A RESEARCH REPORT
ON
Research Report
On
Compensation Management of
BRAC Bank Limited
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Research Report
On
Compensation Management of BRAC Bank Ltd.
Course Title: Compensation Policies
Course Code: HRM 611
Submitted to:
Dr. Nazmul Amin
BRAC Business School
BRAC University
Submitted by:
N.M.Muhtasim Chowdhury
19364026
Summer-2020
MBA Program
BRAC University
Date of Submission: 25th September, 2020
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Letter of Transmittal
23th September, 2020.
Dr. Nazmul Amin
Dept. of MBA,
BRAC Business School,
BRAC University.
Subject: Research report submission on “Compensation Policy of BRAC Bank Ltd”.
Dear Sir,
Presentation of the article entitled "BRAC Bank Ltd 's Compensation Management Policy." This
research is intended to obtain information on BRAC Bank Ltd 's HR, compensation practices, and
problems.
I have scoured through all the requisite data with my greatest effort, studied new things, and uncovered
a whole different era of compensation strategy. Although I didn't relax until I made this a perfect
document, flaws will emerge. If you will accept those errors, I will be thankful.
Finally, I want to share my appreciation for giving us an exceptional journey full of learning and
excitement in the semester.
Sincerely,
N.M.Muhtasim Chowdhury
ID-19364026
MBA Program
BRAC University
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Acknowledgment
I would like to begin by thanking the Almighty Allah (SWT) for giving me the courage and the ability
to finish this report in due time. The organizing of the file was not that easy, it was a challenge to prepare
the contents of this online semester.
I would like to begin by thanking our professor, Dr. Nazmul Amin, BRAC Business School for the
steady leadership, advice and support that he has shown in inspiring my study. Finally, I would like to
thank our loved ones and friends most genuinely for providing trustworthy support from several points
of view, and will be recalled and valued with confidence.
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Executive Summary
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Table of Contents
1
2
Introduction: .......................................................................................................................... 7
1.1
Banking History and Current Situation of Bangladesh ............................................. 7
1.2
History and Present Position of BRAC Bank Ltd ....................................................... 7
1.3
Product and services ...................................................................................................... 8
1.4
Objectives ........................................................................................................................ 9
Main Body of the Report....................................................................................................... 9
2.1
Objective one ................................................................................................................ 10
2.2
Objective two ................................................................................................................ 11
2.3
Objective three.............................................................................................................. 12
3
Conclusion ............................................................................................................................ 12
4
Recommendation ................................................................................................................. 13
5
Implementation .................................................................................................................... 13
6
Reference .............................................................................................................................. 14
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1 Introduction:
1.1 Banking History and Current Situation of Bangladesh
Dacca Bank, established in 1846, was the first modern bank headquartered in Dhaka. They did not
issue banknotes and did a rather limited enterprise. The bank of Bengal acquired it in 1862. In
1873, Bank of Bengal opened its branches in Sirajganj and Chittagong, and in 1900 in Chandpur.
It had 6 branches in East Bengal, Dhaka, Chittagong, Chandpur, Mymensingh, Rangpur and
Narayanganj, after the Bengali partition in 1947.
In early 1971, in East Pakistan, there were 1130 branches of 12 banks. Bangladesh was created by
establishing the Bangladesh Bank in the year 1972 under presidential order no 127 of 1972 (which
came into force on 16 December 1971). The independence banking system was established. The
Order has renamed the Eastern Division of the Dhaka Former State Bank of Pakistan to be the
Bangladesh Bank as the central bank's fully-fledged Office and the entire State Bank of Pakistan
undertaking in and with respect to Bangladesh.
The bank industry in Bangladesh began its journey after independence with 6 nationalized branded
banks, two state-owned specialist banks and three international banks. With access to private
banks, the banking sector expanded rapidly in the 1980s. Following the declaration of Bangladesh,
on 26 March 1972 of the Government of the People's Republic of Bangladesh, the 12 bank firms
that were engaged in business in Bangladesh were nationalized by President's Order No.26 in 1972
entitled "The Bangladesh Bank (Nationalization) Order, 1972." Even if the new banking structure
is very contentious, then no one would deny that it is Bangladesh's economy's lifeline.
Bangladesh has promoted its banking sector as an emerging economy to support economic
development. The nation witnessed phenomenal growth in the banking sector over the last three
decades or so. Bangladesh's banking sector has also taken a step forward by encouraging the
financial incorporation of very rural poor people, whose political instruments are microfinance and
microcredit. This led to the growth and market-oriented monetization of the rural economy. The
rural economy's consumer focus has made the steady transition of capital from rural to urban areas
easier. The banking industry itself, especially state-owned banks, has now become the biggest
threat to sustainable economic development. Despite globally known banking norms, such as the
Basel III agreement, Bangladesh has followed this practice.
1.2
History and Present Position of BRAC Bank Ltd
BRAC Bank Limited is a commercial bank that is headquartered in Bangladesh. It was founded in
Bangladesh under a Banking Companies Act in 1991 and entered on 20 May 1999 in the
Companies Act in 1994 as a private limited company. BRAC Bank will be a remarkable institution
in Bangladesh. The Bank's key focus is to offer a wide variety of account management services.
The Bank 's mission is to provide mass financing to empower large-scale production and mass
usage, and subsequently to contribute to growth in Bangladesh. As the industry leader in
Bangladesh, BRAC Bank intends to set the benchmark by delivering qualified, well-disposed and
completely robotic online administration on a profitable basis that provides consumers around the
nation with business-saving money management. This association satisfied the certainty of
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consumers after its establishment. As a competitive and diverse budgetary institution in the
country, the bank has been productive in situating itself within this short timeframe. Currently, it
is widely accepted by the company network for existing and creative thought and budgetary
structures, from small business people to large shippers and aggregates from top corporate and
outside speculators. It subsequently created a one-of-a-kind image for itself during this short
timeline and advanced remarkable responses to add to the money-saving region of the country.
BRAC Bank is one of the largest banks servicing a range of customers in Bangladesh. It is
considered the best SME bank. The Bank drew attention to SMEs, which raised their share in the
overall loans to smaller companies by 39%, up by 34% last year, to 39 % of the total loans at the
end of 2016 and targeted to reach the 50 % market share of SMEs by 2020.
1.3 Product and services
Corporate Banking 's core goods and services are:
 Working Capital Financing
 Capital Machinery Financing
 Project Financing
 Lease Financing
Working Capital Financing
BRAC Bank provides Working Capital facilities with a portfolio of credit items to satisfy the
regular import needs, local inventory, Duty & VAT payments, overhead costs, advances on
receivables, job order funding, etc. to fulfill finance criteria for day-to-day operational activities
Some of the popular goods for working capital are:
 LC facilities (Sight, Defer & UPAS)
 LATR & Import Loan
 Revolving Loans
 Short Term Demand Loan
 Overdraft
 Bill Purchase
Subject to eligibility under the applicable regulatory requirements, working capital facilities are
available in both local and foreign currencies.
Capital Machinery Financing
The development of every industry depends on investing in the highest standard of machinery.
BRAC Bank funds fresh & refurbished equipment from respected manufacturers across the globe.
Both short-term and long-term credit services are eligible with adjustable loan conditions to extract
the capital machinery. This building also provides resources for green infrastructure and other
environmental and security products. They are able to offer reasonable rates thanks to their top
ranking and access to several foreign lenders.
Project Financing
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BRAC Bank Limited is offering lending resources for new developments and extending existing
facilities in accordance with the potential cash flow. The Bank is nominated for IPPF, LTFF and
numerous other refinancing schemes of Bangladesh Bank and other multilateral bodies to provide
you with favorable terms and conditions for your project expenses. They have also arranged
multiple syndication facilities to arrange vast sums of funds from participating banks against their
customer requirements.
Lease Financing
Lease funding is one of the most convenient long-term means of capital acquisition for machinery,
facilities and vehicles. They have a wide portfolio in lease funding incorporating lease financing
to buy motor vehicles, capital machinery and facilities. BRAC Bank has the expertise of leasing
finance and providing reasonable rates against your lease funding criteria.
Trade Sector is one of the main target areas of BRAC Bank Ltd and strives to provide you with
the best trade goods and services you need to become your favorite trading partner. BRAC Bank
provides a wide variety of Trading goods and services through its central trading office, regional
exchange Centre, manufacturing centers and corporate branches.
1.4 Objectives
The goals behind this research report includes the following;
•
•
•
Defining the problems facing BBL in the field of compensation policy
Suggested compensation mechanisms to resolve the problems facing BBL.
Anticipating challenges that BBL can face in the future.
2 Main Body of the Report
Compensation management is a vital aspect of talent management and development. It uses
financial and non-monetary incentives to draw hires, minimize turnover, improve efficiency and
boost employee engagement. It is responsible for ensuring that salaries and incentives are
sustainable and that compensation packages adapt to the demands of the workforce. People in this
position not only deal with numbers but are also keen to learn the complexities of the
administration of benefits.
In the sense of stability, competition and equity the BRAC Bank is committed to adopting
remuneration policies. For governance reasons, the Board is the sole authority to approve and
control policy on the advice of the Managing Director or the Managing Board. This strategy
extends to all workers employed in the operation of the bank on a contractual basis. Besides, apart
from these individuals, the contribution to the operation of the bank is as follows
 HR temporary
 Outsource through agencies
 Intern
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Here, the pay structure of the bank is primarily dependent on the grade of employment, such as
grade-, grade-, etc. The grade of employment is composed on the basis of an appraisal based on
importance, obligation, place, work existence and decision-making authority.
2.1 Objective one
Compensation problems facing by BRAC Bank Ltd (BBL): A basic concept underneath a
successful compensation package is that one person does not involve another in what motivates
them. A holistic strategy is one that, while retaining consistency, takes account variations in job
responsibilities, commitments, and effects. Compensation given to the employee depends on the
amount of work made, the quality of the work and the abilities of the employee. In addition, there
are a variety of other internal and external considerations influencing the compensation.
The main factor that affects the compensation management decision in BBL:
Management strategy: One significant aspect of influencing business rewards is the policy of the
company. The development-oriented business focuses on attracting workers through paying high
salaries, while the organization focuses on stabilizing itself in the industry and tends to offer staff
in the sector a fair compensation package.
BBL's defense strategy would keep its remuneration prices on average relative to those existing in
the industry. So in BBL, turnover is very high. Payment is perceived to be one of the most
important reasons behind BBL's turnover intention. The goal of turnover is greatly influenced by
better wages. The research reveals that in terms of leaving BBL, personal concerns and interactions
with employers are not very powerful influences. 80 percent of participants felt that the most
important reasons motivating job attrition are fair wages, versatility in case of emergencies,
stability in terms of job aspiration and tremendous work strain. It is observed that in the BRAC
BANK limited, the turnover of male employees is high and the turnover of female workers very
small. Employees who have been hired among them almost 88% of male employees have
voluntarily left the company in the past few years. The findings of the current research indicate
that gender and work satisfaction vary substantially.
Moreover, most workers think that when employed within the company, BBL does not encourage
its staff to seek higher education and other ambitions. Some thought that because of enormous job
stress so they had to miss finals and other exams because the bank was not favorable in that context,
those who started higher study while working could not resume that.
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2.2 Objective two
The 3P strategy is intended to establish a compensation framework focused on the standard
payments for position, person and performance. This initiative, focused on global industry
intelligence and internal policy, establishes guidance for an equal rating system, determines the
criteria for qualifications and lays down short and long-term incentive strategies. The 3P
performance administration methodology promotes the policy, mission and goals of an
organization. It is incredibly pragmatic and thoroughly embedded in the management and
corporate plan of an organization. The 3P framework guarantees the management of human capital
plays a significant role in decision-making and the accomplishment of company objectives.
1. Paying for position
2. Paying for person
3. Paying for performance
The most traditional salary type is probably Job-based Pay. It is normal in many organizations. It's
easy to comprehend and request. Each role in an organization has a particular meaning for the
business. It defines this importance by the name e. g. Support Engineer and level of expertise
(junior, intermediate, etc.), which is the product of internal and external work reviews. These
measures provide market price costs or expected training / experience available for the work. Each
employee's salary is also closely connected with their position and seniority.
Now, pay skill-based is different. Here, pay reflects specifically on the employee and their
particular talents, rather than their position's mere title. In conducting tasks, an ability is gained
and produces measurable knowledge. Employees are compensated with the diversity, depth and
multiple ability levels they possess. More precisely, rather than for the work they are currently
doing, they are paid for the skills they are capable of having. Compensation packages often focused
on skill certifications, rely on the qualities of the individual. Internally or externally, capabilities
may be graded.
Depending on the job grades, compensations, bonuses and incentives are given in BBL. None of
the pay arrangements are the same. It is focused on evaluating the role, responsibilities and
obligations, employee grades and the essence of the work.
So, what's better to pay skill-based pay or job-based compensation?
It will turn into a chaotic spider web of skill certifications, work tests and varying pay scales using
skill-based compensation systems exclusively. Around the same time, if only job-based
compensation were implemented, ability, cash and efficiency might potentially be left behind. In
my view, it could be a smart decision to merge Job-based Pay and Skill-based Pay structures,
because any form of Skill-based Work compensation reflects individual contribution to the
organization, it is possible that employee satisfaction will improve. Workers working in an
engineering center, for example, maybe paying Skill-based, while employees are paid Job-based
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in say facilities administration. Alternatively, while reward programs are skill-based, you might
prefer the base salary to be job-based.
2.3 Objective three
Compensation management is important not only for recruiting top staff but also for holding them
once employed in their jobs. In preparing new hires and getting them up to speed, businesses also
waste large sums of time and resources. An organization that loses a central player to the market
due to bad salary performance not only loses a skilled person in which it has invested, but also
incur additional expenditures in rehiring and retraining for the vacant position.
The most critical aspect of HR is the sustainability of permanent workers within every company.
In the other side, just offering high pay or wage as the key retention process is not always an
established technique. Non-monetary variables also contribute to generating constructive
expectations for the company.
BRAC Bank, with a vast number of workers, is still striving to be creative in implementing new
concepts for maintaining its main workers. BBL provides regular benefits packages at the primary
level, based on position and level. In comparison, they also provide certain non-monetary benefits
and services to be the employee's options.
Moreover, Remote work has now been part of the everyday standard, and analysts believe it's here
to remain beyond the crisis. But remote work can pose a danger to data protection. Distributed
spreadsheets can expose companies to the possibility of large data leaks – an issue that has been
magnified by remote work. Again, Cybersecurity is a major concern which often thought about, or
say it's the problem today, and the rising increase in cyber-crime is alarming. These are also some
major challenges of the 21st century.
3 Conclusion
Right now, one of the most multicultural networking activities in the commercial sector is the
Human Resource Division of BRAC Bank. Since, like numerous banks, there are lots of agents
operating out there, they have only two divisions such as: service and business. One of the focus
points of the assistance division of BRAC Bank is the HR section. They can easily hold up large
numbers of agents in the middle because of having an established help group. As we are possibly
conscious, the HR area of BRAC Bank Ltd. practices a phenomenal organizational approach since
it is a Bangladeshi bank and serves and meets the needs of individuals. This section includes
recruiting and partnerships, compensation and benefits, job training and growth and organizational
advancement. They associate HR support with the needs of the organization in a general sense. As
BRAC BANK (2019) indicates, they are quite eager to have inspiration and to please agents. They
have picked about 5000 + normal stuff and re-appropriated 2000 + officers, as shown by BRAC
BANK platform (2019), and there are 1500 + delegates addressing the explanation for legally
official in various evaluations. The bank's organization sees organized founders and offers extra
jobs and efforts to build them. In brief, BRAC bank's HR division uses policy and recommences
to ensure that calling wants and priorities are reached rather than giving staff wishes.
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4 Recommendation
BRAC Bank's Human Resources Department is a very influential and successful division. But
there are several variables that have to be altered and fixed. On the basis of a personal study, I
ought to suggest something.
 During conversations with various workers in separate departments, the key complaint was
that the pay level is not as high as the workload. This diminishes employers' willingness to
deliver and raise the turnover. BBL would then take this into account in order to make the
pay arrangement employee appealing.
 Bankers also work long hours, often for more than 12 hours a day. The employee is not
only monotonous, but also emotionally and psychologically disturbed. It is important to
plan co-curricular events for recovery in today's busy world.
 Transport services shall be delivered free of charge. The junior officers should be provided
with transportation facilities.
 Jobs satisfaction is a gateway to an organization’s operation and can be influenced by the
internal atmosphere and leadership of the organization. Last creation is an ongoing
evaluation and continuous progress. Assessment is persistence which joins a loop of steps
based on job satisfaction and mission for delegates. The main challenge of measuring
success is to see what needs to be moved forward. The appraisal of mindsets, affirmation
and inspiration of the workers fuses, but is not confined to it. It strengthens the distinctive
affirmation of the problem areas that require change, configuration and delivery of the
updated plan. An overview of work satisfaction is organized by exceptional affiliations at
every pace once a year.
5 Implementation
One of the most integral and main structural elements of an enterprise is the wage system. This is
a systemic and routine technique that rewards employees in their offices for their contributions.
The benefits, incentives, pensions and other services are given to workers reflect compensation.
"The workforce of the 21st century not only works for cash payments but also for" extra, "a practice
known as human resources administration as" benefits. As an HR expert, I would consider
reorganizing BBL 's pay scheme. And by forming a commission, they can enforce it.
According to Grote (2002), performance evaluations are a standardized means to measure the
performance level of the worker. "The researcher has defined the two words used interchangeably
in the research studies as" performance evaluation "and" performance appraisal. "Gruman and
Saks (2011) describe performance assessment as a method by which workers are assessed. The
researchers have argued that performance evaluation scrutinizes the general engagement of the
participant in the company and his / her willingness to reach a higher role in the organization. The
importance of the evaluation framework parties should be realized by the evaluator and the
respondents. If not, the evaluation will be unpleasant for both the evaluator and the respondent.
The BRAC Bank HR department has restructured the appraisal program. They will assess the
success of workers more often than ever.
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According to the World Bank concept, 'empowerment provides individuals or communities with
adequate information to help them to make informed choices so that the outcome of those choices
leads to rational decision-making. Hopefully, these options would not only help the person making
them, but also the company or corporation, which helps this empowerment to be used. Workers
are supposed to be motivated whenever they are offered the ability to engage in decision-making,
target sets, and motivating initiatives. The more inspired the workers are, the more they are devoted
to their jobs, according to Kaye and Jordan-Evans (2001), which would contribute to
organizational progress. HR will plan either a final discussion or a consultation before taking any
big decision. Employees will feel special.
In his study, Samganakkan (2010) identified human resource strategies such as schooling,
evaluation method, and compensation as critical determinants of employee engagement. Such
activities play a significant role in the productivity of staff. The researcher said that companies that
wish to be competitive need to minimize attrition and make a salary package in such a manner that
the decision to remain has a positive effect.
6 Reference
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