HRM Practices in Microcredit Sector of Grameen Bank

Basic purpose of this report is to analysis HRM Practices in Micro credit Sector of Bangladesh, here focus on Grameen Bank Limited. Other objectives are identify the various avenues for improving the HRM policies and analysis the management ability of Grameen Bank. Finally discuss strategies to improve the HRM policies of Grameen Bank and draw some recommendations to improve the HRM policies of Grameen Bank.

Background of HRM:

Human Resource Management is defined as the people who staff and manage organization. It comprises of the functions and principles that are applied to retaining, training, developing, and compensating the employees in organization. It is also applicable to business organizations, such as acting, news presenters and Models etc. Human Resource Management is defined as the set of activities, programs, and functions that are designed to maximize both organizational as well as employee effectiveness. Scope of HRM without a doubt is vast. All the activities of employee, from the time of his entry into an organization until he leaves, come under the horizon of HRM. The divisions included in HRM are Recruitment, Payroll, Performance Management, Training and Development, Retention, Employee Relation, etc.

A human resources management (HRM) professional is responsible for successfully acquiring, developing, motivating, and retaining employees. That is, they are on the “people” side of business operations, and because people do the work of organizations, a company’s success rests heavily on the quality of its HRM. An HRM professional is a full business partner who adds value to business decisions and aligns HR practices with those decisions. The work calls on you to know about compensation and benefits, labor relations laws, how to forecast working needs, organizational learning, and organizational change. Students’ specialty courses include “Competitive HRM Practices,” “Negotiations,” and “Cultural Aspects of International Business.” They also select an honors seminar in “Management of Innovation.”  In the classroom and on co-op, students gain the acting base of knowledge and the business expertise that’s needed as an HRM professional. Human resource management is an effective tool for students interested in helping businesses succeed in a changeable personnel environment. This guide is based on Human Resource Management in a Business Context, and includes links to extra articles, notes, tips and exercises. It introduces you to the essential elements of HRM, its origins and applications. HRM is viewed as an all-embracing term describing a number of distinctive approaches to people management. They help you to understand and evaluate the different and sometimes ambiguous views of human resource management by investigating its origins, explanatory models, technology and practice.

Human resource (or personnel) management has in the sense of getting things through people. It’s an essential part of every manager’s responsibilities, but many organizations find it advantageous to establish a specialist division to provide an expert service dedicated to ensuring that the human resource function is performed efficiently. “People are our most valuable asset” is a cliché which no member of any senior management team would disagree with. Yet, the reality for many organizations is that their people remain

  • under valued
  • under trained
  • under utilized
  • poorly motivated, and consequently
  • perform well below their true capability

The rate of change facing organizations has never been greater and organizations must absorb and manage change at a much faster rate than in the past. In order to implement a successful business strategy to face this challenge, organizations, large or small, must ensure that they have the right people capable of delivering the strategy. The market place for talented, skilled people is competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes time to develop ‘cultural awareness’, product/ process/ organization knowledge and experience for new staff members. As organizations vary in size, aims, functions, complexity, construction, the physical nature of their product, and appeal as employers, so do the contributions of human resource management. But, in most the ultimate aim of the function is to: “ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs”, that is, neither overstaffed nor understaffed in total or in respect of any one discipline or work grade. These issues motivate a well thought out human resource management strategy, with the precision and detail of say a marketing strategy. Failure in not having a carefully crafted human resources management strategy, can and probably will lead to failures in the business process itself.


Scope and Objectives of the Study

As a business expectative in future, I should have to gather experience beside our survey. I should not concern our lesson only in classroom but implement it in practical life that will help me in my future life. A clear objective help in preparation of well decorated report in which other take the right type of decision. So I identifying objectives is very much important. Our purpose of preparing the report is:

  • To know the human resource management (HRM) practice of Grameen
  • To identify the various avenues for improving the HRM policies of Grameen Bank
  • To know about the management ability of Grameen

Suggesting strategies to improve the HRM policies of Grameen Bank. This study covers the HRM policies of Grameen Bank along with some recommendations to improve the HRM policies of Grameen Bank.



A sample survey was conducted to collect primary data using two pre-designed survey instruments from concerned groups following an appropriate sample design. In view of the complexities involved in generating quantitative data for assessing the real impact, qualitative data were also collected using Focus Group Discussions (FGDs). In the context of the unique features of the area an attempt was made to identify the strengths, weaknesses, opportunities and threats of the private HRM sector.

Data Collection:

This study is mainly based on secondary data available from the various divisions and departments of Grameen Bank, in addition to these other necessary information have been collected from the daily news papers, relevant journals, annual reports of the Grameen bank, website and publications of other relevant institutions have also been taken into consideration.

Primary sources of data:

  • Face to face conversation with the Grameen Bank administrative dept. and International depts. Officers & staffs.
  • Conversation with the clients.
  • Different’ manuals of Grameen

Secondary sources of data:

  • Procedure manual published by the Grameen
  • Files and documents of the branch.
  • Annual report of Grameen
  • Unpublished data.
  • Different text books.
  • Web sites.


An Overview on Micro credit

What is Microcredit? 

Much of the current interest in microcredit stems from the Microcredit Summit (2-4 February 1997), and the activities that went into organizing the event. The definition of microcredit that was adopted there was:
Microcredit: programmers extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families.

Definitions deffer, of course, from country to country. Some of the defining criteria used include- size – loans are micro, or very small in size target users – microenterpreneurs and low-income households utilization – the use of funds – for income generation, and enterprise development, but also for community use (health/education) etc. terms and conditions – most terms and conditions for microcredit loans are flexible and easy to understand, and suited to the local conditions of the community.

Three C’s of Credit 

Character: means how a person has handled past debt obligations: Form credit history and personal background, honesty and reliability of the borrower to pay credit debts are determined.

Capacity: means how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment.

Capital: means current available assets of the borrower, such as real estate, savings or investment that could be used to repay debt if income should be unavailable.

General features of Grameencredit are:

a) It promotes credit as a human right.

b) Its mission is to help the poor families to help themselves to overcome poverty. It is targeted to the poor, particularly poor women.

c) Most distinctive feature of Grameencredit is that it is not based on any collateral or legally enforceable contracts. It is based on “trust”, not on legal procedures and system.

d) It is offered for creating self-employment for income-generating activities and housing for the poor, as opposed to consumption.

e) It was initiated as a challenge to the conventional banking which rejected the poor by classifying them to be “not creditworthy”. As a result it rejected the basic methodology of the conventional banking and created its own methodology.

f) It provides service at the door-step of the poor based on the principle that the people should not go to the bank, bank should go to the people.

g) In order to obtain loans a borrower must join a group of borrowers.

h) Loans can be received in a continuous sequence. New loan becomes available to a borrower if her previous loan is repaid.

i) All loans are to be paid back in installments (weekly, or bi-weekly).

j) Simultaneously more than one loan can be received by a borrower.

k) It comes with both obligatory and voluntary savings programmes for the borrowers.


How microfinance works:

The most common microfinance product is a microcredit loan — usually less than $100. These tiny loans are enough for hardworking micro-entrepreneurs to start or expand small businesses such as weaving baskets, raising chickens, or buying wholesale products to sell in a market. Income from these businesses provides better food, housing, health care and education for entire families, and most important, additional income provides hope for a better future.

In addition, the poor need a secure place to save their money and access to insurance for their homes, businesses and health. Microfinance institutions (MFIs) are now innovating to help meet these needs, empowering the world’s Poor to improve their own lives.

The global repayment rate for microcredit loans is higher than 95 percent, which allows MFIs to re-lend these funds to even more clients. By giving the world’s poor a hand up, not a handout, microfinance can help break the cycle of poverty in as little as a single generation.


Target group for Grameen microcredit:

Precise definition of the target group

  • definition of Grameen target group: the bottom half of the population living below the International Poverty Line of US$1 per day
  • 9% of the rural population in Bangladesh lives below the International Poverty Line
  • Precise criteria specification of the target group

specification of Grameen target group

  • less than 50 decimals (0.5 acres) of medium-level land
  • total assets of market value less than one acre of medium-level land
  • house-valuation index

Lifetime membership

  • Grameen is an ongoing concern and thus membership is retained by members who escape poverty and the target group specified above



An Overview On Grameen Bank

Objectives Of Grameen Bank

  • To extend banking facilities to the poor and thus provide them with access to credit and economic opportunities
  • To eliminate the exploitation of the poor by the moneylenders and landowners
  • To create self-employment opportunities in response to the scarcity of wage employment and the underutilization of abundant labour resources

To break the vicious cycle of poverty

  • low income leads to low savings; low savings causes low investment; and, in turn, low investment leads to low income, thus perpetuating the vicious cycle of poverty
  • the cycle may be broken by an income-generating investment

To empower and unify scattered, marginalized and voiceless people

  • enhance the political consciousness and participation of members
  • provide a network of social support for members


Organizational Structure:

1)  Operational Structure


  • 40 ZONES, consisting of 5-10 Area Offices
    • 263 AREAS, consisting of 8-12 Branch Offices
      • 2583 BRANCHES, consisting of 50-65 centers
        • 87,000 CENTERS, consisting of 6-8 groups
          • 674,117 GROUPS of 5 members
  • The above structure is flexible and the organization is built upwards from the level of the branch according to the demand for its services (i.e. Zones, Areas and Branches vary in size)
  • Pilot projects and experimentation dictate the organizational structure and its evolution


Grameen Bank Board of Directors:

The Grameen Bank Board of Directors is composed of 13 members

  • 9 are elected among the members of the bank
  • 3 are nominated by the Ministry of Finance, Government of Bangladesh
  • the Managing Director of Grameen Bank is an ex-officio member of the Board of Directors

Election procedure of the 9 elected members of the Board of Directors

  • the Center Chiefs of each Branch elect a Branch Representative among themselves
  • the Branch Representatives of each Area elect an Area Representative among themselves
  • the Area Representatives of each Electoral Zone elect a Zonal Representative among themselves
  • each Zonal Representative holds a seat on the Board of Directors

The Board of Directors meets at least twice per year at the Head Office


Grameen Bank at a Glance

Nobel Peace Prize, 2006

October 13, 2006 was the happiest day for Bangladesh. It was a great moment for the whole nation. Announcement came on that day that Grameen Bank and I received the Nobel Peace Prize, 2006. It was a sudden explosion of pride and joy for every Bangladeshi. All Bangladeshi’s felt as if each of them received the Nobel Peace Prize. We were happy that the world has given recognition through this prize, that poverty is a threat to peace. Grameen Bank, and the concept and methodology of micro-credit that it has elaborated through its 30 years of work, have contributed to enhancing the chances of peace by reducing poverty. Bangladesh is happy that it could contribute to the world a concept and an institution which can help bring peace to the world. Following is a brief introduction to Grameen Bank.


Owned by the Poor

Grameen Bank Project was born in the village of Jobra, Bangladesh, in 1976. In 1983 it was transformed into a formal bank under a special law passed for its creation. It is owned by the poor borrowers of the bank who are mostly women. It works exclusively for them. Borrowers of Grameen Bank at present own 95 percent of the total equity of the bank. Remaining 5 per cent is owned by the government.

No Collateral, No Legal Instrument, No Group-Guarantee or Joint Liability

Grameen Bank does not require any collateral against its micro-loans. Since the bank does not wish to take any borrower to the court of law in case of non-repayment, it does not require the borrowers to sign any legal instrument. Although each borrower must belong to a five-member group, the group is not required to give any guarantee for a loan to its member. Repayment responsibility solely rests on the individual borrower, while the group and the centre oversee that everyone behaves in a responsible way and none gets into repayment problem. There is no form of joint liability, i.e. group members are not responsible to pay on behalf of a defaulting member.

97 per cent Women

Total number of borrowers is 8.35 million, 96 per cent of them are women.


Grameen Bank has 2,565 branches. It works in 81,379 villages. Total staff is 22,124

Over Tk 684 billion disbursed

Total amount of loan disbursed by Grameen Bank, since inception, is Tk 684.13 billion (US $ 11.35 billion). Out of this, Tk 610.81 billion (US $ 10.11 billion) has been repaid. Current amount of outstanding loans stands at TK 73.32 billion ( US $ 968.31 million). During the past 12 months (from November’10 to October’11) Grameen Bank disbursed Tk. 107.30 billion (US $ 1480.53 million). Monthly average loan disbursement over the past 12 month was Tk 8.94 billion (US $ 123.38 million).

Projected disbursement for year 2011 is Tk 110.00 billion (US$ 1557.63 million), i.e. monthly disbursement of Tk 9.17 billion (US $ 129.80 million). End of the year outstanding loan is projected to be at Tk. 78.00 billion (US $ 1105 million).

Recovery Rate Over 97 per cent

Loan recovery rate is 96.67 per cent.

100 per cent Loans Financed From Bank’s Deposits

Grameen Bank finances 100 per cent of its outstanding loan from its deposits. Over 56 per cent of its deposits come from bank’s own borrowers. Deposits amount to 145 per cent of the outstanding loans. If we combine both deposits and own resources it becomes 160 per cent of loans outstanding.

Borrower-Deposits Keep Growing

Besides building financial strength of the poor women by encouraging them to build up significant amount of personal savings, borrower deposit is also a very important element in Grameen Bank. Forty-two per cent of the branches have borrower deposits equal to 75 per cent or more of outstanding loans of the branches.
One-fifth of the branches have more borrower-deposits than the amount of loans outstanding. In some branches borrower-deposits are as high as 50 per cent above the outstanding loans.
In eight zones, out of forty, borrower deposits are equal or more than the outstanding loans in zones.

No Donor Money, No Loans

In 1995, GB decided not to receive any more donor funds. Since then, it has not requested any fresh funds from donors. Last installment of donor fund, which was in the pipeline, was received in 1998. GB does not see any need to take any donor money or even take loans from local or external sources in future. GB’s growing amount of deposits will be more than enough to run and expand its credit programme and repay its existing loans.

Earns Profit

Ever since Grameen Bank came into being, it has made profit every year except in 1983, 1991, and 1992. It has published its audited balance-sheet every year, audited by two internationally reputed audit firms of the country. All these reports are available on CD, and some on our web-site :

Revenue and Expenditure

Total revenue generated by Grameen Bank in 2010 was Tk 17.74 billion (US $ 252.05 million). Total expenditure was Tk 16.98 billion (US $ 241.29 million). Interest payment on deposits of Tk 9.23 billion (US $ 131.09 million) was the largest component of expenditure (54 per cent). Expenditure on salary, allowances, pension benefits amounted to TK. 4.64 billion (US $ 65.92 million), which was the second largest component of the total expenditure (27 per cent). Grameen Bank made a profit of Tk 757.24 million (US $ 10.76 million) in 2010.

30% Dividend for 2010

Grameen Bank has declared 30% cash dividend for the year 2010. This is the highest cash dividend declared by any bank in Bangladesh in 2010.Highest record of dividend declared by Grameen Bank was in 2006.It was 100%.The bank has also created a Dividend Equalization Fund to ensure distribution of dividends without much fluctuation in successive years .Receiving of dividends each year greatly inspires our shareholders, 97% of whom are our borrowers.

Low Interest Rates

Government of Bangladesh has fixed interest rate for government-run microcredit programmes at 11 per cent at flat rate. It amounts to about 22 per cent at declining basis. Grameen Bank’s interest rate is lower than government rate.

Recently MRA has fixed the maximum interest rate for microcredit at 27% on declining balance method and instructed the NGO-MFIs to implement this capped interest rate within June 2011.MRA found in a recent survey the effective interest rate of NGO-MFIs on General Loan ranges from 25% to 33% and the modal value is 29%.On the contrary Grameen Bank’s highest interest rate is 20%.

Microfinance Transparency an internationally reputed pricing certification agency also verified

The pricing of Grameen Bank loan products and found that GB actually charges the same interest as it publicly claims.

There are four interest rates for loans from Grameen Bank : 20% for income generating loans, 8% for housingloans, 5% for student loans, and 0% (interest-free) loans for Struggling Members (beggars). All interests are simple interest, calculated on declining balance method. This means, if a borrower takes an income-generating loan of say, Tk 1,000, and pays back the entire amount within a year in weekly instalments, she’ll pay a total amount of Tk 1,100, i.e. Tk 1,000 as principal, plus Tk 100 as interest for the year, equivalent to 10% flat rate.

Deposit Rates

Grameen Bank offers very attractive rates for deposits. Minimum interest offered is 8.5 per cent. Maximum rate is 12 per cent.


Difference between Grameen Bank and Commercial Bank.

1) No Collateral

GB does not require any collateral against its micro-loans. Commercial banking is based on collateral, the principle that the more you have, the more you get. Grameen methodology is not based on assessing the material possession of a person. While commercial banks look at what has already been acquired by a person, Grameen looks at the potential that is waiting to be unleashed in a person.

2) No Legal Instrument

Since the Grameen does not wish to take any borrower to the court of law in case of non-repayment, it does not require the borrowers to sign any legal instrument. There is no stipulation that a client will be taken to the court of law to recover the loan, unlike in the conventional system. Commercial banks go into punishment mode when a borrower is taking more time in repaying the loan than it was agreed upon. Grameen Bank allows such borrowers to reschedule their loans without making them feel that they have done anything wrong.

3) Branches in the Rural Area

‘Grameen’ means “rural” or “village” in Bangla. Grameen Bank branches are located inthe rural area, unlike the other commercial bank which tries to locate themselves as close as possible to the business districts and urban centers. First principle of Grameen is that the clients should not go to the bank, it is the bank which should go to the people instead. Grameen Bank has 2,539 branches, works in 83,566 villages with 24,240 staff.

4) Low Interest Rates

Government of Bangladesh has fixed interest rate for government-run microcredit programmes at 11% at flat rate. It amounts to about 22% at declining basis. Grameen’s interest rate is lower than government rate. There are four interest rates for loans from GB : 20% for income generating loans(so-called “Basic Loan”), 8% for housing loans, 5% for student loans, and interest-free loans for beggars. All interests are simple interest, calculated on declining balance method. If a borrower takes a basic loan, and pays back the entire amount within a year in weekly installments, borrower will pay a total amount of principle, and equivalent to 10% interest for the year.


HRM Practices In  Grameen Bank

Human Resource Department

To manage and effective supervision of huge number of employees there has no a separate department namely Human Resource Department for the purpose of well management of Human Resources as well as proper monitoring. Grameem Bank has various Departments. They are as follows:

  • Administration Department
  • Training Department
  • International Program Department
  • Accounts & Finance Department
  • Service Department
  • Establishment Department
  • Monitoring & Evaluation Department
  • Audit Department

Human resource planning

Human resource planning is the process of estimating human resource needs for achieving human resource and organizational goals. It is the process through which organizational goals are translated into objective. At Grameem Bank, they believe that their Human Resources give the company a significant competitive edge in terms of knowledge and experiences.

Grameen Bank has an administrative Department. Grameen Bank is one of the biggest employers in Bangladesh. There are total 25,000 employees in grameen Bank. For the employees there is systematic in house training in home and abroad. The effective working days of this organization is 5 days per week and each employee will work 8 hours per day.  For festival leave, usually they will get the vacation of 7 days.

Grameem Bank usually paid their salaries to employees within 7 days of the next month. They try maintaining to continuous development of the human resource through appropriate training and motivation.



HR Practices of Grameen Bank

  • Recruitment
  • Training
  • Employee relation
  • Job analysis
  • Job design
  • Selection
  • Performance Management
  • Development
  • Incentives
  • Benefits

Recruitment and Selection process in Grameen Bank

Recruitment is the process through which the organization seeks applicants for potential employment. Selection refers to the process by which it attempts to identify applicants with the necessary knowledge, skills, abilities and other characteristics that will help the bank achieve its goals, banks engaging in different strategies need different types and numbers of employees. The strategy a company is pursuing will have a direct impact on the types of employees that it seeks to recruit and selection.

Recruitment Philosophy

Grameen Bank commits to promoting best employment equality practice in its efforts to eliminate discrimination and create working environments where are treated fairly and with respect. No written document is maintained its recruitment and selection philosophy is concerned. However the Company believes:

  • All people should have an equal chance to apply for and be considered for jobs;
  • Harassment, bullying and discrimination are not acceptable; and,
  • Comply fully with and implement legal requirements and employment guidance;
  • Ensure all employees are aware of the Company’s Employment Equality Policy Statement. through training and guidance;
  • Create working environments that promote fair and equal opportunities;
  • Develop, implement and publish plans for employment equality;
  • Monitor the existing workforce and job applicants to see if the policy is working and take action to deal with under representation;
  • Regularly monitor and review all employment procedures and make changes to them where they are found to be discriminatory;
  • The Company’s Recruitment Complaints procedure provides one with the right to redress where he or she feel that he or she have been treated unfairly or discriminated against the recruitment arid selection process.
  • Compliance to have strict rules to ensure that the recruitment decisions are based on merit and the aim is to ensure that everyone has an equal chance to apply and be considered for jobs.

Job Analysis

A job analysis provides a list of the personal attributes required to work effectively in the role. This list of attributes is identified first by breaking down a person’s job into logical parts. Next, each job task is analyzed according to the knowledge, skills, abilities and attitudes required to perform the job: correctly.

Source of recruitment

There are two kinds of source Grameen Bank uses for recruitment .They are

  • External source
  • Internal source.

We try to discuss all relative sources which are used for recruitment in Grameen Bank.

Internal source

Grameen Bank thinks that current employees are a major source of recruits for all but entry-level positions. Whether for promotions or for ‘Lateral’ job transfers, internal candidates already know the informal organization and have detailed information about its formal policies and procedures. Promotions and transfer are typically decided by operating managers with little involvement by Administrative department.

Job-posting programs

Administration departments become involved when internal job openings are publicized to employees through job positioning programs, which informs employees about opening and required qualifications and invite qualify employees to apply. The notices usually are posted on bank bulletin boards. Qualification and other facts typically are drawn from the job analysis information. The purpose of job posting is to encourage employees to seek promotion and transfers the help the Administration department fill internal opening and meet employee’s personal objectives. Not all jobs openings are posted .Besides entry level positions, senior management and top stuff positions may be filled by merit or with external recruiting. Job posting is most common for lower level clerical, technical and supervisory positions.

Departing Employees

An often overlooked source of recruiters consists of departing employees. Many employees leave because they can no longer work the traditional 40 hours work week .School, child care needs and other commitments are the common reason. 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 skill and training. Even if part-time work is not a solution, a temporary leave of absence may satisfy the employee and some future recruiting need of the employer.

Walk-ins and Write-ins:

Walk-ins are some seekers who arrived at the Administration department of Grameen Bank in  search of a job; Write-ins are those who send a written enquire .both groups normally are ask to complete and application blank to determine their interest and abilities. Usable application is 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 Administration department. Employee referrals have several advantages .Employees with hard –to –find job skill may no others who do the same work. Employee’s referrals are excellent and legal recruitment technique, but they tend to maintain the status quo of the work force in term of raise, religions, sex and other characteristics, possibly leading to charges of discrimination.


  • Morale of promote
  • Better assessment of the abilities
  • Lower cost for some jobs
  • Motivator for the good performance
  • Causes a succession of the promotions
  • Need to hire only at the entry level


  • Possible morale problems of those not promoted
  • “Political” infighting for the promotions
  • Talent pool within the organization might stagnate, so the need to bring in fresh flow of ideas & opinions

External source

When job opening cannot be filled internally, the Administration department of Grameen Bank must look outside the organization for applicants. We discuss all the external source of recruitment at bellow:


Want ads describe the job and the benefits, identify the employer, and tell those who are interested how to apply .They are most familiar form of employment advertising .for highly specialist requites, ads may be placed in professional journal or out of town newspaper in areas with high concentration of the desired skills

Now today nobody thinks anything without internet. So Grameen Bank give their advertise at internet.

www. Grameen .com


  • New “Blood” brings new perspectives
  • Cheaper and faster than training professionals
  • Less groups of the political supporters in the organization already
  • May bring new industry Insights


  • May not select someone who will “fit” the job or the organization
  • May cause the morale problems for the internal candidates not selected
  • Longer “ adjustment” or orientation time


Selection Parameters

The job constructs (dimensions) and the sub-dimensions, against which applicants are evaluated in Grameen Bank for suitability and compatibility, are shown below.

  • Communication skills
  • Self motivation
  • Interpersonal / ability to sell self and ideas
  • Leadership potential and skills
  • Decision making abilities
  • Judgment abilities
  • Knowledge bases / technical skills
  • Management abilities

Screening and Short-listing Applications

The responses to the advertisements are sorted and screened. The CVs as well as the covering letters are judged. Experience, educational degree, computer literacy, etc are the basis of judging the candidates application.

Written test

It is the most important and effective tool for judging the candidates. The written test includes IQ test, behavioral competencies, and communication skills.


The selection interview is a formal, in-depth conversation conducted to evaluate an applicant’s acceptability. Trough interviews the interviewers of Grameen Bank seek to answer three broad questions:

  1. Can the applicant do the job?
  2. Will the applicant do the job?
  3. How does the applicants compare with other who are being considered for the job?

Selection interview are most widely used selection technique. They can be adapted to unskilled, skilled, and managerial and staff employees. They also allow two-way exchange information: interviewers learn about the applicant and the applicants learn about the employer.

Reference checking

Reference and background check are important, which refers the process to undertake of those application that appear to offer potential as employees. Reference check is indented to verify that was state on the application from correct and accurate information. Some question are arises through reference checking. Those are:

  1. Is the applicant a good, reliable worker?
  2. Are the job accomplishments, titles, educational background, and other facts of the Resume or application true?
  3. What type of person is the applicant?
  4. What information id relevant to match the applicant and the job?

Medical check-up

Normally, the evaluation consists of a health checklist and asked the applicant to indicate the health and accident information. The medical evaluation may:

  1. Entitle the employer to lower health or life insurance rates for company pain insurance.
  2. Be required by state or local health officials, particularly in food handling operations where communicable diseases are a danger.
  3. Be useful to evaluate where the applicant can handle the physical or mental stress of a job.

Offer letter

When the candidates satisfy the Human Resource Recruiting Broad, then the broad provide to the candidate offer letter.

Training and Development program of Grameen Bank.

Training refers to a planned effort b a company to facilitate the learning of job-related knowledge, skills or behavior b employees. The goal of training efforts is for employees to master the knowledge, skills or ability emphasized in training program and to apply it in here day-to-day activities.

Training and development can be initiated to address a “performance gap” (learning needed to meet performance standards for a current task or job), “growth gap” (learning needed to achieve career goals) or “opportunity gap” (learning needed to qualify for an identified new job or role).

Education is the process o increasing the level of knowledge and understanding. Training talks about ‘know-why’. Most of the organizations are concern about know-how of employees. They are most concerned with employee training.

As I known, the Training Department of Grameen Bank is highly concern with continuous training and development of the employees

Training as a process

Few days before, training was not the company’s prime concern. But now the situation has been changed rapidly. Training has become a standard process for the banks. Grameen Bank is highly concerned about the training as an important and essential dimension. Therefore, the phases of training process are:

There are many types of method practices in Grameen Bank.

We discuss that method at bellow:

On the job training

On the job training is a training that shows the employee how to perform the job and allows him or her to do it under the trainer’s supervision on the job training is normally given by a senior employee or a manager. The employee is shown how to perform the job and allowed to do it under the trainer’s supervision.

Job rotation

Job rotation is a training that requires an individual to teach several different some in a work unit or department and performer each job for a specified time period. In job rotation, individuals learn several different jobs within a work unit or department. One main advantages of job rotation is that it makes flexibilities possible in the department. When one employee like junior officer absence another officer can easily perform the job.

Orientation /induction

Through orientation Grameen Bank they to introducing the new comers or new employees with its work unit, rules and regulation, culture, norms, value, believe and exposure to all important functions and locations of the bank and so forth.

Follow up

For make the employee more effective and efficient Administrative Department continuously interacts with the new entrants assisting to cope up with the work environment, work culture, peer groups etc. In this stage the management tries to help the employee to get settled her/his problems in the job, work environment and workplace-culture.

Probation & Confirmation:

  • In terms of appointment, persons selected for appointment with less than 3 years job experience will be on probation period of one year. After one year if he/she fails to show satisfactory progress then authority may not extend their probation period but will be terminated.
  • An employee with more than 3 years job experience will be on probation for 6 months.

An officer shall become eligible for confirmation in the specified post subject to his successful completion of the period of probation.

During confirmation, an employee shall be eligible for 10% flat increment on gross salary and accordingly a confirmation letter to be prepared and signed by the concerned department head.

No promotion will be allowed during confirmation; any exception will be approved by the Managing Director.

The confirmation of service of all officers and employees in the services of the Bank shall take effect on and from the date as will be specified in the order of confirmation.

Development of the human resources

The long term development of human resources as distinct from training for a specific job is of growing concern to training departments of Grameen Bank. Throw the development of current employees the department reduces the company’s dependents on hiring new workers .if employees are developed properly the job openings found throw HR planning are more likely to be filled internally promotions and transfers also show employees that they have a career not just a job. The employee benefits from increased continuity in operations and from employees who fail a greater commitment. Training department is also an effective way to meets several challenges including employee obsolescence, international and domestic diversity, technical challenges. Affirmative action and employee turnover. By meeting these challenges the department can, maintain an effective workforce.

Steps in the Evaluation of training and development

Evaluation criteria > pretest > trained or developed-Workers > posttest > transfer to the job > follow-up studies.


To encourage and help human resource development in the financial industry the Grameen Bank may decide to offer internship programs to individuals or educational institutions.

All Internships will be for a maximum period of six months. Besides two weeks, one month, two months, and three months also duration may be done. Only MD  can approve extensions.

If any persons or student are willing to participate internship program. They send an application to the general manager, international program department. Email :

Staff Management

  • Staff management is the most important and challenging responsibility of the Branch Manager
  • emphasis on commitment rather than task-orientation
  • Staff management at the Branch Office involves two components
    • Staff motivation
    • Staff retention

Staff Motivation

  • proper training and screening of probationary officers during the recruitment process
  • personal contact between staff and community characterized by mutual respect
  • high level of responsibility of bank staff
  • pride in the Branch is promoted through the star-ranking of all branches
  • Branches are awarded one star for each of the five following milestone accomplishments



GreenRepayment100% repayment record for two consecutive semi-annual closings
BlueProfitPositive profit at the annual account closing
VioletSavings MobilizationSavings deposits exceed total outstanding loans to the borrowers and the Head Office
BrownLiteracyAll the borrowers’ children over the age of 6 are enrolled in school or have completed class 5


Poverty AlleviationAll the borrowers who have been with GB for 5 years or more have crossed the poverty line, defined by the 10 indicators of Grameen Bank

Staff Retention

  • weekly Branch meetings to address the problems and concerns of bank staff
  • create a sense of staff solidarity and promote social awareness
  • proper training and screening of probationary officers during the recruitment process
  • recruitment bias towards graduates outside the fields of finance and economics
  • competitive salary, comparable to government banks
  • strong association of bank employees to deal with grievances

Staff Evaluation system

  • Semi-annual evaluation of all staff by immediate superior
  • co-signed by a counter signatory at a higher level (ex. Branch staff evaluations are completed by the Branch Manager and co-signed by the Area Manager)
  • confidential and inserted into employee file at Head Office
  • extreme marks (high and low) must be justified by an accompanying statement of explanation


Compensation & Benefits at Grameen Bank:

Grameen bank is committed about maintaining salaries and benefits that are fair to all employees and competitive in the local market place. The management monitors changes in the economy and salary market to ensure that the overall compensation package is sufficient to attract, recruit and retain high quality staff within the financial capabilities of Grameen bank.

I am writing this section as per their language.


Principles of Salary

The compensation structure is framed with the objective to attract and retain high quality people. The guiding principles of the compensation policies are:

  1. Individuals background and experience
  2. External pay market levels and trends (determined through compensation survey)

Particular skills requirements of the Bank.

  1. Bank’s affordability
  2. Bank’s statutory obligations


Performance Appraisal Systems At Grameen bank.:

Today every organization is interested – in doing better performance appraisals-

For the organization, Performance Appraisals provide the mechanism to cascade organizational strategies, goals and core values down to each employee. This ensures that their efforts are coordinated and their combined effort moves the organization in the right direction.

For Managers, the Performance Appraisal can be a practical and versatile management tool that helps them focus their employees’ activities, monitor their progress, and encourage their development

For Employees, effective Performance Appraisals can have a positive effect on morale. Employees who know what is expected of them and how they will be evaluated will approach their work with a better attitude and better sense of responsibility.


Reasons for an Appraisal

Reasons for introducing performance appraisal in Grameen bank. explaining below:-

  • To identify any training that, may be needed
  • To make personal / business objectives clear
  • To identify employees that are potential for promotion
  • To review salaries or payment methods
  • To identify individual strengths of employees
  • To increase motivation
  • To improve performance
  • To update job descriptions


Developmental performance appraisal purposes

One of the most important aspects of performance appraisal is that of personal development.

The developmental approach to performance appraisal recognizes employees as individuals with concerns and needs. The developmental approach uses performance appraisal as a contributor to employee motivation, development, and human resources planning. Grameen bank following the additional purposes:-

  • They provides a formal structure for communications between employees and managers to help clarify local issues, needs and expectations
  • They provide employees with the formal opportunity to indicate their career direction, level of ambition and how it could be attained.
  • They provide formal recognition and informal encouragement to the employee who has been trying to perform well.
  • They formally shows organizational interest and support opportunities for personal development.


Employee Relation

Employers and employees each have their own sets of needs and values, and successful relationship between these two sides requires that some sort of balance be struck. This balance often takes the form of a psychological contract, an understood agreement between employer and employees that defines the work relationship. This contract with or without support of a formal collective bargaining, agreement influence the outcome achieve by each side.

Grameen Bank group the various into three channel categories those are

  1. Employee safety
  2. Employee health
  3. Employee working condition

Promotion Policies of Grameen Bank.

The movement of personnel within an organization- their promotion, transfer, demotion, and separation is a major aspect of human resource management. The actual decision about whom to promote, and who to fire can also be among the most difficult, and important, a manager has to make. For every organization promotion is extremely important, when the process based on merits and skills of the employee. The employee of Orion Infusion Limited are gets both rewards and punishment from their employer based on their performance. Usually money transfer or other benefits are provided as rewards. On the other hand a major problem of promotion is discrimination and favoritism.

Center Manager → Branch Manager → Zonal Manager


Pay Policies of Grameen Bank.

Once the job evaluation is complete, the data generated become the nuclease for the development of the organization’s pay structure. This means pay rates or range will be established that are compactable with the ranges, classifications, or point arrived at through job evaluation.

Pay structure

No information is given, as this is considered highly restricted information.

Provident Fund

In Grameen Bank 12% of the basic salary goes to the provident fund and the employee pays the same amount of their basic salary.

Medical Facilities

Doctors are arranged to visit each location of numbers of times a week to provide necessary medical support to the employees. Moreover, the non-management staffs enjoy medical allowances.

Work place Flexibility:

The employee of Grameen bank enjoys workplace flexibility. For example, there is a system of job rotation.

  • Employee benefits such as:
  • Health plan and routine medical allowance including optical and dental treatment.
  • Short and long-term disability coverage, as well as life insurance.
  • Paid leave for maternity, sickness and vacation.
  • Staff banking privileges, including special interest rates for education loans, sundry loans and home loans.
  • An active Sports and Social Club.
  • Development opportunities and career support.
  • Retirement benefits.


SWOT analysis of compensation & benefit plan Grameen Bank.


  • Higher compensation attracts the new and potential employees;
  • Employees eager to take responsibilities for getting more benefits;
  • Grameen Bank has a well constructed Promotion policy;
  • Their improved productivity increases the company’s goodwill as well as benefit;
  • Grameen Bank has a well constructed  compensation policy;
  • Employee being motivated by the standard level of salary.


  • Good salary not necessarily satisfy employee always.
  • Most of the time field level employees are discriminate by the head offices employees.
  • It will create problem if the amount of salary or other benefit is less than for same level employees.


  • If Grameen Bank increases other benefits like increase number of bonuses etc. they could easily attract more eligible employees from other renowned company.
  • More open service to bring in and bring on talent – developing staff at all levels to Achieve full potential is a key commitment;
  • Grameen Bank can increase the amount of salary of the transition period to attract the new employees.


  • If the employee finds that other company provides more benefit than Grameen Bank, and then may be the employee switch the job to another company.
  • High rate of turnover may occur if the employees are not satisfied with the current pay scale.


Analysis & findings:

This report has tried to analyze the human resource development aspects that are practiced at Grameen Bank. Through an exploratory approach this report reveals the genuine human resource development aspects of a world known NGO. The Grameen Bank tries to recruit the efficient people and try to motivate them through attractive remuneration package.

Grameen Bank is contributing significantly towards human development through various praiseworthy activities. However, some problems are associated with managing people as it is the most complex in nature.

Grameen Bank has a lot of weakness in their Recruitment and Selection Policy. Findings derived from question-answer of sample personnel as primary source and Bank’s book and records as secondary source and also from my past experience with the Bank.

  1. Grameen Bank beliefs, in present competitive and dynamic environment human resource department are the most valuable department than the other.
  1. The lack of Separate human resource policy and planning department. So after a certain time activities are not monitor properly.
  2. GB has 08 departments.
  3. GB has various types of supporting department.
  1. Grameen bank has also specific Training Program Center.
  2. Each employee gets training only 06 Months.
  3. Field level employee’s turnover rates are medium.
  4. Training and development programs of Grameen Bank include orientations, and socializations activities to inform employees about policies and procedures.
  5. Grameen Bank Provides Internships facility of various Universities but not agree to provides enough information’s for conduct this thesis paper.
  6. GB doesn’t provide outsourcing training.
  7. Grameen Bank try to develop their employee with future advancement and educate them in jobs kills.

Grameen Bank, design their job in such way, which is the right person at the right place at the right time to achieve their objectives and goals.

  1. Multiple step recruitment process which is time consuming and expensive.
  2. They can’t fix the criteria for recruitment and selection of a new employee.
  3. Grameen Bank follows both the internal and external sources of recruitment.
  4. They have no Proper Manpower planning.
  5. They have strong relative business in terms of recruitment.
  6. Not giving enough concentration on employee career development.
  7. Sometimes create bias in salary scale between two or more employees whose designation is same.
  8. Grameen Bank conducts health, hygiene and different awareness program for the all staffs.
  9. Grameen Bank has a well constructed promotion Policy.
  10. Grameen Bank has a well constructed Compensation Policy.
  11. GB has a pension Facility.
  12. GB provides various staff loan facility.
  13. GB provides various bonuses, such as two festivals, one aggracia etc.
  14. GB conducts retried policy follow by the GOVT. policy.
  15. Most of the time field level employees are discriminate by the head office employees.
  16. They have no fixed budget for the development of employees.
  17. They can’t set a standard for the employee so the employee can perform according to the standard.
  18. They can’t follow adequate method for the measurement of employee performance.
  19. Sometimes they can’t properly measure the performance of employees.
  20. Absence of transportation facilities for all the employees.
  21. Hospitalization policy is not transparent.
  22. They cannot provide any kind of mobile allowances and also over time allowances.
  23. Employee can’t participate in case of decision making.
  24. Grameen Bank trusts in team work and respects each other.



Recommendations of these report has been made on the basis of the research findings and analysis Grameen Bank from it Operational Headquarter at Mirpur – 2. Findings of my study show that the human resource Management practices are much better in the Grameen Bank, except a few exceptions, are observed to be more or less satisfactory. To keep the effective “Human Resource Management practices” following are some recommendations:

  1. The selection process should be made less complex because time is important in this modern world.
  2. Grameen Bank beliefs, in present competitive and dynamic environment   human resource department are the most valuable department than the other.
  3. Grameen Bank should conduct a separate Human Resource Department to properly maintain human resource & monitor.
  4. Quality of employee recruitment decision must be ensured. Incorrect staffing decision may quite costly for the organization.
  1. Need to lessen or reduce the time passed through the entire selection process.
  2. Focus on the quality of the experience, not the quantity of experience.
  3. They should enhance the duration of training period.
  4. GB should provide outsourcing training for the organization.
  5. Maximum employee’s tenure or service length is not more in Grameen Bank. So, training programs held in a regular basis will motivate the employees and they will know much about performance measurement system.
  6. They should transparency in terms of recruitment.



This paper is prepared for the purpose of academic under thesis program of Stamford University. Information of this study will be used only for academic purposes and secrecy will be maintained properly. Thesis program of Stamford University is a dynamic initiative for the students where students can gather more practical knowledge under supervising teacher. At the same time, Students can get opportunity to be engage with the organizations as well as employee of the organization and learn more HR management system. Finally. I want to say that this paper highlights a good number of aspects regarding Human Resource Management (HRM) system. This paper shows that a sound and employee friendly HRM policy & procedures are beneficial for the micro finance organizations if it is practiced fairly and consistently. The major HRM activities, such as HR planning, recruitment and selection, attracting and retaining the employees, compensation & benefit, and performance appraisal system should be practiced in such a manner that help in improving employee morale and motivation resulting the achievement of organizational goals and objectives in the micro finance sector. I have learnt many information and system related HR management from this program that may be used for the development of other organization.

Employer have started to understand that the more they invest in human resources that more output is likely which lead them to emphasize on employee capability development. As such fin many organizations, employee development is viewed as part of business plan. Employer and Employee relationship is better than the past, employers now recognize the importance of employee’s participation in business planning, major decision making and organizational change process. Many organizations now conduct employee opinion surveys for collecting employee feedback and improve employer- employee relationship.

In future the overall HR practice is expected to be brighter in every sector in Bangladesh, because:

  • More are feeling the necessity of an established HR department in both in institutional and organizational structure.
  • Employer as well as Employee relationship is expected to improve.
  • It will be part of HR practices, which will make HR actions, decision-making process faster and accurate.