Cox’s Bazar International University

Assignment On:
“HRM Practice in private & public sector in Bangladesh”

Submitted By:

Name: Md. Imrul Khan

Id: 200112000142

Batch: 11th (RMBA)

Submitted To:

Adita Barua

Lecturer

Faculty of Business Administration

Cox’s Bazar International University

Submission Date: 17.04.2020

Abstract

The aim of this study is to assess HRM practices in Bangladesh. Based on secondary sources, we explain the
institutional contexts of the four main generic HRM functions: recruitment and selection, training and
development, pay and performance appraisal and industrial relations practices. Here, we also highlight recent
developments and future challenges with regard to HRM practices. While credible research on HRM practices
in Bangladesh is still rare, this study will be beneficial to researchers and HRM practitioners interested in
Bangladesh.

Introduction

Human Resource Management is the process of managing and monitoring the employees in an organization
with a proper system. The worldwide HR management system incorporates several processes like recruitment,
monitoring, storing data, payrolls, administration, and attendance data and so on. This worldwide system is
applicable to Bangladesh too, so the practice of the HR Management System in Bangladesh is similar here.

After so many years of liberation war recently for several years, Bangladesh has seen an upward and positive
trend to human resource management. The reasons behind that are the economic warm-up and better education.
Most of the organization has established a separate department for human resource management.

Since gaining independence in 1971, Bangladesh has been progressing gradually towards its dream of a hunger
and poverty free society. Initially, the government of Bangladesh followed a socialist economic model. As a
result, the government and policymakers did not prioritize issues such as private sector development,
industrialization, competitiveness and human resource management. However, after shifting its economic
policies from socialism to a free-market economy in the early 1990s, Bangladesh achieved commendable
economic growth and now has an industry contribution to GDP of about 28.5 per cent. Bangladesh is predicted
to become the world’s 23rd largest economy in terms of PPT by 2050. To become a middle-income country by
2021, given the country’s limited natural resources and abundance of human resources, the efficiency and
efficacy of HRM practices could be pivotal and driving forces for Bangladesh’s economic development.

However, the current state of HRM practices is far below the level Bangladesh needs to achieve. Most
organizations are family owned and controlled by family members, and human resource management activities
tend to be viewed as just a company owner’s wish. But in recent years, labor intensive and export-oriented
industries have begun experiencing pressure from the EU and North American countries to maintain their labor-
rights standards and to improve their factories’ working conditions. This pressure from outside the country is
compelling organizations to change their corporate culture and HRM practices. Researchers have indicated that
improved working conditions and better wage rates could improve the productivity and the profitability of
organizations in Bangladesh. Therefore, these organizations need to develop systematic and efficient HRM
practices to be competitive globally and to cope with the changing needs of the economy. However, in a family
or crony capitalism situation, employers have yet to realize, or be convinced, that it would be in their best
interest to adopt systematic and effective HRM practices. Empirical research on HRM in Bangladesh is still
rare, and only a few studies have been published, usually on specific issues of HRM practices, in recognized
and credible journals. Thus, the current study could pioneer an under- standing of the past, present and future of
HRM in Bangladesh, which would be immensely beneficial to students, researchers, academics, business
executives and policymakers. In addition, this study should encourage first-generation Bangladesh
entrepreneurs and corporate managers to develop systematic HRM practices and, thus, gain a competitive
advantage from the country’s available human resources.

Methodology

Mainly I have collected data from Secondary sources. These are as following:

The secondary sources of my information are as below:

 Website
 Desk report of the related department.
 Other manual information.
 Different reference books of the library
 News paper
 Articles
 Internship report

Current HRM Practices: A Critical Assessment

Recruitment and Selection Practices in Public Sector Organizations:

The Bangladesh Public Service Commission conducts all recruitment and selection activities for public sector
organizations on behalf of different government ministries, departments and divisions, as well as different
individual enterprises. Civil service officials in Bangladesh are categorized horizontally into 29 cadres and
vertically into six ranks in different ministries and departments. The competitive examination conducted by the
PSC is known as the Bangladesh Civil Service examination and it assesses applicants’ knowledge on various
compulsory and elective subjects, a psychological test and an interview. Then, the scores in each of these
components are combined to indicate an applicant’s overall performance from different perspectives. The
recruitment rules formulated by the Ministry of Establishment prescribe the method of recruitment qualification
of candidates, age limit, syllabi for examinations and other aspects of the selection process of BCS cadre
officials.

However, civil service recruitments in Bangladesh have been characterized by irregularities, inconsistencies and
political intervention. Furthermore, political leaders have tried to control bureaucrats by recruiting similar
ideological applicants into the civil service. Now, the PSC has become an instrument of political patronage and
is blamed for anomalies and unfairness in the civil service recruitment process. Civil service officers recruited
in different years are labelled by some as “Political Cadres” because of the direct influence of political leaders
in the recruitment process. In fact, the selection process in the civil service examination left considerable room
for political leaders to influence recruitment, because these leaders selected members of the PSC based on the
members’ ideological orientation. The formation of interview boards, appointment of psychologists, the
subjective judgement of applicants’ suitability and the importance placed on oral interviews all provide
opportunities to manipulate the selection process.

The recruitment of non-managerial employees is usually within the jurisdiction of unit or plant managers. These
managers, in consultation with the corporation or ministry-level personnel officers, determine the educational
requirements, grading, pay structures and other aspects of jobs. Public sector organizations need to advertise
regular or permanent jobs in the newspapers and maintain a formal selection procedure. However, in most
cases, unsolicited employees are recruited on a part- time or job-sharing basis after recommendations from
existing employees and other pressure groups, and are later absorbed into permanent posts or vacancies within
the government guidelines. The selection procedure for non-managerial employees usually involves a written
general knowledge test and an interview, which explores their basic ideas about the relevant job. However,
whilst there are formal, specific policies guidelines in the government departmental recruitment and selection
procedure, in practice, organizations recruit employees without necessarily having vacancies. In addition, when
vacancies do exist, they are filled on ad hoc basis before being advertised externally. In reality, it is impossible
to secure employment in public sector organizations without having contacts within the organizations or with
influential people of the ruling government party.

Recruitment and Selection Practices in Private Sector Organizations:

Private sector owners and managers consider the recruitment and selection of employees a personal matter and
use informal recruitment channels. Private sector organizations are not bound by legal requirements to advertise
jobs in the press or to maintain any formal recruitment and selection process. They recruit as and when they feel
it necessary, and appoint those whom they consider suitable after personal consideration. Friendship and kinship
tend to take precedence over qualifications and skills as owners/managers fulfil their social obligations to
support relatives and friends. However, they do need to consider the requests of political leaders and other
influential groups to run their business well. Failing to do so can make it difficult to obtain business loans, get
necessary permissions from government offices, maintain the security of business sites and result in other
unnecessary difficulties created purposely by the aggravated parties.

Most private sector organizations tend to recruit relatives to top positions. Thus, practices related to promotion,
transfer, and benefits are manipulated according to social contacts and personal relationships. Sometimes,
private sector organizations do advertise in newspapers, but only for jobs requiring higher-level technical
competencies that cannot be found among friends and relatives. The influence of social contacts and personal
relationships on recruitment is more open and socially acceptable in private sector organizations. These
employers also tend to avoid a professional approach based on formal rules when recruiting because they
perceive these rules as a threat to their power and ability to control the business. Occasionally, a private sector
organization will place an advertisement ostensibly to recruit managerial employees. However, in reality, these
advertisements are more company publicity than genuine recruitment initiatives.

The high unemployment rate and stiff competition for limited job opportunities also put pressure on top
management to engage in nepotism by favoring friends and relatives in their recruitment and selection practices.
The large labor market means there is a permanent supply of employees, and organizations seldom find it
difficult to recruit or retain suitable employees. Occasionally, experienced employees may move elsewhere for
better pay and other facilities.

In the expanding economy, newcomers to an industry usually use head-hunters to recruit top-level managerial
employees, and use informal channels to find suitable persons. The Bangladesh government has no regulations
in place to control the recruitment and selection activities in the labor market.

Another important factor may be the characteristics of the production system in Bangladesh, as most businesses
remain as small or medium enterprises and engage in labor-intensive activities. In this situation, employers can
rely on unskilled employees and have few problems with word-of-mouth recruitment practices. Most private
sector businesses are still owned and managed by family groups, and first-generation entrepreneurs dominate all
business sectors. These entrepreneurs maintain social networks within family, clan, caste or ethnic groups and
need to cater to requests from the state and its bureaucracy. This dependency between state and organizations
has resulted in reciprocal relationships among the interest groups, and mutual “give and take” is
institutionalized in every sphere of Bangladeshi society. The country’s financial system is still in its infancy,
and private sector organizations depend completely on personal finance and bank loans from government-
controlled financial institutions. Business owners need to convince politicians to sanction bank loans, and
political leaders need financial sponsors to prevail within the electoral process. Thus, private sector
organizations have to maintain good relations with government officials and political leaders for business
reasons. In public sector organizations, the top management needs to maintain good relations with politicians in
order to keep these important positions, and are obliged to obey the requests of those in government.

Training and Development in Public Sector Organizations

For the public sector employees, the government, through the Ministry of Establishment, selects the trainees and
determines training programed unilaterally, without any consultation from the respective ministries. The
Ministry of Establishment determines the contents of the training courses and vests the responsibility in the
Public Administration Training Centre, which imparts foundation training to all civil service cadre officers. In
addition to the PATC, there are training institutes in Bangladesh that train civil service officers and other
officials of the government’s autonomous organizations. Most such training institutes only engage in orientation
training, or foundation training, for different categories of employees under the respective departments.

In fact, the government allocates very little money to employee training and development programmed in the
annual budget. However, it does occasionally initiate special training programmed for particular government
officials with the bilateral agreement of donor countries or multilateral organizations. Whenever such
opportunities arise, the top officials of the ministry or departmental heads unilaterally select the trainees,
without conducting any training needs or job requirements analysis. In most cases, trainees are identified based
on their personal relationship with the top officials or their links with the political leadership of the relevant
ministry who ultimately decide on the senior officials. In government departments, employees obtain promotion
solely based on seniority, irrespective of merit, performance or additional qualifications.

In public sector manufacturing organizations, employees have very few opportunities to undergo any training
programs, despite the fact that some organizations do have formal training departments. Most training is
conducted on an informal and on the job basis, and only a few organizations have well-structured internal
training programs. A few public sector organizations organize training programs for different levels of workers
and supervisors through their own training centers. However, trainees are rarely selected using a training needs
analysis or performance appraisal procedure. Managerial judgement on who receives training is subjective,
being the prerogative of the chief executive of the organization, and as elsewhere, employees are chosen
according to their personal relationship with top officials and their political affiliations. Furthermore, whenever
any training opportunity arises, employees try to manipulate the selection process using the political leaders
who hold the most power at the ministry level. Similarly to the situation in government departments, training or
further qualifications do not bring any benefit or career progression opportunity for the employees. Instead,
promotion depends on the seniority determined by the entry-level selection tests, and on political links with
higher-level positions. In most cases, employees see training as a reward from the higher management, which
may result in extra money or a short break from routine work.
The main limitation of government training programs is that training or qualifications do not benefit employees,
as these activities seem not to have any impact on their career path or promotion opportunities. In public sector
organizations, promotion or career advancement is not linked with further skill development and qualification
acquisition, but rather depends on seniority and interventions from canvassers and peers. Employees have no
scope to avoid the entry-level seniority list to obtain promotions and career progression.

Training and Development in Private Sector Organizations

Training of human resources has yet to rise from its neglected position in private sector organizations in
Bangladesh, which still do not perceive the need for training and development activities for both employees and
managers. In an economy with a huge labor surplus, training initiatives are considered a cost rather than an
investment for organizational development, and in private sector organizations, there are few systematic
training practices for employee development. In general, training is considered the responsibility of employees,
although some companies, most notably, pharmaceutical companies, are beginning to understand its
importance.

The indifferent attitudes of both management and worker organizations in a labor surplus economy like that of
Bangladesh, coupled with large-scale ignorance about the need for training programs for workers hinder the
initiation and implementation of training programs. Industry and the educational institutes are not linked and,
consequently, industry has no influence on the development of courses, curricula, or other instructional
processes within the educational and training institutions. Most trade unions are busy in bargaining and the
settlement of industrial disputes, and have little or no time or energy to organize workers’ training programs. As
a result, the training programs that do exist have not proved relevant or useful to industry. Another important
issue is determining priorities in terms of skill development. This issue remains unresolved since policymakers
and civil society representatives are divided on whether technical or general education should be emphasized.

Pay Structuring and Job Grading in Public Sector Organizations

The government created the National Pay Commission to design the pay structure of public sector organizations
and, in 1997, the NPC recommended a 20-grade pay structure for public sector employees, excluding workers
in manufacturing organizations. Although the basis of this pay structure is not explicitly clear, the NPC adopted
the historical categorization of employees used by the British government. Accordingly, there are four broad
categories of employees: Class I (officers/ executives), Class II (junior officers), Class III (clerical/secretarial)
and Class IV (custodial). In addition, there are four direct entry-level tiers, three promotion tiers, and two
conversion tiers.

For employees of public sector organizations, the government formed the National Pay Commission and the
National Wages and Productivity Commission to formulate two separate pay structures. The NPC recommends
the pay structure, salary and benefits for employees in the non-manufacturing sectors, while the NWPC
recommends the wage structure for those in the manufacturing sector. Both commissions consider four main
parameters when recommending wage and salary structures and benefits:

(a) The minimum wage should be adequate to provide for the basic needs of a worker’s family, comprising
three adult consumption units,

(b) Industrial wages should be higher than agricultural or rural wages, and the wage of official employees,
(c) Wages should be linked to productivity and

(d) The ability of the enterprises to pay should be considered.

The formation of a separate wage structure for manufacturing workers was justified on the grounds that
manufacturing workers at the lower grades perform more demanding manual/physical work than do lower-
grade non-manufacturing employees. In addition, manufacturing requires more grades to provide promotional
opportunities to the workers because of their limited upward mobility to supervisor or managerial positions.

Pay Structuring and Job Grading in Private Sector Organizations

Formal private sector pay structures follow two main procedures. Sectors in which collective bargaining is
absent, owing to the non-existence of effective trade unions, use minimum wage provisions, while unionized
organizations use collective bargaining arrangements at the enterprise level. Owing to the level of private sector
development, most local private sector organizations have not yet developed any formal or institutionalized pay
structure for their employees. Except for a few large organizations, employees’ pay or salary is determined in an
arbitrary way, rather than any formal structure or grade. The pay structure in large private sector organizations
has some similarities with that in public sector organizations. Usually, there is one pay structure for managerial
employees and another for non-managerial employees. In the absence of any legal obligations and state
regulations, management unilaterally designs the pay structure for managerial employees. Almost no local
private sector organizations follow any established pay structure for managerial employees. Usually the head of
the organization decides the salary of the managerial employees after discussing the jobs with departmental
heads. Non-managerial employees’ pay structure is determined through consultation and bargaining with
Collective Bargaining Agents, and usually consists of 8 to12 pay scales/grades, depending on the organizational
HR policy and CBA-management bargaining outcomes. Although blue-collar and white-collar employees’ pay
grades are included in a unified pay structure, the differences in employee categories is explicit in the pay
structure of different organizations.

Industrial Relations Scenarios in Public and Private Sector Organizations

In Bangladesh, the nature and role of trade unions vary from sector to sector, industry to industry and region to
region.

Collective bargaining on pay and allowances is prohibited in public sector organizations as the government
determines uniform pay scales and allowances for all public sector organizations. Trade unions deal only with
industrial conflicts and other issues, such as applying labor laws, improving working conditions, adopting
welfare programs for workers and the education and training of workers. This limited scope of collective
bargaining forces trade unions to develop links with the influential actor (i.e., the government) to achieve their
goals. As a result, industrial relations involve the interaction between political parties and trade unions rather
than between enterprise management and worker representatives. In the private sector, collective bargaining
negotiation takes place at the enterprise level between management and the union. If there is more than one
union, then employer–employee negotiations take place between the management and the collective bargaining
agent. The recognition of a workers’ organization for the purpose of collective bargaining depends on the
individual employer and the strength of the workers organization. In the private sector, the industrial relations
process is often disturbed by links between private and public sector unions, as well as the influence exerted by
the latter on the former. Aggravated violence in the public sector often spills over to surrounding privately
owned factories.

Emerging Trends of HRM Practices in Bangladesh

Though HRM in Bangladesh still resembles traditional personnel management practices, in recent years,
researchers have identified changes that indicate progress in terms of strategic HRM practices. First, the role
and importance of HRM is increasing in organizations in Bangladesh. Many large organizations have already
established separate HRM departments and hired professional HRM personnel with relevant education,
knowledge and experience. A few organizations have even upgraded the status of HRM managers and
incorporated the head of the HRM department on the corporate board. The development of professionalism and
the establishment of professional associations and organizations may have prompted this elevation of HRM
roles, because it has changed the attitude and perception of business communities towards the importance of
HRM practices. The government, with help from the World Bank, established the Bangladesh Institute of
Management, which offers specialized degrees and diplomas in HRM and related areas. Most public and private
universities in Bangladesh now also offer Bachelor of Business Administration and Master of Business
Administration degrees, with specialization in HRM. In addition to the educational institutions, two professional
associations, namely, the Institute of Personnel Management and the Bangladesh Society for Human Resource
Management, have been formed by recognized HRM specialists to promote the HRM profession and
development of HRM practices in Bangladesh. The BSHRM is organizing annual HR conferences on regular
basis and working to develop professionalism among the HRM managers of the country. The contribution of
BSHRM is widely recognized by the global HR community, and it has granted membership of Asia Pacific
Federation of Human Resources Management and the World Federation of People Management Association.
Therefore, further developments in terms of HRM practices and recognition HRM professions are expected in
near future.

Second, shifts in recruitment and selection practices are also visible in Bangladesh. Private sector organizations
are beginning to emphasize competency-based approaches in their recruitment and selection practices.
Organizations are moving away from the traditional view of educational qualifications and experience to one
focused more on individual achievements and work-related competencies. Employers are changing their focus
from “what” to “how” to use qualifications and knowledge criteria. In the context of huge levels of
unemployment, where sometimes more than 1000 applicants vie for a single position, educational achievement
is still used to reduce the number of applications to a manageable figure. However, because competencies are
assessed in a subjective manner, the manipulation of such criteria may still occur. As the HRM profession gains
momentum and HRM managers become better equipped, the use of competency models appears to be more
widespread. The dissemination of competency-based practices from multinational corporations and
international organizations is quite evident in different sectors.

Globalization has changed the landscape of modern workplaces, and organizations are facing continuous
automation and technological challenges in the changing nature of their business. These technological changes
have placed increased pressure on organizations to update employees’ knowledge and skills in order to compete
in the global arena. The pace of industrialization in Bangladesh also has intensified the competition for talented
employees among organizations. To cope with the competition, organizations are now realizing the importance
of investing in employee training and development activities, and are establishing separate human resource
development departments, including specialized professionals and experts. In some cases, the appointment of a
Human Capital Manager or Talent Development Manager indicates the increased presence of HRD activities in
Bangladesh. Attitudes towards employees are changing. Rather than considering employees as a cost or
negligible resources, employers are realizing the potential value of highly skilled employees and are investing in
employee training and development activities. Certainly, this shows a bright future for HRD.

The introduction of performance-related pay is explicit in private sector organizations, mainly in multinationals
and leading local organizations in Bangladesh. However, public sector organizations are still lagging behind in
implementing such practices because of legal complexities. Most public sector organizations still consider
seniority as the main criteria for pay and promotion. According to civil service employment regulations, entry-
level seniority needs to be maintained throughout the service period. Employees who receive a minimum pass
mark in the annual performance evaluation automatically qualify for a pre-specified annual salary increment, as
determined in the National Pay Scale. However, there is no scope to reward any employee by more than this
pre-specified increment, irrespective of their level of performance. In contrast, private sector organizations,
concerned about productivity and growth, are gradually moving to PRP to improve productivity and employee
motivation. However, the operation of PRP and the selection of criteria to assess performance seem to be
contentious issues. For example, the PRP system could have a negative effect on employees, who might not
receive a pay raise because of apparent inefficiency or incompetence.

In recent years, private sector organizations have shifted their attitude towards workers and trade unions. In
several instances, employers have taken the initiative to resolve industrial disputes, enabling unions and
management to cooperate at the plant or sector level and avoid government intervention. Employers and
employees both view this as a welcome step, because the earlier tripartite nature of the conflict resolution
process seems to have been ineffective owing to government involvement and ulterior political motives. The
bipartite dispute resolution mechanism in the garment and leather sector seems to be a good example of an
effective industrial relations process in the Bangladeshi context. The Bangladesh Garments Manufacturers and
Exporters Association established a conciliation cu arbitration committee, consisting of a chief arbitrator and 18
members with equal representation from the BGMEA and the labor organizations in the sector. In the leather
sector, the Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association executive
committees and trade unions meet every two years to discuss workers’ and employees’ grievances. Through
mutual consultations and understanding, they have resolved many disputes, reflecting amity between workers
and employees. Other sectors are also moving towards more congenial conflict resolution mechanisms, which is
a positive sign for the future of industrial relations.

As we mentioned earlier, lack of comprehensive studies on HRM practices in Bangladesh make it difficult to
discern overall scenarios, and therefore, we collected information from many different sources. However, very
recently, as a rare initiative, the Ernest and Young LLP and the Bangladesh Society for Human Resource
Management (BSHRM) jointly conducted a survey on HRM practices in Bangladesh with a sample of 1000
HRM managers from different sectors of the economy. The highlights of the survey are presented in the
following (Box 1) which could help to illustrate a partial scenario of HRM in Bangladesh.

Analysis & Findings

 Private Sector Are more efficient than the public sector in HRM practice.
 Private Sector Follow HRM rules and practices properly.
 Violence of rules and regulations is seen not to promote a person.
 Both vertical and horizontal types of promotion are maintained.
 Disciplinary Action Type of action take when objective arises from employees.
  On the job training, job rotation, understanding method, lecture method, and courses methods are used
for training.
 Cot problem is the main problem when implemented the HRM issues.
 Lack of coordination in exchange of transferring HRM information among various banks.
 The study found that each bank has its own training institute for human resource development activities
but there is no proper HR information system in any of the surveyed banks. All human resources were
centrally managed by their respective headquarter.

Recommendation

 Recruitment and selection should be fair.

 Political interference should be stopped as quickly as possible in order to select the best candidates.
 The corrupted employee should be forced to retire and honest, committed fresh university graduate
should recruit though management aptitude test as an officer.
 Records of accidents, turnover, and absences and tardiness should be properly maintained.
 Job analysis and job description should be prepared elaborately so that the personnel can understand
their duties and responsibilities.
 Mangers, senior officers and officers should be trained up both inside and outside with the changing
condition.
 HR development activities as individual, career and organizational by the HR department for
enhancing the employee’s growth as well as achieve organizational hierarchy.
 More training, professional development is required for more often. Officers should be sent for
training for betterment of service.

Conclusion

Human resource department plays a vital role in operating a company. This department is working
effectively and efficiently and continuously putting some extra effort to be always up to date to keep up with
the world. Practicing HR has a positive impact on the performance of the private and public organization.
Being a complete separate department to deal with some key responsibilities, they are more focused on what
they are doing and for his reason their efficiency is improving day by day. So from my opinion companies
which got no HR department should take immediate initiative to start practicing HR in their companies. The
success of organizations largely depends on the intellectual development of the employees. Along with
intellectual development of the knowledge worker, technical infrastructures of the organizations must be
ensured to enhance the effectiveness of the employee and the organizations. The employees in private sector
are more satisfied with salary scale, job position, promotion scheme, working environment but very worried
about working hours and work pressure. Most of the employees are less satisfied with HRM polices and
practice, job analysis, IT facilities, job evaluation and performance measurement technique. Human
resources have been centrally managed by all surveyed organizations.
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