Term Paper

HRM in BRAC BANK

Introduction

Theory Introduction

Human Resource Management The focus of human resource management (HRM) is to

manage people within the employer-employee relationship (Stone, 1998). It is the

strategic and coherent approach to the management of an organization's most valued

assets - the people working there who individually and collectively contribute to the

achievement of the objectives of the business (Armstrong, 2006). Recruitment and

Selection of employees are the most important tasks that HRM does.

Recruitment is the process of attracting a pool of suitable applicants for a vacant position

and Selection is the process of choosing the best person for the job from the pool of

applicant (Dessler et. al.2004). There are many types of techniques from where the

process of recruitment and selection process can be done.

In the current scenario, organizations operate in a very competitive global

environment. The knowledge of all aspects of management is not only important but also

very essential. One of the important areas of operation in management is Human

Resource Management. Human Resources Management has mainly three functions,

acquiring human resources, maintaining them, and developing them. HRM is resource

centered which directs human resources and represents appropriate culture and climate

for the employees in the organizations. Out of all assets in an organization, Human

Resource is the most important and dominant which give companies edge over others.

Thus, organizational management is buying commitment of employees by successfully

implementing motivation policies and principles (Graham & Bennett 1998).

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HRM in BRAC BANK

Organization Introduction

Company Background

BRAC bank Limited is an affiliate of BRAC (formerly the Bangladesh Rural

Advancement Committee), one of the world’s largest non-governmental development

organizations founded by Fazle Abed in 1972. The bank’s objectives include providing

comprehensive commercial banking services, building a profitable and modern, full-

service financial institution, and pursuing profitable market niches in the Small and

Medium Enterprise (SME) business sector not traditionally met by conventional banks.

While BRAC specializes in microfinance, health and education services for communities

in extreme poverty, BRAC Bank was established in 2001 primarily to provide loan and

general banking facilities to small-to-medium-sized enterprises (SMEs) in Bangladesh.

This sector, comprising businesses such as grocers, corner shops, clothes retailers and

some small manufacturers, had traditionally been under-served by the established

banking community. BRAC Bank is now the fastest growing bank in Bangladesh both in

deposits and credit, making average SME loans and also offering loans and credit cards

to consumers.

Company Vision

Building a profitable and socially responsible financial institution focused on Markets

and Businesses with growth potential, thereby assisting BRAC and stakeholders build a

"just, enlightened, healthy, democratic and poverty free Bangladesh (BRAC Bank, 2010).

Company Mission

Sustained growth in 'small & Medium Enterprise' sector

Continuous low cost deposit growth with controlled growth in Retained

Assets

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HRM in BRAC BANK

Corporate Assets to be funded through self-liability mobilization. Growth

in Assets through syndications and investment in faster growing sectors.

Achieve efficient synergies between the bank's branches, SME unit offices

and BRAC

Objective

For the report assigned in the course HRM 501, I worked on a company’s recruitment

and selection process. This is our core objective. Another objective of this report is to

match the learning of Human Resource Management with the real life problems.

Scope of the Report

Most of the Banks in Bangladesh has Human Resource Department. It is very important

to learn about them. For doing report we need to learn all the basic elements of HRM.

Because theory of HRM is related with our practical experience (hire employee, getting a

job).

By doing this report we have sufficient knowledge about how a company’s HR

department run, which we help us later stage of our life.

Methodology

To prepare this report we have collected data from different materials. Then we have

conducted a secondary study. After that we have contact a respective HR manager of

BRAC Bank, which is our primary data. We have also collected data from the internet,

books and journal, this way we collected secondary data. We collected much information

from several websites. Thus, we have used both primary and secondary information to

prepare this report.

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Limitation

We face some difficulties to finish this report. The main limitation is time. We have to

finish this report with limited time, which is insufficient. Communication problem with

Bank officials is another limitation. Insufficient primary data also hinder our progress.

Officials are reluctant to disclose their internal information to us.

HRM and the Banking Sector

For many years, Banks like other institutions have been handling this sensitive activity

through respective personnel departments. This means human resources were managed

like other physical assets e.g. pieces of furniture, calculators, equipment and appliances.

Personnel departments were primarily engaged in approval of leaves, handling of staff

loans, issuance of show cause, conducting disciplinary enquiries and termination from

service. Recruitment was a routine function and was done in a mechanical way to hire

people with specific educational background irrespective of their real value to the

institution. Success stories of large banking companies have been evident of the fact that

HRM is quite different from management of physical assets. Human brain has its own

peculiar chemistry. Its strong sensory and decision-making capacity has to be greatly

emphasized by the employers. The work forces constituting all levels of employees are

constantly thinking in many dimensions (Dawn packed with overseas appeal, 2004).

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HRM in BRAC BANK

HRM in BRAC Bank

Defined here, infrastructure requirements consist of those functions and activities

necessary for the effective management of a company's human resources. The major

purposes of these activities traditionally have been to attract, retain, and motivate

employees (Schuler & MacMillan, 1984). We refer to them as human resource

management (HRM) practices.

The result of effectively managing human resources is an enhanced ability to attract and

retain qualified employees who are motivated to perform, and the results of having the

right employees motivated to perform are numerous. They include greater profitability,

low employee turnover, High product quality, lower production costs, and more rapid

acceptance and implementation of corporate strategy.

All the excellent organizations surveyed made effective use of their human resources, and

they did this through their personnel and human resource management (Peters and

Waterman, 1982). The BRAC Bank Human Resource Department looks similar to the

Organogram of next page.

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HRM in BRAC BANK

There are five different areas of Human Resource of Management in BRAC Bank. These

are:

Recruitment and Selection

Training and development

Appraisal and Maintenance

Compensation

Employee relations

We discuss here only first 2 topics of HRM.

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Recruitment Process of BRAC Bank

BRAC Bank presently has approximately 1500 employees working for the bank. The

number of employees was only 745 in the year 2006. So, in the span of these two years

the bank has already doubled its workforce. It suggests that the bank has been giving a

serious thought to the Human Resource Development. BRAC Bank has increased its

effort to find out the best possible employees and utilizing their talent to succeed. BRAC

Bank has three different levels of employees, which are –

Executive/Support Level

As we have seen from the organogram of BRAC Bank the topmost position falls under

this category. The employees that fall under this category are the CEO, Vice President

(VP), the Chief Risk Manager, Chief Treasurer, Heads of Financial Control Unit (FCU)

and CBG and Residence Vice President (RVP). They are the most influential members of

BRAC Bank. Their recruitment method and sources are obviously different as they are

the top-level management. So, their recruitment must be handled with intense care. They

review everything. In recruitment, knowledgeable person is needed. Good background is

observed and experience is appreciated.

Operational Level

The employees are the ones who take orders from the top level mangers and direct their

subordinates to achieve overall organization goal. The employees who fall under this line

of employees are the different Heads or Line Managers of various departments and their

Assistant Managers. They maintain documentation; maintain paperwork & entry in the

system. An experience of one year is appreciated so that the work can be done with

accuracy. Fresh candidates are recruited with little English skill, Computer skill, entry

activities etc.

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HRM in BRAC BANK

Field Level

This level’s recruitment is handled with care because this is the potential future field of

finding company’s next top performers. The positions in this level include the Assistant

Officers and Line Staff. Although the line staffs are important but the assistant Officers

are the ones to look out for. Most of them are fresh graduates trying to learn the various

aspects of working life. This is a very good opportunity for the bank to direct the most

talented employee such a way so that he/she can benefit the bank in future to a much

greater extent. Knowing this BRAC Bank gives an extra effort in the recruitment of fresh

employees especially Assistant Managers.

As we know that not every position in the organization has the same recruitment process.

For obvious reasons the selection and recruitment process are not the same. But all

selection process has some basic outlined steps. BRAC Bank also has a process like that.

We are going to discuss the general selection process of the bank in the further parts of

our report.

Before going deep into selection process we must discuss the utmost important pre-

requisite of the selection process. It is Job Analysis. BRAC Bank, like most o the

responsible and successful corporations, conducts a detailed job analysis to know the

different aspects of a particular job. The methods that BRAC Bank uses to collect data

about the job are describe below –

Interview

BRAC Bank conducts a formal or informal interview (depending on the position) to

collect data. This interview can be a structured one or an unstructured one. Both are used.

Like all other process it also has its pros and cons.

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HRM in BRAC BANK

Questionnaire

The Job Analyst gives the questionnaire to the incumbent to fill up the questionnaire. The

questionnaire contains some basic job related information, which helps the job analyst to

make the job description form. The main advantage of this method is that a large number

of employees can be questioned at the same time and it is less costly. Questionnaire is

created by some external HR agencies, BRAC University because time limitation and

cost is higher.

Observation

This is another method used by the bank to collect job information. In this method the

superior observes the employee and collect data. This is more of a back up method of

BRAC Bank. It uses this just to verify the data found primarily. After collecting the data

from the employees it is a must to verify that data. BRAC Bank does that by the

observation along with a recheck of the employees just to make sure that the integrity and

truthfulness of the data is not sacrificed.

Selection process of BRAC Bank

BRAC Bank uses different methods and sources for their three levels of employee. But in

general BRAC Bank uses the conventional selection process. The steps include –

Planning And Forecasting

Reviewing Inside Sources

Outside Sources

Completion and Screening of Applications.

Aptitude Test

Preliminary Interview

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Follow-Up Interview

Reference Checking

Medical Test

Final Decision

The steps are further discussed in the following parts of the project.

Planning and Forecasting Employee needs

Before selecting any employee, the bank must know what its needs are for that particular

year. No organization can have an effective and efficient selection unless it knows what it

wants and how many it wants. BRAC Bank uses some methods to forecast the employee

needs. These are –

Budget Cycling: The first method that BRAC Bank uses is to predict its

future employee needs according to the past proportion of budget and

employee needs.

Revenue Growth Activity: BRAC Bank also predicts its employee needs

by the finding the correlation of revenue and the number of employees

needed to earn that revenue.

Trend Analysis: The trend of hiring employees is also a good measure of

the employee needs in the future. Occasionally, BRAC Bank uses this

method to predict the future job needs.

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HRM in BRAC BANK

Reviewing Inside Sources

After deciding what number of employees the bank needs, the concerned Department’s

manager watches if there is anyone within the bank to meet the requirement of the vacant

position. Senior managers discuss the strengths and weakness of the employee, check

his/her past performance and decide on the suitability of the employee in that position,

higher or similar rank in the organization.

Different sources are used in different level of job. For example, a source that is used for

Executive level hiring is less likely to be used for any other level’s position.

From field level to operation level, selection is arranged on the basis of performance,

recommendation of the supervisor etc. The external sources are often expensive. So,

sometimes the HR department is informed to mail the list of the interested internal

candidates. Then interview is done on the basis of the recommendation of the head of the

department and he is recruited.

Outside Sources

If the employee is found from the internal sources, then there is no need for further

recruiting. But if the employee is not found then the bank has to look for outside sources.

The outside sources can be different for every level. From our interview with the HR,

Manager & Administrator, we know that the outside sources can be –

Sources Level most likely to be used

Executive Recruiting Executive level

Employee Agencies Executive level

Personal Sources Mid level

Previous CV’s Fresh/mid level

Circular Fresh/mid level

Interns Fresh level

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HRM in BRAC BANK

Completion and Screening of Application form

After deciding what sources to use, BRAC Bank calls for applications from the interested

candidates. The screening of the application is very critical. The main problem here is

that some of the applicant cannot write a decent, proper application. So, many gets

rejected even if they might have been qualified for the job. But their inability to write the

application gets them rejected. HR has to go through so many applications that it feels

that the ones, which are written according to the requirements of the job and are qualified

for the job, should be kept. One important thing to consider is to see that screening is

done only on the basis of qualification

Aptitude Test

BRAC Bank takes an aptitude test of the candidates for the Mid/Junior level position. No

such test is required for the executive level. This test is done to measure a particular

candidate’s ability to learn and perform in the job according to his/her learning. It

measures verbal ability, numerical ability, reasoning ability etc. of the candidate.

Preliminary Interview

This interview is done to scrutinize applicants on the basis of different personal attributes.

In the interview panel, BRAC Bank often invite the high profile personnel form inside

and outside their company, like their Managing Director, respective department head,

some executives from Central Bank, teachers form BRAC University etc. that means in

order to enrich their interview body they bring high profile experts also.

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Figure 1: Flow chart of recruitment and Selection

Line managers Discussion

Other Branches

Foreign BranchesInterns

Present Brach

Aptitude Test

Preliminary Interview

Follow Up Interview

Reference Checking

Completion and Screening of Applications

Medical Test

Final Decision

Outside Sources

Circular

Interns

Previous CV’s

College Recruiting

Fresher Level

Executive Level

Review Inside sources

Forecast future needs

Employee Found

NoYes

Terminate Recruiting Continue Recruiting

Employee Agencies

Executive Recruiting

Previous CV’s

Personal Sources

Circular

Mid

Level

HRM in BRAC BANK

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HRM in BRAC BANK

Follow-Up Interview

BRAC Bank uses a second or follow up interview for further scrutinizing of applicants.

This interview is done to determine the suitability of an applicant for a specific job

position. The main purpose of this interview is to narrow down the number of applicants

on the basis of some requirements of the job.

This is done only when the number of applicants left after primary interview is too high and there

is nothing much too differentiate them. So, a thorough interview is taken to further narrow down

the number of applicants.

Reference Checking

BRAC Bank gives a huge emphasize on reference for executive and mid level.

Professional references are preferred and given more value. It is because of the fact that

most of the times the personal references do not give the right information about an

applicant. So, professional references are more valued. To verify this reference the most

convenient method is used such as e-mail, phone call, letter etc. But phone call gets the

preference than e-mail or any other method.

Medical Test

If the applicant pool is narrowed down to only one or two, then the bank take a medical

test to ensure that the applicant doesn’t have any illegal habits and is able to perform the

job.

Final Decision

The final decision depends on the report of the medical test and the preference of the

concerned departments. HR and that particular department seat together and decide which

applicant to chose.

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HRM in BRAC BANK

Training and development

Employee training and development is any attempt to improve current or future employee

performance by increasing an employee’s ability to perform. The need for training and

development can arise for many reasons. Job applicant with insufficient skill may be

hired; technological changes that result in new job skills can occur; organizations can

redesign jobs and also decide to develop a new product requiring technologies not used

before. In some of these cases, the need for training and development can be immediate

and unplanned or can anticipate and planned for in the future. Increasingly, employers are

realizing how important it is to provide training Advertisement development if they are to

stay competitive and profitable.

Employee Orientation

The employee orientation program of BRAC Bank is arranged so that it can ensure a nice

morning for a new employee who hints a sheer glimpse of rest of the day in order to

avoid reality shock and make employees clear about what is expected from them and can

be expected by them. They are introduced to the universal set of shared corporate values

to guide the way to work with colleagues, customers, suppliers and other key

stakeholders to help build the BRAC Bank.

In BRAC Bank, this orientation is done with certain importance. According to the

management of BRAC Bank orientation is very significant as they arrange the formal

orientation program regularly. They also said that for operational level and executive

level it is very important.

Methods of training and development

For every employee, every year there is a 40 hour training program. Mainly these

trainings are in house. For that every department has planning, like on every week or

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month they send 2 or 3 employees for training. For in house training- there will be

lectures or employees go into a department and see how the entries are done.

BRAC Bank aims to obtain and maintain best quality of their internal customers in line

with its objective to earn maximum customer satisfaction where the word ‘customer’

indicates both internal and external customers. One of the main objectives of the training

and development programs is continuous improvement of the human resource so that

they can not only cope with the rapidly changing, intensively competitive global business

market but also launch revolutionary banking system. In order to get people energetic,

motivated, self driven and learned, progressed and grown within the bank, human

resource department follows some systematic, standardized agenda in every step of

training and development process. BRAC Bank follows following training and

development techniques in order to ensure continuous improvement of its human

resource:

On the job training (OJT)

Strengths Based Development process

Mentoring

Leadership and Management Development

Improvement through performance measurement

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ConclusionBRAC Bank is one of the most successful banks in Bangladesh. It has a very mature

Human Resource Department. It follows clear set of rules to run the HR Department.

Their employee recruitment and selection process, skill development process, employee-

employer relationship is up to the standard. While making this report we saw few lacking

in different aspect, which Are:

While recruiting from inside, BRAC Bank doesn’t give a circular to the

employees. The bank just discusses among the managers and decides on the

position. The employees get no chance to express their will to join get particular

position, at least a chance. To us, this is a problem which needs to be rectified

because everybody deserves a fair chance.

According to a HR Manager Mr. Jamil, most applicant get nervous while the

interview. So, many of them can’t perform to their potential. It is a very bad thing

for BRAC Bank. The bank also doesn’t try to make the applicant comfortable in

the interview.

Even though BRAC Bank offers a broad spectrum of training and development

programs there are very few opportunities to enjoy them. The jobs need to be

done are very much repetitive, tedious and most of the time employees need to

work for usual office hours. Boredom usually leaves few spaces the employees to

enjoy on the training programs.

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Recommendation

Here are some recommendations we think BRAC Bank should consider for their

recruitment and selection process:

To overcome this internal recruiting problem what we suggest is a redesign of their

internal selection process. It is because everybody should have a fare shot at the

vacant position. The management may not know about the employee of another

branch who has enough potential to fill up the job.

The first thing the bank has to do after a position is vacant is that it should give an

inside circulation to call for application from the employees. The employees have to

be notified about the vacancy. This can be done through sending an e-mail or letter,

which they already have. The best way would be to post a notice on the office notice

board beforehand. This way the bank would have done the best it can do to get the

best employee from the bank. Even after that if some qualified person doesn’t apply

then it’s the employees who missed the chance.

Sometimes while selecting from inside, there is a potential chance of any kind of

favor. This thing has to take care of. The screening of the application should only be

on the basis of qualification, nothing else.

The interview should be proper and formal. The bank shouldn’t take it easy because

it’s the employees giving interview. Any kind of negligence could lead to a potential

wrong decision, which may harm the company for a very long time.

Taking the advantage of technological improvement the bank can share more

information and thus upgrade training and development process. Moreover the

company need to be aware not only about developing more training techniques but

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also about ensuring that employees have enough time to enjoy them. The bank should

provide the employees a flexible work schedule.

Final ConclusionBRAC Bank is a way ahead in terms of its business, strength, vision, management

services, and human resources. It works in the most advance way possible in all their

activities that make it easy for them to achieve their desired goal with a less effort.

For BRAC Bank to flourish in the country, coordinated effort has been made by all its

departments. Not to mention HR department among them outstands in all respects. They

are always ahead of current thinking with new practices, concepts and management

techniques.

HRM department operates at the center of the business, managing the dynamic people,

policies and practices. Skills and competence are ensured to align with that of corporate

objectives.

The bank is trying to be very flexible and is capable of adjusting to any change

whatsoever. This is very important for any bank to operate successfully in Bangladesh,

where many strong competitors are present. BRAC Bank’s establishment and success

with the HR department has greatly contributed to a highly motivated labor force

compare with other companies. The bank is trying to establish a flexible HR system, so

that top management can constantly stay updated concerning the performance level of

their respective personnel. They are trying to develop effective and morale boosting

compensation packages. The company's employees are very willing to accept changes.

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References

Armstrong, M. 2006, A Handbook of Human Resource Management Practice,

10th Edition, Kogan Page, London.

Bracbank, [online], retrived/visited 12/03/2010, Available at :

http://www.bracbank.com/company_profile.php

Dawn, [online], retries/visited 13/03/2010, available at :

http://www.dawn.com/2004/10/04/ebr7.htm

Dessler, Griffiths, Lloyd-Walker, 2004, Human Resource Management, 2nd ed.,

Pearson Education Australia, U.S.A.

Graham, H & Bennett, R 1998, Human Resources Management (Frameworks

Series), 9th ed., Pitman Publishing, U.S.A.

Peters, T & Waterman, R 1982, In Search of Excellence, 1st ed., Grand Central

Publishing, U.S.A,

Schuler, R & MacMillan, I 1984, Gaining Competitive Advantage through

Human Resource Management Practices, 1st ed., John Wiley & Sons. Inc.

U.S.A.

Stone, R. 1998, Human Resource Management, 3rd ed., John Wiley & Sons

Australia Ltd, U.S.A.

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