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TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................... 5 1. INTRODUCTION .................................................................................................................... 6 1.1 INTRODUCTION .................................................................................................................. 6 1.2 SCOPE OF THE STUDY....................................................................................................... 6 1.

3 METHODOLOGY ................................................................................................................. 7 1.4 LIMITATIONS ....................................................................................................................... 7 1.5 AN OUTLINE OF THE BANKING SECTOR IN BANGLADESH ................................. 8 1.5.1 BANGLADESH BANK ....................................................................................................... 8 1.5.2 SPECIALIZED BANKS...................................................................................................... 8 1.5.3 NATIONALIZED BANKS ................................................................................................. 9 1.5.4 PRIVATE COMMERCIAL BANKS................................................................................. 9 1.5.5 FOREIGN COMMERCIAL BANKS .............................................................................. 10 2. UNITED COMMERCIAL BANK LTD. .............................................................................. 10 2.1 BACKGROUND OF UNITED COMMERCIAL BANK LTD (UCBL) ......................... 10 2.2 MISSION STATEMENT ..................................................................................................... 11 2.3 TOTAL COMPENSATION AND BENEFITS PACKAGE OF UCBL .......................... 11 2.3.1 OBJECTIVES .................................................................................................................... 11 2.3.2 SALARY STRUCTURE ................................................................................................... 11 2.3.3 REVISION OF PAY ELEMENTS................................................................................... 11 2.3.4 EMPLOYEE COMPENSATION RECORDS ................................................................ 11 2.4 BASIC EMPLOYEE BENEFITS FOR PERMANENT EMPLOYEES ......................... 13 2.4.1 PROVIDENT FUND ......................................................................................................... 13 2.4.2 BONUSES ........................................................................................................................... 13 2.4.3 ACCOMMODATION ....................................................................................................... 13 2.5 UTILITIES ALLOWANCES .............................................................................................. 13 2.6 MOBILE TELEPHONE ...................................................................................................... 13 2.7 MEDICAL BENEFITS ........................................................................................................ 14 2.8 CAR PURCHASE SCHEME .............................................................................................. 14 2.9 LEAVE ENTITLEMENTS .................................................................................................. 14

2.9.1 BASIC LEAVE TYPES..................................................................................................... 14 2.9.2 DEFINITIONS OF BASIC LEAVE ENTITLEMENTS ............................................... 15 2.9.2.1 CASUAL LEAVE ........................................................................................................... 15 2.9.2.2 SICK LEAVE .................................................................................................................. 15 2.9.2.3 EARNED LEAVE ........................................................................................................... 15 2.9.2.4 MATERNITY LEAVE ................................................................................................... 15 2.9.2.5 STUDY LEAVE .............................................................................................................. 16 2.9.2.6 HAJJ LEAVE .................................................................................................................. 17 2.9.2.7 SPECIAL LEAVE .......................................................................................................... 17 3. HSBC BANK BANGLADESH .............................................................................................. 17 3.1 BACKGROUND OF HSBC BANK BANGLADESH ....................................................... 17 3.2 REWARDS AND BENEFITS.............................................................................................. 19 3.2.1 REWARDS ......................................................................................................................... 19 3.2.1.1 INTRINSIC REWARDS ................................................................................................ 19 3.2.1.2 EXTRINSIC REWARDS ............................................................................................. 19 3.2.1.2.1 FINANCIAL ................................................................................................................. 19 3.2.1.2.1.1 PERFORMANCE BASED....................................................................................... 19 3.2.1.2.1.2 SALARIES ................................................................................................................ 19 3.2.1.2.1.3 PERFORMANCE BONUS ...................................................................................... 20 3.2.1.2.1.4 INCENTIVE SCHEMES ......................................................................................... 20 3.2.1.2.1.5 IMPLIED MEMBERSHIP BASED ........................................................................ 20 3.2.1.2.2 NON FINANCIAL ....................................................................................................... 20 3.2.2 EMPLOYEE BENEFITS .................................................................................................. 21 3.2.2.1 RETIREMENT BENEFITS .......................................................................................... 21 3.2.2.2 VOLUNTARY BENEFITS ............................................................................................ 21 3.2.2.3 LIFE AND ACCIDENT INSURANCE ........................................................................ 21 3.2.2.4 MEDICAL BENEFITS .................................................................................................. 21 3.2.2.5 PAID TIME OFF ............................................................................................................ 21 3.2.2.6 SURVIVOR BENEFITS ................................................................................................ 22 3.2.2.7 LEAVE ............................................................................................................................. 23

3.2.2.8 PROMOTION ................................................................................................................. 23 3.2.2.9 RESIGNATION .............................................................................................................. 23 3.3 COMPENSATION ............................................................................................................... 23 3.3.1 SALARY ............................................................................................................................. 24 3.3.2 SALARY PAYMENTS...................................................................................................... 24 3.3.3 ALLOWANCES................................................................................................................. 24 3.3.4 BONUS ................................................................................................................................ 24 3.3.5 SALARY ADMINISTRATION POLICY ....................................................................... 24 6. CONCLUSION ....................................................................................................................... 24 REFERENCES............................................................................................................................ 26

12 December 2011

Neaz Ahmed Professor Institute of Business Administration University of Dhaka Dhaka 1000

Subject: Submission of the report titled A Comparative study of Rewards, Pay Plans and Employee Benefits between United Commercial Bank Limited and HSBC Bank Bangladesh.

Sir We feel immense pleasure in presenting you the term paper on A Comparative study of Rewards, Pay Plans and Employee Benefits between United Commercial Bank Limited and HSBC Bank Bangladesh as a requirement of the course titled Managing People at Work (H501). We found this report to be truly challenging in many aspects and indeed very interesting in relation to the various interpretational and engrossing exercises. Writing this report itself was truly a comprehensive learning experience for us. We tried our level best to make applicable and feasible research so that it will be as effective as it was expected to be. We consider providing any information or clarification if necessary. We hope you will accept our report and kindly oblige.

Sincerely yours Muhmood Zubair Choudhury, Roll no. 60 Sushanta Paul, Roll no. 82 Ragib Hasan, Roll no. 94 Iftekhar Ahmed, Roll no. 107

Executive Summary
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. HRM is the function within an organization that focuses on recruitment, management and providing direction for the people who work in the organization. HRM is the organizational function that deals with issues such as compensation, hiring, performance management, organization development, benefits, employee motivation, communication, administration, and training. We are assigned to prepare a report on some HRM issues namely, Rewards, Pay Plans and Employee Benefits of two banks. We have selected United Commercial Bank Limited and HSBC Bank Bangladesh for this purpose. United Commercial Bank Limited commenced its commercial operation placing equal emphasis on all the four key functions of the process of HRM - acquisition, development, motivation and retention. Like other commercial they provide training to their employees and offer attractive salaries, leave and benefits. HSBC Bank Bangladesh is the bank where all the employees are monitored under an effective HR department. Internal and external all the situations and considerations related to human are monitored and operated by the HR department. They provide their employees with a wide range of trainings to develop their skills. It offers their employees very attractive salaries, leave and benefits which makes this bank the main attraction of many job seeking people.

1. Introduction 1.1 Introduction


During the late nineties the banking sector of Bangladesh saw a sudden shift of expansion as the government approved operation of a good number of new Private and Foreign Commercial Banks. This expansion irresistibly brought in greater benefits to the consumers because of the highly competitive market condition. The period has seen emergence of some dynamic and hightech banking services of which our consumers were deprived of. It brought greater challenge in parts of the employees or bankers who were designated with high profile jobs with tougher goals to meet, a dynamic career with attractive remuneration, greater benefits and stunning status. This report will take an attempt to study the career in private commercial banks of our country through the evaluation of the Practice of Compensation System along with Rewards and Benefits as practiced in this sector. Compensation is really a very important matter for any business organization. For any sort of business organization, the employees who make up the workforce are very important. It is also very important to make an attractive compensation package for these employees. The compensation package must be very attractive to increase the image of the organization as well as to retain the employees with the organization. In contrast to theories, many business firms of Bangladesh have the least or even no exposure to one of the crucial areas of business - Human Resource Management. But since every organization is made up of people, compensating them, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. We will find out how management in the selected organizations is dealing with rewards, compensation and benefits system.

1.2 Scope of the study


Although we hear people saying that they do not care for money but they do care for the feeling of belongingness to their organization it goes without saying that money is a major motivator. It is through compensation, rewards and benefits by which a relatively effective and satisfied working force is sustained. The maintenance of employee co-operation is largely dependent upon the answers of following questions: i. ii. iii. Whether the companys compensation rates are better than those of the segment market? What indirect plans of compensation are commonly used in the organization? What specific plans are available from which to choose?

iv. v.

What benefits, incentives and rewards are provided? Whether these policies are transparent to the employees and practiced without any distortion?

We have basically judged the organizations on the basis of the above criteria. In this report, we have covered the different aspects of human resource maintenance functions. Since the reward system of an organization is the primary maintenance tool in human resource management area, we have specifically focused our discussion on this area. Definitely there is a difference between the maintenance functions of Foreign and Local commercial banks. We will try to find out if there is any such difference and if any, what are these differences. The reward system includes both intrinsic and extrinsic rewards. But intrinsic rewards are completely qualitative and very hard to measure. It requires a lot of research work. So we have excluded intrinsic rewards from our discussion. Our discussion will be about the extrinsic rewards both monetary and non-monetary. We will discuss about the base salary, incentives and benefits under the monetary rewards. We will also try to find out what non-monetary rewards are given in the selected organizations. The report will thus gather information, classify them and eventually lead to the comparison between the two strongest banking sectors of Bangladesh.

1.3 Methodology
In order to supplement our theoretical knowledge in Human Resource Management with practical exposure, we contacted different organizations and collected data regarding real life scenario. The content of this report is thought to be quite confidential with the organizations. So, we had to spend a long time to convince the human resource managers of our selected organizations to help us. We had to convince them about the fact that this report is totally for internal purpose to supplement our theoretical knowledge. However, the method of collecting information was basically an interview type. Since the data regarding salaries are considered confidential we did not have access to any written material. We arranged appointments with the human resource personnel and employees in our selected organizations and interviewed them. We asked them about their compensation system, salary ranges and the basis of allocating incentive. Thus we gathered our required information. To find out the rewards, compensation system and benefits of an organization we have selected two companies (BANK) one is HSBC Bank Bangladesh and another one is United Commercial Bank.

1.4 Limitations
Since maintenance function entails a vast area it was beyond our scope to describe and investigate each and every topic though we tried to cover all the important aspects to make our

report a comprehensive one. The management of our selected organizations was somewhat reluctant to reveal all the information about their policies. They did not particularly provide the amount of salaries or the policies to give incentives.

The hierarchies of the selected banks are so different that it is very difficult to find out the same level positions and compare their salary ranges. Moreover, there are some qualitative aspects such as job security, work environment, peer relationships, relationship with the supervisors, reputation of the company, which play important role in maintaining the productivity of employees. These pictures are not painted in this report as it relates to the utilization phase of personnel management and therefore beyond scope of this report.

1.5 An outline of the banking sector in Bangladesh


The Banking Industry in Bangladesh is a complex and competitive one. A brief description of each of the groups is noted here:

1.5.1 Bangladesh Bank


Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system consists of four nationalized commercial Banks, around forty private commercial banks, nine foreign multinational banks and some specialized banks. The ministry of Finance in association with Bangladesh bank regulates the banking sector through monetary and fiscal policies whereas banks are operating under guidelines set by Bangladesh Bank.

1.5.2 Specialized Banks


These banks basically are specialized micro-finance institution, which revolutionized the concept of micro-credit and contributed greatly towards poverty reduction and the empowerment of women in Bangladesh. The Specialized banks are: i. ii. iii. Grameen Bank Bangladesh Krishi Bank Bangladesh Shilpa Bank

iv. v. vi. vii. viii.

Rajshahi Krishi Unnayan Bank Bangladesh Shilpa Rin Sangstha Basic Bank Ltd (Bank of Small Industries and Commerce) Bangladesh Somobay Bank Limited (Cooperative Bank) The Dhaka Mercantile Co-operative Bank Limited (DMCBL)

1.5.3 Nationalized Banks


The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks, which together controlled more than 50%-55% of deposits. The nationalized commercial banks are: i. ii. iii. iv. Sonali Bank Janata Bank Agrani Bank Rupali Bank

1.5.4 Private Commercial Banks


Private Banks are the highest growth sector due to the dismal performances of government banks (above). They tend to offer better service and products. i. ii. iii. iv. v. vi. vii. viii. AB Bank Limited BRAC Bank Limited Dutch Bangla Bank Limited Dhaka Bank Limited Islami Bank Bangladesh Ltd IFIC Bank Limited United Commercial Bank Limited NCC Bank Limited

ix. x. xi. xii.

Prime Bank Limited Exim Bank Limited Bank Asia Limited Trust Bank Limited and many more

1.5.5 Foreign Commercial Banks


i. ii. iii. iv. v. vi. Citigroup HSBC Standard Chartered Bank Commercial Bank of Ceylon State Bank of India National Bank of Pakistan and many more

2. United Commercial Bank Ltd. 2.1 Background of United Commercial Bank Ltd (UCBL)
Sponsored by some dynamic and reputed entrepreneurs and eminent industrialists of the country and also participated by the Government, UCB started its operation in mid 1983 and has since been able to establish one of the largest networks of 102 branches among the first generation banks in the private sector. With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking through personalized service, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry thorough a creative credit policy. The Bank has in its Management a combination of highly skilled and eminent bankers of the country of varied experience and expertise successfully led by Mr. M. Shahjahan Bhuiyan, a

dynamic banker, as its Managing Director and well educated young, energetic and dedicated officers working with missionary zeal for the growth and progress of the institution.

2.2 Mission Statement


To be the bank of 1st choice through maximizing value for our clients, shareholder and employees and contribution to the society.

2.3 Total Compensation and Benefits Package of UCBL 2.3.1 Objectives


This chapter outlines the rules relating to compensation structure and the benefit package of the Bank and gives detailed procedures for exercising them in order to promote fair treatment and consistency within the organization.

2.3.2 Salary Structure


Refer to the Salary & Remuneration Package Structure for Supervisors and Executive Staff of UCBL for details regarding the structure of salary and allowances for different units under UCBL

2.3.3 Revision of Pay Elements


The compensation structure may be revised, if necessary, with the approval of the Director, Admin/HR, and Head of the Dept., Finance and the Chief Executive.

2.3.4 Employee Compensation Records


Employee Pay Records are maintained by the Personnel & Admin Department for Workers and Supervisors and by the Human Resource Department for the Executives. These departments maintain personal file of all employees where all records in regards to the employee are kept in

addition to any soft copy (in computer database) maintained by the departments. These records are confidential and should not be accessible to any unauthorized persons (authorization defined by HR or Personnel &Admin dept. head).

2.4 Basic Employee Benefits for Permanent Employees 2.4.1 Provident Fund
The Company's Provident Fund is a funded scheme. All confirmed and permanent employees are entitled to be members of the Provident Fund. The employee contribution, equal to 10% of the basic salary, is deducted each month through the payroll. The Company's Provident Fund is a funded scheme. All long-established and enduring employees are at liberty to be members of the Provident Fund. In the Provident Fund Ledger, both the employee's and the Company's contributions are accredited to the individual employee's account.

2.4.2 Bonuses
All confirmed Permanent employees of United Commercial Bank Limited are entitled to one Annual Bonus each equivalent to Basic Salary.

2.4.3 Accommodation
The Bank on the basis of requirements and availability provides accommodation to UCBLs Top Executives at their own established facilities in Dhaka city. Outside the Dhaka city, the Bank provides expenses for the accommodation.

2.5 Utilities Allowances


Accounts Department will make compensation payment to the employee within 30 days from the date of submission. Telephone bill has to be forwarded to the HR department, and then they forwarded that bill to IT department, so payments can be made by the company, if it is in the name of the Bank.

2.6 Mobile Telephone


Based on the UCBLs business need, a mobile telephone provided to a permanent or contract employee. To receive this benefit, a written application should be forwarded to the Department Head, IT upon approvals of the employees Department Head and In charge of the site/factory if applicable. The mobile phone is to be used first and foremost for business purpose, though can

be utilized for being in contact with the family members, if necessary with logical discretion due to the high cost of mobile phone usage.

2.7 Medical Benefits


Medical Benefits for the Executive Staff The bank will compensate the cost of authorized medical treatments in Bangladesh including hospitalization, surgical and childbirth subject to the conditions mentioned here. The Bank reserves the right to approve the Medical Practitioner consulted. Dental treatment included as defensive measures, the Bank will reimburse for Upper and Lower dental cleaning twice a year. Reimbursement of the cost will be restricted to the treatment of the executive, spouse and children. Expenditure on medical treatment of Executives is reimbursed by the company. Every employees do not get the medical benefits.

2.8 Car Purchase Scheme


Board of directors is entitled to 24 hours company paid transportation. The company also pays for the fuel at cost, Drivers salary, and for all necessary maintenance/repair and administrative cost of the vehicle. Car purchase scheme has to be changed into(for the top management, middle management get allowance for driver and fuel cost but need to buy the car with own expense where loan facility is available from the bank/interest redemption) Loan Scheme All employees are eligible to any purpose loan provided they have served the organization for 2 years

2.9 Leave Entitlements 2.9.1 Basic Leave Types


All Permanent Executives of the Bank are entitled to various types of Leaves that are calculated based on calendar year and prorated from the date of joining the Bank's service for the first year. Leave entitlements of expatriate (Contract) employees shall be governed by their respective terms of employment with the company specified in the Appointment Let

2.9.2 Definitions of Basic Leave Entitlements 2.9.2.1 Casual Leave


Entitlement to casual leave for the Executive at Head-Office and Branch Site, it is 15 days based on each calendar year. The employee is entitled to exercise Casual Leave from the very next day of joining; though the Casual Leave is pro-rated for the balance period of the year counting from the joining date. Casual Leave can be taken with Weekends, Public Holidays, Earned Leaves, etc. but be limited to only 3 days.

2.9.2.2 Sick Leave


Entitlement to Sick Leave for the Executives at Head-Office and Branch Site it is 15 days on the basis of each calendar year. The employee is eligible to exercise the Sick Leave benefit from the date of his/her joining. The above entitlements represent the maximum number of days Sick. Leave that an employee can avail in a year. If an employee is sick on Weekend or on a Public Holiday, that day will not be counted as a sick day and the number of Sick Leave taken out of his/her allocated days will be excluding those days.

2.9.2.3 Earned Leave


Entitlement to Earned Leave for the Executives at Head-Office and Branch Site is 15 days on the basis of each completed year of service. The entitlement to Earned Leave is exclusive of Weekends and Public Holidays i.e., Weekends and Public Holidays falling during the annual leave taken will be considered additional to the entitlement. Though Earned Leave is counted from the date of joining but it cannot be taken until the employee passes the probationary period receiving confirmation.

2.9.2.4 Maternity Leave


The period of Maternity Leave shall be 84 actual days of absence which shall include the Public Holidays and Weekends (non-working days) and including the day of delivery.

2.9.2.5 Study Leave


Study leave is normally granted if the course of study which the employee intends to pursue is likely to benefit the Banks operations.

2.9.2.6 Hajj Leave


Special leave may be granted to the Permanent or Contract employees with or without pay and allowances at the sole discretion of the management.

2.9.2.7 Special Leave


Extraordinary leave may be decided to the enduring or Contract employees with or without pay and allowances at the sole discretion of the management. Application for special leave should be forwarded to HR/Personnel department, through the relevant departmental head, along with appropriate reasons and recommendations for necessary action. Some examples of such leave request may be for marriage, death in the family, etc.

3. HSBC Bank Bangladesh 3.1 Background of HSBC Bank Bangladesh


In Bangladesh, the HSBC Group's history dates back to 1996 when The Hong Kong and Shanghai Banking Corporation (HSBC) Ltd opened its first branch. Today, the HSBC Group offers a comprehensive range of financial services in Bangladesh including commercial banking, consumer banking, payments and cash management, trade services, treasury, and custody & clearing.

Personal Banking: With a network of 13 offices, 39 ATMs, 9 Customer Service Centres, an offshore banking unit, and offices in 7 EPZs, HSBC offers a full range of personal banking and related financial services including current and savings accounts, personal loans, time deposits, travellers cheques and inward and outward remittances.

Commercial banking: Commercial banking is a traditional strength of the HSBC Group. In Bangladesh, HSBC is a popular choice for customers because of the Group's international reach and a wide range of financial services and products. HSBC has an offshore banking unit (OBU) license and can therefore also provide foreign currency financing to qualifying customers. In addition, there are 7 business development centres in the country's major 7 EPZ areas including Dhaka, Chittagong, Adamjee, Mongla, Comilla, Karnaphuli and Ishwardi.

Corporate and institutional banking: Corporate and institutional banking provides dedicated relationship management services to HSBC's clients in major corporate and financial institutions. The Bank's focus is on fostering long-term relationship based on its international connections and extensive knowledge of Asia and Asian business.

HSBC net: HSBC net, a proprietary computer-based software package, provides customer with an instant link into the HSBC Group's international computer network, allowing them to perform transactions and obtain a diverse range of up-to-date information 24 hours a day, 365 days a year. Trade & Supply Chains: Trade finance and related services are a long-standing core business of HSBC based on the depth and spread of its corporate customer base, highly automated trade processing systems and extensive geographic reach.

Payments and cash management: HSBC is one of the leading providers of payments and related services to financial institutions, corporate and personal customers in Bangladesh. Underpinned by the Group's extensive network of offices and capabilities, payments and cash management assists companies in efficient cash management through the provision of payments, collections, liquidity and account services.

Custody and clearing: HSBC is a leader in custody and clearing in the Asia Pacific region and the Middle East. The network uses advanced securities clearing system, which was developed inhouse and provides round-the-clock online real-time access to clients' securities portfolios.

Investment banking and markets: This division brings together the advisory, financing, asset management, equity securities, private banking, trustee, private equity, and treasury and capital market activities of the HSBC Groups.

Treasury and capital markets: HSBC's treasury and capital markets business ranks among the largest in the world and serves the requirements of supranational, central banks, international and local corporations, institutional investors, and financial institutions as well as other market participants.

Amanah: HSBC Amanah is the global Islamic financial services division of the HSBC Group, responsible for the development of Islamic financial products for distribution to customers of the HSBC Group. It was established in 1998 and is now based in Dubai, UAE with regional offices in the UK, USA, Saudi Arabia, Malaysia, Indonesia, Bangladesh, Singapore and Brunei. HSBC Amanah Bangladesh offers investment opportunities through Mudarabah Term Investment (Islamic deposit); and vehicle, personal, and home financing solutions. HSBC Amanah offers you an ideal opportunity to enjoy Shari'a compliant products while benefiting from the global expertise and world class service standards of HSBC.

3.2 Rewards and benefits


HSBC continually evaluates and reviews its employee benefits to ensure that benefits are competitive and in line with its employees needs and to manage their diverse life.

3.2.1 Rewards 3.2.1.1 Intrinsic Rewards


Development opportunities and career support

3.2.1.2 Extrinsic Rewards 3.2.1.2.1 Financial 3.2.1.2.1.1 Performance based 3.2.1.2.1.2 Salaries
Market competitive remuneration package subject to annual review where individual performance is recognized.

3.2.1.2.1.3 Performance Bonus


Market competitive annual bonus based on results and individual performance.

3.2.1.2.1.4 Incentive Schemes


Market competitive incentive schemes in specific business areas.

3.2.1.2.1.5 Implied Membership based


i. Share save: Employees are entitled to buy HSBC shares at a 20 per cent discount on the market price. Achievement Shares: HSBC shares may be granted annually, depending on position and individual performance. Banking products with preferential pricing Nursery and summer camp allowances Employee Loans: Staff banking privileges, including special interest rates for car loans, sundry loans and home loans. The employee Loan policy has been established at preferential rates to provide financial assistance to qualified & deserving employees of the bank. The banks policy shall be reviewed periodically. Employees will be eligible for the banks subsidized Housing Loan scheme. Car loan & sundry loan Schemes upon satisfactorily completing the required number of years of service & achievement of performance standards. Separate policies are available for employee reference & guidance from HR/ADMIN department. Applications for loans should be sent to HRC through respective Head of departments. The CEO shall approve loan applications.

ii.

iii. iv. v.

3.2.1.2.2 Non Financial


i. ii. iii. Bank car, parking space and allowances, depending on designation. Eid children party, annual employee party etc. An active Sports and Social Club.

3.2.2 Employee benefits 3.2.2.1 Retirement benefits


i. ii. Private pension plan Provident Fund & Gratuity

The Staff Provident Fund Scheme is a voluntary contribution scheme. The employee will be entitled to join the scheme upon completion of the probation period. The employee will be entitled to benefit from the scheme after completion of five years service & payment will be made upon resignation, termination, and retirement. The employee will also be entitled to a gratuity payment equal to one months basic salary for each year of service after five years upon his/ her resignation, retirement.

3.2.2.2 Voluntary benefits


Private medical plan for employees and dependents

3.2.2.3 Life and accident insurance


The bank provides all permanent & contract employees with insurance via the Workmens compensation policy.

3.2.2.4 Medical benefits


Married employees will be entitled to a medical allowance for their respective grade for their spouse & children up to the age of 19. Single employees are entitled to half of the medical allowance for their respective rank. In both cases medical expenses incurred w2ill only be reimbursed when supported by approved medical vouchers. Health plan and routine medical allowance including optical and dental treatment.

3.2.2.5 Paid Time Off


Short and long-term disability coverage.

Paid leave for marriage, maternity, sickness and vacation.

3.2.2.6 Survivor Benefits


Life insurance The bank provides all permanent & contract employees with insurance via the Workmens compensation policy.

3.2.2.7 Leave
HSBC grants different kinds of leave for their employees. But all of the leave must be logical and necessary. HSBC grants only limited leave. The bank mainly offers earn Leave, disability leave, study leave, maternity leave and casual leave. If an employee enjoys excessive leave or without prior notice, he/she will have to show cause to the proper authority. He/she even may be punished by cutting salary.

3.2.2.8 Promotion
The criteria for promotion to a specified post usually merit-cum-seniority. A person will be eligible for promotion if he has the satisfactory records of service, meets the criteria for promotion, and has clear recommendation for promotion in his/her Annual Confidential Report(ACR). If there is anydepartmental proceeding in underway against him/her or any penalty other than censure or warning has been imposed on him/her within the last three years then the employee will not be promoted.

3.2.2.9 Resignation
In case of resignation, an employee has to inform to Human Resource Department. He/she should notice Human Resource Department before a proper time period. If he/she fail to inform before a proper time period then his/her salary would be cut. After an employee applying for resignation Human Resource Department will query all the branches that the employee has any transaction with any branch or not. If the branches reports are ok then the Head of HRD approve his/her resignation and send to the employees Branch Manager.

3.3 Compensation
The bank maintains fair and competitive compensation packages based on business needs and competitor practices. A compensation and benefit survey is conducted on a regular basis, which involves the bank obtaining salary information form other foreign banks in Bangladesh such as Standard Chartered, American Express. The compensation package includes a competitive salary, and progressive benefits, all designed to influence and reward personal achievement.

3.3.1 Salary
Salary is as stated in the appointed letter. However, any changes will be notified in writing. Upon satisfactory completion of the probation period a basic monthly salary increment of 10% will be awarded. Furthermore, employees salary will be reviewed on an annual basis in April according to his/her performance and may be adjusted at the discretion of Bank.

3.3.2 Salary Payments


Monthly salary will be credited into staff account, which he/she opens upon joining the Bank. Salaries are paid on 25th of each month in arrears, plus other allowances less deductions such as Income Tax, contribution to Provident Fund etc. Each employee will receive a monthly pay statement detailing gross pay and deductions.

3.3.3 Allowances
Various allowances are paid in the Bank such as Housing Rent, Conveyance, Leave, Tiffin, and Medical.

3.3.4 Bonus
The Bank awards bonuses in addition to basic salaries for occasions such as Eid/Christmas, as Festival bonuses.

3.3.5 Salary Administration Policy


In order to support the Banks wish to see employees rewarded based upon the work they do, it is necessary to establish the parameters of each job. The Bank does this through the use of job descriptions and job evaluation.

6. Conclusion
This report focuses on the rewards, compensation system and employee benefits practised by a native and a foreign bank in Bangladesh. There are some components that have been taken into consideration during determining these issues in our country, but it varies significantly among

banks. It could have been a better comparison if we worked with all banks in each category. This report works only with two banks different only in geographical operations and ownership. In our study we have tried to focus on the pay differences, possible reasons of using different pay components used, various kinds of rewards and benefits offered to the employees by the banks in our country.

References