Financial Performance Analysis on Dhaka Bank

The main objective of this report is to analysis overall about Financial Performance Analysis of Dhaka Bank Limited. This report discuss on succession management Dhaka Bank. It is also aimed at identifying the present problems faced by the employees due to process and management philosophy. Attempts were made to find out the factors which need to be changed and improvised so that employee can better match with the system as it is needed to achieve the desired HR goal.

Objective of the Study

There had been some objectives set forward in doing this report so that it can be determined what tasks have to done. The objectives of the report are:

  • Trying to find out the constrain possess by the environment at the time of implementing the theoretical knowledge.
  • Analyze the current succession management process and try to find out the scope for its improvement.
  • Propose changes mainly in the evaluation format, management philosophy and process by keeping relevance with other HR processes and other constrains.

 

Sources of Information

All the information incorporated in this report has been collected from two sources. They are as follows:

Primary Sources:

  1. Interview with the Branch manager, Operations manager, FAVP & Credit In charge and some other employees of Foreign Exchange Branch.
  2. Discussion sessions with HR officials in the Head Office.

Secondary Sources:

  1. Dhaka Bank Limited Annual Reports 2008.
  2. Job description for each position of Dhaka Bank Ltd, Foreign Exchange Branch.
  3. Performance appraisal format.
  4. Performance appraisal guideline provided by the Human Resources Department.

 

Sources of Information

All the information incorporated in this report has been collected from two sources. They are as follows:

Primary Sources:

  1. Interview with the Branch manager, Operations manager, FAVP & Credit In charge and some other employees of Foreign Exchange Branch.
  2. Discussion sessions with HR officials in the Head Office.

Secondary Sources:

  1. Dhaka Bank Limited Annual Reports 2008.
  2. Job description for each position of Dhaka Bank Ltd, Foreign Exchange Branch.
  3. Performance appraisal format.
  4. Performance appraisal guideline provided by the Human Resources Department.

 

Historical Perspective

Dhaka Bank Limited is the leading Private Sector Bank in Bangladesh offering full range of Personal, Corporate, International Trade, Foreign Exchange, Lease Finance and Capital Market Services. Dhaka Bank Limited is the preferred choice in Banking for Friendly and Personalized Services, cutting edge Technology, tailored solutions for Business needs, Global reach in Trade and Commerce and high yield on Investments, assuring Excellence in Banking Services.

Dhaka Bank Limited (DBL) is a Scheduled Bank that was incorporated as a public limited company on April 06, 1995 under the Companies Act, 1994. The Bank started its commercial operation as a Private Sector Bank on July 05, 1995 with a target to play the vital role on the socio-economic development of the country. Aiming at offering Commercial Banking Service to the Customers’ door around the country, the Dhaka Bank Limited (DBL) established 45 branches up-to last year. This organization achieved Customers’ confidence immediately after its establishment.

Within this short time the bank has been successful in positioning itself as progressive and dynamic financial institution in the country. This is now widely acclaimed by the business community, from small entrepreneur to big merchant and conglomerates, including top rated corporate and foreign investors, for modern and innovative ideas and financial solution.

The Authorized Capital of the Dhaka Bank Limited (DBL) was Tk.1000 Million and Paid up Capital of Tk.100 million. The Bank raised its authorized capital at 6000 million and Paid up Capital raised at Tk.1934 Million as on 31 December 2008. The Total Equity with shareholder’s equity (Capital and Reserves) of the Bank as on 31 December, 2008 stood at Tk.4000 Million. The Capital Adequacy Ratio is 20% as on December 31, 2007, which exceed the Stipulated Requirements for the Bangladesh Bank.

 

Mission & Vision

The Mission of the Dhaka Bank Limited (DBL) is “To be the Premier Financial Institution in the country providing High Quality Products and Services backed by Latest Technology and a Team of Highly Motivated Personnel to deliver Excellence in Banking”.

“The stars in the seven skies sparkle in brilliance and twinkle in blissful beauty. We wonder at them in profound admiration and speculation.

At Dhaka Bank the shareholders management and employees draw inspiration from the distant stars. The team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavor is to offer customers the razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on your investments.

Our people, products and processes are aligned to meet the demand of our discerning customer. Our goal is to achieve a distinction like the luminaries in the skies. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – “Excellence in Banking.”

The Vision of the Dhaka Bank Limited (DBL) is to be one of the top three Private Commercial Banks in Bangladesh by the year 2008.

 

Workforce

Dhaka Bank Limited (DBL) recognizes that a productive and motivated Work Force is a prerequisite to leadership with its Customers, its Shareholders and in the Market it serves. DBL treats every Employee with dignity and respect in a supportive environment of trust and openness where people of different backgrounds can reach their full potential.

The Bank’s Human Resources Policy emphasize on providing Job Satisfaction, Growth Opportunities, and due recognition for superior performance. A good working environment reflects and promotes a high level of loyalty and commitment from the employees. Realizing this Dhaka Bank Limited (DBL) has placed the utmost importance on continuous development of its Human Resources, identify the strength and weakness of the employee to assess the individual training needs, they are sent for training for self-development.

Total number of employees stood at 898 as on December 31, 2008.

 

Management System

Since its journey as Commercial Bank in 1995 Dhaka Bank Limited (DBL) has been laying great emphasis on the use of improved Technology. It has gone to Online Operation System since 2003. The new Banking Software FLEXCUBE is installed since 2004. As a result the Bank is able to give the services of international standards. Because of the use of new technology DBL is constantly providing better service for its customer. Now the management has decided to go for centralization of much of its activity to one step forward in customer service. In this regards DBL divide its total market in to 4 parts. All the processing and decision making activity of each part will be made in a single office. As a result of this the bank can easily monitor and coordinate the activity of the Branches and employee of the Branches will get more time to solve the problems of the customer.

Correspondent Relationship

The Bank established correspondent relationships with a number of Foreign Banks, namely American Express Bank, Bank of Tokyo, Standard Chartered Bank, Mashreq Bank, Hong Kong Shanghai Banking Corporation (HSBC), CITI Bank NA-New York and AB Bank Ltd. The Bank is maintaining Foreign Exchange Accounts in New York, Tokyo, Calcutta, and London. The Bank has set up Letter of Credit on behalf of its valued Customers using its Correspondents as advising and reimbursing Banks. The Bank maintains a need based Correspondent Relationship Policy, which is gradually expanding. The number of Foreign Correspondents is now 350.

 

Capital Market operation

Capital Market Operation besides investment in Treasury Bills, Prize Bonds and other Government Securities constitute the investment basket of Dhaka Bank Limited. Interest rate cut on bank deposits and government savings instruments has contributed to significant surge on the stock markets in the second half of 2004, which creates opportunities for the

bank in terms of capital market operations. The Bank is a member of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. Capital Market Division conducted a total trade of Tk. 37.15 billion against Tk.14.41 billion in 2008. Gross Operating profit from Capital Market Services Division is Tk. 349.00 million in 2008 against Tk. 170 million in 2007.

 

Departments of DBL

If the Jobs are not organized according to their interrelationship and are not allocated in a Particular Department it would be very difficult to control the system effectively. If the any Departments are not fitted for the Particular Works there would be Haphazard Situation and the Performance of a Particular Department would not be measured.

Dhaka Bank Limited (DBL) has does this work very successfully. The management has created various departments according to the need and has clarified the responsibility of each department. Every Department is responsible to full their target. Different departments of Dhaka Bank Limited (DBL) are as follows:

  • Human Resources Division
  • Personal Banking Division
  • Treasury Division
  • Operations Division
  • Computer and Information Technology Division
  • Credit Division
  • Finance & Accounts Division
  • Financial Institution Division
  • Audit & Risk Management Division

 

SWOT Analysis

Strengths of Dhaka Bank Limited (DBL)

  • Dhaka Bank Limited (DBL) is newly established Commercial Bank in the Banking Sector but it builds strong reputation in short time.
  • The Financial Condition of DBL is very strong. It’s Loan and Deposit Quality is better than most other Private Commercial Banks in Bangladesh.
  • DBL has strong network throughout the country and provide quality services to every level of Customers.
  • It has separate branch for foreign exchange transaction and it give the people more comfort in dealing international arena.
  • DBL’s Correspondents Relationship with more than 200 International and Local Banks created Global Accessibility and Relationship with People.
  • Installation and use of highly sophisticated, automated System (For example, FLEXCUBE) enables Dhaka Bank Limited (DBL) to have on time communication with all Branches reduces excessive paper-works waste of time for Valued Customer Transaction.
  • ATM Cards of DBL give the Customers 24-hours Banking Facilities from his/her Accounts.
  • Phone Banking of DBL gives the Customers, opportunity to make Enquiries and Service Request over the Telephone.
  • Cash Advance from Credit Cards of DBL attracts more Customers to interact with the Bank.
  • SME banking provided small loans to potential customers and helping in the process of changing the fate of small entrepreneurs as well as doing remarkable job in the development work of the country.
  • By providing high level of payment and other fringe benefit, DBL is able to attract the most potential work force who are capable to provide better services.

Weaknesses of Dhaka Bank Limited

  • One of the greatest weaknesses for Dhaka Bank Limited (DBL) is the Shortage of Manpower in every Division. During the Working Hours of the Bank, the Employees have to be fatigued and cannot provide proper attention to every type of Services, which create dissatisfaction of the Customers.
  • Higher Service Charge in some areas of Banking Operations than that of the Nationalized Commercial Banks discourage the Customers for opening and maintaining Accounts with DBL.
  • Growth in Assets of a Bank depends on hoe fast its Deposits grow. But in the Deposit side DBL is facing some problems from its Competitors. Because the Competitors are giving a Higher Interest Rate in Deposits without any reason, which could be deteriorated its Position than before. Because of this a lot of Depositors are leaving the Bank.
  • There is a very little practice for increasing Motivation in the Employees by the Management of Dhaka Bank Limited (DBL), which discourages them to provide the best Service to the Customers. This is another Weakness of the Bank.
  • The management provides profit bench mark for the branch manager without tell how to achieve that target. It often creates miss understanding among the employee and the manager.

Opportunities of Dhaka Bank Limited

  • The greatest Opportunity for Dhaka Bank Limited (DBL) lies in the increase of standard of living of a certain mass of the Population as well as their acceptance of the Nation of Consumer Financing and Short Term Lending.
  • The Credit Facility offered by Dhaka Bank Limited (DBL) attracted Security and Status conscious Businessmen and as well as Service holders with Higher Income Group.

Threats of Dhaka Bank Limited (DBL)

  • The emergence of several Private and Foreign Banks with in the post few years offering similar Service with less or free charge for the facilities can be a major Threat of Dhaka Bank Limited (DBL).
  • The Central Bank exercise strict control over all Banking Activities in Local Banks like Dhaka Bank Limited (DBL). Sometimes the restrictions impose barrier in the Normal Operations and Policies of the Bank.
  • Pressure from the government for reducing the interest rate on loan forcing the bank to reduce the interest rate in deposits. As a result the bank is facing difficulties in collecting deposits as the customers have better investment alternatives in hand.
  • Revival Banks easily copy the Product offering of Dhaka Bank Limited (DBL). Therefore the Bank is in continuous of Product Innovation to gain Temporary Advantage over its Competitors. This is another Treat of the Bank.
  • Sometime Political Loans are the Threat for the Banking Service.
  • International recession resulted in the slow down of the business activity. It directly affects the deposit and loan application. As a result the profit the bank is reducing.

 

Theoretical review

Succession management is the process of ensuring that, a pool of skilled employees is trained and available to the organization to meet the strategic objective of the organization.

It is very much important for the organization as organization has unlimited life and it required more and more competent people to meet the need of the fast moving world. Another thing is skilled people are not made in one day. The need to build up and it required time. For this reason, organizations have to practice good succession management based on the future need and groom up employees accordingly.

Succession management is a complex process as it deals with the complex human being. A well tested succession management process consists of five steps. Those steps are briefly discussed here for the better understanding.

Step 1: Align succession management plans with strategy: depending on the market or the types of business the required skill vary from organization to organization. Organizations need people to meet the objective of the organization. So the HR has to align all its strategy with its objective. So the managers has to determine what are the required skills of the manager, how many managers need to fight in the competitive global world, how many employees have those required skills. After determining these things the HR manager has to plan all the things accordingly like succession planning, performance evaluation etc.

Step 2: Identify the skills and competencies needed to meet strategic objectives: once the HR manager has decided the required succession management objectives than they have to go for the determination of the scale for the performance measurement. There are two types of performance measurement scale. They are as follows:

  1. Job-Based approach: this approach assume that, the employee who has the significant experience as manager and have acquire job skills such as motivation, delegating, marketing, or managing finance will be a successful manager.
  1. Competency-Based approach: it refers to the group of related behavior that is needed for successful performance. They are measurable performance that differentiates successful manager from the others. These competencies may be hard or soft. Hard competencies are the ability to build a new technology and the soft competencies is the ability to be in the top ten. Manager acquires these competencies through job rotation and with the sprit of learning new things.

Among the above two competency measurement scale, most of the manager and HR specialist prefer the second one. It is so because, the global business world is dramatically changing everyday and a successful manager have to know all the things related to the business of the organization.

Step- 3: Identify high-potential employee: At this stage the manager attempt to identify the key employee for who have the high potentiality and should be groom up in order to make them the future leader of the organization. Managers do this through evaluating their performance, measuring their dedication to the work and job rotation and various special task performances. Most of the times, it is done in for steps. All those are given bellow:

  • Temporary replacement: at the most primitive level, employee are send to various training program, evaluate their learning spread, hour of working, leave chart etc. the employees are also rotated to various task in order to teach them various task. By this way primary screen out of successful performers are identified.
  • Replacement chart: Some organizations prepare a replacement chart and update it along with the employees’ success history. This chart contains the rotation period with date, performance during the rotation period. It is usually done at the time of the performance appraisal. This chart shows who are ready now, who will be ready with in 2-3 years and who will take more time to be ready for promotion.
  • Strategic replacement: in some organization it is practice. In this approach high potential employees who have the extraordinary performance are screen out and made them prepared for the top positions. The management tests their decision making ability by giving them power and the situation. By this way management do the 360-degree evaluation.

All the above steps are discussed in the individual level and may not suit for all organization. HR manager practice things, that suit with their organization.

Step 4: provide development opportunities and experiences: Up to this step we have discussed about the process of identifying the key employees. But the next part of the succession management if the building up the leaders. As the organization does not find the prepared managers all the time, they have to build managers. Organizations build managers or key officials in various ways. It is long term process and it is costly too. For this reason, managers first provide much effort in finding the employee to whom to groom up. There are many processes to build up employees. Some of them are given bellow:

  • Promotions
  • Job Rotations
  • Special Assignment
  • Formal training and development
  • Mentoring and Coaching

Step- 5: Monitoring Succession management: As the result of succession management is not found instantly and it is a long term process, in many organizations it is not practiced properly. But it is very important and the organization will feel the result in the long run when they will get skilled managers ready when needed to meet the objective of the organization. In order to get the best result of succession management, organization should follow up the process strongly, regularly and gave the feed back to the employee so that they can understand the impact of the good performance. By this way the employee will be encouraged for the good performance and will remain motivated.

From the above discussion, we can divide succession management process in two parts for the better analysis in respect of the Dhaka Bank Limited. Those two steps are performance measurement part and employee development part. In the next two chapters, I will try to discuss the practice of those two parts in Dhaka Bank Limited.

 

 

 

Personal Policy of Dhaka Bank Limited

Staffing is assigning right person in the right place. In broad sense, it involves identifying work-force requirement, inventorying the people available, recruitment, selection, placement, training, promotion, motivation, appraisal, and compensation of needed people.

Appointment and promotion

Vacant positions are fulfilled with promoted people from within the organization, such as; almost all managers have been promoted from representative level. At mid-level management, very few executives are selected from outside. In this process, normal procedures are followed, such as; advertisement is given on newspaper, screening, training etc.

The law provides for the discretionary powers of the Management for any appointment or promotion to fill any vacancy in higher grade of post. Nevertheless, both the parties agree to set a convention by giving preference to the existing employees to fill in such vacancy in higher grade or post provided, he/she, as the case may be is fully qualified or other wise eligible. After selection, the candidate will be subject to screening and medical examination. When the candidate has successfully passed through the medical test an appointment letter will be issued to him/her and he/she will be made permanent on completion of probationary period and on the basis of performance review report submitted by the department in charge.

When an employee reaches the maximum of his/her grade, he/she shall be promoted to the next higher grade provided there is a vacancy in the next higher grade and the employee justifies his/her promotion. However, the employees who would cross the maximum of his/her grade but has no opportunity to be promoted will continue to get annual increment at the rate of last slab of his/her respective grade till a new agreement is signed.

The employee who will be on without pay during a particular year the management may stop or withheld his/her increment as per past procures. Increment shall not be withheld or stopped without any proper reason. It is to be communicated to the employee concerned without any delay.

  • Training

Dhaka Bank Limited has a separate training institute that is “Dhaka Bank Training Institute”. Every employees get training mainly throughout their jobs. At the beginning of the job the new recruiters is sent through a 3 day orientation program. Here the employee learns the basic rules of the bank and the working procedure. After that the employee is placed in the desired position. There the employee learn from the co workers. Besides those, officers and executives are sent to different training institute like BIBM and different employers’ associations for training and encourage participation in workshops or seminars. At the time of normal working the employees are sent for different training program usually 2-3 days long on the basis of requirement. Sometimes executives and officers are sent to overseas training for their respective field.

Appraisal

The Personnel Department will issue to each department prescribed Performance Review Forms in the month of July on each year, which will be returned duly filled in to the Personnel Department within the period notified from time to time. The annual increment will be considered in the recommendations of the immediate supervisor. Increment letters issued to the employee will be effective from 1st July.

Motivation

Besides the facilities written on the contract Dhaka Bank Limited has service reward facilities. Once a year every employee must have to go for fifteen days leave that is called recreation leave. Every employee gets Leave Fare Assistance during this period.  Dhaka Bank Limited organizes a yearly picnic each year in the different attractive picnic spot outside of Dhaka. Every employee participate the picnic with their spouse and enjoys a daylong cultural program with gifts etc.

Festival Bonus

The Bank will continue to pay two festivals bonus equivalent to one-month basic salary of an individual employee per annum as bonus to its permanent employees.

Incentive Bonus

The Bank pays incentive bonus on the basis of profits of the bank that basic salary of an individual employee per annum to its permanent employees.

  • An employee who has completed at least six months of continuous service in a year will be eligible to receive full payment of bonus.
  • An employee who has not completed six months of service in a particular year will be paid bonus on pro-rata basis.

 

Provident Fund

  • The Bank agrees that the rate of employee’s contribution to the Provident Fund shall continue to be10% of his basic salary month and the Bank’s contribution to the fund in respect of each employee shall be equal to the employee’s contribution to the fund.
  • On completion of 5 years service, the contribution of the employee and that of the Bank will increase to 10% of the basic salary.

Medical Allowance

  • Each employee completed their six month job get medical allowance for him and his belongings. It the 3 times of his basis salary per annum.

Gratuity

The Rules prescribing payment of gratuity shall be called “The Dhaka Bank Limited payment of Gratuity Rules”, hereinafter called “Gratuity”. It is paid to the employee at the end of the service period of the employee.

The following Rules shall apply to all employees of the Bank in case of gratuity:

  1. The object of gratuity is to remunerate the concerned employee for their past services rendered to the Bank.
  2. The Bank shall create a gratuity fund as and when required for adequate amount for the purpose. All gratuity payments shall be made from appropriate expenditure account until such fund is created.
  3. Subject to the other provisions of these rules, an employee who has completed 05 years continuous active service shall be entitled to gratuity.
  4. The gratuity shall be paid at the rate of two month’s basic salary for each successfully completed year of service or in excess of six months will be treated as one year in case of calculating the amount of
  5. The basic pay for the purpose of calculation of gratuity shall be the basic pay drawn by the employee concerned in the immediate last month.
  6. Not with standing anything contained herein above, the gratuity may be paid at the discretion of the competent authority to an employee who has not completed 5 years of active service.

 

 

Performance Evaluation

Performer Building

 

Succession management is the process of managing the successor. People are not the performer by born. They are prepared by various ways through a systematic process. So we can say that the second important factor after identifying the qualified people is grooming them for the desired performance. In this chapter I will try to focus on the activity performed Dhaka Bank Limited for building performer.

As the natures of the business vary from organization to organization and the objective and capabilities of every company is unique, the HR management prepares their own strategy for succession management. Like any other well structured organization Dhaka Bank Limited has various policies to build up their future performer in order to achieve the objective in the changing global environment. The task of the banking industry is very much structured and the primary weapon of fighting in this industry is providing better service, the prime focus of employee training is achieving the efficiency and perfection in the work of the employee.

The performer building activity designed by the HR management of Dhaka Bank Limited can be categorized in three groups. These activities are prepared based on the task of the employee and as there are three level of employee in the organization hierarchy, there are three distinct group of activity.

Activities concentrating the officer: It is the first level of the managerial employee of the bank. They entered in the bank as fresh graduate in most of the cases. As they are new in the bank as well as in the industry, they need intensive orientation training for their better performance. After joining in Dhaka Bank Ltd. the bank arrange a 3 day long training program for all the Probationary officers. In this training program, the employees learn the basic rules regarding the policy of the bank and the Banking job, their job responsibility, and how to operate “FLEXCUBE”. After the training, the employees are placed in the desired place. In the practical working environment the employee learn from their co workers and the superior. After 4 or 5 months, the bank arrange a intensive training program on banking which is 42 days lang. The training is given in BIBM (Bangladesh

Institute of Banking Management). After the training, the employee sets on a test, which mark is preserved in the employee’s personal file for future evaluation. After that, the employees are send for various task related training program as per requirement which are usually 2-3 days long. These on demand training are given in the Dhaka Bank training centre.

Activities concentrating the Assistant Vice President: The job responsibility of the Assistant vice president is broadly two types. One is monitoring the activities of the department under his control and does the required work through them. Another is maintaining a good relation with the customer of the bank. The customer not necessarily will be the actual client of the bank; the customer can be the potential client of the bank. AVP can do many of their work by the knowledge gathered through working experience. More over if they fell any problem in performing his duty, the bank arrange training program for them. The program is designed by the HRD with consultation of the Dhaka Bank Training Institute (DBTI). These are mostly customized training program. It plan based on the problem faced and recommendation of the Branch manager. Some training program also arranged for the AVP, if there is and change in the rules and regulation regarding the operation of the relevant field of the AVP. Various related seminar and workshops are also arranged time to time for the improvement for the working capabilities of the AVP. They are also developed for various departmental work through job rotation among various departments. AVP are responsible for taking some decision but remain under the close supervision of the manager. As a result, they become capable for taking decision and practice it under a secured condition. In a word, the position of AVP is the direct learning stage of the managerial behavior and Dhaka Bank have successfully prepared a environment so that, the learning become successful and build up the ability to be a successful manager.

Activities concentrating the Vice President: The training activities for the manager of the Dhaka Bank are quite similar to the activities for the AVP. Managers become capable for their activity through a continuous process of the working this sector. There is no pre-structure training schedule for the manager of the bank. HRD and the DBTI jointly prepare the training schedule for the manager based on the requirement. Dhaka Bank also arranges various seminar and workshops for the managers. Dhaka bank encourages the manager to attain various workshops regarding the management. The Vice Presidents are primarily responsible for achieving the target settled by the executive committee. For that reason, Vice President remains in search for better approach all the time in order to be on target. Dhaka Bank arranges a manager’s conference in every month where all the Branch of the Dhaka Bank gives a presentation on the performance of their own branch. Through that conference the vice president and the branch managers can share their knowledge and experiences. Dhaka bank also arranges various training program or send the vice president to various train program arranged by different organizations of the country or outside the country. The vice president also can take suggestion from the seniors and the executive committee for the solution of the specific problem. Some times Bangladesh Bank arrange various workshops, Dhaka Bank ensure the attendance of the vice presidents in those workshops. Some times Dhaka Bank recruit vice president from other Commercial Banks. From them the vice president can collect and share knowledge though the orientation program. As the vice president work independently in a prescribed constrains, the vice president gather experience through practice.

Staffing policy: Staffing means placing the right people in the required position for the smooth running of the organization. Organizations hire people from two available source of employee. One is the internal source and another is the external source. Internal source of human resources compose of the existing employee of the organization. Organization may full the vacant position of the organization through giving promotion of the better performing subsequent lower level employee. This policy usually used by the organization for various purposes like this is cost effective, motivate the employee, give the employee a growth opportunity etc. External source compose of the human resources out side of the organization, who have the required qualifications and actively searching for a job that match with the job required by the bank.

Dhaka Bank recruit people from both the sources depending on the position for which the recruitment will made.

For Entry level officer: In order to fulfill the entry level position of the bank, Dhaka Bank recruits people from external source. For this position, Bank give advertisement in the news paper. Interested candidate may also apply through online. After that, the selective candidates from the application pool are called for the written test. In the process of selecting the candidates for the written test the Bank call based on merit and they prefer the graduate from IBA of Dhaka University or the graduate from business faculty of Dhaka University. The successors of the written test are called for the viva Test. The viva board selects the finally appropriate candidates. After that they are offered for the probationary position of Dhaka Bank. Dhaka Bank also hire employee on contractual basis for the entry level official job. Most of the time, they offer the contractual job to the well performing, interested internee of the Bank.

For officer: The position of the officer of the bank is usually filled by giving promotion from the subsequent lower level. It is so as the employee become familiar to the rules, regulations and work procedure of the bank. This policy also motivates the existing employee for better performance and gives a growth opportunity to them. Sometimes experienced employees of other Banks are directly recruited for the offer and SPO positions but it is not very frequent in Dhaka Bank.

For Vice president and Manager: For this position Dhaka Bank use both the sources for recruitment. In this case, the Bank policy is they will hire the qualified performer without more concentrating on the present serving organization. But in this case bank most of the time find the qualified performer form their internal human resources.

For SVP and their Superiors: For those mid management level positions, Dhaka Bank appoints people based on their previous performance. The performer may either come from the existing human resources of the Bank or from outside of the Bank. In this case the bank also show interest to those successful employees who have served the Bank earlier and now working in another Bank and gather more experience from another bank. Performance is the prime criteria for being selected in these positions.

So we can say that, Dhaka Bank Limited provide the scope to build up the carrier through providing the learning scope, teaching and the growth opportunity.

According to the level of the position of Dhaka Bank Limited, the performance of the employee is evaluated in three levels. Performance evaluation of the employee according to the level is discussed bellow:

 

Performance Evaluation of the officer:

Analysis of Performance Appraisal Form:

The first part is performance review. In this section, the specified target of getting deposit, advances, account opening, bank guarantee etc. is determined through prior discussion between appraisers and appraise which is commonly known as management by objectives approach. This is an appreciable step in performance measurement, because it utilizes employee participation in setting meaningful, attainable tasks and personal objectives for each individual. The appraiser settles on the issues (profit, deposit, advance etc) considering the following issues:

  • The level of the employee on organizational hierarchy
  • Interpersonal skill of the employee
  • Past performance of the employee
  • Overall branch target decided from the head office

Performance review is followed by self-appraisal. In this part employees usually write some general comments about his/her job, achievement and goals.

The next part is the most vital part. It is the competence review. Here both technical and management skill of an employee is judged.

For technical skill, mainly computer skill, language skill and knowledge regarding basics of banking (laws, regulations and calculations) are rated.

For computer skill, the following issues are rated:

  • Overall competence in computer skill like MS office programs, web browsing and e-mail
  • Competence in ‘Flex Cube” (the system software used for retail and corporate transactions and gathering information from the information center) module. Complete knowledge, speed and problem solving capabilities are judged.

Both written and spoken fluency is rated. Mainly report writing, correspondence and presentation skill is measured.

Management skill: For the position ranging from assistant officer to senior principal officer, employees are evaluated according to a set of predetermined factors like self-confidence, customer orientation etc.

Basing on the performance review and competence review, the appraiser writes down the most applicable grade to the employee. The appraise then signs it. The appraise can be recommend either for both promotion and increment or any one of the two. From general practice, it is known that an employee is not recommended for promotion unless

  • Two years have passed since last promotion and
  • Two years have passed since confirmation of employment (applicable for Trainee assistant officer, Trainee assistant cash officer and probationary officer)

In the part of overall summary the appraiser writes a brief narrative describing the employee’s strengths and weaknesses. It is followed by comments by appraiser’s manager/supervisor (in this case branch manager of Foreign Exchange branch). This includes comments regarding employee’s potential and transferability across different functional departments.

The higher authority (head of HR or Managing Director) expresses his/her comments concerning the employee. Finally, the appraise writes down comments after reviewing the overall appraisal. An employee has all rights to disagree with the grades given by the appraiser. The disagreement can either be resolved through discussion between appraisers and appraise or the matter may be carried forward to the Human Resources department.

Basing on the overall competence review (technical and management skill) the appraiser recommends necessary training and development requirements to facilitate better performance of the employee. After the completion of the whole appraisal process, the appraisal forms are returned to the Human Resources department for documentation and follow up.

 

Performance Evaluation of the Assistant Vice President:

Similar to the performance appraisal form of assistant officer to senior principal officer, first part is performance review. Agreed key tasks that consists of profit, deposit, advance, bank guarantee etc is determined followed by a discussion between the apprise and the appraiser (in this case, the branch manager of Foreign Exchange Branch). This approach is known as management by objectives.  It utilizes employee participation in setting meaningful, attainable tasks and personal objectives for each individual. The key factors of setting up targets are mentioned in the previous section.

For the case of foreign trade department, fulfilling L/C target becomes much easier when some reputed business organizations maintain their respective L/C operations through a particular bank. In Foreign Exchange branch of Dhaka Bank Ltd, Zam Zam Sprinning Mills; Desh Bandhu Sugar Mills Ltd.; Columbia Garmants; Jenesis Fashions and its sister concerns; Sanjee Automobiles; B.P. Wears etc are considered as very valued clients. Attracting and retaining large clients are remarkably considered as good performance incase of the Assistant Vice President.

Performance review is followed by self -appraisal. In this part executives usually write some general comments about his/her job, achievement and goals.

 

The competence review is the most essential part. Here both technical and management skill of an employee is judged. Like the technical skill of Assistant Officer to Principal Officer, it is very important for this position also

Based on the performance review and competence review, the appraiser writes down the most applicable grade to the employee. The appraise then signs it. The appraiser be can recommend either for both promotion and increment or any one of the two. From general practice, it is known that an employee is not recommended for promotion unless two years have passes since last promotion.

All other parts in the form are same as the previous one. At this level, training programs are not arranged as frequently as it is arranged for the level of Assistant officer to Senior Principal Officer. Rather different types of day long seminar, workshops etc are arranged for them. Training is arranged when there is any major change in the laws, regulation, operation module etc.

The organization structure is pyramid shaped. For that reason, upward mobility is comparatively slow in this level. In Dhaka Bank ltd, there is a tradition that employees get promotions on every two-three years. But this is not applicable for the position of AVP and above. Some executives who perform extraordinarily well, gets promotion in 2-3 years, but these are becoming rare incident day by day.

Performance Evaluation for the Vice President:

The appraisal form of Assistant Vice President (AVP) and Vice President (VP) are same. To avoid redundancies the detailed analysis of the appraisal form is not mentioned in this section. Only the performance review and competence review section is analyzed and changes are proposed accordingly. The VP is the branch manager of Foreign Exchange Branch.

 

Performance Review:

The tasks and personal objectives regarding profit, deposit, advance, bank guarantee etc are determined through a meeting with Managing Director and head of Human resources in Head Office. The managing director of the bank is the appraiser for this position. Branch profit and other targets are also set there .The key factors for setting these targets are:

  • Location of the branch
  • Availability of customers
  • Market trend

In Foreign Exchange branch the targets are ambitious because of availability of large number of customers who deposit handsome amount of money. Moreover, there is provision of getting large number of salary accounts, deposit for employee provident fund and Large L/C etc because many traders, corporate bodies are located around Foreign Exchange branch.

Regardless of the business opportunities, some threats are also involved in it. There is always constant threat of losing deposits. Because, now a days banking business is very much competitive and competitors always offer interest rate, lower operting charges for different accounts. For deposit amounts like more than one core difference

is huge even if the interest varies for .25%. As the above mentioned factors are determined by the management of the bank, the vice president and branch manager have to meet the target adjusting the prescribed condition. It is a difficult task and for that the manager has to have various skills and should have the ability to cope with every situation.

 

Competence Review:

This is more or less same as that of AVP position. So both technical and managerial skills are judged on simple rating scale, which has five categories. All the categories have been discussed already in the previous section and I am avoiding the repetition.

 

Proposed Changes in Format, Process and Management Philosophy of Evaluating Officer:

From the format, it is clearly understandable that the process is a simple rating scale, which comprises five scales ranging from outstanding to poor which expresses the highest level of performance to the lowest level. This is used because it is simple and quick. But this process has some significant disadvantages:

  • The factors and degrees are sometimes vaguely defined. For example, in case of ‘customer orientation’, ‘communicating’, and ‘team orientation’ there should be specific definitions.
  • The central tendency errors are likely to occur because it may be difficult for the appraiser to factually justify a rating above or below acceptable performance.
  • This process sometimes lacks factual basis.

For some technical and management skill, Behaviorally Anchored Rating Scale (BARS) can be a very good alternative. It is more detailed and redefined version of the rating scale. Detailed analysis of a job and a precise identification of specific effective and ineffective job behaviors are mentioned in the appraisal form. As each job is carefully judged and identified it is a more objective method than other methods because behavioral statements are stated rather than vague descriptions of performance. Descriptive statements for each level of performance for each job factor is identified and then arranged on a scale in rank order. In this report, the scale provides for five descriptive statements for each performance factor.

The scales are defined in the following:

5 Clearly outstanding performanceMeets all targets and greatly exceeds some
4 GoodMeets all targets, exceeds some
3 SatisfactoryMeets all set targets on time
2 Below satisfactoryLittle shortfall in a few targets, but met others
1 PoorCould not meet any target

Some technical and managerial skills are evaluated in BARS method in the next page:

Job: Officer, Foreign Trade department

Technical Skill: Functional knowledge

Factor: Maker of retail and corporate module in Flex Cube*

 5.Clearly outstanding performanceHas complete knowledge in Flex Cube; Very fast and efficient in processing transactions in retail and corporate module.
 4.Excellent performanceHas good knowledge of Flex Cube and efficient in processing transaction in it.
 3.Satisfactory performanceHas knowledge of own field; can do the transaction processing correctly with moderate time.
 2.Moderate performanceCan process transaction in Flex Cube module but needs assistance.
 1.Poor performanceSlow in transaction processing, as a result L/C operation does not run smoothly, takes more time to complete the process.

 

System software in which all sorts of transaction (retail, corporate) are processed and all previous transaction lists, statements etc are recorded.

Management skill: Communication Skill

Factor: Follow up with PSI companies, timely submission of all related statements to head office/ Bangladesh bank; Regular correspondence with all related parties of L/C.

 5.Clearly outstanding performanceCan prioritize work, submits related statements before due date and maintains continuous correspondence with the remitting bank, beneficiary and other related authorities.
 4.Excellent performanceMaintains timely follow up with all concerned parties, send statements correctly and on time
 3.Satisfactory performanceAble to do all the works with moderate time.
 2.Moderate performanceSends statements correctly to concerned parties but sometimes needs supervisor’s reminder.
 1.Poor performanceNot able to do all the works by himself/ herself, takes other’s help; can not prioritize work and needs continuous guidance from supervisor.


Managerial Skill: Customer orientation

Factor: All transactions related inward remittance through cash payout system, issuance of foreign draft, dollar endorsement and traveler’s cheque.

 5.Clearly outstanding performanceHighly efficient in performing all tasks; Can meet all customer queries in time and follows up on those; provides fast service to the customers; has a friendly demeanor.
 4.Excellent performanceEfficient in performing own duties; Volunteers relevant information and good services to customers; meets customer queries with a smiling face.
 3.Satisfactory performanceProvides necessary service and information to the customer properly.
 2.Moderate performanceProvides reasonable service to customers; can not always answer all customer queries (because of either knowledge gap or for not being able to prioritize)
 1.Poor performanceNot able to provide customer service properly; often makes mistake; does not have the right disposition to handle different types of customers.

 

 

Managerial Skill: Functional capability

Factor: Issuance of local and foreign L/C; follow up and adjustment of payment instructions; reimbursement; proceeds realization; scrutiny of shipping documents; lodgments; retirement and all related accounting entries.

 5.Clearly outstanding performanceVery efficient and prompt in performing all function and maintains proper coordination among other team members who share the responsibilities.
 4.Excellent performanceEfficient in performing all the functions, effort in coordinating activities and sharing responsibilities are appreciable.
 3.Satisfactory performanceAble to do all the works, sometimes takes assistance of others in scrutinizing the shipping documents, team members rarely expresses dissatisfaction about improper coordination and sharing responsibilities.
 2.Neither good nor bad performanceSlow in doing works, team members sometimes complain about improper coordination
 1.Poor performanceNot able to identify all the problems in shipping documents and reluctant to take part in sharing responsibilities.

 

Managerial Skill: Team orientation

Factor: Assisting others when required, solving problems collaboratively; Dependable, supportive, reliable, goes out of way to assist, In absence of one of the team member managing daily responsibilities of that person in addition to own  works.

 5.Clearly outstanding performanceExtraordinarily dependable, supportive, reliable, goes out of way to assist; Maintains proper coordination among other team members who share the responsibilities.
 4.Excellent performanceDependable and supportive; Maintains coordination among work team; Gives effort to strengthen team spirit.
 3.Satisfactory performanceEffort in coordinating activities and sharing responsibilities are appreciable.
 2.Neither good nor bad performanceTeam members rarely express dissatisfaction about improper coordination and sharing responsibilities.
 1.Poor performanceTeam members sometimes complain about improper coordination; reluctant to take responsibilities of peers in case their absence ( Sometimes not have the intention and sometimes can no allocate time for being slow work)

Furthermore, an external customer feedback can be done so that appraiser’s comments can be re- checked (whether positive or negatively biased). These feedback forms can be given to some valued clients for their comments. Similarly, internal customer feedback can also be taken from the superiors, peers and subordinates of same and other functional departments. A sample form is given bellow for more clarification.

 

INTERNAL/ EXTERNAL CUSTOMER FEEDBACK

 

As an internal/ external customer of (name) ……………………………………………, please give him/ her feedback regarding his/her work performance and work behaviors. After you have completed this form, send it to ……………………………. Your responses will be tabulated and then discussed with the individual.

To what extent did this individual meet your expectations of work quality in areas you indicate as important:

ExceedsMeetsDoesn’t meet
1. Accuracy of the work you received
2. Timeliness of the work you received
3. Dependability of the work you received
4. Sharing relevant information to help you do your work more efficiently

 

In terms of your interactions with this person, please feel free to comment on any of the following:

  • The type of errors and the amount of rework
  • The nature of any work delays
  • Interpersonal work behaviors
  • Collaborative efforts to improve work or business process

Please state any new expectations that you have regarding the work you receive from the person.

Thank you for completing this form

We know, 360° evaluations is the most perfect way of appraising employees. Though it is time consuming, this can be started on a pilot basis to see whether the ultimate result differs in the two different processes. If the difference is significant, then proposed changes can be considered as essential to revise the existing system.

 

 

Management skill: Leadership

Factor: Assigning jobs for the officers of foreign trade department and supervise their activities and evaluate their performance

 5.Clearly outstanding performanceSuccessfully assigns jobs to the officers, resolve conflicts in collaborative way, supervise their activities, boost team spirit and appraise the subordinates accurately
 4.Excellent performanceEfficient in assigning jobs and as a mediator of resolving conflicts; possess required supervisory skills.
 3.Satisfactory performanceCan do all the duties properly and try to develop team spirit
 2.Moderate performanceMay face problems while assigns jobs and resolving conflicts which results in lack of coordination in team work
 1.Poor performanceSubordinates complain about the leadership skill, biasness in conflict resolution and supervising ability of the manager.

Management skill: Functional capability

Factor: Authorizer of all transactions related to foreign exchange, scrutinize L/C proposals; in absence of operations manager the duties are transferred to him.

 5.Clearly outstanding performanceHas complete knowledge about all the related transactions and accounting entries, can check and authorize transactions very swiftly and Can identify maker’s mistake very quickly. Efficient in managing tasks of other departments when necessary.
 4.Excellent performanceHas complete knowledge about all the related transactions and accounting entries, authorizations are done timely.
 3.Satisfactory performanceHas knowledge about all the related transactions and accounting entries, authorizations are done timely
 2.Moderate performanceDoes routine jobs, does not feel comfortable while taking over charges of other departments
 1.Poor performanceSlow in doing works; lack knowledge of swiftly operating the Flex cube module, sometimes can’t identify mistakes of the makers.

For this level of hierarchy, major duties are managing individual performance, coordinating interdependent groups to ensure that the subordinates are meeting external and internal customer needs and ensure uniformity in interpretation of policies and procedure.

To make the appraisal process more transparent, neutral and accurate both internal and external customer feedback can be taken, but this form will differ from that of the junior level. This will check the positive or negative biasness of the appraiser (the branch manager)

 

We know, 360° evaluations is the most perfect way of appraising employees. Though it is time consuming, this can be started on a pilot basis to see whether the ultimate result differs in the two different processes. If the difference is significant, then proposed changes can be considered as essential to revise the existing system.

 

Proposed Changes in the Form and Process of Evaluating Vice President:

Managerial skill: Leadership

Factor: Assigning jobs for all the officers in all the available departments, developing a vision of future and formulate strategies to achieve that; motivating, energizing and influencing the behavior of other employees:

 5.Clearly outstanding performanceSuccessfully assigns jobs, develop vision and can motivate employees towards that can influence employees’ behavior. Has the ability to translate strategies into action.
 4.Excellent performancePossess the ability to assign right job to the right person, can develop appropriate strategies.
 3.Satisfactory performanceDoes routine jobs, but no extra effort is given.
 2.Moderate performanceSometimes faces problems while assigning jobs (can not put right person on the right position) that results in job dissatisfaction among employees
 1.Poor performanceLacks the ability to motivate employees and can rarely influence their behavior.

 

Managerial skill: Business development

Factor: Monitoring the business environment by analyzing business trends, developing relationship with clients and overseeing sales and marketing activities

 5.Clearly outstanding performanceSuccessfully performs all duties to achieve branch target; regularly review profit position and take necessary initiatives to achieve that; often profit exceeds target; and can explore new business avenues.
 4.Excellent performanceTakes decisions basing on the market trends, supervise the sales and marketing activities.
 3.Satisfactory performancePerforms well and proceed with a view to achieve branch target. Gives necessary efforts for business development.
 2.Moderate performanceSometimes face   problems in carrying out duties that negatively affects target achievement.
 1.Poor performanceLacks proper knowledge of business development; no effort is given towards customer relationship and supervision on marketing activities.

 

Managerial skill: Customer orientation

Factor: Pursuing the existing customers to strengthen the relationship and influencing new customers to get service from the bank:

 5.Clearly outstanding performanceCan successfully pursue the valued clients to gather huge deposit and advances and minimum use of discretionary power (to enhance interest rate for FDR, to reduce l/C margin etc.  which increases the cost of fund)
 4.Excellent performanceCan pursue the valued clients and rarely use discretionary power.
 3.Satisfactory performanceDoes routine jobs to retain customers but no extra effort is given.
 2.Moderate performanceTo sustain the business manager often depends on exercising the discretionary power.
 1.Poor performanceLacks proper knowledge and influencing capability to retain customers, consequently customers switch to other competitors.

 

Managerial skill: Functional capability

Factor: Authorizer of all transactions related to all departments when necessary; responsible for compliance of anti- money laundering activities; follows up KYC (Know your customer) updates; works as an internal auditor of the branch; and ensures timely submission of all statements to Bangladesh Bank

5.Clearly outstanding performanceHas complete knowledge about all the related transactions and accounting entries, can check and authorize transactions very swiftly and Can identify maker’s mistake very quickly; supervises and gives reminder in advance to all the departments to submit all sorts of statements timely and accurately and successfully meets the audit compliances.
 4.Excellent performanceHas complete knowledge about all the related transactions and accounting entries; supervises the procedure of submitting all sorts of statements timely and accurately and meet the audit compliances properly.
 3.Satisfactory performanceHas knowledge about all the related transactions and accounting entries, able to meet the audit compliances
 2.Moderate performanceGives effort to perform all the duties but face problems in prioritizing works and consequently cannot keep balance of all the activities
 1.Poor performanceSlow in doing works; lack knowledge of swiftly operating the Flex cube module, often fails to supervise KYC and other compliances.

 

Managerial skill: Resource management

This will be almost same as the appraisal process of AVP, but an AVP plans and allocates resources for his/ her own department but a branch manager’s responsibility is much more than that. S/he deals with all the departments in a branch and allocates resources accordingly.

 

Findings:

Dhaka Bank Limited is a well established bank of our country. It is using well proved modern practices in order to make it fit for the competitive world. Despite after doing the analysis regarding the topic, I have been able to find out the following things could be changed in order to be in a more strong position.

  • The performance evaluation system of Dhaka Bank should be updated.
  • In the evaluation process, the evaluation from the co-worker and from the customer about an employee should be taka into consideration, as the employee most of his working hours with interacting them.
  • Some of the employee is not getting promotions in due time. It is creating frustrations among them. This thing should be considered more deeply.
  • Employees are not getting different types of training on regular basis.
  • At the peak hour the branch become very crowded and the employees fails to serve every client properly all the times. Sometimes the clients could not find place to wait for his turn.

It is very difficult to recommend about this topic because this issue is very sensitive, directly related to the top level management of the bank and finally cost is associated if these recommendations are executed. Despite these problems there is something that the Human Resource department of Dhaka Bank, should look at.

The format:

  • The HR department can introduce BARS method to appraise most of the technical and management skills.
  • Internal and external customer feedback form can be attached with the existing form.

The process:

  • Appraisal from the peers and customers can be introduced to check the biasness of the appraiser.

Management philosophy:

  • The quota system regarding grades should be abolished so that it cannot victimize the employees.
  • Management should take necessary initiatives for the employees whose promotions as well as career path are stuck.
  • All the departments of the branches can be given under the supervision of the Assistant Vice President. By this way the management can able to give promotion on a more regular basis as well as safe the career path of employee form to be stuck.
  •  The number of employee should increase in the branches specially in the busiest branches. This will directly affect the quality of the customer service and the motivation level of the employee.
  • The Bank should give chance to apply the graduate from all institutions, so that it can collect larger application pool from where they can select.
  • Through giving chance to graduates from all institutions will increase the reputation of the Bank as an equal opportunity employer.
  • The Bank should give the employee transfer to the branch near to their home. It will motivate them and give them a chance to provide better service. It may also increase the deposit and secured loans as there will be chance for the employee to know the customer personally.

Training program:

  • There should be scheduled training program for each level of the employee.
  • Every employee should get training just after getting the promotion or the change in the job responsibility.
  • The bank can increase the period of the orientation of the new employee of the bank.
  • The bank should give the new rules and practice of the industry in the corporate brochures of the bank and should ensure the availability of it to all the employee of the bank.

These changes in the format can be introduced in a pilot basis in two or three branches to see whether there are substantial differences in the results from both of these formats. If the change brings out more accurate results and creates less dissatisfaction to the employees, then the changes should be implemented. The proposed changes in the philosophy of the management and in the training program should be calculated in terms of money. If it seams that, it is feasible to implement that, the management should do the change up to the possible extant as the proposed change will bring benefit.

 

Conclusion

Individuals working in an organization perform at varying levels of proficiency. Some use their skills, time and energy very effectively, some do not. Some display an abundance of initiative and seek opportunities for additional responsibilities, some do not. Decision making in many areas of human resources management depend upon the managers’ ability not only to recognize such differences in individual performance but also to accurately measure them. This is the task of performance evaluation.

After proper evaluation of the individual difference preparing the future key performer for the development of the organization, retain them and keep them motivated is the activity of performer building.

Succession management become successful, when the organization can identify the inner capacity of the employee, nurses them properly and make them ready to use their best effort for the betterment of the organization.

The study of the report refers to the succession management of Dhaka Bank Limited. It is aimed at analyzing the existing process, identifying the present problems faced by the employees due to process, and management philosophy. Attempts were made to find out the factors which need to be changed and improvised.

A number of changes are proposed in the format, process and management philosophy. The BARS method is used to appraise the competence of the three hierarchical levels. During the internship period, there was a scope to see the succession management of the bank. At the time of working, there is a chance to get closer of various employees, share their feelings and the problems. It revealed the frustrations and dissatisfaction of many of the employees due to some inherent problems associated with the existing process.

As the succession management deals with the expectation, personal objective carrier of the individual employee, the process should be modified to make them more accurate and effective. It is very much need for the success of the organization as organization success demands on the employee personal success.