 93.11% of

shares are owned by the government while the rest 6.89% are owned by private share holders.


Rupali Bank operates through 492 branches. It is linked to its foreign correspondents all over the

world. The Corporate Head Office of the Bank is located at Dhaka with one local office (Main

Branch), four corporate branches at Dhaka, one in Chittagong and twenty-five zonal offices all

over the country. The total number of employees is 4293.

Janata Bank Limited is one of the biggest commercial banks of the country. It’s a state

owned bank that was formed just after liberation of Bangladesh. In fact it was a combination of

two smaller banks namely United Bank Limited and Union Bank Limited. Janata Bank Limited,

one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000

million (approx. US$ 283.33 million), paid up capital of Tk. 5000.00 million, reserve of

Tk.10823.01 million and retained surplus Tk. 5167.18 million. The Bank has a total asset of Tk.

345233.92 million as on 31st December 2010. Immediately after the emergence of Bangladesh

in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata

Bank. On 15th November, 2007 the bank has been corporatised and renamed as Janata Bank

Limited. Janata Bank was converted to a limited company on 15 November, 2007. JBL provides

all services of a commercial bank. Moreover it serves its clients with most modern banking

products. Janata Bank Limited operates through 872 branches including 4 overseas branches at

United Arab Emirates. It is linked with 1202 foreign correspondents all over the world. The

Bank employs more than 13 (Thirteen) thousand persons.


Methodology of the study

Scope and Objective of the Study

This report is sort of case study, which means it is the illustration of the real scenario of the

selected organization. So the scope of this report is limited. The first scope of this report is to

have practical experience about how a research is done in the business organizations. The report

has the scope to cover different aspects of HRM, which includes HR practices like recruitment,

selection, and staffing procedures, selection devices, job analysis, job design, training &

management development and compensation and benefit administration. It was part of my

academic program to learn HR practices of Public Banks to understand real life scenario of

business. Thus, this report does not go into deep of the HRM activities of the selected company,

it is beyond this report’s scope to make concentrated suggestions or recommendation other than

narrating the observation and reach to a conclusion.

The objectives of this study are as follow:

To know about the Human Resources Department of Public Banks specially Sonali Bank

limited. To know about the functions and practices of HRM.

To identify the impacts of HRD on the Public Banking Sectors.

To identify the current problems of HRD.

To compare the current HRD system with international standards.

The study is qualitative in nature. In-depth interview of the company personnel, various

official documents and brochures were used as instruments to collect information. The study

contains a huge amount of data and information. In preparing this report, we had to follow some

methods to collect information. This report is prepared according to the

Primary data and information


Secondary data and information.

Primary data and information: For collecting primary data and information we have

followed interview method. We have collected our primary information through face-to-face

interview with the employees of Public banks as well as the former manager of the Sonali Bank

who are currently working in different private Banks. Their names and designations are Mr.

Mohabbat Khan, Director, NCC Bank, Mr. Kallal Chakrabarti, Branch Manager, Bank Asia,

Sheikh Mujib Branch, Chiittagong. We have interviewed him over phone.

Secondary data information: For secondary data and information we have gone through

different types of publications and published data. These are

Various publications of Public banks and Human Resource Management

Annual reports.

Various reports were collected from internal bodies and library.

Information collected from company websites.

Limitation of the study

Despite the diligent efforts that have been put behind preparation of the report, we have

only succeeded to skim the surface of the vast ocean of the subject. Though it was very

challenging to prepare a report on human resource management of Public Banks. We

encountered a major problem during the study. This problem was our limited exposure. 'Some of

the company personnel were not helpful in providing information which they consider as

confidential.


Results and Discussion about the HRM Practices of Sonali Bank

Recruitment

An effective approach to recruitment and selection can help an organization to maximize

the competitive advantages by choosing the best pool of candidates quickly and cost efficiently

(Kleiman, 2005). But successful recruitment and selection can be costly and time-consuming.

Still, recruitment and selection is crucial for a business, because unsuccessful recruitment and

selection can be responsible for the failure of the business. Thus the goal of a recruitment and

selection program is to attract highly qualified candidates and ensure person-job fit (Fisher,

Schoenfeldt & Shaw, 2004; Kleiman, 2005; Mathis & Jackson, 2005).

The Recruitment and selection is a long process for any company and expensive.

However a wrong recruitment and selection may cause the company to death. The world is

changing every moment, so as the process of recruitment and selection criteria of Sonali Bank.

There is quite a change between the recruitment processes of the Bank since 1972 till now. From

1972 to 1990, the only media that the Bank used to circulate its vacancy advertisement is to print

the circulation through local newspaper. Between 1991 and 2010, the bank added some more

media to advertise its job vacancies. The best media that the bank uses for their recruitment

process is Internet. The bank has its own website career portal site, where they publish their new

job openings to let people around the country knows about the positions they are looking for and

the qualifications that the applicants must possess. The Bank is also using third party career

website from the late 20’s to reach the job seekers very quickly. There were no internet services

available in Bangladesh and the Sonali Bank was not computerized before 1991. So, it was

difficult for them to provide this privilege to the job seekers to drop their CV online. Until 1991,

There was no proper way of recruiting the employees for the Sonali Bank. Banker’s Recruitment


Center used to collect the CVs for the recruitment of the applicants and the selection used to be

done by the association. The Sonali Bank Limited changed the process from 2006, when the

bank recruited employees for their IT and technical department with the help of BUET.

Table: 2.1: The Table on the Recruitment Criteria of Sonali Bank Limited

Recruitment Criteria 1971-1980 1981-1990 1991-2010

Overall

Industries

Overall

Industries

Overall

Industries

1Advertisement in the Media Local Newspapers

Local

NewspapersLocal Newspapers

2

Professional Association

Bankers

Recruitment

Committee (BRC)

Bank Recruitment

Association

Bank Recruitment

Association,

BUET, IBA

3

Curriculum Vitae

Do not take direct

CVs but get it

through BRC

Do not take direct

CVs but get it

through BRC

Accept Direct CV

Online or by post

with proper bank

draft copy

4Internet N/A N/A

BDjobs, JobsA1,

Company website

In Sonali Bank Limited, there is a separate HR department that normally deal with

preparing the new openings of the job vacancies, prepare the job description, include the required

qualification of the candidates and prepare the advertisement. Most of the resume collection and

short listing is outsourced either through the experienced career agencies, such as BDjobs,

A1jobs, etc. or with the help of BRC, BUET or IBA.

Sonali Bank also provides internal job circulation before posting it in the newspaper for

recruiting from the general public. They most of the time try to fill their higher positions within


their existing employees through promotion or relocation. Manager recommendations really

work strongly for the employee to get shortlisted and then the Human Resource Department

arrange an interview with the employee to check his/her job fitness. If they get the suitable

person for the vacant position internally, they do not go for advertising their recruitment.

Employee referral is highly ignored in the Sonali Bank Limited from the beginning till now.

Selection Criteria

Selecting an employee is a very crucial element of a Strategic HR Practice for the Bank. Wrong

selection of a person can cause the Bank to lose its goodwill as well as the profit. Selection is a

long process for the Public Bank. More than 1 million people apply for a position opened, from

which only a few people get selected.

In the Sonali Bank Limited, the selection criteria start with the initial screening. In the

previous stage of the operation of Sonali Bank, prior to 2000, the bank outsourced to initially

screen the resume to select the candidates, suite for sitting in the written test. The work used to

be done by Bankers’ Recruitment Center. They used to check mostly the academic

qualifications, previous work experiences and their other activities. From 2000, the Bank started

to do the initial screening with the help of IBA. In 2006 Sonali Bank recruited a number of their

IT and technical support employees from BUET through the help of BUET. They circulated the

job vacancies in the BUET and interested candidates applied for the post. IBA Professionals help

the Bank to shortlist the applicants and took written and verbal test from the candidates and

found the best suite for the Bank. Finally the candidates gone through the Board interview with

the Bank and the person selected for the positions got the letter of appointment. From 2006, the

Bank started to do the initial screening using its own domestic branch employees. In 2009, over


250 employees of all the different branches around the city screen the resume of the interested

applicants and shortlisted the people that meet the academic qualifications and the experience

needed to fill the vacant position.

After the initial screening, the candidates used to go directly for the interview until 2000.

Table 2.2: The table on the Selection Criteria of Sonali Bank Limited

1971-1980 1981-1990 1991-2010Selection Criteria

Overall IndustriesOverall Industries

Overall Industries

1 Initial Screening Done Via Bankers’ Recruitment Center(BRC)

Done Via BRC BDjobs, BRC, IBA, BUET and the Bank itself

2 Employment Test Person Job Fit written Test

Person Job Fit Written Test

Personality Test, Job Fit Written Test

3 Interview Board Interview Board Interview One on one interview, Board Interview

4 Medical Check Civil Servant, Bank’s own Physician

Civil Servant, Bank’s own Physician

Civil Servant, Bank’s own Physician

5 Background Investigation and Reference Check

Crime Record Check through City Corporation, No Clear evidence of Reference Check

Crime Record Check through City Corporation, No Clear evidence of Reference Check

Crime Record Check through City Corporation, Reference Check through calling.

6 Selection Decision BODs take the final decision of selection

BODs take the final decision of selection

BODs take the final decision of selection

However, there is a change in this criterion. The Bank organized a personality based test

that each and every shortlisted candidates need to sit for. In this test, they ask several Multiple

Choice Questions that they need to answer in a given particular time. Based on those MCQs, the

candidates get screened for the second time and the candidates that get selected in the criterion,


go for the written test to prove their knowledge, skills and analytical expertise. The Bank then

arranges 2 interviews for the candidates to be selected for the position. The first interview is with

the HR personnel asking mostly about the general knowledge and the industry related questions,

and the final interview is with the BOARD. In this interview, mostly the candidates are given

with a situation based case to deal with and check how the candidate reacts on that.

After the final interview with the board of directors, the final decision of selection is

chosen by the consultation of the Head of HR, BODs and the Department Head.


Training and Development

Training Criteria 1971-1980 1981-1990 1991-2010

Overall

Industries

Overall

Industries

Overall

Industries

1 On-the-job Training

21 days

orientation

program

21 days

orientation

program

21 days

orientation

program

2 Class room Lectures N/A

Sonali Bank

Staff College,

HRD Training

Cell

Sonali Bank

Staff College,

HRD Training

Cell, BIBM

Training

3 ConferenceAnnual General

Meeting

Annual General

Meeting

Annual General

Meeting

4 Audiovisual Techniques N/A N/A

Training on the

banking software

use and updates

5 Job Rotation

Assign

employees to

different

workstation to

develop skills

and knowledge

Assign

employees to

different

workstation to

develop skills

and knowledge

Assign

employees to

different

workstation to

develop skills

and knowledge

Table:2.3: Table on the training and development criteria of Sonali Bank Limited

A competent workforce underpins the success of any organization. It is crucial that staff possess

the knowledge, skills and competencies required for optimum performance. Recognizing the

training, development and learning needs necessary to equip staff with the capabilities required


to contribute to business success and progress their careers is therefore key. There are quite a lot

of changes are easily noticed in the training and development criterion of Sonali Bank. From

1972 to 1980, the Bank used to provide on-the-job training by offering 21 days job orientation

under different sections of the department that the staff is appointed to. The Bank is still

following the same method of providing on-the-job training. However, there are quite a few new

changes since 1981 till 2010. Between 1981 and 1990, Sonali Bank started its own training

institute, named Sonali Bank Staff College and also HRD training Cells. The Bank started to

provide all the necessary classes for the employees needed to make them competent enough.

From 1991 to 2010, Sonali Bank also made arrangement with BIBM training center to provide

various trainings to the Sonali Bank employees to increase their knowledge and skills. From

1972 till now, annual general meeting is working as a strong tool to develop the knowledge of

the employees and share each other’s opinions. Sonali Bank is providing training to its

employees about the technical advancement of their products, software usage and updates by

using the help of audio-visuals. The most common training provided by the Sonali Bank to its

employees is the job rotation. The purpose of this training is to make the employee multi-task

oriented.


Promotion Criteria& Performance Appraisal

Promotion and appraisal Criteria

1971-1980 1981-1990 1991-2010

Overall Industries

Overall Industries

Overall Industries

1 Length of Services

Promotion is based on the seniority rather than the merit

Promotion is based on the seniority

Promotion of the employee depends 15% on the length of their service

2Recommendation by Direct Supervisor

N/A N/A N/A

4

Annual Confidential Report (ACR)

Based on Merit ACR carry 50%

of the total weight of Promotions and appraisal

ACR carry 50% of the total weight of Promotions and appraisal

ACR carry 50% of the total weight of Promotions and appraisal

Right Attitude and ValuesKnowledge and Skills

5 Performance EvaluationIs based on the personal Profile of the employee

Is based on the personal Profile of the employee

Done through Promotion committee of Banks and personal File

Table 2.4: Table on the promotion and performance appraisal criteria

In the Sonali Bank, no promotion takes place through recommendation by direct supervisors.

The employees need to sit for an exam for the promotion. The score of the written test carries

50% of the total weight of promotion and appraisal. This ACR exam mainly focuses on the merit

of the employees, their right attitudes and values, and finally the knowledge and skills about

Sonali Bank as well as the industry. Employees’ length of service also carries 15% of the weight

since 1991. Before 1991, In the Sonali Bank, the promotion was based on the seniority rather


than the merit. For evaluating the employees’ performance, Bank manager used to take

employees personal profile into account only. From 1991, Bank does not merely rely on the

personal profile of the employees. It carries only 15% of the total weight. The appraisal is done

through the promotion committee of Banks. This special committee consists of 4 people, who are

appointed by the Bangladesh Bank and assess thoroughly all the records of the employees. The

report from the promotion committee of Banks carries 10% of the weight for promotion.

Supervisors’ appraisal also carries 15% of the total weight. The employee who will make the

highest score, will get the promotion.


Compensations, Benefits and Industrial Relation

Compensations, Benefits and Industrial Relations

1971-1980 1981-1990 1991-2010

Overall Industries Overall Industries Overall Industries

1Pay structure of the government of Bangladesh

National Pay scale National Pay scaleRevised National Pay scale 2009

2House Rent Allowance

50% of the Basic Salary



3 Medical Allowance 25% of the Basic 25% of the Basic 25% of the Basic

4 Leave with pay Annually 20 days Annually 20 days Annually 20 days

5Children Education Facility

According to the company policy



6 Sick Leave 15 days per Annum 15 days per Annum 15 days per Annum

7 Maternity Leave 3 Months 3 Months 3 Months

8 BonusEquivalent to the one Basic Salary

Equivalent to the one Basic Salary

Equivalent to the one Basic Salary

9 Loan FacilityProvide loans for motorcycle and housing

Provide loans for motorcycle, car and housing

Provide loans for motorcycle, car, computer and housing

10 Labor Union

Has great influence on the Human Resources and Banking Operation



Table 2.5: Table on the compensation, benefits and industrial relations criteria of Sonali Bank.


Sonali Bank Limited is following the national pay scale set by the government to pay the

basic salary to its employees. From the 2009, the pay scale of the Bank has changed according to

the revised pay scale of the national pay scale. Sonali Bank pays housing allowances to all its

employees, which is 50% of their basic salary and 25% of the basic salary as their medical

allowances. Each employees of the Sonali Bank are entitled to get 20 days of paid annual leave

after completion of successful year of services. Paid sick leaves are set not more than 15 days per

annum. And the company provides maternity leave of total 3 months to the pregnant ladies

employees. The maternity leave is normally taken 6 weeks of leave before the delivery of the

baby and 6 weeks of leave after the delivery of the baby. Male employees are entitled for 5 days

of paternity leave during the birth of his child.

The Bank provides 2 festival bonuses and one annual bonus for all the employees. The

amount of each bonus is equivalent to one basic salary of the employee. There is no performance

based bonus offered by the Sonali Bank Limited since 1972 till 2010. The bank is also providing

other fringe benefits to its employees, such as loan facilities. The company gives loan to its

employees with a very reasonable interest in return. The loans that the employees can applied for

are housing loan, car/motorcycle loan and also computer loan. The computer loan is included in

the list since 2004.

Employees of the Sonali Bank have given the right to join the labor union according to the

banking and labor law. This union work to ensure the fair treatment to all the employees. They

work for the right of the employees. In the Bank, there must not have more than 2 unions. The

Human Resources and the banking operation is highly influenced by the labor unions. Banks

labor unions are very strong.


Future Implications and Conclusion

HRM in the Public Bank in Bangladesh can be streamlined further for effective public

administration for enhanced development and efficient service delivery. However, for that to

happen, focus should be devoted on the issues of decentralizing the personnel management

system, reforming and strengthening the central HRM agencies (i.e., MoE and PSC) through

securing ethics and professional integrity and increasing the pay scale of the employees.

Emphasis should be placed on career management issues so that eligible candidates can be

recruited, retained and rewarded and they are motivated and find it attractive and eventually

perform well in delivering services. Commenting on the changes required in PHRM, a recent

UNDP report states that “HRM (in Bangladesh) should change (a) from generalist traditions to

specialized generalists, with strengthening of expertise and openness; (b) from seniority-based

promotion, to promotion based on performance evaluation and competence, using fair and

transparent competition; (c) from inadequate appraisal and merit concepts, to the strengthening

of individual performance management through more articulated review systems; and (d) from

frequent and often unpredictable rotation of posts to new practice, strengthening of specialization

through the career development programs” (UNDP, 2007).

It has been uncovered that the overall status of HRM practices in the public Banks of

Bangladesh is moderately satisfactory whereas the overall status of HRM practices in the private

Banks is found to be satisfactory. It is unearthed that significant difference is prevailing between

the public and the private Banks of Bangladesh with respect to the overall status of HRM

practices where the private banks are in significantly better position. The following implications

may be useful to consider in improving the overall status of HRM practices of the public and the

private banks of Bangladesh.


Implications for the future betterment of the HRM practices in the Public Banks manpower

requirement data should be maintained, HRIS should be introduced., Succession planning should

be conducted, HR policies should be changed with respect to business strategies, Job analysis

should be conducted, Fairness in selection process should be upheld, Psychological attributes

should be focused in selection, different sources of recruitment should be utilized, Extensive

training and development programs should be offered, TNA should be conducted accurately,

Further training and education should be encouraged, Sufficient budget for training should be

allocated, Performance appraisal system should be effective, Compensation practices should be

totally restructured, Industrial relations should be strengthened, Wide-ranging training and

development should be continuously offered, Financial and non-financial benefits should be

extended.

As of the in depth study in the public banking sector and also studying the HRM practices of

some private Banks in Bangladesh, what we have found is that, there are plenty of traditional

HRM practices that is followed by the public banks of Bangladesh need to be revised according

to the human resource environment changes. They should focus more on the training and

development of their human resources. This is the only way that they can make these human

resources as human capital. Sonali Bank also needs to try adapting some HR strategies from the

international public banks to maintain its share in the market pie and improve its services to the

customers.


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Appendices

Table A: National Pay Scale.


Organogram


Annual Magazine of

Sonali Bank Limited

HRM-Final

Documents

Transcript of HRM-Final