Human Resource Management of EXIM Bank

Human Resource Management of EXIM Bank Limited

Export Import Bank of Bangladesh Limited (EXIM Bank) is one of the leading private commercial banks in Bangladesh. The Bank came into operation as a commercial bank on 3 August 1999 as per rules and regulations of Bangladesh Bank.

As of 2014 the bank has operations across the country with 80 branches and 45 ATM booths. By July 2004 the bank converted all of its conventional banking operation into Shariah based Islamic banking. The bank bought core banking software T-24 supplied by Swiss based IT company Temenos in 2010. They have taken initiatives to set up a widespread network of ATM Machines throughout the country as well as launched “EXIM KISHAN”, an agricultural product in line with the directive of Central Bank for agricultural investment.

One of the prominent features of EXIM Bank is their active participation in Corporate social responsibility (CSR). The bank has contributed to humanitarian activities as well as social and cultural activities including undertaking scholarship programs. It has also came forward in beautification of Dhaka city, funding foot over-bridges at crowded points of the city and creating income generating welfare schemes.

Nature of the business

EXIM bank is the first bank in Bangladesh to have transformed all of its core operations of conventional banking into shariah-based banking, since July/2004.They offer banking services for Muslims and nonMuslims alike allowing the customers to have choice and flexibility in their savings and investments. The bank provides all kinds of Islamic banking services, as well as regular commercial banking services to its customers.

Shariah council

Islamic banking is guided by Islamic law which is known as Shariah principles. In particular, Islamic law prohibits the collection and payment of interest, which is known as RIBA. Generally, Islamic law also prohibits trading in financial risk (which is seen as a form of gambling) that are considered unlawful, or Haraam. The Islamic capitalism was developed between the eighth and twelfth centuries. Gold dinar was the base of monetary system in that economy. Mirza Basheer-ud-Din Mahmood Ahmad is known as the father of modern Islamic economics. He described it in detail in his books, Nizame Nau, in 1942. In his book he proposed a banking system based on “Mudarabah” which is known as profit and loss sharing.

The Board of directors has formed a Shariah Supervisory Board for the Bank. Their duty is to monitor the entire Bank’s transactional procedures and assuring its Shariah compliance. This board consists of 11 members who are prominent ulemas, reputed bankers and eminent economists of the country.

Professor Moulana Muhammad Salah Uddin is the Chairman of the council. The tasks of the Shariah supervisor in summary is replying to queries of the Bank’s administration, staff members, shareholders, depositors, and customers as well as following up with the Shariah auditors and providing them with guidance, submitting reports and remarks to the Fatwa & Shariah Supervision Board and the administration, participating in the Bank’s training programs, participating in the supervision over the AlIqtisad AlIslami magazine, handling the duties of being the General Secretary of the Board.

Human Resource Management of EXIM Bank Bangladesh

Description of the project:

The project undertaken is Human Resource Management of EXIM Bank and it focuses on critical functions of HR that plays crucial role in achieving organization goal and achievement. The project starts with an introduction to Human Resource Management its functions and importance. As we proceed the project elaborates on each of the functions of Human Resource starting from HR Planning, Recruitment, Selection, Training and Development, Compensation and Benefits. All of the functions have been studied in detail with relevant examples. In my report I have tried to convey my understanding of the functionalities of HR which are core to my area of study.

The second chapter deals with HR and strategic planning. In this chapter I have focused on strategic HR Planning including with its definition and followed by purpose of this function. I have discussed in detail the process involved in strategic HR planning and the types of strategies used by organizations with relevant examples. Another important part of HR Planning is Job Analysis which is included in this part also. The third chapter focuses on Recruitment. This section includes the types of recruitment available and advantages and disadvantages of each of those types. The fourth chapter deals with Selection. The process is discussed in detail with special focus on interview. The chapter concludes like previous chapters with organization practice. The fifth chapter is a small one that talks about orientation in brief and its purpose in HR. The sixth chapter is the largest one as it covers a crucial HR function that is Compensation and Benefit. In this part I have discussed the types of compensation available, the benefits of compensation. I have discussed in detail each component of compensation with relevant examples. The section also includes equity and direct and indirect compensation starting from wage, salary, to provident fund, gratuity, leave, retirement benefits etc. The seventh chapter covers Training and Development. In this section the topics covered are the needs of Training and Development, benefits and advantages followed by detailed description of different types of training and development methods such as on the job training, off the job training etc. After that we have SWOT Analysis on the strengths, weakness, opportunities and threats on Human Resource Management Practice at EXIM Bank. The following chapters then discuss results focusing on critical points from Recruitment, Selection, Training and Development, Compensation and benefits and HR Planning. After that I tried to come up with some recommendations that can better Human Resource Management at EXIM Bank, and this is lastly followed by conclusion and reference.

Objective of the Report

The main objective of this report is to learn about Human Resources Management practices and policies of EXIM Bank Ltd.

Special objectives are:

To know Human Resources Planning practices of the bank.
To learn about recruiting and selecting procedure of the bank.
To identify training and development methods applied in the bank.
To know performance management practices and compensation practices in the bank.

Methodology

In order to conduct such a study the report follows some specific methods. The report is descriptive in nature. Data were collected from both primary and secondary sources.

Primary data were collected from the bank through questionnaire, from employees and other HR Materials.

Secondary data were collected from various external sources like texts, internet and annual report of the bank.

Human Resource Management

Human resource management involves all management decisions and practices that directly affect or influence the people, or human resources, who work for the organization. In modern years, amplified concentration has been devoted to how organizations manage Human Resources. This augmented focus comes from the comprehension that an organization’s employees facilitate an organization to attain its goals and the management of these human resources is vital to an organization’s success.

Importance of Human Resource Management:

In the modern business world, professionals in the human resources area are essential elements in the accomplishment of any organization. Their jobs entail a fresh level of sophistication that is unmatched in human resources management. Not surprisingly, their status in the organization has also been elevated.

Even the name has changed. Although the terms personnel and human resources management are frequently used interchangeably, it is important to note that the two connote quite different aspects.

Once, a single individual heading the personal function, today the human resource department head may be a vice president sitting on executive boards, and participating in the development of the overall organizational strategy.

Human Resource Management refers to the practices and policies one need to carry out the people or personnel aspects of one’s management job. These include:

Conducting job analysis (determining the nature of each employee’s job)
Planning labor needs and recruiting job candidate.

iii. Selecting job candidates

Orienting and training new employees
Managing wages and salaries (determining how to compensate employees)
Providing incentives and benefits

vii. Appraising performance

viii. Communicating (interviewing, counseling, disciplining)

Training and development
Building employee commitment

Human Resource Planning

Strategic HR Planning

Strategic HR planning is an imperative constituent of strategic HR management. It links HR management directly to the strategic plan of the organization. Most mid- to large sized organizations have a strategic plan that leads them in profitably meeting the organization mission and goals. Organizations periodically formulate financial plans to make certain they accomplish organizational goals and while workforce plans are not as frequent, they are just as vital.

Even a small organization with as few as 10 staff can develop a strategic plan to funnel decisions about the future. Strategic HR planning is also important from a budgetary point of view so that it can factor the costs of recruitment, training, etc. into the organization’s operating budget.

Strategic HR management is defined as:

Integrating human resource management strategies and systems to achieve the overall mission, strategies, and success of the firm while meeting the needs of employees and other stakeholders. Source: Herman Schwind, Hari Das and Terry Wagar, Human Resource Management: A Strategic Approach.

The overall purpose of strategic HR planning is to:

Ensure ample human resources to meet the strategic goals and operational plans of the organization – the right people with the right skills at the right time
Keep up with social, economic, legislative and technological trends that impact on human resources in.
Remain flexible so that organization can manage change if the future is different than anticipated

Strategic HR planning predicts the future HR management needs of the organization after analyzing the organization’s current human resources, the external labour market and the future HR environment that the organization will be operating in. The analysis of HR management issues external to the organization and developing scenarios about the future are what distinguishes strategic planning from operational planning.

The strategic HR planning process

The strategic HR planning process has four steps:

Assessing the current HR capacity
Forecasting HR requirements
Gap analysis
Developing HR strategies to support organizational strategies

Assessing current HR capacity

Based up on the organization’s strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the organization. The knowledge, skills and abilities of the current staff need to be identified.

An employee’s performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee’s current development plans.

Forecasting HR requirements

The next step is to forecast HR needs for the future based on the strategic goals of the organization. Realistic forecasting of human resources involves estimating both demand and supply. Questions to be answered include:

How many staff will be required to achieve the strategic goals of the organization?
What jobs will need to be filled?
What skill sets will people need?

When forecasting demands for HR, challenges faced in external environment has to be also considered such as economy, competition etc.

Documenting the strategic HR plan

Once the strategies for HR in the organization have been developed they should be documented in an HR plan. This is a brief document that states the key assumptions and the resulting strategies along with who has responsibility for the strategies and the timelines for implementation.

Implementing the strategic HR plan

Once the HR strategic plan is complete the next step is to implement it.

Agreement with the plan

It is important that the board chair, executive director and senior managers agree with the strategic HR plan. It may seem like a redundant step if everyone has been involved all the way along, but it’s always good to get final confirmation.

Communication

The strategic HR plan needs to be communicated throughout the organization. The communication should include:

How the plan ties to the organization’s overall strategic plan
What changes in HR management policies, practices and activities will be made to support the strategic plan
How any changes in HR management will impact on staff including a timeframe if appropriate
How each individual member of staff can contribute to the plan
How staff will be supported through any changes
How the organization will be different in the future

It is impossible to communicate too much (but all too easy to communicate too little), especially when changes involve people. However, the amount of detail should vary depending upon the audience.

Legislation and mandate

It has to be ensured that the actions considered under the planning are compliant with existing laws, regulations and the constitution and bylaws of organization and region of operating.

Evaluation

HR plans need to be updated on a regular basis. It is important to establish the information necessary to evaluate the success of the new plan. Benchmarks need to be selected and measured over time to determine if the plan is successful in achieving the desired objectives.

Recruitment

Recruitment synonymous with “hiring”, refers to the overall process of attracting, selecting and appointing suitable candidates for jobs within an organization, either permanent or temporary, unpaid positions, such as voluntary roles or training programmes. Managers, human resource generalists and recruitment specialists may recruit in-house, while public-sector employment agencies, commercial recruitment agencies, or specialist search consultancies may undertake parts of the process. Internetbased technologies to support all aspects of recruitment has become widespread.

Process

Once a vacancy has been established in the organization and job position is defined, the organization goes for recruitment in which the organization tries to attract the right candidates for the job.

The first step in recruitment is setting criterion on which basis candidates will be selected. These should come from the job description for the position and must be measurable within the selection process.

The organization gives a job posting which includes information about:

Information about the role

Job title
Purpose of the position
High level overview of responsibilities
Identify whether they will be part of a team, leading a team or working independently
Work location and travel requirements (if any)
The reporting arrangements
Requirements including experience, qualifications, skills and personal attributes
The salary and benefits associated with the position (may say the salary is dependent on experience

Information about the application process

This section advises candidates:

Where to get more information (typically company website)
How they can make their application (e.g., by email, by mail, online application) and the necessary contact details
Whether the selected candidate will need to meet any special requirements, for example, language testing or criminal records check
The application deadline

Information about the organization

This is a key part of attracting the candidate to the position and it helps the candidate understand the mission of the organization and its culture. It includes:

A brief description of the organization.
Why the organization is a good place to work.
What it’s like to work there (e.g., casual, flexible, team environment, etc.)
Opportunities for development and career progression

Types of Recruitment

Internal Recruitment

Internal recruitment gives existing employees and volunteers the prospect to apply for the job opening. It is linked to succession planning and career development. Internal recruitment can include promotions to a higher level position, and also lateral moves to a same level position.

Potential benefits of this approach

Management already has a good idea of the employee’s capabilities
Rewards the employee/volunteer for past performance
Gives the employee/volunteer an opportunity for career development
Retains the organization’s investment in the employee/volunteer
Reduces the amount of time necessary to orient the person to the new position
Reduces the time and costs of recruitment
Supports positive morale and retention by signaling the possibility of internal progression

Potential drawbacks of this approach

If used in isolation, provides a limited number of people to select from
Reduces the opportunity for increasing diversity within organization
Employees that apply for the position and are not selected may be disgruntled

External recruitment via Print advertisements

Print advertisements may appear in national or local newspapers, bulletins, professional journals, or magazines.

Potential benefits of this approach

a large audience can be reached in a specific geographic area
a large audience with specialized skills can be reached

Potential drawbacks of this approach

If the ad is general it may generate a significant number of applications from unqualified candidates
There is a wide range of costs involved – some can be expensive
Professional publications may not be published frequently which can lead to increased recruiting timeframes

Selection

Selection is the process of screening applicants to ensure that the most appropriate candidate is hired. The first step in the selection process is to review the information (resume, application form) provided by all job applicants to determine which applicants meet the minimum qualifications as stated in the job posting. Those job applicants who meet or exceed the minimum job qualifications are then assessed to decide which ones will be short-listed for a job interview.

The most common method of selection for all positions include an interview followed by a reference check. After making a conditional offer, additional selection techniques can include: criminal records check, driver’s records check.

Working with a selection panel

A selection panel has to be developed for those to be involved for the selection process. For instance members who will help prepare questions for written test or develop interview questions and also participate in the interview session. It helps to develop selection criteria, screen resume, assess candidates against selection criteria and give input about final selection.

The Interview

It is important to prepare a list of questions to ask during the interview. Questions should cover past job experience, key performance areas. Also follow up questions should be prepared. A variety of approaches can be used to get different kinds of information, tailoring questions to open up a topic for conversation or to confirm information.

Conducting the interviews

The place of interview also has to be carefully designed. An appropriate environment has to be set up. In conducting interviews it is important to make the candidate feel relaxed and comfortable as a candidate under stress will not reveal his/her full potential

It is important not be bias during interview. The following is a list of common biases that can occur when interviewing candidates:

Leniency/ Strictness Bias occurs given people differ in how they evaluate people; some interviews are very liberal and lenient, while others are critical and demanding. This bias tends to raise or lower the scores of people who are interviewed.

Halo Effect occurs when the interviewer lets one favoured qualification, trait, or experience influence all other factors, resulting in an unduly high overall performance rating.

Horns Effect, similar to the halo effect, allows one disfavoured qualification, trait, or experience take precedence and result in an unfairly low candidate rating.

Similarity Effect occurs when an evaluator rates a candidate based on characteristics the appraiser sees in themselves. Interviewers have an unconscious tendency to favor people who are physically and professionally similar to them.

Appraiser Biases occurs when an evaluation is based on individual demographic differences. Personal beliefs, attitudes, assumptions, and preferences can lead to unfair evaluations of candidates.

Primacy Effect is associated with “the first impression,” interviewers’ first impressions of a candidate can often play a powerful role in their subsequent assessment.

Contrast Effect occurs when one’s individual ranking is based on one’s position relative to others in the group. If the interview pool consists of a number of outstanding candidates, it is extremely difficult for an average candidate to be picked as number one, but in a substandard pool, the average candidate may inexplicably stand out.

Checking the references of final candidates

After selection, checking references carefully and thoroughly is one way to avoid hiring the wrong person. Telephone interviews are the best way to get more depth about the candidate’s character and background.

Decision making

During the final stage, it is helpful if evaluation of final candidates against each other is carried out based on rated criteria to identify the best candidate based on skills, worker characteristics and organizational fit. Only after careful reviewing, final decision should be made.

A record of all recruitment, selection files should be kept and decision should be nondiscriminatory, compliant with provincial and federal laws and hiring policy.

Placing the offer

After a decision has been made the selected candidates have to be informed. It is courteous to let all other final candidates by phone of the outcome of the recruitment process.

Drawing up the contract

The final stage is drawing up a contract which is agreement between organization and employee in writing. A written contract is the ounce of prevention that helps to avoid disputes. It spells out expectations of employees and the obligations towards each other. A written contract can take many forms – a letter, a proposal or a formal agreement, for example.

Orientation

Employee orientation provides new employees with basic background information they need to perform their jobs satisfactory, such as information about organizational rules.

Process of orientation:

Orientation is actually parts of the employer’s new- employee socialization process. Socialization is the ongoing process of instilling in all employee the prevailing attitudes, standard, values, and patterns of behavior that are expected by the organization and its departments.

Orientation programs range from brief, informal introduction to lengthy, formal programs. In either, new employees usually get a handbook or printed material that cover things like working hours, performance reviews, getting on the payroll, and vacations, as well as a tour of the facilities. Other handbook information typically includes employee benefits, personnel policies, the employee’s daily routing, company organization and operation, and safety measures and regulations.

The HR specialist, who explains such matters as working hours and vacations, usually performs the first parts of the orientation. The employee is then introduced to his or her new supervisor. The letter continues the orientation by explaining the exact nature of the job, introducing the person to his or her new colleagues, familiarizing the new employee with the workplace, and hopefully helping to reduce the new person’s first day jitters.

Purpose of Orientation:

Orientation is helping the new employees, who join the organization. By orientation the employee will be able to understand the rules and regulations of the organization and also know about the working hours, working condition, organizational profile etc.

Organization Practice

EXIM Bank arranges the orientation program in a formal way. They invite their new employees who are selected for the job in a certain place. They inform them about their job hour, organizational rules and regulations, about their top managements and also their bank’s profile which makes the new employees feel comfortable and settle in the job quickly.

Compensation and Benefits

Compensation can be defined as all of the rewards earned by employees in return for their labour. This includes:

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

While employees tend to focus on direct financial compensation when contemplating their rewards, according to the McKinsey Journal, for individuals who are relatively satisfied with their salary, it is the non-financial rewards that tend to be more effective in contributing to long-term employee engagement.

The benefits of benefits plans

Although expensive, there are many intrinsic benefits to providing employees with a comprehensive benefit plan. For most, it is the ability to find and keep highly qualified staff. With the sector being highly competitive and the number of new employees entering the workforce dwindling, employers are challenged to become even more creative and responsive in the design, timing and generosity of their benefit plans. The more progressive the organization, the more flexible the structure is in response to today’s challenges. Employers who continue to provide the more traditional and limited program, may find it more difficult to find and keep different types of employees.

Here are just a few of the advantages of offering benefits to employees:

For employers:

By providing increased access and flexibility in employee benefits, employers can not only recruit but retain qualified employees
Providing benefits to employees is seen as managing high-risk coverage at low costs and easing the company’s financial burden
Employee benefits have been proven to improve productivity because employees are more effective with they are assured of security for themselves and their families

For employees:

Employees can experience a peace of mind which leads to increased productivity and satisfaction by being assured that they and their families are protected in any mishap
Employees with personal life and disability insurance can enjoy additional protection including income replacement in the event of serious illness or disability
Employees can feel a sense of pride in their employer if they are satisfied with the coverage they receive

Although these options have a cost associated with them, the cost is significantly less than the benefit an organization can reap in return

Equity

Using equity or fairness is a key component to creating a successful compensation and rewards program. Organizations can support equity by:

Ensuring that all employees in an organization are being treated fairly
Developing salary ranges that are relative to where an organization wants to be in the market
Rewarding employees according to the relative value of their jobs within an organization
Determining Salary is based on the job requirements and not on the skills and performance of the employee

Perceived inequity or unfairness can result in low morale and loss of organizational effectiveness. For example, if employees feel they are being compensated unfairly, they may restrict their efforts or leave the organization, damaging the organization’s overall performance.

Internal Equity

Internal Equity is the term used to describe fair compensation with respect to how different positions within the organization relate to each other. It is the relative ranking of all jobs to each other based on their value to the organization. Internal job to job comparison is based on job Analysis, job descriptions and job evaluation.

An internal equity study can determine if there is equity between like-positions and if all roles in the organization are governed by the same compensation guidelines. Job evaluation is the process of determining the value of a job within an organization relative to all the other jobs in that organization.

External Equity

External Equity is the term used to describe fair and competitive compensation with respect to the market value of a job. It is the average level at which organization pays relative to the outside labour market. This is determined through market definitions (defining your relevant labour market), salary surveys, pay policy decision etc.

Employee Equity

Employee Equity refers to fairness in compensation among employees in the same job, or whose positions are classified in the same job grade or level. This does not mean that all employees are paid the same, it means that they are paid fairly in relation to other staff in the same role. Differences in salary may be based on job required education, relevant experience, years in service in the job, starting salary, or responsibility level.

Pay Equity

Pay Equity is the difference in pay between males and females. At first, pay equity meant equal pay for equal work, the premise that individuals should be paid the same for wage for the same kind of work regardless of gender (or age, color or religion). The concept later evolved to equal pay for work of equal value. Women and men must receive equal pay when they are doing substantially the same kind of work, requiring the same skill, effort and responsibility performed under similar working conditions in the same establishment. In many jurisdictions a formal Pay Equity Plan is legally required.

Compensation Components

Direct Financial Compensation

When deciding what the organization will pay for wages and salaries, it is imperative to comprehend the economic conditions of the country, the number of potential employees and the legislative requirements in place. When determining what to pay, first consideration is placement of the role organizationally which can be determined through job evaluation/classification. The second consideration is the job relevant skills and experience the applicant possesses which may impact their placement in the salary range upon hire.

Deciding what to pay

They are many situations in which organization will be faced with deciding what to pay an employee.

A new hire
An existing employee due for an increase
An existing employee moving into a new role
A valuable employee who is considering leaving because of compensation
Market conditions
Scarce skill

It is important to ensure that the approach taken is guided by the compensation philosophy and is applied consistently. Ensuring that established guidelines are followed will prevent offering a compensation package so tailored to a person that the organization is jeopardized by having too heavy a financial burden or that flexible arrangements actually hinder the critical work from being completed. It takes a carefully crafted balance between the organizational needs and the individual considerations to arrive at the optimal compensation structure.

Retirement benefits

A retirement plan or a pension is an arrangement by an employer to provide their employees with an income when they are no longer earning a regular income from working. Retirement plans may be set up by in a variety of ways but typically will have a form of a guaranteed payment. Often retirement plans require both the employer and employee to contribute money into a fund while employed so that they will receive benefits upon retirement. Pension plans are considered a form of delayed income.

Pension Plans

Pension plans are usually classified as either defined benefit or defined contribution according to how the payments are determined.

A defined benefit plan guarantees a predictable monthly payment at retirement, calculated by using an established formula with some combination of the employee’s salary, years of service and/or age.
A defined contribution plan will provide a payment/payout at retirement that will be determined by the amount of money contributed during the life of the plan and the performance of the stock or investments used.

Phased Retirement

Today’s work place is challenged with having up to four different generations working side by side. For most employers, designing a compensation and benefit structure that address the unique needs of each demographic group, is a complex task. Added to that is the shift in pension structures over the past few years. Some non-profit organizations provide their employees with a pension fund; however most tend to offer only contributions to an RRSP. This leads to an increasing number of employees not feeling able to retire.

It is important that organizations understand the details of their pension plan, whether it is a defined benefit or contribution or simply an RRSP program before considering design changes. For those not hindered by a design change, one option that is gaining in popularity, especially in this sector, is providing a phased retirement program for older skilled employees.

For employees:

Components of the phased program are allowing employees who might be considering retiring to delay their departure date, continue to earn a partial income that reduces the burden on their pension income, they continue to receive benefit coverage and are able to acclimate gradually by continuing to reduce their hours until they are prepared to leave.

For employers:

Employers are able to develop a timely and effective succession plan without losing critical skills or intellectual capital. Organizations benefit by being able to tap into the most experienced staff at a reduced salary, while transitioning to a new team or organizational design.

Provident Fund

Provident fund is a fund that provides benefits to the employees of a company (who are members of the fund), upon termination of their employment. Both the employees and the employer are required to make contributions to the fund in accordance with the predetermined rates. To become eligible for membership of the fund, a worker must have completed a number of year’s continuous service in the organization. The employees have to contribute at a certain rate of the basic wage, dearness allowance and retaining allowances. Similarly, employers also contribute at the same rate.

Gratuity

Gratuity is a lump sum payment made to the employees based on the duration of their total service. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination, etc) by taking the last drawn salary as the basis for the calculation. However, in case of death of the employee, his/her family members are given the amount. It is a form of gratitude provided to the employees in monetary terms for the services rendered by them to the organization and is an important form of social security benefit. Gratuity payment liability of the employer tends to increase with an increase in the salary and tenure of employment. The employer may pay the gratuity proceeds from his current revenue. Some organizations have also set up a gratuity fund as a part of their financial planning.

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”.

The need for training and development

Employee training and development are part of good management practices and good risk management strategies. The following issues and changes in an organization many indicate the need for employee training and development:

Employee’s request
Employee survey results
Evaluation deficiencies
Individual development plan
Law and regulation changes
Need to develop new leaders
New employee
New equipment
New manager
New program
New technology
Reassignment
Safety issues

Benefits of employee training and development

Development opportunities help to ensure that organization is a desirable place to work. Employee training and development programs also have a positive impact on performance. Job quality affects worker morale, job satisfaction, and the scope workers have to apply their skills and abilities to the job – all key contributors to productivity performance.

Employee training and development programs also help with employee retention. Studies of what factors influence employee retention suggest that working with good colleagues, challenging job assignments and opportunities for career growth and development are among the top reasons for staying with a company.

Employee training and development programs prepare staff to successfully carry out the mission of the organization.

Advantages of employee training and development include:

Employees are better prepared to help the organization achieve its goals
Staff are more productive
Employees are more motivated
Well trained staff require less supervision
A pool of employees are ready to replace others who leave
Staff that engage in continuous learning are better able to meet the challenges of changes in the organization
Staff are able to manage/work on new programs
Organization will be more successful at attracting and retaining employees

Process

Create a learning environment in the organization

A positive environment for learning is always critical for success, whether it is the environment of a classroom or the environment of organization. The learning environment provided by an organization is a function of the organizational culture. Organizational culture means the values, attitudes and beliefs reflected in the mission, goals, and practices of the organization. The Board of Directors and senior staff of the organization set the tone for the organization’s culture.

Here are some ways organizations that value learning provide a supportive learning environment:

Recognize that learning is part of everything the organization does
Opportunities to learn happen all the time. Organizational cultures that support learning recognize learning as an ongoing process, not an event. A new piece of legislation may be used as a learning tool for all staff. A proposed special event may become a learning opportunity for an employee who has expressed an interest in event management.
Support the expectation of learning with resources for learning
An organization shows that it values learning by including employee training and development in the annual budgeting process. Items included in the annual budget reflect the priorities of the organization.

Encourage learning at all levels

Opportunities to learn are made available for everyone in the organization from the Board of Directors to the most junior staff.

Recognize that mistakes are learning opportunities

One way an organization shows that it values learning is in its approach to mistakes. In today’s workplace environment, leaders ought to develop a culture that removes the punishing effects of failure to help people to take risks, be creative, and to grow. It is important to encourage people to learn from mistakes rather than being afraid to admit their mistakes for fear of disciplinary action.

Have a policy on employee training and development

A policy on employee training and development shows that the organization values learning. Professional development policies usually include guidance on:

How often employees are expected to take formal training – once a year, once every two year, etc.
The types of development programs that are acceptable
When and how employees will be reimbursed for off-the-job programs

SWOT Analysis

In this part of my project I am going to discuss the SWOT- Strength, Weakness, Opportunities and Threats of EXIM Bank that I have noticed during my internship period.

Strength Recruitment:

Their recruitment and selection policy is very strong. EXIM Bank recruits talented candidates from the market through proper testing- written and interview. The written part contains questionnaires that are of IBA standard which is a renowned education institution of our country.

Work environment: During my stay I found the work environment very satisfactory. Everyone is amiable and helpful and cooperative. There is no internal conflict or politics at play which is essential for conducting a productive working environment.

Transparency: For clear communication to the employees of the HR Practice in EXIM Bank, they have a service rule book which they give to every employee. The guide articulates important and covers all HR Practice followed by the organization. This is very helpful both for the employees and the employer as it removes chances of misinterpretation, bias etc.

Training- EXIM Bank emphasizes on training and development of employees to continuously upgrade its employee. This is good for both the organization as well as the employee since organization gets more skilled employees and employees can develop and better themselves.

Weakness

Small workforce- The HR division is a very small sector of the organization. Considering the large number of employees the organization has

Human Resource Planning- There is not much Human Resource Planning at the Organization except for an annual need assessment for required workforces.

Lack of Job Analysis – These are important parts of HR practice in an organization but not implanted in EXIM Bank which means they are less knowledgeable about current market trends and that could lead to loss of potential talents from their pool.

Opportunities Recruitment-

Most recruitment in EXIM Bank is through internal recruitment, they can diversify the pool of entry level employees through campus recruitment.

Outsourcing HR Planning and Policy- The HR Division can outsource from organizations specializing in HR outsourcing in order to have better strategic HR Planning.

Salary Survey- Salary surveys can be done externally to ensure that the remuneration they are providing is in per with their competitors.

Threats Competition-

The banking sector is highly competitive with so many banks, local and foreign operating within the country, EXIM Bank needs to periodically review their HR plan and policies so that they can recruit best talent. And at the same time prevent existing workers from leaving.

Political Instability- Since many years the political situation in country is not stable which in some way affects any business organization including HR department, so they need to keep that in mind and plan accordingly.

Recommendations

Expansion of HR Department- The Human Resource Department is pretty small with only 11 employees, considering the total number of employees which is comparatively more, they can expand the human resource division to manage things more smoothly.
Strategic HR Planning- EXIM Bank has lot of provision for improvement in this regard. They can carry out demand forecasting, to prevent shortage of employee or overstaffing.
Salary Survey- This can be done per year or at least every two year two ensure their compensation offering match current market trends. This is important in recruiting the right kind of people for the right job.
Employee Climate Survey- These surveys help in understanding employee’s perceptions and perspectives of the organization. Employee climate survey helps in improving working conditions of the organization by identifying existing issues and also gives solutions for known problems. It takes into account employee’s satisfaction and dissatisfaction and areas that require improvement. This increases employee morale as they feel their opinions matter. EXIM Bank can do this once a year to improve working culture and employee motivation.
Increase Diversity- The Human Resource Division has only one female currently. They can recruit more workers to ensure diversity in the organization.
Equal Employment Opportunity- EXIM Bank hires only Bangladeshi nationalities; they can recruit people from other nationalities to make the organization multicultural, this will increase diversity and add to untapped talent.