COMPENSATION

MANAGEMENT
PRACTICES IN MEGHNA
BANK LIMITED
 A report on,
Compensation Management Practices in Meghna Bank Limited

Submitted to:

Tamanna Parvin Eva

Senior Lecturer

Department of Business Administration

East West University

Submitted By:

Name ID
Sanjida Yasmin 2015-1-10-327
Mohammad Rahat Hossen Khan 2013-3-10-029
Md. Manna Sarder 2014-1-10-193
Nelove Chowdhury 2013-2-10-087

Date of Submission:

August 5, 2018
LETTER OF TRANSMITTAL

August 5, 2018
Tamanna Parvin Eva
Senior Lecturer
Department of Business Administration
East West University

Subject: Submission of the report on Compensation Management Practices in Meghna Bank

Limited, Bangladesh

Dear Madam,
It is our pleasure to submit the report on “Compensation Management Practices in Meghna
Bank Limited, Bangladesh” that you asked us to conduct. This report was assigned to us as a
partial fulfillment of “Compensation Management” course requirements. We came across
many hurdles and pleasant experiences while making this report. It helped us gain real life
knowledge on this course.
We sincerely hope that the report will meet your approval and its appraisal would
demonstrate our ability to prepare formal assignment report. There might have been some
errors or omissions in this report. We would like to seek your apology for that.
Thank you for your guidance and constant supervision to fulfill this report. We hope this
report will be up to the level of your satisfaction and open to any clarification on the report.

Sincerely yours,

Sanjida Yasmin (2015-1-10-327) : ___________________________

Mohammad Rahat Hossen Khan (2013-3-10-029) : ___________________________
Md. Manna Sarder (2014-1-10-193) : ___________________________
Nelove Chowdhury (2013-2-10-087) : ___________________________
ACKNOWLEDGEMENT

At first, our heartiest gratitude to our reverend teacher and advisor of this course, Tamanna
Parvin Eva, whose enthusiastic guidance and critical comments during the entire phase of the
study made it possible for us to prepare this term paper. Without her supervision, co-
operation and detailed instructions, our research on the Compensation Management Practices
of Meghna Bank Limited, Bangladesh would not come to the light. Our debt to her is warmly
acknowledged.

We would also like to convey our sincerest gratitude to those websites through which we
have gotten many data and information for preparing this term paper. Finally, our deepest
appreciation and regards to Mr. Asif Iqbal Tamim, principal officer of Human Resources
Division of Meghna Bank Limited for his help.
EXECUTIVE SUMMARY

This report was commissioned to analyze the compensation scenario in a services

organization. And Meghna Bank Limited was chosen by us for this purpose. The purpose of
the study was to gather practical knowledge regarding over all compensation and benefit
practices on a service organization. The report focuses on different aspects of Meghna Bank
Limited’s compensation system such as their procedure of fixing pay rates, developing
incentive programs, practicing benefit packages, their pay for performance and financial
incentives, compensation objectives, policies, techniques and so on.
Meghna Bank Limited is a fourth generation bank which has been efficiently managing its
customers since its inception with their mission to be among the best service provider in the
industry by ensuring complete customer satisfaction through the application of technology,
professionalism & nursing. Alongside, the bank is also efficiently managing their employees
because they know that without the satisfaction of the employees, they will not be able to
satisfy the customers.
By analyzing the compensation management practices of Meghna Bank Limited, we have
found that the bank maintains a very well designed and well implemented compensation
program. They follow systematic process for almost all the aspect regarding compensation
management. While fixing the pay rates, Meghna Bank Limited follows a procedure
consisting of six steps starting from job analysis to developing pay level and pay mixes.
Meghna Bank follows systematic procedure in developing incentive programs also. They first
investigate the market to know competitor’s available benefit packages. Then they identify
legal provisions and make a list of monetary and non-monetary benefits accordingly. They
determine some common benefits for all the employees and also decide job-specific benefits.
Last but not the least, they adapt periodical changes to match with the situation. The bank
manages its total compensation system by following four main steps. They first assess the
total compensation system, implement compensation plan, then communicate all the
information to the employees to maintain transparency and adapt periodical changes.
Through their compensation system, Meghna Bank tries to increase the overall performance
of the employees and thus of the organization. Their other objectives are to satisfy the
customers and stakeholders, to maintain fairness in compensation system and to comply with
law and legislation regarding compensation.
The strengths of Meghna Bank are that the practice fair compensation system by ensuring
that the right person is getting the right compensation. They maintain a good alignment
between corporate strategy and HR strategy. No gender biasness takes place and they believe
in equal opportunity for every employee. Both seniority and performance is recognized while
giving incentives. They provide many benefits such as gratuity, car and motorcycle loan,
health and medical insurance, termination benefit, free training workshops, festival bonus and
paid leave such as maternity leave, sick leave, accidental leave, disability leave, study leave
etc. Both individual and team incentives are provided. Most importantly, they have also been
able to balance between cost and employee contribution. After implementing the
compensation, they communicate the compensation system to the employees to maintain
transparency and also adapt periodical changes to the compensation package if necessary.
Some weaknesses have also been found from the analysis. The bank does not offer any gain
sharing option to its employees and do not have a stock option either. There is no overtime
payment for the employees which is a dissatisfying matter. As the bank is new and so is its
HR department, so there are still some lacking in terms of experience. Meghna Bank does not
provide any life insurance policy to any of its employees. The absence of life insurance may
discourage the employees to settle there. It does not provide any long service awards, which
may discourage the senior employees. It does not provide any free transportation ,free
accomodation and free medical services. There is no children day care facilities for the
employees which may discourage the female employees who have children. There is no
flexible benefit option. All benefits are standardized for all employees
Some changes can help the bank to improve their overall compensation system. Such as,
introducing flexible benefit option such as cafeteria approach, providing life insurance
policies, child care facilities, providing gain sharing options or stock options. It should also
provide paternity leave, overtime payment, long service awards etc. to motivate more
employees.
If Meghna Bank limited can improve those things then its compensation system will become
more effective and employee satisfaction and performance will further increase.
TABLE OF CONTENTS

1.0 INTRODUCTION...............................................................................................................1
1.1 Background of the Study..................................................................................................1
1.2 Objective of the Study......................................................................................................1
1.3 Methodology of the Study................................................................................................1
1.4 Scope of the Study............................................................................................................2
1.4 Limitations of the Study...................................................................................................2
2.0 COMPANY OVERVIEW...................................................................................................3
2.1 History of Meghna Bank Limited....................................................................................3
2.2 Vision, Mission and Goal.................................................................................................4
2.3 Organogram......................................................................................................................5
2.4 Services of Meghna Bank Limited...................................................................................6
3.0 LITERATURE REVIEW....................................................................................................7
4.0 ANALYSIS..........................................................................................................................8
4.1.0 Analysis of the Compensation system procedures........................................................8
4.1.1 Procedure of Fixing the Pay Rates.............................................................................8
4.1.2 Procedures of Developing Incentive Programs.........................................................9
4.1.3 Sequence of Practicing the Benefit Packages:.........................................................10
4.1.4. Procedure of Managing Total Compensation System to Ensure Accurate Pay......11
4.2 Analysis of pay for performance and financial incentives of Meghna Bank.................12
4.3 Analysis of Meghna Banks Compensation Objectives, Policy and Techniques............12
4.4 Analysis of Meghna Bank’s Benefit Options.................................................................13
5.0 FINDINGS.........................................................................................................................15
5.1 Strengths of Meghna Bank from the Analysis Part:.......................................................16
5.2 Weaknesses of Meghna Bank from the Analysis Part:..................................................17
6.0 CONCLUSION AND RECOMMENDATION.................................................................17
6.1 Conclusion......................................................................................................................17
6.2 Recommendation............................................................................................................18
7.0 REFERENCES...................................................................................................................19
8.0 APPENDIX........................................................................................................................20
1.0 INTRODUCTION

1.1 Background of the Study

This report was assigned to us by our course instructor Tamanna Parvin Eva as a practical
requirement of the course “Comepensation Management” under Bachelor of Business
Administration in the East West University. We are glad that we got the opportunity to make
this research on the compensation management system of Meghna Bank Limite. We got the
informations form Mr. Asif Iqbal Tamim, the principal officer of the human resource
department of Meghna Bank Limited. The report will enhance the knowledge of other
students to have an insight into the Compensation practices on a service organization.

1.2 Objective of the Study

Without objective nothing can be counted as a successful one. My internship program was
also directed to serve some particular objectives. The objective of the study is to gather
practical knowledge regarding over all compensation and benefit practices on a service
organization. Theoretical classes of BBA provide us theories regarding different subjects
where as practical training gives us the chances to view those systems and their operations.
Broad Objective: 
The main objective of this paper is to analyze the pay structure, benefits of employees of
Meghna Bank ltd.

Specific Objective:

•To identify the compensation package structure of Meghna Bank ltd.

•To evaluate the compensation structure of Meghna Bank in terms of its overall acceptability

•To point out the job satisfaction of employees due to the salary package which will lead to
understand the motivation.

1.3 Methodology of the Study

Primary data sources: 

Primarily data was collected through the questionnaire method that was conducted by the
Principal officer of human resources division of Meghna Bank ltd. Demographic information,
compensation system procedures, fixation policy of pay rates, incentive program and benefit

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packages, pay for performance and financial incentives, compensation objectives, policy and
techniques, questions related to benefit options etc. questions have been covered.

Secondary data sources: 

Secondary data was collected from different relevant sources.

The sources are:

▪Website address of Meghna Bank ltd.

▪Financial statements
▪Previous reports and publications on HR of Meghna Bank
▪Annual reports

1.4 Scope of the Study

The study will focus on the compensation management of Meghna Bank Limited; how they
perform and maintain compensation management. Also It will be discussed the current
compensation practices and policies of the same. I am lucky that I had a great opportunity to
have an in depth knowledge of compensation management practiced by the Meghna bank
Limited.

1.4 Limitations of the Study

While compiling the term paper, we faced some limitations which may affect the result of the
study a bit. Still we tried to make the study as authentic as possible.

 Unavailability of vital information as some data is highly confidential and cannot be

disclosed publicly;

 More time is necessary to understand all the complexities involved in the procedures;
Difficulty in relating theory to practice;

 The study is mainly based on secondary information so more in-depth analysis was not

possible;

 Limited knowledge and ability on our part to conduct the study more effectively

 Insufficient information is found from the annual report, company’s website regarding
the topic

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2.0 COMPANY OVERVIEW

2.1 History of Meghna Bank Limited

Meghna Bank Limited is a fourth generation bank which commenced its operations from
May 9, 2013. The memorandum and articles of association was signed by the sponsors in
March 2, 2013. The company was officially incorporated in March 20, 2013. The same day
the company received its certificate of commencement of business. The license was issued by
Bangladesh bank in 28 March, of the same year. The bank was enlisted as a scheduled bank
in 3rd April, 2013. The formal launching of the bank was held in April 21, 2013. The same
year, on May 8, the organization’s license was issued for opening the first branch- Principal
branch.
The company milestones are listed below-
Particulars Date

Memorandum and articles of association signed by the March 2, 2013

sponsors
Incorporation of the company March 20, 2013

Certificate of commencement of business March 20, 2013

License issued by Bangladesh Bank March 28, 2013

Enlistment as a scheduled bank April 3, 2013

Shifting to head office March 26, 2013

Formal launching of the bank April 21, 2013

License issued for opening the first branch- Principal Branch May 8, 2013

Commencement of business from the Principal Branch May 9, 2013

Currently the bank has 47 branches across different locations in Bangladesh. Their head
office is situated at Gulshan. It has 16 ATM locations in Bangladesh.
The Bank provides all types of support to trade, commerce, industry and overall business of
the country. Meghna Bank Limited’s finances are also available for the entrepreneurs to set
up new ventures and BMRE of existing industrial units.

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2.2 Vision, Mission and Goal

Vision:

The organization’s vision is to be recognized as an essential institution for the unbanked

through zealous participation in the financial inclusion process.

Mission:

Meghna Bank Limited’s mission is to be among the best service provider in the industry by
ensuring complete customer satisfaction through the application of technology,
professionalism & nursing.

Goal:

 To be recognized as the best quality bank in Bangladesh

 To provide a superior and consistent banking service to all customers
 To be long term partner of all stakeholders particularly customers by creating and
sharing value
 To be a trusted and solid financial trust mark

Their pay-off line “Together We Sail” exemplifies their commitment to contribute towards
building up an enlightened and prosperous nation.

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2.3 Organogram

FIGURE 1: ORGANOGRAM OF MEGHNA BANK LIMITED

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2.4 Services of Meghna Bank Limited

1. Savings Deposit Product:

Under this, they provide Regular Savings Account, Young star’s Account, Senior Citizen
Savings, Meghna Salary Account, Meghna SND Account and Sreyoshi Savings Account.
2. Meghna Scheme Products:
Here they provide monthly income Scheme, Money Multiplier Scheme, Meghna Child
Education Plan andMonthly Income Scheme.
3. Current Deposit Products:
Here they have Regular Current Account which facilitates carrying out day to day business
transactions.
4. Meghna Time Deposit:
They provide Fixed Deposit services and Meghna Bank Gift Check under this.
5. Meghna Loan Products:
Meghna Personal Loan, Personal Loan for Professionals, Meghna Home Loan, Meghna
Doctor’s Plan, Meghna Express Loan, Meghna Apon Aloy, Meghna Car Loan etc are the
services provided under this.
6. Meghna SME Products:
Meghna Nabarupa and Meghna Moushumi Rin are the two types of services under this.
7. Meghna Agri Products:
Here they provide loans for agriculture purposes. The loans include- Meghna Khamar Rin,
Meghna Poulty Rin, Meghna Fashal Rin and Meghna Motsho Rin.
8. Meghna Cards:
Meghna Debit Card, Meghna Visa Silver Credit Card, Meghna Gold Credit Card and Meghna
Card Discount Partner are some products included in this.
9. Meghna Bank Student life:
Meghna Bank provides support to the prospective students by processing their student’s files
and remitting funds in respective foreign currencies to meet expenses related to tuition fees,
accommodation and fees.

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3.0 LITERATURE REVIEW

According to an article of Kimberlee Leonard, keeping quality employees requires

providing the right compensation and benefits package. Compensation includes wages,
salaries, bonuses and commission structures. Employers shouldn't ignore the benefits portion
of employee compensation and benefits, because the benefits sweeten employment contracts
with the priorities that most employees need. A good compensation system has the ability to
attract top talents because people are always looking to put themselves in the best possible
position financially. Those who are worth a specific salary amount often know their value
and will seek a position that pays accordingly. Proper compensation also motivates the
employees because it shows them that the company values them as workers and as human
beings. So their morale increases. As a result, their job satisfaction also increases. The right
compensation program invests employees into the work being done, which gives them a
stronger sense of satisfaction when the company succeeds. Thus, the company’s overall
productivity increases. A proper compensation system also helps to create a sense of loyalty
among the employees as they feel valued by their company.
According to an article of Calvin Mabaso and Bongani Innocent Dlamini,
compensation plays an important role in determining an employee's level of  job
satisfaction. Reward practices linked to job satisfaction  have been applied differently
by public and private enterprises. Higher education is influential in the development
of a country, it does not only function as a provider of knowledge but as a pertinent
sector for the nation’s grown and societal well-being. The higher education
institutions play a significant role in development of skills, increased economy,
therefore, high quality of staff is required. Management at modern-day academic
institutions requires special endeavors to acquire and retain highly skilled employees
to operate effectively in an extremely competitive environment. Obviously, the level
of satisfaction of these individual employees will impact significantly on performance
at these institutions. Compensation is a useful instrument in the hand of the
management to contribute to the organizational effectiveness and can impact
positively on the behavior and productivity of employees. However, compensation
determines the attraction and retention of employees to attain organization objectives.
According to an article of Jiayi Bao and Andy Wu, equity compensation is widely used for
incentivizing skilled employees, particularly in new technology businesses. Traditional
theories explaining why firms offer equity suggest that workers with higher rank should
receive compensation packages more heavily weighted in equity. However, it is observed that
the puzzle that many firms adopt an equality-in-equity strategy: they offer different cash
salaries across all jobs but the same equity compensation.
According to an article by Ahmed Abdul Qader, Human Resource Management (HRM) has
never been as significant as it is today. Companies want to attract, retain and motivate brains
to meet objectives. Today Humans are regarded as one of every company’s assets so they
need to be efficiently and effectively managed. One of the tools companies use to attract,
retain and motivate its people is Compensation Management. Employees today are not
willing to work only for the cash alone, they expect 'extra'. This extra is known as employee
benefits. A well designed compensation and benefits plan helps to attract, motivate and retain
talent in the firm

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According to an article of Joanne Sammer, Some workers welcome being paid for overtime
hours worked; others felt demoted when told that they would be paid hourly. For employees
who like their change to nonexempt status, it might be worthwhile to keep it in place, even
though the Department of Labor's new overtime rule raising the salary limit has been put on
hold. But if employees felt demeaned by being reclassified as nonexempt, consider reverting
them back to exempt status, an employee relations expert advised.

4.0 ANALYSIS

Meghna Bank Limited has well organized and properly communicated compensation system.
They try to provide a competitive and fair compensation and benefits to the employees of all
level of the organization.
According to the questionnaire, we have tried to divide the whole compensation management
practise of Meghna Bank limited in four major parts. Those are-
1. The analysis of compensation system procedures
2. The analysis of pay performance and financial incentives
3. The analysis of compensation objectives, policy and techniques
4. The analysis of benefit options

4.1.0 Analysis of the Compensation system procedures

Meghna Bank Limited do have a compensation and benefit policy for the betterment of the
employees and the organozation itself as well. Their main comoensation objectives is to
increase the efficiency of the organization as well as to ensure fairness as well as to maintain
legal compliances.

4.1.1 Procedure of Fixing the Pay Rates

They fix pay rates of employees through 5 sequential steps. Those are-
1. Job Analysis: It is a systemic process through which the collect information about the
similarities and dissimilarities the work. Based on the analysis, they create job
descriptions.
2. Job Evaluation: Here they compare the job with one another to get the value of each job
for internal pay structure.
3. Selecting Benchmark Jobs: They select some benchmark jobs to compare with the
competitor’s pay structure. Benchmark jobs are those which contents are well known and
relatively stable over time. And these jobs are common across a number of different
employers.
4. Market Survey: Here they conduct a survey on their relevant market competitors to
know how those competitors are assigning value to similar jobs.

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 FIGURE 2: SEQUENCE OF FIXING PAY RATES

5. Develop Policy Lines: Finally they develop a policy line to identify pay grades and pay
ranges
6. Fixing Pay rates: In this step, they fix pay rates through developing pay level and pay
mix for employees.

4.1.2 Procedures of Developing Incentive Programs

Meghna Bank Follows a systematic way to develop incentive programs for the employees.
Those are as follows-
 Market Survey: To design incentives programs in a competitive manner, Meghna Bank
conduct a market survey to know what kind of incentive packages are offered by their
competitors
 Seniority Based Pay: Meghna Bank has some rules for seniority based pay. There are
some positions where they give seniority more importance to decide pay.
 Individual Incentives: They provide some individual incentives based on performance
and merit to motivate the employees.
 Group Incentives: For team projects, they arrange group incentives for the best
performing team

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 FIGURE 3: PROCEDURE OF DEVELOPING INCENTIVE PROGRAM

4.1.3 Sequence of Practicing the Benefit Packages:

For practicing benefit packages, Meghna Bank follows the following sequence-

FIGURE 4: SEQUENCE OF PRACTICING THE BENEFIT PACKAGES

1. Investigate the market: They investigate the market to know competitor’s available
benefit packages so that they can match with the market.
2. Identify Legal Provisions: Meghna Bank then identifies the legal provisions regarding
the employee benefits so that it can comply with all the rules.
3. Decide and Create List of Monetary and Non-Monetary Benefits: Here they decide
what types of monetary and non-monetary benefits they are ready to pay and then create a
list of those benefits.
4. Determine Common Benefits: Then they determine some common benefits for all the
employees of their organization.
5. Recognize Job Specific Benefits: At this stage they recognize the job specific benefits
based on the nature of the particular jobs.
6. Evaluate and Adapt Changes: They periodically evaluate the benefit packages and
adapt any kind of changes that are needed as per market trend.

4.1.4. Procedure of Managing Total Compensation System to Ensure Accurate Pay

In this procedure, they follow four steps-

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 FIGURE 5: PROCEDURE FOR MANAGING TOTAL COMPENSATION SYSTEM TO ENSURE ACCURATE PAY

1. Assessment of Compensation System: First of all they assess the total compensation
system through creating proper balance between cost and contribution.
2. Implementation: Then they effectively implement the compensation plan after overall
assessment to achieve the objectives of compensation system.
3. Communication: At this stage, they communicate their compensation system to their
employees by providing them with exact information about the system so that no one is
dissatisfied.
4. Periodical Changes: Whenever any new situation arises, they adopt periodical changes
to meet the situation.

4.2 Analysis of pay for performance and financial incentives of Meghna Bank

Regarding the pay for performance and financial incentives, Meghna Bank has the following
practices-
 The bank has individual merit pay program
 It offers some non-financial and recognition awards depending on both individual
performance and team performance
 The organization practices both years of service and performance based promotion
activities
 The organization has a profit sharing program of 5%
 Meghna Bank does not offer any stock-option schemes to its employees
 It does not have any gain sharing plans for employees
 It does not pay anything for overtime work

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4.3 Analysis of Meghna Banks Compensation Objectives, Policy and Techniques

According to the survey answers, Meghna Bank Limited’s compensation and benefit schemes
comply with the government regukations. It’s compensation syste is able to attract, motivate
and retain tallented employees. They believe that the compensation system has a positive
impact one the quantitative and qualitative employee performance. And it als helps to reduce
employee turnover, absenteeism and industrial conflict. Their compensation system is also
linked with their business strategic plans and thus able to create shareholder’s value.
Employee devotion and commitment are infuenced by this compensation system. It is also
believed that their compensation system makes a progressive contribution to the overall
effectiveness of the organization. They also claimed that their compensation system has been
designed to ensure equity and employee satisfaction. A good compensation system helps to
ensure organizational citizenship behavior of employees. They believe that a well designed
and competitive compensation system helps to create an employment brand in the market.
Compensation policy is able to create balance between organization cost and employee
contribution.
According to their answers, Meghna Bank Limited’s Pay Model is shown in the next page-

FIGURE 6 THE PAY MODEL OF MEGHNA BANK LIMITED

4.4 Analysis of Meghna Bank’s Benefit Options

Meghna Bank provides different benefits to their employees. These Include-

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 Contributory Provident Fund: Meghna Bank Limited to provide provident fund to their
employees, but this is contributory provident fund. Means the employees contribute to
their own provident fund. An amount is cut each month from their salary to contribute to
provident fund. 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 calculated upon his service period which means those employees will not be able to
claim the other 10% provided by the company

 Gratuity Fund: It is a terminal benefit that an employee receives at the time of

retirement/resignation. In Meghna Bank, an employee becomes eligible for this benefit
only when he works five years in the bank.

 Health and Medical Insurance: Meghna Bank provides some health and medical
insurance to their employees. But they do not provide any free medical services to the
employees.

 Free Training Workshops: Meghna Bank arranges some training workshops for the
development of their employees. And these workshops are completely free of cost for the
employees.

 Car and Motor Cycle Loan: The employees of Meghna Bank are allowed to take loan
for car or motorcycle form the bank at a low interest rate. But to be eligible for that loan,
an employee has to work for minimum 3 years in the company. Also, this loan is not
applicable for all positions.

 Maternity Leave: Meghna Bank provides 6 months with pay maternity leave to its
female staffs. On this leave, no salary is cut. And on returning, they are assigned to their
previous positions.

 Study leave: There is a fantastic opportunity for the employee of Meghna Bank Limited.
The employees who perform extensively well and show gratitude of benefits that they can
contribute for the sake of company are entitled for recommendation to study. Generally,
the employees are recommended to get 3 years paid leave for their studies but all the
employees do not get this advantage because it is for those who are really high performer
are to authorize to get the full payment to continue their studies.

 Sick Leave: 14 days sick leave with pay is provided to the staffs of Meghna Bank each
and every year.

 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.

 Accidental Leave: Every employee can take this leave due to accident in workplace, in
case of hospitalized because of accident or surgery issues. Meghna Bank Limited
provides 3 weeks with pay for accidental leave for accidental or surgical issues to its
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 employees. It more leave is required on this purpose, employees can take more leave, but
that extra leave will be unpaid leave.

 Termination Benefit: In case a confirmed employee is asked to resign from his/her

services by the relevant authority without stating any reason, he/she is eligible to receive
one month’s notice in writing or one month’s gross salary as payment. If the employee is
duly notified with one month’s notice, he/she will not be entitled to receive any form of
compensation for the termination of services.

 Festival Bonus: Meghna Bank Limited provide 2 festival bonuses to its employees. One
in Eid-Ul-Azha and another in Eis-Ul-Fitr. Festival bonus is paid to all confirmed
officers/staff at one month basic salary which is reimbursed twice in each calendar year.

 Weekly Holiday: Two holidays (Friday & Saturday) per week for the employees of
Meghna Bank.

5.0 FINDINGS

Meghna Bank Limited is striving towards achieving its goal of being the best quality bank in
Bangladesh and providing a superior and consistent banking services to all the customers.
The bank not only focuses on the needs of the customers but also on the needs of the
employees. To keep all the employees satisfied, they try to provide a good compensation
system which maintain fairness and equity. From the analysis of the compensation
management practices of Meghna Bank Limited, we have found that the bank maintains a
very well designed and well implemented compensation program. The finding that we can
highlight are-

 While fixing the pay rates, Meghna Bank Limited follows a procedure which has 6 main
steps. They first conduct a job analysis where they collect information about different job
aspects, compare similarities and dissimilarities among jobs and prepare job description
and job specification. Then they conduct job evaluation to identify the value of each job
for internal pay structure. Then they select benchmark jobs. After that they conduct
market survey to know what their competitors are paying for those benchmark jobs. The
finally, they develop policy lines and decide pay level and fix pay rates.

 Meghna Bank also follows a systematic way in developing the incentive programs for
their employees. To maintain external competitiveness, they conduct market survey to
identify the incentive packages provided by their competitors. Meghna Bank gives
seniority based pay and also provides individual incentives to the best performers to
motivate them. Team incentives are also provided to the best performing team.

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 While practicing the benefit packages, Meghna Bank follows 5 sequential steps. They
first investigate the market to know competitor’s available benefit packages. Then they
identify legal provisions and make a list of monetary and non-monetary benefits
accordingly. They determine some common benefits for all the employees and also
decide job-specific benefits. Last but not the least, they adapt periodical changes to match
with the situation.

 Meghna Bank manages its total compensation system by following four main steps. They
first assess the total compensation system, implement compensation plan, then
communicate all the information to the employees to maintain transparency and adapt
periodical changes.

 Through their compensation system, Meghna Bank tries to increase the overall
performance of the employees and thus of the organization, to satisfy the customers and
stakeholders, to maintain fairness and to comply with law and legislation regarding
compensation.

5.1 Strengths of Meghna Bank from the Analysis Part:

There are many strengths of Meghna Bank Limited. Among those, the major strengths are
listed below-
 Provides excellent banking services to all of its customers

 Meets the needs of a variety of customers such as students, senior citizens, women,
farmers and other enterprises

 Have many branches and ATM booths across the country

 Provides good working environment to its employees

 Practices fair compensation system

 Makes sure that the right person is getting the right compensation

 There is a good alignment between corporate strategy and HR strategy

 There is no gender biasness in their compensation system

 They believe in equal opportunities for every employee

 Both seniority and merit is recognized in Meghna Bank

 They maintain external competitiveness while designing compensation package

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 Both individual and team incentives are provided for motivation

 Their compensation policy has maintained balance between organization cost and
employee contribution

 After implementing the compensation, they communicate the compensation system to the
employees to maintain transparency

 They adapt periodical changes to the compensation package if necessary

 They provide many benefits such as gratuity, car and motorcycle loan, health and
medical insurance, termination benefit, free training workshops, festival bonus etc.

 They provide many paid leave such as maternity leave, sick leave, accidental leave,
disability leave, study leave etc.

5.2 Weaknesses of Meghna Bank from the Analysis Part:

There are some weaknesses that we have found. Those are-

 The bank does not offer any gain sharing option to its employees

 They do not have a stock option for the employees

 There is no overtime payment for the employees which is a dissatisfying matter

 As the bank is new and so is its HR department, so there are still some lacking in terms of
experience

 Meghna Bank does not provide any life insurance policy to any of its employees. The
absence of life insurance may discourage the employees to settle there

 The bank does not provide any long service awards, which may discourage the senior
employees

 There is no children day care facilities for the employees which may discourage the
female employees who have children

 The bank follows a completely top down approach for deciding compensation and other
benefits

 There is no flexible benefit option. All benefits are standardized for all employees

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6.0 CONCLUSION AND RECOMMENDATION

6.1 Conclusion

Meghna Bank Limited is always trying hard to satisfy both their customer and employees.
Because without satisfying the employees, customer satisfaction can never be achieved. In
order to keep the employees satisfied and motivated, Meghna Bank Limited practices a well-
designed and well implemented compensation system. They try to follow a systematic
procedure in all the activities related to compensation such as, fixing pay rates, developing
incentive programs, practicing benefit packages and managing the total compensation system.
They try to remain up to date with the external market so that they can maintain external
competitiveness. While designing the compensation and benefit packages, they make sure
that it is aligned with their corporate strategy. They always comply with government laws
related to compensation. And through effective compensation management, they have
ensured good performance of the employees and organization, satisfaction of customers and
all stakeholders and also fairness has been maintained. But still there are some lacking in
their overall compensation system which has been discussed earlier. If Meghna Bank limited
can improve those things then its compensation system will become more effective and
employee satisfaction and performance will further increase.

6.2 Recommendation

Based on our observation, we have found some lacking in Meghna Bank’s overall
compensation system. To overcome those shortcomings, we have made the following
recommendations-
 Meghna Bank should arrange some training programs for its compensation managers to
be more efficient in this matter

 It should introduce gain sharing plan in order to motivate the employees

 Stock options should be made available. If it is not possible to offer it to all the
employees, then at least executive level employees should be provided with this option so
that they feel a sense of ownership and put more effort for the success of the organization

 They should pay for working overtime. There are many methods to decide overtime
payment. The bank can select any one of those methods

 They should follow a bottom up approach in deciding the compensation packages so that
all the employees are satisfied.

 Meghna Bank can offer flexible benefit program, such as cafeteria approach so that the
employees can choose their own benefits according to their needs. Here the bank can fix a

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 budget for each employees benefit, but the benefits will be chosen by the employees
themselves.

 It should provide life insurance policies to their employees

 The bank may introduce long service awards in order to encourage the employees to stay
with the organization for a long time

 They can provide child care benefits so that female employees can maintain work-life-
balance.

 They should introduce paternity leave

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7.0 REFERENCES

1. Meghna Bank Limited Home Page

http://www.meghnabank.com.bd

2. Importance of Compensation in the Workplace

https://smallbusiness.chron.com/importance-compensation-workplace-38470.html

3. Impact of Compensation and Benefit on Job Satisfaction

https://scialert.net/fulltextmobile/?doi=rjbm.2017.80.90

4. Compensation and Benefits: Definition and Importance

https://www.linkedin.com/pulse/compensation-benefits-definition-importance-ahmed-
abdul-qader

5. Equality and Equity in Compensation

https://hbswk.hbs.edu/item/equality-and-equity-in-compensation

6. Undoing Overtime Pay Changes Could be Tricky

https://www.shrm.org/ResourcesAndTools/hr-topics/compensation/Pages/undoing-
overtime-pay-changes.aspx?+Benefits+News%29

7. Compensation (9th Edition)

By George T Milkovich, Jerry M Newman and C S Venkata Ratnam

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8.0 APPENDIX

1. Business Card
2. Questionnaire

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