Compensation management or

Compensation practices in an
organization. Survey in an organization
what compensation follows, find facts,
check, analyze, regarding salary to
others.

Human
Resource
Management
HRM 604

Rashedul Haq
Azharul Islam

Human Resource Management

Group Assignment
Compensation management or Compensation practices in an organization. Survey in an
organization what compensation follows, find facts, check, analyze, regarding salary to others.

Overview:
The topic of the assignment is Compensation management or Compensation practices in an
organization. The main purpose of this assignment is real life compensation practices in an
organization. This is where the journey of the assignment started from.

Objectives of the Report:

General Objectives:
The objective of the first part of this assignment is to familiarize with the compensation
practices of an organization.
Proposal Objectives:
-

Understand the basic principles and major elements of compensation.

Understand the various processes in compensations Job analysis, Job description,

Job evaluation and Compensation survey.

Determine and explain what makes up a sound and effective compensation and
benefits program.

To identify the different types of compensation practice method.

To find out the level of satisfaction of employees.

Methodology:
In order to attain the objectives, collection of primary data is necessary. This data will be
used to analyze the compensation practices of an organization. The largest part of the
analysis however would obviously be conducted by carrying out the employee satisfaction
survey. The intention is to obtain randomly selected unbiased sample employees across the
organization and to question them on compensation policy to assess the employee
satisfaction level. Therefore the methodology would include relevant information is
collected from discussion and different questionnaire. The relevant information is collected
from the primary sources and also uses the secondary sources of information.
Primary sources:
-

The primary data was gathered through informally discussed with different level of
employees.

Discussed with the executives and officers.

Secondary Sources:
-

Published documents.

Relevant books, newspapers, journals and websites.

Limitations:
This assignment report may not show the overall condition of the organization as Head
office or may not be a proper representative. There may be a completely different scenario
in other branches of other banks. The study has suffered from a number of barriers. Data
from BRAC Bank is highly confidential for the outside people. No banks in Bangladesh
disclose the opposite partys name in the transaction. Time is also a big constraint for my
research. We have to submit a broader deal in a shorter form of outcome. It was difficult to
communicate with the employee, as many of them were unable to give me much time for
discussion. So naturally our research is not up to the standard, as we wanted it to be.

Profile of the Organization:

Overview of BRAC Bank Limited:

BRAC Bank Limited is a full service scheduled commercial bank. It has both local and
International Institutional shareholder. The bank is primarily driven with a view of creating
opportunities and pursuing market niches not traditionally meet by conventional banks.
BRAC Bank has been motivated to provide best-in-the-class services to its diverse
assortment of customers spread across the country under an on-line banking dais.

At present, BRAC Bank is one of the fastest

growing banks in the country. In order to
support the planned growth of its
distribution, network and its various
business segments, BRAC Bank is currently
looking for impressive goal oriented,
enthusiastic, individuals for various business
operations.
The bank wants to build a profitable and
socially responsible financial institution. It
carefully listen to the market and business
potentials, It is also assisting BRAC and
stakeholders to build a progressive, healthy,
democratic and poverty free Bangladesh. It
helps make communities and economy of the country stronger and to help people achieve
their financial goals. The bank maintains a high level of standards in everything for our
customers, our shareholders, our acquaintances and our communities upon, which the
future affluence of our company rests.

Different types of employees in BRAC Bank Limited:

The BRAC Bank Limited has in different employees criteria. There are different types of
employees working in different places inside BRAC Bank. The types of employees are1. Regular/ Full time employee:
In full time category, employees are joined as probationary for six months or one year depending
on job category. They also have to sign a deed for three years a long with depositing taka one lac
refundable. The regular employees are allowed to get the bonus, incentives and other
allowances with their basic salaries. And these types of employees also have the benefit of
getting extra facilities the BRAC Bank limited is providing for their employees.
2. HR Contractual:
Contractual employees are taken for specific period like six months basis. Along with their salary,
they get attractive performance bonus if they achieve their target which determined by
organization. HR temporary contract are for those categories whose Job description is such,
where he/she needs to be under the direct supervision of Banks authority, whose performance
is monitored by the Bank Management. They might be specialist, consultant, and specially
assigned staff. Staff under HR contract are those people who directly or indirectly deals with
customer, has access to Banks confidential datas & valuable properties (car, etc.), deals with
sensitive areas, also where staff need to deal with customer as a representative of BRAC Bank
directly.
3. Outsource Staff:
Other contractual employees are not entitled for any service agreement. They will be recruited
through outsource agencies. The requirement of any support staff through outsource agency
must come through HR signed by the Division Head. HR will send the requirement to provide
staff by the Outsource Agency. Outsource Staff recruitment depends on the budgeted
requisition of the staff from the respective departments. However, for non-budgeted requisition
it will go through after the approval process of MANCOM. The bank reserves the right to
terminate the contract with the Outsource Agency without assigning the reason whatsoever.
The Outsource Staffs salaries are fixed and they wont get any allowances with their salary.
4. Intern:
To encourage and help human resource development in the financial industry the Bank may
decide to offer internship programs to individuals or educational institutions. The decision to
enter such an engagement will be decided by the MD& CEO on the recommendation of the
Department Head. The HRD will prepare the proposal of such engagement with
individual/institution and forward it to the MD& CEO for consideration with the recommendation
of the Head of HR. Individuals engaged as Internees will be paid a consolidated Honorarium of
Tk. 3500/- per month, as decided by the MD/MANCOM and will not be entitled to any other
benefits. Managing Director & CEO will determine and analyze the necessity of intern on the
basis of yearly budget and also requirement of special projects. As per requirements Department
Head will make the intern requisition and after receiving intern requisition HR will take 15 days
for an intern to join. All Internships program will be for a three months. Prior approval by MD&
CEO internship program can be extended for a maximum period of six months.

5. Management Trainee Officer (MTO):

Management Trainee Officers highly qualified students of BRAC Bank Limited. The MTOs are
regular employee but they have to learn as a student inside BRAB Bank for the period of one
year. After one year if they can complete their learning period successfully they will become
a senior officer directly from the MTO.

The Recruitment Policy:

-

All regular employees will appointed by the Managing Director.

All HR contract and outsource contract employees will be appointed by The Head of
Human Resource Division.

The schedule of recruitment will be created according to the Service Level Agreement
(SLA).

The interview board will with The Head of Department of that post, The Supporting
Department Head and The Head of HRD.

Officer Grade I and Officer II can appoint directly after the interview.

From Senior Officer and more there will be a second interview with the Managing
Director of BRAC Bank Limited after the first interview.

For internal job posting the employee can only apply if he has the service time in BRAC
Bank is more than two years and also need to recommend the candidates application by
the reporting supervisor of the employee.

The HR Contract employee can apply for the regular post after servicing more than two
years in the BRAC Bank.

Outsource Staff can apply for the regular post after servicing more than three years in
the BRAC Bank.

The new recruited will get the probationary period of one year if the employee has less
than three years of working experience and will get the probationary period of six
months if he has more than three years working experience.

Organogram:

Figure: Organizational Structure of BRAC Bank Limited

Compensation, Pay & Benefits:

The Bank is committed to follow a fair, competitive and flexible remuneration policy. The Board
is the final authority for approval of this policy and will amend and review the policy on
recommendation of the Managing Director / Management Committee periodically.
The remuneration policy of the bank will cover all persons engaged in permanent service of the
bank. The different job grades at BRAC Bank are as follows:

Deputy Managing Director

Executive Vice President
Senior Vice President
Vice President
Senior Assistant Vice President
First Assistant Vice President
Assistant Vice President
Senior Principal Officer
Principal Officer
Senior Officer
Management Trainee Officer (Direct Recruit)
Officer Grade II
Officer Grade I

The Salary structure of the Bank is based on the aforementioned Job Grades. Job grades are
decided on the basis of an analytic assessment of the position based on the size, responsibilities,
decision-making authorities and the nature of the job.

The remuneration of employees consists of:

Basic Salary,
House Rent,
Medical Allowance

Pay structure of BRAC Bank Limited is give below:

Position

Title
Managing Director

Pay Range
(In Taka per month)
7,00,000 8,00,000

Average
(BDT)
7,50,000

MD
AMD

Additional Managing Director

4,00,000 4,50,000

4,25,000

DMD

Deputy Managing Director

3,00,000 3,50,000

3,25,000

SEVP

Senior Executive Vice President

1,70,000 1,90,000

1,80,000

VP

Vice President

1,00,000 1,05,000

1,02,500

SAVP

Senior Assistant Vice President

85,000 90,000

87,500

AVP

Assistant Vice President

65,000 75,000

70,000

SEO

Senior Executive Officer

50,000 55,000

52,500

EO

Executive Officer

40,000 45,000

42,500

PO

Principal Officer

35,000 37,000

36,500

SO

Senior Officer

30,000 32,000

31,000

MT

Management Trainee

25,000 28,000

26,500

Officer

Officer

24,000 25,000

24,500

JO

Junior Officer

16,000 17,000

16,500

AO

Assistant Officer

13,000 14,000

13,500

TA

Trainee Assistant

10,000

10,000

Salaries are confidential between the employees concerned and the Management. The
salary ranges for these job grades are reviewed from time to time.
HR Temporary & outsource staff do not have any assigned job grade. The contracts get a
consolidated payment per month and there are no other entitlements applicable except
commission based on job criteria.
Basic Pay:
Basic Salary Ranges (BSRs) is commensurate with the job grades and is determined by the
Board on the recommendation of the Managing Director. The Board reviews the BSR at least
once every two/three years.
House rent allowance:
House Rent Allowance may be paid to the employees at such rates and on such conditions as
may be prescribed by the Competent Authority from time to time.
Medical allowance:
Medical Allowances may be paid in accordance with the job grades and on such conditions
that may be prescribed by the Competent Authority from time to time.
Festival Bonus:
All regular and confirmed employees get two bonuses each year. There is also a performance
bonus system maintained by the Compensation, Pay & Benefits wing.

Other than the above benefit there is a Provident Fund System, a Gratuity System, Group
Hospitalization Insurance Policy, Employee Security and Welfare Fund maintained by the
Bank.
Regular and confirmed employees can apply for House Building Loan and Car Loan.
Allowances are also available to only regular and confirmed employees but Car Allowances
are only for the grades above Senior Principal Officer (SPO).
There is an annual increment for all regular and confirmed employees on their joining
anniversary.
Festival Bonus will be paid to all confirmed officers/staff at one month basic salary
which will be reimbursed twice in each calendar year.
Non-confirmed employees will be entitled to get Festival bonus as pro rata basis
depending on his/her BBL joining Date.
HR Contract & Outsource Staff would get 1 bonus, which is 50% of this gross salary.
The Board of the Directors will decide the annual salary revision and recommendation will be
based on:
Revised Pay Scale, and/ or
Inflation adjustment rate
Performance
Telephone policy:
Employees from AVP and above are entitled to have mobile phone sets with all facilities (T&T
incoming, outgoing, and ISD connection).
Hospitalization Insurance:
In the event where hospitalization or surgery is required for a member of the officers
(confirmed employee) dependent (Spouse and Children) including hospitalization on
account of maternity - the Bank will reimburse the officer (Group C) up to a maximum of
Tk.35,000/- per annum, for executives (Group B) Tk.100,000/- per annum and 200,000/- per
annum for MANCOM (Group A).
Travel allowance:
An employee of the Bank may be allowed to draw traveling allowance in respect of journeys
performed for the purposes authorized by the competent authority.
Gratuity:
The Gratuity Fund is a terminal benefit that an employee receives at the time of
retirement/resignation.
Eligibility:
Regular confirmed employees who have completed at least 5 Years continuous
service are entitled to receive Gratuity Benefit.
Gratuity Calculation:
Last months basic Salary multiplied by the year of service completed e.g., if an
employee serves The Bank for 6 years and then resigns/retires his Gratuity Calculation
shall be (Lets assume his Basic Salary is 20,000 Taka):
Taka 20,000 x 6 years = 1, 20,000 Taka
The custody, management, investment and control of the fund shall be vested in the
board of trustees.

Security Fund:
The objective of the fund is to provide predetermined monetary benefit against Death and
Permanent Disability of regular confirmed staff to his/her Dependent/Heir/Nominee by the
Bank. All Regular Confirmed employees are eligible to avail this benefit. The fund for this
benefit is created solely with The Banks Contribution.
The Bank will contribute Taka 5.00/Thousand on a yearly basis against the last basic salary of
each eligible employee. (The rate of contribution may be changed subject to the approval of
the board.) The Bank maintains a liability account to manage the fund.
The total amount of benefit will be equal to 36 times of the last basic salary of the employee.
Two forms of benefits:
a) Death Benefit: If an eligible employee dies within the term of employment.
b) Permanent and Total Disability (PTD): Disability resulting from accidental means that is
continued for at least Six months and is certified by Banks designated doctor as
incurable.
Exclusion from Employee Security Benefit:
Employees will not be eligible for the benefit, if Death or disability is caused by:
- For further injury of Employees with pre-existing degree of disablement.
- Attempted suicide or self-inflicted injury.
- Civil commotion, Assault, homicide or any war like operations.
- Making an arrest as an officer of law.
- Committing a felony.
- Racing on wheels.
- Accident while the employee is affected by Alcohol/Drug.
The Board of Directors reserves the power to close fund at any time. At such event the fund
shall be refunded to the Bank.
BRAC Bank Employees Provident Fund:
The BRAC Bank employees provident fund requires the employer i.e. BRAC Bank Limited to
contribute to the fund 10% of basic salary for all regular confirmed employees. A board of
trustee is entrusted with the control, management and investment of the fund.
Welfare Fund:
The motive behind establishing the welfare fund is to be able to provide the regular
confirmed employees from JO to SPO with financial support for incidents or events when
the cost may not be affordable for the employees. These may include the following:
- Accidents on the job
- Extended illness
- Education for children
- Marriage of children
Maximum limit for relevant occurrences are stated below:
- Severe Accident & Extended illness.
- Education/Examination.

Car Loan Scheme:

The car loan facility is extended to employees of or above the grade PO. The amount of loan
that these employees can take obviously varies according to their respective job grades.
Car Allowances:
Employees of or above the grade of AVP are also provided with car allowances that
incorporate expenses for Fuel, Driver and Maintenance.
Staff Loan:
Staff loan is granted to regular confirmed employees of the bank. The duration of service of
the employee has to be at least a year long. The employee can apply for loan extending up to
5 times of his/her gross salary at 10 % interest rate.
House Building loan:
Employees who have had a service length of 5 years and above are eligible to apply for
house building loan. The repayment schedule for the loan has to be before the retirement of
the employee. The interest rate of the loan is 3%.
Termination Benefit:
In case a confirmed employee is asked to resign from his/her services by the relevant
authority without stating any reason, he/she is eligible to receive one months notice in
writing or one months gross salary as payment. If the employee is duly notified with one
months notice, he/she will not be entitled to receive any form of compensation for the
termination of services.
Suspension Benefit:
In the event that a report/information about misconduct or fraud is received against an
employee, he/she has to undergo stages of disciplinary proceedings. The employee may be
suspended and will only receive 50% of his basic salary. In case he/she is proven to be not
guilty, then the full amount of salary must be refunded to the employee.

Compensation & Benefit Survey

Findings & Suggestion
The BRAC Bank Limited claims to believe in total reward concept. Hence gives additional
drive to conduct a compensation benefit survey to analyze employee feedback and hence
effectiveness of the said package.
Survey Questionnaire:
This survey questionnaire consists of various questions related to compensation and benefit
package linking Job satisfaction, motivation and employee management.
Questionnaire:
1.
2.
3.
4.
5.
6.
7.

I am satisfied with the current salary package in my position.

Basic Salary range in my position is more than what other Banks are offering.
Our annual performance appraisal is quite standard and effective.
My annual increment is directly associated with my last performance rating.
In BRAC Bank Limited, Promotion is directly related with performance and merit.
Amount of Medical allowances & insurance benefits should be same for all.
House rent and other allowances & incentives are satisfactory compared to other
Banks.
8. BRAC Bank Limited Leave Policy is very well designed.
9. I am motivated to do more than what is require of me in my job.
10. Even if I were offered a comparable position at another Bank, I would stay here.

Sample size and measurement:

The survey was conducted at the Dhanmondi branch of the BRAC Bank Limited which is
located at Satmasjid Road, Dhanmondi R/A, Dhaka. Employees with various service tenure
were randomly chosen and surveyed. The sample size was 20 (Twenty) and we used FivePoint Likert Scale from 1 to 5 rating from strongly disagree to strongly agree to measure
the qualitative analysis from the questionnaire items. The names were kept anonymous due
to sensibility of the feedback. It was really effective as confidentiality was maintained of true
opinions.

Data Analysis Part:

Findings:
75% participant in the survey responded positively claiming they are satisfied with the
compensation and benefit packages offered in their current position. As per the HR Policy
Basic salary range is to be reviewed at least once every two or three year. HR will facilitate
the exercise and take necessary salary range adjustment after the recommendation of
Managing Director and board. But so far from the survey result with few of the employees,
this review and adjustment of salary range is long due. They are hopeful have a review by
next year.
Suggestions:
HR should arrange and expedite as employees are long expecting a review an accordingly to
survey response they are well paid compared to other reputed banks in the industry on same
position and job responsibility.

Findings:
Almost all of the participants responded positively claiming they are well paid compared to
same position in other banks. As per the HR policy Basic salary range is to be reviewed at
least once every two or three years. HR will facilitate the exercise and take necessary salary
range adjustment after the recommendation of managing director and board. But so far
from the survey result as well as interview with few of the employees, this review and
adjustment of salary range is long due. They are hopeful to have review by next year.
Suggestions:
Whether or not they are well paid compared to industry standard. HR should have a
transparent view of how their Basic Salary keep it as required into ranges and quartiles and
also explain necessary adjustment in short term and also give a long term view so that
employees perception about getting well paid compared to other banks no longer exists.

Findings:
Majority responded neutrally claiming their medical allowance and insurance benefit should
be same for all regardless of executive and higher rank executive plus. There should be no
discrimination among employees regarding health as well as safety.
Suggestions:
HR to review the medical insurance benefit scheme and immediately take initiatives for
revision. HR also needs to properly communicate the changes and positively communicate
that regarding health and safety there are no discrimination among employees, medical
benefits fits should be same for all regardless of executive and higher rank executive plus.

Findings:
The result is very must positive responses. Most of the employees are well aware of the
benefit. Whereas other incentives (eg. House Loan, Car Loan, Credit Card) interest rate very
much lower. On the other hand, in case of emergency when the Provident Fund load amount
is over limit.
Suggestions:
HR needs to have regular communication and update on whether employees are aware of
the benefit package they are entitled with.

Findings:
The result is a mix of positive and negative feedback BRAC Brank Leave Policy. It seems are
some employees are getting the benefit from it some of arent.
Suggestions:
HR should have a periodic review of leave policy. As majority of employees feels satisfied
about leave and to sustain that HR needs to explore whether excessive leave results in low
engagement.

Findings:
One- Third of the participants in the survey responded negatively claiming that, they arent
self-motivated to do more than what is require for the job. Mostly positive reflects reward
policy is helping to boost motivation and performance.
Suggestions:
As the BRAC Bank Limiteds HR policy and practice demands to impose total reward concept
of exchange relationship. They should really get feedback through anonymous survey and
get an overall idea about employee job satisfaction, motivation and employee engagement
level. They can also have yearly townhall meetings, discussion sessions to address necessary
review in compensation and benefit packages after getting feedback from employees which
will eventually make the employees more aware, more agreed and end of the day more
positive.

Findings:
Mostly negative responses seriously challenging organizational commitment and employees
engagement. Less engaged employees are not good sign, hence a threat to organizational
success and sustainability.
Suggestions:
HR must have a top talent retention program to identify the key assets of the organizations
success and performance hence give them new challenges, new pay scale, new important
role and projects to boost up their confidence and retain-ability.

Performance Management Survey:

BRAC Bank Limited claims to have new performance management tool in place last year.
Which gives additional drive to check its effectiveness as well as perception of the
employees?
Along with Survey Questionnaire of compensation and benefit survey, three other questions
were also part of exploration to BRAC Bank Limiteds new performance management tool
and its effectiveness.
3 questions were asked in the view of performance management practice in BRAC Bank
Limited.
3. Our annual performance appraisal is quite standard and effective.
4. My annual increment is directly associated with my last performance rating.
5. In BRAC Bank Limited, Promotion is directly related with performance and merit.

Findings:
100% participant in the survey responded positively claiming they are having an effective
performance appraisal. Though the appraisal system is new and most senior employees are
used to earlier appraisal process and programs, hence the difficulties is to adapt to newer
process and technology.
Suggestions:
HR should be following the full blown communication programs to introduce effectively the
new performance management tool to the employees. Identify and properly communicate
the value addition factors in this new performance management tool and process.

Findings:
Majority responded positively claiming there is a direct link between annual increment and
performance evaluation. However, annual increment should have been linked with not only
performance evaluation.
Suggestions:
As per survey result, there are positive responses about the annual increment being directly
linked with performance appraisal. Hence not only performance appraisal but also the
increment policy needs to be standardized and effective for the employees. It can also be
suggested that, other influential factors like economy, bank capability, market condition,
current business can be transparently applied to increment policy apart from only
performance appraisal rating.

Findings:
70% participant in the survey responded positively claiming there is a direct link between
promotion and performance rating. Hence the perception should be changes to
performance appraisal are one part of being eligible for promotion.
Suggestions:
To have best out of employees performance, HR should periodically do goal audit,
performance rating review with line managers; also effectively communicate that promotion
needing other parameters like job or responsibility enhancement, right opportunity and
capability.

Conclusion:
Human Resource Department always has been an indispensable part of any organization.
Now a days HR employees are called strategic business partners also. For BRAC Bank Ltd. To
emerge as successful bank and sustain for a long time in the industry, they must have to
have a very strong HR who can plan well ahead of the most valuable asset of the
organization, proper train them to increase competence and potential, nurture them for
winning culture and values to believe in Banks vision and mission statement, give an
effective performance appraisal process to ensure ever increasing quality of service and
productivity of the employees. BRAC Bank Ltds HR also has to ensure effective and standard
compensation and benefit package. Because well designed reward system are critical to link
employee involvement, employee engagement, job satisfaction and overall organizational
performance and long term success.
As the BRAC Bank Ltds compensation policy and practice demands to impose total reward
concept of exchange relationship. They should really get feedback through anonymous
surveys and get an overall idea about employee job satisfaction, motivation and employee
engagement level.

Attachment:
Reference:
1. Annual Report of BRAC Bank Limited:
http://www.bracbank.com/financialstatement/Annual_Report_2013.pdf
2. Official Website of BRAC Bank Limited:
http://bracbank.com/company_profile.php
3. Different types of Information Manual of BRAC Bank Limited:
Leaflets, Brochures, Synopsizes etc.
4. Human Resource Manual of BRAC Bank Limited.
5. Several Booklets & Newspapers from BRAC Bank Limited.
6. Online Survey: Survey Questionnaire
https://www.surveymonkey.com/s/7W59G9H

United International University

April 8, 2014

The Manager
BRAC Bank Limited
Dhanmondi Branch
766, Satmasjid Road, Dhanmondi R/A
Dhaka - 1205
Subject: Prayer for grant permission of survey on compensation policy and discussion with
HR manager
Dear Sir/Madam:
Warmest greetings!

The following undersigned are students at United International University taking up Masters
of Business Administration and presently they conducting a research entitled
Compensation management or compensation practice in an organization, and we need
your help to realize our objectives. In view of this, we would like to request your
participation by answering our survey questionnaire and rest assured that all information
derived here in will be treated with utmost confidentiality. Thank you very much and God
bless.

Respect yours,
Md. Azharul Islam
F.H.M. Rashedul Haq

Noted by:
--------------------------------XX
Professor

Compensation & Benefits Survey Questionnaire

BRAC Bank Limited

Gender:

Male
Female

Years in Service:

Less than a Year.

1 3 Years.
More than 3 Years.

1. I am satisfied with the current salary package in my

position.
2. Basic Salary range in my position is more than what other
Banks are offering.
3. Our annual performance appraisal is quite standard and
effective.
4. My annual increment is directly associated with my last
performance rating.
5. In BRAC Bank Limited, Promotion is directly related with
performance and merit.
6. Amount of Medical allowances & insurance benefits should
be same for all.
7. House rent and other allowances & incentives are
satisfactory compared to other Banks.
8. BRAC Bank Limited Leave Policy is very well designed.
9. I am motivated to do more than what is require of me in
my job.
10. Even if I were offered a comparable position at another
Bank, I would stay here.

Strongly Agree

Agree

Neutral

Questions

Disagree

Sl.

Strongly Disagree

(Please give a tick mark in each row)