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A Term Paper on

Human Resource Management Practices in Banking Sector in Bangladesh

(A study on Branches situated in Khulna city)


Abstract:
Banking industry is useful for the economic development of every nation. Bangladesh is a developing
country and banking sector plays a very important role in the economic development. In Bangladesh,
Banking Industry is the potential industry where the growth of a country depends a lot. This industry
is very big in Bangladesh and doing a great job in attracting lot of skilled employees. So Human
Resource Management (HRM) is very much applicable as well as practiced in the banks of
Bangladesh. In this report we will try to focus and describe the overall contribution of Human
Resource Management (HRM) to the banking sector in Bangladesh. .

Introduction:
Human Resource Management (HRM) is the process of acquiring, training, appraising and
compensating employees and attending to their labor relations, health and safety and fairness
concerns. For the development of banking sector Human Resource Management plays important
roles. In every bank of the world human resource is practiced well for the development of this sector.
In our country the practice of human resource of banking sector is doing well now. In Khulna city the
practice of human resource of banking sector begins now-a-days. This city is a commercial city. So
human resource practice should be effective here. And day by day it will be developed. So we can
say, the most important resource is human resource because human beings play a dual role- as
resource, as well as a motive force for all other resources by manipulating them, by the way of
developing, utilizing, commanding and controlling. So Human Resource Management (HRM) is very
much important.

Literature Review:
Actually work on the Human Resource practice in banking sector in Bangladesh is very rare. But in
some countries like; Ghana a few people worked on Human Resource Practice in banking sector. The
study therefore aimed at providing insight into HRM practices found in Ghana using case
studies of two banks; Ghana Commercial Bank and Barclays Bank of Ghana Limited. (Ref: The
University of Nottingham).

Objectives:
Objective:1
To determine the extent to which HR department plays a role in recruiting and selecting employees.
We assume that if HRM plays role that will be null hypothesis and if HRM plays no role that will be
alternative hypothesis.
Hypothesis:
HR department plays no role in recruiting and selecting employees.
HR department plays an important role in recruiting and selecting employees.
Objective: 2
To determine the extent to which HR department trains and develops the employees
Hypothesis:
HR department does not train and develop the employees.
HR department trains and develops the employees.
Objective: 3
To determine the extent to which HR department affects performance appraisal.
HR department does not affect performance appraisal.
HR department plays a role in performance appraisal.
Objective 4:
To determine the extent to which HR department plays a role in compensation system.
HR department does not play a role in compensation system.
HR plays an important role in compensation system.
Objective 5:
To determine the extent to which HR department plays a role in arranging flexible work system.
HR department does not play a role in arranging flexible work system.
HR plays an important role in arranging flexible work system.
Objective 6:
To determine the extent to which HR department plays a role in motivating employees.
HR department does not play a role in motivating employees.
HR plays an important role in motivating employees.

Methodology of the study


We have followed the following research process consists of necessary steps to carry out the research
in order to prepare the term paper:
Step-I: Define the Research Matter: To find out the Human Resource Management practices in
banking sector.
Step-II: Review of Literature: A brief summary of past records of Human Resource Managements
practice in banking sector.
Step- III: Collection of Data: To verify the hypothesis we interviewed the employees of the banking
sector.
Step- IV: Formulation of Hypothesis: The organization follows the modern human resource
management practices.
Step-V: Analysis of Data: To analyze the data we found out the Means and Standard Deviation of the
data and then we used normal and probability distribution and correlation.
Step-VI: Interpretation and Representation: After analyzing we showed the results of the hypothesis
and represented the result.
Findings and analysis:
Here is an example to find out mean and standard deviation of one interviewee:

= 40 = 160

= =4

S.D =

= 1.94

Here we sort out the mean and standard deviation of particular sections:
C1: Recruitment and Hiring:

Mean =

= 3.838
SD=

= .1753+ .0067+ 0.1113+ 0.7474 + 0.0262+ 0.2848


= 0.5199

C2: Training and Development:

Mean=

=3.823
S.D=

=0.8491
C3: Performance and Appraisal:

Mean=

= 3.598

SD =

=0.7445
C4: Compensation system:

Mean=

= 3.961

S.D =

= 0.5045
C5: Flexible work arrangement:

Mean=

= 3.30

S.D =

= 0.0890

Part D: About motivation about your work:

Mean=

= 3.73
S.D

= 0.7591
Here is the grand mean of six parts of the total questionnaires:

Grand mean = 3.907

Correlation:
Analyzing correlation between Training & Development and Performance Appraisal, we found
correlation is +0.96 which expresses Performance Appraisal is strongly positive correlated with
Training and Development. If Training and Development increase Performance Appraisal also
increase, in contrast if Training and Development decrease Performance Appraisal also decrease.

Another analyzing computing correlation between Performance Appraisal and Compensation System
is +0.92 which indicates positive relationship between these two items. According to this relationship
if Compensation System’s structure is better than Performance Appraisal will be higher. Like that if
Compensation System’s structure perform poorly then Appraise Performance will be disappointing.

In Human Resource Practices another vital correlation has been found between Performance
Appraisal and Flexible Work Arrangements where there is a positive relationship of +0.97. It exposes
that if the Work Arrangements of selected organizations is bit flexible in terms of using their own
ideas, less intervention of superior in unnecessary topics then the performance of those employees
will be appreciated.

Testing of Hypothesis:

C1: Recruitment and Hiring:

= = = 0.483

Upper limit= 3.383 + 1.96 × 0.0483 = 3.933


Lower limit= 3.838 – 1.96× 0.0483 = 3.7433
It represents “favorable” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.
C2: Training and Development:

= = 0.07

Upper limit= 3.823 + 1.69 × 0.0788 = 3.98


Lower limit= 3.823 – 1.96 × 0.0788 = 3.67

It represents “favorable” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.

C3: Performance and Appraisal:

= = 0.0691

Upper limit = 3.598 + 0.0691 × 1.96


Lower limit = 3.598 – 0.0691 × 1.69
= 3.51
It represents “favorable” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.

C4: Compensation system:

= = 0.0468

Upper limit = 3.961 + 1.96 × 0.0468 = 4.05


Lower limit = 3.961 – 1.96 × 0.0468 = 3.87

It represents “favorable” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.

C5: Flexible work arrangement:

= = 0.083

Upper limit= 3.30 + 1.96 × 0.083 = 3.46


Lower limit = 3.30 – 1.96 × 0.083 = 3.14
It represents “moderate” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.

Part D:

= = 0.070

Upper limit= 3.73 + 1.69 × 0.70 = 3.87


Lower limit = 3.73 – 1.96 × 0.70 = 3.59
It represents “favorable” standing of the respondents towards specific arrangement.

So, the null hypothesis is accepted here and the alternative hypothesis is rejected.

Conclusion:

The concept of HR is still new in countries like Bangladesh. The practices of HRM are also very
limited here. Most of the organizations are not concerned about the HRM practices. Yet the
organizations specially the banking sectors are gradually recognizing the importance of HRM
practices in the organization. By using HRM practices banking institutions of Bangladesh can be more
efficient than before and overall monitoring process will be more effective as well as beneficial.
Human resource is considered as the most important resource of business and to use this asset in banking
institutions have no alternatives. Because the human resource of an organization helps it to grow. And
the effective use of the human resource makes the organization to reach up to its expectations and
objectives. After all the details it is clear that to run an organization effectively and efficiently it must
have to do some HR jobs. We all hope that every banking organizations of Bangladesh will soon start
to practice all the HR activities for their long term growth.

Recommendation:

Some suggestions for the improvement of the situation after our observation are given below-

1. Attractive incentive packages for the employees will help to increase the morality of the
employees.
2. The officers of Khulna Branch think that long term training is required for the bank officers
for the betterment of services. Computer training is a must today to improve the individual as
well as the bank’s performance.
3. To attract efficient employees, banks have to create new agency arrangement which will be
able to increase the total performance of the banks.
4. Though divisional branch of bank seems to be a modern bank which depends on the
computerized systems for most of the banking activities, the branches of the remote places are
not computerized yet.
5. Analysis proves that Banks should come up with more banking instruments to attract more
efficient and effective employees. This will help to uphold the growth rate of performance.
Reference:
Richard I. Levin & David S. Rubin.. Statistics For Management
Gupta, S.P. & Gupta, M.P. Business Statistics.

Garry Dessler. Human Resource Management.

Lengnick-Hall, Cynthia A. and Mark L. Lengnick-Hall (1982). “Strategic Human Resource


Management.

A.k.Azad. Higher Secondary Statistics Part 2.


Appendix:

According to the above calculation, we have calculated the other questions mean and SD. In below,
we are showing all the questions mean, SD and mean of all the means.
Questions. No. Mean SD Mean of the means (average)

1. 4.256637 0.874017

2. 3.504425 1.316949

3. 3.920354 1.181264

4. 2.973451 1.305621

5. 4 0.896421

6. 4.371681 0.803949

7. 4.566372 0.843844

8. 4.345133 0.873927

9. 4.415929 0.873475

10. 4.070796 0.831488

11. 3.902655 0.925479

12. 2.141593 1.321979

13. 3.318584 1.1822

14. 4.40708 0.8928

15. 2.575221 1.314788

16. 3.884956 1.147608

17. 3.097345 1.511649

18. 4.026549 1.047618

19. 3.182609 1.619956

20. 4.721739 0.600407

21. 4.069565 1.182636

22. 3.913043 1.203542

23. 3.747826 1.362682


3.726765
24. 4.130439 1.217718

25. 2.582609 1.594853

26. 3.686956 1.512319


27. 3.921639 1.285191

28. 4.156522 1.08895

29. 2.121739 1.445791

30. 4.426087 0.848744

31. 4.034783 0.981678

32. 4.623853 0.605362

33. 2.229358 1.19902

34. 4.247706 0.851534

35. 3.440367 1.329377

36. 4.266055 0.800951

37. 3.963303 1.008543

38. 3.963303 1.22419

39. 2.697248 1.449806

40. 3.165138 1.51849

Total 149.0706

Mean of the means= = 3.726765

Table 1: Mean and Standard deviation of every question

5 Comparative mean
4.5 • • •
• • • • • • • •
• • • • • •
4 • • • • • • •
3.5 • •
• • • •

3 • • • •
• •
2.5
2 • • •
1.5
1
.5
0I
I I I I I I I
5 I I I I 10 I I I I15 I I I I20 I I I I25 I I I I 30 35 I I I I
40

Figure 1: Comparative mean

For representing a deliberating picture of the total responses the following scales will be used:
i. 5.00 ≥ Mean ≥ 4.51 Represents “Most Favorable” standing of the respondents
towards a specific statement.

ii. 4.50 ≥ Mean ≥ 3.51 Represents “Favorable” standing of the respondents towards a
specific statement.

iii 3.50 ≥ Mean ≥ 3.00 Represents “Moderate” standing of the respondents towards a
. specific statement.

iv 2.99 ≥ Mean ≥ 1.00 Represents “Negative” standing of the respondents towards a


. specific statement.

Table 2: Scales of total responses of the interviewees