Compensation Management Scenario in Pran-

RFL Group and Akij Food and Beverage Ltd

Compensation Management Scenario in Pran-RFL Group
and Akij Food and Beverage Ltd

HRM412: Compensation Management | Section: 2

Prepared for:
Ms Tamanna Parvin Eva
Senior Lecturer
Department of Business Administration, East West University

Prepared by:
Group
Date: 12.09.2020
Ms. Tamanna Parvin Eva
Senior Lecturer
Department of Business Administration, East West University

Subject: Submission of term paper on several cases on compensation policy.

Dear Ma’am,
With due respect, we would like to inform you that it is our great pleasure to have the
opportunity to submit the term paper on the “three different case analysis” as a part of our course
studies.
The term paper is prepared based on creative planning and other related documents and the
documents collected from intranet and classe materials. We are thankful to you to provide us
important information and give us valuable advices. We would be happy if you read the term
paper carefully and we will be trying to answer all the questions that you have about the term
paper. We have worked as a team with utmost enthusiasm and tried our level best to complete
this term paper meaningfully and correctly, as much as possible. We tried to undertake all the
related issues in the term paper within several limitations.
We sincerely hope and believe that these findings will be able to meet the requirements of the
course. Therefore, we would like to place this term paper for your kind judgment and valuable
suggestions.

Sincerely yours,
Md. Nazmul Islam
Md. Nasimul Islam Asif
Iren Maharoj Alam
Tabbasum Rabby

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 Acknowledgment
We are pleased to accomplish the assign task given by our honorable course instructor Ms.
Tamanna Parvin Eva on “different cases on the related topic”. At first our profound gratification
goes to Tamanna Parvin Eva ma’am, the honorable course instructor of Compensation
Management for her supervision which helped us to complete the term paper successfully. By
providing us the opportunity of preparing this term paper, she has made us able to relate the
academic knowledge of Compensation Management with practical scenario. Not only this, she
has also contributed much in this project by giving us proper guideline. We are also
acknowledging to all of those sites from which we have taken necessary helps.
Finally, we are pleased to complete the term paper on the given subject properly and
authentically.
 EXECUTIVE SUMMARY

In this term paper, we worked on the Compensation policy and various method. At first we
discussed about case overview, history, objectives, and methodology. We collected information
from both classes’ materials and secondary sources. We analyzed the case question their strength
and weakness. Finally we summed up the whole topic and specified them to different chapter and
part.
This report is done as a part of our study and it helped us to understand several topic like
benefits, pay for performance incentives reward. This report also facilitated the understanding of
the academic theories associated with HRM412 course of BBA. The purpose of the report is to
identify practice of the compensation management (objectives, process, and pay scale, monetary
and non-monetary benefits, reward, incentives) in different organization. Besides this identify the
problems, flaws regarding compensation method and find out the possible solution is our main
motto.

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EXECUTIVE SUMMARY.................................................................................................................................5
Literature Review......................................................................................................................................15
References.................................................................................................................................................27

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Introduction:
Compensation administration is one of the most important areas of human resource management
because sound compensation policies, programmers and their effective execution are essential to
procure, maintain and develop the human resource of the organization to get effective result from
them. It involves the selection, designing, development and direction of programmers designed
to implement compensation or incentive policy through financial rewards.
Beach has defined wage and salary administration as follows: “wage and salary administration
refers to the establishment and implementation of sound policies and practices of employee
compensation. It includes such areas as job evaluation, surveys of wages and salaries, analysis of
relevant organizational problems, development and maintenance of wage structure, establishing
rules for administering wages. Wage payments, incentives, profit sharing, wage changes and
adjustments, supplementary payments, control of compensation costs and other related items”.
The traditional concept of wage and salary administration emphasized on only determination of
wage and salary structures in organizational settings. In simple words, “compensation
administration is a systematic procedure for establishing a sound compensation structure.”’
The term compensation is used to mean employees’ gross earnings in the form of financial
rewards and benefits as part of employment relationship. In terms of human resource
management, compensation is referred to as money and other benefits received by an employee
for providing services to his employer. Compensation management, also known as wage and
salary administration, remuneration management, or reward management, is concerned with
designing and implementing total compensation package or salary structure.

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Background:

In manufacturing organizations compensation management varies from one to another. Many

organizations prefer to give more basic with less benefit and other options but believe in giving
highest non-monetary benefits to the employees. On the contrary, some organizations believe in
giving average basic pay but highest portion of benefits and also other services from the
competitors. This term paper helps us to find out the actual compensation system performed by
Pran-RFL Group and Akij Food and Beverage Ltd. Also it helps us to detect the draw backs in
their policies and some specific aspects.
In the present days to acquire the ultimate success every company needs to follow a competitive
compensation policy. The policies regarding compensation which will help the company to
attract the qualified, talented employees, to motivate and retain them for the better purpose need
to be accepted.
For all these reasons we decided to study on this.

Objectives
 To explore the detailed concept about compensation and compensation management.
 To examine the importance of compensation management among organizations.
 To explore the impact/ effects of compensation management in the organizations.
 To identify the limitations that compensation management hold in the organizations


Methodology:
This report is on the basis of Compensation Management System in Pran RFL and Akij Food and
Breverage. All the information of this report is the original practiced scenario and also it can be
helpful for later use.

Primary Data:
Primary information were collected by the following process-
1. By made a one to one conversation with the Junior Officer of Compensation
Management of Pran RFL and Akij Food and Breverage.
2. Survey (questionnaire)

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Secondary Data:
We also gathered the other information through-
1. Company’s annual report
2. Internet and the website of the company.
3. Different published articles, journals, various websites

Scope of the Study:

 Attracting Top Talent.
 Increased Employee Motivation
 Boost Employee Loyalty.
 Increased Productivity and Profitability.
 Job Satisfaction So People Stay.
 Reduce High Turnover in Companies

Limitations:
There were some limitations which we found while doing the survey for our term paper:
1. It took so many times to get the appointment because it is the very busy time for the
Companies.
2. Required relevant papers and documents were extremely prohibited.
3. To protect the organizational loss in regard of maintaining confidentially, some parts of
the term paper are not in depth.
4. This study has very short sample size.
5. Lack of resources and experiences has also influence the report.
6. Time works as the most restrain for the report.
7. In some parts, there is some mistakes. The correction is given also.
8. The given information could be false or misleading as some information are confidential.
9. Due to outbreak of corona virus (Covid-19), the regular workflow of this term paper has
been greatly hampered as we had to complete our work through internet.

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History of the organization
PRAN-RFL GROUP:It is one of the largest conglomerates and agro producer in
Bangladesh.Basically it is a manufacturing company which started their journey since
1981.Major General Amjad Khan Chowdhury was the owner of the company.Its 1 st industry park
was in Rangpur.Now it has 13 industral parks through Bangladesh.
AKIJ GROUP: Akij Group was established in the 1940s by industrialist Sheikh Akijuddin as
a jute trading business, before moving into cigarettes and other areas of business. Akij Group is
the largest Bangladeshi industrial conglomerates.[1] The industries under this conglomerate
include textiles, tobacco, food & beverage, cement, ceramics, printing and packaging,
pharmaceuticals, consumer products etc.

Vision,mission and goal

PRAN-RFL GROUP:Mission statement of PRAN-RFL Group is Poverty and hunger are curses
so PRAN-RFL group aims to “to generate employment and earn dignity and self respect for our
competitors” through profitable enterprise. From the mission statement of Pran group it is
clear that they work for the eradication of poverty and hunger. They already export their products
to 140 countries and they are the highest tax paid institution in Bangladesh.Now their vision is
export their products all over the world that’s why they can make them a strong brand.Improving
livelihood is also a vision of them.
AKIJ GROUP: The mission of Akij Group is to be the market leader through their best effort,
suitable and competitive marketing strategy and the consumers support. Now they are in the
position of challenger and their vision focuses on those missions, goals and objectiveswhich will
make them able to be the leader from the challenger to the leader in the market.

Organogram

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PRAN-RFL GROUP:

Brief product list of the company

PRAN-RFL GROUP:

 CEO

 MANAGING DIRECTOR


 DEPUTY MANAGING DIRECTOR

 EXECUTIVE DIRECTOR

 CEIF OPERTING OFFICER


 GENERAL MANAGER

 ASSISTANT GENERAL MANAGER

 SENIOR MANAGER


 MANAGER

 DEPUTY MANAGER


ASSISTANT MANAGER


 SUB ASSISTANT MANAGER


 Beverages 
 Carbonated Soft Drinks
 Drinking Water
 Flavored Drinks
 Fruit Drink

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  Health Drinks
 Hot Beverages
 Juice
 Malt Drinks
 Biscuit and Bakery 
 Biscuits
 Bread
 Bun
 Cakes
 Culinary 
 Cooking Oil
 Jam & Jelly
 Ketchup
 Other Cooking Items
 Ready to Eat
 Rice & Pulses
 Sauce
 Soup
 Spices & Herbs
 Dairy 
 Butter
 Cheese
 Fresh Milk
 Ghee
 Powder Milk
 Sweets
 Value Added Milk
 Yogurt
 Frozen Foods 
 Snacks 
 Chips & Crackers
 Local Ethnic Snacks
 Noodles & Pasta
 Nuts & Pulses

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  Papar
 Soup
 Sugar Confectionery 

AKIZ GROUP:
 Fruit drinks
 Carbonated beverages
 Mineral water
 Pasteurized milk
 Chips
 Frutika
 Mojo
 Lemu
 Clemon
 Speed
 Spa
 Farm fresh milk

Literature Review

Review of existing literatures on salary and benefits practices:

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Article-1:
The implications of employee benefit decisions are among the most relevant for remaining
competitive in the labor market. From a total compensation perspective, indirect compensation or
benefits plays a significant factor in the attraction and retention of employees. This is particularly
true for costly benefits such as health insurance and pension plans, the provision of which is an
Increasingly important issue to both employers and employees. Executives have long been
concerned about the costs of providing competitive employee benefits (Conference Board, 2007).
Typically, benefit costs comprise about one-third of an organization's total labor costs and such
costs have steadily increased (Hewitt, 2002). As such, benefit decisions often have a significant
effect on a company's bottom line. For example, the decision to promise current employees
health benefits or certain types of pension plans following their retirement has long-term
financial implications. The general managerial focus and concern regarding benefits such as
health care is reflected in statements by CEOs such as Bill Ford who said: “Clearly, it's our
biggest issue we have, bar none. The health care issue is one that I find intractable (Wilson,
2003). In spite of the prominence of benefit issues to organizations, when reviewing the human
resource management (HRM) literature, there is a surprising general absence of attention given
to employee benefits. Indeed, in their analysis of gaps between HRM academic research and
practitioner interests, Deadrick and Gibson (2007) found that the largest gap was in the areas of
Compensation and benefits. While employee benefits are recognized as a major area of HRM
practice, HRM researchers generally have not taken adequate steps to provide research in this
area to inform practice. In an era when HRM scholars wish for greater influence with executives,
greater attention by HRM researchers to these areas of concern among organizational leaders can
Contribute to elevating the role and perceived value of HRM.

Article-2:
According to Obikoya (2002), based on the above reasons, employers or organizational
managers should devise effective compensation administration that could satisfy the expectations
and aspirations of the employees and sustain them in order to satisfy organization’s productivity
and profitability motives. Furthermore, on the objectives of compensation management,
according to Obikoya (2002), reward or compensation administration is a key element in any
discussion of the concept of human resources management. Effective
compensation administration is a critical factor in achieving productive work and services. In
addition, the compensation objectives of an employer are to:
 Ensure that rewards are given for service rendered by employees.
 Help to keep employees contented, minimize employee's complaints and grievances
that might result into industrial actions strikes, etc.
 Reassure employees that pay policies and pay levels are fair and will be applied
across the board uniformly and consistently with no regard for favouritism thereby
minimizing interpersonal and intergroup frictions.
 Induce the employees towards higher performance height.
 Serve as a weapon in the application of principle of rewards and sanctions to
employees who identify with organization on one hand and those who defy
organization rules, and
 Ensure that the organization gets maximum result from its limited means through
good and adequate control of labor cost.

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 

Article-3:
What Vroom explained in his theory is that in order to motivate employees or people, the effort
put in by the employees, the performance generated and motivation must be linked to one
another. Effect of Compensation Administration Employees today are not willing to work only
for the cash alone, they expect 'extra'. Employee benefits as a whole have no direct effect on
employee performance inadequate benefits do contribute to low satisfaction level and increase
absenteeism and turnover in employees. The study looked at what constitutes effective
compensation administration on organizations and the benefits that are to be obtained thereof.
The findings of the study indicate that effective compensation administration has a positive
bearing on employee productivity as indicated in by the figures generated. Compensation
processes are based on Compensation Philosophies and strategies and contain arrangement in the
shape of Policies and strategies, guiding principles, structures and procedures which are devised
and managed to provide and maintain appropriate types and levels of pay, benefits and other
forms of compensation.

Article-4:
Nazir and Saif-Ur-Rehman Khan at (2013) examined the degree of organizational engagement
and job comfort in the UK Higher Education sectors and universities and conclude that UK
Higher Education system give rewards(cash and non-cash) to members of organization and
makes them competent because it recognized that the members of organization are social agents.
Ngui Thomas Katuaat (2014) study that reward and compensation have major influence on the
function of banks In Kenya by using SPSS and MS Excel and conclude that rewards and
compensation system have an important effect on the performance of banks employee.
Muhammad Ramzan, Ghazanfar Ali, Hafiz M. Kashif Zubair and Muhammad Arslan at (2014)
the determination of this study is to estimate the effect of compensation on employee
performance by using SPSS and ANNOVA and gather the result that compensation has
significance effects on employee Performance.
The purpose of this paper was to examine the effect of reward and Compensation system on the
performance of employees. Our very first variable was compensation. Second is motivation third
was incentive. The research shows that the most significant variable in the research is reward and
compensation. It shows a great effect on the performance of employees. It boosts up the
efficiency of employees. On the contrary the variables motivation and incentives contribute least
to the employee performance.

Article-5:

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According to Dessler (2011), compensation can be divided into 2 forms- Direct and indirect
compensation which are discussed below in detail. Direct Compensation: He explained that
direct compensation is usually limited to the direct cash benefits that the employees receive on
monthly, bi-monthly or weekly basis for the services they render as employees of a particular
organization.
Indirect Compensation: According to Armstrong (2009) Indirect Compensation or Employee
benefits are elements of remuneration given in addition to the various forms of cash pay. They
also include items that are not strictly remuneration such as annual holidays. Management uses it
ostensibly to facilitate its recruitment effort or influence the potential of employees coming to
work for a company, influence their stay or create greater commitment, raise morale, reduce
absenteeism in general and improve the strength of the organization by instituting a
comprehensive program in this area (Noe et al. 1996).

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Analysis
Milkovich and Newman (1999) stated that, Compensation refers to all forms of financial returns
and tangible services and benefits employees receive as part of an employment relationship. The
Journal of Global Business and Economics (2010) also defines compensation as “the
combination of all cash incentives and the fringe benefits mix that an employee received from a
company which constitutes an individual’s total compensation.” (Chabra 2001) refers to
Compensation as a wide range of financial and non-financial rewards given to employees in
exchange for their services rendered to the organization.
Similarly, we can say that compensation is a systematic approach to provide extrinsic and
intrinsic benefits, monetary and nonmonetary benefits to the employees. It is also considered as
measurement how employees are being treated in an organization. Each and every organization
has their own compensation planning where they specify what facilities are going to provide
their employees, how it should be provided and based on what category. I have selected two
company to know about the real scenario of compensation practices and how it is being
implemented in their company. Based on the survey we analyses compensation management
practices in both company which are given below.
Compensation management practices of Pran-RFL Group
Compensation system procedures:
Pran-RFL Group has a compensation and benefit policy- the main objective is to motivate and
retain employees for increasing maximum performance. For fixing the pay rates for employees
they conduct a job analysis of all positions. After conducting job analysis they evaluate jobs so
that they can determine grades aftermath. Then they establishes grade pricing and salary range
which helps them to determine appropriate salary structure. Finally, they communicates the final
program to employees and managers.
For developing the incentive program for employees they have a policy to pay employees
based on target, performance, achievement, cost savings, revenue generated etc. Their revenue is
the result of employee’s high diligence.
For practicing the benefit package Pran-RFL group investigate the market to see what
competitors have set for their employees. Then they decide and create the list of monetary and
nonmonetary benefits. They recognize the job specific benefits based on nature of job, like they
provide transportation facility to all factory employees. Also they determine some common
benefits for all employees as like- medical support etc. It is certain that they evaluate and adapt
the benefit package as per market trend.
They manage the total compensation system by creating proper balance between cost and
contribution. They communicate with employees in written way.
Compensation objectives, policy and techniques:
According to the given information, compensation and benefit scheme in this organization
comply with government regulations. Compensation system has a positive impact on quantitative

17
and qualitative employee performance. Also it creates impact on employee devotion and
commitment. So according to that we can say that it makes a progressive contribution to the
overall effectiveness of the organization. It has been designed to ensure equity and employee
satisfaction.

Pay for performance, financial incentives and benefit options:

Pran-RFL provides merit pay program as pay for performance and financial incentives. Profit
sharing program is provided by a portion accordingly. However, they do not offer stock option
scheme and also gainsharing plans for employees. They do pay for overtime. Generally, they do
not provide leave encashment facility. If valid reason can be shown, it might be provided.
In terms of benefit options they provide sick leave, life insurance, pension and gratuity, vacation
leave, maternity leave. Other benefits are-
Medical support- Pran-RFL offers a range of services designed as a safeguard of their health
regardless home and abroad. This range from health screenings to wellness program.
Pran scholarship scheme- In order to encourage and patronize meritorious children of employees,
they provide financial support on a regular basis. Starting from class 6 to post graduation level.
Students with good academic result get under this scholarship scheme.
Transport and Canteen facilities- They offer transportation facilities to all factory employees. In
addition to that, employees from head office and factory get high quality canteen facilities that
make them highly satisfied.
Recognition and Career growth- Based on key performance indicator (KPI) they recognize the
performance of employees. They have monthly recognition scheme named “Employee of the
month” that truly motivate them. In addition to that, they offer smooth and long term career
growth to the deserving candidates.
Employee Training and Development- To make employees more productive, they regularly
organize training and development session by renowned professionals both inside and outside the
country.
The compensation and benefit package facilitate HR functions in terms of motivating employees
for increasing productivity. Current salary is also rated favorable. They do not face problem in
administering and managing the current compensation and benefit packages. Overall, current
compensation and benefit practices of Pran-RFL Group is good.

Compensation management practices of Akij Food and Beverage Ltd

Compensation system procedures:
Akij Food and Beverage Lt has been offering a lucrative compensation and benefit policy. The
main objective is to retain their best person by ensuring the best pay policy comparing with other
competitors and to attract potential employees from the market.

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To compare with other local companies, they are following lead pay policy. For fixing the pay
rates for employees they conduct job analysis and prepare job description, conduct job evaluation
to get the value of each for internal pay structure, conduct market survey also. They develop
policy line for pay grades and ranges. They adapt the changes according to the market trends.
Moreover, they review benefit packages once in a year. They conduct performance evaluation
twice in a year as well.
They manage total compensation system by adopting periodical change with the arising new
situation and creating proper balance between cost and contribution. Also, they implement
effective compensation plan after overall assessment to achieve the objective of compensation
system. They communicate with employees by giving exact information.

Compensation objectives, policy and techniques:

Similarly, like any other organizations, their compensation and benefit scheme comply with
government regulations. This compensation system is able to attract, motivate and retain talent
employees. Also it has a positive impact on quantitative and qualitative employees’ performance
which helps to reduce turnover, absenteeism and conflicts. The compensation system is linked
with the business strategic plan and able to create shareholder’s value. It has been designed to
ensure equity and employee satisfaction.

Pay for performance, financial incentives and benefit options:

There is a provision regarding bonus which is based on the performance of the employees.
However, it depends on the performance of the branch which means if a branch performs well as
a whole, all employees of that branch will get bonus based on their performance.
Provident Fund and Gratuity: The employees are entitled with the provident fund. They provide
contributory provident fund to the employees. In addition, they provide gratuity which has a
handsome amount apart from the basics. The employees who completed 10 years are used to get
a gratuity equivalent to the basics of 3 months.

Annual Increment: There is a provision of annual increment of AFBL which is 10%-20%

sometimes 25% increment based on the performance. It works as a motivating factor to the
employees to perform well.

Allowances: They also provide travel allowance to their employees if they travel in Bangladesh
regarding company’s prospect. House rent allowances is also given to the managerial level.
Other benefits are-
Employee Loan: They provide a great scheme of loans to employees. Permanent employees can
get loan from their provident fund. From the executive level employees are qualified for home
loans, car loans.

Medical Facilities: The medical facility given by AFBL is quite different from others. They have
their own medical team to look after their employees in case of any medical assistance. They
have their nursing home as well. However, employees do have the opportunity of life insurance.

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Welfare Funds: Ever year 200 taka is deducted from each employee to count in the employee
welfare fund. The money induced from the fund is used for the employees when they are in
trouble or financial need.

Leaves: they also provide earn leave. Disability leave and maternity leave are also given to the
employees. These two leaves are fallen under paid leave.

The current salary is most favorable according to other competitors as they pay high. The
compensation and benefit packages facilitate HR functions in terms of retaining and attracting
current employees. However a necessary benefit that is life insurance is not considered in AFBL.
Overall, the current compensation and benefit practices of AFBL is good.
From the scenario of compensation management practices of both organizations, we see that both
organizations have sound policies and practices based on the organization’s objective. As we
know in the word of Beach DS (1965), compensation management refers the establishment and
implementation of sound policies and practices of employee compensation. Similarly, Aquinas
PG (2002), services rendered by individuals to organizations have to be equitably paid for.
According to Mamoria and Gankar (2007), compensation management provides a step by step
approach for designing a remuneration system that recognizes job requirement, employee related
knowledge and skill and performance related incentives for individual, team, and work unit and
organization performance. What Vroom explained in his theory is that in order to motivate
employees or people, the effort put in by the employees, the performance generated and
motivation must be linked to one another. Effect of Compensation Administration Employees
today are not willing to work only for the cash alone, they expect 'extra'. Both Pran-RFL Group
and Akij Food and Beverage Ltd have a step by step procedures regarding to the compensation
management system along with adequate benefits option that has been motivating their
employees.

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 FINDINGS
Learnings from analysis:
 Figure the pay structure: Pay structures are a necessary part of effective
management. They help make sure that the pay levels are externally competitive
and internally fair. Pay structures also allow companies to reward performance
and development while controlling cost.
 Provide Incentives & Benefit packages: Incentives should be given to employees
based on target, performance, achievement, cost savings, revenue etc. For benefit
packages market trend should be followed which is also followed by our
competitors.
 Motivate Employee: Employee motivation works when compensation and
benefits are given properly. So compensation and benefits are the reason of
their main motivation. So to get these benefit or reward they will work hard.
 Balancing Cost & Contribution: By balancing total cost and contribution ,
compensation system can be set.
 Time to update: Compensation system should be updated by time to time.
Mostly it could be changed within 1 or 2 years. Compensation can never less
than previous scale.
 Provide pension system: As per rule pension system should be provided. A
minimum salary should be kept from per month salary ,which is to included for
pension system. So employee can enjoy the pension benefit even after their
retirement

Strengths of the Compensation Management of Pran-RFL Group

 Appropriate Salary Structure: After conducting job analysis Pran-RFL evaluate
jobs so that they can determine grades aftermath. Then they establishes grade
pricing and salary range which helps them to determine appropriate salary
structure.
 Individual Merit Pay: Pran-RFL provides individual merit pay based on
performance and financial incentives.
 Compensation and Benefit packages: Compensation and benefit scheme
matches with government regulation. Here benefits given by Pran-RFL are sick
leave, life insurance, pension and gratuity, vacation leave, maternity leave along
with Medical support, Pran scholarship scheme, Transport and Canteen facilities,
Transport and Canteen facilities, Transport and Canteen facilities.

21
 Provide Training Program: Pran-RFL provides proper training to employees by
professional trainers to increase the productivity of them. Which help employees
to me more productive and experienced.
 Pension Program: Pran-RFL also has pension program for their empolyees. So
that they can earn pension after retiring from their job.
 Pran scholarship scheme: In order to encourage and patronize meritorious
children of employees, they provide financial support on a regular basis. Starting
from class 6 to post graduation level. Students with good academic result get
under this scholarship scheme.

Weakness of the Compensation Management of PRAN-RFL

 No Study Leave: There are no study leave given to the employees of Pran-
RFL. Which can cause their employees to loss educational right from them.
 No overtime payment: Pran-RFL do not provide any overtime payment as
they have controlled salary structure for each employee.
 No Accomodation System: Pran-RFL has no accommodation system for their
employee. So their employees from a far range has to manage their own
accommodation.
 No offer of stock option: Pran-RFL do not offer any stock option for their
employees.

Strengths of the Compensation Management of Akij Food and Beverage Ltd

 Lucrative Compensation Policy: Akij Food and Beverage Ltd offers lucrative
compensation policy to retain their best employee in their company ,so that no
other company can get them. They follows lead pay policy.
 Review Benefit Packages: They review benefit packages once in a year.
Which is much helpful for the employees. They adapt the changes according
to the market trends.
 Proper balance between cost and contribution:Akij food and Beverage
manages total compensation system by adopting periodical change with the
arising new situation and creating proper balance between cost and
contribution.
 Performance Based Bonus: Performance based bonus is given here base on
the performance of a whole department. If the performance of the whole
department from a sector is good enough than bonus is given to all
employees regarding to that department.
 Provident Fund & Gratuity: The employees are entitled with the provident
fund. They provide contributory provident fund to the employees. The

22
 employees who completed 10 years are used to get a gratuity equivalent to the
basics of 3 months.
 Annual Increment: There is a provision of annual increment of AFBL which
is 10%-20% sometimes 25% increment based on the performance. It works as
a motivating factor to the employees to perform well.
 Good Chain of Command: It creates when employees get a good range of
wages. So they can easily work for the company and they will also listen &
follow their high commands. Good salary structure made them to have a
good chain of command. Which is very good for the organization
 Under paid Leaves: Akij Food & beverage also provides earn leave.Disability
leave and maternity leave are also given to the employees. These two leaves
are fallen under paid leave.
 Employee Loan: Permanent employees can get great scheme of loan. They
can also get home loan and car loan.
 Medical Facilities: Well Akij Food and Beverage has their own medical team
to support medical emergency.

Weakness of the Compensation Management of Akij Food and Beverage

 No Life Insurance Facility: Akij food and Beverage do not provide any life
insurance facility. So this is a great weakness of their compensation system.
 No Transportation Allowence: They do not provide any transportation cost
to their employee which is a weakness of them.
 No Profit Sharing System: Akij food and Beverage do not share any portion
of the profit to their employees. Which can cause less motivation to their
employees.

Both of the company Pran-RFL and Akij Food & Beverage can follow their
own strengths to lead the compensation policy in a good way. And their
weakness must be solved due to give proper motivation for their existing and
permanent employees, so that they can work hard and their productivity
level goes up.

Recommendation (Pran-RfL):

23
  PRAN-RFL GROUP should ensure standard incentive policy to their employees for their high level
of satisfaction.

 The organization should increase its compensation related benefits which are provided to the
employees.

 The organization should put more concentration on TA/DA which offered to their employees.

 The organization should provide effective/acceptable insurance coverage to their employees.

 Pran-RFL should also provide individual insurance benefit along with group insurance.

 The organization’s pension/ retirement plan should be modified in favor of their employees.

 The organization may increase current salary structure of their employees.

Recommendation (AKIJ FOOD & BEVERAGE):

Compensation and benefits which are provided to the employees are good but should be better because
employee of certain levels are satisfied but not all.

 AFBL should increase other benefits according to their promotion and efforts
.
 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 we have to
come while meet there HR Manager.

 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.

 AFBL should provide effective/acceptable insurance coverage to their employees

 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, this policy considering for the job
satisfaction of senior levels employees.

 AFBL should ensure the pension/ retirement plan should be modified in favor of their
employees

24
CONCLUSION:
We were fortunate that we were given the opportunity to go to PRAN-RFL and AKIJ FOOD & BEVERAGE
limited and meet HR department officer. He help us a lot.

PRAN-RFL is one of the leading conglomerates in Bangladesh, with a multinational heritage. In BD PRAN-
RFL has been doing corporate business and soundly maintaining social responsibilities. The agenda of
this company earning profit, creating job opportunity, though trade and commerce. Achievement of
PRAN-RFL is beyond description. Maintaining Government rules and regulations PRAN-RLF always try to
contribute on national G.D.P and G.N.P. not only local business but also internationally. PRAN-RFL
follows most of the compensation practices and policy. They always try to contribute to employee
satisfaction and given to employees all types of compensation benefits.

AFBL taken different compensation strategies which we can relate with our academic knowledgeable
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.

25
References
Akij Group. (n.d.). Retrieved from akij.net: https://www.akij.net/companyprofile/akij-food-beverage-ltd/

Akij Group. (2019, october 12). Retrieved from wikipedia.org: https://en.wikipedia.org/wiki/Akij_Group

CB Mamoria, SV Gankar. (2007). Personnel Management, 27th edition. Mumbai: Himalaya Publishing
House.

Ds, B. (1965). Personnel: The Management of People at Work. London: McMillan Publications.

H.D James, C.M Janice, M.P Shaun, et.al. (2009). Employee benefits: Literature review and emerging
issues. Human Resource Management Review , 86.

Kelechi, N. (2013). Compensation Management and Organizational Performance.

Larbi, T. (2014). Effect of Compensation Managment on Employee Performance at the St.MICHAEL's

Catholic Hospital, PRAMSO.

M.Baledi, R.Al Saed . (2017). The Impact of Compensation on Improving Employees Performance
Through Job Satisfaction in Jordian Newspaper. International Journal of Business Quantitative
Economics and Applied Management Research, 86.

PG, A. (2002). Human Resource Management Principles & Practices. New Delhi: Vikash Publishing House.

Pran-RFL Group. (n.d.). Retrieved from wikipedia.org: https://en.wikipedia.org/wiki/PRAN-RFL_Group

SlideShare. (n.d.). Retrieved from Slideshare.net:

https://www.slideshare.net/SamirAhmedShimul/report-on-compensation-management

SlideShare . (n.d.). Retrieved from Slideshare.net: https://www.slideshare.net/Pulls/pran-rflemployee-

satisfaction

V.O Akpa, T.K Ewguonwu, A.A Akintaro, et.al. (2016). The Effect of Compensation Administration on
Employee Productivity . Arabian Journal of Business and Managemet review (Oman Chapter),
Vol.5, No.8 , 42 .

26
Appendix
Questionnaire
Pran-RFL Group

 Is there a compensation and benefit policy in your organization?

Ans: Yes.

 What are the objectives of compensation and benefits policy of your organization as

stated in policy manual?

Ans: Retain and Motivate employees for increasing maximum performance.

 Do you think that the compensation and benefit policy of your organization is serving its

purpose?

Ans: Yes.

 How your organization is fixing the pay rates for employees?

Ans: 1. Conduct job analysis,

2. Evaluate jobs to determine grades,

3. Determine appropriate salary structure.

 How your organization is developing the incentive program for employees?

Ans: A policy to pay employee based on target, performance, achievement.

 How your organization is practicing the benefit packages for employees?

Ans: 1. Investigate market

2. Decide and create list of monetary and non-monetary benefits

3. Recognize the job specific benefits based on nature of jobs.

27
 4. Also determine some common benefits.

 How your organization is managing the total compensation system to ensure accurate pay

for employee?

Ans: Creating proper balance between cost and contribution.

 Does the organization offer an individual Merit Pay Program?

Ans: Yes.

 Does the organization offer a profit Sharing Program?

Ans: Yes.

 Does the organization offer a Stock Option Scheme?

Ans: No.

 Does your organization provide Gainsharing Plans for employees?

Ans: No.

 Does the organization pay overtime?

Ans: Yes.

 Does your organization provide benefit packages that you are aware of?

Ans: 1. Sick leave, 2. Life insurance, 3. Gratuity, 4. Vacation leave, 5. Maternity leave

6. Medical support, 7. Pran scholarship scheme, 8. Transport and canteen facility

9. Recognition and career growth, 10. Employee training and development.

 Does your organization provide leave encashment facilities?

Ans: Generally they do not provide.

28
 How do you rate your current base pay/Salary/Wage?

Ans: Favorable.

 How do you see your current benefit packages?

Ans: Favorable.

 What particular problem you have faced in administering and managing the current

compensation and benefit packages?

Ans: Have not faced any problem.

 Do you think current compensation and benefits packages facilitate human resource

function?

Ans: Yes. In terms of motivating employees for increasing productivity.

 How do you communicate the compensation and benefit packages to employees in your

institution?

Ans: In written way.

 Do you think the current compensation and benefits is sufficient?

Ans: Yes.

 Are there benefits and services which you think necessary but not considered?

Ans: No.

 Finally, is there anything that you want to comment about current compensation and

benefit practices of your organization?

Ans: Compensation and benefit practices is favorable.

29
 Questionnaire
Akij Food and Beverage Ltd

 Is there a compensation and benefit policy in your organization?

Ans: Yes.

 What are the objectives of compensation and benefits policy of your organization as

stated in policy manual?

Ans: Retain, Attract and Motivate employees by ensuring best pay policy.

 Do you think that the compensation and benefit policy of your organization is serving its

purpose?

Ans: Yes.

 How your organization is fixing the pay rates for employees?

Ans: 1. Conduct job analysis and prepare job description

2. Evaluate jobs for internal pay structure

3. Develop policy line for pay grades and ranges.

 How your organization is developing the incentive program for employees?

Ans: A policy to pay employee based on performance.

 How your organization is practicing the benefit packages for employees?

Ans: 1. Adapt changes according to market changes.

2. Review benefit packages once in a year and performance evaluation twice in a year.
30
 How your organization is managing the total compensation system to ensure accurate pay

for employee?

Ans: 1.Adopting periodical changes with the arising new situations.

2. Creating balance between cost and contribution

3. Implement effective compensation plan after overall assessment.

 Does the organization offer an individual Merit Pay Program?

Ans: Yes.

 Does the organization offer a profit Sharing Program?

Ans: No.

 Does the organization offer a Stock Option Scheme?

Ans: No.

 Does your organization provide Gainsharing Plans for employees?

Ans: No.

 Does the organization pay overtime?

Ans: Yes.

 Does your organization provide benefit packages that you are aware of?

Ans: 1. Provident fund and gratuity, 2. Annual increment,

3. Travel and house rent allowances, 4. Employee loan, 5. Welfare fund

6. Medical support, 7. Earn leave, 8. Disability leave

9. Maternity leave.

31
 Does your organization provide leave encashment facilities?

Ans: Yes.

 How do you rate your current base pay/Salary/Wage?

Ans: Most favorable.

 How do you see your current benefit packages?

Ans: Favorable.

 What particular problem you have faced in administering and managing the current

compensation and benefit packages?

Ans: Have not faced any problem.

 Do you think current compensation and benefits packages facilitate human resource

function?

Ans: Yes. In terms retaining and attracting best employees.

 How do you communicate the compensation and benefit packages to employees in your

institution?

Ans: In written way by exact information.

 Do you think the current compensation and benefits is sufficient?

Ans: No.

 Are there benefits and services which you think necessary but not considered?

Ans: Yes. Life insurance is not provided.

 Finally, is there anything that you want to comment about current compensation and

benefit practices of your organization?

32
Ans: Overall, compensation and benefit practices is favorable but could have provided

life insurance policy which is important.

33