AMERICAN INTERNATIONAL UNIVERSITY BANGLADESH

Faculty of Business Administration

Assignment Cover Sheet
Students must complete all details except the faculty use part. Assignment Title: Compensation Package of TNT Express Bangladesh Assignment Number: 01 Due Date: 27.06.11 Semester: Summer 2011 Subject Code: Course Instructor:
1. 2. 3.

Subject Name: Human Resource Management

Section: A

Ahmed, Neaj

Degree Program: M.B.A

Declaration and Statement of Authorship:
I/we hold a copy of this assignment, which can be produced if the original is lost/ damaged. This assignment is my/our original work and no part of it has been copied from any other student’s work or from any other source except where due acknowledgement is made. No part of this assignment has been written for me/us by any other person except where such collaboration has been authorized by the lecturer/teacher concerned and is clearly acknowledged in the assignment. I/we have not previously submitted or currently submitting this work for any other course/unit. This work may be reproduced, communicated, compared and archived for the purpose of detecting plagiarism. I/we give permission for a copy of my/our marked work to be retained by the School for review and comparison, including review by external examiners. Plagiarism is the presentation of the work, idea or creation of another person as though it is your own. It is a form of cheating and is a very serious academic offence that may lead to expulsion from the University. Plagiarized material can be drawn from, and presented in, written, graphic and visual form, including electronic data, and oral presentations. Plagiarism occurs when the origin of the material used is not appropriately cited. Enabling plagiarism is the act of assisting or allowing another person to copy your work.

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I/we understand that
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Group Name (if applicable):
No. Student Name Student Number Student Signature Date 27.06.11

Adnan, Md. Fahim

10-93954-2

For faculty use only

Total Marks: _______ Marks Obtained: _______

Faculty comments___________________________________________________________________________ ___________________________________________________________________________________________ ___________________________________________________________________________________________

Compensation package of TNT Express .

Ziaul who showed immense interest and enthusiasm to help us analyze and bring out an outcome of this report. Ziaul permits us to write a report on “Marketing Plan” related to our course lecture.Acknowledgement During the completion of the course Marketing Management. Our course instructor Hoq. Md. Md. . every student in sec: A has to make several groups to submit a term paper related to the course outline. Without his help we could not do the project properly. Our sincere thanks go to our course instructor Hoq.

0 TNT Express-at a glance 2.0 Compensation Package and other benefits: 6. i 1 2 3 6 10 13 14 15 16 .0 Organization chart and number of employees 3.Table of content Chapter Executive Summary 1.0 Reference Page no.0 HRM functions practiced in TNT Express 4.0 Observation 8.0 Internal Alignment 5.0 Organizational Budget of Administration 7.0 Conclusion 9.

Besides. which is one of the most significant Key success factors. TNT Express can be termed as the runner up industry as the market is already saturated by DHL and FedEx.Executive Summary TNT Express is the leading provider of express delivery services based in the Netherlands. So if they add some value by providing extra services to customers it will definitely able to attract more customers. TNT’s market size and growth potential is increasing day by day. They are combined with World Food Program. it has one local competitor which is known as ABX. Aramex and Sky Net. TNT express is applying Low cost strategy. . TNT Express Bangladesh has 18% market share in the air express industry in Bangladesh. TNT Express is conducting a good number of marketing strategies. FedEx and other competitors are UPS. TNT Express has already abandoned traditional business methods and shift to e-business technologies and use of Internet in their business. Over the last decade especially the garments sector has been contributing to Bangladesh’s economic growth. parcels and freight. They provide on-demand time-definite and day-certain door to door delivery services for documents. Its main business consisted of carrying and delivering time sensitive documents and parcels worldwide to and from Bangladesh. TNT Express' IT systems are fully geared to support the company's business goals. So it follows a low cost strategy to increase its market share. a subsidiary of the TNT Worldwide Express is the third air express industry in Bangladesh. TNT increased garments exports by 10-15% annually. It has the skills and capabilities to provide attractive performance and features at a lower cost than rivals. We recommend TNT Express to follow Best Cost Provider Strategy which is basically is a combination of both the low cost and differentiation strategy. TNT Express has quality manpower to deliver personalized service to its clients and thereby to earn good profit and to earn its goodwill. TNT Express Bangladesh. DHL Bangladesh.

000 road vehicles organized by a worldwide network of nearly 857 company owned depots.0 TNT Express-at a glance TNT Express is the leading provider of business to business express delivery services based in the Netherlands.000 people and have a fleet of 42 jet freighter aircraft together with 19. parcels and freight. Established in 1946 TNT Express is now a global integrator and offers a range of unique international express delivery services between more than 200 countries. They provide on-demand time-definite and day-certain door to door delivery services for documents. Mission    Exceed customers' expectations in the transfer of their goods and documents around the world Deliver value to our customers by providing the most reliable and efficient solutions in distribution and logistics Lead the industry by instilling pride in our people. optimistic. Asia and Australia. always . Our extensive resources also include numerous state of the art sortation centers and all these efficient facilities enable TNT Express to provide the fastest and most reliable door to door transit times in the industry. creating value for our stakeholders and sharing responsibility for our world Vision    Their vision strongly reflects who we are: ambitious. They employ more than 40.1. Market leading national express delivery services is also provided in many of the major countries in Europe. result-oriented It communicates their confidence that they can always overcome obstacles and achieve our goals It is that special mark that allows them to stand out from the crowd Standards      Aim to satisfy customers every time Challenge and improve all we do Be passionate about our people Act as a team Be honest.

2. Manager Credit Control (05) Asst. manager Admin (05) Billing Executive (05) Finance Executive (05) Cashier (05) Credit Control Executive (10) POD(12) Drier (12) .0 Organization chart and number of employees: Country Manager (01) Sales Manager (01) Sales Territory Manager (50) Sales Coordinator (30) Finance and Admin Manager (01) IT and operation Manager (01) Operation Supervisor (15) HR Manager (01) Customer Care Manager (01) Indoor Sales Executive (30) HR Executive (10) Customer Care Executive (30) Asst.

Individual equity ensures equal pay for equal work. However. The HR activities regarding compensation management are as follows:- Compensation Planning: To know about the compensation planning first of all we need to know why compensation planning is so important for the organization. External equity ensures that jobs are fairly compensated in comparison to similar jobs in the labor market. Activities also include managing your approach to employee benefits and compensation. which all employees have. they should always ensure that employees have and are aware of personnel policies which conform to current regulations. dealing with performance issues. and ensuring your personnel and management practices conform to various regulations. Later on they realized the importance of HR department and in 2007 they appointed a HR manager. . Previously they did not have any HR department and the HR activities were performed by Country Manager himself. These policies are often in the form of employee manuals. Reduce turnover and encourage company loyalty The HR manager does compensation planning through different steps    Internal equity ensures that more difficult jobs are paid more. The reasons are as follows     Recruit and retain qualified employees Increase or maintain morale / satisfaction Reward and encourage peak performance Achieve internal and external equity. Usually small businesses have to carry out these activities themselves because whether to use independent contractors or hire employees to fill these needs. each individual's pay is fair in comparison to that of another person doing the same or a similar job. recruiting and training the best employees. The activities involved and personnel policies.3. that is. ensuring they are high performers. TNT Express. employee records they can't yet afford part or full-time help.0 HRM functions practiced in TNT Express The Human Resources Management (HRM) function includes a variety of activities. one of the leading courier service providers in Bangladesh has successfully operated for last several years.

Rest of the Employees is getting salary in terms of TAKA. increase salary. They are competitors are DHL. a HR must motivate employee. TNT express arranges lots of training programs for their employees. employees may quit the job. Conflict may occur within or between the organizations. So in order to increase the employee’s contribution. . In case of managerial post their compensation package is little bit complex because some are paying higher whereas some are paying less. they arranges training. Employees needs training in order to develop their knowledge and skill. And Country Manager selects their salary based on the experience and other individual skill. First the HR departments do the training need analysis. Similarly they ensure fewer turnovers by balancing their pay structure with the competitors. first they judge it then take immediate action. Under the internal equity they ensure performance and motivation. Sometimes they send the employees overseas like UAE. if they find any need of training of a particular employees after conducting the training need analysis. Training: Training. UPS and Homebound. giving some authority to make decision etc. On the other hand if conflict occurs among the organizations we call it external conflict. FedEx. What should be their salary depended on Country Manager. another most important task of a HR. If they find any reasonable dissatisfaction they suggest the CM to increase salary. Though they are new but they perform their task successfully. And all these training part is organized by HR department. give vacation for free with family. If conflict occurs among the employees of a particular organization we call it internal conflict. Sometimes the HR departments do survey to know the satisfaction level of the employees in terms of compensation. Without motivation productivity cannon maximizes. To motivate employees they use several techniques such as creating honorary post that means changing the designation without changing salary structure. give non financial benefits. Resolving any type of conflict is the task of HR department. If they get any complain from any employees. If they do not balance their compensation package with the competitors. Netherlands and Singapore for developing their skill. These are the activities of HR department of TNT Express. Motivation: Another important task of the HR department is motivating employee. Resolving Conflicts: A conflict is very common in any organization.In this case TNT Express do compensation planning based on both the internal and external equity. Only Country Manager’s compensation management is done by the parent company Netherlands because he is getting his salary in dollar.

perceptions of internal pay equity. At the same time that companies are examining the method and basis for compensating employees. reinforce/enhance work design. there has been a growth in the number of companies seeking to develop high performance. retention of work force. Other organizational initiatives such as flatter organization structure and more fluid organization design have driven sweeping changes. pay delivery beliefs in forms(cash. Often it has been difficult for compensation systems to keep pace and support these changes. Thus issues ranging from labor market surveying to performance management to skill certification and peer review come under this umbrella.4. percentage of compensation costs to controllable product/service cost. salary levels and movement.Prevailing Market Practices and Trends It is concerned with the availability and quality of work force. percentage of compensation costs to total product/service costs. potential markets/products. salary delivery charges 4. the following factors are taken into consideration by TNT Express: 1. The necessity for organizations to control labor costs. high commitment work systems. The present competitive environment requires new strategies toward employee compensation. require that employees accept more responsibility and accountability.Business and Operating Inputs It includes operations strategy. while at the same time increasing productivity and enhancing quality and customer service has never been more urgent. Involving stakeholders in compensation administration can reinforce the values and beliefs underlying the compensation philosophy and strategy. risk tolerance and trust in management. employee compensation is a critical component to financial success. and new methods of educating employees to the shifting competitive environment that has brought about the necessity for these changes.Employees inputs and Preferences It includes perceptions of external pay equity. These systems. gain sharing. based upon expanded roles for employees. anticipated volume. These are:- . new management and employee practices. small group. Careful attention must be placed on the development of reward systems that reflect the financial capability of the company as well as reinforce the new directions associated with contemporary organizational strategy. As part of the aligning process. benefits) or method (individual. large group). maintain cultural change processes and other operating issues 3. Compensation administration includes a collection of activities required to sustain the effectiveness of a compensation strategy. retention of key contributors. Compensation Philosophy and Objectives It is concerned with basically two things. existing markets/products. industry practices. Additionally.0 Internal Alignment Internal alignment is an important policy in the strategic perspective of compensation. 2. sales development strategy.

For the high performance firm.  How much emphasis should be placed on rewards to drive organization.reward ratios. through its compensation philosophy. targeted position in product market. Base Pay Delivery It includes the method of delivery (Job-based vs. role of seniority Compensation decisions should be fully integrated into the organization’s business and operations strategy. The design of compensation systems should be subsequent to. portion of pay guaranteed and at risk. Fringe Benefits It is usually determined at corporate level. performance management & evaluation. and percentage of workforce bonus eligible 5. relationship to selection and retention. this key analysis and decision point. individual performance recognition 7. Hierarchy based 2. Level based . What issues are to be driven by compensation as opposed to management practices. structure of levels. attendance policy. Compensation Administration Stakeholder role in compensation administration. individual-based). risk . use of non-monetary rewards. cost. overtime policy (exempt & non-exempt). pricing strategies. they tie to business and human resource objectives. number of level. use of other monetary reward. weighting of individual performance 6. We all know that there are two ways of determining internal alignment in an organization which are:1. It also includes the targeted position in the market. and not precede. shift differentials. tolerance for pay at risk.Coverage . coverage. adjustment method. communications (Purpose . relationship within total company. limited scope at other levels. an appropriate level of employee involvement can further reinforce the organization’s general beliefs and values.Value) 8.Organization Performance or Variable Pay Role in total compensation strategy structure measures target.

Here in TNT express there is problem in Level based internal alignment in managerial post.000 Tk.000 Tk.15. . the difference between the managers and sales territory manager is also large.000 Tk. we want to increase the salary of the managers.000 Tk. Here we find that sales and finance manager are getting higher that other managers like HR.500 Tk.000 Tk. experience and special skill.000 Tk. The gap between the country manager and the manager might be reduced by increasing the salary of the managers or by decreasing the salary of the country manager.000 Tk.000 Tk.20.000 In the above list.11.12.000 Tk.000 Tk. And when they hire new employees they pay less. But we found one thing that when they hire employee from competitor organization they pay high. we can see that the difference in pay level between the country manager and the other managers are too large.6.2.11.15.20.000 Tk.41.15. Customer care and IT.45. When we asked for reason they told us that it’s because of job description. this indicate that how the alignment is imbalanced in these post. 1 2 3 4 5 6 7 8 9 10 11 12 13 Position Country Manager Manager Sales Territory Manager Sales Coordinator Indoor Sales Executives Assistant Manager Credit Control Assistant Manager Administration Billing Executive Cashier Finance Executive Operation Supervisor POD Driver Pay level Tk. Again.Hierarchy Based: Serial No. Here if we see their compensation package we will find that 45000 + (depend on the CM).15. But in this case as the country manager is a foreigner. Though the managers are in same level but they are paying differently. So there is an imbalance situation in level based internal alignment.6. Level Based: Under the level based internal alignment we consider equality of compensation package between the same level employees.

000. Phone Bill Tk3.000 Basic Salary Other benefits: Phone Bill TK 2000.000 Basic Salary Other benefits: Phone Bill TK 2000.0 Compensation Package and other benefits:  Country Manager: Tk.000 Basic Salary Other benefits: Phone Bill TK 2000.000 Basic salary + (additional amount that CM will know) Other benefits: Medical facilities. Car for pick up and Drop. 241. Car facility for 24 hours (personal Use) Bonus – 2 (100% of Basic)  Manager (4): Tk 45. Car pick and drop and sales visit. Medical Facilities (with family).000 Basic Salary Other benefits: Phone Bill TK 1500. Bonus – 2  Indoor Sales Executive (4): TK 11. Phone Bill Tk10.000. Bonus – 2 (100% of Basic)  Sales Territory Manager (6): TK 15. Bonus – 2  Assistant Manager Credit Control: TK 20. Car for pick up and Drop.500.5.500/ $3500 Basic Salary Other benefits: House rent Tk 30. Bonus – 2 .000 Basic Salary Other benefits: Phone Bill TK 1500. Car facility for Pick up and Drop. Car for Pick up and Drop. Bonus – 2  Sales Coordinator: TK 11. Bonus – 2  Assistant Manager Administration: TK 20. Car for Pick up and Drop.

Bonus – 2  Operation Supervisor: TK 12.000 Basic Salary Other benefits: Phone Bill TK 1500.000 Basic Salary. overtime Bonus – 2  Driver: TK 6. Billing Executive: TK 15. Car for Pick up and Drop. Car for Pick up and Drop.000 Basic Salary Other benefits: Phone Bill TK 1500.000 Basic Salary Other benefits: Phone Bill TK 1500.2  Cashier: TK 15.000 Basic Salary Other benefits: Phone Bill TK 1500.2  Finance Executive: TK 15. Bonus .000 Basic Salary Other benefits: Phone Bill TK 500. overtime Other benefits: Lunch Bonus – 2 . Lunch. Bonus – 2  POD (Pick up and Delevery): TK 6. Car for Pick up and Drop Bonus .

TNT is doing such kind of business in which it has to make sure that the customers are satisfied with its service. They practices HRM in a small scale. The company has an estimated Budget of 40% of the Net Operating Expense for Compensation Package. it is certain that TNT has to provide good compensation package to its employees to run its operation successfully.0 Organizational Budget of Administration: Since TNT is a service providing organizaion. service organizations provide huge amount of salary benefits for the employees to run the show properly because Human Resource is the biggest asset for the service organizations.6. Previousely there was no HR department and the country manager himself lookafter all HR activities. Generally. it is very important to have very effective and efficient workforce.       Recruiting Selection Training Motivating Conflict resolving Compensation planning . We know many HR functions but TNT Express Bangladesh practices very few of them. Hence. The department is lead by the HR manager and he has 10 HR executives. In doing so. 7. Therefore. We found that the department is small compare to other departments and have very less work to do. The company is giving a handsome amount to its employess in order to motivate them to work more effectively so that the customers can have maximum satisfaction.0 Observation HR department is comperaively new in TNT Express Bangladesh. But later in 2007 they create HR department because the company was growing and they needed separate HR department. The employees of the company have to work very hard and the effort of the employees is the biggest concern for them.

M. Thus. Jahangir Alam Sales Manager TNT Express Bangladesh .A.com  Direct Interview. the company requires to provide maximum effort to its compensation package and other benefits.tnt.8. TNT Bangladesh is one of the branch of the mother company.which is concentrating on customer satisfaction.0 Conclusion: TNT Express is a service providing organization that has expanded worlwide. 9.0 Reference  http://www.K.

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