Institute of Business Administration (IBA-JU)

Jahangirnagar University

Report on Compensation Management Practices and Policies of

AKIJ FOOD & BEVERAGE

Subject: Compensation Management (HRM506)

Submission Date: 03/08/2019

Submitted To:
Md. Alamgir Hossen
Assistant Professor
Institute of Business Administration (IBA-JU)
Jahangirnagar University
Savar, Dhaka-1342

Submitted By:
Samir Ahmed ID: 201702091
 Compensation Management Practices and policies

Compensation means what the employees receive in exchange for their work. It is the monetary
plus non –monetary return paid to employees for the work done by them.

Compensation includes direct cash payments, indirect payments in the form of employee
benefits and incentives to motivate employees to strive for higher levels of productivity.

Compensation management, also known as wage and salary administration, remuneration

management, or reward management, is concerned with designing and implementing total
compensation package.

Specific objective of this study is to identify the Compensation Management Practices and
policies of Akij Food and Beverage LTD.

As I have involved with the organization for last three years and work there, I am able to
collect the data from the primary sources. Therefore, Data are collected from both primary
and secondary sources. Every now and then I tried to talk to different officials to find out
relevant facts. And talking about secondary source I have used to the fullest extent possible.
The sources of data details are given below:
Primary Sources:
1. Communication with the organizational supervisor.
2. Discussion with officials and concerned experts of different designation.

Secondary Sources:
1. Websites of the Bank.
2. Significant data from the Internet
3. Textbook

First of all, there are some information’s that are thought to be confidential to be disclosed to
others, some people were found to be hesitant to share those and showed negative impression.
I only worked at the HR department and it was quite difficult to understand about the
compensation policies and the extent to which employees were satisfied in other division.
Secondly, Time constraint was another difficulty for the completion of the report because due
to the limitation of the time it was not possible to study a large sample size for which I had to
deal with a small sample size in case of research
 Company profile

Akij Food and Beverage Ltd.

“Brings Quality in Life”.

Akij Food and Beverage Ltd (AFBL), a stress of Akij Group and a noteworthy name in Food
Processing and Marketing Sectors, is an eventual outcome of visionary thought of Mr. Sk. Akij
Uddin. AFBL started its assignment in the year 2006. AFBL is a Project worth $70 million and
is set up by the Parental Company Akij Group. AFBL produces a broad assortment of Snacks
and Beverage for both National and International Market. AFBL concentrated on soft drinks,
regular item squeeze, deplete, water and snacks and amassed together these divisions in another
assembling plant discovered same 50 kilometers outside from capital Dhaka in Krishanapura,
Dhamrai, quality was the basic objective of the coordinator Late Mr. Sk. Akij Uddin that is the
reason his expression is "Uncompromising quality even in unpleasant situation" the main
power behind the achievement of Akij Food and Beverage Ltd.
As the Beverage business has ended up being more forceful and testing in the coming years, it
leaves with assurances of ensuring quality in the dominant part of its things. To bring the vision
of this visionary business visionary into reality AFBL has been worked with most present-day
working workplaces of European root for planning and Packing including aseptic filling line
which in single case in the entire subcontinent. It was more than fifty years back, that AKIJ
GROUP ascended into the Bangladesh publicize like an obscure island in the guide as a little
merchant. From such a little beginning, they have formed into a standout amongst other mix
in Bangladesh. By and by Akij Group is the most lifted TAX payer in the Republic Government
of Bangladesh ensuring mind blowing quality and organization to the regarded purchasers.
Akij Food and Beverage Ltd has won the most outrageous satisfaction of the customers by
conveying best quality things and essentially transformed into a threat for both national and
overall brands in the country inside a concise time allotment. To crown everything, Functional
Distributors, Strategic Sales Forces and set up Suppliers are the genuine givers remembering
the true objective to give quality things to our regarded buyers. Akij Food and Beverage Ltd.
(AFBL) shows its thankfulness to each one of the delegates who have joined as a gathering
today and moving to achieve the "VISION" of AFBL in a body with full conviction.
Vision of AFBL
To be the main sustenance and Beverage brands exceeding expectations in item quality, social,
specialized and showcasing imagination and administration to AFBL's clients through the
aptitudes and extremely cheerful responsibility of its representatives.
As indicated by Late Mr. Sheik Akij Uddin with respect to Akij Food and Beverage Limited
(AFBL)- "We will create and present those great quality items in the market that we ourselves
and our family will dependably utilize; we won't simply deliver items for the customers in the
market and let our family devour other overseas items".
Mission of AFBL
To pick up a best position in Food and Beverage segment. Finding and understanding the wants
and needs of the network and working in congruity with our customers, representatives and
business accomplices
Goal of AFBL
To achieve market leadership, profitability, good corporate citizenship and a sustainable
growth.
Business Philosophy of AFBL
In soft drink industry, there are numerous national and overseas organizations. Akij Food and
Beverage wants to be a one of a kind nearby FMCG maker with a similar nature of the overseas
organization. For this reason, AFBL produces CSD, Snacks, Milk and Juice for youthful target
bunch who love to lead stylist life.
Main slogan of AFBL is: “Brings Quality in Life”.
Objective of AFBL
The principle target of the organization is to build strong piece of the pie in related
differentiated products in Bangladesh and to guarantee the potential clients of the quality of
the items.
AFBL: Morale, Ethics & Values
➢ Believing in quality and perfection in benefit
➢ Believing open correspondence, individual obligations, honesty, and dynamic
interest
➢ Supporting the variety in creativity and share of thoughts & ideas
➢ Building society of learning in view of administration, cooperation,
responsibility, and coactivity.
The 4ps of Product, Price, Place, and Promotion are subjected to their central goal and to
execute and co-ordinate them appropriately keeping in mind the end goal to maintain and
upgrade customer fulfillment and furthermore experience legitimate gainfulness.
AFBL Product
Akij food &Beverage limited started their journey officially on July 2006 with three products
but now there are lot of products on its rosters. The products which are offering now
by the company are given below:

Product Category Sub category Brand Name Size

Carbonated Soft Cola MOJO 150ml can, 250ml pet and can,
Drinks 500ml pet, 1-liter pet, 2-liter
pet.
Cloudy Lemu 150ml can, 250ml pet and can,
Lemon 500ml pet, 1-liter pet, 2-liter
pet
Clear Lemon Clemon 250ml pet and can 500ml pet,
1-liter pet, and 2-liter pet.
Clear up 250ml pet
Energy Speed 250ml pet and can
Drinks Huston 250ml CAN
Velocity 250ml CAN
Molt Wild Brew 250ml CAN
Beverage
Orange Twing 250ml, 500ml pet
Aafi orange 250ml pet
Drinking Water Spa / Revera 500ml pet, 1,2- & 5-liter pet
Aseptic product Fruit drinks Frutika mango 250ml pet, 1 liter.
Aafi mango 250ml pet, 1 liter.
Frutika grape 250ml pet
Milk product Farm Fresh UHT milk 250ml and 500ml pkt
Farm Fresh 250ml and 500ml pkt
Pasteurized
Farm Fresh yogurt 250ml cup
Farm Fresh Ghee 250ml and 500ml jer
Farm Fresh butter 250ml pkt
Snacks Cheese Puffs 15 and 30 gm Foil pack.
Cheeky Monkey 15 and 30 gm Foil pack.
Aafi chanachur 15 and 30 gm Foil pack.
O’ potato 15 and 30 gm Foil pack.

Organization Hierarchy
As there are corporate office and factories of AFBL, so there are some dissimilarities in organogram
factories with corporate office.

Director (AFBL) Chairman of AKIJ group

Sr. General Manager
General Manager
Deputy General manager
Manager
Deputy Manager
Assistant Manager
Sr. Executive Sr Engineer
Engineer Technical Officer
Executive Assistant Engineer
Jr. Executive Sub. Assistant Engineer

Technical supervisor Technical Foreman

Sr Operator Sr Technician/Electrician
operator Technician/Electrician
Jr. Operator Asst. Technician/Electrician
Helper Technical Helper
Daily Basic labor

My Job Responsibility in AFBL:

I have been working in AFBL since 2-May2016 as an assistant engineer in electrical department.
My daily responsibilities were:
➢ Have to performed shifting duty, internal audit, KPI and budget making of the Plant in which I
am the responsible person.
➢ Have to perform maintenance work in carbonated soft drinks, Aseptic line of Krones, mixing
unit, Film making, printing, lamination process.
➢ Have to perform maintenance, commissioning installation work with Siemens and others PLC.
VFD like-Danfoss (FC, VLT), LSis, SEW, Omron, Yaskawa, Parker (AC, DC integrator), Servo drive.

Experience new plant installation, erection, commissioning and existing plant maintenance and
troubleshooting.
 Compensation Management Practices and policies of AFBL

Compensation is the most important part in any organization as it is one of the key factors of
motivation for all employees now-a-days. Therefore, different organization undertakes
attractive compensation policy to uphold the potential employees to increase the productivity.
Generally, we can see two types of compensation system. One is financial and another one is
non-financial. AFBL has been also offering lucrative compensation to their employees for
years for which their demand is up scaling day by day. One of the finest things that I observe
that AFBL has always tried their utmost to keep their best person else by ensuring the best pay
scale comparing with the competitors. Therefore, it is seen that the turnout ratio of employees
of AFBL is so low. AFBL goal of compensation is to focus on the certain activity or works
done by the employees upon which the compensation is maintain or scaled such as it has
maintained a combination of cash, benefits, retirement, perquisites as a total compensation
package. There are several compensation policies taken by AFBL. These are given below:

Salary:
To compare with all the local banks AFBL pays relatively so high to their lower level
employees. It is done due to grab the potential employees from the market. Actually, there are
few companies in the market to pay such a high basics to their employees for which AFBL is
still is the first choice of new comers. This is the area in which AFBL has done marvelous job
because now-a-days employees are more concern of their basics. AFBL has successfully
adapted this change. It has been seen that employees of AFBL are highly satisfied due to the
convenient salary structure as other company in the market are not paying like this. Moreover,
AFBL used to review its salary once in a year. For a instance every December, the salary of
the employee review based on the performance which is key motivating factor to perform well.
Another thing that is to mention that AFBL conducts performance evaluation twice in a year
according to that they are to review the salary.

Salary Payment:
The most important thing about the payment of the salary of AFBL is that it clears all the salary
payments within 25th of each month which is quite absent in other companies. The employees
are paid their every month salary on their accounts which they have to open while joining in
the company. It is good in such way that all the tax and deductible income are cut by company
itself and the employees get those amounts withdrawn the money from their account as a
whole.
Bonus:
Like the other banks, AFBL provides two festival bonuses to their employee’s one is in Eid ul-
Fitar another one is Eid-ul-Azha. The bonus is equivalent to the basics of the employees.
Moreover, there is another provision regarding the bonus which is based on the performance
of the employee. But it actually depends in the performance of the branch which means if a
branch does well as a whole then all the employees of that branch get bonuses of their
performance.
The overall pay structure of the employees varies in different layers and its is very difficult to
describe which are shown below: -

Designation Salary range

(TK)
Director (AFBL) Confidential
Sr. General Manager Confidential
General Manager Confidential
Deputy General manager Confidential
Manager 75000-150000
Deputy Manager 65000-125000
Assistant Manager 40000-90000
Sr. Executive Sr Engineer 30000-60000
Engineer 32000-50000
Executive Assistant Engineer 20000-40000
Jr. Executive Sub. Assistant Engineer 12000-20000

Technical supervisor Technical Foreman 30000-45000

Sr Operator Sr Technician/Electrician 18000-32000
operator Technician/Electrician 12000-20000
Jr. Operator Asst. Technician/Electrician 9000-15000
Helper Technical Helper 7000-12000
Daily Basic labor 200 TK per day

Performance Bonus:
If the bank makes profit, the employees will be entitled to 3% of pre-tax profit as performance
bonus. Fifty percent of such bonus distributed on the basis of basic pay of an employee, and
balance fifty percent on the basis of performance of individual employees. Performance
appraisal for the purpose made on the criterion set by the management time to time.
Provident Fund & Gratuity:
The employees are also entitled with provident fund in AFBL. Actually 10% of the basic are
deducted from each employee for the provident fund along with this 10% another 10%
provided by the company total 20% is installed as the payment of provident fund. This fund is
given to their employees at the end of their service. If any employees leave the organization
before completing three years of employment, he will get the provident fund induce from the
10% of the basic that will be calculated upon his service period which means those employees
will not be able to claim the other 10% provided by the company. In addition, AFBL also
provide gratuity to their which has a handsome amount apart from the basics. The employees
who complete 10 years are used to get a gratuity equivalent to the basic of 3 months.
Annual Increment:
There is a provision of annual increment of AFBL which is 10% to 20% sometimes 25%
increment based on the performance. It works as a motivating factor for the employees to
perform well. Therefore, each employee tries their best to make it happen so that their base
salary having well shaped structure.
Travel Allowance:
The bank also provides travel allowance to their employees. If any employee travels any
place in Bangladesh regarding company’s prospect, they will get the money or remuneration
that is cost by them but the cost that is spent is verified by the HR personnel and after that
they got the requisition of the money.
House Rent Allowance:
The company also provides house rent to their permanent employees who are in the
managerial level. Each employee in the managerial level gets 55% of their basic as house
rent. This encourages the potential candidates in the market to work for AFBL.
Employee Loan:
Unlike other banks, AFBL provides a great scheme of loans to their employees. First of all,
the permanent employees get loans from their provident fund at a cost of 10%. They can use
their money for several purposes. Secondly, from the executive level the employees are
qualified for home loans, car loans and others at a cost of 8% where it is around 15% for the
customers so it an extra benefit consumed by the employees.
Medical Facilities:
The medical facility provided by AFBL is quite different from other banks. AFBL has their
own medical team to look after their employees in case of any medical assistance. They have
their nursing home as well. Therefore, employees of AFBL do not have the opportunity to
enjoy life insurance which means AFBL does not provides life insurance policies to the
employees.
Welfare Funds:
Every year 200 taka for each employee is deducted to count in the employee welfare fund.
The money induced from the welfare fund is used for the welfare for the employees when
they are in trouble or in emergency. This money is totally distributed to the employees so that
they feel safe at their emergency period.

Earn Leave:
The employees who complete one year of service without any unusual leave, get 30 days for
earn leave in a year. It means their paid equivalent 30 days of compensation.

Disability Leave:
If any employee faces unusual accident or physical challenge, then they are provided leave
granted by the company which is called disability leave but for this leave the salary of them
will not be deduced which means these are paid leave.

Maternity Leave:
Maternity leave may be granted by the competent authority to an employee for a maximum
three months period at a time. This flexibility is provided considering the labour law made by
the government. This is also a paid leave.

Findings & Recommendation:

Compensation and benefits which are provided to the employees are good but should be better
because employees of certain levels are satisfied but not all. So, AFBL should increase other
benefits according to their promotion and efforts. Moreover, AFBL should try to increase
compensation and benefits according to market standard analysis. One thing I like to mention
that AFBL provides life insurance policy which I have come to know while working there.
Therefore, I think the introduction of life insurance policy to their employees since other
organization of similar field have their life insurance policy. In term of promotion AFBL only
focuses to the increment of the salary. But I think it would be better and satisfactory for the
employee if they get other incentives and benefits along with the salary when they are
promoted. It is discouraging the senior most employees to continue their work at AFBL due to
the policy of not giving compensation benefits 60 ages above employees. Therefore, I think
they can review this policy considering for the job satisfaction of senior level employees.
Conclusion:
I am fortunate that I was given the opportunity to work in Electrical of AFBL and HR dept
official help me a lot. I also get to know that the HR practices of AFBL signifies standard in
relevant field. The best thing is that for working practically I have been able to have a
profound knowledge over the compensation. I came to know different compensation
strategies taken by AFBL which I can relate with my academic knowledge. AFBL ensures a
fair compensation policy for which the satisfaction level of employee is so high. Due to this
high job satisfaction of the employee regarding the compensation, the overall employee
turnover is quite negligible in AFBL. Finally, it is the mention that I was able to relate all my
academic HR knowledge with the real environment which is I think will be highly helpful for
my future career.