HRM Practices in Bangladesh

Chapter Four : Employee

Motivation
Employee Motivation

 Performance Appraisal
 Rewards and Compensation
 Benefits
Performance Management system

 Purpose
 Performance Feedback
 Performance Development
 Documentation
The Appraisal Process

1 Establish Performance Standard

2 Mutually set measurable Goals

3 Measure Actual Performance

4 Compare Actual Performance with Standard

5 Discuss appraisal with the employees

6 If necessary, initiate corrective action

Appraisal Methods

Three approaches:
 Absolute standards

 Relative standards

 Objectives
Appraisal Methods

Evaluating absolute standards:

 An employee’s performance is measured
against established standards.
 Evaluation is independent of any other
employee.
Appraisal Methods

Evaluating absolute standards:

 Essay Appraisal: Appraiser writes narrative
describing employee performance &
suggestions.
 Critical Incident Appraisal: Based on key
behavior anecdotes illustrating effective or
ineffective job performance.
Appraisal Methods

Evaluating absolute standards:

 Checklist Appraisal: Appraiser checks off
behaviors that apply to the employee.
 Adjective Rating Scale Appraisal:
Appraiser rates employee on a number of
job-related factors.
 Forced-Choice Appraisal: Appraisers
choose from sets of statements which
appear to be equally favorable, the
statement which best describes the
employee.
Appraisal Methods

Relative standards:
 Employees are evaluated by
comparing their performance to the
performance of other employees.
 Appraisal Methods
Relative standards:
 Group Order Ranking: Employees are
placed in a classification reflecting their
relative performance, such as “top one-
fifth.”
 Individual Ranking: Employees are
ranked from highest to lowest.
 Paired Comparison:

 Each individual is compared to

every other.
 Final ranking is based on number
of times the individual is preferred
member in a pair.
Appraisal Methods

Relative standards:
 Individual Ranking: Employees
are ranked from highest to
lowest.
 Paired Comparison:
 Each individual is compared to
every other.
 Final ranking is based on number of
times the individual is preferred
member in a pair.
Appraisal Methods

Using Achieved Outcomes to Evaluate

Employees
Management by Objectives (MBO)
 includes mutual objective setting and

evaluation based on the attainment of the

specific objectives
Appraisal Methods
Using Achieved Outcomes to Evaluate
Employees
 Common elements in an MBO program are:
 goal specificity
 participative decision making
 an explicit time period
 performance feedback
 Effectively increases employee performance
and organizational productivity.
Factors that can Distort Appraisals
Effective Performance
management System

 Behavior based measures

 Combine Absolute and
relative standards
 Provide ongoing feedback
 Have multiple raters
 Peer evaluation
 360 degree appraisal
 Rate selectively
 Train appraisers
 Rewards and Compensation
 People do what they do to satisfy some need and
they look for a payoff or reward.
 The most obvious reward is pay, but there are many
others, including:
 promotions

 desirable work assignments

 peer recognition

 work freedom
 Rewards
Rewards

•pride in •Money
one’s Intrinsic Extrinsic •Promot
work ions
•feeling
Preferre
s of
Financial Non-financial d
accompl
assignm
ishment
ent
Own
Membership based Performance based secretar
y
•wages
•bonuses •commissions
•pension plans •piecework pay
plans
 Job Evaluation and the Pay Structure
Job Evaluation
Use of job analysis information to determine the relative value of each
job in relation to all jobs within the organization.
 The ranking of jobs is done using following typical criteria:

 mental requirements

 supervisory control

 complexity

 physical demands

 Also considers :

 Labor market conditions

?
 Collective bargaining

 Individual skill differences

Job Evaluation Methods

1. Ordering method
2. Classification method
3. Point method
 Pay Structure : Membership based
compensation

Establishing the Pay Structure

 Wage curves
 Drawn by plotting job evaluation data (such as job
points or grades) against pay rates (actual or from
survey data).
 Wage structure
 Designates pay ranges for groups of jobs which are
similar in value to the organization and
grouped by their classifications, grades or
points.
 Results in a logical hierarchy of wages, consisting of
ranges that overlap.
Pay Structure
 Performance based Compensation
 Individual Incentives include
 merit pay plans (annual increase, based on

performance)
 piecework plans (pay based on number of

units produced typically in a specified time

period.)
 Group Incentives
 Incentives can be offered to groups, rather

than individuals, when employees' tasks are

interdependent and require cooperation.
 Profit sharing

 Gain sharing
 Performance based Compensation
 Competency-based compensation
 Rewarded for skills, knowledge and
behaviors
 leadership

 problem solving

 decision making

 strategic planning
 Performance based Compensation
Team-Based Compensation
 Incentives for empowered work teams to
exceed established goals and share equally
in rewards.
 Depends on:

 clarity of team purpose and goals

 ability of the team to obtain needed resources

 effective team communication skills and trust

Executive Compensation Programs

Salaries of Top Managers

 Executive salaries, bonuses and stock
options may seem high.
 Competition for executive talent raises

the price of hiring an executive.

 High salaries can be a motivator for

executives and lower-level managers

 Executive Compensation Programs

Supplemental Financial Compensation

 Deferred bonuses – paid to executives over
extended time periods, to encourage them to
stay with the company.
 Stock options – allow executives to purchase

stock in the future at a fixed price.

 Hiring bonuses – compensate for the

deferred compensation lost when leaving a

former company.
 Employee benefits

 Have grown in importance and variety

 Typically membership-based rewards offered
to attract and keep employees
 Do not directly affect a worker’s
performance, but inadequate benefits lead to
employee dissatisfaction.
 Legally Required Benefits

The Bangladesh Labor Act 2006 -

Workers’ Compensation
 Paid by the employer
 Paid for injuries and diseases

caused at workplace which result

in partial or total loss of earning
capacity
 Legally Required Benefits

 Compensation rate : Permanent partial or total

disablement or death
 Max. BDT 1,00,000 – 1,25,000 for adults
 Max. BDT 10,000 for minor
 Payment is based on assessment of partial or total
disability as specified in law max. 100% -min. 2%
 Monthly wage can be paid to temporary disabled
worker for max. 1 year or disability period whichever
is shorter.
Legally Required Benefits

Paid leaves
 Casual leave - 10 days

 Medical leave – 14 days

 Earned / annual leave - max. 27 ,

min. 13 days; accumulating
 Festival holiday – 11 days
Voluntary Benefits

 Health insurance
 Group insurance
 Disability insurance
 Retirement Benefits

Provident fund
 Fund accumulated throughout work-life
 Both worker and employer make equal
contribution
 Contribution should be 7-8% of basic wage

Gratuity
 30 days’ wage for every completed year at
workplace
 Retirement Benefits

Pension Plan
 Government employees get
pension till death after
retirement
 Dependents of employees get
pension till death if the
employee dies before
retirement
Paid Time Off

Vacation and Holiday Leave

 Vacation time is usually related to
the length of time on the job.
 Some companies also allow
personal days that can be used for
any reason.
 Leave for preparation of retirement
(LPR)