Human Resource Management in Dhaka Bank
Subject: Human Resource Management | Topics:

Meaning of HRM

Human resource management (HRM) is the strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” and “human resources” (HR) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organizations. In simple sense, Human Resource Management (HRM) means employing people, developing their resources, utilizing maintaining and compensating their services in tune with the job and organizational requirement.

Academic theory

The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is “fit”, i.e. a HRM approach seeks to ensure a fit between the management of an organization’s employees, and the overall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines; therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial engineering, industrial, Legal/Paralegal Studies and organizational psychology, industrial relations, sociology, and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:

  1. Strategic business partner
  2. Change management
  3. Employee champion
  4. Administration

However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen rather as reactive as strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value.

Critical Theory

Postmodernism plays an important part in Academic Theory and particularly in Critical Theory. Indeed Karen Legge in ‘Human Resource Management: Rhetorics and Realities’ poses the debate of whether HRM is a modernist project or a postmodern discourse (Legge 2004). In many ways, critically or not, many writers contend that HRM itself is an attempt to move away from the modernist traditions of personnel (man as machine) towards a postmodernist view of HRM (man as individuals). Critiques include the notion that because ‘Human’ is the subject we should recognize that people are complex and that it is only through various discourses that we understand the world. Man is not Machine, no matter what attempts are made to change it i.e. Fordism / Taylorism, McDonaldisation (Modernism).

Critical Theory also questions whether HRM is the pursuit of “attitudinal shaping” (Wilkinson 1998), particularly when considering empowerment, or perhaps more precisely pseudo-empowerment – as the critical perspective notes. Many critics note the move away from Man as Machine is often in many ways, more a Linguistic (discursive) move away than a real attempt to recognize the Human in Human Resource Management.

Critical Theory, in particular postmodernism (poststructuralist), recognizes that because the subject is people in the workplace, the subject is a complex one, and therefore simplistic notions of ‘the best way’ or a unitary perspective on the subject are too simplistic. It also considers the complex subject of power, power games, and office politics. Power in the workplace is a vast and complex subject that cannot be easily defined. This leaves many critics to suggest that Management ‘Gurus’, consultants, ‘best practice’ and HR models are often overly simplistic, but in order to sell an idea, they are simplified, and often lead Management as a whole to fall into the trap of oversimplifying the relationship.

History of HRM


This assignment traces the history of Human Resource Management from
the Industrial Revolution in the 18th century to present times. The assignment discusses key periods and movements in this field and expands on their contribution to modern Human Resource Management.

In discussing the history of Human Resources Management it is important to offer a definition of the subject. Human Resource. Management can be described as “The comprehensive set of managerial activities and tasks concerned with developing and maintaining a qualified workforce – human resources – in ways that contribute to
organizational effectiveness.” (DeNisi and Griffin, 2004)

A Historical Review:

The Industrial Revolution

The momentum for the industrial revolution grew through the 17th century. Agricultural methods were continually improving, creating surpluses that were used for trade. In addition, technical advances were also occurring, for example the Spinning Jenny and the Steam Engine. These advances created a need for improved work methods, productivity and quality that led to the beginning of the Industrial Revolution.

Adam Smith

In 1776, Adam Smith wrote about the economic advantages of the division of labor in his work The Wealth of Nations. Smith (1776) proposed that work could be made more efficient through specialization and he suggested that work should be broken down into simple tasks. From this division he saw three advantages:
– the development of skills
– time saving
– the possibility of using specialized tools.

Frederick Winslow Taylor
F.W. Taylor is considered to be the father of Scientific Management.
In 1911, his seminal work, The Principles of Scientific Management was
published. This book contains four overriding principles of scientific

– Each part of an individuals work is analyzed ‘scientifically’.
– The most suitable person to undertake the job is ‘scientifically
chosen’ and is taught the exact way to do the job.

– Managers must co-operate with workers to ensure the job is done in a
scientific way.

The Hawthorne Studies

The Hawthorne Studies were a groundbreaking set of experiments conducted at the Western Electric plant in Hawthorne, Chicago by Elton Mayo. The studies were conducted from 1927 to 1932 and measured the relationship between productivity and working environment. The studies were based on preliminary experiments conducted in 1924 that measured the effect of lightin onproductivity.(Bloomsbury,2002)

The results of the experiments showed that changes in the environment did affect productivity, but this was not the sole factor. The workers considered management to be showing an interest in them and this improved motivation.
Contemporary HRM

In modern business the Human Resources Management function is complex and as such has resulted in the formation of Human resource departments/divisions in companies to handle this function. The Human resource function has become a wholly integrated part of the total corporate strategy. The function is diverse and covers many facets including Manpower planning, recruitment and selection, employee motivation, performance monitoring and appraisal, industrial relations, provision management of employee benefits and employee education training and development.

Functions of Human Resource Management

The Management of Workplace

HR Management needs to change from an ethnocentric view (“our way is the best way”) to a culturally relative perspective (“let’s take the best of a variety of ways”). This shift in philosophy has to be ingrained in the managerial framework of the HR Management in planning, organizing, leading and controlling of organizational resources.

Planning a Mentoring Program

One of the best ways to handle workplace diversity issues is through initiating a Diversity Mentoring Program. This could entail involving different departmental managers in a mentoring program to coach and provide feedback to employees who are different from them. In order for the program to run successfully, it is wise to provide practical training for these managers or seek help from consultants and experts in this field.

Organizing Talents Strategically

Many companies are now realizing the advantages of a diverse workplace. As more and more companies are going global in their market expansions either physically or virtually (for example, E-commerce-related companies), there is a necessity to employ diverse talents to understand the various niches of the market. With this trend in place, a HR Manager must be able to organize the pool of diverse talents strategically for the organization. Management must consider how a diverse workforce can enable the company to attain new markets and other organizational goals in order to harness the full potential of workplace diversity.

Control and Measure ResultsA HR Manager must conduct regular organizational assessments on issues like pay, benefits, work environment, management and promotional opportunities to assess the progress over the long term. There is also a need to develop appropriate measuring tools to measure the impact of diversity initiatives at the organization through organization-wide feedback surveys and other methods. Without proper control and evaluation, some of these diversity initiatives may just fizzle out, without resolving any real problems that may surface due to workplace diversity.

 Challenges of Human Resource Management

The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in direconsequences, as their competitors may be outplaying them in the strategic employment of their human resources.

With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within the organization. In order to succeed, HR must be a business driven function with a thorough understanding of the organization’s big picture and be able to influence key decisions and policies. In general, the focus of today’s HR Manager is on strategic personnel retention and talents development. HR professionals will be coaches, counselors, mentors, and succession planners to help motivate organization’s members and their loyalty. The HR manager will also promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity.

Meaning of Human Resource Planning

An organization would not build a new plant, conduct the ribbon-cutting ceremony, and then begin to worry about how to staff the facility. A firm cannot hire several hun­dred engineers and get them on board overnight, nor can it develop management tal­ent in just a few weeks. Foresight is necessary to ensure that appropriately qualified staff will be available to implement an organization’s future plans. The tighter the labor market, the more forward planning is required to avoid future problems due to understaffing. On the other hand, planning ahead in a declining economy is also crit­ical in minimizing expensive overstaffing and possible layoffs. Human resource planning is concerned with the flow of people into, through, and out of an organization. HR planning involves anticipating the need for labor and the supply of labor and then planning the programs necessary to ensure that the organization will have the right mix of employees and skills when and where they are needed. The forecasting methods described below provide key input for these processes.

Human resource experts can also take on a strategic role in collaboration with the top management team to plan a strategy for the firm that capitalizes on or builds the organization’s unique human, resource competencies. For instance, Marriott Corporation’s goal of being the provider of choice for food and lodging services was supplemented by the goal of becoming the “employer of choice”- as well. Executives decided that unless Marriott was a very’ attractive employer, it would not be able to obtain the number and quality of people it needed, for a growth and high-quality service strategy. The company adopted initiatives to broaden its recruiting base, but ‘it also worked hard at retaining and motivating current employees, To that end, changes were made in career paths, job responsibilities, work teams, and reward systems.

At Colgate-Palmolive, a global HR team was formed to help the organization meet its goal of “becoming the best truly global consumer products company.” Top HR managers and key senior line managers worked together on the team to translate business plans into human resource plans that would support organiza­tional excellence. As a result, strategic initiatives were adopted in recruitment, selection, development, individual performance management, team performance management, career planning, diversity, employee attitude surveys, and employee communication.

Objectives of Human Resource Planning

Managers and HR departments achieve their purpose by meeting objectives.

Objectives are benchmarks against which actions are evaluated. Sometimes they are carefully thought out and expressed in writing. More often objectives are not formally stated. Either way, they guide the HR function in practice. Con­sider the objectives of Hewlett-Packard’s founders:

Human resource objectives not only need to reflect the intention of senior management, they also must balance challenges from the organization, the HR function, society, and the people who are affected. Failure to do so can harm the firm’s performance, profits, and even survival. These challenges spotlight four objectives that are common to HR management and form a framework around which this book is written.

1. Organizational objective. To recognize that HR management exists to    contribute to organizational effectiveness. Even when a formal HR department is created to help managers, the managers remain responsible for employee performance. The HR department exists to help managers achieve the objectives of the organization. HR management is not an end in itself; it is only a means of assisting managers with their human resource issues

2. Functional objective. To maintain the department’s contribution at a level appropriate to the organization’s needs. Resources are wasted when HR man­agement is more or less sophisticated than the organization demands.

3. Societal objective. To be ethically and socially responsive to the needs and challenges of society while minimizing the negative impact of such demands on the organization. The failure of organizations to use their resources for soci­ety’s benefit in ethical ways may result in restrictions.

4. Personal objective. To assist employees in achieving their personal goals, at least insofar as those goals enhance the individual’s contribution to the orga­nization. The personal objectives of employees must be met if workers are to be maintained, retained, and motivated. Otherwise, employee performance and satisfaction may decline and employees may leave the organization.

Not every HR decision can meet these organizational, functional, societal, and personal objectives every time. Trade-offs does occur. But these objectives serve as a check on decisions. The more these objectives are met by the depart­ment’s actions, the larger its contribution will be to the organization’s bottom line and the employees’ needs. Moreover, by keeping these objectives in mind, HR specialists can see the reasons behind many of the department’s activities.

Model for Human Resource PlanninThe first step in HR planning is to collect information. A forecast or plan cannot be any better than the data on which it is based. HR planning requires two types of information data from the external environment and data from inside the organiza­tion

Current conditions and predicted changes in the general economy, t

economy of the specific industry, relevant technology, and competitor firms.

Any of these may affect the organization’s business direction and volume and thus the need for human resources.

Human resource planners must also be aware of labor-market conditions such’ as unemployment rates, skill availabilities, and the age distribution

the labor force. Finally, planners need to be aware of federal and state regulations: those that directly affect staffing practices, such as affirmative action or retirement-age legislation, arid those that indirectly affect demand for services or ability to pay staff.

External benchmarking data also can be useful in human resource planning. One might, for instance, discover that other companies are doing the same work with fewer people, which could lead to a consideration of more efficient ways to work. Benchmarking efforts by Duke Power Company’s consulting arm showed them new ways to organize. Historically, they had staffed projects exclusively with highly experienced (and expensive) professionals. Benchmarking showed them that other successful consulting firms used a small number of top-class experts working with a large support staff of less skilled and experienced people, and they were able to replicate this approach successfully.

The second major type of information comes from inside the organization. In­ternal information includes short- and long-term organizational plans and strate­gies. Obviously, plans to build, close, or automate facilities will have HR implica­tions, as will plans to modify the organization’s structure, buy or sell businesses, and enter or withdraw from markets. A decision to compete en the basis of low cost rather than personalized service also will have staffing implications. Finally, information is needed on the current state of human resources in the organization, such as how many individuals are employed in each job and location, their skill levels, and how many are expected to change positions or depart the organization during the forecast period.

Once planners have the external and internal information they need, they can forecast the future demand for employees. At a minimum, this forecast includes estimating the number of employees who will be needed in the coming year. Longer-term demand forecasts also may be made. Next, planners forecast the sup­ply of labor, the internal supply of employees and their skills and promo ability, as well as the probable availability of potential new employees, with requisite skills in the external labor market.

The final step in HR planning is to plan specific programs to ensure that supply will match demand in the future. These programs often include recruiting plans and also may include training and development activities, incentives or disincen­tives to early retirement, Modifications of career paths in the organization, or a va­riety of other HR management programs. Note that the feedback loop shown in Figure 3.1 allows for learning from past planning efforts. If demand or supply fore­casts have not been as accurate as desired, forecasting processes can be improved in subsequent years.

Organizational practices

Practices in the Southeast Bank Limited

The bank follows most of steps of HR planning i.e. integrate HR planning with corporate planning, assessment of internal HR capabilities and so on.

The bank has an integrated HR plan. Their manpower ratio is satisfactory for smooth and quality services to the potential customers.

Dhaka Bank Limited is forecasting future manpower requirements. This is done either in terms of mathematical projections or in terms of judgmental estimates. Mathematical projections are done extrapolating factors like, economic, environment, development trends in the bank. Judgmental estimates are done depending on the specific future plans of the bank by managerial discretion which is based on past experience.

Dhaka Bank Limited is preparing an inventory of present manpower. Such inventory contains data about each employee’s skills, abilities, work preferences and other items of information.

Dhaka Bank all times prepares anticipating problems of manpower. This is can be done by projecting present resources into the future and comparing the same with the forecast of manpower requirements. This helps in determining the quantitative and qualitative adequacy of manpower.

Concepts of Recruitment Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected. In large organizations specialists in the recruiting process, called recruiters, are often used to find and attract capable applicants. The HR plan can be especially helpful because it shows the recruiter both present openings and those expected in the future.Figure presents an overview of the’ recruitment process from the perspectives of the organization and the candidate. This flow chart displays the process as it un­folds over time. When a vacancy occurs and the recruiter receives authorization to fill it, the next step is a careful examination of the job’ and an enumeration of the skills, abilities, and experience needed to perform the job successfully. Existing job analysis documents can be very helpful in this regard. “In addition, the recruit­ment planner must consider other aspects of the job environment—for example, the supervisor’s management style, the opportunities for advancement, pay, and – geographic location—in deciding what type of candidate to search for and what search methods to use. After carefully planning the recruiting effort, the recruiter uses one or more methods to produce a pool of potentially quality

In the recruitment and selection process, the organization’s and individual’s objectives may conflict. The organization is trying to evaluate the candidate’s strengths and weaknesses, but the candidate is trying to present only strengths. Conversely, although the candidate is trying to ferret out both the good and the bad aspects of the prospective job and employer, the organization may prefer to re­veal only positive aspects. In addition, each party’s own objectives may conflict The organization wants to treat the candidate well to increase the probability of job-offer acceptance, yet the need to evaluate the candidate may dictate the use of ‘methods that may alienate the prospect, such as background investigations or stress Interviews.” Analogously, the applicant wants to appear polite and enthusias­tic about the organization to improve the probability of receiving an offer, but he or she may also want to ask penetrating questions about compensation, advance­ment, and the company’s financial health and future.


The nature of a firm’s recruiting activities should be matched to its strategy and values as well as to other important features such as the state of the external labor market and the firm’s ability to pay or the wise induce new employees to join.


Selection is the process by which managers and others use specific instruments to choose from a pool of applicants a person or persons most likely to succeed in the job(s) given management goals and legal requirements.

Personnel selection is a process of measurement, decision making, and evalua­tion.  The goal of a personnel selection system is to bring into an organization individuals who will perform well on the job. A good selection sys­tem also should be fair to minorities and other protected groups.

To have an accurate and fair selection system, an organization must use reliable and valid ‘measures of job applicant characteristics. Although such a statement would seem obvious—any HR practitioner would want a reliable, valid se­lection process—some research indicates that what happens in the real world is not as ideal as one might like. For example, a research study done in New Zealand found that the more valid a selection test was, the less likely personnel consultants in New Zealand were to use it! Thirty-three percent of those surveyed did not even ‘ understand what the term “validity meant in reference to personnel selection. In addition to validity and reliability, a good selection system must combine infor­mation about applicant characteristics in a rational way and produce correct hire and no-hire decisions. Finally, a good personnel selection system should add to the overall effectiveness of the organization.

The selection process:


Internal Recruitment Process:

Current employees are a major source of recruits for all but entry-level positions. Whether for promotions or for “lateral” job transfers, internal Candida already know the informal organization and have detailed information alibis formal policies and procedures. Promotions and transfers are typically ceded by operating managers with little involvement by the HR department

 Job-Posting Programs

HR departments become involved when internal job opening are publicized employees through job-posting programs, which inform employees at openings and required qualifications and invite qualified employees to apply.

The notices usually are posted on company bulletin boards or electronic bul­letin boards or are placed in the company newspaper. Qualifications and other facts typically are drawn from the job analysis information. Then, through self-nominations or the recommendation of a supervisor, employees who are interested in the posted opening report to the HR depart­ment and apply.

Self-nominations may even apply to management trainees. Many organiza­tions hire recent college graduates for management training programs, and this may be little more than an extended job rotation through several departments. After this rotation is completed, some companies allow trainees to nominate themselves to fill posted job openings.

Departing Employees

An often overlooked source of recruits consists of departing employees. Many employees leave because they can no longer work the traditional forty-hour workweek. School, child-care needs, and other commitments are the common reasons. Some might gladly stay if they could rearrange their hours of work or their responsibilities. Instead, they quit when a transfer to a part-time job may retain their valuable skills and training.

External Recruitment Process:

When job openings cannot be filled internally, the HR department must look outside the organization for applicants. The remainder of the chapter discusses the external recruitment channels most commonly used by employers and ap­plicants.

Walk-ins and Write-ins

Walk-ins are job seekers who arrive at the HR department in search of a job; write-ins are those who send a written inquiry. Both groups normally are asked to complete an application blank to determine their interests and abilities. Us­able applications are kept in an active file until a suitable opening occurs or until an application is too old to be considered valid, usually six months.

 Employee Referrals

Employees may refer job seekers to the HR department. Employee referrals have several advantages. First, employees with hard-to-find job skills may know others who do the same work. For example, a shortage of welders on the Alaskan pipeline was partially solved by having welders ask their friends in the “lower forty-eight states” to apply for the many unfilled openings. TRW and McDonald’s pay employees a referral bonus when qualified candidates arc recommended at some locations. Second, new recruits already know some­thing about the organization from the employees who referred them. Thus, re­ferred applicants may be more strongly attracted to the organization than arc referrals casual walk-ins. Third, employees tend to refer their friends, who are likely to have similar work habits and attitudes. Even if their work values are different, these candidates may have a strong desire to work hard so that they do not em­barrass the person who recommended them.


What ads describe the job and the benefits, identify the employer, and tell those who are interested how to apply. They are the most familiar form of employ­ment advertising. For highly specialized recruits, ads may be placed in profes­sional journals or out-of-town newspapers in areas with high concentrations of the desired skills. For example, recruiters in the aerospace industry often ad­vertise in Los Angeles, St. Louis, Dallas-Fort Worth, and Seattle newspapers because those cities are major aerospace centers.

Want ads have severe limitations. They may attract thousands of job seekers for one popular job opening, or few may apply for less attractive jobs. For ex­ample, few people apply for door-to-door sales jobs if they know the product is vacuum cleaners or encyclopedias. Likewise, the ideal recruits are probably al­ready employed and not reading want ads. Finally, secret advertising for a re­cruit to replace an incumbent cannot be done with traditional want ads. These limitations are avoided through the use of blind ads. A blind ad is a want ad that does not identify the employer. Interested applicants are told to send their re­sumes to a mailbox number at the post office or to the newspaper. A resume, which is a brief summary of an applicant’s background, is then forwarded to the employer. These ads allow the opening to remain confidential, prevent countless telephone inquiries, and avoid the public relations problem of disap­pointed recruits.

State Employment Security Agencies

Every state government has a state employment security agency. Often called the unemployment office or the employment service, this agency matches job seek­ers with job openings. The agencies result from a federal and state partnership that was established in 1933. At the federal level, the U.S. Employment Service sets national guidelines. Within these uniform regulations, state agencies oper­ate more than 2400 local offices that help more than one-fifth of all unemployed workers find jobs.

 Private Placement Agencies

Private placement agencies, which exist in every major metropolitan area, arose to help employers find capable applicants. They take an employer’s re­quest for recruits and then solicit job seekers, usually through advertising or among walk-ins. Candidates are prescreened, matched with employer re­quests, and then told to report to the employer’s HR department for an inter­view. The matching process conducted by private agencies varies widely. Some placement services carefully prescreen applicants; others simply provide a stream of applicants and let the HR department do most of the screening.

Professional Search Firms

Professional search firms are much more specialized than placement agencies. Search firms usually recruit only specific types of human resources for a fee paid by the employer. For example, some search firms specialize in executive talent, while others find technical and scientific personnel. Perhaps the most signifi­cant difference between search firms and placement agencies is the approach taken. Placement agencies hope to attract applicants through advertising, but search firms actively seek out recruits among the employees of other compa­nies. Although they may advertise, search firms use the telephone as their pri­mary tool to locate and attract prospective recruits.

Educational Institutions

Many educational institutions offer current students and alumni placement as­sistance. Although some applicants sought through educational institutions are experienced, many are not. And new entrants are more likely to be swayed by the recruiter’s manner and behavior during the interview than by the attributes of the job, which appears to be the deciding factor for experienced workers.

Educational institutions also are an excellent source for hiring foreign na­tionals. Foreign students in domestic schools have the advantage of being bilin­gual and bicultural. Some foreign students desire jobs with domestic firms to gain experience or secure citizenship.

International Recruiting

Recruitment in foreign countries presents special challenges. In advanced in­dustrial nations, recruiters find many of the same channels that exist in North America. Additional help can sometimes be obtained from embassy or con­sular offices. Recruitment help from consultants or other professionals may be necessary for higher-level positions. These positions may require social acceptance, school ties, and other appropriate hallmarks of success, which may be considered more important than past experience or the other, more traditional criteria used in the home country.

In developing nations, recruiters often find that they have to develop their own network of contacts, ranging from newspaper reporters to government of­ficials in the host country. Of particular importance are cultural conflicts. His­torical animosities may exist between different factions within the country, whether different native tribes, elements of a formal caste system, or enmity by virtue of long-standing traditions.

Recruitment of employees to move internationally has many similarities with domestic efforts; unfortunately, the problems encountered by recruiters are often more difficult to resolve. Members of two-career families may be re­luctant to apply for overseas jobs. Immigration barriers, employment laws, and other roadblocks may prevent a promising recruit from a becoming a bona fideThe Selection Process

Selection activities typically follow a standard pattern, beginning with an initial screening interview and concluding with the final employment decision. The selection process typically consists of eight steps:

1)     Initial screening interview

2)     Completing the application form

3)     Employment tests

4)     Comprehensive interview

5)     Background investigation

6)     a conditional job offer

7)     Medical or physical examination and

8)     The permanent job offer.

1) Initial Screening: As a culmination of our recruiting efforts, we should be prepared to initiate a preliminary review of potentially acceptable candidates. This initial screening is, in effect, a two-step procedure: (1) the screening of inquiries and (2) the provision of screening interviews.

2. Completion of the Application Form

Once the initial screening has been completed applicants are asked to complete the organization’s application form. The amount of information required may be only the applicant’s name address, and telephone number. Some organizations, on the other hand, may request the completion of a more comprehensive employment profile. In gen­eral terms, the application form gives a job-performance-related synopsis of what applicants have been doing during their adult life, their skills, and their ac­complishment.

3. Employment Tests: Organizations historically relied to a considerable extent on intelligence, aptitude, ability, and interest tests to provide major input to the selection process. Even handwriting analysis (graphology) and honesty tests have been used in the attempt to learn more about the candidate—information that supposedly leads to more effective selection. It is estimated that more than 60 percent off all organizations use some type of employee test today. For these organizations there is recognition that scrapping employment test was equivalent to “throwing out the baby with the bath water”. They have come to recognize that some tests are quite helpful in predicting who will be successful on the job.

4. The comprehensive Interview:

The applicant may be interviewed by HRM Interviewers, senior managers within the organization, a potential supervisor, and potential colleagues of some or all of these.

The comprehensive interview is designed to prove areas that cannot be addressed easily by the application form or tests, such as assessing one’s motivation, ability to work under pressure, and ability to “fit in” with the organization. However, this information must be job related. The question asked and the topics covered should reflect the jobs description and job specification information obtain in job analysis.

5. Background Investigation:

The next step in the process is to undertake a background investigation of those applicants who appear to offer potential as employees. This can include contacting former employers to confirm the candidate’s work record and to obtain their appraisal of his or her performance, contacting other job-related and personal references, verifying the educational accomplishments shown on the application. Common sense dictates that HRM find out as much as possible about its applicants before the final hiring decision is made. Failure to do so can have a detrimental effort on the organization, both in terms of cost and morale. But getting the information may be difficult, especially when there may be a question about invading one’s privacy. In the past, many organizational policies stated that any request for information about a past employee be sent to HRM.

6. Conditional Job Offer:

If a job applicant has “passed” each step of the selection process so far, it is typically customary for a conditional job offer to be made. Conditional job offers usually are made by an HRM representative (we’ll revisit this momentarily). In essence, what the conditional job offer implies is that if everything checks out “Okay-passing a certain medical, physical, or substance abuse test-“ the conditional nature of the job offer will be removed and the offer will be permanent.

7.  Physical / Medical Examination:

The next to last step in the selection process may consist of having the applicant take a medical / physical examination. Remember, however, that in doing so a company must show that the reasoning behind this requirement is job related. Physical exams can only be used as a selection device to screen out those individuals who are unable to physically comply with the requirements of a job. For example, firefighter are require to perform a verified to activities that require a certain physical condition.

8. Job offer:

Those individuals who perform successfully in the preceding steps are now considered to be eligible to receive the employment offer. Who makes the final employment offer? The answer is, it depends. For administrative purposes, the offer typically is made by an HRM representative.  The actual hiring decision should be made by the manager in the department where the vacancy exists. While this might not be the situation in all organizations, the manager of the department should have the authority. First, the applicant will eventually work for this manager and therefore a good “fit” between boss and employee is necessary. Second, if the decision made is not correct, the hiring manager has no one else to blame. It also important to remember- as we previously mentioned in recruiting – that those finalist who don’t get hired deserve the courtesy of being notified that they didn’t get the

Organizational practices:

Practices in the Southeast Bank Limited

The set-vise rule of Southeast Bank Limited sates the recruitment, the recruitment policy of the bank. In general the board of directors determines the recruitment policy of bank from time to time. The bank advertisement of the daily newspapers to wants their requirements from verities positions. They select the qualified applicants among the candidates. The call for the written test, those candidates who are successfully completion of the written test, they are select for the viva. The minimum entry level qualification for any official position other than supportive management is a bachelor degree. The management prefers a minimum master’s degree for the appointment of probationary officers in the executive officer position. The recruitment   for entry level positions begins with a formal written test which is conducted and supervised buy the Institute of Business Administration, University of Dhaka. After successful completion of the written test, a personal interview is conduct for the successful candidates by a panel of experts comprising of renowned and prominent bankers of the country.

Concepts of Training:

Training is defined as any attempt to improve employee performance or a currently held job or one related to it. This usually means changes it is specific knowledge, skills, attitudes, or behaviors. To be effective, training should involve a learning experience, be a planned organizational activity, and be designed in response to identified needs. Ideally, training also should be designed to meet the goals of the organization while simultaneously meeting the goals of individual employees.

Concepts of Development

Development refers to leering opportunities designed to help employees grow.  Such opportunities do not have to be limited to improving employee’s performance on their current jobs. At ford, for example, a new systems analyst is required to take a course on ford standards for user manuals. The content of this training is needed to perform the systems analyst job at ford. The systems analyst, however also may enrolled in a course entitled “self Awareness” the content of which is not required on the current job.

This situation illustrates the difference between training and development.

The focus of “Development” is on the long term to help employees prepare for future work demands, while training often focuses on the immediate period to help fix any current deficits in employee’s skills. The most effective companies look at training and career development as an integral part of a “human resources development” (HRD) program carefully aligned with corporate business strategies

Training Needs:

Need for manpower training

Most of the organization prefers internal manning of positions than external hiring for obvious motivational benefits and cost effectiveness. Even ‘though training prime facie, emphasizes on increasing the performance level of an employee, a continuous training function enables the organization to develop employees for future responsible positions in the organization itself.

The needs for manpower training in an organization may be categories as follows:

1. Updating Knowledge: Technological advancement, business environmental changes and new management philosophies have now made it imperative for the organization to renew and update the knowledge and skills of the employees so that they do mil become redundant for obvious functional incompetence. The first and foremost need for manpower training therefore, is to renew and update knowledge and skills of employees to sustain their effective performance and so also to develop them for future managerial positions.

2.Avoiding Obsolescence: Recent economic liberalization programs of Government of India is necessitating Organizational restructurings, which inter alia, calls for training the employees, irrespective of their functional level, for their redeployment in restructured jobs. Therefore, the second important need for training is to avert functional obsolescence.

3.Improving Performance; Continuous training being required to renew and update knowledge and skills of employees, it makes them functionally effective. The- third need is therefore, to make employees effective in their performance through continuous training

4. Developing Human Skills: Apart from emphasizing on technical and Conceptual skills, new training programmed also emphasize on developing human skills of employees. Such human skill is necessary for effective interpersonal relations and sustaining healthy work environment. This need for training therefore also cannot be all together ignored.

5. Imparting Trade-specific Skills: In industrial employment, the convention is to recruit workers and an employee through compulsory apprenticeship training such apprenticeship training enables an organization to impart industry and trade specific skills to workers. This also, therefore, is an important need for manpower training.

6. Stabilizing the Workforce: Throughout the world the importance of training is now increasingly felt for stabilizing the workforce to withstand the technological change and for making the organization dynamic in this changed process. Management theorists now unanimously agree that it is the responsibility of the organization to train and develop their manpower as continuous process.

Methods of Training:

On-the –job Training (OJT) means having a person learn a job by actually doing it, every employee, from mailroom clerk to company president, gets on the job training when he or she joins a firm. In many firms, OJT is the only training available.

The most familiar type of on the job training is the coaching or understudy method. Here, an experienced worker or the trainee’s supervisor trains the employee. At lower levels, trains may acquire skills by observing the supervisor. But this technique is widely used at top-management level too. A potential future CEO might spend a year as assistant to the current CEO, for instance. Job rotation, in which an employee (usually a management trainee) moves from job to job at planned intervals, is another OJT technique.

There are some steps to help insured OJT Success

Step: 1 Prepare the Learner

1Put the learner at ease— relieve the tension.

2.   Explain why he or she is being taught,

3.  Create interest, encourage – encourage find out whit the learner already knows about this or other jobs.

4.  Explain the whole job and relate it to some job the worker already knows.

5.  Plane the learner is dose is the normal working position as possible.

6.  Familiarize the worker with equipment, materials, tools, and trad

Step 2: Present the Operation

1.  Explain quantity and quality requirement?

2.  Go through the job at the normal work pace.

3.  Again go through the job at a slow pace several times; explain the key points.

4.   Have the learner explain the steps is you go through the job at a slow pace,

Step: 3 Do a Tryout.

1. Have the learner go though the job several times explaining: slowly, explaining each step to you. Correct mistakes and mistakes and, if necessary, do some of the complicated steps the first few times.

2.  Run the job at the normal pace.

3.  Have, the learner do the job, gradually building up skill and speed.

4.  As soon as the learner demonstrates ability to do the job, let the work begin, but don’t abandon him or her,

Step: 4. Follow Up

1. Designate to whom the learner should go for help

2.  Gradually decrease supervision, checking work from time to time against quality and quantity standards.

3.  Correct faulty work patterns before they become a habit. Show why the learned method is superior,

4. Compliment good work; encourage the worker until he or she is able to meet the quality and quantity standard

1. Apprenticeship Training

More employers are implementing apprenticeship programs, an approach that began in the middle Ages. Apprenticeship training is a structured process which people become killed workers through a combination of classroom Instruction and on-the job training. It is widely to train individuals for many occupations. It traditionally involves having the learner/apprentice study under the tutelage of a master craftsperson.

2. Informal Learning

Employers should not underestimate the importance or value of informal training. Surveys form the American Society for Training and Development estimate that as much as 80% of what employees learn on the job they learn not through formal training programs but through informal means, including performing their jobs on a dally basis in collaboration with their colleagues.

3. Job Instruction Training

This is training through step-by-step learning. Usually steps necessary for a job are identified in order of sequence and an employee is exposed to the different steps of a job by an experienced trainer.

Managerial On-the-Job Training

On –the – job training is not just for non managers. Managerial on –the –job training methods include job rotation the coaching/understudy approach, and action learning.

1. Job Rotation:

Job rotation means moving management trainees from department to department to broaden their understanding of all parts of the business and to test their abilities. The trainee – often a resent college graduate may spend several months in each department. The person may just be an observer in each department, but more commonly gets fully involved in its operations.

2. Coaching/Understudy Approach:

Here the trainee works directly with a senior manager or with the person he or she is to replace, the latter is responsibly for the trainee’s coaching. Normally, the understudy relieves the executive of certain responsibilities, giving the trainee a chance to learn the job.

3. Action Learning:

Action learning programs give managers and others released time to work full-time on projects, analyzing and solving problems in departments other than their own. The basics of a typical action learning program include. Carefully selected teams of 5 to 25 members; assigning the teams real world business problems that extend beyond their usual areas of expertise and structured learning through coaching and feedback.

Off- the job Training Methods:


Lecturing has several advantages.  It is a quick and simple way to provide knowledge to large groups of trainees as when the sales force needs to learn the special features of a new product. You could use written materials instead, be they may require considerable more production expense and won’t encourage the give-and-take questioning that lectures do.

Here are some useful guidelines for presenting lectures.

  • Give your listeners signals to help them follow your ideas. For instance, if you have as lost of items start by saying something like? There are four reasons why the sales reports are necessary. The first …………..the second……………….
  • Don’t start out on the wrong foot. For instance, don’t open with an irrelevant joke or story or by saying something like. “I really don’t know why I was asked to speak here to day.
  • Keep your conclusions short. Just summarize your main point or points in one or two succinct sentences.
  • Be alert to your audience. Watch body language for negative signals like fidgeting and crossed arms.
  • Maintain eye contact with the trainees. At least look at each section of the audience during your presentation.
  • Make sure everyone in the room can hear. Use a mike if necessary. Repeat questions that you get from trainees before you answer.
  • Control your hands. Get in the habit of leaving them hanging naturally at your sides rather than letting them drift.
  • Talk from notes rather than from a script. Write out clear, legible notes on large index cards or on PowerPoint slides, and use these as an outline, rater than memorizing your presentation.

rogrammed Learning:

Whether the medium is a textbook, computer, or the Internet, programmed Leering (Or programmed instruction) is a step-by-step, self-leaning method that consists of there parts.

  1. Presenting questions facts or problems to the learner
  2. Allowing the person to respond
  3. Providing feedback on the accuracy of answers.

Generally, programmed learning presents facts ad follow-up questions. The learner can then respond, and subsequent frames provide feedback on the accuracy of his or hear answers. What the next question is often is often depends on the accuracy of the learner’s answer to the previous question.

Audiovisual-Based Training

Audiovisual-based training techniques like, PowerPoint’s, vide conferencing, audiotapes, and videotapes can be very effective and are widely used. The Ford Motor Company uses videos in its dealer training sessions to simulate problems and sample reactions to various customer complaints, for example.

Audiovisuals arc more expensive than conventional lectures but offer some advan­tages. Of course, they usually tend to be more interesting. In addition, consider using them in the following situations:

1.  When there is a need to illustrate how to follow a certain sequence over time, such as when teaching fax machine repair. The stop-action, instant replay, and fast- at slow-motion capabilities of audiovisuals can be useful here.

2. When there is a need to expose trainees to events not easily demonstrable in live lectures, such as a visual tour of a factory or open-heart surgery.

3. When you need organization wide training and it is too costly to move the trainers from place to place.

4.  Simulated training (occasionally called vestibule training) is a method in which trainees learn on the actual or simulated equipment they will use on the job, but are actually trained off the job.

Simulated training may take place in a separate room with the same equipment the trainees will use on the job. However, it often involves the use of equipment simulators. In pilot training, for instance, airlines use flight simulators for safety’, learning efficiency, and cost savings, including sayings on.

Case Study: Case study method helps students to learn on their own by independent thinking. A set of data or some descriptive materials are given to the participants asking them to analyze, identify the problems and also tc 5 recommend solutions for the same.

Role Playing: This training method particularly helps in learning human relations skills through practice and imbibing an insight into one’s own behaviors. Trainees of such a programmed are informed of a situation and asked to play their roles in the imaginary situation before the rest of the class. This therefore, helps in the enriching of interact ional skills of the employees.

T-Group Training: T-group is sensitivity training, and takes place under laboratory conditions and is mostly instructed and informal kind of training. The trainer in such a training programmed is catalyst. He helps the individual participants to understand how others perceive his behavior, how here acts to the behavior of others and how and when a group acts either in a negative or in a positive way.

E-learning: Training programmers delivered via intranet are now thought of as the most cost-effective route. It is not only cost effective but also caters to the real time information need of employees. However, it involves convergence of several technologies, like, hardware, software, web designing and authoring, instructional design, multimedia design, telecommunications and finally internet-intranet network management. Organization can outsource e-learning training modules at relatively cheaper rate. Even though training through e-learning is globally increasing, we do not have adequate empirical evidence to justify this.

Methods of Development:

Some development of an individual’s abilities can take place on the job. We will review several methods, three popular on-the-job techniques

1)    job rotation

2)    Assistant to position

3)    Committee assignments

And three off-the jobs methods

1)     Lecturer courses  and seminars

2)     Simulation exercise

3)     Outdoor training.

1) Job rotation:

Job rotation involves moving employees to various positions in the organization in an effort to expand their skills, knowledge, and abilities. Job rotation can be either horizontal or vertical. Vertical rotation is nothing more than promoting a worker into a new position. We will emphasize the horizontal dimension of job rotation, or what may be better understood as a short-term lateral transfer.

Job rotation represents an excellent method for broadening an individual’s exposure to company operations and for turning a specialist into a generalist. In addition to increasing the individual’s experience allowing him or her to exposure new information. It can reduce boredom and stimulate the development if new ideas. It can also provide opportunities for a more comprehensive and reliable evaluation of the employee by his or her supervisors

2) Assistant-to positions:

Employees with demonstrated potential are sometimes given the opportunity to work under a seasoned and successful manager often in different areas of the organization. Working as staff assistants or, in some cases, serving on “special board,” these individuals perform many duties under watchful eye of a supportive coach. In doing so, these employee get exposure to a wide variety of management activities and are groomed for assuming the duties of the next higher level.

3. Committee Assignment:

Committee assignments can provide an opportunity for the employee to share decision making, to learn by watching others, and to investigate specific organizational problems. When committees are of a temporary nature, they often take on task-force activities designed to develop into a particular problem, ascertain alternative solutions, and make a recommendation for implementing a solution. These temporary assignments can be both interesting and rewarding to the employee’s growth.

1) Lecture course and seminars:

Traditional forms of instruction revolved around formal lecture courses and seminars. These offered an opportunity for individuals to acquire knowledge and develop their conceptual and analytical abilities. For many organizations, they were offered in house by the organization itself, through outside vendors, or both.

Technology is allowing for significant improvements in the training field. The use of digitized computer technology, a facilitator can be in one location giving a lecture, while simultaneously being transmitted over fiber-optic cable, in real time, to several other locations.

2) Simulations:

Simulations are probably ever more popular for employee development. The more widely used simulation exercises include case studies, decision games, and role plays.

The case-study analysis approach to employee development was popularized at the HarvardGraduateSchool of business. Taken from the experiences of organization, these causes represent attempts to describe, as accurately as possible, real problem that managers have faced. Trainees study the case to determine problem, analyze causes, develop alternative solutions, select what they believe to be the best solution, and implement it. Role playing allows the participants to act out problems and to deal with real people.

3. Outdoor Training:

Outdoor training typically involves some major emotional and physical challenge. This could be white-water rafting, mountain climbing, paint-ball games, or surviving a week in the ‘jungle.’ The purpose of such training is to see how employees react to the difficulties that nature presents to them. Do the face these dangers alone? Do they “freak”? Or are they controlled and successful in achieve their goals? The reality is that today’s business environment does not permit employees “stand alone”. This has reinforced the importance of working closely with one another, building trusting relationship, and succeeding as a member of a group.

Practices in the Southeast Bank Limited

The bank arranges sufficient training and development programs for its staffs that make them competent to face modern and technological challenges. Its follows both on-the-job and off-the-job training methods. Dhaka Bank Limited believes it in letter and spirit.  As such in order to select right type of people the bank is maintaining a very transparent and neutral mould operational as regards requirements. Requirements are usually done through open invitation of applications by the advertisement in the national dallies. Candidates are requiring through stringent examinations and tests some of wish is conducted by the Institute of Business Administration of Dhaka University. Doors of appointment are kept open for the graduates/post –graduated of all disciplines from all kinds of universities vie public, private and National universities.

A good organization makes sure that it itself and the people who work for it succeed tougher, and the Human Resource Division’s prime concern is the success of the people who for the organization. Dhaka Bank Limited, Human Resource Division is in constant pursuit of providing for the optimum benefits and career support to its personnel  through scores of mechanisms it has fashioned- Dhaka Bank Limited Bank Recreation and welfare centre, Dhaka Bank Limited Foundation, the library at the training Institute , Best Performance Award and so on.

Organizational Development:

There are many ways to identify the need for an organizational change ,and to implement the change itself.One of the most widely used is organizational development (OD).Organizational development is aspecial approach to organizational change in which the employees themselves formulate the change that’s required and implement it, often with assistance of a trained consultant.particularly in large companies ,the OD process(including hiring of facilitator)is almost always handled through HR.As an approach to changing organizatons, OD has several distinguishing characteristics:

1.It usually involves action research ,which means collecting data about a group department or organization and then feeding the informatiom back to employees so they can analyze it and hypotheses about what the problem in unit might be.

2.It applies behavioural science knowledge to improve the organigations effectiveness.

3.It change the attitudes, values, and beliefs of employees so that the employees themselves can identify and implement the techment the technical,procedural, cultural, structural, or other changes needed to improve the company’s functioning.

4. It changes the ognigation in a particular direction – toward improved problem solving, responsiveness, quality of work, and effectiveness.

The number and variety of OD applications (also called OD interventions or techniques) have increased substantially over the year. Todsys , see in Table many applications are available. OD practioners have become increasingly involved not just in changing behaviors_their original area of expertise- but also in directly altering the firms structure, practices, strategies, and culture.

There are four basic categories of OD applications;

1.Human process

2. Technostructural

3. Human resource management

4. Strategic application

Action research-getting the employees themselves to collect the required data and implement the solutions-is the bassis of all four.


1.Human Process Applications:

Human process OD techniques generally aim first at improving human relations skills. The goal give employees the insight and skills required to analyze their own and others behavior more effectively, so they can then solve interpersonal and intergroup problems. These problem might includes, for instance, conflict among employees , or a lack of interdepartmental communications. Sensitivity training is perhaps the most widely used technique in this category . Team building and survey research are others.


Sensitivity , laboratory, or t-group training was one the eaeliest OD techniques, Its use has diminished, but still find today. Sensitivity training’s basic aim is to increase the participant’s insight into his or her onw hehavior and the behavior of others by encouraging an open expression of feelings in the trainer-guided t-group.Typically 10 to 15 people meet, usually away from the job , with no specific agenda.

3.Process consultation:

Instead, the focus is on the feelings and emotion of the members in the group at the meeting . the facilitator encourages participant to pottraty themselves as they are in the group rathe than interms of past behaviors or future problems.

4.Third party intervention:

It’s not surprising that 4-group training is a controversial technique. The personal nature of such training suggests that participation should be voluntary . Some view it as unethical because really consider participation “suggested” by onesuperior as strictly voluntary.

5.Team building:

OD’s distinctive emphasis on action research is quite evident in team building, which refers to a specific process for improving team effectiveness.According to expert French and Bell, the typicall team-building meeting begins with the consultant interviewing each of the group members and the leaders before the meeting.

Organizational confrontation meeting:

They are all asked what their problems are, how they think the group functions and what obstacles are keeping the themes( such as “inadequate communications”) and present themes in terms of importance and the most important ones become the agenda of the meeting. The group then explores and discusses the issues examines the underlying causes of the problems and begins devising solutions.

Technostructural interventions:

OD practitioners are also increasingly involved in changing firms structures, methods and jobs designs using an assortment of technostructural interventions. These interventions(as well as the human resource management on improving productivity and efficiency. For example, a formal structural change program, the employees collect data on the company’s existing organizational structure, they then jointy redesign and implement a new one.

Human Resource Management applications:

OD practitioners increasingly use action research to enable employees to analyze and change their firms’s personnel practices. Targets of change here might include the performance appraisal and reward systems, as well as installing diversity programs.

Strategic OD Application:

Strategic interventions are oorganizationawide OD programs aimed at achieving a fit among a firm’s strategy ,structure. Culture, and external environment . integrated strategic management is one example of how to use OD to create or change a strategy.It consist of four steps

1. Managers and employees analyze current strategy and organizational design.

2..Choose a desired strategy and organizational design .

3.Design a strategic change plan –“an action plan for moving the organization from its current strategy and organizational design to the desired future strategy and design.

4. Finally the team oversees implementing the strategic change plan, and reviewing the results to ensure that they are proceeding as planned.

Organizational practices:

Practices in the Dhaka  Bank Limited

The bank arranges sufficient training and development programs for its staffs that make them competent to face modern and technological challenges. Its follows both on-the-job and off-the-job training methods. Dhaka Bank Limited believes it in letter and spirit.  As such in order to select right type of people the bank is maintaining a very transparent and neutral mould operational as regards requirements. Requirements are usually done through open invitation of applications by the advertisement in the national dallies. Candidates are requiring through stringent examinations and tests some of wish is conducted by the Institute of Business Administration of Dhaka University. Doors of appointment are kept open for the graduates/post –graduated of all disciplines from all kinds of universities vie public, private and National universities.

A good organization makes sure that it itself and the people who work for it succeed tougher, and the Human Resource Division’s prime concern is the success of the people who for the organization. Dhaka Bank Limited, Human Resource Division is in constant pursuit of providing for the optimum benefits and career support to its personnel  through scores of mechanisms it has fashioned- Dhaka Bank Limited Bank Recreation and welfare centre, Dhaka Bank Limited Foundation, the library at the training Institute , Best Performance Award and so on.

Definition of compensation:

Compensation is the human resource management function that deals with every type of reward individuals receives in exchange fro performing organizational tasks. It is the major cost of doing business for many organizations at the start of 21st century. It is the chief reason why most individuals seek employment. It is an exchange relationship. Employees state labor and loyalty for financial and non financial compensation (pay, benefits, services, recognition, etc)

Financial compensation is either direct or indirect. Direct Financial Compensation consists of the pay an employee receives in the form of wages, salaries, bonuses, or commissions. Indirect Financial compensation, or benefit, consists of all financial rewards that are not included in direct Financial Compensation. Typical benefits include vacation, various kinds of insurance, Services like child care or elder care, and so forth.

Objective of Compensation

The objective of the compensation function is to create a system of rewards that is equitable to the employer and employee alike. The desired outcome is an employee who is attracted to the work and motivated to do a good job for the employer. Patton suggests that in compensation policy there are seven criteria for effectiveness. Compensation should be:

  1. Adequate Minimal Governmental, Union and managerial levels should be met.
  2. Equitable each person should be paid fairly in lie with has or her effort, abilities, and training.
  3. Balanced pay, benefits, and other reward should provide a reasonable total reward package.
  4. Cost – effective pay should not be excessive considering what the organization can afford to pay.
  5. Secure pay should be enough to help an employee feel secure and aid him or her in satisfying basic needs.
  6. Incentive – providing pay should motivate effective and productive work.

Types of compensation and Rewards

The most obvious reward employees get from work is pay, and we will spend-the major part of this chapter addressing pay as a reward as well as how compensation programs are established. However, rewards also include promo­tions, desirable work assignments, and a host of other less obvious payoffs—a smile, peer acceptance, or a kind word of recognition.

Types of Employee Rewards

There are several ways to classify rewards. We have selected three of the most typical dichotomies: intrinsic versus extrinsic rewards, financial versus non-financial rewards, and performance-based versus membership-based rewards. As you will see, these categories are far from being mutually exclusive, yet all share one common thread — they assist in maintaining employee commitment.

1. Intrinsic versus Extrinsic Rewards

Intrinsic rewards are the personal satisfactions one gets from the job it­self. These are self-initiated rewards, such as having pride in one’s work, having a feeling of accomplishment, or being part of a work team.  Extrinsic rewards, on the other hand, include money, promotions, and benefits. Their common thread is that they are external to the job and come from an outside source, mainly management. For example, Apple Computer gives a PC to each of its employees. After one year on the job, the PC becomes the employee’s personal property. Consequently, if an employee experiences feelings of achievement or personal growth from a job, we would label such rewards as intrinsic. If the employee receives a salary increase or a write-up in the company magazine, we would label these rewards as extrinsic.

2. Financial versus Non financial Rewards

Rewards may or may not enhance the employee’s financial well-being. If they do, they can do this directly—through for instance, wages, bonuses, or profit sharing—or indirectly—through employer-subsidized benefits such as pension plans, paid vacations, paid sick leaves, and purchase discounts.

Non financial rewards cover a smorgasbord of desirable “extras” that are po­tentially at the disposal of the organization. Their common link is that they do not increase the employee financial position. Instead of enhancing the em­ployee’s finances, non financial rewards emphasize making life on the job more attractive. The non financial rewards that we will identify represent a few of the more obvious; however, the creation of these rewards is limited only by HRM’s ingenuity and ability to “use them to motivate” desirable behavior.

The saying, “One person’s food is another person’s poison,” applies to the entire subject of rewards, but specifically to the area of non financial rewards. What one employee views as “something I’ve always wanted,” another might find relatively useless. Therefore, HRM must take great care in providing the “right” non financial reward for each person. Yet where selection has been done properly, the benefits by way of increased performance to the organization should be significant.

Some workers, for example, are very status conscious. A plush office, a car­peted floor, a large cherry desk, or signed artwork may be just the office fur­nishing that stimulates an employee toward top performance. Similarly, status-oriented employees may value an impressive job title, their own business cards, their own administrative assistant, or a well-located parking space with their name clearly painted underneath the “Reserved” sign. In another case, the em­ployee may value the opportunity to dress casually while at work, or even do a portion of one’s job at home. Irrespective of the “incentive,” these are within the organization’s discretion. And when carefully used, they may provide a stimulus for enhanced performance.

Performance-based versus Membership-Based Rewards

The rewards that the organization allocates can be said to be based on ei­ther performance or membership criteria. While HR representatives in many or­ganizations will vigorously argue that their reward system pays off for perform­ance, you should recognize that this isn’t always the case. Few organizations actually reward employees based on performance—a point we will discuss later in this chapter. Without question, the dominant basis for reward allocations in organizations is membership.

Performance-based rewards are exemplified by the use of commissions, piecework pay plans, incentive systems, group bonuses, merit pay, or other forms of pay-for-performance plans. On the other hand, membership-based rewards in­clude cost-of-living increases, benefits, and salary increases attributable to labor-market conditions, seniority or time in rank, credentials (such as a college degree or a graduate diploma), or future potential (e.g., the recent MBA out of a prestigious university). The key point here is that membership-based rewards are generally extended regardless of an individual’s, groups, or organization’s perfor­mance. The difference between the two is not always obvious. In practice, perfor­mance may be only a minor determinant of rewards, despite academic theories holding that high motivation depends on performance-based rewards.

Methods of Job Evaluation

There are four basic methods of job evaluation currently in use-, ordering, classification, factor comparison, and point method.Let’s review each of these.

Ordering Method The ordering method requires a committee—typically composed of both management and employee representatives—to arrange jobs in a simple rank order, from highest to lowest. No attempt is made to break down the jobs by specific weighted criteria. The committee members merely compare two jobs and judge which one Is more important, or more difficult to perform. Then they compare another job with the first two, and so on until all the jobs have been evaluated and ranked.

The most obvious limitation to the ordering method is its sheer inability to be managed when there are a large number of jobs. Imagine the difficulty of trying to rank hundreds or thousands of jobs in the organization! It could be im­possible to do the rankings correctly. Other drawbacks to be considered are the subjectivity of the method—there are no definite or consistent standards by which to justify the rankings—and because jobs are only ranked in terms of or­der, we have no knowledge of the distance between the ranks.

Classification Method The classification method was made popular by the U.S. Civil Service Commission, now the Office of Personnel Management (OPM). The OPM requires that classification grades be established. These classifications are created by identifying some common denominator—skills, knowledge, responsi­bilities—with the desired goal being the creation of a number of distinct classes or grades of jobs, Examples might include shop jobs, clerical jobs, sales jobs, etc., de­pending, of course, on the type of jobs the organization requires.

Once the classifications are established, they are ranked in an overall order of importance according to the criteria chosen, and each job is placed in its ap­propriate classification. This latter action is generally done by comparing each position’s job description against the classification description.

The classification method shares most of the disadvantages of the ordering approach, plus the difficulty of writing classification descriptions, judging which jobs go where, and dealing with jobs that appear to fall into more than one classification. On the plus side, the classification method has proven itself suc­cessful and viable in classifying millions of kinds and levels of jobs in the civil service.

Factor Comparison Method The factor comparison method is a sophisti­cated and quantitative ordering method. The evaluators select key jobs in the organization as standards. Those jobs chosen should be well known, with es­tablished pay rates in the community, and they should consist of a representa­tive cross section of all jobs that are being evaluated. Jobs fitting these require­ments are called benchmark jobs. Typically, fifteen to fifty key jobs are selected by the committee.

The final step in factor comparison requires the committee to compare its overall judgments and resolve any discrepancies. The system is in place when the allocations to the key jobs are clear and understood, and high agreement has been achieved in committee members’ judgments about how much of each criteria every job has. Then, the committee must slot the remaining jobs not user’ in the initial analysis.

Drawbacks to factor comparison include its complexity; its use of the same five criteria to assess all jobs, when, in fact, jobs differ across and within organi­zations; and its dependence on key jobs as anchor points. “To the extent that one or more key jobs change over time either without detection or without correction of the scale, users of the job comparison scale are basing decisions on what might be described figuratively as a badly warped ruler.” On the positive side, factor comparison requires a unique set of standard jobs for each organization, so it is a tailor-made approach. As such, it is automatically designed to meet the specific needs of each organization. Another advantage is that jobs are compared with other jobs to determine a relative value, and since relative job values are what job evaluation seeks, the method is logical.

Incentive Compensation Plans

In addition to the basic wage structure, organizations that are sincerely committed to developing a compensation system that is designed around per­formance will want to consider the use of incentive pay. Typically given in ad­dition to—rather than in place of—the basic wage, incentive plans should be viewed as an additional dimension to the wage structure we have previously described. Incentives can be paid based on individual, group, or organization-wide performance—a pay-for-performance concept.

Individual Incentives Individual incentive plans pay off for individual per­formances. During the 1990s, these plans had been the biggest trend in com­pensation administration in the United States. Popular approaches included merit pay, piecework plans, time-savings bonuses, and commissions.

While the merit pay plan is the most widely used, the best-known incentive is undoubtedly piecework. Under a straight piecework plan, the employee is typically guaranteed a minimal hourly rate. For meeting some reestablished standard output. For output over this standard, the employee earns so much for each piece produced. Differential piece-rate plans establish two rates—one up ‘to standard, and another when the employee exceeds the standard. The latter rate, of course, is higher to encourage the employee to beat the standard. Indi­vidual incentives can be based on time saved as well as output generated. At Ja­cobs Engineering Group in Pasadena, California, engineers are not given annual pay raises. Rather, based on their performance, these individuals are given an incentive bonus. For the past few years, this bonus has averaged more than 5 percent of their annual salary—greater than the cost-of-living adjustments if tied to inflation. As with piecework, the employee can expect a minimal guaran­teed hourly rate, but in this case, the bonus is achieved for doing a standard hour’s work in less than sixty minutes. Employees who an hour’s work in fifty minutes can do obtain a bonus that is some percentage (say 50 percent) of the labor saved.

Salespeople frequently work on a commission basis. Added to a lower base wage, they get an amount that represents a percentage of the sales price. On toys, for instance, it may be a hefty 25 or 30 percent: On sales of multi­million-dollar aircraft or city sewer systems, commissions are frequently per­cent or less.

Individual incentives work best where clear performance objectives can be set and where tasks are independent. If these conditions are not met, individ­ual incentives can create dysfunctional competition or encourage workers to “cut corners.” Co-workers can become the enemy, individuals can create in­flated perceptions of their own work while deflating the work of others, and the work environment may become characterized by reduced interaction and communications between employees. And if corners are cut, quality and safety may also be compromised. For example, when Monsanto tied workers’ bonuses to plant safety, covering up accidents was encouraged.

Group Incentives Each individual incentive option we described also can be used on a group basis; that is, two or more employees can be paid for their com­bined performance. When are group incentives desirable? They make the most sense where employees’ tasks are interdependent and thus require cooperation.

Plant-wide Incentives the goal of plant-wide incentives is to direct the efforts of all employees toward achieving overall organizational effectiveness. This type of incentive, like that of DuPont, produces rewards for all employees based on organization-wide cost reduction or profit sharing. Kaiser Steel, for example, developed in one of its plants a cost-reduction plan that provides monthly bonuses to employees. The amount of the bonus is determined by computing one-third of all increases in productivity attributable to cost savings as a result of technological change or increased effort. Additionally, Lincoln Electric has had a year-end bonus system for decades, which in some year has provided an annual bonus “ranging from a low of 55 percent to a high of 115 percent of annual earnings.” The Lincoln Electric plan pays off handsomely when employees beat previous years’ performance standards. Since this bonus is added to the employee’s salary, it has made the Lincoln Electric workers some of the highest-paid electrical workers in the United States.

One of the best-known organization-wide incentive systems is the Scanlon Plan. It seeks to bring about cooperation between management and employ­ees through the sharing of problems, goals, and “ideas. (It is interesting to note that many of the quality circle programs instituted in the 1980s were a direct outgrowth of the Scanlon Plan).  Under Scanlon, each department in the orga­nization has a committee composed of supervisor and employee representatives.

Another incentive plan that started in the early 1990s is called IM­PROSHARE IMPROSHARE, which is an acronym for Improving Productivity through Sharing, uses a mathematical formula for determining employees’ bonuses.

Compensation criteria`

Job Evaluation

We introduced job analysis as the process of describing the ‘duties of a job, authority relationships, skills required, conditions of work, and additional relevant information, We stated that the data generated from job analysis could be used to develop job descriptions and specifications, as well as to do job evaluations .By job evaluation, we mean using the Information In Job analysis to systematically determine the value of each job in relation to all fobs within the organization. In short, job evaluation seeks to rank all the jobs in the organization and place them in a hierarchy that will reflect the relative worth of each. It’s Important lo note mat this is a ranking of jobs, not people. Job evaluation assumes normal performance of the job by typical worker. So, in effect, the process ignores individual abilities or the performance of the jobholder.

The ranking that results from job evaluation is the means to an end, not an end in itself ft should be used to determine the organization’s pay structure Mote that we say “should”, in practice, well find that this not always the vase External labor market conditions, collective bargaining, and individual skill differences may require a compromise between the job evaluation ranking and the actual pay structure. Yet even when such compromises are necessary, job evalu­ation can provide an objective standard from which modifications can be made.

Isolating job Evaluation Criteria:

The heart of job evaluation is the determination of what criteria will be used to arrive at the ranking It is easy to say that jobs are valued and ranked by their relative job worth, but there is far more ambiguity when we attempt In state what it is that makes one job higher than neither in the job structure hier­archy. Most job-evaluation plans use responsibility, skill, effort, and working conditions as major criteria, but each of these, in turn can be broken down into more- specific terms. Skill, for example, is often measured “through the intelligence or mental requirements of the job, the knowledge required, motor-manual skills needed, and the teaming that occurs. But other criteria can have been used.

Since jobs differ, it is traditional to separate jobs into common groups. This usually means that, for example, productions clerical, sales, professional, and managerial jobs are evaluated separately, Treating like groups similarly allows for more valid rankings within categories, but sill leaves unsettled the impotence of  criteria software developer in the Development group requires more mental effort than that of a shipping supervisor, and subsequently receives a higher ranking; but it does not readily resolve whether grater mental effort is necessary for software designers than for customer service managers.

Organizational Practices:

Practices in the Dhaka Bank Limited

The Bank provides handsome direct compensation as well as indirect to its staffs. The bank has a job evaluated salary structure, which is most competitive than other banks in the country. It also provides merit pay and inactive pays i.e. Festival Bonus, yearly incentive Bonus, etc. Under indirect compensation policy the bank also facilitates medical benefits, gratuity such as Casual leave, Earned leaves, Sick leaves, Maternity leave, extra ordinary leave, Study leave and pilgrimage leave.

Although the bank provides different types of employee benefits, but they do not give group life insurance coverage which may bring extra job satisfaction.

The competent authority should extent their mercy up to four months and men are head of single parent households. So, if the bank introduces parental and Family leave benefits for its employee’s it will be really great example for other banks and organizations in the country.

Concepts of performance appraisal

Performance appraisal is the process by which organizations evaluate individual job performance. When it is done correctly, employees, their HR department, and ultimately the organization benefit by ensuring that individual efforts contribute to the strategic focus of the organization. Performances appraisals are influenced by other activities in the and in turn affect the organization’s success. Often they c way a company executes its strategy.

Why Performance appraisal

HR departments use the informal gathered through performance appraisals to evaluate the success of recruitment, selection, orientation, place­ment, training, and other activities. Although informal and ongoing appraisals on a day-to-day basis are necessary to a smooth operation, these methods are insufficient for the HR department’s needs. Formal appraisals are needed to help managers with placement, pay, and other HR decisions. In a study of 324 organizations in southern California, for example, 94 percent had a formal ap­praisal system. This survey research revealed that the major uses of appraisals were for compensation (74.9 percent), performance improvement (48.4 per­cent), feedback (40.4 percent), placement-related decisions (40.1 percent), and documentation (30.2 percent).Figure 12-1 describes these and other uses.

Yet even in otherwise well-managed organizations, appraisals are associated with problems. Supervisors and managers often view formal appraisals as un-needed. They already know how their employees are performing, so why

Uses of Performance Appraisals

•   Performance improvement. Performance feedback allows the employee, the manager, and personnel specialists to intervene with appropriate actions to improve performance.

•   Compensation adjustments. Performance evaluations help decision makers determine who should receive pay raises. Many firms grant part or all of their pay increases and bonuses on the basis of merit, which is determined mostly through performance appraisals.

• Placement decisions. Promotions, transfers, and demotions are usually based on past or anticipated performance. Often promotions are a reward for past performance.

• Development needs Training and. Poor performance may indicate a need for retraining. Likewise, good performance may indicate untapped potential that should be developed.

• Career planning and development. Performance feedback guides career decisions about specific career paths one should investigate.

• Staffing process deficiencies. Good or bad performance implies strengths or weaknesses in the personnel department’s staffing procedures.

• Informational inaccuracies. Poor performance may indicate errors in job analysis information, human resource plans, or other parts of the personnel management information system. Reliance on inaccurate information may have led to inappropriate hiring, training, or counseling decisions.

• Job-design errors. Poor performance may be a symptom of ill-conceived job designs. Appraisals help diagnose these errors.

• Equal employment opportunity. Accurate performance appraisals that actually measure job-related performance ensure that internal placement decisions are not discriminatory.

• External challenges. Sometimes performance is influenced by factors outside the work environment, such as family, financial, health, or other personal matters. If these factors are uncovered through appraisals, the human resource department may be able to provide assistance.

• Feedback to human resources. Good or bad performance throughout the organization indicates how well the human resource function is performing.

Methods of Performance appraisal:

 In this section we will look at specific ways in which HRM can actually establish performance standards and devise, instruments that can be used to measure and appraise an employee’s performance. Three different approaches exist for doing appraisals. Employees can be appraised against (1) absolute standards, (2) rela­tive standards, or (3) objectives. No one approach is always best; each has its strengths and weaknesses.

Absolute Standards

Our first group of appraisal methods uses absolute standards. This means that employees’ are compared to a standard; and their evaluation is independent of any other employee in a work group. Included in this group are the following methods-, the essay appraisal, the critical incident appraisal, the checklist, the adjective rating scale, forced choice and behaviorally anchored rating scales. Let’s look at each of these, focusing on their strengths and weaknesses

1. The Essay Appraisal Probably the simplest method of appraisal is to have the appraiser write a narrative describing an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. The strength of the es­say appraisal lies in its simplicity. It requires no complex forms or extensive train­ing to complete. The essay appraisal is also valuable in providing specific informa­tion, much of which can be easily fed back and understood by the employee.

However, inherent in this method are several weaknesses. Because the essays are unstructured, they are likely to vary widely in terms of length and content. This makes it difficult to compare individuals across the organization. And, of course, some raters are better writers than others. So a “good” or “bad” eval­uation may be determined as’ much by the rater’s writing skill as by the em­ployee’s actual level of performance. This method also provides only qualitative data. HRM decisions generally improve when useful quantitative data is ob­tained because it enables employees to be compared and ranked more objec­tively.

In spite of its inherent weaknesses, the essay appraisal is a good start. It’s also very beneficial if used in conjunction with other appraisal methods.

2. Critical Incident Appraisal Critical incident appraisal focuses the rater’s attention on those critical or key behaviors that make the difference be­tween doing a job effectively and doing it ineffectively. The appraiser writes down anecdotes describing what the employee did that was especially effective or ineffective. For example, a police sergeant might write the following critical incident about one of her officers: “Brought order to a volatile situation by calmly discussing options with an armed suspect during a hostage situation which resulted in all hostages being released, and the suspect being appre­hended without injury to any individual. Note that with this approach to appraisal, specific behaviors are cited, not vaguely defined individual traits. A be­havior-based appraisal such as this should be more valid than trait-based appraisals because it is clearly more job related. It is one thing to say that an employee is “aggressive,” “imaginative,” or “relaxed,” but that does not tell us anything about how well the job is being done. Critical incidents, with their fo­cus on behaviors, judge performance rather than personalities.

The strength of the critical incident method is that it looks at behaviors. Ad­ditionally, a list of critical incidents on a given employee provides a rich set of examples from which employees can be shown which of their behaviors are desirable and which ones call for improvement. Its drawbacks are basically that: (I) appraisers are required to regularly write these incidents down, and doing this on a daily or weekly basis for all employees is time-consuming and burden­some for supervisors; and (2) critical incidents suffer from the same comparison problem found in essays—mainly, they do not lend themselves easily to quan­tification. Therefore the comparison and ranking of employees may be difficult.

3. The Checklist Appraisal In the checklist appraisal, the evaluator uses a list of behavioral descriptions and checks off those behaviors that apply to the employee.

Once the checklist is complete, it is usually evaluated by the HRM staff, not the appraiser completing the checklist. Therefore the rater does not actually evaluate the employee’s performance; he or she merely records it. An analyst in HRM then scores the checklist, often weighing the factors in relationship to their importance to that specific job. The final evaluation can then be returned to the appraiser for discussion with the employee, or someone from HRM can provide the feedback to the employee.

The checklist appraisal reduces some bias in the evaluation process since the rater and the scorer are different: However, the rater usually can pick up the positive and negative connections in each item—so bias can still be introduced. From a cost standpoint, too, this appraisal method may be inefficient if there are a number of job categories for which an individualized checklist of items must be prepared.

4. The Adjective Rating Scale Appraisal One of the oldest and most popular methods of appraisal is the affective rating.

To use the adjective rating scale, the assessor goes down the list of factors and notes the point along the scale or continuum that best describes the em­ployee. There are typically five to ten points on the continuum. In the design of the rating scale, the challenge is to ensure that both the factors evaluated and the scale points are clearly understood and are unambiguous to the rater. Should ambiguity occur, bias is introduced.

Why are rating scales popular? Although they do not provide the depth of information that essays or critical incidents do, they are less time-consuming to develop and administer. They also provide a quantitative analysis that is useful for comparison purposes. Furthermore, in contrast to the checklist, there is more generalization of items so that comparability with other individuals in di­verse job categories is possible.

5. The Forced-Choice Appraisal Have you ever completed one of those tests that presumably gives you insights into what kind of career you should pursue? (Questions might be, for example, “Would you rather go to a party with a group of friends or attend a lecture by a well-known political figure?”) If so, then you are familiar with the forced-choice format. The forced-choice appraisal is a special type of checklist where the rater must choose. Between more statements. Each statement may be favorable or unfavorable. The appraiser’s job is to identify which statement is most (or in some cases least) descriptive of the individual being evaluated. For instance, students evaluating their college instructor might have to choose between: “(a) keeps up with the schedule iden­tified in the syllabus; (b) lectures with confidence; (c) keeps interest and atten­tion of class; (d) demonstrates how concepts are practically applied in today’s organizations; or (e) allows students the opportunity to learn concepts on their own.” All the preceding statements could be favorable, but we really don’t know. As with the checklist method, to reduce bias, the right answers are not known to the rater; someone in HUM scores the answers based on the “answer” key for the job being evaluated. This key should be validated so HRM is in a position to say that individuals with higher scores are better-performing em­ployees.

The major advantage of the forced-choice method is that, because the ap­praiser does not know the “right” answers, it reduces bias and distortion. For example, the appraiser may like a certain employee and intentionally want to give him a favorable evaluation, but this becomes difficult if one is not sure which response is most preferred. On the negative side, appraisers tend to dis­like this method; many dislike being forced to make distinctions between simi­lar-sounding statements. Raters also may become frustrated with a system in which they do not know what represents a “good” or “poor” answer. Conse­quently, they may try to second-guess the scoring key in order to get the formal appraisal to align with their intuitive appraisal

6. The Behaviorally Anchored Rating Scales An approach that has received considerable attention by academics in past years involves” behaviorally an­chored rating scales (BARS). These scales combine major elements from the critical incident and adjective rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behavior on the given job rather than general descriptions or traits. The enthusiasm surrounding BARS grew from the belief that the use of specific be­haviors, derived for each job, should produce relatively error-free and reliable ratings. Although this promise has not teen fulfilled, it has been argued that this may be due partly to departures from careful methodology in the develop­ment of the specific scales themselves rather than to inadequacies in the con­cept. BARS, too, have also been found to be very time-consuming.

Behaviorally anchored rating scales specify definite, observable, and mea­surable job behavior. Examples of job-related behavior and performance dimen­sions are generated by asking participants to give specific illustrations of effec­tive and effective behavior regarding each performance dimension; these behavioral examples are then translated into appropriate performance dimen­sions. Those that are sorted into the dimension for which they were generated are retained. The final group of behavior incidents are then numerically scaled to a level of performance that each is perceived to represent. The identified incidents which have high rater agreement on performance effectiveness are retained for use as anchors on the performance dimension. The results of these processes are behavioral descriptions, such as anticipates, plans, executes, solves immediate problems, carries out orders, or handles emergency situa­tion?

The research on BARS indicates that while it is far from perfect, it does tend to reduce rating errors. Possibly its major advantage stems from the dimensions generated, rather than from any particular superiority of behavior over trait an­chors. The process of developing the behavioral scales is valuable for clarifying to both the employee and the rater which behaviors represent good per­formance and which don’t. Unfortunately, it, too, suffers from the distortions inherent in most rating methods

#Relative Standards

In the second general category of appraisal methods, individuals are com­pared against other individuals. These methods are relative standards rather than absolute measuring devices. The most popular of the relative methods are group order ranking, individual ranking, and paired comparison.

1. Group Order Ranking Group order ranking requires the evaluator to place employees into a particular classification, such as “top 20 percent.” This method, for instance, is often used in recommending students to graduate schools. Evaluators are asked to rank the student in the top 5 percent, the next 5 percent, the next 15 percent, and so forth. But when used by appraisers to evaluate employees, raters deal with all their employees in their area. So, for example, if a rater has twenty employees, only four can be in the top fifth; and, of course, four also must be relegated to the bottom fifth.

The advantage of this group ordering is that it prevents raters from inflating their evaluations so everyone looks good or from forcing the evaluations so everyone is rated near the average—outcomes that are not unusual with the ad­jective rating scale. The main disadvantages surface, however, when the number of employees being compared is small. At the extreme, if the evaluator is looking at only four employees, it is quite possible that all may be excellent, yet the eval­uator may be forced to rank them into top quarter, second quarter, third quarter, and low quarter! Theoretically, as the sample size increases, the validity of relative scores as an accurate measure increases; but occasionally the technique is imple­mented with a small group, utilizing assumptions that apply to large groups.

Another disadvantage, which plagues all relative measures, is the “zero-sum game” consideration. This means that any change must add up to zero. For ex­ample, if there are twelve employees in a department performing at different levels of effectiveness, by definition, three are in the top quarter, three are in the second quarter, and so forth. The sixth-best employee, for instance, would be in the second quartile. Ironically, if two of the workers in the third or fourth quartiles leave the department and are not replaced, then our sixth-best em­ployee now falls into the third quarter.

2. Individual Ranking The individual ranking method requires the evaluator merely to list the employees in order from highest to lowest. In this process, only one employee can be rated “best.'” If the evaluator is required to appraise thirty individuals, this method assumes that the difference between the first and second employee is the same as that between the twenty-first and the twenty-second. Even though some of these employees may be closely grouped, this method typically allows for no ties. In terms of advantages and disadvantages, the individual ranking method carries the same pluses and minuses as group or­der ranking. For example, individual ranking may be more manageable in a de­partment of six employees than in one where a supervisor must evaluate the 19 employees that report to her.

3. Paired Comparison The paired comparison method is calculated by taking the total of [N(N1)1/2 comparisons. A score is obtained for each employee by simply counting the number of pairs in which the individual is the preferred member. It ranks each individual in relationship to all others on a one-on-one basis. If ten employees are being evaluated, the first person is compared, one by one, with each of the other nine, and the number of times this person is pre­ferred in any of the nine pairs is tabulated. Each of the remaining nine persons, in turn, is compared in the same way, and a ranking is formed by the greatest number of preferred “victories.” This method ensures that each employee is compared against every other, but the method can become unwieldy when large numbers of employees are being compared.


The third approach to appraisal makes use of objectives. Employees are evaluated on how well they accomplished a specific set of objectives that have been determined to be critical in the successful completion of their job. This ap­proach is frequently referred to as management by objectives (MBO). Man­agement by objectives is a process that converts organizational .objectives into individual objectives. It consists of four steps: (1) goal setting, (2) action plan­ning, (3) self-control, and (4) periodic reviews.

In goal setting, the organization’s overall objectives are used as guidelines from which departmental and individual objectives are set. At the individual level, the supervisor and employee jointly identify those goals that are critical to fulfilling the requirements of the job as determined by job analysis? These goals are agreed on and then become the standards by which the employee’s suits will be evaluated.

In action planning, the means are determined for achieving the ends established. In goal setting; that is, realistic plans are developed to attain the object. This step includes identifying the activities necessary to accomplish the objective, establishing the critical relationship between these activities, estimat­ing the time requirements for each activity, and determining the resources re­quired to complete each activity.

Self-control refers to the systematic monitoring and measuring of perform­ance—ideally, by having the employee review his or her own performance. In­herent in allowing employees to control their own performance is a positive image of human nature. The MBO philosophy is built on the assumption that employees can be responsible, can exercise self-direction, and do not require external controls and threats of punishment to motivate them to work toward their objectives.

Finally, with periodic progress reviews, corrective action is initiated when behavior deviates from the standards established in the goal-setting phase. Again, consistent with the MBO philosophy, these supervisor-employee reviews are conducted in a constructive rather than punitive manner. Reviews are not meant to degrade the employee but to aid in future performance. These reviews should take place at least two or three times a year. What will these objectives look like? It is important that they be tangible, verifiable, and measurable. This means that, wherever possible, we should avoid qualitative objectives and sub­stitute quantifiable statements. For example, a quantitative objective might be “to cut, each day, 3,500 yards of cable to standard five-foot lengths, with a max­imum scrap of 50 yards,” or “to prepare, process, and transfer to the treasurer’s office, all accounts payable vouchers within three working days from the re­ceipt of the invoice.”

MBO’s advantages lie in its results-oriented emphasis. It assists the planning and control functions and provides motivation, as well as being an approach to performance appraisal. That’s because employees know exactly what is ex­pected of them and how they will be evaluated. Moreover, employees under­stand that their evaluation will be based on the success -in achieving mutually agreed on objectives. Finally, it’s expected that employees should have a greater commitment to the objectives they have participated in developing than to those unilaterally set by their boss.

The major disadvantage of MBO is that it is unlikely to be effective in an environment where management has little trust in its employees. This type of environment could be one where management makes decisions autocratically and relies heavily on external controls to direct employee behavior. The amount of time needed to implement and maintain an MBO process may also cause problems. Many activities must occur to set it up, such as meetings between su­pervisors and employees to set and monitor objectives. These meetings can be very time-consuming. Additionally, it may be difficult to measure whether the MBO activities are being carried out properly. The difficulty involved in prop­erly appraising the supervisor’s efforts and performance as they carry out their MBO activities may cause it to fail.

Organizational practices

Practices in the Southeast Bank Limited

Performance evaluations are an integral part of most organizations. Properly developed and implemented, the performance appraisal process can help an organization achieve its goals by developing productive performance. Southeast Bank Limited evaluates their employee’s performance properly.

To evaluate employee performance, Southeast Bank Limited follows developmental purpose that stimulates growth of the employee’s both in their present and their jobs. On the basis of employee performance the bank arrange the training and development programs, poor performance may indicate a need for retaining, good performance may indicate untapped potential that should developed.

Southeast Bank Limited follows equal employment opportunities, accurate performance appraisal that accurately measure job-related performance ensure that internal placement decisions are not discriminatory.

Southeast Bank Limited provides performance evaluations that help decision making. The bank grants part or all of their pay increases and bonus on the     basis of merit.

The bank provides promotions, transfer and demotions that are usually based on past or anticipated performance. To motivated employee’s performance the bank gives their employee’s increment.


Southeast Bank has converted all of their system and policy of traditional banking to Islamic Banking. I think which a very practical and bold decision is.  There are lots of local and foreign banks in Bangladesh. In this competitive market Southeast Bank has to compete not only the other commercial banks but also with the public bank. Southeast Bank is more capable of contributing towards economic development as compared with other bank. Southeast Bank Ltd. Invested more funds in export and import business. It is obvious that the right thinking  of this bank including  establishing  a successful network over the country and increasing resources will be able to play a considerable role in the portfolio of development. Success in the banking business largely depends on effective leading. Less the amount of loan losses, the more the income will be form credit operations the more will be profit of the Southeast Bank Limited and here lays the success of credit financing.

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