INSTITUTE OF BUSINESS ADMINISTRATION (IBA)

RAJSHAHI UNIVERSITY
Course Title: Compensation Management Course Code: HRM-705

Term Paper
On Compensation System of DHAKA BANK LIMITED
SUBMITTED TO: Prof. Dr. Mohsin-Ul Islam IBA, University of Rajshahi

SUBMITTED BY: NAME ID

Sarah Taifura Rumana Akhter Urmi Srijan Kumar Mazumder

ID - D100011 ID - D100016 ID - D100034

Date of submission: 6th February, 2013

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INTRODUCTION

Background of the Study

During the late nineties the banking sector of Bangladesh saw a sudden shift of expansion as the government approved operation of a good number of new Private and Foreign Commercial Banks. This expansion irresistibly brought in greater benefits to the consumers because of the highly competitive market condition. The period has seen emergence of some dynamic and high-tech banking services of which our consumers were deprived of. This new era of banking services include: One Stop Utility Service Automated Teller Machine Phone Banking Credit Card On-line Banking Syndicated loan But these advancements in banking technology didnt solely benefit the customers. It brought greater challenge in parts of the employees or bankers who were designated with high profile jobs with tougher goals to meet, a dynamic career with attractive remuneration, greater benefits and stunning status. This report will take an attempt to study the career private commercial banks of our country through the evaluation of the employee maintenance functions as practiced in this sector.

Objectives of the Study

To discover the Practice of Compensation System in the selected organization :

In contrast to theories, many business firms of Bangladesh have the least or even no exposure to one of the crucial areas of business - Human Resource Management. But since every organization is made up of people, compensating them, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that 2

they continue to maintain their commitment to the organization are essential to achieving organizational objectives. We will find out how management in the selected organizations is dealing with compensation system mainly. To relate classroom study with that of real life situation Real life business: It is far more different from our classroom studies. Sometimes the books we read are the oversimplification of facts and most of the time actual practices dont match with the theories written in books. So our objective is to relate our classroom studies with real life scenario and get a clear view of what actually is happening in the area of Human Resource Management of the selected banks.

Scope of the Study

Although we hear people saying that they do not care for money but they do care for the feeling of belongingness to their organization it goes without saying that money is a major motivator. It is through compensation by which a relatively effective and satisfied working force is sustained. The maintenance of employee co-operation is largely dependent upon the answers of following questions: Whether the companys compensation rates are better than those of the segment market? What indirect plans of compensation are commonly used in the organization? What specific plans are available from which to choose? What benefits, incentives and rewards are provided? Whether these policies are transparent to the employees and practiced without any distortion? We have basically judged the organizations on the basis of the above criteria. The report will first focus on the overall banking sector of our country trying to describe, note and list the bank currently operating in our country. As it is beyond our scope to focus on each and every bank, we have chosen two PCBs (Private Commercial Banks) - one

from the first generation and the other from the second generation. Because of the request of the authority for anonymity we will describe one banks compensation system:

Methodology

In order to supplement our theoretical knowledge in Human Resource Management with practical exposure, we contacted different organizations and collected data regarding real life scenario. The content of this report is thought to be quite confidential with the organizations. So, we had to spend a long time to convince the human resource managers of our selected organization to help us. We had to convince them about the fact that this report is totally for internal purpose to supplement our theoretical knowledge. However, the method of collecting information was basically an interview type. Since the data regarding salaries are considered confidential we did not have access to any written material. We arranged appointments with the human resource personnel and employees in our selected organization and interviewed them. We asked them about their compensation system, salary ranges and the basis of allocating incentive. Thus we gathered our required information. Data used in this study were collected from the following source Primary source

face to face interview survey using questionnaires personal observation while visiting the company

Data collection

Employee were interviewed through structured questionnaire in different outlets Designing questionnaire Structured questionnaires have been used for this study in with multiple choice and open question. Secondary data

I used the following sources for information: Dhaka Bank Annual Report 2010-2011 4

 Their website Their regular circulars Bangladesh Bank Credit Policy Office files Working papers

Limitations

The limitations are: Since maintenance function entails a vast area it was beyond our scope to describe and investigate each and every topic though we tried to cover all the important aspects to make our report a comprehensive one. The management of our selected organizations was somewhat reluctant to reveal all the information about their policies. They did not particularly provide the amount of salaries or the policies to give incentives. Moreover, there are some qualitative aspects such as job security, work environment, peer relationships, relationship with the supervisors, reputation of the company, which play important role in maintaining the productivity of employees. The Segments of the Pay Components To evaluate the various components of the total compensation package, the values of non cash perquisites and benefits have been monetized at current market rates. While computing Annual Guaranteed Cash, items like Performance Bonus, which is variable, and Terminal Payments have not been taken into account though these have been considered for the purpose of Annual Cost to the Company. The compensation package has been divided into five segments: Monthly Guaranteed Cash Annual Guaranteed Cash Annual Variable Cash 5

 Terminal Payments Monthly Cost of Benefits

MONTHLY GUARANTEED CASH 1. Basic Salary Actual average basic salary of the benchmarks has been taken. No employer agrees to provide actual individual salary for the benchmark jobs as this Is confidential between the employer and the employee. Where a job is held by one person, the Individuals actual salary has been shown. Where 2/3 benchmark jobs fall under one grade, Actual average of that grade has been taken. Where actual average has not been available, the meaningful point of the salary range, applicable to the job grades of the benchmark has been taken. 2. House Rent Allowance Specific amounts or percentage of basic salary paid in cash for each matched job have been taken. 3. Domestic Aids Wage Specific amounts paid in cash for each matched job have been taken. 4. Utilities / Maintenance Specific amounts paid as cash allowance have been taken. 5. Transport Allowance Specific amounts paid in cash for each matched job have been taken. 6. Medical Allowance A specific amount paid in cash has been used. 6

7. Personal / Special / Other Allowance Specific amounts paid in cash as allowances have been utilized. Quite a few costs are lumped into this and paid in cash. With reduction of personal taxes labs, employers are opting for a more transparent pay system conforming to the tax regulations. 8. Meal Allowance

Specific amounts paid in cash as allowance have been used. 9. Children Education Allowance Specific amount paid in cash has been used. 10. ANNUAL GUARANTEED CASH Annual Bonus This is a deferred wage not linked to profitability. Actual amount paid under this head has been used. Festival Bonus Actual amount paid under this head has been used. Leave Fare Assistance Actual amounts paid to the employees have been taken. 11. on: ANNUAL VARIABLE CASH

Performance Bonus

Actual amounts paid have been taken. This is paid by the employers in different forms based

Employees performance only Company performance Profit Bonus Incentive Bonus

Combined performance of the group, business unit and the employee

Actual amounts paid, based on company profitability, have been taken. SMC pays an incentive bonus to its all its employees. The incentive amount is a fixed sum for each grade. 12. TERMINAL BENEFITS Provident Fund Actual payments made by the employers to the Fund have been used. Gratuity Pension Fund

Actual amounts provided by the employers in the Books of Accounts have been used. Actual payments made by the employers to the Fund have been used. 13. MONTHLY COST OF BENEFITS Company Leased Accommodation Household Effects (Depreciation)

Actual cost has been taken. This reflects the cost of depreciation on account of hard and soft furnishing and electrical appliances provided by the comparators. Utilities / Maintenance Telephone Company Car (Depreciation) Where company cars are provided for both functional and personal purposes, the figures mentioned represent the cost of depreciation. Running and Maintenance Cost 8 Costs under this head have been taken at actual costs Actual cost has been taken.

Actual amounts spent for fuel and car maintenance have been used. Drivers Wages Where drivers are Company employees, their actual cost has been taken. Where Private Drivers wages are paid for, actual amounts paid to the employees have been taken. Registration / Insurance / Tax Costs of registration, insurance, tax, etc. have been taken, at actual. Pickup-Drop / Transportation Cost Entertainment Allowance Subsidy Canteen Company Products Actual cost to the company for pickup-drop facility has been taken. Specific costs reimbursed have been utilized. Specific costs on account of company provided subsidized meals have been taken. Specific costs on account of company products have been taken. Club Membership Group Life Insurance Medical Expense actual. Hospitalization Scheme Premium paid by the comparators under the Hospitalization Insurance Policies has been taken at actually. Loan Amount of interests absorbed by the comparator for utilization of various loan policies has been taken. Fringe Benefits Employee benefits, sometimes called fringe benefits, are those rewards that employees receive for being members of the organization and for their position in the organization unlike wage, salaries and incentives, benefits are usually not related to employee 9

The actual amounts paid for by the employers have been utilized. Actual premium paid by the employers has been used. The average cost to the employer on account of medical reimbursement has been used, at

performance. The term fringe benefits was coined over 40 years ago by the war labor Board, Reasoning that employer provided benefits such as paid vacation, holidays and pensions were on the fringe of wages , are agency exempted them from pay controls. It has been argued that this action, more that any single event, led to the dramatic expansion of employee benefits that has since occurred. However, because of the significance of benefits to total compensation, many employers have dropped the word fringe for fear that it has a minimizing effect. Following is the list showing the types of benefits that employees can receive from the company:

RETIREMENT RELATED PENSION FUND ANNUITY PLAN Early retirement Disability gratuity

INSURANCE RELATED Medical Accident Life insurance Disability Dental survivor

PAYMENT FOR NOT WORK Vacation Holiday Sick leave Military leave Paid rest period Lunch Travel time

OTHERS

Company discount Meals furnished by company Moving expands Credit union Company car Tuition Legal service counseling

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Dhaka Bank Limited

Background of Dhaka Bank Limited (DBL)

Dhaka Bank Limited (DBL) was incorporated as a Public Limited Company on April 06, 1995under the Company Act 1994 and started its Commercial Operation on June 05, 1995 as Private Commercial Bank. The Bank started its journey with an Authorized Capital of Tk.1000.00Million and Paid up Capital of Tk.100.00 Million. Today it is one of the most renowned Private Commercial Banks having multiple branches in the major cities of the Country. Dhaka Bank Limited (DBL) has started its Business with all the features of a Corporate Bank and the Products of both Corporate and Retail Banking System; to facilitate the daily clientele requirements. DBL is always trying to improve their Customer Services in every sector, but in todays Competitive Business World, Banks need to offer additional 11

concentration to the Clients requirements in order to stay at the top. Therefore, besides dealing with the general Attributes of Different Products, they have been trying to put more emphasis on the Customer Benefits and other Customer related Facilities. Mission & Vision

The Mission of the Dhaka Bank Limited (DBL) is to be the Premier Financial Institution in the country providing High Quality Products and Services backed by Latest Technology and a Team of Highly Motivated Personnel to deliver Excellence in Banking. The stars in the seven skies sparkle in brilliance and twinkle in blissful beauty. We wonder at them in profound admiration and speculation. At Dhaka Bank we draw our inspiration from the distant stars. Our team is committed to assure standard that makes every banking transaction a pleasurable experience. Our people, products and processes are aligned to meet the demand of our discerning customer. Our goal is to achieve distinction like the luminaries in the skies. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision Excellence in Banking.

Organizational structure of Dhaka Bank Limited

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 Organizational hierarchy and Designations are in ascending order:

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Top Management

Chairman Board of Directors Executive Committee Managing Director Additional Managing Director Deputy Managing Directors Senior Executive Vice President Executive Vice President Senior Vice President Vice President Senior Assistant Vice President First Assistant Vice President Assistant Vice President Senior Principal Officer Principal Officer Senior Officer Officer Probationary Officer Junior Officer Assistant Officer

Executive Level Management

Mid Level Management

Junior Level Management

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 Key facts about Dhaka Bank Limited: The Banks that were given license during the mid 90s are called the 2nd Generation private Commercial Banks. Dhaka Bank Limited (DBL) is one of them that incorporated as a public limited company under the Companies Act in 1994 and is governed by banking Companies Act, 1991. The Bank started its commercial operation on July 05, 1995. Since its incorporation, DBL has proved itself as a true development partner of the Government in developing the national economy providing efficient banking services to different sectors of the economy. Some important facts about Dhaka Bank Limited are given below: Future Plan: Dhaka Bank has celebrated its 15 year anniversary on 5th July, 2010. In year 15 years of journey, Dhaka Bank presents itself as a modern and innovative Bank. The workforce is a brilliant one and the work environment is very congenial. Though it has a strong brand image among the corporate clients, retail division of the bank is not that strong brand image among the corporate clients, retail division of the bank is not that strong as corporate division. One of the problems in retail banking is dearth of ATM booths. To improve this 15

situation, Dhaka Bank plans have own ATM network. Furthermore, it signed a deal with OMNIBUS and Dutch-Bangla Bank Ltd to have withdrawal facility for the clients of Dhaka Bank in those networks. Dhaka Bank is planning to modernize its IT infrastructure to provide the branch network a happy time then serving the customers.

Total Compensation and Benefits Package of DBL

Objectives

This chapter outlines the rules relating to compensation structure and the benefit package of the Bank and gives detailed procedures for exercising them in order to promote fair treatment and consistent within the organization. Pay Policies of Dhaka Bank Ltd. a) Remuneration Competitive remuneration will be offered to attract and retain qualified and capable human resources. The benefits system will support performance-based thrust of the human resources system. At the time of appointment, each employees salary is determined based on level of accountability, responsibility, professional experience, educational background, and past performance. Payment on appointments shall be made at the minimum pay of the grade, but in cases where persons to be recruited possess additional experience or special qualifications, or both, the management may allow a higher initial pay in the scale of the pay grade. b) Salary Monthly salary shall mean the sum total paid monthly as per pay structure including allowances before deduction of provident fund, tax, hospitalization insurance premium (if any) amount. Gross salary is the sum total of the basic salary, house rent, house maintenance, medical allowance, entertainment allowance, technical allowance (if any), conveyance allowance, utilities allowance, telephone allowance, Banks contribution to provident fund, gratuity, festival allowances (if any), Leave fare assistance and any other allowances where applicable as per service rule of the bank. 16

c) Provident Fund There shall be a fund called Dhaka Bank Limited Employees Provident Fund which will be governed by a separate Provident Fund Rules approved by the Board. All permanent employees shall compulsorily be the members of Provident Fund. d) Gratuity Every confirmed and full time employee who has rendered seven years continuous service in the Bank or more, a gratuity equal to one month basic salary for each completed year of service may be granted to him on retirement/resignation/ termination or to his family in the event of his death while in service. The dismissed employee shall not be entitled to any gratuity. e) Loan Facilities An employee of this organization enjoys various loan facilities like- House Building Loan, Car loan, Furniture and Household Electronic Items Loans. Under some schemes the employees enjoy interest free loan facilities. Employees are in higher post enjoys more amounts of loan facilities. f) Medical Facilities and Health Insurance Reimbursement of medical expenses incurred will be restricted to the treatment of employee, their spouses and for a maximum of two dependent children up to the age of 21 years. In addition to that immediate family member who are wholly dependent on the employee and residing with the employee shall also be included. Reimbursement of medical expenses will be made at actual but not exceeding total amount of three (3) basics of the concerned employee. An employee will allow the reimbursement of the cost of maternity twice during the entire tenure of his service with the bank. 4.5 Performance Appraisal: 01) Purpose: Annual Appraisal on each staff members performance is undertaken in order to:

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(i)Assess the staff members performance in the light of his/her job responsibilities. (ii) Give the staff member feedback on his/her strength & limitations. (iii) Enable the staff member to discuss any factor, which impends the achievement of the agreed performance. (iv) Set objectives mutually for the performance and identify training and development needs for the following year. 02) Appraisal: (i)A staff member will have a formal appraisal of performance once a year. (ii) Appraisals are conducted by the Superior who supervises the work of the concerned staff Members. This is done in a constructive and supportive atmosphere and employees are encouraged to participate fully, and to voice any concern issues they may have. (iii) Performance is to be measured against standard, which must be objective and jobrelated and agreed with the appraise earlier. (iv)All appraisals will be reviewed by the appraisers Manager to that the appraise was appraised fairly and competently. (v) Between formal annual appraisals, a superior may conduct a special appraisal. This would be to record any unusual circumstances of outstanding performances as well as poor performances. (vi)All appraisals are to be discussed with an employee. 03) Set of Objectives: a.

Criteria for Setting Objectives: Specify the desired result what task will be accomplished if the objective is achieved?
o

Make the result measurable can you differentiate among different degrees of achievement? 18

Set a time frame by what date must this goal be achieved?

Discuss any cost consideration how much, if anything, will achieve in terms of money and resources?
o

Are there specific budget guidelines that must be adhere to?

b. Attributes of High Performers:

Team Player Customer focused Action Oriented Analytical Thinker Innovative People skills Resource fullness Enterprising Risk Taking Getting things done Working Long Hours Flexibility Long Term Perspective Balancing Life and Work Decisive

4.6 Promotion/Up-gradation Promotion cannot be claimed as a matter of right and all promotions shall be made on merit and no employee shall have a claim to be promoted to a higher grade by virtue of his seniority alone. All promotions shall be made be on the basis of Performance and different criterion laid down by the Management from time to time. An employee may get Accelerated promotion once within a year based on his/her performance. a) Promotion in Executive Grade

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An employee promoted to Executive grade from Senior Principal Officer (SPO) may need to sit for written examination or face Viva after duly recommended by his/her supervisor and supported by the concern Head of the Division/Department/Unit/Branch in the Performance Appraisal b) Promotion in Officer Grade

i. An employee may be directed to officiate in a higher post for a temporary period for which s/he shall not be entitled to the salary of the post in which he officiates. An employee so officiating will be reverted to his substantive post when such temporary vacancy ceases to exist. Such posting should be seen as giving an opportunity to the employee as recognition of his competency as well as proficiency. ii. Promotional increases will be awarded on progress to a post in a higher salary range. iii. In the event of an employee being promoted to a higher job grade, he/she receives an additional increment in his/her basic salary as promotional benefit, in addition to his/her regular annual increment in the previous grade. Both promotional benefit and the annual increment (if any) should be taken into account while fixing his/her salary in the new grade. iv. In case his/her new salary falls short of the starting salary of the new job grade, the employee will be given the differential between his/her salary and the starting salary of the new job grade. 4.7 Bonus: 01) Festival Bonus: (a) An employee in regular employment will be entitled to two Festival Bonuses per year,

each equivalent to one months basic salary. One payment of Festival Bonus will be made to all employees at the time of Eid-Ul-Fitr. The second payment will be made to the employees at the time of theiir own religious ceremony as per their option (eg. Eid-Ul-Ajha, Buddha Purnima, Christmas, Janmashtami, Durga Puja). (b) An employee, who will be on the Payroll of the Bank on the day of the Festival Bonus, is paid out, will only be eligible for the payment/bonus. 20

02) Performance Bonus / Profitability Bonus / Incentive Bonus: (a) An employee may be entitled to the payment of variable Incentive Bonus/Reward, as

declared by the Board of Directors, based on the profitability of bank. Management may decide at its discretion to withhold an employees bonus due non-performance / poor performance, dereliction of duty, violation of code of conduct, gross misconduct, habitual delay in handling official assignments, deliberate sluggish attitude in discharging duties, attempt to fraud etc. (b) Also this bonus is payable to an employee who will put in, at least, six months (180 days) service of the whole year for which the Performance Bonus is declared. 4.8 Employee Training and Development: (a) Training and Development needs of employees are identified on a regular basis, and

accordingly they are nominated for the following training: 1. In-house training (DBTI) 2. Local training 3. Regional training 4. Overseas training (b) Whenever an opportunity comes up, an employee may be sent abroad for training and

development so that they gain knowledge and experience and perform better at work place. (c) On return from training/attachment an employee may be required to submit a Trip

Report to his/her Functional Head and debrief the Management Committee about the learning through presentation within 15 days of return as and when requested by the Management. (d) An employee should also submit an Action Plan on the training for transfer of learning to the work place. (e) An employee may be asked to sign an indemnity bond to ensure continuity of service

before he/she goes / after he/she returns from training overseas, such indemnity will be

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determined by the Management based on the length of training, years of service and track record of the employee concern. 4.9 Resignation and Termination: I) Resignation: (a) An employee, on probation, may resign from service at any time by giving one months

notice subject to adjustment of all dues mentioned in the appointment letter as well as indemnity bond. Similarly, the management will have the right to terminate the services of a staff member on probation at any time without any notice. (b) An employee who resigns shall do so in writing to the Appointing Authority following proper channel of communication. Prior to the acceptance of the resignation letter, thorough checks shall be made in respect of the following: 1. Whether any legal proceeding is underway against the employee by the Bank; 2. Up-to-date cash account, if applicable 3. Statement of any financial transactions dealt by the employee and liability of the Bank I respect thereof; 4. All Banks asset under his/her possession; 5. Any other liabilities/obligations to other division/department/units/ branch. (c) A written reply within 7 (seven) then be given from HRD to the employee who is

resigning, stating conditions etc., with copies to the Finance and Accounts Division and the respective Head of Division /Division/ Unit/ Branch Manager. If the employee submitting resignation has charges of corruption and misbehavior against him/her and proceeding about them are underway, the Bank may refuse to accept the resignation. (d) Prior to clearance and final settlement the employee concerned must collect a certificate on the Banks prescribed form, on the following issues, and submit to HRD for clearance. 1. Certificate stated that the Bank assets and other equipment / articles under his/her possession have been duly handed over to his/her Head of Division or any other authorized officer.

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2. In cases where the employee purchases the items, then the necessary approved documentation must be available before clearance can be given. 3. In case of Branch Manager, comprehensive clearance from Audit & Compliance Division is mandatory. (e) All dues will be cleared on the final working day of the employee concerned, including

Gratuity/P.F. etc., after adjustment of any liabilities owed to the Bank after getting clearance letter from HRD. (f) An employee, on confirmation in service, (apart from support staff) will be required to

give 90 days notice or surrender 90 days Basic Salary in lieu of notice before they resign. For support staff 30 days notice or surrender 30 days Basic Salary in lieu of notice period is required. (g) Management, at its direction, may, however waive the requirement of notice / indemnity / in part or in full and release the resigning staff members from its service immediately (h) Based on the Banks interest management may defer the release / acceptance of resignation at its discretion but not more than 90 days maximum. (i) In case of transferring / conquest liability to another Institution / Organization

Management may issue conditional release for the interim period not more than 60 days after which conditional release shall stand null and void and Bank Management may call back the employee or go for arbitration/legal action. After full adjustment of outstanding liability a formal release shall be issued. (j) Exit Interview 1. All resigning staff may be requested for an Exit Interview. The staff members immediate boss will not conduct such interviews. Instead, the Human Resources Division will conduct the interview and circulate the report among Management Committee members and also among the Board Executive Committee (if necessary). 2. It is important to obtain as much information as possible when a staff member has indicated dissatisfaction with any other aspect of his/her job.

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II) Termination: Similarly, the Bank Management may terminate the employment of an employee by giving notice in writing or salary in lieu thereof in following manner: (a) 120 days notice in case of support staff and other employees of the bank who do not

work in a managerial or administrative capacity. (b) 90 days notice for all other grades of employee. 4.10 Retirement: 01) Retiring Age:

(a) Retirement age is 60 years. An employee will retire from services at the end of the month in which his/her 60th birth anniversary. (b) The management may, however as its discretion, in special circumstances and in the interest of the Bank, appoint any member after retirement on Contract basis beyond the age of 60 years subject to such terms and conditions and in absence of such specialized skilled employee on the Terms mutually agreed. (c) An employee may be required to proceed on early retirement at the discretion of the

management once he/she has completed 25 years service with the Bank or an employee may retire voluntarily after completion of 25 years of active service with the Bank. 01) Retirement on Health Grounds:

(a) An employee may retire on grounds of ill health, before attaining the age of 60 years at the discretion of the management. (b) In the event of such retirement, to overcome the adversity / hardship, the management may consider appointment / employment / recruitment of his/her children in the Bank. Provided his/her children conforms all the pre-requisites of the recruitment policy of the Bank. Salary Structure 24

Refer to the Salary & Remuneration Package Structure for Supervisors and Executive Staff of DBL for details regarding the structure of salary and allowances for different units under DBL. Revision of Pay Elements

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

Employee Pay Records are maintained by the Personnel & Admin Department for Workers and Supervisors and by the Human Resource Department for the Executives. These departments maintain personal file of all employees where all records in regards to the employee are kept in addition to any soft copy (in computer database) maintained by the departments. These records are confidential and should not be accessible to any unauthorized persons (authorization defined by HR or Personnel &Admin dept. head).

Basic Employee Benefits for Permanent Employees

Provident Fund

The Bank's Provident Fund is a funded scheme. All confirmed and permanent employees are entitled to be members of the Provident Fund. The employee contribution, equal to 10% of the basic salary, is deducted each month through the payroll. The Bank contributes an equal amount and both the employees' and the organization's contributions are paid to the Fund each month. In the Provident Fund Ledger, both the employee's and the Bank's contributions are credited to the individual employee's account. The membership of the Trustees of the Provident Fund must include at a minimum: A) Representation from the HR Department B) Representation from Finance & Accounts Department c) Two representatives from the Workers Group Term Life Insurance

The Bank provides coverage of life insurance to all Permanent employees after their joining with the organization effective on the date of joining. To participate in the Group Term Life 25

Insurance policy, all employees are required to fill up "Group Term Life Insurance Registration Form", and submit to HR/Personnel & Admin dept for processing. To change the beneficiary at any time, the employee must complete the Beneficiary Change Form, and submit to the Human Resource Department or to the Personnel & Admin dept for making the changes. In the event of the death of an employee while in the bank s service, other than 1) death by suicide, 2) death by criminal prosecution, or 3) death by taking part in any activities subversive of the state, the bank depending on the classification of employees shall pay benefits on normal death and accidental death from insurance

Bank as follows: Employee classification executives Normal death benefit 36 month last basic salary Accidental death benefit 72 month last basic salary

Detail of compensation other than death (partial disability) will be determined as per calculation within the purview of insurance coverage policy. No recovery or adjustments of loans or salary advances etc. shall be made from the insurance claim benefits. In addition to this coverage of insurance benefits compensation will also be made as per "Workman's Compensation Act 1923" in the case of death/disability of employees.

Bonuses

All confirmed Permanent employees of Dhaka Bank Limited are entitled to one Annual Bonus each equivalent to Basic Salary under the following conditions: Attendance in the calendar year 213 days + 107 days + Bonus entitlement 100% of the bonus 50% of the bonus 26

 Meal Facilities The following facilities are provided in each of the organization under Dhaka Bank Limited: Branches Executives: Meals are provided at a subsidized rate. Head Office: Executives: No meals are provided. Accommodation The Bank on the basis of requirements and availability provides accommodation to DBLs Top Executives at their own established facilities in Dhaka city. Outside the Dhaka city, the Bank provides expenses of the Utilities Allowances Executives between grades J to M4: No utility allowance is paid. Executives of grades M5 and above: Designation Electricity (limit/month) Manager/sr. manager EVP & avope tk 2500 At actual Gas (limit/month)t k At actual At actual Water (limit/month)t k At actual At actual At actual At actual Telephone(local/nwd)

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To get reimbursed for utilities bills, complete Expense Reimbursement Form, and submit to the Accounts Department. The Accounts Department will make reimbursement payment to the employee within 45 days from the date of submission. Telephone bill has to be forwarded to the IT department, so payments can be made by the company, if it is in the name of the Bank.

Medical Benefits

Medical Benefits for the Executive Staff The bank will reimburse the cost of authorized medical treatments in Bangladesh including hospitalization, surgical and childbirth subject to the conditions mention hereunder In case of any overseas treatment prior approval from the Chief Executive is required. The following are the basic guidelines in regards to medical benefits provided to the Executives: (I)Treatment is provided by a registered Medical Practitioner every day in a week. The Bank reserves the right to approve the Medical Practitioner consulted. (ii)Dental treatment included as preventative measures, the Bank will reimburse for Upper and Lower dental cleaning twice a year. (iii)Reimbursement of the cost will be restricted to the treatment of the executive, spouse and children. (iv)Relevant details including names and dates of birth of spouse and the eligible children should be sent to HRD for record. (v)Children attaining 21 years of age or getting married, whichever is earlier, will not be entitled to reimbursement of the cost of medical treatment. (vi)Expenditure on medical treatment of Executives is reimbursed by the company as per following entitlements: (vii)Expenses cannot be claimed: The Bank will not reimburse the following expenses: The supply of dentures and false caps. Any cosmetic dental work. The supply of spectacle frames. Special diets except in hospitals under medical advice 28

 Treatments not covered under paragraphs (i) and (ii) Transportation Facilities and Car Purchase Scheme Transportation Facilities for the Executives Executives DBL Branches: There are no transportation facilities provided for the Executives between grade J toM4. Head Office: There are no transportation facilities provided for the Executives between grades J toM4. For business purpose travel, Pool Car can be provided based on availability. Car Purchase Scheme: Senior Executives: Employees in this grade, which is Managers, Senior Managers, and Vice President, are eligible to apply for a Car Purchase Scheme upon the expiry of one month after the date of joining in the Bank. To initiate the request for participating in this Car Purchase Scheme, the employee is required to write a note to the HR Department. The Human Resource Department then gets necessary approvals and then forwards the request to the Head Office Admin department. The objective of the scheme is to provide financial assistance to bank executives for the purchase of cars and thus to provide executives with transport necessary for carrying out their duties. An employee who has acquired a car under this scheme will not be eligible to apply again for a period of five (5) years. The following are the approved specification of the transport and benefit given to the employee: Description of the car Car price Purchase contribution Fuel allowance Maintenance 1300/1500 cc car. New or reconditioned. Four door sedan 900000/= tk or maximum 1000000/= tk Employee 50% and bank 50% 350 litre per month For 6 years old car 3000 tk. For 8 year old car 4000 tk and for 10 year old car company will pay 29

5000 tk

Driver

Company will pay 4100 tk monthly allowance for this purpose Company will give 1 year insurance

Major accidental repair

Purchase of re-conditioned cars will be subject to inspection on behalf of the Bank, by the Transport department or by a workshop designated for this purpose by them. The car will be checked for engine and body condition, suspension and safety features. The Automobile Inspection Report will be completed and signed by the Administration Department for processing the request of car purchase. The company, bank or a leasing company may finance the purchase of the car. The car will be initially registered as follows: By the company Through a bank loan Through a leasing contract in the name of the company as stipulated by the bank in the name of the leasing company

The employees 50% contribution towards the cost of the car will be paid by him to the banks equal monthly installments vary a period of three years if the car is financed by the Bank, or over a period equal to the currency of the loan or leasing contract, as the case may be. If the car is acquired through a leasing contract or a bank loan, the employee will be required to contribute 50% of the lease payments or loan installments every month until the expiry of the lease period. If the price of the car exceeds Tk 1,000,000 the employee will pay the amount in excess of Tk 1,000,000 to the company in cash. The Bank is 50% contribution to the cost of the car will be amortized over a period of five years. After the expiry of this period, or the expiry of the leasing contract if the car has been leased, or the repayment of the bank loan if the car has been acquired through a bank loan, and subject to prior receipt of the final installment of his contribution, the ownership of the car will be transferred to the employee. Costs incurred in connection with the transfer will be payable by the employees. In the event that the employee leaves the Bank before the expiry of five years, he shall have 30

the option to purchase the car from the Bank at the written down value in the books of the Bank, plus the total of the unpaid installments towards, his own contribution. This option to purchase will only be available to an employee who has been with the company for a minimum period of two years. In case he does not choose to exercise the purchase option, the Bank will reimburse the employee 75% of the amount contributed by him/her towards the cost of the car, and the car will then remain in or be transferred to the ownership of the Bank. The employee will be expected to use the car for the Banks business as well as for fulfilling his private transport needs, including the transport of children to school, etc. Employees who have availed for this scheme are expected to meet all their transportation needs with the vehicle provided under scheme. No other transport will be provided to an employee who has availed of this scheme. However, if the employee is asked to travel outside Dhaka on Banks Business, he will be reimbursed at Tk. 6/- per km, subject to prior permission from his department head, plus an allowance of Tk. 100/- per day for the driver. Tolls and other expenses will be paid at actual. Repairs and maintenance of the vehicle will be the responsibility of the employee. Maintenance allowance will be paid as explained earlier in this section. All taxes, fees, duties, registration costs, and insurance will be paid by the Bank. The employee must inform the Admin Department one month prior to the due date for Fitness/Insurance and the Admin Department will take full responsibilities to complete the said tasks. The Banks approval to participate into this scheme will be based on the nature of the employees job and on the availability of funds with the Bank, at the time when the application to join the scheme is made. The employee may choose to select a car that is presently in the name of the Bank and if made available to the employee for purchase. The administrative department will be responsible to identify the market value of the car, get approval from the HR Department, and make an offer to the employee. For the purchase of the company car, the employee shall be liable to pay 50% of the market value of the vehicle, in equal monthly installments to the Bank over a period of three (3) years. All other terms and conditions shall remain the same. The Management reserves the right to change, modify, amend, cancel or waive any or all of the provisions of this scheme at its absolute discretion and without any prior notice and also to withhold or reject any application to join the scheme, without assigning any reason whatsoever.

Top Executives

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Top Executives of grade M6 and above, i.e. Sr. Vice President and above are entitled to 24 hours company paid transportation. The company also pays for the fuel at cost, Drivers salary, and for all necessary maintenance/repair and administrative cost of the vehicle. Leave Entitlements Basic Leave Types All Permanent Executives of the Bank are entitled to various types of Leaves that are calculated based on calendar year and prorated from the date of joining the Banks service for the first year. Leave entitlements of expatriate (Contract) employees shall be governed by their respective terms of employment with the company specified in the Appointment Letter. For Employees the leave entitlements are calculated in accordance with "The Shops and Establishment Act 1965, Factories Act 1965 and the Factory Rules 1979.These entitlements are as follows: Types of Leave Casual Leave (with full wages) Sick Leave (on average wages) Earned Leave (1 for every 22 days actual work with wages) Public Holidays 10 (minimum) Days Per Year 10 14 12

The following are the Basic Leave entitlements for the Executives at Head Office: Types of Leave Weekends (with full wages) Casual Leave(with full wages) Sick Leave (with full wages) 32 Days Per Year As per Section 5.5 15 10

Earned Leave Public Holidays

15 As per list of holidays declared by the Govt

The following are the Basic Leave entitlements for the Executives at Branches: Types of Leave Weekends (with full wages) Casual Leave(with full wages) Sick Leave (with full wages) Earned Leave Public Holidays Days Per Year As per Section 5.5 15 10 15 10 minimum

Public Holidays for Head Office worker are governed by the policy of the Board of Directors of the Bank and is based on the list of holidays declared by Govt. For Branch employees, the Management determines the Public Holidays (minimum 10days) and it is announced at the beginning of the year. Definitions of Basic Leave Entitlements The following are some definitions of Basic Leaves entitlements: Casual Leave Entitlement to casual leave for the Executive at Head-Office and Branch Site, it is 15days based on each calendar year. The employee is entitled to exercise Casual Leave from the very next day of joining; though the Casual Leave is pro-rated for the balance period of the year counting from the joining date. Casual leave cannot be availed for more than three days at a time. Also, it cannot be carried forward to the following year or cashed. Casual Leave can be taken with Weekends, Public Holidays, Earned Leaves, etc. but be limited to only 3 days. Sick Leave Entitlement to Sick Leave for the Executives at Head-Office and Branch Site it is 15days on the basis of each calendar year. The employee is eligible to exercise the Sick Leave benefit 33

from the date of his/her joining. The above entitlements represent the maximum number of days Sick Leave that an employee can avail in a year. Normally, medical certificates are not required but if the sick leave exceeds three days at a time or if it is being taken as an extension of Earned Leave, then a Medical Certificate is required. Where this is not the case an application for Sick Leave is considered enough. Sick leave cannot be carried forward to the succeeding year and cannot be cashed. If an employee is sick on Weekend or on a Public Holiday, that day will not be counted as a sick day and the number of Sick Leave taken out of his/her allocated days will be excluding those days. Earned Leave Entitlement to Earned Leave for the Executives at Head-Office and Branch Site is15days on the basis of each completed year of service. A maximum of thirty (30) days can be accumulated. Any accumulation beyond this will automatically lapse on the following 1 st of January each year. The entitlement to Earned Leave is exclusive of Weekends and Public Holidays i.e., Weekends and Public Holidays falling during the annual leave taken will be considered additional to the entitlement. Though Earned Leave is counted from the date of joining but it cannot be taken until the employee passes the probationary period receiving confirmation. Other Leave Options The following sections explain some additional leave options that an employee may exercise depending on the need. Maternity Leave Married woman employees are entitled to Maternity Leave benefit as per "The Maternity Benefit Act, 1939". The period of Maternity Leave shall be 84 actual days of absence which shall include the Public Holidays and Weekends (non-working days) and including the day of delivery. The entitlement to maternity leave is to be availed as follows: Six weeks or 42 days immediately preceding and including the day of delivery. Six weeks or 42 days immediately following the day of delivery. A woman shall not be entitled to maternity leave unless she has been employed by the Bank for a period of not less than nine months immediately preceding the date of delivery. Study Leave An Executive may be granted Study Leave, with or without pay, entirely at the bank s Discretion, once s/he has been in the bank for at least one year. Study leave is normally 34

granted if the course of study which the employee intends to pursue is likely to benefit the Banks operations. Study Leave can be given for up to a maximum Period of two years. Hajj Leave A Permanent Executives who intends to perform Hajj at his own expenses, upon completion of one year of service, may be allowed for a 45 days Hajj Leave with pay at the sole discretion of the management. This leave can only be availed once in the entire period of service. Similar leave may be granted for employees other than Muslims, if the occasion is a once in a life time holy event significant to the believers. Special Leave Special leave may be granted to the Permanent or Contract employees with or without pay and allowances at the sole discretion of the management. Application for special Leave should be forwarded to HR/Personnel department, through the relevant departmental head, along with appropriate reasons and recommendations for necessary action. Some examples of such leave request may be for marriage, death in the family etc. Leave Encashment Executives before leaving the Bank due to resignation, retirement or termination are allowed to cash the Earned and Compensatory Leave due to them up to a maximum of 30 days, while for workers it is 20 days plus the prorated entitlement for the current year. The amount paid on encashment includes only the employee's last drawn basic salary for the period. Allowances are not included in this amount. Maintenance of Leave Records Approved leave applications received from departments are entered in a Leave Register and the lower portion of the leave application showing the balance of leave is sent to the employee. Leave records for all Executives and Head Office Staffs are maintained by HR Department . Financial Assistance Schemes Objectives To meet various emergency and incidental expenses, the Bank provides financial assistance in the form of advance payment of salary and loan against provident fund to its employees.

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The following sections give detailed procedures for salary advances and loan sanctions under Financial Assistance Schemes. Priorities for Loan against Provident Fund (PF) or Salary Advance The following priorities will be maintained for PF loan or salary advance request processing: 1. Medical emergencies for spouse or children 2. Death of Spouse or children 3. Medical emergencies for other dependent 4. Death of other dependent 5. Rental advance 6. Own marriage 7. Other emergencies 8. Marriage of siblings 9. Education 10. Other requirements Loan against Provident Fund (PF) or Salary Advance Eligibility andLimits Loan against Provident Fund 1.All Permanent employees who have contributed to atleast18 installments in the Contributory Provident Fund of Dhaka Bank Limited and have been in the Bank for less than 3 years, are eligible to take loan against the provident fund equal and up to 75% of the employees own contribution. 2. All Permanent employees who are members of the Contributory Provident Fund and have been in the Bank for more than 3 years but less than 4 years, are eligible to take loan against the provident fund equal and up to 100% of the employees own contribution. 3.All Permanent employees who are members of the Contributory Provident Fund and have been in the Bank for more than 4 years but less than 5 years, are eligible to take loan against the provident fund equal and up to 70% of the total contribution (employees own contribution + Banks contribution) 4. All Permanent employees who are members of the Contributory Provident Fund and have been in the Bank for more than 5 years are eligible to take loan against the provident fund equal and up to 75% of the total contribution (employee sown contribution + Banks contribution).

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Salary Advance Salary Advance is given only in those situations where the Permanent employee doesnt have enough contribution to the Provident Fund but the urgency is very high. Usually one months average gross salary is given as advance but based on the emergency; a maximum of two months salary can be given as advance. Repayment of Loan or Salary Advance One months grace period is given to the employee before the repayment starts. The Employee, through automatic deductions by the Accounts Dept. from his/her Pay-check, makes the payment. The following are some guidelines for repayments: 1. If financial situation permits, the employee is asked to pay the money back with 6equal monthly payments. 2. If the financial situation does not permit, the employee is given the opportunity to pay back with 12 equal monthly installments. 3. If the amount of loan is large and the repayment imposes hardship on the employee, it may be considered to extend the repayment schedule to a maximum of 24 equal installments. In such cases, the Department Head of the employee must recommend the accounts department to do so. 4. If the loan or advance is related to medical payments and the employee is eligible for medical benefit, the advance/loan will be applied towards the eligible benefit once the treatment is received. Upon receipt of all medical vouchers, the employees required to submit Medical Bills Reimbursement Form, as per guidelines provided in Section 6.12.2 and apply the advance/loan towards the refund. Any excess amount taken as advance/loan must be paid back immediately after the treatment is over. Procedures to Apply and Processing of a Loan or Salary Advance Request The employee completes a Loan Application Form, and upon receiving an approval from the Department Head, submits to the Accounts Department. The Accounts Dept. personnel review the application, discuss with the employee if necessary, and let the employee know about the outcome. At the time of processing the loan/advance request, the Accounts Dept. identifies the repayment agreement discussing with the employee. The following are guidelines for loan/advance approving: Loan Amount (Tk) < or = 5,000.00 Approval Authority Section Head responsible 37

>5,000.00 < or =20,000.00 .> 20,000.00

for Loan/Advance Second level authorization by Manager or above Department Head

Findings of the study:

Dhaka bank has its own training center. There are on the job and off the job training techniques in which the bank follow some of that technique, but the bank cannot arranges off the job techniques which include video and films show.

The bank cannot practice proper Dhaka Bank guideline. The Dhaka bank has some objectives but the bank cannot all those objectives.

To evaluate employees performance Dhaka Bank cannot evaluate their employees performance properly. Dhaka bank is a truly online bank. Only the case section of the branch is computerized. Hopefully the management decided to provide computers for departments, which will bolster services of the bank.

When a join stock comes to open an account, if the company happens to be an existing one, the banker should demand copies of the balance sheet and profit and loss account, which will reflect the financial growth of the company and its soundness.

Officers of the bank are competent even though many of them simply know the working procedure of what they are doing but dont know the philosophy behind doing those.

Project loan requires testing the feasibility of the project and judging the marketability of the product. It requires infusion of knowledge of both the fields marketing and banking. But the bank has hardly any officer with this kind of ability.

Recommendations:

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The bank should practice proper Dhaka bank guideline. The purpose of Human Resource Management is to improve the productive contribution of people.

To get effective and efficient employee, the bank should arrange proper training and development programs.

The entire HR department should be will informed regarding the employment personal.

Employees development is needed for the own interest of the bank. The bank should provide well direct compensation as well as direct to its staffs. The bank should have job evaluated salary structure, which is most competitive than other banks in the country.

To evaluate employees performance the bank should follow promotion policy properly.

In order to get competitive advantage and to deliver quality service, top management should try to modify the services.

Dhaka Bank Limited (DBL) needs to advertise through various Media about Credit Cards ATM Cards Tele Banking & Other Product & Services Letter of Credit opening procedure and Margin requirement may be relaxed to the qualified employees to keep motivating.

Periodical performance appraisal and giving recognition and rewards to the qualified employees to keep motivating them.

Proper training needed for ensuring efficient performance of the employees.

Conclusion
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Dhaka 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 Dhaka Bank Ltd has compete not only the other commercial banks but also with public bank. Dhaka bank is more capable of contributing towards economic development as compared with other bank. Dhaka bank ltd. Invested more funds in export and import business. It 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 Dhaka bank limited and here lays the success of credit financing.

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EMPLOYEE ATTITUDE TOWARDS COMPENSATION POLICY

We conducted the survey among 10 representatives from different level and select the representatives randomly. The survey results are given below in a compile form.

6 out of 10 are satisfied with the current compensation practice.

3 people want to make amendment in benefits policy.

1 wants to introduce pay for performance provision.

Maximum employees think that there is a long pay distance among the levels

Most of them want to improve life insurance policy and like to contribute financially.

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QUESTIONNAIRE FOR PAY SURVEY

Designation of the Incumbent:

1. Are you satisfied with the current compensation policy of your organization? Yes No 2. If the answer is no then, in which category you think amendment. Basic pay Benefits Incentives 3. Would you want to introduce or improve any benefits and incentives plan? Yes No 4. If yes, please mention it.

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Introduce: Improvement: 5. Would you be willing to contribute a portion of your earnings for new or improved benefits beyond the level already provided by the organization? Yes No

6. If yes, please indicate below in which area? House Rent Allowance Medical Allowance Conveyance Allowance Children Allowance ____________________________________________________________ __________________

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