INTRODUCTION

ASA, one of the largest sustainable Micro Finance Institutions (MFI) of the Globe has been
working relentlessly to assist the poor and underprivileged people since 1978. At the very
beginning, ASA began to deliver services in the remote village areas in the fields of health,
social awareness and education and provided emergency relief in the aftermath of disasters such
as cyclone and floods by the support of the foreign donors. By 1990 ASA had become
disappointed with these efforts, and change of focus occurred. This time, the spotlight fell on
rural credit.

It is obvious that most poor people have no access to commercial banks. As a result, these
institutions cannot play a role in promoting economic growth and economic empowerment at the
bottom of the pyramid. However by providing small collateral-free loans, ASA is enabling the
poor and upper poor community people to obtain capital so they may engage themselves in
income generating activities. This helps reduce their poverty, and provides them access to
opportunities and markets.

ASA’s Microfinance Model gradually transformed itself to become the globally renowned “ASA
Cost– effective and Sustainable Microfinance Model.” This model is different from other models
and has already been proven as one of the best in the world. It is simple as well as cost-effective.
This cost effective method, from Branch Office to the Central Office ensures ASA’s dedication
towards its mission for reducing poverty. This model has proven itself in different countries in
Asia and Africa.

Although ASA's clients are individuals, there are significant benefits for their families as well.
The majority of ASA borrowers are female, and research has shown that female borrowers are
more likely to devote their income to meeting their family needs. With extra income, borrowers
are able to feed themselves and their families, greatly reducing starvation and malnutrition. This
is of particular importance for children, who are especially vulnerable and lack the ability to fend
for themselves.

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 HISTORY OF THE INDUSTRY

At the very outset the NGOs were not claimed themselves as development agencies. The NGOs
in Bangladesh followed some stages of growth. The community development strategy entered
Bangladesh as early as 1956 in the Pakistan Academy for Rural Development (PARD), at
present in the Bangladesh Academy for Rural Development (BRAD).

There has been an accelerated growth of voluntary organizations in several developing countries
during the recent decades. This is due to an increasing realization in these countries that
voluntary actions have a significant complementary role in social welfare and development
programs. The first generations of NGOs in Bangladesh were engaged largely in relief and post-
World War II rehabilitation and other charitable acts. This was soon followed by reconstruction
work around the theme of community development.

The second generation of NGOs from the late 1960s until the mid-1970s emphasized the
formation of credit unions, co-operatives, and other community-based development projects,
giving more emphasis to micro-interventions in development. The third generation of NGOs in
fact, the bulk of NGOs involved in agrarian reform and rural development programs, jumped up
in the 1980s. These NGOs were results of the initiatives to integrate micro and macro issues into
a more complete framework for tackling problems of ecology and the environment, debt and
structural adjustment issues and policy issues, including agrarian reform and rural development.

PRESENT POSITION OF THE INDUSTRY

NGOs in Bangladesh have played a very significant role in opening up access to credit for the
poor and people in distant areas. Traditional banking had failed to reach the poor since
ownership of collateral was a prerequisite for having access to bank credit. The NGOs in
Bangladesh established, to the contrary, that it is very much feasible to lend to the poor and
ensure good recovery rate, and that such lending did not require collateral in the form of tangible
assets. In the process, a new approach to banking has gained global recognition, and its efficacy
in addressing needs of the poor is widely acknowledged.

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There are 134 micro credit financial institutions (MFI) in the country, which are basically non-
government organizations and provide credit facilities for explicit social agenda to cater to the
needs of the poorest sections of the non-agricultural population.

A rapidly growing segment of the Rural Financial Market (RFM) in Bangladesh is composed of
member-based institutions. The largest member-based institution is the Grameen Bank, the only
formal institution of its type. All others are Non-Government Organizations (NGOs). BRAC,
ASA and Proshika are large NGO-MFIs. Up to June 2002, all the reported NGO MFIs had
disbursed Tk. 187,339.24 million, and the total loans outstanding were Tk. 29,297.05 million.
The number of total active members was 12.70 million, and net savings were Tk. 11,978.04
million.

HISTORY OF THE COMPANY

In 1971, Bangladesh emerged as an independent nation through a bloody war and at a cost of
millions of lives. The country was left behind in a state ravaged by the war and natural disaster,
but populated by a significant number of young people full of hope, energy and commitment for
reconstruction and nation-building. The economy of Bangladesh is largely dependent on
agriculture and still a major segment of population lives in rural areas. During the post-war era,
this economy suffered a huge blow due to the political upheaval and poor control mechanism.
Main constraints were frequent agitations, political unrest and numerous changes of governments
that were too inexperienced to uphold stability and discipline. In such chaotic circumstances,
policy formulation or planning for development was difficult.

The situation even got worse when a famine broke-out in 1974. The economic growth was
hindered and unemployment rate soared. Measures taken by the government were appallingly
insufficient. As the new government failed to meet the challenges, even with overseas assistance,
small non-government organizations emerged over the 1970s to provide relief and rehabilitation
along with community development. The administrative structure, that followed a top-down
approach for development, could not cope with the actual socio-economic reality as the
institutional structures failed to reach the downtrodden people. In those volatile days ASA was

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born in 1978 at a remote village Tapra, under the then Manikganj sub-division about 80
kilometers away from the capital Dhaka.
The founding framework of ASA was aimed at empowering rural landless villagers from the
"bottom up" through "people's organizations". These were run by volunteers who advocated that
a consciousness for solidarity amongst the village poor would lead to collective social action.
ASA has currently over 5.3 million members forming different groups with special emphasis on
saving practice and 21,477 employees engaged in disbursing and collecting loans and savings
deposits.

PRESENT POSITION OF THE COMPANY

MFIs such as Grameen Bank, BRAC and ASA occupy 81% of Bangladesh microfinance market
share. These institutes started their operation pretty early and still dominate the microfinance
market. They have both the most loan portfolios and borrowers. Grameen Bank assumes 35% of
the share in terms of gross loan portfolio and 31% in active borrowers. This is followed by
BRAC whichassumes27% of the share in terms of gross loan portfolio and 30% in active
borrowers. ASA secured the third position in market share assuming almost 20% in both
categories. Other NGO-MFIs assume 19% of the market in both categories in 2009.

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 PRODUCT AND SERVICES

ASA offer to its members a wide range of product through which they can make their situation
better:

 Loan products: Presently, ASA caters two types of loan, these are: Primary Loan and
Special Loan. Primary Loan has a maximum tenure of 12 months with a loan ceiling of
BDT 99,000; While Special Loan has a maximum tenure of 30 months and provides with
ranging from BDT 1,00,000 to BDT 10,00,000.
 Savings products: The Savings Product of ASA is designed in such a manner that it could
address the problems of the borrowers arising out the sudden and unpredicted necessities
and wants for money.
 Loan security & risk fund: ASA designed an innovative Loan Security & Risk Fund
(LSRF) that addresses aforesaid problems efficiently freeing the successors of deceased
debtors from the obligation of repaying unpaid credit.
 Foreign remittance program: The main goal of this service is to deliver the money that is
being sent from the foreign countries to the receivers and helping the poor population as
well as helping the economic development of the country in the process.
 Partnership program: ASA has been assisting the small medium and emerging NGOs of
the country with a view to improve their capability and efficiency so that they could able to
play meaningful role in poverty alleviation.

COMPETITORS: ASA’s main competitors are

 Grameen Bank
 BRAC
 Proshika
 CARE International
 Caritas Bangladesh
 Oxfam

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OBJECTIVE 1: WHAT ARE THE HRM PROBLEMS AND ISSUES FACING BY ASA?

ASA has emerged as one of the largest and most efficient Microfinance Institution in Bangladesh
and has been working relentlessly to assist the poor since the beginning. Like any other MFI in
Bangladesh ASA has been facing some HR related problems and issues as well.

HRM Issues & Problem facing by ASA

ASA is considerably one of the pioneer in the given (MFI) industry having a huge number of
employee base in order to conduct its operation all over the country. Currently ASA has 3154
branches all over the country and it has over 21,477 employees who work relentlessly to serve
the clients. This is obvious that they are facing some HR related issues and problem while
managing these huge number of employees who are actually responsible to meet the demand of
growing economy and the customers as well.

These are the problems that ASA has been facing in recent times-

1. Recruiting the Large Number of Employees:

ASA as an organization needs large number of recruitment since the organization is growing
rapidly due the demand of growing economy. So recruiting the right people for the right place
became the number one problem for them.

We have done a study on the HR policies of ASA and find out that they have been conducted
their whole recruitment process in two steps-

1. Mid-Level & Field-Level Recruitment & Selection Process

2. Top-Level Recruitment & Selection Process

Considering the mid-level and field level recruitment, ASA mostly depends on external sources.
There recruitment and selection procedure for mid-level and field-level candidates of ASA is
given below

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 Advertisement & Collection of CV’s

CV Screening & Shortlisting Candidates

Written Test or Practical Test

Interview

Background Check

Offering Appointment Letter

Figure: Recruitment & Selection Process of Mid-level & Field-level Employees in ASA

Secondly for the top-level recruitment process, ASA also relies on external sources. The
recruitment and selection procedure for top-level recruitment of ASA is given below

Advertisement & Collection of CV’s

CV Screening & Shortlisting Candidates

Interview

Offering Appointment Letter

Figure: Recruitment & Selection Process of Top-level Employees in ASA

Though their HR department has two very distinct strategy to recruit their employees from top to
bottom level, since it’s a growing industry and as an MFI ASA has a very distinct position in the
Bangladesh market context; their recruitment need is increased day by day along with the
candidate’s interest to join in the organization. For an instance they are having over thousand of
resume against a job position which is a hectic job for the HR team to find out the potential
candidates for the potential position through the applications. Sometimes it’s also not possible to

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view all the applications due to the limitation of time. So, it’s becoming a challenge for ASA to
maintain the recruitment process ratio.

The main challenge for the HR department is when the recruitment need to be done with urgent
basis on job requirements and since it’s a growing organization they cannot take decision
instantly or through internal sources cause that may hamper their ongoing reputation in the job
market eventually.

2. Retaining Employees:

Most of the people of us think that the main task of Human Resources is to recruit and employ
new talent within the organization. Nevertheless, the truth is that most HR activities revolve
around retaining existing talent. ASA is not different from the others as well. The second issue
that their HR department currently facing is to retain their existing employees specially those
who is proven to be talented, skilled and productive. Employees are the main key factor for any
organization and like any organization they have invested significant time and money into
ensuring maximum productivity wherever possible. And the key HR responsibility is to protect
this valuable asset means retaining the current employees.

Employee retention is a fine balancing act between company culture, remuneration and
incentives. The HR department needs to provide each employee with the right combination of all
three to satisfy the employee without compromising company interests in the process. They also
need to keep accurate records of these combinations to ensure that the agreed packages are being
delivered to employees

In ASA, salary and remuneration of its employees are determined based on the pay scale or
salary grade of the organization. ASA provides salary and remuneration to its employee’s in two
categories – General Grade and Supplementary Grade. In general grade it includes Executives,
Officer, Senior Officer, Assistant Manager, Senior Manager, Assistant Director And Director.
And in the supplementary grade it includes employees like Driver, Guard, Lift Operator, and
Peon. Other than their salary they also get Housing Allowance, Medical Allowance,
Transportation Allowance, Daily Allowance, Field & Conveyance Allowance, Accommodation
Allowances, Festival Bonus, Gratuity, Provident Fund, Insurance Facilities etc.

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ASA has been working very intensely in order to upgrade their compensation policy for their
employees but still they are lagging behind comparing to their competitors like Grameen Bank,
BRAC in terms of providing compensation to their employees. In addition to that it is obvious
that they are considered as the market leader so when the employees of ASA got the chance to
switch to the better option they always do it. So currently it became their prime concern and
challenge to improve their incentive and benefit plan according to the competitors and retaining
their best talents.

3. Delivering Training and development Opportunities

Training and development program is an essential aspect of employee development. Both for
their own education and also to ensure the best output from the workforce. HR department is
responsible for the implementation of training programs. Some of these programs are designed to
ensure your staff follows policies and procedures while others are used for job advancement. In
some job settings, employees are required to complete certain certification programs

In ASA the selected candidates in both field level and mid-level got to pass a probation period
for one year. Within this one year, the candidates have to go through different type of training
and development program so that they can conduct their daily duties smoothly and also to
enhance their present skills and practical knowledge. After one year, candidates with good
performance will become the permanent employees of ASA. This is their general training and
development process undertaken by the HR department.

The main problem here is ASA is proving same type of trading and development program to
their employees which hasn’t been updated for a very long. On the top of that as they are
growing organization they need lots of employees periodically to run their operation across all
over the country they can’t maintain the quality of training across all he level and also it seems
very difficult for them to measure the outcomes of every training and development programs
including collecting feedback from the trainee which is a very important aspect of any training
and development program.

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OBJECTIVE 2: HRM APPROACHES NEEDED TO BE TAKEN TO ENSURE
ONGOING STRATEGIC COMPETITIVE CHALLENGES.

It’s important to have a good linkage between the HR practices and competitive strategy because
without the right HR practice it’s not possible to ensure the right competency. Lot of
concentration is needed to ease the work and competent HR professional puts a lot of effort in
order to launch an efficient program.

Focus will be on HR activities, functions and process that enhance or impede the competency. It
also complements the behavioral perspective apart from technical skill only. Only thinking
about the task specific skills are not adequate but also it is important to give focus on employee
and how they work in a social environment.

After establishing in 1978 ASA has achieved a great position and actively working for the
development of underprivileged ones. But still the company needs to focus on some of their HR
planning to keep at pace with the changing world and also to be more productive.

Theoretical Discussion

To get in a competitive position and organization has no other way that focusing on the training
and development of the employees. Also they must put effort while recruiting because only
providing training or development program to the employees will not be sufficient unless
organization get to recruit the right person in the right place.

 Training and Development

Training and development is vital part of the human resource development. It is considered to be
the ever important factor in wake of advancement of technology that has resulted in ever
increasing competition along with rise in consumer’s expectation of quality and services. Also
training is necessary for lowering wastage and costs. In the new world of technology and
challenges it has become very important to provide necessary training to the employees to
prepare for upcoming challenges and new works. The Survival of any organization in the

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competitive place lies in the ability to train its human resource to be creative, innovative that can
enhance the performance and resulting in increasing competitive advantage. Training and
development is known to be physically, socially, intellectually and mentally very essential for
any organization. Through classroom instruction, computer based training, on the job training,
simulations etc. helps to train the individual and improve the skills. Because it directly impact to
the level of productivity. Employees need adequate training and through this a person develop
the proper skills to perform a task in an efficient manner.

The term ‘training’ Points the process involved in increasing the aptitudes, skills, Knowledge
abilities of the employees to perform specific jobs. Training helps in updating old talents and
developing new ones. ‘Successful candidates placed on the jobs need training to perform their
duties effectively’.

Development program along with training basically helps to grow the organization but most
importantly the employees feel that the organization care about them and want them to develop.
So different organizations now investing in employee development and training and utilizing
their skills and efforts to achieve the goals of the organization. Several development programs
can act actively for the employees like coaching, mentoring, 360 feedback and many more. As
developmental centers are present in the organization or there are many developmental centers
outside the organization and are very important as they provide training to the individual
employee.

But in spite of the necessity most of the organizations do not consider employee training and
development much of value. Their focus remains only for achieving goals. So, if organizations
would focus on employee developmental activities, this would help in enhancing the skills of the
employees. Which will eventually help the employees to develop career plan and lead to increase
organizational effectiveness.

Competitive Advantage Most of the organizations do not consider the employee developmental
activities of much value. They only focus on achieving the goals of the organization. They do not
care about the development of employees. As skills enhanced, they would be able to develop
career their own realistic career plan and thus lead to increase the organizational effectiveness

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Recruitment

When companies are usually asked what they want for their hires in most of the cases they give a
vague answer. Like great technical skills or good work attitude. But these generalization factors
do a little prediction about what recruiters want from their employees or what the employees
should do to prove them in the organization. So as job market is becoming challenging everyday
so business need to make new recruitment according to their strategies that will lead to the fact
that actually what organizations want.

To create a match between the right person and right job it is important to profiling the
employee’s skills to enlist top performing factors from others and avoiding common hiring
mistakes. Employee sourcing and recruiting, through pre-screening, assessing the candidate’s
skills and final decision-making are different competency factors that can lead to a great
recruitment process and can give decision about person whom not to hire (P. Jones, 2011).

Brown (2007) study which confirms the correlation with employee competence as the outcome
from the recruitment process. However, it utilized skills based on individual performance term to
describe consideration of the board competence. An organization that uses a proper process to
recruit and select skilled candidates will experience a higher level of job success and the
employer who conducted an appropriate recruitment and selection process will enable the
organization to receive employee quality and workers who embrace competencies.

“Recruitment is challenging because it can be difficult to identify enough qualified candidates to

have an adequate choice in some labor markets, whether for field officer positions or more senior
manager opportunities. Challenges range from low levels of educational achievement due to poor
schools, to significant competition from the commercial financial sector, or an overabundance of
university graduates who desire a position less physically demanding than that of a typical rural
field officer. Organizations therefore need to consider the mindset of potential candidates and
understand how to overcome these issues”.

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 HRM approaches of ASA

 Recruitment sources

For recruitment purpose ASA mainly rely on external sources. From entry level to mid-level
position they highly depends on external sources. Same goes when they recruit top level
managers. But generally they don’t take any written test for the top level managerial posts.

 Internship

ASA also offers internship program. Background matching and interest of the students are
considered in accepting applications for internship in ASA. A very few selected candidates are
accepted to do this course. A set of ASA Publications/Literature are given to the intern on arrival
to read so that they can get a brief idea about the working procedures of ASA. Also the intern are
given chance to work with different branches branches and go for field visit.

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 On the Job training approach

Employees are supervised and guided to perform their work in a proper manner. Huge number of
employees needs to work in field. So proper coaching is given to the employees so that they can
act properly even when they are not in board.

 Decentralization

ASA applies decentralized decision procedure for the employees. As the organization is
expanded all over Bangladesh. The employees go to different villages and in small town to
provide services to people. Because of this reason it is not possible to take every decision after
getting permission of the higher authorities. As a result ASA has delivered delegation of
authority but to the branch level officials only.

Factors that can help to increase competency

 Simulation

Simulation is very important for organizations like ASA. ASA is providing agricultural program,
sanitation program, and education program. Also they mostly work in rural areas. So simulation
can help them to understand the situations they may face while working also will give
knowledge about the environment the employees need to work with. Through this employees can
develop themselves according so that they can work in the real situation in more efficient way.

 Proper Salary and benefits

Interns themselves need to bear the cost of accommodation, transport, food etc, So it can be a
burden to many and ASA can lose potential and competent candidate. To grab the competent
candidates ASA should offer these benefits, it can be an increased cost to them but eventually
they will be benefited because they will get more competent candidates. Also the interns work
actively in field and gather data. So if ASA offer benefits to them in return they can get a better
quality work.

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 Internal Recruitment Policy

At present ASA does not seems to recruit from internal sources. They are heavily dependent on
external sources. Here they can consider of hiring from internal sources sometimes because the
employees from internal sources are already experienced and competent. So it can be beneficial
for them.

 Computer Based training

Employees need to be provided with computer training and knowledge. As ASA has to work all
over the country so this kind of training can be helpful for them. By ensuring the sources are
available (internet and electrical instrument) at a time they can train a lot of employees also in a
cost effective manner. It can be very effective to develop their foreign remittance program.

 Experiential Programs

ASA as a micro finance institution has to work with underprivileged people. So as a team they
need to have a very strong bond so that they can work in a proper way in field level activities.
Through this experiential program it will be easy to teach the employees time management, team
work, decision making and overall the team will work in a more efficient way than before.

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OBJECTIVE 3: WHAT HRM CHALLENGES MICROFINANCE ASA WILL FACE IN
THE 21ST CENTURY?

The modern business cannot effectively operate in the business world if the human force not well
equipped with the latest technology and techniques. This is the responsibility of the human force
manager to properly train the work force and to see what is the basic need for the human force to
achieve the competitive advantages of business in 21st century. Great debates on this topic going
on for several years and no doubts human is an important part of any organization but due to
rapid changes in the business world, globalization, change in customer taste and habits, new
techniques of production, human in the organization now facing different kinds of problem, to
cope this situation the today’s HR manager also facing a variety of issues and challenges that
how they can best manage and solve all these issues and challenges with splendid ways. Due to
the fluctuating economy as well as local and global advancements, there are many changes
occurring rapidly that affect HR in a wide range of issues. In the Survey of Global HR
Challenges: Yesterday, Today and tomorrow, conducted by PricewaterhouseCoopers on behalf
of the World Federation of Personnel Management Associations (WFPMA), several challenges
for human resource management were revealed. This survey, which concluded that “despite
national and regional differences, there was remarkable unanimity,” disclosed some of the top
human resource management challenges as follows: Change management (48%), Leadership
development (35%),HR effectiveness measurement (27%),Organizational effectiveness (25%).
As the globalization competition is increasing day by day, HR needs to play a new dimension to
face the challenges to strive here in the 21st century. Being a micro financial Institution ASA
also faces these challenges as well. The HRM challenges that are faced by microfinance
institution in 21st century are discussed below:

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 Recruitment & Selection process:

The quality of employees needed to hire

depends on an effective recruitment and
selection strategy. Recruitment & selection
process is a big challenge for HR in any
financial industry. The main responsibility of
HR is to hire correct person in correct place to
achieve the company goal. Correct person or
expertise selection depends on effective
recruitment & selection process. Recruitment& selection process isn't always smooth sailing,
sometimes faces challenges. Employers face tangible problems such as the cost of advertising
job openings and intangible obstacles such as improving communication between recruiters and
hiring managers. Sometimes recruitment & selection process fail due to the nature of recruiters
or hiring committee. Structured interview is the key process for correct recruitment & selection.
Selection should not be done by following the basis of the recruiter’s perceptions as they can be
influenced by their values, beliefs and social views which can be result biasness.

For any micro financial institution (MFI), is also facing some difficulties, in recruitment &
selection process. Correct & efficient candidate finding is a challenging factor for HR in
microfinance institution ASA, in 21st century. To recruit or select the talent & correct person
from interview panel, it needs to follow structured interview with using broaden view of judging
people on the basis of their origin, culture, values, way of life & background.

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 Workforce Diversity:

Another HRM challenge is the

workforce diversification. Such
workforce diversification means to
effectively manage the workforce that
come from different backgrounds with
respect to regions, cultures, race and
gender.

In this modern business world, every business organization conducts the business activities in
different countries. Now such multinational organizations adopt several strategies to compete in
the foreign markets through people. In this regard to manage such diverse human resources
effectively, business organization adopt and make the policies and practices according to the
culture and environment.

There are various other issues which also facing by today business organization and which are
surprising and uncertain issues, may include the organization environment, the ethical and
ecological challenges, globalization, economic and political instabilities, employers and
employees’ issues, the technological innovations, in which the modern business operates. The
work force diversity in the modern organization now a days growing question, similarly the labor
mobility, political pressure, stream of investment capital, information transfer using electronic
means and currency exchange are all new challenges. Stability and good environment and core
values are very crucial for both organization and employees. They need to understand each other
well, and fulfill the emotional agreements with each other. Some internal issues may bring
instability between the employer and employees’ relation but HR responsible to see and hold on
these circumstances, Wong and Snell (2003). HR practices such as recruitment, training,
development, and organization communication may also great impact of organization success,
and still these are the main trends for HR. by developing sound organizational culture, The HR
can overcome these issues, because culture is the brand of organization, which represent
company to outside people, good culture can only be maintain when act upon the culture norms
(Losey, 2005).

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As a micro finance institution, ASA is facing challenging factors for HR in 21st century. Work
diversity is required to utilize talent from different source, which is possible by working with
different nature people together.

 Technology:

Organizations are mostly using the

technology in their daily work. Adapting
updated technology in any micro finance
institution has become a challenging factor for
human resource in 21st century. It is very
common that people in the organization are
not happy to use modern technology in their
work. Also they are not flexible to adapt in any technological change. For human resource
department it is very challenging as it costs to implement technology or securing technology for
all employees as well as to get result from this
technology.

As a microfinance institution ASA also faces

challenge in using technology in their work
area in 21st century. Though using technology
is the important tool to achieve goal or success
in organization, and to do these employees
need to be flexible in changes & need to
involve themselves to get result from them.

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 Motivate & retention employees:

Motivation is defined as all internal

and external driving forces that
makes the individual to perform an
activity, what determines the limits
and forms of activity and which give
its activities oriented towards
achieving certain goals [Duică, 2008:
142]. In modern organization,
motivation& retention is the key tool
to utilize the potentiality of a potential employee in their work. It boosts up the energy & help to
brain storming to find the best possible activities to implement in work. But in microfinance
institution motivation of the potential employees is very challenging. Successful management
product by motivation shows an important fact that may explain the relationship between
performance and motivation. People have different goals in their lives. Therefore, for some
reason it affects people differently in performance. There are employees who are extrinsically
motivated. In present situation, when there is less opportunity to grow up, it has become a great
challenge to retain people in organization from looking for new place to work. Now- a-days
world becomes smaller &worldwide hiring is common to us. So it is very important to keep the
highly potential employee with designing better policies for retention. The way of motivation the
employee is differ from person to person & organization to organization.

As a micro financial institution, ASA will also face the same challenge through motivate &
retain their potential employee in 21st century. Financial benefits are no longer considered as to
be a tool for retaining employee. All growing & modern organization human resource
management department need to think & find the different way to realize the employee as an
asset of the company, also to build trust to each other to make the succession of the goal of the
company. By doing this rate of turnover can be reduced. Sometimes employees are overloaded
on their work & feel pressure & doing wrong in their work & become demotivated. As human

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resource department need to balance the work load on each & every employee & make the
employees satisfied in their work & profession

 Managing 5 R’s:

A company expands its operations, sets up new facilities, extends its product range, and brings in
overseas technology. All these activities create a need for fresh recruitment in various cadres.
Human Resources (HR) Management is in a position to recruit R’s namely Resourcing,
Recruiting the right talent, Retaining the talent, Retraining and Restructuring. Now a days to best
use of these 5R’s is becoming very challenging for HR in the financial industry.

 Health & safety:

Human resources professionals play an important role in ensuring employee health and safety, as
they know the workplace, the employees and their job demands. While human resources
professionals are not expected to know the technical aspects of workplace health and safety, they
should know when and how to use existing resources to respond to employee concerns.

In ASA, health and safety responsibilities are within the human resources department. In orderto
meet these responsibilities, human resources professionals must:

 Understand the health and safety responsibilities of employers, managers, supervisors and
employees within the organization;
 Implement personnel management policies to ensure that everyone in the workplace is
aware of his/her responsibilities;
 Establish effective ways of meeting health and safety responsibilities and
 Ensure that employees fulfill their health and safety responsibilities as outlined in the
organizational policies and programs.

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Findings of Objective 3:

 In the 21st century HRM faces several strong challenges relating to recruitment and
selection process, workforce diversity, technology, motivation and retention strategy etc.
and as a micro financial institute ASA is also facing these challenges and adapting to
changes to solve the problems associated with the challenges.

 For overcoming the obstacles and effectively and efficiently maintaining the strategies to
face the challenges, ASA is following some strategies like working on, striking work life
balance, managing 5 R’s (Resourcing, Recruiting the right talent, Retaining the talent,
Retraining and Restructuring), maintaining health and safety etc.

 ASA is working relentlessly to face the challenges with positive working plans and
strategies and they are successfully taking some strategies and implementing some plans
and actions for handling the challenges effectively and efficiently.

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 Recommendations

Despite of the positive aspects, ASA needs to improve in some areas. Some of the key factors are
given below

Adjustments with Inflation Rate:

ASA does not frequently change their salary structure because of inflation, which makes the
situation difficult for the employees to meet their necessary needs with the existing salary. As a
result, many of the employees especially in the mid-level are shifting to other organizations. So
to keep their employees motivated to stay and work efficiently, ASA should adjust their salary
structure more frequently with the inflation rate.

Proper Salary:

In many of the position in ASA, employees are not satisfied about their salaries because the
organization is paying less salary form what they deserve and also from their competitors which
another big reason that ASA’s turnover rate is increasing in recent times. So, they need to focus
on their salary structure to meet the demands of their employees and also to reduce the turnover
rate.

Proper Probationary Training:

Organization is not updating their probationary training with time. After selecting a candidate for
a specific position, they are giving the same type training as they used to give in the past for the
same position. As a result, the probationary training process is becoming obsolete and they are
not able to utilize the skills of the employees properly. So, they need to improve their
probationary training to bring out the skills of their employees.

Proper Knowledge among Recruiters:

In field-level recruitment, recruiters are not that much experienced and knowledgeable about the
recruitment and selection procedure. As a result, they are sometimes recruiting ineffective
employees which are reducing the effectiveness of the organization. So, organization should take

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initiative to train those recruiters so that they can improve their knowledge and skills in
recruitment and selection process.

Decentralized Decision Making:

While recruiting and selecting new employees, the top-level authority takes all the decisions
whether to take the candidates or not. To increase the belongingness and to motivate the mid-
level employees, the top-level authority should include them in the decision making process.

CONCLUSION

Micro financial institutions such as ASA plays vital role in a developing country like
Bangladesh. Though there are several micro financial organizations dominating in micro
financial industry but by providing additional and alternative micro financial services, ASA have
already gained considerable popularity in Bangladesh. However, despite several constrain, these
organizations have performed notably well and their role in the economy should be duly
recognized.

Nevertheless, micro financial organizations of Bangladesh have already passed many years of
operation and no organization can run perfectly without having a wealthy Human Resource
Planning. However, ASA is following and changing their HRP according to the demand of
competitive world. In a nutshell, ASA has traditional recruitment system along with some
training programs to keep pace with the competitive world. Nutshell when HR works
enthusiastically by keeping all the practices in mind, competitive advantages can thus be
accomplished, the value of human resource can be improved, organization efficiency can be
enhanced, and the organization will sustain to survive.

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