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Chapter 1 Objective of the Term paper

The main purpose of report is to focus on the recruitment and selection process that will enhance our skill and broaden our area of knowledge about the interesting world of human resource and management. Recruitment and selection process is such type of task that is based more on projections and creativity and it involves lot of effort to be successful. By making this report we will be able to reach to the in-depth of recruitment that will help to identify our lacking of job analysis and this will be helpful for our future career. This term paper being made as the requirement of the course human resource Management objectives.

1.1-

1.2-

Limitations

We are really grateful to our course instructor Ethica Tanjeen as for her that we have got the opportunity to do such analytical task. Through making this term paper; we will be able to gain the practical knowledge. It will help us to improve our communication and analytical skill that will benefit us in future. As we are just studying in BBA so we have some lack of knowledge to do such task efficiently and effectively and there must be some mistakes in this report. But through doing such analytical job we can overcome our lacking.

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Chapter 2 Theoretical Frame Work


2.1- Recruitment and Selection
Recruitment and selection are two of the most important functions of personnel management. Recruitment precedes selection and helps in selecting a right candidate. Recruitment is a process to discover the sources of manpower to meet the requirement of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of efficient personnel. Staffing is one basic function of management. All managers have responsibility of staffing function by selecting the chief executive and even the foremen and supervisors have a staffing responsibility when they select the rank and file workers. However, the personnel manager and his personnel department is mainly concerned with the staffing function. Every organization needs to look after recruitment and selection in the initial period and thereafter as and when additional manpower is required due to expansion and development of business activities.

2.2- RECRUITMENT 2.2.1- Definition


Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. Recruitment is understood as the process of searching for and obtaining applicants for

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the jobs, selected.

from

among

whom

the

right

people

can

be

A formal definition states, It is the process of finding and attracting capable applicants for the employment. The process begins when new recruits are sought and ends when their applicants are submitted. The result is a pool of applicants from which new employees are selected. In this, the available vacancies are given wide publicity and suitable candidates are encouraged to submit applications so as to have a pool of eligible candidates for scientific selection. In recruitment, information is collected from interested candidates. For this different source such as newspaper advertisement, employment exchanges, internal promotion, etc. are used.

2.2.2- CENTRALISED V/s DECENTRALISED RECRUITMENT


Recruitment practices vary from one organization to another. Some organizations like commercial banks resort to centralized recruitment while some organizations like the Indian Railway resort to decentralized recruitment practices. Personnel department at the central office performs all the functions of recruitment in case of centralized recruitment and personnel departments at unit level/zonal level perform all the functions of recruitment concerning to the jobs of the respective unit or zone

2.2.3- MERITS OF CENTRALISED RECRUITMENT


Average cost of recruitment per candidate/unit should be relatively less due to economies of scale. It would have more expertise available to it. It can ensure broad uniformity among human resources of various units/zones in respect of education, skill, knowledge, talent, etc. It would generally be above malpractices, abuse of powers, favoritism, bias, etc. It would facilitate interchangeability of staff among various units/zones.

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It enables the line managers of various units and zones to concentrate on their operational activities by relieving them from the recruiting functions. It enables the organization to have centralized selection procedure, promotional and transfer procedure, etc. It ensures the most effective and suitable placement to candidates. It enables centralized training programmed which further brings uniformity and minimizes average cost of staff.

2.2.4- MERITS OF DECENTRALISED RECRUITMENT


The unit concerned concentrates only on those sources/places wherein normally gets the suitable candidates. As such the cost of recruitment would be relatively less. The unit gets most suitable candidates as it is well aware of the requirements of the job regarding culture, traditional, family background aspects, local factors, social factors, etc. Units can recruit candidates as and when they are required without any delay. The units would enjoy freedom in finding out, developing the sources, in selecting and employing the techniques to stimulate the candidates. The unit would relatively enjoy advantage about the availability of information, control and feedback and various functions/processes of recruitment.

2.2.4- RECRUITMENT PROCESS


Recruitment refers to the process of identifying and attracting job seekers so as to build a pool of qualified job applicants. The process comprises five interrelated stages1. 2. 3. 4. 5. Planning. Strategy development. Searching. Screening. Evaluation and control.

The ideal recruitment programmed is the one that attracts relatively larger number of qualified applicants who will Page 4 of 23

survive the screening process and accept positions with the organization, when offered. Recruitment programmed can miss the ideal in many ways i.e. by failing to attract an adequate applicant pool, by under/over selling the organization or by inadequate screening applicants before they enter the selection process. Thus, to approach the ideal, individuals responsible for the recruitment process must know how many and what types of employees are needed, where and how to look for the individuals with the appropriate qualifications and interests, what inducement to use for various types of applicants groups, how to distinguish applicants who are qualified from those who have a reasonable chance of success and how to evaluate their work. 1. RECRUITMENT PLANNING: The first stage in the recruitment process is planning. Planning involves the translation of likely job vacancies and information about the nature of these jobs into set of objectives or targets that specify the (1) Numbers and (2) Types of applicants to be contacted.

2. STRATEGY DEVELOPMENT : When it is estimated that what types of recruitment and how many are required then one has concentrate in (1). Make or Buy employees. (2). Technological sophistication of recruitment and selection devices. (3). Geographical distribution of labour markets comprising job seekers. (4). Sources of recruitment. (5). Sequencing the activities in the recruitment process. SEARCHNG:
Once a recruitment plan and strategy are worked out, the search process can begin. Search involves two steps

A). Source activation and


B). Selling. A). SOURCE ACTIVATION: Typically, sources and search methods are activated by the issuance of an employee requisition. This means that no actual recruiting takes place until lone managers have verified that vacancy does exist or will exist. B). SELLING: In selling the organization, both the message and the media deserve attention. Message refers to the employment Page 5 of 23

advertisement. With regards to media, it may be stated that effectiveness of any recruiting message depends on the media. Media are several-some have low credibility, while others enjoy high credibility. Selection of medium or media needs to be done with a lot of care. 3.

SCREENING:

Screening of applicants can be regarded as an integral part of the recruiting process, though many view it as the first step in the selection process. Even the definition on recruitment, we quoted in the beginning of this chapter, excludes screening from its scope. However, we have included screening in recruitment for valid reasons. The selection process will begin after the applications have been scrutinized and short-listed. Hiring of professors in a university is a typical situation. Application received in response to advertisements is screened and only eligible applicants are called for an interview. A selection committee comprising the Vice-chancellor, Registrar and subject experts conducts interview. Here, the recruitment process extends up to screening the applications. The selection process commences only later.

EVALUATION AND CONTROL:


Evaluation and control is necessary as considerable costs are incurred in the recruitment process. The costs generally incurred are: 1. Salaries for recruiters. 2. Management and professional time spent on preparing job description, job specifications, advertisements, agency liaison and so forth. 3. The cost of advertisements or other recruitment methods, that is, agency fees. 4. Recruitment overheads and administrative expenses. 5. Costs of overtime and outsourcing while the vacancies remain unfilled. 6. Cost of recruiting unsuitable candidates for the selection process.

2.2- SELECTION
2.2.1- Definition

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Selection is defined as the process of differentiating between applicants in order to identify (and hire) those with a greater likelihood of success in a job.
Selection is basically picking an applicant from (a pool of applicants) who has the appropriate qualification and competency to do the job.

2.2.2-

SELECTION PROCESS

Selection is a long process, commencing from the preliminary interview of the applicants and ending with the contract of employment.

The following chart gives an idea about selection process: -

External Environment

Internal Environment

Preliminary Interview

Selection Tests

Rejected Application

Employment Interview Reference and Background Analysis

Selection Decision

Physical Examination
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Job Offer
Evaluation Employment Contract

Environment factor affecting selection : Selection is influenced by several factors. More prominent among them are supply and demand of specific skills in the labour market, unemployment rate, labour- market conditions, legal and political considerations, companys image, companys policy, human resources planning and cost of hiring. The last three constitute the internal environment and the remaining form the external environment of selection process.

1. PRELIMINARY INTERVIEW

The applicants received from job seekers would be subject to scrutiny so as to eliminate unqualified applicants. This is usually followed by a preliminary interview the purpose of which is more or less the same as scrutiny of application, that is, eliminate of unqualified applicants. Scrutiny enables the HR specialists to eliminate unqualified jobseekers based on the information supplied in their application forms. Preliminary interview, on the other hand, helps reject misfits for reason, which did not appear in the application forms. Besides, preliminary interview, often called courtesy interview, is a good public relation exercise.
2. SELECTION TEST: Job seekers who pass the screening and the preliminary interview are called for tests. Different types of tests may be administered, depending on the job and the company. Generally, tests are used to determine the applicants ability, aptitude and personality. 3. INTERVIEW: The next step in the selection process is an interview. Interview is formal, in-depth conversation conducted to evaluate the applicants acceptability. It is considered to be excellent selection device. It is face-to-face exchange of view, ideas and opinion between the candidates and interviewers. Basically, interview is nothing but an oral examination of candidates. Interview can be adapted to unskilled, skilled, managerial and profession employees. 4. REFERENCE CHECK:Many employers request names, addresses, and telephone numbers of references for the purpose of verifying information and perhaps, gaining additional background information on an applicant. Although listed on the application form, references are not usually checked until an applicant has successfully reached the fourth stage of a sequential selection process. When the labour market is very

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tight, organizations references.

sometimes

hire

applicants

before

checking

5. SELECTION DECISION:After obtaining information through the preceding steps, selection decision- the most critical of all the steps- must be made. The other stages in the selection process have been used to narrow the number of the candidates. The final decision has to be made the pool of individuals who pas the tests, interviews and reference checks. 6. PHYSICAL EXAMINATION : After the selection decision and before the job offer is made, the candidate is required to undergo a physical fitness test. A job offer is, often, contingent upon the candidate being declared fit after the physical examination. The results of the medical fitness test are recorded in a statement and are preserved in the personnel records. There are several objectives behind a physical test. Obviously, one reason for a physical test is to detect if the individual carries any infectious disease. Secondly, the test assists in determining whether an applicant is physically fit to perform the work. Thirdly, the physical examination information can be used to determine if there are certain physical capabilities, which differentiate successful and less successful employees. Fourth, medical check-up protects applicants with health defects from undertaking work that could be detrimental to them or might otherwise endanger the employers property. Finally, such an examination will protect the employer from workers compensation claims that are not valid because the injuries or illness were present when the employee was hired. 7. JOB OFFER : The next step in the selection process is job offer to those applicants who have crossed all the previous hurdles. Job offer is made through a letter of appointed. Such a letter generally contains a date by which the appointee must report on duty. The appointee must be given reasonable time for reporting. Thos is particularly necessary when he or she is already in employment, in which case the appointee is required to obtain a relieving certificate from the previous employer. Again, a new job may require movement to another city, which means considerable preparation, and movement of property. 8. CONTRACT OF EMPLOYMENT : After the job offer has been mad and candidates accept the offer, certain documents need to be executed by the employer and the candidate. One such document is the attestation form. This form contains vital details about the candidate, which are authenticated Page 9 of 23

and attested by him/her. Attestation form will be a valid record for the future reference. There is also a need for preparing a contract of employment. The basic information that should be included in a written contract of employment will vary according to the level of the job, but the following checklist sets out the typical headings: 1. Job title 2. Duties, including a parse such as The employee will perform such duties and will be responsible to such a person, as the company may from time to time direct. 3. Date when continuous employment starts and the basis for calculating service. 4. Rate of pay, allowance, overtime and shift rates, method of payments. 5. Hours of work including lunch break and overtime and shift arrangements. 6. Holiday arrangements: i.) Paid holidays per year. ii.) Calculation of holiday pay. iii.) Qualifying period. iv.) Accrual of holidays and holiday pay. v.) Details of holiday year. vi.) Dates when holidays can be taken. vii.) Maximum holiday that can be take at any one time. viii.) Carryover of holiday entitlement. ix.) Public holidays. Alternatively called employment agreements or simply bonds, contracts of employment serve many useful purposes. Such contracts seek to restrain job-hoppers, to protect knowledge and information that might be vital to a companys healthy bottom line and to prevent competitors from poaching highly valued employees. 9. CONCLUDING THE SELECTION PROCESS : Contrary to popular perception, the selection process will not end with executing the employment contract. There is another step amore sensitive one reassuring those candidates who have not selected, not because of any serious deficiencies in their personality, but because their profile did not match the requirement of the organization. They must be told that those who were selected were done purely on relative merit. 10. EVALUATION OF SELECTION PROGRAMME : -

The broad test of the effectiveness of the selection process is the quality of the personnel hired. An organization must have competent and committed personnel. The selection process, if properly done, will Page 10 of 23

ensure availability of such employees. How to evaluate the effectiveness of a selection programmed? A periodic audit is the answer. People who work independent of HR department must conduct audit. The table below contains an outline that highlights the areas and questions to be covered in a systematic evaluation.

Chapter 3
Background of the Organization:

3.1 Organization Profile


Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be successful both in our mortal and immortal life. Therefore in every aspect of our life we should follow the doctrine of Al-Quran and lifestyle of Hazrat Muhammad (SAW) for our supreme success. Al-Arafah Islami Bank started its journey in 1995 with the said principles in mind and to introduce a modern banking system based on AlQuran and Sunnah. Al-Arafah Islami Bank is bit different from other commercial banks, it follows Islami Shariah in its operations and activities. Al-Arafah Islami Bank incorporated in Bangladesh as a banking company in 1995 with limited liability by shares. It started business on 27 September of that year with an authorized capital of Taka 1,000 million. At inception, its paid up capital was taka 101.20 million divided into 101,200 ordinary shares of Taka 1,000 each, 23 sponsors of the bank subscribed the total issued capital. In 2000, the paid up capital of the bank increased to Taka 253 million, of which Taka 126.50 million were paid by the promoters/sponsors and Taka 126.50 million by the general public. The bank is listed in the two stock exchanges of the country and has offered 126,000 shares for subscription and trading by the public. Al-Arafah Islami Bank is an interest free Shariah bank and its modus operation is substantially different from those of regular commercial banks. The bank however, renders all types of commercial banking services under the regulation of the Bank Companies Act 1991. It conducts its businesses on the principles of musharaka, bai-murabaha, bai-muajjal and hire purchase transactions. A Shariah Council of the bank maintains constant vigilance to ensure that the activities of the bank are being conducted according to the precepts of Islam. A group of established, dedicated and pious personalities of Bangladesh are the architects and directors of the bank. Among them a
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noted Islamic Scholar, economist, writer and ex-bureaucrat of Bangladesh government Mr. A. Z. M Shamsul Alam is the founder chairman of the bank. His progressive leadership and continuous inspiration provided a boost for the bank in getting a foothold in the financial market of Bangladesh. A group of 13 dedicated and noted Islamic personalities of Bangladesh are the member of Board of Directors of the bank. They are also noted for their business acumen and professionalism. Al-Arafah Islami Bank Ltd. Has 50 branches and a total of 1033 employees. Its authorized capital is Taka 2500 million and the paid up capital is Taka 1153.18 million. Wisdom of the directors, Islamic bankers and the wish of Almighty Allah make Al-Arafah Islami Bank Limited most modern and a leading bank in Bangladesh.

3.2- Mission & Vision


VisionTo be a pioneer in Islamic banking in Bangladesh and contribute significantly to the growth of the national economy.

Mission:
Achieving satisfaction of Almighty Allah both here and hereafter; Proliferation of Shariah based banking practice; Quality financial services adopting the latest technology; Fast and efficient customer service; Maintain high standard of business ethics; Balanced growth; Steady and competitive return on shareholders equity; Innovative banking at competitive price; Attract and retain quality human resources; Extending competitive compensation packages to the employees; Firm commitment to the growth of national economy; and Involving more in Micro and SME financing.

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3.3- Goal and Objectives of AIBL:


The maxim of the Al-Arafah Islami Bank Limited (AIBL) is to discover a new horizon of innovative contemporary banking creating an automated and computerized environment providing one stop service and prepare itself to countenance the new challenges of globalization and 12th century. One of the main objectives of the bank is to be a provider of best and effective products and services to cater to the needs of its corporate clients and provides a comprehensive range of financial services to national and multinational companies.

3.4 Management of AIBL:


Management is the process of planning, leading and controlling the work of organizations members and using all available organizational resources to reach stated organizational goals. The strength of a bank depends on the strength of its management team. Al-Arafah Islami Bank Limited is proud to have a team of highly motivated, well educated and experienced executives who have been contributing substantially to the continued progress and growth of the bank. The management of the bank is vested in 23 member board of directors, who oversee the affairs of the bank through a managing director, the chief executive officer of the bank. The registered head office of the bank is at Motijheel, Dhaka.

3.5- Products of AIBL as an Islami Bank:


The AIBL offers their customers general banking facilities which ensure the safety of their money and effective investments & return. Following are the ways through which banks collects their deposits from the clients: a) b) c) d) e) f) g) h) i) j) k) AL-WADIA CURRENT DEPOSIT (CD) MUDARABA SHORT NOTICE DEPOSIT (MSD) MUDARABA SAVINGS DEPOSIT MUDARABA TERM DEPOSIT (MTD) DEPOSIT UNDER OTHERS SCHEMES MONTHLY PROFIT BASED TERM DEPOSIT (PTD) MONTHLY INSTALLMENT BASED TERM DEPOSIT (ITD) MONTHLY INSTALLMENT BASED HAJJ DEPOSIT (MHD) ONE TIME HAJJ DEPOSIT (THD) MARRIAGE & INVESTMENT DEPOSIT (MIS) AL-ARAFAH SAVINGS BOND (ASB)
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l) m) n) o) p) q) r)

FOREIGN CURRENCY DEPOSIT (FCD) PENSION DEPOSIT SCHEME (PDS) CASH WAQFA DEPOSIT SCHEME (CWD) MUDARABA MILLINAIRE DEPOSIT SCHEME MUDARABA DOUBLE DEPOSIT SCHEME MUDARABA LACPOTI DEPOSIT SCHEME MUDARABA KOTIPOTI DEPOSIT SCHEME

Chapter 4
RECRUITMENT & SELECTION PROCESS OF AIBL:
4.1- CONCEPT OF RECRUITMENT & SELECTION:
Recruitment is the process of identifying potential incumbents/candidates for actual or anticipated organization vacancies. Job candidates are determined through searching and sourcing. Recruitment is the process of finding qualified and competent people for the organization and encourages potential incumbents to apply for the vacancies available. Selection is the process of determining potential candidates among the applicants for the vacancies after completing formal process of identification of candidates, testing and interviewing and approvals by appropriate authority. Once an effective recruitment program has brought out enough applicants pool then relevant personnel of the organization works to select the best candidate for specific job/vacancy. Recruitment and Selection Process (RSP) plays the role of vehicle by which one gets his position in an organization either at lower or middle or top level. An organization can not recruit and select the best personnel without its proper and adequate use. The success or failure of an organization depends on recruitment and selection committee of the organization. Recruitment objective of the bank are as follows: To provide the bank with an efficient and cost effective human resources set up To keep bank free from unhealthy practice of grouping or trade union. The bank strictly follows all steps of recruitment and selection process defined as per the company policy to achieve the goal, vision and mission & above all keep in the mind aforesaid objectives.

4.2- RECRUITMENT PROCESS:


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The recruitment process putting the right people in right place at the right time- is one of the most critical and important task for any organization. This is basically triggering force to bring out competent people by a formal recruitment process. Recruitment refers to the process of identifying and attracting job seekers to build a pool of qualified job applicants. The process comprises five phases: 1) 2) 3) 4) 5) Planning Strategy development Searching Screening Evaluation and control

The ideal recruitment program is the one that attracts a relatively large number of qualified applicants who will survive the screening process and accept positions within the organization, when offered. Recruitment programs can not attract the ideal candidate in many occasions either by failing to build an competent applicant pool, by under/over selling the organization or by inadequate screening process before they come into selection level. Therefore to approach competent candidate or incumbent, individual personnel responsible for the recruitment process, must know how many and what types of employees are required for the vacancies, where and how to look for individuals with the appropriate qualifications and skill sets. What ways or inducements to apply or to avoid for various types of applicant groups, how to distinguish applications that are unqualified from having a reasonable chance of success and to evaluate their work.

4.3- SOURCES OF RECRUITMENT FOR AIBL:


a) Internal source b) External source Internal source: refers to the present working force of the bank. In the event of vacancies someone already on the payroll is promoted, transferred or sometime demoted to lower level. External source: refers to recruitment of new bunch of people from the applicant pools screened from interested candidates who have applied for the vacancies. AIBL recruits people from both internal and external sources. METHOD OF INTERNAL RECRUITMENT: There are several methods of finding qualified applicants within the bank. Among them most common are as follows: Job Position: Job position involves announcement of job opening to all existing employees. This announcement carry information about the nature of the

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position and qualification needed and any employee who is interested may apply for this job through his or her line manager or divisional head. Employee referrals: Another way to find applicants is through employee referrals by other departments. Information communication among managers can lead to identifying best candidates for a job is already working in different section of the firm. Skill Inventories: Information about every employees skills, education, work history and other important factors are preserved in a formal database, which may be used to identifying employees with the desired attributes needed for a particular job.

4.4- METHOD FOR EXTERNAL RECRUITMENT:


AIBL generally makes an applicants pool only by newspaper advertisement. On certain occasions they recruit people from interns. Advertising: This is one of the most popular methods. The most useful advertisement is one that specifies the exact nature of the job, the qualifications required and the salary range. The advertising medium should be selected with caution with target audience in mind. Internship: Every BBA student must go through an internship program. It is a partial fulfillment of the requirement of BBA program. Internship is an important manpower source for the organization. It can be win-win situation for both the student as well the employers. For students it may mean being able to home business skills, learn more about potential employers and know their likings and dis-likings when it comes to choosing carriers. An employers can use the contribution of interns by considering and selecting them as full time employees.

4.5- Advantages recruitment:

and

disadvantages

of

internal

When internal recruitment is used the vacancy is filled by a person of known ability. There are some benefits of internal recruitment: Improve goodwill of the organization Improve motivation of employees Improve probability of better selection as the candidates are better known to the organization Less costly
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In the case of internal recruitment the bank also faces some difficulties: Prevents fresh people from outside the organization who may be right and competent Option is limited within the bank Inhibits innovation and creativity

4.6- ADVANTAGES & DISADVANTAGES OF EXTERNAL RECRUITMENT:


External recruitment can bring in new ideas and viewpoints. Other advantages are as follows: Injection of new bloods with new knowledge and creativity More economic for the organization in the long run

There are some disadvantages for external recruitment which are as follows: External recruitment is costly Cause brain drain due to fear of lack of growth potential Hanger probability of employee turnover Demoralizing existing employees

4.7- HOW TO DEFINE SELECTION:


Selection is the process of choosing individuals out of pool of job applicants with required qualification and competency to fill jobs in the organization. It is the process of differentiating between applicants in order to identify those with a greater likelihood of success in a job. It is a long process, commencing from the preliminary interview of the applicants and ending with the contract of employment. The process differs among organization and between two different jobs within the same organization. Selection procedure for senior manager will be long drawn and rigorous, but it is simple and short while hiring shop floor workers.

4.8- INTERVIEW & TEST:


Interview and testing play the crucial role for a HR manager nowadays in the selection process of an organization. HOW TO DEFINE INTERVIEW AIBL call applicants whose qualification matches closely with the job requirement. A face to face interview is organized for job applicants. TYPES OF INTERVIEW: Preliminary interview Planned interview Non-directive or free interview
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Depth interview Stressed interview Board interview

TEST:
According H.E BUTT, Testing is a device for measuring qualitatively a typical sample of mental or motor performance in order to predict what an individual will do under certain circumstances. Job applicants of AIBL should go through some types of test. These are as follows: Different types of standard tests Intelligent tests Ability tests Personality tests Interest tests

4.9- CONTRACTS OF EMPLOYMENT:


After the job offer has been made and candidates accept the offer, certain documents need to be executed by the employers and candidates. One such document is the attestation form. This form contains vital details about the candidates which are authenticated and attested by him. Attestation will be a valid record for future reference. There is also a need for preparing a contract of employment. The basic information that should be included in a written contract of employment will vary according to the level of the job: Job title Duties Date when continuous employment starts and the basis for calculating service Rate of payments and allowances Hours of work including lunch break and overtime and shift arrangements Holiday arrangements Sickness Length of notice due to and from employee Disciplinary procedure ( or any reference for it) Work rules ( or any reference for them) Arrangement for terminating employment

4.10- CONCLUDING THE SELECTION PROCESS:


After providing the appointment letter to the finally selected employees AIBL formally ends the selection process.

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CHAPTER 5
FINDINGS AND STRENGTHS & WEAKNESSES OF AIBL 5.1- SUMMARY OF THE FINDINGS:
In 2008, the amount of deposit has accumulated to taka 26,685,444,177 and the total investment of the bank stood at taka 5079.21 million against taka 3728.41 million during the corresponding period of last year. The percentage of increase is 36.23% as against 13% in banking sector. The bank has earned taka 1,088,561,679 and incurred an expense of taka 288,104,714. At the end of the year the profit before tax has stood taka 800,456,965 which is 182.53% more than taka 283,317,303 pretax income of the last year.

5.2- MOST COMMON FINDINGS ARE GIVEN BELOW (in brief):


Understanding customer & banker: There is a gap between the customer and bankers. Customers are unaware about the moral of Islamic banking system. Sometimes they are not familiar with the rules of Islamic Banking. Centralization: The AIBL is too much centralized. For each and every work branch office has to get permission from the head office. The head office tightly controls each and every branch office. This dependency on head office causes slow down their activities. Lengthy investment process: In Islamic Banking System loan is very lengthy process. But it is lengthier in AIBL, because branch managers do
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not have the power to give loan. For every loan, managers have to send proposal to head office. Management does not want to take any risk. Lack of personal loan: AIBL does not give any personal loan, because it is against the rules of Islamic Banking System. However, personal loan is very popular in other banks, because the rate of interest is very high for personal loan. AIBL invests in halal business: AIBL does not invest in Hotel business. But this business has high rate of returns. AIBL mostly invest is purchase and sales business. They also invest in real estate business. LC for halal products: AIBL does not open LC for the products like energy drinks, CD, VCD and DVD. However, other banks made high profit by opening these types of LC recently. Does not buy savings bonds: Some international and local savings bonds give high rate of returns. AIBL does not buy these because it is against the rules of Islamic Banking System. Managers power: Manager of any branch of AIBL does not have the power of giving any loan to the clients without the permission of head office. However, in other banks manager have the power to give small loans. Problems in loan repayment process: The client has to repay the money in the particular branch from where he or she takes the loan. Sometimes customers fail to repay the installment. If customers have the facilities to repay the loan in any branch it will be better for them. Staff loans: AIBL offers loan to its own staff after a long period of job. However, the rate of interest is higher where other banks give loan to their staff at a cheaper rate. Therefore, staff loses interest to work to some extent. Internal recruitment might not be effective and fruitful. Selection process may not be followed in line with requirement where internal request may be accepted. Discrepancy in external recruitment source. Formal recruitment may not be followed on exceptional cases.

5.3- CORE STRENGTH OF AIBL:

The following are the core strength of Islamic bank for which it is now considered to be the emerging sector for success: In accordance with Islamic Shariah, all actions of the bank are conducted where profit is the legal substitute to interest. The total deposit of the bank was taka 26,685,444,177 at 31st December 2008. At the same time in the last year it was far lower. Experienced manpower and efficient employees are being involved in busy subsection of this section to meet the clients satisfaction. It distributes a significant amount of profit that they earn by investing different areas. It works to the development of socioeconomic and value system of the people that is not seen in case of conventional banking. It invests in the human welfare sector. So, this bank practices mainly welfare banking and invest only those sectors where human welfare can be ensured.
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It has very fair and transparent recruitment and selection process. They have approved formal recruitment and selection policy. AIBL follows the policy all the time. They have a very good internal sourcing system. They have a very fruitful and effective panel of recruitment and selection.

5.4- MAJOR WEAKNESS OF AIBL:


AIBL is guided by some principles but it has some weakness, some of the major weaknesses are discussed below: Risk management system is not strong. The bank has already exposed to a variety of risks, the most important of which are credit risk, market risk and liquidity risk. Technology that AIBL is using for their banking system is not updated. Now there is some international bank in Bangladesh, they are very fast and very updated. AIBL is losing their clients because of lack of latest technology. The management of AIBL takes no risk when they give loans to their clients. They are very slow in decision making. They sometimes fail to take the current opportunities for this slow decision making process. Advertising and promotions are the weak points of AIBL. AIBL does not have any effective marketing activities. Other banks have better marketing strategy. Better recruitment pool may not be made due to good marketing of their advertisement. Internal recruitments may not be effective for the desired position. External recruitment may not be suited due to improper screening. Selection process may not be followed on exceptional cases cause problems.

CHAPTER 6

RECOMMENDATION & CONCLUSION


6.1- RECOMMENDATION
The possible recommendations are as follows: AIBL should give a mass advertisement mentioning the different offerings like Brac Bank, Standard Chartered Bank, HSBC and other local banks are practicing. AIBL should use the latest banking technology and software to provide better services to the customers. It will also attract the customers of international banks. AIBL should pursue advertising and marketing campaign in order to build a strong image among the people. They should carry out aggressive marketing campaign to attract clients.

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AIBL should offer different types of loans to their own staff immediately after confirming their job. This loan will influence them for better performance. The interest rate on this loan must be less than other banks interest rate. The dependency on head office in every step should be avoided. They should permit the branches to work independently. Managers of AIBL should have the power of giving small loans to the clients. It is very important for the banks to increase the investment. In Islamic Banking system loan is very lengthy process. AIBL should take steps to minimize the process of loan system because customers dislike the lengthy process. The client has to repay the money in the particular branch from where he or she got the loan. This is why whenever the customer wants to repay the installment in time. Communication problem sometimes force him or her to become defaulter. If the AIBL allows the clients to repay money at any branches she or he wants, it will be better for them. Bank should offer more facilities to the customers such as credit card, visa card, ATM machine etc. to survive in the competition. Best industry practice of recruitment and selection should be followed. Existing policy for recruitment and selection should be reviewed and revised as and when required basis. AIBL should adopt international and local fast runner and reputed banks practices in their regular and operational activities.

6.2 CONCLUSION

The AIBL has been attempted to operate its business successfully in Bangladesh since inception. AIBL has already developed an image and good impression among its clients by offering its excellent services. The success is being resulted for AIBL from dedication, commitment and dynamic leadership of its management over the periods. During the short span of time of its operation, the bank has successfully grabbed a position as progressive and dynamic financial institution in the county. If the bank goes this way, it is expected that in the near future AIBL may become one of the top performer in the banking sector. The bank should take necessary actions for increasing their investment and maintaining this deposit figure in future. Therefore AIBL should adopt and practice best industry policies for recruitment and selection that brings significant growth and keep the continuous increment to their revenue and asset base.

BIBLIGRAPHY & REFERENCES


1. BOOKS, PERIODICALS & JOURNALS a) DEV NATH, DR. R. M Banks and Legal Environment b) WENTHER, B WILLIAM & DAVIS, KEITH-Human Management c) Annual Reports of Al-Arafah Islami Bank Limited d)Bangladesh Bank publications and circulars

Resources

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e) Banks circulars and reports 2. WEBSITES a) www.al-arafahbank.com b) www.bangladeshbank.com c) www.google.com

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