Human Resource Management Practices of Banking Sector in Bangladesh

THESIS PAPER ON
Human Resource Management Practices of Banking Sector

in Bangladesh
SUBMITTED TO
Farhana Diba
Assistant Professor
Department of Business Administration
Stamford University Bangladesh
SUBMITTED BY
Shahnaz Parvin
ID Number: 06818050
Batch: 068
Major: Human Resource Management
Department of Business administration
Submission Date: 5 June 2023

LETTER OF TRANSMITTAL
5 June 2023
To,
Farhana Diba,
Assistant Professor,
Department of Business Administration,
Stamford University Bangladesh.
Subject: Submission of Thesis Paper.
Dear Sir,
With due respect, I would like to inform you that it is a great pleasure and privilege to present
the Thesis Paper on “Human Resource Management Practices of Banking Sector in Bangladesh”
which was assigned to me as a partial requirement for the completion of MBA Program.
Throughout the study I have tried the best of my capacity to accommodate as much as in-
formation and relevant issues as possible and tried to followed the instructions that you have
suggested. I put my best effort to make this report such as much detailed as possible. I sincerely
believe that this thesis paper would satisfy and meet the requirements and will serve the purpose
of my dissertation.
I am grateful to you for your kind guidance and cooperation at every step of my endeavor
during preparing this report. It would be a great help for if you kindly take some time to go
through the report and evaluate this. It will be a big reward for my effort if it adds value to the
research literature.
Yours Sincerely,
..........................................
Shahnaz Parvin
ID Number: MBA 06818050
Major in Human Resource Management
1
CERTIFICATE OF SUPERVISOR
This is to certify that Shahnaz Parvin, ID Number: MBA 06818050, Major in Human
Resource Management, Master of Business Administration (MBA), Department of Business
Administration, Stamford University Bangladesh has completed her Thesis Paper under my
supervision as a partial requirement for the degree of Master of Business Administration
(MBA). This Thesis Paper entitled on “Human Resource Management Practices of Banking
Sector in Bangladesh”.
I wish every success in her life.
........................................................
Farhana Diba
Assistant Professor
2
DECLARATION OF THE STUDENT
I, Shahnaz Parvin, ID Number: MBA 06818050, Major in Human Resource Management,
Master of Business Administration (MBA), Department of Business Administration, Stamford
University Bangladesh, hereby declare that the Thesis Paper on “Human Resource Management
Practices of Banking Sector in Bangladesh” presented to the Department of Business
Administration, is the outcome of the dissertation Thesis Paper performed by me under the
supervision of Farhana Diba, Assistant Professor, Department of Business Administration,
Stamford University Bangladesh. I also declare that no part of this Thesis Paper submitted
elsewhere for theaward of any degree, diploma or recognition.
..........................................
Shahnaz Parvin
ID Number: MBA 06818050
Major in Human Resource Management
3
ACKNOWLEDGMENT
First of all, I am very much thankful to almighty Allah for giving me strength, courage and
ability to accomplish the Thesis Paper in a scheduled time in spite of various complications. I
also thank Stamford University Bangladesh for its help & support in completing my Internship
Report and also a nice placement for my Thesis Paper. I wouldn‟t have been able to do well
without the constant support of my supervisor and my peers in the organization.
For preparing my Thesis Paper, I need some respected persons help and they deserve greatest
gratitude. The completion of this thesis gives me much knowledge. I would like to show my
gratitude to the Honorable Faculty of Farhana Diba, Assistant Professor, Department of Busi-
ness Administration, Stamford University Bangladesh, who has given me the full support and
suggestions for preparing the thesis paper successfully, which has become an excellent way of
understanding the topic of my Internship Report.
At first, I was so confused that whether I would be able to make a fruitful Thesis Paper but
with her assistance, I found a way to do everything immaculately and in time. She kept me
on track to complete this Thesis Paper and her suggestions and feedback were very dynamic in
making this thesis paper as impeccable as possible. I would like to thank all those persons who
have helped me to prepare this thesis paper directly or indirectly.
Finally, I would like to express my profound gratitude to my family members who have
given me the support to pursue the MBA Program.
4
EXECUTIVE SUMMARY
The term HRM Practices is a sub-discipline of Human Resources Management. Fast global
and technological developments have made today‟s business environment highly uncertain and
even chaotic. Organizations are seeking newer ways to promote their adaptability to the
complexities of the changed scenario so as to survive and prosper. Globally, organizations are
striving to realize competitive success through strategic management of human resources.
Thus, people management has never been more important than it is today. Therefore new
themes have emerged in the process, replacing some of the old ones. The new thinking in this
regard is referred to as Human Resource Management (HRM), which carries a more proactive
and strategic connotation. HRM is intimately intertwined with business strategy. Fast global
and technological developments have made today‟s business environment highly uncertain
and even chaotic. Organizations are seeking newer ways to promote their adaptability to the
complexities of the changed scenario so as to survive and prosper. Globally, organizations are
striving to realize competitive success through strategic management of human resources.
Thus, people management has never been more important than it is today. Therefore new
themes have emerged in the process, replacing some of the old ones. The new thinking in this
regard is referred to as Human Resource Management (HRM), which carries a more proactive
and strategic connotation. HRM is intimately intertwined with business strategy. In many
situations, it even critically influences business strategy. The development of employee
commitment through employee involvement and empowerment is one of the key objectives of
any HRM discourse. The complex business objectives in today‟s business environment are
difficult to realize without developing highly committed and motivated employees who would
strive to contribute to organizational goals. That is why, human resource issues are no more the
exclusive preserve of personnel specialists; rather line and general managers are being
increasingly involved in handling key HR issues and in evolving, shaping and managing human
resource strategies and policies. These developments have given a far greater recognition to the
HR function in organizational decision-making processes. Mutual Trust Bank Limited
(MTBL) is sponsored by a group of dynamic Bangladeshi Entrepreneurs, Industrialists,
Educations and Professionals. Mutual Trust Bank Ltd is one of the renowned and scheduled
private commercial bank of Bangladesh. MTBL aspire to be the most admired financial
institution in the country, recognized as a dynamic, innovative and client focused company that
offers an array of products and services in the search for excellence and to create an
impressive economic value. The City Bank has been motivated to provide “best- in-the-class”
services to its diverse assortment of customers spread across the country under an on-line
banking. To provide HR Practices of the City Bank Limited objectives are find-out the
selection, training, promotion and development process in HRM division of the City Bank
Limited. Finally find out some problems and recommend some suitable steps to overcome the
problems. The overall explanation is City Bank Limited is a bank that confirms the best service
to the customers as well as to the employees by Human Resource Division.
KEY WORDS: Bank, Organization, Banking Industry, HRM Practices, Bangladesh Bank.
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Table of Contents
Page Number
1 INTRODUCTION 2
1.1 Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Research Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Scope of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Methodology of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5.1 Primary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5.2 Internal Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5.3 Secondary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5.4 Study Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5.5 Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 HUMAN RESOURCE MANAGEMENT PRACTICES OF BANKING SECTOR

IN BANGLADESH 7
2.1 Overall Banking Sector in Bangladesh . . . . . . . . . . . . . . . . . . . . . . 7
2.1.1 Definition of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.2 Historical Background . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.3 Features of a Bank ........................................................................................ 12
2.1.4 HRM Practices of Banking Sector in Bangladesh ........................................ 14
2.2 HRM Practices of Mutual Trust Bank Limited ......................................................... 21
2.2.1 Mutual Trust Bank Limited An Overview .................................................... 21
2.2.2 Vision ............................................................................................................ 21
2.2.3 Mission ......................................................................................................... 21
2.2.4 Organization Structure of Mutual Trust Bank Limited................................. 21
2.2.5 Human Resource Management of Mutual Trust Bank Limited .................... 22
2.3 HRM Practices of City Bank Limited ....................................................................... 27
2.3.1 City Bank Limited An Overview .................................................................. 27
2.3.2 Vision ............................................................................................................ 27
2.3.3 Mission ......................................................................................................... 27
2.3.4 Human Resource Management of City Bank Limited.................................. 27
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3 OVERALL FINDINGS 33
3.1 FINDINGS ................................................................................................................ 33
3.2 FINDINGS of Mutual Trust Bank Limited ............................................................... 34
3.3 FINDINGS of City Bank Limited ............................................................................. 35
4 RECOMMENDATIONS AND CONCLUSION 37

4.1 RECOMMENDATIONS .......................................................................................... 37
4.2 Mutual Trust Bank Limited ....................................................................................... 37
4.3 City Bank Limited ..................................................................................................... 39
4.4 CONCLUSIONS ....................................................................................................... 40
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Thesis Paper on
Human Resource Management Practices of Banking Sector in Bangladesh
Chapter I
INTRODUCTION
1
Chapter 1
INTRODUCTION
1.1 Background of the Study

Generally by the word “Bank” we can easily understand that the financial institutions deal
with money. But there are different types of banks like; Central Banks, Commercial Banks,
Savings Banks, Investment Banks, industrial Banks, Cooperative Banks etc. Commercial banks
are the primary contributor to the economy of a country. In every organization, human resource
contributes a very important role. It is the essential part of the organization that is concerned
with the “people” dimension. Like other organizations, Mutual Trust Bank Limited has a very
strong and efficient human resource department. Human resource is the principal component of
an organization. It is defined as “from the national point of view; the knowledge skills, creative
abilities, talents and aptitudes obtained in the population; where as from the view point of the
individual enterprise”, they represent the total of the inherent abilities, acquired knowledge and
skills as exemplified in the talents and aptitudes of its employees”. For the proper management
of human resource and progress of the bank, the bank follows some policies which come under
human resource policy or human resource management. So, human resource management is
the management of people to achieve individual behavior and performance that will enhance
an organization‟s effectiveness. Human resource management (HRM) encourages individuals
to set personal goals and rewards, guiding them to shape their behavior in accordance with the
objectives of the organization that employ them.
1.2 Research Objectives

Maximum effort was given to make the study a successful one, but it suffers from some
research objectives those were apparently unavoidably.
i. To acquire knowledge about “Human Resource Management Practices of Banking Sector in

Bangladesh”.
ii. To research and analyze “Human Resource Management Practices of Banking Sector in
Bangladesh”.
iii. To recommend for improvement of existing “Human Resource Management Practices of

Banking Sector in Bangladesh”.
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1.3 Significance of the Study

Every task has a particular aim. A study without objective cannot reach its destination. The
main objectives of this study are to find out the overall “Human Resource Management Practices
of Mutual Trust Bank Limited”. The purpose of the study conducted in the banks are mentioned
as under:
i. To know overall Human Resource Management Practices Banking Sector of Bangladesh.
ii. To acquire practical knowledge on Human Resource Management Practices.
iii. To know the functions of various departments of Human Resource Management.
1.4 Scope of the Study

Some Scope of the Study are following:
i. Human Resource is an emerging concept in Bangladesh and organizations such as a Bank put
much more emphasis on this department so this study will help the organization as well. In this
regard, this research will help to increase organization‟s performance in a way the employee of
the organization will think.
ii. HR department and its working procedures as well as its key roles in a company.
iii. To be familiar with the recruitment and selection process.
iv. To acquire practical knowledge on Human Resource Management practice.
1.5 Methodology of the Study

This Thesis Paper is based on all the information incorporated in this report has been col-
lected both from the primary sources, internal sources and secondary sources.
1.5.1 Primary Data

Many of the data and information were collected from my practical experience and queries
from the executives while doing my internship at The Mutual Trust Bank Limited. Information
and data regarding recruitment and selection, training and development. The method that was
used to collect the primary data is as follows:
i. Face to face conversation with the bank officers & staffs.
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ii. Different manuals of Mutual Trust Bank Limited.
1.5.2 Internal Data

i. Human Resource Management Practices of Mutual Trust Bank Limited.
ii. Human Resource Management Practices of Private Commercial Bank in Bangladesh.
1.5.3 Secondary Data

The study has been conducted on the basis of secondary data for the purpose of in-depth
investigation of the study. The secondary data have been collected from related journals, news-
papers, published research reports, annual reports, published books, articles in Banking Sector
in Bangladesh.
1.5.4 Study Design

The report was fully investigative in nature. Data have been collected from both primary
and secondary sources. This study mainly based on secondary data available from the various
divisions and departments of Mutual Trust Bank Limited, in addition to these other necessary
information have been collected from the daily news papers, relevant journals, annual reports
of TBL, Bangladesh Bank, Ministry of Finance and Planning and publications of other relevant
institutions have also been taken into consideration.
1.5.5 Data Analysis

There is no certain analyzing tool to analyze the data of a descriptive research. This study is
mainly explaining the Human Resource Management Practices of Banking Sector in Bangladesh
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1.6 Limitations of the Study

The present study solely focused on the current practices of Human Resource Management
in the surveyed organizations but it is also important to assess the influences of Human Resource
Management practices on business performance. The issue of effects of Human Resource Man-
agement on business performance of organizations was beyond the aim of this Report yet it may
be an important point to consider in future research.
* The insufficiency of information is main constraint of the study. Moreover employees are not
interested to provide all information due to security and other corporate obligation.
* The employees and clients are busy to provide me time for interview.
* Inexperience and time limitation were the constraints of the study.
* It is too much difficult to comment & suggest based on only the annual report and information
supplied by the organization.
* Don‟t give the data from their source document.
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Chapter II
HUMAN RESOURCE
MANAGEMENT PRACTICES
OF BANKING SECTOR IN
BANGLADESH
6
Chapter 2
HUMAN RESOURCE MANAGEMENT

PRACTICES OF BANKING SECTOR IN
BANGLADESH
Bangladesh is one of the densely populated countries in all over the world. The human be-
ings may play as like the asset of the country. So to make the people efficient in their post we
need to train them & posted them in the right place based on their skills. One of the important
parts of the organization is the Management System. Management system process is included
with planning, organizing, staffing, leading, controlling. In the term of management process
Human Resource Management is one of the fundamental pare. Human Resource Management
involved with the process of acquiring, training, appraising, compensating employees, recruit-
ment, screening & rewarding. Now a day we all are familiar with the term of Human Resource
Division in every sector of every single organization in Bangladesh. Without establishing this
important sector anyone organization may run smoothly. This term is very much essential for
every single employee those are involved in different organization. So the every single task of
HR division is very much essential for all the employees those are involved with The Mutual
Trust Bank ltd in Bangladesh.
2.1 Overall Banking Sector in Bangladesh

2.1.1 Definition of Bank
A bank is a financial institution which deals with deals with deposits and advances and oth-
ers related services. It receives money from those who want to save in the form of deposits and
it lends money to those who need it.
2.1.2 Historical Background

After the independence, banking industry in Bangladesh started its journey with 6 national-
ized commercialized banks, 2 state owned specialized banks and 3 foreign Banks. In the 1980s
banking industry achieved significant expansion with the entrance of private banks.
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Now, banking sector in Bangladesh is primarily of two types:
A) Schedule Bank
B) Non-schedule Bank
A) Scheduled Bank
The banks which get license to operate under Bank Company Act, 1991 (Amended in 2003)
are termed as Scheduled Bank. State-owned commercial banks, private commercial banks, Is-
lamic commercial banks, foreign commercial banks and some specialized banks are Scheduled
Bank.
B) Non-Scheduled Bank
The banks which are established for special and definite objective and operate under the
acts that are enacted for meeting up those objectives are terned as Non-Scheduled Bank. These
banks cannot perform all functions as like as scheduled banks. Grameen Bank, Probashi Kallyan
Bank, Karmasangsthan Bank, Progoti Co-operative Land Development Bank Limited (Progoti
Bank) and Answer VDP Unnayan Bank are Non-Scheduled Bank.
List of Banks in Bangladesh:
There are 5 types of Banks in Bangladesh. These are:
A) Central Bank
B) State-Owned Commercial Banks
C) Private Commercial Banks
D) Foreign Commercial Banks
E) Specialized Development Banks
A) Central Bank
1. Bangladesh Bank
B) State-Owned Commercial Banks
1. Sonali Bank Limited
2. Rupali Bank Limited
3. Agrani Bank Limited
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4. Janata Bank Limited
C) Private Commercial Banks
1. United commercial Bank Limited
2. Mutual Trust Bank Limited
3. BRAC Bank Limited
4. Eastern Bank Limited
5. Dutch Bangla Bank Limited
6. Dhaka Bank Limited
7. Islami Bank Bangladesh Limited
8. Uttara Bank Limited
9. Pubali Bank Limited
10. IFIC Bank Limited
11. National Bank Limited
12. The City Bank Limited
13. NCC Bank Limited
14. Prime Bank Limited
15. Southeast Bank Limited
16. Al-Arafah Islami Bank Limited
17. Social Islami Bank Limited
18. Standard Bank Limited
19. One Bank Limited
20. Exim Bank Limited
21. Bangladesh Commerce Bank Limited
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22. First Security Islami Bank Limited
23. The Premier Bank Limited
24. Bank Asia Limited
25. Trust Bank Limited
26. Shahjalal Islami Bank Limited
27. Jamuna Bank Limited
28. ICB Islami Bank
29. AB Bank
30. Marcantile Bank Limited
31. The Farmers Bank
32. Agriculture Bangladesh Bank
33. Union Bank
34. Megna Bank
35. Bangladesh Commerce Bank
36. Midland Bank Limited
37. NRB Commercial Bank Limited
38. NRB Global Bank Limited
39. South Bangla Agriculture and Commerce Bank Limited
D) Foreign Commercial Banks
1. City Bank
2. HSBC
3. Standard Chartered Bank
4. Commercial Bank of Ceylon
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5. State Bank of India
6. Habib Bank Limited
7. National Bank of Pakistan
8. Woori Bank
9. Bank Alfalah
10. ICICI Bank
E) Specialized Development Banks
1. Bangladesh Krishi Bank
2. Rajshahi Krishi Unnayan Bank
3. Progoti Co-Operative Land Mortgage Bank Limited
4. Grameen Bank
5. The Dhaka Mercantile Co-operative Bank Limited (DMCBL)
6. Bangladesh Development Bank Limited
7. Bangladesh Somobay Bank Limited (Cooperative Bank)
8. Ansar VDP Unnayn Bank
9. Basic Bank Limited
10. Karmasangstan Bank
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2.1.3 Features of a Bank

1. Dealing in Money
Bank is a financial institution which deals with other people‟s money i.e. money given by de-
positors.
2. Individual/ Firm/ Company
A bank may be a person, firm or a company. A banking company means a company which is in
the business of banking.
3. Acceptance of Deposit
A bank accepts money from the people in the form of deposits which are usually repayable on
demand or after the expiry of a fixed period. It gives safety to the deposits of its customer. It
also acts as a custodian of funds of its customers.
4. Giving Advances
A bank lends out money in the form of loans to those who require it for different purposes.
5. Payment and Withdrawal
A bank provides easy payment and withdrawal facility to its customers in the form of cheques
and drafts; it also brings bank money in circulation. This money is in the form of cheques,
drafts, etc.
6. Agency and Utility Services
A Bank provides various banking facilities to its customers. They include general utility ser-
vices and agency services.
7. Profit and Service Orientation
A bank is a profit seeking institution having service oriented approach.
8. Ever Increasing Functions
Banking is an evolutionary concept. There is continuous expansion and diversification as re-

gards the functions, services and activities of a bank.
9. Connecting Link
A bank acts as a connecting link between borrowers and lenders of money. Banks collect money
from those who have surplus money and give the same to those who are in need of money.
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10. Banking Business
A bank‟s main activity should be to do business of banking which should not be subsidiary to
any other business.
11. Name Identity
A bank should always add the word “bank” to its mane to enable people to know that it is a bank
and that it is dealing in money.
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2.1.4 HRM Practices of Banking Sector in Bangladesh

Human Resource Management
Human resource is a term used to describe the individuals who comprise the workforce of
an organization, although it is also applied in labor economics to, for example, business sectors
or even whole nations. Human resources is also the name of the function within an organization
charged with the overall responsibility for implementing strategies and policies relating to the
management of individuals (i.e. the human resources). This function title is often abbreviated
to the initials „HR‟.
The overall purpose of human resources (HR) is to ensure that the organization is able to
achieve success through people. HR professionals manage the human capital of an organization
and focus on implementing policies and processes. They can specialize in finding, recruiting,
selecting, training, and developing employees, as well as maintaining employee relations or
benefits. Training and development professionals ensure that employees are trained and have
continuous development. This is done through training programs, performance evaluations,
and reward programs. Employee relations deals with the concerns of employees when policies
are broken, such as cases involving harassment or discrimination. Managing employee bene-
fits includes developing compensation structures, parental leave programs, discounts, and other
benefits for employees. On the other side of the field are HR generalists or business partners.
These HR professionals could work in all areas or be labour relations representatives working
with unionized employees.
HR is a product of the human relations movement of the early 20th Century, when re-
searchers began documenting ways of creating business value through the strategic management
of the workforce.[6] It was initially dominated by transactional work, such as payroll and ben-
efits administration, but due to globalization, company consolidation, technological advances,
and further research, HR as of 2015 focuses on strategic initiatives like mergers and acquisitions,
talent management, succession planning, industrial and labor relations, and diversity and inclu-
sion. In the current global work environment, most companies focus on lowering employee
turnover and on retaining the talent and knowledge held by their workforce.[citation needed]
New hiring not only entails a high cost but also increases the risk of a new employee not being
able to adequately replace the position of the previous employee. HR departments strive to offer
benefits that will appeal to workers, thus reducing the risk of losing employee commitment and
psychological ownership.
The role of HRM practices are to manage the people within a workplace to achieve the or-
ganization‟s mission and reinforce the culture. When done effectively, HR managers can help
recruit new professionals who have skills necessary to further the company‟s goals as well as
aid with the training and development of current employees to meet objectives.
A company is only as good as its employees, making HRM a crucial part of maintaining or
improving the health of the business. Additionally, HR managers can monitor the state of the
job market to help the organization stay competitive. This could include making sure compen-
sation and benefits are fair, events are planned to keep employees from burning out and job roles
are adapted based on the market.
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HR Purpose and Role
In simple terms, an organization‟s human resource management strategy should maximize

return on investment in the organization‟s human capital and minimize financial risk. Human
Resources seeks to achieve this by aligning the supply of skilled and qualified individuals and
the capabilities of the current workforce, with the organization‟s ongoing and future business
plans and requirements to maximize return on investment and secure future survival and success.
In ensuring such objectives are achieved, the human resource function purpose in this context is
to implement the organization‟s human resource requirements effectively but also pragmatically,
taking account of legal, ethical and as far as is practical in a manner that retains the support and
respect of the workforce.
HR Key Functions
Human Resources may set strategies and develop policies, standards, systems, and processes
that implement these strategies in a whole range of areas. The following are typical of a wide
range of organizations:
* Recruitment, selection, and on boarding (researching)
* Organizational design and development
* Business transformation and change management
* Performance, conduct and behavior management
* Industrial and employee relations
* Human resources (workforce) analysis and workforce personnel data management
* Compensation, rewards, and benefits management
* Training and development (learning management)
* Implementation of such policies, processes or standards may be directly managed by the HR

function itself, or the function may indirectly
* Supervise the implementation of such activities by managers, other business functions or via
third-party external partner organizations.
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Compensation Management
Compensation Management is an integral part of the management of he organization. Com-

pensation is a systematic approach to providing monetary value to employees in exchange for
work performed. It may achieve several purposes assisting in recruitment, job performance, and
job satisfaction. It is the remuneration received by an employee in return for his/her contribu-
tion to the organization. It is an organized practice that involves balancing the work-employee
relation by providing monetary and non-monetary benefits to employees. It is a tool used by
management for a variety of purposes to further the existence and growth of the company. It
may be attuned according to economic scenario, the business needs, goals, and available re-
sources. Compensation Management contributes to the overall success of the organization in
several ways. To be effective, the managers must appreciate the value of competitive pay, their
human resources, and have an investment view of payroll costs. We want to maintain pay levels
that attract and retain quality employees while recognizing the need to manage payroll costs.
The increasing competitiveness of the labour market and turnover of employees had resulted
in nightmare in compensation planning. Apart from this, the growing demands of the employees
and competitive salaries offered by multinational companies had almost resulted in a compensa-
tion war in certain industries. Therefore, the human resources managers and tax experts have to
evolve proper compensation planning for High end and qualified employees. The components
of compensation have to be devised in such a way that, it focuses on the growing demands of
employees while retaining the competitiveness and profitability of the company.
Compensation management, also known as wage and salary administration, remuneration

management, or reward management, is concerned with designing and implementing total com-
pensation package. The traditional concept of wage and salary administration emphasized on
only determination of wage and salary structures in organizational settings. Pay is a difficult
topic of conversation in most organizations. In fact, the topic is altogether taboo in many work-
places. It simply isn‟t discussed unless absolutely necessary. And, when it is necessary, such
as when a pay raise (or lack of one) must be explained to an employee, many managers find
themselves at a loss for words. As the dreaded date of such a discussion approaches, managers
may begin checking their sick time banks to see if they can disappear for a day or two.
While it may be a touchy subject, pay is a critical factor in the work lives of employees. Jobs
are accepted or rejected based in part on starting salary and the opportunity for future increases
in pay. Employees compare their pay to that of others in the same line of work. They constantly
compare their pay level to their level of contribution, trying to determine whether the ratio of
give and receive is a fair one. While it may not be a frequent topic of open discussion, employ-
ees think about pay often.
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Approaches of Compensation Management
There are 3P approach of developing a compensation policy centered on the fundamentals

of paying for Position, Person and Performance. Drawing from external market information
and internal policies, this program helps establish guidelines for an equitable grading structure,
determine capability requirements and creation of short and long-term incentive plans. The 3P
approach to compensation management supports a company‟s strategy, mission and objectives.
It is highly proactive and fully integrated into a company‟s management practices and business
strategy. The 3P system ensures that human resources management plays a central role in man-
agement decision making and the achievement of business goals.
* Paying for Position
* Paying for Person
* Paying for Performance
Because it is so important to employees, the issue of pay deserves to be dearly addressed. In

spite of their hesitanee, managers are capable of dealing with this sometimes difficult issue in
a professional and effective manner. By keeping the following basic points about pay in mind,
they can address virtually any pay-related topic with their employees in a professional and pro-
ductive manner.
Functional Overview and Strategy for HRM
These issues motivate a well thought out human resource management strategy, with the
precision and detail of say a marketing strategy.
Failure in not having a carefully crafted human resources management strategy, can and
probably will lead to failures in the business process itself.
This set of resources is offered to promote thought, stimulate discussion, diagnose the or-
ganizational environment and develop a sound human resource management strategy for your
organization. We begin by looking at the seven distinguishable function human resource man-
agement provide to secure the achievement of the objective defined above.
Following on from this overview we look at defining a human resource strategy.
Finally, some questions are posed in the form of a HRM systems diagnostic checklist for you
to consider, which may prove helpful for you to think about when planning your development
programs for the human resources in your organization, if they are truly “your most valuable
asset.
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HR Practices of the Banks in Bangladesh
HR Practices in Bangladesh Banking Industry is the potential industry where the growth of
a country depends a lot. In Bangladesh banking industry is also very influential. This industry is
very big in Bangladesh and holds a lot of skilled employees. So Human Resource Management
(HRM) is very much applicable as well as practiced in the banks of Bangladesh.
Building up efficiency in Banks with the help of HRM
The crucial factors behind successful banking will be continuous and sustained build up of
skills, knowledge, education and attitudes among people working in the banks, particularly the
front line staff, working in the branches.
It is possible through professionalization, which is an internal part of HRM. Bank staff

should be motivated and encouraged to practice professionalism for their personal growth and
thus contribute to the organization‟s growth.
Building efficiency in banking is, therefore largely dependent on the best selection process
adopted by the HR department. There is imperative need to build up skills within an organiza-
tion for the successful managing of available HR.
Banks have vast human resource specialized in multiple disciplines like technology, law,
operations, foreign exchange, administration etc. the basic function of HR is to manage them
efficiently for continuous success.
HR Process of Bangladesh Bank
Bangladesh Bank, the central bank as well as chief authority to regulate country‟s monetary
and financial system, was established in Dhaka as a body corporate vied the Bangladesh Bank
Order, 1972 (P.O. No. 127 of 1972) with effect from I6th December, 1971. Bangladesh Bank
started functioning with all capital and liabilities of the then Dhaka branch of State Bank of Pak-
istan. At present it has got 9 branches and those are located at Motijheel, Khulna, Sadarghat,
Bogra, Chittagong, Sylhet, Barisal, Rangpur and Rajshahi in Bangladesh and total number of
staffs stood at 7240 as on end December 2009.
Core Functions of Bangladesh Bank
BB as the central bank of Bangladesh executes all the functions that a central bank tradi-
tionally performs as elsewhere in the world. The core functions of BB are briefly discussed as
follows:
1. BB formulates and implements monetary policy aiming at stabilizing domestic monetary

value and maintaining competitive external per value oft aka for fostering growth and develop-
ment of country‟s productive resources in the best national interest.
2. BB formulates and implements intervention policies in the domestic money market and for-
eign exchange market. BB intervenes the money market with some policy instruments such as
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i. Open market operation (treasury bills/bonds, redo, reverse repo auctions)
ii. Variations in reserve ratios such as cash reserve requirements

(CRR) and statutory liquidity ratio (SLR)
iii. Secondary trading
iv. Discounting rate/ bank rate and
v. Moral suasion
3. BB monitors and supervises scheduled banks and non-bank financial instructions (NBFIs)
that include off-site supervision and on-site supervision in order to enhance the safety, sound-
ness, and stability of the banking system to ensure banking discipline, protect depositors‟ inter-
est and retain confidence in the banking system.
4. BB holds sole responsibility of the management of international reserve representing aggre-

gate of BB‟s holding of gold, foreign exchange SDR and reserve position in the IMF.
5. BB, as the central bank of Bangladesh reserves sole responsibility to issue bank note
6. BB performs as a clearing house for the scheduled banks to clear and settle inter-bank pay-
ment arising through drawing cheque, drafts, bills, etc to one another.
7. BB acts as a banker to the government.
8. BB functions as a lender of the last resort for the government as well as for the country‟s
scheduled banks.
9. BB acts as an advisor to the government.
10. BB directs the growth expediting programs for the national interest.
Additionally, BB‟s functions include some other promotional activities such as development of
new instruments, guidelines for money and financial market participants, providing training to
the banks and NBFIs, monitoring and encouraging corporate social responsibilities (CSR) exe-
cuted by banks and NBFIs and so on. HRM process of Bangladesh Bank.
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HR Functions of Bangladesh Bank
Human Resources Department (HRD) manages centrally the manpower of the bank at work
places through resourcing, placement, training, performance, discipline etc. It emphasizes on
strategic and value added Human Resources (HR) activities involving the designing, updating
and amending HR polices and procedures for continuous improvement.
To execute the above mentioned issues - HRUs functions are accomplished under the following
divisions:
* Planning and Resourcing Division
* Development and Benefit Division
* Performance and Reward Division
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2.2 HRM Practices of Mutual Trust Bank Limited

2.2.1 Mutual Trust Bank Limited An Overview
Mutual Trust Bank Ltd. (MTB) is a third generation private commercial bank, based in
Dhaka, Bangladesh and has been adjudged as the Best Financial Institution of 2014 at the DHL-
Daily Star Business Awards 2015. Earlier, MTB had also received the first-ever best “SME
Bank of the Year” and best “Women Entrepreneurs‟ Friendly Bank of the Year” by Bangladesh
Bank and SME Foundation. MTB has recently been awarded the Best Presented Annual Report-
2018 (3rd position) in the Private Banks category by The Institute of Chartered Accountants of
Bangladesh (ICAB). MTB aspires to be one of the most admired banks in the nation and recog-
nized as an innovative and client-focused company. With our current network of 119 branches
& 33 Sub branches, 200 Agent Banking Centers, 18 kiosks, 310 modern ATMs including 6
CRM Booths, 4 Air Lounges, over 3,220 Point of Sales (POS) machines, located in prime com-
mercial, urban and rural areas, MTB offers fully integrated real time Online Banking Services,
Internet and SMS Banking to its clientele, through a dedicated Team of experienced Relation-
ship Managers and Alternate Delivery Channels (ADC).”
The Company was incorporated as a Public Limited Company on September 29, 1999, under
the Companies Act 1994, with an Authorized Share Capital of BDT 1,000,000,000 divided into
10,000,000 ordinary shares of BDT 100 each. At present, the Authorized Share Capital of the
company is BDT 10,000,000,000 divided into 1,000,000,000 ordinary shares of BDT 10 each.
The Company was also issued Certificate for Commencement of Business on the same day
and was granted license on October 05, 1999 by Bangladesh Bank under the Banking Compa-
nies Act 1991 and started its banking operation on October 24, 1999.
2.2.2 Vision
Mutual Trust Bank‟s vision is based on a philosophy known as MTB3V. We envision MTB
to be:
- One of the best performing banks in Bangladesh.

- The bank of choice.
- A truly world-class bank.
2.2.3 Mission
We aspire to be the most admired financial institution in the country, recognized as a dy-
namic, innovative and client focused company that offers an array of products and services in
the search for excellence and to create an impressive economic value.
2.2.4 Organization Structure of Mutual Trust Bank Limited

Mutual Trust Bank Ltd. (MTBL) was incorporated on 29 September 1999, under the com-
pany‟s act-1994 as a pioneer commercial bank in the private sector in Bangladesh with its Head
Office in Dhaka. The bank started functioning from 05th October 1999 with the approval of
Bangladesh Bank under the guidelines, rules and regulations given for scheduled commercial
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banks operating in Bangladesh.
2.2.5 Human Resource Management of Mutual Trust Bank Limited

Human resource development and management has been proved as one of the most Crit-
ical aspects of attaining organizational effectiveness. Human Resource Management (HRM)
is concerned with the „people dimension in management‟. Mutual Trust Bank Limited. Since
its inception, has placed equal emphasis on all the four key functions of the processor HRM-
acquisition, development, motivation and retention. The various programs undertaken by the
Mutual Trust Bank to enrich the quality of human resource are mainly aimed at increasing pro-
fessional knowledge and skill levels of employees through training and development, in order
to form a well-equipped work force for providing excellent services to the customers.
Moreover, top executive of the Bank are frequently send abroad for enabling them to know
the functions and mechanisms of financial, money and security market of the developed coun-
tries and also to exploring business opportunities. Quit a large numbers of executives and offi-
cers of the Bank have so far been trained at Bangladesh Institute of Bank Management (BIBM),
Bangladesh Bank Training Academy (BBTA) etc. covering divers areas of the financial sys-
tem including commercial banking as carefully selected are largely concentrated around core
banking issues like credit management, international Trade, treasury management, audit and
inspection, loan review & monitoring and project management.
Job Requirement Analysis
For effective recruitment and selection HR personnel of Mutual Trust Bank Limited does
job Requirement analysis at first. In which post they need how many employee(s), what should
be qualification of that employee(s), in which time they need the employee(s), for rural branch
or out side of Dhaka branches from where they have to recruit employee(s) etc. Without this
requirement analysis an organization can not requite effectively and efficiently.
Recruitment
Recruitment refers to process of finding right people for the right job or function, usually
undertake by Human Resource Department. Advertising is commonly part of the recruiting pro-
cess and Mutual Trust Bank does it through newspapers. Mainly two newspapers they advertise
for Prothom Alo and Daily Star. Different job required different skills. So, suitability for a job
is typically assessed by looking for skills, e.g. communication skills, computer skills. Evidence
for skills required for a job may be provided in the form of qualifications (educational or pro-
fessional), experience in a job requiring the relevant skills or the testimony of references.
Recruitment Process
Management Trainee recruitment process is different than other employee. In case of Man-
agement Trainee Mutual Trust Bank takes written examination. Other employee‟s recruitment
processes are as follows. After advertising the newspaper the Banking Officers and Trainee
Officers of Human Resource Department collect the CVs from reception desk. CVs are posted
by hand or by post. HR employee preliminary screen the CV by matching the post they want
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for. With the instruction of First Assistant Vice President (FAVP) of HRD Banking Officers
and Trainee Officers start to entry the CVs in the software. Software is also screening the by
matching the criteria, because software is designed as the criteria set up. If the criteria don‟t
match the software will not allow to entry the CV. After entering the CV in the software they
printout the CV statement in quizzes format, six CVs are in one page. With the statement the
Banking Officers go to the Head of the HRD. The Head of the HRD, Senior Executive Vice
President (SEVP), Executive Vice President (EVP) do an informal discussion and screen the
CV. Then these top level managers give a schedule for interview. First Assistant Vice President
(FAVP) of HRD set the venue for interview and call the top level management to lead the inter-
view. Banking Officers call the candidates to attend the interview. If the preliminary interview
is successful, the candidate will be invited to another interview. Then the selected candidates
have to face the final interview. It is not set that, there will be three interviews. It could be four
or more, depends on situation and post.
Joining
After selecting from the recruitment process bank offer the candidate to join the bank. If
candidate agree to join, the bank then gives him/her appointment letter. In appointment letter
the date of joining, which document should be attached, salary parameters are mentioned. With
the reference of appointment letter within the joining date the candidate have to come in the Hu-
man Resource Department (HRD) in the Corporate Office. The Banking officer of the Human
Resource Department (HRD) processes the joining. The candidate has to fill up a joining form,
in which there are personal information, references, nominees name and percentage of given
power of provident fund etc. S/he has to sign the Code of Conduct, and submit a joining letter
and a confirmation letter. Banking Officer verifies hisor her certificates, and collect nationality
and medical certificates. In terms of some employee like Management Trainee, they have to
sign bond to join the service. These all documents will enclose in his/her personal file. After
collecting all the documents Banking Officer creates the candidate‟s personal file and go to the
Head of the HRD and DMD to accept his/her joining. After accepting his/her joining, now
the candidate becomes an employee and Human Resource Department (HRD) gives him/her a
posting order.
Posting and Transfer
An employee first joins in the Human Resource Department (HRD) in the Corporate Office.
After accept his/her joining s/he is posted to Branch Office. Before to get the posting order
employee doesn‟t know in which Branch s/he will be posted. All jobs are transferable in this
Mutual Trust Bank. The Competent Authority has the right to transfer employees of the Bank
from one department to anther department or from one branch to another branch of the Bank.
Human Resource Department keeps one copy of posting in employee‟s personal file and the
copy of posting order distribute among employee, the FVP and manager of employee‟s branch,
DMD and head of Corporate Affairs and Administration, Managing Director‟s Secretariat Mu-
tual Trust Bank Limited the FVP and manager of branch where employee will be posted and IT
Department.
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Confirmation of Service
When an employee joins in the service s/he will remain under provision of one year. If the
employee performs satisfactory in his/her job s/he will confirm of his/her service and that is
normally a promotion. For example, one employee joins as a Teller or Trainee Officer, if his/her
performance is satisfactory then s/he will confirm as Banking Officer (BO). If the employee‟s
performance is not satisfactory then the bank can extent the provision or can confirm as Teller
or Trainee Officer.
Leave Fare Assistant (LFA)
Leave Fare Assistant is the fifteen days leave with one month gross salary amount payment
and this payment will not count in monthly salary. After one year of confirmation of service
every employee will get this facility for every year. For mental And physical recreation of em-
ployee Mutual Trust Bank provides this facility and this mandatory for an employee. Leave
Fare Assistant is payable to the employees or their nominee(s) who are not in the payroll of the
bank on the date of payment due to retirement/death. With the provision that those who have
completed one full year of service in the Bank before the date of payment will receive entire
amount of LFA and others not completing one full year on the date of payment will receive LFA
proportionate to his/her period of service during the concerned year.
Pay and Allowance
The scale of pay and other allowances of officers and employees of the bank are prescribed
by the Competent Authority from time to time. The initial pay of an employee appointed or
promoted to the higher post are ordinarily fixed at the initial stage of the scale of pay of the post
to which he promoted or appointed.
President and Managing Director to Banking Officer the salary breaks down are Basic pay,
House Rent Ceiling, Conveyance Allowance, Medical Allowance and Entertainment Allowance.
Here House Rent Ceiling is 54%, Conveyance Allowance is 26%, Medical Allowance is 10%
and Entertainment Allowance is 10% of basic salary. Tellers and Trainee Officers are got Con-
solidated Salary only, because they are on provision period.
Top level Officers from President and Managing Director to First Assistant Vice President
(FAVP) got extra charges like House Maintenance, Utilities and Car Maintenance. Deputy Man-
aging Director (DMD) and Senior Executive Vice President (SEVP) got Electricity, Gas, Tele-
phone and Domestic Aids also.
President and Managing Director to Executive Vice President (EVP) got direct car from the
bank. From Senior Vice President (SVP) to First Assistant Vice President (FAVP) got Car Loan
facility. And President and Managing Director to First Assistant Vice President (FAVP) got
House Loan also. These loan special for bank staff only, and the name of these loan are Staff
Car Loan, Staff House Building Loan. The bank takes only 7% interest on these loan. Group
Insurance facilities will get the entire confirmed employee. This insurance basically health in-
surance and will get facilities on only hospitalization. In this insurance officers and executives
will get the benefit of one spouse and two children.
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Kinds of Terminal Benefits
The following kinds of terminal benefits are allowable to a regular and full-time employee
of the bank. Gratuity Contributory Provident Fund Benevolent Fund.
Festival Bonus
Regular employee will be entitled to Festival Bonuses payable on the occasion of Eidul-
Azha and Eid-ul-Fitre. The bonus amount will be the half of his/her salary.
Performance Bonus
If the bank makes profit, the employees will be entitled to 3% of pre-tax profit as perfor-
mance bonus. Fifty percent of such bonus distributed on the basis of basic pay of an employee,
and balance fifty percent on the basis of performance of individual employees. Performance
appraisal for the purpose made on the criterion set by the management time to time.
When bank send any employee for training and call any employee for interview then the
bank will give him/her travel allowance and daily allowance. In this case the employee has to
claim his/her allowance with bus/ train/ plane tickets. Human Resource Department will verify
the claim and pay the employee.
Training and Development
Training is the processes of teaching the employee the skill for their better act upon on the
job. Training is very helpful for the employees for their better performance. There are many
methods of training, but in the banks of Bangladesh two methods are commonly used, lecture
and on-the-job training. Many institute and banks like BIBM, IBA, World Bank, Asian Devel-
opment Bank, Bangladesh Bank, Citi Bank etc arrange varies kind of training. Lots of banks of
Bangladesh have their own training institute and other banks employee can participate in that
training. Mutual Trust Bank employees also participate in the other banks training also. Mutual
Trust Bank doesn‟t have its own training institute but this bank arranged many type of training
in its corporate office and other banks employees can contribute these trainings. A number of
trainings are specific for specific department like Awareness of fake money, money launder-
ing, Q-cash debit card are compulsory for cash department employees. Other trainings are like
Customer Credit Scheme and Lease Finance Scheme, Credit Risk Grading, Credit risk Manage-
ment, Loan Classification and Provisioning, Loan Documentation, Lessons Learnt from Credit
Feature, Structured finance for Large Projects in Bangladesh, Exchange Rate Management etc.
Employee can not participate any in-house training from their own interest, Human Resource
Department will select the employee to participate the training. Human Resource Department
sends office notice to those employees to attend the training. After attending their training the
employee have to submit a report on that training to the Human Resource Department. Some
times Human Resource Department sends the employee to attend the training outside of the
Bangladesh.
Training and development managers and specialists conduct and supervise training and de-
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velopment programs for employees. Increasingly, management recognizes that training offers
a way of developing skills, enhancing productivity and quality of work, and building worker
loyalty to the firm, and most importantly, increasing individual and organizational performance
to achieve business results. Training is widely accepted as an employee benefit and a method
of improving employee morale, and enhancing employee skills has become a business impera-
tive. Increasingly, managers and leaders realize that the key to business growth and success is
through developing the skills and knowledge of its workforce.
Other factors involved in determining whether training is needed include the complexity
of the work environment, the rapid pace of organizational and technological change, and the
growing number of jobs in fields that constantly generate new knowledge, and thus, require new
skills. In addition, advances in learning theory have provided insights into how adults learn, and
how training can be organized most effectively for them.
Training managers provide worker training either in the classroom or onsite. This includes
setting up teaching materials prior to the class, involving the class, and issuing completion cer-
tificates at the end of the class. They have the responsibility for the entire learning process, and
its environment, to ensure that the course meets its objectives and is measured and evaluated to
understand how learning impacts business results.
Training specialists plan, organize, and direct a wide range of training activities. Trainers
respond to corporate and worker service requests. They consult with onsite supervisors regard-
ing available performance improvement services and conduct orientation sessions and arrange
on-the-job training for new employees. They help all employees maintain and improve their job
skills, and possibly prepare for jobs requiring greater skill. They help supervisors improve their
interpersonal skills in order to deal effectively with employees. They may set up individualized
training plans to strengthen an employee‟s existing skills or teach new ones. Training specialists
in some companies set up leadership or executive development programs among employees in
lower level positions.
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2.3 HRM Practices of City Bank Limited

2.3.1 City Bank Limited An Overview
From 1983 till date, City Bank has been a case study in evolution, having transformed
over time from a traditional organization to a critically acclaimed multi-faceted institution that
embraces global best practices and chooses to be at the forefront of technological initiatives.
Unlike many, the Bank‟s criteria for success are not only the bottom-line numbers but also the
milestones set towards becoming the most complete bank in the country. The bank provides
products and services in retail banking, corporate finance, SME Banking, women banking, dig-
ital banking, asset management, equity brokerage, and security. It has 132 branches. The bank
is a licensee to issue Visa and MasterCard Debit and Credit Cards and it is the sole licensee of
American Express Cards in Bangladesh. The bank is responsible for all operations supporting
the issuing of the new credit cards, including billing and accounting, customer service, credit
management, and charge authorizations, as well as marketing for American Express cards in
Bangladesh. The bank is a real-time online bank, having its branches, SME/Agri branches
spread across Bangladesh along with a full-fledged Islami Banking branch.
2.3.2 Vision
The Financial Supermarket with a Winning Culture Offering Enjoyable Experiences.
2.3.3 Mission
Offer wide array of products and services that differentiate and excite all customer segments.
Be the ”Employer of choice” by offering an environment where people excel and leaders are
created.
Continuously challenge processes and platforms to enhance effectiveness and efficiency.
Promote innovation and automation with a view to guaranteeing and enhancing excellence
in service.
Ensure respect for community, good governance and compliance in everything we do.
2.3.4 Human Resource Management of City Bank Limited

When we contacted in the City Bank Ltd., we came to know that the organization has a de-
partment called ADMINISTRATIVE DEPARTMENT, which is actually their Human Resource
Management department. This department, in the organization, performs a wide range of tasks,
though all of the HRM practices are not in the organization. All the branches of the bank do
not have the HRM or such department. Sony the head office has it; so this one department has
to keep track of all the employees in al the branches. This department performs the duty of re-
cruiting, selecting, training and development, motivating, job designing, performance appraisal
and rewarding and giving benefits etc.
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Recruitment
For recruitment the organization follows al the possible ways of recruitment.
Internal Search
First of all, the Administration Department searches for the capable person for any vacant
post within the organization. It means that, they promote the lower order workers to upper order
in the organizational chart. But for this promotion every employee has to have some qualifica-
tions and these are:
(a) The employee must have a certain degree to be promoted.
(b) S/he must be senior to the employees in his/her department.
(c) S/he must have to serve the organization for at least for a fixed period of time. This period
is a variable for different posts. Such as, for promotion in the same department one worker only
needs seniority and two years of service in the organization. But for promotion from service
level to officer level, one must have at least four years of service in the same post in the organi-
zation, which is six years for promotion to executive level from officer level.
Employee Referrals/Recommendations
If the above process does not meet the requirement, the organization then goes for Employee
Referrals or Recommendations. They suggest their employees to recommend some eligible per-
sons for vacant posts and then test those persons and if they pass, give them the opportunity
to work in the organization. Usually, service and staff level workers are recruited through this
process..
Advertisement
When the organization requires quite a large number of workers at one time, they go for
advertisement in the national dailies. Normally service or junior level officers, but sometimes,
senior officers are also recruited through this process. Candidates with the required qualification
apply with a full bio-data and with a hand-written application. The application is not granted if
it is not written by the applicant himself..
Selection
The banks selection procedure is as follows:
Initial Screening
First, through the initial screening process, they sort out the applications of those who have the
actual qualifications [Degree, age, experience (if necessary)] for the post. Then these candidates
are sent the admit card for the employment test.
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Employment Test
The City Bank Ltd. has a two step employment test- the written test and the interview. The
bank contacts with some other organizations, like IBA, BIBM or any other institute, to conduct
the written test for them. The bank sails the boat in that organization, where their cost will be
minimal. The selected organization then takes the written test, screens out the answer sheets and
sends the number-sheet to the bank. The bank has a preset standard score and those who have
scored more than or equal to that score are called for the interview. The bank itself conducts
the interview. The bank hires reputed banking specialists within the country for conducting the
interview. After the interview the total marks of the written test and the interview are added.
Those who are at the top of the final list get the opportunity to serve in the organization. The
background checking of the employee is done at the interview time and through the bio-data the
candidates submit.
Final Selection
The candidates who pass both the written test and the interview are considered for final appoint-
ment. Within those candidates the required number of employees are taken and given the final
appointment. These employees have to fill up an appointment form at the time of joining. (The
form is attached with the report in the Appendix I). Those of them, who are currently employed,
do not have a previous banking experience have to go serve as a trainee for at least two years.
Those who have previous experience are not necessarily need to be trained. Sometimes the se-
lected employee has to submit a bond that, s/he will not leave the organization before certain
years of service.
Employee Training and Development
The City Bank Ltd. has a system of training the employees on a regularly basis, particularly
the newly appointed employee. The bank has a training institute of its own with high computer
facilities, where every year some training courses are completed. The bank sometimes sends
its employees to other organizations for more training. In the last year (1998) the bank trained
291 employees in 15 courses in its own institute and also got 81 employees trained in various
30 courses conducted by the Bangladesh Institute of Bank Management (BIBM). In the current
year the bank has also taken some training program.
Motivation
One of the main criteria for effective human resource management is motivation. For the
desired result of any organization, motivating the employees is very important. So the City Bank
Ltd. also tries to motivate its employees. But the bank does not have a standard motivational
process. It motivates only with the help of increment. One thing about this increment is that
it has no specific period. The increments may be annual, semi-annual or quarterly, depending
upon the overall performance of the workers and the bank itself.
The human resource officer informed us that they believe in McGregor‟s “Theory Y” and
emphasize the safety and love need for all employees. So besides the increment, the bank some-
times tries to motivate the employees by full-filling their required needs of the employee. But as
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it is a centralized organization, management plays a big role with the administrative department
in determining these motivating factors. The bank is always cautious that all the hygiene factors
are present in the environment and that if the employees are not motivated, at least they are not
de-motivated.
Performance Appraisal
Unlike the selection, training and motivation process the City Bank Ltd. does not have a
standard performance appraisal process. Though it has a system but it is not very effective
according to Mr. Mushtaque Ahmed. Actually the problem is that the bank does not have a
standard set of performance evaluation System. The performance evaluation and appraisal is
therefore done mostly by the observation on how the employee is doing or dealing with a client.
The City Bank Ltd. has a special unit, under its Administrative Department, to conduct this
performance evaluation and appraisal. This unit keeps its eyes on the performance of all the
employees throughout the year and suggests necessary actions (Reward or Punishment) where
it is necessary. Sometimes special task committee visits any branch without any precaution. In
this way the bank conducts its performance measurement and appraisal process.
Reward System
As the bank does not have any specific performance evaluation and appraisal system it does
not provide any standard reward system. If any employee can really impress the authority by
his/her extra-ordinary performance s/he is then usually financially rewarded, which compara-
tively has a low effect on the employee who is in quite a higher level of the organizational
ladder. On the whole, increment is the only reward that the bank uses for motivating or appreci-
ating its employees.
Compensation Administration
The bank thinks that its compensation package is very sensitive and confidential and can-
not be exposed to the people from outside. Here we are again very grateful to Mr. Mushtaque
Ahmed for providing us with some portion of this confidential information. The bank‟s pay
structure is pretty much dependent on job evaluation. It means that the bank tries to compensate
according to the job difficulty or in other words job hierarchy.
The bank compensate firstly by „classification method‟ of job evaluation and then by „rank-
ing method‟. While compensating any worker, the bank first determines the class of that post.
(The City Bank Ltd. has four classes of employees – Executives, Officers, Service Workers and
Staffs). After classifying, the bank, determines the rank of the post within the classification and
compensates according to the compensation scale. The Administrative Officer could not provide
us with the pay scale because of some internal problems but informed us that the compensation
scale is attractive enough for the employees working in the bank.
Besides this normal pay scale, the bank has special compensation system for the higher
level employees (the Executive Level employees). The bank provides these employees not only
according to the standard scale but also some additional services like providing residence, tele-
phone etc.
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Chapter III
FINDINGS
32
Chapter 3
OVERALL FINDINGS
3.1 FINDINGS
After the collection and analysis of data I have got some findings. This findings are completely
from my personal point of view. Those are given below:
- The Bank can not practices proper HRM guideline. The HRM have some objectives but the
bank can not follow all those objectives.
- Training and development sector, there are on-the-job and off-the-job training techniques the
bank follow some technique, but the bank can not follow arranges off-the-job techniques video
and films show.
- In the recruitment sector, Banking Sector of Bangladesh. Can not follow the proper guideline
of HRM.
- To evaluate employee‟s performance, Banking Sector of Bangladesh can not provide their em-
ployee‟s performance properly.
- The orientation process, the bank can not follow of those process.
- There are several ways of employee‟s rewards, such as intrinsic vs. Extrinsic rewards, financial
vs. non financial rewards, and performance- based vs. membership rewards, but the bank can
not provides all of the system.
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3.2 FINDINGS of Mutual Trust Bank Limited

Mutual Trust bank, as we know, is one of the fastest growing banks in Bangladesh. This credit
goes to HR department. HR department works with people and we know that for making an
organization more effective the necessary thing is to be ensure that “right people in right place
with right skills and knowledge”. They are doing this thing very much effectively. No doubt
MTBL is different from other organization but some little lacking is founded by me. They are:
* MTBL gives high emphasis on recruitment and selection of job candidates.
* MTBL offers a competitive remuneration, good environment and favorable organizational cul-
ture in order to offer suitable candidates.
* At the time of selection, MTBL takes all the necessary steps which will ensure that it will have
efficient and skilled labor.
* MTBL hire employees on the basis of contract of two years which is also long time and is
obstacle to attract suitable candidates.
* The banking sector is growing at a great pace.
* Government is favorable to financial institutions.
* Over competition among banking sector, Instable stock market & High call money rate.
* Organizational Structure is flat for each and every department, so employee can easily com-
municate with their supervisor. In MTBL employees are evaluated all the time. As a result they
are always worried about their performance. For a service provided organization, it is necessary
to evaluate the employees but some time the presser may de-motivate them. So they have to
make clear concept about the evaluation process to create motivation among them.
34
Thesis Paper on
3.3 FINDINGS of City Bank Limited

* The job analysis, human resource planning, recruitment and selection policy of The City Bank
Limited is not standard because the manager of HRD is not capable to apply the various HRM
function.
* The bank does not accurately follow the performance appraisal. There is being occurs some
discrimination, nepotism are exercised. As a result, employees with same efficiency are given
different score by different author.
* The Pay Packages of the Bank is not competitive in comparing to other Bank operating in
Bangladesh.
* Employees training is not arranged frequently basis.
* Though the organization is not in lacking of employees, but I think there is lacking of proper
employees- that means “lack of right people in right place”.
* Succession Planning involves having senior executives periodically review their top executives
and those in the next lower level to determine several backups for each senior position. This is
important because it often takes years of grooming to develop effective senior managers. But
the organization has not focus yet such a succession planning.
* Some employees says that extra work load in a regular basis is a common criteria of the orga-
nization. For this reason, the bank sometime loss employees attractiveness.
* Only the head office contains HR division and all the HR activities are controlled from the
head office. For this reason, when sometimes any HR problems raised employees have to wait
for a long time to solve it. Moreover, this department is not too structured.
* Training evaluation systems are not properly used or maintained.
35
Thesis Paper on
Chapter IV
RECOMMENDATIONS AND
CONCLUSION
36
Chapter 4
RECOMMENDATIONS AND
CONCLUSION
4.1 RECOMMENDATIONS
I gather the experience of human resource management and how manage an information
system of an organization. I gather some problems by discussing the HR personnel. So I would
like to recommend about those problems as follows.
4.2 Mutual Trust Bank Limited

Extension of Human Resource Department
With 49 branches Mutual Trust Bank has 711 employees. But in HR department the num-
bers of employees are 10 to 12. When something change for all employees like Increment it is
tough for them to update whole employees‟ file. It is too hard for HR employees to update all
employees‟ data. I have gone through a focus group discussion (FGD) with HR employees and
they also discussing that, the HR department should be gradually extended at the branch level
as the bank is expanding so that each branch has a HR official. A Study on Human Resource
Management and Human Resource Information System of Mutual Trust Bank.
Stop Reference Appointment
Mutual Trust Bank management and particularly the Board of Directors must change the
System of appointing people by giving their reference. It has been deeply observed that most of
the reference appointees are not up to the standard and have a poor performance.
For the sake of the bank‟s future and further strengthening the quality of work force, this ten-
dency to appoint people on reference must be stopped. It may not be absolutely possible to
eliminate the reference appointment system as it is a local private company.
But still the tendency can be reduced to a certain extent if bold steps are undertaken by the
management and the Board of Directors.
37
Thesis Paper on
Trained System Operators
Currently the branches do not have qualified system operators, rather ordinary persons have
been appointed in this position and they learned the job by a trail and error process. This
tendency should be eliminated immediately and next time the management or the concerned
department should recruit qualified and skilled system operators who have both hands on expe-
rience as well as some academic background.
Utilize the Existing System
Mutual Trust Bank has fully automated system in Human Resource Department. But they
don‟t totally utilize this software. Still they do paper based work. In case of Salary payment they
use Excel Sheet Record. It is true that it is too hard for HR employees to update all employees‟
data. But they have the system and they should utilize that properly.
Lesson I have learn
Formulating a succession planning and better salary package is helpful to retain the employee
and it will save the organization from incurring loss in Training and Development program. If
the succession planning and salary package is not attractive, the organization may face lack of
talented employee.
A proper evaluation system is very essential for the organization. If the evaluation process
does not reflect the real scenario all other efforts will be ruin miserably. In case of bank, as
the branch Manager and Deputy Branch Manger handles the whole HR activities in the branch
level, so they should be trained on Human Resource Management. To get proper evaluation
result the HRD may go through a cross functional evaluation process, as instance, each and ev-
ery member of a branch will evaluate separately all the employees, except thyself, of that branch.
The HRD may formulate a secret evaluation form which will be evaluated by each and every
employee of a branch, except the branch Manager and the Deputy Manager to evaluate the HR
practice of the Branch Manager and Deputy Branch Manager.
The Recruitment board should be HRD oriented. HRD can find out the best fitted employ-
ees for the organization. And the organization should not have any predetermined preference
for any institute‟s student, because sometimes it causes bias decision. The diversified workforce
could be a better team which may fulfill the organization‟s need properly.
38
Thesis Paper on
4.3 City Bank Limited

We can conclude that, the City Bank Ltd. has a formalized procedure of practice in some
area of human resource management but in other areas, the practice is very poor. Based on
our findings, we have some recommendations that we think will be helpful in the bank‟s HRM
policy.
The bank should increase the total number of trained employee year by year.
The bank should undertake other incentives along with increments to motivate employees. Non-
monetary incentives might be a great motivation for the officers and service workers.
The bank should also introduce gain-sharing approaches to motivate its employees. Profit-
sharing can be considered in this aspect. Also, after serving the bank for a certain amount of
time, the bank may provide the employees with partial ownership of the bank. This will reduce
turnover.
The bank does not have any practice of “Human Resource Survey”, which is a negative point
for the bank‟s Administrative Department. Therefore, this practice should be introduced to the
bank‟s HRM policies.
The bank may provide insurance benefits (especially health-related and life insurance) to the
employees as an additional motivating factor.
At present, the bank does not have any systematic practice of employee counseling. Such a
practice might be beneficial to the employees.
39
Thesis Paper on
4.4 CONCLUSIONS
Bangladesh is a developing country with an impoverished banking system, particularly in
terms of the services and customer care provided by the government run banks. In recent times,
private banks are trying to imitate the banking structure of the more developed countries, but
this attempt is often foiled by inexpert or politically motivated government policies executed
by the central bank of Bangladesh, Bangladesh Bank. The outcome is a banking system fos-
tering corruption and illegal monetary activities/laundering etc. by the politically powerful and
criminals, while at the same time making the attainment of services or the performance of in-
ternational transactions difficult for the ordinary citizens, students studying abroad or through
distance learning, general customers etc. Private banks in Bangladesh prepared their financial
report in accordance with Generally Accepted Accounting Principles (GAAP), International Ac-
counting Standards (IASs) adopted as Bangladesh Accounting Standards (BASs) on the basis of
going concern under historical cost convention and applicable legislative laws and regulations.
This report is the result of three month‟s internship program in the Human Resource Depart-
ment of Mutual Trust Bank Limited. Human resource department plays a vital role in operating
a company. These banks have this department since it started operating in this country. 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 bank. Being a complete separate department to deal with some key respon-
sibilities, 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. Regarding my days spent
at Mutual Trust Bank, I gathered knowledge that is going to help me in building my career in
future. In my report, I have tried to reflect my understanding and experience that I have gathered
as correctly as possible. In spite of this, there may be some imperfections. From the practical
point of view I can declare boldly that I really have enjoyed my Internship program at that
branch from the very first day.
40
Thesis Paper on
REFERENCES
41
Thesis Paper on
REFERENCES
Books, Journals and Internet Sources
* Adams, J. (2007) Managing people in organizations: contemporary theory and practice.

Basingstoke: Palgrave Macmillan.
* Aston Centre for Human Resources (2008) Strategic human resource management: building
research-based practice. Mumbai: Jaico Publishing House.
* Brewster, C. (2011) International human resource management. 3rd ed. London: Chartered
Institute of Personnel and Development.
* Chalofsky, N.E., Rocco, T.S. and Morris, M. (eds.) (2014) Handbook of human resource
development. Hoboken, NJ: John Wiley & Sons.
* Farnham, D. (2015) Human resource management in context: strategies, insights and

solutions. 4th edition. London: Chartered Institute of Personnel and Development.
* Storey, J. (1992) Developments in the management of human resources: an analytical review.

Vol. Warwick studies in industrial relations. Oxford: Blackwell Business.
* Thorpe, R. and Holloway, J. (2008) Performance management: multidisciplinary perspectives.

New York: Palgrave Macmillan.
* Banking in Bangladesh:
https://en.wikipedia.org/wiki/Banking in Bangladesh
* HRM Practices of Banking Sector in Bangladesh :

https://saylordotorg.github.io/text human-resource-management/s10-compensation-and-benefits.html
* https://www.jibikaplexus.com/the-practice-of-hr-management-system-in-bangladesh
* City Bank Limited: https://www.thecitybank.com
* Mutual Trust Bank Limited: https://www.mutualtrustbank.com
42

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THESIS PAPER ON

Human Resource Management Practices of Banking Sector

Submission Date: 5 June 2023

Subject: Submission of Thesis Paper.

I wish every success in her life.

2 HUMAN RESOURCE MANAGEMENT PRACTICES OF BANKING SECTOR

4 RECOMMENDATIONS AND CONCLUSION 37

1.1 Background of the Study

1.2 Research Objectives

i. To acquire knowledge about “Human Resource Management Practices of Banking Sector in

iii. To recommend for improvement of existing “Human Resource Management Practices of

1.3 Significance of the Study

i. To know overall Human Resource Management Practices Banking Sector of Bangladesh.

ii. To acquire practical knowledge on Human Resource Management Practices.

iii. To know the functions of various departments of Human Resource Management.

1.4 Scope of the Study

iii. To be familiar with the recruitment and selection process.

iv. To acquire practical knowledge on Human Resource Management practice.

1.5 Methodology of the Study

1.5.1 Primary Data

i. Face to face conversation with the bank officers & staffs.

ii. Different manuals of Mutual Trust Bank Limited.

1.5.2 Internal Data

ii. Human Resource Management Practices of Private Commercial Bank in Bangladesh.

1.5.3 Secondary Data

1.5.4 Study Design

1.5.5 Data Analysis

1.6 Limitations of the Study

* Inexperience and time limitation were the constraints of the study.

* Don‟t give the data from their source document.

HUMAN RESOURCE MANAGEMENT

2.1 Overall Banking Sector in Bangladesh

2.1.2 Historical Background

Now, banking sector in Bangladesh is primarily of two types:

List of Banks in Bangladesh:

There are 5 types of Banks in Bangladesh. These are:

B) State-Owned Commercial Banks

C) Private Commercial Banks

D) Foreign Commercial Banks

E) Specialized Development Banks

B) State-Owned Commercial Banks

1. Sonali Bank Limited

2. Rupali Bank Limited

3. Agrani Bank Limited

4. Janata Bank Limited

C) Private Commercial Banks

1. United commercial Bank Limited

2. Mutual Trust Bank Limited

3. BRAC Bank Limited

4. Eastern Bank Limited

5. Dutch Bangla Bank Limited

6. Dhaka Bank Limited

7. Islami Bank Bangladesh Limited

8. Uttara Bank Limited

9. Pubali Bank Limited

10. IFIC Bank Limited

11. National Bank Limited

12. The City Bank Limited

13. NCC Bank Limited

14. Prime Bank Limited

15. Southeast Bank Limited

16. Al-Arafah Islami Bank Limited

17. Social Islami Bank Limited

18. Standard Bank Limited