Performance Appraisal System of Bank Asia

Performance Appraisal System of Bank Asia

Bank Asia Limited is a scheduled commercial bank in the private sector established under the Banking Company Act 1991 and incorporated in Bangladesh as a public limited company under the Companies Act 1994, on September 28, 1999. Bank Asia Limited is a new entrant in the private banking scenario of Bangladesh. The bank started its journey on November 27, 1999 when the Honorable Prime Minister, Sheikh Hasina inaugurated Bank Asia’s corporate office at Rangs Bhaban, on the Old Airport road. Bank Asia has been launched by a group of successful entrepreneurs with recognized standing in the society. The initial paid up capital of the Bank is over Tk. 218.00 million. The management of the Bank consists of a team led by senior bankers with vast experience in national and international markets.

Bank Asia Limited conducts all types of commercial banking activities. The core business of the bank comprises of import, export, working capital finance and corporate finance. The bank is also rendering personal credit, services related to local and foreign remittances. The “Personal Credit” scheme of the bank, which is designed to help the fixed income group in raising standard of living is competitively priced and has been widely appreciated by the customers. The bank’s strategy is to gradually cover the total arena of banking.

Within a short span of time, Bank Asia Limited has established itself as one of the fast growing local private banks. It has at present a network of 44 branches serving many of the leading corporate houses, small and medium enterprises and individuals. In 2001, the bank set a milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka, first in the banking history of Bangladesh. Again in 2002, the bank acquired the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB) of Pakistan. In the year of 2003, the bank went public by offering shares to the general investor and in 2004 the bank listed itself with the stock exchange.

Objectives of the Report

Broad Objective

To learn about the performance appraisal system of Bank Asia.

 Specific Objectives

• To know the inner side of the Bank Asia banking culture.
• Provide information on Bank Asia Limited.
• To find out the corporate social responsibility of Bank Asia.
• To describe the HR function, structure and its procedures, rules and regulation.
• To analyze the performance of Bank Asia.
• To understand the internal and external environment of the organization.
• To provide recommendations to Bank Asia.

Methodology

Data sources: The primary data has been collected from face to face interview, and the secondary data has been collected from their annual reports and from web sites. The main source of data was secondary though primary data sources were also utilized.

Primary Sources:

• Personal observation of the manufacturing process.
• Informal interview with the machine workers.

Secondary sources:

• Various records of the bank.
• Different Types of brochures.
• Website of Bank Asia Limited.
• Different newsletters of Bank Asia.
• Personal files of the employee.s.

Literature Review

Performance Appraisal 

Performance Appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

A critical factor related to an organization’s long-term success is its ability to measure how well employees perform and then use that information to ensure that performance meets present standards and improves over time. This process is referred to as performance appraisal or performance evaluation. It can also be defined as the process by which an employee’s contribution to the organization during a specified period of time is assessed. If used effectively, it can improve employee motivation and performance.

Once the employee has been selected, trained and motivated, he is then appraised for his performance. Performance Appraisal is the step where the Management finds out how effective it has been at hiring and placing employees. If any problems are identified, steps are taken to communicate with the employee and remedy them. Performance Appraisal is a process of evaluating an employee performance in terms of its requirements.

Performance Appraisal can also be defined as the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.

Performance appraisal is a formal system that evaluates the quality of a worker’s performance.

An appraisal should not be viewed as an end in itself, but rather as an important process within a broader performance management system that links:

• Organizational objectives
• Day-to-day performance
• Professional development
• Rewards and incentives.

History of Performance Appraisal

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor’s pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War – not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world’s second oldest profession!

Appraisal system has been defined by Dulewicz (1989) as a basic human tendency to make judgments about those one is working with as well as about oneself.” Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.

The eminent management expert, McGregor defined the performance appraisal system as “the formal performance appraisal plans are designed primarily to meet the organizational needs and to provide systematic judgments.

Appraisal also tells the employees as to how they are doing and about the required changes in their behavior, attitudes, skills or job knowledge, in other words, making the employees aware as to where they stand in the eyes of superiors. These form the basis for the coaching and counseling of employees by their bosses.

” The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments’ made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee’s performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.

For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence.

As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

In modern times Performance appraisal may be defined as a structure  formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skill development .

In many organizations – but not all appraisal result are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions (Goel, 2008).

By the same token , appraisal result are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.)

Whether this is an appropriate use of performance appraisal the assignment and justification of reward and penalties is a very uncertain and contentious matter.

Importance and Purpose

Performance Appraisal has been considered as the most significant an indispensable tool for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increase. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. Accurate information plays a vital role in the organization as a whole. They help in finding out the weaknesses in the primary areas. Formal Performance Appraisal plans are designed to meet three needs, one of the organization and the other two of the individual namely:

• They provide systematic judgments to back up salary increases, transfers, Demotions or terminations.
• They are the means of telling a subordinate how he is doing and suggesting needed changes in his behavior, attitudes, skills or job knowledge. They let him know where he stands with the Boss.
• Superior uses them as a base for coaching and counseling the individual. On the basis of merit rating or appraisal procedures, the main objectives of Employee Appraisal are:
• To enable an organization to maintain an inventory of the number and quality of all managers and to identify and meet their training needs and aspirations.
• To determine increment rewards and to provide reliable index for promotions and transfers to positions of greater responsibility.
• To suggest ways of improving the employee s performance when he is not found to be up to the mark during the review period.
• To identify training and development needs and to evaluate effectiveness of training and development programmes.
• To plan career development, human resource planning based potentials.

Fundamentals of an Appraisal system

In order to be effective, an appraisal system needs to be perceived by workers as:

• Relevant and applicable to everyday work.
• Acceptable and fair.
• A mutual collaboration between management and workers.

A performance appraisal system that meets these criteria is likely to have the greatest impact on workers’ satisfaction with the appraisal process and their motivation to improve performance.

Appraisal Methods

 In a landmark study, Performance appraisal system has been classified by Locher & Teel (1977). He found that the three mast common performance

Appraisal methods in general use are:

1. Rating scales (56%)
2. Essay method (25%) and
3. Result – oriented or MBO methods (13%).

Certain technique in performance appraisal have been thoroughly investigated , and some have been found to yield better result than others.

Encourage Discussion

Research studies show that employees are likely to feel more satisfied with their appraisal result if they have the chance to talk freely and discuss their performance. It is also more likely that such employees will be matter able to meet future performance goals. Employees are also more likely to feel that the appraisal process is fair if they are given a chance to talk about their performance. This especially so when they are permitted to challenge and appeal against their evaluation.

Constructive Intention

It is very important that employees recognize that negative appraisal feedback is provided with a constructive intention to help them overcome present difficulties and to improve their future performance. Employees will be less anxious about criticism, and more likely to find it useful, when the believes that the appraiser’s intentions are helpful and constructive. In contrast , other studies ( Baron 1988) have reported that “destructive criticism “ – which is vague , ill –informed , unfair or harshly presented  – will lead to problems such as anger , resentment , tension and workplace conflict , as well as increased resistance to improvement , denial of problems, and poorer performance .

Set Performance Goals

It has been shown in numerous studies that goal-setting is an important element in employee motivation. Goals can stimulate employee effort, focus attention, increase persistence, and encourage employees to find new and better ways to work. The useful of goals as a stimulus to human motivation is one of the best supported theories in management (Locher , 1977) .It is also  quite clear that gols which are specific , difficult and accepted by employees will lead to higher level of performance than easy , vague goals (such as do your best ) or no goals at all (Harris 1914).

Appraiser Credibility

It is important that the appraiser (usually the employee’s supervisor) be well-informed and credible. Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable about the employee’s job and performance (Teel , 1977) . When these conditions exist, employees are more likely to view the appraisal process as accurate and fair. They also express more acceptances of the appraiser’s feedback and a greater willingness to change.

Performance Appraisal Techniques/Methods

There are many types of performance appraisal methods. Those are divided in two parts

• Traditional Methods
• Modern Methods

Rating Scales

The rating scale method offers a high degree of structure for appraisals. Each employee trait or characteristic is rated on a bipolar scale that usually has several points ranging from “poor” to “excellent” (or some similar arrangement). The traits assessed on these scales include employee attributes such as cooperation, communications ability, initiative, punctuality and technical (work skills) competence. The nature and scope of the traits selected for inclusion is limited only by the imagination of the scale’s designer, or by the organization’s need to know. The one major provision in selecting traits that they should be in some way relevant to the appraisee’s job. The traits selected by some organizations have been unwise and have resulted in legal action on the ground of discrimination (Torre, 1996)

Advantages

The greatest advantage of rating scales is that they are structured and standardized. This allows ratings to be easily compared and contrasted – even for entire workforces.

Each employee is subjected to the same basic appraisal process and rating criteria, with the same range of responses. This encourages equality in treatment for all appraise and imposes standard measures of performance across all parts of the organization (David, 1993). Rating scale methods are easy to use and understand. The concept of the rating scale makes obvious sense; both appraiser and appraise have an intuitive appreciation for the simple and efficient logic of the bipolar scale.

This result is widespread acceptance and popularity for this approach.

Disadvantages

Trait Relevance

Are the selected rating-scale trait clearly relevant to the jobs of all appraises? It is inevitable that with a standardized and fixed system of appraisal that certain traits will have a greater relevance in some jobs than in others. For example, the trait “initiative” might not be very important in a job that is tightly defined and rigidly structured. In such cases, a low appraisal rating for initiative may not mean that an employee lacks initiative. Rather, it may reflect that fact that an employee has few opportunities to use and display that particular traits ( Mckellin , 1993) . This relevance of rating scales is therefore said to be context – sensitive. Job and workplace circumstances must be taken into account.

Systemic Disadvantage

Rating scales, and the traits they purport to measure, generally attempt to encapsulate all the relevant indicators of employee performance. There is an assumption that all the true and best indicators of performance are included, and all false and irrelevant indicators are excluded (Torre, 1996). This is an assumption very difficult to prove in practice. It is possible that an employee’s performance may depend on factors that have not been included in the selected traits. Such employees may end up with rating that do not truly or fairly reflect their effort or value to the organization. Employees in this class are systemically disadvantaged by the rating scale method.

Perceptual Errors

This includes various well-known problems of selective perception (such as the horns and halos effect) as well as problems of perceived meaning. Selective perception is the human tendency to make private and highly subjective assessments of what a person is “really like “ and then seek evidence to support that view (while ignoring or downplaying evidence that might contradict it). This is a common and normal psychological phenomenon (Torre, 1996). All human beings are affected by it. In other words, we see in others what we want to see in them. An example is the supervisor who believes that an employee is inherently good (halo effect) and so ignores evidence that might suggest otherwise.

Instead of correcting the slackening employee, the supervisor covers for them and may even offer excuses for their declining performance. On the other hand, a supervisor may have formed the impression that an employee is bad (horns effect).

 The supervisor becomes unreasonably harsh in their assessment of the employee, and always ready to criticize and undermine those (Sanches, 1996). The horns and halo effect is rarely seen in its extreme and obvious forms. But in its more subtle manifestation, it can be a significant threat to the effectiveness and credibility of performance appraisal.

Perceived Meaning

Problesms of perceived meaning occur when appraisers do not share the same opinion about the meaning of the selected traits and the language used on the rating scales. For example, to one appraiser, an employee may demonstrate the trait of initiative by reporting work problems to a supervisor. To another appraiser, this might suggest an excessive dependence on supervisory assistance – and thus a lack of initiative. As well, the language and terms used to construct a scale – as “Performance exceeds expectations” or Below average Skill” – may mean different things to different appraisers (De La Torre, 1996) .

Rating Errors

The problem here is not so much errors in perception as errors in appraiser judgment and motive. Unlike perceptual errors, these errors may be (at times deliberate. The most common rating error is central tendency. Busy appraisers, or those wary of confrontations and repercussions, may be tempted to dole out too many passive, middle-of-the-road ratings (e.g., “satisfactory” or “adequate”), regardless of the actual performance of a subordinate. Thus the spread of ratings tends to clump excessively around the middle of the scale (Sanches, 1996). This problem is worsened in organizations where the appraisers do not feel confident with the task of appraisal.

Essay Method

In the essay method approach, the appraiser prepares a written statement about the employee being appraised. The statement usually concentrates on describing specific strengths and weakness in job performance. It also suggests courses of action to remedy the identified problem areas (Harry, 2007).

The statement may be written and edited by the appraiser alone or it can be composed in collaboration with the appraisee.

Advantages

The essay method is far less structured and confining than the rating scale method. It permits the appraiser to examine almost any relevant issue or attribute of performance. This contrasts sharply with methods where the appraisal criteria are rigidly defined (Harry, 2007).

Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate. Thus the process is open-ended and very flexible.

The appraiser is not locked into an appraisal system the limits expression or assumes that employee traits can be nearly dissected and scaled.

Disadvantages

Essay methods are time –consuming and difficult to administer. Appraisers often find the essay technique more demanding then methods such as rating scales.

The techniques greatest advantage – freedom of expression – is also its greatest handicap. The varying writing skills of appraisers can upset and distort the whole process .The pricess is subjective and in consequence, it is difficult to compare and contrast the result of individuals or to draw any broad conclusion about organizational needs (Christopher, 2006).

Performance Appraisal System (PAS) of Bank Asia Limited

Performance appraisal system (PAS) is the tool for measuring the performance of an individual and identifies the gaps and plan future development in order to enable a better performance between the jobs and the incumbent.

It is an HR process for driving business outcomes. It is defining in advance what the employees must do as an individual to win in the market place and later on assessing the performance based on the extent to which the organization achieve result.

Performance appraisal system is quite structured that it can measure of assess both goal (What) and the management competencies (How).

Goals-Key Result Areas (KRA) is the specific major objectives to be set at the beginning of the year through consultation with the reporting manager or supervisor. These need to be aligned to the objectives of the function and consequently to overall objectives of the bank (BAL, 2010).

A management competency is a skill, ability or trait that predicts success to perform a job.

The Performance Appraisal needs to be implemented as per PAS format which will be circulated by HR at the beginning of the year. The BAL follows both rating and descriptive systems for the performance appraisal. Although, the appraisal system is non-participative, the employees are annually assessed by a joint consultation with their immediate supervisors and departmental heads. Rating is mainly done on the following factors-

• Knowledge of work
• Accuracy and Reliability
• Speed
• General Intelligence
• Sense of Responsibility and Duty
• Diligence
• Initiative and Self confidence
• Readiness to work for and with others.
• Indication key job responsibilities/ Targets/ Work plan of the employee for the year.
• Performance on the job.
• Knowledge level.
• Behavioral competence level.

The definition of rating in performance appraisal is given below for reference:

Performance Standard

• Excellent (4.5-5.0)
• Very Good (3.5-4.5)
• Good (2.5-3.5)
• Average (1.5-2.5)
• Below average(1.0-1.5)

Bank Asia consider the following term for Appraisal-

Excellent= 91-100, Very Good= 71-90, Good= 51-70, Average= 31-50 and Below Average= 0-30

Consider on the Job Performance and the results delivered by employee (Judge Quantity and Quality) – anyone of the following:

⇒ A Strongest all around performer, Exceptionally Exceeded targets/ given what plan for above expectation.

⇒ A Stronger all performer, Reasonably Exceeded or target/ given work plan above expectation.

⇒ A Strong performer Met targets/ given work plan satisfactorily within expectation.

⇒ A Reasonable performer, Closely Met target/ given work plan, but not fully satisfactory.

⇒ Performance standard is Well Below, targets/ given work plan, needs serious tanning and serious efforts to improve.

Those who are rated in Excellent, Very Good, Good, Average and Below Average are eligible for incentive bonus or promotion.

Performance Appraisal Policy

Performance appraisal process is conducted by the HR Division. So the policy is also made by the (Human Resources Division to conduct this process smoothly and clearly. There are many facilities and incentives are provided to the employees of the bank and these are considered as the appraisal policy.

Practices of Compensation & Employee Benefits in BAL

Employee compensation refers or all forms of pay or rewards going to employees and arising from their employment. Thus compensation means what employee receives in exchange for their work.

Benefits are indirect financial payments given to employees. They may include health and life insurance, vacation, pension, education plans, and discounts on company products, or instance.

Various Compensation Dimensions of Bank Asia Limited

• House Rent
• Leave with Pay (staff)
• Children’s education facility
• Home furnishing allowances
• House loan
• Sick leave
• Materiality leave
• Ordinary leave

Several Types of Leave in Bank Asia Limited

• Ordinary leave (with full payment)
• Leave on half pay
• Advance leave
• Leave without pay
• Special disability leave
• Study leave
• Quarantine leave
• Maternity leave
• Casual leave.

Pay scales of Bank Asia Limited

Bank Asia Limited has no pay scales for its own employees. It follows the pay structured of Bangladesh Government.

Compensation Principles of Bank Asia Limited

There is a Welfare Trust in Bank Asia Limited. The compensation is determined according to the nature of case. It is determined by the committee.

Welfare Section

Bank Asia Limited considers all types of welfare of the employee regarding are:

• Treatment if any personnel suffer.
• Scholarship of staff’s sons.
• Transportation facilities.
• Bonus at time of Eid/ Puja etc.
• Insurance facilities of BAL personnel.

The BAL provides handsome direct compensation as well as indirect to its staffs. The bank has a job evaluated salary structure, which is most competitive than other banks in the country. It also provides merit pay and inactive pays i.e. Festival Bonus, yearly incentive Bonus, etc. Under indirect compensation policy the bank also facilitates medical benefits, gratuity such as Casual leave, Earned leaves, Sick leaves, Maternity leave, extra ordinary leave, Study leave and pilgrimage leave. Although the bank provides different types of employee benefits, but they do not give group life insurance coverage which may bring extra job satisfaction. Bank Asia Limited also grants 42 days maternity leave for its women employees. So, the competent authority should extent their mercy up to four months and men are head of single parent households. So, if the bank introduces parental and Family leave benefits for its employee’s it will be really great example for other banks and organizations in the country.

Promotion

Promotion is defined as a movement to a position in which responsibilities and prestige are increased. This is basically done based on the extraordinary performances of the employees who deserve to promote his/her current rank in a better position in the organization. Promotion satisfies the needs of human beings in the organization. Since the promotion depends upon capabilities and good performance, people will try for that if the venues for promotion exit.

We also mean that refers to the filling of a vacancy at an upper level of the organization by the internal movement of a present employee from an immediate lower level, the new position having higher pay, status and job conditions as compared with the old. Very simply promotion is a higher position at a higher level from people within the organization itself.

Objectives of Promotion

Objectives of Promotion are given below:

• Following are the objectives of promotion
• Reward of good employee.
• Recognition of outstanding achievements.
• Meet the career objective of an employee.
• Attract and retain right talents in the organization.
• Improve morale, motivation and, job satisfaction of employees.
• Empowerment of employees through competence, interest and commitment.

General Promotional Policy

Promotion policy is the guidelines of promoting employees within the organization. Policy varies with organization. Since promotion is a sensitive issue to the employees, it is very essential, that promotion policies are clearly stated, widely circulated and fully explained to their employees.

Some criteria requiring policy of promotion are given below:

• Length of service
• Weight age on seniority
• Procedure for promotion.
• Responsibility allocation to department to initiate and handle cases of promotion.

Practices of Promotional Policy in BAL

There are three promotional lines in BAL and these areas:

1. Non Clerical:

Scopes of these lower grade employees are limited but they are allowed time scales without changing the designation. Examples are- Sweepers, Guards etc.

2. Clerical:

The clerical category includes Junior Clerks, Senior Clerks, Sub-Accounts and Junior Officer. A junior clerks can move up to junior officers, senior officers.

3. Officers and Managers:

For promotion at officer levels, a quota system operates 50% of the vacancies for Junior and senior officers are filled through internal promotions and the remaining 50% through fresh recruitment from outside.

Determination of Promotional Opportunities

Promotional opportunities in Bank Asia Limited are assessed on an annual basis through a committee headed by the General Manager (Administration). It considers these factors such as:

• Normal Retirement
• Dismissal
• Suspension
• Discharge

These all can create vacancies and provide promotional opportunities.

Promotion Criteria Followed

These criteria are depicted here

• Minimum service in the present post for about three years.
• Passing of Banking Diploma Examination.
• Merit to be measured through Annual Confidential Report (ACR).Which is ultimately part of performance appraisal policy.

Criteria for ACR evaluation

For Preparing Annual Confidential Reports (ACRs), two ACR forms are used:  

For The Staff People:

The ACR form used for them is very brief and contains these items-

• Intelligence and mental alertness.
• Initiative and drive.
• Quality and output of works.
• Perseverance & devotion to duty.
• Appearance & dress.
• Willingness to cooperate.
• Health & physical fitness reliability and dependability.
• Punctuality & observance of security measures.
• Integrity
• Forecast capacity
• Discipline
• Morality

Grievance Management Procedure

Grievance is the complaint that has been put in a written form and made formal. Employees may have several complaints which are a sign of their dissatisfaction in the organization.

Grievance Management Process of BAL

It includes following steps:

• The individual submits of grievance verbally within five working days of occurrence to the supervisor who will try to solve the problem by consulting with his immediate supervisor.
• If the grievance is not settled then the employee may refer to the concern departmental head by giving a written application, with a copy of personnel department within 3 working days after received the supervisor’s verbal reply.
• The concern departmental head will hear the matter and will give his written reply to the aggrieved person within 5 working days.
• If the aggrieved person is not satisfied then the individual may apply to the Personnel Manager with a written application and with a copy of the concerned departmental head, within 1 week after receiving the departmental head’s reply.
• The Personnel Manager will hear the aggrieved person after the close of the decision.

So finally, The HRM System is a foundational application suite used by BAL like other organizations. The need for an HRM System is driven by several fundamental and potentially mission-critical business needs including: Managing personnel costs, Operating efficient business processes, Complying with regulations and managing legal exposures & increasing the value of human capital.

Objectives & Modus Operandi

The Performance Appraisal System (PAS) of Bank Asia is limited to measuring performance of employees, the purpose of the PAS is to improve employee performance in terms of “skills & knowledge’ as well as “leadership”.

The PAS focuses first on the “job performance” and considers the following parameters for a given period of time:

• What assignment was given by the work plan or in terms of targets?
• What was expected of?
• What has been delivered?
• How has been delivered?
• What has gone well?
• What has gone wrong?
• What could have been done differently to do better?

1^st, Getting these answers it will help in finding newer ways and means to improve performance learning from past successes and failures.

2^nd, it examines the professional skills & knowledge which are required in a job, the actual skill & knowledge level, a job holder possesses and thus helps in finding skill /knowledge gaps to be addressed for personal development

3^rd, it reviews the leadership behaviors i.e. competencies or abilities which are required in a job in comparison with real demonstration of behavioral competencies by the job holder and thus helps finding competency gaps to be addressed for personal development.

Therefore, the appraisal system of Bank Asia takes care of the following:

• Business performance (on the job accomplishment in terms of a work plan/targets/expectation)
• Skill & knowledge
• Behavioral competencies (leadership)
• Individual development plan

Bank Asia conducts its performance appraisal annually and in the process review progress quarterly for correction of directions enabling an individual to achieve his / her objectives. On the whole, the objective is to shape outstanding performance in a competitive way to ensure sustainable profitable growth in business.

Findings of analysis

After my own work experiences as well as discussion with honorable officers I have found in my study that there are several important problems that need to focus on for better performance appraisal procedures of BAL.The findings of my study are-

• Employee’s perception about PAS is very positive in BAL.
• The appraisal system facilitates growth & learning of employees and it moderately distinguishes performers and non performers in the organization.
• Existing PAS helps the management to identify potentiality of the employees.
• The PAS criteria are well communicated with all stakeholders related with PAS.
• Lack of knowledge about PAS for lower level employees
• No training facilities for ground level employees.
• It’s difficult to understand PAS for some of the employees.
• Current PAS practicing in BAL is complex and complicated towards many employees.
• Modification and clarification of different areas like monetary incentives, standard of evaluation and a clear appraising procedure is required.
• Miss match between employee’s expectation and current PAS practicing in BAL.
• Confusing and conflicting aspect of PAS creating miscommunication among management level to various levels of employees.
• Majority of the employees are not significantly satisfying about the current PAS.

Recommendations

As I have gone through all the departments under Human Resources Management. I have come up with some points, which can improve the efficiency as well as quality of the work. Though the bank was found as a productive concern, the study reveals that the bank could do much more if it was handled more efficiently. Also sonic problems of the Bank were given above. However, some steps may be taken to improve the efficiency and to increase the performance of the Bank in future which are given below-

• Appraising method should be unbiased and real performer should be appreciated based on his or her performance evaluation.
• New performance appraisal such as 360 degree should be introduced.
• Training facilities should be given to all level of employees
• Evaluation result should be disclosed to all the employees.
• Promotion should be based on performance rather than seniority or other.
• The aims and Objectives of performance appraisal need to be well communicated from top level to bottom level management.
• An unbiased and clear appraising method should practice so that only actual performer could be rewarded.
• Monetary incentive should be improve.
• HRD need to be more modernized and resourceful for conducting performance appraisal.
• A well and friendly corporate atmosphere should create among HRD and various department of the organization so that confliction and complexity about appraising procedure could be reduced and minimized.

Conclusion

Banking industry is inevitable for a country. Bank mobilizes savings helps the operation of trade and business, participates in the economic development activities and so on. Banking evolution happens to keep pace with the advanced stage in social development.

The bank should care again in manpower and its capital to use these in such a way that will produce a maximum output in future and motivated the client and investor for deposit and investment. The bank should take care to reduce unnecessary expenses. If the bank keeps its expenses at satisfactory level it produces a maximum output in future.

There are many benefits to implementing a regular and systematic performance appraisal system within an organization. In order to gain the most benefit t from performance appraisals it is recommended that a system is developed in consultation with workers and managers, and clear links are established between appraisals and valued rewards and outcomes. If resources permit, information on work performance should be obtained from multiple sources. Performance appraisals can be a powerful tool for increasing motivation and improving work practice if conducted in a constructive, open and supportive manner.

Finally if the Bank Asia Limited control their expense by HRM and take proper steps to overcome their little limitations, they will become a first rows bank of Bangladesh.