Introduction

Origin of the report

I am Lamia Nuzhat a student of BBA in United international University. I have done my major
in Human Resource Management. My instructor Farhana Rashid as assigned me a project which
is a requirement to complete my BBA. And to fulfill this requirement the topic that is given to
me is HR Activities of Mercantile bank Limited.

Objective of the report

The main objective of the report is to understand the application of hr practices in a bank. And
for this reason I have chosen Mercantile Bank as my topic subject. The specific objectives of this
report is

To identify the motivational forces of this bank

To identify the training and development areas of this ban

To find out the performance management system of this bank

To get a clear idea about the employee welfare issues of this bank

Identify the compensation management of this bank

Identify the selection and recruitment process of this bank.

Scope of the report

I have chosen Mercantile Bank as my topic as it is one of the largest bank in Bangladesh. And it
has around branches overall in Bangladesh. So they have to maintain their HR activity in such a
manner so that so branches can suffer in HR related problem. And to know this information there
must need a key employee from HR in this bank. And as have have managed this so there is a
huge scope of working in this topic

Methodology
Different data and information are required to achieve the goal of this report. Those data and
information were collected from various sources, such as, primary and secondary which is
showed below:
Primary sources of data

Face to face conversation of the employees

Taking interviews of Senior Executive Vice President of HR.

Personal observation
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Secondary sources of data.

Internet.

Several kinds of our academic text-books.

Annual Report

Journals

Online surfing

Statistical tools.

Various articles

Blogs

Analysis using Different program

Historical Background
The history of banking begins with the first prototype banks of merchants of the ancient world,
which made grain loans to farmers and traders who carried goods between cities. This began
around 2000 BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman
Empire, lenders based in temples made loans and added two important innovations: they
accepted deposits and changed money. Archaeology from this period in ancient China and India
also shows evidence of money lending activity.
Banking, in the modern sense of the word, can be traced to medieval and early Renaissance Italy,
to the rich cities in the north such as Florence, Venice and Genoa. The Bardi and Peruzzi
families dominated banking in 14th century Florence, establishing branches in many other parts
of Europe.Perhaps the most famous Italian bank was the Medici bank, established by Giovanni
Medici in 1397. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in
Siena, Italy, which has been operating continuously since 1472It is followed by Berenberg Bank
of Hamburg (1590).
Bangladesh is a third world country with an under developed banking system, particularly in
terms of the services and customer care provided by the government run banks. Recently the
private banks are trying to imitate the banking structure of the more developed countries, but this
attempt is often foiled by inexpert or politically motivated government policies executed by the
central bank of Bangladesh, Bangladesh Bank.

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Mercantile Bank Limited (MBL) incorporated as a public limited company on May 20, 1999.
Subsequently, it commenced business on June 02, 1999 with a vision for being finest corporate
citizen. MBL enlisted in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE)
on February 16, 2004 and February 26, 2004 respectively. MBL is the output of some visionary
entrepreneurs dream of contributing directly to the economy by catering various banking needs
to all segments of people living home and abroad.
MBL has been able to establish itself as a leading third generation private commercial bank by
dint of its prudent policy guidelines coupled with proper execution, wider range of banking
products and excellent customer services. The core activities of the Bank are to provide all kinds
of commercial banking services including deposits mobilization, providing loans, discounting
bills, foreign exchange business, off-shore banking, treasury function, card business and mobile
banking.
MBL has 2 (Two) subsidiaries namely Mercantile Bank Securities Limited (MBSL) and
Mercantile Exchange House (UK) Limited. MBSL formed on 27 June 2010 to deal with stock
dealing and broking. MBSL started its commercial operation on September 14, 2011 through
obtaining stock dealer and broker license from concerned authorities. Mercantile Exchange
House (UK) Limited, another subsidiary company of MBL incorporated as private limited
company on December 01, 2010. It commenced its business operation at Birmingham in UK on
December 06, 2011. Currently, it is operating with two branches, one in Birmingham and another
in London with a view to providing faster, easier and safer remittance services to the
Bangladeshi expatriates working in UK.
MBL has broad network coverage across the country. It has 86 (Eighty Six) branches including 5
(Five) SME/Krishi branches as on December 31, 2012. The Bank has 2 (Two) Off-shore
Banking Units operating at Gulshan and Chittagong EPZ areas. MBL has 115 ATM booths as on
December 2012 covering important business centers. Mercantile Bank Securities Limited
(MBSL), a subsidiary company of MBL dealing with stock dealing and broking has 7 (seven)
branches across the country. Mercantile Exchange House (UK) Limited, another fully owned
subsidiary company of MBL is facilitating inflow of remittance with 2 (two) branches in
Birmingham and London, UK.

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Theories and Concept of Human Resource

"Human resource management is a process consisting of four functions-acquisition,
development, motivation and maintenance of human resources." by Gary Dessler. [1].
Human Resource Management includes conducting job analyses, planning personnel
needs,recruiting the right people for the job, orienting and training, managing wages and salaries,
providing benefits

and incentives,

evaluating performance,

resolving disputes,

and

communicating with all employees at all levels. Examples of core qualities of HR management
are extensive knowledge of the industry, leadership, and effective negotiation skills. Formerly
called personnel management.
Importence of Human resource Management [2]
Importance of Human Resources Management occur daily in workplaces.Some employees
regard HR as the policing, traumatizing, systematizing arm of executive management. These
employees see HR staff as gatekeepers, people who hold little interest in employee concerns.

They also see HR staff as supporting managers, not regular employees. They attribute
nefarious goals and motives to HR staff and talk about why they hate HR.

Part of the problem is that HR has to balance the interests of five different stakeholders,
so employees can feel their interests are ignored. And, HR needs to do a better job of
touting its own horn and educating staff about what they are contributing

A good HR department is critical to an employee oriented, productive workplace in

which employees are energized and engaged. Here are the reasons why.

HR monitors the culture. Some organizations say that HR owns the culture, but as in all
other employee relations matters, I recommend that the ownership is spread across all
employees.

HR owns the overall talent management processes. In conjunction with other managers,
HR leads the way in management development, performance management, succession
planning, career paths, and other aspects of talent management.

HR is responsible for the over all recruiting of a superior workforce. Once again, HR
cannot do it alone, but must provide support to hiring managers who are also responsible
for recruiting a superior workforce.

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HR recommends market-based salaries and develops an overall strategic compensation

plan. HR provides guidance to managers as they determine the salary ranges within their
organizations.

HR researches, recommends, and implements employee benefits programs that attract

and retain your best employees. HR is also responsible for controlling costs and
considering various options before recommending adoption.

HR is responsible for recommending and instituting strategies for people and the
organization that further the attainment of the organization's strategic goals.

The importance of HR is easily overlooked in the busy day-to-day in the workplace,

but

without contributions in each of these areas, the organization would be less successful.

Activities of HR
As it is stated that HR is one of the most important part in any organization. so their activities
also very important in any organization.there are some activities of HR which is very important.
The activities are

Employee Motivation

Employee selection

Recruitment

Employee Welfare

Pay roll

Training and development

Employee Retention

Human resource planning

Now these Activities are discussed below

Employee Motivation
Motivation is an employee's intrinsic enthusiasm about and drive to accomplish activities related
to work. Motivation is that internal drive that causes an individual to decide to take action. An
individual's motivation is influenced by biological, intellectual, social and emotional factors. As
such, motivation is a complex, not easily defined, intrinsic driving force that can also be
influenced by external factors.

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Employers understand that they need to provide a work environment that creates motivation in
people. But, many employers fail to understand the significance of motivation in accomplishing
their mission and vision. Even when they understand the importance of motivation, they lack the
skill and knowledge to provide a work environment that fosters employee motivation
Motivation can be defined as "the complex forces, needs, drives, tension states, or other
mechanisms within us that will create and maintain voluntary activity directed toward the
achievement of personal goals. Employee motivation can be defined as "psychological forces
that determine the direction of a person's behavior in an organization, a person's level of effort
and a person's level of persistence". It is important to understand that employee motivation is a
separate and distinct topic apart from motivation. Vast articles and studies exist on this topic
indicating the level of importance employee motivation has in business success. [1]

Importance of Employee motivation

[2]

When looked upon the first time, the link between employee motivation and performance seems
to be quite obvious. Thats because every time when we deem a task to be important and
valuable to us, we act with a high level of dedication and enthusiasm to its completion.
With that in mind, managers need to find creative ways in which to consistently keep their
employees motivated as much as possible. Motivation is highly important for every company due
to the benefits that its able to bring. (Importance of motivation,2013) Such benefits include:

Human Capital Management a company can achieve its full potential only by making
use of all the financial, physical, and human resources that it has. It is through these
resources that the employees get motivated to accomplish their duties.

Meeting Personal Goals Help an Employee Stay Motivated and Feel About
Themselves to Continue to Produce Motivation can facilitate a worker reaching
his/her personal goals, and can facilitate the self-development of an individual.

Greater Employee Satisfaction - Worker satisfaction is important for every company, as

this one factor can lead towards progress or regress. In the absence of an incentive plan,
employees will not fill ready to fulfill their objectives.

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Raising Employee Efficiency- An employees efficiency level is not strictly related to

his abilities and qualifications. In order to get the very best results, an employee needs to
have a perfect balance between ability and willingness.

Better Team Harmony A proper work environment focused on cooperative

relationships is highly important for an organizations success. Not only that it can bring
stability and profits, but employees will also adapt more easy to changes

Workforce Stability Stability of the personnel is highly important from a business

point of view. The staff will stay loyal to the enterprise only they meet a sense of
participation within the management side. The abilities and potency of staff can be used
in their own advantage, but also in the benefit of the company. This may cause an honest
public image within the market which can attract competent and qualified individuals into
the business.

With all that said, its important also to point out that motivation is an interior feeling which
should target both the manager and the team members, as they can interact and feed off each
other, motivationally speaking
Motivation techniques for employees
Employee

motivation

techniques

are

the

key

to

boosting

team

and

business

performance.(Holmes,n.d) Often people stay in jobs because they like the company, their
workmates, the pay or it is close to home, but they stopped being engaged by the work that they
do years ago. [3]
There are 5 employee motivation technique. They are

Provide Meaningful and Challenging Work

When people feel that the work they are doing is meaningful - makes a difference in some way and provides them with challenges that stretch them (but also mesh with their ability to achieve
them) they become internally motivated. In other words they don't need anyone standing around
coercing them into higher levels of performance.Regardless of the actual work that is being done,
people generally want to feel a sense of:
Achievement
Responsibility
Enjoyment
Recognition
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Set Clear Targets and Expectations and Measure Performance

Spelling out specific targets, goals, and expectations for behavior and performance need not be
anything complicated it just needs to be done and people need to get regular and timely feedback
on how they are performing against those goals.

Give Regular, Direct, Supportive Feedback

Feedback - both positive and performance improving - is vital to continuous improvement and
done well it motivates and inspires people to continually move toward using more of their
potential.Feedback needs to be timely, specific and presented in such a way that the individual is
clear about what behaviors or skills they need to modify in order to improve performance.

Design People's Roles So They Can Use Their Strengths

Assigning people to specific tasks and duties that play to their strengths is one of the best
employee motivation techniques. Research has shown, more than anything, people who are able
to make use of their strengths on a regular basis while at work are more likely to work in teams
that perform at higher levels.

Enable Input and Choice In How Work Gets Done

In many organizations managers turn the majority of their focus toward the 5% of people who
are allergic to work and then instigate rules, polices and practices (such as close supervision) to
control this 5%. As it c be imagined all that does is demean, annoy and demotivate the 95% who
are motivated to do their best. It is wasting the talent and natural motivation that the
overwhelming majority of people bring to the workplace

Employee Selection and Recruitment

Employee Selection
The process of interviewing and evaluating candidates for a specific job and selecting an
individual for employment based on certain criteria. Employee selection can range from a very
simple process to a very complicated process depending on the firm hiring and the position.
Certain employment laws such as anti-discrimination laws must be obeyed during employee
selection

[5]

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Importance of employee Selection

The human resources, or HR, selection process is important because of the production and
performance value companies get by making good hires and the high costs of replacing
employees following bad hires. These considerations are especially heightened for small
businesses. HR has taken on a more strategic role in many early 21st century companies, with
hiring and selection integral to that role. [6]

Basics

The HR selection process is the strategically planned procedural approach developed by human
resources professionals and implemented by organizations when recruiting, evaluating and hiring
new employees. The process typically begins when jobs are posted internally and externally.
Sometimes recruiting tools are used to draw top-qualified candidates for certain jobs

Selection Criteria

One area of the selection process that is significant and sometimes under-valued is the
development of screening tools. The ultimate goal of selection is to hire the candidate who is the
best possible match for the job duties and the culture of the company.

Costs

Along with finding the best hire, cost efficiency and legal concerns are two main reasons why
the HR selection process is so important. When companies make a bad hire, they pay to train and
orient a person who ultimately may cause more harm than good if he performs poorly and
negatively affects the workplace. The costs to replace a bad hire are astronomical in many
industries

Legal Concerns

Any misalignment between the job and selection criteria could open the door for a candidate to
claim discrimination. Laws such as Title VII and the Americans with Disabilities Act mandate
equal opportunities for employees regardless of such traits as race, national origin, age, religion,
sexual orientation and disability
There is a danger that good selection can be viewed as a panacea, or a way of guaranteeing an
effective workforce. Hopefully, you will already be aware that this is not the case. If it was there
would be no need for any more modules in this course - which would make it easier, but less
interesting Imagine that an organization needs 1000 highly skilled nuclear power plant control

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room operatives Selection might focus on identifying the people with the potential to develop
such skills. Factors affecting employee selection

Environmental Factors

Every organization is having some sort of environment which is constituted by some elements.
These elements of the environment may have impacts over every function that is being
performed in the organization. Few of the environmental factors are given below
HR functions, other than the selection and recruitment may affect the method of selection. The
comparison exists between the different departments and operations of the organization. The
competition mainly exists between the factors such as compensation packages, health or safety
facilities and so on.
Legal Considerations The legal considerations define the criteria for the selection of the
employees. These legal considerations are different for different jobs. These considerations are
necessary for shaping the eligibility criteria of the employees.
Speed of Decision Making The time period that is available for the selection and recruitment
process also affects the method of employee selection. Obviously, the method will be selected
that can be performed effectively in the given time period. There are many jobs that need the
employee quickly otherwise, the organization might not function properly. In such cases, it will
become necessary to choose the quickest selection method.
Organizational Hierarchy It is a fact that the nature of organization may also affect the
selection method to the large extent. Also, the levels at which the jobs are required also do have
impacts over the selection methods. There is a huge difference in selecting the method for the job
of chief executive and the data entry operator. For higher posts, the methods will be selected that
may overview the background properly along with some interviews.
Type of organization The organizations are of different kinds like private, public, semi private,
NGOs, government and so on. All types of organizations do have their own strategies. In private
sector, huge competition is observed and the method is chosen that can find out the best
employee who can provide the organization with large profit.

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Probationary Period The trend of keeping a probationary period is now getting common in
many organizations. This period is set to examine the performance of the selected employee in
the given time period. If the candidate is successful in performing according to the expectations
then no more selection methods will be required.
The above are the most common environmental factors that may influence the selection method.
All these factors are important and may have different affects.

External Factors

There exist many factors that are not a part of the organizations. These factors are not under the
control of the organization as well. Such factors are named as external factors and these are also
having impacts over the employee selection method. The description of these factors is given
below
Supply and Demand The most important element for the selection and recruitment in any
organization is the current availability of work force. Also, the number of candidates that are
applying for the particular job holds equal importance for any organization. The selection
method is chosen according to the need of the company.
Labor Market The locations of the organization for which the employees are being selected
should be observed first in terms of employment condition. These conditions may affect the
process of selection to the large extent. If at the time of selection and recruitment the candidates
observe the conditions like surplus of workforce or any other informal attempt then naturally
their mind would be diverted towards the particular organizations.
Image or Good Will Obviously, the image of the organization is having its impacts over every
function or operation that is being performed. The organization that is having a strong positive
image is always likely to attract a large number of candidates to apply. So, this factor will affect
the selection method as it will be selected according to the number of candidates applying and
also based on the image of the organization.
Political, Legal and Social Environment In many organizations various political, social and
legal constraints are found in their laws and policies. These may also affect the recruitment
process. The union of any organization holds great importance and can be a great restriction for
the management in choosing the selection method.

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Unemployment Rate The condition of the economy is again a very important factor. It is very
important to know that what the current rate of the economy is. It is also required to find out that
whether the economy is growing or not. These are important considerations as the status of the
economy will allow the organizations to create more jobs. When the rate of unemployment goes
high then the selection method is very restrictive.
Competitors The organizations should also keep in mind about the policy of selection and
recruitment of the competitive organizations. Obviously, a large competition is existing in the
market so it is required that such policy and method should be chosen that is better than the one
selected y the competitive organizations.
The above stated are the external factors that may highly affect the selection methods. These
factors should be kept while deciding the selection policy and methods. Considering the external
factors is most important as these factors cannot be controlled by the organization. (External
factors affecting recruitment, 1, 2007)

Internal Factors

There are many factors that exist inside the organization and may affect the process of selection
and recruitment. These factors are controlled by the organization itself and are known as the
internal factors. Following is the details of the internal factors affecting the employee selection
methods
Policy of Recruitment Every organization is having some special policy or rules for the process
of recruitment and selection. The purpose of the policy of selection and recruitment helps the
organization to clearly define the goals and objectives. The desired output from the process of
selection and recruitment is established and also it provides the framework that should be
followed for the implementation of the selection method
Organizational Objectives The objectives of the organization are also very important for
selecting the employee selection method. If the objective of the organization is to have a team of
professionals and creative people then the employees of that category will be selected. In such
situation, it is required that the applied method can easily judge these qualities of the candidates.
Human Resource Planning The Human Resource is the most effective department of any
organization. So, it is required that the planning of Human Resource should be very strong and
effective as well. The Human Resource planning helps a lot in finding out that what is the current
work force and what is the required. This planning may also allow finding out the required
Page | 12

qualities that may help to perform the job successfully. In short, Human Resource Management
plays a great role in the process of selection and recruitment.
Size of the Organization The size of the organization is one of the main factors that are
considered while selecting the employee selection method. If the organization is large and having
a number of operations then obviously it will be requiring large number of workforce. In case of
small organization and limited number of operations the required workforce would also be
limited
Cost All the employee selection methods do involve some costs of performing those methods. It
is a fact that all the organizations will try to adapt the selection method that may bear the low
costs of implementing the particular method. A budget should be kept in mind that can be
applied by the company over a single candidate.
Growth and Expansion As it has been discussed earlier that if the organizations are aimed to
grow its businesses and operations then the need of more employees will be felt. At this level,
the method will be chosen according to the number of employees needed.
Need of Organization The selection method highly depends over the number of employees and
the level of employees needed by the organizations. If an organization is hiring a number of
employees then the selected method will be the one that can examine a number of candidates.
But, if only a couple of employees are to be selected then the chosen method will be the one that
can judge the employees in detail.
The above stated ate the internal factors of the organization that may have affects over the
Selection methods of the organization.

Selection process [7]

Step 1

Study and know about employment laws that affect the selection process.

Step 2

Conduct a position analysis. Learn everything possible about the job (processes, performance
factors, working conditions, etc.) to determine what the essential functions are and what is
required in terms of knowledge, skills and personal traits to perform the position's duties
satisfactorily.

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Step 3

Prepare application screening criteria and issue a vacancy announcement.

Step 4

Prepare questions and screening criteria for the selection interview.

Step 5

Screen applications and, if necessary, conduct initial screening interview, based on established
criteria in Step 4 above. Select the top-ranking individuals for interviewing.

Step 6

Conduct interviews based on established criteria in Step 5 above

Step 7

Make your selection decision, and conduct reference checks

No selection method is perfect. At best we can make use information gathered during selection to
make some reasonably accurate predictions about future performance. In one sense, selection
might be viewed as a risk management procedure that helps organizations to avoid hiring
unsuitable applicants. It is important to recognise that there is much variability in work
performance that is not directly related to selection scores.

Recruitment
Recruitment refers to the process of attracting suitable candidates to apply for a vacancy arising
within an organization. When an organization needs individuals with certain skill sets, it taps the
market. It may require individuals to join the organization to supplement the existing skill or
complement the existing skills. In both the cases after careful job analysis and manpower
planning an organization develops a candidate profile..
Depending on the size and practices of the organization, recruitment may be undertaken in-house
by managers, human resource generalists and/or recruitment specialists. Alternatively, parts of
the process may be undertaken by either public-sector employment agencies, commercial
recruitment agencies, or specialist search consultancies

[8]

Importance of Recruitment[9]
Human talent is the worlds most sought-after commodity and the process of searching and
attracting this commodity is at the heart of every organization. Recruitment is the process of
searching out and attracting qualified job applicants, which begins with the identification of a
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position that requires staffing, and is completed when resumes and/or completed application
forms are received from an adequate number of applicants.
Once the company identifies the need for hiring, the source and method of recruitment will be
chosen. Organizations can recruit from within the organization and/or outside the organization.
Many organizations begin by recruiting from within to enhance commitment, morale, and
performance. That said, if any vacant positions cannot be filled by eligible employees, the hiring
company must hire externally; most entry-level positions are also usually filled by external
candidates. Online recruiting, which includes accessing internet job boards, using corporate
websites, and using social networking websites, has become one of the most popular external
recruitment methods for many companies
Finally, the recruitment process is completed once a pool of qualified candidates is generated.
The next step is selection, which is the process of choosing among the candidates who have been
recruited.
For any organization, regardless of the size and field, the ability to recruit a qualified workforce
is crucial. As an organizations workforce typically drives the organizations productivity, the
organizations level of performance and competitive advantage is largely dependent on the
quality of its workforce. If you are interested in recruitment or would like to learn more about the
recruitment process, please stay tuned for our upcoming event, Insider Edition: A Recruitment
Panel. This event will give you the opportunity to view career in recruitment from a recruiters
perspective and network with the recruiters present on that day. Be sure to stay connected with
us, as we will be updating with more information.

Recruitment Process[10]
Having the right person, in the right place, at the right time, is crucial to organizational
performance.
Therefore recruitment is a critical activity and should incorporate the following steps:

Step 1 - Whats the job?

Gather information about the nature of the job. Think about:

The content (such as the tasks) making up the job
The jobs purpose
The outputs required by the job holder
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How it fits into the organisations structure

The skills and personal attributes needed to perform the role effectively.
This analysis can form the basis of a job description and person specification.

Step 2 - Prepare a job and person profile

A person specification or job profile states the necessary and desirable criteria for selection.
Increasingly such specifications are based on a set of competencies identified as necessary for
the performance of the job. Include:
Skills, aptitude, knowledge and experience
Qualifications (which should be only those necessary to do the job - unless
candidates are recruited on the basis of future potential , for example graduates)
Personal qualities relevant to the job, such as ability to work as part of a team.
The document formed from the person specification can then be used to inform the criteria you
use to shortlist applicants.

Step 3 Finding candidates

Internal methods :
Staff referrals
Succession planning
Secondments
Job sharing
It is important not to forget the internal talent pool when recruiting. Providing opportunities for
development and career progression is an important factor for employee retention and motivation
External methods : There are many options available for generating interest from individuals
outside the organization.
Online recruitment
Press advertising
Networking
Open days
Advertising remains the most common means of attracting and recruiting. Advertisements should
be Clear and indicate the:
Requirements of the job
Necessary and the desirable criteria for job applicants
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Nature of the organizations activities

Job location
Reward package
Job tenure (for example, contract length)
Advertisements should be genuine and relate to a job that actually exists. They should appeal to
all sections of the community using positive visual images and wording.

Step 4 - Managing the application process

There are two main formats in which applications are likely to be received: the curriculum vitae
(CV) or application form. It is possible that these could be submitted either on paper or
electronically and the use of e-applications (Internet, intranet and email) is now part of
mainstream recruitment practices
Application forms
Application forms allow for information to be presented in a consistent format, and therefore
make it easier to collect information from job applicants in a systematic way and assess
objectively the candidates suitability for the job. Be aware that application form design is also
important under the Disability Discrimination Act 1995, it may be necessary to offer application
forms in different formats.
CVs
The advantage of CVs is that they give candidates the opportunity to sell themselves in their own
way and dont have the restrictions of fitting information into boxes as often happens on an
application form. However, CVs make it possible for candidates to include lots of additional,
irrelevant material which may make them harder to assess consistently.

Step 5 - Selecting candidates

Selecting candidates involves two main processes: short listing and assessing applicants to
decide who should be made a job offer.
Shortlisting
The process of short listing involves slimming down the total number of applications received to
a shortlist of candidates you wish to take forward to the more detailed assessment phase of the
selection process. When deciding who to shortlist, it is helpful to draw up a list of criteria using
the person specification. Each application can then be rated according to these standards, or a
simple scoring system can be used.
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Assessment
A range of different methods can be used to assess candidates. These vary in their reliability as a
Predictor of performance in the job and in their ease and expense to administer. Typical methods
include:
General interview
Competency based interview
In tray exercise
Role play
Presentation

Step 6 - Making the appointment

Contract
Offers of employment should always be made in writing. But it is important to be aware that an
oral offer of employment made in an interview is as legally binding as a letter to the candidate.
References
A recruitment policy should state clearly how references will be used, when in the recruitment
process they will be taken up and what kind of references will be necessary (for example, from
former employers). These rules should be applied consistently.
Medical examinations
It is reasonable to require completion of a health questionnaire where good health is relevant to
the job. Any particular physical or medical requirement should be made clear in the job
advertisement or other recruitment literature.

Step 7 Induction

Induction is a critical part of the recruitment process, for both employer and new employee. An
induction plan should include:
Orientation (physical) - describing where the facilities are
Orientation (organizational) - showing how the employee fits into the team and
how their role fits with the organizations strategy and goals
Health and safety information - this is a legal requirement
Explanation of terms and conditions
Details of the organizations history, its products and services, its culture and
values
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A clear outline of the job/role requirements

This is the process of recruitment which employer may follow to recruit desired candidates

Performance Management[11]
Performance management (PM) includes activities which ensure that goals are consistently being
met in an effective and efficient manner. Performance management can focus on the
performance of an organization, a department, employee, or even the processes to build a
product of service, as well as many other areas.PM is also known as a process by which
organizations align their resources, systems and employees to strategic objectives and priorities.
Performance management originated as a broad term coined by Dr. Aubrey Daniels in the late
1970s to describe a technology (i.e. science imbedded in applications methods) for managing
both behavior and results, two critical elements of what is known as performance.A formal
definition of performance management, according to Daniels' is "a scientifically based, dataoriented management system. It consists of three primary elements-measurement, feedback and
positive reinforcement."

[11]

Application
This is used most often in the workplace, can apply wherever people interact schools,
churches, community meetings, sports teams, health setting, governmental agencies,social events
and even political settings - anywhere in the world people interact with their environments to
produce desired effects. Armstrong and Baron (1998) defined it as a strategic and integrated
approach to increase the effectiveness of companies by improving the performance of the people
who work in them and by developing the capabilities of teams and individual contributors.
It may be possible to get all employees to reconcile personal goals with organizational goals and
increase productivity and profitability of an organization using this process.It can be applied by
organizations or a single department or section inside an organization, as well as an individual
person.
First, a commitment analysis must be done where a job mission statement is drawn up for each
job. The job mission statement is a job definition in terms of purpose, customers, product and
scope.
Following the commitment analysis is the work analysis of a particular job in terms of the
reporting structure and job description. If a job description is not available, then a systems
Page | 19

analysis can be done to draw up a job description. The aim with this analysis is to determine the
continuous critical objectives and performance standards for each job.

Importance of Performance Management(Importance of Performance

Employees are an integral and indispensable part of running your business smoothly and
efficiently. That's why, keeping in mind the crucial role of your employees, a recent trend known
as Performance Management has come into practice. Using performance management, you can
ensure that your employees not only fulfill their responsibilities, but do so to the best of their
abilities and up to your expectations.

[12]

Performance management allows you to tap the full potential of your staff. In short, it can be
described as a comprehensive process starting from monitoring and developing the desired traits
to rating their progress and rewarding them for their achievements.

Involve Employees in the Planning Stage

The mere making of plans alone will not help you to run your business successfully. You must
also focus on the appropriate ways to get business tasks done. One way of doing this efficiently
is to involve your employees in the planning process. This will not only boost their morale and
confidence, but also help you avoid any communication gaps in the process.Additionally, it will
also help in providing them with a clear picture of what you expect from them and what they
need to accomplish.

Monitoring the Progress of Your Employees

Just as revision of business plans is sometimes necessary for the success of your business,
measuring the performance of every employee is also important. This ensures that tasks are
efficiently completed on time and on or under budget. It also points out to you any shortcomings
of either your staff or business plans, and helps you to take the appropriate corrective actions.

Ensuring All Around Development of Employees

Performance management gives you the tools to instill the desired qualities in your employees in
order to get the job done. Development is not limited to only individuals in your workplace, but
also addresses the performance of the team as a whole. All around employee development not
only ensures the personal and professional growth of your employees, but also the expansion and
improvement of your business.

Page | 20

Evaluation of Individual Performance

Evaluating and rating the performance of your employees on an individual basis is essential. This
gives them a clear picture of where they presently stand, areas that they need to work on and
what they are good at. This way, they can focus more on their weaknesses and work to
strengthen those areas.

Rewarding Employees

Rewarding and appreciating your employees' efforts ensures that their level of their performance
and consequently the performance of business is not compromised. It ensures optimum
productivity, performance and maximum profitability.
Rewarding staff for a job well done not only enhance their performance but also serves as a tool
to keep them motivated. Therefore, performance management is an effective system that allows
you to achieve the financial goals of business.

Performance Appraisal
A performance appraisal (PA), performance review, performance evaluation,(career)
development discussion or employee appraisal is a method by which the job performance of an
employee is documented and evaluated. Performance appraisals are a part of career development
and consist of regular reviews of employee performance within organizations

[13]

A performance appraisal is a systematic and periodic process that assesses an individual

employees job performance and productivity in relation to certain pre-established criteria and
organizational objectives.Other aspects of individual employees are considered as well, such as
organizational citizenship behavior, accomplishments, potential for future improvement,
strengths and weaknesses, etc.

Benefit of performance appraisal

There are a number of potential benefits of organizational performance management conducting
formal performance appraisals (PAs). There has been a general consensus in the belief that PAs
lead to positive implications of organizations.Furthermore, PAs can benefit an organizations
effectiveness. One way is PAs can often lead to giving individual workers feedback about their
job performance.

Page | 21

Other potential benefits include:

Facilitation of communication: communication in organizations is consideration

essential function of worker motivation. It has been proposed that feedback from PAs aid
in minimizing employees perceptions of uncertainty.

Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or

issues may distract employees from their work, and trust issues may be among these
distracting factors. Such factors that consume psychological energy can lower job
performance and cause workers to lose sight of organizational goals.

Goal setting and desired performance reinforcement: organizations find it efficient to

match individual workers goals and performance with organizational goals.PAs provide
room for discussion in the collaboration of these individual and organizational goals.

Performance improvement: well constructed PAs can be valuable tools for

communication with employees as pertaining to how their job performance stands with
organizational expectations At the organizational level, numerous studies have reported
positive relationships between human resource management (HRM) practices and
performance improvement at both the individual and organizational levels.

Compensation
Compensation is the total amount of the monetary and non-monetary pay provided to an
employee by an employer in return for work performed as required

[14]

Compensation is based on:

Market research about the worth of similar jobs in the marketplace,

Employee contributions and accomplishments,

The availability of employees with like skills in the marketplace,

The desire of the employer to attract and retain a particular employee for the value they
are perceived to add to the employment relationship, and

The profitability of the company or the funds available in a non-profit or public sector
setting, and thus, the ability of an employer to pay market-rate compensation.

Compensation also includes payments such as bonuses, profit sharing, overtime pay,
recognition rewards and checks, and sales commission. Compensation can also include
Page | 22

non-monetary perks such as a company-paid car, stock options in certain instances,

company-paid housing, and other non-monetary, but taxable, income items.
Importance of Compensation Management

[15]

A good compensation is must for every business organization and helps in the following
way:

It tries to give proper return to the workers for their contributions to the organization.

It imparts a positive control on the efficiency of employees and encourages them to

perform better and achieve the specific standards.

It forms a basis of happiness and satisfaction for the workforce that minimizes the labour
turnover and confers a stable organization.

It augments the job evaluation process which in turn helps in setting up the more realistic
and achievable standards.

It is designed to comply with the various labour acts and therefore does not result in
disputes between the employee union and the management. This builds up a peaceful
relationship between the employer and the employees.

It arouses an environment of morale, efficiency and cooperation among the workers and
provides satisfaction to the workers.

It stimulates the employees to perform better and show their excellence.

It provides growth and advancement opportunities to the deserving employees.

Types of Compensations

Direct Compensation is typically made up of salary payments and health benefits. The
creation of salary ranges and pay scales for different positions within the company are the
central responsibility of compensation management staff. Direct compensation that is in
line with industry standards provides employees with the assurance that they are getting
paid fairly. This helps the employer avoid the costly loss of trained staff to a competitor.

Indirect Compensation focuses on the personal motivations of each person to work.

Although salary is important, people are most productive in jobs where they share the
company's values and priorities. These benefits can include things like free staff
development courses, subsidized day care, the opportunity for promotion or transfer
within the company, public recognition, the ability to effect change in the workplace, and
service to others.
Page | 23

Components of Compensation

Wages and Salary: Wages represent hourly rates of pay, and salary refers to the
monthly rate of pay, irrespective of the number of hours put in by an employee. These
are subject to annual increments.

Allowances: Several allowances are paid in addition to basic pay. Some of these
allowance are given below:
Dearness Allowance: This allowance is given to protect real income against

inflation. Generally, dearness allowance (DA) is paid as a percentage of basic pay.

House Rent Allowance: Employers who do not provide living accommodation
pay house rent allowance (HRA) to employees. This allowance is calculated as a percentage
of basic pay.
City Compensatory Allowance: This allowance is paid generally to employees
in metros and other big cities where cost of living is comparatively high. City compensatory
allowance (CCA) is generally a fixed amount per month (30 per cent of basic pay in case of
government employees).
Transport Allowance/Conveyance Allowance: Some employers pay transport
allowance (TA) to their employees. A fixed sum is paid every month to cover a part of
traveling charges

Incentives: Incentive compensation is performance-linked remuneration paid with a view

to inspire employees to work hard and do better. Both individual incentives and group
incentives are used. Bonus, profit-sharing, commissions on sales are some examples of
incentive compensation
Fringe Benefits/Perquisites: These include employee benefits such as provident
fund, gratuity, medical care, hospitalization, accident relief, health and group
insurance, canteen, uniform, recreation.

Page | 24

Training and development

Training and development is a function of human resource management concerned with
organizational activity aimed at bettering the performance of individuals and groups in
organizational settings. It has been known by several names, including "human resource
development", and "learning and development

[16]

Training and development encompasses three main activities: training, education, and
development

Training: This activity is both focused upon, and evaluated against, the job that an
individual currently holds

Education: This activity focuses upon the jobs that an individual may potentially hold in
the future, and is evaluated against those jobs.

Development: This activity focuses upon the activities that the organization employing
the individual, or that the individual is part of, may partake in the future, and is almost
impossible to evaluate.

Importance of training

Improves morale of employees- Training helps the employee to get job security and job
satisfaction. The more satisfied the employee is and the greater is his morale, the more he
will contribute to organizational success and the lesser will be employee absenteeism and
turnover.

Less supervision- A well trained employee will be well acquainted with the job and will
need less of supervision. Thus, there will be less wastage of time and efforts.

Fewer accidents- Errors are likely to occur if the employees lack knowledge and skills
required for doing a particular job. The more trained an employee is, the less are the
chances of committing accidents in job and the more proficient the employee becomes.

Chances of promotion- Employees acquire skills and efficiency during training. They
become more eligible for promotion. They become an asset for the organization.

Increased productivity- Training improves efficiency and productivity of employees.

Well trained employees show both quantity and quality performance. There is less
wastage of time, money and resources if employees are properly trained.

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Addressing Weaknesses-Most employees have some weaknesses in their workplace

skills. A training program allows you to strengthen those skills that each employee needs
to improve. A development program brings all employees to a higher level so they all
have similar skills and knowledge

Training Need Analysis

Performing a training needs analysis is the first step in the training process and is critical for a
successful program. The purpose of a needs analysis is to determine that training is the best
solution and identify what training is needed to fill the skill gap. This step is often disregarded
for reasons such as time constraints or lack of perceived value by management. However,
skipping the training needs analysis can cause major problems. Time, resources and dollars may
be wasted on training that was unnecessary or

[16]

Process of TNA

Step One Identify Problem Needs: Here organization determine circumstance for
training request. They identify potential skill gap and set objectives.

Step Two Determine Design of Needs Analysis: Here Organization establish method
selection criteria, and assess advantages and disadvantages for methods.

Step Three Collect Data : To collect data organization conduct interviews, administer
surveys and questionnaires, observe people at work, review document.

Step Four Analyze Data : Here organization conduct qualitative or quantitative

analysis and determine solutions and recommendations.

Step Five Provide Feedback : Organization in this step write report and make oral
presentation.

Step Six Develop Action Plan : Here organization use results as the basis for training
design, development and evaluation

Although conducting a step-by-step training needs analysis is recommended, the reality is that
time and resources are not always available for this type of effort. In these situations, dont
simply write off the analysis completely

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Methods of Training: [17]

The method of Training are

Cognitive methods.

Behavioral methods.

On job training

Off job training

In cognitive method training are

Lecture : It is one of the oldest methods of training. This method is used to create
understanding of a topic or to influence behavior, attitudes through lecture. A lecture can
be in printed or oral form. Lecture is telling someone about something. Lecture is given
to enhance the knowledge of listener or to give him the theoretical aspect of a topic.
Training is basically incomplete without lecture.

Demonstration: This method is a visual display of how something works or how to do

something. As an example, trainer shows the trainees how to perform or how to do the
tasks of the job. In order to be more effective, demonstration method should be should be
accompanied by the discussion or lecture method.

Discussion : This method uses a lecturer to provide the learners with context that is
supported, elaborated, explains, or expanded on through interactions both among the
trainees and between the trainer and the trainees. The interaction and the communication
between these two make it much more effective and powerful than the lecture method.

Computer based training : With the worldwide expansion of companies and changing
technologies, the demands for knowledge and skilled employees have increased more
than ever, which in turn, is putting pressure on HR department to provide training at
lower costs. Many organizations are now implementing CBT as an alternative to
classroom based training to accomplish those goals.

Page | 27

The methods of training under behavioral approach are:

Games and Simulations : Games and Simulations are structured and sometimes
unstructured, that are usually played for enjoyment sometimes are used for training
purposes as an educational tool. Training games and simulations are different from work
as they are designed to reproduce or simulate events, circumstances, processes that take
place in trainees job.

Behavior Modeling : : Behavior Modeling uses the innate inclination for people to
observe others to discover how to do something new. It is more often used in
combination with some other techniques.

Case Studies : Case Studies try to simulate decision making situation that trainees may
find at their work place. It reflects the situations and complex problems faced by
managers, staff, HR, CEO, etc. The objective of the case study method is to get trainees
to apply known concepts and ideologies and ascertain new ones.

Role play : Role play is a simulation in which each participant is given a role to play.
Trainees are given with some information related to description of the role, concerns,
objectives, responsibilities, emotions, etc. Then, a general description of the situation,
and the problem that each one of them faces, is given. For instance, situation could be
strike in factory, managing conflict, two parties in conflict, scheduling vacation days, etc.
The methods of training under on the job are:
Coaching
Mentoring
Job rotation
The methods of training under on the job are:
Sensitivity Training
Transactional Training
Lectures

Page | 28

Employee Welfare
Welfare includes anything that is done for the comfort and improvement of employees and is
provided over and above the wages. Welfare helps in keeping the morale and motivation of the
employees high so as to retain the employees for longer duration. The welfare measures need not
be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of
working conditions, creation of industrial harmony through infrastructure for health, industrial
relations and insurance against disease, accident and unemployment for the workers and their
families.Labor welfare entails all those activities of employer which are directed towards
providing the employees with certain facilities and services in addition to wages or salaries.
The basic features of labor welfare measures are as follows

[18]

Labor welfare includes various facilities, services and amenities provided to workers for
improving their health, efficiency, economic betterment and social status.

Welfare measures are in addition to regular wages and other economic benefits available
to workers due to legal provisions and collective bargaining

Labor welfare schemes are flexible and ever-changing. New welfare measures are added
to the existing ones from time to time.

Welfare measures may be introduced by the employers, government, employees or by

any social or charitable agency.

The purpose of labor welfare is to bring about the development of the whole personality
of the workers to make a better workforce.

Scheme of employee Welfare:

Organizations provide welfare facilities to their employees to keep their motivation levels high.
The employee welfare schemes can be classified into two categories viz. statutory and nonstatutory welfare schemes. The statutory schemes are those schemes that are compulsory to
provide by an organization as compliance to the laws governing employee health and safety.
These include provisions provided in industrial acts like Factories Act 1948, Dock Workers Act
(safety, health and welfare) 1986, Mines Act 1962. The non statutory schemes differ from
organization to organization and from industry to industry.

[19]

Page | 29

Statutory Welfare Scheme

Drinking Water: At all the working places safe hygienic drinking water should be
provided.

Facilities for sitting: In every organization, especially factories, suitable seating

arrangements are to be provided.

First aid appliances: First aid appliances are to be provided and should be readily
assessable so that in case of any minor accident initial medication can be provided to
the needed employee.

Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in
the office and factory premises and are also to be maintained in a neat and clean
condition.

Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to

provide hygienic and nutritious food to the employees.

Spittoons: In every work place, such as ware houses, store places, in the dock area
and office premises spittoons are to be provided in convenient places and same are to
be maintained in a hygienic condition.

Lighting: Proper and sufficient lights are to be provided for employees so that they
can work safely during the night shifts

Washing places: Adequate washing places such as bathrooms, wash basins with tap
and tap on the stand pipe are provided in the port area in the vicinity of the work
places.

Changing rooms: Adequate changing rooms are to be provided for workers to change
their cloth in the factory area and office premises. Adequate lockers are also provided
to the workers to keep their clothes and belongings.

Rest rooms: Adequate numbers of restrooms are provided to the workers with
provisions of water supply, wash basins, toilets, bathrooms, etc.

Non Statutory Welfare Scheme

Personal Health Care (Regular medical check-ups): Some of the companies provide the
facility for extensive health check-up

Flexi-time: The main objective of the flextime policy is to provide opportunity to

employees to work with flexible working schedules. Flexible work schedules are initiated
Page | 30

by employees and approved by management to meet business commitments while

supporting employee personal life needs

Employee Assistance Programs: Various assistant programs are arranged like external
counseling service so that employees or members of their immediate family can get
counseling on various matters.

Harassment Policy: To protect an employee from harassments of any kind, guidelines are
provided for proper action and also for protecting the aggrieved employee.

Maternity & Adoption Leave Employees can avail maternity or adoption leaves.
Paternity leave policies have also been introduced by various companies.

Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance

coverage of employees for expenses related to hospitalization due to illness, disease or
injury or pregnancy.

Employee Referral Scheme: In several companies employee referral scheme is

implemented to encourage employees to refer friends and relatives for employment in the
organization.

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and
satisfied labor force for the organization. The purpose of providing such facilities is to make their
work life better and also to raise their standard of living.

Limitation

Dependency on secondary information,

Wrong information provided by the organization,

Usage of assumption

Lack of Co operation to the employees.

Refuse to proving all HR issues as they are confidential

Time limitation

Data redundancy

Misinterpretation of questionnaire by some employees

Less using of primary data source.

Page | 31

Introduction

Chapter
One

Page | 32

Chapter 1
Introduction
1.1 Company profile
Mercantile Bank Limited is one of the famous & oldest private banks in Bangladesh. It is a
scheduled private commercial Bank established on May 20, 1999 under the Bank Company Act
1991 by Mr. Abdul Jalil (MP), & registered as a Public Limited Company under Companies Act,
1994. The Bank started commercial Banking operations for both organizations & individuals
from June 02, 1999. From then within a short time MBL established itself in a strong position in
the economy of the country having 35 branches all over the country. It has earned significant
reputation in the countrys Banking sector as a Bank & created a wide image in the eye of the
people by helping people in investing their money earn profits & serving different organizations
to save their money is secured place along with investing in different other businesses for profit,
organizational development, countrys economic growth & exchanging money & dealing
international business in foreign currency. The dream of creating MBL, which is A Bank of
21st Century, & fulfilling its will to become Banglar Bank as its title says has become
successful because of the initiative of some persons who are the sponsors of MBL. There are 30
sponsors in Mercantile Bank Limited and all of them are highly regarded for their entrepreneurial
competence.

1.2 Vision and Mission

Vision
Would make finest corporate citizen
Mission
Will become most caring, focused for equitable growth based on diversified deployment of
resources and nevertheless would remain healthy and gainfully profitable bank

Page | 33

1.3 Objectives
1.3.i Strategic objectives

to increase shareholders' value

to achieve economic value addition

to be market leader in product innovation

to be one of the top three financial institutions in Bangladesh in terms of efficiency

to be one of the top five financial institutions in Bangladesh in terms of market

share in all significant market segments we serve

1.3.ii Financial objectives

To achieve 20% return on shareholders' equity or more, on average.

1.4 Core values

1.4.i For the customers

providing with caring services by being innovative in the development of new banking
products and services

For the shareholders

Increase shareholders' value

For the employees

Respecting worth and dignity of individual employees devoting their energies for the
progress of the bank

For the community

Strengthening the corporate values and taking environment and social risks and reward
into account

New technology

Adopting the state-of-the art technology in banking operations

Page | 34

1.5 Organogram
Chairman
PresidentExecutive
Board of Directors Vice Presidentman

Chief Advisor

Managing Director& CEO

Deputy Managing Director

Senior Executive Vice

President

Company Secretary

Executive Vice

Senior Vice President

President
Vice President

First Vice President

Assistant Vice President

First Assistant Vice

Principle Officer

Senior Executive Officer

Executive Officer

Officer

Assistant Officer

Trainee Asst: Officer

Page | 35

1.6 Products of Mercantile Bank limited

1.6.i SME Financing
SME Financing
Small and Medium Enterprises (SME) is considered as thrust sector of the economy. SME is the
Engine of Growth as this sector churns out 20%-25% of the country's GDP growth.
In order to promote the SMEs, MBL has following arrays of products befitting the requirements
of the diversified segments and sectors of the economy.
CHAKA (Term Loan)
To make business expansion and procure capital machinery and other fixed assets of the
business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Collateral free up to Tk 8.00 lac with the applicable conditions.

Repayment period- 12 months to 60 months.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

SAMRIDDHI (Continuous Loan)

To meet up any acceptable working capital requirement of the business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Repayment period- 12 months, which is renewable.

Minimum 2 years experience in the respective field of business.

Page | 36

MOUSUMI (Short Term Seasonal Loan)

To meet up short term seasonal need of the business.

Loan Limit Tk 0.50 lac to Tk 100.00 lac.

Repayment period- Maximum 9 (nine) months.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

ANANNYA (Women Entrepreneur's Loan)

Loan Limit Tk 0.50 lac to Tk 50.00 lac @ 10% interest p.a.

Collateral free up to Tk 8.00 lac in case of Term Loan with the applicable
conditions.

Repayment period- 12 months to 60 months for Term Loan and 12 months

for Continuous Loan, which is renewable.

Minimum 2 years experience in the respective field of business.

The project must be financially, economically and commercially viable.

1.6.ii Retail Banking

Current Deposit Account
Current Deposit Account is the net flow of current transactions with no restriction. It is an easyto-use, convenient current account. Current Deposit Accounts are suitable for those customers
who need unlimited transactions because of no restriction on withdrawal either in amount or in
frequency.
Types of Current Deposit Account

Individuals

Two or more persons jointly

Sole Proprietorship Concerns

Partnership Firms
Page | 37

Limited Companies (Both Public and Private)

Societies / Clubs / Associations / Local Bodies

Banks

Govt. / Semi Govt. Offices / Corporations / Autonomous bodies.

Others

Required Documents

Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

Duly attested photocopy of valid Passport / Employers Certificate ID

Card

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone
Bill / Gas Bill / WASA Bill, etc. in the name of applicant

Saving Deposit Account

This account has been designed and developed for savers who want to save their income. There
are restrictions of withdrawal in both amount and frequency. Rate of Interest is 6.00%.Savings
Account may be opened in the name of

Individual (Single).

Two or more individuals (joint) who are not partners.

Minor jointly with Natural / Legal Guardian.

Clubs / Societies / Associations or Similar Institutions / non-profit

organizations.
Page | 38

Required Documemnts

Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

Duly attested photocopy of valid Passport / Employers Certificate / ID

Card / Driving Licence / Voter ID Card / National ID Card or Certificate
about credentials by the local Ward Commissioner / Chairman of Union
Parishad.

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone
Bill / Gas Bill / WASA Bill, etc. in the name of applicants

Special Noticed Deposit Account

Any individual or corporate body can open Special Notice Deposit Account, which is an interest
bearing deposit account, for a short period of time. However, 7 days of notice is required if the
customer wishes to withdraw money from this account.
Features & Benefits

Attractive Interest Rates

Customer has to notify 7 days before withdrawing money.

MICR Cheque Book with every SND account is a must.

Service Charge: NIL

Account Maintenance Fee: Maximum BDT 500.00 Only (half yearly

basis)

Account Closing Fee: Maximum BDT 300.00 Only

Page | 39

Fixed Deposit Account

Unlike CD, SND and SB account, Branch shall accept deposit of fixed amount of money from
the customers for a fixed period of time with interest under the term plan time to time. FDR is
neither Transferable nor Negotiable and as such payment against this instrument with interest
shall normally be made to the depositor on maturity. Payment against FDR can also be made to
nominee or assignee after observing essential formalities.
Fixed Deposit Account can be opened in the name of

Individual (Single).

Two or more persons (joint).

Sole Proprietorship Concern.

Partnership Concern (Firm).

Limited Companies (both Public and Private).

Society / Club / Association / Local Bodies / Govt. / Semi

Govt. Organization, etc.

Opening of Fixed Deposit A/C

Required Documents

Name of applicant(s) together with name(s) of parents and spouse(s).

Present and Permanent Address.

Date of Birth.

Nationality.

TIN (if any).

Duly attested photocopy of valid Passport / Employers Certificate / ID

Card / Driving Licence / Voter ID Card / National ID Card or Certificate
about credentials by the local Ward Commissioner / Chairman of Union
Parishad.

Two copies of recent passport size Photographs of account holder duly

attested by the Introducer.

Page | 40

One copy of Passport Size Photograph of Nominee duly attested by the

Account Holder.

Copies of Utility Bills, viz. Electricity Bill / Land Phone bill / Cell Phone
Bill / Gas Bill / WASA Bill, etc. in the name of applicants.

Double Benefit Deposit Scheme (DBDS)

Objectives

Give maximum benefit.

Help in meeting specific needs like education, marriage etc.

Deposit becomes double in Six years.

Mode

Tenure of the deposit is Six years.

Features

The Minimum amount of deposit is BDT 10,000.00(Ten Thousand) or its

multiples.

All taxes/duty/levy and /or any other surcharges presently in force or that may be
imposed by the Government of Bangladesh (GOB) from time to time will be
deducted/ recovered from the deposit account under this scheme.

Loan may be granted up to maximum 80% of the deposited amount but minimum
principle amount must be BDT 20,000.00.

Loan processing fee be realized BDT 50.00 only and usual stamp costs also be
realized.

Page | 41

Family Maintenance Deposit (FMD)

Objectives

Help the retired persons for investing their retirement benefits.

Create investment opportunities for Non-Resident Bangladeshi.

Explore investment opportunities for school, college, university etc.

Give investment opportunities for Trust; Foundation etc.

Deposit a fixed amount of money for a minimum tenure of 03 (Three) year

to a maximum tenure of 05 (Five) years.

Features

The Minimum amount of deposit is BDT 50,000.00 (Fifty thousand) or its

multiples.

All taxes/duty/levy and /or any other surcharges persently in force or that may be
imposed by the Government of Bangladesh (GOB) from time to time will be
deducted/ recovered from the deposit account under this scheme.

In case of premature encashment interest will be paid on Saving A/C Rate.

Loan may be granted up to maximum 80% of the forced encashment value on the
date of loan processing.

Loan processing fee be realized BDT 50.00 only and stamp costs also be realized

Times Benefit Deposit Scheme

Under the 1.5 Times Benefit Deposit Scheme a deposit of minimum BDT 50,000.00 (fifty
thousand) or its multiples will be received for a period of 51 months (4 years & 3 months). On
maturity after 51 months.

Page | 42

Features

All taxes/duty/levy and /or any other surcharges presently in force or that may
be imposed by the Government of Bangladesh (GOB) from time to time will be
deducted/ recovered from the deposit account under this scheme.

In case of premature encashment interest will be paid on Saving A/C Rate.

However, no interest shall be paid if premature encashment take place before
expiry of 1 (one) year.

In the event of death of the depositor before the maturity, the deposit account
may be encased (premature) as per rule or may be continued up to maturity on
written approach by the nominee(s).

A saving account will be needed to be maintained to receive quarterly benefit

payment.

Loan processing fee be realized BDT 50.00 only and usual stamp costs also be
realized.

1.6.iii Loans
Consumers Credit Scheme
Objectives

Help fixed-income people for buying house hold durable.

For the amount up to Tk. 1,00,000 the period is two years.

Interest rate will be charged quarterly rest.

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Doctors' Credit Scheme

Objectives

Help new F.C.P.S. or post-graduate doctors for setting up chambers and buying
medical equipment.

Help experienced doctors for refurbishing chambers and buying medical

equipment.

Assist private clinics for acquiring modern medical equipment.

Minimum income

Tk. 25,000.00 for General Practitioner.

Tk. 40,000.00 for Specialized doctor.

Work Experience

For general practitioners having practice length of 3 years.

For specialized Doctors having practice length of 5 years.

Down Payment

10% of general practitioners

20% of the specialized doctors.

30% of owners, hospital or diagonstic center

Interest rate
The interest rate is subject to change based on the market conditions and policy of
the Bank.

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Education Loan
Mercantile Bank Limited Education Loan may be availed by any student of Bangladeshi
National with excellent educational track record to provide financial assistance for furthur
educational purposes like study abroad or within the country.
Eligibility
Applicant must be enrolled as a student in Public/Private University in case of pursuing higher
studies in home for undergraduate and post-graduate program.
Age Limit
Age of the Applicant should be in between 18 to 30 years 9at the time of disbursement of loan)
Qualification

Holds excellent result in SSC/HSC/O-Level/A-Level or equivalent from any

recognized educational instituition at home or abroad for pursuing undergraduate
course in home.

Holds excellent result in SSC/HSC/O-Level/A-Level or equivalent from any

recognized educational instituition at home or abroad for pursuing post-graduate
courses in home or abroad as well.

Educational program must commensurate with the career prospect of the

borrower.

Loan Limit

For Studies in Bangladesh: Maximum Tk. 5.00 Lac

For Studies Abroad: Maximum Tk. 20.00 Lac

Page | 45

Expenses considered for Loan

Fees payable to University/College/Hostel

Examination/Library/Laboratory Fee

Purchase of Books/Equipments/Instruments/Uniforms

Travel Expenses/Passage money for studies abroad

Purchase of Computers - essentials for completion of the course

Boarding and lodging expenses in recognized Boarding Houses/private

accommodations

Any other expense required to complete the course - like study tours, project
work, thesis, etc.

Car Loan
The facility is designed with easy repayment schedule, that gives you the opportunity to own a
new/Reconditioned Car, to materialize your cherished dream.
Eligibility

Govt. Officials

Semi-Government Officials

Employees of Autonomous Bodies

Employees of Banks and other Financial Institutions

Employees of Multinational Companies

Employees of reputed Private Organizations

Professionals: Doctors / Engineers / Accountants

Teachers and staff of Public / private Universities

Businessmen & Others

Loan Limit

Upto Tk. 15.00 Lac for Reconditioned Cars &

Upto Tk 20.00 Lac for Brand New Cars

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Home Loan
Residing at own home/flat is a long cherised dream to everyone. To materialize this dream,
Mercantile Bank Ltd is beside you offering easy to avil competitive Home Loan with lucrative
features.
Our Strength

We ensure smooth and prompt disposal of the loan for your dream house to turn
into reality.

We offer most competitive interest rate with easy to access terms and conditions.

Purpose

Purchase of Flats/Apartments.

Construction of House.

Extension of House.

Renovation of House.

Finishing Works of Building.

Taking over of regular House Building from other Banks/Fls.

Eligibility

Bangladeshi National

Regular Employees of Govt. / Semi/Autonomous Bodies / Multinational

Companies/ Public Ltd. Co. / Private Ltd. Companies etc.

Self employed Professionals.

Businessman.

Teachers of Universities / Colleges / Schools and established educational

institutions in the Public and Private Sectors.

Age limit 21-60 years (including repayment period).

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Cottage Loan
Purpose
For individual to build up or construct of semi-pucca building of 2 types along with pure
drinking water facility:
- Foundation up to plinth level, pucca floor, brick wall, roof of corrugated iron sheet/tiles, or
- Foundation up to plinth level, pucca floor, corrugated iron sheet fencing, root of corrugated iron
sheet/tiles.
Loan limit
Up to 70% of the total cost of semi-pucca/ corrugated iron sheet fencing construction and pucca
floor space along with pure drinking water facility/tube-well will be inclusive in the project cost.
However total loan amount shall not exceed Tk. 10 lac in any case.
Age limit
From 21 years to 60 Years
Note: Age bar may be relaxed/waved by the Managing Director & CEO of the Bank on
acceptable grounds.
Loan Processing Fee
0.50% of the loan amount plus 15% VAT on the processing fees.
Interest rate
Interest Rate

Page | 48

Overseas Employment Loan

Features

Purpose: To support for smooth departure for overseas employment of unemployed

youths from the country & to save them & their families from borrowing money at higher
rate of interest from illustrious class or village mohajon

Eligibility: Any Bangladeshi National intends to go abroad for employment

Loan Limit: Maximum Tk.2.50 lac

Tenure: Max. 03 years with 01 months grace period

Age Limit: 18-45 years

Interest, Fees & Charges:

- 14% interest p.a.

- Tk.200/- for loan application form
- 1% above over the prescribed rate on overdue amount as penal interest
- 2% on outstanding amount for early settlement
Criteria for selection of borrower
Any Bangladeshi permanent inhabitant of a particular locality intends to go abroad for
employment
Analysis of Credit Proposal/Feasibility study

Status of guardian

Net-worth of guardian

Status of guarantor

Page | 49

Required Documents

Bio-Data of the applicant with 02 referees

Photocopy of valid Bangladeshi Passport

Copy of work permit

Copy of clearance from the Bureau of Manpower, Employment &

Training (BMET)

Copy of appointment letter

Clean/satisfactory CIB

Credit Cards

MBl Visa Gold

MBL Visa Classic

MBL International Credit Cards

Debit Cards

Master card Debit Card

ATM cards

1.6.iv Online Banking

Online Banking have been activated in all Branches of the Bank from January 01, 2006. Online
service is now available for all customers - Both Cash deposit and withdrawals, Cheque Deposits
and Transfer in CD, SB, STD, Loan accounts (Cheque Bearing within limit) and Monthly
Savings Scheme (MSS).

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1.6.v Mobile Banking

Like in many other countries, people in Bangladesh started believing in mobile banking. With
the approval of Bangladesh Bank, MBL is going very speedy to introduce mobile banking
throughout the country. In Mobile Banking system, basic mobile handsets are being used as bank
accounts and will serve as a wallet for the transaction of money, especially for the un-banked
people. As 99 percent of the people of Bangladesh are under the mobile phone network, almost
all will have access to the formal fi nancial channel. If the banks can reach out to the unbanked
people, the dream of more people having bank accounts can be fulfill

1.6.vi SMS Banking

Features
Your Bank at your Fingertip
As the time goes by, life style changes. To keep up, MBL welcomes you to SMS Banking
Service, one of the most modern banking services. MBL SMS banking Service is convenient,
safe, low-cost, fast and available round the clock.
MBL SMS Banking Service offers:

Access to account balance

Last 3 transaction inquiry

Cheque status inquiry

Application Formality
Fill in the attached form clearly and completely and just send in or drop it to the branch that
maintains your account.
SMS format and Key words
Response: All commands and SMS format will be sent to your mobile phone.
Page | 51

Write: Help#PIN#Keyword
Send to : 01713044838
Response: Keyword usages and details.

1.6.vii Corporate Banking

Short Term Finance
Short-term loans are used to finance inventory, account receivables or other current assets i.e. to
finance the working capital requirement. Forms of short-term loan are given below:
a. Cash Credit (CC):
Cash credit account is like a current account with a limit up to which one can withdraw from the
bank. Cash credit is normally sanctioned for a period of one year where a regular limit is
sanctioned against goods to meet day to day expenses of business.
b. Secured Overdraft (SOD-General):
Under this, a regular limit is sanctioned to meet day to day expenses of business. This form of
credit is given to the business where maintenance of stock on a regular basis is not possible. The
account is adjusted by the sale proceeds or from own source of the customer.
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c. Bill Discounted and Purchased:

Mercantile Bank gives advances to customers by discounting or purchasing their bills of
exchange. Such bills of exchange arise out of commercial transactions both in inland trade and
foreign trade

1.6.viii Long Tern Finance

Long-term loans are used to finance equipment, real estate and other fixed assets. The forms of
long-term loan are given below:
a. Lease Financing:
Under lease financing we cover equipment/vehicle financing. It is a term financing repayable
through lease rental in the form of equal monthly installments. Ownership of the leased out
vehicle under the lease agreement covering comprehensive risks belongs to the Bank.
b. Hire Purchase:
This is also given to procure equipment/vehicle. Ownership of the equipment/vehicle to be
purchased under the Hire-Purchase agreement covering comprehensive risks belongs to both the
Banker and the customer. Hire-Purchase facility is repayable by depositing equal monthly
installments (including principal and interest amount).
d. Term Loan for NBFIs:
Term loan for NBFIS is provided to enable their financing activities to others. It is given as per
instruction of Bangladesh Bank circulars and at a lower interest rate based on some grading of
the NBFIs.

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1.6.ix Import Finance/Trade Finance

a. Letter of Credit (L/C):
Importers are given this sort of facility to import different commodity items, capital machinery
and any other permissible items. L/C related shipping document is kept as primary security. Cash
margin and counter guarantee are obtained from the customer to secure its position.
b. Loan against Trust Receipt (LTR):
Loan against Trust Receipt (LTR) is a funded facility provided to importer to retire L/C related
shipping documents. Advance against a LTR obtained from the customer is allowed when the
documents covering an import shipment are given without payment. The customer holds the
goods or their sale proceeds in trust for the bank until the LTR is fully paid off. Letter of Trust
Receipt is kept as primary security, which creates the banker's lien on the goods.

1.6.x Work Order Financing/Construction Business

This form of credit facilities is allowed to contractors to participate in tenders under different
authorities and to complete their awarded works. The following types of facilities fall under this
category
a. Earnest Money Financing Scheme- SOD (EMF):
Under this, bank guarantee or undertaking is issued by our bank in the form of SDR/PO on
behalf of customers (mostly contractors) to enable to submit his bid in a tender invited by
different Government/ Semi-Govt. Organizations, Autonomous Bodies or other organizations
accepted to the Bank.
b. Bid Bond:
Under this, bank guarantee or undertaking issued by our bank on behalf of its customers (mostly
contractors) to enable to submit his bid in a tender invited by different Government/ Semi-Govt.
Organizations, autonomous bodies or other organizations accepted to the Bank.
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c. Performance Guarantee (PG):

A performance guarantee is given after the tender or bid of a particular customer is accepted by
the authority. It is a guarantee where the Bank gives an undertaking to the authority that
customer will complete the job as per terms of the tender or to pay damage up to the guarantee
amount.
d. Shipping Guarantee:
Under this, Bank give guarantee / indemnity to shipping company for release of goods in the
absence of shipping documents, in case goods arrive before receipt of such documents by the
consignee and are incurring demurrage or original shipping documents have been lost after
retirement from Bank.

1.6.xi Structured Finance

Mercantile Bank offers customized, friendly, and flexible financial solutions to customers and
strives to ensure financing package in a cost-effective manner.
a. Project Finance:
Project Finance is a long-term credit arrangement with a debtor related to the development and
construction of infrastructure or a large commercial or industrial project. The technique involves
mobilization of debt, equity, contingent equity, hedges and a variety of limited guarantees
through a newly organized company, partnership or contractual joint venture, often referred to as
Special Purpose Vehicle ("SPV"), for the purpose of building a capital intensive facility and
operating a discrete business activity.
b. Syndication:
"Syndicated Loan" as loans extended by multiple banks where the overall credit involved
exceeds an individual lenders legal lending or other limits. It is made available by a group of FIs
in pre-defined proportions under the same credit facility following common loan documentation
formalities
Page | 55

1.7 CSR
MBL believes that, true success does not consist in profit maximization only rather in doing
something for the betterment of deprived part of the society. With this consideration, MBL has
established a foundation in the name and style, Mercantile Bank Foundation in 2000, just after
a year of its inception, to work for the distressed and disabled people. Mercantile Bank
Foundation has always been playing an imperative role in the social life of the country hroughout
its course of Compassionate operation.
Investment in CSR programs is always supported and encouraged by the Board of Directors.
Additionally, Bank has a separate CSR Desk to support such activities.Segment wise
contribution under CSR activities of Mercantile Bank Foundation in 2012 is furnished below:

CSR Contribution

Education

16%
27%

Disaster Management
Sports
20%

2%
3%
32%

Health
Art & Culture
Other

Figure 1.1 CSR Contribution

Page | 56

1.7.i Objectives of Mercantile Bank Foundation

Mercantile Bank Foundation has been formed with the aim of achieving some underlying
objectives including:

To take possible initiatives in increasing social wellbeing and poverty alleviation.

To support education by establishing new educational institutions, providing stipends/

scholarships to the poor but brilliant students.

To provide awards to Scholars in different significant arenas for their outstanding

contribution, as they uphold nations pride brightly even across the geographical boundaries

To assist research activities on Bengali Literature through Bangla Academy.to assist the

unemployed young to make them self sufficient.

To assist the rootless and distressed orphans and mentally retarded children through

taking appropriate steps for their mental perfection and self-support

1.7.ii MBLs Responsibilities to the Society

There is no question, through our day-to-day business operations; we are adding values to the
society and the economy. Ultimate goal of CSR activities of MBL is Building a Sustainable
Society.
Community outreach: a helping hand for disaster response
MBL is fully dedicated to providing opportunities for economically disadvantaged communities
by fostering economic development and supporting local communities..

Distribution of winter clothes among the poor people: MBL has distributed winter clothes
among the distressed people of different cold affected areas of the country. About 58,225
pieces of new winter clothes including blankets, shawls worth BDT 11.39 million has
been distributed in different cold affected areas of the country.

MBL continues financial support to BDR mutiny-affected families: BDR mutiny in

February, 2009 caused an irreparable loss to the nation

Page | 57

Donation to various tragedy victims: MBL has donated BDT 0.50 million to BAB to aid
the fire effected workers of Tazreen Fashion. MBL also donated 65 bundle tin sheets
worth BDT 0.20 million to fire victims of Boubazar and BDT 0.44 million to Chittagong
Baddarhat tragedy.

Health and Medical

From the beginning, each year the Bank provides financial support to different medical and
health institutions.. In 2012, Bank contributed BDT 26.80 million to different individuals and
hospitals. Following are the major contribution of MBL in same arena:

Donation of BDT 1.50 million to Liver Foundation of Bangladesh for purchasing medical
equipments.

Donation of BDT 1.20 million to Rawnok Diadetes Shastha Sheba, Feni.

Donation of BDT 0.28 million to National Heart Foundation

Donation of BDT 10.98 million to Naogaon General Hospital to establish dialysis unit.

Education: teaching the young and spreading knowledge.

MBL Foundation is continuing its supports to the education sector as before. From 2011, every
year Mercantile Bank Abdul Jalil Education Scholarships are provided to the meritorious poor
students. In addition, the Bank has provided financial assistant of BDT 3.80 million to 51
meritorious students for their higher studies.
The Arts: preserving cultural heritage and sponsoring the performing arts
As a recognized benefactor of culture, MBL takes some non-profit initiatives every year. In
2012, as earlier, MBL contributed to organize and celebrate different cultural and traditional
festivals. In this regard, in 2012 MBL contributed BDT 1.80 million for different cultural affairs.

Page | 58

Traditional Games and Sports

MBL always encourages the development of games and sports of the country. In different times,
the Bank has contributed to organize a variety of traditional games and sports. In 2012, the Bank
contributes a total amount of BDT 2.40 million to different institutions/clubs to arrange games
and sports such as:

Bangladesh Carrom Federation

Wari Club, Dhaka

Feni District Sports Association

District Sports Association, Nilphamary

Special Olympic For Autistics

Deaf Sports Fedaration

1.7.iii Playing part in the Economy

The Bank has contributed to the economy by generating employment of 1,981 full time
employees. It also plays a vital role in creating job opportunities by financing the productive
sectors. The Bank recruits a number of fresh graduates and experienced officers every year. In
the intermediation process, the Bank mobilized resources of BDT 132,093.64 million from the
surplus economic unit and deployed BDT 93,610.87 million in 2012 to deficit group.
Care to Environment: Care to Environment: Encouraging new thinking about
Environmental Challenges
Our obligation to Corporate Social Responsibility maintains a long-term point of view to make
economically sound, environmentally responsible and socially supportive decisions. We believe
that every small 'GREEN' step taken today would go a long way in building a green future and
that each one of us can work towards a better global environment. Going Green in our Bank can
not only bring awareness among our customers and our employees but also build awareness and
consciousness to our society. The core business model of MBL clearly expresses its
sustainability towards environment and unveils its eco-friendly motives i.e. not to harm or
damage Green Life Belt of mother nature which eventually ensures a pollution free breathing
Page | 59

atmosphere for our future generations. MBL has established a separate unit to turn our Bank as a
Green Bank. A lot of measures have been adopted including green financing, creating
awareness among the employees for efficient use of water, electricity & paper and giving
preference to eco friendly financing.
Involving Employees in the CSR approach
As a Corporate Citizen, Mercantile Bank Limited is striving to play its responsibility in this
regard. The involvement of employees in the CSR approach is one of the most effective ways to
CSR awareness. In the new CSR strategy, we have developed activities to keep employees up-todate with our CSR goals and principles. We believe that they will put their knowledge to both at
work place and in their personal life. MBLs employees are also kept updated about day-to-day
CSR events, and are invited to exchange views on new issues and the Banks actions in this area.

Page | 60

Analysis &
Interpretation

Chapter
Two

Page | 61

Chapter 2
Analysis and Interpretation
2.1 Analysis
A systematic examination and evaluation of data or information, by breaking it into its
component parts to uncover their interrelationships. An examination of data and facts to uncover
and understand cause-effect relationships, thus providing basis for problem solving and decision
making.
While the word analysis sounds all detached and, well, analytical, it is actually a kind of
insight, or inspired thought. The Greek roots of the word mean to break up; analysis is where
to break the subject into small, detailed parts, and where, by looking closely at those parts, to
find something about the whole that wasnt obvious or didnt seem to be there when started.
Here I have visited to bank and talked to the Senior Executive Vice President of the bank about
some Issues of hr activities. And from that I have get information about Hr activities of
Mercantile bank.

2.1.i Analysis on HR activities

In present competitive banking industry, delivering timely and efficient customer service is very
important. Employees of the banks play significant role in providing better customer service. A
talented officer can win the heart of a customer by providing efficient service blended with
personal care which eventually builds a strong and ever-lasting business relationship with that
customer.
Their people are their most valuable asset, embodying their commitment to maximizing wealth
of the Bank. They rely on them to communicate this value to many stakeholders. With the Bank
stepping up to entrenching its business strength, Bank Human Capital initiatives continued to
focus on building capacity and confidence to keep up the momentum and employees resilience
in pursuit to become most caring and gainfully profitable Bank. Finding the right employees,
developing, rewarding and retaining them are some of our highest priorities. Their talent
management strategy is a multi-pronged one that includes essential employee value proposition
with a competitive reward package.

Page | 62

2.1.i (a) Employee Motivation

Motivation is the driving force that causes the change from desire to will in life. So if an
organization can motivate employee it will reach the highest level. So it is very important to
motivate employee. Mercantile bank also motivate their employees as they know that it will
increase performance of employees as well as reduce turnover.
To motivate their employee they do several things:

There remain periodical increases in salary each year.

They provide job security to the employee. They provide written notice or warning to
employees if they need to fire them. But if the consequence is worst then they directly
fire the employee without giving any notice.

There remain a friendly environment within the ban between the employees

Mercantile bank provide promotional activities and/or this reason employees become
motivated to reach the target.

To boost motivation, they recognize and reward top performers, long service employees,
best managers, executives and officers on the day of MBL Day Celebration on the
Foundation Day of the Bank, Annual Business Conference and other events.

Methods of Motivation:
Mercantile Bank Ltd Training Motivation does not mean to provide financial reward or increase
to the employees . some times employee can be motivated with non monetory terms.so there are
some ways that can motivate employees.

Personal thanks: A simple "thank you" employees for doing a good job-one on one, in
writing, or both, still goes a long way in motivating employees. And this bank try to
maintain this.

Give praise in public: Acknowledge an employee's achievements in a public forum such

as a staff meeting. This is great for the individual's morale and motivational to others.And
this bank is concern to acknowledge the work

Feedback and respond: Supervisor provide feedback or give respond on performance

of the person, the department and the organization

Page | 63

Environment: the working environment is also work as a motivational tool for

employee. And here I can see that employee who worked here are provided with good
environment.

Clear Direction: In this bank employees get a clear direction to their work as well as
reporting person.

Employees Development: when an employee feel that there is an opportunity to develop

themselves they feel motivated. And this bank has training institute and throughout the
year Institute training continues in different subject to motivate the employees

With a diagram we can see there can be so many ways to motivate employee

Figure2.1: Ways to motivate employee

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Motivation process
To motivate employee there remains a process which this bank sometimes follow. Generally this
process is followed when there need to motivate employee in monetary ways. The process is:

Need
Identification

Consequence
of
performance

Searching
ways to
satisfy need

Employee
performance

Selecting
goals

Figure2.2:Motivation Process

Need Identification: Here organization identifies need on employee perspective. Here

the organization see what is the need the employee need to be fulfill to be motivated. It
can be increasing salary, promotion, bonus, increment, recognition etc.

Searching ways to satisfy need: here organization searching the ways to satisfy the need
of the employee to motivate him. It can be providing increment instead of increasing
salary.

Selecting goals: Here origination select goal for the employee to reach target to get the
reward. If an employee needs an increment then organization give him a target end if the
employee achieve this target then he will get tht reward.

Page | 65

Employee performance: When organization select goal for employee then o is also
important to observe the performance of employee which lead him to reach his goal.

Consequence of performance: it should be clear that if employee reach the goal then he
will be rewarded but if he fail to achieve that he will not be rewarded or he might get
negative reinforcement.

So this is the process that this bank follow before provide any motivational tool for employee.

2.1.ii(b)Training and Development

It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts,
rules, or changing of attitudes and behaviors to enhance the performance of employees.Training
is about knowing where to stand (no matter how good or bad the current situation looks) at
present, and where you will be after some point of time.
Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional
development. Training is defined as learning that is provided in order to improve performance on
the present job. Training is the act of increasing the knowledge and skills of an employee for
performing the job assigned to him. It is a short-term process.
In this bank they have training institution through which they trained there employee.Training
institute in Bijoynagar has embarked on several need based trainings sessions for its officers
working mainly in the desks of the branches. It has a principal, vice-principal & a team of
trainers from the VPs, & guest lecturers, they are the board of the institute & the training
programs to take place are decided by the HR & management divisions. Objectives of this
venture were to upgrade & update the officers on the recent changes in the area if any, & to make
them moir capable & competent to deliver proficient services so that the bank can attain
escalating growth.
The selection of trainee based on

Newly recruitment

Special purpose

Need based purpose

New appointment

Page | 66

To identify training need they uses some methods. For this they

They use opinion survey. To do this they take opinion from the employee about what
they are week and then according to this they arrange training.

They analysis the job description of employees and from that they get ideas that whuich
job require which training

And also if any incident occur for which they require training then they arrange training

Training Need Analysis

A training need is a shortage of skills or abilities, which could be reduced or eliminated by
means of training and development. Training needs hinder employees in the fulfillment of their
job responsibilities or prevent an organization from achieving its objectives. They may be caused
by a lack of skills, knowledge or understanding, or arise from a change in the workplace.
Training needs analysis identifies training needs at employee, departmental or organizational
level in order to help the organization to perform effectively. The aim of training needs analysis
is to ensure that training addresses existing problems, is tailored to organizational objectives, and
is delivered in an effective and cost-efficient manner.

Page | 67

Organizational
Analysis
Training Need
Trigger
AOP<EOP=PG

Operational
Analysis

Identify
Performence Gap
Non Training Need

Person Analysis

Figure2.3 Training Need Analysis

Here AOP is the Actual Performance Gap and EOP is the Expected Performance Gap. And when
AOP is less than EOP then there occur Performance Gap(PG). when an organization found that
there occurs performance gap in their employees they do analysis in three stages

Organizational Analysis:

Organizational Analysis looked at the internal level of environment of the organization. and sees
that employee performance fit to the organizational goals and objectives. It is a process by which
an organization's systems, capacity, and functionality are assessed in order to increase
its efficiency, performance, and output.

Operational Analysis

An operation analysis is a procedure used to determine the efficiency of various aspects of a

business operation. Most reports include a careful scrutiny of a company's production methods,
material costs, equipment implementation and workplace conditions. Professional consultants are
often brought in from outside a company to perform an unbiased operational analysis, which
provides a company with hard data concerning waste issues and operational risks. Many
companies use the information from such an analysis to decide on what changes need to be made
to improve operations.

Page | 68

Individual level

In personnel level they also do some analysis when developing training need analysis model. The
method they used in this level are

Performance appraisal

Organization frequently used this method on individual level analysis. performance appraisal is
a systematic and periodic process that assesses an individual employees job performance and
productivity in relation to certain pre-established criteria and organizational objectives

Critical incident

The Critical Incident is a set of procedures used for collecting direct observations of human
behavior that have critical significance and meet methodically defined criteria. These
observations are then kept track of as incidents, which are then used to solve practical problems
and develop broad psychological principles. A critical incident can be described as one that
makes a significant contribution ,either positively or negatively, to an activity or phenomenon.
Critical incidents can be gathered in various ways, but typically respondents are asked to tell a
story about an experience they have had.

Observation

Organization frequently used this method. Here they observe the behavior of selected employess
and decide whether they want training need or non training need.

Structured interviews

Organization also arrange structured interview for the employees when creating training need
analysis model . for this they make a structured questionnaire and take interview to the selected
employees and decided which type of trainind the employee need or which type of non training
aid the employee required,

Generally Training need Analysis is done by this organization when there is new policy, new
recruitment, need of increase in performance & branch based purpose etc. When its seen that
there is a new technology or method of working going to be adopted by the bank then its called
organizational need.When trainee assistant officer, probationary officers or any senior executive
is recruited they are sent to the general training for bankers and to identify training need
analysis organization uses a TNA form. This is stated later.

Page | 69

Sample of TNA

Figure2.4: TNA Sample

Page | 70

Training courses of MBL & their duration

Training Program Name
Anti money laundering
Branch Management (Need Based)
General Banking (Special)
Documentation on loans & advances
Case study of General Banking
Prevention of fraud, forgeries & malpractices
Bangladesh Bank ICT compliances & awareness
Recovery of loans, treatment of NPA & filling of
suits with fore closure
Basel-II Implementation
Basic training for TAOs
Trade finance & swift payment
Basic Accounting course
Credit Management
Internal control & compliance
SME & Micro credit
Money laundering prevention act 2009
Foreign exchange & foreign trade
Basic training for Assistant officers
Export import finance
Basic training for bankers
Leadership, team building & negotiation skills
Bangladesh bank compliances awareness
amongst the branches
Computer training for IT division
Basel II & credit risk grading (CRG)
Accounting non-accountants
Managing banking risks
Correspondent banks services in Bangladesh
Correction of CL(classified loan) reporting
Financing readymade garments (RMG)
International trade payment methods
Offsite reporting to Bangladesh bank

Duration
1 day
1 day
1 day
2 days
1 day
2 days
1 day
1 day
2 days
18 days
2 days
1 day
10 days
2 days
2 days
1 day
10 days
30 days
2 days
30 days
1 day
1 day
1 day
2 days
2 days
1 day
4 days
1 day
1 day
1 day
1 day

Table2.1: Training courses of MBL & their duration

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Process of Training

Figure 2.5:Process of training

Formally informing employees

Employees need to be formally informed about the training program. The subject, time, duration
and trainer of the training program have to be given to the employee.
In MBL the general practice of informing employees is to use an inter office memo send to the
head of the department with carbon copies (CC) send to employees. Also, a session guide is
given to the trainee in order to give them a sort of preview to the program, some time employees
are informed informally i.e. through telephone, e-mail.
The employees of MBL are enthusiastic about the training program. They instantly accept the
training program generally. In fact the employees are eager to learn new ways, and develop their
skills.

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Methods used in training

Coaching

Coaching is one of the training methods, which is considered as a corrective method for
inadequate performance.

Mentoring

Mentoring is an ongoing relationship that is developed between a senior and junior employee.
Mentoring provides guidance and clear understanding of how the organization goes to achieve its
vision and mission to the junior employee.

Job Rotation

This approach allows the manger to operate in diverse roles and understand the different issues
that crop up.It is the process of preparing employees at a lower level to replace someone at the
next higher level.

Job Instruction Technique (JIT)

Job Instruction Technique (JIT) uses a strategy with focus on knowledge (factual and
procedural), skills and attitudes development.

Off The Job Training

There are many management development techniques that an employee can take in off the job.
The few popular methods are:

Sensitivity Training

Sensitivity training is about making people understand about themselves and others reasonably,
which is done by developing in them social sensitivity and behavioral flexibility.

Transactional Analysis

Transactional Analysis provides trainees with a realistic and useful method for Analyzing and
understanding the behavior of others. In every social interaction, there is a motivation provided
by one person and a reaction to that motivation given by another person

Face to face Lectures

Lecture is given to enhance the knowledge of listener or to give him the theoretical aspect of a
topic. Training is basically incomplete without lecture

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Case study method:

A development method in which the manager is presented with written description of an

organizational problem to diagnose and solve.Trainer is used Internal, external and faculty
members. MBTI conducts various courses, workshops covering all diverse courses for banking,
finance, managements, laws etc. for officers and executives of the Bank. During 2012, the MBTI
fulfill its yearly target by training a large number of employees through different training
programs.

2.1.ii(c)Compensation
Compensation (also known as Total Rewards) can be defined as all of the rewards earned by
employees in return for their labour. Compensation Management is more than just the means to
attract and retain talented employees. In todays competitive labor market, organizations need to
fully leverage their human capital to sustain a competitive position.. This includes:

Cash: Direct financial compensation consisting of pay received in the form of wages,
salaries, bonuses and commissions provided at regular and consistent intervals

Benefit: including all financial rewards that are not included in direct compensation and
understood to form part of the social contract between the employer and employee such
as benefits, leaves, retirement plans, education, and employee services

Non-financial compensation: Referring to topics such as career development and

advancement opportunities, opportunities for recognition, as well as work environment
and conditions.

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Compensation Package

Figure2.6: Compensation Package

In Mercantile bank limited employees are provided direct, indirect and Non financial
compensation Cash, benefit and additional reward.. They are provided bonuses according to
government rules. They are also provided with an increment of each year which range is 5005000 which varies according to the position. They are provided paid leave, training
opportunities, team building, pleasant working environment.

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2.1.ii(d)Selection and recruitment

Employment selection strategy theorizes that by matching companies' needs to the candidate best
suited for the job, that can reduce employee turnover and increase employee productivity, saving
time and money. A companys human resources department will develop and oversee the
staffing process, from recruitment to selection.

Selection Process

Application BlankThe application blank is invariably used as one of the selection

tools. The applications are the starting point of the selection process. Where application
forms i.e., application blanks are used the data can become a part of the employee's
record is hired. Further it provides factual information needed for evaluating the
candidate's suitability. Application blank contains written record of the following
information.

Preliminary InterviewPreliminary or initial interview is often held in case of "at the

gate" candidates. This interview is usually of a short duration and is aimed at obtaining
certain basic information with a view to identifying the obvious misfits or unqualified. If
the candidate seems to be possessing the basic minimum requirements for efficient job
performance, he is given an application form for being filled out by him.

Screening application formsInformation on application form is used for selection

purposes. Sometimes, detailed information is sought for the prospective employees. The
criteria for the contents of the application form are generally to get data that are primarily
factual.

Employment TestsAn employment or a selection test is an instrument designed to

measure selected qualities and abilities of a prospective incumbent in terms of job
specifications. Such tests provide a sample behavior that is used to draw inferences about
the future behavior or performance of an individual. The use of tests in wide spread and
hence there is a long list of tests.

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Interviewing- Interviewing is the most widely used selection technique by all kinds of
organizations. It is relied upon to a great extent in accepting or rejecting a candidate.
Despite the relative subjectivity and unreliability of interviewing as a selection technique,
the fact remains that intangible personality variables left to be evaluated by the
interviewer are important for job success and some evaluation is better than no
evaluation. The basic objective of the interview is to measure the applicant against the
specific requirements of the job. It, being a two way communication, also permits the
applicant to ask questions about the job and organization.

Reference ChecksReference checks serve as an important selection technique, if

conducted properly. The applicant is asked to mention the names and addresses of his
former employers and also of two or three persons known but not related to him. If
references are checked in the correct manner, a great deal can be learned about a person
that an interview or tests cannot elicit. Referees may be called upon to give detailed
informations about candidate's capabilities.

SelectionIf a candidate successfully overcomes all the obstacles or tests given above
he would be declared selected. An appointment letter will be given to him mentioning the
terms of employment, pay scales, post on which selected etc.

Figure 2.7: Selection Process

Page | 77

Recruitment Process
Recruitment is the process of finding candidates, reviewing applicant credentials, screening
potential employees, and selecting employees for an organization. Effective recruitment results
in an organization hiring employees who are skilled, experienced, and good fits with your
corporate culture. Recruitment methods should ensure engaged, competent, productive
employees who are loyal to your organization.
Process of Recruitment is:

Determine ideal recruiting target

Understanding targets decision criteria

targets job search process

Posting jobs for active candidates

Providing prospects with additional information

The job application process

Sorting applications by job

The initial screening of applications and resumes

Interviewing and selling qualified applicants

The final interview

The reference checking process

The offer process

The post-offer acceptance process

The on boarding process

Feedback and new hire monitoring

Page | 78

Recruitment Process diagram

Figure2.8 Process of Recruitment

For selection employees HR of Mercantile Bank always do proper job analysis

From this they identify
Job description which is based on objective information obtained through job analysis, an
understanding of the competencies and skills required to accomplish needed tasks, and the needs
of the organization to produce work.
Job Specification is a statement of employee characteristics and qualifications required for
satisfactory performance of defined duties and tasks comprising a specific job or function. Job
specification is derived from job analysis.
In order to set their business up for success over the long term, MBL recognizes the importance
of attracting and retaining the best talent. MBL recruits fresh graduates from different academic
Page | 79

backgrounds of renowned universities, which act as a source of creativity. Fresh graduates are
recruited through comprehensive written test and Viva voce. MBL also recruits experienced
bankers from the industry having sound banking knowledge and expertise.
Performance Standard: A performance standard is a management-approved expression of the
performance threshold(s), requirement(s), or expectation(s) that must be met to be appraised at a
particular level of performance. A Fully Successful (or equivalent) standard must be established
for each critical element and included in the employee performance plan.

To recruit employees Mercantile bank use

External Sources

Personal Application

Fresh Graduates

Newspaper Advertisement

Internet

Internal Sources:

Transfer

Promotion

Recommendation

Retained Employee

And to recruit them they first take a written test. Then the candidates who are selected are asked
to come for certificate verification. After that selected candidates have to face 2-3 interviews and
then they are selected as an employee.

Page | 80

Page | 81

2.1.ii(e)Performance Management
Performance Management is the process of motivating employees through setting goals,
measuring progress, giving feedback, coaching for improved performance, and rewarding
achievements. So performance management is very important for any organization. In this bank
Performance management system is clearly defined. When goals are set for an employee the goal
is set mutually. In job description it is clearly defined the KSAs on which performance is rated.
So it become easy to an employee to understand

Performance Management Process

Figure2.9: Performance Management Process

The process is described below:

Prerequisites: There are two important prerequisites that must exist before the
implementation of a successful performance management system.
Organizations mission and strategic goal
Job Analysis

Page | 82

Performance Planning: It includes

Key accountabilities: Broad areas of a job for which the employee is responsible
for producing results.
Specific objectives: It is the statement of the outcome and it is very important and
it should be measurable.
Performance standards : Yardstick to evaluate how well employees have
achieved each objective.

Performance Execution: To execute the performance both employee and employer have
some responsibilities. For employees:
Commitment to goal achievement
Ongoing requests for feedback and coaching
Communication with supervisor
Collecting and sharing performance data
Preparing for performance reviews
For Employer:
Observation and documentation
Updates
Feedback
Resources
Reinforcement

Performance Assessment: Performance assessment is important it increase employee

ownership, improve commitment, provide information.

Performance Review: To review the performance organization organization see past

behavior and result, in present compensation to be received and set new goals and
development plan.

Performance renewal and reconstructing: Uses insights and information from previous
Phases and from here performance cycle begin again.

Page | 83

Examples of Performance Management

Figure 2.10: Examples of Performance Management

Methods of Performance Management

Rating Scales: Rating scales consists of several numerical scales representing job
related performance criterions such as dependability, initiative, output, attendance,
attitude etc. Each scales ranges from excellent to poor. The total numerical scores are
computed and final conclusions are derived.

Critical Incidents Method: The approach is focused on certain critical behaviors of

employee that makes all the difference in the performance. Supervisors as and when
they occur record such incidents.

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Behaviorally Anchored Rating Scales: statements of effective and ineffective

behaviors determine the points. They are said to be behaviorally anchored. The rater is
supposed to say, which behavior describes the employee performance

Confidential Records: Mostly used by government departments, however its

application in industry is not ruled out. Here the report is given in the form of Annual
Confidentiality Report (ACR) and may record ratings with respect to following items;
attendance, self expression, team work, leadership, initiative, technical ability, reasoning
ability, originality and resourcefulness etc

Essay Method: In this method the rater writes down the employee description in detail
within a number of broad categories like, overall impression of performance, promote
ability of employee, existing capabilities and qualifications of performing jobs, strengths
and weaknesses and training needs of the employee.

Management By Objectives: It means management by objectives and the performance

is rated against the achievement of objectives stated by the management. MBO process
goes as under.
Establish goals and desired outcomes for each subordinate
Setting performance standards
Comparison of actual goals with goals attained by the employee
Establish new goals and new strategies for goals not achieved in previous year.

360-Degree Feedback: It is a technique which is systematic collection of performance

data on an individual group, derived from a number of stakeholders like immediate
supervisors, team members, customers, peers and self. In fact anyone who has useful
information on how an employee does a job may be one of the appraisers. This technique
is highly useful in terms of broader perspective, greater self-development and multisource feedback is useful.

Page | 85

Figure2.11: Performance Appraisal Technique

Key Result Area

Key Result Areas refer to general areas of outputs or outcomes for which the departments role is
responsible. KRA (Key Result Area) is the output of an individual or section or department that
will serve as an input for another or contributes toward organization success. It is a task or
activity that must be done to ensure success (primary job responsibilities).

Importance of KRAs.

Set goals and objectives

Prioritize their activities, and therefore improve their time/work management

Make value-added decisions

Clarify roles of department or individual

Focus on results rather than activities

Align their roles to the organizations business or strategic plan

Communicate their roles purposes to others

Page | 86

KRA List

Figure2.12:List of KRA
Key Performance Indicator
Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an
organization define and measure progress toward organizational goals.
Once an organization has analyzed its mission, identified all its stakeholders, and defined its
goals, it needs a way to measure progress toward those goals. Key Performance Indicators are
those measurements.

Page | 87

What Are Key Performance Indicators (KPI)

Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the
critical success factors of an organization. They will differ depending on the organization.

A business may have as one of its Key Performance Indicators the percentage of its income
that comes from return customers.

A school may focus its Key Performance Indicators on graduation rates of its students.

A Customer Service Department may have as one of its Key Performance Indicators, in line
with overall company KPIs, percentage of customer calls answered in the first minute.

A Key Performance Indicator for a social service organization might be number of clients
assisted during the year.

Whatever Key Performance Indicators are selected, they must reflect the organization's goals,
they must be key to its success,and they must be quantifiable (measurable). Key Performance
Indicators usually are long-term considerations. The definition of what they are and how they are
measured do not change often. The goals for a particular Key Performance Indicator may change
as the organization's goals change, or as it gets closer to achieving a goal.
Key Performance Indicators Reflect The Organizational Goals
An organization that has as one of its goals "to be the most profitable company in our industry"
will have Key Performance Indicators that measure profit and related fiscal measures. "Pre-tax
Profit" and "Shareholder Equity" will be among them. However, "Percent of Profit Contributed
to Community Causes" probably will not be one of its Key Performance Indicators. On the other
hand, a school is not concerned with making a profit, so its Key Performance Indicators will be
different. KPIs like "Graduation Rate" and "Success In Finding Employment After Graduation",
though different, accurately reflect the schools mission and goals.

Page | 88

Key Performance Indicators Must Be Quantifiable

If a Key Performance Indicator is going to be of any value, there must be a way to accurately
define and measure it. "Generate More Repeat Customers" is useless as a KPI without some way
to distinguish between new and repeat customers. "Be The Most Popular Company" won't work
as a KPI because there is no way to measure the company's popularity or compare it to others.
It is also important to define the Key Performance Indicators and stay with the same definition
from year to year. For a KPI of "Increase Sales", you need to address considerations like whether
to measure by units sold or by dollar value of sales. Will returns be deducted from sales in the
month of the sale or the month of the return? Will sales be recorded for the KPI at list price or at
the actual sales price?
You also need to set targets for each Key Performance Indicator. A company goal to be the
employer of choic
e might include a KPI of "Turnover Rate". After the Key Performance Indicator has been defined
as "the number of voluntary resignations and terminations for performance, divided by the total
number of employees at the beginning of the period" and a way to measure it has been set up by
collecting the information in an HRIS, the target has to be established. "Reduce turnover by five
percent per year" is a clear target that everyone will understand and be able to take specific
action to accomplish.

A Key Performance Indicator (KPI) is a measureable value that demonstrates the effectiveness of
a business process at contributing to the attainment of key business objectives. By monitoring the
right KPIs and business metrics, you gain valuable insight into the performance of your business
and, more importantly, gain the strategic awareness you need to make the right decision at the
right time. Use these KPI examples and templates to cultivate a data-driven culture within your
organization.

Page | 89

KPI Process

Figure 2.13: Process of KPI

Page | 90

List of KPI

Figure2.14: List of KPI

Process of Performance Appraisals in Mercantile Bank Limited

Part 1
Personal data(name ,age, gender, religion ,maritalsatus, address), educational qualification(name
and result of educational institution) ,job history (past job experience, job time obtained in this
bank),training and workshop(name and number of training employee completed along with the
result) ,and reward record(previous performance record as well as if any reward is given here).
Part 2
Personal trait(Analytical skill, leadership, communication, professionalism, Self-management,
Ease with technology), subject rating(personal aspects, subject aspects etc)

Page | 91

Evaluation system
Probationary officer and officers are evaluated in he following grading system
Grade A: 85% or above mark obtained. It is recognized as outstanding performance
Grade B: 75%-84% mark is obtained. It is recognized as very good and competent employee.
Grade b is bestowed for obtaining that mark
Grade C: The employee who obtained 65%-74% mark. It is recognized only competent
employee.
Grade D: The employee who obtained 55%-64% mark they are put on this grade. They are
recognized as incompetent employee.

Page | 92

2.1.ii(f)Employee Welfare
Employee welfare is a term including various services, benefits and facilities offered to
employees by the employers. The welfare measures need not be monetary but in any kind/forms.
This includes items such as allowances, housing, transportation, medical insurance and food.
Employee welfare also includes monitoring of working conditions, creation of industrial
harmony through infrastructure for health, industrial relations and insurance against disease,
accident and unemployment for the workers and their families. Through such generous benefits
the employer makes life worth living for employees.
There are 2 types of Employee Welfare:
Intramural Facilities

Drinking water
Toilets
Cr?ches
Washing & bathing facilities
Rest shelters
Uniforms
Protective clothing
Recreating facilities
Canteens
Subsidized food
Medical aid

Extramural Facilities

Housing
Education facilities
Maternity benefits
Transportation
Sports facilities
Leave travel
Vocational training
Holiday homes
Cooperative stores
Fair price shops
Social insurance

Table2.2 Types of Employee Welfare

Benefits of Employee Welfare Measures

They provide better physical and mental health to workers and thus promote a healthy
work environment.

Facilities like housing schemes, medical benefits, and education and recreation facilities
for worker's families help in raising their standards of living. This makes workers to pay
more attention towards work and thus increases their productivity.

Employers get stable labor force by providing welfare facilities. Workers take active
interest in their jobs and work with a feeling of involvement and participation.
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Employee welfare measures increase the productivity of organization and promote

healthy industrial relations thereby maintaining industrial peace.

The social evils prevalent among the labors such as substance abuse, etc are reduced to a
greater extent by the welfare policies.

Figure2.15:Factors to promote and undermine welfare

Page | 94

Mercantile bank is also concern for employee welfare.The working hour of the organization is
well maintained. All holidays are provided to the employees. Sitting arrangement is also
comfortable for the employees. Time to time they are provided with refreshment like tea, coffee.
And for this there are few attendants who work in this purpose. Leave policy is according to the
government rules and regulation. They also offer a group insurance. From which employees are
helped when they need any financial help. Employees are also provided with loan according
some rules and regulation. Health and safety measures are in place to ensure that employee have
an optimum work environment. Time to time, the Bank conducts a variety of safety and wellness
activities. The Bank also extended the maternity leave from 03 months to 06 months for its
female employees.

Transport facility: top management get this facility. Bank provides car under this scheme.

Housing investment Scheme: the employee can make arrangement for comfortable living.
This bank provide this facility to top management employees

Provident fund: all the employees of this bank get this facility.

Recreational pay and tour: for this employee get 15 days paid leave and an annual picnic
is organized by this bank for the employee of this bank along with their family.

Page | 95

2.1.ii Trend Analysis

2.1.ii(a)Financial Review
Operating Profit
The operating profit of the Bank stood at BDT 3,350.78 million in 2012 as against BDT 3,501.67
million in 2011. Net Interest Income of the Bank stood at BDT 3,650.93 million in 2012 as
against BDT 2,697.56 million in 2011.

(BDT in million)
Operating Profit
Total Interest Income
14,207.72
Less: Interest Expenses
10,556.79
Net Interest Income
3,650.93
Add: Non- Interest Income
2,459.83
Total Operating Income
6,110.76
Less: Non Interest Expenses
2,759.98
Operating profit
3,350.78

Table2.3 Operating Profit

Total Income
Total income increased to BDT 16,667.55 million in 2012 from BDT 14,124.38 million in 2011.
Interest income accounted for 85.24%, exchange gains 3.32%, commission 4.90% and other
income 6.54% to total income in 2012 as against 75.89%, 4.92%, 5.27% and 13.92%
respectively in 2011.

Page | 96

(BDT in million)

Components
Interest Income
Exchange Gains
Commission
Other Income
Total

Amount
14,207.72
554.04
816.15
1,089.64
16,667.55
Table2.4 Operating Income

% of Total
85.24%
3.32%
4.90%
6.54%
100.00%

Total Income
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Interest
Income

Exchange
Gains

Commission Other Income

Figure2.16:Total Income
Interest Income
Interest income increased from BDT 10,719.69 million in 2011 to BDT 14,207.72 million in
2012. Interest on loans and advances accounted for 88.06%, interest on Treasury bill and Bond
11.70% and Other Interest Income 0.24% in 2012.

Page | 97

Interest Income
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Interest on
Interest on
Loans and
Treasury
Bill
Advances
& Bond

Other
Interest
Income

Figure2.17: Interest Income

Interest Expenses
Interest expenses moved up from BDT 8,022.13 million in 2011 to BDT 10,556.79 million in
2012.
Net Interest Income
Net interest income increased from BDT 2,697.56 million in 2011 to BDT 3,650.93 million in
2012. Gross interest income of the Bank amounted to BDT 14,207.72 million and interest
expenses amounted to BDT 10,556.79 million in 2012.
Net Interest Margin (NIM)
Banks net interest margin, which is derived from net interest income divided by average earning
assets, was 2.99% in 2012
Non-Interest Income
Non-interest income stood at BDT 2,459.83 million in 2012 against BDT 3,404.69 million of
2011. Among the constituents of Non-Interest Income, Exchange gains contributed 22.52%,
commission 33.18%, income on investment 0.26%, and other non-interest income 44.04% in
2012 as against 20.41%, 21.84%, 20.10% and 37.64% respectively in 2011.

Page | 98

Non-interest ncome
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Exchange
gains

Commission

Income on
Investment

Other noninterest
income

Figure2.17:Non Interest Income

Total Expenses
The total expenses of the Bank stood at BDT 13,316.77 million during 2012 as compared to
BDT 10,622.70 million during 2011. Interest expenses accounted for 79.27%, salaries and
allowances 10.24%, rent, rates, taxes etc. 2.55%, depreciation and repairs 1.41%, stationary,
printing and advertisements 1.19%, postage, stamp and telecommunication 0.39%, and other
expenses 4.93% of total expenses in 2012 as against 75.52%, 12.16%, 2.65%, 1.53%, 1.17%,
0.58% and 6.39% respectively in 2011.

Total Expenses
80.00%
60.00%
40.00%
20.00%
0.00%

Figure2.18:Total Expense

Page | 99

Dividend
The Board of Directors recommended 15% dividend (7% Cash & 8% Stock) for the year 2012.
The Bank paid out 23% stock dividend to the shareholders in 2011.

Earnings Per Share (EPS)

Since the inception and enlistment in Stock Exchange, the Bank has been making positive EPS.
Earnings per share stood at BDT 2.26 as on December 31, 2012.

Operating Efficiency Ratio

Operating Efficiency Ratio stood at 79.90% in 2012 as against 75.21% in 2011. This measures
how much operating expenses are incurred to generate operating revenues.

2.1.ii(b)Key performance indicator of the bank from CFOs Statement

During the year 2012, MBL showed satisfactory performance in almost all segment of banking
business including deposits mobilization, providing loans and advances, maintaining strong
capital base against total risk weighted assets, corporate clients credit rating, controlling cost of
fund, yield on advances and efficient liquidity management

(BDT in million)
Particulars
Deposits
Loans and Advances
Total Assets
Paid-up Capital
Shareholders' Equity
Operating Profit*
Import
Export
Remittance

2011
2012
102,262.02
132,093.64
79,999.80
93,610.87
116,553.01
154,040.18
4,968.10
6,110.75
9,659.33
10,924.55
3,501.67
3,350.78
95,008.70
113,434.10
81,311.80
81,477.10
7,150.00
15,792.80
Table2.5 Performance indicator

Growth(%)
29.17%
17.01%
32.16%
23.00%
13.10%
-4.31%
19.39%
0.20%
120.88%

Page | 100

2.1.ii(c)MBLs Financial Performance in 2012

The year 2012 was challenging for the banking industry and for this Bank as well. High cost of
deposits, sluggish trend in the country's capital market, cautious monetary policy and lower
import payments affected us adversely.
Bangladesh Banks new rules for loan classification and provision in 2012 required more
provisions against classified loan. To comply with Bangladesh Banks guideline a larger amount
of provision was to be kept to safeguard Banks health. MBLs operating profit reduced to BDT
3,350.78 million in 2012 from 3,501.67 million in 2011. Due to the higher requirement of
provisioning against classified loan, net profit before tax reduced to BDT 2,381.45 million in
2012 from BDT 3,004.17 million in 2011

2.1.ii(d)Achievement in International Business

MBL made noteworthy contribution in facilitating the import and export of the economy. Import
business of the Bank increased to BDT 113,430.10 million during 2012 as compared to BDT
95,008.70 million in 2011 indicating 19.39% growth. The Bank handled BDT 81,477.10 million
of export business in 2012. In terms of remittance business, the growth of 120.88% in 2012 over
2011 was spectacular. The bank procured BDT 15,792.80 million of inward remittance in 2012
as compared to BDT 7,150.00 million in 2011.

2.1.iii SWOT Analysis

Strength

Competence & Commitment.

Mass usage of technology

Sufficient man power

Updated training programs

Implementation techniques

High energy level

Good working environment.

Sufficient resources.

Automated Human Resource Information System(HIRS)

Page | 101

Weakness

Lack of good career Management Process and Job security.

Sometimes bank doesnt want to spend money for training or logistics facility in branches

Many times failing to distribute work & duty

Lack of trainers for some particular types of trainings

Spending money to send trainees outside the bank for training & bringing guest lecturers

Other departments not always supportive to HR activities

Lack of Recognition for work accomplished and Lack of employee satisfaction.

Less maintaining tendency of chain of command

Mentality to avoid responsibility

Opportunity

Grow as an HR professional.

New systems & procedures going to be started soon in training & development

Usage of technology is going to increase

Develop inter communication

Have HR study background professionals

Attract and retain good talents.

Simplify the processes.

Automated HR processes.

Financial growth due to high rate of return in saving account services & collection of

recovery from loans provided

Threat

More competitors are coming.

Loss of competent employees.

Not increasing criteria to work for HR

Less importance to develop training programs than others

No particular field for HR to control operations

Lack of trainers
Page | 102

Less qualified employees

Not improving work environment

Not having organizational behavior pattern

Not concentrating in maintaining chain of command

Other banks are improving these sectors.

Page | 103

2.1.iv COPE Analysis

5

Laggers
(Mercantile

Champion

Condditiodition

Bank Limited)

Outcast

Defiant

5
Performance
Figure 2.19: COPE Analysis

From this chart we can see that there are four stages in this analysis. And here I am putting
Mercantile Bank in Laggard position because of some reason.

Banking market for Bangladesh is very attractive,

People are becoming more concern on banking activity.

Now people are relying more on bank on their day to day transaction

Mercantile Bank has lot of product but they are not performing good

The requirement for using their product sometimes customer feel uncomfortable.

Now market is competitive but they are not coming up with new product

So with the basis of this fact this bank is kept in Laggards as they have low performance
products in high attractive market.

Page | 104

2.2 Interpretation
Is there reasonable periodical increase in salary?

Criteria

NO.of
Employee

Strongly 0
Agree
Agree

12

Neutral

Disagree 2
Strongly 0
Disagree
*Sample Size :20

Reasonable periodical increase

in salary
20

12
6

10

0
Strongly
Agree

Agree

Neutral

Disagree Strongly
Disagree

Figure2.20 Reasonable periodical increase in salary

From this chart we can see that among 20 employees there are 12 employee are agree that there
is periodical increase in their salary and 6 is neutral on this statement. And we can also see that 2
employee said that they are disagreeing with this statement.

Page | 105

Do you have job Security?

Criteria

No. of
Employee

Strongly 0
Agree
Agree

20

Neutral

Disagree 0
Strongly 0
Disagree

*Sample Size:20

Job Security
20
20
15
10
5

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.21Job Security

Here we see that 20 employee says that they have their job security.

Page | 106

Is there good Relationship with other staff members?

Criteria

No.of
Employee

Strongly 4
Agree
Agree

Neutral

Disagree 2
Strongly 0
Disagree

*Sample Size:20

Good Relationship with other

staff members
8
8
6
4
2
0

6
4
2

Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.22: Good Relationship with other staff members

On this graph we see that 4 employee is agreed that there remain a good relationship with the
staff members , 8 agreed on this , 6 is neutral and 2 put disagree that there remain good
relationship with staffs.

Page | 107

Is there effective promotional opportunities?

Criteria

No.of
Employees

Strongly 0
Agree
Agree

Neutral

12

Disagree 2
Strongly 0
Disagree
*Sample Size:20

Effective promotional
opportunities
12

15
6

10
5

Figure2.23: Effective promotional opportunities

When we come to that whether there are effective promotional opportunities then 6 employee
agreed that there remain promotional opportunities. 12 remain neutral and 2 are disagreed here.

Page | 108

Does organization recognizes and acknowledges your work?

Criteria

No.of
Employees

Strongly 0
Agree
Agree

14

Neutral

Disagree 0
Strongly 0
Disagree
*Sample Size:20

Organization recognize and

acknowledge work
14
14
12
10
8
6
4
2
0

0
Strongly
Agree

0
Agree

Neutral Disagree Strongly

Disagree

Figure 2.24: Organization recognize and acknowledge work

In this statement there 14 employee who agreed that organization recognize their work and 6
neutral that organization recognize and acknowledge their work

Page | 109

Are you satisfied with the incentives provided by the Organization?

Criteria

No.of
Employee

Strongly 4
Agree
Agree

Neutral

10

Disagree 0
Strongly 0
Disagree
*Sample Size:20

Satisfied with the incentives

provided by the Organization
10
10
4

6
0

Figure2.25: Satisfied with the incentives provided by the Organization

Here in this chart we can see that among 20 employees there are 4 employee are strongly agree 6
employee are agree that there is periodical increase in their salary and 10 is neutral on this
statement. And we can also see that no employees are showing disagree or strongly disagree in
this statement.
Page | 110

Do you receive non benefit facilities?

Criteria

No.
of
Employee

Strongly 5
Agree
Agree

Neutral

Disagree 1
Strongly 0
Disagree
*Sample Size:20

Receive non benefit facilities

10

5
5

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.25: Receive non benefit facilities

Here in this chart we can see that among 20 employees there are 5 employee are strongly agree 9
employee are agree that there is non cash facilities and 1 employee stated disagree and about this
statement
Page | 111

Is there general increase in compensation company provide in a year?

Criteria

No.
of
Employee

Strongly 3
Agree
Agree

12

Neutral

Disagree 0
Strongly 0
Disagree
*Sample Size:20

General increase in compensation

company provide in a year

15

12

10
5
5

3
0

0
Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Figure 2.26: General increase in compensation company provide in a year

In this chart we can see that among 20 employees there are 3employee are strongly agree12
employee are agree and 5 are neutral that there is increase in salary provided in each year. No
one show disagrees on this statement.
Page | 112

Does organization is using satisfactory methods of interview?

Criteria

No. of
Emploee

Strongly 2
Agree
Agree

Neutral

10

Disagree 0
Strongly 0
Disagree
*Sample size: 20

Using satisfactory methods of

interview
10
10

2
0

0
Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Figure2.27: Using satisfactory methods of interview

In this chart we can see that among 20 employees there are 2 employee are strongly agree8
employee are agree and 10 are neutral that Organization using satisfactory method of interview..
No one show disagrees on this statement.

Page | 113

Is organization does employee verification before and after selection?

Criteria

No.
of
Employee

Strongly 10
Agree
Agree

Neutral

Disagree 0
Strongly 0
Disagree

Sample size: 20

Organization do employee
verification before and after
selection
10
10

4
0

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.28: Organization do employee verification before and after selection

Through this chart we can see that among 20 employees there are 10 employee are strongly agree
6 employee are agree and 4 are neutral that Organization does employee verification before and
after selection.. No one show disagree on this statement

Page | 114

Is the Performance Management System is clearly defined in the

organization?
Criteria

No.
of
Employee

Strongly
Agree

Agree

Neutral

13

Disagree

Strongly
Disagree

*Sample size: 20

Performance Management System

is clearly defined in the
organization
13

15
10
5

4
0

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.29: Performance Management System is clearly defined in the organization

Through this chart we can see that among 20 employees there are 3 employee are strongly agree
4 employee are agree and 13 are neutral that Performance Management System is clearly defined
in the organization.. No one show disagree on this statement
Page | 115

Are you satisfied with the current performance Evaluation system?

Criteria

No.
of
Employee

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

*Sample size: 20

Satisfied with the current

performance Evaluation system

9
10
5
5

4
2
0

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.30: Satisfied with the current performance Evaluation system

Through this chart we can see that among 20 employees there are 5 employee are strongly agree
4 employee are agree and 9 are neutral that they are satisfied with the current performance
Evaluation system. No one show disagree on this statement.
Page | 116

Does the Working Environment of the Organization is well?

Criteria

No.
of
Employee

Strongly
Agree

12

Agree

Neutral

Disagree

Strongly
Disagree

*Sample size: 20

The Working Environment of the

Organization is well
15

12

10
5
3

0
Strongly
Agree

Agree

Neutral

Disagree Strongly
Disagree

Figure2.31: The Working Environment of the Organization is well

Through this chart we can see that among 20 employees there are 12 employee are strongly agree
5 employee are agree and 3 are neutral that they are satisfied with the current performance
Evaluation system. No one show disagrees on this statement.

Page | 117

Is the working Hours of the Organization is Flexible?

Criteria

No.
of
Employee

Strongly
Agree

Agree

Neutral

12

Disagree

Strongly
0
Sample
size:
20
Disagree
*Sample size: 20

Working Hours of the

Organization is Flexible

20
10

12
0

5
0

0
Strongly
Agree

Agree

Neutral Disagree Strongly

Disagree

Figure2.32: Working Hours of the Organization is Flexible

Through this chart we can see that among 20 employees there are 3 employees who are agree on
this , 12 are neutral and 5 employee are disagree on that working hour of the organization is
flexible.

Page | 118

Does Company takes safety measures for employee safety?

Criteria

No.
of
Employee

Strongly
Agree

Agree

13

Neutral

Disagree

Strongly
0 size
Sample
Disagree
*Sample size :20

Company takes safety measures

13

15
10
5

5
2

0
Strongly
Agree

Agree

Neutral

Disagree

Stroongly
Disagree

Figure2.33:
Company takes safety measures

Through this chart we can see that among 20 employees there are 2 employees who strongly
agree , there are 13 employees who are agree and 5 employees who are neural that company
takes safety measures for them.

Page | 119

Findings,
Recommendations
&
Conclusion

Chapter
Three

Page | 120

Chapter3
Findingd,Recommendation,Conclusion
3.1 Findings
After visiting Mercantile Bank and analyzing some facts about this bank I have some finding
based on my visit and analysis

Most of the work done thorough using technology

They provide good working environment

HR department use Automated Human Resource Information System(HIRS)

There is opportunity of periodical increases in salary

There are no extra benefits for performance because organization provides promotion
after 3 years later; there is no chance to get a promotion for extra performance.

There is both positive and negative side for fair evaluation, the positive side is all the
employees become happy because organization evaluate them fairly but other side the
most talent employees become de-motivated.

Most of time the manager face difficulties to take any decision because of management
hierarchy.

In this organization fresh employees training is compulsory but other employees training
are not compulsory.

There are a less opportunity for cyclic change in duties and responsibilities, because in
the bank every day employees doing same work, for the reason that sometimes
employees feel boring in the work place.

The mid level employees starting at senior principle officer (SPO) to top level employees
starting at vice president (VP) are fully motivated because of strong compensation
package, decision making power and benefits packages.

Page | 121

There are some general finding about Mercantile Bank is

Customer service quality given by Mercantile Bank is not satisfactory at all

The bank also does not apply any marketing strategy like advertisement or any kind
of promotional activities to attract deposit or increase export-import business of the
bank.

Sometimes managers are not concern abut the activities of staffs

Some of the employees are not motivated about relationship with supervisor or
subordinate except few employees.

Some employee are not concerned about the performance appraisal

3.2 Recommendation:

Mercantile Bank limited should concern more on career management process

Arrange skill trainers for specific training

As top management rarely go to training so some training should be arranged for top
management

As there are so many competitors so try to reduce their weaknesses

Only top management get transport facility. so organization should take steps for it

Working hour of this bank should be redesigned

Performance management system should be clearly defined and employees should

have clear idea abut which their performance is rated.

Page | 122

3.3 Conclusion
The world is very competitive in this new millennium. And to survive in this
competition organization should be smart enough to cope up with all the
challenges from outside organization should make their human resource strong
enough. And to make it sure organization should focused more on their HR
activities.
From the analysis about the HR practices of Mercantile Bank we come to know
about various information about their HR activity. Mercantile Bank Limited
(MBL), a bank for 21st century, it is not a mere slogan. The bank has been manned
with talented and brilliant personnel, equipment with most modern technology so
as to most efficient to meet the challenges of 21st century.
Though there are some weaknesses and challenges for this bank regarding the HR
activities but if they can come up with this and make their weaknesses into strength
and challenges as opportunity then one day this bank will become one of the top
banks in Bangladesh.

Page | 123

References
Book
1. Gary Dessler, (11th ed.). (2007). Human Resource Management.
2. P.Nick Blanchard.,James W.Thacker., V.Anand Ram., (4th ed.). (2012). Effective
Training. India. Pearson.
3. George T. Milkovich., Jerry M. Newman., C. S. Venkata Ratnam., (9th ed.). (2013).
Compensation Management. New Delhi. Tata Mcgraw Hill & Book house.

Online
1. Employee Motivation (n.d.). Wikipedia. Retrieved april 4,2014,
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9. Importence of recruitment.(2012) The strategic importance of recruitment

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Importance of performance

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Page | 125

Page | 126

Appendix
Questionnaire for Employee
Department
Designation

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Reasonable periodical increase in

salary
Job Security
Good Relationship with other staff
members
Effective
promotional
opportunities
Organization
recognize
and
acknowledge your work.
satisfied with the incentives
provided by the Organization
Receive non benefit facilities
general increase in compensation
company provide in a year
organization is using satisfactory
methods of interview
organization
do
employee
verification before and after
selection
Performance Management System
is clearly defined in the
organization
Satisfied
with
the
current
performance Evaluation system
the Working Environment of the
Organization is well
the working Hours of the
Organization is Flexible
company takes safety measures for
employee safety

Page | 127

Page | 128