HUMAN RESOURCE MANAGEMENT PRACTICE IN

CITY BANK

Term Paper

on

HUMAN RESOURCE MANAGEMENT PRACTICE IN CITY BANK

Prepared for:

Associate Prof: Dr. Sumayya Begum

Course Instructor: Human Resource Management

Prepared by:

Md. NorulBasor

ID No. : M1516031

Batch : MBA-16 (A)

Session : 2014-15

Faculty of Business Studies

Bangladesh University of Professionals, Dhaka

September 15, 2015

September 15, 2015

Dr. Sumayya Begum

Associate professor (FBS)

Course Instructor: Human Resource Management

Bangladesh University of Professionals

Dear Mam:

SUBMISSION OF TERM PAPER

I have the pleasure to submit the term paper on “Human Resource Management Practice in City Bank”for your kind perusal and evaluation.

It is a matter of immense pleasure for me to have the opportunity to analyze the “Human Resource Management Practice in City Bank” one of the dynamic process of HRM in everysector of education. I am grateful to you for allowing me to carry out such term paper. I am also grateful to you for necessary co-operation and assistance from you during my term paper. I believe that the knowledge and experiences acquired while conducting this study will help me in many ways and the readers as well in future.

I tried my best to accommodate my ideas and findings as specifically as you asked about within the time frame and resources available. I hope that the idea presented in the assignment will provide a clear picture about Human Resource Management Practice in City Bank.

I would like to mention that there might be some errors in the assignment that is totally unintentional and due to professional hazard. I believe that you will consider such short comings while you evaluate the term paper.

Sincerely Yours,

Md. NorulBasor

MBA -16(A).

Executive Summary

In the present situation of the banking sector is walking with competitive advantage, inspired way, just like a panorama of a race to reach the leading position of the banking. Most of the bank now concentrates of marketing feasibility to earn and generate opportunity to hold existing to keep loyal customers, in the business humanity believed that loyal customers increase the forthcoming gainful revenue. In this report I am trying to focus about the wide consumer expectation, perception and its implementation possibility for the CBL to overcome the all kinds of customer objections for the service failure and weakness.

First part of this report is based on the introduction which includes topics like origin, objective, background, methodology, limitation of the study. Basically it defines the way and background of the study to prepare the report. In the next part of the report highlights a brief background of City Bank Limited, with their mission, vision, objective, business strategies. And also providing a brief summary of all retail product and services offered by the City Bank.

Next part is basically about the tasks done by me during the internship. This report is also consists of highlighting the general banking procedure by describing the entire departments associated with general banking. This report is also consists of all the findings of the report provided with some recommendation in order to improve customer service quality as well as customer satisfaction level based on the observation and work experience during internship period.

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ACRONYMS

CBL : City Bank Limited BB : Bangladesh Bank SME : Sales and Marketing Executive ATM : Automated Teller Machine HR : Human Resource HRM : Human Resource Management

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Table of Contents

Description Page no.

Prefatory part

Title Fly i

Title Page ii

Letter of Transmittal iii

Executive Summary iv

Acronyms v

Body part

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Introduction 1

1.2 Objective of the study 1

1.3 Background of the study 2

1.4 Significance of the study 2

1.5 Scope of the study 2

CHAPTER TWO

LITERATURE REVIEW

2. LITERATURE REVIEW 3

2.1 Human Resource Management 3

2.2 HR In A Contemporary Organization 4

2.2.1 Planning 4

2.2.2 Recruitment and selection 5

2.2.3 Training 5

2.2.4 Performance Appraisal 6

2.2.5 Benefits and rewards 6

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2.2.6 Compensation 7

2.2.7 Career development (CD) 7

2.3 The importance of HR in organization 8

2.3.1 Advantages and disadvantages of HR 9

CHAPTER THREE

MATERIALS AND METHODS

3.1 Location 10

3.2 Collection of Literature and Information 11

3.2.1 Methodology 11

3.2.2 Sources of Data 11

3.2.3 Statistical Analysis 11

CHAPTER FOUR

INTRODUCTION OF THE COMPANY

4. Company Profile 12

4.1 Vision 13

4.2 Mission 13

4.3 Values 13

CHAPTER FIVE

PERFORMANCE APPRAISAL POCESS OF

CIY BANK

5.1 Performance appraisal 14

5.2 Purposes of Performance appraisal in The

City Bank Limited 14

5.3 HR Department of City Bank Limited 14

5.4 The Structure of HR Department in CBL 15

5.5 Human Resource Management System 16

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165.6 Performance Appraisal Techniques/Methods

5.6.1 Rating Scales 17

5.6.1.1Advantages 17

5.6.1.2 Disadvantages 17

5.6.2 Essay Method 19

5.6.2.1 Advantages 19

5.6.2.2 Disadvantages 20

5.6.3 Results Method Management by

Objectives (MBO) 20

5.6.3.1 Core Concepts 20

5.6.3.2 Managerial Focus 20

5.6.3.3 Main Principle 21

5.6.3.4 Advantages

5.6.3.5 Disadvantages

5.6.3 Performance Appraisal System (PAS) of

City Bank Limited 22

5.6.4 Performance Grade in CBL 23

5.6.5 Components of Compensation System 24

5. 6.6 Job Evaluation 24

5.6.7 Objectives of Job Evaluation: 25

5.6.8 Limitations of Performance Appraisal: 25-26

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CHAPTER SIX

FINDINGS AND RECOMMENDATIONS

6. FINDINGS 27

6.1 Recommendations 27

6.3 Conclusion 28-29

Appended Part

References vi

Questionnaire 31-32

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References:

The City Bank [online] www.thecitybank.com

The City Bank Ltd. Annual Report 20102012 [online] Available at: https://www.thecitybank.com.bd/annual_reports.php

The City Bank Ltd.: https://www.thecitybank.com.bd/news_details_2013.php?code=14 Bank

Account. (n.d.). Retrieved from immihelp:

http://www.immihelp.com/newcomer/bankaccount.html Cheque. (n.d.). Retrieved from.

Griffin, R. W. (2010) “Management (10th Edition)” SouthWestern Publishing Co.

Human Resource Management (HRM). [Online]

Availablehttp://www.managementstudyguide.com/humanresourcemanagement.htm at:<>

[Accessed 12 December 2012]

City Batra: Inhouse Newsletter for City Bank Staff ( 3rd issue) [online] Available at:<

https://www.thecitybank.com.bd/city_barta/City%20Barta.pdf AccessedDecember 2010]. Wiley,

John & Sons Publishing Co.

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CHAPTER ONE

GENERAL INTRODUCTION

1.1 Introduction

With the increase in the size and complexity of business organization, man has become the most important factor in business. Business needs people as owners, employees, and consumers. Organizations need people to make them operated. An organization is nothing without human resource. Of all the resources, the most important one is human resource, because human beings play a dual role- as resource, as well as a motive force for all other resources by manipulating them, by the way of developing, utilizing, commanding and controlling. So human resource management (HRM) functions include recruitment, selection, training and development,

performance appraisal, compensation and industrial relation in an organization.

Human resources are people, and human resource management (HRM) is the process an organization undergoes to manage people in order to achieve its goals.

Human Resource management (HRM) is the process of acquiring, training, appraising and compensating employees and of attending to their labor relation, health and safety concerns.

Human Resource Management includes conducting job analyses, planning personnel needs, recruiting the right people for the job, orienting and training, managing wages and salaries, providing benefits and incentives, evaluating performance, resolving disputes, and communicating with all employees at all levels. Examples of core qualities of HR management are extensive knowledge of the industry, leadership, and effective negotiation skills. Formerly called personnel management.

The world is tremendously competitive now. In every sphere of life and business, competition has become more and more furious. Every firm tries to obtain and retain efficient employees to meet the future challenges. In this rivalry, obtaining and retaining the best employees has become very important, as employees are that factors who make a firm alive and proceed to the path of profit.

1.2 Objective of the study

Broad objective:

The broad objective of the study is to prepare term paper on “Human Resource Management practice in The City Bank Limited.”

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Specific objective

To identify the Performance appraisal of CBL To identify the problem of human resource division of The City Bank Ltd

1.3 Background of the study

This term paper does explain the nature and objective of the Human Resource Management practice in City Bank.As a fully commercial bank, The City Bank Limited is being managed by a highly professional and dedicated team with long experience in banking. Human Resource Division of the City Bank Ltd. focuses on the recruitment of best employees to understanding and anticipating customer needs.

However, since the information of Human Resource Division are confidential and sensitive in nature, so that I tried to construct this term paper with the help of available information.

1.4 Significance of the study

Knowledge and learning become perfect when it is associated with theory and practice. Theoretical knowledge gets its perfection with practical application. As our educational system predominantly text based, inclusion of practical orientation program, as an academic component is as exception to the norm.

1.5 Scope of the study

As I am a MBA student, my scope was very much limited and restricted. I had maintained some official formality for the collection of data of my term paper. This term paper mainly encompassesthe Human Resource Practices of the City Bank Limited.

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CHAPTER TWO

LITERATURE REVIEW

2. LITERATURE REVIEW

2.1Human Resource Management

In a rapid competitive business environment, the procedures of outlining the role, function and process of Human Resource Management (HRM) within a dynamic and uncertain environment are ongoing for many decades. In the early 1980s numerous books and articles were published by American Business Schools professors to support the widely recognition of HRM concept, and the environmental volatility in today’s contemporary business that specifically identify conflict and heterogeneity (Soderlund and Bredin, 2005). Due to its diverse origins and many influences, HRM covers essential aspects of central concern in organizations such as individual, practice, educational theory, social and organizational psychology, sociology, industrial relations, and organizational theory (Soderlund and Bredin, 2005)..

To date there is no widely acceptable definition for HRM and what it entirely involves in our daily business world (Brewster and Larsen, 2000). Fewer satisfactory definitions have been propounded by different writer such as (Soderlund and Bredin, 2005), whom perceived HRM as 1) an ‘executive personnel responsibility’, that mainly concern with management activities; 2) classified HRM as management philosophy that concerns with people treatment and, finally 3) discerned HRM as interaction management between the firm and its people.

Due the conflicting theoretical conception and hypothetical disagreement about the general acceptance of the definition, Price (2007) definition would be used to in this literature because it better explained and cover huge areas of the study. According to Price (2007):

“A philosophy of people management based on the belief that human resources are uniquely important to sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Human resource management is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies”.

The dynamic and uncertainty in HR contemporary organizations are tremendously moving towards a radical dimension (Analoui, 2007). Recent debate by many researchers have laid more

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emphasis about matching and incorporating the HR-department with other strategic functioning departments within organization (Soderlund and Bredin, (2005); Analoui, (2007); Price, (2007).

2.2 HR IN A CONTEMPORARY ORGANISATION

HR is essentially crucial in today’s contemporary organizations because it induce high-performance management through the use of employees; by enhancing their levels of customer’s service, productivity, growth, profits and quality control (Armstrong, 2000). Lado and Wilson (1994, p 701) outlined a separate interconnected activities, roles, processes and other aspects that are aimed to attracting, maintaining, and developing the firm HR activities in contemporary organizations, such as: 1) planning; 2) recruitment and selection 3) training; 4) performance management; 5) benefits and rewards; 6) compensation; 7) and 8) career development (Banhegyi et al., (2008) and (Robbins & Coulter, (2002).

2.2.1 Planning

Planning in Human Resource has been discussed in different HRM contexts for many years (Wren, 1994). HR planning was initially an important aspect of job analyses and was often used as bases for determining strengths and weaknesses among the employees and to develop the skills and competences they needed (Gallagher, 2000). As individual career plans started to gain more popularity, companies gradually started to pay more attention to the certain skills and competences among individual employees as a way of aligning and dealing with the companies’ succession planning (Kuratko and Morris (2002).

As this aspect been scrutinized rigorously by many researchers, HR planning is still a complicating and complex issue of debate within the HR practices (Schuler, 1986). In 1978, McBeath addressed his view of HR planning by highlighting a set of issues that he regarded as being important with respect to the HR planning. These were;

An estimation of how many people the organization needed for the future A determination of what ability, skills, and knowledge requires to compete An evaluation of employees ability, skills and existing knowledge A determination of how the company could fill the identified competence gaps

Storey (1995) argues that HR planning today is a very important task of every contemporary organization’s HR department. According to him, HR planning mainly involves the identification of skills and competence within the organization, the filling of identified competence gaps, and the facilitation of movements of employees within the organization. An essential part of the HR planning is the succession planning which aims to ensure the supply of

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individuals and filling of gaps on senior key positions when they become vacant and replenish competences to areas where they are most valued (Wolfe, 1996).

2.2.2 Recruitment and selection

In organization the system that responsible for placing diversifies talents throughout is refers to as recruitment and selection processes. The process of recruitment and selection is an ethical approach by a firm to seek and attract the most competent and suitable applicant for a vacant position (Analoui, 2007). Price (2007) inferred that recruitment strategies can be divided in three significant approaches: suitability – the most qualified applicant for the position, malleability – moulded within the cultural norms, and flexibility – the most reliable and versatility employee. These factors are quite complicating and can be easily mistaken during the process of hiring employees. Suitability is a critical aspect hence it mainly concerned with the process of hiring the most suitable applicant for the position.

The process of selecting and retaining potential employees is the greatest organizational competitive battle in modern days (Pfeffer, 1994). Having the greatest talent simply implies that the firm will be able to compete aggressively in the market. This phenomenon are quit prevalent in our daily business life and has also pushes organizations to gain a niche by employing the most renowned managers to lead the thriving future.

2.2.3 Training

In today’s contemporary organization, employees ‘skills and knowledge can make a positive impact on the firm‘s productivity (Guzzo, Jette&Katzell, 1985). Organizations have to counter some difficulties while training a single or more employees (Ostroff& Kozlowski, 1992). Previous literatures argue the affordability of some organizations that deprive themselves for a single individual employee particularly when human resources are limited: this can hinder the productivity on the short term and destabilize the organization (Bishop, 2003). He continues to stress that such perception about training implies that organization should embark on a cost reduction strategies and focuses on in-house or on-job-training (OJT).

Formal training is just one of the possibilities for organizations to enhance the personnel performance level, as important roles are covered also by organizational socialization (Chao, 1997) and multitasking (May, 1997). It was suggested in the early 1990s that organizationalsocialization is a fine process for newcomers to source out information’s about the organization, learn about the necessary tasks and how to perform their responsibility; clarifying their roles and relate with others inside the organization (Ostroff& Kozlowski, 1992). This philosophy was also supported by Rollag&Cardon (2003) as they indicated that the process of

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socialization within a firm enhance newcomer to incorporate and learn in a well conducive atmosphere.

2.2.4 Performance Appraisal

The concept of measuring performance or managing performance within organizations is to strategize how firms can get the utmost benefits from their employees (Dransfield, 2000). The approach to measuring performance can be classified as a three-step approach that composed by objectives, appraisal and feedback. The first step is the setting of performance objectives that are quantifiable, easy to measure and simple to communicate throughout the organization (Dransfield, 2000). After that, the process of performance appraisal should take place (Bredin, 2008).

The management of performance includes design of work systems, facilitation of knowledge utilization, sharing and creation, and appraisal and reward systems (Cardon& Stevens, 2004). However, this phenomenon has been supported by different researchers claiming that performance management/appraisal is an outstanding process to determine and supervise employees output within the firm, so as it would be less complicating to assess and achieve maximum performance (Zhu & Dowling, 1997).

It is an excruciating process to implement and evaluate a systemic approach that can accurately pinpoint employee who is responsible for results within an organization (McKenna & Beech, 2008). However, outcomes of individual behaviors such as job satisfaction, employee turnover, absenteeism (Dyer and Reeves, 1995); motivation and commitment (Seibert, Silver, & Randolph, 2004), are proximal hence human resource processes are interconnected. In as much that the human resource practices are intended to achieve result in this area; there effect can also have a tremendous influence on the aforementioned outcomes (Bloom, 1999).

2.2.5 Benefits and rewards

Eliciting high contributions within an organizational environment is highly essential for the firm as well as the employees (Appleby and Mavin, 2000). For instance, expectancy theories have explicated aspects of anticipated rewards in line with employee’s motivations. This indicated that every employee will have to face with a logical decision in accordance to the present economical circumstance (Tannenbaum and Dupuree-Bruno, 1994). As a result to that employee considerable effort will manifests into an intended realizations and fulfillment of a specific desire outcome. Such manifestation enhances the explanation of the crucial aspect of organizational reward system and how it can be sustain and elicit the firm human capital investment Tannenbaum and Dupuree-Bruno (1994).

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The conceptions of both internal and external rewards are highly valued by organizations and its employees. Not only the obvious fact that employees yearns more about promotional opportunities, higher pay or better benefits, but also their desires and anguish spins from autonomy, personal growth and valued responsibility. Different authors have suggested the positive relationship, size and the implementation of innovative ideas in human resource practice as a result to economic of scale (Baldridge and Brunham, (1975) and Moch and Morse, (1977). This conception has locus the local firms at greater disadvantage in-terms of retaining or recruiting top-notch talent (Tannenbaum and Dupuree-Bruno, 1994).

2.2.6 Compensation

According to Patel &Cardon (2010) compensation is vital for contemporary organization as it contributes to attract and retain high skilled workers with superior salaries, and it encourages a desired stakeholder behavior regarding recognition and legitimacy. Minbaeva et al. (2003) inferred that compensation would enhance motivation among personnel too.

Even though non-financial compensation can really work as a positive stimulus for the workers, providing monetary benefits is necessary to increase the productivity of the employees on the individual or group level (Gomez-Meja, 1992). Balkin and Swift (2006) suggest a more flexible approach toward the payment issue. They proposed to relate it to the life stage of the organization with a higher rate of non-monetary benefits during the first years of activity, and a re-equilibration whenever the company enters the mature stage. Non-monetary paybacks are represented by stock options, stocks or other form of equity sharing that enhance the participation and the motivation of employees, while spreading the risks over a larger number of people (Graham et al., 2002).

The aforementioned ownership sharing represents also a long-term planning for compensation, as Graham et Al. (2002) stated, but also short-term rewards exist. These are represented by profit sharing policies aiming to encourage the employees toward group work, or to control the organizational outcomes (Heneman&Tansky, 2002).

2.2.7 Career development (CD)

Many practitioners and scholars within human resource development (HRD) field have claimed that the utmost crucial aspect of the practices is career development (McLagan, 1989; Weinberger, 1998; Swanson & Holton, 2001). However, this area of studies has been given little attention (Upton, Egan &Lynham, 2003).With the intense competition in the 21 century, many organizations have realized that in order for them to stay competition they have to improve their employees and enhance their career

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development (Boudreaux, 2001); rather than individual career development (Swanson & Holton, Upton, Egan &Lynham, 2003). Therefore, many organizations are now taking a proactive measures towards equipping their staffs and educationally (Leana, 2002) or create a climate that supports their staffs at all levels of the organization to be more resultant and productive (Sullivan, 1999); which Boudreaux, (2001); Brown, (1997) referred to as ‘‘shared responsibility’’. However, learning within an organization is quite critical and expensive; (McDonald, Hite &Gilbreath, 2002). The most common learning methods within organizations are informal (i.e. on-the-job coaching, sessions, lesson learned, development assignment) Power, Hubschman, & Doran, (2001) and formal learning (i.e. as training/workshop and other forms of professional training conducted by professional bodies internally or externally (McDonald, Hite &Gilbreath, 2002).

2.3 The importance of HR in organization

The sole aim of HRM is to guarantee that the firm human capitals are being used in the fullest capability to produces the greatest organization results that meets with the firm needs Nadeem Moiden, (2003) and Gilley and Gilley, (2007). Therefore, the philosophy of empowering employee’s capabilities is coined to the conception that HR is extremely crucial for sustainable competitive advantage and organizational success (Koch &McGrath, 2003). HR in organization is also crucial because its assist managers and employees through a change process (Hendry, Jones, Arthur & Pettigrew, 1991).

Businesses can gain enormous competitive advantages when their employees are used effectively to drawing on their expertise and ingenuity to meet clearly defined objectives. When organization recruit the most effective, capable, committed and flexible people; and managed and reward them accordingly their performances, competencies and efficiency would help the firm productivity immensely (Price A., 2007). Managers that tactfully execute organizational goals depend on the HR practices to deliver excellences so that they can achieve the utmost business performance (Becker, B. and Gerhart, B., 1996).

However, the HRM field has been isolated and misunderstood by many researchers and practitioner, failing to realize that without employees there would be no functioning organizationArgote, McEvily and Reagans (2003). As employees remain the most expensive and reliable asset of the organization, the practices of HR will remain a vital area of discussion (Becker, B. and Gerhart, B., 1996).

2.3.1 Advantages and disadvantages of HR

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As many other departments within an organization encounter, challenges are inevitable and are present in our daily business lives. There are three main disadvantages, or some may refers to a challenges facing HR, namely:

1. Managers “need to support corporate productivity and performance improvement efforts” (Dessler, 2008, p 87).2. “Employees play an expanded role in employers’ performance improvement efforts” (Dessler, 2008, p 87). All the basics contents associated with high-performance organization, such as high-technology team-based production, are rather futile without high levels of employee competence and commitment.3. The challenge, derived from the first two, is that “employers see that their human resource units must be more involved in designing – not just executing – the company’s strategic plan” (Dessler, 2008, p 87).

CHAPTER THREE

MATERIALS AND METHODS

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This chapter of the term paper illustrated the materials and methods used in this piece of preparing term paper. However, description of the studiedorganization also described to introduce the HRM practice of that organization. Moreover, materials used to prepare this term paper and the methods used are described subsequently.

3.1 Location

The interviewed location is inGulshan area, Dhaka. It is located atCity Bank Center136,Gulshan Avenue, Gulshan-2, Dhaka-1212, Bangladesh.

Map 3.1: Location of the interviewed Area

3.2 Collection of Literature and Information

3.2.1Methodology

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The relevant information and literature were collected from different books, journals and published papers.These were collected from BUP library and the most recent information were collected from internet.

3.2.2Sources of Data

There are two types of data:

1. Primary Data2. Secondary Data

Primary Data

An interview with the Officers for a very short time.

Secondary Data

Most of the information was mainly taken from Intranet. CBL website and

3.2.3 Statistical Analysis

All the recorded data related to HRM practice in City Bank Ltd. were analyzed statistically by using statistical software.

CHAPTER FOUR

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INTRODUCTION OF THE COMPANY

4. Company Profile

City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top bank among the oldest five Commercial Banks in the country which started their operations in 1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13 local businessmen who braved the immense uncertainties and risks with courage and zeal that made the establishment & forward march of the bank possible. Those sponsor directors commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable Taka 2311.78 crore as capital & reserve.

City Bank is among the very few local banks which do not follow the traditional, decentralized, geographically managed, branch based business or profit model. Instead the bank manages its business and operation vertically from the head office through 5 distinct Units namelyBusiness UnitBranch BankingRisk UnitOperations UnitSupport

Under a real-time online banking platform, these 5 distinct Units are supported at the back by a robust service delivery or operations setup and also a smart IT Backbone. Such centralized business segment based business & operating model ensure specialized treatment and services to the bank's different customer segments.The bank currently has total 112 branches which includes 99 online branches, 1 full-fledged Islamic Banking branch, 1 SME service center and 11 SME/Agri branches spread across the length & breadth of the country. Besides these traditional delivery points, the bank is also very active in the alternative delivery area. It currently has 253 ATMs of its own; and ATM sharing arrangement with partner banks that has more than 1150 ATMs in place; SMS Banking; Interest Banking and so on. It already started its Customer Call Center operation.

4.1 VisionThe Financial Supermarket with a Winning Culture Offering Enjoyable Experiences

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4.2 Mission

Offer wide array of products and services that differentiate and excite all customer segments

Be the Employer of choice by offering an environment where people excel and leaders are created

Continuously challenge processes and platforms to enhance effectiveness and efficiencyPromote innovation and automation with a view to guaranteeing and enhancing excellence in service

Ensure respect for community, good governance and compliance in everything we do

4.3 Values

Result Driven Accountable & Transparent Courageous & Respectful Engaged & Inspired Focused on Customer Delight

CHAPTER FIVE

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PERFORMANCE APPRAISAL PROCESS OF

CIY BANK

5.1 Performance appraisal

According to Flippo, a prominent personality in the field of Human resources, "performance

appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the

matters pertaining to his present job and his potential for a better job."

5.2Purposes of Performance appraisal in The City Bank Limited

To review past performance

To assess training needs

To help develop individuals

To audit the skills within an organization

To   set targets for future performance

To identify potential for promotion

To provide legal & formal justification for employment decision

To diagnose the hidden problems of an organization

5.3 HR Department of City Bank Limited

Each and every organization is composed of people. Acquiring their services, developing their

skills, motivating them to high level of performance and ensuring that they continue to maintain

their commitment to the organization are essential to achieve organizational objectives. Getting

and keeping the desirable people is the most important thing for any organization. HR

department of any organization ensure this things.

CBL invests extensively in its human resource development to build its employees capabilities.

The goal is to empower staff and create a culture that encourages and rewards staff for their

commitment, creativity and team work in order to respond rapidly to the ever changing customer

needs and the market place.

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AVP/Director

Recruitment &

Employment

AVP/Director

Compensation &

Benefits

AVP/Director Training &

Development

AVP/Director

Employee Relation

AVP/Director Labor

Relation

Vice President-HR

Human resources Department of CBL is one of the most valued departments with the

responsibilities of staffing, training and development, organization development, performance

appraisals, rewarding, control and maintenance etc. With the start of CBL’s banking

operation, the Human Resources Department (HRD) was not as strong and structured as it is

now. The Human Resources Department of BAL consists of nine competent and experienced

executives to carry out the whole responsibilities. The Human Resources Department of

CBL stands in its Head Office at Gulshan-2 under the direct supervision of the top

management. The mission statement of HR Department is; “Employee of Choice, they will

inculcate high performance culture where we will work with fun and pride”.

Now the CBL is trying to apply all sorts of modern HR activities related to their organization in

order to achieve its mission.

5.4 The Structure of HR Department in CBL

In CBL enough to have a HR or personnel department, the personal director and his or her staff

will play a key role in the designing and monitoring of human resources system. CBL is more

likely to help design and implement HR system. A full-time specialist tends to emerge when

organization have about one hundred employees. A standard structure of HR department in CBL

is shown below:

Figure5.1 : Structure of HR Department in CBL

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5.5 Human Resource Management System

Human Resource Management System (HRMS) applications consist of a broad set of business

process and analytical capabilities spanning the employee life cycle, from hiring and on

boarding, personnel and benefits administration, compensation, payroll, compliance,

performance management, succession planning, and career development.

Figure5.2 : HRM Process

5.7Performance Appraisal Techniques/Methods

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

Traditional Methods

Modern Methods

5.7.1 Rating Scales

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HRM Process

Human Resource planning

Recruitment &

Selection

Training & Development

Performance Appraisal

Compensation&

Benefits

Promotion

GrievanceManagement

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)

5.6.1.1Advantages

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

5.6.1.2 Disadvantages

Trait Relevance

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

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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

Problems 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

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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.

5.7.2 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 appraise.

5.7.2.1 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.

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The appraiser is not locked into an appraisal system the limits expression or assumes that

employee traits can be nearly dissected and scaled.

5.6.2.2 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).

5.7.3 Results Method Management by Objectives (MBO)

It aims to increase organizational performance by aligning goals and subordinate objectives

throughout the organization. Ideally, employees get strong input to identify their objectives, time

lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach

objectives. Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his

book 'The Practice of Management'. In the 90’s, Peter Drucker himself decreased the

significance of this organization management method, when he said: “It’s just another tool. It

is not the great cure for management inefficiency … Management by objectives work if you

know the objectives, 90% of the time you don’t.”

5.7.3.1 Core Concepts

According to Drucker managers should "avoid the activity trap", getting so involved in their day

to day activities that they forget their main purpose or objective. Instead of just a few top

management, all managers should:

Participate in the strategic planning process, in order to improve the implement ability of the plan

and implement a range of performance systems, designed to help the organization stay on the

right track.

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5.7.3.2 Managerial Focus

MBO managers focus on the result, not the activity. They delegate tasks by “ negotiating a

contract of goals’ with their subordinates without dictating a detailed roadmap for

implementation .Management by objectives (MBO) is about setting yourself objectives and then

breaking there down into more specific goals or key results

5.7.3.3 Main Principle

The principle behind Management by Objectives (MBO) is to make sure that everybody within

the organization has a clear understanding of the aims, or objectives, of that organization, as well

as awareness of their own roles and responsibilities in achieving those aims. The complete MBO

system is to get managers and empowered employee acting to implement and achieve their plans.

Which automatically achieved those of the organization?

5.6.3.4 Advantages

The MBO approach overcomes some of the problems that arise as a result of assuming that the

employee traits needed for job success can be reliably identified and measured. Instead of

assuming traits, the MBO method concentrates on actual outcomes. If the employee meets or

exceeds the set objectives, then he or she has demonstrated an acceptable level of job

performance .Employees are judged according to real outcomes and not on their potential for

success, or on someone’s subjective opinion of their abilities. The guiding principle of the MBO

approach is that direct results can be observed, whereas the traits and attributes of employees

(which may or may not contribute to performance) must be guessed at or inferred. The MBO

method recognizes the fact that it is difficult to neatly dissect all the complex and varied

elements that go to make up employee performance. MBO advocates claim that the performance

of employees cannot be broken up into so many constituent parts – as one might take apart an

engine to study it. But put all the part together and the performance may be directly observed and

measured.

5.6.3.5 Disadvantages

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MBO methods of performance appraisal can give employees a satisfying sense of autonomy and

achievement. But on the downside, they can lead to unrealistic expectations about what can and

cannot be reasonably accomplished.

Supervisors and subordinates must have very good "reality checking" skills to use MBO

appraisal methods. They will need these skills during the initial stage of objective setting, and for

the purposes of self-auditing and self-monitoring. Unfortunately, research studies have shown

repeatedly that human beings tend to lack the skills needed to do their own "reality checking".

Nor are these skills easily conveyed by training. Reality itself is an intensely personal

experience, prone to all forms of perceptual bias.

One of the strengths of the MBO method is the clarity of purpose that flows from as also. It has

become very apparent that the modern organization must be flexible to survive. Objectives, by

their very nature, tend to impose certain rigidity.

Of course, the obvious answer is to make the objectives more fluid and yielding. But the penalty

for fluidity is loss of clarity. Variable objectives may cause employee confusion. It is also

possible that fluid objectives may be distorted to disguise or justify failures in performance.

5.6.3 Performance Appraisal System (PAS) of City Bank 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 (CBL, 2010).

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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 CBL 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.

5.6.4 Performance Grade in CBL

Definition of different

performance grades 5 (Five)

Performance Categories

Standard of

Performance/Definition

Rating

EXCELLENT (EX)

100% ++ ACHIEVER

Exceptionally exceeded performance

Standard / Targets / Given Work Plan

far above expectation

VERY GOOD (VG)

100% + ACHIEVER

Reasonably exceeded performance

Standard / Targets / Given Work Plan

above expectation.

GOOD (G)

TARGET ACHIEVER

Met performance standard /targets

/given work plan satisfactorily within

expectations.

AVERAGE (AVG)

NEARLY TARGET ACHIEVER

Closely Met performance Standard

/Targets /Given Work Plan, but not

fully satisfactory

BELOW AVERAGE (BAVG)

Performance far below the Standard

expectation / Targets / Given Work

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POOR Plan – A poor performer.

Table 5.3: Performance Grade in CBL

5.6.5 Components of Compensation System

Table 5.4: Compensation System CBL

5. 6.6Job Evaluation

Meaning of Job evaluation:  Job evaluation is an–

Orderly and systematic techniques of determining the relative worth of various jobs within the

organization, So as to develop an equitable wage and salary structure

The two most common methods of job evaluation that have been used are first, whole job

ranking, where jobs are taken as a whole and ranked against each other. The second method is

one of the awarding points for various aspects of the job. In the points system various aspects

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or parts of the job such as education and experience required to perform the job are assessed

and a points value awarded- the higher the educational requirements of the job the higher the

points scored.

5.6.7Objectives of Job Evaluation:

To determine equitable wages differential between different jobs in the organizations.

To minimize wage discrimination on the basis of age, sex, caste, region, religion etc.

To enable management to gauge and control the payroll costs.

Process of Job Evaluation:

Gaining Acceptance Constituting Job evaluation Committee selecting Jobs to be evaluated Describing the jobs Selecting the method of job evaluation Weighting job factors Assigning money values Periodic review

5.6.8Limitations of Performance Appraisal:

The following are the limitations of performance appraisal:

1. Halo effect

In this case the superior appraises the person on certain positive qualities only. The negative traits are not considered. Such an appraisal will no give a true picture about the employee. And in some cases employees who do not deserve promotions may get it.

2. Horn effect

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In this case only the negative qualities of the employee are considered and based on this appraisal is done. This again will not help the organization because such appraisal may not present a true picture about the employee.

3. Central tendency

In this case the superior gives an appraisal by giving central values. This prevents a really talented employee from getting promotions he deserves and some employees who do not deserve any thing may get promotion.

4. Leniency and strictness

Some bosses are lenient in grading their employees while some are very strict. Employee who really deserves promotions may loose the opportunity due to strict bosses while those who may not deserve may get benefits due to lenient boss.

5. Spill over effect

In this case the employee is judged positively or negatively by the boss depending upon the past performance. Therefore although the employee may have improved performance, he may still not get the benefit.

6. Fear of loosing subordinates and spoiling relations

Many bosses do not wish to spoil their relations with their subordinates. Therefore when they appraise the employee they may end up giving higher grades which are not required. This is a n injustice to really deserving employees.

7. Goodwill and techniques to be used

Sometimes a very strict appraisal may affect the goodwill between senior and junior. Similarly when different departments in the same company use different methods of appraisal it becomes very difficult to compare employees.

CHAPTER SIX

FINDINGS AND RECOMMENDATIONSAs 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

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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

6. FINDINGS

The findings existing in CBL are many and explained as follows:

The Head of Human Resource along with the other stuffs do all the HR

activities in The City Ban Ltd. They maintain Human Resource

Information System (HRIS) for their employees.

The major functions performed by performance management are setting goals and

performance standards, communication, coaching feedback, performance appraisal and

development planning for future.

Both traditional and modern methods are being used and modern methods are used

mainly for performance appraisal.

The environment inside the bank are significantly improved for efficient and pleasant

banking activities both for the employees and customers.

Existing PAS helps the management to identify potentiality of the employees

Current PAS practicing in CBL is complex and complicated towards many employees.

Miss match between employee’s expectation and current PAS practicing in CBL.

6.1 RecommendationsBased on objectives, findings and analysis some recommendations have been developed. It would be valuable for the HR to follow these:

The Human Resource need identification should be done by HR department rather thandivisional Head. It will facilitate the proper control of HR on different Branches and itwill be possible to procure the actual number of employees.

The CVs of applicants should be sorted on the basis of degree or skill as early as possiblewhich will save valuable time to internal CV sourcing.

Employees are needed to give adequate training to work and handle clients under pressure. In this case both the branch authorities and higher authorities can persuade each other to train the employees.

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CBL should recruit more capable & experiences employees to speared the products all over the country.

Appraising method should be unbiased and real performer should be appreciated based

on his or her performance evaluation.

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.

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.

6.2 Conclusion

The City Bank is one the oldest private commercial bank in the banking sectors of Bangladesh. It

has 112 branches the bank has huge potentiality to strengthen its position through its

2424employees over the country. The efficient handling of these Human Resources can do this.

The bank has its own style of HR practices. Through efficient handling of this practice the bank

can successfully continue its operation. The analysis of the report shows some positive practices

and negative practices which are need to improve for conducting the employees successfully. If

the bank considers this analysis, this will really help to improve its condition. Human resources

Division of city bank consists of 12 efficient members of HR professionals. This division has

departments in it. These are Recruitment and selection department, Compensation department,

Risk management department, Training department, training institute and HR operation and

services department. These department working so fast that they were able to bring the change

for employee development, management development, organizational development.

Since the banking service especially the private Banks are doing an outstanding business, so it is

clear that the modern people are more concerned about securing their valuable assets and get

high-quality and timely services. For this reason lot of new commercial bank has been

established in last few years and these banks have made this banking sector very competitive. So,

now banks have to organize their operation and do their operations according to the need of the

market. Banking sectors no more depends on a traditional method of banking. In this competitive

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world this sector has trenched its wings wide enough to cover any kind of financial services

anywhere in this world. The major task for banks, to survive in this competitive environment is

by managing its assets and liabilities in an efficient way. City Bank is the most promising bank

in Bangladesh. Every day City Bank endeavor to increase their product and services although

they provide a wide range of product of services to their customers. City Bank is helping the

economy of Bangladesh by remitting of funds both local and foreign. For helping the people the

bank provides bridge financing loan, working capital loan to its corporate clients. As modern

function City Banks provides credit card facility, ATM card facility and any branch banking

facility to its customers. This term paper mostly on the performance appraisal of the Mirpur

branch and identified some valuable information that could make the services more attractive

and also enhance the banks reputation among the customers. With the current performance of the

Bank and with little improvement here and there will certainly make City Bank one of the best

Private Bank in Bangladesh in the near future.

THE CITY BANK LIMITED

HUMAN RESOURCE DIVISION

Name of the Respondent: Mr. NahidTanvir Date: 2/8/2015

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Designation: HR Manager Cell: 58814375

1. What is the total number of employeesand branches of City Bank?

Employees: About2,424

Branches: 112

2. How many departments are there in City Bank?

There are 6 departments in City Bank and these are

a. Financial Division

b. Credit and risk management

c.Human Resource Division (HRD)

d. Information Technology (IT) Department

e. Branches Control & Inspection Division

f. Retail Division

3. Who perform the appraisal? When? How?Performance is evaluated based on set performance objectives which are agreed between the staff and the line manager. There are semi-annual and annual performance review discussions between the manager and the staff where feedback on performance and behavior is given. Final performance rating of an employee is determined based on his / her performance against the objectives and also the behavior/ values displayed in order to achieve those.

4. What type of appraisal method is used in City Bank?

Supervisors Subordinates Peers Clients / Customers Self-appraisal 180/360 degree approach

5. Does City Bank follow 360 appraisal?

Yes

6. What are the problems City Bank is facing during performance appraisal?

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Centralization, lack of Proper supervision.

7. Which motivational theory is used by the supervisors of City Bank?

Both intrinsic and Extrinsic motivational theory are practiced in The City Bank.

8. What steps does CBL follow for training and development of an employee?

The training and development starts from the joining date with induction programs to acclimatize the new hires to CBL. All staff have their career development plans which is a formal document filled up after discussing with line manager and agreeing on career goals. The plan is refreshed from time to time and serves as a reference for future training programs. We have talent management process in place to gauge the potential of an employee and tailor our training offerings to their needs.

Besides, HR seats with each department at the beginning of the year to finalize an annual training plan. Based on this plan, local and overseas trainings are offered.

9. How many times in a year, training is given to an employee?

It is based on individual needs and availability of courses. No set number is followed.

10. What type of training is given?

CBL has thousands of courses to match the differing needs across businesses/ functions and geographies. Training courses offered can be broadly classified into Leadership, Technical Skills, Values, Product knowledge, Personal Development, etc

11. Is there any coaching or mentor policy at CBL?

Yes

12. What is the percentage of employee turnover in CBL?

It is very low, in single digit.

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